Full text of Commercial and Financial Chronicle : May 21, 1959, Vol. 189, No. 5848

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1959

MAY 20

ESTABLISHED 1839

Commercial^

«

IU». U. 8. P*t. Office

Volume 139

Number 5848

New York 7, N. Y.,

Thursday, May 21, 1959

Price 50

Cents

a

Copy

EDITORIAL

1959-60

:
"

As
•

l

We

See It

By DR. GORDON W. McKINLEY*
Director

message to
"I

Congress which read in part

as

follows:

1959

frequently requested legislation to
deliver our farmers and taxpayers everywhere
fro7n the mounting failures and staggering ex¬
cesses
of the mandatory farm price support and

between

that

can

not

get

dent

rightly be

has

to

say

on

,the subject.

Much

crease

involved, however, and it is well to look
info

more

My remarks
two

on

parts.

the business

incredably

The President

is

which

and

look

May 13 continued with this

of

may

to

re¬

toward

bottom

of

the

rate

in

1958

to

$453

a

the

than

first

1958

quarter

in

rate

in

of
the

billion.

You

have

perhaps read comments in the

Continued

on

press

page

30

dark

already

by Dr. McKinley before the 11th Annual Business
sponsored by Rutgers University and the Sales Execu¬
tives Club of New Jersey, New Brunswick, N. J., May 14, 1959.

are

afforded

a

Now all

cnanes

low
we

recession
all

are

those clouds have passed
Business is booming, and the
trend continues upward.
The shal¬

w. *>ue*

away.

did

very

not

snowball

pleased

with

into

the

a

depression, and
our economic

way

on

32

page

♦An address

by Mr. Buek before the ABA's Second Southern Trust
Conference, Birmingham, Ala., May IS, 1959.

our

"Securities

in

Registration" Section, starting

on page

38.

UNDERWRITERS

Municipal

BROKERS

and

STATE

DEALERS

AND

MUNICIPAL

Lester, Ryons & Co.
623 So. Hope Street, Los

State, Municipal

INDUSTRIAL

Bonds and Notes

CORN EXCHANGE

Offices in Claremont, Corona del Mar,

Burnham

and

15 BROAD STREET, NEW

San

Diego, Santa Ana, Santa Monica

inquiries Invited
California

STOCK EXCHANGES

YORK 5, N.Y.

•

Dl 4-1400

Bond Dept.

Teletype: NY 1-708

the

Pasadena, Pomona, Redlands, Riverside,

OF NEW YORK

Company

MCM9CRS NEW YORK AND AMERICAN

BOND DEPARTMENT

Encino, Glendale, Hollywood. Long Beach,

SECURITIES

THE FIRST NATIONAL CITY BANK

y/

Exchange

UTILITY

FOREIGN

BANK
30 BROAD ST.,

i

Associate Member American Stock Exchange
Members Pacific Coast

PUBLIC
&

Housing Agency

Members New York Stock Exchange

BONDS

RAILROAD

Public

Angeles 17,

California

IlAnover 2*3700

New York

on

Southern

Securities

Chase Manhattan
BANK

Correspondent—Pershing & Co.

TELETYPE NY l-22«2

CABLE: COBURNHAM

•

more

and

Housing.

CHEMICAL

Underwriter

declined

complete picture of issues now registered with the SEC and poten¬

tial'undertakings in

bond department

.

The stock

address

Securities
telephone:

days.

points,

U. S. Government,

State and

Invest."

SECURITIES NOW IN REGISTRATION—Underwriters, dealers and investors in corporate
securities

in

Public

to

Continued

♦An

30

had

100

Time

difficult time to invest.

fourth quarter. In the first quarter of

1959, national output reached a $465
billion annual rate, topping the pre-recession peak by $20

were

Its

purposes.

"NOW Is Always the

and business was
heading more rapidly downward.
Steel mills were closing, unemploy¬
ment was rising, and the automobile
industry was praying for better luck
in 1958. Many observers saw in our
economic situation the ingredi¬
ents which in former years had led
us into depressions.
It was indeed a

recovery was

billion

their

was

Difficult

market

rapid, so that total national
output rose from a $427 billion an¬

Gordon W. licKlnloy

for

Those

end

the

Conference

page

Most

as

reached

was

Thereafter, the

nual

expected to reach 1,500,000,000
an investment
of three and
one-half billion dollars in the next fiscal year.
Final proof of the present program's utter
failure
on

choose

punchline

and

conditions

equities

1957, we ran an advertisement in news¬
and the select magazines which trust companies

preliminary

a

yielding

In October of
papers

Second, I want
year,

advised to

are

highest

avers oncoming plethora of
breakthrough will fully justify today's high
price-low yield investments.

in the fourth

next

up

appear

The

the

unreliable, trust banker

scientific

divided

the

f

New York

due, and that the high D-J index and former indicators
are

probable

during

business

recession

promising to

very

bushels and to involve

\

the

expect

draw

of

1960.

April.

are

DEALERS

can

to

business

■'

Continued

will be

discuss

ahead

estimate

failure of all — and the
problem requiring the most urgent attention—is
the wheat program.
Surplus wheat stocks are
already two and one-half times our annual domes¬
tic consumption for food. By July 1 of next
year
these stocks

we

attempt

dramatic

most

to

business

quarter of this year.

they
on

consumer

mainder of 1959, with particular em¬
phasis on the rate of national output

of programs.

account of the wheat program:

of

course

once

naive,: costly

program or set

outlook

First, I want

Vice-Preaidervt

Trust Company of

prefer the
with
selection bias favoring management.
Also, to utilize
fixed-income securities with maturities just long enough
to enhance current income, and to leave some common
stock buying power in reserve as may be allowed in
equity-bond ratio for each individual account. Convinced
that a chronically high stock market level lies ahead,
though downward correction fluctuation is long over¬
most

purchases. Compared to end of 1959, the projection for
the end of 1960 postulates a
$7 billion rise in capital
spending and a $15 billion drop in housing.
into

States

Trustmen and other investors

our

increase of $4 billion and $15 billion rise in

to

this,

grossly political

"The

in
no

program

more

opines year-end 1959
to

first and fourth

much disturbed by what the Presi¬

very

economist

Executive

United

price inflation

billion

could well

one

of

reappearance

quarter are expected
inventory decline, $3.5 billion in¬
capital expenditures primarily going for replace¬
change in exports, total government spending

$1

ment,

Since there is nothing

described,

so

and

$485 billion—close

1959's

be:

to

Government."

good.

1960,

of excellent business health for

high annual 4%
average growth trend —and fourth quarter 1960 GNP
will be at an annual rate of
$508 billion. The changes

Unless this pressing
squarely met and resolutely dealt with,
the next few years will see the
surplus problem-,
because of its staggering cost to
increasingly frus¬
trated and impatient taxpayers, crash
of its own
weight, carrying with it all that is sound and good
in the support
of agriculture by the Federal

is sound and

and

rate will be

issue is

that

Company of America, Newark, N. J.

prognosis

a

problem, Prudential's

production control program.

well ask what there is in the

Economic and Investment Research

By CHARLES W. BUEK*

Offering

havei

One may

of

Prudential Insurance

Under date of May 13 last, the President sent a

Now Is Always the Host i
Difficult Time to Invest

Net

Distributor

To

Maintained

Markets

Active

Dealers,

Banks

and

Brokers

Dealer

T. L.Watson &Co.

british columbia

CANADIAN

Municipal Bonds

•

ESTABLISHED

1832

oil lands

•

Members

it

Inves tm<

Block

Inquiries

Canadian

Se curitres

Stock

Exchange

......

*

.*.

Exchanges

Economy

STREET

NEW YORK 4, N. Y.

<£>QUthlV€At COMPANY
DALLAS




DIRECT

WIRES TO

Goodbody

&

•

PERTH AMBOY

115 BROADWAY
NEW YORK

CHICAGO

t,

(orporahoh

Co.

1 NORTH LA SALLE ST

;

DEPARTMENT

MONTREAL AND TORONTO

MEMBERS NEW YORK STOCK EXCHANGE
BRIDGEPORT

MUNICIPAL BOND

Doxdooji Securities

.

BROAD

\

Expanding

DEPARTMENT

Teletype NV 1-2270

•><:•

25

FIRST

CANADIAN

»

"

:

for California's

BONDS & STOCKS

Invited

Commission Orders Executed On All

New York Stock Exchange

American

com./wu.

Mnnk of Atttctrtai
40

Exchange Place, New York 5, N. Y.

Teletype NY 1-702-3

WHitehall 4-8161

NATIONAL

JAVSINGS ASSOCIATION

300 Montgomery St.,

San Francisco, Calif.

The Commercial and Financial Chronicle

.

.

Thursday, May 21, 1959

.

(2298)

2

For Banks. Brokers,

The

Dealers only

If it's Over-the-Counter

'

Security I like Best

This WePk's

Forum Participants and

Their Selections "

Alabama &

Standard Uranium Corp.—Charles K

each week, a different group of experts
field from all sections of the country
participate and give their reasons for favoring: a particular security^:

Louisiana Securities

A centinnoas foram in which,

...

*

:

la the investment and advisory

Try "HANSEATIC"

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

Jank, President, Frank'
Kpowlton & Co., Oakland, Cal%

(The articles contained in this forum

Because you can

be

sure

of

they to be regarded,

are

Speed

ploration indicate

JANK

E.

CHARLES

as an

Nationwide Wire System

Standard Uranium

Primary Markets in more

From

the

marketed

"boom"

of

there

are
■

basic

American Stock Exchange

120 Broadway, New York 5
Teletype NY 1-40

WOrth 4-2300
BOSTON

PHILADELPHIA
Private

Wires

CHICAGO

•

SAN FRANCISCO

•

to

Principal Cities

^

Corporation
M

o

In

•

Charles

choice

£.

Jank

INSURANCE

1

ferred

debentures

stock,

or

pre¬

no

.

CO., Inc.

of

base

metals

Claims

the

in

Liquid

Cxports—Imports—Futures

to

Silverton

at

show

uranium
_

Big Buck
ment

is

expected

cash flow equal to

a

company s

Fcr Banks, Brokers and Dealers

operation at

(estimated by managebetween $1.5 to $2

to

be

ings reported to be $411,000 net)
when the development work has
been completed, in approximately
two and one-half years.
With a
strong financial position and a
solid

GESTETNER, LTD.
"A" Reg.*

foundation in uranium

pro-

duction,
the
company
is
well
along the way toward a balanced,
diversified
operation
in
base
metals, oil and natural gas.
a
Standard

Uranium Corporation
incorporated in 1954, during
highly speculative uranium
"boom," to acquire a group of

was

..the

A British growth company w itli

position in the office

proven
claims in the San Juan
district of Mpab, Ut^h, The com-

pany
these

machine industry.

concessions

in

stock,

Standard

now has
6,248,942 shares
outstanding. The initial indebted-

Bought—Sold—Quoted

ness

has

been; retired and the
in excellent mine
Pr°Ven

giade,

*

l. McCORMICK

p
.

.

,

u

v

branch offices

pur

J A PANE S E

ailt

-Research Deparlme t

.

STOCKS

^

Dallas Rupe & Son, Inc., Dallas, lex.
Member: New York Stock Exchange

For

Associate Member: American Stock

mately

Call

in the

ers

envied

namic

to

it

the

enter

as

is

one-half

and

metals

base

currently

in

a

>

c o m

market,

for

entering

decline

than

at

! in its
its peak".

of

operating profitably
prices. Obviously,
a
higher price would be highly
profitable to Standard.;
in

acres

of

owns

a

lease

of
Lynn
a

northern

Colorado, which has
production since the late

shown

,

Since

1920s.

1949,

the

area's has

been opened to most of the major

companies,

with

General

as

of

a

For...

ex¬

man¬

4-.

McCormick

company,

takes

or

it

what

FACTORING

build

to

through greater con-

Talk

sumer

Pieance Creek Basin

the

ac-

acceptance of present products, the ability to make kindred
acquisitions and the knowledge to
transfer;these ideas into increased
sales, earnings and. earnings per
share. At the helm of Plough, Inc.
is its founder, Abe Plough, who
has guided the company since its
organization to where :, it is a

50,000

on

//

Broadway,N.Y.6COrtlandt7-5680

lished

p

capable

at current metal

Standard

til

;

agement who
possess a keen
understanding

Standard's management feels it is

capable

^

'

;

ceptionally

industry

an

rather

Tokyo, Japan

Brokers.& Investment Bankers

record

result

state and there is much to be said

L .!

'

Yamaichi Securities Co., Ltd,,

drug

primarily

depressed

York, Inc.

Affiliate of

dy¬

been

has

years.

excellent time

seem an

of New

industry. (See
table below.)
This

write

Securities Company

even

the

in

information %

or

Yamaichi

Plough, Inc. is one of the lead-

geo-

least

will net approximately

two

This would

current

'■
2 • L Exchange
Plough, Inc.

[A,KX l.

ton before taxes and deple-

a

Petro-

leum having major gas-production
As the Pieance area is a

here.

Request

future. No market problem for gas

over
over

company

low
.32 %
.32%

liipe

ore

nmVmim
urahium

h'gh

averaging
Tn
In

content.

IMMex* Urtaluto^orp^ration^ on
Col-U-Mex's

Alfred L. Vanden Broeck&Co.
Members: New York Stock

Exchange

58 Liberty St., New York 5
Teletype NY 1-4638

initial
as
a

claim

Bufck

Big

the venture

major

ore

south

operator, developed
tffe

In

1958,
Col-U-Mex

reserve.

of

serve

blocked out

was

wholly

owned

estimated,

on

of

an
re-

ground

by Standard.

reserves

appear to be

the

of

Standard

area,

extension

proven
to Canada

holdings.

celebrated

jp

iea5es

the

San

foresee

*

ais0

company

has

•

•

to

Talcott:

Accounts Receivable

^

(Non-Notification)
•

1 nventories

•

Machinery

•

la

Installment Sales

•

v

;
;

l

v

Factpring (Notification
Non-Notification)

and

50th

its

Basin

Juan

Gas

and

line.

Pacific

Northwest

new

ment

of

and

ideas

several

'

develop¬

for

areas

include:

to

capitalize

'•>■

•!

■

v

Pioneered in Aspirin Re- r
Development: Plough, :

(1)

Pipe¬

these

on

-

j^ew Mexico with El Paso Natural

search and

NEW YORK

Modest

income is derived Inc.
introduced
its
St.
Joseph
wells in the Garmesa Aspirin in 1921, and it ranks secarea of Colorado, where Standard
ond;today in adult aspirin sales,
produces in a joint* venture for

221

from two gas

sale

to

Pacific

Northwest.

,

JosePh Aspi *n

^

dren:
A

prime factor

For

several

years

®*.

FOURTH AVE., NEW

845,000

The
tons

CrtlCAGO

drifting and

ex-

DETROIT

•

'

BOSTON

"

prior

,to

(

in

those of other mines in the district

field

and

now

accounts

for

ap-

and

n™-

The

success

ln8

nave
been
Ikpanded
^countries wfth the

"backward"

nfw ore reserves and, at the
agmimng.cosl

di^n

brines

to

*

company
a
keen financial
as
he is President of the

prominent

mining,

diversification

Diversified

(4)

arSs,

become

the

milling
broad

Which

COntribU^

Operations

In¬

Broadcasting Field:

purchase

T

'

N.Q.B.

'

Tn

of

rh-_a_.

wrAn

chlca^°' WCA9»

Continued

on page

i

OVER-THE-COUNTER

an

With
Radio Station
WMPS in 1944, Plough, Inc. took
a forward step with its entry into
the radio station field. Plough now
owns and operates WMPS, Memclude

.company;in .its,

program.

undeveloped
:sm

";'with Hugh's established
.
these areas
Ploueh's
t00t^01cl ^^

sales should
even, more
imports
to future earnings.

The other officers and directors

arid financial men with
diversified
backgrounds

include

emergence

„..o..

foreign

Dove Creek State^ItokivP^
Creek, Colo., and McCormick Mercantile Company of Moab, .Utah,
5,s ^vell..as a director of Utex
Exploration.
;
;; v
are

or

to

as'new marketing

bition, mi. ivlcLoimick brings ,to.
the

'•SAVING^

of Standard's

management in overcoming many
?f the initial difficulties, discover-

qipte conservatively materially aid the

since

^

YORK 3, N.f#

ORegon 7-3000

considering 1947, research work had been ~
any investment is the quality of conducted to develop and perfect
management. The president a specialized aspirin tablet for ,,
and General Manager, William Rj.gchildren. The goal was achievjed ^
McCormick, has been best,1 ^e^Ldbi^thai year and St. Joseph Asscribed as "a hard rock miner pirin for Children won interest
wi.th ideas." Standard's costs of and acclaim from both the medi-,
mining (1958 average $4.66 per cal profession and the public, fit
f°n) are $2 to $3 per ton less than quickly became the leader in its

i




Colorado,
indicate at

surveys

has

company

Wire System

NY1-1557

-

LyNi\

Standard is generally con- proximately 70% of the entire
acquired options "to purchase ceded to be the lowest cost domes- children's aspirin sales.
properties for $2,050,000 and tic underground producer of ura- ~,„.
RMofniMd Potentials in

substantial

Private

Silverton,

the

million for 1959 first quarter earn¬

Tel.: BE 3-8880

'!

this

venture

on

>

Mobile, Ala.

„.

Direct wires to

Anniversary.
partnership and has an or oil should be encountered, in Events "which have been signifioption on the remaining 50%. This thie event of discovery, since large cant to Plough's growthr and are
base metals mining and milling gas pipelines are
adjacent to the indicative of RlougH's ability to

of

DIgby 4-2727

Review Available

HAnover 2-0700

New Orleans, La.-Birmingham, Ala.

.

doah Limited. Standard owns 50%

world

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

Silverton, Colorado area and will highly favorable wildcat district, leader in its field with a list of
be.mining and milling ore in a! it is likely that a farm-out to a America's most popular drug
joint venture known as Shenan- major will.be made in the near products. The company in 1958

SUGAR

a

a ?

months. However, full production
will not be reached for approxi¬

fEIIACTIVE ISSUES

—

.

me

tion.
Initially,
production
at
Silverton could begin within nine

stock- options,
#
Tiome for certain of your
substantial cash position, proven
earnings, proven ore reserves and
a broad diversification.program.
0
submit your offerings.
Standard Uranium Corporation
(a Delaware corporation) is en¬
{f ;
Perhaps we can help.
gaged in the development and
mmw$i
aBfifcT J. CAPtAN A CO- * production of uranium, vanadium,
gold, silver, copper, lead and zinc,
gas and oil. The principal uranium
property is the Big Buck Mine in
-San Juan County, Utah. In addi¬
tion,^ the
company,
owns
and
operates
a
lead-zinc mine and
mill at Crested Butte, Colorado; a
copper mine at Payson, Arizona,
LAMBORN &
and producing natural gas wells
C9
WALL
STREET
at Garmesa, Colorado. Recently,
the company has leased a number
NEW YORK 5, N. Y.

Saw— Refilled

also well

is

following basic reasons: Nationally
recognized
management,

convertible

If you can't find a

vinced

any

readily available financial infor¬
mation, no long-term debt, no

STOCKS

5

plant

mine

mated this,

$10

because of the '

IFE

Uranium

proprietary drug indus480,000 tons of ore in place with,try and hag achieved a record ot
a value of $32.75 a ton. It is estiexceptional growth which can be

becomes

my

,

logical

Stand-f

Utah.
ard

to

^n^»?eiueraiiy

.

that the growth potenguaranteed through 1966 by the ^ of ttlis fading company in
Atomic Energy Commission, one of America's basic industries
Standard
anticipates no market
certainly
quaiifies
it
for
the
problem for this ore. Standards g(<eurity.I like best. «
.

months.

b, -1

a

prior

developed

uranium

Exchange

Members American Stoctc Exchange l

analysis of Standard
Corporation has con-

Careful

estimating profit is the optimum
10,000 tons monthly but this rate
for total production has been ex¬
ceeded in each of the past four

Uranium i

of

Members New York Stock

sale

,

com-1

is Stand-

ard

As

Bought——Sold"^—Quoted

Steiner, House* Co.

it is

speed-up of production
which
might
become
necessary. The tonnage used for

panies,
the)
security I like f
best

Standard's

area.

November,

excellent

Among •"

these

Associate Member

market

adapted to

indus- ?

try.

Established 1020

.

Inq.—Lynn L. McCormick,
Research Dept., Dallas Rupe &
Son, Inc., Dallas, Texas (Page 2)

.

•

will be

leaders in this

Corporation

As

ore.

low lime content,

a

Standard's

of

_

.

companies
which

se

the

during

v.—.-t,

1

five

or

six

to

company

1954-55,

in g
emerging
four

New York Hanseatic

five

uranium

(Page 2)
Plough,

minimum of

a

'

much desired by the four mills in

some

curities

has

ore

Corp.

hundred

than 400 OTC Issues

content

oxide

Oakland, Calif.

'

..

million tons of .35% uranium

one

President, Frank Knowlton & Co.,

Experience

..

36

t

INDUSTRIAL STOCK INDEK:
i'

20'Year. Performance

of

35 Industrial Stocks
.

-

•

•

■

FOLDER

*

!

1

I

ON REQUEST

National Quotation Bureau
Incorporated

46 Front Street

-

*

New York 4, It. Y.

Volume

*

Number 5848

189

What Man y

.".The Commercial and Financial Chronicle

.

(22f9) ,3

1 N d E X

Bankers Do Not Know

Articles and News

rovie

Now Is

By IIARRY W. LUSSEY*

;

,

Page

Always the Most Difficult Time to Invest

•

—Charles W. Buek

Cover

A PARTY

Vice-President, Wfn. E. Pollock & Co., Inc.
New York City

■

>_

•

•

Business Outlook: 1959-1960—Gordon W.
McKinley--__rJ.Cover

'*

Appealing to bank auditors and comptrollers to bring
better
A

portfolio management, government bond dealer

terms-it "criminal" when bankers fail

'•

'4

to

>

of the investment

for profit and

solved

earn-:

ball!

through

Rich

;

left

:__

5

_____

ReservedP^ira U. Cobleigh-

and

?

Poverty—Eugene R. Black.

'

Telephone: WHitehall 4-6551

alaska oil

7

& minerals

Future of Small Business Under "Fourth
Banking System"
—Neil H. Jacoby___

9

___

permachem
Inflation's Growing Unpopularity Makes theFuture took
Brighter—William F. Butler

'the

Sharing Increased Productivity
—John

problem can be
fixed alloca¬

J.

•

corp.

10

Best Inflation Control

basic atomics

Quigley

11

Municipal Bond Financing—Arthur Levitt

equity oil

12

any

Are We Underestimating the Soviet Economic Challenge?
C —William Benton
l
__

metropolitan

13

__

broadcasting

Monetary Stability

vs. A Free Enterprise Economy
Dennis Robertson..

•

—Sir

1

14

reeves

figures regarding demand
fluctuation

brings

]

a

up

V

in vest-

usually

over

to

Bank

loan

is

demand

such "times,

only

—

_

bond

Let's

investment -officer

does

c,

;

As

Blinrt

to

longer

buy

term
wise

bonds than he may consider

simply
bluntly

.

because he is told very
that earnings must
be

maintained

Thus we come to the liquidity
problem. You must maintain an
L adequate degree of liquidity ir¬
respective of the desire to build
earning power. You must be able
to take care of any deposit withdrawals, or .new- loan demands,
which may develop in the future
through liquidating, securities
without
any important
loss.
Therefore, some part of the in¬
'

must

vestment^ account

the

while

and

earnings is by

be*

a

position,
contribution to

supplement to the

cash

no means

unimpor¬

tant, it must be subordinated; to
the primary objective—liquidity.
,

,

^

,

■

or

so

may

.

4An

,

two

adJress by Mr. Lussey before the

24th

Eastern Regional Conference of the
National Association cf Bank Auditors &

Comptrollers,

(Boxed)-—

29

Yielding to Inflation Bias— 31

on

allow

your

a

little

:

safety

Miami

Beach,

(Editorial)

costly

in. portfolio

Ifyou

Man's

make

22

-

Bookshelf

,v,

Airtek

/

Dynamics1-

6

Reeves Soundcraft

6

*
_

r.

8

.___

8

____

From Washington Ahead of the News—Carlisle Bargeron__._

Prospectus

on

Request

I

major

Mutual

Funds

15

Singer, Bean

_2__-. 37

Indications of Current Business Activity.

NSTA

the

grave

inc,

40 Exchange Place, N.

HA 2-9000

16

News About Banks and Bankers.

Observations—A.

Wilfred

Our

Governments-——

adjusting the position through
extending
maturity
during
a
period in which prices are high
and yields are low.
•
^
It is the very low yield on bills
in a strong market versus a rela¬

Reporter

011

:

18

Direct Wires to

error

Yii

'

Teletype NY 1-1825 & 1-4844

accupiulate
will very

do.

1

Notes

mackie,

&

46

—

Cmanagement ;

excessive liquidity, you

probably

—

Einzig: "The Cult of Equities'____

may he attributed directly to-the
seemingly conservative procedure
of building up a very strong short

position.

■

Ling Electronics

Cover
.!-

Dealer-Broker Investment Recommendations.

short-term posiLj

most

the

that

>

1

Pacific Uranium

tion to become excessive. I have
110 hesitation whatsoever in
stat¬
ing

r-

circumstances

any

very

Perkin & Elmer
V

Coming Events in the Investment Field

May.

4
_____

Dallas

San Francisco

Philadelphia,

25

•

Los Angeles

Chicago

Cleveland

of

.

.

,

Our

47

Report—

Repeater's

Public

Utility

Securities

-------—

-

15

___________

r

Railroad Securities

high yield on bonds that
the trap on the unwary, ft
calls to your attention "how much

tively

Securities Now

in

27

—

38

Registration—

snaps

to

you

the list

studying

to* see

if

Securities

you

hand

hand

in

.

.

and You—By

—_——____

j_

IVallace Streete
L

Best

The State of Trade and

With

24

16

Atomics

2

T__

Industry.—______

5

_________

Washington and You

48

QQ

^

COTltlTlUeCl 071 JpClCje

Fla.

.

The Security I Like

lOW yields On ShOrt-tCTm Jnyestments' gO

Salesman's Corner

The Market

Basic

45

Offerings

Prospective Security

could earn if you were
extend," and that sets you to

more

identical

i

J.F.Reilly&Co.Jnc.

19

Regular Features

,

See It

We

Business

banks will ever have
have
accumulated* an excessive
liquidity requirements, short-term position. The answer
and anyone who thinks this phase
will almos.t always be yes, because
No

About It!

Bank and Insurance Stocks

another 20%- to 25 %
be. added. However,

under

never

.

V'.

of

margin

errors

increased.

even

or

perhaps

then

buy

not

general rule, he has very
little choice and he is frequently

~

Something

Stressed in

Bonds

Salomon Bros. & Hutzler______

,

will

a

influenced

l)o

Oppof^ Strong Short-Position

poor.

prices

high and sell low because he wants
to. As

Convertible

New Study Issued by

Accordingly, you must ^Be sure
be high reflecting the competition your anticipated liquidity needs,
between institutions seeking an based on - a careful * 'analysis , of ."
outlet for their surplus funds in your
own experience
recent
the bond market. Remember, the years, are fully provided for. and
At

Opportunities in

*

Lee P. Miller Warns Banks

less favorably situated, parts of the country.

turned

funds

him for investment

the

when

a

originates in

have

,

be

thinking-

formula

the

of

most

Harry W. Lussey

officer

ment

will

20

to other sections of the country-^-

problem.

The

to

population and industry

is losing

impor-,,

very
tant

them

shows

soundcraft

deposit

.

this

Now
■

Business Must Now Accept Its Frightening Responsibilities
-Thomas S. Nichols

great deal more stable than one
might anticipate, then you should t
be guided accordingly. Remember,
in Florida, as an example, you do
not have a decadent economy that

be^gainfully
employed.
V

.

time category. How- :

ever, if for example, your own >
month-to-month and year-to-year

should

Dept.

6

__

r

of

those in the

and

over

these

.

,

WALL STREET, NEW YORK

99

-

.

,

Obsolete Securities

?.

-

U. S. Gold Outflow' Confronts Challenge of International

{

>:>

•

can- on loans *
V and
mort-,;gages,
there
■I will be funds X

:•

-

v~M. S. Szymczak

Amerada:

-

!j-

and you'll have

4

f

deposits to specific assets
ings, it must be fully invested at
all times.-Accordingly, after the ♦will probably suffer a rather rude
awakening. No rule of thumb cart
loaning
offibe applied to a bank anywhere
cers have put
in the country. Demand deposits
out all the,.
are
probably more volatile than
money
they
tion

a

3

Economic Growth, Inflation and Stabilizing Policies

heavy short position; (4) v poor tax consideration regarding1
possible greater profits from lower interest income bonds, use :
of profit and loss in alternate years, and coordination of bad nr*
debt reserve with portfolio operation; (5) abuse in Treasury
Tax and Loan Account, and (6) failure to use economic and *
mathematical approach to portfolio management.
;* A bank: operates

Earnings—Harry W.: Lussey

Investment Aspects of Insurance Stocks—Edna M.
Thompson—

.

maturity spacing which prevents refunding when Fed makes
money tight, and vice-versa, causing a "spread-trap" and a

in order to show maximum

Their

y

■;

obsoletes to

your

99 Wall

-

.

maximize

portfolio
earnings involving no increase in credit or money market risks /:'>
than those currently being taken. He explains why he ,de- %;
plores: (1) excessive accumulation of short-term position;
(2) poor ^knowledge of liberal yields possible from so-called < -,
premium issues and the failure to discern compatibility of
bond-investments to direct redaction loans;, (3) routinized

.

-L
y'

bond

.What Many Bankers Do Not Know About,
Improving

Drag

OO

Jm

Published

i

M

have

!

FINANCIAL

.

i.t

>

>

.

25 Park

'
.

„

Spencer Trask & Co.
Members

'

25

BROAD

New

York

.*

Boston

Nashvine




Copyright 195°

i

t

StPck Exchange

"

'

Chicago

Schenectady

,

*-

L

w

fc,

.uuci

i.

*,

B. Dana

matter Febru

•»»

at the post

1942,

25,

»ry

<■

office

at

JVxaictl O,

oi

mi

New
J.0

WM V. FRANKEL & CO.

DANA OOMPANT, Publfshere

Place, New York 7, N. Y.

GEORGE
WILLIAM

;

R*AT\ter"*

-

William

Company

~v

I

CHRONICLE

V REctor 2-9570 to 9576
J.

MORRISSEY,

DANA

SEIBERT,

Subscription
•

■

Editor-

*

President

Of

Pan-American

21,

1959

Union, $65.00

«

'

'

In

»

per

v--o.Ut

$72.00

per

year,

per

*

S
-

year

year.

/

39

BROADWAY, NEW YORK 6
i

WHitehall

3-3960

^

Other

Thursday t general news and ad¬
vertising issue) and every Monday (com¬
plete statistical issue —market quotation
records, corporation news, bank clearings,
state and
city news
eto.L

.

-

•.

Subscriptions in
United
States,' U.
Possessions.
Territories and Members

Other Countries,

Thursday, May

INCORPORATED

Rates

,

,

.

ST., NEW YORK 4, N. Y.

TELEPHONE TIAnover 2-4300

Albany

Weekly

Reg. D. S. Patent Office

spepiulized in

WILLIAM B.

j

Twice

The COMMERCIAL and

For many years we

Pnblications

.

"

Teletype NY

1-4040 & 4041

Every

TELETYPE NY 1-5
Glens Falli
Worcester

Other
•

Chicago

Offices: 135 South La Salle St.,
111. (Telephone STate 2-0613)

3.

Bank

and

$45.00 per

rate

account
n*

of the

o*cHange

foreign

subscriptions

must

made

ne

Record

—

Mbnthlj

Direct

Wire

to

(Foreign Postage extra

year

Note—On
th-

Quotation

in

New

fluctuations

remittances

and
York

i>

fo

advertisement!
funds.

PHILADELPHIA

I

;

4

The Commercial and Financial Chronicle .*.

(2300)

Thus the

Investment

Aspects

Bank

Now, what about the most im¬
portant investment characteristic
of all—desirability?
First, what
makes

Officer, Ciirard Trust Corn Exchange
of Philadelphia

will be

path of analyzing insurance

stability

stocks

power

are

more

is

the

investor

likely

all: Availability.
the

is

to

First of

To what

insurance

extent

industry

avail¬

able to the in¬

vestor?

usually

di¬
into

vided
classes

in-

—

on

surance

persons,

primarily life,
and insurance

property,

on

further

sub¬

divided

companies rate in this re¬
spect? Those who feel they know
insurance
companies
best
wax

positively lyrical in their descrip¬
tion of the industry under those
headings. Here is what they say:
As to growth: (1) Insurance is

an indispensable factor in modern
billion, stock economic life. Business complexi¬
companies do about $14 billion, or ties demand constantly growing

and

ualty.

50%, and only one-third of that
total is in life insurance. Then too,

ordinary

of these stock

Edna

Thompson

M.

Next,

against

some

God loss while casualty insurance

protects against suits brought by
a
third party, generally because
of some act of negligence on the
part of the insured. There is some
overlap in the casualty division,
but these groupings will serve to
outline the scope of the business.
A

measure

is

ness

premium

an

We
ance

volume

with "sales"

compares

by

of the size of the busi¬

ordinary industrial
are

told

premium

that all

company.

life

volume

which

reported

as

insur¬

was

ap¬

proximately $15.3 billion in 1958,
while total fire and

miums

around

were

But all this business
able

to

stocks.

the

casualty pre¬
$12.5 billion.
is not

avail¬

buyer

of insurance
The great bulk of the life

stock

the
with

cerned

protection
is Usually
accident or act of

insurance

as

increases in established

forms.

panies

(2) The insurance business
is possessed of an inherent com¬
pound element of growth. Regular
investment

insurance

of

reserves

automatically creates earning as¬
Moreover, insurance com¬

of

Marketability

Fire

well

as

expressions
with

the

of

role

worry
connected
of the investment

These forebod¬

companies recur.
ings usually

buyer

is

marketability.

con¬

How

and

the

New

Fidelity-Phenix

America

on

Stock
Exchange
Company of North

and

Reliance

Exchange.

oil

Outside

the

total

earnings. All the rest is

is

company

f"

the

%

some

[$

even

given

the

business

outstanding,

resented in the stock market. The

a

will

be

conducted

in

a

an

ordinary industrial com¬

in fixed

assets.

the insurance

All

e v e n

panic, through

casualty

stocks

is

fear

shared

this

life insurance stocks

154.97

While

ins.

life

as

,

tion of

are

available

on

Wilfred

May




noted

above,

a

to

the

insurance

stock

buyer,

have fallen way behind.
Why? Don't the favorable factors

just mentioned above have any
validity? You would hardly think
so were you to examine the fol¬
lowing comparative earnings table
also
published by Standard &

request

Dominick

Members New York, American &
Toronto Stock
14 WALL STREET

available

Poor:

&

stated

fund

(not the first one)

"investing" policy
includes short-selling, to take ad¬
vantage of market swings.

aggregates but 3.4%.
A possible broader effect of the
widespread fund holdings, affect¬
ing the economy in the event of
a bear market occurs to us.
If the
1.9 million holders should see the

business?

are

more

with

in

a

manner

that is far

removed

servation

and

income

con¬

production

established in Britain and here at

in

speculation. The fund manage¬

ments in their dividend

differentiate

from
and
the

payments

clearly

as

as

ordinary investment income
capital gains. Nevertheless,
of shareholders have come

run

regard the capital gains' sweet¬
ening of the real recurring net
income, which is now down in the
to

2-to-3%

range,

of their

part

as

annual investment yield.
In

market, the funds will

bear

a

still be able to add
to the investment

their

a

capital gain

income segment

dividend

payment.

ciation

accumulated

past

over

Although this would con¬
stitute
a
return
of his capital

years.

unknowing

the

(taxed),
holder

will

still

be

share¬

happy

Exchanges

NEW YORK

From

of

speculation is the bunching in a
single payment of the proceeds of
short-term
market
profits
(i.e.,
during

gained

a

less

than

a

base

of

1947-49,

income

ment

the
portfolio. Here, even more
strongly than in the case of the
usual long-term capital gains as
described above, does the fundliolder believe he is getting a unit
of

ordinary investment income—
realizing that it is in part for¬

not

non-recurring.
particularly ^drastic
disillusionment in the

and

tuitous

not

Will

investor

:

community

fund

advent of

a

accompany

Equities, Inc., is resuming

its investment business.
is located at 654
New

The firm

Madison Avenue,

York City.

as

Principal for

Association

Broadway, New York 4, N. Y.
'

NY 1-4722

regular commission rates

through and confirmed by

a

Continued

on

page

28

Members: Principal Stock
National

25

the

bear market?

Resumes Inv. Business
Uno

Members: New York Security Dealers

The

six-

holding) .with the invest¬
gained
from the
dividends and interest earned by

month

18

representative fire
insurance
companies reported a
decline in earnings to a 1957 level
of only 39.4% of the base figure;
eight casualty insurance compa-

group

with

"high dividend yield."
Further
prostituting
real in¬
vestment
income
with
market

his

Grace Canadian Securities,

Orders Executed at

But

from capital appre¬

come

Brokers, ^Dealers and Financial Institutions

25

they

the portions derived

between

can

Specialists in Canadian Securities

HAnover 2-0433

the

izing it, whole-hoggedly immersed

this will

:

concerned

dividends

of

area

lay fund-holder is, without real¬

in

Bull Market Role %
We

Illusions About Yield
the

In

-

stocks,

small fraction of
industry,
have soared, casualty companies
have lagged, and fire companies,
which are the class most readily

\

Dominick

a

whose

mm.

by

observer.

the entire life insurance

to

Casualty Insurance Stocks
Copies

insurance

have

we

represent only

Fire and

erstwhile

the

"purity"
market-playing in the syndi¬
cate manner, is the current forma¬
to

by the public.
This

ar¬

Scottish-British investing

of fund shares

not

reverse

a

52.64

9

An Introduction

(<vith

averages

lor

from

departure

cash-ins

mass

pro vision

34.54

fire insur. stocks

8

which

is

out-

of its "deficit" performance).
Also
manifesting the extreme

b 1 e,

figures show that
stock companies handle only about

prepared

In

fee

trou-

market

available

We have

value.

fund's

no

pany—decline in inventory value from the twin aims of
capital
or an unfortunate overinvestment

16

the

rangement calling for a contribu¬
tion by management in the event

Oil of Jersey, General
company's assets are in cash or the turn of the
century.
Motors, the new American Tele¬ investments which can be con¬
They fan the flames of specula¬
phone, and indeed would be only verted relatively quickly into cash.
30% of total life insurance busi¬ a minimum
tion in several ways. The inflation
respectable size for
These arguments are most im¬
ness, although they do somewhat the
of the Blue Chips is promoted by
average industrial
company.
pressive, and it will certainly be
better in casualty lines with about
them, directly and indirectly, as
Coming down the list, we find
expected that the operation of
two-thirds, while in fire lines they Continental Insurance with
spelled
out
in
this
6,653,- these factors will find reflection previously
largely predominate with some¬ 000
shares, Insurance Company of in a superior earnings and market column.
thing
like
85%.
Therefore,
of North
America
,with
5,400,000
price performance of insurance
total insurance industry premium
Bcating-the-Market Aims
shares, several other with three to stocks relative to other groups.
Now the funds are increasingly
*A talk by ,Miss Thompson before the
four million shares, and quite a What has actually been the base?
Investment Women's
Club of Philadel¬
catering, to and furthering, the
Standard
&
Poor's
Investment
few with under one million shares.
phia, April 27, 1959.
public's aims concentrated on
Service runs a price index on rep¬
beating-the-market. One leading
resentative groups of stocks taking
fund president proclaims as one
the years 1941-3 as a base of 10.
of its cardinal portfolio policies,
On that base, here are the scores
confinement of purchases to issues
on current prices (as of April 22,
wherein an early gain of a mini¬
1959):
mum of 20% is expected.
Also in
425 industrial stocks
61.67
line with the present emphasis
best

to

an
ac¬
centuation of

normal

Standard

be compared with 200 to 300
million shares for companies like

market

management

performance of the

of

figure which

may

cases

related

aging

and moreover that
fair profit will be earned over a

with

shares

insurance business is done by mu¬
tual companies, who are not rep¬

portfolio's

holder, envis¬

proper manner
a

basing management's compen¬
on periodic
computation of

redemption

period of time. (2) Un¬
some
immediate impacts of the
derwriting operations
are
pro¬
funds' role during bull markets.
these few, all insurance stocks are
tected by operation of the law of
As has occurred previously, this
traded over-the-counter and mar¬
averages and a broad spread of
market boom is accompanied by
kets are made by insurance stock
risks. (3) Investment income off¬
sharp "deviations" in the invest¬
specialists. Furthermore, the num¬ sets
any possible adverse under¬
ment company area.
ber of shares available for trading
Now again,
writing results. (4) By its nature,
as
in the bubbling 1920's, some
is somewhat limited. The largest
the insurance business is protected
sectors of the "investment trust"
stock insurance company, Travel¬
from the type of risk associated
community seem to be functioning
ers
Insurance,
has
10
million
American

of

sation

pay

plowed back into the business. In
addition, to the extent that the

York

and Insurance

(a

privilege

on

invested in common
easy is it to buy or sell insurance
stocks, capital funds enjoy the
stocks? If listing on a recognized
normally
expected
growth
in
stock exchange it a test, then in¬ value of these holdings.
publicized daily "score-keeping"
surance
stocks must be given " a
of their fund's asset value showing
As to stability:
(1) Insurance
relatively low grading in this re¬ companies are regulated in the declines instead of gains, might
their consequent feeling of grow¬
spect. Very few insurance com¬ same manner as
public utilities.
pany stocks are listed. Those which This assures the
policyholder and ing poorer instead of richer per¬
come to mind are Continental In¬
brake on consumer
in turn the stockholder that the haps put a
surance

appreciation and capital gains
nice synonym for market
profits), is the growing practice
on

the

center

sets.

cas¬

related

and

forms of insurance

new

into

fire

insur¬

How do

the bull market rolls along,

As

The past rec¬
out in dividends only ord of the holders' behavior dur¬
billion
which, while impressive a small part of their, total normal ing major market breaks, as in the
sounding in itself, is a relatively income. Generally speaking, divi¬ 1929-32 and 1937-38 periods, shows
small part of the Gross National dends are restricted to that part of fundholders as intelligently resist¬
Product of $453 billion.
General income represented by interest ing, not following, the liquidating
Motors
and
Ford
combined' do earned on senior securities, which trend. Moreover, the present own¬
about $14 billion of sales even in
may.be only half total investment ership by mutual funds of all New
a
relatively poor year.
income and an even smaller part York Stock Exchange listed stocks

main

two

all seek.

we

This further whittles down the $14

is

Rising vol¬

answer.

plus good control of costs is

companies are
"captive companies," those owned,
for example, by installment fi¬
nance companies
or such a com¬
pany as Allstate Insurance, wholly
owned by Sears, Roebuck & Co.

The

business

THE FUNDS IN BULL AND BEAR MARKETS

earning

volume of about $28

some

insurance

of

ance

investment selection.
What

is the

what

stock

be most concerned with?

and

ume

sophisticated type of
buyer. The bank investment analyst notes the recent
unfavorable property insurance state of affairs, and the oppo¬
site for the life insurance; examines the possibility of a
trend-reversal; points out troublesome handicaps in making a
short-run analysis; and offers a guide to assist long range
relatively restricted to the

a

combination of growth in earning

probed by Miss Thompson who concludes the field most likely

I

By A. WILFRED MAY

desirable?

investment

an

Perhaps) it will be agreed that

power

the

in

Observations

Judging Desirability

By EDNA M. THOMPSON*

Difficulties

marketability

on

is limited.

01 Insurance Stocks
Investment

picture

Thursday, May 21. 1959

.

Association

Exchange# of Canada
of Security

Dealers

Broadway, New York 4, N. Y.

Inc.

Volume

1S9

Number 5848

.

.

.

The Commercial and Financial Chronicle

(2301)

5

/

fr
Steel

The

Electric

Growth,
And Stabilizing Policies

Output

Carl&adings
Retail

State of Trade

Auto

and

Trade

Commodity Price Index
Food

Industry

Price

Index

Production

is

1958, Gross National Product has
The overall price rise during the
limited, and most of the increase reflected a higher

past year

was

volume of goods and services

that

produced.

This is apparent from
which has

^advanced 8% from the first quarter of 1958—about matching the
of

1949 and 1954.

year

of recovery following the lows

f

The

relation between

economic

country has its

has followed the basic pattern set in the latter part of

ment. in mat¬

,1958, according to OBE's analysis prepared for its May "Survey
of Current Business."
Of the first quarter rise in GNP, consumer
buying and a buildup of inventories each accounted for around
$5 billion. Housing construction expenditures registered an in¬
crease on the order of $1% billion, as did purchases by State and
local governments. The rise of Federal buying, in contrast, was
checked in the early months of 1959, and net exports continued

ters politic as
well as eco¬

central

a

topic

for

argu-

a

ques¬

n^i«nm*n£
After

over

run,

that

sta¬

,

contributed to the advance.
Investment demand

rose with the need for larger inventories
expanding sales, and in reflection of the further
step-up in residential construction activity.

associated with

Inventory holdings of nonfarm business registered an increase
amounting to $5 billion, at annual rates. The upturn followed a
substantial though orderly liquidation which had begun late in
1957 and continued into the final quarter of 1958. Uncertainty in
the

outlook

for

steel

supplies has been a factor in the recent
expansion. OBE's analysis shows a widespread move toward re¬
stocking among other commodity lines as well, however, and
accumulation seems in general to have followed increases in cur¬
rent operating needs as the pace of business activity increased.
The

$21 Vj: billion seasonally adjusted annual rate of residential
outlays for the first quarter compares with $20
billion in the closing months of last year and $19 billion in the
peak second and third quarters of 1955.
construction

Business

investment

in

producers' durable equipment and
construction registered a modest rise, as outlays moved up in
durable and nondurable goods manufacturing and in air and rail
transportation. At a $43 billion annual rate, the total was $5 bil¬
lion below the prereccssion
peak and $2 billion above last

year's low/
Government

purchases of GNP rose $l1/2 billion in the first
quarter. The advance centered in state and local payrolls, which
reflected increased employment, and in highway construction.
Federal purchases held about even with the preceding quarter, as
nondefense expenditures dipped.

Nationwide Bank Clearings Up 3.2% From 1958 Week
Bank clearings this week

show an increase compared with a
Preliminary figures compiled by the "Chronicle," based
telegraphic advices from the chief cities of the country, indicate
that for the week ended Saturday, May 16, clearings from all cities
of the United States from which it is possible to obtain weekly

year ago.
on

Continued

on

page

■k

35

bilizing

mone¬

tary and fiscal

pleasure in announcing

distinct

a

nomic

growth

The

challengers

NEW YORK 5, N

do

such

or

are

able to

only at the cost of stunting
growth.

so

economic

It

is

;

not

purpose

my

to discuss

this problem on the basis of theo-

retical reasoning. Neither do I into

experiences

States.

it

illustrate

to

tend

The

by referring

in

United

the

Federal

has

Reserve

ments

also

its

of

in

crisis

increased

its

,1™

recent

however,

yeais,

the

flexible
and
well-timed monetary policy, and,
during the years of most rapid

bank reserve requirements were

billion

Y.

SALVATORE J. RAPPA

JAMES P. O'ROURKE

the

at

HPVplnnmPnki

T1

-companied

&

central bank and

wpw

a

growth between 1952 and 1956, by
substantial budget surpluses. The
German

monetary

fiscal

and

authorities adopted the view that

,

the

relative

role

ment

and

the

traditional

I

thus

shall

select

four

in

Owing to the policies followed,
as

well

as

world-wide

to

the

boom

fact-that
had

about

with

has

the

been

problems

to
ease.
Beginning
in
September of 1956, therefore, the
discount
rate
was
gradually
lowered; and interest rates in the
money and capital markets started
tinued

the downward trend which today

haS ^r0^ht t£em .to a level ap1955 an<j the first quarter of 1958

the budget was permitted to show
a

deficit
n,

'

,

1Q-Q

„r.

.

?'XSSLY+!!

i6c®ssionary tendencies began to
*£ .?.n Germany, the monetary

authorities continued to reduce
Continued

on page

At No Cost To You
We have

recently installed

Direct New York-Cincinnati

a

Telephone

WOrth 6-2115

confronted

Westl

of sustaining

economic growth and at the same

i n

|

time combatting inflationary pres¬
Each

solve

this

of

them

has

tried

to

and Com pa

Members

problem by applying
monetary
and
fiscal

policies (as well as other govern-

oj

Conference

at

Rutgers

University,

New

Brunswick, New Jersey, May 14, 1959.

tne New

y

York Stock Exchange

Cincinnati
Dayton

Chicago
and

♦Remarks by Mr. Szymczak before the
Eleventh
Annual
New
Jersey Business

the
run

its course, demand pressures con¬

economic

of

terms

part of this unwanted growth

CINCINNATI

at

such

successful in absorbing a substan
tial

Traders and Underwriters!

home.

nearer

increase in

in monetary resources.

monetary

Attention;

of

than

objectivity

an

appioacn to monetary ana proximating those in other major
financial centers. Between mid-

Ilstal poh,cy was severely tested
several occasions in the first

on

fT years to(llovVi,1f thf cFre"=y

at

the boom, although the

of that year. Open market sales
of government securities by the

$6

inflation, and stabilizing monetary reform, particularly during the
and fiscal policies has played just Korean War boom of 1950-51. Beas important a role in the econtween 1948 and 1952, when their
omy of other nations as in the money and capital markets were
United States. In fact, I believe —so to speak—in their infancy,
that the basic problems concern- it was found necessary to supple-

ing that relation can be brought
out more clearly if the problems
are illustrated by some recent ex¬
amples
of
foreign
experiences
than if they are discussed in the
framework
of
present
United
States policies. We can look at
happenings abroad and in par¬

cesses of

end

than

of 1958.

this subiect altogether

nvoid

r
In

actions, collectively, were
successful
in checking the excentral bank still had to contend

most
and

concerned with these policies favoring price stability
experiences, and it would be im- and the rebuilding of foreign expossible for me to talk about them change reserves would in the long
without
trying to evaluate the run best serve the other economic
policies of the Federal Reserve, goals of economic growth, a rising
For obvious reasons I might not standard of
living, and full embe considered an unbiased judge ploymcnt.
of these policies, and therefore I "
T~hi approach to monetarv and
shali

1952 and

These

with an influx of speculative
funds from abroad — particularly
as a result of the Hungarian and
Suez crises toward the end of
1956—which threatened the stability achieved during the summer

trade

been deeply

stabilizing




unable to

are

inflation

stantial surplus between
mid-1956.

restrictions

on

more

either

policies

tightened

payments after recovering from its balance of pay-

removed

cal
halt

^

and large-scale open market sales
were undertaken. (Thus reducing
the reserves the banks might
otherwise use for lending). Moreover,
the ^Federal Government
kept the budget regularly in sub-

Germany, the United Kingdom,
France, and Japan. Each of these

Teletype: NY 1-4917

Registered. Representatives:

the central bank)

reform in
June, 1948 the German economy
expanded at a very rapid fate, and
during most of the period 1948-53
prices rose more slowly than in
most
other
European countries,
Between 1950 and 1958, the na¬
tional product increased by 62%,
measured at constant prices, while
the cost of living rose by 18%.
Germany gradually and steadily

that stabilizing monetary and fis-

sures.

•

Germany

1950-51; and it
net gold and
foreign exchange reserves from
$90 million at the end of 1949 to

countries

CHARLES A. KAHL

challenged,
assert that eco-

fVrminv

August, 1955 to 5V2% in May of
1956; rediscount quotas (amount
credit banks may receive from

strength and economic institutions:

in Investment Securities

G. NELSON MERGOTT

.

nomic growth is not likely to occur without at least some degree
of so-called creeping inflation, and

States

Dealers

central bank raised the discount
rate in several steps from 3% in

will not

-

examples, which concern countries
that are comparable to the United

Members NASD

con-

currency

and of acci¬
dental changes in economic cir¬
cumstances with greater detach¬

MERGOTT, RAPPA & CO., INC.

Telephone: HAnover 2-6835

eco¬

being

are

similar events

40 EXCHANGE PLACE

to

by helping to
inflationary pressures.
Nowadays, however, both these

ment

—

Szymczak

the

government policies

the formation of

Brokers

S.

service

contain

ticular

We take

M.

policies could
render

statements

i„
m

Developments

economic

and

full capacity by mid-1955. Prices

remained fairly stable in 1953 and
1954, but began to move up in
1955. With these signs of what
in Germany was called
ovf£~
problem in the United heating"
in the economy, the
peculiar

matter may suggest.

was

long

over

sharply reduced, and most indusand trial plants were working at near-

ways

permit the detail that the subject

sustainable

growth

the

at a very high rate.
production increased by
40%,
unemployment was

situations

similar

harmful to

the

1955

and

1952

Between

economy grew

degrees,

own

It is obvious that time

tioned that inflation

new

Industrial

States.

recently, few

Accompanying the upswing of market demand have been
gains in payrolls and profits, and to some extent in other types
of current earnings. National income moved
up $10 billion in each

different

a

and problems,
their
experiences
nevertheless
may give us some aid as we face

comparatively
persons

in

different

for

ready

was

nomic community.

while it will be evident that each

ditions,

Until

nomic.

to decline.

:

in

become

year

of the last two quarters of 1958, and a roughly similar rise
ap¬
parently took place in the opening quarter of 1959 though information on Income is still incomplete.
:
i
Consumer income and expenditures continued upward. Dis¬
posable income rose $5 billion from, the fourth quarter to a $321
billion annual rate, and the bulk of the increase was reflected in
personal consumption expenditures, which exceeded $300 billion
to make this quarter the highest on record.
Improved demand
for autos, clothing, and a wide range of other goods and services

actions)

and

improvement in the nation's markets since the turn of

•

Germany

phase of economic development
and expansion, as a full-fledged
member of the international eco¬

are

growth, inflation, and stabilizing
monetary and fiscal policies has

The

(the

ment

consolidated.

monetary reform was

abroad concludes

events

taken and results achieved

measures

devastation, and the

the war-time

applicable to our
country even though, admittedly, circumstances vary as do
economic and political goals and methods.

the Department's new quarterly measure of real
GNP,

gains reported for the initial

ming from the Korean War boom,
and its economy was back on an
even keel. It had recovered from

necessary

analysis of contemporary economic

quarter of

risen $40 billion, or nearly 10%.

;

had
stem¬

weathered the severe crisis

price for economic growth and that monetaryfiscal policies are ineffectual stabilizers. The central banker's
a

have proved
the stresses

handle

to

generated in the economy.
By > 1952,
Germany

Dealing with facts and not theory, Mr. Szymczak's case by
case empirical
study of France, Japan, United Kingdom and
Western Germany confounds current assertions that inflation

quarter of this year

techniques

sufficient

Member, Board of Governors, Federal Reserve System

reached $467 billion at an annual rate, an increase of $14 billion
over the final
quarter of 1958, the U. S. Department of Commerce,
Office of Business Economics said May 18.
first

tional

Business Failures

The Gross National Product in the first

the

trols.
•

By M. S. SZYMCZAK*

\s=

Since

techniques with certain direct con¬
Since that time, the tradi-

Economic

Production

other

principal cities

Direct Private Wire To Chicago

24

€

The Commercial and Financial

(2302)

price of oil, it seems to have ,
fairly stabilized with some,

the

become

Amerada, Rich and Reserved

price rise posted for refined

By DR. IRA U. COBLEIGII

Stocks.'

Enterprise Economist and Author of "How to Get Rich Buying

A consideration of the most

distinguished American petroleum

devoted exclusively to production.

company

prod-

year

inroads

by natural
the basic
position of
petroleum
as
the principal
of

kind

grow at a rate
© f
between

and 5%

a
Ira

for the
decade;

year

next

7%.

over

the

So

oil—nor

up on

U.

Cobleigh

in the Free World

©nd elsewhere
©t

shouldn't give,

we

oil stocks. While
fashionable equities in

more

electronics

on

and

rocketry
have
been enjoying a field day in the
market, oils have been (you'll
pardon the expression) treading
water.

for

So much

bargains,

so

that

search

a

for issues still
celling at some plausible relationchip to per share earnings, is like¬
ly to wind up among the oil
Ctocks; and our topic for today is
© company that has, for two gen¬
erations

or

demonstrated

notable

a

for oil—Amerada Petroleum

nose

Corporation.
Now

in

40th

its

of

year

Amerada has shown

ness,

a

busi¬
profit

€n every year. That's quite a rec¬
ord for a company that confines

Itself to the search for,
duction
less

might

and

of, oil

talented

have

dusters

there has

Corward

and pro¬

With a
there

gas.

management

been

debit

dry

holes.

and

been

years

'of

and

steady majestic
in oil discovery,

a

march

©f Louisiana Land
Basin in
end

first

1951

Madison

Ame¬

common.

in

the

Williston

Zone

ber of stock dividends

in1

the past

-2-for-l in

discoveries

16 oil
Ame¬
wells.

rada,

over 600 producing
In 1937 Amerada was the pioneer

producer in the Eola field in Lou¬
isiana; was an early major pro¬
ducer in West Texas and, in 1952,
made the major field discovery

Lake, Alberta.

Unremitting search for

In the
Ame¬

oil

rada has proved a magnificent and

early bird-dog.
On the record it
bas been finding V/2 barrels in
new

reserves

for

each

barrel. it

produces and it's been hitting a
•try hole less than 30% of the
time which is considerably below

In

looking

company,

at

If a

s

a

r e

producing
earnings

oil
are

usually viewed from two stand¬
points — actual reported figures,"
and cash flow.

«««

balanced

seem

have

to

hind

•

*

in

eqUtties is as widespread as ever

lagged^tqa,tfa^jbe-?ftn ^Bfitain.^ This change
Derby, we fe.

this

running

,

„

^viewpoint the oils, may
Dow^

t0

loaded

with

a

vast

storehor

^}h the improvement, in business

conditions, it is how widely assumed

with what the iradio
announcers
might call.>,
tl^t
ness.
Oil in ..the:
locked-in goodness."
™
^
ground
is a pretty respectable
giuunu
is
hedge against inflation, andAme-,.
rada has plenty of,
it.^;Wbat /is
known and proven in the
°*
reserves gives ample
support^xei'^
the price of Amerada today. >.,Ca.n.
you imagine what wouid b^PP^hjproduction

^hat
Lnai,

„

a
o

"•
• crease

..

terly unethical to, tie them down
a type of investment which is
bound co lose much of its value in

due to

,

large py^vx.»»v« of the inproportion
v.,v —
- demanded by miners, en"■
^
—

and ' transport
workers
would be conceded, and that this

gineers

ihe course of time, merely for the
sake of slowing down the process
"
~
depreciation wi
u^^uau«u for the benefit of

of
<u

the rest of the community, consisting mostly of investors quite
capable of hedging against the

depreciation.
the
the

Once
Once

-

>

proposed

change

/

is
is
carried out it is bound to increase

selling

pressure

in the Gilt-edged

pressure in >
the markets for equities. But the '

market

and

buying

would , lead to another round of extent of such pressure will be
wage increases.
Should this hap- moderate in comparison with the
pen,^ the;- rise in prices would be pressure that would develop un4 •'
j.e'sumed.; Producers would be once der a Socialist Government. It is
-

•

^

■■

current income.

Actual cash flow

El ft

share was $11.02 in 1957 and
$9.30 in 1958.

TIU

per

In making
rada for

projections for Ame-

Banks Sell Dfibs

Tlie resumption of the upward Scheme, for

IKIIlnB ywillvMu

The Federal Intermediate

.

course

noticmism
yesterday (May

Banks offered

prices

m0vement,; of

.

Credit

20);

would,

of

three

elements

are

on

foreign

(3) the limita-' debentures at par.
imports.
About' iqr.q anrl Tnatnrinc

Dated June

1,1 equities

Marrb 1
I960
and maturing March 1,1 you,

19oJ

are

being offered

STATE AND MUNICIPAL BONDS

agent

ties

LOCAL STOCKS

the

for

tionwide

CORPORATE BONDS

John

banks,

selling «rouD
semnto *>ioup

dealers.

lt

was

also

ATLANTA

WALNUT 0316

LONG

1, GEORGIA

DISTANCE 421

.

announced

Tvr

vest

in

funds

its

under

own

its

securities

control

and

the".
pre~L:

fers to invest in equities, it would

A

as

well

are exposed

as

recession

up

and

The recent business
its

effect

Exchangehas

on

the

somewhat

loans by private investors, except
as

purely temporary investments,
Should there be effective re¬

undermined the formerly implicit sistance to wage demands during
faith of illvestors in the infambil- the autumn, the increase in the r.

,ity of investing in equities. The
experience of recent months had
the- .result of slowing down the

Well bring about
It would then be ¬
interesting to observe how even a 0
output

some

might

price cuts.

o

of outstanding

maturing -Ort -1

and

lo-Q

000 0f 2.30%
June

1,

<™T
and for

19o9,

operations of the banks.

I

that

acquisition of

flow of.' funds from loans into moderate decline in prices would V
eQuities- For. a short while the affect profit margins and divi- '•
wr 1
"j-i-"" s->ifl°wj was even reversed. But tak- dends in existing 'circumstances,.d
Nov. 2, 1959 were sold for
delivery.),.fong view that trend was There might then-be another reJune 1,
1959. :
bourjd to resume its course.
vival in the demand, for Govern-4"
Net proceeds from the financing*The Government has now prom- ment loans. But the view is now ^
will be used to refund $115,000,-. ised legislation for the next Par- widely taken that the odds are-L
debentures

RHODES-HAVERTY BLDG.

na-

a

of securi
01 securi-

.

total of $25,000,000

Robinson-Humphrey GompanijjDc.

and

the

large scale: Oncera

to wide flue- be difficult to argue convincingly
'.tuationsb that they can go down in favor of holding Government.'-

fiscal Stock

Knox,

T.

on a

a

-

fects of proration;

equities

revival of pessi- stage is reached when even the xi
bordering on defeatism state finds it inexpedient to in^R
cause

abolit the. ultimate late of Govissue
of
approximatelyt ernment loans. It is true, the inparticular importance: (1) the a new
price of oil; (2) the extent and ef-! $170,000,000 of 4^2% nine-months vesting public now realizes that
1959

of

through




was

iarge degree tp the progress

Uutcm^&m-,upwards business recovery and to
clair, Phillips, Continental,>>hamrefiationary character of this
rock, all, no doubt, deserve an- year's Budgets
.......
other look at this juncture.^.Apd_
rpbe revival of pressure for
so
indeed, does Amerada selling
higher wages also had some share
some
35 /c
below its 4957:-high.
jn.bringing about the change. With

_

the debentures

,

a

Royal

now.

I ESTABLISHED 1894E

Thi

.

For 1958, Amerada
$3.56
a
share
against
rnbref in a position to pass on to the declared intention of the La- $4.74 (an all-time high) for 1957." marketwise if Amerada s .^Libyan,^ the consumer any wage increase,.'bor Party to use the accumulated
These figures are most conserv-; desert sands turned, out to be an7.
so that tit would not affect their
reserves of the National Insurance v
atively arrived at since the com¬ other Iraq or Iran? •,
•
•
t
; profit margins.
Hence the revival Fund, and the funds of the pro- vi
pany charges off all intangibles to
■'
' ' °f the popularity of equities.
' - posed- additionalt Superannuation^

reported

tion

par for the course.

4

„

a

,

,

•at Sturgeon

recovery,

4

1946; 2-for-l in 1951;
(at Beaver Lodge)j and again 2-for-l in 1955., •

there led, in due course, to
fields in the area and, for

.

tov/ard

nniminitn

4.

,

rewarded by very low- The dividend rate is only $2 per
acquisition of 213,000 shares, share, but there have been a num¬
was

Amerada to do bet¬

The columnist attributes this

resumption of wage pressure
V! and inflationary character of the British budget.
progress

but not to reach the

1

,

was

rada

would expect
ter this year,

;

;

*;

an

reserves and earnings
Co
that
today Amerada
is the
largest exclusively producing
Unlike most corporations Ame¬
petroleum enterprise in America. rada has never needed to go to the
The progress of Amerada has public or its stockholders for new
been a series of "firsts." Amerada financing.
Operating
uniquely,
with no funded debt or preferred
Was first to use geophysical ex¬
ploration techniques.
It did the stock, capitalization consists sole¬
early probing and drilling for ly of the 6,313,310 common shares
Louisiana Land and Exploration aforementioned listed on N.Y.S.E.:

cost

to:
-

;-\i-

<

Instead

production,

end

comeback of Government loans.

general assumptions we

these

*

ra^n-^zccnm-

States

is expected to

4%

on

t

^Sier

for

the

United

United

Government trust funds finding it

.hi n?nfpn«nn Vwhirh

remains

in

the

Equities

l ernment issues. This point is made in passing by Dr. Einzig in
his column devoted to the revival of popular interest in equities once again in his country following the past six months'

.

,

_

undisturbed.

oil

of

."Thursday, May 21, 1950

nf
io^7
a fair
LONDON, En(j. — The stability vest at least part of -their funds
peak net earnings of 1957. A fair
interest, which it Se»
£ 1QCQ
hp £4 4ft- r»er pf-'fhc cost of living index in Britin equities. Until recently such a
guess for 1959 mig t be $
am
shares
three
ways
(with
Con¬
,
,
fimxr nf
ail1 during the nast six months change was considered inconceivduring the past six months change was considered inconceivshare reported and a cash flow of
tinental and Ohio Oil) in 62 mil¬ coin- £
resulted .in a temporary revival able. After all, it is against the
$10.40. On this projectiodJiyjc
lion acres in Libya; a one-third
0f demand f0r
* ..
interests of the State to encourage
is
pure
conjecture)
conjectuie) tne preseni ^„ornm(inf
the piesent rbvprnmont
the diversion of trustee funds from
interest
in
23
million
acres
in
price of Amerada is 21 times in-j
Government loans to equities. The
British Somaliland with the same
dicated per share net and 9 times;in the snrinfi
amounts involved arc very large
partners; a one-sixth interest in
the cash flow.
Compare these
'
42 million acres in Somalia; and
indeed.
Had trustees4 of every
tios to some of the giddy elec-r
a
one-third interest in 2 million
% kind been at liberty to invest their
tronics selling at 40 times" earn-:^
a, ■
trust funds in equities during the
acres
in
Guatemala.
Quite
a
ings and it's bard to ^egard^hei^
last few years it is certain that
spread of real estate—but the pro¬
rada as overpriced. " As a^Matter:
their operations in switching their
duction is still in North America.
of fact, Amerada sold at a high
WpI
funds from gilt-edged stocks to
In
Somalia
exploratory
efforts
of 147Y2 in 1957, and as low as 81
industrials would have greatly ac¬
have
disclosed
reaChed at the
large structures
in 1958—so it doesn't look particu-; reat-hed at tne
centuated the
prevailing - trend.
and sedimentary geologic forma¬
beginning
o f;
larly dear at 931/2.
Equities would have risen much
the year. For •
tions favorable to oilj but the first
Amerada is held today by 137;
three holes were dry and at least
higher, and Government loans
a
m o n t h
or.
investment
institutions.
It
has.
lnnkpH
would have declined even lower.
four more holes must be drilled
about $65 million in current assets
;1
Their mainstay was until now the
to
get a proper reading of the
Eaul Einzig
against about $10 in current lia- as jnougn 11
inability of trustees to realize their
would be t the
probability and extent of the oil
bilities; so if it wants to drill a turn of
holdings of Government loans.'
Govpotential. Two wells have already
new' well
in
Saskatchewan
or
The reason why in spite of this
been drilled in Libya, the struc¬
f
i
nl
ernment loans to attract the inrT- — —Somaliland it doesn't have to look
tures are favorable and any big
^ vestor. It was argued that, after the Government feels impelled to
around for so-makers.
Amerada
strike here could, of course, have
there was no justification for extend the list of permissible trushas
Pald
continuous
dividends
a
romantic effect on the price of
assumjng that we are doomed to tee investments is that the immO-V c'
Amerada
common.
The
French
uninterrupted inflation.
Reces- rality of exploiting those not in a,
people think that its Preside
are
giong are liablc to occur, and they
position to defend themselves by **
setting great store on these
(since 1929), Mi. Allied Jacon- mean iower profits and dividends, hedging against inflation has come
North African desert sands hoping
sen,
is
little short of a genius
not only to produce oil there in
They may also mean stabilization to be realized. Beneficiaries from *2
when it comes to sniffing oil, stak-.
^
power Qf fixed charity trusts are the most de- ;f
quantity and cheaply, but to get
ing
out
large low-cost, acreage jn^erest
bearing securities. Indeed, fenseless section of the commu- k'
away
from present reliance on
blocks in unexplored areas, and
Middle Eastern production.
optimjsts even envisaged the pos- nity. If the funds of such trusts'
making them pay off in millions.
sjbi)ity of a fall in the price level lose their purchasing power both &
Amerada has not been one to
For those who regard oil today r
publicize its oil reserves* but in¬ as a tired commodity, beset by. with a resuxting increase in the through*the depreciation of the f
reai vaiue Qf Government loans, monetary unit and through the
formed
estimates
have
placed
higher driUing and land costs, plus,
^art altogether from any rise in continued fall in the Stock Ex- V;
these at above 700 million barrels
proration, at home; and by greedy ^heir Stock Exchange quotations, change values of Government ■
of oil, and probably 3%: trillion
Sheiks and tax hungry, yenezue-/;
The1, recovery; of
Government Tcans, the benefits distributed by
feet of
gas.; If you were to divide lans abroad; and by the potential
loans and tbe setback in equities
such trusts might well decline be-V
these
figures
by 6,313,310
the threat of atomic energy as a com-.
however.- With the low, subsistence level, or the num- f
number
of
Amerada
common
petitive power source —
rV progress of the spring, equities re-.Jier of bencficiarios might have to
shares outstanding—you'd get an
Gassandras it s hard to m^ke a
c0VGrecj their former popularity be. reduced.. Other trust arrangeinventory in the ground, on a percase
for any oil stock, even so
an^ rose to new record levels,v inenls, too, are supposeCtp protect
share
basis
that
would
easily elite a one as Amerada.
J£ut .-foi^ whhe Government'loans declined); mihorsand others who are unableJ
justify present price around 93 V2
those with a more temperate and once more.*
»—•
It is utVu
•1
oncemore.- Today, tne culL of to "lend for themselves.
xoaay, the cc
for Amerada.

Canada

man¬

Demand

15

States,
with gross acreage totalling above
5 million acres. ARC has approxi¬
mately 2 million gross acres in

gas,

fuel

in

ests

made

.

By PAUL EINZIG

The anomalous position of

v:

.

expedient to shift its portfolio into equities weakens arguments
advanced as to why private investors should hold on to Gov-

i

For those who like a geographic
require a million
total by around 15%. This should
barrels a day more oil production spread in their investments Ame¬
tend
to
strengthen U. S. crude
throughout the world this year rada should prove most satisfac¬
prices and, accordingly, be some¬
ARC has important inter¬
than in 1958; and despite certain tory.
what favorable to Amerada. Based
We're going to

The Cult of

-

1958 import

the record

reduce

to

this

^

,

should
not greatly change from 1958—122
allowable producing days in Texas
(against 171 in 1957 and 191 in
1956). The mandatory limitation
on foreign
oil entry are expected
Proration

ucts.

Chronicle

and

lending verabdo depart from the traditional
; —
* types of trustee securities and in.

will

resume

autumn.

that

its

course

in

the

„

Volume

189

Number

5848

.

Financial Chronicle

The Commercial and

.

.

7

(2303)
«

elusions.

U.S. Gold Outflow Confronts

has

third

a

World's- gold
lost

United

The

about

last;,

States

strengthening our links center of its life, with all the
markets.
Our major' radical changes economic devel¬
link, particularly with the Ameri¬ opment inevitably entails. No one
can
market,
is
the
guarantee privileged to play even a small
those

with

was

than

more

was

looked to

Free

What

reserves.

year

still

the

of

matched

by what was gained in
private investment abroad. If we
By EUGENE R. BLACK*

which stands behind

traded

of

did

President, International Bank for Reconstruction & Development

of

Washington, D. C.
Our

gold loss hurts

no

V

obtained for the international

success we

r

investment banker:

as

gap

quantity discredits

on

whole

what

our

ness

,

For

on

United

States.

do

dol¬

difficult

dustrial

financially strengthened Europe,
thought we might short-sightedly jeopardize Free World's;,
growing response to challenge of international poverty.

meet the service of

dia's

all

bonded

not

these

But

excep¬

the

dent

achieved

in

nations of

the

the

of

non-com¬

munist* .world have become some¬

thing'like normal, if anything is
normal in this changing world.

I want to discuss briefly three

World

Bank

which

that

there is

suggest
in

the affairs of the

this

I

order

turbu¬

lent

the

result

of

achievements*

world

than

The eood nrosnects

will

hope
more

the

^moire

the surface.

L

/ The World
Bank

nSF

pensive things
power

aceT
ages

railroads, road
systems and
port facilities.

dependence

We

^11

the United

more,

get our

almost
exclusively

money

from

Eugene R. Black

pri¬
the Free World

vate investors in

who either buy our bonds or par¬

lending operations
another. Most of our
are
governments who

ticipate in
in

one

our

way or

borrowers

of
ot

World
world

From

world.

,

,

//

: V;

j e.ctiv

achieved

seem

may

improbable

an

conditions

business

much

which

under

in

these

'-/v./

times.
Yet

volume
from

getting
promising

are

we

of

borrowers

our

asking

set

of

e

two

First,

when

the

par when the

and

dollar reserves of the Atlantic
Community had been so increased

large

a

proposals

that

we

are

68 member govern¬
double our authorized

our

ments. to

we

have yet tried to market

This
event I mention because it is the
result of a new order in Europe's
outside of the United States.

implications
beyond the operations of the

far;

has

which

finances

them

the

to

on

difficult

facing

one

and

nations

each

involves

one

measures

economic

today

give further financial help

this

down

with

we

could obtain

of

agreement

a

broad

on

what

which India herself

in

the form of what is loosely called

not have

to be slowed further at

"foreign aid."
I do not intend this time because of a foreign
to
plunge into this complicated exchange shortage. The response
matter now, but I will cite one
encourages
me
to think that a
instance which suggests that there
community of interest exists in
is growing order here, too.
the Free World which could sup¬
,v
The country concerned is India,
port more permanent, collective
which perhaps presents the great¬
arrangements for meeting these
est challenge of all.
In India un- emergencies.

Bank's volume of

der-nourishment and

mass

ployment are living

realities for

more

the

unem¬

than 350 million people.

same

economic

has

development

financial

The

Free

India

time

Biggest Challenge Is Poverty

At

World

strength

has

been

taken

into

Continued

the

on

Financially
speaking,' these;
things are what the Marshall Plan
its

and

to
a

designed

successor, were

We

do.

can

large extent

say

today that to

objective has
that "phenomenal"

capital

Louisville and Nashville Railroad

Equipment Trust, Series U

•

invested abroad, a?
part in the industrial

was

substantial

nations of the Free World.
same

CS;//////■ $7,320,000

our

year

ernments

to

came

the

4V2%

In the

European

more

Gov¬

Equipment Trust Cerificates

|

American

market with bond issues
found buyers there than at

(Philadelphia Plan)

1

_

capital

Bank

and

sponsored meetings with the rep¬
resentatives
of
five
nations to

To

mature

1974, inclusive

$488,(X)0 annually June 15, 1960 to

any

recently

Then

Bank.

out

work

and

ways

the

of

means

helping
India
over
a
difficult
hurdle in its Second Five-Year
Plaik Here again an instance of
order in
the world which pro¬
vides hopeful implications for

the

time since the war. This year;
Japan followed suit/. And in 1958
it

became

who could

To be

possible for any trader
earn Sterling or Guild¬

Deutsche

marks

or

guaranteed unconditionally as to payment ojprincipal and dividends by
endorsement by Louisville and Nashville Railroad Company

almost

ers

or

any

West European currency with
merchandise to change those

his

MATURITIES AND YIELDS
(Accrued dividends to be added)

/

currencies into dollars at will.

Lbt

consider

me

each of these

briefly, starting with
bond issue in. Germany.
events

Undoing What We Had Built-Up
It

our

would

be

controversy
here last year

Recent Bond Sale in Europe
For

a

eclipsed

long time now our bonds

the

achieved

our

tragic,- I think,

*

Kingdom.
felt that
bonds

also

raised

Holland

But

we

and
we

.money

in

the United

have

always

could sell a lot more

outside

the

United

States,

particularly in Europe, when' the
price

was

right. Now market con¬

would

in

term movements in
we

The
-■

international

for

ditions in Germany—and in other

who

are

European countries

that

last

—|-

offer good

address

igan,




HALSEY, STUART &, CO.

economy.

example,

those

concerned

over

year

the

of

'

'

\

'

in
a

abroad

.

States

$3""billion

gold out of Fort Knox to think
moment before jumping to con-

INC.
+

R.

-

W.

*

■

PRESSPRICH

*

*

*

&, CO.

V

FREEMAN &, COMPANY

HEMPHILL, NOYES &, CO.

* IRA HAUPT & CO.

,

the fact:,

United

some

r

*

MERLE-SMITH

I

you

*

♦

DICK &

WM. E. POLLOCK

&

SHEARSON, HAMMILL &, CO. *

CO., INC.
i
^

shipped
by Mr. Black before the
Economic Club of Detroit, Detroit, Mich¬
*An

our own econ¬

adopted

-

the

ask,

>

oj these Certificates are subject to authornation by the Interstate Commerce Commission.
Offering Circular may be obtained in any State in which this announcement is circulatedfrom only
such of the undersigned and other dealers as may lawfully offer these securities in such State.

Issuance and sale

policies which:
had the effect of undoing what
we have built up so painstakingly
in

4.60

4.65%

be particularly .tragic if, >
pre-occupation with short-"

our

omy,

4.50%

1963-65
1966-74

the recession
and its after-effects
fact that we have
long-sought goal of
.

We i have;

Canada,

1962

4.40

over

well

been

7

4.25%

1961

if

received in the restoring the financial strength
market here and in Switzerland., of
the
Atlantic
Community.
It;

have

1

1960

futdre.

May 19. 1959.

was

meetings
were
successful;
the
foreign exchange will be forth¬
coming and the momentum of
India's
development effort will

how

much it is in its national interest
to

sat

prepared to take to bring matters
under control.
As it was, both

in¬
for it

deciding

again

and

Bank

India's needs were, and how they
should be met in the light of the

World's

Free

time

measure

con¬

of

fact

the

August
the

representatives
of - Canada,
the
United States, Britain, Germany
and Japan to see what could be
done.
We hoped that by bring¬
ing several nations together at

point

interest

of

terms

dustrialized

;

dependencies were such as to attract a sizable annual flow of pri-

capital.
Congress, as you prob¬ been won and
ably know, has been considering is not too strong a word to ex¬
this request and it is one of the. press the success of the past ten
events I want to refer to here.
years. 'Last year the stamp of suc¬
At the same time we have just
cess
was
clearly marked on the
announced
our
first public sale record. In 1958 alone more than
of bonds in Germany, the largest
$3. billion net of U. S, private
issue

Last

member countries

our

further cutbacks,
might involve aban¬
projects already started,

March

the

in India

further funds abroad

most

life

higher 'hy1.11^ standards.
One
Pro°f o£ this progress came last

-

gold

in

repayment.- This is probably the

that promises to lead to

J1"} a way

be deemed
things had

would

when

billion

would have to be made.

they cannot prudently bor¬

ventional

increase we had to look to our
to
do
own sources of capital.
Since we
chaotic vate American investment to help>raise virtually all our money in
meet 'their capital
/ •.<
requirements.- the private markets, we naturally

so

of

carried

row

lending increased 75% qverrthe
ing and are trying to govern in an and redistributed that currency/average
of the previous three
orderly fashion populations which convertibility could be restored; years. We are now lending over
are becoming increasingly aroused
and
second, when conditions in $700 million equivalent a year,
against a life of poverty.
This the industrial countries and their / In the face of this substantial
to the business of govern¬

are new

of disorder

_

happened:

invested
a

still

or

doning

helping overcome
so much

■

where

States, as was the case
More and more? so-called unin some degree with all of these ' derdeveloped countries are buildnations ten years ago.' ; /
'
,nS up the organizations and
Over
and
over
again during adopting the administrative practhese years it was said that this tices necessary to invest money
ob

cause

some

has

.

/

we have
than half

more

which

some

a

finan¬

The momentum of development
in

,

...

where

nations

restored

Tlie Big Challenge

the. Free World which have yet
to achieve their industrial revolu-

being
poor/relations of

less

or

i

War

^War II.
•°nr71
isHpreferable to

industrial

of their

root

we

problem of this day~the problem
of proverty in the countries of

and Janan after toerav-

Europh

plants, and/

now

the

outstanding economic

||
II

borrower;

India

uncalled, and
doubling the
guarantee behind

poverty where poverty is

f . their restored strength to

g

gest
in

than

cial strength to

ha ve/had considerable evidence
jbat: these same nations are now
willing and able to bring a meas-

msthe^postwar decade ^.was to re-

for very ex-

like

TTi

n,i?>
111

mainly

money

J

]

lends

time

same

directors

increase

more

measure

Bank's

Z%dtiqns/ZAt the

Our

ready and willing to divert

are

Germany,

and " our ; hope of being able
follow: suit in other Eur°Pean
'iniDortant" countries soon> are but symbols
of the restored financial strength
^5^of ,the,y Free World's industrial

the-resS?'tit

are

issLe in

hot iust

are

Wdrld

the

appears

on

Our/ bond"

encouraging1 turrf oi^events3

the

World's

Free

;

recent events in

debt.

