Full text of Commercial and Financial Chronicle : May 18, 1950, Vol. 171, No. 4908

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BUS. t£-'n

UBP.AH '

(

Volume

ESTABLISHED 1S39

171

Number

4903

New

York, N. Y., Thursday May 18, 1950

As We See It

J. Waiter Thompson Company

Dr. Reed bases his

Of course. But an affirmative reply is now one of the
leading battle cries of the Fair Deal as it used to be of

for

long time,

willingness of

of the accepted dogma of the rank

campaigning has proved to
be as advertised and expected throughout. Much,
perhaps most, of what he has been telling the
"folks ' around the country is the usual buncombe
about local things and about what the Great
White Father in Washington is doing for them;
about how important Podunkville is to the na¬

has been

tion
We have

the

tall mountains

all but

Absurd

even

and tag

was once

well

now being
sedulously spread among the people "back
home," is that the New Deal and the Fair Deal

Even

tion.
dent
us

now

the

Butte, Montana, late last week the Presi¬

once

first

FROM

ALL

PRESENT

FEDERAL INCOME

government

♦An

keting

official,

the

labor leader,

address by
Conference,

Reed before the Fourth New
Boston, Mass., May 15, 1950.
Dr.

Continued

FINANCING

NEW
EXEMPT

Past

Years

this

page

college

and

THE

OFFING—-For

financing operations turn to our "Securities

complete

Now

TAXES

page

England

but

the

record

and

global

psychology might change,

hard facts

the

to stay with us.
the hands of whoever is

The

number

one

debt.

national

fact

Let

economic

They force

power.

the

call

sideration.

Given

the

size

the banking system and of
the

par

Due

Vi %

the social security set-up on

need to issue new bonds—the interest rate
low

and

revenues

high,

cost

what

January

another

thing,

there

Price

Continued

section,

starting

across

commit¬

page

Municipal

Canada

Bonds

Monthly Commercial Letter

100

accrued

military

the

are

The cost of war preparation is bound to rise, and

State and

Established 1927
and

the

may

forthcoming corporate

Registration"

R. H. Johnson & Co.

1976-73

must be kept

that

economy.

550 Branches

Bond*

Dr. Melchior Palyi

value of the bonds; given also the Treasury's

42.

Philadelphia
2

the

and

CITY OF

huge
$300

billion; that is what it very soon will
be, if the growing deficits and Fed¬
eral guarantees are taken into con¬

Mar¬

page

domestic

scene are

ments.
on

its

i;v

Political

For

again came forward with this claim. Let
just what the President had to say, and

see

Continued

with

essentially short-term character of
that debt; given the dependence of

crying jag is more for¬
givable than the gross and repeated
Vergild.Reed
underestimation of the vita lijy,
stamina, and potentialities of our
economy which has marked our past.
The businessman,

"saving" the free en¬
terprise system of this country from total destruc¬
are

count

Yet, many
nights sweating under

Business Fears

the most unfounded of these notions

demagoguery has taken
the public mind

may.

as our own.

beds.

on a

spending implications, cost what they

heavy blanket woven with a warp
weft of doubt count¬
ing imaginary sheep on the wrong
our

There is no

prosperity.

Employment Act is sheer
be changed. The unwritten

State

not

have "saved" and

the challenge to

them

lie awake

Full

party could afford to deviate
to challenge, the Hand-out

from,

with

blinded

one

that

earlier.

years

are

of worry and a

Claim

dangerous,

eyes

endless file—unseen.

side of

One of the most

written
our

(the

laws can
double plan: political and economic.

And

Welfarist

hypochondriac fears catch in our
throats, as we sing that song, the
lambs of opportunity gambol past in

universally accepted.
An

Song,

is committed

effect

such deep roots in

pes¬

blessings is well expressed

our

that

commitment is

This shadow of

years.

nation

verbiage).

our

mere repe-

of malaria

While

part of the accepted notions of the people

much/as the miasmic origin

This
law

popula¬

sentimental tears, and the sobs from

again repeating over and
thus increasing the danger that these spur¬

presently become by

■

There are, however, certain basic claims

for ourselves and singing

sorry

for

Whiffenpoof

;C;VV'

foreign markets.

new

feeling

blues

in the midst

the

been

economic

simism

and

are

growth and

which the President is

tition

span

"really believe in competitive enterprise.".

Looks for expanded markets due to continued

where the tall trees grow; and much more of the
order (we had almost written of the same

ious notions may

buy, (2) increased life

Says unemployment during last months

same

over,

(1) ability and

grossly overplayed and questions wbether busi-

leaders

ness

tion; about how much the President thinks of

odor).

other things

among

consumers to

unfilled orders.

President Truman's

them all out where the

Asserting welfarist demagogueryhas taken deep root,
and consequent commitment to prosperity means we are
also committed to inflation and high taxes, Dr. Palyi says
inflating prices and costs create unprecedented incentives
to expand productive apparatus with resulting "over pro¬
duction" and peipetual budgetary deficits. Decries pump
priming, and points out "subsidies beget more subsidies,"
while every inflationary shot-in-the-arm strengthens labor
union bargaining powers.

diagnosis lhat business, measured by

resulting in increased demand, and (3) great backlog of

and file.

;

standard, is unusually good and should continue

any

It would be disastrous if such absurdi¬

ties became part

By MELCHIOR PALYI

Associate Director of Research
v

the New Deal.

Commitment to Prosperity

By VERGIL D. REEDV

Does private enterprise owe its continued existence to
the New Deal and the Fair Deal? A foolish question?

■f

Copy

EDITORIAL

The Business Outlook

...

Cents

Price 30

upon request

interest

INVESTMENT SECURITIES

THE

(When, as and if issuedi

64 Wall

White,Weld&Co.

Troy

40 Wall Street, New

York 5

Street, New York S

Albany

Buffalo

BOSTON

CANADIAN BANK

OF NEW YORK

OF COMMERCE

Harrisburg

Providence

Scranton

Wilkes-Barre

CHICAGO

THE NATIONAL CITY BANK

PHILADELPHIA

BOSTON

WiUIamsport

Springfield

Washington, D. C

Dept. Teletype: NY 1-708

canadian

Underwriters and

stocks and

Bond Fund

Distributors of
OF

BOSTON

Municipal

and

THE CHASE

NATIONAL BANK

Head Office: Toronto

Bond

ISetc York

Los Angeles

CANADIAN

Northern
New

BONDS & STOCKS

Ill

Established

1899

CLEVELAND

Chicago
Los

Angeles

& co.

MEMBERS NEW YORK STOCK EXCH.

BOSTON
New York

Goodbody

ESTABLISHED 1891

(Incorporated)

Devonshire Street

115 BROADWAY

New York

^Chicago

Cincinnati

Columbus

Denver
Toledo

Dallas
Buffalo

NEW YORK

•

upon

•

request

Domimos Securities

OTIS & CO.

Analysis

Corporate Securities
Prospectus from authorized dealers

England

Company

bonds
L

VANCE, SANDEliS ** CO.

CITY OF NEW YORK

THE

Agency: 20 Exchange PL

Seattle Portland, Ore. San Francisco

WTe

Bond Department

Corporation

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

40 Exchange Place, New York S( N.Y«

111

105 W. ADAMS ST.

CHICAGO

Teletype NY 1-702-3

WHHehaa 4-8161

WOrth 4-6000
Boston

Principal Exchanges

Broadway, N. y. 6
Teletype NY 1-2708

Telephone:

Enterprise 1820

The Comviercial and Financial Chronicle

(2046)

TRADING

MARKETS

The

RIGHTS AND STOCK

Secuiiky I Like Best

Forum

Cities Service Rights

:■

Dayton Light & Power Co.

Partner, Glidden, Morris & Co.,
New York

request

would

New York Hanseatic

there is

Corporation
Established

list
to

1920

120 Broadway, New York 5

that I include in every

one

submitted

vestment

reasons

vested

the

—

within

Rights & Scrip

short

investment

common

American

Company

liquidated and its assets
into cash which will be

in the treasury of Union
Company of St. Louis,
which will have more than $20,-

Common

Kentucky Stone Co.

the

Preferred

company

to sell

will not be obliged

(as almost, all other com¬

panies

do)

any

common

probably two yearns. The
company's ratio of bonds,-; pre¬

stock for

stock

ferred

Incorporated

are

floor, Kentucky Home Life Bldg.
LOUISVILLE 2, KENTUCKY

and

stock

common

excellent and

the $20,000,000

will make it more so.

the

For

Trading Markets

Horner

Cement

Bassett Furniture Ind.

and

Public
the

Utility

SEC

itself

Commission
on

condi¬

all

tions and attending circumstances

Dan River Mills

of the

Scott, Horner &
Mason, Inc.
/

iinHiHiiimniiiiiiiiiniiiiimMiiiiii
■

..iV

U.S.THERMO
^CONTROL
Analysis

•

■

„

' \'V-t;

Steiner, Rouse & Co'
Members New York Stock Exchange
Members New York Curb Exchdnge

25 Broad St., New York 4,
HAnover 2-0700

Mobile, Ala.
Direct wires to

best

JNbJtJ ef -SeSh

issues

total

sense

■

Bought—Sold—Quoted

J. B. Magaiie & Co., Inc.

Members

Nat'l

Assn.

Securities

Dealers

In©,

75 Federal St., Boston 10, Mass.
Tele. BS 143

Tel. HUbbard 2-5500
-

Portland,- Me.' Enterprise 2904
Hartford, Conn. Enterprise 6800

;

Open End Phone to New York Canal 6-1619

common

Dan River Mills Common

history is

growth.
Through acqui¬
it has sought to take an

Atlantic City Electric
Harshaw Chemical

increasing share of the available

Philadelphia Electric Commpn

business.

Allan Wood Steel Com. & Pfd.

1939

$5.28 million.
,:

He,en E- D"*ms°n

of the

word—potential cap¬
enhancement, plus an at¬

tractive

outstanding

sitions

strictest

At that time,

The company's recent
one

merit the term
the

2,687,500 shares
stock author¬

common

1,756,434 shares.

not:

"security"

F,TI51^,E,
£ •' *- I
4*

in return, the company issued an
additional 308,010 shares, bringing

such

are

'*•/

at the

the net
Spring & Wire Co.
subsidiaries were acquired;

and

Perhaps

branch offices

of two-

rate

redeemable

assets of Falls

preserva¬

tion

the

of which 1,448,424 shares
outstanding
at
the
1949

year-end.

for

the

par

were,

oppor- y

tunities

our

IFF1 VIC1 <3

There

ized,

of.

com-

N. Y.

NY 1-1557

New Orleans, La.-Birmingham, Ala.

income, usually entail

sales

totaled

By 1941

only

(aided by

the purchase of Mulhausen Spring

Corp. in mid-year) they had risen
to $12.7 million.
War production
of

Penna. Power & Light Common

Inter. Resistance Com.
Issues

added large sums, but
during reconversion in 1946, ^

course

even

Pfd',

Philadelphia Transportation Co.

utility industry.

This proc¬

Currently

good

ferent
that

there

situations, in
it

select

are

many

y-;

■

PEnnypacker 5-2857

Stable Earnings and Dividends

New York City

dif¬

For

company

serving

has,

Request

PH 771

■

Tel.: BOwling Green 9-4818

industries, to choose from
is extremely difficult to .« cyclical industry, Standard's earn¬
ings and dividend record is rela¬
"favorite" issue.
But it

to speak, given

Cities Service

tifiable

....

•

.■

Co.—Edmond

stable.
It
has
made
a
would seem that Standard Steel tively
a jus¬
profit in each year except the
higher confidence in the Spring may be included as one of v
depression period of 1932 and 1933
industry.) The utility industry in today's attractive opportunities.
—even
in
the
poor
automobile
The company is an important
particular, is the only one • that"
unit in the automobile equipment year of 1938 it had a small net )
operates a monopoly regulated, to
income.
And dividends have been
Its
products
include
be sure, by the various Commis¬ industry.
paid on the common in each year
sions.
Thus, an investor in this * bumpers, leaf springs, universal except 1932-1934. In 1949, Stand¬
industry is not. subject to the joints and assemblies, coil springs, ard
Steel Spring reported net in}wire forms, steel
gratings and
fierce
competition
that
means
come
of $-3.3
million, equal to
It is a company primarily
lower profits to many and disaster treads.
$4.22 per common share on the
dependent upon.the automotive
to others in the industrial field.
stock then outstanding.
A look at the: map will reveal industry.
Thus its present high
As has been mentioned above,
level of
that St. Louis is the only
vcify. continue prosperity is likely to the company acquired the Falls
as
long as automobile
large city in the United States that
Spring & Wire Co. and its sub¬
holds
up
can. expand
anywhere
in every ejection. production
sidiaries on Dec. 31, 1949.
Last
Furthermore, it is reported that1 close to its present level. -In a
year that company showed sales
the diversification of the. indus¬ smaller way, Standard also makes
of $24.5 million and earnings of
tries of this city. is. greater than in parts for agricultural equipment
$1.7 million.
Based on this 1949
and Diesel engines.
any other large city".
ess

Co.

option, of the company at $53.50
prior to May 1, 1952; $53.00 to
May 1, 1954, and $52.50 there-,
of

stocks-

ity laws have focused attention of
the

Bought—Sold—Quoted

(Page 35)

American Furniture Co.

Lynchburg, Va.

Henry B. Warner & Co., Ins.

IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII

President,
Grady,
Co., New York City.

common

for-one.

after.

busi-

today
prob¬
ably offer the

ital

•

measured risk.
But even at Cur¬ sales totaled $21.6 million—four
Despite the miseries that the
rent
market
quotations,
many y- times the 1939 level and almost
public utility laws, administered
Each year since thenv
common stocks with good growth double 1941.
by the SEC, have visited upon the
possibilities offer high dividend has increased the figure further Members National Assn. Securities Dealers
utility industry, one result has
until 1949 chalked up a handsome 123 South Broad
been the clarification of all the yields, amply protected by pres- 7
St., Phila. 9, Pa.
ent .and projected earnings.
$53.3 million.
-•
Phila. Telephone
Bell System Teletype
utility companies assets. The util¬

Bell Tele. LB 186

Long Distance 238-9

into

actual^
000,000 in excess of appropriate
purchas¬
working capital. ' This is a prime'
ing power.
consideration as it will mean that

American Turf Association

BANKERS BOND

woman:

mon

Electric

Common

All Classes

moderate;

United

the

placed

American Air Filter Co.

eight best utility

stocks

North
be

Rochat,

(Page 35)

maintain the real

capital.

means,

turned

The

Portland

Berwald &

Spring)

even

value

Nathaniel F. Glidden

States.

Tel. REctor 2-7815

•

much less,
to find more and

buys

necessary

of the six

New York Curb Exchange

DICKINSON

period like this when the

dollar

New York Stock Exchange

...

dollars

recog¬

nized

120 BROADWAY, NEW YORK 5

•

Lawrence

and Oxford Paper

New York City

widely
one

(Standard -Steel

St. Louis. This

Members

in¬

have

Editor, "Gartley Forecast,"

Company

McpONNELL&fO.

Rankin, R. M.
Co., New York City.

heavily in this stock.

;

Union Electric

Since 1917

•

time, be

known

institutions

HELEN

will,

company

;£Vv;

(Page 2) y.y^;

Reid

are

many

Specialists in

City.

Louisiana Securities

American Cyanamid Company—T.

in 1951.

trusts, colleges and many

financial

Company. The
7

Partner,
&- Co., New

Morris

Published reports show that in¬

North

forward to substantial

dends sometime

American

York

Glidden,

investor here can* Standard Steel Spring—Helen E.
Dickinson,
Editor, "Gartley
capi¬
tal gain.
1: ; Forecast," New York-City.
(Page 2)
Despite the lack of wisdom in
making predictions, I believe an Cunningham Drug Stores, Inc.—
investor here (other things being
I. Komanoff, Herzfeld & Stern,
equal) can expect a 25% to 30%
New York City. (Page 35)
capital gain in addition to divi¬

inquiring

investors.

Teletype NY 1-583

BArclay 7-5660

unimaginative

could

suggest only
investment.
However,

sound

one

who

banker

iGlidden,

of the considerations above-

mentioned,
look

(North American Company) y

;

Brooklyn Union Gas Co* 5% Pfd.

City

thaniel

little less than 6%; (2) Be¬

cause

Bank of America N.T.&S.A.

GLIDDEN

now

,r.

Company—Na¬

NATHANIEL F.

Potomac Electric & Power Co.

Prospectuses

each week, a different group of experts ■j>\Their Selections
and advisory field from all sections of the country
North
American

participate and give their reasons for favoring a particular security.

Northern Natural Gas Co.

■■

Alabama &

Participants and

A continuous forum in which,
in the investment

•

This Week's

Co.

Edison

Toledo

Thursday, May 18, 1950

...

"Rights"
Toledo Edison
Common
Bought—Sold—Quoted

y<yy..,> 7.

V0GELL & CO., Inc.
37 Wall

Street, New York S

WHit.hall 4-2530

Teletype NY 1-3565

the new acquisition adds
potential 46% to sales and 27%
Present capitalization is rela¬ to
earnings of
Standard
Steel
tively simple. There is no funded ; Spring, fBut Standard operates at
debt.
In 1946, 120,000 shares of t an unusually high profit margin.
$50 par, 4% preferred stock were Its net before taxes in 1949 was
authorized;* at the present time,. almost 20% of sales; after taxes
Falls Spring
97,5Q0 - shares i are
outstanding. it was almost 12%.
record,

■'/,

It is recognized that according
laws, utilities are al-

to Missouri
.

lowed to earn 6%% on theij* rate
base and there are other favorable
circumstances recognized

the

government of the State.
This

148-State St., Boston 9, Mass.
Tel.

CA, 7-0425

;

Mexican

Teletype BS 259

investment

acteristics that

(1) jit

pays

are

has two

char¬

Capitalization Simple

important, viz.: This preferred stock is cumulative * & Wire profit margins were 12%

generous

income,

to dividends and is convertible

STATE AND MUNICIPAL BONDS

Railways

Continued

page

Baltimore Transit Company

CORPORATE BONDS

BONDS

Over-the-Counter

—A high leverage speculation,

Quotation Services

;

selling at close to

LOCAL STOCKS

six year

Bought—Sold—Quoted
Analysis

Analysis Upon Request

request
f

ZIPPIN & COMPANY

The

Robinson-Humphrey Gompany

298 South La Salle St., Chicago 4
T«t»

RAndolph 6-4696

for 37 Years

low-

Tel. CG 451'

Established 1694
RHODES-HAVERTY BLDG

Teletype AT 288

National Quotation Bureau
50 Broad St* New York 4, N. Y.

ATLANTA

1, GEORGIA

Long Distance 421

Incorporated

J. V. MANGANARO CO.
Tel. Hanover 2-3818

;

Tele. NY 1-2916

Established 1913

46 Front Street
CHICAGO

>NewYork4,N.Y.
SAN

FRANCISCO

Volume 171

Number 4908

...

The Commercial and Financial Chronicle

(2047)

INDEX

Germany Today—The Economic,

Articles and News

Financial and Investment Outlook
By

BENJAMIN

page

Commitment to Prosperity—Melchior
Palyi

BUTTENWIESER*

The Business

____________Cover

Outlook—Vergil D. Reed

Cover

U. S. Assistant High Commissioner for Germany;

Germany

Formerly Partner, Kuhn Loeb & Co.

Mr.

Today—The

Economic,

Financial

Buttenwieser cites

Earnings Outlook for the Building Shares—Lyman S. Logan

v-.f—George F. Shaskan, Jr
xv4

■

•

■

and

_i__:

«v

•

associates

the: in¬

with the poet:

muse

aisles

one

'■■'t First,

By March 1 of this

it reached

set, how deep¬

tion

ate
of

out¬

appreci¬

the

honor

timely and
significan 11 y
far

for

such

a >

situation today.
/
As the name of this Association
indicates and as I well know, you
advise

and

Even though I am now

than it

concept, I assume,
invitation

was

Germany within

ly,

was

on a per

in 1936.

impressions
'

literally and figuranation of rubble-beaten,

aid and encouragement of
o
Western Occupying Powers,

./MiAhlA

desolation

and

are

their

Thus

far I have

been

speaking

I know this audi¬

well

aware

Permit

enough, however, to be
that

you

satiate

significant data
to

From it,

draw your

to her

Mr.

Buttenwieser

before

ginia, May

18,

Street Journal__

:!;s

Cover

;

Albany

economy,

easy

one

•

;

>. i

Texas

•.,

Indications of Business Activity

•

Bought—Sold—Quoted

J. F. Reilly & Co.

40
18

NSTA Notes

Observations—A.

Wilfred

Our

Reporter

May

;

•>.

Offerings

Public Utility Securities

Governments

Security

Teletype NY 1-3370

:__j

Reporter's Report

Broadway, New York 6

BO 9-5133

.News About Banks and Bankers.—

Our

Incorporated

___'

_____
.

____..

Railroad Securities

that there

26
,-r

Securities

Salesmen's

page

Securities Now

Corner

Registration

Security I Like Best.:

Tomorrow's Markets

Washington

____*

Published Twice Weekly

COMMERCIAL

FINANCIAL

Drapers' Gardens, London,
land c/o Edwards & Smith.

Worcester

MAKES CONTACT

Patent

Office

Every

Thursday

(general

advertising story to the whole

;

25,

Other

Offices:

111.

135

South

(Telephone:

second-class matter Febru¬

the
under

post

the

office

Act

New

March
••■■■

Subscription Rates

Subscriptions in United States, U. 8.
Possessions, Territories and Members of
Pan-American Union, $35.00 per year; in
Dominion
of
Canada,
$38.00
per
year.
Other Countries, $42.00 per year.

1950
and

ad¬

financial

community

The Times
cludes

Salle

State

St..

0613);

Ncte—On account of

the fluctuations ln

remittances for for¬

eign subscriptions and advertisements must
be

made

banking officials,

tion executives,

institutional

because

broad audience in¬
corpora¬

professional and

security buyers'}
•

Other Publications

Bank and Quotation Record —
Monthly,
$25.00 per year. (Foreign postage extra.)

the rate of exchange,
La

financial

your

individual investors.

vertising issue) and every Monday (com¬
plete statistical issue — market quotation
records, corporation news, bank clearings,

Chicago

1942,
Y.,
;:-T

1879.

9576

news

advertising in The New

Reentered

York,
8,

WILLIAM D. RIGGS, Business Manager

18,

best prospects

York Times tells

ary

Publishers

Editor & Publisher

Thursday, May

Financial

■

25 Park Place, New York 8, N. Y.
2-9570

your

C:, Eng¬

DANA COMPANY,

and

CHRONICLE

38
48

—

«tate and city news, etc.).

Schenectady

(Walter Whyte Says)—,

You__

and

with

REctor

Hubbard 2-8200

■*.

and available pa¬

1-5
-

Mutual Funds

•

».

Texas

Bargeron

The State of Trade and Industry....

Gas Transmission

•

would

50 Congress Street, Boston 8

Glens Falls

From Washington Ahead of the News—Carlisle

The

Teletype—NY

Chicago

•.

Eastern Transmission

;

;Einzig—"Cost-of-Living in Britain".

Members New York Curb Exchange

Spencer Trask & Co.
4

•'

•/":

i_,

WILLIAM DANA SEIBERT, President

2-4300

;

•

OERBERT D. SEIBERT,

HAnover

Gas Transmission

PREFERRED STOCKS

Broad Street, New York

'J.

Coming Events in the Investment Field

Reg.

Natural Gas
X:.
'• •'..
Tennessee

■/

U:;

Regularfeatures

wnii/fU iiv

r\+

offerings of

Exchange

V"'-V

Gas Producers

V7ILLIAM B.

York Stock

♦

Southwest

New

lT.

Members

Dealer-Broker Investment Recommendations

Economy

Continued

interested in

Investment Securities

19 Post Office Square, Boston 9} Mast,

.19

Canadian Securities

taking
into
account
important aspects of

assume

1950.

are

•Business Man's Bookshelf:

The

LERNER & CO.

Bank and Insurance Stocks
v

work, it
should
be possible
to increase
production and consequently ex¬
pand exports. That, of course, has

Investment Bankers'.Association of Amer¬
ica at White Sulphur Springs, West Vir¬

$9.50

•Selling about
'

M. Baruch

skills and the justified reputation
of her populace for hard

request.

namely, that with Ger¬
many's much vaunted industrial

May I make clear

As We See It (Editorial)

nacea;

concerning Ger¬
will be able
conclusions

naturally

you

own

status.

♦Address

hnlnv$nA

relatively

what I consider to be salient and

review of the Cement Indus¬

try available

Truncated

Germany's

your appetite for information with

many.

+v*nrJ/\

these-two

facts.

want

therefore,

me,

and dear to the

Merely

ence

Analysis of this Comply and
a

Banking Industry Is "Half-Slave and Half-Free," Says

Prospective

in broad terms.

Marshall Plan, and for all countries participating in the Plan.

back toward economic

way

•

f°r ^ country, as sponsor of the

slowly, but I think surely, finding
J'
&
rehabilitation.

L_;

Government—Bernard

•'

$1,125,000,000. 1 This presents
a
very
serious problem for Ger¬
many and, indirectly, a problem

especially our own country, the
German
people dug themselves
war's

W. W. Townsend__

a?BP°"tnSnnt°talied,,.0n„ly about il¬
125,000,000^ resulting in an unfavorable trade balance of roughly

liberal

See Bigger and Better Bawl

need hardly re-

be?n expanding,
bat unfortunately ot is still only
ab°ut 40% of 1936 volume. Cal,culated ln ?°"a?>,G1f!Tany s im"
P01"'3,
approxi"lately $2,250 000,000, whereas her
1

bewildered and practically bereft
of hope.
Soon, however, with the

out

■

Southwest

b?art,s °j a" American taxpayers:

her,

•California.

______

•

war wrought in Gerfrom every standpoint. Our
Occupation Forces took over Germany
just five/ years ago and

the

Consequent-

with its all important effect on
;her requirement of foreign aid—

economic

tion that the

;

other European countries is somewhere around 130% of 1936.
Second, as to Germany's trade

many

found

CLASS B (common) STOOK
A leading producer oLcexnept
in
fast-growing .Southern

Supplanting Manpower in Factory and

that the production level of most

it is superfluous for .a su^ect which 1
portray the utter destruc- •™lnc J™" » "ear

lively,

•

Why? Why? Why? (Boxed)

capita basis, the pro-;
only about 80%

".Obviously,
to

•

greater

of 1936. - Another important consideration to bear in mind in ap¬
praising this production figure is

today

and financial framework.

RIVERSIDE CEMERT CO

14,;

___

Office—Norbert Wiener
Too Much

population

wel-

your

normal

this

be here

to try to give you my

12
13

Disappearing Market Leaders,in the D-J Industrial

Robots Capable of

duction is really

is knowledge of the enterprise in which investment is being

come

the

of that area, roughly 25%

ment

Predicated

WE SUGGEST

constitute

mental official, I have not com¬
pletely forgotten that One of the
essentials in determining invest-

considered.

For

Large Appreciation Potential

added to the approxi¬
mately 38,500,000 of Germans who

a .govern¬

WHitehall 4-6551

Tel. HUbbard 2-1990 /

9,000,000 Displaced

some

is,, when

investments.

Shares—Mrs. R. H.:Axe

the
first
place,
Germany's
population today, due to the in¬
flux

..The Next j50 Years in Plastics—Paul O: Powers_______r

Germany's economic and financial Persons, Expellees and Refugees,

make

■

Long-Term Outlook for Stocks Favorable to Mutual Fund

Tn the absolute, this

In
Benj. J. Buttenwieser

reaching
subject
of
-

•

Average—John Duncomb

single figure would be quite re¬
assuring.
In the relative, how¬
ever, it leaves much to be desired.

the

you

basis

accurate

discuss

The

ratio, the former being the

comparison.

being asked

with

14<

Signs of the Times—Bernard F. Herberick.
•»

__1

—Alexander Wilson

year

STREET, NEW YORK

Telephone:

day constitutes Germany. This is
physical, not a monetary, produc¬

WALL

A Defense of Man's Right to Intellectual Freedom

100% of the 1936 pro-,
territory which to- j

>
h

v;,

duction of the

too,

say,

the very

'•'<. '*■

to her industrial pro-;

duction:

May

Production and Trade
\

.ut¬

terance."

■

the

Market for Government Bonds—John H. Grier

we'

cash.

-i-Al

are

crowded,
gates

"The

it when

•

bid you

beadj but

your

this

•'

over

you'll understand

■

E.Spahr

of
•1

chokes

throughout

banking fraternity, well

memory

•

Federal Monetary Policy—Walter

former

may

New Factors in Investment Trends—Raymond Rodgers.:
'v: 'V
y
...
Banking in the Years Ahead—E. Sherman Adams__

■

' -

Production, Income and Taxes: Whither Bound? »..
discussion,
'•
—Thomas M. McNiece
unless otherwise indicated, refer¬
'
ence to Germany means the Fed¬
Information Objectives of SEC and Capital
Raising
eral German, or so-called West
-*—Commissioner Donald E. CookL___*_l__:___„___:__;
German, Republic.
that

of my friends

—may

investment moratorium.

vestment

NEW THEORY

Investor Aids for Investment Planning

of military security, and en¬
for revision of Prohibited and
Limited Industries Agreement. Declaring Germany is in crying
need of capital and there will be opportunity and duty for
foreign lending, he describes present obstacles to lifting present

so many

Germany's current production, trade,

cial considerations under guise
dorses some German arguments

In facing

EINSTEIN'S

Investment

Outlook—Benjamin J. Buttenwieser_T_.:_

monetary, unemployment and political difficulties. Maintains
limitations on her rearming must not be imposed for commer¬

and

New

York

funds.

tjfie Jfehv Hark SimcjJ
"All

the News That's Fit to Print"

The Commercial and Financial Chronicle

(2048)

tinuing to develop each year. This
is just a statistical basis and does
not mean very much except that
there is a big demand for housing

Earnings Outlook for
The Building Shares

When I start out to talk
a

group

the

about

of stocks I like to have

the market

whole.

If I

stock

because I think

going

do better than

the market

think

s o

that

size

you

stocks

the

same

that

way.

wvi t

seems

pe¬

riod
Lyman S. Logan

whole and I

the

present where
have

four of the fol¬

lowing characteristics:
growth company?
(2) Were
more

year,
more

they

going

(

earn

year

than

last

presumably

pay

out

money

and

this

in dividends?.

(3) Did the stock have

any

de¬

fensive characteristics?

(4) If it did

not

have

fact

believe

don t

mula

clusions regarding mutual funds, and descriptions of important

it will just take longer to satisfy
these demands and building has

gotten just about as high as it can.
Earnings Indicated

Higher

The Building Situation

Last year

There is

one

other thing that I

ought to do before I take up the
subject of these individual com¬
panies.
minds

I ought to place in your
some
figures
about the

building situation.
tend

do not in¬

give a long discussion
building industry and
its outlook, but I am going to em¬

about

the

phasize the importance of just a
few factors.
I doubt if you know
that

the

government
in

committed

FHA

already

loans

for

billion on a con¬
tingency basis. This includes
all of the guarantees for rent¬
al housing for all types of sin¬
gle-family dwellings for repur¬
chases of mortgages
by Fannie
sum

$15

riod

six

years.

These houses

apiece, mak¬
ing a total around $6
billion over
the next 5J/2 years. This program

sales of

of the year.

producers, but this was
largely because there was a liqui¬
inventories in

dation

ferent

dif¬

stages

the

of distribution.
It
was
thought at that time that
building costs would come down
and that building materials prices
would decline.

When the resurg¬

of demand

ence

summer

that the
was

in the late

came

became

obvious

very

The

plants

since. This

ever

that

means

earn¬

be a lot better
companies this year

ings are going to
for

some

Association
York

meeting of

—-,-s'

Brokers,

lecting

have

sustained

will
heavy de¬

and

mand for their products

out

the

current

year

through¬

that

and

these

first

Masonite,, for

Here is

ex¬

that

company

strike

five

for

1949

California

this

of insurance

tition

strike

main plant at

j International Television Corporation

against

cents per

troubles

the

earnings and
that on a normal
basis when all plants are in oper¬

would

D. F. Bernheimer & Co., Inc.

this

company

raised

prices,

some

margins

are

is that it
except for
since

increases,

meant

Hunter & Co.

42 Broadway, New York 4

BOwling Green 9-4970

Broadway, New York 4
DIgby 4-2787

sold based

the

upon

previous price action of such se¬
curities—such price action being

met

charted and the charts then

United

nosed.

States

bonds
com¬

selected number of industrial and.

stocks

mon

which

met

railroad

Geo. F.

Shaskan, Jr.

groups

two

,as

then

and

actions

number
bulk

the

offensive

most

the

price

separate

these

chart

up the pictures for drawing
position. ferences.

for

rules

separate

the

uses

qualifications might make
However,

diag¬

Probably the best known
of these chart reading formulas is
the Dow Theory which charts a

Government

certain

in¬

Dow Theory

aids

available

to the
highs and successive lows are
planning his invest¬ higher than the preceding lows—
ment program and an alternative
and conversely for bear markets.
investor

for

approach to the problem which It is not sufficient for either the
minimizes the decisions which the industrial or the railroad
averages
investor must make. We will also
to meet the conditions but both,
mention briefly several other con¬ must meet these

partly the result of experience— railroad averages. Thus, in these
sad experience —- and charts of the Dow-Jones Indus¬
partly, ho doubt, prejudice. To¬ trials and the Dow-Jones Rail¬
sometimes

cost
uct

increase

the

consumer.

ties,

important

the

when

invest

assets per

defensive

and

is not

gram

Continued

indicator to purchase
this

but

has

not

been

confirmed by

offen¬

bull market.
is

not

intention to ap¬
praise the Dow Theory other than
my

indirectly

are

re¬

carefully watched since the
Continued on page 20

sideration

the

offensive

this

NASD

pro¬

easy one and con¬

subject

might
only a
entire series.

MEMBERS

well form the basis for not

single lecture but
However, there
♦Transcript
lecture

series

are

the
on

number of

eleventh

and

"Investment

last

Plan¬

for Women," given under the aus¬
pices of Shaskan & Co., at the Hotel
Barbizon, New York City.
ning

orders solicited for

Detroit Stock Exchange

execution at

60% of

regular commission rates
List

traded—

stocks

including 171 diversified

Shedd-Bartush

fair¬

issues also traded NYSE
& N Y Curb—sent upon

Foods

request.

Grow With Oleo

report

prepaid
Prospectus

prewar.

executions

teletype

wire

Request

have

28^%

Moreland & Co.

prod¬

Members:

Midwest Stock
Detroit Stock

possi¬

1051

on page

•

.* *

Exchange
Exchange

Penobscot

v -

Bay City

—

Lansing

Members

625

Building
—

R.C.O'DONNELL&Co.
Detroit

Stock

Penobscot

v ^

DETROIT 26, MICH.

split and there are similar possi-.
.

freight

good

securities

bull market which

Actually, the determination of
when to invest, and what rela¬
tionship should exist between the

bility too that the stock might be

whether

lated to these questions.

with other materials.
there

would be

position went largely unex¬ to say that, while I do not sub¬
plored except to the extent that scribe to the Theory, so many in¬
such considerations as the price- vestors
apparently do that the
earnings ratios and net current signals given by the Theory must

is, therefore, quite competitive
think

ditions for

sive

•

questions

and

emphasize the defensive

about
has not

Its

we see that the industrials
approximately met the con¬

roads,
have

the rails so that we
cannot say we are in a bull mar¬
offensive investment program and ket at this time according to the
Theory
although,
should
certain considerations to be taken Dow
into account in selecting securi¬ rail prices confirm, we would be

■

of chart-

attempt

individually should

purchased

guess

These freight rate increases

which

have all heard

another

through

ly well stabilized, results ought to
work out somewhere around $12 a

rate

Orders executed

determine whether securities

probably

share. The important thing

Price 60

time

one

whole

program could

that

am sure

reading

defensive por¬
tion
of
the

repe¬

Laurel, Miss., but it

ought to add

ation and profit

Common Stock

(Par Value 10^ per Share)

gested that the

only earned $3.98 a

going and I
plant should begin
operations some time in the sum-r
mer. Partly, this plant was a ques¬
tion

360,000 Shares

share.

believe
.

Chart-Reading
I

We sug¬

best

formulas

merit.

offensive posi¬

tion.

mechanical

might be applied to these
problems and, while certainly not
infallible, appear to have some

ward the close of today's lecture
I hope to be able to answer some
They had to cut their divi¬
of the questions you may wish to
dend ; down
to the i regular
$2
ask.
basis, which is not very much, but
When and How to Invest
1
the
company
was
always very
converative in paying dividends.
Although in last week's lecture
So far in the first six months 4>f we spoke of a defensive and an

and

plant in
.

which

companies will, of course,
conditions; in
larger earnings and better siderations of
interest to the in¬ other, words the railroad
averages
dividends than they did in 1949.
vestor, list in Polonius-like fash¬ must confirm the industrials or
ion certain platitudes which are
MASONITE
the industrials must confirm the
show

just small additions to their total
earnings. ' What
really
should
boost their earnings is to get the

New Offering

s o-c

se¬

po¬

and

ailed

the

program
in terms of a

discussed

additional

General

Certain-teed,

Radiator,

Portland and Johns-Manville,

six years to work

off this backlog

reviewed

selecting common stocks we noted
While we do not have time to
they were last year, par¬ were
vague and not subject to review the Dow
Theory in detail
those companies that strict measurement. We
ticularly
concluded, I think we might say that gener¬
supply building materials which
therefore, that probably the most ally speaking a bull market is
are used for residential construc¬
important consideration was that described
by this theory as one
tion.
It seems to me that such
of diversification.
in which succeeding highs in each,
companies as Masonite, National
Today we shall explore certain average exceed the preceding
Gypsum, U. S. Gypsum, American

eration in South Africa. These are

and meet the needs that are con¬

sition

con¬

provisions. Cites basic investing principles.
we

investment

an
we

Offers

than

lion houses and it will take about

City, May 8, 1950.

dollar averaging in detail.

problems and opportunities of

and that

making £. building
material could not get into pro¬
duction fast enough and they have
been working at capacity levels

had

were

*A talk by Mr. Logan at
New

week

well

tax
Last

liquidation of inventories savings

mistake.

;) You oan see with all Of -this
fairly well money going into building that
known and which it was begin¬ ?it represents the primary stimulus
ning to overcome. In other words, to the present housing boom. Last
could it be characterized as an year private residential building
accounted
for $7
billion. " This the current fiscal-year—that is
overly depressed issue?
* v
the six-months ending February—
I think the best way for us to year the figure will probably be
considerably
greater,
with the the company has reported $4.64
look at the building stocks is for Federal " Government
providing per share.: There has been some
us to appraise them on this basis,
the stimulus for the greater por¬ decline in business in the past
arid I am going to discuss several tion of it.
Moreover, this type month or two, because part of the
of stimulus is going to continue. production in the fall was to re¬
companies and see how they stack
There is still a large need for stock the dealers who had sold
up with regard to these three or
dwelling units for the families out during the strike period. How¬
four factors.
Obviously, the com¬ that have been formed since the ever, it ought to be fairly easy
for this company to make as much
pany is not going to have all of end of the war, and the forma¬
tion of families continues at the as $9 a share this year. They have
these factors in its favor, but if it
rate of about 500,000 a year.
I some good foreign earnings in
has enough of them its outlook
figure the backlog is about 3 mil-' Canada, Australia, and a new op¬
the

plans

defensive

decline in

was a

of the building ma¬

terials

months

Housing Demands insatiable

there

some

got under way last summer and
there will probably be $1 billion
in bonds sold for the various pub¬
lic housing authorities guaranteed
Take
by the government before the end ample.

the above factors in its favor, was
the stock beat down to a low level
for reasons that

Mr. Shaskan considers elements of investment timing on basis
of Dow Theory and other mechanical formulas. Describes for¬

picture.

housing

that

which

any

and supply the needs for public
housing. What I am saying is that

will cost about $8,000

(1) Could they be classified
a

residential

that they can build all the houses

fairly high Dow-Jones average—
that is on a historical price basis—
Mae [Federal National Mortgage
we probably have some different
Association], and guarantees for
ideas on stocks than we would
all other types of housing includ¬
have if the Dow-Jones averages
ing that for educational institu¬
were low on the historical basis.
tions, military establishments, etc.*
Recently I took a trip out West The new Congress has just voted
and called on the executives of
another $4 billion. This will bring
six of the companies in the build¬
the figure up to $19 billion. Last
ing materials group.
What I was
year
Congress voted
a
public
interested in finding out
about
housing act which provides for
these
companies
was
whether
810,000 dwelling units over a pe¬
they had three

Partner, Shaskan & Co., Members N. Y. Stock Exchange

for which contracts have been let

probably be considered favor¬
able at the present time.

the

can

part icularly
interested

see

The

level

the

background

By GEORGE F. SHASKAN, JR.*

from these figures you
why I am very bullish on

Thus,
can

Specialist in building stocks reviews construction boom situa¬
tion, resulting from government guarantees and other Federal
legislation. Says building activity, though as high as it can go,
cannot satisfy current demands, and building costs tend to
remain high.
Discusses earnings and dividend prospects of
leading individual companies in the building materials groups.

plenty

government.

Staff, Argus Research Corporation

'WBM

Planning

of money to back up
these demands, guaranteed by the

By LYMAN S. LOGAN*
Research

Investor Aids for Investment

it is very obvious that there

and

Thursday, May 18, 1950

...

Muskegon

DETROIT
TELETYPES:

Exchange

Bldg.

26
443

PHONE:-woodward

3-7040

444

Volume 171

Number 4908

The Commercial and Financial Chronicle

...

Lincoln Goward With

r
Steel

Production

Electric

Blunt Ellis Simmons

Output

Observations..

Carloadings
Retail Trade

State of Trade

CHICAGO,

111. — Lincoln
R.
Goward, formerly with Lee Higginson Corporation in New York,

Commodity Price Index
Food Price

and

Index

Auto Production

Industry

Salle Street, members of the New
York
and
Midwest
Stock
Ex¬

changes, the firm announced.

sustained

high level of steel and automotive production
last week was an important
contributing factor in maintaining
total industrial output for the
country at large moderately above
that of the comparable 1949 week.
A slight decline in country¬
wide claims for unemployment insurance
during the week ended
April 22 was also encouraging news.
In

Goward graduated from

in New York.

by Robert C. Goodwin, director of the Bureau
Security, he stated recently that employment
this summer probably will equal or exceed 60,000,000. This figure,
which was the postwar goal of Federal
planners, has not been
exceeded since October, 1948.
A postwar high of 61,615,000 jobs
attained

July,

1948.

Mr. Goodwin

further declared

until

Welcome
that

in New York.
mons

that

come

fireman

Jack

additional

idle.
of

out

curtailed

jobs

because

the railroads

other

reduced

industries

where

transportation

output

facilities.

had

However,

Street to act

viser.

service within the struck

passenger

y,7',77

Mr.

prior

The pace of steel ingot

this week

new

though
Demand for all major products,
and even such heavy items as plates and structurals, is rising,
states "Steel" magazine this week. With demand outrunning pro¬
duction

record

shipments

of firemen

pace.

becoming

are

increasingly

extended.

character

ever achieved
Institute revealed.

That total,

it added,

was more than 700,000 tons higher than
companies made during March, and about 400,000 tons higher
figure for April, 1949.
Minor adjustments in finished steel
prices by individual pro¬
ducers are noted, the magazine adds,
but, in the main, the market
holds at levels established early this year.

than the

Describing

the
can

less

Chrysler's

"amazing,"

Chrysler's

production

comeback

its

•

the

at 35,033

and trucks.

cars

Automotive output for the industry

■

present levels May will

set a new production record, Ward's
With Chevrolet and other producers planning further
increases in assembly rates, June output should be ev6n
higher,
it added..
77 7,;-' 7.77777 77.V777:77v7
7
7777';7
7"' '7. 77 .>;• 77*
*7 »
The

Monthly Letter of The National City Bank of New York,
reporting on general business conditions during April, notes that
trend

business

clear that the

ness

has

become affiliated

Goddard

shire

Co.,

with

Inc.,

J. H.

Devon¬

Street, members of the Bos¬

ton Stock

has

continued

upward

and that it

people

as strong as anyone, at the turn of the
year,
Outstanding in the trade reports, the Letter

paying premiums to get

promptly.
Used
car prices have turned upward again after a
long decline.
Demand for housing and for everything that goes with it has
continued strong, the report adds.
Residential contract awards in
March

are

the

were

highest in history, 120% above

other

and

NEW

calculation.

a year ago,

all

these

markets

seen

not

the

only

of a rate of population growth and family formation
exceeding all earlier estimates, and of record incomes, the vet¬
erans' insurance refund and personal borrowing, but also the
benefits of progress during the past year or more in stabilizing

the

national

(1)

market

months there is
week, according to

many

this

metalworking weekly.

Steel

producers

are

million

tons

since

Here

feeling

unrelenting steel demand;
11

(2)

the

>•

over

the

preceding

and

quarter

having

Rescue"

Explanation

the business
explained by

applicability of this explanation at some times is indicated
by the rise in redemptions during bull market periods of the
past decade. Thus they rose sharply during rising-price years of v
1943, 1944, 1945, and 1946 (even the total net assets of the common
stock funds falling in the latter year); but fell during the 1947
bearish periods.
777 •' • :'7: '•
/•'
Consistent with the motivation of cashing-in on market bulges
ironic fact that frequently the funds with the best per¬

the

The,

the

York

New

and

Boston Stock Exchanges.^

experienced

highest

the

proportionate

correlation

redemptionr rises

strength has applied only in recent

years.

with

stock ..market
In the 1930s and early

accompanied by high rates of redemption,
climaxed by very high cash-ins during 1941.
This would warrant
the conclusion that a companion reason for the rise in the turn- '
were

With J. A. Ray vis Co.
(Special to The Financial Chronicle)

"■

•

New

Holders' Investing

v\-

•

base

the

stock

market

and

.v.

craze

is to broaden the

importantly

enlarge
form and

participation.

the

public's

The flexible factor is the
direction in
public involvement is taking place.- Unfor
the holders' above-cited cashing-in behavior, with the

which this increased

therefor, clearly indicate that this new
speculative rather than investment-minded.

reasons

market element
Selling out on
downswings, and switching from fund
to fund pursuant to actual or claimed better past-performance
records, are activities surely antithetical to the investment mo¬
is

either market bulges or in

MIAMI, Fla.—Milton D. Bern¬
Co., Inc.,

Langford Building.

tives—as long-term

holding for income, reliance
*

Joins Luckhurst

on expert

Continued

invest-

page

(Special to The Financial Chronicle)

BOSTON,
Walsh

Mass.

with

—

William

Luckhurst

R.
Co.,

NOT A NEW ISSUE

Inc., of New York City.

50,000 Shares
Established 1856

READING TUBE CORPORATION

H. Hentz & Co.
New

are

some

of the

force

And

Exchange

Exchange,

Board

(3) fearful of interruptions
on page

other

Orders executed

YORK

•

GENEVA.

investment dealer

' -7

the undersigned

Exchange

AETNA SECURITIES CORPORATION

Exchanges

DETROIT

your

;

Broadway

Bldg*

N. Y.

PITTSBURGH

SWITZERLAND

•

New York 6, N. Y.

Telephone Worth 4-6400
May 18,1950

CHICAGO

Inc.
Trade

Y. Cotton Exchange
NEW

back production

demand'last falL—about

* Continued

Cotton

111
N.

$1.87Vt Per Share

Exchange

York

New Orleans Cotton

and

B STOCK

Exchange

Curb

Chicago

Stock

York

New

reasons:

furious

York

Commodity

note of hysteria
"The Iron Age,"

full

CLASS
Price

Members

New

j."i

Attitudes the Crux

The broad over-all effect of the fund

tunately

stein is with J. A. Ray vis

have

7-V,,

Moseley & Co., 50 Congress Street,
members

records

1940s, bear markets

has been added to the staff of F. S.

strikes have set

upsurge

29 million tons in the past five years;

50%

back of shares is large-scale switching from one fund to another,,
following high-pressure sales persuasion and in the face of a dupli¬
cation of "entrance fee'* payments (the load) of 9% or, so.

(Special to The Financial Chronicle)

Operations Set at All-Time High Output

steel

stock funds actually

common

allegedly characteristic tendency of shareholders who have
"hung-up" at higher prices—in this case, 1946-bull market
buyers—to get out as soon as they find themselves "above water."

BOSTON, Mass.—Alan T. Shaw

prices, improving quality and design, and in general offering the

Steel

The "Above-Water

ORLEANS, La.—S. Gideon

fgF. S. Moseley Adds

kind of houses and household equipment that buyers want.

For the first time in

;

preceding quarter (to $37,130,000 from $42,occasioned by a sharp jump in redemptions,
from shareholders in the common stock trusts

household

influence

risen

formance

Steiner, III has become associated
with William P. Miles* Whitney.
Building.
He was formerly with
Steiner, Rouse & Co.-:'77;

equipment is forcing some
manufacturers to allocate their production.
Backlogs of unfilled
orders are huge.
Television sales are growing beyond any pre¬
vious

past

but

cars

accord¬
ing to the Dodge figures, and daily average awards in the first
half of April increased 12% over the March rate.
Demand for
refrigerators

place;

was

redemptions.

now

states, is the demand for consumers' durable goods.
Retail sales
of automobiles have broken all records for the season, with deliv¬
eries of popular makes again delayed, and as might be expected
some

taken

Exchange.

(Special to The Financial Chronicle)

expectations of the optimists, as far as spring busi¬
are being fully realized, and that in overall

had dared to hope.

have

It is believed by many experienced observers of
that the recent rise in redemptions is largely to ba

concerned,

terms the situation is

that

The

BOSTON, Mass.—John F. Hurst

predicted.

the

business

be helpful in

the

whole attained its

as a

historical high peak in the week just past and if output continues
at

•

trebled since the first quarter of 1949.

Da¬

Joins William P. Miles

before the walkout of Jan. 25, Chrysler's
production in the United States and Canada was reported by the

This

buy-backs

having

(Special to The Financial Chronicle)

long

For the last full week

agency

risky—particu-

the

from

176,000).

J. H. Goddard Co. Adds
;■

■

after

Ward's
Automotive
Reports
estimated
the week at 26,000 cars and 2,700 trucks.

output for

trust

repurchases) of the 42 open-end

declined

•

strike

are

;

the

of the trust principles and the favorable market atmosphere is it
that during the first quarter of 1950 the net sales (that is, sales

Street.

the highest

during the month, American Iron and Steel

steel

behavior

future

been

Production of steel in April totaled 8,196,050 tons,

output

certain

understanding the psychology ofj
fund participants and appraising the long-term changes in the!
securities markets occasioned by the continuing trust boom.
;
Quite surprising in the face of the great popular acceptance

own

111.—Daniel A.

about

basis of past performance

May

performance

from second quarter.

ages

over

larly because of the great changes in size and

ley, Elva M. Freeman, Thomas E.
McParland, and Charles B. Poindexter have joined the staff of
Bache & Co., 135 South La Salle

difficulties
added to shipping problems. In any case, it is certain the mills
will be busy most of the summer clearing away tonnage arrear¬

Wilfred

formerly

was

headed
his
in New York City.

CHTCAGO,

four major railroads and resulting traffic

and

managements

Inferences

(Special to The Financial Chronicle)

Strike

the

depression, in periods of minor reces¬
brief market breaks (as Sept. 3, 1946)
trust managers as well as their stockholders
exerted little unbalancing effect.
;
V

Four With Bache Co.

Domestic steel producers' order backlogs mount even

production is at

action

1929-33

investment ad¬

Toppell

thereto

company

production goes on without abatement
historical high level for the steel industry..

the

past periods; finding that while cash-ins were
during certain periods of the major

with Frank D. Newman & Co. and

areas.

value

this question, we

shareholders of investment trusts

MIAMI, Fla.—Jack Toppell has
opened offices at 3620 S. W. Tenth

been

immediately affected by the walkout continued to

operate limited freight and

Ex¬

(Special to The Financial Chronicle)

addition, thousands of workers had been

studied

Toppell Opens
Advisory Office

T„

made

In last week's column

sions

thrown

price equivalent to the break-up

of the underlying assets.)

ness.

big road diesels, while the railroads contended the
union dropped this demand. '
'
•
\
W-"■
About 160,000 non-striking employees of the struck roads

were

serious

Under the terms of settle¬

end.

ment, the union said that it modified its demands for

holders at

value of the shares, based on the market

New

Stock

Midwest

(The man¬

redemption feature imposes on the
open-end companies the obligation to redeem
their shares on the demand of their stock¬

changes conducting a general un¬
derwriting and investment busi¬

was
the announcement on Tuesday of this
six-day strike of locomotive firemen against five

major railroads had

and

the

series of articles inquiring into

datory

Blunt Ellis & Sim¬
of

by the fast-growing number of their shareholders.

later with

was

members

are

York

news

the

the second

the- present,
he has been
Lee Higginson Corporation

with

the goal of 60,000,000 employed "is no longer adequate to meet the
employment needs of the country."
week

the Uni¬

This is

and

potential repercussions on the securities market and the economy
resulting from exercise of the mutual funds' redemption privilege

Utility Equities Corporation and
rejoined the Stone & Webster or¬
ganization
in
1935.
From
1944

Employment

was

Mr.

versity of Virginia in 1924, after
which he joined Stone & Webster

forecast

By A. WILFRED MAY
The Mutual Funds, the Redemption Privilege,
the Investor
*

has become associated with Blunt
Ellis & Simmons, 208 South La-

Business Failures

J
The

(2049)

•

(2050)

The Commercial and Financial Chronicle i.

heavy

upward
vior

By RAYMOND RODGERS*

few

an entirely dif¬
calls attention to our 1

years ago,

selling

which

had

of inflation,

had

has

recent

run

post¬

For example, while

period.

climbed from

dustrial Production
160

•

less, after
long consider-

rency

the

gold

ation

dollar.

You

and

May, 1946,
to the level of 194 in Feb., 1948,
an
increase of 21.3%, the index
of 354 industrial shares
(1937=
(1935-9=100)

curities, canal
and

other issues

ment

which today

canonlybe
Raymond

Rodger#

our

and

men

own

it spread over a

their

investment

pro¬

lowed orthodox theoretical

any

few

you

ago,

years

"The * Stock
Prophet or Historian?"

lems,

Market;

Past,

Pitfalls

buy

Any one surveying the eco¬
nomic and financial developments

of the last ten years is inevitably
changing
conditions, torical
patterns.
Wartime boom
forced to the conclusion that the
they justified their role in the and
postwar depression are con¬
lessons of the past will prove to
financial world; to the extent that
sidered just as inevitable as war
they persisted in error and re¬ itself.
jbey the pitfalls of the future! fo^
Yet ; the
belated
postfused to recognize that "the old
those * too busy or too blind to
World-War-II readjustment which
order passeth and a new one takes
recognize the changed conditions
got
underway last spring' was
which prevail today.
its place," their investment funds
In recent
stopped by government interven¬
dwindled and they lost out in the
years, we have had a demonstra¬
tion.
^
tion on an accelerated basis of
competitive race.
Another well-known lesson of
the
age-old principle that the
History is replete with book, economic
history is that interest "certainties" of one generation
chapter and verse of developments rates
go up as inflation develops.
become the
"has-beens" of the
which changed the very future of
Declining prices and increasing next!
Truly, the economic cli¬
humanity. * Whether it was the interest
rates on high-grade bonds mate has
changed and the impact
"Admiral of the Inland Sea" at
were so characteristic of
past'in¬ and - lasting
aspects
of
these
San Salvador with his New World;
flations that it was standard in¬
changes are still not fully appre¬
Napoleon at Waterloo with his vestment
policy to sell bonds at ciated by many, especially in in¬
crumbling world; James Watt at the
beginning of an inflation pe¬ vestment circles.
Glasgow with his steam engine; riod and buy them back at muchIn Its two most fundamentglsis*'
lower prices as the inflation ap¬
or one of the many other men who
pects, investment of funds today
altered the very warp and woof proached its end.
is an entirely different problem
of
our
economic
than it was a few years ago; and,
The Decline in Interest Rates
fabric,
such
as
I indicated earlier, many in¬
changes necessitated basic read¬
In complete disregard
of the
vestors are "missing the bus" be¬
clear lesson
of
justment of investment policies.
history,-, in the
cause
they refuse to recognize

fervor"

both

tariffs

The

as eco¬

with

equal

farm

price support
protect industry.

responsibility
has

which

Jthe
for

assumed

stabilizing business activity is the
most far-reaching of all its new
in

and

the

respects

many

important. This new
sibility has been placed

respon¬

of social security

on
the
Administration by the "full" "Em¬

national scale for individuals

ployment Act of 1946." It is not

The principle
on

from

is the law of the land. In addition,

powerful labor organizations are

the land. In

using economic warfare to force
private industry to grant pensions
or increase
present pensions and

philosophy

insurance

extend "

partisan thing; it is the law of

short, with the social
which now prevails,
any
Administration
in
power,
Republican or Democrat, will re¬

benefits.

lax credit, increase spending, en¬
pri¬ gage in deficit financing and in¬
vately administered pension plans,' augurate relief" measures of all
create many new problems of a
kinds to prevent a business re¬

These plans, particularly the

social

economic

and

character.

lars

two

impact

billion

three

ulti¬

dol¬

seeking investment each

year

action

from

snowballing

depression.
The

lengths to which

ministration
business

into

will

the Ad¬

reaction

stop a
clearly

were

obvious.

They will affect the demonstrated
last
spring, and
labor market by reducing labor summer
when
spending
was
mobility. They will magnify the stepped
up
and
orders
were
social

problem involved in keep¬

ing those above age 50 gainfully
employed.
(With
a
sociallyminded government, and with a
population moving into the higher
brackets

an' accelerating

pace, the potentialities are fright¬
ening!) Their fixed costs will in¬

Future

his¬

So far

one.

"damn

roles

age

have

most

mate

Lessons

force him

unprotected

price

them

by protecting
competition!

market—the

months

two

large entitled,

de¬

are

climb-until

grams

Laws

They will vitally affect the money-

ference' Board

ing from these changes have been'
greatly complicated by the fact
that most of them have not fol¬

flamboyant financial
history. To the extent that they

Maintenance

stocks staged a persistent

ago!

the rise of Naz¬

abasement of the souls

signed to give security to retailers

upward

The investment problems flow¬

balmed in the

content
saw

Price

the recent Wash¬

common

reduction

part of the earth.

em¬

pages of our

adapted

devaluation and

tionary forces beginning to mate¬
rialize, and with profits declining,

You
cur¬

Incidentally, if

ing of the outTook, bought
turnpike
se¬

found

ning to falter, with powerful defla¬

have
ism in German, Fascism in
Italy,
the idea that common stock prices
and Militarism in Japan—and
you
had a big hand in ending them. always forecast business develop¬
You have witnessed with horror ments, or vice versa, take a look
and disbelief the rise of Commu¬ at the statistical study published
nism and its unspeakable enslave¬ by the National Industrial Con¬

^careful weigh¬

bonds

known.

ever

insoluble

protected market and sell in

government

the

100) dropped from
decline of 24.6%.

almost world-wide

aided.

right to

petitors from the consequences of
competition! Likewise, the Resale

likewise, did not

the Federal Reserve Index of In¬

tion and the worst depression this
seen

moral

and

war

two periods of infla¬

have

should

demonstrated by

form

almost

nomics throws light on our prob¬

doubt¬

the

problem. Our national preoccupa¬
tion
with
security is pointedly

one.

"in

not

large extent, security has become
a social rather than an individual

134 to 101, a
And, if that
\
Investment of funds has always first-hand
the
economic
impact
demonstration of the perversity of
been
a* serious
problem;
and, of two World Wars. Some of you
common
stock price behavior is
when the funds belong to others, participated in the
greatest stock
not sufficient, consider what has
investment becomes, in addition, market boom of all time and
many
happened since the middle of 1949.
a
of you have had first-hand
heavy
reexpe¬
With industrial production begin¬
rience with
4fiponsibility. 1

years,

security would
changes. To a

list

successful

and

proved

Equities,

continuation of low interest rates.

country

for

the

head

those

Despite

ington efforts to extend the anti¬
trust laws to give security to com¬

true

Advises investors to analyze political more than economic
trends, and predicts "no devastating depression." Foresees

"prudent

The

beha¬

farms

the cards."

problems involved, it is only fair
and
equitable
that the
farmer

Security

for

foreclosures

investment

only losses to show for their pains

prevailing "directed economy" and quest for social security
factors changing investment trends. Cites
increasing role of i
government in housing, in agriculture, and in using measures
for stabilizing business, as matters
affecting investment, along
with chronic budget deficits and
"managed money techniques."

men" of other

programs.

must'

all

in this

The

with

periods

past

and

government,

slavishly
to
the
buying policy,

adhered

bond

Rodgers, maintaining investment today is
a

pressures, interest
so
unusual that

was

who

Professor of Banking, School of Commerce, Accounts
and Finance, New York University

Dr.

reckoned

liquidation of long-term
issues by insurance
companies and other institutional
investors, with the exception of
commercial banks.
Despite these

Investment Trends

ferent problem to that of

government

New Factors in

Thursday, May 18, 1950

price rigidities—one of the
most serious economic problems
of our time. (It will be more dif¬

crease

ficult

for

producers

reduce

directed to the weak spots in the
controls

and when many other things were
to stop the long overdue

business

implications,

over-all studies of costs and

nomic

no
eco¬

consequences
have been
As a result, many of the

made.

private pension plans
stituted
social

not

and

And

it
of the

and postwar inflation

(using

war

been

demand.)
above and many

the

reaction.

they did when only 8.1%

declining
Despite

consumer

successively
re¬
times, when reserve

done

cost of

serious

credit

consumer

were

requirements were reduced three
times, when margin requirements
on
security loans were reduced,

their costs and prices to stimulate

other

when

economy,

laxed several

living
wiped

stop

the yardstick) has

out,

whereas,

the

World War I reaction, which ran
its course without benefit of gov¬
ernment

until

intervention,

39%

that

continued

inflation

had

been eliminated.

(

as now con¬

sound

represent

economic

planning—

but you can be certain, they are

permanent!

Monetary and Fiscal Management
Another
we

condition

new

have-

now

managed

with all that that

that

money

implies. In this

World

Economic Impact of World Wars
Great

has been the economic

travail of other years,
of

time

our

♦Talk

before

Continent
tion

the

Conference,

Bank

Auditors

been

far

know

you

First

not behave

the changes This

have

Most

greater.

Northern

National
and

inflation

nessed

the

Associa¬

increases

prices

and

offer to sell

long

NOT A NEW ISSUE

y y

Corporation

100,000 shares Common Stock
•

(P*r value $5

p«r

share)

■

and

■"

;

time, Common Stock

;'-yyyy

■

Price $5

$25

per

difference

one.

directed

managed economy, the

of the Prospectus

Underwriters

as may

increasing role of
government in housing. Even con¬
servatives feel that decent hous¬

ing

less

disease,

expensive

crime

flow from

and

slum

Another

than

the

which

unrest

y
fundamental
change is the responsibility which

has

government

assumed

for

agriculture. While this solicitude
for

the

farmer

evidenced

such as cheap credit,
disaster relief, soil conservation
and agricultural research, by far
the most important one is the as¬
sumption
of
responsibility
for
many ways,

maintenance

income.

farm

this will take—whether it will be

results. Furthermore, it is a con¬
tinuous thing. In contrast, in a
'

do not know what form

through

directed economy,

parity

Brannan

market

price

plan

the

full

aimed

be obtained within any State from such of the
regularly distribute the Prospectus within such State.

Lehman Brothers

employment.

management

is,

fact,

the

major devices used in
directing the economy.

Closely allied with money

support

agement

public

debt

man¬

manage¬

ment by the Treasury and mone¬

tary authorities, another
dition with
reckon.

which

Our

many

ket artificialities
debt

new con¬

investors

must

abnormally low in¬

terest rates and

are

management

other

mar¬

fruits of the

policies.

passing, it might be well to point
out

that the present debt and in¬

policies will, in general, be

continued

the

foreseeable

Continued

subsidies,

page

fu-

some

76-PAGE

with differ¬

world

303 THREE TREND-

this

times,

force.

and

short,

not

does

intervene according to any formal

there

certain

response

"Five-Year

America,

phases

nonetheless,
the

directed

with

than

just

change

from

imagination,

markets

for

have

his

the

—

control

government will
both

marketing. Drastic and repug¬
as such regulation would be,

the
now

the

inevitable

the

result

price
maintenance
policies
being followed. Regardless of
methods
employed by the

government,

can

rest assured

to
Republicans
in
Washington—the following basic
changes in our economy can be

tained at levels much higher than
demand!

for granted.

manent

and

festations

They

are

not

transient

the

new

per¬

mani¬

orientation

that

farm

prewar,

decline

prices

income

will

main¬

regardless of supply and
This
in

and

means

that

agricultural
consequent

FOLIO OF

SecuSUbf Ckasitl
Current issue

visualizing 21 months' market action
Send $1

NOW for Folio CF-518

(For limited lime to

new

readers only)

production

nant

seems

"Acquaintance'- Offer $1

products,
that government will

means

direction

scheme

new

expediency. If this is to be done—
and every indication points in that

ernment and economic

a
gigantic problem in bal¬
ancing supply and demand at the
price levels dictated by political

and

fundamental change in our politi¬
cal thinking — and I mean far

have

have been repeated often
enough or have persisted long
enough for a new pattern of gov¬

activity to

basis,

takeh

Money

not

instead

goal % of

one

stabilizing

management

toward

but

know that the farmer will be pro¬
tected. As he has largely lost the

economy

may

Goldman, Sachs & Co.

the

I remind you that

the government
acts; sporadically, or shall I say,
erratically.
It intervenes in the
economy at different places,
at

Democrats

May 15,1930.

may

money

directed
dollar

terest

must accept

responsibility for the

our

conditions.

v e r

While

become evident. Unless there is

A copy

and

new

government takes full charge and

Plan"

share)

per Option Warrant
purchase one share

con¬

between

managed economy and

While

(Represent the right to purchase, without limit
to

and

plan, but largely in
political pressures.

