Full text of Commercial and Financial Chronicle : May 17, 1951, Vol. 173, No. 5012

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"cWIEKf
ESTABLISHED 1S39

1951

MM 18

RBN1NISTRAT1

BUSINESS

Ultui

Reg. U. S. Pat. Office

Volume 173

Number 5012

New

York, N. Y., Thursday, May 17, 1951

Price 35 Cents

Copy

a

EDITORIAL

Economic Outlook and

As

We See It

The

It is not

from the benevolence of the butch¬
er, the brewer, or the baker that we expect
our
dinner, but from their regard of their own
interest.

We

address

ourselves not to

humanity, but to their self-love, and
talk to

Treasury Should Heed

Director, Economic

Research

Chamber of Commerce

their

Reviewing

never

citing

them of our own

necessities, but of
their advantage.—Adam Smith.

By

Department,

of the

United

States

Insurance Co.

current business

national and

national

tensions

Johnston and Price Stabilizer Michael V. DiSalle
familiar with the familiar sentences of 4'the

threat of deficit spending, heavy construction
activity,
and forthcoming higher wages as

father of modern economics"
quoted above, their
sermons
late last week to a number of indus^

Though stating

are

trialists could be construed

what's

wisdom.

But whatever their

losophies more familiar
politicians, such appeals

a

than

traction

they were making on
afraid, not likely to be

as

that occasion are, we are

particularly effective in the circumstances
which they were made.

and

Deflationary

inflationary

and

with

under

ary

One

in

people

must

of

manner

as

*

i

a

respects.

Con¬

in parallel.
will

truth

asked

to work best
little uncertain

a

take
of

over

and

have

earners

have

the
we

Continued

on

shaping the financial and eco¬
nomic future of the United States as
well as that of a large
part

We
a

PUBLIC

on

page

28

dramatic

thh

ISSUE

Sherwin

C.

Through these two

Stock

Exchs.

31 MILK STREET, BOSTON 9, MASS.
Tel. HAncock 6-8200

BROADWAY,

Tele. BS 424

NE%

Tel. worth 2-0115

our

A

/
*An

,

;

National

N. J.,

Continued

*"'■

y

address

by

Mr.

Badger

Association

of

the

at

Mutual

31st

Annual

Savings

Banks,

on page

Edison Electric

Institute, and also contain
York.
'

R. H. Johnson & Co.

STATE and MUNICIPAL

Atlantic

across

Municipal

BONDS

Bonds

Canada

Monthly Commercial Letter

SECURITIES

YORK 5, N. Y.

Tele. NY 1-315

64 Wall

Street, New York 5

BOSTON

Troy

THE NATIONAL CITY BANK

PHILADELPHIA

Albany

Buffalo

Providence

Scranton

Wilkes-Barre

Williamsport

Washington, D. C.

Ailentown

^Canadian Bank

OF NEW YORK

Harrisburg

Department

THE CHASE

NATIONAL BANK
Head

Bond

f

Bond

Dept. Teletype: NY 1-708

Office: Toronto

New York Agency: 20 Exchange PI.

OF

THE

CITY OF NEW YORK

Portland, Ore. San Francisco Los Angeles

We maintain active markets in

CfJLe

Dominion of Canada

Interna! Bonds

Bond Fund

Underwriters and

Distributors of Municipal
BOSTON

CO,

OTIS & CO.
Established

BOSTON

Chicago
Los

Angeles




1899

CANADIAN

Light & Power Co.
...

&

Co.

Dohixiox Securities
Grporatioti

MEMBERS NEW YORK STOCK EXCH.

40 Exchange Place,

CLEVELAND
New York

Chicago

Denver

Dallas

Cincinnati

Columbus

Toledo

Buffalo

115 BROADWAY

NEW YORK

COMMON

Analysis

request

New York 5, N. Y.

IRA HAUPT&CO.
Members New York Stock Exchange
and other Principal Exchanges

III

105 W. ADAMS ST.

Broadway, N. Y. 6

WOrth 4-6000
•

upon

DEPARTMENT

ESTABLISHED 1891
'

BONDS & STOCKS

Superior Oil
Company of California

Goodbody

(Incorporated)

111 Devonshire Street

New York

Ltd.

or

VANCE, SANDERS &

Iowa Electric

Canadian

and

Corporate Securities

CANADIAN
.

Great Plains Development,

.

Prospectus from authorized dealers

.

Placer Development

-

•

CHICAGO

Teletype NY 1-702-3

WHItehall 4-8101

Boston

Teletype NY 1-2708

Telephone: Enterprise 1820

of

City,

'

600 Branches

Seattle

OF

32

Convention

May 9, 1951.

pictures taken at the Annual Outing of the Bond Club of New

INVESTMENT

duPont, Homsey & Co.
120

events

monetary authorities were
telling us* they had abandoned a policy that had been
%■
'

i

Request

Boston

surely be
This past March

fiscal and

upon request

&

policy,

will

SOON—The "Chronicle" of Thursday, June 14, will feature the

Established 1927

York

in fiscal

which

State and

Bought—Sold—Quoted

Members New

of

issues. A few days later,
federal v Reserve removed its
bids for various Treasury

issues.

Badger

Common Stock

on

change

effects

& IRON

Circular

the

of

in the early stages of

very far reaching.
Jthe Trea#iiry, ,ahhpunced an offering
of
23A %
long-term bonds in ex¬
change for two outstanding long-

the

Telephone Association, White Sulphur Springs, W. Va., May 15, 1951.

UTILITY

now

are

pegged

by Dr. Schmidt before the United States Independent

proceedings of the Annual Convention of the

VALLEY MOULD

savings

companies.

in

Now

Forces

Continued

30

page

as

broader standpoint, fiscal
a vital influence

a

term 2Vz%

In
sizing up the economic out¬
look, there are some deflationary
forces that must be weighed in the picture.
(1) While the "war or peace" sentiment shifts from

An address

such

policies will exert

the

*

subject

in the business

are

institutions

a

civilized world.

or-

so

fiscal

government

life insurance

the industrialists.

what, precisely, is meant by

about

Obviously, this is

But from

have had since Korea.

Deflationary

Reserve.

banks and

to

situation

we

high-pressure

talk

investing the funds of

when
as

to

of great importance to all of us who
of

are

are

forces

democracy." There may be a good
in what these
gentlemen are re¬

country in which wage

been

be

Dr. E. P. Schmidt

a

have

Deflationary and inflation¬

seems

ex¬

possible

as

Federal

to

recourse

policies and the interest rate.

everyone fears imminent defla¬
tion, the contraction forces take over
and we tend to have a depression.
If everyone fears that inflatiorf is
imminent then the expansionist

kind

ported to have said, if what is meant by this term
is

in the

both

without

If

Some

wonder

the term "in
deal

same

us

pressures

much financing

as

new

which is in the ascendancy.

once

the

several

be

supply,

present, of course, in
economy at
all times.
Our

economy

the cost of living moves up, if
there is any way to
prevent prices from rising
when wages
generally have moved up and are
still moving up.
They could be excused, too, if
they inquired whether the unions have been lec¬
tured

us.*

forces

every

they were speaking
might well ask, when they are told that "in a
democracy" there is no way to prevent wages
rising

done

I

facing

expansion forces will operate

The industrialists to whom

from

should

basis for optimism exists.

period ahead will be unique in

to

money

borrowing be done at rates attractive to in¬
vestors, and warns against excessive tax levies. Holds
it is logical to offer a tax advantage to those who
forego
spending and thus save.
Hails end of Treasury's
Keynesian doctrines.

inflationary forces.
Washington as to
confusing and contradictory, holds

are

pansion of

Urges

pronouncements from

The economic and business conditions

knowledge of phi¬

economists

to

ahead
'/•;

strained, not to
perverted, interpretation of Smith's ancient

say

as

borrowing by Federal

new

Government and points out, in order to avoid further

and

Stabilizer Eric

assumed that Economic

one

Insurance executive foresees

situation, Dr. Schmidt, though
deflationary forces such as reduced inter¬

some

SIIERWIN C, BADGER*

Vice-President, New England Mutual Life

heavy inventories,
finds inflation and expansion factors still dominant.
Cites progressive enlargement of defense
expenditures,

If

Verdict oi Free Market

Washington Scene

By EMERSON P. SCHMIDT*

Chronicle

The Commercial and Financial

h

.

.

Thursday, May 17, 1951

.

(2042)

The

MARKETS IN

TRADING

Hajoca Corporation
Stock

Kearney & Trecker

Corp.

1920

New York 5

of

The

stocks

favorite

my

safely

Rights & Scrip

best
I

have

ffipONNELL&fO.
Members

120

New

York Stock

New

York

Exchange
Exchange

Curb

$ 1.4 0
share,

S

BROADWAY, NEW YORK
Tel. REctor 2-7815

of

basis

Trading Markets

American Furniture

Co.

Dan River Mills

Moore Handley

Hardware Co.

Tele. LY 83

19.

zero

for

Limited
Producing

Worth $7 Per Share

Trading market

-

maintained

Analysis available

on

dividend

the

vere

one

share.. .$12.75
share..;.... 20.65
per

Accumulated dividends:

pfd. share 1950 .

Both classes entitled

13.47
9.27

^

2.11

to $11.00 plus

accumulated dividends in liquidation

Sales 1st quarter

1951 more

than double 1950
ON

NEW

growth; out

of

r ecommen

Ronson does
ness.

The

every

country as

in
the best of its
known

is

product

kind, and the trademark has be¬
come
a
byword. Sales offices or

comparison

grade

market.

could

se¬

suffer

se¬

found

I

18%

an

EXCHANGE

amounted

These sales which

consolidated

not

the

in

parent

accounts. Profit margins
after taxes in England are higher
than.in. the United States.
Only

company

received

dividends

England

from

included in the parent income

are

soundl.y

Were total British earn¬

account.

cutting of costs, still earn enough

ings last year would have equalled

regular dividend.

$1.40

pay

found

that

lost

if

18%

the

of

I

Santa

total

Fe

$4.03

the

reve¬

and operating costs did not
the interest on the gen¬
cov¬

share as compared to
share reported.
has already introduced

per

$3.54

first

a

superior compressed gas lighter.

Sales have been increased but not

the point where they

interfere
ered.
That was quite a shock.
I with the growth in business of
could hardly believe it, but the
the liquid fuel lighters. The com¬
facts are there. Under this severe
pany
is very carefully studying
investment

$1.70

test,
share

per

enough to

cover

Ronson
earns
after taxes,, or
the regular $1.40

dividend, while Santa Fe general
4s rated AAA earn $2.1 million
hefore

the

taxes,

interest

or

about

requirement

for

the

*

alone

7.8%.

gift

as

The

provided

a

yield

The additional 5.7%

far

as

results

lytical test

were

high

was

severe

with

gear

potentialities
are

a
•

ana¬

confirmed with¬

best

Low 21/2

in

short period of time.

a

the

end

of

NIELSEN, GORDON
& HALL
120

York

Stock

Broadway, New York 5

Telephone

Teletype

BArclay 7-7340

NY 1-2739




Sales in

Chronicle"

re¬

call to my

at¬

for this

wrote

Forum

Security
contained

I
a

of one of
guaranteed

which

stated

I

I

New York
Rail stocks
security

the

was

move

sold

been

The

lighter

gas

that 45 million lighters

fuel

liquid

using

the

of

into

lighter

gas

Ronson

in this

have

ander;

Harris,
proven

Works, Inc.,

leadership of Alex¬

Now

my only way to
under the above

possibly

writing

to sa.y that ; this is
still the security I like best! The
reasons now are even more perti¬

is

heading

nent,

best,
to

declined
a

strike.

more

than

climbed to

ever,
this

this

and

in the

Its sales growth is in the

cut

the extra dividend.

share

last

year

This

only 95 cents
so

that the

has

and

109

at

when

market

was

year

promises to establish a new

ex¬

per

idends.

>

'

The stock is listed on the New

free York Stock Exchange.

Gersten & Fkekkel
150
Tel.

its long and un¬
interrupted dividend record Of 51
years
and its more than gen¬
erous income of $8.75 a share.
advantages

.

.

of the "excess

taxes," the Rails, in the
of
experienced
investors,
on
new
stature because of

took

propensities

shelter

tax

against the inroads which Federal
and
"excess
profits taxes" will
be making on

soon

Tel. NY 1-1932

DIgby 9-1550

Giant Portland Cement

Continental Sulphur

& Phosphate
<,'

Houdry Process
Atlantic City

Electric Rights

Pennsylvania Railroad
Central Electric & Gas

Central Public Utility

5i/2s /

American Marietta

.

.

With the advent

their

New York 7

Broadway

.

profits
eyes

Security Dealers Assn.

Y.

N.

Members

its

considers

one

dustrials

and

a

of

Henry B.Warner & Co., Inc.
Members

Phila.-Balto.

Stock

123 South Broad St.,

Bell System Teletype

Phila. Telephone

KIngsley 5-2700
New

York City

Direct

wire

Exchange

Phila. 9, Pa.

*

PH771

Tel.: BOwling Green 9-4818
to Ames Emerich. Chicago

In¬

numerous

number

cor¬

porations in other fields—drugs,
containers, etc. Because of their
invested capital base, the
Rails will enjoy large exemptions
from the excess profits taxes.

BUY

heavy

Motors'

General
first

for

net

S.

quarter of 1951, released re¬

cently,

offers

This

of '50.

quick picture of the in¬

a

the

that

on one

taxes

new

of

are

largest In¬

our

dustrials.
New

in

laws

which allow the

York State

New

purchase of qual¬

the demand

anteed rail

has been of

stocks;

companies'

a

and

Over-the-Counter

Quotation Services
for 38 Years

for guar¬

demand that

long-continued dura¬

by Fire

ample,

SAVINGS

BONDS

is $141,520,651, as com¬
with a net of $212,387,765

for the first quarter

tion

U.

the

stimulated

This

Boston Term. R.R. 3 Vis & 4s

I stated in my article in
of Feb. 23, 1950, that
stock is selling behind the

and

maufacturers.

.

Geo. & Fla. R. R. 6s 1946 "A"

as

ity stocks in place of bonds have

for

;

Rights

Gen. Aniline & Film "A"

paper

country.

profit margins are among the

&

now

front ranks of American, industry

highest

Bank of N. Y.

Common

how¬

I still feel,

130.

the

12%

Net income

operations

naturally lower and the -directors record for sales, earnings and div¬

tra payment was

side

asked

roads

manufacturing

greatest

merchandising

New

and

has al¬
be among' making

President,
itself to

'A

liked best!

pared

country.

Art Metal

under the able

ready

already

WOrth 4-5000

on

Like Best" for
pretty thorough

Central's

analysis

Nat. City

I

article

the

1950

Mass.

Teletype BS 259

:

Telephone

Y.

N.

.

:

that

tention

"The

Tel. CA. 7-0425

Financial

ran

last quarter, which is usually the

due
Exchange

Toward

last year Ronson

into some bad luck.

New

of

"Commercial

Hazel Zimmerman

148 State St., Boston 9,

have

to

Editor

and

-

Members

a r-

place.

the

comprehended when it is

understood

the

will

the

conditions warrant it.

when

of

I was concerned.
of this

and

market

the

one-third

top mortgage alone. Santa Fe gen¬
erals were then yielding less than
3% while Ronson's regular divi¬
dend

to

request

on

I was inter¬

per

Ronson

Analysis

rived at in the

.

sales, and without

ings consolidated, Ronson's earn¬

STOCK
YORK 'CURB

Range 1951.....High 4

a-

provid¬
ing they were

qualify
worldwide busi¬

a

d

tions

re¬

any

249.996 SHARES COMMON
LISTED

a

eral 4s of 1995 would not be

Company

Earned per

the

pay¬

decline,

7% Cumulative Preferred

shs)
Stamped stock (17,200 shs)

$1.40

extremely

of the highest

in

decline in

nues,

General Alloys

was

it involved

as

wiih

regular

The test

Railroad

Unstamp. stock (6,430

its

earnings.

tained

to almost $6 million last year are

also

Book value per

financed

Ronson

ica.

to

quick assets

their growth.

finance

My first move was to
test the abifity of the company to
praised.

that Ronson

ELiot 3040

105

companies issued new shares

these
to

but.

Ronson

than

faster

grown

dend should be very carefully ap¬

curities

AVENUE

SEATTLE

Net

the past four years

represents an abnormally

maintain

request

John R. Lewis, Inc.
Teletype SE

and

covered three times

was

during

ment.

1006 SECOND

minor., This

lines
television manufacturers have
air

AEROVOX CORP.

her

or

York Central's
guaranteed
Rail
stocks,
which
low payout of net income.
branches are maintained in Can¬ have
been-consistently behind the
My interest was first attracted ada, Cuba and Mexico, as well as
market in performance, have be¬
to* Ronson about a year ago when in
England, where, a factory is gun to move up sharply. Marketthe stock was selling at 18.
The established.
The
English
sub¬
wise, Boston & Albany, guaran¬
yield was so high that it occurred sidiary's sales are, growing even
teed
by New York Central, 18
to me that the safety of the divi¬ more
rapidly than those in Amer¬ months ago was selling on the

Placer Development,

LEAD—ZINC—TUNGSTEN—OIL

his

ested

manufacturers,

aircraft

The risk on Ronson's

regular dividend is
over

Stocks

on

the investor can buy them

as

nothing.

and thus

Gold

calcula¬

The risk

Ronson's extra dividend is exactly

I

flllllllllllllllimilllllllllimillilillllli

Marketable

selection

analysis,

tion of relative risks.

LD 33

.

final

the

of investment media is a

•. <

more

branch offices

j

investment dealer
rarely changes

an

a

growth in sales than the leading
of $2.10.
If only the
chemical
and natural gas com¬
regular' disbursements are con¬
panies.
Using 1936-39 as base
tinued, the 7.4% yield is satisfac¬
years,
Ronson's sales were up
tory. However, I believe that ex¬
1600%
at the end of last year.
tra payments will continue.
As
This compares with a 290% rise
an
investor I consider the extra
in Personal Consumption Expendi¬
income
as
available at no cost
tures for the nation on a similarly
since the well-protected regular
Growth Index*.. Some
income provides such a generous compiled
In

Lynchburg, Va.

that

payments

yield at the current price of

Scott, Horner &.
Mason, Inc.

enjoyed

has

Ronson

truth that

It has been- said with

beyond those in¬
mere recognition
of,
on

Mobile, Ala.

leopard never changes its spots,
and it
can
be said
with equal

I wish to

discount

NY 1-1557

a

yield basis alone.

Heller

'Stanley

a

York 4f N. Y. *

Central)

York

New

are

unwarranted

the

the

extra

made

in

herent

and

past two years

liiimiiiiiiMiiiiiiiiiimiuiimmimi

gains

capital

per

during

above

*

':'

Exchn»ae

(guaranteed by

& Albany

Boston

present the facts which indicate
the
long-term
possibilities
for

divi¬

regular
dend

Curb

Direct wires to our

Angeles, Calif.

factors

negative

the

undervalued equity,

an

a

on

Los

enough to
establish Ronson common stock as

The

is

stock

HAZEL ZIMMERMAN,

truth

discussed

ever

seen.

York

New

New Orleans, La. - Birmingham, Ala.

April were

of

weeks

Although

bargains

York Stock Exchange

Members

HAnover 2-0700

last year.

the

of

one

Members New

25 Broad St., New

double the
million in the same period

$1.1

of 19 the stock
is

Since 1917

Steiner,Rouse&Co!

nature of
decline
last

$2.1 million or almost

price

Calif.

Angeles,

earnings

three

first

action." At the
current

Los

(Page 2)

pointed up by the first
Ronson Art Metal Works.
The
quarter 1951 results.
Shipments
company manufactures the world's
rose
32%
over
the prior year,
greatest cigarette lighter with the
from $6.3 to $8.3 million. Net in¬
famous
"o n e
come
improved from 82 cents to
finger,
one
$1 per share. Shipments for the
motion

in

merman,
'

;

'

was

year

Specialists

■

(guaranteed by
Central)—Hazel Zim¬

non-recurring

Ronson's

is

1

v

New York

Boston and Albany

complaints were forwarded to

no

the management,

Bought—Sold—Quoted

(Page 2)

gift horse in the mouth,

to look a

Ronson Art Metal Works, Inc.
One

yield fell from 5.7% to
As I consider it bad taste

5.3%.

N.Y.C.

Works, Inc.1—

Metal

Art

Stanley Heller, Partner, Stanley
Heller & Co., New York City.

income

Members, New York Stock Exchange
and New York Curb Exchange

Teletype NY 1-583

BArclay 7-5660

are not intended to be, nor
offer to sell the securities discussed.)

as an

Partner, Stanley Heller & Co.,

Corporation
120 Broadway,

they to be regarded,

STANLEY HELLER

Hanseatic

Established,

Louisiana Securities

(The articles contained in this forum
are

Selections

Their

Ronson

Pfd.

Alabama &

and

Participants

particular security.

participate and give their reasons for favoring a

Green Mountain Power,

New York

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

in the investment

Rights

&

Week's

This

Forum

A continuous forum in which, each

Bank

National City

Security I Like Best

National Quotation Unreal
Incorporated'

Life Insurance

portfolios.

Metropolitan
Continued

For

Life
on

ex¬

Insur-

page

21

Established 1912

46 Front Street
CHICAGO

New York 4,

N. Y.

SAN FRANCISCO

yolume 173

Number 5012

.

.

t

The Commercial and Financial. Chronicle

.

(2043)

There'll Be Some

INDEX

Changes Made

Articlei iftrwJ Newf

By IRA U. COBLEIGII

'

'

Author

.

*

"How

A

Make

to

glimpse through

Treasury Should Heed Verdict

the

comparison

window,

—Sherwin

-

sketching

the

Economic

C.

Back

•

(and

in

this

day)

for

Outlook

it

was

to

not

uncommon

pansion of net. SOV also has

tell

his

1,500,000

client,

"Put tnis stock

about

get
Well

Dakota acquired

first

part

of

this

advice

made

lush

-It's

you
wouldn't leave

couple of

U.

Cobleigh

here

silly

to

that

suggest

in

corporate

takably

shares

supply

Big

Titans

be

can

established,
wi.h

you

I

table.

1911;

ED

You'd put 'em

since

1936; SOV is at its top rignt

in

now.

dividends

vault. But

since

SOV

as

—Leon

First, it

But

is

was

had "put away" Anaconda at
ana watched it
slip to 4, could
you forget about it?
No indeed.
As they say at the periphery of

you
170

tinue

Field, "leave us face it"—
only thing people "put away
and forget about" is a casket!

>

of

A

changes to
are

be

maae—and

&

qt

31 Va\

and

what I propose to do is to suggest

than

SOV.

theoretical

at

Con .Edison

This

all.

A

idea

is

not

switch from

was

ED is by any standard

Edison.

My

viewpoint

is

of

27

St.

into

261/2.

Louis,

$363

—Edward
v

from

riecent

rest

from

ties

as

growth in SOV has taken
impressive turn.

69£

a year ago.

Now this is

a

traffic

such

in

debt reduction.

recent

some

500,000

has, for

So

day,

a

and

bought a good por¬
Well if it produces the

itself,

50 cents a

the

cost

is

year

should

$6!/>

million

around

barrel; but if the crude

is bought, it costs well above $2.00.
So when you observe that in the
first quarter of this year, domestic

k—

:

'is

a

a

''

•

$6.92;

"H/.

sources

diverse

From

Mutual
NSTA

.

realize
to

be

.

..

and

Members New

6

Teletype NY 1-3370

16

Direct Wires

21

Philadelphia and Los Angeles

23

.

—Cover

_____

\T

Associated.

25

—-—

.Dev. Res. Corp.

43

—_-

/____

21

_____—

1

Bates Mfg. Co.

Hoving Corp.

16

Activity——-:.

—

—___

—

—

—

________

Bankers-—.—

and

'—

Public

•"

""

and

*

•

•

•

<18

Singer, Bean
MACKIE, Inc.

20

&

"

HA-2-0270

Exchange PL, N. Y. 5
1-1826

24

Offerings———_____________41

Security

Securities

31

—

Securities

27
._

26

Securities Now in Registration—__1

38

Then

26

and

40

43

Securities Salesman's Corner.—

.

Engineering

36

** 5

••

Governments—

on

Utility

Railroad

r

—

•

Teletype NY 1-1825 & NY

/ Our Reporter

Prospective

Report

"

Thermal Research

22

May— ——_———.//_!/

Wilfred

•"

Reporter's

,

Heat & Power

28

—

-

Petroleum

8

_____—

Now—Guess

Who?—_—_u__;

—

Air Products

The

Security I Like Best

1

Tomorrow's Markets

fur¬

And all this

—

_____

.___

Baker-Raulang

5

____________

(Walter Whyte Says)_

Washington and You__

2

——

The State of Trade and Industry—

of

34

Collins Radio

44

_—

*

FN
be

outstanding corn-;
vastly increased if

**

;

of

■

on

page

Column not available this week.

Instead

his

of

his regular

statement

convention

at

auspices of the Economists'

25

York

.

,

Di-Noc

-

column, Mr. May presents text
held

in

Washington

National Committee

on

under

Hoving Corp.

Mone-

tary Policy.
Twice

Weekly

li

1

Drapers'

land, c/o

Gardens, London,
Edwards & Smith.

E.

C.,

CHRONICLE

/

Reg. U. S. Patent Office

Copyright 1951 by William
Py
Company
Reentered as

Van Camp Sea Food

B. Dana

second-class matter Febru-

♦
,

25

B.

Park

WILLIAM

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COMPANY,

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THEODORE YOUNG & CO.
plete statistical

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-

Bought

Manajer

Thursday, May .17, 1951

state

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News About Banks

the

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Chicago

■

Washington Ahead of the News—Carlisle Bargeron—

WILLIAM

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Guess?—

«

Albany

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>

./

HERBERT D. SEIBERT, Editor & Publisher

4

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PREFERRED STOCKS

Stock Exchange

■

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—_—

Indications of Business

managements

.

You

the

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from

on

High Grade Public Utility and Industrial

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...

interested

'

Regular Feature*

Published

are

"

Dealer-Broker Investment Recommendations

,

We

on

lot of good to the common.

could

crude production of SOV increased

<

Charles E. Wilson Hails Millionth

Whereas FN earned about $5.75
share in 1950, GFO kicked in

mon

23

——___i___;

'!<

Business Man's Bookshelf

and

ther debt retirement.
does

^Prospectus

Savings Banks

on

Bernays—^

^

Canadian

A sale of owned real estate this

years,

tion of it,

oil

barrels

L.

Bank and Insurance Stocks

senior

GFO

Mobile

other

some

ful

years. You see SOV has to have a
whale of a lot of crude. It refines

it—>n

26

New Officers of National Association of Mutual Savings Banks

7.

lumber, coal and bananas.

back

oil in

Portsmouth Steel

-15

-«-

As We See It (Editorial)———,

about .one-half

—

vealing trend and is arrived at, in
part, by an aggressive and successearch for crude

Steel

Newport Steel

14

Richard Crooks Named Chairman of NYSE Board—

might have dished out in divi¬
dends, have here been plowed:
into property, or applied to

re-;

Star

are

common.

of

run

industrial

which

*Lcne

Stable Currency

/as Example of "Big Business"—

About
On each of the 31,802,000 shares?
efficiency,; the road is
of SOV outstanding, net earnings 100% dieselized and has one of
increased from $3.09 in 1949 to the lowest operating ratios of all
Southern
roads.
$4.03 in 1950. For the first quarter the
Earnings,

against

11

i___

Tyson_r

The "Gap" and Controls

;

of this year, net was $1.16

^Kaiser Steel Units

Defense Economy

a

BO 9-5133

Chicago
rapidly growing territory
provides a wonderfully bal¬

anced

an

Control in

Jessop Steel

10

,

v

a

and

WHitehall 4-6551

Harrisburg Steel

9

_„

Consequences

■

$

Gulf. Mobiie

million

Louis

St.

described in the words of Brutus,

STREET, NEW YORK

both

main
to

WALL

8

McChesney Martin, Jr.—

"Impact of Changing Society

San

Dividends

Orleans and

"Not that I loved Caesar
less, but
that I loved Rome more." For the

quite

Robinson___

Did

serves

better

Rex

Einzig—"World Food Problems"

Gulf

Con

_____

Causes and

factor.

really

on

i

the grounds of
territory served,
operating efficiency, and growth

The

Obsolete Securities Dept.
99

•'

delving
give the nod to GFO on

to

seems

New

hard-bitten bear

year's* time

these roads appear to denote sim¬
ilar stock values, deeper

gas

your

7

,

Buffett

of Credit

—Robert C.

there's plenty of leverage in both.
While the surface statistics of

arid electric requirements of our
largest city, and growing in plant
and earnings
correspondingly. It
recently hiked its dividend to a
$2.00 annual rate.' So you see I'm
no

has

6

Money Market Factors in Industrial Problems

couple

a

selling: 10

a

preceding 917,000 of

premier

a

utility serving the

at

with

Gulf

unworthy.

American

SOV

paying $1.50 in
Frisco is bigger with $765
mjllion of senior securities ahead
of
1,241,000 shares of common.

actually made, to
my knowledge,. in recent weeks
and the logic behind it is
by no
means

at

Ohio

even,
1950.-

that, for reasons duly outlined be¬
low, ED has a dimmer market fu¬
ture

out

are

6

__

—Falkner C. Broach-v—-

My next exit and entry, nomi¬
Francisco

sold

get

oL-graph

choice.

nees

Name

else

buy

Diversifying Securities in the Bank's Investment Portfolio

*

Vacuum

both

could

by projecting
show

'"On May 14 the listed shares of
Consolidated Edison and Socony

-

The Treasury, the Federal Reserve, and
—J. H. Frost

-

prices would look like some¬
thing
better
than
a
fielder's

se¬

lots.

and

5

Transportation and the Investor—Walter M. W. Splawn______ 14

even

exception!

no

nobody

them

junk!

Tight Electric Power Situation in Prospect—C. B. McManus 13

ED

(and maybe paying an equal div¬
idend). And if all that happened,
by chance, the switch today at

infancy, there

Role

—William

pay

and

piece

points above ED in

let's put it away and forget about
it., Let's recognize
that in our

curities

lines

Howard

—Lelancl
The

49

earning

you

little

a

and

paper

So, since this well eroded adage
has a glaring error built into
it,

earliest

pitch.

-can

present

trends,

yourself

Ebbetts

from

real

wholesale

for

"

their

market

the

are

the

heavily,

D.

that

bid

Developments

Keyserling

—Hon.

$2
a
year; at 3114 that's a good yield.
SOV could pay $1.60
this year
and
maybe more.
If both con¬

bad
advice,
and
second,
you
couldn't follow it if you tried. If

lives

here's

regulated

4

___

stocks

I'll

in

Telephone:

Mortgage
Richards--

Rising Prices and Costs—Real

-

"forget about
it"— that's different.

J

any

them

Gold—Redeemable Currency the Basic Cure for Rising Prices

since

high

as

/_,

Own

warns?

Production, Not Inflation, Our Serious Problem

ED has paid

1885;

has sold

Monetary System

Spahr

Housing and

—Franklin

must

the

a

F1IA

following,

nuggets to mull

hall

3

a

around,
cluttering up

over.

Sound

a

FROM YOU WHOLESALE

"

unmis¬

and

the

E.

for

Equity Investments for Savings Banks.-Jules I.
Bogen—

-could

paragraphs, the. comparative

hundred
of

two

or

Cover

„

share merits of two such fabulous

Steel

Ira

gusher

few

course

a

amazingly

an

I CAN BUY IT

Washington Scene

Now—What's Ahead for Government Bonds?—A.
Wilfred May
Values in Today's Market—I. Komanoff——

throw another, log on the
earnirig's
fire.

Of

sense.

—Walter

some

North

in

This is turning out to
important oil country, and a

be

it."

the

on

Recommendations

low rental.

for¬

away and

of leases

acres

the

and

There'll Be Some Changes Made—Ira U.
Cobleigh—______

roaring twenties from 161,000 to 204,000 barrels a
intermittently
until day you see a real lactor tor ex¬

broker

a

AND COMPANY

_Cover

—Emerson P. Schmidt

the

even

of Free Market

Badger

'

relative merits of three pairs of equi-priced stocks.

.

llCHTfllSTflll

of

Killing in Wall Street and Keep It"

a

-

Page

\
•

3

issue

corporation
city news,

and

Other

Offices:

135

—

market

news,

bank

quotation
clearings,

etc.).
South

La

Salle

St.,

Chicago 3, m. (Telephone: STate 2-0613);

$30.00 per jear. (Foreign postage extra.)
Note—On account of the fluctuations In
the rate of exchange, remittances for foreign subscriptions and advertisements must
be made in New York fund*.

40

Exchange Place, New York 5, N.Y.

WHitehall 4-2250

Teletype NY 1-3236

X

Chronicle

The Commercial and Financial

.

.

Thursday. May 17, 1951

.

(2044)

4

this

Recommendations foz

a

is

statement

his

correct

now—on

anniversary of his birth, May
of contract law, which
been built through centuries

Our body

Sound Monetary
Economics,

of

signed

Executive Vice-President,

Economists' National Committee on Monetary

Policy

penalties.
Such law
rests upon the principle that ful¬
fillment of contract, where legal
contracts can
be made, is both

against government debt
—and for the re-establishment and maintenance of independ¬
ence
of Federal Reserve System from Treasury domination.
Warns destruction of nation's central and commercial banking

desirable

currency

are

Questions That

Some Fundamental

Should

the

If

States are

Answered

Be

people of the United
to have a good mone¬

tary system, they must
the

recognize

of the following

importance

questions
and
provide

when we have

our

banks and United States Treasury

the ratio of our gold

1951,

stock
outside the Treasury

to all money

bank

banks,

(1) Does our
monetary

system,

time

involving

6.7 to

irredeemabil-

of

in
our

from

ranged

accuracy

possession of facts
to challenge the

in

we

us

of,

and

to

justify

our

issuance of irredeemable currency

dollar,

by Mr. Justice Bradley, in the
"Legal Tender Cases" (12 Wal¬

in the light of,

violate our

general
acceptance of
the

Spahr

Walter E.

Dr.

principle

our

lace, 1870, pp. 560-562),in respect
to the United States Note then an
irredeemable

contract law that

contracts

the statement made

money?

"It is," he

our

pay,

properly

prom¬

Federal Reserve

it

not

excused

be

generally

from

recognized

standard

obliga¬
compared
with that of the ruled is charac¬
lower

a

teristic

Our

of

as

irresponsible

of

tyranny?

.

govern¬
..

such
of

a

our

principle.
The wel¬
people has not been,

fostered by adher¬
to that principle.
Its pres¬
in
our
rnidst
today
is
a

and cannot be,
ence

ence

manifestation

of

a

serious

lapse

only in our official standards
regarding obligations of contract
but also in our general standards

not

meaning

the

regarding

and

im¬

portance of integrity in both our
private and official activities.
Since

most

the

potent

all
at

for

the

upon

to

ability?

forces

for

depreciating

govern¬

justly require our people to
accept one
type of dollar and
withhold
another?
If we have

silver, and paper dollars,
government properly dis¬
criminate between them without
gold,

irredeemable currency

an

giving

dollars

some

others

than

value

more

admit¬

without

and

ting, by its act of discrimination,
that some dollars are more valu¬
others?

than

able

it

If

dis¬

so

what basis of
justice may it keep the most val¬
uable dollars for itself and compel
criminates,

on

people of the United States to
the less or least valuable

accept

kind of dollars?

(3)

a valid basis for
practice of our United
Government of giving for¬

there

Is

the present
States

central

eign

ments

and

banks
all

to

access

govern¬

of

types

our

and to choose the more
valuable variety — gold — while
dollars,

this

denying

to

right

people?
(4)
tions

own

our
.

What
of

the proper func¬

are

irredeemable

Does not our

cur¬

constitute a promise of the
issuing authorities to pay upon

emergency."

Perhaps

Is

demand?

sion
one

it payment or

eva¬

substitute
irredeemable promise for an¬
of

fulfillment

to

;

Since the issuers substitute one

irredeemable

promise to

for

pay

another, does this mean, in prac¬
tice, that
our
government is
authorizing the issuers to make
dollars out of a material—paper—

relatively little value in

having

the market?

this

.

debt due the
people?
If so, is this debt never
to be paid by the issuers?
Is

money

a

illustration

will

the notes

and

deposits who pre¬
for that
it not a fact that

to

that

these

of the weakening process

.

The

total

loss,

because

of

a

we properly
able to take depreciated dollar, on the average
position today that, although value of life insurance policies,
our
standard monetary unit is a time deposits in banks, and E, F
gold dollar and our gold reserves and G savings bonds for the years
are adequate
^orrrederuption pur¬ 1941-1950, in 1950 dollars as com¬

Are

the

poses,touf, pamper; money promises
shall

never

be redeemable

in

our

standard- gold dollars?

resume," said Secretary of

"To

the

pared with 1941 dollars, amounted
to
$116,565,524,000.
This huge

loss, lightly regarded

because so
poorly understood, stands in sharp
contrast to the officially estimated
total loss of $1,901,000,000 by de¬

Is

reserve?

these

their

notes

these

reserves

held

are

reserves

by

deposits?

and

paid

are

the
all

Since

out only

notes

Treasury,

Jan.

8,

1879,

cedure

new

country

this

in

and had
the pro¬

is,
unsound?
principle
was

and

was,

what

learned

that

learned

not

experi¬

of money

against government debt

Just

1930's which demonstrates

in the
that the
in

the

and repeatedly pointed

out

lessons

past,

money

world's

the

studied

ments with the issuance

learned

often

so

by reputable monetary economists
prior
to
1932,
are
no
longer
applicable?
Is it any less true

time in

today than in John Law's

of the Eighteenth

the first quarter

Century that government debt can
be created without limit and that

give rise to great issues
depreciation of irredeemable
money?
Is it not a fact that we
have simply reverted to an old
and well-established principle of

this

can

and

ing

facili¬

depreciation in the purchas¬

so
valid basis
which to justify the adoption
power
of
Is there

currency

a

issued?
on

which

issuance

currency

tates

any

principle of currency issu¬
generations
to be both unsound and danger¬
ous?
Are not the declines of 58%
the

of

known for many

ance

in the pur¬
dollar since
and of .61% since January,
sufficient to warn us that
is
nothing fundamentally

1939,
1934,
there

the course we have been

in

new

pursuing or in the results we are
witnessing in respect to our mone¬

policies

tary

that

time

this

procedures?

and

be amply clear by

it not

Should

our

monetary

is afflicted with a very

structure

old and well-known

disease?

Government Domination of
Central Banking

(6)
with

Are not the

to

respect

the

System

world's lessons

the proper rela¬

tionship between a central bank¬

system

ing
such

that

foreign central banks and gov¬
ernments
who
present note or

the government
that trouble

and

know

we

Continued

claims against these re¬
serves,
while the same right is
denied to domestic holders of the
identical kind of claims against
which the same kind of reserve is

on

page

30

deposit

held, is

ostensibly
that

the

usable

reserves

only

it not
in

are

a

Reeves Soundcraft

fact

Flying Tiger

practice

portion

against that

John Sherman on
of notes and deposits presented
for redemption by foreign central
"is to recover from
of the Treasury and Federal Re¬ illness, to escape danger, to stand positors in suspended banks dur¬ banks and governments?
There¬
serve
banks carried as liabilities sound and healthy in the financial ing the years 1921-1933.
Regard¬ fore, is not the holding of reserves
of those institutions?
On what world,, with our currency based ing the latter loss, extending over against all their Federal Reserve
basis can we justify the creation upon the intrinsic value of solid 13 years, and which is only 1/61
notes and deposits mere pretense
coin."
(John Sherman's "Recol¬ of that over 10 years on the three in so far as usableness of these
*An address by Dr. Spahr before Con¬
lections
of Forty
Years in the items mentioned, we still write reserves is concerned? How can
ference
on
the
Monetary,
Fiscal and
Credit Policies of the United States in
House, Senate and Cabinet." The and speak with emotion for the one demonstrate that the prin¬
the Present World Crisis, under the aus¬
Werner Co., New York and Chi¬ reason,
apparently,
that
the ciple of honesty underlies the law
pices of the Economists' National Com¬
cago, 1895, Vol. II, p. 704.)
John
mittee on Monetary Policy, Washington,
Sherman was correct then, and
May 10, 1951.
Are not the irredeemable

demned

exchange

in

them

sent

paid."

supposes

of

generations con¬
such practice?
Had they
many

(as of April 24, 1951)

Federal Reserve banks against

one

for

field

the

in

students

chasing power of the

our

inherent
government certificates are never in an irredeemable currency, and
to be paid—that the day of specie also how the public fails to react
strongly because of lack of under¬
payments is never to return.
.
Their ultimate destiny is to he standing of this process: '
"No

.

other?

one

suffice to show the subtle aspect

States?

they

money

of the United
Is it not a fact that our
and
most
experienced

debt

the

closest

have

of paper

issuance

the

Federal

in

Debt

valid defense

there any

Is

What is the pur¬

reserves

Reserve banks?

..

rency

it to domestic holders of
kinds of claims?

a

attempt to coin
pose of a reserve if it cannot be
shall be fulfilled in so far as pos¬
money out of a valueless mate¬ diffuses its evil influence through¬
used—that
is,
paid out—when
sible?
rial, like the coinage of leather, out the ramifications of our na¬ needed?
What does it mean to
Have not we, by the adoption of
tion's
or
economic,
social,
and
politi¬
ivory, or kowrie [sic] shells.
say that these banks hold reserves
a system of irredeemability, estab¬
It is a promise by the government cal spheres
in. subtle ways not
against their notes and deposits ?f
lished
for
the
United States to
pay dollars; it is not an attempt widely understood, this lapse from
these reserves cannot be paid out
Treasury
and
Federal Reserve to make dollars. The standard of the proper standard of integrity is,
when the holders of these notes
banks a lower standard of obli¬ value is not
changed.
The gov¬ like a cancerous growth, per¬
and
deposits wish to exchange
gation for fulfillment of contract ernment simply demands that its sistently weakening our people,
them for the so-called reserve?
than that applicable to norr-govcredit shall be accepted and re¬ impairing
their freedom, and
If this reserve is paid out at all,
ernment
individuals and enter¬
ceived
by public and private steadily undermining the vitality is there a valid basis on which to
prises?
creditors
during the pending of -this nation.
discriminate between holders of
"not

said,

an

pay out this reserve to
claimants while refusing

against

not

our

can

these

same

(5)

(2) If the dollar is our standard

unit,

permits

time

Issuance of Paper Money vs.

system can be based
principle of irredeem¬
The evidence provides a

monetary

and

deposits

and

to

pay

the

against

reserve

a

notes

same

banks

strong negative answer.

can

the

foreign

Is
there
any
valid
supposing that a good

currency.
reason

hold

to

their

de¬

a

all

of

known as causes of a

requires the Federal Reserve

banks

quality of irredeemability

The

the

republican form of govern¬
was
not designed
to rest

ment
upon

ruler

the

for

ment and

fare

respect to
standard

gold

in

compares

10.9%.)
enable

that

currency

ratios

the

Are

our

This

10.6%.

was

Is

tion

Reserve

to

such fulfillment?

that

excluding interbank deposits,

to

ma.y

those

Federal

the

but

ises

Reserve banks and to

deposits including

with
an
average ratio of 8.6% for the
years
1915-1932,
during which

ity

their

fulfill

provided conventional procedures
are
followed?
(As of Feb. 28,

of

them:

to

body of contract law requires

individuals

all

answers

By what process of logic may
correctly contend that, while

one

understanding of

the devastating effects of
preciating currency.

is

that

observations

reveal our small

that

ment

adequate gold reserve with which
to
redeem them
upon demand,

and Federal

correct

the

paid, particularly

has virtue.

on

only the three items specified, we
in general little more than

therefore monetary

and

proposition that non-fulfill¬
ment of a legally-made contract

to be

of liabilities that are never

justly

men

the

last important obstacle to fiscal and monetary
and consequently to governmentally managed
economy and people.

I

deal

to

if

necessary

easily with one another.
Appar¬
ently in no aspect of our body of
contract law is there acceptance of

system removes

dictatorship

and

greater,

times

61

offer

prescribed

Spahr calls for thorough measures to return our commercial
and Federal Reserve banks to their proper functions—in lieu

and deposit

suffer

or

than

more

avoid platitudinous

to

men

made

those

fulfill

to

Dr.

of creating note

compel

to

is de¬

experience,

and

making contracts which they can¬
not or do not intend to fulfill, and

University

York

New

effort

of

WALTER E. SPAHR*

By
Professor

has

System

But regarding a loss

understand.

1823.

10 of

meaning of that loss was brought
a manner we could

home to us in

Bought

—

Sold — Quoted

.

NOT

A

NEW

Established

ISSUE

Hotel

The Common Stock of

AUDIO
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well-managed

a

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MAGNETIC

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31 Nassau

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'•

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•

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Volume 173

Number 5012

.

.

The Commercial and Financial Chronicle

.

5

(2045)

/f
Steel

The

Carloadings

and

Retail

Food

Price

Auto

Production

Index

falling off in

total

industrial

level

of

duction

some

output to
prior period..

the

sustained at

was

a

lines of production

point

a

slightly below

very

brought
the high

Notwithstanding this, aggregate
level close to the postwar

high.

for

held noticeably below the level of

a

Steel production the current week is set for 103.9% of
capacity
0.1 point under the all-time
high record for the industry.

Transition to the Controlled Materials Plan in the distribution
of

steel,

copper

and

aluminum

in

its

will

be

longer

drawn

than

out

Government
their

terms

bonds'

value
often

are

your

on

carbon steel for

the

Automotive

use

of

steel

in

beginning the third quarter. Building steel use will
further through latest regulations which necessitate

be

cut

the future and the volume is

with

our

monetary

for unrated account after CMP
requirements are
yet, is unknown, and won't be known until govern¬
are

reported back to the control

authorities, "Steel" magazine observes.
slight increase in

automotive

the past week.

production

occurred

■

during

,

Chrysler instituted overtime operations briefly the past week
pick up losses resulting from the Budd Co. strike the
previous week, "Ward's Automotive Reports," reported. The
agency
at DeSoto to

cited

this

vehicles

evidence

as

as

possible

the

industry

before

is trying

additional

in

same

of

which

to

build as many
restrictions in steel use

take effect June 1.

This agency said the auto makers are also
facing the problem
keeping current employment forces intact for shifts to defense
production later this year.
This was observed at Ford where

not likely United States output in any week
during the
remainder of the year will match the
comparable week of last
year, since weekly and monthly industry records were set from

May through December of 1950 following Chrysler's resumption,
Ward's stated.

the

m

On Tuesday of last week the State
Department announced
important change in the tariff structure of the United
States,
providing lower rates on dutiable imports under the Torquay

These

imports, it is understood, accounted for about 16%
of the 1949 value of the total
purchases abroad.
As a result of
the changes, American consumers can
hope for lower prices cn a
number of foreign items they
buy.
However, American manu¬
facturers of 1,325 imported items covered in the cuts which become
effective starting next month will be confronted
with increased
foreign competition in the domestic market.
Charles

to

E.

Wilson,

use

mobilization

10%, "but not much more."

comparable

director,

made

of steel for automobiles will

curtailment

is

in

He

market price can, as

that

a

withdrawal

refrigerators, washing

Continued

on

that

page

a

33

the

of

characteristic

is

addition

of

Federal

office

at

116

Eighth Avenue under the management of

chasers,

so

many

to

engage

in

a

R. FIELDS

general

securities

a senmorale

the

in

in-

dividual, vital to an inclusive anti-inflation savings effort, range
from recent switchers

the

to

Jaffe, Siegler and Co.
"Over

Quarter Century Experience"

MEMBERS

MIDWEST STOCK

EXCHANGE

value has plummeted
y8; to present and pros¬
pective holders of Savings Bonds
into whose ears is being dinned
the widely-aired expectations of
further-rising
yields
obtainable
from other bonds competing for
their money.

Prevention

Easier

New

Selling

More feasible than




difficult,

more

sales cannot be increased,
of

the

which

flood

that

So it must

Temporary

alternatives, and (2) that
require funda-

fac£ that

of

redempwould

move

the

exist along the fol-

T

,

preServing

saver

that this in turn

and

of. the

solvency

the
the
at maturity;
requires the

dollars repaying

principal to the

government

How Achieve Solvency?
Too Many Like Their Disease
My

approach—quite ortho-

own

dox—to

the

anti-inflation

pointing out
the

to

fact

stopping

that

munit.y

so

of

inflation the
in the corn-

many

it—enjoy

like

effects.

term

goal is
the main obstacle

as

its

the

In

short-

emotional

the situation is analogous
comparatively great difficulties psychiatrics have in the

,

of alcoholics; the manifesta-

cure

the disease being so enjoyable. The farmer, the wageearner and the others "on-the-escalator," the producer of a raw

tions

material,

businessman

the

manding tariffs benefits, the

of

before

redemptions
excessive

that

is

by

interest

vested

in

inflation,

nessing

I have had witl

go

who formerly were

some

vebementiy

righteously

and

^La^vSenditu?e

and

eeutive

the

Congress—in-

s&j&sms&z

&SJSS
tZ

.

lng operations, to instill buye s

"'-ges-a

iti

HERE IS A SPECIFIC PLAN FOR MORE

PROFITABLE INVESTING, WITH

Written by our partner, Rodger
W.

in yield
bondholders

tffce

c*t

the

five

10th

IT

mrviket

IS

angle,
holding, the

INCLUDED

FREE

Savings

2.

Bond

-

holder

yield

from

to

get

an

MUST

READING

an

WITH

Primary

Credit

by

Policies

of

Committee

May

of

the

on

United

Crisis,

States

under

1951.

and

FOR

these

invest¬

new

selecting

situated

meth¬

market
the

stocks

most

and

groups.

EVERY

INVESTOR

EACH

COPY:

Trend Graph,

showing the present

Up-to-the-minute analysis of 445 Stocks and 43 Groups.
advantage of this offer

CLIP SI.00 to THIS AD AND MAIL

TODAY TO Dept. C-62

in

the

the
Economists'
National
Monetary Policy, Wash¬

10,

own

open-

Mr. May
before
the
Monetary, Fiscal, and

World

Present

ington,

the

on

your

actual trend of the Market.

To take
♦Statement

Conference

specific plan

of recognizing

industry
THIS

a

applying

ILLUSTRATES

ods

favorably

yield to maturity ranges between
4.1 and 4.41%.
For the six-year-

for

program.

trends

1. Current

equivalent

action

year.

another

of

years

OUTLINES

of

ment

E-Bondholder gets

from

IT

principles to

maturity.

booklet dis¬

this

the three basic principles

of correct Investment Procedure.

a

at

Bridwell,

cusses

PROFITS

sales of

liquidate, can be pointed out.
be explained
that after

during

LESS NISK

anKK

can

6.4%

and

actually only want deflation forthe-other-fellow.
We are wit-

FOR

yield of 2.5% during the fol¬
lowing year, and in each of the
succeeding 12-months of holding:
successively 3.6%; 4.6%; 4.4%, and

in-

demanding the removal of govern„arkpt
S„! ment bond pegs, now complaining
b°"di™ aif tendedperiod of to Heaven about the results not"
tn
of e
new
missues
llaM
andir
so-pleasant to them. On those with
Thev todirate P°"ical interests - there rests a
tha
meanwhile
in
Ue^ of
the Sreat
responsibility on the Ex™®a"wnne in lieu
ot tne

sacrifice

assumed

de-

and all others owning
equities rather than fixed-interest assets—all have a degree of

vestor

...

.

the

lnMS£r^Stffnuernmerd

™at

Savings Bonds will be curtailment
The

it-

self./

tj011s No Solution
.

means

realm,

be remembered that

Discussions

preserving the value of

bonds

value of the

Stabilizing Manipula-

Than

new

a

unde-

mental steps.

irrrrirra

Savings Bonds' Redemption-

auspices

Cleveland, Ohio

between

down to 97

the

940 Union Commerce Arcade

Choice

is

than

new

quidating

after

business

because
tions

con-

buch

Looked

LOUIS

new

as

st —sr srsss
as trs&ssu
discouraged x.

five years the

LORAIN, OHIO

on

Re-

to the market uncertain-

deterioration

ous

It
a

rendered

Program In-Flationary

trol-imposed situations, opened up
a surprising number and kind
of
complexities.
For
example,
in

who

Announcing the opening of

been

continuing
we have seen

long-standing pegs has,

serves

last

roughly

Mr. Wilson predicted

bonds, particularly of the actually lower-yielding (app. 2V2%)
F's
and
G's, have undoubtedly

the
bealthy
general
economic
during the past decade, be mainanti-inflationary effect of bondtained.
But market stabilization,
pe«. removal carries the negative
as
we
have
been
constantly offset of
inflation-stimulation,
learning, necessarily entails re- from curtailment of the distribupercussions throughout the econ^on
^be
importantly deflaomy whose gravity can right now
tionary Savings Bonds going
be particularly appreciated.
For in^0 the bands of real savers.
we
are
witnessing the fact that
1
'

be cut another 5%

further stated

prospect for

jnachines and other civilian goods.

known

and
con-

exag-

gerated imponderables surrounding the open-market obligations.
In
any
event, fresh sales of

Pegging

bonds'

better

the real remedies

to

long-term 2%s, whose current li¬

an

and

Damage to Savings Bond

buyers, we are witnessing

It is

actual

certainly set in motion.

assembly plants this month will operate 21 workings days instead
Management undoubtedly chose this course over
reducing daily output rates, which would have resulted in em¬
ployee layoffs, the agency commented.
of the normal 22.

with

..

ties put in the way of institutions
and
other
professional
bond

week that the

clearly-stated, reliable
continuing cash-in privilege;
trasted

Untoreseen Complications

of

Protocol.

their

machinery.
.»

there

available

We must bear jn mind the basic

by the Peg-pulling. And the yield

Entailed

sirable

artificial market

an

established

Such steps

rowed,
obviously
is
always
feasible
present-day well-oiled

back

government

How much steel

once

been

Hobson's

1956,

of

major advantage to Savings
purchasers is their lesser
complexity to the layman due to

A. Wilfred May

over

ment contractors' reports on needs

at

had been bor-

are

extends months into

growing steadily.

its

number

Also
now

(1) that
has

Bond

the

of

dollars

approval of all projects involving more than 25 tons of steel.
Rated tonnage on mill order books

of

the

June

will be cut 5 percentage points to
75% of the industry's consump¬
tion in the first half of 1950, and will
drop another 5 points to 70%

overriding lesson from the

lowing lines,

preser-

ment

mills also anticipate much the same
scheduling pattern for
August in view of the fact the Controlled Materials Plan is not
likely to be ready for full application before
September, if then.

2Y>s

attracting them.

present government bond market
situation would hence seem to be

Freedom From Complex,ty

mat-

obligations
maturity

The

the

of

Shaking-Off Controls

points to 921/£.

principal, that
is, its repay-

as
heretofore, although overall requirements for defense and
defense-support programs undoubtedly will be larger than in June.

Further cutbacks in civilian
consumption of steel products

instead

The

A

vation

sched¬

maturity,

spec¬

Fundamental Difficulty of

entirely

w o

ury s

lines

being put into effect, it notes.

off

equiva-

an

market

shaky
market
may
well
liquidity-conscious buyers

scare

selling at 102 to yield 2.09%,
would have
to
drop a full 10

ters.

uling of July work, states this trade magazine. This deadline was
scheduled originally for May 15. Expectations now are
that July
rolling schedules eventually will bet set up along much the same

A

now

TheTreas-

forced to set back their deadlines

as

lent

(as
program)

distinct

Pending word from Washington as to the extent of tonnages
required for directive programs, the steel producers are being

satisfied,

the

constitute

—

t

be made fully operative.

will be left

market obligation with

interchanged

the printer of

by

principal

although

—

many
metalworking executives anticipated, says "Steel," the
weekly magazine of metalworking this week. Formal inauguration
of the plan is set for
July 1, but it looks as though it will be Sep¬
tember, possibly October, before the new method of distribution
can

wise

nothing
and

stock

stabilization
manipula¬
but it will be ineffective.
Short periods of the Treasury's
strong-arm pegging in an other¬

pleasant short-term effects being selfishly embraced
by so many community groups.

year ago.

pre-SEC

ulators'

Cites various underlying steps indispensable to preserve
gov¬
ernment's solvency and bonds' real value; emphasizing great
obstacle to inflation-curtailment resulting from vested interest

pro¬

their price struc¬
only does this seem
objections to

tions,

Assaying the repercussions of Peg-withdrawal on the Savings
Bond program as well as the open-market, Mr.
May asserts
as the
overriding conclusion the demonstrated difficulty of re¬
moving artificial unsound controls once they have been created.

The picture of employment continued to show that total claims
unemployment insurance in the most recent recorded week

..

or

last week

in

But not

conflict with the

the

By A. WILFRED MAY*

Business Failures

J
A

to

Government Bonds?

Trade

Commodity Price Index

Industry

ture.

Electric Output

-

State of Trade

confidence

Now—What's Ahead for

Production

INVESTORS

RESEARCH

COMPANY,

Mihran Bldg., Santa Barbara,

Calif.

Financial Chronicle

The Commercial and

(i

Thursday, May 17, 1951

.

.

(2046)

just released, show's sales up 50%

Values in
Ilerzfeld

Stern,

&

Stock

Exchange

weight

naturally
becoming increasingly difficult to

will

in-

BOTH

select
t

v e s

.

which

securities

the

i

when the

their

substan¬
profit in

a

tial

will

p a s

several

t

that

of

group
c

u

r

i t

se-

i

e

known

a

n

t

a

stocks,
as

s

ing new products. However, be¬
cause of the large advance many
of these issues have recently err-

I,. Komanoff

(such

chemicals

business

is

not

world's

reaching out
Brazil, •. England,

Australia,

of

discrimination

careful

joyed,

supplies.

in

careful

^necessity.

.

*

in.

$34—and Visking Corp.—

AIRDENT

Unit—a

revolutionizes
the
old
of tooth drilling,
by substituting a relatively pain-,
less and high pressure air tech¬
nique
over
the
old-fashioned
painful drilling bur.
dental

year

a

recom-

selling

share as a good growth

}and thorough search of potential

tal

stocks

have

which

have

not

yet

been

uct

exploited marketwise, this writer
.suggests what seem to be two

good,
issues, which
sound,

cellent

realistically priced
appear to offer ex¬

values

from

a

'

!

.,'■/.

These issues

are:

''

.

a

market for this

lasting for

new

prod¬

many years.

■

-

^

(1) S. S. White Dental Manu¬
facturing Co. now- around $34.

"most

successful

in

volume

and

BOTH

Corporation

issues

listed

are

,

now

the

orr

*

"

'

'

'

.

.

jf'

that
involves
risking
political necks.
This- com¬
prises both little and big areas.

though

.

their

.

smaller

The

specific items a la
barrel.
By. the larger

pressure

the

pork
I

sense

the

of spending grabs for
projects, and yielding

resisting
sectional
to

embraces

area

on

mean

catering to the self¬

major questions.

dend payments expected to exceed

Visking

"

been

profits."
This
writer
estimates
1951
earnings in: the realm of
$4.50-$5.00 per share, with divi¬

(2)

For Gov't Bonds?

ish interests of politically power¬

iaround $39.

r

Now-What's Ahead

Earnings for the first quarter,
although not yet released, have
officially
estimated
at
around $1 per share as against 36
cents a year ago. The company it¬
self in its annual report for 1950
looks forward to
1951
as
being

longer-

term basis.

profession, the company will

;

...

last year's

ful

segments of the electorate on

So—it is not enough to say "re¬

•

turn

to

gold."

We must get

the

people
throughout
the
entire
community to be willing to do
the things creating a politics-free
situation
making
gold-convert¬

ibility realistically possible.
An

Anti-Inflation

York

Stock

Exchange.

total of $1.60 plus 5%

m

in

stock.

constructive

York

BOTH

'

•»

conditions.

selling

;

.

.

Visking

low
ratios of market price in rela¬
tion to earnings for issues of
such growth and fantasy—apare

fairly

at

4

•

%

*i

proximately 7-8 times estimated
1951
earnings,
as
against
a

\

price-earnings

-

times prevailing today for

I.

growth issues.

BOTH

with

,

ings

.

..

that

of

White

many

long

records,

Dental

go-

-

companies whose earn¬
this
year,
despite
the

are

drastic

cuts

in

spending—mil¬

.

and

other lines.

Sales
time
rate

last year reached an allhigh of about $25,000,000, a
four

times

that

"of

j 1941.

Earnings also
reached
an;
allhigh of $5.34 per share* The
report for the first quarter of 1951,
time

"soak-the-rich"

mi¬

suit

of

rage,

get at the presently untapped

the

pool of $140 billion of income in
the

lower

brackets;

and

purchasing

excess

mop

power

up

and

glean $7 billion of revenue from a

MUNICIPAL BONDS

CORPORATE BONDS

(5)

LOCAL STOCKS

A

firm

rounds of

stand against fur¬
wage-price spiral.

*

*

*

the

down

as

as'

of

reason,

life

insurance

companies
invest in

RHODES-HAVERTY BLDG.

ATLANTA

WALNUT 0316

LONG




1, GEORGIA

DISTANCE 421

they

can

For
thai
very
decline drasti¬

conditions

when

of

turn

un¬

remember

us

widest swing in stock market

the

when the Dow-Jones in¬

history,

dustrial average, having soared to
381

author¬

ized trust

panies
vest

com¬

I.

Jules

Dr.

1929 boom, declined to

of only

cent of the

equities.
representative
list of pension funds of large cor¬
porations, including the Retire¬
a

System of the

Federal

Re¬

-

in

subsequent depression periods.
risk

relative

in

vestment

investment in
institutions?

the

motives "for

institutional

equity

investment?

motives

valid

for

in

There

two main

are

for

reasons

this trend.

York

an

Stock

yield

average

ket

listed

stocks

common

New

price of

be

over

of

the

on

to

that

the

averaged

the

less

limiting

purchase

Secondly, investors in

of

retained

Over

corporations

paid

out little

more

cent

of

earnings

than

40

per

divi¬

as

dends, in the aggregate. The bal¬
of the

retained for the benefit

owners

of the corporations

—the stockholders. These retained

earnings,

when

reinvested,

give

rise to future increases in earning

and

power

in

dividends.

Only

stockholders get any direct benefit
from
retained
earnings — bond¬

Selection

\

~

.

,

that

issues

of

minimize risk. Stocks of seasoned

companies in essential industries,
with

managements

proven

and

a

record of consistent earning power

less

dividend

is

Risk

ally.

involve

payments,

than the

risk

market

gener¬

lessened

also

by

selecting, stocks of companies that
limit resort to bond and
issues

stock
to

having

earnings. Institutional investors

tend

to

favor

companies,

growth

since

the

ings

should

upward

trend

ot

hasten

should there be
or

preferred
claims

prior

a

earn¬

recovery

decline in

price

dividends following purchase.

(2) Timing of purchases
avoid

bunching

so as

purchases

to

in

repayment of principal at

undertaking. But keen interest has

entitled

are

at most only

developed in recent

maturity.

called

Fluctat'ons

Price

and

Risks

future,- rather than past, experi¬
ence.
And many investors have

♦An

are:

rate of interest

holders

added

be reduced in

can

These

periods of relatively high prices.
Forecasting of security prices,' as
we all know, is a highly uncertain

to the contractual
to

stocks

ways.

(1).

and

common

earnings.

years,

their

stock

,

also from reinvest¬

five

more

in

fluctuations

extreme

of

causes

pletely eliminated in recent years.
Risks attaching to investment in

6 per cent, while

bonds and mortgage loans.

stocks benefit

widespread

is

number of

a

prices have been partially or com¬

have

to

equities. In ad¬

mar¬

rates of return than those

themselves

in

belief

current

on

have realized substantially higher

was

management
expected to

gave

long record of stock investment

ance

are

Exchange

cent. Institutions with

per

past

that

investment

dition,

common

the

by the develop¬

portfolio

techniques

three

Moody's

of

,

explained

ment'

by

ment

equity by financial
/ '
'
.
.

Chiefly, I believe, this trend is
to

corporate bond'yields as computed
3

we

minimize the risks that will attach

First, there is the substantially
higher yield which equities pro¬
vide. Over the past three years,
all

in¬

Techniques for Minimizing Risk

Are\ these

savings/banks,

for other financial institutions?

as

towards

years

to

can

trend
of
increased

marked

this

interest

how

stocks,

the

recent

attaches

that

panded their equity holdings.
are

inherent greater

In view of the

endowment funds have largely ex¬
What

stock

prices, may rise sharply at one
time, only to fall correspondingly

explain

"■

,

,

like

payments,

banks, hold equities in their
portfolios. College and University
serve

growing

in the 1932 de¬

41

.

Dividend

Bogen

funds of "legal" trusts in

ment

in the

low

pression.

35

to

up

a

in¬

to

risk
are

about

the

to

which

?

future

common

subject.

address

by Dr.

31st

along

Atlantic City, N.

solvency.

>

sub¬

are

York

ex-politics, can preserve the
future value of government bonds,with national

prosperity.

cally

stocks.

mon

by contrast,

favorable.-Most

to

com¬

swings in the dollar's pur¬
chasing power over the years.
Stocks, by their very nature, are
But over
the
secular long-pull,
subject to wider fluctuations in
nothing short of steps such as price and in yield than are bonds.
these, undertaken with courage:
and

prices,

bond

on

Last year, New

stocks

up

a

re¬

except in case of default.

states

of
always; equity investment because of the
well

to

ject to no such price ceiling. They
can rise to great heights in periods

nine

-

misgivings

I believe that there will

be intermediate

ceiling

Equities,

•

(4) Proper management of the
But
conservative
investors
public debt, to keep it out of the.' know that the desirability of any
banking system.
investment will be determined by
ther

and

return

of

payment of the principal amount
at
maturity.
Because
of
this

.permit

and

national retail sales tax.

(3) An overall tightening of',
monetary and credit controls.

EST.1894

STATE AND

at

itary and non-military. "Defense"
truded
cellulose
are
not
casings.
For¬ items
sacrosanct;
and
merly, these casings found .their there is definitely no excuse for
use
only in meat products,; such the non-defense budget to be to¬
as
sausage.
Now, however*, the talling one-third more than in
field for Visking's products has 1948.
•
widened spectacularly to embrace
(2) A courageous non-political
packaging for all types of prod¬ tax policy. In lieu of further pur¬
ucts both in food

.

with

dividend

ing back to 1881.
BOTH

/

15-20

of

companies

are

unbroken

s

ratio

is primarily em
gaged in the manufacture of ex¬
Corp.

rate

par

year

•

nancial

par* being entitled only to

fixed

other

a

Implementing the underlying
Capitalization IS-ex.-'
spirit, I would sug¬
BOTH have simple capitalizations
tremely simjrief ; Consisting- solely gest the following as some of the
\
consisting
solely
of
common' of
basic
350,000 / shares
of
common
planks
in an
anti-infla¬
stocks.
stockwith: ynet
current
assets tionary platform:
BQTH have unusually strong fi¬ alone amounting to $30
per share.
(1) A whole-hearted attempt
New

above

that

than

Platform

rise materially

Bond prices cannot

virtual

More than half of

process

situation.
Today
Dixie-Cup
is
Commercial
production \ and
.'selling at $70 per share and cer.tainly can no longer be consid¬ shipment of these AIRDENT Units
ered a bargain.
Such is^also the started in December, &)50, and.
/case
with
many
growth '"stocks., judging from the enthusiastic re¬
Nevertheless, after a very careful ception given to them by xhe den¬

.

investors

can

they will not decline much below

thirty

per

from page 5

vation

product,

example, less than
;ago this
writer strongly
pnended Dixie-Cup, then
a

the

type of equipment for exca-"
Continued
of
tooth
cavities.
This

new

.

For

^at $35

of

search

discriminating selec¬
tion by any would-be purchaser
of stocks in this group becomes a

equi¬

joined
j

In

and

chase of

New

$39—the
investor
France and
Canada.
Of course, now.; around
the big factor in this company's still has an opportunity to par¬
fact, it begins to appear,
ticipate
in
two
sound
growth
sit¬
to this writer, that many of these emergence as a fantasy and new
at
reasonable
prices,
situation is the final uations
issues have advanced to a point products
both marketwise
and earnings•where
they
begin
to
borrow production and development after
wise.
quite a bit from their future; and years of experimentation and re¬

"tional.

pur¬

this

strength, nothing short of sensa-

.

the

ties.

purchases is essential./; In
the stocks of White Dental—now
around

growing

been the

institutional

of

interest

significant

day in the field of

our

investment has

new

only national,

international,

but

has beenmarket; into

drugs),
display

a

the

manufacturer

oldest

and distributor of dental
Its

and

on

and

largest

y"

is

Dental

White

or
s

of

most

the

of

One
trends

Concludes savings banks
of surplus in stocks.

prices in future.

safely put part

impossible to describe in

be

as

.

tions in stock

1946, when earnings were

tion of both follows:

certain

putting

space

such

(1) selection of issues; (2) timing of purchases; and (3) es- >
tablishment of reserves against losses. Foresees less fluctua-

king represents one of the most
dynamic growth situations today.
It is interesting to note that in

as

;growth
4'f

of

for growing institutional interest

equities:

techniques for minimizing risks in equity investment,

only $3
per share and dividends only $1.59
per share, Visking sold at $52 as
limitations, it
against today's price of about $39.

levels.

two main reasons

as

Co.

(1) substantially higher income yeld; and (2)
benefits derived from retained earnings, Dr. Bogen outlines

in

current

sharply higher than

1946

Assigning

Conclusion
complete detail all of the factors
which, in the writer's opinion,
/
Growth stocks always have had
mark these issues as outstanding
and will continue to have an ex¬
values, in today's market. There¬
citing appeal to the investor be¬
fore only a rather brief descrip¬
cause of their constantly expand¬

During the
"weeks,

whose

prices of most growth

are

Because

six months.

.

year's $2.50.
Visking's financial condition is
excellent
and
capitalization
is

considerably below
prices—at a time

are

1946

stocks

idea of selling

.at

substantial

issues

are

their

with the

last

University

York

Savings Banks Trust

Consultant,

Economic

>

exceed

should

payments

of Finance, New

Professor

taxes very simple—consisting only of
gains 594,000 shares on which dividends
have been paid each year back to
1930. In the writer's opinion, Vis-

heavier

much

last year.

prices

n

confidence to¬

day,

of

show

over

can

o r

purchase

idend

longer-term basis.

With the Dow-Jones Industrials
in the 260-265 area, it is

By JULES I. BOGEN*

For the entire year of 1951
earnings
could
conceivably
reach the $6-$7 level, which div-'

ticularly in the "growth" classification, Mr. Komanoff recom¬
mends two issues described as realistically priced and offering
a

almost 200%, and earn¬

ago.

Cautioning against indiscriminate purchase of securities, par¬

excellent values from

Equity Investments
For Savings Banks

earnings before

ago,

year

ings after accruing taxes at a 65%
maximum,
equaling
$1.13
per
share as against 74 cents a year

York City,

New

York

New

of

a

taxes up

ROMANOFF

I.

By

Members

over

Today's Maiket

Annual

Association

Bogen

Conference
of

■

Mutual

of

before the

the

National

Savings

J., May 8, 1951.

Banks,

years

in

so-

"formula plans," by which

it is sought to buy on

declines in

price and to lighten holdings bn
advances."
The

simplest

type

formula

of

plan is "dollar averaging," which
calls

for

investment
of

number

dollars

of

a

in

given

common

stocks each year. When prices are

low,

more

when

shares.
down

shares

prices
This

the

acquired.

are

average

bought, and

high,

are

results

in

cost

fewer

pulling

of

stocks

\

.

Another formula plan, known as
the

"constant

ratio"

Continued,

plan,
on

"might

page

24

Volume 173

Number 5012

.

.

The Commercial and Financial Chronicle

.

(2047)

FHA

gauged

Housing and
Mortgage Developments

because

involved, sugh

of materials and
concern

By FRANKLIN D. RICHARDS*

factors

the availability

orders

will

re¬

be

issued,

tightening of construction

money,

as

well

other

as

economic

and

money market changes.

Commissioner, Federal Housing Administration

been done

mortgage credit

restrictions, and estimates dwelling units started in 1951 will
be less than in 1950 by one-third. Outlines new
housing legislation

proposals,

and

concludes,

with reduced

building, mortgage lenders will be able

volume

absorb

to

FHA

tne

support of
banks has been a tribute

savings
to

substantial

tne

insured

mortgage

plan,

There

are

many

reasons

why

insured

mortgages
peal

ings

to

of
*

The

as

insured

mortgage
known

other

in

well

as

the

as

sound

as

ord

gain,

bo

mortgage
oanks

was

this

far

snown

in

In

both

year

ring

850,000

do

however,

know,

New

units

that

Housing Legislation

Proposals

line, bar¬

radical change in de¬

some

We

about

ran

to

fense requirements.

residen-

mortgages,

In view of

the. present interna¬

tional situation, various legislative

proposals concerning housing have
Continued on page 31

"'•/

has

originations

and

in

As

of

investment.

t

I see it. I also value

:

,

first evaluate the

us

v

in AT "THEJMMiliiP

what FHA has
done—our mutual problems—and

Let

L

WHEN YOU BANK-BY-MAIL

to oiscuss with you

and

"/.1

j

been

New problems and responsibiliface us today.
I should like

as

service!

our

\

A-

C' %'

FHA operations

ties

the outlook

limit to

no

the

physical secu--your counsel.1
can

Them's

fur-

outstanding,

careful

this

first

800,000

does not appear out of

back-

ground of current conditions. From

make it.

1946 to the middle of
1950,\ the
logical that,savings banks number of homes built Jn >this
were quick to see the
advantages^country each year increased at a
of investment, in
inse^
~>or+rapid rate. The 989,000 privately-'
gages. With the insured mortgage financed nonfarm units started in

It is

plan; the" market for mortgage
curities.

expanded

local

national

to

banks

in

mitted
on

the

under

law

scale

se-

of

one

Savings

scope."

states

many

national

a

from

1949

broke

and

to

During the spring of 195a, in the
light of current events, elements

operate
as

you

know, the laws of New York and

of

serious

/savings banks

loans

properties

on

where
Even

within
before

.

amended

may

stitutional

the
the

sive

located

from

gages
s

of

,

inflationary

evident and

the

trends

demands

r

na-

in

at

were

—-you can

caused

your
FROM

high

a very

buy

tion,

'■ ♦An address by Commissioner Richards
the 31st Annual Conference of the

the

which

further

Association

of

Mutual

-:

.

*

your

office

Open
us

one

and only "Dime."

supply envelopes and

little

your
as

$5

pay

postage both ways.

Dime Savings Account today. Start with
—as

much

as

$10,000 —$20,000 in

a

QUARTERLY

Joint Account. Use the coupon

complicated

below.

situation.

Effects of Credit Restrictions

\

"

,On July 18 the Federal Housing

,

—

"The Dime."

from

Hatett Dividend

Savings

Banks, Atlantic City, N, J., May 8, 1951.
,

or

make deposits, make withdrawals, do all

banking at the

We

OF

COMPOUNDED

raaterialsandstart new construc-

the

•

DAY

DEPOSIT

war

to

rush

a

home,

corn-

Then the outbreak of

ivorea

Bank by Mail at

In the comfort of your

were

of

before

National

Save time—-save money.

INTEREST

danger began to be apparent-

point.

mort-

of

,

building costs

impres-

parts
■

.

-

pete with home building for certain
critical
materials.
Overall

Corporation
an

•

tional defense threatened to

any-

States,

insured

many
:

t

so

change, the In-

Securities

portfolio

.

make FHA

United

in New York built up

records

in 1950.

Massachusetts
that

previous

by the
1,350,000 units started

than

more

were, per-

and

were

all

turn surpassed

in

was

Administration

restrictions

to

applications

credit"

announced

effective

be

for

on

mortgage

all

insur¬

filed after that date.

ance

v.

-

With the passage of the Defense

Production

for taking

reasons

Act, credit controls
applied to uninsured

were

also

home

loans

of

under

Regulation

Reserve

On

same

amended -its
to

day

Regulation
On

Jan.

projects
control

PUERTO RICO

Board

and

its. requirements

Worlds away
in time.

near

for

mate.

4

All outside staterooms.

5 Superb cuisine. 6 Deck games,
dancing, movies. 7 Excitement
of the Islands, horse racing, cock¬
fights, gambling casinos.

Sailings

every

otherThursday from New York

For FREE Cryite Booklet
see

your

travel agent

or

form

two-

week vacationists. 3 Perfect cli-

"CF"

write:

12

:

''

•

.

Federal

the

It
.

of

to
is

current

than
at

the

that

as

a

result

approximately
The

a

MM*

time

present

year's figure

is

estimate

that

the

be

be¬

may

tween 800,000 and 850,000. This is
not far from the 1947 volume of

115 BROAD STREET, NEW YORK 4, N.Y.




was

considered

ment

as

since the

it

had

a

notable achieve¬

not

been

Ave. J and

and

19th

Avenue

Coney Island Avenue

Ave.

and

W. 17th

St.

The Dime Savings

Bank of Brooklyn

Fulton Street and DeKalb Avenue

.

Brooklyn 1, N. Y.

CFC-l

I

Gentlemen:

*

$

.

\

■

Please open a

2

Savings Account in

Send

my

my name.

I enclose

my

first deposit of

bank book and free mail kit to the address below,

I

MAIL

g

COUPON
TODAY

Name

—

Address

|
|

_

|

City, Zone No., State

equaled

mid-twenties.

The ultimate effect of the credit
curbs

<.

CONEY ISLAND........Mermaid

third less

best

846,000 units, which at that time

BmIiU

7...

credit restrictions and

in. 1950.

current

......

Reserve,

existing factors, the number
dwelling units started in 1951

will be

Street and DeKalb Ave.
Street

revision

other
of

.....Fulton

BENSONHURST ........86th

_

Regulation X.
expected

DOWNTOWN

FLATBUSH

multi-family rental
brought under credit

by the
through

SAVINGS BANK OF BROOKLYN

with

family rental restrictions Jo con¬

in atmosphere,

T Ideal

possible

as

X.

were

12.

FHA

of
Regulation X, and simultaneously
again the FHA amended its multi-

DOMINICAN REPUBLIC
1

the

July.'credit restric¬

make

conform insofar

cruise to:

provisions
the Federal

Board, effective Oct.

the

tions

the

X. of

alone, cannot

be

accurately

MEMBER

FEDERAL

DEPOSIT

INSURANCE

in Padu-

needs.

savings

even

uncertainty

as

of

the

vol¬

rec-

a

year

of

an

activity

for

sav-

$1V2

over

This

recordings

nave

purchases

It

holdings of

increased

felt

trained underwriting analysis

financing, 'in

this

the estimated

Se-

has eliminated

tial

Total starts, with all

at

and

the. end of 1950 savings banks held
18.4%
of all injured mortgages

D. Richards

rity, As

banks

biiuon last year.

of

Furthermore,
the whole mortgage
transaction,
including the borrower and location

The mortgage

ings

increased

.

of

that

home

new

indications

defense

cah, Ky.; Savannah River, S. C.;
Idaho Falls, Idaho; and San Diego,
Calif., are examples of modifica¬
tion of credit curbs to meet urgent

& *

the

vestment:.

ume

com¬

lished credit regulations for spe¬
cific new construction necessary

field,

any

in-

ter of this year were

volume of

taken to per¬
from estab¬

curities Corp., Bob
Pratt, has made

ther increase.

type

current

also

flexible.

different

ing during the last six months of to the national
With the backlog of accelerated
filings -of last fall, .together with

are

a most commendable record in this

un-

mortgage

from
Franklin

has

liquidity

a

action already"

terms

a

and

change

The

are

66,000

can

mit

is

reflection of the high
filings of applications for financ¬

time

quarter

friend

good

President of the Institutional

apsav-

banks

My

rather high

conditions

that the credit curbs
of

this year

level. FHA starts in the first quar¬

of

276,000

January, February and March

applications,

types

of

in

the

a

record

starts

tion is

continuing at

to

\
high

only conclude that home produc¬

of. last year.

backlog of

comparison

1950.
This

Banks Increase Mortgage Holdings

investment,

an

country.

far this year, we can

pared to 89,000 in the first quarter

mortgages already made available.
During the entire history of the

so

in

1950.

