Full text of Commercial and Financial Chronicle : May 24, 1951, Vol. 173, No. 5014

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ESTABLISHED 1839
UNIVERSITY
MICHIGAN

MAY 25 1951
BUSINESS ADMINISTRATION

LIBRARY

Reg. U. S. Pat. Office

Volume 173

Number 5014

New

EDITORIAL

We
longer

See It

any

room

casts of the authorities'at

Washington. The

of events here at home in the

economic field has

been rather different at

course,

into

sev¬

to rather

of the

than subtract from the hesitancy
general public to accept at face value all

that it is

Today I

during
Economic planning as it
relates to rearmament has been rather badly
discredited in a number of vital points; efforts
to make plans for the future effective are in con¬
sequence likely to run into additional difficulties.

'the

{

Those who

have undertaken to

foundations

from

inflationary

manage

Continued

business,

It is

and

problem

have

well.

That

in, I

may

ages

The

life

insurance

business."

"dollar

business

are

number
dollars

accumulate
—about

erally at
return

dollars.

Street.

Carrol

way

*An

invest dollars

that our assets or income,

address

Detroit,

by Mr. Shanks at a luncheon
Detroit, Mich., May 14, 1951.

not

year

a bear market, or the beginning of
market; and right now we wonder whether

rally in

bull

new

ket,
or

There

only

page

was

namely,

do,

time, I

told, when

*An

address

tell
by

had to be

cur

clients when and how to invest.

Mr.

Continued

dealers and investors in cor¬
complete picture of the issues now registered with the SEL
potential undertakings in our "Securities in Registration" Section, starting on page 66.

SECURITIES

you

good analyst to do the job we are supposed to

Biel prepared for delivery before
Angeles Society of Security Analysts, May 24, 1951.

of the Economic Club

Continued

decline marks the reversal of the bull mar¬
whether it will turn out to be another minor

intermediate reaction.

fixed rate of interest, whiih means that our

There is

18th

the present

just

Shanks

fixed, regardless of the contemporary value

the dollar.

conclu¬

perfectly natural. Only in Retrospect is forecasting
At a given time you are never sure whether this

$30 million of them every working day—gen¬
a

mistakes the hard

easy.

for policyholders;

This

any

specified

come

in Wall
old-timer, but
I have seen enough to have learned
that there are always people who
Heinz H. Biel
claim that the present moment is
fraught with more unpredictable un¬
certainties than any other time they can remember. This

great extent—but in¬
vestments which will be repaid in a
to

can

I make my

Always Unpredictable

inventory, or even common

way.

in dollar investments—not prop¬

stocks

come

chartist friends, nor critical of
I
merely say that I envy
As an economist, I have to
a
lot more thinking and guess¬

ing before I

happens to the dollar is immediate¬
ly registered in the life insurance
industry. Virtually all of our assets
erty,

and

I don't want to be facetious about

sion.

have I envied my colleagues

once

charts

100% accurate.

that

Anything

optim¬

expresses

stock behavior.

common

them.

be more aware of the rav¬
inflation than some other

businessmen.

their lows, and

them.

one

their

the

over

high before year-end, bond

new

near

who look
with the answers.
If the
answer turns out to have been collect,
they accept the
credit for their sound analysis and brilliant interpre¬
tation.
If
they
are
wrong,
they
blame the charts which, as every¬
body should know, can never be

worst threats to

lull in

Let

pressures.

yours

of the

one

civilization.
seems

page

about

strongly inflationary.
Pos¬
sibly, becauSe of the business I am

currently being drawn

talk

already

More than

be deceived—the fundamental forces

in June of last year may be
quite unwarranted.
But unwarranted or not, they are rendering,

V.,

are

ism

remain

experience since the Korean outbreak

our

there

moment

they must explain away a
developments in order to obtain the sort of
cooperation (or even tolerance) they believe is
essential for their plans.
Defense spending has
been slower in getting under way than expected.
Rearmament has had much less effect upon the
production of civilian goods than promised. Fore¬
casts of pending Federal deficits tend to fall on
deaf ears in light of current surpluses. A
public
led to expect scarcities of
many types of consumer
goods long before this—and now finding stores
overstocked—are wondering what to expect next
and are losing faith in what the masters at Wash¬
ington say.
conclusions

American

our

cent

Now, the

prices

great deal—a problem that threatens the

problem is inflation.

the
position
number of re¬

where

outlook, market analyst concludes commodity

price index will reach

(2) cutting non-military

power;

going

thought about

coming 12 months.

^affairs of the nation find themselves in

market's

price spirals.

told about what to expect

now

purchasing

mass

After weighing various bullish and bearish elements in

expenditures to bone; (3) tightened monetary and credit
controls; (4) reduction of bank-held government debt;
and (5) a vigorous policy of discouraging further wage-

eral points from what was expected <in many
private business circles, but this fact tends to
add

Partner, Emanuel, Deetjen & Co., Members N. Y. S. E.

Prominent life insurance executive sees inflationary gap
widening, and likens controls to sawing off fop of ice¬
berg to eliminate its danger. Lists as steps in getting at
roots of inflation: (1) a feasible tax
program that cuts

course

Copy

By HEINZ H. BIEL*

President, Prudential Insurance Company of America

for doubt that

Outlook for Stock Prices

By CARROL M. SHANKS*

the rearmament program and related phenomena
have failed to confirm the expectations and fore¬

likewise, of

Price 35 Cents

Inflation and Life Insurance

As
There

York, N.'Y., Thursday, May 24, 1951

the

page

Los

NOW IN REGISTRATION—Underwriters,

porate securities are afforded a

VALLEY MOULD

and

State and

& IRON

Municipal

Common Stock

Bought—Sold—Quoted

600 Branches

R. H. Johnson & Co.

Circular

Request

INVESTMENT

duPont, Homsey & Co.
Members New York

Boston

Wall

Stock Exchs.

BOSTON

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

120

Tele. BS 424

BROADWAY, NEW YORK 5, N. Y.

Tel. WOrtb 2-0115

Tele. NY 1-315

Troy

Monthly Commercial Letter
upon request

SECURITIES

Street, New York 5

Canadian Bank
°#Gommexce

THE NATIONAL CITY BANK

PHILADELPHIA

Albany

Buffalo

Harrisburg

Providence

Scranton

Wilkes-Barre

Williamsport

Washington, D. C.

Allentown

Bonds

Canada

across

Established 1927

OF NEW YORK

Head

Bond Dept. Teletype: NY 1-708

Office: Toronto

New York Agency:
Seattle

Bond

Department

THE CHASE

NATIONAL BANK
THE

CITY OF NEW YORK

20 Exchange PI.

Portland, Ore. San Francisco Los Angeles

We maintain active markets in
Dominion of Canada

^Massachusetts

Internal Bonds
Placer

Underwriters and

Investors Trust

Distributors of Municipal
and

Corporate Securities
Prospectus from authorized, dealers

Established

CLEVELAND

Chicago

Angeles

New York

Chicago

Cincinnati

ColumtHus

Denver
Toledo

Co.

ESTABLISHED 189!

1899

Iowa Electric

BONDS & STOCKS

Light & Power Co.
COMMON

♦

Analysis

upon

request

DEPARTMENT

Goodbody

(Incorporated)

BOSTON
Los

Canadian Superior Oil
Company of California

CANADIAN

OTIS & CO.

Ill Devonshire Street

New York

Development, Ltd.

VANCE, SANDERS & CO.