Century will be profoundly
by the extent of In¬
success
in absorbing these
changes without - sacrificing re¬
spect for individual liberty.
India is the World Bank's big¬

influenced

our

dollars, almost all to help finance
projects in the current Second
amount of the
Five-Year Plan.
It was natural,
our
bonds.
We believe that this then, that when signs of a for¬
action will help assure our ability eign exchange crisis appeared in
to raise the funds we will need India last s u m m e r, the Bank
for a good marly years to come. should take the lead in convening
I am pleased to say that this a meeting
of interested nations
proposal has had a very kind to see what could be done. The
reception in Congress as well as Plan had already been cut back
in
the
British
Parliament
and to the core; the Indians faced a
elsewhere in Europe. Here is fur¬ stark choice:, either more foreign
ther evidence, I think, that the exchange had to be found some¬

degree, of
postwar
decade. < We
can
say
now
that
financial relations among the in¬
success

sale of Bank's bonds to
Mr. Black r quails at the

20th

doubling our au¬
thorized capital — increasing it
from
$10 billion equivalent to
about $20
billion — but leaving

against European imports into the

Pleased with the encouraging

authorized capital which is

thereby

tions

in India's great adventure
today can help but feel that the
destiny of free institutions in the

recommended

thing

one

still restrictions

part

by our member gov¬
but which may only be

own

—and, for that matter, restrictions

example of

be done to help a poor country overcome a

can

hurdle.

are

bonds in

our

portion—80%—

called to

lar

most constructive idea in our
as an

completed.

there

The world's
between our perform¬

that

of

ernments

say that all the busi¬
the postwar decade has

Vof

form

our

subscribed

pretty

a

been

economy.

foreign policy; and (3) refers to India

liquidity, which we
for the acquisition
abroad, isn't it

f F'do not

undo the

and precepts; (2) declares our euphemistic usage of the
"foreign aid" and failure to lay as much stress on quality

ance

term

-

(1) discusses

need,

good trade—the
kind of trade, in fact, we've been
trying to make for 10 years now?

points oiit inaverring itwould bti tragic if our preoccupation ;
with short-term domestic movements prompts us to

not

the

r6a!' wealth

really

,

including ourselves,* Mr.'Black

one

some

s

of

the

restored.

page

22

8

The Commercial and Financial Chronicle

(2304)

Avco

Corp.

—

Memorandum

Oppenheimer & Co., 25 Broad

—

day, Friday, Kenwood Country

Street, New York 4, N. Y.
Blossman

Dealer-Broker Investment

Hydratane

Orleans 12, La.
Walnut

South La Salle

Allied Paper Corporation.

Monthly Investment letter — Burnham and
Company, 15 Broad Street, New York 5, N. Y.
Also avail¬
—

Descriptive Circular — Keenan &
Clarey, Inc., Pillsbury Building, Minneapolis 2, Minn.
Japanese Stock Market — Study of changes in postwar years—
current

issue

of

"Nomura's

Investors

a

survey

Beacon"—Nomura

&

Street,

Oct.

-

Stieglitz, 52 Wall

•

New York 5,

N. Y.

Also available is

a

study of the economy

showing

an

up-to-date

com¬

,

circular

same

are

Averages, both

as

Annual

Convention

of

the Boca Raton Club.

data
Nov. 29-Dec.

review of

4,1959 (Bal Harbour,

Fla.)
Investment Bankers Association
Annual
Convention
at
the

Americana Hotel.
April 6-7-8, 1960 (Dallas, Tex.)
Texas
Group
of
Investment

Bankers Association of America
25th

Schenley Industries, Inc.

annual

Sheraton

Co.—Analysis—Purcell & Co.,
Broadway, New York 4, N. Y. Also in the same circular
is a review of A. O. Smith Corporation.
Koehring Company—Report—Loewi & Co. Incorporated, 225
East Mason Street, Milwaukee 2, Wis.
Lakey Foundry Corporation—Bulletin—De Witt Conklin Or¬
ganization, 120 Broadway, New York 5, N. Y. Also available

parison between the listed industrial stocks used in the DowAverages and the 35 over-the-counter industrial stocks

the
v;

meeting

at

the

Dallas.

50

Jones

used in the National Quotation Bureau

at

-

,

(Boca Raton, Fla.)
National Security Traders Asso¬
ciation

elers Insurance, It. II. Macy and
Kansas City Southern Railway

'

Nov. 2-5 1959

L. Vanden Broeck & Co., 55
Liberty Street, New York 5, N. Y.
Company, Inc.—Analysis—Hayden, Stone & Co., 25
Broad Street, New York 4, N. Y. Also available are bulletins
on
Werlitzer
Co., American
Metal
Climax,
Wyandotte
Chemicals Corporation, Raytheon, Poor & Company, Trav¬

at the first quarter's end.

Over-the-Counter Index—Folder

convention

Oct. 22, 1959 (Cincinnati, Ohio)
Ohio Group of Investment
Bankers Association annual fall
£ meeting.
*
* •

Gestetner, Ltd.—Review—Alfred

City Bank Stocks — Comparison and analysis for
first quarter of 1959—Laird, Bissell & Meeds, 120 Broadway,

annual

Warwick Hotel.

;

Haupt & Co., Ill Broadway, New

Also in the

(Philadelphia,

Consumers Bankers'Association
39th

Jewel Tea

New York

14-17, 1959
Pa.)

'

New
-

Chicago Milwaukee St. Paul & Pacific, and a
the Dow Jones Industrial Averages.

Yamaichi Securities

Stock Exchange

ing at the Royal York JKotel.

on

Company of New York, Inc., Ill Broadway, New York 7,

of

First Board of Governors meet¬

are

Pont, Homsey & Company, 31 Milk

Street, Boston 9, Mass.

New York.

to

yield

and market performance over a 20-year period—
National Quotation Bureau, Inc., 46 Front Street, New York

4, N. Y,
Portfolios

for various objectives—A. M. Kidder & Co., Inc.,
Street, New York 5, N. Y.
Recreation—Study of companies engaged in supplying products
and services needed—Edwards & Hanly, 100 North Franklin
Street, Hempstead, N. Y.
Yields From Tax Exempts—Review—Park, Ryan, Inc., 70 Pine
Street, New York 5, N. Y.
1

circular

York 6, N. Y.

Flour Mills Co., Iwaki
—

Association

Co., 52 Wall

Baldwin Lima Hamilton.

on

General Time—Data—du

of the Steel Industry.

Japanese Stocks—Current Information

same

(Toronto,

Canada)

Resistor

Trailer Co.—Appraisal—Halle
Street, New York 5, N. Y.

Co., Ltd., 61 Broadway, New York 6, N. Y. Also
a review of the outlook for Plant and
Equipment
Expenditures in Japan for 1959 and brief analyses of
Mitsubishi Heavy Industries, Nippon

Also in the

Fruehauf

available is

Cement Co. and

Herbert E. Stern &

—

N. Y.

General Cable—Review—Ira

Securities

"

Data

Broadway, New York 6, N. Y.
Flintkote Co.—Bulletin—Bache & Co., 36 Wall
York 5, N. Y.
/ - -

—

Women 37th annual convention.

Sept. 28-29, 1959

29

able in current Foreign Letter.

In

^

(

Co., 122

Corporation—Analysis—Daniel F. Rice & Cornpan j-, 141 West Jackson Boulevard, Chicago 4, 111.
Federal Paper
Board—Review—Hardy & Co., 30 Broad Street,
New York 4, N. Y. £
£££
I
Federal Paper Board Company—Analysis—Schweickart &
Co.,

Air Transport Industry—Analysis—Shearson, Hammill & Co.,
14 Wall Street, New York 5, N. Y. Also available is a report

Catholic Church Bonds

—

Street, New York 5,
data

v

,

Street, Chicago 3, 111.

Endicott Johnson

Erie

on

'

Clayton Mark & Co.—Memorandum—A. C. Allyn &

it is understood that the firms mentioned will be pleased
to send interested parties the
following literature:

Burnham View

Company—Analysis—Boenning & Co., 1529

Street, Philadelphia 2, Pa.

;

:-

Sept. 23-25, 1959 (Milwaukee,
Wis.)
: :
National Association of Bank

££.

L. E. Carpenter &

Recommendations & Literature

Club.

Gas Inc.—Memorandum—Howard, Weil,
& Co., 222 Carondelet Street, New-

Labouisse, Friedrichs

■

Thursday, May 21, 1959

...

are

Wall

bulletins

Aviation

Harry W. Crockett Joins
Draper, Sears & Co.
(Special to The Financial Chronicle)

Republic Industrial Corporation, Continental

on

and

Engineering

Corporation

and

BOSTON,

Continental

Crockett

Motors Corporation.
North American Refractories—Card

with

Harry

—

become

Draper,

MemorandumStrauss,
Ginberg & Co., Inc., 115 Broadway, New York 6, N. Y.
Papercraft Corporation—Analysis—Singer, Deane &
Scribner,
Union Trust Building, Pittsburgh
19, Pa.

'see

Mass.

has

Sears

W.

associated

&

Co.,

50

Portsmouth
-AMP Incorporated

Corporation—Analysis—Murch & Co., Inc., Hann
Building, Cleveland 15, Ohio.

Report—The Milwaukee Company, 207
East Michigan Street, Milwaukee 2, Wis. Also available are
reports on Johnson Service Company, Koehring Co., Lake
Superior District Power Company, Philips' Lamp, Stepan

'

~

—

State Life Insurance Company of Colorado—Survey—Life In¬
surance Stocks,
Inc., First National Bank Building, Denver 2,
Colo.

Chemical Company, and Transcontinental Gas Pipeline Cor-

f

Also available is

investments.

poration.
Aida Industries, Inc.—Review—Darius
Incorporated, 90 Broad
Street, New York 4, N. Y.
American Box Board Company—Analysis—H. Hentz & Co., 72
Wall Street, New York 5, N. Y.
Also available is a memorandum on Industrial Rayon Corp.

Western

a

review of Life Insurance Stocks

£.£•/,^j>££:££

Gas Services

as

££r• 7;££:" •'£££#£:£;£; ■;■' -'':-v£• ■

■

Company—Analysis—Underwood, Neu-

haus & Co.,
Incorporated, 724 Travis St., at Rusk Avenue,
Houston 2, Texas.
•
\
•••'•££•

,

Bear

American

Express Company-—Analysis—New York Hanseatic
Corporation, 120 Broadway. New York 5, N. Y. Also avail¬
able is a study of AEG (General Electric
Company of Ger¬

/

&

In

—

Investment

Field

—

Union

Commerce

Building, Cleveland 14, Ohio.

American Steel Foundries

*

Analysis — Reynolds & Co., 120
Broadway, New York 5, N. Y. Also available are reviews of

Association

Stock

of

American

Title

Insurance

Co.—Memorandum—Atwill

605 Lincoln Road, Miami Beach 39, Fla.
Analogue Controls
Bulletin
Bear, Stearns &
Street, New York 5, N. Y.
—

—

Co.,

&

1

Co.,

Basis
Clair

Exchange

Inc.—Report- -Adams & Peck, 120 Broadway,
N. Y.

Club,

June 5, 1959 (New York City)
Bond Club of New York annual
field

Club,

For

financial institutions

San Francisco

Association

Coil

Winders, Inc.

Flamingo
Calif.

the

Motel,

Santa

Santa

adelphia

Bought
i

r

Sold

•

>

ciation
Salem

Prospectus"

on

summer

outing
Country Club.

June 12, 1959

request

Municipal
York

at

many

Planning
Hill¬

offices at 2301

to engage

in

a

securi¬

Chicago

Homans

School

50

.j

Mass.

—

been

Richard

added

to

W.
the

Schirmer, Atherton & Co.,
Congress Street, members of
New

York

Boston

and

Stock

Exchanges.

Wood,

DETREX

CHEMICAL

Banking.

1

University of Virginia.

the

has

(Charlottesville,

Consumer

of

Shaul

Association

summer
outing at the
ridge Country Club.

Aug. 9-21, 1959
Va.)

are

staff of

the

Traders

Partners

(Special to The Financlal Chronicle)

BOSTON,

June 27, 1959 (Chicago, 111.)

INDUSTRIES

Aug. 14-15, 1959 (Detroit, Mich.)
Basis Club

(New York City)
Bond Club of New

Summer

for

Schirmer, Atherton Adds

ford, Pa.

Rosa,

of Canada annual convention at

■'

associated

Richard Seidler.

Spring Outing at
Country Club, Whit-

Whitford

..

June 11, 1959 (Boston, Mass.)
Boston Securities Traders Asso¬

utilities

Gladstone, Beverly Gladstone and

bor Club, Hewlett, N. Y.

Rosa

Banff Springs Hotel.

the

ties business.

£■• "£;

...

annual outing at Seawane Har¬

June 8-11, 1959 (Alberta, Canada)
Investment Dealers' Association

Common Stock

side Road

1959 (New York, N. Y.)
Municipal Bond Women's Club

Security Traders

at

been

formed with

June 26, 1959 (Philadelphia, Pa.)
Investment Association of Phil¬

Calif.)

of

Del. — Personalized
Planning Co. of America has been

June 26,

Scarborough,

(San Francisco,

charge

outing at the Columbus Coun¬

N. Y.

June 5-7, 1959

for¬

try Club.

day at the Sleepy Hollow

Country

Ex¬

was

ARDEN,

June 26, 1959 (Columbus, Ohio)
Columbus Stock & Bond Club

Club

Stock

Personalized

States Sectional meet¬

ing, Wianno Club.

field

in

of the

Boston

Crockett

years.

Consumers Bankers Association
Atlantic

(Chicago, 111.)
of Chicago annual
day
at
the
Knollwood
Club, Lake Forest, Illinois.
Bond

had

outing at the Tux¬

Club, Tuxedo Park, N. Y.
June 25-27, 1959 (Hyannfe,
Mass.)

St.

and

Mr.

stock trading department of Cof¬
fin & Burr, Inc., with which he

edo

(Detroit, Mich.)
golf outing at the

Country
Shores, Mich.

merly

York annual

June 5, 1959

Convertible Bonds.

Audio Devices,
New York 5,

1959
Club

Lakepoint

Wall

Armstrong Cork Company — Report — Thomson & McKinnon,
2 Broadway, New York
4, N. Y. Also available is a report
on

May 29,

Club, Radnor Town¬

(New York City)
Investment Association of New

ing at the Pfister Hotel.

pany.

£

changes.

June 19, 1959

Firms Board of Governors meet¬

Stewart Warner Corporation and El Paso Natural Gas Com¬

New York

ship.

May 25-26,1959 (Milwaukee, Wis.)

—

Crockett

Congress Street, members

Philadelphia Securities Associa¬
tion annual outing at the Overbrook Golf

Foundry — Memorandum
Francis I.
du Pont & Co., 1 Wall Street, New York
5, N. Y.
American Monorail Co.
Memorandum — Fulton Reid & Co.,

r

Harry W.

June 19, 1959 (Bryn Mawr, Pa.)

EVENTS

many).
American Machine

Lake, Minn, (preceded by

cocktail party June 17 at the
Nicollet Hotel, Minneapolis).
a

COMING

summer

Clair Inn and

outing at St.
Country Club, St.

BOUGHT

—

SOLD

Clair, Mich.

outing at West¬

chester

Troster, Singer & Co.
„

Members New York Security Dealers

Association

Country Club, Rye,N.Y. Aug. 19-20, 1959 (Des Moines,
June 12, 1959
Iowa)
(Philadelphia, Pa.)
V

Investment Traders Association
of Philadelphia Summer
outing
at the Overbrook

74

Trinity Place, New York 6, N. Y.

BAnover 2-2400

£




Teletype NY 1-376; 377; 378

(Minneapolis-St.
Paul, Minn.)

annual

Cities

Bond

picnic

Club

at

the

Waionda

M0RELAND & CO.

Country

dub.

Members

Midwest
Detroit

Sept. 17-18,1959 (Cincinnati, Ohio)
Municipal Bond Dealers Group

38th

of Cincinnati

and

outing at
White Bear Yacht Club, White

,

Iowa Investment Bankers Field

Day

Country Club.

June 18, 1959

Twin

•;

,

annual

outing

—

cocktail and dinner party Thurs¬
day'at Queen City Club; field

Stock
Stock

Exchange
Exchange

1051 Penobscot Building

DETROIT 26, MICH.
WOodward 2-3853
Branch

Office —Bay

DE <5

City, Mich.

Volume

189

Number

5848

.

.

and Financial Chronicle

The Commercial

.

(2305 )

in

formations

Future of Small Business Under
"fourth

Banking System"

of small business investment companies—hailed

,

describing lead indicators in business defaults

or

-j.

weaknessel.

country is on the point of ness with a larger competitor!
launching what has been called a Consequently, small business
"fourth banking system" to serve forms a large segment of the total
small business
enterprises. This business population of our coun¬
try. I am not facetious in offering
system will
Our

1958

of

Administra¬

were

wise

very

in

re¬

fraining from defining small busi¬
and in allowing the admin¬
istrator of the Small Business Ad¬

ness,

farmers,

the

congressmen

who wrote the Small Business Act

tion created to
serve

The

definition.

this

.

Credit

Housing

ministration

merger
or re¬

become

more

concen¬

The

percentages of busi¬
ness done by the largest four or
eight firms in leading industries
are about the same today as they

whatever

Administra¬

appropriate.

Congress simply as¬

tion

serted that

small business could

of

which,

nance

home-

owners,1
the

he

in

thought

its

field."

and

commer¬

cial

banking
Neil H. Jacoby
system which
provides a
Small business is important in
broad range of financial services
to
nearly
all
groups
in
the the U. S. economy. It is important
because it helps to make our econ¬
community. I refer, of course, to
the Small Business Administration omy more progressive and more
efficient.
It helps to make our
and the new Small Business In¬
vestment companies which it is economy
more
competitive and
engaged in licensing in order

now

meet the long-term

to

credit and

capital requirements of American
small businesses.
I predict that
this

system of financial

new

in¬

time, become as
important in its field of operation
as
the previous system have be¬
come
in their segments of our
stitutions will, in

economy.

.

.;.

/.

...

_

'■%;

-

business

and

makes

us

...

and

methods of small

finance

consistent,

-

Management

Finance and

Small business management

principles

yet

may

a

appear

in¬

little reflection

realize that the two sub¬

are really inseparable. The
successful financing of a
small

jects

Internal

out

Revenue

and

to

find

how many

from

let

the

employees—for

basis should be allied
inseparably to that of providing
management services. The small
enterprise, by virtue of the fact
-that it is email, is usually Wking
in
some
type
of management
skills, whether it is marketing,
production, personnel, or research

of

for

in

business

small

of

grow

number

emerge

the

The small

exploit the
immense
number of relatively small oppor¬
can

inventions

basis for

small

business

—

ness

or

five years,

will be

the

creating

can

The

accumulate

a

fortune today is

by realizing a capital ' gain on
equityinvestments.
Of course,
equity investments may be made
in land or stocks of large corpora¬

tions, ; but the largest potential
capital gains lie in investment in
small businesses which grow. By
limiting the rate of tax on capital
gains to 25%, the tax laws offer
powerful incentives to people to
invest in small businesses.-Apart

the tax laws offer the
businessman many oppor¬

ices by American consumers. We
have all seen that the American

not

automobile

salary.

industry is having to
itself to this desire of

adjust

Americans for something "differ¬
ent."
'Many Americans do not
another

Renault,

a

teric brand.

ferentiated

Buick; they prefer
Toyapet or some eso¬
The desire for

product

has

a

dif¬

perme¬

small

tunities to reduce his tax burdens
open

to

who

persons

professors or other
have to live, on a

A final reason why

be

a

is the creation
of a
banking system" to help
their growth. I shall re-

economy

"fourth

finance

turn to this

subject in

ple

very

widely, and created mi¬
opportunities for the

ni e r o u s

business.

smaller

Packard
sales

and

American

Motors

relatively good because
they cater to this desire—and they
smal businesses in their indus-

are

try.

growth

creates

new

business opportunities. As long as
we

turn

have

a

growing economy—and

our

economy

now

another

to

small1 business

of

in our economy are

making large-

U.

S.

enormous

mistake

small
their

businesses

financing

mercial

banks

to

believe

in

on

circumstances to be construed as an offering

May 15, 1959

$947,200

Di-Noc Chemical Arts, Inc.

capital, facilities, and personnel to
It is also said by some

development. Unless all of
the gaps in the small firm's man¬
agement skills are closed, finan¬
cial aid to- it will be of no avail.

ployees getting a weekly or
monthly pay envelope. American
society, they aver, is fast becom¬
ing
a
society of "organization
men". People are becoming less

Convertible, unless previously redeemed, into

due May 15, 1971,

1959)

Common Stock until May 14, 1964 at $18.20 per
share, subject to adjustment in certain events.

share, and thereafter until maturity at $20 per

survive.

three subjects:
position small
business
now
occupies in the
American economy ancl its prob¬
able future; second, about an as¬
pect of financing small business
which I think has been rather

(To bear interest from June 2,

and

1

I wish to discuss
about the

first,

of

our

titudes

sociologists that social at¬
are
making Americans
more a society of em¬

and

more

entrepreneurial, less enterprising,
less willing to strike out—each in¬
generally overlooked, namely, the dividual for himself—to make his
extent to which larger businesses fortune.
now
finance
small
businesses;
The facts do not provide sup¬
thirdly, about a chapter in the
port for these assertions. On the
history of small business financ¬
contrary, they show that small
ing in our country that many peo¬ business in the U. S., is holding its
ple have not read, or have forgot¬ position very well. The business
ten the rich experience of the Re¬
population of the United States,
construction Finance Corporation
according to the Department of
financing

in

smaller

not many years
:

businesses

ago.

-

spend much time on
the definition of small business. I
think business executives all un¬
derstand what a "small" business
is.
A small business is any busiI

shall not

vAn

Small

address by Dr.

Jacoby before the

Business Management^ Conference,
of California Cpnterence Cen¬

University
ter,

Lake

Arrowhead, Calrf.




is

Commerce,
about

4 and

now

*3

composed

World War II
through
recessions, through boom, through
—

kinds
-

of

economic

number

Stock the right to

in the ratio of $100 principal
each 30 shares of Common Stock held of record at the close of business on

amount for

expire at 3:30 p.m., Eastern Daylight Time,
During and after the subscription period the Underwriters may offer
Convertible Subordinated Debentures, all as more fully set forth in the Prospectus.

May 14, 1959. The Subscription Offer will
on

June 1, 1959

Subscription Price 100%
Copies of the Prospectus may be obtained in any State only from such of
the several Underwriters as are registered dealers in securities in such State.

Blair & Co.
Incorporated

million

since

The

is offering to the holders of its outstanding Common

subscribe for the Convertible Subordinated Debentures

of

different,
independent
enterprises.
This
enterprise population
has
been
growing by a net addition of
about 50,000 firms per year ever

all

The Company

of

conditions.

new

business

Bacon, Whipple & Co.

Hayden, Miller & Co.

from
from

or

of the securities for sale or as a solicitation of an offer to buy any
of such securities. The offering is made only by the Prospectus.

ISSUE

that

America

only

Continued

will grow

5V2% Convertible Subordinated Debentures,

aspect
financing,

"inter-business

assert

scale operations more efficient, as
time goes on, and it is harder for
the
little firm with its limited

*

extent of
financing" in the
economy.
It would be a

namely, the

great

Economic

Firms

Larger
I

of any

the view that small business
fighting a losing battle. They
that technological changes

moment.

Financing of Smaller Firms by
r

Studebaker-

are

This advertisement is not and is under no

press

a

ated the consciousness of our peo¬

for

NEW

small busi-

going to continue to
vital part of the American
are

nessses

of all non-agricultural

jobs in the U. S. economy. This
one
statistic gives an impressive
indication of' the high importance
of small business in our country.

has

only way in

ambitious and able man

an

from this,

I believe

economy.

ideas

enterprises.

Another factor that is

a

moment

accounted

S.

U.

size

certain

a

1

reached.

opportunities for small enterprises
in our country is the new empha¬
sis on "custom" goods and i serv¬

want

profession! If one adds to these
million people the additional
number that have entered a busi¬

and

new

after
been

which

take that as our definition of

us

about 40%

is

market is created.

firm

8

matter—is

long term

self-employment in business

profession during the past
and also adds another
5 million farm businesses, about
more
stable than it would be if
15 million Americans apparently
we did not have many small busi¬
nesses
along with large ones. It are engaged in entrepreneurial ac¬
When
you
recall that
is important because small firms tivities!
there are about 70 million people
open gates of opportunity to tens
of thousands of ambitious
men in the labor force, the ratio of
and women every year who want self-employed persons to the total
employed
to
experiment with new ideas, number of gainfully
methods, products or formulae. In may be not far from 1 to 4. This
1951, which is the last year for suggests that entrepreneurship
which we have good figures, busi¬ and small business are vital forces
in the contemporary United States
ness firms employing fewer than
100

will

are

cialization in skills and facilities.

or

business for that
predicated on compe¬
Now, many people will tell you
tent management of the financed
that American small business is
enterprise. In fact, it seems to me declining as an institution, or at
that
the
business
of financing least it is threatening to decline.
small businesses on a medium or
Politicians, in particular, often ex¬

business—or any

'

of

way

individual income
Many definitions will be appro¬ tax returns report income from
priate, depending on what our self-employment in businesses or
purpose may be.
professions.
The
most
recent
available figure is for the fiscal
Position of Small Business in the
year 1954, in which nearly 8 mil¬
U. S. Economy
lion people reported an income

helps to fi¬
-

a

"dominant

be

not

definition

should

and

mense

tunities that the big firm with its
big research laboratories and mas¬
sive
were in the Thirties.
equipment can't afford to
New inventions
multiply
I have referred to the number of touch.
day by day. We are living in an
independent business enterprises1
era in which the accumulation of
that the Department of Commerce
technological knowledge is
in¬
of the U. S. recognizes. In think¬
ing about the accuracy of these creasing not arithmetically but
figures, it occurred to me that one geometrically. Many of these new

establish

to

freedom

There

mass

trated.

Finance

Home

d

Small

and

The

checking their accuracy
would be to go to Statistics of In¬
come compiled by the Department

an

faster—an im¬
opportunities
the little firm.
many reasons why
small and new businesses continue The small firm is free of many of
to form a vital part of the Amer¬ the costs that the big firm must
ican economy. In the first place, incur. Being flexible and capable
of rapid movement, it can seize
many technological developments
are - of
the
kind
that
call
for these opportunities.
Another reason why the position
higher and higher degree of spe¬
New

Enterprises

business

refers

gainfully employed is about 1 to 4; outlines the forces favoring
new and small firms;
and refers to RFC voluminous files in

Farm

of

business, death

Favoring

highly specialized enterprise economy of the future- is bright is
is, par excellence, the small en-; the force of our anti-trust laws.
operation, and the population goes terprise. For example, the rapidly They protect the small firm from
up by 50,000 every year.
This is growing hi-fidelity reproduction unfair tactics that the larger firm
sound industry is composed pri¬ may employ to drive it out of ex¬
a persistent and strong infusion of
marily of small businesses. At the istence;
new enterprises into our country.
cutting edge of technological de¬ v Still another factor favors the
As a matter of fact, the ratio of
the business population of *, the velopment, a high degree of spe¬ smaller firm—our tax laws which
cialization and much experimenta¬ are almost
U. S., to the human population is
perfectly designed to
tion
and
now about 1 to 45, and that ratio
change occurs.
Mass assure a high rate of formation of
has not changed much for half a
production it not feasible, - until small businesses, although they
century. Neither has American the product is standardized and a hamper the growth of business

as a new era

generally overlooked and unknown extent to which larger
businesses finance smaller ones; finds business concentration
has not increased and that the ratio of self-employed to total

follow the

discontinu¬

Forces

istence every year, an even larger
number of new firms goes into

to the

'

the

insolvency, has averaged about
330,000 a year. Even though about
1 in 8 businesses goes out of ex¬

small business financing,
Jacoby offers several ground rules to help assure success

in American business finance. The well known economist

v-

because

every

and

or

Familiar with RFC experience with
Dr.

S.

tirement of the owner, bankruptcy

University of California, Los Angeles, Calif.

g

U.

380,000;

business

of

either

into larger

of Business Administration

School

the

around

number
ances,

By DR. NEIL II. JACOBY*

Dean, Graduate

is

year

9

George D. B. Bonbright & Co.

Sage, Rutty & Co., Inc.

get

com¬

other

page

28

;

"

10

The
Commercial and Financial Chronicle

(2306)

this

Inflation's Growing Unpopularity
Makes the Future Look Brighter

a very complicated and techbias, they may turn out to be
nical matter, and the actual proc- misguided.
V'..Less is far from
simple. But when '
The shoe industry's share of the

you

By WILLIAM F. BUTLER*

(1) Wages have risen

During World War II

1

bank economist

warns

price rise decisions, such
on belief U. S.

will continue to have

inflationary bias,

an

misguided. This is explained in terms of,

(2)

rise

for inflation; is heartened by progress

cures

U.

S.

has,

economy

We have
for

more

each

We have done

not by working harder, but
by investing in machinery and
equipment that has made possible

greater

a

output.

erowth in

made

possible

steady

investment has

bv

rata^ w^es and
salaries
and to
increlsed ch?
lldends' to investors
?
enabled

ahead of inflation.

This

to

us

nav

has

There

increasing

an

Consequently, I think

inflation

of

the

—

work

has

press

it

tionary impact

and

the wage-price
spiral. Stock
and bond

to

seems

affairs
Moreover,

inflation.
that

me

inflation,

we

can

con¬

beset

I

and

mar¬

kets

are

by fears

Reasons We've Had Inflation
To

on

spell out

for these

creeping in¬

sary

flation has be¬

time,

of the

some

reasons

been

arguing that a rise in
prices of up to 3% per annum on
the average is inevitable. What is
more, they argue that this sort of
small price to pay
for
avoiding the 'much greater
problems of unemployment and a
our

rate of economic

growth.
considered

my

judgment

misguided,

dangerous.
has

the

\

but

believe

I

potential to

economically in

this

in

time

ing.
of

that

total

to

number

level

of

since,

believe
on

the

inflation is the
domestic

scene

one

shoe

address

industry
May 4, 1959.

cur¬

comes

haven't

so.

prices

had

The official
have

prices

of

actual

price

increases

thing, there is

one

no

the

way

we

the

past decade, however,
have increased at a faster

wages

than

pace

the

to

pay them
For the nation

economy's
with stable
as

ability

(including fringes) have

years

quality

—

but it

ago,
a

price

'/.•'./•v

..

consumer

rose

early

8%

in

1956

./

> ■

price index is 30%

there is

no

flation is

a

Why have
economists

the

to

two

early

an

if profit margins are to be mainAnd profits must be maintained if business is to invest in

tained.

the

and 1

plant

now

to

necessaiy

support

equipment

the

nation

s

economic giowth.

years

1958.

credit

has

been

provided to support the price rise resulting from
increased labor costs.
not

the

from

Thus,

case,

ployment.

tight

If this

had inflation? Now

increased

and
That

is

and
budget

making

FOR SALE
COMMERCIAL & FINANCIAL CHRONICLES
In Excellent Condition—All
Canvas Bound

From

why

need

we

surplus in the

a

REctor 2-9570

Chronicle, 25 Park PL, N. Y. 7

resounding tumble. By working to contain inflation,

I have no pat

if, indeed,
am

suffer

remedy to offer,
exists, But what I

one

jf

inflation

a

about the

this will be

problems of avoid-

sion,

ing inflation.

level

price

must

stability,
met^

be

Sjhum^

of

steel strike inter-

a

third

quarter./: By

early pext

a'jhigh

employment
and ; full
operations
throughout

capacity
most'of

be done about inflation?

conditions

of rapid expan-

year

the

year, we should be back to

This,-; brings me to the third
I raised at the outset:
can

in

the end of the year or

What Can Be Done?

achieve

a

if

even

venes
■

What

con-

ers
about the business outlook,
and, in fact, I go a bit farther than
most. It is my personal view that

Thus, the shoe industry
have special reasons for con-

cern

notable

a

future

our

well witness the climax of; the
battle against inflation.
I share
the growing optimism of forecast-

gen-

than, say, the
industry suffers. People may
shift
more
readily into lowerpriCed
lines in shoes than -in
more

£00Ci

may

to

growth
and prosperity,
In these terms, the period ahead
—say the next two years — may

industry raises its
price more than prices generally
g0 up
^nd j think it is possible
eraj

however,

make

can

tribution

the

that shoe firms suffer from

a

business

of is that shoe sales will

sure

speculative

a

by

a creep. And
result/.Would
boom followed

probable

i

industry.
At that point
pass an important milestone
—the half trillion dollar mark for
we'll

two

total >production of goods : and
services. v Then 1960 could- be a
of Sreat prosperity and ad-

year

vance.

If

•

»

we can, as I believe we must,

demonstrate

in this period that
we possess the wisdom and the
maturity to deal effectively with

"

The increase in the money
suppiy must. be kept in line with
,.(2)

pie

potential growth in physical
production
-which means tight

tIie problem of inflation, I am
sureJ that ; my- optimistic/'views

and budget surplus in time

about our long—term growth po^
*tential HI turn out to be no more

money

business

expansion

and

high

employment.
While it

take time to

may

"

a,

a

meas-

—.

*

ure up fully to these requirements,
I would argue that we have been

from
of

policy of credit

a

moderate

months ago.

to

one

restraint

credit

six

ease

than

modest

America
have

and

rising

understatements.

American

admirable

an

to

the

business

tradition

occasion,

of

often

a

"tile late and frequently with

a

.

4,

remctance

that-. stemsi

the

from

Yery individuality of thought that
is so important in our. way of life,

Never before in his-

,

„

taction to the

.

critical period
measure up fully .to the

tradition.

fast

those

as

for

manufacturing
industry generally. Nevertheless,
they have increased about 50%
since

1947,

an average annual adof about 4%. As is the case

vance

to

industry

generally, this has
unit labor costs and led

up

price advances. Thus, the Gov-

eminent

indexes

30%

about

and

the

sumer

in

is

rise

in

retail
about

the

price index.

shoe

prices
in

overall

line
con-

-

that your

industry

prices have soared, pushing costs
up still further. The public prints
resound
vances
more

with

in

to

news

of

price

ad-

shoes, and hints of still

come.

pretend to know enough
judgment on the necessity

wisdom
Yet

of
I-

these

ivould

in

applaud
to

business recovery,

a

the

Congress

has

cr

Administration's-

press

budget in fiscal

for

"

far

exercised

are

the

that

continue

to

&

York City.

to improve, I
will
rise
fast

believe

receipts
to
give us a balanced
budget, at least for the calendar
1960.

These actions are significant—
they serve notice that the money
supply will not be enlarged to
support a general price rise.
If

^

increased

rapidly
than productivity, the result will
be lower sales and higher unemployment. Yet this does not mean
any

are

prolonged

ployment—it
parties

concerned

spiral.

as

their

of

unem-

only that all
will

have

behavior

in

be

learned

Fifth

Manhattan

Avenue, New

1

ary
■

.

Papier Opens
*

ties

business

from

offices

at

32

Newell Avenue.
V

/

'v-.

•

-

Joins F. I. du Pont Co.
(Special to The Financial

CHICAGO,
derson

is

Francis

South

such

I.

La

Chronicle)

III.—Duane S/'An-

now

du

connected
Pont

Salle

&

with,

Co.,

208

Street,

With Hornblower & Weeks
(Special to The Financial

Chronicle)

CHICAGO, 111.—Eugene J. qhesT

*

..

'

.

utt„rtrv,~

HornhW^r
i

f

*

,

Wppk<;

134
:

oa

amazingly

e &

■

i.

■

cL
With Uoodbody & Co.

Wifk

Inflation's Growing Unpopularity
Moreover,

666

members

Exchange,

TRENTON, N. J. — Philip B.
Papier, Jr. is conducting a securi¬

fast.

can

at

■

Recent experience in Eu-

rope—jn Western Germany, the
United
Kingdom,
France
and
other nations — shows that this
lesson

Company,

to

halt the wage-price

to

V

P

midtown

a

P. B.

more

period

means

open

office

enough
year

M"

of the New York Stock

business continuing

particular

influenced by a feelU. S. economy will
have an inflationary

'

Shields

warning: To the extent that these
decisions

'T

10 vlpen INew rSrancn

Moreover,

will

issue

this

/w,.

balanced

a

1960.

thus

111

greater responsibility than many
observers believed possible. With

manner

Decisions

actions.

I

moderate

Warns of Misguided Pricing

to pass

to

wages

problem in that hide

new

a

increases

wholesale

in

This

I understand

faces

show

40%

1947.

ing

j

be

to shoes.

decision

and




markets in recent years

most

Average wages in the footwear
industry have not risen quite as

inflation

I do not

Edwin L. Beck, c/o

the

f

when

.

—

in prices rather than

and credit

1837 —to —1945

immediately in N. Y. C.

the business community has
responsibilities for exercis-

grave

rears a»°

were

unem-

prevent

score,

is

adoption of policies that
inflation.
On this

secure

will

threatens to break out.

with

Phone

items

these

on

to

the

tory has the Fed moved so swiftly
exercise control over money

of

or

food

consumer

making progress in these direcrise in;tions. The Federal Reserve moved

a

money

federal

since

Write

for

the

that the upgrading in

me

—1

prices

Available

spent

of

,

coin is that enough money and

ary

in

at

share

but it

good,

will take hard and resolute action

you

inS firmer leadership. If businessor 30
aS°- °"ly clothin« me., decide that we are going to
and shoes have lost ground, and have creeping inflation* and1; bethe relative decline has been gin to rearrange their affairs to
Sreatest in shoes. It would seem cope with it,; we'll have a gallop

q|

The other side of the inflation-

pushed

adept

eaten away by higher prices.
All this is to the

an increase in unit Z.
(i)
The
increase irr average
labor costs—the wages and salaries
hourly earnings must be kept in
that have to be paid to. produce a
yme with the advance in the econpair of shoes or a ton of steel or
omy's efficiency — which means
cin
automobile.
When unit labor
wage increases averaging 3%
ner
costs rise, prices must be increased

question but what in¬
we

economy,

result has been

serious problem.
are

our

shelter have not followed

dollar

up

sales

ten

expenditures

and

rules—the

wages

gone

lower

made

human

the

in

that

prices.

whole,

a

wages

in

is a
growing feeling that
employment, and steadier
employment, is a better deal than
a
wage
increase that is largely

steaks.

I

improvements

the

by Dr. Butler before the
leaders, New York City,

is

this

the

fac-

our

told that children's shoes with

higher than in 1947, and the index

can

by

too-rapid
and prices would result in

In any case, there is no
denying
fact that we have had infla¬
tion during the postwar period—•

I

out

living standards and offer
greater opportunities to individ-

been

the

prevent us from enjoying great
prosperity and growth in the
years ahead.
*An

declining—we

we

a year or

index.

thing

that

number

is difficult to put this into

attractive objective if we succumb
to the siren call of inflation.
I'll
—

the

about inflation

when

for

those

However, I believe we can wreck
our chances of
achieving this most

strongly

fall¬

synthetic soles last far longer than

pletely unprecedented in history.

more

are

to make adequate allowance

way

am

even

or

wholesale

degree

turned

which

for

raise

at

of

happened

To

stable for the past year. Moreover,
these indexes may overstate the

$750

market

mass

ad-

economy

the way in

is

And

is

find

technical efficiency has advanced
no
more than 3%
per year.
The

indexes of overall consumer

for

this

time

for

and

living in this

put

tones.

a

the

the pro-

sig-

fantastic

more

But when you look at what has

consumer

as

of i industry's

there

the
the

out

stomach.

point
rising,

any

bit ironical that the

concern

a

country—a horizon of opportunity
for each individual—that is com¬

a

create

food

Adam

was

that
limited by

capacity

narrow

specific

a

some are

exceeds

stable

a

of

—-

This

vances.

of

pointed

economy/ j^g not extended

wages

more

in substituting machinery
for manpower during the recent
recession. This has brought home
the lesson that it is possible to
price labor out of the market, just
as
some
domestic products are

question

upwards:—when the
individual prices that

of

are

the

as

should, raise
the technical efficiency
ductivity

desire

annual rate of about 5% per
annum
whereas
the
economy's

is

rising

any

billion—three-quarters of a tril¬
lion—by 1970. This would make
possible

stable and

prices

at

We have the technical

lift

to

the

But when the general trend

rent

ahead

Our total production
of gGods and services will be half
a
trillion dollars sometime early

ability

in

This does not

prices

some

some are

It is

literally fabu¬

a

rise

a

have inflation.

nation

move

to

that any rise in
price is inflationary. At

positively

lous fashion,

next year.

amounts

mean

that

that these pronouncements are not

only

and most mean¬
definition of inflation is

general price level.

are

is

can

simplest

ingful
that it

rise

increased

Even

success

purchases which has featured most

have

and

can,

In

inflation? and;
be done about it?

causes

a

slow-down in

It

What

The

William F. Butler

many

is

neces¬

in

wages

should

it

think

who

,

uals-

(3) What

same

inflation

conclusions, it is

to consider briefly three basic

(2)

economists
have

they

,

Smith

"
^
:clear to
recent; years is

grows.
It is, rather, that they
have increased too rapidly.
We

(1) What is inflation?

of

life in the U.S.

At the

that

products

questions:

way

Our problem
not

we

the part of in¬
vestors that

come a

'

re-arrange our

will argue
that we have been moving in that
direction and that our prospects
of
achieving growth and stable
prices are better than is generally
appreciated.

in the Federal

budget

so

avoid

tain

deficit

the

to

to

as

been full of talk about the infla¬
of

must

we

.

recently about the prob¬

concern

lem

been

aecline

fpchViic41'effk-iencv &reater today than ten

our

good.

ny

g°ing for the so-called necessities being priced out of international
of food, clothing and shelter wo aid markets, - To put it another way,

man¬

this

admonishes labor to choose between pric¬

tremendous growth

a

the

man-hour of work.

ing themselves out of the market and more employment with a
non-shrinking dollar; and forecasts a year of rapid expansion,
a $500 billion GNP somewhere between end of 1959 and
early
1960 and

resulbne from the
lesuiting trom the

growth economy.
aged to produce

ing in adopting sound policies, which he admits requires hard
and resolute action;

finance the

fo

with the sole exception of the de¬
cade of the 1930s, always been a

mak¬

we are

nrkes
pi ices

Now

unpopularity of inflation by a public which sees the results of
wage-spiral and, two, declining share of consumer dollar re¬
ceived. Dr. Butler explains fundamental causes, consequences,
and

in

rredit

and

mnnpv

increase in unit labor costs.

growing political

one,

Enough

be^ TvailahlG

one

standing

did a decade ago. Such a decline
would be in line with the traditional view of consumer spending
patterns. It has long been believed
that as incomes rose, the snare

more

Thursday, May 21, 1959

.

nificant is the widespread under-

income on shoes now than they

has

economy

turn out to be

may

rap-\

those

as

indicated for the shoe industry, based

no

of their

one-third less

spend

ers

idly than the economy's technical
efficiency—that is, the economy's
ability to pay higher wages without raising prices; and
/"••' / -.

Vice-President, The Chase Manhattan Bank, New York City
Former Chief Economist of War Production Board

A top

for inflation:

reasons

.

is becoming quite unpopular politically, and that the public believes the wage-price spiral does

cut through the underbrush,,; consumer dollar has ; declined
find that there are two basic> steadily in recent years—consum-

you

.

there

is

a

growing

amount of evidence that

inflation

is

Jfc.

CHICAGO, 111.—John A. Raascb
now with Goodbody & Co.,

North La Salle Street.

Volume

189

Number

5848

.

.

The Commercial and Financial Chronicle

.

(2307)

Recent Real Upswing

,

Sharing Increased Productivity
DR.

Staff Member, New York

V*

Renegotiation economist

bu'flc;Jv

the

gains

nxl .'iaioiSf

so

proposes

lapse into the continuous

to

not

as

Eisenhower's

recent

_fa:-.issage.to Congress stressing the
}
for preventing, or at least
further inflation

.'f<r?hOSt
Mt
r*>

hr.

■

n

recent

•

whole

a

,

series

of

pro-

/

is

the

.

35 %

man-hours.

to

is

leaders who

the

over

ly

to

combination

a

"

combining

But

continuous

has

■fn. ' been going
ever

on
since

A 940.

Nearly

.

"every, person
Jn the rountrv

^of

.

,

~

equipment, improved meth¬
ods, and elimination of wasteful
practices.
yr; In

in

would vary from year
and the fractions to be
received by each group might well

the

that

of

be

.2% of sales.

-

productivity,

is

addi¬

of

productivity

management

of

efit

and

money

in

such

and

propriate

way

a

VTit. t0Thn« transportation

nessed

and.' .distribution,

further increase in

a

benefits

of/their

most

V br

be

4 The

Terred

stocks

from

incomes

the

or

on preproceeds of

^^ii^rance, policiesC:

-

■,

.

the .-buying power of their
endowment incomes shrink enor-

^inou sl^

as

the prides of the things

.

.;,

;

.

custom, fb whom
increases always come long after
or

r;1 the cost of living has risen, and
the increase at least enables them

to
or

James &

Saxby Formed j

KOLOA, Kauai, Hawaii —Nor¬
man James
& Dorothy M. Saxby
have formed a partnership to en¬
gage in a securities business. Mail
of

address
•

* '

firm

the
•'

*

.

r-

is

427.

Box

•*

;

Now Investors Reserve
followed

"

Wages

Prices

KANSAS

CITY, Mo.—The firm
of
Washington
Planning
Corporation of Missouri, 15 East
Gregory, has been changed to In¬
vestors Reserve, Inc.

name

100.0

100.0

100.0

1959

104.0

101.2

99.6

I960—108.0

102.4

99.2

1961

112.3

103.6

98.8

1962__

li6.0

104.8

98.4

York

120.6

106.0

98.1

of

D. C. Rothman Opens

,

David
in

1963*

f and

owners

^
^ CV, t(| circumscribe beFau!f HJ1 i?S!S an5 S?
PPtf8

to

were

productivity,

to

;

a

fices

Rothman

C.

is

,

engaging

securities business from of¬
100 William Street, New
City, under the firm name

at

David

C.

Rothman

Co.

»

c

%,

.

11
This advertisement is neither

it

occurs, not

but

What if increased

ductivity

y

an

offer to sell

nor a

Solicitation of offers to buy

any

of these securities.

*

The* offering is made only by the Prospectus.

f

-

NEW ISSUE

May 21, 1959

only
with

to

were

pro¬

divided

be

AI berta Mun ici pal

three
parties to the production and sales

equally

between

these

process?-

what
such
few fairly

-a

short time. Even

powerful union
which " is able to stay ahead, br
abreast of, the rise in living costs,

Financing

Corporation

order to get an idea of
be likely to happen in

In

National City Bank, in discussing .4would

$50,000,000

;

(in the form of Tower

consumers

prices)?

as

workers
increased

snare

themselves,

between

keep changing, and much of the

organized

•

agree

case/ let us make a
increased productivity, states that
'tAC average annual rale of >in- 'realistic 'assumptions:
V°
yease in gross national product ;; (l) That for an appreciable
toi 1909-1957, mcasiued in: con- ;period of time, say five years,
?'
through increases in wage rates slant dollars was 2.9%-per year.i productivity throughout manufac¬
f - and fringe benefits, has much of Even this does not give us v an turing, and in some areas of min¬
to catch up for a

as

!

1958____

■

profits

However, the major role played by
added plant and equipment in increasing
productivity and the consequent need for
large plowback of profits is extremely
important.

follows:

as

in

both.

the results would

approximately

increase

table might be reduced,
workers or consumers,

I

As

3red
dollars- Tnfe woo wish
jo .^se measurements of productivity attempt to make allowance
jor these changes. For example
the January Letter of .the First

law

were

of

.

;lf !

riods by

plan

years

the

....

Auction sales and costs is .neas-

In this same group are those with •

same

of

rate

in

benefit

*

production is a physit 1^6'see-saw struggle of" the ]past,

'V: they have been buying increased.
incomes fixed for considerable pe-

the

'

•

•

'

five

Owners'

f What if, instead of continuing
mcrease 111

"Educational
% f-and fcharttable institutions have 1S
seen

shown

Thus wage

directions.

two

Year—Profits

-

pro-

Suggests- Equal Tri-Partite
K'
Sharing:
f

>"

*

i>oiid interest, dividends

the increased productivity
industry in the future.

■

If the

?

for

All that is necessary

majority of those most

share
Of

several' millions

the

from

repeated
of most

and
prices

concerned understand what is pos¬
sible and

Submits Results

fddctiyity, with consequent gains

GNP Productivity Rate W

.

consumers.

and

the

commodities.
is that the

of small stockholders will receive

for

,

is

of all

earners

small

in

decreases

desirable, and agree to

-

estimating total increased
productivity (1.2% of sales), we

part of the last 13

with

tually

In

years, "owners and organized labor
have alternated in seeking to ap¬

rising

and increasing profits can
continued, not only without

be

.

the

is

has

enough

wages

declined
faster than cerned, profits (which seldom ex-.
production; after April, pro¬ eeed 10% of sales) will increase
duction ; increased
faster
than 4%, wages will increase 1.2%, and
yet prices can fall .4% to the ben¬
man-hours. :

During a good

But

further.increase in prices, but ac¬

did

produc¬

different.4

been shown to indicate that

nonlabor

Here

sales.

increased

year,

man-hours

con-.

we

.

!

9.8%

or

.

ik:i^nsions, othars who ..receive all

•

(2.9%

So here

increase

an

as

production has in¬
in this first year,

2%
means

tional;

J'to^ owriers, then workers, etc.

^'

sales

total

creased

themselves all or
that the joint product is larger in most of the gains from increased
productivity.3 Typically, such
quantity than before, in relation
to the quantity of productive fa<> gains flow entirely to owners for
tors that went into the creation of a few months to a year, then a
the product. We have been secur¬ new wage bargain brings a part,
ing increased productivity; in the or all, or sometimes more than all,
of such gains to organized work¬
United States in most manufac-'
L»r. John J. Quigley ••
during businesses,: and in many ers, until a further period of pro¬
other industries, stich as mining, duction f improvement
has
wit¬
iniured to some
otner industries,; suen as milling,
labor

near-

which

It is, if

as
an example of
be accomplished. Ac¬
savings from increased pro¬

ductivity

productivity to be divided.

new

and are willing to share,
benefits._ T
AT:'

Increased

;

!'.cost of living

.

of

which

attributed

tivity,

rise *in : the

•

1%

now

an increase of about 5%
productivity as usually meas¬ part of factory overhead (formerly
at least 10% of sales) is now 10/102
ured. This particular increase was

see-saw

tinue to obtain increased
its

T,'| Hre concerned

^

of sales. Total labor cost

reduction of labor cost).

This

approxi¬

are

used

are

tual

becomes about 34% of sales

In October, for ex¬

in

estimates

what might

..

•A'v Scientific

V.

lation

the( 14 months beginning in
have not counted small decreases
September, 1957, increased pro¬
in materials costs and in general
ductivity
was
secured
rather
and administrative expense which
does not want to pay ever rising steadily,
whether
in
recession,
many producers obtain.
which continued through
April
prices for them.
If the total increase in produc¬
r vJt
is possible for all - three of ,1958, or fin recovery, which oc¬
these groups to receive increased curred in the next seven months. tivity is divided equally between
benefits from more efficient, man-' During
the winter of 1957-1958 the three groups directly conperiod of time?

m

by political,

V

(35% direct labor
about 15% as the labor part
factory overhead) of cost of
sales, that total labor cost was

demonstrated.
The
just quoted has called

increase

These

mate, and the results of the calcu¬

in

,

'***"

c'business and

v

before the saving

of

indicates,

-benefits from more/efficient man-'
-•
ufacturing operations over a long

houn cements

;t

$%

Since

3%.

reduced

cost

struggle of the past.

isep.
./President

T*

labor

and

has

months

ample, it was stated that, on a
seasonally adjusted basis, facto¬
ries increased production 9% be¬
tween: April and August with only

triparted division of in¬
creased productivity as best way to .control inflation. The
author applies his proposal to data for past five years, based
on
certain assumptions which he specifies, and approves of
the results. He finds that management, labor and consumers
can benefit from increased future
productivity if they are witl¬
ing to agree what is desirable and possible in order to share

.■

amply

during 1958.

Regional Office of the

Office of Price Administration

:./i kr

is

year

about 50%

was

attention to this in several issues2

Regional Renegotiation Board >•/'':

Former Chief Economist, New York

v

been

recent

Bank Letter

QUIGLEY

JOHN J.

in

amount,

The Best Inflation Contiol
By

ous

total

That increased productivity has
been '.real,*
and
substantial
in
v

11

4/4% Sinking Fund Debentures

X"" the member of a
"

/

Dated

Due May

May 15, 1959

15, 1984

Principal and interest payable in United Stales Dollars and guaranteedunconditionally by

,

prices,

the increase offset by rising

'

.

^

and would probably progress

ther .and faster

ri?

increase in wages, with star

some

ble,

■

even

or

decreasing prices.

v.

..

;

•

.

only beneficiary
Rising r prices is that

of

The

,

have

could

if he

fur-

«

all-owners

by

(not

whose sales prices go up

niore rapidly than do his
■

any

purchase

^<»vjjpr|ces>

wages and other costs. Even
^•>Uiere the benefit:is limited to the

period during which the business
volume stays at or near a constant
JPvel.' Sooner or later, in almost

business, a point is reached
A, beyond which sales are considerably smaUer as prices continue to

ir
■,

eyery

enough smaller to squeeze
"total profits below their former
lOvels. Indeed, more than once in
rise,

.Methods of measuring tne
amount of increased productivity
that occurs during a period of
.time, such as a year, vary somewhat, depending on who does the
measuring. Many economists, and
most labor unions, customarily
measure it as a percentage .of the
amount of labor that is required
to produce the quantity of prodmet in question. This is a perfectly
usable metnod, but to omits mention of the machinery and equip-

.indirect labor production costs.
'

That benefits are received
immediately after the in¬
productivity occurs, that
is during the same year. For ex¬
.

(3)

'8<

■

i

| ;

;

-

i

'•

"

: ?

,: *■

"

:

Three Groups Can Benefit '
.

To

..

.

,

putth^ problem briefly---eacH

;rl sarty to production and sale would
fike increased

income,

of this method tends to create the

impression that the wage-earner
alone

has

caused

productivity. >
may

but would ;Q^ier

In.

increased

the
some

cases

it

have occurred entirely from
causes,

and

sometimes

creased

ample,

a

ginning
based

labor contract at the be¬
of the year might be
the

estimate of'
productivity to be
secured during the year, with the
workers getting one-third of the
on

agreed

prefer to avoid rising pnees of.the
•■*a.fcingshe wants to buy.

like higher

,earner ai0ne responsible. A better
way to measure increased producr-

The^busi- ^

;
-

Tf, would

profits, but he cannot continue to
get them if the wages, raw material costs, and other pi ices he pays

eontinue^steadiiy ^t o ri s e, the
;wage-eai^er^ wants ou d P eferasc
ing.wages, but he
to
avoid

a

ter

cost of living^ the
wants the same or bet¬

rising

consumer

products, if possible,




but

he

almost

tivity
cosls

is
Gf

no

case

is

the

wa

prices

were

the

On

basis

of

Jhe

these

the labor cost of

November and De¬
also Staff Study of Federal
Board, summarised by the New
Times, Feb. 8, 1959.

Op.

cember.

Ripley & Co.

Smith, Barney & Co.

>

Incorporated

Corporation

relate output of all
production, either units

York

cit. October,

;

3 The 'author

is

aware

the

dol]ar am0unts of all other costs,
dollar value of output to dollar
a~ount of all costs;
..
s.

'.1

■

White, Weld & Co.

Lynch, Pierce, Fenner & Smith

Salomon Bros. & Hutzler
Gairdner & Company Inc.
.

Burns Bros. & Denton,

Bell, Gouinlock & Company

7

Incorporated

,

t

Nesbitt, Thomson and Company, Inc.
W. C. Pitfield & Co., Inc.

Equisec Canada Inc.

Inc.

i

Greenshiellds & Co (N.Y.) Inc
Midland Canadian

Dawson, Hannaford Inc.

Corporation
;

Dominick & Dominick

Bear, Stearns & Co.

i

Mills, Spence & Co. Inc.

Harris & Partners, Inc.

'

that

much

•

Hallgarten & Co.

of

F. B. Ashplant & Co.

Robert W. Baird & Co.

labor have arisen entirely

1 p.

Lehman Brothers

f

_

.

<

& Co.

See

0f output to dollars of labor and

y

McLeod, Young, Weir, Incorporated

Eastman Dillon, Union Securities

Reserve

to

A. E. Ames & Co.
Incorporated

BIyth & Co., Inc.

assump¬

quantity produced the previ-

e.

Harriman

The Dominion Securities

Incorporated

tions, we can calculate approxi¬
mately how much increased pro¬

2

Wood, Gundy & Co., Inc.

The First Boston Corporation

Merrill

lowered.

In the first year

Spj|e his best efforts to prevent it.

j

increased

the

ductivity would occur each year.

de-

Copies of the Prospectus may be obtained from any of
the several underwriters only in Stales in which such
underwriters are. qualified to act as dealers in securities
and in which the Prospectus may legally be distributed.

'almost

(paid for with
owners' estimated amount. Owners would,
*the past, a continued rise in prices money or with money borrowed of course, benefit quarterly as
Has led to a "buyers' strike," and by owners) which also contribute
higher profits were recorded, and
this may well happen again.
- v
;to the increased output. The use .'consumers would benefit when
JV:Uf

Price 98% and accrued interest

output, and partly in absolute re¬
ductions in dollars of direct and

*

.ment-

(Canada)

uctivity consists partly in average
increase
in
physical volume of

business

means)

"

-

cry and equipment was employed
in helping to secure these results.'

ever-

owner

PROVINCE OF ALBERTA

accurate picture of increased pro- ing, transportation and distribu¬
ouctivity, for the work force-em- tion continues to increase steadily
Ployed increased substantially in fat something like the rate which
that period, and. a greatly ^inljas been secured in recent
creased quantity of plant, machirx- </., (2) That this increase in years.
prod¬

,

yains

tVvMed

*•'-*—

*•——.»

from increased
prices of products and services. In this
article he ignores this type of gain, in
■order to-concentrate on the gains which
consist of increased productivity and the
way such gains my be distributed.

Alex. Brown & Sons

Incorporated

McMaster Hutchinson & Co.

Pacific Northwest

Company

The Commercial and Financial Chronicle

(2308)

12

planning at
the local level is generally too
short-ranged and too piecemeal in
approach. Most communities have
little idea of the magnitude of
their task in supplying the neces¬
sary capital and the best method
of doing so. Few understand the
role the State plays in school con¬

Mnnicipal Bond Financing
ARTIIUK LEVITT*

By HON.

Comptroller, State of New York

official announces initiation of a
financial advisory service to aid school districts contemplating
bond sales, to implement law providing subsidies to reduce
excessive interest charges. Urges underwriters and dealers to
finance

State

York

New

is¬
and
sale
of
Municipal
As Chief Fiscal Officer,

of matters related

suance

bonds.

to the

Comp¬
troller
is re-

the

sponsible

mSMM

for

supervising
fiscal af¬

local

Slow Down

of

units

the

The

a slow down
of vitally
public facilities is not an
.die fear. Already concern is be.ng voiced over the ability of New

govern¬

in

the

in

ment

exception of
of

the cities

Y

e w

o r

Buffalo

fork

k,

lew

and

In

Rochester.

this endeavor,
I
am
made

Hon. Arthur

Levitt

constantly"
■:
;•
aware of the financial difficulties
^

experienced by community after
community in attempting to meet
the still heavy demand for new
schools,
water supply
systems,
sewage disposal plants, hospitals
and other essential public facil¬
we have wit¬
increase in Mu¬
nicipal bond issues as commu¬
nities build to meet this backlog.
recent

nessed

In

years

steady

a

1946

some

$1.2 million in Mu¬

nicipal obligations were placed on
the
market I by
communities
throughout the country. By 1958
this amount had
grown to
$7.4
billion and this year the figure
may
I

in

well

am

above $8 billion.

go

concerned that the growth

demand

investor

with

keep

pace

new

offerings

rates

to

would

rise

be

fail to
increase in
causing interest
may

the

even

communities to build

State

facilities and replace obsolete

plants
from
existing
revenue
jources. One significant factor is
the cost of financing. In just the
last eight years, debt service on
districts

school
has

increased

borrowing

253%.

by

And,

the largest single

constitute

as

item

budgets of State and local

governments. Almost 40 cents of
every State dollar goes to pay for

unfortunate

an

the

intrinsic

value

of

devel¬

the

se-

#An address by Mr. Levitt before New
York Society of Security Analysts, New
York City, May

This

problem cannot be mini¬
mized.
Recently we have been
experiencing a taxpayers revolt.
In

13, 1959.

District

School

District

in

the

after

State,

School

bond

pro¬

posals have been rejected by the
voters.
During the three years,
1956 through 1958, such rejections
increased

have

from

22%

to

nearly 40%, and indeed, the first
three months of this year,
all bond issues submitted

voters

were

rejected.

must be built and

found

44%. of
to

must be

to do so at reasonable

This

the

Yet, schools

means

cost.

problem must be met by

cooperative

effort

local officials.

judgment,

is

of

A first

meet future

State

step, in

and

future construction.

announcement

is

survey

also

To some

procedure

such a
their fiscal system.
adopt

in

Proper planning of this nature
serve
to limit, to a degree,

can

the magnitude

of the demand for
capital funds and thus bring sup¬
ply and demand into better bal¬
ance.

In

letter to the Governor sev¬

a

weeks

ago,

district

school

by

I
proposed
a
school district

analysis of present and future fi¬
nancial needs.

Governor has

The

recently announced that
this

is

nature

taken.

I

to

survey

a

be

under¬

pleased and I trust
will, in time, be
to include the capital

am

this

that

effort

broadened
needs

of

towns

and

a

community of its

neither

an

offer

to

sell

nor

solicitation

of an offer to buy any of these securities.
The offer is made only by the Prospectus.

NEW ISSUE

MAY 13.

1939

absorp¬
of school
interest

rates.
In

-

1956', when the tight money

policy of the
Federal
Reserve
System accentuated the problem
of high interest costs, I proposed
the creation of a State Authority

Because

counties,

the

supply of munic¬
ipal bonds is a major factor in
cost of financing, it is important
to
consider
means
of
equating
supply with demand.

In
conjunction with the Au¬
thority, plans were drawn to pro¬
vide a financial advisory service
to school districts contemplating

Such

the. sale of bonds.

a

service

designed primarily to avoid,
as possible, undue competi¬
through more ade¬
quate timing of sales.

was

far

as

tion for funds

decision

My
service

establish

to

the volume of bonds and notes is¬

State

increased

school

by

378%

and the trend is upward.
One

method

of

supply and bringing

enactment

this

of a law
providing State aid payments for
the purpose of reducing excessive
interest cost

year

school bonds.

on

The

law

provides that a school district
may be allotted such State aid, if
interest

its

costs

the

exceed

av¬

interest cost for all school
district selling their bonds in the
past six months plus
of 1%.
The aid payments will be equal
the

to

the

to

Government

reduce

favor

I

purpose.

district's

of the

over

bond,

as

payments will be
30-year period.
The district

the

made over

While only

a

small
will

districts

school

of

the

requirements
aid, it is
reasonable to expect that a very

for

the

stringent

additional

State

large number of districts will file

a

of

case

velopment in

the

an

adverse de¬

money

market

sudden rise in interest rates.

current

Studies

the

by the

revenues.

in my office
cash surplus of at least
$100 million this year as a result

OPPENHEIMER FUND, INC.

conducted

a

of

the

increase

recent

in

State

With the present economic

taxes.

boom, the next fiscal year should
produce an even higher surplus.

legislation, which man¬
responsibilities to
the Comptroller, makes this fi¬
nancial
advisory service highly
desirable.
It is my plan to make
dates additional

this service available to all school

New

Bill

A number of measures

pending in Congress.
ure

Common Stock, Par Value $1

fi¬

in their

to

order

in

stimulate

investor

school

with brochures and other descrip¬
tive literature on the advantages
of

investing in New Y'ork

State

School obligations. As you know,
our brochure on Public Schools—
A

Safe

Investment,
In fact, we

ceived.

for additional

ers

Let

me

well
still

was
are

ceiving requests from

re¬
re¬

bond deal¬

supplies.

assure

you,

however,

that every effort will be made to
avoid duplicating the work pres¬

ently undertaken by State De¬
partment of Education in connec¬
with the planning of school
building construction, nor will we
attempt to replace the present
services rendered by private con¬
tion

cerns

bond issues,

on

addition

In

to

v

the

efforts

of

public

officials, the underwriters
can
be
extremely
helpful in stimulating investor in¬
terest and in achieving a wider
distribution of municipal bonds, i
One way would be to promote
individual bond issues even be¬
and

dealers

they

Western

market.

to

come

New York Bank does

A

districts
ket

in

the

State

who

are

mar¬
who are actively consider¬

or

ing

such

a

This

move.

service

will

be available after July 1 on
voluntary basis so that school
districts can, on their own initia¬
tive, receive information on vari¬
ous matters relating to bond sales.
a

of

bond

sales.

Information

that

the

we

are

One

now

meas¬

which I think is of particular

out to all of their
pre-notice of bond
sales
together- with
excellent
prospectuses on the issues to be

on

most

propitious time to sell
their bonds.
By knowing what
bonds will be coming to market,
we

can

limit

competition

to

an

extent undue

school

among

dis¬

send

customers

a

offered.

.

The studies undertaken in con¬

nection

with

School
that

the

Bond

New

sold

State.

work

of

the

Authority indicated
State municipals

York

largely to investors in the
would urge a more in¬

I

tensified

effort
other

to

mand

in

prove

stimulate

de¬

worthwhile.

states.

Perhaps a
modest increase in the advertising
effort in the financial pages of the
leading daily newspapers would
In this endeavor you

aided by

new

a

should be

Bill passed this

which calls for the withhold¬

year

ing of State-aid in the case of a
school district bond default and
the

application of the aid to cure
tell

an

California that in

an

You

the default.
in

investor

can

now

unlikely event that a school dis¬
trict cannot meet a bond payment,

completely pro¬
State. One of the
York firms has already sent

interests

his

tected

on

advise districts

can

an

other firms.

They

planning to enter the bond

New

are

by the

out descriptive literature on the
implications and provisions of this

Bill.

Up until this year, the tax-ex¬

of municipal bonds
to Life Insur¬
ThiS'year, how¬

empt feature
little

had

appeal

Companies.

tricts.

ance

In order to provide advice on
timing of sales, I will send out to

ever,
with

each of the school districts in the
A

has resulted

bonds, we will
continue to provide bond dealers

are

This

so

be financed

point to

of school

adequate

prepare

data

many

eligibility.

number
meet

pending sales will be maintained

from

the failure

to

nancial

excellent job in this respect as do

I believe it

State

officials

apply to the
State Comptroller for a certificate
must

principle behind this proposal and
can

sales.

often

fore

costs

interest

excess

life

determined by a formula. If the
bonds are outstanding 30
years

borrowing
requirements.
One
plan has been advanced by the
New York State Board of Regents.
Timing- of Bond Sales
The plan would provide an an¬
Of prime
importance will be
nual cash payment to each school
district of $36 per pupil for con¬ advice with regard to the timing

struction,

Too

this

solidified recently by

was

and

are
for
educational
In the last eight years,

York

previous

interest

Service

Advisory

nationally

New

in line with market conditions and

In
New

such aid in

has

rejecting bids as too high,
despite the fact that the bids were

gram.

vey showed that about one-third
of all State and local bonds issued

by

have witnessed dis¬

we

tricts

provide a modern method of inability
to
obtain
satisfactory
marketing school bonds. As you bids for their bonds. The Bond
know, my proposal was never Advisory
Service
will
collect
voted
upon
by the Legislature. school district bond
prospectuses,
Nevertheless, some of the Author¬ analyze them, and
provide sam¬
ity's objectives can be achieved ple forms for districts to use.
through the adoption of a pro¬
Promotion Planned
posal that accompanied the pro¬

applications with the Comptroller
so
that they may be eligible for

sued

Too often

to

The major municipal' obligation
is the school bond. A recent sur¬

purposes.

Thursday. May 21, 1959

.

.

of

cities,
villages.
our

reducing the
a better bal¬
specific requirements.
Not just ance to the market is, as I have
its immediate needs, but a knowl¬ mentioned before, meeting part of
the
capital costs from current
edge of what will be required
revenue.
Another would be by
5, 10 and 15 years hence.
outright grants by the State and

standing by

market

erage

eral

of

of

bond issues at reasonable

ex¬

should

governments

local

tent,

Federal

This

the

to the extent
to which capital programs can be
financed on a pay-a-you-go basis.
Most business organizations make
provision for current earnings for
also be given

districts
my

in

Consideration
must

complete under¬

a

It will

requirements.

provide the financial com¬
munity with an indication of the
magnitude of its task in supplying
the necessary capital.

problem

tion of the large number

also

alone

expenditures

school

know,

you

in the

This

further.

opment since current rates are
"high and indeed costly to Munici¬
palities. Frankly, I feel that to¬
day's rates bear little relationship
to

construction

education.

ities.
In

possibility of

our

needed

State with the

N

taining what action must be taken
the State and local
level to

at

Construction

Prospective

by

revenue

They reflect the excess
of supply over demand and to a
degree, the continuance of the
Federal Reserve tight money pol¬
icy and Treasury long-term bor¬
rowing operations. If rates con¬
tinue to rise, they may well reach
prohibitive levels.

fairs of all of

community

a

of existing State and local
formulae and in ascer¬

quacy

curitics.

the

Such

community survey will prove in¬
valuable in determining the ade¬

individual bond issues.

should like to discuss a num¬

I

ber

financial

struction.

Links slow¬
down in public construction to taxpayers' revolt over rising
costs of local government. Discloses appointment of investment
advisory committee, with Sidney J. Weinberg, Chairman.
raise efforts to promote

the

Planning Inadequate

Local

Present

.

State, a simple form on which
they can notify us of their plans
for
future
financing.
We
will
maintain this listing on a current

the life companies are faced
possible tax increases under
a
Bill now pending in Washing¬
ton.
If this
occurs,
then these
companies may turn to tax ex¬
empt issues and make municipals
a
major holding in their port¬
folios.

basis.

While

the Sub-Committee of the Educa¬

houses

maintain schedules of this

tion

nature, they are usually of sales
occurring in the very near future

let me just express the
hope that you will join with me

and thus are

in

importance is

a

Committee

Bill approved by

It

Representatives.

Price $10.15 Per Share

aid

aries

a

over

construction

the

may

be obtained from

& Co.
23 BROAD STREET, NEW Y ORK
4, N. Y.




dis¬

and

teachers

period of

years.

sal¬

For

-

In
on

a

a

With

pupil.

both

ulation

as

I favor

local

a measure

current

effort

and

pop¬

factors, New York State

will be

of

bond

of limited value.

addition,

will maintain
basis, a listing of
bond sales by inwe

aid, the amount to actual school
annually would be vidual districts.

of
this nature but I would urge that
any formula include local effort.

MEMBERS NEW YORK STOCK EXCHANGE

DIgby 4-3122

would

of

be distributed

$25

undersigned.

Tel.:

House

tribute $4.4 billion for school con¬

struction

Copies of the Prospectus

the

of

number

a

The

can

by size of issue, maturity

relate

pending

the

sale

been held and

characteristics

to

one

that

for
we

of

has

by ascertaining the
conditions,
we
will be in a position to provide
Although programs , of school the districts
coming to market
aid will help, there will still exist with an indication of what they
would receive
aid.

a

fair share of the

current

market

see

that

the

time is running

so

this

effort

construction

essential to

of

of
our

facilitating

System
Let

me

the

public programs
well-being.

New Techniques for

information

schedules, and other factors
comparison purposes.
Thus,
a

I

short,

Retirement
:

conclude by

discussing

passed this year allowing
Comptroller to invest a por¬
tion of the funds of the New York

the Bill

the

State
tem

Employees Retirement Sys¬
corporate bonds.

in

Comp¬
20% of the
cf the Retirement System in

This measure allows the
troller to invest up to
funds

Volume

Number 5848

189

.

.The Commercial and Financial Chronicle

.

corporate "bonds and
notes,
or
equipment trust certificates in the
three highest rating classifications
as
established
by at least
two
rating services. It provides, how¬
ever, that no more than 2% of
the assets of the System can be
invested in triple A securities ol'
any
one
corporation,
1 Vz %
in
double A securities, and 1% in
a rated
obligation of any corpora¬

Underestimating the

Soviet Economic

I

believe this
in

measure

the

State's

provide the members
tirement
est

System

return

sistent

practices.

I

of

with

their

on

with

is

the

the

In

Re¬

at

conjunction

$1.3

could succeed.

production and
devalue

with

this

new

try to peer into the future,
shall begin with an aphorism:

I

the

opposition

risk

of

underestimating

is much
of

tinguished members of the finan¬

the

cial

Overestliftht-

investment practices and

the
than

graver

ing it. This is

community, will review the
policies
pursued by the Retirement Sys¬
to

advise

bers

when they ap¬

their
competition. It

praise
is

K.

Paynter,

Jr.,

Ex¬

P.

Morgan

Maloney, President,
Savings Bank.

New York

Richard S. Perkins,

First

The

but

National

are

of

records

counsel

provide
in

me

the in¬
and I
invaluable

in 1953, when they exploded a
hydrogen bomb—and again years
ahead. We did begin to learn it

the

conduct

of

in

FRANCISCO, Calif. —
A. Rogers has become
Co., Inc.,

Malcolm

has

recently
Co.

&

and

his

ducted
in

ness
was

a

Oakland.

-r.

least
most

v'l';

!

.1

"

•

*

'

-

.

>

"

t'

*/> '

is

reasons

political reasons."

In

1957

N. Y.—Sidney M.
conducting a securities

business from offices at 27 Rich¬
field Street.

put

In

sharply.

more

statement,

declare

war

on

clare

war.

an

he said,

you

!

in

ALBANY,

N.

Y. —Thomas

the

tion.

L.

Peverly has opened offices at 17
Colonie Street to engage in a se¬
curities business.

can free enterprise."
This warnr
ing is minimized by many Ameri¬
can economists who stress our his¬
toric rate of a 3% average annual
economic growth.
They do pot
throw into the balance the harm¬

battle

of

She throws

Economic

tions total

one

ings— well

The Soviet rulers claim that by
1965 the economic defeat of capi¬

human

billion human be¬

over

race.

a

This

third
is

of

because

the
of

to

will

have

will be obvious

even

been

the comparisons that Soviet prop¬

accom¬

to the United

States.
Now

we

used to scoff at Soviet

The

USSR

claims

an

economic

growth last year of 10%. On the
front page of a recent issue of the
New York

"Times"

USSR's Trade
The USSR needs
raw

ROSENDALE, N. Y.—Rosendale

New Whittier Office

it

field

We

will

our

All

was

WHITTIER, Calif.—Evans Mac&
Co.
has
opened a
office at 243 East Phila¬

Cormack
branch

delphia Street under the direction
of William A. Lower.
,

..




Offensive

surpluses and

the offi¬

r" *

of these shares having been sold, this notice appears
only

as a

matter

of record.

This
A

NEW IS3UE

this
oft-

"We

7,600 Shares

in the
We de¬

threat to the

The

of

are

peaceful produc¬

Wilmington Trust Company

relentless in this and

prove

the

superiority

Capital Stock

of

system."

($6.25 par value)

Khrushchev

finds

many

who

A few months back,

government discovered to its
chagrin that President Kubitschek
of Brazil was circulating a memo¬
randum estimating that the Soviet
Union, in the not too distant fu¬
ture, will be our superior in in¬
dustrial production. By 1980, when
many

<

we

materials which we often re¬

our

Fund," Inc. has been formed with
offices at Tillsoiv "

1,

prefer

system designed to serve the
freedom, the dignity and the de¬
velopment of the individual. We
would still prefer our system to

a

We will win over the

States.

believe him.

Rosendale Fund Formed

us
100 to
still most fervently

outproduce

would

aganda can now make between
plished, though the United States the rates of growth of our economy
Since 1957 our own
is expected to continue to struggle and theirs.
any system aimecl at the glorifica¬
against the inevitable and will not economy can almost be said to tion of the
Party or the State.
have been in retreat—while the
yield production leadership to the
Let me now turn to another ex¬
USSR until 1970.
By then, the economy of the Communist world
ample of the Soviet challenge-world-wide moral
and
political —Russia and China in particular— their trade offensive. This is their
defeat of the United States and of is
surging forward with giant
economic weapon Number Two.
its
private enterprise
economy steps.
talism

...

peaceful field of trade.
United

T. L. Peverly Opens

the

and

United States is not the ICBM but

f

in

Russian

NOT

Khrushchev

quoted

PLAIN VIEW,
Horn

months, pounding away at Ameri¬

group

economic

for

for

a

•

even

S. M. Horn Opens

shores,"

Dulles continued. Then he
warned, "Soviet propagandists
have had a field day in recent
Mr.

Nikita

1955

munist theory.

Company.
\

not confined to our own

statement mirrors orthodox Com¬

Vice-President of the First

California

us

of U. S.
Congressmen: "We value trade

past he

the

In

in

back

Khrushchev told

busi¬

investment

atom

but in the realm of industrial pro¬

April that "a recession is an ex¬
pensive luxury." "Its effects are

"•

'Way

Rogers

been with Walston
prior thereto
con¬

own

of

Central

minded

f

Dulles, Director of the
Intelligence Agency, re¬
the U. S. Chamber last

USSR's View of Trade

associated with Birr &

Mr.

manufacture

Allen

This rule of power

Rogers Now

Street.

cross

in

hydrogen bombs and rockets,

(

Quotes Allen Dulles

went into orbit.

With Birr & Co., Inc.

Sansome

sputnik

first

the

when

1957

to

Soviet Union.

claims—but again and again the
ject — let us say the cotton of
announcement of 11%
for
so-called visions of Stalin have cial
Egypt or the rice of Thailand and
politics—the turned into realities; and today January and February of 1959 Burma. When it doesn't need the
rule that a country should not un¬ we scoff
against the same months of '58. rice, it can still acquire it and re¬
only at our own peril.
derestimate its opposition — will
Last November Khrushchev said This announcement was motivated, sell it at cut prices, The nonhe superficially examined by me to Walter
Lippmann: "We will says the Times' story, "by a de¬ Communist rice-exporting coun¬
tonight in the field of trade and cause you, the Americans, more sire to provide material, for .in¬
tries call this dumping*
economic rivalry—in other words, trouble each
year. At present the vidious comparisons between the
(In a dispatch from Chicago
in terms of the Soviet economic United
States is the richest and growing Soviet output and declin¬
Continued on page 26
challenge.
most productive country in the ing American production."
Here

System's
investment
pro¬
The first meeting of the
group will be May 27.

155

this

it

grams.

SAN

learned

have

should

their first atomic bomb
before we thought they
could. We should have re-learned

the

Malcolm A.

L statement,

years

proven

experience in

ta

mere

no

ploded

with

men

will

sure

face

rule in 1949, when the Soviets ex¬

City

vesting and banking fields
am

we

matter of life and death.

a

We

Vice-Chair¬

Bank of New York.

These

Here

the

not
and

about half.
means

in

..,

Strength

matter of the P and

L.

winning the
world produc¬
tion.
We want the competition
to take place not in an arms race,

is

more

bombs.

with

Benton

William

Sen.

the

It

applicable when the op¬
position is armed with hydrogen

Guaranty Trust Company.
Richard

to

seek

USSR.

far

Dickey,

we

en

appraise

Vice-President, New York

Charles

more

Am ericans

Insurance Company.

man,

h

w

now

Richard

Life

far

i mportant

are:

ecutive

v

ut ives

e x ec

in the
light of current market conditions
and
long range forecasts.
Mr.
Sidney J. Weinberg, Senior Part¬
ner of Goldman Sachs & Company
has accepted the Chairmanship of
the
group and the other
mem¬

or

production and trade.

than,

than half of the world's in¬

the prerequisites for

national

year could have produced as much
steel as all the furnaces in the

duction—meat, butter, milk, cloth¬
ful impact of the Soviet propa¬
ing, footwear and other consumer
ganda dramatizing our setbacks
down her gauntlet to us as the goods. Let the peoples see which
and out 'millions of unemployed.
leading economic power in the regime better meets their require¬
Radio Moscow tells the peoples
world. She feels sure she has the ments and let them pay their due
of Asia and Africa and Latin
weapons for a successful challenge to each regime according to its
America, "It took the West a hun¬
and many foreign observers agree. deserts."
dred years to build its production
To help us decide whether we
system; follow ours and you can
Effectiveness of Propaganda
must now roll up our sleeves and
do it in twenty!"
Such trumpetings, as propaganda
tighten our belts, let us examine
Perhaps I should interpolate
some
of the elements of Soviet in today's world, are proving in¬
here that the world unhappily is
economic strength.
I shall give creasingly effective among the not filled with people who share
peoples of the so-called uncom¬
you four.
your views and mine that, even
mitted countries
whose popula¬
if the Soviet Union were to learn
Elements of
swords

for business

investment portfolio

$858 billion

told

dustrial output! ... The countries
of
the
socialist camp
have all

production
at the rate of $1,561 billion annu¬
ally, and that of the U. S. at only
gross

Yes, the USSR

r

merely a good
general rule

I plan to hold meet¬
ings of this group on a periodic
basis.
We will analyze the Sys¬
programs.

tem's

risk

more

future

on

me

more

,

of

championship
Soviet,

Khrushchev

this, comrades! Al¬
though the socialist countries oc¬
cupy only a fourth of the earth's
territory, although the majority of
these countries were backward, in
the recent past, the time is not
distant when they will produce

our

As I

billion, I have appointed an
Advisory Committee.
Committee, composed of dis¬

and

"Think

will

we

is what

Party's 21st
Congress this past January:

USSR gold

and optimistic conviction that

reserves,

*

the Soviet Communist

in production, trade and foreign

us

Mr. Benton discusses:

But it is

of its greatness.

Here

would be backed

warns,

5% growth rate, decreased trade
barriers, private-public stepped-up economic aid, greater cul¬
tural-information exchange, and increased national defense.

The

_=■

war," he

full capacity production and

Investment

tem

skepticism
supplies

gold; Mr. Mikoyan's writings on future ruble
convertibility; danger of underestimating Soviet economy's
weakness; and USSR's use of foreign aid and anti-Western
propaganda for big stakes. To meet this challenge he proposes

magnitude of the Retire¬
System portfolio — now at

ment

A "ruble

by Soviet challenges to

aid and

investment program, and in view
the

in the 1960s.

us

up

Committee

of

prevailing

free ruble, former Senator Benton

a

New Investment Advisory

In

a

substantive reasons buttressing his argument there will be a
"death-grapple" between the ruble and the dollar looming up

con¬

investment

.guaranteed 3%.

are

Senator

disagreeing with the considerable

that there will be

confident we will
higher return on
our investment and I am looking
forward to establishing a 4% re¬
turn for all members of the Sys¬
tem. At present only those mem¬
bers who entered the system prior
to
1943
enjoy this return.
All
others

States

Author, "This Is the Challenge"

to

am

realize-

now

United

Publisher of Encyclopedia Britannica

high¬

money

sound

Challenge?