However, in looking at what has

Commissioner Richards reviews developments in Federal Hous¬
ing Administration program and part played by mutual savings
banks in making FHA loans. Discusses recent

249,000 in

labor, high costs,

to whether further

as

strictive

other

of

as

7,

CORPORATION

8

The Commercial and Financial Chronicle

(2048)

would

Production, Not Inflation,
President's

Chairman,

Council

~

Asserting
"

our economy

can

stand strain of national defense,

leading government economist belittles adverse effects of infla¬
continuation at rate since Korean

tion, but admits its
be tolerated.

cannot

war

anti-inflationary program:
(2) additional
credit controls; and (4) intensification of
Lays down

as

(1) cutting out non-essential expenditures;
'

(3)

taxes;

more

,

The

of

wage

with constant

build-up

of

defense

our

strength which we are now un¬
dertaking is far smaller, both in
absolute terms and compared to

stabilization efforts. Urges complete utilization
labor force, and, a longer work week in key areas, along

price and

size and

the total

improvement in technology.

productivity of

economy, than the defense ef¬
fort undertaken during the four

our

There

must

be

can

flation is

doubt that in¬

no

serious challenge.

a

it

meet

We

and

courageously

But it would be disastrous
to regard
in¬

fully.

flation
sole

our

as

even

or

greatest
For

our

problem.

this

do

to

task

the

importance—
is

of

menace

mmunist

world
H. Keyserling

to

the

resist

L*on

economy,

number of dollars in

and ex¬
the total
national

our

income has risen much faster than
the
of

a

proximating $100

and absorbing close to

has

hours,

fewer

works

better,

comforts

mechanical

more

and

aggres¬

sion. We must

ity than the average family of ten
20 years ago.

productive nation
ruined primarily by in¬

ever

flation. Inflation has struck

a

final

blow, to nations which were first
weakened

undermined

and

by

combination of military

some

de¬

destruction of productive
pledge to that facilities through war, or internal
purpose not only our growing de¬ factional strife, or famine or other
fense organization, but also how¬ domestic
disaster, or moral decay.
ever much economic effort, cost,
If we succeed in
achieving a
and sacrifice may be necessary.
peaceful world based upon jus¬
In short, we cannot throw away
tice, nothing can be more certain
security in order not to be than that
the vital and throbbing
bothered by inflation.
American economy will continue
For example, we could get rid its timeless
progress, and that in
of our inflationary pressures to¬ the
years ahead the average fam¬
morrow
by abandoning the vast ily will have still higher living
feat,

or

;

increases being undertaken in our

defense

to* do

But

program.

so

would endanger our safety and all
those

tutions which

highly than

value

we

even more

safety;

our

security., Those who say that in¬
is a'1 greater dangei^ to us

flation

into this error. Yet
possibility that, if we
preoccupied with relief

there is the

get

so

inflation

that

underesti¬

we

Our

Strain
A

these

trying

strain

fronting mankind, we may be¬
unwilling to do enough by
way of national defense, and by

defense

come

our

the international programs
so closely tied in with
own national security.
If this
are

happened,
So

of inflation
world

could lose all.

we

view

must

we

the

in

the

problem

perspective of

events.

of

times

This

plus the other
obligations
which

is

crisis forces upon us?"

appropriate question,
final analysis the

an

because

in

the

strength

and

economy

support all of the mate¬

rial

productivity of

things that

do.

that, when¬

sible

we

our

trying to

are

MJ'ilhii*

•

It is fair to

We must remember

"Can
the
increased

stand

program,

world

absorb

would

in

1952

one-fifth

than

less

The

1953.

or

Tefell

that

sen¬

no

defense

smaller

with

tracted

build-up,

that

we
na¬

our

It is rather that now

committed

not

are

we

is not that

concerned about

less

tional safety.

con¬

undertook

we

after Pearl Harbor,
are

slower and

in¬

the

to

evitability of a third World War.
Instead, we are seeking through
the substantial but gradual martialling of the strength of the free
nations
from

to

the

deter

forcing

third

a

aggressors

the

war upon

world.
view of these figures I have

In

been called upon to

35 years ago.

worried

became the

we

for

democracy ten years
each of these instances,

In

ago.

when

us,

arsenal

Rising prices again

; there was talk about the declining

raised

the

cry'of despair

ahy

defense

are

undertaking.

now

those times said that

our

cannot now stand a

economy

lesser

much

very

stood

well

so

stand

body

the

strain,

have

nature

are

we

now

are

awakened

not

reality

or

confronting
foolish

so

it

value
eVen

dollar.

who

some

There

•reduce

slow

or

were

thought that the

to protect the dollar

.way

c

the

of

vance

every¬

had

we

down

was

the

to

to

do

pro-

And, because we faced up to
that responsibility,
we
won
the
and

war

Not

remained

only

that.

free nation.

a

In

addition,

far

real

the size and
and

the

danger

in Korea, our

look

big.

too

will

changes in
in

strength, the motives

be

a

from

the

daily

should

we

fail

to

our

court rv.

not

commit

But because

this

error,

we

we

did

lived

through and

ultimately overcame
inflationary troubles, and we

ottr

ntoved forward to higher levels of
business
prosperity,
production,
wages,

than
A

and

we

standards

had

even

living
before.

dollar, it is true,

bow that it could

20

of

known

years

But

ago.

have maintained
'Statement

of

can

buy less

ten years ago or

our

because

we

freedom, in-

Mr.

Keyserling before
twe Senate
Banking and Currency Comnrittee, Washington, D. C., May 9, 1951.
.




we

course

expanded

of. World War II,

productive facil¬
ities
within
industry.
We
im¬
mensely increased the productiv¬
ity of the soil in agriculture. We
our

learned how to

ply

more

by

that

mother

oped

use

our

efficiently.
necessity

of

new

processes.

which

invention,
and

labor sup¬

Spurred

better

is

we

the

devel¬

tools

And when the

on

war

Some

of the faint-hearted

thought
would

that

be

our

this

very

charts complete with dividend records for the
of 1950, showing monthly highs, lows, earnings,
capitalizations, volume on virtually every active stock on the
New York Stock and Curb Exchanges—single copy $10.00;
year

yearly (6 revised issues) $50.00—special offer of three edi¬
tions of Graphic Stocks, 1924 through 1935; 1936 through 1947
and up-to-date current edition, all for $25.00—F. W. Stephens,
William

15

Street, New York 5, N. Y.

Highlights—Bulletin of current developments for dealers only

Troster, Singer & Co., 74 Trinity Place, New York 6, N. Y.
"Information Please!"—Brochure explaining about

put-and-call

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

Dakota

Smith &

the

and

Railroads—Analysis—Zuckerman,

Co., 61 Broadway, New York 6, N. Y.

Over-the-Counter Index—Booklet

showing

an

up-to-date

com¬

parison between the 30 listed industrial stocks used in the
Dow-Jones Averages and the 35 over-the-counter industrial
stocks used in the National Quotation Bureau Averages, both
to

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

National

Planning for Profits in the

Stock Market—Booklet discussing

basic

three

the

principles of correct investment procedure
(included with each copy is a current primary trend

—$1

graph showing present actual trend of the market, and an
up-to-lhe-minate analysis of 445 stocks and 43 groups)—
Dept. C-62, Investors Research Company, Mihran Building,
Santa Barbara, Calif.
Public

Utility

Saxton

&

The

we

may

is

argument

this

not

our

have to
this

to

answer

Republic—Booklet describing

Dominican

&

4/ N. Y.
Sale

and

of Unrefined

Gold—Study—Morton SeideJ

Company, 458 South Spring Street, Los Angeles 13, Calif.

Timing Factor

Explanatory folder plus samples of complete

—

service—$1—Department B, Analyst Institute, 126 Lexington

New York 16, N. Y.

Avenue,

*

♦

Aerovox

*

&

Corp.—Analysis—Raymond

Boston 9,

Co—Memorandum—Kerr

Marietta

American

Co., 148 State Street,

Massachusetts.
&

Co., General

Building, Los Angeles, Calif.

Petroleum

\

Co.—Memorandum—Shaskan

Woolen

American

Co.,

&

Devices, Inc.—Analysis—Peter Morgan & Co., 31 Nassau

Audio

5, N. Y.

Street, New York
Industrial

Beneficial

Loan

Bristol Myers—Review—Ira
York

Scranton

Light
&

Co.,

available

necticut

Light,
L.

Memorandum

Eastman,

—

Haupt & Co., Ill Broadway, New

Power,

and

&

Detroit

Fansteel

circular—Chas. W.
Street, New Haven 7, Conn.
United Illuminating, Con¬

Power—Descriptive

209 Church
circulars

are

New

on

Light,

Gas

Haven

Electric

Hartford

Hartford Gas.

Darling—Data—Moreland

A.

—

6, N. Y.

Connecticut

Also

Corp.

Co., 15 Broad Street, New York 5, N". Y.

Dillon &

&

Co.,

Penobscot

26, Mich

:

Building,

.

Metallurgical Corp.—Review—Sutro Bros. & Co.,

Broadway, New York 5, N. Y.
Also available are
of Derby Oil Company and Pittsburgh Steel Co.
Foremost

Dairies, Inc.—Memorandum—Auchincloss,

Parker &

Four

Wheel Drive

non,

Auto Company—Analysis—Dayton

105 South La Salle Street, Chicago 3,

& Ger-

111.

Continued

on

page

it?"

unfounded

fairly simple. The Ameri¬
is essentially young
and vigorous. It gradually builds
up to
the strength to meet any

new

Foundation

Co.

economy

strain imposed upon it.

sequently. if
nomic

we

manage

our

year

than

in

eco¬

wisely, each suc¬
should find us better
the

preceding year
to carry the burden of a defense
program rising even as high as
one-fifth of our total output. For
if our total output increases from

Continued

on

Primary Markets

Con¬

affairs

page

34

120

reviews

Redpath, 52 Wall Street, New York 5, N. Y.

burden

carry

40

Exchange Place, New York 5,'N. Y.

economy,

fear is
can

A.

Co., Inc., 70 Pine Street, New York 5, N. Y.

Rico and the

Puerto

tables—G.

Stocks—Comparative

Common

because of the length of time over

able

we

"Will

the strength of

ceeding

strength

downfall, that

the

that, while the defense pro¬
gram we are now undertaking is
smaller than during World War
II, it may last for a longer number
of years.
And this leads to the

and

then

the

about

economy.

Sometimes

was

over, our economy was not weaker
but stronger than ever before.

our

made

which

would have

fear

false

by
on

the actual

we

dollars but. also

tions of 1,001

full

war

and not be side-tracked or slowed-

question:

our

Broadway, New York 5, N. Y.

con¬

relatively minor

If

Korea.

erroneous

no

drawn

sap

followed,

50 stocks—Laird, Bissell

Graphic Stocks—January issue contains large, clear reproduc¬

danger lies in

our

actions, of the Soviet power,

there

wrecking or weakening our
in that great effort, we
actually strengthened it. During

only

Stocks—Comparison and analysis
& Meeds, 120

Insurance

earnings of

Purchase

To those who

may

of

source

economy

not

Casualty

1950

this

who realize that the

But to those

from

lost

&

of

V

grams designed adequately to pro¬
had been

Colorado.
Fire

try¬

United Nations ad¬

plans

tect the country.

If that sentiment

letter. without obligation and with
all requests mailed by June 1, 1951, a 111-page text book
will be included—Rhea, Greiner & Co., Colorado Springs,

York

to

the

of

us.

few miles

a

defense

down

it.

action—Current

to think that this

as

armies of the

strain

'

today's

Comment—Applying Dow's teachings to

Theory

market

11-day cruise—Dept. CF,-Bull Lines, 115 Broad Street, New

danger has subsided whenever the

could not

because

realized that

we

will be pleased

the following literature:

and

1940

do looks too big when
through the eyes of those

to

now

than

strain

between

The only explanation of

1945.

Nobody in

we

Dow

or

which

program

send interested parties

to

.

cited, there is no reasonable basis
for the fear in some quarters that

lack recognize and act upon the real
build up our defenses to resist ag¬ of confidence about the ability of implications of that war in Korea,
gression, we have had the prob¬ our economy to stand the strain we could bring down upon our
after Pearl Harbor, when we set heads an even greater danger of
lem of inflation during the first
months or year of that build-up. out upon an
expansion of our that relatively minor war becom¬
The high cost of living became a military strength about two and ing a major war. And this is why
household word soon after we be¬ one-half times as
great in pro¬ we must continue vigorously to
build
up
our
national defenses,
gan to resist Prussian militarism portion to our toial production as
ever we have

It is understood that the firms mentioned

North

for this

reason

clusions

pi''the United States

person

entire economy.
attempting a defense

which,
under
current
plans, may rise to an annual rate
of $55-$65 billion within a year or
two; but even at that level it

who

this:

greatly

international
the

is

economy

the

year,

a

half of the'

our

are

we

billion

Recommendations and Literature

build-up

viewed

of National Defense

American

Now

ing

Stand the

question frequently heard in

our

of

output

fear is that what

Can

Economy

mate the towering issue now con¬

way of
which

unwittingly giving

are

comfort to Stalin.

ple will fall

from

economic

more

There is

chance that the American peo¬

no

standards and still

precious liberties and insti¬ 'than Stalin

a

of the total output of our economy

No great and
was

to

up

peak level of defense outlays ap¬

Consequently,

family of today eats better, dresses

or

build

to

single dollar.

the average

Then

Harbor.

Pearl

undertook

buying power

net effect is that

the

after

years
we

the

in

decline

conveniences, and also has more

supreme

o

production,

personal savings and social secur¬

which

C

our

divert

from
of

our

attention

would
our

creased

panded

Thursday, May 17, 1951

Dealer-Broker Investment

time of war—and con¬

sequently they predicted a great
postwar depression. But the de¬
pression did not arrive. For five
years after V-J Day, from 1945 to
1950, we marched fairly constantly
with only minor interruptions to
still higher levels of peacetime
production, still higher levels of
business income, farm income and
wages, and still higher standards
of living.
•
v

Economic Advisers

of

the enormous pro¬
capacity which we had

ductive

By LEON KEYSERLING*

.

in

utilize

to

.

peace

built up in

Our Serious Problem

able

be

not

time of

.

Troster, Singer & Co.
Members:

74

N.

Y.

Security Dealers Association

Trinity Place, New York 6, N. Y.

Telephone:

HA

2-2400.

Teletype NY

Private

wires

1-376;

377; 378

to

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

Louis

37

Volume 173

Number 5012

.

.

The Commercial and Financial Chronicle

.

(2049>

New Officers of

dividing

Cnrrency the
Rising Prices

Naf'i Asociation of

Basic Cure lor

Mutual Savs. Banks
Carl

Freese,

of

May
the

9

New

held

Banks

the

as

President

at

Mu¬

its

31st

which

last

member

its

We need

Vice-

and has

year

of

been

Committee

on

desperately to find new
of
getting public and

methods

legislative

interest

redeemable
to

cure

prices.

In

adver-

It

first
Robt.

M. Catharine

for
Debt since 1947.
He is also
a
member of the Association's
Exec¬

utive

Committee

Administration

<.

and

Council

is

and

of

former

a

President of The Savings

Banks'

Association of Connecticut.
Mr.

Freese

is

a

wide

experience
investment

the' banking
field.
He was

ciated

25

in

for

with

years

and

1928-43.

with

the

Bank

as

In

1943, he

Connecticut

came

Savings

Vice-President,

a

of

Treasurer

in

1946.

President of

He

the

was

bank

in

1948.
Born
Mr.

in

vard

Mass.,

graduate of Har¬

a

our

Perhaps

not

a

has

been

the

the

difficulties

those

of

only

genuine

\
over¬

that

who

us

gold-redeemable

for

a

is the

currency

cure

con¬

believe

inflation

and

the only permanent base for
political freedom. I hope so.

ne¬

universities

and

colleges.

But,

like

should

good

a

not

general,

we
the

underestimate

enemy.
Our enemy is apathy,
ignorance, and last, but not least,
who
understand
printing

"A Crank's Idea"

those
^

Walk down the street in
any

and ask 100 people whether

city

or

not

they believe in restoring the gold
standard

—

and

almost

*

*Panel

fett

remarks

before

by

Conference

certainly

Congressman
the

on

Buf¬

Monetary,

Fiscal and Credit Policies of the United
States in the Present World
Crisis, under
the auspices of the Economists' National

Committee
on
Monetary
ington, May 10, 1951.

Policy,

Wash¬

press

money

and

instrument to

an

using it

are

achieve

as

unlim¬

ited power for themselves at the

the

of

expense

well-being

and

freedom of the,people.

The Alternatives

; •"
Now

I

want

to

)'

discuss

very

briefly and
the

portant
ranks

that

can

with

the

so-called

a

free

Treasury stocks are
satisfactorily de¬
free

market

price.

thing is that our small
dividend, and our cause

are

suffers correspondingly.

of

the dollar goes on apace.

Yet,

once
a

put

very gingerly one
technical
problems that

They
the

of
is

our

come

and

appeals to

victory

message,

into sight.

gloomy picture?

.

,

based

optimism
on

this

on

score

the fact that the Amer¬

their insurance and their savings
bank deposits cut in two in pur¬
power

in .the last decade.

That has become

economic fact

an

of life with them.

Ten years ago,

been

Now

hurt.

the

They

wrong.

If you want actual evidence of
their changed attitude, take a look
recent

figures

on

bond

war

sale& and redemptions.
looking for an honest

answer

inflation—not

price

wage control

Who

facts?

have

the

been

indifferent

1915.

New

He

Haven

has

lived

since

area

There
to

are

meet

plored.

inherent

power

insurance

America
the

This announcement is neither

an

Army for two

They

old

are

is

winning the Croix
other

citations.

of

a

In

the

and

nor a solicitation of an offefto buy
offer is made only by the Prospectus.

any

absence

of

And
and

the

so

tiate peace.

the

time

is

now

of

War .Fuiance1 Committee

NeW?'Pavenv region

in

to

more

human

victory

story in

kind?

Then

fight.

The

newly

elected

will

has

served

larly balanced
more

any

to save

budget

our

Dated

May

an

almost

tee and its Council of Administra¬
tion.
He is also a

Interest

past President

of

the

Due

consequence
currency

almost

War

of inflation.

certainly

was

of these Bebentures.

May 1,1970

payable May 1 and November 1 in Mew York City.

born in Jer¬

sey

Price

101V2%and Accrued Interest

with the Title Guarantee & Trust

Company in Jamaica, L. I., where
he

rose to Manager of the Bank¬
ing Department in 1917.
He left

there in 1919 to accept the
post of
assistant cashier with the Bank
of Manhattan

Company.

Copies of the Prospectus
'

be obtained from only such of the undersigned as may
legally offer
compliance with the securities laws of the respective States.

may

these Debentures in

In 1926,

he was made Assistant Vice-Pres¬
ident and in 1928, Vice-President

in

charge of the uptown division.
1930, he became associated with

In

the

New York

Company,

Title

&

becoming

Vice-Presi¬

the

end

New

trustee
Bank.
to

Administration,
of that

York
of

In

in 1941. to

time

and

EASTMAN, DILLON & CO.

GLORE, F ORG AN & CO.

returned

to

comptroller and
the
Dollar
Savings
was promoted
Vice-President and

President.

-




.

GOLDMAN, SACHS & CO.

LADENBURG, THALMANN &CO.

at

as

1938, he

Executive

DREXEL & CO.

1936, he served in

Washington, D. C., as Senior Dep¬
uty Administrator of the Federal
Housing

THE FIRST BOSTON CORPORATION

Mortgage

dent in 1933.
From 1934 to

MORGAN STANLEY & CO.

CARL M. LOEB, RHOADES & CO.
May 16,1951.

.

ss

.

F. S. MOSELEY & CO.
'

.

.

seems

to

political
And

so

a necessary foun¬

dation for peace.

of the State of New York.

City, N. J.
He started his
banking career at the age of 17

do

redeemable in gold is

Savings Bank Association

Mr. Catharine

will

automatic

•

1051

goldregu¬

balance of power or interna¬

tional agreement.
be

a
a

civilization than

3'/t% Debentures Due 1976

several

on

Our

Victory in the fight for

ident

Catharine

this

redeemable currency and

Consolidated Natural Gas Company

important association committees,
including its Executive Commit¬

of

win

!

Vice-Pres¬

is
Robert
M.
Catharine,
President, Dollar Savings Bank of
the
City of
New
York.
Mr.

Can w6

values

we

ma¬

military

can ever achieve.

our

Mean

liberty and

the

eight

war-lo'aii campaigns.

|

' \

terial progress than any

the

for

all

zero.

ripe to get

Victory in this fight will

$50,000,000

In World War II, he
co-Chairman

as

'

move¬

the truth to the people. ..-

war,

served

.

that

opportunity is here,

the

he was attached to the Amer¬
ican Commission in Paris to
nego¬

of

ment, I seriously doubt that The
deterioration of the dollar will be"

a

should give them the
In my book, the responsi¬

the

deteriorating

de Guerre and

Following

in

policy-holders

effectively activated,

problem

to

hocus-pocus.

offer to sell

The

years,

this

suggest they be ex¬
If the gigantic reservoir

social

life

them

challenge' of

I

in

the U. S. Ambulance Service with
the French

even

force

to

ways

the

1923.

During World War I; he served in

or

irresponsible in their attitude?

who

us

people have
know some¬

thing is wrong, seriously

at

bilities.
I don't like to be
hafsh,
but is it too much to
say that they

tell

those of

attempted to sound the alarm on
inflation were talking about a
peril that was unreal and in¬

tangible.

only final answer to
deteriorating currency.

And so I make the specific suggestion that vigorous methods be
used to jar these custodians into
action to carry out their responsi¬

is

ican people are waking up.
They
have seen their war bonds and

chasing

in gold is the
a

stopped very far this side of
That is the road we are on.

People Awakening

My

tJnjf-

currency can be solved.

Why do I say that, after paint¬
ing what may seem to many of
you as a

the largest custodians bt

are

people's dollar savings.
they are completely

less

of

ranks

few effective

across

could

close

we

the banks
insurance companies.

life

situation.

Meanwhile, the deterioration

ex¬

general atti¬

foregoing

time,

group's position quite accurately.
That is not important.
The im¬

answers.

■

price.
A third
gold market

free
of

Perhaps I do not state this third

with

up

bility belongs to
the

irii#*
representing their competeftdt^
prompt they are intelligent, enough
td
gold standard know that a
currency redeemable ,

the

a

true

a

on

10

getting

,

ways

University, receiving his AB

degree in
the

Framingham,

Freese is

of

use

a

devise

which

'

front

assum¬

ing the additional responsibilities
elected

Buffett

happenstance.
For 50 years, the study of gold
and
its importance to a sound

L.

the

tude.
Howard

This lack of interest and under¬

our

on -

come

different

more

or

what's

states

in

experts

cited fibout it—is

asso¬

R.

Day & Co., investment specialists,
serving as a partner of that firm
from

e

minority.

glected

proposal

^gold-

three

are

problems

on

is

a

period

politeness, the

gold-redeemable cur¬
technical and compli¬

a

for

indifferent—we

even

cated

So

small

is

received

colleagues

rency

three

:

except

standing

of

so-called

monetary :system

of

man

a

or

be

almost similar.

my

just too busy

-

these v

of

steps,

will be

subject;

same

will

you

that

not

tion

Tion.' Thus far,
we
have not

Freese

will think

which there is real pressure on us
for prompt action.
The restora¬

stages:

achieving t h

is

are

(1) Attention.:
(2)-Interest.*
(3)
Convic- '

/ in

while

hostile

are

succeeded

try and discuss the

favor

sterilized

Capital Hill and

on

up

net result

ness, I believe :/

three

go

with deference and

tising busi¬
there

Or

of

'group

velop

of them

split

higher

expectation

currency.

90

some

market while

you are a crank.

and
,

than

more

gold-

currency as the basic

rising
the

in

the

problem of

G.

"

possi¬

Freese

Association's

restoration

advocated solely by cranks, today the
lay publicY broaden- '
ing realization of rising prices warrants optimism over

bility of achieving victory for sound

are

the price of gold at
$35 per ounce.
A second group favor

as

7

ranks

here—some urge that we
promptly
restore the gold
standard with

S. Congressman from Nebraska

Congressman Buffett maintains whereas formerly gold redeem*
ability was publicly regarded as an over-technical question and

was

May

Government Bonds and the Public

Carl

our

at

of

of

City on
inclusive.
Mr.

9,

U.

on

President

Conference

served

a

Conn.,

Atlantic

at

and

Savings

Association

Savings

Annual

to

Haven,

elected

was

National

tual

President

Connecticut

of

-

Apparently

By HON. HOWARD BUFFETT*

G.

Treasurer,
Bank

the advocates
redeemable currency.

t

•

'

!.

The Commercial and Financial Chronicle

10

Thursday, May 17, 1951

.

.

.

(2050)

Rising Prices and Costs—Real
Causes and Consequences
Y. University
Committee on

National

Economists'
Monetary

national,
local governments, the

state

and

boon

of

Policy

•

,

reserve

against

could pass on

direct

and

of

depreciating money

banks"

As

prices and .costs
in the most
expeditious way the

falling

which

results

city banks," and "central

city

respectively

long

deposits.
our nation's

as

reasonable

a

currency

redeemable in gold there was'

was

limit

which

to

the

expansion
of
money
could
go
beyond its sol.id base of metal and
of

—

physical productivity, as repre¬
commercial

sented, in

the

defined

eligible for backing of
notes, bank re¬

as

Federal

paper,

Reserve

purchasing,,
Dr. Robinson declares perversion of our government debt into >
power set loose
by issuance of serves, and bank deposi.s. Freed
of its obligation to redeem dollars
purchasing power has created major menace to nation's defense ;
money and by creation of bank
credit * brought
into
circulation in gold at the nation's earlier par¬
effort, in having led to runaway prices. Points to "loading" of <
through deposits subject to check, ity, or even-at the depreciated
Federal Reserve and commercial banks with government paper,4
is directly associated with, ancU value of. $35 to the ounce, set by
and other steps causing dilution of the people's money.
the President in
controlled by. production and sav¬ Congress and
than
last
summer.
Spot ings. That is, currency unleashed 1934, the United States Govern¬
Rapid advances in prices, and more
ment escaped the control implicit
therefore in costs, offer today a prices of such essentials to de¬ against commodities should repre¬
sent a corresponding contribution in the peonle's historic right to
major menace to the defense ef¬ fense as cotton, lead, steel scrap,
to the flow of goods and services, demand gold, in performance of
fort. Depreciation in the purchas¬ tin and wool have since the out¬
or
a
corresponding
tightening the contract, when fiscal manage¬
ing power of break of trouble, in Korea,, risen
when

of

volume

the

.

is

dollar

the

pressing
Uncle
his

in

Sam

rearma¬

ment program

harder

even

it

than

the

is

typical house¬
her

in

wife

family

budget

purchases.

unlike

But

the

latter,
Sam

in

person

of

Uncle
the

Federal

our

Leland Rex Robinson

•

Government
has

for

better

the

of two
live beyond

part

decades been able to

his current means, to multiply his
indebtdness many times, to turn
this very indebtdness into money,
and

to

creditors to
values sub¬
the original

require his
accept payment'in
stantially less than

contract.

webLoyer a
hundred percent.. And all this de¬
spite the vast increase in produc¬
tivity and in production during
the last quarter century.
\ v ;
We may explain this failure to
control,
prices
and
production
costs in monetary and fiscal terms,
from

to

quarter

a

.

the

in

or

ble

more-

market

immediately visi¬

of demand

processes

goods and services exceeding
the supply, with the resulting gap
which is popularly called "infla¬
tionary." Whatever kind of ex¬
planation we offer, however, it all
comes
cut to the same thing in
for

the

end.

"V-'.V

"Put in

'•

nutshell,"

a

the

as

ex¬

pression goes, the problem can be
visualized rather simply: —- be¬
tween 1926 and 1950 the dollars
entering the markets to purchase
commodities more
than tripled,
industrial

while

physical
double.

production,

did

terms,

/

,.:v

not
;

,

in

quite

,

budgetary chaos, or com¬
pounding debt .might raise for
them the danger signal. The dilu¬
tion of the people's money could,
ment,

consump¬

our

in-some sectors

belts

tion

of

later

or

sooner

of the

in order that loans can
be repaid and budgets balanced
in both the individual and public
economy,

aggregate amount of such obliga¬
tions

directly .froim the

acquired

United States which is held at any

their demand

of
modern
technology
and management.
We approach this happy state—
or at least we stay .he destructive

Adjunct Professor of Political Economy, N.
Vice-President,

consumers

savings

ROBINSON*

By LELAND REX

150,000,000

than

more

of our nation and to our

time

one

the 12 Federil Re¬
shall, not. exceed

by

Banks

serve

Though

$5,000,000,000.00."

to .be

supposed

was

this

emergency

legislation, its life has been suc¬
cessively extended to July,!, 1952.
In view of the foregoing it is
not

surprising,

third illustra¬

as a

tion, that Federal Reserve notes,
which

originally intended to

were

in

flue uate

the

with

volume

outstanding
needs

actual

of

com¬

and

industry, and were
therefore backed by eligible self-

merce

liquidating paper arising from and
reflecting these needs, can now
issued

be

for

the

to

Banks

Reserve

according

circulation,

to

a

June, 1945 amendment to the Re¬

Act, with

serve

in

of

cover

a

them.

behind

much

as

The

75%

as

bonds

government

hardening

of

monetary arteries involved in

our

this process can well be imagined
did, proceed in a number of by reference to the almost con¬
ways,
in
illustration
of which tinuous and huge increase in the
"households-."
J '
Ordinary mortals are painfully some four significant steps will Federal debt since the thirties,
now
be
when this conversion of govern¬
brie-fly described. ' ,
aware of this. Extensions of credit
and

-

,

debt

meet

ment

day-.

began.

their -inevitable reckoning
1935 Supreme Court Decision
Incomes have to be earned
Let us refer first
to the Su¬
by someone if in the longer run
they are to be "cashed in" by preme Court decisions given in
1935
concerning the
anyone. - Governments,- however, February,
do seem at times, and over con¬ constitutionality of the legislation
of
mid-1933,
which,
in abandon¬
siderable periods, to escape these
homely
consequences
of man's ing the historic gold standard in
"original fall" and the expulsion the United States, abrogated the
from, the traditional "Garden of "gold clauses" in private as well
Eden."
As
they determine the as public contrac s. These provi¬
."coinage of the realm"; as they sions were designed to protect
fix the. content and conditions of lenders against impairment in the
issuance of the medium of ex¬ value of the money to which they
.

into

circulating

notes

i
Reserve Reduction

As

fourth

a

possibilities

sidelight

of

terioration- in

the

nation's

money,

that

ratio

the

mum

1945

of

posit

the

35%

Federal

against both.

in

against their de¬
40%

and

liabilities

note

note
mini¬

reduced

was

liabilities

their

mignt

required

for

Banks

from

de¬

backing of the
we

reserves

Reserve

the

on

progressive

against
25%

to

These reserves,

let
it be borne in mind, are in "gold
binding the debt¬
certificates," which are only re¬
settle in gold, or in i s deemable as the
sible for them, as every student ors to
government may
of history knows, to visit the con¬ equivalent in dollars at prevailing
stipulate
against
gold
actually
in
case
any
question impounded by the
sequences
of
their
fiscal and rates
Treasury. The
monetary mismanagement upon existed, at time of maturity of the point is not that 25% is too
change

which

we

entitled

were

standard of value
call "money,", it is pos¬

and

payment

upon

of

their claims, by

—-

While apparently succeeding for
time in these unsound monetary

a

and
now
4

>;

fiscal

policies,

country
finds itself involved in global
our

responsibilities and dangers, with

conditions the pur¬

Under such

chasing power of the dollar must
give ground—and must continue
to
give ground, to. the tune of
mounting losses for the jjrocure-

low;

blind and furi¬ debt,; about the currency's full
imposed. by unbal¬ redeemability at; is-stated gold

the people in the
ous

penalties

anced

inconvertible

budgets,

content.

cur¬

rencies, and monetized debt.
'
an essentially sound economic and jhepf agendies of government, for
When the Federal "Government
industrial system subject to the fworkers dependent, upon pension
fails to meet, its current outgo by
continuous sapping of spiralling ;and retirement funds, for owners
current income (as in 17 of the
costs, of prodigious government 'of all so-called "liquid assets,"
last 20 years)
the gap between
debt and of increasingly intricate and for all who are in any way
demand for commodities and sup¬
controls which we can hardly pal¬ dependent upon incomes fixed in
ply of commodities is potentially
liate—much less cure—until we money terms.
widened by this tnuch.
Govern¬
face up as a people to certain funOf course what we call "infla¬ ment
deficits, as evidenced by the
damentals in the wisp and realistic tion" can be held in
check, or towering Federal debt, give rise
management of the affairs of our even controlled, provided produc¬
to no corresponding increase
in
public household.
tion of all kinds of goods and the
goods and services which peaCertainly it would not appear services in demand can be step¬ pie demand and for which they
that such wise or realistic man¬ ped up to keep pace with the* will
part with their money. This
agement of our "public house¬ offering of money for them in the must
obviously be so when, as in

vote"

regulate
would

innumerable

quarter century.

economic

materials

for

purchasing
ment

or

now
more

pay

the

nineteen-twenties;
*An

address

Conference

or

agencies

must

double

In acquiring

peace

on

by
the

raw

the

war,

of
in

govern¬

general

costs

and

the

of

a

fifth

Dr. Robinson before
Monetary, Fiscal and

Credit Policies of the United States in the
Present

World

Crisis, under the auspices

of the Economists' National Committee

Monetary

Policy,

Washington,

May

1951.

on

10,

markets

activity.

dominating
In such cir¬

time of total

the

general

levels

of

prices can conceivably be held

on

confronting

in recent

us

this would not give to the

that

pow&r

to

of

money
with if the
.

interfered

made

were

enforceable,

and

ac¬

in

there is

no

in minimum

gold

pletely activated by

Unanimously* however,

the

lation

unconstitutional

was

wi h

cannot be

reserves

long

reason

com¬

of the

Federal laws which deny to Amer¬
icans the

right to possess
gold.
•;
V

the obligations of the
United States Government, Whose

in monetary

gold clauses should still be con¬
sidered binding. Nevertheless, the
Court allowed no damages to the

sive

to

reductions

reserves, as

tion.

these

their

of

effective bar¬

further drastic

to

re¬

gold, directly or in-'

at -1he "option

directly*
owners,

nor

fully

are

as

respect

wholehearted

currency

"gold 'certificates"
deemable

ample

prove

inspiring full
point is" t.iat; as

cordingly permitted their abroga¬
Court declared that" the 1933 legis¬

are

under terms relatively

issued

lies

What

behind

.sapping

the

of

•.

trade

or

progres¬

the

dollar's

strength can now be illustrated; by
taking a look at the changing

ate

assured of ready and

in /the

lodgement

$800,000

immedi¬
country's

inflationary

Falls, Minn.

into
are

posed

1
•

80,000 due May 1, 1959 3!/2%

82,000 due May 1, 1960 3M>%

210,000 due May 1, 1961 3F2%

PRICE 100 plus accrued interest

of

which

reserve

upon

*

KEENAN & CLAREY, INC.

immediate

were

losers,

the
an

funda¬
member

expansion
only

requirements im¬

the so-called commer¬

dencing goods and services
Just

before

the

broke upon us more

promises by

the

cur

national govern¬
:

;

From the

Direct Purchases
v

.

Treasury

'

We
of

should;

the

shortly

1933,
of

fact

the

secondly,
that

the

from

year

abandonment

after

convertible

gold

and before the Supreme

standard
Court de¬

,

war

than 50%; of
173y2 billion depreciated dbl-

lar

money supply arose from the
purchase of United States govern¬

bonds

ment
and

take note

.

Korean

by this unilateral abrogation of its
ment.

com¬

peting fop these dollars.

thus

olher

Federal

by

banks.

converted

Reserve

These

bonds,

into

money,
put
their tremendous push behind de¬
mands upon production and irade;

but

as

they represent deficits tin

Federal

spending they add little
the Federal to the supply of goods and serv¬
It is a sobering thought, indeed, Reserve Banks were given author¬ ices available in the market. This
that out of every thousand dollars ity to purchase Federal obliga¬ contemporary
process
whereby
in "gold certificates" held by Fed¬ tions directly from the Treasury
large debtfr incurred by govern¬
eral Reserve
Banks,1 plus every —a right hitherto "not conferred ment are. cumulatively converted
.

,

cision

cited

them.

-above,

Passed as am emere
these amendments

three thousand dollars of Federal

upon

debt owned by

gency measure,

(when

to

used

these central banks
to create
member

bank reserves by increasing their
deposits with the Reserve Banks)

the Federal

that any
United States,
vided

Reserve

Act pror-

obligations; of the
or

"fully

guaran¬

into

purchasing
people threatens

pace- as

we

economy.
ever

move

No

power

to

for

step, up

toward

medieval

a

the

jts
war

alchemy

made greater claims of pro¬

teed

by the United States as to ducing something out of nothing.
principal.. and interest", n^ay be
How money is. fashioned out 1 of
bought or sold "directly from or deficits is seen in a different set
to
the.United
States*"
;
with
the
requirements of 14%, 20%, and
Continued on page 25
24% in "country banks," "reserve present proviso that
: . .The
Carr "arise

MINNEAPOLIS 2, MINN.

the

into

or

cial banks of the country.

75,000 due May 1, 1957 3M>%

the bonds living in

owners of

standard

circulating cur¬
purchased by the

reserves

upon

by the

72,000 due May 1, 1956 3Vz%

of

countries still holding to the gold

thus

not ,only

of credit can be built limited

70,000 due May 1, 1955 314%

78,000 due May 1, 1958 3%%

be¬

thereby into Federal Re¬

notes,

banks,

68,000 due May 1, 1954 3%

ment

Federal Reserve Banks and trans¬

mental

$65,000 due May 1, 1953 2y4%

are

rency* but
formed

NOTES

debts

converted

serve

SERIAL COUPON

potential

explosive when these gov¬

ernment

Franciscan Sisters of the immaculate Conception

power in the market places came
prices following abar.don- out of loans, discounts and in¬
the gold
standard oc¬ vestments in private securities-by
curred after this interval, but for¬ the
nation's banks, mostly evi¬

mestic

eign

The
comes

the substantial rise; in do¬

course

banks.

ISSUE




value

The

confidence.

'^split neither circulating

gold clauses in private contracts rier

unattractive to such investors, and
are

Little

the

be

*

would

conditions

under

preparation for defense, the bulk plaintiff until and
unless loss sources of our money supply, that
of government
activity and ex¬ could be shown clearly "in rela¬ is, all bank deposits ana ai cur¬
penditure is for armies, wings, tion to buying power"; and no rency in i ills and pocket?, during
an
even
keel, though it would ships, and armaments. The infla¬ successful suits were brought in the last
quarter-century.- In June,
never be either possible or desir¬
tionary "gap" widens even fur¬ the six months interval beginning 1926, for instance, the
money- sup¬
able to freeze them into inflexible
ther when government obligations Aug. 27, 1935, during which Con¬
ply of the American people, less
patterns in any dynamic or healthy —instead of being bought, paid
gress permitted certain categories than
$51
billion, arose largely
economy.
Even so, desirable as a for and held by genuine investors, of
litigants to press such; ac.ion from the peacetime needs of trade
"stable price level" might appear,
who limit their current purchases against
the government in the and'industry. Over four-fifths, of
in. contrast with the runaway to effect the necessary savingsUnited States Court of Claims. Of the
dollars
then exerting their
situation

cumstances

years,

NEW

war or

,

v,„

a

to- four, held

five

of

by

Federal/constitutional

,

hold" has occurred during the last

1

:

The Supreme Court-

this

fact

in

$20,000 "of bank
deposits subject to circulation by
check, under the existing reserve
some

,

yolume 173

Number 5012

.

.

The Comviercial and Financial Chronicle

.

H

(2051)
Continuing Authority to Regulate

The Role oi Credit Control
In
:

Economy

By WILLIAM McCHESNEY MARTIN, JR.*

New Reserve Board

fall

under

credit,

asks for continued authority to regulate
consumer, real estate
and miscellaneous credit transactions. Stresses further need

cannot-solve the problem of infla¬

to

the

you

views

of

the

Board of Governors of the Federal

Reserve

System

with

respect

to

the responsi¬

bilities
upon

placed
dele¬

or

gated to the

form

Reserve Sys¬

spending
since June, 1950. Without the re¬
straints

provided

Production

by the

Defense

the

Act

duction Act of

most

1950.

two

much

as

and

these

both

were

rapid credit expansion and infla¬

tionary

these

provi¬

by

the

other

lenders

McC. Martin,

Jr.

tedly
emphasized before this and other
p e a

of

the

Congress

pri¬

mary reliance must be placed on
fiscal, credit, and monetary meas¬
ures
in
combating
inflationary

forces

redemptions

accounts

of ready

to

necessary

pressures

prices

on

emphasize

creating
are

upward

likely

to

continue dominant in the economy
even

though these

pressures

may

appear temporarily to have been
moderated. Nor is it necessary to
recount

again

stances

and

the

circum¬

many

of

reduced

were

hardly

forces

Some

slightly

*

more

which

have

been

af-

indicated

that

in

is

further

order

and

resulting
become

weeks

inflationary

later,

after

durable

consumer

-

prepared
relax

in

regulation

careful

buying

use

cash, demand deposits of

relative

their

either

credit

action

such

economy.

to

tighten

terms

would

be

or

strict

important steps have been

taken to check

opments
and

and

other

inflationary devel¬
materials

conserve

Last

resources.

on

building.

regula¬
considerably limited at
by the large volume of
building then under way and by
the
large volume of financingwas

the outset

while

outstanding.

Thus,
activity and
mortgage
credit

construction
of

.

have

continued

levels,

the

have been

at

high,

very

restrictions

imposed

important in helping to

the

number

of

units

new

During the winter
months housing starts were equal
to

those

a

earlier but

year

than

more

wer<?

seasonally from'

the

extraordinary high level of
spring and summer. In March
and April starts appear to havo
last

been about one-fifth below

July,

It

a

year

V

ago.
now

prior to the passage of the De¬
fense Production Act, the Federal

present

Housing

less

Administration and the
Veterans* Administration
tight¬

terms

The effectiveness of the

being started.

credit,

the

curtailment in the volume of resi¬

reduce

Credit

preserve

preference

At the time

announcement

whenever

In the field of real estate

several

provides

credit

consistent

Estate

by

widely regarded as being
and likely to lead to sharp

were

down

.

automobile

an

the

that the Board

Regulation of Real

goods field

now

in

you

ened the terms under which
instalment a buyer must pay onethey
third down and repay the balance would insure or guarantee mort¬
of his contract in npt more than gage loans, both on new and on
existing properties. Since the pas¬
15

by close to

Reflecting the demand for and

The

that

role

me assure

with the objectives of the Defense
Production Act.

-

evident.

more

fect since that time.

billion dollars.

a

dominant

to

as

consideration of current and pros¬
the

savings

the

granted to veterans.

extensions

a

re¬

points
the

percentage
authorized

national

Let

,

houses

With

Housing Administrafor to

commitments

developments play

for

50%

$24,250.

10

were

situation is to be expected as
long
the defense program and inter¬

as

.

pective' developments not only in

bonds exceeded cash purchases by
a billion dollars, and savings

three-quarters of

the

only

were

Board

gram

over

inevitably generated by the
expanding
defense effort. It
is

that

trades

to

over

to

tion

Such credit was supplemented but in the
economy as a whole,
by drawing on liquid asset hold¬ the Board announced, < effective
ings. Between the end of June, Oct. 16, a more restrictive set of
1950, and the end of March of this terms which has remained in ef¬
year,

5

higher

and

pressures

also

consumers

at

spect to loans guaranteed by the_
Veterans Administration, loan ra-"

of

being

less

or

program.

tightening might be

to. businesses,

$5,000
valued

of most continue close to the
high
levels reached a year
ago. Condi¬
tions in these markets are

the magnitude of the defense pro¬ -such

extended

from

tios

sales

companion FHA regula¬
mortgage loans on houses :

limited to various percentages
90% for houses valued at

are

Recently there has been some
reduction in demand for
consumer
durable goods from the
excep¬
tionally large volume of Decem¬
ber and
January,
although

■

W.

As has been

March, 1950.

and

dential

the

in unprecedented volume.

was

continued.'

committees

Credit

trends.

municipalities, and

be

preceding

*

an

prevailing in consumer markets
in the period just
preceding the
regulation.
In announcing them

of

years

that

of

1949 to

in the
is

con¬

increase

X

tions,

watched closely and
frequent con¬
sultations
are
being held with
representatives of the industries

groups,

1948 together

strongly of the

sions

and

the

the

other private groups, as well
from public officials,
a
Under the terms of Regulation

part of any continuing
comprehensive anti - inflationary

restrictive than the average terms

in the

^occurred

as

1947 and

years

opinion

Act should

power

dollars

in

months, and with the rise of
$1.2 billion in the period October,

regulation alone

purchasing

with

billion

six

-for

credit

sharply

$2.3

and
as

October,

*

and municipal securi¬
by all banks increased by over
$12 billion. This increase was al¬

is

of

period

In

expansion in
The terms initially established -fected.
Even though
credit and upward price pressures
inflationary
in September, 1950, after exten¬ pressures
may
temporarily be
undoubtedly
would
have
been
sive
consultation with
trade
checked,
a
highly volatile demand
even
greater. From the end of

corporate

The

of

essential

ties

Pro¬

Board

business

1950, to the end of March
outstanding loans and holdings of

tem under the

Defense

consumer

instal¬

through March, 1951, instal¬
credit
outstanding declined

trasts
-

repayment of
consumer instalment
debt, has ef¬
fectively limited the expansion of

June,

Federal

periods

mum

outstanding

by $364 million. This decline

payment requirements and. maxi¬

toward Government Bond market.

present

1950

tion, nevertheless, Regulation W,
by establishing minimum down-

inflation, with particular emphasis on the
new loans through the Voluntary
^
Credit Restraint Program.
Indicates Board's general policy
'

consumer-and

credit

of

credit has been
stopped.

six-month

ment

inflationary forces. While

consumer

on

I appreciate this opportunity to

the

author¬

control

for restraints

r e

ment

consumer

Chairman, asserting recent record clearly
demonstrates thorough credit restraint measures are necessary,

importance of curtailment of

t

Regulation of

ity of the Defense Production Act,
has played an important
part and
as
defense spending continues to
expand should play an even more
important part in the program to

Chairman, Board of Governors, Federal Reserve System

,

>

reinstated last

Defense

a

expansion

Consumer Credit
,

appears likely that under
regulations the effective

demand

for

than

total

of

started.

about

new

in

1950

the

in

the

will

when

1,400,000

At

360,000

started

houses

same

or

units
time,

370,000

first

four

bo,

record

a

wero-

with

units,

months

of 1951, the total for the year will
months; for other durables
as
washing machines and sage of that act, further action has probably exceed the 800,000 to
been
taken
to regulate real estate
creased by over $7 billion in the •television
sets, the minimum down
850,000 units set as a target last
.construction credit. The first step
last half of 1950 and showed only
October when the terms were first
payment requirement is 25%,-and
was
the
a moderate seasonal decline in the
issuance, effective Oct. 12, announced.
the
maximum .term
allowed is
Prospects for a smaller
of
Regulation
X
first quarter of 1951.' The turn¬ also 15'months. More liberal terms
by the Board and
volume of construction this year
companion
over or rate of use of these deposit
regulations by FHA
are
permitted for furniture and
together with recent high levels
balances rose sharply.
home repairs and improvements, ,and VA covering credit extended
\
of
production of most building
in., connection with purchases of
It has become increasingly evi¬
materials
have
resulted
in
a
'The present provisions of Regu¬
1- to 2-family houses.
The next
dent during recent weeks that this lation W are more lenient in some
leveling off of building material
was
amendment of these regula¬
acceleration of inflationary respects than those in effect dur¬
prices since the first of the year.
tions as of Jan. 12, 1951, to cover
tendencies has been checked, tem¬ ing most of World War II., The
Even
so,
these
prices
average
new
multi-family units. Finally, about
20%
porarily at least. The prospects for regulation is ca 1 so substantially
higher than .in the
"another amendment to Regula¬
spring of 1950 and shortages of
getting inflation under control are less restrictive than the terms of tion
X, effective Feb. 15, covered
now better than at any time since
similar regulations now in force
some
metal
items
are
rather
loans in connection with certain
Korea. To succeed however, will in Canada, where the regulation
widely reported.
;
nonresidential

businesses

and

individuals

.

in¬

such

,

.

.

factors

which

have

combined to produce grave infla¬

tionary

dangers,

the

or

preven¬

tive and precautionary steps al¬
ready taken to safeguard the econ¬

On

omy.

behalf

therefore-

of

shall

the

Board

address

I

myself

particularly to those provisions of
the Act with .which we Jhaye been

directly
visions

concerned.
deal

mentary-

with

than

credit restrictions

pro¬

certain -supple¬

rather

the so-called

These

primary

well

as

V-loan

with

as

program

to

aid the defense effort.
.It is

important to emphasize that

exceptionally

construction.

require full and continued
all of the.credit
for

renewal

large

increase

taken place up to the present time

are

still to

of defense activities

be felt.

While expen¬

ditures for defense purposes have

doubled since last

summer

yet

as

they account for only about 10%
of total output. Moreover, they
have

thus, far

been

growing government
no

new

Federal

been

needed.

lated

activities

met

out

revenues

of

and

borrowing

has

up

Pro¬

rise

sharply and

ab much

as

within

year.

a

scheduled

may

20%

of

This

to

account for
total

output

is the

over¬

riding consideration for national
stabilization policy. If inflationary
trends are to be held in check,

public

policy

will

need

to

limit

private-spending, especially such
spending as is financed by bor¬
rowing or by the use of past sav¬
ings. This is

a

time for saving, not

spending.

have

we

,

Role

of

Credit

Restraint

:

Credit expansion has financed a

substantial share of the increased

the

credit is also included
of

arsenal

been

should

anti-inflation




stage

regulations

weapons.

in

developing

valuable
been

the

.

To

advice

and

sought

and

lenders,

builders,

gage
the

make

restrictions

of

a

considerable measure of success.

There
that

needs

V'-.

be

to

^extended

Continued

•

on

to

been

in their

tive
that

the

bank

credit

re¬

that

reduced/

banks have become

restric¬

more

expansion

-

of

has

definitely slack¬
ened despite acceleration of lend¬
ing to finance defense production.
Further

Denver and Rio Grande Western Railroad

lending policies, and

over-all

evidences

of

/

3%
.

credit restraint

in the markets for

seen

Equipment Trust Certificates

effects

the

of the various measures of

tary and

Equipment Trust, Series Q

,

...

;

.

mone¬

may

be

To

consumer

To be

(Philadelphia Plan)

$89,000 semi-annually from December 1, 1951 to June 1, 1966, inclusive

mature

guaranteed unconditionally as to payment of principal and dividends by endorsement
by The Denver and Rio Grande Western Railroad Company
•

credit

has

ce&sed' to

New

grow.

commitments by insurance
panies and savings banks to
chase

mortgages

have

new

securities

drawn

have

com¬

have- been

Priced

pur¬

been

duced. Plans for issuance of

had

postponed' and
to

be

yield 2.20%

to 3.05%,

according

to

maturity

some

with¬

Issuance and sale

of these Certificates are subject to authorization by the Interstate Commerce Commission.
Offering-Circular may be obtained in any state in which this announcement is circulated from only
of the undersigned and other dealers as may lawfully offer these securities in such state.

The
or

to

re¬

others,

such

revised, although

the total volume of

new

issues has

HALSEY, STUART & CO. Inc.

continued very large.
-

)

»,

.

*
^

The record of the past year has

tive
are

demonstrated

measures
an

of

effective

supplement

to

that

credit
and

R. W. PRESSPRICH &, CO.

selec¬

restraint

i

FREEMAN & COMPANY

measures
an

-

'

*

same

credit
time

are

important* line of defense for

the government securities market.

May 11, 1951

OTIS &, CO.
(incorporated)

McMASTER HUTCHINSON &. CO.

necessary

general

and at the

THE ILLINOIS COMPANY

PETERS, WRITER &CHRISTENSEN, INC.

cover

page

$2,670,000

evidences

availability of bank

has

serves

tangible

are

the

mort¬

credit adequately effective,
authority over such credit

be

.

statement--by- Chairman Martin beire
the House and Senate Banking and
urrency Committees, Washington,
May
Ml, 1951.
i*A

At

.

-every

al¬
lowed
to
lapse at this critical
moment when they are achieving

clearly
i.

in

consumer

any

However, Federal
credit, mortgages, and new capi¬
expenditures for defense and re¬ tal issues.
Consumer-" instalment
are

of

assistance has
Under the present terms of Reg¬
of the means ulation W, the highly inflationary "obtained from
using to stem the

ly unfortunate if

reflect

mainly expansion, in pri¬
vate expenditures. The full effects

now

of

duction Act. It would be extreme¬

in bank and other credit that have

of expansion

measures

use

the. Defense

in

inflationary; tide

the marked advances in prices and
the

w

19

12

The Commercial and Financial Chronicle

(2052)

first

Kansas

101%

profits

and

Sales

of

The May

The consolidated net sales
to $416,689,345, an in¬
of $23,773,899 over the sales

$392,915,44$ reported for the
preceding year. Consolidated net
earnings, after all charges includ¬
ing provision for income taxes and
minority interests, were $21,371,351, equal after preferred divi¬
dends to $6.92 per share on the
of

of

number

average

stockholders

of

Kansas

30,

deferred

crease

Stores Co., at their
annual meeting sched¬

$46,702,000, an in¬

were

of 21.6%

over

the sales of

5, will

June

on

if

if

if

Life

Aetna

has

Company

Insurance

announced

addition

for

plans

a

backlog of orders of Electric Boat
Company

new

its home office build¬

to

nual

000

feet

square

the company had
has

income

1,000,000 to 1,100,000
and

Aetna's premium

While

ployees.

from

increased

June

record

with 31 cents

1.

This

per

share

previously paid each quarter.
if

Interstate

if

.

if

$132,-

Corp., Kan¬

permitting

approved

was

approved
option plan

was

restricted stock

a

sale

of

creased

to

the shares outstanding.

cilities

are

and

the

wing to house 750
ployees is felt necessary.

em¬

overtaxed

common

the

ployees.

A

5,438

of

ceived

shares

to be

recently receiving
the

Division

order

an

Gen¬

for

The

has

re¬

$1,945,000

worth of machine tools.
if

to

are

if

orders from

Machine

Lucas

em¬

May 16 at a price of
$55.16 per share. Purchases were
limited to 10% of 1950 earnings.
up

10% of

eral Services Administration.

made available for subscrip¬

were

tion

total

if

companies

substantial

stock to its

exceeding

if

Stanley Works has again offered
shares of

not

New Britain Machine was among

if

if

amount

an

but present fa¬

3,300;

additional

Shares

Bakeries

ap¬

stock to officers and employees in

if

of

by the

were

000,000 at that time to $459,000,000
in 1950, employment has only in¬

The Empire District Electric Co.

compares

orders

of authorized common shares from

built in 1931
2,700 em¬

was

that

proximately double the" $91,260,000
reported at the year-end. At the
meeting an increase in the number

containing 698,-

building

present
when

indicated at the an¬

was

stockholders meeting

statement

ing. The new wing would contain
132,000 square feet of floor space
at a cost of about $3,500,000.
The

a

$38,402,000 reported for the same
consider increasing the authorized four months last year. Retail units
common
stock from 5,000,000 to in operation at the end of April
10,000,000 shares to effect a two- were 265 this year compared with
held

be

to

$30,997,132.

were

holders

1951

Department
uled

Payment will be made at

decrease of 2.1% directors have declared a dividend
from sales of $11,117,000 reported
of 35 cents per share on the com¬
for the same month in 1950. Sales
mon
stock, payable June 15 to
for the four months ended April

May

The

Auto

Western
City,

of

Co.,

$10,883,000,

period.

The

sales

Supply

the fis¬

This compares with
net in the previous year of $18,092,371 or $5.79 per share.
cal

14 ap¬ terest.

May

and

interest,

a

April

common

shares outstanding during

on

and

Connecticut Brevities

1, 1975, of The
Co. at

Southern Ry.

proposal to increase the The New York Trust Co., corpo¬
authorized preference stock from rate trustee, in New York City.
231,742 to 750,000 and the author¬
if
if
if
ized common stock from 2,500,000
: Anheuser-Busch, Inc., St.-Louis,
to 3,000,000 shares. Part of the in¬
for the quarter ended March 31,
creased shares will be used for the
1951 reported net income of $2,~
acquisition of the assets of Do¬
609,280, equal to 58 cents per
mestic Finance Corp., which con¬
share, as compared with $2,382,trolling interest was recently ac¬
673, or 53 cents per share for the
quired by American Investment same
period of last year. Net sales
Co. of Illinois.
totaled
$37,041,338,
as
against
*
#
41
proved

amounted
crease

stockholders

The

ended Jan. 31, 1951 were the
highest in the company's history,
Morton
J.
May,
President, re¬
year

ported.

City

$163,000
pared with $4,186,228, while gross of first mortgage 20-year 3%%
volume was $34,762,234 as against bonds, series B, due June 1, 1968
$25,188,824 for the 1950 period. of the same road at 101% and in¬

Department Stores Co. (St. Louis)
and its subsidiaries in the fiscal

Thursday, May 17, 1951

.

mortgage 30-year -4% bonds,

series A, due Oct.

Missouri Brevities

.

.

New

offered

share

Pulp

Co.,

of

has

Board

&

stockholders

Brothers

paid for by week¬

ly or monthly payroll deductions
through May 31, 1952.

if

if

Haven

of

Bartgis

subsidiary,

a

for

common

each

one

three

sas
shares of Bartgis. The offer will
City, reported sales for the
expire June 29. Through the ex¬
if
if
if
aggregate 267 a year before, while whole¬ 16 weeks ended April 21, 1951 of
sale accounts were 2,579 against $20,304,502, an increase of $3,343,change agent, First National Bank
par value of the additional shares
The proposed sale of the Union
& Trust Co., New Haven, share¬
535 over the same period in 1950.
will be charged against additional 2,480 at April 30, 1950.
Bleachery
Division,
Greenville,
holders will be able to dispose of
Net income was $685,933, equal to
if
if
if
paid-in capital and added to com¬
South Carolina, to Concord Tex¬
fractional shares or complete pur¬
94 cents per share on the common
mon stock capital.
The stockhold¬
tile Company has not been con¬
The St. Louis Public Service Co.

for-one

The

split-up.

chase of full shares of New Haven

stock, as against $700,508, or 96 summated
also vote on a proposed
has been authorized by the Mis¬
by Aspinook Corp. It is
option plan for executives souri P. S. Commission to borrow cents per share a year ago.
possible that the plant may be sold
if
if
if
covering a maximum of 200,000
to others who had previously been
approximately $2,000,000 from the
•shares
of
the
present common Mutual Life Insurance Co. of New
McQuay-Norris
Mfg.
Co., St. interested in purchasing the prop¬
stock or 400,000 shares of the split
erties. In recent months Aspinook
York, and to use the proceeds Louis, for the first quarter of 1951
stock.
'
'
•
P
thereof to help finance the pur¬ reported
net earnings after the has sold its Hampton Print Works
reserves
and
normal
tax and its Pacific Print Works.
chase of 100 new buses costing usual
The directors of Missouri-Kanif
if
if
about $2,200,000.
The borrowing provisions of $373,770, compared
sas-Texas RR. Co. on May 11 au¬
A special meeting of stockhold¬
is
to
be evidenced
by a 3%% to $9,920 in the same period of
thorized the payment of one cou¬
This was equal after pre¬ ers of Bigelow-Sanford Carpet Co.
note which will mature in quar¬ 1950.
pon of the adjustment mortgage
terly instalments over a 10-year ferred dividend requirements to has been called for June 18 to
bonds, according to R. J. Morfa,
per
common
share
on
the vote on a proposed consolidation
period, commencing Dec. 1, 1951. $1
Chairman of the Board. This cou¬
355,939 shares outstanding as of with Bristol Mills, Inc., a whollyif
pon will become due and payable
March 31, 1951, as compared with owned subsidiary, which operates
Kansas City Power & Light Co.
on
June 1, 1951, and is No. 52,
a
deficit of two cents per - share a woolen yarn spinning mill at
dated Oct. 1, 1948.
D. V. Fraser, has applied to the Missouri P. S. for the three months ended March Bristol, Va.
and
the
Federal
;
if
if
*
President of the road, pointed out Commission
31, 1950. Sales for the 1951 quar¬
that gross revenues for the first Power. Commission for authority
Bridgeport Brass announced at
ter amounted to $5)996,288, against
three months
of 1951, increased to acquire control of Eastern Kan¬
$3,433,970. A. J. Mummert, Presi¬ the annual stockholders meeting
$2,957,000 or 17%, while net in¬ sas Utilities, Inc., of Fort Scott,
dent, stated: "We do not believe that several substantial govern¬
Kansas.
come showed an increase of $335,the trend indicated by the first ment contracts had been received
if
if
if
000 or approximately 37%.
"At
and that as a result defense orders
quarter
operations can
be
ex¬
Dempsey-Tegeler
&
Co.,
St.
the same time," Mr. Fraser said,
amounted to over 20% of the total
pected to continue. There are a
"there is a leveling off in carload Louis, are offering $800,000 first
At the meeting stock¬
number
of
factors
which
could business.
traffic due to a slowing up
of mortgage serial real estate bonds
holders approved a plan granting
will

ers

Pulp & Board at

stock

share.

rate of $21 per

a

The purpose of the offer is

to. obtain 100.%. stock control of
Bartgis and for working capital.
if

if

if

.

affect

movement of consumer

goods pri¬

marily because of full inventories,
and

because

from

civilian

tion.

It

is

Paul

De

(owned

Hospital,

Louis

St.

operated

and

the

by

change-over Daughters of Charity of St. Vin¬
cent De Paul). The bonds, priced

of

the

to

military produc¬

expected

of

the in¬

that

at

100

and

accrued

interest,

will

our

sales

volume

*

if

Kansas

reported

*

•'

City Public

'

'

('; ;•

Service

Co.

net loss of $37,039 for

a

the quarter ended March 31, 1951,

will resume with bear interest at the rates of 2%'%, as
against a loss of $138,943 in the
and 3% and will mature
the stepped-up defense require¬ 2%%
similar period of last year. Gross
ments."
semi-annually from Oct. 15, 1951
revenues
were
$2,952,536, com¬
#
*
*
to and including April 15, 1961.
'
••'
pared with $3,025,938.
creasing

trend

ceived

Company

certificate

a

of

has

re¬

necessity

permitting it to amortize within
60

months'

$1,645,098

period
be

to

facilities

to

80%

a

of

the

expended

on

produce

antifriction

bearings.

R.

i

(Special to The Financial Chronicle)

CHICAGO, 111.—Robert R. Har¬
has

mon

become

associated

with

Eastman, Dillon & Co., 135 South
La Salle Street. He was formerly

and

profit."
if

Torrington

options to 35 officers and key em¬ with Rodman & Linn and prior
ployees to purchase 45,000 shares thereto was for many years with
of stock at a price of 15% a share Shields & Company, both in Chi¬
during a five-year period begin¬ cago and Texas.
ning May 1, 1951.
if

Electric

if

if

Stockholders

D. W. Claus in Fla.

Derby

of

Gas

&

(Special to The Financial Chronicle)

have approved an
authorized num¬

Corp.

W.
Victor D.
sis
.Js
sis
Strivings & Co. in Florida. Mr.
Illinois, St, j Louis, has announced
000 to 400,000. It was stated that
Trans World Airlines, Inc., St.
Claus has been with the firqi for
Kenneth A. Spencer, President
net income after income and ex¬
there were no present plans for
Louis,
for
the
quarter
ended
some time and was formerly„manof Spencer Chemical Co., Kansas
issuance of the additional stock.
cess--profits taxes for the first March 31, 1951, reported a net
City, on May 7 announced that Previously the company had an¬ ager of the Utica, N. Y. office.
quarter of 1951 of $1,013,311, as profit of
$150,068, equal to 6 cents effective
May 11, 1951 the voting nounced that its plans for con¬
compared with $1,054,338 earned per share on the
outstanding com¬
trust would be terminated.
One struction
in the first quarter of 1950. This
and for conversion to
mon stock.
This
.

y

.

■•• •

-

American

Investment

Co.

of

if

if

if

increase

of

ber

in

CLERMONT,

the

shares from

common

Claus

300,-

is

Fla.—DeVere

representing

.

compares

is equivalent to 50 cents per share
on

the

common

stock

compared

as

to 52 cents per share for the first
three
come

months

from

quarter

of

Gross

operations

ended

amounted

1950.

to

for

March

31,

$5,179,525

as

deficit

period
were

in¬

of

a

com¬

*

demption

on

revenues

as

f

There have

*

a

share of
sued in

at

June

4

for

re¬

$406,000

of

Spinning

sis

National

in

the first

-

diture

1951 and
be

taxes,

of

last year.

months

of

$85,917,

the

Co.
1951

before
with

same

a

period

Because of losses in

re¬

Electrolux

cent years,

Delhi Oil

efit

from

the
tax

company

bank

TIFFT BROTHERS
Established,

February.

The loans are payable
-

York

New

York Curb Exchange

& Boston

Stock Exchanges

(Associate)

Hartford 4

Tel. 7-3191

if

if

New

9 Lewis St.

31, 1951.
if

1907

Members

2, 1951, and an additional $3,750,000 borrowed during January and

will ben¬

carry-back credits.

increased
loans from

has

$750,000 to $4,500,000 through re¬
newal of the $750,000 due on Jan.

Dec.

Harshaw Chemical

*

Corp.

short-term

its

Connecticut Securities

stock.

if

*

Mining

Hartford and

1952, which was expected
by sale of deben¬

financed

tures and common

compared

loss of $41,626 for

involve expen¬
$1,000,000 during

about

of

sis

Dives

three

net

a

City.
if

Shenandoah

income

Petroleum Heat & Power

First

PRIMARY MARKETS IN

natural gas would

to

V

called

The

Bank of Kansas

*

been

stock will be is¬

exchange for each voting

share

trust

earned

.Berkshire Fine

common

same

against $21,earlier.

year

the

1951

Total

a year ago.

$29,773,281,

235,162

with

$1,846,704 for the

New York: BArday 7-3542
Bell Teletype HF 365

A

in

increase

substantial

the

Tennessee Gas Transmission
Texas

■We maintain

Eastern Transmission

primary markets in:

MEMBERS

Rockwell Mfg.

MIDWEST STOCK EXCHANGE

CONNECTICUT

SECURITIES

Southern Union Gas
CONNECTICUT

Southwest

Gas

Producing

LIGHT

HARTFORD

Bought

—

Sold

—

Quoted

Stix & Go.

SCHERCK, IICHTER COMPANY
Landreth
Bell

Teletype

SL 456




*

509 OLIVE

STREET

Garfield 0225
L. D. 123

St. Louis l.Mo.

POWER

UNITED

•

NEW -HAVEN

•

ELECTRIC

LIGHT

-

on

these

and

other

ILLUMINATING
GAS

HARTFORD

Descriptive memoranda available

on

LIGHT

GAS

request

Connecticut companies.

CHAS. W. SCRANTON & CO.
MEMBERS

Building

St. Louis 2, Mo.

,

&

POWER

CONNECTICUT

NEW

NEW

HAVEN

New York: REctor 2-9377

YORK

STOCK

EXCHANGE

Telephone 6-0171
Teletype: NH 194

Hartford 7-2669

Volume 173

Number 5012

The Commercial and Financial Chronicle

...

dustry.

A

Tight Electric Power
Situation in Prospect!

what

Administrator, Defense

Electric

Power

In

Administration,

alyze the

programs

those

sure

needs

ade¬

an

power

ects

now

with

program

the

expect that load growth
three

next

necessary ma¬

proximately

terials, and to

double normal

provide

in¬

per

load

over

will be

years

12%

year

ap¬

—

or

growth.

Even with this power

centives where

expansion

needed.
Our first

as

responsibility

stallations

is to tailor

By 1953, the general picture will
be improved,
and minimum re¬

our

program to fit

the

over-all

defense

C.

unforeseen

McManus

B.

Mr.

gram.

should

serves

pro¬

can,

made

are

as

schedule.

on

be

available

unless

loads

develop.

Loads

well

you

know,

develop

the

to

President

en¬

titled "Building America's Might"
stated:
"At
the
peak of World
War II, 45%

production

went for

fense. The
and

of the gross national
national

proportion is

by the

end

about 15%.

As

of

we

now

de¬

ply.
No.

be

foresee it,

now

will be

8%,

will

1951

the fact that certain regions

scure

particularly in short sup¬
The Pacific Northwest is the

1

not be

substantially improved

the

there

national

as

It

economy,

rounded

Mr.

that

further

states:

"With

the

fullest degree of drive and
unity, we can do this job by 1953.
By that date, our readiness to en¬
ter upon

total mobilization should

be

sufficient; and production, in
addition to meeting current mili¬
tary

needs,

should

support

a

civilian economy at or above pre-

Korean levels."
It

is the

pliers'.of

job of the
this

major

in. This

power

country

to

sup¬

imple-

which
be

by

we

-other

available.

By

conditions

1953,
in

have

expansion

try

analyzed
of

program

it is

that

in

we

the

steel

We

load

which

have

this

coun¬

tion

to

total

know

now

now

requirements

them.

At

want

to

emphasize

most

of

this

this

to

thousand

the

planning stage. Our big responsi¬
bility is to make sure that the
plans become realities and that
the

equipment goes in

sched¬

on

ule.

the power needs of this
country, is
to tell you that we now

expect to

have by the end of
1951, the same
total load in this
country as we

expected

By

we

1953,

would have by

expect to
kilowatts more

1953.

have

we

12

in
total
load in the United States than we

expected

in

our

planning

before

Korea.

1948,

'49,

the

and

'50,

we

allotment

for

of

of

each

these

minor

for
on

require¬

self-administer¬

a

as are copper

is

and alumi¬

provided

now are

working

been

estab¬

until

curities

and

As

tariff is

the

in

World War II.

that

it

will

time.

be

We

material

available to

do

not

now

to

As

Extension

of

M-50

other military equipment
of

supplies

over

$26

in

billion.

normal

As

major
under

numbers of

room

izing in these activities
We

of

time.

three

does

it sets

and

by appearing
industry groups.

conclusion, I want again to
attention to the urgent
necessity for keeping the power
programs on schedule.
We are in¬

is

critical

major

up

our

business.

under

All

DEPA's

supervision, which

means

of

direct

that

you

the

greatest

expansion

history of our business. It
that will bring many

task

a

problems and will, I pre¬

at times, stagger all of us,
a job that must be done if

sume,

but it is
the

for

in

in the

are

is

your

volved

co¬

materials; makes special

this

before various

In

provisions, and provides for
inventory controls which are de¬
signed

informing the industry

activities

our

call

excellent

in¬

electric

generating
capability in this country by ap¬
proximately 17V2
million
kilo¬

needs

power

DEPA

of

this

country

You may be sure

be met.

to

that

will

do its

only be able to
part if it gets from .you and

from

the

of

rest

the

complete and unselfish'

/ industry
support.";/

requested

because

that

we can

do the

that

way

DEPA

is

dedicated

is

the

over¬

This advertisement is neither

The

to

the

job

an offer to set! nor a solicitation of
offers to buy
offering is made only by the Offering Circular.

any

of these securities.

,

'

NEW ISSUE

^,

May 14. 1951

of keeping the power program, as

planned,
close

on

schedule. This

attention

to

means

material

1,000,000 Shares

re¬

quirements.
Heart

of

Power

Program

The heart of the power program
is the production of major power

The National

units,
the turbines,
generators,
transformers, switchgear, et cetera.
The

Capital Stock

manufacturers of this equip¬

ment look to the NPA

trical

Division

Division

Engine and

and

for

the

Elec¬

assistance

Holders of the Bank's

in
at

getting
this

materials.

assistance

coming.

While

spots, such

as

Fortunately,

has

been

there

are

forth¬

trouble

boiler tubes at the

minute,

nevertheless, the equip¬
ment program is
generally pro¬
ceeding on a satisfactory basis.

a

as

it will

substantial

the

sequence.

viewing

Order

are

to

subscribe

June 4, 1951.
agreed, subject

shares of

Capital Stock

as set

to certain conditions, to purchase any
during and following the subscription period, may offer
forth in the Offering Circular. ~ •

Copies of the Offering Circular may be obtainedfrom any, of the several underonly in States in which such underwriters are qualified to act as dealers
Offering Circular may legally be distributed.

writers

in securities and in which the

program

amount

Boards

being offered the right

unsubscribed shares and, both

equip¬

be necessary

We

on

Daylight Saving Time, on
The several Underwriters have

of

to
co¬

The First Boston

ordinating in order to bring the
equipment through on the proper
time

are

shares of Capital
May 8, 1951. Subscription Warrants will expire at 3:00 P. M.,

Eastern

ment divisions in NPA. This is im¬

because

outstanding Capital Stock

$40 per share for the above shares at the rate of one share for each 6.2

Stock held of record

We have excellent cooperation be¬
tween DEPA and these two

develops,

City Bank of New York

now

for

re¬

this

Morgan Stanley & Co.

Kuhn, Loeb & Co.

Dorainick & Dominick

Goldman, Sachs & Co.

Corporation

-

BIyth & Co., Inc.

—

—

—-

Harrimanjjhpley & Co.

purpose.
*An

the

address

American

Convention,
7,

by

Mr.

Public

McManus

Power

Chattanooga,

1951.




before

Association

Tenn.,

May

that it

by various news
close contact with the
trade press,
direct contact with
more than 3,000 electric suppliers

business.

of

are

so

formation to your regional groups
as

DEPA has the responsibility of
getting critical materials for di¬
rect

use

by the electric power in¬

our

releases,

of

means

on

the procedures
handling priority assistance on

for

the

such things as
MRO
appeals

numbers and

conscious of the special
inventory problems of

which

things:

facilities

and

all

result

a

these people, and 1 want to urge
all of you here to furnish the in¬

guns and

alumi¬

operation with NPA, we have ob¬
tained
Electric
Utilities'
Order

the

and

departments

expediting electric utility
orders, etc. I will be glad to give
you
the
names
and
telephone

Priority Program

be

recommending

various

M-50,

we

power

know

President's Special Mes¬

Two-Year

projects,

stations.
To help in
give expediting as¬
after the purchaser has

area,

the

us.

Congress

have

handling

Iiif addition, we, in DEPA, have

Outlook for Materials

Commis¬

Navy

will be easy for you to contact us.

been very
MRO and

We expect

the

tial to the construction of electric

equally effective

allotments will

copper,

Exchange

Army,

various department heads special¬

exhausted

This plan worked

July 1.

for

the

other branches of the government.
We

getting the equipment

know, the CMP

you

well

amount

sion,

the

Se¬

motors,
coal-handling
equipment, etc., which are essen¬

has placed orders for planes, tanks,

power

unless

for¬

from

us

Commission,

pumps,

gions of this country. We are re¬
ceiving excellent cooperation from

various

not then from

to

come

Power

this

on our ma¬

have

Federal

generating

on

requirements for the third

on

the

who

will

sistance

tive

sage

eral and

In¬

and steel, do not provide as¬
sistance on such things as fans,

plan is scheduled to become effec¬

this

these

utilities, .11 from municipal, Fed¬
REA, and we have people

de¬

btates.
sources

requirements

the basis of essenti¬

on

quarter.

what

from

and

num

projects has been

Assistance

We

United

pro¬

new

World War II.

Our staff includes representatives

The program which I have de¬
scribed to you on major equip¬
ment and on the utilities' direct

90

individual-request basis.

terial

on

industry.

from all branches of the industry.
We have 24 people from private

removed.

This is 91% of our needs.

Steel

num.

our

of War Utilities in

sup¬

not be felt for the most part

eign sources,

period

same

the

after 1951 and

May and for June.

an

tons

ments is not

an

the

in

creases

80%

were

posits

program

do

Power
In

their essenti¬

possible, opening

MRO

the

than

more

where

"Since June 1950, the government

portant

Proposed Increase in Electric

creased

ma¬

Defense Production Act, he stated:

in

Turbine

The quickest way to explain the
impact of the defense program on

million

in

for major

ing basis

available

soon be

general basis for

any

project

t

to

We asked for 98 thousand

months.

t n a

we

date,

in

is

sec¬

re¬

lished

point, I

that

program

as

were

requirements for the

than

In the

get our power supply and
information from the coor¬

dinators

with

quarter of 1951

ality.

approval will
a

this time have

believe

to

To carry out DEPA's responsi¬
in bilities, we have built a compact,
Current-plans for the well-trained
organization.
We
steel industry call for capacity ol
have had the assistance of people
117
million tons by early 1953.
who had experience in the Office

ac¬

being approved

are

received

Southeast

Region will be improved.

power

planned through
'53, and it is our opinion that the
planning has been good with rela¬
as

will

19o2, will add roughiy 60%
the primary capacity existing

not at

do

reason

is

of

expect

we

the

only

today

from

areas

all job required of us.

DEPA

that

relief

no

assistance

assume

port

you

un¬

hydro

means

probably be

ment' tliat program. I want to re¬

to

will

through '53. The Southeast Region

superimposed on a very substan¬
tial civilian economy.
In his report to the
President,
Wilson

the

come

will

condition

will also be very tight. However,
it has the advantage of being sur¬

been

defense

a

of

some

projects

this

de¬

has

of

one

is

that

"guns and but¬

program

scribed
ter."

production."

expec¬

is

til,

gross

The

area.

tation

the defense program, at its height,
will not require more than'20% of
This

shortage

basis.
being used

75% basis and

a

tons of steel for
We

We

The aluminum in¬

undergoing an expan¬
sion program which,
by the end

80%

requirements

accordance

approved

report

dustry

ality.

These general statements about
the power supply situation ob¬

his

the

on

products

in 1950.

Electric

June, 1950.

is

greater

TV A

The

the

and

this type for urgent
projects in the Pacific Northwest.