Development

Great Plains

CANADIAN

Dominion Securities
Grporation

IRA HAUPT&CO.
Exchange
Exchanges

Members New York Stock
and

other Principal

MEMBERS NEW YORK STOCK EXCH.

40 Exchange Place,

9
Dallas
Buffalo

115 BROADWAY

105 W. ADAMS ST.

NEW YORK

CHICAGO

New York 5, N.Y.

111 Broadway,
WOrth 4-6000

Teletype NY 1-702-3

WHitehall 4-8161

Boston

N. Y. 6

Teletype NY 1-2708

Telephone: Enterprise 1820

Chronicle

The Commercial and Financial

Thursday, May 24, 1951

(2142)

The

MARKETS IN

TRADING

Bank

National City

participate and give their
they to be regarded,

are

MAURICE S. BENJAMIN

Benjamin, Hill & Co.,
York City

Senior Parmer,

Corporation

New

Members, New York Stock Exchange

1920

New York 5
Teletype NY 1-583

120 Broadway,
BArclay 7-5660

Air Reduction

There

potential

frfcPONNELL&rO.
Members

Exchange
York Curb Exchange,

York Stock

Hew

New

BROADWAY,

120

with

of 6,000 degrees

world

since

this

STRADER,TAYLOR & CO., Inc.

year

every

TWX LY 77

when

in 1936

Unterberg & Co., N. Y. City

stock

its

years

zation

buy the

nearly

owns

270,000

shares.,
three

years

cash

net

:•

Tungsten

Canadian Gov't

GOLD—OIL—LEAD—ZINC
maintained

ago

new

John R. Lewis, Inc.
AVENUE

SEATTLE

$7,500,000

employed

Alloys

sent

will

1951

.'$12.75

Book value per share.,.,..»

dividends:

20.65

Unstamp. stock (6,430 shs)
Stamped stock (17,200 shs)

13.47
9.27

pfd. share 1950..

2.11

1951

with

Unterberg

stable

own

engineering

which

the

new

concentrating

ac-

man-

onerous

in-

rent ,
,

Beck

(2) long range developments, including new products; and
(3) research, for the
government. Results to date inelude the liquid oxygen plants and
related
distribution
facilities, a

bought

Basic

conducted

Corp!

follow:
aiwav«

profit.

attained by

chains

Kinney

that

indicates

cur

havp

shoe

Edison

reasons

0f thfe results

comDarablp

sharps

onmmnn

Oneratinn*

and processes;

been

the

I d

o u

revjew

EXCHANGE

such

and

Shoe

profit

the

margins of Miles have been con-

sistently the highest among such
chains

fin„

...

owi rS

& hall
York

Stock Exchange

120 Broadway, New York

Teletype

Telephone
BArclay 7-7349

1-2739

truly

the

that

believe

company

classed as

Profit

Lets

s? i'03 000 S

were

alone

msn

$5 900

wLs

twke

arc-

.(c) The outlook is good. Earnand equipment jngs
J950 were $2.91 a share as
regarded as the most
■
.

Reduction

domestic

pxobably

output

ac¬

carbon
•and

1950

give-wide

•

136

128
v

•

123

>;^

•

1948

-——

125

1946

-1940

j.
-

1945f-

♦Excludes

geographic sales.coverage. A sub¬

Income

sidiary, owned jointly with Gen-

fected by shoe

Tax.

Ames

Emerich.

Chicago

SAVINGS

BONDS

N. Q. B.

OVER-THE-COUNTER

Per Share

Based

Earnings

Presemt.y

Sales

Outstanding Common,

$23,898,000
22,024,000
21,077,000".
;
19,060,000

$2.91

19.08Q,000

126

15,050,000,

124

13,000,000

2.49

2.32

2.04^

INDUSTRIAL STOCK INDEX :
12-Year Performance of

35 Industrial Stocks
-

BOOKLET

REQUEST

2.22*
*

1.36

:.70$

National Quotation Bureau
Incorporated

capital gain
tAverage.
^Operations
$S9,930

rationing.

BUY

Continued on page 38

126

,•1947

wire

sma11 number o£ common, shares
in
relation to lts substantial sales
volume could result in a marked

Direct

BOwllng Green 9-4818

there is little leverage..in.its ca£"

of Stores

1951

1949

liquid and solid (dry ice)
Some 177 plants
-warehouses

Ending
*1/31

Nuinbev

and

oxygen

dioxide.

391

Average

of the total

acetylene gas, while its Pure Car¬
bonic division is the largest pro¬
ducer of

Fiscal Yegr

Exchange

Bell System Teletype
PH 771

York City Tel.:

the past five years
marSins have approxi-

mated 5Va% after taxes. In view
of tbe current expansion pro£ram> volume over the next few
years could well, expand materially.
While the company is
conservatively capitalized and

significant contribution to welding
technology in the past 20 years.

Stock

growth

company.
Luring

KIngsley 5-2700

liabilibes^

Phila.-Balto.

can

total

plant,

Low Vj2

nielsen, gordon

Pension- again got under way.

'huJ^current^lSlawae ital structure! . nevertheless the

Members

123 South Broad St., Phila, 9, Pa.

New

Joo

which

Ugnru D Ufgrngr S, Pfl IflQ
IIOIIIJ U.ffOIIIDI <*UU.flllli.

ditions eased somewhat and ex-

purifying argon, new processes for
production of nitrous oxide and

carbide

counts for about 30%

New

5%s

American Marietta

Phila. Telephone

C+Ti„0.
" current

Air

Members

Central Electric & Gas

Central Public Utility

able leases were not available,
but beginning late in 1948 con-

improved methods of recovering and

calcium

High 4

Range 1951

City Electric Rights

Pennsylvania Railroad

postwar years reason-

profits mediate

excess

believe

creasihgly larger part of its effort
consist of
(1) improvements of
present products, plants, methods

velopment of its Aircomatic

249.996 SHARES COMMON STOCK

CURB

Atlantic

period of expan-

new

resources

Process
LISTED

& Phosphate

Houdry Process

vears—

and

...

YORK

Continental Sulphur

The

entered

New York 7
Tel. NY 1-1932

Giant Portland Cement

will, expand,

area

Security Dealers Assn.

DIgby 9-1550

•

cyclopropane; and the further de-

than double 1950

Tel.

stated above, it is expected that
operations in the Philadelphia
,

Common

Broadway

better

over

new

entitled to $11.00

plus
accumulated dividends in liquidation

NEW

150

Members

located in New York and New

•

agement

share..

Sales 1st quarter

repre-

4-1959

CiEKSTElV & FltEIVKEL

show- —
; '
earnings , and sion which was interrupted dur¬
that^f excellent growth potential. In 1950 ing the war .years. Between the
1950 Excess profits tax earnings earnings weTe $2.91, the highest in calendar years 1936 through 1942
hase^^hn^t ^ 98
?
g -the company's history. Average the number of stores increased
The romnanv'is snenrline 1530earnings for the past five years from about 79 to 126 and sales
000 000 for
and ^rrmroved fa- have been about $2-40 Per share, rose from $8,350,000 to $15,880,cilities
the next two
indicating a reasonable price to 000. During 1943, '44 and 45 opcompletely financed bv^the com- average earnings ratio of about erations were adversely affected
This is^n seven and
a satisfactory shelter by shoe rationing. During the imfor

tivities

Company

Both classes

Old

yielding several years,
equity issue *
In my opinion. Miles, in 1949,

looks like the

aeo

vear

Research

7% Cumulative Preferred!