Option Warrants to Purchase 100,000 Shares Common Stock
as

deal

com¬

mean,

live in a directed
there is a great

Now,

ent

PHce $24.25 Per Share
'■

economy.

Closely allied to social security
is the

connection,

different

offering is made only by the Prospectus.

Atlas

today's investment experts

tend—is that

Increasing Role of Government

the

change "with

contend—and

must

was very

solicitation of any offer to buy securities.

basic

most

which

serious spiral between wages and

nor a

conditions.

new

The*

remarkable

prices. In addition, there

these

postwar period wit¬

sharp

modity

Mid-

Comptrollers,

This announcement is neither

interest

according to schedule.

all the

was

because

Detroit, Mich., May 8, 1950.

The

War

rates remained low and bonds did

sharp

product

wholesale

Full year's subscription $25 includes
12

Monthly Security Chart Folios,
Cycli-Grapbs & Wa ll Chart

SECURITIES RESEARCH CORPORATION
141 Milk

Street, Boston 9, Mas#.

Volume 171

Number 4908

The Commercial and Financial Chronicle

(2051)

New Issue

"•

$57,775,000

City of Philadelphia, Pennsylvania
/

3%, 2Vi%, 2% and WtP/o Serial Bonds

Dated June 1, 1950, Due
January 1, 1951-2000,

as shown below. Coupon Bonds in denomination of
$1,000, registerable as to principal only and
exchangeable for fully registered bonds in the denomination of $100 and its
multiples.- Coupon and registered bonds of the same
loan and maturity
interchangeable. Principal and interest (January 1, 1951 and
semi-annually thereafter) payable ■
at the office of The
Philadelphia National Bank, Fiscal Agent for the City of Philadelphia.

Interest Exempt, in the opinion of counsel named
below, from Federal Income Taxes
under

Legal Investments, in
in

our

Existing Statutes

opinion, for Savings Banks and Trust Funds

Pennsylvania and New York

These Bonds, authorized for Water, Sewer,
Refunding and various municipal purposes, in the opinion of counsel named
below, will, when executed and
delivered, constitute valid and legally binding general obligations of the
City of Philadelphia, and the City is obligated to levy ad valorem taxes
upon
the taxable property therein, without limitation as to rate or
amount, sufficient to pay the principal of said bonds and the interest thereon. The
author¬
izing ordinances provide that the principal of and the interest on the Bonds will be
payable without deduction for any tax or taxes except gift, succes¬
sion or inheritance taxes, which the
City of Philadelphia may be required to pay thereon or retain therefrom under or
pursuant to any present or
future law of the Commonwealth of
Pennsylvania, all of which taxes, except as above provided, the City of
Philadelphia assumes and agrees to pay.

AMOUNTS, MATURITIES, COUPONS AND YIELDS
Due

Amount

Jan. 1

;

1,443,000-

Coupon

1951

494,000

1,443,000
■i.

Prices

1952

1953
1954

1,443,000

1956

1,443,000

Amount

Coupon

.95

1,443,000

1961

1962

$2,886,000

1971-72

2V*%

4,329,000

1973-75

2'/4

3,678,000

1976-78

3,354,000

1979-81"

2'/4

3,354,000

1982-84

21/4

2,236,000

1985-86

21/4

1.90

1,443,000

1.50

1.60

1,443,000:

1959

1.70

3?-:

1.95

1964

3r'v

2.00

1965

1,443,000

1.40

1963

1,443,000
1,443,000

1.30

1957

1966

2.05

5 $X-i:

2.10

1,443,000

1967

1968-69

1970

2 y4
to be

Price

2.20%
100

2.30

2.35
2.40

2.45 v

2,236,000
i

2.15

1987-88

2.45

1989-94

2.50

2,958,000

2.20

1,443,000

Coupon

4,833,000

2.15

2,886,000

(Accrued interest

1995-2000

11/2

2.50

added)

offered subject to prior sale before

are

and received

Jan. 1

1.85

1,443,000

Yields

Amount

1.75%

1.15

Due

Yield

1958

The above Bonds

1960

1,443,000

Jan. 1

$1*443,000

OR PRICE

Prices

1.05

1955

to Yield

.80%

1,443,000;

Due

or after publication of this
advertisement, for delivery when, as and if issued
and subject to the unqualified approving joint legal
opinion of Messrs. Townsend, Elliott & Munson

and Messrs.

The National City Bank of New York

Morgan, Lewis & Bockius, Philadelphia, Pennsylvania.

Halsey, Stuart & Co. Inc.

The Northern Trust Company

Lehman Brothers

The First National Bank
of

Stone & Webster Securities
Corporation

Blyth & Co., Inc.

Blair, Rollins & Co.

Portland, Oregon

The Philadelphia National

Phelps, Fenn & Co.

C. J. Devine & Co.

Incorporated

Goldman, Sachs & Co.

Stroud & Company

Salomon Bros. & Hutzler

Estabrook & Co.

Incorporated

R. W.

Pressprich & Co.

Paine, Webber, Jackson & Curtis

Braun, Bosworth & Co.

Mercantile-Commerce Bank and Trust Company

First of Michigan Corporation

Incorporated

Hornblower & Weeks

Barr Brothers & Co.

Kean, Taylor & Co.

L. F. Rothschild & Co.

Roosevelt & Cross

Stranahan, Harris & Company

Harris, Hall & Company

Incorporated

(Incorporated)

Laidlaw & Co.

Eldredge & Co.

Dolphin & Co.

Incorporated

Bacon, Stevenson & Co.

Incorporated

A. Webster Dougherty & Co.

Hallgarten & Co.

Weeden & Co.

City National Bank and Trust Company

Mackey, Dunn & Co.

City, Mo-

Hannahs, Ballin & Lee

Schmidt, Poole & Co.

Fidelity Union Trust Company
Newark

Wm. E. Pollock & Co., Inc.

Incorporated

Butcher & Sherrerd

Chas. E. Weigold & Co.
Incorporated

Dick & Merle-Smith

Incorporated

Kansas

B. J. Van Ingen & Co. Inc.

The National State Bank

Newark

Francis I. duPont & Co.
V

Rambo, Close & Kerner

Hayden, Stone & Co.

Singer, Deane & Scribner

The Illinois Company

G. C. Haas & Co.

Incorporated

Bramhall, Barbour & Co., Inc.
J. W.

Sparks & Co.

Arthur L.

Walter Stokes & Co.

Wright & Co., Inc.

Walston, Hoffman & Goodwin
May 15, 1950/

G. H. Walker & Co.

F. S. Smithers & Co.

Wurts, Dulles & Co.

Moore, Leonard & Lynch

Woodcock, Hess & Co., Inc.

DeHaven & Townsend, Crouter & Bodine

Coffin, Betz & Co.

Aspden, Robinson & Co.

Glover & MacGregor, Inc.

Sheridan Bogan Paul & Co., Inc.

Green, Ellis & Anderson

Harrison & Co.

jT1

Thomas & Company

Janney & Co.

R. C. Schmertz & Company, Inc.
R. H. Johnson &

Company

The Commercial and Financial Chronicle

(2052)

day be another collapse of
banking system- such as oc¬
curred in 1933. Today this ques¬
some

the

Banking in the Tears Ahead
Lecturer in

cast

the

written
years

"The

ago,

bank-

g business
is defini t e 1 y
of

pects

for

with

any

view

long-range

the

Sherman

The

■■■.

the

ly to determine future banking
developments, even if our conclu¬
sions must of necessity be pro¬

Adams

commercial

bank

disappear.

banks

The
maintain

present

low

ability
even

earnings

their

Seventeen

ques¬

tion."
In

flat

was

the

short

which

years

1933,

have

elapsed since that gloomy
prophecy was written, commer¬
cial loans of the banking
system
have more than doubled, the vol¬
ume of bank
deposits has tripled,
and bank earnings have risen to
around

three

times

1938.

the

picture

the

would

the country
six
insolvent

hopelessly
others

the

whether they

know

did

were

solvent

culmination

was

150 years

the

not

not. This

of trying to develop

banking system that would be

both safe and vigorous, a banking

that would

system

have fore¬

American
be

March,

back.

bank in

was

most

and

its

every

banks

1933,

closed. One out of every

was

Who could possibly
how

level

ago,

years

the United States banking system

nancial needs of

banking

transformed

without periodically going to

omy

during these past 12 years?
In¬
deed, can you imagine anyone
who would have the temerity, the
colossal nerve, the brazen effront-

the fi¬
growing econ¬
serve

outlook for banking today,

range

therefore, the first question that

*An address by Mr. Adams at the An¬
Convention
of
the
Ohio
Bankers

occurs

nual

Association, Columbus, O., May 11, 1950.

to us,

need

naturally, is whether
fear

that

there

may

appears as

which

mistakes

worst

avoided

periods. Despite booming business
and

rising

prices,

bankers

gen¬

erally have adhered to conserva¬
tive

policies. They

lending

avoided

the

sort

have

happy-go-

lucky loan expansion which pre¬
the collapse of the 1930s.

ceded

The average

quality of bank loans

and the pref¬
corporations for

working capital from
security flotations instead of bank
factors

These

still op¬

are

erative, though their effects have
been obscured in recent years by
the

Their de¬

postwar inflation.

previous period in
In

addition,

our

cents

per

banks, and
able

within

five

element

strength,

existence

the

It is understood that the

Another

years.
of

fore, there is absolutely

send

interested

no reason

Stock

Detroit

stocks

York

44 WALL STREET

O'Donnell & Co., Penobscot

conservative
policies they have followed during
the

two

past

apparently

decades.

have

long last,
how to maintain a strong, stable
banking
system.
This
is
an
achievement of prime importance
not only for the future of bank¬
learned,

ing but also for the future sta¬
bility of our economy as a whole.
can

arrive

some

with

respect to the
future trends in bank loans, in¬

vestments,
deposits, and earn¬
ings? What each of you is es¬
pecially interested in, naturally,
is what will happen to your par¬
ticular bank. In part, of course,
will

depend

only

upon

you are

local fac¬

Nevertheless,

posi¬
your

bank

will

fected to

very

important extent
Available

national

also

af¬

trends.

that
move

closely parallel fashion
banking trends for the nation

whole.

very

bank

loans?

also

including

traded

171

the

New

Stock and Curb Exchanges—R.
Detroit 26,

*7 Impact
Motion

C.
Bldg.,

Mich.

of Television on
the
Picture
Industry —- An

Front Street. New York 4, N. Y.

Railroad Debt Changes—Analy¬

way,

115 Broad¬

New York 6, N. Y.

Securities of the United States
analysis of the movies and TV— Government, including its agen¬
H. Hentz & Co., 60 Beaver Street,
cies and the International Bank
New York

Legal
vidual

4, N. Y.
—

Indi¬

of New York

studies

bank stocks

City

now

investment

Bank

for

Massachusetts

legal for Savings
in

the

State of

Massachusetts
Laird, Bissell &
Meeds, 120 Broadway, New York
5, N. Y.
—

1949 Yields of 159 Mutual Fund

Investing

Leading

Companies

Co.,

Yonkers

Open-End

Price, $1
Suetendael

—

copy—A. O. Van

per

South

Broadway,

2, N. Y.

Reconstruction

and

Develop¬

ment—1950 Edition—First

before

the

Boston

Investment

Club—Geyer & Co., Inc., 63 Wall
Street, New York 5, N. Y.

N. Y.

Switch

Opportunities

1 Wall

Street, New York 5, N. Y.
available

Also

issue

the

of "Gleanings"

curred in

the

industrial stocks used in the Dow-

Jones

Averages

and

over-the-counter

Television

Radio

Manufactur¬

ing so-called television stocks—
Dreyfus & Co., 50 Broadway, New
York 4,

N. Y.

thirty-

the

industrial

•

American

;

•

Broadcasting

tories.

& Co., 61

Broadway, New York 6,

Y.
Also

available

are

circulars

this advertisement appears

matter of record

only.

ISSUE

business, I thinly
'that a large

aware

747,500 Shores

oc¬

commercial loans since

other

words,

the

1QIVISI0N & RADAR CORP.
COMMON STOCK

ex¬

pansion of bank loans to business

largely caused
peculiar

was

SMALL

BUSINESS

conditions

boom.

war

Have you a financial problem?

Inquiries invited.

Could

you

use

additional capital?

Consultation without obligation.

The
to

by abnormal
to the post¬
'
7

question naturally arises

whether

this

big,

postwar bulge in

our

will

folios

Jacquin, Bliss & Stanley
Members New

York Stock

turn

Business

Exchange

clined
*

44 WALL STREET

NEW YORK

Telephone: DKgby 4-7140

S, N. Y.

Price 40 cents per

disappear with

port¬
a

Tellier

re¬

normal, conditions.

ESTABLISH tD 1931

loans have

Some

paying off bank
debt out of earnings; others are
refunding their bank loans with
are

Co.
'

already de¬

than 10% below their

peak at the end of 1948.
businessmen

beautiful,loan

Broadway

Co^—

Circular—Carl M. Loeb, Rhoades

All of fhtst Shares having been sold,

NEW

war can be attributed
directly
higher commodity prices and
restocking of business inven¬

round-up of comments on various
issues..
7 7 .V

we go

part of the increase that has

current

containing

Let us consider brief¬

all

are

Sug¬

the

—

study of price move¬
ments—Francis I. du Pont & Co.,

gested by

Over-the-counter Index—Book¬

stocks used. In the National Quo¬

three main categories of
loans, namely, loans to busi¬
ness, real estate mortgages, and
consumer
loans.
V '

Boston

Corp., 100 Broadway, New York 5,

ers—Comparative stud y of 18
Outlook for Insurance Stocks- companies in "the electronic field
Reprint of talk by George Geyer and a review of factors influenc¬

five

bank

NEW YORK 5, N. Y.

for

sis—Goodbody & Co.,

showing an up-to-date com¬
parison between the thirty listed

During the past

roughly doubled. Where do

Telephone: Dlgby 4-7140

the deferred
housing has

demand

met.

been

farms mentioned tvill be pleased

let

to
•

most

However,
wartime

mortgages.

*—

here to the generally

Ipanks, both in Ohio and
throughout
the
country,
have

Stock Exchange

Over the
remainder of this year, the de¬
mand
for mortgage
money will
undoubtedly remain very strong.
estate

real

Detroit

the

Exchange

As for loans to

Member* New

Loans

Mortgage

Our second category of loans

List tation Bureau Averages, both as
to yield and market performance
issues over an eleven-year period—Na¬
York tional Quotation Bureau, Inc., 46

Exchange

traded

to fear another banking collapseprovided bankers and bank char¬
tering authorities continue to ad¬

parties the following literature:

mercial

Jacquin, Bliss & Stanley

growing economy may
too unfavorably with
present levels.
in

ing

not compare

the

system of bank deposit insurance.
; As of the present time, there¬

First, what is the future outlook

may

the total

future years,

dollar volume of business borrow¬

Recommendations and Literature

than four-fifths

of these holdings are due or call¬

from here?

Price $1.00 per

commercial loans

portance of
decline in

there¬

relative im¬

fore, that even if the

Dealer-Broker Investment

comprise more than half of the
earning assets of all commercial

for

Share)

perhaps conclude,

can

Historically, the rate
pressing influence upon commer¬
of new family formation during
cial loans may be significant dur¬
the past few years has been ab¬
ing the years ahead.
normally high. In the compara¬
On the other hand, when we
tively near future, the rate of new
consider the wage increases which
family formation must decline at
have
occurred
during the past
Continued on page 15
decade and the strength of the

five years total loans of all com¬

Value

history.

Outlook lor Bank Loans

COMMON STOCK

will drop to prewar levels.

loans

know, United

as we

with

(Par

that the dollar volume of business

concen¬

obtaining

States Government securities now

show
conclusively
banking trends here in Ohio

CORPORATION

such

due

increasing

logical to expect

it does not seem

today is far stronger than at any

BUSINESS MACHINES

loans

the

of business

loans.

have

bankers too

And

should

never

figures

58,612 Shares

commercial

been established.

of record only.)

trend

downward

long-term

banks

the

individual

matter

activity.

prices and
There was

talk at that time about the

new

tors which

business

have

avoided

tion to analyze.

(All of these Shares having been sold, this advertisement

much

error

that

OFFERING COMPLETED

commer¬

little im¬

provement from their depression
lows in spite of fairly substantial

erence

conclusions

long-

war

very

they made prior to 1930, the
of chartering thousands of

have

Now,
the

consider

before the

loans showed

of industry

pieces.
When

call that

course,

1933

Progress Since

In
fact, it may be relevant,
though not very pleasant, to re¬

cial

prices or
production costs. Hence,

to prewar wages, prewar

prewar

tration

added

visional.

grantor of loans to business

may

seen

shape
of the
whole and

future

analyze the factors that are like¬

of course, that
will depend

banking picture and to attempt to

earnings.
function

the

take

pros¬

expansion

The fact is,

degree of accuracy. Nevertheless,
it seems to me that it is definitely
worth while for us occasionally to

void

in; banking,

this cannot be predicted

1938:

American economy as a

only

very

trying

wide margin for

must allow a

upon

was

future years.

over

factors

error

the future of banking

banking
which

that

forecast future trends

error.

outlook for

you

aware

commercial loans

repayments

fatal

their
assure

sound

thorities

presume

long-term financing. In all prob¬ labor movement in this country,
ability there will be more-such it is difficult to imagine a return

increases in commodity

financial condi¬
tion. During the past 17 years,
state and Federal supervisory au¬

ing is "The Outlook for Banking."
I

Condition

Sound

present time the Ameri¬

mentally

ing business? My topic this morn¬

much

previous times because
should close again,

banking system is in funda¬

can

at any time to
predict the outlook for the bank¬
to

ery,

banks

Banking

opposing monetary and credit controls.

Only about ten years ago, dur¬
ing the period before the war, it
was apparent to almost everyone
that the
banking business was
going to
pot. Here, for
example, is a
typical
fore¬

the

At the

ably satisfactory earnings. Criticizes bond price pegging. Urges
on

was

the
government
would
in
all
probability take over the banking
industry.
/
" '
*■" %

costs, most banks should be able to continue to show reason¬

easy

significant than

sound condition and no
depression, if caution is
increase in bank loans,
secnrity flotations. Looks
for government financing to expand banks' secnrity holdings,
but contends despite low interest charges and high operating

far

Economics, New York University

Asserting present day banking is in
collapse need be expected even in a
exercised, Dr. Adams predicts some
despite preference of corporations for

bankers

tion

By E. SHERMAN ADAMS*

Thursday, May 18, 1950

New York 4, N. Y.

Telephone Dlgby 4-4500

Volume 171

Number 4903

The Commercial and Financial Chronicle

...

(2053)

Y:'f ■'Goodrich. -Rubber; Co.: jand^ Na-i,
tional Biscuit Co.

■

•

North

From

Co.,

407

Eighth Street, St. Louis 1,

Mo.

available

Also

circular

Wagner Electric Corp.
*

Mills,

Botany

Bldg.,

Union

Philadel¬

Gas

—Analysis—Vilas

other

representative of

of the railroad brotherhoods.

one

to introduce the brotherhood

him.

pulled out

Jones &

Lamson Ma¬

some

papers

Taft first

John L. Lewis at the head, the CIO was at the zenith of its power,

he based his whole campaign on opposition.
"I

into his

and said it

was

his

for

Public

Central

Utility

Corp.,

Inc.—Study—F.

Co.,

S. Yantis &

South
Chicago 3, 111.
135

Salle

and

ever seen.

asked

for

sheepish

any

It is

right

man

Broad

Street, New York 4, N. Y.
Delaware, Lackawanna & West¬
1st "A" 4s of 1993—Memoran¬

ern

dum—B.
25

Broad

Pizzini

Street,

Co.,

New

Inc.,

York

Y.:;

East Tennessee Natural Gas Co.

—Circular—Fridley & Hess, First
National

Bank

Bldg., Houston 2,

Tex.

Greer Hydraulics Inc.—Circular
—B urnham

Co.,

Broad

Street, New York 5, N. Y.
I

Howard Smith Paper Mills Ltd.

—Analysis—James Richardson
v

Sons, 367 Main Street, Winnipeg,
Man., Canada, and 80 King Street
West, Toronto, Ont., Canada.
•

International
cular— Sutro

Paper
Bros.

Co.—Cir¬

Co.,

120

Broadway, New York 5, N. YV

-•

Kaiser Aluminum & Chemical
Corp.—Circular—Kebbon, McCor.

mick

Co., 231

South La Salle

provided

ducks

who

of.

.-'Tv

::1

leading labor

time,

government spending which more than takes those increases

in the ideologies

;

account trips abroad with their ladies and pose as

authorities

world affairs.

On the domestic front, for example,

will find senile Bill Greene yapping in support of the FEPC,

you

the Federation's

propaganda machine doing the

ination.

thing, when

same

racial discrim¬

A. F. of L. unions—a lot of them—practice iron-clad

Only recently the railroad firemen's union lost a case be-

fore the Supreme Court

growing out of its freezing out of Negroes

ff';'V.;.,

in the South.

\ *

Now, Bill Green, along with other senile old men in the Fed¬

moving towards

eration leadership, are

\
:

deter¬

are as

A. F. of L. have been steadily
with the CIO they have come to

make expense

been

Those who are in the business of

overwhelming majorities.
man in

the proposition that he is the ablest

leadership but who in the fraternity of the game, must be taken
care

CIO," Bob

nominated in the

in taxes.- Along with the CIO they have come to be mixed
now prevailing in our government's conduct
foreign and domestic affairs with which the American worker is
not the slightest concerned but which permit the labor leaders to
up

cushy jobs for intellectuals and labor lame
shunted aside in the struggle for labor

some

have

the

was

away

have

The Congressman's defeat had been

paign, particularly to get Bob Taft in Ohio; the union is a part of
a railroad brotherhood "political action committee" to serve with
related committees from the CIO and the A. F. of L. All told, they
have

year.

demand increasing wages for the workers and at the same

it voted for the Taft-Hartley Act. Assess¬
being levied against its members to carry on this cam¬

are

commentary

don't

Anyway, the railroad brotherhoods, long the most influential

of the Congress because
ments

saying in that

among ail labor, and the
drawn into the CIO camp. Along

labor to try and eliminate more than two-thirds
V

and

group

ley Act which does not apply to this particular
railroad brotherhood in the slightest.
Never¬
theless, it has joined in the fight of organized

Carlisle Bargeron

Lewis

the Senate and genuine but can't get votes.

called for because he voted for the Taft-Hart¬

Stern,

like John

primary and elected in November by

desk,

election

the

don't

went around Ohio

his

The brotherhood representative

about

looked

Street,

Dayton Rubber Co.—Circular—

Herzfeld

defeat

his opponent.

majority of Congressmen who made it
Only the pussyfooters seemed to fall as its victims. Bob
aroused the attention of the country when in 1938, with

issue.

representative to

representative stated

To be against it and all that it stood for was a suc¬

cessful issue for the great

tion that the railroad brotherhoods had called

chine Co.

♦

came into being, there were members of
Congress who would not permit its representatives to come into

interesting, indeed, that the brotherhood rep¬
resentative would be seeking his assistance
because just that day it had come to his atten¬

memo¬

history.

Long after the CIO

He wanted to

the Congressman reached

case,

available

this

soon

161 Devonshire Street,
Boston 10, Mass.

Inc.,

American

/;•';/ v':*.

Inc.,

I knew the Congressman and was glad >

ranks.

Co.—Memorandum—May & Gan¬

randum

ij? fools to permit the CIG to lead them up the political blind alley
which is just what the CIO is doing. The A. F. of L. has long been
^
an influence in American political life.
It didn't completely have
its way.
But its influence is indelibly stamped upon modern

get this Congressman to vote against a particular bill which the
railroad brotherhoods figure would cause unemployment in their

Company

Brown & Sharpe Manufacturing

Also

,r-

day I walked into a Congressman's office with

Hickey, 49
Wall Street, New York 5, N. Y.

their office.
The

Inc.,

phia 2, Pa.

non,

By CARLISLE BARGERON

Co.,

and

Exchange

Brooklyn

Inc.—Analysis—

Byllesby

Stock

;

*•

Washington
AheaA of the News

Inc.—Circular

Anheuser-Busch,

—Dempsey-Tegeler

hood representative what he thought of his experience ahd he said
he thought the brotherhoods and the A. F. of L. were damned

r;<4

political and an ideological rather than

with the CIO, a

a merger

labor movement.- If this

mined

other segment of American life in pushing to the top
perhaps, different from many of their counterparts
in private industry to the extent that they believe in taking
care of their casualties.
A fellow who, for example, has lost his
as

any

but they

are,

union leadership may

getting

merger

happens, the American people had better watch out.

believe will be bad for the latter. ^

job in the government.; Wholesale jobs for fallen com¬
the embassies abroad. We have

long had military and naval and commercial attaches with these
embassies. The labor heirarchy has now sold the proposition that

Joins Clifford

V"":

Joins Whiting, Weeks

Murphy

' (Special to The Financial Chronicle)

(Special to The Financial Chronicle)

PORTLAND,

BOSTON, Mass.—William R. W.

Maine—Mortimer

prominent in foreign governments there should be
labor attaches to interpret them. This has worked tremendously
to relieve the pressure of rivalry among those who aspire to lead

M. Pinansky

the workers here at home.

with F. L. Putnam & Co.,

has become affiliated; Fitz
with Clifford J. Murphy Go., 443

After leaving

;

be assured of support from his comrades in

rades have been developed among

with labor

will then be a case of the people against organized labor which I

Congress Street.
'

Boston.

the Congressman's office I asked the brother-

Whiting,

with
53

Stub5s

He was formerly
"
'
Inc., of of the New
rv-\ \Exchanges.
,

state
„

Weeks

street, members

York and Boston Stock
'

•'

;•>

;

Street; Chicago 4, 111.
Marshall Field & Co.—Circular
—A.

Becker

La Salle

—

Co., 120 South

This announcemerit is neither an offer to
The

Mexican
Ltd.

Street, Chicago 3, 111.
Light

Card

Power

memorandum

—

way,

120 Broad¬

■"..;:

■ ■

;

V;'--V.'' VV-

$58,000,000

Northern New England Com¬
pany—Analysis—Ira Haupt & Co.,
Ill Broadway, New York 6, N. Y.

Ohio Edison Company

Mutual

Pacific

Company

—

Life

Report

'•

;

—

"'**.*

...

„

i. ' *

•.

Bonds 2Vs% Series of1950 due 1980

First Mortgage

Edgerton,

Dated

May1, 1950

1980

York

New

Commerce

land 14,

Y.,

Bldg.,

Interest payable May 1 and Xovember 1 in

;)

Wm. J. Mericka & Co., 150 Broad¬
Union

•

■

Stoker Corp.—Circular—

Riley

way,

•*'

•

Insurance

Wykoff & Co., 618 South Spring
Street, Los Angeles 14, Calif.

New York City

and

Cleve¬

Ohio.

Riverside

Cement

Co.—N

e w

analysis—Lerner & Co., 10 Post
Office Square, Boston 9, Mass.
♦

;

New York 5, N. Y.

: Mexican Railways — Analysis—
Zippin & Co., 208 South La Salle
Street, Chicago 4, 111.

solicitation of an offer to buy any of these Bonds.

nor a

New
■

York Hanseatic Corp.,

sell

offer is made only by the Prospectus„

Co.,

Also available is

Price 102V4% and Accrued Interest

brief review

of the Cement Industry,
•

Robertson

Company—

Analysis—Kiser,
Cohn
&
Shumaker, Inc., Circle Tower,
In¬

dianapolis 4, Ind.

Copies of the Prospectus may be obtained from only such of the undersigned as may legally
these Bonds in compliance with the securities laws of the respective States.
'•

Simmons

v ;v-

.•

••

..v

Company—Memoran¬

dum—A. M. Kidder &

"...-v

.v,:^ "

••

'-u

f'.«

v.'-

offer
.
'•

Co., 1 Wall

Street, New York 5, N. Y.

MORGAN STANLEY & CO.

U. S. Thermo Control—Analysis
—Raymond
&
Co.,
148
State
Street, Boston 9, Mass.

Walt Disney Productions—Anal¬

ysis—Batkin & Co., 30
Street, New York 4, N. Y.

BLYTH & CO., INC.

'■■■

■

...

;:;

;■■■■

EQUITABLE SECURITIES CORPORATION

DREXEL & CO.

Broad

GOLDMAN, SACHS & CO.

LEHMAN BROTHERS

HARRIMAN RIPLEY & CO.
,

Gardner

Wells

"... :

Co.—Circular

Incorporated

&
i

—Swift, Henke & Co., 135 South
La Salle
S.

turing

Street, Chicago 3, 111.
White

Dental

Co., 25 Broad Street, New York 4,

LEE HIGGINSON CORPORATION

W. E. HUTTON & CO.

Manufac¬

Co.—Bulletin—Gruntal

N. Y.

SMITH, BARNEY & CO.
May 18,1950.

■

.....

;•

...

The Commercial and Financial Chronicle

(2054)

v"-V.

Federal Monetary

ruined and altogether undone by
their own instruments, govern¬

Policy

ments of their

making, and a
press of which they are the pro¬
prietors. Perhaps it is historically

By WALTER E. SPAHR*
Executive Vice-President, Economists' National Committee

true that

Monetary Policy

Professor of Economics, New York

University

order of

perishes

own

society

by its

save

ever

hand."

own

Our Currency Irredeemable

Dr. Spahr,

cheap
as

asserting

monetary policy aims at

our

and

easy

The

attacks present irredeemable monetary system
and as depriving people of power to exercise direct

dishonest

and

men

purse.

who

needs

by the responsible
of

women

wish

variety

our

currency

be understood

Holds our irredeemable currency
system opens gate to Socialism and yields to demands of selfish
pressure groups, in addition to fostering destructive disease of
inflation. Contends, because of our money system, we no
longer have a healthy economy.
public

over

nature

irredeemable

States from

this

the

country

the

save

evils

United

gov¬

ernmentally-managed economy.
Domestically, all our currency
i

—

and deposits

money

is irre¬

—

.7.

by statesmen, is not yet
by a majority of pur

overcome

Thursday, May 18, 1950

^ •''

■.

basic

policy

understood

support

Congress.

pressure

...

When the Federal govern¬

(2)

ment in

1933 deprived the

people

of the United States of a redeem¬

able

also deprived
them of their power to exercise
currency

direct

money,

control

'■

■•

control

ment's

use

purse.

When

the

over

govern¬

the

people's public
people had a
currency
redeemable
in
gold,
every individual had
power,
to
of

our

the

extent

and

deposit

then

of. large

gain

the

vote-delivering
' The
people's

groups.

is distributed in a manner
designed to insure the desired po¬
money

litical

support.

pressure

that

support

are

exchange for political
rush

and

make

perceive

soon

favors

monetary

obtained in

Vote-delivering

* groups

the

best

Washington
possible.

terms

One result is that the government
becomes
the
prisoner of those
whose

support

purchase,
is passed

can

currency,

possessed

money

the

and

people's

purse

to register by Congress to the control of the
his disapproval of the policies and
vote-delivering and favor-seeking
practices of the banks and Treas¬

pressure groups.

by demanding redemption of
promises to pay. Each in¬

ury

That is, in the main, the state
of
affairs
that
policy is he said in his book, "The Economic domestic montary use is
prevails in the
con¬
dividual had the power to send
United
that
of easy
States
or
cheap money. Consequences of the Peace" (Har- cerned. Silver certificates are re¬
today,
the
basic
his message of disapproval to the.
■cause of which lies in the institu¬
Practically every device known court, Brace and Howe, New York, deemable in silver for monetary
central signal system in the Treas¬
tion by the Federal Government
to man for providing
a
people 1920), pp. 235-236, that "There purposes; but the silver money
ury and Federal Reserve banks—
is no subtler, no surer, means of is not
in 1933 of our system of irredeem¬
with a depredirectly redeemable in, or to their
gold reserves—over the
able currency.
overturning the existing basis of convertible into, gold.
ciated and
1
golden wires, as it were, provided
society than to debauch the cur¬
cheap money
Internationally, we are on a
Pressure groups need to be dealt
by a system of currency redeem¬
rency.
The process engages all restricted gold bullion standard.
was employed
able in, or convertible into, gold. with in accordance with the stand¬
the hidden forces of economic law We
by o u r Fed¬
ards
permit foreign central banks When distrust of the
of
statesmanship rather
value of the
on
the
side of destruction, and and
eral .govern¬
than in accordance with those of
governments to sell gold to banks'
and' Treasury's
promises
does it in a manner which not one the United States for
ment in 1933the politician.
dollars, or
The latter is a selfspread, the number of warning
man
in
a
million
is
able >to > to redeem their dollars in
1934. Provi¬
gold
signals increased. Every demand server; the statesman considers
sion was made
diagnose."
bullion at the statutory rate of $35
the national welfare solely. States¬
for redemption was recorded

deemable

far

gold

for

their

Our Federal monetary

for

issu¬

the

fiat

ance

assertion

notes, for de¬
preciation of

million

by
suspension of
Walter E. Spahr

pansion of

our currency

various

the

for

dollar,

ex¬

by means

laws.

silver

Pump-

priming programs and deficit fi¬
nancing by the Federal govern¬
ment

contributed

great

expansion

much

the

deposit

our

currency.

since the devaluation of
aside from
effects of

the dollar in 1934, and
the
relatively minof

our
silver laws, rests upon our
system of irredeemable currency
as

foundation.

Such

provides the
government with what is perhaps
the

currency

device

subtle

most

thus

far

discovered with which to get con¬
trol of a people without revolu¬

tion, without their approval, and
without their understanding until
it is much too late. It is probably
the most important device
ernment

fine ounce under Treasury
regulations. Other foreign holders
per

of dollars do not in general have

this privilege.

the

the side of

The evils in our system of ir¬
to ,be£>orne redeemable currency, with the
out in this country in high degree. right of
redeemability denied to
The Executive Department of the all but
foreign central banks and
United
States
Government, the governments, may be summarized
Treasury, most Federal Reserve as follows:
seems

authorities, the majority of Con¬
gress, and,

course,

public, including

(1)

the general

gov¬

employ in instituting
government
management
of
a
people and their economy.
can

best

perpetuate

redeemable currency in this coun¬

Currency

■

The
gave

late

matters
much

Lord

much

and

Keynes,

attention

who

the

who
these

contributed

institution

ernmentally-managed
this country

to
of

gov-

and England,

stated

fundamental truth in 1919 when

♦An

address

Wisconsin

Dr.

Spahr

Manufacturers'

before

the

Association,

Milwaukee, Wis., May 16, 1950.

intend to redeem

not

and do

redeemable currency.

case

silver

merely

Perhaps there is another group

certificates)

redeemable

are

other

for

banks or to the Treasury or to
Congress in behalf of sounder
monetary or fiscal procedures;
each

by Chief Justice Chase in the

irredeemable currency.

of Bank

that

the

great

not

was

mass

understand

engagement

pay

referring
of people who

dollar, and the dollar in¬

tended is the coined dollar of the

such

United States.

not

the

note

pertinent

people—and he

(1868) when he said that "The

dollar

Keynes made another observa¬
tion

case

Supervisors, 7 Wallace,

and

7 *

Similarly,

Justice Bradley, in
Legal Tender Cases, 12 Wal¬

the

principles

lace,

monetary standards and sys¬
tems; he was referring to what
he, called ."the 7great capitalist
class." Said Keynes
(Ibid., p. 238):
"They allow themselves to be

560

(1871),
that

supposes

certificates
that

the

said:

these

are

to be

paid;

specie payments

to return. And it matters

never

purposes

of record only. These

Through

John

Secretary of the Treasury

Sherman

able in
class

1879—:

1877

who

—

did

<■

With the institution of

our sys¬
tem of irredeemable
currency, all
the golden wires, running from all

fective manner, their approval or
distrust of bank, Treasury, and

for

different

probably

types

important,

dollars

meth¬

as a

tive if the individual is to retain

his freedom arid is to be able to
record his preferences in
any ef¬
fective

Utah

who is reported to
regarding government

said

support of farm prices: "I would
say to the farmers, 'The price of

freedom, is the

same to you as it
is to everyone else—a little hard¬

ship

when

times

adverse."'

are

("Time," April 24, 1950,

28.)

Since

statesmanship does not
characterize the majority of our
Congress, the people of this coun¬
try have seen their purse put in
the hands of favor-seeking pres¬
sure

groups

system

our

by politicians;
of irredeemable

and
cur¬

rency has made it impossible for

people to correct this state of
^777—'''
7 7:;

our

affairs.

...

■

• /

Opens Gate to Socialism

(4) Our irredeemable currency
the gate to, and invites, So¬

opens

cialism.

port

The purchase of the sup¬

vote-delivering pressure
groups places the government on
the road to Socialism in high de¬
gree or in a

thorough-going

Incomes

ner.

helpless

man¬

groups

be,

can

into

promise
that

May 1, 1950

and

hope

note

"There

money

'This is

Due

May 1, 1965

•

was

ought

to "be,

without

any

redemption;
be printed:

should

dollar,' and be made

regard

lunacy,

tion to

dulge

such

different

mild

have

debate with

disposi¬

men

who in¬

delusions,

times,

some

other

have

shared

form

all

but whose life has been
which

which

extent, at

brief, and

the

fate

popular delusions.",

lunacy prevails in
country today; and the fact

that it is
ends

order

form

extend favors

international

trade

and

those

the

price controls,

subsidies,
monopoly powers

labor, and so

dom

tions

had

Since

redeemable

currencies.

the

golden" wires to the
central signal system were cut in
this country in 1933, our people
have only had the power to pro¬
test and to appeal through other
devices
through organizations,
appeals to Congressmen, letters to
the press, and so on—all of which

whom

the

on,

government

en¬

popular delusion that

national

tragedy, if not

deavors to favor. The government
enters
into
unfair
competition
with private enterprise by engag¬
ing in productive activity, free
of tax and similar burdens borne

by private enterprise; by lending
the people's money to unprofit¬
able

enterprises at non-competi¬
tive rates; by extending other fa¬

—

they
ignored.

cause

government deprives a
the power to exercise

direct control

over

its

use

generally

does

tests; and it

of their

frees itself from

responsibility to them; it
ignore

and

can

their

pro¬

and often does,

can,

become their boss.

currency

use

irredeemable

has enabled

our govern¬

purchase the support of
vote-delivering pressure groups
and

put

the people's purse at

their disposal.

ment

services at. prices below
competitive markets.

•

-■ ■.i

great

variety

government frees itself

of the possibilities

or paternalism
totalitarianism, is made easy,
and is invited, by our system of
irredeemable currency. Since the

government is freed from account¬

ability

of direct

people,

the

board

nal

flashing

any

There
ment as
as

able

is, apparently, no instru¬

potent,

currency

fundamental,

or as

necessary,

people into So¬

Conversely,

probably

vice that

can

to keep

itself,, in office.

irredeem¬

government is

cialism.

disposed, it can use the people's
to buy the support neces¬

lights of

protest and warning.

disposed to lead

purse

the government and
its beneficiaries to get; and the
favors of pressure groups can be
obtained without the central sig¬

con¬

it cannot be held ef¬
fectively to an accounting and, if

money

made easy for

trol by the people over its use of

sary

govern¬

undertakings, most or all of
constitute steps in the di¬

their purse,
so

When

'I'
This

which

public purse, it

ment

those

be¬

be, and have been,

can

and

vors

rection of Socialism

When

people

countries,

This form of

this

con¬

exchange reached their greatest
period of development when na¬

(3) The
this

and

have prevailed to

Glore, Forgan & Go.

We need to

manner.

petitive markets must be ham¬
pered, circumvented, or destroyed

sider the fact that individual free-, rent controls,
dom, private enterprise, and free¬ to organized

legal tender.

judgment

much

large
people who believe that

made

City Steel Company
3%% Notes

■■

alone

efforts have been ineffective

Said

through the undersigned.

paper

act

one

government

never

day of

"No

they are issued.
whatever changes
they pass, their ultimate destiny
is to be paid."

$5,500,000

his

record

directly.

to make the Greenbacks redeem¬

.May 15, 19S0

could

Governor

John Sherman

;Dated

individual

brand

government and therefore

Notes have been placed
privately

Granite

purpose

plea to the Reserve

Lee

have

the

revealed

controlling the public purse, must be funneled to the members
promises.
—those who understand the evils
The
thing
promised
becomes and, therefore, the government, of these pressure groups.
Wealth
of Statism and do not want itr
as is the
right to vote one's politi¬ must be taken from some and be
nothing but the promise itself.
yet who, for reasons of personal
cal preferences.
Power to control given to others as benefits. Proj¬
The
essence
of the
issue in¬
gain, wish to keep the good will
the public purse by direct pres¬ ects
pleasing
to
the
pressure
of, or obtain favors from, our volved in this confusion of prom¬ sure
of the individual is impera¬
groups must be undertaken. Com¬
ise and performance was stated
Federal

announcement appears

organization for the

sending

character

od of

irredeemable

equally

not in what form

This

They cannot be held
try.
■- ■ 7
■(,
; * to an
accounting by the holders government monetary and fiscal
of these
so-called promises ;*— practices was
Some
of
those
people know
destroyed. The sig¬
what they are doing—they want foreign central banks and gov¬ nal lights went out both at the cen¬
ernments excepted.
a
tral
signal board and for the
governmentally-managed econ¬
omy. Others do not understand;
Although a promise to pay is people of the United States.
It
was as though our
one thing, and the
they fall in that large group, men¬
people had been
thing promised
tioned by Keynes, who are unable is something else, these so-called deprived of the right to vote.
The
to diagnose, the evils in an ir¬ promises to pay (except in the right to record their preferences

economy

not redeem.

nothing to
fight off Statism; and they either
embrace, or fail to oppose, an

Debauching the

individual heeded

manship -requires

corresponding responsi¬ our people to the central
signal
bility. They are authorized to is¬ system, were cut.
The power of
sue promises to pay which
thejr the people to record, in an ef¬

fawn upon it. They do

Keynes

dishonest currency.

without

ir¬

an,

It gives our Treasury and Federal
Reserve authorities privilege

large number
of economists and newspapers of
the
Socialist,
pro-governmenttheir

Treasury.

reserves

of the Federal Reserve banks

some

Evils of Irredeemable Currency

private-enter¬

drawing down of the gold

to join with other individuals in

debauched

management variety, are all doing

The government's cheap money

policy,

man

diagnose

which

prise economy

except silver certificates, for de¬
valuation

one

operates

destruction

redeemability

not

able

currency

of all currency

that

manner

dollar

the

currency

debauched currency. And Keynes'

States

United

irredeemable

there

effective

de¬

be employed to art

,;y,tContinued

on page

Volume 171

Number 4908

The Commercial and Financial Chronicle

...

(2055)
"

■

Industrial Production

Production, Income and

1925

level

any

121

merely by price increases. Maintains long-term physical output
is

1949—...

living.

Congress
ment:

the

following

"Within five years

tinuing

achieve

That

terms.

an an¬

dollar

and

continue

cannot

measured

both

can

indefinitely with the high quan¬
titative output is a logical cer¬

nual output

in
of $300

excess

productive output
quantitative

state¬

had

have

tainty. Any other concept

billion."

too

This remark

strongly

the

savors

Era"

"New

based

upon "

is dependent upon
things, increase in population
and increase in output per capita,
a

long-term

the

latter

which

ard of

living.
of

living.

living

dicates

the

high degree of

have

optimism

and

this viewpoint

decade.

Fortunately

adequate data to enable

with

portray

reasonable

us
ac¬

trend of physical out-

curacy our

L
in part •pUt.
It will be noted, however, that
be responsible
for the Presi¬ the annual output mentioned in
dent's adher¬ the President's report is measured
ence
to large in dollars. For all practical pur¬

the

country

gradual and

great change

measure

McNiece

measured in these
financial terms is determined by
output

poses

budgetary exp e n d i tures

levels

concurrent

and his repeated demand for more
and more taxes. That the President

and

prices

quantitative

output.

physical

recognize that such a high
level of national output * will not

National

output in terms of dol¬

level

does

reached

shown

"this

lars

effort

without

The "New Era" Danger
con-

DATA

/.^;;

; :v

National

—,mm mm

Production.

Wholesale Prices
Cost

Price

Gold

DATA:

^Official,
SOURCE

based

1949

are

the

year

base

for

•

4,390

stant

these

current

re¬

results from 1929 to 1944 inclusive
are
a

the

indicated

trend

line

find that the
179

which

trial

production and annual output in dollars.
5
From

cording

1948

to ; Government

Federal

Reserve

sources.

Board's

in¬

dustrial activity index for 1948 is
192
as
previously stated. This

com¬

that annual output in 1954

means

instead
would

some¬

reaching

billion

actually be less than it

in 1948 based

toward

$300

1945

1949

the

do not conform to

pattern but

are

longconsistently

the

trend

level of annual

in 1948 adjusted to 1935-39

about

$16

billion

that actually reached in 1948

adjusted
to
the
prices. What is the

7.1

w as

1935-39

reason

for this

our
,

economic and social progress?

The

data

changed
since the

show

that

under

spokesman for the Council ad¬
interval, because of inflation vised that in making the estimate,
France, national income was allowance was made "for only a
eleven times greater in 1946 than minor variation of prices from the
in 1936, while industrial produc¬ present level."
No mention was
in 1936.

lower in 1946 than

20%

^prevailing
close of; the "war, the

physical output at a uniform'
price yields a higher gross prod-;
same

Continued

solicitation of offers to buy

any

page

of such securities.

>?;•—

Southern California Edison

At the

same

time whole¬

sale prices were ten times .and the
cost

estimate
such

always
and

Nevertheless

ficiently

May 17, 1950

Company

chance for

error

would

the decade indicated.

the

large

ratios

and

suf¬

are

consistent

illustrate the point that the great
increase in national income and
therefore in national output meas¬
ured in money was caused by the

inflationary increase in prices and
not in physical output.
The low
of

from

appear

Presidential

this,

advisers

In this

case

output

come

output

our

governmental

report

mental

thought

lion

was

Council's
to

based

such

forecast of

excess
on

the

Economic

estimate of $300

"Times"

an¬

of $300 bil¬

$310 billion for 1954.

York

com¬

govern¬

this point.

The President's
nual output

economists

President Tru¬

represents

reversal

principal gains in
must

Price $25.50 per share

expected

physical

above

present

the

and

production
President's

plus accrued dividends from May 19, 1950
if delivered after that date

indicated

reference

"hard work."
The logic of this
position should be examined.
It should
and

admitted

growth

Copies of the Prospectus may be obtained from any of the several underwriters,
including the undersigned, only in states in which such underwriters arc qualified to
act as dealers in securities and in which the Prospectus may legally be distributed.

readily recognized
that

decline

forecasting

over

extended

mid-'30's.

man's

plete

price

in 1936 and
periods,
conclusions
should
be
depression year, based
upon normal trend
levels
as compared 'with
1914 is due to and not
upon the temporary peaks
the lack of growth in the French
or
valleys of booms and depres¬
population and economy—a con¬ sions. Before
considering any fur¬
dition
predicted for the United ther influence of
price upon an¬
States in the near future by some
nual output, reference should be
in the

4.08% Series

value)

not

from increases in
over

levels

the

production

1946, the latter

par

that

important

any

chaotic annual

($25

of changes within the next few years.

element

especially

data,

times such

rate

the

living eight times higher. expect

There

Cumulative Preferred Stock,

made of the direction of variation.

reports

billion

The New

that

made

our

and

growth

„

Harris, Hall & Company
(Incorporated)

William R. Staats Co,

Dean Witter & Co.

Blyth & Co., Inc.

Eastman, Dillon & Co.

Glore, Forgan & Co.

Goldman, Sachs & Co.

physical output over an extended
period in order to see how the
growth trend compares with that
required to produce an annual

output of $300 billion at approxi¬
mately current prices.

Harriman
Merrill

Lehman Brothers

Kidder, Peabody & Co.

Ripley & Co.

Incorporated

"•

Smith, Barney & Co.

Lynch, Pierce, Fenner & Beane

Stone & Webster Securities

Corporation

Union Securities Corporation

The following data indicate the

comparative levels of the normal

White, Weld & Co.

growth trend and actual physical

output for the
,
*Annual output, national output
gross national product all have the
meaning.

actual

The First Boston Corporation

upon

years

shown based

the Federal Reserve Board's

same

index

industrial

production:

Blair, Rollins & Co.

"
•

Incorporated

Salomon Bros. & Hutzler

the':

conditions

1,000,000 Shares

It will be noted that in the ten-

was

Library of French Embassy.

Statistique General de la France and

when '«■«

same

offering is made only by the Prospectus.

NEW ISSUE

^higher.

than

departure and does it indicate an>
normal trend of > improvement or an impairment in •

nor a

;

output
prices

lower

was

annual

the

8.0

*3,900

offer to sell

higher than the trend'established
by the earlier dgta. For example/

year

tion

in this

annual

10.3

4,660

price

market

product

gross

Survey of Current
by "the Department of

0.8

581

100)

open

11.4

546

100)

2,220

■

100)

—

dollars,

an¬

product

gross

Commerce

term

1946 to 1936

427

100)

shown in the

Business

data

The

1946

195

(1914

dollar;

; follow

The

slightly higher

favorable

value

because some data for
preliminary and also

measured in

1948. Annual output or gross prod¬
uct in 1948 was $262.4 billion ac¬

still

therefore

output

actually less than that realized in

because prices which will be con¬
were

and

This advertisement is neither
1936

: *

..(1913

_(1914~=

'"V-

.\..v

(1914

Living.

parisons

When

war.

end

through to 1954,

Ratio:
r.' ;U

Income

Industrial

used

nual

ECONOMY

FRENCH

V/'-/

■

for

direct in¬

according to the trends

Data

than in 1949 and

(Billions of Francs)
.

will

what

future.

COMPARATIVE

output.

each.

since the

A good example of this is fur¬
reaching the goal of $300 billion physical output for 1954 at 1948
nished by recent economic history
set by the President.
prices, the postwar peak up to this
in France. Because it is available,
r;V".. X fi-.'-:". I ■■ : .;■ >
time. This leads to consideration
Trend Levels
national income which is propor-s
of the relationship between an¬
tional to and derived from annual
It should be repeated that trend:
nual output in dollars, physical
•levels must be considered in ap¬
output, will be used instead of anpraising future behavior. < Our output and prices,
nual output to illustrate the point.

expenditures con¬
tinue and the high level of na¬
tional output does not, we may be
facing serious adjustments in the

and

physical

com¬

The projection to 1954 is
upon the increase of these

sidered later

extraordinary

1941

The French Experience

tomatically, but requires conscious
purpos4 and hard work." If the

Beginning with

increases without

by price

increase

any

by his later statement that
growth will not come au¬

be raised to virtually any

can

through.

In order to show the

fluence of physical output on

found to fall very closely into
straight line that naturally rises
as industrial production increases.
are inherent in any elastic econ¬ This orderly arrangement for such
omy especially when accentuated a period clearly indicates the di->,
rect relationship between indus¬
by war.;
: •'

capita. Our economy has not com¬
pleted its expansion. We are not

two factors

According to the

placement demand is satisfied, our
output will drop.
These changes

bine# effect of increasing popu¬
lation and increasing output per

based

aver¬

actual output for 1935 to

conditions

very

the

level

1935-39

activity, that is normal

inclusive.

tries

for

from year to year. The data
shown in the normal column in

the above table

of the

Physical

at Fixed Prices

extraordinary
foreign
aid
and too extensive for inclusion
shipments tojoreign coun¬ article. When charted the

occur

may

T. M.

whole

the trend

1948

Between

Output and Gross Product

other

our

The trend of
standards

Relationship

the

Every limitation of

output retards the increase in
in

very

only

of an increase in the stand¬

increase

dramatically at the end

the

source

standard

capita.

two

nificant. It in¬

1
in

Output

bubble of the late twenties which

sig¬

very

per

increase

and

was adjusted to a conprice level by dividing each
Federal Reserve Board data, actual
year's output by the Consumer
output in 1948 was 192, and ac¬ Cost of
Living index (1935-39=
cording to the Cleveland Trust 100) as computed by the Bureau
Company data,, was about 198, or of Labor Statistics for the corre¬
approximately 26 and 30%, re¬ sponding year.
spectively, above normal. This sus¬
The purpose of this calculation
tained period of abnormal output is to remove from annual
output
is dqe largely to three conditions measured in
dollars the variations r
all of which must end soon; first, due to
price changes and there¬
deferred demand from the long fore
to
show
the
influence
of
depression of the '30's; second, de¬ physical production alone on the
ferred demand resulting from un¬ annual
output in dollars.
These
availability of civilian goods dur¬ data were calculated for the years
ing the war period; third, the 1929 to 1949 inclusive and are

1939

Growth in physical output over

burst

average

176

Elements of Growth in Physical;

present time we
abnormally large

the

*179

Projection

population and in output

tightening (traitjacket—a situation for which Russia
•'V;:-:vV' V;?fMV'i.'"'
has been working.
ever

Tucked away in President Tru¬
man's recent Economic Report to

■

192

trend

expectancy would indicate a phys¬
ical .output 52 %' greater than the

*160

1954
*

203
*

156

1950

population growth and increase in per
source of rise in standard of
Concludes further debt increases will put economy in

dependent solely

capita output, latter being only

87'

152

—

152%

age annual

125

139

1948.

For

108

1945

be raised to virtually

can

line.

1940

;

about

1935—

Mr. McNiece asserts President Truman does not realize national

•

normal

reasonably near future must be
expected to dip below the trend

Actual

1930

output in terms of dollars

above

Normal

1920..

McNIECE

THOMAS

present volume of output is still

1935-39=100%

Taxes: Whither Bound?

W. C. Langley & Co.
„

The Commercial and Financial Chronicle

(2056)

able

Information Objectives of
SEC and Capital Raising

sense

Fort Knox

with

Vast

information

ample.

Each

interested
ties

Exchange Commission, and contends its operations

Missouri Brevities

year

persons

the

The public offering of the
250,-

hoard

treasure.

sterilized

dis¬

are

seminated in prospectuses, for

Commissioner Cook recounts origin and objectives of Secur¬
ities and

covering a ma¬
of the publicly financed
corporations in our country today.
However, the Commission is in no

amounts

By DONALD C. COOK*

Commissioner, Securities and Exchange Commission

ex¬

thousands of
use the facili¬

Commission's

public

000 shares of common

$6)

(par
Spencer Chemical Co.,

Kansas

City, took place

None

the

price

$35

May
share.

per

the proceeds will

lion

selling stockholders. The company

of corporate

been purchased by

information. Praises accounting rules of SEC
problems connected with institutional
advertising by investment companies. Upholds Frear Bill to
extend junscLction of SEC to unlisted and unregistered corpora¬
tions. Concludes "full disclosure" is fundamental in bridging

public during

The Securities Act of 1933 is de¬

full

with

fair

and

disclosure

significant information

and,

con1 y, to

v e r s e

mis¬

prevent

representation
fraud

and

the

sale of

publicly
fered

of¬

securi¬

ties. Such dis¬

closure

con¬

sists,

in gen¬
era 1,
of two
main require¬
ments: (1) the
filing with the
Commission of
a

registration

^statement

Donald C. Cook

the issuer

securities, con¬

taining full and complete informa¬
tion concerning the
offering, and
(2)
of

the condition that
the

and deliver

use

the

seller

registered securities
a

must

statutory

pros¬

pectus reflecting the information
on file
with the Commission to
all, persons, solicited or sold the
securities.

Quite

;

disclosure

situations

the

facing

naturally,

full

complex
American busi¬
many

is
a
demanding • task.
It
reaches at times to the
very roots
of accounting
theory and practice
into
technology, and in fact into
ness

every
consideration germane to
the valuation of a
security. I want
to

discuss, at

later point, some
of the Act's
operation.

these

problems

day-to-day
While most'.difficulties

under

the Securities Act involve
honest
shortcomings rather than deliber¬
ate attempts to becloud
the facts,
yet instances of misrepresentation
or

fraud

are

not rare. Within the

past year or so the Commission
has encountered attempts to con¬
ceal

advantages to parents

siders

which

would

have

or
^

in¬

been

detrimental to investors; failure to
disclose

cease

and

desist

outstanding in
against

sale

orders

several states

the

company's

stock; overstatement of inventor¬
ies, understatement of losses,
write-ups of fixed assets; gross
exaggeration of the indicated
pro¬
ductivity of mining property, to
name only a few.

.One flagrant
example set forth
...

in the Commission's
Report deals with a

15th Annual

proposed in¬

vestment

company.
Among the
misrepresentations in its

serious

prospectus
the

was

the

description of

business

promoters.

experience of
I quote from the

the
an¬

the prospectus stated

'after

that

successfully accumulating
'organized

sufficient capital' they
a

distributing agency for soft
beverages during 1929'; that
'they
subsequently organized' a com¬
pany 'for the manufacture of tex¬
tiles and integrated
products from
the raw yarn
through a nation¬
wide retail
distribution'; and that
'during 1943 and 1944 they Liqui¬
dated their operations in
the
tex¬

account

immedi¬

for

their

fAddreis

by Com. Cook before the
University of Michigan, School of Busi¬
ness Administration
Alumni
Ann

Arbor, Mich., Apr/1 22,

Conference,
1950.

upon

the

sum¬

relied

are

economy.

This is in

striking contrast to the
of information generally

available

years

ago.

Equally striking is the relatively
small

expense

has

put in providing the
with this great body of
By and large, financial in¬

which

business

been

public
facts.

formation disclosed under the Se¬

three

established manufacturer of
certain types of heavy
an

chemicals,

including synthetic anhydrous
ammonia
which is produced by
chemically
combining
nitrogen
from the air with
hydrogen ob¬
tained from natural gas and water

(steam).

The

Missouri

Stern
Fitch

Brothers ,&
&

Gardner;
and L M.

Barret,
Reinholdt &

Inc.;
Newhard,

Cook
Simon & Co.
♦

were:

Co.;

Co.,

Co.;

the

Missouri P.

the

fiscal

1949.
*

Newhard, Cook & Co. and Rein¬
holdt

Gardner

participated in
May 9 of 100,000
shares of Knott Hotels Corp. com¬
mon stock
(par $5) at $12.50 per
the

offering

share to the extent of 7,500 shares
and

3,000 shares respectively. The
offering was oversubscribed. The
syndicate was headed by Hayden,
Stone & Co. of New York.
*

Crown Drug Co., which operates
84 units in Missouri, Kansas and

Oklahoma, has obtained a loan of
$500,000 from the Reconstruction
Finance

The Kansas City Power & Light
Co. on May 10 filed an application
with

ended Jan. 31,

bankers

participating in the offering

Commis¬

sion for permission to

issue $15,000,000 of 30-year first mortgage

Corporation, H. J. WitPresident, announced on
May 10. The proceeds are to be
schner,

used

and to

Kansas

remodel

open

new

present
ones

stores

outside of

City.

of age.
The company curities
Exchange Act has been bonds, the proceeds of which are
which was engaged in the business
to be used to pay off
Reinholdt & Gardner also on
$4,822,500 of
available to management all along;
of 'manufacturing textiles and in¬
the question is not one of prepar¬ outstanding notes and to finance May 11 participated in the public
tegrated products from the raw
its construction
program.
Total offering of $30,000,000 Seaboard
ing it but rather of publicly dis¬
yarn through a nationwide retail
closing it.
The additional facts operating revenues of this com¬ Air Line RR. first mortgage 3%
distribution' was in fact a small
flowing from disclosure under the pany for the 12 months ended bonds, series B, at 99%% and ac¬
enterprise engaged for the most Securities
March 31, 1950, were
Act do at times involve
$27,688,299, crued interest. The proceeds, to¬
part in the business of selling
as against
$26,215,142 for the pre¬ gether with other funds, are to be
added expense to business, but
ladies' blouses. The reference to
this is one of the smaller segments ceding 12 months' period. Net in¬ used to redeem the
outstanding
their trading in securities was no
of cost entailed in raising capital come after charges and taxes $31,534,500
first
mortgage
4%
less misleading.
amounted to
The investi¬ and
$4,550,247, compared bonds, series A, due Jan. 1, 1996.
is, in any event, an expendi¬
with $4,472,441.
gation disclosed that during the ture which has been
*
*
cdemonstrated
.•'/A'v*
period referred to in the prospec¬ to be
socially necessary.
Net income of Interstate Baker¬
tus the promoters traded exten¬
The stockholders of Transcon¬
It might be inferred from these
ies Corp. for the 16 weeks endedL
sively in securities and suffered a remarks that the
coverage of the tinental & Western Air, Inc. on
net loss as a result of their oper¬
April 22, 1950, was $700,508, equal,
various acts and hence of avail¬ April 27 approved a change in
to $1.93 per common
ations."
^
share, com¬
able information is well-nigh com¬ the corporate name of this com¬
The
pared with $748,796, or $2.07 per
registration statement, I
plete. This is not the case, how¬ pany to Trans World Airlines,
common share, for the like
might add, was withdrawn.
period
ever.
The various acts have, in Inc., which has been used as a
last year. Sales amounted to
The Securities Exchange Act of
$16,fact, discriminated against those trade name by TWA since 1946
1934 is another important imple¬
960,967, against $16,947,456.
security holders whose securities when it first began commercial
*
ment of disclosure. Jt requires do
*
*
not happen to be registered on operation overseas. A net loss of
companies whose securities • are a national securities
Included in the list of invest¬
exchange and $1,844,049 was reported for the
registered on a national securities do not
happen to be registered on quarter ended March 31, 1950, ment bankers who on May 10 pub¬
exchange to file annual reports,) legislation
adopted between 1935 compared with a deficit of $3,- licly offered $30,000,000 of Poto¬
showing financial statements and and 1940.
Clearly, there is no ba¬ 013,029 for the same three months mac
Electric
Power
Co.
first
other pertinent information, with
sis in logic for a system in which last year. Total operating revenue
mortgage bonds, 2%% series due
the exchange and with the Com¬
protection or lack of protection was $21,173,014, against $21,437- T985, at 101.127% and accrued
mission. Trading in a company's for the
investor is dependent upon 746 in the same 1949 period.
interest were Reinholdt & Gard¬
equity securities by its officers, such irrelevant factors as
type of
ner; Stifel, Nicolaus & Co., Inc.;
directors and principal stockhold¬
On May 3, Reinholdt & Gard¬ and Stix & Co.
industry and type of market. The
ers must be disclosed in reports
Commission has proposed legisla¬ ner, together with 12 other in¬
"-/i-;
which are summarized and cir¬ tion to
correct this inequity, and vestment
bankers, participated in
For the quarter ended March
culated
widely.
Regulation
of I want to tell
you more about that the public offering of $27,000,000
brokers, dealers and exchanges, later/
31, 1950, earnings of McQuayAmerican Gas & Electric Co. 2%%
while going considerably beyond
Norris Manufacturing Co.
were
serial notes dated May 1, 1950,
Work of Accountants
$9,920 after taxes and all charges
disclosure, also serves to bring
at 100.961% and accrued interest.
more information to light which
but before payment of dividends.
Obviously, the raw unclassified
is important to the investor. data about any business are not
This compares with $71,794 earned
The book value of each share
in the corresponding quarter ol
Higher standards of conduct in particularly useful either to in¬
of common stock of Stix, Baer &
these quarters have done much to vestors or management.
last year. For the first 20
The art
days
Fuller Co., St. Louis, has been in¬
of accountancy
insure the investor fair treatment.
of April,
was, therefore, de¬
1950, shipments were
creased from $22.33 at Jan. 31,
ahead of the like period in
: Among
the chief information veloped to digest and classify bus¬
April,
1949 to $24.28 as of Jan. 28, 1950.
1949. Compared to the first 20
objectives of the Commission have iness data according to some
Net working capital per share of
been clarity and completeness in working rules which will ordinar¬
days of March, 1950, shipments
common
stock was equivalent to
were 14% ahead.
proxy solicitations. ' Whether the ily produce reasonably intelligible
information about a business. $17.86 per share and the same
*
*
*
question is one of electing direc¬
figure for the previous year was
tors, of a security issuance, a re¬ When business enterprise was
Net sales for the fiscal
Taussig, Day & Co., Inc, was
small the bookkeeper-accountant $16.16.
organization, merger, or modifica¬
one
of the 10 underwriters who
year ended Jan. 28,1950 amounted
tion of the by-laws, the Commis¬ devoted his energies to helping
to $45,729,158, including sales of on April 25 publicly offered
164,sion tries to see to it that the management understand its busi¬
leased departments and other in¬ 560 shares of Colonial Acceptance
stockhodlder is given full and ac¬ ness and to presenting reports de¬
come. This latter figure was 4.35%
Corp. $1 par value convertible
signed primarily for creditors in¬
curate information so that he
may
less than the total of $47,808,491
class A common
stock, first series,
determine his best interest. Pro¬ terested in "pounce" value. Newer
for the preceding fiscal year. Net at $5 per share
plus accrued divivision is also made for counter- uses of accountancy developed
profit
amounted
to
$1,854,192, dendsr n
solicitations of proxies by minor¬ with the growth of the modern
The
separation of
ity groups, subject to the same corporation.
ownership from management cre¬
rules of disclosure.
years

The

Investment

Company

Act
Holding
Company Act go considerably be¬
yond the problem of disclosure.
the

and

Public

each

many

Utility

them brings

facts which

to light
enable the in¬

ated
ers,

a need to report to the
present and prospective,

Black, Sivalls & Bryson

own¬

Texas Utilities

the results of management's stew¬

ardship.