Fortunately, expansions

under way.

are

pounds of copper, and for the expansion of copper
we
got 92 million pounds, which
ply are directed at boosting
is 85% of our needs. Minor proj¬
duction in foreign countries

Our

assistance.
Plant

assistance of

difficult.

critical

at the peak of World War II. Plans

second

of

Shawnee

chew

to

of the

more

This is 22 million tons

in

type

time, we
approval.

essential needs for the power pro¬

and

more

111 million

Steel

build

begins

program

present

very urgent situations,
been able to obtain this

have

we

the

as

the

materials, the job of getting tnt

than they were in the
period in 1950. We asked for

generating plants to supply them.

can

tighter

production."

obvious that

At

do not have this type of
In certain

of them will be

more

essential

same

jor

parts.

will

project;

a

had priority
the component

you

assistance for all of

obvious

had what

we

once

gram will become more and more

on an
allotment is

copper

faster

we

is

materials

ond quarter

Charles E. Wilson, Director of the

than

to

it

least,

that

approved,

was

"For the

II,

"project approvav"

as

meant

approve

to

only slightly greater for the

Office of Defense

Mobilization, in

And the Pres¬

over

known

This

major proj¬

able

up

result,

a

supply aluminum conductor

use

In World War
was

Energy Inc. Joppa Plant were
given project priorities.
In addi¬
tion, we have equipped priority

As

during the second
Minor requirements are

our

and

defense

cessories.

ect

planned, the power
supply situation will generally be
tight in 1951 and '52 even if in¬
program,

been

at

year

controls

I think it is

This

backed up by a set-

was

aluminum.

being supplied
to

quarter.

needs.

our

conductor

Our

coun¬

second

of

requiring deliveries of alumi¬

Part of

kilowatts.

try has been growing at a rate of
6% a year for several years. We

implement the

next

million pounds

of the essential

num

as

the

91%

of

most

program,

The electrical load of this

to

program,

for

was

have

we

now

June, 1952."

aluminum, and after consider¬ as more
negotiation, we got 49 million diverted

quarter.

total of 27 million

quate power

end of

have to become tighter and

aside

schedule.

on

Furthermore,

We asked for 53 Vz

allotment

power com¬

delivered.

stand your problems.

$58 billion more in orders
have yet to be placed before the

con¬

found that during the
of 1951, our indus¬

we

pounds

planned,
contemplates in¬
creasing the electric generating
will capability in '51, '52 and '53 by a

be cared for

aluminum

that

This

power needs of the coun¬

try to make
by

electric

The

goods

deaLwith, people who under¬

can

over

Of

case

small portion of these
been filled and the

a

have

oraers

second

try would need 50% more than it
in the same period in 1950.

able

watts.

the

ident further stated that:

of

Our job in the Defense Electric
Power Administration is to an¬

yet, only

aluminum,

on

for

used

describing impact of defense program on power needs,
utility executive and head of Defense Electric Power
Administration, predicts by 1953 electric generating capacity
will be increased by 27 million kilowatts.
Says, despite this
doubling of normal growth, power situation will be tight, par¬
ticularly in Pacific Northwest. Finds problem is obtaining
panies cooperate in keeping expansion

steel

second quarter

veteran

urges

the

ductor,

After

equipment, and

have done

and

quarter of 1951.

Department of the Interior

materials and major

I want to tell you briefly

we

copper

By C. B. McMANUS*

13

(2053)

Lazard Freres & Co.

Lehman Brothers

The Commercial and Financial Chronicle

cr:i)

14

*

SPLAWN*

By WALTER M. W.

convinced

Commission

Chairman, Interstate Commerce

and

traffic

;

securities are still

.*

concludes, despite adversities, railroad

for

western

Europe

establish

colonies

mated.

disembarked

there

seaboard

from

settlers

to

.

the Atlantic

on

it

were,

esti¬

is

about

and

Rails

territory. Then came the

new

"*

•

y """

t

'

Subjected

to

10 years the
subjected to
When " submarines

interfered

never

Treasury bonds be pegged at fixed

been

tests.

severe

Congress has

with

Federal Reserve and, therefore, there

•

past

the
have

railroads

Tests

Severe

that

.

'I

'

f

'

•

discussing functions of Treasury Department and the

Federal Reserve System, prominent Texas banker

;

previous years.f ' *

unsettled

of the traffic to open up

After

long time would not
in

a

During
first

the

By J. H. FROST*

Chairman, Frost National Bank, Sair Antonio, Texas
*

be much more than it had been

regarded highly by investors.
When

of

Many

railway reorganizations were
made
on
the
assumption
that
the

supplied by investors, savings banks, and government. Cites
severe tests of railroads under growing competitive conditions,
and

railroads

meet.

to

'"

t

.

Treasury, the Federal
Reserve, and a Stable Currency

more

was

the

than

able

be

would

Splawn delves into history of U. S. rail transportation
points out methods of financing in which capital was

Mr.

there

that

competition

Thursday, May 17, 1951

.

The

banks were de¬
withdrawing from the
field. They seemed to be

liberately
railroad

.

years

the savings

ago,

Transportation and the Investor

13

association

this

before

.

to

save

our

monetary system;

of

requirement that

was no

Advocates

rate.

points out

independence
as

program

(1) gradual withdrawal of all

support for government bond market; (2) gradual reduction
destroyed the coastwise traffic or
of Federal Reserve notes secured by government bonds;
this blocked its uses, when increase
new
and growing republic.. For¬ for defense activities utilized to so
(3) abandonment of an inflation policy imposed by "Employ¬
tunately
there
were
those in large an extent the vehicles "on
ment Act of 1946," and,
finally, return to gold standard system.
western Europe who were thrifty the highways and on" the inland
and who had saved and were will¬ waterways, the railroads through
In
trying to form a correct be impossible for the Treasury
ing to lend. Generous grants of improved methods of operation judgment with regard to the gen¬ Department to bring about a cur¬
land from the Federal government and
economies
made
possible eral subject of what the respective
•

which

with

railroads in

build

to

capital

for

demand

great

.

t

one-half
lion

people in

the
r

mil¬

vast

i t

o r

ter-

now

y

known

as

United

States.

the

gists

tell

lion

some

four centuries.
That is to say,
for 400 years

the

W.

W.

M.

Splawn

tion had been up to

Their

port

no

foot

or

In

economy

these

to

contrast

tribes

or

out

any

scattered

living

under

primitive conditions, we now have
them replaced by 150 millions of
people enjoying great comfort and

guarantee

government

instances were

supplemented by the credit of the
government. Sometimes govern¬
ment aid was through the action
of a State or a municipality. In
other instances it was by the Fed¬

the saturation

would sup¬
more.
Transport was on
in small primitive canoes.

bands

to

government itself.

eral

popula¬

point.

investors .with¬

European

tive

and which in other

mil¬

for

sufficiently attrac¬

instances were

us

about

one-half

which in some

nies to offer bonds

that the popu1 a t i o n
had

been

After

and

an

which

economy

is capable of much more?
the

answers

is

portant

of the

one

capital.

and made

saved

is

those

exceptionally safe for
seeking sound investments
as

im¬

and railroad stocks came to be re¬

is

less speculative and
more'in the (Character of depend¬

Capital

the

garded

as

investor?MniiOns of depositors of

able securities which would

savings banks supply much of the

dividends

The

savings.

banks

furnish' the

ward

mained.

..

,

'*

large share of investments is

devoted to the production and dis¬

tribution of goods.

portation is
in

all

indispensable aid
production and'dis¬

an

such

tribute,n,

Modern trans¬

making

available

eco¬

nomic

goods and services any¬
where wanted and demanded. The

immigrants from western Europe
brought domestic animals. These
build

(parts,

With their
mestic

knew

animals

and

ocean

and
In

the

crude

water

rapidly
between

Alleghany

time

do¬

on

plans

oc¬

the

Moun¬
made

were

between

disclosed that

railroads

and

derdeveloped
handle

traffic

the

the next two
the

or

tation adequate

obtain

canal

capital

construction

the

for

sary

ments

it

to

encourage

roads.

When

successfully

was

prophesied that
enough land to
In

an

their
of

bound

economy

was

for

upon coast-

rwise river and canal water trans¬

port,
for

supplemented
horse

drawn

by toll roads

vehicles,

his

prophecy appeared well founded.
When
built

the

about

thought

first
125

that

railroad

years

the

ago

railroad

it

was

was

would

supplement. water, transport and
furnish gathering lines
for
the
ports. By 1850 it was apparent that
the railroad
*An

could

through routes were established in

direction. This capital con¬
sisting of billions invested largely
every

in

bonds

was -

be built ahead

of

these

banks.

ing

investors

by

Commissioner Splawn

National Association of Mutual Savings
Banks*Atlantic City, N. J., May 9, 1951.

&




the

were

savings

These highly useful bank¬

institutions,

paid,

of

savings,
fre¬
small sums, which

encouraged

quently in
were

through the in¬
interest " regularly

very

reinvested

by the banks in

good securities. It is most signifi¬
cant that the

savings banks in the

1920's turned to the railroads with

such confidence. During this same
decade government

aid

large¬
ly utilized to canalize the inland
rivers,
coast,

to

open

and

highways.

canals
aid

to

*.

By the early
address

before the 31st Annual Conference of the

in

furnished

main by American investors. Many

ducement
years.

to the traffic and

to

equipment modernized, and

now

settlers

for- 1,000

based

the

confidently

there
care

toll

Jefferson

negotiated

Louisiana Purchase he

westward

govern¬

also used

end

the defense of the
country. Under this policy the
railroads
were
rapidly
rebulit,
their

construction
President

the

neces¬

extend

credit. Public credit
to

was

State

new

greatly

for

as

they might furnish transpor¬

necessary

the

three decades." In

of railroads to the

in

To

would

amended, a policy
established of maintaining the

that

Mary¬

which

to

Transportation Act of 1920,

were

in

inadequate

likely be offered to them within

earnings

Pennsylvania,

in

were

we

.

* '

,

."

midst

the

was

along

in

1930's it

parent that there

was

the

building

*

,

ap¬

trans¬

portation available than the traffic
would

said

then

I

immediately

support." When I appeared

tem

to

tions

"What we

you:

naturally

would

be

by other means." " " T,
I further said: "If in the next

will

we

—

have

conserved

our

for the time
when the productive genius of the
American people Hvill create ton¬
nage to utilize it to its full ca¬
pacity."
In

Association

had

tions you would invest

further in
and made the-fol¬
lowing observation: "When you
are assured
that the earnings of
railroad bonds,

the railroads

quate,

stable

are

,

of millions of people

in this form of security."

the

forties

early

late
the

thirties and
savings banks

continued to withdraw from rail¬

investments. Now I am4 ad¬

way

vised

they are coming back into
the railway field and their invest¬
ments
are
rapidly approaching
$1,000,000,000.
Thirteen

"

was

the

increase in

production of goods might be rela¬

tively slow.. Owing

to ■ conditions

which

foreseen

could

not

be

this

development has been surprisingly
rapid.

how

Just

rapid

the

well

may

of

of

a

of

the

have

not

able

been

find

to

in

be illustrated by the growth

general,

mile.
If

the Cabinet," so

that it follows

naturally that he is obligated
cajry

in his

out

department

general policies which

that

speak of transportation in

of

ton

half

about

now

ton miles

miles,

we

to
the

be de¬

may

one-half

say

of

is railroad, and another

divided

among

carriers

tion of the Central Bank was part

scheme

stabilization

the

for

and the preven¬
inflation." On page 6 it/is

currency

tion of

"Monetary policy should
of political con¬
tingencies, and the surest way5to
secure
this result is to place the
stated:
be

independent

the

of

control

issue

note

in

the

by

the

amount

of

purchasing power

available, and is thus responsible

the currency
by la w."

safeguarding

for

established

standard

Page 20: "It is essential

that it's"

(the Bank's) "direction should be
as unbiased
as is humanly prac¬

Administration, after being fully
should be¬

sible.

But

under

State

informed of his views,
come

such

them

out

that

he

cannot

carry

ticable, and as continuous as pos¬

clearly, if the Bank is
control, continuity of

in

good faith without policy cannot be guaranteed with
feeling that he is being stultified, changing governments" (adminis¬
the proper course for him to fol¬ trations), "nor can freedom from
low

would

to resign

be

his post.

political bias in its administration
be assured."
Speaking of the ex¬
cessive note issues of the Central
to carry out the policies of the Bank in France from 1923 to 1926,
Administration,
he
undoubtedly, which brought about the great
would be dismissed by the Presi¬
currency depreciation, it states on
dent. Possibly for the purposes of
page 22: "Such extreme abuses of
if

does

he

continues

not

office

in

resign,

fails

and

this discussion, it will suffice for

government power are, of course,

to say that my own under¬
standing in general is that he has

only possible when a country has
ceased to
be on a
gold basis."

me

activities

of

the

departments

of

government;

to

tional funds

as

Again,

Congress may ap¬

the

to

page

35:

State

to

"The temptation
in the

intervene

affairs of the Central Bank

which

the

if

minished

the

is di¬

accommodation

the

Bank may give to

State is limited."

various

and
raise, by sale of appropriate
all
government securities, such addi¬

may

is

cases,

reorganiza¬

cided upon by the Administration
in power.
If the policies of the

normal

we

these

or

or

and
the
responsibility, with the ap¬
development of transportation in
proval of the President, of inform¬
our country since 1938. In this il¬
ing and advising Congress with
lustration I shall make use of ton;
regard to the appropriate methods
miles. As
you
know, a ton of
.of raising, through taxation, the
freight moved one mile is a ton
funds necessary to carry out the

terms

it

I,

War
of

most

establishment

the

of the United

the Treasury
Sys¬

"In

stated:

what

Reserve

World

the

after

world

the

of

of

ravages

more

in the present circumstances.

Federal

countries

a

of

but

it

ago

years

thought that the

Secretary

tral Banks in most of the civilized

of

estimate

tem

However,

j

\

form

a

by the President and is a member

will place the savings
entrusted to

you

to

in

be

and

of

ade¬

and

ment

of the hands of a bank." On page 16:
United States Secretary of t he "The Central Bank, through its
Treasury in particular.
In this discount policy and the subse¬
country the Secretary of the quent actions on credit, gold re¬
Treasury is, of course, appointed serves and note issues, controls

than

more

will

the obligations

treasuries

of railroad bonds>
asked, under what condi¬

then

correct

I

$1,000,000,000
I

position

we

introductory chapter of that

book, in discussing the establish¬
and reorganization of Cen¬

H. Frost

very extensive material outlining
the responsibility of government

of

banks

member

the

1938

this

J.

better

States

in

of the

nearly
are

railway plant

great

re¬

Then

general.

keep our railroads
in good condition, and find a way
of doing justice in the regulation
of all carriers—private and public
we

years

the

func¬

treasury de¬
partments in general, and what
are the proper functions and
re¬
sponsibilities of Central Banks in

and

few

by Kisch & Elkin, pub¬
England in 1932, is re¬
garded by economists as at least
one of the recognized authorities
on the subject. On the second page

of government

railroads, highways;

on our

of
vol4
the subject of
are,

the book

lished

of

and

There

excellent

very

Central

sponsibilities

is

particular.
many

published on
Banking, but I. think that

umes

some

are

in

course,

first

opinion
proper

need

which

moved

I

hope these quotations may in¬
to

dicate

Central

should

you

Bank

that, in general,! a
properly conceived

be regarded

not as a "de¬

partment" of government but as a

propriate above those provided by
taxation.
The Secretary of
the

public trust (nonpartisan ar d not

Treasury has no right, either ex¬
pressed Or implied, to issue any
water the intercity ton miles are
fiduciary or fiat money of any
divided about three-fifths by rail kind. * All the money he can ob¬
and two-fifths by other agencies, tain must be through the collec¬
During the past few months there tion of taxes or borrowing, either
have
been
many
complaints of or both of which must be author-,

cipally with the responsibility of
maintaining the integrity andcsol¬

water, highway, pipe line, and air,

Or, if

we

exclude

intercoastal

car

ties
was

more

that

the

ques¬

tion of Central Banks in general,
and then the Federal Reserve Sys¬

thing to do is

what

existing

support

to

1

of transport.

means

our

coastwise and

transportation

shortages

sion of

'

think

to' form-

competition for "traffic

During
our

in many ways un¬

were

strategic importance
projected or built, particu¬

larly

1938

undue

legal
that of¬

any

in

:

.

Now, let us consider the

market,

that

oieams orzu yeais
,

you

Railroads and World War I
World War I

canals of less

land, and in Ohio.

of
de¬

depression and re¬
covery, and the railroad stocks as
a satisfactory hedge against infla¬
tion during the years of over-ex¬
pansion and boom.

was

Other

and

panic

of

periods

the

canal.

most sanguine

re¬

pression, recovery and boom; in¬
regarded railroad bonds as
peculiarly attractive for the

subsequently

via

that

With the long period

to connect the Hudson River with
Great Lakes

in¬

vestors

to

boats.

reliance

craft,
they
rather
cupied the country
tains.

how

and

wagons

main

*

risks

the

against

see-saw

,

immigrants

early

}yield

the

satisfactory to

vestor, with some margin as a re¬

"know-how" and make the invest¬
ments.
A

I

in

inherent

now

Functions of Central Banks

the

and the standard of living we can prob¬
has been improved far beyond the. ably all agree

of

powers

fice.-

tion;

the traffic grew

railroad bonds came

Among

available by

far

use

upon

most

bond

government, enacted statutes reg¬
ulating the issue of securities by
transport companies. As the coun¬

and

as many

the

and

g overnment

production of goods has
outrun the increase in popula¬

not more
transportation but more things of

carriers,
to be looked

Treasury

Re-

respect to

domestic

velopment of traffic, the States,
and eventually in 1920 the Federal

sufficient to support the

supporting 300 times

the economy of the
States
has
expanded;

inadequate

try developed and

one-half mil¬

the

wastes

cident thereto,

United

of

Federal
.

the

all

the traffic, after receiverships and
reorganizations
inevitable from
over-expansion ahead of the de¬

would support only

roles

In spite of the wars serve. System
and losses in¬ should be with

them.

upon

and

ago.

well ahead of

building

investments

additional

through

successfully met the new demands

half century of promo¬

a

and

tion

v

.

What has made the dif¬
ference between an economy that
luxury.

lion

inflation through

rency

railroad compa¬

enabled the new

Anthropolo¬

and

much

needs for

more

.

;

by

discus¬

to carry the traffic currently

offered. And yet during these very
recent months when the need, for'

Continued

on

ized by Congress.

It seems to me,

facili¬

page

37'

therefore, that it would probably

representing the Administration
which happens to be in power)
and charged primarily and prin¬

address

f-r-tvce

."of.

Committee

on

by

Mr.

Frost

before

the * Economists,'

Monetary

ington, D. C., May

10,

Policy,

i951.

the

National

Wash¬

the circulating medium

exchange.
Federal

The

Now

what
"An

of

vency

of

that

are

Reserve

System

have

considered

we

the proper objectives

Central Banks in general,

and

of

cer-

*

Continued

on

page

26

Volume

173

Number 5012

.

.

The Commercial and Financial Chronicle

.

15,

(2055)

purchase and inclusion

Diversifying Securities in

the

the

secondary

maturities. In fact, I am not

part of
Such se¬

as.

reserve.

but

tain

sure

such

issues

Bank's Investment Portfolio
By FALKNER

Vice-President,

National

-

—

C. BROACH*

Bank

of

creased

Tulsa, Tulsa, Oklahoma

such

.

*

demand

decline in

Mid-western banker discusses nature and functions of invest-ment portfolio of commercial
banks, and contends that for
Lo.h secondary reserve and more
permanent investment

,

tioned

pur-

there is a very definite place for securities other than
Governments. Points out,
however, in view of high income
and excess profits
taxes, it is profitable and even

P®-©s»

to

My
tally,

subject —which,
assigned me

inciden¬

was

not of my

Other

and

was

choosing—is "Securities

U. S. Governments in
the Bank's Inman

vestment

Portfolio."
d is

deposits in the Spring,

this

for

g

I

you

just

what it is that

the

inve

•

and with

.ment portfolio

bank—why it
•^•is£at we
invest¬
Falkner C. Broach

having
)
agreed on this, maybe
rive

at

some

/.

-

we

general

,

can

ar¬

conclusions

regarding

the proper
place
of
other securities in the
portfolio.

I. In

opinion,

my

the

primary

function of the commercial bank's
investment account
and what I
—

shall

have

cable

will

say

be ^appli¬

primarily
to
commercial
distinguished from sav¬

banks

ings

to

as

banks—is to

ondary

serve

as

a

sec¬

The requirements

reserve.

of q

secondary reserve are that it
be' susceptible of
expansion and
contraction

tions in

to

the

meet

deposits and/or loan de¬

tion, that this be accomplished at
or
no
loss of principal.
In
other wprds,
the secondary re¬
serve
should serve as a
bellows,
expanding as deposits increase or
loans decrease and
contracting as
loans
increase
or
deposits ' de¬

Obviously, the first

of

securities

essen¬

qualifying

for

the secondary reserve is
liquidity
and liquidity at little or no loss
of

principal.

Considerations of in¬

should

come

dary.

be

entirely

' ;T

.

The
serve

size

of

will

be

number

of

the

secondary

factors.

primary

would

more

quired

reserves

well frozen

be

excessive
the

by

a

the

less

size

Here

exclude
are

I

re¬

pretty

and include only cor¬

respondent
to

be

which

balances.

if loan demands and
are

re¬

Probably the

reserve.

or

'

•

determined

first determinant will
of -the

secon¬
;

■

Obviously,

deposit losses

hedged by maintaining
correspondent

secondary

reserve

balances
becomes

less-important;-'but I for one, while
favoring the maintenance of ade¬
quate and

compensating balances
correspondents, do not favor

with

the maintenance of excessive bal¬
I much prefer to put these
to work for our own ac¬

ances.

funds

Thus

count.

for

the

most

part

I

look
as

upon the secondary reserve,
rdist.nguished from correspon¬

dent

bank

dium

to

balances,

take

care

loan fluctuations.

as

of

the

me¬

deposit and

This

means

that

the secondary reserve, both in size
and

composition, has to be deter¬
mined largely on the basis of the
outlook for deposits and loans.
>
For

will
for

most

remain

banks
a

investment

I

think, there

balance

available

in

securities, as
distinguished from loans and dis¬
counts, after the requirements of
,

*An

address

Northern

ference,
Auditors

May

10,

be looked

less,: separate

more

more

count.
ary

In the

upon

Toledo,
-

maturities

year

dollar^good

securities

ligor because I

if

a

point I

that

of

the
not

am

function

is

reserve

contract

in

and

to

offset

of

market

not

Formula

for

Obviously,
formulae

the

just

the

ex¬

of

de¬

tunties

other,

down

securities,

and

ments of the

requirements

reserve

be

securities

rftet

related to the

that

so

purchase in

ma-

if

only

are

pur¬

greater

rities and governments of the de-

sired

maturity.. Governments

certain maturities

certain* minimum
which these- other

in

of

unavailable

are

in these maturity-gaps,

and to fill

either

should

meet, if they
are to be
purchased in preference
to governments, can be laid down.
The first is an adequate increase

entirely through marketabil¬
ity. Tp a very considerable extent

Both

or may influence the volume
j other securities held is the
availability of both other secu-

pur-

chased for the investment account,

Nevertheless,

their

the

in

0f

ma-

be

are

involved

to

market

wiii

to

amounts

.

should

the

volume would seem more justified than if longer maturities are
purchased. Another factor which

as

what

what

in

securities

and

involved

are

risks

turity

cut-and-dried
laid

be

both

exposed

short-term other securities

.

no

can

what

be

risks

that

such

Investment

-

determi-

purchase of other securities.

Account
;

posits- and loans, it is not neces¬
sary
that the liquidity require¬

secondary

risks

a

is to

credit

chased
No

the first

of

one

balancing of the extent to which

the

only

but

be

capital

Ma-

years.

risk

a

of the

sure

ten

or

will

.

expand

to

contraction

five

to

nahts. Coupled with this should be

ob-

same

is

Thus,

greater credit risk, and while the
former generally is realized the
latter often is overlooked.

ma¬

trying to make

am

while the

for

greater

•

all

for that length of time, I
buy the five- and ten-

turity extension involves

pansion

as

be

of the

case

be

quality should be

again

stressed

should

greater em-,
placed on income,

the

and

not

risk

of

capital

overlooked

be

nored.

'

y

ig¬

nor

.,

A Place for Securities Other Than

Governments
In
and

both
the

O.,

the

more

secondary

reserve

permanent

invest¬

ment account I feel that there is

other than governments, '
w

a

definite place for securities

very

While

I have

■

v

~

the; essential ^ require¬

ments of the, securities
for the

/

qualifying

secondary reserve are,

as

stated, quality plus liquidity

at little

or

sacrifice of princi¬

no

pal, these requirements do not
clude

securities

than

other

ex¬

govr

ernments.

High grade municipals,
top credit equipment trust certif¬
icates,
and
the
obligations > of '

it is

as

ether

of

grade

have

governments.

securities

must

be

a

maturities

and' short-term

to

to

program

or

of staggered

to meet certain loan

tor—is the statement effect. There
can
be no denying that on pubUshed statements of condition the

tendency,
and
fully so> is to

volved in the purchase of any se-

and

other

than

this .should

a

government,

alities, such
Home

for

credit risk and \esser marketabil-

be

somewhat'

and

liquidity, but in
should

quality. I
part

less

be

risks

to

means

that only the

note

securities

should

either

the

or

for

for the

ment

more

account.

purposes

I

con¬

therefore

permanent investment
same classes I*have

securities

mentioned

for

the

secondary

of

other

.

j

well

dustrial

for

determine

re¬

but1 With some' extension of

tne

my

their

easiness

part

lg i

ijoned

^

credit

reserve

can

and

investment

municipals

might

the

more

account

the<

remaining portion of

Loan

Banks

Federal

and

But how about the

requirements?
securities

as

This announcement is neither,

an

place

nicjpais>
^

or

ob-

j^e portfolio of

What I

have

said

other hand there

are

On

more

304,270 Shares

f

V;

Gamble-Skogmo, Inc.

certain. Staggered
as

Common Stock

I have
<

afford

a

•

high de¬

(par value $5

per

share)

gree of

and,

liquidity through maturity,
if supplemented by short-

term

governments

affording

liquidity through marketability,
logically are entitled, in my opin¬
ion, to be included in the sec¬

Price

the

ties

and

as

A copy

•

reason

of the Prospectus

Underwriters

marketability is of

highest, about the only

for the

$8.25

per

share

reserve.

; As there is no credit risk in¬
volved in the purchase of govern¬
ments

page

offer to buy securities.

two kinds of

maturities of such issues
will

any

the

maturity—and of the two the lat¬

mentioned

solicitation of

'

as

may

may

be obtained within

any

State from such of the

regularly distribute the Prospectus within such State.

'

V

,.■

purchase of other securi¬

is

tp.obtain,a. higher yield.
High grade equipment trust cer¬

Goldman, Sachs & Co.

tificates
and
the
obligations of
various governmental instrument¬

will afford a
than that obtainable

governments

maturity;

thus

of

comparable

justifying

their

Merrill Lynch, Pierce, Fenner & Beane

Piper, Jaffray & Hopwood

ordinarily

better yield

.

May 14, 1951.

-

.

.

'

pre¬
.,/»

on

such

liquidity—liquidity through mar-;
ketability and liquidity through
ter is the

nor a

you
mu-

<

Continued

-

offering is made only by the Prospectus.

mentioned do

governments.

offer to sell

For
time

i should like to discuss with

NOT A NEW ISSUE

liquidity

Admittedly
have

I

The

enjoy markets comparable to

short-term

ondary

my

Credit

will meet the quality
requirements of the secondary re¬

not

without

the Federal Inter¬
Banks,
Federal

as

be

permanent

but

reference t0 their tax status.

0

status,

with which I

^at

to

reference

Reference Jo

Purchased both for the secondary

trying to

in

s™

without

Public ubility and
inone ;am

or

t

without

the grounds of too long maturity,
laziness

'

the investment portfolio I
ri

h°nds> hut![fo:r

inclined to rule them out

T
•

have heretofore referred to munic-

secu-

twrTVfmSSiihtpHiv'
There
undoubtedly

grade rail,

'

'

Investment Account

Becauge x wanted to consider
separatejy the place of munici-

credit
risk
or prac-

pretty

j

~

are.those who would[includehigh

account .to the

serve

rev

so far as I am concerned,
high grade municipals govern-

gIarr

limit

the

other-

•

this

list

the

Thr Place of Municipals in

really is part of

minimum;

certificates.

practical

of

The second

mental instrumental ties and

reserve

would

^

1Sa

should

rities,
to

purchased

all

*

purposes

reduces

which

purchases
more

tical

permanent invest¬
For

m

be held to

highest grade

secondary

k

u

of

most

be

case,

be

compensation.

qpirement, which

opinion

for the

should

fined

the

my

lowering

no

be

maturity

on

feel that

credit

a

governments. In this tion, hut definitely there

and

there

through

,

other" than

portion of the account greater em¬
phasis can be placed on, income

Land Banks,

serve.

greater

a

various governmental instrument¬
mediate

right-

probably
accord

compensated
ity to the item "Other Securities"
higher yield. With than to the item "Government Se¬
ttle extension of maturity a greatserve for them.
curities," and realizing this I have
er credit risk is
involved so that,
an
idea that many top managet Turnin'g noW to the more per¬ as I see
it, the yield compensa- ments hold the "Other Securities"
manent portion of the investment
tion
should
be
greater
as
the item down to an amount lower
account, as distinguished from the
maturity is extended. Just what than would be the case were this
secondary reserve, I feel that pere, the
,compensation should be is a not s0.
too, there is a place for, securities matter, for individual determinaand short-term there is a
definite place in the secondary re¬

:

tried

stress, the credit risk should be
held to o minimum, but even so
some degree
of credit risk is in-

grade

should

account

can

here

much

liquidity through maturity that is
cunty
essential, but if they are high'

second¬

emphasis

quality and liquidity with
entirely
secondary. In the more permanent

but

be

guarantee the necessary degree of

ac¬

on

phasis

necessary degree

can

high

considerations -of income
investment

the

These

Ac¬

investment

the

reserve

on




or,

permanent

and

~

not

nor

and

counts, one to serve as a secon¬
dary reserve and the other as a

alities

Comptrollers,

on

stated, about the only jusfor
their
purchase * at
obtain a higher, yield,
considerations of income

tification

two-year, maturithe theory that the credit

credit

as

account should

by Mr. Broach at the
Mid-Continental Regional Con¬
Association
of
Bank

National

1951.

liquidity to meet
Certainly excess

demands,
is it necessary that any invest¬

secondary

be

can

fluctua¬

little

tial

ties

income need not

no

i have

account

own

be carried to meet these

permanent

two

mands and, in the case of contrac¬

crease.

logically

more

.

ment accounts

earning

our

and/or deposit" needs, the choice
of liquidity
may rest only
with other secuacquired
through
rities.
A final determinant of the
maturity,
investment where greater empha*.
yield
over
governments -of size 0f the other securities acand such liquidity is an attribute in
s^s can be placed on^ income and
of "Sh6rt-term high grade securi¬ comparable maturity to justify the count—which
somewhat less on liquidity.^ ;many bankers may
"
ties other than governments about sacrifice of marketability and the
deny but which I insist is a fac; Thus I feel that the investment
credit risk.
As I
looked upon as a

—and

demands.

The

a

vestment account

is supposed to
do f of:rth e

have

to -buy. for

will

is

good margin of safety
to spare, the remainder of the in¬

t-

s

mg

^ten years. -While I Am will-

desired degree of

available

securities, and

secondary reserve.
Stated another
way, I feel that
after the requirements of the sec¬
ondary reserve have been met,

con-

sider*

in

sential for the

that

first

balance

investment

or

Liquidity and Marketability

such investments need not be lim¬
ited to the type of securities es¬

subject

with
propose
we

n

five

certain one-and

men¬

pated demands, and yielding more
than
governments,
can
be
ac¬
quired.

practically all contin¬
gencies; but for most banks there
a

have

turing at the time of the antici¬

for

remain

I

as

toe purchased to mature

can

other

met, and fully met.
I feel that the
secondary reserve should be ade¬
quate

a

ment be limited to governments

;

secondary reserve have been

will

In

ssi

c u

the

*

and

is -good

cash

holdings, other than Governments,

tax-exempt municipals.

loans

In the Spring and thus furnish the
these'

preferable

lor most banks to restrict

for

securities

.

-

sug-

quality
requirements gested to do the job.
should be even greater, for where
*.
i
V J
advantage to m6et seasonal de¬ there may be little
questioning of Factors in Purchasing Securities
posit fluctuations and/or loan de¬ a credit if the
maturity is only one
The extent to which other semands. In the case of a bank, for or two
years, it becomes a dif
curities are purchased will de¬
instance, that experiences an in¬ ferent matter if the
maturity is pend on a number of factors. As
.

(

have

I

as

that

curities may also be used to good

16

16

(2056)

1

JSL

June

11-14, 1951 (Jasper Park,
Canada)

Charles E. Wilson Hails Millionth Stockholder
Of A. T. A T.

.

tion

the millionth holder of American
Telephone & Telegraph stock, Director of Defense Mobilization
upholds "Big Business" as essential to American production,

Y

-but says nation also needs small business.
v*

belt-tightening

•

Speaking in New York City
May 16 at

the

ing

lionth

on

dinner commemorat¬

a

attainment

stockholder

of

of

the

the

t

bodies

to pay

shareholders
in

and

American

example of

an

in

part

Charles E. Wilson

"big

business."

Stockholder?"
he

a

trialist?

Wilson

Mr.

added:

fabulously -rich indus¬
A banker? A powerful

politician?* No, Mr. Brady Denton,
of Saginaw, Michigan, who with
his

But

screams

wife

owns

shares

seven

A. T. & T. stock, is an
salesman.

lives

He

house. He makes

this

plays

golf

an.

fishes

and

re¬

one

that

means

beginning to be

is

there

boys to have
It Was

>"
a;convictioh," continued

Mr.; Wilson

?'that- most" of

the

American

Investment

Banking

and

Commerce, University
Pennsylvania.,
•
;
V

June

•

people

who so virulently attack
big business have, themselves, an
interest
in
big business. Either
they have shares of stock or they
have

insurance

surance

policies—and

in¬

companies have heavy in¬

vestments

in

the

stocks

of

big

businesses. It is almost impossible

nowadays for
some

ever

anyone

not to have

financial

connection, how¬
small, with big business. Yet

these

income

an

ture.

It

who

but

like

it!

the

Communists

for freedom of speech

scream
use

security for the fu¬

or

is

to overthrow

democracy that

the

very

that free¬

assures

dom.

-

.the*, glories

of

-

America,

Stalin at the end

even

paid

war

tribute

of the last

the

to

and

produc¬

tive capacity of this
country. Per¬

haps it is the atomic bomb that
has

1951

City,

(Oklahoma

Oklahoma
western

Bankers

ing
and

Bond

Group

■

the

Ndrdic " Hills

)

deterred

aggressive
has

him

moves

already

think

an

well

tnus

Investment

Association

Spring out¬
at the Oklahoma City Golf
Country Club,

from

But

deterrent

America's

may

capacity, for

manufacturing the sinews of
The
went

Defense
to

on

American

a

May 24-25, 1951 (Dallas, Tex.)

citizen

receive
him.

of

scant

Wilson

to

serve

about the

rearmament

would

consideration
asked

the

from

American

Association Annual

self-in¬

gross

Meeting.

(2) Be content with reasonable
(3)

wages;

Understand

need

for

higher taxes and other measures
being taken to stem inflation.
(4)

Not hoard, patronize

markets,

black

buy needlessly.
(5) Do their job as well as
they
or

know how.

(6)
gram

Have
upon

faith

which

that

their

the

pro¬

govern¬




As¬

at

the

(to

Maketewah

be

preceded

cocktail

for

party

dinner

Club

Col¬

annual

Bond

Club

annua)

Bond Club of Baltimore annual

on

Bond
Field
Lake

1951

\

15,

(Chicago, 111.)

Club

Day

of

at

Chicago

annua)

Knollwood

Club

(Cincinnati, Ohio)

to

board

govern¬

Stock

&

Bond

Club

Annual Spring Outing aboard the
Delta Queen. :
-s.
......

June

„

of New Jersey An¬
Day at the Montclair

Golf Club.
June 8, 1951

Hollow

14 and

meeting

of

Stock

is

a

of

the

the

ported

recent

Asso¬

Club

(New York, N. Y.)
New

York

27th

Week,"

and

be

in

proposed

observed

governors

ob¬

America

that

the

nationally

in

future.

Field

has

111.—John

become

associated

with

David A. Noyes & Co., 208 South

Exchanges.

San Francisco
Security Traders
Association annual spring
party at
the Diablo
Country Club, Diablo,
Calif.

those

that

of

Mass.—Robert

who

you

and

Profits

the

full

up-to-date
Tax

very

are
on

the

Act, I admit
advantage of

tax

described

reduction

of the

it

due

the

to

I have

profits tax credit by
relationship of inadmissible

the

excess

admissible

all
purposes
the. relative
tax-free advantage possessed by
municipals is about as I have de¬
for

but

assets,

practical

scribed

it.

While

Federal

Banks

within

comes

be, against the substitution of
potential
capital gains subject
only under present law to a 25%
may

be of assistance

tax, you can

portfolio

your

to

manager.

Las! Gail fcr Texas

Group 8BA Convention
DALLAS, Tex.—The last call is
out for the sixteenth annual meet¬
•

profits

De¬

a

(the

tax

yield

and their wives.

net) I don't see
be justified as a good

can

for

bank subject to excess

a

against

a

I.

or

buy

prof¬

high grade gen¬

obligation
state
maturity

C.

1.00%

bond

of

yielding

tax-free.

The

B., after 77% tax, yields

only 0.46% against a comparable
maturity top grade state credit

yielding
vantage
latter.

0.95%-1.00%. The ad¬
is all in favor of the
subject

Thus for the bank

excess

profits it

Lewis

F.

serve

that

seems

to

Texas

of

man,of the Texas Group, and R.
Smith, of the Texas Bond Re¬

B.

Members

the

Convention

John

L. Canavan,

of
are

Pierce & Co., General
and Chairman of en¬
tertainment; Winton A. Jackson,
First Southwest Company, Chair¬
Rauscher,

Chairman,

man

Golf; Clarence E. Sample

for

S. Rooker, Mercantile
at
Dallas/
co-

and George

Bank

National

for

Chairmen

Chairman of

rol

Pierce

registrations and res¬
Hcmmingson,
Company of

George

ervations;

Investment

Central

Program

Texas,

C.

Co., Inc., 31 Milk Street.

of

the

Harland
& Co.,

publicity;

Rauscher,

Mayes,

Chairman

of

Car¬

Chairman;

Bennett, Dallas

Rupe

& 'Son,

Transportation;

and

Judson S.
&

Co.,

James, Judson S. James
Chairman of the Ladies

Committee.

Walter Scfasjeider With

Distributors
Walter

E.

invest¬

Group

Schneider,

Treasurer

of

Insurance

Company,

Distributors

Preferred

Group,

former
Accident

has

joined

Incorporated,

63 Wall Street, New York

City as
it was an¬
nounced by Harold X. Schreder,
who heads the company's invest¬
ment research organization.
The
company
serves
as
investment
manager
for
Group
Securities,
Inc., prominent mutual investing
a

portfolio

manager,

company.

Mr.

me

account, both secondary re¬
and the more permanent in¬

in

Schneider is widely known

insurance

circles

for his

man¬

agement work on insurance port¬
folios

over

the past

20 years.

He

ordinarily is a member of the Board of For¬
filled by other securities, includ¬ eign Missions of the Presbyterian
ing municipals, now should be Church of the' United States and
switched almost entirely to mu¬ serves on its finance committee.
vestment

affiliated with Ralph

portion

Central In¬
is Chair¬

Rodgers,

Co.

vestment

figures to
how they

1.06%

an
elaborate program has
planned for those attending

ings
been

Inter¬

2%

maturity of nine
months or less may be a good buy
for a bank not subject to excess

ment

Ralph F. Carr

now

ex¬

as

to

BOSTON,
Carr is

hardly

you

officer.

purview of my subject, may I
also suggest that in the matter
of taking capital losses charge¬
able against ordinary income tax¬
able at 47%, cr 77% as the case

.

(Special to The Financial Chronicle)

F. Carr &

of

case

almost to pre¬

as

purchase of other securities,

that

Joins

it

While

of

more

porter, is Executive Secretary.

municipals is not quite

F.

Sar¬

.

no

of normal and surtax,

profits tax

0.95%

W.

I

June 8-9-10,1951 (San Francisco,
Calif.)

govern¬

the

it is Committee

as

comparable

Day at the Sleepy La Salle Street, members of the
Country Club, Scarbo¬ iNew York and Midwest Stock

rough, N. Y.

than

in the investment portfolio

responsibility

a

top

before the place

other

than of the investment

possessed

important

important in the

so

eral

CHICAGO,

advantage

case

its tax

With David A. Noyes

gent

tax

with

(Special to The Financial Chronicle)

of

This

bentures

Angeles

tax-fr£e

V

animal."

regional gover¬

Los

1%

a

is that "there ain't

answer

Credit

"Invest

of

than

mediate

Association

to

the

servance

event

less

comes

Exchange Firms

Club

Field

Bond

May 13,

a

governors

he

Hot

While in Hot Springs, he re¬

the

1, 1951 (New Jersey)

Bond

of

is

of

obtain a fair
the
tax-free ing of the Texas Group of the In¬
yield on a municipal but rather of vestment Bankers Association to
.reducing the yield by 77%. On be held in Dallas, May 24th and
this basis a 4% taxable yield be¬ 25th. Following the business meet¬
by 47% to
comparison
with

to

visited

on

attend

ciation of

on

Cincinnati

yield

Excess

of which

Forest, 111.

June 1, 1951

profits at 77%, Thus for a bank
subject to excess profits tax it is^
not a case of reducing a taxable

technical

also

never

as

ments

65%, but this does not pre¬
taxing of such profits

Chairman

Witter

30%,

the

determination

the

securities

of

the

ANGELES, Calif.—Phelps

Exchange.

Mr.

that

are

such

on

For

ing board oi the Los Angeles Stock
Exchange and partner of the in¬

Stock

additional

*

an

Tax

profits

excess

—i.e., securities other than mu¬
nicipals and governments—by a
bank
subject to excess profits.

Trip to East

Springs, Va.,
1,

means

is

>"7 Y"-.' vestment firm of Dean Witter &
Co., is visiting in the East to meet
June 1, 1951 (Baltimore, Md.)
with members of the New York

June

Hat

which

in the

Y

of the

Tax

Profits

Excess

by municipals,

Memorial Day .outing.

outing at the Elkridge Club.

other

Profits

Excess

the

so-called

clude

LOS

bond,' all

taxed

f

Phelps Witter
Witter,

Dallas

Act

such

Beach, Fla.)

Beach Hotel.

of

Under

The

(Hollywood

Investment Bankers Association
Annual Convention at the Holly¬

out-of-towD

of
fac¬

purchase

preclude

basis, where, I ask, can a
high
grade
one-year
taxable
bond be obtained on a 4% basis?

Day outing.

25-30, 1951

and

May 30, 1951 (Dallas, Tex.)

secu¬

purchased, their matur¬

are

for

ter

1 %

Country Club

by

be

yield. While one-year high grade
municipals can be obtained on a

Y,.,

(Dallas, Tex.)

Bond

will

bond often

tors being equal.

cess

Municipal Bond Dealers Group
of Cincinnati annual spring
party

annual

the

umbus

wood

terest.

profits and

Traders

May 25, 1951 (Cincinnati, Ohio)

nual

people to:

(1) Refrain from

Dallas

nor.

for every

and

Oct. 12, 1951

Y

'

Texas Group Investment Bank¬
ers

Security

sociation Convention opens at Co¬
ronado Hotel.
v
'

then

six-point,

program

notice that complainers

hardships

war."

Mobilizer

outline

belt-tightening

I

(Coronado

Calif.)

Nov.

beyond those he

engineered.

equal

be

far

;>

Club—South-<

of

takes

big business to make
big;production. This has been one
of

22,

Okla.)

some

rities

sis qualify under the law as excess

30, 1951 (Chicago, 111.)

National

May

guests, May 24).

"It

\

to

as

taxable

clude

Bond: Traders Club'of Chicago

Sept. 30, 1951

-

such
the

ited to

'

inveigh against the

persons

very institutions that afford them

.

of

to

applicable
profits is 77%. The
over-all tax rate on profits is lim¬

summer

'

at

purchase

preference

justified, but for the bank sub¬
ject to excess profits tax the case
in favor of the municipal becomes

rate

Association

Michigan

V

outing

to

.

(Detroit, Mich.)

Country Club,'

>

47%

comparison.

alone

in

taxable

Effect

.Y'y;

Traders

:

less

bond

(Minneapolis,

Fishbite") at Gull Lake.
1951

taxable

net-after-tax

municipal bond

a

true

a

basis

fully

Seminar at Wharton School of Fi¬
nance

this

a

a

compared to the yield

municipal

-Investment Bankers Association
of

be

taxable

a

obtain

18-23, 1951 (Philadelphia,
Pa.)
V

to

yield of

should
on

.

June

golf

Washingtdpi an¬

What

Government.

S.

Today

Outing

Thus

2%

U.

the

Summer

Dinner at the Manufacturer#

May 18, 1951 (Washington, D. C.)

pf

to

aggre¬

my

On

Philadelphia

sociation annual Spring outing, at
the Country Club of Maryland.

Club

subject

surtax

and

Conclusion

opinion there is a place
in the
investment portfolio
for
securities other than those of the
In

management.
You,
as
auditors
and
comptrollers familiar with
the tax laws, can play an impor¬
tant role in these policy decisions.

try Club.

outing at the Manor CluRY

nicipals.

tax the

Traders Association

of Detroit and

Bond

is almost limited to tax-free mu¬

ity and in what amount is a mat¬

(Philadelphia, Pa.)

outing at the Plum Hollow Coun¬

nual

profits tax

bank subject to excess

the

laws

tax

$25,000

over

normal

under present tax laws the

folio;

yield of only 1.06%. For banks
subject only to normal and sur¬

15, 1951

Securities

Baltimore Security Traders As¬

both

Sleepy

at

.

"I have

earning

New

be

port¬

investment

June

June 26,

May 18, 1951 (Baltimore, Md.)

present

the

in

to

figures

tion

EVENTS

solid investment for the

a

future."

of

Twin City Security Traders As¬
sociation Annual Outing ("Opera¬

and

college education.

a

Club

meeting

22-24, 1951
Minn.)

occasionally. Did he invest
speculation
or
merely
to

says he bought the stock because
he and his. wife want their three

annual

June

COMING

mu¬

comparison is
tax-free yield and a

included

on

securities

47%.

equality Of of

some

(New York City)

Country Club, Oreland
Pa.', •'

anvil

of

case

one

limit

a

an¬
the

or

reason

one

is

other

gates

and

im¬

the

fully taxable yield.

and

of

yield

of

dabble in the market? Mr. Denton

Lake

Golf and

is

"there is

with

yield

a

For

there

other

Hollow Country Club.

of

nation

our

hunts
for

summer

the

Under

Bond

Investment

pretty price

a

decent but not

a

Club

sacrifice."

modest

a

between

15, 1951

York

and

automobile

in

Bond

Club.

Municipal

hard-hitting statement,

It

nicipals

nicipals.

to other, amount

as

normal and surtax rates for banks

June

normal

assuring thing about the chorus of

sumptuous living. He takes part
in civic and community affairs.
He

the

already

Mr. Wilson said

screams.

(Milwaukee, Wis.)

Oconomowoc

at

Country

Wilson

scarcities

but

are

perialism.

In

13.

party

felt

be

now,"

of

chorus

'

viously about quality, maturity
and •* yield
differential
applies

be

classes of securities

.,

"And what about this millionth

*Ts

flow

allies against engulfment

of

to

—

June

Milwaukee

disturbing
the spring air of Washington."

public's

>

their

for bulwarking

our

Club

equally to municipals

greatest

by the hordes of communist

corporations is
tine

from

dislocations

tenor of life

of

Yacht

by the usual pre-picnic
get together Wednesday evening,

pressures on

"Restrictions and
some

large

Bank's Investment Portfolio

exception that in the

said.

pointed out
the

months

some

Mobilization,

Bear

June 15, 1951

prices
wages—the most serious in¬

and

Defense

that

the

flationary pressures—will

of

o r

ulti¬

would

controlling

ly, the greatest

E.

Wilson,
r e c

for

Diversifying Securities in the

(St. Paul Minn.)

their best interests.

hence

and

14, 1951

White

greatest scarcities of ma¬

terials,

at

preceded

and use, are yet to come. Similar¬

Company,

D i

embarked

Convention

Twin
City Bond Club annual
picnic and Golf tournament at the

i

serve

"The

need

& Telegraph

Charles

has

mately

mil¬

Ameri¬

Telephone

can

ment

Canada

of

June

Outlines six-point

program..

Continued from page 15

Jasper Park Lodge.

In ceremony
commemorating

Thursday, May 17, 1951

...

Investment Dealers Associa¬

■

„

Example of "Big Business"

as

The Commercial and Financial Chronicle

account,

Volume 173

-

Number 5012

.

.

.

The Commercial and Financial Chronicle

£7

(2057)

!

GREAT LAKES STEEL CORP,

Detroit, Michigan. The only integrated
steel mill in the Detroit

area.

Produces

wide range

a

of carbon steel products
is
major supplier of all types of steel for

a

...

the automotive

industry.

NATIONAL STEEL PRODUCTS

CO.1
I

.

.

Located

'

Houston, Texas. Recently
f erected warehouse, built by the StraiiJ Steel Division, covers 208,425 square feet.
.•

•

products throughout Southwest.

WEIRTON STEEL

j

COMPANY

Weirton, West Virginia, and
Steubenville, Ohio. World.s largest in¬
dependent manufacturer of tin plate.
at

Producer of
tant

and

at

National Steel

encompasses

far

more

than its mighty furnaces

giant mills.

Added

to

these

barges, trucks

are

...

the iron

ore

mines and coal mines

...

the giant ore

the multitude of other physical properties it takes

to

boats,

make

THE

HANNA FURNACE CORP.

Blast furnace division located in
Buffalo,
New York.

a

National Steel achieved this
and talents of its

the nation's fifth

L"
-

b

completeness by combining the facilities and

component companies into the organisation

a

wide range

of other impor¬

products.

,

NATIONAL MINES CORP.
Coal mines and

properties in Kentucky,
Virginia and Pennsylvania. Supplies
high grade metallurgical coal for the
West

resources

that has become

largest producer of steel.

It has extended its scope

lr

large

steel

tremendous needs of National Steel.

completely integrated steel producer.

through continued expansion and ceaseless improvement.

Today, for example, National Steel

operates

lines in the world

open

...

National Steel is still

the

largest

expanding

This is National Steel...

.

.

.

the largest and fastest electrolytic

hearth furnaces in the industry. And

still developing better

ways to

complete, independent, progressive...

one

make steel.

of America's

largest and fastest growing producers of steel.

NATIONAL STEEL
GRANT BUILDING

CORPORATION
\M^J

Unit of Great Lakes Steel

AMERICA




BY

SERVING

PITTSBURGH, PA.

^AMERICAN

.

Corporation.
Plants at Ecorse, Michigan, and Terre
Haute, Indiana. Exclusive manufacturer
of world-famed Quonset buildings and
Stran-Steel nailable framing.

.STULy

SERVING

STRAN-STEEL DIVISION

IN D U S*T,R*Y

i

!

Provides, facilities for distribution of steel

Mills

Steel-making

i

in

HANNA IRON ORE COMPANY

Cleveland, Ohio. Produces ore from exten¬
sive holdings in Great Lakes region.
National Steel is also participating in the
development of new Labrador-Quebec
iron

ore

fields.

}

The Commercial and Financial Chronicle

18*

Thursday, May 17, 1951

.

.

.

(2058)
The study revealed that "with
their over 1,000 issues traded on the
New York Stock Exchange dur¬
property. However, more than 50
per cent of the home buyers ob¬ ing 1950, more than 200 issues, br
taining mortgage loans from In¬ approximately one stock in five,

has assisted borrowers in obtain¬

ing

Mutual Funds

insurance

vestors

have

insurance

RICH

By ROBERT R.

Prospectus upon request
your

Mational
research
120

from

investment dealer, or from

securities &
corporation

BROADWAY, NEW YORK 5. N. Y.

Investment

ton

systematic purchase of its shares
on
a convenient
schedule.
Under the plan an investor may
send a stipulated sum—monthly

quarterly—for
purchase of
Wellington
Fund
shares
and
charge his account for the pay¬

or

Pennsylvania Company for

The

named

and Trusts of this city,
depositary and transfer

of

quality were

conspicu¬

their presence, including
long records of un¬

by

ous

with

stocks

interrupted dividend payments^
the
analysis,
contained in the
firm's monthly publication "Bul¬
letin," observed. "Many of these
are
highly regarded by the in¬
vesting public because of their
earnings
and
dividend records
over the years.'*

...

ment.

Banking

"Of
issues

shareholders

permit

to

Plan

them by

survey

a

for the year," some of
drastic percentages.
j
the declining stocks, many

declined

provided their own
through in¬

coverage

of its lected.
by Diversified In¬
"Experience has shown that the
vestment Fund,
indicate a sub¬
service rendered in procuring such
stantially greater interest in mu¬
insurance and keeping mortgage
tual funds on the part of large in¬
vestors than many persons in the properties adequately insured at
financial
community have thus all times has been for the mutual
far
realized.
One out of every benefit of the parties concerned.
five shares of Diversified Invest¬
"As mortgage investment mana¬
ment Fund is currently held by gers we have the obligation to in¬
a
substantial
private
investor sist
upon
adequate
insurance
with more than $10,000 invested coverage upon mortgaged proper¬
in the Fund or by an institution, ties for the
period covered by the
corporation, or fiduciary.
The mortgage. To meet this obligation
OF

RESULTS

announces

inauguration of the Welling¬

the

on

companies which they se¬

surance

FUND

WELLINGTON

coverage

cites the price de¬
1950 in 24 wellknown common stocks, with un¬
broken
annual dividend records
study

The

during

clines

the plan, then in¬ survey entailed examination of we have assisted many borrowers
received from an 8,500 shareholder accounts, rep¬ in obtaining such coverage with ranging back as far as 1890. The
declines varied from 5% tor Corn
investor
in
as
many
full and resenting Diversified Investment responsible insurers.
Products Refining,
International
fractional shares of Welling m Fund's total net assets of over
"The point raised by the gov¬
22 million dollars.
V ; V.
Business
Machines
and
JohnsFund as the deposit will buy at
ernment in bringing this action is
Man ville shares to 34% for Bon
the offering price in effect on the
Large private investors in the whether
we
may
continue
to
outnumber
institutional
Ami "B" shares.
j.
day the sum is received. This ar¬ Fund
render this service
as
we
have
Of
rangement is carried out by the shareholders three to one.
done for a great many years with¬
AT
A
SPECIAL
MEETING
of
these
individual
investors,
6%
Pennsylvania Company at no ex¬
out
any
question having been
shareholdings worth more
tra charge to the investor. Appli¬ have
the Board of Directors of Sov¬
raised. We believe we have acted
cations from investors under the than $40,000 at current net asset
ereign Investors held May 15,
within
our
legal
rights.
The
George A. Bailey, former Viceplan are handled through
the value, 7% have accounts worth
present civil suit will settle the
Fund's dealers.
between $35,000 and $40,000; 15%
President, was elected as Presi¬
question."
The whole purpose of the Well¬ are in the $20,000 to $35,000 cate¬
dent of the Corporation.
Other
ington Investment Plan, accord¬ gory
and
72%
have holdings "CAN ANYBODY Make Money officers elected were Henry J.
ing to the announcement, is to worth from $10,500 to $20,000. in a Bull Market?" Price declines Kaltenthaler, Vice-President, Ed¬
facilitate the purchase of Well¬ The average holding in the latter
ward
B.
Cary,
Secretary, and
during
1950
in
many
quality,
ington Fund shares with the max¬ group is $14,302 at today's market dividend-paying stocks listed on George A. Bailey, Jr., Treasurer.
imum convenience. The only lim¬ prices.
It
is the intention of the new
the New. York (Stock
under

agent

vests each sum

BULLOCK
FUND

Prospectus from your

dealer

investment

or

CALVIN BULLOCK
Established 1-894

be

New York

One Wall Street

itation, it was stated, is that the
minimum initial investment may
no

quent investments may be no less
than $50 monthly.
However, in¬
vestors may make purchases on

ferreds

Knickerbocker
for the

Diversification, Supervision and
Safe-keeping of Investments
Prospectus

may

be obtained from

your investment dealer describing
the company and its shares, includ¬

ing price and terms of offering.
KNICKERBOCKER SHARES

INC.

20 Exchange Place

VJ» H

HW

price

of

"Management

Funds
Certificates of Participation in

INVESTMENT FUNDS

as

Money,"

is

a

earnings,

average

chart

25-year

of

dividends,

and market

price of the 30 stocks

comprising

a

leading market in¬

dex.

dividends

strikingly

reveals

chart

that while

for some 20 years the

between

earnings,

prices

remained

and

fairly constant, since

the market

set-back in 1946 stock

prices have

responded only sluggishly to
extraordinary

increases

was

not a

the

in 'both

during which large in¬
and institutions haver ex¬

vestors

with

IN CONNECTION

Federal

a

Bull
study

firm

of

its

broaden

its shares

and

scope

registered.

now

are

MASSACHUSETTS Life Fund re¬

ac¬

ports total net assets

made by the

of $13,420,873

Bul¬

Calvin

lock.
MMHMMHNMMMMMMMHMMMHMMHMUnHMnraMWMBMM
■a—■—

■mBMMRatU'H
nwmwmwmmwmmm

■IMiin
■RNIM

■aaamiMw

IWIIIV

i

■■■■■■Ij
■■■■■■■

fElUNCTON
PilRMMB
Wjmnmmmmw

A Prospectus

the

your

ing,

from

prospectus

investment

describing the Com*

and its

pany

shares, including

price and terms of offer¬
is

available

upon

request.

dealer

or

-■ —

-

filed in Minneapolis,

action

court

F.

PHILADELPHIA

EBERSTADT & CO, INC.
39

April 26, Earl E. Crabb, chair¬
and president of Investors
Diversified Services, Inc., of Min¬

i\[ew York City

Broadway

on

man

following

the

issued

statement:

in

filed

action

civil

"The

Court today has no con¬

Federal

issued

nection with the securities

Di¬
its
affiliated companies. The action
deals solely with certain technical
questions relating to mortgage in¬
surance
services, made available
Services,

versified

to

and

Inc.,

borrow

who

those

our

Investors has
insurance department with

"For .many years,
an

licensed

able

r*

'

*

Shares, Inc.

mm

Prospectus upon request

LORD, ABBETT & CO.

on

money

property ; from
Mortgage Loan Division.

improved

had

American Business

f(v'
1

by Investors

distributed

and

Lord, Abbett & Co.
Chicago

New York

—

Atlanta

Los

Angeles

agents representing reli¬

and

financially responsible
companies, and

insurance

hazard

earnings and dividends.
DOWJONIS

Market,"

a
a

the
Fund
distribute
in 20 states where they
that

management

development

primarliy in the

occurred

DOW-JONES 30 INDUSTRIAL STOCKS

IARNIN9S t PER
DIVIDENDS
SHARE

'

investing their capital

Exchange—
substantial

accounts

last year

pub¬ neapolis,

Securities.

Group

by

relationship

Custodian

value for
good-grade

stocks?" asks the current

common

The

eystone

investment

2, Pa.

OTHER service or com¬

present

the

.

pre-

a

modity offers so much

Featured

K-t* «"»■

booklets,
Future", ^ and

new

Philadelphia

"WHAT

lished

t

Money in
cording to

stocks,

as common

not expect such

that this
which

Start

to

Street,

its

iilllUVvN

in bonds and

ex¬

fund

Wellington In¬
pressed
increased
interest : in
vestment Plan," give full details mutual
funds.
Many of these
on the Fund's new plan to
facili¬ shareholders have been with the
tate systematic investment on a
Fund for a period of time; others
convenient and flexible basis.
have built their investments
to
Booklets may be obtained from their
present proportions by re¬
Wellington
Fund, 1518 Walnut peated purchases over the years."
"How

a

of total assets.

•

•

Publication of
".Your 4 (Financial

ft Fund
—

cash.

be

represent so great a proportion
The records show

to

elect to take dis¬
stock instead of

might

conservative

well

as

did

we

may
tributions
in

a
invests

which

also provides that ap¬

plicants

in

pected

penalty.
The plan

face of

the

substantial in¬ premise that "Anybody Can Make

many

holdings

dividual

and may terminate

at any time without

the program

that

sumed

above

schedule

convenient

any

the minimum

these in

Hugh W. Long, President of rise in the general market aver¬
Diversified,
made
the
follow¬ ages—point up the danger of se¬
ing observations: "While we as¬ curities. purchases based on the

and subse¬

than $250

less

releasing results of the sur¬

In
vey,

INDUSTRIALS INDIX

$34

too

IN
EARNINGS

BONDS

(ANNUAL RATE OF

_

500

30

QUARTERLY EARNINGS)

(Series B1-B2-B3-B4)

\

PREFERRED STOCKS

'•.wyv;
34

(Series K.1-K.2)

COMMON STOCKS
(Series S1-S2-S3-S4)

A Diversified

'

Prospectus

may

be obtained from

Tke Keystone Company
of Boston
50

200

Congress Street
OlLTRIIUIORS GROUP, INCORPORATED

Boston 9,

Massachusetts




Investment Company

•

be obtained from your local
investment dealer or The Parker Corporation,
Prospectus

I| PIHCW
,,

J

L

J

L

I

I

I

1

1

I

1

I

" 1926'27-*21 *29 '30 '31 '32 '33 '34 35 '3D *37 '38 '39 '40 '41 '42 '43 '44 '45 '44 '47 '48 '49 *50 '51

1

1952

may

Berkeley St., Boston 16, Mass.

w•FOUNDED

1925

.ra

Volume 173

Number 5012

.

.

The Commercial and Financial Chronicle

.

1$

(2059)
March 31, 1951, equal to
$109.04

on

per unit on 123,086.83 outstanding
units, compared with net assets of

$12,354,733 at the close
In

of

March

1950, amounting to $107.68

unit

the

on

As

of

the

sented

31, 1951, the

Fund's

assets

by equities

repre¬

50.83

was

cent, with 49.17 per cent in

tective-type securities. Of
tective
the

portion,

total

vestors to

2.20

Fund

the pro¬

cent

per

in

was

of

cash

of

and

there

has been

portion in defensive types

a

investment

such

bond

as

As

of

April 30, 1951, net assets

of National Securities Series

ket

value

ceeded

assets and

OF

47.8%

in

$11.34

pared
share

on

a

April 30, 1951 as com¬
$483,991 or $10.33 a
31, 1950.

with

Dec.

on

,

,

bonds,

equities

Fund; public utilities
cent;

per

bank

and

Among

dustrial equity group,

.holdings

the

in¬

the largest

in oils and chemi¬

were

In

insurance

stocks 5.04 per cent and railroads
2.38
per
cent.

cals.

loans made

Since passage of the Defense Pro¬
duction Act prices of old as well as

houses have increased signifi¬

new

"THE

FISCAL year ended
April
30, for National Securities Series,
marked

the

consistent
H.

J.

end

of

11

growth,"

years

of

according

to

Simonson, Jr., President, of

National

Securities

Corporation,
holders

of

Series

&

Research

sponsors.

"Share¬

National

now

Securities

number

45,310

and

hold 14,621,546 shares which

com¬

pares with 712

shareholders hold¬
ing 223,512 shares at the 1941 fis¬
Sales of National Mutual Funds
was further
reported, were

ing

to

for

the

fiscal

in turn
in

the public in general is still seek¬

ing investments, the objectives of
which are relatively
generous in¬
and

opportunity for

appre¬

to

of,

extended

Thus,

restriction
on

would

of

of

old

properties

the

increases

on,

amount

houses.

new

of

credit

existing

of

ex¬

properties

help to make the restraint
construction

new

well

as

as

tionary

mortgage
generally.

sion

loan

volume

support

and

credit

tended

the

this type of asset.

on

tend

prices

The amount

extended

on

1950

the

was

credit

more

to limit

infla¬

credit

expan¬

all

1-

of mortgage credit
old
houses during

the

to

credit

at

old houses

on

a

very

extended

4-family properties.

In the first quarter

ing

when,

sentatives

sultation
ciations

the

Very few people, it would ap¬
pear,
are
trading for shortterm capital gains.
One gets
the impression of
steady al¬
though rather leisurely buying
and of

liquidation of

no

Pension

quence.

conse¬

funds,

other

The

National Voluntary
Restraint Committee
has
for

Federal Reserve

of

1951

lend¬

insurance

companies

large share of the
mortgage

President

credit

well

as

the

as

having
holding.

making

credit

the

on

Eco¬

purchases of exist¬

on

authority

and

be

get the impression that
most
people have
concluded
that
regardless of near-term

developments in business
the

or

in

in

the

War

consulted

but

mit

whole economy.

.

for

as

with

"While
not

most

serious

investors

students

of

are

mone¬

time

to

that

of credit for other

of

them

substitution

for

money

makes

the

sistance

sense

of

managed

gold

a

course

that

of

gradually

help

limit

standard

result

tion tp the Board of the

higher

prices.

the

of

the

President's

use

as

a

delega¬

veloped

that

a

period of serious defla¬

and

tion

is

very unlikely.
And of
importance is the alli¬

and

between
the

the

farmers.

politicians
There

are

few

politicians in either
party who will seriously press
very

now

or

at

any

time in the fu¬

ture for either lower
wages or
for lower farm prices."
EDSON

B.

SMITH,

Financial

approval

General

and

by

also

the
after

,

is

program
on

with

Attorney

cess

is

wholly dependent

cooperation

of

such

on

list

of

the

sure,

that

roster

this

of

is

an

financial

committee

has is¬

vol¬

a

revival of the so-called V-loan

which

successful in

was

there

the

program,

cies:

Army,

Navy,

Air

Force,

merce, Interior, and
the General Services

Com¬

Agriculture,
Administra¬

tion, and the Atomic Energy Com¬
mission.

The

Banks act
United

12 Federal Reserve
fiscal agents of the

as

States

on

behalf of

these

after

consultation with

the

operations

of

the

the

the

V-loan

that
a

of

the

special

procedure

guaranteed

the

first

relatively

defense

loan

to

the

Bank

serve

as

A

of

to assume

rate

to pay.

financing

institutions.

The Board and the Reserve Banks

there

has

not

yet

been

of the

Program has had
on

a

salutary

the trend of credit.

Ex¬

some

signs of

abating in recent weeks.
'

Endorsements

of

the

participate in is to the extent
der

the terms

order

to

be

of

of

un¬

the Program in

assistance

to

government

given

the

by:

since
to

his

the

risk

bond

market

last ..week

agency

Treasury's decision not
the almost $8 billion

redeem

$10

million

since

of last

the

an¬

Tuesday.

level
or
volume, but
merely to enter the market when
and if a price decline gets out of
hand. The day before Mr. Martin
told
to

members

as

the

let

free

tors

of

the

market

would

market

in

place
the

House

control

hands

that

completely

go

of

of

the

specula¬

instead of the forces of sup¬

ply and demand.

Up to April 30, 503 applications
for guarantees

totaling about $565
been
received; 327

tracts

security

as

for

defense

loans. However, this situation will
be

remedied
to

by

a

clarifying

the Assignment of

Claims Act recently approved by

ment

to

lending

on

defense

con¬

tracts removed, and with the an¬
ticipated acceleration in the de¬

fense production program, there is
every

Jaffe, Siegler Opens

anteed

New Branch Office
.

CLEVELAND,

Ohio — Jaffe,
Siegler and Co., Union Commerce
Building, members of the Mid¬
west

Stock

Exchange,

announce

the opening of
.an
office at

Lorain,

Ohio,

116

at

Eighth
Avenue, un¬
der

the

man¬

agement of
Louis

Fields,

to

R.
en¬

gage in a gen

eral securities

business.
Mr.

has

Fields

spent

the

major portion
'.of his life in

Lorain,

Ohio,

Louis

R.

Fields

in business for

himself.

:

In

the

last

few

years,

to expect that the
.he has been associated with the
applications for guar¬
loans
under
the
V-loan City Produce Company of that

reason

program

Program

*

does not plan to peg prices at any

possible and reduces the govern¬
ment's contingent liability.

volume

1950, has shown

*

specific

This

the Senate and the House of Rep¬
resentatives.
With
this
impedi¬

effect

the

In referring to the Board's pol¬
icy, Chairman Martin indicated it

re¬

Committee

indications that the initiation

that

■:

under

of

amendment

to

therefore,

bonds callable Sept. 15. /He
said the Reserve's purchases were

institutions

much of the

as

in prices. It is of paramount

of 2%

quested by the financing institu¬
tion, the higher the guarantee fee
encourages

Unless both public
private expenditures for non--

the

guar¬

guarantee

which it is required

of

uses

questioning by various
May 11, Mr. Martin
termed negligible the support to

guaranteeing agencies. The higher
percentage

civilian

Senators

5% and a schedule of guarantee
fees have been established
by the
Board after consultation with the
the

competing

nouncement

interest

pros¬

and other metals require restraint

Under

Re¬

agreement.

maximum

and

Support Operations
As Negligible

its agent to execute

guarantee

Present

Martin Terms Recent

anteeing agency approves the ap¬
plication, it authorizes the Re¬
the

curtailed.

are

pective shortages of steel, copper, *

*

appropriate

approval.'"if

agency for

that the defense and other essen¬
tial goals cannot be realized un-J
less civilian production and de¬
mand for important types of
goods

con¬

Federal

the

increases.^

ened.

ing out the terms of the proposed
loan, files an application for a

mits'the

possible

anti-inflation programs now in op¬
eration be continued and strength-?

or
financing institution. The
financing institution, after work¬

the

country and abroad
of

importance,

bank

with

this

strongly inflationary.

both in total output and in
output j
of
particular
products
indicate :3

vance

financing in
to carry out his
contracts
gets in touch with his local

guarantee

in

is still

defense purposes are limited, the
a further ad¬

tractor who requires
order

ation

only alternative is

fact

obtaining

is

any

moderated, the fundamental situ¬

construction.

of

for

loan

simple. Briefly,

virtues

is

program

tially, adding to inflationary tend-;
Although recently infla-f
tionary pressures appear to have

encies.

and

Reserve

Banks and rates,
fees, forms, and
procedures to be utilized in con¬
nection with such
guarantees.
One

private out-,
plant and equipment

new

metals, such as automobiles, ap-j
pliances, houses, and commercial'

guar¬

anteeing agencies, has prescribed
regulations governing the guar¬
antee

for

as a per¬

expected to increase substan¬

On

guaranteeing agencies. The Board,

ci¬

lev--

In addition,

year.

Estimates

present

eight guaranteeing agen¬
the
Departments of the

are

time to build up a body of statis¬
tical information
to
enable
the

of

suc¬

the

be appropriate and helpful

pansion of bank credit, which was
very sharp during the last half

the part of participating

financing institutions and its

a

three

may

are

consulta¬

entirely

to

analyze thoroughly
the effects of the Program, there

mission.
The

record

national

While

tion with the Federal Trade Com¬

untary

selected

a

are

guar¬

the

in
for

centage of national output within

defense

are

is

demand

doubling defense outlays

lays for

of

will increase greatly.

.city.

The basic purpose of the V-loan

program is to utilize the private
Coughlin Co. Adds
banking system so far as possible
(Special to The Financial Chronicm) >
: '
in
financing
necessary
defense
DENVER,-. Colo. —Herbert.. P.
many representative in dustry production. V-loan guarantees are
'White has been added-to the staff
groups. In the circumstances, those especially useful to smaller con¬ of
Coughlin & Company, Security
and

pledges of wholehearted

co¬

operation have been received from

.

Editor,

"Boston Herald."




consultation

loans made

contractors

Inflation

vilian goods remains at high
els.
Present
schedules
call

by private financing institutions to

*

in .the

politics and union labor is such

after

on

have

will be issued from time to time.

making

field of financing. It has been de¬

ance

as

contained in the Defense Produc¬

"It is doubtless well under¬
stood that the alliance between

equal

program under which

loan

financing institutions partici¬ of slightly more than 100 a month.
pating in the Program to provide
Because of rulings of the Comp¬
a common guide for
combating in¬ troller General, financing institu¬
flationary loan expansion in their tions have been reluctant to take
respective fields. Other bulletins assignments of government con¬

authority

tion Act to encourage the
of voluntary
agreements

guaranteed

all

This

purposes.

program has been established

least

re¬

credit

operations in such a way as to
contribute to meeting defense and
other essential needs.-and at the

tary theory, it is probably true
most

their

current

fi-*

necessary

production

early stages and

bulletins,
the first million had
means of restraining
applications were approved for
financing, the second about $422 million; 105
applica¬
with the principles to be followed
tions for about $123 million are
in
financing
capital
expansion under consideration; 57
applica¬
programs and the third with State tions
aggregating about $11 mil¬
and Local government financing.
lion were declined, and the re¬
These bulletins, together with the
maining few applications were
Statement
of
Principles of the withdrawn. At present, applica¬
Program, have been distributed to tions are being received at a rate

earlier, is de¬
signed to encourage financing in¬
conduct

Defense

inventory

Program

same

the

sued

recently inaugurated Vol¬
untary Credit Restraint Program,

to

as

On

private

authority

the

dealing with

The

stitutions

stocks

carefully

the

I'm

The

Voluntary Credit Restraint

good
cash.

a

Vy

y

,

well

as

the

on

subcommittees

very

agree,

the

on

serve

membership of the national and
regional
committees.
You
will

II.

have

inflationary impact

political
situation
they will be as well off with
common

also

any

fi¬

not
of the
or

financial

Continuation of such rapid expan¬
sion of mortgage debt would not
markets

each

of

with

any

wholly

provide broad participation by the
community. I will sub¬

mortgage debt outstanding
4-family houses, new and
old combined, is 2*4 times what it
World

loans is

discretion

various

been

1- to

of

has

the

Total

end

the

or

national committee

under consideration.

the

the

refusing to make

or

Members chosen to

provided in the bill presently

to which I referred

world

con¬

financing

nancing institution, whether

that

urges

granted

of

Section 301 of the Defense Pro¬
duction Act provides the
for

obtain

Continuing Need for Restraints

restraining

V-Loan Program

subcommittees.

ing houses. The Board joins in this
recommendation

"We

These sub¬

the final decision with respect to

particular loan

Committee

of

means

expansion

to

Council of Economic Advisers and

Joint

one

wise able to

nancing for defense contracts, y.i

cooperative

serve
Bank of its district.
The
specific
loans
for
Reserve Bank makes
any neces¬
which application has been made
sary
credit
investigation
and
sub¬
to financing institutions. Of
course,

Program

serious

once

invest¬

available for

sultation with individual

ingly add from time
on

are

for

of

was

impressive

just keep

estab¬

each

and

banking houses.

committees

leaders.

holdings and

Credit

District, and four

subcommittees

estate

added

sav¬

initially 12 subcommittees
banks, one located in each

only threaten the stability of real

to time to

each

termining the application

volume

at

re¬

ings and loan associations have
been added to the Committee.

trustees, individuals if and as
they have idle funds, seem¬
their

representatives

savings banks and

the

was

More

areas.

high rate and continued
of

on

asso¬

in de¬

total

the

con¬

lending

institutions to assist them

a

form

insur¬
investment

maintained

to account for

no

market.

banks,

the

these

two

of mutual

it

practically

of

with
in

cently,

trol

in

each

companies, and
banking houses chosen after

ference to day-to-day news as
has been the case over the
last
several months.
J
is

Governor

ance

within

"There

Program.

Voluntary Credit Restraint
Committee. This Committee orig¬
inally consisted of four repre¬

nomic Report have recommended
that authority be granted to con¬

speculation

appointed

tional

if ever, the stock market
has
shown so protracted an indif¬

-

committees

Powell has been designated
by the
Board to be Chairman of the Na¬

ment

of

Economy

the

fifths

The

Current Financial Comment

under

regional

all

unique

the

helping to finance war production
during World War II.

lished

extension.

"It is difficult to recall

voluntary

largest on record,
almost $9 billion or about threeon

funds," said Mr. Simonson, "shows

potential

Price increases for

just

year

ended—the best year in the his¬
tory of the company, up over 47%
from the previous fiscal
year. "A
breakdown of the sales by specific

come

the

raising

properties and add¬

credit based

$29,-

687,000

thereby

effective

cal year-end."

it

cantly,

values of old

as

further

Under

Defense

a

existing properties.

on

it. is

authoriza¬

credit should be continued.

14.78

were

this

program

The Role of Credit Control

28.63 per cent of the

were

the

is

portion, industrial

for

effort

and

view that the

anteed
by defense procurement
agencies. Essentially this program

Continued from page 11

loans and preferred stocks.
In the equity

encouraged,

Board's

net

10%

receivables, 18.12

per cent was in
U. S. Government obligations and
28.85 per cent was in other

most

ex¬

$8,-

The increases boosted net assets
a
total of $715,798 or

to

33%

up

held

about

in asset value per
share in the first four months of
this
year
were
reported
by
Growth Companies.

from the year earlier
figure. Mar¬

$83,080,412

by

tion

INCREASES

share

at

securities
cost

500,000.

were

reported

of

their

an

in¬

some

'balance' their accounts

funds."

per
pro¬

months

increasing tendency for

per

por¬

inflation.

However," said Mr. Simonson, "in

with

of March

tion

partial hedge against

a

recent

114,740.57 units then

outstanding.

ciation in rising stock markets, as

connected

with

the

Program

are

tractors

who

may

not

be other¬

Financial Chronicle

The Commercial and

extent

Money Market Factors
TYSON*

By ROBERT C.

administratively fea¬
injustice, in one
segment of the American econ¬
omy.
I refer to the corporate

low

squeezing" to

cover up

inflation, and
public

monetary and

wrong

the

of

members

Bond Club I suppose your

professional
bonds.
not

U.

is

interest

primary

den

—

and

I

the

f

empha¬
word

"directly"

—

affected

to

large de¬

any

by

gree

de¬

large

is

V.

S.

in dollars

Steel
Robt. C. Tyson

small

tively

with

accordance

the

manage¬

belief

established

ment's

that

a

goods manufacturer
incurring fixed in¬
or
fixed dividend obliga¬

durable

avoid

should
terest

tions except as

last resort. Nor

a

presently contemplate any
change in that policy.

do

we

dollar is not kept

time has

method

this

.

though

affairs are not

our

Thus, I

that every one

suppose

close students of the
money and bond markets, would
agree that if there has been one
single feature of those markets
of

you,

which

as

has

head

out

stood

and

shoulders above all other features

for

it has been
policy that interest
shall be kept artificially low

nearly

20

years,

national

the

rates

and, hence, bond prices kept ar¬
tificially high. The obvious rea¬
son for doing this was to make it
easier
for
the
government
to
borrow

lot

a

took

it

As to

cost.

it

that,

war

U.

hour of

would

to

these

SECURITY TRADERS

four-fifths

buy

only

(Cc.pt.), Lytle, Reid, Kruge, Swenson
Donadio
(Capt.), DeMa.ye, O'Conner, Whiting,
meister

Inflation
»

-

•

•

"

-

'

,

.

tities

v

Up

'

new

money

are

in effect

bond

as

in in printed through debt creation and

affected

the

affairs

of

V

dividual and business in the land.

knows,
the
■only way to maintain an arti¬
ficially high price for a govern¬
everybody

Thus,

to

have

an

anything else—is
unlimited and ready

people don't like that.

discovered

quaint, is to

pass

laws and reg¬

ing their goods and services for

buyer at the fixed price lest some

a

dollars.