Earned per

Ref.

Missouri Pacific

table
below
shows the
h i g h results of operations for' the p'ast

Accumulated

mon

taxeg

per

com-

Wisconsin Central R. P.

Jersey, with a few in PennsylThere vania, Connecticut, Delaware and
indebt- the Washington, D. C., area.
As

The

Electric

operates a chain of re-

company

are

Rights

Common

c o m m o n

ahead of

and

edness."

record' sales and
profits. First quarter net earnings
after allowing for -almost 200%
were

stock.

nriHitfnn7nn
nnn
cnpnl in against
addition
to
$5,700,000
spent-m

quick assets

tail shoe stores under the name
of Miles Shoes. Most, of the stores

pre-

e r r e

Atlantic City

The

Vice-President.

and

City Bank of N. Y.
Common

Rosenberg, Presi-

4%%

450,000 shares

this resulting in

Danv s

Net

Nat.

over
160,000
held by the public and

and Samuel H.

con-

WOrth 4-5000

new

ELiot 3040

105

General

addi¬
share.

per

dent

directly and profitably, all plants
were improved and enlarged, costs
reduced and efficiency raised—all

ing

Teletype SE

increase in taxes

Analysis available on request

into

turned

were

ness

Placer Development,

1006 SECOND

are

Teletype BS 259

under¬

same
77,400

$16

sists of 22,814
shares
of
f

■\

De¬

somewhat

management was installed. Per¬
sonnel was streamlined, substan¬
tial investments in outside busi¬

Trading market

Thus,

earnings. Allied

times

About

Mine and Mill for

the

1950,

distributed

writers

tional

Also in

paid.

Y. Telephone

earned

existence. Today, one can

Chemical

Lynchburg, Va.

and Operate

was

cember,

C. E.

request

148 State St., Boston 9, Mass.
Tel. CA. 7-0425

As my candidate for "The Se- the shares now enjoy a satis$3^5 in 1950 Investors paid 30-35 curit^ 1 Like Best'" 1 would SUS- iaCl01y n'arket*
timpc
Pirninf^
for
this
"blue Sest the shares of Miles Shoes comThe business was started in
chip" which has paid dividends mon currently selling around 16. 1917 by the prerent major stockCapital!- holders,
Murray M. Rosenberg
sells

now

Limited

UNTERBERG

Analysis

shares of Miles

underwriting by Wertheim & Co.
At that time
23,444. .shares of preferred and
56,267 shares of common were
s°ld at 102 and 19 Vz respectively,
In the 1949 fiscal year a 50% stock
dividend,

CLARENCE

Life Insurance Co. of Va.

Will Build

sold

g7.

shares,

and Lehman Bros.

stock

fEROVOX CORP.

area,

Shoes, Incorporated were first offered to the public through an

new

whfn.il
larnef $2'79iJSc°,1lat
Miles Shoe Common
1946 when it earned $1.66; and

Dan River Mills

de-

sour—a

Air Reduction sold at 87

Camp Manufacturing

that

share over

per

doubled

choice.

Commonwealth Natural Gas

products the

new

pressed "blue chip"—which is my

Bassett Furniture Industries

Maurice S. Benjamin

stock

sweet

American Furniture

—

completion

Philadelphia

In June, 1946, the

period of
a
few years. Net assets and net
working capital have more than

or more

oxymoron

and

Philadelphia,

street,

common

growth potential is clearly visible
and earnings could increase to $5

ing to pick a
is

the

branch offices

our

units to be

families

plants and with

favorite stock.
Here

oxygen

With

be¬

Direct wires to

(d) The management and their
are large holders of
the

cutting, wherein
it produces a flame

period of high

cially intrigu¬

Trading Intereet In

an:

oxyacetylene

comes espe¬

NE?W YORK 5

the

stock averages

crises

Tel. REctor 2-7815

the product is being
increasing rate in

block,

NY 1-1557

the fall will be on Mar¬

0pene(j
ket

used

this

and

synthetic rub-

Exchange

for

scheduled

are

Curb

New York 4, N. Y.

Mobile, Ala.

year

of the n€w

Qne

1951

kers* Plastics and* fibers and in a
multitude of pther products es~

ing

fortunes.
At

used

York

New

HAnover 2-0700

a/against
128
asnd six addi_

13g

stores

tional

York Stock Exchange

Members

New Orleans, La.- Birmingham, Ala.

expected to be one of~the largest
sential to the defense effort. Apart, jn the chain and also will be the
from its use as a chemical build- nucleus of a series of stores in

opportunities
for
building

Since 1917

material

raw

the manufacture of

bar-

gains and

Rights & Scrip

chemical

been

ways

latent

and more important as

come more

Members New

25 Broad St.,

T operation during

that

Steiner, Rouse & Co.

ior

flrst Quarter of the current

'hef r0.ma"ce °* bide
clus.vely
by reacting calcium car- 1950
and water, continues to be- the
is

stores

there have al¬

Specialists in

♦

Acetylene, generated almost ex-

exam-

many

business

investment

d&diri?x

surgical instruments, are also

Street." The fascination of

"Wall

the

Co., New York City. (Page 2)

J™

been

have

Unterberg

Unterberg,

equipment and another subsidiary makes gas-driven electric
welding machines. Medical gases
manufactured.

Company

Bought—Sold—Quoted

Miles Shoe Common—Clarence E.

eral Electric, makes electric weld-

and

Louisiana Securities

Benjamin, Senior Partner,
Benjamin, Hill & Co., New York
City. (Page 2)

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

as an

Selections

Air Reduction Company—Maurice

particular security.

(The articles contained in this forum

5Vi/52

Hanseatic

Established

for favoring

Common

Interstate Power,

Central Public Utility

New York

reasons

Alabama &

and

Participants

Their

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

in the investment

Common

Week's

This

Forum

A continuous forum in which, each

Stock & Rights

R. Hoe & Co.,

Security I Like Best

after,. deduction ' of applicable Federal
during portion, of period adversely af¬
« f
»■.
. • '
^ .

46 Front Street

New York

4fN.Y.

Volume 173

Number 5014

The Commercial and Financial Chronicle

(2143)

INDEX

The Nationalizes Become

Articles and Newt

AND COMPANY

Outlook for Stock Prices—Heinz H. Biel

Cover

Inflation and Life Insurance—Carroll M. Shanks

Cover

By ROBERT S. BYFIELD
Member of New York Stock Exchange

Mr.

PREFER BLONDES"

—Robert S. Byfield__

confronts Attlee's Labor Government

with its most disastrous failure since assuming office,
it to oppose actions overseas which it has been

—Ira U.

pursuing at
Alleges the necessity of both Britain and U. S. handling
present situation to protect integrity of other foreign invest¬

home.

Cobleigh

—Craig

Bartlett...

feeling,
has

fanatical

groups

great upsurge of nationalist

the

Iranian

decided

Government

take

the

over

Anglo-Iranian

e r

Here

leading

The Schuman Plan—Its Hopes, Risks and
Danger

Telephone:

is "Fair Shares for

Mortgage Lending in Changed Government Bond Market

British

most

Brit¬

are

all

the

Exchequer?