New York City
Former

step

a

effort

years

By IION. WILLIAM BENTON*:

tion.

forward

living in the last is the first of the four potent
Shortly the weapons in the Soviet economic
USSR will surpass the U. S. in and propaganda arsenal.
productivity per capita. When
Let's take steel production. The
that is achieved, the people (of Soviet
goal for 1965, for the USSR
the poor countries) will be 'con¬
alone, is 100 million tons and the
vinced in their stomachs.' That is Chinese
goal seems to be expand¬
your danger, not our H-bombs."
ing monthly. Last year, for the
Late last year the official maga¬ first
time, the Communist bloc,
zine of the Soviet Foreign Trade
including the USSR, its East Eu¬
Ministry gloated that Soviet for¬ ropean satellites and China* pro¬
eign trade had helped curb the duced more steel than did the
profits of what it called the "super United States. Half our capacity—
monopolies." And a Soviet econ¬ an amount equal to the USSR pro¬
omist has recently declared that duction— wfas idle.
Let me put
by 1965 the USSR will be calling this another way. The American
the tune on world prices. v
v
steel furnaces that were cold last

world.

Are We

13

(2309)

may

Chicagoans
hope

still

to

in
be

this

alive, Dr.

Kubitschek's document estimated
*An

address

Economic

Club

Laird, Bissell & Meeds

room

by Mr. Benton before the
of Chicago, Chicago, .III.

May 15, 1959.

'• f \V'

The Commercial and Financial Chronicle

(2310)

14

there

Are

circumstances

Emeritus

Professor of

Political Economy,

Noted British economist asserts

!

called

are

order

maximum

growth

absence of conflict between

h

whether

out

fortunate

of the attain¬
of monetary soundness.; Nevertheless, it should be con¬

ment

sidered how far monetary

of

the

of

of

sense

a

of

or

duty

self-

to

less

neighbors,

or a mixture
Some
of rny
col¬

two?

leagues

at home, some in
country, seem to think so.

stability is consistent with complete

freedom for competitive private enterprise to pursue its own
I

the

the

-

speed
of
and
abroad,

o m e

preservation,

in order to

certain obstacles in the way

to

achieve

to

this

the founder of modern

The

$1,500,000

construction of

contract

the

for

Ballistic Missile

a

Training Facility for the landbased training a missile submarine
has been awarded to the

crewmen

General

by

Dynamics

the

Naval

Corporation

Training

Device

Center,. Port

Washington, N. Y.
diving, steering
navigational systems of an

Construction
and

electronic
handled

A hundred and eighty years ago

plans for investment and development.

simulator

by

Division
New

of

London

will

Electric

the

of Groton for

Submarine

inadequate, is there not a tendency
corporate enterprises which
are already large and powerful to

Now in any country in which the
jstock of capital is increasing and

invention

and

research

are

growth

con¬

So

in the output per head of the
occupied population. If the aver¬
age price-level is kept stable, that
year

will

allow

a

for

the

certain

to rise.

level

same

in

pace

called

the

service

occupations

transport
and
commerce
extra-industrial occupations
teaching

as

Now in

cannot expect

put

and

too

the

head, then costs and prices
rising in those branches
of activity in which
output per
head is! increasing less than the

forces

built-in

institutional

Authorities

have

bf their duty.
It
nevertheless be argued that
are
enough technical dif¬

there

ficulties

inherent

in

the

of

use

these general monetary and fiscal

or not at all.
It follows
that if the average level of prices
to the consumer is to be kept con¬

ment

such

execution

may

overage

strongly

that

sometimes in the past acted with
inadequate speed or resolution in

be

the part of both manage¬
and labour there may be

as

and in particular to
the degree in which therein the
processes
of capital
investment
are already irrevocably committed
to
Governmental or quasi-Gov¬
ernmental hands. Let it be granted

in out¬

on

manner

concerned,

of

stant, the prices of most mariufac*
tured goods at works must show a
continual
tendency
to
decline.

such

may be most appropriate to the
institutional set-up in the country

per

Now

or

conspiracy
in some
contrivance to raise prices". Fifty
years ago another great economist,
Alfred Marshall, in more generous
mood, though as you may think
in somewhat pietistic and patro¬
nizing
language,
declared
that
"there

the

is

public,

much

economic

more

chivalry

in the world than ap¬
pears at first sight. The most im¬
portant and progressive business

Base.

weapons to make their operation
in either direction—either to
pro-*

mote

expansion or to check itliable to partial frustration if the

scarcely ever without a
large chivalrous element, and is
often mainly dominated
by chiv¬
alrous

motives.

But

there

is

also

much

and

noble

from

that

which

is

not, is a task that needs care
thought and labour; and to
perform that task is a first duty
and

for

E. T. McCormick Heads

of the

free

Clearing Corp.

American

Stock

Exchange

President, Edward T. McCormick
has

been

elected

president' and

filment

except active price com-(
among businessmen. Price
competition, because other kinds
©f competition—in
advertising,, in

gadgetry,

in genuine quality
—do not help in this
particular
problem of resisting the powerful
socio-economic forces making for
the c ontinual erosion of the

How Much

As

Liberty of Action?

student, I wish there

a

time for each

his

place

much

liberty

ceives
Sets

he

fancy,
thr;

declare

on

just

how

of

action he con¬
to have when he

himself

price

a

which

of you to rise in

one

and

were

the goods or service
Not so much, I

sells.

as some of the

attack

gladiators in

"administered

on

prices" would have

us

believe: but

more,

surely, in this industry and
the-,t—no names, no courtmartial—
than corresponds to the idealized

picture

of

the

freely

working

market economy sometimes drawn
foi' dramatic contrast with a
pic¬
ture of the regimented State.
And
tiere lies one particular
danger
worthy of your attention.
How

right

and

necessary

for

a

end

growing firm to aim
nancing out of ploughed
prohts

a

reasonable

young
at fi¬

share

back
of

its

,

cAn
•it

Che

«ncrce,

address

by

International

Professor

Robertson

Chamber

of

Washington, D. C., April 24,




point

me

reference

to

a

Britain there is

dustry

but

the

question
topical issue.
now one

only

one

assets

to

public

direction

control; and it is argued in
quarters

gives

that

Should

this

many

arrangement

the best of both worlds;

us

there

then

be

other

in¬

dustries in like
case,
and if so
how many, and which? Or
is the
position which has been reached
in this
industry, almost

dent,

as

the

result

to-and-fro-ing,
which

must

of

the

be

solution

adjudged

to

be

wrong, on the ground that it pre¬
serves

property rights which have

and

the

of

Atwood's

fabricating division, which makes
a
large variety of metal cosmetic
containers.

ject

to

The

approval

holders

of

is.

proposal

both

by

the

sub¬

stock¬

companies.

The Echlin

22,500

recently

sold

common
stock.
This block along with 76,46*6 shares
from selling stockholders, was sold

at

16%

and

represents

public offering
stock.

to

of the

the

22,500

expand

shares will

the

first

company's

Net proceeds from

of the

the sale
be

company's

used

plant

at Branford and the balance added

dend

of

15

of

crease

cents

12%%

a

share,

in¬

an

the "pre¬

over

regular quarterly dividend
adjusted11 for the three-forone stock split which became
ef¬
fective April 22. This dividend,
payable June <12 to holders of

May 28/ is
consecutive

United

announcement

tion's

board

understood

by
of

that

the

corpora¬

directors.

this

It

is

is

part of a
general reorganization of clearing
facilities
at
the
Trinity
Place

the company's
quarterly cash
•

Whitney Division

Aircraft
on

has
a

started

one-story,

Laboratory,

a

joint

Pratt

Commission project for
development of a nuclear-

powered aircraft engine, plans to

"

SAN

DIEGO, Calif. —Meredith
D. Sigler is now with J. A. Hogle
& Co., 1030 Sixth Avenue.'

New

ware,

Britain,

shares

authorized

from
par.

shares

-issue

to

ap¬

common

1,000,000 to 2,000,000
Except
for
50,000

be

to

made

key

ployees

recently

proposal to increase the

a

$12.50

available

officers

under

stock

and

foi'
em¬

options, the

-

*.

ft

'

V,/

•

■:

.

The

directors

of

Security

In¬

surance

Company of New Haven
recently declared a quarterly divi¬
dend of $0.20 payable
Aug. 1 to
stockholders
This
the

of

represents

previous

record

July

increase

an

rate

of

$0.35

17.

over

semi¬

J. Barth & Go. Offers
J.

Barth

&
Co.
are
offering
shares of 6% convertible
preferred
stock
(par $10)
and

100,000

500,000

(par

shares

10

and five

fercd

The
able

Magma Power
preferred share
shares at $10.50

These securities

as

a

stock

common

of
one

common

unit.

per

of

cents)

Co. in units of

are

preferred shares are
$11; per share and

call¬

at

vertible .into

common

the rate of 13

common

each

of-

speculation.

con¬

shares

at

shares for

preferred, share.

The

net proceeds will be used
to pay for the company's one-haili
share of
the
cost
of additional

drilling and development work on
The Geysers lease, including con¬
struction

of

facilities

to

gather

and process steam < other one-half
to be borne by Thermal Power

Co.); for exploratory drilling and
related exploratory drilling and
development work including cost
of equipment, machinery and well
materials
and
installations; and
for
working
capital
and other
corporate purposes.

Giving effect to the new financ¬
ing,
there
will
be
outstanding
100,000 shares of preferred stock
(par $10) and 7,287,500 shares of
stock

common

(par 10

cents)/^

The company intends to engage
in
the
business
of

discovering,

.

developing" and

producing

geo-

various materials and fuels in the

to power companies as a source of

new
new

the effects of radiation

laboratory. Facilities in the
building will include chem¬

istry and metallurgy laboratories,
a
machine shop and engineering
and

office areas.

for

energy

Aircraft

Corporation,
Bloomfield, has received a followon
Navy contract amounting to
approximately $14,000,000, for ad¬
ditional
HU2K-1

HU2K-1
is

a

helicopters. The
high
speed,
all

-

electric

uses

if

when practical.

discovered,

will

Such steam,

be

produced

from steam wells drilled into lands
owned

a m a n

generating

power, and for industrial 01* other

has

or

that

leased

leases

by the company
The company

purpose.

entered

into

number 'of

a

covering

lands believed to
be favorable for the development
of geothermal steam, and intends
to seek
other
geothermal lands
and lease

the

same

if possible, v

been shorn of their most
essential

function,
give

us

and

thus

not. the

threatens
best

of

to

Empire Inv. Co. Adds

both

LAKEWOOD,
Some Recent
I

am

nounce

not

attempting

these issues.

on

trying to do is
the

Disharmonies

course

of

your

reveal
two

of

and

am

has

Colo.

been

—

added

;

Steve
to

the

staff of
pany,

Empire Investment Com¬
1480 Hoyt Street.

that in

discussions,
difficult

compromises,

themselves
your

Maupin

pro¬

All I

to suggest

disharmonies, calling for
decisions

to

w-1

(Special to The Financial Chronicle)

worlds but the worst?

between

Two With Fusz-Schmelzle
(Special to The Financial Chronicle)

may

the

nobly conceived ob¬

Coni-

jectives

which

I

will

call,

1959.

brevity,

stability

and

freedom.

for

BELLEVILLE,
Arnold
now

22

and

with

North

111.

Harold

—

O.

Fusz-Schmelzle

Illinois

Street.

&

Primary Markets in

CHAS. W. SCRANTON & COMembers New York Stock

A.
are

Co.,

Exchange

CONNECTICUT

-

New Haven

SECURITIES J

New

York—RJEctor 2-9377

Hartford—JAckson

Cyril

Dobbs

j

Magma Power Shares

for

Hogle.

£

~

:

j;.

Stockholders of American Hard-

on

study

K

With J. A.

all-time

an

thcrmal steam, for sale primarily

market.

(Special to The Financial Chronicle)

to
...

Manufacturing Com¬

Branlord,
shares of

pany,

the
McCormick

backlog

annually.

Energy

by acci¬
legislative

one

most

and Whitney Aircraft and Atomic

T.

pany's

high*

shares.

Connecticut Aircraft Nuclear En¬

E.

powered

the

the

plant
in
Middletown.
CANAL, the abbreviation for the

—

and

Plume

pro¬

of

CANAL

predominantly privately
owned, but whose plans for in¬ director of the institution's Clear¬
vestment
and
development are ing Corporation, according to an

subject

of

has

to

company has no present plans for
the issue of any of the additional

terms

for

gas

also

At¬

21,000-square foot addition at the

In

steel

stock

construction

by

contract

and

Plume

the

The Pratt and

great in¬

—

Under

common

of

which is

Own

growth! But may not plough¬
ing back become a fetish? Where
competitive pressure is absent or

wood.

a

.

to do what they

Force

quantity H-43B gas tur¬
helicopters. Orders
two
types
of
turbine
helicopters have raised the com¬

proposal Landers would pay $1,000,000 and 85,000 shares of its

gine

Let

of

assets

on

dividend.

will with their own?

even

Standard of value.
r

must be allowed

certain

record

abatement, in the in¬
terest of general
stability, from
the principle that persons—which
includes corporate enterprises —

petition

proposal
whereby Landers would purchase

102nd

ad¬

economy

agreement

rate,

any

market

reached

of

vious

ASE

dustry is firmly set in the op¬
posite direction. A crucial question
thus arises. Does the
preservation
mit of

and The
Manufacturing
Thomaston
have

economists, sitting at the feet to the
general funds. Echlin manu¬
learning from factures
replacement
parts
for
them". It is in that spirit that this
electrical systems for automobiles,
ex-economist, now safely on the
trucks, tractors, and farm equip¬
shelf, has tried, not to solve your ment.
•
problems, but to contribute a little
towards setting them in their mu¬
The directors of Pitney-Bowes,
tual relations.
Inc;, of Stamford, have, declared
a regular quarterly common divi¬

mass of the expecta¬
tions and purposes of private in¬

Of this result; and I do not know
to what we are to trust for its ful¬

Clark, New Britain,

Plume and Atwood

of businessmen and

predominant

hampering the attainment

The directors oi Landers, Frary

T-58

Kaman

in

bine

for

proved

is

work

rous

activity. And if all
incomes are rising in line

must

a

against

between them in

the level

money
With the average increase

diversion, but the

conversation ends in

—

of money incomes to differ greatly
in the long run between different

branches

Let it be

merriment and

for

even

on
Monetary
Authorities
and
Budgetary Authorities, distributed,

a

one

of its aspects, is no more

means,

Company

together,

getting of wealth that is not
chivalrous, and much expenditure
that has no touch of nobility. To
distinguish that which is chival¬

society in which there
mobility of capital and

fair
labour,

in

granted that the main responsibil¬
ity for preserving steadiness falls

service.

is

stable money,

but I fear that it is not.

such
Government

and

be

to

seems

seldom

meet

duce

Electric

engine.

Air

an

helicopter powered

General

a

company's
and

be

of what may

run

there

than
namely a steady rate of
growth of output and activity, i
wish that were the whole truth;

rapidly in manufacture than

the whole

then

a

the

one

a

in all spheres of activity; in par¬
ticular it seems likely that as a
rule it will normally take place
more

far

of that to which

But it cannot be expected
in output per head

place at the

the

disharmony between the objec¬
of
unrestricted
competition
one hand and, on the other
the objective of stable money and

that this rise
will take

on

leaving him

tive

of
wages and other incomes

money

to

further

of

costs

no

on

of

amount

average

the

of

present con¬
smaller share
choice between spending
and saving
than is fitting in a
community of free men?

moderate increase from year to

room

much

sumer,
in the

tinually active, it is natural to ex¬
pect that normally there will be
a

pricing policies which put

pursue

too

by

turbine

be

the

economics,

great champion of free enter¬
prise, Adam Smith, in one of his
more
sardonic
moods,
declared
that "people of the same trade

for

weather utility

Boat
at

use

the

One test of a sound currency is
the approximate stability of some
carefully calculated average of the
prices of the things of which the
real national output is made up.

Thursday, May 21, 1959

.

Connecticut? Brevities

West

immediate

at

monetary stability and active competition; with latter required
remove

throw

to

on

in

winds

Cambridge University, England

r

the

of

we

.

latent

might have been justified in pur¬
suing, but which as things are we

SIR DENNIS ROBERTSON*

By

f

disharmonies

in
the
programme
as
well? -Is
stability of money, is steadiness bf
output, a luxury which in other

Monetary Stability vi.
A Free Enterprise Economy

.

7-2669

Teletype NH 194

-

1

Volume

189

Number 5843

Public

.

.

.

The

Commercial

and

Financial

Washington
Ahead of the News

Detroit Edison Company
Detroit Edison

•

4,317,000

(over

serves

half

the

electricity

state's

to

a

population

population)

in

an

of

area

of

7.600

as

well

as

Illinois,
people, the
plain -.common people, that you
would hardly expect him to be en¬
is such

manufacturing, it has considerable other indus¬
extensive farming sections. Residential and farm
of

electric revenues,
dustrial 27 % and other 5 %.1 \ • *•

<"

•'

,

Michigan has

•'

an abundance of natural

friend of the

sue

•

resources—lumber,

as

he

is

diana

igan,

acres

The deepened St. Lawrence Sea-

;Way is expected to open new export and import markets for the
area, because of more favorable
freight rates with single handlings
at either end. By water, Detroit is
actually closer to Europe than

New York.

Mich¬

Slightly

,,than

in

public

to

.

demand

a

resign

It will

Chairman.

as

..

State

adej to the fires

of the feud between Sen. Homer

K.

Capehart and the regular organi¬

held

zation.

•

T. J.

O'Mahoney hearings the

opposition to the Douglas bill
the Illinois Senator had con¬

*

_

Lynch Jr. With

Frank Maslerson Co.
P, Frank C. Masterson & Co., 64
Wall Street, New York City, mem¬

country

bers

hand to testify in his

on

behalf.

2,0 0 0

.; Mr; Douglas charged greed on the

J acres of it are
part of industrial interests in an
preserved in
effort to deny the people of their
'
stations with a generating capability of 3,426,000 kw,
-the
Indiana
including '
rightful heritage.
The Indiana
Carlisle Bargeron
a321,5G0-kw unit placed in service in October, 1958. This will be
Dunes; State
group, however, had labor leaders
increased to 4.200,000 kw by. 1961. Power is also available from
Park where
v
and hundreds of letters and tele¬
the Ontario Hydro-Electric Commission.
there are 'bathing beriches and grams from just
plain workers in
; recreational facilities for Chicago's their behalf.
,t
.The peak load last year of 2,603,000 kw indicated a generating
,teerqirijg thousands, ; Farther west
All in all," the Indiana people
reserye of 32 % —probably in excess of current needs • (due to the
the State of Indiana wants to util- seemed to have had the
better
business depression last year which retarded industrial
sales).
ize thg duneland for the develop- part 0f the argument. Then it de¬
Possibly io.; help use some of this reserve capacity the company
ment of, a harbor to take care of
veloped that former Senator Bill
Jhas begun a campaign to increase the/sale of electricity for househeating. .Company ads are appearing in ten newspapers in the 7 expected increase in trade as. a jenner and the present State
result vqi! the opening of the St. chairman of the
Republicans, had
area, stressing the advantages of electric heat, as follows: possible
Lawrence Seaway. They point out formed a
corporation to take opindividual room-by-room control, instant response,
cleanliness,
that the Dunes State Park is only ttons on all the duneland.
*
efficiency .<no heat goes up the flue and none-is wasted heating,
about v one-fourth developed and
Thereupon a scandal has devel¬
rooms where heat is not
needed), uniformity, no noise, flexibility
that any additional
recreational oped and Mr. Douglas has been
of installation, safety, no waiting for fuel deliveries, small upkeep, '
facilities should be there.
given g 11 the ammunition he
no moving pa its to wear out.
The ads mention different forms "of;
Senator Douglas, however, has wants. He has a perfect example
heating available—baseboard units, heating cable embedded in
ceilings, radiant panels in walls (with forced air circulation if ? organized all the conservationists now, of how a group of Republiin the country and they are an accan politicians is
attempting to
desired) and the heat pump for combined cooling and:;heating.
tive and influential group when take over land that should be preHigher operating costs are balanced by low installation cost in
they get started, and they are in- served for the people,
new homes.
■■■-■'
" •'
sisting that all the duneland be
They play their politics pretty
1
Detroit Edison already has about 3,000 customers who use
preserved into a Dunes National hard in Indiana and they play for
space-heating. Schools, churches, restaurants,. gasoline service
Monument for recreational facili- keeps.
It was poor judgment on
stations, retail stores and others are "going electric." Two schools
ties.
the part of Sen. Jenner and Bob
recently went on the lines with electric heating, space and water V
v Indiana
sees a great industrial
Matthews, the Republican State
as well as an all-electric kitchen.
Comritercial electric cooking is
development, giving employment, Chairman, t o h a v e announced
.becoming widely accepted.
it
is estimated,
to hundreds of right at this time that they were
i~r
Detroit Edison now has a very efficient generating system.
thousands of workers, going by forming the corporation.
It may
The amount of coal required to generate one kwh was only .83 of
the boards
very likely result in Douglas' wina pound last year, compared with .94 in 1953, 1.04 in 1948 and 3.75
It so happens that Senator Dougr ning his fight and Indiana's dream
back in 1905. Two-thirds of system output is now bein£ produced
las is not unselfish in his advocacy for an industrial development and
harbor
on
the
shores
of
Lake
by generators installed since 1953, with a heat rate of only about
that all the duneland be preserved
9,000 btus. The company is adding very big units, permitting
in a national park.
Chicago has Michigan will have gone a-glimmaximum efficiency. / The third unit at River Rouge, which went
a
harbor at Calumet City, 111., mering.

^Detroit Edison has 16 plants^ arid five siriall hydi*o.electric

p-

probably be

Matthews

►,

servationists from throughout the

more

'

\

the

There will
for

but

of

duneland.
.

of

big is¬
O'Ma-

entire Indiana delegation appeared

are acres

and

number of inland lakes.

of Lake

has

At the

shores

iyith

a

gressional delegation and a U. S.
Senator.
The delegation is nov*
top-heavy Democratic with eight
Congressional seats and a Senator.

hearings, and
the Interior Department has come
up with an offer to develop the
dunes into a National park.

now.

It lias the longest shoreline
of'any State except Alaska; and;
the coastline of Detroit Edison's area is about 270
miles—together

Chairman

Affairs,

f .Chicago,
along the In-

tion.

a

Senator

.

lost six additional seats in the Con-_

Committee of Insular and Interior

o

'

in Congress.

.

them in the

lands sub-committee of the Senate

:'fi. Just outside

iron, copper, salt and brine, sand, gravel, and limestone are close
hand and can be
transported cheaply. Perhaps the .state's most,
important asset is the abundance of water and water transporta¬

.

honey,

enterprise

an
:

i/

a

gaged in such

commercial' 27%, in¬
-'

The matter has become

Senator Paul Douglas of

miles in southeastern Michigan. - It al o
provides steam
service in downtown Detroit. While the area is the center
of auto¬
mobile and parts
sales account for 41%

Republicans who are in control of
government will not help
slightest. In 1953 they

the state

By CARLISLE BARGERON

about

square

try,

on
Lake
Michigan in Indiana,
somebody is going to make money.
But that it should happen to the

From

Utility Securities
By OWEN ELY

.'

15

(2311)

Chronicle

the

of

American

Stock

Ex¬

change, announced that Thomas J.

Lynch, Jr., formerly with Pricey
& Co., is now associated

McNeal

in

them

with

search

the

Sales

&

Re¬

Department.

,

Carl M. Loeb Firm

t

.

•

...

.

»

To Admit Partner
Carl

M.

Wall

42

Loeb, Rhoades & Co¬
Street, New York City^

members of the New York
V<L

X1WV

June

Stock

will admit

Exchange,

on

Gordon H.

Hensley to partnership
"
*
^

...

.

1

in the firm.

Robert Winthrop Co.
To Admit H. B. Freeman
On

June

1

Harry B. Freeman,
a partner in Rob-

Jr. will become

ort Winthrop & Co., 20 Exchange
Place, New York City, member®
of the New York Stock Exchange,

,

into service last

October, has carried a gross load of 345,000 kw.
fifth unit (320,000 kw) is scheduled for
installation in May and work continues on a sixth unit of the same
size, expected to go into service in April, 1961.
,
At

the St.

which would be vastly

Clair plant a

a group of utilities which are sponsoring
the important Enrico Fermi Atomic Power plant in lower. Michi¬
gan, and is contributing substantially to the cost of the project.Despite some delays due to AFL-CIO intervention in the licensing

the

of

the

duneland.

and

National

Steel

•

tion" plant are also being developed.

"P

than bank

a

strong cash position

loans.

Construction

no

for

financing

Detroit Edison

was one

continued to

this year

revenues

showed

a

decline.

Since

going west to compete with United
States Steel.

This announcement is not

However, earnings are showing

first quarter was relatively cold and
record high

over

of $29 million.

last year and

For

industrial

a

comeback in

1959.

The

residential revenues reached

Manufacturing kwh sales gained 28%
revenues were up

and

the

resulting

Detroit Edison has been

increase in

500,000 Common Shares, 10c Par Value

OFFERED IN UNITS
Each Unit Consists of One Preferred Share at $10 par
and Five Common Shares at 10c par

v

Price $10.50 per
.

r

'

J. BARTH

this year's range of about 47%-42V4 and last year's 42t£-38.

percentage

recurring

•

Unit

rose

to nearly 100%

factor—payment

year.




&

CO.

selling recently about 43\'z compared

partly tax-free. The 1957 dividends were 42% tax-free; in 1958

ithe

value

value.

shares outstanding;

Paying $2,' the stock yields 4.6% and the dividend will probably
be

solicitation of an offer

17%. Kwh sales to

jMoody's Stock Survey has estimated earnings of $2.45 for 1959.

jiwith

or a

in increased share earnings because of further conversion

debentures

of

offer to sell,

100,000 6% Convertible Preferred Shares, $10 Par Value.

a

However, any gain in net income this year may not be fully

i|eflected

an

MAGMA POWER COMPANY

,

.

Stewart, Eubanks

costs

As

but this was due to a

of two years' property

taxes

in

non¬
one

Stock

(Special to The Financial Chronicle)

New Issue

keel companies gained 62%, to auto companies 11%, and chemicals
43%.

Joins
V "

buy the securities. The offering is made only by the Prospectus.

result of these three factors share earnings declined from $2.62 to

a

New York

Moreover, the number of shares of stock

outstanding increased 11% due to conversion of debentures.

$2.17.

of the

of the few electric utilities which was

rise, net income dropped below the previous year for

the first time since 1951.

matter of

members

Exchange, will admit
Margaret
Mackey to limited nartnership.

other
is estimated at $68

seriously affected by the decline in business activity last year.
the first time since 1944

a

May 21, McMannus & Mackey,
Broadway, New York City,

was necessary,

million, and may average about $60 million over the next five
years.
Recently the company sold $40 million 4%% mortgage
bonds due 1989 to a group of financial institutions.
^;

like

On
30

importance to the rest of the
SAN FRANCISCO, Cal.—Geoirg®
country but to the politicians of
Indiana, of both parties, it has J. Planz has joined the staff of
them squirming
Eubanks, Meyerson &
and recrimina¬ Stewart,
Co., 216 Montgomery Street, mem¬
tions are flying thick and fast.
Manifestly, with a harbor and bers "of the New York and Pacific*
Coast Stock Exchanges.
an industrial development coming

already own

to

seem

Mackey

Partner

.

Construction expenditures last year approximated $75 million

but due to

may

little

steel mills,

proceedings before the AEC, good progress is being made with the
plant. The scheduled date for initial low-power nuclear-operation
is September, 1960. This plant is of the so-called "fast breeder"
type and fuel element research and development work may re¬
quire several years for completion. Plans for a "second genera¬

.

It

affected by

nearby port in
Bethlehem Steel

a

property there and plan to build
Bethlehem by way of

Detroit Edison heads

^

erection

McMannus &

Copies of the Prospectus may be obtained from J. Barth & Co. or other dealers

only in states in which the Prospectus

from firms qualified to act

as

may

legally be distributed, and only

dealers in securities in such states.

36

The Commercial and Financial Chronicle

(2312)

has

.

,

Thursday, May 21, "1959

.

abroad quately by both actual 1958 been going on since War II,
results and projections for an are at an end. And its rate of
improved showing this year. growth is such that earnings
Revival of an Old Favorite
And it offers a yield of well projections through the next
An old favorite that has
above 5!£% which is down¬ few years carry to a range of
By WALLACE STREETE
lately become something of a right generous against the from $5 to above $6 on the
regular on the lists of new average yield in current mar¬ new shares which, at a 20Industrial stocks continued nudged their index
times
to the highs is Coca Cola, the pre¬ kets.
earnings ratio basis,
mier growth issue of the pre¬
to toy with their historic
would easily justify par or
high year's peak a month ago.
vious generation. The stock Opposing Views on Telephone
this week, with du Pont and
better for the new shares.
has broken out on the topside
Depiction Revision Threat
After years of rather gen¬
Allied Chemical doing much
[The views expi'essed in tins
Stalls Oils
after a declining trend line eral neglect since there was
of the work to shore up the
article do not necessarily at any
for a decade. Despite its new little doubt over what divi¬ time coincide with those
Oils showed some signs of
of the
average but not without them
"Chronicle" They are presented
having occasional profit-tak¬ stirring but it was still pretty highs in the 140 bracket, it is dend the shareholders would
operations

joint

with British Petroleum.

THE MARKET... AND YOU

much

ing troubles.
*

momentary

followers

of

and

few

this

group saw
too much chance for decisive

❖

still

well

the

under

double- receive,

those

as

American Telephone

of the author only.}

200 price it posted in currently is building up two
1946, and even well under the definitely opposed schools of

par,

William A. Lower Now
currently is action until the
fate of pro¬ 170 reached in 1937.
thought. One holds that the With Evans MacCormack
being met in the 640 area for
*
stock has done all necessary
*
❖
(Special to Tnn Financial Chronicle)
posals to trim the depletion
the
senior
average.
Twice
to discount the 10% increase
LOS ANGELES, Cal.—William
allowance is settled in Con¬
Contributing to the slug¬
there was enough strength to
in payout promised once the A. Lower has become associated
reach
that
level
but
it gress. As a result, most of the gishness of Coca Cola over
with Evans MacCormack & Co.,
quality items were conceded recent years was the fact that shares are actually split the 453 South Spring Street, members
brought in realizing and de¬
end of this month. The view of the Pacific Coast
to be definitely "behind the its
Exchange. Mr.
profit margins were de¬
layed a closing reading that
here is that the commotion is Lower was formerly Vice-Presi¬
market" and any imarket
clining steadily. But the com¬
high.
dent of Witherspoon & Company,
all over and the stock suf¬
student could cull out at least
pany has turned more aggres¬
Inc.
a
dozen in the section that sive and was able to boast
Balanced Ups and Downs
ficiently high.
Thomas J. Edwards, Roland D.
oij
merit attention. The depletion record sales last
The plus and minus signs
year despite
Kelly, Norman S. Lawson and
The opposing school, which John Bi.
threat
not
for the entire list were in allowance
only the recession. On the plus side
MacFarlane, also for¬
relies far
more
overshadowed some excellent is the
heavily on merly with Witherspoon & Com¬
pretty fair balance most days,
rising population with
pany,
have joined Evans
Mac¬
rebounds in earnings in the that
one session
producing a mere
many
more
potential figures, trend lines, and sup¬ Cormack & Co.
half dozen
more
advances. first quarter but also sheared customers, the fact that for¬ position, holds that the $3.30
to a great degree the
age-old eign sales are growing stead¬ dividend on the new shares,
Ironically, since the reaction
Two With United Sees.
unlike the $9 maintained for
low of 615 was posted two inflation hedge aspect from ily
(it distributes in more
(Special to The Financial Chronicle)
weeks ago, half of the sessions the oils at a time when so than .100 countries) and its 37 years without change on
GREENSBORO, N. C.—Louis M.
the old, is only a temporary
showed
declines
Dowling, Jr. and Carl A. Thomp¬
exceeding many were attributing the domestic line has been bol¬
The resistance

v

demand

avid

the advances,

for

common

stered
by new
carbonated
the
stocks to a public generally
drinks that heretofore were
has
bent on hedging against the
available only abroad. With
30
its relatively
has deteriorating dollar.
high tag the
simmered down rather
stock is logically a candidate
for a stock split. And in the
abruptly. The low was posted
Sinclair Oil, with a yield of
on
turnover of 4V& million
face of rising earnings, it is
around 494% against slightly
shares and the rebound was
held to be something of a
better than 3% for the gen¬
achieved without any fourcandidate for a higher divi¬
eral market, was prominent
million share days. In fact, to
dend than the $5 total that
on
several
lists.
Its
first

although in
process the average itself
improved by more than
points. Volume of trading

start off this

slipped
for

than

the
a

week the

below
first

three
time

total

million

in

more

month. About all these

has

do,

Neither

the

rails

nor

the

utilities contributed much to
the industrials in the
way

There

from
lar

a

was

would

mean

around

can

operated in the red for two

of

until last

years

having been sold, this
a

matter

announcement appears

of record only.

year

deodorizers and hair

room

ern

ISSUE

May 18, 1959

on

a

dividend basis of

indicated

an

40

cents

an¬

nually.

Now With
PORTLAND,

Oreg. —John

J.

Carter has become connected with

May & Co., 618 Southwest Yamhill
Street.
He
was
formerly with
Foster &

Marshall.

Notes

NATIONAL SECURITY TRADERS ASSOCIATION
The National

Security Traders Association has announced the

appointment of additional affiliate advertising chairmen.
Securities Dealers of the Carolinas: J. Sturgis May, J. Sturgis

May &

Co., Security National Bank Building, High Point, N. C.

Bond
pany,

Club

of Denver:

Robert

Doering, Boettcher and Com¬

828 17th Street, Denver 3, Colo.

Washington, D. C. Security Dealers Association: George
Mitchell, Jr., G. J. Mitchell, Jr. Co., 729 Fifteenth Street, N. W.„
Washington 5, D. C.
DENVER

BOND

CLUB

The Denver Bond Club has announced the final

bowling league

for 1958-1959 season:

scores

FINAL LEAGUE

STANDING—1958-1959

(81 Games)
—103 IPoihts—
rosition

Won

TEAM—

1st

J.

A.

2nd

Bos worth,

Hogle &

Co.__

3rd

Garrett-Bromfield &

Merrill

(Team BR)

Co.

Lost

66

42

65

_________

Sullivan & Co

4th

43

64 %

43%

6iy2

47%

60

48

Winders, Inc.

59%

48%

59

49

53%

_■

|

54%

5th

Borg Warner

•

6tii

Lynch, Pierce, Fenner & Smith Inc.
Founders Mutual Depositor Corp
Garrett-Bromfield & Co. (Team GR)_

7th

Boettcher and

8th

J. K. Mullen Investment Co

9th

50

58

43%

64%

40%

67%

25

83

Borg Warner
in favor

after

was

it

not much

was

certain

Company

(Par Value 20c

per

Share)

large
piece of business in supplying

10th
11th

Trevor, Currie
Peters, Writer & Christensen, Inc. ~2
Kirchner, Ormsbee & Wiesner, Inc._

Ford transmissions when the

Common Stock

12th

Peters, Writer & Christensen, Inc. #1

that

it

was

to

lose

a

$

Price $2 Per Share

company
decided to make
them itself. But the company
appears to have made up
sales loss largely through

I nderu riters

Karl Edden Co.

67 Wall Street

67 Wall Street

New York 5, N. Y.

New York 5, N, Y.




May & Co.

(Special to The Financial Chronicle)

Promising Outlook for

150,000 Shares

Bertner Bros.

staff of United
Southwest¬

Company,
Building.

have put the

encouraged to

Coil

have joined the

NSTA

preparations.
The
manage¬
ment, at least, is sufficiently
shares

NEW

son

Securities

those who have demonstrated

to

as

notes

attention

some

being devoted to issues that
have, had rough sailing re¬
cently, the theory being that

when it
In addition to its
own, fully turned
help. Utilities lagged, with no
in
a
modest
profit
integrated operations, Sin¬
right in the face of the reces¬
sign of intending to best the
clair has important interests
sion. The one-time reliance on
March peak, somewhat
longer in both Richfield Oil and
Bab-0 almost exclusively is
than
the
carriers
which Texas Pacific Coal &
Oil, and
gone
and the product line
now
ranges from detergents

All these Shares

source

un¬

they have turned the corner
participate roundly in
the general business upturn.
$4.50 as against the $3 divi¬
B. T. Babbitt, for instance,
dend requirement.

That

>):

maintained

one

succinctly that an increase
seems
a
near
certainty "in
1961 or 1962." The logic is a
bit
complex in this clan.
Briefly, with the company
generating much of its new
money needs internally, the
day of constant and heavy
dilutions of the equity, a# has

quarter report was also fa¬
changed for about a decade.
vorable, with the reported
per-share earnings up to $1.12

slightly less than a dol¬
year ago and with pro¬
however, was to increase the
jections for the full year in¬
already high level of caution
dicating that earnings will
but still without
breeding any increase
by some $1.25 above
definite signs that a top has
the
1958 full year results.
been formed.
technical weaknesses did

been

and

one,

'I*

'«•

the
its
Norge household appliances.
And there is the possibility of
much new business if the Big
Three of the auto field call

on

Borg for parts for their new
small cars. In any event, the
dividend

is

covered

ade-

«

#

$

High Team Game—
Garrett, Brcmfield & Co
High Team Series—

598

Garrett, Bromfield & Co.-J. A. Hogle & Co
*

(1613)

-

s'fi

%

:*!

£

#

1

INDIVIDUAL PRIZES

High Game—James Struthers, Garrett, Bromfield & Co.
High Series—Karl Mayer, J. A. Hogle & Co
Members of the

246

642

Bowling Committee for the coming 1959-1960
Roberts, Bosworth, Sullivan & Co.; Donald
Langley, Merrill Lynch, Pierce, Fenner & Smith Inc.; Oscar
Hasselgren, Trevor Currie; and Karl Mayer, J. A. Hogle & Co.
season

are:

James

Volume

189

Number 5848

.

.

.

Cars that say

other

Over

cars
-

distribution of Simca, this

of The Forward Look
■

*

'

each

world. Since Chrysler Corporation took

regularly nowadays, all around the

We look forward to




that say Can Do are meeting

je peux and cars

4th place in American import

.

(2313)

The Commercial and Financial Chronicle

impeccably engineered French car has moved into

sales, .as well as expanding rapidly abroad. Can Do

also enjoy world-wide sales,

through

our

Export Division.
V

'

expanding opportunities in an expanding
'

'

'

'

■

•

world marketplace.
' '

.

.

CHRYSLER CORPORATION

The Commercial ancl Financial

(2314.)

18

News About

ianks & Bankers
Directors of Chemical Corn Ex¬

York, have
elected Herbert W. Nannen VicePresident and Treasurer, it was

J.

par

approved

a

and

Bank

Trust Co. Philadelphia, Pa.

Mitchell

Mr.
dent
in

Trust Co.

as

1952 and was

ant

the Provi¬

joined
a

K.

Mr.

Trust Officer
in

Hurdle

Mr.

1955.

for

Pa.,

of

Mr.

vert

include Cal¬
V. Hurdle to the position of
Trust

Officer

the

\

v

-ij,

.

National ,: Bank

the

and

Bank

Trust

111., in
expanding its

Chicago,

aimed

at

Com¬

McGar

Waljhall

is

"relail"

banking operations.

until

r

is

money

against

purpose

"

individual

'

...

First

"

-

i

■

National

\

com¬

capital stock from $100,000
$200,000 by a stock dividend,
effective ;. May v 4,
(number
of
shares outstanding—8,000 shares,
par value $25).'
"A •
mon

in

to

any,

bank

Co.,

in,.

Repayment

use.

monthly installments will - re-

build

the "line of credit"

.

The

San

that

so

American

Trust

Francisco,

Company,

Calif,

has*

an-

•'A.

announced

Lockheed Management reports on

to Treasurer in 1955.
"A

...

Whitbeck, Assistant
was elected Vice-

S.

7)7 A

Lockheed's

Vice-President,
President

of

of

Bank

The

Eldon

New

Read, Jr. of the
controller's division and Robin A.

York.

Danton

H.

the

of

division

banking

;

dents.

Dr. Gabriel

-

.

facturers

York,

-it',
*'t \

1

James
E.

Company,

New

MacDonald

R.

and

have

Robinson,

been

1.

The past year or so

heed's

according
nouncement made by

to

York,

an

•'

v-s;:

Everett

J.

N.

Presi¬

Livesey,

announced

Y.

Arthur J.

Vice-President:

with The Dime

came

a

dozen airplanes a

a

airplane

or

in June, 1938. He was promoted
to Assistant Auditor in 1955 and

every

ness

week.

.

Sales for

1958

to

rose

a

v

40 days.

-

peak rate-

able return

Earnings represented
programs

military

on

loss

<

and. commercial

initial deliveries

spares

bank's
Mr.

Foster

the

entered

Dime's,

employ in January. 1923.
After
serving in various capacities. Mr
Foster was promoted to Assistant
Secretary. He is presently one of
the officers in charge of Main Of¬
fice Banking Operations.

duction
our

Flat bush

Branch

the

and

officer

charge of Banking Operations
the

at

Main

Office.

presently serving

Mr.

Lee

is

Staff Assist¬

as

into airline use,

period
of

a

on

months have been

than

more

a;

No

the

Stein

came

with

Dime

in
1929 and is Manager of
Dime's Coney Island Branch.

longer just

airplane

an

Lockheed moved confidently into

areas

He has served

as

ant

Secretary since
presently managing

Assist¬

an

1950

and

the

is

Dime's

Flat bush Branch.

William
elected
cial

M.

Rice

Co.

has

been

of

New

Jersey.
He heads the business
promotion
and public relations department.
£

The

The

common

Hillsdale,
from

<!

N.

$315,000

stock

of

National

J.,
to

was

Bank,
increased

$420,000

stock dividend and from
to $525,000 bv the sale

stock,

of

expansion

moves.

reorganized old

We added

ones.

fruition in

new

Here is what

a

series

effective May




6,

tions, this

new

facility is the most modern in

Monorail

divisions and

we

have done:

by a
$420,000
of

new

(number

a

our

versatile

$5 million monorail line for

proposals to relieve

grouped
into this

many
new

ideas for

many

for

other urban trans¬

of

our

re¬

extensive foreign activities

subsidiary. LAI will work out package

foreign countries embracing skills,

serv¬

ices, and products of nil our divisions. They will
encompass

aircraft manufacture, sales, repair, and

electronics; nucleonics; ground support; and other

of total

elements to develop integrated transportation and

Department missile expenditures is for

In aircraft the

defense systems. .*

elec¬

average

tronics share is 18.5% and forecasts Ln commercial^

electronics

industrial

We have

our

Lockheed Aircraft International. We have
'

bright growth potential. The Electronic

Lockheed is

System. Outgrowth of

service; airport services; communications; missiles:

electronic components.

and

materials, component

portation problems.
.

strumentation.

Defense

on

parts, and aircraft systems under operating condi¬

similar

components, equipment, systems, and advanced in¬

a

Dawsonville. Designed to test

Seattle. This first U.S. monorail opens prospects

Electronics and Avionics Division. We formed"

gains in the next five

#

capital

Hillsdale

came to

Industries Association estimates 46%

i:

Vice-President, Commer¬

Trust

study and planning

closing months of 1958 and early 1959 in

It has

Providence, Providence, R. I.
s;:

near

skills and facilities, we have received a contract to

this division to manufacture and market electronic .a

Harlan T. Moses, was named a
Director of the Industrial Bank of

f;

Georgia,

long efforts to increase utilization of

LOCKHEED EXPANDS INTO NEW FIELDS

Years of

Mr. Watson has been associated
the
bank
since
January,

4;,y

regions.

effects of radiation

Lockheed

com¬

where

the future will be found.

2.

manu¬

process

the U.S.

the

With

1931.

in fuel-short

design and build

the

-

surrounding circle of ,1

to the Senior Officers.

Mr.

our

*

Steps to broaden the hard core of its

related sciences.

area, we

Nuclear Products branch at

Force's multi-million dollar nuclear laboratories in
north

They have been months in which Lockheed took*'

pany.

never¬

;

long-term future in this vital
a

is

7 Last year Lockheed began operating the Air

-

aircraft-missile work into the

a

established

reactors

preparation for the golden quarter-century that

the critical

growing daily.

facture, and installation of large heat

off heavy production. They have been months

lies ahead.

power

and applications of nucleonics

ing reactors to colleges. It plans the design,

however, has heightened

long-term sales prospects.

But these past

Mr. Lee

joined the bank's staff
on July 1, 1929
serving in various
capacities including that of As¬
sistant
Manager of the bank's

and services, but

coming, nuclear

Georgia Division. It has already made sales of train¬

of Electra airliners. The Electra's successful intro¬

Department.

"

ground

manage

^ jn- el^trbnics; tomcMTOw's^

To build

profit-

a

in

us

construction projects, and

on

ability to build and

cleonics. Slow in

are

ings for 1959's first quarter, while substantial, were
below the 1958 level.

bid

our

our

theless inevitable,

—$278.6 million for the first three months. Earn¬

Assistant Treasurer in September
of 1958.
He is a member of the

Investment

strengthen

nities

1957. In

over

gen¬

place

Lockheed Nuclear Products. If today's opportu¬

record $962.7 million.

14%

leader in

move can

support for missile and space activities.

1

were up

a

nuclear-powered submarine and ship field,

expand

1959 sales have maintained their all-time

shipbuilding firm and

heavy construction. This

the

.

working day.

every

Pacific Coast
eral

first flight of a new type missile, space

Earnings for 1958

Miles, Mervin Foster,

Howard B. Lee, Leo B. Stein and
Edward L. Watson.
Mr. Miles

;

we:

3. Performed $1.3 .million in missile-satellite,bufsi-;*

the

following promotions to the rank
Assistant

Delivered
Made

vehicle,

dent of The Dime Savings Bank of

Brooklyn,

1.

2.

vy7

,

has been the busiest in Lock-

history. During the past 15 months

■A,

acquired control of this company—the third largest

an¬

Edward J.
Pierce, President of the Bank,

Mr.

Puget Sound Bridge & Dredging Company. We

LOCKHEED'S NEW LOOK

elected members of the Board of

ant

I'i.1

,y 1 *.

Trustees of Harlem Savings Bank,
New

4

-v

Hauge, Chairman of

Trust

"William

^

A

Committee of Manu¬

the Finance

in

■

1

i

*

of

0mm:

growth position

named Assistant Vice-Presi¬

were

-v

•

Harold H. Helm,
Nannen, who be¬

by
Mr.

his career with Chemical in
1927, advanced through the ranks
gan

Volkert

.

F";?"

Herbert W. Nannen

Chairman.

are.

for 33%-

to

neophyte in the electronics, field, y
had years of experience in aircraft and7 "
engineers and

r

technicians who will remain at work in this field in

-

Last year Ave

new

available to government

no

other divisions.

7.1

Lockheed, S.A. This

performed $30 mil-'

lion in electronics deshm-and fabrication..

.

•

»"

"

7

subsidiary, located in

Mexico, makes the experience of all our divisions

66%

years.

missile electronics. We have 3000

,

of

Bank

Belen, N. Mex. increased its

actually

the

funds

The

•willl, agree^^to" make available for
their

H. F.

The 1, Bank
$100,000 and a

*

costs

which

plarbio write checks for

thq

Currency, W.

Cashier.,

„

nothing

of

Bank

President and

is

has a capital of
surplus of $150,000.
A'O'-'A., :;"•*>...
•

move

a

National

&

,

Indianapolis, Ind. and
Fidelity Bank & Trust Co.,

Trust

W.

announced

Nat'onal

Coast

Comptroller of the

Chicago loop bank—was
by Continental Illinois

major

•*'

Fletcher

can

As¬

and

with
\ ;

been

"Gulf

Almeda," Ameda, Texas, received
a
charter from the office of the

offered by a

ever

used, Will enable participants

years.

18 years.
y

continue using the
"revolving" basi's. "

can

Trust

Plans for merger of the Ameri¬

promotions

Assistant

the

with

associated

been

s.

Directors held in the Main Office.
Other

first of its kind

pany,

has

Dreby
for

Thursday, May 21. 1959

.

money on a

early in June of
check-credit plan —

personal

-Membership,

of

the Board

with

the bank for 30

bank

dent of the company at a reorgan¬

meeting

the

starting

Norristown

Heller has

Mr.
with

was

.

customers

-

Inauguration
a

Company.

promoted to Assistant Vice-Presi¬
ization

been

has

former

the

Rodney W. Magee, Manager of
the Logan Square office, Mont¬
gomery
County Bank and Trust
Norristown,

with

38.years

were

.

Assistant

to

been

has

Magee

bank

Company,

Heller

Robert

bank for 30 years.

appointed Assist¬

Vice-President

by directors of both banks.

Benjamin
E.
Assistant
Treasurer-

M. Fries to
Manager of Installment Loan De¬
partment,
Pottstown;
and
Jo¬
sephine McPherson, Manager of
the Travel Department.

Vice-President of Provi¬

Tradesmen's

dent

Indianapolis, Ind.

to

Treasurer;

been

Mitchell has

Secretary:

Dreby

52,500

outstanding
value $10).

Kearsley

elected

New

Bank.

change

shares

sistant
Albert

of

shares,

Chronicle

and

business leaders for

long-range industrial development

programs.

,

,

Lockheed Azcarate, S. A. First definite step in this
Mexican program, our new
aircraft
—a

affiliate is beginning

an
-

manufacturing

program

light utility plane suited for

below the border
many

jobs at high

and low altitudes and in varied environments.

.

v

,;4

'**

Volume

-

189

5843

.

.

and Financial Chtonicle

The Commercial

.

(2315)

Ransom holt Smith, care'of the -'liquidating -Samuel Montagu & Co. Ltd., bulr
Milo, G., Wildrick Joins
•*>.-/
.'lion merchants of London, Eng.
V^vr'
Cook, .bank.'-'" >'
-a; Senior
Vice-President. since
Absorbed by: The United States < The certificates will be for fine
Eppler, Guerin & Turner ;
r
1951, succeeds Harris C. Kirk, who National Bank of San Diego, Calif. -gold to/be delivered in the form
;
DALLAS, Texas—Milo C. Wilof bars in London or Toronto.
was elected Chairman. Mr.
Kirk
.•
^drick, veteran administrative en¬
;
.*
• !v ' •. *
•'■':
-?V. will continue as Chief Executive
The Bank of Nova Scotia will
gineer
and
investment
analyst,
Puget Sound National Bank of
V- Officer.
issue certificates for Toronto dehas joined
the staff of Eppler,
Midway, Kent, Wash., with com¬
r
{ In other changes, Dwight W. mon capital stock of $100,000, has livery., and Samuel; Montagu & Guprin & Turner,-Fidelity Union
{.Co. Ltd., will issue those for Lon- Life Building, as a member of the
Chapman was elected Executive
gone into voluntary liquidation by 7
don * delivery.
The ' certificate's sales and research staff.
Vice-PresidentJ." and
Stuart
A.
.

nounced

e

the

M.

,

Number

as

Cook

election

of

President.. Mr.

Bank

,

1<>

Opportunities

In Convertible Bonds

.

Stressed in New Study

-

of its shareholders
{.may be interchanged, in which
April 14, effective at close
case, an adjustment will be made
business, April 30.7V{3*7//{7/
rior any difference existing in the
Liquidating agent: Mr./R./B. relative
price of gold on the two
Gordon, care of the liquidating
•f markets. Ownership of the certif¬
bank.
/'■- •' •.r'
,./.;7 ;v.
Absorbed by: The Puget Sound icates may also be transferred. ;

a,

Heatley

was

Senior Vice-

named

Senior

/.

of

.

the

-Heatley

Vice-President

bond,
was

a

in

charge

resolution

of
-

.

department.
Mr.
Vice-President/

.

,

.

National

*

'
iMag ;."Beach
National I Bank,
^ Lrong Beach, Calif.; with common
capital stock of $375,000, has gone

VTtfr;

Bank

Wiidrick

Mr.

dated

President. Mr. Chapman had been

•

Pennsylvania banker tttrnecFauthor has study published by Sal¬

vestment
years

field

entered,
more

with

ago

a

the

than

New

adds

&

which

.

the

to

~

brokerage house, later; coming to
Texas in 1952

as an

general and to suitability of such

administrative

investments for banking portfolios

engineer with Chance Vought.

"Convertible

Form Alan Associates

»

the

of Nova

(Special to The Financial Chronicle)

; ada,;

ST. PAUL,

quist is

now

L. Smith &

bonds

are

of!

one

challenging opportunities

of¬

fered to commercial banks by

With R. L. Smith

-

Scotia, Can- /
Alan Associates Securities Corp.
announces that 4 a; new type r has beVn formed
with{offices?.at;: 99
.of 'gold certificate which facili¬
'Weill Street, New York" CJty, to
(iir-dated April 15, effective April 17. tates
trading in gold is being in¬
'<5 ^
Liquidating agent: Mr. C. Arn- troduced by the bank and by engage in a securities business.

Hutzler

knowledge

more

subject of convertible bonds in

York

of Tacoma, Wash.

{
The Bank

Bros.

omon

in¬
ten

the

constant

change

is typical

which

Minn..—Roy, S^Tingr .ofqlir changing.economy," accord¬
ing to William S. Skelly, Vice-

affiliated'"with Robert

President

Co.,. Pioneer Building.

vania

of

Pennsyl¬

Western,.

National

Bank.

Mr.

Skelly is - the author of a
comprehensive study of converti-

3.

LOCKHEED STRENGTHENS ITS POSITION
•!

■

•

Expansion and diversification
future. More than that,

■

they

are our
are our

stake in the

claim

the

on

present. To assure our position as system manager
for

today's complex weapons

range

of

we

,

must have a broad

of technical and managerial skills. From each

to

not

large contracts here and

forget, in this concentration

solid worth and

important

now.

on new

But

we

as a

prelude to

our

varied research programs

do

Division

things, the

growth possibilities of the old.

Military Aircraft. Still vital for
as

plied 42 times in the past five

knowledge and experience that permit us

obtain

will

catapult

us

into

of

space

of the

continues to be vital to oqr

In the

growing

concern over

v

i

interest from

and enrich our daily liv-

submarine defense,
importance. Our

P2V Anti-submarine patrol plane, ifl production
since 1945, will be succeeded by our vastly im¬

"This

.

had

a

decade of

early warning

success.

*./■

^

,

...

early warning we have

We

weapon system

are

proposing

a new

to meet the continu¬

ing threat of coastal attack. And we are proposing
many

.The study goes into
of'convertible
bonds,

vantages

FORMULA FOR GROWTH

We
;

r

:*
;

prop-jet electra. It is proving
sales to

the world's airlines, and we expect

out on

grow.r
But

/

already in
production; supersonic transports, air buses, and
family planes now on the drawing boards. Business,
private, and airline flying will expand in the sixties
as

transports and air-freighters

all three have in the fifties. /

7

We

and space

only safeguard and
the interests of their

tomers,
•

employees

holders,

-

but

and

also

to

missile
: /

'

tion.

for

the

large

demand
deposit growth in future years
•which
must
necessarily accom•pany
expansion
of the nation's
:
physical volume of production and

1959 will ex-

consumption,"
\

engineering

Mr. Skelly.

says

He states that convertible bonds

-offer

excellent

an

opportunity iti

this respect.

30% gain over 1957.

•

Halsey, Stuart Group
Offers Equip. Tr. Ctfs.;

started years'ago, have
strengthened. Out of
is.'coming a wealth of managerial

these programs-

that has made our

material

diversification work

;'

skills of the

Halsey,

associates

•

Lockheed with management
highest order in years to come. • -

s

Stuart
on

Co.

&

May

Ohio

certificates,
maturing
annually
1, I960 to 1974, inclusive;
•:
The
certificates, first installment of an issue not exceeding
$5,100,000, are scaled to yield from

/-

And this is the greatest

growth potential of all

■

managerial skills,
tradition of leadership, and burning

—brainpower, technological and

j? dedication to a

74.25%

{ faith in the future. These are Lockheed's formula
for

r

cates

will

are

•

f

;

-R.

TRANSPORTS • ROCKETRY
BALLISTIC MISSILE RESEARCH k DEVELOPMENT • WEAPON SYSTEM MANAGEMENT • ANTI-SUBMARINE PATROL AIRCRAET
NUCLEAR-POWERED FLIGHT • ADVANCED ELECTRONICS'AIRBORNE EARLY-WARNING AIRCRAFT* AIRPORT MANAGEMENT
NUCLEAR REACTOR DESIGN k DEVELOPMENT _• GROUND SUPPORT EQUIPMENT ' WORLD-WIDE AIRCRAFT MAINTENANCE
•

..COMMERCIAL k MILITARY PROP-JET

to

•

entire

be

W.

Commerce Com¬
1.

r

secured

certificates

of

issue

50U box

by

cars

to cost $6,375,000.

in

the

offering

are:

Pressprich & Co.; Freeman

& Co.
!

.

-

.

Co.,. and McMaster Hutchinson

:&

JET TRAINERS

•

subject to authorization

Associates

.J
...

according

4.55%,
*

Issuance and sale of the certifi¬

:

growth.

to

maturity

estimated




an

$2,400,000 Chesapeake &
Ry. 4Mj%
equipment trust

The

•

and

Inc.

offered

15

of

issue

mission.

JET FIGHTERS

strengthen

loan

•'and

-of the Interstate

*

cus-

stock-

their capital positions in prepara¬

-

well, and will provide

-•

JET TRANSPORTS

pro-

June

projects, and there is no limit to their

potential.

not

,mote

more

programs,

>

conjure with. Less well-known are X-7,

X-17, and kingfisher. All are Lockheed
:

opportunity
by changing conditions

'presented

been continually reviewed and

:

>

*

emphasize management. Our management

:^d:exebutive
,«

are

1 their

r

:

was a

competitive
struggle
financial institutions

must be alert to every

emphasize brainwork. In 1959 our employees

total work force. This

-

to

•

v.-.. -

Missiles, polaris, discoverer, argus—these are
names

;

the

less strictly regulated
lending and
investing
operations, and less severely
taxed, commercial banks are at a
disadvantage. Consequently, they

in

•

and

other

which

>

degrees increased to 4600, nearly one-tenth of our

i

beyond this are our plans for the future—

executive

government-company R&D work in*
;

"In

•with

development work last year was for

-

conversion

•to

with doctorates and other science and

Commercial Aircraft. This year brings peak de¬

"

and

cecd $400 million. /.
We

takeoff and landing
vehicles, and others.

our new

search

our

and

v

than
tremendous $349 million reAlthough

emphasize research.

nine-tenths of;

the history
their ad¬
disadvantages, in¬

values,
restrictions, and
conclusions based on the study.
"

> /

•

and

regulations

'h government agencies, we performed over $25 mil¬
lion of R&D work with our own funds. Combined

other kinds of aircraft for the future—new

liveries for

valu¬

a

preface.

another $18 million.-

transports and trainers, vertical

planes, air rescue

study represents

bonds," the publisher states in the

expansion into new
areas, continuing diversification-these are the de¬
tails. Behind them, overriding them in importance,
is a broad managerial philosophy that welcomes the
future and prepares for it.
' r; y
1
Through the years we have plowed hack 60%
of our earnings after taxes to assure our future. Last
year we spent over $ 15 million on new facilities and
equipment. For the currcntyear we have earmarked

,

proved P3V, for which we have pre-production
In the field of airborne

banking,

able addition to the meager litera¬
ture on the subject of convertible

climb, Lockheed
on space is only

,

bur anti-submarine efforts rise in

contracts.

graduate school of

RutgeTs University.

Our, present programs, recent

•

other countries;
r.

Department,
study under the auspicea

vestment

4.

factured in

Hercules

Investment

made the

our

space programs

Skelly, who is head of the

WPNB

for

speed, altitude, and time-to-climb; will be manu¬
quantity here and abroad for West Ger_many.and NATO defense and has excellent possi¬
bilities of being selected by other foreign countries.

Mr.

/

Out of the

■just begun.

holder of world records

Our C-130

New

|'rv

and the regulations of the
Comptroller of the Currency gov¬
erning his purchase.

future.

nation's airlift and is drawing much

Hutzler,

banks

important place in the

Our F-l 04 starfighter,

are

years.

will climb with them. The assault

flight, manned

occupy, an

military .aircraft

&

investment house.

The study considers the suita¬
bility of convertible bonds for the
bond
portfolios
of
commercial

Missiles and Space
coming discoveries and proposals that

ing. As missile and

•

defense, equally

space

York

Lockheed missile and satellite sales have multi¬

shipbuilding construction, foreign operations—we
draw the

Brothers

tomon

system manager for both.

expanded activities—electronics, nucleonics,

our

jble bonds just published by Sal-

Navy's newest, most formidable

is strongly influencing the nation's entire
defense strategy, discoverer is the series of space
biology probes for the Air Force and Advanced
Research Products Agency, forerunner to space
travel and satellite defense systems. Lockheed is
weapon,

•

-

The polaris, the

.

•'

<

.

•

;

1

4

.

^

*

Chicago Analysts to Hear
CHICAGO,

II1.—Melvin H.

Chairman of the National
Gypsum Company, will be guest
'speaker at the luncheon meeting
of the Investment Analysts Society

•

Baker,

of

Chicago to be held May 21

the Midland Hotel.

at

20

The Commercial and Financial Chronicle

(2316)

Business Must Now

Accept Its
Frightening Responsibilities

solvency becomes even more im¬
portant. We must buy defense this
year. We must be equally able to
afford it next year and the year
after.

significantly it has produced
force which neither Busi¬

more
a

Labor has fully analyzed.

The

has

situation

New York

Mr. Nichols states free enterprise must accept

the frightening

The

chemical head calls upon business to adopt a
to meet the threat of this economic and
political aggression: (1) pay-as-you-go national defense pol¬
icy; (2) freer international trade; (3) make labor a "coguardian" of nation's economic future, and (4) enter politics
"in the broadest sense."
In depicting this new concept of
"responsible trusteeship," Mr. Nichols says "we must be the
merchants of both peace and prosperity" without controls
which would destroy our way of life.
system now. The

May 8 happened to have been
Day—Victory in Europe. I
am afraid
that the fruits of that
so-called

been

not

have

victory

well

too

As

spent

a

life-time in
the world of

business, I
have strong
that

Lord

"few people
do

their

the

efforts

war
Thomas

well who do

£>.

ixicnois

vival

We

are

by

depended

tremendous

our

our

sur¬

very

rigid

business
would not

on

slingshots to fell the
future

lies

in

our

life

of

way

we

anything

For

we

conditions—without wartime

personal
other duties,

know

dination.

Moreover,

continuous counterthis public opinion
marshalled by the President—that
this

has

done

much

so

the

arrest

to

that

one

before.

we

World

Inflation

cunt. And
be

is

insidious intoxi-

an

is exactly the time

now

concerned

We

until

Your

the

oppor-

it.

about

If

we

are

pressure

you

Congress
in

can

be checked.

put

can

are very

the

on

potent weapons

this fight.

Point

2_A

World
We

New

Look

at

Trade

ali

are

business

in

and

have not came ,here to Plead ±'or a
in f/icLr
irk
nv

own

Hnnv

vnn

to ask you to deny vmn*
your
interests. But there is defi¬

nitely

or

with

your

for

armed

ever

hostility

faced

was

the

country

our

61/2

of

years

the

the American Revolution.

state-planned
that

know

we

Communism,
we

can

This is not

mere

patriotic rhet-

oric.

this

Great Britain proudly called itself

lives, and may well
children's and grand-

room

span

our

children's lifetimes.

Any discussion

nation's

our

future must start from this prem-

ise: "We
that

problem
definitely
termination. As long

are up

has

foreseeable

against

fixed

no

a

or

the Communits insist that their

as

By

of documentation, I

way

cite the following examples:
For years, the Labor Party

of

the Socialist Party. Yet in its most
recent publication,

of

"Plan for Prog(i s s u c d last December)
which is in fact their blueprint of
the future, there is almost nothing
ress"

said

Socialism.

about

All

emphasis

is on running a
capitalistic society more efficiently

aim is to dominate the world, we

than

have

no

ures

that

servative Party, Furthermore, the
Lab orit es even warn against

choice but to adopt meas-

will

prevent

this from

happening." Khrushchev stated in

M'j

thinV

IQCH.

Sm
of

war

military

opposition,

"damping

bvmeSS

or

their

the

u,c

nnnituiicm

but

conflict,

nom^st/ueie "0l0g'C
stiuggle.

"

Merchants of Peace

r

|

and

o

has

a

challenged
us.

us

special role. To the
Communists have

enter the fray with one

tied behind our back.

For

is

x

,,

^

^

be

can

"en¬

.

has

not

from

the

progressed far enough
isolationist position on

tariffs and world trade of the first

me

to

program"
nessmen

for

to

the

meet

nation's
this

Jhatisrtrue, but busine^s betveen
^

XsZ ^exniiidhil
°hl ®inT
SS
to'r afo

busi-

also

nations

a

exist!

between

mutually satis-

•An address by Mr. Nichols before the
Bankers Association, White

.

.

T

the reappraisal I

to

has

nothing

to

.

,

^

referring

am
rln

with

thn

personal
corruption
of
certain labor bosses. The auestion
0f corruption is important but it

proven

^in%£35l
well

•

Since

we will be compelled for must clean

many years to live in the shadow

Sulphur Springs, West Va., May 8, 1959.

of

aggression,

our

own

internal

and

—

an

/:

in

today

paradoxically,
United

the

most

tive

of

creative

the

oriented

the

wards

lie in

But to

is

go
natural

a

nation's

business-

alsio

be¬

monetary

greatest

re¬

is

the business field.

\

country it also mesuis

our

that the

as

imagina¬

generation,

This

heritage; it

cause

our

well

as

and

older

still

States

brightest young people,
the

^

>

almost

Yet

of

era

of the greatest need

area

combat
with

to

are

primary

em¬

cause,

This

does

pect

not

that I

mean

ex¬

investment banker to
precinct leader
al¬

every
become a

—

though some might really enjoy
Economic this experience. But what I hope
Development has written that the to see is more of our businessmen
nation tends to deny "that labor thinking broadly about national
for

Committee

The

is the main economic resource and
that wage rates are

in

ment

and

costs

in' prices." 't
infant

an

for.: his

actions

therefore

and

"'O'

••

■:

and

adult

an

is,

share respon¬

now

and

sibility with Management for rises
in the cost of living, the threat

of

international

questions and
offer their
opinions and advice.

not

.

not responsible

is

Labor must

so

the main ele¬

being; afraid

to

Moreover,, businessmen should
readily on 'tap as consultants

be
to

government; they should be
cheerfully available for a term
of duly, as a public
official; and
their

firms should cheerfully

co¬

private conversations: they should

free world allies.
Labor

and

together

work

nation's

tables

new

alone.

It

ing

room
/

the

of

future.

This

the bargaining

done at

classrooms

V

responsibility

economic

the
t

a

co-guardian

as

cannot be

philosophy

out

that defines this

Labor

must

Management

must

and

in

done

be

the

over

politics

there

active

more

is

a

interest

in

the

theory that
definite "trickle

on

very

up" in public affairs and that their
local

actions

national
f

.

and

can

affect

do

actions.
Sums Up Theme

.

What does all this mean?
•

•/:.

.,

Simply this:

New/Political Role for

Business—A New Trusteeship
In

a

local

din¬

tables.

Point 4—A

take

approaching this subject I
I am dealing with com¬

We in

business have

bility for

seeing that

maintains

sound

a

responsi¬
nation

our

fiscal

policy;
responsibility for
bustible
materials.
But
to
do reappraising world trade in the
otherwise would be unconscion¬ light of enlightened self-interest;
ably neglectful of the overriding business has a responsibility with
mission
of enlightened
business labor of redefining an economic
leadership.
philosophy for the future; busi¬
realize

All

of

thoughts
too

much

contributed

have

us

on

this subject—but not

"thought,"

I'm

afraid.

Now I want to make it clear at

business

ness

a

has

has a

a

responsibility to devote

time and thought to national and
international political questions.
I think it can be boiled down

the outset that I

the

to

politics

am

not appealing

businessman
as

to

enter

counterweight

a

to

Labor's expanded political opera¬
Neither am I asking for a
or

sure

group.

have

In

observed

called

buiness

revamped

new

my
a

pressures.

pres¬

experience

number

Indeed,

of

1

so-

when

I

into

phrase

a

years

in

ago

businessman
is

a

—

society in

business

Fellow

trustees

Great

Society

its

greatly

the

on

"A

which

25

over

essay

think

functions."

happily

written
an

men

of

of

their

or

more

'

businessmen

stated,

I

the

of

—

believe—fellow
future—here

..is

had occasion to

Out

suited

of

up

this

corruption,

one

not "in terms of supporting
H. Dietzmann Opens
political party or simply to
advantages for business.
SAN ANTONIO, Texas —HelMy point is this: Our problems muth Dietzmann, Jr., is engaging
today—our country's and the Free in a securities business from offi¬
World's—are primarily political. ces in the National Bank of Com¬
Today it would be ludicrous to merce Building under the firm

sense,
one

have

business

but

re-

far

interests

demand

that China be divided into trading
areas and have nations go to war
over

in

business concessions.

our

past. When

we

talk

This is
now

name

a

formerly

Shearson, Hammill
&
Rauscher, Pierce & Co.

Mr.

with

Co.

and

Forms

Flag In v.

ALEXANDRIA, La.—Alex McRae is conducting a securities bus¬

sense

business is

was

of

influence.

In

of H. Dietzmann & Co.

Dietzmann

spheres
of
influence,
we
are
referring to political, not economic

Business Is

mess.

Labor's bigness has

some

ment in

secure

th!ti0Umey fUrther d0W" the road' - opposes1 corruption
hand Point 1-National Fiscal
responsible 1^ Lders a!
the
Responsibility

on

we

namely,
ployment cost increases."
the

overtly

warfare

leadership is being denied
has recently many of our most gifted people.

must first deal

we

eco¬

era

for

"if

that

inflation

and

of

an

l

factory economic alliance

rp,

continuing

nomic

imperialism

was

serve the Govern¬
our summons to greatness. We can
capacity or another, do no less. And if we are faithful
I
have
been
appalled
by
the to
these
tenets,
America
will
^
should not and can not be a one- inconsistency of some of our fel¬ never become a brooding fortress
way street. We must, of course, low businessmen who vigorously of
despair, but will continue con¬
guard\ against drying up our own complained
about
government fidently on a course that carries
industries by having our markets interference in business only to
her
ever
onwards and upwards
flooded
with foreign goods but see them in
Washington a few to new peaks of achievement.
we
must
also
give much more days later exerting every effort
rpHous ^onriderati^n
to obtain special help or treatment
our
own
Knowlton Opens Branch
from the government. Don't for¬
«?W get that a government big enough
SAN LORENZO, Calif.—Frank
industries
to give you everything you want
Knowlton &
Co. has opened a
J inV
rj 2r
en0ugh profits to afford our prod- is or may be big enough to take branch office at 16112 Paseo Del
ucts. Indeed, in the final analysis, everything you've got.
Campo under the management of
no Dolitical alliaonce between nn-v
I am talking about businessmen
W. W. Besson.
two
nations
can
lone
survive
entering polities in the broadest

seen'perhaps

„

be presumptuous for
outline a "Comprehensive

as one

tions.

Point 3—A Reappraisal of Labor

.r,

,

It would

Investment




trade

It is said that American business

a«aipst state the tw0there
unless

wsxtts&ffi
say

we

the

battlefield where

Suggests Four Guidelines
Tj

„

economically, it

world

proved its superiority.

Communism the free world businessman

are

ox

free enterprise
system withstood the assault and

In this continuing fight against

extent that the

one

of

uiipuu>c!»

other

results from

Con-

impulses

vndi

C°" aap!lEdisra and the
was
Socialism

Prosperity

,

vital

the

c"xpans!on"
words, here

?
in

should h*not by means
be destroyed not

business and the nation.

Freer

lightened self-i nterest."

Today is different. We are now
a type of war that will probably
continue for as long as anyone in
in

this as un act thac helps hotn

stand

test.

they meet not as
the boss,
high-salaried executive

and

......

"The 30 Years War." But the long-

as

of

era

covertly.
This
is
ideological warfare.

from the shop with

said

something called "enlight-

,

est

events

such

records

President of a

a

The Steel industry

need not be fatalistic

J,n.ed self-interest. 1 would define

history

but

private actions and the

own

charity

welcome

we

about it—inflation

pnnrirv

We confidently accept the chal-

lenge.

when

Corporation,

man

of

trinity to put the free enterprise
system
into
world
competition

never

a

—

inflationary spiral.

must

we

match the productivity of a nation
which does have the equivalent of

confronted by a

is

faced

just

coor-

wartime controls.

situation—

is

pressure

we

than

,

Our nation

insisting that
phony issue brandbeen

a

late. And

greater

Today

freedom

inflation, the growth and stability operate; they should increase their
intercourse
with
our
political
ished
by reactionaries to fight of the economy, our economic
leaders through conferences and
spending programs. However, it position vis-a-vis Russia and our
is

far

this matter.

unique

have

money

inflation

in wartime.

ik •

have

has

lenge

our

with

living

faced

longer be casual about

no

of

cost

treasonably steady" fpivpeveral
months, those who favor' cheap

The

colonialism

are replaced by a younger into/ business.
generation.
result of
our

Union meets with the President of

trying to "sell"

of

democracy.

turbulent

those

through

who

sides

both

on

trying to

course

are

years

As

Our

the free world.

can

(he

s|ncc

lived;

pressure.

strength,

—

we

that another unbalanced

runaway

rests on a founda- that our present peace is partly a
responsibility
at myth and that a very real "cold
home, and what I believe to be a war" exists. Thus A m er ican
new concept of responsible trusbusiness must meet wartime
teeship by the business leaders of conditions
or
"cold
wartime"

preoccupation

pet

costs.

caught up in a
inflation, it will be too

menace.

own

heavy

We'know

defense

high

budget will undoubtedly increase

to

In essence,

and this in turn
tion
of
fiscal

However

plus

every

wait

far greater arsenal than

a

very

trying to preserve,

are

project

afford

cannot

this is the great challenge to free enterprise—a chal-

Communist

need

we

confronted by an interGoliath and

.

We

leaders

old

with another.

procedures.

While it is true as one has
remarked, that the United States
can
afford to devote as much
resources to its own survival as
the
Soviet Union can
to
our
destruction, some programs will
have to be sacrificed to maintain
the high defense level.
"

the

Communists

the

when

destroy the

national

to a good business
it becomes vital that

and^ttf^lnflationary

coordination.
But we
nothing else."
Stated bluntly, 1 believe that today institute
such
controls
except
the
business
community
bears under the most dire emergency
frightening responsibilities — bur- conditions. For we know lull well
dens we dare not lay upon the that a regulated economy would
future.

so

in¬

return to sound and business¬

We

like

terms. This has been

own

demonstrated

business

and

year

We have the skill and industrial

on

point

economic

all

Now

been

plant to outstrip

that

son

dices

economic level the real Communist threat arises from their system of coordination and planning,
The Communist State plans eco-

right

when he wrote
to his

recession.

market.

Chest erton
was

government. That is why
fight lor a bal¬
anced budget is so important. The
government
operated
with
a
deficit last year because of the

individual
development
on
requirements of competitftW
the possibilities of profit in

convi ctions

the
na¬

President's

the

[•/productive tasks and for purely
./political purposes. A market can
always be captured by absorbing
a
loss.
On
the other hand, the
Western
businessman
plans his

who

one

has

applies to
of our

tional

nomic development according to a
system of priorities and assigned

pre¬

served.

rule

same

financial management

program

V-E

later the only answer is to go

special protection—to Labor as a
co-equal when the Taft-Hartley
Act
replaced the
Wagner Act.
Perhaps Business and Labor will
only face up to this when the

out of business.

responsibilities of Communism's challenge to free economic
four-point

the red for awhile, but sooner

or

City

we

system

our

ganized Labor is no longer in its
infancy. The Federal Government
has
recognized
the
change
of
Labor from an underdog—needing

in

By THOMAS S. NICHOLS*
Chairman of the Board, Olin Mathieson Chemical Corporation

of

are

primarily

changed

that
you cannot remain fiscally sound
if you fail to balance your books
year after year. You can operate
Every businessman knows

Thursday, May 21, 1959

.

convince others of the Tightness of
our
free
enterprise system, but

drastically since the Thirties. Or¬

.

.

fight. We

new

ness nor

.

a

a

Tool in Cold War

iness from offices at 1515 McNutt

under

the

firm

it could be said that

Drive

tool in

Flag Investment Co.

our

cold

war

name

of

Volume

5848

Number

189

.

.

Now Bull & Low

Mergott, Rappa Co.
Opens in New York
G.

Nelson

tore J.

Mergott

Rappa

announce

(2317)

21

Restaurant,

54

The Commercial and Financial Chronicle

.

New Alkow Branch

J
r

Jacobs

&

54 Pine Street,
New York City, members of the
New

and Salvathe forma¬

Low,

Stock

York

that

nounced

withdrawn

tion of Mergott, Rappa & Co., Inc.,
with offices at 40 Exchange Place,

J.

partners

has

Jacobs

office

direction

at

South

7

Street

of Charles H.

under

Fiege, Jr.

from

partnership in
Robert W. Bull, Jr. and

the firm.

Arthur

Harry

BALTIMORE, Md. — Alkow &
Co., Inc., has opened a branch

an¬

Exchange,

Low

will

continue

the new firm of
members of the Ex¬

under

Bull & Low,

Named Director

change.

&

Co.,

has
of

board

elected

been

directors

of

the

to

Seal

Gold

Products, Inc.

Leavitt, Spooner Office
CEDARHURST, N. Y.—Leavitt,
a

Cruttenden, Podesta Branch

branch office at 536 Central Ave¬

MUSKEGON, Mich. —Crutten¬

Spooner

nue,

&

with

have

Co.

I.

Aaron

Melyiri Meckler

opened

Canon

and den, Podesta & Co. has opened a

Co-Managers.

as

branch office in the Liberty

Alexander J. Fuller is Associate Building

under the

v

Janeway, the widely;

market

investment

guest speaker
and

'forecaster

advisor.

New

of

York,

that

the

outing

will

has

be

held

Forms Albion Sees.

an¬

Association's

this

Albion Securities
been

formed

Company has

with*offices

11

at

Friday, June 19, 1959 at
Broadway, New York City, to en¬
the Tuxedo Club, Tuxedo Park,
gage in a securities business. Wil¬
New York. The Investment Asso¬
liam M. Dailey and Mary S. Dailey
ciation of New York is an organi¬
are partners.
' '
•
zation of younger men (under 35
years of age) active in the invest¬
ment banking business
in New. Evans MacCormack Branch
year

on

Vincent C. Banker, R. W.
Pressprich
&
Co.,
will be in
charge of the outing.
1 ;

York.

The

Life

management

of Bernard F. Wendt.

Manager.

known

Mayo-Smith,

Worthington

annual

Davis, a partner in the
underwriting firm of S. D. Fuller

Ouling

The

President of the.Investment Asso¬
nounced

Martin

Street.

Broad

will be Eliot

Hold Annual
ciation

as

Schwartz.'s

at.

New York Inv. Assn.

next

,

12:15

Association

will

hold

its

UPLAND,
Cormack

Calif. —Evans Mac¬
Co.

&

has

opened

a

branch office at 418 North Second

regular luncheon meeting at Avenue under: the management of
p.m.

Tuesday,, June

on

2

Norman S. Lawson.

■v

Salvatore J. Rappa

New York

and

G. Nelson Mergott

City, to act

dealers

in

brokers

as

over-the-counter

securities.
Mr.

Mergott has been in Wall

Street since 1925 and was one of
the founders in
1933
of F. L.

Grady & Co., Inc., which became
Grady, Berwald & Co., Inc., in
1949.

He

was

Vice-President and

Secretary of the latter firm.
Mr.

•

Rappa started

ment

career

with

his
&

Post

invest¬
Flagg

in 1929, later joining .Agiel '& Qo;,,
and since 1942 has been in-charge
of the Over-the-Counier

,Department at
"Co.

He

was

F.

Moseley &

S.

the

.

Trading

founder

the

of

; STANY Glee Club in 1953 and
! this

group has
entertained reg¬
ularly since then at STANY func:;.V

'tions.

L. & N. RR.

41/2%
Equipments Offered

Halsey,

Stuart

&

associates offered

-./.

Inc. and

Co.

May 19 $7,320,000
Louisville
&
Nashville
RR. 41/2% equipment trust certifi¬
on

cates, maturing annually June 15,
1960 to 1974, inclusive.
certificates

The

priced

are

In

yield from 4.25% to 4.65%, ac¬
cording to maturity. Issuance and
sale of the certificates are subject

"

to

authorization

the

of

1,000

issue

is

to

Associates

in

the

offering

INTO THE GUATEMALAN JUNGLE

are:

Dick

„

Merle-Smith; R. W. Press¬
prich & Co.; Hemphill, Noyes &
Co.; Freeman & Co.; Ira Haupt &
Co.; Wm. E. Pollock & Co., Inc.,
and Shearson, Hammill & Co.

Deep in the roadless interior of Guatemala a drilling

Ohio Oil and associates faces the

rig is "making hole" today in an exploratory well.

confront the search for oil in all rank wildcat

Piece

Form First Broad St.
First

has
165

Broad

Street

rain

at

offices

Rigging

by piece, the 142-foot derrick, draw-works, pipe,

and tons of

Corp.

Corporation

with

formed

been

..

by

mated to cost $9,161,060.

.

Flying

hopper cars esti-

top

open

secured

be

than 250

OHIO OIL AIRLIFTS A DRILLING RIG

Interstate

Commerce Commission.
The

more

to

to

a

supplies

flown

were

over

impassable ter¬

jungle well by air is

long odds that

one

territory.

of the

more

spectacular achievements of the first quarter of 1959
—a

landing strip carved from the dense rain

forest. A good prospect

a

same

period

during which

The

Ohio

Oil

Company

recorded these results:

geologically, this venture by

Broadway, New York City to
in a securities business.

engage

Officers

are

President and

Nathanson,

P.

Leo

Treasurer; Samuel

Beren,

Three months ended March 31

Statement of consolidated income

and Ger-

Vice-President;

aldine

B.

Nathanson, Secretary.
Mr. Nathanson was formerly with

Ariz. —Heller,
offices

in

has

a

been

with

formed

Officers

securities business.

Marvin

6,195,097
2,670,705

$10,197,813

$8,368,339

$

$

Net income for the

Heller, President; C.
Rex Rhoads, Vice-President; and
William J. Hunter, SecretaryTreasurer. All were formerly with
Selected Securities, Inc., of which
Mr.

Rhoads and Mr. Heller

Net Income Per Share Common Stock

Shares of Common Stock Outstanding

«

:

"

1

.

,

.

.

t

"

Louis

in a securities
business.
Niver is a principal of the

firm.




.40

.64

13,126,753

$

.40

Refinery—Barrels

10,084,000

8,863,000

4,077,000

3,878,000

THE OHIO OIL COMPANY
Findlay, Ohio
Producers

has been formed with offi-

Subject to adjustment by independent public accountants upon

at 186 Lincoln Avenue to en-

j gage

$

Liquids Produced—Barrels "
Crude Oil Processed at

ORANGE, N. J.—Univer Com¬
ces

.78

Net Crude Oil and Natural Gas

Univer Co. Formed
pany

'

13,126,753

-'/

Cash Dividends Paid—Per Share

were

Vice-Presidents.
I
j

period

are

S.