Men

are

pulled

out

have

limited supply of money, and

only

worth.

have

unlimited

anything requires
way

stand

buying of

equally

an

to have the

money

un¬

the
is to

each other for less

ready, in effect, to prinf it in
needed
for the
given
This the government has
through
Federal
Reserve

amounts

done

with

a

of

the

that the country

you

method

gentlemen

bank deposits

uses

is

for money.

technical

understand

better than most people.
the
government issues
ment bonds, many

it

and

far

In brief,
govern¬

of which—$40

price

authorities have
trol, and its purpose is to obscure
adopted., recently / towards
the
the dollar depreciation resulting
money ...markets
might unfortu¬
from the easy money policies. 1:"
nately be undermined. I do not
1
"i
r '
' "
4
need to tell you. what the effect
Price Controls Unworkable -■
on bond prices would then be,
if
General price control never has
only temporarily.
and never can
work very well,
Also of interest to you is the
even
when backed by the death
penalty. The reason is that it is possibility that the profit squeez¬
essentially unjust: It tells every¬ ing might be carried to the ex¬
body that they must sell iheir tent of substantially usurping the
'

.

"

'

'

.

property, or their labor, to their
neighbors for less than it is worth,

billion worth in the past ten years

while

neighbors a
margin of something for nothing
by paying fewer dollars than what
they buy is worth. General price

banks, thereby equi valently creat¬
ing * brand new deposits to be
spent.

The method, :

as

I said, is

can

to

get

control is

( *An address by Mr. Tyson before the

Bond Club of Chicago on its visit to the
$k>uth Chicago Works of the United States

injustice.

Steel Corp., Chicago, 111., May 10, 1951. torically




the

monetary

buyers it
from

says

that they

their

nothing but generalized
Price

have

edicts

been

thus

his¬

-

1

Ind.'

.

1.

2.

Meyer
Stone

3.' All'f

.,.

_____

__—

_•___

4.

Ryan

5.

Miitoa

otherwise destined

cash
■

vestment
This

——

6.

Robinson

7.

Bachar

__

____

new

money

sues—which

on

you

the

other

you

But

of

the

more

the

1475

500

1342

563

1488

3.00

30

45

1401

3.00

r

/ 527 '

3.00

SWK&PRZ

HS

$2.00

583

536

574

633

167-10

243

572

602

163-57

210

,559

532

162-4

204

577

595

209

AVG

MI

45

MI

75

12535

PWC

66

10815

MI

72

11668

SSR

54

8670

160-30

HO

75

12012

100-12

BS

67

10688

159-35.

t

224
.211

'

2.C0

555

553

'575

542

557

563

'

.

157-13

157-7

570

69

10799

156-35

223

579

682

5.00

66

10263

155-33

201

524

564.

5 00

152-35

193,

525

544

10979

Carrie

CG

72

MP

75

11331

206

535

Young ______
Snowden ___-

PWC

19

..2875.

151-6

193

505

72

10877"

131-5

'200

537

Drvis

HU

546

16.

17,.

Hunt
Carroll

11275

150-25

208

522

537

9954

14&-26

198

509

527

10958

146-8

211

502

542

146-4

209

525

563

142-34

213

554

004

5.00.

569

5.00

75

19.

Lascor

JKM

20.

Hershner

CG

66

9640

BC

75

10664

22.

Siple

HU

__v

BC

-

60

8527

142-7

197

502

57

8087

141-50

188

491

554

494

560

506

623

23.

Burkhaxdt<__

24.

Fisher

__1—

BS

63

8847

140-27

185

25.

Inman

:____

HO

66

9093

137-51

201

26.

Simons

SSR

5T

7501

131-34

191

JKM

€6

8631

130-51

179

_

29.

Jonnscn

30.

Brtuiicn.

:

:

523

534

465

624

JKM

66

8166

123-48

189

462

537

HU

60

6597

199-57

148

406

517

SSR

60

6371

106-11

156

390

606

ALTERNATES

Myers

_;

_

________

Roberts

,Neely.
Jaquith

or

•

Yaneck

176-1

207

540

156-2

200

494

1854

154-6

185

516

48

7185

149-33

218

521

48

6675

139-3

181

485

15

2024

134-4

162

435

12

1607

133-1.1

162

436

102-3

132

377

15

Neiswanger
Hammer

-

1057
2342

6
—

__

Haggerty
v

1

594

68

•

75

Dispense

151-6

•

BC

MF

21.

5.00

MP

PWC

___

___i

5.00

567

13.

18.

$5.00

562

206'
:,223

14.

r.A

generally the

3.00

534

44
45

•

,

15.

ledger

taxed away,
margins of safety

squeezed

42

30;

PRZ

Hasselgren__

would have to face the fact
a corporation's in¬
is

4.00

223

Forsyth

that the more
come

1517

211

10.

R

side

/

552

HG

11.

M

to

;;

5.00

167-43

7078

;

€.00

169-19

11311

"

■■■'{;

7.90

37

7558

72

Man

8.00

•

12187

45

Talma uge

seem

''

72

v

12

.

—__

_

13

i

$10.00

*

3.00

HO

CG

—

27

1553
7-

*

38,

TP

BS

Ormsbee

15

1534

535

576

___

28.

business.

•v

GB

Kennedy

12.

32

■ ■■*

,

Co.i———

&

25;
27

/

TM

Buchenau

27.'Taimadge

new

could

welcome

&

9.

for rein-

corporations to
through bond is¬

■

S.

facilities.

might force

seek

like

essential

in

Christensen,
r"~

&

Upliam

:

555

1542

36

31

Harris,

1403

35

33

o:

502

39'

Co.—__

Boettcher

31
'

Sullivan

Sidlo,

159(5

40

Simons, Roberts & Co.—
and
Company— 3

Bosworth

8.

$3.00

—

——i.i

7.

568

44

43

Co.—

Writer

Peters

HS

28

47

Grain
&

17
15

Prize per

Prize

Lost

Funds

Hogle

A.

„

,

<

—are

lodged with the commercial

restraint which

oX pruden.t

gram

con¬

,

reserves

resulting great increase in

the supply
The

bank-

of

than they are

called

is

.

purpose.

multiplication

This

J.

10.

is that, to the ex¬

actually ac¬
production and organized as ad¬
cepts the price control—or, more
ministrators to compel people to
-accurately, the profit squeezing—-'
sell their goods and services to
as an .inflation antidote, the pro¬

But to

Colorado

5.

-

a

that the public

tent

Mutual

4-:

higher taxes.

One of them

of

3.

■

V

K.

J.

21
22
22
23

FIRST SCORES

*

•

HG

Won

Investments
Mullen Investment Co,__

2.

6.

There are
several ways in which such a pros¬
pect impinges on bond markets.

we

greater number of the cheapened

sell the bond to his neigh¬
bor for less than the fixed price.

;

have

ulations to punish people for sell¬

•person

;

that

as

bond—or

ment

authorities

"price1

SERIES •/

YEAR'S

Mltton

K.

Robert

1.

19/

23

21
20
20
19

<.

KEGLERS ANNOUNCE TIIE

THIS

IN

have the

even

V

J'

16*
24 17*
23 ,19 /
25

■■/V.W'-

DENVER

OF

CLUB

BOND

THE

.

'■/

DENVER

BOND CLUB OF

the same controls aimed at re¬
But, stricting
prices
without corre¬
instead of logically shutting off
sponding restriction of employ¬
the spewing, what they do. for
ment costs for civilian business.
reasons which I
can only
regard Then, if there is anything left,

in¬

every

The

gotiation,"

Played.

Games

*41

redetermina¬
is
then spewed
forth into the tion" and, finally;'"renegotiation"
doing which has affected U.. S.
Steel's affairs as it has, indeed, markets, prices start going up fast. for defense business, and we have
But it is the manner of its

taxes.

(Capt.),

Bean

familiar terms of "price ne¬

same

debt moneiization and the money

We

men.

(Capt.), Bradley, Montanyne,

•

.

of the perplexities

of

Frankel, Lapato—
Weissman, Gannon
Kaiser, Growney, Gronick, Rappa____——

(.Capt.), Smith, Farrell, A.

Meyer

Krisem

only the

are

—

Meyer, H. Frankel
Kumm (Capt.), Weseman, Tisch, Strauss, Jacobs
Greenberg (Capt.), Sullivan, Stein, Wechsler, Siegel___
Mewing (Capt.), Klein, Cohen, Manny, Chegan
Leone
(Capt.), Krassowich, Nieman, Pollack, Gavin____
Burian (Capt.), Manson, King, Voccoli, G. Montanyne
Serlen (Capt.),. Gersten, Gold, Krumholz, Young_______

as

14;

28

Worki

—

_____—

___

(Capt.), Lax, Valentine, M.

Goodman

'

H.

honest money:

Won Lost

/

TEAM.

have

Profit Squeezing to Cover

Association of New York (STANY)
of. May 11, 1951 are as follows:
,

Hunter

begin¬
We seem
now
to be heading
created once again into the same sort of
for
business by
artificial bond profit-squeezing cover-up for in¬
prices and interest rates. As pre¬ flation, and I submit that it can
viously noted, when huge quan¬ be of considerable interest to you
But

Bowling League Standing

r

the $75 he

would

ASSOCIATION OF NEW YORK

Security Traders

The

paid off in
he got back

$100

the

paid for the bond
bought in 1940.

■

nings

I

,

,

Steel, of a steelwork increased

much of real things as

preferred big spending and
depreciation to the main¬
an

/

;

Notes

when it was

that

1950

dollar

tenance of

business here.

Steel's

S.

years

covered

government's own fault for hav¬
ing

growski is engaging in a securities

re¬

I have

ol the
demonstrated

1946

to

to the U. S.

cost

is compelled
primarily the

one

to observe that it is

my

buying power.

facili¬ by 55%.

used

for

used up.

been

has

Bagrowski Opens

DAYTON, Ohio—Stefan X. Ba¬

company's records:;

own

1940

worker's

complain that

than

now

assigned

time

The
marks

Hugh

associated

now

also.

Stefan X.

/

y

general

to

firm.

product prices were frozen.
But in the same span of time the

lot more dollars to buy

a

armament

money—over

more

billion—than

$200

it costs

The an¬
*

interest,

siderable

is

Escher

them

with

the

in

steel

ties, sueh as our Fairless Works
near Morrisville, Pa.
How can the

have been heard to

White

I submit, might be of con¬

swers,

admitted

been

partnership

Federal

shrunken tax base?

the

that

is

means

be

can

,

my

From

be

simple example is the plan¬

ning and building of new

has

readily by reference to common
knowledge and to a few .figures

if the
to

:

Profits during the five
{1941-1945) shrank to
an average of only 4.1% of sales
despite an "all-out" production
casions they have been woefully prudent provision of funds for
rate. Finally, as everybody knows,
that purpose avoid being defeated
—and may in the future be se¬
so-called
price control did ,inot
riously — affected indirectly by if, by the time the plant is built save
us
from
extensive
dollar
and must be paid for, there has
bond market developments. V ;
been'dilution
of
dollar
buying depreciation: The 1940 buyer of a
The Policy of Low Interest Rates power? Even government officials savings bond, for example, dis¬
But

directly affected by what happens
in the bond markets, on past oc¬

sorely needs

That this is the real nature

spent in fruitlessly guessing just
where the dancing dollar is going
to be sometime hence?
A

all

;

ation of the dollar's

honest and much from

managers'

the

of

and

laws

individuals and
otherwise

Would greater
debt
be
created? Would corporate taxation
regulations—
be stiffered still further against

into corporate profit
squeezing, proffered to the public
as a cure for inflationary devalu¬

prices with

lations be confidently made

such matters. I

fear that the country

might

that

of

amounts

generates

the world can such calcu¬

how in

understanding
community

of

obligation

with reference to

buyers?

bond

.be

control, when the foideroi
cleared away, substantially de¬

is

respect to the countless goods and
services in which they deal. But

compara¬

tain

and leadership in your

/

prospect of interest to

institutions

price

the only common de¬

as

nominator of costs and

subsidiaries

is

all

bad ones.

What

the affairs of U.

make their forward calculations

to

of

,"

'

.taxes be levied on

existence requirement to

an

even

All businesses have

affected.

are

in¬

debtedness

have

S. Steel and of all other businesses

the

cause

ttonded

of

few

•a

Inflation

is where

That

They don't vote,
comparatively, only
them.
Moreover they

that is different!

-obey

be-

*. '

men.,

Another

and there are,

Fixed Interest Rates Engenders

bonds.

That

in

if

markets

tor

tells us

quantities of newly
"printed" money flood into mar¬
kets seeking goods and services,
the money will overbalance the
goods, with the result that prices
are
bid up and the sad story of
inflation begins to unfold.
that

velopments in
the

people. But the re¬
Thus, elemen¬

terrific.

are

tary Freshman economics

are

hid¬

unfortunately

and

most

to

sults

well,

directly—

size

fiscal problems.

technical

affairs

Steel's

S.

adverse consequences of

Chicago

therefore devolve upon you a cer¬

larger corporations.

security dealers to

urges

on

or

of interest to you as

Thus it would you lies in the announced policy rescrutiny and guidance with re¬
that the profit squeeze may pro-,
be politically dangerous and ad¬
spect to the ultimate consequences
ministratively
unenforceable • to ceed until profits have been re¬
policies,
duced to 35% of the average prof¬ of monetarv and fiscal
dictate selling prices to the mil¬
lions
of
independent American its in three years in the period which consequences too often are
1946-49.
Were
profits squeezed obscure to most
farmers.
They vote. It would be
people.
that much, revenue from corpo¬
similarly difficult
to do much
rate taxation would be reduced
more than pretend
to restrict the
Dresser & Escher Admit
compensation paid to millions of by about $10 billion from the cur¬
rent annual rate, according to a
Dresser & Escher, 111 Broad-?
voting employees or the prices
charged by other millions of peo¬ rough estimate. The questions, for way, New York City, have an¬
which I do not pretend to have
ple 'in business or professions for
the answers, are: Would heavier nounced that Arthur B. Waring
,themselves;
But corporations
•

interest rates and

become active in educating

matters
with
professionally fa¬
assure you, however,
of

,

are

miliar.' I can

That, too, could have

consequences
bond

postponed

be

to

-

abandoned.

particularly to the

and

structure

pegged bond prices engenders monetary in¬
Decries use of price controls and corporate "profit

have

may

sible, despite its

United States Steel Corporation

Steel executive describes how Federal policy of

you

squeezing

production and trade. *

litically and

Vice-President and Comptroller,

As

Thursday, May 17, 1951

.

proceeds, and politi¬ that these matters of fiscal and
cally unrestrictable costs mount monetary policy, of inflation tech¬
Of primary interest to you gen¬
against frozen prices, expansion niques and cloaks, are obscure to
tlemen as bond men, however, is
most
people in this country of
programs originally contemplated
the fact that price control is po¬
ours.
I wonder if there does not

off

In Industrial Problems

flation.

.

talking

which

possibility that, as profit

the

der

tended to kill

obeyed, they have

obligations are under¬ been

Then, too, you might pon¬

mined.

that

,

its

behind

their breach. To the
they
have
been

in

honored

U. S.

.

;///

X2060X 9i

n

1329

5.00

5.00

5.00

'

/

.Volume 173

Number 5012

,

,

The Commercial and Financial Chronicle

.

(2061)

The "Gap" and Controls

Clement Evans Adds

expand produc¬
in this country, people
have more
money to spend.
And when that ex¬
panded • production goes into
military
goods,
there
aren't
enough civilian goods for people
to

as

we

doing

are

an

is

The

on.

lar.
U.

who

those

foolish

are

notion

we

the

country

also provided

President Truman

U.

the

Dominion

dian

imports

the

con¬

stocks

of

stated

that

of America's

in

$161,500,000, and has
all but $7,452,502. are
rails and preferred

stocks;

Equitable

while
also

of

one

Life

the

000 and

The

long¬

inclusion
in

of

rail

guaranteed

the

portfolios of these
insurance companies, who
supposed to pay some of the

major
are

best

investment

business

to

brains

select

their portfolios."

and

in

the

supervise

vorable

/
has exceeded

recent

action

of

are

which

becoming

because

market

of the
anteed stocks, income is far

and shall

generous,

we

their

of

tax

shelter

being

rental,

a

is

1950

York

Central's

000,000

net

I

call

to

Central's

senior

has

an

had

dend

of

one

the

first

three

New

York

uninterrupted

record

for

divi¬

than

more

outlook

is

.

most

impressive

graph

my

ticular

in

sale

of

shows

Frank Hall Partner in

shares

of

chased

200

Albany,

shares

returning

of

Gerslen & Frenkel
-Frank

L.

Joins

v

Hall

has

been

admit¬

$1,750

in

in¬

come, on approximately the same

investment.

Today,

some

.have

lost

that

client

approxi¬

mately $4,200 in principal and
tarded

the

mately
while

income

$6,300
in

the

in

to

holding the gain has

approxi¬

seven

Boston&

re¬

years,

Albany

exceeded $8,-




foreign

investment

further

encouraged

conservatism

economic

and

for

'

fi¬

in

manage¬

:

•

the. choice

as?

by

the

a

new

Co.

Establishment

of

Shell

a

new

CANADIAN STOCKS

Oil

Co., of
Canada for the production of sul¬
phur from natural gas at Jumping

Pound, Alberta.
(5) Extension
the

.'
of

„

facilities

for

development

the

A.E. Ames & Co.

of the Quebec
Titanium Corporation's

and

of the

source

incorporated

deposits,

vital metal,

new

Two Wall Street

titanium.

New York 5, N. Y.

These

dented

only

are

Canadian

dollar will also
result

of

a.

few .of

the
WORTH

economic

be

activ¬

increased

Fifty Congress Street

the

on

anticipated

an

a

that

as

Boston 9, Mass.

a

record

recently

concluded at

Torquay, England. It
anticipated however that

is- to be

the Canadian authorities will
tinue

to

their

do

utmost

undesirable

courage

of

INVESTMENTS

con¬

to

dis¬

I.

speculative

the logical

on

eventual

an

the Canadian dollar to

capita basis

total

is

Canadian.

now

;

Our

of

parity with

.

in

was

ago

on

excess

a

of

Since

the

debt

net

and has been able

Canadian

Dominion's

economy

recent

vigorous

the
anti-

MILWAUKEE, Wis. —Lewis D. ; inflationary measures have been
has become associated with
clearly more effective than those
G. Thorsen,
735
North that have been put into operation

Water

Street.

Paine,

He

formerly
Jackson\&

was

Webber,

south of the border..
When

Curtis.

the

John R. Brown

Opens

^MONTCLAIR, tf.
Brown

is

J.—John

fact

her

B.

securities

a

Road.

feel

•1'

the

drain

MIAMI,
offices
to

Co.
at

conduct

Fla.—- Insured
has
12
a

been

McAllister

the

on

apparent.

ott

Jones

Jones

&

has

Co.

Prendergast
a

securities

N.

Y.—C.

formed

with

C.

goal

Avenue;
business.

to

of

raw

a

Elli¬
1258

conduct

year

of

the

is clearly

in particular

an

resist

the

certain'

were

general

Western

inclined

trend

to the

oils,

of

opera¬

Wind*©*

Brampton

INVEST IN

CANADA

notably

Information

Available

all

on

Securities

request

on

•

Stanley Heller & Co., New York
City, established 1927, members of
the

York

New

Stock

57th and 58th Streets.

The branch

office will have complete facilities
and will be under the manage¬
of

ment

This

is

Miss' Miriam

another

pansion

following
Palm
ter.

this

of

the

Beach

step

Minden.

in the

firm's

&

Montreal
MEMBERS

The

Montreal

266
38

Notre

Morgan

Stock

Toronto

Exchange

Stock Exchange

Curb

Market

Dame St., W.,

King Street W.

61

Toronto

Montreal
Queen St.
Ottawa

4

ex¬

activities,

opening

their

of

Office this past win¬

Exact date of

Robertson

Curb

and

Exchanges, will soon open a
branch office, centrally located at
601
Madison
Avenue,
between

opening will be

CANADIAN
INDUSTRIAL

announced soon.

WESTERN OILS

Two With J. A.

'

(Special

LOS

to

The

Financial

ANGELES,

MINING

Hogle

*

hr

Chronicle)

Calif.—Fred¬

SECURITIES

erick R. Feitshans and Richard P.

have

become

connected

Sixth Street.

With
(Special

Established

Mitchum, Tully
to- The

Financial

Chronicle)

LOS ANGELES, Calif.—ChaHes

Tully
Street.

&

Inquiries Invited

Hogle & Co., 507 West

M. Blalack is

tions in connection with the estab¬

Brantford

Sudbury

and

of

Commencement

Hamilton

Stanley Heller to
Open New Branch

Hyland

nearer

Bay St. Toronto, Canada

Canadian

with J. A.

a

Exchange

of Canada
330

Federated Petroleums managed to
record slight gains.

place Canada

following:

(1)

was

oil, natural gas,

long stride

The Toronto Stock

the

were

although Massey
actively traded and
all-time high before

reacting. The golds

ma¬

discount

Coi

sufferers

worst

to

&

The Investment Dealers' Association

The base-

industrials

and

assist you.

Members:

down in the

losses of 5 to 6 points.

metals

can

JVi-ilner,

.

past steady

self-sufficiency in these
vital items. Other important pro-,
jects that will also move into high
gear this coming summer include

Elliott
at

This

and iron-ore will

-

•

offices

of the

reserves

vast resources

Arcade

C. E. Jones & Co. Formed
JAMESTOWN,

of this
commencing to

Canadian" dollar

further

.

natural

of

economy

the development of the Dominion's

with

securities business.

its

of

'

Invest¬

formed

on

wealth

is

era

an

development

now

effect

given to

Canada

of

terials, the anomaly of

Insured Investments Co.
ments

whereas

the

is

is

threshold

enormous

resources,

country

business from offices at 86 Edgemont

that
the

on

of 'unparalleled
'

engaging in

consideration

The internals

war

attain a substantial budgetary
surplus in each of the past six
years. In view of the compactness
the

We

Edmonton

neigh¬
borhood of 6% and the arbitrage
rate was unchanged at 8%. Stocks
were
generally lower with index

to

of

through which to participate in Canada's growth.

.

prices mostly un¬
changed.
Following
its
recent
sharp fluctuations the Canadian
dollar settled

in selecting suitable in.

you

vestments

dull with

reached

years

forthcoming

long experience v/itli Cana-

dian industry will be of benefit
to

Toronto issues.

were

for

Adolph
with

and

the

safe*: haven

States, the U. S.
approximately twice

the

with

Harris

10

IN CANADA

ex¬

rise

During the week interest in the

the

whereas

1-1045

ny

4-2400

tourist traffic and the operation of
the
tariff
agreements

of

foreign funds. The record

by about 15%

Adolph .Thorsen

years-

later, American Telephone would

is

material

Thill

pur¬

&

the

obvious

Canada has reduced her

(Special to The Financial Chronicle)

was

Boston

the

to

that of the United

•

American

Telephone at its high, which
returning $900 in income,

been

never

fthe Canadian national debt
per

single para¬
preference for this par¬

100

Canada has

Canadian

nervous

a

time, I would like to say that the
proof of the pudding is usually in
the eating.
Some years ago the

(4)
plant

the U. S. dollar.

of

'Dominion

80

security at this particular

with

developed by the

International Nickel

future

ment..'

for

continuing high earnings.

-

up

connection
process

activity based

now

sum

in

gases

smelting

pectation

.reasons

years!
To

industry

months

busi¬

guaranteeds that

de¬

f

a

mind

Canadian

Corporation

90,000 tons of liquid
sulphur dioxide from by-product

important degree. On the con¬
trary external confidence in the

nancial

a

usu¬

basis of guaranteed
payment,
sometimes
uninter¬
rupted for several generations.

move¬

for

Disregarding the negative factor
of 1951 in a steep rise for Class I *of current fears concerning inflation
in the United States that has
roads
of
$104,000,000
as
com¬
tended to divert flight capital to
pared with $55,000,000 net for the
first quarter of last year, the Canada, there are many positive

more

a

of

funds

Municipal

of

and numeral wealth has abated to

for

$19,000,000
as
little over $13,1949.
With Rail in¬

for

for

come

operating expense and has
been placed by the terms of the
on

million.

by the world's increasing esteem

for

above.

was

compared with

ness

leases

$100

over

foreign

movement

■New

guar¬

say,

of

prospects

pro¬

ted to general partnership in Gerally much more reliable than it is sten &
Frenkel, 150 Broadway,
in the average Industrial or Pub-.
New York City, it was announced.
lie Utiliiy stock, because this in->
come,

to

far

so

suggest that the overall

addition

favoritep

Quite possibly it

many5

duction

dol-, ity.. The upward pressure

provin¬

have

Provincial

a new plant
Copper Cliff by Canadian In¬
dustries Ltd., for the annual pro¬

projects that will make the com¬
the* ing months a period of unprece¬

to

S. specu¬

new

Government

Manitoba.

the Dominion's immense

clivities.

factors, reliable income
a premium.
And in the
of

in Northern

(3) Construction of

higher. The growing realization of

the

is now at
instance

offset

an

CANADIAN BONDS

$28

at

of this ;

any

the income

cost of

a

great nickel-

potential ^external section of the bond mar¬
ities and the substitution of Rails 'is making Canada a focal point ket was largely confined to pre¬
and Oils, proves that these two for international investment. In
liminary activity in connection

be because, among other fa¬

may

United

x

75%
•"

holdings of Canadian

velopment

large
funds in disposing of Public Util¬

In¬

major

group or in preferred stocks.
Now there must be some sound
and logical reasons for the

stocks

as

year,

cial and municipal borrowings in
this
country
in
the
past
few

$12,000 for that period of time.

companies, now holds $90,455,667 in stocks, of which all but
$8,-642,995 are in the guaranteed rail

time

for

lars there have been

to

in guaranteed

surance,

to./ the

.

accounted

Similarly,

last

Furtnermore there is still nothing

investment

an

period

same

shipments

States

"inflationary

Security I Like Best

shows

now

ex¬

increase of 25%

an

notable advance."

ment

one

Dominion

that

field for Canada at Lynn

copper

Lake

second

a

Iron

amounted

Company,

country,

registered

of

vast AllardLake ilmenite

arid

V. V

largest investors, in its published
statement of portfolio
holdings,

million

$809 million,
over

Continued from page 2

ance

this

have

rise.

Columbia

three months of this year totalled

months

The

from

likewise

ports to all countries in the first

interesting to know how the Presi¬

.

accentuate

recent liquidation of U.

dent thinks controls would close the
.

should

remarkable

a

lative

be

S.

exports

trols."—President Harry S. Truman.

gap."

and

recent abnormal volume of Cana¬

world war, we hope that our
productive capacity will soon be great enough so
that we can
carry the defense program and still pro¬
duce an ample
supply of civilian goods. When that

It would

now

turning of the foreign ex¬
change tide. Moreover despite the

a

time comes, we should beable to do without

should

sharply reversed,
tourist expenditures in

aluminum-in¬

new

ritt Gordon Mines at

pil¬

the

hope that this period will not be long and
that the time will come in two or three
years when
we can
begin to take controls off. We are moving
as
rapidly as we can to expand the productive ca¬
pacity of the country. Assuming that the Kremlin
on

for
with

contributory fac¬

a

a

British

ultimately entail the ex¬
penditure of $550 million.
(2) The development by Sher-

to be

commence

"We

bring

connection

commercial tendency

amount of harm.

does not

in

tor. On the other hand the seasonal

can

immense

an

dollars

in

will

positions in Canadian dollars have

get through this period without
price and wage controls are do¬

ing

dustry

ing operations account partly for
the
adverse
exchange
trend.
Liquidation of U. S. speculative

spreading

that

Extraordinary- demand
S.

seasonal commercial and stock

escaping it. It is going to
get worse before it gets better.
the

lishment of

eco¬

cent decline of the Canadian dol¬

no

And

closely Canadian

more

nomic prospects are examined, the
more anomalous
appears the re¬

the next year or two. There

over

of Clement A. Evans & Company,
Inc., First National Bank Building.

By WILLIAM J. McKAY

inflationary gap.
going to happen

That is what is

ATLANTA, Ga.—Archibald B.
Ragan has been added to the staff

now

spend the extra money

This creates

(Special to The Financial Chronicle)

Canadian Securities

"The plain fact is that when
you

tion,

21

Co.,

now

650

with

Mitchum,

South

Spring

1922

Kippen & Company, Inc.
Members Investment Dealers Ass'n of Canada

610 St. James St., W., Montreal,

P.

Telephone Lancaster 5101
Direct Private Wire to

Toronto

Financial Chronicle

The Commercial and
22

News About Banks

1948, and

is currently

Chairman

of the N.

NEW BRANCHES

a

Bankers

and

ETC.

REVISED

Agriculture,
Chicago,
He is also director and Treas¬

American
111.

CAPITALIZATIONS

York, and a member of
the Board of the New York Trust
New

Central Hanover Bank and Trust

York announces

Company of New

promotion of John H. Andren
and Otto H. Goettert to assistant
Vice-Presidents. Mr. Andren is in
the

division and Mr. Goet¬

the foreign

the personal trust divi¬

is in

tert

sion.
*

*

*

Joseph C. Rovensky, member of
of the Industrial Bank

the board

of

Commerce

of

will

York,

New

of
Humane Letters degree from Wag¬
receive

on

Mr. Rovensky is also di¬

June 2.

Foreign

National

the

of

rector

Chairman

Council,

Trade

Island,

Staten

College,

ner

Doctor

Honorary

an

the

of

March
maintained

of $5,600,000,000 on

excess

31, last, National City
53

and

in

bank

and

Trust

Co.

grown

(May 3,

issues of the "Chronicle"

1867, and May
10, page
1962), the bank recently took ac¬
tion toward increasing its capital

Trust Co. of New York

Irving

promotion of
from Assistant

the

announced

has

Olavi

%

$

%

Silvonen

Vice-President

to

Vice-President

Mr. Silvonen was grad¬
ated from Brown University in
has

he

then

Since

1932.

in

engaged

ment work except for war

been

invest¬
service

,

*

ft

voted

of

Dolan

pointed Aubry J. Hood, principal
Executive Assistant.
Mr. Dolan

'

320

showing scenes along the inland
waterways of the United States
are on view during the month of

Comer is Presi¬
dent of Southeastern Cottons, Inc.,

May at the West Gallery, Rocke¬
feller Center office of the East

Advisory Board of the Tex¬

to the

the

of

Office

tile

at

bank

Broadway. "'Mr.

of the -leading

one

commission

Mills,

Avondale

of

-

Presi¬

Ala.; and a
Mills, Inc.,

New York,

from 9 a.m. to 3 p.m;,

weekdays.

The

*

Co.

Trust

of New

is announced by

Chairman

the

Board of the trust company.

Mr.

Flanigan,

Mr. MacLeod, who has

tional

been

$1,000,000

Adam

the

Brooklyn,

last

Frederick

has been President

since Dec. 14, 1950.

&

#

The

shareholders.

basis

the

will

by

New

offering is
share

held

of

banking
First

cluding

group

Boston

Corp.

and

Harvard

Franklin

by
in¬

Savings

Dominick; Goldman,

ft

A.

Bank

was

ft

the

of

site

building, granted a charter to the
Bank of North America, making1
it the first chartered bank on this

with

merged

institution

The

continent.

was

Pennsylvania

The

Company in 1929.
ft

the

is

now

Salem,

in

stated

was

Morris

Sayre

elected

has been

the Board of Managers

of The
Mont-

clair, N. J., it is announced by T.

Obligation Municipal Bonds

Philip

Municipal Revenue Bends

Sayre
Board

WATER

Reitinger, President.
is Vice-Chairman of

Mr.
the

of Directors of Corn Prod¬

ucts

ELECTRIC

branch offices will become

of

part

;

First National

the

on

July 1.
ft

ft

ft

middle

the

About

will

of

have

June,
new

a

in name—the
bank representing the merger of
at least

bank,

institutions—the

old

Co.,

Smith,

and

National

E.

tablished
assets
over

established

President

whose

David

new

is

the

in

1836,

Geoffrey *S.

Exchange

Corn
and

Bank

Girard

Trust

Co.,

William, President,
in

es¬
Combined

1858.

HOUSING

of these organizations is expected

has been associated with the

to

pany
as a

Municipal Department

g4llen & Company
Established

1922

30 Broad Street, New York 4




ite

since

1908 when he started

student engineer of

City,

111.

New York

in

the Gran¬
He came to

plant.
1928

Manager of the

to

be

company

General

and

was

ing of the services and
offer many

entire

resources

to

meet the

Trust

past President of

be

stepped

in the coming

Corn

considerably

requirements of

defense.

operated

up

The

new

na¬

Girard

the

W

Mr. Weigel

section there.
Vice

Since

1938.

bank

the

with

been

since

a

He served
officer of the
Hoyleton State and Savings Bank
before joining the Reserve Bank.
Mr. Wotawa joined the staff of
as

Treasurer

Ording

1938; before

Manufacturers

the

at

in

Co.

Trust

14 years

had worked for

that he

St.

Bank

&

and

its

Louis

Auditor

General
Bank in

Reserve

served

a

as

of

in

He

1950.

lecturer

of the

Exchange from

Stock

exception of

1946 when he was
leave of absence while in the

1943
on

early

to

Ording

Mr.

Army.

States

United

been

has

with Parrish & Co. in

Recently
associated

their Hemp¬

stead, Long Island office.
%

Hutton Adds Three
(Special

LOS
E.

to

The

Financial

Ch?.onicle)

ANGELES, Calif.—Merritt

Louis

Jacqua,

Kurze, and
added
F. Hutton &

S.

William J. Shaw have been

staff

the

to

of

E.

Company, 623 South Spring

With Douglass
(Special to The Financial

Street.

at

the

& Co.
Chronicle)

Calif.—Nell
T. Dunbar has joined the staff of
Douglass & Co., 133 North Robert¬
BEVERLY

HILLS,

Boulevard.

son

Dempsey-Tegeler Adds
(Special

to

The

Financial

LOS ANGELES,

the

1946 and Assis¬

Vice-President

tant

Mr.

1951.

the staff

on

1929 to 1950 with the

predecessor, the Lafayette Southside Bank and Trust Co.
He be¬
came

1,

June

on

was

York

New

an

the Reserve Bank in

will become
Assistant

member of the staff as

Secretary of the bank.

for ten years

his

position

been

has

he

1949,

an

as

President

-

the

1948.
announced

also

Scribner

that James S. Ording

last

(Consumer Credit Administra¬

tion)

Secretary which

as

of
to

he has filled since May 20,

period

such occasion covering the

V.

Brown

staff

has

Chronicle)

Calif.—Stanley

been added to the

Dempsey-Tegeler

of

& Co.,

210 West Seventh Street.

Central States School of Banking
at

Joins

Madison, Wis.

the
of the Reserve Bank

the

At

rectors

same

di¬

meeting,

(Special

ac¬

LOS

to

S.

B. Franklin

The

Financial

Chronicle)

Calif.—Edgar
become affiliated

ANGELES,

cepted the resignation of William
Stead
as
Vice-President,
a

with Samuel B. Franklin & Com¬

position he had held since 1946;

pany,

H.

that he

time

as a

Stead
to

Last

was

serve

had

served for

called

as

December
to

the

Secretary

the

defense

Mr.

Washington

economic

adviser

to

of the Interior on
programs

E.

Beaver

has

215 West Seventh Street. ."

a

member of the Board of

will

Bank

out

carried

has

duties

July to December, 1950, when he
served as chief of the Regulation

State bank, with

Exchange
as a

On several occa¬

Washington,

in

System

Directors.

be

he had been Assistant

assignments at the Board of Gov¬
ernors
of
the
Federai Reserve

will

Mr.

a

advantages to the

community

economics.

of

Lewis

Mr.

sions

before

tional

Sayre is

field

the

period of industrial growth. Pro¬
duction in the Philadelphia area

elected to the presidency in 1945.
the National Association of Manu¬

Mr.
Lewis has been connected with
the
Reserve
Bank
since
1926;
in

one-half billion dollars. Pool¬

Refining Company, and until
recently was the President.
He
com¬

at various
times and is the author of articles
University

Louis

St.

has

of the two banks will total

and the

School of Economics at

Graduate

Bar, as General Counsel
Association
in
addition

Mr.

lecturer on the School

a

Scribner
of R.
Michael Charters, member of the
New York Bar and the Nebraska
announced the appointment

He

1948.

in

of Commerce and Finance

Assistant

'

TOLL BRIDGE

has been

has

Trust

Montclair Savings Bank, of

"Enquirer,"

President of the Second
reported,
the
item
adding that as a result of the ac¬
tion, the Second National and its
seven

Federal

became Assis¬

and

1941

Squash

Racquets Association.
Simultaneously
Mr.

the Reserve

of

Vice-President

tant

National,

two

to

in

Bank

staff

the

to civilian life.
the Legion of

dent of the United States

10, Frederick L. Deming, Dale M.
Lewis, Howard H. Weigel and Jo¬

joined

return
awarded

was

by the late General Henry
H. Arnold. He is currently Presi¬

St. Louis on May

Reserve Bank of

left

Merit

ft

Board of Directors of the

W. Bauer,

in

t

the

in favor of the deal, Harry

voted

Philadelphia

5^5

of

of the stockholders, it

having succeeded W. Warren
Stocker following the retirement
of the latter from the Presidency
$

Bank

First National Bank of Cincinnati.

Mass.,

December, last.

National

May 1 voted to sell
of their bank to the

About 90%

Defense

meeting of the

regular

Vice-President.

on

assets

to

since 1949,
ft

ft

Second

the

a

Hebard

of

'

in

SEWER

the

from

Street

nut

President of the Salem Five Cents

r

t

He

School.

Law

.ft

Sachs & Co.; Lazard Freres & Co.,
and Lehman Bros.
With assets in

General

St.

and

Before enter¬

admitted to the bar in June, 1947.

Inci; Harriman Ripley & Co. Inc.;

Dealers

Commerce

&

ing the armed forces he attended

Stanley & Co.;
Kuhn, Loeb & Co.; Blyth & Co.,
&

Schneider

John's Law School.

Morgan

Dominick

.late

Schneider, of Brook¬

Frederick

Finance

on

for

record

headed

having

the

is a
graduate
of the University of
Pennsylvania Wharton School of

May 14 to

new

of

Bryer H. Pendry in the law firm

offering is being underwritten
a

The

one

of

the Continental Congress,
diagonally across Chest¬

1781,

meeting

Cincinnati

8.
The subscription rights
expire at 3 p.m. on June 4.

May
The

of

shares

6.2

each

Bank
on

In

make

of

lyn.

City

way

of the mall.

to

construction

Gen.

bank,

with

associated

t

tional

mailed

demolished

the

to
for

been

Trustees

the

of Pendry &

were

the buildings which is

of

one

Major

the

During World War
Air Forces
with the rank of

cial industry.

II he was in the Army

He

At

en¬

finan¬

tire business career in the

Advisory

of

Office

the

advisory

capacity until July 1.
Mr. Putnam has spent his

seph C.
Wotawa were elected
Street— Vice-Presidents.
Mr. Deming

Chesnut

511

at

located

the-

to

the

Heretofore, the Independ¬
Hall office of the bank was

ence

Parry will remain in an

ity Resources Board and a mem¬
Advisory Com¬
to

Mr.

Conn.

Co. of New Haven,

&

he

ft

facili¬

conference rooms and other

ties.

1946, and succeeds Sidney

Parry who resigned to become
associated with Chas. W. Scranton

Mobilization.

banking and safe deposit fa¬

for

June 1,
L.

which

•

cilities and the second floor for

According to the Cincinnati "En¬

share to 1,000,000 addi¬
shares of capital stock of

National

partment is located in the base¬
ment.
The first floor will be used

since

Committee of the National Secur¬

mittee

Henry W. Putnam

staff

ber of the Science

modernly equipped money de¬

A

quirer" of May 2, the stockholders

Subscription rights to subscribe

York

Schneider,

on

son,

bridge.

red brick,

bank.

of

for

at $40 per

The

of his

election

H.

The building is a
colonial Georgian style
structure and is three stories high.
River

the

on

Association

May 1.
Chairman of the

is

Thomas

Dr.

the Delaware

and later to

Street

Treasurer, has
been

on

Scientific Manpower

Market

to

sel

Board

dent of the department store.
ft

announced

Y.,

N.

the

10

Hall

and

Assistant

May 8.

on

President of Monsanto

from

north

extend

will

which

Vice-

President

board, who retired as

bank's

the

for¬

Putnam,

merly

William M. Rand on

He succeeds

This, it is

Frederick Schneider is also Coun¬

Prior to that

he had been Executive Vice-Presi¬

ft

Schneider, Jr., President
Roosevelt Savings Bank,

May

years,

of new stock.

ft

&

by

$1,100,000

to

sale of $100,000

the

ciated with Stern Brothers for the
19

Y.,

N.

14

May

on

Streets.

Independence

be

Brooklyn,

of

Bank

from

asso¬

ft

ft

increased, effective April 23,

was

of

painted

were

capital of the Lafayette Na¬

Horace

of

C.

Edmond

Lamp,"
ft

The

by

publication of
Oil Co. (New Jersey). •

"The

/

ft

MacLeod, President
of Stern Brothers, has been elected
a member of the Advisory Board
of; the
Fifth
Avenue office
of
York, it

FitzGerald

James
for

Thomas W.

Manufacturers

paintings

Standard

Sylacauga, Ala.
ft

River Savings Bank of

Cowikee

of

Eufaula,

Inc.,

director

Vice

houses;
director

and

dent

Worth Street

Trusts

and

stated, is the first privately-owned
structure built on the hew mall,

Jackson, Chairman of formerly Administrative Assistant.
*
A
ft
the Chemical Bank & Trust Co. of
An exhibition of water colors
New York, announced on May 10
Comer, Jr.,

President Mr.

Pres¬
ident of Monsanto Chemical Co.,
wa selected a director of the First
National Bank in St. Louis at a

Pennsylvania Company for

Chestnut

and

N. Baxter

the election of Donald

M.

Scribner,

ft

ft

■;

In¬
dependence Hall office at Sixth meeting of the board

Assistant

from

promoted

ft

meeting

special

a

opened its newly constructed

Vice-President and Mr. Hood was

1

by

Dr. Charles Allen Thomas,

Banking

New

May 14 elected Thomas A.
Vice-President
and
ap¬

on

page

at

on

The

Bank

Savings

Bowery
York

issue,

5

a n-

Joseph

formerly
United

was

the

of

Vice-President

May 28.

of The

Trustees

of

Dawes,

Gen.

tors.

here,

w a s

nounced

pany

*

*

*

Board

The

our

being

e^ d

it

by an additional 200,000 that post (under President Calvin
shares, from 1,100,000 shares (par Coolidge from 1925 to 1929) to
$10) to 1,300,000 shares, will be Ambassadorship in Great Britain.

v'!-

$156,000,000.
,

was

'

in the Navy. \
*

to

April

its surplus

and

h

issued

has

Chicago

of

the

Board of Gov¬
ernors

National Bank & Trust

The City

Company

Firms at the

Exchange

Meet¬

of

ing

1438, a pro¬
posal to increase the authorized States, and it has been pointed
capital of the Pennsylvania Com¬ out, that his activities ranged from

$124,000,000 to $144,000,000
from $136,000,000

from

investment

ofithe company in its

activities.

continuously

page

in

stated

As

directors.

the

been

Board of Patino Mines and Enter¬

Spring

subject to authorization by the expressions of profound sorrow
stockholders at the meeting to be in recording the death on April
held on that date.
The subscrip¬ 23 of Gen. Charles Gates Dawes,
tion price will later be fixed by Chairman of its Board of Direc¬

outstanding 7,200,000 shares upon
sale of the additional stock, have

prises Consolidated, Inc., and other
organizations.
'

The issue of the rights

shares.

665,000,000. Dividends on the cap¬
ital stock, of which there will be

to

subscribe for new
is

receive rights to

period outstanding loans in¬
from $550,000,000 to $1,-

Stock

of

ft

ft

appointed Executive

was

Vice-President of the Association

in our issues of Feb. 8,
647, and April 5, page 1438.
ft

Exchange Firms

Putnam

peared
page

ad¬

SPRINGS, Va.—Henry W.

HOT

proposed consolidation ap¬

to the

on

business

creased

paid in each year from 1813
date.
As indicated in recent

Banking and
meet¬

May 14 fixed the close of
on May 28 as the record
date for determining those stock¬
holders who will be entitled to
ing

999,000,000 in 1940 to $5,244,000,000
at the close of 1950.
During the
same

of The Pennsyl¬
for

Company

Of

Clark and Russell J.
Corn Exchange, and
Johnston,
Basil L.
Harlow and George H. Brown, Jr.,
from Girard Trust Co.
References
Bauer, from
J.
Malcolm

Trusts of Philadelphia at a

Farmers
from $2,-

Bank

City
have

vania

10

past

deposits of the

combined

years,

the

In

directors

The

branches located

overseas

countries.

19

will

economic

as

Putnam Exec. V.-P.

R.

George

ft

ft

ft

act

They are:

appointed.

been

to

and

basis

permanent

viser to the Secretary.

Geoffrey S. Smith will be Presi¬
Five Senior Vice-Presidents

have

that

in

12

Dec.

since

continue

dent.

Company.

New York

67 branches in Greater

as

serve

time

David E. Williams
Chairman of the

Board; James E. Gowen, Chairman
of the Executive Committee, and

Foundation

of the Nutrition

urer

of

will

leave of absence from

on

bank

assignment. He is joining the In¬
terior Department staff on a full-

Ex¬

Corn

Girard Trust

the

change Bank.

Boston, Mass., and
director of the Foundation of

ucts Company,

the

directors will

of

board

new

head

Grain Prod¬

the New England

of

A

He is a director

utive Committee.

CONSOLIDATIONS
NEW OFFICERS,

A. M. Exec¬

has been

and

System

serve

serving as

the Department, and he

tered by

Federal Re¬
the Federal
Deposit Insurance Corp.
in the

membership

which office he held in

facturers

1

Thursday, May 17, 1951

.

.

.

(2062)

adminis¬

With Waddell & Reed
(Special to The Financial

Chronicle)

DENVER,
Colo. — Winston S.
Watrous is with Waddell & Reed,
Inc.

yolume 173

Number 5012

The Commercial and Financial Chronicle

.

.

.

trained and
small
loan
privileges; friendly atmosphere;
services; general and specific personal objectives; confidence in the
pleasing

bank's

By EDWARD L. BERN AYS*
Counsel

Despite

Public relations executive, though
stating savings

banks

are

in

In

the

last

30

mutual

Savings banks have had

a

million

million.

They

rates

to

of

In

a

the

been

Bernays

thrift

ernor

vFces l^ave^develwed

i

been

.

,

,

not

they

strong

as

were

10

..

relatively
ago

years

100 years ago.

as

even

or

Savings banks have

nmcfrpccivpiv m
ipse
progressively
in a
a less
position competitively.
Indications point to a continuance
ihppn

rm+

been

put

adequate

drastic

is

something

unless

trend

this

of

unanimously, you agreed
that mutual savings banks ought
to
to

make

effective

more

secure

business,

new

through your Association. These
Soals are:

attempts
both in

(1) To educate public opinion
in the nature, function and im-

to customers and in re- portance

regard

of

the mutual

savings

bank system to our American
Asked what your own bank was economic pattern. By helping the
doing along these lines,' 50% of American people to become aware
you
said you were advertising; of these public interest aspects of
io%
said
you
have
improved mutual savings banks, you will

gard

to

your

service.

sound

investments.

'

-

have

tackling

in

associations

fifth

placed

population
"E"

considered

most

Bonds

services

to their communities, 80%

of

you

said YES and only 16% NO.
y0u

own

first; and
geographic
first. One-

more

then asked what your

were

bank

was doing along these
immediate basis. About

In

to

regard

tivities along
you

said

io%

engage

you

public opinion

on

side

your

present

ac-

of
advertising;

were

legal sanctions to make the mutual
savings banks meet their pi oblems.
Judging by your own analysis
of ,the situation, this two-pronged
etturt should go a long way to¬
ward

in community activ-

ities; 10% rely

teou's

your

these lines, 16%

service.

You

on an

and

counts

About

20%?

Christmas

have

money

your

Clubs,

life

orders

savings;

bank

and

16%?

done.

A Poll of Savings Bank

Executives

swiftly

changing

NYSE Elects Crooks

had

25%

insurance;

meet your prob¬

you

this

mentioned

Asked what types of new business

in

world.

other public relations activities,

developed,
33% 0f these who replied have 40% of you said you had Christestablished
school
savings
ac- mas Clubs; 30%? had savings bank

lines

helping

lems

efficient, cour-

on

Chairman of Board
Richard M. Crooks, a partner of
Thomson & McKinnon" was"elect-

school
vacation Chairman

had

had

"

hive banks' Next

and

Savings banks are strong today,
but

Almost

t0 blame; one-tenth, commercial and additional banking hours. An- group accounts and safe deposit

^eater llowth

.

number

to

banks.

in

sixth

cor

have

would

what

^urh

asked

importance various fac-

loan

shifts
L.

Edward

time

growing,

enrtailpd

of

another

that they have

are

you

way

banks should offer

contributing to the decline of

and

at

the

in

declines

_

ill-

same

for

One-fifth of you placed savings

and

But

efforts.

have
the

to

Here I should like to recommend two important goals which
you can work for cooperatively

While you gave us^ a rather
that pUblic relations ought
negative competitive picture, you to bg a contfnuing vjtal force jn
indicated your keen awareness of the mutuai savings' bank system
it

blame

areas

savings

employment,

death.

inflation, lack
misleading govadvertising and the Ko-

were

order
tors

un-

accident,

these

have been

you

answers

in

above.

You

ulation,
against the

ness

excellent

service given the public; the en-

interest,

your

the

p o p

hazards of

economic program and

payrolls; the

the problem.
relative share paralleled
Asked whether mutual savings

Local

growing urban

1

think will not affect you
as your competitors;

favorably

increased

and

aggressiveness

which, how-

America's

situation.

rean

the

needs

of

ernment

have
of

as

of FDIC coverage,

helped to take
care

your

thrift inclination,

successful in

you

necessary

.

from

9

your

exception, all of

reported that

promotion.

.

number of de¬

20

of

and

funds

the

achieving the goals

your
attempts to meet your
ergy, ability and desire of youi
q£
wh0 answered
this
Other factors blamed—in order managements to giow and to see question, 66% thought these ef- problem.
of frequency—were legal restric- the mutual savings bank system £0r£s were successful.
(2) Only through an integrated
public opinion can you obtain
tions, general complacency, higher expand; and new fields of activity,
^11 of you
without execution

steady

growth, from $5 billion to $20 billion.
They have doubled their
positors

lack

on

decline

confidence of the public
institutions; momentum

ever, you

of improving their position.

years,

With only one
y0u

,

of

Reveals results of a poll of savings banks' executives
regarding factors affecting mutual savings bank system and
means

the

and

power

for

counts, and direct contacts with outlined in your
industrial plants.
,
questionnaire,

for it, 75%

quency:

society.

the

tising, school savings, payroll savings, solicitation, club saving ac-

of you believed
savings banks would grow for the
following reasons, in order of fre¬

strong today, finds they have progressively been put in a less
favorable position competitively, due to changes in our

'

personnel;

records.

reasons

Public Relations, New York City

on

highly

were

quency

Impact oi Changing Society
On Savings Banks

23

(2063)

ernors

of

of

the

thp

Board

Now

of

Gov¬

Vnrk-

came restrictive state other 20% simply said they have boxes.
;
...
Exchange. He
legislation and lack of aggressive- added services. 14%? have savings
You also mentioned other types succeeds Robness* Other factors listed by you bank life insurance, and 10% have of business in which you are en- ert P Boylan
as

of first importance were lack safe

0f

trained

personnel,

life

insur-

companies and postal savings.

deposit

facilities,

mortgages

loans,

and

.

personal gaged via your bank, but you said
insur- that you were not engaged in as

life

Chairman
four

for

one-year

many
activities as you thought terms
who
announced his
half—50%?—of the
re- you should enter.
petition from other savings insti- spondents answered the question
With what you have told me as ret ir e m e n t
tutions
throughout
the
United as to what you were doing in a basis, what recommendations do more than a
States to a variety of causes.
month ago.
regard to additional services on a we have for you?
Three-fifths of you attributed long-term approach.
Of those who
Well, as leading executives of Mr. Crooks
it to higher interest rates. One- answered, the largest group—12%? the mutual savings bank system will
formally
fifth blamed convenience of com- _«aid they added services as the in the United States, you are like take office on
petitors in locations not served need developed..
most people actively engaged in Monday, May
by savings banks; and another
About 75% of yqu agreed that a business. You have a fetter un- 21.
fifth
blamed
poor
advertising, mutual savings banks should pay derstanding and greater recogpiMr. Crooks
16%? of you said more agressive- a higher rate of return to deposi- tion than anyone else could pos- has
Richard M. Crooks
been
a
ness on the part of others; another tors. About 50%? of you said that sibly have
of the CAUSES of member of the
16% said savings and loan associa- you have already increased your your present problems and of pos- Exchange since 1941 and a Gov-

ance

you

attributed

increased

com-

ance

loans.

Only

r

We

wrote

from

you

estimation,

to

to

you

what were,
the reasons

find out
in your
for the

present situation, what you offered
as a solution, and which
of them

tions.
interest rate. Some 12%? said you
Government savings bonds and were increasing your mortgage
more liberal lending policies each portfolios for this purpose.
were mentioned
by 10%?.
Others said—in order of freOthers factors listed in order of quency—that you were building
frequency were less restrictive up
earnings where you could
legislation, commercial bank prof- maintain a 2% dividend race;
its, better mortgage packages, life maintaining rates commensurate

sible SOLUTIONS for these prob-

ernor

lems.

old

since 1946. He is 45 years
and lives at 192 Fairview

To begin with, you are aware
of the realities of the situation,
You know there has been a decline
on our
in the relative share of the mutual
problems to cope with the situasavings banks in the total savings
tion.
of this country—from 21.1% of all
We
divided the
questions we insurance, progressive top man- with
other
banks;
supporting savings in 1920, to 18%? in 1940,
asked you—the Presidents of sav- agement, better public relations, views for a free security market; to 16.1% today.
ings banks—into two parts.
FDIC, crusading from Washington extra dividends; trying to liberFurthermore, you not only unThe first had to do with factors a°d
modern banking quarters, alize the investment fields; de- derstand your problem, but are in

Avenue, Jersey City, N. J.„ with

general agreement both as to its
causes and as to the methods by
which you can cope with the
situation.
More than that, you have, as
individual banks, actually adopted

Rotan, Mosle & Moreland (Houston). Other governors elected
were John A. Coleman, * Adler,
Coleman & Company; William E.
Hutton, W. E. Hutton & Company;
T. Jerrold Bryce, Clark, Dodge

you

found

as

basis,

a

this

With

successful.

we could then present
recommendations based
experience in comparable

to you our

.

The local picture varied only
slightly.
possible solutions, proposed
60%, of you felt that mutal savproven to improve the position
*n£s banks have difficulties in
mutual savings banks.
finding suitable investments; 40%

affecting the status of the mutual
savings bank system; the second
with
or

of

rir

we

.

.

took

...

mis

V

+

tacx

.

to

n

111 a

f

out

and solutions, recognizing
that your opinions and experience
might be helpful in setting future
causes

patterns

for your action.

As to causes, ycu

decline

in

the

Three-tenths

suitable

30%

—

—

of

you

these difficulties on legal

restrictions;

20%

on

mortgages;

the
10%?

share

of

Other

con-

order

of

fre-

low rates on investimposed bv law on savings

quency—were

mutual savings banks in total sav-

ments

ings, to increased competition and
to the limited geographic areas in

reach"; artificial rates in govern-

which you are permitted to oper-

ment

ate.

£ion

competition
mentioned most frequently were
Federal Savings and Loan Associations, mentioned by almost half
our
respondents; U. S. war and
savings bonds mentioned by 25%?;
commercial banks
by one-sixth;
life insurance by one-sixth; postal
savings by one-eighth.1
Specific

types

of

"municipal

banks;

competition;
0f

suitable

out

bonds
small

of

porpor-

corporates

avail-

able; inertia; much larger volume
of

institutional

and

trust

funds

seeking investment; private lend-

ing by insurance companies; publicity on G.I. and FHA mortgages;
"not trying hard enough for mort-

■

you

new

to

one

of

ALLY do.
gages"; no progressive leadership;
Again, 90%? of you felt that
Your own analysis of your probsavings
and
loan
competition; mutual savings banks should be lem—as revealed by the question5 your anomalous position as banks extended into states where none naire—shows that you are aware
Other
types
of
competition f°r savings but unable to pay de- exist at
present. In suggesting of the tremendous job to be done.
mentioned in order Of frequency posits on demand.
how this should be done, 25% of This, it seems to me can only oe
were open-end investment trusts,
You were not as unanimous in you said by legislation; 25% said done by a broad, cooperative efinvestment trusts, social security, giving
the factors which you by converting savings and loan fort on a v^«nta^ basis if your
and building and loan associations, thought appealed to depositors in associations into mutual savings problems are to be solved
Two-fifths
40%
of
vou
savings accounts.
banks; and 16% said it should be .< Such a cooperative efiort would
blamed the decline on vour lim40% of you rated security as done through the National Asso- add the power of joint action to
ited geographic areas- one-sixth most important; 25%, convenient ciation of Mutual Savings Banks,
the individual action you are allocation; 16%, availability of sav90% of you thought that an all- ready taking.
♦Talk by Mr. Bernays at the Annual
ings.
round thrift program should be
Logically, this effort should oe
Conference of the National Association of
Next in frequency was the rate stressed for all communities which made through your National AsMutual
Savings
Banks,
Atlantic
City,
of interest. This was mentioned as now have mutual savings banks,
soc'ation
of
Mutual
bavings
N. J.f May 9, 1951.
1 In these statistics, percentages quoted
most important by 0%?.
Asked what your own bank has Banks. It seems to me the situado not add up to* 100 per cent, due to
Other factors mentioned as most done along these lines, you said tion requires that your Associathe
fact
that
many
respondents
men¬
tioned more than
important, but with very low fre- you have been relying on adver-'tion be endowed with the manfactor.
so.

'

.

one




Henry Upham Harris, Harris, Upham & Co.; John L. Loeb, Carl M.

Edward

Loeb, Rhoades & Co.;
Hopkinson, Jr., Drexel

Co.

&

(Philadelphia); Edward T. Rotan,

thought dynamic methods for coping with & Company; and Albert P. Everts,j
ac- your problem.
Paine, Webber, Jackson & Curtis

All this is a tribute to your insight and foresight, and an asset
of the greatest importance in any
further steps you may take.
already increased your mortgage
At the same time, /however,
portfolios.
your answers to the questionnaire
90%? of you agreed that you indicate that you are not doing
ought to explore the possibility as much to solve your problem as
of opening new branches where you yourselves recognize NEEDS
the opportunity to do so exists by to be done.
statute. One-fourth of you said
We are all naturally conservayou
had
already
opened new tive at heart, and it often happens
branches. One-sixth—16%—were that there is a considerable gap
in the process of opening new between what we know OUGHT
branches
or
were
planning to to be done and what we ACTUdo

Becker, McDonnell & Company;-

savings banks should

mortgage investaugment earnings, all
you said YES. More
than one-third said that you have

ments
but

causes—in

whether

Asked
mutual

lack-of cumulate
on

servatism.

attributed the

relative

imum premitted by law.

said no.
blamed

veloping a five-year program to
increase earnings,
Others said they were already
paying the highest possible interest rate or that !th^y pay the max-

his wife and four children,
Five new governors were also
elected to the Board: Edward F.

(Boston). Elected Trustees of the
Gratuity Fund were: John Rutherfurd, at Joseph Walker & Sons;
John
K.
Starkweather,
Stark-

weather & Co.; Charles B. Harding, Smith, Barney & Co.
k.
The
Nominating
Committee
elected consists of: Thomas H.
Benton, Benton & Nicholas; Abner
Bregman, at Bear, Stearns & Co.,
Bertram F. Fagenson, Ungerleider & Co.; Charles C. Lee, George
D. B. Bonbright & Co.; John J.
Phelan, Nash & Co.; Robert F.

Whitmer, Jr., Mitchell, Whitmer,
Watts* & Co.; Charles L. Bergmann, R. W. Pressprich & Co.;
E. Jansen Hunt, White, Weld &
Co.; Walter W. Wilson, Morgan,

Stanley & Co.
<

'
_

qq Formed

pauj

Y-The

BROOKLYN N Y

B. Lee Co..has> ®een™
offices at 635 Vermont S
engage in a

tn.

,

_

;

Joe Reznik Opens

.

;

-

securities business.

'
, ■

•

Paul*

.

,

^lk.ls^gf?business fiom of
BuHaing._

_

t

,

t

t „

EVANSVIL

t?pz...

t the Wright

. .

.

....

24

The Commercial and Financial Chronicle

(2064)

NY

Continued

Municipal Bond
Our

Club Gels Slale
The

nominating

committee

Reporter

has presented the

Club's

annual

The government market continues quiet,

with only minor price
The passing of the
call of the 2s due
9/15/51-53, has, however, thrown another ele¬
ment of uncertainty into the money markets.
According to the
testimony last Friday of Federal Reserve Board Chairman Martin,
before the Senate Banking
Committee, the Federal Reserve sup¬
port of Treasury bonds, due to the failure to call the 2s, has been
negligible (less than $10,000,000). This is understandable because

meet¬

fluctuations, at

ing at The
Sleepy Hollow
Country Club
June 15:

on

David

T.

David

ident;

T.

B.

McElroy,

J.

P.

&

Co.,

For the time
not

are

being at least, it

The

in

as

as

far

acquisitions

as

the 3 per

cline and selling on a

*

Jr., Trust

of Michigan Corpora¬
tion; Monroe V. Poole, Geo. B.
Gibbons & Co., Inc.; and William
H. Morton, W. H. Morton & Co.,
Inc., Chairman.

that

dent

the

lawmakers

for

Banking Committee about the Re¬
policy with respect to the government market.
Martin, according to reports, stated the Reserve does
not intend to support prices of government bonds on a
pin-point
peg, which probably means not at any set level.
He added that
the

does

Reserve

intend

to

the

let

market

change, on June 1 will admit Leon
Mayfield, James B. Hart and Dan¬
iel H. Ryan to partnership.
Mr.
Mayfield will make his headquar¬

completly
on its own, with
regard to orderly conditions. If we did that, the
speculators would be in control and not the forces of supply and
demand. So much for this part of the testimony
by Federal Re¬
serve Board Chairman
Martin, and although it makes official the
Reserve's position on the support of government securities prices
there is very little that is really new or unusual in these state¬

ters

ments.

mem¬

bers of the New York Stock Ex¬

the

at

Richmond, Va. office,
Main Street, with which

911 East

he has been connected

as

Mr. Hart and Mr. Ryan

manager.

will

make

their

the New York

headquarters

at

office, 14 Wall St.

■{

Edward J. Walz Opens
MAWR, Pa.—Edward J.

Walz is conducting an investment
business from offices at 572 Lan¬

measure

all of which

light

more

Kenneth G. Colby With
Lamont & Company

.

(Special to The Financial Chronicle)

BOSTON, Mass. — Kenneth G.
Colby has become associated with
Lamont

&

Company,

89

State

Street.
Mr. Colby was formerly
with Shields & Co. and F. L. Put¬
nam

&

would be

used

the Federal Reserve

This

would

on

to combat the

Board

wants

be

one

way

in which

inflation.
make

to

more

STATE

more

While there is

no

carried

be

far.

There

are

levels

where

it

might yet be

have risen enough to still make it a worth-while switch.
in the opinion of many
money market

Inflation,
followers, cannot be success¬

to them.

being carried out, the Federal Reserve Board would not
exactly in a favorable light if it went against the recommenda¬

tions

of

these

two

committees

to

what

should

be

done

about

its

As to where the Treasury stood in the matter of
retiring the 2s
September 1951/53, on the first call date, there has been no
from

advisors

just

that

at

source

all.

as

WHitehall 3-1200

HAncock 6-6463




on

well.

Another shock has
with

BOSTON 9

the

in

is

in

based

be

may

such

large

the

come

to the government securities market

passing of the first call

1951/53 and with it

comes

a

new

date

of

the

2s

pattern of rates.

of

September

The yield

on

by

.

limited

1928-33

the

upon

-

chases

of

Federal

by

regulation.

It

.

stocks

billions

with

the depression/ that
swings of the market so
that time. Under Regula¬

Regulation

loans

Reserve

have

U

Board,

been

war.

bank

much to

so

failures,

depress all

in the early 1930's, have
practically eliminated by the

many

measures

that

taken since 1933 to

buttress the
;

(3)

of
be

so

have

been

strengthen and

banking system.

adopted
a

1930's.

under

it, make less
repetition of a depression

severe

as

The

that

danger

of

the

now

risk.

not

pro-;

a

reduced!

institutional

invest-1

are

goods following

consumer

buying
of

of

spree

the

year.

institutional

again

sought

tered,

provide

a

early

after,

equities,;

and

adminis-*

helpful

supple-

properly " selected
'

the

When
ad-!
investments,

mentary outlet for funds.
Mutual savings banks, like other
financial

institutions,

ask

that

can

right-;

they

receive,
states to invest

authority in all
a part of their
surplus in selected
equities. A classic argument for
the

grant
of
such
statutory
authority by state legislatures is

to be found in the report on

investments

of the

equity

Committee

on

Savings Bank Investments of the

The Full Employment Act

1946, and the policies likely to

likely

on

fully

Commercial

(2)

which did

less

ditional

kept

;

is

activity, and
of

weeks

of the

entirely by setting margin
requirements at 100 per cent, as
was done for a time following the

them

just now, since the un¬
precedented building boom of the;
past
year
provided
an
ample;

the

brokers'

relatively
be eliminated al¬

for

ahead, while savings should,
expand again as people spend

in

and

institutions,»

ments

..

T

other

nounced

supply

made the

tion

need

building

of

the

twenties, followed by forced
selling because of impairment of

wide at

savings;

mutual

supply of mortgages. But there are
indications of a decline.in.

late

margins

of

as

provided!

return

of

'many

pur-

dollars of borrowed money in

of

rate

portfolios

:The

Reserve

frantic

was

investments,
properly •
timed, can add to the;

without material increase in

extreme

as

(1) Margin purchases of stocks
are

other;

from year to year to-,
cushion of protection for

a

banks,

following basic considerations:
*

and.

like

surplus

over-all

part

funds

But,

*

;

selected and

Price

less

periods

pension

for
their
insurance

r

the future.

that fluc¬
stock prices in

common

future

than

been

inflation and the methods of halting it.
It is be¬
lieved the Treasury takes a more moderate stand on the
inflation
and that less drastic
monetary measures would serve the purpose

INCORPORATED

NEW YORK 5

tuations in

i

.

values

Treasury's Position

to

provide

Fluctuations?

.

as

Future

exact¬

in position
to pay an adequate
dividend to depositors and to add

The widespread belief

most

ac¬

Nonetheless, it is believed they
would have gone ahead with the call on
May 15, if they had been
in the driver's seat. It is evident that a
one-year obligation could
have been offered in exchange for the 2s of
1951/53 and there
would most likely have been even a minor
saving in interest
charges. The Treasury, according to those that are supposed to
know, does not share the views of the Federal Reserve Board and

45 Milk Street

About

*

stocks.

more

stability
do life

trusts.

Equity
What

cent of the

common

institutions, they want to realize *
the best rate of return obtainable,
consistent with high standards of
safety and stability, in order to be

boom

1940's.

than

personal

number

a

market

companies,

peak

equalled.

that

15 per

over

portfolio

eliminated

the

small. They can

murmur

Street

of

Bankers Association and the Investment Bankers

of

Broad

decade

past the first call date. Also committees representing the American

Association,

over

were

Federal

calling the 2s.

15

losses

With this idea in the forefront, it is understand¬
able that they would not be averse to
letting the 2s of 9/15/53 go
concern

and

institution
that
its purchases

stocks

,

funds into governments, and:

any
time, •• they
require
a
higher degree of safety, liquidity

spread

including

.

j

cent of

per

at

stock

a

been

per

;

ing deposits subject to withdrawal

a

of

boom

rest

,

Savings banks have

years.

when

reached

yet

on

profitable to sell governments and put the proceeds in non-Treas¬
ury obligations because the rate of return on the latter issues will

SECURITIES

8c Co.

years,

the

doubt about the

too

common

of

the

was

an

have

of

few

a

the

other financial institutions. Hold-;;

re¬

of

net return

a

ing investment requirements than

by
the middle 1930's, and it would
have shown substantial gains in

good features of curtailing the
accessibility to Reserve Bank credit for loaning purposes this may

be

Aubket G. Lanston

not

prices

levels

period,

averages

has

paper

costly.

curtailment

or

program

MUNICIPAL

exception
1928-30

is evident

cording to advices, were in favor of passing up the call of the
September 2s of 1951/53. Since there is a voluntary credit limiting

and

The

accessibility and

risky and

limitation

a

It

With the Federal Reserve Board
evidently very fearful of the
inflation, and wanting to limit, curtail and further restrict credit,
the rate of interest on government
obligations becomes less of a

U. S. TREASURY

low

,

;

yield of 6

a

deposit gain into

period, would have found that its

the subject and may explain in

fully fought by the level of interest rates. If inflation is to be com¬
bated effectively, it is believed that the rate and level of
govern¬
ment spending is the best place to start from,
j

Co., Inc.

stock

the

within

However,

loans would be brought about. With this,
however, comes an in¬
crease in interest
rates, which has been evident throughout the list.

also

that

the

would

Martin, according to testimony before the Committees, is very
much concerned about further inflation and wants not
only the ex¬
tension of existing credit controls but may also ask for new
ones,
that

from

re-

bought, a 314 per cent;
yield could be obtained

not much

institutions

financial

found

price

the passing of the call of the 2s of 9/15/51-53. Chair¬

availability of Reserve Bank credit

Ave.

caster

like

are

new

in¬

-■

of

new money

with

by putting almost 85

rela¬

are

equities with

cent

larger

long-pull

rate

giving

cent,

per

average

re¬

occur/

payments,

•

Committees, throw

these

3.75

if

gains

a

up

when

vestors

that

man

BRYN

building

depression

Board

some

capital

(

this

by putting half of

1

into
government
bonds
yielding almost 2.75 per cent. But

all the

up

be added to

can

unstable,

cover

It does seem, however, as though other remarks
by; Reserve
Chairman Martin, £ before the Senate and House Banking!

a

built

Moreover,

tively
have

go

;

going

the yield on
high, reserves

so

be

can

dividend

and

Martin Seeks More Controls

associate

of

While prices of common stocks,

Board's

neither

into mortgages

fluctuations

Chairman

To Admit Partners

invest¬

cushion to absorb adverse market

Chairman Spence of the House

Abbott, Proclor, Paine

This is sound

stocks is

them

realize

could

It

turn

Because

serves,

Reserve

serve's

-

:

by investing entirely in

against

when realized

has happened to prices of government obligations because Federal
Board
Chairman
Martin
was
questioned recently by

a

a reserve

practice and sound banking

faster.

also giving some attention to what

are

new

reserves

from risk investments gen¬

common

9/15/51-53, the government market is wobbling around, try¬
ing to get its equilibrium after a second body blow. There seems
to be very little doubt but what confidence has been badly shaken
again by the recent action of the monetary authorities, It is evi¬

mutual savings bank
earn 3Y4 per cent on
deposits could hardly earn

Thus,

corporate bonds at current prices. ;

use

future loss.

due

committee is
composed of David H. Callaway,

.

seeking to

desir¬
part of the added in¬

erally to set up

the 2s

given rate of

a

return.

able to

practice.

its heels by the passing of the first call for

quired to realize

-

this much

ment

on

invest¬

a

against losses. It is highly
come

Impaired

of

non-risk

of

smaller proportion
of. risk investments, would be re¬

rise, always
investment.

Establishment

(3)

prospects of controlling inflation are better now than
time since Korea, as contended by Federal Reserve Board
Chairman Martin, is there such need for drastic monetary action?
Nevertheless, it seems as though the government securities market has become one of the pawns in the struggle to combat the
inflationary forces.

nominating

Abbott, Proctor & Paine,

sound principle of

an

proportion
ments, and

cent ratio. It will be seen
means buying on a de¬

this

that

If the

Set back

ma¬

terially more than 3 per cent, sales
of. stocks will .be made to restore

at any

three years.

worth

are

of return pro¬
stocks, in fact,

permit a reduction, rather
increase, in the over-all
risk incurred in its portfolio by
an institutional investor. A higher

When the market rises so that the

stocks

rate

common

may

than

per

common

high

vided by

portfolio is worth less
cent of assets, ad¬
shares will be bought.

3

ditional

a

Market Confidence

The

that the com¬

so

stock

mon

than

though the Central Banks

going to have too much competition

declines

Banks

thus in far better po¬

are

sition to withstand adversity.

the

When

stocks.

common

market

of long bonds are concerned.

Corp., for members of the Board
ser.ve

seems

They

provide that a savings bank would
invest 3 per cent of its resources

conditions are affecting these securities to some extent.
Federal, it should be noted, however, is evidently ready to supply
hid-and-seek support to the market, in order to keep it orderly.

Company,
Secretary; John W. de Miihau,
Chase National Bank, Treasurer;
and
Thomas F. Adams, Adams,
McEntee & Co.; and E. Norman
Peterson,
Equitable
Securities
of Governors to

the lows of the year.

near

money

Morgan

Incor¬
porated, VicePresident;
J.
Bradley
Green, Guar¬
anty Trust

Miralia

or

reports from government circles indicate volume has been very
light. There are nonetheless practically no buyers of size around
for government obligations, aside from the shorts, although tight

Miralia, Pres¬

David

Foi Savings

following

the

at

6

page

By JOHN T. CHIPPENDALE, JR.

slate of officers to be voted upon

Thursday, May 17, 1951

.

.

Equity Investments

of

The Municipal Bond Club of New
York

Governments

on

from

:

early

is not

so

much periodic

deflation, feared in
the past, but chronic inflation. "
(4) American corporations have
greatly added to their strength in

Savings Banks Association of the'.
State of New York.

Once

given

*

this

statutory
authority, each savings bank can
decide

for

itself

wishes to invest

if
a

and

when

part of its

it

sur¬

plus in selected equities, to take
advantage of the higher yields and'
benefits
of
large
retained
earnings that equities offer.

the

the past two decades by accumu¬

lating

very

large liquid

reserves

in the shape of cash and govern¬

Pennaluna Partners

deliberate type of uncertainty has been
injected into the money

WALLACE,.. Idaho—B. A. Har¬
ment
securities, by reinvesting
rison, H. F. Magnuson, C. W. Spek-'
earnings
on
an
unprecedented
ker, and Mary J. Semenza arescale, and by refraining from ex¬ now partners in the firm of Pen¬

markets, by Federal, in

panding debt to

all
to

Treasury issues,
be

save for the partiaiiy-exempts, will now have
figured to maturity instead of the first call date. Another

an

attempt to combat the forces of inflation.

any

large extent.

naluna &

Co., 413 Sixth Street. ■**

Volume 173

:

Number 5012

Continued

from

.

.

The Commercial and Financial Chronicle

.

riod

3

page

(2065)

of

25

inflating costs. The bell
procurement agencies

A

tolls for the

of government,

There'll Be Some
conversion

o£

bonds

income

took place. •
Here

two

tagged as a toss-up in
have really impor¬

currently
the

share; KCL has paid
$4.50 for the last two years. AT
may have a tough time duplicat¬
ing
last
years
earnings; KCL

thumbnail
shares,

our

that

suggests

will

the market

fun to watch

be

GFO

between

race

is

It

differences.

submerged

FN.

and

rail-bird, I make GFO the fa¬
vorite— and
a
year
hence my
hunch guess would be that they'd
be at least five points apart.
(A

doesn't

giraffe

do

better

a-

is

every

day.

as

fighting for

pensions.

infection

of

organism,

face this
economic

We

entire

the

through

the

a

me

that

on

cur¬

rent

appraisal a sale of AT and
purchase of KCL—even Stephen

—would

been

condition.

robust

He

is

meet his commitments

able

to

if only he

get into his stride.

can

annoying

of

habit

stocks

boosting

not

never

die

but

commodities

sometimes

reason¬

they fade pretty badly!
;.
and
You have today been offered a

,

further

in

So

*.

developing

my

just been roughed out opens up of restoring and main¬
have -theA claymodel, not taining balanced budgets — and
ing $4 today (earning $7) and the bronze bust! But in each case even of repaying debt, unless the
with a record of some dividend some logic has been marshalled calamity of total war overtakes us.
in each year since 1905.
But we to justify the exchanges; and you The dangers of total war will de¬
all know the dollar is shrinking, may
find
some
fascination in crease as we build toward the full
and
static investments will not watching how they all work out. scope
of our potential growth.
Government
maintain purchasing
obligations can be
power.
So There's a matinee every day!

Jt

little tough saying

may,, seem ,a

good-bye to this old standby, pay-*,

about

to

terms

we

cast

we

market
income

on

to

on

It

64?

at

seems

although

could

hardly

more

diverse

I

fit

to

•

must

course,

—^you

come

upon

values

than

ne\lt

that the

time you are
list, you may ing the nation's
ask yourself "Is X stock the best move resolutely
value
of securities
in its price convertible gold

you;

over

your

is

range?" If the answer is no, then
you too may agree "There'll be
some
changes made."

you

two
KCL

both

Thus

third of total Reserve Bank

a

assets

earning

but have

1929,

in

been consistently above 90% since

mid-thirties.

.the

of

form
is

<1944

circulating

our

Since

between

40 and 60%

of the

behind

collateral

government debt.
i

commercial

now

our

debt

solid

a

gold

.

interest

Other

in September

purchasing

power

without let

or

insurance

life

re¬

Co.'s

States govern¬

and United

per

basis

capita

trial

actual

tend

earnings

The prime

The increase in

The longest

The purpose

of these actions of the Federal Reserve was to

;

make the securities more attractive as investments for individuals
and nonbank

investors, thus preventing their sale to the Federal
System which would provide additional bank reserves to
be used for further credit expansion.
These efforts to increase the cost of money and reduce its

Reserve

still being exerted. As the armament program.,
intensity, it is expected that there will be a further
buildup of inflationary pressures. As a result there is likely to be
additional credit restrictions imposed as well as greater voluntary
restraint adopted by lending institutions.
One of the most important factors in this connection affecting
banks, is the proposal for higher reserve requirements. The De¬
fense Production Act of 1950 will expire on June 30. There is little
are

in

question that it will be extended, although there are likely to be
important changes.
The authority for higher bank reserves, either in the form of
cash or a special reserve, is one of the proposals which seems
likely to be approved. The monetary authorities as well as the
some

core

can pro¬
hindrance.

production officials of the government have indicated their ap¬
proval of such a program. For this reason it seems likely that
increased authority
forthcoming.

and

in

form

some

over

bank

will be

reserves

v

Another development likely to result from present policies and
economic conditions is a further adjustment in some of the basic
interest rates.