Lovejoy, Jr

don't

Common Stocks and Pension Funds—Paul I. Wren

sation is not

Bell

•

The New Tax Bite and Forthcoming Dividends
—William

Witherspoon

The

property

Performing Industry's Dual Job in Present Crisis

and

Robert

freely negoti¬
ated

agree¬

ment

which

has

Byfield

another

forty
the public relations

to run,
policy of the
years

has

company

appar¬

ently not met with success. Natu¬
rally London is distressed and
from

some

ernment

astrous

its

since

1945.

about

are

facing

failure

power

angles the Labor Gov¬
it

The

most

dis¬

came

into

nationalizers

nationalized.

Almost all segments of the Brit¬
ish press have been loud in their

"The

has

fact

nationalization
more
,

than

is to

that

say

states,

faced

that

nothing
expropriation
seizure of an

means

less

London

the

raised.

great

and

holders.
taken

had

change

the

socialist

of the age
reservation that it
nQt for export
and that

was

"its

panacea

any

wild

have

men

freely

ex¬

pressed the opinion that the for¬
mer

should
is

did not deserve

owners

receive

not

refreshing

London friends

and

penny." It
note that our

are

learning that

he who sups

with the devil must
use
a
long spoon. "Nationaliza¬
tion," indeed it is—or perhaps,
"socialization,"
"expropriation,"
"confiscation"

what have you?

These

long words are, of course,
semantic opiates dished out by

the

intellectuals.
the

wherever

Whenever

Jolly

Roger

and

Socialist larceny is unfurled over
the

of free enterprise the

corpse

the

point about the forth¬

coming larceny in Iran is that it
be happening to Britain's
Labor Government!
History re¬
should

bitter¬

properties were

about

$850,000,000

1945

and

1948

basis

for

purchase, a grotesque method,
to say the least, of determining
the equity of an unwilling seller.

Again,

when gas and
nationalized,

electricity

municipal
plants
were
taken
over
along
with
privately owned
installa¬
tions. A 1950 report on national¬
were

ization

entitled

"The

Great

lost

ham

about

Manchester

million

£12

almost

£ 10

confuse the issue.

Seiz¬

of property

by unilateral ac¬
judicial arbitration
and without full compensation is

tion

See

Stocks

page

Giant

Radioactive

Coming Events in the Investment Field
Dealer-Broker

Investment Recommendations

Einzig—"Problem of Aged in Britain"
From Washington

Indications
Mutual

2-8200

Singer, Bean
& MACKIE, Inc.

18
29

Wilfred

;

Our

Reporter's

May

Report

Prospective

Public

Security

Utility

Offerings

Securities..

Air Products

Salesman's

Securities Now
The

Corner

Registration

Security I Like Best

Tomorrow's Markets

Baker-Raulang

33
2

The State of Trade and Industry

Washington

Collins Radio

(Walter Whyte Says)

You

and

Dictograph

Schenectady

Worcester

Di-Noc

Column not available this week.

31
Twice

Weekly

COMMERCIAL

WILLIAM B.

DANA

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

WILLIAM

DANA
D.

ary

Stromberg-Carlson

matter Febru¬

Whitin Machine

25, 1942, at the post office at New
N. Y., under the Act of March 8,

1879.

Works

Subscription Rates

President

Business

second-class

York,

9576

SEIBERT,

Hoving Corp.

Eng¬

Company

COMPANY, Publishers

RIGGS,

C.,

Place, New York 7, N. Y.
to

and

CHRONICLE

2-9570

Exchange PL, N. Y. S

Railroad Securities
Securities

Teletype NY 1-1825 & NY 1-1826

Our Reporter on Governments

Manager

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

Pan-American

Union,

Dominion

Canada,

Other

Countries,

$45.00

per

$48.00

year;

per

Bought

year.

$52.00 per year.

'»

—

«»«!*(.

Sold
V.

—

r#*

Quoted
«r.

Thursday, May 24, 1951
Other Publications

Every Thursday (general news and ad¬
vertising issue) and every Monday (com¬
plete

statistical issue

records,

1-5

Engineering

HA-2-0270

REctor

50 Congress Street, Boston 8
Hubbard

Glens Falls

Funds

Observations—A.

state
-

and

Ahead of the News—Carlisle Bargeron

News About Banks and Bankers

Members New York Curb Exchange

HAnover 2-4300

Chicago

Thermal Research

NSTA Notes

WILLIAM

Products

Business Activity

FINANCIAL

Spencer Trask & Co.

Corp.

Mfg. Co.

Portland Cement

Securities

HERBERT D. SEIBERT, Editor & Publisher

Albany

Bates

PREFERRED STOCKS

Teletype—NY

Dev. Res.

Cover

25 Park

25 Broad Street, New York 4

Business Man's Bookshelf

larceny by any standard of
morality
A burglar who breaks

York Stock Exchange

Wires

Canadian

still

Continued

Teletype NY 1-3370

Direct

(Editorial)

Bank and Insurance

interested in offerings of

New

without

High Grade Public Utility and Industrial

-Members

Philadelphia and Los Angeles

(Boxed)

Reg. U. S. Patent Office

^-5133

Associated
As

Published

are

Broadway, New York 6

Regular Features

The
We

and

million.

payment of compensation,
Socialist-style, must not be al¬
to

Reilly&Co.
Incorporated

Savings Bank Deposits Increase

Now It's the "Family Farm"!

J.F.
5
14

Security Analysts Choose New Officers

Be¬

trayal" points out that formidable
losses
were
taken
by
various
municipalities because of inade¬
quate compensation. It was esti¬
mated that the government took
over
gas
assets valued at
£94
million
for
only
£21
million.
For example, the city of Birming¬

ure

But

for

Ivan Wright Urges Businessmen Watch Reserve Board
Policy.

act used stock ex¬
quotations
at
certain

dates

lowed

Larceny

vesting

always suffice.
the

justified

The steel

Capital Funds Up $1 Billion in 1950

properties

accusation

may

fully

over

The

blanket

perhaps only half their value.

simple five-letter word provided
in the Eighth Commandment will

Irony

Mutual

request

Funston Slated to Be President of New York Stock
Exchange.

New York

TIME INC.
*Circular

—Henry Ford, II

Bank

appraisal

the part of British share¬

ness

The

without

overall

logically
Nevertheless,
there

issue bewails the fact that Britain
as

inadequacy

nationalization

nationalized

enterprise." The "Bankers' Maga¬
zine," also of London, on its April
advertised

ob¬

Goidl Situation—L. Werner Knoke—

which has been made of the value
of

"Economist"

know

and

conservative

jecting to
identical
action
in
Iran. They will argue that they
"compensated" British stockhold¬
ers
for their holdings in Coal,
Transport, Cables and Wireless,
Civil
Aviation, Electricity and
Gas and most recently Steel., But
in
many
cases
"compensation"
has fallen far short of fair value.

Iranians.

the

action.

be hypocrites

they would

protests against the action of the
Even

unilateral

Undoubtedly the British Social¬
ists will hotly resent all accusa¬
tions that, having "nationalized"
about 20%
of British industry

Alegre Sugar

valuable

asset

Drydock

Remington Arms

;

—James Washington

as important as the
established of seizing

seas

*Punta

It is Time to Reconsider the Gold Standard

principle

is based

^Maryland
10

Britain's most
over¬

Superior Oil

what

barrel-head. However, the amount
of and method of paying compen¬

ish
citizens.
Although it is

—Thomas E.