'

'

6,330,410
2,687,982

V

at

444 Camelback West to engage

4

54,627,835

Expenses

(Exclusive of charges set forth below)

Rhoads & Hunter Securities, Inc.,

•

55,948,899

Net Sales and Other Income

Cost of Sales and

Heller, Rhoads & Hunter
Formed in Phoenix
PHOENIX,

$71,861,976

Depletion, Depreciation and Amortization

A

$75,165,104

Provision for Federal Income Tax

'

-

1958

1959

Amos Treat & Co.

.

On May 5,1959, the Board of Directors

completion of year-end audit.

•

Transporters

•

Refiners

Marketers of MARATHON Petroleum Products

declared a dividend of 40 cents per share on common stock, payable June 10,1959, to

shareholders of record May 15.1959

'.r'

22

The Commercial and Financial Chronicle

(2318)

Continued

Shearson, Hammill Branch

from

.

.

Thursday, May 21, 1950

.

7

page

He
'•

'

Shearson, Hammill & Co., mem¬
bers of the New York Stock Ex¬

Bank and Insurance Stocks

change, announces the opening of
© new office on the Mezzanine of
the

Empire

State Building
u n d e r
the

This Week

management
Charles

Of

K.

fully
equipped
of¬
York

Many of
not been

has

rate

inK.

Charles

register board
the

access

to

Shearson, Hammill's private

news

Wire system

mar¬

which transmits

ket opinions direct from Shearson

Partners

and

gathers vital

Information from 36 offices in key
cities coast to coast.
&

Inc.,

of

Herald

textile

a

Asso¬

factoring

firm.

Now

Corporation

GREENVILIE, Miss.—Henry T.
Crosby Company, a corporation,
lias been formed
investment

;

:

slow

in

continue

to

business

of

the

Henry

«of the firm.

de-

our

very

A}:
Quantity of Help

vs.

nations

collective

a

abroad: if as much
emphasis was placed on the qual¬
ity of help offered as! ;on ;the0r
quantity,: As ft is' the twq words43
"foreign
aid"
have
become
so

and

of their

use

and 'resourcefulness.

resources

ecb^

noihic growth

elastic

that

they now embrace

a

There

jarc; in short, encouraging host of special objectives—milif
in
tne
non-com¬
sighs bF order in the non-com- *ary, political and commercal as f

.;,///.

munist

well

response

often

most

is

world—signs of a growing
to what is clearly the
difficult challenge which we
Over the long tun;
But "if

face
'

to build on these

we 'are

adopt to
is

ends.

serve our

that,:*a

good

is

deal

'heeded

That Tact

>

a

giveij^

the

to

is;,"

By failing to emphasize quality ^,
as much
as
quantity, the' really
important- idea behind
"foreign
aid'-Ms losing its appeal not jurt 'v
—
0
—
- —--m

.

■

And

in

-aid effective.

.

an
unfriendly going over by the
'«- Encouraging
Lending
the things that give us bull
markets, in
i.i.
coming at this time, with the unfavorable ;
rrom -tne pomt of view of a
operating earnings figures, it is not calculated to help.
w ^'-^3/v-deveiopm^tbanker, the most^eit"*
iicult ■ problem by far in giving
Insufficient rate boosts coulcl be adding to the unfavorable
avorabie;
effective help to these people is
atmosphere. /•;;//rv/;//J/
"""■ ■■■/

insurance stocks, and,

attempted

it

just what

ing out the difficult but inescap-'*
able, conditions lor-making that ;
T

than

overcome

poverty.

being

that

—so

clear

all

extent that V
trying to promote economic development with
"foreign aid" funds, money is all y
too often
loaned or given away ;
without first insisting on thrash</rf"

hopeful;

more

tor

at

not

instance.

beginnings there is onefact which
must always be* reflected in any
policies or arrangements we may

money

economic

as

the United States is

of

one

will

-

the threat of

case,

is not

help

Quality

our

challenge- applies

,

Crosby Company, 618 Washington
Avenue.
Officers are
Henry T.
Crosby, President, and Louis S.
13 u r f, secretary - treasurer.
Mr.
Crosby was formerly proprietor

in

growing realiza¬

this

that

commands

price''weak-upcoming investigation by a Sena¬
torial Committee will be a very
searching one. It may be wondered
whether this approaching investigation is not to be an effort to '
put insurance under Federal regulation. If the life business were'
included, it would make a juicy addition to the various Federal a
regulations already taken over.
;
/:/'V
any

nations

poorer

to

respect for these

a

Otherwise,

probably
dissipated in frustration, if not
actually turned to harm.

compelling

equallyy to all 'itee

Of course, one other adverse factor in the market
is the intimation that the

In

the

on

life.

be

in -the chapter of his¬
being written is how to

now

tion

were

Insurance stock prices have given ground lately, and; while
relatively poor earnings showing could have been discounted,
we suspect that a number of insurance stock
buyers jumped the *
gun and did their purchasing too early.
;

committee

T.

most

And'/th«re^4s- ^

black ink in statutory:,
not many, nor the amounts in black of much
The equity in the change in the premium reserves helped out in a few cases; but in some they increased the amounts/
of adjusted underwriting loss.
So it appears to this department
that we will have to be content to wait for a more
pronounced <

ness

the

stitutions will take root and grow.
•

consequence.

'

that

sire

midst fljfd^n escape from pov¬
I am sure there would be less
',
erty—an escape, not into tlie jaws, confusion and debate here andir
of bptnmtmism, but one in which abroad over the American
Gov^';fr
there' is : a chance that free' in¬ ernnlent's efforts to promote

coming

year.

insist
of

help

an

leading companies that shewed

improvement in the current

threat

must

challenge

1957, and, while they have so excelled, it has
much of a margin as we looked for. Of course, the'
were

the

facts

tory

1958 data to be

of

of

tion

the

joining Shearson, HamCo., in 1.956, Mr. Perlin

President

was

ciates,

as

underwriting

prices of 200 stocks, and

Before

by

looked hopefully to the final

because

communism, partly for other rea¬
sons, there is a growing realiza¬

over

increases

The

Pcrlin

eh owing

inill

Partly
;

through (where they got
worthwhile ones), and, too, new higher rates do not at the time
they are granted apply to business already on the bcoks;. they
affect only newly issued policies.
\
v/'.

cluding a Tele-

Floor

us

improvement

complete
brokerage fa¬

cilities,

^

•

New

and

Stocks

industry, the complete assembly, of the leading companies.are only
now
about ready for the public.

Hammill's
fifth

'$ t'/t;'

U. S. Gold Outflow Confronts

have indicated before that few if any corporation annual
reports appear as late as do those of the insurance companies. And
while right along a scattering few have appeared in the insurance

Shearson,

in

Insurance

—

'

b. Wallace

We

Perlin. This is

fice

Arthur

by

"'lv

,

here

at

home,

wh
When,

The

abroad

but

too.

£

far

from; reflecting,; the J
and economic;,:facts..'of'

financial

,

following earnings of a number of the important fire«vT' right^econonllc-and
financial poli- life; loans and grants are used, as
casualty insurance companies are an estimate of the leading sta-.
i
cieS.vPfow I could
abet and ?
hundred they have* been, to aid, a
tistical service, Alfred M. Best Co.
iUustrations of--what; -I mean by
perpetuate
p o li c i e s* in
other /
Adjusted
v
"the- right economic/hnd • finaii- countries.''which make: economic V
Invest.
Underwriting
Federal
Net
cial. policies"; they would range
Result
Income
Tax
growth virtually impossible, then &
Earnings
all the /.way from checks on inWe are asking for trouble. The reAetna Casualty
$4.16
$9.57
$0.16
$13.89
:• flationary
pressures to laws and
Aetna Fire
.suit,' as we have seen in more't
—4.13
6.16
0.38
2.41
x;, 4 regulatory practices .which allow than one country recently, is *a' ,
—2.92
Agricultural3.15
f
0.23
public utilities to pay their own • deterioration of the other nation's
American
—1.25
1.99
0.03
0.77
/ way and set aside out of revenues
Amer. Re Insurance-economy
and a reaction, some- '.

^ive|a.

.

..

,

,

Delago Sees. Opens

;

•

(Special to Tram Financial Chronicle)

CHICAGO, 111.—Delago Securi¬
ties Co., Inc. has been formed with
offices

105 West Adams

at

Street

_____

'

.

to engage in a securities business.
Officers
are
H.
L.
Sanderson,

President;

George

M.

Peterson,
Treasurer;
William H. Short, Secretary. Mr.
Peterson was formerly with Stifel,
JNficolaus & Co., Inc.
Vice-President

and

2.20

Airier.

Surety--.
& Shippers

Gen. Bond & Share
jBond

&

C

Share

1 o.—General

o

Co.

has

been

801

Cres¬

formed with offices at
cent Lane

to engage

in

ties business. Officers
P.

securi¬

a

William

are

Mills,

President; Rodney A.
Pandolfo, Vice - President; and
Clarence Pandolfo III, Secretarytreasurer.
Pandolfo

Mr. Mills and Clarence

were

formerly with Uni¬

versal Securities Inc.

3.91

0.01

—0.18

1.54

Boston Insurance

3.84

—0.22

2.62

—0.04
—1.57

5.07

3.72

—0.02

—0.06

1.70

—1.14

::'2.04

-—6.84
1.48

Fidelity & Deposit-Fidelity Phenix-____

:

2.20

Fireman's Fund_____

2.19

—1.16

—3.66

3.66

—0.76

4:15
5.13

,2.68

has

With offices at 111
York

been

Broadway, New

City, to engage in

ties business.

Partners

a

securi¬

—0.43

■V// 1.98

5.13

—0.61

—0.57

2.72

are

Floyd

—9.29

1.33

3.95
1.96

1.08

{

0.06

Chapman, Henry H. C.
Thomas J. Mahoney,
and'
JVIartin E. Ziegler, limited part¬
Mr.

ners.

With

Masten

Robert

was

Winthrop

formerly
&

4.23

S.

Lynch,

Pierce, Fenner & Smith.

2.45

0.41

-.4.90

—0.02

—8.53

6.30

—1.60

2.28

—1.93

4.54

—0.07

0.39

2.18

0.32

.2.98

.1.56

—0.72

2.33

—0.52
—0.04

Seaboard Surety

Security
Springfield—

—0.92

0.39

U. S. Fire

—0.07

1 1.87

—0.03

2.28

K/2.,

Dcpts.:

Nairobi;

13

Ins.

fit.; Travel Dept.:
come

Tax

Esakers

to

Dept.:
13

54

showing is
not good.

SZWDA, ZANZIBAR

Aden, iinya,

:

E3MA, PAKISTAN, CEYLON, BURMA,
KENYA,
TANOANYIKA, ZANZIBAR, UGANDA,
'
ADEN, SOMALILAND

a

PROTECTORATE

tCORTHERN AND SOUTHERN
RHODESIA.




With

dividends

0.49;,
0.52

T,

5.92

—0.30,:;

::

..

t/l:50i?f

Building,

Elkins, Morris

net

.

after

/

of

Exchange

policy---

leading exchanges,

other

that

announce

Lawrence L. Barroll is
ciated with their

now

asso¬

municipal

partment.

de¬

T.

P.

Fuller

formerly
and

with

Corp.

the. firm
Co.

with

L.

name

Mr.

Fuller

C.

Fisher

Securities

make

out- of

financial

would be

is

tragedy because there

a

no. more :
,

constructive

very

sound

policies

that

in

idea

4U-.<

.

»

,

eito-Ilr- po^Jy,

the face of such

Insistence

ideas

which

are

Reformation

a

Revolution

Industrial

an

the

world

experiencing both
and

■.

aid^to re
of

nations

those

in

non-communist

political manifesto

a

these

in

heavy odds.

on

Conditions

are
guilty of•
My ^ whole experiences in, the
that*^ line; • F We 'should
World Bank confirms me in rriy
to the yRussians to say

leave -it

there

is

hard

a

of rules which

and

fast

set'

belief that when . the objective
clear,

bommuruty/^A^te^^;^

poor society musta
follow if it is to escape poverty- Re created around the right poli-r
nrn,,nfl
today.- We should leave it to the cies. And it doesn't require what /
one
commentator, called, "a band3/
Russians to,
a

thp r,ffht no,i'

say/to the leaders of
these countries that they must be

of -saints .with

willing/to

nomlcf*.

ride

roughshod

*•

over

•
.

„r
tit_

ir

,

in

degrees,

,
i

^

,

YfJ: have loaned raoite

$4 billion for development -

than

of their pOople and impose wholly

projects, in 49 different countries
nrnippt<5 in
drfferent rountries
and territories. All of these loans

institutions

of
was

Co.

Management

on

should

in"

it

tolerate

forms.

as

But

we

hopeless

sort

and
our

have

position

policy

well

this
to

as

po¬

does

not

fall

that

goes

into

virtu¬

when

it

another,

or

-■

I

of

oie/

conditions

de- '■

conditions

carried

signed

great diversity in-

economic matters
that

name

have

■.

slogans
clear that

crystal

any

the

of.
of

i paraphernalia

avoid

make

litical

them with all

growth. /

values

the

DALLAS,

under

us

with the representatives of other
nations.
-Certainly,
those
who

ally

Fuller is
Road

makes

talking; about

/economic, and

economic

Tex. — Thomas P.
engaging in. a securities
New-business from offices at 856 Peavy

'the

and

often

the //repressive
totalitarianism

/

T. P. Fuller Opens "

Co., Land Title

members

Stock

or

lc^ea hehmd.foreign,

We

PHILADELPHIA, Pa.y— Elkins,

York

-

grants

or

poverty

new

offset

&

loans

the entrenched habits and customs

•

1.84

split-ups.
arc

v.;.

.

—2.97;.

—0.41

dividends, above data

3.39 rv•;

3.82

0.06

and

v. V-

a
company's investment income is not
adjusted underwriting results and taxes, the
poor one; and generally speaking, 1958
showings were
'/
;/.';*/
•
/
;

Stokes

assistance

of

political

mean

'

A SOMALILAND
PROTBCTOBA1

Branches in

,

2.54

Govt.
Parliament

James's Sq.; In¬
Depls.:
54 Parliament
St. &
13 St. James's Sq.
:

stock

v.

/

Sq.;

St.

the Government In

to

indonin^i

is

We submit that when

sufficient

James's

lor

policyholders receive
holder dividends.

STREET, S.W.I
SQUARE, S.W.I

St.

made

Where

London Branches:

13 ST. JAMES'S

'V,

•

5.47

BISHOPSGATE, LONDON, E.GJ

Trustee

Gty.„

-

::

0.68

'■

5.52

—2.30

NOTE—Adjuslmcnls

ecd-

,broad because the

„

tween what is economic and what

/ •^'crossing-

,

—2.21
,

1.48

—8.49

Head Office:

54 PARLIAMENT

__

St. Paul Fire—

Bank of India Ltd.
and Grindlays Bank Ltd.

sn(,

e

a

aid" became discredited

fcf^nd^ad ^^the_^
J

circum-

something in- between."- -;••/ •••:•',. • "V.
The admittedly /fine line be- •

Would

1.93

—0.23

Washington-

Amalgamating National

£3

2.34 ;

,3.81

Westchester

BANK LIMITED

•

—0.93

Reliance Insurance—

U. S. Fidel. &

NATIONAL AND GRINDLAYS

'
,0.51./.

—0.47

1.32

Phoenix Insurance

the

shy, about

: —2.33 /

0.10

2.77

Standard Acc.

ID. Fuller & Co. and Merrill

Co.,

—0_.91

7.90

;*

9.32

—0:52;:

•

—3.82

Insurance-

1.24 ZA

0.17'

0.04

Prov.

Abelson,

M.

;

—5.27 11

:

4.05

Pacific Insurance

Fng,

.

3.48

—0.07

8.07

—4:57
—1L.14

Hampshire—

John

goes

h

he

woum

..

North River
Northern

may

the'form

5:76

.

.

—0.73

IE. Masten, general partner, Hubert
C. Meyers, Nathanel O.

however they
adapted to the. peculiar

whether

3.69

1.24

New Amsterdam
New

poiicies,

9.39

—1.28

National Union.—_u

formed

is-,,

.""J*'. '-foreign

? ,on '• such'

.

.

—0.02

—0.94

"

& Co.

.; agree

^

weaknesses./:
great:tragedy if/

Thcse .are/serious

—0.07

8.31

National Fire

Masten & Co. Opens

mijst

against1 the; very
were supposed to

-M/M." >

v -

6.72

3.74

Ins. Co. of No. Amer.
_

b°rrower.

3.30

2.02

Maryland Casualty.
Mass. Bonding

assistance

violent,

help

—0.05

V.

^ 3.99

Hartford Fire
____

economic"

vto be effective,, both lender
:

—3.11

Home Insurance

expan-; times

development;as.I am. The point - '
financial

—5.34

_

for-

IS.that if

3.23,

—1.66

—0.71

—

American

are as

the 'itprerequisites

—0.76

—0.02

3.25

Hanover Insurance.

familiar*withvprQgrams which

But you

.

—0.33

General Re Ins
Glens Falls—

their

siom

-">■

—0/75

4.29

something'Towards

,/

■

5.16

c

2.35

Merchants Fire

Masten

^

—3.33

Continental Casualty
Continental Ins

Great

—0.80

1.65
"

Federal Insurance

LAKEWOOD,

I 2.51

—1.84

Bankers

much to protect our.
borrowers as ourselves. They hate

been

as

;■

accepted partly because our
know

borrowers

litical

axe

because

to

our

have

we

grind,

but

no

poi

mostjy

borrowers

ha^e

that the conditions a|e
necessary for the effective use #f
our money.
Every loan has posed
agreed

development. special problems of adapting •
society is to grow richer in knowledge and experience to Sa
this day and age, there are eco-" special environment, but all have;
nomic and financial facts of life
reflected,
I think, the facts o£
comes

If

^

to

a
„

^

which
ever

economic

must
the

^

be

.v,

.

economic

the

poverty in these times.
And let me emphasize

To

it

interest

in

our

which

respected what¬
and
political

social

frameworks
is

life

.

-extent

io help,

that
we

faced

if

a

society

is

must

to

we

be-

escap^q,
would

Volume

189

had

have

to

these

ask

The Commercial

Number 5848

do

these

things—to

conditions—even

if

San Francisco

we

had been giving the money away
rather than lending it. * The dif¬
ference

between

and

ance

assist¬

effective

difference

between

insistence

and

loan

a

and economic policies and no

insistence.

-

-

a

such

•

,

,

serve

Elected
ernors'

to

for

the
thei

on

the

Board

ensuing

Board

of

1959-1960

Gov¬
fiscal

year:" were: *' W.
Edward
Bell,
FRANCISCO, Cal.—Rob-" Crocker Anglo
National
Bank;
Perry, partner of the in¬ JaekVH.
Canvin,- First California
vestment counsel firm pf Bergues,^,
Co.; William P. Held, J. C. Strauss
Wentworth
&
Co., was elected &
Co.; Gustav Knecht, Jr., Dean
President of the Security Analysts
Witter & Co.; and E. G. Roodof San Francisco lor., the; fiscal.',
house';'American Trust Co.*
H.

beginning July 1." He will
succeed William M. Bennett, Hi.llsr
borough ' investment
consultant,.
year

I have tried

to suggest

in these

few remarks that all is not chaos
in

world—that there is hope¬

our

ful

constructive

and

done

on

by

way

of increasing the

margin of order. Of
can guarantee
that

course, no one

if we follow
I have suggested, we

the courses

will actually succeed in fostering
both economic growth and
in

nations

Jwhich free institutions
connection

will

between

is

impossible" to argue
is assured.

with

the Frank

offices in

CAMDEN, N. J.—Bache &

on

the

_

Building to engage in
business.

Hotel

Queens Boulevard to engage- in a
securities business:
Officers are

Vice-President

Bank

el

was

Treasurer.

e c

The

t

e

new

d.

Secretary-

officers

were

chosen at the. annual membership

meeting in the Mills Tower As¬
sembly Hall last week. The offi¬

Melvin

Schwartzberg,

President;
Execu¬
tive Vice-President and Secretary,

Norbert A. Hochschartner,

and Jerome L.

Lubine,- Vice-Pres¬

ident and Treasurer.

Louis Schick

Vice-President

F. "Rentz,

and Treasurer.

under

All were

'NEW
Louis

formerly

Schick

Schick

Luna, Matthews & Waites.

Opens
N.J.—

BRUNSWICK,

&

has

formed

with

Co.

offices

Louia
at

,

Gildar Co. Formed

curities business.

,",.

,

WASHINGTON, D. C. —Gildar
&

to engage

Officers
President

in

are

a

Street, N.W.

FT.

securities business.

Richard

and.

A.

Fla.—

LAUDERDALE,

Eduard R.

Pripps is engaging in a

securities business from offices at

Gildar,

Treasurer;

E. R. Pripps Opens

;

Company, Inc. has been formed

with offices at 1424 K

Sam

Gildar, Secretary.

Southeast

1649

the firm

12th

Court

undesr

of E. R. Pripps

name

it

so

that

suc¬

;;

*

But the existence outside of the

communist empire of the world's
richest nations, which
are
also
the world's freest

iting

nations, exhib¬

variety of political
economic institutions,

great

a

forms

and

should be fact enough to give all

#

•

but the very timid among us rea¬
son
to have courage in our con¬
victions.

We

the

World's

view of
strength,
scoff at those pessismists, among
Free

whom

.

"4

there's

great

communists

the

bered, who

-

in

should,

num-

are

to

more

Cities Service

that today no poor

say

soeietxi^can^t get:rich /which dpes
the

of

status

cratic anthill.
If

than meets the

its, members to

riot first reduce

:■j ants in a bureau¬
.

want, we can bring to
powerful and persua¬
sive influence on the historic tide
;

we

bear
of

a

.

Viewed

very

change which is sweeping the

more

Just as we gave rise
to that tide through spreading our
ideas and material achievements

or

of the world, so
hope to turn that tide to

political and economic
consistent with our con¬
cepts of the dignity of man.
We can, that is, if we become
as hard-headed as we are already
•

We will never be
quantity of our

but

for the

manner

we

earn

can

In

-»wi -i?

«'<1/-- Vrf

in which we em¬

Company,
with
to

engage

Mittleberg,
urer;

sees

in

Bush

Walter

are

and

company

operations

people, for

stations this

however,

and

already invested

a

no

one

even

:•»:

;

:<•

Thus, just in the last two years, Cities
Service spent over

previously
& Co.

$350 million building

for the future.

in this

way

can

America bo

given what she must have for progress

Opens Philadelphia Branch

--more

./PHILADELPHIA,

jobs,

more

and better petroleum,

products.

Pa. — Green,
Ellis & Anderson, members of the
New- York- and American
Stock

Exchanges, announced the open¬
ing' of an office at 1612 M[arket
Street, Philadelphia, Pa.
William
Gur| McCulloch is resident man¬
ager of the new branch, and Rich¬

1

Kinsey, associate
Headquarters of the in¬
are located in New

ard. Saltonstall

vestment firm

and other branches are
Hazleton,, State

in Wilkes-Barre,

College and Bloomsburg, Pa.
Through the low-cost, hydror
electricpowercrGatedby Niag¬
ara's thundering /waters; ha§

Form Tri-States Investment

^ISMARCK; N.

Dak.—Tri-State

InvestmentCompany
formed

with

offices

Federal Savings and

ing
f

has

.

been

tary-Treasurer,

B£rgo,

-

Bergo,

and

\

also

Niag^

closely
guarded secret—its age. Geologists would like to know, but
Lady Niagara isn't talking.
keeps*

a

Secre¬

Milton L.

Vice-President.^ All

were

formerly with State Securities Co."




.

of-the world^Iead-

ing industrial, regions'.
ara

Loan Build¬

to engage in a securities busiGordon W. Trusty is Presi¬

Kenneth L.

grown one

in the First

ness.

dent;

greater

require further investment,

*>

formerly

Only

.

eves

pipelines*

billion dollars,

tomorrow's

for

needs will

Green, Ellis, Anderson

York City,

ent»

ever see

work, probing fouT

its thousands of miles of

Caring

Marache, Dofflemyre

manager.

are

exam~

These, however, are only part of the

has

C.

Treas-^

witb California Fund Management
with

oil

modern facilities in which Cities Service

Sainsbury, Vice-Presi¬

dent. Mr. Mittleberg was

Co.: Mr. Sainsbury was

also

,

securities

a

President

•

been

321

at

F. E. Moore, Secretary,

Charles F.

sense,

continents for oil... and

h^s

Inc.

offices

Officers

business.

a

blem identifies. Few,

FRANCISCO, Calif.—Mit¬

formed

waters

that has given birth to one of the

its drilling rigs at

tleberg

a camera.

thundering

pie, quickly recognize the Cities Service

Mittleberg Co.. Formed

Street

skill with

emblem and the 19,000

respect

ploy them.

SAN

test your

Niagara Falls Is

scenic place to honeymoon

like that. Millions of

the

riches,

a

greatest industrial areas in the world.

'

for

than

power

progress

big-hearted.

than 2,000,000 visitors

provide the low-cost;, hydro-electrie

promote

loved:

more

Niagara's

into every corner
can

by

each year,; awesome

globe today.

we

45

Paterson Street to engage in a se*»

Y.—Stand¬
Corporation - has

and

elected

George A. Hopiak of Wells-Fargo

Whitman

management of Peter R. Newman*

Hubert M.

Secretary; and

been formed with offices at 113-27

was

tha

Walt

securities

a

Ernest

FOREST HILLS, N.

Joseph Edel&tein, of York & Co.

thee

Luna, President; Everett R. Luna,

with

ard M Planning

are

Vice-President and

/Form Standard Planning
-

Officers

Cow

has opened a branch office in

Nelson

eco¬

nomic jgrowth" and freedom
cess

New Bache Office

Form Basic Securities
BIRMINGHAM, Ala.—Basic Se¬
curities, v Inc. has
been
formed

There is no

take root and grow.
certain

serve

Board of Governors.

work'being

offers ' something - to

which

build

who will continue to

.

23

year.

SAN

financial

sound

on

also will

of Governors for the

-

ert

grant;- it is the difference between
an

(2319)

cers

Analysts

Elect New Officers

"giveaway" is not the

a

and Financial Chronicle

:W|:

FREEDOM

:^:vwk.NGforprr^

Cow

24

The Commercial and Financial Chronicle

(2320)

Continued

jrom

f

Thursday, May 21, 1959

.

inflationary

financing of

government

5

page

.

deficit.

The

large

a

French

budgetary deficit in 1956 and 1957,

Securities Salesman's Corner
By JOHN DUTTON

The Cumulative Effect of Good
There

investment firms that

are

insist that the direct benefits they

feeling

Advertising

of

such

followed

sale.

a

Can

you

imagine how much enthusiasm
and loyalty such a man would
periodicals and newspapers are
not readily discernible. If the ad¬ generate if one of his firm's part¬
vertising copy and layout is ef¬ ners or his salesmanager called
fective and the program is con¬ him in and congratulated him on
sistent, proper record keeping will this nice piece of work. The sale
often disclose that leads are con¬ doesn't always have to be the big
verted into customers months and one nor is it always the large ac¬
their advertising in

receive from

the original

sometimes years after

inquiry has been received. It is
unrealistic to expect that a few
will

advertisements
orders

after

few days

a

produce

ad has

an

appeared in a daily or weekly
publication. Things just don't hap¬

count that deserves the honorable

mention—it is the

and

business

his

of every

You

customers.

do

There

Offer

Should

an

two

are

that

retail

types

securities

are

result of

a

effective in

adver¬

of

the

in

business.

a

a simple newspaper
All that advertising can

for

any salesman
OPPORTUNITY

is give him
meet

to

CUSTOMER

POSSIBLE

Name

advertising is always helpful. Ads
that build confidence and prestige
are

about

A

on

a

FAVORABLE BASIS. If Mr. Jones

beneficial

tising

came

community pro¬

viding they are used over a pro¬
longed. period. They have their
place in an advertising campaign.
Today, however, people are in¬
terested in information and ideas.

writes to you and asks you for a

report

on a

mail it
the

certain stock

to him.

You

you

can

pick

can

up

telephone and thank him for

his

inquiry and ask him if he
it.

ceived

You

can

there and that is what

a

re¬

it from

take

salesman

is PAID TO DO.
open

the

have

to

Advertising can
door for you but you
in

walk

yourself

and

introduce

and

service

your

and

They will respond to suggestions securities.
that are specific and that offer
them an opportunity to increase
their capital and income. Ads with
coupons1 attached
that make it
convenient

spond,
call

reader

ads that suggest

or

visit and offer

or a

ment

the

for

are a

an

to

a

dress

New York at

advertisement is pre¬

an

held

be

to

foe noted

the record.

on

quiries. Those names which are
definitely not prospects should be
reported and checked off the orig¬
inal list You can expect a certain
number of curiosity seekers, stu¬
dents of finance and economics,
and

salesmen

for

other

firms

to

respond to advertising offering a
report on a specific company or
a

market

letter.

Sometimes after

period of several weeks, months
as we have said,
even years,
have transpired, a good salesman

a

or

will

open

a

May

21,

at

productive

account

that will many times pay for the
•expense of a

single ad, or even
limited advertising campaign.

a

There

people

ferrals,
all

are

on

many

favorable basis.

a

club

affiliations,

contribute

to

a

salesman's clientele.

Elects Two Tax Comm.
The

New

Commerce

who

can

is handed

take
as

a

ten

has

of

paper ad, and can follow
or three of these names

diWtopB

a

Bound

man

he

news¬

even

two

ing Helps the salesman a ger to give
«9l

Tax¬

Cravath, Swaine and Moore;
C.
Watson, Vice-Presi¬
dent of Chesebrough-Pond's
Inc.;
and Christopher J. Devine, part¬
William

of C. J. Devine & Co.

ner

Benjamin J. Buttenwieser, lim¬
ited partner of Kuhn, Loeb and
Company and former Chairman of
the
City-State Fiscal
Relations
was

re-elected
as

to

a

Commit¬

With Fin. Securities
(Special to The Financial Chronicle)

DENVER, Colo. —Ralph W.
Newton, Jr. has become associated
with Financial Securities
Corp.,
Farmers Union Building. He was

pany.

the back if he finally

comes

again I have seeivgood salesmen
do this and they have
enjoyed the




In the past he

ficer of

■

s'

man a well deserved pat

up with an order months after
he has received a lead. Time and

4%

over

The
ham¬

year.

a

authorities were
pered by a weakening of fiscal
policy and by difficulties in the
field of government debt manage¬
ment as credit conditions tight¬
ened. A major foreign exchange
monetary

authorities

the

forced

in

in

British

the

1955,
resorted

to

monetary

to

keep the private in¬
under
control,
raising Bank rate in January and
again in February. However, a
boom

vestment

relaxation

fiscal

of

the budget for 1955-56 was intro¬
duced and taxes were reduced. As

result, the Treasury's overall
(for current and capital
expenditure)
was
increased
to
£300
million.
Also,
additional
tax rebates to encourage private
investment were introduced, even
though the full impact of similar
a

deficit

incentives introduced in 1954 had

„

was

an

of¬

Hicks, Newton & Co., Inc.

(Special to The Financial Chronicle)

Smith

is

POINT, N. C.—Lemuel
now

connected

Building.

growing

momentum
of
business expansion was marked
by a record expansion in bank
loans for

six

the first

months

1955. To check this credit

of

creation,

the Chancellor imposed a quanti¬
tative ceiling on bank lending in

July 1955 in which he called for
a

"positive and significant reduc¬

tion"

in

banks

loans.

did

reduction

As

a
result, the
about a 10%
their loans by the

bring
in

end of 1955.

The

with

J.

from 5 to

led

reserves

7%, to limit bank loans
invest¬
measures were taken,

faced

debt

-

They

were

soon

found

major

with

public

difficulties.
unable to sell Govern¬

management

ment bonds to raise funds for the

capital spending of the national¬
ized industries

and

local authori¬

vestors exercised their cash option
to
obtain
funds
for
private

investment purposes.

These diffi¬
culties, together with the growing
inflationary
pressures,
led
the
Chancellor to introduce

ordinary
1955

in

fall
which

budget
he

an

in

extra¬

October

increased pur¬

abroad. In
investment

purchases from

addition, Britain's own
boom began to taper

were

by
and

a

Treasury.

The

Britain's

of

results

emer¬

have

been
to
enable Britain to take advantage

gency

measures

followed

in

further

rise

measures

February
in

Bank

1956
rate

by the introduction of higher

of

central

economy in each of the
two years proved to be excessive.

/ In the spring of 1957 the French *
authorities began to take some of
the

steps necessary to curb the
expansion of the money supply.
The

discount

rate

raised

was

four and later to 5%. The

rates

for

above

tral

each

certain

bank

bahk^s

discounts

ceilings at the
raised

were

to

penalty

to

cen¬

seven

10%, and in the latter part of
1957 the ceilings themselves were
lowered by 35%.
Certain more

and

imports
including
the
quotas

These
did

to

measures

were

reduce

the

also adopted,

reimposition
oi
virtually all imports

on

measures

slowed

down

bul

not

stop the expansion of
credit, or the loss of foreign ex-^
change, which in the fall of 1957;
accelerated

was

by

against the franc.
1957

France

was

speculation

At the end of

again

forced

to

seek loans to bolster her

depleted
foreign exchange. In
connection with the $655 million
aid package that France received
of

the International Monetary
Fund, the European Payments
Kingdom has been able to check, Union, and the United States/the
of lower

from

import costs. The United

least temporarily, the postwar French Government undertook to
inflationary rise in prices and to carry out a stabilization program
strengthen its balance of pay¬ involving principally a reduction
ments, so that it could introduce in the budgetary deficit and fur¬
convertibility
to
foreign - held ther tightening of credit controls.
at

France's

sterling in December 1958. It has
also

able

been

restraints

credit

bank

on

internal

relax

to

and

on

installment purchases and to turn
fiscal

and

balance

interna¬

of

tional trade and payments im¬
proved during the second half of
1958, owing in part to the meas¬
ures previously put into
effect, in
part to the confidence engendered

policies to
expansion.
loans was by the de Gaulle regime, and in
economic
abandoned last July, all install¬ part to slackening -of
ment
credit
controls withdrawn activity that began in the spring
or early
summer.
French prices,
two months later, and taxes were
substantially reduced in the budg¬ however, were judged to be too
et for 1959-60 introduced in April. high to compete on world markets
at the rate of exchange then in
effect.
Developments in France
Consequently, at the end
of
December, 1958, the French
In
December
1955, a decline
franc was again devalued — this
began in France's official reserves
time by 15%.
of gold and foreign exchange that
the

task

The

for

lasted
and

monetary

of

economic

ceiling

on

two

amounted

bank

and

to

half

a

the

years,

equivalent

of

nearly $1.5 billion. This situa¬
was caused by over-expansion
in
economic
activity
and
the
consequent excess of inflationary
tion

pressure.

The

French economy expanded
rapid pace in 1954-1955, with¬
signs of developing inflation¬
ary pressures, because unused re¬
sources were being absorbed into
the
productive
process.
After
1955, expansion could not con¬
at

a

out

tinue

at

the

without

rate

same

causing prices or imports to
The latter tended to happen
In

1956, strong demand
market
of

business

a

comparatively
to export, and

centive

imports,

trade deficit of

lion

dollars.

more

rise.
first.
the in¬

on

absorbed

volume

record

little in¬
caused a

than

tailed

measures

of gold and dollars.
At
point—A u g u s t, 1957—the

reserves

so

until the

carried

out

spring of 1958.

The main

France

causes

in

were

1956

of

the classic

1957

ones.

in
The

French economy was caught up in
world-wide upswing in demand,

a

which

was

a

basis

but it

on

without

a

economic

serious

problems.

Foreign exchange re¬
still
comparatively
low, and there is little slack in
the economy. The fighting in Al¬
geria continues to be a drain on
the
budget.
The
new
French
Government, however, appears to
serves

have

a

are

better

chance of

success¬

fully coping with these problems
than
any
of its recent prede¬
cessors, mainly because it is evi¬

dencing determination not to let
again undermine its cur¬
/

inflation
rency.

Developments in Japan
Japan has had
inflation

in

the

^

long history of
postwar period,

a

Japan

has undergone two infla¬
tionary booms, both of which have

been

remarkably similar in their

nature and in their consequences.
The

booms

have

been

character¬

ized

by easy money policies that
permitted demand to expand more
rapidly than the available sup¬
plies. Output rose, but as demand
rose
even
faster, prices
were
pushed up. In both cases the in¬
flationary pressure very quickly
produced trouble in tbse Japaneie
balance of payments.
• T

Japan is highly dependent upon
The total value of

foreign trade.

inflationapr

and

not

period,
the
de¬

the same period, however,
France lost over half of its official

Government

sounder

number of years,

economy

than for

is

now faces the
prospect
upswing in activity with

but I will confine myself to a dis¬

ing

this

its

new

cussion of post-Korea experience.
Since the end of the Korean War

designed to keep the cost-of-liv¬
ing index from rising. From the
end of 1955 through July, 1957,
the French official cost-of-living
index rose by less than 2%. Dur¬

French

a

bil¬

one

During this

administrative

France

of

French

gave

prices were kept down by
flood of imports, and also by

pressures

fiscal

total

private

reserves

off in late 1957.

(i.e., sales) taxes on con¬ a de jacto devaluation of the
sumer
durables, reduced certain franc by 17%. Nevertheless, prices
capital expenditures and forced rose sharply, and continued to do

restrictive

combined

bank advances to the government
and of net new bank credit to the

direct

chase

The

the

flow of

Britain

ex¬

by 22 and 15% re^
Although to some ex¬
tent the budget deficit
was
fi¬
nanced by drawing on the savings
of the public (especially in 1956);

and to restrict government

materials

of

years

ment. These

ternal

government

Itself

from the

F.

Sturgis May & Co., Security Na¬
tional Bank

The

local governments to borrow from
the
capital market rather than

With J. Sturgis
May

HIGH

yet been fully felt in the
growth in private investment.

ties; they were also faced with
heavy attrition on maturing bonds
as
private and institutional in¬

formerly with Western States
until he
Management Corp., Columbia Se¬
business rela¬ curities Co., and Honnold & Com¬

tionship, te the man that every
sales department can
always use
■a*4 appreciate. Good record keep¬

QjUch a

the

announced
on

of

of

ner

Re¬

that
a

Chamber

ation of Rosvvell Magill, President
of the Tax Foundation and part¬

productive

leads

result

York

election to its Committee

friends

But the

averaged

restraint occurred in March when

NY Commerce Chamber

to meet

ways

virtually continuous round

price and wage increases which

substantial

p.m.

Lawyers

second one-year term
tee Chairman.

Follow Leads

of

to

pressures

not

Committee,
Encourage Your Salesmen to

and the

unable

were

demand

excess

luncheon meeting

the

Salesmen

should be asked to report the re¬
sults of all follow-up calls on in¬

check

instalment

and

12:15

a

at

today,
Club,
ing Interested inquiries every lead 115
Broadway.
Governor Hol¬
should be recorded. The date re¬
lings' address, which is entitled
ceived, the name and address of "No
Magnolias," will cover South
the inquirer, and the salesman to
Carolina's growing industrial de¬
whom it has been assigned should
velopment and discuss the State's
foe placed in a special advertising
place in the "New South." The
record book; When a new account
forum is composed of those inter¬
opened by a salesman that origi¬ ested in various facets of munici¬
nated from advertising this should
pal finance.
pared with the objective of creat¬

restraints

credit

measures

Hollings, Gov¬

F.

of South Carolina, will ad¬
The Municipal
Forum of

ernor

Keep Accurate Records
When

Ernest

Hon.

fiscal,

monetary,

authorities

Municipal Forum

gold

1951, Britain has relied
however, at a time when world
on monetary policy to achieve an
economic developments helped to
important
part of the
desiredcheck inflationary tendencies. The
restraint in internal economic ac¬
U.
S.
recession helped to calm
tivity, and to correct the balancedown inflationary psychology in
ol'-payments
consequences
of
Europe and there was a substan¬
over-full
employment at home.
tial fall in the prices of the raw
From
1955
to
1957,
however,

Early

direct assist to the sales

organization.

in

government spending.

phone

induce¬

abandoned

was

September 1957 to raise Bank rate
from
5
to
7%
and
to
reduce

Address New York

re¬

short-term

November

crisis

Governor of S. G. to

rates

of

the authorities to raise Bank rate

Kingdom
Since the pegging pf
interest

loss

severe

Developments in the United

most productive ac¬

counts that I ever had
as

backbone

the

Never Know

One of the

AN

Inducement

that is

from foreign .fiscal, measures further in his
exchange inflow. As interest rates budget for 1956-57 introduced in
fell, there was a widespread re¬ April. Government spending was
vival in the capital market, and brought under more control and
construction activity boomed dur¬ the
special
private
investment
ing the year, giving major support incentives were withdrawn.
to
the
During 1956 and 1957, business
economy.
However, the
budget
deficit was
eliminated; activity continued at peak levels
between April 1958 and February in the face of high money rates
1959 (the latest date available at and the restrictive fiscal measures.
time this paper is being written), During the two years, prices rose
government
revenues
and
ex¬ by 4% a year and wages by 5%.
in
September
1957
a
penditures were in virtual balance. Finally
resulting

liquidity

sales organization.

clipping.

.

con¬

works

ligently

that way. Newspapers and
magazines do not sell securities.
It requires that there is a proper
follow through by
salesmen in
order to turn i n q u i r i e s into

Ads

who

every lead intel¬
consistently builds

tinually

pen

Most

man

those

a

toward

20%

spectively.

rate,
and
they down payment conditions for in¬
largely passive position stalment credit purchases. In addi¬
the
continued
rise
in tion,
the
Chancellor
tightened

adopted

about

to

penditures, and bank credit to the
private
economy
expanded 1 in

discount

the

that

accomplishment

amounted

Economic Growth, Inflation
And Stabilizing

reinforced at home by

exports and import* is equal to
nearly one-fourth of its national
product. The development of
eign-exchange
difficulties
the prime factor in spurring
Japanese authorities to take

for¬
was

the
ac-

Volume

189

Number 5848

.

.

.

The Commercial and Financial Chronicle

tion

to suppress the inflation in
both 1953 and 1957. It might also

trial

be said that the

above the low of

activity in February, 1959,
adjusted,
was
18%
May, 1957. The

Japanese public, of the relations
ship ? between domestic financial
stability and external balance ^a*

outlook

for

continued

John C.

important balance-of-payments in
good condition, her reserves at

importance in win¬
ning public support of the ratner
strong medicine that the author¬

Our

Elected Directors

prosperity

and growth is excellent and Japan
faces the future with her vitally

been of great

a

Popovic & Weedon

seasonally

of the

awareness

levels, with

highly
plant and
a

Popovic

Col.

and

Weedon

Sidney

Directors

as

It became evident that the

year.

prices

of many

commodities

Japanese

were

less

J

:

in the future.

The government market has been

countries

viewed
nancial

export

competi¬

where

yields for

re¬

and

were

Japanese

view them at this time.
learn

producers

and

to

and

widespread

of

the

and

we

the

from

ments abroad so far reviewed?
The

became
government

yen

the

were

that

German

policy
of
stabilizing
instituted various special exportpromotion devices to encourage monetary and fiscal policies and
greater interest in selling abroad" at the same time experience rapid
and earning the foreign exchange economic growth. Needless to say,
these policies in themselves were
necessary to pay for the rapidly
not the main causes of the coun¬
rising volume of imports.
Antiinflationary measures were intro¬ try's growth. The German econ¬
duced in October, 1953, with the omy was stimulated by the need
initial emphasis on tighter credit, to rebuild its war-shattered cities
followed by fiscal retrenchment in and enterprises, by the inflow of
the spring of 1954.
The author¬ highly skilled refugees from the
ities stated that their aim was to East, by the world-wide boom in
bring about a 10% reduction in capital goods, which was of par¬

They fell

a

little short of

this goal in terms of the overall
wholesale price index, but very
substantial

lar

were

achieved in many lines, and inter¬
est in
export business was re¬

markably stimulated. At the time
Japanese prices were being re¬

benefit

of

area

reductions

a

ticular

the

Ruhr.

other countries

stimuli,
able

were

vantage

Nevertheless,
experienced simi¬

and

them.

that the

doubt

same

ad¬

With, all pos¬
it is impossible

sible reservations
to

the

take

to

of

all of them

not

of stabiliz¬

use

duced, prices in several compet¬ ing monetary and fiscal policies
ing countries were creeping up¬ has made a significant contribu¬
tion to the enviable record of the
ward, and Japan found itself in a
German economy of the last 10
very strong competitive position
in export markets.
In 1954, ex¬ years.
The examples
of France and
ports rose rapidly
and imports
rapid growth
fell. The following year saw con¬ Japan show that
tinued internal financial stability, combined with inflationary pres¬

respectable

rate of in¬
crease in industrial activity, and
another huge increase in exports.
Japan's gold and foreign exchange
holdings rose to record levels.
a

very

The next

inflationary boom be¬
1956, with a very rapid
acceleration in output and with
demand again running ahead of
supply to bring a price increase

sure

results in such serious

soon

difficulties

balance-of-payments
rather

that

anti-inflation¬

harsh

Recent

Sidney L. Weedon

Popovic

become necessary.
The
examples
of
these two
countries and of the United King¬

in

for

balance-of-payments

Corrective action

was

trouble.

stockholders. Mr.
investment adviser

nual meeting of

Popovic is

an

President

is

and

Director of

and

Blue

Ridge Mutual Fund, Inc.,
Blue Ridge Associates, Inc., and
Blue Ridge Managers, Inc.
Col.
Weedon has been Vice-President
and director of The Crosby

Vice-President

and

Corp.

Fidelity
Management & Research Co., Inc.,
from

1953

He

1958.

to

of

was

for¬

merly Vice-President in charge of
sales of Hugh W. Long & Co., Inc.

delayed, for

several

months, and by the time
it was finally taken in the spring
of 1957, Japan had reduced her
gold and foreign exchange re¬
serves
by nearly 30% from the
total at the end of

1956.

Again a combination of mone¬
tary and fiscal measures was em¬
ployed, with emphasis on higher
interest rates and other

measures

to

tighten credit. The authorities
more
sought to achieve a
price reduction of about
10%,
and a 9% reduction in wholesale
once

actually achieved. This
time the Japanese anti-inflation¬
ary
efforts coincided with the

prices

recession

elsewhere

in

the world.

Although exports were
a high level, over¬
demand was not sufficiently

maintained at
seas

the

the

of

end

have

Nevertheless,
doubt that

no

would

not

eliminated

automatically

the

out
I

The

ket

Foreign Exchange Commit¬
Mar¬

announces

that

Frank

the

at

President of the
Company, and John
M. Young, a partner of Morgan
Stanley & Co., have been ap¬
com¬
pointed members of the
mittee.
The
Committee, which
was created in 1939, was designed
Vice

Sheard,

establish

to

tween the

closer

contact be¬

foreign exchange mar¬

ket and the Federal Reserve Bank

of New York.

Outing

beginning that I




Indus¬

that there

States

direct

by

economy

refer¬

LOS ANGELES, Calif.—Oliver
and
C. Horsfall is now connected with
every country has to choose
its
Lester, Ryons & Co., 623 South
own economic and political goals
Hope Street, members of the New
and methods. Also, in no country
Circumstances

have

we

vary,

clean

take

not

as

be.

We

sheet. of

write

to

paper

to

"a

upon." We have
situation as is, and

the

would

we

like

to

have

it

York and Pacific Coast Stock Ex¬

changes.

must deal with fact,

able

States

to

do

can

combine

the

financial

same.

And

if

(Special to The Financial Chronicle)

that

the

the same.

United

States

It should

can

therefore

difficult to

apply the

lesson learned from the

experience

not

of

be

too

other

countries.

and

be

any

on

June 30th.

new money

raising in

the

capital market was trying to
and refunding venture of
the Treasury, and some progress was being made since the short¬
est obligations and selected intermediate-term issues vvere begin¬
ning to give evidence of an improving tone. Then all of a sudden
last Thursday the prime bank rate was raised from 4% to 4V2%
by the large New York City banks. An increase in the prime
bank rate appeared to have been in the cards, but it was expected
in most quarters of the money market that the discount rate
raised

be

upped.
The

been

before

Also, this

which it

from

the

money

loan

rate

move was a

the

of

commercial-banks

surprise because/of the source
%
,

demand

loan

new

came.

outside

the

major

financial

centers

has

large of late, especially for consumers and mortgage
borrowings. Accordingly, it was expected that the first rise in
the prime bank rate would come from a bank outside of New
York City or Chicago. It is evident from this move by the New
York City banks that the large money center institutions have
been experiencing a pick-up in the loan demand and they expect
the needs of business for funds to improve substantially in the
very

weeks

ahead.

«

•

Entire Rate Structure to Rise
•

.4

-

■

This upping of the prime bank rate from 4% to.4%% means
that the whole structure of bank loaning rates will be advanced,
and the

deposit banks will be in active competition for the funds
be lent to customers. With Government, corporate and
tax free yields advancing, and some of them now at levels which
are attracting money from the banks,
these institutions were to
some extent
forced to advance rates in order to prevent bank
borrowings from going into the capital market. In contrast to
1955, when the banks sold Governments to get funds that took
care of the increased volume of business borrowings, today these
institutions find themselves limited in their ability to liquidate
Treasury obligations. Not only do they have smaller holdings of
these securities, but the price declines have been so steep, as to
make the sale of these obligations almost prohibitive.
can

South
of

Spring

the

Street,

Pacific

Co^ist

Stock Exchange.

(Special to The Financial Chronicle)

CHICAGO, 111.—Peter R. Sawof

has

been

added

Chesley & Co.,

Salle

Street.

Mr.

to

the

staff

105 South La
Sawers

was

formerly with Dominick & Dominick;

CINCINNATI,
&

Company,

York

L.

June

Harrison

New

Stock

will

1

Harrison

Bank

the

of

Cincinnati

on

—

Third

Fifth

members

and

changes,

Ohio

III

to

Ex¬

admit
part¬

nership in the firm.

R. H. Hinsen With
B. C.

Christopher Co.

(Special to The Financial Chronicle)

Chesley Adds to Staff*

ers

Harrison & Company
To Admit Partner

Calif.—Willis

ANGELES,
Durst, Jr., has

become con¬
nected with Wagenseller & Durst,

Kingdom, France, and
Japan have been able to stem
inflationary pressures by adequate
monetary
and
fiscal
policies,
there is at least a strong presump¬
do

market

money

evaluate the results of the

Charles

LOS

H.

the United

tion

not

Element of Surprise in Prime Bank Rate Rise
The

Building,

With Wagenseller & Durst

not
theory. However, if Germany has
been

"will

the current fiscal year which ends

With Lester, Ryons

stability
with, rapid
economic
growth,, there is at least a strong Inc.,
626
presumption
that
the
United members

mild recession of 1957-58.

indicated

has

that

(Special to The Financial Chronicle)

bottom of the Japanese recession.

balance-of-payments crisis
was overcome in 1958 and Japan
again began to accumulate re¬
serves at a rapid rate and at the
same time to increase" production.
Today Japan is well out of the

%

Chicago Traders to
Hold Summer Outing

do

The

were

ears

would

Columbus Slock & Bond

high to enable Japan to fully util¬
ize either the greatly expanded
plant or inventories that had been
built up during the boom. Indus¬
trial activity, seasonally adjusted,
declined 7.5% from May, 1957, to
May, 1958, which proved to be the
Again the price and cost adjust¬
ments achieved during this period
Were important in enabling Japan
to increase exports, though only
slightly, in the face of declining
World demand.

it appears to be the belief of the greater part

of the financial
heavy cash pay-out by the Treasury means that
"pinned back" in no uncertain way. In spite
of the large attrition in this refunding operation, the Treasury

was

of the Club.

$2,200,000,000 refunding in.

officials said that the cash pay-out in the VA>%
refunding was in line with expectations. However,
money market specialists were not of the same opinion, be¬

-

a

taken in the

was

Treasury

Bankers Trust

did not want to discuss the United

ence.

%

P.

recession.

recent

said

•

certificate

unfavorable.

boom

7

l

district that this

inflationary pressures if correct
CHICAGO, 111. —The Summer
policies had not been followed: Outing of the Chicago Traders As¬
Quite $ few countries have been sociation will be held June 27 at
suffering from inflation through¬ the Woodridge Country Club.

was

industrial

cash-in which

32%

their

inflationary processes in the cordially invited. Reservations
United
Kingdom,
France,
and may be made with Donald W.
Merrill Lynch, Pierce,
Japan were brought under control Bourne,
Fenner & Smith, Inc., Secretary
at a time when the end of the

inflationary action.
there can again be

'

Financing Marked by Heavy Attrition

The

investment boom in¬
creased the effectiveness of anti-

future.

May, 1955.

cause

tee of the New York Money

Club

world-wide

increase in the long-term

an

near

Treasury has completed the May refunding and new
raising operation, but in so doing not only had to pay the
going competitive rate for funds but alsb had a sizable attrition
in the refunding of the $1,817,000,000 of 114% certificates. Owners
of $559,000,000 of the May 15th certificates decided to take cash
instead of the one-year 4% obligation at $99.95 to yield 4.05%
which was offered to them by the Treasury. The cash pay-out
in the refunding operation was 31%, an unusually large part of
the total involved, although in dollars the amount was not sig¬
nificant as far as the Treasury was concerned. The attrition of
31% on the $1,817,000,000 exchange offer was second only to the

dom

are

as

-

money

most

Foreign Exch. Comm.
Appoints 2 Members

ary measures

circumstances

well

as

-

The

national Investors Inc. at the an¬

finally show that stabilizing
monetary and fiscal policies can
succeed in stemming even strong
COLUMBUS, Ohio — The
and sustained inflationary pres¬
sures
if applied with sufficient Columbus (Ohio) Stock and Bond
of more than 8% for the year. Ex¬
Club will hold their Annual Golf
energy and at the right time. It is
ports continued to rise, but im¬
again needless to say that these Outing on Friday, June 26,1959
ports rose more. During the course
at the Columbus Country Club,
of the year it became increasingly policies in themselves may not be
able to do the job if the economic 4831 E. Broad Street, Columbus,
obvious that Japan was heading
Ohio. Out-of-town guests are most
gan

a

advanced.

interest rate is looked for in the

industrial

the

to

increase in the debt limit

Milan D.

example
shows
can continuously

country

a

pursue
•

prices.

new

are

can

to the promo¬
tion of export markets.
Talk of
energy

devaluation

actions taken

different, but space limi¬
tations will not permit us to re¬

devote

be only

Treasury is expected to get through the current fiscal
without resort to new cash borrowings. • On the other hand,
money will be obtained early in the new fiscfal year and an

develop¬

time

had

can

With this increase
question of time before

The
year

But what

they

loaning rate it

the Central Bank rate will be

are

different and

than

:

f

the money markets.

pressure on

fi¬

been previ¬
ously, and the buoyant home mar¬
ket made
it less necessary for

tive

:
;

money operation is out of the way, but the increase
prime bank rate last week means that there will be no

in the bank
be

more

new

the

let-up in the

and

in

seen

better than 4%

a

and

in

economic

drifting lower and lower,

mostf of these issues at the highest, levels that

than 30 years.
It is evident that we
market for Treasury obligations &hd this
goes for the near-terms as well as the long-terms. The refunding,
been

have

;

should

situations

with
have

Conclusions

Other

Governments

on

By JOHN T. CHIPPENDALE, JR.

L.

Inter-

of

competitive industrial
ities have applied. :
■;:
In
1953
Japan experienced- a~ managerial leadership, and a pop¬
sharp rise in imports while ex- ' ulation that has developed an
amazing propensity to save and
ports ; remained
virtually
un¬

changed.
Reserves of gold and! invest
foreign exchange fell about onesixth" during the course of the

Reporter

the election of Milan D.

announces

<-•

Eck, Jr., President

van

.

record

near

23

(2321)

Mo.—Robert H.
associated
with B. C. Christopher &
Co.,
Board of Trade Building, mem¬
bers of the New York Stock Ex¬
KANSAS CITY,

Hinsen

has

become

Mr. Hinsen was formerly
local manager for Fahnestock &
Co. and prior thereto was with
Harris,"Upham & Co.

change.

Form Life Ins. Stocks
DENVER, Colo.—Life Insurance

Stocks, Inc. has been formed witfo
offices in the First National Bank
Building to engage in a securitiesbusiness. Officers are William A.
Cannedy, President; Rubin C. Cannedy and Donald V. Floyd, Vice-

Presidents; and E. L. Cannedy,
Secretary - Treasurer.
All were
formerly associated with Colum¬
bine

Securities Corp.

Forms Investment Co.

r

engaging in &
securities business from offices at
100
William
Street, New York
Leonard Jones is

City, under the firm name, of-Pro¬
tection Planners**•+

^

^

>

Sidney Osgood Opens
BROOKLYN, N. Y.—Sidney Os¬

good

is engaging in a securitiesfrom offices at 815r

business

Broadway.

•

The Commercial and Financial

Chronicle

.«

.

(2322)

26

tm™

»a

+•

the Revolution. But all things are day find ourselves allied with the
relative, and twice one egg per USSR against Communist China,
week is still only two eggs. Their but is this a comforting thought
economy will be able to provide- lot has been alleviated—but only
for-the. members of the Economic
a
surplus of $10 billion annually to a degree that may whet their Club of Chicago to take home;to

f

tively modest. But others estimate
that within ten years the Soviet

Underestimating the
Soviet Economic Challenge?

Aie We

Union

using cut price

was

on

weapon." might well force the hands of the
American authorities."
There is no Marxist nonsense in
viet
Union
would replace the Soviet banking operations. RusiTnited States in the Western Eu- sian bankers operate today much
rnnpan market")
as they did under the czars. They
Tlie ]Russians can flood the mar- don't believe in
capitalism, but
ket
with
their surplus tin. In they believe in capital and they
Bolivia where tin is the vital life handle it along capitalistic lines,
rtream' there are riots. Against Our bankers will tell you that Sothe Russians*' No
Against us. It viet gold is a pleasure—and a
true that the most recent riot
profit—to handle. It is always
was touched off by a statement in
perfectly assayed. And it is beauTime Magazine.
But the under- tifully packaged, so that the banks
lving cause
was
the depressed always make just a little bit more
market for tin
when they handle Moscow gold
Soviet petroleum finds its way than
with any other country's
that Mr. Shuman
that the So-

Times said

"pvnressed

fear

the

and

Arppntina

This

Uruguay

f

gold.

the markets for
Soviet gold now trickles into
Venezuelan oil So does President the West at the rate of about
Eisenhower's Executive Order es- seven million ounces a year. This
tablishing a quota on oil imports is roughly a quarter billion dolinto the U S
This order pleased lars.
It isn't enough to disturb
tends to dry up

oil

our

^nd

it

but

cut

pur-

our

chases of Venezuelan oil by $250,nfto a dav
Vice-President Nixon

aboutril when he visited

heard

C^s-Md
briSts wVthere
olo^ent'

other oil

te

^The

cotmtries'

smd
be

unran-

producing
wmn't

Russians

•

the German market. They

selling at low prices and they

are

But what did Mr. Mikoyan urge

arertt being advertised. The
viets
havent
yet
learned

So^

in

cummer

vieT2

s

tended

bourse

e<ddThis of

nrice of

e

XTo

a

the
the

tnat

He

doHnr

the

con-

sold
goio

of
ot

nrite
pi ice

is
is

0£ Soviet

^hteid^ta^es^^a low^ate^which
United btates at a low late wnicn
impose

we

economic challenge

As

Russians

^en

are

fee^

I'm

tall

fonnd

on

by^us.

. Americans are m a life and death

(

Ruble ConvertibUity

thn

evils

of

the

Czars

in-

tolerable and ultimately, escaped
them*md
ran
sav
for
man

nn

that

sure

this

may

not

liappen

^nthough Slre^sS

which^we buy gold-as a form of
Mikoyan

v

T\

V

.

A

..

a Cassandra, I to argue on. But I
could go that the
.
here

from

countries

on

.

_

the

international

K^ed^Sto
States rail!

the tribute collecte|I

S^tL°con°lbSrr«^ds'inepvnni?
to help sell their goods m export

in

article

an

ine

ffi^tottheuShted

will! ?endld tlfat

hear much about itBut we wm.
near mucn anoui li.
cut we

ing on

market.
incf

AT*

,-Now cio L have any, suggestions

idutheiJt

of the gold

in Oklahoma the delicate balance

producers

Tpvas

output of food and to ar*future
with good housing,; and enough

meat, milk, and clothing for. all. ^a JEp^hpw best to geaf rpiirselves >
Perhaps he feels-.that<thetSoviets
people may never again., be. as
^
.th^nr^t„^d_mo£t.i-;,:;
supine as they were in the years:essential"pk of the United states
when Stalin was operating\on is. ^ cpiitinue .to maintain and ;
Lenin's dictum that.it was ,neces- 'Jtirtheivto buildI up our defense essary to sacrifice two entire gen- tabiisnniems; this is a subject for erations in order.to achieve, the ah other, speech, though not by. me.
revolution.
Perhaps I should-. remind you,
Illiteracy in the USSR has; been ;,^w^v^fe that^ many, who have •
largely wiped out for.those under .studied, thesub]ect teef that our
45. In my book of last year, This defense budgets should pepped is the Challenge, I again reported up :at a late of at least $3 billion ,
how the booming Soviet* educa- a year. A great. political scientist, ,
tional system—or rather, its train-' who ^spends fiis hfe^studying^orld
ing system—is turning -out tre- trend^' told ,m€Mast month that he;
a group of West German and In- mendous crops of competent thought the odds on axuclear war
dian industrialists. Its opening professional men and women, ad- had shiftedn*n the JasL±iye years ;y
passed relatively unnoticed. The rainistrators and techniciaijs^and frog
1 m 1 L He adsecond was built and financed by thus creating a new,version of a vises me to purcnase tnree hidethe Soviet Union. It opened amidst middle class. Allen Dulles £as ex-., aways (he prefers to caU them
a fanfare of publicity, a flood of pressed the "cautious hope",that. lodges), at JOjQOO to .J2,00a. feet..^
propaganda that made it appear to education may prove the Achilles albtu^ one
As?a"nd' •
India and surely much oi the un- heel of the
and.,
derdeveloped world that the So- Kremlin may indeed*find- it
Africa. .,.Keop_one ,
viet Union was India's principal increasingly £arder.:prob^
benefactor in her struggle toward .jmanipulate the ypeoplefof ^the^UJW^
^
self-sufficiency.
■'USSR. >
-v ?^ve^ir-'
Yes, perhaps the gravest threat
Alexis de Toque villein his book,
the Western world in the, "The Old
«™erSing s°Viet economic chal- evils which ai.Xdur.6d with'pa^ :»>? arguments. :Our :^derstaiidlenge is the accelerating program tience so long as th<jy,;are ipfevK^g^«alrtK isjessefetial to our
oi' Sovlct economic aid, and the table seem intolerable as.soon as a-?«rviyal in lreedom.. . ^
r<
;
sklU with which it's handled. /'
hope can be entertained ipf/escap■ ^eoiid objective for our
Now Vve mentioned four forms ing them." The Russian people i economy, as I. see it. is to produce •,

economic warfare

an

The

The astute politician Khrush- present necessity is. to gear up for

quite clear. They tell the underdeveloped countries to expropriate Western property and to reject
Western aid. They promise help
without the "enslaving" conditions
we impose. That we do not "enslave" is of no importance, so long
as the Soviets are able to sell the
idea that we intend to.
In India recently, there was a
dramatic demonstration of the effectiveness of the Soviet aid and
propaganda program. Two steel
mills of one million ton capacity
were opened on two successive
days. The first had been built by

some that had orig- can Government's difficulties in
United States farms— handling its financial problems

-i—including
inated

ments are powerful that America's

Kennan. v

:

The Russians are playing for

Soviet mean dollar holdings by foreign money even when the money's
wheat countries) caused by the Ameri- small. Their anti-Western line is

the

that

"evidence

ins

elect.

York too, on the possible devaluation

the New

March 28,

dated

will continue to be rela-

program

11

nana

Continue a yrom pay e

Thursday, May 21, 1959

small hope at present for any sig-

struggle we shall be We'll advised nificant

or

at full capacity, or close to lull

capacity.^We must an expanding'pursue^: polic¬
eies which- insure
economy.

What • we should ;pro-o

Juce, and how uiur total pro&ic-^
^10n should be divided among f

imihinent change in goods'-and services, is another
question. We have largely solved**

+
if we do not underestimate our the regime or its policies.
foreign trade; competition. I'm rying to dissolve
uset advertising domestically to journal, Vseshiiyaya Torgovlya, any juus|on |}ia^ ^e United States
'
Factor of China
dispose of surpluses or to stimu- Mr. Mikoyan stated that m the .g necessarily the Big Man and
There is a major factor which
late savings, as I reported m Sales not too distant futuie the ruble, that the USSR is the Little Man
should
not
be£ minimized
If I

the technical problem of produc- *
tion; what we have not solved isr>
the problem of maintaining an^
economy at lull momentum and of >

Man^ement on my return from export of which has been forbid-

channeling its production among •

markets.

They are

the

In

beginning to

Soviet

w,T?*orfW toRv1SnSSrtlbte
lully comeitible

predict that the USSR will short-

h^V°w?f,e
This
i

advertising.

port

ndd

add

.

-

eX«*4W
Both of these

.

h

on

and th t

torn,Sal beats

on international

,

^'i articles.

magazine

-

■

Good Bi Man always
a Good Little Man. '
.
r.

Flaws in Soviet deep-seated
System
are

Manifestly there

me^ureably to the lormidability by Mikoyan sustain reports that flaws inherent in the Soviet
Soviet
competition

markets.

There
for

export

in

persistent Soviet bids

are

trade with Britain. Three

more

sysrevolution in tern. Further, there are cancerous
In the So- economic flaws wholly apart from
viet view, the ruble is to displace the purges, the tyranny and :the
the dollar as the dominant me- political double-dealing. ;
the Russians plan a

international finance.

-

ago > Khrushchev,
visiting
England, spoke contemptuously of

years

.

dium

current Soviet-British trade as the

exchange
British

of

Russian

for

crabs

herrings.^ He offered to

buyalmost $3 billion of British
goods if-the embargo on strategic
exports were l^emoved. And now
Mikoyan

roams

the

world

of international exchange
the non-Communist world,

Such

der.
and

Soviet
gem

competing
Africa.

ready to buy or sell
from either ixicket, ready to un-

will

holding

out

loans at

z /<?

is

This

lenge to the dollar by the ruble.
«•

tor

i.

Higher

The London Economist

i

a

had

bank

Chairman of
Board

our

of

case

house

of

Lwidon bullion

lion
few

Review

wagered

large
the

Federal Reserve

champagne

1958,

tells

factSrabout Soviet gold

i
Thnt'c qKomI SnnrvinArtn
m
fhica™ "a!" 'c

as

its back-

and

the

so

are now dangerousSoviet challenge in

that

us

a

protn1??

the

During

this may turn
out to be the most important of
ail the Soviet economic weapons.
Recently Undersecretary of State
next

decade,

Dillon reported that Soviet commitments to underdeveloped and




Wood

of

Chicago,

to

turned

the

and

Uni-

advised

a

Cassandra, I would

if Thl facSr
vearq

banauet

is China. "Vitally ingoodsnational interest. :
various. the and services most,
sneakers'

will perhaps be focusing on a new

For the last several years, our '

growth rate has been considerably'
is the gravest in all our historyless than our traditional 3%. AlThey may fell ^ou that in 1959 most two years ago, in the third1
we Americans^were fighting the
quarter of 1957, our gross national
wrong cold war—and they may be product
reached its peak —we
right. Peking cfeims that China's were then producing at the annualA
production of steel and grain dou- rate of $451.1 billion dollars. The1,-;
bled in '1958. ^wice one egg is recession came along and G.N.P.1
still only two eggs, but it's" a much sagged. A low annual rate of
bigger omelet^when stirred•• by $429.2 came in the first quarter
600,000,000 people. To1 the Soviet of 1953. The average for the year ;
Union or to the rest of us it is ended up at $437.7. (These figclear that Mao" Tse-tung; Chou ures are all in '58 prices.) -j Today '
En-lai and Company are reorgan- it -is creeping back up—but with -'
izing China to achieve the last five or six million unemployed. It}'
ounce of productivity.
^
•
is at least $20 billion behind what :
There is a wisecrack current in we'might reasonably expect with ^
Moscow. Khrushchev's Seven Year high employment.* ' .
"■ {*
problem which they will'tell you

to keep it at 60).

Khrushchev's

liver; he looks
in his 'pictures

uncommitted nations for the

year munist energies away-from an in-1 significant political developments vciriated
bv a oaneP af carefullv
1958 amounted to $1 billion. Mr. ternational offensive. Such a res- smce the warj^e Soviets under- . chosen 'experts to accommodate >
Dillon said this represented "a pite might, of course, be only stand such d^Ijppments^. rv.
. sharDlv-increased defense exnend- A
dramatic acceleration of the tempo temporary.
•.
But I fear
effort to find a itures deemed essential* to cover j
,

of the drive."

«

comments,

General

Britannica

few

Now I don't know the condition

0f

!

a

the

a

a

Plan, they£sa^is not aimed at : Now it: takes : no financial or"
catching up with the United States, mathematical genius to discover^
but at keeping ahead of China, that if the current or recent rates'"
healthy enough
The United Nations forecasts a 0f our own economy and the So- -*
And it takes a man in good health
Chinese population of 1,600,000,- viets are maintained —that they
to stand up against Hubert Hum- 000 by the year 2000. The Soviet will shortly surpass us in-gross V
phrey for 8V-> hours. But I would Population is now 270,000,000, less national product—and withamin-':
wager that the jockeying is on than a third of China's, and growimum of fin-tailed Cadillacs or1':
among those who want to sit where ing much more, slowly. The pros- plastic - covers for the hats that,J'
he sits. He may be temporarily Pect of an erosive over-popu- cover the heads that cover our,
succeeded, as was Stalin and be- lated China immediately south of brains.
j
fore him Lenin, by an oligarchy of Russia's rich and underpopulated
Can we Americans afford to
unquiet men scheming among Siberia must be cause for concern settle fora Growth-rate of less'f'
themselves for the ultimate power.'in Moscow. Former Premier Paul than the 5%*set as a goal in the '!
Such a struggle might lead to an- Reynaud at a .conference
I at- 1958 rep0rt o f the Rockefeller
other round of liberalization with- tended in Bern^last Summer as- BrotherJ Fund->
Thiq is no auota'
in the USSR. This would be all to serted that China's abandonment set by an, optimistic safes^ hianthe good. Or it might deflect Com- of birth control
one of -the most ;ager Mt* is;'a^mte-'of •'giowth^ckl- *

me

dollar,

long dominated the inter-

facing

when

versity

death grapple be-

By comparison with our own,
tbe Soviet program of aid to underdeveloped countries has been
^°utl1 Afn- small—with a total commitment
oviet
goi?nrf^f^ves of only
billion since the war,
' ^d11011* mostly in long-term low-interest
axes some
•

g

over

the field of foreign aid.
a

Montagu, the big
house, in the Bui-

for

1942

growing

foreign Aid Challenge
Fourth and finally, we of the

iy

the United States will devalue the
dollar within
three years.
And
the

a

ruble

a

^

f

recently

reported that the head of
Zurich

and

national world of money?

United States

Dollar

Jw>,;me

r

gold

tively free system of finance that
has

eco-

their

economic weapon Number Three.
It is no less than the coming chal-

#

will be
South

of

what will be the fate of the rela-

dramatizes still

offensive.

tw4.r~

have

these

international

ruble

This last point

unve

with

The

diamonds

soon

flood of commodities

years.

another element of the Soviet
nomic

industrial

diamonds

countries'prices, and ing. And in
the hope of Soviet tween the
ior 4U

nightmare—

a

a few years ago. And today? I'm
not a financial expert—but I won-

kets, beating the drums for Soviet

dercut other

of
dictatorship—how,
without terror and bloodshed, to
transfer power from one regime to
the next. Stalin was in his forties
when he became absolute ruler,
but
Khrushchev
is
already 65.
This is Sears-Roebuck's newly advanced retiring age (it was 60 in.
succession in

belief would have seemed

a

foolish—or merely

mar-

products,

One is the unsolved problem

even in

pureiy

y
Tn

credits.

Some experts believe the

e^ntiaf doihSS

There are factors- and trends silver lining^China's^ growing 'increasecT and
■
?
that could work in our favor. For strength mak&3~this paper's cloud expenditures in such-fields as 40 years the people of the USSR tbe m°re ominous.
* - , ' •
" education; and to provide for a
have been hearing about the betIs a powerful China, seemingly 2.8% per annum growth of private :
ter life that is in store for them, more Communist than the Krem- per capita consumption. Thus it
It is true that most Soviet citizens lin, likely to weaken the world- seems to promise that we can have
are today better off materially wide economic,challenge of Com- our.oake and eat it too. If we get V'
.

than

their

fathers

were

before

munism?

We

may

indeed

some

the

breaks,

perhaps'*we

can

and

-

Volume

189

Number 5848

.

.

.

(2323)

The Commercial and Financial Chronicle

27

■'perlTaps 5tfeh-anf-example on
our^eraH-ons—domestic ones affecting off quickly will cost a lot of
part will help lead the vyorlcl to farm policies, for example—or our money. I reply that the money is
peace.
At^any rate^wefshoiRd^qil;.quotas to which I've just re-Jiny compared to our national inseek to develop nationalrpolicies ferred—: or our/tariffs,; as
'the;i'come, and our Defense Depart,

directed toward such

requires

skilled

a

goal.

Illinois and Connecticut Manufao-

ment costs.

turers Associations

This

and i.courageous

danger

political, leadership applied to na.nnn
f,„
tional
tax- policies,
budget and
monetary policies, f'Yfff-j : •
One distinguished economist es¬

•

tell you.f ;

can

Barriers'^^ ^ for

Reduce Trade

^he"

and

In view of
our

great
need, I

cur

urgent

ahi prepared to face up

."She* «*>*<*• We are confronted
Reading Company
it reasonably can to reduce tariffs ^
a ne,w el"JerSency no less real
Earnings of Reading Company so this means additional traffic to
and trade barriers and thus stimu11 vYar' a
potentially equally
timates we must double our cur¬
lite^rld"trade gehlraVly! °Ih"his menac.ing because if we do not far this year have been disap- the' Reading.
Bituminous coal
rent or historical rates of
savings
testimony before Senator Douglas' ™eet it, war may not be far be- pointing. The road is highly de- traffic which accounts for: about
and- investment
to
achieve
the
Committee,
Professor
Slichter
V
^ • :
- v
pendent on | heavy industry and 30% of total freight traffic was
Rockefeller goal.
We must work
suggested 'that
tariff
reduction
Governor Stevenson is perhaps bituminous coal for the major por- off sharply last year. This traf5more, but if we do it will be easier
would hold down United States well enough established even in tion of its traffic. Recently, how- fic is beginning to pick up curto save more.;
*v
prices and thus counteract infla- this economic citadel, for me to ever, traffic has been showing rently.
More Economic Aid
fvff tion.
"• / ' f
f :
;
quote him again in concluding. In good gains over a year ago and
Export business of the road has
A third front on which we must
urd
"And should we exclude the So- grave and solemn words he! ire- this trend is expected to continue, gained in importance in recent
fight is that, of economic aid. Here viets from our trade? Might not ported on his last year's trip to
s
In 1958, earnings per common years. This has mainly been exagaiir I" turn to a ;recehtf but trade with .theim help encourage: the USSR.
He: warned us,/"My share amounted to only 34 cents a port shipments of grain and coal
neglected report of the Rockefel- the trends we desire? :In his new conclusion is that our Russian share, but this year with
im- as well as heavier ore imports. ^
«ler Brothers Fund.' This one is
book, Adlai Stevenson asks these competitors,
are
much tougher proved movement of coal traffic, , jn iine with improved traffic
titled "Foreign Economic
Policy" questions:'"So why not trade with than most of us have yet realized it is estimated that per share net prospects, the future earning
pin the 20th, Century:" If says, "The them?
Why not help them im- —and that this time we might get could expand to around $3 a share, power is heightened by good cost
selective economic program of the prove' their living standards? Why licked, unless we are willing to which would make the 25 cents control.
Expenses probably will
Soviet Union is politically cffee— not encourage the growth of ma- change our habits, our political quarterly dividend rate well increase as volume expands, but
:five primarily to the extent that teriaP abundance
and
thereby behavior and our complacent out- covered.
■
«..not in the same proportion. In
^ United States should do all

,

-

.

-

.

•

'

r

.

w

,

•v

weak

countries

'the

face

must

make

strong Soviet

economy alone.
If
these " countries are part of larger

•

•

if harder

to

-

oasis.

V

In the first quarter of this year
revenues were off 4.9% under
Can we rediscover in time the those of the depressed 1958 levels,
values which made our Western The road managed during this perevolutions infinitely greater than riod to cut operating expenses by
Lenin's? Can we check and re- g%
with substantial reductions

con-

trols Of the: Soviet system? " Why

groupings they will be able to re- not help the Soviet leaders subsistf pressure more; easily and'-vert their:own system of fear with
nc*otiat£.,or. a m.,re nearly equal the confidence bred of plenty?"

•

l°°k on the world.
*
*%' «

the

preserve

ignbi'ance and tight

secrecy,

.

this respect while gross revenues
in the first quarter dropped 4.9%,
operating expenses were reduced
by 9%.
Finances continue
As of Feb. 28,

satisfactory.

cash and

equiva-

Finally,,.;rj my list of quick sug- verse our national slide toward
aaa
gestionsj I remind you that I have complacency? By dedication and ^ein® ma<*e Jn roadway maintenam u
primarily oecause the free world been identified, over the years, hard work, can we demonstrate ance expenditures.
,
..
^ current
liabilities were ,$19,866,has failed to develop1 a workable first irfdhe Department of State anew what we mean by the good
While traffic in the early months ■ • 000.
Net working capital was
structure within whichthe indiis-^ and later.in the Senate;, with pro- life and the good society?
These 0f the year was depressed, a pick- $11,710,000 as compared with $llytriahzea 'and
newly developing posals for strengthening America's are
the
questions
before the
.
cominff months
is antici- 094 00(1 a vear earlier
Depreciaregions can cooperate in fulfilling programs of international infor- American people today.
•
Up T- coming ™SL1S' anticithe aspirations of their peoples."Cmation
and
cultural
exchange.'How we respond to them is the ^
in view
higher rate of rtion
e
qring
y
The neport continues, "The free These eaif ! have profound impact key to the future. It is the chal- activity in heavy industry. Steel a equipment obligations and sinking
world can, withstand the impact on the economic struggle.
They lenge of our time.
production is at a high rate and ' funds by some $2,000,000 annually,
•

:

v

/

;

lents

"The Soviet effort is impressive

ted to $1 ,26 ^000 aha

.

•

.

.

094,uuif a year earner, uejprecia
charges xceed ipaf

'

,

of

the Soviet geo-political trade
offensive, if. it organizes itself to

r

times the

annually, pr; »almost ,30

should

muni'st bloc.

•

•

i;
;
-

<

•

:

W

"

r

.

f

.

.

"By fouildieg appropriate inter-

national

institutions

solid

the

on

I have previously proposed
of centers for
the

day."

creation

such

the free world can

Seas

.

1b

technical assistance
experts—"West Points of Point 4," '
I called them, and I repeat the V
suggestion here. The graduates 6f
training

basis;."ofexisting mutual interest,

perpetuate an
advantage; that-lies overwhelmingly on its side."." L f f
I endqfge the'conclusions.of this

greatly enlarged,

.%We must not neglcctdhe export

amount ot trade between the less-, the

developed countries and the; Com-

be

of

centers
for

ates1 ;of

over--

serve

service

our.'

ff

academies

in «the : Armed f Services.

'

serve

would

few years as the gradu-

a

They would receive a most mar- •;,?
American- velous * training! for the business • i?
k people are again prepared/to. take world we like to envisage for the", vi
what Clarence Randall of Chicago future.:
'! "•
; has
called,, "the boldnand-*'costly
a few fissures have opened in. ^

report. VL believe

.

the

.

--

i

measures

.

to-

contest.";,-^' ;<

is

avert; disaster in this
;. If-,:
?•

Annual;;increases in productivcan-of.; course-make : it

ity

far

easier;for us-^to increase our for-

eign
,

.

.

-.

them
an

aid; programs,'* and ' to

put

basis,

not
bol-

orx

a

long-term

basis,

of Senator
Monroneyis;; •'Development11; Loan,

Fund."
f
*?'
J'}
f '
Further^ we should develop new
ways to stimulate private investment abroad^.particularly in underdevreloped countries. I
am
'tempted
by r Clarence ; Randall's
proposal that the tax exemptions
we
now give'to profits frbni in-

;
.

annual

uncertain

stercd along the lines

.

,

>

'

vestments in Latin America should
be

extended

the

to

entire }world,

Curtain.' More

Iron

can

be.'

Commjittee of the Sen-

Relations

One of our most hopeful lines.

ate.

is

action

0f

people

the

to 'make

of

aware

Soviet

how wide

the

discrepancy is lietween their own
standard of living and that of the

Thb Sovjet press

West.

issue ithat

this

Prime

so

fears

^t failed to print

Minister Macmillan's broarl-

Moscow; about how well
live and how
higher]; British per capita
production is thbn the USSR's. I
suggest that we set up this issue
as a pre-conditipn of the Summit
meeting
sought: so
eagerly
by
Khrushchev.^¥Ljet him agree ;J,to :
in

cast

British people

the

much

,

•

America
ment

must

create

govern-

a

monopoly of foreign

0n

trade

there.

0f

lenge. This can come; I am told
it is being discussed in the State
Department and "papers" are be-

of

tance

nist

great majority of our voters.

American

We

are

eign

quick tc

the So-

politically motivated forYet many of their

trade.

policies, like

curs,

may

se»m

tional from the standpoint of

domestic economy.
'

accuse

is

governed

by

ra-

political




Sp0t check the New York Times
that
39%
of
those

discovered

consid-

did ? not

questioned
Berlin

much

pie.
free,

that

Germany.
Such ignoa
commentary on the

radio and TV—
flw?*American peo-

press,

as

on

Our

press

but

they

M radio may be
far from ade-

are

fT""

quate.
-

Now

know

enclave in Commu-

an

is

ranee

as

is

East

their

Our trade too

■

18,. James Reston reported
dismay in WasHTnfton because in

repugnant to many of us in the
business
community
and
to
a

viets of

peoplef-and the imporinforming
them.
On

owh

a

.