Within the past week a number of
announced increases in the

of carrying securities. There have also been indications
possibly to 2.75%, may be made in the prime

purpose

that another change,

commercial loan rate.
With

the

»

maintained at a high rate, the
inflationary pres¬
it is likely that this adjustment of

demand for money

volume of loanable funds being restricted, and

present in the economy,

sures

interest rates will continue.

insti¬

tutional

has

become

na¬

tional

With

With Security Assoc.

loan

business

.

the New York banks have

rates for call loans and loans for the

re¬

(Special to The Financial Chronicle)

WINTER

in

PARK, Fla.
has

Morrison

J.

been

—

BOSTON,

Thomas

added

to

H.

R.

Johnson

(Special to The Financial Chronicle)

v.

McCarthy

Mass.

has

—

r

Thomas F.

affiliated

become

_

Associates,
137-139 East New England Ave.

the

business

cf

pattern.

1951.

can

thelhis

exaggerate

to

similar

a

increased from 2.00% to 2.25%

yield over the year was consider¬
ineligible, which yielded around 2.40% in June,
1950, declined to where the yield had increased to 2.66% by May 1,

able.

indus¬

ligious

have de¬

by more than a quarter in

we

was

of 1950 and to 2.50% in December.

level in March.

.

ner

followed

Long-term gov¬
ernment bonds which had been protected at around par during the
initial phase of the change were allowed to decline below that

the monetization
the loss in the dol¬

ceed

rates

commercial rate in New York

money,
and

lar's

For July of a
bill issues was 1.172%, The

year ago, the rate on new Treasury
rate on the latest issue was 1.626%

by¬

metal

requirements of member banks.

place is evident from the rates on Treasury bills.

fully
which
a

reserve

This pressure for higher rates continued throughout 1950 and
into the current year. An indication of the change which has taken

pride ourselves on the

purchasing
power
since
1945, after deducting the load of
about .rising consumer debt. In like man-

compared

as

standard
and

condition

a

designed to restrict credit expansion which were
included raising the discount rate

increasing the

and

Loewi & Go.

actual

earning assets of

banks,

a

clined

been

,

,

debt is

Government

half of the total

has

them

measures

taken by the Federal Reserve

MILWAUKEE, Wis. — Loewi &
Co., 225 East Mason Street, has
expanded its institutional and in-

securities,, which, however,

ment
on

we

shares,

serves

currency

notes.

Reserve

Federal

loan

principal

The

Other

dustrial loan department, J. Vicgreat build-up in Americans' liq- tor Loewi,;/,
uid assets, as represented in cur"resident, n^s i
rency, bank deposits, savings and
announced.
Loewi
&;
4

government paper. U. S. Govern¬
ment
securities represented less
than

The Federal Reserve in the middle of last year began to press'
higher short-term rates by reducing the price or increasing the
discount at which it would market bills, notes and certificates.

...

by cheapening money.

created

a

decade, ;

general!

,

stiength and progwhich are almost inevitably

ress

na¬

toward

a

for

Fred Kane Joins

sions of added

with

banks

commercial

tion's

the

We

money.

over

of restricting loan expansion through

program

credit policies began last summer and is still going on.

product of these time-tested poli¬
cies
of
national
solvency;
for

of

showing the loading of

Federal Reserve and

the

This

increases

Rising Prices snd Costs—Real
Causes and Consequences
of figures

earning assets. Of possibly greater *
significance from the longer term point of view, and as part of;
the program of general credit restraint, is the fact that the Fed-:
eral Reserve has introduced a measure of flexibility into the inter¬

availability

10

page

better rate of return from their

individual and institu.ional savers,
thus no longer continuously dilut¬

for

from

,

lifted from the banks and held by

without

Continued

banking field. These changes, in the interest ra.te
are the result of changes in the
economy and the neces¬
sity on the part of the monetary authorities to restrict credit!
expansion.
.
These developments are of primary importance in banking 7
operations. The higher interest rates enable the banks to obtain a f
structure

this comr

it is hoped that

Also

per¬

say

the

in

occur

parison method may catch on with

County Land

about Kern

fectly,

of

looking

■

How
Co.

rosier

a

future.
'

,

even

maintain

can

latch

and

if

see

This Week—Bank Stocks

able

necessities of food, clothing
shelter, and thus encourage
thrift as they discourage spending.
theory of the necessity of occa¬ series of novel comparisons offer¬
As we tighten our belts on per¬
sional change—of switching to a ing the general theory that stocks
better horse—I. have
nominated equal in price today are by no sonal consumption, and cut to the
for
bone all unessential
disposal
and
replacement means equal in value, or in future proverbial
American Tobacco at around 64. performance. The facts given have, governmental outlays, the prospect
sales.

JOHNSON

est rate structure that has not been in evidence for

the

beyond

E.

II.

The general firming of interest rates which has taken place
within the past year is one of the most significant developments to

Public and family budgets must

not be

madnegs. It's al¬ be
rigorously controlled. As taxes
nursing along is that some of the ways hard to give up a standard
increase they should make less at¬
tobacco stocks haven't any par¬ old favorite, a steady old dividend
tractive all non-essential business
ticular place to go. A pretty sat¬ payer. Yet when you recall Cen¬
expenditures;
they
should
be
urated market, a projection bor¬ tral of N. J. 22 short years ago
based upon earnings realistically
dering on the static, and a vulner¬ —a king-size blue chip selling
calculated. They should take the
able situation
tax-wise.
It just near 300—and look at it around
form of general! national taxes on
seems
that every time Congress 21 today without benefit of divi¬
retail transactions, as well as per¬
looks around for more taxes, the dend for two decades, your stub¬
sonal and corporate income levies
first thing they think of is an¬ bornness wilts a little. You rec¬
and excise charges.
These retail
other penny a pack on cigarettes. ognize the necessity for change,
taxes
should be applied on ail
And that kind of a tax has an as occasion and logic dictates. Old
theory

pet

By

re¬

,

So it occurs to

job

doing.)

I've

KCL

loan depositors,

and

tirement

poisoning
at its source of the dollar, the peo¬
The oil industry ple's
medium of exchange and
they come, and store of value. This is our fifth

shares.

his neck out than I'm

Another

dynamic

as

savings

and for workmen

bigger oil producer column, our ever-present domes¬
Almost 1,900,000 acres tic enemy.
owned, and only a little fraction
To diagnose the ill is in this
of it bringing in at the annual case to
prescribe the treatment.
rate of $6.50 a share on 2,000,000 The
patient fortunately is still in

As

a

of sticking

a

should do better.

market,

tant

and

But let's look closer. AT

$4

pays

again

sketch

community, as well as for the
insurance holder, the savings bank

ness

Changes Made

and AT.

ever

Bank and Insurance Stocks

for the whole busi¬

broad*,
approximately : three-quar¬ porations, because of the inclusion r*afd
y??"
height of the last war, of fortuitous inventory profits and/.,?iui?£
one-third in, the mid-thirties, and the
inadequacy of depreciation ?ani5f- on
handling this
10% in 1920.
Government secu¬ allowances charged to expenses in
type of busiof
rities owned by commercial banks times
soaring
material and

staff

of

Security

H.

with

R.

State

Street.

Johnson

&

Co.,

70

with

ters at the

'were

,.

slightly

twice

over

construction costs.

their

So, as well, we

fancy ourselves rich in dividends,
more
than five times now; and whose total purchasing power, in
government securities owned by goods and services, nevertheless,
capita]

accounts in 1938 and are

"Reserve Banks
20

the

times

are now more

capital

dhe Reserve Banks

than

of

accounts

the

$80 billion in government debt,
one

third of

standing.

the

,

Enough

has

been

great

to

in

in

!

said

of

source

or

total out¬

fhe

1950, despite
capitalization,

of

.to bear in mind the* passing iliii-




personal income for the

total income in 1929-1930 to little

half that Proportion
1949-1950.

■

.-

In

storm

-

.t

,v

jess. The industrial and

institu-

l10r\ali°tn a^tieJ

u*

headed by Fred E. Kane, who
e^J ? ? T" -?0?1
Northwestern Mutual Life Insurance Company. Mr. Kane ha
been associated with Northwest-

Kahle
Kahle

Central

Mo.— George

Now F. B. McMahon Co.
DALLAS, Tex.—The firm name
Almon
and
McMahon, Inc.,
Mercantile
Securities
Building

of

has

changed

been

to

Frank

McMahon & Co.

Avenue.

+

^[lhM"hantod

ana, nas J311";®0

e,rn. SIYC®

their

institutional

loans

the

for

#

'

(special to the financial chronicle)
—

Branches in India, Burma,

lOtR ^Street, members of
and

changes.

Midwest

He

years

Stock

West

Nfw
Ex-

formerly for
with Harris, Upham
was

Kerlcho, Kenya,
and

John J.

111

Lathsaw,

STOCKS

26, Bishopsgate,
London, E. C.

Office:

Colony,

KANSAS CITY, Mo.

York

INSURANCE

Kenya Colony and Uganda

Head

0*1

&

and

of INDIA. LIMITED

Joins Uhlmann & Latshaw

Uhlmann

BANK

NATIONAL BANK
Bankers to the Government in

past four years.

is no. adequate marey
shelter for anyone in a pe- & Co.

short, there

H.
has joined the staff of A.
and Company, 50 South

CLAYTON,

WsStrandberg has joined the staff of
.

No "Storm Shelter" Against

-

(Special to Th» Financial Chronicle)

as a

people of the United states, dividends fell from about < % of their

of con¬
verting liabilities into seeming as¬
sets by putting debt into circular
tion as purchasing power, without
-corresponding
saving
and pro¬
It would also be timely

20

the

activity, and the encouraging

mess

dangerous .consequences

duction.

rise

any

1950 over gains made by labor; while

ing system, owned in
-about

if

thp substantial
substantial increment
increment in
in busi
husithe

than nine times in 1938 and equal

'to their capital in 1920. The bank¬

little

from 1930

years
J

against less

as

but

rose -

With A. Kahle Co.
E. Kane

Fred

Ceylon, Kenya

and Aden

Zanzibar

Laird, Bissell & Meeds
Members New

Subscribed Capital

Paid-up
Reserve

Capital
Fund

1

£4,000,000

£2,000,000
—£2,500,000

conducts every description of
tanking and exchange business

The Bank

Trusteeships and Executorships
also undertaken

Members

120

York Stock Exchange

New York Curb

Exchange

BROADWAY, NEW YORK 5,

N. Y.

Telephone: BArclay 7-3500
Bell

Teletype—NY

(L. A. Gibbs, Manager

1-1248-49

Trading Dept.)

Specialists in Bank Stocks

B.

26

(2066)

The Commercial and Financial Chronicle

Thursday, May 17, 1951

,

.

.

have taxes greatly increased, and

Securities
i

Salesma
By JOHN DUTTON

Guess Who?

i

they were willing to pay
They also expected it to be

THEN and NOW
If You Can't Turn to

prospect
is

by

Program Sale

primarily

rather

than

where

you

qualified

the

investor

speculator

a

for

in

will

this

a time and place
have his uninter¬

can

three?"

all

He

an

He'll

begin to

and

that

start

tell

stock.

If

rupted attention, you are ready to
begin your sale. But before you

the

start to sell

entire situation and you

ment"

a

"program of invest¬
do

must

you

thing.

to

one

talk.

about

will

will make

You

Follows

can't

anything
Unless

be

of

luke-warm

make

and

to

years,

he

about

ring true.
that over a

well

a

How

planned

of investments, designed

program

he

—

does

he

ated

-**

else

that

believe

this

it.

is

Personally I

so.

But

few

started

of

center of the

made

and at last he has

a

of

go

such

plan.

a

You

in

tates, etc., to guide you—they use
a
planned program.
They do it

securities, he wants to find out how

the long-pull way. They diversify,

him

and keep balanced between stable
assets
such
as
cash, short-term

to

bonds, high-grade preferreds, and
common stocks.
They adjust these
ratios in keeping with the business
and financial outlook.

investments

some

turn out

the

qf

They make

too

that

don't

well, but they look at

so

overall

results

his

know

can

must

believe.

But you first

'

explain

—

When

Mr.

Investor, it is just

nails to

It

me.

difference to

million,

doesn't
if

me

a

so

bank,
many

make any
man

has

a

hundred dollars, but

or a

understand

can

how

it

all

prospect

assume

you

there

are

your

the attitude

that

help him.

And

to

is

am

we

get

you

know.

But

don't try to
Let him have

anything.

the ball.

that

what

another

some

is

man's

of the great¬

to

make

a

it

right stocks
man

both

—

right and then

you will
Tell this to him

words

own

for

lieve

the

wrong

go of it."

your

care

by

the

mine.

And

if

don't

you

you

be¬

can

too, because it is the sad

fact

Put him

your

him that he

discuss

you

Be

casual

be

can

will

about

sure

be

it

and

be

brief.

Then ask if you might ask him
few questions.

gates.

Next week in

anything

confidential.

a

for

If it wasn't

other firm

some

his associates in
or

on

a

about

will

his

affairs

but

you

guide

E.

Baron has become affiliated
with
The

First

Lincoln,

Trust

10th

&

Company
O

of

Street.

you

Start out, "Mr. In¬
have mentioned that

you own some

securities;- just what

do you want the stocks and
bonds

you have now to do for you?

Are

Sweet

is

now

associated

with

Mansfield & Co., 49 Pearl Street.

To Western Markets
SPOKANE

or

of

tion

well

are

•

DENVER

in

SALT

•

LAKE

CITY

ESTABLISHED 1915
other

York

Stock

Exchange
Principal Exchanges

NEW YORK
4, N. Y.

Tel.: WHitehall
3-6700




carried

Teletype NY 1-1856

re¬

the

accom¬

amendment

the

System.

expressed

the

in

tegrity
um

provide for the establish¬
Federal

of

furnish

afford

Reserve

elastic

an

of

means

Banks,

currency,

to

rediscounting

and

attempts
the

to

the

circulating

or impaired. Even
efforts of the System

though
to

ac¬

have

purposes

seriously

ready

medi¬

country should be de¬

stroyed

al¬

threatened

the

solvency of our currency and have
brought
about
an
incipient
"flight" from money into mate¬
would

to

of

of the

rial

of the Federal Reserve
wnich reads as follows: "An

Act

be

never

things,

I

claim

doubt if anyone
they have pre¬

that

"inflation"

vented

created

or

"stable values," although we have
had
"high
employment
and
a

rising

level

of

consumption."

commercial

These

more

always present during the earlier
stages of currency inflation, but

paper, to establish a
effective
supervision
of

banking
and

in

for

the
other

United

States,

s."
Woodrow
Wilson, Carter Glass,
and the political leaders of both
parties of that period were sound
money

full

purpose

who believed in the
standard and the full

men

last

cannot

are

be

for the
the

achievements

two

permanently sustained
very sufficient reason that

indefinite

inflation

continuance
the

of

mately brings a
confidence

of

the

ulti¬

currency

in

book

We

discuss.

to

are

faced

System, Its Purposes and with--a condition, and I am ex¬
Functions."
The first paragraph pected
to
express
my
opinion
of the first chapter reads as fol¬ with
regard to what should be
lows:

"On

December

13,

1913,

President Woodrow Wilson signed
the Federal Reserve Act estab¬

give

by

its

founders

were

to

the

rency,

country an elastic cur¬
to provide facilities for dis¬

counting commercial

paper, and to
improve the supervision of bank¬
ing. Over the years, the System

developed

a

broader objective,

done

it.

about

Issuing

Federal

on

As

I

Federal

it,

to

Notes

Act

in

1932

by

the

Federal

Reserve

issue

Federal

Reserve

I.

with

tions

as

government

collateral

viously required.

obliga¬

instead

member bank rediscounts

as

of
pre¬

(This is basic,

but time does not permit its fur¬

sustained

discussion here.)
Then, in
1933, we went off the gold stand¬
ard, repudiated our currency, re¬

values and

duced the

creating conditions favorable to

high employment, stable
a
rising level of con¬
sumption."
It is my belief that
newly

conceived

purposes

ther

lar

gold content of the dol¬
adopted an irredeemable

and

currency

as

exchange.

our

Even

System could easily lead to
the adoption of policies incompat¬

along

better

ible

been

expected

with

Central

the

sound

theory

of

Banking.

It is all very well to try

World

faced

"to

pre¬

vent inflations and to do its share

in

War

with

ity to the

creating conditions favorable to
sustained high employment, stable

parent

values, and

country

a

rising level of

con¬

legal medium of
at

that,

got
have

we

than might
until the Second
and

came

we

March, 1942,
adopted,

that

World

War

outline

an

I

and

in

of

the

cannot

re¬

train from quoting
'from
I

the

said:

the

a paragraph
in reply.
feeling is that
which is being pursued

letter

"My

course

result

to

loss

mate

wrote

I

own

fail

cannot

in

ulti¬

an

confidence

of

in

the

currency, and wild inflation here.
I realize that every effort will be
made
vent

by legislative edict to pre¬

change in the price struc¬

a

ture, but the pressure will be en¬

tirely too great to be permanently
successful.
It is my idea that, if
to successfully

are

we

effort,

war

idea
and

of

fixed

a

of

rate

interest,

further must avoid the

we

in

bonds

finance the

must give up the

we

cumulation

mercial

of

hands

the

and

more

the

of

ac¬

more

com¬

banks."

Growth

effort.

the

It

people

generally

Bank

of

Holdings of

Government Debt
This

discussion

intended to
censure

what

has

is

certainly not

degree of
fault-finding
with

convey any

or

Mistakes

in

happened
have

been

the

made,

past.
since

it is human to err, but I have no

feeling

that those in authority
charged with the responsibil¬
ity of making the decisions were
not actuated by the highest mo¬
tives, and I am fully aware that

and

they felt (and may still feel) that
decision

under

sary

stances

less,
for

was

wise and

the

exigent

neces¬

circum¬

then

existing. Neverthe¬
decision is responsible

that
the

fact

over

that

when

Dec.

the

war

31,

1945, the
Federal Reserve System had pur¬
on

chased
ment

$21,777 million govern¬
securities, thus creating (by
a
book
entry)
member

purely
bank

of a corresponding
bringing total hold¬

reserves

amount

ings

and

to

amount

million.

$24,262

The

of Federal Reserve hold¬

ings has varied from that amount
downward

to

low

of

$17,154
1949, but
has risen by net purchases since
million

of

$5,932

lion

on

The

a

in, September,

that date

of

other activ¬

every

war

after

plan

were

the stern necessity

subordinating

bringing about the
inflations
in

countries

One of my friends sent me,

was

notes

mechanism

monetary

those

the

the

amended

we

Reserve

authorizing
Banks

Reserve

Bond Collateral

see

redis¬

Federal

to

The

complete loss of

ment, but I must not completely
ignore the subject which I was
invited

France in

great

its

future purchas¬
redemption of every promise of ing power and, in turn, a com¬
the government. The present pur¬ plete collapse of the economy.
I
could
continue at consider¬
poses as interpreted by the Fed¬
eral Reserve Board are so differ¬ able length a discussion of cur¬
ent
as
to
be worthy of special rency and Central Bank manage¬

gold

bank

member

Notes.

employed is essentially the same
as
that
employed in Germany

point where the solvency and in¬

heading

in

i. A. HOGLE & CO.
and

should

im¬
underly¬ complish those

of the

50 BROADWAY

such

Act,

these

Membeis New

sumption,"'* '.but

the

erroneous

purposes

creation

the

up

namely, to help prevent inflations
and deflations, and to do its share

FOR BROKERS AND
DEALERS
•

grown

The purposes of the Congress and
the Woodrow Wilson Administra¬

ceived

Conn.—Henry E.

Prompt Wire Service

ANGELES

entirely

pression of the

has

LOS

seems

country in the last 15

20 years an

ing

has

lishing the Federal Reserve Sys¬
tem. Its original purposes as con¬

With Mansfield Co.
HARTFORB,

been

have

collateral

as

Reserve

Reserve

ing questions.
vestor,

this

It

country.

there

are best expressed in
issued by the Board in
1947 under the title "The Federal

LINCOLN, Neb.—Lawrence

was

But you guide the talk
by ask¬

in

the

(Special to The Financial Chronicle)

business, his wife,

his golf partner. Turn the tables
him, let him talk for a change.

own

our

may

we

notice, and

With First Trust

sales¬

it

me

if

of

counts

,

warding off people who were try¬
ing to sell him, convince him, or
man

we

develop this sale farther. Remem¬
ber, it is his show. Get him to talk

Open up the flood him by subtle questioning.
long he has been

All day

out-talk him.

article 3

be attained,

that

to

to

caused

at ease.
that too many people never
Settle
chair and after you have
proper
investment
advice
have completed a few questions only because their advisor
didn't
about general topics, his
home, his know their needs and their situa¬
golf game, or what have you, tell tion.

back in

tem of

basic requirements

to

are

were

going

in

him

is

other.

they

ment

vincing restraint but he
sell

feast

each

of the

est investment mistakes ever made

have to be

that

know

In fact

If you know your
business you will speak with con¬
will know

to

understand

can

man's

famine.

sit down with

you

Treasury, the Federal
Reserve, and a Stable Currency
consider the Federal Reserve Sys¬

like the teller in the

am

You

Stage

believe that too.

'1

things

tell

want

you

it

without

instead

The

"I

one

Set the
.

And

reason

these

that
some

impor¬
going to be to you,
going to help you do a
then convince others that
they better investment job, that first of

too should follow it.

•

take.

can

the

him

never

as a

(Glass-Stegall
Act)
permitting
of government securities

tain

many years.

and

he

is

extent

sell

to

were

deposit

that it isn't because you are curi¬
ous or want to
pry into his affairs.

you

a

risk

the

to

he starts

that

period
If you can do this tant
believe in-such a plan, you if I
over

welfare

much

plished

14

page

interested

man

have the insurance companies, in¬
vestment funds, colleges, large es¬

before

from

securities
deposits built

bank

base

a

could

nor

Continued

pur¬

possibility
by those responsible for the pas¬
sage of the Federal Reserve Act,

stage, it is his show;
a

such

cre¬

Reserve

government

member

on

reserves

Federal

motely considered

;<a)

you

you will have to
sell yourself on it. You can read
the results of others who have

that

group

by

and

samples.

After you get him
will have no trouble
obtaining the answers. It is a new
approach to him. He is now the
a

re¬

which member banks
and
actually did, build

chases

just

are

by

upon

—

These

by
consisted
the Federal

and

System of additional

this

to

in—how much income does he

how is his health?

accom¬

deposit structures.
It is
superfluous for me to point out

have

how
supervised thereafter, is just about have from his securities
the best and only assurance of much from other sources—would
it stop if he were to become illsuccess
for the
average
person,

don't try to sell anyone a program.
I can't convince you or
anyone

be

understood

fantastic

Your Prospect

he

well

authority,

Reserve
serves

dependents—what business is

any

to fit the investor, and constantly

is

old

could

this

creation

would,

What to Ask

might be necessary
course,
the only

Of

was

in

the

of

along.

goes

finance

to

a

it

that

those

pencil and paper
pertinent facts as

and write down

much

plished

little later

a

undertake

on

borrow.

way

it

believe

you

period

Knowledge

question

war

how

come

note to

a

Association

2Vz% maximum
long-term rate, without regard to
our

Get out your

on.

Conviction

the

of

Bankers

should

we

ask
know

may
you

Tell him to

moment.

you

the

answer

' '

officials

and, after much deliberatidn,
decided that, since England was
financing her war on a 2% basis,

■

attitude yourself.

gov!

buy

met

real diagnosis of his

a

a

and

go on

proper

bor-

above

bonds-

American

tell him that you want

answers

give him

to that in

more

You must have the

to

you

He

few questions.

you a

of money

sums

Treasury
Department, the Federal Reserve
Board, and representatives of the

you
—in

type
the

have made

you

large

The

interested mostly in income
capital gain—or always con¬
sidering safety; are you interested

your

determining that he

quick turn, and
appointment at

row

them.
neces¬

government to

29

page

(Article 2)
have

you

for the

ernment

The

After

sary

(19 peace-time months)
million to $23,086 mil¬

April II, 1951.

consolidated

for

was

ap¬

banks

of

the

shows total deposits and currency

expected

to

on

and

.

statement

Dec. 31,

the

monetary

system

1945, of $180,806 mil-

I73"f dumber 5012

Volume

.

.

.

The Commercial and Financial Chronicle

.lion, and at the end of December, Federal
Reserve
System
buy
1950,
shows
$184,500
million, bonds and thus bring about the
From these figures it is, of course, monetization of the deficit as was
; apparent
that Federal Reserve done during the war. Nor should
policy is responsible for main- we ever hear a complaint from the
taining
the
monetary
inflation Board because member banks ex.which occurred during the war at tend
credit and builddeposit

optimistic point of view, a completely unknown quantity.

the

same

vailed

at

high

level

war's

end,

t

High of $278,682 million on Dec.
1945, to $256,731 million on
31,
1950.
Meanwhile, the
purchasing power of the mone-

Dec-

tary unit, as shown by the index
Of wholesale prices published by
thfe United States Department of

;
•

Lqbor, has fallen to 42% of what

-

it

-

in

was

the

before

1939

war

all know that
impression that
above policy was largely due

•

the

permanent

life,

of

way

-

Northern Pacific

they

or

Northern Pacific stock has been

borrow

it

rency.

flection of substantially improved

And

for

gg

commercial

the

operations.

terest

those

as

war,

dent^and auton<omoFebave no excess reserves on which
^
*° build inflated deposits, and
th .
a*tiorfs tL independent COuld only increase their loans or
FedLal Reserve BoaM unSuls investments, and thereby deposits,
tionablv has the w|i
to by
rediscounts which could> in

Federal

Reserve

tremendous reserves
of

•

System

of

the hands

in

However,
over now
for

member banks.

the

the

-

w

has

war

been

Rate

!

Undoubtedly there should be

a

powers

reap substantial profits
from oil and gas operations. Simi-

lar

hopes

flurries
but

the

Department, but both should recognize the impossibility of main-

their own free-will decisions, but
should alter their policy to the

taining

mercial banks for the results of

any
j

-

wishes of the

in

ment

of

branch

ecutive

respect

govern-

and

the

mainte-

Treasury

receive

Reserve

suggestions

recommendations

the

from

Department,

primary from such

is
to
maintain and
preserve
the- integrity of
the
monetary unit established by law,
which is a dollar of 13.714 gains
obligation

-

Federal

the

should

the

to

ernment securities. Their
•

that
Board

Patrick

Sheedy With
Edgerton, Wykoff Co.

that

and

of interest rates on gov- they should further receive,<kdvice

nance

„

Treasury or

other department of the ex-

of pure

gold. The System is, how-

ever, responsible to Congress, and
it must be admitted that some of

the

acts

had

an

of

Congress

have

may

influence in diverting the

thoughts of the managers of the

bodies

Federal

the

as

Advisory Council, the representa-

There

-

others, such as the Glass-Stegall
Act
authorizing the deposit of

T?

purpose

securities as collatFederal Reserve Notes,

government
for

eral

Federal

Independent?

Reserve

Congress

However,

has

the

of

dependence

J!
direction

other

both
DOtn

passed
passed

legislation
legisiauon

would

which

kind

hand

other

yn me omer naiiu,
significantly, Congress

most
not
not

the

On

Currencv
uurrency.

has
nas

Comptroller of the

the

and

and

Board

the

on

Secretary
of
oetieidiy
ui the
uie Treasxieci&

the
int

ury

eliminating

by

membership

from

and

System,

the

of
ui

any
aiij

the

relieve

sponsibility
the

fore,

nendent

Xn
the

C00Der.

of

as

American

tion,

in

a

of
01

to

the

save

legallv

entitv

fullv

em-

to make Us own decisions and still responsible for the

in

nniniftn

n

support 01 tne market for
mjnirmjm

_nrnp

?■
^
tl0n of

a

firm policy
redne-

annual

1

.

the amount of government

abandonment

of

nolirv

the

an

of

the

of, the

integrity of

in-

aDaPaonJ"ent ot tne PO«cy ot in-

currency.

should

We

hear

a

a defifor a return to the

program

full gold standard.

.

never

payment Act of 1946," and
nite

com-

plaint from the Board to the effect
-^that the System was coerced or

<

..

.

As

a

matter of fact, in the long

'

compelled to buy $24 billion7worth huh the newly conceived purposes
of- government bonds to support of the System, "prevention of inthe deficit policy of the govern^ flation
and
deflation,
creating
ment.

-

The-Board

the bonds'to accomplish that pur-

tion," will be attained much more

It is true* that they were ad7
vised, and possibly importuned,

surely

pose.

the

decision,

own.

will

Now

we

as

was
are

and

employment,

stable

high

responsibility,

a

rising , level

told that there

be another

tainly this should not
automatic- .requirement

carry

that




the
the

and

economy,

of

past
and

♦

£ J?®

three

one

-

operated

on

an

sound

and

results, which

gas

and

revenue

leases,

are

not

They are credited direct¬
ly to surplus. Last year net cash
receipts
from
these
sources
amounted to $1,786,127.
Of this,
$551,966 represented revenue from
oil
and
gas
leases.
Obviously,
there has not been anything really
exciting in the Northern Pacific

Patrick

H.

Sheedy

oil

half

HpvwooH

r^nrup

oil

-accourit.

Canada

of

picture to date.

Nevertheless,

Arlrls Two

value

1,

recent

developments in the

strong possibility that

a

.

-

annual $2.00 rate

tablished, at

an

payable

cents quarterly,
price levels

50

at
a

the
af¬
return of approxi¬

recent

current

of

World

War

II

and

better

1943
when $10.29 a share was realized.
Moreover, these reported earnings
by no means tell the full story.
For one thing, as mentioned above,

With Dean Witter
chronicle)

on

Mr.

is

McConnell
sales

manager

of the

than

Exchange.

Ex¬

changes
June

any

war

year

F.

which

than

by

canan

municipal bond departmer.;

Walsh &

Chapman Inc.

Formed in Boston
(Special to The Financial Chronicle)

BOSTON, Mass.—Walsh & Chap

Officer

securities business.

jn

Reginald L. Walsh, President
John V. Chapman, Vice-President
are

and Russell S.

Treasurer.

viously

Cary, Secretary and

Mr. Chapman was pre¬

with

Coburn

Middle-

&

brook and Townsend, Dabney &
Tyson. Mr. Walsh was in the in¬
vestment business in N. Y. City.

Leland M. Bell
Leland M. Bell of Kerr & Bell
Los Angeles, passed away

sudden¬

ly May 4.

Specialists in

RAILROAD

SECURITIES
Selected Situations at all Times

m*

stantial

5

ma

.

-

Inc., has been formed wit.
offices at 84 State Street to engage.

man,

except

Edward H. results of the land
department go
with Dean Witter
directly
into
surplus
and
not
through the income account.
In

CHR0N«31'E)

onv

Jr.

Calif.

LlafY1;Unn "Manacrp't

"I"1

M. Ponicall,

the firm.

Vf'the & co"16 North San Joaquin st

of

doubted,

Pittsburgh
Stock

for

end

members of the Los Angeles btoc

Morrison is now

New York and

With

mately 5^4%.
Last year Northern Pacific re¬
ported earnings of $7.87 a share,
by far the best results since the

&an & Co., 634 boutn spring bL,

the

bers of

Mr. Poni¬

fords

P

mem¬

manager

stock

morgan LO. Aaas 1WO
"ffAwm
u f R°N Wavn
LOS ANGELES Calif.-Wayne
Morris and Albert L.
have become affiliated witn Mor-

Trust

B 1 d g.,

Were it not for other considera¬

manager at Saskatoon.

(Speoiai to the financial

Scribner,

and

,

STOCKTON

St

Union

call

tions, speculation at this time on
the company's oil prospects might
be
quite
dangerous.
Generally
I
speaking, however, the majority of
rail analysts hold to the opinion
that merely on the basis of the
outlook for the railroad properties

a0pr

-

part ners in
Singer, Deane

important
factors in the company's future.

Saskatoon

a

become

oil and gas may become

—

M.

Ponicall, Jr.,

and it is
understood that this is continuing.

George neywood 01 saskatoon
bas become bond department mannt Fdmnntnn
ager at iLamonton.
F Newton Hughes of Edmonton
ha(i
hppn
transferred
to Toronto
Pas, b
transferred to roronto
t
become assistant manager of themselves the stock has consid¬
fhp hnnH Henartment
erable appeal at current levels,
S Dona aepartmeni.
L l. Bell has been appointed with the land
honfa Hpnartment manager at To^y
bon? d p? H? ?r manager at 10 representing a potential, but nebu¬
ronfo and w v Warner of Cal- lous, plus factor. Also, with a
gary has become bond department regular dividend policy now es¬

f

Frank

and

been done in recent years

emerged

,

"Mnraan fn

PITTSBURGH, Pa. —W. Bruce
McConnell, Jr.

considerable exploration work has

general area, although off North¬
ern
Pacific property,
there has

values

by

in North

included in the company's income

twP

frt

v

p^nJ+

consump-

permanently

million

one

are

addition, the company has a sub¬
equity in the undistributed
earnings of Chicago, Burlington &
economy operated on fiat money
^mANC"L
Quincy. The Burlington, jointly
DENVER, Colo.—Lester L. Enunredeemable in any definite ma- wall ig wittl Hamilton Manage- controlled by Northern Pacific and
Great Northern, last year earned
terial thing and whose future pur- menf Corporation, Boston Build$19.76 a share -and paid $7.00 in
chasing power is, from the most ing.

well as the future
and is their .not
be

government deficit in the coming fiscal year. Cer-

t

conditions favorable to sustained

ily adopted the policy of a fixed
maximum interest rate and bought

but

'

itself voluntar-

in Mon¬

Singer, Deane to Admit
McGonnell, Ponicall

will

Land department
land
sales

from

Com-

&

t

A Gold Currency Desirable
-r

acres

include

-aicossAB

a program would,
npoo^arilv invnlvo

government bonds,

than

more

rights

Over

acres.

Dakota.

nOQn

y °Pin.10n'
necessarily involve
legg graduai withdrawal
ftrfb f thp marlrpt fnr

u

million

total is located

but

mineral

y

a more

f

6V2

this

tana

Wltter & L°.

powered

preservation

ditional

Tmntean
iS systoVom James
Richardson &, Sons, 367

Such

collapse.

2y2 million acres
rights on an ad¬

about

and have mineral

? ,eu ^ monetary system irom Mam street, have; ^announced the
fuf,ther devaluation and a possible following personnel changes:

Notes,

Board is still an inde-

outright

half

WINNIPEG,;-! Man.,

program

of

also
has
extensive
land
holdings and mineral rights. To¬
gether the two companies own

^ BoatdTandtot-" James Richardson Co.
f u
.
^ ,
Personnel Changes
the TreasS?y
weTas

th

cause

resurgence

pany,

convince the Treasury Department

®

an

Northwestern Improvement Com¬

aS °

y

koff

to

mt annual reauc
of maintaining the cPf.nrities denoted a? rollateral
the currency,
currency Therefecuriu!s
a1ep2>sltea
as collateral
tne
nieie
for
Federal
Reserve

Federal
reaerai Reserve
neserve Board
ooara of
01 the
uie reic

qolvencv
solvency

Board

Federal Reserve

operating

con-

an

Edgerton, Wy¬

is
col-

as

to be

seems

North

.

but it ought not to be too difficult

never

passed any legislation which has
directly interfered with the in-

deposited

the

for
the fully covered but the per share
hopes has deficit was cut by $1.85. Prospects
the
report that Amerada over the balance of the year point
Petroleum Corp. has brought in to continuing substantial improve-

has been with

lateral to Federal Reserve Notes,
for

Is

now

has

been

appointed

been

*9® ^tock *;x~
£?ar\^e* j:r'
Sheedy, wno

which

securities,

has

J*16

re-

sponsible.
I am not suggesting
that the System should suddenly

government
the amount

the

over

penod

for

reason

immediate

present

oo.
street.

,

and redeem announce that they will buy no
our currency in gold, the "devalugovernment bonds at any price, or
ation" of the dollar, the "Employ- that they immediately sell at any
ment Act of 1946," and there are price .obtainable
$12 billion of

•

in

in

.

tion to pay our bonds

^

this

income of $1,383,000,
improvement of $4,240,000 over
expecting that the net operating deficit of $2,867,the
current
developments
may qoo sustained in the
opening 1950
prove more fruitful.
quarter. Fixed charges were not

nianagerof the
trading department fo r
j|er;onL y~
koft &

responsibility,. and. it Pany'.
should be of such a kind as will;
are

■

,

^heedy

H-

own

duty of safe- carry out the principal
guarding the monetary unit. As for which Central Banks
examples, I mention the Congressional repudiation of our obliga-

ANGELES, Calif.—Patrick

TT

Association, ' the Council of Economic
Advisors, etc., but, after
having received advice and information
from
all
available
sources, the decision as to policy
must be made by the Board on

the

from

System

LOS

tives from the American Bankers

their

average

exploratory producing well in ment in gross revenues. Also, the
Dakota.
It is situated ap- company has been making con50
miles north
of siderable progress in reducing the
exter}t necessary to achieve the
classical purpose of all properly some of Northern Pacific's land burden of transportation ex9onceived Central Banks, which holdings in that state. Northern penses. This all-important ratio
protection and preserva- Pacific owns considerable acreage was down 4J/2 points in the March
®f fbe solvency and integrity outright throughout its territory quarter. On this basis 1951 earnand
has
also
retained
mineral ings of around $10.00 a share do
of the Pe°Ple's uioney.
rights on a much larger acreage, not appear as an unrealistic exThe
wholly-owned
subsidiary, pectation.

is

to the
■

the

years

proximately

fixed rate of interest

any

ten

caused
stock

far little

so

On

past

periodic contributed nothing to the annual
past net operating income. In the 1951
the way of con- interim the
road
reported net

have

in

riers

crete benefits have accrued to the

The

either ,th,? Treasury or the com-

six years and certainly..
the
market
for
government
nothing in our statutory bonds and at the same time prolaw which requires the Federal
tecting the soundness of the curReserve policy to be subservient rpnrv
It is aooronriafe and desir—

'

of the Board.

No, the Board should not blame

dose and cordial relationship between the Board and the TreasUry

nearly
there

•

r"es

is within the present

PaPer

The Fallacy of a Fixed Interest

the

during

achieved by the creation by

the

•

prevailing

Northern Pacific has started out

eventually

nower

and which could only have

•

; been
•

on

standing.

By far the most im-

banks, wj10 have been (as j think, portant
consideration,
however, well this year. Normally the first
unjustifiably) accused of contrib- has been renewed interest in the quarter is a poor one seasonally
utjng t0 inflation, they would possibility that the company may as it is for all northwestern car-

company.

•

Northern Pacific's eq-

in

siderable

; Srr/sa^r^^s
st:
government securities

dividends.

the in the limelight
recently, and has uity in the undistributed earnings
0pen market at rates of interest attracted quite a speculative fol- amounted to $10,593,084 or
$2.47 a
set by supply and demand and lowing at successive new highs, share on the 2,479,826 shares of
not by an inflation of the cur- Partly this may have been in re- Northern Pacific common outhave .to

would

f

Of
course, we
there is a general

-

spend $71 % billion this year,
and more in the years to come,

to

purchase of government securities
either to support the market or
for any other purpose. Never
should we hear a request for authority to apply punitive sanetions against the banks in the
form of some sort of new and
fan?y reserve requirement. The
decision to purchase securities is
vo untari y made by the mdepen-

.started.
-

effect

Simply that they would have to
which pre- structures on the base of .reserves raise the money by taxes which
in created by the Federal Reserve might not be too popular as a

t31,

.

the

be

Administration which wants

on an

and this

spite of the fact that the public
debt has been reduced from the

.

what would

gut

,

-

27

(2067)

J N c •

25 Broad Street

&

•

New York 4, N.

Telephone BOwling Green
Members Nat'l Assn. Securities

Y.

9-640®

Dealers, Inc.

28

(2008)

The Commercial and Financial Chronicle

■

>

.

.

Thursday, May 17, 1951

.

■

(
'

^jriaririfaetitfcs;- ;MofeOver, • ihe^rkw- material -prdditelrig- countries- , fetailCr's^as! wfell.bs -mariy; fcirigle* ,
ate engaged^ air effort to achieve- industrialization. > &r. i j
, industry
Amidst the preoccupation of the- governments - of industrial* , evitabld ythat ^ jsome V corhpanies,
some industries arid "-some towns
countries'with. the. economic .'problems' ofrearmariientand* rising'
cost of' living the long-range proSpects-pf the world food situation" * and* cities, Will -Lace' problems of
do not receive sufficient; attention. ^IPerhdps; theL acceptance by
shrinking" i economy.
Ef fdrts
' a
are
; Britain of the .harsh terms .imposed' on;her by the Argentine may3
being made rinrWashhigton^
*
render a useful service if it makes the governments realize the- - through the distribution, of -war
need for devoting some attention to'this problem/-*
•' contracts,'* to minimize these dis¬
I "n
'■
'.It
,11
U
'
L.
ruptions; How serious - they will
be will depend on the size of the
i

'/

_

By PAUL EINZIG

.r

..

.

.

.

j

Commenting on increased price of Britain's meat supply under
Anglo-Argentine agreement, Dr. Einzig notes it is an

,

recent

indication of tightening food

situation throughout world. Finds
improved industrial and economic situation in many surplus
food producing countries leading to more local consumption

■

;

Continued

The

a

fight for more favorable
devalu¬

was going on ever since the
ation of sterling.
-..r1
The conflict originated from the

demand
Argentine Government
that the price of meat deliveries to Britain,
which was fixed in the agreement of 1949 at
forward

put

£97
to

,

the

by

the devaluation of

rejected, and towards the middle of 1950;
tiie Argentine suspended the shipment of meat *
to Britain.
Since then Britain has lived on
was

her accumulated meat

reserve

which

Dr.

Paul

became

gradually depleted to such extent by the early
part of 1951 that the meat ration had to be reduced to

Einzig

./a-.5--1

a negligible
It was hoped in London that, since Britain has always
been the chief market for Argentine meat, the Argentine would
not be able to find alternative markets and would eventually have
to accept the British terms. In reality, last year's drought in the
Argentine has greatly reduced the quantity of meat available.

quantity.

found abroad

Some alternative markets were

and

the domestic

consumption of meat in the Argentine was substantially increased.
factors, together with the rising world trend of prices,
enabled the Argentine Government to hold out until the British

These

-Government

forced

was

by British public opinion to surrender.

An average price of £125 was

agreed upon, but that is by no
The; Argentine put forward a purely fic¬
titious claim for compensation for the alleged losses suffered
through the devaluation of sterling.
Under a gold guarantee
granted in the earlier agreement, Britain was under obligation to
compensate the Argentine for any depreciation of the gold value
of her sterling balances.
But at the time of the devaluation the
Argentine possessed no net sterling balances; in fact, she had a
ahort position in sterling.
Nevertheless, a claim was put forward
and, for the sake of being able to obtain the much-needed meat,
the full story.

means,

Britain eventually agreed

to settle it by the payment of £10,500,000.
This, together with the additional £ 6,500,000 which
Britain agreed to pay to supplement the payments made on the
old basis of £97 per ton for meat deliveries made after devalua¬

tion, brings

up

the real cost of the meat to considerably above the

nominal average of

The

£ 125.

why the British Government agreed, somewhat
belatedly, to accept such costly terms was the realization that
there was no hope for obtaining any substantial alternative sup¬
plies. The hopes attached to increased meat supplies from Aus¬
tralia and New Zealand came to naught as a result of the sharp
rise in the price of wool, which has made it more profitable to
keep the sheep rather than slaughter them. The profit inflation
resulting from the rise in the price of wool and other products
reason

also caused

an

increase in the local consumption of

meat in the

producing countries.
It is
grave

especially this last-mentioned factor which is causing

concern

The

in London.

rise

in

raw

material

and

food

prices tends to bring about a substantial increase in the standard
of living of the raw-material producing countries, which means
that they are in a position to consume a much larger
proportion
of the food they produce.
There is now less available for export
to the industrial countries.
The increase of the world population
tends to aggravate further the shortage of food
resulting from this
increase of consumption per head of the population, since it is not

accompanied by a corresponding increase of food production.
Although the trend is particularly acute in respect of meat sup¬
plies and consumption, before very long it is likely to make itself
felt also in respect of other vital foodstuffs.

V

The outlook is anything but promising. Lack of adequate
supplies of feeding stuffs puts a limit to the expansion of live¬
stock breeding.
Indeed, the existing livestock in Africa and Latin
America is already excessive, judging by the extensive soil ero¬
sions

resulting

both

continents,

from

possibilities for

over-grazing.

well
livestock
as

as

in

Undoubtedly, there

breeding,

parts

are

on

of

Asia, unutilized
but most of the territories

some

that might be suitable are too inaccessible

and before anything
could be done it would be necessary to build new
harbors, roads
and

railway lines,

concerned

It would

were

take

Even if priyate enterprise

to be able and

many

years

or

the governments

willing to undertake such works

before their efforts could bear fruit.

Meanwhile, meat and other foodstuffs

are

likely to be in short

supply.
In the

ordinary course, such a situation would produce its
corrective through a rise in the price of food in short
supply,
through a decline in the price of manufactures to a .level at
which it would become tempting for raw material
own
or

producing

countries to

buy manufactures rather than increase food consump¬
tion.
Unfortunately, such automatic adjustment cannot be ex¬
pected in the present situation.
A further rise in the
price of
food would only mean that the
producing countries could afford
to consume
even^ more. Rearmament, the high price of raw mate¬
rials

and

the

inflationary conditions prevailing in industrial •
possibility of a reduction in the price of.

countries preclude the




u

•

.

t

,

i

i'i

■•..\

>■

;

"

*

mobilization

program • and * the
which war contracts

with

.

widely spread.1>-•
\
(6) Under the Defense Produc-f
tion Act of September, 1950, Con¬
gress provided for tighter • credit

Washington Scene

controls in the fields of consumer

real estate

finance and

These

mortgage,

controls

be--

are

(3) The present inventory sit¬
day to day, depending on acci¬
ginning to indicate their potential.
dental or
planned official pro¬ uation, if it occurred in normal
Under the "cheap money" and
nouncements or our fortunes in times,
would foreshadow some
"easy credit" policies generated
Korea, basically we appear to be recession. Total business inven¬
b.y the Federal Government dur¬
moving into a period of reduced tories (manufacturing, wholesale
and retail), at last reports, stood ing -depression days and continf
international tensions.
ued to the recent period, the superThere is a growing number of at $66 billion, one-quarter above
abundance, of money and credit
people who believe that World a year ago and nearly one-fifth
their
volume last June. became obvious to all. DownWar III can be prevented and is above
payments on consumer; durables
likely to be prevented, providing This was one-seventh above the
and new houses were driven close
we do not provoke it.
While we peak that preceded the rather
to
zero..
Amortization
periods
have only 6% of the world's sur¬ marked recession of 1949.
were lengthened.
In many com¬
face and
of its population, we
; Retail
inventories
are
29%
munities it was cheaper by the
produce over 40% of the world's above, a year ago and 21% above
month to buy a house with a,zero
The greater part of
output. Our biggest steel company last June.
down payment than it was to, rent.
produces more steel than all of these increases is represented by
Last year we built 1.4 million
the steel capacity in Russia and higher prices and thus does not
new
houses.
Under the tighter
behind the Iron Curtain.
Our reflect similar increases in physi¬
credit controls it" is anticipated
steel capacity, to say nothing of cal yolyme.
;• ■/
that we will.; build perhaps 900,«•
that of our Allies, is nearly four ; To what extent housewives and
k

ton, should be raised in proportion
sterling.
This demand

per

'

■

finance.

They amount
almost complete surrender by the British

an

page

»

Economic Outlook and

countries in favor of the former.
to

A

i

■

are

the economic balance of power between raw
material producing countries and industrial

terms that

■

skill

LONDON, Eng.—The terms of the recently concluded AngloArgentine meat agreement have not received sufficient attention
outside the two countries directly concerned.
Yet they have
important bearing on the trend of world economy, as they have
provided a forceful reminder of the change in

Government, after

■

.

from first

and less available for export.

b

••

....

•

.,

have

times that of the Soviet Union and

other

its

built up inventories is not known
but it is generally assumed that
for.
storable
items,
especially

tenuously

Much

the

-

held

could

same

-

'

satellites;

be

said

of

ultimate

consumers

aluminum,''petroleum and many
other ingredients of modern war those

The residential

the year*

construction industry is expected

.

which
became
scarce Jn
the * Politburo: is World War II, such as linens;
manned by men who are as real¬ soaps,
nylons, etc., considerable
istic as We commonly say /they hoarding has been going on.
Even: allowing for growth in
are, the Soviet Union would in¬
deed be ill-advised to launch a population, full employment and
major war against the western higher levels of economic. activ¬
ity, such an t inventory situation
powers in the near future. •/.">•
>
While we can never be certain normally would foretell market
in these matters, and are well-ad¬ softening, some layoffs and per¬

potential.

Of these ,65% or more
likely to be built in the first

000 houses.

are.

half of

If

to

drastically :• by ; the
half/of this year so that

taper ;off

second

for

the

demand

and

other

new

houses Will shrink consider¬

/telephones

new

.

.<

vised

to build up our economic
and military capacity, fear of the
Soviet Union starting something"
in the

near

haps recession.
ary

factor in

It is

many

deflation¬

a

lines for the

next few months.

future is declining.

(4) Private debt has been ris¬
ing rapidly. Consumer debt out¬
standing jumped from $16.2 bil¬
tations) to make sacrifices for the lion in February of last year to
defense
program
and with the nearly $20 billion in February of
decline in international tensions, this year. Because of Regulation
it is quite probable that the de¬ W much of this debt must be paid
fense program will not reach as off rapidly. Regulation W should
high a peak as has been planned slow down and perhaps reverse
will

be

spread

over

a

the

rise

in

consumer

debt.

Non-

longer period so as to farm home mortgages have grown
reduce the pinch on our civilian at the rate
of $1.3
billion per
economy.
This, if it takes place, month in the past year, jmore
will mean that the military de¬ than a third above the monthly

in

„//';;

Another

ment: in

i

significant
credit

the

develop¬

field

is

the

abandonment

by
the
United
Treasury of its "fixed-in¬
terest-rate-pattern" on the Fed¬
States

eral

Until

debt*

the
strongly to

cheap

March

this

of

adhered

Treasury

year

With the unwillingness of labor
leaders (in spite of their protes¬

but rather

ably.
*

durables

consumer

depressiori-borri
policy. The United

the

money

States

Treasury was more re¬
sponsible
for
the
phenomenal
price and wage increases in the
past year than all the Commun¬
ists, labor leaders and business¬
combined.

men

Under this cheap money policy
the government bonds printed and

somewhat

sold

mands

readily and profitably be dumped
by banks and other owners on the
open market whenever it became
profitable for the bond owner to

will not

make as heavy a rates of 1948 and 1949. The out¬
productive capacity standing mortgage debt at the end
as
was
expected
some
months of last year was about $44 billion,
ago. To some extent this must be or nearly one-fifth above the fig¬
viewed as a possible anti-infla¬ ure at the end of 1949.
In the
tionary shift.
' '
past, rapid growth in private debt
/'
dent

on

our

during World War II could

his funds for other purposes.

use

This led to the rapid
the

interest

fixed

Federal

the

has usually been followed by a
should get reasonably
of debt repayment and
effective price and wage control, period
economic contraction.
upward pressure will abate and

to

thus

commercial

(2) If

we

-

mitigate
the
inflationary
tendency. Korea touched off up¬

,

level

of

current

inventories

and

ward

spirals in nearly all eco¬ rising private debt is the increas¬
nomic
categories.
The fear of ing diversion of raw materials
shortages and the fear of higher and fabricated materials away
prices started an unprecedented from consumer goods and to de¬
volume of anticipatory buying by fense
an£ war work.
Typical
housewives, by business and by Washington confusion here clouds
the
outlook.
As recently as a
government. A wage-price spiral
was

set in motion.

From the first quarter

of 1950

to the first quarter of this year,
national
income
jumped
from

week ago steel producers still did
not know how much of their out¬

put

would

be

available

to

so-

rate

Reserve

pattern
had

Banks

buy these bonds, thus provid¬

ing reserves for credit expansion,
From

,

(5) Closely related to the high

monetization

of the Federal debt because under

June

to

1951,

February

bank loans increased

from

$44.8 billion to nearly $54
billion, a net addition of over $9
billion in about half
an

annual

crease

of

rate

35%.

this

a

billion—nearly
real

estate

an

Consumer

during the same -period
about $17.7 billion to
13.5%.

credit

too

At

year.

was

in¬

credit

rose

from

$20
Mortgage
over

has

con¬

tinued to expand at a rapid rate.
In the six months after Korea de¬

called nonessential uses.
After mand deposits, our chief form of
$217 billion to $263 billion (an¬ the controlled materials plan goes money, increased from about $85
nual
rates) or by $46 billion. into effect on July 1, a figure of billion to over $93.2 billion. Dur¬
This increase for a single year ex¬ less than 50 %
is generally re¬ ing this period the total money
ceeds our total national income garded as conservative.
Some supply (currency plus demand de¬
in dollars in 1933!
producers believe that only
a posits)
jumped
upward
from
Average weekly earnings in the fourth of total steel output will about $110 billion to over $118
past year went up by 13%, basic be in the "free" category by mid¬ billion, which is some $4 billion
There
is
even
some above the
commodity prices by 46%, whole¬ summer.
previous postwar peak.
sale prices -by 17%,
speculation that limitations on Furthermore, the rate of use of
prices re¬
ceived by farmers by 27% and finished products or on steel re¬ the money supply
(velocity of
the
consumers'
price index by ceipts may control virtually ail money turnover) has been rising
steel by that time*
8%.
steadily.

What is true of steel is more or
In recent weeks this spiral has
been checked.
Wholesale prices less true of a number of other raw
have moved sideways for the "last
two or three months. By the end
of March significant declines in

spot

and

future

materials

In
of

the

the

face

money

of

this

supply,

partially processed surprising
that the
materials in critically short sup¬
money-spending .lias
ply.
flected in a Tise *>f
This

or

expansion
it is not
power
of
been

re¬

wholesale

of
materials prices from 157 (1926=100) in
diversion
"from normal civilian pro¬ June, 1950, to over 180 in Febru¬
Even, some industrial commodities duction will disrupt thousands of ary,
1951, or 'by almost 15%.
have followed this same pattern. .manufacturers,
retail *or consumer;
wholesalers and Meantime,
commodities

prices

were

of

basic

widespread.

away

.Volume

173

Number 5012

.

.

The Commercial and Financial Chronicle

,

■

■

\

have

June

1

risen

only from

(1935-39=100)

to

184

in
March, 1951.
lag between wholesale

prices

itical

But

of

consequences

pleasant

po-

and

While these

price increases
solely attributaole to the
in

crease

credit

supply, there
in

is

ments,

that

recognizing

and
a

direction and

the

supplies.

ing

are

justified

inventories

scarcity of

in

inventories

pansion of

strong

and

capital equipment, and

markets

for

not

if

banks had

have

money
ward

expanded

supply,

up-

Reserve

the

to

space

Outside

chance

P

b

ana

u

quan-

the outpouring of defense

a

,

•

tlA

months ahead.

m0untainsides

of

the

dollar

will

tax cost
tunes
many times

Economy

exca-

,
.

_

Threat

n,.v

(?) The Infla

0

fup

heavy

IU

pliers,
ntiiitipe

of

2%

rise

add

the

price

billion

a

level

the

cost

billion

of

means

extra

_.

also

$2

a

navmpnfS

w/are

to

means

Z
but
>

ated.

savins anrt

credit

rather

finanpiai

than

increases

borrowing

commercial

leJeTs Js

banks

icallv

would tend to

^ent

credit'

would

control
control.

the

he

Inflation

-A

and

could spell,
o^i-xi, if
u taken
iaiYi.ii

shortages

and

in

year

history.

New conFebruary was $2.6

last

all-time

,n

high for

history

our

any

Contract

factory, warehouse and similai

ur

will

that

mean

will

This

out

pay

the

more

means the gov-

than

tuore

Prices

under

it

is

taking

tviacI

for

new

next

December,

the result of this in-

are

We
Factors

this

tnbau,

should,

war

ance

put together

as

of

we

couise,

pay

for

but the resist-

go,

to hmher taxes is on the rise

ance to

nigner taxes is on ine use.

alone, considcui.siu-

aiullw

*Uai

a

.quarter of
1 r.^e an°ther
fourth
quarter,

may

see

an

an-

945 bllllori or even

,

-

expenditures have

ex-

panded less rapidly than was anticipated. It takes time to decide
'

upon

-1—:j~

specifications, types of items
xt—

this

conclusion:

.

.

the

critical

less."

rather
nai "

("Economic

December,

The

United
,

Jour-

1945.)

States
...

...

has
i

reached
.

.

T

exceeaea xnis critical level, in
the
lne 11151
first quan.ci
quarter of
ui iwi
1951 our ii«national
annual

-*

income

was

rate of

—

nmm'nd

at

running at

$263 billion.•

au

an

Fed-

are

xiuw

uuu

at

of about $5 billion a month.
President Truman recently stated




not believe

do

is

gets too

ponderous, let

maintain

m

gloomy
try to

us

the

optimism
Mencken, the pessimist!

Q J

B*1*1

is

mobiliza-

likely to be with

long time

low

'government

„

of

for

us

GUESS?

1 Wii

,

Here

Mwfcwwi

,

•

the

S

l»bl

0f tl,e anfrel

version,

appearing

on

9C

page lO.

a

should not al-

we

in

the

guise

of

"temporary emergency" to resort
to direct controls or regimentation

wholly

are

pleasant.

Both

.

But

in

this

choice, wise men,
putting primary
emphasis on tighter ciedit controls
and
tougher fiscal policy,

thinking

This

men, are

means

means

balanced budget.

a

that the banker will

to say no more

It

have

often than he says

yes
4

,

1

-x.

±_

-n

Thii will not be easy but it will
This
be

m

long-run

our

we

be

can

temporary
icui^m^
iv»

nn

m

sacrifice,

aauuit.c,

Afkny*

lurn

irnonc

another two years
the peak of the

program

to

normal

and

return

can

Robert

J

to

+V-.«

down

cut

immovH

hot.h
both

nnpp

nvpc-

and
and

nrivate
private

public less-essential construction.
(4) Manpower and Wages.
most critical bottleneck in

(A) Robert L. Mitton,
RobertJL.
jyutton Investments, United States
National Bank Building, Denver 2,
Colo>

activity.

,

Scene

x:

X

teR

•.

-

.

r

Spj^e 0f
mink

coats,
farms,-the

snake

policy

in

it"
"This ic
is it."

us,

and

down

lki«

«Thic

,1£.

jn

supply.

is

T5..X

^

„

economy is likely to be the labor
Unemployment

Mitton

Epilogue_on the Washington

The the
our

L.

to

over

defense
more

interest

Schedules

on

the

lack

"after

of

Korea,
of

presence

If it were
we

not for

n/i/mu'

u/i^i

-i-n

Md.-The

Bond

hnlH°

n

will

S it

jakrid*?
nL°n
June 1§t at tbe
riuh
HiiKriage uluo,
Elkride-p

'.

,

j^tft

.

,

.

°CC?i?0?'
onL

p,

clear

what?"

few moral

a

ti

clX of B^himorP
Snha? o^fnl
„

five percenters,
RFC loans to

Outing
—

hai

BALTIMORE,

"problems"

would not have meetings like

{ht m
,

'

Th
.

.

of out

^fc1L!.b „!ii L

th*
'

.

s

al

lf taurna,

h.r^a .A.

_nH

r<a

^

ular ..stock
,

Exchange" which

fniinwPH

tional adults
working by

workers

will

expected
year's end.

to be
Many

are

be

Many

ungraded

worxers win ne uptoraoeu.

wlB

work

overtime.

will

Some

T-.

uelDS

exniain the

do^ L "fSn" whiJh
wnicn
.

companies

+rinle

time

All

of

Put-

ac^

hv

wfil

Hinrw

.

conventions

and

con-

Lest we get too melancholy let
-.-x.
J
-u nrefaee
intVfrnrn'"the
of tt
H
.

head

many
Many

costs

businesses
UUSUicoaca

more

fhp

ontin^-

reach

rate

of
our

a

$80

bilhon,

or

national income

pages will

find them marked by

certain ribaldry, even when they
discuss topics commonly regarded
as grave.
I do not apologize for
this, for life in the Republic has

gotiated,

and ^ey climb to heights

>

*

'

for

Albert

C
.

&

Sons;

Merrill
Lynch, Pierce, Fenner & Beane;
Dorsey Yearley, Alex. Brown &
Sons; Frank Mead, Miller & Co.;
Edward Armstrong, Stein Brothers &
Boyce;
Charles Lore?,

seldom

William Reed, Robert Garrett &
Sons; Leroy Wilbur, Stein Brothers & Boyce; and Arthur L.
Baney, E. R. Jones & Company.

With Beer & Company
(Special to The Financial

Chronicle)

.

_

NEW
NEW

ORLEANS, La.—FrederORLEArsib,

In no other lck G. /Freret has ^ecome co^

burdensome, but also flourish.

profits

Co

Baker, Watts & Co.; Walter- Polhaus, John C. Legg & Co.; James
Downing, Baumgartner, Downing
& Co.; John C. Legg, III, John
C. Legg & Co.; John Jackson,
disease which afflicts the race of Baker, Watts & Co.; Walter Burns,
viewers-with-alarm. I have had Baumgartner,
Downing & Co.;
too good a time of it in this world Frank King, Merrill Lynch, Pierce,
to go down that chute.
I have Fenner & Beane; Robert Chamwitnessed, in my day, the discov- bers, John C. Legg & Co.; Joseph,
ery, enthronement and subsequent
Sener, Jr., John C. Legg & Co.;

taxes

cutting

fr

always seemed to me far more
romic than serious. We live in a
land of abounding quackeries, and
if we do not learn how to laugh
we
succumb to the melancholy

will
win

find their defense contracts

Chairman

H1®
U1C °u.Hnto;,cnaArn}a„J
^xaxxumu,

,

about 30% of

^

Committee.,

Mencken Lnrestomatny;.
Harvey,-. Alex. Brown
"Those who explore the ensuing Walter
W.
Johnston,

are

materiai costs bave been ris_

Bownine

'

me quote Irom the preface oi H. Warfield, Merrill Lynch, Pierce,
U Menckens new book (A Fenner & Beane; F< Bartoa

find equaled elsewhere. Nevertheless,
thpir vnltime declining and over- we
their
volume declining and over- we survive, and not only survive
ing.
jng.

Ra,,rrlportne^

g

Price controls will slow down such
mountebanks
in
greater
the speed with which labor and number than any other country,
faw

Treasurer, E. Clinton Bamberger,
Entertainment

.

earnings of Ameri- collapse of a vast army of uplikely to be good lifters and world-savers, and am
in the period ahead, the squeeze firmly convinced that all of them
on
profits will be considerable, were mountebanks.
We produce
While the
business

can

Sons; Secretary, F. Barton. Sar^ Jr" AJe^.B/0W2
Sons;

ferences

work just Saturdays and Sundays

j

healthv

usually

usually ac

nxv,
,

rate

in

market

or

defense

jong

'Se'hiSctt de-

f.nrnoration

^

aers

I

the outlook

too

and contractors is enoi
The pronouncements, from
ln fact» Ihe expansion is Washington as to what s ahead.aie
so.great
is worconfusing,
su gxect t that^ Washington
" aciixu^iui^ "
vy
com
using, cuiiuiciuxi-bui^
nuacontradictory auu
and frus-

~

nmit of taxation is about 25% of
the national income, or possibly

.

Defense

I{
or

mous-

-

co,-ii-G
glJI®
billion.
Ihe

tion

this

unprecendented: make this
ui.iix^»uv,»v«.
ma*e
una
rnoont
PctlVYiQfp
nf
recent
estimate
of hoping that

among employers to get
Such borrow- and hold labor.

ftation.

$30 billion

Because

is

-

or

wiu

■.

price control

x*

nan

month,

How

The £undamental key here is not
wage and

trols

erable contraction in the
economy
but they are by no means the

^r\,By,.the

forees,

fiation.

hurt.

Colin
Clark,
a
well-known
town af
at double
and triple
double and
triple :time^AU
All pi
oi
Australian economist and a dis- these factors will push up costs
ciple
of
Lord
Keynes,
noted, and therefore prices, and help
whole
story.
A
considerable during the course of his research PuB UP prices through enlarged
number of these forces making in many countries, that when the buying power.
for contraction are deliberate and tax
burden
reached
a
certain
We are likely to see wages and
intended in order to make way point, governments take the "easy salaries increase by the end of this
for the anticipated boom in de- way" out by monetary devalua- year by something like $20 to $25
fense production.
tion, deficit spending, and infla- billion
above
a
.year
earlier.
There are
hnwever
infintinn
tion, rather than through further From the first quarter of last
arv and
expansionist far-tor* that tax
increases.
This
tendency year to the first quarter of this
also
must
be
weighed
into
the
seemed to be so widespread and year wages and salaries jumped
nicture
Amon? these
ev
Joe so uniform that Clark thought he from $142 billion to $170 billion
of
defense
exnenditn'res is the saw an economic law in action. °r by nearly $2.5 billion addimost imnnrtant
a lures 1S me He decided to study this typical tional per month. This increase
reaction more closely.
in buying power, unless drained
(1). Expansion of Defense ExClark's
analysis
covered
the off by new taxation or put into
penditures.
Actual
defense
extaxation
expenditure - inflation savings, will bid fiercely for the
penditures are now running appatterns of countries all over the Pitad up inventories and the staproximatel.y at the rate of $2.5 world. Out of his
long study came tionary or shrinking civilian outbillion a
wuxu

inIlation

the

x^m^niv^Tfcsigners
rl^t

lib

amiable.

^

P

Expansion

the

D

>

All Af fhPCP fbbtnrc
All
oi these factors

and

off

ing- whether done by Private in'
This vvi11 mean that a11 manner this today. Concentrating too seri- be *°llowec* by d
nfr*
dividuals or government, means of means will be found for rais- 0usly and too exclusively on
Officers of the club are: Presithat brand nev/> previously non- ing wages and fringe benefits to "problems," however, can make us dent, W. Lloyd Fisher, Baker
existinS purchasing power is ere- get and hold labor. melancholy, drive us to drink or Watts & Co.; Vice-President, HarThis « inflation.
Rising
Three
to four
million addi- even worse.
^1S0n Garrett, Robert Garrett, &

rreHif

kent

.

heat

anticipated that the. balance will
shift in the direction of more in-

s^ond hM

deficit basis

llbldl

commercial banks.

vnLme

tntal

an(J

economy, Amenmade plans last fall

our

Pansion, by borrowing from the petition

the
loan

to the most

the

•
.

>

at

nrcsPnf

due

Inr ' rrft

and

go

Rnt

uses

fah

Would

reviewed

had

and enjoy it. Thus my view of my
country is predominantly tolerant

away' There' win be a strong to 14 million and is expected to midgets in high places, there are
tendency for this deficit to be fi- be further cut by year's end. many competent and honest peo"anced in Part throu«h credit ex" This will mean enormous com- pie in Washington.

V

below

the loans

aoDlications

POwef

wmi
nLe^ri

reduce

up-

Plant and equipment comes to an
annual rate of
bllllon 1Y\ the

1951

ernment is adding to purchasing

in

Nnr

control

This

the citizen.

through

tfkhter credft
total

of

mn"
than it collects from business and
con-

enn^^/Thi1
money savings through

stitutions

Quarter

ine

government

would

vast

our

Tiffhtpr
Tighter prpHit
credit

of

busines

rr^Q

big

the current quarter

will

expect

"Fhe
most
Planned
expenditure

grow-

—

Defense production will
require
nn
narx
nr
on imp
the part
of
numer¬

rowing of

raoidlv

on a

pay

for greatly enlarged construction
activity. Last year new construetion came to $27 billion—the big-

^

Dorrowmy
borrowing

sunnliers
suppliers.

Tn

oneratin^

material

construction
^»»uuuiuii

e

...

m0ct

ir

the

into

cut—thereby

end
fiscal J'Ccll
year
hut Will
will ena
end ttie
the fiscal
year in
in
dune ^ith a modest surplus, per- ried about the upward price pres- trating. But this is dempcracy in
haps .$2; are
or
billlon- After that sures an4 scarcities and is aevel- action.,..We would rather have the
oe
goner«
deflclts are nxeiy
likely to
to be
gener- -i—-0
oping
a --—^
heavy
arsenal of weapons Confusioii than to have a dictator
rut
rlnv/n

more

purchasing power of the liquid
savinf?s of
Amerinan nonnio
savings
of the
the American
people.

tml

n

of

some

back

number who
suffer by it is" vastly surpassed
by the number who fatten on it

(3) Construction Activity.
Due beyond the minimum essential,
to the rising prices, the prospect
Neither direct nor indirect con-

in

big-

our

taking

awards are very high. The boom
awards
are very high. The boom

com-

-S^lSSSuS

goods and

-

It

is

^uvei

to

and

enfeebled Wage Stabiliza-

ouy-

public

plowing

business will be

interferences, but rather through
in. £iscgl and
monetary policy.

mi

to

econ-

than $2 billion
evaporation in the

ous

j

In'the^first

the

charge

consumers for the same
ocxvibca.
services.

rnvprnmpnt
Government

are

Board

month

Hidioiai

XerfXiSe

living

annual

tu

of

Joes this
^oes'the\vhole

may

to

year

fiscal°1952e
in

'

t

must

billion—an

,

outpou ring

iabor^to^
contractors,

Every

in

$13

p

we

an

gest

apferme

including telenhone

■'

„anlp„
Danies

may
ay be the costliest of economies
—and in the
budget sense, both
national
and
personal.

lauui,

to

g0j

-

additional

UUiiai'S
dollars
to

its

pay

over
over.

burdens

struction

program expands

willing

tax

we

can

j

Deficit Spending.

on public debt interest
vu^u^bu^niHci^

^wuv.iv

as

are

lhg

growth

coming flood of

our

matprial

help in the battle to hold the

value

Unjess

of

ma-

Whole

being

are

vated to store

that

fabulous

that will be occupied

ex-

improvement
that
deferred
But we should

wage and price pressure to
continue in spite of Mr. Di Salle

store

.

of

^

made

of"Washmgton

nf^nerfectlv

comes,
will
be
financed
from
lenders' savings and not from inflationary bank credit. This kind

of

goes

hundreds ot

require

additional

f

^ every

selective in where the cuts

program

for

that funds

so

everything £h
weigh out?
encourage
all
Right now they are roughly
t
Federal, balance. After midsummer it

public
bg

any

available
the

profits

dQ

.

pone
l

,

ward

Treasury defense borrowing, if it

•

etc

cut

sg^m^.
n

^

to

democracy, but I am perfectly
Summary
.
.
willing to admit that it provides
we gee that we have with
the only really amusing form of
urged us Certain contraction and defla- government ever endured
by mantion forces and certain expansion kind.'

being

are

shou][d

P

of

and.

for

made

,

government

^
^

crease

Reserve

given-

of

y.

g

thousands of square feet, inaeea
thousands upon thousands oi ac

between

chance to check
private credit
pansion.

We*, improve

replpce

flood ot bombers, tanns

been

Banks

been

now

^

level
level

pvprv
every

tion

Treasury, the Federal
has

will

we

ex-

nressures

Penditures^ The pressures^tor

sa

airfields
airiuelds,

defense

material.

accord

new

Federal

System

the

these
have

the

on,

deficits

reduced

or

The

expenditures
i

war

pnlarf?ed
enlarged

quvokly

If

reduced.

Under the
the

of

would

taxes

nHitnres

civilian contraction.

could

or

loans and

all

pressures

substantially

the

not

higher

^lst$ruction 'In State and local, to cut 'down less
of warXuses!
essential expenditures and post-

way

may

goods —all

these work together to
encourage
bank loan expansion.
But

Drefer
.

or; credit conwois,
raw

,

plants

ex-

economic

s

,

«pfacirTventoriesg
replacing
hTgh
e°r ?L
nigner
for
replacement

are

^ ,£ie

c

eco

or

Vgrea^war'tL

new

g0^erf
stockpil- |t
at

pro^am is

as a causal connection

prices

byjiext year, even; without any more. igB^^ ^eavy^demand
taxes^
And
reacting in on materials, efforts
being

be

material

omy is. cut tock due to
tion of consumer ™rkets

money

correspondence
of the move-

are

The

raw

Even though the civilian

in-

size

we

$58

will

steely> ^minu

mammoth

1

•

another

orders

'
fuel and electric P°
and thousands of other materials
copper,

contemplate.

not

1952

defense

This stepped-up late of
activity will reflect itself m r s
ing demand for

by

and

June,

in

placed.

retail

prices, with social

by

billion

this

and

not

that

170

about

suggests the prospect
inevitable catching-up

some

retail

to

"
'

prices
in

29

(2069)
I

rene-

a

bit

with

another,

States.

Even

it

as

in

a

is

great

in

inese

depres-

jjew ^xn

Exc anges.

30

Continued

from

by creating note and deposit curnency against government debt.1

4

page

Recommendations ior

a

for

and

follows

people

a

when

policies of the central bank¬
Did not the framers

ing system?
of

Federal

our

well-established

modate

elastic

when
basic

the

be

Reserve

to
accom¬
agriculture
provide an

commerce,

industry

and

that

Federal

the

should

System

these

of

lessons

provided

they

functions of

Act

Reserve

validity

the

recognize

to

and

resting upon re¬

currency

of gold and other specified

serves

lawful money and upon
self-liquidating short-term paper
growing out of commercial, agri¬
forms

of

cultural

industrial

and

transac¬

tions?

wrong

the

of

people

been

States

United

taken

upon

by the Federal

course

System permitting itself
domination of
Are

Reserve

and

purse

against

a

the

of

people's

the secret

to

people's

The

the

that

lies in

purse

ballot and in

demand

the right

government

ism

possession of the people's
and force them into Social¬
totalitarianism

or

other

with

for

form

the

control

the

in

some

that,

reason

the

of

through

gained

deemable
the

the government can

irre¬

an

the power of
corrupted and,

currency,

ballot

be

can

effectively destroyed.
(J) Our people would be freed

possibly,

prospects of the

the

irredeemable

Since

currency.

a

free of
of disease,

procedures of the Federal Reserve

these

System with Treasury fiscal pro¬

financial

and policies
wrong
in
principle, and in conflict with the
lessons
as
to the principles of

other sources—for example, from

and of sound
Has not the
degree
of integration that has
taken place in recent years been
injurious to the people of the

more,

Monetary

'V"

abuses in

of credit.

uses

people would

Our

once

with minor exceptions, have

the benefits of

honest currency.

an

The elements of dishonesty inher¬

providing cor¬

the fundamental

to

(4) Congress should make our
honest
and therefore
redeemable in gold for all holders
of (dollars at the
statutory rate

fine ounce which has
since Jan. 31, 1934, in
our dealings with foreign central
banks and governments and pro¬
ducers of gold.
per

be

of

economic

our

and

in

banks
the

to

practices

vesting

in

from

which

^their

they

This

author

erly

mission would need to study

banks

Reserve

their

the amount

that

through

favor

in

central

foreign

of

to

governments in respect
the kinds of dollars that may be

of

honor

used.

banks

Reserve

would

once

more

The

should

restricted

be

banks

Reserve

invest¬

to

permitted

proper

in the form

of claims

kind

same

of notes and

deposits.

Multiple quotations for the
dollar, would tend to disappear.
OE)

(F) New life would be injected
into

private enterprise in foreign

obligations,

should

liquidating

nature

maturities—the

CG) The return by other
to

should

redeemable

be

exist
the

since

the

exchange which

now

made

difficulties in

between

world,

deemable
rency,

(H)

na¬

currencies

easier
and

us

because

the

of

features

of

rest

of

the

irre¬

our

cur¬

Great

domestic

redeemability

dence

and

more

saving,

more

instills

confi¬

provides incentive for
more

production,

investment,

more

more

trade and,

prosperity.




and

safer

member banks

should be limited

purchase

Direct

days.

prohibited

one-day

securities

from

of
the

Federal

the

and

securities.

should

not

longer

run

per¬

than,

say,

five days.

should

ures

our

be

taken

commercial

banks

functions.

them

to

of

Ira

dinner

New

Alumni
Grand

the

to

It

and

their
is

finance

not

the

to

meas¬

return

Federal

English life also were fast outgrowing
swaddling clothes of official omniscience and govern¬
In the town where Adam Smith labored

mental sciolism.
were

by individuals and by so¬

protests

numerous

.'All
restraint,-therefore, being
thus completely taken away, the obvious and simple sys¬
tem of natural liberty establishes itself of its own accord.
Every man, as soon as he does not violate the laws of
justice, is left perfectly free to. pursue his own interests
in his own way, and to bring both his industry and his
capital into competition with those of any other man or

should have concluded with-this celebrated passage:

sytems, either of preference or

-

the
of

Now, of

and

years

is

J.

Rankin O'Rourke

well

known for his work in

this group in
downtown
New York.

promoting

Westchester and the

financial

section

of

He is President of the

Pelhamwood

Association,

civic

a

a
member of the
of
The Boys
trustees

organization,
of

board

Club of New York, and President
of

The

Boys

Club of New York

Alumni.

John S. Hassan Co.. Formed
(Special to The Financial Chronicle)

SAN

MATEO, Calif.—John S.
Hassan has opened offices at 927
B

Street to engage

John
was

S.

with

formerly

in

a

the firm

Hassan

A.

Love

Conrad,

state of half-war and of urgent prep¬
and that in such circumstances the

of economics
objection, let two
observations be made: In the first place, we are now con¬
cerned not only with the particular circumstances by
which we are now faced, but also with the history of the
past two or three decades, when even while at peace we
devoted ourselves in unprecedented degree to "preference
and restraint" by government. We are particularly desir¬
ous, as a matter of fact, to draw attention to the degree in
which such interferences as are now being effected on
as

num¬

a

of

a

well understand that there are
to object that we are now in

once

ordinary rules of "business

his hob¬

by for

we

arations for real war,

The Boys

ber

course,

"emergency,"

an

activities

Club

-

those who will rise at

ke has made

Louis

government

the conditions of

the

Popular Objections

Co.

securities
name

of

Mr.

Hassan

associated

with

Re¬

for

appeared in the same year that
Independence was signed. On all sides

the Declaration of

on

appropriate
proper

;

■:'s of Nations' should have

order of men.'"

of

business under

These, and other similar,

abandonment of such notions that the work of Smith so

liberally contributed:' Says the late Professor Seligman,
hardly to be regarded as blind worshipper of Adam Smith
or even a full supporter of some of the doctrines he con¬
tributed to the American system: ;
/ ;
"It is more than a mere coincidence that 'The Wealth

against the :policy of the government. It is not
surprising, then, that after a careful resume of the short¬
comings of the prevalent commercial policy, Adam Smith

sale

These

be

the

v§ry root of current deviation from early American tradition and our leanings toward "collectivism "-"socialism,"
"communism" or whatever name be given it.
: /
On the political side it was the rebellion against such
notions (and the evils which go with fhem) which the
American system of government embodied; it was to the

the Hotel New

anticipation of

taxes

government
to

the

to

in

so-called

wisdom about everyday affairs, not given

ordinary man. Here is a situation which lies at

pro¬

over-draft

Or

issued

banks

over-drafts

mitted

for

except

Treasury

certificates

Reserve

serve

consequently,

short

30-60-90-

United States Treasury should be

of

benefits

should be realized since provision

for

15

government

receipts from

would be eliminated.

with

against notes secured by govern¬
to

<

tions

self-

a

All other tempo¬

to

advances

ment obligations

trade.

of

be

usual

day maturities.
rary

them

Mr. O'Rour¬

Federal

to perform their ments in government securities
functions; they would be not in excess of their capital ac¬
paid out upon demand, without counts;
and their loans
and
discrimination, to all holding the advances, secured by government
be

in

deposits.