Canadian
Chappie, Jr

the f

expense

compensation, if any,;
will be given Anglo-Iranian
by
the Iranian Government, but it
certainly will not be cash on the

who

the

part

know

private

Security Markets and Business Outlook—Julian D. Weiss

even

YORK

Progress Toward Defense Power—Charles E. Wilson

Where Is All the Steel Going?—Bennett S.

by the British
Government

for

country

with

ians

investors

watch, and if the chief
slogan flying from the masthead,

Socialist

NEW

WHitehall 4-6551

of retri-,

case

the instance of

capitalistic

turned

jointly owned

and by

classic
is

WALL STREET,

All," who canobject to fair shares for the Iran¬

ise

p r

no more

bution.

world

Oil Co., a bil¬
lion
dollar
e n

cords

Obsolete Securities Dept.

• ■

—Philip Cortney

Egged

prefer those "gorgeous look¬

ing" obsoletes.

The Current Money Market and Bank Portfolios

ments, with the incident demonstrating the great vulnerability
of Point Four philosophy and proposals.

and

but

I Like the Wide Open Spaces—Out Where the Tax
Is Low

forcing

"GENTLEMEN MAY

The Nationalizers Become Nationalized—In Iran

Byfield asserts Iranian Government's illegal nationalization

of British oil properties

LlCHTfdSTEl

Page

Nationalized—In Iran

corporation

and

Other

—

market quotation

news,

bank

clearings,

Offices:

135

South

Note—On

account

the

fluctuations

the rate of exchange,

city news, etc.).

Chicago 3, M.

Bank and Quotation Record — Monthly,
$30.00 per year. (Foreign postage extra.)

Salle

St.,

(Telephone: STate 2-0613);

remittances for for¬
eign subscriptions and advertisements must
be made In New York funds.

THEODORE YOUNG & CO.
40

Exchange Place, New York 5, N.Y.

WHitehall 4-2250

Teletype NY 1-3230

The Commercial and Financial Chronicle

(2144)

I Like the Wide

Open Spaces-

ing for a Va royalty (in contrast
to
Vs secured in earlier leases).
And best of

Out Where the Tax Is Low
By IRA U. COBLEIGII

ing

you're

pair

revolvers

Hopalong hat,
Catskill

fense,

farm

eyeing

for

your

sunset

years,

you've

your

for

this

atomic

de¬

—make

erful

pow¬

and

im¬

aginative
peal
to

ap¬

the

American

mind.

Our

tradition

Ira

Luuiuigh

and

history attach great importance to
the ownership of land, as

a means

security, and as a basis for
personal independence.
But land purchase, however ro¬
mantic,
has always
had
some
If

drawbacks.

you
live on the
always farm it, saw
wood off it, pick berries or ap¬
ples. But if this land happens to
be remotely located where it can

land,

you

can

neither be grazed upon, nor

out

for atomic

site

Meanwhile

pay—quite

there

low

taxes—and

it,

meet

and,if

We're goLg to look over
together some famous companies,

of terra firma

not

Now
and

devoid of pre¬

we'll talk about is

this

stock

You think of it

000

plain

of land and

rail;

but

this

North

the

West

ap¬

Oldtimers

about

harrumph when

this

They'll

one.

crossed

100

i's all through.

doe?

not

Far from it.

coveries in

the

suggest that

more—

lie

within

West

some-

rich

Texas

Field

TXL land may

pool

high

now,
are

since

big

Co.

Land

owned

fee

here

The

rearmament

takes

thing, TXL has been
upgrading its royalty takes. Some

in Montana

Dakota, and important

III.

vast

abroad and

spending
for

are

has

level

civilian

forces.

ary

new

leases have been signed call-

Our statesmen

widely

and,

acres

of lend in the Northwest.

Copies

gas
are

rights

dous rise in

request.
,

J
.

Please

ask

Delaware.

And

cases

some

this part ownership included a lot
of other assets and earnings be¬

land
if

the Stock

want

you

Kern

Exchange, and
it

put

County Land.

Totals

1950

and

down

•

Memorandum

Reserve

Banks,

land

YORK

STCCK

NEW

EXCHANGE

YORK

29%

year.

Commerce

for

new

and

the

plant

and

total

may

increase

the 1950 level. Obvious¬

over

Committee would like to

expenditures

curtailed

see

such

and

has

suggested that both the borrowers

rather

create doubts and confusion in the

and

economy

assuredly have

un¬

settled the security markets, espe¬

cially

the

several

bond

In the welter of all this

let

factors

see

and

the

upon

markets.

confusion,

try to analyze the

influences

get to
as

.some

$220* :

dividends, would return 4.3%

a call on earnings from
enterprise and growth from land

would

indeed

hard

some

this land broke out in uranium

And

suppose

tungsten, platinum or gold. Sup¬
pose some of it became the Win¬
or

the Houston of 2000 A.E\

for

have

liking

even

better

rea¬

"the

wide,

open

■

for credit and

otherwise
case.

The

.509.olive

production
need

for

truth

increased

credit.

said

the

demonstrated

see

new

will be financed

depreciation

have

inventory

goodly

for

should

por¬

plant and equipment

reason¬

do.

through earnings,

and

some

Continued

degree

page

Reeves Soundcraft
Eskimo Pie
Bought

—

Sold

—

Quoted

capital larger than

might

have

been

the

has been

JAMES J. LEFF & CO.
Incorporated

important factor and

Broad

St., New York 4

Telephone B Owl ing Green 9-5920
*A.n addrers by Mr. Bartlett before the
Ohio Bankers Association,
Cleveland,

Teletype NY 1-3018

Ohio,

May 10,

IS51.

Established

1856

Hotel

H. Hentz & Co.

meets

Members

of the

Weylin

the requirements

discriminating

New

York

Stock

Exchange

New

York

Curb

Exchange

•

Central Location

Exchange

•

Spacious Rooms

•

Homelike

York

Chicago

Co.

Cotton

New

Exchange,
Board

Orleans

Cotton

other

Inc.
Trade

Exchange

Exchanges

„

Atmosphere

•

Delicious Food

•

Intimate Cocktail Lounge

•

Excellent Service

street

N. Y. Cotton

For reservations

Exchange Rldg.

Theodore B.

St. Louis 1,Mo«

many

needs

However,

tion

and

the

economy

honest

bearing

to what to

that

reduction in some

"V"

High costs of

have

can

segments

bank

increase in

loans.

working capital, and

position of the Treasury

New

will

defense

modity prices has been an im¬
portant factor making the demand

Stix

and

loans and doubtless

lor capital. The sharp rise in com¬

$9.45

give

that

there

various

markets

money
can

able conclusions

output of civilian
goods also will remain high. The

demand for credit obviously must
remain high, and in due course

fluence the demand for credit and

package that,w on

WCCD, WALKER & CO.
63 WALL STREET.

the

refunding but recently
accomplished, all have served to

And

NEW

unusual

available

■

last

by the U. S. De¬

$24,000,000,000,

i,/ 4,50

„

Here's

„

MEMBERS

loans, the huge

institutional investors to the Fed¬

eral

for

than

survey

outlays

in¬

different

bank

Commodity
on

be larger

will

expenditures

appear

sales of Government securities

this company which dis¬

possibilities of its ownership of oil and

capital

until

MIDWEST STOCK EXCHANGE

several million

forces continue

the midst of the
find some deflation¬

a
big oil company was re¬ the sharply expanded national de¬
ported to have purchased a block fense appropriations, the increases
of this slock for a pension fund- in prices and
wages, the tremen¬

MEMBERS

memorandum

Certain it is that

ly the Voluntary Credit Restraint

Inflationary

and

spaces."

the

Bartlett

great and yet in
we

inven¬
sectors

and the lenders postpone the non¬
view¬ essential
projects
for
a
more
recently, our propitious time.
exceedingly good.
Dividend of monetary authorities seemed to
While expenditures for the mili¬
$2.50 was paid in 1950.
Recent share widely divergent views as tary program may reach as
high
findings of oil have sent LLX to to how the economy should be as 18% or 20% of
gross national
new highs in the past few weeks,
directed. The news from abroad,
product,
the

NORTHERN PACIFIC RAILWAY

cusses

Craig

activ¬

inflation

some

equipment during 1951

record

upon

and

recent

SEC

con¬

some

expenditures

partment

su¬

high

ity."

imposed

adjustments in

may

everyone

business

high level, despite

crease

huge

been

per

that

definitely will continue at

military

home

;

which

of the economy.

military pro¬
gram which

points,

sons

tory

vast

sums

point

agree

ditions

sums

acres against 3,000,shares, but oil take has been

Then you'd

prepared

will

have expended

000

nipeg

We have

One

World

War

Treasury have

carefully.