The

passage

Federal

Mississippi River Fuel

income tax laws immediately gave

Continued

page

Delhi Oil

intelli¬

Tennessee Gas Transmission

appraisals of a company's
operations. In the case of the In¬

Texas Eastern Transmission

vestor

arrive

gent

Rockwell

vestment Company Act, as I will
discuss more fully, disclosure has
taken

new

importance

view of the tremendous expansion
of the mutual funds.
Whenever

popular

interest

swells

these

proportions, particularly when
coupled with commissions very
attractive to

debentures

into

reports which
throughout our

paucity

real danger of runaway, irrespon¬
sible representations to
the in¬

and

information

such

bonds

or Dun & Bradstreet, pur¬
large quantities of these
photocopies and, in turn, convert

tile field and

principally engaged
trading and investing in stocks,

Standard

chase

Commission's) in¬
vestigation disclosed that the bev¬
erage business in which they had
engaged consisted of the sale of
soft
drinks
to
factory workers
when they were still no more than
13

Moody's,

services,

Poor's,

family.'
(The
.

Yet

nual report:

the

of the members of their
ate

mary

and for

account

own

financial

various

such

and stockholder-controlled enterprises.

signed to provide the investor

members of the
the past 15 years.

The

disclosure

between relative attractiveness of management-controlled

gap

for the account

share for

common

year

these shares be¬

company,

have resulted in accumulation and distribution of vast amount

pages

per

accrue

ing sold

nearly 3 mil¬
photocopies have

equal after preferred dividend re¬
quirements to $2.95 per common
share, and compares with $3.53

stock

reference room, and

and reviews

Thursday, May 18, 1950

information

jority

...

Bought

INVESTMENT SECURITIES
509

OLIVE

various

bring together

Sold

—

Quoted

SCHERCK, RICHTER COMPANY

St. Louis l.Mo,

Landreth Building
MEMBERS

MIDWEST STOCK

acts

—

STREET

Much Information Now Available
These

Southwest Gas Producing

Stix & Co.

distributors, there is

vesting public.'

Mfg.

Southern Union Gas

serve

wealth of valu-

EXCHANGE

Bell
-

Teletype

SL 456

Si.

Louis 2, Mo.

Garfield 0225
l. d. 123

Volume 171

Number 4903

The Commercial and Financial Chronicle

Roussel Heads LA

Maikei foi Government Bonds

Exch. Speakers Com.

named

chairman

committee

the

and Federal Reserve

speakers

Los

ment

Angeles
Exchange, President W. G.

Stock

President

First

Cali-

Angeles and

presiding

was

Born

1903,

London,

England

and

France,

curity market and the confidence
of

I believe I may say

influencing

therefore,

the

French

occupation

in 1923, and
discharged, came to
country in 1925.
That same

nection

the certificate rate was gradually raised and further checks
were effected by the Reserve Sys-

one

Vacuum
He

Manager of

Dec.

1949,

Company.

entered

banks

Socony-

securities

and

sued

is-

by the

ing

United

States

Blyth

Company

New

York, then moved to Los Angeles
in 1932, with the same firm, with
which

for

In 1945 Roussel became

years.

as-

sociated
Co.

connected

was

with

Nelson

Douelass

Vice-President.

John

Association,

Apolene Street, Balboa Island.

$61,616 million, and as it is es¬
timated that government securi-

eyvcim..^

securities

government

are,

Hold 4ih

New

letter

member banks, it
that banks and other

our

securities in their portfolio is apbusiness."

believe

such

serve

then

exists.

The

the

credit should be increased."

No Longer
It

has

members

Association

ment

The

Invest-

New

York

Friday,

7th,
at
the
Westchester which had been expanded
Country Club in Rye, New York, the period of hostilities was

July

policy

was
announced
by
Blancke ally reduced until the depression
Noyes of Hemphill, Noyes, Gra- commencing in the early 30's. Durham, Parsons & Co., president of ing the depression the debt was
wigaiutauvii.

uuuuuiu.ee

xnc

planning the affair is headed by
John C Hagen and Pike H. Sullivan

of White, Weld & Co..
cording to Mr. Noyes.

ac-

.uvuunj

direction

Noyes,

& Co.

sons

Co.

for the

Roscoe

Ayers

Graham,

Par-

Donald Stone of Asiel

necessarily

handling

arrangements

Barroom

Stock Exchange
operation during
the outing.
Henry L. Cook of
Smith, Barnev & Co. and James

which will be in

Nuland

Co.

Rhoades
games

Carl
are

Loeb,

charge of

after dark.

Originally organized

the Jun-

ior Investment Bankers and Brok-

Association

ers

the

spring

1947, The Investment Association
numbers

now

approximately

200

members.

time

tion of

■

thereto.

fixed

saw

buying rate by the

reserves
.

"Victory" 2 y2s have declined about
two points; the bank-eligible 2l/z&
about
25/32nds;
and issues of
shorter maturity have shown
a

any

To
io

necessary
-

crea-

to per-

operations,

Wolff

attribute mis
we/^cnouie this

offered

tl/

Securities

result

the

—

morlrpf. at

nrrurrp>cci vpI v

offer to sell,

nor a

solicitation of

offer to buy,
«

V;',v^V'; V;/-:'*

($100 Par Value)

Price $102 per

graduwhich de-

saw

Copies of the Prospectus

may

be obtained in

of the several underwriters,
may

capacity's being de¬
materials, resulting
shortage of civilian goods,
helped to produce an era of in-

any

State from such

including the undersigned,

lawfully offer the securities in such State.

Lee

overmonetization

of the debt. This coupled with our

Higginson Corporation

productive
voted to

Walston, Hoffman Adds
f

Special to The Financial Chronicle)

LOS ANGELES,

MacKusick

ston.

Hoffman

Calif.

Goodwin,

Aated Prices.

550

rising commodity prices, expand-

merly with Gtoss, Rogers & Co.
i

Goldman, Sachs & Co.

ful1 well that period of steadily

M l
> i f f ?

Blyth&Co.,Inc. The First Boston Corporation

We all remember

John

South Spring Street. He was for...
/-.x
^ ?''r
A
i

William Blair & Company

Kidder, Peabody & Co.

war

Wal-

—

with

now

Smith, Barney & Co.

*An address by Mr. Grier before the
Bankers
Association Convention,

Ohio

Columbus,

t.i t'X f *•>: *

-i * i

Ohio,
-u«

May
'

10,

1950.

f*' M.

lnu/pr

Continued on page 30

Plus accrued dividends from May 15, 1950

was

Si J, w
System. early in January corn
naeneed making the
P

en-

Co.

indicating cleai ly a dlspo-

4% Preferred Stock

During the 30's we
declining rates,

15,

Dec.

Household Finance Corporation

business,
F. Martin,

propor-

1949, for the several issues maturing then, a 4V4-year 1%% note,
Then in exchange for the February certificate issue they offered

100,000 Shares

securities

Herbert

less

what do
wnai ao

of these shares. The offering is made only by the Prospectus.

New lg3ue

cline, of course, was due in no
small measure to the influx of
Officers are William
gold, and further accentuated by
President
and
Treasurer,
and deficit
financing
through
the
Mary K. Martin, Vice-President banking system.
This latter, as
and
Secretary.
Mr. Martin was you well know, reached huge proformerly Elkhart representative portions during the war years and
for

tion.

therefore, on what I

ally

for

past.

government

sets.

offices

at 301 West Franklin Street to

the

—

This announcement is neither

budgetary;

j* *s n.ot my purpose at this time
J® enter into any discussion of
the wisdom of certain of our fiscal
P°hcies, but rather to attempt to
Sa"&e m some degree their proDable
effect
on
the

ELKHART, Ind.—W. F. Martin,

seen

mit the banking system to absorb a 20-month 1/4% note, to be folthat Potion of the newly created lowed by a 16-month; 1%%j► a 15debt which was not sold to other ™°nth «n,^?Hna ^nariv

«...

previously described as the
major portion of our earning as¬

(Special to The Financial Chronicle)

wider

have

For example,
from the prices of Dec. 30, 1949,

some

that is, one of an inflated money set forth in June, 1949, at which

surpluses to reduce debt in times
high industrial activity. The
practicability of this philosophy
could probably be argued for time
ad infinitum, but the indisputable
fact remains that currently we
are seeing only one-half of the
theory put into practice. However,

market and,

gage

have

W. F. Martin, Inc.

Inc. has been formed with

and

subject

fluctuation that

*s> the theory of deficit spendingin times of business decline and

unemployment,

and,
therefore,
security prices must

of the Reserve System to support cordance with the Reserve Board's
;c
tof wtc thp
the market, but rather the wisdom
injon o( ,he needs of the econ_
^ward^ moderately higher
of doing so. It is my belief that
F
..
; _ ,.
.
irena jowara moaerdieiy mgner
in an era such as I am discussing, omy- This policy, was definitely rates, both in the long- and sil°rt-

and very commendable purpose of relieving suffering
due to unemployment, and partly
to accomplish stimulation of busivery necessary

The
association's annual
golf ness activity. It was then seemtournament, feature of the day's in2ly that the theory of a compensports activities, will be under the ^tory budget was conceived; that

Hemphill,

..w

v"v- m*-*—

increasingly ap-

the

was

me rather improbable that the lon„ term issues Today we have
System would ever be called upon
8
■.
'
y
to absorb any such amount. There- no such fixed pattern, but^ rather

i.iv.iv,uUw,

Rigid Price Policy

prevails

government

portfolio and still maintain the institutions. We had a fixed rate 1/^ %,
during required reserve against the de- of %% on certificates; 2% on s lon
gradu- posits thus created. It seems to g-lO year bonds; and 2&% on

become

parent, particularly since the first

Following World War I, the debt

The

successful

war

Bills which assured the

ury
.-

debt, the management thereof and such reserve is about 56.8%, so
the importance of such manage- that the System could add about
ment to our economic well-being. $49 billion
governments to its

ing of the association

Federal Reserve of %% on Treas-

reserve in gold certificates
against deposits and Federal Re-

will attend the fourth annual out-

longer

subordinated

System is required to maintain a

notes outstanding. Actually,

pattern

icy. The Treasury, which for so
long a period followed the policy
primary objective of all of us, and of offering practically nothing but
everything
else ' was
rightfully one-year certificates in refunding

25%

respect to the size of our national

the war
inauguration of a
inauguration ol a

tne

prosecution

sibly
were
not
well-informed.
Currently, the Federal Reserve

several decades our
economy has undergone a considerable change, particularly with

period

the

saw

pos¬

persons

maintenance

the

fixed

Policy of fixed interest rates, one decline? I repeatjy statement^
to which we became accustomed the beginning of this talk—to
and which we must now realize Treasury and Federal Reserve pol-

System could not con¬
indefinitely such support,

but

and

the

saw

was

relatively

decline

During

Reserve

of prime im¬

conditions

bonds

Under present

of the year, that a more flexible

/
reply to

said in

one

seems

which was the sub-

tinue

In the past

Outing

Bank

"As

that of Federal Reserve support
of long-term 2y2s at par.
Many
at that time maintained that the

portance to all of us as bankers.

NY Inv. Assn. to

con-

recent speech

Reserve

York:

Controversy

controversy

investors in government

will be continued.

quote

investing institutions can safely
regard fluctuation of a couple of
points (or even more) in prices
0f long-term bonds without conCern, provided the distribution of

One policy

*"2™^
earning assets of commercial

must necessarily be,

propriate to the character of their

If?
the

from

The Support Price

maintaining orderly

in the government se-

conditions

of the Vice-Presidents of the

Federal

ernment

banks, it is obvious that any facdaily tors having a bearing on the interest rate structure and prices of

his

residence is at 353 Anita Drive, in
Pasadena.
His Balboa home is at
225

o v

in the amount

A Vice President of the Balboa

Taxpayers

H. Grier

should

briefly from

reserve

war
problems arising from the
maladjustments which were a natural consequence thereto.

guar-

anteed

of public debt management was
an aftermath of the wartime expansion of the debt, and the post-

3 1,

investment business in 1927, join¬

in raising the discount rate
requirements. In fact,

fixed price level. In this

it probably would not be incorrect to say that the entire concept

owneu

securities

the

and

commer-

cial

year

tern

7,249

he became assistant to the Foreign

Advertising

policies,

Inasmuch

this

market

other exists and main-

This policy of

of rates
taining it in an orderly manner has the undesirable effect of abis not, in my judgment, neces- sorbing reserves from the market
sarily synonymous with support at a time when the availability of

ing price of bills was eliminated,

serve

upon

providing

But

term rates to rise, the fixed buy-

Re-

advocate

support

one.

when

securities, are
Treasury and

army

being

of government

Switzerland.

served

Department permitted short-

ury

firm

the price level

Fed eral

bank

forestall the collapse which it was
feared would follow. The Treas-

cur-

rates,

money
and

in 1947 and

was

Reserve

loans, and the steps
taken to check the expansion and

ing

that

the most significant factors

graduate of the University of Lau¬
sanne

without fear

contradiction

successful

Commitsales and
exchanges of government securities by the Federal Reserve banks
with primary regard to the gen-

tee to direct purchases,

port is necessary, as there must
always be a market and an order-

I
am,

of funds invested in government bonds.

both

and

will be the policy of the

ment bond market when such sup-

rently

England

educated

was

business and agriculture, it

merce,

eral business and credit situation,

power

presiding chairman of the or¬
ganization in 1941. He is, as well,

chairman of the group in 1949.

market to meet the needs of com-

1948, and still
of Federal
of the govern-

and

Vice President of the Bond Club

bal-

money sup-

is desirable.

of Los

better

the

in the

supply of funds available

opposition to fiscal policies tending to depreciate purchasing

Company, Roussel, long ac¬
tive in civic affairs; ^was one of

following statement:
." With a view to increasing

com-

rates.
Because of forthcoming
Treasury refunding operations, foresees no shortage of reason¬
ably attractive yields on government securities. Urges strong

fornia

the organizers of Town Hall

bond price support,

moderately higher interest

Paul announced.

Vice

relaxing their rigid policy of govern¬
Chicago bankers sees trend toward

are

bringing the money and

ply, and not inflating it.
Conversely, in a period of declining
business activity and prices, making credit more readily available

it is increasingly apparent Treasury

year

time the Reserve Board issued the

central bank is to do its part

ance

art

Asserting since first of

modity supplies into
by deflating the

Vice-President, First National Bank, Chicago, 111.

Roussel, prominent Los An¬
geles investment broker, has been

supply and a shortage of commodifies, the traditional function
in

By JOHN H. GRIER*

LOS ANGELES, Calif.—F. Stu¬

(2057)

May 16,1950

-v

14
1*

(2053)

The Commercial and Financial Chronicle

often

are

A Defense of Man's

Right

yond

In the

can

fact that

finite in faculties! In form and
moving, how express and ad¬
mirable!

In action how

angel!
In
like a god!"

apprehension,

complicate

for

life—television.

sciously

the

they

uncon¬

how

authenticate
Seldom.

of reason."
The

date:

the

sider

merchandise

significance in

swallows

whole:

this distracted

same

world wide

when

areth

was

Alexander Wilson

Mount

"Olive

nearly

the

same

Faire
are

Our

some

make-believe

Thinking

people in

world

who

this
too

are

lazy to think.
to think

time

not

live in

tose

Many are too busy
they think they have

think

and

mind.

the

aforesaid gentry go
through' their
daily activities and motions in a
state of

selves
fine

hypnosis, deluding them¬
the thought that the

with

least

resistance

their

but

ally they do not know
mortals

usu¬

it for these

times lack¬

are some

ing in initiative, resourcefulness,
perception and discernment.
V Like other humans, they sleep
nights, eat three square meals a

day, work their eight hours
then

bed

somnolent

again

for

and

another

period, day

after day
in' and year out.
But
really what moral and physical
justification is there for their ex¬
istence on this earth? Would
and

year

missed

after?

tomorrow

Are

they
the day

they serving any

ful, creative

use¬

constructive pur¬
pose outside of the humdrum task
of living? No! Would their
leaveor

taking from this

world of dreams

and

unaccomplished

leave

gap

When

done,

endeavors

anywhere? Again No!

everything

how

mortals

seem

many

perform

said

these

one

and

really

and

thinking

our

as¬

presumption and not

naked truth!

many peo¬
test to what

apply the acid
they study or read, or again, what
they are told either in
church,
school, theatre, movies, or on that
articles:

the

MWhy

Not

following

"Chronicle"

New League of Nations

Good

and

this

Bad

Propaganda

Insure

Permanent Peace," and
"Reply to Critics" of this article, also
"Peace by Force in an Uncivilized
World,"

Americans

Isolationists?"
"The
Failure of the White Man's
Civilization,"
"How President Truman Can
Regain his
Lost Prestige," "Is Capitalism
the Cause?
of Wars ?" "A Critical View
of American

Politics,"
Advice

"Straight
Gov.

Prosper

from

Dewey,"

without

Foreign

the

Shoulder

"Can

America
Trade?"
"A

Plan for Solving the British
Crisis," "The
^Sun'
That
Was," also "The Widow's
Mite and The
Indispensable

Penny."

Reprints
•nailed

these

request.

articles

Address:

will

propaganda

monopoly
and

ing

beliefs

opinions is
Yet you will

two

East

the

banks.

times
the

products

called

for

five

"Mounds"

are

and

Stanley Works has filed

letter

SEC

ering about 5,770 shares of
stock to be sold

mon

pany

the

by the

market.

cov¬

com¬

Proceeds

would be used to pay bank loans
for working capital.
There

Stock-, and

will

announced

proposal

of notification with the

National,

banks

!:'
*

■

Stock¬

company.

both

sell

cents.

Hartford

surviving

holders
at
on

principle.

candy

company's present lead¬

"Almond Joy" which sell for ten

Trust,
which has 8,000 shares of $25 par
stock
outstanding,
will
receive

con¬

when

Wilson, 25 Oak Ridge Ave., Summit, N.

truths

approve

construed

text,"

embrace

may

all

de¬

partments of human thought.

(7) Our concepts of spiritual
matters are the known resultant

are

meet

of the

directors.

East

currently outstanding 762,856

shares.

act

Hartford

ir-

Trust will be operated as the East I
Hartford Branch and facilities will

Ot the total of 400,000 shares of
common stock offered to Southern
New England Telephone Co. stock¬

enlarged.
The addition will
bring
the
bank's
number
of

holders

which

expired

branches to five.

shares,

After

the

merger

v':'A? The

$25^

through
rights
April 21, 398,396
99.6%, were taken up.

offering

not

was

under¬

and

even

prejudices

and

radio

said to have

dailies

era

columns in ours

flooded with paid press

are

and

television

broadcasts,

the writer is coming to think that
the public listener can be made

by the Bard of Avon in his play,
"Henry the Fourth," is more ex¬
pressive: "Lord, Lord, how this
world

given
Witness,
if

please,

you

conquered

old

Eastern

France

Italy

and

even

State Department and
ernment

departments

victims

said

are

the

propaganda line.

that

understanding
elements

can

make

ing" may be briefed as follows:
(1) Theologies, dogmas, creeds,
rituals are merely human con¬
cepts and observances which are

always
and

open

revision,

error

abuse.

(2)

faith

based

best,

religious

belief,

understanding and the
knowledge of life's mysteries are
human

positions
ises

think"

and

certain

true

things

ible,

"we

false

visible

sup¬

prem¬

think

regarding
invis¬

and

not

proof

experience,

intellectual

what

readily susceptible
explanation.
,

(3).Truth, in its various mani¬
festations is something which we

with

oc¬

Ex¬

f
our

give them the victory.

The

same

was

the

(1861-5).

"War

The

divine

invoked

our

by the North
Southern brothers and

Was it not Voltaire who made
this observation: "It is said that
God is always on the side of the
heaviest battalions."

(9) In
anyone

the

writer's

much

truth

thought

mental

than,

political parties in
the head

ligious sect,
Jewish, etc.,

plete

the

quarter.

payments
At

the

and

prepared

advertise¬

members

club.

Brindley,

Blair,

Rollins &

Co., is editor. The issue
published for the club by the
San Francisco "Examiner."
is

The

during this
year-end,

"Uapeworm"

institution

first

short-term notes payable had been

$2,400,000.

the

appeared

now

club,

contracts.

will

control all such

negotiate

contracts

conduct research of

1929.

(Special to The Financial Chronicle)

CHICAGO, 111. — Howard W.
McKinney is with Sills, Fairman
& Harris, Inc.,' 209 South La Salle

and

Street.

well

He has recently been with

Central Republic

distinc¬

Company.

tive technical nature for
industry.

With Wefel & Maxfield
Colt's Manufacturing Co. has

cepted

nearly
under

chase its
to

cepted
an

stock

ten¬

Tenders

were

approximately

remain

with

Hartford

off

loan
bank

Inc.

outstanding

full

PRIMARY

Corp.

May 12

loans

the

plan

•A.:.

MARKETS

Connecticut Securities

as¬
as

used

Tifft Brothers

pay

Established

shut down in

and

reopened in

York

Curb

Boston

Stock

Exchange

9 Lewis St.

The plant
September, 1949,
after

York

New

company to re¬

March

1907

Members
New

operations.

was

Tel. 7-3191

Exchanges
(Associate)

Hartford 4
New York:

Bflrclay 7-3542

Bell Teletype HF 365

in¬

We maintain:

Primary Markets
in

Connecticut Securities

not

simpleton.

CHAS.W. SCR ANTON
MEMBERS

any

and
on

should,

page

NEW

YORK

STOCK

CO.

EXCHANGE

New Haven 6-0171
New

Ft.
was

Hartford and

stock¬

on a

$340,000 and
would provide $170,000 in work¬
ing capital. These additional funds
sume

Bank

loan from the RFC.

would

would enable

associated

Maxfield,
Building.
He
.

share.

mortgage its property and
for $600,000
to be used

security for

formerly with Foelber-Patterson,

125,000

sets

The

become

"• %

Rayon

holders voted

has

Wefel

Wayne

ac¬

about 71,000 shares.
£

WAYNE, IND.—Harold E.

Sheffer

$6,525,000,

of about $52

will

(Special to The Financial Chronicle)

;

FT.

price not

total cost of

average

There

the

stock at

53.

shares at

all

■

ac¬

its offer of April 3
to $7,000,000 to pur¬

own

exceed

untrue,

and

having

i With Sills, Fairman Co.

Cheney Brothers has. organized
a new division, Industrial Fabrics
Division, to handle government

to whether

country
any church or re¬
Protestant, Catholic,:

Continued

cur¬

1949

cannot

short-term

without

automaton

better

Co.

its

loans of $1,450,000 as of March 31.
The management expects to com¬

The word, policy or edict of
the
heads of any country
(King, Czar,
President or Prime Minister) or of

the

off

estimation,

their statement is true
a

Brass

paying

who takes another's word

fundamental

question
is

The

Benjamin

Bridgeport

rently

country

by the South against their Northern neighbors.

for

and

believes

time,
circumstances.

and

against

the "objective
fundamental think¬

thinks

States"

law

ap¬

off and

the

simplest terms,

now

articles

the

being

is, when everything is

changeable

(b)

correct

supreme

Germans,
Austrians,
Italians
prayed that their God would kill

Elements of
Fundamental Thinking

the

group's an¬
being dis¬
p ap e r
contains

satirical
ments

moved to two of the other
plants.

to spend up

the

and our allies in World Wars I
and n prayed for the destruction
of our common enemies
while the

truth, patriot¬

party,

tributed.

public auction for
Operations have been

dered

Objective

holds

(a) The citizens of

ism begin in government?

writer

amples:

ship, honest and true American¬

the

beginning

only man's concept,
interpretation
of
what
he

casion

Communist

ism, faithful service, good citizen¬

its

the

and

spir¬

God"

and

inefficiency, sophis¬
try, platitudes, error and treason

since

regarding certain car¬
dinal principles and such under¬
standing can be utterly erroneous

line of waste,

Reduced

Confucian,

have set

believes''

Where does the

end and where does

Hindu,

"thinks

gov¬

conjunction with
nual

said and done,

own

other

property
$400,000.

his

infil¬

our

medan,

Europe and Asia, besides

indoctrinated
trated

possessions

the

conflicting
differences
of
thought
and
vagaries which the various re¬
ligious leaders and faiths (Cath¬
olic, Protestant, Jewish, Moham¬

ture of God

England; also Communism at the
point of the bayonet in Russia and
her:

declared, meant and

Witness

(8) The divine law "pertaining
to, or derived from, or of the na¬

the

conservative

desired.

of time.'

Communist strain in the spread of
Socialism

other sects)
itual tenets

lying."

In San Francisco

Aspinook
Corp.
has
sold
its
Lawrence Print Works plant and

thinking from a long series
impressions, precepts, tradi¬

releases and the air is loaded with

news

Trading Corp. to export machine

our

superstitions that we have come
believe to be true and equit¬
able or in essence man's version
of what the Saviour of Mart' is

much of the

Alexander

tions

"Are

cents. The

SAN
FRANCISCO, Cal.—The
doxy masquerading as the real Export-Import
Bank, sales will be San Francisc o
"Tapeworm,"
thing.
Shakespeare's statement:; paid for over an 18-month
period,. humorous publication of the San
"In religion, what damned error
Francisco Bond Club, issued in
but some sober brow will bless it

of
The World Is Being Surfeited With

proach

Seriously then, how
ple

Wall

'■ ">

i;.

holders

double-bar

"Smile-A-While"

commonly; accepted humbug, tools to Central and South Amer¬
hypocrisy and ortho¬ ica, Through an agreement with

and
of

reasoned fact

dis¬

privileges?

•

i'1-'

nonsense,

same

unselfish act in their
entire lifetime which would
jus¬
tify their worldly existence and

•Writer

have

fallacies, perverted

our

take

without much seri¬

way

sumption

interested,

coconut

the
1

errors,

daily work, responsibilities, prob-, to believe anything.
Truly, this
lems and play, is the proper
generation is cursed from morn
caper,
to night with true and fictitious
j
If this be so, they are certainly
propaganda, or perhaps this line
dead from the neck
same

The

and

line

these days is just merely bare

coma¬

Thus

much

prefer to

commonplace and

state

hook,

thought.

How

There

politics, religion, jury trials, in¬
vestments, freedoms, and every¬
thing tangible and intangible in
ous

years ago.

Laissez

school of thinkers

adage that "There Is
Nothing Permanent In This World
Except Change" either in sub¬
stance, thought, the sciences, our

' '

Likewise

spoken by the
Man of Naz¬

2,000

working capi¬

modernize

Tapeworm Appears

and

it had

beyond

unadulterated truth.

(6)

•

learn

sinker?

free," has

age

merger of the

and

like to call

correct in

for

and

your amazement that it
packaged
written.
takes courage of the
so
-The Lucas Machine Division of^
highest order
beautifully with cellophane and
to innovate a new
bears a pretty label of which 25%
idea, a new New Britain Machine Co. is one
is nothing more than an exaggera¬ truth, a new invention or discov¬ of the group of manufacturers
that,
tion, which the trusting public ery or to revolt against popular has formed
Machine
Affiliates

make

promise

said

word

and

because

the

intellectual

peddling

you

age

not accept some radio "huckster's"

truth

shall

can

toothpastes, med¬
icines, cure-alls and everything
salable and
consumable, do we

"Ye

the

debts

pay

(or others set

right
change.

of what

questions?

Or, take foocl, candy, bed sheets

know

the truth

and

,\.A

.■

000 will be added to

and

up.

•S5',

■

Of the proceeds, $300,-

company.

liquidated

Peter Paul, Inc., has inaugurated
sales of its new chocolate-covered

tal and the remainder will be used

company's plant.

understanding are
always
susceptible of change.
No man

and pillow cases,

man¬

shall

these

were

backlog of orders built

Connecticut watch

in¬

(5) Man's knowledge, his beliefs

is blind;

ventories

loan from the RFC, the first

year

and

hour of the day? Yes. - Do
With penetrating wisdom, Rous¬ they foolishly take those state¬
ments,
facts
and
claims
for
seau said, "General abstract truth
is the most precious of all bless¬ granted? Yes, often. Do they ever
man

Watch Co.

$1,800,000, 4% 10-

us)

criticism

every

ings, without which
it is, the eye

accepted

incontestably

exaggerated
and questionable statements and
claims
they read and are told

set up

New Haven Clock

has obtained

ethical, religious, so¬
Directors of Hartford National
cial and political standards and
Bank & Trust Co. and East Hart¬
conventions .which we are told,
ford Trust Co. have approved a
(or which we like to believe) are

family

our

should

Thursday, May 18, 1950

Connecticut Brevities
such loan to

fallibly correct regardless

latest mechanical nuisance to dis¬

and

possibility

error.

claim,

rupt

the

(4) No philosophy or social or
political postulate, or religious
or theological construction

following satire, the author facetiously combines irony
a
gentle reproachment of his fellow men for
unthinking acceptance of the meaning of fundamental facts and
truths and for taking the purport of the world's mysteries withand ridicule in

"What a piece of work is man!
How noble in reason! How in¬

wrong"; be¬

reasonable

doubt

understanding,

believe

thing is "right

By ALEXANDER WILSON*

careful check, serious thought or common

truth, all the truth and nothing
but the truth, but
unfortunately
we
do
not, most times, reason
things out for ourselves whether

To Intellectual Freedom

out

told

York Canal

6-3662

Bridgeport

Teletype NH 194
Danbury^

New London

Hartford

Waterbury

7-2669

MtmvtWMk mMWr'iM^WtiSMM'xXun': acr/MHiUult

W,i

•ft!

■Volume 171

Number 4908 .;. The Commercial and Financial Chronicle

(2059)
;

Continued from page 8

there

A'.

Banking in the Years Ahead

least to normal and will
probably
drop even below the normal rate.
The low birth-rate of the

how successful

sion years of 1931-36 is bound to
mean fewer
marriages during the

change their maturing bonds for
new Treasury securities.
To the

early 1950s and this will inevit¬
ably affect the demand for new

these

houses.

purchases, the Treasury must go

depres¬

Within

few years, there-*

very

extent

the

trying

bondholders

Treasury wTill
persuade these

to
to

reinvest

ex¬

that the redemptions of
Savings Bonds exceed new

the

commercial

•

' "• •«, '

seems -

•

prospect

the

level

yieds

'$<4

today, this isSue "is still

undecided.

The

battle

lines

are

A Congressional sub-cornmittee headed by Senator Paul H.
drawn.

interest
mitted

rates

should

to rise

nnind

decline

will

probably

increase.

will

not

per-

significantly above

report submitted to the Conlast January by the Presi-

gress

temporary. When the rate of new
family formation again recovers
to
normal, the rising trend of

happen to bank de¬
posits? Actually we have already
pretty well answered this ques¬

real estate loans will in

tion.

all prob¬

ability be resumed.
The

third

tions,

major

sponsored

deteriorate in

offers

almost

We shall thus

confronted by the
of the automatic ma¬

chine and

occur

are

time.

war

ourselves

know-how

President

The

find

President

change

reforms

made in

What

—

Social

Truman.

suffer¬

New Boom Sponsored by Deficits

sectors need not get less, but those
in
trouble
would
draw more—

ventures

good prospects.

into the hands of small businessmen who need

ing.
But then we would be al¬
ready in a depression, and for
some

small

for

—

With an
outlook for further profitable
expansion, the small business¬
man
often could obtain longterm capital aid from wealthy
President Truman
individuals or from larger finan¬
cial institutions. In this way the vigorous smaller
concern
could make use of its opportunities for
growth.
"With the increased mechanization of industry,
the capital needs of small business have greatly inr
creased. Adequate venture capital, however, is no
longer available from traditional sources. This is
not because there is any shortage of savings. There
are ample
savings; the problem is to channel them

cial set-up.

collapse

relatives;

partner

much

sharper depression than
perienced,
ruining the

etbooks.

process

abrupt and dis¬

followed

Treasury and the consumer pock-

run

the

If so,

Eighth, in the presence of war
Russia, we shall have to
simultaneously a maximum
demand for Army personnel for
the purpose of occupation, and a
maximum demand for productive,
output. These will immediately
bring the automatic factory into
importance as one of the first
needs for fighting a war. The per¬
sonnel to develop the automatic
factory already exists among those
trained in electronic engineering
in the last war, and among those
developed by that generation. It
is a conservative prediction to say
that the large-scale automatiza¬
tion of industry will then take
place in from two to five years.
with

frequently

go the French or the German way

caused

face

sonal; savings. If the business
weathered its initial period of
losses, additional money was

The tendency to hoard side: it over stimulates production
is pronounced when symptoms of. and speculation.
What then?

reserves.

price

and the unemploy¬
by a radical reor¬
ganization of human valuation 'in
society. If it comes in suddenly,
its impact may be catastrophic,
and revolutionary.
ment

may

urgent

NEWARK,
Miller

announce

Cronyn
with

the

sentative.

firm

Broad

744

that

has

J. —MacBride

Co.,

Street,

Kenneth

become
as

sales

A member of

associated
repre¬

the Bond

Club of New Jersey, Mr. Cronya

formerly associated witlr
Seventh, if the apparatus comes Paul
J. Mahoney, Inc., New York*
gradually, it may be possible
and with J. B. Hanauer & Co.,
manufacture, and is with the aid of a good deal of
much of a threat to thinking to offset the social, dis¬ Newark.
in

was

Tht Commercial and Financial Chronicle

(2068)

is best for you.
In Russia, the market. Such capital is sub¬
do the job to which, you are, ject to double taxation normally,

what

Banking Industry: "Half-Slave and Half-Free"

you

assigned

W. W. Townsend points out this situation is developing a creep¬
ing paralysis, which is forerunner of Socialism and Communism./
Speaking

"The

Outlook

that they were lesser

for

make them

the

Finance Industry/' before the
Nassau
County Clearing House

Association

the

Garden

City

this

Townsend-

1 t

not

cerned,

free,"

can

tion

situa¬

intoler¬

able

place and

there

little

very

do about the entire

owe

but

tors

they

at least

they
their

their

deposi¬

just

exactly

understand

send, "are being distorted in the
interests of politics.
Regulatory

when, why and how the present
situation with which they are con¬
fronted
had
its
beginnings and

bodies,

how

Federal

the

Bank and

serve

the

Re¬

interests of the

banks and of

since

ism

the

the New Deal.

early

was

and

war

days of

the

greatest

evils by comparison,

v.r

of all evils,.we in¬
whole host of lesser

cording
The

Tax

the

average

new

undone

Institute

Orient.

carry

Dr.

There

But

what

country?

but the fact

reason,

prise is venture capital. Venture
capital is risk capital with which
investors
back
new
or
existing
enterprises.
Venture capital, subject t<r puni¬
taxes, is being driven from

tive

road

Continued

jrom

ing."

the

Brookings Institution in Washing¬

ton.

The
creased

points

1950

ore

finds

the

Canadian

1789.

iron

signpost for fu¬
development.
The basis of

ture

one

•

economy lies in steel produc¬
tion. The dwindling Mesabi

and

considerable

the

finds

billion

and

first
in

came

1865

World

population

our

provides

foundation for

increasing

the

essential

lieves
and

that

and

six

not

blindly

accepted

care

twenty

times.

education

about

be¬

for
Of

public

class
We

25%

The
are

in¬

it."

not

going

the

be¬

war

has

been
since

find that

the

into

rather

in¬

funds

Health

with

private

thirty times.

the

received

national

government

believe

wealth

but

dissipation

from

investment.

omists

Moulton

offers

some

sees,the

protein.

sea

source

comments

upon

the

possibility
of
growing .certain
food crops on the ocean's bed.

dollar

every

fasci¬

sometimes

which

Court

tried

transcend

explain

General

(Judge Mulat

illiterate

the
the

Sessions of the

York

presiding)

queen

trial

them, which

of New

murder

Italian

some

jury duty but was
excused by the District Attorney
from serving and then penalized
by Judge Mulqueen because of his

reservations

regarding

punishment in

some cases

capital
and not

others.

(11) It
the

to the writer that

seems

line

above

course

action

leasoning
the

was

and

guiding

conclusion in the acquittal verdict
rendered in the Dr. Herman Sand¬
ers

March 7, at Manchester,

case,

New Hampshire.
Truth

?v If

truth

tellectual
we

was

than

for

in¬

what

solemnly define as the differ¬
between right and wrong, or
justice and injustice, or

between
between

cents

today's

dent

the

sees

dence

trend
and

Giannini, Presi¬
world's largest bank,
away from indepen¬

initiative

free

en¬

income

world?

Other

countries have greater land
areas,
material
resources, i : more

American

which may merit your
L. M.

national

troubled

other

areas

' What
then, is the basis for the
position of the United States in

human

attention.

and

which

that

beautiful

and

true, good
which is
horrible,
tbe

that

untrue,
bad
world
would
from

resources.

onl.y

have

not

man's

warlike

suffered

barbarisms

and inhumanities and the perver¬

into

the

direction

Federal Government paternalism.
He

said

great

recently "it
day
for
the

people

all

stations

will

American
when

they

awaken to the fact that the bene¬
fits
of
the
so-called
Welfare

State

are

not

free

paid for in full."

but

must

"They will," he

Wars.

•

From the

//.

system.

be:

can

What,

the

then,

system such

now

resounding success while others ity of a
dismally? There are, after all nations
only two ways of life. All systems have a
variations

based

forced

way.

the

we are

improvisations

free

way

Under the

free to make

facing the future possibil¬
third world war while the
on

both

sides

claim

monopoly of truth and
justice on their side. So, after all,
what is basic truth, your version

the

free

sys¬

the

want.

force

are

get what

free to sell

other

Jews of

deaths

war

told

the

atomic

formula

bomb

when

500,000
for

when

cer¬

Hitler

6,000,000 of God's anpeople to be barbarously

some

cold

blood.

These

were

To
do

beings.
degradation

descend and for what! ! !

Vicit

Who,
then,
is
fighting
for
truth, for justice, for humanity?

of history

pages

cific

eternal

afterwards

area

used

the

were

atomic

re¬

The

Nagasaki, per¬
haps needlessly killing thousands

which

and

which

Hiroshima
tens

and

thousands

non-

record.

not
an¬

the

made up for

What Is Truth?

bombs

are

time

immemorial question,

Pontius Pilate asked

Christ:

"What

thinkers

Truth?"

and

Jesus

one

philosophers,

combatant men, women and chil¬

poets and prophets, men of letters

dren.

and

crushed

told

are

that

earth will

which would

"truth

rise again,"
comfort¬

scientists

understanding
climes, all races,
no

thought if we had not devel¬ themselves to,
oped! and used the atomic monster nium.
on
Japan and in the event of
The most
hostilities

tunate

this

country

proceeding

world

war

that

outdo

unfor¬

third

against

any
Outlaw
Russia, with the hy¬

Nation

drogen

the

until

affirmation

propounded

during

and

address

millen¬

to find

that

man

has

generation
humankind
has

every

which

bomb.

tried

the

all

faiths

all

searching question of
"What is Truth?" is the

ages

great

millions

peoples

faith—will continue

able

preparing

well

valid, unchanging,

satisfying answer for the every¬
In the opinion of the writer, we day
relationships of life and living.
are
to be blamed for our own
The Apostle Paul's Letter to the
predicament because we brought
Philippians gives us an illuminat¬
the atomic bomb into the world
ing exposition of what Truth is in
and now it may
boomerang on its fact and
principle
originator. The ignominy for this
action
"Finally, brethren, whatsoever
in
innovating this mass
murder
will

Frankenstein

Japan

hard, for this country to

things
are

are true, whatsoever things
honest, whatsoever things are

just, whatsoever things are pure,
whatsoever things are lovely,
our
atomic
offensive
against whatsoever things are of good re¬
Japan as retribution
for
Pearl port; if there be any virtue and if
there be any praise, think on these
Harbor
and
also
other
persons
who honestly believed that the use things
Yet, there

were

many

the

cities
war.

atomic

bomb

Japanese

was necessary to shorten the
Still others believed the re¬

ports

that

John M. Wenner to Be

that

persisted
after
V-J.
Day, that Japan was ready to sue
for

before

peace

■

the

bombing
and

occurred
Hiroshima.
?

Daniel Rice Partner

atomic

Nagasaki

CHICAGO, 111.—Effective May
18, John M. Wenner will become

partner in Daniel F. Rice and
Co., 141 West Jackson Boulevard,
a

Intellect's Place in This

members

What is the most important ac-.

tivating
what

force

the

responsible

Universe,
for

Midwest
Wenner

the

Stock
has

New

York

Exchanges.,

been

with

and
<

the

our

for many years in charge of the
thoughts, understanding, impres¬
investment department.
sions; for man's great achieve¬
ments and failures; for love, for
hate,
Jasper Corp. Formed
rancor,
faith,
hope
and
charity, our emotions, conceptions,
(Special to Thi Financial Chronicle)
.

imagination; for everything under
the sun?

possible and at

that is the
kind

made

Mr.
firm

JASPER, Ind.—The Jasper Cor¬
poration has been formed to

President sanctioned the

for

the

Warsaw

Veritas

version?

Regrettable Act
A

did

the gas cham¬

Or,

depths

men

office,
the Japanese

Germans

off to

Treblinka

likely
gorilla

or more

what

successor

used

the

they carted

Generals and Admirals in the Pa¬

There

search
way

fellow's

The Atomic Bomb; A

and

be sold.

The

other

our own

choices and rely upon persuasion
rather than

level

antic-

man-killing

savage

much

his
the

non-combatant human

Unthinking World

by ignorance and greed, hate and
fanaticisms.
And this old world

fail

tem,

find

experiments in New Mexico Who is justified and who is
had proved its catastrophic power. justified?
Only the Fates can
This in spite of the fact that our swer those
questions when

beginning of time, the

world has been drenched in blood

answer

makes the American

are

ordered

his

not

after

sion of religion, education, s^ien^e
and culture in the last two World

The

and

terprise

stay

Right

live down.

comparison

in¬

sincere Americans who considered

Trial

ence

These predictions and estimates
deal with the scientific and
physi¬
cal
almost
entirely. There are
...

was

for

human

between

provoking monkey
the

bers

death

future

in which the writer

years ago

econ¬

Many

that

taxation

going to the government is a truly
urgent danger signal.
:

nating possibilities in the harness¬
ing of energy from the sun's rays.

his

opinion
extenuating

Dr.

want

you

politics."

fore

author's

understand

state, local

normally concerned with

production

with

agree

■

the

are

State

debt.

budget

ever
now

functions

not

At¬

will

without

vast intellect¬

lacking

somewhere

caused

benefits

dollar

states.

War I.

income

shelter

times.

een

crease—

To Intellectual Freedom

and Federal treasuries.

will

personal

crease

for

maintenance

about

crease

tire
and

expansion

home

the

than

almost limitless

economic expansion.
The
Brookings economist

budget

during the

multi-billion

tween

the

bulk

in¬

dollars.

services

billion

good time.
Dr. Moulton be¬
lieves that the unfilled desires of
great

has

times since

estimated

43.3

interest

Our

concern,
so
Labrador come

budget

thousand

The

veterans'

Range

caused
that

ten

this, 25.7 billion, or more than
half, goesrinto national defense,

our
u'V

Cannon, who was ever
a
stark
realist, said something
like this: "Never vote against an
appropriation or for a tax in¬

Would

killed

panelled

Federal

that Americans can be
eight times richer than they are.
says

you of
politics.

Uncle Joe

A Defense oi Man's

and

//be paid for in the loss of

tne

known

intellect?

remind

precept

page

legal, church and natural laws in
the spiritual world, as we know

property, constantly
mounting taxes, both hidden and
direct, and in the high cost of liv¬
ing aggravated by deficit spend¬

our

have been

nointed

say

personal

has

terest,

closing, let
basic

irrigation canal

clared:

slippery

world

vacuum,

tain

there

says,

ual

word that you say, but I will de¬ ported to have stated that Japan
fend to the death your right to. was in the last lapses of defeat be¬

'the

would

Ghetto

(10)

Future?

future

primer of free enter-, the

The pump

writer

Moulton,

vast

accurately charac¬

jungle

personality,
intelligence,
objectiveness and accomplishment.
system
by
which
government
Can you imagine Man without
drains off these funds will then go
a
mind, without a brain, without
dry.
The

source.

hundred taxes.

hardest

misery'."

the

Dr.

subjected

great fountainhead
from
which
tax levies flow, will dry
up at its

down the path which

Nourse

terized

repeat, it is
always good to be home.
What of

was

says,

fewer than

can¬

Signs of the Times
J

the family

$450 in taxes

circumstances

the

purchaser

car

Your breakfast egg, the Tax

commu¬

the

and

the

Continued jrom page 17

Foundation.

however, why basic errors in fis¬ review and analysis as to its ver¬
cal policy, such as deficit financ¬
ity.
The Great French Philos¬
ing during periods of high pros¬ opher Voltaire may have had such
perity/ should be allowed to/per** a thought in mind in his famous
sist.
Their continuation is bound
reply to Helvetius when he de¬

accentuated

the consequences

escape

trend

present

ultimately,

and,

mistake.

c\f its loss, which would have been

dulged

times from each cake of soap, ac¬

thing in the world is to unmake

by the emergency presented by
the war; and in order to win the
J-

the

capitalism, which

this

progress

and

cave

have been, and all

not

goods

forward

"Much that has been done

has been devel¬

the

state

carried

triple and quadruple tax¬

nism.

sort of creeping paralyr

as a

ever

being

from, the
would

take' ation under certain circumstances.

of itself the forerunner of social¬

not

"This situation

toward

banks' depositors.

oping

inexorably

Office of the

Comptroller, are issuing their in¬
structions quite as definitely in
the interests of the government's
fiscal policy as they are in the

sis

Thursday, May 18, 1950

and .Witnessed,
would not have
and services as the This anemia of the lifeblood of come to pass.
'.///
/;/.://
free enterprise,
government furnishes. The alter-/
this scarcity of
As a result of his intellectual
native is to do without them—or risk capital, is causing grave con¬
strivings,
we ; have
man-built
worse.
No one bothers to persuade cern among economists and busi¬
cities,
skyscrapers, automobiles,
Ivan.
nessmen.
V
/
VV-'/.//, "
railroads, tunnels, bridges, ships,
The large brokerage houses are
Under our
system, then, the
airplanes, and everything material,
consumer is Czar. He, by the mil¬
going to the grass roots to raise
as well as the development of law,
lions, dictates whether this com¬ money for business.
They ap¬ medicine,
science, literature, cul¬
pany or that company shall re¬ proach the farmer, the small mer¬
ture and the arts.
'■/;;//■/
main in business,
v
chant, the worker.
Another Czar, quite different in
Risk capital must be tempted
If Man Were Brainless, His Level
character and purpose, also sits in to leave the comforts of tax-ex¬
/ Would Not Be Higher Than
judgment on business. He is tax¬ empt Federal,
state
and
local
The Animals
ation. He lives by the earnings of bonds. Without such financial en¬
Without Man's brain, the world
others. His tribute is exacted 164 couragement, free enterprise, the

conspiracy

themselves,

stockholders and

possible as was the situation which
finally provoked the Civ*i War.
"Economics,'
a
A
Ji o vVil —

such

You

pays

the bankers are con¬

circumstance

Tnwnspnd

im¬

and

supply

distorting it
element of de¬

normal economy.

"As far

1 f-

are

receive

you

NKVD,

the

bus.

part in

slave and half-

law of

were

being asked to
live

and

we are

which has

mand

When

potatoes

the potatoes

demand;
injecting

circumstances

but the law is still

repealing the

and

under existing

re¬

learned to fly

farmers'

then destroy

that

bankers

the

buy

t s,

cannot

learned to circumvent the law

of gravitation

con-

stated

When

circum¬

can

they

there and still operates.

business
bank

laws

but

pealed.
we

Skinner & Co.,
and

old

vented

President of

evils did not

good and in the course
cannot
escape their

"The

week, W. W.
Townsend,

Inc.,

time

else

from

such

consequences.

Hotel

visit

and

...

only
one

above

the

mals—Man's
Without

lectual

one

answer

gift that lifts
level

and

faculty,

God-given

Mans

securities business.

en¬

Of¬

ani¬

intel¬

advance

ficers

are

Arnold F. Habig, Presi¬

dent;

the

intellect!

this

gage

man¬

Sermersheim,

Vice-

President; H. E. Thyen. Secretary;
and

Ray F. Schneider, Treasurer.

Volume 171

Number 4908

The Commercial and Financial Chronicle

...

(2069)

ful

Too Much Government
J

Presidents

ing "too much government," resulting in

asserts

hav¬

we are

menaces freedom.
Decries loss of individual responsibility
through excessive government regulation, and says "way to
protect human rights is not to socialize them." Says millions
are
penalized by current inflation that is "wracking the country
in the name of security." Scores "deficit
financing."

today

maying example
servation

too

about

little

dis¬

Dryden's ob¬

of
talk

and

too

have

social
Some

been

engaged

who look

you

ernment action
our

mighty strug¬

to gov¬

the cure-all for

ills may be startled

numerous

by this statement—that

our

moral

acute

■■

gle

tor

and

problems

survival

—the

"cold

war."

the

takes

Yet

nowhere

will

the

peace

grow

government

do.

against

the

nothing

are

With

old

under¬

the

revolt

laissez-faire

government

do-

philosophy

all the tangled

has

strands of that

responsibility

struggle

welfare,

brought

lized society
jungle law of fang and claw, with

gether

to¬

place

one

into

woven

its

Bernard

crisis

initiative

tne

Barucb

Jeft

crisis,
the

We remain too obsessed

enemy.

with

today's
details
to
think
through the bold strategy so vital
for tomorrow.

What is

lacking is not so-called

"information."
been

inside
has

There

much

statistics,

survival
■

Yet
more

life

subject

the

end

result,

would

for

the

was

Darwinian

selection,
good.

That age had never met Hitler.
With
government
regulation,
we

must

now

man's

consciously define

relations

his

neighbors,

of the various segments of
to

another.

one

ourselves

society

consciously
poses

greater
problems
than
taking things for granted,
trusting to the automatic work¬

that

law

carry.

return

there

are

community
point of no

beyond which government
and the lack of re¬

intervention

sponsibility
slow

non-producers
production
and

among

all

down

defeat their

years

inflation

the

tion

that

has

country in recent
such injury to those
incomes and wages—

not

has

do-nothing

been

the

result

economics.

has

from
government-managed
economics, from government fa¬
voritism
to
cert a in
pressure
come

groups,

disregard

the

straints

must

earn¬

those

wiped

enemy of saving.
In
Soviet
Russia,
saved up

lated

should

work

ernment

ruble

slashed

Russians
left

over

but

sistence

level

be bad

Eastern

munists
other

have

form

feudal

Europe,

the

and

slavery

You

their

paid

are

After

crops.

the crops are collected the money
is ruthlessly depreciated.
To

get

working credit for a new crop,
the farmer is compelled to join a
communist - dominated
organiza¬
tion which controls his planting
and

returns.

Wherever

they

the

power,

wrecked

have

Communists

the

value

come

decide

Nothing

quite

are

You

and

good

take

can

Today the need is
self-disciplined
leadership.

for

With

the

training

have re¬
self-discipline
which can only come from your
own souls,
you will find open to
you positions of ever greater trust
and
responsibility—positions
in
you

ceived here and the

which

you, holding
and freedoms

values

firm

the

cherish,

in leading this

join

can

country
fuller life.

towards peace and a

have

■

money.

bad

bad.

are

the

all
upon

The world is always in need of

inflation.

petual

amidst

pressing

which

that

generation.

stand

changes

than

leadership.

They have robbed savings of their
value and
keep the people en¬
slaved through a system of per¬
:

must

which

None

confused

outlook

Security Dealers
Anniversary Dinner

has

MpM

purposes.
by our great communications
this inflation, as you happened here—yet. If American
To lift the levels of human dig¬ know,'I urged that in war, prior¬ fiscal
agencies would exhaust our paper
policy becomes a perpetual
nity and living is a proper func¬ ity controls be accompanied by an inflation
supply. Of what avail is a forest
machine
as
"deficit
of {acts if we have lost the art of tion
of
over-all ceiling over the entire
government.
I
joined
financing" would make it—the
with both' Woodrow W ilson and economy, over all prices, all rents, result must be to enslave us to
sitting on a log and thinking the
facts
through?
We appear
to Franklin Roosevelt in their pro¬ all wages, all costs, with taxes the government.
have
lost
our
ability
to
dis¬ grams of humanitarian reform, in high enough to eliminate profi¬
One of man's oldest delusions

To prevent

own

that

better¬

nothing for granted.

an¬

inflation.

far

confronted

many

and

near-

—

through
example,

for

tyranny

the

oppressive.

and

difficult

which

Com¬

demonstrated

Yours

savings their government had
wiped out.
In

for

believe that any longer.
have seen that change

sub¬

they died.
hope to regain

can

All

until

never

encouraged to

measures

taken

can

was

bare

that change meant progress.

the

na¬

tional interest.

are

City College, it was taken for
that change was good,

all

forty, nothing

work

They could

For

moral

society.

granted

the value of the

one-tenth.

our

Everywhere in the world today
Nowhere is there
peace.
When I was a student here

and

deprivation.
Then, ruthlessly, the Soviet Gov¬

highest

there is change.

people

their rubles, the accumu¬
and hopes of a gen¬

Unless

ment of the race."

Sav¬

sweat

eration

j}ot,

Woodrow Wilson wrote, "It will
a
bad day for society when

the

suggest all the

earn¬

out.

'govern¬

problems.

our

sentimentalists

productive

assured

does

laws, it will wreck

provide

they

most

ings win not be

liberally

the

with

and

their

Farmers,

Inflation Wracking Country

Look

are

futures,

enor¬

when

ings of competition.

thinking habits.

women

their

ings

was

whether, as some say, community with fixed
responsibility should be every¬ firemen, teachers, policemen,
thing—and individual responsibil¬ nurses, civil servants, pensioners,
ity nothing. This doctrine ignores the aged, and others.
This infla¬
human

for

regulate

general

baa

intervention

this
ever-expanding government
activity is brought under the re¬

ing is the first bulwark of
Inflation is the worst
of security.

interests, the
a

shift from do-

mere

government

itself, solve

gospel of security
deficit financing is evi¬

and

men

individual

natural

"security."

able to put aside part of the

each

through

wracked

the

dence

we now

detail.

own

ment

false

through

re¬

philosophy

to define

that

process

some

face is

now

There is

public

Are

government,

looked after his

years,

The issue

confused.

assumed

lation.

limits to the burden

To print all the facts collected

fit¬

Old

False Gospel of Security
This

natural

our

relations in

government intervention or regu¬

can

"real

the

many

"news," so
alleged

been

do-nothing government is
Virtually every phase of

dead.

the

rightly so.
Civi¬ regulate
cannot survive the mously

never

has

many

stories."

never

community
the individual

for

and

economic

from

stagger

with

sense

ruthless

But

continue
to

come

test.

unified

global
fabric. We

Under

not necessary

that the

you

nothing

all this has been done

name

own

phi¬
losophy to be replaced by nothing
better than a "gimme mine" phi¬
losophy?

"Cure All"

their

system of plunder

new

do-nothing

Government Not

to¬

wno

of the national treasury?
Is the old "let me alone"

ernment grows.

much."

Yet,
the

get votes?

thougn not entirely.

the role of gov¬

public.

They have been

insecure.

of govern¬

furtner
or to

made

coun¬

has been largely checked,

to have

those "who think

For live years
we

sharper

ever

they

power

The plunder of
sources

that

Washington

interests,

perpetual inflation

are

the governmnet.

the

and

unselfish

ment

wanted

despoil

invoke the

day

Chairman, War Industries Board, World War I

who

resources

How

By BERNARD M. BARUCH*

Elder Statesman and adviser

alone"

try's

interests

"let

llSi

—

tinguish between the true and the

the

false, the good and the evil.
•'
The object of all fact-gather¬

collective

Adamson

eight-hour

day,

bargaining,
economic
for farmers and other

equality

I opposed the
is to furnish material for "new freedoms."
thought and reasoning to arrive conscription of labor in the recent

ing

sound

judgments

which

can

war,

lead to clear and constructive de¬

velt's

cision

it.

action.

and

"liberal"

for

That

ours

confusion

well-intended

significant.

indi¬

cates ti at the failure of our edu¬

thinking habits.
in the

well

bad

I refer to morals

broadest, ethical

sense. Too

many people seem to regard good
morals and good intentions as the

thing.

same

upon

values—

vances

everything would be reduced to a
cynical zero. Values, in turn, rest

discipline,

upon

behavior

one's

values

the

rights

live

we would
such
values,

and

teachers

not

protect human
socialize them.

chief threat to human

longer

ernment,

rights
of too little gov¬

one

have

may

been

thirty

years ago when this School
of Business and Civic Administra¬

attempt

educational

the

failure

the

"know how" of thinking

instill

students

and

Pressure

Socialism
Is

there

never

these two

I have already remarked on the

folly of dealing with national and
international problems on a piece¬
meal
basis, without a thoughtthrough strategy.
Let me now
turn to the moral dilemma which

grips

*An

all and which will grow

address

Anniversary
School

by Mr. Baruch
the
Founding

Business and

tion,

College

May

11,

the

30th

the

Civic Administra¬

City

1950.

New

York,

line

prices

rise

an
over-all ceiling, as had
originally been recommended.
By then the damage had been

done.

With the war's end, we scuttled
The

ran.

process

net yet

infla¬

in sight.

Millions

been

penalized

through a cruel reduction of their
purchasing power.
Was that just,
fair?1
What

greeds or
strongest

appear

is it to

pressure

the

be subject

higher ethical restraints,
if so, what are they to be? 'j

and

That is the dilemma which will

through the rest of
You will have to ask

you

lives.
not

should

ment take

the

govern¬

action, but how can the
government's action be made just
and fair to all?

nothing

told,

was a

printing

gold

lead
caves

to
or

burying

concrete

dun¬

instance

every

these
•

Harry R. Amott

"Deficit

moral

would

you

risen

Moreover,
has
of

practical

itself

has

depreciated

1939 living
60%.

will

ernment

—

life insurance, gov¬

bonds, thrift accounts,
and
pension funds.

annuities

Week after week,
were

bit by bit, these
put aside by millions

for their old age, for
home, for sending a
child to college.
To the extent
that these savings are cheapened,
of

system
It has

failed.

Eng¬

land, where Keynes and his school
born,

were

cannot

finance

her

the

ability

care

for themselves and their fam¬

government,
we ilies
cloak for power¬ been

these

weakened.

made

millions

They have
dependent upon

Security Dealers

Association will hold their Silver

Anniversary

Dinner at

dorf-Astoria

Hotel

the

Wal¬

(Starlight

Roof).

Harry R. Amott, Amott,
Co., Inc., has been ap¬
pointed Chairman.
>
&

Baker

own

recovery by deficit spending.
this country, when the recent

deficits

better

calamitous

lion

predicted

depression.

unemployed.
campaign of fear

American

the

deficit

spenders

people,
pressured

and

got tax reductions.
In¬
flationary increases in prices and
wages

Treasury
dollars.

ended,
five

and

after

the

been

Lee Huber

has

date,

thirty

war

that for at least

stated

possibly

seven

there

war,

years

would

Goldman,

work than there minds and

the

iers Department

the
no

either

Nor

strive

INDIANAPOLIS, Ind.
A.

Wilkinson

Sheerin &

with

—

Orville

Thomas D.

Co., Inc., Fletcher Trust

Building.

Thomson & McKinnon
Adds

Staff

(Special to The Financial Chronicle)

INDIANAPOLIS,

Ind. —Hiram

and: Bernard

become

Thomson

Neitzel

with

affiliated

McKinnon,

East

suggest

that

is
a

With Harrison & Austin

do-nothing government
desirable

that
for

many years.

Market Street.

Now, what I have said here

for

(Special to The Financial Chronicle)

;

McKee

Wreck Society

Pine

not

Ever Expanding Government Will

return

Co.,

City.
He has
firm's Cash¬

With Thos. D. Sheerin Co.

have

York

do.

reduced, there would be

intended

Sachs

Street, New

budget deficit today.

not

May 13 completed

of association with.

years

been in charge of the

billion

the

before

Even

the

cost

forty

Goldman, Sachs
on

With

mil¬

Ten

were

Waging
against
for

Leo Huber 50 Years

ended, the apostles of bigger

war

persons

buying

The New York

financing"
as

economics.

tried.

been

which,

increasing pen¬
unless the spiral of in¬

"deficit

convicted

Failure

necessarily followed.
I opposed reducing excess prof¬
;vV
draw its taxes after the war, an action

;

around

Financing"

flationary ' policies • and
deficit hands to do—no matter what
spending are halted and pressure government did or did hot
After that it depended upon
groups fought off?
Every form of saving has been peace.
If those taxes had

sums

it,

gold,

efforts have brought ruin.

these

have

sions

tion by pressure groups was given
whirl after whirl—with the end

be¬

value,

changing

and

good

shall

This
law
allowed
to 110% of
It

with

some

its

control

attempted to "hold the line"

and

of working and saving
money trick—lowering

geons.
pres¬

parity; it left, wages free.
When
this broke down, the Administra¬

have

moment?

were

price

plan
w a s
parsed.
legalized
inflation.

tion

necessity

only after much costly

What

yourself

es¬

production

political

piecemeal

costs

whichever

your

and

delay,

go,

confront

Adjust¬

where

made

stimulate

under

beyond

groups

have has been that he could avoid the

relieve inequities.

Instead,
sure

date.

recognized that since

in socialistic England?
government action
to
be
prompted by the sheer expediency

disciplined grounding in ethics
—is all the more tragic because
qualities in
:■

and

not

government

coming

were

is in Soviet Russia, and

which

would

Only recently increased old-age
Groups Strongest Under pensions were voted.
This justly

greater need.

could

from this inflation?

failure—

plan

fixed

some

ments

government action may be swept
away.

teach values without discipline!
to

was
founded.
' Freedom's
regulating tion
light of greatest threat today is too much
the rights of government,
that all limits to

strong
backbone
of
selfdiscipline.
Yet how many of our

dual

form of government.

way

the

This

long

the

Morality, in other words,
requires both good intentions and

and

pressed further in

others.-

schools

been

present system,
These ad¬

come—as

preserve our

for, what

our

can

years

regard as good and evil,
Without

under

made

have

This

sential

farm

advances

the best in the world.

The

for.

world.

Enormous

what

die

rests

the

over

But

Morality
what

favored

pensions and
aged, infirm 'and

handicapped, and have urged that
America take the lead in lifting
wages and working standards all

cational system is a double one—
of bad moral habits

advisers

favored

have

care

Failure of Our Educational System

when President Roose¬

even

teering.

treated everyone alike.
It would
have frozen all prices arbitrarily

should

possible.
cease

equitable shar¬
ing of the fruits of our produc¬
tion.
I do want to impress upon
a

(Special to The Financial Chronicle)

SOUTH BEND,
Toth

rison

has

Ind.—William J.

joined the staff of Har¬
&
Austin,
Inc.,
National

Bank Building.

(2070)

The Commercial and Financial Chronicle

Continued from page 6

spending!

matter,
in

New Factors in
that

limited

flexibility,
1%, or even

lower,

the short-term sector of the

mar¬

ket, and somewhat increased flex¬

ibility in the long-term sector.
Nonetheless, while no one can
that

guarantee
the

two

interest

three

years

not fluctuate more than

kept

will

new

obligations,

interest

rates

borrowing

only fair to

makes

imperative.

point out,

have

are

whether

the

(3)

(4)

ernment

the

prospect

chronic

Foreclosures

properties

depends

actions,

the

with
but

will

in the foreseeable future,

mainly

because

inclination

there

Congress

the

longer

sufficient
all

for

omy

however,

Oh, now and
lip service to

then,
econ¬

in government, but the vote
practically always for more and

job

was

give a particularly good
account of itself from an
operating standpoint, despite which the
market action of its stocks over the
past couple of months has
been disappointing.
Perhaps in some quarters it is felt that the
heavy property rehabilitation program that still faces the
company

theless, many rail analysts see a particularly bright future for the
company and feel that even current results
justify considerably
higher prices for both the preferred and common stocks.

ing; and it

Prior to

installation

of a new management a
couple of years
Chicago Great Western was traditionally a high cost
producer.
The equipment situation was
poor and the roadway

ago,

property had
been allowed to deteriorate
seriously. The first problem tackled
by the new management was that of the equipment, with
particular
stress on motive power. A
program of dieselization was instituted.
The projected diesel
program was completed last September.
The
effect

operations of the

new

managerial policies is best illus¬

trated by the trend of
transportation costs in recent years.
The following figures
compare the trend of Great Western's
transportation ratio since 1946 with that of class I carriers as a
whole:

keep

directed

Western.

touch

Class I
In

1949

42.1

governmental

well

vated

onerous

from

confronting the management was to re¬
property.
This is a considerably more
lengthy process than the mere purchase of new
equipment. Also,
it was not started as
early as the equipment program. Last

year an
program was started, with the result that the
road's
maintenance of way ratio was
among the highest in the industry.
Moreover, this program has been accelerated in the current
year.
For the first
quarter, in the face of somewhat lower gross rev¬
enues, maintenance of way and structures
expenditures were above
those of a year
ago by the equivalent of almost
$1 a share of
common stock

aggressive

outstanding.

Despite

quarter

was

equivalent

maintenance

been

$1.24

the

whole net

common.