-

,

March

our

ing prepared on it — as indeed
they should be. But I am hopeful
that we can avoid violating our
anti-trust laws in ways that are
1

;

,

i shall pass over the ignorance

in order to meet the Soviet chal-

'

;

in testimony to the Foreign »./

year

articlefin the
current
Atlantic
Monthly,. he- catry its proceedings in the Soviet
urges, "genuine partnerships and press
and Ton ifs radio and TV.
immediate and generous sharing ehaltoS6 him to expose his peowith local capital of bbth the risks pie to the great1 international deand the opportunities." v
bates of the times at the Summit
I am not now. prepared to join meeting. If he \yants the Summit,
those
whd : are - suggesting
that let his people listen to what goes

f in his; provocative
••

the

developed with a little leadership
and. money, as I pointed out last

*

fL

*.

majr say, as I conelude, that measures I have ticked
you

''
.

The Commercial and Financial Chronicle

28

.

.

Thursday, May 21, 1959

.

(2324)

equity ownership in the firms Continued
financed, the SBI company can
vary its charges for funds in ac¬

an

9

Continued from page

it

cordance with services performed
and
risks assumed. It can pur¬

Business Under
"fourth Banking System"

Future of Small

chase

Investment

event

the

Aspects

]
Of Insurance Stocks

the debentures of the small

businesses it is assisting, and con¬
vert them into common stock in

the

from page 4

business

small

once the initial policy goes on the
worth reviewing by those who are grows and
prospers.
Thus, the nies reported an earnings decline,
institutions.
In fact,
entering the business of financing SBIC possesses the opportunity to after an intermediate increase, to books. The result has been the
smaller firms in the U. S. get far
of
some
sort
ol
new and
small enterprises. Thus produce for its stockholders large only 67.8% of the base figure; a development
more financing from larger firms
they may profit by its experience. capital gains which can more than group of 378 industrial companies "power vacuum" in the magic 40 %
than from financial institutions.
I had the opportunity of investi¬
offset
the
capital
losses which had improved their earnings level "expense" figure, somewhat akin
The nature and extent
of this
to the old style overall 40% de¬
Inter-business
financing in our gating the business loan program must be expected in high-risk to 166.4% of the base; all Federal

financial

vast but relatively
It merits
a
pood deal of study and research.
No attempt has been made yet to
collect and organize information
regarding the form, the magni¬
tude, and the direction of flow
of funds between businesses.
We
do know that there is a very large
net flow
of
trade credit from
larger businesses to smaller busi¬
is

country

a

subject.

unknown

We know that there is an

nesses.

amount

immense

business

which

in

financing,

equipment

of

larger

the

sells its equipment to the

credit.
We
know that a large amount of fi¬
nancing of the smaller business
takes the form of long-term loans
business

smaller

on

stock

purchases of
larger business.

and

the

by

this kind of
financing is perfectly plain. The
-larger enterprise is seeking either
The

either

is

It

things.

two

of

.one

of

purpose

seeking larger and assured

mar¬

kets for its products by setting up

enterprises

small

financing

unci

purchase from it. On the
other hand, it may be looking for
on assured source of raw materials
that

smaller

financing

by

producers.

Petroleum refiners have financed

thousands of service stations

and
distributors of petroleum products
as
well as oil producing firms.
Merchandising distributors have
financed thousands of
indepen¬
retail

dent

thousands
into

of

business

goods they

makers

Auto

purvey.

the

of

retail

have

put

dealers

auto

well

as

small

and

stores

manufacturers

financed

as

manufacturers.

Equipment
machinery makers have fi¬
nanced many of their distributors
parts

and

Steel

customers.

and

have financed

chased

coal

their

for

steel-

processing operations.

Recently,

important

an

trend

has developed among large manu¬
facturers in some industries.
In

the electronics industry, for example, many larger firms
are
advancing long-term loans to or
buying stock in small companies
formed by groups of scientists and
specialists in a particular field.
By taking options on stock or
convertbile debentures they are
assuring that if the venture turns

'

"

out well

they will realize a capi¬
tal gain. We are finding dozens
of
little
satellites
growing up
around
larger
manufacturing
firms. This is

,

aspect of small
business
financing about which
we
don't have very much sys¬

tematic

an

information.

I

commend

this subject for careful study by
the Small Business Administra¬
tion. It has important implications
for

small

business

and

competi¬

tion.

to

like

would

I

who

observations about it. (Those
wish to pursue

Federal

read

this subject should
Lending and Loan

by the Na¬

Insurance, published

Economic

of

Bureau

tional

Re¬

search, New York, in. 1958.
businesses

Small

are

affected

a
great many uncertainties.
This is self-evident. About 8% of

by

each year.
Because we are dealing with an
institution that has a high mor¬
all business discontinue

bidity and death rate, small busi¬
ness
financing is, in its nature,

financing.
Investment

companies

by the

licensed

being

Small

The

high-risk
Business

SBA will
to

have to take careful measures

protect their investments.
They
must expect a fairly high ratio of
losses, even if they do a superb
job of appraising managements
and
"policing" the credits they
extend.

i

Finance

Reconstruction

The

Corporation disbursed about $1%
billion of medium-term loans to
about 16 thousand business firms
to 1953. What kind
Miost ol' these
amortized term loans that

from 1935

up

of loans were they?
were

five years. Most of the
borrowed by these
16
thousand enterprises was used to
add to working capital or to pay
off existing bank credit. Most of
the
money
was
borrowed
by
manufacturing
concerns
of
medium size, with assets between
$50,000 and $1 million. RFC was
limited, of course, to advancing
money to firms that were unable
for

ran

money

to obtain, funds from
or

their bankers

other ordinary sources.

What

companies

great many coal
mines from which they have pur¬
a

detail, and
offer
some

of RFC in considerable

was

RFC's experience? At
about 13% of the

the end of 1951

RFC

then-active

loans

were

respect. De¬
faults
were
especially frequent
when the borrowing business used
its loan to add to working capital
rather than for new plant and
equipment. Defaults were rela¬
tively frequent when the borrow¬
ing firm had a declining sales or
profit
trend,
a
declining
net
worth, or a declining current ratio
in the three years prior to the
loan. That is, the best prediction
of default was a previous decline
delinquent in

of

some

of these factors. Defaults
especially frequent among

any

were

small firms and firms

very

unable

were

with

to

adequate

One

of

that

supply the RFC
financial records.

the clearest lessons to be

RFC

Financing

Small

of

closing
lateral

Business

panies

under

the

aegis of the
Small Business Administration is

opening
a

a new

business

can

good

earlier

chapter in Ameri¬

finance.

occasion for

S.

public

a

recalling

rich

in

1935

experience

to

and

an

your

had in the

we

small

financing agency that
erations

provides

chapter. I recall

minds the fact that

U.

It

tion.

The

began
had

until

studied

experience

business

a

its

of

loans

carefully, -and




borrower's

security.

Of

the

and

col¬

the

course

assets

of

borrower did help the RFC to get
back

some

loaned.
little

more

money

the

of

money it had
losses averaged a

RFC's

than

RFC

though
through

2%

of

all

advanced,

the
even

op¬
very

dis¬

RFC

in

has

been

is

well

time

company

should

realize

his

loss

on

the

sale

stock,

of

a

he may offset it
against ordinary income rather
than
against
capital
gains
as
otherwise required. Investment in
an
SBI company should
be es¬

An excellent

comparative study

prepared by First Boston Corpo¬
ration

covering 44 fire and casu¬

alty insurance companies showed
that 19 of these companies actu¬

ally reported an operating loss in
In fact, the situation had
pecially appealing to those in high 1957.
marginal income
tax
brackets. become so unfavorable that apolo¬
Thus, an investor in the 80% tax gists for property insurance stocks
bracket will be allowed to keep had discontinued
quoting these
three out of every four dollars of operating figures, but were more
his capital gains in an SBI com¬ likely
to show "investment in¬
pany's stock, and will lose only come" and "growth in liquidating
1 out of every 5 dollars of his value." And that is only reason¬
losses.'
' *
•;
able, since those facets of the

their debts.

The

Strength

of

the

The Small Business Investment

Company

can,

valuable

strength of

I believe, make

contribution
our

the

RFC, which

law

to

a

low

economy.
was

to

a

the

Unlike
by

limited

interest rate

on

its

loans and could not ever
acquire

companies, on the
hand, have been having a
y a 1
time. They have been
blessed by:
-

r o

(1) Risihg volume of business, y
(2), Extremely favorable mor¬
tality experience.
(3), Rising investment income-L;
due not only to steady increase in

business, but compounded by ris¬
ing interest rates oii investments.

(4) iLqWf^taxJrates: because of
fayored>treatmenrt until recently.
(She J above': favorable

its

property insurance stocks to per¬
form according to standard
ex¬

Loss
agement, I believe an SBI com¬ pectations in recent years.
of leading fire
insurance
pany is most likely to succeed if ratios
it operates on four basic related

from
56.6% of

companies

rose

Trend Reversal in Sight?
Are the

trends

of recent

years

likely to continue—life insurance
more attractive and prop¬

10-year
getting
premiums

a

principles: First, it should be large average of
erty insurance less so? Normally,
enough to get adequate diversifi¬ earned to 65.2% in 1957. And this
it would
be
expected/.that the
cation of the investments in its story is exactly the opposite of
insurance . cycle' will
portfolio. Secondly, its individual what has happened in the life in¬ property
again turn in a favorable direc¬
investments
should
be
large surance industry.
tion.
Already a reversal in the
enough,
within
the
maximum
It was fashionable in the early
very unfavorable experience
limits established by the Small
days of the welfare state to hold which
peaked out in 1957 seems
Business Administration, to keep
that human rights were more im¬
to be under way. Among the rea¬
the per-dollar cost of funds to
portant than property rights. Well, sons for this are the fact that rate
the borrowing small business at a
humans have been having a better
increases seem at last to be tak¬
reasonable
level while
enabling time of it than
property during the
ing fuller effect; also insurance
the SBI company
to give close
past decade or more. They have
companies are beginning to be
supervision
to
the
investment. been
living
longer and better, more "selective" in
accepting risks,
Thirdly, investments by an SBI while
property life has been grow¬
and, even more importantly, are
company should be accompanied
ing" shorter and more precarious.
starting to slash agents' commis¬
by provision of management serv¬
Fires,
storms,
hurricanes
have sions as well as to look more
ices to the small businesses being
been more numerous. And the cost
financed. Fourthly, each SBI com¬
carefully at all other types of ex¬
of all this damage has been sky¬
pense.
Progress in some of these
pany should specialize in the fi¬
rocketing. Whether we assign as directions
may not be so easy. Al¬
nancing of small businesses in a
the reason our old friend "infla¬
ready the insurance companies are
particular geographic region or in
tion" or whether we ascribe ris¬
a particular industry (or group of
finding
themselves
faced with
ing costs to the normal behavior suits
related industries)
brought by disgruntled
in regard to
of prices during a period of pros¬
which its
agents who allege collusion in the
management is truly
perity, the result has been stag¬
expert.
cutting of their commissions. An¬
gering from
the standpoint of other
thing: if being selective
With the chartering of a large
insurance claims. While fire and
means
merely reducing the
number
of
Small
Business
In¬ related losses have been
bad, auto¬ amount of business
written, this
vestment companies we are enter¬
mobile
damage has even been will not serve as an answer to the
ing a new era in American busi¬ worse. With more drivers on the
fundamental problems.
ness finance. No one can foresee
road every year, there is bound
all the turns in the road ahead.
Insurance
companies cannot
to be an increase in the number
Errors

will

be

committed.

Many

formulae will be tried and found

The

SBA and its system of SBI
companies promise to assure that

this need will be met in the future.

Joseph Carmine Opens
BROOKLYN, N. Y.—Joseph N.
Carmine is conducting a securities
business from offices at 6821 Eigh¬
teenth Avenue.

of careless and
ers,

irresponsible driv¬

even

R. James Foster &
formed

with

for three to five years.

surance
as

at

Frank Knowlton Branch
PLEASANT HILL, Cal.—Frank
Knowlton & Co. has opened a
branch

office

at

2407

Marcia

Drive under the direction of J. F.

McCullough.

withdrawing
But

from these possible inter¬
difficulties, the earnings

mediate

recovery

possibilities

are

very

substantial if the property insur¬
ance

If

overs.

in

the

amount

of

in¬

recognized
by property owners.

coverage are

necessary

all

this

could

materi¬

favor, and market multiples of the
then
reported
and 'projected
earnings
would
doubtless
rise

the proportions of the
earnings recovery. When
insurance
operating results are

beyond

26
en¬

apart

simply

insurance business.

(c) Between the time that, cost of alize, the common stocks of the
property replacement begins to fire and casualty companies would
rise and the time corresponding find themselves in extremely high

Co., Inc, has

offices

by

prosper

from the

companies can ever get going
simultaneously in all fundamental
respects: (1) continued rising vol¬
ume; (2) profitable underwriting;
State Commission.
(3) rising investment income; (4)
(b) Between the time the increase continuing appreciation in com¬
is allowed and the time it be¬ mon stock investments; and (5)
comes
fully effective because tax-free income during the recov¬
of the duration of some policies
ery period by reason of loss carry¬

increases

Form R. J. Foster Co.

Broadway, New York City, to
gage in a securities business.

Small

Company

Life insurance

other:

;

company, as is true in any line of
business. Given a competent man¬

been

Business Investment

store the old status quo.

favored tax status, property insurance business have f
a^^s^farthe^
by ja
astute and competent continued to perform very favor¬
leverage, position'— lowfcapital
management will be necessary to ably. It is in underwriting that we base' relative 1 to
; me ^£ii6uirf of
assure
the
success
of
an
SBI find the key to
the failure of

Despite

energetic,

the

country had
been
a great postwar inflation
which helped borrowers pay off

partment store markup which in

possesses

the

business

continuance in 1954. I refer to the
business
loan
programs
of
the
Reconstruction Finance Corpora¬

making

the

on

collateral
I The launching of a system of
Small Business Investment com¬

earnings

banks'

lead to the encroachments of
had moved up to 215.6% of the
crucially
base; electric utilities as a group the discount houses. Now the ag¬
important Federal tax advantages.
gressive ins u ranee "discount
were up to 203.3%; and even the
It is able to deduct losses on sales
houses" like Sears' Allstate have
of
its
convertible
debentures less favored railroad group had
been whittling away at established
been able to move up to 136.3%
against
ordinary
income.
Any
premium rates.
So the old line
dividends it receives on stock it of the base figure.
companies cannot comfortably go
has acquired through conversion
back to sleep secure in the belief
Operating Performance of of its debentures are tax free to it.
that mere passage of time will re¬
Property a»cl Life Stocks
If an investor in an SBI

SBIC

The

if the proportion had
learned from RFC's voluminous wanting before the guide lines to remained
unchanged or declined.
files is that if a business is unable successful
private long-term fi¬ Rate increases have been slow and
to
supply the lender with an nancing of small businesses will inadequate. There is necessarily
adequate statement of its profit be clear. Yet, I am sure we are on a
lag:
and loss and a balance sheet for Jhe right road. The U. S. economy
the preceding three years—look needs a steady infusion of new (a) Between the time a rate in¬
crease
becomes
necessary
and
and growing small businesses if it
out!
the time it is allowed by the
is to remain free and competitive.
The RFC
terminated no
less
than 13% of all its loans by fore¬

Recalls

member

Reserve

business financing.

Other Complications
With all

this,

the

entered

a

new

factor has

picture—competition favorable,

from direct insurance writers.
years

actual

For

the insurance industry has
on the agency basis—in¬

operated

these

it

stocks

is
as

not unusual for
a
group
to be

quoted at a premium over asset
value, just as the majority of

property
insurance
stocks
are
ticking off healthy currently quoted at a discount
because of the unfavorable ex¬
slugs of the policy premiums, very
often for doing very little work perience of recent
years. ? It is

surance

have

agents, like travel agents,

been

Volume

Number 5848

189

somewhat

difficult

to

.

.

all

see

.

The Commercial and Financial Chronicle

the

of the total

simul¬
taneously, since, for example, any
tapering off in property loss claims

for in

would

cies

favorable factors operating

almost

necessarily

imply

expense factor allowed these stocks are quoted
premium—again based liquidating value. This is

the

traditional

the

on

to be transferred to

were

an-

company,
due
allowance
recession, which in other
turn would be felt in
declining would be made for this factor. The
market prices
of the
common 40% assumed equity in unearned
stock
section
of
the
insurance premiums, both in the operating

companies' portfolios, but it is an

statement

interesting

very

Let's Do Something About It!
"There is

buy these stocks than would be
the case with any other stock selling below asset value. The reasons
for existence of this situation are

to

con¬

for

the

the

balance

in

most

plain—and

cases

familiar—inadequate return

in-

is a traditional rule-of- vested assets. If this situation can
figure.
The
expression be corrected, many insurance is"liquidating value" is given the sues could show handsome apadjusted asset value figure simply preciation, and the greater the

life

insurance

com¬

because this is the amount which

while it would probably the stock would realize, according
be wrong to infer that their pe¬ to this line of thinking, were the
riod of prosperity is permanently company to be liquidated.
Some
tapering off, there are some signs equity probably exists: whether it
is more or less than 40% depends
that the spectacular growth which

panies,

has characterized that business in

for

recent

factor

the

[of inflation];

cause

some¬

judgment, the latter was a
primarily because of a ten¬
dency for increases in money

very
on

single

pull of demand; and
from costs. In my
major factor in 1956-58,

thumb

-

Life's Upturn May Turn
As

in

no

times prices rise because of the
sometimes because of a push

sheet,

development

template.

and

29

below
a

system interesting situation, but may not
of writing policies. If all the poli- constitute a more valid reason
to
agency

of

sort

some

(2325)

during that period to
outstrip improvements in pro¬
wages

ductivity.

leverage, that is, the higher the
insurance liability relative to capi-.
tal funds, the more appreciation

"I believe

late to

could conceivably take place. But
in the long run, it would seem
that stock buyers will find better

have tended of

we

depart from the histori¬

cal relation between
wage
creases
and productivity

in¬
im¬

future

on
the expense protection
in
those
provements. To the extent that
companies
writing insurance busi- whose long-term record is above
we continue to do
so, we will
flected in the prices of stocks may ness and the extent to which in- average, and whose future proscreate cost pressures that are
taxes
be slowing down. Competition is come
may
eat up
this pects
are
attractive
based
on
bound to erupt in price in¬
on
the rise.
something more than merely
Property insurance residual.
Dr. R. J. Saulnier
creases. And if these cost in¬
companies have been casting envi¬
Analyzing Difficulties
^01 S01T^thin8
Jurn
ous eyes at the remarkably favor¬
creases cannot be
T •
.
up.
Of course, it is sometimes
passed on to
Life insurance companies
are
able
necessary to pay premium prices
performance
of
the..-life
the consumer in
even
more
difficult
to
higher prices, they merely create
analyze for
; insurance
better acting companies,
industry, and .are .now over a
a
short period, and for. this
squeeze on profits that will, over a period of time,
and it is a fine science or art to
busily forming their own life inreason
atone many stock buyers
determine just where to draw the
surance affiliates or are directly
seriously impair the nation's capacity for economic
have probably been discouraged
bne in choosing between an actaking over already established from
growth."—Raymond J. Saulnier, Chairman, Presi¬
the attempt. In the case of
life companies. The very favorable
knowledged superior company and
dents Council of Economic Advisors.
these companies we have a further
one which> while not at fhe ^other
Federal income tak position en¬
element-—equity m insurance in
extreme, does not quite make the
joyed by life insurance companies
This view seems to us to be
force. This is particularly controirrefutable, even selfgrade on above average performis now changing. A new law is in
versial since so many factors are
evident. Yet where is the politician who dares face
ance. (Since most general line fire
process which would increase life
mvolved
type
of
insurance, and
casuaity companies derive the
companies' tax bills by an; esti¬ whether
the facts about the labor
straight lite, term, or bldk Gf net
monopoly and its conmated
earnings and growth
65%.
This ' is
hardly
a
group—cost control achieved ■ by in
sequences?
^
;
surplus from, security portcatastrophic development, but cer¬ each
company—degree of selec- f0ij0s
and
since the quality of
tainly not a favorable one. The
tivity employed by each company these
portfolios has a degree of
very excellent mortality experi¬
number of lapses
and probably
ence
similarity, it should be pointed Now With
may not soon be reversed,
du Pont, Homsey Adds
Leavitt, Spooner
many others
Over a long enough out that a
very large
of
although the rate of improvement
(Special to The Financial Chronicle)
teim, these foices cancel out, but
v;\;
(Special to The Financial Chronicle) *
earning power of companies *is of
will probably slow down. Present
this
does
not help
the security sjmiiar
BOSTON, Mass. — Stanley S.
quality. This raises an inBOSTON, Mass.—William D. D1
profitability, however, would seem
buyer to determine which way the
White has become associated with Ianni has been added to the staff
teresting question in discriminatto imply a distinct possibility of
company is moving m advance of
ing as to reiatiVe values on a times Leavitt, Spooner & Co., 585 Boyl- of du Pont, Homsey & Company,
rate slashing
at competition in¬ the disclosure of basic
ston Street, members of the New
developbasis>)
creases.
31 Milk Street, members of the
ments.
I
York Stock Exchange. Mr. White
This is the score: the insurance was
These recent tendencies are be¬
New York and Boston Stock Ex¬
1S customary to employ arbiformerly with Goodbody &
judustry is soundly based and is Co.
ginning to be reflected, as might t ary
changes.
figures
in
valuing
the bound to
grow with the free enbe expected, in stock prices.
By amount of insurance in
tprce— terprise system. Its peculiar charcontrast with the experience down
say, up to $20 per $1,000, in the
acteristics, however, create special
through 1957, here is what has case of straight
life, a lesser figure
happened since: From the 1957 for teim insurance, which does probiems for the stock analyst;
and for this reason, as well as the
mean
prices—Standard & Poor's not remain as long on the com1959 EDITION
fect' that
relatively small part
425 Index up 29%; fire stocks up
pany s books as an earning asset, Q^ j.be
^a| busjness is available
33%; casualty stocks up 49%; life and still less for group insurance.
to b
of stocks while the is_
insurance
stocks
up
only 23%. These figures are then added to
gues
which are available do not
Casualty stocks, therefore, have asset value as shown by the comenj
actiye tradi
on listed ex_
taken the lead over the past two
pany's balance sheet m order to
the field will probably
years, and even the slower mov¬
2 4m?r
collectreally COntinue to be relatively restricted
ing fire group has advanced ahead of what the lieai
company is
wbat
\s
know
as
the
more
of the
general industrial stock worth. The reason for all this staOn Which
average,
while - the
previously tistical indulgence lies in the fact sopbistiCated type of stock buyer,
^

and

years

has

been

re¬

in

,

.

-

.

—

!

poAion

...

ea?nings
.

„

Tj

•

.

.

.

.

.

.

.,

.

.

OVER-THE-COUNTER

ch^nges,

Common Stocks

idea

highly favored

life

insurance

stocks have not done even as well

the

as

general

stock

industrial

that

looks

it

life

be

from

worse

index.

xiyu«n

velopfng

What to Look For
«'

insurance

any

whether

What do

we

look for in examin¬

ing the operations of an insurance

company? Here is an area of wide
discretion, even more so in the
case

of the life insurance compa¬

nies

where

we

are

dealing

pri¬

company,

net

a

to

not

ume

sideration.

be

All

taken

into

these

statistical

in premiums, the insurance
sets aside enough to

pay

cover
potential losses or cancel¬
lations, in accordance with State
"regulation plus their own esti¬
mates. As these sums are invested,

f

^ducttng a securities
offices at 107 North

PARK, McL

?

con-

Harry

D. Smith has formed H. L. Smith

offices at 7302 Yale Aveen^e m a securities

net

investment income,

plus any

value of
constitutes the change

appreciation

in market

securities,
in asset value

during the year.
Over a long period, changes in
capital and surplus will be an
adequate and conclusive guide to
the company's earnings. But over
shorter periods, and to compare
one company's performance with
another in the industry, analysts

employ

.

!

a more

In the

case

technical approach.
of property

insur¬

practice
-■'to assume that a portion of the
"liability item "unearned premium
ance

companies, it is the-

Insurance stock buyers

premium

firm

experience.
(3) Strong capital position relaliabilities.

insurance

to

company

aggressively without incurring undue risk and without the
necessity
of seeking expensive
equity capital.
(4)

Well

balanced

ting new

is

business are a major part




&

investment

no overexposure

to

(5) Conservative dividend payout, with ample plowback of earn-

ings

to

insure

proper

business

enthusiasts

attracted by the fact that

are

many

of

BOOKLET

—

number of years consecutive dividends have

are

been

between

the

over-the-counter

an

analysis of the differ¬

and listed

markets.

COST OF THESE BOOKLETS
1

25 cents each

to 24

20 cents each

25 to 199..

—15 cents each

200 up
On

Of"

of

orders

printed

above

100

or

more,

your

firm's

name

will

be

the front cover with the words "Cpmplimenti

on

it without

further charge.

Gibson Associates,

Street,
to

D.

North, has
A. Davidson

Co.

Commercial

&

Financial

Chronicle

Wm. B. Dana Co., Publishers
25 Park Place, New

York 7, N. Y.

Newhard, Cook .Branch
9

EAST ST. LOUIS, 111. — Newhard, Cook & Co. has opened a
branch office at 820 Illinois Ave-

Please enter

our

order for

booklets of "The Over-the-

Counter Market — Progressive and Panoramic"

panying dividend tables.

£u?rrU??er the direction of Harold
wolie*

Firm Name

unusual losses in any one category.

over-conservatively
development.
-stated, since past experience has
Some insurance
indicated that the expenses of get¬
reserve"

of

8 Third
been changed

This

to seek busi-

ness

portfolio with

name

PAGE

31st, 1958, and percentage yield, also
ence

Inc>>

60

paid, cash dividends paid during the twelve months to December

for long
to make

volume.

permits the

Included

SCARSDALE, N. Y.—Roger H.

(2) Above average underwriting

tive

—

Continuing Inv. Business

Long Run Criteria

Years

5 to 175

H. L. Smith Opens

Sullivan and Bonnet G. Sullivan
range investment want
have formed a partnership to concertain that the
company
they tinue the investment business of
select is making the best possible Paul T. Sullivan & Co., Harwood
earnings begin to
accrue,
and
showing in all important respects. Building.
after ^ach year's losses and ex¬
Therefore, a combination of the
penses have been provided for,
following factors seems desirable:
jy[ow £), A. Davidson Co.
the equity in reserves flows down
(1) Above average growth in
to net earnings. This amount, plus
GREAT FALLS, Mont. - The

^

Have Been Paid From

a

1:51X1,1 &liee1,

with policyholders.

company

v.

CA3MDEN. N, J. •—Jli)T13.nUGl A«

Smith:is

with long range factors.
considerations are further compli- C°* w^th
Insurance companies derive their
cated in the case of
income from two principal sources:
companies'£ue, to
writing participating policies — business,
(a) underwriting, and (b) invest¬
where profits have to be shared
ment operations. As policyholders
marily

t

at

ulicj:iv

:i

business than when
it is merely allowing old policies,
with their earnings residuals, to
expire. Thus, a completely erro¬
neous impression might be
given
were the changes in business volnew

CONSECUTIVE CASH DIVIDENDS

E. A. Smith Opens

property,!
capital

or

«

i

Keller Bros. Branch

Address

SPRINGFIELD,

Mass. — Keller
Co., Inc. has
opened a branch office at 95 State
Street
under
the
direction
of
Matthew Keller.

Brothers

Securities

By

-

Date

and accom¬

The Commercial and Financial Chronicle

(2326)

30

to

On

The President

condemns

he

the

Strong Ground

is, of

course,

on

strong ground when

existing program for supporting

the

prices of wheat and other things—much stronger

ground

than that he stands on when he

he has

recommends,

as

sort

Continued

for all who wish to know the facts to see—with a

little

help from the specialist who knows how to avoid
being either tripped by or buried under the mass of data.
The Bureau of the Budget regularly publishes figures
and estimates of outlays under the heading "Agriculture
and Agricultural Resources" which may or may not contain
all the outlays for the benefit of the farmer, but they
certainly do not include any other. Only once since 1954
have these outlays been as low as 17% of all non-defense
expenditures. They are this year running close to 20%
as
compared with less than 5% in 1952 when candidate
Eisenhower was bewailing the excesses of the Democratic
party. The vast bulk of all these outlays are devoted to
what is euphoniously termed "stabilization" of prices of
farm products or of the income of farmers. Only debt
interest^ about which so many of the New Deal enthusi¬
asts have had so much to say of late, and that other
political scandal, Veterans' services and benefits, match
these figures—outside of national defense, of course.
Such figures are of such magnitude that it is not easy
to grasp their full significance without
applying some sort
of yardstick to them. Fortunately, the Departments of
Agriculture and Commerce have supplied data which en¬
ables us to place the magnitudes in their proper perspec¬
tive. Farm gross national product—the GNP about which
we hear so much these
days—came to about $19.3 billion
in 1957. Later figures of such
complexity are not yet
available, but there is no reason to think that the situation
has changed in any way except for the worse
during the

Now

one

elsewhere

and

in

Although

as

.

the

slowing

a

of

rate

including the $3.4 billion listed by the Budget
heading "Stabilization of Farm
Farm Income." That is to
say, nearly 18% of

as

t

National

Gross

billion

Product

the

from

$9V2

rose

second

the

to

third quarter of 1958, rose another

$13

the third to

billion from

fourth

the

last
$12

quarter

on

first

Since
billion

all

increase

three

and
billion in

year,

The facts become
is

even

more

the

impressive when they

originating in farming. This

figure which remains after

ducted from farm

gross

certain items

are

de¬

national product (which is sup¬

posed to be the total output of

our

farms at market prices).

The chief deduction is, of
course,

this

of

during

one

or

two others

of lesser

farmer

himself;but including wages and interest
paid out
by the farmer. Now the $3.4 billion figure of Govern¬
ment payments must of

necessity all come through to this
figure of national income originating in
farming. Thus
it is to be

seen,that 22% of the income
accruing to the




end

of

this

be

on

value.

ahead

the

to

end

above the current

of

1959, I want to take up separately
ing which contribute to

business
and
estimate
whether'
the fourth quarter level of each
type of spending will be higher
or lower than
it has been in the
activity,

this

why

the

has

economy

ex-

rapidly over the past
has been the turn-around in

,

.

.

almost

every
line,
inventories
pushed too low in 1958. Now

were

that

sales

and

orders

which

inventories

rising,

are

last

year

seemed burdensome

suddenly look
quite meager, to that the rush is
to restock.

on

pace.

This will

steel

a

non-occur-

or

strike

will

have

important effect on inventory
purchases during the third quarBut the effect on
inventory buying, and on steel
production, will not be a lasting
ter of the year.

By the fourth quarter of the

one.

.steel buying is likely to be

inventories of all kinds will prob-

ably be proceeding at about
1

billion

$3

a

rate

annual

Although a $3 billion rate of
inventory accumulation is about
normal

will

for

a

prosperous

nevertheless

be

low the rate which

experiencing

in

year,

slightly

we

the

it

be-

have been

first quarter

of this year.
This type of spending, considered alone, will there-

fore not contribute quite as much
to general business

fourth

quarter

as

activity in the
it is contribut-

trade.

The

elements

is

the

of

that

.

most

the

in

Expenditures

segment of the economy,
booming at present, is

is

the- residential

construction

in¬

above

close to an allExpenditures
on
housing are at a record $22 billion
annual rate.. •
;.v;A \
;
>
1,300,000

time

record.

continued annual
output of 1,300,000 housing units,

years

t

United

States

for

has exported several

billion
dollars worth of
goods
and services more than it has im-

ported.

.

A

,

rope has recovered from the
fects of World War II and as

tions

all

moved

encouraging
business outlook

to

the

over
a

support

a

market demand

dur-

world

have

development, - the
which the United

held

output is likely to begin to

drift

down to that level in the 1ad

Gf

the year.

half

Toward the end of

the year

there is also the possibiljty that a tighter capital market
' - " the volume of funds
will restrict
flowing ino FHA-VA mortgages.
Housing
expenditures
in
the
final quarter of this year are likely to be at

an

annual rate of about

^ billion below the current level.
This

will

area

therefore

depressing

mildly
business

activity

exert

a

influence

as

on

a-whole.

1

ef-

tremendous lead
once

1959 and i960 will Tie about
1,250,000 houses a year, so that

Consumer

na-

advanced stage

more

industrial

of

in; manufactur¬

ing

Spending

The final factor

;~

which will de¬

termine what happens^o business

activity

in

the

is

months*, ahead

spending.
Seasonally adjusted retail sales
in January and February held at
the very high level achieved last
consumer

efficiency has been whittled
In addition, the upward
push of wages and prices in this December
and
in
March
and
country is further lessening our
April spurted ahead to new reccompetitive advantage in world Grds JConsumer expenditures on
markets.
The .result has .been services are
continuing to climb
that our exports have not grown Tht. trend back to durable goods!
with the growth of world trade, which
began''in late 1956L is still
but our imports have risen mark- much- jn
evidence
Automobile
edly. The balance of U. S. exports. saies started the
year aHittle hesiover imports in recent months has
tantly but they definitely picked
been smaller than in any postwar - 'Md momentum in March and April
year except 1950.
' '■
1
■' Paperboard production, which
The remedy for this situation is
provides a measure of the move¬
not to keep out imports. Compement of goods to retail outlets,
tition from imports is healthy and is
booming at record levels.,
'
is in accord with the basic prin/
Seasonally adjusted unemploy¬
ciples of the free enterprise systern.
The remedy lies in stepping ment, which I estimate at 5.0%
of the labor force in mid-May, is
up our exports. This can be done
still slightly
above normal and
only
if we
move
ahead
more
this is moderating the .strength of
rapidly in efficiency and in techdown.

nology, and if we are
in curbing inflation.
I

Expenditure
^

One

the

pre"-

ing at present.
Business Capital

a fifth

which

-ent

V.

exports

States

occurrence

of

Housing

-

Imports are important not
year
only because they increase the
business
inventory poiicy, from variety of goods available to us,
liquidation in early 1958 to accu- but because they provide foreign
mulation in early 1959.
•
.nations with the dollars they must
Inventory buying at present is have if they are to buy our ex-<
being spurred by the threat of a ports.
v
steel strike, but steel
buying is
Although imports are impornot by any means the only type tant, so are exports.'
And in this
of inventory building now under- area, we are witnessing a rather
way. Throughout the economy, in disturbing development.
As Eu^so

rnl

of

I esti-. dustry. Private housing starts are
expenditures now running at an annual rate

- -•

••

many

ventory purchases. One of the rea-

panded

billion

-

auar*er

ll7

The third factor which will af-' Sustainable

look at business in-

s

last

feet national output is our foreign ing
.

First, let

be :$1;5

will

not only more than offset the de-^
Over the rest of this year I excline in inventory buying, but ; pect a slow but steaSv 'decline in
will provide at least: a start in the housing output. I do not believe
much heeded program of bringing that basic demand factors in the
our capital plant up to date,
r
American economy trillat

year.

Tmro
Inventories

ons

are that
Government;

_

each of the major types of spend-

first quarter of

Federal

the

bv

hieher

that business
plant and equipment in the
quarter of this year will
running
about
$3.5
billion

dollar

Looking

of

rate

spending

=

•

area.

mate

past

quarters

_

originating in farming in 1957 amounted to $15.3,
billion. This
figure represents the net income accruing to
the so-called factors of
production, that is mostly the

the

by

again. ^Present, prosjpeets
"the

fourth

importance. National in¬

come

But

the economy will be nearing
employment so that, unless
government spending can then be

the.upside. • New orindustrial supplies and

expansion of plant

$341/2

the

for

has been in real
goods and services and not just in

depreciation, but there

are

mands.

on

back to normal, and restocking of

related to national income

are not corri-

peting directly with private .de-

replacement and modernization
of obsolete equipment rather than

of

have

almost

.

is likely to continue throughout
the year, with primary emphasis

this year,
been virtually

prices

stable,

the

of

another

quarter

added

Prices and

are

still -bave

-

are rising rapidly. The
- since state government
spendmachine tool industry, whose outjng js likely to rise by $2:5 billioh
put in 1958 dropped to the lowest total ^ government
expenditures
level since 1950, is experiencing a Vyjp |3e up about S4 billion, constrong upturn in bookings.
And -tributing to a rise in business acthere are even some signs of a
tivity but also raising a serious
recovery in plant construction.
threat of future inflation.
<
The rise in capital expenditures

we

year,

of our farms in 1957 consisted
farmers by the taxpayers of
this country. While precise
figures can not be cited at this
time, it is hardly less than certain that they would be
more
impressive by a substantial margin for the years
1958, 1959 or, if present programs are continued, in 1960.

some

we

machinery

bound

capacity

Bureau in 1957 under the

the gross national
product
of payments made to the

I

if

level¬

a

year.

present,

causing'inflation and

to

is

recovery

operation, it certainly has not slowed down yet.

.

to • shift
ders

an

com¬

*

recovery,

in the future

to slow down

The

ponent, of farm gross national product is Cash Receipts
from Farm Marketings and CCC Loans, which must be

regarded

about

the

down

rence

of the components, in fact the main

of

|ran*e„t LpCenmSe^"are ®no"t

page

.

past year or two.

Subsidy in Farm GNP

present

liying .will start its upward climb

thinking of the White House as it is to Capitol Hill.
One is obliged to wonder how much longer the strong

r

from first

-

near

ever,

at

any prospect

At

|

requiring the farmer to stand on his own two feet as the
rest of us have to do, and this remedy is as foreign to the

large part of his livelihood. The facts of this situation are
figures describing them are a little
difficult to extract from the confused and confusing ac¬
counts of the Federal Government. They are there, how¬

see

ing off in the last half of the

curtailed, I am afraid the cost of

subsidy program. The only realistic, in fact the only pos¬
sible remedy for the situation into which our agriculture
has fallen is of an entirely different order. It consists of

all but incredible. The

could

lull

somewhat the cost of our

political position of the farmer will succeed in persuading
the rest of us to continue to provide him with a very

expenditures

year,

ground than are those Congressmen who would "dump"
large quantities of wheat on foreign markets for what it
would fetch and thus reduce

Despite all the talk about hold-

.

version of essentially the
is also on much stronger

done, merely another
of procedure. He

often
same

-

this year. I would rise in Federal
not be so con
cerned about the

agriculture to other pursuits. In one degree or another
this shift has been under way for a number of years, but
the shift is not proceeding nearly rapidly enough. Time
will be required for the process and hardship in one
degree or another is inevitable. Whatever may be thought
on humanitarian grounds of lending
a hand during the
transition period, it is obvious that public policy or action
which tries to block or unduly retard the shift is not in;
the public interest.
.•
•-

lies in the fact that the last wheat
the largest in history"

control production

crop was

.

Thursday, May 21, 1959

.

by the taxpayers of the land!
:
'ture^heAaet
^FedeS
It should be obvious by this time that the only
solur".!,spending.; is still rising and will
tion of this problem is a vast shift of manpower from
continue to rise over the rest of

It

We See

As

farm products in 1957 was: provided

factors that produced

Continued from first page

.

we

successful

hope that in the years ahead
able to reverse recent un-

are

favorable trends.

Over the rest

-

0f ^is year, however, I doubt that
our

export balance will make
^

^

any

consumer

figures

demand.

But the

weekly

insured unemployment
show a steady improvement, and
personaT income is moving ahead

very
If

on

rapidly.
things

go

as

I

sumer * spending.- in

expect,

the*

con-

fourth

beginning to greater^ "co n t d b ution' to the "level quarter of this year will be at an
an upswing 0f business
activity than it is at annual rate 15 billion above the
in business expenditures on plant
present
present, providing strong upward
and equipment.
Business capital
'
. impetus
to business activity,
spending dropped by over $6 bilGovernment Spending
• ..•-i*
lion during the first three quar-The fourth factor ^affecting the
Resuming Posnvar Growth Jtate
ters of 1958, and for a while there economy over the remainder of
Summing up, I expect the fol-

see

we

are

now

the first signs

of

J

„

^

did not
for

seem

quick

to be much prospect

in this important segment of the economy,
a

Now

recovery

all the

news

is beginning

.

the year will be government. This - lowing changes between the first
an area in which, unfortunately, -and the fourth quarters of
1959t

is

there seems no end to the increase. Inventory buying, down $1 bilIn spending.
" lion: business capital expenditures,

*>"♦

■

Number 5848

189

Volume

.

.

The Commercial and Financial Chronicle

.

P' up S3.5 ^billion; net exports, no a rise in business capital spending.
^
change; Federal, state, and local and would also tell us that the
government spending, up $4 bil- increase in national output in 1960
lion: housing expenditures, down cannot be as great as would be

.(2327):

Warns Banks

.

v-1

1 billion: and
up

to

up

chases,
total

$465

h-:

this

billion

of

mate

^

pur¬

billion

$20

of

rate

national

A

;

rate: of

billion

$485

in

Miller
!

close to returning to

very

$1" has
fsn

shown the high annual ayer-'

rate'1 of

■

^'v:

increment

growth

age-

business

■

of-4%.
activity

k

be'

-

approaching

full

today. In making this
Bankers

Association

securities

it

importance attached to the safety of
or,

a

and leadership ending this

:

The £ current
......

in
—

environment

.

tech¬

But

lack of desire to serve.

does

full

mean

Burgess & Leilh to
Be N. Y. Exch. Member

menace.

community
—

new

appreciation
of the need to preserve the
strength and stability of the fi¬
nancial
system
as
the arteries
through which the blood of indus¬
try, commerce, and agriculture
flow and through which economic
progress may be nourished."

when this occurred in warning banking can ill afford to find
itself in similar circumstances again. He is convinced fear of
chronic inflation is unfounded and counts on wise
judgment

billion .^annual rate, $7 billion
above the- first quarter of this
year., I do; not expect an appreci-

ignored. The toll
—
™

were

Mass.—Burgess &

BOSTON,

able recovery in our exports, so which banks are meeting strong that subsequently was extracted Leith, 53 State Street, members of
that our ..net export balance is competitioh from other financial in failures and the destruction of the Boston Stock Exchange, on
likely to be very small. Federal institutions. reflects the infla- values was shocking, and it took May 28 will become members of

\Voukl afecnnean that the economy
>• mean

would

exists

American

for that matter, the safety of a
well managed bank which provides asset quality
and liquidity. The banker recalls previous lessons from history

deposit in

rapidly than at the end of 1.959.
Business capital expenditures will
its post- probably have reached a $49.5

trend line—a trend line which

war

that

the

vicious process

a

the lesser

notes

government

«fourth quarter of this year would
mean that our economy had corner

•;1*

of

which places little premium
financial conservatism and strength. To illustrate this, Mr.

on

in the fourth quarter of
Inventories, toward the end
of 1960, are" likely to be rising at
a
$2.5 billion rate, less rapidly
that at present and slightly less

the

head

mean

economy

fourth quarter amounts to an 'annual rate of $485 billion.
^
r >

the

public wants

served—with

be

niques, services, and facilities. It
wants banking to encourage eco¬
nomic growth and personal wellbeing.
Conservatism
does
not

said to find competition rough under

are

of / environment

inflation is

warns

1960:

the

kind

statement,

factors; here are my projections
the principal segments of the
*

esti-

in

output

the

an

to

progressive

be

to

and resourceful. The

adhering to high standards of safety and sound princi¬

ples of management

starting from
employment level.

know that 1960 is

for

output in the
my

we

Banks

were

:On. the basis of these and other

the

to

we

election year.

in

increase

an

first quarter of the year,

;v

(

thus

and

total

Finally,

output, of about $20 billion

Adding
ir

•

in

if

case

less than full

a

These changes sum

increase

an

purchases,

consumer

$15 billion.

the

unwillingness

Yielding to Inflation Bias

on

31

Om-

a

long time to
confidence

and

rebuild
upon

strength the New
which eco¬ with the

Stock

York

Exchange

acquisition of an ex¬
growth
could
again
be change membership by R. Willis
resumed.
Leith, Jr. Partnersof the firm
are
Royal W. Leith, George S.
Cannot Afford to Repeat Events
Burgess, - William M. Breed,R.
"In
my
opinion, X American Willis Leith, Jr., Albert W. Moore,
banking can ill afford to find it-" and Gordon Peel.
nomic

,

t-

self

in

again...

similar

We
to

surance

ments
rther
Further Ahead;'

Lo^ks

■

X

i

:

<

There is

V 1960

^

If, the economy moves Xin^the
fashion I. have projected, total
national ; output in the fourth

■■ XX

and

important difference

an

the

quarter of 1960 will be running
a.t tan annual rate of $508 billion.

of estimate; for

kind

which

estimate'

I

"forecast"

-;ii'tion"A

the

and

Ihj

pprtnnmv

will be 3 million more employed American way of lite.
very

little excess plant he continued. "It creates all sorts

happen

ly, be strong upward pressure

■■"•'J that

v

the

is

;

of

-

the greater

introduction

of

sorts- of X new

influences,

recent attention

to this chronic problem
'some hope that we will be more

*;l{e<*[Ye in;curbing inflation in
the future than we have been in
the past.

the future

further

likelihood

all

^

into

to guess,

the

on

'

■

-

*:; :

■t

stood

financial system. If
our
environment

•»

ml

•Thore

the

problems

face

we

vidual institutions and
can

be

indi¬

as

bankers'

as

real-

more

^To sum up my remarks-the ^XlnferSete^a^Zr IT
^uslhess outlook for 1959, and also
! yd nromis
be made
-I960 is excellent. I feel-that c

g,am
we are assurea of .rapidprogress more.effective n

new

.

p

s a

can

toward ou
j
p^nle
serving.and strengthening the ro e
of ban!ki g; m
e
system of private enterprise.
nff

=

Past

be

can

wesson*

^

■

^lied a pro^tion^ de

' seem to ^ to indicate prosperous

business conditions and
e,lcoura^ing a(ivance jn
ly to Iook -like m the future,-if nomic output.
it pdrforms as it has under similar'
"' •
•
situations iiu the past4 ■'The econ^
§£■ m>
scribes what tlie economy

f

■'y.y

iio

i'sTike-

most

a
our

eco-

can

ue

from
u«iu

learned

i&uuvu

-111hi

perform somewhat different-

may

ly,in

consideration

jyj'J

ence

than

past

t

experi-

a

new

M

sports

found them-

This

said

is

not

in

today.

spirit

to

is that today so little premium is
Placed on financial conservatism

Horace A. Leche, Jr.,
Vice-President; J. R.
Leche,
Treasurer,
and
Manson
Harris, Secretary.

have generally

obligations
been regarded as

Friedman

^strongest and safest security
They have invari¬
a

premium

Ocean

over

name

other types of investment. Yet it
is anomalous that about the only
investors

willing to buy

N. Y. —Harvey
conducting a secu¬

is

rities business from offices at 3100

in the world.

ably commanded

Qualified Investors

<

BROOKLYN,

uovernment

states

Parkway

Forms Inv. Service
Morris Kaplan is engaging in a

who want to be abIe to convert
them

short notice into other

on

securities business from offices at
149th Street, New York

384 East

The absence of credit risk City, under the firm

in obligations of our government
have little meaning when
inflationary bias exists. The

seems t0
an

same

attitude

on

the part of in¬

is

t

no

wonder

then

that

The value of. a projecsimply that it
"Wfist we might expect on

feature,

balancing the
growth and
expansion with standards of safety
in a competitive environment that
protects the public interest. An
banking

the

is

tells

us

therefore

A. G. Edwards Office

Avenue under the management

institutions that adhere
Joseph D. Shinn.
stan(jards of safety and

^
sound principles of management
sound principies of management
^

(Special to The Financial Chronicle)

under the kind of environ-

ment that exists today.

If

an

in¬

vest0r does not want the safety of

is

and

of

one

desire

for

a

ATLANTA, Ga.—Jesse C. Bugg,
and Mat¬
J. Yates have been added

Howard B. Harman, Jr.

why should
want the safety

government bond,
any more so,

thew
to

the

age^ bank that through conserva^ve management provides asset

quality and liquidity that

staff

Walls

of

(Special to The Financial Chronicle)

KANSAS CITY, Mo.

Why should he not turn to risk
investment in shares of American

Adler

C.

and

John

though it admittedly does not take
account of new factors which may
make the future different from
the past

: '
number'
iiuiuuci

.

'

already know a
aireaay
K.nu\v
d

We
we

of

u^

l1nJ)i0r^r know, for instance, that
tkmgs about ^^xy®af
I960. We
it

be: the

7Xlneed fXe

*.s;

seco

(

our

the
•y

labor

crease

—at

force

yeartol-

in

1960

will in-

by about 1.55c. ' We know
do if my estimate

the

in

19591 is

economy

will




Stock

course ^d to golfers have distorted relationships in flationary environment negate
ihe aSset values and between financial the factor of safety for the time
Committee instituted the being given to the public interest being,
short play contest for senior mem- institutions. Less attention is
The Thing to Do
berswh° wish to avoid tong waits in the safety and strength of
"I
am
firmly convinced that
crowded

upper

course,

Both tournaments will be held on
hQll

_

Arne

Fuglestad, Burns Bros. &

Denton

Inc

chairman

Fieltd D«'

of

the

rc"

,

financial

instiutions

claims against them

^

th°

Mavnard

FREEPORT, 111.—Ledyard Long
correct—
start the has become connected with Mvrl

fears

of

persistent

inflation

our

SACRAMENTO, Calif.

afthe^expS^of^theXiext

unfounded. I believe that wise

unlet

fellow

the comfortable but highly

dS"^mption tLt S
—in

was

only

a

few decades ago

period of rising prices and
expansion—that banks were being
chartered by the thousands.
Financial
powers
were
extended,
a

important. Economic needs of the

vin

E.

Stein

in

Investments, Inc.,
Both were part¬

Parker,
& Company.

ners

effectively with the threat

of further inflation.

Ray¬

become associated with Er¬

1414 Broadway.

fe uniounaea. j Deneve mar wise
Aidgment and leadership on the
to deal

—

mond Parker and Albert J. Wester
have

country over the years ahead

are

Wester, Taranto

Now With Hayden,

~

I believe that

Miller

(Special to The Financial Chronicle)

'

play a significant
CLEVELAND, Ohio—Frank M.
role if it repeatedly and consistHill
has become associated with
ently—through public pronouncements and policies — challenges Hayden, Miller & Co., Union Com¬
merce Building, members of the
the inflation doctrine.
"Lest I be misunderstood, how- Midwest Stock Exchange. He was
banking

can

.

Management standards and capital
& Co., Smith Build- strength were not considered too ever,I should emphasize that such
,

(Special to The Financial Chronicle)

in

ciaims against uiein. msieau, ui-

"It

W Um fViaynara
(specmu to the financial chronicle)

VVIin

Instead

the

^

of the

With Mvrl D

and

Mid¬

Exchanges.

Join Ervin E. Stein

using the 9-nole snort course,

on>

Holliday

staff of H. O. Peet
10th Street, mem¬

Parker and Wester

bo?e

1960 at not far from capacity D. Maynard
levels.
This would suggest to us ing.
year

slon and t0 compromise stanaaras

We

oopulatioir

least We

of * business
that
7

d

We can

S^fiid recessfons
-

-1

fol--

second

lowing a mild recession.:

ft*

-

will

/

0

—Richard

M.

of the New York and

bers

v

Associates,

Join H. O. Peet Co.

assure

him the availability of his funds?

west

kr

of

Walls Adds to Staff

temporarily find the competition

ity and capital protection are not

"llfXr ^

of In-*

JONESBORO, Ark.—A. G. Ed¬
wards & Sons has opened a branch
office
at
108
West Washington

^carborougn, N. Y. separate 0f safety. That is what is happen- considered as important as banks
The ono«mi< ic
tropnies and prizes will be ing t/iHav. Thp inf.prmit.tent infla— nnnci^or* fViom? tviq answer is
in? today. The intermittent infla- consider them?

past.

tion

name

vestors Service Co.

of a deposit in a soundly man- Inc., Candler Building.

need

Bond Club of New York will hold

firm

the

Investors.

govern-

have joined the
& Co., 23 West
the

under

of Qualified

^e,

The entire history of American

||Q|||| CIlID Fl6l0 U3V
As

should lead one to believe.

^

w

m

_the particular period under /

"estatnore ofan lnflationaiy bias

selve? in difficuity. The same rough
warning should be echoed

Executive

pr^fn^tive medicine.

g

.

| f/Q uOlf I OUmGVS 3t

changing so that it

often

too

President;

,

;

provoke alarm, but in sober reflection upon the importance of

t

{if!

KlX -omy is always

Formed in Dallas

pn-

vestors permeates, to some degree,
all sectors of the financial struc-

History's Lessons

"Lessons

uses

J\inTuvgr--UprlS
usually

Capital Ventures

banking

preserve our

.

he long run

is^howevevone^ij^^of-nof do I believe by any means -past history, arid banks and other
estimate;y^hich can bermade
• that we have solved all our eco- financial institutions that ignored
happened
m
such
past
whlhT-vSnv
forUb^iness n°mic Problems- years, however, what happened in such past
The odds during
\vh.ch h«s.
next;/two
penods

-7

!

clearly,

stand

-

l'

that become under-

and

associations

attitudes i many; o£ .which ; the
economist over the remainder of this year,
could not possibly anticipate. In
Present indications are that
/short, an economist cannot.make//f?"s.Pr®^1^s win be;continued 111
a
forecast, in the strict sense,of I960. I am not so inveterate an
the term, for more than abo'uT one optimist as to imagine that we
-year into she future.}:' ifrv'
keeP Somg up with
•
V.
JXnever^airecession in the future,
products,

new

scured

only after it is too late,
raises Among these are its effects under¬
on the
we

although

ririces,

that' he has a
good clia^e of
anticipating most of'the factors
which are likely to affect national
output.
It is obvious, however,

to>i

present.

'capacity. There will, unfortunate- of distortions that are often ob-

in

S
'■%

Inflation is a vicious process,

There

at

WcriOri

last

help

.

than

a

over

the

k-e^rijs

economist's-will be

an

since
that may

,

liquidity and to maintain public
DALLAS, Tex. — Capital Ven¬
confidence when needed, but we
tures Corporation has been formed
cannot depend unduly upon them.
with offices in the Fidelity Union
Lee P. Miller
The
traditions
of
strength arid
Sap, Antonio,
Life Building, to handle corporate
safety we build and preserve in
Texas.
finance, special situations, negotia¬
Mr. Miller, who is President of our institutions on behalf of our
tions of original issues, and oil
the Citizens
Fidelity Bank and depositors, employees and stockand gas transactions.
* <'
Trust Company, Louisville, Ky., holders will furnish the utlimate
,
,
,
Officers
are
Miles F.
Leche,
n

■**$>'<* the labor force. There danger currently threatening the

"riroiec-

attemp^to g^ss what will
tn

crisis

^

persons

word

forecast is

x a s

reas¬

arrange¬

Unemployment will be normal for asserted that in his opinion, in- test of our survival as^
constitutes the greatest vate banking organizations.

the -word

tinguishingt-between

Te

institutional

prosperous"times—between 4 and flation

j'f: -describe this difference by dis-

>•*.'

th e
a

just finished making for the .rest
of this vear
Economists usually

r=

?

1960. \

between the

•

■

c"' r;-

-

condition=::tdward the^end^of the >
year

;

*

,^expenditures will continue to push

look with

may

«h->

•

oircumstances

a

philosophy does not imply

an

formerly

with

liams & Co.

Livingston,

Wil¬

and Financial Chronicle

The Commercial

our

Continued from first page

the Most

Difficult Time to Invest
It

was

income

burden of

This throws the

bordering on dismay
that we came to the conclusion production upon the fixed income
portions of our portfolios, and to
in April of 1959 that it would be

sionment

to rerun our earlier
vertisement. "NOW Is Always

ad¬
the
Most Difficult Time to Invest":
Seldom has the outlook for busi¬
timely

been

ness

We have

clear.

more

problems to solve, of course, but
there are fewer problems than in
many other years. If only the Dow
Jones industrial average were at
450 instead of 630, we might feel
that
our
investment
problems
were a little easier than usual and
within our capacity to solve.
We are confronted with an un¬
derstandable economy and an in¬

ratios

maintain.

can

we

equity
Relying

the

dictates

extent

some

adequate
preferable to "skimming

bonds to produce an

on

income is

cream"

the

the

from

common

portfolio to serve the same

stock

nomic machine.

Questions

When

Year

1958—The

Were Answered

Let

look

us

now

bearing

the dynamic strength

on

in the stock market. We learned a

about

lot

when

1958

in

economy

our

good many long-awaited

a

effect

tainties

Cannot Boycott the Stock
Market

common

until

market

the

boycotting

stock indicators return to

normal. Even if we decide never

buy

share of stock at these prices,

a

be trustees respon¬

still

will

we

to

sible for billions of dollars

already

equities. No one has

in

invested

of them.

,

.

all

eliminating

of

uncer¬

the

future

making

and

and cut out the fat

paid
applied

having

for

the

party

Republican

great satisfaction and assur¬
from
the quick turn and

draw
ance

the

tration,

of

and

serve

Board
the

of

were

which

all

resolved in 1958 were

We learned
economic
recession of those proportions was
not sufficiently strong medicine to
cure
inflation. There was an in¬
to

complex they may be, we

must

identify

to

try

and

them,

before another

would

bring

lower

wages,

to

our

forcefiilness

enough

with

economy

have

ciable .effect.

to

appre¬

an

and

other
of
the

It is true that there were

lightly.

nature, we: may
reckon with them for a

permanent
to

long

time

to

come.

different investment

An entirely
policy might

be appropriate in that case.

tion. It will be seen that many of

them

such

factors

There

appear

stock

the

we

(2) The 1958 election made the
more
predictable for in¬
in another way. It indi¬

future

vestors

to

believe

afforded

continue

to

that

equities

by

than

lower

be

cated

would like.

This raises the natural question
whether the steady growth of our

is

tide

to resume its upward course

If

there

were

be

to

a

Demo¬

cratic

victory in 1960, it would
necessarily mean
that the
"spenders" were back in power.
The Democratic party at present
is evidently determined to slough

not

off

unfavorable

that

title.

How¬

population ever, a buyer of stocks is prob¬
possibly justify and in time ably safe in assuming that the
solidify the market values of to¬ next Administration at least will
day. I hope to show that we are not reduce the federal expendi¬
fortunate to live in a period which tures and is more likely to in¬
closely approaches a second in¬ crease them.
economy

and

of

the

can

revolution.

dustrial

Successive

scientific breakthroughs have for¬

tunately created products, mar¬
kets, and opportunities which give
some
industries and some com¬

panies
that
In

a

of

growth
stock

the

these

times

rate

to

match

market.
of

change

and

opportunity, the emphasis on se¬
lectivity must be greater than
These

ever.

are

"management

as

rapid changes

not

times

usual,"

can

for

since

be as harmful
to one company as they are help¬
ful to another. I hope to point out
a
few of
the developments
or
trends which might prompt us to
change our choices among com¬
mon

stocks.

The

two years ago,
many
major corporations were
worrying about the "stretch out"
in federal spending for defense.
You may recall that this delay in
payments for defense contracts in
late 1957 was said to have trig¬
(3)

than

Less

gered the recession. The appear¬
ance of the first Sputnik brought
a

quick end to the "stretch out,"

and

there

sibility

Investors
with

appears

of

an

ever

do not

the open-end mutual
worried
about the day

the chance

that

to

will

than

rather

government
and

be

cut

back

in the

though

as

of interest rates

eventu¬

bring this situation; more
nearly to normal,,but up .to the
moment the disparity persists. In¬
terest on short or long term debt
is deductible in a corporate in¬
tax return, and even

come

wealthy

corporations prefer to borrow fo~
this reason.
Furthermore, the

Thursday, May 21, 1959

.

.

single breakthrough. We are the

a

benefactors

of offering
and various types of
purchase plans seems to

widening practice
stock

sale

the

against

some

which under their terms are even

for

themselves.

common

Capital

alone affect him in
he is wealthy, he
prefers appreciation at the tax
rate applicable to capital
gains
gains
two

taxes

than

rather
a

If

ways.

subject

dividends

to

higher rate of tax. In extreme

this policy is carried so fa
actually avoid

cases,

individuals

that

dividend income and have a pref¬
for

erence

paying

companies

a

dividend. This surely tends
prolong this period when com¬

poor

to

stock

mon

extremely
Capital
effect

the

dividend

yields

are

low.Y:
gains taxes have had
of removing from the
holdings of low-cost
individual hands. Al¬

market large

in

stocks

investment managers
customers that the avoid¬

though
tell

we

our

ance

a

few

sufficient

alone,

years

.

the

opportunities of a long lifetime.
Atomic energy constutes a break¬
through, and there has been one of
proportions in antibiotics >
other drugs.
In the field of ;
plastics and in petro-chemicals, ;

major
and

have

we

None of these

has

velopments

constitutes

what

seen

breakthrough.

fully

been

a

;

de¬
ex¬

ploited, and in most of them the
great .opportunity is still ahead.
These

usual

as

ness

times for

not

are

manage-';

for

nor

■

busi¬

opportunities ft
afforded by scientific break-u
throughs are available only to in-J

ment

The

usual.

as

venti ve men and resourceful

and

imaginative managements. If there
ever was a

in

ment

,

time to stress manage¬

choice

the

of

corporate

is now. In buying*
equities at these high prices, the
burden of proof is on us. We must

securities,; it

guarantee; ourselves all the op¬
portunities and all> the leader¬
ship which now exists.-.rI*
The

in

active

are

■

of companies which;

names

taxes

to retain

.

listv whieh
combed

the

fields ,-of

elec-

has

been:

repeat-the *

carefully

so

.

by ; every; professional 4

,

buyer of equities. It might be
more helpful if we were to discuss
developments
or
trends Which

.<

might Change the status quo either
favorably,: :or .unfavorably. - Most J
investmentpolicy / is ; based
upon

" the ' expectation; of change,

listed below are some of; the

and

changes which .would bear watch¬
ing: • •:
"-;pi

7

White-Collar Labor-Saving

.

-

vo

MDevices
Z

(1.)*ftThe entire field, of

labor-Jr

saving devices will continue to be;,,
a wonderful source of investment

opportunities. \Commencing, with
machine tools and other manufac- *

turing devices, it is now shifting
into- What might r be called: the "white-collar labor-saving" field.
This has included IBM and other

punched card systems which are

is rapidly

gains
reason

capital

of

never

liquid than common stocks

choice of
investment..

his

in

a

known that I need not

The

stocks

had. in

have

we

managements tronics, atomic energy, drugs, .and ;<
of additional petro-chemic a 1 s ■ - are so - well /

shares.

ations

of many.

In the field of electronics

stock options

of

buyers

equities. It seemed quite probable
to
many
of us that the public
would one day lose its confidence

wideningtheir

of

area

usefulness. It extended into pack¬

remains that aging and mailing devices such as
It was both surprising and re¬
many holdings are becoming more the Pitney-Bowes postage meter.
assuring to observe that there was
never a
month during the sharp firmly glued to the bottom of the
There is now a development in
box with every point of increase
decline in the stock market when
which both IBM and Eastman Ko¬
in
the
Dow-Jones
averages.
A
the open-end mutual;,funds were
dak
will participate which will
not sellers of equities. For a while, long list of fine stocks such as supply an electronic librarian for
General Electric and DuPont were
microfilm files. This will be a
they did not grow at a rapid rate;
but a "run" on the funds never undoubtedly available for sale in godsend for major corporations in
1939 when the taxable profit was
which the endless functioning of
developed. We learned from this
that investments in mutual funds small, and might even have been the filing system has come to re¬
pried loose from their owners at
are not speculations, but are held
semble the machine that made the
often in

more

lieu of savings ac¬

counts, perhaps as a nest egg for
old
age.
Investment managers,
therefore, may assume that stocks
in

funds.

mutual

taken for

in

are

strong
not be

granted two years ago.

(7) Prior to the recession, there
concern
about the
common stock buying by pension
and profit-sharing funds. It
seemed
possible
that
they too
might shift from buying to selling,
their

that

and

effect

upon

the

the records indicate
pension funds continued to

the contrary,
that

buy stocks throughout the period

fact

of the

level

the

in

stock market

likely to be sold in 1959 than ever
before, and every added point in
the averages merely deepens the
freeze.
This may not represent

investment judgement,

good

it is nevertheless a fact.

All this leads
we

may

us

*

but
~

to believe that

higher multiples

earnings in the future than they
when we were first learning

lizing factor in the market.

significant that all seven

is

factors

mentioned

have had the effect

above

of increasing

the prices of common

stocks. Fur¬

thermore, several of these factors

likely to persist for several

seem

years

at

least,

is

which

a

very

long period of time in the lives of
investment managers.
The Tax

Structure

and the

Stock Market

There
more

bearing

foreseeable future.

of

(4) When the recession began to
gain momentum some 18 months

rate

are

on

stocks
tax

a

number

of

lesspermanent

or

other

forces

the demand and supply

and

bonds.

The

corpo¬

structure, together with

personal income taxes and capital
gains taxes, has the simultaneous
effect of limiting the supply of
stocks while increasing the de¬

stores

in

well

as

as

trends

These

them.

beyond

gone

of'

outside
are

strong,

in the laborcertaintyo The

and further progress

saving

area

is

a

odds favor investment here.

~r:%;

(2) You may have read recent¬
ly of a Continental Oil tanker
transporting liquified natural gas.
have to learn to live with it. I do
This is a very significant achieve^
not mean that it will not fluctuate
ment which may have far reach¬
downward, for a thorough-going
correction is long overdue, but it ing results. Contrary to general
belief, the liquified natural gas
seems more than likely that good
is not under great pressure, but
stocks will sell at
of

the

In the field of

have

be faced with a chron¬

did

It

salt!

we

ically high stock market for so
long a period ahead that we shall

of the recession and were a stabi¬

of

retailing,
the selfservice
market
and are seeing
new
uses
for vending machines
sea

Paradoxically, they are less

1949.

was""similar

stock market would be severe. On

the

stock,

a

reckon

expenditures for armaments
defense

of

when the mutual funds would be

recurrence.

have

while

a

rates would

dividend

1958.

to be no pos¬

early

desirability of common ago, we were all wondering
stocks' having a full share in the whether the controls and safetyrewarding opportunities of today devices which had been built into




from

disappointed in the failure of the
recession to cure
inflation, but

more

for

relationship

the

individual investor too is
wage-price spiral
guided strongly by tax consider¬

mistaken. If the

funds,

rarely will

con¬
offering of common stock.

an

seemed

It

in the

conferred

have

we

company:

sider

certainly

were

hands—a fact which could

decisive.

were

high.

chronically

reason

yields

will

reason

inconclusive, but the 1958 results

prices
is

major

landslide.

to be forces work¬

or

ing in the market which will keep
There

con¬

medicine," was
for the Democratic

sidered "necessary

strikes, drought,
a rainy Easter.

as

winter,

cold

Administration

the

clearly that the political
flowing strongly toward
the Democratic party. Many elec¬
tions
are
closely contested and

investment

not transient

are

to be no
recession,

However, there seems
question but that the
which

a

.

Accordingly, I shall mention a
number of these forces, some old
and some new, making an effort
to appraise their probable dura¬

we

and cash in its mutual fund shares,

If many of factors in the outcome
these forces which are working election, including integration in
to increase the prices of stocks the South and dissatisfaction with
seem
to be of a semipermanent the Lebanon and Quemoy affairs.
have

lower prices and

us

Many professional investors,
watching
the
mushroomlike

apply the brakes

the fortitude to

they may persist. If they are of
a temporary nature, we can weigh
rather

medicine,

bitter but much needed

were

whom

trust

be prej udice

to

to slow
further the

and

boom

most of all to determine how long

them

an

considered

generally

was

sellers

how

that

terruption in the wage-price spi¬
ral; but there is now an evident
possibility of its resumption. If we
thought that the recession, which

Administration has

or

favorably.

dismay

our

interesting discoveries of the year

course,

to

capital funds by borrowing
rather than through the sale of
new
stock.
Even
though their

questions ally

the

of

Not

(5)

Re¬

Federal

the

preferring

for

reasons

raise

to

economic boom. It is they are acting as though they
seldom that a Congressional knew what to do in the light of
election is more one-sided or the outcome of that attempt.
(6) The absence of a "run" on
more understandable.
It was the
avowed purpose of the Adminis¬ the mutual funds was one of the

bound

matter how many

No

level.

still con¬

strong recovery which is

growth

this

in their opera¬
right to

every

brakes to our

.

duty

are

have

We

tions.

to study fight against inflation. The pur¬
the stock market and all of the pose was worthy, but the penalty
forces which have brought it to was severe. It will be many a year
We

well,

up

reached. Investors may have been

penalty

two

have

spending
for consumer goods was surpris¬ shares may
be quoted at extra¬
ingly steady, and managements ordinarily high multiples of earn¬
were
quick to trim inventories ings, industrial executives with
held

comes

In the November elections,

down

suggested that we should sell

deny that our

now

this summer, it would \ start
about therbighest level it

(1)
the

will

shook off the recession
with impressive ease. Personal in¬

predictable.

more

Unhappily, we cannot rid our¬
selves of this confusing problem

one

economy

answered

at the events

past year which have had

the

ol'
a

the

by

are

we

managements

Corporate

tinuing.

purpose.

comprehensible stock market. All
of
the
old
financial indicators questions were finally answered.
This was
the year in which
read "sell," but we find ourselves
many uncertainties/were resolved,
tempted to buy. It is disconcerting
and the results of tests became
to
find the instruments in our
known. We may not have been
plane going haywire, and we are
pleased with all of the events of
tempted to land until the sense of
the year, but at least they had
vertigo passes.
We

While

them.

for

mand

would prove to be effective. summarizing some of the longMany of the forces which in earl¬ lasting forces which may account
ier years had turned a recession for the level of the stock mar¬
into a depression
were
present. kets, it would be well to mention
number of effects of our tax
Not since the war had there been a
such a test of our improved eco¬ structure.
No

performed under stress. nearly precludes the achievement
of a comfortable dividend return.
with feeling of disillu¬

machine

period of 25

over a

economy

years

Now Is Always

a

.

(2328)

32

investment game. This means

the

that
of

more

than

must

we

face

the

prospect

limited dividend returns

we were once

able to acquire.

is

merely insulated so that it can¬
take on heat and evaporate.

not

This technique may open up mar¬
kets

for

gas reserves in.
the world. It may

natural

remote parts of

bring gas to coastal cities through¬
out the world where gas

Scientific

Breakthroughs

Create

unavailable

or

has been

in short supply.

Markets and Values

(3) One change which might be
equities as disappointing to investors would
be
any
technological
develop¬
an investment medium simply be¬
ment which
rendered the tele¬
cause they are selling at unaccus¬
tomed levels. There will prove to phone dial system obsolete, as all
be many stocks which will justify other telephone systems have be¬
come
because of aggressive re¬
these prices
and amply reward
the investor who was able to se¬ search and scientific progress. The
We cannot abandon

lect them. We

very fortunate
period of con¬
current scientific breakthroughs.
Breakthroughs create new mar¬
kets, new products, and new op¬
portunities for profit. Former genaerations have been lucky to enjoy

to

be

are

living in

a

telephone systems of our country
have been marked by self-imposed
obsolescence which led to heavy'
capital expenditures and the di¬
lution of their stock. If the elec¬
tronic switchboard were to prove
to be another

outstanding success

Volume 189

Number 5848

.

.

.

The

Conniiercial

and Financial Chronicle

(2329)

of

costs

afforded

After
years, there

plants, and will not build
them simply because they are new
and
exciting. The plants which
they
have
already
constructed
are largely experimental and
in¬
tended to

be

Bell
Telephone research,
it
might suggest that the stock had
reached another plateau and had
not become a growth equity.

(4)

disappointing
hope, at

many

is

at

last

least, that the airlines may reward
the patient holders of their stocks.
As jet airliners have brought us
to the sound barrier, at which the
industry must pause for a period
of several

airlines

years

or

a

last

at

may

decade, the
be relieved

of the burden of aircraft obsoles¬

They

cence.

have

been writing
rapidly and buying
better ones so steadily

ed to railroad

basing

mercial airplanes

three

times

goods

the

27%

manufactured

exports increased only

while

our

imports

were

up

77%.

Competition is keenest in prod¬
ucts manufactured by skilled
labor. We are feeling it in sewing
machines,
typewriters,
cameras,
radios, and electrical generating
equipment. I scarcely need men¬
tion foreign automobiles. S6me of
our
own
corporations have met
the problem by setting up plants
overseas, which now ship the fin¬
ished
product
to this country.
However, this is a serious prob¬
lem for certain
and

of

able that

we

industries

our

companies, and it

seems

prob¬

will suffer the con¬

sequences

of reequipping Europe

before

finally enjoy the bene¬

fits

we

of

a

wealthier

stronger and

world.

(6) Changes are coming rapidly
in the oil industry. The trend to¬
ward nationalization

and renego¬

tiation has not yet run its course.

development which
buying
domestic oil companies. Nothing
is likely to hold the foreign oil
off the market for long, and that
This is not
can

a

be avoided simply by

would

possibly be true even if
Russia obtained control of major
supplies in the Near East You
may know that Russia is building
two oil pipelines behind the Iron
Curtain, leading westward I un¬
derstand

toward

Czechoslovakia

Austria; and it seems prob¬
able that oil in Russian hands
would find its way to the market,

and

as another weapon of
ternational economic warfare.

perhaps

in¬

(7) New methods in the making
of steel and in the refining and
fabricating of other metals have
created sizable

new uses

for gases

of many

kinds. This includes not
only oxygen and hydrogen, but
also inert gases for which little
demand existed in the past. These

developments
more

than

one

have

rejuvenated
and will

company

have further effect in the future.

(8) We must watch closely the
building boom which has been
the backbone of our economic re¬
Residential housing starts
some 40% of all con¬
and they are running
ahead of basic demand, which is
related to family and household
covery.

represent
struction;

formation.

There

is

perhaps

a

greater risk that commercial
building will outrun demand, as
•those of us who see it now in New
York City

have

a

fear it will. Buildings

longer useful life than au¬

tomobiles, for example, where the
hangover from a buying binge
lasts about three years.

(9) Atomic power is an exciting
topic for scientific discussion, but
there have

been few

investment

opportunities to be found in this
development as yet. The electric
utility companies will be very
hard-headed

about

the




were

that

capital

we

and

the belief that

propel com¬
automobiles.

or

ever

reason

a

to

these

promptly.
The

import, it is the trend
which matters. In the past five
years, our

there

very

(10)

for¬

we

it in

assumptions
were wrong, some old investment
habits would have to be changed

foreign Competition Will Hurt
eign competition, which we as a
matter of policy have aided and
abetted since World War II, is a
trend which we must not ignore.
Although we still export nearly

see

assumptions
on

atomic power will not

believe

of

any

locomotives, but

our

investments

If

intensification

hands.

for

utility industry and in ship¬
ping. It might some day be adapt¬

ment

The

own

watchful

templated. We expect to

ings nor dividends for the stock¬
holders. There may be an invest¬

(5)

be

the

and

opportunity here before too
long in an industry marked by
very rapid growth in
revenues
and passenger-miles.

atomic

indication that atomic power may
be utilized in areas not now con¬

our

earn¬

of

keep this research and

should

We

are

that there have been neither

costs

development in their

off airliners so
new

fuel

and

power

which

Future

for

Coal

One old investment habit
we
should change is our

prejudice against the coal indus¬
try. The use of coal in steam elec¬
tric generating stations some years
ago reversed the long downward
trend of the coal industry. There
is trouble in the industry at the
moment, but long range forecasts
by both scientists and corporate
executives predict a steady and
ultimately tremendous increase in
the utilization
of coal deposits.
Even when atomic power provides
half of all the energy require¬
ments in our country, it is ex¬
pected that the demand for coal
will

be

several

times

what

it

is

There will be investment
opportunities in coal properties
and in the makers of coal-mining
equipment. Before buying the coal
railroads, however, it would be
well to study the progress being
made in long range transmission
of electricity and in the "wheel¬
ing" of power from one service
today.

area

to

the next.

To summarize what I have tried

upward.

Fortunately, the yield
by medium maturi¬
today, and it is often

for

to

Trust

even

ties is liberal

possible

choose

bonds

of

length appropriate to the trust
count involved. It would

mistake to

a

hold

a

ac¬

probably

bonds

of

a

longer maturity than necessary to

"What is the
a

correct

trust fund

conditions?

We

33

equity ratio price basis.
Governments are
prevailing quoted in terms of thirty-seconds

under

believe

at

the

Company that there is

no

ratio which is right for all ac¬
counts. Nor have I meant to im¬
one

ply in my discussion of a balanced
fund that a 50% ratio would be

because of the very narrow

differentials which

are

price

maintained

between the bid and offered sides
of the market, but even the prices
of Governments are governed by

the yield bases on which the re¬
today. I believe that we spective issues are entitled to sell
long ago, corporate are carrying, on the average, a in relation to the
existing interest
bonds yielded roughly 3%
and somewhat higher figure than that curve.
common
stocks perhaps 5%.
A in trusts under our supervision.
trust
Now, how are the yield bases
fund
invested equally
in We do believe that there should
and dollar equivalents arrived at?
bonds and stocks therefore had an be some common stock
buying The
overall return of 4%. We are not
yield bases will reflect pre¬
power in reserve, in relation to
far from the reverse of that situa¬ whatever
vailing interest rates for other
may be an appropriate
securities of comparable quality
tion today, with bonds approach¬
equity ratio in each trust account.
and maturity. This is logical and
ing 5% and stocks 3%. Perhaps
In brief, I have recommended
we would
simple. However, converting ther
be wise to accept this that we hold and
utilize the
situation and continue to talk a soundest and
yield basis into terms of dollars
most promising com¬
is
the
crux
of
the
problem.
4% return from a balanced port¬ mon
stocks, not merely the highest
folio. If we were to adopt this at¬
yielding ones. I would rely upon Briefly it amounts to this: when¬
ever you purchase a thousand dol¬
titude, we might be less unhappy fixed-income securities to fatten
lar bond at any given price, you
about the yield afforded by com¬
up current income, keeping ma¬
are
mon stocks and a little less
buying not only the face
prone turities as short as possible while
amount of the bond, but a series
to make the mistake of
reaching serving that purpose. These may
of obligations comprising each of
for income in the equity portion not be
startling recommendations,
the various coupons and the face
of the list.
but they differ widely from some
amount of the bond. Our author¬
I
have
not
deliberately side¬ of the radical proposals which are
ity for this statement is, in addi¬
stepped the threadbare question, been made by others today.
tion to what has been discussed*
a letter from the president of ther
Continued from page 3
Financial Publishing
Company
stating in part that "the value of
serve

your

Not

purposes.

correct

too

a

What

Many Bankers Do Not Know

bond is the

worth
to

of

of

the

sum

ize

and

invest in bonds.

what

we

buy

ytfien

we

do

present

computed
maturity and the present wortlt
a

semi-annual

coupons." This is

periods of subnormal loan demand

of the

principal

series

of

the

pet theory of
ours; this is a statement of fact by
the final authority on the subject
no

and whether

dealers, bankers and
or not, that
bought
yield.
On repeated occasions I
and sold for a long time and that
have been informed by some very
is the way they are going to be
highly respected bankers and in¬
sold in the future. I think it would!
vestment bankers, too, that the
be interesting to draw a compari¬
yield basis on which you buy a
son
between a bond investment
bond has something to do with
and
a
direct reduction loan aai
pressure
to increase income has price, the coupon rate, the term
most of you will be very familiar
been built up
and maturity is in years, and it also makes allow¬
with the latter.
In April, 1958*
extended under the worst possible ance for the reinvestment of in¬
bond prices were high and yields
set of conditions.
come as received every six months
low. The Treasury 4's due Oct. 1*
through to the final maturity date
1969 were selling to yield 3.10%.
Using Agency Obligations
increased

liquidity through¬
out
the
banking system. With
most banks having surplus funds
available for investments, it fol¬
lows
that bond
prices will be
high, actually far too high, to
permit maturity extension on a
favorable
basis.
However,
the

this

confusion

In

a

general

centers

of the bond. This is

a

way

around

lot of

non¬

bank examiners like it

is the way bonds have been

which produced, a dollar price of
stocks, we
Secondary reserve items should sense. The reinvestment of income
"108.65. In other words, an 11%high and be restricted to Direct Govern¬
received from a bond is definitely
likely to remain high by any for¬ ments, call loans, repurchase not a factor in
year 4% bond on a 3.10% basis
determining the
mer
standard
of
measurement.
cost $1,086.50.
Now the investor
agreements, etc., primarily, but yield or price of a security.
This means to us that dividend
was actually acquiring a thousand
earnings can be augmented
dollars in the face value of the
yields will continue to be rather through the inclusion of moderate
Problem of Premium Issues
bond plus 23 semi-annual
cou¬
unsatisfactory on prevailing mar¬ amounts of Agency obligations.
However, the most aggravating
ket prices.
*
:
When you do this, be careful that problem is that of buying, bonds at pons of $20 each or obligations of
Uncle Sam aggregating $1,460. For
In spite of this, we believe that
your Agencies have maturity dates premiums.
We must, of course,
there are companies which will which fit in with
this, he paid only $1,086.50, but
your seasonal realize that as long as most in¬
live up to the prices of their com¬
demands for cash. This does not vestors elect to favor bonds selling practically everyone, including the
bank examiners would have. the
mon
stocks and justify the con¬ mean that
Agencies are not mar¬ close to 100, we are going to have
fidence investors have placed in
feeling that a "substantial pre¬
ketable, for^ they are, but an im¬ a lesser demand for bonds selling
mium" was paid and the premium
them. These will have to be par¬
portant part of secondary reserves at prices either substantially above
constituted something of a risk.
ticularly well situated companies should comprise the
type of secu¬ or considerably beneath 100. Ac¬
The truth of the matter is that he
and ones which are exceptionally
rity which is readily convertible cordingly, it is necessary to bear
well managed. The problem of into cash at a time when
paid only $702.05 for the bond
you and this market factor in mind and the
itself.
Now
let us suppose that
selecting these companies has be¬ every other banker in the country realistic
portfolio manager should
Joe Doakes walks into a bank to
come very difficult for investors
is trying to raise funds.
Under and must take full advantage of
make a loan and the banker agrees
and at the same time very im¬
such market conditions, the Fed the tendency of many investors to
to
lend
him
$1,086.50 for 11%
portant.
will probably be assisting through avoid
securities
selling
many
If we are right in these prem¬
years at a 3.10% rate.
Of course*
buying Bills and aiding directly points above 100. It is logical that
I know enough about bank rates
ises, then it would be wrong to or indirectly the market for other if
you can step up yield 20 basis
to realize it might be closer to
"skim the cream" from our equity
very
short-term Governments. points through buying a bond sell¬
10.3%, but let us keep it equiva¬
portfolios. It is tempting to listen Agencies, however, might be dif¬
ing at 115 as against one selling at
lent to the bond rate. The banker
to those who would sell all stocks
ficult to liquidate "on the wire" 100, you must be prepared to make
would receive a note from this
yielding less than 3%, and buy and at a satisfactory price.
a similar concession in price if you
customer in an amount of $1,460
only those yielding more than 4%.
I
think we
can
sum
up
the should want to sell. However, in and this would be recorded on the
It seems to us that such a policy
the
meantime, you have been
liquidity discussion by stating that
books of the bank as an asset in
would shift the odds heavily
a
banker must always maintain earning $2 per year more in in¬
that amount. The difference be¬
against those who adopted it.
How
what he knows will be an ade¬ come per $1,000 invested.
tween the $1,460 and the amountcan you possibly go wrong? There
Don't Throw Away the Book
quate degree of true liquidity. If
credited to the man's account, or
are also some extremely interest¬
This is no time to throw away this is done, there will never be
$373.50 would appear as unearned
the book and go overboard on any need to sell longer term issues ing angles in connection with dis¬ discount.
count
obligations, but this
common
stock policy. One very in a period of tight money and at
Now why is it that some ex¬
discussion will be restricted to the
persuasive reason is that common a loss. Neither will there be any
so-called premium, issues because aminers will have no objection to
stocks provide mighty little in¬ need to convert part of an exces¬
a bank recording this loan to
an
sive
secondary reserve
position they pose a basic rather than
come, which is something trustindividual as involving an asset of
into the income producing section special problem to bankers.
men are supposed to produce.FurBefore anyone can purchase so- $1,460 with an offsetting unearned
thermore, stocks are by no means of the portfolio in a period of easy
discount entry on the books, but
money. The only important losses called premium bonds with con¬
on the bargain counter, and fully
and so will
fidence and be willing to stand they will criticize,
invested equity positions are best a banker should ever take in his
many top management men and
suited
to
bargain-counter days. portfolio are those which he takes up and argue with those who offer board
members, the recording on
We believe that it would be pru¬ voluntarily in order to capitalize completely unjustified criticism of
such procedures, he must know the books of a loan to the govern¬
dent to have some buying power on a tax situation.
ment of $1,086.50 when it is se¬
Before we get too far into the the facts regarding the purchase
in reserve at these levels. Finally,
cured by direct negotiable obliga¬
of a bond. All investment dealers
selectivity has become more diffi¬ manner in which funds are in¬
tions of Uncle Sam in the amount
and bank investment officers have,
cult in this period of rapid change vested, I think it would be a good
of $1,460. There is absolutely no
or certainly should have, a bible
while
the
penalty for unwise idea to establish firmly in our
sound basis
upon which anyone
which they refer to as a yield
choices
has
become
unusually minds exactly what is entailed in
This
is
the
Bond
Value can possibly criticize or even com¬
the purchase of a bond. We all book.
heavy.
ment upon the purchase of a gov¬
This brings us to fixed-income know a bond is a negotiable piece Table as published by the Finan¬
ernment bond for $1,086.50 when
securities and I have in mind pri¬ of paper generally in a thousand cial Printing Company of Boston.
Yield basis is the
common
de¬ they would consider the purchase
marily tax-exempt and corporate dollar denomination and attached
of
bond
values and of a similar obligation of an indi¬
bonds. We believe that there is a to it will be a sheet of coupons nominator
place for bonds in most trust ac¬ bearing various maturity dates. practically all municipal and cor¬ vidual, involving a definite credit
counts even though the long term Beyond that point, however, I am porate obligations are offered on
Continued on page 34
trend of interest rates is slowly afraid that most of us do not real¬ a yield basis rather than on a
to

say

believe

about
that

common

they

are

.