Business Conditions

aspects

the

considered

some

the

needs

that

program

only 616,500

duplicate.

Another

bal¬

reserve

I" mentioned,
ances, a move in right direction.
Counsels commercial banks,
in these columns, another acreage
howeyer, to restrict portfolios to short-term government issues
deal that surely
belongs on. to¬
because of uncertainties in Government bond market.
day's soil parade —Kern Couitty
Land Co. Here your land works
Great
economic
and
political whether or not it operates with
out to about an acre a share, with
changes I have taken place since a surplus or a deficit has a direct
the stock selling at 64 and paying the
end of World War II and now
bearing upon the money markets.
$4.50. Widespread holdings are in we find ourselves in
the midst of
ago

grade crude.

Well,

slices of this land
and

stock

Why, less than 2% of land owned
is bringing in oil; and recent dis¬

the mineral

6,000,000

over

all.

5%
would

even

jump down to Texas

stock

mean

about 3acres per share of com¬
mon

proves

new

Federal Reserve Banks in creating and
controlling

in fee about 2.500,-

owns

acres

rights

barrels;

1,200,000,000
land

Says

of the

tell you about the time a quarter
C';/;/'''/'Money Rates
program form the major four dis¬
The course of money rates for a
century age when this petroleum cussed would stand
you thus:
paragon split
100 for 1. They'll
long time has been set by the Fed¬
Vy.yy^.y^.Vy;';(/'
Acres
Price
1CS0
tell you how many yachts you are
eral
Open
Market
Committee.
/
Stock— /
per Share About
D.v'd
behind
by
not
having
bought Northern Pacific
However, the actions of this group
I,., 3'/a
37
$2.00
TXL in those pioneer days.
have
been
But Canadian Pacific-./ v ;/%
24
1.25
determined, in turn,
be not discouraged. Just because Texas Pacific Land
lVa
95^
1.70
by business conditions which in¬

argument favoring

weeks

Co., N. Y. City

money market*
Treasury's changed interest rate policy.
debt management policy can restore initiative of

effects

are

talk

you

that's not what I wanted to stress.
You see NP, together with a sub¬

sidiary,

turn: to

Trust.

whale

in Canadian oil,
oil reserves now es¬

and

real es.ate at
(TXL sells around 95).

railroad, and you're quite
right. It's a pretty good one, too
—earned $7.87 on 2,480,000 shares
of common in 1950. Pays a $2 div¬
idend, a 5.30% yield on current
share price of 37. You could make
a

Three

& Trust

New York banker reviews recent transition in

Fascinating

an acre

praise the 1,843,000 acres owned sides land.
in fee by
Texas Pacific Land
It's an interesting idea, buying

profit possibilities.
one

$70

fields, which
impressive hunks

Northern Pacific.
as

fee, and mineral

other

own

The first

you

the

Vice-President, Central Hanover Bank

of West Texas

estate.

1,406,000 shares
paid $1.70 in 1950

acres

Money Market

By CRAIG S. BARTLETT*

the

1 Vs

Thursday, May 24, 1951

And Bank Portfolios

cer¬

22,000

Just
:
so
you
can
see
where
you've been in the past few min¬
13,400,000
shares
listed (paid $1.25 Canadian funds utes, we have raced over the map
of North America from Texas to
last" year)
permitting 7/& of an
acts of the above land to go with Alberta, from Louisiana to Ore¬
each share. Earnings of CP esti¬ gon, and suggested to you how
mated at $4 a share for 1951 and you could become a part owner
of land (or mineral rights to land)
5% yield at 25 give you some
a
fantas ic y" 27.000,000
solace for, waiting for these "wide totaling
acres—nearly 15 times the State
open spaces" to get profitable.

sketching today doesn't
lawyer and the only clos¬
ings oi interest to you wi»l be the
"closing" prices eac i day on the
Stock
Exchange.
For
you
see
we're going to back into our real

dictable

futuie of
and this

name

There

the side

the

oilbearing, common
get a mightly lift.

chase we're

then

proven

timated

title seal ch, lawyers apd clos¬
ings. Well, the real 'estate pur¬

successful

lubricated,

of land

big

wi h

need

out

to over
11,000,000
other
(over 7 million of which
lie in Alberta). Of course, in the
past three years Alberta has been

to be sure, but
have such details

you

this

be the

turns

acres

explosions.
\ axes

trust

retired

a hacienda,
size and pur¬
chase price of your share hold¬ the states of California, Arizona,
New Mexico and Oregon.
Here's
ings. With NP at a new high rea case where ranching has slowly
cen ly, perhaps you don't want to
given
place
to
reach for it, but you'll probably
oil, dogie to der¬
want
to
put
this earth-bearing ricks. They've just put a ceiling
on beef but there's no ceiling on
equity on your shopping list.
oil. KCL has land with a pasture
Next we move just a little north
as well as ft future!
and gaze dotingly on Mr. Canada
Calgary and Edmonton . Corp.,
—Canadian
Pacific that is.
The
Ltd., owns the mineral rights to
very least description of Ihis en¬
1,142,309 acres of land. No new¬
terprise at all adequate is to call
comer — profitable
drilling has
it an empire.
The largest privatebeen conducted here for years.
ownership railway mileage in the
This property is in famous oil
world, 30-odd ocean steamships,
a
domestic and overseas airline, country and lots of canny Canucks
are partial to ihis prairie petrole¬
plus a majority ownership of Con¬
um venture.
Price range between
solidated
Mining and
Smelting
3lA and ■'■12.% since 1949—on the
Co.. leading the world in quan¬
Curb.
extrac'ion from
a
smiling
tity
Another highly respected pe¬
subsoil of silver, lead, and zinc.
And getting back to real estate, troleum
acreage is found
in
CP
boasts
14
hotels,
1,500,000 Louisiana Land and Exploration

oil starts
the
it's picked

are

much

how

rights

gazed

conveniently, you sometimes
have to wait years before a town
gurgling beneath it,

worth.

build

could

acres

upon

grows

well

land

country

open

field

depending

vast

stretches

will

which

you

field.

dream

can

you

dreams

own

McCoy,

admit

—

state,

land

Dakota

broad

acres

latter

real

plantation

the

planning to buy

a
or

that

are

ranch

got

under

country which could be par', of a
cattle ranch,
a
town, or an oil

TV kid tot¬ oil has recently been sighted in

having
1950.

gives

Giving an outline of the ownership of acreage through the
purchase of land-bearing shares of various companies.
Whether

outstanding

of TXL

Killing in Wall Street and Keep It"

buy

(27J/2% of gross)

tificates,
So each

;.//Author of
"How to Make

The Current

all, this Trust uses its

uepietion funds

NEW YORK 4, N. Y.