Good

will

prop¬

thoroughly rehabilitated

the

real

earning

power

revealed.
Granted continuation of traffic at or
around
present levels this real earning power could well
come to $8 or
$9
a common share, or about half
recent quotations for the shares.

corporate

are

principles

bonds

2.25%

corporates

basis,

tod

are

basis

and

2.58%

they have been currently,

the corporates are too close to the

governments in

yield.
There are
than 33 basis points in value

between

government bond with

its protected market and
issue

without

corpo¬

protection.

Likewise, municipal bonds have
been ruling at levels which are
high

and

with

the

which

are

government

out

issues.

line

Al¬

though I do not expect such prices
again, some people seem to forget
that the municipal bonds in the
"Bond Buyer's Index" sold on a
5.52%

basis

particular, I
the

small

Dec.

1933!

concerned

about

local

municipal issues
which have been bought in many
instances because of local pride.
Their

again
did

limited marketability could
prove

the

very

dangerous

thirties.

Also, the is¬
suance of the
anticipated mediumterm bonds by the Treasury for

financing will adversely
affect even high-grade municipal
issues with 5-to-12-year maturi¬
ties.
A comment
may

this
a

two

be helpful. As

you

mortgages
all know,

country is riding the crest of

construction boom.

This

boom

especially rampant in housing.
Government intervention, partic¬
ularly
cheap
financing
under
government guarantee, is at the
base of the tremendous construc¬
tion activity.
There

are

four

aspects of this

friend, "a

per¬

low

the

interest

and the high level of com¬
modity prices. Although we now
have, and may expect a continua¬
rates

of, greater flexibility in rates
prices in the govern¬

market

ment

the

issues—both

the

short- and

long-term issues—the market

for them

tected.

will continue to be pro¬
this
connection,
it

must

that

pointed

should

out,

future

however,

occasion

de¬

mand, certain issues will be per¬
mitted to go somewhat below par.
Such
controlled
fluctuations of
two

three

points

would

concern

the true long-term

but

Harold

President

the

Bank of New

Roelse,

Federal

not

holder,
Vice-

Reserve

York, put it, in what

prices

chronized

preserve

the

cipal

any

syn¬

fashion.

the

Any attempt
purchasing pow¬

income

of the

prin¬
inevi¬

equity purchases
tably increases the risks—and

well increase them

may

disproportion¬

ately!
On

the negative

side, competi¬
government, both direct
and indirect, is increasing.
Labor
costs are high and the power of
tion from

labor continues to

increase. High
corporations and the
possibility of even higher rates
depress the market prices of all
taxes

Also,
taxes

come

high

personal

in¬

adversely

have

af¬

fected the demand for equities.
On the positive side, the capital

gains tax of 25% makes equities
desirable for holding by those in
the higher income brackets. The
average return of 6.5% is more at¬

tractive in

comparison with bond

yields than
fore the

it has been since be¬

Many corporations,
especially the larger ones, are in
strong financial position because
war.

increased

postwar

demand

and

wartime tax policies caused

a large
part of the net earnings of recent
years to be plowed back into the
business, which greatly increased

the book value and earning power
back of each share.

below

are

paid
than

last

have

been
year

While

earnings

dividends
higher rate
because corporate
year,

expansion has been largely com¬
pleted. The market for stocks is
on
a
sounder basis than
when
stocks

common

for

perhaps
must

important of all, as long as
present
social
philosophy

prevails, there will be

tating depression such
fered in the thirties.

devas¬

as we

This

suf¬

means

the

government will launch
flood of public works, housing,

relief, etc., when business starts
serious downward trend.
at least

sures

This

as¬

resonable level of

business and profits for the well-

companies,

especially

when the labor cost is not

im¬

and

these

advantages,

bank

with

access

analyze

disadvantages
seems

competent

that

staff,

competent

staff,

watch

only

and

the

not

also

basic

risks

such

see

near

government

bond-

rather

the

cause

holded

look

future which
par

definite place in the

portfolio, especially to the extent
that tax-exemption is heeded. But

quality, marketability,
and
the
possibility of adverse effects when
the Treasury, as it will sooner or I
later, issues medium-term obliga¬
tions, should be carefully weighed.
The bonds of the

Bank,

although

mentioned

International

not

previously

this talk,

obvi¬

are

ously quite appropriate for bankinvestment.

High-grade corporate bonds are
currently too close to governments
in price and yield.
The greater
safety of the government issues

and the

market

advantages of a protected
are
worth considerably

than the current spreads in¬

dicate.

(';

•

Common stocks, as always, have

shortcomings; but under

certain

conditions, and for certain pur¬
poses,
their current high yields,
compared to bonds, make them
desirable.
In
buying
common
stocks, however — no matter for
what purpose — it must be re¬
membered

that

the

dangers

great and the pitfalls
It

are

many!

"gilding the lily" to point

out that

basically your investment

program

should be determined by

such

internal factors

tion

as composi¬
capital-deposits

deposits,

ratio, and character of loans. In
particular, your investment poli¬
cies should be fitted to your loan,
policies.

Fortunately, the favorable out¬
look for business in the next few
months

puts

you,

general,

the enviable position of being able
to pursue safely a policy of, as
the

philosophers put it, "modera¬

tion

all

things"!

what

And

could be better than that?

New York Stock Exch.

Weekly Firm Changes

economic

The New York Stock

changes:
Transfer of the Exchange mem¬

bership
stein

the

Stone

act

Stone

May

will

Alfred

late

Donald

considered

floor broker it is

Eck¬

will

nership

of
of

Mr.
individual

understood.

Exchange,

draw

New
as

Harry
the

New

Stock

Marx

City,

will

York

New

part¬

Graham,

York

May 31.

York

25.

With the retirement from

Co.,

the

Exchange

has announced the following firm

industry, but
and political
trends, is warranted in putting a
larger proportion of trust funds,
company

the

nothing in the

member

portant element in total cost.

Weighing

assume

will

Most

holding—and
trading profit as well-

policy." I hasten to add that I

being used in the market.

that

short-term
a

enjoyed their last

boom because little bank credit is

our

Municipal and other tax-exempt

with the question
about
equities

move

words,

issues have

not

well

may

than down to it!

complete hedge against in¬
Equities and commodity

managed

held

to
1949
levels
earnings would have
share, after adjustment of taxes. In the open¬
ing 1949 quarter earnings amounted to
$0.80 a share. Obviously,
such extraordinary
maintenance work is, by its
very
nature,
merely temporary. At least the major portion of the work
should
be completed by, if not
before, the 1950 year-end. Once the

been

the

"good!"
They have, in my opin¬
ion, been too high for several
years.
When long-term govern¬

Had

amounted to $1.95 a

erty has

its deficit

modest

drop in gross and the higher maintenance
charges, earnings month by month in the first
quarter have been
higher than in like 1949 periods. For the
income

light

enunciated, what investment pol¬
icy should a banker follow now?

AAA

The second problem
the roadway

job to separate the wheat

the

rate

your

the

investment"!

issues.

39.8

habilitate

the chaff.

39.5

completed last September the record
has been little less than
phenomenal. In the final quarter of 1949
the transportation ratio ran month
by month from 8.5 to 9.8 points
below a year earlier.
Moreover, for the first quarter of the current
year the ratio, at 32.6%, was 8.3 points below
year earlier levels.
From the standpoint of
transportation efficiency the road now
ranks well up among the leaders in the
industry.

presupposes .access

What Investment Policy to Follow

ments

The importance of this accomplishment is
apparent when
it is recognized that at the 1949 level
of revenues each
point in the
transportation ratio is equivalent to $0.92 a share of
common
before Federal income
taxes, and $0.57 a share after such taxes.
The long-term trend of
transportation costs is in itself impressive.
Since the diesel program was

made

what

not

trends.

by the immense amount of
available—it's really an

1949

points.

economic

material

34.6%

industry Great Western between 1946 and
improved its transportation expense ratio
by just short of 11

the

flation.

trends

good information. Moreover, the
problem of information is aggra¬

1948

relation to the

weigh

it be understood that equities are

Ability, to do this requires train-,,

40.3%

40.0

all

property

where their purchase is permitted
for trust funds. At the
outset, let

necessitates

44.6%

47.8%

economy

analysis

1947

Great

This leaves

dynamic investment policy in

should

adequacy of

loan

Now, he has to Worry
about
politics,
pressure
blocs,
cold wars, "uncompensated com¬
pensated"
budgets,
and
many
other things. Truly, investment is
a
24-hour-a-day
job,
as
these
things go on night and day.

detracts from the appeal of its
equities and that the real earning
will not be fully demonstrated until at least 1951.
This
earnings consideration is unquestionably true. Also,
dividend/pplicies are apt to be quite conservative for
some time to come. Never¬

power

probabilities

What About Equities?

cycle.

You

manent

with interest trends and the busi¬

Chicago Great Western continues

rate

direct interventions of gov¬
ernment in economic affairs.
It used to be that the investor's

Chicago Great Western

safety of regular
same localities.)

correctly assay the other and

chief

because

war

are

have
been
prophetic
April 12, "The investor
who attempts to get a long-term

ness

and

amortization
light of these
probabilities.
Mortgages
found
wanting should be brought into
line or sold before they
become,
as Eugene Field, the
poet, said of

management programs and
monetary management actions, as
they take form.
In addition, he
must

properties

decrease

provisions

debt

pays

today

soundness of your valuations and

principles of in¬
Nowadays,
he
must

vestment.

the

bonds

the

money.

the

four

years.

keep his eye on Washington and
correctly interpret the long-term
implications of the fiscal policies,

save

someone

similar

values, especially of old proper¬
ties, in the next two or three

investor

Title

the

reduce

point

and

authorities, that it is

know

These

debt

credit

monetary policies of the Federal

war

of the

some

under

mortgagees,
adversely
affect
the

wiil

thus

Reserve

cold

losses

cause

gov¬

Treasury

and

financed

ou8
may
be anticipated.
(Al¬
though such foreclosures will not

budget deficits. This is said, part¬
the

on a

mortgages in the

management

equities

attractive >as;; before

and

value

now

into

Fluctuations

conclusion,

not

regardless of the supply of hous¬
ing, especially if business activity
turns downward.
! 1

conditions

they

much

'In

tion

Deficit financing; and
Low interest rates.

new

Controlled

substantial basis

High taxes;

(5)

hous¬

Public housing activity will

be continued

(1) Big government;
(2) Military preparedness;

Deficits

permitted,

is commonly done.

likely

are

excess

activity and employment.

ness

balanced

by:

ex¬

localities

(2) Slackening of the housing
boom will adversely affect busi¬

future marked

than

levels—before the end of the year.

brief,
heavy heart to

where

in¬

new

look to

Some

(1)

serious

escape

direct

ing—even at today's high income

described. In

with

must,

be sure,

taxes

are

to have troublesome

ac¬

ly because

low

condition which investors have to

practical matter,

demand

excise

the

face

spending.
floating debt, particularly the $58
billion
of E,
F, and G bonds,
as

Budget

Probably the most serious

by the high level of
The large volume of

are,

current

(3)

Chronic

necessitated

which

the

which

terest to bankers:

inescapable conclusions

from

which

rates.

interest rates have
low because of the
the

deficit

(4)

they have

great size of the public debt and
because

slackening

situation

political

business

cannot

Certain

pansion, and the declining price
levels, all point to easier money

in recent years, the range is bound
to be limited.

Obviously,

the

demand for funds for business

rates

sales,

wartime

flow

factors would prevent any ma¬
terial increase. The immense pen¬
sion funds, the high level of in¬
surance

when

misgivings
as
to
budget
will
ever
again.

did not have the

and

year

force,

tilting the scales in
favor of lower interest rates, the
basic natural supply and demand

from

say

full

government

policy aims

lVi%

even

have

tivity is at peak levels, when tax
rates
are
very
high and when

Investment Trends
lure. In connection with the out¬
look for interest
rates, may I re¬
mind you that current

1948-49

fiscal

If,

must

Thursday, May 18, 1950

...

Stock

with¬
Ex¬

change member firm.
Interest
Butler

the

late

Butler,

Marshall ceased

Arthur

Herrick

of April 30.

Volume 171

Number 4908

Continued,

from

page

ciled

progress

domestic cold

Investigation shows that es¬

still

tion

war or war

of attri¬

under

proceeding

activity.

in¬

index

cannot

the number of dollars to be divid¬
ed

sentially all this difference exists
in the national income component

the

produce less and share more. It
is the quantity of goods and not

Taxes: Whither Bound ?
uct.

measured

crease

industrial

rate

slower

and

demand

retarded

therefore

Production, Income and

among

that

governs

our

$300 Billion Goal

article, the fewer are the peo¬
can afford to buy it and

pay
the extraordinary costs of
government apparently projected

der recent trends and that is that

therefore the smaller the potential

for the future.

much

demand and the smaller the num¬

obvious

total

costs

faster

increased

have

un¬

than total

production. The
largest total increase is in wages
and

salaries

those

and
parasitic

government

salaries,

and

load inasmuch

make it.
For
not pertinent to this

employed

other

reasons

discussion, this situation also car¬

private

employ. There is also a great in¬
crease

ber

wages

this is a
as government pro¬

duces

nothing and must be sup¬
ported
by
actual
production.

with

ries

the

probability

and
longer
when they do occur.

deeper

depressions

must conclude that the higher

level of gross

product for the same

quantity of production for the
years since the war is a real im¬
pairment of our economic prog¬
atively greater than the increase ress. The only means of recover¬
in physical output.
All of these ing our lost efficiency is io pro¬
factors increase national income duce more goods and services for
the same money or to produce
and gross product by more than
the same goods and services for
is warranted by past standards of
less money. Neither seems to be
performance. It is a form of in¬ very feasible under present con¬
Finally, income from unincorpo¬
rated
business, including farms,
also shows an increase that is rel¬

inflation,

half-hidden

sidious.

ditions.

All of this has a very

bearing

If so, we must be recon-

years,

been selling tangibles for the past

industrial sewing machines

including everything from

textiles, recently became tired of traveling six to eight hundred
miles a week, and only seeing his family about once a month—
so he quit - the road:•'
*
. . .
,*- In order. to be near his family and come home each night
he started out selling accident and health .insurance.
He has
to

■

nice, business right from the start. He has only
job of selling intangibles for about six weeks and he
fells me he. never knew anything could be so easy; I asked him
why he felt this way and he said, "I don't know but I just seemed
to be relaxed on the job. I start out each morning and I have my
leads. I make my calls and have an evening appointment which
been

doing

been at the

.winds up my day around 8:30 p.m.

Then I take a nice cool ride

home with all the windows of the car

hour to

do, this is a cinch."
Sometimes
do in order to

has

down—it takes me about an

in from my territory—compared to what I used

come

need to find out what the other fellow

appreciate how well off we are.

This

man

has to

thinks he

he can come home every night. He doesn't
hours he is putting in every day since he once had a

soft job because

mind the
harder

job.

finds selling

intangibles less difficult than the

positions he has held. I think I know wh.y that is true.
He told me that he has developed eight different "closes."

other

He
told me two of them and they were excellent. Just think of that
for a moment.
Eight different "closes." How many have you?
He told me how he uses "low pressure salesmanship," but it is
the highest kind of "high pressure." If his clients only realized
what he was doing he would never make the sales he is bringing
in every week. This man is an experienced salesman. I'll show
you just one example of it.
He laughingly told me that a young fellow from the home
office
to

had
it.

come

town

many

and

was

going to

show everyone how

of these experts who can tell you how

sell, this one ran true to form. He took out most of the men in
the office and that week sales were the lowest on record.
Of
course it is understandable—probably all the salesmen wanted to

him to some of their most difficult
prospects. Also, as you well know, the hardest sale in the world
is where two salesmen go in to see one prospect.
He immediately
freezes up and takes the defensive.
After a week of fumbling around, this field supervisor laid
down the law. He demanded that everyone come into the office

show

every

Mr. Big and took

Saturday morning for at least three hours. Of course this
since they were all on straight com¬

stirred the men's resentment

put in three hours on
Saturday, placed them in a position of having to accept an
ultimatum. My friend (who knows more about selling than this
little third vice-president in charge of pencil sharpeners will
probably ever know) brought out the point that it would have
been so much better if he had asked for cooperation rather than
putting his proposition in the form of a demand. He said, "I would
have told them, 'how about you fellows coming in for a while
on
Saturday and let's see if we can't smooth out some of the
rough spots.' Maybe we would have stayed for three hours or
even more, but at any rate everyone would
have been given the
mission, and the fact that they were asked to

idea that it was all for
of

their benefit and time well spent—instead

demand for them to give up

their time

weekend when

other things."
I asked my friend if he told the home office expert his opin¬
ion on the matter and he replied, "Good Lord no!
The little
fellow has such a big head now that if I tried to tell him some¬
thing for his own good he'd resent it. I don't need his help, but
some day I may need his goodwill in the home office."
That is what you call selling, my friends!

they felt they should be doing

subsidies

for

creasing.

indication of this.

may

conclude that

that

established

trend has been

new

the

level

higher

There is a
two-fold purpose in adjusting the
annual output data in dollars to
a
uniform price level.
One is to
in

prevailing

whether

determine

trial

1948.

production

indus¬

not

measured by

the F. R. B. index has a consistent

branches

three

these

long-range effect is
The increasing agi¬

unfavorable.

billion per year and are in¬
Since the war receipts

$60

in¬

our

government have varied between
26 and 30%
of national income

one

activity

business

The

continued

and

pay

and national income have been the

will ultimately have a bearish ef¬
on
demand and production.

highest in our history. In spite of
this, these three branches of gov¬
ernment as
a
whole
have had

for

pressure

fect

business

activity

has

been

for the

war

reasons

this

when

operating deficits in 16 of the last
21 years, nearly all of them caused
by the Federal branch which also

previously

mentioned.

Buying to satisfy this deferred forecasts deficits for the next two
years.
A return to normal levels
large extent by purchasing pow¬ of business will greatly increase
the
deficits
unless the
costs of
er acumulated during the war and
demand has been made possible to
a

expended

later

available.

This

1945.

When

who

have

demand

the

government

These increased deficits would ap¬

pur¬

operations

Federal

our

Federal

amount

collected

taxes

depends

much

the volume of business ac¬

upon

tivity.
National Income, Taxes and

Budgetary Results

pay

The

following data illustrate the

effect of

governmental costs at $55
with prices at the
collections at the

billion per year,

demand will decline.

level of 1948, tax

Business declines of 10% below
cause

are

the

because

is
largely satisfied for a time and
when these savings on the part of
many are sufficiently diminished,

normal

pear

those

from

means

sharply reduced.

became
of

goods

reservoir

chasing power has been drawn
performance is likely and upon to make purchases at the
if we wish to base the possibilities unusually high costs in effect to¬
of meeting the President's objec¬ day and the real value or purchas¬
power
of the
accumulated
tives on actual 1948 performance ing
funds
has
been
declining since
and prices, the first step is to as¬

shown

rates

troublesome disloca¬

the

and

business
below

tions of industry, employment and
Reductions of 20%
are

activity

indicated.

return

normal and
It is strongly

finance.

emphasized that these data are not
very serious. The relatively short forecasts of what will happen for
dollars and the
depressions of 1921 and 1938 were the year 1954 but are estimates
termine the measure or trend of
each somewhat greater than 20% derived from the
analysis of re¬
that influence if it is consistent.
below normal.
sults under the. conditions named
Both of these objectives were at¬
At the present time combined and
with
industrial
activity at
tained.
The level
of industrial
influence

output
in
other is to de¬

annual

output

and the trend or rela¬

This

was

FOLLOWING

and

less

this

annual output would be
billion instead of $300
billion.
An industrial production

pected

about $250

index of nearly

Consumer Prices at

Industrial Activity

230 would be re¬

and Taxes at Indicated Levels

necessary.

suggested by the President,
only to retain the in¬

need not

flationary

effect

cost increases but

the

postwar

also the added

It therefore seems that any

governmental spending

at 25%

at 25% of

Index

Income

for Balanced

Natl. Income

Activity

1935-39—100

(Billions)

100

179

$212

.«16-1

143

125

will

Budget

$53.0
49.0

178

28
31

162

196

that

observed

Tax Level

(Billions)

„

$2.0
-

3.0

44.5

remain

10.5

40.5

v..

14.5

free nation.

No real and

confiscatory
taxes of 26% of national income taxes is apparent under existing
would have to be levied to bal¬ legislative and executive policies.
ance
the budget while taxes of We should not be deceived by tax25% would result in a deficit of reducing gestures during an elec¬
$2 billion.
For declines of 10% tion year.
•
"■ iv ;
.... - ■fand 20% below normal, taxes of
With a debt-laden nation such

projected normal activity for 1954,

when

ford to pay such

relief

lasting

as
a

the historic alternative to

ours,
more

from

rational conception of the

responsibilities and costs of gov¬
additional

ernment

acute

and

inflation, voluntary or involun¬
tary, through further depreciation
of

dollar.

the

This

real

present debt level
production trends allow for
As a matter of fact these esti¬ no
appreciable
and
continuing
mates are greatly on the optimis¬ budgetary deficits without facing
tic side under present costs and this crisis.
Further increases in taxes will
conceptions of governmental func¬

price inflation of 20% above 1948 tions,
continued

Deficit

Taxes

Taxes: % of
Natl. Income

of Normal

people could not af¬
high rates. With
This is equivalent to a consumer taxes at 25%, deficits of $6 bil¬
cost of living index of 205 as com¬ lion and $10.5 billion respectively
pared wtih 171 reached in 1948. are indicated for the depressed
Thus to reach the goal of $300 bil¬ business conditions.
would

level

Billion Per Year

1948 Levels

National

1954, a price rise of 20% over the time

costs.

UNDER THE

F. R. B.

quired to yield an annual output
of $300 billion.
28 and 31% of national income re¬
This means that to attain the spectively would be required to
annual output of $300 billion in balance the budget and this at a

lion

1954

Per Cent

At this level of pro¬
duction and at 1948 prices the ex¬

FOR

CONDITIONS:

Total Governmental Expenditures at $55

in prog¬

was

than

depression.

1948

in¬

straight

business boom

ress

1954

RESULTS

POSSIBLE BUDGETARY

determined.
line trend may
then be passed through the actual
annual output in dollars for 1948
and the approximate annual out¬
put at 1948 prices determined for
any level of industrial production
measured by the F. R. B. index.
It was previously pointed out that
the projected normal level of in¬
dustrial production
for 1954 is
179. It would be greater than this

tionship

normal and below for

dicated.

consistently in¬ Federal, State and local expendi¬
tures are between $55 billion and
measured^

does

annual

in dollars

A friend of mine who has

their

come,

national

great and immediate improve¬

production

By JOHN DUTTON

important

upon our

fluence

Securities Salesman's Corner

value

ment in

sume

From all of these considerations

to increase the appar¬

serve
dollar

tation

the

ple who

what

income discloses

ent

sustained at abnormal levels since
That

ability to reach
the $300 billion goal mentioned
by the President and therefore to

of national

they

Our

standard of living.

the

guise of social gains,
This means a lessening of the
of gross product. In simple terms i
it means that goods and services efficiency
of production.
When
costs increase we must pay more
cost more than formerly.
Analysis of the constituent parts for goods. The higher the cost of
should be reasonably

(2071)

The Commercial and Financial Chronicle

especially

the

fields

of put business and personal expen¬

Cost

subsidies and social welfare.

Our

danger.

and

ditures

investments

rises during de¬
pressions and this tendency is
greatly increased under present
political practice. Unless policies
are
greatly changed, the cost of
government will rise appreciably
in the next five years.
To avoid
costs in excess of $55 billion five
years
hence, present costs must
be effectively reduced and there

ever-tightening straitjacket with a
corresponding reduction in em¬

and
legislative branches of our
annual government.
The figures shown
allow nothing for debt reduction
output or gross product. The same
and they also show no hope for
general
relationships exist
be¬
tween national income and indus¬ any
worthwhile
reduction
in
trial activity as those portrayed prices and the cost of living.
It
for annual output.
should be remembered that the
For the years 1929 to 1944, na¬ Economic Council apparently as¬
tional income when adjusted to sumed no real change in prices by

meeting this crisis head-on.
This
is what Russia has been waiting

policy based upon the attainment
,of such an objective may prove to
be very dangerous.
Relationship

Industrial

Between

Activity and National Income

government

income

ployment,
source.

and

tax

base.

at
the
Moreover existing savings
will

Revenue

dry

in the form of life insurance, an«-

nuities, savings accounts, retire¬
ment
pensions and government
garding the large expenditures of
bonds will waste away at accel¬
the government suggests that such
erating rate.
We cannot continue
expenditures
be
considered
in is no evidence of either desire or to increase our costs of produc¬
connection with national income courage to do this except on the
tion, of services and of govern¬
out of which taxes are paid. More¬ part of an extremely small num¬ ment at a faster rate than we in¬
over the
public is more familiar ber of leaders in the executive crease production itself without
The

with

foregoing

the

income

1935-39

conclusion

conception

than

with

that

re¬

national

prices closely follows a
straight-line trend as does annual
output. For the years 1945 to 1949
national income is higher than the
trend established in earlier years
for the same output and for the
same
reasons
as
previously dis¬
cussed in connection with annual
output.

1954.

possibly working for. She has

merely

underestimated the elas¬

ticity
of
our
economy
which,
nevertheless, has its limits. These
limits must soon be manifest un¬
less
the

our

political

navigators

people who support them

will

change our course.
Conclusions

Finally,
drawn

unless

the

from
we

conclusions

all

can

this

return

are
a

Goldman & Co. Adds

that
more

of the real
function of government under our
constitutional provisions, we shall

reasonable conception

preliminary figures for 1949 be faced with economic and finan¬
problems that will seriously
a further rise in our ab¬ cial
normally high costs and while test our patience and ability to
The

and

Goldman & Co.,
New

York

New

York

nounce

has

indicate

firm.

115 Broadway,

City, members of the

that

become

Stock

Exchange,

Thomas

an¬

M. Heyman

associated

with

the

•:

The Commercial and Financial Chronicle

(2072)

Continued

from first

the New Deal President won a

page

platform which was, of all the platlorms of our his¬
tory, the very antithesis of New Dealism, and his inaugura¬
tion brought a great lift to the nation precisely because it
appeared to promise a basis upon which the people of the
country could work themselves out of their eponomic diffi¬
culties—a goal not reached in seven years and more of

As
then

the

reported in

of his position.
Here are his
Associated Press dispatch from

absurdities

the

note

words

New Deal efforts before

There is nowhere

always taken'

country's economic affairs. Indeed,

for which

our

commerce

Union

was

formed

hand in

of the purposes

"We have learned that in

promote trade and
Some people seem to

for

dynamic, highly industrial¬

Butte address:

"Don't let anyone tell you that the Government should

some

retire

back to

businesses left for the Government or any¬
interfere with—and almost surely we would

meaning, if

any, can

This

be attached to the
for

view

of what

the

Socialism," such

rest

from

him

assertion that "we in

course) saved you

ill-directed wrath.
critics should be

from

seems

For that you,

wittingly,

than

seems

consequences.

ment to build

huge bureaucracy,
international, that
cripples private enterprise domes¬
national

tically

and

in foreign trade and
Since gold imports and

and

legally made,

exports,

the control of

banks

and

use

ol'

defender of irredeem¬

wittingly or un¬
advocate of Social¬

dictator¬

government

form.

some

long

the power

government

over

into

Socialism

has

people, that is
irredeemable cur¬
a

provided by an
rency, all efforts to stop
ment
disposed to lead
tend

a govern¬

people

Treasury,

and

government - owned
or
dominated institutions automati¬

cally gain

control

transactions in

all

legallyforeign
exchange.
Such control reaches
to exchanges of goods, to invest¬
ments, and to travel, and sub¬
jects the ingenuity of private en¬
terprise to the crippling impedi¬
menta

This is

government

regulation.

important part of gov¬
a nation's

ernment management of

people and economy. It is totali¬
tarianism

boundary

the

international

line;

and,
from
that
point of vantage, government conrtrol

is reflected

back

into

the in¬

ternal economy of our country

and

many

reaching

often

subtle

far-

and

ways.

Multiple Quotations of Dollar

(7)

Our

able

system

irredeem¬

has provided mul¬
tiple quotations for our dollar at
currency

This is

char¬

acteristic of weak currencies.

Af¬

ter

resumption of specie payments,
beginning Jan. 2, 1879, Secretary

Sherman,
students

one

greatest

cur

monetary

principles,

said in May of that year:
"I want
to convince everybody that
.

the United
have

States is net bound

its notes hawked about at

discount,

but

that

United

States

note

the

travel about
the world, everywhere received as
equal to gold coin, and as good
any

may

issued

ever

nation, either in ancient
times."

ern

ment

Today

cannot

claim.

any

mod¬

govern¬

our

correctly make that

cannot

and

does

not

prevent the so-called promises of
our

Treasury and Reserve banks,

the

form

irredeemable

from being hawked about

money,

discount.

Under

our

hybrid system of
and

currency

international gold

re¬

bullion

pressure

spending

all

sorts

efforts, or¬
and individual, to bring
upon Congress to end its
orgy

cialization.

and

should

this

time

that

Any of It True?

over,

there is

supposing

of this really true? In the first place, in this
country, thank God, the owners and operators of this free
enterprise system about which the President speaks are
the very people to whom he is
addressing himself! In final
analysis, the President is telling millions of Americans that

cept

the

ability,
our

that

good

any

restoration

can

march

succeed

necessary,

Reserve

notes

deposits are de¬
nied this right.
Our people and
institutions, with claims against
those
reserves
of
precisely the
same kind as those held by foreign

demands

There seems to be

good

reason

for

supposing that this spending
and dissipation can be ended so
long as the majority of Congress
is composed of politicians and so
they have an irredeemable
their disposal.

central
are

converting

Federal Gov¬

our

ment—it does
and
'

If,

Federal

Govern¬

ignore such

groups

individuals.

therefore,
Congress would

that

our

United

the

people

boss.

The

States

Gov¬

ernment

general
seems
today to be ig¬
The implication of that
of

governments

powers,

nored.

should
This

majority of
spare the people

of the United States the

should

people

and

World

War

payments
tained

I,
in

treated

this

tional
are

trol

suffering

nation?
Law

dies

though

eign

our

When

their
is

public
a

is
does

What

Constitu¬

the

power

of con¬

purse,

that

for

with

main¬

redemption at

1933,

procedure:

central

have
we

re¬

have

banks

and

govern¬

denying it to our own
people. This is merely one aspect,
but

important

one,

of the ob¬

session in behalf of international¬
that
a

has

swept

this

nation

mania.

has

led

supposing

Consequences

that

the

Irredeemable

Currency

na¬

another country to catastro¬
There s£ems to be no valid

reason

dealings

people

and

road

our

ments while

ask:

may

deprived of the

many

phe.

One

During

maintained redeemability for for¬

all.

arrangements

today

exist.

favor

suspended gold

our

freedom

by
concept

institutions.

countries, but

pondered
basic

most

constitutional

tion

the

normally there should not be—it

agent

autocratic

can¬

defense.

surely

their

this

policy

valid

any

responsible

tendency of

have

versed

Socialism.—

the dis¬

and gov¬

ernment from what should be the

ism

into

banks

That sort of discrimination

has become of Constitutional Law

people

of foreign

there must be discrimination—and

viduals.
a

governments,

ernments.

not

lead

Re¬

to those reserves

while they are placed at

rency can
ignore the pleas and
protests of such groups and indi¬

which appears to be the

and

access

Since

And, if it be disposed to

Federal

and

banks

denied

posal

currency at

These politicians have been and

holders of

notes

serve

home.

arresting

Reserve

only foreign
central
banks
and
governments
can
obtain
these
reserves,
and,
through them, the Treasury's gold.

have

into Socialism. A gov¬

Federal

computed

deposits,

for

possessing the powers
given it by an irredeemable cur¬

they,
one and
all, would have abandoned their farms, their gas
stations, their stores, their local businesses, and their other
sources of income, as well as their own
freedom of action,

and

ex¬

redeem -

are

against all their Federal

foreign

ernment

had it not been for the New Deal and the Fair
Deal

banks

is,
constitutionally,
a
government of restricted and dele¬
gated powers, while the
states

reason

Although the gold

reserves

All other

fact

of them,

and

yielding
self-serving
pressure groups has resulted in
profligate spending and dissipa¬
tion of our national patrimony.
the

into

first

the.

certificate

so¬

none

must face

redeemability in our currency.
(5) Our
government's i, move

amply

processes

the

Social¬

toward Socialism and its

are

ganized

But is any

these

other

governments.

inherent

possibly the only, means of
doing this lies in the restoration

long

clear

giant bureauc¬
depending upon it for their
daily bread, and their daily work orders! Such an idea
seems to us to be
utterly absurd. The fact is, of course, that

that

observed

a price, of
foolish selves and your
as well as some of our

disasters

be, and
probably will prove, futile.
The
people of the \Jnited States have

to us, would have been

and thrown themselves
upon the mercy
racy centered in Washington,

under

are

Federal Reserve

our

only by foreign central banks and

and

overwhelm¬

these efforts has succeeded. More¬

and

ship in

duly thankful."
Is

from

United States Treasury are usable

fact

the government's

over

ism

Washington have (at

your own

Socialism

able currency is,

hardly

such

immune

Our system of irredeemable
has enabled our govern¬

stricted

ism, that majority

ing that

imported from

farseeing fatherly Federal Government!

straightforward statement, it
an

(6)

currency

irredeemable

page

Monetary Policy

into

The evidence

abroad—would have become victims of their wrath but
a

he remembered that God is just!

their purse.

We cannot understand why

the Fair Deal had been

from

march

trol

greatly flattered by being told
in effect that the American
system—and, of course, with
it the position of
unique economic welfare which the
American people had gained for themselves
long before
or

remarked that he trembled

deemable, thus restoring to them
the power to exercise direct con¬

these elements should feel

the New Deal

once

to make the people's currency re¬

and instituted 'real Social¬

statement

his country when

Federal

President professes to think of

flattering to his audience!

for

will

common

standard, the gold reserves in the

The capitalist—that
people who own the tools of production and the
rest—ought to be eternally grateful to us in Washington,
not always
attacking us."
/
"real

behind the Emploijment Act of 1946.

Jefferson who

was

Continued

the

course

these

(8)

ism'—whatever that is—in its stead.
is

goes

enough jobs for those who need them.

are

the purpose

was

Washington had not proceeded to do
assuage your feelings you fellows in
general discontent would by now have

the heat of your
abolished the American system

economy

pledged the resources of the Federal Government
for the maintenance of maximum employment, production,
arid purchasing power. We are now committed to
keep our
country prosperous."

national

That act

during the past seventeen years
would have Socialism in this country,
real Socialism"? What the
speaker seems to us to be say¬
ing to the great rank and file of the people is about this:
that

the

days of 'boom and bust.'

that there

see

men

while

President's statement that but for what the New Deal and
the Fair Deal have done

surely

the

sidelines

The power of the
for the people to use. It ivculd be folly
for the people to be afraid to use their collective strength
through the Government.
"The strength of the Government is being used now—
and, so far as 1 am concerned, it will continue to be used—
to protect your jobs and improve your
welfare.
"Perhaps cur most important single economic goal is to

What precise

the

Government exists

Saved From What?

and

United States continues

home and abroad.

for

the last 17
has been the salvation of private business in this
country and has strengthened the private enterprise sys¬
tem against Socialism,
Communism, and all other 'isms.' "

this

all informed Americans well know.

Washington, Hamilton, Madison, or even Jefferson utter¬
ing such sentences as these taken from the President's

years

wise

Nothing, of course,

things would have been regarded by them as hinder¬
ing commerce and hurting the general welfare. If any one
doubts that this is true, let him try to imagine George

have Socialism in this country, real Socialism.
"The truth is that Government action
during

Deals.

been further from the minds of the framers

Constitution

our

Fair

and

Such

people to take.
In fact, they deny them still. All
of you, I am sure, have
heard many cries about Government interference with
business and about 'creeping Socialism.'.
"I should like to remind the gentlemen who make these
complaints that if events had been allowed to continue as
they were going prior to March 4, 1933, most of them

"If

Deals

New

could have
of

to keep our economy steadily

"These lessens have been hard

else to

for

expanding.

would have

a play
by which the Constitution of the country is

words

employed to justify the statism of the day. Such terms as
promotion of commerce, and the general welfare
clause are cited as indications that the founding fathers
expected and demanded that the Federal Government go

during the period from 1929 to
happens if the Government stands on the side¬
lines—with men in high places merely smiling cheerfully
and saying everything is going to be all right.
We have
learned since 1933 that a government which takes
positive
action can supplement and support the
efforts of private
way as

the thou¬

It is in effect

the

We learned

claim made at Butte—for about

second

sandth time—is like unto the first.
on

Thursday, May 18, 1950

conducted

all.

More Nonsense

1933 what

business in such

this

repeated claim that Messrs. Roosevelt and Truman
the free enterprise system in this country.
sooner
that idea is dropped or exploded the better

The

ized economy such as ours, the Federal Government must
use its strength and resources to
prevent violent cycles of
boom and bust.

shred of evidence to support

exchange.

saved

have

the events since then.

"almost

entered World War II.

often

was to

the several states.

among

one

forget that sometimes, but it is true.
"During the last 17 years, however, the Government has
played a larger part in our economic life than ever before.
There is a reason for this, and one that is not hard to find.
The reason is the great depression of the early 1930's—and
the lessons we have learned from that depression and from

one

'■

scene:

"The Federal Government has
the

resounding victory in 1932

The consequences of our use
an

irredeemable currency

fused

themselves

have difthroughout

Volume 171

The Commercial and Financial Chronicle

Money is the bloodstream

ways.

>. -ober 4908

nation.

currency

rupted

irredeemable

diseased

and

bloodstream.

would

be emphasized

needs to

national

Sherman said of it in 1877: "A de¬

ious

preciated

sarily

harmon¬

well-being and

relationships

that

not neces¬

are

expansion in
the volume
of a portion of the reward of his of
money
and
deposits,
total
labor or production, and, in all spending,
and
national
income
times it has been treated by states¬ figures. Aggregates of that type
men
as
one of the greatest evils
may reveal nothing as to economic

robs

that

befall

can

who

man

lections," I,
in

cheats and

paper money

every

people." ("Recol¬

589.)

1919—and

receives

Keynes said
he

assumed

quoting with approval

was

indicated

such

aggregates

harmonies
When

maladjustments.

rapidly,

preciating

is de¬

currency

for

as,

ex¬

would be returned

nation's currency, as

done

when

the

where such power

is
act of dictator¬
currency

centers

nerve

constant threat of its

case

does

the infliction of the subjective

in¬

goods and services.

too late, as
sometimes in

rapid increase

omy.

private

dividual initiative in the develop¬

slowly
the

accomplishments

ment of international

nation's econ-

There has been

to their hands

belongs. The fact

that they might exercise that power

irredeemable, is an
ship at one of the most sensitive

nation's

agement of
it

magnified.

cor¬

Secretary

readjustments

later

(2073)

alter

not

keep

the

has

been
past,

the

fact

the

that

tends to

use

government and the banks

standards and will of government
officials
on
the
people of this

within

bounds which do not raise

country in recent years. We are in
the midst of a struggle between
those
pushing
for
government

free to exercise his

lars

dictatorship and those who desire

gold

fears.

Every individual would
what percentage

would

of his dol¬
to put in

prefer

effort

judgment

own

the

protect

exchange of

(6) With the great benefits of
private ingenuity freely available
once

international

change, and with all
freely

ex¬

dollars

our

interchangeable

with gold
rate, at least those
aspects of the difficulties in ex¬
at

fixed

change which

exist between

now

the rest of

and

the world, be¬

of the irredeemable features

cause

1920-1923, free markets and the objective value of his savings. If, with this of our currency, would be elimi¬
freedom
of
choice, people are nated.
would reach great standards they provide.
The great benefits of our
When President Truman stated misled and fail to take the proper return'
size. But no sensible person would
to
redeemability, which
process of inflation, governments suppose
that they would reflect recently that he proposed to claim protective measures, they cannot should soon be obvious, should set
can
confiscate, secretly and unob¬ economic soundness or prosperity. credit for such prosperity as we charge their misfortune to a lack an
encouraging example for other
served, an important part of the Economic collapses can start from now have, he revealed, perhaps of power to use their own judg¬ countries, should hasten the re¬
wealth of their citizens.
By this any high point in any major in¬ inadvertently, that he thought we ment. With a redeemable currency moval of restrictions by
them, and
method they not only confiscate, dex of production or price expan¬ had
already attained a sufficiently at their disposal, they would have should in the end make their road
but
they confiscate
arbitrarily; sion when a sufficient number of high degree of government man¬ a power not possessed today, and back
to
redeemable
currencies
and, while the process impover¬ strategic factors are pinched be¬ agement of our economy for the it seems reasonable to suppose, if much easier.
ishes many, it actually enriches tween costs and
prices and severe Party in power to claim credit our government _should continue
(7) A restoration of redeem¬
some.
." (Op. cit., p: 235.)
distortions overbalance the forces for what he seemed to regard as with its programs of profligate
ability could not and would not
Irredeemable
currency,
easy
struggling for harmony. Much at¬ a healthy prosperity. The implica¬ spending and dissipation of our insure
people against sharp ups
money, and a depreciating pur¬ tention
is
being directed these tion of his claim seems to have national patrimony, many people and downs in
productive activity
chasing power of the monetary days to such aggregates as na¬ been lost upon the people of this would
begin
to
exercise
their and
prices. All that it could do is
unit constitute a destructive dis¬ tional
power to protect their savings and
income, national product, country*.
to provide the best type of cur¬
ease—subtle and far-reaching in total volume of
Since a healthy economy rests to this degree tend to bring this
wages paid, total
rency known—one that, by its na¬
nature.
Nevertheless, the popular profits, total savings, total spend¬ upon the determination of values practice to a halt.
ture, does not cause a country to
demand is for more and more of a
(3) Multiple quotations for dif¬ take the course to disaster made
ing, and so on. These aggregates and price by the objective stand¬
depreciating currency — fo/r the are a favorite tool of the Keynes- ards of the free
market, rather ferent kinds of dollars should dis¬ possible by an irredeemable cur¬
very thing that
injures. As the ian economists and economic than by the employment of the appear. All our currency would
rency.
Before that unfortunate
artificially stimulating effects of a planners. The concepts commonly subjective standards inherent in be. convertible into, and have
statement

supposed to have been made by
Lenin—that by "... a continuing

ample, in Germany in
such aggregates

course

depreciating currency wear off involved, and the manner in which
and as maladjustments and hard¬
these aggregates are often used—
ships multiply, the popular de¬ to
say nothing of the unreliability
mand
for this narcotic becomes
of the data—frequently will not
more intense.
In due time, great
withstand
careful
analysis. The
distortions

fears

appear,

become

widespread, and the rate of depre¬
ciation tends to

increase. Produc¬

tive machinery

stalls, savings dis¬
and unemployment, hun¬

appear,

ger, and distress stalk the land.

We in this country seem to take
the

position that

these evils.

poison

deemable

currency.

irre¬

Our disease

creeping

variety,

and

extremely deceptive, because of
the hybrid
nature of our irre¬
deemable currency system. Never¬

theless, we have our powder kegs.
For example,
besides the basic
evils

mentioned,

there

the

are

great potential dangers which ex¬
the

ist

huge

serves

surplus

Federal

our

nomic well-being

continue with

inherent

the

what the final outcome

accuracy

for us is to be if

escape

is perhaps

this date to estimate with

way at

the

shall

There

re¬

Reserve

We also need

practice

looking

These could support

System.

bank deposits to
the extent of $360 billion in addi¬
tion

The

annual

our

the

our

assets

while

ignoring
liabilities.
The
our people is stupendous.
Any individual with wealth to
mortgage can create the appear¬
ance
of a great increase in his
well-being by borrowing to the
limit and spending freely. He may

present
rate

billion.

$162

for

turnover

great volume of bank deposits

relatively low (12.3 for 332

assets

increase

his

ductive

activity,

Should the rate rise to ;fhat

1929).

1929, prices could reach fantas¬
tic levels in this country. The ex¬
pansion of consumer credit is now

Longer

Have

Healthy

Economy
A

in
which the maximum harmony in
relationships
exists
among
the
agents
of
production
and
the
forces operating in the exchange
of our goods and services, in con¬
sumption, and in the distribution
of income.
Today we have a mix¬
ture of the healthy and unhealthy
healthy

with

the

economy

sets

two

one

forces

ap¬

almost in
balance.
unhealthy forces at
work, our irredeemable currency,
easy money
policy, and various
governmental policies — particu¬
larly those involved in govern¬
mental management of our econ¬
parently
Among

the

eating more and more
deeply into our structure,. As the
maladjustments
grow
relatively
more
important as against the
forces that contribute to harmoni¬
omy—are

ous

relationships in

system,

our

economic

should expect

cor¬

rective reaction to set in.
If

that

time

additional

of cheap money should
be made by government planners
in an effort to overcome falling

prices and losses, the poison in the
economic system would merely be
and

the

painfulness of

objective

The

unsound

aspects of

our economy

eliminated

with

operate

long

which is

currency

upon

Summary

time,

any

Benefits
The

needs

are

people

have

commodity or service are those
provided by the operation of the
forces of supply and demand un¬
conditions

der

free

wheat

fair

and

competition. The price of

honest

bushel

when

proper

all

officials would

social

and

once

currency;

competitive

market. Every other notion as to
what is a proper price for a good
service

is subjective.

The

em¬

ployment of subjective standards
device

the

thinker

the

and

the

wishful

dictator.

When

government substitues its judg¬

ment

lieu

all

to what

of their

buyers

prices should be,
determination

and

by
free

sellers

markets, it is instituting dictator¬

ship.

There

scientific
ateness

standard

involved

standard.

The

latter

objective

appropri¬

subjective

merely

con¬

fatal element in

for

manifestation

this

current

dishonesty

of
is

consequence
no

freely

trouble. There is

mine

political fabric

Its

nation.

the bonds of

once

Dishonesty is
the

buyers and sellers involved deter¬

would

forming to accepted standards of
honesty in respect to honoring
promises to pay on demand.

only

valid defense

officialdom.

integrity

When

are

the

disease

power

the

to enforce its will.

economic
than

maladjustments

greater

harmonies

rather

eco¬

nomic relationships. Government
prescription of minimum wages,
of prices for farm products, of in¬
terest rates, of
all acts of

profit margins are
dictatorship. The man¬

provides

safety.
But
an
insurance

herent

into

such

deemable

enter

currency

standard

currency,

and

re¬

the other

hand, do not carry these germs of

against the consequences of hu¬
foolishness, or stupidity, or

side—from

recklessness,

credit.

Although
.

deprecia¬

calculations

gold

force be-

potential dangers in¬

people's

plans.

causal

elements

tion and the

bad management.

institution

the

deemability

should

invite

disease; they must come from out¬

re¬

great

There

despite

gold

the

standard
The

currency.

existence

redeemable

and

is to

problem

get
cur¬

The solution to the prob¬

rency.

lems

inherent

credit

ing

redeemable

the

uses

the

from

managers

money

restraints

provided by

in free¬

not to be found

redeem¬

Said

.th£ wise John Sherman;
is

resume

illness, to
sound

cial

recover

from

danger, to stand

healthy in the finan¬
with

world,

based

escape

and

our

currency

the intrinsic value of

upon

solid coin.

perhaps

say,

may

resump¬

the

use

single act

that could bring
important benefits to the

people of the United States than
restoration
our

currency

rate

tory

Responsible

redeemability

at the present statu¬
$35 per fine ounce.
people who wish to

serve

their country well probably

could

nothing so important as
persuade
their Congressmen
and Senators to pass the Reed bill
(or Hale bill) which provides for

•

such

redeemability. Shortly after
of redeemability,

the

institution
multitude

distortions

and

evils caused by

irredeemable cur¬
rency
and by the government's
easy money policy should begin
to disappear; our persistent march
into the Death Valley of Socialism
should be brought to a halt; and
nation should be back on the

our

"Therefore I

government

the

able currency.

"To

abuse

that

course

should

lead

better

spreads rapidly through the foun¬

wise

States.

dations

and

society

and

its

social

which

Secretary of the Treasury, John
Sherman, stated correctly in 1877

earnest

("Recollections,"

589)

hope

national

institutions.

for

peril,

war,

danger

calamities

nation, like others, may
be subject, but against which the
aspirations

every

these

Sherman

■

/i.'

("Recollec¬

David

Smith
ited

Street,
of

members

Exchange.

limited

the

James S.

New

York

New York

May

will

Smith

and

partners in La Morte & Con

Wall

Smith

June 1 will become lim¬

31,

City,
Stock

Cynthia

withdraw

from

partnership in the firm.

questions,

made

nent observation:

in¬

another

perti¬
"Why ought not

who issued a promise to
pay on demand be made to pay it
when demanded, or pay interest

anyone

thereafter?"

/ /

La Morte Co. to Admit

pa¬

"There are times when such [ir¬ tions," II, p. 704.)
redeemable] money is unavoid¬
(5) Return to a thorough-going
able, as during war or great public gold
standard
and
redeemable
calamity, but it has always been currency would permit a free flow
the anxious care of statesmen to
of all our money into and out of
return again to the solid standard
the country. Private individuals,
of coin. Therefore it is that specie
free to go when and where they
payment
is pressed by that can and will, with their dollars of
great body of intelligent men who all kinds, should revive and stim¬
.

our

that triot will be uttered."

dispensable prerequisite for steady
business and good times."

has

potent

the

cause

days for the people of the United

levels,

study

which

contains

moreover,

comes

tion be perpetual. To wish other¬

official

authority

rail¬

man

loosened

matter of the wish and of the will

the

and,

the restraints of

Our

be summarized good monetary management under

play, and that the only ob¬

free

redeem¬

and Treasury and Federal Reserve

when
standards of appraisal

objective
are given

fostered

obtained

rails

great facilitating instru¬

elements

tion

follows:

(1)

emphasized

relationships

benefits

system,

monetary

strong

forces

and prices.

benefits,
bad
fiscal
and
banking
policies
and
practices
could precipitate a serious situa¬

Sound Money

other

social

the tools of dictators.

that harmonious

attempt

- managed
which,
in
turn,
rests
subjective
evaluations

neither

basic feature

able currency may

ignored.
also

cannot be

good

some

governmentally

the

ment

irredeemable

the

all

basic

good

way,

easy-

policies and in many other

money

and

bosses

standards

Federal

that affect production

which all science rests.

from the institution

ruthless

behavior

attempt to
desire and

great proportion

analyses

economy

Government dictatorship creates
in¬

jections

increased

duty of a
to provide the

subjective
the

may

and

for

jective standards that exist as to
what is the proper price for a

2 Vg times that of 1929.

the redeem¬

the

of
discussions of
our
economic well-being is con¬
cerned
solely with assets while
the liabilities, which may become
the

are

will

pro¬

his

and

easily demonstrate that he is bet¬
ter off
if he will ignore his

re¬

porting centers as compared with
the rate of approximately 30 in

substitute

debt of

liabilities.

it is

manipulation

badly to stop

—

expansion in

be taken

can

equal value with, gold. Restora¬ ability of a currency must be de¬
tion of redeemability would be
good government
stroyed.
V./'/'s'
people with objective standards somewhat like the replacement of
Business and price fluctuations
for measurement. A good mone¬ a weak and dangerous foundation
are
the result of a multitude of
tary standard requires that there of a tall building with the best
forces.
The part played by a re¬
inferences sometimes drawn are be
and strongest foundation materials
a
monetary
unit
of
fixed
deemable currency might well be
too simple to fit the facts; and weight
and
that
all
substitute known.
of minor or negligible importance
sometimes they have
(4) The introduction of redeem¬ in the
dangerous monetary promises be redeemable
fluctuations of production
implications because of what they in the standard monetary metal— ability should instill confidence and
prices.
In no qvent could it
obscure. It is with harmonies and if standards of honesty are to be and
provide incentive for more be the
controlling factor. In high
disharmonies
in
our
economic respected.
saving, more investment, m'ore
Tampering
with
a
degree it is a facilitating instru¬
system, rather than with aggre¬ standard of measurement after it trade and, consequently, more and
ment,
a
self-liquidating,
and
prosperity.
The
conse¬
gates,
that
we
should
concern has been prescribed, whether it safer
therefore sound, medium of ex¬
ourselves chiefly in our analyses be the foot, the gallon, the pound, quences would depend much upon
change—a passive factor.
It is an
the management of credit and the
or the dollar, has no defense. Such
of business conditions and
eco¬
irredeemable currency
that be¬
dictatorship,

(Ibid., p. 591.)

(2) Power to control the gov¬
ernment's use of the people's purse

ulate
and
vate
once

John M. Stine Partner

foreign exchanges of goods

services

every

ingenuity could go to work
more;
and, when millions

interested

profit

freedom

pleasure, are given
and opportunity to ac¬

complish their purposes, they usu¬
ally manage to succeed in high
degree. No government agency or
government

(Special to The Financial Chronicle)

SAN

people, in search of

and

plan

can

match the

Colvin, Mendenhall

form. Pri¬

FRANCISCO, Calif.—John

Stine

has

been

partnership

hall

155

Co.,

Mr. Stine

research

admitted

Colvin,

Menden¬

SansomeStreet.

is manager of the firm's

department.

(2074)

The Commercial and Financial Chronicle

World

civilian

News About Banks

Department
the

State

York

reported

issuance

Banking

May

turers

Banking

Corporation,

(May
at

poration made by the New York

the

Banque

noted in

Beige

(Overseas)
issue of

our

with

the

its

bank

corner

Americas

the

Willis

appointed

Avenue

in the Personal Trust

the

has

Chemical

windows, depicting

Company of New York it
nounced

was

New York

that

announces

York

pected

increase

ahead and to become

Ralph

sociate

audience

one

their posts of

following pro¬
Philadelphia office:
Wesner, from Asso¬

Special

sion
the

80th

Mr.

Stauffer,

Agent to

Chairman

Resident

Vice-President
James M. Henderson.
if

the

bank

also marked

tion of the Giannini

niversary

Later,

ter

inaugura¬
birthday an¬

Ben

the

been

Bank

of two

board

new

mem¬

ab¬

Italy, he

head

office

Bank

and

Trust

Co. of

Vice-Pres¬

director.

and

associated

Vice-

month

Mr.

Meyer

will

celebrate

sary

with the bank; Mr. Hahn re¬
completed 20 years with

his

36th

anniver¬

cently

the institution and Mr.

Executive Vice-President to Pres¬

directors of

was

becoming

Union

ciates.

Chairman

Union

San

1905.

bank

ers
Association; a member of the
Association of Reserve City Bank¬
ers and
the Robert Morris Asso¬

named

that

President of the California Bank¬

Meyer, formerly Presi¬

Board

other

Lipman

Bank

Los Angeles in 1920

ident

of Re¬

messenger in

institution's

with

the

nually.

dent, has

for many years in the lat¬

branches,

Founder's Day for the
organization, to be observed an¬
if

Com¬

group

Mr.

the

by the Bank

served

Execu¬

when

sorbed

Vice-

with-

Francisco

who

Committee, who spoke at the
unveiling, announced that the oc¬
casion

associations.

started

The election
bers

General

director,
of

member of the American Bankers

Trust Co. of Los Angeles; Herman
Hahn has been advanced from

its

and

Chamber

Association, the Association
serve
City Bankers, and

anniversary of

bank

California;

Angeles

Association;

Carl F. Wente, di¬

the

1939

and, in 1947,

past Chairman,
California
Bankers

bronze bust

Giannini

named di¬

merce;

Giannini, founder

the

was

birth

Southern

Los

tive

Manager.
The
office
continues under the active direc¬
of

still

Co.

was

Independent Bankers Association

of America

while

duty,

of the late A. P.

Baltimore

Manager; Richard P. Shep¬

from

tion

years

branches of the Bank
into

Vice-President,

ceremony which used radio
bring the staffs of all California

Assistant

The pur¬

the

Nathan

losses

additional

of the bank, was unveiled on May
13 in San Francisco.
The occa¬

Assistant Manager to As¬

herd,

World

of the display is educational.
It is designed to bring home to the
public
vital
information
as
to
United States trade, which is ex¬

Harvey D. Gibson, President of
Manufacturers Trust Company

New

pose

Jackson.
*

the

Trade Week Committee.

an¬

May 11 by N. Baxter

Brooklyn;

loan

associated with

Trust

elected Executive Vice-Presi¬
dent.
He is past President of the

•

died last year.

was

rector

from

week, scheduled to open
Monday in accordance with

plans

Pa., while

Manager to Manager, suc¬
ceeding Thomas J. Ternan, Jr.,
recently promoted to Manager in

tionships, have been arranged by

possible

amounts

$45,000,000.

Maryland

for

Bank

rector the same year

$380,000,000, apart from the

reserve

cause.

ciate

Importers, Inc., in connection
with this year's New York World

Trust

Fidelity and Deposit Com¬
of

Lawrence

wide

Trade

Department

Bank

the

named Executive

He became

ness.

the

Bristol,

was

stock

new

issued, which will increase
capital to $150,000,000, and
total capital funds to more

motions in its

of international trade rela¬

been

Co.,

the

Union

has announced the

These

Assistant Secretary

Trust

The

Street.

range

will be

was

the Allied

pany

Anderson

service to

the National Council of American
%

Army.

523,896

Lt.

as
a

which

world¬

was

April 6, page

three

Vice-President.

windows

48th

and

than

tol

exhibit

trade

the

Louis Dries

pour

Ltd.

1436.

18)

wide

ment of the formation of the Cor¬

Agency

and

The Colonial Trust Company of
New
York
is
unveiling
today

Wall Street, New York, with
a
capital of $3,000,000.
Announce¬

l'Etranger

Company

export-import houses.

authorization

certificate for the Belgian-Ameri¬
can

Trust

OSS

According to the Philadelphia
"Evening
Bulletin"
of
May
5
Clyde J. Waterman succeeds Emil
Metzger as President of the Bris¬

New

the

CAPITALIZATIONS

The

for

and

his

Bankers

and

ETC.

honored by Great Britain with the
Order of the British Empire for

NEW BRANCHES

REVISED

Colonel

CONSOLIDATIONS

NEW OFFICERS,

War

in World War II, both

years

Thursday, May 18, 1950

...

Lipman 30

years.

ident and J. C. Lipman from Vicesignifi¬ The Bank
of Virginia at Rich¬
T.
Horgan, President of Ralph cant to the national economy. The
President to
Senior Vice-Presi¬
Frank C. Hak, a Vice-President
mond, Va. was announced on May
Horgan, Inc. and Charles Schnur- bank is furnishing the window
dent by action of the directors at of
the
United
6 by Thomas C.
States
National;
Boushall, Presi¬ their
macher, President of Manhattan space without charge; and exhib¬
May meeting.
Mr. Meyer Bank of Portland,
dent.
The
new
directors
Oregon, retired
are
Pontiac
Corporation have been itors, which include some leading
was
Vice-President and director on
April 30 under the bank's pen¬
appointed to serve on the Advis¬ American companies have agreed Major General William F. Tomp¬ June 22, 1914 at the
inception of sion plan.
A native of Milwau¬
kins, U.S.A., Ret., now Comptrol¬
furnish
ory Board of the bank's Columbus to
the
anonymously
large
Kaspare
Cohn
Commercial kee, Wis., Mr. Hak
ler of the Medical
began Jhis
College of Vir¬ and
Circle Office at 1819
numbers of items to make the
Broadway.
Savings Bank, and was named banking career with the
ginia, and John Wythe Bates, Jr.,
Marine
Both prominent in automotive cir¬ world trade situation clear.
President in 1916.
The name of National Bank
of the real estate firm of Harrison
in that city.
Lo¬
$
%
*
cles,
Mr.
Schnurmacher
being
the bank was changed to Union
& Bates, Richmond.
cating in Portland in 1910, he
A graduate
President and Mr. Horgan, Secre¬
Bank & Trust Co. of Los
The
Consulate
General
of
Angeles joined the Lumbermen's National
of
the
United
States
Military in
tary-Treasurer of the Automobile Switzerland is
June, 1918.
In addition to his Bank in 1912.
sponsoring an ex¬
At the time of the
Academy, Gen. Tompkins had 35
Merchants
Association
of
New hibition of
bank duties Mr. Meyer is ViceSwiss products cur¬
consolidation of the Lumbermen's
years of active military service.
York.
President
of
the
rently in the windows of Colonial He was a
Los
Angeles National with the United States
*
*
*
junior aide to the late
Trust Company's principal office
President Woodrow Wilson and Clearing House Association, a di¬ National in 1917, Mr. Hak was an
Barnard Townsend, President of
on
rector
Avenue of the Americas at
of
the
Pacific
Lighting Assistant Auditor. He was named
with the Pershing
the Title Guarantee & Trust Co.
Expedition in
48th Street, New York.
The ex¬ Mexico.
Corp., Southern California Gas an Assistant
Vice-President
in
of New York announces the elec¬
During the first World
hibit, arranged as a special tribute War he
Co., the Pacific Indemnity Co., etc. 1927
was
and, in 1939, was made a
tion of Hugh M. Houston as As*
searchlight . officer Mr.
to the bank's correspondents in
Hahn began his
banking ca¬ Vice-President.
with the First American
He is a member
sistant
Vice-President
Army. reer in 1920
in
the
with the Home Sav¬ of
Switzerland, will remain until the Mr. Bates
the
American
graduated from Vir¬
Institute
of
bank's Westchester office in White
matter part of May.
ings Bank of Los Angeles, later
Arthur S. ginia
Banking and the Portland Cham¬
Polytechnic
Plains.
Institute
in
He had been
Secretary Kleeman,
President,
announces
engaging in the securities busi¬ ber of Commerce.
1935.
He joined the firm of Har¬
'
of the company in the Westchester
that in conjunction with the ex-,
rison & Bates
office.
immediately follow¬
Harry E. Kuhlman, Vice- hibit the
banking house has pre¬ ing
graduation and has been a Continued
President, who has been a direct¬ pared another in its series of in¬
from page 13
partner since 1937. During World
ing executive of the Westchester ternational
monographs, "World War II, he
office for many
spent 42 months on
years, has re¬ Recovery Through
Imports." This active
duty with the Army Air
sumed full charge of the office
set, entitled "Trade with Switzer¬
following the resignation of John land", calls attention to the eco¬ Forces. Prominent in real estate
association activities, Mr. Bates is
P. Billhardt as
Vice-President, to nomic necessity for maintaining
a member of the
One might well the close of March.
become a Vice-President of the
Realtors' Wash¬ term category.
United
Presumably,
States
purchases from
ask why the
ington
Committee
Excelsior Savings Bank in New
Treasury and Fed¬ it is these factors which have
(legislative
Switzerland at a high level.
eral Reserve System should
York.
branch) of the National Associa¬
ap¬
influenced the Reserve Board in
;■
*
*
'
*
*
*
*
tion of Real Estate Boards and a parently bring about
"
deliberately their decision, with the concurThe New York Savings Bank at
"Regional Vice-President of the higher rates in view of the Treas¬ rence of the
Marine Midland Banks of New
Treasury, tcT bring
8th Avenue and 14th
Street, New Virginia Real Estate Association.
ury's need to borrow new money about a
York State have
firming of rates.
outstanding in York is currently exhibiting prize
as
well as to refund
if
'
if
%
'■ [
'■
Of vital interest to all
their
extremely
Personal
and
of us
Instalment
winning paintings featuring scenes
heavy maturities. It seems to me
Walter S.
Loan Departments over
holding substantial amounts of
McLucas, Chairman
100,000 of New York by artists of St.
the welfare of the
of the National Bank of
country as a governments in our portfolios is
individual loans it is stated in
Detroit,
John's Gallery of the Village Art
whole is and must
at Detroit,
the booklet "Marine Midland
rightfully be the method to be adapted, and the
Mich., has announced
at Center.
The exhibit will continue
the prime consideration of those
the promotion of Milton S.
rates
to
be
established
Mid-Century" published on May 1 until
Bosley
by the
May 19th.
charged with the responsibility of
from Assistant
by the Marine Midland Corpora¬
Vice-President to
Treasury in accomplishing deficit
*
policy making, and consideration
tion of New York. A chart
Vice-President, it was indicated
financing and refunding opera¬
giving
T. Arthur Nosworthy, President in the
for the cost of money to the Treas¬
a breakdown of the
tions.
Detroit "Free Press" of
I have heard it
loan
more

Market for Government Bonds

.•

portfolio
indicates that
approximately 44%

of all loans
to

outstanding

commerce

and

made

are

industry,

less

than 1.61%

tistic

to farmers which sta¬
reflects the results of the

material increase in
in recent
years.

farm income

Capital

since

1940

stated

funds

have

in¬

creased from

approximately $53,000,000 to $82,000,000, largely from
retained earnings.
The booklet
also traces the history of constitu¬
ent banks owned
by Marine Mid¬

the

New

Bronx

York,

Savings

has

Bank

announced

the

election of Roscoe C.
Ingalls, as a
Trustee of the bank.
Mr. Ingalls
is
senior
partner of Ingalls &

Snyder, investment firm, a direc¬
tor of J. G. White
Engineering
Company and a director of The
First

National

Bank

New

Rochelle.

■

division,
served

says the "Free

directors

of the State Street Trust
of Boston held

will

Ray

retire

June

Murray,

30.

Mr.

it is added, joined the bank
organization May 10, 1950.
s?

■

Bank

May 15, Edward L.
Bigelow, Vice-President, Director

ganized to the present time.

L; M.

23,000

stock¬

held

holders.
*

Arthur S.
Colonial
York

Kleeman, President

and

New

appointment

H. Grennan

Secretary and

Treasurer,
as

the

announces

the

Assis¬

Assistant
Gaetano

Uzzo

Assistant Manager of the bank's

International Division.
nan

was

Mr. Gren¬

formerly with Chase

tional Bank.
associations

Mr.
were

Na¬

Uzzo's previous
with

Manufac¬

Allan

that

Forbes

Trust Company

of William

tant

office

and

man

the

America

of San

the

past

newfy

Honorary Chair¬
Mr.