34

The Commercial and Financial Chronicle

(2330)

Continued from page

33

bond

"

the

Not Know
Earnings

What Many Bankeis Do
About Improving Their
being a perfectly normal
banking function.

fundings when the Federal Reserve Board is pursuing an easy

There is .only one answer to this.
There is a complete lack ol under-

™°"ey,J°'K

risk,

as

standing
t0

thp

National A«?f
Nstionsl As—

something which the
soeiation of Bank Auditors

and

Comptrollers can do a great deal
about.
The NABAC can
break
down
this ridiculous
prejudice
through giving
to the real facts.

ZlTv
™b J

the

and creatin£ "bcrai

the part of many as

on

Remember, a bond account is
like anuautomobile—you have to
•

i

.

nat

to

want

vnu

J™-,1!' jf you want to get
adhere.

Yield

Spread Trap

Associated to
^

^

considerable de-

a

^

^

WW1UV.1UU11,....

wi^

adequate^publicity
It can lead in

^?f e^UCa n^
it

gree
t^e maturity spacing of
a p0rtfolio is what is described as

bank officials and

«-phe Yield Spread Trap." A study
varjous price trends which
jiave existed in the bond market

u

big enough and strong enough
demand that hank examineis

is

to

acquainted with investment
facts before they offer unjustified
comments regarding ponds_ purchased at prices above 100. This is
something which 110 individual
bond portfolio man can possibly
fight on his own. If we, as secube

past 20 years and also
yiat 0f ^he various major trends
t^e

over

jn

adjustment reveals
the
big mistakes
were brought
to light at certain
points, such as the sharp decline
Government bond prices in the
rity dealers, attempted it We Spring of 1946 and again in the
>would be faced with the bureau- last halt of 2955, However, the
critic thinking that we had an axe groundwork for the serious portto grind. We would get nowhere jolio
problems created by these
at all. This is something that must market declines was really laid
be done by an organization and I
many months or years in advance,
feol very strongly that NABAC is
perhaps the only organization in
the

banking field .capable of hanthe job. Now what does this

dollars

in

mean,

cents?

and

FWkly, I don't know, but it could
be a huge amount. An additional
10 basis points on $100 millions
over a five-year
period would
mean $500,000 and I .don't
need
to tell you $100 million is only a
fraction of total bank investments.

Maturity Spacing

Next let us cover the problem
maturity spacing and this is a
subject that is highly provocative
of

See

S

Avery

fTiSiirin^

ea/»h

Going hack rfuyeais or
tjrOingoacK 30 vears or

banks

so

of

some

so^oanKs

_

,as g0

as

maturities was
arrangement

.any.

ijpweyer, under modern conditions, this .theory

do

can

more

no

than guarantee average results as

refund each maturity into
another 10-year obligation as it

yoju

.•

^heonly

thing that lifts

a man

Treasury Department offered in
1954
irrespective of whether it
fitted their needs or not, was the
clincher.

.

example, we had the
debacle of June 15, 1958 which is

•

As

still

final

a

with

All

us.

need

we

to

is to go back to the third quarter
bankers were given

^nd 6were

helping

banks

the option of

earning

spread

in

buying either a oneyear, five-year
or
10-year 4%
security at par.
Because of
nervousness
which very under¬
standably accompanies
a
weak
market, most obligations which
rolled

matured in 1957 were

into

the

into

other

4s

mid

When

due

Aug.

short-term

over

1, 1958 or
offerings.

1958

arrived, June 15
maturities were exchangeable for
11-month iy4s or seven-year 2%s.
The 4s Aug. 1, 1958 were refunded
with the l%s due Aug. 15, 1959.
At this point, portfolio managers
who
in

1957

five-

refused

and

or

ultraconservative

been

had

10-year 4%

themselves

with

a

take

to

the

issues found
very difficult

choice.

They could either stay in
a
one-year position and cut in¬
come
sharply by refunding into

Themis take

95 %

"ot made

"whan

was

the bank 2*s

rather in the two or three preceding years when increasingly
amounts

]arge

of

were

money

earnings

conservative

forced

bankers

the

to

most

assume

^uge risks in order to obtain the
minimum necessary volume of operati
income;
7,

.

:

,,

.

Another excellent example occuFred durmg
When bond
pucf?
SH/'% w 3
yl^.?s
as
high as 3V2% were readily

ayaUa^ve

u10tf2h

intP0

,2* fi
JvATSo-fi ♦£!

SL huge amounts
maturitieSgThe ?ateS
sh0rt-term

oblige-

one-year

issues

were

of

1954
these

on

relatively

|?tractivT anTllrTfIw bankels

ttSS?® With SUCh prof0und in volumenotice of the sharp rise
took any of short-term obliga....

xix,

Uiquidity

must be

Rema^W

Remaining funds
concentrated

in

should

any

care

not

or

^

municipal list

^2VGr

lowed

_a.ndit

earnmgs.

an£ yields

When
are

a

W3S 3 time to buy income and
voluntary

operations

to

prices

high

are

forced

you are

avoid

an

over-

liberal. Another form of

speculation.

came

Treasury
holders
seven

In

1954

extremely
of

year

money

easy

Department

and

bethe

offered

maturing issues the
2y2s Nov 15, 1961, the

fUy nine~year 2y2s Aug. 15, 1963, the

A

h

i Si/ far 21/88 Nov- 15> 1960 and the l%s
vh°ldmff
Feb- 15^ 1959 in raPid succession.
mark Here
again

St f« fSflmbil

refunding

securjties. The majority reasoned that
2954 maturities would be so huge
that the Treasury would have to
j,e very

10-year

is widely fo merely restricts

low

handful sensed that

S0T 1fues concentration in short-term

funds should -be concentrated.

j?*

a

un(jertook

greater measure of apPea
than others of comparable
maturity. If is m these that your
a

^ions. Only

"he thiS
be

issue

one

md

hqldmg

taken

If

££ flVi'irfhS

most

inkers

took

^ what

was offered and within the
space of a very few months many
year or so portfolios which/had been top

bojetoinedfor another
nSi
lalp' ?UC^ A heavy with short-term obligations
exercise °a were converted into lists tragically
inVCry
*

guide

would

be

to

pass




up

re-

which

the

lead in
improve '>their

to

.

The wide;

power.

yield -after-taxes

net

between these two issues •js -soqrie-

thing that

will

continue in¬

not

definitely and we believe it. refleets primarily a popular, demand,
for
the
higher
which may not
be .justified, in,
every case by a true necessity for
current
operating income.
.Cer¬
tainly any bank in i ppsitipii to
forego immediate operating,- in-;
for

come

years can

earn

eliminate

the

additional stock

in

of..-the

This-might
ndecb to. sell

sorqe

$ases.

and

comptrollers can
valuable assistance jto

of very

the

few

very

some

issues.

Auditors

a

substantially-more^

coupon

even

be

of

favoring/

through
lower

matter

a

portfolio

.

selling at a discount ;v
they are quoted on
market. We believe that; *
of these discounts are prac- V

many

tically forced

on the market due ;
excessive subscriptions by cer-- *

to

tain institutions enjoying the ben¬

efit

of

We

don't

Tax

a

of-town

and

think

Loan

the

than he feels he

more

and

we

tion

as

Account.;'
out-.;.;

average

banker subscribes to

in

can

any
handle

:

fairly good posiprimary dealer in Gov-

are
a

a

4
/

ernments to know where the bulk
of* the

discount

offerings

from. The Tax and Loan

4

come

Account

♦

.

devised with the idea that it
would be mutually beneficial4to
was

the

the

of the

facility. We

the

desire

i
1

Treasury Department and*, to
banks who elected to make

use

-

4

-

for

?'

-

afraid j

are

profit is encourag- |4
ing operations- \vhich cannot pos^/j'
sibly
be
considered
mutually;
beneficial to the Treasury and tov<.
commercial banks. We believe thecontinued
Tax

and

abuse

the

of

Account

Loan

Treasury
can
lead;/.'

to other arrangements which
detract from bank earnings.

may

>

4 f

>

Rights values traditionally exist'!
in a fa:irly strong market where* ■
the* trend is toward higher prices''''
whereas in a declining market, ' •

rights values seldom, exist.

.

'

::V 4

'

in

man

,

,

overbalanced with five- to nineissues at low yields. Then the

year

-

.

obviousfeand

io9vfpr^range

maturities

-.

in

area

take

issues

new

disregard

codpletely

'ava'age

paying an advisor a fee for

another
could

overall

.

decline

in

the

market

after

mid

1958, the basis for the difficulty
was really laid in 1957. We think
we
are
correct in characterizing
the plight of the banker forced
to make up his mind between an

very,

if

little

Federal

sible

that

earnings
would

in

an

should

be

to

nail

extremely attractive rate
period as is reason¬
not to be caught with too
short-term position.

heavy

a

Banks Pay
In

recent

Out Interest, Too

pense

has
a

years,

risen
much

there

greater

has

de¬

interest

in

not

case

time such

v$iose

true

have

tax

rather

losses

that

as

having

r

in

part

determining

'

what J,

losses should be taken ,
and while some are .not too well 1-4
profits

or

versed

their

;

in

■

views

will dominate

influence

least

matters, Vj
or at ', operations.- ;

investment
tax

Many of those present may think
it

a

ridiculous

statement

for

,;

irresponsible
to say that a

and
me

:

•

relatively large number of banks
in? the country have never fol-';,

tax rate .and losses in an-,;recovering 52% of the loss in the form of tax savings.
4,
or

bracket,will

to

either loans
be .perfectly

may

fmany of these banks
a Bad Debt Reserve

income with Uncle Sam
stbod 52% of the-cost.

gains

other

.

not saying that these banks:;
have never taken a loss or a profit *
,

1

on

am

securities, but rather that they. >:
never followed any basic poi'

have

designed to capitalize on the:;'
these reserves 27% differential in their favors '
of losses and - not
Many of these banks are not smalld:
being abl£ to restore them withbanks, but institutions! 0'
52 %- being * recoverable taxwise country
listing their assets well up in the P
is just
.as|post|y as not having the tens of millions category. This, toopv-

However; Jusing up
to

-

take

icy

q&re

reserve..

is

issues

that

tant

this that lowed the practice of taking prof- ;
are its in one year at a 25*% j capital^.;

in the higher coupon Government

presumably on thh theory
if you are paying 3% you

-

,,

built-up

of

'

as

burdensome

on

investment It

'

institutions

the-52%

it

absorb

out

the rate, of
interest paid on time deposits has
become an important factor in the
operating expense of the.average
commercial bank. As interest ex¬
veloped

It is at a^
bankers

find

;4 For" Profit

Perhaps the most important area»

cases,

be just

unless income could be increased.

conditions

~:

overall, in-which auditors and comptrolhigh as ler.s can cooperate with the bond
if the bank did mqn is in that of taking pn
large a position and losses. Many play an imi>or-v.

some

may

be the

or a seven-year

Actually the thinking under such

'

income reported for
Tax purposes. It is pos¬

any

not have quite as
2% in tax
exempts and as long;as noas being caught in a yield-spread
serious
losses^ .develop, no. great
trap. The differential in yield is amount of hariifi
is done. However,
so wide that he will very probably
there
are
definite -credit
risks
take
the
longer-term/security. built in to
every loan and mortr
The tragic part, however, is that
gage portfolio in the country and
when the one year rate and the
these will come to
ligbt sooner
five year rate were identical at
or
later
in ^any
downtrend t in
4%, the decision was generally to business. Sorife showed
up iri the.
take the one year security because
relatively brief and mild reces¬
there was no point in extending
sion of 1958.

11-month 114

able and

fear

is

NABAC

of 1957 when

down

requires ' no
executive- ability.
Nether is there any justification

This

do

for as long a

ing the proceeds of maturing issuesjtxto.a 10-year maturity. This

the open

words, figuring the invest¬
maturity, a banker who is
position to forego immediate
operating
income
will
actually
odd 32% more to his net earning
power through favoring the lower
coupon
2V4S. Reducing
this
to
dollars and basing the calculation
on
a
$1 million investment over
a
three-year period, net earnings
after taxes would
be, according
to our calculation, $20,847 greater
from the 214s. This is after./ taxes.
a

.

niiit

an

voluntarily in 1953. Then their
willingness to take whatever the

all

immediately

in

.

|or

wi Pacin£ 9

depreciation which developed
really be traced

1955-57 could

to the failure of bankers to extend

other

ment to

.

ySo broad mark" ts Tor the placed in very short-term obliitrl
gations and, as short-term yields
r«nri?iiin
Pftn^T continued to shrink, the pressure
Portfolio. Under such condi-

nf
of ^
a

in

Thursday. May 21, 1959

.

,

,

none

fivo

pro¬

a

.

cooperating
In the matter of economics vcr;
with him to determine; just," how sus
rnathematics, we believe that, t;
far he should go in adding to his,
D/4S or l%s, 01* they could extend
both /, are
essential to successful
municipal,
and
housing' portfolio management but
maturity seven years to obtain a state,
when:;'
2%% coupon. Those who made authority securities, the income the thinking of an economist dieFor example, some bankei s the extension at that time now from which is free of all Fedferal
tates portfolio policy,
the bank' ;
followed the practice from 1940- have
■.
very heavy losses. There are Income Taxes.
may • be
betting on the econo- 51
f of investing some of their new cases where banks were forced
mist's ability to see into the future
,
deposits for income in the cusy Very frequently,
we
will en¬
to cut their interest rate from 3%
counter situations where, the loan when it adj usts its portfolio in line. ;
tomary bank range of from one to 2% as a result of the
shrinkage volume of a bank will- be suffi¬ with his thinking. On the other ,
to 10 or possibly even one
in income. On the other hand,
ciently low to permit, and 4n some hand; when:mathematics are given,;.5ifar ranSe. They did not find those who were
i^erhaps less con¬
themselves m any hopeless earn- servative in 1957 and refunded instances almost demand*, that at-least equal or greater weight, 'i}
P°sltion in 1945-46. Oth rs, some part of their maturities into part of the Government position the changes which arevmade in the
be converted into municipals in portfolio - will iusually
represent^;;
the five-year of 10-year 4s have
forced
to
order to develop fully the earning capitalizing
upon
opportunities,';;
had a constant flow of earnings at
the very
•
liiower of the bank. In other cas^s, provided by changes which have
great price risk inherent in the a full 4% rate and no important we find that • management 1 ,is already taken place.
In other
depreciation exists on the invest¬
gone to
the other extreme a^d words,-the gamble as eliminated. ;
?1/2S Sept. 15, 1972-67 and made ment.
Thus, while the problem has added so
heavily to the tax
to produce yields was brought to
! Taking Profits and Losses
light with the
/
exempt list that there--is:

SrWht fwohi!r Zo'Mrf

'

vpar

portfolio

riiat

into

went

market

longed downward trend. Much of

.

Alternate Ifear Bond Profits
!>Aim1 Losses... j :

an area

such

as

in which

an

organization

NABAC could conduct ail

educational

n*

*

convince
r,
must collect more than
that to
management and board members •
One otier consideration is.that
make
that the
money.
In
some ' cases,
earnings being thrown ''
of
takingi-boifd profits and losses
where loan volume has not been
in. approximately alternate years. away through lack pf appreciation ;
too great and the volume of time
of what can be done in this direc-r :
We will .cover this further at a
tion may very well represent & ■ ^
deposits has been high, manage¬
later pokfe btit if a. bank has< no •
ment
has
probably
had' little
deficiency in capital at some fu-: appreciable amount of .income
choice but to buy higher coupon
ture date which will have to be
corporation
issues irrespective of other con¬ subject. to the 52%
elimiiiated through sale of new1* tax, it is ^effectively barred from
siderations.
stock and a consequent dilution'
following!, tlm highly., profitable in' the interest of
present stock-«• 4
By "other considerations," we
prbceduro.. .f..v
holders. There areiiiany phases to-.
refer to the net yield after taxes
Treasory'Tax and Loan
on the various issues in
tax program work and we have1 ;
any given
outlined two examples to provide- *
^cc^unt Abused' '
'
maturity range. An outstanding
The TaX and Loan Account, over an' idea of what the
example of this is, a comparison
potential is.1':'
of the net yield after tax from the years (has been a
very profit¬ As stated earlier, it would take a':
the 4s Aug. 15, 1962 with that of able
opefatloh." for commercial great, amount of space to illustrate '
the 2J/4s June
Of late, however,'many all of the various' types of opera¬
15, 1962 callable banks.
1959.
The
former yields
1.86% bankers who have fpllowed. the tions which can be. engaged in. de- >■
after tax, whereas the latter
yields practice o| subscribing to all the. pending upon, market conditions.
2.45%.
In
dollars
this
means
financing Hhrough the Tax and As a_ "concrete example, we show d
$24.50 per year on every $1,000 Loan Accqunt have become some¬ the difference in overall earnings !
invested versus only $18.60.
In what concerned about practically between the banker wrho had one
•.

program

to

.

A

Volume

Number 5848

189

million 2%s Nov.

.

.

The Commercial and Financial Chronicle

.

his

through

books at par on June 20, 1957 and
has the same investment to¬

possible

to

produced

Reserve

in

1960

day and the banker who

was

15, 1961

on

still

this

block-

tax

of

bonds :in

utilized

typical

involving

operation

a

exten¬

be

bonds

then

and

to

shortening of maturity and rein¬
vestment in definite

ligations

in,

strength.
the

period

a

The

banker

million

one

market
who held

».

shows

top

par

profits once during
intervening period now has a
amount of $1,105,000 2V2S June

;15, 1967-62.

ing at

of

reserve

feel

criminal

to refuse to modernize their think¬

ing and NAB AC
them to their

bring

can

some

ours

to

the
do

we

an

Bad

houses

of

above

of

by

and

bank

the

of

the

lowing

Bad

to

be

made

He thinks much more

but that it will build more jobs in the long run.
?
breaking steel shipments in May will carry the indus¬
try to its biggest quartern history, "Steel" said. Second quarter
shipments will be more than 25 million net tons. Best previous:
23.6 million shipped in the second quarter, 1956.
May shipments of 8.5 million to 8.75 million tons will set a
monthly record. The record is last month's 8.3 million tons. June
shipments will dip to 8.3 million because: (1) Steelmakers will
have to start banking furnaces towar dthe end of the month if a
walkout seems inevitable.
(2) Wildcat strikes may hamstring
of automation,

such

Record

the

as

and

.

simple

calculations

in

mathe¬

the

case

tax

operations and the Bad
Reserve, an educational pro¬
gram can be inaugurated
which
will lead to a material improve¬
ment
in
the
earning power of
many

liberal

banks

throughout

production.
(3) The month has fewer shipping days
(4) Transportation problems will delay shipments.
Last week, steelmakers operated their furnaces

.

.

'

The final

Continued

price composite on No. 1 heavy melting grade
of steelmaking scrap declined 34 cents last week to $33.33 a gross
ton, lowest in over a year.

from

5

page

in which NAB AC

area

influence

•can

better

bank

earn¬

The State of Trade and

ings is in that of coordinating the
transfers to the Bad Debt Reserve

with

portfolio operations Tor tax
purposes. This may appear to be

a

think

the

will

for the

process

Debt

quite

it

grasp

in

moves

direction

this

are

en-

Boston

transfers to the Bad Debt Reserve
tend

Strike Would

:*

build

to

capital funds and
stands 52% of the
is perfectly true
is possible to do an even
job with
a
little
more

Affect

All

cost.

it

but

better

walkout,

show

of

basic recommendations for

our

be

same

amount

1958. Those

;'■. ■■■ ■f

'

■

-

however, is v going : back
into the. past. Accordingly, we il¬
lustrate
a
program
substituting
.-bond losses: for a transfer to the
This,

the

Mp

setting

~

1959:.and

Reserves-in

Debt

Bad

•

:4

of.*,' guaranteed

^willing to-reduce operating earn¬
ings for 19-59 by $11,100 can set
up a
Bad Debt Reserve in 1959
.of .$23,125.
This would be;; the
^customary procedure. However, if
'.instead of. taking .the transfer: to
;the
Bad
Debt . Reserve,
the
a

■

„of $23,125 at a net cost to stockholders of-$11,100, he can set up
"what we believe can be termed

and

Bad

Debt

in

Reserve

set

to

amount

up

,

-overall
:

earnings

the

not

would

no.

ings,

are

.transfer

charged with
to

the

.'approximately
.made

enly

return
1959

the

because

48%

of

for

of

bond

the

taking

$11,100

$23,580,

I

increase-no price 'increase this year, is expected to

the "social visit" David J.

bank

stands

a

and

Thus,

in

loss

in

net

flowing




this

Threaten U. S. Markets and Jobs
In Long

•

.

•

T

A year
tons, or

:

for

■

of

■

.

Industry Developing Record High Inventory

%

expects to reach the steel industry's June
contract deadline with its highest mid-year new car inventory in
The auto industry

history, "Ward's Automotive Reports" said on May 15.
f •
"Ward's" said that with auto production the week ended May
16 continuing to run ahead of record-high sales, the April 30
897,000-unit new car stockpile is earmarked for approximately
930,000 units by the end of May and an estimated 940,000 by
June 30.
■
" ' '
J'
Previously, the June 30 new car stockpile totaled 696,000 in
.

1958, preceded by 734,000 in 1957 and 695,000 in 1956.
that the inventory, which caused hardly a

"Ward's"

ripple of
excitment on April 30 when it set a new month-end record for
the auto industry, promised to take on deeper meaning with ap¬
proach of the summer season and a possible bog-down in the steel
commented

industry.
"Ward's"

*

combined production of cars and trucks was
exactly 200 more ve¬
hicles than the record of 162,243 set in the week ended May 9.
t
said

scheduled for a
The

1959 high of 162,443 units,

program

car

of 135,268 units, up 0.4% over

earlier week's

(134,763) and 54.8% above the corresponding week last year
(87,407) was only 0.5% off the 1959 peak of 135,953 established
Jan. 12-17.

#

J'>

only 1.1% below preceding
week's 1959 high of 27,480 and soared 62.2% over the correspond¬
ing week in 1958 (16,755). The recent week's effort, according
to "Ward's," was the highest truck-making effort since Dec. 3-8,
volume

Truck

of

27,175

was

cause

a

about

a per¬

jobs to U. S. steelworkers.

All

4

steelmaking nations will strain to make more of the metal
available for sales- to the U. S. just to get the import door open
wider.
Foreign producers' prices would porbably rise during a
steel strike, but their quotations will still be under domestic levels.
long walkout could "educate" American users
about steel fronrjabroad has U. S. producers worried but not
enough to make "major contract concessions in the negotiations
now

a

going on. They think

a more

the May 16
overtime.

week as 20% of the

nation's auto factories scheduled

routines, however, including Chev¬
Buick-Oldsmobile-Pontiac at Atlanta and
Dodge and Imperial in Detroit.
v
There were some four-day

Baltimore,

at

12.7% Above 1958 Week
distributed by the electric light
and power industry for the week ended Saturday, May 16, was
estimated at 12,684,000,000 kwh., according to the Edison Electric >
The amount of electric energy

Institute.

metalwQtjking magazine warned that import inroads could
permanent loss of markets to domestic mills and

manent loss uf

(27,870).

Electric Output

Strike

If we have a "60-day steel strike, steel imports may hit 400,000
tons in' the second^month of a walkout, "Steel" magazine predicted

The

a

be

'

■

production is based on average weekly production
1947-1949.>i "<-: ■ ■ - '+1 /!*•;
*Index

rolet

v

The fact that

cost.

McDonald, steel labor chief,

May 13. During the first 30 days, imports would hold at
240,000 tons, the current monthly rate.

of

could

h

linqjii his talk. The speech is designed to offset the

*r

earn¬

reserve

$49,100

4

the

Steel Imports. May

Reserve
If

.

wage

on

effect, of

since

offset each other.

.

had last week with President Eisenhower in New York.

affect

Debt

Bad

.

.

lay it

the bond profit and the charge to

-set, up

.,

hopes to regain the initiative in its public
Blough, Chairman of

a

1960

for

,

„

•

"Ward's" said five car makers—Ford Division at seven plants,.
Edsel at Louisville, Chevrolet at Flint, Pontiac at its Michigan site
and Rambler at Kenosha, Wis.—planned Saturday assembly in

lor

:

■

would

case

:\i' Mri Blough, chief architect .of the steel companies' strong stand

profit flowing
earnings, the banker could
•charge earnings with the same
amount, $23,580, in order to set
;
up a
transfer to the Bad; Debt
it

That wouldn't be the

Corp.; speaks this week before the National Press Club
Washington. +
.' ; \
.

into

and

,

*

rate (based on 1947-1949 weekly

1956

in
.

this amount of net

Reserve

than in

"selected" walkout.

or

Estimated percentage for this week's fore-

U. S. Steel

With

I960.

* 166.5% of steel

relations battle with the union when Roger

offset to an operating charge
similar

a

"peacemeal"

a

Steel management

•

earmark this to be used only

as an

rin

"divide-and-conquer"
national metalworking

30rpossible strike deadline, simply won't be as high as many
had hoped-for.
•
\ \ ,+;
.
'

users

*

'a guaranteed profit by the end of
'I960 of $23,588 net after 25% tax

a

had a
that of most other producers.

during the 34-day strike.

year—barring

-June

bond loss

further

*

the

.

J«»
-Meanwhile, steel demand and consumption are exceeding all
expectations, even excluding that resulting fromisrike hedging.
A secondary wave of new orders has hit the mills. This business
represents steel for delivery in the third quarter—strike or no
strike.
Steel users figure that it's smart to be on the books in
view of the unexpectedly high rate of steel use.
Inventories by

.

profits for 1960. A banker who,is

'bahker takes

94.4% of Capacity

production) was *164.7% and production 2,646,000 tons.
ago the actual weekly production was placed at 1,523,000
*94.8%.
+.

ever

(2) There is less certainty that steel labor would honor congiven at the outset of a strike.
"If thefe is a bitter strike, we'll probably be closed," said one
mill that- operated last time.
4
V'+j+.j
"Iron Age" said some mills—those not under contract with the
union—are certain to operate regardless of a strike's duration.
Others will escape at the outset but if the strike should be a long
one
they are almost certain to be hit. A few companies would
operate at the sufferance of the union,^especially if the mill's
financial structure is shaky.
;•, ;f
' v;

-fa

ys-

6.7

tract extensions even if they were

..

only $12,500 for a $6,000 charge to
earnings. ■'':

on

Steel Institute announced that

month ago the operating

A

Auto

It operated

this

$27,500 reserve instead of one of

,

on

Age,"

Iron

contract.that expired one month, after

-

set up-a guaranteed profit
who did this got a

ously

4-

harder this year than

* -(I) More mills have June 30 contract expiration dates
1956.
Best example: Kaiser S,teel Corp., which in 1956

up

fu&fher bond losses and simultane-^
in

ana

capacity and 2,631,000 tons a week ago.
Actual output for the week beginning May 11, 1959, was equal
92.9% of the utilization of the Jan. 1, 1959, annual capacity of

147,633,670 net tons.

Producers Than

,

the Bad Debt Re¬

in 1957 and the
be used to absorb

held

serve

iron

cast is 94 4 %,

+11.8

+Iron Age" said that an all-out strike would leave fewer mills
operating than was the case in 1956. It gave these reasons:

one

"the 1957-58 period. We urged that
the transfer to

"The

to

1,073,000,000
704,577,284

6.3

weekly...

thought and. effort. We cover this
in reasonable detail and

according

-f"

to

0.5

—

Stoppage

+■
A steel strike would hit output
before—unless steel labor decides

this

of

$12,278,846,876
1,223,586,651

More. Steel

1956

the government

0/

1958

1959
$12,219,312,615
1,300,292,994
1,200,000,000
751,809,637

that these,.

couraged by the fact

American

capacity for the week beginning May 18, equivalent to 2,674,000
of ingot and steel castings (based on average weekly pro¬
duction for 1947-49) as compared with an actual rate of *163.8%

centers follows:

Chicago
Philadelphia

their

and

money

May 16—

New-York
.

law

by

of

principal

Week Ended

■

■

maximum

the

to

Reserve

permissible

Steel Output Based

tons

year.

Most banks are in the
of building up their Bad

'.readily.

,

The

operating rate of the steel companies will average

problem but
average
auditor or

comptroller

Industry

clearings will be 3.2% above those for the corresponding week last
Qur preliminary totals stand at $24,573,277,131 against $23,815,945,321 for the same week in 1957. Our comparative summary

rather complicated

I

of

at 95%

The magazine's

Coordinating Bad Debt Reserve

;

than May.

capacity and turned out 2,690,000 ingot tons, the largest production
ever
recorded.
The 12 district steelmaking ingot rates varied
between 92 and 105% of capacity.

the

country.

senses.

ownership plans can be desirable.
+
planning is needed to handle the effects

He believes worker

sponsorship

proper

relatively

He thinks both labor and management are

great deal of statesmanship. On other issues:

a

questions the value of a productivity index to wage negor

He

are

or

an

Rations.

in which bond

years

:

fol¬
official hands-off policy in the steel talks, according

"Steel" interview.

a

showing

Debt

earnings

more

goods and services purchased.
Labor Secretary James P. Mitchell sees the government

of

working from facts
supplied by the Finan¬
cial Publishing Company of Bos¬

which

more

reflect

to

will

organization

an

NABAC

to grind.

ton,

:par

would

employment costs means 18 cents a ton in higner steelmaking costs
immediately. An equal amount wil be added by higher costs of

have

we

advantage

manhour. Odds are that steel prices will rise after
small. Each penny in higher

midyear but the increase will be

taken.

the

matical

Certainly,, if

Finally,

Reserve

are-

Given

-

attempt to
fact rather

we

upon

profits and losses
Actually, the

transfers

Debt

profits

apt - to

are

care.

only; during

of

in the full

axe

to nine week strike to be settled by a package
and 11 cents per

taken.

mathematical

It looks for a six
costing between 6

by labor and management, "Steel" said.

ment

tax opera¬
of those

portfolio profit
and loss operations under which
type of program, transfers to the

the

some

a

selection

Debt Reserve with

made

attention
so

many

based

are

call

can

have

may

be

be

combining

b a n k e r s
and bank 'supervisory authorities
understood thoroughly what yield
is and what a bank acquires when
a
bond is purchased, they would
be less inclined to avoid bonds

bankers

for

the

that

what

of

the

which

on

extreme

supervisory
and

,

greater importance and it requires

ac¬

than fancy.'
_

is

earn¬

To

tremendous

a

selection of replacements is of far

know

also

thoughts

show,

a

incidentally would be
"sufficient- to protect1 against
a
further price decline in the. 2 V2S
June 15, 1967-62 down to the 83
It

we

These

reserve

level.

we

Investment

realization-' that

now earn¬

free bond
$30,257 net after taxes.

$25,(500 and has

is.

as

room

be

to

are

im¬

more

bank

obtained

aware

things
bankers, but

annual rate of $27,625—

an

-versus

This

He is

the

improved.

be

these

at ap¬
proximately current market levels
and that is 89%s.

be

fully

such

his books

on

of

to

issues

I have attempted

management

potential

loses twice and

the

tion

in which

areas

could

more

The banker who has taken

is
for

improvement
technique. Too many investors

in

Summary

some

authorities

$38,750 on a holding that is
producing $25,000 a year in in¬

there

field

amount of

consider the heart of

cooperation from the

tion of

come.

tion

only

complish this it is necessary that'

past

deprecia¬

a

,

.

would

experience that

ings

.

for the

2%s

two years now

from

of

•

eventually becoming more competitive with foreign producers.
Hourly steel wages in the U. S. are three to eight times those of
the major competitors abroad.
There is no evidence which indicates a peaceful steel settle¬

yields
available from so-called
premium bonds. In the tax opera¬

Debt

$49,100. If it
customary

the

reserve

paper

discuss

portant

maturity ob¬

is

it

Bad

a

$23,125.

In this

the

account

of

in

the
;

.

optional

bond

handled

manner,

sion of maturity in a weak market
.in combination with the purchase
of

the

(2331)

equitable contract is the key to

For

kwh

"

16, output increased by 25- million
that of the previous week and showed a gain of 1,427,-

the week ended May

above

000,000 kwh. or 12.7%

Car

Loadings
677 398

This

above that of the comparable

1958 week.

Corresponding 1958 Week
of revenue freight for the week ended May 9, totaled
the Association of American Railroads announced.

Loadings 26.5% Above
cars,

was

an

increase of 141,819 cars or

sponding week in 1958, but a decrease
below the corresponding week in 1957.

e

26.5% above the correof 45,919 cars, or 6.3%
.

Continued

on page

36

^

£6

The Commercial and Financial Chronicle

(2332)

The

Continued from page 35

>

■■'

The State of Trade and
in the week of
preceding week.

Loadings
above the

May

9,

3,275

were

'

Industry
or

cars,

0.5%

|

dollar

total

3

was

For May 9
Lumber

For

were 1.2% above production for the week
In the same week new orders of these mills were
production.
Unfilled
orders
of
reporting mills
©mounted to 45% of stocks. For reporting softwood mills, unfilled

orders were

equivalent to 21 days' production at the current rate,
and gross stocks were equivalent to 43 days' production.
For the year-to-date, shipments of
reporting identical mills
were 2.7%
above production; new orders were 4.9% above pro¬

duction.

Compared with the previous week %ided May 2, production
reporting mills was 9.7% above; shipments were 7.4% below;
new orders were
1.1% below. For the latest week, as against the

of

1958,

production
2.7%

were

13.7% above.

of

reporting mills was
new orders were

above; and

Commercial

industrial

and

failures

climbed

to

in

311

Now that the

more

businesses failed than in prewar 1939 when there

Failures involving liabilities of $5,000 or more rose to 275
from 237 in the previous week but did not reach the 290 of
this
eizo a year ago. An increase also occurred
among small casualties,
those with liabilities under $5,000, which edged to 36 from
28 a
the similar week of 1958.
Liabilities ranged above $100,000 for 30 of the
failing concerns, as
against 26 in the preceding week.
week earlier and compared with 37 in

Commodity Price Index Moves Up Moderately

Higher prices on most grains, hogs, lambs and sugar
helped
the general
commodity price level rise moderately this week, off¬
setting declines on coffee, butter and steers. The Daily Wholesale
Price Index, compiled by Dun &
Bradstreet, Inc.,

Commodity
a

at 276.52

(1930-32=100)

week earlier and 280.58

on

on

May 18, compared with 275.89

the comparable date

a

year ago.

Following steady declines in the prior week, most grain prices

moved

in the latest week. Purchases of corn expanded and.
offerings in most markets were light resulting in a moderate
increase in prices; there were increases in both
domestic and ex¬
port buying of corn.
•
Although the call for wheat sagged during the
week, prices
were
steady; trading was influenced by larger receipts, sluggish
flour trading, and lower
export volume.
Transactions in oats
picked up appreciably and prices finished the week
slightly higher.
Interest in rye lagged during the
week, and prices were down
fractionally. Strength in the oil market and light
marketings held
soybean prices close to the prior week.
up

..

There was

moderate decline in domestic and
export buying

a

of flour this
week, but

prices

prices were steady to slightly higher. Rice
steady this week and supplies were light. Domestic

were

sales moved

up

and export buying

was

sales made to Egypt, Pakistan and Cuba.

noticeably higher, with

Trading in sugar picked up at the end of the week and
prices
were up slightly.
There was a seasonal decline in coffee trans¬
ections and prices dipped
fractionally. Wholesalers reported a
moderate

rise

in

purchases

of

and

prices edged slightly
higher. .%
Although hog trading was unchanged from a week
earlier,
prices climbed somewhat during the week; hog receipts in
Chicago
were up
slightly from the prior week and a year ago.
Cattle
receipts were little changed, but trading dipped and prices were
down somewhat.
The salable supply of lambs was
limited, but
volume was steady and
prices were slightly higher. In contrast to
the rise in hog prices, lard
prices were down somewhat.
Following declines in the middle of the week, cotton prices on
cocoa

the New York Cotton Exchange moved
up at the end of the period
and finished slightly higher than a week earlier.
The 1958 cotton
crop amounted to 11,512,000 bales, compared with
10,964,000 bales
in 1957, according to the United States
Department of Agriculture.

Wholesale Food Price Index Rises

Continued

from

in

The Dun &
resents the

sum

and

in

Bradstreet, Inc. Wholesale Food Price Index
total of the price per
pound of 31
use.
It is not a

general

chief function is to show

the

wholesale level.

rep¬

foodstuffs

raw

cost-of-living index. Its
general trend of food prices at the

Mother's Day, Strike End Boost Retail
Sales
final,

boosted

upsurge in the buying of
overall retail trade this
week

prior

week

most

noticeable

volume

in

and

the

men s

gifts

for

moderately

comparable

year-to-year

clothing

period a
gains were

and

furniture

year

in
was

Mother's

Plough knows the savings in overhead, sales cost and general and

most

will make

fifth

the

radio

administrative

station

of

sources

earnings.
Advertising

Advertising:

Plough
products
normally appears in from 600 to 700 newspapers each week.
Over $125,000,000 has been spent over the
past 50 years to build the present
sales demand for Plough products,
While the company continues to
be a large and consistent user of
newspaper advertising, its scope
of media has been enlarged to inelude national magazines, radio,
television, outdoor billboards, professional journals and direct mail,
/c\

in

the

newspapers,

Std Joseph1*1 Ah
which

are

than

the

ago.

While

the

women's

apparel,

substantially.
Settlement of the United Parcel
Service Strike in New York
City
helped sales of major appliances in that afea
rise at the end of
the weeK.
Purchases of new passenger cars
remained at a high
level and sharp
year-to-year gains were sustained,
according to
scattered reports.
&




up

s'h

'

earninos

se^enth
ptS "re g- *
druggists and distribthe

'

increased

These calendars

in

out of

eacn

.

.

(7)

„

Acquired. Coppertone Sun-

tan Products: With the advent of
"leisure time"

living, the Copperacquisition promises to be

tone

of

the

most

profitable areas
According to an
independent market analyst, Coppertone
accounted for
37%
of

one

for development.

suntan lotion sales
balance

10 other

was

in

divided

1958.

among

brands.

Coppertone is a
Plough has the facilities to get the product to the
public, through sales and advertising.
Plough's 100 man sales
"hot" item and

force

is

nation-wide and

sells

to

7,500 wholesalers and also 65,000
direct retailers.

years.

and

in

They

the
are:

past

The

ac-

several

Musterole

Zemo

Companies; Dr. EdTablets; Radio Stations WCOP, Boston, and WCAO,
Baltimore; Coppertone; Solar-

wards'

Olive

proprietary, showed

in ^g.

position
With

Low

a

^Thousands.

fBased

on

15%

a

and

annual in¬

16%

a

in¬

share

per

annual

to

amount

in late

41%

1961

of

$53

the

on

to 56%

increase in market

Plough's divi¬
payout would justify a divi¬
rate of $1.15 to $1.25 at that

dend

dend

time.
...

It

should

has

in dilution

+

noted, however,
acquisition program

necessitated

additional

.

be

that Plough's

the

shares

issuance

which

of

resulted

of per share earnings.

dilution might

Some

be expected
acquisitions, although in
past
record,
earnings per

in future

the

share increased

with the in¬

even

number

creased

of shares.

All these factors

point out that
outlook is better now
any time in its 50 year
history.
For the investor inter¬
ested in well- defined growth in a
stable, consumer industry, Plough,

Plough's
than

at

Inc. should be considered.

a

^

Coil Winders, Inc.

avcr-

Common Slock Sold

current ratio of 3.24:1

a

Bertner

plough's working capital
is strong at $9,119,981

creased from
per

quarter

15 cents

and

was

the

recent

re-

$29,473

195G

The

net proceeds will be used
purchase electronic test ma¬
chinery and equipment; to retire
loans and notes outstanding; for

research
for

the fourth

Winders, Inc., with offices
at 40 New York Avenue,
Westbury, N. Y., was incorporated
manufactures
United

the

1,204
$1.05

$0.81

4.92%

21%

16
13

8 y8

end

of each year.

Government

and

tion,
navigation and telephone
equipment. It designs and manu-

137/s

14

States

electronic

factures

3.46%

19y4

on Aug. 3, 1946.
It
components for the

industry for such
end
equipment
as
computers,
radar, missiles, and communica¬

727

2,025

at

in New York

$21,004
1,507

$1.66

and

Coil

1953

6.86%

and
development;
working capital.

located

of

$24,472
2,329

4,005

Edden

to

$37V2
(New York Stock Exchange), the
80 cents dividend provides a yield
of 2.13% and represents a dividend payout of 42.6%. Earnings of
$1.88 per share in 1958 represent
a
price/earnings ratio of 19.95
times. For comparison, the av1957

Earl

and

having been sold.

to 20 cents

market

Bros,

Co., both of New York City, on
May 15 publicly offered 150,000
shares of common stock (par 20
cents) of Coil Winders, Inc. at $2
per share. The offering has been
completed,
all
of
said
shares

consecutive annual increase. Based

shares outstanding

taxes

value by late 1961.

estimated at $590,000 compared to $550,000 in 1958. In September, the dividend rate was in-

Taxes*

—

after

Earnings

These valuations would represent

were

$31,517
4,305
Net Income After Taxes*.
2,305
Earnings Per Sharef
$1.88
After Tax Profit Margin._
7.29%
Price Range: High
39y2
Before

year
period
sales i increased 50%

in sales

uation

fleeting a continuation of the improving trend begun in 1952. Net
saies f0r the first quarter of 1959
by the company were $8 million
compared to first quarter sales of
$7,775,000 in 1958. Net earnings
after taxes for the same period

Sales*

Net Income

and

conservative projections and $58.60
on
the more liberal projections.

age increase in sales resulted in a
(j% average increase in earnings

1958

Net

52%

3

investment advisorv service of

0n

Plough, Inc. has made eight
quisitions

this

$2.93 in 1961.
Capitalizing these earnings at 20
(current price/earnings
ratio for six comparable compan¬
ies is 24.69) would result in a val¬

comnan^es who"
ding

r.ne,?irgh Pr°dUCtS piCtUrCd °n
page.

On

times

matter

a

increase

recent

income

net

would

for

addition to bearing the imprint of
the local druggists, have one or

.

would

the basis of

on

Ji^ompfri^ ^survey b^Tead!

one

rate.;;

better

increase in net income after taxes

by

m

are

8 homes in America, and

every

ex¬

maintain

respectively by 1961. During

crease

^
L

appear

also

current

16%

a

income

at slightly

creased 217%.

consecutive year. Net

18,000
uted free by them to the public.

would

(1955-1958)

^num^r of^tiS compares'110
a ?n 1958 salef eaSgs and

printing

private

served

be

can

and
net

most

and

enterin^ the ethical drug field,

entire Mid-South,

the

ing

has

Inc

interests

in
not

the

the balance resulting from an agg/essive program of new product
development and the promotion
existing lines,
At present, Plough .does not
compete in the ethical drug field.
The home remedy type of products
has proven extremely successful
and profitable for Plough and
t h. ere are no indications of a
slackening in demand for these
items. It is now felt by Plough s
management that the company s
best

sales

56%

recent years, with

4i

Tnconu

Calendar^ Plough

the largest

in

plant
excludand prints

ci

manac

and earnings

for

in

does

and

the

taxes

result

that

costs

than

mately half of the growth in sales

Recognized Sales Potentials

(5)
of

to its

basis, sales and net income after

when new items are added to the
line. Added sales also help level
out seasonal productions patterns
and provide advantages in such
areas as purchasing, advertising,
research and financing. The Company's acquisition program has
been
responsible
for
approxi-

acquired by Plough.
To quote
Plough's Financial Vice-President,
"ownership of the stations is definitely highly profitable," in addition to being an important adjunct to the corporate plan of diversification of assets and

3.0%

was

increase

taxes

cessive

Atlanta, which was announced In
April, subject to FCC approval,

The

areas.

ol Radio Station

in

of

margin

profit margins

caine;

each of which ranks among the top
three rated radio stations in those

Day

both

over

after

recent purchase
WAGA, AM-FM,

Boston,

WCOP,

and

a

in¬

net

would result

Plough's recent achievements
justify a more liberal projection
of sales and earnings. A 15% an¬

2

page

in

and

$43,125,000

after tax

.

.

11%

an

present 13.7% and 7.3%. Per share
earnings
on
this
basis
would
amount to $2.65, assuming no ad¬
ditional shares were listed during
the .period.

and Creolin. Preliminary
agreements have been signed for
the purchase
of Radio Station
WAGA, Atlanta, and for the Pass
Dye Company.
By experience,

Baltimore;

The

price this week were wheat, oats,
hams, lard,
sugar, cottonseed oil, cocoa, steers and hogs. Lower in
price were
rye, eggs and potatoes.

A

In the preceding

The Security I Like Best

total

Fractionally

Following two weeks of declines, the Wholesale Food Price
Index, compiled by Dun & Bradstreet, Inc., rose
fractionally on
May 12. The index stood at $6.14, compared with $6.13 a week
earlier, for an increase of 0.2%. It was down 7.3% from the
$6.62
of the
corresponding date a year ago.

meats

taken from
May 9,

as

ended

week

com¬

and net in¬
$3,250,000 by
1961. This would maintain profit
margins at slightly better than the
current rate of
7.29%. Plough's
profit
margins
have
improved
steadily since 1953, when the pre¬
tax margin
was
5.5%
and the

dispute has ended, it is to be expected that com¬

.

Higher

the

for

pilation of the sales figures will be resumed.

the

288.

stood

country-wide basis

after taxes

annual

considerably the 264 in the comparable week of 1957. Eight

Wholesale

a

Index

above the like period last year.

14%

of

come

City department store sales for the week ended May 9. As a
matter of fact, no data have been used for any week since the
one ending April 17 because of the United Parcel Service strike.

ended May

cent

increase

sales

14%

on

sales

in

after taxes

nual increase

14 from 265 in the preceding week, reported
Dun & Bradstreet, Inc. While casualties did not rebound to last
year's level of 327, they were the highest in five weeks and ex¬
per

based

increase

annual

12%

week, for May 2, an increase of 6% was recorded. For the four
weeks ended May 9, a gain of 8% was registered.
The Board could not obtain information regarding New York

Upturn in Business Failures Noted

were

Projections
annual

•

•

ceeded

Board's

Reserve

Federal

increased

The average

the six

on

panies is 53.7%.

,

I

week

dividend payout

May 9 Week

Department store sales on
the

9.

above

corresponding week in
6.8% above; shipments

companies is 2.22%.

.

Nationwide Department Stores Sales Up

Week

shipments of 476 mills reported to the National Lum¬

ended May

.

and the average yield on the same

come

ber Trade Barometer

10.9 %

•

Thursday, May 21, 1959

.

comparable

percentages: West North Central +8 to +12; East North Central
+7 to +11; Mountain +6 to +10; South Atlantic +3 to +7;
Pacific Coast
+2 to +6: East South Central 0 to +4; New
England and Middle Atlantic —1 to +3; West South Central
-—3 to +1. '
■

Shipments 1.2% Above Production

.

price/earnings ratio for six
companies - is
24.69

erage

to

-

Lumber

ended

in the week

retail trade

of

volume

7% higher than a year ago, according to
spot estimates collected by Dun & Bradstreet, Inc. Regional esti¬
mates varied from the comparable 1958 levels by the following
13

May

.

inductor

which

include

roids

RF

components,
torFrequency)

transformers,

(Radio

coils,

traveling

wave

coils,

.

klystron

field

tube field
coils, and

focus and deflection coils.
.

The

outstanding

capitalization

giving effect to the new financing
will total 428,500 shares.^..-

Volume

189

Number 5848

.

The Commercial and Financial Chronicle

.

.

The

Indications of Current

week
Latest

IRON

AND

INSTITUTE:

STEEL

following statistical tabulations

latest week

Business Activity
AMERICAN

Previous

Week

Week

or

or

month available.

month ended
Month

on

Ago

Ago

BUILDING

May 24

394.4

*92.5)

93.5

56.4

Steel ingots and castings

(net tons)

May 24

§2,374,000

*2,331,000

2,043,000

1,523,000

42

Crude

,

Total

and

condensate
each)

gallons

to

runs

/

output

(bbls.)

fuel

117,722.000

7,702,000

8,092,000

7,255,000

27,003.000

27,141,000

28,238,000

25,410,000

May

1,759,000
11,995,000

1,743,000

2,107,000

1,568,000

12,375.000

12,002,000

0,517,000

0,552,000

0,788,000

11,130,000
0,051,000

208,419,000

209,593,000

214,594,000

201,235,000

21,610,000

21,070.000

19,281,000

19,114,000

oil

l',t

87,055,000

85,584,000

78,994,000

78,287,000

54,500,000

57,393,000

59,120,000

Hospital

7,112.025

7,134,125

Additions

0,249,085

May
(no. of cars)—May

077,398

374,123

018,359

State and

588.544

508,620

48

028

677

156

161

218

272

205

203

146

144

103

126

121

100

201

202

196

07

07

Commercial

Office

Other

(«.

Bituminous coal

W:

Farm

$415,000,000

$403,300,000
177,900,000

$371,300,000
107,700,000

200,517,000

May 14

'225,200,000

225,400,000

203,000,000

234,882,000

May 14

108,200,000

178,300,000

176,000,000

181,550,000

43,800,000

27,000,000

53,332,000

V

EDISON

=

May

9

8,405.000

*8,235.000

7,985,000

Public

FAILURES

318,000

330,000

330,000

390,000

9

158

*140

130

138

May 16

—

AND

IRON AGE

COMPOSITE

Finished steel

INDUSTRIAL)

DUN

—

12,084,000

Electrolytic

311

Other

12,059,000

12,009,000

(E.

265

304

327

J.

—_
——

QUOTATIONS):
'
',Y

Lead' (New
Lead

York)

Louis)

(St.

.

,*

MOODY'S

>

at

PRICES

BOND

$00.41

$06.41

$35.17

$32.07

0.190c

5.967c

other

-J;

.

A

Group

-

COMMODITY

MOODY'S

24.700c

24.700c

24.000c

103.000c

102.500c

102.250c

94.500c

As of Feb. 28

MOODY'S

WEIGHTED

83.29

33.71

84.57

96.25

Industrials

87.80

89.37

96.07

Railroads

90.91

92.04

102.80

Orders received

(tons)
(tons) »«.«.

Production

Y

,

(125)

89.78

95.62

Insurance

83.03

84.04

87.13

Average

May 19
May 19
May 19

86.24

80.91

88.13

91.48

86.38

80.78

89.23

97.78

89.23

89.92

90.63

99.20

4.14

4.10

4.01

2.82

Number

of

May 19

4.02

4.57

4.40

4.00

Number

of

4.35

4.23

3.58

Number

of

May 19

1.48

4.42

4.33

3.78

May 19

4.04

4.50

4.43

4.03

4.02
4.31

Total

3.89

Credit

4.42

4.37

3.80

Cash

380.2

383.6

392.0

400.7

29G,719
312,095

264,699

320,062

May
May

9
9

94

94

94

86

525,874

507,309

482,117

383,220

.May 15

110.01

110.04

111.01

109.91

Percentage of activity
Unfilled orders

(tons) at end of period

285,090

AVERAGE

1949

=

100

*—

TRANSACTIONS

ROUND-LOT

ACCOUNT

FOR

MEM¬

OF

-

Transactions of specialists in stocks in
Total purchases

.

Short

April 25

sales

Other

which registered—

sales

2,007,330

April 25
April 25

2,508,930

1,990,400

1,023,210

Other

1

'

\

Other sales

'

•

-

1,935,840

1,092,330

376,270

370,890

383,300

474,940

21,700
434,120

49,700
402,890

80,100

17,300

355,270

.429,720

435,370

447,020

455,620

452,590

April 25

094,710

770,373

502,540
71,000

578,840

552,070

648,942

April 25

sales

133,250

105,750

875,100

April 25

935,708
1,041,458

1,008,350
-

£

Total

-Total

sales

'""Other

DEALERS

LOT

SPECIALISTS

AND

EXCHANGE—SECURITIES

sales

Odd-lot
'C.'.i

Number

Dollar

by dealers

ON

EXCHANGE

(customers'

N.

Y.

shares—

of

value

April 25

1,907,040

1,351,193

1,301,227

$54,737,320
1,101,334

April 25

8,809

4,413

5,912

18,847

April 25

1,958,231

1,840,780

1,082,487

.April 25

$111,918,848

$104,514,177

1,295,315
$04,042,553

April 25

529,790

522,970

308,060

290,380

529,790

3227)70

3oifooo

290^380

092,910

008,420

407,240

510,060

;

sales

April 25

TOTAL ROUND-LOT

dealers—Number of shares

STOCK SALES ON TnE N. Y.

EXCHANGE —SECURITIES

-

EXCHANGE

*TOR ACCOUNT OF MEMBERS

rT

round-lot

Total

Ghort

COMMISSION

(SIIARES):

WHOLESALE
LABOR

.

PRICES, NEW SERIES

—

—

(1947-49

=

—

n on

Meats

other than farm and foods

-•Revised

CEMENT

one-half

1,

figure.

cent

1959,
a

pound




*$365.4

$348.7

249.6

*240.9

232.6

*102.7

95.3

:

74.9

*81.5
*05.3

34.9

34.7
44.2

02.9
33.3

-

41.1

9.5

8.9

32.4

30.5

*13.4

14.6

at

12.1

12.5

12.4

19.8

19.3

*26.1

24.8

*7.7

0.6

*348.2

330.5

in¬

(barrels)

from

mills

24,329,000
23,011,000

RECEIVED

BY
S.

U.

—

FARMERS
DEPT.

of

36,734,000

54

58

243

256

17,486,000

INDEX

—

OF

18,038,000

30,005,000

72

(per cent)

10,710,000
14,785,000

37,759,000

(barrels)
(barrels)—

month

of

end

Capacity used

farm

12.5

of March:

AGRICUL¬

March

15:
244.

products

232

222

Commercial

Cotton

——

grains and hay

Feed,
Food

fresh

339

239

220

155

149

203

225

218

225

225

223

_

154

205

grains

Fruit

Oil-bearing

204

255

vegetables,

218

284

Crops

221

230

Potatoes

117

123

209

505

505

475

Livestock

crops

203

205

277

249

259

254

Meat animals

327

322

Poultry

153

158

186

197

197

234

$857,914,994
055,547,301

$748,209,119

$707,049,220
023,581,702
74,200,571

-

Dairy products
and

eggs

EARNINGS

CLASS

I

ROADS

(AS¬

OF AMERICAN RRs.)—Month

1,000,750

Total

operating

revenues

13,150,930

13,325,820

Total

operating

expenses

13,079,990

14,320,570

529,000

95,295,800
Net

Net

..May 12
.May 12

119.6

119.0

119.9

119.5

90.9

91.4

92.5

98.6

107.9

*107.6

107.3

112.8

102.8

102.0

101.8

114.4

May 12

127.9

*127.9

123.1

125.4

335

March:

railway operating Income before charges
income after charges (estimated)
ESTATE

AREAS

OF

FINANCING
U.

BOARD—Month

IN

S. —HOME
of

Jan.

LOAN

(000's

Savings and loan associations
Insurance companies
Banks and trust companies

Miscellaneous

Total

79,139,549

39,793,094

44,165,905

58,000,000

19,240,000

24,400,000

$870,081

$982,801

$627,560

BANK

omitted):
t

institutions

—

»

120,843

142,671

110,729

453,677

507,744

322,407

123,169
300.641

banks

lending

009,210,746
74,185,789

NONFARM

Tncludes

as

$308.6

(BUREAU OF MINES)—

573,300

885.000 barrels of foreign crude runs.
§Based on new annual capacity of 147.633.G70 tons
against Jan. 1, 1958 basis of 140,742,570 tons
tNumbe.r of orders not reported since introduction of
-Monthly Investment Plan.
fPrime Western Zinc sold on delivered basis at centers where freight from East St. Louis exceeds
of Jan.

1,941,152

351.2

social

for

agricultural income

Mutual savings
as

2,060,000

26.1

1—

18,433,550

May 12

"

275,253

2,095,000

207,795,213
114,810,119

20.0

contribution

17.858,190

May 12

1

412,000

12.5

—

income

18.357.130

V. S. DEPT. OF

foods

All commodities

Stocks

REAL

products

410,000

32.6

persons

17,019.350

100):

commodities

Farm

Processed

283,201,861
106,038,209

954,350

9.5

737,730

Commodity Group—
All

Total

PORTLAND

of

sales

110,741
312,395

1,190,000
282,104,940
107,215,337

7.8

of

employees'

SOCIATION

sales—

Total sales

$2,770,150

157,000
374.000

65.8

surance

RAILROAD

April 25
April 25
April 25

$3,410,000

82.8

Wool

STOCK

sales

Other
.

April 25

340

Tobacco

$40,137,901

April 25

Other sales

Ghort

-Round-lot purchases by

.

__

TURE— J 91.0-1914—100—As

Customers'other sales
Dollar value

—

Transfer payments

NUMBER

$123,185,441

74,427

12.6

PRICES

$138,508,521

31G.911

270

13.5

interest

4.071,708

1,307,769

391,678

109,804

COMMERCE)—Month

professional

income

Personal

4,091,210

1,420,200
$70,874,815

686,439
576,305

STATES

——

2,384,872
2,945,540

2,084,417

—

UNITED

income:

and

2,552,450
8,015,290

2,297,540

4.35

44.3

labor

3,507,828

-

—

Govt, issues
collateral

industries

3,431,760

April 25

3.43

in billions:

Production

April 25

Round-lot sales by dealers—
Number of shares—Total sales

OF

S.

Government

All
.

4.70
3.08

1,258,000

-

Shipments

STOCK

4.46

2.53

379,000

Wage and salary receipts, total
Commodity producing industries
Manufacturing only
Distributing industries

500,070

COMMISSION

0.38

3.95

;

$3,458,000

S

Total personal Income

402,940

"-Customers' short sales

-

other

059,450

purchases)—t

Odd-lot purchases by dealers (customers' sales)—
Number of orders—Customers' total sales

t

on

800,022

-

4.19

4.00
3.80

104.6

U.

bonds

Member borrowings

Month

sales

3.28

3.87

153,000

in

free credit balances-

PERSONAL INCOME IN THE

2,070,990

April 25

i'rjSTOCK TRANSACTIONS FOR ODD-LOT ACCOUNT OF ODD-

and in banks

U.

023,730

3,078,300

3.11

accounts—

balances

on

2,942,240

April 25

-

margin
debit

customers

listed shares

3,710,193
503,940

account of members—

sales

Total

net
to

listed

April 25

transactions for

purchases™

■•Short

$30,554,000

(000's omitted):

of

Less

151,080

$31,125,000

EXCHANGE-

of

Rental

399.2

17,682,000

265

value

Farm

7,984,000

437.2

694,789

coaches—

Market value

Other

8,743,000

429.7

579,316
115,208

carsl.™

Member borrowings

Business

10,743,000

FROM

carrying

hand

April 25

round-lot

'

-

:

the floor—

purchases
Short sales
Other

2,583,290

April 25

—

Total

•-!»»£

359,290

1,333,040

April 25

i
————J—

—

transactions initiated off

Other

.

309,580

1,500,200

April 25
April 25

Total sales

-

380,890

2.202,400

the floor—

on

Total purchases
,,-i -Short
sales

i

.

-transactions Initiated

440,100

2,201,390
2,047,490

-

motor

Total of customers'

Service

17,037,000

MANU¬

trucks

motor

extended

of March

BERS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS

SALES

AUTOMOBILE

ASSN.—Month of April:
vehicles

(DEPARTMENT

OIL, PAINT AND DRUG REPORTER PRICE 1NDEX-

20.942,000

2.57

»

of

customers'

on

—

passenger

firms

Member

Market

374,448

S

AS of March 31

4.47

313,894

FACTORY

U.

NEW YORK STOCK

4.80

332,434

IN

number

4.47

9

10,880,378
20,388,000
17,042,000

3.29

._a

FACTURERS'

4.55

20,409,000

3.98

(10)

PLANTS

4.05

9

79

',U

.

4.42

...

Amur. Tel. & Tel.) (214)—

VEHICLE

MOTOR

4.04

May

18

OF

April:
'

(200)

4.94

May

of

(15)

4.03

—•-

YIELD

(25)

87.99

,

1

75

$31,129,000

AVERAGE

STOCKS —Month

Utilities (not incl,

Banks

ASSOCIATION:

NATIONAL PAPERBOARD

'

33

DEPT.

(000's omitted)

COMMON

4.69

INDEX

05

46

31

11,435,323

24.700c

MONEY IN CIRCULATION—TREASURY

May 19
May 19
———May 19

-——

111

08

43

20

.

10.000c

—May 19

^

Utilities Group
Industrials Group
public

■

11.000c

4.95

Railroad

in

84

development-.

11.000c

'

v

and

public

Active spindle hours for spindles in place Mar.

99.52

-J.—

335

37

enterprises

10.500c

91.19

-—

35
80

295

70

11.800c

Total

^a™™™™™™™_~™™™

'■■■

39

30

115

.

12.000c

89.92

—

systems

11.500c

May 19

Average corporate

-.

water

11.500c

4.39

'.

48

105

COTTON

82.90

——-

31

38

10.800c

YIELD DAILY AVERAGES:

238

34

430

sendee

87.18

*17. -S. Government Bonds

31

219

45

89.09

MOODY'S BOND

374

29

118

:

"

80.91

;

62

366

51

buildings

facilities

COTTON GINNING (DEPT. OF COMMERCE):
Final report (running balcs)„

100

Railroad Group
Public Utilities Group
Industrials Group -

service

and

93

30

11.000c

—

1,085

1

228

11.000c

22.250c

13

1,094

30

11.300c

24.225c

13

383

11.500c

29.550c

82

340

92

buildings

nonresidential

and

90.34

,

;

12.000c

31.250c

28.275c

24

21
70

325

1,279

.

buildings

Conservation
All

',;V

7:

120

446

13

;

11.500c

May 19

(Average corporate

71

15

111
4

341

.

11.800c

May 13
May 13

at

U. S. -Government Bonds
'»•

•

28

416

438

26

____

SPINNING (DEPT. OF COMMERCE):
Spinning spindles in place on March 29
Spinning spindles active on March 29
Active spindle hours (000's omitted) Mar. 29

31.125c

28.750c

AVERAGES:

DAILY

,

Sewer

$66.49

$33.33

31.175c

May 13
May 13

-

(primary pig. 99.5%)
Straits tin (New York) at

6.196c

$33.33

May 13
May 13

at

Aluminum

\

-—

—

-

jv

Water

jr? r*

$66.41

May 13
May 13

——
—„

at

tZinc (delivered) at
•AZinc- (East St. Louis)

v,*<

Y'\'

Domestic

Export

<

0.196c

May 12
May 12
May 12

——.—.

M.

&

50

-

13

124

a—v
..

Highways

11,257,000

Public

(per lb.)

copper—

42
-

34
f

12

;

construction

Sower

eon'

refinery atrefinery at

01

4i
47 '

36

Educational

&

PRICES:

Pig iron (per gross ton)
Scrap steel (per gross ton)
METAL PRICES

Y.

-

utilities

Administrative

May 14

(COMMERCIAL

recreational

construction

Military

.BRADSTRI5ET, INC

■

,v;

46

Hospital and institutional

-

'

40

institutional

and

and

Residential

0,272,000

9

May

100

(in 000 k\vh.)_

—'

;

and telegraph
public utilities
other private

Ail

ELECTRIC INSTITUTE:

Electric output

buildings

Industrial

May

AVERAGE

garages

;

Nonresidential

(tons)

Pennsylvania anthracite (tons)
SYSTEM—1947-49

4

warehouses

Other

S. BUREAU OF MINES):

and lignite

and

restaurants, and

Telephone

$435,399,000

190,400,000

t DEPARTMENT STORE SALES INDEX—FEDERAL RESERVE

.

buildings

nonresidential

Miscellaneous

495,354

May 14
May 14

_

municipal

COAL OUTPUT

296

629

Public

Public construction

»

945

201

Industrial

Railroad

Private construction

-

1,289

1,215
54

535,579

590,311

57,000,000

'■v

2,551

1,340

,

1,530

318

,

2,098

1,714
;

$3,636

2,918

50

ENGINEERING

—

NEWS-RECORD:
Total IT. S. construction

tT

ZLr

Ago

$3,792

'

Revenue freight received from connections

CONSTRUCTION

Year

Nonhousekeeping
buildings

Social

freight loaded (number of cars)

CIVIL ENGINEERING

£

Month

Nonresidential

V;« ASSOCIATION OF AMERICAN RAILROADS:
Revenue

Previous

;4,197

alterations

and

Stores,

May

of that date:]

are as

Month

OF

.

Educational

55,553,000

May

Residual fuel oil (bbls.) at

,

DEPT.

Religious

output (bbls.)

Distillate

-

7,200,225

either for th4

are

(in millions):

buildings (nonfarm)
dwelling units

New

(bbls.)

average

April

construction

May
May

Residual fuel oil output (bbls.)
May
Stocks at refineries, bulk terminals, in transit, in pipe lines—
Finished and unfinished gasoline (bbls.) at
May
Kerosene (bbls.) at
May
Distillate fuel oil (bbls.) at
May

••

of

construction

new

Private

(bbls. of

average

(bbls.)

Kerosene

,, •

CONSTRUCTION—U. S.

May

stills—daily

output

of quotations,

cases

Residential

output—daily

Gasoline

■

in

or,

LABOR—Month

PETROLEUM INSTITUTE:

Crude oil

Dates shown in first column

that date,

Latest

(per cent capacity)

AMERICAN

production and other figures for thi

cover

Year

Indicated Steel operations
Equivalent to—
r

3?

(2333)

104,640
299,427

279,850

484,084

531,300

343,691

!59 359 495

<9 69.8.523

97,711

.CI

7R1

CiJa

The Commercial and Financial Chronicle

(2334)

38

.

.

Thursday. May 21, 1959

.

* INDICATES

Securities

310,000 shares of common stock (par 30

cents) to be offered for subscription by common stock¬
holders on the basis of 0.525 shares of additional stock
for each share held of record April 24, .1959 (for a 20day standby).
Proceeds—For

Price—To be supplied by amendment.

•

Inc., both of Denver, Colo.

Accurate

selling

May 12 filed 95,000 shares of common stock (par 10
cents). Price—$2.60 per share. Proceeds—For additional
equipment, operating expenses, working capital and pay¬
ment of notes. Underwriters — Milton D. Blauner & Co.,
Inc. and Stanley Hellbr & Co., both of New York. Offer¬
ing—Expected in four or five weeks.

purposes.

Williams, Widmayer Inc., Washington, D. C.

.

-

/

Agricultural Insurance Co.
March 23 filed 132,000 shares of capital stock (par $10),
being offered in exchange for stock of Anchor Casualty
Co. at the rate of one Agricultural share for each Anchor
common share (par $10) and 11/10 Agricultural shares
for each share of Anchor $1.75 cumulative convertible
preferred stock (par $10). The offer expires on May 23.
Office
215 Washington
Street, Watertown, N. Y.
—

Underwriter—None.

Alaska Juneau Gold Mining Co.

640,660 outstanding shares of common
stock, of which 300,000 shares are to be offered cur¬
rently and the remaining 340,660 shares in the future.
Price—To be supplied by amendment.
Proceeds—To
selling stockholders. Office—6327 Santa Monica Boule¬
vard, Los Angeles, Calif. Underwriter—Lester, Ryons
& Co., Los Angeles, Calif. No public offering expected.
Dec,

filed

29

Alaska Mines & Metals Inc.

431/200 shares are to be reserved for sale to the holders
of 6% debentures due 1962 issued by DeCoursey-Brewis
Minerals Ltd., the company's parent (payment for
shares by such debenture holders may be made

delivery of debentures at par

the
by
plus interest with premium

for Canadian exchange rate).
Purchasers will receive
common stock purchase warrants on all shares purchased
for cash or for the 6% debentures of the parent at the
one for each five shares purchased. Price—$1.25
share. Proceeds—For general corporate purposes and
working capital. Office—423 Fourth Ave., Anchorage,
Alaska. Underwriter—To be named by amendment

rate of
per

Allied Television Film Corp.

April 28

150,000 shares of com¬
mon stock.
Price—At par ($1 per share).
Proceeds—
Forworking capital. Office — 2700 Wilshire Boulevard,
Los Angeles, Calif.
Underwriter—Alkow & Co., Inc.,
Beverly Hills, Calif.

* Alsco, Inc. (6/15-19)
May 15 filed $4,000,000 of 5 Vz % convertible subordinated
1, 1974. Price—100%

of principal

amount/Proceeds—To reduce short-term bank loans; to

liquidate the balance of loans from the Estate of Dora
Sugar Weinstock advanced for construction purposes;
to prepay an instalment on funded indebtedness; to re¬
deem all outstanding 1,089 shares of $100 par preferred
stock of a subsidiary; for capital expenditures; and for
working capital.
Office—225 South Forge St., Akron,
Ohio.
Underwriters
Hirsch & Co. and Bache & Co.,
—

both of New

York; and Equitable Securities Corp., Nash¬

ville, Tenn.

Alscope Explorations Ltd;
March

26

filed

1,000,000

shares-of

capital

stock,

of

which 700,000 shares are to be offered publicly in the
United States, and 300,000 shares in Canada. Price—Re¬
lated to the then current market price on the Canadian
Stock Exchange (31 cents per share on March 16). Pro¬
ceeds—For properties, drilling costs, working capital and
general corporate purposes. Office — 303 Alexandra

Bldg., Edmonton, Canada. Underwriter—None in United
States; Forget & Forget in Montreal, Canada.
American Asiatic Oil Corp.
Nov. 24 filed 100.000,000 shares of capital stock. PriceTwo cents per share. Proceeds—To selling stockholders.

Office—Magsaysay Building. San Luis, Ermita. Manila,
Republic of Philippines. Underwriter — Gaberman &
Haeedorn. Inc.. Manila. Republic of Philippines.
★ American Bakeries Co. (6/17)
May 19 filed 60,00(7 shares of common stock (no par).
Price—To be supplied by amendment. Proceeds — To
selling stockholders. Office—919 No/Michigan Ave., Chi¬
cago, 111. Underwriter—Merirll Lynch, Pierce, Fenner &

Smith, Inc.
American Buyers Credit Co.
Nov. 13 filed 5,000.000 shares of common
stock, of which
4,545,455 shares of this stock are to be offered for public
•ale at $1.75 per share. [Shares have been issued or are
issuable under agreements with various
policy holders
American Buyers Life Insurance Co. and American
Life Assurance Co. (both of
Phoenix) permitting them

In




Automation

"

_

New York.

Price—$6 per share. Proceeds—To go to Lester,
Ryons & Co. as securities fully and finally paid as an
obligation of the company.
Office—401 E. Green Street,,

Pasadena, Calif. Underwriter—None. No public offer-,
ing planned.' ■/';•////'A
A:Y.4 A4; 'A/,; /'AAA4
• Avnet Electronics
Corp. (5/25-28)
April 17 filed 175,000 shares of common stock, uf which,
75,000 shares are to be offered for the account of certain
selling stockholders. Price—$5.75 per share. Proceeds—*
To retire presently outstanding loans, 'and the balancewill be used for working capital and other corporate
purposes. Offices—70 State St., Westbury, L. I„ N. Y., and
5877 Rodeo Rbad, Los Angeles, Calif.
Underwriters—
Michael G. Kietz & Co., Inc. and Amos Treat & Co., Inc.,

■;

Avenue, Evanston, 111.

Inc.

stock.

Hospital Supply Corp.
A
April 20 filed 20,610 shares of common stock (par $2) to
be offered in exchange for common stock of Massillon
Rubber Co. on the basis of nine shares of American
common i'or one share of Massillon common.
Office—
2020 Ridge

Instruments,

April 27 (letter of notification) 4,584 shares of common-

both of New York.

Underwriter—None.

•

A

if Ballard Aircraft Corp.
April 17 filed 300,000 shares of

American Investors

'A

A •'*A

common stock (par $1):
Syndicate, Ine./ v
Feb. 24 (letter of notification) 100,000 shares of com- - Price —$3.25 pOr share.
Proceeds — To develop and
manufacture aircraft embodying the body lift principle,
mon stock
(par 10 cents). Price—50 cents per share.
Proceeds—For operation of an apartment hotel. Office w etc. ?Underwriter—Weil & Co., Washington, U.vCA-A"513 International Trade Mart, New Orleans 12, La.
Baltimore Gas & Electric Co.
;
Underwriter—Assets Investment Co., Inc., New Orleans;
April 17 filed $19,925,500 of '4*4% convertible debentures
Louisiana.
■"./•A'; v
V A; Aaa/AAA-A due July 1, 1974 being offered for subscriptiontby common

—

^American Pictures Corp. of Hollywood/, /
May 11 (letter of notification) 300,000 shares of common
stock. Price—At par ($1 per share). Proceeds—To pur
chase a production of Blind Men's Eyes and Untamed
Sex and for working capital.
Office—1633 N. Gardner
Street, Hollywood, Calif.

Underwriter—None.A.-

stockholders of record May 7, 1959, oil the .basis of $100

principal amount of debentures for. each 35 shares of
common stock then held; rights to expire on May 25.
Price—100% of principal amount (flat). Proceeds-ATo be
used for general corporate purposes, including proposed
construction expenditures, and to repay ady outstand¬
ing temporary bank loans obtained for the same .pur¬
poses. Underwriter—The First Boston Corp., New York.

~

¬

A

American Telemail Service, Inc.
Feb. 17, 1958, filed 375,000 shares of common

AK-v;-,A\
stock (par
share. Proceeds^-To purchase equip-

supplies and for working capital and other
corporate purposes. Office—Salt Lake City, Utah. Un¬
derwriter—Amos Treat & Co., Inc., New York, has with¬
drawn as underwriter., Change in Name — Formerly
United States Telemail Service, Inc. ■
*
v
ment

and

Amican

Petroleum & Natural Gas Corp.

< "/Bankers Preferred Life Insurance Co. 4
Jan. 30 (letter of notlifcation) 100,000 shares of common
stock

Price—$3 per share. Proceeds—For
incidental to operation; of an insurance com¬
pany.
Office—Suite 619, E. & C. Bldg., Denver, Colo.
Underwriter—Ringsby Underwriters, Inc., ' Deliver 2,

)'■_

cents).

Basic

standing shares of eomnlon stock (par one cent). The
preferred shares are to be offered for public sale for the
account of the company and the common shares will
be offered for the account of a selling stockholder. Price
—To be supplied by amendment. Proceeds—To acquire
new bowling centers and increase working capital (part
to be used in defraying cost of acquisition of stock of
owner of a Brooklyn
(N. Y.) bowling center.
Office—
135 Front St., N. Y,
Underwriter — To be named by

4

r

Lomb

share. The remaining 13/000 shares will be sold
selling stockholders at $7 per share. Pro¬
ceed!—For additional working capital and other general
corporate purposes, including research and development.
Office—1860 Franklin St., Santa Monica, Calif.
Under¬
writer—Bear, Stearns & Co., New York.
»
per

for account of

•
Billups Western Petroleum Co. (5/28)
A
April. 1 filed $5,000,000 of 6% participating debentures
due May 1, 1984 and 1,000,000 shares of common stock

to be offered in units of $10 of debentures and two
shares of stock which will not be transferable separately
until Nov. 14, 1959.
The company is also registering

50,000 shares of common stock, not included in the units,
wiR be offered to its employees. Price—In the

which

neighborhood of $22 per unit. Proceeds—To be used in
acquisition of substantially all the assets of 39 corpo¬
rations and a partnership, engaged in the operation of
195 gasoline stations in Mississippi, Texas, Louisiana,
Alabama, Missouri, and Tennessee. Underwriter—The
Johnson, Lane, Space Corp,, Savannah, Ga. > V.

,

Bridgehampton Road Races Corp.
Oct. 23

(letter of notification)

"

15,000 shares-of

common

stock

(par $1) to be offered for subscription by stock¬
holders of record Nov. 1, 1958 on the basis of-one new
share for each four shares held: unsubscribed* shares

Jan.

will

At par

or

(56Y4 cents per share). Proceeds—To purchase
cattle: for improvements: to buy additional ranch in
Queensland, Australia; and for other corporate purposes.

AY
&

of three new shares for each 10 shares then held. Price—

$6.75

Offering—Exoeeted in two weeks.

Australian Grazing A Pastoral Co., Ltd.
13 filed 4,000,000 shares of common stock. Price—

A

Benson-Lehner Corp.
May 4 filed 89,620 shares of common stock, of which
76,620 shares are to be offered for subscription by com¬
mon stockholders of record April 30, 1959, on the basis

'

cumulative con¬
and 50,000 out¬

—

,

Optical Co. (6/2) ,'
May 8 filed $8,750,000 of convertible debentures due
1979, to be offered for subscription by common stock¬
holders on the basis of $100 principal amount of deben¬
tures for each 10 shales held on or about June 1, 1959;
rights to expire on or about June 17. Price—To be sup¬
plied by amendment. Proceeds—To retire all outstand¬
ing bank loans maturing Dec. 31, 1959, for working capi¬
tal and other corporate purposes. Underwriter—Stone &
Webster Securities Corp., New York.

Co., Inc., Hempstead, L. I., N. Y.

(5/25)
shares of common stock, of which
100,000 shares are to be offered publicly and 10,000
shares to employees under company's incentive plan.
Price
To be supplied by amendment. Proceeds — To
reduce short-term bank loans and to provide equipment
for development and production of propellant rockets.
Office—Alexandria, Va. Underwriter—Johnston, Lemon
& Co., Washington, D. C.

Mex.
Bausch

the aircraft and missile industries. Office—32 Industrial

Research Corp.

"AA-"':;' A '• • -'A;;..'.

—

N.

Ave., Little Ferry, N. J. Underwriter—Hamilton, Waters

• Atlantic

A.

•

mining expenses. Office—c/o Harold A.
President, Arroyo Hondo, Santa Fe, N. Mex.
Underwriter
Hyder, Rosenthal & Co., Albuquerque,

certain indebtedness, to finance increased inven¬
tories, for working capital, etc. Business—Manufacturers
of hydraulic fluid line fittings and related products for

March 31 filed 110,000

A

Proceeds—For

(par 10 cents). Price—$2 per share. Proceeds—To

• Associated .Testing Laboratories,
Inc. (5/22)
April 22 filed 166,666 shares of common stock (par 10
cents). Price—$3 per share. Proceeds—For capital ex¬
penditures and general corporate purposes, including
working capital.
Office—Caldwell, N. J.
Underwriter
—George, O'Neill & Co., Inc., New York.

■

Roberts,

repay

amendment.

'

Materials, Inc.

April 9 (letter of notification) 1,200,000 shares of com¬
mon
stock (par 10 cents),
Price—25 cents per share.

if Arnav Aircraft Associates, Inc.
May 14 (letter of notification) 150,000 shares of common

Associated Bowling Centers, Inc.

/A
<
'.c/;VA a A\-

filed 444,246 shares of common stock (par 10
Price—At prevailing market price, in the OverProceeds—To selling stockholders.

Underwriter—None.

Armstrong Uranium Corp.
(letter of notification) 3,000,000 shares of com¬
stock (par one cent). Price — 10 cents per share
Proceeds—For mining expenses. Office—c/o Hepburn T
Armstrong, Round Up Heights, Cheyenne, Wyo. Under¬
writer— Brurto-Lencher, Inc., Pittsburgh, Pa.;

Nov. 24 filed 300,000 shares of 20-cent
vertible preferred stock (par one cent)

.

the-Counter Market.

mon

&

i
- A Ai '
Basic Atomics Inc. A'~ YAAAA

March 5
;

Street, Regina, Saskatchewan, Canada.: UnderwriterCumberland Securities, Ltd., Regina, Canada.
:

stock

.