Archibald, Manager

PLaza 3-9100

N. Y.
CHICAGO

DETROIT

PITTSBURGH

GENEVA, SWITZERLAND

Madison Ave. a! 54th

St., New York 22

Volume 173

Number 5014

...

The Commercial and Financial Chronicle

Funslon Slated lo Be

/f
Steel

:,v'The,,

President ef NYSE

Trade

Special Committee

Commodity Price Index
Auto

Industry

Price

dent of

Index

Production

steadily increasing

portion

being ear¬

production

few months ago,

controls, CMP

or no

775,000 starts are
par

will

Steel

what

Just

months

above the level in

are

into defense and defense-support con¬

fully

With

known.

DO orders

new

flooding the mills, supply prospects for unrated consumers look

anything but promising. Many rated orders are new and if much
of this tonnage is to be worked into early third quarter, increases
have to be made in set-asides at the expense of civilian goods

'/ v/ill

account, this magazine points out.

v,-.-'

week

record level.

pairs are in the offing, however, foreshadowing some reduction
f operations beginning this month, "Steel" adds.
Steel

product and related prices are firm at levels frozen by

government in January. Some changes, however, are in the
making. Last week several industry product advisory committees
met with the Office of Price Stabilization and discussed proposed

'Xf

Last week's

trouble

Briggs,

its

body

"Ward's Automotive

supplier,

Reports," declared.

Responsible for the week's rise was increased output by Plym¬
outh following the previous week's brief labor disturbance. Both
General Motors and Ford divisions' production remained steady,
with

overtime reported, the agency added.

layoffs

announced

were

Railroad late last week.

The Penn¬
sylvania stated the jobs of 3,500 shop men at Altoona will be aboli ished on Monday of this week. These employes are being released
as part of a cutback in maintenance forces over the entire system.
President, "our production costs would be prohibitive."

Business

makers

of copper,

brass

require only 35% to 40% of available copper production leav¬
ing civilian goods producers with as much as 60% of the copper
and brass products they used in the first half of last year, com¬
pared with the present 70%.
A
rary

flurry of orders for cotton goods

was

regarded

as a

tempo¬

rush by some buyers who wish to stock up goods at distress

current week. Some
woolen mills began quoting prices for future delivery for the first
time since last January. This resulted from the release of the gov¬
ernment's wool price control order. Opening quotations indicated
prices,

was

wool goods

learned

Monday

with

Board

served

for next fall would be priced about $51.50 to $1.60 a yard

faster tempo in industry's part
"The Iron Age," national metal¬
major programs such as tanks and
a

of the defense effort, according to

working

weekly.

Although

planes are still several months from high production, their mate¬
rial needs are being scheduled and produced now.
This is due to
the long lead time required for some parts.
Long lead times partly explain why metal requirements are
expanding so rapidly while actual defense output and subcontract¬
ing are lagging far behind procurement authorizations. Reorgani¬
zation or expansion of defense production facilities and tooling
are

also

important factors contributing to the lead-time gap

tween letting of contracts and

be¬

production.

Authority

now

seems

determined to

speed full operation of the Controlled Materials Plan as soon after
July 1 as possible. July set-asides of programmed steel have been
boosted sharply and manufacturers of non-essential goods have
been warned of deeper cuts to come. Defense Production Adminis¬
tration

has been determining requirements faster

than had been
on

page

Power,"

"Progress

Mr.

remarks

bureaucrats

—

were

performance

the

bewilderment

a -;

This led to

;

businessmen

the

bad situa¬

("Thank heavens for Charlie Wilson; we'd be in worse trouble '
job").
■
Mr. Wilson's blast excoriated with a blanket indictment critics
on the
"yelling"
forgetful of the greater sacrifices being made

economic policies and operations,

selfish

that is

and

In June, 1944, Dr. Funston was
appointed Trinity College Presi¬

soldiers in the mud-holes of Korea.
"If all groups are yelling, it must mean that they are all
being hit, and this is as it should be," happily and cavalierly

dent when

says

X-'-

,y'\y

then

was

years

old, but was granted a leave of ab¬
for the duration of the

sence

commissioned

was

;

Funston

director

our

Mr.

Good¬

Hartford Steam Boiler
Inspection
and
Insurance
Co.,
Aetna Insurance Co., Hartford Na¬
Bank

and

Co. and

General

Trust

Co., Con¬

Life

Insurance

Owens-Corning Fiberglas

Corp.

Nevertheless, this columnist audaciously ventures to offer a *
"yell," with confidence that he is by no means unique in being
devoid of self-interest or partisanship (and also, then, part of the
"democratic process").
.

agree

heartily that

that will ward

off

engaged in the muql of
stake abroad is all the

Co. Inc. and
18
offered

Stuart

May

$3,900 000-Illinois Central series
GG 3% equipment trust certifi¬
cates m at u r i n g semi-annually
Nov.

1951

to May

1966, in¬

prices" to yield from
2.20% to 3.05%, according to ma¬

clusive,

turity. Offering of the certificates,
which

issued under the Phila¬

are

Commerce

The

secured

are

> :

Wilson's Vital Omissions

box cars estimated to
$5,202,500.
Other members of the offering

:;t

curtailment of government spending, left unmentioned by the Defense chief, is important to the future of our ;
democratic institutions, as well as directly relevant to the success
of Mr. Wilson's own mobilization program.
For Inflation (now
Economy and

being largely fought with lip-service by the Administration)

re¬

sults in manifold dollar increases in all the equipment our rearma¬

As reported by Mr. Eric Johnston in

officials have to buy.

ment

another

rising

connection,

costs

armament

used

all of

last

My resentment over Washington's continu¬
ing defense-time extravagance, her sprawling bureaucracy, the
unwillingness at least to lop off the recent year's increases in the
non-military budget, assuredly does not spring from any interest,;
year's tax increases.

in the

The desire to see theseht

matter from a political standpoint.

things corrected, to levy taxation nonpolitically, to promote real
savings by the people, arises from a burning, and self-disinterested,desire to win whatever wars we are called on to fight—both at

But

not

Hindrances

Direct

1,000 steel
cost

group are

Korea. But just because so much is at
Reason for our effort on the home

home and abroad.

Commission.

certificates

this

effectively carried out.
Mr.

Halsey,

personal sacrifice is not too great

any

all-out world conflagration, ruinous to

country under any military outcome; and that any annoyances ";
here are less than those being made daily by our brave soldiers

front to be

Halsey, Stuart Group
Offers Equip. Tr. Glfs.

Productive

the

s*:

Effort

corporation and do not pay an excess profits

at this

alarmed

A. G. Becker & Co. Inc.;
(Inc.);

tax...

device by constant practical evidences
Continued on page 19
~

The Illinois Co.; Otis & Co.

Wm.

Pollock

Co.;,and Mc-

Master Hutchinson &

Co.

(Special to The Financial Chronicle)

CHICAGO, 111.—Philip S. Adams
has become

with

associated

many

Bond

years

was

AWAY!

FIRE

Adams Wit!: Central Rep.

Cen¬

with the Tax

you'd like to know what wc think
stocks, just ask.

of these stocks as a group
Plus individual

write-ups

Equitable Assur. Co. of N.Y.
Boston Insurance Co. (Mass.) ; »■/

Globe & Rutgers

Fire Insurance Co.