Bigelow

than

resources

$195,000,000

than

The

share for

per

stock

lowing

the

his graduation he went
with the investment firm of Tuc¬
ker, Anthony & Co. of Boston
he

remained

Trust

Company.

has served
of

the

until

joined the State
on

bank.

Since

1934
Street

then, he

various committees
He served briefly

for

right

each

six

tional

under

conditions

letter

the

shareholders

com¬

also

held.

being given
for

the

addi¬

new

set

forth

President

dated

May

the

conditions

pre¬

12.

•

However,

member

March
as

I believe

can

Federal

The

sources.

done?

quote

from

Reserve

I
the

Bulletin

follows:

"During January and the first
February holdings of gov¬

the

leading

ernment % securities

Federal

the

might

investors.

would

possibility
be

and

combined

billion, indi¬
purchases by

substantial

This

member

cities

banks

declined about

cating

non-bank

leading

Reserve

indicate

that

definite
amount

from

while
the

a
an

such

raised

clined

All

total of 3,-

obtained from the

non-bank

hope

case,

skeptical.

that
in¬

For

seemingly accomplished, it may
newspaper to the effect that possibly be done by non-bank

reached

$424 million in the past year. And
recently I noticed an item

just

in the

had

1964,

should

is,

sources, and
such may be

the

columns

question

cities, reaching an all-time peak
$4,502 million, an increase of

New

page

loans, these latter,

banks

bank

May 11,

$15% billion.

according to the Federal Reserve
figures of April 26 covering the
condition
of
weekly
reporting

the

these

over

subscription rights expire June 1.
in

all

are

banks

indicated

half of

stock ;of

inflationary, and
are

around

spending

rived from non-bank

are

and real estate

one new

Deficit

vailing today that would indicate

What

entitle

shares of

new

the basis of

are

calendar

run

agreed that insofar as
possible this money should be de¬

have experienced a
steady increase in consumer credit

$20

this

banking system. And

subscription
rights
shareholders to subscribe
mon

total

and

probably

billion.

$10 ^4 billion to

de¬

$268,000,000.

Shareholders

when

total

will

and agricultural loans, as reported
in the leading
cities, went from

•

months

announcing that subscription which characterized the period
rights are being sent to the bank's from January, 1947, to December,
160,000 shareholders, reports that *1948, when commercial, industrial

remainder

year

itself is

desirability of firmer rates?
True, we do not have the steady
in
commercial
loans
Francisco, f expansion

posits of the bank have increased

with that of the
economy.

Trust

synony¬

Treasury for

the

Mr.

Francis

Treasury is

Desirability of Firmer Rates

■>

had

the

say

estimated

in well-informed sources
that the
cash deficit of the

if the funds

its

who

Chairman

Charles

Board.

Savings Bank

?"■

National

graduated from St. Mark's in 1917
and from Harvard in 1921.
Fol¬

where

1911.

since

elected

was

created office of

President

Forbes

elected

was

Board,

Adams

of the Trust Com¬

elected

was

Bosley

Giannini

mittee,

who

it probably would
that the wel¬

sense,

correct

mous

and Chairman

succeed

President

The

^broader

Press,'' has

fare

Company

primarily to

nated

meeting of the

must necessarily be subordi¬
thereto.
After
all, in a

ury

for 15 years and will
succeed Vice-

land Corporation from 1839
when
two banks of the
system were or¬

booklet is addressed
Marine
Midland's

assistant in the division

President
a

■

May 10. Mr. Bosley who will take
charge of the bank's investment

*
if

■■

loans

York
a

member
Stock

firms

Exchange

45-month

peak

buyers

selling

bank-eligible is-,
banking system to
supply the needed funds, thereby
sues

the

Volume 171

Number 4908

nullifying

The Commercial and Financial Chronicle

non-inflationary" portance to the

the.

aspect of raising the funds from
sources.
' ■■■
;
.
, C

non-bank
We

witnessing

already

are

the

have

would

an;;

increase in the amount of weekly

the money

bill

that

offerings,and I should not
surprised if we? were to see

possibly

months,

est

year

inflation

further

cooperate m the fullwith

analysis have

the

Treasury

keep these

elect to offer in
.

funds

series

' been

offered in 1947, but my per¬

were

sonal

for

preference would be

marketable bond. I believe a mar¬
ketable issue would have more

appeal

institutional

investors

to whom the

Treasury would have
for .its principal buyers,

look

and, likewise, I have an aversion
to a further substantial addition
the

already

demand

heavy

believe
issuance

that v consideration

also

might properly be
would

amount

obligations outstanding.

given to the

2}k%

literally be

that

bond

issue.

"tap"

For instance, to offer such a bond
;

the

All of this, in my

the government a direct
interest in accounting

pecuniary
practices.
Large - scale business enterprise
necessarily created important re¬
sponsibilities to society as a whole
and accountancy was required to
convey and interpret business data
to
people only indirectly con¬
nected with the enterprise.

judgment, confirms the need for
portfolio management based

upon

sound, conservative banking

excbpnge.

inflation

of further

reason

qf the

of|he

prac-

ineligible

banks.

foT

are

now ;

pres-

structure.

money

bonds

ently

has

offering similar to the
investment 2%s which

impact

repeat

that

earlier

have

statement

obligation, both

commercial

In 1952 alone

some

Objectives of
SEC and Capital Raising

We are, or soon i#y be, in my>tice, and not upon the expectation
opinion, faced withj&e possibility of
a
rigidly maintained
price

Some

some

rate structure.

page

as citizens and as bankers, to coThese new and great responsi¬
$13,700 -operate to the fullest degree with
bilities were rather suddenly thrust

commercial

S Lehman

which
were
unintelligible
and
frequently dangerously deceptive.
The accounting profession, by and
large, then conceived its principal
responsibility to be to manage¬
the Treasury would have accomr
An underwriting group headed
ment. Of course, the economics of
plished the desirable result of jointly by Goldman, Sachs & Co. the
profession, whereby manage¬
funding some of its already top- and Lehman Brothers on May 15 ment hires and fires the inde¬

used to retire short-

were

debt, the infla¬
tionary aspect of the change in
ownership would be nullified, and

steadily increasing amounts and,

heavy short-term obligations into

furthermore,

long-term,

deterrent

might

act

non-bank

buyers

selling bank-eligible issues to per¬
them

offering which
for

limited

Problems

new

available only

was

period.

Treasury

Situation Summarized

Group Sells

summarizing, gentlemen, we
now have a policy of greater flexibility in Federal Reserve open
with

Atlas Common Stock

publicly offered 100,000 shares of pendent public accountant, was in
common stock of Atlas Corp. and no small
part responsible for the
option warrants to purchase 100,- accountant's limited concept of his
000

market

Refunding

• •
,.

•

mit

operations, as contrasted
previous one of a rigidly

the

priced at $24.25

corporation's

The

stock.

common

stock

was

responsibilities.
Moreover, what source could the

share and the conscientious accountant draw
warrants were priced at $5 per upon
for
accounting
principles
warrant to purchase one share, which business should follow? By
per

The warrants represent the right and large, the only source of guid¬
to purchase, without limit as to ance for the accountant, apart
fore expect the Reserve System to time, common stock at $25 per from convictions
grown out of his
buy or sell government securities share. The books were closed the own experience, was the account¬
a

maintained pattern. We may thereNot

only does the need for bor¬

prob¬
lem for the Treasury, but the mat¬
ter of refunding as well.
Within
the next five years the Treasury
will have issues, exclusive of bills
and certificates, becoming due or
rowing

create

new money

in such volume and at such

become
in

September there will

optional

some

bonds

billion
of 2%

bearing coupons
of which over $4 bil¬
owned by commercial
banks as of Dec. 31, 1949. I should
like very much to see these bonds

may

contract

bank

prices

the needs

this

reserves,

of the economy.

connection, it might be

of interest to quote the following

'he

recent

recommendation

of the Subcommittee

Monetary,

and -2%%,

Credit, and Fiscal Policies of the

lion

Joint Committee

were

with

refunded
term

bond, somewhere from seven

ten

be
I

level,

of the

1%%
a

coupon

should

large percentage of

the banks would be

cases

present mar¬

If this were done,

appropriate.

believe in

assuming

and

years,

maintenance
ket

intermediate-

replac¬

the Economic

lieport, as Mlows.
We recommend that

some' limes

other

and

reaching out ma¬
undesirable de¬

credit

times

present holdings, and it would act
deterrent to

No.

SEC

would

Re¬

stated that
to accept

which,

SEC

the

refuse

substantial number of shares

and warrants

turn, were largely descriptive and
thus appeared to sanction the ex¬

isting practices. There were other
texts, however, which were ana¬
lytical rather than merely descrip¬
tive and from these, increasingly,

Atias Corp. is a closed-end, non- high standards of accounting be¬
gan to take shape.
Our colleges
diversified
management
investdeserve

^3S 3£ffl jE%
Assets

March

much

credit

the

accounting theory

as we

today.

practices
a repeti¬

accounting

which could have led to

tion of the write-ups of the '20s,
to
various
unjustifiable charges
or

credits

and

income

surplus,

confusion

considerable

about depreciation, inventory
practices, and special reserves.
The result might well have dis¬
credited
accountancy for many
years to come. If investors lose

faith

in
accounting reports to
stockholders, they will certainly
balk at putting new money in on
a "pig-in-a-poke" basis.
The Commission, in its account¬
ing work, has had most important

cooperatiorT from

the
teaching
profession,
other
government
agencies, professional accounting
groups, professional analysts, and
many others. The American Ac¬
counting
Association
and
the
American Institute of Accountants
in

particular have made important

contributions to the

improvement
accounting and re¬
porting gained in the last 15 years.
in

financial

for

know it

variety

main

sion's

outline

objectives

complished

Commis¬

the

have

through

been

rules

ac¬

and

During

and

strain

55^

essential characteristic of

lease
the

that

its Accounting

released

regulations promulgated, in each
periods
of
economic
instance, in cooperation with the
stress, there is great
accounting profession.
In many
pressure from business upon the
instances, however, because fil¬
accountant to interpret business
ings necessitated immediate ac¬
cies
should be one of the
prw-}that date was $59,620,521, equal to facts in a manner which manage¬ tion, the Commission had to reach
cipal methods
ment believes will help it meet
a solution in a particular case be¬
usg4 to achieve the $3() 52 a share
i 953
out_
purposes of the Employment Act.
standing shares of common st0ck, those strains and stresses. In the fore
the
accounting
profession
Timely
flexibility toward
easy,, the sole
ital seCuiity of the period of the '20s, management could
give proper consideration to
credit at

which they are deriving from

owner

31, 1950,
an apprototaIed $60,764,539. and included
pnate, flexible, and vigorous mon$38 102,739 of cash and U. S .Treasetary policy, employed in coordibms
N t value
f.
t
nation with fiscal and other poh-.
licable to the
stock

restriction

turity-wise to

George H. Howard, who, after the

saie, will continue to be the
Gf

Many of these, in

ing textbooks.

The stock and warrants offered
constituted part of the holdings of

]940.

ing most, if not all, of the income

their

following day.

expand

necessary

degree in keeping with their opinion

optional in the amount of $41,785
million.

time

same

1938

banks,

term bank-owned

which should become available in

the

Goldman, Sachs and

proceeds

attractive to pension fund moneys

the

become the

ese ^sues

for

to non-bank: investors and' let it

reopened for subscription at cer¬
tain intervals, possibly each quar¬
ter.
Such an issue might prove

accounting questions gave
public accountant a basis for
saying "No" to an insistent client
and thus gave the profession a
dignity and status which it never
had before. Significantly, at about
many

in reports to it accounting prac¬
Treasury in aiding them to upon accountancy and it is no tices which had no "substantial
accomplish their necessary financwonder that it failed in many re¬ authoritative support," the Amer¬
and within the next five years
ing particularly the reinvestment
spects to meet them adequately. ican Institute of Accountants set
this amount will be increased to Qf
maturing savings bonds. But
a total of $29,980 million.
If, when we have still another obligation, Many of you still remember, I up committees to formulate and
think, the brilliant book by Wil¬ publish its very valuable Account¬
these issues become eligible, they
namely, to keep faith with those liam Z.
Ripley of Harvard, "Main ing Bulletins, now 42 in number.
are
gradually absorbed by the we urge to invest in government
Street and Wall Street," which It's
very fortunate, I think, that
banking system, to the extent to securities by opposing with all the
described accounting practices of these new
developments affecting
which they are absorbed, we will force and
vigor at our command the '20s. Professor
Ripley proved accounting practices occurred
have a further increase in the
any unsound fiscal policies which
pretty well that lack of adequate prior to World War II and the
money
supply
unless
counter tend to depreciate the purchasing
disclosure, misleading data, and postwar period. It is only by rela¬
measures are adopted. It seems to
power of the money so invested, the
endless variety of accounting tively vigorous and timely action
me that such a shift
ownership,
practices even among companies by the SEC and by the organized
if developed, should provide the
in the same industry resulted in societies of accountants that we
Treasury with an excellent oppor¬
those years, generally speaking, in have
been
saved, during these
tunity to sell additional long-term
accounting reports to stockholders periods of stress, from a wide
bank-ineligible issues, and if the

°}

.®n

eligible

knpwn thai the books would be

Information

supply by

from

inflation which must in the final

extent

Continued

if prolonged indefinitely, the implication of further

patriotic:'duty

our

outstanding and which

consideration

eligibility dates, might well result
in
a
lessening of demand for
longer term obligations. And lalst,
but not least, we have in deficit

And$o I feel financing,

ineligible for the life of the bond.
given to

done

in
invested in government securities of
such type as the Treasury shall

somewhere from two- to five-

maturity—bank-eligible; as
well
as
an
offering some time
before the end of the year of an¬
other 2%%
bond—ineligible for
commercial banks, and this bond,
if offered, I believe should remain

well

market.

supply.

helping

note

bankers

offering for cash in the next

several

economy

bond

through the banking system, we

•

(2075)

CIS
stability.

■

Aetaa Sec- C"P- 0N«'S
Daaflmtf Tllho *R' Qllf

The

vigorous use of a
restrictive monetary
policy as an

united

accountants

and

corporation

mdn-

ac¬

counting practices which magni¬
fied the speculative activities of
the
time-write-ups
of
assets,
overstatement of earnings, inade¬

the matters involved. Without at¬

tempting

to furnish a complete
list, it is appropriate, I think, to
mention a few of the major ac¬

counting

problems

which

have

period engaged the attention of the Com¬
'30s, during the strains of mission.
■Wwlllllg I (SMC 0 OlIVi
A liberalized policy of refund¬
the
depression (despite certain
Accounting for donated stock,
efforts by the New York Stock
ing on the part of the Treasury,
stock issued for promotion serv¬
which does not seem improbable,
Exchange Committee
on
Stock ices and other transactions with
Mmnm, .»»«
« sl!l_ B stock Cpor A ccot.) ot
together with the large amount of down the yields and_supporting
Listing to stem the tide), there
Reading Tube Corp at $1,871/., per
promoters.
were
equally confusing and dis¬
presently ineligible bonds that be¬
accrue to
Accounting for par value stock
Garment share
come
eligible for banks in the securittef
torting accounting practices. A issued in non-cash transactions,
r
"As a lone-run matter %e favor the comPany as the stock is beinS number of companies, for exam¬
next five years, would seem to
gree

to replace lost income.

asssrsysssa as

refute the arguments advanced

commentators

that

there

interest rates

amount of these bonds in the

curities

years,

it remains to be seen how
renew their in¬

holders will

vestment.
of

Should

redemptions

the percentage

unduly

high,

the ways and means of raising the
funds

would be

matter of

im¬

investment.

that

the

inflation

restrictive

the

But

monetary

contribute
that

wilf

offered o„ behalf of certain stock'

„

milch

freedom

policy

can

this

end,

the

believe

Federal

The tubing is sold to manufacturers ot appliances and to whole??lers ,who, supply the construc-

interest rates for general

stafcili-

eral

oR burner and other
industrial and ailied trades,
prove to be a
significant increase , The company has approximately
in service
chargj^on the Federal: £00 customers and during the sixpurposes^; should

stored,

debt and
to

the

cost

should

gr^ intonvenience
se-

Treasury#*'its sale of
for

refunding
This

if;i the

even

nev^

financing

and

purposes."

policy

flexibility,

to-

month

eriod

ended

March

balance to manufacturers,

with ,&e'OTOspect of an
For
the
three
months
ended
expanding supply,*of intermediate
bank-eligible bonds ln-iefundlng, APrd
1950> net saIes were
■"
new
financing .and_approaching 602,948 and net profit was $96,508.

gether

their assets to

down
to

"burdening"

avoid

their income account with depre¬
ciation charges.

became

1933

and

1934

.n_n

...

the

Securities

therefore,

invent new

Exchange

Act

1934, the Public Utility Holding
Company Act of 1935, and the
Investment Company Act of 1940

the Commission powers as to
accounting practices of companies

subject to these Acts. The SEC's
activities haven't led to the mil¬
lennium

accounting practices,

book like Ripley's "Main
Street and Wall Street," written

but any

today, would be in a much lower

key.

The

stand

15, 16 and 25).

income
deprecia¬
tion based on cost of plant facili¬
ties to provide for their replace¬
ment at higher prices.
Write-ups of plant and other
of amounts in

necessary,

the neces¬
respect to,
(culminat¬
Series Re¬

The charging to current

Accounting

Practices

Accounting for, and
disclosures with
quasi-reorganizations
ing in our Accounting
sary

leases Nos.

SEC Powers Over

gave

1950 approximately 95% of the
sales were made to wholesalers
and

wrote
dollar

plumbing, radiant and gen- techniques to meet these prob¬
heating, refrigeration, air lems. The Securities Act" of 1933,

Reserve to restrict credit and raise

zation

ple,
one

The ?ea^1.rl^ Tube Corp., or£anized in 1941, manufactures copadvantages of avoiding per tubing in sizes ranging from
are so great, and that a
^ mcb J0 ^ mc"es in diameter,

tal

many

can

rate's stimulate capi-

low interest

shortage of reasonably at¬
tractive y i e 1 d in g governments.
Furthermore, we are now enter¬
ing the period when the war and
savings bonds begin to mature in
impressive amounts. The amount
due in 1952 is $3,975 million; in
1953, $6,781 million; and in 1954,
$8,724 million. All told, between
1951
and
1955, inclusive, these
maturities aggregate $28,600 mil¬
lion. Lacking the patriotic incen¬
tive which unquestionably inspired
the
purchase
of
a
substantial
war

as'they

low

be without inducing inflation, for

would develop over the next few
years a

the

sm ss

gNo

some

quate disclosure, etc. In the

the SEC on

excess

accounts.
Accounting for compensation
resulting from the granting of
options (as to which the

stock

American Institute of Accountants
issued

its

Accounting

Research

Bulletin No. 37).
The "all
come

rent

inclusive" type
versus the

statement

operating

of in¬
"cur¬

performance"

type.
Maintenance of the full integrity

Continued

page

(2076)

The Commercial and Financial Chronicle

Continued from

must

page

always be tested by practical

considerations.

panies

of the income and earned

the

use

surplus
(of which
the
Accounting Series

capital

Commission's
Releases

Nos.

and

are

rule,

form

thereof.

Accounting Problems

nouncement

sion

seeks

have

fi¬

corporate

reporting keep pace with

nancial

and
thus
the belief that

conditions,

changing

further encourage

general

been

put

the

an¬

short

time

ago

that it would sell
a large insurance
which in turn would

Inc.

cars

lease them to railroads.

in which the Commis¬

manner

this

has

disclosed1,1 through

was

company

illustration

recent

the

financing

Pullman,

New

which

use

freight
A

the usual obli¬

assumes

payment of taxes, insur¬
maintenance, etc. The most

recent

purposes

some¬

the

ance,

Accounting
for
general
and
contingency reserves and the ade¬

disclosure of the

The lessee,

considerable

extent

our

disclosure requirements applicable
to such transactions have been in

existence for

number of years.

company's financial

Thus, Item 5 of our "Supplemen¬
tary Profit and Loss Information"
schedule prescribed by Rule 12-16
of Regulation S-X requires that

shown

there

risk

the

element

does not include

investment

ignorance of the

condition, is
standard of dis¬
closure developed with respect to
by

the

pension plans. Our present policy
on
pension disclosure strikes, I

furnished

annual

amount,

the

aggregate

if significant, of
all real property

the rentals upon

then held by the registrant and its

•

reasonable balance between
possible
extremes,
seeking
to

subsidiaries under lease for terms

avoid, on the one hand, the overly
frugal disclosure which produces
misleading financial statements,
and on the other hand, the too

after

feel,
^

disclosure

extensive

the

whelms

equipped

that

ordinary

over¬

not

was

number

Where

difficult matter to
if

company

were

very

serv¬

benefits, actuarily determined,

brief

reference

in the balance sheet to the rental

any

liability for past

calls for

means

other obligations, preferably as

footnote, indicating the principal
of significant transactions

details

occurring within the

year or years

holders

through the appeal of generalized

When the Commission

first

en¬

countered this

set

time

any

net

value less any charge

Practically

companies

as¬

for

re¬

increase

tion

the

aggregate

ments

all

many

(such

conservative

tion,

needs

attempt

there

without

may

the

chance

subject

involve

the

pros¬

the

date

in the

ac¬

of adoption

liability would,
of course, relate not only to em¬
ployees actually retired or quali¬
plan such

fied to do
of

service

but also to the

past

those

employees who
would not qualify for retirement
until

future date.

This

securities

increasing

lush

the

evidence

profits

must

purchase the property
after certain periods.
In some of
or

these

it is clear

completely
irrevocable
commitments
apparently
occur
rarely, if at all. However, we feel

that

conclusion

though there is

even

no con¬

that the transac¬

is not at the outset, intended

lease

chase.

others

the

all

rather

but
facts

careful

lead

may

that

pur¬

study
the

substance, if
tract, or the contract runs for only not in form, a purchase is effected.
a short period, it would be unreal¬
Where this is true, the purchase
istic to ignore the probability that, must, of course, be accounted for
once
having installed a plan or as such with appropriate disclo¬
entered
into a
short-term
con¬
sure of pertinent details.
tract, the company will continue
In view of the fixed character
it. Accordingly, it is our view that of the commitment undertaken
by
-

.4;:

there

should

disclosed

sity

only

much

the

plan,

the

important terms

including

estimates of
annually, but

the amounts payable

also

the

company's best estimate

of the amount that would be

fund,

essary

funding

of,

complete

service

past

nec¬

the

obliga¬

tions at the balance sheet date

disclosure

the

indicated

com¬

stocks plus the effectiveness

seems

incontrovertible;

has taken the

countants

sition

same

po¬

its Accounting Research
Bulletin No. 38 issued in October,
1949.

•

the assumption that the plan is to
be continued.
In the case of em¬

ployees who have retired or are
eligible to retire an equally real¬

Disclosure Problems of Investment

Companies
Problems

accounting

the

course,

question

go,

how

istic approach seems to require data should be
presented to the
that, apart from any question as investor in order to give him the
to legal
liability, balance sheet most accurate
picture of the

provision should be made
amount equal to the sum
sary to
A

neces¬

fund the obligation.

second

recently

problem

quire rather drastic

company

erty

transaction

financing business

expansion.

ample

such

A
a

prop¬

common

ex¬

transaction

volves the construction of

in¬

build¬

ing, followed immediately by the
to some person with available

capital, often

insurance

com¬

pany, and the concurrent return
of the property to the seller under
a

long-term

leases contain

lease.
a

Often

renewal

these

few

years

Disclosure
sort

importance

con¬

apply with respect to conventional
leases, I now refer primarily to
the use of the rather popular sellmeans

new

last

disclosure

and-lease-back

with

dealt

appropriate
occupies prop¬
erties under long-term leases. Al¬
though our disclosure principles

where

security before" him.
problems of another
arisen

by the Commission

the

cerns

and may well
measures

keep them within bounds.
are

centered around

stitutional

larly

re¬

These

so-called

advertising,

the

in¬

particu¬

it relates to open-end in¬

vestment companies.
■■'i
a

medium

small

companies

which

investors

provide

of
consolidate
groups

may

their savings into one centralized
channel and thereby achieve some
of the advantages of diversifica¬

tion.

From

point

sirability
for

the

shares
pro

purely

view, the economic de¬
of

such

small

diversification

investor,

representing

rata

theoretical

interest in

an
an

through

undivided
extensive

list of portfolio securities, is
gen¬

option, erally unquestioned.

But

-f

turn

confine

which

their

purchases
largely to higher grade listed se¬

price structure for such

securities

may

out

produced

all

other

equity

financing for
enterprises, par¬
smaller
or
localized

business

ticularly
companies.

Furthermore,
funds grow

heavily

be.

our

original
a

now

of
There is

strong feeling among

very

continuation

lead

the depth

attitude.

members

some
a

beyond

that

trend

this

violations of

the Securities

staff

our

will

Section 5

Act, and perhaps of

the anti-fraud sections

well.

Advertising

Deceptive Information
It is

well

known, for example,

investment

quite

that

stance,

policy

risk

ous

producing

effect upon the market
other

severe

price and

creating adverse effects
portfolio securities as

well.

The
ability
to
adjust
promptly to changes in particular
companies, industries, or in the
climate

market

with

lost

itself

tends

transaction
a

stock

does it in any way su¬
regulate the cay-to-day

companies.

There are, of
provisions which
permit the Commission to prevent

ex¬

certain

course,

change will generally be less than
% of 1% of the price of the se¬
curity.
In open-end investment

over-reaching on the part of cor¬
porate insiders, and the like, but

companies,

it has

the

commissions

control, in the absence of
gross abuse of trust, over tne in¬
vestment policies, selection of se¬
curities
for
purchase
or
sale,
declaration of dividends, selection

are

closer to 9%,

although some com¬
panies have lesser charges and a
few have 110 sales load, as

ver.y
sucn

charges

herent

called.

are

combined

pressures,

These

with

attractiveness

the
the

in¬

ters

sales

year

approximated

the

first

Significantly
also

additional

panies.

led

quarter

$100

enough,

has
of

billion

the

com¬

and

There

six

closed-end

four

unit

lating

regis¬

the

same

made to laws

are

Nothing is

companies.

cows.

dissimilar.

One is

oranges
more

stable debt security, having be¬
hind it the full faith and credit of

insti¬

the U. S. Government—the

em¬

its detailed facts

on a
specific se¬
curity, salesmen commonly use
generalized
advertising
matter

based upon the entire
don't mean to

industry.

safest

security in the world that money
can buy; the other is a
participa¬
tion for the most part in common
stocks subject to constant price

ployed with telling success.
In¬
stead of using a prospectus with

fluctuations.

tempts

Other

liken

literature

the

at¬

redemption

imply, of course, aspects of the security to savings
bank deposits, an extremely mis¬
advertising,
It is quite

leading analogy.

an¬

other

•

matter, however, when such
advertising becomes the primary

There is, of course, a good deal
of other information disseminated
in the

guise of institutional adver¬
making sales of
securities, emphasizing all the vir¬ tising that is not demonstrably in¬
correct or inherently misleading
tues and assiduously
avoiding un¬
favorable factors of the open-end in respect to some companies. Yet
the
same
literature
investment companies.
applied
to
The pic¬
ture thus created in the investor's other investment companies would
an
mind ma.y be but little affected be
outrageous
distortion
of
by
in

the
the

used

facts.
more

would

pointed

prospectus

disclosures

when

is fi¬

theory- nally given to him in technical sat¬

amount

now

yields

decline,

ap¬

per annum.

compensation

geared to asset value becomes, by
its

nature,

very

continuously

heavier

charge upon income.
At
point this can become a

some

serious
current

burden, and the force of
selling methods pushes the
inexorably

industry
point.
In this

that

toward

connection, Congress

some

pectus

Its

inclusion
some

the

companies

be grounds for a

the extent

pros¬

might

stop order.

that securities

To
this

ap¬

possibility

the

develop, for Section 14 (b) of the
Investment

Company

Act

pro¬

vides:

"The Commission is

authorized,

at such times as it deems that any

substantial further increase in size
investment

any

companies

creates

problem involving the protec¬

tion of investors

the

public in¬
terest, to make a study and in¬
vestigation of the effects of size on
the

investment

ment

policy of invest¬

companies and

security

markets, on concentration of
of

trol

wealth

con¬

and

industry, and
on
companies in which invest¬
ment
companies are interested,
and

time

from

results

the

time

its

studies

report

and

in¬

vestigations and its recommenda¬
tions to the Congress."
While I do not wish to have my

institutional

such, is suspect.

material

basis

proximately $5,000,000

Against this background,

fixed

percentage of net assets, such as
1/4 of 1% per annum, and on this

re¬

insurance

comparing

open-end companies out of
grand total of 368 investment

all

much

extensive and inapposite

tered

companies,
banks, and cooperatives.
Another especially
reprehenssible example is the comparison
of investment company securities
to U. S. Savings Bonds. It is like

com¬

tutional advertising has been

open-

on a

of these situations might

comparisons

in¬

companies.

total of 145

are now a

companies is based

foresaw

manner,

have regis¬
tered with the Commission in ad¬

panies

received.
compensation of

parently

extensively regulated
supervised by the Federal
are

Government.

companies

dition

actually

that

and

trend

open-end

good deal of lit¬

end

disproportionate

income

panies

this

In less than two years, 22

management

vestment

become

may

total

posely slanted to create the im¬
pression
that
investment
com¬

establishment

investment

distribu¬

erature disseminated appears pur¬

million.

this

advisers,

Nevertheless,

and

investment

and
accountants, or other
prerogatives of management.

vestment

almost $2

also possible that compen¬
sation of promoters and managers

advisers of the

lot

growth.

It is

investment

round

in securities listed

nor

pervise

can

obvious, for in¬
investment com¬

pany
cannot overnight liquidate
large
holdings of a
particular
company's securities without seri¬

possibly

and

the
more

rities they

Institutional

larger

invested in listed secu¬
become, the less flex¬

uation

well

the

in size and the

ment

effecting

the relative cost and avail¬

upon

the

earned

in¬

proportion

Generally,

commission

savings

companies

management operations of invest¬

sales

that

Investment

amounts

pany

have

come

the

new

may

erably greater than those in other
types of securities. For example,

aggregate

and the American Institute of Ac¬

vast

open-end

their

na¬

facts

neling
into

ible

tional securities exchanges. There
is, accordingly, intense and avid
competition
between
companies

have

the

that

manner

service, there

of time when certain ar¬
tificialities will appear. By chan¬

advertising in pro¬
moting sales have carried the sit¬

company concept, have
resulted in enormous growth; the
assets of open-end companies now

this form of financing, the neces¬

brief footnote to the balance sheet
not

companies in active com¬
petition to perform essentially the

available

of institutional

excep¬

selection of securities listed

ability

which the lessee has the option to,

invest¬

earning
capacity.
Con¬
versely, repercussions may be felt

par¬

of what may

tion

Such

their

sale

and
between the distributors of that under the Securities Act ar.d
simplified discussion
these securities.
As a result the the Investment Company Act, the
be termed the;ordi¬
commissions
offered
dealers
to Commission does not approve or
nary type of sell-and-lease trans¬
action. ' ■ There are other types in sell open-end shares is consid¬ disapprove of any particular com¬

set

the

growth

point

principles,

advertising, the im¬
it
has
helped
to

the

impart

to
the

event

of the report.

which

same

should, under accepted accounting
counts.

petus

flated

pany

diversified

institutional

curities,

There

character, special¬

they purchase

Aside from the problems of dis¬
inherent in
the
use
of

that

open-end com¬
size, speculative

Almost

Growth

closure

recom¬

specific

by
In

should

security

then

and

company
subject
to
a
pending
registration
statement,
irrespective of its generality
it might be properly construed to
be an illegal prospectus.

ized or "balanced"
portfolios, sales
loads, operating expenses, and the
like), in a broad sense they all
are
offering
relatively
similar

services.

Companies

then

individual bases for dis¬

some

tinguishing

his

client's

such

objectives,

from the sale of investment

while

Involved

Investment

ticular

problem.)

Furthermore,

Problems

the

sub¬

securities and do not have the

same

advertising, tne in¬
be grossly misled and
seriously injured.

mediately furnished. On the other
hand,
if
the
advertising
were
purposely designed to facilitate

these

companies, i.e., those in which 110
right to redemption of shares is
available, have with one or two
minor exceptions stopped selling
new

sold

are

institutional

requirement, it was con¬
templated that one would be im¬

require¬
(Closed-end

Act.

company

vestor may

pectus

prospectus

the

first evaluate

choice
a

excep¬

continuously

are

the

would

mendations.

assets.

without

securities

companies

ject

the

practically

circumstances,
rit

such

all

for sale every day in the year in
order to offset redemptions and

Thus,

made

preferences and

are
continuously en¬
offering new securities

gaged

their

tender

upon

their current

demption.

not

type

his mind as to ment companies has implications
what securities he actually would which could affect
appreciably our
open-end
offer to potential customers but entire economy.
With more and

redeem

may

receive

rental.

pensions,

payment

and

panies

important nature of the fi¬
nancing accomplished
by this

ture

ice

leases.

conditional there is to

In addition to the foregoing, the

that

unfunded

such

of
are

Security

be stated the minimum amount of

irrevocably committed to the fu¬
\

date

not

person

tail.
It

the

rentals

than three years
of filing, and the

digest technical de¬

conclude

expiring

latter

ments.

had

cessive.

companies

Thursday, May 13, 1950

isfaction of the statutory require¬

general problem it
managers, who are generally com¬ attempted to solve it by
being
pensated by a fixed percentage of reasonably lenient in institutional
the net asset value of the com¬ advertising so long as there was
pany.
This charge may become no intent to sell specific securities
excessive. Further, distribution is subject to the prospectus require¬
usually handled through security ments. It used certain formulae
dealers and salesmen who receive in trying to determine such intent.
substantial
commissions.
These In general, it assumed as neces¬
commissions may also become ex¬ sary conditions that the advertiser

gations incident to ownership such

related steps).

quate

reduced

what nominal rental.

made of paid-in or

ordinarily at

^surplus

restrictions

through

accounts

com¬

organized and operated
by their promoters and

are

for profit

Information Objectives of
SEC and Capital Raising

Investment

remarks

construed

that

this

the

Commission

aware

pects
these
more

and

as¬

difficult problems

other

general

of the Act.

are

alone

not

Quite

to formulate

regulation

recently,

mittee of the NASD
up

increasingly

of the increasing size of
companies are presenting

purposes

of the fact that certain

relationship

cern.

indicating

point has been reached,

this

con¬

subcom¬

has been set

of selfthe industry. The
a program

Voltftne'171 v Number

4908

The Commercial and Financial Chronicle

...

NASD has been very effective in
conduct in the securities business

statement,.and statement of sur¬ sitive to small business problems
plus—which are essential to any and endeavors to simplify its re¬
analysis of the worth of a corpo¬ quirements in so far as they may

generally and

hopeful that
its efforts in the particular field of

rate

mutual

claiming earnings of $10 million

maintaininghigh ^standards

;

we are

funds

will

equally

prove

fruitful.' *
Frear Bill

either

You will recall that I mentioned
a

in the

gap

coverage

existing legislation which

exposes

stockholders of many sizable com¬
panies to the hazards resulting
from lack of disclosure and other

largely archaic practices. I should
like

now

Thus in

per year

The

earlier

security.

comment

the

upon

pending legislative amendment to
the Securities Exchange Act de¬
signed to correct this situation.

instance

one

released

financial

company

balance sheet,

stockholders

the

ment

affect such business.

"/1

services.

any

Treat¬

Thus, under
the Securities Act, where financ¬
ing involves less than $300,000,
no registration statement need be
filed; only a letter of notification
is required. In
suggesting the fig¬
ures
of $3,000,000 of assets and

too, was often
arbitrary and inadequate. A num¬ 300 security holders as the mini¬
ber of companies set up reserves mum level for regulation under
without mentioning their purpose. the Frear Bill,
the Commission
One company with assets of $6.5 has again leaned over backwards
reserves,

for con¬ to avoid burdening smaller com¬
Actually, some 500 com¬
tingencies of $2.2 million without panies.
mentioning any particular contin¬ panies, about 20% of all those
now registered with the Commis¬
gency
for which provision was
million

set

reserve

the

"death" of incompetent and
irresponsible management. How¬
ever, I doubt that the Conference

them. But, as we all know, there

management

Small

Business

sion that
mon

such

management to continue
in office,"'
- •> *
;
;
•
,

Finally,

charged

the

$3 million of

300 security hold¬

over

to make the

closure

type of basic dis¬

required by the Se¬

now

curities Exchange Act, the Public

Utility Holding Company Act, and
the

Investment

Company Apt.

These acts require periodic finan¬
cial statements to be filed with the

which

should

Abuses

public

which

inspection,

are

full

open

disclosure

in connection with the solicitation
of

proxies,

whenever

full

and

insiders

disclosure

trade

their

company's securities.

own

The

this

for

need

legislation
arises from circumstances deeply
rooted in our corporate form of
business enterprise. I need not tell

that the corporation has long
since become the dominant instru¬
you

ment of such

enterprise,

nor need
length the prob¬
lems arising from the separation

I discuss at any
of

management and ownership.
Some of you may recall that Adam
Smith

emphatically repudiated the
corporation for this very

stock

"The

reason;

Wealth

tions" he said:

"The

nies
of

being the

managers

other

people's

that

over

such

compa¬

rather
than of

money

it cannot well be

own,

pected

Na¬

•

directors

>..

their

should

they

with

the

ex¬

watch
anxious

same

vigilance with which the partners
a private copartnery frequently

watch

their

over

stewards of

own.

the

rich man, they are

apt to consider attention to small
matters

honour,

for their

not

and

themselves

master's

easily

very

give

dispensation

from

having it. Negligence and profu¬
sion, therefore, must always pre¬
vail, more or less, in the manage¬
ment of the affairs of such

tion, Vol. II,
To

com¬

(Everyman's Library edi¬

pany."

229.)

surprising extent, Adam

observations

Smith's

have

held

True, the fiduciary respon¬
sibilities of management
have

good.
been

clearly

defined

and

probably the interests of manage¬
ment and ownership have more

nearly

pated.

found

coincided than he antici¬
Nevertheless, we have
that, in the absence of

disclosure

requirements, manage¬
ment ordinarily holds its cards
very close to its vest. The stock¬
holder in such companies seldom
has

sufficient

ercise any

information

sort of intelligent, ef¬

fective control

over

management's

actions.
We

ex¬

estimate

that

some

1,800

were

connection

the

even

businesses."

with

the

The spectre of

evident

practices

reaucracy
for

government bu¬

many

difficult to lay,

tion

directors

the

mention

the

whom

for

persons

management proposed to vote.
instance

there

was

however, that the Com¬

you,

mission

closure of management remuneration.
Frequently, stockholders

laws.

1950

and

this

approached

In gingerly and with

dis¬

any

sure

problem
bias opposed

The studies in 1946
undertaken

were

de¬

evident

simply requested to sign a logical disparity in the law reratifying all acts of man¬ suletd in real abuses. I have al¬
agement since
the last meeting ready pointed out the conditions
were

proxy

without

specification

any

the

which

revealed.

were

circumstances

the

Under

invariably stockholders had either

"do-nothing" pol¬
icy would have betrayed the Com¬

mission's trust to the investor and

nature

vote

posal
was

the

for

acts.

And

management pro¬
be disfranchised. There

provision for

almost

"No" vote

the ballot.

I believe that all the other argu¬

recently carried

have

Digest proposed

story under the
"News You'll Never
a

heard

legislation

based upon a

its language or

Manufacturing Co. of this city is

called

receiving

Small

duced

meeting

advance

to be

"Instead

its

annual

held next Friday.

form,

separate

Mongol printed the proxies

the

either

are

misunderstanding of

heading
Read," which was intended as a
comic parody
up on
corporate
proxy practice.
It read:
"Philadelphia—The Mongol

congratulations from
corporation officials all oyer the
U. S. on a new proxy form intro¬

against

constitute

at¬

tempt to reargue the merits of the
Securities
For

Exchange

instance, in

Act of

1934.

resolution

re¬

passed by an organization
"Conference of American

cently

Business

Organizations,"

opposition to the Commission's
proposal
is
expressed
on
the
grounds (1) "The SEC would in¬
intra-state field

the

vade

(2)

trol,"

SEC

the

would

con¬

have

the power of "life and death over
small enterprises through dictat¬

Such

equity-conscious.

small

study indicates that purchases by
private investors of equity se¬

charge

dis¬

tial

secret

information.

that act contains

governing
confiden¬

Section

dividend checks sent to

Congress

ing the legislation.
the

Commission

On this issue
eye-to-eye

sees

that

date

consider

Commission

the

that

shall

problem and adopt

with the Investment Bankers As¬ appropriate rules. I can state un¬
sociation, the National Association equivocally that it is the Commis¬
of Securities Dealers, the National sion's purpose to grant exemptions
Securities Traders Association, the of this character.
New
York Society of Security
I find it difficult to comment

Analysts, the National Association
of Investment Companies, the New
York Stock Exchange, the New

The

spectre

reaucracy

ing it to date, earlier this year. It

of the

found

that

the whole

financial statements of these

panies
often

were

the

bine

com¬

aura

seriously inadequate,
point of being mis¬

leading.

Many companies did not

furnish

their

even

stockholders

with

the three basic statements-

balance

sheet,

profit

and

loss

and

Act,

that

many

granted

the

have
From

re¬

fusals to grant confidential treat¬
ment there

the

to
speaking,

much

of course, be an
courts. Generally

may,

appeal

have

so-called

found

that

confidential

competing companies. We know
no

Act

given

material

any

restricted

area

investment, however, the appetite
for equity securities is almost in¬
satiable.

told

great demand

for

that

there

equity invest¬

ments which carry with them con¬
trol of the enterprise in question.

This

with

situation

Smith

would

closure

tween

which

Adam

undoubtedly

note
Certainly, full dis¬

interest.

fundamental

the

any

bridging the

progress

gap

be¬

relative

attractiveness

No company can,

with any consist¬
complain about the lack of.
equity capital and still refuse to
give
its
common
stockholders*
adequate financial information.
ency,

Tellier & Go. Sells

where operation of the

case

has

ma¬

terial is in fact rather well known

bonds

management - controlled
and
be stockholder-controlled enterprises.

will

future.

although
purchases
of
by private investors rose.

years,

Tefev. & Radar Sfocft

ad¬

vantage to competitors.
We have been heartened by the
of investors to our pro¬

Tellier & Co. announced

reaction

posal as we have been disap¬
pointed by the opposition of some

corporations affected. The

cleavage

very

and

ment

between

ownership

manage¬

which

that

its
of

Corp.

Proceeds

emphasized by these two
tions, for we have heard

from

debtedness

investor in opposition to
principle of the bills.
Of

the

majority
of corporations have preferred to
course,

remain

the

opposing
lation.

sidelines, neither
supporting the legis¬

nor

should

great

suggest,

Radar

cents*

share has been oversubscribed

per

and the books closed.

the

from

stock

May
747,500

Television

common

proposal is designed to reduce is
reac¬

offering

will

be
of

the

used

the

repay

in¬

sale
to

the

corporation, to
equipment
for working capital.

purchase
and

additional

Television ! &
Radar
Corp.r
through its wholly-owned subsidi¬
ary Plastoid Corp., manufactures*
various products essential to the
television and radar
coaxial

however, that it would be to their

etc.

interest, in the long run, to sup¬
port the proposal. It is the kind
of legislation under which every
one will gain. The 1,800 corpora¬

verters

also

which

changing
sets

cable,

over

receive

industry, such
wire,,
developing con¬
insulated

will

present
color

used

television

when

color,

broadcasting is undertaken.
The
corporation expressed belief that

Offering Completed

during 1946 and again, after revis¬
was

doubt

Securities

actually declined in 1949,

Mohawk Bus. Machines

upon

the Conference's second ob¬

jection,

that

requiring

adequate

information in proxy solicitations
amounts to the power of "life and

be affected by York Curb Exchange, and the
death" over small enterprises. The
legislation. A rep¬ "Wall Street Journal."
resentative sample of these com¬
Most of the arguments advanced average proxy statement required
panies was studied by the Com¬ against the legislation have been by the Commission is about four
mission, and the facts uncovered emotional rather than rational. pages in length. It is neither tech¬
transmitted to the

Exchange

the

SEC

recent

tions affected will directly bene¬
in about a year, if color broadcast¬
fit
from
improved
stockholder
week, making it ing of information required in
and customer relations, for there ing is ready for use, there will be
necessary for the holder to sign a
proxy
forms,"
(3)
Competitors is no better
a
demand for some five to ten
advertising than the
favorarble proxy and insure its would be able to take
advantage financial
million converters.
story of a sound busi¬
return to the company, in order
of
information
filed
with
the
ness, Moreover, when additional
to cash or deposit his check."
Commission.
public financing is necessary, it
The author of that story prob¬
The proposal does not invade will be found that the
availability
ably does not know that this im¬
the intrastate field; Federal juris¬ of information about the business,
aginative' device for obtaining
diction must be grounded upon made relatively uniform
by Com¬
proxies was actually used a few
either interstate commerce or use mission
rules, will improve and
years ago by a Baltimore concern
of the mails. But even where such
facilitate the financing. This is
According to an announcement
—and there was nothing anyone
grounds for jurisdiction exist the particularly true of smaller and made on May XI, all of the 58,612.
could do about it.
bill expressly
states that com¬ lesser known businesses who now shares of common stock (par 10
I
have
heard
no
argument
have difficulty in generating suf¬ cents)
of Mohawk Business Ma¬
against this proposed legislation panies substantially all of whose
securities are held within a single ficient investor confidence in their chines Corp. which were recently
that
withstands
analysis.
Its
state may be exempted from the
securities.
publicly offered by Jacquin, Bliss
obvious merit has attracted the
By and
large, a
sound
and & Stanley at $1 per share have
almost unanimous support of the provisions of the bill by rule of
the Commission. Since the Com¬ growing company of substantial been sold and the offering com¬
financial community, and the
mission
is also granted general size has little difficulty in se¬ pleted.
The net proceeds have
President
of
the
United
States
curing debt capital. Institutional been added to working capital.
sent a special communication to exemptive powers, this special ex¬
both houses of Congress endors¬ emption must be read as a man¬ investors such as the insurance
backs of

proposed

were

the Commission

administered

compared with three previous

absolute pro¬

years

other

Exchange Act

the release of

shareholders last

corporations will

the

irra¬

each

curities

of the

the economy.

ments

The Investment Dealer's

such

among

war

curities

termine whether the very

level

tional. We do not, however, seem
to
be
progressing
in
making

regards the provisions of the Se¬

has

price

people with funds to invest

"against

constant

ing the 16

Bureaucracy

investments

any

Commission
in

Spectre of Government

naked

protestations by persons
in
unregistered companies
in soliciting proxies. Seldom did government are usually dismissed
a
proxy solicitation for the elec¬ as self-serving declarations. I as¬
Of

names

Commission

clothe

resolution that competitors would
use the information filed with the

being made.

figures with meaning.

good

and

success

justify the conclu¬
prejudice against com¬

stock

and

whose

other companies

many

long record of

Similar violations of sion, have less than $3 million in hibition against revealing trade
accounting practices were assets. These companies have filed secrets or processes and whenever
This legislation is designated in
evident with
respect to capital financial statements and met the an
the U. S. Senate as the Frear Bill
application
for
confidential
various
other
requirements for treatment of
(S. 2408) and its counterpart in stock, sales, income, and fixed
any item or report
many years without apparent dif¬ is
made
the
the House of Representatives is assets; one company, for example,
Commission
may
listed 95% of its assets under the ficulty.
Thus, I think it is quite make that information public only
te Sadowski
Bill
(H. R. 7005).
single caption "Property, Plant, evident that the coverage pro¬ when such a disclosure is in the
Hearings in the Senate have al¬
and Equipment, including intan¬ posed by the new bills is very
public interest.
ready been concluded.
gibles." Almost invariably lacking moderate.
Many requests for confidential
Briefly, the bills require all cor¬
was
the
explanatory material
treatment have been granted dur¬
porations with over
ers

are

Organizations
is attempting to defend the right

sound

assets and

(2077)

government

legislation attempt to
this

bu¬

is raised and opponents
with

the

com¬

sympathetic

which surrounds small busi¬

urging that it will, in some
incompletely articulated fashion,
be hampered by the pending leg¬

ness,

The

nor

Commission,

its regula¬

show, is extremely

sen¬

difficult

when

that

proxy

information

tial

posals to
for

the

pro¬

this
of

information

"life

can

death"

unable to understand except in so
far

true statements may mean

for

have

such

tre¬

invest¬

Three With Merrill LynA
(Special to The Financial Chronicle)

primary capital-raising

portion of new capital needs from
the sale of

new

common

stock. Of

companies cannot continue
to borrow, for debts, unfortunate¬
ly, come due.
.v.;.-course,

all

are

aware

great

who

will

people

with

consider

not

in the

stock of American

common

do not speak now of

dissuaded

structure

cally,

the

with

ANGELES, Calif. — Wynn
Dahlgren, Julien M. Harwood,
Walter

Landauer

have

been added to the staff of Merrill

Lynch,

Pierce, Fenner & Beane,

523 West Sixth Street.

With

present

Townsend, Dabney

(Special to The Financial Chronicle)

Mass.—Alan C. Lejoined the staff of

BOSTON,
land

has

parentheti¬

State Street, members

Tyson, 30
of the New

like to see re¬
particular atten¬

York and Boston Stock

Exchanges.

which,

should

examined

and

direct, non-controlling investment
business.

LOS

that there are

numbers

funds

tax

before the meeting
the proxy is sought.

banks

problem is to secure an adequate

those

come

which

How

about

ment. The

require
solicited

the stockholder be told the essen¬

and

funds

mendous

prepare.

Commission rules simply

matter

islation.
tions will

nical

companies

tion given

such questions

taxation

dividends

double

and

the

Townsend,

Dabney

Allan Hart Opens

Del. — Allan
securities.
results and man¬ Hart is engaging in a securities
agement record of many com¬ business from offices at 913 Mar¬
panies do not, of course, merit ket Street. He was formerly with
entrusting hard-earned dollars to John K. Walters & Co., Inc.
status

The

tax-exempt

operating

WILMINGTON,

The Commercial and Financial Chronicle

(2078)

Continued

from

page

at $5.91.

stood

date

compares

•1

-1

•

lack of steel, manufacturers are mounting new
possible source of steel supply, and (4) the
strike magnified the difficulties of producers and

of output due to

rail

partial
*•

every

pressure

alike.

.consumers

orders filled by local mills they are reaching into the

can't get

them and paying the freight, too, this trade authority

East to get

asserts.

and producers are convinced that the
tight market in steel for many weeks. To
producers this means an extended production battle to recoup
production delayed by strikes and satisfy their customers' needs
steel

very

earliest

the

consumers

round of

possible

date.

consumers

another

means

procurement difficulties which will again challenge their

ingenuity, "The Iron Age" points out.

Sales

producers

offices of

district

are

plead their needs.
Sales executives face the unhappy task of
trying to explain that the steel is just not available, in spite of

continuing record-breaking production.

;

of getting steel

means

(at

Conversion is also

higher cost).

inflating the scrap market.
The American Iron and Steel Institute announced this week

companies having 94% of the steelmaking capacity for the entire industry will be 101.3% of capacity
that the operating rate of steel

for

the

beginning

week

last week's rate of

May

1950.

15,

This is

1.2

points

above

be the fifth consecutive week of steel

production at 100% of capacity or better, and, according to the
Institute, "never before has so much steel been made in a week."
rate is

operating

equivalent to

1,931,000

tons of

tons

week

one

production

ago.

amounted

month

1,906,300

ago

rate

the

tons;

year

100.0% and

was

stood

ago

The

the

energy distributed by the electric
industry for the week ended May 13 was esti¬
5,864,326,000 kwh., according to the Edison Electric

light and
mated

Moderately

power

Institute.
It was< 7,358,000 kwh. lower than the figure reported'for the
previous week, 607,350,000 kwh., or 11:6%, above the total output
for the week ended May 14, 1949, and 755,653,000 kwh. in excess
of the output reported for the corresponding period two
years ago.

Railroads.

This was

preceding week.
Excluding
than last

ore,

which

has

been

lower

level

in the opening of navigation on the
Great Lakes, loadings exceeded the
corresponding week of 1949
by 2,916 cars.
The
3.2%

week's

below

total

represented a decrease of 24,287 cars or
corresponding week in 1949 and a decrease of
15.5% below the comparable period in 1948.

the

136,247 cars,

Auto Output Sets New High Record
According to "Ward's Automotive Report" for the past week,
motor

vehicle production in the United
vanced to an estimated high record of

States

177,898

with the previous week's total of
146,337
The former record

23,1949.

cars

was

and

Canada

units

compared

(revised) units.

cars and

The

1,997 trucks built in Canada.

and

industrial failures

rose

217

the week

ended May 11 from 199 in the
preceding week, Dun & Bradstreet,
Inc., reports.
At the highest level since
early March, casualties

exceeded the 171 and 100 which occurred in the
comparable weeks
of 1949 and 1948, but continued 32% below
the prewar total of 321
in the similar week of 1939.

Failures involving liabilities of $5,000 or more
increased to
168 from 151 last week and
compared with 133 of this size a year
ago.
Little change occurred among small
casualties.
trade

accounted

principally

for

the

week's

increase,
climbing to 113 from 94. Contrary to the general
rise, both wholesale and construction casualties declined.
More

with casualties

concerns

failed

flour

than

year

their 1949 level.

in manufacturing, retailing and
and service were off slightly from

ago

construction, but wholesaling

market

Bookings

and the Pacifie

weekly rise

decline

from

recent

high

levels

the

result

prices developed an easier trend most of the past week,
but turned higher in closing sessions to finish about unchanged
for the period.
Mill

demand

moderate

was

with

reaching the largest volume for

Wholesale

and

buying for export account
weeks.

many

Trade

1949

Day

promotions

numerous

spe¬

volume of women's apparel and

accessories rose moder¬
their increased popularity brought the general
of apparel sales to a level slightly above that of past

last week;

Cotton

dresses, sportswear and hosiery

of shoppers; there was
handbags and small furnishings.
numbers

Retail

wear

rose

also

sought by large

were

increased

The interest in

demand

summer

for

styles

slightly.

food

purchasing was nearly unchanged during the
Dairy and poultry products were bought in considerable
quantities.
Except for pork, the interest in fresh meat dipped
slightly in many sections.
week.

There

renewed interest in furniture items the past
buying of these and other house-furnishings in¬
creased in dollar volume
The buying of television sets and some
large appliances was sustained at the high level of recent weeks.

week;

was

estimated

from

period ended

Wednesday

above to

3% below the level of a
Regional estimates varied from the levels of a year

ago.

ago by

these percentages:

The latest index
year

ment

even

with

that of

the

Department store sales
Federal

Reserve

-Dollar

comparable week

volume

Board's

for

the

week

taken from

ended

the

date show

Sales

lifted

corresponding period
a drop of 3%.
for

department

about

Mother's Day

over

stores

the

year

ago,

May

6,
A decrease

and lor the

year

1949

New

period

York
as

last

week

result

were

good

volume.

the
being offered sub¬
ject to approval of the Interstate

1949.

10%

was

equals

that

recorded

both

and is the highest since Jan.
25, 1949, when

are

Commerce Commission. The group

awarded

was

the issue

its bid

of 99.7019.

from

certificates

the

will

the

sale

used

pro¬

vide for the following new stand¬
ard gauge

railroad equipment esti¬
$3,720,000:
five
Diesel-electric
freight
locomotives, and four Diesel-elec¬

mated to cost not less than

tric switching
locomotives.
Associated in the offering
R.

are:

Pressprich & Co., The Il¬

linois Co., Otis & Co. (Inc.), Free¬
man & Co., McMaster Hutchinson
&

Co.,

and

Peters,

Writer

Christensen, Inc.

Transfers

Atlanta

(Special to The Financial Chronicle)

ATLANTA,
Buchanan
the

Atlanta

Ga.
now

Shelton

—

associated

office

with

Thomson

McKinnon, Healey Building.

Mr.

Buchanan has been Resident Man¬

the

firm's

office

Ft.

Lauderdale, Fla.

Vance, Sanders Adds
(Special to The Financial Chronicle)

and

III

have

William

become

Paxton

affiliated

with

Vance, Sanders & Co., Ill Devon¬
shire Street.

Joins H. Hentz Staff
CHICAGO, 111.—Joseph S. Bernhas joined the staff of H.

bach

Hentz

According to the Federal Reserve Board's index, department
sales in New York City for the
weekly period to May 6,
1950, declined *14% from the like period last year. In the preced¬
ing week a decrease of 3% (revised) was registered from the
decrease

un¬

Plan,

(Special to The Financial Chronicle)

store

similar week

Issued

BOSTON, Mass.—John A. Car¬

ago.

year

country-wide basis,

index

to 2.625%,

Philadelphia

certificates

ter
on a

equipr

maturing

was

1950, declined *10% from the like period of last year.
of 1% was recorded in the previous week from that of a
year
ago.
For, the four weeks ended May 6, 1950, sales declined 7%
from

the

der

buyer demand rising for apparel as well as for some
items, total order volume increased slightly in the

Wednesday of last week.

Grande

semi-annually Dec. 1,1950 to June

other wholesale

Rio

certificates

trust

ager

England, Midwest, and Pacific Coast +1 to —3; East and
South 0 to —4; Northwest —1 to —5 and Southwest
+2 to —2.

period ended

Denver

790,000

Western RR. series P 2%%

For the four weeks ended May

reported from the like week

6, 1950,
last

Co., 120 South La Salle
the past he was with

Street.

Wayne Hummer & Co.

With Stephenson,

Leydecker & Co.

year.

For the year to date volume decreased
by 6%.

(Special

Mother's

Day

to The Financial Chronicle)

OAKLAND, Calif.
Calderhead

Leydecker

Joins Wm. Staats Staff

through the previous high point for the
year touched
mid-February, the Dun & Bradstreet wholesale food price index
for May 9 rose to a new 15-month
peak of $5.89, from the previous

Equip*

Halsey, Stuart & Co., Inc. and
Associates on May 10 offered $2,-

consumer

Total retail dollar volume for the

year

Proceeds

prominent in

were

—

with

Ethel M.

Stephenson,

Co.. 1404

Franklin

Pacific Co. Adds
(Special to The Financial Chronicle)

15-Month Peak

Aug. 9 and 16 last

Grande Western

from 1.35%

cialty and department stores throughout the nation.
The

special

weekly issues for $1Inc., 654 Madison Ave^-

1, 1965, inclusive, at prices to yield

Level

Generally warm weather coupled with purchasing in antici¬
pation of Mother's Day helped to raise consumer spending in the
period ended Wednesday of last week.
Total dollar volume was
very slightly below the level of the similar period a year ago,
according to Dun & Bradstreet, Inc., in its current summary of
retail trade.
\V-' l\
Mother's

special

—

Offers Denver & Rio

centered in the Middle Atlantic

Attains New

stock

New York 21, N. Y.

Street.

Price Index

with

Halsey, Stuart Group

hogs advanced sharply under curtailed receipts;
at the highest since
last October.
Steers

States.

figure of $5.84.

reversal,

discuss¬

market

before

are

Cotton

the

sell

liberal marketings.

was

present

four

nue,

products generally were in good demand at higher prices.

some

Corpora¬

recommendations

Bondex,

continued

on
the uptrend, reflecting a very
position for that commodity.
Lard prices
advanced to new seasonal highs under a broad speculative buying
movement.
Supporting factors included strength in vegetable oils
and expectations of large government allocations for export.
Pork

values

con¬

trial offer of current bulletin and

statistical

(Special to The Financial Chronicle)

Food

chance

market

flour market.

^Changes from a year ago reflect in part the fact that
on
May 14 this year while in 1949 it was bit "May 8.

was

whether

Prices for live

States

Phase?—Bulletin

Final

ing

likewise shown in the export

current

1950,
amendments of

160
Broadway,
York 7, N. Y.—Paper—$2.50.

hedge

prices

and

22,

Company,

New

of hard

occurred

Most of the

tion

bakery flours showed moderate improvement, although
buying for nearby needs continued the rule. More interest was

favorable

annotated

April

Edition—United

last

firmer.

was

taining the
the
Legislative
Session
which
ad¬
journed
March
22,
1950—31st

a year ago.

wheat

almost

Business Failures Extend
Upward Trend

Retail

domestic

With the

142,419
total

The week's total compares with
118,199 units produced in the
like 1949 week.
1
; '

Commercial

week

Corporations

revised

high levels for the season, wheat prices

New

160,173 units in the week ended July

The total output for the current week
was made up of
and 28,467 trucks built in the United States and a

5,015

ad¬

New York Laws Affecting Busi¬
ness

delay in seeding operations.

of men's and children's

due to delay

year

same

new

weeks.

freight for the week ended May 6, 1950,
the Association of American
decrease of 24,287 cars, or 3.2% below the

according to
a

Chicago Board of Trade in¬

delay planting of spring wheat in northwestern states.
There was a moderate export demand for corn.
Country offerings
of the yellow cereal expanded materially as prices advanced close
to the loan level.
Strength in oats was largely influenced by

revenue

cars,

the

in late trading on reports of heavy rains in some areas
winter wheat belt.
Wet and cool weather

average

Carloadings Show Modest Contraction

futures

continued to

ately

Loading of
totaled 744,040

prices continued

grain

irregular,

southwestern

Retail

of electrical

amount

reaching

declined
of

95.6% and 1,7.62,400 tons.

Electric Output Declines

25,300,600 bushels in the

steel ingots and castings for the entire industry compared to 1,908,200

were

closed
248.04

sharply, totaling 331,359,000 bushels for the week, or a
daily average of about 55,200,000 bushels.
The latter compared
with a.'daily average of 47,600,000 bushels the week before, and

showed

100.1%.

The current week will

This week's

movements

volume

Cocoa

Conversion is becoming even more popular with consumers as

commodity price index
last week, reflecting

year

creased

This week some cutsomers who

for the

to trend higher during the past week.

continued

normally would deal through
streaming into home offices to

high

new

/•;*'

After

is for

outlook

further

continued strength in many basic commodities.
The index
at 259.85 on May 9, compared with 257.15 a week ago, and

•

Both

•

last year.

is strongest in the Midwest,

tight in all areas.
Consumers in the Midwest are running
continued shortage of bars, plates and shapes.
When they

now

into

The Dun & Bradstreet daily wholesale

reached

Although

steel is still increasing. Although
most major steel items are

•*'

■

■.

Commodity Price Index Lifted to New High

This week the pressure for
demand

the corresponding

on-

•
.

The Stale of Trade and Industry

$5.68

with

Thursday, May 18, 1950

increase of 3.7%.

year ago, or an

•

.,.

LOS

ANGELES, Calif.—Homer
W. Wessendorf, Jr. is wih William

Staats

Co.,

640

South

Spring
Street, members of the Los An¬
geles Stock Exchange.

LOS

'ANGELES,

Butzbach

With Barrett Herrick

Calif.—Harry

with

Pacific

Co.

California, 623- South Hope
Street, members of the Los An¬
geles Stock Exchange.

(Special

to The Financial

CHICAGO,
meyer

staff

now

Chronicle)

111.—Earl

W. Bauassociated with the

Barrett

Herrick

Inc., of New York City.

Co.,

Volume 171

Continued

Number 4908

from

...

The Commercial and Financial Chronicle

around 5V2%.

is rea¬
that,
under

respectively.

7%,

sonable

expect

Standard's

Falls
Spring profit margins will be im¬
proved.
This would enhance total
net

guidance,

the

income further,

basis.

•

share.
in

the

Standard

year-end, Standard
good financial position.

Current

outstanding
Steel
Spring's

most

assets

than

were

five times current liabilities; cash
alone

1.8

was

times

achievements is the record it made

bilities.

in the first

current

lia¬

almost $17 million.

quarter of 1950. Sales
and earnings of course reflect the
latest
addition.
But
that was

customer.

Working capital equalled

time

dividends
realistic

than

the

market

allowing for.

During the present bull market,
the

so-called

"defensive"

high

since 1946, and

higher.

Yet

some cases even

many

these

stocks

the

Kress,

course, depend upon activity in
the automobile industry.
It is our

belief that automobile

etc.

considerably lower earnings

1949 than in 1948. In Cunning¬

ham

Drug, however, we see the
anomaly of a "defensive" stock
which

was

the

However,

first

the

for

stock.

common

quarter of 1950 net
sales jumped to $72,724,620 against
$57,781,559 in the same period of
net income was $8,784,against $3,647,287, equivalent
to $2.78
per
share in the first
quarter—more than double
the

1949 and

017

amount

earned

share in the
period of 1949. Put another
a 27 % increase in sales re¬

same

way,

sulted

per

than

had

financial
the

condition

current

shown

position at the yearexceeded

assets

Current

end.

excellent

$112 million against current lia¬
bilities of $39 million while total
assets exceeded $224 million.
the

1946

the

is written

this

time

vertible

high.

up, the author regards
Cunningham Drug stock as qual¬
ifying as a "blue chip" in every
category except in its present uninfested price. To the discriminat¬
ing investor who will venture be¬
yond the so-called "name" stocks
sum

issue

had announced plans to

$37,500,000
in new con¬
preferred stock princi¬

expansion of plant fa¬

pally for
cilities.

holders

Common

are

given the right to subscribe to

the

stock.

new

American

Cyanamid offers the
ingredients to a sound

R. M. Horner & Co.,

Herzfeld & Stern, New York City,

New York

Stock

(Cunningham Drug Stores, Inc.)
The

security I

best

must

following characteristics:
(1) It must be well entrenched in

its field;

(2) It must have strong
"defensive"

qualities
well

(3)

have

must

ing capital condition is such that
its cash items alone exceed total

strong

outstanding—381,000 shares
of common, with no funded debt
and no preferred stock. Expansion
has
consistently
been financed
from earnings, which until now
have largely been retained in the
business. Although book value by
itself is hardly a conclusive yard¬

stock

with

tion

and

liquid balance
(4)

have

sheet;
must

unusually
able manageraent

—

ag¬

able

nevertheless

that

note

with any and all contingen¬
cies; (5) It must be a security
whose price is relatively
uninfiated, with a most reasonable
ratio of selling price to earnings
—and at the same time producing
cope

satisfactory yield.