Colo. V(; -4

Ltd.

March 23 filed 745,000 shares of capital stock

(no par),
of which 500,000 shares are to be sold for the account
of the company, and 245,000 shares by the holders thereof.
Price—30 cecnts per share.
Proceeds—For explora¬
tion and development program. ; Office — 2100 Sqarth

(par $1.60)

expenses

Jan. 16

(letter of notification)

debentures due June

To

American

$1). Price—$4 per

Feb. 25 filed 1,431,200 shares of common stock (par $1),
of which 1,000,000 shares are to.be offered publicly and

maining 166/154 shares are to be issued upon the exercise
stock options. Underwriter—None. Statement effec¬
31.- ^ 4 • ;
A'y- A;.A'1

Office—744 Broad St., Newark, N. J. Business
receivable. Underwriter—Phoenix

Securities, Montclair, N. J.

stock, of which,

tive March

—To finance accounts

shares of common stock (par five
cents). Price—$6 per share. Proceeds—For research and
development program; and for equipment and working
capital. Office — 4130 Howard Ave., Kensington, Md.
Underwriters — Wesley Zaugg & Co., Kensington, Md.,
1 filed 400,000

.

of

if American Commercial Corp.
May 14 (letter of notification) 250,000 shares of preferred
stock (par 50 cents) and 50,000 shares of Class A com¬
mon stock (par 10 cents) to be offered' in units of five
shares of preferred stock and one Class A common share.
Price—$6 per unit.
Proceeds — For general business

Advanced Research Associates, Inc.

and

—

Underwriter—None.

President.

the company proposes to issue 126,072 shares to A.M.I/
for the latter's property and assets, and the re¬

stock (par $3).
Proceeds

ISSUE

Inc.

Office—Jeffersonville, Ind.. Un¬

derwriter—F. Eberstadt & Co.,

(6/8-12)

Dec.

stockholders.

REVISED

March 2 filed 292,426 shares of common

Barge Line Co.(5/25-29) /

April 30 filed 400,000 shares of common
Price —To be suoplied by amendment.

N. Y.

ITEMS

Automatic Canteen Co. of America

..

,

American Commercial

;

Specialties, Inc., Queens,

Robert Kamon is

been

ierwriter—None.

additional working capital. Office—405
Exchange National Bank Bldg., Denver, Colo. Under¬
writers—Boettcher & Co., Inc. and Bosworth, Sullivan
& Co.,

purchase

aave

PREVIOUS

Office—1301 Avenue L, Cisco, Tex.

stock at $1.25 per shara Sales personnel
given the right to purchase stock at $1.25
per share up to the amount of commission they receive
m stock sales made by them.J
Proceeds—For the opera¬
tion of other branch offices, both in Arizona and in other
dates.
Office—2001 East Roosevelt, Phoenix, Ariz. Unto

Academy Life Insurance CoMarch 31 filed

Registration

Now in

ADDITIONS

SINCE
•

be

part

offered

of claims

after

to

current

creditors in

of claims, at the rate of

one

payment of all

share for each

$4

discharged: rights to expire about two weeks

mailing of offer.

Price—$4 p*** share.

Proceeds—

(

Volume

Number 5848

189

.

.

The Commercial and Financial Chronicle

.

To pay current creditors.
Address — P. O. Box-506,
Bridgehampton, L..I., N. Y. Underwriter — None. Offer-

tag—Has been delayed.

shares of
.

;>

Petroleums, Ltd. v
v,.. March 30. filed 1,150,000 shares of capital stock of which
1,000,000 shares are owned, by Wilshire Oil Co. of Texas
stockholders and 150,000 shares are .issuable upon exer¬
cise of share purchase warrants, exercisable on or before Dec. 31, i960 at $5 per share... Off ice—630 Eighth
Avenue, S. W., Calgary,' Canada. " \

;
-

:.

Brockton Edison Co. -(6/23)

'.i

•••

;

vh'May 7 filed $5,000,000 of first mortgage and collateral
trust bonds due April 1, 1989. Proceeds—To prepay its
-fe short-term, bank loans,
to. purchase $2,014,100 of deS 'i benture bonds and $1,665,100 of common stock of Mon-Ti taup Electric Co., and for construction! purposes. Under¬
writer

To-

—

Probable

t

be

determined

by ! competitive

bidding,

bidders:

Halsey, Stuart
Co; Inc.; Stone &(
Corp.; Kuhn; Loeb & Co., Salomon
Bros. & Hutzler and Wood Struthers & Co. (jointly);
Kidder, Peabody & Co.. White Weld & Co. and Shields
& Co. (jointly): Eastman Dillon, Union Securities & Co.
'mV Bids—Expected to be received up to 11 a.m. (EDT) on
Webster

Securities

'

'

June

"■

23.

■■

■

Brookridge Development Corp.
10 (letter of notification) $200,000 of 6% 15-year
($500 per unit).
capitals Office—
901 Seneca Ave., Brooklyn 27, N., Y: Underwriter —
Sano & Co., 15 William St., New York; N. Y.
*

Dec.

hi: convertible debentures. Price—At par
Proceeds^-For expansion and working
if.

.

'

f-\ <•

Buckeye Corp., New York :VApril 28 filed 192,039 shares of 5% convertible preferred
stock, series A, (par $10) "arid 164,299 shares of common
stock (par $1).
All of the preferred shares and 99,299

//:"•/

.

Testing Laboratories,

(Joseph

■

&

Sons
•

.

■

Vi:1!-

M'

'

Atlantic
Avnet

Underwriters

purposes.

York;

★ Callair, Inc., Afton, Wyo.
Muy 12 (letter of notification) 200,000 shares of common
stock. Price—At par ($1 per share). Proceeds—To pay
notes and accounts payable, to purchase tooling and in¬
crease inventory, and for
working capital. Underwriter
—Npne.
.

Central

Illinois Light Co.

April 23 filed $10,038,700 of 414 % convertible debens. due
1974, being offered for subscription by common stock¬
holders of record May 12, 1959, on the basis of $100 of
(debentures for each 22 shares then held; rights to expire

May 27. Price—100% of principal amount. Proceeds
—For construction program, including the repayment of
short-term bank loans incurred for such purpose.
Un¬

on

ISSUE

and Amos Treat & Co., Inc.)

Reiter-Foster

Great American
(Louis

Lr.

Rogers

Hermes

.ift-Common

$1,250,000

Co.

Joseph M&ndell

and

Electronics

Continental

Common
150,000- shares

Peabody &

Everett

(G.

New

Parks

Co.,

&

Finance,

■-.Common

—

$3(10,000

(Charles Plohn & Co.)

-Common

(Blyth & Co., Inc.) 500,000 shares

Petroleum

Texfel
-

"

!

Polarad

Electronics

(William R. Staats & Co.)
(Bids 11

a.m.

Common

150,000 shares

(Van Alstyne,

Precon Electronics

$300,000

Miami
*

(Aetna. Securities

hU.-•OT*?

Paco Products,
(A.

M. Lav; & Co.
•

bl£>.

'.mo.
-

and

Corp.

Roman

Inc.

(Charles E. Thenebe & Associates)

to

Food

Fair Properties

(Eastman

Dillon,

(Drexel

National Steel

5

Packard-Bell

f

-Bonds

Co.) $7,500,000

United

120,000

:o

(Bids

Billups Western Petroleum
Electronics

Capital

11

(Bids

Mohawk

EDT)

A.

Holman




'5

Rubber

&

to

Co.,

J

Bondi

$25,000,000

a.m.

&

Co.)

$150,000

Duke

Power Co.-

Preferred

(Bids 11

EDT) $25,000,000

a.m.

'•

t •■■■;.

June w (Wednesday)
^
Aerojet-General Corp.
—-———Common
A

Peabody 8s Co.)

June 15

Alsco, Inc.

(Monday)
Debentures

—

$4,000,000

Compudyne Corp.
(Milton D.

Blauner

Jenks,

Common

& Co., Inc. and Hallowell, Sulzberger^
Kirkland & Co.) $642,213

Medearis Industries,

Inc

Common

—

(Araos Treat & Co., Inc.) $750,000

•:*

Wellington Electronics,

Inc

(Charles Plohn

Co.)

&

June 16

Common
$1,440,COO

(Tuesday)
Debentures

Haupt & Co.; Hirsch & Co. and Amos Treat Us Co?., me.)

St. Joseph

Light & Power Co

Bonds

(Bids to be invited)

$4,500,000

United Gas Improvement Co.

Bonds

(Bids to be Invited) $10,000,000

June 17
Bakeries

(Merrill Lynch,

(Wednesday)

Co.——

■!

-Common

Pierce, Fenner 8s Smith) 60,000 shares

June

Bids

Bonds
$25,000,000

EDT)

18

(Thursday)

Worcester Gas Light Co
11

a.m.

June

Bonds
EDT)

19

$5,000,000

(Friday)

Plastic Materials & Polymers, Inc
(Filor,

Bullard & Smyth)

—Common

143,750 shares

1

June 23

Common

Co
& Co.)

Peabody

15,000 sharps
—

(Tuesday)

Brockton Edison Co

—Common
&

Co.

and

(Bids

Bonds

11:30

EDT)

a.m.

$5,000,000

Northern Illinois Gas Co.

Bonds

(Bids to be invited) $20,000,000

(Thursday)

by

&

Putnam

Co.)

I
(Bide to be invited) $5,000,000

Debentures

stockholders—underwritten

by

Wertheim

$15,417,500

June
Accurate

$200,000

Specialties,

8

&

(Monday)
& Co.)

——Common

Mart, Iric
(Shearson, Hammill & Co.)

Funds for

Business, Inc

l.

162,025 shares

$750,000

Corp

(Ira Haupt &*Co.

Debentures
and Straus, Blosser & McDowell) $1,500,000

Common

(Offering to stockholders—bids to be Invited) 714,000 shares.

August 4
Pennsylvania

Electric

(Tuesday)

Co

(Bids to be Invited)

Bonds
$15,000,090

-Class A

(Joseph Mandell & Co., Inc. and Robert L. Ferman & Co., Inc.)

Knox

_-Bohds

$8,000,000

Northern States Power Co. (Minn.)

—Common

Co.

be invited)

July 22 (Wednesday)

.Common

Inc

(Tuesday)

July 14

Jersey Central Power & Light Co

(Kidder, Peabody & Co., Inc.) 100,000 shares

Food

Bella

Co.)

...

(Milton D. Blauner & Co., Inc. and Stanley Heller
$237,500

Electronic Engineering

(Thursday)

Mississippi Power Co.

shares

38,004

to

June 25

Common

Co

stockholders—underwritten

to

(Offering

Water

-

Class ArInc.)

Fennekohl

Debens. & Com.

June 9 (Tuesday)

.-Common

710,000 shares

stockholders—underwritten by Drexel
Morgan Stanley 8s Co.) 640,306 shares

Connecticut

_

Common,

Sterling Television Co., Inc
R.

(B.

American

Debentures

Light Co.

11:30

-Debentures

—

Worthington Products, Inc.

—Common

30,000 shares

Spiegel, Inc.-

-Debentures

Co

Corp.

a.m.

:
Class A Common
(Cruttenden, Podesta & Co.) $500,000

Thriftimart, Inc.

(Wednesday)

June 4

^

Southern Electric Generating Co.
11

EDT)

am.

,

Preferred
$500,000

EDT) $50,000,000

a.m.

$5,100,000

(Offering

$9,288,277

(Haydon, Stone & Co.) $12,000,000

(Bids

and

Space Corp.) $5,000,000

(The Johnson. Lane,

(White, Weld & Co. and J. A. Hogle & Co.) 1,400,000'shares

(Bids to

(Thursday)

May 28

11

•*

—Common

Superior Window Co

152.500 shares

—

June 3

—Common
underwriting)

stockholders—no

Diego Imperial Corp

Common

and The Marshall Co.)

(Bids

Webster

&

shares

Illuminating Co.—

(Offering

Debentures

Optical Co.—

-—Common

Corp

Co.)

San

$1,500,000

:
Debentures
(Offering to stockholders—underwritten by 'Jt. G. Becker 8s Co.)

Bonds

Weld &

(White,

no
:)

Common

Herold Radio & Electronics Corp

shares

——

(Emch & Co.

40

page

J. C. Bradford & Co.)
shares

200,000

(Tuesday)

(Dominick & Dominick and Schwabacher & Co.)

»

on

(Shearson, Hammill & Co. and

Common

stockholders—underwritten by Stone
Securities Corp.) $8,750,000

to

T

Corp.-

Electronics

Falls, Iowa.

Continued

(Ira

Preferred
Bostqh

(Kuhn,' Loeb & Co.; Harriman Ripley & Co. Inc.;
The First Boston Corp.) $80,000,000
-i

Securities 412 Main Street, Cedar

The First

by

&

75,000

Co.)

&

June 2

(Offering

Development Inc

Union Securities

(par $1) to be offered in units of $200 of deben¬
tures and one share of stock.
Price — $205 per unit.
Proceeds—For working capital. Office—Suite
421r 901
Sherman Street, Denver, Colo. Underwriter—Associated

$600,000

Philadelphia Electric Co

$9,988,500

Corp.)

stock

Common

—

i——

Mansfield Tire & Rubber Co

(Wednesday)

stockholders—underwritten

$780,000

Inc.)

Blauner & Co., Inc.)

(Milton D.

Florida Power &

$300,000

Crucible Steel Co. of America
(Offering

Co.,

&

Bruce

Industries Corp

Telectro

(Kidder,

May 27

HI

$525 000

Inc.-——..—Common

Hotel,

Motor

Common

Teleflex Ltd

Preferred

—

and Clark, Landstreet & Kirkpatrick, Inc.i
SiOO,000
..

Shoreham

iV>

Noel & Co.) 200,000 shares

Corp

Virginia Electric & Power Co—

Johnson)

&

Common

Common

(Richard

Underwriters

(Hirsch 8s Co.; Bache 8s Co. and Equitable Securities Corp.!

Corp.

——Common

Extruders, Inc

Common

shares

100,000

Co.)

investment.

Colorado Water & Power Co.
Feb. 25 (letter of notification)
$220,000 of 6% unsecured
debentures due April 1, 1964 and 1,100 shares of common

$750,000

(Charles Plohn 8s Co. and Netherlands Securities Co., Inc.)
$875,000

Purepac

Common

Weld &

Proceeds—For

(Kidder,

100,000 shares

Co.)

&

Public Service Electric & Gas Co.

Inc.

(White,

Debens.

Poly Industries, Inc

Co., Inc.—Common

(Myron A. Lomasney &;Co.)

Fleming Co.,

$1,237,500

Corp

Peabody

Civic Finance Corp.

EDT) $75,000,000

Electro-Mechanical Specialties

market.

.Common

(Charles Plohn & Co.)

Consolidated Edison Co. of New York, Inc.—Bonds,
•;

..Common

and Roman & Johnson)

Burndy Corp.

Co

Telephone

Common

Electronics Corp

Bausch & Lomb

(Tuesday)

May 26
Interstate

$500,000

Investors Funding Corp. of New York

(Offering

California

Co.)

&

Nuclear

—Bonds
$14,000,000

EDT)

noon

Kimball

C.

(Aetna Securities Corp

560;000 shares

West Peim Power Co.l-l
(Bids

At

—White, Weld & Co., New York, and Dean Witter &
Co., Los Angeles, Calif. Offering—Expected late in June.

Debentures

Inc

N.) & Co

..:.—Common

Corp.———

(Bache & Co. and Allen & Co.)

-

Colonial Energy Shares, Inc., Boston, Mass. J
May 5 filed 1,100,000 shares of common stock.
Price—

$300,000

^Investment Corp. of Florida

$298,500

Inc.)

Telecomuuting Corp.

-

Hirsch (P.

y

Common

(Kidder, Peabody & Co., Iric: >-126,000 shaTes

Reori Resistor Corp.—

Civic Finance Corp. (6/2)
May 1 filed 30,000 shares of common stock (par $2). Price
—To be supplied by amendment. Proceeds—To
provide
additional working capital. Office—633 North Water
St.,
Milwaukee, Wis. Underwriters—Emch & Co. and 3The
Marshall Co., both of Milwaukee, Wis.

(Reynolds & Co., Inc. and Lester Ryon3 & Co.) $8,000,000*

Industries, Inc.
Preferred & Common

110,000 shares

Co.)

..—.Common
$125,000

(Frank Lerner Co.)

Dalton

Price-—

Superior Window Co

(Monday)

Co., Inc

Consolidated Petroleum

(Kidder,

Hampshire Ball Bearings, Inc.—^—Common

r

•

;

■

1

Securities, Inc.)

(Best

..

.Common

Multi-Amp Electronic Corp.———

Y,S

Debentures

$1,500,000

Co.,

Tobacco

900,000 shares

Co.)

Co.

—

(Kidder,

Development Corp.

share. Proceeds—For purchase and development
of industrial properties and for working
capital. Office
—Chattanooga, Tenn. Underwriter—None.
per

(Offering not underwritten) $500,000

Class A Stock

Realty Corp

Levine's,. Inc.

-

Corp.-—
&

(.(;

.Common

(C; E; Unterberg, Towbin & Co., .Inc.).

-

A

Oil

$20

Spartans Industries, Inc

(Offering to stockholders—underwritten- by Emanuel Deetjen

$4,000,000

Inc.)

Chattanooga Industrial

March 25 filed 37,500 shares of common stock.

Common

(Offering to stockholders) $300,000

(Paul

Stores, Inc..'

Co.,

•
Century Brick Corp. of America (5/25-29)
April 6 (letter of notification) 150,000 shares of common
stock.
Price—$2 per share. Proceeds—To be added to
general funds of the company. Office—1020 G. Daniel
Baldwin Building, 1005 State Street, Erie, Pa. Under¬
writer—Summit Securities, Inc., New York, N. Y.

(Newhard, Cook & Co.) 132,500 shares

Florida-Southern Land Corp

r

(Friday)

Commerce, Washington, D. C

$1,006,250

8s

York.

CALENDAR

May 29
Bank of

(Summit Securities, Inc.) "$300,000

(Alkow

Dominick, New

construction program. Office—Victorville, Calif. Under¬
writer—William R. Staats & Co., Los Angeles, Calif.

June

...Common

CCbaries Plohn & Co.)

&

California Interstate Telephone Co.
(5/26)
April 30 filed 150,000 shares of common stock (par $5).
Price —To be supplied by amendment. Proceeds — To
discharge current short-term bank borrowings and for

(Monday)

Electronics Corp.——-

Crown Self-Service

derwriter—Eastman Dillon, Union Securities & Co., Hew

(Cruttenden, Podesta & Co.)

Commercial Barge Line Co.---Common
(F. Eberstadt & Co.) 400,000; £}hares
m. .'
•
Research Corp.—„H_-.-___.Common

v

•

•Oil

Dominick

—

aijid Schwabacher & Co., San Francisco, Calif.

**

$499,998

Century 3rick Corp. of America———Common

-?tr

connection

•

Clark, Larrdstreet & Kirkpatrickp
y
^

and

(Michael G. Kletz & Co., .Inc.

•«ic-

in

—

(Johnston, Lemon & Co.).110,000 shares

;

issued

Burndy Corp., Norwalk, Conn. (6/2)
May 5 filed 152,500 shares of common stock (par $1), of
which 125,000 share are to be offered for account of the
company and 27,500 shares for the account of selling
stockholders.
Price
To be supplied by amendment.
Proceeds—For repayment of mortgage obligations; shortterm bank borrowings; and for various other
corporate

Inc.)
$1,400,000
•
('• •
"
*
;■

May 25
American

-f?

be

—None.

y>»'

————-Common

—

Walker

/■

Commori

Inc

(George, O'Neill is Co., Inc.)

Lytle Corp.
r

-

(Friday)

May 22

.

will

acquisitions of businesses and assets; the
65,000 common shares are reserved for issuance
under Employee Restricted Stock Options. Underwriter

NEW
Associated

stock

common

certain

other

Britalta

a'

with

39

(2335)

September 10 (Thursday)
Georgia Power Co_
(Bids to be invited) $18,000,000

40

The Commercial and Financial Chronicle

(2336)

Commerce Oil

38

Refining Corp.

bonds due
Sept. 1, 1968, $20,000,00 of subordinated debentures due
Oct 1, 1968 and 3,000,000 shares v«f common stock to b«
offered in units as follows: $l,00u of bonds and 48 sharei
of stock and $100 of debentures
nine shares of stock
16,1957 filed $25,000,000 of first mortgage

Dec

by amen^nent. Proceeds — Ti
Underwriter—Lehman Brothers, Ne»

be supplied

Price—To

construct refinery.

Offering—Indefinite.

York.

stock.

Office—450 So. Main St.,

Salt
Lake City, Utah. Underwriter—Earl J. Knudson & Co..
Salt Lake City, Utah.
investment.

ceeds—For

,

Compudyne Corp. (6 15-19)
15 filed 214,071 shares of common

stock (par 25
cents), of which 172,000 shares are to be offered for the
account of the company and 42,071 shares for the account
of a selling stockholder. Price—$3 per share. Proceeds—
To continue development of products and control tech¬
niques for incorporation into the company's present con¬
trol systems: and for working capital. Office—404 South
Warminster Rd„ Hatboro, Pa.
Underwriters—Milton D.
JVIav

& Co., Inc., New York: and Hallowell,
berger, Jenks, Kirkland & Co., Philadelphia. Pa.
Blaurier

Sulz¬

(6 4)

stockholders of record June 3, 1959, at the

common

rate of one new share for each four shares or fractions

thereof then held; rights to expire on or about June 23.
The

remaining 982 shares are to be offered for subscrip¬
employees. Price—To be supplied by amendment.
Proceeds—To repay iri part the company's outstanding
bank loans: to finance part of its 1959 construction pro¬
gram, and for other corporate purposes. Underwriter—
tion by

Consolidated Edison Co. of New York

(5/26)

Consolidated

Electrodynamics Corp.
April 29 filed $7,616,500 of 4%% convertible subordin¬

'

ated debens. due June 1, 1.984, being offered for subscription by common stockholders in the ratio of $100 deben¬
tures for each 14 shares of common held as of
May 20;

rights to expire on June 8. Price—At par. Proceeds—To
pay bank loans. Offiee—Pasadena, Calif. Underwriter—
Blyth & Co., Inc., New York and San Francisco.
•

Consolidated

Natural

Gas

on

a

1-for-10 share basis to stockholders of record

May 21, 1959; rights to expire
finance

construction.

June

on

per share. Proceeds—Additions to

10.

Price—$47

Treasury funds and to

Underwriter

—

None.

Offering—

Expected today (May 21).
•

Consolidated

Petroleum Industries, inc.
(6/1)
April 30 (letter of notification) 80,000 shares of 6% con¬
(par $3.50) and 80,000 shares of
common stock
(par 10 cents) to be offered in units of
one share of
preferred and one share of common. (Pre¬
vertible preferred stock

ferred stock
fhOn

may be converted into two shares of CC3«-

stock at ahy time.)

—For

£rice4-$lY5

per

unit, Proceeds

development of

gas properties. Office—908 Alamo
Building. San Antonio, Texas.
U ndertvriter—Frank Lerner Co., New7 York, N. Y,

National

•

Bank

Continental Tobacco

Co., Inc. (6/1-5)
(letter of notification) 100,000 shares of com -'
mon stock (par 10
cents). Price—$1.25 per share. Pro¬
ceeds—For general corporate purposes. Office—607-12th
Avenue, Huntington, W. Va. Underwriter—Best Secu¬
rities, Inc., New York.
April 2

Cree

Mining Corp. Ltd.
April 17 filed 260,000 shares of

common

stock.

Price—

80 cents per share.

Proceeds—For exploration program.
Office—2100 Scarth St., Regina, Saskatchewan. Canada.
Underwriter — Cumberland
Securities
Ltd.,' also of

Begina,

common

(par $2d), Pfr«!2— To be supplied by amendment.Proceeds—To gelling stockholders. Office—145 Conklin
Ave., Bio^hamton, N. Y. Underwriter—None.

Ifcrown Self-Service Stores, Inc.

(5/25-29)
April 10 filed 250,000 units, each unit consisting of one
share of common stock and two common stock
purchase
Price—$5

per unit.

Proceeds—For establish¬

of proposed new

stores, to pay accounts payable
(trade), to be applied to extinguish long- and shortterm loans, and the balance to increase
working capital.
Office—368 E. 87th Street,
Chicago, 111. Underwriter—
Charles Plohn & Co., New7 York.
.

•

Crucible Steel Co. of America

(5/27)
May 4 filed 99,885 shares of cumulative convertible pre¬
ferred stock (par $100) to be offered for
subscription bv
common

best efforts basis.

Inc. (Del. )
outstanding shares of class A
(par 20 cents) being offered by Trans *

C. Transit System,

D.

filed

23

stock

common

stockholders




of

record

Office—901 S. Lake Street, Farmington, N. Mex.
writer—Investment Service Co., Denver, Colo.

Under¬

• Electro-Mechanical
Specialties Co., Inc. (5 26)!
April 27 (letter of notification) 100,000 shares of capital
stock (par 20 cents).
Price—$3 per share...Proceeds—To pay in full a current debt of the company to
Joseph
Gcodman and for additional working capital.
Office—
743 W. 39th Street, Banning, Calif. Underwriter—Myron
A. Lomasney & Co.. New York. N. Y.
•'

i
,

v;

'

I1

•

•

j.-.'f-L'

A

Electro

Networks, Inc.
(letter of notification) 100,000 shares of com-»
mon stock
(par 10 cents). Price—$2.70 per share. Pro-,
ceeds
To purchase test equipment, and for general
working capital. > Office—1920 Park St., Syracuse, N, Y.

350,000

—

Underwriter

Charles

—

Plohn

&

Offering—Expected momentarily.
Electronic

Co.* of

Engineering

vV'"':.'.

(6/8-12)

Co., New York, N. Y.
./
^
California

:■/

..

'

'

May 13 filed 100,000 shares of common stock, of which
78,750 shares are to be offered for the account of the

(including 10,000 shares initially to employees)

company

and 21,250 shares for account of eight selling stockhold¬
ers.
Price—To be supplied by amendment.
Proceeds—

Caribbean

For

to the holders of its

writer—Kidder, Peabody & Co. Inc., New York.

Airways, Inc., which owns all of this stock,
outstanding class A stock, and hold¬
outstanding 5%% convertible subordinated
debentures of record April 22, on the basis of one share
its

of

ers

A

class

for

stock

each

three shares

of

the

class

A

stock of Trans Caribbean which such holders either hold
as

stockholders

version

or

their

of

to which they are entitled upon con¬

debentures

(with an oversubscription
May 22.
Employees of

privilege); rights to expire

capital expenditures and

working capital.

Undeiv

• Electronics
Capital Corp. (5/28)
April 27 filed 1,200,000 shares of common stock (par $1).
Price—$10 per share. Proceeds—For investment. Office—
San Diego, Calif. Underwriter — Hayden, Stone &
Co.,

New York.

Emerite Corp.

on

Trans Caribbean and its subsidiaries will have the right

Jan. 19

purchase up to 100,0D0 of the said 350,000 shares. Price
—$10 per share.
Proceeds—To selling stockholder. Of¬

common

to

by

(letter of notification) 250,000 shares of series 3
stock (no par) to be offered for subscription
on the basis of one share of series 3

stockholders

itock for

3600 M

held; unsubscribed shares to other stock¬
holders.
Rights expire 30 days from offering date.
Price—$1 per share.
Proceeds—For working capital.
Office—333 S. Farish Street, Jackson, Miss. Underwriter

•

South, New York 19, N. Y., and
St., N. W., Washington, D. C. Underwriter—None.

DeJur-Amsco

Corp.

March 31 filed 225,000 shares of class A stock (par $1).
Price—To be supplied by amendment.
Proceeds — To

selling stockholders. Underwriter—H. M. Byllesby & Co.,
Inc., New York and Chicago.
•

DeJur-Amsco Corp.

March

31

filed

debentures due
Proceeds

$1,000,000

of

convertible

subordinated

Price—To be supplied by amend¬
To retire mortgage loans and bank

1974.
—

and to

provide additional working capital and for
general corporate purposes. Underwriter—H. M. Byllesby
& Co., Inc., New York and Chicago.
Derson Mines Ltd.

June 5 filed 350,000 shares of common stock.

Price—$1
share. Proceeds—For new equipment, repayment o1
loan, acquisition of properties under option, and other
corporate purposes. Office—Toronto, Canada, and Em¬

per

porium, Pa

Underwriter—None

;

Development Corp. of America
April 30 filed 1,376,716 shares of common stock (par $1)
reserved for issuance upon conversion of shares of the
company's $1.25 cumulative convertible preferred stock
received by DCA common stockholders in connection
with the recently consummated merger of Real Estate
Equities, Inc., into DCA and the plan of reorganization
consummated

in

connection

therewith.

Underwriter—

None.

bentures for each 30

common

shares

held

on

May 14,

1959; rights to expire on June 1. Price—100% per prin¬
cipal amount. Proceeds—For plant expansion and work¬
ing capital. Underwriter—Blair & Co., Inc.. New York.

DIT-MCO, Inc.
April 15 filed 30,000 outstanding shares of common stock.
Price—$10.50 per share. Proceeds—To selling stockhold¬
ers.

Office—911

writer—Midland

.Broadway, Kansas City. Mo.
Under¬
Securities Co., Inc., Kansas City, Mo.

Diversified Inc., Amarillo, Ttxas
Jan. 6 filed 300,000 shares of comn»bh

cents).

stock (par 50
Proceeds—For acquisition
for organization or acquisi¬

of

COhsumer

finance business, and balance to be
working capital. Underwriter — Investment
Service Co., Denver, Colo., on a best efforts basis.

USed
•

for

Duke

Power Co.

(6/9)

v>

May 6 filed 250,000 shares of preferred stock, series B
(par $100). Proceeds—To finance construction program.
Underwriter—To be determined by competitive bidding.
Probable bidders: Eastman, Dillon, Union Securities &

Co.;

Mav

26,

1959,

on

the

shares

of series

1

and/or series 2

t■[

Empire MiJIwork Corp., Corona, N. Y.
April 17 filed 95,000 outstanding shares of common stock.
Price
$10.25 per share. Proceeds — To selling stock¬
—

holders.

Underwriter—None.

Equity Annuity Life Insurance Co.
April 21 filed $1,000,000 of Variable Annuity Policies.
Price—No less than $120 a year for annual premium
contracts and no less than $1,500 for single premium
contracts. Proceeds—For investment, etc. Office—2480
16th Street, N. W., Washington, D. C.
Underwriter—
None.
..,///
■. - -■
/. v/,
//
• Fedders
Corp., Long Island, N. Y. \
l?/
May 12 filed $3,815,800 of sinking fund subordinated de¬
bentures, due May 31, 1959, with warrants to purchase
152,632 shares of common stock to be offered for sub¬
scription by common stockholders in units of $100 of

debentures with warrant for the purchase of four shares
one unit for each 50 shares held.

of stock at the rate of

Price—$100 per unit. Proceeds—To be used for the most
part for the purchasing of products by company's dis¬
tributors and dealers; and the balance will be used for
general corporate purposes.
Underwriter—Allen &

Co.,

The First

Boston Corp.; Morgan Stanley & Co.;
Stone & Webster Securities Corp. Bids—Expected to be
received up to 11 a.m. (EDT)

on

June 9.

Research, Inc.
(letter of notification) 150,000 shares of

S

1968.

The

company

proposes

to

offer

of Federated.

N. Y.

Office—1 South Main

Street, Port Chester,

Underwriter—None,

Federated Finance Co.
Nov. 17

(letter of notification)

$300,000 of 10-year 3%
Price—At par (in de¬
each). Proceeds — For working
capital, to make loans, etc. Office—2104 "O" St., Lin¬
coln, Neb. Underwriters — J. Cliff Rahel & Co. and
Eugene C. Dinsmore, Omaha. Neb

lenior subordinated debentures.
of $1,000

Fidelity Trend Fund, Inc., Boston, Mass.
May 1 filed 50,000 shares of capital stock. Price—At net
asset

value.

Proceeds

—

For

investment.

Investment-

Manager—Fidelity Management & Research Co., Boston,
Agent—Crosley Corp., Boston, Mass.
Offering—
To be made within organization.
^ /

Mass.

Finance For Industry, Inc.
^,1
Oec. 16 filed 200,000 shares of class A common stock.
Price—At par ($1.50 per share). Proceeds—For
working
:apital. Office—508 Ainsley Bldg., Miami, Fla. Under¬
writer — R. F. Campeau Co., Penobscot

Bldg., Detroit*
{

stock (par 50 cents). Price—$2 per share. Proceeds
—For mining and selling of ore. Office—110 E. Main
St.,

Florence, Colo.. Underwriter—Harris Securities Corp..
York, N. Y.

New

El PaSb Electric Co.

Fleming Co., Inc., Topeka, Kan. (5/26)
May 1 filed 100,000 shares of common stock (par $5),
of which 75,000 shares are to be offered for the account
of the company, and 25,000 shares for the account of

certain

selling stockholders.

amendment.

April 16 filed 76,494 shares of common stock (par $5)
being offered to common stockholders of record May 11,
1959, on the basis of one new share for each 25 shares
of common stock then held (With an oversubscription
privilege); rights to expire on May 26. Price—$28 per
share. Proceeds—To retire outstanding short-term notes,
and for 1959 constructibn program.
Dealer-Manager—

Corp., New York.

Electric City Supply Co.
April 6 (letter of notification) 300,000 shares of class A
stock (par 25 cents). Price—$1 per share. Pro¬
ceeds—For inventory, equipment, working capital, etc.
common

due

$210,000 of the debentures to purchase the capital stock
of Consumers Time Credit,
Inc., a New York company;
$442,000 of the debentures in exchange for Consumer®
debentures; and $226,000 of the debentures in exchange
for the outstanding 12% debentures of three subsidiaries

Mich.
com¬

mon

Stone & Webster Securities

Federated Corp. of Delaware
29 filed $918,000 of 6% convertible subordinated

Dec.

debentures

nominations

Price—$3 per sharek

undeveloped t§al estate,

tion

each three
stock

—None.

Di-Noc Chemical Arts,

Inc.
April 8 filed $947,200 of 5V2% convertible subordinated
debentures, due May 15, 1971, being offered for subscrip¬
tion by common stockholders in the ratio of $100 of de¬

of

common

New York.

March 27

stock

ment

Jan.

Eckert Mineral

Crowley's Milk Co., Inc.
March 26 filed 60.00Q
qytst*ricling shares of

Warrants.

Finance, Inc. (6/1-5)
$500,000 of 7% subordinated debentures,

9 filed

March

Thursday, May 21, 1959

A.pri] 2

2, 1974, with attached warrants for the pur¬
chase of 100,000 shares of class A common stock. Price
—At face amount (in units of $500 each). Proceeds—To
finance making of additional loans and to reduce shortterm debt. Office—3800-34th St., Mt. Rainier, Md. Un¬
derwriter—Paul C. Kimball & Co., Chicago, 111., on a
clue

•

Co.

April 28 filed 821,256 shares of capital stock to be of¬
fered

Dalton

March

notes

April 24 filed $75,000,000 of first and refunding mort¬
gage bonds, series P, due June 1, 1989.
Proceeds—To
retire short-term bank loans of $27,000,000, and also
be used toward the cost of the company's construction
program. Underwriter—To be determined by competi; tive bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.: Morgan Stanley & Co.: The First Boston Corp. Bids
—Expected tc be received up to 11 a.m. (EDT) on
May 26.

,

Inc.
(letter of notification) 300,000 shares of com¬
mon stock (par 10 cents).
Price—$1 per share. Proceeds
—For working capital. Office—Mearns Bldg., 142-148 N.
Washington Ave., Scranton, Pa. Underwriter—Sano &

ment.

Putnam & Co., Hartford. Corm.

•

held:

stock

.

.

fices—160 Central Park

May 15 filed 38,986 shares of common stock (no par), of
which 38,004 shares are to be offered for subscription
by

common

Cycon,

of

Computer Systems, Inc.
April 21 (letter of notification) 100,000 shares of com¬
mon stock (par 10 cents).
Price—S3 per share. Proceeds
—For working capital.
Office — 611 Broadway, New
York. N. Y. Underwriter—Adams & Peck, New7 York,
N. Y. Offering—Postponed indefinitely.

-^Connecticut Water Co.

share of convertible preferred stock

of

March 25

•

(letter of notification) 900,000 shares of com¬
Price—At par (10 cents per share). Pro¬

28

mon

one

shares

Co., New York, N. Y.

Commercial Investors Corp.
Nov

for each
rights to expire on
June 9.
Price—At $100 per share, (flat).
Proceeds—
For expansion program. Underwriter—The First Boston
Corp.. New York.
*
basis of

39

Continued from page

.

Proceeds—For

Price—To

&

Co., New York.

•

Florida

Power

be

supplied by"

working capital.

Distributor of food products.

Business—

Underwriter—White, Weld!
■

Corp.

April 16 filed 703,485 shares of common stock (par $2.50)
being offered for subscription by common stockholders
of record May 14, 1959, on the basis of one new share
for each 12 shares of common stock then held
(with an
oversubscription privilege); rights to expire on June 3,
1959.
Price
$25 per share. Proceeds—To pay off $7,000,000 of temporary bank loans, which were incurred
—

to meet construction
be

applied

to the

expenditures, and the balance wilt
1959 construction program,
Under-

.

Volume 189

Number 5848

.

.

.

The Commercial and Financial Chronicle

writers
Kidder, Peabody & Co. and Merrill Lynch,
Pierce, Fenner & Smith, Inc., both of New York.
—

• Florida Power &

Light Co. (6/3)
May 8 filed $25,000,000 of first mortgage bonds due 1989.
Proceeds—To be used to provide additional electric fa¬
cilities and for other corporate purposes, including re¬
payment of $7,000,000 of. short-term bank loans made*
in March, 1959, for similar purposes. Underwriter—To
be determined by competitive bidding.
Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Merrill Lynch, Pierce,
Fenner & Smith, Inc. and Kidder, Peabody & Co. (joint¬
ly); White, Weld & Co.; The First Boston Corp. Bids—
Expected to be received up to 11:30 a.m. (EDT) on
June 3 at Room 2033, Two Rector St., New York, N. Y.
• Florida-Southern Land
Corp. (5/25-29)
April 13 filed 2,000,000 shares of common stock. Price/
$2 per share.
Proceeds — For construction of motel

(2337)

Proceeds—To Richard Borden Industries,
Inc., the sell¬
ing stockholder. Underwriters—Auchincloss, Parker &

Redpath, Washington,
Co., New York.

Office

—

Tom's

Harbor, Fla.

Underwriter—Alkow & Co., Inc., New York.

•

Glickman

Corp.

ties, Inc., 4314 N. E. 96th Ave., Portland, Ore.

Office—565

Fifth

May 20.

of Food Fair Properties.

It is proposed

to offer, these securities in units each consisting of $1,000
principal amount of the bonds and a warrant to pur¬
—

common

To

shares.

Price—$1,000

be used for loans

to

per

unit.

subsidiaries.

Pro¬

Office—

Philadelphia, Pa.
Underwriter—Eastman Dillon, Union
Securities & Co., New York.
Food Fair Properties, Inc.
See Food Fair Properties Development Inc., above.

if Food Mart, Inc. (6/8-12)
May 15 filed 162,025 shares of

common stock (par $2).
amendment. Proceeds—To
selling stockholders. Office—1000 Robert E. Lee Rd., El

Price—To

be

Paso, Tex.

Underwriter—Shearson, Hammill & Co., New

supplied

by

York.
Foundation Investment Corp., Atlanta, Ga.

Franklin

Electric Co.,

Inc.

May 12 filed 40,000 shares of
which

20,000 shares are to be
company, and 20,000 shares for the account of certain
selling stockholders. Price—To be supplied by amend¬
ment. Proceeds—To be advanced to a subsidiary for the
purpose of. constructing an addition to a building now
being leased from the subsidiary.
Office — 400 East
Spring Street, Bluff ton, Ind. Underwriter—Fulton Reid
& Co., Inc., Cleveland, Ohio.
•

Funds For Business,

Inc. (6/8-12)
May 8 filed 500,000 shares of class A stock (par 50 cents).
Price—$1.50 per share. Proceeds—For working capital.
Office—120 East 41st Street, New York. Underwriters—
Joseph Mandell & Co., Inc., New York; and Robert L.
Ferman & Co., Inc., Miami, Fla.
General Aniline & Film Corp., New York

Jan. 14, 1957 filed 426,988 shares of common A stock (n«

par) and 1,537,500 shares of common B stock (par $l)r
Proceeds—To the Attorney General of the United States
Underwriter—To be determined by competitive bidding
Probable bidders: Blyth & Co., Inc., and The First Bos¬
ton
Corp.
(jointly); Kuhn, Loeb & Co.; Lehman
Brothers, and Glore, Forgan 8c Co. (jointly). Bids—Had
been scheduled to be received up to 3:45 p.m. (EDT) on
May 13 at Room 654, 101 Indiana Ave., N. W., Washing
|on 25, D. C., but bidding has been postponed
General

Merchandising Corp., Memphis, Tenn.

Feb. 18 filed 250,000 shares of class "A" common stock

(par one cent). Price—$10 per share. Proceeds—For
Working capital and general corporate purposes. Under¬
writer— Union
Securities
Investment
Co., Memphis,
Tenn. Statement effective April 24.
-

General Underwriters Inc.

April 6 (letter of notification) 225,000 shares of com¬
capital stock (par 25 cents).
Of the total, 195,000

mon

shares

are

to be offered for the account of the company

and 30,000 shares for a

selling stockholder. Price—$1

per

share. Proceeds—For furniture inventory and improved

merchandising methods, to finance the real estate depart¬
and insurance policy loans. Office—211-215 Pine

ment

St, Pine Bluff, Ark. Underwriter—Lovan Securities Co.,
Inc., Pine Bluff, Ark.
•

General

Waterworks

•-

/:<

Corp.

the basis of

on

stock

common

Life Insurance

Alstyne, Noel & Co., New York.
indefinitely.
>

Offering—Postponed

if Holliday Minos, Inc., Noxon, Mont.
May 12 (letter of notification) 700,000 shares of com¬
mon stock
(par two cents). Price—10 cents per share.
Proceeds—For mining expenses. Underwriter—None. ,"

-

.

Home-Stake Production Co., Tulsa, Okla.
Nov. 5 filed 116,667 shares of common stock (par $§)•

one

warrant per share of stock held

(1,to holders of

are now outstanding); (2)
(par $1.50) of Government Employees
Co., on the basis of 1 Vz warrants per share

converted

into common stock prior to the record
date,
164,733 common shares would be outstanding.
Price—$3 per share. Proceeds—For capital and surplus.
Office—Government Employees Insurance
Bldg., Wash¬
ington, D. C. Underwriters — Johnston, Lemon & Co.,
Washington, D. C.; Eastman Dillon, Union Securities &
Co., New York; and Abacus Fund, Boston, Mass. Offer¬
ing—Indefinitely postponed.
a

total of

Great American

Realty Corp.

(5/25-29)

March 30 filed 900,000 shares of class A stock

(par 10
Price—To be supplied by amendment. Proceeds
—For working capital. Office—15 William
Street, New
York. Underwriter
Louis L. Rogers Co. and Joseph
cents).

Mandell Co., Inc., both of New York.
4

America, Inc.
250,000 shares of common stock (par 10
Price—At market.
Proceeds—For investment.

filed

cents).

Office —1825

Connecticut

Avenue, Washington, D. C.
Investment
Advisory
Service,
Washington, D. C. Underwriter—Investment Manage¬
ment Associates, Inc., Washington, D. C.
Advisor

Broadway, New York 4, N. Y.

Hemisphere Gas & Oil Corp.
April 27 (letter of notification) 300,000 shares of com¬
mon stock.
Price—At par ($1 per share).
Proceeds—
For development ol oil and gas properties. Office—702
American Bank Building, Portland 5, Ore. Underwriter
—D. Earle Hensley Co., Inc., 4444 California Avenue,
Seattle, Wash.
^
Hermes Electronics Co.

April

filed

29

statement also

150,000
includes

(5/25-29)
shares of common
36,755 shares of

stock.

common

The

stock

issuable upon the exercise of options; and 147,564 shares
issuable upon the exercise of rights of holders of $5
cumulative preferred stock to convert such stock; 20,000
shares issuable upon the exercise of rights of holders of

5%

10-year sinking fund

debentures due 1965 to con¬
vert such debentures, and 734,374 of presently outstand¬
ing shares which may be offered by holders thereof.
Name

Change—This

Hycon Eastern, Inc.
ment.

company was formally known as
Price—To be supplied by amend¬

Proceeds—To be used in part towards

the pre¬
payment of notes and balance to be used for general
corporate purposes. Office—Cambridge, Mass. Under¬
writer—C. E. Unterberg, Towbin & Co., New York, will
underwrite the 150,000 shares of common.

if Herold Radio & Electronics Corp. (6/16-19)
May 18 filed $1,500,000 of 6% convertible subordinated
debentures due June 15, 1974. Price—100% of principal
amount. Proceeds—To reduce notes payable, excise taxes,
payroll taxes and other current liabilities. Office—716
South Columbus

Ave., Mount Vernon, N. Y. Underwrit¬
Hirsch & Co. and Amos Treat &
Co., Inc., all of New York.
ers—Ira Haupt & Co.,

shares of com¬
Proceeds—To
pay existing liabilities; for additional equipment; and
for working capital.
Office—East Tenth Street, P. O
Box 68, Great Bend, Kan.
Underwriter—Birkenmayer
& Co., Denver, Colo.

Nov.

Min¬

Industrial Minerals Corp., Washington, D. C.
July 24 filed 600,000 shares of common stock (par one
cent). Price—$1 per share. Proceeds—To develop and
operate graphite and mica properties in Alabama. Unlerwriters—Dearborn
both of

&

Co.

Washington, D. C.,

and

on a

Carr-Rigdom & Co.,
best efforts basis. State¬

ment effective Nov. 18.

Information Systems, Inc., Skokie, III.
Apri] 21 filed 170,000 shares of common stock to be of¬
fered for subscription by common stockholders of Panellit, Inc., at rate of one new share for each three Panellit
common shares held of record May
15, 1959. Price—$3.50
per share. Proceeds—To pay notes, for research and de¬
velopment costs; and working capital. Underwriter—

None.
International

Bank, Washington, D. C.
$5,000,000 of notes (series B, $500,000, twoyear, 3% per unit; series C, $1,000,000, four-year 4% pel
unit; and series D, $3,500,000, 6-year, 5% per unit). Prlee
—100% of principal amount.
Proceeds — For working
capital. Underwriter—Johnston, Lemon & Co., Wash¬
ington, D. C. Offering—Indefinitely postponed.
Dec. 29 filed

International

Railroads Weighing Corp.
(letter of notification) 82,626 shares of com¬
(par $1) to be offered for subscription by

April 16

stock

common

stockholders at rate of

one

new

share for each

four shares held. Price—$3 per share. Proceeds — For
research and development costs and working capital.
Office—415 Spruce St., Hammond, Ind.
Underwriter—

None.

.

Price—At par ($1 per share).

Highway Trailer Industries,

if International Recreation Corp.
May 14 filed 2,750,000 shares of common stock (par 50
cents). Of this total, 250,000 shares are under option to
Webb & Knapp, Inc., exercisable at $10 per
share, the
shares to be offered for public sale through the under¬
writers if the option is not exercised. Price — $11 per
share. Proceeds—For construction and acquisition. Office
60 State

St., Boston, Mass. Underwriter—Paine, Webber,
Curtis, New York and Boston.

Jackson &

International Tuna Corp.

April 3

(letter of notification) 175,000 shares of class
stock (par 50 cents).
Price — $1 per share.
equipment and working capital. Office
—Pascagoula, Miss. Underwriter—Gates, Carter & Co.,
Gulfport, Miss.

A

common

Proceeds—For

• Investment Corp. of Florida
(6/1-5)
April 13 filed 275,000 shares of common stock. Price—
$4,501 per share. Proceeds—For acquisition and develop¬

ment

land

of

in

Florida.

Office —1750

Sunrise

East

Boulevard, Fort Lauderdale, Fla. Underwriters—Aetna
Securities Corp., New York; and Roman & Johnson, Fort
Lauderdale, Fla.
Investors

Funding Corp. of New York (6/1)
$500,000 of 10% subordinated debenture®
due July 31, 1964, to be offered in units of $1,000. Pride
—At 100% of principal amount. Proceeds—For invest¬
Feb.

17

ment.

filed

Office—511 Fifth Ave., New York, N.

Y.

Under¬

additional

215,940

writer—None.

if Investors Research Fund,

Inc.,

Santa

May

18

shares of
For

Barbara, Calif.
filed (by amendment)
common

an

stock. Price—At

market. Proceeds—•

investment.

Irando Oil & Exploration, Ltd.
April 24 filed 225,000 shares of common stock. Price—90
cents per share. Proceeds—To defray the costs of explo¬
ration and development of properties and for the ac¬
quisition of other properties; also for other corporate
purposes.
Office—1950 Broad St., Regina, Sask., Can.
Underwriter
Laird & Rumball, Regina, Sask., Can.
—

Kaiser Aluminum & Chemical Corp.

Hickerson Bros. Truck Co., Inc.
March 11 (letter of notification) 285,000
stock.

—

—

Heliogen Products, Inc.
Oct. 22 (letter of notification) 28,800 shares of common
stock
(par $1).
Price—$5 per share.
Proceeds—Far
payment of past due accounts and loans and general
working capital. Office — 35-10 Astoria Blvd., L. I. C
3, N. Y. Underwriter—Albion Securities Co., Suite 1512,
11

—

quette Ave., Minneapolis, Minn. UndervVriter
neapolis Associates, Inc., Minneapolis, Minn.

mon

Growth Fund of

Feb.

Imperial Growth Fund, Inc.
—

(216,429 shares are now outstanding); and
(3) to holders of common stock (par $5) of Government
Employees Corp., on the basis of Vz warrant per share of
stock held (as of Dec. 31, 1958 there were
143,703 shares
of stock outstanding and
$589,640 of 5% convertible cap¬
ital debentures due 1967, convertible into shares of com¬
mon at $28.0374 per share.
If all these debentures were

(par $100) and 66,131 shares of 80-cent diyidend voting
stock (convertible—par $1). The com¬
pany proposes to offer one share of the 80-cent dividend
second preferred stock for each share of New Rochelle
Water Co. and one share of its $5 preferred and one
share of the 80-cent dividend second preferred for each
Share of New Rochelle $3.50 preferred (including accu¬
mulated unpaid dividends from November, 1950). The
offer is conditioned upon acceptance by holders of 80%
of New Rochelle stock. Office—3219 Philadelphia Pike,
Claymont, Del. Statement effective May 12.

if Giant Food Properties, Inc.* Washington, D. C.
May 19 filed $680,000 5Vz% sinking fund debentures (GT
series), due Dec. 1, 1971, together with 74,800 shares of
common stock.
Price—To be supplied by amendment.

10,000 shares to officers and employees. Price—$10 par
shares to public; $9 to employees. Proceeds—To selling
Underwriter — For public offering: Van

March 2 file,d 600,000 shares of common stock. Price—At
market. Proceeds
For investment.
Office
60 Mar¬

of stock held

mon

second preferred

$1>-

stockholder.

•

2,500,000 shares of common stock (par $1)
to be offered by company viz:
(1) to holders of common
stock (par $4) of Government Employees Insurance
Co.,

March 31 filed 16,131 shares of $5 voting preferred stock




'

.

Employees Variable Annuity Life

Nov. 13 filed

Investment

stock (no par), of
offered for account of

common

Corp.

expenses.
Price—$6 per share. Proceeds—For working capital and
Ave., New York, N. Y. Underwriter
general corporate purposes.
Office — 2202 Philtowar
York, N. Y. Statement withdrawn*: Bldg., Tulsa, Okla. Underwriter—None.

—

Jan. 13 filed 231,988 shares of common stock to be of¬
fered for subscription by stockholders; unsold portion
to be offered publicly. Price—$12.50 per share. Proceeds
—To repay notes.
Office—515 Candler Bldg., Atlanta,
Ga. Underwriter—None. Statement effective April 2.
•

/

/ ' /

334,570 shares

Food Fair Properties Development Inc. (5/27)
May 5 filed together with Food Fair Properties Inc. (1)
$7,500,000 of 25-year collateral trust bonds, due May 15,
1984 of Food Fair Properties Development, Inc. and (2)
7,500 warrants for the purchase of 750,000 shares of

ceeds

,

Insurance Co.

ceeds—For; mining expenses. Office—4334 S. E. 74th
Ave., Portland 6, Ore. Underwriter—Evergreen Securi¬

chase 100

&
•

.

Hoffman Motors

March 9 filed 260,000 shares of common stock (par

-of which 250,000 shares are to be publicly offered ana

—Bache & Co., New

Government

Feb. 5 (letter of notification—as amended) 300,000 shares
of common stock. Price—At par ($1 per share). Pro¬

stock

Kidder, Peabody

'

March 13 filed 3,357,700 shares of common stock. Price
—$10 per share. Proceeds — For properties, furniture,
fixture and leasehold improvements and other

Fluorspar Corp. of America

common

C.; and

if Gilpin (Henry B.) Co., Baltimore, Md.
May 19 filed $725,000 6% convertible subordinated de¬
bentures due June 1, 1974, and 17,500 shares of class A
common
stock. Price—To be supplied
by amendment.
Proceeds—To repay notes payable and for other
corpor¬
ate purposes*. Underwriter—Alex. Brown &
Sons, Balti¬
more, Md.

—

units and other facilities.

D.

41

Inc.

May 11 filed 64,028 shares of 4%% cumulative convert¬
ible (1959 series) preference stock (par $100) and 128,052 shares of common stock, issued in exchange for the
outstanding stock of Mexico Refractories Co. through
merger.
Price—To be supplied by amendment.
Pro¬
ceeds—To selling stockholders. Underwriter—None.

cents). Price—At prices generally prevail¬
on the American Stock Exchange.
Proceeds — To
selling stockholders. Office — 250 Park Avenue, N. Y

if Kaltman (D.) & Co., Inc.
May 13 filed 1,406,141 shares of common stock (par 50
cents) to be offered by Noma Lites, Inc., to the holders
of its 745,184 outstanding common shares at the rate of
1.9 shares of Kaltman common for each share of Noma

Underwriter—None.

common

24

filed

473,000

outstanding

shares

of

common

stock (par 25

ing

Hirsch

(P. N.)

& Co., St. Louis, Mo. (6/1-5)
April 29 filed 132,500 outstanding shares of common
stock (par $1). Price—To be supplied by amendment
Proceeds—To

selling stockholders.
hard, Cook & Co., St. Louis, Mo.

Underwriter—New-

The

period will be
To be supplied by
amendment. Proceeds—To selling stockholder.
Under¬
writer—Bear, Stearns & Co., New York.
\
stock

held.

approximately two weeks.

subscription

Price

—

Continued

on

page

42

42

The Commercial and Financial Chronicle

(2338)

Continued from page

corporate purposes. Office — 42 Broadway, New York,
N. Y. Underwriter—Amos Treat & Co., Inc., New York.

41

it Keystone Custodian Funds, Inc., Boston, Mass.
18 filed (by amendment) an additional 1,000,000
shares of Keystone Custodian Certificates of Participa¬
May

•

Extruders,

Miami

Aoril 17 filed

Inc.

(5/26)

175,000 shares of common stock.

tion, series S4. Price—At market. Proceeds—For invest¬

Price—$3
Proceeds—To be used for the purchase of
equipment, for increased inventories, and for the retire¬

ment.

ment

Thompson, Ga. (6/8-12)
May 8 filed $1,500,000 of 6% subordinated sinking
fund debentures, with class A common stock purchase
warrants attached (for the purchase of 75,000 shares or
25 shares for each $500 of debentures), together with
$180,000 shares of class A common stock (par $1). Price
—For debentures with warrants, at 100% of principal
amount; for common stock, to be supplied by amend¬
ment. Proceeds—To acquire in excess of 80% of the
outstanding stock of American Houses, Inc.; for land
acquisition and development for home erection; to re¬
pay notes to banks and suppliers; and for working capi¬
tal. Underwriters — Ira Haupt & Co., New York; and
Straus, Blosser & McDowell, Chicago, 111.

Miami, Fla. Underwriters—Aetna Securities Corp., New
York; and Roman & Johnson, Fort Lauderdale, Fla.

Knox Corp.,

• Krupp Manufacturing Co.
April 3 (letter of notification) 100,000 shares of common
stock (par 10 cents). Price—$1.25 per share. Proceeds—
To selling stockholders.
Office — 4th & Mill Streets,
Quakertown, Pa. Underwriters—Hallowell, Sulzberger,
Jenks, Kirkland & Co. and Woodcock. Hess, Moyer &

Co., Inc., both of Philadelphia, Pa.
today (May 21).

Offering—Expected

Laure Exploration Co., Inc., Arnett, Okla.
Dec. 23 filed 400,000 shares of common stock. Price—$2
per share. Proceeds—For machinery and equipment and
exploration purposes. Underwriter—None.

•

Lefcourt Realty Corp.
Jan. 29 filed 3,492,000 shares of common stock, of which

shares

2,622,000

were issued in exchange for all
of Desser & Garfield, Inc., and D.

o1

the common stock

G
& R., Inc.; 750,000 shares will be used for the exercise
of an option by the company to purchase from Big
Mound Trail Corp. some 3,784.9 acres of land on oi
before June

15, 1959; and the remaining 120,000 shares
were sold for the account of a selling stockholder
during
April, 1959. Underwriter—None.
•

Levine's, Inc., Dallas, Texas (5/25-29)
April 24 filed 110,000 shares of common stock (par $4),
of which 60,000 shares will be sold for the company's
account and 50,000 shares for the account of certain sell¬
ing stockholders. Price—To be supplied by amendment.

of

bank

leans.

Office—7575

N.

W.

37th Avenue

shares of common stock. Price—$1
per share.
Proceeds — For additional working capital.
Office—"Siloam Springs. Ark; Underwriter—None.
Utilities

Missouri

Co.

May 6 (with an oversubscription privilege);
rights to expire on May 25. Price — $26 per share. Pro¬
ceeds—To reduce bank loans.
Office — 400 Broadway,
Cape Girardeau, Mo.
Underwriter—Edward D. Jones &
held

on

Co., St. Louis, Mo.
•

Mohawk Rubber

Co., Akron, Ohio

(6/3)

May 4 filed 15,000 shares of common stock (par $1). Price
—To be supplied by amendment. Proceeds—For working
capital and purchase of equipment. Underwriter—Kid¬
der, Peabody & Co., New York.
'

Mortgage Corp. of America
April 10 filed $1,000,000 of 4%% collateral trust notes,
due May 1, 1969-79.
Price—100% of principal amount.
Proceeds—For repayment of loan.
Office—100 St. Paul

Baltimore,

Street,

Md.

Underwriter—None.

Multi-Amp Electronic Corp. (5/25-29)
May 1 (letter of notification) 99,500 shares of common
stock (par 10 cents).
Price—$3 per share.**; Proceeds—
To purchase building; for research, development, equip¬
ment
and
machinery, etc.jyand for working capital.
Business—Portable and laboratCH^y

iiistrumehts for test¬

Office—465 Lehigh/AvOn
N. J. Un¬
derwriter—G. Everett Parks & Co., Inc., 52. Broadway,

ing etc.
New

York, N. Y.

Narda UItrasonics Corp. y 1
\% '; .>>/•■, y
April 29 filed 20,000 shares;,of common-stock (par 10
cents). Price—To be supplied by amendment; Proceeds—
To retire a $100,000 outstanding bank loan and the bal¬
ance will be used for general corporate purposes. Office—
Westbury, Long Island, N. Y; Underwriter— Torpie &

tures

and other initial costs of three new stores, and
the balance of the proceeds will be used to acquire and
establish new stores. Underwriter—Kidder,

April 20 (letter of notification)

Co., New York.

dress—P.

Peabody

it Link-Belt Co.
May 14 filed 24,659 shares of
fered for

sale to

a

selected

&

its

'v':VK:^;y:(

LuHoc Mining Corp.

Sept. 29 filed 350,000 shares of
per share.

Proceeds

under option

and

—

common

stock.

Price—$1

For the acquisition of properties

for various

geological expenses,

test

drilling, purchase of equipment, and other similar pur¬
poses.- Offices—Wilmington,
Del., and Emporium, Pa
Underwriter—None.
•
Lytle Corp. (5/22-25)
April 16 filed 100,000 shares of common stock (no
par).
Price—$14 per share.
Proceeds—To retire bank loans

and for general

working capital. Underwriters—Joseph
Sons, New York; and Clark, Landstreet &
Kirkpatrick, Inc., Nashville, Tenn.
Walker

&

M. & S. Oils Ltd.

May 11 filed 390,000 shares of capital stock.

Price—60

cents per share.
Proceeds — For exploration, develop¬
ment and acquisitions. Office—5 Cobbold
Block, Saska¬

toon,

Saskatchewan, Canada.

land Securities Ltd.,
Regina,

Underwriter

—

Cumber¬

Saskatchewan, Canada.

Mansfield Tire & Rubber Co. (6/3)
May 7 filed $5,100,000 of convertible subordinated

de¬

ment.

Proceeds—To pay short-term bank
loans, and to
augment working capital. Office — 515 Newman
St.
Mansfield, Ohio. Underwriter
A. G. Becker & Co'
—

1

,

Marine Midland Corp.
April 17 filed 449,704 shares of common stock
(par $5)
being offered for subscription by common
stockholders
of record May 12,
1959, on the basis of one new share for
each

20

shares

then

held, rights to expire on June 1.
Price—$22 per share. Proceeds—To
pay an outstanding
bank loan due Sept.
30, 1962, and for general corporate
purposes. Underwriters
The First Boston
—

Corp. bnd

v^.i??a2 P n?' YniT°Tn.Securities & Co-> both
York,
N.

of New

Schoellkopf, Hutton & Pomeroy, Inc., Buffalo,
Y., and Granbery, Marache &
Co., New York.

'

Diary Carter Paint Co.
March 30 (letter of
stock

rf°r Payment of outstanding loans

and working capi¬
tal, and to selling stockholder. Office—Gunn
Highway
Rd., Tampa 7, Fla. Underwriter-^. W.
Schroeder & Co., New York
5, N. Y.
at Henderson

• Medearis Industries, Inc.
cents). Price

(6/15-19)

200,000 shares of
$3.75 per share.




Ncne.

/Vy'y.'.'

Northwest

Defense

Minerals,

.

Inc.,

yy/v
Keystone,

;iv
; |

■.

-

S.
>y,, ":-V,
'
May 4 (letter of notification) 300,000 shares of.commonirl
stock

(par .-10 cents). Price—$1 per share. Proceeds—r;
For exploring^and recovering strategic metals and pro-*
ducing same. ^Underwriter*^- CaldwellCo., >99 * Wall , /
Street, New York/.N. Y. - ■/
.
\
y. > V; *•- '.
Nuclear

Electronics

Corp.- (6/1-5)

April 29 filed 200,000 shares of common stock (par

cent)/
the

to

one

/Pride—$3.75--p^/shMe;'Proceeds--^d 'be^appliedt

payment Of an indebtedness owed to Wheaton p2
Co/, 'for payment of: bank debt; for research, development,; production* and ^marketing; for sales pro-#)
motion; and the balance .for general working capital!)&
Office—2925. N. ; Broad Street; Philadelphia, Pa. Under#./} *
writer—Charles- Plohn &;Co.,-New York. g%v-.'V-Jt*'.^bed'
Glass

Nucleonics, Chemistry&Electronics Shares,lnc.no
18 filed (by amendment) an additional 100,000 tea
shares of capital 'stock/Price—At market. Proceeds—For. ho
investment. Office—Englewood,' N. J. ~
Vfe
May

Oak Ridge, Inc.
1 4
Sept. 4 (letter of notification) 100,000 shares of common Ar
stock (par $1). Price — $3 per share/ Proceeds — For rj
working capital.
Office—U Flamingo Plaza, Hialeah, %
Fla.
Underwriter—-Henry & Associates, Inc., 11 Fla- 17
mingo PlazayHialeah, Fla. y> > .
.
.
,

Office Buildings of America, Inc.
;Jfc !
April 6 filed 91,809 shares of class A stock (par $1) and yy
10.201 shares of class B common stock (par $1) to befdf
offered in units of .nine class A shares and one class B : A
share.1 Price—$100;per unit.

Proceeds—To be available' 4)

investment in. real, estate syndicates and other real
estate. Office—9 Clinton St.. Newark, N. J. Underwriter
—None.
for

*j

*

b

4y

*

stock.

mon

For

Oil, Gas & Minerals, ;,Inc.
April 2 fileel ,260,3OQO. shares of common

stock (par 35 >
Proceeds—To retire bank;#)
Joans and for ihyeStment purposes. - Office—513 Interna-Mj|
tional Trade •Mafty New Orleans, La.
Underwriter— 01

/cents.

Price—At par

($2

150,000 shares of
per

share).

Price,—$2"per/ sliarel

(Assets Investment Co., Inc.,New Orleans, La.\

V.,

y

Welders, Inc. (
:
"UK
Dec. 15 filed 60,600" shares of common stock, $43,333.31 0)
of 3J/4% debentures maturing on or before May 6, 1965,! jx*
$692,000 of.-6% debentures maturing on or before Dec.'
31, 1974 and $123,000 of 7% debentures due on or before1 #
May 6, 1965. The company proposes to make a public ay
offering of 25,000 shares of common stock at $10 pei " '

y

O.

K. Rubber
.

com¬

Proceeds—

equipment, inventory and working capital. Ad¬
O. Box 1658, Lakeland, Fla.
Underwriter—
R. F. Campeau Co., Inc., Detroit, Mich.
new

National Life & Casualty Insurance Co.
filed 250,000 shares of common capital stock
to be offered to holders of certain of company's life
insurance policies issued on or prior to Dec.
31, 1955,
and to certain employees. Price—$4.44
per share.
Pro¬
ceeds—To increase capital and surplus.
Office — 2300
North Central Ave., Phoenix, Ariz. Underwriter—None.

v

March 25

National Steel Corp. (5/27)
May 5 filed $80,000,000 of first mortgage bonds due June
1, 1989. Price—To be supplied by amendment. Proceeds
—For expansion program.
Underwriters—Kuhn, Loeb
& Co. ; Harriman Ripley & Co.,
ton Corp., all of New York.

Inc., and The First Bos¬

it National

Steel Corp.
May 13 filed 49,000 shares of capital stock, to be offered
under

National's

Stock

Investment

Plan

for

Salaried

Employees of National and eight of its subsidiaries. V
Nationwide

Small Business Capital Investing
Corp.
April 24 filed 500,000 shares of capital stock (par 50
cents). Price — $1 per share. Proceeds — For working
capital and investments.
Office—Hartsdale, N. Y. Un¬

O.

K.

common

stock

(par

20

Proceeds—For general

Rubber, Inc., and O. K. Ko-op Rubber Welding q£

System,

on an

offering,

alternative basis.

will

17, Calif. Under¬
4, Calif.

used

be

for

Proceeds—Of the public
additional working capital

10

'y

and/or to service part 'of the company's debt. Office-* hi
551 Rio;; Grande Ave., Littleton. Colo.
Underwriter—<//
Ncne.
Statement effective April *13; >
- v
:
h

*Obby

,

v

Ozark'Air'Lines,

' '• ;>•'•/
" y: 0
March 24 (letter of notification) 59,825/shares of gen-4k
*eral commbn stock (par $1) to be offered for
subscrip->.£
tion by holders of class A and class B common stock y
and/or class *B common stock evidenced by a voting so*
trust certificate/one-share of-general common stock for
"
each 20 shares*of cl. A and cl. B common stock held.r Price?#
—$4.25 per share to stockholders: $4.75 to public. Proceeds b
—To purchase" additional flight and ground equipment ;*«.
and for working capital. Address—P. O. Box 6007, Lam-y^
bert Field, St.!-Louis-21; Mo.
Underwriter—None, but *
'Newhard, Cook: and Co. and Yates, Heitner & Woods, -y
both of St. LouiSi Mo., offered to purchase the unsubn y
scribed

shares!

expected of

To Amend Statement—Full

Electronics

May^. filed 120>000 shares
of

of

company

Corp.

(5/27)

lv;

of capital stock (par *50 cents)(jy

wflich 100,000 Shares

tfe

registration..;

132,944 shares of general common stocky

Packard-Bell

Naylor Engineering & Research Corp.
Sept. 29 (letter of notification) 300,000 shares of cumu¬
lative voting and non-assessable common stock. Price—
At par ($1 per share). Proceeds—For organizational ex¬
penses and first three months' operational expenses. Of¬
fice—1250 Wilshire Blvd., Los Angeles
writer—Waldron & Co., San Francisco

remaining shares and the debentures are .<>#■
subject to an exchange offer between this corporation:
The

share.

are to be offered for the account
and 20,000 shares for a selling stock-

y

/.

holcpr. Price—rTo be supplied by amendment. Proceeds v
—Tftconstruct and equip a new plant in Newbury Park,

Calip to reduce short-term bank indebtedness; and for
woifung capital. Underwriter—White, Weld & Co., New

-

T

York

Nedow Oil Tool Co.

May 5 (letter of notification) 150,000 shares of common
Price—$2 per share. Proceeds—To
acquire fishing tools for leasing; and for working capital.
Address—P. O. Box 672, Odessa, Texas. Underwriters—
To be designated.
stock (par 50 cents).

New

Hampshire Ball Bearings, Inc. (5/25-29)
April 27 filed 126,000 shares of common stock (par $2)
of which, 100,000 shares are to be offered for account of
company and 20,000 shares for certain selling stock¬
holders; the remaining 6,000 shares are to be offered by
the company to its employees. Price—To be
supplied by

it

pay off in full a 5% chattel
mortgage term loan; to construct an addition to its main
plant; and the balance, together with other corporate

funds will be used to purchase

machinery and equipment
plant additions, and for general corporate pur¬
poses. Office—Peterborough, N. H.
Undeijvriter—Kid¬
der, Peabody & Co. Inc., Boston, Mass.

for

new

.

,

New York

Shipbuilding Corp.
March 20 filed 83,334 shares of common
stock, to be
offered in exchange for common stock of
Higgins, Inc.,
at the rate of one share of New York
Shipbuilding com¬
for each 24 shares of Higgins common.
effective April 16.

mon

Statement

^aco

May, 11

Products, Inc., Pacoiet, A. C.

(5/26)

(letter of notification);,2,00,0 shares of 7%

ferfted stock. Price—At par
To

($50

per

pre-

share). Proceeds— J*

pay bank loans and for general corporate purposes.
Unferwriters—A. MjLaw & Co.,-Spartanburg, S. C.; and

Cl^jk, Landstreet & Kirkpatrick,

'

Inc., Nashville, Tenn. j]

faddock of California /
/
30 filed 51,847 outstanding shares' of common ;x
i (par $1) being offered "only-.to stockholders and 4
dtors cf£ The Re'finite. Corp. and will not be offered
general public." Price—$3 per share. Proceeds— //

amendment. Proceeds—To

notification) 37,500 shares of com¬
(par $1) of which 25,000 shares are
being
offered by the
company, out of authorized but unissued
•tock, and 12,500 shares are being offered
by John F
Crosby, Spring Lake, N. J. Price—$8 per share.
Proceeds
mon

*

-

National Citrus Corp.

derwriter—None.

bentures, due June 1, 1974, to be offered for subscription
by common stockholders of record June
2, 1959; rights
to expire on June 18. Price—To
be supplied by amend¬

Chicago, 111.

.

.

stock, to,, be of¬
of officers and em¬
subsidiaries.
Price—

common

group

ployees of the company and
$47 per share. *' •"

Acceptance Corp.
:
(letter of notification) $300,000 of 6% 10-year v.*
debentures to be offered for subscription qy,
by stockholders: in' denominations of $100, $500 and ay
$1,000 each. Rights will expire July 31, 1959. Price—At /.!
par.
Proceeds—For working capital. Office—Suite 487,#?'
795 Peachtree Street, N. E., Atlanta, Ga.
Underwriter—

i

Saltzman, New York.

>'*

North American

April 29

..

April 14 (letter of notification) 10,540 shares of common
stock (par $1) being offered for subscription by stock¬
holders on the basis of one share for each 31 shares

Proceeds—To be added to the general funds of the com¬
pany and will be spent for inventory, equipment, fix¬

-

Thursday. May 21. 1959

.

...

Millsap Oil & Gas Co.
Dec. 23 filed 602,786

•

.

subordinated

share.

per

.

er-

Selling stockholders, The; Refinite Corp. Office—8400 *(
Monica*Boulevard, Los/Angeles, Calif. Underwrit- j
jdjfone..—•••
v
•/" *.'.
'«*"> ' • ;;
*V■■■!■*•[
.

Paramount

Mutual Fund,

Inc.
ij0XT
Jai
filed 300,000 $hare$ of capital stock. Price—Mini-' <
miin purchase of shares is $2,500. Proceeds—For invest- :
•

mept

Office—404: North Rpxbury Drive, Beverly Hill*, :
"4 Underwriter—Paramount Mutual Fund Manage4CO, Statement" effective April. 14. / '' t
- —ti*
rce-Uible Co.
11

>

^

Filed. 555,000 shares of

la shares

maining 55,000

are

to

shares

be

are

'J

stock, of which >
publicly, and the re- ^
subject to sale under Stock C
common

offered

Volume

189

Number

5848

.

.

The Commercial and Financial Chronicle

Purchase Options granted to employees of the company.

employees. Price

,

Pjrice^$3^0 per?^hare to public.. Proceeds—rFor acquisi-

y;

tiorr and development of, 1 and,and, construction of houses
for sale?
Off ice—3850 BeachBouleyard, Jacksonville,
Fla.

Business—Construction
sale

for

to

home

Wulbern,

son,

firms.

of siriglerfamily. dwellings
Underwriter—Pierce, Carri-/
Jacksonville, Fla., and, four, other

owners.

Inc.,

V:'V 77:"' V/77'^7-

■

'

—
$25 per share. Proceeds — To pay 7 • Reiter-Foster Oil Corp. (5/29)
$6;425,000 of outstahding?bank> loan notes, representing
March 30 filed $1,500,000 of 6% convertible debentures
borrowing for working capital and other corporate pur¬
due 1969, to be offered for subscription by common
poses; to reimburse the company's treasury for a por¬
stockholders at the rate of $100 principal amount of
tion of the construction expenditures heretofore made,
debentures for each 300 common shares held as of Mayand to provide for a portion of its construction program.
28; rights to expire on June 12. Price—To be supplied
Underwriters—Dillon, Read & Co., Inc., New York; and
by amendment. Proceeds—To pay debt and for develop¬
Johnston, Lemon & Co., Washington, D. C.
ment of present properties and acquisition and develop¬

Peckman Plan Fund, Inc., Pasadena, Calif.
May 19 filed 20,000 shares of common stock (par $1)
Price—At market.
Proceeds—For investment.
Under- "

mon

writer—Investors Investments Corp.,

—918

A- Prairie Petroleum, inc.

Pasadena, Calif.

ment of additional oils and gas

May 12 (letter of notification)

-

Emanuel Deetjen.&

stock.

Price—At par

1,200,000 shares of com¬
(25 cents per share). Office

Patterson

None,

*Pennsylvania Power Co.
Aug. 1 filed $8,00.0,000 of first mortgage bonds due 1989.-1
Proceeds—To redeem a like amount, of 5% first mort
gage bonds due 1987.
Underwriter—To be determined.

bb

Building, Denver, Colo. Underwriter—
7t7/-:40v7;///7? / bb brbbbr:
■/ '•?

>

Precon

Electronics Corp.
(6/1-5)
filed 175,000 shares of common stock (par 75
Price — $5 per share. Proceeds — For working
to reimburse the predecessor for certain devel¬
expenses; for inventories and work in process;
and other general corporate purposes.
Office—120 E.
41st St., New York, N. Y. Underwriters—Charles Plohn
& Co. and Netherlands Securities Co., Inc., both of New
York, N. Y.
/://:•

April 6
cents).
capital;
opment

by competitive bidding. Probable bidders: Halsey, Stuart /
& Co. Inc.; Kidder, Peabody & Co.; White Weld & Co.
Equitable Securities Corp., and Shields & Co. (jointly)
Lehman Brothers,

Eastman Dillon, Union Securities a
Co., Salomon Bros. & Hutzler and Ladenburg, Thalmanr

J

6 Go.

(jointly); Merrill Lynch, Pierce, Fenner & Smith
and Dean Witter & Co. (jointly). Bids — Tentatively:
Pressed Metals of America, Inc.
had been expected to be received Up to 11 ami. (EDTN
on A ug. 27 but company
on Aug. 22 decided to defe* v,; April 17 filed 90,000 outstanding shares of common stock.
Price
Related to the current market price on the
sale,: pending'improvement' in market conditions... SEC
on Feb.
25, 1959 extended to June 16, 1959 period within ' American Stock Exchange. Proceeds—To selling stock¬
holders. Office—Port Huron, Mich. Underwriter—None.
which company may consummate financing.; %
—

• Peoples Drug Stores, Inc.
I ^
'May 19 filed 121,000 shares of common stock, | Price— • To be supplied by amendment.
Proceeds—For expan¬
sion program. Underwriters—Alex Brown ,& Sons, Bal¬
timore, Md.; and Kidder, Peabody & Co., New York.'':.
Offering-—Expected within the next four/weeks.
,

.

Perfecting Service Co. 26 (letter of notification) 28,250 shares of common
stock to be offered for subscription by; stockholders on
a pro rata basis. Rights expire in 15 days.
Pr|ce—At par
($10 per share). Proceeds—-For accounts, receivable and
inventories. Office—332 Atan.do Ave., Charlotte, N. C.
Underwriter—None.
?
7
bb.ybbbbbrb:bb:T.-b][b

*

'

Permachem Corp., New York
March 31 filed 2,041,331 shares of class A common stock

(par 10. cents) and 1,917 shares of class B

common stock
(par 10 cents). This covers the transfer of certain shares
pursuant to option agreements. Price — At «pver-thecounter market prices. Underwriter—None. ■ *j 7:; ,;■/, i

.

Philadelphia Electric Co. (6/3)71:
May. 7 filed 640,306 shares, of common stocks (no par)to be offered for subscription by common stockholders
of record June 2, 1959, on the basis of one new share
for each 20 shares then held; rights will expire on June
23.
Price-To be supplied? by amendment.
Proceeds—
v

To

March

be
subscription by holders of stock purchase
rights acquired in connection with life insurance policies
issued by Dependable Life Insurance Co. and to certain
offered

agents

for

bank loans and for construction program.
Underwriters-r-DreXel & Co. arid Morgan Stanley &
repay

Co.eboth of New York ,/ (■

Philippine Oil Development C©., Inc. 7*;
Apilil 10 filed 221,883,614 shares of oaphal ^tq^k, to be
offered for subscription ,by-hol4ers of .oub6ta^ing Stock

brokers

and

Price—$5

„

-

Producers Fire & Casualty Co., Mesa, Ariz.
31 filed 400,000 shares of common stock to

„,

Feb.

per

of

share.

Producers

Fire

Proceeds—For

& Casualty Co.
working capital.

Underwriter—None.

one

new." share for each -two shares

held.

sold

(letter of notification) 200,000 shares of common
(par one cent) of which 170,000 shares are to be
by the company and 30,000 shares by a selling

stockholder.

Price

$1.50 per share I Proceeds — For
working capital.
Office—1108
16th Street, N.W., Washington 6, D. C.
UnderwriterJohn C. Kahn Co., Washington, D. C.
general? expansion

—

and

Public Service Electric & Gas Co. (6/2)
May 7 filed $50,000,000 of first and refunding mortgage
1, 1989. Proceeds — To be added to the
general funds of the company and used for general cor¬
porate purposes, including payments of a portion of the
bonds due June

cost of its current construction program.

Underwriter—

To be determined

by competitive bidding. Probable bid¬
ders: Halsey, Stuart & Co. Inc.; The First Boston Corp.;
Kuhn, Loeb & Co. and Lehman Brothers (jointly):
Morgan Stanley & Co. and Drexel & Co. (jointly). Bids
Tentatively expected to be received up to 11 a.m.
(EDT) on June 2, at 80 Park Plaice, Newark, N. J. ~ »
—

•

Purepac Corp.,

New York

(6/1-5)

March 31 filed 260,000 shares of common

cents).
and

for

—

•

.

>

.

(of which 8,000 shares are tp be offered to employees).
supplied; by 1 amendment. Proceeds — To
selling stockholders. Business —/Producer of- decorative

lkmiriated

plastics. Underwriter—Reynolds

New Yorkr-

;

Go., -Inc.,

/Offering^Expec,ted.today (-May,.2Ll).

/.//,

/•Plastic/Materials Polymers/ Inc.

(6/19)
May" 11. filed. 143,750 shares .of common, stock (par 10,
cents). Price—To be supplied by amendment. Proceeds
—For construction of a plant, in Rhode Island and for
general corporate purposes. Busines^Prynarily'engaged
in the compounding and coloying qf thermoplastic raw

materials,, and the sale of the resultant products OfficeHicksville, Long Island, N. Y. Underwriter—Filor, BulCity.

lard & Smith, New York
•

Polarari Electronics Corp.

(6/1-5)

May .1, filed 100,060 shares of common- stock , (par $ 1).
Price—To be supplied by amendment;. Proceeds — For
working capital and other corporate .purposes^ Office—
43-20 34th Street, Long Island- City, N. /Y. Underwriter—.
Kidder, Peabody & Co., New York..v
'
■
-

•

Poly Industries, Inc. (6/1-5)
f \
May: 4 filed 200,000 shares of common stock (par #1),
of which 100,000 shares are to be offered for the account
pf the company and 100,000 shares for certain selling
stockholders. Price — $7.25 per share. Proceeds—For
working capital and to reduce bank borrowings.
Office
—12177 Montague Street, Pacoima, Calif. UnderwriterVan Alstyne, Noel & .Co,,. New York.
.
,

7

Potomac Electric Power Co.

April 23 filed 1,207,338 shares of common stock (par $10);
being offered for subscription by common stockholders
of record May 12, 1959, at the rate of one new share for
each five shares held; subscription rights to expire on
May 27.
Unsubscribed shares will be offered first to




Research Investing Fund of

and for road and camp construction. Office—At
Suite 322, 200 Bay St., Toronto, Ont., Canada, and c/o T.
ore

Arnold,
•

Wilson Circle, Rumson,
Co., New York, N. Y.