CD) The reserves of the Federal

find

Boys
of

May 12.

time

to

testimonial

a

their

and

able

a

by

Saturday,

accounts

author's

O'Rourke

government debt not in excess of

capital

"

imbued with

there

at

Yorker

in

acquired

Haupt & Co., members of the New
York Stock Exchange, was guest

advances

investments

be

be
this

defects, such

Honored at Dinner

Ballroom

to

to
se¬

better principles and

Rankin

J.

government obligations as se¬
curity for self-liquidating loans or
and

functions

J. R. O'Rourke Is

Club

banks and

what the

cieties

York

and

prop¬

government
If

contain

should

commission

of

channel.

to suggest
cedures.

creation of bank deposits by com¬

of

may

the needs of

properly

may

this

recommendations

mercial banks

(C) There would no longer be
discrimination against our people

the

("Hear¬

the performance of

in

open-market

proper

determine

securities

use

monetizing

are

recommended

commercial banks

type of dollar while a more valu¬
able dollar is denied them.

the

has

invest in government securities.
It
also pointed out that such a com¬

was

The

against government

and

•

situation
in
with govern¬

present

ciples are available as guides in deter—,
'.
mining the extent to which our " Federal

tendered

debt should be limited to

We

the Joint Committee on the
Report," Feb. 2, 1951, pp. 446-.

serve

The

securities.

that Congress appoint

(B) Our people would no longer
be compelled to accept an inferior

ended.

in¬

a commission,
composed of authorities on central bank¬
ing
principles and sound principles of
public finance, to ascertain what prin¬

subsidy laws should be re¬
pealed.
The Treasury should be
authorized to buy silver at market

be

in

Before

Economic

silver

should

banks

overloaded

are

and

(3) The issuance of Federal Re¬
notes against government

commercial)

securities

ment

a

•gree or another in recent decades, of faith in
social philosopher calls governmental sciolism,

Federal debt.

prescriptions aimed at symptoms
finally to
a serious and possibly devastating

be treated alike.

to

government

curities

needed to meet the pub¬

about

that is to
say, belief that somehow the politician by virtue of his
charticterjstic -ot,.
the latter* paribt selection by the people to some high office has become

need, next, to determine the. method by:
which these banks should extricate them¬
selves

at least as to main content. These aspects center
marked revival in recent years, indeed in one de- ;

the press

,

(and

are

:

subsequent peripd...
;<r:.
We need, first, to determine the
proper
principle to be employed by our Federal
Reserve

all current policy

brought into focus by these sermons last week
—which, while "off the record," have been reported in
which

the

of

aspects of

larger

are

more

1920'8—prior

1929—than

industry and commerce, anct leads
a bloated, distorted structure in
the use of credit and in prices, to

as

:

principles suggested here would,
general, return the Federal Reserve

tion, thins out the health-building
qualities of the bloodstream of

lic's demand for silver money.

,

,

there

But

be banished from this nation.

the

(2) The silver purchase and

Larger Aspects

economy
,

IThe

activity, would be freed from a
major cause of the disease that
creates a fever throughout a na¬

illness.

anti-trust laws.

of the United
preserve their ap¬

to

are

"many instances he should have to act independently
danger of later prosecution under our

if he is to escape

people

Reserve and

rather than causes, and

in

gov-

a

liberty, these methods
destroying that freedom must
recognized for what they are

of

ever as

and ' monetary

managed

to act in certain ways without any assurance what¬
to what all the others may or may not do. Indeed,

upon

of

commer¬

propriate

ings

prices

then:

All dollars would properly

States

447)

bloodstream

fiscal

the

If

official acts in support

be
which is

and

banking system removes the
important obstacle to gov¬

ernmentally
and people.

it, which diffuse themselves in
subtle ways
and like a poison
Our money,

blow to
the de¬

independence

dictatorship and hence to

and in all

prevailed

Were this done,

the

of

ernment

irredeemable currency

to

currency

cial

an

in

ent

the

offered:

(A)

the

eliminated.

questions involved and of obtain¬
ing a sound currency system for
the people of the United States,
the
following
recommendations

of $35

trouble must arise from

throughout our nation, would

Sound

a

System

In the interest of

are

germs

of

Recommendations For

rect-answers

inherent

(K)

is

currency

redeemable

a

currency is a dangerous
the welfare of a people,

struction

great

redeemable

II

the loss of

While

disaster inherent in an

or

depend for their validity upon the assumption not that
one but that all businesses act in certain ways.
Each of
these industrial managers is, in other words, being called

and the serious trouble,
a program invites.

which such

people's

to integrate monetary

United States?

government dictatorship in
and fiscal affairs, an
and
depreciating

last

take

gentlemen (having apparently come by some
by the rest of us) are undertaking to
lecture these businessmen about broad economic forces.
Their forecasts or their analyses more often than not
These

irredeemable
currency,

almost a controlling

wisdom not shared

monetary

latter power,

trouble

good central banking
fiscal procedures?

wish

1951

Thursday, May 17,

element in the electorate.

and

fiscal programs should
integrated are valid only if we

the nation's central

purse

ganized themselves as to constitute

Federal

that

policies

redeem its promises to pay. When
the people are deprived
of the

from

grams

monetary

to control the government's

power
use

use

Socialism.

contentions

Reserve

be

have

of the public
potent
pro lection

government's

the United States Treasury?

proposals, of recent years,
policies and

would

current

Treasury

Against Socialism

people

direct power once more over the

to come under the

not the
i

(1) The

purse

the

not

Have

the

Protection

gov¬

activities

the

dominates

System

.

We
See It

As

The

reestablished and maintained.

Sound Monetaiy

..

Continued from first page

independence of the
Federal
Reserve
System
from
Treasury domination should
be
The

(4)

ernment

Chronicle

The Commercial and Financial

(2070)

and

prior thereto

Bruce

&

Co.

First California Company.

and

usual is out of order.

as

usual"

As to such

or even

an

sides have grown in real essence to be part and
parcel of our economic thinking and governmental prac¬
tice. Until this fact is borne in fully upon the conscious¬
ness of the rank and file of the American people we shall
many

not

again have

very

a

healthy economic system in this

country, regardless of outward appearances.
The

second

emergency, or,

observation

fiat controls such
DiSalle
tection

were

is

this:

Even

in

times

of

for that matter, in times of "total war,"
as

those to which Messrs. Johnston and

referring

are

wholly unable to provide pro¬

against loose and profligate management of gov¬

ernmental affairs.

Few need to be reminded of the ex¬

tensive "direct controls" of World War II.
known is the fact that

they

were

Equally well

not particularly effec-

Volume 173

tive

Number 5012

.

.

The Commercial and Financial Chronicle

.

in

controlling either prices or wages, and that such
as
they had during the war was quickly
lost when the
fighting was over. Not so many realize
perhaps that one of the basic difficulties with all this at

(2071)

Continued

FHA

to

get out of hand and then to prevent damage by fiat.
It cannot be done, and the sooner we understand that sim¬

Housing and
Mortgage Developments

been discussed and

Utility Securities

stage, I shall mention only briefly
some of the principal amendments
the National

Electric
Power
Company and its subsidiaries,
Wisconsin Michigan Power Company and Wisconsin Natural Gas
Company, serve an estimated population of 1,440,000 in 376

in

three

interconnected

areas

southeastern

Wisconsin,

the

and

subsidiary

in

consolidated

gross

revenues

91%

are

fares

to 15c cash,
in the single fare
Application for a further upward adjustment in fares is
contemplated by the transport company in view of a recent wage
adjustment.

tickets for

90c, and the $1.60 weekly

pass

Last

the company earned $1.90 (consolidated) a share
after provision for contingent losses on investment in the trans¬
portation subsidiary of $500,000, equivalent to about 14c per share.
The corresponding earnings for 1949 were $1.89
per share.
For
the 12 months ended March 31,
earnings per share were $1.86, the
reduction in the first quarter of 1951 being due to higher taxes
which

in

accrued

were

normal

surtax

and

the first

rates

as

quarter at

with

compared

the

rate

42%

in

of 50%

February of this

In March

year.

for

1950, and to

water conditions for hydroelectric generation

poorer

and

year

in January

the water conditions and

the gas

earnings improved with the result that earnings for March
showed a gain over last year.
!
^
^
'
■

,

The Wisconsin Electric system
energy
(about
2%
accounted for about

is

generates most

purchased).

8.5%

of

of

Hydroelectric

its

electric

generation

total

generation last year.
In De¬
cember, the fifth 80,000-kilowatt unit at the 400,000-kilowatt Port
Washington plant was completed.
Work has begun on the in¬

,

engineering work on its
building of them.
It was the
first company in the world to develop and
adopt pulverized coal
for use in generating steam, which
system was incorporated in the

i

cific

defense

the

activities

in

the

The

is

program

primarily

de-

signed to produce rental housing
and
be

priority of occupancy would
given to workers in defense

activities.

give flexibility to the proprovision is made for the
insurance of mortgages on both
To

gram,

one

two-family structures,

and

well

multi-family

as

as

projects.

Terms for such insured mortgages
would

not

90%

exceed

of

FHA

1942 to

11,288 in March, 1951.
Port Washington Unit
No. 5 is turning out a kilowatt-hour on an overload basis at about
9,550 heat units.
^

sales.

gas

The average use by the

customers

and

in

1942.

over

actively promotes all classes

28,081

1950

was

Its farm

farm

kilowatt-hours,

2,162

kilowatt-hours,
in

increase

an

of

electric

and

company's 361,219 residential

electric service sales

customers

of

an

used

163%

over

increase of 79%

the fastest growing

are

1950

an

average

of

4,674

The
load.
year

for

is

company

preparing to

take

its

share

of

the

defense

building program will reauire $100,000,000 for the fourperiod ending in 1954.
About $50,000,000 will be required
first half of

the

completed

in

the

1954.

Oak

The

Creek

company

Power

does

Plant, which will be

not

expect

to

do

any

permanent

financing until the spring of 1952, at which time about
$25,000,000 will be raised, to be followed by another $25,000,000
in 1954.
Exact type of financing has not as yet been determined.
The

consolidated

capital structure at the end of 1950 was
50.2% debt, 18.3% preferred stock and 31.5% common stock
equity,

Up to about three years ago Wisconsin Electric
The

North

American

system.

Since

was

part of

emerging it has pursued

a

conservative dividend

policy with a present payout ($1.20) a little
The management hopes that the payout may be in¬
creased when domestic and world conditions are better stabilized.
under

60%.

The

question

of

retainability under the Public
Holding Company Act of the gas, transportation and
heating operations is now before the SEC.
\ *
'

Utility

In

a

recent

talk

before

the

New

York

at

50%,
should earn on a consolidated basis within 5% of
earnings. A major part of increased fuel costs would be
recovered through fuel clauses.
the

company

last year's




am very

Although the

Section 213,

new

Cooperative Housing, is just over
a year old, more than $428 million

last few years.

done

While there

builder

or

business;

sometimes

to be

seems

as

during
ade-

an

which

plan

mortgage

lenders

avoid.

to

now

In

should

in¬
stances, it is the uncertainty of
securing construction money that
has

builders

caused

and

pre-purchase

they

to

out

rush

thai

materials

not need for weeks

may

months

many

to

When

come.

require materials to be

or

lenders
the site

on

or available before making a con-

struction loan, they are making
shortages more acute and disrupt¬
ing the orderly flow of building

provided.

there

tended to be served.

amended

housing

include

to

Atomic Energy Commis-

serving
sion

mili-

housing would be extended
1951 to July 1, 1953,

tary
and

under

for mortgages on

installations.

section

207

would

amended

be

to

permit

up

unit.
Also, a
of special interest to sav¬

matter

ings bankers is the amendment
reducing the term of debentures
under Section

207
..

well

as
,

.

as
.

under

Title

I

proving

are

inventory

the

of

condition.

good

gested.

is

It

of

view

The

owner-occupancy

203

Section

of

require-

would

be

than ever before. This
encouraging.
I wish to
emphasize the desirability of con-

ber of mortgages to

tinuing and expanding efforts to
produce
housing for minority
the average American
family, This means suitable housing within the paying ability of
families.

such

As I

"

<

pointed out before, I should

hke t0 discuss some of the probiems

0f

we

the

FHA

and

you

as

mortgage lenders must face in or¬
der to meet the needs of the coun¬

With

The necessity of providing mortmiddlp

for

pafX0

in^gtamaies

is,

-n

and

my

0pinj0n> particularly important at
time. During a recent trip I
took through many states, I found
that in several areas there was

continued resistance

to make loans
under Section 8 and Section 203(d)

when the mortgagor expresses

mortgage.

on

the part of

lenders

mortgage

because of the low amount of the

It is my sincere belief

intent to occupy

the property upon
his discharge from military serv-

that

give study to the internal organi-

ice.

zation of your banks,

amendments
become
law or not, the
times ahead are not going to be
the

Whether

easy
sure

proposed

for any of us. We can be
of that. The best we can do

is to think
about

as

what

logically as we can
the coming months

bring forth, and to make our
plans on the basis of past experi-

ence

and current facts

is

it

to

your

advantage

to

whereby you

make and service these low
mortgages efficiently and on a
profitable basis. I understand that

FHA

a

very

I

Fiscal

Report

should like to give you

brief fiscal report on FHA

operations.-To date the Adminis¬
tration ha& insured more than $23
billion

in

mortgage and property

improvement loans made by pri-

same

the

an

oppor¬

tremendous

volume of mortgages made available last year, and I feel that it
is not unduly optimistic to say
that the residential mortgage industry may well be in even better
order at the end of 1951 than it is
'

now.
a

period of national emergency
work hardship

be expected to

can

on
all peacetime enterprise* bi¬
eluding the normal production of

housing. But housing, in addition
to being

a

peacetime industry^ is

vital to defense and national production,
be

For this

it cannot

reason

casualty of the emergency,

a

it

necessary

to convert its efforts to

producing

rather

.

will

find

..

,

,

accordance with the needs of

ln

the emergency,
We of the FHA

every effort
and builders

plan to put forth

to work with lenders
to

assist in

duction of essential

continue

will

techniques

to

the pro¬

housing. FHA

encourage

producing

for

new

better

and less costly dwellings—to encourage improvement in design of
— to
make further
in land planning—and to
improve our procedures and serv¬
ice.

living

space

progress

immediate outlook is one
limited housing production in

The
of

keeping with our economy and
National Defense needs. The long

savings banks conferences to de-

range

vise methods of reducing servicing
costs. I am confident that the volume of business is greater in the
lower cost field than elsewhere.

about which we can well be optimistic.

At

the

present

time

our

records

show that about 10% of the mort¬

Now

mean
num¬

reduced volume of busi¬

a

tunity to absorb

can

efforts have already been made in

have the

lenders will have

ness,

but

try.

entering into military service subsequent to the filing of the
mortgage insurance application
an

tell

dollar amount invested.

groups and

modified for the benefit of mortgagors

soon to

with the credit controls will
planning to handle a greater

country in
estimated

very

From

mortgages more attractive.

While it is too

being placed oh lower
housing, this factor together*

cost

brought direct benefits
million American families

1%

[s

213

from the date of issuan
investment point
this should make project

many
outstanding
thUt
must
be
di¬

emphasis

most

1950 volume of Title I

thatt the

.

to 20 years
ance.

so

.

to $8,100 per unit for

family

per

are

commitments

applications for commitments how the situation will develop, in
and eligibility
statements have my opinion, there is now nothing
been filed in our field offices.
in the present or the foreseeable
We are also doing a substantial future
to indicate that this is
business under Section 207, Rental anything but a temporary situaHousing. So far this year appli- tion, though it is impossible to
cations involving project mort- know. Under any circumstances, I
gages have amounted to just about believe lending institutions should
develop a program for the acqui¬
$49 million.
Property Improvement Loans sition of mortgages and with the

produced

authority

insuring

FHA

#

of

to

Society of Security

the present overall rate for 1951, with no unexpected increases

and 203(d) projects and I

ceilings would be and the typical loan was only $354.
intended to provide an incentive
During the year 1950 much more
to
build accommodations within housing for minority group occuthe paying capacities of those inpancy, both sale and rental, was

that if business continues

in labor or fuel costs and on a basis of normal and surtax of

his

get

the

The mortgage

•

Analysts, President Van Derzee estimated

the country Title VIII, Section 8

is also

*

steam-

great-

well as Section 203(d) of Title
II, is becoming operative in many
sections of the country. I have
recently seen in many parts of

insurance

may

the

are

as

ing upon number of rooms, etc.
Additional insurance authorization

ments

Its

accommodations, which

ly needed by the Military,
Likewise, Section 8 of Title I,

ing

1942, and double the

national average for non-irrigated farms.

Housing Act, is producing a very
large volume of excellent housing

bility would be provided in maxi¬
mortgage amounts, depend¬

mum

more

reduced from

report that Title VIII,, the Military
Housing provisions of the National

effectiy« in maintaining the hous-

kilowatt-hour for all of the company's plants were

company

mortgagor

to

been

to

appraised value but certain flexi-

projects averaging four rooms or

The

order

has

million. / Dividends'

$250

around

lo-

cality.

Lakeside Power Plant in 1920 after five years of experimentation
in another of its plants.
The average heat units per net generated

13,867 in

in

•

or

materials.

from July 1,

plants and supervises

amount

reserves

result lr} the pracPaying a premium to the

™

borrower

are

and

*V

..
-

just around 3/100
At the present time our

1%.
capital

re-

-?f competition, we hope

locality by the FHA under happy to see the industry producAs I have indicated, there is a
would be programmed ing such excellent housing accomr
by the Administrator of the Hous- modations for military use, as well wide variety of opinions concernand Hofrie Finance Agency in as for the average American fam- ihg the availability of mortgage
capital at the present time when
conformity with the need of spe- ily.
title

generating capacity should approximate
compared with 877,000 at the end of 1950.
power

written

each

this

Title VIII

The company does its own design and

avail-

be

or installations.
Furtherthe maximum number of
units to be insured in

stallation of two 120,000-kilowatt units of a proposed now
500,000kilowatt station, to be known as the Oak Creek Power
Plant, in
the southeast corner of Milwaukee County.

By the end of 1954,
1,130,000 kilowatts as

national

the

dwelling

by the Public Service Commission of Wisconsin

seven

area.

with

title would

new

plants

electric,

subsidiary, The Milwaukee
Transport Company, which is not consoli¬
dated.; It provides .localTransportation services by trolley and gas
buses and some street-cars
the Milwaukee metropolitan area.
The transport
company has recently been allowed an increase in

The

-

more,

6.5% gas and 2.5% heating.
The company has a transportation

Electric Railway and

connection

only in critical defense housing areas designated by the President as having, or about to have,
a substantial shortage
of housing
for immigrant workers at defense

Another subsidiary, Wisconsin
Michigan Power Company, serves, areas in east central and
northern portions of Wisconsin and in the northern peninsula of
Michigan. The various areas of the system are electrically inter¬
The

of

production

able

Natural Gas Company.

connected.

the

for

defense.
■'

'

renamed

; was

provide

FHA plan of mortgage in-

new

incentive

in

Wisconsin and upper Michigan.
Milwaukee, Racine, Kenosha and
are the
most important cities served.
Last year the
company acquired the electric property and business of Wisconsin
Gas & Electric Company, which
completely surrounded the parent
Wisconsin

ance

of

Title IX would

new

privately-owned housing required

Appleton

in

Housing Act that

would not favor the

we

Quate supply of funds for permasurance for privately-financed depaid to mortgagors have exceeded nent mortgage financing, construcfense housing. This would be used $27 million.
money has tightened. If this
as a supplement to
existing FHA
Regarding our operations under situation continues to develop^ it
can
create
programs in defense areas as an present conditions—first, let me
*~ an acute condition
a

Wisconsin Electric Power Company

counties

While

Of this

balance is about $12% billion, or
a little over half.
Losses on the
total amount of mortgage insur-

A

Wisconsin

37

vate lending institutions.

yet competition for loans may be¬
come
keener just a little later.

insurance written, the outstanding

have been proposed.

By OWEN ELY

and

bill has been

Mortgage money for permanent

financing is becoming tighter and

passed by

to

communities

a

the Senate. Because this
legislation is still in a formulative

ple fact the better for all concerned.

Public

of

the country.

is to permit underlying conditions

now,

show that it

meet the market demands

can

this very moment is the
"inflationary potential" of that
war.
What we tried to do then, and what we are
appar¬

ently trying to do

private industry to

from page17

effectiveness

31

gages on

under

of

60%

$9,450

new

$5,800
or

the

less.

homes are running
and approximately
mortgages are for
To meet this de¬
income field is,

mand in the lower

in

opinion, not only good busibut a definite challenge for

In

outlook,

my

toward

believe,

I

opinion,

better

production

we

are

planning

that

is

—

is

one

moving
toward

better geared

to market demands—we are mov¬

ing

toward

ment

a

the

soundest invest¬

country can have—better

housing for its people.
Toward that end the FHA

will

my

ness

give every help that can be given.

)

32

The Commercial and Financial Chronicle

(2072)

Continued

overall credit expansion and

from first page

Treasury Should Heed
Verdict of

removed

rates

had

The

unless interest

and

been permitted to rise.

significance and effectiveness

higher interest rates is not that

of

Free Market

a

been

the would-be bor¬
significance is

restrain

they

The

rower.

real

that interest rates

firmly

entrenched

for

10

over

The

End

would

not

some

of

surprise me
now when

from

years

if,
we

look back to these
made

in

end of an era.

the

That era, for want

Keynesian
John

of

marking

as

better name, might be called

a

the

policy decisions

March

British

The theories

era.

Maynard

economist, exerted

nant influence

the

Keynes,

domi¬

a

official financial

on

policy from the early years of the
great
depression
of
the
1930s
through
the
war
and
postwar
booms and up to the early part of
this year.

The

this

for

reasons

quite

are

influence

understandable.

The

Keynesian theory was born in a
period of mass unemployment and
unprecedented worldwide depres¬
sion.
It seemed to offer plausible

explanations
of

cures

fair

not

of

the

to

and

causes

troubles.

our

While it is

oversimplify

Lord
Keynes' arguments, the essence of
them
a

that

was

we

living in

were

mature economy and that people

saving too much money and
spending too little. Hence, we had
economic stagnation.
If the be¬
of

people

could

be

re¬

versed, Keynes suggested,, then
business, employment and prices
would

One

recover.

complish

the

to ac¬
it
was

way

reversal,

argued, was to make money very
plentiful and easily available at
low rates of interest.

This would

presumably discourage saving and
stimulate spending.

a

this

was

all.

The
form

new

super-money

money

or

Federal

the

was

For

Reserve.

the Federal Reserve buys a

when

government security from an indi¬
vidual

or

bank, it not only

a

additional

ates

before

had

creates

support

that never
existence, it

in

which

reserve

further

a

cre¬

money

been

bank

a

can

expansion

of

in the ratio of about 5 to 1.

money

In a free country the people are
the final arbiters of what they do
with their money, including their

government
securities
which
I
have described as a new form of

If people are in a
if you make it

super-money.

mood to spend and

attractive

more

to

easier for them

or

save, then they
spend.
And
by
people I mean not only individ¬
uals, but groups of people such
as
political
bodies,
businesses,
banks, insurance companies and

going

the

They

spend

may

be¬

they need goods and serv¬
They may spend because

ices.

they

afraid

are

that

goods

are

going to be scarce or higherpriced.
Groups may spend
to
Individuals

elections.

influence

institutions

or

spend
be¬
other invest¬

may

hands

their

money—and

on

depression, it became

been

even more

boom,

especially
from the political angle.
Some of
Lord Keynes'
more
ardent dis¬
ciples
discovered
new
twists
a

which promised that the political

of

managers

would

be

nobody

able

had

deliver

planned

a

in

economy

deliver

to

been

ever

what

able

to

the

past, namely, the
a nation eating
its cake and having it too.
We
were told, for
example, that large
governmental expenditures were

happy spectacle of

both

a

and

necessary

virtuous

a

stimqlant; that it didn't matter
how large the national debt be¬
came as

result, because

a

theJdebt

to

And

we

warned that if interest rates

were

allowed to

courting

rise,

disaster,

we

would be

both

national

international.

and
went

far

so

Indeed,

to

as

rate to

for

moment

a

our official policy
been changed.
Why

longer

believed

sanctify

interest
-

Why

has

is

it

term

of

rate

to

always

be

at

level

a

above

to

the

former

reason

is

policy had created

scores

of billions of dollars' worth
form

new

namely,
This

new

flooding
much

of

super

government
form
our

of

of

a

money,

securities.
money

economy

more

-

our

than

money

was

with

so

there

for

long

a

time,

that

money

This inflation has con¬

problem."
tinued

half

Three and

since.

ever

one-

when I last had
the pleasure of addressing you, I

policy

point out how easy-money
was

inflation

of

ago,

years

tried to

feeding
that

and

this

policy

fires

the

the

social

cost

dangerously

was

Form of

Super-Money

Under the recently abandoned
policy, government securities were
made almost

vertible

instantaneously con¬
ordinary money

Jn t o
without risk of

market

that

loss

was

on

a

pegged

officially




sup¬

levels

through

manipulation

of

was

the

will

months

After

Korea, the course of

flation accelerated at.
became
could

tion

ominous

so

be

a

it

due in no small

to the fact that

longer

no

This accelera¬

ignored.

was

in¬
that

pace

measure

and

artificial

pegged

prices

so

that they

could either spend it

invest

at

it

It

return.

of

lucrative

more

or

rates

this wholesale

was

liquidation of government securi¬
the

Federal

crux

that

Reserve

of the problem

our

monetary
and
fiscal
officials
finally had to face.
It was in

similar to the problem
England faced in 1947 and finally
many ways
resolved

by allowing the prices of
government
securities
to
seek

their

own

level in

a

free market.

Another factor that focused atten¬

tion

the

on

inflation

submit,

that

ment

and

downright

there

new

credit

the

volume

of

always

been

period

such

press

This has

money.

dangerous and in a
as
we
have been

going through,

it threatened dis¬

aster.
the

While

have
all

been

monetary steps that

taken

tance.

Let's have

the things

of

a

look at

a

few

a

that have happened

since March.

most

significant.

and

have

S.

U.

called

of mar¬
securities

Treasury

be what I earlier

to

ceased

the

hundred

One

billion dollars

fifty

ketable

perhaps

and

one,

they

True,

super-money.

still be converted into money,

can

but

has

conversion

the

costly

come

of

higher

prices

were

the

to

there is
real

implied,

or

which

Furthermore,

seller.

longer any assurance,

no

they

to the price at

as

can

Number two.

recognized
time in
to

The

Treasury has

publicly

over

for

the

first

decade that if it is

a

finance its

requirements with¬
out resorting to inflationary cred¬
it expansion, it must consider the

creasing the cost of rearmament.

to

least

companies,

ance

other

and

boom.

than

which

This

in

not

believe,

emphasize that I
nor

do

official advocates of the

I

think

new

pol¬

securities

and

the

rising trend of interest rates will
by themselves stop our inflation¬
trend.
I do maintain, how¬

ary

ever,

that there would have been

hope of effectively restraining

off

the

bank

get

other

or

receivables

and

bidding
embarking 011

this

Perhaps

do with

price

has

had

weakness

in

several

credit for

simple rea¬
son
they
haven't
enough
free
funds to go around.
This ration¬
ing is being buttressed by the
Voluntary Credit Agreement of
the banks, the life companies and
the investment bankers. The real

funds
bond

the

to

credit

it

is

the

meet

can

defense

conserved

effort

so

demands

and

of

help

in¬

the supply of needed goods

crease

Let

give

cite a few figures which
rough idea of how sudden¬

me

a

position

of

important

one

investors, the life insur¬

companies,

has

changed.

Without going into details, I esti¬
that the life companies had

mate

about $11 billion available for in¬
vestment in
12

1950, and that in the

months starting this May first,

lion.

offered

Treasury
the

whether

terms

or

market

the
give it,

liked

the

not, and when the Treas¬

in a position to rig the
market through Federal Reserve
manipulation.
was

ury

The

decline

will

believe, because of

be

I

due,

reduction in

a

refundings
and

of outstanding issues
drop in insurance company

a

sales
1950

of

life insurance

vested

bonds.

government

not

In

companies in¬

only their $11

billion

$13

The

billion

exchange of

old 2V2S

of

into

2%% bonds has, for all prac¬

new

tical purposes, immobilized nearly

8% of the total marketable public
debt.
This, of course, will sim¬

plify the problem of the Federal
Reserve in providing an orderly
bond

government

market, which
is quite a different thing from a
pegged market.
Number four.

Reserve is

buyer,

no

Since the Federal

longer

important

an

commitments

$2

somewhere

In

being
sion

absorbed

of

the

without

credit

expan¬

base.

Number

that

five.

crisis would

that

The

domestic

a

be

the

in

or

$8

mated

will

precipitated bj' a
price of govern¬

securities to

below

financial

our

argument

institutions

would be made insolvent

sult has

and

par

as

a

le-

Number

six.

Even

though

the

Federal Reserve may at some fu¬
ture date find it wise to support
or

even

though
an

peg

the market, and

we

may

easy-money

will

investors

policy,
feel

even

complicated

by the fact that during
12

months

will

it

the next

have

to

ing issues and must raise
undetermined
of

new

number

of

have

last

remain

billion

available,

make

to

they

payments for

Thus there will

year.

only about $6 billion

net

investments and commit¬

new

ments, which is in sharp contrast

year's figure of $13
This

the

is

first

have

had

$14

or

time

nearly two decades that life

in

com¬

to

figure out
where their money is coming from
before they invest.
No longer is
their

problem

lets,

as

after

was

of finding out¬

one

the

a

until

case

the war, and

they in

no

well

longer

are

position of knowing they

sell government bonds by the

billions in

be

to finance defense.

money

prepared

billions
fall
a

of

due.

refinance

to

savings bonds
Unless

we

would

financing

enormous

to the

without

a

my

guaranteed and loss-

they

again

to

can

me

ment

may

analysis

the Federal

they

re-

Federal Reserve.

Verdict of Free Market
I

am

the

sure

of

none

Treasury

know how

us

plans

to

problem.

its

meet

Its

solution

require great wisdom, greater

man

or

It

is

like

than

is

possessed by any

small group of men.

for

to

Might

this

not

the

to

Treasury
to

verdict of

be

the

financial

by

should

suggestion.

a

turn

of

source

devised

I

reason

venture

advised

wisdom

namely

man,

well

greatest
yet

the

to

free market?

a

For the past several years, gov¬

throughout

have been

trols,

the

"world

trying to shortcut free

and

to

and

economy

mastermind

finances.

our

regulations,

and

our

Con¬

of

host

a

other devices have been tried, and

yet,

how

matter

no

cleverly de¬

they

almost invariably
have worked
crudely and have
created more problems than they
solved.
Thus
the
tendency has
for

been

the

controls

for slill

need

point is

breed

to

controls

more

reached

the

until

where

men

resist the controls and evade them

by black, gray and various other
shady

We

forgotten how won¬

efficient, free markets are

derful!
in

methods.

and

markets
to have

seem

getting

necessary

things accom¬

plished. The reason for this ef¬
ficiency is that the mdrket is the
meeting place and clearing house
all

of

that

few

everybody,-not just a

people,

about

knows

any

given situation and outlook.
To be

specific: It
during
the

that

able

next
be

any

large

funds avail¬

of long-term

investors

institutional

from

unlikely
several

seems

will

there

months
volume

purchase of additional gov¬
ernment
bonds.
Thus
it would
that the

seem

of the funds

source

the Treasury
to

needs is most likely
found from individuals who

be

to

induced

itself
and

want them.

is

right and

if

be

to

save

and

induced
put idle cash to work through

short-

medium-term

or

govern¬

ment paper.

First, as to possible new sav¬
ings by individuals: I imagine:
of

most

the

us

in

doubtfu

are

will

Treasury

whether

successful
amounts of

be

large

attracting

campaigns, no
intense, to sell the
present, brands of savings bonds.
Possibly a higher interest rate
would help, and possibly the re¬
new

how

would,

sults

sional

that

by

money

matter

given

never

have

the Treasury must do most of this

such

new

they

to

are

supply, with all that
imply inflation-wise,

money

this

whenever

verse

many

as

dangerous further expansion of

the

free market in order to raise funds

If

still,

a

billions

Also, beginning next year it must

from those who might be

for

refi¬

$52 billion of matur¬

some

made

of

return

greatly

might

to

later

rate, the Treasury's

any

now

perhaps $2 billion of commitments

can

been exploded.

Treasury,

for the

panies

international

$14

or

year starting this May
however, out of their esti¬

billion.

is

$13

the

first,

to last

taking place

is

around

they in¬
invest

to

billion.

tle

liquidation

Thus

promised

or

balance, of government
securities, it means that what lit¬
on

additional

an

billion.

$3

or

vested

for

of
„

war,

At;
is

task

of available cash but made future
Number three.
some

the

signed,

services.

oart

to start refunding
their short-term obligations into
long-term issues may have been

markets

that

and

advised

limited volume of avail¬

new

the

who
the

as

they will have only about $8 bil¬

the

those
after

our

able

Jatter

is

bor¬

.

ernments

ment,

the

the

this voluntary agree¬
I understand it, is to see

of

purpose

substantial

a

makes

wisdom

the

Treasury

this

financing

Money, then, is starting to get
tight and lenders are beginning to

large,

very

the

problems
facing the Treasury very real and
very difficult.
It new looks as if

will

ration

be

during

All

com¬

Money Getting Tighter

building

1951.

something

modities.

that

to

rower

for materials or
expansion plans.

the recent pronounced

continue

addition

likely

in

new

mortgage
requirements of in¬

will

in

course

about

to

more

hesitant

more

when

icy believe, that the unpegging of
government

to

carefully and to be

ance

contrast

froth

fense Loan prior to Pearl Harbor,

decline

no

sharp

of the

accommodations, it begins play¬
ing its cards a little closer to the
chest.
It begins to scrutinize its

life insur¬

they would willingly hold.

is

It

this is likely to take

me

easy,

as

a

the

ail

do

After all, when a business
it
is
difficult, rather

group of

pension

to

bor¬

discovers

attempt to

institutions

enough

would-be

funds

some

an

give investors such

ment

Effect of Changed Policy

do

clearly

was

longer

no

decline

a

the

money,

and

being created through

with

seems

requirements of poten¬

tial

the
in¬

is

provide

to

rowers

at

for

ances

and the demand for

right.
discovered

things they would like to do.

of

sale

government bonds now involves a

loss

of

shrunk

has

be¬

now

the

since

not

volume

credit

suddenly

inventories
Number

the

if

Thursday, May 17, 1951

.

than the supply for the indefinite
future. Even after making allow¬

nance

saving

cure-

doubt if we
their impor¬

inflation, I
overemphasize

can

not

are

for

by

investors,

attractive

costly,

have

We

govern¬

especially

less

new

I

new

powerful.

of

institutional

become

potential

the

very

securities,

banks

has

devel¬

fully.

that

are

several

new

liquidation

in

.

dustry

be reflected

forces at work
Now

these

likely

again

take

however,

that

turning
to expand

we were

all

opments to

lutely frank, that
the printing

on

problem in this country

that

was

immediacy

for

drastically.

people, in increas¬

ing numbers, were deciding it was
to their advantage to turn their

probably

gov¬

not

are

super-money
the visible future.

It

remain

In other words,

securities

supply of money—and this
manipulation meant, to be abso¬

market what it wanted to

I should like to

Government Securities—New

former fixed

of policy dating from the first De¬

high.

was

rapidly shrinking in value.

their

government

always

become

to

ly the

domestic

greatest

our

goods and services available
purchase

at

will

par.

ernment

March

is

the

that

were

a^ove

tion

was

seems

rates

prices

buyers of its securities.
The
offer of the new 2%% issue in

on

been aban¬

par

interest

that

assume

bond

needs and

bonds?
shall

are

way

safely

notably since the end of the war.
As
a * result,
President Truman
said over five years ago, "Infla¬

to

that

Fundamentally, it

me,

mood

spending

ties

21/2%

government

doned?

for

no

necessary

has support of government

securities

were

now

purely artificial maxi¬

a

stop them, not even

government securities into cash at

examine

us

why

long

the

interest

zero.

Let

mum

some

advocate

gradual reduction of the

able to

by the exercise of despotic powers.
This country has been in a

owed

we

ourselves.

were

in relation to

maintained

no

government in the world has ever

in

only

the

of

and if demand and
to be balanced.
The

supply,

supply

there

measuring

any

demand for money
the

if

strait-jacket

a

be

to

be converted into
We have,
ments
are
more
attractive than money in the future.
cash
or
its
recent
equivalent— therefore, in the short space of a
few weeks, cut down drastically
government securities.
Whatever
the volume of liquid and riskless
the reasons, they will spend
so
funds that can readily be diverted
long as they are in the mood to do
to the spending stream.
so
and so long as they can lay
think

they

cause

If this theory was attractive in
attractive

is

to

like.

cause

of

out

be taken

must

than to

spend

are

were

havior

Nor

conversion of this

into
ordinary
bank deposits became
particularly mischievous
when¬
ever
the
only buyer that was
willing to pay the pegged price

of

Era

an

shall be able to review this period
with better perspective, we shall

of

ported.
mass

years.

It

curb¬

ing inflation unless the pegs had

.

be

better

security
a

profes¬
were

for placing
suspect, however,

commission

bonds.
as

if

salesmen

far

I
as

the

individual

is

Reserve does not

re¬

concerned, the government might

and

tap

be

easy

turn

on

the

credit, it

seems

that the demand for invest¬
funds is likely to

be larger

wise

to

consider

inducement,

such

as

exemption, r This is
sonal

income

taxes

some-

other

limited tax
because per¬
lake a large

.Volume 173-

slice

of

Number 5012

interest

ducing

.

.

.

income, thus

The Commercial and. Financial Chronicle

re¬

from

the :discovery
essential
it

production

of

is considered io

be

and

additional oil

welfare.

nations

the

to

The State of Trade and
one-year

is

vital

more

even

Steel

the

to

more

and spend less, why
be illogical or revolu¬

it

tionary to offer

advantage
to those who will forego spending
im order

When

tax

a

save?

to

turn to the

we

potentiali¬
the

securities,

government

fact

be well established

to

large amounts of

that

being

money are

held by individuals as well as by
businesses

in

the

to

cash balances,

could

ey

Perhaps this

term government

of

rate

return

attractive.

mon¬

short-

securities if the
sufficiently

were

believe the time has

I

when

come

into

coaxed

be

should discard the

we

deal

Operations Rise to Within 0.1 Point of

fostered during the past
that short-term interest
should necessarily be lower

years,

rates

than

rates. The idea
that there is some particular ideal
long-term

interest

yield

curve

govern¬

on

ment securities is of

comparative¬

ly

was

origin and

recent

part and

parcel of controlled money mar¬
kets.

Prior

sion, it
short

the

to

rates, and frequently high shortterm rates attracted funds needed
to

avert

cushion

or

critical sit¬

a

uation.
In

to

The

me.

customers

you

savings banks and we in
the life insurance business serve

merely tolerated,
as they were under the prevailing
economic thinking of the 193C's.
are

longer

no

emerging again to
their rightful place, for they are
again being recognized as part of
the
mass
army
of
capitalists
They

are

needed

now

to

the

supply
nation's

the

meet

funds

defense

to
and

production requirements. We need
more of these savers,
and if in¬
rates

terest
tract

have

rise

to

to

because it

into

borrow

to

funds, including the
government, must be ready to pay
the necessary price.
The

second

conclusion

that

inescapable is that

seems

me

government will be wiser to fi¬
its expanded requirements

nance

from

It is obvious that

There's
items

the

savings

rates ,that

the

of

are

a

"The Iron

told

Air Force to

Some

items

been

encouraged

*

•

stand

inflation.

much

Structural,
are

already

of

output of these products, asserts

this trade authority.

This also highlights the problem of how to allot free tonnage

,

products equitably when nearly all the output is controlled.
Auto makers

This is

that

the

large shipment of alloy bar stock from Ger¬
way they are keeping output high.

a

one

Iron

operating

and

rate

capacity

of

Steel

steel

the

for

Institute

announced

companies

entire

having

industry

will

this week

income

93% of the
103.9% of

week ago, or an increase of 0.2 of

The scheduled rate

the

point.

a

current week

is

only

0.1 point below

the all-time record high for the industry.

weapon

in

short run, but may in

the

long

run

the

positive danger
itself. The extremes
and 'right' in the world

<of

left'

today are mediated in the great
democracies by a strong middle
It would

class.

deed

if

be

a

democracy

tragedy

should

in¬

perish

because, in the supposed interest
of its own defense, it liquidated

guardian

this

of

democratic

in¬

stitutions."

(Special to The Financial

ST.

it stood at 101.3%

ago

Electric
The

Output Rises Moderately the Past Week

of electrical energy distributed
by the electric
light and power industry for the week ended May 12, 1951, was
estimated at 6,566,813,000 kwh., according to the Edison* Electric
amount

Institute.

vious

7,113,000 kwh. above that of the pre¬
week, 702,487,000 kwh., or 12.0% above the total output for

the week ended

the

was

May 13, 1950, and 1,309,837,000 kwh. in

output reported for the corresponding

period two

excess

years

of

ago.

Carloadings Fall 2.6% Under Previous Week

Haeseker

and

North.

Joins Waddell & Reed
(Special to The Financial

Chronicle)

TAMPA, Fla.—Harry C. Greene
is with Waddell &

Reed, Inc.




a

year

nervous

ago.

and

uncertain last week

despfie bullish crop developments.
Early
damage to the Winter wheat crop received
by recent repprts of private forecasters indicating
crop since
1943.
The estimate is for a yield of

declined

serious

of

confirmation
the

smallest

625,000,000

bushels, or 125,000,000 bushels less than was raised
Weakness in cotn was largely influenced by the belief
that the acreage planted to the yellow cereal will be larger than
originally scheduled. Export movement of corn continued in good
last year.

volume.

Field work and

planting of the

new

corn

crop

was

Trading in all grain futures

re¬

the

on

Chicago Board of Trade increased the past week.
Sales totaled
218,782,000 bushels, or a daily average of 36,464,000 bushels, the
latter comparing with 25,803,000 the previous week, and 55,227,000
in the same week last year.

Some

flours and

improvement in bookings of hard Winter wheat bakery
Spring wheat varieties was noted in the first half of

the week.

The

Raw sugar

industrial

market

cocoa

was

easier in the absence of outside

manufacturing interests.

prices continued to rise aided by good refiner and

demand.

Activity in refined

sugar

broadened consider¬

ably late in the week.

Trading in coffee

slow with prices holding in a nar¬
oil and lard were depressed, reflecting

was very

Cottonseed

range.

easiness in hogs and other vegetable oils.
and lambs extended the

Prices for cattle, sheep

decline of recent weeks.

•

Prices for spot cotton and the May futures contract remained

at ceiling levels last week.
distant deliveries

as

Some easiness appeared in the more
the result of liquidation influenced by more

favorable weather conditions reported in some sections of the

belt,
improvement in the war news from Korea, and continued dullness
in the cotton gray goods market.
Another bullish feature was the
announcement of an.addition of

the

803,337

a

decrease of 21,325 cars, or 2.6%

below

preceding week.
The

8%

week's

above

the

35,010 cars,

or

total

represented

an

increase

of

59,341 cars, or
an increase of

corresponding week in 1950, and
4.6'% above the comparable period of 1949.

of trade.
The demand among shoppers for soft goods
relatively higher than that for durables in many communities,

despite widespread promotions of the latter.
Total dollar volume of retail food
week and

there
as

the United States and

of

down

3,000-unit production gain by Chrysler over the
a decline by Kaiser-Frazer, which suspended

half-day

a

body-supplier

labor

on

Pack¬

Wednesday of the past week because

trouble,

and

Plymouth

declined

output

slightly because of labor trouble, Ward's added.
For

the

United

States

alone, total output was 148,381 units
against last week's revised total of 144,794 units, and in the like
week of last year 167,282.
Canadian output in the week totaled
9,730 units, compared with 9,693 units
in the comparable 1950 week.
and

cars

7.045

a

week ago and 7,198 units

output for the current week

made

of 117,022

up

31,359 trucks built in the United States and

cars

and

a

total

of

2,685 trucks built in Canada.

Commercial

and

industrial failures

rose

181

to

in

the week

Bradstreet,

from the 321 recorded in 1939.

those having

week's

increase occurred

cuts

rose

a year

earlier.

While

of fresh

in the period ended on Wednesday

unchanged to 4% above

Regional estimates varied from levels of
these percentages:
ago.

a

a

ago

year

Midwest +1 to +5; East, Northwest, and
+4; South + 3 to +7, and Southwest +2 to +6.

England and

New

Pacific Coast 0 to

continued

to be no perceptible change in wholesale
general unwillingness on the part of retailers

orders in the week; a
to

place further orders in view of ample inventories was somewhat
a gradual increase in government bookings for the de¬
fense program.
The total dollar volume of ordering was moder¬
offset by

ately above the level for the similar 1950 period. The number of
buyers attending various wholesale centers was slightly above
that of last week and of

from

Federal

the

a

year ago.

stbre sales

Department

on

a

country-wide

Board's

Reserve

index

for

basis,
the

as

week

taken
ended

5, 1951, increased 8% from the like period of last year.
compared with an increase of 3% in the previous week,
an increase of 6%
for the four weeks ended May 5, 1951.

May
and

For the year

to date department store sales registered an advance

12%.

higher sales volume level than that for the like period of last year.

According to the Federal Reserve.Board's index,.department
sales in New York City for the weekly period of May 5,

store

1951, advanced

preceding
increase

of

9%

increase

an
was

the year to date,

last year.

In the
registered above the

10% from the like period of last year.

week

similar week of 1950.

small casualties,
to 47 from 28, but

among

liabilities under $5,000, which

did not reach last year's level of 49,

moderately above the level of

able weather and gift buying for Mother's Day which resulted in a

Inc., reports. ' Although casualties were down somewhat from a
year ago when 217 occurred, they exceeded the 1949 total of 171.
Continuing far below the prewar level, failures were off 44%
of the

'vn

Retail trade in New York last week was stimulated by favor¬

Business Failures Advance for Week

All

'by

of

ended May 10 from 1-33 in the preceding week. Dun &

();

meat, some canned produce and delicacies,
dairy products was
sufficient magnitude to compensate for this.

This
was

;

increased somewhat in the

much consumer resistance to such higher-priced items

a year ago.

operations for two weeks for defense program preparations.
was

was

was

some

year

previous week offset
ard

the

47,600

prevalence of mild weather throughout much of the
to increase consumer spending slightly in the period
ended on Wednesday of last week; total dollar volume of con¬
sumer's goods purchased was slightly above the level for the
similar period in 1950, states Dun & Bradstreet, Inc., in its weekly

There
a

with

nation helped

Total retail dollar volume

past week, according to "Ward's Automotive Reports,"
158,111 units, compared with the previous week's total of

Ward's said

Total sales in the

compared

Trade Volume Stimulated by Mild Weather

of last week was estimated to be from

Canada the

154,487 (revised) units and 174,480 units

bales,

The

Output Rises Slightly in Latest Week But Falls

Combined motor vehicle production in

72,900

the call for fresh fruits, vegetables and many

Far Short of Year Ago

totaled

were

previous week and 210,100 in the corresponding week last year.
Mill demand was rather limited and mostly for prompt shipment.
Interest in cotton for export was somewhat improved.
Business
in cotton gray cloth markets was confined largely to resales, with
prices for most print cloth constructions trending downward.

of

Auto

markets

spot

summary

freight for the week ended May 5, 1951,
according to the Association of American

revenue

cars,

200,000 bales-to the cotton export

Activity in spot markets increased last week.

was

Loadings of

PETERSBURG, Fla.—Har¬

L.

Wheat

reports

•

.

total

The current

Chronicle)

Frank J.
Schneider, Jr., are now with A.
M. Kidder & Co., 400 Beach Drive,
vey

were

ten

A year

of the old capacity and amounted to 1,931,000 tons.

Total

Two With A. M. Kidder

futures markets

production yielded 2,057,000 tons.

prove a

to democracy

the corresponding date

on

Grain

quota, bringing total allocations for the season to 3,696,000 bales.

that penalizes
than it penalizes

saving even more
spending. The failure to exempt
saving when income taxes are
very high
will not only reduce
their power to prevent inflation

recorded

This week's operating rate is equivalent to 2,077,000 tons of
ingots and castings for the entire industry, compared to
2,073,000 a week ago.
A month ago the rate was 102.9% and
steel

tax may become a dangerous and
perverse

&

be

capacity for the week beginning May 14, 1951, based on the indus¬
try's increased capacity of Jan. 1, compared to a rate of 103.7% a

they

Muir, President, of the Royal Bank
of
Canada,., recently said: "The

wholesale commodity price index, compiled by
Bradstreet, Inc., shoved irregularly in a narrow range
during the past week. Th<£ index closed at 321.36 on April 8, down
slightly from 321.77 a week earlier, but still well above the 259.85
Dun

row

American

steelmaking

Commodity Price Index Recedes Further

daily

are

just bought

The

The

interest coupled with slow demand from

leaving no stone unturned in their search for
alloy bars or semi-finished alloy.
Their continued high produc¬
tion defies statistical analysis, states "The Iron Age."
One com¬
pany

Wholesale

ported making good progress,

Steel officials believe that percentage set-asides for
July will
higher than June on every product.
If this proves true some
companies who have products such as structural and plates hover¬
ing just under 100% control for June will find July quotas taking
total

The index represents the gum total of the price
per pound of 31
foods in general use and it$ chief function is to show the
general
trend of food prices at tks wholesale level.

the

squeeze

be

their

of $5.89 and 20.5%
above the pre-Korea level of $5.96.
Compared with the year's high of $7.31 touched on Feb. 20, there
was a drop of 1.8%.

requests

under CMP.

copper

plates and oil country goods traveling the control path
crowding total output.

totaled

the

steel, aluminum and

can't

Railroads, representing

of

such

by the
place orders for all aluminum he might conceivably

steel

index

with prices generally moving lower.

Age" this week he had

venture,; to,,;save or, even to re¬
tain past, savings.
As Mr. James

instrument

bring

heavy hand will be needed to

during the next 12 months.

use

steps to

tendency to order well ahead of actual need where
heavily mortgaged by DO's.
One defense producer

destroy the incentive to work, to

blunt

take

people

high

so

will

noted

a

are

than to attempt to finance through
tax

they

water out of requests for

to
our

that

line, declares this trade magazine.

at¬

them, then those who need

metal

ordering a 40% cut in all DO orders
policy. The directive is encouraging
indicates official Washington is aware of inflated metal

requests—and

many.

the

for

Ground

The wholesale food price index, compiled by Dun & Bradstreet, Inc., turned higher last week, continuing the up-and-down
movement of the past few weeks.
The May 8 figure rose to $7.18,
from $7.14 the week before.
It was up 21.9% over the year-ago

"The

The recent NPA directive

conclusion, two things seem

clear
in

requests

according ,to

get-tough policy
under the Controlled
a

for nickel is in line with this

great depres¬

not at ajl unusual tor
to exceed long-term

was

rates

inflated

Plan,

preparing

Iron Age," national metalworking weekly. This policy is being forced upon them by urgent
requests from military and so-called "essential" users that total
far more than available production of some items.

notion,
20

with

Materials

idle

of

form

over

Defense production officials are

in the short-term market for

seems

July 1 to mid-1952—will
the "hump" of the defense program.

All-Time High Record

money

would

Industry

civilians—from

on

the United States

carry

be.true, and I believe it is,

that ;it

squeeze

national welfare that people slve

•'

Wholesale Food Price Index Picks Up
The Past Week

the

ment grants
special tax advan¬
tages to the oil industry because

ties

5

page

effectiveness of the
rate of return. The govern¬

gross

If

Continued

33

(2073)

of

5%

was

For the four weeks ended May 5, 1951, an
above, that of a year ago, and for

recorded

volume advanced 12% from the like period of
-

.

34

The Commercial and Financial Chronicle

(2074)

by a lot more down broker who'll decide when a more but it's a lot safer. But
75%
margin was whittled why go short here at all! The
generally anticipated.
❖
*
*
down enough to call for addi- time to do that is on strength,

lowed
than

Tomorrow's
Markets

Well the up

came

of

the

Walter

tional cash.

and the
In any event, if you're planperiod
ning
on going short why not
promptly
began
singing
hnv
rail
and
cm
qhnrt
cheerful songs again.
Three
y.
.?
* r
weeks ago, when the market against it.
It 11 cost a little

pessimists

Whyte

a

Says—

,

above their old

highs, "a

new

are

is

this

stocks

from
Sjs

sjs

that

fact

The
seldom

crowd

follow

is

does

one

crowd.

makes

*

sis

•

..

like

looks

here, I wish to empha¬

tems

lines.

private
Some time ago I

tioned

a

or

pipe

any

men¬

market characteristic

that

10.

At this

afternoon)

s|s

market

writing (Tuesday
looks like the

it

has

about

completed
A month or so ago when
its 10-day down move and a
the
market was
down the
rally might be underway in
opinion was that prices would the immediate future.
go
lower but
eventually
*
*
*
everything would go up. This
Where
such a
rally will
column took a different tack.
I
It said the market was low carry them is something
can't answer. Probably about
enough for the time being and
10 points from the current
a rally was right around the
>

corner.But; in¬

proverbial
stead of

by

more

lot of

a

would

be

up,

down followed

I thought there
up fol-

immediate

„

But somewhere between

low.

the end of

May and the end of

June I believe there'll be

other setback that

can

around 230.
❖

Pacific Coast
Securities
Orders

Executed

on

Pacific Coast Exchanges

:

move

to

'

after

purposes

satisfy¬

defense needs will obvi¬

our

production

stands

Thus,

our

total

or

falls

still

backward.

/
and

more

tion—the

the

of

quently heir to, but I would
only confuse you; besides I'd
have to cite examples which
would
I'm

call

not

for

research

inclined

to

do

and
that.

would

for

Members

,

New

that

New

York

Stock

York

Curb

Exchange (Associate)
Stock Exchange

San

his

question

Exchange

sales

and

Francisco

Chicago Board of
14 Wall Street

COrtlandt

,

7-4150

Trade

the

on

short

percentage

protection be taken

up

of

with

New York 5, N. Y.
Teletype NY 1-928

Private Wires to Principal Offices

San

Incidentally, may I suggest
to G. H. L., of Miami Beach,

Francisco—Santa

margin clerk.

Any state¬

ment I make would

Barbara

Monterey—Oakland—Sacramento*
Fresno—Santa

his

binding

on

hardly be

his broker. In the

Rosa




final

analysis it would be the

that

national

carefully

able

to

business

in normal

get

And

left

less

investment

over

means

proach

to

all

of

strain

upon

our

by

economy

increasing the total output.
Now

real

single

the

now

ap¬

economic

confront

defense task.

our

us

bearing

in

mind

only production that

provide

can

abundance.

governmental

these

.

most Economic

First

civilian

put

analysis, all of

needs

both

our

military and

are

Therefore,

have available

we

all purposes in the
we

can

long

produce—no

less.

■' -1

This

'

%

total

current

run

tor

what

and

more

no

; «.'•

"

production,

and

foreseeable

under
circum¬

stances, must be divided among
three great purposes. One of these
purposes is

—which

most of the

that families all

living.

goods,

food,

must

be

sonal
and

is

.hard
second

part

of

production

or

In other
and

The

which

to

devoted

material

volved

clothing,

output

vestment.

standard

consumption

forth.

purpose

total

our

their

Personal

and 'so

great

over

maintain

things
the country

business

in¬

words, just

manpower

as

in¬

are

in

making things for per¬
consumption, so material

manpower

used

are

by

our

for

and

civilian

goods

process

and

use

for

both

military

example, the totality of all

investment

We

the

mean

more

an

rate

annual

billion

in

the

sumption,

than

into

but

the

portion

personal

nonetheless

con¬

it

vital because it is at the
industrial progress.

very

of

•

core

our

The

third great purpose to which
national

output

devoted

is

our

production

or

is

comprises

those
things
jointly through
government, instead of doing pri¬

which

people

do

billion

in

the

first

half

ond half of

1952.

This

uniform prices

Constitution is to provide for
defense. It is this re¬

common

providing for>the

defense

which

causing government
expand rapidly.

is

now

programs

The strain

to

upon

our

economy arises from the fact
that as the govermental programs
grow

because

of

rising

defnese, there is less left

the_ other two great
which

I

have

national
over

purposes

for

to

referred—personal

consumption and business invest¬
ment.

This

essence

is what creates

the strain upon our
economy. Less
left over for personal
consump¬
tion means that the people have
to

do

without

things

-

that

they

and
pro¬

willing to
hours
which

production.

We must

the scientific study and

natural

which

We

mean

must

more

make

the

resources

activities which will

productive
so

in

price

we

sound

solution

carried
year

economy

constant

duction

would

severe

pro¬

become

unbearable..

even

or

enormous

It

cur¬

tailment of personal consumption.
would also force business in¬

It

down

vestment

that
be

to

iow

so

level

a

productive strength would

our

weakened

for the long
pull.
saving factor, arising out
genius of the American

But the

the

of

is that we do not have
impose the burden of national

economy,

upon

gressive

constant

a

we

can

The

pro¬

$287

billion, a

billion.

In

In

1950,

first

rate

$307 billion,

about

was

it

rose

to

garin. of about $20

the

annual

production

or

in 1949

economy

billion.

half

is

of

1951,

estimated

at

$20 billion higher
than for the year 1950.. It is.fur¬
or

ther estimated

that, by the second

hall' of this year, the annual
can

further

to

rise

to

nearly

be

can

on an

and

more

about

1952,
by the

Thus, by the

total output

billion

$25

higher

annual basis than it is now,

than $65

more

than it

was

billion higher

in 1949.

These figures

which I have just

been

citing are not based
changes in the price level.

enough to
at the

Nor

a

are

They

estimates

manpower

are

based

upon

our in¬
financial
technology.

resources,

equipment,

resources,

They

inflation, and

time carry the heavy

If

achieve this national

we

nomic

growth—and

much

strain

will

eco¬

can—how

we

the

expanding

defense program impose upon our'

economy?

As I have said, this in¬
two questions—the effect

volves

personal

upon

the

effect

consumption, and
business invest¬

upon

ment.
*

In

'

the

of

case

sumption,

defense

a

-

:

•

personal

con-'

of ,;

program

the size contemplated, if our econ¬
omy

grows

as

have

about

this

personal

it

would

The

consumption

fairly

and

should,

effect:

constant

the

total

should

end

of

between

1952.

The
.

will need to be cut back sharply
but by no means cri ically. This
cutback

will

about

be

compen¬

sated for by

increasing supplies of ;
soft goods, the most important of
which, of course, is: food.: Thus '

the defense program will prevent:
us from
making the yearly prog-.
in consumption and standards :
living which we could other-:

ress

of

wise

make.

It

will

force

to *

us

sacrifice this rate of progress. And "
since
personal incomes will be

rising rapidly; while total con-"
sumption must be held faifly con- '
stant, we will be forced to make

-

sacrifices

in

the

form

of

fairly »

spending—f

through higher taxes, credit con- "
trois, and vigorous savings pro-:
grams. Only if these measures to

•

restrain

excessive

purchasing
adopted will it be pos¬
sible for price and wage stabiliza- '
power are

tion

to

be

sacrifices
but

effective.

which

These
must

we

are'

make,

since

they will still leave us
higher standards of 'living:

with
than

World

enjoyed"

ever

War

higher
those

-

we

II,

standards

enjoyed

beforev

and

infinitely •'
living than

of

anywhere

else

in

the

world, to say that the defense
program
imposes
an
excessive

<

strain upon our economy is a com-

•

plete misreading of the lac!s and '
a
complete failure to appreciate :
the gravity of the international
problems which we must meet.
.

With

the

levels

of

production

for defense and for civilian

con¬

out¬

can

servative
our

of actual

years

dustrial

overcome

vsame

a

production-

up

defense burden which world con-;
ditions force upon us.

upon

grow over the next
the product of super¬
optimism.. They are con¬

economy

two

shall within

we

build

sumption indicated above, how
dollar of constant value. much of the resources of our ecoh- '
these estimates of how omy would remain available for *

measurements

put in

It

$330

the first half of

end of next year, our

are

rate

rise to about $320 billion.

can

two

drastic restraints upon

output

$267

the

a

and growing economy,
gradually lighten the ef¬

total

our

static

or

Instead, through

economy.

a

now

indeed

necessitate

for

consumption of durables, such as
automobiles and other hard goods,

output, the expanding
imposed by the defense

program

today

pay

to remain

or

strain

would

of

or

total

were

level

must

through,

or

remain

our

our

year

tomorrqw. As the
expansion plans now being
undertaken by private enterprise
with government stimulation are

realistic.

a

a

vast

prices) to make the compari¬

If

in

This is part of the

ary pressures.

sons

at

increase

strength

add to the immediate inflation- '

of

ficial

in

are

(fourth quarter of

considerably

of

of

the'tools

public investment in certain types

1950

by

sponsibility

level

be

must

inventiveness

sec¬

expansion,

.'All of these figures

omy.

second half of 1952.

common

1952,

for the strain upon our econ¬

son

and

the

sec¬

which is obvious from the reading
of the figures, is the primary rea¬

billion

our

of

nearly $90 billion in the

but

of the first mentioned in

this

almost $85

year,

vately as individuals or as private
organizations. The necessary func¬
tions of government arie
manifold,
one

of

than $70 billion in the

of

goes

half

at

$55

annual rate of

an

half of this

and

than

more

first

will rise to

more

ond

of

much

smaller

in

longer

production.

gov¬

running

programs,

fect of this burden.

which

of

(including

years, reflecting the expan¬
sion of the defense program.
For

The portion of our total na¬
tional output which
goes into this
kind
of
business
investment is
use.

size

total

eral

industrial system in
building the
plants and tools, etc., which man-, defense
ufacture

the

programs

Federal, State and local) will ex¬
pand greatly over the next sev¬

personal consumption

means

to

all,

Problem

supplied from the out¬
production of our economy.

or

of

government

year,

material

what

—

the facts?

are

ernmental

Production Expansion—Our Fore¬

in¬

programs

cluding national defense

The

problem of expanding production
is even more important than the
problem of controlling: inflation,

In the final

high

a

development
difficulty in expanding that pro¬
which means more production. In
capacity which in the long
the
very
short run, these very
run we must rely upon to reduce

and

fundamental

problems which

: and,

encourage

ductive

the

in view of

growth

seek requires

now

should

we

duction..

three great purposes — personal
consumption, business investment,

most

economic

must

we

work

of

to

Schwabacher & Co.

be

times.

peace

the

produc¬

more

build-up

includes

the market is fre¬

This
which

get
the
fertilizer
equipment which mean more

strength and the expansion of the
real output
of our economy—is

need

greater de¬
10-day de¬

American economy.

farmers

ously be greater than if

of

:!<

❖

I could go into
tail
about
this
ferred

an¬

carry

down

industrials

the

:

are presented as
those of the author only.]

by
the demon-'
accomplishment of the

and plants which mean more
pro¬
duction. We must make sure that,

employed a delayed ac¬
the tion that called for perform¬ because
inflation
results
from
good ance that moved in units of scarcities, and in the long run it is
the

is besides the point.

guesses

the

size that I don't have any sys¬

Anybody can
sell them
when they're going down. It
doesn't
take any initiative.
All

written,
and

down

are

other

ing

being

speaking of
"new evalua¬ plentiful.
tions," they mention the word what the market
*

They

8

page

to year, as it will if we try
enough, the amount left over

year

for

"Y~

#

reactions are
Before telling you

"reaction."

Chronicle.

the

those of

national

exceeded

strated

encourage

of warnings of new

Instead

direct.

time coincide with

Our Serious Problem
hard

reaction to alert the wary.

As

Some of these forecasts
more

article do not necessarily at any

of

past, which many people thought
were
unrealistic, but which in fact

business

too

evaluation of the market will
have to be made."

this

Production, Not Inflation,

that

selling not be postponed
long.
Because even if
get below 252, and the rails they were going higher there
in the meantime refuse to go were enough signs of coming
general opinion

is that if the industrials

in

Thursday, May 17, 1951

.

of the estimates

some

were

expressed

views

.

growth which I have made in the

plan

and had every¬
By WALTER WHYTE =
body's well wishes, this col¬ Continued jrom
If you read the different umn again said that the time
market letters issued by serv¬ to sell was when they were
ices and brokers you probably strong.
It further advised
now

[The

strong

was

=

know that the

not weakness.

..

our

and our
just as conservative as

the third great purpose to which
I have referred—the
maintenance

*

-

and expansion of the industrial
mobilization "base "Which "is at the
core
of our productive

strength.

In

1948,

which

vfery good
vate

was

considered

p

the total of pridomestic investment was at:
year,

Volume 173

annual

an

lion.

In

Number 5012

ra'e

the

of

the annual rate
in

arrd

the

about

half

that

level.

same

needs

the

at about

order

that

served,

this

In

be

may

down

1950,

1951

of

annual rate is estimated
other

inflationary

of

of

not

great

our

the order
must give to

paper,

priority which

we

as

charged with

ously

those

is;

enacted.

program, and that,
face of a common

A

large deficit is obvi¬

inflationary.
Defense
defense spending, and

or¬

such

no

sighted effort to expand produc¬

months

duction

tion

will

need

be

to

in

the

construction, includ¬

new

in

ment

producers'

Over the

half

or

at

be

next

kept

annual

an

higher

annual

approx¬

This

than

con¬

is

the

in

rate

a

main¬

$22 %

1948,

al¬

thus

and

economic

build

up

real

our

ders,

the

geometric ratio
to

for many

very

the

With:an expansion of basic indus¬
trial and agricultural production,

third

job

alone

without

the

other two, we shall neither over¬
inflation

come

attain

nor

a

durable

peace.

Within

this

framework, what
has been happening on the infla¬
tionary front, and what

do

can we

which
next

is

reach

to

year

times

level

a

high

as

by the
four

it

as

five

or

in

was

of

end

1950.

practically all major types, of in¬
come

will

come,

farm inpome, and wages. By

the

increase—business

first

even

as

perfect

a

unless in the
danger these

unite in support of

sonable

tax

.

of

program

what

tax

the

a

rea¬

along

the

President

has

because, that is proposed,, we shall probably fail
nature of an expanding in the main objective of getting
program, ;the
goal
of the tax action which will help to

defense

and

thing

come,

third, in
support of these two great efforts
and consistent with them, we must
fight inflation. If we try to do
strength;

lower about it?

considerably

is

L

be

rate

billion.

$25

very

and

year

it ought to

so,

durable

the industrial mobil¬

—

base—must

though

quarter

assuming

bilization

of

next

year,

effective

an

in¬

sta¬

protect

everybody from inflation

and which the nation
A

tax

large

and

sorely needs.

which

program

growing

avoids

deficit

the heart of fighting
the excess

a

rols

con

pansion of
and the

sale

purchase

gree of our success in

the

high

r.ate

the

ward

of investment

to¬

and"

ex¬

improvement

our productive tools—
channeling of this invest¬

into

ment

maintaining

■

those

that'

lines

are

needed most and away from those
lines which are needed least—will
than ;

more

mine

anything : else

whether

detereconomy will

our

be able to expand its total annual

output enough within

couple of

Since

the

in

original Korean out¬

the

middle

of

last

year,

general trend has been indeed

ir

age

ties

prices of 28 vital commodi¬
those

—

both

of great importance

the industrial and

on

The

Consumers'

risen

about

food

Price

8% %,
have

prices

the

on

farm side—have risen about

40%.

Index

while

has

retail
about

risen

the

three

11%%,-and housefurnishings have
risen
about
14%.
Apparel has

great purposes that I have

listed

risen about 10%,

each df

to serve

years

a

adequately -and without excessive
strain.

The

adopt

we

adjusted to the dual
expanding

of

pose

while

pur¬

production

restraining

inflationary
Such a program calls
complete utilization of

pressures.
more

the

which

programs

must be

for

It

is

could

labor

certain

force, and, at least in
key: areas, a longer wiork-

week.

It

calls

the

for

constant

of

clear

that

inflation at

level

prices,

arid

prices

rate.

During

in fact, there has
s ability
in
the
of all

wholesale

decline

some

the

of

economy

continuation

a

that

the past month,
been
practical
average

our

tolerate

not

in

28. important

more

increase

slowly, but the rale of
been slackening and

has

technology.
It there may be prospect of some
requires comprehensive planning levelling off or even some decline
and apportioning of total resources over the next few monlhs.
among
defense
needs,
civilian
This change is due in part to
needs, and the industrial mobili¬ the
imposition of controls, both
improvement

of

zation base in accord with

thought-out
designed

,

to

well-

a

strategy

economic
maximize

Jtotal

our

strength for the long pull. It cills
for a considerable range of con¬
trols

contain immediate
and prospective inflationary pres¬
now, :to

sures.

,

Fighting

•

Inflation "in

■

reflects

"

y

.

Inflation

ther final

shortages.

analysis

It reflects our

indirect and direct.
to the fact

tion
was

af

the

.er

in

It is also due

that the rate of infla¬
Korean

due

part

to

factors which could

outbreak

speculative

not be main¬

words, the size of the defense pro¬
gram relative to the total output
of our

has not been big
enough to justify or sustain in¬
definitely the rate of inflation
economy

the current situation and the fore¬

.

those other things

have

we

have

to

and

become accustomed

The
we
expand, production, the
quickly we shall be able to
grown

to expect

,

the

burden of

of

the

sacrifices

and

seeable

outlook.

There

that all

of

us

us,

none-

contribution

make is not in

can

the form of negative

sacrifices

restraints

in the

form

service—the

kind

but rather

affirmative

of

V of

service

that

results

in

production
There is

fundamental
of

or

more

softening-up

conflict between the

talk
in

short depression,

seems

the

face

expanding production and the

short-run immediate need for

re-

upward
vocate

and

is

need

most

at the

the

directed
most

to

same

to

and
real

our

time

the

which

things

we

will

add

strength, while
we

eut down on

production of non-essentials.

to

those

flationary

tience,

seems

to

highly

me

that this viewpoint

fallacious

and

fraught

with much danger.
There may

of

means

1

be, although I

sure

.

am

by

that there will be,

faltering in the inflationary
during the next few
or

even

number of
which

even a

than

This is.

way.

difficult undertaking in

It

economy.

most

our

com¬

requires

persistence,

pa¬

greater

realization that it cannot

become

very

fully effective overnight. Actual¬
ly, this phase of stabilization has

latbr on, and not in the
distant future, than they are

now.

I

want

to

stress

phatically that I
ing

infla ion

more

higher prices.
dicting more

tainly

cause

much

and

much
pre¬
pres¬

to

not

contain

But i believe that

this effective action

fact

in

do

we

action

pressures.

believe

be taken,

can

of

some

it

already

has been, taken, and that we must
build further on the foundations

it

that

that

will

and

favorable

the

be

is

months.

are

for

this, one
simple fact that

reasons

the

There

long-run inflationary trend

most

time

which

to

strengthen the anti-inflationary
program. If we wait until the in¬

flationary

mount again,
precious time
and find ourselves again in a situ¬
shall

lost

where- it

ation

is

hardest

to

put

the brakes because the machine

on

is

pressures

have

moving

fast.

so

*

The essential elements of
fective

anti-inflationary

clear.

First

the

of the economic program—such as

allocations and materials controls

—which

are

closely connec.ed

so

with the wise

of

use

our resources

and with the direction of

tion

into

the

The

produc¬

useful

most

Controlled

chan¬

Materials

Plan which has recently been an¬
nounced is a phase of this effort.
All

expenditures,
enough taxes to balance

on

Paying

and

a

the

put

taxes

more

change the cost
frankly,

does

is

fair

and

dangerous in the long

run.

is

need

for

ment

of

taxes

contained

at

less

this

accomplish

the

faces that

the only alter¬
that cost through

inflation—which

of

purpose,

prompt
the

least

President

tax

in

now

proposals

pending in

Congress. ' This means
$10 billipn
in additional
the

viewpoint

enact¬

additional

the

the

From

not
na¬

and

native is to pay

To

basis.

burden of

or

tional defense. It simply
cost

defense

pay-as-you-go

of

about
taxes.

fighiing

inflation, the fact that there hap¬
pens

to be

this

moment

no

very

is

the additional

tax

enacted now,

deficit by the end

big deficit at

immaterial.
program

If

is not

there will be a huge
of the year as

the defense program mounts,

There
and

is,

no

road

easy

to

peace

freedom.
i

We must check and restrain in¬
flation as much as we
cannot

we

expect

immediately.

can,

but

complete
We must

suc¬

reasonable

not

protection
is attain¬

from

inflation, which
able, with relief from any sacri¬
fice
of
some
of
the
things we
could

if

have

we

sacrifices

dom,

normal peacetime;
willing to place any

the altar of free¬

upon

will not retain

we

dom.

in

not

are

free¬

our

We must recognize that the

long-range solution lies not sim¬
ply in the conirol of inflation, but
in the increase of

therefore
work

production, and

must

we

harder

all

plan

increase

to

and

pioduc-

tion.

Above all, we must realize that
the basic threat to
is to

be found

that the

inflation

is

the
to

well-being

totalitarian

gression;

take

our

in

basic

steps

meet

ag¬

cause

which

that

of
we

aggres¬

sion; and that only through win¬
ning out in this historic struggle
can

in

we

the

the

American

family

can

in

ment

long
the

or

human

great

1

experi¬

freedom
in

commenced

was

pro tec

run

dollar, the Ameri¬
which

1775.

Bankers Offer Gamble-

Skogmo Com. Stock
An

underwriting group hdad.ed

these

of

and Piper, Jaffray & Hop wood on
May 14 offered 304,270 shares of
stock

common

Inc.

mo,

share.

at

account

and

Gamble-Skog-

These shares

standing
The

of

price

a

and
of

of $8.25k per
are

selling

a

offering

now! out¬

sold

were

iorf the

stockhqlder.

oversubscribed

was

the books closed.

'•>

anti-inflationary

Incorporated in 1928, the com¬
efforts have been commenced and
pany
and
its subsidiaries,
sell
are
substantially under way.
It merchandise
through
over
51
would be unfair to say that any
company stores and to 2,000 au¬
of them has yet been completely
thorized dealers, located for ti
successful.

We

must

harder to make all
But it

successful.

has

ress

all

strive

of them

would

more

be

even

unfair to say that real prog¬

more

not yet

been made.

The

of inflation has been slowed

greYly

months.

in

the

past

few

It must be slowed down

further, and finally brought to

cutting

out
there

time,

Insufficient attention is paid by rby Goldman, Sachs & Co., Merrill,
general public to those parts
Lynch, Pierce, Fenner & Beane,

stop.

after

all,

budget

effort

ef¬

takes

produc.ion requires that the peo¬
ple
sacrifice
normal
peacetime
habits and make greater efforts.

further

a

.

of

be

must

an

program

this

the

pace

-

increased—arid

had

an

tightening
this phase of the anti-infla¬
tionary effort is now necessary.

down

in

not, generally move .upward
straight line, but rather in a
wavering line, and consequently

auspicious

in

the fair

be removed—

work, patience, and understand¬
ing.
And even this increase in

of

nels.

thus far laid.

than

more

equivalent pe¬
during World War II.

riod of time

inflation .and ;

". mote

effective

accomplished

accomplished in
I

I am merely
inflationary

higher prices if

take

that

em¬

predict¬

These pressures would cer¬

sures.

the

most

not

am

cannot

salety—until production is greatly

must

is

a

public

pressures

does

a7

restraint

and

there

a

under

plex

will be much

will

Price and wage stabilization

but
the. analysts are in almost
unanimous agreement that the in¬

It

some

credit

now

the next few months;

expan¬

effective

more

will be

over

impair¬

consideration

those thus far applied.

more

no

without

given to

of

are

excessive

on

productive

Further

forms

measures

analysis disagree as 1o how much
levelling^ off or softening there

those portions of an effective
anti-inflationary program which
have not yet been put into effect.

the

planned

eco¬

in

pressures

well

of the

whole. Others,

inflationary trend to ad¬
relaxation of existing
or to urge further delay

weeks

is

utter

me

the

controls,

straining inflation,: provided that
production

as a

to

far, are using'
the prospect of a brief halt in the

remedy

long-range

some

process

or even a

this

nonsense

is

:

no

are

opinion, are
ruing the levelling-off or

while not going this

upon

available

receiving the income. The

non-essential

needs and re¬
which
the
world

greatest

are

cession

new

thrusts

who

my

up with the
sponsibilities

the

need to be

are

in

nomic situation

theless

will

which now
seems
to be taking place.
Some
are talking about a prolonged re¬

who,

straints until production can catch

situation

tion

miscons

accept. re¬

credits

necessary

sion.

be

Other

cut down

while only civilian produc¬

we

The problem now is to interpret

and

ing

to

tion,

more

must all

we

business

carry

inflationary strains. !....

Consequently, while

be generated both by defense
pro¬
duction and by civilian produc¬

people

contemplated

now,

tomobiles.
needed

more

defense program

a

size

without

make

which

the

a

with

•

receiving

If there is going to be a soften¬
indefinitely, rather than
true reflection of the ing of inflationary pressures over
basic economic situation. In other the nextf few weeks or months,

being

which has thus far occurred.

quickly

those

by

tained

to
produce
enough,
enough, to supply our
rapidly expanding defense needs
and at the same time to supply us

inability

program,

of income

income, because the income will

the

com¬

modities.,. Retail prices react some¬
what

rate
ers,

that the

on

without jeopardizing our national

confuse

ade¬

see

of equality of sacrifice.

The burden

If

fJationary. Since then, the aver¬
of all wholesale prices has
risen about 16%%.
The whole¬

break

principle

inflation.

succeed

do is to

distributed

cess

price and wage

as

cannot

—

burden is

35

fair antirinflationary

a

can

at

purchasing power is
not drained
off, demand will so
far exceed supply that the direct
controls—such

that

most

program

is

the
annual quately for any length of time.
Besides taxation, credit control
receipts by work¬
business, farmers and others should be used to cut down excess
may be $35 to $40 billion higher purchasing
power.
Some credit
than in the first quarter of 1951. controls have
already been effec¬
And this income will far exceed tively applied, in connection with
the goods which are available for the purchase of
housing and au¬

than the annual rate of $27 billion
in the first half of 1951. The de¬

this

%

most

in

part

cities in 26
western

in

and

towns

and

sma.

middle-western, norti

and

far

four

provinces.

western, .state1

western

The

Canadia

company

owr.;.