Cunningham
the above

opinion,

Drug

all

possesses

characteristics to

unusual

de¬

briefly examine the
see how
Cunningham fits into each one of
Let

gree.

above five

requisites and

them.

Cunningham
its

Drug

Stores and
operate

companies

affiliated

and had combined
sales of approximately $33,800,000
164 drug stores

for the year
The

ended Sept. 30, 1949.

majority

erated

are

the

Its

area.

op¬

in the State of Michi¬

with emphasis

gan,

stores

the Detroit

the

affiliate,

Marshall

Drug Co., operates 46 stores in the

Cleveland, Ohio, area. The stores
in the

Cunningham chain are out¬

standing examples of retailing ef¬
ficiency

and

operation—the

ma¬

jority of them being modern, large
and

air conditioned.

From

when

1934

American

struggling
keel,
than

time

business

maintain

From

interesting

sales
1941

was

even

the

present, Cunningham's sales have

Cunningham is one of

the few

(if not the only one) re¬
tail companies listed on the New
York Stock Exchange whose stock
selling at less than book vaule.
The
vast
majority
of
variety
is

stores, grocery Chains, drug stores,

etc., listed on the New York Stock
Exchange are selling at consider¬

ably above their book value.

Diversified products.

(2)

(3) A long record of continuous
dividend payments.

net

percentage of

high

(4) A

current assets to total assets.

(5) Increasing net income

and

growth potentialities.
With

present dividend of $2.50

plus the extra
declared in 1950 and an
extra expected before

year-end, the common stock
price of $70 per share has a
definite place, I believe, in the
In
selecting "The Security I
Like Best," I believe I can safely investment portfolio of long-term
investors and is attractive to those
say
that American Cyanamid
who purchase securities for nearcommon appeals to me primarily
term profits.
It is quite within
from the investment point of
reason to expect earnings for 1950
view.
To qualify, an investment
to approximate $10 per share.
should offer the purchaser both
attractiveness and expectation of
EDMOND P. ROCHAT
future continued growth or ex¬
Therefore,
the
allimportant quality for which I
look is progressive management,

Cunningham's

management

carries forward
to

times

heights in good
the corpora¬
tion's fundamental position in
new

times of economic stress.
The

management

Cyanamid
over

and

President, Grady, Berwald & Co.,

emerged

the future

Nevertheless,
I shall attempt

two

Originally incorporated in 1907
cyanamid,
the succeed¬
ing years, expanded its products
to include not only chemicals but
agricultural fertilizers, synthetic

total
$4.17

earnings

would

share.

per

security market which is capital¬
at

sues

times

dend

earnings

year's

per

share,

admittedly

low

payments of $1.25 per

Cunningham

the com¬

itself, I am not hesitating in
recommending the stock to the
most discriminating investors.
The

which

stock

second

offers

definite

be¬

chance

capital appreciation is the Oxford

Although the
considered as a
investment, due to its

Paper Co. common.
stock may not be

conservative
dividend

its

and

record

leverage

position, I definitely believe that
it

represents one of the most out¬
standing speculations in the paper

industry. The vast moderninzation

undertaken after the war
part completed and

program

is for the most

should

start

dividends.

return

Due

servative

its

handsome
very

con¬

dividend

policy,
the
management has reinvested in the

Cun¬

stock

today

divi¬
share,
yields

property

the earnings of

selling

only three times earnings.
In

conclusion, I have always
security that should
bought for the future has al¬
ways been a special situation that
has escaped the attention of the
found that the
be

investment public.

As both stocks

briefly described above belong in
that category, I believe that they
have above average possibilities

With Morgan & Co.
Calif.—William

has become associated

with
Morgan & Co., 634 South
Spring Street, members of the Los
Angeles
Stock
Exchange.
Mr.

O'Bryon

was

formerly

Dempsey-Tegeler

Co.,

with

and

Brashears & Co.

First California Adds

fa¬

(Special to The Financial Chronicle)

this

time.

SAN

Both compa¬
nies

LOS ANGELES,
L. O'Bryon

rep¬

are

resentative

having

FRANCISCO, Calif.—John
the staff of
Company,
300
Montgomery Street.
F.

O'Brien has joined

First

California

industries

and

through
Its

Laboratories.

Lederle
interests

run

all

the

The

field

prod u c ts is
enormous

industries

continue

much

new

for

leader

products.
the

company,

its

products and its future, so we turn
to

the

financial

the present

picture

all-time

the year

find

investment status.

New products have
to

highs.

raised sales

Net

both
unduly*

and the capacity of

been

not

has

conditions

sales for

1949 reached $237,730,655,

favorable,

are

excellent.

ment

both

the

BEACH,

staff of Bache &

Fla.—Manton

Co., 235 Lincoln

Road.

Labor
With Gordon Graves

inven¬

(Special to The Financial Chronicle)

MIAMI,

cases

management has a very substan¬
investment

MIAMI

E. Harwood has been added to the

and manage¬

tory risks not large

Staff

(Special to The Financial Chronicle)

mand for their

Edmond P. Rochat

expanded in the last decade.

virtually unlimited and Lederle

will

developing

Joins Bache Co.

De¬

outlook.

way

Dyestuffs to Vitamins.

ease.

a very

satisfactory

Biolog-

Pharmaceutics

Insecticides

and

other

growth is¬

anywhere from 10 to

ningham stock is selling for less
than 6 times earnings. Based on
last

surrounding

factors

securities

vor

the

been

briefly

which

leader in the field of

describe

very

Biochemicals

been

American
its ability

tial

had

attractive for
conditions can change
very
rapidly.

be considered most

Perhaps its most publicized
products are Aureomycin and the
tailing industry. T>.
Sulpha drugs. Lederle Laborator¬
Despite all of the above factors, ies will be producing $1,000,000
Cunningham Drug today at its of Aureomycin monthly in its new
A new vaccine for the
price of 23 is selling for little plant.
more than half of its 1946 high of
prevention of Rabies, or hydro¬
41. In
the year ended Sept. 3, phobia,
recently announced, is
1949, Cunningham reported earn¬ expected to go far in eventually
ings of $3.71. If undistributed net wiping out this widespread dis¬
subsidiaries

security that might

the company has, in

from

included,

all

pany

large order to sug¬

It is quite a

gest any one

to manufacture calcium

growth, cost control and operating
efficiency has been the pride and
envy of the rest of the drug re¬

have

sidering

the cement industry and

(Special to The Financial Chronicle)

Biochemistry and Pharmaceutics.
That is the type of management
so
necessary to corporate growth.

its

record

$18.50, the yield is over 6%. Con¬

Co.

(Lawrence Portland Cement
and Oxford Paper Co.)

oping new products. It has spent
large sums in research and has

ship of its President, Nate S.
Shapero, Cunningham's record of

income

looking ahead.

City

York

New

period of many years—
its progressiveness in devel¬

Resins,

leader¬

has proven

icals

the

Under

best corpora¬

and preserves

the

industry.

our

tions

acknowledged to be the finest in

izing "defensive" and

1941—at

Cunningham's
doubled.

comparison,

investment

stick

Komanoff

gressive, alert
and

City

liabilities, both current and other¬ for I firmly believe that good
wise. There is just one class of
management is that quality which

fi¬

nancial condi¬

excellent management and

progressive

good

(1) It has
management.

additional

impregnable. Its work¬ pansion.

is virtually

It
an

excellent

good growth characteristics.

with

Cunningham's financial position

growth
factors.

the

give Cunningham Drug depres¬
sion-resistant
qualities together

good

again. The very nature
products it sells combine

doubled
of

Production

Earnings should approxi¬
mate $4 in 1950 and dividend will
probably exceed the $1.25 paid
in 1949.
At the present price of

investment because:

already

(American Cyanamid Company)

Exchange

;

share.

high.

the

I. ROMANOFF

have the

would

approximately 90% of
its common stock
in the
past three years
alone.
Based on first quarter earnings,
the stock could easily show over
$5 for 1950 after heavy depreci¬
ation
charges, against $3.63 in
1949. Although the present yield
is not high, I recommend the stock
for price appreciation as it is defi¬
nitely very attractive at the pres¬
ent price of $12 a share.
In fact,
I don't know of any other com¬
mon
stock of a company in an
industry with favorable outlook
selling at a price equivalent to
25% of its book, probably 15%
of its replacement value, having

principal

at the regular rate

Members, New York

while

reproduction value
probably be over $80 a

company

is $47 a

of the stock

value

lieve
The

company

book

the

double

amount of net income.

earnings in 1949 as
1948 and yet whose
price is little more than half of its

good

equivalent of $3.15 per
with 97c on the old
capitalization in the first three share in 1949.
months
of
1949;
reckoned
on
The current price of the stock is
present shares, first-quarter 1949 about 24—slightly under the 1946
net would be only only 83c.
high of 25. Based on an estimate
i In 1949, Standard made two suc¬ of $4.00 per share to be earned —and who is looking for a se¬
cessive increases in its quarterly this year, the stock sells at only curity combining first-class man¬
The regular agement, excellent balance sheet,
dividend, and paid two extras. six times earnings.
Re¬ depression-resistant qualities, and
During the first half, the stock $1.60 dividend yields 6.7%.
was on
a 25c quarterly basis;
in flecting the reasonable price-earn¬ extremely low price-earnings ratio
September the rate was raised to ings ratio and the high dividend —Cunningham Drug now selling
30c and an extra of 25c was paid; yield, we would expect the stock at 23 on the New York Stock
in December, the rate was again soon to exceed its 1946 high and Exchange would seem to offer an
on
to
a
level
which amazing investment opportunity.
increased to 40c and a 30c extra continue
\yas
paid.
Thus, currently, the would more logically discount its
stock is on a $1.60 regular annual present position and prospects.
T. REID RANKIN
compares

$16,149,513 was brought down
income, after taxes.
This
equivalent to $5.28 per share

net

so-

Kresge, Woolworth, Murphy,

by the loss of
Chrysler, its No. 2

first-quarter net income was just will be large all during 1950 and
under $2 million, a gain of 35%
perhaps into 1951;
Thus earnings
over
the first
quarter of 1949. this year for Standard Steel
?: On
a
per-share basis, earnings Spring should be $4.00 per share
equalled $1.10 on the 1,756,434 or better on the 1,756,434 shares
shares
now
outstanding.
This now outstanding — as compared

stocks

them
highest prices

"defensive"

called

—had

production

with the result that many of
have reached their

variety store field, such

The continuance of current

with

earnings, and that
time is probably nearer at hand

spite of the strike,

from

Cunningham's

percentage

earnings for the company will, of

offset

than

business

question

particular stress has been laid

1949

merely

increased to

are

possible that total 1950 disburse¬
ments could equal $2.00 or more
per

before

However, if earnings con¬
the current rate, it is

tinue

At the

1950 Record

I Like Best

was

Perhaps

Obviously, with the
dividends being
enlarged in relation to earnings,

The Security
and

and

trend of corporate

page

(2079)

common

Fla.—LeRoy

affiliated

now

Graves

with

D. Crane
Gordon

Co., Shoreland Arcade

Building.

stock, a fact which should never
be overlooked as it

inclines man¬

agement to be more conscious of

The first stock is the Lawrence

company
owns a

and

was

organized in 1898,

QUINCY, 111.—Fred W. Sueltman and Henry D. Sullivan have
become connected with Waddell &
Reed, Inc., of Kansas City, Mo.

plant in Northampton, Pa.,

one

in Thomaston,

aggregate

3,000,000

capacity

barrels.

preferred,

Harris, Hall Adds

Me., with

about

Capitalization

consists of 225,000 common
no

(Special to The Financial Chronicle)

interests of stockholders.

Portland Cement Co. common. The

With Waddell & Reed

stock,

funded debt. The

(Special

to The

CHICAGO,

Financial Chronicle)

111.— William

Feeley is with Harris, Hall & Com¬
pany,

111 West Monroe Street.

(2080)

The Commercial and Financial Chronicle

Continued

from

page

ever,

Public

Utility Securities

Earnings Outlook for
The Building Shares

By OWEN ELY

Brooklyn Union Gas
Brooklyn Union Gas has advanced in the past

year

being estimated

year

1947
1948

prewar

ended

Mar.

31, 1950__._«

mixed

manufactured

and

purchase

of 60 million

increased

to be adjusted

principally
more

NATIONAL

bonds

in the

growth

difficult

$115 .million

reserve

would amount to $83 million.
an

find

places for
plant locations. You will note that
while

the

new

companies in the gyp¬

business

sum

have

expanded

locations.

tional

Earnings for Na¬

Gypsum

reported at

were

92c in the fist quarter against 67c
y, in the
same

period a year ago. I
have raised my estimate of earn¬

ings

the

end

1949,

and

this company to around
share, based largely upon
the recent trends for the industry
and upon the favorable showing
on

$3.50
;

after

of nearly $32 million net plant

Adding to this the $7 million to be
estimated increase in the reserve of

for this company. There

that

there

possibility

that

estimated rate base $92 million.

and

would leave

shares of

balance of $3,520,000 or about $4.72 on the 725,000
stock. If the preferred stock were converted

common

into common, earnings would be reduced to
$4.17. However, should
the Commission consider 5y2% as a fair
return, share earnings
would be reduced to about $4.10 with the
present set-up, and $3.69
after conversion.
What would the dividend
pay-out be

under these conditions?

The

company's past policy has been somewhat
erratic, and the
present pay-out is of course on the conservative
side, possibly
because of the rate situation.
If the earnings
figures indicated
above work out, a "future normal" rate of
$2.50 to $3 might seem
indicated, depending on the factors mentioned.
Assuming a pos¬
sible yield basis of 6%, the
corresponding prices for the common
would

be in

the approximate
range of

about 45-55.

J. M.

merly

yield,

Technical Fund Dist.
SAN

SOUTH BEND, Ind.—Homer H.

has

5V2%

joined
Wolff

the

staff

Building.
He
Slayton &

nical

some

was

for¬

Inc.

Distributors

with

Street.

offices

has

cently

but

have

expect

fairly

try

soon

again.
S.

Obviously,

GYPSUM

50%

business

with

1950

what

well

would

have

other

Partners

155
are

SanDon¬

It looks to
is going to

em¬

if Certain-teed

show

improvement
the last year and
an

in earnings over

will

probably earn somewhere be¬
$3 and $3.50 per share.

Colvin, Ernest D. Mendenhall, Jr., and Richard O. Tufts.

this

raise

second

The

estimate

after

quarter earnings

the

out.

are

capital structure
so that it now
has only the common stock and it
looks as if dividends will again
company's

has been

simplified

increased

had

bad

perhaps

$1.50,

Here

more.

even

has

that

stock

historically
because of its previous financial
a

name

but it has now cleared all

setup

of this

and has become more

the gyp¬
It ought, therefore, to

importantly engaged in
field.

sum

continue

show

improvement

though margins in the roof¬

even

ing

continue

business

down

hold

profits on that end.

said

RUBEROID

The
of

Ruberoid

the

better

Company is
in

one

the

to
consis¬
tently and have been paying out
a fairly good share in
dividends.
Earnings for the first
quarter
were $1.68 against $1.06 last year,
be

able

which

make

year as a

the

fairly

seem

money

that

means

ought

They

company

well

the

for

whole even though

re¬

vious

figure

they

will

dends

and

pre¬

believe

that

much in divi¬
they did last year when
pay

they paid $3.25 plus 1/10 share of
stock.

This is a well-run company in a

competitive field.
Person¬
ally, I would rather not have a
very

company

the

present

locations.

probably other

reasons

Ranson-Davidson Moves

Bateman, Eichler

(8pecial to The Financial Chronicle)

Branch
McALLEN,

McAllen, Tex.

Tex.

ANGELES,

—

The

Edin-

Calif.—David burg, Tex., branch of The RansonL. Hunt is with
Bateman, Eichler Davidson
Co.,
Inc.,
has
been
Sc Co., 453 South
Spring Street, moved to 300 South Main Street,
members of the Los Angeles Stock McAllen.
W.
Vernon
Riley is

Exchange.

resident manager.

seems

pretty

ought
well

wih

beginning to

come

PARAFFINE
This

and

prewar

COMPANIES

company

here

back in.

not

the

company

but

about the

think

same

$9 in 1949.
U.

felt

ucts

around

$16

ferent

above

way

possibly

year,

they paid the

(Incidentally about %
Gypsum

National's.

include

lime

sales
and

are

60%

but

material

raw

roofing

demand

and

for

into floor
these

two

This flexibility in the

products.
use

I doubt

makes it into

the

they ought to

products

gypsum

con¬

wants to get the

much

over

RADIATOR

the

year ago

most

company

% from what they had been

the

preceding year. This was
particularly true in such heating
product

lines

boilers.

The

radiators

for

reason

and

this

de¬

cline in sales

a year ago was that
their distributors were liquidating

inventories

and

just

were

orders.

any

not
the

When

building picture began to pick up
they couldn't get plants

operation

have been

since

out

these

fast enough.
They
selling all they can put
that

lines

time

most

and,

fortunately, in
of the plumbing lines they

some

had not

curtailed

production but

had built up their own inventories
so
that
they could later make
shipments out of this inventory

the

large volume of incoming
With residential building

orders.

showing increases of 50% to 60%
the

over

basis

tend

preceding

since

contracts

these

year

contracts

and

awarded
Radiator's

much

the

awarded,

American

lead

business

nine

months, it is now quite clear that
will

have

1950.

for

For

good
time I

very

some

have thought that

earnings would
be as much as $1 a share for the
first half.
Actually, the company
reported 46c a share in the first
quarter and I think that the $1
estimate for the first half is
low.

half

reason

mate

in the

the last half than

first

now

Normally this company sells

the

this

For

year.

think that the esti¬

now

earnings ought to be at
perhaps it will be
higher than that amount.
This company has a diversity
of
business
in
plumbing
and
least $2.25 and

heating

lines,

the V sales

products manufactured by others,

and in
the production of the Detroit Lu¬
bricator
Company.
'This latter
company
produces products for
the
automobile
industry.
The
most important part of their busi¬
air

conditioning lines

ness, of course, is the plumbing
line and it is interesting to note

raw

materials for the dif¬

end

products has

been of

great importance to the company.
It has two difficulties and fits the

category
have

point 4, that I
beginning of

under

listed

this talk.

the

The stock has been de¬

pressed because the company cut
the dividend and the

the dividend
ed

was

conserve

it cut

reason

because it need¬

build

its funds to

another plant out on the Coast. It
needs

another

location

the

Coast

because of the labor

Other

prod¬

tion out there.

and

paint,

had

situa¬

This company too.

long strike last

year.

practically all of the plumb¬

pointed out to

well

too

East

well known out on the Coast.
a
small
operation which

through

that much this

pay

the year as a whole.

dividends

total

market

ing fixtures are used in new con¬
struction.
Thus,
Radiator will
benefit particularly from the resi¬
dential housing boom. It has been

trends
rate

the

that

above

coverings in accordance with the

share,

considerably

the competitive price situation

$3.24 last year and it

the

60c

Some of their lines were down al¬

year

companies

business.

roofing

National

The

this

Radiator

uses

in the fall

very

for

It
the

experiencing declining sales.

placing

are

well.

than

AMERICAN

tween

and

year

for

One of the interesting stocks I
think is American Radiator. Along
was

There

better

this time

tions

tinued

summer.

dividend

will only

year

against roof¬
ing materials because the margin
of profits on roofing materials is
a
very competitive thing and is
being reduced, whereas profits on
gypsum products are increasing.
products

gypsum

known

has

gypsum

the

materials. I

roofing

Gypsum. It has wider proft mar¬
gins than National, I think pri¬
marily because it has better loca¬

that

because

year

the

time because margins of profit are

about the gysum companies as a
whole will apply to this company,
as

al¬

difficult

strike losses late last

phasize the relative importance of

roofing
U.

and Maxson Securities Co.

LOS

would

another

been

ald L.

Co.,

FRANCISCO, CaL—Tech¬

Fund

formed

Co.,

Securities

with

With

its

products

company showed
$4.08 in the first quarter against

(Special to The Financial Chronicle)

Ordung

42-50; with

even

relatively low price/earn¬
ings ratio. It has had a move re¬

Joins Herbert Wolff Co.

Herbert

50%

dividends will be

would amount to

A 6% return on the latter
figure
$5,520,000. Deducting estimated pro forma fixed
charges and preferred dividend requirements of about $2 million

ought to talk about

ought to- sults are lower in the latter half
be an increase in dividends for
of the year.
I have a tentative
this company to $1.50 a share this
estimate of $8.50 a share which
year and actually it seems to me
has been increased from

larger than
this.
At any rate, the stock on
this basis is selling at a high yield

$2 million, would raise net plant account to $88 million, to which
could be added say $4 million for
working capital, making the

ex¬

year,

have

fiscal

current

looks

nevertheless, most of the ex¬
pansion has been at their previ¬

ous

would

calendar

will

current

teed while I

locations since the end of the

new

hardboard,
insula¬
wool.)

CERTAIN-TEED

war,

Brooklyn Union Gas be allowed to earn on its
various adjustments in rates and
opera¬

expended this year, less

These plants have all had

they have been running at
capacity ever since last fall. Mar¬
gins of profit are fairly good in
the gypsum business because it is

after the

approximated

gypsum

...

resulting from the introduction of natural gas? Assuming
that 6% on the rate base is allowed
by the Public Service Commis¬
sion this might work out as follows: the
plant account (original
cost)

use

lot

that

The new preferred stock is selling around 49
to yield 4.05%.
Overall coverage of pro forma fixed
charges and preferred divi¬
dend requirements was about 2.5 for the 12 months ended March
31.
The conversion privilege is not, of
course,

deducting the depreciation

gypsum

been

to be expanded from prewar lev¬
els and it is my understanding

bank loans.

tions

has

and

board both for lath and the wall-

together with the pending sale of $8 million first mortgage bonds,
will net some $16-$17 million and will retire the
$14.6 million

stock

other

There

share-for-share basis through June 30, 1960, subject to a re¬
demption, or adjustment under certain conditions. The proceeds,

How much will

well

board.

currently of value in
view of the 6-point spread in prices—but the
long-term option on
the common stock may account for a point or so of the
present
price for the preferred.
:•

wallboard

gypsum

products.

convertible preferred stock are
refunding purposes, though some $2 million or
to apply on the construction program. The

•

dustry

and

lath,

tion board and mineral

lath

though

They have already earned 65c
against 50c so I probably will have

GYPSUM

One of the very favorable, wellsituated parts of the building in¬

common

whole, reflected substan¬

around 67.

company recently offered to stockholders the privilege of sub¬
scribing (on a l-for-4 basis at $48) to 186,341 shares of new 4%
($2) cumulative convertible preferred stock with par value of $40
(rights expire May 22). The stock will be convertible into common
on

dollar

ures.
I think this stock is fairly
attractive, at its present price of

obtains the benefits

company

of natural gas.

for

the

Thus, the growth is really greater
than is shown by the dollar fig¬

remain

may

f. of natural gas daily (which may be
It seems probable that rates may have

its contract

under

During the five years ended 1949 the company spent nearly
$26 million for its expansion program, together with normal prop¬
erty additions. Major projects were largely completed at the end
of 1949, though the company plans to
spend $7.7 million in 1950,
including work on the mains and facilities in connection with the
of

metal

tially greater increases in prices.

gas

million).
downward, after the

sale

in¬

about six-fold

business

ness as a

tinuing the present rates (due to expire March 31) and the com¬
mission permitted this schedule to remain effective for an indefi¬
nite period.

Current

only

prices, where¬
figures for other
wallboard producers and for busi¬

of natural gas with resulting lower operating costs. The present
"interim" rates have been increased and extended from time to
time. On Feb. 28 the company again filed a rate schedule con¬

introduction

for the

natural

current

the next several months.

small increases in
as

the

35% last year and expects to have

seven-fold

activity have gone
up four- or five-fold. Moreover,
its dollar figures reflect only the

also benefited last year by the decline in oil
prices and the tendency of other material prices except coal to
stabilize.
Dividends were resumed in 1949 after a lapse of over
one and a half years, with total payments of $1.30 in that
year.
Commencing in late 1950, the company will begin the sale of

pect this company to earn $2.25 in

it raised this percentage to around

about

their business and indexes of gen¬

company

Coast.

the

one

companies

over

com¬

as you can

board companies have had

eral

out

Products,

container

usually sells at a relatively higher
price/earnings ratio than some of
the others, I would expect it to

that this

too,

say

growth stock

increased

6,026,000
8,919,000

Board

better

gypsum companies.
One reason
is that, while this' company had
only about 20% of its sales in
gypsum products in prewar years,

pay
out more in divi¬
in the next fiscal year.
I

by the fact that its sales have

see

Fiber

!the

share against $1.20 last year, but
because this stock is down and

pany

well-managed concern, how¬
and it has a large interest

levels, whereas other wall-

dends

$766,000

year

12 months

The

gin

Thursday, May 13, 1950

Certaintalking about the

ought to

crease

Calendar

com¬

basis this year and it ought to be¬

follows:

Calendar

of the other

some

panies in the building group. Also,
I think the company will prob¬
ably go back to a $3 dividend

making the yield 4.6%.
Earnings for the three months ended
March 31, 1950 were $1.62 compared with $1.55 last year. This is
of course a good quarter seasonally, but indications are that in 1950
the company may improve the $4.32 reported for the calendar
year 1949.
Earnings have fluctuated widely in the postwar period, de¬
clining from $2.79 in 1945 to a deficit of 29^ in 1947. In 1948 share
earnings recovered to $1.21 and have since improved sharply. The
heavy increase in postwar fuel costs, wages, etc., were eventually
overcome
by substantial rate increases granted by the Public
Service Commission, the amounts of increased revenues therefrom

time showing as much as $1 in the

bilities for

from 13%

The current dividend rate is $2,

to the current level around 43

This

ness

with

follows

months'

that their busi¬
about

floor
space for residential and non-resi¬
dential building.
With earnings
of $2.25 or probably more, divi¬
dends
certainly ought to be as
high as $1.50.
This stock seems
to move in a two-point range at
a

time

the

lag

and

trends

seems

that

probably ready for another
move. At any rate, I would expect
it to do relatively well this year,
and it probably will continue to
do well as long as the residential
is

building situation stays
as

the

now.

companies

groups

such

panies

about

strong

classify

usually
into

different

the roofing

which

com¬

have

al¬

ready talked and the gypsum and
wallboard companies which I have
also

covered.

heating

and

Radiator

plumbing

the

supply

Volume 171

Number 4908

The Commercial and Financial Chronicle

...

(2081)

group

but is largely concentrated

time it was proper to consider the

this stock is

in the

plumbing lines.

outlook for this company about in
line with the trend
of business

believe

extreme

MINNEAPOLIS

HONEYWELL

Another company in

this group
is Minneapolis-Honeywell but it
is
largely concentrated in the
heating line and, of course, par¬
ticularly in heating controls. This
is a growth company largely be-^
of

cause

This

electronics
controls

the

their

and

controls
the

particular factor.
application of

one

factor

industrial

their

well.

home-heating

During the

company

large
share
of
pilots, which is

war

manufactured
a
the
automatic
an electronically

controlled device.

They learned a
lot
about
the
subject
through
their research work and they have
applied this knowledge to their
particular line of products. They
that already half of their in¬

say

whole because,

its

products,
tended

sales

with

condi¬

tions

the electronic principle. They

can

get

a wider range of control,
precise control, and sim¬

plification of the types of controls
manufactured. In the home

to be

heating fields
8,000 different
With

the

controls,
duce

full

them

ing

have

contributed

the

they

over

American taxes

pay

them, but this

all

after

net

taxes

the

mining
profits.
The
mining operation is important be¬
Canadian

cause

be relatively

appears

stable

sales,

particularly

products.

than

its

domestic

industrial

second

important

six

these? to

types.

basic

major

electronics

field,

this

has allowed them to develop one
control for

Right
much

wider range of uses.

their

now

better than

business

for
two very simple reasons. One is
that the winter has been fairly
open and there have been more
installations
and
remodelling,
jobs.
Another factor is the open¬
ing up of new territories for the
use of natural gas which requires
new
controls
for
remodelling
heating plants.
For this reason
a

ago

year

they have good business for a sea¬
son of the year which
is usually

for them. The increase in
home heating controls has more
poor

than offset declines in the Brown

business

instrument

reflected

have

the

sales

where

off in

falling

expenditures for new plant and
equipment.
Nevertheless,
they
may have just about turned the
corner

the

business

Instrument

Brown

should

and

continue

have good business

in home heat¬
Meanwhile,
an¬
other important segment of the
business,
namely
aeronautical
work, that they do for the govern¬
ment, largely in automatic pilots,
is contributing a substantial
amount to profits.
This business
does not have any wider profit
margins than their other business
but is getting to be a fairly good
controls.

ing

volume.

The

its

recently

in the market.
will probably earn
share on the new

move

company

around

stock and apparently will pay at
the

$1.60

with

rate

possibly an
if earn¬

extra toward the year-end

good as expected. The
stock has always sold on a fairly
ings

are as

high price/earnings ratio so that it

probably will
market

basis

earnings

along with the

though

even

price/
somewhat

higher than other building stocks.
Probably the growth factor here
is

important

its

price/earn-

ings ratio.

learned

lot

the

Johns*

about

learned

early

lot

This company is
trial

raw

partly

ducer.

30's.

partly

have
then.

since

indus¬

building materials pro¬
I would say that it is

than

this if their asbes¬

pipe is in¬
cluded
in
building
materials
where I would put it, although
they classify it in the industrial
products line.
There are three or
four important things about this

tos

levels.

cement

"Transite."

name

This

important

considered

The

iron

when

in the

that

est postwar year

larg¬
of production of

pipe,
with
the total sales
greater than they were
pressure

which it competes,
no

were

1941

1937.

other

words,
it is quite obvious that Transite
pipe has made inroads into the
pressure pipe fields. The sales of
Transite pipe probably account
for no more than Ve of total sales,
or

but

pressure

prospecting in other areas in Can¬
they found this new as¬
bestos mine.
As they developed

ada and

it they found

that it was a longer
staple fiber which could be used
in their "Transite Pipe" manufac¬
ture. Hence the new mine, while
it

only a fraction of the size
at Asbestos, Canada,

of the mine

will be relatively more important

because
it
supplies
longer staple fiber.
This means that they will have
their own market for the output of
the new mine in "Transite Pipe"
this

some

which

production
item.

growing

•

Another

factor

that

impor¬
(and
I continue to emphasize this seg¬
in their mining profits

tant

the

ment

asphalt

asbestos

used

to be.

For

long

based

estimates

the

upon

earnings

Portland

Analysts.

will

first

have

both Gen¬

and Lone Star.

I had indicated before, one of the
drawbacks is the threat of

imports
along the Eastern Seaboard. This
threat will certainly affect com¬
panies with plants in the East
such as Alpha and Penn-Dixie. As
a matter of fact, both of these com¬
panies showed sharply lower first
quarter earnings than in the same
quarter of last year and these 1950
estimates
may
have to be re¬
duced.
This probably is having
an
effect upon the industry as a
whole but I doubt if it should be¬

others

the

cause

favored

location.

While

high freight rates prevent ship¬
ments from mills very far inland
to the Coast for competition with
cement from abroad, these same
rates
also prevent the foreign
competition from going very far
inland.
Thus, I think one is justi¬
fied in expecting higher earnings
in 1950 for General, Lehigh and
Star.

Lone

of this

50%

importantly

is the

very

grades of asbestos which are
which

used in asbestos tile, grades

before

the

the additional profits.
addition

these

tional

Flexboard"

Lead.

interest
largely because it was one of the
first producers of what has be¬
come a very fast growing pigment,
I mean of course, titanium di¬
oxide. Actually this is the largest
single division of sales for the
company and it accounts for an
even
larger proportion of earn¬
ings.
Titanium dioxide or TI02,
as a chemical
symbol, is a very
gets its

stable compound.

It is extremely

and it has good wearing
qualities.
Thus, it is one of the
best of the pigments and has al¬
most shoved white lead out of the
opaque

market.

good

opaqueing

agent for paper, particularly those

and

"Trans¬
of

some

the

other products on

which need to be printed

grades
on

tires.

industry
for
white-walled
Actually, this product plus

the baroid muds for oil well drill¬

ing and the bearing metals for
railway equipment have increased
in volume enough to offset de¬
clines for other products of the
company.
These three products
account

for

than

59%

sales and a -considerably
proportion of profits.
Even

has

factors, is

the growth and the use of
it

tions in the building group is Na¬

these

ket
up

away

Now the company can mar¬
lower grades and pick

war.

greater

better

performance

based

I think it will have

than

market

has

then

this

strength of nickel
lightness of aluminum.

capacity
weak

about

stock

that

term

I may

but

tioned

some

too

much

make

much

than $1.60 regular di¬
year

against

the

have given too much de¬

production

able

this

other words, I think this stock has
the first characteristic that I men¬

above, although not

tail

of the others.

the

$2.25 paid last year.

potentialities.

vidend

ought
to keep very well in mind for its

longer

There

price structure is
nobody in the industry

and

much

in its market price at the
present
time.
Nevertheless, I still think

that

Its

Earnings for the company
were sharply lower last
year and.
it seems likely that
they will not
show
much
improvement
this
year.
I doubt if they will pay

little bit too much romance

net

money.

little too

simple, but also

very

for

outside.

The

seems

the

about

capital

serious.

very

long be¬
personally, I think that it

cause

has

are

valves.

metal

and

ha ver talked

probably

National Lead
has

troubles

great future because it has

the

few

a tough problem
be solved soon. If

solved

many

some

hope that

these

companies
have found

you

of these stocks which

are

interest to you.

Continued from page 5

merit management, and the like—which are
in

the

long

public

sales

behavior

Such

literature

the

continually broached'

raison

d'etre

public

indicates that
to go in its educational efforts.

way

Money-Back

Threat

The attractiveness of

the

funds.

business

has

;

Popularizes the Racing Chart

the money-back

guarantee was recog¬
nized by the U. S. Treasury Department in devising its War Bond
Drives.
Despite the intense patriotic motive involved in wartime,
the cash-in feature was deemed a
necessary sales inducement

(albeit with
The

fund

penalty element).

trouble

with

this

ready-redemption

feature

mutual

selling is that it stimulates the speculative elements in that
being the main instrument making the open-end less

field,

investment-slanted than the closed-end trusts.

It does

this

number of ways.
In addition to
to market-timing operations

pandering to fund-switching and
by holders, it causes them to pay

undue

attention

the

month-to-month

record

competitive

"achievement" in terms of asset-value score-keeping—like switch¬
ing bets during a horse race.
| This has a directly harmful practical effect on manage¬
ment policies,
in penalizing judgment which might otherwise
deem

advisable

maintain

considerable

proportions

of cash

holdings uninvested during certain stages of a bull market. ■ Al¬
though such a cash-holding policy might be sound in conforming ;
to the basic investment principle of
diversification, it would tend
to make the management lose out to more

fully invested portfolios

in "the race"

during bull markets.
f
\
'
v During
major bear periods, consciousness of the threat of
enlarged redemption likewise interferes with managements' invest- •
ment judgment in stimulating them to maintain
larger cash re-:;
.

serves for such
emergency, than they ordinarily would. Of course,
the un-redeemable closed-end funds are affected
by similar inter¬

ferences with objective judgment,
degree.
,

but not to nearly so' great
;

a
„

Remedies
Two

of remedy come to mind at this
point.
First,
privilege of unhindered cash-ins might be examined
questioned. In the case of U. S. Savings Bonds, there is a
sliding-scale penalty feature, correlated with the length of reten¬
tion.
Since the mutual fund business probably cannot remove the
redemption feature at this stage of its activities, some sliding-scale
penalty techniques might be applied to all open-end funds, as they
now are to Fund Savings Plans.
Perhaps in the case of existing
funds, this effect could be achieved in reverse through a method
the

courses

entire

and

•

of bonus for continued

growth,

Historically,

the price

company.

come

being

which

the

sales

literature

broaches.

The

exhorted

of life insurance

planning; but once they have made their invest¬
ment, the subscribers quickly get into the frame of mind of the
ordinary speculator merely trying to "beat the market."
If this

new army of market participants can be educated to
constructive attitudes, the entire investment community
will receive a very great fillip, and the fund business will at the

embrace

time

same

titanium dioxide
phenomenal
this were the only

The

romance

serving its

own

vital self-interest.

With E. E. Mathews

oxide

stable. Hence
higher temperatures the metal
back

Kaczyk
have

become connected

ward

Mathews

Co.,

Street.

Corn

titanium

dioxide*

with Ed¬

curities
the

State
•

Corn

Company

Exchange
has

from

offices

National

Bank

M. J. Sabbath

Opens

(Special to The Financial Chronicle)

Bank^ Trust

appointed

WASHINGTON, D. C. — M. J.
Thomas gabbath is engaging in a securities

G. Anderson and Robert A. Geib
as

business

Exchange

Building.

Exchange Appoints

very

to The Financial Chronicle)

COLORADO SPRINGS, Colo.—
Mass. — Vincent J.
and William H. Seaver John Gardner is engaging in a se¬

BOSTON,

whereas ti¬

the

John Gardner Opens
(Special

(Special to The Financial Chronicle)

from the fact that it

dioxide

metal

turns

investment

such

unstable metal

tanium

this

with elaborate literature to place
its savings in the trusts to gain expert investment
management
through pooled resources, and the security of income on the level

product involved I would not con¬
sider National Lead as a growth

metal

serious

public

though

shown

this
situation, however, is in titanium
metal.
It has not yet been pro¬
the factors on this company, in¬ duced at low cost. Moreover, it
cluding its moderate growth trend may not be so produced before an¬
and its changes in characteristics. other two years or so.
The diffi¬
in
I have liked it reasonably well culties
producing
titanium

which the com¬
pany
has done considerable re¬
search.
I have given you most of

and

ever

addition

working

eco¬

because

thrown

it may not

ber

composition by weight is asbestos.

were

years,'but it is

within

process

General will

think

terms

fairly well

are

protected with their properties in
a

answer

growth and is very

tile.

tile

are

holding.
Second, the education of the funds' investing public must be
radically improved, to make it actually practice the principles

the use
This may sound
very strange, but the fact of the
matter is that asphalt tile is really
of

is the

chemists

growth in

has most of the

stable)

The

both sides, and are not coated
and it finds large use in the rub¬

because

business

$2.50.

Security

upon
mean

that

quarter
eral

Canada,

what

really

cooled.

working
the

expressed

the Asbestos mine in year and they ought to be very
but the proportions of good again this year and in fact,
foreign fibers was still by far the it may be sometime yet before
greater amount.
When they had their earnings start to taper off,
a strike last year they were prac¬
NATIONAL LEAD COMPANY
tically forced to discover a new
asbestos source.
They had been
One of the interesting situa¬
duced

change in its characteristics from
?

which

can

this opinion in my talk before the

Canadian

the

the expected earnings of $5
or
more and
a
possible increase
in the dividend over last year's

company

Federation

stocks.

mining earn about $6, Lehigh $7-7.50 (al¬
profits they account for a consid¬ though I don't have a first quar¬
erably greater proportion of total ter earnings report on Lehigh)
profits.
and Lone Star should earn $11 or
Moreover, sales of transit pipe perhaps more. General showed a
tend to boost the profits on min¬ considerable improvement in earn¬
ing.
The way that works is this: ings over last year and Lone Star
Before the war the company had showed $1.97 against $1.67 in 1949.
to buy longer fiber (which it did These companies might pay more in
not produce) for use in the pro¬ dividends but it seems
a
little
duction of asbestos cement pipe. doubtful as yet since they keep
In the postwar period they had be¬ spending large amounts for new
gun to find ways to use more and plants.
Earnings for the cement
more of the short staple fiber pro¬
companies were very good last

materials producer and

probably closer to 60-40 on the
building material side and may
be

pres¬

for the production of
pipe is double prewar

Transite

low

Manville when I used to work up
there

capacity

JOHNS-MANVILLE

cement

profitwise

The split of this stock

helped

the trade

cast

re¬

can

asbestoe

pipe which it markets under

sure

electronic

use

it is

probably

they

fairly optimistic

this problem and pre¬
sumably they will come up with

cement

raise

profits

be interested in the Crane
Company. Here is a company that
sells at the equivalent of its net
working capital in the U. S. In

may

will turn back to oxide before it

mining

are
about
of controls.

there
types

1 have been

the

CRANE COMPANY

I do not know how
many of you

manufacture, which makes the
expensive, the titanium

and

to 42% of the total. In bring¬

its

process

STOCKS

find

exercised

care

nomical

sales

use

^very rapid rate and unless

The fact of the matter is that they
haven't done too well although I

the

Company

generally. There has, how¬
ever, been a change and I think
it is significant. One of the most
important things is the relative
importance of earnings from the
mining operation. In recent years

factor is the substantial growth in

Instrument

that

CEMENT

earnings

and

fluctuate

dustrial controls manufactured by
Brown

relatively high but I
is accounted for by
changes in its characteristics.

with a large
in industrial

output

its

the

assistant secretaries.

business
*

from

Street, N/W.

offices

1627

(2082)

The Commercial and Financial Chronicle

that

Tomorrow's

Whyte

changes
point

lawns.

The

column

fact

was

I'm

that

failure, having

^seem to
fractions, while
the upside were a

professor—those
who have

four

mutual

each

long

funny

all four

are

they stick to each

faults—must

about

due

its

possibilities.

many

are

or
we

passing that the street
pat opinions. One group
saw
nothing but chaos ahead;

full of

For the

sticking

still

ahead.

The

catching
items!

of you

present

demand

But, is it? How many

have all you want of goods

services?

state¬

production

with

the

that

How

few

you

good values

con¬

avail¬

are

derstanding and guidance, rather able? Demand is
practically in¬
hysteria, are necessary to satiable,
given purchasing power
its
continued

hurtling
of

speed

they formed
vention

the

over

miles

pes¬

earth

that

society for the

hour

pre¬

railroads.

development

and

and the desire to

it.

use

Even the

deepest-dyed pessimist can't deny
In 1944 we heard loud wails that
purchasing power is vast to¬
about unemployment
reaching 10 day.
v
'
tc» 12 million during our postwar
Unemployment during the past
reconversion period. Government, several months has been
grossly
industry, labor and universities overplayed and misinterpreted
by

each contributed to the

negligible and
lot I would be

sorry,

poverty stricken
addressing here today if the

observed

Much of its growth pe¬

hear

days

oil overlook the obvious strengths.

in fair and so is Mullins.
time being I suggest
was
to the above.

often

these

growth.

us, and are depriving us, of the
full realization of our economic

What
*

riod

qualms of doubt and the repres¬
sions of fear which have deprived

the

wails, and

the sensationalism of such

an
If the signs are to be be¬
authority. In fact if I could
simists had been right in their
lay end-to-end the subjects lieved the conclusions are that gloomy predictions over a century
I'm
an
authority on, they the above named stocks are and a half! What a sorry lot you
will be in I960 if our contem¬
would look rather silly.
buys at or around present
*
*
porary crop of b i 11 i o u s fear*
prices.
I therefore suggest mongers could make their
night¬
All of which brings me back
buying Certain-teed at 18 or mares come true!
to the stock market, on which better,
In the early 1800s a member of
stop at 15; Flintkote 33
I am definitely not an author¬ or better,
stop at 29; Timken the British Parliament argued
ity.
But having lost (and Detroit Axle 17 or better, stop that men could not stand being
hurled through space at the ter¬
made) some money in buying at 14.
rific speed of 12 miles an hour on
sjs
if.
and selling them for the
a railroad train.
past,
Some people in
oh—a lot of years, I can write
Masonite is already up and the United States, about the same
like I know all the answers.
by the time you read this will time, felt so sure that the human
frame could not stand the strain
*
*
*
probably be higher. Crane is of

week

the

than

busy looking for hidden
Timken Detroit Axle. The lat¬ imaginary weaknesses that
in

denied

was

readjustment is merely a "grow¬ aren't
ready to buy more—if
ing pain" common to youth. Un¬ vinced that

equally the sins of omission, the

The group which I
shows this most clearly

far ter comes
failed to grow anything but burner.
*
weeds, hasn't made me less of

Last

ment

many

puberty.

men

contempt for

other, and who

right

better.

merchandise

the downside

think
is the
given over to horticultural one that includes the building
pursuits, more specifically to stocks like Masonite, Crane,
the planting and raising of
Flintkote, Certain-teed and
dismal

The Business Outlook

other's

week's

page

How

fry-

By WALTER WHYTE=

Last

jrom first

Thursday, May 18, 1950

consumer.

be limited to

Says—
ee

Continued

Whatever changes
ynere
were on

Walter

was

making.
v".

■-'v.

Markets

accumulation

new

in the

threat

and

press

ing.

business

unemployment

think¬
3

drowned out the calmer voices of
those whose faith was based on

3V2

facts rather than fears.

minimum necessary to cover rea¬
sonable shifts and normal turn¬

mum

unemployment

conversion

Faith
than

based

blind

pessimism

optimism, has

joint

intelligence
The

and

anvil

Business

there

every

any

good, and
reason for it
to

continue so over the long term.
Instead of the hopeless outlook of

about

the

selectivity

even

grave

and there

concern,

likelihood
reached.

that

Because

cause

peak

for

is little

being

increase

labor force, we have been

our

in the peculiar position

wears

unusually

lion would not

of having
employed and more un¬
employed in a given period as

both

measured

standard

size

force

aptitudes. A tempo¬
rary readjustment peak of 5 mil¬

combined

of faith

present

labor

our

in skills and

govern¬

hammers.

many

for

rewards

modicum of their

use even a

efforts.
out

labor

store

with

and to permit any

over

equally

future

management,
ment

re¬

facts, rather

upon

wonderful

during

2.7 million.

was

its

The maxi¬

million

compared

the

period

same

Only the unemployment

year ago.

has been played up usually in the
press.

Still Great Backlogs in Unfilled

of austerity or actual pov¬
erty ahead for most of the earth's
years

Orders

Yet, I re¬ population, we are faced with the
Is it reasonable that we go on
cently asked an engineer from one enviable
[The views expressed in this
problem of learning to indefinitely, and with no breath¬
of our great airplane manufac¬
live 25% better by 1960.
another saw the
ing spells, beating the highest
prevailing article do not necessarily at any turers what speeds they expected
The present period of
market as an opportunity to time coincide with those of the to attain. The answer was
readjust¬ production records in history—
"22,000
Chronicle. They are presented as
records envied
by the whole
miles an hour or around the world ment, or any other fancy name
get in before they started up. those
of the author only.]
you wish to give it, is not only a world? There are still great back¬
in an hour and a
quarter.
Even
Modesty not being one of my
natural but a desirable
happening logs of orders, particularly in the
the more

virtues, I jumped in with an
opinion that dullness rather
than positive moves would be

conservative of

Morgan Stanley Group
Offers Ohio Ed. Bonds

the order of the week.
*

Morgan

During the last

seven

the rail strike has

days

Stanley & Co. and
associates are offering to the pub¬
lic today (May 18) a new issue

12,000

miles

hour

think

not

too
far.-, away
once
we've
really
broken
through the supersonic
an

ceiling."

Even you and I can
remember when 40 miles an hour
fast.

was

1833, the head of the U. S.

which
ride

should

welcome

and

last

pected to shrink.

speaking to

of bankers,

a group

"The trend to further inflation
the only

barrier I can
enjoyment of a long

But while all this
it

that

was

Company

going

was

interesting to note

here

and

there

few

stocks managed to
creep
of their
long

out

trading

and

ranges

selves
was

establish

them¬

plane.

What

new

interesting about it

was

assumed by Ohio Edi¬
in connection with the recent

son

period

bution

they

was

going
rise

gave

In fact

on.

thoughts

The

have

bonds

improvement and sinking

fund.

(Special to The Financial
Chronicle)

FT.

have

erly with

and

become

associated

Co., Brow¬

Mr. Hudson

Lawrence

form¬

was

Leeby &

SPECIAL CALL OFFERINGS
Per 100 Shares Plus Tax

•

New York

Stock

Exchange
Curb Exchange
(Associate)

San Francisco Stock

Exchange

Chicago Board of Trade
14 Wall Street

OOrtlandt 7-4150

New York
5, N. Y.

Teletype NY 1-928

Private Wires to Principal
Offices

S&a Francisco—-Santa Barbara

4 $237.50
4

237.50

200.00

Corp. @ 34%
Mo-Ks-TxPf. @30%
West'n Union @
30%
Coll. & Aikm. @ 19%
El. Bd. & Sh.
@ 18%
Youngstn. Sh. @ 83%
Schenley Ind. @ 30%
Corn Prod'ts @ 65%
Hudson Mot. @
16%
Subject to prior sale

Members

Put

Dealers

Rosa

July

Aug. 21
Aug. 18

250.00

Oct. 23

325.00
112.50

July 31

237.50

July
Aug.
July
July

437.50

275.00

325.00

137.50

The

big

now.
ex¬

ones are

Federal
Not
be

finances

only

are

bloated.

further

must

bloating

resisted, but this inflated baby

needs

burping badly. On the other

hand, military arid foreign relief
expenditures
able

props

are

very

consider¬

present

high
which props we
hope can be replaced by freer in¬
ternational trade once the cold
level

war

economy,

with Russia ends.

While
a

our

thinking of government^

warning for business leaders to

some

order.

hard

thinking is also in

present

that year.

Calls

now

three-and-a-half-day

today.
the

Last

coal

fered,

Brokers

turned

and-a-half times
month

out

9-8470

nine-

over

many units in
for
that
entire

few

believed

1942

could turn out 50,000 war

planes

That number

per year.

was

thought to have good propaganda
value

scare

the

Germans

and

Japanese, but it brought cynical
knowing smiles across the nation's
breakfast
board

tables

rooms

—

many

and

well.

than

doubled :that, reaching an
annual rate of 109,404 at our
peak.
No

Far

Outgrown Economy

from

having reached ma¬
hopeless senility
it in tbe '30s, our
economy has just outgrown the
turity,

climate

are

the

awkward

self-conscious

cant grow

these

blacker—but

placency

and

dleheadedness

This is not

inter¬

"saturated market" of 1908.

Only

outlook

only

larger

and

through

com¬

unbelievable

mud-

the

part of busi¬
ness, government and the general
chore public.
i
before

strikes

attributed

Assn., Inc.

Broadway, N. Y. 4, Tel. BO

September,
steel

and

a merger of two wellknown automobile
companies, be¬

easy

business

remarkably fa¬ embarrassing to business, amusing
day. In vorable with "only a few small to government, and puzzling to
the
investment house refused clouds in the
public.
The
alacrity with
economic sky. Some

price change

THOMAS, HAAB & BOTTS

Monterey—Oakla n d—Sac ra me n to
Fresno—Santa

vehicles

to finance

that

S. Steel.. @ 32.60Aug.
Bethhn. Steel @ 37% Aug.
Studeb.

Members

000

turn out that
many

that

York

can

tory.

cause
the industry had already
Fla.— saturated its market.
We turned
Rumsey N. out 65,000 units that year—an

Co., and Leedy Wheeler & Co.,

•

New

backlogs

pessimism
them

the horizon of his¬

over

LAUDERDALE,

George E. Hudson

Securities

Schwabacher & Co.

still

were

1908,

Two With Daniel Rice

ard Hotel.

Pacific Coast Exchanges

home and abroad. People will fail
ac¬
to recognize the fact that the cause
which of the failure will be
the short¬

batteries and
automobiles

•'

with Daniel F. Rice &

Orders Executed

for

Trezise

Pacific Coast

tires,

cessories

course,

Look

hangovers of the seller's market.

to the

see

spring.

really believe in
sightedness of people, rather than competitive free enterprise,
or
Every basic invention gives the failure of the
are
we
"talking a good game"?
at 105V2%
system." Any
if redeemed prior to birth to
a great
family of inven¬ resumption of inflation would be Do we want government in busi¬
May 1, 1951, and thereafter at tions.
Our actions some¬
most unfortunate in that it would ness or not?
prices decreasing to the principal
By 1904, some leading financiers delay readjustment.
times speak so loudly they drown
amount if redeemed on or after
were warning that the automobile
out our words on this question,
May 1, 1977.
Special redemption
Favorable Outlook
and when the two come
together
prices range from 102 y4% to the industry was over-expanded and
on the record the result
facing bankruptcy! We made 23,is often
Our
principal amount.
merger of the two companies.
The new bonds are redeemable

.that in

doing this they chal¬
lenged the belief that distri¬

were

Textiles and

centers

were

that it was not delayed
longer. On March 26, 1947, I said

giving

$58,000,000 Ohio Edison Co. Patent Office decided to resign.
sound prosperity to the great ad¬
first mortgage bonds 2%% series He was
issuing what was to him vantage of all. If our business
gone.
The New York Tele¬ of 1950
due 1980 at 102 % % plus ac¬ an
astoundingly large number of leadership is not
capable of solv¬
phone company found a hole crued interest to yield 2.764
% to patents—about 600 annually—but
ing this clear-cut and definite
in its pocket, asked for and
maturity. The issue was awarded he thought that everything of im¬
problem, and solving it decisively,
got a raise and the market at competitive bidding on May 16. portance had been invented.
aggressively,
and
quickly,
the
Proceeds of the sale will be Since his
took it all in its
resignation, well over penalties will be
lethargic used for the
crushing, the
redemption and re¬ two-and-a-half
million
patents public will lose
stride, seldom stirring in any tirement of the
faith, and the pri¬
outstanding $58,- have been issued.
One of his
vate enterprise system
excited fashion.
definitely
600,000 principal amount of long- successors issued
53,473 in a year, will be in the
„ dog house
both at
term debt of Ohio Public Service and a
;
*
*
.y *
■ yyyiyy
very large number of them
and

come

durable goods field.

rationally with thanks¬ shoes

out

age

which

find

1921

business

and

agriculture

ernment

turbing to

intrude

itself

dis¬

the least, and many
of the requests made are hardly
say

commensurate with the best longin
range interests of the competitive
today. free enterprise
system.

1929

ourselves

The over-extended

which

have gone to cry on the shoulder
of
government and invited gov¬

consumer

cred¬

During the '50's the decision
its, heavy farm mortgages, clogged
will be made irretrievably as to
retail shelves, high interest rates,
whether business or government
meager
savings, low
incomes,
can
offer more to the public in
heavy unemployment, insecure the
way of real economic secur¬
labor, sudden and deep price
ity. Let's not kid ourselves. The
drops, buyers' strikes, bank fail¬
public pays for it either way. You
ures, mad speculation and panic do
not, except as a consumer. If
of these periods are entirely lack¬
you
do it, the public pays in
ing. This i$-the most talked of,
higher prices, — unless you can
most
forewarned, longest ex¬ offset
your added costs with in-1
pected, and most guardedly ap¬ creased worker
productivity and
proached readjustment in our his¬ other efficiencies. If the
govern¬
tory.
These facts in themselves ment does
it, the public pays for
constituted major blessing.
it in taxes,—but undoubtedly at
The
temporary reluctance of higher costs in money and most
both business and consumers to certainly at a much higher cost
spend
money,
which so many to initiative and our present ideas
feared last year, has disappeared. of freedom.- It is written in the,
Even that was largely due to re¬ stars and trends that the challenge
tail

inventories

reduced

through

fear to the point where free choice

of man's

be met.

economic

security must

Figure out for yourselves

olume 171

hich
hen

Number 4908

will

way

"ke

cost

the public

The Commercial and Financial Chronicle

the

whether

decide

least,
would

you

rnment

the

take

full

he public's mind, leaving you in
he proverbial dog-house to lick

self-inflicted

our

wounds.;

Any

prejudices
poor substitute for thinking

rearrangement

fs a

our

this one, for we are now a na¬

tion

employees.

Backing into
future, looking into our past,

our

will

not

this

meet

challenge.

Non-wage labor costs to indus¬
try are increasing and will prob¬
ably increase further. The hourly
or
a

weekly

rate is

wage

complete

the

longer

of total labor

measure

because

costs

growing

costs

for pensions, paid vacations, profit

sharing

which do

not

rates

wage

medical

and

benefits,—

usually show

considerable

cause

—

understatement of the total labor
cost

doing

business.

The

so-

unions has pushed for these

benefits.

wage

increases

non-

Any considerable
further strikes

at this time will

merely delay our

readjustment, raise prices, and in¬
crease

buyer

reluctance.
favorable

the

business climate,

our

that

numerous

so
a

complete list of them is impossible
within the bounds of this address.

"count

blessings one by
really a sizable job. Hav¬
ing been in more than fifty coun¬
your

one" is

tries, I have never found but two,
possibly,
in which the people,
even in what they consider pros¬

uprooted

this

fact

and

act

accordingly.
'

have had a Can¬
Norway added to your
market, — almost 19,000,000 in¬
creased population.
Our popula¬
tion has increased to 151,000,000.
Between now and 1960 you will
and

have

populations

combined

the

added

Bolivia,

Norway,

Panama, Paraguay, Costa Rica,
and Luxemburg.
When a boy is
born

today his life expectancy is

about

years.

he's born

1960, it will be 68.2 years.
born in

1850 could

expect to live
age of 38.3 years.

the ripe old

Your

A boy

customers

living more
longer than those of
your grandfather.
That extra 25
are

than 25 years

buying time is

years

addition

the

huge

a
of

richness

your

market.
War Baby

The

Bonus

mine.

the

tures

not

cuts,

credit

with

available.

that

markets

purchasing

the

function

selling,

1941

1948—will

and

add

ket in the '60's

they

and

marry

homes.

new

An obvious but generally over¬

products and services grows

lit a much faster
population itself.

buying units for most goods,

your

number

the

and

creases

1940

twice that of

land

was

The family
more

population.

than

In Eng¬

times the

About 40%
present families are the

our

sult

rate.

17 y2

avoid

million

thriving

of
re¬

marriages

You have to

since 1940.

in¬

population

is almost three

population

in¬

and

families

only 7.2%.

increase

1930

while

16.6%

increased

families

Between

number

the

creased

rate

much faster rate than

population.

rate than the
: Families : are

try hard

market

as that.
Your market will be an increas¬

growing

rapidly

people

advertising

and

job

and

again,

—

your >

our

population age 21 years and
had a high school education.

over

1960 approximately half the
population will have gone

adult

through

high

school

and

than six out of each hundred will

have

college

education.

Far

and largest

creditor

nation.

before,

nations must either increase their

imports—or give away a goodly
proportion of their exports of

ever

families

income

fear

By 1960 real incomes will goods and capital. We have done
considerably higher and more exactly that to the tune of well
evenly distributed than now.
It over $50 billion of American tax-

show

indefinitely, with that

credit

stringency

at the top

even

of the boom.

profits

have

re¬

ating

lion

for

billion

$191.2

last

compared with $190.8 bil¬
1948.
Disposable income
rate of 2% times that of

avoid
-and

lacked in 1920

State

will

governments

in¬

slightly dur¬ crease
public
works
programs,
ing the coming months.
many of which are long overdue,
After paying taxes and subtract¬ if
unemployment increases appre¬
ing from personal .incomes the ba¬ ciably.
living costs (food, clothing
and shelter) to give us a living
standard equal to that of 1940, we
have left what

call discretion¬

purchasing power.

ary

That is the

which the consumer can
either spend or save at his dis¬
money

cretion.

Discretionary purchasing

last year Was almost four
times that for 1940.

power

Expenditures for new plant and
equipment by industry have re¬
mained surprisingly high and will
be only slightly under the peak
year 1948 of $19.2 billion, in spite
of the

that

fact

companies

many

have completed or are nearingcompletion of modernization and
expansion plans. Many manufac¬
turers

would

increase

even

their

Liquid assets of individuals capital goods expenditures if they
(stored up purchasing power) are could sell their company's stock
31/2 times those of 1940 ($178 bil¬ at 10 times earnings.
Any de¬
.

lion

compared to $52.4 billion

now

in 1940) and even at today's

prices
power

represent

double that of 1940 savings.

Savings

the highest and best

are

distributed

ings

higher
purchasing

history.

our

individuals

Sav¬

amounted

billion

$11.8

for:^1949—only $0.2
billion under 1948. Large savings
buying,

delayed

but

they

firm, active, broad
relatively stable future mar¬
mean

and

Indebtedness, both consumer
and farm, is very low as compared
to either savings or disposable in¬

little

industrial

in 1950

construction

will be at least offset by

management

both

and

labor

going to find it advantageous
profit from these possibilities.

are

construction

Total

exceed

over

billion

$19

vidual savings.

of disposable

These percentages

tion

increases

expected

are

not

course

there

concerns

with 12%
in 1940.

least

that

offset

decrease.

half

1929.

Total

was

those

three

spite of

(Outstanding

farm
times

some

income

that

1940

decreases in

1948

prices

of farm products.

Changes in the
overall financial position of farm¬
ers

show

able gain.
1948

were

even

remark¬

Farmers-cash assets in
over

$22

billion

dollar
seems

debt

1940.

There

little likelihood of the with¬

drawal of government price sup¬
ports, and farm purchasing power

Manufacturers' and distributors'

inventories

low

were

ginning of the

the

be¬

Inventories
appraised in the light of

must be

year.

increased population and
dollars.

inflated

Taking these two factors

into consideration, total retail in¬
ventories

are

tually too low
consumer

many

cases

to permit

choice

and

ac¬

proper

immediate

delivery.

exceed

out of

one

Last
one

far

ing

our

concerned about increas¬
so

that

we can

repulsive

Doubt

—

twins,—
in

conceived

Group

sales

Edison

composed of

offering

Co.

The

group,

135

underwriters, is
stock at $25.50 per

the

share.

ceeded that of

1948, although due
price declines the dollar

some

Sh.

fornia

rate

physical volume of
in 1949 slightly ex¬

Proceeds

the

sale

will

used to retire

$13,000,000 of bank
volume
was
about
3%
lower, loans, which had financed part of
However, that 1949 dollar retail^ the company's construction provolume
the

was more

1939

than three times

volume.

What

sion year 1949 was!
Last

for

continuing

ex-

penditures in connection with that
;

year's

and

gram,

reces-

During

program.

1946-1949,

pessimists missed
badly on the first quarter of this
year,
and they have advanced
their "day of doom" to the last
half of the year with some of
them admitting now that the en¬
tire year may be good. Our out¬
put of goods and services during
the first quarter this year estab¬
lished a new record.
Corporate

profits

the

River is scheduled for

exceeded

those

for

the

company spent $219,637,000 on ex-

pansion

economic

Basic

conditions

wants.

There

are

1950

greater.

Management should question it¬
objectively on the
soundness of its experience, meth¬
self sternly and

viewpoints, and philosophies
as a source of future policies and
plans. In that soul-searching we
might ask ourselves the question,
"How' much of our past success
ods,

has been really due to good man¬

agement and how much has been
due to sheer growth in numbers,

with

the wind?

The cocky,

1951.

and

installed
Steam

Four

the

Station.

electric

spend
period

generating

with

1951

Redondo
A

plant

struction

now

the

The
able

Beach

hydro¬
under con¬

new

San

Joaquin
completion
rating of about

84,000 kw.

; ;;

preferred is redeem¬
any time at $26.25 per

new

redeemed

before

May 31, 1955, and thereafter at
prices declining to $25.50 per
share

redeemed

after

May 3L

19-35,

Lee

Higginson Group
Offering Household
Finance Pfd. Stock

still many new

readjustment

expects
to
in the

units of 70,000 kw. each have been

are

products, techniques and methods
to come.
A gradual process of

and

0 00 0,000

of the defeatist.

year,

imports

The

do with

Co.
(Inc.) on May 17
publicly 1,000,000 shares
of
4.08%
cumulative
preferred
stock, $25 par, of Southern Cali¬

of 300.

hell-bent-for-leather
Reports of farm paid for these exports, and can '20's; the bitter, humbling, and
products, however, can be ex¬ receive interest and dividends on humiliating '30's; and the roaring,
pected to drop, unless European present and future investments careless, production-crazy hut
will remain high.