N. J.

Underwriter—

N. J.
Inc.

'

■

'•"/

,

,

•'/

'' ^"7

Petroleum

Richwell

Ltd., Alberta, Canada
June 26 filed 1,998,716 shares of common stock (par $1).
Of this stock, 1,174,716 shares are to be sold on behalf oA;
the company and 824,000 shares for the account of cer¬
tain selling stockholders. The company proposes to offev
the 1,174,716 shares for subscription by its shareholder*
at the rate of one new share for each three shares held,
(with an oversubscription privilege). The subscription
period will be for 30 days following issuance of sub¬
scription rights. Price—To be supplied by amendment
Proceeds—To pay off demand note, to pay other indebt¬
edness, and the balance if any will be added to working
capital. Underwriter — Pacific Securities Ltd., Van¬

Canada.

^

*

May 4 filed $5,580,000 of Participations in Partnership
Interests, to be offered for sale in units. Price—$10,000
per unit.
Proceeds—For general corporate purposes.
Office—60

East

42nd

Street,

New York.

—None.

*

Underwriter

■

• St. Joseph Light & Power Co. (6/16)
May 18 filed $4,500,000 of first mortgage bonds due 1989.
Proceeds—To repay bank loans.
Underwriter—To be
determined by competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; Oti^ & Co., Inc.; Smith,'Bar¬
ney & Co., Glore, Forgan & Co. and Blair & Co. Inc,
(jointly); Eastman Dillon, Union Securities & Co.; White,
Weld & Co.; Equitable Securities Corp. Bids—Expected
to be received on June 16.

it San Diego Imperial Corp. (6/8-12)
May 18 filed 1,400,000 shares of common stock (par $1).
Price—To be supplied by amendment. Proceeds. — For
further acquisitions; to repay two bank loans; for ad¬
vance' to a subsidiary; to repay the; remaining unpaid
balance of the purchase price of the company's new of¬
fice building; and for other corporate purposes. Office—
1400 Fifth Ave., San Diego, Calif. Underwriters—White,
Weld & Co., New York; and J. A. Hogle & Co., Salt Lake"
City and New York.
Santa's Village, Skyforest,

Calif.
convertible subordinated
sinking fund debentures due 1974. Price—At 100% of
principal amount. Proceeds — For completion of East
Dundee Village (a new amusement park near Chicago);
and for working capital and other corporate purposes.
March 27 filed $800,000 of 6%

Underwriter—None.

Schjeldahl (G. T.) Co.
23 .filed 42,500 shares of common stock, which
to be offered and sold first to present stockholders
at the rate of one new share for each eight shares held,
on April 1, 1959.
Price—$10 per share. Proceeds—For
increased plant facilities, for purchase of equipment
working capital and other corporate purposes. Office—
202 South Division St., Northfield, Minn. Underwriter
—Craig-Hallum, Inc., Minneapolis, Minn.
,

March

are

Rapid-American Corp., New York

record

May 12 (with an oversubscription privilege);
rights to expire on June 5. Price—At par (flat). Pro¬
ceeds—To be applied in part to the repurchase and re¬
tirement of the company's 5%% convertible subordin¬
ated debentures presently outstanding, in full, at par
plus accrued interest to the date of payment, and the
for

general

corporate

purposes.

Dec. 12 filed 50,000 shares of common stock.
market Proceeds—For investment. Office —

Price—At
1033-90fh

St., N. W., Washington 7, D. C. Investment Advisor—In¬
vestment
Fund
Management Corp. Former NameShares in America, Inc..
•

Shoreham

Motor

Hotel,

Inc., Hartford, Conn.

(5/26)

April 13 filed $7,209,640 of 5%% convertible subordin¬
ated debentures due April 30, 1964, being offered for
subscription by common stockholders in the ratio of
$100 of debentures for each 10 common shares held of

balance

of capital stock. Price—At 4
Proceeds—For investment
Office—Englewood,
Underwriter—First Mutual Securities of America,

Shares In American Industry, Inc.

Raindor Gold Alines, Ltd.
Jan. 28 (letter of notification) 290,000 shares of common
stock (par $1). Price—$1 per share. Proceeds—To prove
•

Sano &

America, Inc.

Feb. 24 filed 200,000 shares
market.

weeks.

up

general working capital. Office—
Stanley Ave., Yonkers, N. Y. Underwriter—Charles
Co., New York, N. Y.
'
1.

117

Plohn &

Roosevelt-Consolidated Building Associates

,

Price—To- be

gage and loans and for

couver,

Jan. 15
stock

properties. Underwriter—
Co., New York.
*'

Reon Resistor Corp. (5/25-29)
April 2 (letter of notification) 150,000 shares of common
stock (par one cent). Price—^2 per share. Proceeds—To*
purchase new equipment; for payment of chattel mort-;

Prudential Enterprises, Inc. /

stock (par five
Price—$3 per share. Proceeds—To repay loans
general corporate purposes. Business—Manu¬
Price—Tt> be supplied by amendment.
Proceeds—For
facturers and packager of proprietary drug items.
Un¬
working capital., Office—Soriano. Building, Plaza Cer- H derwriter
Richard Bruce & Co. Inc., 26 Broadway,
Vdirtes, Manila (P. T.) . Underwriter—None. ;
New York 4, N. Y.
]
Phillips-Van Heusen Corp.■v
Puritan Chemical Corp.
Apiril 21 filed 69,210 shares, of. comipon stock,; to be of¬
March 30, filed 500^000 shares of capital stock (par 10
fered in exchange for common stock of..Kennedy's, Inc.,
cents.
Price—$1.25 per share. Proceeds—For working
ih the ratio of $ 11/^ shares of Phillips-Van Heusen stock
capital add general corporate purposes. Office—2 South
for pne share of Kennedy's stock.
>
.
Broadway, Lawrence, Mass. Underwriter—Dunne & Co.,
7 Piedmont Aviation, Inc.
New York.
Offering—Expected any day.
May 6 (letter of notification) 72,700. shares of common
stock (par $1) to. be offered to stockholders at- the rate
Pyrometer Co. of America, Inc.
of 1/16 of a share for each/share held/as of; May 4, 1959/
April 27 filed 200,000 shares of common stock (par 50
cents). Price—$3 per share. Proceeds—For inventory,
Price—$3.75 per share;/Proceeds—For working capital.
Address—Smith Reynolds Airport, Winston-Salem, N. C.
expansion of present facilities, equipment, working cap¬
ital and other general corporate purposes. Office—PennUnderwriter—None. //;-.v..7
7/. '7-7 ;,
del, Pa. Underwriter — Arnold Malkan & Co., Inc., 26
• Pioneer Plastics Corp.|Sanford* Me.?
Broadway, New York. Offering—Expected in about three
April 15;filed 150,000 shares of common stock (par $1)

at the rate of

43

(2339)

Underwriter—

None.

Raytheort Manufacturing Co.
May 1 filed 350,602 shares of common stock (par $5) and
100,000 shares of 5^2% series (cumulative), serial pre¬
ferred stock (par $50).
These shares were or may be
issued as a result of the merger, of Machlett Labora¬
tories, Inc., into Raytheon Co. (formerly Raytheon Man¬
ufacturing Co.).
Reeves Soundcraft Corp., Danbury, Conn.
April 30 filed 22,000 shares of common stock (par five
cents) to be sold to Lewis Cowan Merrill upon exercise
of option. Price—$3 per share. Proceeds—To Hazard E.
Reeves, the selling stockholder. Underwriter—None. No
public offering is planned.

May 11 (letter of notification) 25,000 shares of common
$1). Price—$12 per share. Proceeds—For ex¬
of construction and operation of luxury motor
hotels. Underwriter—Charles E. Thenebe & Associates,
stock (par

penses

I

Hartford, Conn.
Silver Creek Precision Corp.
March 30 filed 1,550,000 shares of common

stock (par

cents), of which 200,000 shares are to be offered for
the account of the company, and 1,350,000 shares for
account of selling stockholders. Price—To be supplied
by amendment. Proceeds—For working capital. OfficeCentral Ave. and Mechanic St., Silver Creek, N. Y. Un¬
derwriter—Maltz, Greenwald & Co., New York.
10

Sip'n Snack Shoppes, Inc.,

Philadelphia, Pa.
stock. Price—*
equips

March 31 filed 200,000 shares of common

$2 per share. Proceeds—To pay loans and for new
tnent. Undei writer—Sano

& Co.,

New York.

;

.

ic Soundscriber Corp.
May 13 filed 126,254 shares of common stock to be of¬
fered for subscription by common stockholders at the
rate of one new share for each three shares held. Price
_

—$14 per share.
curred

and

to

troduction of

a

be

Proceeds—To be applied for costs in*
incurred in connection with the in¬

new

line of

office^ dictating equipment;
interest; payment of 6

payment of installment notes with

Continued

on

page"

44

44

The Commercial and Financial

(2340)

Continued from page

Massachusetts

1500

43

Underwriter—E.

V/., Washington, D. C.
Inc., Washington,

Avenue, N.
Wolf

L.

Associates,

bank indebtedness; payment and interest on notes pay¬

District of Columbia.

able; and for general corporate purposes.
dletown Avenue, North Haven, Conn.

• Telecomputing Corp.
(5/25-29)
April 29 filed 500,000 shares of common stock

Office—8 MidUnderwriter—

None.

Generating Co. (5/28)
April 17 filed $25,000,000 of first mortgage bonds due
Proceeds—To be used in connection with financ¬

19.92.

ing the cost of constructing a steam-electric generating
Station on the Coosa River in Alabama and related fa¬
cilities; and for the repayment of $4,000,000 of shortterm bank loans incurred for such capital expenditures.
Underwriter—To be determined by competitive bidding.
bidders; Halsey, Stuart & Co. Inc.; Eastman
Union Securities & Co.; Equitable Securities
Corp. and Drexcl & CO. (jointly); Merrill Lynch, Pierce,
Fenner & Smith; Kidder, Peabody & Co. and White,
Weld & Co. (jointly). Bids—Expected to be received
up to 11 a.m. (EDT) on May 28 at the office of Southern
Services, Inc., 250 Park Avenue, New York 17, N. Y.
Probable

Dillon,

•

Spartans Industries, Inc. (6/8-12)
May 12 filed 200,000 shares of common stock (par $1).
1'i ice—To be supplied by amendment.
Proceeds—For
general corporate purposes. Business—A major producer
and distributor of a diversified line of popular price,
basic style apparel for men, women and children. Office
•—1 West 34th St., New York 1, N. Y. Underwriters —
Shearson, Hammill & Co., New York; and J. C. Bradford
& Co., Nashville, Tenn.
•
Spiegel. Inc. (6/4)
May 8 filed $15,417,500 of convertible subordinated de¬
bentures due June 1, 1984, to be offered for subscription
by common stockholders of record on or about June 3,

1959,

the basis of $100 principal amount of debentures
for each 12 shares held; rights to expire on June 19.
3Price—To be supplied by amendment. Proceeds—To be
on

added to

the general funds of the company to be avail¬

able

its increasing accounts
Underwriter—Wertheim & Co., l^ew York.

principally to finance

ceivable.

Arenas

Sports
Nov.

18

(Delaware)

re¬

Inc.

$2,000,000 of 6% 10-year convertible de¬
(subordinated), due Jan. 1, 1969 Price—To be
lupplied by amendment. Proceeds—$750,000 to pay AMF
Uinspotters, Inc. for bowling alley beds; $350,000 to pay

£ot other

installations, fixtures and equipment; $85,000
two present establishments by increasing
the number of alley beds by eight at Yorktown Heights
•nd by six at Wilton Manor Lanes, Fort Lauderdale;
$300,000 for deposits on leaseholds, telephones and util¬
ities; and $395,000 for working capital. Underwriter—
expand

None.

cent).
$6 per

(Delaware)
Inc.
shares of common stock (par one
Price—At the market (but in no event less than
share). Proceeds—To selling stockholders. Office

—33 Great Neck

Rd., Great Neck, N. Y.

Underwriter—

None.
Standard

Electric Co., Inc.
(letter of notification) 10,000 shares of com¬
(par $25). Price—$27.50 per share. Proceeds
—To purchase equipment, erect and
equip a semi-fire¬
proof building and for working capital.
Office — 3016
Austin Highway, San Antonio, Texas.
Underwriter —
Bache & Co., San Antonio, Texas.

March 31

mon

stock

•

Sterling Television Co., Inc. (5/28)
(letter of notification) 200,000 shares of Class
A stock (par 25 cents). Price—$1 per share. Proceeds—
For general corporate purposes, and to acquire television
March 31

film series for distribution. Office—6 East 39th
St., New
York 16, N. Y. Underwriter—R. A. Holman &

Co., Inc.,

Now York 5, N. Y.
Suffolk

Gas

Corp.
May 8 (letter of notification) 6,000 shares of common
(par $2.50) to be offered for subscription by stock¬
holders; unsubscribed shares to public. Price—To stock¬
holders, $6.75 per share. Office—151 N. Main Street,
Suffolk, Va. Underwriter—Strader & Co., Inc., Lynch¬
burg, Va.

llr Sunray Mid-Continent Oil Co.
May 19 filed 525,000 shares of common

stock

to be of¬

at

least

90%

of

the

so

that Sunray will

outstanding

Suntide

Telectro

Industries

V-loan to

(6/1-5)

Corp.

a

bank and to

a

commercial credit

com¬

and the balance will be added to working capital
and used for general corporate purposes.
Office—35-16
37th St., Long Island City, N. Y. Underwriter—Milton
D. Blauner & Co., Inc., New York.
Teleflex Ltd. (6/1-5)
May 6 filed 75,000 shares of common stock (no par),
of which 50,000 shares are to be sold for the account of
the company and 25,000 shares for Teleflex Products
Ltd. Price—To be supplied by amendment. Proceeds—
For additional equipment and working capital. Office—
461 King St., W., Toronto, Canada. Underwriter—Drexel
& Co., New York.
,

• Ten
Keys, Inc., Providence, R. I.
April 28 filed 973,000 shares of capital stock (par SI).
Price—$5.40 per share. Proceeds—For investment. Office
—512 Hospital Trust
Bldg., Providence, R. I. Distributor

—E. R. Davenport &

Co., Providence, R. I.

Texfel Petroleum Corp.

repayment of the company's 5% notes held by an Amer¬
ican bank, and the balance will be added to its general
used

in connection with

operations, and for general corporate

its various

includ¬
certain prop¬

purposes,

ing payment of purchase obligations on
erties, and for the purchase of warehouse inventories.
Office—Republic National Bank Bldg., Dallas, Texas.
Underwriters—Bache &

Co.

and

Allen

&

Co., both of

New York.

Thermoplastics Corp.
March 26 filed 468,500 shares of common stock. Price—
At par ($1 per share). Proceeds—For purchase of neces¬
sary

capital equipment and to increase working capital.

Rd., Charlotte, N. C. Underwriter
Charlotte, N. C.

—Interstate Securities Corp.,

A Thriftimart, Inc
(6/8-12)
May 18 filed $8,000,000 of convertible subordinated

de¬

bentures due 1980. Price—To be supplied by amendment.
Proceeds — For expansion program. Office — 1489 W.

Washington Blvd., Los Angeles, Calif. Underwriters—
Reynolds & Co., Inc., New York; and Lester, Ryons &
Co., Los Angeles, Calif.

Country Club
notification) $200,000

April 30 (letter of
of 5^2% 10year first mortgage bonds to be offered in denominations
of $500 each. Price—At face amount. Proceeds—To re¬
tire existing mortgage bonds and short-term loans and
for working capital.
Office—Frankford & Grant Ave¬
nues, Philadelphia 14,
Pa. Underwriter—None.
Transcon

Petroleum & Development Corp.,
Mangum, Okla.
March 20 (letter of
notification) 300,000 shares of com¬
mon
stock.
Price—At par ($1 per snare).
Proceeds—
For development of oil
properties. Underwriter—First
Investment Planning Co., Washington, D. C.

Trinity Small Business Investment Co.
April 17 filed 235,000 shares of capital stock (par $1).
Price
$10.75 per share.
Proceeds — For investment.
Office—South Main Street, Greenville, S. C. Under¬
writer—To be supplied by amendment.
—

Tyce Engineering Corp.
May 6 (letter of notification) 100,000 shares of common
stock (no par). Price — $3 per share.
Proceeds — For
working capital. Office — 809 G. Street, Chula Vista,
Calif.

Underwriter—Pacific

Coast

Securities

Co.,

San

Francisco, Calif. Offering-—Expected today (May 21).
•

United

Gas

Israel Independence Issue and
Development Issue
and the balance in cash. Proceeds—For

of bank loans incurred in connection with such
program.
Underwriter—To be determined by competitive bidding.

expansion pro¬
Office — 79 Ben Yehuda St., Tel Aviv, Israel.
Underwriter—American Israel Basic Economy Co., New
York, N. Y.

Ar Superior Window Co. (6/8-12)
May 15 filed 50,000 shares of 70-cent cumulative con¬
vertible preferred stock (par
$8) and 125,000 shares of
class A

stock (par 10
cents). Price—For pre¬
stock, $10 per share; and for common
stock, $4
per share. Proceeds—To purchase the assets of
Superior
Trucking Co.; for repayment of notes; and for general
common

purposes.

12

Office—625

Underwriter—Cruttenden,

and New York.

★ Technology, Inc.
May 15 filed 325.000 shares of
ay
325,000 :
per share.

E.

10th

Ave., Hialeah,
Podesta & Co., Chicago

common

stock.

Price—$4

Proceeds—To pay off in full the
subscription
of Microwave Electronic Tube
Co., Inc. stock, repre¬
sented by notes, to
pay for improvements upon the plant
leased to Microwave, and for
working capital. Office—




filed

Proceeds—To

Probable bidders:

Halsey, Stuart & Co. Inc.; White, Weld
Co.; Merrill Lynch, Pierce, Fenner & Smith and East¬
Dillon, Union Securities & Co. (jointly); The First
Boston Corp.;
Kuhn, Loeb & Co. and Blyth & Co., Inc.
&

man

(jointly); Kidder, Peabody & Co.; Drexel & Co. and
Dillon, Union Securities & Co. Bids—Expected
(EDT) on June 16.

Eastman

to be received up to 11 a.m.

ferred

corporate
Fla.

for each

of United

its

recent, one-for-ten

split, or 2lk shares of United for each share
Lawyers after such split. Lawyers' stockholders may
out their allocation to the next full share by
purchasing not more than % of a share at $1.25 for each
J/4 share needed. In addition, a stockholder who accepts
of

round

in

exchange for all the outstanding common stocks of
Margate Homes, Inc., Broward Engineering Co., and
Margate Construction Co., certain outstanding debt ob¬
ligations of Margate Homes, Inc., and $62,500 in cash.
Proceeds—For

working capital and general corporate
Office—25 West 43rd St., New York, N. Y.

purposes.

Underwriter—Allen &
of

Co., New York, for 242,299 shares

stock.

common

United

Illuminating Co. of New Haven

May 7 filed 350,501 shares of
be

offered for

the basis
of

of

common

subscription by

one

new

share

(5/27)
stock (no par) to

common

for

each

stockholders

on

eight shares held

record

May 26, 1959; rights to expire on or about
June 18. Price—$26.50 per share. Proceeds—To finance
in part the
company's 1960-1961 construction program,
including the payment of current bank loans incurred
in connection with this
program. Underwriter—None.
United
March

25

$2.60),

of

Improvement & Investment Corp.
filed 1,238,994 shares of common stock
which

809,195

shares

are

to

United Tourist Enterprises, Inc.
28 filed 4,500,000 shares of class A common stork
(par 50 cents).
Price—$2 per share.
Proceeds—For
development and construction of a "Western Village"
Jan.

and for

construction of

Grand Estes Hotel

a

Con¬

and

vention

Hall, to be constructed in the immediate vicinity
Chalet, located in Larimer County, Colo.
Office
330 South 39th Street, Boulder, Colo. Under¬
writer—Mid-West Securities Corp., Littleton, Colo. y .'
of Estes Park
—

Utah Concrete Pipe Co.
April 27 (letter of notification) 41,300 shares of common
stock (par $1). Price—$7.25 per share. Proceeds—To be
used to reduce long-term debt; improvement and
expan¬
sion of Ogden plant and for addition to
working capital.

Office—379-17th St., Ogden, Utah. Underwriter—Schwabacher & Co., San Francisco, Calif.
:
/

be

May 6

(letter of notification) 300,000 shares of capital
At par ($1 per share). Proceeds — For
development of oil and gas lands. Office—574 Jefferson
Ave., Rochester 11, N. Y. Underwriter—Frank P. Hunt
& Co., Inc., Rochester, N. Y.
stock.

Price

—

,

Variable

April 21

Annuity Life Insurance Co. of America
$4,000,000 of Variable Annuity Policies.

filed

Price—No

contracts

less
and

than

$120

less

no

a

than

for

year

$1,500

annual

premium

for

single premium
contracts.
Proceeds—For investment, etc. Office—1832
M Street, N. W.,
Washington, D. C. Underwriter—None.
ic Varian Associates, PaSo Alto, Calif.
May 19 filed $2,025,000 of Interests in the company's Em¬
ployee Stock Purchase Plan, together with 70,244 shares
of

capital stock which may be acquired pursuant thereto.
Virginia Electric & Power Co. (6/2)
April 28 filed 710,000 shares of common stock (par $8)
to

be

the basis of

offered for subscription by common stockholders
one new share for each 20 shares held of

record June 2, 1959

rights

to

expire

construction

(with

on

program.

an

oversubscription privilege);

about

or

June

13.

Proceeds—For

Underwriter—To be determined

by

competitive
bidding.
Probable
bidders:
Merrill
Lynch, Pierce, Fenner & Smith, Inc.; Stone & Webster
Securities Corp.
Bids—Expected to be received up to
11

(FDT)

a.m.

on

June

Place, New York, N. Y.

2

at

Room

238,

43

Exchange

/ /

• Vocaline Co. of America, Inc.
May 19 filed 210,000 shares of common stock, of which
180,000 shares are for the account of the company and
30,000 shares for selling stockholders. Price—To be sup¬
plied by amendment. Proceeds—To retire notes, to ex¬
pand facilities and for working capital and general
porate purposes. Underwriter—George, O'Neill &

Inc., New York.

cor¬

Co.,

,r

Vulcan Materials Co., Mountain
Brook, Ala.
May 7 filed 252,526 shares of common stock, of which
142,526 shares represent the balance of 250,000 shares
issuable upon the exercise of options granted key em¬
ployees under the company's Employees Stock Option
Plan. The remaining
110,000 shares are to be issued to
stockholders of Greystone Granite Quarries, Inc., and
Pioneer Quarries Co., both North Carolina
corporations,
and to certain other parties in
exchange for all the out¬
standing capital stock of Greystone and Pioneer and
certain real and personal properties
operated under lease

by Pioneer.
• Wade
Drug Corp., Shreveport, La.
April 28 filed 157,250 shares of class B

common

stock

to be sold

privately to retail druggists through James D,
Wade, Jr., company's principal officer and stockholder,
who will receive

a

commission of $1.50 per share. Price

—At par

($10 per share). Proceeds—To purchase addi¬
machinery and equipment; research and experi¬
mentation; for initial contracts; and purchase of addi¬
tional

tional companies. Underwriter—None.

^Washington Drama Center, Inc.
May 7 (letter of notification) nine shares of class A
preferred stock (par $50); 4,385 shares of class B pre¬
ferred stock (par $10); and 35 shares of common stock
(par $50). Price—All at par. Proceeds—To pay advance
rent; preopening expense and for working capital. Of¬
fice—1632 O

Street, N. W., Washington 6, D. C.

Under¬

writer—None.
•

Wellington Electronics, Inc.

May

6

filed

240,000

shares

of

(6/15-19)

common

stock

(par

75

cents.
of

(par

offered

,t.......

Utility Appliance Corp., Los Angeles, Calif.
April 9 (letter of notification) 50,000 shares of common
stock (par $1).
Price—$5.75 per share.
Proceeds—To
selling stockholders. Office—4351 South Alameda Street,
Los Angeies 53, Calif.
Underwriter — Dempsey-Tegeler
& Co., Los Angeles, Calif.

on

Torresdale-Frankford

March 25 filed 250,000 shares of common stock.
Price—
At par (19,800 Israeli
pounds—equivalent to $11 per
*hare in U. S.
funds), payable up to 90% in State of

gram.

share

one

before

Utah Oil Co. of New York, Inc.

(5/25-29)

March 19 filed 550,000 shares of common stock (par $1).
Pricc-^To be supplied by amendment.
Proceeds—For

1984.

Bonds,

basis of

Lawyers

pany;

May

Super-Sol Ltd.

the
of

United's offer will have privileges to subscribe to 242,-

Improvement Co. (6/16)
$10,000,000 of first mortgage bonds due
be used to reimburse, in part, the
treasury of the company for property additions and im¬
provements and to meet, in part, the cost of the con¬
tinuing construction program, including the retirement

shares.

Underwriter—None.

on

shares

299 additional shares at $5 per share, on a one-for-four
basis. The company also proposes to offer 187,500 shares

•

fered in exchange for common stock of Suntide
Refining
Co. in the ratio of one share of
Sunray for each three
shares of Suntide. The offer is conditional
upon the de¬

posit of sufficient shares of Suntide

Proceeds—

May 6 filed 200,000 shares of common stock (par 10
cents). Price—$3 per share. Proceeds—For additional
machinery and equipment; to retire outstanding balances
a

Title Co.

to finance the performance of the com¬

pany's contracts. Office—915 North Citrus Avenue, Los
Angeles, Calif. Underwriter—Blyth & Co., Inc.. Los
Angeles, Calif.

of

Thursday, May 21, 1959

.

applied against the company's short-term bank

loans incurred

stock

own

be

Office—1626 Hertford

Arenas

Sports

Nov. 18 filed 461,950

•

To

.

reserve

(par $1),

selling stockhold¬

Price—To be supplied by amendment.

ers.

funds and will be

filed

bentures

to

of the company and 250,000 shares for

.

exchange for outstanding stock of Lawyers Mortgage &
four

of which 250,000 shares are to be offered for the account

Southern Electric

Chronicle

in

a

foil

Price—$6 per share. Proceeds—For repayment
bank note; to complete the automation of the etched
production plant at Englewood, N. J.; for manu¬

facture of machines to be leased to capacitor manufac-

Volume

189

Number

5848

.

.

.

The Commercial and Financial Chronicle

(2341)

tiirers; and for working capital.
N. J.
?

Office

i West

Penn Power Co.

Englewood,
New York.

—

Underwriter—Charles Plohn & Co.,

(5/25)

April 17 filed $14,000,000 of first mortgage bonds, series
R, due June 1, 1989. 1 Proceeds—Together with other
funds, will be applied to the company's construction pro¬
gram and repayment of bank loans incurred thereof.
Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Lehman
Brothers and Eastman Dillon, Union Securities & Co.
(jointly); The First Boston Corp. and Harriman Ripley
& Co. Inc. (jointly); Kidder, Poabody & Co. and White,
Weld & Co. (jointly).
Bids—Expected to be received
up to noon (EDT) on May 25 at office of West Fenn
Electric Co., 50 Broad Street, New York, N. Y.

(par $2.50).
supplied, by amendment.
Proceeds—To
selling stockholders. Office—4285 North Port Washing¬
ton Road, Milwaukee, Wis.
Business—A domestic dis¬
tributor of hospital supplies, equipment and furnishings.
Underwriter-j-Blunt Ellis & Simmons, Chicago, 111. Of¬
fering—Expected in June.
Price—To

be

'?Jl Worcester
May

8

filed

Gas Light Co. (6/18)
$5,000,000 of first mortgage sinking fund

bonds, series C, due June 1, 1979. Proceeds—To be ap¬
plied to the cost of the company's construction program,
including $4,350,000 of advances for construction pur¬
poses by Worcester's parent, New England Gas & Elec¬
tric Association.
Underwriter—To be determined by
competitive bidding.
Probable bidders: Halsey, Stuart
& Co. Inc.; Blair & Co. Inc.; Kidder, Peabody & Co. and
White, Weld & Co. (jointly); Coffin & Burr, Inc. and
Estabrook & Co. (jointly). Bids—To be received up to
11:30 a.m. (EDT) on June 18 at 10 Temple St., Cam¬
bridge, Mass.

?.• Worthington Products, Inc.

of debenture

bonds, if market conditions are favorable.
Proceeds—For investments, improvements, etc.
Under¬
writer—To be determined by competitive
bidding. Prob¬
able bidders:
Halsey, Stuart & Co.

Inc.; Morgan Stanley
White, Weld
Curtis (jointly).

& Co. and The First Boston Corp.
(jointly);
& Co. and Paine,
Webber, Jackson &

^ Gilbert Properties
May 15 it was announced that this company plans an
offering of $4,506,500 of convertible debentures, together
with

an

(6/8-15)

May 8 (letter of notification) $150,000 of 7% convertible
debentures due May 15, 1964 and 15,000
shares of common stock (par 25 cents) to be offered in
units of $500 of debentures and 50 shares of stock. Price
—$500 per unit. Proceeds—For advances to Nautilus, a
subsidiary, for equipment and working capital; also lor
working capital of parent and molds and dies for new
accessories. Business—To design and sell marine prod¬
ucts and boating accessories. Office—441 Lexington Ave.,

undetermined

El

Paso

Natural

March 4 it

York, N. Y. Underwriter—B. Fermekohl & Co., New
York, N. Y.
v,':'/V

.

;«i ''

\

Prospective Offerings
^Aerojet-General Corp. s(6/10)
May 19 it

was

,

announced that the company plans early

registration of additional common stock. Proceeds—For
expansion. Underwriter—Kidder, Peabody & Co., New
York.

Bank of Commerce, Washington,
Feb. 26"

stockholders

of the

(5/29)

D. C.

the sale of

Bank approved

2,000 shares of capital stock (par $100) to holders of
record May 29, 1959, on the basis of one new share for
each three shares held; rights to expire on June 30.
Price—$150 per share. Proceeds—To increase capital
and surplus.
Bank of Montreal

announced Bank is offering to its stock¬
holders of record April 17, 1959 the right to subscribe
on or-before July 10,
195.9 for 675,000 additional shares
of capital stock on the basis of one new share for each
eight shares held. Price—$32 per share, payable in 10
monthly installments from July 10, 1959 to April 8,
1960.
Subscription Agent—Royal Trust Co., Montreal,

May 1, it

■ -

•

Industries Corp.
announced sale of 75,000 shares of com¬
mon stock is planned, of which half will be offered for
the account of the company, and the remainder for the
account of a selling stockholder. Underwriter—Emanuel,
Deetjen & Co., New York. Registration — Expected in
it British

three

or

was

Gas

Co.

announced stockholders will

was

Northern Illinois Gas Co.

bidding.
Halsey, Stuart & Co. Inc.; The First
Glore, Forgan & Co.; Blyth & Co. Inc.
Bids—Tentatively planned to be received on June 23.

Probable bidders:
Boston

Co., Chicago, 111.

Offering—Expected towards the

end of June.

^ Consolidated Natural Gas Co.
May 19, James Comerford, President, announced that
company plans later in year to issue and sell $20,000,000

Di-Noc Chemical Arts

Debentures Offered

Blair
a

&

group

Co Inc.

Dec. 10 it
and

plans to issue
sell $18,000,000 of 30-year first
mortgage bonds. Pro¬

ceeds—For

construction

to repay bank loans and for
construction pro¬
Underwriter—To be determined by competitiv©

bidding: Blyth & Co., Inc. and The First Boston Corp,

(jointly); Lehman Brothers

Riter

and

&

Co.

(jointly);

Merrill Lynch,

Pierce, Fenner & Smith, Inc.; Harriman
Ripley & Co. Inc., and Eastman Dillon, Union Securitieo
& Co.
(jointly); Kuhn, Loeb & Co.; Smith, Barney & Co,

sidering
common

was

Power Co.

(Minn.)

(7/22)

reported that the company also is con¬
about 714,000 additional shares of

offering

stock for subscription

program.
Underwriter—To be
by competitive bidding. Probable bidders
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc., Kidder, Pea¬
body & Co. and Shields & Co. (jointly); Lehman Broth¬

on

The First Boston Corp.; Morgan Stanley & Co.;
Equitable Securities Corp. and Eastman Dillon, Union

by common stockholders
share for egch 20 shares held,

Riter & Co.

determined

ers;

Securities & Co.

(jointly); Harriman Ripley & Co. Inc.
Registration—Planned for Aug. 14. Bids—Expected to

oe

received

on

Sept. 10.

the basis of

Proceeds
tive

To

—

one

new

bank loans and for construction*

repay

Underwriter—To be

program.

determined by competi¬
Probable bidders: Lehman Brothers and

bidding.

(jointly); The First Boston Corp., Blyth &
Co., Inc. and Kuhn, Loeb & Co. (jointly); White, Weld
& Co. and
Glore, Forgan & Co. (jointly); Merrill Lynch,
Pierce, Fenner & Smith Inc. Bids—Expected to be re¬
ceived on July 22.
v

Giarit Foods Co. Inc.

Pan

American World

May 4 it was reported that the company plans an offer¬
ing of additional common stock, part of which will be
sold for the account of selling stockholders and part for

May 4 it

the account of the

Airways, Inc.

->

have

Proceeds — For working
capital. Underwriters—Auchincloss, Parker & Redpath,
Washington, D. C.; and Kidder, Peaboldy & Co., New
company.

York.
•

Jersey Central Power & Light Co.

(7/14)
is contem¬
plating the sale of $8,000,000 of first mortgage bonds.
Underwriters—To be determined by competitive bid¬
ding. Probable bidders: Halsey, Stuart & Co. Inc.; White,
Weld & Co.; Kidder, Peabody & Co.; Salomon Bros. &
Hutzler and Merrill Lynch, Pierce, Fenner & Smith Inc.
(jointly); Lehman Brothers and Blair & Co.. Inc., (joint¬
ly.
Bids—Expected to be received on July 14.
10 it

was

announced that the

company

Kansas

City Power & Light Co.
reported that the company plans to issue
and sell $20,000,000 of first mortgage bonds. Proceeds—
For construction program.
Underwriter—To be deter¬
mined by competitive bidding. Probable bidders: Halsey,
Stuart & Co. Inc.; The First Boston Corp. and Blyth &
Co., Inc. (jointly); Equitable Securities Corp.; White,
Weld & Co. and Shields & Co. (jointly); Kuhn, Loeb &
Co., Salomon Bros. & Hutzler and Eastman, Dillon, Union
Securities & Co. (jointly); Lehman Brothers and Bear,
Stearns & Go. (jointly). Offering—Expected in May or
Dec. 29 it

was

June.

it Leeds Travelwear Corp.
May 19 it was announced that company plans some ad¬
ditional common stock financing. Underwriter—Auchin¬

closs,

Parker & Redpath, Washington, D. C. and New

York.

Long Island Lighting Co.
May 15 it was announced company plans to issue and sell

$25,000,000 of first mortgage bonds. Proceeds—To repay
bank

loans

and

for

To be determined by

ders:
The

construction.

new

Underwriter—

competitive bidding. Probable bid¬

Halsey, Stuart & Co. Inc.; Blyth & Co., Inc. and
Corp. (jointly); W. C. Langley & Co.;
Co.

First Boston

Smith, Barney &

(6/25)
announced that this company, plans to
$5,000,000 of 30-year first mortgage bonds.
Proceeds—For construction program.
Underwriter—To
be determined by competitive bidding. Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Eastman Dillon, Union
Securities & Co. and Equitable Securities Corp. (joint¬
ly); Merrill Lynch, Pierce, Fenner & Smith; Kidder,
Peabody & Co. and White, Weld & Co. (jointly). Regis¬
tration—Planned for May 29. Bids—Expected to be re¬
10

it

was

Issue and sell

ceived

on

is manager of

the

proceeds of such loan will be

used

on

was

announced that the stockholders will vot©

May 26 to authorize the company to offer

first

retire

to

the

present

1961

and at

to $50,-

Stockholders would
pre-emptive rights to subscribe for these securi¬
ties. Proceeds—For purchase of
equipment, etc. Under¬
writers
May be Lehman Brothers and Hornblower &
Weeks, both of New York.
—

*

Pennsylvania Electric Co.

Feb. 10 it
the

sale

derwriter

announced

was

of

(8/4)

that the company is

planning

$15,000,000

—

To be

Probable bidders:

of first mortgage bonds.
Un¬
determined by competitive
bidding,

Halsey, Stuart & Co. Inc.; Equitable
Corp.; Kidder, Peabody & Co.; Eastman Dillon,
Securities & Co., Merrill
Lnych, Pierce, Fenner
& Smith Inc. and White, Weld & Co.
(jointly); The Firs$
Boston Corp. and Harriman
Ripley & Co. Inc. (iointlvV,

Securities
Union

Bids—Expected to be received

on

Aug. 4.

Public Service Co. of New Hampshire
April 22 it was stated in the company's annual report
that it plans the raising of
$13,250,000 from outside
sources. This new money will come
partially from shortterm

obligations but principally from permanent financ¬
ing, the amount and type of which has not as yet been
determined.

Proceeds—To

meet

construction

require¬

ments for 1959.

it Puget Sound Power & Light Co.
May 15, Frank McLaughlin, President, announced
pany plans to issue and sell first mortgage bonds
in the year. Underwriter—To be determined

com¬

later

by com¬
petitive bidding. Probable bidders: Halsey, Stuart & Co.
Inc.
and
Lehman
Brothers
(jointly); Merrill Lynch,
Pierce, Fenner & Smith, Inc.; Stone & Webster Securities
Corp.; The First Boston Corp. and Smith, Barney & Co.
(jointly).
* Reheis Co., Inc.
May 19 it was announced that this company plans some
additional equity financing. Office —
Berkeley
N. J. Underwriter—Aetna Securities

Heights,

Corp., New York.

it Speedry Chemical Products Co. Inc.
May 15 it was announced that the company plans an
offering of 208,666' shares of common stock. Underwriter
—S. D. Fuller & Co., New York.
Union Electric Co.

(Mo.)

Feb.

23, J. W. McAfee, President, stated that the
pany plans to sell about $30,000,000 of additional
mon

stock

later

this

through

year

rights

to

com¬
com¬

common

stockholders. Proceeds—For expansion program. Under¬

writer—May

be

determined

by competitive bidding.
Brothers; White, Weld & Co.„
(jointly); Merrill Lynch, Pierce, Fen¬
& Smith, Inc. Offering—Expected toward the end

Probable bidders: Lehman
and Shields & Co.
ner

1033/2% thereafter to

maturity, and for the sinking fund

quarter of 1959.

and

its

subsidiaries

dated net

sales

had

consoli¬

of 4,439,074.

On

completion of the current
financing, outstanding capitaliza¬
tion of the company will consist
Di-Noc
Chemical
Arts,
Inc., of
284,156
shares
of
common
with its main office and manu¬ stock, $1 par value; $650,000 of
facturing facilities, in Cleveland, unsecured term loans, due quar¬
Ohio, produces photographic film terly to Oct. 1, 1964; $91,080 of a
and
dry plates.
These products mortgage loan on real estate, due
arc useel to convert copy, such as
annually to Oct, 31, 1967, and the
a
drawing or photograph, into a $947,200 of 51/2% convertible sub¬
film
negative or positive from ordinated debentures now being
which a printing is then made. offered.
The company and its three sub¬
Associated with Blair & Co. Inc.
sidiaries
also
produce
printed in the offering are: Bacon, Whip¬
saturating papers, decorative film ple & Co.; George D. B. Bonand miscellaneous products.
bright & Co.; Hayden, Miller &
For the year 1958, the company Co., and Sage, Rutty & Co., Inc.
redemption

100%,

$625,000 bank loan and additional
proceds from the

up

000,000 of convertible debentures.

of the second or third

June 25.

sale
Di-Noc Chemical Arts, Inc. is of the debentures will be applied
offering to holders of its common toward the cost of erecting and
shares the right to subscribe for equipping a new plant which the
$947,200 principal amount of 5Vz% company proposes to erect on
convertible subordinated
deben¬ ground now owned by it at Wiltures, due May 15, 1971, at the loughby, Ohio. The estimated cost
subscription price of 100% per of the plant will be between
and $950,000
and the
$100 principal amount of deben¬ $900,000
tures, on the basis of $100 of management estimates it will cost
debentures for each 30 shares of an additional approximate $400,000 for machinery and the cost
common stock held of record May
such
14, 1959. Rights to subscribe will of moving and installing
expire at 3:30 p.m., Eastern Day¬ equipment. A new bank loan for
$1,200,000 has been negotiated and
light Time, June 1, 1959.




be used

March 31 it

announced that the company

was

that will underwrite the

net

plans, and is considering the offering and
$10,000,000 of new preferred stock. Proceeds—To

sale of

Northern States

(9/10)

of May.

Northern States Power Co.
(Minn.)
March 31 it was reported that the
company has revised
its financing

gram.

plans early
registration of about 75,000 shares of common stock (par
$4). Proceeds—To increase capital and surplus. Under¬
writer—Blair & Co., Inc., New York.
RegistrationExpected in about two weeks.

offering.
The

Corp.;

Registration—Expected at end

increasing

Georgia Power Co.

(6/23)

March 25, Marvin Chandler,
President, announced com¬
pany plans issue and sale of $20,008,000 25-year first
mortgage bonds. Proceeds — For capital expenditures.
Underwriter—To be determined by competitive

it First National Life Insurance Co.
May 12 it was reported that the company

Dec.

Buckingham Transportation, Inc.
May 4 it was reported that the company is seeking
early ICC approval for the issuance of 250,000 shares of
class A common stock. Underwriter—Cruttenden, Podesh

&

common

—

Proceeds—To increase capital and surplus. Un¬

^

derwriter—John M. Tait & Associates,
Cincinnati, Ohio,

Mississippi Power Co.

four weeks.

'

ta

of

Equitable Life Assurance Co.

announced that the company

was

plans an of¬
fering of 950,000 shares of capital stock. Price
$10 pe?
share.

was

Canada.

May 12 it

shares

North American
Dec. 1 it

—

f?'eb.

'::/v-./' 'V v,

of

on April 28
the authorized preferred stock to
1,000,000 shares from 472,229 shares, and the common
stock to 25,300,000 shares from
20,300,000 shares. Pro¬
ceeds
For major expansion program. Underwriter —
White, Weld & Co., New York.

on

subordinated

New

number

stock, to be offered in units. Underwriter—S. D. Fuller
& Co., New York.

vote

it Will Ross, Inc.
May 13 filed 88,512 shares of common stock

45

at

funds will be borrowed under the

plus accrued interest in each case.

bank loan to pay the remain¬
ing cost of erecting and equipping
the plant and to supply additional
working capital.

new

The

debentures

will

be

con¬

vertible,
unless
previously
re¬
deemed, into common stock of the
company until May 14,
1964 at
$18.20 per share, and thereafter
until maturity at $20 per share,
subject to adjustment in certain
events.

The

redeemable

debentures
at

will

be

optional redemp¬
tion prices of 10712% to May 15,

a

price

of

•>

The Commercial and Financial Chronicle

(2342)

46

Mutual Funds

notably the in¬
ternationals, have been notorious
laggards in this latest leg ol' the
biggest bull market in history.
But at
least the young Lazard
Fund still has faith in these is¬
demand
grow
here

it

as

will

oil

for

rapidly

more
in the

stake

Lazard

talcing

was

of

pessimism

the

„

about

foreign oil stems from the
fever of Arab nationalism, which
the

to run its course. But the
people feel strongly that
the international oils have been
oversold.
Somebody is bound to

has yet

Lazard

for another rel¬
fund, One William
Street, recently sold its entire
holding of Standard Oil Co. (New
be proven wrong,

atively

new

Jersey), totaling 30,000 shares.

New Closed-End
Unit Based

on

.

over-all

return

an

closed-end investment
Offering price is $10
per share. Electronics Capital will
provide capital for small elec¬
tronics companies that meet this
designation under the terms of

tinue to take

a

company.

the Small Business Act.

In addi¬

tion, it will be prepared to fur¬
nish companies in which it invests
with management counsel.
i

Income Fund of Boston

reverse

"Perhaps

we

April 30 totaled $29,819,972, equal to $8.46 a share,
compared
with $19,109,860
and
$6.85 a share a year earlier.

assets

S. Smaller Opens

ties

is

N.

Y.

engaging in

business

from

Now trust

managers

return from

a

are

*'r;V

trust men, they
most fund managers

are

a

—

Samuel

a

securi¬

offices

at

195

,

J

Shares

dilemma of their own.

At New

Do you

The

the

on

waters, the need

was

so

knowing

a

never

financial

traditional

the

man

as

Charles Buek

can

$11.42

"this is

capital funds is

an

/

:

,

A. G. Edwards Adds

represented
total

ago.

of all investments of the

CSpociul to The Financial Chronicle)

®»cMi aod
co<*<L of PrincV

31

exceeded

proximately
New

stock

the

If

Fund

cost

by

on

ap-

$54,722,000.

additions

section

to

the

common

the -Fund -during

of

quarter included Brunswick-

Balke-Collender

Products,

Inc.,

Co.,
Carter
General
Motors
-

Corp., Norfolk & Western Ry, C&;
North
American
Aviation, Inc.,
Northern Insurance "Co. of N. Y.,
Peoples Gas Light & Coke- C.G,,
Universal 'Winding Cd. and Virginian Ryl Co. ? ;
A •
:

J

itv

(Special to The Financial Chronicle)

,

E&H

members

sI0ck

of

the

Midwest Stock

New

York

and

Exchanges.

Street. Mr. Hicks

was

previously

with Shearson, Hammill & Co.

.

ed.

^
■
' V
As of April 30, 1959^ total net
assets of the 156 mutual fund

.

«.

members .of the Association

were

$14,622,668,000. : At the end - of
the previous month the figure was
$14,132,828,000 and, on April 30,
1958, when the- Association had
144 fnutual fund .members, assets
totaled $9,786,243J)00.The increase in assets reflects met new
mbney invested as 'Weli as appreciation in the value bf securities
in ihyeshnent; company -portfolios.
,

Free'port
a®^\^ are.
Sulphur Co., General Cable Corp., lied, being invested in-some 3,500
Socony Mobil Oil Cd; and U. S. security issues of over 2,000 cor; porations. --r - ^
-:
. •.
Gypsum Co.
^ Redemptions of mutual- fund
shares by investors came* to $82,689,000 in April.
The figure for
the previous month was $62,539,000 and, a year ago April, it was

.included

Eliminations

'

ST. LOUIS, Mo. — Ronald E.
CHICAGO, 111.—Glenn R. Hicks
Buesinger is with A. G. Edwards has become associated with Dean
& Sob, 409 North Eighth Street, Witter
&
Co., 50 West Adams

'

^

no

Joins Dean Witter

/nm^al
* *

<

™d) ^embers-

Pajffd with_$197,612,000-for March,
and $122,206,000 for April, of
- Year,
the Association repojrt-

Fund's

:

andca«e^,'m

members

■

Com-

31,. compared
at year-end: and 61 % a
The total market value

63%

year

entirely reasonable
.

Investment

panies, announced May 19 in re-

invest-

stocks
March

on

with

policy," then the preference of the individual investor for topexpectation.

Association;^of

Purchases of mutual.fund shares
by
investors
for the month
amounted to^ $192,018,000, ^cofn-

the

of

65%

ments

time to throw away the book and go overboard on common stock

drawer management of his

^ ^:.>

''

year ago.

a

Common

in uncharted

say

'

a

value

March

greater for professional guidance.

at

]ier shUfe increased
high of $13.95, compared
with $13.64 on Dec. 31, 1958 and

year.

indexes,

continues to attract inew
George A. Mooney,
Executive Director of the National

S^WoJdm,"

new

a

Up

Long-term investment in the

total' net economy

$180 474 000

^

Asset

to

f;

:

•

tij

.

,

*

Sales Continue

of

nimrtor

Fund

the

1959

31

\^th

^ ^

increasingly selective, this is of the utmost importance.
Unlike
1958, when 41 of every 42 stocks recorded again, the session is ■;»
rare
these days when a majority of the isssues traded on the
New York Stock Exchange register a gain.
Under cover of the
rising stock averages, the painful fact is that nearly as many
on

for

him bf $186723

new

"

1953, when the market sustained a
sharp fall, is any guide, then there will be little liquidation from
owners of mutual fund shares.
For deep as is the quandary of
trust and fund officials, for the individual investor the problem
is many times greater.
He is a rare fellow indeed if he is in a
position to spread his risk and, in a stock market that grows,

market, at least based

EATON & HOWARD

March

ended

Dilemma

Putnam

rennets

fillip to earnings."

jyjutua[ Fimd^hare

Hijjh Hvel

George

Ronton

If the experience of early

highs

lze.s in,..*ar^® volume, will add' an

demand.

on

jPuliiam Fcl. ^Mscts.

unenviable.

CONSIDER...

redeemable

are

extra

7

new

tend" to place individual co'mpa"ies m a "precarious position" in

tered

.

as

;

T*le
r Periods"
of
general business
with the Securities & Exdecline - 'change Commission, covers an of:
'
Vi. fering of 250,000. shades at $10 v .But,.Perspective concludes, 4^he
each,: the original net asset value. ?11* carfi° business, as it materjal-

hdaV^Jwmehi FpA

So the position of fund managers is not entirely
Problems present opportunities.
And with the level of the stockv

grON

^

comoared

lows

That cu"'ent low profit margins

not
rppi«

assets ata

new

been low—even though the new
jets have been recording load faetors in the 90% bracket.

rities of any one issuer, but not in
more than 10% of any class of the

liquidate the likes of Polaroid, International Business Machines
and Motorola, selling at astronomic price-earnings ratios and
providing scant yield?
Or do you, at this stage of the market,
reach for the electronic, space age and chemical stocks, which

issues show

Wilson Avenue.

love®

assets, the fund is. free to inup to 25%
of totial' assets in

fSnw ft

responsible

Individual Investors'

-

,

division containing 50% of

a

If we were

4'

Thus, fund managers have

be a serious problem in a
™arke^
That a new rate increase would

may

within the

assets at market value,in the secu:

growth and glamour issues, where yields often either are
small or non-existent and 40 to 50 times earnings often is the

going price.

surplus piston engine planes

to the sub-

now

nncV>

'

'

be enormously helpful although
there is no indication now as to
the securities of any one issuer, .whether it- will be' granted
by
The other half of th^pbrt^lio^tr the'CAB; ' "
invest up to 5%
of total gross . That overall load factors have

for> other people's
money,
are aware that the investors they
represent are more interested in outcome than in income.
Aside.
from the type of fund that benefits from the better day for railroad income bonds and tax-exempts, they must risk reaching for
like

,,

vest

confronted
/

balanced portfolio.

Fund managers, of course, bear an even

while,

at

BROOKLYN,

its

XT.

.

-

of all investors."*

have had sensational run-ups?

>J:

April 30 amounted
to $40,997,278, or $12.30 a share,
against $33,124,630 and $11.04 a
share on Oct. 23, 1958, the time
of the initial offering.

Smaller

In

this attitude, we might be less unhappy about the yield
afforded by common stocks and a little less prone to make'the
mistake of reaching for income in the equity portion of the list.!'

Wellington Equity Fund reports
net

4%.

.

available

been

ways

reach

would be wise to accept this situation and con¬

4%

a

of

^

stanti*l investor is

so

of that situation. 'He added:

positions-il in

-i

Thot afteirv.^partial- institutional
-aHd public financing of. new
commodities £Qbipmcdt^ jhe" rionro/>i»i+inn look
carriers .must
"parnfrttfe

to adopt

reports

net assets at

s-5

with the

take

to

the

Just Off the Press
-

was

long ago that corporate
bonds yielded roughly 3% and common stocks about 5%, so that
a trust fund invested equally in
bonds and stocks could look for

Hayden, Stone & Co. plans an
offering around May 28 of 1,800,000 shares of Electronics Capital
Corp.,

coming to grips with

was

the stock market

? J

penheimer, ."has been .designed to
take advantage of all professional
investment techniques.
The right

the spanking new Eisenhower
a business recession and
cheap and orderly: U. S. Steel sold at the
current equivalent of $20 a share, 10 times earnings was consid¬
ered a stiff price to pay for an equity and, although the counter
was cluttered with bargains, volume ran around 1.5 million shares
a day.
Indeed, one need go back only as recently as last Spring
to find a period when the life of moneymen was simple: the
Federal Reserve Board index of production was bottoming out,
long-term Treasury bonds were peaking and stocks were in the
early stages of a big push that was destined to carry to the
highest levels in history.
for the good old days of 1953, when

Administration

As Mr. Buek recalled, it waste't

Small Business Act

,

.

in Kuwait), Royal

Dutch and Texaco.
Much

& Co., which has Spon- managers of mutual funds wijth
Oppenheimer : Fund, • * Irt£. assets in exceas of $500,000,000]—
Max E. Oppenheimer, senior'part- suggests ;.thiit,
"certain selected
Owing to the strong similarity of their function, fund man¬
her of the brokerage firm and airline stocks appear to possess
agers will have little difficulty sympathizing with the quandary
president of the new fund, has in- speculative attraction at the presin which trust managers find themselves these days.
The dilem- A troduced a new i element to the ent time."
*
%
"
—
ma of the trust people was highlighted by Charles W. Buek, Exec¬
field.
The Oppenheimer Fund is v.
<4ome of the 'uncertainties inutive Vice-President of New York's United States Trust'Co., in
?
authorized to carry on practices eluded in Perspective's teservaan address before the Second Southern Trust Conference, spon¬
not
hitherto
consolidated- under tion about the industry are:
sored by the American Bankers Association.
| See cover page for
the management - of, an^ opelmeitd^
nrtuof whn** Ndnnkhni/icvrc* nntiau
That while stockholders' equity
full text of Mr. Buck's address.—Editor.]
company.
I. at Sept.
30, 1957, in the U. 7S.
Mr. Buek said the confusing problem of what to do in an
short
sales
in
They
xauy
inciuuc
include
mioii
in
carriers stood at $650
million, the
"understandable economy and an incomprehensible stock market"
stocks and bonds, buying and sell-;
CQS^ Gf new jet equipment is dtfer
could not be solved by boycotting the market until stock indi¬
ing currencies ol foreign countries
$2 biulon> and that an additiofal
cators return to normal.
All the old financial indicators, he
for spot and Jutuie delivery, trad"several;-hundred millions" **111
lamented, read "sell" but "we find ourselves tempted to buy."
ing in commodities,, spotj un^fu-% jrjg
for additioraV ennltiture;"The Fund,"said
Like fundmen, Mr. Buek can hardly be blamed if he longs
sored

.

such internationals as Gulf Oil

(major

Stock

....

Even

reducing its holdings of

was

history of the airlines, and then

-

to

heimer

than

United States.

dometsic oils,
on

VUHttjn

Problems of Today's Go-It-Alone Investor

and

grow,

abroad

Thursday, May 21. 1&39

fund bandwagon

By ROBERT R. RICH

reasoning that the long-term

sues,

.

hop-; on the mutual analyzing. in detail the "unceris the New York tainties," Perspective, which Kis
Exchange firm of Oppen-: published
by Calvin Bullock—

Latest

oil shares,

The

.

Until* nil#* i ill #*!• I*VI
Adired; to make the jet program
^11
A U# ' economically sound."
IT 1 C 'TVow TYkll ppilt 7After reviewing the postwar
llclb J1UW

What About the
International Oils?

.

The New Jets and

Airline

Earnings

jet age could bring substantial profits if the new equip-

$32,453,000.

ment

tion plans started by investors-for

"The

their

//JC0,

me.

Fund

Prospectuses available from
your Investment Dealer or

A

Common Stock Investment Fund

Investment
are

EATON & HOWARD, Incorporated
24 Federal St, Boston 10, Mass.
O BALANCED FUND

objectives of
this Fund "
possible
lonsr-term
capital and
growth for its shareholders.

income

Prospectus

□ STOCK FUND

upon

request




issue-

x

Lord, Abbett & Co.
New York

—

Chlcagt

—

Atlanta

—

.

Los

Angeles

new

customers

for
cur-,

of

Perspective in a
airline
industry,
"Current reports indicate that the
new
planes
have
captured the
fancy of the travelling public and
that passenger load factors in exreview

cess

of

the

of 90%- are

On

,
• % ;
The number of new accumula-

the regular monthly or quarterly
acquisition of mutual fund shares
totaled 31,-394 in. April. In March,
1959, the figure .wag 30,134. and,
m April, 1958, it was 17,078•
'
r

a

*

'

\/

r

/V

-

v

E. A. L.e Vay Co. Upens

being recorded."

E. A. Le Vay & Co.-has been
formed with offices at 79 Wall
"number
of
uncertainties
surStreet, New >York City to engage
rounding the industry," but, "one in a securities business. Partners
quick

Name

Address

makes

^operators," states the

rent

<

this

to

note

state

Perspective
is
there,are a

certainty is that a-fairly large increase

of

~

that

traffic

volume

is

re-

are

Edward A. Le Vay, Jr. and

Edward A. Le Vay, Sr,

Number 5848

/Volume 189

.

.

The Commercial and Financial Chronicle

.

and their bankers who

borrowers

•^havd -several' large
K*Vi~

-

J/

ings

*

■j
'
.

i,V.*

•

;

•r''"

"■ -V- a
'

:

M

public

for

test

;

of

,

prospects.

if

would

feel

<

less

y:.o>;5:

mined to do

tv
■

:

•

v

"I -—

^

J.,f

#,*- XvWrt

J-

;

.

concerned

'vi??

*Vnrk*:

ftasT

realistic pricing,

some

•

--r

deter-

are

r -

~

million

f

xt

°}

nf.

:•

after

Debentures Marketed
"•lr''

^

^ Boston Corporation
' ^ Wood, Gundy & Co., Inc. head
Jj* underwriting'group which of^^rfonn^no
iTail-ls.su<:
i

of $50,000,000 Alberta Municipal
w Financing Corporation 4%% sink'

nmxr.

,«

,

,

Inve^ent maricet; "Iohg^u/$75. million of new ing fund debentures, due May 15,
of discounting,,, the bonds up x°r bids on Tuesday, and 1984s < at98%j ~ tcr yield 4.89%.
;rfirming which has taken place in; "1"mate
^firming
in ultimate reoffering terms here Guaranteed unconditionally as to
the * basic. /money-;- marke.t^his^atjt^^I* will
the.1"' basic .money-;- maTke.t,^his^at^^vI^.will -.evolve from the principal
and v,interest
and-interest by the
+u„
i^+^r.4Olitrnrhp nf tnp enrrinpfitivr* cam
j
-

-

_

_

*athe Jprocess

,tr«ai7-

.week

took

stride

in

latest

the

outcome of the competitive sale.

0,

5such developments;*- ?;•' i

^,

t-»

Province

of

SJZ

wftllr'IS8 ofIS:

..

Alberta

-Me^timei-National Steel Corp.-; payable in. Uriited
The

fTnrime

thev

are

States currency.

debentures will not be

deemable except by

re¬

operation of

r^Se brf thef ^"slnMnr^nd^untrMay'lf
?

y18 e
g ?f 1969. The sinking fund, beginning
4+0U J *n 1961> is calculated to retire
>^did not occasion any:serious disthe effects of m0re than 93% of the issue prior
^
^^urbartce f in the primary
and 11 got ated vs. competitive sale,
to maturity. Redemption prices
!;• secondary bond markets.
^ • i '
The Week Ahead f: •
range from 101% for those re•'^ilv-»RigiiV now^the hone is that
Next week's calendar is replete deemed on or after May 15, 1969
^the -Federal'; Reserve Banks will with small prospects, most of them and prior to May 14, 1972 to 100%
;^ye;f^m£ifehip their charge to jn the equity division. But it for^those redeemed on or after
v-member bank "borrowers without holds promise of only
a small May 15, 11981.
^ undue delay. In fact a boost at ~ ^mattering of new debt issues. On
^ purpose ofthe
f; this aftern^ii'sf Thursday; May. 20 ^^pnday
West Penn Power is corporation, which was created by
meeting of the Federal Reserve slated to sell $14 million of bonds. the province in 1956, is to assist
fltprecurspr of am eventual hike in
^Wederab Reserve/ rediscountyrates,

.

'

Ranlr
Bank

Vnrlr

XiA\u
New

nrf
of

/
-

York,

-

nrnhahlv
probably

far toward clearing the
atmosphere.
/

would

It

go

except

volved,
are

realistic

sumably

ratesrj

or at least
for; credit: Pre-

the

thejory that' the

of

on.

buying interest.

^

not/been

has

Demand

indicated

a

willingness

any

to

reach" for bonds. But it has been

enabling the market to put on a
show of ability to absorb

'

better

such offerings as are
Yields
* even

:

are

encountered.

^getting up where
hav& been-leaning

those who

-mortgage
money-market ar« inciiiipd- to
t' start
looking, around for :;oppor;':tunities ;of better diversification
of their'holdings. .fc'J-/,
■
heavily

,

the

toward

.

(ft'
Some Trepidation

*!>!'

current ' market

;The

new

preferred of Crucible Steel Co. of

America, and
tional

Steel

.

On

Thursday^

week' from*

Southern

a.^

Elec

,

possible cost.

is scheduled to open bids for $25

sort

.

'hardly

of backdrop

area

is

in

and is

the

fourth

s

*a

Corp., found the,.^market more
receptive than l^jibeen the case
time.

course;1 tfief#

condi¬
tions
attaching"'this
quasimunicipal issue 'WfTich helped to
.

were

corporation «»- -4^.
intends to

The

ap-

Grass & Co. to Admit
become

on May 15 will
partner in Gruss & Co.,

a

The area 30 Broad Street, New York City,
approximately members of the New York Stock
255,000 square miles of which Exchange.
about 6,485 square miles are lake
DIVIDEND NOTICES
areas.
Estimated
population in
1958 was 1,201,000.
of

the province is

MIAMI COPPER COMPANY

those

Among

associated

with

61 Broadway, New York 6, N. Y.

The First Boston Corporation and

ft?

°^nn& are. Ripley
Harriman

';V\-.

& Co., Incor¬

Smith,;.;Barney

porated;

Dominion

A

quarterly dividend of fifty (50$)
share was declared, payable
June 26, 1959, to stockholders of rec¬
cents per

Securities

COMPANY

DIVIDEND NOTICES

DIVIDIND

KENNECOTT COPPER

161 East 42d Street, Ne w York,

The

N.Y.

share

per

of

a

NOTICE

of Directors

Board

declared

CORPORATION

today

dividend of 44 cents

on

the Common Stock

the.Company, payable July

May 15, 1959
the

At

meeting

of the

Directors of Kennecott

bution of

CITY INVESTING COMPANY
25

Broad

Street,

The Board of

New

York

Directors of

4,

N.

dividend

of

$1,375

standing 5Va'<»
the

Stock of

to

per

share

ord

the

at

on

stockholders

of

_

company,

of

June

on

the

on

on

Moy 29,1959.

PAUL B. JESSUP,

out¬

payable July 1,

record

18.

Secretary

at

the

1959,

close

UNITED FRUIT

of

1959.

JOHN

Vice

A.

President

KENNEDY,
and

COMPANY

Secretary

The Board of Director* of

240th

CONSOLIDATION

Consecutive

COAL

situation first 10 years. Pension funds and
reported showing interest.

D.W.JACK

"

May 15,1959

the

at

"**

Secretary

June 24, 1959,
record

rec¬

business

June 1, 1959.

de¬

was

of

Series Cumulative Preferred

stockholders

business

close

Y.

company

on

cash distri¬

share

per

clared, payable
to

a

Board of

Copper Cor¬

v

$1.50

close of business

this

*

May IS, 1959

&{ Co.; ord at the close of business
June 12,
Corpo¬ 1959.
ration; A. E. Amesv& Co., Incor¬
JOHN G. GREENBRUGH,
Treasurer
porated; McLeod,%Young, Weir,
Incorporated; Blyth & Co., Inc.;
Eastman Dillon, Union Securities
& Co.; Halsey, Stuart & Co. Inc.;
Lehman Brothers; Merrill Lynch,
Pierce, Fenner & Smith, Incorpo¬
UTILITIES
rated; and White, Weld & Co.
The

poration held today,

DIVIDEND NOTICES

Again it is not redeemable, exCept for sinking fund, during the

most desired by

Street.

Wallace P. Weil

in

,iA.

accmflt for the rather encouraging
..It. reewved. Carrying
4M %-coupon .for example, ,t was
P"ced at a diseolwlt. 98, to retpm
a yield of 4.89%. ,;J

;

Salle

than the State of Texas.

May 19, 1959. declared the regular quarterly

Of

South La

the

1950

gregated approximately $225,000,q00 before giving effect to repayThe corporation represents

Bankers makinr public - off er.'f£
debentures
of the Alberta Municipal Financial
some

and

only slightly smaller

ments

.

in

124

largest

population

Alfred D.

—

Plamondon, Jr., has become con¬
nected with Hornblower &
Weeks,

1, 1959 to stockholders of

■

regprded as the other institutional investors were

be

province

from the province ag-

loans

Manufacturers of

COMPANY

*

can

Since

and through March 31, 1959,

ance

.

lshing out the
et standpomt,
enerating Co.

(Special to The Financial Chronicle)

CHICAGO, 111.

v!

Alberta

47

With Hornblower Weeks

vested in short-term governmental
securities. ;
; "

niunicipalities, cities, tOWllS and

province has provided such assist-

.

Canadian

villaSes within the province
°P*a^n caP^al funds at the lowest

esday the Naakinir

u

into

.

of

robust character, that is it has not

41

988 500

is^cemiuion 01 Lookiu^Up

some

Si'

r!nnsr>lirla i cri

brings

v
Tuesday

prospect for

charges

money

'

;

in¬

politicians,

some

reconciled to the:

firmer

parties

all

that

appears

hriiurs

Tuesdn

.

Edison's issue, plus

conversion

funds, to the purchase of securi¬
ties of municipalities, cities, towns
and villages within the province.
Initially, all or part of the amount
of such net proceeds may be in¬
;

j ;'

they could be assured that the

sponsoring ^elements
.•

:•

Municipal
Financing Corporation

The'rank and file in the market

place

■

-

ply the net proceeds of the issue,

Alberta

offeroffering.

bond

But two, majpr issues now reachiugl that- point should provide a
severe

;.^v.

ortmM

ready

(2343)

at

meeting held today, declared a quar¬

a

dividend of 30 cents per share on
the Common Stock of the Company, pay¬

a

complete line

A dividend of fifty

storage batteries.

terly
able

June

on

1959, to shareholders

12,

the close of business on May

of record at

29, 1959. Checks will be mailed.
♦
John Corcoran,
Vice-President & Secretary

May 18, 1959.

Quarterly Dividend

of automotive and industrial

on

REGULAR

A

pany

QUARTERLY
of 50c

per

Board of

payable
of

has been declared

1959, to shareholders

Jr.

EDWARD D. TOLAND,

Secretary arid Treasurer

Boston, Mass.. May 18.

by the

Directors

,

record June 12, 1959.

Stock,

declared

was

cents per share

capital stock of this Com¬

July 15,

DIVIDEND

share

Common

on

the

1959

.

on

April 13,1959 payable
June

AMERICA'S FIRST TOBACCO

MERCHANTS

ESTA3LISHE0 17fS

•

Corporation

Atlas

33 Pine Street,
IV

15, 1959 to

stockholders of record
on

June 2,1959.

New York 5, N. Y.

DAGGETT

H.

A.

*•

PRESIDENT

«i

,1'»c

immM

<*

it-.1

:

-..

.

; FIlTt H ClOAhtTTti

v.-

■-hi

£"

.fl
h '

•

DIVIDEND

•

!

■'
m r

share on the Preferred Slock
and regular quarterly dividend of 50< per share on the splU Common
Stock of P. Lorillard Company have been declared payable July 1,
1959, ta stockholders of record at the close of business June 3, 1959.
$1.75

fT*Regoicrquarterly dividend of

*T ""

f

1

•

.1
*

mailed.

Checks will be

t

..

'

Record May 29,1959

on

'

Stock is equivalent to $1.00 per share

the-cfd Common Stock before
-

■

New

May 18, 1959

OLD GOLD

E.I.DU PONT DE NEMOURS t COMPANY

Series
to the

Crusb-Trccj Box
i

OLD GOLD

NEWPORT

EMBASSY

King Size

MURAD

Series

Crush

HELMAR

.

10,

BRIGGS
>

-

Chewing Tobaccos

BKCM-NUT

BETWEEN THE ACTS

a

UNION LEADER

•>

\

'

y"-: :■

bagpipe

FRIENDS
INDIA HOUSE




25,
the

at

1959, to stockholders of
business on July

close of

,

Little Cigars

Smoking Tobaccos

87'/j < a share on the Pre¬
Stock—$3.50 Series, both pay¬

and

July

record

Crush-Proof Box

FILTERS

ferred
able

_

.

HAVANA BLOSSOM

1959;

Common

also

Stock

interim dividend

13,
the

at

the* close

$1.50
as

the

a

share

second

on

the

quarterly

for 1959, payable June

to stockholders of record ot
of business on May 25, 1959.

1959,
close

P. S. du Pont, 3rd, Secretary

business

of

1959. 4

June 1,

COMMON

DIVIDEND

The Board of Directors

of Amer¬

Cyanamid Company today
declared a quarterly dividend of
forty cents
(40<0 per share on
the
outstanding shares of the
Common Stock of the Company,

payable
at

the

PerSh—o

4JB% GweMhre Preferred.. $1.02
111% Craeletive Preferred..

1.06

00% Ceweletiwe Preferred..

1.075

SJS% CeewfeHwe Preferred..

1.2025

$1.40 Dntfaad Prefereece...

All dividends

ican

holders

Dividend

Stock

26,

June

1959,

to

.35
45

CeeuMe

Board of Directors has declared this

King Size

•-"Regular

Stock,
D, payable July 1, 1959,
holders of such stock of

record

day regular quarterly dividends of $1.12V2
a
share on the Preferred Stock—$4.50

KENT

dividends

ending June

quarter

30, 1959:

of Amer¬
ican Cyanamid Company
today
declared a quarterly dividend of
eighty-seven and one-half cents
<87Vid)
per
share on the out¬
standing shares of the Company's
3 VaV« Cumulative Preferred

Regular

STRAIGHTS

the

Clarnoi

The

4

lor

PREFERRED DIVIDEND

'<

Cigarettes

clared the following

The Board of Directors

G. O. DAVIES, Treasurer

York, May 20, 1959

The Board of Directors has de¬

COMPANY

Wilmington, Del., May 18, 1959

a'.

CYANAMID

**

the recent split.

-

QUARTERLY DIVIDENDS

Treasurer

per

.

The dividend on the Common
*

AMERICAN

Payable June 15,1959

•

NOTICE

Walter G. Clinchy,

(

i

Regular quarterly of 25t per
share-

rfi'r ;

yavy,
1

•

«;t'

f;'V;

c

««m»l

cue

before dune 30,

payable on

or

1959 to stock¬

holders of record May

29, 1959.

J. IBVING KIBBI

.

Secretary

the

of such Btock of record
close of business June 1,

1959.
R.

S. KYLE,

New York, May

19,1959.

Secretary

Lie SERVICE
uosstom

oi lot usi

The Commercial and Financial Chronicle

48

.

.

Thursday, May 21. 1959

.

(2344")

BUSINESS BUZZ

Washington...
BeBnd-the-Seen® Interpretation*
from the Nation'*

And You

Capital

H

4

■

I

WASHINGTON. D. C.—There

considerable

be

appears
to
sentiment in

Congress favoring
United States membership in a

designed to aid Latin America
economically.
for

been

many

strong hope on the. part
of Latin American countries to
have an Inter-American finan¬
cial institution to promote and
exoedite development in Cen¬
tral and
South American Re¬
years a

apparently

is

realization

the

for

potential

greater

Hill

offers

America

Latin

thai

grow¬

a

Capitol

on

a

than any other area

the future

Republics,

These

earth.

on

already

course,

among

are

customers of
only in coffee and
but
numerous
other

turn

theirs,

big

are

not

bananas,

products.
America

natural

tremen¬

Avell

as

skills which

human

as

has

resources

not

are

Rapid pop¬
ulation
growth
and
rising
aspirations of the people have
increased popular demands for
more rapid progress in utiliza¬
being fully utilized.

tion

these

of

and

resources

skills.
No.

accelerate

purpose

economic

the

velopment by promoting pub¬
lic
and
private capital for
development purposes, by co¬
operating with the member

million

880

One-half

tistics, 50 Broadway, New York

in

or

each

paid by

in gold or

4, N. Y. (cloth), $4.50 (outside
theU. S., $4.75).

paid-in capital.
instalment

in

of

be

combination

some

—National

For

United

the

the

50%

States,

regarded

paid in will be
"national currency."

as

States—Harve

While
the

bank

America
is

to
look
to
the future,

in

growing

in

sentiment

subcommittee

Private

A

House

Foreign Affairs commit¬
recommended

has

tee

"That's

United
tries

States

has

tially

and

the

countries.

sharply

Congress

The

development for
there is a feel¬
ing and desire that it should be
stepped up.
many years, but

There is, of
that

is

prevalent

strongly

this

country

four

of

that

the

feeling

a

course,

in

in three

or

countries,

particu¬

larly, there is political instabil¬
ity at this time. There has been
a hesitancy on the part
of pri¬
vate
in

capital

be

that

the

taken

ments

to invest as much
countries for

these

of

some

fear

properties would

by the govern¬
time in the future.

over

some

This point alone seems to

be

a

major barrier.

American
cific

ic
;

his

Hopkins

Tax Incentive Urged

sent

authorities

Some

Latin

on

American affairs feel that

private

more

from

investments

the

United States will be made if

a

incentive

is
provided by
Legislation proposing
foreign investment, tax act is
pending before the House Ways
tax

Congress.

and Means

Corpmittee, The State

Department favors the proposal.
Hale

Rep.
of

House

a

Ways

Subcommittee,
one

Chairman

Boggs.

Means

and

and

autlior

of

of the measures for the for¬

eign

investment

declares

that

incentive

with

act.

Administra¬

tion support he is confident the

legislation

can

be passed at the

current session of Congress.

Ad¬

stitution

President

ica
A

well

designed

to

the needs of Latin Amer¬

on

a

sound

financial

basis.

$1 Billion Institution
The

total

Institution

resources

will

amount

between

and Latin

(2)

of
to

Eisenhower

and

to

Congress, strongly recommends
that the

United

States

partici¬
pate in the Inter-American De¬
velopment Bank.

the

It

$1

will

believes
be

three

that

such

the

million

of

Latin

stock of

the

$150

bank, and another

million

earmarked
sources

which

for

the

would
initial

be

.'re¬

of the "Fund for Special

American

a

population

in the

area

widespread

Westheimer
Walnut

ditions;*

members

'

the

which

needs

which

will

nounced
rect

of Latin America,

he

American

Latin

an

supported
resources

Stock

New

York

and

Exchanges,

an¬

installation

the

of

a

York-Cincinnati

New

The

phone.

by

Company, 322
Cincinnati, Ohio,

the

of

Cincinnati

in¬
specialize

will

Street,

York

New

resources

di¬

tele¬

phone

number is WOrth 6-2115.

and

which will give the Latin Amer¬
ican

members

a

With du Pont, Homsey

major respon¬

sibility in determining priorities
and

Individual
The

tion

(Special to The Financial Chronicle)

authorizing loans.
Share

proposed
ol

the

Quotas
total

subscrip¬

million

$850

Street, members of the New York

of

and Boston

authorized

capital stock of the
proposed bank (in shares of US,

for

$10,000

countries is

each
as

share)

The

quotas

operations fund

Exchanges.

He

previously with Wall Street
Planning Corporation.

by

follows:

contribution

special

Stock

was

QUINCY, 111.

—

of

countries

Residential

New
Pri¬

Public

and

Pur¬

poses—William W. Nash—Mc¬
Graw-Hill, 327 West 41st Street,
New York 36, N. Y., $8.
Services in Banking

primer

international

on

midwestern

for

prepared
St.

as a

nental

Illinois

new

Seaway—Conti¬
National

Bank

Company of Chicago,

South La Salle

cago

A

businessmen

result of the

Lawrence

and Trust

—

trade

Street, Chi¬

90, 111. (paper).

Mrs. Louis B. Trial Run Turned Out a Winner;
staff of Lam¬
A Report on the first two years

Bros.

& Co., Western Cath.
Building. Mrs. Craft was
formerly with Hess Investment
son

Union

and

Co.

A.

G.

Edwards

&

Sons.

of the Public Service Advertis¬

The

New White Branch

to

Du
pany

for

at

of

14

QUOIN, 111.—White & Com¬
has opened a branch office
North

Linden

under

management of J. J. Childs.

Campaign

ing

American

of

behalf

on

Higher

Education

—

Council for Financial Aid

Education,

Inc.,

6

East

4th

Street, New York 17, N. Y.

the

TRADING MARKETS

Botany Mills
Indian Head

Mills

National Co.

improvement of the

Official Films

Carl Marks

Latin American countries will

85,000 shares with each
share having a
par
value, of
$10,000. The United States subscription of 35,000 shares

contribute

amounts to $350 million, or 41%
of total subscriptions. The sub¬

utilization of its

scription of other members, .ag¬
gregating $500 million, were

President's Reasoning




Asso¬

American Cement

development projects."

the basis of their

Execu-;

Craft has joined the

made available

TThe Bankrs authorized capital
stock of $850 million is divided

on

Key

Rehabilitation;

Profits

vate

planning and execution of these

established,

Finding

Broadway,
York 18, N. Y. (paper).

"not

operations."

•Into

—

Relations
Section,
University, P. O. Box

ciates,'- 1440

in their development programs,

but in the

in
E.

Harbison

tives—Thorndike Deland

231

Joins Lamson Bros.
(Special to The Financial Chronicle)

Argentina, 10,314; Bolivia,
828; Brazil, 10,314; Chile, 2,832:
Colombia, 2,830; Costa Rica, 414:
Cuba, 3,684; Dominican Repub¬
lic, 552; Ecuador, 552; El Salva¬
dor, 414; Guatemala, 552; Haiti,
414;
Honduras,
414;
Mexico,
6,630; Nicaragua, 414; Panama,
414; Paraguay, 414; Peru, 1,382;
United States, 35,000; Uruguay,
1,106, and Venezuela, 5,526.
the

innovation
Industry—Samuel

248, Princeton, N. J. (paper), $2.
Problem

Seaway

BOSTON, Mass.—Harry S. Ingber is now affiliated with du Pont,
Homsey & Company, 31 Milk

v

and

Princeton

and

22,

York
:

-

Frederick

and

Industrial''

Direct Phone to NYC

desire for improved living con¬

in

Ave.,- New

(paper);;

American

Hill

rapid increase

and

Madison

Manpower

merely in the amount of. addi¬
tional

Guide

bank

a

billion." This would include $850

capital

to Barranquilla:
Figures on a Progres¬
sive City—American and For¬
eign Power Company, Inc., 100
Church Street,
New York 7,
N.-Y. (paper).

N. Y.

Westheimer Installs

economic

pressing

views.]

States

American Republics;

The

coincide with

the "Chronicle's" own

econom¬

United

and social problems

in

and may or may not

importance
in the economic development of

authorized

Manage¬
Relations

[This column is intended to re¬ List of Worthwhile Health Insur¬
flect the "behind the scene" inter¬
ance Books
a bibliography —
pretation from the nation's Capital
Health Insurance Institute, 488

spe¬

marked

of

Personnel
Industrial

—

resulting from

a

to Congress recently
declaring that the proposed in¬

a

message

is

for

The special relationship,

stitution

,

visory Council on international
monetary and financial prob¬
lems,
in a
special report to

serve

Bank

historical, political and

for

Johns

support

reasons:

(1)

proposed mutual security

and

should

States

the chartering of the big Inter-

i'-,

Meantime, the National

Eisenhower

President

a

$150 million will also be allo¬
cated by countries.

strongly of the opinion that the
United

the
tanks and mili¬

Eisenhower

(paper),

Facts and

curtail

:%/,/

of
and

Investor's

Subcommittee recommends that

coun¬

substan¬

office—everybody's

this

with

point program to cut down on
military
aid in Central
and
South American

Avenue,

Division, So¬
ciety for Advancement of Man¬
agement, 74 Fifth Avenue, New
York 11, N. Y. (paper), $2.

,

comedian!"

University,
have expressed the hope that
Congress will provide the as¬

the

to

trouble

(3) The desirability of

other

contributed

the

six-

a

Madison
16, N. Y.

Terms—Research

<£'iMM./«.!.£«, Ji

sistance.

from

investment

ment

the

of

ance.

261

York

Glossary

&§.

Congress for less military assist¬

of

Private Investment Wary

Brazer—Na¬

$1.50.

to

encouragement

an

investors

private
Latin

search,
New

for

sentiment

is

there

brother. Dr. Milton Eisenhower

of those programs.

E.

tional Bureau for Economic Re¬

President

opment

Associa¬

the United

Expenditures in

City

Military Aid Under Fire

the coming fiscal
year has $169 million earmarked
for Latin American Republics.

them
in connection with the devel¬

Planning

N. W., Washington 9, D. C,
(paper), $1.
cVv

dollars

The

to

Diebold

nue,

their policies, and to

assistance

Busi¬

on

tion. 1606 New Hampshire Ave¬

two.

of

Impact

Labor—John

and

ness

the

of

Its

Automation:

member

each

United States dollars,

countries in the orientation of

technical

Sta-

American Bureau of Metal Sta¬

program

provide

Metal

of

initial

have

Grande River.

de¬

Bureau

tries

payments of 20%, the bank will
have available the equivalent of

tary equipment being given to
our neighbors South of the Rio

of the
development bank will be to
1

American

instalment

When all
made
their

number of guns,

The

Avenue,
D. C.

6,

tistics 38th Annual Year Book-

there

Latin

dous

Connecticut
Washington

W.,

(paper).

of
our

1000

N.

coun¬

best customers, and our country
in

ica,

Financial

and

—

Quarterly review — Air
Transport Association of Amer¬

J

i

Traffic

•

Data

arrangement..

ex¬

change of goods and services in

Airline

structure of the

The financial

bank provides for an

/

There

ing-

taken

must

publics.

2

Monetary Fund
into consideration.

ternational
were

has

'

quotas in the International Monscriptions of other members, agetary Fund after the 1959 in¬
creases
in resources of the In¬

billion-dollar development bank

There

J

more

than half of the

&

Co. Inc.

Southeastern Pub. Serv.
/

...

United States

.

Envelope

FOREIGN SECURITIES SPECIALISTS

capital, and will assume a large
of
responsibility for
prudent administration and

measure

20 BROAD STREET

TEL: HANOVER 2-0050

resources.

*

LERNER & GO.

NEW YORK 5. N. Y.
TELETYPE NY

1-971

Investment

Securities

10 Post Office Square, Boston 9, Mass.
President
message to

Eisenhower

Telephone

in

v

his

Congress said he is

t

HUbbard

2-1990

Teletype
BS 69