19.1% of the outstanding commo:
stock of Western Auto Supply Co
which sells merchandise throug

company-operated

and

deale

stores located largely in the state,

But the American people

should

soberly realize that the anti-in¬
flationary program cannot be ex¬
pected to protect them from their
share of the sacrifices arising from
the necessarily high cost of na¬

other

than

company

The

those

stores

in

are

company

which

th,

located.

stores

are

oper¬

ated east of the

Rocky Mountains
principally under the name of
"Gamble's," in the far west main¬
tional defense. Price control can ly
under
the
name ; "Gamble's
Supply"
and
in
help to distribute the burden of Western Auto
under
the name
national defense more fairly. But Canada
"Macleod's."
price control cannot enable the
people

to

would

like

money

for

buy
to

defense

production for civilian en¬

in

one
so

real

should

comes
creases

is
as

as

it

the

so

tax

be

left

was

before

tax

in¬

normal

peacetime enjoyments

that there will be

more

become

&

Co.,

affiliated

208

wit-

South

L:

Salle Street.

a

one

has

Reynolds

Joins Daniel Rice

power

main purpose of
increases is to cut down

creases—for

on

to

CHICAGO, 111.—George R. Grif¬
fin

position that the
of their in¬
high after tax in¬

protected

buying

expect

(Special to The Financial Chronicle)

subtracts

joyment. Much higher taxes are
needed to combat inflation. But
no

Reynolds Co. Adds

to buy, because production

national

from

as
much as they
buy or have the

(Special to The Financial Chronicle)

CHICAGO,

111.—Harry E. Rice

has

joined the staff of Daniel F
Rice
and
Company,
141
Wesl
Jackson Boulevard.
(

for na¬

and tional defense. Anyone who repre¬
With Walston, Hoffman
lessen the inflationary pressures there are short spaces in the line that would add enormously to the sents that
any kind of anti-infla¬
(Special to The FinanIcial Chronicle)
by cutting down on the vital pro- when it seems to be moving side¬ up-surge of inflation.
tionary program can protect work¬
duction expansion programs which ways or even downward instead
PORTLAND, Ore.—Joe B. MauPractically
everybody
is
in ers or farmers or businessmen
take time to bear fruit. But to do of upward.
agreement as to the need fOiT or housewives from their share of ro is with Walston, Hoffman &
this would be just as foolish in
But al¬ the burden of national defense is Goodwin, American Bank Build¬
Despite this possibility of some large, additional taxes.
ing.
the long run as to try to reduce
wavering, the basic pressures are most every group seems to have either ignorant or careless. The
It is true that

1

revenues

highly impor¬

will increase under taxes thus far

lines

billion

1

rapidly than

It is

that these groups recognize
that everybody must share in the
cost of na Tonal
defense, that there

almost

siderably

.

more

itself.

on

tant

comprehensive, vigorous and far-

imating

r

move

different tax program, designed
place the tax burden elsewhere

than

groups

tained

;

a

to

de¬
fense production will increase in

high.

t

aug¬

have

progressively toward a large def¬
icit, as defense outlays increase
much

by

months

many

responsibility for our national se¬
curity; second, we must make a

ization

-

before

siderably reduced in the period
ahead, probably to an annuai rate
of. between $40 and $45 billion in
1952. The major part of this re¬

ves

:

inflationary, and these will
passed. The government will

problems is this: First,
up our defenses as
we can to vhe levels de¬

must build

we

termined

con¬

on

(2075)

ment

solution in reality

a

just

domestic investment must be

equipment

.

want

rapidly

ing housing. But the level of in-

-

and

by cutting

pressures

national defense.

on

we

extraordinarily high rate of total

field of

-

If

$54 % billion,

was

first

$46 bil¬

half

second

.The Commercial and Financial Chronicle

.

.

we

could somewhat




36

,(2076)

The Commercial and Financial Chronicle

The following statistical tabulations cover

Indications of Current

Business Activity
'

IRON

Indicated

week

or

month ended

on

that date,

•'

steel

INSTITUTE:

STEEL

AND

-

operations (percent of capacity)

<■—May 20

Latest

Previous

Month

ingots

Week

Week

Ago

AMERICAN

101,3

Steel

and

castings

tons)

(net

May 20

2,077,000

2,073,000

'

2,057,000

oil

and

condensate

output

daily average

—

to

runs

stills

—

daily

output

Kerosene

output (bbls.)
and distillate fuel

1,931,000

oil,

Residual

fuel

_—

—

oil

output

(bbls.)

5

May

5

6,236,000

6,092,000

5,399,000

May
———May
May

5

20,322,000

19,876,000

19,306,000

18,270,000

5

2,773,000

2,698,000

2,301,000

2,056,000

oil

output (bbls.)
:—
:
May
Stocks at refineries, at bulk terminals, in transit and in pipe lines—
Finished and unfinished gasoline (bbls.) at
May
Kerosene
(bbls.)
at
May
Gas, oil, and distillate fuel
Residual

fuel

ASSOCIATION

oil

OF

(bbls.)

oil

(bbls,) at

at

AMERICAN

RAILROADS:

Revenue

freight

Revenue

freight received from connections

loaded

(number

of

6.154,000

6,126,800

5,058,450

5

8,453,000

8,061,000

8,988,000

7,162,000

5

8,959,000

8,747,000

8,877,000

7,178,000

5

135,764,000

137,474,000

139,728,000

127,431,000
13,364.000

—

(number

of

of

ENGINEERING

CONSTRUCTION

RECORD:
Total

Private

,

S.

U.

construction—

domestic

lons

—;

and

♦_

municipal

16,802,000

15,635,000

13,533,000

May

5

45,247,000

43,859,000

42,354,000

37,466,000

May

5

36.095,000

36,080,000

36,532,000

38,766,000

;_May

5

803,337

824,662

739.523

743,996

May

5

701,382

702,581

699,053

654,828

$270,573,000

$311,168,000

$183,343,000

May 10

174,824,000

188,188,000

90,214,000

May 10
——May 10

119,946,000

166,513,000
104,060,000
70,210,000

■

______—-

,

——

—_May 10

Natural

Benzol

output

oil

Refined

oil

gasoline

Bituminous

(U.

S.

BUREAU

OF

Indicated

(bbls.)

of

STORE

TEM— 1935-39

5

May

INDEX-—FEDERAL

90,851,000

29,095,000

122,980,000

—-

RESERVE

(COMMERCIAL

STREET

May

5

May

5

33,850,000

9,670,000

53,418,000

All

28,475,000

9,110,000

10,983,000

:

749,000

138,600

:

-

725,000

465,000

*139,700

113,300

r

INDUSTRIAL) -*• DUN

Jk

EggS

Electrolytic

(E. & M. J.

:

293

Lead

tin

(New

6,566,813

6,559,700

6,746,975

and

(New

Lead

(St.

Zinc

———

—

York) at—

Louis)

(East St.

181

163

172

.

-

at—T-,

—_

8

4.131c

4.131c

4.131c

3.837c

S.

BOND

.May

8

$52.69

$52.69

$52.69

$46.38

.May

8

$43.08

$43.00

$43.00

Bonds—

——

Baa

corporate

——;

-

—
_

Railroad Group
Public Utilities Group—
Industrials Group

MOODY'S BOND
U.

S.

YIELD

Government

Average

—

_

DAILY

$32.08

.May

9

24.200c

24.200c

24.200c

19.200c

.May
May

9

24.425c

24.425c

24.425c

19.425c

Railroad

A

14

Public

9

142.000c

142.000c

150.500c

77.125c

.May

9

17.000c

17.000c

17.000c

11.250c

.May

9:

.May

9

Bonds

16.800c

16.600c

16.800c

11.050c

117:500c

17.500c

17.500c

11.775c

and

fuels

Piece

U.

—

children's

_

.

!

_

*

,

wear

.i-

—

goods

115.63

120.84

Blankets

and

114.66

119.20

Women's

apparel—

111.25

115.43

114.46

110.88

•

comfortables

106.04

106.04

107.27

108.52

Aprons

and

108.16

109.06

110.88

Corsets

and

111.44

111.44

112.19

116.80

115.24

115.24

120.02

—

—

„

____

.

2.68

2.66

3.09

3.08

-May 15

2.89

2.88

-May 15

2.93

2.93

2.59

t.

3.39

3.27

3.32

3.25

3.27

3.22

3.12

3.09

3.05

2.81

-May 15

2.90

2.89

2.89

2.65

16,128,000

143.2

147.6

137.1

139.8

139.4

145,6

145.2

138.7

137.1

136.7

130.0

136.6

136.1

127.2

'

129.3

'

163.0

162.1

146.2

116.5

116.7

113.0

155.1

154.0

138.2

162.9

162.0

146.0

197.6

395.8

169.5

169.1

107.6

107.5

102.5

144.7

144.2

141.9

143.0

142.4

130.8

*

167.1

'.

142.8

hcuscdresscs—
brassieres

133,1
132.9

140.5

146.9

146.3

139.5

Clothing

3.09

155.0

148.7

Hats

-May 15
-May 15

135.3

163.2

137.6

Shirts

_May 15

209.7

164.3

144.2

Underwear

2.88

210,7

137.8

2.61

3.10-

146.8

149.2

2.86

3.12

193.1

152.8

145.9

2.69

3.14

204.5

154.4

Shoes

2.87

'3.39

56.9

205.0

Underwear

2.92

.May 15

97.2

.

'•

/

.

7;

2.30

3.05

•

—

V

**

Hosiery

108.16

115.04

___.

—

.May 15

.May 15

129.8

140.3

Domestics—

.May 15

.May 15

134.0
143.9

.

v—

Sheets

115.43

185.1

134.7
144.2

(COPYRIGHTED

—

115.82

110.52

308.5

PRICE

j

-

112.19

115.24

195.1

-*•

10,012,000

furnishings

111.62

114.46

"

OF

1

—

111.44

.May 15

182.4

149.5

;

134.3

DEPT.

—_

wash

342,7//

1

177.0

RETAIL

apparel

Cotton

342.6

-

1):

Piece Goods—

102.64

179.8

224.3

,

report:

1985-89=100

-May 15

■

i

195.2
217.1

'

186.0

___,

S.

;' /

176.5

_

&

169.1
224.1

.

202.0

apparel

Home

.:

204.4

97.2

bales

gross

goods

Infants'

196.6

187.1"
271.2 v

204.6

177.3

,.

PUBLICATION

Women's

226.0

187.5
271.9

186.0

,

______—

PRODUCTION

—

226.2

168.4

203.1

refrigerator

furnishings

APRIL

183.8

.

■

500-lb.

184.5

——

—

98.69

.May 15

Group
Industrials Group

—

_

and

97.58

.May 15

1

i

,

15:

—

electricity

97.30

.May 15

■'

/

.

—

sweets

-May 15

.May 15

corporate

Group

of March

—

Men's'apparel—

Utilities

'

CITIES—

oils

electricity

OF

Men's

AVERAGES:

a*—III-tZIZ—-I—lI—I! I—-1Z—-III HIIIZZ-Z I"
/&!•

189,482,000
17,639,000

493,700

Woolens

—

-

Average

12,793,000

MODERATE

__________

FAIRCHILD

PRICES DAILY AVERAGES:

Government

243,647,000

11,174,000

3,355,000

vegetables

and

Production

•

U.

219,085,000

*46,615,000

as

Rayon and silks
MOODY'S

11,499,000
7,663,000

*633,500

217

.May

.

at—

Louis)

21,000

15,472,000
14,958,000

2,183.000

:______

and

Other

5,864,326

AS

at____——

9,000

13,096,000

13,143,000

44,490,000

LARGE

Composite index

York)

17,305,000

550,000

—:

Clothing

301

292

QUOTATIONS):

refinery at
Export refinery at

183,110,000

2,573,000

—

Beverages

copper—

Domestic
Straits

200,424,000

15,622,000

41,977,000

—

Fruits

INDEX

METAL PRICES

152,631,000
139,073,000
13,537,000

181,672,009

166,041,000

:

FOR

IN

AGRICULTURE—Final

ton)—

tons)—.

bakery products

Miscellaneous

—May 10

ton)-.

gross

5,723,340

tons)

_

and
—

953,000

BRAD-

(per lb.)

8crap steel (per

(net

(net

INDEX

FAMILIES

Sugar

-—May 12

—:

(per gross

8,224,504

5.77C,229

MINES)—Month

lignite

(net tons)

125,600

IRON AGE COMPOSITE PRICES:

Pig iron

_

'

COTTON

Finished steel

*9,071,055

7,105,078

export

foods

House

AND

and

(bbls.)

and

Dairy products

*10,460,000

326

May

—_—

INC.

_

domestic

Ice

FAILURES

i

8,832,000

9,000

(bbls.)

1985-1949=100—Adjusted

93,129,000

Gas

kwh.)

000

———

64,654,000

SYS¬

AVERAGE—100i_:—I—_

(in

output

-

■

69,562,000

ELECTRIC INSTITUTE:

Electric

•

gal¬

—

(BUREAU OF

PRICE

INCOME

Fuel,
EDISON

42

(bbls.)

stocks

coal

CONSUMER

.

r_———

SALES

Ago

April:

Bituminous

Fats

DEPARTMENT

of

(bbls.)_1

(bbls.)

Meats

lignite (tons)-—
anthracite (tons)——„—__————. .-i-

Pennsylvania
Beehive coke (tons)—-,--

>■'

March

(bbls.)

imports

consumption

Decrease—all

MINES):-

and

coal

(bbls,

output

output

imports

products

Cereals

OUTPUT

Month

•

$294,770,000

Federal

COAL

Month

INSTITUTE—Month

production

crude

Beehive coke

—May 10

——.

.

_

Year

,/

;

.

of

each)

Domestic

NEWS-

——

construction

State

...

Previous

INSTITUTE:

(net tons)—Month

PETROLEUM

COAL OUTPUT

cars)

ENGINEERING

—

;v

.

construction

Public

<

Latest

for

Pennsylvania anthracite
CIVIL

*j

of that date:

are as

February:

Total

Crude

5

,

cars)

STEEL

steel

——„

stainless

AMERICAN

6,174,200
116,283,000

(bbls.)

average

(bbls.)

AND

and

castings produced
(net tons)—Month of April
Shipments of steel products, including alloy

(bbls. of 42

May

Gasoline

Gas,

either for the

are

^

gallons each)
Crude

IRON

ingots

INSTITUTE:

PETROLEUM

,

Crude

of quotations,

cases

Ago

102.9

103.7

103.9

and

AMERICAN

production and other figures for the '

Year

Equivalent to—
Steel

in

or,

Thursday, May 17> 195X

.

Dates shown in first column

month available.

or

.

"

*

AMERICAN

latest week

.

—

and
and

Infants'

neckwear

—

cans——

—

including overalls—

children's

and

—

wear—

165.8

165.3

133.7

133.7

127.9

327.9

134.8

134.G

131.3

183.7

181.6

168.2

151.9

12.9.5
il

127.4

.

132.4

Underwear

>

:

123.0

.

3.32.4

130.4

123.0

118.9

'

159.9

MOODY'S

COMMODITY

INDEX

May 15

NATIONAL PAPERBOARD ASSOCIATION:
Orders received, (tons)—
Production

Percentage of

activity
(tons)

at

OIL, PAINT AND DRUG REPORTER PRICE
AVERAGE=100
STOCK TRANSACTIONS FOR THE ODD-LOT
LOT
DEALERS AND SPECIALISTS
ON

EXCHANGE—SECURITIES

EXCHANGE

Odd-lot sales by dealers (customers'
Number of orders.^——.
Number of
Dollar

other

Short

328,223

5

252,896

248,326

253,702

269,661
207,307

5

107

105

106

92

5

771,457

646,878

778,034

404,445

154.2

120.6

153.9

153.9

MOODY'S

STOCK

III—

Apr. 28

31,997

29.067

28,514

Apr. 28

32,672

960.080

856,153

821,113

Apr. 28

$43,603,485

$38,528,573

$34,246,152

1,006,291
$39,402,651

Apr. 28
"

♦!_IIIIIIIIIIIIIIIH

29,541

27,239

24,846

37,338

202

447

248

27,037

24,399

37,096
1,076,774

Apr. 28

222

Apr. 28

29,319

Apr. 28

820,862

749,387

691,592

Apr. 28

7,839

I

U.

S.

DEPT.

OF

All

~

~

commodities

Fuel

Metals

II

Net

other

than farm

lighting

and

Building

metal

materials

•Revised.

foods

__

allied

productsl

*Not available.




133.1

6.12

6.29

6.72

5.88

5.85

5.27

4.74

4.61

4.38

3.45

3 44

-

-

6.18

6.40

5.98

6.35

6.66

6.18

£1,639,000

£22,618,000

£6,669,000

$254,747,776

$255,017,643

6,955,474

8,569,161

$255,739,702
4,701,858

$247,792,302

$246,448,482

$275,000,000

254,997,006

255,717,941

20,665

20,637

21,760

$254,747,776

$255,017,643

$255,739,702

690,427

692.885

731,755

outstanding—$254,057,349
Balance face amount of obligations, issu¬
able under above authority
20,942,650

$254,324,758

$255,007,946

20.675,241

19,992,053

17,122

20,630

Total face

313,930

at any time
Outstanding—

U.

S. GOVT.
As

339,090

285,250

®

182.9

183.4

183.0

8

198.5

201.1

201.3

163.2

188.3

188.1

188.5

8

173.5

261.9

269.9

268.7

8'

T38.-8

I

Uncludes

~

54Mo"o ba'rTeTs

279.1

185.7

272.0

158.6
232.0

171.6

171.9

147.5

183.6

184.3

136.0

„ay

138.4

138.3

138.8

131.8

189.6

189.9

169.?

227.5

227.6

197.7

Production

358.9

358.9

358.9

t

Shipments

144.4

143.9

oTi7v^n"crZ

runs.

gross

Gf^nd

171.4

8

be outstanding

public

debt

and

by

the

guaranteed

'

183.4

May

LIMITATION

omitted):
may

outstanding public debt obligations not subject to debt limitation

*

May

227.5

DEBT

gross

May

189.6

that

Deduct—Other

.216.7

'

(OOO's

30

amount

obligations

155.4

•

'*188.6'

STATUTORY

April

Total

_

May

of

2.243

public debt
Guaranteed obligations not owned
Treasury

LABOR-

Hay ?

—

Computed annual rate

Total

328,800

——

—

$275,000,000

373,93.0

392,270

AND

254,727,111

203,710

MayMay-

'

and

136.3

$275,000,000

$27,785,049

223,650

Mftv

materials

Chemicals

136.3

$251,037 844
2.200%,

242,450

May

products

Lumber

138.7

1

2.229%

Apr. 28

203/710

DIRECT

,

9,352

1,067,422
$38,804,350

277.8
and

debt

16,981

2231650

DEBT

—

674,611

2~4~2~450

GROSS

of April 30
General fund balance

7,066
742,321

'

products

and

117.9

128.3

3/48.2

■i'

GUARANTEED—(OOO's omitted):
As

$31,433,463

Apr. 28

-

"

Textile

125.9
135.2

3.41

BANK, LTD.—Month of April—

STATES

813,023

-

IIII_III

—„——

159.2

April:.

1

$34,634,428

Farm

Meats

of

(10)

Apr. 28

Apr. 28

_

*

STOCKS—Month

(200)

MIDLAND

commodities

Foods

146.8

189.1

OF

(24)

Apr. 28

Apr. 28
WHOLESALE PRICES NEW
SERIES
1926=100:

■

J 3 57.6
<

NEW CAPITAL ISSUES IN GREAT BRITAIN-

UNITED

1

.

YIELD

(125)

(15)

Average

purchases by dealers—

products
Grains

AVERAGE

143.7

158.2
192.1

148.5

(25)

Banks

Y.

shares—Total sales

Livestock

COMMON

Railroad

Number of shares

All

WEIGHTED

Insurance

N.

appliances

China

THE

IIIIIIIIIIIIIII—II
—

household

ACCOUNT OF ODD-

IIII-IIIIIIIII—I

sales
-

sales

Electrical

tUtilities

-IIII

Other sales

Round-lot

202,342

Industrials

Round-lot sales by dealers—
Number of

379,141

290

~

.

.

coverings

135.1

5

—,-May 11

Z-I—I—IIIII—IIII

—

Customers'

Floor

158.1

purchases)—

Customers' other sales
Number of shares—Total sales
*
Customers' short sales
Dollar value

382.G

INDEX—1926-36

Odd-lot purchases by dealers
(customers' sales)—
Number of orders—Customers' total
sales—
Customers' short, sales

.

515.9

COMMISSION:

shares——

value

510.2

'

126.0

.May
.May
.May
.May

(tons)

Unfilled orders

498.0

,

total

—

ZINC OXIDE

of

(BUREAU OF MINES)

—

Month

March:

-

144.9

116.9

(short

(short

Stocks at end of

♦Revised.

18,604

tons)—

tons)_^
month

—

(short tons)

18,469

17,080

16.608

11,245

11,110

14,506

tNot including stocks of Athefrican Tel. & Tel.

.Volume 173

Number 5012

.

.

.

The Commercial and Financial Chronicle

37

(2077)
Continued,

from

half of all

14

page

transportation, the rail¬

roads fell from
in

apparent

so

we

about 80%

lion, the railway portion of which
If the

estimated 598 billion.

have actually had available in the

is

aggregate more and better trans¬

increase in total ton miles of 1950

portation than at

time in

any

our

history. We cannot appreciate the
the

and

extent

efficiency of

our

an

1949

over

of

largely due to the emergency situ¬
ation then
900

we

billion

quired

velopment.

activities to

of

we

the growth of our transport

grasp

facilities

miles,

fore the

upswing of traffic due to

goods

it

peacetime to
addition,

enough

away

from the second World War to re¬

flect

economic

the

this

them to

pected
relative

reasonable

and

peace

international

normal

in

conditions

businessmen ex¬
be in an era of

country as

rela¬

trade

be

course

will

carriers

expected

In
of

uses.

emergency

the

much

that

represented by
from
ordinary

diverted

War.. 1949

far

or

war,

war,

seem

be

will

the outbreak of the second World
was

either

prevent

would

that

to

carry

a

greatly increased load of materials
for defense
The

or

war

decided

purposes.

several

years

notable

traffic

in

pickup

during the past 18
for

17%; and

Continued from page 8

Recent

The

*

to 72%

Rise

collective

vestors

Poor's

sets

Stocks

judgment of in¬

recorded

as

forth

Dealer-Broker Investment

of the total.

in Railroad

Recommendations and Literature

by Standard &

that

Iowa Electric Light & Power
Ill Broadway, New York

in the year

ending January, 1951 the index of
the closing price of 20 railroad
stocks

the

yield to

market

Iowa

the

price

investor

road

stocks

common

slightly better price
with

their

higher

a

with

National

it

II

than

their

price

yield

and utilities

un¬

But

stocks

have

1942

Old

uniformly sold at a
relatively low price as compared

Motor

brief

Coal &

pany,

in the prices of railroad securities

Pickering

stead

of

more

miles

of

railroad

which

gencies

since June,
If

non-revenue

railroads

and

the

and intercoastal traffic,

coastwise

find in terms of intercity ton

we

miles

shows

in

billion

527

870 billion

against

1939

in

as

This

1949.

increase in ton miles of

an

tem is

the only

for financial

taking

we

of
each
transport
find that in 1939 the

rails accounted for 339 billion ton

miles,

64%%

or

whereas
roads

10

years

supplied

miles

in

the total,
later the rail¬

of

1949,

billion ton
than the

534

more

or

untary debt reduction

of

ture

the

Between

on

on

have

railways

the

the part

had a
the capital struc¬

carriers

many

since

1940.

the

years

of

close

billion

870

61%

the

of

total

of

miles

ton

comparable
to 64% of the 527 billion ton miles
in

inland

The

1939.

waterways,

exclusive of the coastwise and in¬
tercoastal

traffic,

billion

88

for

accounted

miles

ton

in

132

billion

ton

miles in

88

billion

ton

miles

The

constituted

16%%

and

1949.

in

1939

the

of

total

billion ton miles

132

whereas the

for

1939

in 1949 made up 15%%. Or, to put

it

another

the

way,

total

*

inter¬

miles performed by all
agencies
of transport
increased
343 billion ton miles, 1939 to 1949,
city

ton

and

the

railroads

for

accounted

almost 195 billion of the increase.
The

inland

waterways

another

for

44

The

billion of these

55

miles

by doubling their perform¬
of about. 55 billion ton miles

ance

in

additional ton

1939

miles

to

about

billion

110

ton

1949.

in

While

inland

the

waterways

during this decade increased their
mile

ton

ton

performance

44

miles, and the pipe lines 55

billion,

intercity

the

counted for

an

trucks

increase of 50 bil¬

transportation by
road highway carriers
city

about 44

1*949. To

94
sum

rose

from

billion ton
this in¬

up,

of 343 billion ton miles be¬

crease

tween 1939 and 1949

miles

billion ton

44

the

over

billion ton miles in 1939

approximately

miles in

ac¬

miles. That is, the inter¬

lion ton

to

billion

made up:

was
on

the inland

waterways, 50 billion ton miles
the highway,

on

55 billion ton miles

by pipe line, and

195 billion ton

miles by railroad. So far as trans¬

portation of freight is concerned,
the airways remain
the
said

still

a

speck in

sky, though the speck
have

to

the size

of

a

increased

may

be

almost

to

man's hand.

In

1939

the airways carried 12 million ton
miles

of

freight, and in 1949 this

had increased to about 236 million
ton miles. So of the 870 billion ton
miles less than one-quarter of one

Under

the

has

been

roughly




bonds

regard

of

the

railroad

highly. This is

note

that

stocks

and

companies

in

when

1938

we

with

thirties

The

Bond

demand

increasing

handle

to

Journal."

Milk

of

New

York

the

during

length of haul
reduced

decade

1951

edition

will

all reflected in

are

expenses

per

now

ton mile.

The relative

position of the rail¬
the over-all
transport

in

roads

picture
light

also be viewed in the
expenditures for

may

of

total

have
been furnished rough estimates of
these total expenditures for the
years 1936 and 1949. In
1936, it
estimated

been

that

the

an¬

nual outlay for furnishing all kinds
of

1949,

In

$20,000,000,000.

some

a

will also be

financial district

An
a

special mailing service to be set
at Field Day headquarters so

up

that

Bond

der

gift

more

roughly

estimated

seven-tenths

of

expenditures

were

owned

and

such

lication

operated and unregu¬

be

can

or¬

to

sent

Committee, which
several

up

in

laughs

There

of

of

Exchange,

be

the New

a

enter¬

and

will

MacArthur

on

overlord

is

months

preparations, promises

high

that about
stupendous stories

lated

to

"The Bawl Street Journal" Pub¬

new

fanciful

becoming

York

Stock

the gigantic steal mill

being operated in Washington, D.

transportation. The so-called
family car or the private auto¬

C. and the usual comic advertise¬

mobile

ments

for

accounted

half of the total. The
for

mobiles

penditures
trucks

were

than
case

double
of

biles

over

three

to

have

those

of

times

in

been
1936

including the startling
of

the

HST

School

of

se¬

&

Iron—Circular—duPont,

Silver-Lead

Cor¬

Natural

Morgan Stanley & Co. and The

in

the

privately-owned automo¬
the railroads, those of

1949

almost three times those

were

1936,

motor

while

carriers

transportation
expenditures
of

in

ia.

its

will be used by the

resources

to purchase securities of

The

subsidiaries.

operating

obtained

construction

for

of

ad?)

plant r fatuities and for
corporate purposes., Budg¬

other

expenditure for the proposed
construction program for 11951 is
eted

at

gas

npn-affili-

to

ated utilities in western New York

Pennsylvania.

western

and

018,000.

-

produce

subsidiaries

The

na¬

in West Virginia, Ohio,
Pennsylvania and New York fields
and at the end of 1950 had 1,945
contracts for the purchase of gas
tural gas

independent producers 111

from

the

Estimated
of the wells of

Appalachian gas fields.
proven

the

reserves

were

Dec. 31,

at

subsidiaries

1950

454,000,000 MCF.

William J. Becker is now

With First Securities Co.

$64,500,000. The offering was over¬
subscribed and the books closed.
A

sinking fund provides for re¬
of 72% of the new de¬

tirement

benture issue

of

before

the

rate

the

period May

maturity, at

a year in
1, 1954-1968 and

$1,000,000

$3,000,000 a year in the period
May 1, 1969-1975. Sinking fund
redemption
and

range

prices start in 1954
from 101.42% to par.

Optional redemption prices range
frorm 104 V2 % if redeemed during
the

months

12

beginning May

1951 down to the

redeemed

if

on

1,
principal amount
or
after May 1,
WilHam

Natural Gas

owns

five

111.—George

S.

and

subsidiaries,

operating

which constitute

an

interconnect¬

integrated

natural

gas

Smith, Jr. has been added to the
staff of E. F. Hutton & Company,

subsidiaries

Board of Trade

Building.

With F. S. Moseley & Co.
(Special to The Financial Chronicle)

CHICAGO, 111.—Joseph R. Pryor
now

&

affiliated with F. S. Mose¬

Co.,

135

South La Salle
previously with

Street.

He

Central

Republic Company.

was

are

Hope Natural Gas

Co., The East Ohio Gas
Peoples

ley

also

and

sidiaries

subsidiaries will yse the funds so

system engaged in all phases of
the
natural
gas
business.
The

is

natural

supplies

Gas

Natural

State

York

New

Corp.

Boston

company

ed

property,

in be¬

cash

of

(Special to The Financial Chronicle)

CHICAGO,

of

Com¬

&

May

group

and holds all of the capital stocks

Joins E. F. Hutton

and

water

Co., 31

&

Corporation headed
Total operating revenues of the
of 94 investment firms system for 1950 were $134,749,000
who on May 16 offer for public
and income before interest and
sale
a
new
issue of $50,000,000 miscellaneous deductions was $17,First

a

Consolidated

as

more

Homsey

Corporation—Bulletin—J.

1975.

1949

&

Heimerdinger

—

Inc., 32 Broadway, New York 4, N'. Y.

Gas Debentures Offered

respondence.

be¬

doubled

domestic

in

crets

1949, and the ex¬

expenditures

estimated

are

auto¬

"private, unregulated

on

The

great.

than

more

1936 and

tween

one-

expenditures

private

and

passenger

about

Analysis

wholesale to two of the other sub¬

.

tainment.

for privately-

Club members

copies

friends.

than $57,-

expenditure of

the day of the

innovation this year will be

editorial

is

on

in the

—

ditional

winding

000,000,000. In both these years it

sale

on

outing.

similar estimate would amount to
an

are

being received for delivery
day of publication.
The

paper

to

amounted

transportation

subscriptions

the

on

furnishing transportation. I

has

that

nounced

Stocks

more.

or

Street, Boston 9, Mass.

appearance at the Bond
Consolidated
Natural
Gas
Co.
of the
forties great progress was made Club Field Day on June 8 and 3%%
debentures due 1976. The
in
effecting economy and effi¬ copies will be available for cir¬ debentures were priced at 101 % %
culation in other cities through¬
plus accured interest to yield ap¬
ciency in operation. The savings
out the country on the same date.
in fuel through dieselization, the
proximately 3.16% to maturity.
Robert
C.
The
issue was awarded at com¬
increased
Johnson,
of
Kidder,
length
and
speed of
freight trains, the heavier loading Peabody & Co., New York, the petitive sale on Monday. Proceeds
of cars, and the increased average paper's circulation manager, an¬ from the sale .along with other

traffic

Also available is a list

25 years

Corporation

Consolidated

that

The

of

record

Concrete

Mould

Valley

were

its

make

dividend

a

on

Club

announced

du Pont & Co.,

Straus, 50 Broad Street, New York 4, N. Y.

Bawl St, Journal
has

very

>

Lerner &

,

Street, New York 5, N. Y.

Vacuum

so

there will be
substantial
economies were achieved, for ex¬ no restraints, voluntary or other¬
ample,
in
maintenance.
Under wise, on publication of its annual
another type of pressure from the burlesque paper, "The Bawl Street
the

of

Wall

1

Vulcan

No Restraint

—

of Undervalued Common Stocks and a list of Common

far cry from the

a

Card memorandum

Standard Gas & Electric—Bulletin—Francis I.

pany,

of inade¬
quate earnings during the decade

relation to the entire outlay

it

investors

to

pressure

city transportation total 980 bil¬

1950

by air.

interesting

the funded debt decreased
approximately 16%.

estimated that ton-miles of inter¬

For

was

most

—

Falls Machine Co.

yield

how to meet it.

both
unregulated and regulated, almost
quadrupled during these 13 years.
According to these estimates in

billion

to

purchased to yield 6.92%. It

were

is

bought

were

10%, the investment in road and

pipe

lines accounted for approximately

utilities

Cement Company

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

stocks sold in

discussing the railroad crisis and

about

Riverside

common

occasion

accounted

billion.

Railroad

Street, Chicago 4, 111.

Ltd.—Analysis—John R. Lewis, Inc., 1000
Second Avenue, Seattle 4, Wash.

railroad bonds sold to

2.89%.

declined

States

years

had

and the A-l

yield

Corporation—Analysis—Cruttenden & Co.,

Lumber

South La Salle

Placer Development,

March, 1951, sold to yield 2.77%,

all railways in

owned by

United

the

equipment before depreciation in¬
creased about 40%. During these

1949

during

1920 and 1948 the. number of miles

10 years

in

bonds

209

Rail¬

of road

total of all the transport agencies

earlier. Yet the railroads

plus

1949.

5.89% and the stocks of industrials

marked effect

agency,

A-l

of

bankruptcy proceedings, Fi¬
reorganizations and vol¬

nancial

ton

performance

road

middle

March, 1951 to yield
6.27%. The stocks of other public

are

of

down, according to the

Pacific,

Missouri

the

out

.the

only 900 miles involved

there

in

large system left

reorganization. After

about 65%. When we break these
miles

being in bank¬

ruptcy, the Missouri Pacific Sys¬
the

the

of

developed

1950.

omit

we

traffic

have

since

Company.

Corporation—Analysis—Sincere and Com¬

231 South La Salle Street, Chicago 4, 111.

with their dividends until the rise

thousand

N. Y.

Davis,

—

Co.—Analysis—Freehling, Meyerhoff
Also avail¬

Coke Company and Truax-Traer Coal

of

70

Memorandum

—

on

Paramount Pictures

great interest to the investor. In¬
than

Inc.

Corporation—Bulletin—Scherck, Richter Co.,
Building, St. Louis 2, Mo.
Also available is a
Chicago, Wilmington & Franklin Coal Co. and
data on Franklin County Coal Corporation, Zeigler

bulletin

tions. Certainly the year 1949 was

by the present emer¬

Bearing Co.,

Coal

Ben

not affected

changes

values—

related

Landreth

railroad

accounts

of

120 South La Salle Street, Chicago 3, 111.
able is an analysis of United Air Lines, Inc.

when the finan¬

since

a mem¬

Manufacturing Co.

New York—Table

& Co.,

cial position of the roads was not

good.

of

Goodwin,

&

Also available is

Skaggs & Co., Ill Sutter Street, San Francisco 4, Calif.

compared

as

Bank

Northern Pacific Railway

than industrials

even

City

National

other

not

was

S. S. White Dental

on

New York Hanseatic Corp., 120 Broadway, New York 5,

a

for railroad stocks to sell

common

at

War

Street, New York 5, N. Y.

orandum

utility stocks. Prior

or

World

at

Company—Report—Walston, Hoffman

35 Wall

compared

as

dividends

industrial
to

sold

Gas
&
Electric Company—Analysis—William
Company, 135 South La Salle Street, Chicago 3, 111.

Lonsdale

the

on

these stocks de¬

on

Co.—Analysis—Ira Haupt & Co.,
6, N. Y.

Illinois

Blair &

from 43.7 to 62.3, while

rose

a

or

absorb
portion of this 900 billion ton

any

of

If

to

measures

by comparing the years
1949. 1939 was just be¬

1939 with

re¬

current

our

to

expenditures

level clined
from
7.06%
to
5.98%.
higher than that of the These same
reports show that rail¬

1949.

year

readily

more

can

for

be

transport

various

care

economy,

somewhat

Transportation

Perhaps

will

miles

our

peacetime
Competitive

that about

may say

ton

transportation without some con¬
sideration of its history and de¬

Growth of

is

billion

110

about

20%

to

by
regulated carriers, they fell from

Transportation and the Investor
facilities has been

relation

River

State

being
The

Natural

Gas

Co.,

Gas
and

Co., The
Co., The

New

111.

CHICAGO,

William

—

Natural

cago,

has

134

members

joined

South La Salle Street,
of

the

Midwest

Stock

Exchange. Mr. Becker was former¬
ly with L. F. Rothschild & Co. and

prior

thereto

was

with

Glore,

Forgan & Co.

Gas Corp., the last
non-utility company.
four public utility subsid¬

Thomson McKinnon Adds

a

serve

J.

the staff of
First Securities Company of Chi¬
Becker

York

about

919,000 cus¬
tomers in 696 communities in the
iaries

Becker

(Special to The Financial Chronicle)

Appalachian area in Ohio, West
Virginia and western Pennsylvan¬

(Special to The Financial

ATLANTA,

Boggs, Jr.

is

Thomson

&

Building.

Chronicle)

L.
affiliated with

Ga.—Richard
now

McKinnon,

Healy
„

•J*

33

The Commercial and Financial Chronicle

(2073)

Securities
Air Lifts

April 23

Now

Inc., Washington, D. C.
of notification) 30,000 "senior shares"

(letter

(par $1).

Price

Proceeds

$10 per share.

—

For

—

Underwriter

—

None.

Office—1835 K St., N.

W., Wash¬

ington 6, D. C.
Alhambra

Nov.
par

1

filed

($1

per

Mines

80,000 shares of

share).

Hollywood, Calif.

Corp.,

common

stock.

Underwriter—None.

Price—At

Proceeds—For

Dairy Products Corp.
Feb. 16 filed 300,000 shares of preferred stock (par $4)
and 390,000 shares of common stock (par 10 cents) to be
offered in units of one share of preferred and 1.3 shares
of common stock.
Price—$5 per unit.
Underwriters—
Barrett Herrick & Co., Inc., of New York. Proceeds—To
acquire plant, to pay indebtedness and for working
capital.

(par $100). Price—To be supplied by amendment.
Peabody
&
Co.,
New
York.
Proceeds—For additions and improvements to plant and
equipment. Offering date postponed.

American-Marietta

Co., Chicago, III.
May 8 (letter of notification) 7,652 shares of common
stock (par $2) to be offered in exchange for 15,304 shares
of common stock (par $1) of Metal Disintegrating Co.,
Inc., on a one-for-two basis. Underwriter—None. Office
-A3 East Ohio

-Arizona

St., Chicago, 111.

Edison Co.

*

(5/29)

Cuban-Venezuelan Oil Voting Trust

representing

Cudahy Packing Co.

$10,000,000 sinking fund debentures due

23 filed

March

April 1, 1966. Price —To be supplied by amendment.
Underwriter—Halsey, Stuart & Co. Inc. Proceeds—To
reduce bank loans by $9,000,000, and the balance added

Oil

Co., Moab, Grand County, Utah
April 23 (letter of notification) 150,000 shares of common
stock (par 10 cents), of which 100,000 shares are to be
publicly offered for account of the company at $1 per
share, and 50,000 shares are to be offered for account
of H.
L. Rath at approximately
75 cents per share
through brokers. Proceeds—To operate and drill well.

to

Offering—Indefinitely deferred.

capital.

working

Chicago, III. (5/21)
Oct. 23 filed 132,182 shares of common stock
Culver Corp.,

(par $5),

subscribed for by stockhold¬
127,364 shares are to be offered to public. Price—
To stockholders at $5 and to public at about $6.77 per
share. Underwriter—Dealers may be underwriters. Pro¬
of which 4,818 shares were
ers

Louisiana

Electric Co., Inc.
250,297 shares of common stock (par $10)
and 21,480 shares of 4.5% preferred stock (par $100), of
which the preferred stock and 214,800 shares are being
25

and working capital..

tion expenses

April 20 filed 200,000 shares of capital stock. Price—At
($1 per share). Underwriter—Harry M. Forst. Pro¬
ceeds—For exploration and development work.

Central

24

derwriter—None.

par

Jan.

one

in

stock

mon

Ltd., Vancouver, B. C.y

-

■

certificates
share of one and two cent par comcompanies.
Price—$2 per unit.
Un¬
- Proceeds—For drilling and explora¬

1,5U0,0U0 units of voting trust

March 29 filed

Canada

Cane Creek

of $1,000,

Hodson & Co., Inc.,

Underwriter—Kidder,

American

•

$500 and $100 each).
Underwriter—
New York. Proceeds—To be placed
in company's general funds.

nations

Burlington Mills Corp.
5 filed 300,000 shares of convertible preference

Copper Co.,

ISSUE

May 8 (letter of notification) $50,000 of 5% subordinated
debentures due Jan. 1, 1981.
Price—At par (in denomi¬

March

Canam

ADDITIONS

PREVIOUS

Inc., New York

Crown Finance Co.,

•

Feb. 21.

further development of mine and for working capital.

Thursday, May 17, 1951

.

INDICATES

Registration

stock

Gold

.

SINCE

stock; offer extended from April 30 to May 23. Georgeson
&
Co.
soliciting exchanges.
Statement effective

equipment and administrative costs to

manufacture aircraft.

C

in

.

filed

and

and

railroad

in

investments

ceeds—For

Statement effective April

kindred

secur¬

11.

offered in exchange for shares of common stock of Gulf
Public Service Co., Inc., on basis of 4/10ths of a share

ities.

William H.

of

&

Gulf

April 26 (letter of notification) $150,000 of five-year 5%
notes and 50,000 shares of common stock (par $1) to be
offered in units of $1,500 of notes and 500 shares of stock..

April 24 filed 40,000 shares of
Price—To

be

supplied

by

stock

(par $5).
Underwriters—

common

amendment.

Staats Co., Los Angeles, Calif.; A. C. Allyn
Co., Inc., Chicago, 111.; and Refsnes, Ely, Beck & Co.,
Phoenix, Ariz.. Proceeds—To repay bank loans and for
new

construction.

V

'/■/

'■'■-/V

Carpet Co., Inc.
filed 73,556 shares of common stock

March 27

being offered to
25

on

basis of

stockholders

common

oversubscription privileges; rights to expire
Price—$10 per share. Underwriter—None.
For working capital.
Arwood

(no par),
April

of record

share for each four shares held, with

one

May 18.
Proceeds—

on

18

Precision

(letter

of

Flooring Co., Athens, Ohio
April 24 (letter of notification) $175,000 of 43A% first
mtge. bonds, due April 15, 1962 (in denominations of $1,000

and

$500 each).

Columbus, O.

of record

share

Underwriter—The Ohio

Company,

Proceeds—For working capital.

City Electric Co.
April 15 filed 117,200 shares of common stock (par $10)
being offered to common stockholders of record May 8
rate of one share for each 10 shares
held; rights to
expire May 28. Unsubscribed shares to be offered up to
May 25, 1951, to employees and to stockholders on an
oversubscription privilege. Price—$19 per share. Un¬
derwriters—Union Securities Corp. and Smith, Barney
at

& Co., New York.

Proceeds—For construction program.

Statement effective May 8.

shares

shares, 20,348
share

shares

on

Purpose—To acquire not

of Gulf
'/■•

12.

common

V,

.

•

stock.

mining machinery.
Seattle, Wash.

:

Chester

be

Paine, Webber, Jackson & Curtis.

?

York.
erties.

option and develop

expected

before

the

Chlorophyll, Inc., Neodesha, Kan.
(letter of notification) 20,000 shares of

stock.

Price—At

of

($10

par

per

share).

St., Neodesha, Kan.

holders and

■

Cleveland Trencher

1

filed

117,660

Co., Euclid, Ohio

shares of

of which 99,100 shares

common

;

(5/21)

(par $5),
by certain stock¬
(11,560 of latter to be,,

18,560 by company
underwritten and 7,000 shares are to be offered to em-,*,
ployees and officers). Price—To be supplied by amend¬

writers—Harriman Ripley & Co., Inc.; Kidder, Peabody &
Co., and F. S. Moseley & Co. Proceeds—For general cor¬

Ohio.

on

ap¬

proving issue.
•

Blue

May 9
stock.

None.
holder.

Blaze

Products, Inc., Provo, Utah
(letter of notification) 20,000 shares of capital
Price—At par ($1 per share).
Underwriter—

Proceeds—To Mrs. Iva

Sneddon, the selling stock¬
Office—First Security National Bank
Building,

Provo, Utah.
Brown

Co., Berlin, N. H.
Jan. 25 filed 144,151 shares of $5 cumulative convertible
preference stock (no par) and 144,151 shares of $3 cumu¬
lative second preference stock (no
par), together with
voting trust certificates representing the same, offered
in

exchange for 144,151
vertible preferred stock

shares

of

$6

cumulative

con¬

on
basis of one share of each
class of preference stock for each share of
$6 preferred

ment.

Underwriter—Hay den, Miller;<& Co., Cleveland,
capital.
/
^
.*

Proceeds—For working

.

To

—

short-term

prepay

bank

loans

and for

Offering date postponed.': :

a

v

Consolidated Textile Co., Inc., New York
Dec. 27 filed 220,000 shares of
capital stock (par 10 cents),
offered in exchange for 200,000 shares of common stock
of

Bates

Manufacturing

Co.

(Consolidated

now

owns

dated

for

10

shares

expire June 29.

of

basis of 11 shares of Consoli¬

Bates

stock.

Exchange offer to

Statement effective March

Car-Nar-Var Corp., Brazil, Ind.
(letter of notification) 150,000 shares of com/ mon (voting) stock (par $1), Price—$2 per share. Under¬

Fairman

Electric

Co., Geneva, III.
?
(letter of notification) $300,000 of 6% sinking

debentures due

Underwriter—Boettcher

&

Co.,

Chicago,

111.

Cleveland

Offering—Expected sometime in May.




all

offices

oversubscription privilege; rights
11. Price—$5 per share.: Under¬
Proceeds—For working capital.
Office

held, with

an

Oak

Street, Elgin, 111.

Farmers

.

,

..

Mutual Telephone Co.,

Proceeds

None.

—

To

Office—Cerro Gordo,
•

Formula

Fund

rebuild

rural

telephone

of

Boston

Underwriter

Boston, Mass.

system.

Madison, Minn.
(Mass.)

—

Price—
Corp.,

Investment Research

Proceeds—For investment.

Fosgate Citrus Concentrate Cooperative, Forest
City, Fla.
March

2

filed

476

shares

of

class

A

membership stock

shares of class B preferred stock (par
8,000 shares of class C stock (par $100); 2,000
of class C stock (par $50); and 4.000 shares of

(par $100); 801

$100);
shares

class

C

—To

stock

(par $25).

Price—At

par.

Underwriter—

Proceeds—To construct and equip plant.

None.

process

citrus fruit juices to

a

Business

frozen concentrate

form.
Frontier

Refining Co., Cheyenne, Wyo.

(5/21)

April 30 filed $1,000,000 5%% convertible debentures
due May 1, 1961.
Price — At par (in denominations of
$1,000 each). Underwriters—Peters, Writer & Christensen,

Inc.;

Sidlo,

Simons,

Roberts

&

Co.;

Boettcher

6

Cosmopolitan Hotel Co. of Dallas, Tex.
Dec. 13 filed $1,500,000 of 2% debentures due 1965. Price

Co.; and Bosworth. Sullivan & Co., Inc.; all of Denver,
Colo.
Proceeds
To drill eight wells in San Juan

—At face value.

County, N. M., and for working capital.

Underwriter—None. Proceeds—To pur¬
chase debentures of Statler Dallas
Co.,

Inc., which

pany
to

—

Madison, Minn.
May 9 (letter of notification) 2,600 shares of common
stock and 1,200 shares of preferred stock. Price—$35 per
share for common and $50 for preferred. Underwriter—

Dec.

Proceeds—To retire indebtedness and for
working capi¬
tal.

San Francisco

•

,

5

amount.

Private Wires

Coy Elgin, III,

expire about June

writer—None.

2.

1, 1975 (to be issued in units
of $100, $500 and $1,000 each).
Price—91% of principal

Philadelphia

shares

Continental

March

March 2

Chicago

Elgin Sweeper

At market.

on

cor¬

...

standing Bates shares)

fund

Pittsburgh

general

May 9 filed 100,000 shares of beneficial interest.

Continental

••

Proceeds—For

51,400 shares, or approximately 13% of the 391,500 out¬

& Harris, Inc., Chicago, and
Gearhart, Kinnard & Otis, Inc., New York. Proceeds—
For working capital and general
corporate purposes.
Temporarily deferred.

Boston

.

5

working capital.

c

April 18 (letter of notification) 38,864 shares of common
Stock (no par, being offered to common stockholders of
record April 28 on basis of one share for each two

series of 1951 (no par).
ment.

writers—Sills,

New York.

AA

to

Proceeds

Co., Chicago, III.

porate purposes.

Consolidated Cigar Corp., New York "
March 9 filed 50,000 shares of cumulative

preferred stock,
Price—To be supplied by amend¬
Underwriter—Eastman, Dillon & Co., New York.

Products

Underwriter—None.

share.

stock

to be offered

are

Ekco

York. Pro¬

working capital.

22, 1955, of options to purchase such shares granted on
Oct. 23, 1950, to certain employees (including certain
officers and directors) of the company. Price—$13.78 per

.

preferred stock
on the basis of IV2 shares for each
preferred share held.
The dividend rate will be not less than 4%% nor more
than .5%. Price—To be supplied by amendment. Under¬

(5/21-23)

May 9 filed 35,000 shares of common stock (par $2.50)
to be issued only upon exercise up to and including Oct.

Underwriter—

Proceeds—For working capital. Office—1320 West

Maine

III.

Co., Chicago,

Merrill Lynch, Pierce, Fenner & Beane, New

common

None.

unuc.1-

May 2 filed 24,000 shares of common stock (par $2.50).
Price—To be supplied by amendment. Underwriter—

•

May 8

w.

>

.

Products

ceeds—For

shares

Stockholders will vote June 19

Ekco

June.
•

ttnuj pci

Proceeds^To pay
price for building ($20,000) and for

working capital.,.

prop¬

middle

Vu

luc;,

(pal*

balance of purchase

"as

Offering—Not

slock

writer—Olds & Co., Jersey City, N. J.

900,000 shares of common stock (par $1)
a
speculation." Price — 50 cents per
Underwriter—Willis E. Burnside & Co., Inc., New

May

porate purposes.

Duggan's Distillers Products Corp.
27 (letter of notification) 340,000 shares of com¬

mon

Petroleums, Ltd., Toronto, Canada

Proceeds—To take up

To retire

—

Oct.

14 filed

share.

Proceeds

$1,100,000 of 3%% serial notes issued April 1, 1949, and
for working capital.

Telephone Co., Chester, S. C.

offered

(5/29)

Dewey & Almy Chemical Co.

May 8 filed 200,000 shares of common stock (par $1).
price—To be supplied by amendment.
Underwriter—.

(letter of notification) 360 shares of common
stock. Price—$100 per share. Underwriter—None. Pro¬
ceeds— For
plant improvements.
Office —109 Wylie
Street, Chester, S. C.
,

to

y -

operating capital. Office—718 Symes Bldg., Denver, Colo.

15

Chevron

Colo,

Denver,

Syndicate,

pations, of which 20 will be issued for services rendered.
Underwriter—None. Proceeds—For

Office—603 Central Building,

,

Petroleum

Denver

Price—$1,000 each.

Underwriter—None.^Proceeds

—For

Underwriter—F. S. Yantis & Con¬

unit.

per

May 10 (letter of notification) 60 certificates of partici¬

'

Exploration Co., Inc., Seattle, Wash.
May 8 (letter of notification) 8,316 shares of class A
common stock and 33,316 shares of class B common stock.
Price—75 cents per share for class A and 50 cents per
share for class B stock.

Motor Express Corp.

(Md.)

ine., Chicago, 111.
Proceeds—To retire three-year 5%
promissory note. Office—Springdale and Third St., Cum¬
berland, Md. Offering—May be made privately.

basis of one

on

held, with rights to expire
(80%)

March

Price—$2,000

stockholders

common

per

None.

—

429,600 shares

Bigelow-Sanford Carpet Co., Inc. (Del.)
May 16 filed 100,000 shares of cumulative preferred stock,
series of 1951 (par $100), of which
approximately 40,000
issuable to holders of the 6%

common
Louisiana

Channel

•

are

17

Cumberland

share of preferred for each
of record March 13.
This

May 1, 1951 at $26.50

Statement effective

March

Atlantic

as

June 15 and will not be extended.

on

Central

Underwriter

than

less

to

for each

June 4.

March

Athens

expire

a

held

remaining 35,497

offered

•

Statement effective April 18.

Casting Corp.
notification) 4,000 shares of 5%%
cumulative non-convertible preferred stock being of¬
fered to stockholders and public up to July 1, 1951.
Price—At
par
($25 per share).
Underwriter—NoneProceeds—For working capital.
Office—70 Washington
Street, Brooklyn 1, N. Y. /
April

the

Of

l/25th of

share

common

offer will

are

Artloom

and

common

will construct Dallas hotel.

corporation

under

Commerce to

secure

sponsorship

com¬

—

General

Business—A non-profit

May 1

of

cumulative

Dallas

construction of hotel.

Chamber

of

shares

Glaze

Corp., Baltimore, Md.

(letter of notification) 22,500 shares of 5% nonof

prior

stock (par $5) and 95,000
(par 20 cents).
Price—Pre-

preferred

common

stock

Volume 173

•

Number 5012

.

ferred at $5,60

per

writer—None.

Proceeds—For

The

.

.

.share and

Commercial

and Financial Chronicle

at par.,,Under¬

common

■

.

capital.

its subsidiaries.

,

Price—Fixed at $3

Illinois Central RR.

completed

Thorer &

for the next succeeding month, which¬
but in no event more than $35 nor less
$25 per share. The initial offering will close on
July 3, 1951-i Proceeds—To make additional investments
in common stock equities of subsidiaries and temporary
advances to the subsidiaries in connection with their
are

or

is lower,

for

and

programs

general

Culver

Dec.

28

Distilleries Co-

Frontier

working

~

stock (par

-

•

Refining Co._.

.Debentures

_

Gyrodyne Co.-of, America, Inc

—

Southwestern Investment Co.-.—Preferred & Com.

•
Linnton Plywood Association, Portland, Ore.
May 10 filed 400 shares of common stock and 200 shares
of preferred stock. Price—$5,000 per share for common
and $2,500 per share for preferred stock. Underwriter—
None, but John J. Oxley and J. A. Williams will Solicit
subscriptions. Proceeds—To improve plant site and ac¬
quire facilities and machinery.

May 23, 1951
Kentucky Utilities Co
Toronto

—.

(City of), Canada

.Debentures

May 24, 1951
National

-Debentures

Dairy Products Corp.
May 25, 1951

159,142 shares of class B common stock
Price — To be filed by amendment. Under-

Forgan & Co., New York. Proceeds—
capital and general corporate purposes^
Offering—-Expected to. be withdrawn and new filing,
expected to be made covering 30,000 shares of preferred

,

Lincoln Telephone & Telegraph Co.
April 24 (letter of notification) 10,002 shares of common
stock (par $16.66% per share) being offered to common
stockholders of record March 31 on a l-for-15 basis;
rights will expire on May 23. Price—$24 per share. Un¬
derwriter—None. Proceeds—For working capital. Office
—1342 M Street, Lincoln, Neb.

—

Virginia Electric & Power Co.——

writer-^Glore,
f

...

—.Common :•

filed

(par $1);
.For

Le Roi Co., Milwaukee, Wis.
May 10 (letter of notification) 62,300 shares of common
stock (par $2.50).
Price—$4.75 per share.
Underwriter
—Gardner F. Dalton & Co. and Riley & Co., both of
Milwaukee, Wis, Proceeds—For working capital.

(EDT) —Common

Corp.

Ekco Products Co._

-

Glenmore

a.m;

May 21, 1951

corporate pur¬

Georgia Power Co. (6/5)
May 4 filed $20,000,000 of new first mortgage bonds
due June 1, 1981. Underwriters—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Morgan Stanley & Co.; Lehman Bros.; Harriman
Ripley & Co. Inc.; Shields & Co. and Salomon Bros.
& Hutzler (jointly); Blyth & Co., Inc. and Kidder, Peabody & Co. (jointly); The First Boston Corp.; Kuhn,
.Loeb & Co.; Union Securities Corp. and Equitable Secu¬
rities Corp. (jointly). Proceeds—For construction pro¬
gram. Bids—To be opened at 11 a.m. (EDT) on June 5.

•

(CDT)—-Equip. Tr. Ctfs.

Cleveland Trencher Co.-

Statement effective May 1.

poses.

noon

Hollender, Inc. 11

.than

construction

holder.

May 17, 1951

below the average

market price either for the month in which payments
ever

Kresge (S. S.) Co., Detroit, Mich.
v - May 10. (letter of notification) approximately 7,690 shares
of common stock (par $10).
Price—$39 per share. Un¬
derwriter—Watling, Lerchen & Co., Detroit, Mich. Pro¬
ceeds—To Estate of Anna E. Kresge, the selling stock¬

NEW ISSUE CALENDAR

General Telephone Corp.
April 19 filed 150,000 shares of common stock (par $20)
being offered for sale to employees of the company and
,

•

*

equipment

and working
7705, Baltimore 21, Md.

Address—Box

~

May 29, 1951
Arizona Edison Co.—

..

Dewey &:Almy Chemical Co

--.Common

May 31, 1951

$100), with warrants attached.
?' New

Goebel

(Adolf), Inc.
} May 14 (letter of notification) 10,000,shares of common
stock (par $1).; ;Price-r~At the market (about $5.25 per
'share);'- Underwriter — The First Guardian Securities

England Gas & Electric Association—Common
June 5,' 1951

Proceeds—To Anthony De Angelis,

-

-Bonds

President, the selling stockholder.
t

'

■

-1 •

.

Golconda

;
.

/

■■

•

Mines

,

(letter of notification) 6,705 shares of common
stock (no par), to be offered to common stockholders
at the rate of one share for each 10 shares held March 10;
March 13

Manning, Maxwell & Moore, Inc

__-Common

—

Yale & Towne Manufacturing Co.— —Common

.

.

rights to expire

Ltd., Montreal, Canada

April, 9 filed 750,000 shares of common stock.
Price—
At par ($1 per share). Underwriter—George F. Breen,
New York. Proceeds—For drilling expenses, repayment
of advances and working capital. Offering—Date not set.

June

June 11,
common

North Penn Gas Co

.stock to be sold to three individuals and six underwriting
firms (latter includes A. C. Allyn & Co., Inc., Chicago,

«

111., and Reynolds &
I (25 cents per share).

Co., New York).

Price—At par
Underwriter—None.
Proceeds—
To construct steel plant.
Office—Kentucky Home Life
Building, Louisville, Ky.
*
•
'*

'

•

Greer

stock (par 50 cents).

;

Gyrodyne Co. of America, Inc.

V

writer—None.
_■

.

i

—

^

•

---Common

1951

——

_

-Debentures

June 12, 1951

June

■

•

i

Squibb (E. Ri) & Sons
.•

June 24, 1951

Public Finance Services, Inc.—

—

July 17, 1951
—Preferred

MississippHPower Co._—

(5/21)

-Debentures

March 14

•

.

(letter of notification) 34,320 shares of class A
common stock
(par $ 1). Price—$5 per share. Under¬
writers—Company itself in New York, and Jackson &
Co., Boston, Mass. Proceeds — For partial financing of
anticipated military contracts and for acquisition of new

;

manufacturing

;

York 5, N. Y.

;

Hamilton

Oct.

facilities.
Fire

Office—80 Wall Street,

<

Co.,

2

(letter Of notification) 64,000 shares of capital
(par $5). Price—$4.50 per share. Underwriter—
Jenks, Kirkland & Grubbs, Philadelphia, Pa. Proceeds—
-To increase capital and
surplus in order to offer addi¬

Israel Steel Corp.

stock

tional lines of
and

insurance, including automobile casualty
Financing indefinitely delayed.

liability coverage.

Hiller Helicopters, Inc.
April 25 filed $2,500,000 of 5% convertible income de¬

bentures

.unit).

due

May 1,

1961. -Price—At par ($1,COO per
& Co., Inc. and Lehman

Underwriters—Blyth

^Brothers, New York. Proceeds—For plant expansion, to
-purchase additional equipment, to reduce outstanding
loans and for working capital. Offering—Made
today.
Hilton

Hotels

Corp., Chicago,

III.

-March 30 filed 153,252 shares of common stock (par
$5)
now offered to holders of common stock of Hotel Wal'

dorf-Astoria Corp. in exchange for their holdings of
such

stock

May 28.

on

a

share-for-share basis; offer expires

on

Dealer-Manager—Carl M. Loeb, Rhoades & Co.,

New York.

-

-f

Jan. 2

and for

shares of com¬
Price—At market (estimated at $2
; per share). Underwriter—E. F. Hutton & Co., San Francisco, Calif. Proceeds—To Siegfried Bechhold, the sellstock (par $1).

•

•

ing stockholder. Letter withdrawn.

.

For

new

construction.

■

*

Imperial. Brands, Inc., Los Angeles, Calif.
May 2 (letter of notification) 40,000 shares of capital
stock.

Price—At par ($1 per share).

Underwriter—Floyd
Co., Inc., Los Angeles, Calif. Proceeds—To
purchase baking machinery and equipment. Office—3213
East Fowler St., Los Angeles, Calif.
A. Allen

par

($10

per

working capital.

&

International Life Insurance Co., Austin, Tex.
'March 30 filed $1,200,000 special stock debentures
to be
".sold in units of $500 each by regular licensed insurance




Malone-Darhasana

Mining Co., Silver City, N. M.

May 10 (letter of notification) $50,000 first mortgage 4%
convertible gold bonds (in denominations of $500 each).
Price—At par.
Underwriter—None. Proceeds—To pay

mill.

n

Manning, Maxwell & Moore, Inc. (6/5)
May 16 filed 150,000 shares of common stock (par
$12.50), to be offered to stockholders of record who have
nbf Waived their preemptive rights at rate of 15/44ths
;

of'§ share held, as of record

about June 5, 1951. " Price

be supplied by amendment. Underwriters—Horn& Weeks and Clark, Dodge & Co., New York.
Proceeds—To redeem $281,000 of preferred stock and for
blhWer

/

working capital.

.

/

(J. W.), Inc., Brooklyn, N. Y.
...
April 27 filed 50,000 shares of common stock (par $1).
Price—To be supplied by amendment. UnderwriterCarl M. Loeb, Rhoades & Co. and Lehman Brothers,
New York. Proceeds—To Joe Weinstein, President of
Mays

the company, the

selling stockholder.
Inc., Baltimore, Md.

Jersey Central Power & Light Co.
*
Feb. 21 filed $1,500,000 first mortgage bonds due in 1981.

May 3

Proceeds—For expansion program. Bids—Only one bid
was received by company on March
27, from Halsey,

Proceeds — For
St., Baltimore 2, Md.
•
Mutual Citrus Products Co., Anaheim, Calif.
May 8 (letter of notification) 5,000 shares of common
stock to be offered to present stockholders. Price — At
par ($10 per share). Underwriter—None. Proceeds—For
working capital. Office—424 So. Atchison St., Anaheim,

Stuart & Co. Inc.,

ing—Postponed

which was returned unopened. Offer¬
indefinitely.
Statement effective

14.

Jersey Central Power & Light Co.
preferred stock

Feb. 21 filed 40,000 shares of cumulative

(par $100). Proceeds—From sale of preferred, together
with proceeds to be received from the sale of 350,000
additional common shares to General Public Utilities

Corp., the parent, will be used for new construction.
Bids—Only one bid, from Union Securities Corp. and
.

Idaho Power Co.

May 14 filed 35,000 shares of 4% preferred stock (par
.$100). Price — To be supplied by amendment. Underwriter—Wegener & Daly Corp., Boise, Ida. Proceeds—

;

general corporate purposes. *

McCormick & Co.,

March

mon

Price—At

Jerry Fairbanks, Inc., Hollywood, Calif.
Feb. 16 (letter of notification) 193,000 shares of common
stock (par $1). Price—$1.50 per share.
Underwriter—
D. Gleich Co., New York. Proceeds—For production of
motion pictures for theatrical and television purposes

March

Idaho Maryland Mines Corp,
27 (letter of notification) 6,500

(letter of notification)

15,000 shares of common
share). Underwriter—
None. Proceeds—For corporate purposes and the pur¬
chase of merchandise (steel) for resale. Office—Care of
Efrein & Metrick, 320 Broadway, New York, N, Y.
stock.

,

April 16, filed 250,000 shares of common stock (par $1),
of.Which 25JQQQ. shares .will Lueuoffered Jto employees.. Any
unsubscribed shares, plus the remaining 225,0004 shares,
are to be offered to public.
Price—$3.50 per share (with
an underwriting commission of 35 cents) to employees;
$3.75 per share (with an underwriting commission of
60 cents) to public. Underwriter—Floyd D. Cerf, Jr. Co.,
Chicago, 111. Proceeds—To redeem 1,873 shares of 5%
preferred stock and $75,000 of 3% debentures and for

•

crease

drilling program.

Corp., Opa-Locka, Fla.

indebtedness and purchase

agents of the company. Price—At par. Proceeds—To in¬
capital and surplus.

Philadelphia

•

:

September 11, 1951

New

^

Insurance

j

Proceeds—To carry pn
Ludman

•

f

Alabama Power Co

Ohio/

Loyalta Oils, Ltd., Edmonton, Canada
April 16 filed 750,000 shares of capital stock (par $1).
Price—50 cents per share. Underwriter—James T. Chiles
of Denver, Colo., who will conduct offering to public by
means of a mail campaign directed from Edmonton, Can¬

—Preferred

15, 1951

on July 1. Price—$20 per. share. Under¬
Proceeds—For working capital. Office—

203 West Ninth St., Lorain,

ada.

Glenmore Distilleries Co.—

Hydratilics, Inc., Brooklyn, N, Y.

May 11 (letter of notification) 21,150 shares of common
Price—$4 per share. ■ Underwriter
—None; Proceeds—For general corporate purposes. Office—454 18th Street, Brooklyn 15, N. Y.

■'*

6, 1951

Buffalo Electro-Chemical Co., Inc.
1:30 p.m. (EDT)—————

•

Green River Steel Corp., Louisville, Ky.
May 10 (letter of notification) 342,500 shares of

Lorain, Ohio

Lorain Telephone Co.,

■

(EDT)

a.m.

-

„

Long Island Lighting Co. <
April 6 filed 574,949 shares of new common stock-pf
which 524,949 shares are being offered common stocky
holders of record May 2 in the ratio of one share for
each six shares held, with an oversubscription privilege;
rights to expire on May 18. Unsubscribed shares first
to be offered to employees up to a maximum of 200
shares each.
Price — $13
per
share.
Underwriter —
None. Blyth & Co., Inc.* has been engaged as DealerManager
to
obtain
subscriptions.
Proceeds — For
additions and improvement to property, Statement ef¬
fective May 2.
■■

Georgia Power Co. 11

'

Corp., New York.

39

(2079)

Salomon Bros. & Hutzler

(jointly), was received March

returned unopened. Statement effective
March 14. Amendment—On May 8 SEC granted an ex¬
emption from competitive bidding. Preferred may. be
privately placed..

27, which

was

•
Kentucky Utilities Co. (5/23)
May 14 filed 260,071 shares of common stock (par $10)
to be offered to common stockholders of record May 23,
1951 at rate of one share for each seven shares held.

Price—To

be

supplied by amendment. Underwriters—
Blyth & Co., Inc., New York, and J. J. B. Hilliard & Son,
Louisville, Ky. Proceeds — For property additions and
new

construction.

stock

(letter of notification) 7,795 shares of common
(no par). Price—$25 per share.
Underwriter-

Alex. Brown &

Sons, Baltimore, Md.

working capital. Office—414 Light

Calif.

.

(5/24)
May 3 filed $30,000,000 of sinking fund debentures, due
June 1,
1976. Price—To be supplied by amendment.
Underwriter—Goldman, Sachs & Co; and Lehman Bro¬
thers, New York. Proceeds—For plant and equipment
improvements and for general corporate purposes.
National Research Corp., Cambridge, Mass.
April 16 (letter of notification) 2,000 shares of common
stock (par $1).
Price—$27 per share. Underwriter—
Paine, Webber, Jackson & Curtis, Boston, Mass. Proceeds
—To William A. Coolidge, the selling stockholder.
National

Dairy Products Corp.

New England Gas & Electric Ass'n (5/31)
May 16 filed 197,243 common shares of (par $8) bene¬
ficial interest to be offered to common stockholders of
•

record May

31

on

basis of one share for each eight shares
Continued on page 40

33

The Commercial and Financial Chronicle

(2078)

Securities

OV

Corporate

|z

New York

Boston

Philadelphia

and Public

/

>

-

Financing

Pittsburgh

San Francisco

Private Wires




Now

to

all

offices

Chicago

Cleveland

in

i;

Registration

.

.

.

Thursday, May 17, 1951

INDICATES
SINCE

ADDITIONS

PREVIOUS

ISSUE

<»

Volume 173

Number 5012

ferred at $5.60

,

capital.

.

Proceeds—For

Address—Box

7705,

The Commercial and Financial Chronicle

.

.share and

per

writer—None.

.

Under¬

at par.

common

equipment

Baltimore

•

working
Md.

NEW ISSUE CALENDAR

General Telephone Corp.
April 19 filed 150,000 shares of common stock (par $20)
being offered for sale to employees of the company and
its subsidiaries.
Price—Fixed at $3 below the average
market price either for the month in which payments
are

completed

ever

is lower,

than

$25

in

stock

common

advances

to

construction

Thorer &

event more than $35 nor less
initial offering will close on
Proceeds—To make additional investments

July 3, 195h
-*

but in

no

programs

and

for

general

corporate

Culver Corp.

pur¬

Frontier

due

first

mortgage

Ripley & Co. Inc.; Shields & Co. and Salomon Bros.
(jointly); Blyth & Co., Inc. and Kidder, Peabody & Co. (jointly); The First Boston Corp.; Kuhn,
Loeb & Co.; Union Securities Corp. and Equitable Secu*"_ rities Corp. (jointly). Proceeds—For construction pro-

Toronto (City

of), Canada

Bids—To be opened at 11

gram.

Glenmore
Dec.

28

(par

$1).

filed

Distilleries

(EDT)

on

May 24, 1951

June 5.

Virginia Electric & Power Co
class

of

be filed

B

Under-

May 29, 1951

;

writer—Glore,

Forgan & Co., New York.
Proceeds—
working capital and general corporate purposes.
*- Offering—Expected to be withdrawn and new
filing

Arizona Edison Co.

Common

Dewey & Almy Chemical Co.__.

Common

shares

expected to be made covering 30,000 shares of preferred
stock (par $100), with warrants attached.
Goebel

(Adolf), Inc.
May 14 (letter of notification) 10,000,shares of common
stock (par $1)... Price-r-At the market (about $5.25
per
share)// Underwriter — The First Guardian Securities
Corp., New York.
Proceeds—To Anthony De Angelis,

•'

President, the
T'+

i

•

• t.

•

selling stockholder.
"

'

'

'

•

New

June 5,

Georgia Power Co. 11

Golconda Mines Ltd., Montreal, Canada
April 9 filed 750,000 shares of common stock.
Price—
At par ($1 per share). Underwriter—George F. Breen,

:

stock

Common

Green River Steel Corp., Louisville,
Ky.
May 10 (letter of notification) 342,500 shares of
-

111., and Reynolds & Co., New York);
Price—At par
.(25 cents per share).., Underwriter—None.
Proceeds—

'

To
r

11, 1951
Debentures

plant.. Office—Kentucky Home Life
Building, Louisville, Ky.
y
;
1
'
/

Co

stock

Hydratilics, Inc., Brooklyn, N. Y.
(letter of notification) 21,150 shares of

(par 50 cents).

Price—$4

June 15, 1951

—None.

Proceeds—For general corporate purposes.
fice—454 18th Street, Brooklyn 15, N. Y.

__Common

June 24, 1951
Public Finance

Services, Inc

Mississippi Power Co.__.__

;

Alabama Power Co

York 5, N. Y.

Oct.

Insurance

Co.,

Philadelphia

tional lines of
and

insurance, including automobile casualty
Financing indefinitely delayed.
Helicopters, Inc.

liability
Hiller

coverage.

April 25 filed
s

;

;

bentures

$2,500,000 of 5%

due

May

1,

1961.

convertible

Price—At

par

($1,C00

per

Underwriters—Blyth & Co., Inc. and Lehman
Brothers, New York. Proceeds—For plant expansion, to
purchase additional equipment, to reduce
outstanding
loans and for working capital.
Offering—Made today.
Hilton

Hotels

March 30 filed
now

Chicago,

offered to holders of

dorf-Astoria
such

on

New York.

Idaho
March

Corp.

in

common

exchange

III.

common

stock

for

stock
of

(par $5)

Hotel

Wal¬

their

holdings of
basis; offer expires on
Dealer-Manager—Carl M. Loeb, Rhoades & Co.,

stock

May 28.

mon

Corp.,

153,252 shares of

a

.

share-for-share

<

-

stock

(par $1).

of

com¬

Price—At market

(estimated at $2
per share). Underwriter—E. F. Hutton &
Co., San Fran¬
cisco, Calif. Proceeds—To Siegfried Bechhold, the sell¬
ing stockholder. Letter withdrawn.
-

;•
Idaho Power Co.
May 14 filed 35,000 shares of 4% preferred stock (par
$100). Price — To be supplied by amendment. Under¬

writer—Wegener & Daly Corp., Boise, Ida.
For

new

Proceeds—

construction.

Imperial Brands, Inc., Los Angeles, Calif.
May 2% (letter of notification) 40,000 shares of capital
stock.

,

A.
,

Price—At

company.

Proceeds—To in¬

par.

capital and surplus.

Price—At par ($1 per share).
Underwriter—Floyd

Allen

Israel Steel Corp. ,
Jan. 2 (letter of notification)
Price—At

stock.
None.

&

Co., Inc., Los Angeles, Calif. Proceeds—To
purchase baking machinery and equipment. Office—3213
East Fowler St., Los
Angeles, Calif.

International Life Insurance Co.,
Austin, Tex.
$1,200,000 special stock debentures to be
sold in units of $500 each by regular licensed insurance
March 30 filed




par

Proceeds—For

chase of merchandise

Efrein

&

Metrick,

($10

15,000 shares of

per

corporate

and the pur¬
Office—Care of

purposes

(steel) for resale.

320

common

Underwriter—

share).

Broadway,

New

York,

N.

Y.

a

Colo, who will conduct offering to public by
mail campaign directed from Edmonton, Can¬

Corp., Opa-Locka,

Fla.

City, N. M.

(6/5)
■
filed 150,000 shares of common stock (par *
$12.50), to be offered to stockholders of record who have :*,
not waived their preemptive rights at rate of 15/44ths
of a1 share held, as of record about June 5, 1951. "Price
-L-Td be supplied by amendment.
Underwriters—Hornblower & Weeks and Clark, Dodge & Co, New York.
Proceeds—To redeem $281,000 of preferred stock and for

Feb. 16 (letter

of notification) 193,000 shares of common
(par $1). Price—$1.50 per share. Underwriter—

stock

D. Gleich Co., New York. Proceeds—For production of
motion pictures for theatrical and television purposes
and for

Manning, Maxwell & Moore, Inc.

May

16

working capital.
Mays

Jerry Fairbanks, Inc., Hollywood, Calif.

working capital,

•

Jersey Central Power & Light Co.
Feb. 21 filed $1,500,000 first mortgage bonds due in 1981.
Proceeds—For expansion program. Bids—Only one bid
was
received by company on March 27, from Halsey,
Stuart & Co. Inc., which was returned

ing—Postponed

indefinitely.

unopened.

Statement

Offer¬

effective

14.

additional

common

shares

to

General

Public

Utilities

Corp., the parent, will be used for new construction.
Bids—Only one bid, from Union Securities Corp. and
Salomon Bros, & Hutzler (jointly), was received March
27, which was returned unopened. Statement effective
March 14. Amendment—On May 8 SEC granted an ex¬
emption from competitive bidding. Preferred may be
privately placed^
•
Kentucky Utilities Co. (5/23)
May 14 filed 260,071 shares of common stock

to be offered to

common

1951

one

at

fate

Price—To

of

(par $10)
23,

stockholders of record May

share

for

each

shares

seven

be

held.

supplied by amendment. Underwriters-*Blyth & Co, Inc, New York, and J. J. B. Hilliard & Son,
Louisville, Ky. Proceeds — For property additions and
new

construction.

,

.

April 27 filed 50,000 shares of common stock (par $1).
be supplied by amendment. UnderwriterCarl M. Loeb, Rhoades & Co. and Lehman Brothers,
New York.
Proceeds—To Joe Weinstein, President of
Price—To

the company,

the selling stockholder.
Inc., Baltimore, Md.

(letter of notification) 7,795 shares of common
stock (no par).
Price—$25 per share. UnderwriterAlex. Brown & Sons, Baltimore, Md.
Proceeds — For
May 3

working capital.
•

Office—414 Light St., Baltimore 2, Md.

Mutual Citrus Products Co.,

May
stock

Jersey Central Power & Light Co.
preferred stock
(par $100). Proceeds—From sale of preferred, together
with proceeds to be received from the sale of 350,000
Feb. 21 filed 40,000 shares of cumulative

/

(J. W.), Inc., Brooklyn, N. Y.

McCormick & Co.,

March

(letter of

of

.

.

Maryland Mines Corp.
notification) 6,500 shares

27

Lorain, Ohio.

convertible gold bonds

•

income de-

unit).

on July 1. Price—$20 per share. Under¬
Proceeds—For working capital. Office—

May 10 (letter of notification) $50,000 first mortgage 4%
(in denominations of $500 each).
Price—At par.
Underwriter—None. Proceeds—To pay
indebtedness and purchase mill.
"... '
' •

Bonds

2

(letter of notification) 64,000 shares of capital
(par $5). Price—$4.50 per share. Underwriter—
Jenks, Kirkland & Grubbs, Philadelphia, Pa. Proceeds—
To increase capital and
surplus in order to offer addi¬

stockholders

common

Malone-Darhasana Mining Co., Silver

•

crease

stock
♦

__Preferred

September 11, 1951

agents of the
Fire

to

share for each 10 shares held March 10;

Chicago, 111. Proceeds—To redeem 1,873 shares of 5%
preferred stock and $75,000 of 3%♦ debentures and for
general corporate purposes. '
/
:

July 17, 1951

Gyrodyne Co. of America, Inc. (5/21)
; March 14 (letter of notification) 34,320 shares of class A
♦common
stock "(par $1). Price—$5 per share.
Under-

Hamilton

Debentures

:

Lorain, Ohio

April 16 filed 250,000 shares of common stock (par $1),
of which 25,000. shares .will be, offered to employees. Any
unsubscribed shares, plus the remaining 225,000 shares,
are to be offered to public.
Price—$3.50 per share (with
an underwriting commission of 35 cents)
to employees;
$3.75 per share (with an underwriting commission of
60 cents) to public. Underwriter—Floyd D. Cerf, Jr. Co,

Of-

writers—Company itself in New York, and Jackson &
Co., Boston, Mass. Proceeds —For partial financing of
I anticipated military contracts and for
acquisition of new
I manufacturing facilities.
Office—80 Wall Street, New

one

Ludman

t

Squibb (E. R.) & Sons

common

share.:' Underwriter

per

Underwriter-—^

Proceeds—To carry on drilling program.

ada.

——Preferred

Greer

-May 11

■

of Denver,
means

Glenmore Distilleries

share.

per

Loyalta Oils, Ltd., Edmonton, Canada
April 16 filed 750,000 shares of capital stock (par $1).
Price—50 cents per share. Underwriter—James T. Chiles

June 12, 1951

construct steel

•

;

——Common

North Penn Gas Co

underwriting
(latter includes A. C. Allyn & Co., Inc., Chicago,

basis;

(letter of notification) 6,705 shares of common

203 West Ninth St,

Co., Inc.

stock to be sold to three individuals and six

firms

-

common

$13

(no par), to be offered

writer—None.