The

offered

hun¬

year's

out

no
population and families?" In
they will re¬ other words, has management
main extremely high as compared really made the most of its oppor¬
to any prewar standards.
I am tunities, or has it merely gone

this

live.

unlimited.

are

those

and

Hall

are

Although exports will break

records

climate

must

ing group, jointly headed by The
First Boston Corp.
and Harris,

actual

than

A nationwide investment bank¬

now

holds no basis for
least
a
million
new
nonfarm fear, but for confidence and hope
instead. But, don't fall into the
Liquid assets available assure abil¬ homes will be started this year,
ity to meet such indebtedness even in spite of the morbid fears of complacent error of assuming that
if
current
incomes
should
de¬ last summer. The building needs you can capture the market of the
'50's with 1939 or 1945 model ad¬
crease.
Instalment buying is not of farm homesteads are not in¬
The job is
a danger as in 1929.
cluded in these figures and are vertising and selling.
bigger.
The needed impact is
Farm mortgages, are little more still great.
compare most favorably
and
13%, respectively,

Pfd. at $25.50

strong, favorable, and sound with
expected plenty of income, liquid assets,
this year. credit reserves, and unsatisfied

Although private construction may
personal income and 8% of indi¬ decrease slightly, public construc¬
a

instance,

Offers So. Calif. Ed.

prosper-

increased construction of public
same period a year ago. Consumer
utility plants, highways, hospitals,
buying established new records.
schools, water systems, river and
Employment came back up with a
harbor projects and pipe lines.
bound, — and will increase fur¬
Many plants
have
completed ther. Home building "starts"
expansion or modernization pro¬ made an all time high. Public
grams and are equipped to op¬ construction
literally bounced. Inerate
with
increased efficiency. vestment in
plant and equipment
Increases in productivity of equip¬ remained
high. Those are but a
ment, management and labor still few examples to bring us right up
have great opportunities to offer to
date,—and to throw in the face

Even with'consumer credit

reaching $18 billion it would only
be

crease

concerns.

retail
to

economic

all

First Boston

In the '20's the failure

about

was

The

and should rise

so-called

business

than then.

did

labor for

failures of the

and

coordina-

by Improvidence can deny these
opportunities to us.

Business failures last year were
less than half the average annual

they can do much to rate
dred
depression.
Both Federal

1929,

Ignorance, sired by Complacency,

bought for less than

ions" which

year as

dammed by Strife and wet nursed

"cush¬

lack

the

'20's,—and of

all

are

poor

Many

our

program

based

question is, "What will

Fear

far

ECA

are

them"?

the liquid assets represented. Far
more
can
be bought well under

chases

decades

three

opportunities

through getting more than the their book value. Reducing mar¬
40% of profits he has been getting gin requirements from 75%
to
of late. Some of these sharehold¬ 50% hardly made a ripple on pur¬
had

minds

unfortunate

caution

and

the

which

thoroughly

in sharp contrast

can

for

woeful

ernment

Market Deflated

rampant inflation of 1929.
stocks

the

some

These
a

Only

deflated

Corporation

mained very high, and even with
some declines in profits the share¬
holder should fare better this year

Perhaps they

Each of these will have greatly
added weight in the decisions of
the next two decades, and in cre-

standard.-

Stock

'60's.

left

tion of our productive capacities
with other phases of our economy,
—marketing, public relations, the
economics of consumption, gov-

The stock market is

problems

psychoses which

substitute

plentiful supply of funds to eli¬
gible borrowers.
There was no

the

management

facts.

ise to remain

the

even

groups.

the

'50's and
have

Creditor

great upward

and there have been
of

the

change

amounted

compared to $0.50 in cash for each

1948

widely

equitably spread than
shifts

so¬

lutions

our

f from a debtor nation to the world's

man-

agement but few Constructive

attitudes to conform to

tal disposable income (after taxes)

third of

marketing-blind '40's, afford

prices. This is a definite
rock-bottom strength completely
lacking prior to past depressions.

against $5 billion in 1940, and they
has around $2.50 in cash or its
equivalent for each dollar of debt

over.

that

Most Americans unfortu-

nately have not yet changed their

begun to wonder if man¬
Ability to Buy
agement was becoming as "con¬
The ability of consumers to buy
fiscatory" as government.
now is
Unemployment insurance, other
unquestion^'ev^n, by the
most
pessimistic. ^Personal
in¬ Social Security benefits, savings,
comes for 1949 amounted to $212
low indebtedness, stockpiling pro¬
billion—only 2% under 1948. To¬ grams, farm price supports, and

ingly well educated and discrim¬
inating one. Illiteracy is now only
2.7% of people 14 years of age
and

times

abroad.

un¬

Income

ers

come.

looked fact is that the market for

2V2

1940.

Consumers

mean

much to the richness of your mar¬

many

Remember
are

power

ket.

;

large

expendi¬

plus the
desire to buy.
Maintaining and
expanding that desire to buy is

mately 6,000,000 more babies than
would normally have been born

establish

hand,

usually follow in¬
long as savings and

are

always

other

family living

declines in

also

between

but

slightly

than

job and

baby bonus,—approxi¬

war

Farm in¬

are poor.

1950 will be

1949

they have will be more difficult to make a
payers' money between 1914 and
they would have fortune but less difficult to attain 1950. This
is an extravagant and
fought, on their own, to reach a
reasonably high standard of liv¬ inexcusable subsidy to American
them. Family living patterns, once
ing.
export industries and a terrible
established, do not change much
An
additional
$2.8 billion of price to pay to that wanton poof their own accord, in spite of
purchasing power has been re¬ litical and economic harlot paradincreased
or
reduced
incomes.
leased this year in the form of ing under the
misleading name of
Even with increased incomes the
premium adjustments or refunds "Favorable
Balance
of
Trade."
family scale of living tends to rise on
Second World War veterans' Our standard of
living is increased
slowly unless 1 environment is
insurance.
by imports as well as exports and
changed or buying is stimulated.
Interest rates are low and prom-1
giving our exports away decreases
That stimulation is your
reached

sic

Since 1940 you

ada

environments

to retain the standards

1940

times, would not have en¬
even in the depression of
the early '30's. It is most unfor¬
tunate that more of our people
realize

old

living during the
They attained new stand¬
ards, tastes, preferences and de¬
sires. People will fight far harder

vied

not

from

war.

many^-Women were

and standards of

perous

der

eluding 14,000,000 ex-jervice men
as

for 1950

crops

come for

of marketing"
Many, millions, in^

mine.

factors

they are
reciting

even

high school

"law

in your favor.

come

called '/'fourth round" of the labor

wage

There is

in. and almost

credit

some

college training.

relations value of

oing at least a major part of the
ob,—or would prefer that gov-

will have

(2083)

A group of underwriters headed

Lee Higginson Corp., Kidder
Peabody & Co. and William Blair
& Co.
a

new

May 16 offered publicly
of 100,000 shares of

issue

Household Finance Corp. $100 par
value 4% preferred stock at $102
per

share plus accrued dividends

from

May 15, 1950. The preferred
is subject to annual retire¬
through a sinking fund be¬
ginning in 1951 sufficient to retire
stock

ment

the whole issue in approximately
50 years.

This

financing will broaden the

company's

invested

capital

base,

the proceeds to be used to increase

working capital.
Household Finance

Corporation

with its subsidiaries is

largest
the

organizations

consumer

business.

one

of the

engaged

finance (small loan)
December 31,

1949,

outstanding customer notes re-

ceivable amounted to $207,125,905
and
represented 1,064,332 loans.

Business is conducted through 499
branch offices situated in 339 cit¬
ies of 29 states and eight Canadian
provinces. The company's general

offices

are

Chicago.

(2084);

The Commercial and Financial Chronicle

The following statistical tabulations

Indications of Current

latest week

Business Activity
/UltE&ICAN

IKON

STEEL

AND

capacity)-.

^Latest

'•>*

INSTITUTE:

Indicated steel operations (percent
.

week

———May 21

Week

month ended

Month

Week

*V 101.3

ingots

;

100.1

Crude

(net

castings

and

tons).—

May 21

1,931,000

and

condensate

output

daily average

—

(bbls.

Crude runs to stills — daily average (bbls.)
output (bbls.)—
Kerosene output (bbls.)
-Gas, oil, and distillate fuel oil output (bbls.)
Gtocks

115.399,000

5,314,000

5,170,000

13,033,000
.2,029,000

17,792,000
2,156,000

17,530,000

2,056.000

7,162.000

6,531,000

6,643,000

5,955,000

May

7.178.000

7.272,000

7,783,000

7.895,000

127,431.000

128,655,000

135,116,000

123,728.000

oil

——;

(bbls.)

output

—

(bbls.)

—

loaded

May
May
May

Private'
Public

12,325,000

12,784,000

37,466,000

36,686,000

33,283,000

ENGINEERING

—

39,260,000

40,494,000

60,828,000

744.040

745,350

700,129

————

—,

—

municipal

655,734

653,657

655,173

——

—

Bituminous

and

coal

Pennsylvania

lignite

TEM— 1935-39

ELECTRIC

Electric

output

(COMMERCIAL

140,944,000

105,101,000

57,363,000

93.129,000

109,647,000

72,463,000

73,123,000

STREET

INC.

57,698,000

63,148.000

23.475,000

30,615,000

14,770,000

Other

9,930,003

May

), 770,000

*11,115.000

11,500.000

953,000

993,000

816.000

126,200

*128,300

93,400

Farm

982,000

DUN

243

251

137.200

300

*285

320

334

.864,326

5,371.684

5,363.247

;

May 11

217

199

201

171

Sewer

and

Pig

(per lb.)

(per gross ton)
Scrap steel (per gross ton)—.

;

$46.38

May

iron

—May
..May

$32.08

3.337c

3.837c
$46.33
..

$31.03

3.837c
.

$46.38

■

PRICES

Electrolytic
-

Export
Btraits

tin

(New

Lead
Lead

(New

(St. Louis)

.Zinc

■

* ,J_

•

„

May 10
;

—;

......

•
—

—...

(East St. Louis) at

—

May
May
May
May
May

19.200c

10
10

77.250c

11.500c

19.200c

19.425c

13.200c

17.700c

19.425c

13.425c

facilities

76.000c

103.OOOc

11.000c

10.500c

11.300c

10.800c

10.300c

13.850c

12.000c

11.250c

10.500c

PRICES

12.000c

Lead

May 16
.May 16
May 16

Average corporate
Aaa

1..

—

;

Aa
A

——i—

102.50

.a.—

Baa

Railroad Group
Public Utilities Group
Industrials Group
—

102.87

116.02

116.41

113.12

120.34

120.84

121.25

119.00

119.41

.May 16
May 16
May 16

102.70

115 32

119.41

119.82

117.40

101.66

x*ew

St.

115.82

11237

New

109.06

105.00

New

110.83

111.07

111.81

108.34

117.00

117.40

114.08

—May 16

120.22

NEW

YIELD

Government

Average

DAILY

May 16

corporate

Public

Utilities

INDEX

Orders

PAPERBOARD

received

Production

10.630c

(per

OIL, PAINT

AND

York,

99%

63.000d

min.

<§$)_

75.430c

LOT

DEALERS

AND

SPECIALISTS

Odd-lot sales by dealers (customers'

Number

EXCHANGE

THE

Dollar

25.000c

2.33

2.87

2.66

2.73

2.86

3.04

336

2.31

2.30

2.73

2.95

2.64

§Cadmium

3.45

(per
97%

Cobalt.

331.7

379.3

360.3

269,661

200.061

244.695

207,307

208,056

210.843

160.923

404.445

343,709

406,641

289.431

120.G

120.6

121.0

132.6

(000's

ISSUES

BANK,

YORK

omitted

Cash

GREAT

38,747

32,737

19,903

April 29

1,006,291

1,232,325

1,006,804

April 29

$39,402,651

$45,303,893

$37,426,703

$27,438,926

£6.669,000

£8,073,000

£4,648,000

$1,034,257

April
of

$1,018,337

$625,904

April

and

customers.
banks

listed

borrowings
borrowings

46,589

63,343

290,999

297,823

678,232

666,252

542 231

82,415,209
125.497,127

79,482,749
125,846,076

125,975

112,995

630.214

609.536

$255,739,702

$255,747,183
6,120,649

3,995,156

$249,626,534

$247,558,163

...

balances

bonds

U. S.

on
on

50.581
U.

310,958

4.701,858

Govt,

issues

other collateral

—April 29

37,338

44,377

34.841

279

383

STATES GROSS DEBT DIRECT
GUARANTEED— (000's omitted):

254

•

553,504

As of

April 30

General

sales—

April 29,.

other

sales—

April 29
April 29

37,090

44,093

34,458

17,893

1,073,774

1,307,897

1,016,329

9,352

10,104

13,682

9,963

balance

509,597

April 29

fund

shares—Customers'
short

other

total

sales

Customers'

sales

April 29

1,067,422

1,297,793

1,002,647

$38,804,350

$44,267,867

$35,003,940

Number

373,930

447.650

345,560

161,490

..April 29

shares—Total

Other

373,930

447,650

345~560

161,490

.April 29

sales

Round-lot

285,250

WHOLESALE

PRICES NEW

SERIES

—

329,450

300,160

Livestock
-

;

All commodities other
Textile

than

farm

and

lighting

and

Building
Chemicals

metal

172.5

170.1

162.1

216.7

209.8

198.6

199.6

153.4

*158.8

155.0

229.2

211.8

220.4

147.0

*146.7

145.7

147.1

able

WINTER

foreign crude

135.6

1413

Winter

*132.1

130.1

130.2

Rye

170.1

*169.6

169.7

23,663

22,851

$255,739,702

$255,747,183

$251,553,319

731,755

734,461

776,684

$255,007,946

$255,012,732

$250 776 635

19,992,053

19,987,277

24,223,364

the

debt

and

guaranteed

total
face

outstanding——

under

amount

obligations

above

authority

issu¬

AND

RYE—U.

WHEAT

194.7

*194.5

193.1

195.2

116.9

116.7

117.5

1183

—

of May
wheat—Production

DEPT.

1950:

163.9

May
of

*134.4

132.2

May

fllncludes 496,000 barrels

135.3

May

products.—

public

gross

AGRICULTURE—As

251,530,468

21,760

$275,000,000

255,723,520

162.8

230.9

Grand
Balance

May

materials
products

allied

♦Revised figures,

170.3

runs.

the

Production

Colburne,

20.904.000

°? *he Prcducers' quotation.

quotations.

SBased

but less than carload lot
packed

S.,

639,595.000

...

me„vised .figUIe-, tBas,ed
producers and platers

tons

;. 2.235%

$275,000,000

155.4

157.9

foods

materials
and

152.1

*162.7

—

products

and

*154.5

162.9
173.5

May
-

154.9

2.199%

255.717,941

obligations

rw,

May
,rT

Meats

2.200%

$251,553,313

$275,000,000
—

Deduct—Other outstanding public debt obli¬
gations not subject to debt limitation—...

:T;;
9

Foods

Fuel

Total

301^513

outstanding

^a^i.anL0ne time

212,790

178,367
'

(000's omitted):
that may be

Outstanding—
Total gross public debt——
Guaranteed obligations not owned

DEPT.* OF LABOR—

commodities

Farm products
Grains
!.

amount

132,097,816

LIMITATION

Treasury

1926=100:

Metals

face

purchases by dealers—

Number of shares

rate

STATUTORY DEBT

—As of April

Total

Round-lot sales by dealers—

annual

—

U. 8. GOVT.

$17,847,674

April 29
..April 29

debt

Computed

499,634

April 29

Net

66,237^520
.

AND

18,147

243

UNITED

$22,449,226

* !

BRITAIN—

purchases)—
32,672

$251,037,844

hand

Market value
Member

$27,063,014

omitted):

customers' free credit
Market value of listed shares

short

Number

All

40.000c

$27,042,277

EXCHANGE—As

extended

Member

—

Customers'

20.500c

40.000c
■

DEPT.

LTD.—Month

STOCK

( 000's

Credit

•

17.000c

20.500c
7

•

Member firms
carrying margin accounts—
Total of customers' net debit
balances

ODO-

$2.15000
Not avail.

17.000c

20.500c

CIRCULATION—TREASURY

MIDLAND

$2.15000
$1.80000

40.000c
•4-

As of March

$72,000

17.000c

**Nickel

NEW

$66,000

$2.15000

183,227

April 29

33.500c

$1.80000

Aluminum. 99% plus, ingot (per oound)
Magnesium, ingot (per pound)

345.2

$66,000

pound)__

2.78

Customers'

«>

Nominal

$2.00000

2.63

Customers'

Nominal

$2.07500

2.63

—

39.000c

Nominal

$2.00000

STOCK

Odd-lot purchases by dealers (customers' sales)—
Number of orders—Customers' total sales
f

25.102c

$2.07500

•

41.730c

24.602c

$2.00000

3.22

orders

value

$84,654

24.500c

$2.07500

COMMISSION:

Number of shares

$35,000

27.882c

poundi__

.May 12

EXCHANGE—SECURITIES

$1.02000

$35,000

$71,000

27.780c

....

74.694c

$35,000
$71,000

.....

Total of

$1.03000

pound)

INDEX—192G-36

6T0CK TRANSACTIONS FOR THE ODD-LOT ACCOUNT OF

75.694c

(per

May

AVERAGE—100

14.053c

76.430c

(per

May
PRICE

$4.02655

9.940c

tCadmium

May

REPORTER

43.5001

$2.79750

10.664c

——

63.957d

$2.79750

Louis

tCadmium

May

DRUG

71.500c

2.70

3.07

Percentage of activity
Unfilled orders (tons) at—.——

73.098c

3.00

3.24

—

14.958c

71.750c

ounce)

2.59

—

10.763c

2.83

3.11

(tons)

10.963c

10.423c

2.61

ASSOCIATION:

(tons)

15.154c

York..

Louis...

Straits

NEW CAPITAL

NATIONAL

21.450c
21.692c

2.85

3.26

—May 16

18.200c
18.425c

2.61

May 16

COMMODITY

7
13.640c

'18.825c

Sterling Exchange—

York

MONEY

MOODY'S

$249,000

238

."May 16

Group

2.23

3.12

Industrials Group

$258,000

Antimony (per pound), bulk. Laredo
Antimony (per pound), in cases, Laredo
Antimony (per pound), Chinese Spot.
Platinum, refined (per ounce)—_______

56
-

2.31

May 16
Group

$257,000

(per ounce U. S. price)..—
Quicksilver (per flask of 76 pounds)..
Antimony (per pound.), (E. & M. J.i

117.40

May 16

Baa

Railroad

2.36

May 16
May 13

2.31

May 16

Aaa

100

QUOTATIONS)—

Gold

AVERAGES:

Bonds

8
-

YORK—

—_

MOODY'S BOND

47,.

omitted)

(per pound)—East St.
(per pound)—

115.63

116.30

Zinc
Tin

108.70

120.22

enterprises.

Silver, London (pence per ounce).
Sterling Exchange (Check)

103.34

—May 16

(per pound)—

115.43

—May 16

OUTSTANDING—FED¬

(000's

Silver, New York

;

development

BANK

(E.

Common,
Silver and

....

service

63
;

*80

PA»»ER

Common,
MOODY'S BOND PRICES DAILY AVERAGES:
U. S. Government Bonds

14
134

110

Electrolytic domestic refinery..
Electrolytic export refinery

14.000c

Average for Month of April:
Copper (per pound)—

17.925c

77.250c

;

RESERVE

of April

METAL

„..t

York)

■

;

ERAL

QUOTATIONS):

refinery at
refinery at...

381

151

(E.

copper—

Domestic

;

*385

24 r,

160

...

public

institutional

and

180

(other than mili¬

facilities)

public

COMMERCIAL

$22.75
•
,

other

25
46

$45.91

A")

$23.83
•

)#ETAL

Ail

3j705c

263

172

443

water

Conservation

;

12
30

nonresidential

Miscellaneous
Finished steel

134
....

naval

.....

FROM AGE COMPOSITE PRICES:

243

Telegraph

building

and

utilities

Military and
Highways

BRAD-

construction

other

—

....

and

public

Hospital

260

naval
Educational

5.256,976

100

utilities

Residential

....

recreational

Railroad

Public

Institutional—

types

100

...

and

69
74

construction

Public

tary

—

445

244

nonresidential buildings

Hospital

11,284,000

May

INDUSTRIAL)

939

*650

—

Educational

$1,370

*1.155

—,

Religious

79.032,000

—May 13

AND

*$1,540

1,254

...

64:654.000

All

FAILURES

$203,626,000

SYS¬

kwh.)

OOo

$244,633,000

720

DEPT.

Warehouses, office and loft buildings
Stores, restaurants and garages....

INSTITUTE:

(in

17,224.000

45.013.000

(in millions):

Nonresidential building

KDISON

building inonfarmi
Nonresidential building (nonfarm<

Remaining

RESERVE

April

Industrial

May

INDEX—FEDERAL

12.066.000

$236,794,000

—

Residential

$130,991,000

AVERAGE=100

1,766,000

14.596.000

$113,640,000

between

—

construction

Other

SALES

9.989,000

25,000

$1,697

and shipped

construction

new

Telephone
STORE

9,994,000

12,667,000

25.000

$177,569,000

(tons)

DEPARTMENT

9,976,000

—

$250,591,000

—

$165,209,000
44,690,000

9,260.000
8.466,000

CONSTRUCTION—U,

Private

MINES):

(tons)

47,055,000

r—■

—

countries

$183,343,000
90,214,000

(tons)

-r..'.

BANK

Commercial

May

anthracite

Beehive coke

$93,703,000

23:

credits.

stored

gooas

Social

S. BUREAU

(U.

RESERVE

April

—

May 11
—May 11

—

Total

620,305

May 11

GOAL OUTPUT

FEDERAL

—■:

BUILDING

763,327

construction;-.1————May
and

$115,738,000

OUT-

1J,178.000

May 11

Pederal

Ago

$102,570,000

ACCEPTANCES

foreign

NEWS-

construction

Year

Month

SYSTEM—

thousands)

YORK—As

exchange

Based

51,442,000

33,766,000

Dollar

Total

cars).—

$157,392,000

Exports

RAILROADS:

(number of

CONSTRUCTION

construction

State

13,364.000

NEW

(in

DOLLAR

Domestic shipments
Domestic warehouse

1,831.000

—-—May
received from connections (number of cars)
May

ENGINEERING

RECORD:

April

RESERVE

LABOR—Month

AMERICAN

Revenue freight

GOVERNORS

Imports

5,172,000

13,270,000

oil, and distillate fuel oil (bbls.) at
fuel oil (bbls.) at-

4,953,300

Revenue freight

Total

4,997,600

/48SOCIATION OF

5,013,950

Residual

rHYIL

5,053.450

May
May

Kerosene

Gas,

refineries, at bulk terminals, in transit and in pipe lines—
and unfinished gasoline
(bbls.) at
May

Finished
-

Month

1,762,400

FEDERAL

•''w.

—May
May

fuel

DEBITS—BOARD

STANDING

May

of that date:

are as
Latest

.Gasoline

•Residual

1,903,300

either for the

are

Month
BANK

95.6

;

BANKERS

gallons each)

of quotations,

cases

Ago

100.0

1,903.209

or,

Year

AgO

INSTITUTE:

PETROLEUM

oil

that date,

THE

.*j

AMERICAN

Thursday, May 13,1950

production and other figures for the

cover

month available.: Dates shown in first column

Equivalent to—
Bteel

...

duty

included.

s§Tin

18697000

tBased on the average of
quotations.
([Domestic
ive
f.o.b. New York
**fop.
p->rf

platers'

in cases,

901 668 0(10

contained.

Number 4908

Volume 171

suffered

ence

Continued from page

W;V-:-v

.v; ' .v;

which

War

World

followed

continued

Germany's

that

but the attainment of the goal
far

merely

than

difficult

Bear in mind that the
of today represents a

setting it.
Germany

truncated

drastically

Republic,
the
German Republic,

called East

ated

in cir¬
culation, credit available for busi¬

serious shortage of money

other

and

public,

with

about

otherwise

authorities

cal

interpret this as being

report completely on the nega¬
hasten to assure

Germany

flexible

ministration
tral

Time

tems.

and
does

analyzing
which

the

banking

are

their

German

adcen-

inflation-

somewhat
However,

appreciate

one

can

determination

destiny

Germany's
take

any

steps which might strain the deli-

that, short though Germany cate reed on which the German
be of all these resources, it financial system leans.
encouraging to note that there
has been a steady growth and
Productive Facilities Obsolete

land and about 38,500,000 of popu¬

you

indicated
above, there should now be added
approximately 9,000,000 of new

may

population.

development
of
practically all
these
vitally
necessary
instru¬

lation,

which,

political

angle

eco¬

discussion,

financial

and

nomic

into this

many

This

shortage

which

capital

I have alluded

leads

Jhnportant

There and financial situation. Her proDemocratic Republic without em¬ are
many
people, both within ductive plant, reduced as it was
phasizing that the only thing Germany and without, who feel by reparation and dismantling
the German

mention

cannot

one

permit

credit

democratic about it is the middle

that

part of its name.
In every re¬
spect it represents a communistdominated
state
whose
every
move is dictated from the Krem¬

enumerating.

its

varying forms

is being

to that

today> t0 portray

trade

impediments*

definite

the

very

one

Ger¬

many's recovery.
Money and Credit Shortage
There

other

are

her conscientious
able

effort

disastrous

enterprise. That would
to be simple enough; but
nothing is simple in Germany. To
understand some of the complexities of this matter, one must be
common

seem

Germany
rising workers are represented by these
miltary menace are individual industrial unions, in

warranted and clear. I see no general it is the Federation which
reason for any change in that determines policy on a national as
Pol** until Germany, by every against the industry level.
reasonable test and assurance, has
taws for "Co-Determination"'
abundantly demonstrated to the The Laws for uo Determination
World that she will not again beThere have been under discuscome a menace to peace and cause sion, and in fact in some of the
the havoc and suffering that she States there are already enacted^
has in the so very recent past.
laws providing for this co-deter«

diffi¬

she

from

others familiar with her
history, at the very thought of
anything that even faintly sug¬
gests inflation.
A people that
twice within their own experi-

many

the

from

you

are

over

Notes

NSTA

Today

these

lin's total population

BOND

outing on Oc¬
announced shortly.

The Dallas Bond Club will hold its annual fall
tober 12th.

Plans for the day will be

AD LIBBING

Henry G. Isaacs, Virginia Securities Com¬
'

the war,

20%

fact that

was

advertising will be found, in our Convention
Number :of
"The Commercial &
Financial

demand

Persons,

Ex-

aggravating fac-

the

giving
Trade

bases

gf°\n<v mpnfhpr^hin
Bo

nfrectors

Further

whethe^^e^representatives4'rtt'
given Board

Dir3ctc;rs shall be employees of

tions of industries for the occupied. the enterprjse itself, chosen by all
While this is a delicate subject
empioyees, or representatives t
a"d while, of course, I make no of such err)pioyees, designated by
allegations or even suggestions in the Trade Union Federation, who.
this realm, it is difficult to demon- might or might not be employeesstrate to the Germans that com- of the enterprise. It can be readPlete prohibition against any pro- ily seen how important and farduction m certain industries or reaching are the considerations ^
some of the limitations in other which underlie the present active
industries, such as steel or ship- campaign being waged by embuilding, are genuinely formulated pi0yers and employees, alike, conLorn a military rather than a cernjng Federal or other legislacommercial standpoint. Germans ^on on this broad subject of
continue to clamor for a readjust-co-determination and how diffirnent of the Prohibited and cu]t but equally vital it is that
Limited

Industries

Agreement,

effectively shackles a significant part of their industries,

sucb

legislation be formulated oa,
principles,

SOUnd

Caution Warranted

and 1 think there is considerable
«,gency t0 son}e of th.e arSuments

most

visible

HAROLD B. SMITH, Chairman

J',

*-££,5

a"ao^k'ngal7®a®^es

,v,o

faithfl;IIy apeak otherwise o<P"ese"1 day. Germany. Equally,

though I think there is^adequate?

netivifif*

sources

«"Pectetion -that,
mutual

lm-

New York

her

City

K.I.M.—Corporate ads pay dividends.'

the

ANGELES

Security Traders Association of Los Angeles

will hold

spring party June 23rd-25th at the Hotel Del Coronado.
Jack Alexander, Walston, Hoffman & Goodwin, President of the
Association, has announced that the party is one of the largest
planned in the history of the Association. On the agenda are
pitch and put, golf, swimming and sailing, deep sea fishing and
its annual

in-

Shorn of much
agrarian territory,

worse.

former

^f/^Kvernme^rS tel"gent "SCal ""T
^als b^hTeSereTand Laender. can rebuik> her Whack toward;
0ne'must
are

bear jn mjnd that they

re]atjve

novices, the Federal

economic

stability. Basic to thu^

however, are political

considers->

SKefKiS UonfnTto onYy®abou? 'eight tions' bptb fmfefC and
demand for imports becomes all m0nths. Even this short period is to whlc
!a<;k 0 FY?thermore

120 Broadway

Arrangements have been conducted by Roy Warnes, Hill
Richards & Co., Scott Stout, Blair, Rollins & Co., and William
'

important

Today the picture is sub-

stantially
of

Pershing & Co.

tennis.

she had to import about

of her requirements. This
while she still had some of

^exports i^rvisfbT'and

Good luck, Garcia!

SECURITY TRADERS ASSOCIATION OF LOS

must solve
situation. Germany

Germany

Henry G. Isaacs

Chronicle."

the

IheL

has

Pike, Morgan & Co.

the

of.
in^ntna with **** for the
supply within her own borders.
nroWems lack
vigor
through hard work,
COThe foreign exchange thus needed
agjnaUon, courage or even reso- operation, careful planning, pro*
for purchase of this 20% of necesiuteness
it js difficult to pass dent use of her resources and in-«
her

;

relatively few investment firms,
feels most enthusiastic that much local

The

Jeems

Thus far, I fear you may haveis her food
th?y
discerned a note of caution in the
never
was self-sufficient in
probroad outline, the foregoing rePort I am rendering. I do notr
ducing her own food. Even before ?ue(S0!™" ? *h® "JSSLf.!, ™
think any realist can objectively

Virginia gentleman.
This year our national convention will be
held at Virginia Beach, .which is only a few

nil, is

which

lem

formerly; called his home—St. Louis,

Displaced

pellees and Refugees, whose purchasing power is very low and
whose resources, in general, are

Food Shortage

role of the

working

Another highly important prob-

Chicago, New York, New Orleans, Miami and
now in Norfolk he has acquired that dignified

Hank

represent

employment. The presence of 9,000,000

^.,'75!!

em-

How-

should

which

quaintance in many States of our Union in the
distribution of securities. To mention a few

Norfolk

are

tor in this situation.

rity fraternity and has developed a wide ac¬

miles from Norfolk and in spite of the

figures

these

almost
&

pany-of Norfolk, Va., will be one of the most
active
members of our NSTA Advertising
Committee. Hank is well known to the secu¬

cities he

figures

distressingly high incidence of un-

CLUB

relations

emntovee

the emplovees on any

under 1,800,000 and just
290.000, respectively. Based
either Germany and West Ber-

force,

progress

plover

slightly

gent constructive

™ulatl£g prohibitions and limita-

2,000,000 in Germany

In
.

which motivate occupiers in for-

above
on

disturbing.

not

?ct' 1

jf.

advantages

plus slightly over 300,000 in West
Berlin.

to
T

would

Directors

unemployment was

year,

slightly

representatives

during February

its height,

this

curity, to predicate them on commercial and industrial considerations. Neither commercial rivalry,

ployment.

seem

confronted
by a fourth and equally unsatisfactory situation, namely, unempansion, and

Unemployment

DALLAS

workers'
Board

difficulty believe that these prohibitions
Allergic to Inflation
and slowness in building up her and limitations are just and necThere is much to be said for exports. Couple this with a lack of essary and timely, equally strongthis school of thought.
Equally capital for vitally necessary con- ly do I feel that it is ethically
understandable, however, is ffie struction in the realm of public unjust and economically unwise,
fear of countless Germans, and works, housing and industrial ex- under the guise of military se-

fiendishly

fact,

rotation. These laws provide that
the Board of DirectorSr m „cobk
tradistinction to the Board of
Managers, shall be composed of
W™™*LaiJ5
owners.
The mere
presence
of

in great measure for her

and commend¬

recover

war

and,

waged

serious

beset Germany

which

culties

realistic pic-

ture of the German scene from an

would have substantially greater
unduly restricted in Ger¬ productive capacity were it not
many.
They are of the opinion for much of its obsolescence. This
In the light of this prohibition
that the German financial and low estate of the
major portion of against rearming, however, Gereconomic authorities should be
Germany's productive facilities, many asks whether her protectors
lin.
Therefore, it shares com¬ more liberal in their monetary due to lack of capital for rehabili- against foreign aggression will be
pletely the fate of all the other policies, lest Germany enter a de¬ tating them, makes Germany, by the Occupying Powers which prounfortunate countries and people flationary phase which it would and large, a high-cost producer, hibit her from creating her own
who must suffer beneath that dia¬ be difficult to arrest and during Consequently, she is at a competi- means of protection. The presence
bolic yoke.
I allude to this also which, obviously, she could not tive disadvantage with producers of the Occupation Forces answers
because the difficulty of East- expand her production and trade. of other countries. This accounts that question. Firmly though I
West

to.

situation

last

against

again

credit and the third
aspect of
which time does not Germany's present day economic
and

of money

ments

one*

tions

meaning to interpolate

Without
a

oriented somewhat on the entire
labor movement in Germany. It
consists of 16 national, autonomous, industrial unions, federated
into the one German Trade Union
Germany becoming rearmed, ac- Federation, comparable to the
tually or potentially. The stipula- A. F. of L. or the C. I. O. While

inherent

the

hesitancy of those entrusted with
the

course,

military considerations of what
might constitute or create a war
Potential. The steel, chemical and
shipbuilding industries are outstanding examples of this cate&ory* Having witnessed the rava&es wrought by Germany, no
reasonable or reasoning person
could inveigh against proper prohibitions and safeguards against

considerations

the

financial

a-w

there

' which, I think, no one should faiL
, to allude who endeavors, as do I

carry- and political thought at this very
certain industries which moment. Co-determination of itdeemed to represent a war self represents a broad subject,
Potential. Such, for instance, are but in crystallized form it may be
the aircraft or munitions indus- described as the legal right of
tries. Others are limited, the employee to share with employer
limitations being predicated on in shaping the destiny of their

monetary sysnot permit my

course.

ary

alluding, of

inS
are

urged in favor of their

are

be-

^completely prohibited from

often under considerable pressure
to

again

under-

The Central Bank and other fis-

readily

expansion.

her

part of the Occupation which has economic and financial viewpoint,
to do with the so-called Pro- It is so-called "co-determination
hibited and Limited Industries. As which is in the forefront of Gerthe term implies, Germany is man economic, industrial, labor

that

any measures

might

well following

tive side, let me

the

60%

you

requisite for recovery

Lest you

against the Western Re¬

are

which

media

know

into

population of about 18,000,000 and
about 40% of the pre-war terri¬
tory

purposes,

capital for the financing of longterm requirements and the many

cre¬

two separate States:
Eastern
Republic,
with
a

the

commercial

and

ness

so-

partition of pre-war Ger¬

many

fact that there is a very

cite the

economy.

The establishment of the German

Democratic

her

mine the integrity of their mone-

entire

economy
which was wrought by the Hitler
regime. Without boring you with
further statistics, let me merely

blight

aim,

Restrir«

remotely connotate inflation

even

against

military,, menace.

Restrictions Against War Potential

natur-,

ally allergic to

or.

which

are

guard

coming

inflation

followed World War II

tary system.
been

did the Germans

the ravages of the

from

from the Monetary Reform

Germany Today—The Economic,
Financial and Investment Outlook

41.

(2085)

Financial Chronicle

The Commercial and

serious in

the light of

Germany's vastly reduced visible
exports,

while

Knr

her inv.sible ex-

ports are practically
The

only

non-existent.

esses

similar span

which this new regime has

^ e

*nff

thebfst GrtaheD^

fur
permit her Mustrial

production to expand within
minimum of

the

safeguards necessary

cite

alTthe importantPconsidera-

tions on which
ery

Hpmorratic

tSSS

reasonable hope I see to overcome.

of food and

for-

only to allude. Furthermo ,
of time for any other government the achievement of this economicbecause of the myriad of obvious improvement, I want to reiterate
difficulties> precedents and proc- th(f imDortance 0f reuniting the
not comparable to a

Federal German

Germany's recov-

must be predicated.

However,

Republic.

Only

Continued On page

(2086)

The Commercial and Financial Chronicle

Continued

from

page

which

the

German

Financial and Investment Outlook
_

the

foreign

could

themselves do

exchange

goods.

Now

have

is that they
with

the

endeavored

portray

has

her

build

from

such

for

capital.

would

seem

assignment.

easy

consideration of the

mat¬

ter, however, leads to the unfold¬
ing of many involved problems.

three

entire

subject

facets.

come

for

the

First,

there

can

the

aspect

this

determination of
magnitude of these

debts, as well as establishment of
the validity of certain portions of

treatment
is

debt

luded

earlier

As you can

abroad

who

want

obtainable
worjcj

is but

further thought
that I should like to enunciate in
this discussion.

I know from

experience with what objec¬
tivity one analyzes a situation be-

an-

the

settlement

the

rule

Certainly this

the

initial

$1).
Co.,

additional

facilities and for
between May 10 and 15.

facet of how to deal with
the prewar, foreign
exchange in¬
debtedness
of German
obligors.

ment for
to

those who

such

Expected

with investments there. This

will

further aspect should, not

over-

looked'in

determining the wisdom
such investment.
Germany is

can

determining

these

debtors

the

are

of pay-

American Cyanamid
Co., New York (5/19)
an unspecified
number of shares of series
B cumulative
preferred stock (par $100), which is con¬
vertible before July 1, 1960.
They are to be offered to
common stockholders of record
May 16, 1950 at the rate
of one preferred share for
each seven common
held;
rights to expire June 2.

Underwriter—White, Weld,

& Co. Price—To be filed
by amendment,
dividend rate. Proceeds—For
working

along with
capital and gen¬

The

prudently

DMs, similar

unblocked

rate of return

eral funds.
•

American

May 1
stock

for

Silver

cents

property

per

share.

development.

Spokane, Wash.

100,000 shares of capital

No underwriter. Proceeds
Office
123 W. 4th
Ave.,
—

;

American Textile Co.,
Inc., Pawtucket,
April 26 (letter of notification) 10,000 shares
of
.

common

capital stock (par $10). Price—$15
per share.
Under¬
writer—None.
Proceeds—To provide additional funds.
Office—P. O. Box 637,
Pawtucket, R. I.

Ampal-American Palestine
Trading Corp.
April 10 filed $3,000,000 of 10-year 3%
sinking fund de¬
bentures.
Underwriter
Israel Securities
Corp., New
York. Proceeds—To increase
working capital to be used
—

uses

whichT ;* As

permitted
to

the

of-

uses

balanpes

endeavored

throughout

of- many

Iq^are

indicate

this^discussion, Ger-

sorely ne£ds capital.

risks

Business—Developing

the

eco¬

investments

There
almost

B-Thrifty,

one

of common

share for each nine

now

Office

par value) at par, and 200
shares of
value common stock (no
p'ricte given).-'No un¬
derwriter. Proceeds to
buy and build additional stores.
Office—5737 Bird Road,

Miami, Fla.

words, when large purveyors of '
capital consider whether or not to ;
invest in Germany, with a full -

Pprmanv

„nrn_..;hprfl

will

Cleveland*

else-

the

result

tfQincf

innH

p1t;p

somewnere

what

Second,

what

suggest that

the

history,

their proper

not

merely

soiu-

Ger-

many but of the world, as it is
being written this very day and
hour.

—

INDICATES

ADDITIONS

Co., Los Angeles.
expansion.

Proceeds

—

For working capital and

Bulova

Watch Co., Inc.
May 10 (letter of notification) 9,090 shares of common
(par $5).
Price—$33 per share.
Underwriter—
None.
Proceeds—For working capital.
Offering—^To be
stock

made to certain

employees, offer to expire June 9. Office
Ave., New York, N. Y.
S
;

May

1 filed

Electric Power Co.

180,000 shares of

(5/23)

common

stock

(par $1).

Underwriters—Walston, Hoffman & Goodwin, San Fran¬
cisco; William R. Staats Co. and Pacific Co. of Cali¬
fornia, Los Angeles. Price—To be filed by amendment.
Proceeds—For construction.

Offering—Expected May 23.
California Electric Power Co.
(6/7)
May 8 filed $2,000,000 first mortgage bonds due 1980.
Underwriter—To be determined by competitive
bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.; Shields &
Co.; Kidder, Peabody & Co.
Proceeds—To finance in
part property expenditures for 1950 and 1951.
Bids—

•

To be opened on June 7.

privately.

Bremer

(Sidney N.) Industries, Inc.
(letter of notification) 100 shares

stock and

($100
build

per

500

shares of preferred stock.

•

common

Price—At par
Proceeds—To

share).'

Underwriter—None. *
decorating and processing plant. Office
St., Marietta, Ga.

ceramics

Union

filed
Co.

Co.

$8,000,000 of first mortgage bonds
Underwriter—Issue awarded to

1980.
&

Gas

Inc.

May 17

repay

its

bid

103 to yield 2.85%

bank loans and

due

Halsey

for

102.3991.

Re-

maturity. Pro¬

construction

pro¬

';v.-/j/

stockholders of record May 5, 1950 at the
rate
preferred share for each four common
shares

one

then

rights
Inc.

offices

be appraised not
merelypositive but likewise from :
negative standpoint.
In other •
a

Baldwin Co.,
Cincinnati, Ohio
April 19 (letter of
notification), 1,001 shares of common
capital stock (par $8), to be sold
at^the market price
(estimated to be $17 per
share), for the account of a
selling stockholder. Underwriter-^W. D.Gradison &
Co.,
Cincinnati. Placed

Brooklyn Union Gas Co.
April 13 filed 186,341 shares of cumulative
convertible
preferred stock (par $40), offered
initially to common

all

in'

latter

/Budget Finance Plan, Los Angeles, Calif.

California

stock, ($25

gram.

areas

This

Miami, Flaw$,■ L.^
notification) 11,000 shares of class

(letter of

ceeds—To

Private Wires

the

(letter of notification) $300,000 principal amount
of Pries A 5% debentures of $1,000
principal amount
eacfj/with warrants attached to buy 25 shares of class B
stock at from $4.25 to $4.75 per share between June
15,
1951, and Aug. 15, 1952. Underwriter—Morton Seidel &

Inc.,

offering planned at

San Francisco

•

par

Stuart

Philadelphia

invested.

should
from

-—■—

—630 Fifth

April

Chicago

Md@?8

Boulder, Tulsa, Okla.

Jan.

Pittsburgh

achieve
it

tion will play a significant role in

2,500Tha^s^of

Brooklyn

Boston

will

March 14 (letter of
notification)
common
stock at $100 per share.
No underwriter.
Proceeds to
build a natural
gas transmission line.
Office—105 N.

May

and

expire
F.

Proceeds—To
program.

■

distribu- ;

Communist system that exists be-

Street, Fayetteville, Ark.
Associated Natural

—1601 Roswell

New York

easier to present than to solve, but

Proceeds for construction.

—28 E. Center

$100

investment, how-

tion of investment capital and the'
constructive
development which •

SINCE PREVIOUS ISSUE

of warrants at the rate
of
held. No underwriter.

common

Mining Co.

(letter of notification)

re--

bind the Iron Curtain.

prepared

Arkansas Western' C*a
May 2 (letter of notification)" *28,948 shares
stock (par $6) to be

May 8

is the c
question

pvpy
ever,

•

for enterprises in Israel.
nomic resources of Israel.

•

are

in the U. S. understand it, and the

offer«<LaL$1Ulupjari^khar.e.to,holders

April 26 filed

comparative risks

investments

fore

goes

stages

settlement

Deutsche Marks.

obligations of

install!

working capital.

the'

best form

third

Co. (6/1)
480,000 shares of common stock (par
Price—$1.50 per share. Underwriter—Graham &
Pittsburgh and New York.
Proceeds—To

parts

economically
of debt settlement
and
until this for- of
financially, and, therefore,
eign exchange
imbalance is ap- truly one
possibly politically, inside Ger¬
of, if not the most sigpreciably corrected.
If debts ex-"
many and without, if the investriificant, ramparts of the western
pressed in foreign
exchange can- world in the cleavage between the
™ ^ *
not
be settled
* T ese re
in that
medium, system, of free enterprise, as we problems which I appreciate are
then the next

Young and Dawes Loans

filed

•

viewing the return in

tQ wbicb

Securities Now in
31

really

Ancillary to the first and second
parts of this situation, or possibly
even fundamental to
them, is the

American Cladmetals

other

SpectiVely exposed. Parallel to the'

one

March

when

which

More Than Money Involved

'^Kere

rate of'

•

German

ffbm

plement that desire.

first

internally,

even

attractive in comparison with rates:

can

Avi-

exchange

eign

of their debts.

prewar

will

in¬

funds

for the unblocked DM balances to

many

.•

in¬

awareness of its present situation
one invests in it.
I would be
;
surveying such the last to suggest any deviation as I have endeavored to etch it in :
all frankness, I think
through ECA aid, from That very sound
they should
principle,
to make good a
be motivated by two considera- '
large portion of "'In "the case of
Germany, however,
this deficit, it is
tions: first, what will be the result •
hardly reasonable I profoundly believe that there is
to
to them individually and to the
expect that German debtors
more than
just the consideration _„n_i j
will be permitted to use
,—
—
any for- ui
of iiiuiictaxy
monetary icmunciauvu that
remuneration
uiau
general
the investment
in

sizable

the

future

near
,

in such

investment return which is

Despite
hopeful that

invent hi Germany will at least be
afforded the opportunity to im¬

simple

tance

»1 long last have found a fair, the light of the
-? u8,
T
?•
"i

those'

discussion,

the successor to the

very

Germany, I fear, for1
the present at least, cannot afford,
to pay, either in external remit¬

studied.

equitable and practical solution of
situation in all its manifold
*9 1 ® e
that the m°£a~
torium
torium can be relaxed, so that

where

this

and with the U. S.

this

the

of risk entailed

gree

would
operation

Yield

vestment.

this

at
-

readily identifiable

suppose

raIsine

this, however, I

Estimates range from

debtor

parts of the world.

vestment normally reflects the de-t

reasons

in
111 ra*Smg this moratlllS ™Orcl-

reiterate,

indre-Carefully

the

actual

re¬

of the

some

Germany today than in.some other,

order

appear to be a simple
viewed, but it becomes
rrfbrd'involved and diverse as it is

thought. Obviously, with Germany
suffering from the vast deficit of
foreign exchange, to which I al-

at the most at¬

great extent furnishes the
swer to this latter question.

publicly

attention

when first

satisfactory

purchase marks from

whomever he

has

problem

Peace

stature.

agreement is likewise less
than one would

for¬

difficulties

torium.

international

and where creditor and debtor
come
to a mutually

invest dollars

tractive rate possible.
see,

vexatious

The

they be
in only at the

current

complex problem

really

some

the

principal

Should

wants

cord

tially reduce their ultimate total.

purposes.

focussed

have

these

dation of these debts wm
substan_

This is further complicated
by the

Investment Difficulties
The

new

Ger¬

into

is really related to the
first part of the problem, for the
Germany, degree of transferability permitted

called moratorium against
foreign
investments. To the cursory ob-

careful

rate

allowed

capital in
therefore, becomes all the more
pressing. With this in mind, the
Occupying Powers are doing their
utmost to bring an end to this so-

this

handle

investment

funds?

instance,

the

similar

sucb debt

in Germany have to remit those
dollars at the official rate of DM
4.20 to the dollar or should he be

capital is derived
operations.
The need

foreign

servor,
rather

flow

clear, greater risks, including the
political factor, in investment in^

such

cases

further

any

eign exchange which they repre¬
sent; i. e., should anyone who, for

above,

tion
costs, do not yield
much
profit.
Consequently, relatively
created

how

would

permitted to
official

Outmoded plant and equipment,
with their resultant
high produc¬

little

such

left for solution
of

Should there be any preference in

Germany is in crying need of cap¬
Domestically it is very diffi¬
for

for

many

Conference

in the neighbor-

remittance of income

ital.

cult

that

many

vastly changed
and
order
has
supplanted chaos. Despite this, as
I

constitute

Determination

conference

The best estimate

are

funds

been

situation

not

These

anywhere.
Admittedly there are,
I hope I have made abundantly

ment moratorium.

165,000,000. Coupled tbe
eqUiValent of $1 to $2 billion
however, is the sec- witb
ciear indication that the vali-

that,
facet

ond

tangible

credit

and
are well known to

audience.

referred, is a complex
whose solution has dethe lifting of this invest-

layed

Young

complicated

present
balances

hood of DM

pittance in

mere

the

foreigners.

very large sum.

prevention of carpet-bagging.
In
the early days of the Occupation,
a

Mark

account

policy, and that of the other two
occupying governments, to pro¬
new
foreign investments in
Germany. The reason is obvious:

assets

the

Thursday, May 18, 1950^

problem

legal and juristic
thpHppv
nrnhl^m
problem ih*f it may "Well Tr&Ve to f°F the delHy
that i+ rvfa

blocked in German banks for the

investment

hibit

valuable

unblocking

Deutsche

aspects of present day Germany.
Since the beginning of our Occu¬
pation, it has been the American

purchased for

Loans,

problem from the standpoint of
permittable uses of how to handle

Investment Acts

Now

such

the debtor

which

nhresemr-the-iorReich, whose obliga-

tions,
this

such. At

Dawes

Germany Today—The Economic,
through this do I see promise of
real recovery for Germany.

lAh££C£xi§t

forefront

mer

...

May 22.

Moseley

repay

Underwriters—Blyth
&

bank

Co.

Priee-—$48

loans

Statement effective May

and

for

per

held;
& Co.,
share.

construction

Cana-Mont Oil Co.,
Kaiispell, Mont.
May 10 (letter of notification) 200,000 shares of common
stock to be offered at
par ($1 per share). No underwriter.
Proceeds for drilling and
operating expenses.
Canam Mining Corp.,
Ltd., Vancouver, B. C.
Aug. 29 filed 1,000,000 shares of no par value common
stock.
Price—800,000 shares to be offered publicly at
80 cents per share; the remainder
are registered as "bonus
shares."

Underwriter—Reported negotiating with

underwriter.

Proceeds—To

Statement effective Dec. 9.

develop mineral
Indefinite.

new

resources.
1

Capper Publications, Inc. ;vVy.::i :
■/:
March 20 filed $2,000,000 of series 6
five-year first mort¬
gage 4% bonds and $2,000,000 of series 7
10-year first
mortgage 5% bonds. Price—At par, in denominations of
$100, $500 and $1,000. Underwriter—None. Proceeds—
To

redeem outstanding bonds and
improve facilities.
Office—Eighth and Jackson Streets, Topeka, Kan. State¬
effective May 1.

ment

(The)

Chicago Fair, Chicago, III.

March 24 filed $1,000,000 of subordinated
1960.

Underwriter—None.

Price—At

debentures, due

par.

Proceeds—

Volume 171

For

Number 4908

Hart Stores,

construction, alterations and general administrative
Business—To hold an exposition in Chicago.

expenses.

Statement effective April
Cincinnati

NEW ISSUE CALENDAR

to reduce

bank

loans

incurred for

May

share).

additions

Underwriter—None.

and

conversion

240 W. Monroe

Proceeds—For

dial

operations.

(EDT)

noon

May 19,
Cyanamid Co

Interstate

plant

11:30

Office—

1950

11:30

(par $1)

to be offered

proximately $6

Fuel

warrant

Price—To be filed by

amendment.
funds, for property additions.

ceeds—General
•

Vore, Monrovia, Calif.
working capital.
•

No underwriter.

Horne

Reading Co.

Proceeds for

Beane

(jointly).

Proceeds—To retire $16,000,000

bonds,

American
General

one

new

Hutton

Proceeds—To

struction:

share for each

seven

Co.,
repay

New

York.

bank

Statement effective May

loans

per

develop oil and natural gas properties in

tion of additional
ties and for other

machinery, further extension of facili¬
corporate purposes. Expected in a few

days.

11:30

Address—P. O. Box 670,

Norwich, N. Y.

Kodak

Eastman

Co., Rochester, N. Y.

The Quinby Plan for
Eastman Kodak Co.

Accumulation of Common Stock of
Sponsor—Quinby & Co., Rochester.
Business—Investment plan.
Home

Florida

Insurance

Co.,

Miami, Fla.

(letter of notification) 12,000 shares of common
stock (par $10).
Price—$25 per share.
Underwriter—
None. Proceeds
To raise capital and paid-in surplus.

May 4

—

Office—First Federal

Bldg., 100 S.E. 1st Ave., Miami, Fla.

General Radiant Heater Co., Inc., N. Y. C. (6/1)
stock (par 250).
Price—$3 per share. Underwriter—Mercer Hicks Corp.,
New York. Proceeds—For plant and warehouse, adver¬
May 3 filed 170,000 shares of

tising

common

research, working capital, etc.

June 1.
•

Gloeckler

Expected

about

"/■/

(H.)

Associates,

Inc.

(6/1)

May 11 (letter of notification) 30,000 shares of common
stock

(par $1), of which 20,000 shares

publicly at $5
at

per

are

to be offered

share and 10,000 shares to employees

$2.50 per share.

Underwriter—None.
Proceeds—For
and for working capital.
Office—
44th St., New York 17, N. Y.

expansion
155 East

Gold

program

Shore

Mines,

Bonds
.Common

15, 1950

19, 1950

—-Bonds

——-—-Bonds

20, 1950

-"'J

•'

'v.•/'

;

Grant

(W. T.)

Co., New York City

April 3 filed 118,935 shares of common stock (par $5).
No underwriter. These shares will be sold to employees
from time to time under terms of an Employees Stock
Purchase Plan to be voted on April 18. Proceeds—To be

corporate purposes. Price—
share. Statement effective May 1.

added to general funds for

$22

Mines

Granville
-

Ltd.,

Corp.,

British Columbia,

Canada

Feb.

100,000 shares of common

filed

non-assessable

Price—35c per share. Underwriter—
None.
Proceeds—To buy mining machinery and for
working capital.
Statement effective May 10.

stock

(par 50c).

Gulf Atlantic

Transportation Co., Jacksonville,

Florida

May 27, 1949, filed 620,000 shares of class A partic. ($1
par) stock and 270,000 shares (25c par) common stock.
Offering—135,000 shares of common will be offered for
subscription by holders on the basis of one-for-two at
25 cents per share. Underwriters—Names by amendment
and may include Blair, Rollins & Co., Inc.; John J. Ber¬
gen & Co. and A. M. Kidder & Co. on a "best efforts
basis." Price—Par for common $5 for class A. Proceeds
—To

complete an ocean ferry, to finance dock and term¬

inal facilities, to pay current

obligations, and to provide

25 cents per

share for each 100,000 share block. Offering
—To be made only in New York State for the present.
Proceeds—For buildings, equipment and working capital.

Pierce, Fenner & Beane; Smith, Barney & Co.; Kidder,
Peabody & Co., or Lehman Brothers. Proceeds—To pay
$2,400,000 of 3% notes and $5,000,000 of first mortgage
41/2% bonds, due 1978, and for new construction. Bids—
Will be received up to 11:30 a.m. (EDT) May 22 on both
common stock and
bonds at The Chase National Bank
of the

City of New York, 7th floor, Conference Room,

Broad

Utilties Co.

(6/5)

May 3 filed $13,000,000 of 30-year first mortgage bonds,
due 1980. 'Underwriter—To be determined by compet¬
itive bidding.

Probable bidders:

Halsey, Stuart & Co.

Inc.; Stone & Webster Securities Corp.; Salomon Bros. &
Hutzler and Union Securities Corp. (jointly); Carl M.
Loeb, Rhoades & Co. and Lee Higginson Corp.

(jointly);

Pierce, Fenner & Beane; Lehman Broth¬
Proceeds—To finance construction program. Bids—

Merrill Lynch,
ers.

Expected to be received up to noon

Investors

Harris

Service Mutual

(EDT) on June 5.

Life Insurance Co.

May 8 (letter of notification) $30,000 of 10% certificates
at $50 each. No underwriter. Proceeds

of indebtedness

for additional
hill St., Fort

capital and reserves.
Worth 4, Tex.

Fund,

Management

Inc.

May 10 filed 50,000 shares of capital stock;
Hugh W. Long and Co., New York City.
Service Co.

Public

Iowa

Distributors,

(5/22)

cumulative preferred stock
(par $100). Underwriter—To be determined by competi¬
tive bidding.
Probable bidders: A. C. Allyn & Co.;
Harriman Ripley & Co. and Merrill Lynch, Pierce, Fen¬
ner & Beane (jointly); Kidder, Peabody & Co. and Blyth
& Co. (jointly); Equitable Securities Corp.; Lehman
Brothers; White, Weld & Co.
Proceeds—For payment
of bank loans and for construction. Bids—Will be re¬
ceived up to 11:30 a.m. (EDT) on May 22 at office of
company, Room 3700, 30 Broad St., New York 4, N. Y.
Price—Company plans to sell the stock at $100 to $102.75
per share. Statement effective May 10.
Feb. 21 filed 50,000 shares of

•

Manor

Vail

Hotel,

Lyndonville, Vt.

Inc.,

preferred
stock (no
share and the

May 10 (letter of notification) 3,000 shares of
stock (par $10) and 6,000 shares of common

par). The preferred will be sold at $10 per
common
offered as a bonus with the preferred.
underwriter. Proceeds for working capital and

No
improve¬

ments.

/...

Mathieson Hydrocarbon

Chemical Corp.,

Baltimore, Md.

May 2 filed 522,667 shares of common stock (par $1),
of which 466,667 shares will be offered to common stock¬
holders of Tennessee Gas Transmission Co. at the rate
of one share for each 10 held, and the remaining 56,000
shares will be offered to the Trustee of the Thrift Plan
of the Tennessee Gas Transmission Co.
Price—To stock¬
holders will be furnished by amendment: to Thrift Plan

build, equip and operate a plant.
ture

ethylene

Office—2272 Hemp¬

glycol

and

Business—Manufac¬
chemical

other organic

products.
Middlesex Water Co.,

Newark, N. J.

Feb. 9 (letter of notification) 5,200 shares of common
stock offered to common stockholders of record March 17
at $50 per

share on a one-for-five basis.

Underwriter-

Clark, Dodge & Co. Proceeds—To pay notes and
additional working capital.
Expected this month.

for

R.) Co., Inc.
of notification) 1,000 shares of 6%
cumulative preferred stock at par ($100 per share). Un¬
derwriter— George D. B. Bonbright & Co., Binghamton,
Miller

•

St., New York, N. Y.

Trustee, $10 per share.
Underwriters—Stone & Webster
Securities Corp. and White, Weld & Co.
Proceeds—To

working capital. Statement effective May 10.
Gulf States

(5/22)

19 filed

petitive bidding; preferred to be sold publicly or pri¬
vately through aj negotiated sale.
Probable bidders:
Merrill Lynch, Pierce, Fenner & Beane and Kidder,
Peabody & Co. (jointly); and Smith, Barney & Co. (for
bonds and common); Halsey, Stuart & Co. Inc. and
The First Boston Corp. (for bonds); Harriman Ripley &
Co. Inc. (for common). Probable underwriting for. pre¬
ferred may include:
Blyth & Co., Inc.; Merrill Lynch,

•

Golden Cycle Corp.,

Ltd., Winnipeg, Canada

April 10 filed 500,000 shares of common stock (par $1):
Underwriter—None.
Price—$1.50 per share; to increase
•

-Bonds

Colorado Springs, Colo.
May 8 (letter of notification) 17,168 shares of $10 par
value common capital stock (par $10).
Price—$17.25
per share.
Underwriter—None. Proceeds—To increase
capital and reduce bank commitments. Office—500 Carl¬
ton Bldg., Colorado Springs, Colo.
•

May 15 filed $3,000,000 of trust shares to be issued under

;

Bonds
•

Columbia; Ga;sr.£ystem, Inc.....Debentures
•

(letter of

of real estate and equipment.

•

-Bonds

June

Co.

$3,000,000' of first mortgage bonds, due
1980;
275,000 shares of common stock (par $3.50); and
100,000 shares of preferred stock (par $50). Under¬
writer—For bonds and common to be decided by com¬

1950

June

by amendment, along with interest
pay- bank loan
and for working

Power

Interstate

Preferred

Southern Ry.

$10 per share.

•

filed

capital.
April

13, 1950
Dallas Power & Light Co
Toledo Edison Co. noon (EDT)....

Realty & Equipment Corp.

notification) 25,000 shares.
Price—
Underwriter—None.
Proceeds—To pay
incorporation expenses and bank loans and for purchase

Proceeds—To

rate.

Bonds
—Common

(EDT)

a.m.

Not less than

Dunco

Co.—

June

•
Dumont Electric Corp.
May 16 (letter of notification) 62,500 shares of common
stock (par 10 cents).
Price—$3.50 per share.
Under¬
writer—Aetna Securities Corp.
Proceeds—For installa¬

May

1950
(EDT)

noon

California Gas Co.

Ltd.,

Western Canada.

of common

5 filed $4,000,000 of/ convertible debentures, due
-Underwriter—Butcher & Sherrerd, Philadelphia.

1965.

June

Corp. and State Street Research & Management
Underwriter—None. Proceeds—For general funds.

: <■

International Utilities Corp.

Common

California Electric Power Co
Southern

the

Business—To

•

June

10.

(Western)

Corp.

(par 10 cents).

May

con¬

$10,000,000 of notes, due 1960, with interest
first year, 2% in the second year, and
3% thereafter, and 249,993 shares of capital stock (par
$1). To be sold to 17 subscribers (including certain part¬
ners of Carl M. Loeb, Rhoades & Co., State Street Invest¬
Co.)

Common
Common

--Equip. Trust Ctfs.

6, 1950
Rockland Light & Power Co
Wisconsin Power & Light Co

Jan. 30 filed

ment

Common

Indiana & Michigan Electric Co

Exploration
Toronto, Canada

Bonds

Honduras, Inc

Rosefield. Packing

of Illinois.

Dome

Internacional Sociedad

Argentine corporation. No under-

Television

International

Price—To

held; rights

Price—$30
and for

Underwriters—D. F. Bernheimer
& Co.; Inc. and Hunter & Co., New York.
Price—-60
cents per share.
Proceeds—For expansion of operations
and for working capital.
Offering—Made to public on
May 18.
/://;:7
....;

1950

June

(The) Dean Co., Chicago
April 10 (letter of notification) 1,000 shares of common
stock.
Price—At par
($10 per share.
Underwriter—
Boettcher & Co., Denver and Chicago.
Proceeds—For
general corporate purposes. Offering—Only to residents

•

June

rate of

share.

Cladmetals

Gulf States Utilities Co.

indebtedness and for con¬

pay note

Comercial,

derwriter.

stock

Radiant Heater

United Mines of

to expire May 31. Underwriter—Morgan Stanley & Co.
and

May 29, 1950
Iron Corp

New York Central RR

Dayton Power & Light Co.
April 20 filed 283,333 shares of common stock (par $7)
being offered to holders of outstanding common May 10
at the

Co., Inc
Gloeckler (H.) Associates Inc

struction.

Fuel

June

filed

first mortgage

Ltd.

May 10 (letter of notification) 360,000 shares
Colorado

Light Co. (6/13)
$24,500,000 of first mortgage bonds, due
1980.
Underwriter—To be determined by competitive
bidding.
Probable bidders: Halsey, Stuart & Co. Inc.;
Equitable Securities Corp.; Lehman Brothers; First Bos¬
ton Corp.; Union Securities Corp.; Kidder, Peabody &
Co., Blyth & Co., Inc. and Merrill Lynch, Pierce, Fenner
10

Packers,

standing stock in Compania Swift
AnOnima

Common
Equip. Trust Ctfs.
Common

Wisconsin Power & Light Co

International

May 11 filed 2,000,000 shares of common stock (par $15)
and certificates of deposit for these shares which will
be offered on a share-for-share exchange basis for out¬

1950

(EDT)

noon

and other industries.

ance

-Common
Equip. Trust Ctfs.

May 25,
Co

(Joseph)

pay

working

Common

(EDT)

noon

Pro¬

Dallas Power &

May

1950

May 24, 1950
National Starch Products, Inc

Engineering Corp.
12 (letter of notification) 200 shares of common
(par $1), to be sold at $5 per share to Francis L.

stock

tional

•

Wabash RR.

fund

Price—100% of principal amount. Pro¬
mortgage, buy machinery and for addi¬
capital.
Business—Stampings and as¬
semblies for automotive, refrigeration, household appli¬

ceeds—To

(EDT)
Common
Pfd. & Common

a.m.

May 23,

Consolidated

May

California Electric Power Co

Iron

& Mfg. Co., Detroit

Inc., New York.

Preferred
Co.

Philip Morris & Co. Ltd., Inc

Corp. (5/29-6/2)
May 8 filed $3,000,000 of first mortgage and collateral
trust 15-year sinking fund bonds, due 1964. Underwriter
—Allen & Co.

common

holders at ap¬

share.
No underwriter.
Proceeds
Office—70 Pine St., New York, N. Y.

per

for working capital.

Colorado

Industrial Stamping

bonds, due 1967, with warrants to purchase 60,000 shares
of common stock.
Underwriter—P. W. Brooks & Co.,

Bonds & Common

(EDT)

a.m.

•

May 15 filed $500,000 of first mortgage 5% sinking

(EDT)

a.m.

Co., Pittsburgh, Pa.

Business—Department store.

Co.

Power

Ludowici-Celadon

stock

Preferred

Public Service Co.

Iowa

Clarostat

May 4

Equip. Trust Ctfs.

___

May 22,

41/2%
($100

(Joseph)

May 4 filed 38,462 shares of common stock (no

con-"

St., Decatur, Ind.

Manufacturing Co., Inc.
(letter of notification) 44,000 shares of

(5/25)
par), of
which 32,500 will be offered to public and 5,962 to em¬
ployees.
Underwriter—The First Boston Corp.
Price—
To be filed by amendment. Proceeds—For general funds.
Horne

-Equip. Trust Ctfs.

Pittsburgh & Lake Erie RR.

American

per

Proceeds—To retire bank loans and for working
capital.
" ■
/
pany.

1950

Missouri Pacific RR

struction.

Citizens Telephone Co., Decatur,
.April 27 (letter of notification) 3,000 shares of
preferred stock, non-convertible. Price—At par

18,

fund

Bell

Telephone Co.
May 2 filed 234,856 shares of common stock to be offered
stockholders of record May 26 at rate of one share for
each three held; rights to expire July 3.
Price—At par
($50 per share).
Underwriter—None.
Proceeds—For
expansion and

Inc.
(letter of notification) $250,000 of 5% sinking
debentures due 1962. Underwriter—The Ohio Com¬

May

10.

Suburban

(2087)

The Commercial and Financial Chronicle

March

(Walter

(letter

Continued

page

(2083)

The Commercial and Financial Chronicle

Continued
N. Y.

from

page

Peoples Gas Light & Coke Co.
May 8 filed 116,962 snares of capital stock to be offered

Proceeds—To assist in acquisition of 1216 shares

•of company's common stock.

one new

National Starch

May 4 filed

Products, Inc., N. Y. City (5/24)
unspecified number of shares of common

(par $1), estimated at 125,000 shares, to be sold by
stockholders.
Underwriter—F. Eberstadt & Co., Inc.
JPrice—To be filed by amendment.
Business—Adhesives
and starches.

; ,.y

England Gas & Electric Association v
April 17 filed 173,126 shares of common stock (par $8),
being offered to stockholders at rate of new share for
each eight shares held on May 5; rights expire May 26.

given

retail price of $14.50

investments

stock

per

• -'

ceeds to buy and

install milling machinery at Mai Pasa

Proceeds to be used to

Western

Coal

Oil

Ltd.,

ex¬

Read & Co.

Calgary,

Ala.,

for

common

stock

(no par)

(between $20 and $22

share)

Northern

Indiana

Public

offered

by T. Howard Green,

common

Small Loan Co., Inc.

Proceeds—For

Petroleum

writers—S.

Northern

(no par)

stock

Proceeds to

offered

the basis of

Provident

Co.

one

share. Underwriter—None. Proceeds—
property additions and improvements and

for payment of bank

Northern
,

;

Gas

stock

131,250 will be offered by the company and
16,875 by Max Stettner, President. Underwriter—Lester
Co., Los Angeles. Price—$3.50 per share. Proceeds—
To pay indebtedness and for general funds.
BusinessAssembly and sale of TV receivers, radios and radiophonograph combinations.
Company plans change in
name to Mercury Television
Mfg. Co.
8c

Refiners,

Ltd.,

Honolulu,

Hawaii

March 29 filed $750,000 of 6%

15-year sinking fund de¬
bentures, due 1965 and 500,000 shares of common stock
(par $1) to be offered in units of $3 principal amount
of debentures and two shares of common
stook at $5 per
unit to common stockholders of record
April 14 at the
rate of

one unit for each share.
Unsubscribed securities
will be retained by the
company and subject to future

issuance

writer.

Proceeds for construction

may

be subsequently determined.

American

Gold

Ltd., Toronto, Canada
July 20, 1948 filed 1,983,295 shares of common stock
(par
$1). Underwriters
£hare.

Proceeds

may

be brokers.

Price—45 cents per

Mainly for development. Statement

—

effective April 10, 1950.

Pennsylvania

Southern

Gas

Co.

May 8 (letter of notification) 500 shares of 6y2% cumu¬
lative preferred stock, series B.
Price—At par ($100
per share).
Underwriter—Bioren & Co.,
Phila., Pa.
Proceeds to reimburse company for
advances to'sub¬
sidiaries for capital improvements made and to
be made,
and for working capital. •
,
/

j..V •

/: i

:-J '

*■*">•

and

taxes

and

for

other

corporate

purposes.

Rockland

Light & Power Co.

May 5 filed 50,000
series A (par $100).

(6/6)

cumulative preferred stock,
Underwriter—To be determined by

stock

held

purchase plan.

These

the

re¬

•
Southeastern Factors Corp., Charlotte, N. C.
May 4 (letter of notification) 88,000 shares of common |
stock at $1 per share. No underwriter. Proceeds to in¬

business of purchasing accounts receivable. Office

crease

—112

Tryon St., Charlotte, N. C.

Southern

California

Gas

Co.

(6/7)

May 2 filed $25,000,000 of 27/s% first mortgage bonds,
1, 1980. Underwriter—To be decided by competitive bidding, along with the price. Probable bidders:
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.; Lehman

due June

Brothers; Harris Hall & Co. (Inc.); White, Weld & Co.;
Merrill Lynch, Pierce, Fenner & Beane; the First Boston
Corp.; Shields & Co.; Kidder, Peabody & Co. Proceeds—
construction

For

(EDT)

a.m.

•

reduce

indebtedness owing to
Bids—Expected at 11:30

Discount

Co., Atlanta, Ga.
(letter of notification) $250,000 of series E 5%

May 12

subordinated

loans.

June 7.

Southern

writer.

and

Lighting Corp., parent.

debentures

sold

par.

under¬

Proceeds for

working capital and to reduce bank
Office—220 Healey Bldg., Atlanta, Ga. /:,•

Southern Fire & Casualty Co., Knoxville, Tenn.
April 17 (letter of notification) 11,000 shares of capital
stock (no par).
Price—$10 per share. Underwriters—
Strader, Taylor & Co., Lynchburg, Va., and Buliington,
Schas &
Co., Memphis, Tenn.
Proceeds—To finance

growth and expansion.
Springfield City Water Co., Springfield, Mo.
April 7 (letter of notification) 2,000 shares of Series E
414% cumulative preferred stock (par $100).
Price—
$102 per share.
Underwriters—H. M. Payson & Co.,
Portland, and The Moody Investment Co., Springfield,
Mo.
Proceeds—To expand properties and pay indebted¬

•
Sterling Oil of Oklahoma, Inc., Tulsa, Okla.
May 12 (letter of notification) 14,447 shares of common

stock

(par 10 cents). Price—30 cents per share. Under¬
writer—Greenfield, Lax & Co., Inc.
Proceeds—To sell¬
ing stockholders.
Sudore Gold

Mines Ltd., Toronto, Canada
375,000 shares of common stock. Price—$1
per share (U. S. funds). Underwriter — None. Proceeds

June 7 filed
—Funds

will be applied to the purchase of equipment,
construction, exploration and development.

road

Sun Oil Co., Philadelphia, Pa.
May 1 filed 115,000 shares of common stock (no par) to
be issued under the 1950 stock purchase plan to about
11,000 employees of the company and its subsidiarie.3.
No underwriter. Proceeds for general funds.

Sweeney (B. K.) Co., Denver, Colo.
May 5 (letter of notification) 2,500 shares of

common

stock

(par $5).
Price—$24 per share.
UnderwriterPeters, Writer & Christensen, Inc., Denver.
Proceeds—
To buy land and buildings.
•
>J
•

Tennessee

Gas

Transmission

Co,

May 10 filed $600,000 of securities involving contributions
to be made by employees of the company under the
Thrift Plan. No underwriters, price or proceeds.
Texas

Electric

Service Co.

April 6 filed 65,000 shares of $4.56 preferred stock
par) offered in exchange for

(no

like number of outstand¬
share-for-share basis up

ing $6 preferred shares on a
including May 26; unexchanged $4.56 stock will
be publicly offered at $110 per share. Underwriters—
Kidder, Peabody & Co. and Merrill Lynch, Pierce, Fen¬

to and

ner

Beane,

New

York.

Proceeds—For

construction.

Statement effective April 26.

Toledo

Edison

Co.

(6/13)

April 18 filed 4,102,000 shares of common stock (par $5),
of which 400,000 will be sold by the company and the
remainder is being offered by The Cities Service Co. to
its own common stockholders at $9 per share at the rate

competitive bidding.

May 4 with rights to expire May 29. Underwriter—The
company's offering will be made under competitive bid¬

Probable bidders: W. C. Langley
Co.; Estabrook & Co. and Kidder, Peabody & Co.
(jointly): Lehman Brothers; Harriman Ripley & Co.,
Inc.; Stone & Webster1 Securities Corp.; Union Securities
Corp.; Salomon Bros. & Hutzler. Proceeds—To pay off
short-term bank loans of $2,100,000 and for construction.
Bids—About June 6.
•

Rosefield Packing Co., Alameda, Calif. (6/5)
May 12 filed 111,700 shares of common stock (par $3),
to be sold by 17 stockholders.
Underwriters—Stephen¬

one

ding;

Toledo share

for each

underwriter

Cities Service share held

named

for

the

Service

Cities

offering. Probable bidders: Blyth & Co., Inc.; W. C.
Langley & Co.; Merrill Lynch, Pierce, Fenner & Beane;
Lehman Brothers; Smith Barney & Co. Price—For 400,000 shares to be filed by amendment. Proceeds—To be
applied toward construction. Bids—Expected June 13 at
noon

(EDT). Statement effective May 9.

son,

•

purchaser lends the firm $100

Leydecker & Co., Oakland, and Barrett Herrick &
Co., Inc., New York.
Price—$8 per share.
Business—
Manufacturers of Skippy peanut butter.

No under¬

expenditures.
Com¬
refines and markets crude oil. Statement effective
May 4.
pany

Pan

Reid Brothers, Ltd., San Francisco, Cal.
April 3 (letter of notification) 10,000 shares of preferred
stock. Price
At par ($10 per share.)
Underwriter—
Denault & Co., San Francisco. Proceeds—To restore de¬
pleted stocks, buy new items and for additional working
capital.

(par 500)

.of which

Pacific

are

—

Co., Van Nuys, Calif.

Bismarck, N.

McNally & Co., Chicago
(letter of notification) 20,000 shares of com¬
mon stock (par $10). Price—$15
per share. Underwriter
—None. Proceeds—To be added to working capital. Of¬
fice—536 So. Clark Street, Chicago, 111.

to be opened in first week of June.

common

under

either

treasury or will
acquired. Statement effective May 1.

Rand

March

Telephone Co.
May 5 filed $60,000,000 of 34-year debentures, due 1984.
Underwriter—To be determined by competitive
bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Morgan
Stanley & Co. Proceeds—For redemption on July 14,
1950, at 104.375% of their principal amount, of $60,000,000 31-year 3y4%
debentures, due 1979. Bids—Expected
Pacific Cabinet & Radio

Co.,

April 19 (letter of notification) 12,500 shares of common
stock (par $10) being offered directly to stockholders
record April 25 at $20 per share; rights to expire
July 1.
No underwriter.
Proceeds to maintain
the
proper ratio of capital and surplus to liabilities in con¬

debts

Bell

April 24 filed 168,125 shares of

Insurance

Address—Box 336, Park City, Utah.

Offering—Expected in June.

Northwestern

Life

1970.
Underwriters—To be determined by competitive
bidding.
Probable bidders: Halsey, Stuart & Co. Inc.;
Biyth & Co., Inc.; The First Boston Corp.; Kidder, Peabody & Co. Proceeds—For expansion and to repay prom-

; issory notes.

underwriter.

•
Queen Esther Mining Co*
May 10 (letter of notification) 375,158 shares of treasury
common stock to be offered
pro rata to stockholders at
2V2 cents per share. No underwriter. Proceeds—To pay

Co.

May 9 filed $40,000,000 of serial debentures due 1953-

Bismarck, N. D.

loans. Statement effective May 3.

Natural

share.

nection with entering the accident and health insurance
field. Office—Broadway at Second,

per

Proceeds for

per

expire

Price—$31.50

secure

necessary capital and surplus to form
an old
line legal reserve insurance company.
Office—
26 W. First Ave., Mesa, Ariz.
<" ~
" *" " •

new share for each eight shares
held;
May 22. Unsubscribed shares to be
ottered to employees of company and its subsidiaries.
on

Statement

•

April 13 filed 304,500 shares of common stock (par $10),
being offered to common stockholders of record May 3

-rights

Proceeds—

Producers Life Insurance Co., Mesa, Ariz.
April 11 (letter of notification) 112,500 shares of common

by amendment. Proceeds—For

Gas

subsidiaries

and

effective June 27, 1949.

stock

record

*' •/":

Natural

Corp.

ness.

Canada

—

construction.

Toronto

Office—213

Cranwell & Co., New York.
administration expenses and drilling.

For

May 29 at the
rate of one share for each six held. Rights expire about
June 19. Underwriters
Central Republic Co., Inc.;
BIyth & Co., Inc., and Merrill Lynch, Pierce, Fenner &
Beane. Price—To be filed

Ltd.,

capital.

April 25, 1949, filed 1,150,000 shares ($1 par) common
of which 1,000,000 on behalf of
company and 150,000 by
New York Co., Ltd.
Price—50 cents per share.
Under¬

Service

stockholders

par.

Power

Vice-President of the company. Underwriter—Faroll
8c Co., Rogers & Tracy and Snieids & Co., Chicago.
9

(Pa.)

working
High Street, Pottstown, Pa.

May 12 filed 422,000 shares of

syndicate of nine underwriters

May 8 (letter of notification) $100,000 of 5% debenture
bonds due July 1, 1967.
Underwriter—None.
Price—

be sold at the market price

per

shares.

May 9.

Pottstown

•

Coal Corp., Chicago
notification) up to 2,000

Power

Price—$14.50 per share. Pro¬
bank loans and for construction. State¬

pay

ment effective

Illinois

(letter

Inc., heads

unsubscribed

ceeds—To

and current liabilities.

Electric

Co., Wash., D. C.
April 21 filed 710,700 shares of common stock (par $10),
being offered to holders of outstanding common stock
of record May 9 at the rate of one new share for each
five held; rights to expire May 25. Underwriter—Dillon,

.April 6^filed 2,200 basic units of $250 face amount each
of production trust certificates, or an aggregate principal
-amount of $550,000, Canadian funds. Underwriter—Israel
and Co., New York City.
Price—$123.75 (U. S. funds)
per $250 unit. Proceeds—For equipment, working capital

(par 20 cents)

Oil

Thursday, May 13, 1950

Jan. 27 filed 119,700 shares of common stock (no par) to
be offered to officers and employees of the company

Pacific

Potomac

Development Co., Washington, D. C.

No underwriter.

Northern

common

to be issued to Robert N. Cooper,
City, in exchange for five unpatented mining
claims.in Piute County, Utah.
No underwriter.

Canada

May

common

Plough, Inc., Memphis, Tenn.
(letter of notification) 9,931 shares of

stock

plore and develop oil and mineral leases.

Salt Lake

March 28 filed 600 shares of capital stock (no par.) To
offer only sufficient shares to raise $1,000,000 at $5,000

North

•
Plumbic Mines Co., Salt Lake City, Utah
Ma.y 12 (letter of notification) 20,000 shares of common

mine.

share.

one

stockholders May 19 at
for each six shares now

common

writer.

9
New Western Industries, Ltd., Las Vegas, Nev.
May 8 (letter of notification) 125,000 shares of $1 par
value capital stock, at $1 each. No underwriters. Pro¬

per

seven

stock owned by The Plough Credit
Union, to be sold to
employees of corporation at $10 per share.
No under¬

Statement

effective May 8.

Norlina Oil

1950, at the rate of
held* Underwriter—None.
5,

May 12

share for the sale
further

subsidiaries.

June

held and one preferred for each 15 common shares
pres¬
ently held; rights are to expire June 5. Underwriters—
Lehman Brothers and Glore, Forgan & Co. Price—To be
filed by amendment. Proceeds—To reduce bank loans.

of the stock. Proceeds—To pay bank loan and for
common

rate

Allyn & Co.; Townsend Dabney
Durst; G. H. Walker & Co.;
Draper, Sears & Co.; C. L. Putn.vi & Co.; Smith, Ramsey
& Co. Price—$13 per share. Participating dealers have
been

share for each

(par $5) to be offered to

Dealer Managers—A. C.

Wagenseller

record

Philip Morris & Co., Ltd., Inc. (5/22)»
April 28 filed 130,610 shares of cumulative preferred
stock (par $100) and 333,077 shares of common stock

New

Tyson;

Price—At par ($100 per share). Proceeds—To buy addi¬
tional common stock in Texas Illinois Natural Gas Pipe¬
line Co. and to pay $10,000,000 of bank loans.

stock

stockholders

Sinclair

Ryerson & Haynes, Inc., Jackson, Mich.
May 9 (letter of notification) 2,500 shares of common
stock (par $1) to be sold by Harry A.
McDonald, Detroit,
at $12 per share. Underwriter—McDonald-Moore &
Co.,
Detroit.

Transport Management Corp., Atlanta, Ga.
May 11 (letter of notification) 1,000 shares of common,
stock to be sold at par ($100 per share), providing each
and

either furnishes the funds

tees the
chaser
No

3% unsecured note

satisfactorily guaran¬

loan of another $100

must

arrange

underwriter.

transport

Santiago-Alaska Mines, Inc.
April 11 (letter of notification) 1,000 "production certifi¬
cates" of $100 face value, at $90 each.
No underwriter.
Proceeds for current accounts,

Office—Commercial

Seneca Oil

per share.
Thus the pur¬
for funds of $300 gross per share.

Proceeds

furnish

funds

qualify

•

ment.

supplies and for develop¬
Bldg., Ketchikan, Alaska.

Co., Oklahoma City, Okla.
April 27 (letter of notification) 225,782 shares of class A
stock (par 500).
Price—$1.25 per share. Underwriter—
Genesee Valley Securities Co., Rochester, N. Y. Proceeds
—To acquire properties and for
working capital. / '

insurance

exchange.

Address—c/o

Georgia

Highway Express, Inc., DeKalb Ave. and Krog St., At¬
lanta, Ga.
Trav-ler Radio Corp., Chicago
April 28 filed 315,000 shares of common stock
of

which

company

240.000

and

writers—Straus

share.

will

75,000
&

sold

(par $1)

by three officials of the

by the company. Under¬
Chicago. Price—$6.25 per
indebtedness, lend funds for

Blosser,

Proceeds—To

expansion to

pay

subsidiary, and to equip

Offering—Being made publicly today.

a new

addition.

■

;

|
>

olume 171

•

Number 4908

...

Arkansas Power &

Light Co.
expects to market $6,000,000
of mortgage bonds in August or September, the proceeds
to be used for construction.
Probable bidders: Halsey,
Stuart & Co. Inc.; Equitable Securities Corp. and Cen¬
tral Republic Co. (jointly); White, Weld & Co.; First
Boston Corp. and W. C. Langley & Co. (jointly); Lehman
Brothers; Union Securities Corp.; White, Weld & Co.;
Merrill Lynch, Pierce, Fenner & Beane,

United

Cigar-Whelan Stores Corp.
400 shares of common
stock (par 30 cents).
Price—At market (about $3.12^
per share).
Underwriter—To be sold on the New York
Stock Exchange through James H. Oliphant & Co. Pro¬
ceeds—To redeem outstanding scrip certificates.

May

Feb. 8 reported

(letter of notification)

"United Mines
March 16

of Honduras,

Inc.

(6/1)

(letter of notification) 200,000

shares of com¬

(par 50 cents). Price—$1 per share. Under¬
writer—Willis E. Burnside & Co., Inc., New York City.
stock

mon

mining properties on which company has options; to
pay loans and for working capital. Office—North American Building, Wilmington, Del. Expected June 1.
Vieh

Ohio

Columbus,

Co.,

(letter of notification) 19,500 shares of common
stock at $10 per share. Underwriter—-The Ohio Co. Pro¬

May 8

buy the assets of Brodhead-Garrett
working capital.

ceeds—To

for

Co. and

Washington Gas Light Co.
May 8 filed 30,600 shares of $4.25 cumulative preferred
stock (no par) to be offered to common stockholders of
May 31, 1950, at the rate of one preferred share
comomn shares held. Underwriter—Johnston,

record

for each 20

kemon & Co., Washington, D. C., and eight others. Price
—To be filed by amendment. Proceeds—For corporate
purposes,

including construction.
Inc., Denver, Colo.

Western Oil Fields,

May 5 (letter of notification) 600,000 shares of common
stock and a $50,000 note carrying interest at 4% payable
percentage of oil sold.
This note will carry with
a bonus 500,000 shares of stock.
Price—Of stock,

from

Underwriter—John G. Perry & Co., Den¬

250 per share.

Proceeds—To

ver.

drill

for

oil

Wyoming

and for

working capital.
Uranium

Western

Vancouver,

Cobalt Mines,

Ltd.,

filed

outstanding 2,927,021 common
shares at the rate of one new share for five now held.
Price of stock to be filed by amendment.
Underwriter—
For bonds to be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Glore, For-

to be sold to holders of the

& Co. and Equitable Securities Corp. (jointly); Leh¬
Brothers and Salomon Bros. & Hutzler (jointly);

Merrill

Lynch, Pierce, Fenner & Beane;

First Boston'

Corp.; Union Securities Corp. and Harriman Ripley &
Co., Inc.
Proceeds—$10,850,000 for partial payment for
electric properties to be acquired from a subsidiary,
Wisconsin Gas & Electric Co., and the balance for capital

improvements. ■

Expected early in June.
&

Gas

Wisconsin

Electric

Co.

being

changed to Wisconsin Natural Gas Co.) .
May 5 filed $3,500,000 of first mortgage bonds, due 1975.
Underwriter—To be determined by competitive bidding.
Probable-bidders:
Halsey, Stuart & Co. Inc.; Glore,
.

Brothers; Equitable Securities

Corp.; Union Securities Corp.; Merrill Lynch, Pierce,
Proceeds—For redemption on or about

Fenner & Beane.

July 10, 1950, of the 33,425 outstanding shares of

4%%

preferred stock at $105 per share plus accrued dividends.
Wisconsin Power & Light Co. (5/25)
May 8 filed 320,231 shares of common stock (par $10) to
be offered for subscription by stockholders at the rate
of one new share for each five held on May 24.
Price
—To be filed by amendment.
Proceeds—To finance
construction program.
Underwriter—Smith, Barney &
Co. and Robert W. Baird &

Co., Inc.

(6/6)
May 8 filed $8,000,000 of first mortgage bonds, series D,
Wisconsin Power & Light Co.

due 1980.

Securities Corp.;

Underwriter—To be determined by competi¬

Probable bidders: Halsey, Stuart & Co.
Inc.; First Boston Corp.; Salomon Bros. & Hutzler; Equit¬
able Securities Corp.; Lehman Brothers; Glore, Forgan
& Co., Harriman Ripley & Co. and Harris, Hall & Co.

tive bidding.

Telephone Co.
April 21 company reported planning early registration
of 175,000 shares of preferred stock, the proceeds to

(jointly); White, Weld & Co. and Kidder, Peabody & Co. (jointly); Union Securities Corp. Proceeds—
To repay bank loans and for construction. Bids—Ex¬
pected to be opened June 6.

son

& Curtis; Mitchum, Tully &

ley & Co.; Equitable Securities Corp. and Union Secur¬
ities Corp. (jointly); Shields & Co. and Salomon Bros. &

Blyth & Co., Inc.; First Boston Corp.;
Gas Co.

26, William G. Woolfolk, Chairman, announced
expects to make another offering of its
common
stock during the current year, probably this
summer.
It may involve 304,485 shares to common stock¬
holders on a l-for-10 basis.
Probable bidders: Glore,
company

& Co. and W. C. Langley & Co. (jointly);
Blyth & Co., Inc.; Lehman Brothers; The First Boston
Corp,
Proceeds—To increase investments in stock of
Michigan Consolidated Gas Co. and "Milwaukee Gas

Forgan

•

mortgage
Stuart &

initial series of this

conditions

be convertible into
be used in part

considered

are

preferred stock which

new

common

satisfactory,

stock.

Iowa

March

•

may

Morgan Stanley & Co.

Kansas

Lorillard

Louisiana

Columbia Gas System, Inc. (6/20)
May 4 the directors authorized the sale of $110,000,000
of 25-year debentures at competitive bidding, subject to

Lehman

Ludowici-Celadon

Office of Alien Property,
Y., for the sale, as an
entirety, of 1,812 shares of common stock (par $50),
which represents about 7% of the 26,000 shares now
issued and outstanding.
Company manufactures roof¬

Brothers;

Lynch, Pierce, Fenner & Beane.
Proceeds—
Stuart M. Crocker, President, said $92,500,000 of the
proceeds would be used to retire $14,000,000 of 1%%
serial debentures and $77,500,000 of 3Vs% debentures
The balance of $17,500,000 will be

for the System's

ing tile and tile slabs.
•

available

It is presently

construction program.

total new money require¬
$26,500,000.
Accordingly, after
the'sale of this issue of debentures, there will remain
for

1950 will be

approximately $9,000,000 to be
of financing later in the year.
stockholders

York, Inc.

outstanding.

(jointly); Drexel & Co.; Glore, Forgan

It is anticipated

construction pro¬

Dayton Power & Light Co.
April 20, it was revealed that company plans
75,000 shares of preferred stock (par $100) to
construction, if favorable market conditions
Underwriters—Morgan Stanley &
Co.
.

Langley & Co. (jointly);
M. Loeb, Rhoades & Co.

to; sell
finance
prevail.

body & Co., and

& Co. and W. C.

Kidder, Peabody & Co.; Carl
—SV-.:V
.

Milwaukee Gas Light Co.

Stuart & Co. Inc.;
Glore, Forgan & Co., and Leh¬
man Brothers
(jointly); Kidder, Peabody & Co.; Harriman Ripley & Co.; Smith, Barney & Co., Kuhn, Loeb &
Co. and Blyth & Co., Inc. (jointly).
;< 2
•
evolved.

Harriman Ripley & Co., Inc., as the

••

Probable bidders—Halsey,

Dillon, Read & Co. Inc.;

Gatineau Power Co.

Brickley, trustee of International

plans to issue
to 30,000 shares
with SEC), the

$13,000,000 of first 4%s due 1967 and $2,000,000 of 7%
preferred stock, to fund some $8,500,000 of bank loans,
and for new construction.
No definite plan has been

Co.; W. E. Hutton &

Hydro-Electric System, announced that he has selected
Merrill Lynch, Pierce, Fenner & Beane; Kidder, Pea-

Lehman

April 18 reported contemplating issuance of additional
securities, the proceeds of which will be used to finance

Expected in June.

May 2, Bartholomew A.

—

Loeb, Rhoades & Co.; Lehman Brothers. On preferred
stock: Smith, Barney & Co. and Goldman, Sachs & Co.

short-term loans, of

$257,000,000 will be needed for the
gram over the next four years.

which $16,000,000 are now

Traditional underwriters
Sachs & Co.

Co.; White, Weld & Co.; Drexel & Co.; Harriman Ripley
& Co. Inc. and Union Securities Corp. (jointly); Carl M.

require approximately $90,000,000 of "new money"
through the sale of securities. No permanent financing is
contemplated before this fall, however, and current ex¬

that

preferred stock.

Metropolitan Edison Co.
Feb. 9 company informed SEC it intends (in addition to
current financing) to sell in September, 1950, $4,000,000
bonds and $2,000,000 preferred stock. Probable bidders
on bonds: Halsey, Stuart & Co. Inc.; Kidder, Peabody &

Tapscott, Chairman, said the company

penditures are being financed by

& Co.

April 10 it was announced company
$1,000,000 mortgage bonds (in addition
of 51/2% preferred stock filed April 24
proceeds to be used for expansion.
^

shares of cumulative

Consolidated Edison Co. of New

(R. H.)

Maine Public Service Co.

provided by some form

approved creation of 500,000
preferred stock (par $100) of which
company plans to sell 250,000 shares. A group of under¬
writers, headed by Kidder, Peabody & Co. and The First
Boston Corp., are expected to offer the stock.
30

Macy

Brothers; Goldman,

Commercial Credit Co.
March

May 8 it was reported that company is considering issu¬
ance of $10,000,000 of new securities, either debentures

estimated that the System's
ments

Co., Chicago, III. (5/22)
to 11 a.m. (EDT) on May 22.

by the Attorney General at the
120 Broadway, New York, N.

Merrill

due in 1971.

Light Co.*

Bids will be received up

1950. Probable bidders for
& Co. Inc.; Salomon Bros. &

Co.;

Power &

was

in State in June.

Underwriters—Under present
for the issue is expected to

Lehman Bros,

announced company plans to issue and sell
$9,000,000 of preferred stock, the proceeds to retire
approximately $6,000,000 of $6 preferred stock outstand-r
ing .at $110 per share and the balance to pay for expan¬
sion program. Probable bidders: W. C. Langley & Co. and
First Boston Corp. (jointly); Blyth & Co., Inc.; Equitable
Securities Corp.; Kidder, Peabody & Co. and Merrill■
Lynch,. Pierce, Fenner & Beane (jointly); Lehman
Brothers; Union Securities Corp. Registration statement
expected to be filed with SEC on May 23, with bids late

—

Stanley

Co.

$12,000,000. Traditional underwriters:
Smith, Barney & Co.

May 3 it

common

Brothers, Goldman, Sachs & Co. and Union Securities
Corp. (jointly); Morgan Stanley & Co.

Morgan

(P.)

and

Inc.; Shields & Co. and R. W. Pressprich & Co. (jointly);.
Merrill
Lynch,
Pierce,
Fenner
& Beane;
Lehman

Hutzler;

application with Missouri P. S.
$15,000,000 of 30-year

April 4, Herbert A. Kent, President, said: "It may be
necessary to do some financing" before Aug. 1, 1951 to
redeem $6,195,450 of 5% bonds due on that date and
for additional working capital to meet expanded sales
volume.
He added that company plans to pay oft its
bank loans in full by July, 1950. These loans now amount

preferred stock, the proceeds to be used to pay for
Underwriters
May be named by
competitive bidding.
Probable bidders: Blyth & Co.,

the approval of the SEC.
plans competitive bidding
be held about June 20,
debentures: Halsey, Stuart

H. Walker & Co.

City Power & Light Co.

cost of construction program.

System, Inc.
to reclassify the 500,000
shares of unissued common stock (no par) into 500,000
shares of unissued preferred stock (par $50). They also
approved a proposal to amend the company's charter
so as to permit the public sale of common stock with¬
out first making an offering of the shares to its own
common stockholders. The company's program currently

construction costs.

with SEC Is

Glore, Forgan & Co. and W. C. Langley & Co.
(jointly); White, Weld & Co.; Shields & Co. and Central
Republic Co. (jointly)Lehman Brothers and Bear,
Stearns & Co. (jointly); The First Boston Corp.; Equi¬
table Securities Corp.; Smith, Barney & Co.; Kuhn, Loeb
& Co.; Salomon Bros. & Hutzler and Union Securities
Corp. (jointly); Harriman Ripley & Co.
Proceeds are
to be used to retire $4,822,500 of bank loans and toward

Net proceeds would

$10,000,000 of additional

reported that early registration

Inc.;

stockholders voted

mortgage bonds due 1980 through competitive bid¬
ding. Probable bidders for bonds: Halsey, Stuart & CkK

for expansion of the business, including
Probable underwriters:

sale

> >

first

company

the

Electric Co.

Commission for permission to issue

Columbia Gas

for

1980.
Probable bidders: Halsey,
First Boston Corp.; Union Securities

May 10 company filed an

announced it plans to sell additional
Traditional underwriter: Lee Higginson
Corp. Proceeds are to fund bank loans ($1,200,000 at
Feb. 28, 1950).

calls

(6/19)

due

underwriters: First Boston Corp. and G.

mortgage bonds.

Electric Co.

expected of an offering of about $18,000,000 preferred
and common stocks through a negotiated deal. Probable

Citizens Utilities Co.

April

bonds

Co. Inc.;

expansion program.

additional production facilities.

April 25

Michigan

Corp.; Harriman Ripley & Co. Inc.
Bids are expected
to be received /,on June
19. Proceeds would be for

Celanese Corp. of America
April 12 the stockholders voted to authorize the creation
of 1,000,000 shares of a new preferred stock (par $100),
505,000 shares of which can be issued at any time.
Plans are being formulated for the issuance this year,
market

April 28 it was announced that this company plans to
sell at competitive bidding $20,000,000 of 30-year first

Natural

April

Light Co.

Paine, Webber, Jack¬

Co.

Georgia Power Co.
April 11 it was reported that the company may refund
its $101,271,000 3%% first mortgage bonds due 1971 held
privately by 27 insurance firms. Probable underwriters:
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.; or First
Boston Corp.
Feb. 21 company reported to be planning $6,000,000 ad¬
ditional financing before the end of 1950; $18,000,006
more in
1951, and $16,000,000 more in 1952.
Probable
bidders: Halsey, Stuart & Co. Inc.; Morgan Stanley &
Co.; Drexel & Co.; Lehman Brothers; Harriman Ripley
& Co., Inc.; Shields & Co. and Salomon Brothers &
Hutzler (jointly); Blyth & Co., Inc.; Union Securities
Corp. and Equitable Securities Corp. (jointly).

will

May 10 it was reported that the company may refund
its $80,000,000 3V2% first mortgage bonds due 1972. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; Morgan Stan¬

that

underwriters:

Bangor & Aroostook RR.
April 18 ICC approved debt rearrangement plan ^which
provides that outstanding $16,665,000 consolidated re¬
funding mortgage 4% bonds due July 1, 1951 be ex¬
tended to 1976 and redesignated as first mortgage (con¬
vertible) 4%% bonds. The plan will become effective
if accepted by 75% of the 4% bonds.

American

Traditional

costs.

Stone & Webster Securities Corp.;

May 15, Ralph H.

Alabama Power Co.

Hutlzer (jointly);
Lehman Brothers.

construction

finance

pro¬

Indiana

Associated

in connection with the

$5,000,000 of Gatineau stock will be disposed of.

to be received sometime in July.

(Inc.)

•

First Boston Corp. Registration state¬
23, with bids

SEC expected to be filed May

ment with

syndicate for negotiations

posed disposition of shares of Gatineau Power Co. stock
owned by International in accordance with part two
of the trustees second plan. It is expected that at least

(name

■

Forgan & Co.; Lehman

The proceeds would be used to retire out¬

above).

standing $7 and $6 preferred stocks at $110 per share
and to finance expansion.
Probable bidders—First Bos¬
ton Corp. and W. C. Langley & Co. (jointly); Equitable
Securities Corp. and White, Weld & Co. (jointly); Union

Dillon, Read & Co. Inc.:

Wisconsin Electric Power Co.

man

B. C., Canada
shares of common

800,000

May 5 filed $15,000,000 of first mortgage bonds, due 1980,
and 585 405 shares of common stock (par $10), the latter

gan

-Arkansas Power & Light Co.
;
May 3 announced company plans to sell $15,500,000 of
preferred stock (in addition to $6,000,000 bonds referred

capital stock
(par$l). Price—35 cents per share. Underwriter—None.
Proceeds—Exploration and development work.

Feb.

company

antimony mine which produced
antimony for the U. S. Metals Reserves Corp. during
the war and to explore and develop the Montecilo
Proceeds—To reopen an

•

(2089)

The Commercial and Financial Chronicle

Continued

on vaae

(2090)

The Commercial and Financial Chronicle

Pacific

Continued, from page 45

Petroleum, Ltd. (Canada)
announced it plans to file with SEC,
additional shares of common stock shortly.%
Proceeds (U. S. currency) will be used for further
April 12
1,000,000

Mississippi Power & Light Co.
May 3 it was announced that company plans to issue and
sell $8,500,000 of preferred stock, the proceeds to be
used to retire outstanding $6 preferred stock at $110 per
share

the balance for construction

and

bidders:

Probable

costs.

preferred stock

shares.

There

Power

were

amount in

(par

$50)

presently

tion with

April

April
of

reported

common

Television

National

the

72,993

400,000

$2,636,900

income

noon (EDT) on May 18 for
purchase from it of $10,000,000 equipment trust
certificates to be dated June 1, 1950, and to mature

$1,000,000 each June 1 from 1951 to and including 1960.
Probable bidders: Halsey, Stuart & Co.
Inc.; Salomon
Bros. & Hutzler; Harriman
Ripley & Co. Inc.; Lehman
Brothers.

deben¬

Hamp¬

Central Maine Power Co.

common

stock to raise approxi¬

mately the same amount of money. Probable bidders:
Blyth & Co., Inc. and Kidder, Peabody & Co. (jointly);
Coffin & Burr, Inc.; First Boston Corp.; Harriman
Ripley
& Co. Inc. and Goldman, Sachs & Co.
(jointly); The
proceeds will be used to pay bank loans.
New
Feb.

York Central

RR.

(6/1)

reported that offering of $11,100,000 equipment
trust certificates is expected on June 1.
Probable bidders: Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutz¬

ler; Harriman Ripley & Co., Inc. and Lehman Brothers
(jointly).
New York State

April 27 it

was

Electric

announced

Gas

Corp.

that this company plans to

sell later this year or
early next year serial preferred
stock or debt securities or a combination of them.
The
exact

method

financing has not been determined.
will require approximately $30,000,000
money to complete its construction program through

The

company

new

1952.

Bell

Telephone Co.

April 17 announced company is preparing to sell $60,000,-

Co.

Inc.; Morgan Stanley & Co. Proceeds—To be ap¬
plied toward redemption of $75,000,000 3V4% debentures
due 1979.

Registration—Expected early this month.

Public Service Electric & Gas Co.
April 17 stockholders approved the issuance of $90,000,000 new bonds for the purpose of refunding $50,000,-

000 3y8%

1968;

Notes
Granite

City

Co.

due

1970

and

blower

Weeks

underwriters.

Financing

ica and

im¬

Reading Co. (5/25)
Bids will be received

750,000

2,700,000!

convertible preferred stock

(par $20) to

common stock
stock in the hands of the

common

addition, 800,781
by Sunray. «

Barnsdall

common

shares!

Tampa Electric Co.
April 25 it was announced company plans to raise
$4/700,000 in new money through sale of additional
securities, the proceeds to finance
struction expenditures.
/
/

part

1950

con¬

•

Tennessee Natural ' Gas Lines,
Inc., Nashville* '
Tennessee -■ • * < -;* : ■.• / May 10 announced plans to expand its pipe line facilities.
The cost of the proposed
project is estimated at $764,807,
To be financed by the sale of
75% of bonds, the balance
"itfbe paid out of treasury funds.
••

Texas Eastern Transmission
Corp.
company applied to FPC for permission to build
a
new
791-mile pipe line to
supply New England and
the Appalachian and Seaboard
areas, estimated to cost

May 5

$117,800,000.

This

new

project will be financed through

Texas

the company's office

at Room

May 8 it

Illinois

Natural

Gas

PipelinenCo.

that

announced

this company's
financing
contemplates the sale of $90,000,000 of bonds
and $12,000,000 of interim notes in addition
to the sale,
of 1,750,000 shares of common stock
(of the common
stock 50% is to be purchased
by Peoples Gas Light &
Coke Co.). Probable bidders:
(1) for bonds—Halsey,'
was

program

Stuart

Co.

Inc.; .and (2) for interim notes—White,'
Glore, Forgan & Co.

Weld & Co. and
•

Tide Water Power Co.

May

stockholders

were

reported

increase in the authorized
shares from 500,000 shares.
an

Union Securities

common

have

approved

stock to

Traditional

1,000,000

underwriters:

Corp.; W. C. Langley & Co.

Toledo Edison Co.

May 9 it
and

sell

was announced

$7,500,000

that the company plans to issue
first mortgage bonds in

additional

December, 1950, and probably additional common
sometime during 1951, the proceeds to be used
to
plete expansion program.
This is in
posed issuance of 400,000 common

addition

stock
com¬

pro¬

shares, bids for which
expected around June 13.
Probable bidders: Halsey,
Stuart & Co. Inc.; W. C.
Langley & Co.; Kidder, Peabody
are

Co., White, Weld &

Co. and Merrill Lynch,
Pierce,
(jointly); First Boston Corp. and Glore,V
Forgan & Co. (jointly); Lehman
Brothers, Harriman
Ripley & Co., Inc., Bear, Stearns & Co. and Carl M.,
Loeb, Rhoades & Co. (jointly); Smtih, Barney &
Co.;,
Fenner & Beane

Uhion Securities Corp.
•

equipment trust certificates, series S, to be dated June
15, 1950, and to mature in semi-annual instalments of
$181,000 each on Dec. 15, 1950, and on June 15 and Dec.

early in June of

company and part to

15 in each year

—A;

thereafter to and including June 15, 1965.
Probable bidders: Halsey, Stuart & Co. Inc.; Salomon
Bros. & Hutzler; Lee Higginson
Corp.; Harriman Ripley
& Co., Inc., and Lehman Brothers
(jointly); Harris, Hall
& Co. (Inc.).

Schering Corp.
May 4, it was announced that the company's entire com¬
mon
stock issue (440,000 shares) was
expected to be
registered with the SEC in the
sale

near

future and offered

the

highest bidder by the Office of Alien
Probable bidders: A. G. Becker & Co. (Inc.),

Union Securities

Corp. and Ladenburg, Thalmann & Co.
(jointly); Merrill Lynch, Pierce, Fenner & Beane; Kid¬
der, Peabody & Co.; F. Eberstadt & Co.; Allen & Co.;

new

to be formed by United States & Inter¬
national Securities Corp.;
Dillon, Read & Co.; F. S. Mose¬
ley & Co.; Riter & Co.
company

with

and

for additional working capi¬

the tal.

the Guardian Life

Board.
The proceeds are to be

used to

stock,

part

undetermined

the

proceeds

Tom Kyranis Opens

the

equine.; Lee Higginson

Corp.; Lehman Brothers and
Pomeroy, Inc. (jointly); Salomon
^ Tlmtzler; Harris, Hall & Co. (Inc.).

Schoellkopf, Hutton

Worcester County Electric Co.
April 25 company reported

planning issuance of $10,- v
00Q,£00 first mortgage bonds. Probable bidders:
Halsey, '
Stuart & Co. Inc.; Harriman
Ripley & Co., Inc.; Lehman
Brothers; Kidder, Peabody & Co.; First Boston
Corp.; :
Mg«fill, Lynch, Pierce, Fenner & Beane.

FRANCISCO,
I. Long

Street to act

City.

Wall St., New
York,
noon
(EDT) on May 24 receive bids '
purchase from it of $5,220,000 equipment trust
certificates, series C, to be dated June 1,
1950, and to "
mature in 15 annual installments from
June 1, 1951 to
June 1, 1965, inclusive.
Probable bids: Halsey, Stuart &

with

York

common

N.M., will until

George

New

for the

formed

Street,

will

•

Tom Kyranis is engaging in a
securities business from offices at
Wall

amount

which

Wabash RR. (5/24)
The* company at its office at 44

George Long Co. Formed
SAN

selling stockholders. Underwriters
Allyn & Co., Inc. and Rauscher, Pierce & Co. '

E. A. Bessom

(Special to The ^Hjnancial Chronicle)

Insur¬

Co. of America, according to
John N. Marshall, Chairman of the

Tucker's (Mrs.) Foods* Inc.,
Sherman, Tex.
May 13 it was reported that registration is expected

Calif.—

Co. has

been

ogices at 100 Bush
as

% dealer in securi¬

Corp.

(Special to The Financial Chronicle)

SALEM,

Mass.—E.

Corporation is engaging in
curities
127

business

Margin

from

Street.

Bessom
a

offices

Officers

se¬

at
are

placing privately through Glore, retire all term indebtedness and He was formerly President of the ties.
George I.^Long is principal Earl A. Besson, President and
Forgan & Co. an issue of $5,500,- bank loans, for plant expansion
of the firm.
Kymar Trading Co., Inc.
Treasurer, and Albert Adelson.

of;

exchange for 900,000 shares of

423, Reading Terminal, Philadelphia 1, Pa., up to noon
(EDT) on May 25 for the purchase from it of $5,430,000

ance

not

minent.

Prudential Insurance Co. of Amer¬

Privately
Steel

1965,

bonds

Probable bidders:

•
Raytheon Manufacturing Co.
May 12 company was understood to be planning the issu¬
ance of additional common
stock, probably with Horn-

notes dated May 1, 1950

1965; $10,000,000 3y4% bonds due

$15,000,000
Halsey, Stuart & Co.
Inc.; Morgan, Stanley & Co. and Drexel & Co. (jointly);
Kuhn, Loeb & Co. and Lehman Brothers (jointly); First
Boston Corp.

May

due

bonds due

$15,000,000 3%

bonds due 1972.

and

Granite City Steel
The

(jointly); First Boston Corp.,
Bosworth, Sullivan & Co. (jointly);
Brothers; (2) for debentures: Halsey, Stuart &
Co. Inc.; Blyth & Co.,
Inc., and Smith, Barney & Co.
(jointly); First Boston Corp.; Kidder, Peabody & Co.;
(3) for both issues: Lehman Brothers; Harris, Hall & Co.
(Inc.). Proceeds are to finance expansion.
Boettcher & Co. and

Lehman

000 3%%

Glore, Forgan Places

of Colorado

000 debentures are expected to be sold about
mid-year.
Probable bidders: (1) for preferred:
Glore, Forgan & Co.
and W. C. Langley & Co.

Property.

000 of new debentures at
competitive bidding during the
first week of June. Probable bidders:
Halsey, Stuart &

Co.

on increasing authorized
preferred stock (par $100) from 300,000 shares to 375,000
shares; the additional 75,000 shares, in addition to $7,500,-

for

Northwestern

Service

the sale of bonds and other securities.
Probable under¬
writers: Dillon, Read & Co., Inc.
!

Public

owned

are

May 22 stockholders will vote

about

sufficient number of shares of

—

new*

of Barnsdall Oil Co.

pres¬

the

stockholders approved

sell 200,000 shares of Public Service Co. of New
a

exchange, share for share, for

total

publicly offered at approximately
by an underwriting group headed by East-1
Dillon & Co. These will be in addition to

be issued in

authorize

Ave., New York, N. Y., until

New England Public Service Co.
April 7 SEC authorized company to file an application to
or

Pittsburgh & Lake Erie RR. (5/18)
Bids will be received by the company at 466 Lexington

Corp.

stock

voted

balance of 1950 construction program.

Co.

$37,000,000 new
financing will be required to pay construction costs
estimated at $40,000,000 for 1950 to 1952. Present plans
are
to issue in late summer or early fall $10,000,000
bonds and 50,000 shares of preferred stock.
Probable
bidders:
(1) For bonds—Halsey, Stuart & Co., Inc.;
Harriman Ripley & Co. Inc.; Lehman Brothers;
Kidder,
Peabody & Co. and White, Weld & Co (jointly); Union
Securities Corp. and Salomon Bros. & Hutzler (jointly);
Otis & Co.; First Boston Corp.; Merrill Lynch,
Pierce,
Fenner & Beane; Carl M. Loeb, Rhoades &
Co.; F. S.
Moseley & Co.; Equitable Securities Corp.; (2) for pre¬
ferred:—W. C. Langley & Co.

common

stockholders

outstanding 4^% preferred stock. It is expected not
75,000 shares of series preferred stock will be sold
1950 or early 1951. Traditional Underwriters
First Boston Corp.; Drexel & Co. Proceeds—To finance

shares.

due May 1, 1952, together with interest thereon
amounting to $635,790, and provide additional working
capital, by issuance of evidence of indebtedness not to
exceed $3,500,000, Probable underwriters: Kneeland &
Co.; Glover & MacGregor.

shire

the

market

public.

in late

tures

;.-r New England
Power Co.
April 24 it was estimated that

June

•(

stock will be

shares of

over

Fireproofing Corp.

plan to refinance

the

^man,

ent

increasing author¬
from 75,000 to 150,000

planning offering of
share.

common

stockholders
common

acquisition from Peftnroad Corp. of De¬

is to be offered in

stock at $1 per

April 6 debentures and

the

Halsey, Stuart
Inc.; Morgan Stanley & Co.; First Boston
Corp.;

Co.

(jointly).
Sunray Oil Corp.
May 10, it was announced that subject to approval

100,000
additional shares of series prefgerred stock and
12,000
additional shares of 4^2% preferred stock. Latter issue

May 1 the bondholders voted to increase the aggregate
principal amount of bonds which may at any one time be
outstanding to $40,000,000 from $20,000,000.
Kalmus

Union Securities Corp. and Drexel & Co.

Pennsylvania Power & Light Co.

Beane.

Natalie

Kuhn, Loeb & Co.; Kidder, Peabody & Co. and Drexel &
Co. (jointly); First Boston Corp.
—

outstanding

Utilities

from treasury funds. Invitations to bid for
the new bonds
expected to be sent out about May 29, calling for
bids
to be expected June 15. Probable bidders:
are

similar'

troit, Toledo & Ironton RR. If sold under competitive
bidding, probable bidders are:>Hatee'y, Stuart & Co. Inc.;

Probable underwriter: Merrill Lynch, Pierce, Fenner &
Montana-Dakota

company is planning to refund
of its $12,474,000 St. Louis Division first
mortgage 4% bonds, due Jan. 1, 1951, by issuing a like
amount of new first
mortgage bonds. The remaining
$2,474,000 of St. Louis Division bonds would be retired

to .raise
a

1951.

(6/15)

was announced

$10,000,000

Pennsylvania Co.
May 4 it was reported that the company may issue $16,000,000 of collateral trust sinking fund bonds in connec¬

Co.

to vote

Southern Ry. Co.

May 2 it

have informed him of their intention to
public distribution of these shares at earliest

publicly offered. Company also expects
$3,000,000 in new money later this year and

RR.

States

Brothers; Union Securities Corp. and Equitable Securi-i
ties Corp. (jointly); Harriman
Ripley & Co. Inc.

group

6, last,

(5/18)
May 15 the company applied to the ICC for authority
to issue $4,125,000 equipment trust certificates to be due
serially in l-to-15 years. Probable bidders: Halsey, Stuart
& Co. Inc.; Salomon Bros. & Hutzler; Harris, Hall & Co.
(Inc.); Harriman Ripley & Co. Inc. and Lehman Brothers
(jointly). Expected May 18.
Mountain

practical date, which may be shortly after Aug. 6. A. C.
Allyn & Co., Inc. and Bear, Stearns & Co. headed this
group. The 500,000 shares of common stock are being
split-up on a 3V2-for-l basis, all or part of which will

late in June.

May 17 stockholders

Power

Probable bidders: Morgan Stanley &
Co., Kidder, Peabody & Co. and Merrill Lynch,
Pierce/
<**Fenner & Beane (jointly); Blyth & Co., Inc.; Lehman

purchasers who acquired company's 500,000 shares

make

$7,500,000 mortgage bonds, the proceeds to be used to
construction. Probable bidders: Halsey, Stuart
& Co. Inc.; Glore, Forgan & Co.; Equitable Securities
Corp. and Shields & Co. (jointly); Merrill Lynch, Pierce,
Fenner & Beane; W. C. Langley and First Boston Corp.
(jointly); Union Securities Corp.; White, Weld & Co.
and Kidder, Peabody & Co. (jointly). Registration state¬
ment expected to be filed with SEC on May 23 with bids

ized

was reported to be
planning issuance
of approximately 1,000,000 additional shares of common1

of common stock from American Power &
Light Co. on

Feb.

finance

•

Pacific

of 16

Mississippi Power & Light Co.
6 reported company may be in the market with

Pacific

Co.

company

Un-©

•-

Light Co.
April 13, Paul McKee, President, disclosed that

Feb.

Missouri

t\:ii.

•

(jointly); Blyth & Co., Inc.; White, Weld & Co. and Kid¬
der, Peabody & Co. Equitable Securities Corp. and
Shields & Co. (jointly); Lehman Brothers;
Uniop Se¬
curities Corp. Registration statement expected to be filed
with SEC on May 23 with bids late in June. This financ¬
ing is in addition to proposed issuance of $7,500,000 mort¬
gage bonds (see below).

•

Southern

May 11

expan-j stock late in July.

sion and development work in the Alberta oil field.

derwriter—Eastman, Dillon & Co.

& Co. and First Boston Corp.

Langley

•

company

Thursday, May 18, 195(

...

Volume 171

Number 4908

...

The Commercial ancTTinancial Chronicle

(2091)
tional buyers to become interested
much below

long

panies

2.70 "basis, it is not

before, the

distributors

back in there bidding "on the last

Competition
Co.'s

fob

Ohio

Edison

two

back

suggested

approach

business¬

than,
as
some are disposed to term
it, "bid¬
ding for glory£ With four bids
entered
only about 29 cents a
What

bond

happened in the corporate

new

issue

not

ness.

the

But, if it tends to make for

market this week may

bit

deliberation

The

the

formulation of bids for future

new

usually

happens

back

resistance

inclined

are

lic

potential buyers to
investment
bankers

low-yields,

complain

which
this

was

issues

new

their

let

and

the

levels.

own

bonds

question

the

complain

which

recent

both

dearth

several

offerings,
with

this

the

bulk

vailed

same

the

offering

Directors

has

declared

the Preferred

both

the

Preferred

sion

covering

bonds and
The

record at the close of

854

conditions

business

pre¬

day

New York, N. Y„ May 16,

THE

ALABAMA

bid

International TV Stk.

for

four

other

Sh.

coupon

above

101.06599.

101.2653

Offered at 60c

2%%

cents

the

bids

June

York,

SOUTHERN
COMPANY

Y.,

May

16,

Stcck
to

has

been

declared

stockholders

May

ness

29,

at a

1950.

the

Bernheimer, &

Co.

Inc.

Pre¬

Southern

June 28,
close of

MAHER,

received

the

business

was

33 Pino Street, New York

1950,

moving out rapidly.

cents)

COMPANY

engaged

West

soundly operated
public utility com-

Coast

20,

share,

payable June
stockholders of

1950, to

June 7, 1950.

dividend of

15tf per

fer books will

the close of business

Checks will be mailed.

on the
outstanding Com¬
Stock, payable June 20,
1950, to stockholders of record
on June 12,
1950. The trans¬
mon

the Common Stock of Atlas

per

Stock of

been 'declared

record

Bruce H. Wallace, treasure
New

York, May 17, 1950.

be closed.

not

Corporation.

manufacturing

has

clared

May 26,

the Preferred

the par value of $62.50 per

the close of business

quarterly dividend of $1.00

DUBUQUE, IOWA

A* fegular quarterly dividend of
40tf
share has been declared, payable

Walter A.

Securities

Preferred Dividend No. 3
A

COMPANY

was

Southern California Edison

share.

OTIS
ELEVATOR

Common Stock

mand and

Treasurer4

1950.

26,

The Board of Directors has de¬

ternational Television Corp. com¬
per

May

Notice of Common Dividend

1950

J. B. McGEE

Secretary-Treasurer

Dividend No. 34
on

Broadway

New York 6, N. Y.

May 15,1950.

June 20, 1950, to holders of record

The, corporation
the
business
of

5,N,Y.

^ported in brisk de¬

-cents

busi¬

Atlas Corporation

wisewas

June 14, 1950.

ness

COMPANY

to stock'

the close ofbusi^

Checks will be mailed.

per

(par

holders of record

POWER

and Hunter & Co., both of New
York, are publicly offering "as a
speculation" 360,000 shares of In¬
stock

payable June 29, 1950,

Com¬
mon
Stock of the Company, payable
on
June 12, 1950, to shareholders of record at

bond

per

thirty five (35^)'
share has been declared,

Secretary.

helpful when it came to
marketing. Repriced at 102.129 to
yield about 2.77%, this issue like¬

mon

May 11,1950,

INTERSTATE

less than the highest.;

ing

Treasurer.

1950.
J.

lowest

CjORPORATI'ON

1950.

meeting held today, declared a quarterly

the Ordinary

the

FLEMING, '
Secretary

Tennessee
TtNMSSlt CONKMATkOM

CHARLES E. BEACHLEY,

payable

record

RICHARD T.

PITTSBURGH

COAL

close of business

May 29, 1950,
A dividend of $4.00 per share

May 26, 1950.

dividend of 50 cents per share on the

Company has been declared payable
1950, to stockholders of record at the

28,

This indication of similar think¬
D.

of business

lowest

abotff 33 cents

cents per share on the Com¬
pany's capital stock, payable June 15,
1050, to stockholders of record at the close

CONSOLIDATION

the

But

The Board of Directors has declared a divi- *
dend of 75 cents per share and an additional

dividend of 50

cents

■

COPELAND, Secretary

GREAT

RAILROAD

TEXAS GULF SULPHUR C0MPANT

The Board of Directors ol

1950, payable June 14, 1950, to stockholders of
on May 22, 1950.
L. du P.

opened

Monday.

A dividend of

Here, with six bids received, the
successful group^paid the issuer
52

calls for

GUS MRKVICKA,

July 10, 1950;

DIVIDEND NOTICES

On May 16, 1950, a dividend of seventy-five
(754) per share was declared on the
Capital Stock of Newmont Mining Corpora¬
tion, payable June 14, 1950 to stockholders of
record at the close of business May 26, 1950.

on
the $5.00 par value Com¬
the second interim dividend for

addi¬

stock.

financing outlined which

record at the close of business

Railroad

101.591

sale

due

are

issues

stock.

company has a program of

Stock

New

Co., involving $17,500,000
first mortgage 30-year bonds.

about

projected

common

275,000

common

Bids
both

to stockholders of

dividend of $4.00 per share on
ferred Stock of The Alabama Great

about

the
tendency to over-old
seeking such issues but, in
spite of the reluctance of institu-

the

Securities and Exchange Commis¬

and

tional

Stock—$3.50 Series,

payable July 25, 1950,

mon

this

$1.12'/

Stock—$4.50 Series .and 87y2<j:

Electric

periodically

Board

regular quarterly dividends of
on

ca§@^5$ the smaller
Oklahoma
Gas
&

the

with

registration

issuance of $3,000,000 of new

bonds

cents

& Company

Wilmington, Delaware '. May 15, 1950
The

Oklahoma Gas & Electric
Much the

settled

company's

contained

the

Corporation

E. I. ou Pont de Nemours

(Spoilt)

one

assured

issue

data

Dividend No.

also

greeted

seemingly
quick placement.

about a point under the
original
offering prices.
Bankers

at a price
interest to

thf$

bankers

Newmont Mining

reported to have encountered

instances the result has been that
the

with

brisk .demand

bonds

accrued

contrast

they had acquired through

medium

seek

loose

and

interest

Well, currently two groups have
fit to turn

bids, a|l for the
101.659; 101.-

indicated 2.764%.

other

DIVIDEND NOTICES

first

101.4523.

102V4
In

pricing and markets.

seen

30-year

today

with

DIVIDEND NOTICES

were

subscription

yield

about

the effects of competitive bidding
on

and

meet

Officials of Interstate Power Co.

The
bonds
were
reported
scheduled to be reoffered for pub¬

because of the

Co.'s

coupon,

6199

situa¬

and

which captured the

group

terest rate. Other

tions of this kind, when offerings

begin to

demand.

here tomorrow to review statistics

Interstate Power Co.

Edison

same

stock

slated

are

from

mortgage bonds paid the company
a
price of 101.74 for a^7/s% in¬

issues, the cost could prove ulti¬
mately to have been small.

preferred

tive preferred stock, was
reported
to have attracted
very substantial

Ohio Edison Bids

Ohio

big

California

Brought out yesterday this un¬
dertaking, involving 1,000,000
shares of $25 par value cumula¬

lowest.

especially

cheering
to
people in the underwriting busi¬

the highest

separated

Co.'s

Southern

offering.

rather

Edison

$58,000,000 ./bonds a day

apparently extremely

success

up-tick."

are

popular with investors around the
country judging by the reported

are

Oscar solberg,

Peterson, Treasurer

May 15, 1950

May 12, 1950

Treasurer

and

selling home television re¬
ceivers, using 16-inch and 19-inch
picture
sold

tubes.

under

the

Its

receivers

brand

name

DIVIDEND NOTICES

are

"In¬

I. Case

ternational."
The net proceeds are to be used
for working capital and

purchase

of additional

Company

(Incorporated)

equipment and

com¬

ponent parts.

Manufacturers of

;

Racine, Wis., May 15, 1950 * *
A dividend of $1.75 per share
upbh the out¬
standing Preferred Stock of this Company has
been declared payable July 1,
1950, and a divi¬
dend
of
75c
per
share upon the outstanding
$25 par value Common Stock of tl)ts Company
has

been

declared

holders of

12,

record at

payable
the

July

close of

'It

1950,

business

June

1950.
WM. B.

PETERS,;Secretary.

REEVES BROTHERS, inc.

Tiling
Company, Inc.
The

Board

BRICGS & STRATTON

Direc¬

Dividend

the Common Stock,

payable May 31, 1950, to stock¬
holders of record

on,May 24,1950.

The

Board

Company on May
16, 1950, declared a quarterly divi¬
dend of eighty-seven and one-half

SECURITY ANALYST

Directors

has

declared

payable
1950, to stockholders of

the

business

1950. The transfer books

Company will not be closed.
J. E. REEVES, Treasurer

quarterly dividend of twenty-five cents (25c)
share and an extra dividend of fifteen
cents

(15c)

Wisconsin

share,

per

privilege

Corporation,
stockholders

less

payable
of

2.75

dividend

(without

stock

Treasurer

Cyanamid

June

of the

May 15, 1950.

per

c. w. thorp, jr.

The Board of Directors of Ameri¬
can

per

capital
PREFERRED DIVIDEND

record

DIVIDEND

today declared

July 3,

CORPORATION

Stock

notice

quarterly dividend of 25c

share has been declared,

Common

quarterly dividend of 12 Yz cents

dividend
A

Encaustit

Company

fBuKCStiSmAnowl

TILE

American

tors has

American Cyanamid

WALL &

FLOOR

par

per

tax,

June

the

1950,

15,

record June 1,

cent

value)

1950.

L. Q. REGNER, Secretary.

May 12, 1950.

May

16, 1950

cents (87j/2<!) per share on the out¬

standing shares of the Company's
3V2% Cumulative Preferred Stock,

AVAILABLE

Series

•

A, payable July 1, 1950, to
the holders of suchHstoiik of record
at the close of business June 12,
1950. ;
;.V
■:, .
;

Special Bulletins

the

Maqnavox

iviaa

company

AND

TELEVISION

The Board of Directors of Ameri¬
•

Cyanamid

can

Market Letters

•

1950, declared a quarterly divi¬
dend
of
sixty-two
and
one-half

(62»/2<0

per

the out¬

standing

shares of the Common
Stock of the Company, payable July
1, 1950, to the holders of such stock
of record at the close of business

Portfolio Analysis

June

Service Busy Wire &

12,

DIVIDEND
THE GREATEST NAME

KYLE,

the

MEETING

NOTICE

$1.00

American

Woolen

were

Box

511,

Commercial and

Place, New York 7.

Central

Railroad

Company

Albany, N. Y., April 17, 1950.
The

declared:

regular quarterly dividend of
per share on the $4 Cumulative

Convertible
York

payable

Prior

Preference

be lawfully brought before the

meeting, will be held in the Ball Room of the

Transfer books will not be closed.

Hotel Ten Eyck, 87

Dividend checks will be mailed

Meeting 6f the Stockholders of
The New York Central Railroad Company, for
the election of Directors and of three
Inspectors
of

Election

business

and
may

the

transaction

such

other

StateJjJreet, in the City of
Albany, N. Y., on Wednesday, May 24, 1950, at
12 o'clock Noon, Eastern "Daylight Time.
Stockholders of
reconjUn&^Ao'cIock P. M„ on

April 21, 1950, will be entitled

vote

the
New

Guaranty

Trust

Board

Magnavox

by
Company of

declared

The

the

this

payable
of

June

Corporation
15, 1950

June

record, at the cl<»e

1950. v

quarterly cash dividend of $.37(4 per
(or the equivalent in sterling at
the rate of exchange on date of payment
to
of
holders
record
residing
in
the
United
Kingdom)
on
the
outstanding
share

Convertible

dividend of

STOCK

25 cents

per

share,

payable June 1,1950 to stockholders
of record

May 15,1950.

COMMON
A

dividend of

STOCK

25 cents per

this

Cor¬

quarterly cash dividend of $.50 per
(or the equivalent in sterling at
exchange on date of payment
to
holders
of
record
residing
in
the
United
Kingdom)
on
the
outstanding
Common
Stock of
this
Corporation has
b°en
declared payable June 30,
1950 to
rate of

stockholders

business

President

of record

May 9,1950

Stock

share,
payable June 15,1950 to stockholders

May 25,1950.

Preferred

poration has been declared payable June
30, 1950 to the stockholders of record at
the close of business on June 2, 1950.

the

R. A. O'CONNOR

T reasurer.

May 17, 1950.

Directors

Company

CLASS

F. S. CONNETT,

meeting.

following dividends:

York.

the

JOSEPH M. O'MSHONEY, Secretary.

business

Stcck

declared

The

Stock

15,
1950 to stock¬
holders of record June 1, 1950.
June

regular quarterly dividend of
$1.75 per share on the 7% Cumu¬
lative Preferred Stock payable July
14, 1950 to stockholders of record
July 1, 1950.

Annual

Preferred

been

meeting of the Board of

Company, held today, the following

dividends

cash dividend of $1.12%
equivalent in sterling
exchange on date of pay¬
holders of record residing in the
Kingdom)
on
the
outstanding
the

the stockholders

ATr
Directors

New

Prior

Secretory

United
has

Heavy Correspondence

The

NOTICE

IN WOOLENS"

R. S,

quarterly

per share
(or
at the rate of
ment

1950.-

Financial Chronicle, 25 Park

FOX FILM CORPORATION

RECEIVERS

May

16,

cents
•

Company

TWENTIETH CENTURY-

"NC RADIO-PHONOGRAPHS

MAKERS

COMMON DIVIDEND

of
June

record

the

1950.

DONALD A. HENDERSON,
Treasurer.

(2092)

The Commercial and Financial Chronicle

propriated

by Congress to helf
salaries and expenses of pos-^
tal employees, for only a handfuf

BUSINESS BUZZ
on.
Behind-the-Scene Interpretation*

•

arX

pay

of employees are
actually paid;
specifically
for
postal
savings
work, this being incidental to their

•

Full text of Commercial and Financial Chronicle : May 18, 1950, Vol. 171, No. 4908

FRASER