_____

June

•

common
common

l-for-15

to

at the rate of

6, 1951

1:30 p.m. (EDT)_,

—

Lorain Telephone Co.,

,

—Common

Manufacturing Co

Buffalo Electro-Chemical

Proceeds—For drilling expenses, repayment
of advances and working capital. Offering—Date not set.

;

Price

rights to expire

New York.

»

each.

March 13

Manning, Maxwell & Moore, Inc

June

a

fective May 2.

-—Bonds

,

•;

on

as Dealerobtain
subscriptions.
Proceeds — For
additions and improvement to property. Statement ef¬

1951
(EDT)

a.m.

31

Blyth & Co, Inc, has been engaged

Manager

England Gas & Electric Association—Common

Yale & Towne

'

.

None.

May 31, 1951
.

•

March

Long Island Lighting Co.<
April 6 filed 574,949 shares of new common stock of
which 524,949 shares are being offered common stock¬
holders of record May 2 in the ratio of one share for
each six shares held, with an oversubscription privilege;
rights to expire on May 18. Unsubscribed shares first
to be offered to employees up to a maximum of 200

Common

stock

common

by amendment.

For

...

Debentures

May 25, 1951

Co.

shares

159,142

Price—To

a.m.

record

•
Linnton Plywood Association,
Portland, Ore.
May 10 filed 400 shares of common stock and 200 shares
of preferred stock. Price—$5,000
per share for common
and $2,500 per share for preferred stock. Underwriter—
None, but John J. Oxley and J. A. Williams will solicit
subscriptions. Proceeds—To improve plant site and ac¬
quire facilities and machinery.

Debentures

National Dairy Products Corp.

of

on May 23.
Price—$24 per share. Un¬
derwriter—None. Proceeds—For working capital. Office
—1342 M Street, Lincoln, Neb.

Common

.

& Co. and Riley & Co, both of
Proceeds—For working capital.

rights will expire

Common

May 23, 1951
Kentucky Utilities Co

& Hutzler

.

stockholders

Southwestern Investment Co._—Preferred & Com.

bonds

man

.

Debentures

June

1, 1981. Underwriters—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Morgan Stanley & Co.; Lehman Bros.; Harri-

.

1

Dalton

Lincoln Telephone & Telegraph Co.
April 24 (letter of notification) 10,002 shares of
stock (par $16.66% per share)
being offered to

Common

Refining Co.-

F.

Milwaukee, Wis,

—.Common

Gyrodyne Co. of America, Inc._.

-

Georgia Power Co. (6/5)
May 4 filed $20,000,000 of new

—Gardner
Common

Ekco Products Co._

Statement effective May 1.

poses.

Le Roi Co., Milwaukee, Wis.
May 10 (letter of notification) 62,300 shares of common
stock (par $2.50).
Price—$4.75 per share.
Underwriter

May 21, 1951
Cleveland Trencher Co.

equities of subsidiaries and temporary
subsidiaries in connection with their

the

•

(CDT)___Equip. Tr. Ctfs.

noon

Hollender, Inc. 11 a.m.'(EDT)___Common

The

share.

per

holder.

May 17, 1951
Illinois Central RR.

for the next succeeding month, which¬

or

Kresge (S. S.) Co., Detroit, Mich.
\ '<
May 10 (letter of notification) approximately 7,690 shares
of common stock (par $10).
Price—$39 per share. Un¬
derwriter—Watling, Lerchen & Co, Detroit, Mich. Pro¬
ceeds—To Estate of Anna E. Kresge, the
selling stock¬

and

21,

39

(2079)

Anaheim, Calif.

(letter of notification) 5,000 shares of common
to be offered to present stockholders. Price — At

8

($10 per share). Underwriter—None. Proceeds—For
working capital. Office—424 So. Atchison St, Anaheim,
par

Calif.

National

Dairy Products Corp.

(5/24)

May 3 filed $30,000,000 of sinking fund debentures, due
June
1, 1976. Price—To be supplied by amendment.
Underwriter—Goldman, Sachs & Co. and Lehman Bro¬

thers, New York. Proceeds—For plant and equipment
improvements and for general corporate purposes.
National Research Corp., Cambridge,

Mass.

April 16 (letter of notification) 2,000 shares of common
stock
(par $1).
Price—$27 per share. Underwriter—
Paine, Webber, Jackson & Curtis, Boston, Mass. Proceeds
—To William A. Coolidge, the selling stockholder.
•

New

England Gas & Electric Ass'n

(5/31)

May 16 filed 197,243 common shares of (par $8) bene¬
ficial interest to be offered to common stockholders .of"
record

May 31

on

basis of

one

share for each eight

Continued

on

shares

page

40

40

(2080)

The Commercial and Financial Chronicle

Continued

from

then held. Price—To be

writer—None.

acquire

supplied by amendment. Under¬

Proceeds—To pay

stock

North

39

page

of

short-term notes and

subsidiaries.

Co. Inc.; Otis & Co.; The First Boston Corp.

Underwriter—Michael Investment Co.,

Inc., Providence, R. I.

Proceeds—For

working

capital.

Offering—Postponed temporarily.
North

Penn

Gas

Co.

(6/11)

May 1 filed $2,700,000 of debentures due 1971.

Under¬
writer—To be determined by competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co.
Inc.; A. C. Allyn &
Co., Inc.; Drexel & Co.; The First Boston Corp.; Lehman

Brothers; Smith, Barney & Co.; Equitable Securities
Corp.; Union Securities Corp. Proceeds—To repay bank
Northern

Illinois

Corp., DeKalb, III.
May 7 (letter of notification) 3,080 shares of $1.50 cumu¬
lative preferred stock (no par). Price—$23.50
per share.
Underwriter—None.
Proceeds—For working capital to
be used to make loans/

program.

Inc., Detroit, Mich.
April 30 (letter of notification) 10,800 shares of common
stock (par $1). Price—At the market (about $1.871//2 per
share). Underwriter—A. H. Vogel & Co., Detroit, Mich.
Proceeds—To
three
selling stockholders.
Office—443
West Congress Street, Detroit 26, Mich.
^

Corp., Bradenton, Fla.
May 3 (letter of notification) 2,000 shares of 6% cumula¬
tive preferred stock and 2,000 shares of common stock.

Northwestern Oils, Inc., Sparks, Nev.
May 1 (letter of notification) 3,000,000 shares of
stock

(par

of which 1,000,000 shares will be
by James Elias Morris.
Price—At par.

gratis
Underwriter—None.
1800 B

common

10 cents),

donated

Proceeds—To

drill

well.

Office—

Street, Sparks, Nev.

Norwich

May 2

Pharmacal

Saul

(B.

(letter of notification)

2,100 shares of common
Price—At market (approximately $19
share). Underwriter—Reynolds & Co., New York.
Proceeds—To Warren E. Eaton, the selling stockholder.
(par $2.50).

F.)

Co., Washington, D. C.
May 9 (letter of notification) $45,000 of promissory notes
on
"Barry Farms," Washington, D. C., secured by first

/

Underwriter—B. F. Saul Co., Washington,

Proceeds—To reimburse latter firm for moneys ad¬

vanced to M & R

Contractors, Inc., 1028 Connecticut Ave.,
Washington, D. C.

N. W.,

Seaboard

Container

Corp.
March 1 (letter of notification) 12,000 shares of class A
common stock (par $1).
Price—$5.50 per share. Under¬

March 30 filed 436,224 shares of common stock
(par $8)
being offered for subscription by common stockholders
of record May 2,
1951, on the basis of one share for

writer—Barrett

each

10

•

lege;

rights

share.

shares

.held, with an oversubscription privi¬
to expire on May 18. Price—$29.25 per

Underwriters—Issue

awarded

was

on

May 2

to

Merrill Lynch, Pierce, Fenner & Beane and Kidder, Pea-

body & Co.
gram.

(jointly). Proceeds—For construction
Statement effective April 18.

Ohio

Edison

March 30

Frederic

Herrick

& Co., New York.
Proceeds—
Mann, President, who is the selling

R.

stockholder.
American

Shares, Inc.
May 10 filed 350,000 shares of capital stock (par $2.50).
Price—At the market.

Underwriter

ments

Proceeds—For investment.

Co., Chicago, 111.

Smart &

Final

Selected Invest¬

—

March 22 (letter of notification) 12,561 shares of common
stock (no par).
Price—$7.25 per share. Underwriter-

Co.

150,000 shares of pfd. stock (par $100).
Underwriters—To be determined by competitive bidding.

Probable bidders: Morgan Stanley &
Co.;
thers and Bear, Stearns & Co.

Lehman Bro¬
(jointly); W. C. Langley

& Co.; Glore, Forgan & Co. and
White, Weld & Co.
(jointly); The First Boston Corp. Proceeds — For con¬

Were

Pacific

Coast Securities Co., San Francisco, Calif.

ceeds—To selling stockholders.

•

South

State

filed
Price

stock.

Office

—

Pro¬

4510 Colorado

Uranium

by
—

Mines

amendment

At

($1

par

May 2.

Olympic Radio & Television, Inc.
April 16 (letter of notification) 8,800 shares of com¬
mon stock
(par $1). Price—At the market. Underwriter
—None, but Van Alstyne, Noel & Co., New York, will

and

Office—40 East 49th Street,

Proceeds—For corporate

purposes.

Office—1801 Second.

St., Sacramento 4, Calif.

>

Corp., Brockton,

Mass.
May 2 (letter of notification) 1,000 shares of 6% cumu¬
lative preferred stock. Price—At par ($100 per share).
Underwriter—None.
Proceeds—To provide funds for
Finance

Office—•

business of installment financing.
Street, Brockton, Mass.

conducting

(5/23)
to 3%% consolidated
loan debentures due serially May 1, 1955-1981, inclusive.
Price—To be supplied by amendment.
Underwriter—.
Harriman Ripley & Co., Inc.; Dominion Securities Corp.;
Toronto

May

(City of), Canada

$20,000,000

filed

10

3%

of

Smith, Barney & Co.; A. E. Ames & Co., Inc.; The First
Wood, Gundy & Co., Inc.; McLeod, Young,
Weir, Inc. Proceeds—For advances to the Transporta¬
tion Commission for capital improvements.
Boston Corp.;

•

Tracerlab, Inc., Covington, Ky.

May 10 filed 175,000 shares of common stock (par $1),
Price—To be supplied by , amendment.
Underwriter—
Lee

Proceeds—To retire

Higginson Corp., Boston, Mass.

outstanding bank loans incurred in connection with ac¬

quisition of a controlling interest in Kelley-Koett Man¬
ufacturing Co., manufacturers and distributors of X-ray
appartus and equipment; and for working
Trans Caribbean Air Cargo

•

capital.

Lines, Inc.

notification) 20,000 shares of capital
Price—At market, approximately
$2.37y2 per share.
Underwriter—Gearhart, Kinnard &
Otis, Inc., New York.
Proceeds—O. Roy Chalk, Presi¬
dent, the selling stockholders.
t
(letter of

8

stock

(par 10 cents).

Exploration Co., Salt Lake City, Utah

Uranium

May 10 (letter of notification) 100,000 shares of common
stock.
Price—At par (25 cents per share).
Underwriter
—None.
Proceeds—To mine ore.
Office—407 Pacific
National Life Building,

Salt Lake City 1, Utah.

Utica Cutlery Co.
Ltd.

(Canada)
shares of capital
share).
Underwriter-

384,000

per

Optionee—Robert Irwin Martin of Toronto.
For

operating capital.
17, N. Y.

York

Thomson-Diggs Co., Sacramento, Calif.

Blvd., Los Angeles 53, Calif.
April 9

for

May 9 (letter of notification) 6,000 shares of capital stock
(no par). Price—$50 per share. Underwriter — None.

•

Ltd., Los Angeles, Calif.

Co.,

(par $1).

by-Wire" service to be known as the Telegift Service,
and

May

Selected

pro¬

filed

struction program.
Bids—Temporarily postponed.
to have been submitted up to 11:30
a.mV(EDT) on

—To

York
60,000 shares of com¬
Price—$2 per share. Underwriter
Proceeds—To establish and operate a "Gifts-

—None.

•

Weeks, New York. Proceeds—To Charles
Jr., President, who is the selling stockholder.
Offering—Indefinitely postponed.
•

New

Inc.,

(letter of notification)

20

stock

mon

47 West Elm

Hornblower &

deed of trust.

«

Underwriter—None.

Sattler's, Inc., Buffalo, N. Y.

D. C.

Co.

Edison Co.

share).

per

promote and operate business.

March 22 filed 200,000 shares of common stock (par $1).
Price—To be supplied by amendment.
Underwriter—

per

Ohio

($25

par

Proceeds—To

Telegift,
March

Time

Roto Flame

Thursday, May 17, 1951

.

for possible public sale by certain selling stockholders
during the same period." Underwriter—None.

New

Radioactive Products,

Hahn,

•

stock

Burr, Inc. (jointly); Kidder, Peabody & Co. and Blyth
Co., Inc. (jointly); Eqiutable Securities Corp.; Carl
M. Loeb, Rhoades & Co.
Proceeds — For construction
&

Price—At

loans.
•

and Coffin

&

American Acceptance Corp.

March 20 (letter of notification) 15,000 shares of 60-cent
cumulative convertible preferred stock (par $5). Price
—$10 per share.

•
Public Service Co. of New Hampshire
May 11 filed $3,000,000 first mortgage bonds, series F,
due June 1, 1981. Underwriter — To be determined by
competitive bidding. Probable bidders: Halsey, Stuart &

.

.

Proceeds—

commissions, exploration and development expenses,
working capital.

May

(letter

4

stock

1,000 shares of capital
stockholders of record May 1,

notification)

of

offered

being

to

l-for-4 basis; rights to expire June 5. Price—
Underwriter—None. Proceeds
expand nlant facilities and for working capital.
Office—820 Noyes St., Utica, N. Y.
1951,

At

on a

($100 per share).

par

—To

.

act

as

broker.

Proceeds—To two selling stockholders.

Pacific Paper Materials Co.,
Portland, Ore.
April 25 (letter of notification) 200,000 shares of common

Southwestern

April

Pacific

filed

March

30 filed 750,000 shares of common stock
being
offered for subscription by common stockholders of rec¬

ord

April 6, 1951, at rate of one share for each share
held; rights to expire on May 22. Price—At par ($1 per
share). Underwriter—None. Unsubscribed shares to be

shares

Veterans Broadcasting

(5/21)

of

holders

from

May

21

to June 5.

Price—$20

Underwriter—The First Trust Co. of
ceeds—For

working capital.

Southwestern

per

Lincoln, Neb.

share.

Pro¬

(5/21)

be offered first to

common stock (no par) to
stockholders from May 21 to June 5.

Pacific Western Oil

per

!'i''

Corp.

shares

of

capital stock (par $4).
price—At the market (based on quotations on New York
Stock Exchange at time of sale).
Underwriter—None.
Proceeds—To J. Paul Getty, President of the
who is the selling stockholder.
Pan

American

company,

shares of

common

Nev.

stock. Price—At

Underwriter—None.

Proceeds—To

purchase machinery and equipment, to construct
in Mexico and for general
corporate purposes.

a

mill

Peabody Coal Co.
March

26

filed

160,000

shares

of

5V2%

prior preferred
(par $25). Price—To be supplied by amendment.
Underwriter—A. C. Allyn & Co., Inc
Chicago, 111. Pro¬

stock

ceeds—For construction program.

postponed.

Offering—Indefinitely

Plywood, Inc., Detroit, Mich.
May 3 (letter of notification) 5,000 shares of common
stock (par $1).
Price—$4.25 per share. Underwriter—
Baker, Simonds & Co., Detroit, Mich.
Proceeds—To
Emery Investment Co., the selling stockholder. Office—
4445 Bellevue
Ave., Detroit 7, Mich.
•

Productive Mines, Ltd.,
Boise, Idaho
(letter of notification) 280,000 units

May 7
stock.

Price—$1

per

unit.

ceeds—For working capital.
Boise, Idaho.
.

-

.

..

capital
Pro¬

Office—2124 Ellis Avenue
^

A

fnb,ic Finance Service,

Inc., Phila., Pa.
notification) $250,000 of 6%

(6/24)
cumula¬

tive
debentures, 1950 series to be offered to present
debenture holders. Price—At par
(in denominations of
$100 each).
Underwriter—None.
Proceeds—For addi¬
tional operating
capital. Office—18 West Chelten Ave
Philadelphia 44, Pa.




or
on

before
or

share thereafter and

May

31,

1953;

before Nov. 30,
on

or

expire

share for each ten shares held; rights

one

on

Warren

stock

(par $2)

to

$15

per

share

1954; and $16.50

before May

per

Telephone Co.

(Ohio)

(letter of notification) 3,000 shares of $5 divi¬

preferred stock (no par) to be offered for subscrip¬
present stockholders in ratio of 0.27695 of a
Price—$100 per share. Under¬
writer—None.
Proceeds—To reimburse the company's

dend
tion

by

share for each share held.

construction costs.

Waverly Oil Works Co.

31, 1956. Proceeds

—For general corporate purposes."

20,000 shares of capital

April 26 (letter of notification)

Standard-Thomson

Corp.
(letter of notification)
approximately 13,750
shares of common stock (par $1). Price—At the market(approximately $7 per share). Underwriters—Lee Higginson Corp., Carreau & Co. and Reich & Co., New York
12

Proceeds—To four selling stockholders. No general pub¬
lic offering planned.

stock

1951
15.

(par $1) offered to stockholders of record May 1,
a one-for-four basis; rights to expire on June

on

Price—$10

—For

share. Underwriter—None. Proceeds

per

general corporate purposes.

Ave., Pittsburgh

Office—4403

Centre

13, Pa.

Steak'n Shake, Inc., Bloomington, III.
April 4 (letter of notification) 18,180 shares of common
stock (par 50 cents). Price—$5.50 per share. Underwriter

West Virginia Coal & Coke Corp.
April 16 (letter of notification) 3,700 shares of common
stock (par $5). Price—At the market (not less than $18
per share),
Underwriter—Tucker, Anthony & Co., New
York. Proceeds—To Charles Dorrance, President, who is

—None.

the selling

Proceeds—To three

—1700 West

selling stockholders.
Washington St., Bloomington, 111.

Office

•

stockholder.

Westates

Explorations, Inc., Las Vegas, Nev.

Sterling Engine Co., Buffalo, N. Y.
April 27 (letter of notification) an aggregate of not to

May 8 (letter of notification) 1,750,000 shares of common

exceed

—None.

16,000

shares of

common

stock

(par

10

cents).
share). Underwriter

Price—At market (about $2.25 per
—None, but Bache & Co. will act as broker.

Proceeds—

To Addison F. Vare, the selling stockholder.
Stevens

(I.

& Co., Inc.
100,000 shares of capital stock

(par $15)

Employees"

employees of company. Price—At average of
high and low quotations on day preceding offering. Pro¬
ceeds—For general corporate purposes.
Oil

Co., Philadelphia, Pa.
May 3 filed 11,000 "memberships in the 1951 plan," effec¬
tive July 1, 1951, to be offered to employees upon their
becoming eligible for membership; a maximum of 111,000
shares of common stock (no par) which it is anticipated
may be purchased by the trustees of the plan during the
period-July 1, 1951, to June 30, 1952; and 193,262 shares
common

stock which "it is

anticipated

may

Proceeds

—

(10 cents

equipment of mining district.
Las

Underwriter
development and
Office—504 South 3rd St.,
per

share).

For exploration,

Vegas, Nev.
Western Gold

Mines, Inc.,

Carson City, Nev.

8 (letter of notification) 30,000 shares of capital
stock (par 10 cents). Price — At the "market" but not
May

to certain

of

Price—At par

stock.

•

P.)

to be offered under "Stock Purchase Plan for

Sun

April 30 (letter of

on

April 27 filed
of

Underwriter—None.
.

share

to

III.
common

stock for each share of preferred stock at $13.50

thereafter and

March

Milling Co., Las Vegas,

Jan. 24 filed 200,000
Par ($1 per share).

basis of

on

March 23

&

common

•

25

Spiegel, Inc., Chicago,
May 2 filed 85,850 shares of

Underwriters—Schneider, Bernet

gram.

May 10 filed 200,000

(5/25)

Hickman, Dallas, Texas; G. H. Walker & Co., St. Louis,
Mo.; and Dewar, Robertson & Pancoast, San Antonio,
Texas. Proceeds—For working capital.

share.

be offered to holders of cumulative preferred stock upon
exercise of stock warrants on basis of one share of

Proceeds—Td'tfetire

promissory notes and for construction'pfoStatement effective April 27. <
J !«$

Electric & Power Co.

May 2 filed 449,674 shares of common stock (par $10)
to be offered to common stockholders of record May

June 11. Price—To be supplied by amend¬
ment
(proposed maximum offering price is $25 per
unit). Underwriter—Stone & Webster Securities Corp-,
New York. Proceeds—For new construction.

per

short-term

sold at public auction in Honolulu.

f

Ave., South, Rochester 4, N. Y.

Virginia

Investment Co.

Inc.

Co.,

April 19 (letter of notification) 26,575 shares of capital
stock. Price—$5 per share. Underwriter—None. Proceeds
—To construct a television station.
Office—17 Clinton

^

April 30 filed 22,288 shares of
Price—$20

Refiners, Ltd., Honolulu, Hawaii

Investment Co.

15,000

$1 cumulative sinking
fund preferred stock (no par) to be offered first to stock¬

stock.

Price—At par ($1 per share). Underwriter—None.
Proceeds—To retire past and current due accounts.
Office—1400 N. W. 15th Ave., Portland, Ore.

30

be offered

exceeding $3.50 per share. Underwriter—J. Arthur War¬
ner & Co., Inc., New York, N. Y.
Proceeds—For explo¬
ration and development of Utah properties.
•

Wilton

Woolen

Co., Wilton, Me.

May 14 filed 195,800 shares of
Price—To
A. C.

be

supplied

by

common

amendment.

stock

(par $1).

Underwriter—

Allyn & Co., Inc., Chicago, 111., and George A. Mc¬

Dowell

&

£o., Detroit, Mich.

Proceeds—To

11

selling

stockholders.
•

-

Yale & Towne

Mfg. Co., New York (G/5)
May 16 filed 102,197 shares of capital stock (par $25)
to

be

offered

to

stockholders

at

rate

of

one

share

for

[Volume 173

Number 5012

.

.

.

The Commercial and Financial Chronicle

shares held on or about June 5; with rights
expected to expire June 20. Price—To be supplied by
Underwriter—Morgan Stanley & Co., New
York.
Proceeds — To repay bank loans and for new
each five

amendment.

equipment,

*

Prospective Offerings
Alabama Power Co.

6, it was stated that company contemplates issuance
sale of $10,000,000 first mortgage bonds. UnderwriterSy—To be determined by competitive bidding. Prob¬
and

able bidders:

Halsey, Stuart & Co. Inc.; Morgan Stanley
& Co.; Blyth & Co., Inc.; Harriman Ripley & Co., Inc.;
Shields & Co. and Salomon Bros. & Hutzler (jointly);
Drexel & Co.;

Union Securities Corp. and Equitable Se^
curities Corp. (jointly); Kidder, Peabody & Co.; The
First Boston Corp.; Lehman Brothers. Proceeds—For ex¬
pansion program.
Bids—Tentatively expected to be
opened on Sept. 11. Registration—About Aug. 10.
Co.

was announced company may soon file a
letter of notification with the SEC covering $300,000 of

Ajoril 25 it

convertible bonds. Price—At par

6%

(in units of $100

each). Underwriter—Tellier & Co., New York. Proceeds
—For new

equipment and for expansion.

American Natural Gas Co.

April 25. William G. Woolfolk, Chairman, announced an

the
basis of one share for ten would probably be made
during the year. No underwriting likely to be involved.

offering of

stockholders under

common

Proceeds to be used for

rights

on

construction costs.

new

Atlas Powder Co.

April 27, it

Edison

Co.

Electric Co.

reported company expects to market late
this year or early in
1952 between $25,000,000 and
$30,000,000 of new bonds. Probable bidders: Halsey,
was

Stuart & Co.

Inc.; Morgan Stanley & Co.; Kuhn, Loeb 8i
Co. and Salomon Bros. & Hutzler (jointly); Blyth & Co.,
Inc., and The First Boston Corp. (jointly); Union Se¬
curities Corp.; Glore, Forgan & Co. and White, Weld &
Co. (jointly); Lehman Brothers; Harriman Ripley & Co.,
Inc.; Merrill Lynch, Pierce, Fenner & Beane.
Proceeds
will be used for construction program.

Electric

Illuminating Co.
reported company may in the fourth
quarter of 1951 issue new preferred stock or first mort¬
gage bonds, or obtain short-term bank credit to finance
its construction and improvement program.
Preferred
stock sale, if negotiated, may be handled by Dillon,
Read & Co., Inc.
Probable bidders for any bond financ¬
ing are: Halsey, Stuart & Co. Inc.; Dillon, Read & Co.
Inc.; Blyth & Co., Inc.; White, Weld & Co.; The First
Boston Corp.; Glore, Forgan & Co. and W. C. Langley &
Co. (jointly); Equitable Securities Corp.
was

•

Colorado Central

Power Co.

April 13 it was reported that the
debt financing to raise additional
construction

1951

$65,300,000 through 1954. He added that no
stock financing is planned until 1955.

program.

Electro-Chemical

Co.,

Inc.

Broadway, New York 5, N. Y., at 1:30 p.m. (EDT) on
June 6 for the purchase of 5,058 shares. oL common stock
(no par value), being 45.98% of the outstanding stock.
The sale does not represent new financing. A group rep¬
resented by Charles A. Buerk (President of the com¬
pany), Schoellkopf, Hutton & Pomeroy, Inc. and Lehman
Brothers and including many of the stockholders and
employees of the company, has formerly agreed to sub¬
mit a bid for the stock is an amount aggregating $3,034,800. Accordingly the auction will be opened by the
of said bid.

Probable bidders:

Allen

&

Co.; Smith, Barney & Co.; Merrill Lynch, Pierce, Fenner & Beane; A. G. Becker & Co- Inc.
California Oregon Power Co-

April 20 it
than

was

stated that company plans to raise more

$11,000,000 through the sale of $6,000,000

mortgage
about

bonds

250,000

and

shares of

new

common

first
stock

mid-1951.

Probable bidders for bonds: Halsey,
Smith, Barney & Co. and Carl M. Loeb,
Rhoades & Co. (jointly); Shields & Co.; Merrill Lynch,
Pierce, Fenner & Beane and Kidder, Peabody & Co.
(jointly); White, Weld & Co.; Blyth & Co., In'c-, The

Stuart & Co. Inc.;

First

Corp. and Salomon Bros.
& Hutzler
(jointly).
The previous stock offering was under¬
written by Blyth & Co., Inc. and The First Boston Corp.
bank

be

used

to

retire

$11,000,000 outstanding

loans.

Calvatt Consolidated Oil & Gas Co.,

Ltd.

April 3 it was stated registration is expected week of
May 28 of 1,000,000 shares of capital stock. Price—About
$5 per share. Underwriters—Hemphill, Noyes, Graham,
Parsons & Co., New York, and Gardiner, Watson & Co.,
Toronto, Canada.
Carolina Natural Gas Corp., Charlotte, N. C.
a fourth amended application was filed with the
SEC for authority to build a natural gas pipeline system
Feb. 20
to

serve

certain

areas

in June
•

Jan.

junior securities. Underwriters
Co., Charlotte, N. C.

may

include

R. S. Dickson &

Central Maine Power Co.
April 3 company estimated that outside cash require¬
ments for 1951 for construction and other purposes will
be about $10,000,000.
No definite plans for permanent
financing have yet been formulated, and in the interim
company plans to obtain necessary
term bank borrowings.

funds through short-

Central & South West- Corp.

April 10 it was announced company plans to issue and
sell approximately 400,000 shares of common stock (par

$5) late in 1951 or early in 1952.
Underwriters—May
by competitive bidding.
Probable bid¬
ders: Blyth .& Co., Inc.; Smith, Barney & Co. and
Harriman Ripley & Co., Inc. (jointly); Lehman Brothers
and Lazard Freres & Co. (jointly); Kuhn, Loeb, & Co.;
Carl M. Loeb, Rhoades & Co.; Ladenburg, Thalmann &
Co. and Wertheim & Co. (jointly).
Proceeds—To be
used to assist subsidiaries to finance a part of their
construction program.
Stockholders voted on May 15
to increase authorized common stock from 8,000,000 to
10,000,000 shares.

be determined




10

it

Edison

announced

was

$181,000,000
securities.

additional

July.

Kansas City, Mo.
May 15 company requested SEC authorization to issue
and sell $5,400,000 first mortgage bonds due 1971. Under¬
writers—

To

be

determined by competitive bidding.
Halsey, Stuart & Co. Inc.; Blyth &
Co., Inc., and Kidder1, Peabody & Co. (jointly); Lehman
Brothers; The First Boston Corp.; Merrill, Lynch, Pierce,
Fenner & Beane and White, Weld & Co. (jointly); Union
Securities Corp, and Harriman Ripley & Co., Inc. (joint¬
ly). Proceeds—Qar new construction. Offering—Expect¬
ed late in June or early in July.
Probable

bidders:

General Public Utilities Corp.

May 16 it was stated that corporation is considering an

equity operation which would give the common stock¬
holders the right to buy one new share for each 15 held,
involving a total of about 505,000 new shares.
Glass Fibres, Inc.
April 16 it was reported that company may do some
common stock financing later this year.
Traditional un¬
derwriter—McCormick & CoM Chicago, 111.

Distilleries Co.

Glenmore

the

has

bonds

debentures:

company

financing
nor

through

contemplates
the sale ol

the'time of the

new

determined. Probable bidders for
Halsey, Stuart & Co, Inc.; The
First Boston Corp.; plore, Forgan & Co.; Morgan Stanley
been

& Go»< Proceeds .areito be used for construction program.

Consolidated Edison Co. of

New York,

Inc. "

March 23 company applied to New York P. S. Commis¬
sion for authority to issue and sell $25,000,000 of first

(6/12)

April 23 it was announced company expects shortly to

registration statement covering 30,000 shares of
preferred stock (with warrants attached), and

a

par

&

withdraw; statement covering 159,142 shares of class
(par $1), Underwriter—Glore, Forgan
Co., New York. Proceeds—For working capital and
Green

purposes.

Mountain

Power Corp., Montpelier, Vt.
May 4 SEC announced approval of a plan for reorganiza¬

tion, which, among other things, provides for sale of
104,094 shares of new common stock (par $10) through,
underwriters, subject to the right of present preferred
stockholders to

subscribe for the

will be used to repay

Co.

Neither the nature

financing
or

or

Gas Service Co.,

general corporate

Commonwealth

tion.
•

new

/(

.

1

.

May 14, it was announced company is presently consid¬
ering the issuance of approximately $15,000,000 of addi¬
tional first mortgage bonds later in 1951, in addition to
registration of 35,000 shares of 4% preferred stock (pair

$100). Bonds will probably be placed privately-, and pro¬
ceeds Used for "additions and improvements to the corn-*

pany's properties.,
Illinois

,

Central

,

RR.

s

.

(5/17)

Bids

for the purchase from the company
ment trust certificates, series GG,

•

Cooper-Bessemer Corp., Mi. Vernon, Ohio
May 5, it was announced that arrangements for ade¬
quately financing the company's increased volume of
business have been approved by

Denver &

Rio Grande

RR.

12, Wilson McCarthy, President, stated that due
to prevailing rharket conditions, the company has post-1
poned to an undetermined date the taking of bids for
the purchase of $40,000,000 first mortgage bonds to be
dated May 1, 1951, and to mature on May 1, 1981. Un¬
derwriters—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Morgan
Stanley & Co.; Kuhn, Loeb & Co. and Bear, Stearns
& Co.
(jointly). Proceeds — Together with treasury
funds, to redeem on June 1, 1951, $35,062,200 oustanding
first mortgage 3%-4% bonds, series A, and $8,666,900 of
Denver & Salt Lake income mortgage 3%-4% bonds,
April

both due Jan. 1, 1993.

Detroit Edison Co.

Underwriters—To be determined by competi¬

bidding. Probable bidders: Halsey, Stuart & Co.
Inc.; Coffin & Burr, Inc., and Spencer Trask & Co.
(jointly); Morgan Stanley & Co.; The First Boston Corp.;
Dillon, Read & Co. Inc. Proceeds — For construction
tive

program.

Dow Chemical

Co.

plans to spend $65,000,000 on plant expansion in
the current fiscal year ending May 31, 1951, and expects
to spend somewhat more in the following fiscal year.
He added, however, that no decision has been reached
on any possible financing in this connection. Traditional
underwriter: Smith, Barney & Co., New York.
pany

Florida Power Corp.
March 29 the authorized common stock (par $7.50) was

1,600,000 shares to 2,500,000 shares
preferred stock (par $100) from 120,000 to 250,000 shares. Underwriters for preferred stock
to be determined by competitive bidding. Probable bid¬
ders may include Kidder, Peabody & Co. and Merrill
Lynch, Pierce, Fenner & Beane (jointly); Salomon Bros.
& Hutzler; Harriman Ripley & Co., Inc.; Equitable Secur¬
from

and the authorized

ities

Corp.;

Union Securities

received

up

to noon

(CDT) on May 17
of $3,900,000 equip¬
to be dated May

1, 1951 and to mature in 30 equal semi-annual install¬
Probable bidders: Halsey, Stuart" & Co. Inc;

Salomon Bros.

& Hutzler.

j-'

Iowa-Illinois Gas & Electric Co.

•

May 9, it

was

'
^

announced stockholders have approved an
preferred stock (par

authorized issue of 100,000 shares of

$100).

An offering of part of this issue may be made

later this year.
the

The proceeds are to be used to finance
company's construction program.
Iowa Public Service Co.

March 23 the

company's report revealed it is anticipated

it.

yqll, be .necessary to provide about $4,000,000 new
mojiey, to finance its 1951 construction program,
l-T-E Circuit Breaker Co.
was announced stockholders on May 5 will
increasing the authorized indebtedness of the
company to $3,500,000 from $1,500,000, and the author¬
ized but unissued preferred stock from 15,000 shares to

March 30 it
vote

on

30,000 shares, par $100.
Kansas City Power &

Light Co.
Munsell,, President, announced company
expects to raise $15,000,000 of new money through the
sale of new securities, including from $5,000,000 to $8,000,000 preferred stock, and the remainder common
Feb. 7, Harry B.

Probable bidders for preferred stock:

Glore, Forgan & Co. and W. C. Langley & Co. (jointly);
Smith, Barney & Co.; The First Boston Corp.; White,
Weld & Co., Shields & Co. and Central Republic Co.

(jointly); Harriman Ripley & Co., Inc.; Salomon Bros. &
and Merrill Lynch, Pierce, Fenner & Beane
(jointly); Union Securities Corp. and Stern Bros. & Co.
(jointly). Probable bidders for common stock: Lehman
Brothers; Glore, Forgan & Co.; Harriman Ripley & Co.,

Hutzler

Inc.

April 5, Leland I. Doan, President, stated that the com¬

increased

be

stock and bonds.

19 it was announced company plans to sell ap¬
proximately $35,000,000 of first mortgage bonds early

March

this Fall.

will

ments,

the directors.

Western

Proceeds

Idaho Power Co.

1981

refunding mortgage bonds, series H, due May 1,
(in addition to $40,000,000 series G bonds filed with
the SEC on March 30). Underwriters—To be determined
by competitive bidding. Probable bidders: Halsey, Stu¬
art & Co. Inc.; Morgan Stanley & Co.; The First Boston
Corp.; Merrill Lynch, Pierce, Fenner & Beane and White,
Weld &
Co. (jointly).
Proceeds — To redeem a like
amount of Westchester Lighting Co. 3Vz% general mort¬
gage bonds due 1967. Offering—Postponed.

shares.

bank loans and for new construc¬

and

in North and South Carolina/ Esti¬

mated cost of the proposed facilities is $3,595,295, to be
financed by the sale of first mortgage bonds and the
issuance of

to

B common stock

Columbia Gas

Boston

Proceeds will

was stated company expected to sell $8,000,$10,000,000 of new bonds this summer. Under¬
writers—To be determined by competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co, Inc.; Kidder, Peabody
& Co., and Merrill Lynch,
Pierce, Fenner & Beano
(jointly); Smith, Barney & Co.; The First Boston Corp.;
W. C. Langley & Co. and Glore, Forgan & Co. (jointly).
Proceeds—For expansion program.. Offering—Expected

000

to

System, Inc.
May 15, the company stated: "Since it now appears that
the System's construction program for
1951 will be
somewhat curtailed by material shprtages arising from
the National Defense program, it is presently expected
that no public financing will be required during 1951,'V

(6/6)

Bids will be received at the office of Alien Property, 120

announcement

Florida Power Corp.

neqessary

Will

& Co, and "

March 29 it

company may

'

Buffalo

"

$100
do some
funds for its
probably be placed

stock. Kidder, Peabody

common

41

Merrill Lynch, Pierce, Fenner & Beane.

•

Cleveland

April 4 it

•

J. V. Toner, President, announced that com
pany plans to issue $32,000,000 of securities to aid in
financing its construction program, which, it estimated,
cqmmon

April 7 it

&

privately.

Boston

cost

Cincinnati Gas

was

Jan. 30,

will

(jointly); Har¬
riman, Ripley & Co., Inc.; First Boston Corp.; Lehman
Brothers; Paine, Webber, Jackson & Curtis; Kidder,
Peabody &, Co.
•

writers for

file

reported that capital expenditures for
the coming 12 months have been tentatively budgeted
at $4,500,000 and that some financing may be necessary.
Frobable underwriter—Morgan Stanley & Co.
*

Chicago & Western Indiana NR.
April 16 reported company will probably issue in the
near
future some bonds to refund the $49,988,000 4%
non-callable consolidated first mortgage bonds due July
1, 1952. Refunding of the $14,662,000 first and refunding
mortgage 4y4% bonds, series D, due Sept. 1, 1962, is
also said to be a possibility. Probable bidders: Halsey,
Stuart & Co. Inc.; Morgan Stanley & Co.; Lee Higginson
Corp.; Harris, Hall & Co. (Inc.); Drexel & Co.; Kuhn,
Loeb & Co. and Salomon Bros. & Hutzler

(9/11)

Feb,

Alaska Telephone

(2081)

Corp.

Probable under¬

Kansas-Nebraska Natural Gas Co., Inc.
Feb. 15, it was announced

that company plans to raise

$4,200,000 through the sale of debentures or first mort¬
gage bonds in the spring of 1951 (this is in addition to
recent sale of 10,950 shares of $5 cumulative preferred
stock (no par) at $105 per share plus accrued dividends

stock (par $5) at $15 per
stockholders). The bond
financing early last year was placed privately /through
Central Republic Co. (Inc.), Chicago, 111. The proceeds
are to be used for the company's expansion program.
and 133,812 shares of common
share (the latter to common

Kansas Power & Light Co.

May 5 stockholders approved proposals to increase the
authorized preferred stock from 200,000 shares to 400,000 shares and the authorized amount of unsecured

Continued

on

page

42

42

The Commercial and Financial Chronicle

(2082)

\

.

,

'

Continued jrom page
indebtedness

from

' '

'

[

ket conditions warrant such

to $14,000,000.
Probable
Stuart & Co. Inc.; Blyth &

$9,000,000

Boston Corp.;
Corp.; Harri¬

Ripley & Co., Inc.

Pipe Line Co., Cleveland, Ohio
Feb. 15 FPC authorized this company to acquire, con¬
struct and operate pipeline facilities which will carry
natural gas into northeastern Ohio for the first time.
Financing plan includes the issuance and sale of

$1,075,000 in bonds to Stranahan, Harris & Co., Inc.,
Toledo, O., $225,000 in preferred stock and $150,000 In
•

stock.

Lees

(James)

& Sons Co.

May 16 it was announced stockholders will vote

June 10

approving a $10,000,000 increase in indebtedness.
Company expects to sell $6,000,000 of 20-year bonds,
carrying interest at less than 4%. Proceeds will be used
to pay off short-term bank loans.
Traditional under¬
writer: Morgan Stanley & Co., New York.
on

Michigan Consolidated Gas Co.
April 25 it was stated company may issue later

this year

mortgage bonds. Underwriters—
To be determined by competitive bidding. Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Smith, Barney & Co and
Blyth & Co. Inc. (jointly); White, Weld & Co. and
Lehman Brothers (jointly); Harriman Ripley & Co. Inc.
and Union Securities Corp. (jointly); Glore, Forgan &
Co. and W. C. Langley & Co. (jointly). Proceeds—For
about $15,000,000 first'

■

Light Co.

April 25 it was reported company may issue some ad¬
ditional bonds this year, if conditions so warrant. Under¬
writers—To be determined by competitive bidding. Prob¬

Pennsylvania Electric Co.
Feb. 16 it

was reported company plans to issue and sell
$3,000,000 of first mortgage bonds, $2,500,000 of preferred
stock and $2,500,000 of common stock (latter to General
Public Utilities Corp., parent). Underwriter—To be de¬
termined by competitive bidding. Probable bidders for
bonds: Halsey, Stuart & Co. Inc.; Kidder, Peabody & Co.;
Merrill Lynch, Pierce, Fenner & Beane; Union Securities
Corp. and White, Weld & Co. (jointly); Equitable Secur¬
ities Corp.; The First Boston Corp.; Kuhn, Loeb & Co.,
Lehman Brothers and Drexel & Co. (jointly); Harriman
Ripley & Co., Inc. Probable bidders for preferred stock:
W. C. Langley & Co. and Glore, Forgan & Co. (jointly);
Kuhn, Loeb & Co.; Smith, Barney & Co.; Kidder, Pea¬
body & Co.; Harriman, Ripley & Co., Inc. Proceeds—
For 1951 construction program. Expected late Summer
or early Fall.
• -

Proceeds—For construction.

(7/17)

fund

a

•

tration—Scheduled for June 15.
of

Michigan, Coldwater,

sought FPC authority to construct
pipeline, at an estimated cost of $1,500,000, to be financed by issuance and sale of first mortgage bonds.
f. /
;
company

about 76.7 miles of

New England Power Co.
I:
was estimated that $32,000,000 of new financing
will be required prior to Dec. 31,1952. Between 70,000 to

Jan. 24 it

may

be initially offered.

Probable bidders: Harriman Ripley & Co. Inc.; Lehman

Brothers; Kidder, Peabody & Co.; First Boston Corp.;
Merrill Lynch, Pierce, Fenner & Beane; W. C. Langley
& Co. Proceeds to be used to repay bank loans and for
construction programi
o

New England Telephone & Telegraph Co.

May 15 directors authorized issuance of 777,850 addi¬
tional shares of capital stock to stockholders at rate, of
one share for each two shares held.
Price—At par: ($(00
per

share).

Underwriter —None.

Proceeds

outstanding temporary borrowings.
ment—Expected to be filed soon.

was announced company has arranged to
to $10,000,000 from 17 banks and expects to
fund these loans through sale of permanent securities;

To reduce

v

fall

early in 1952.
Probable bidders: Halsey,
Inc.; Lehman Brothers, Stone & Webster
Securities Corp. and Union Securities Corp. (jointly);

was

Proceeds

—

For 1951

construction program.

Expected late Summer and early Fall.
•

Corp.
May 4, Joseph M. Bell, Jr., President, announced that the
company's $66,500,000 construction program for the three
years through 1953 involves new financing of $41,500,000
in addition to the $10,500,000 provided thus far this
year
through the sale of 2.80% first mortgage bonds, in ac¬
cordance with contracts entered last
August. Traditional
•

was stated that this
company, a
American Gas & Electric
Co., will need

subsidiary of
$36,000,000, per¬

haps more, which it expects to raise some months hence
through the sale of new securities. Probable bidders for

Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.;
Forgan & Co., White,
and Union Securities
Corp. (jointly). Pro¬

S1*
First Boston Corp.; Glore,
Weld & Co.

ceeds will be used for construction
program.

Oklahoma Gas & Electric Co.

Kennedy, President, said company is considering refunding outstanding $6,500,000 5*4% cumu¬
lative preferred stock (par
$100) with an equal amount
of preferred stock with a lower
dividend rate and
may

common




stock (par $10) provided mar¬

the SEC

in

about

a

•
Staley (A. E.) Manufacturing Co.
May 8 stockholders voted to cancel the pre-emptive or
preferential right of common stockholders to purchase
or subscribe for the company's unissued securities.
Ac-T
cording to A. E. Staley, Jf., President and Chairman,
cancellation ©f this right enables the company tq meet;

security market situations better in
unissued

stock.

common

May 23 will receive
This

follows

a

100% stock dividend

increase

an

future sales of

any

*

Common stockholders of record

in

from 1,000,000 to 2,500,000 shares (par

June 6./

on

stock

common

authorized

,

$10).

Sutherland

Paper Co., Kalamazoo, Mich.
announced stockholders will vote in"'
near
future on authorizing the issuance and sale of.'
new convertible preferred stock to common stockhold¬
ers through rights.
The company is currently negotiate
ing with Lehman Brothers and Harris, Hall & Co. (Inc.)
for the sale of the preferred stock and long-term in-;
May

4

company

debtedness sufficient to raise a total of approximately
$5,500,000. The proceeds are to be uesd to retire the,
present outstanding 41A% cumulative convertible pre¬
ferred stock and for additional working capital.

ders for a reported issue of $15,000,000 new bonds are:
Halsey, Stuart & Co. Inc.; Blyth & Co.* Inc. and Smith,
Barney & Co. (jointly); The First Boston Corp.; Lehman
Brothers; Kidder, Peabody & Co.; Harris, Hall & Co.
(Inc.); Glore, Forgan & Co. and W. C. Langley & Co.,
(jointly).

Rochester Gas &

Textron, Incorporated
was announced stockholders on June 8 will
vote on authorizing the creation of a new issue of 250,000
shares of 4% preferred stock (par $100).
On May 23,
they will vote on increasing authorized common stockfrom 2,000,000 to 3,000,000 shares.
Traditional under¬
writer:
are

effected.

shares

as

soon

Underwriter—Paul

H.

as

registration

Davis

&

can

be

Chicago,

Co.,

Illinois.

;

'

the company to $30,000,000 from $15,000,000 and to in¬
crease authorized capital stock to 2,500,000 from 1,000,000
shares.

At present, the company has 925,863 shares out¬

standing.

The Company's expansion plan, recently an¬
nounced, will sharply increase ingot capacity, pig iron
and coke output and finishing facilities.
The additions
and improvements are to be completed over the next"
five years.

29. it

stated

Department of Justice, 120 Broadway, New York 5, N. Y.,
or before 11 a.m. (ED,T) on
May 17 for the purchase
of 6,445 shares of capital stock (being 100% of the out¬
standing stock). The sale does not represent new finane-,
ing. Business—Imports and sells furs, mainly Persian]

Lamb, in the United States.

r

"

„

United Gas Corp.

May 9 it

was reported company will be in the market
$50,000,000 to $60,000,000 of long-term bonds, plus
a large equity issue, within a few weeks, and later inthe year plans additional debt financing. >
On Feb.*

for

was announced company plans to issue $145,000,000 debt securities and will loan the proceeds together,

with

other

funds,

to

its subsidiary, United

Gas

Pipe:

Line Co. to be used for the letter's construction program.Probable bidders for bonds: Halsey, Stuart &. Co. Inc.;,

Dillon,

Read & Co. Inc.; Equitable Securities

Corp.;*

Harriman Ripley & Co., Inc. and Goldman, Sachs & Co..

(jointly); The First Boston Corp. Corporation is also'
said to be planning sale of about 1,000,000 additional com¬

shares to its common stockholders on
1-for-lft or 1-for-12.
*
mon

a

basis of

.

,

Shreveport, La.

Feb. 27 FPC authorized company to carry out an expan¬

sion program, which

will include construction of approx-!
Imately 1,000 miles of pipeline, at a total estimated cost!
of $111,861,749.
Company will finance construction by!
borrowing $150,000,000 from its parent, United Gas Corp.!
(which see above).
,

United Stores Corp.non-cumulative

preferred

031,856 shares and the

Stock

common

1,640,000 shares. Company has
financing.

to 1,200,000 from 1,-"
stock to 1,808,144 from

no

immediate plans for

any

United Utilities, Inc.
April 11 it was said company plans issuance and sale of
between $2,000,000 and $3,000,000 additional debentures
or bonds this year.
Kidder, Peabody & Co. handled pri¬
vate placement of an issue of $2,500,000 debentures in"

March. 1950.

*

:

•

Valley Gas Pipe Line Co., Inc., Houston, Tex.
May 9 FPC dismissed application of company proposing
the construction of a $144,500,000 pipeline project to
carry natural gas from Texas and Louisiana to markets'
in Indiana,
Ohio and Michigan.
The company had:
planned to build 1,500 miles of line.
*
Victor Chemical Works

March 30 it

may issue $1,800,000
(par $10) to finance its new
continuous buttweld mill expansion.

Slick

-

.

i

Sharon Tube Co.
March

Proceeds

'

April 24 stockholders voted to increase authorized $4,20

construction.

Sangamo Electric Co.
May 3, Donald S Funk, President, announced company
plans a public offering of approximately 111,000 addi¬
common

expansion program.

United Gas Pipe Line Co.,

York P. S. Com¬
of first mortgage
bonds and 150,000 additional shares of common stock
(the latter for subscription by common stockholders on a
basis of one new share for each seven shares held). Bonds«
may be placed privately, with the common stock issue
underwritten by The First Boston Corp. Proceeds—For

tional

Blair, Rollins & Co. Inc., New York.

to be used for

on

Electric Co.

March 21 company applied to the New
mission for authority to issue $5,000,000

new

•

May 10, it

27 it

Public Service Co. of Colorado
Nov. 1, J. E. Loiseau, President, announced that "it will
be necessary to raise additional funds for construction

was

capital

company

stock

Airways, Inc.

May 3 it was reported company plans registration of
200,000 shares of common stock. Underwriter—F. S.
Moseley & Co-, New .York. Proceeds—For expansion
program.

*

Co.

petitive bidding. Probable bidders: Halsey, Stuart &
Co. Inc.; Lehman Brothers; Blyth & Co., Inc. Proceeds—
To refund the presently outstanding $4,000,000 of 4%%
first mortgage bonds and .repay ..outstanding short-term
bank notes which are due before the end of the year.

April 4, the company indicated that it would soon be In
the market with $18,000,000 of senior securities. Prob¬
able bidders: Halsey,' Stuart & Co. Inc.; Blyth & Co.,
Inc.; White, Weld & Co.; Lehman Brothers; Merrill
Lynch, Pierce, Fenner & Beane and Harris, Hall & Co.
(Lie.) (jointly).
.
"
*
.

t

was

announced company

plans to issue and

sell 100,000 shares of new convertible second preferred
stock (par $50). Underwriter-+F. Eberstadt & Co., Inc.,
New York.

Proceeds—Together with funds from private
sale of $4,000,000 of !20-year sinking fund notes, to be
used toward expansion program.

Virginia Electric & Power Co.

May 1 the company announced that it is contemplated
that there will be additional financing to an amount ap¬
proximating

Earl Smith, President, announced company
plans a bond issue of more than $8,000,000 by fall of
this year. Underwriters—May be determined by com¬
24

Southern California Gas Co.

Dec. 20 D. S.

issqe additional

Corp.; Kidder, Peabody & Co., Merrill.
Lynch, Pierce, Fenner & Beane, White, Weld & Co. and
Salomon Bros. & Hutzler (jointly); Kuhn, Loeb & Co.
and Blyth & Co., Inc. (jointly); Dillon, Read & Co. Inc.;
Harriman Ripley & Co., Inc.

April

May 15 it

filed with

be

Corp. and Harriman Ripley & Co., Inc.

Boston

South Jersey Gas

Corp., New York.

Ohio Power Co.

bonds:

Co.

additional

New York State Electric & Gas

underwriter: The First Boston

or

&

March 27 stockholders voted to increase the debt limit of

reported that company tentatively plans
to issue and sell $2,500,000 of preferred stock to public
and $1,500,000 of common stock to General Public Util¬
ities Corp., parent. Underwriters—For preferred to be
determined by competitive bidding.
Probable bidde/s:
Drexel & Co., Kuhn, Loeb & Co., and Lehman Brothers
(jointly); W. C. Langley & Co.; Smith, Barney & Co.
and Union Securities Corp. (jointly); Kidder, Peabody
& Co. and White, Weld & Co. (jointly); Salomon Bros.
& Hutzler.

up

Sharon Steel Corp.

New Jersey Power & Light Co.

Feb. 19 it

-r-

Registration State¬

will

Thorer & Hollender, Inc., New York City (5/17) ;
Bids will be received at the Office of Alien Property,.

purposes in the second quarter of 1951.
The amount
needed is estimated at about $7,000,000." Probable bid¬

.

Michigan

80,000 shares of preferred stock

plans to sell addi-r

it

10

borrow

First

Glore, Forgan & Co. and Sterne, Agee & Leach (jointly);

announced company

Potomac Electric Power Co.

this

Blyth & Co., Inc.; The First Boston Corp.; Kidder, Peabody & Co. and White, Weld & Co. (jointly); Lehman
Brothers; Union Securities Corp. and Equitable Securi¬
ties Corp. (jointly); Merrill Lynch, Pierce, Fenner &
Beane.
Proceeds—For construction program.
Bids—
Tentatively expected to be received on July 17. Regis¬

was

money."

(par $100). Underwriters—To be determined by competi¬
Probable bidders: W. C. Langley & Co.,

6

Probable bid¬

Pitney-Bowes, Inc.
March 29 it

Stuart

March

like amount of 3% bonds due 1956.

tional convertible preferred stock from time to time for

Feb. 6, it was reported that this company contemplates
the issuance and sale of $4,000,000 of preferred stock
tive bidding.

statement

week and that the stock will be offered for sale publicly'
on or before June 15.
Underwriters — Union Securities

,

Peoples Gas Light & Coke Co.
April 6 it was reported that company may sell $20,000,000
of new bonds this Spring to provide funds for expansion
program. If market conditions are favorable, it is also
planned to sell an additional $15,000,000 of bonds to re¬

May

Co.

provide funds for its expan¬
Traditional underwriter: Kidder, Pea¬

body & Co.

Smith, Barney & Co. and Blyth & Co. Inc. (jointly);
Kidder, Peabody & Co.; Harriman, Ripley & Co. Inc.

Utilities

reported that the company may issue and

program.

"new

Stuart & Co. Inc.; Glore, Forgan &
Co. and Lehman Brothers (jointly); Kuhn, Loeb & Co.,

National

was

sell additional securities to

able bidders: Halsey,

Mississippi Power Co.

Thursday, May 17, 1951

.

•
Squibb (E. R.) & Sons (6/15)
May 10 directors voted to sell 300,000 additional shares
of common stock (par $1). It is expected that a registra¬

tion

Panhandle Eastern Pipe Line Co.

April 4 it

ders: Halsey, Stuart & Co. Inc.; Glore, Forgan & Co. and
White, Weld & Co. (jointly); The First Boston Corp.

construction.
Milwaukee Gas

Smith, Barney & Co.; Harriman Ripley & Co. Inc.

sion

Lake Shore

common

action, to finance construc¬
Probable underwriters: Lehman Brothers;

tion program.

Co., Inc.; White, Weld & Co.; The First
Glore, Forgan & Co.; Equitable Securities
man

..

''

'

41

for bonds: Halsey,

bidders

'

$20,000,000, after sale
registered with SEC

the additional
(see above), inci¬
dent to the 1951 construction program, and that further
financing will be required in 1952. Probable bidders"
for bonds: Halsey, Stuart & Co. Inc.; Salomon Bros. &'
Hutzler; Stone & Webster Securities Corp.; Union Secu-'
rities Corp.; White, Weld & Co.
common

of

stock

Washington Gas Light Co.
March 8 it was announced that company may issue ap¬
proximately $9,000,000 of bonds of obtain bank loans (or
Some combination thereof) during 1951 and apply the
proceeds toward its construction program. Probable bid-!
ders for bonds: Halsey, Stuart & Co. Inc.; Blyth & Co.*
Inc.: Smith, Barney & Co. and White, Weld & Co. (joint¬
ly); W. C. Langley & Co. and The First Boston Coro.

(jontly); Equitable Securities Corp.; Alex. Brown & Sons.

Volume 173

Number 5012

.

«

.

The Commercial and Financial Chronicle

(2083)
panies are going ahead with plans
for raising funds to finance ex¬
pansion necessary to meet the
increased

With

DuQUOIN,

load.

Pierce

American, Gas & Electric Co's.
Ohio

Co.

Power

need $36,-

will

Coke

of

Underwriters, or at least some
of their nurnber, are not" partic¬
ularly keen about the "role that
has been set up for them in fore¬

stalling

financing that is
inflationary in char¬

new

viewed

as

acter.

They do not seek to dodge a
responsibility, but rather fear that
the
public may be inclined to
misinterpret the intent of the

before

they

General

approve

total

a

505,000

perhaps

is

holders

recurrence

a

record at

75^

ROGER

Company

25 BROAD
The

Wade Glutton Joins

May

the close of
B.

REEVES

Board

10,

of

1951,

Directors

declared

of

the

NATIONAL SHIRT SHOPS
OF

this

quarterly

dividend

the

on

the

of

- Mobilization
chief,
thatJt be deferred.

of

Governor

The

had
State

the

points out the issue was voted by
the people and he intends to go
through with it if he can get a
bid. But from present indications,

record at
the
close of
business on June
15, 1951.
The Board of Directors of this company on
May 10, 1951, declared a dividend of 20 cents
per share on
the outstanding Common Stock
of
the
company
payable
.Tun*
15,
1951
to
stockholders of record at the close of business
on May 28,
1951,

FRAHER,

Secretary.

Corporation

One. investment

(Briggs&StrattonJ

Dividend No. 91

May 15, 1951, a dividend of One Dollar
1.00) per share was declared on the Capital
took of Newmont Mining Corporation, pay¬
able June 14, 1951 to stockholders of record
at the close of business May 28, 1951.

&

LOEW'S INCORPORATED
THEATRES

<

•

CORPORATION
Wade
'

W.

Glutton

quarterly dividend of 37He per
share on the outstanding Common
Stock of the Company, payable on
June 30, 1951, to stockholders of record at the
close of business on June 12, 1951, Checks will
a

be mailed.

DIVIDEND
The

CHICAGO, III.—Wade W. Cluthas

ton

associated

become

Francoeur

&

with

Company, 39 South

La Salle Street.

Mr. Clutton

was

formerly manager of the trading
department for John A. Dawson
with

Co.

&

which

he

had

Board

Directors

of

has

declared

war

holders

of

record

May

L. G.

15,

May

been

undertake

bonus

Government

payment

and

variation of the idea.

a

World War I vets had the option

Directors

of
a

dividend

10 cents per

of

semi-annual

CHARLES C. M0SK0WITZ

share

Vice Pres. 6* Treasurer

STOCK,, payable June 30,

ness

The Singer

the

on

COMMQN

stockholders

to

,

the close

at

Manufacturing

of Directors has

Board

,

of

of busi¬

June 1, 1951.
WM. M.

Hickey,

Company

President
declared

a

quar¬

May 10, 1951

dividend of sixty cents per share payable
on Juno 14, 1951 to stockholders cf record at the
close of business on May 25, 1951.

1951.

Board

record

EEGNER, Secretary.
terly

associated for many years.

•

■

May

The
B.

taking

cash

of

r

government

ALEXANDER, Secretary.

D. H.

l(v«d95L

is

but

viceman

West
Veteran

proposed that

distribute
direct
make

its
to

the

re¬

demption date four or five years

hence, thus getting away from the
likelihood of having immediate
cashing of the issue swell the cur¬
rent money supply.
Con.

Natural

Gas

Market

Booklet

Gas

Natural

runner-up

from

a

winning

hot

"dead-heat".
group

100.8719

company

proving
paid

for

ent

—

payable

actual

and

an

trend

discussing

445

Dept.

bid

rate.

was

100.369991

of

the

July

1,
of

to

1951
record

at

COMPANY, NEW YORK, N. Y.
dividend

Cumu¬

Preferred

business

June

15,

PAUL

Stock

of California

Preferred
the

May 7,

market,

DIVIDEND NOTICE

notice

On May 2,1951, the Board
a regular
quarterly dividend of 40 cents
per share on the Common Stock
($10 par value) of this Corpora¬
tion, payable June 1, 1951 to
stockholders of record May 15,
of Directors declared

The Board of Directors has this

day declared

dividend of 30

a

close

19*51.

($.30)

share

per

on

the

stock, payable June 1,

1951.

1951 to stockholders of record

RAIBOURN,
Treasurer

May

15,

1951.

B. C. REYNOLDS

The transfer

Secretary

<

books will not close.

1951

h'l

W. W.

up-to-the minute analysis
stocks and 43 groups)—
C-62,
Investors
Research

HARTS, JR.
'

May 3,1951'

\]

in all

'

Treasurer

n*£

,

phases of television

Puerto Rico and the Dominican

Republic—Booklet describing

11-

day cruise—Dept. CF, Bull Lines,
Broad

115

Street,

New

York

4,

n. Y.

TWENTIETH CENTURY-

AMERICAN

What Happens During Business

Cycles—Wesley C. Mitchell—Na¬
Bureau

of

Economic

FOX FILM CORPORATION

Re¬

Your Family

—

Kathleen Doyle

May 15,

preferred

good order once
a trust company, acting for several
pension funds, took down a goodsized portion of the debentures.
Utilities Look Ahead

Facing steadily rising demands

service;, electric utility, com¬

dividend

A.

The Board of Directors of Ameri¬
can

Cyanamid

Company

cents (B1V20 Per share

MEETING NOTICE

on

3 ¥2%

dividends

2i

1951.

for the election of Directors and of
three Inspectors .of Election and the trans¬
action of such other business as may be

brought

before

the

meeting,

will

be held in the Ball Room of the Hotel Ten

Eyck, 87 State Street, in the City of Al¬
bany, N. Y
on Wednesday, May 23, 1951,
at 12 o'clock Noon, Eastern Daylight Saving
Time.

Stockholders of record at 3 o'clock P. M.,
April 2C. 1951, will be entitled to vote

on

at

the

meeting.

JOSEPH M.

Cumulative Preferred Stock,

1951,

to

the

holders

of

such

June 1, 1951.

COMMON DIVIDEND

:

The Board of Directors of Ameri-

Cyanamid Company on May
15, 1951, declared a quarterly divi¬
dend
of one dollar
($1.00) per
share on the outstanding shares
of the Common Stock of the Com¬
can

pany,

payable June 28,1951, to the

this

Prior

Corporation has

clared payable June 15, 1951 to

Preferred

been de¬
the stock¬

holders of record at the close of business

June 4,

on

*

1951.

A

quarterly cash dividend of

share on the outstanding

$.37(i

per

Convertible Pre¬

ferred Stock of this Corporation has been
declared

payable

stockholders

of

Jiine
record

29,
at

1951
the

to the
of

close

business on June 4, 1951.

A-dividend of $1.00 per share on

the Common

Stock, payable June 15,

1951 to stockholders of record

June

1, 1951.
Transfer hooks will not be closed.
Dividend checks will be mailed by
the

the close of business June 1, 1951.

New York

Guaranty'Trust

Secretary

„

of

Company

F. S. CONNETT,
Treasurer,

O'MAHONEY, Secretary.

the outstanding

July 2, 1951.
-

holders of such stock of record at

R. S. KYLE,

declared:

were

regular quarterly dividend of
per share on the $4 Cumula¬
tive Convertible Prior Preference
Stock payable June 15,1951 to stock¬
holders of record June 1, 1951.
A regular quarterly dividend of
$1.75 per share on the 7% Cumula¬
tive Preferred Stock payable July
16, 1951 to stockholders of record

of

$1.00

stock of record at the close of busi¬
ness

pany,

lawfully

quarterly cash dividend of $1.12^ per

Stock

A

on'the out¬

Series A and Series B, payable July

The Annual Meeting of the Stockholders
The New York Central Railroad Com¬

the meeting of the Board of
Directors of American Woolen

T

Company, held today, the following

May

standing shares of the Company's

Company

Albany, N. Y., April 13,
of

A

share on

Pamphlets, 22 East
Street, New York 16, N. Y.

15, 1951, declared a quarterly divi¬
dend of eighty-seven and one-half

for the

but moved out in

IN WOOLENS"

—

Public Affairs

The New York Central Railroad

1951

'THE GREATEST NAME

COMPANY

the —paper—20^.

Reoffered yesterday at 101V2 to
yield about 3.16% to the investor,
the issue was a bit slow to start,




quar¬

Barbara, Calif.

38th

while the second group
offered to pay 100.81999 for the
same interest rate, a difference of
just over 51 cents per $1000. The
third

Inc. this

regular

common

coupon,

same

FINANCE CORPORATION.

cents

of

314%

a

Allen

Co.

tures with the bids of the winner
the

a

Convertible

search, 1819 Broadway, New York
drew bids from three groups for 23, N. Y.—cloth—$5.00.
its $50,000,000 of 25-year deben¬
When
Mental
Illness
Strikes
Consolidated

Laboratories,

declared

Stockholders

the
three basic principles of correct
investment procedure—$1.00 (in¬
cluded with each copy is a current
primary trend graph showing pres¬

tional

Issue

has

lative

ser¬

first

the

of

its outstanding shares of 5%

Company, Mihran Building, Santa

it

Mont

Directors

„

pensation.

bonds

Laboratories, Inc.

terly dividend of $.25 per share on

of

Virginia

of

Board

Du

day

bonds due in 20 years in payment
of
their adjusted service com¬

for

The

has declared

.

1951.

31,

The UNITED Corporation

1951

The

Planning for Profits in the Stock

by

that West Virginia might

The

Treasurer.

PACIFIC

method

the

to

Federal

the

far

J. B. McGE#

New York 6, N. Y.

a

quarterly dividend of twenty-five cents-(25c)
per share and an extra dividend of fifteen
cents
(15c) per share," less 2.89 per cut
Wisconsin
privilege dividend tax, oh the
capital stock (without par value) of the
Corporation, payable June 15, 1951, to stock¬

banker, a com¬

proposes

too

*;

Broadway

.

(Special to The Financial Chronicle)

Allen B. Oil Mont

its

and

stockholders of

to

the close of business June

at

Out

handled

Now

June 28, 1951,

May 16,1951

War I, na¬
that servicemen of
should get what is

feels

gestion.
He points

Bonus

fifty (5Q0 cents
per share has been declared, payable

MGM RECORDS

The Board of Directors has declared

BRIGGS & STRATTON

coming to them too, and he offers
what might be a workable sug¬

of

May 8,1951,
A dividend of

record

N. Y., May 15, 1951.

MGM PICTURES

veteran of World

which

Tennessee
Corporation

cobpoimrionf

On

61

V
Possible

A

last

tkmncsscc

at banks, at/
duration
of
the

the

for

emergency.

the

J. E. REEVES, Treasurer

for loans

collateral

bat

Company will not be closed.

Newmont Mining

,

turally

business

13,1951.

would be a bid by
a
"rump" group, and then the
bonds would not be acceptable

,

of

May 14, 1951,

GUS MRKVICKA, Treasurer

his only hope

least

close

on

for $67,500,000.

Defense

the

quarterly

New York,

not until after Charles E. Wilson,

asked

of the

N. Y.

company

1951, to stockholders of

at

June 1, 1951. The transfer books

SYLVAN COLE,
Chairman of the Board.

of

mind,
of oc¬

control committee
this one down but

record

of

stock

common

per

payable

share on the outstanding

EDWARD

majie
the years by other states. *
/ Accordingly,
servicemen might
regard turning down of this issue
as
discriminatory.
Investment
banker and commercial banker
turned

June 25,

20 cents
payable
May 31st, 1951, to stockholders of record
May 22nd, 1951.
Transfer books will
not be closed.
share

IP/2% Series Cumulative Preferred Stock of the
company, payable July 1, 1951, to stockholders

Francoeur & Go.

share has been declared,

The Board of Directors has declared a

regular

a

IMC

NOTICE

A quarterly dividend of 30c

DELAWARE, INC.

DIVIDEND NO. 39

business June

regular

BROTHERS,

DIVIDEND

PETERS, Secretary.

STREET, NEW YORK 4,

dividend of $1,375 per

oyer

panels

dividend

HACKNEY, Treasurer

Similar flotations have been

have

a

per aha re on the Common Stock pay¬

CITY INVESTING COMPANY

casions like West Virginia's vet¬
erans' bonus issue,

DIVIDEND

11, 1951, to holders of record
May 28, 1951.

new

they, said, if state and municipal
financing
officers
would
do [ a
little "feeling out" of the com¬
mittee before putting .torni ptmis
for a project.
is

of

WM,

issue. A

What the bankers have in

Corporation

able June

12, 1951.

possible solution might be found,

of course,

Johns-Manville

nooucn

Racine, Wis., May 14, 1951
of $1.75 per share upon the out¬
standing Preferred Stock of this Company has
been declared payable July 1, 1951, and a divi¬
dend of 75c
per
share upon the outstanding
$25 par value Common Stock of this Company
has been declared payable July
1,
1951,
to

they

if

!i31

.

an

of

&

A dividend

mortgage
is out, and

Utilities Corp.

Public

DIVIDEND NOTICES

(Incorporated)

shares.

a

given

a

J. I. Case

new

summer

H.

Slayton

DIVIDEND NOTICES

equity operation
which would give common stock¬
holders the right to buy one new
share for each 15 held, involving

"spot"
be "damned ,if
on

are

"damned

and

do"

don't"

the

considering

movement.

They feel they
where they will

may

with

The Board of Directors declared

People's Gas Light
undertake flotation

$20,000,000

a

111. —Luther

now

of

securities.
Meanwhile

is

DIVIDEND NOTICES
JOHNS-MANVIUI

Company, Inc. of St. Louis.

000,000, perhaps more, which , it
expects to
raise some months
hence through the sale of hew

&

Slay ton & Co., Inc.

(Special to The Financial Chronicle)

43

May 16, 1951.

,

A

quarterly cash dividend

share cn
of

this

payable June 29,
record

4,

at

of $.50 pet

the; outstanding Common Stock
has been declared

Corporation

1951 to stockholders of
business on June

the close of

1951.
DONALD A. HENDERSON,
Treasurer.

44

The Commercial and Financial Chronicle

(2084)

...

Thursday, May 17, 1951

fense Mobilizer

BUSINESS BUZZ

Wilson, the Chair £

of the Federal Reserve

man

Board,

the Secretary of the Treasury, the

Chairman

Washington....
A

BeVind-the-Scene Interpretations

g~M

y*

the

of the

SEC,

and

Council

of

the
Ecoi

nomic Advisers.

Because of Treasury Secretary
Snyder's former illness, Mr. Wil¬

V/-| jf

jTjL Iw\A/

from the Nation'* Capital

Chairman

of

JL Cr U/

son was

made Chairman. The

mittee

was

directed

to

com¬

devise

of providing and safeguard¬
ing a stable bond market whilst
preventing the growth of bank
ways

WASHINGTON,

D.

C.~In

the bill

go¬

Committee

Means

taking

said

is

hands

of

Administration

the

be written,

Director

make

to

more

such

In

a

case,

majority of

a

the House in actual control would

be confronted
for

the

with

Canadian

of

scheduled

are

These

would write its
Unlike

the

own

tax bill.

the

'

or

House

can

within limits be controlled, if

the

Rules

It

is

Committee

customary

in

goes

House

along.
proce¬

to

will

tified

rity

the

hit

Martin

dure to bring in a rule forbidding

the

amendments to
floor

adopted

as

the

such

except

its

own

bill from the
as

might

be

ply

mortgage

sale

of

loans for
houses,

final reporting out of the tax

bill

of
,

new

the

with

instructions

as

to

it

of

but

nobody

told

ever

me

be¬

higher interest rates, is
for the time being.
Its

members

for

are

the

most

part

members of the two

heard about the bulls and the bears

"I

to "work over"

up

Reserve 'System

in this

Banking com¬
mittees, which simultaneously are
holding
extensive
hearings
on

business,

about the wolves!"

DPA.
It is suggested that when a bor¬

It may be two or three
weeks before Patman can plan to

hard-boiled
under

no

orders

on

committee

which

compulsion

to

is

take

get going with his
a

own

of monetary

course

version of

hearings.

political project of
The
question of how reserve
a regional VCR this character, even if such orders
requirements might be raised will
that the prospective or suggestions were issued.
be
settled
after the Wilson com¬
borrower get in touch with the
This little problem just might mittee report has been
digested.
regional committee in which he is
a

requested committee,

probable
that
eventually
what kind of a tax bill shall be
Congress will approve this, when,
brought back.
as, and if it gets around to amend¬
It is believed tentatively that, ing DPA. However, Congress may
without assurances from the Sen¬ be two or three months working
ate that it will pare down dras¬ out changes in DPA.
Meanwhile
tically the House bill,
a
seri¬ VCR will achieve substantially
ous drive
will be made to write the same result, it is anticipated.

arise,

soon,

however, because the

tacts

non-local

a

neck

What officials

the

case

of

are

in

say,

both

in

tion

of

sired

a

municipal

Chicago,

who

and

loan

New
flota¬

or

security issue.
avoid

to

or

Chicago
a

It is de¬

having

both

Chicago and the New York

the

com¬

mittees trying to rule with respect
the
same
case,
whether
the

to

accommodation

credit

falls

permitted

out.

way

shooting at is

business

a

borrower,
shops

within

under

the

the
VCR

Interior
are

It

be

may

the

of

will

some

cutest

confront

time

little

the

off,

but

situations

VCR

if

the

Canadian Government carries out
its

threat

of

going ahead and
building the St. Lawrence seaway
"on

its

own"

provided

Congress

doesn't approve the seaway. It is
doubted that Congress will ap¬

the seaway, so the Domin¬
ion Government must decide soon

prove

whether

build the

SELLING

Of

UNDER

to

go

same

lion

and

try to

The

operated

agreement
under the

in

its

some

tional

oil

Defense

Truman

viewpoint,

committee

is

a

the

staff

of

$700 mil¬
market.

Adminis¬

BUT,

the

voluntary,

order

definite monetization
then

and

threaten

only

if

deficit

been

not

there

is

of the debt,

it

will

financing

not

seri¬

ously.

(This column is intended to

re¬

flect the "behind the scene" inter¬
pretation from the nation's Capital
and may or may not coincide with
the "Chronicle's"

for

conferring

an

will

until

own

views.)

the

Administration

agreement

For

Large Appreciation Potential
WE SUGGEST

whipped in shape the proposed
voluntary agreement for submis¬

RIVERSIDE CEMENT CO.

sion in the

future to

large
meeting of all these producers.
near

a

CLASS B
A

leading

(common) STOCK
producer

of

cement

Terms of the prospective agree¬
ment were not divulged at this

In

stage

Analysis of this Company and

by officials.
*

own

in

with the U. S. producers of foreign
oil.
They are expected to have

*

%

fast-growing Southern

California.

review of the

try

One of the

best-kept secrets of

available

Cement

on

mittee report." This is the report
in

response
memo

committee

of

to

President

Feb.

representative

26, by
of

a

De¬

Indus¬

request.

Selling about

this capital was the "Wilson Com¬

Truman's

VCR

was

interna¬

the

quietly about such

the

Ottawa

of

.have

mm

cu

be

Pro¬

be

supply situation.

Petroleum

drafted

PER SHARE

in

emergency

tration would feel sympathetic to

the

would

Defense

duction Act, but would not be ef¬

100

Naturally

along

fective until and unless there

itself.

the $600 to

involved

well

be

prospective vol¬

agreement
to
operate
U. S. producers of foreign

among

oil.

officials

a

the Dominion could

course,

not finance

ahead

to

with plans for a

untary

likely

*

Department

Members
one

*

reported

requirements

reserve

*

program.

STOCKS

Whatever

higher reserve require¬
Or, if the borrower con¬
Dominion would
be
advised to ments are proposed to
Congress,
regional commit¬
find
out
what
the
VCR
will definitely be of a standby
boys
tee, then the committee contacted
should get in touch with the com¬ thought about a huge loan of this character, and will not, it is be¬
mittee presiding over the region character, even spread out over lieved, he invoked with passage of
in which the borrower is located. several years, before sticking its the law empowering this. Higher
located.

York either about

nco

subcommittee

gets in touch with

Truman

is

%

of

stymied

financing
bringing

challenge to the House to take all the amendment of the Defense
or upset the whole applecart. This
Production Act to restrict mort¬
can be done by a motion to re¬
gage credit on used houses, and
commit

Federal

cause

secu¬

houses.

President

his

which

understandably.

Patman

Committee, set

war

Hence, the action of the Com¬ them into line with the terms of rowing business or city or indus¬
mittee, if it is not changed before Regulation X for the financing try seeking new equity capital
about the first week in June, is a

in

the Congressional Joint Economic

committee

used

and

The

asked not to

VCR

appearances

predecessors, and has a way
of stating his subject matter sim¬

issue.

national

directness

a

his

same

a

has

He also avoids the longwinded, theoretical discussions of

also be expected to move in
to clamp down on the terms

may
soon

by the Ways- of

and Means Committee.

erect

area,

dealers will be

The

con¬

pleases.

market

S. underwriters and

the

its

relating to the credit phases

Congressional

municipals

receive

recreational

handle

of

of the Defense Production Act.

monument, etc., it will be vetoed
and U.

advised

Federal Reserve Board, def¬
initely has "gone across" with the
Congress, before whom he has tes¬

tax

Senate,

the

the Federal Reserve

nor

were

Meanwhile William McChesney
new Chairman of

in the near future.

necessity

last

the

bill to treatment, it is planned, as U. S.
committee. In the process of re¬ municipal borrowing. If somebody
committing, the House in effect wants to borrow to improve a park
the

recommitting

until

neither

Martin, Jr., the

soon.

news

by five points, the majority of the mental borrowing in the U. S.
committee clearly went beyond, dollar market.
In practice, that
it is
believed, what the House means
primarily borrowing
by
will be disposed to "take" under Canadian municipalities. It is un¬
present political, economic, and derstood
that
a
considerable
volume

that

on

By raising "tentatively" the in¬
Before
long the committee is
tax rate on individuals by
expected to clamp down similarly
three points and on corporations on foreign municipal and govern¬

circumstances.

bet

least,

at

tents.

"inflationary"
municipal credit, it will

still

safe

a

Board

come

near-war

is

Monday,
Treasury

news

along with the De¬

down

State and

of the House.

Re¬

made

Mobilization

clamp

in effect, on the floor

Credit

credit.

Committee

fense

and

good

%

►;<

Voluntary

it went

when

legislation will be taken out of the

a

It

the

straint

substantial risk that tax

a

t-

,

If

be

to

with

of success.

chance

ing so far to please the Admin¬
istration,
the
closely-disciplined
majority of the House Ways and

the floor,

on

$14.00

LERNER & CO.
Investment

10 Post Office

Securities

Square, Boston 9, Mass.

Tel. HUbbard 2-1990

mit

FIRM TRADING MARKETS

tit

Allied Electric

BOUGHT

FOREIGN

SOLD

SECURITIES

Products

QUOTED
Prospectus

on

request

r.ARL MARKS & r.O. INC,

Stanley Pelz & Co.
INCORPORATED

40 EXCHANGE

PLACE, NEW YORK 5, N. Y.

BOwling Green 9-5580




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