Amer.

Co. (N.Y.)

Maryland Casualty Co. (Md.)
Merchants & Manufacturers Ins. Co.
New York Fire Insurance Co.
U. S. Fidelity & Guaranty Co. (Md.)

Westchester Fire Insurance

Don't Be Confused
Plus

by the Market's Action

GRAPHIC STOCKS

1001

CHARTS

chow monthly highs, lows — earnings
—dividends — capitalizations—volume

virtually

every

active

reports in

Aetna Insurance Co.

preparation

Co. (N. Y.)
.

Great American Insurance Co.

(Conn.)

American Insurance Co.

of Fire Insurance

report that covers our opinion

We've got a brand new

Glen Falls Insurance

Company.

(N.Y.)

Home Insurance Co. (N. Y.)

(Newark)

Phoenix Insurance Co. (Hartford)

There's

charge

call our nearest

above, of course.
write—

for the

office,

Simply

Trading Department

stock listed

N.Y.Stock and Curb Exchanges cov¬

ering nearly

12 years to May 1, 1951.

Single Copy (Spiral Bound)

Yearly (6 Revised Books)

,.$10.00

Merrill Lynch, Pierce,

$50.00
70

F. W. STEPHENS
HA 2-4848

;

An Editorial Yell

rich & Co.,

tional

Mr. Wilson, along with the explanation (expounded too by
Keyserling) that confusion is a necessary accompaniment of

democracy.

Navy, in

which he served until 1946.
Dr.

Lieu¬

tenant Commander in the

war.

•

ground that they are merely engaging in pressure-group

where he
special assistant to the

15 William St.; N. Y. 5 ■ •

Continued

ema¬

•

topic

professed

Defense

utter

of Washington's present

Production

War

chairman.

The National Production

leave of ab¬

was

the

time,

Republic Company, 209 South
La Salle Street, members of the
Midwest
Stock
Exchange.
For

Operations Scheduled to Taper Off This Week

This week all signs point to

the

Washington,
a

the

cross-section of

addressed, and their reduction to making the best of
tion

sence

arguments

planner-in-industrialist's-clothing.

May

with anyone else in the

this

tral

Wilfred

the

above the fall of 1950.

Steel

until

Much

the

delivered
occupied

ington

Radiator

Products, Inc., where he remained

however, he

only
with

Wilson's force¬
to a great de- ;<•
gree
with
shielding
the
present
Washington scene from criticism. The thesis
of this defense coincided surprisingly with the
current emanations from the veteran Wash¬
fully

Sanitary Corp.
In 1940, he become director of
purchases for Sylvania Electric

delphia Plan, is being made sub¬

industry

Toward

then entered

American

ject to approval of the Interstate

metalworking

may

Harvard

and

the

July shipment 75% of their average monthly production in the
first quarter of 1951. This authority indicated that defense needs

the

base alloy products were informed by the National Produc¬
tion Authority that they must earmark as defense-rated orders for

In
copper

Under

and Standard

associates

Ford Motor Co. and
Ford said it would fur¬
lough 10,000 workers within the next 60 days because of govern¬
ment restrictions on key materials. Otherwise, said Henry Ford II,
Extensive

Pennsylvania

the

1944.

Waldorf's Grand Ballroom.

the

son

assistant to the treas¬

necticut

improvement in the automotive industry was ac¬

complished despite the absence of production Monday by Hudson
and several interruptions in Packard operations resulting from
labor

He worked

School

not

association

of mind of the attending

frame

May 24

General Foods Corp., B. F.

the

policies.'

business

Wil¬

nating from all ideological shades of Washing¬
ton
officialdom, but also by the evidenced

Trinity College

studied

Administration.

For the third succes¬
output held close to 2,078,000 tons. Major facility re¬

Steelmaking continues at
sive

then

aroused

was

leader's

guilt-disclaiming

prevalent

Charles

Conference Board

(published on page 7 of
vitally important implica-,

concern

industrial

this

will

Oct. 12, 1910, the

through

Graduate

carried

Our

chief

Industrial

"high brass" from the business world gathered

way

and

tonnage will be available for unrated needs must
supporting requirements in

ahead

name

of the Exchange on

country banker.

his

remain unanswered until defense and
the

tions.

Dr. Funston was born in Water¬

suming channels beginning July. Mill set-asides for rated tonnage
and directives may exceed 50% of total output that month.
Setasides for plates, tubes and alloy steels are likely to run still
higher. Increased needs for new steel and aluminum producing
facilities, along with heavier demands on direct defense account,
are expected to force a still further boost in mill set-aside tonnages
for August, this trade paper notes.

„

"Chronicle")

approval.

urer

pour

the

Dr.

National

City last Thursday evening

Keith

loo, Iowa,

good prewar year.

decided

York

Funston, 40-yearPresident of Trinity College,

for

below the 1950 record, that performance is on

with 1946 and 1947 construction and 10%

1941,

have

New

mobilization

Defense

be presented to the Board of Gov¬

CMP—producers of strictly

"Steel," the weekly magazine of metalworking. If they're right,
civilian metal product output will have to be substantial because
about 4.5 tons of iron and steel go into each new house. Although

occasion

this issue of

old

civilian metalworking products are going to do surprisingly well
in 1951. At least they will if homebuilders have anything to do
with it.
They think they'll build 775,000 houses in 1951, says

The

con¬

President of the New York Stock

Hartford, Conn., and his

in evidence than a

Yelling at the Government

the

officially

son's address before the

George

they did not seriously hamper operations.

or no

announced

not

firmed) that the Special Commit¬
tee
appointed to select a new

ernors

Controls

been

but

Exchange

slight increase and continued to reflect a perceptibly higher level
than prevailed one year ago. Total production as in recent weeks
was
about 10% short of the record peak reached during World
were more

has

press,

Although material shortages

By A. WILFRED MAY

Trinity College, Hartford,

succeed Emil Schram.

marked for defense needs, total industrial output last week showed

War II.

Presi¬

names

Business Failures

J
With

Observations...

Carloadings
Retail

Food

and

Production

Electric Output

State of Trade

(2145)

PINE STREET, NEW

Fenner & Beanb
YORK 5, N. Y.

Offices in 97 Cities

(2146)

The Commercial and Financial Chronicle

ward

The Schuman Plan—Its Hopes,
Risks and Danger

ism

need

economically
United Europe.
an

The Schuman Plan, as you know,
pursues
both
political and eco¬

nomic

It is

purposes.

boldest

attempts

German

one

toward

Whether

rochement

fol¬
ne¬

from

reading

terial

ma¬

became

available

the Plan, it is
that one can¬
not pass

ment

Philip Cortney

judg¬

the

<jconomic aspects of the Plan with¬

giving due consideration to its
political purposes; neither can one
its

political

the

by it, and where it

;lead, I wish to state at the
they

may

outset

that

should

Schuman

Plan,

'•purpose today is to bring to your
.attention both its favorable and
.unfavorable aspects and some real
•potential dangers.

Keep in mind

|that many German industrialists
fand German labor unions, together
,with the Socialist-Democrat party

It is not

the

beginning

Political

and

of events

the Schuman Plan will
way or another discarded.
Reynaud in the
on
the Schuman

foundation

stone

federation

eventual

Europe,

economic

political.
How will the Plan further this
objective?

Besides the French statesmen have
repeatedly emphasized since the

inception of the Plan, that France
and Germany must be at the core
of European
unity, and Mr. Schu¬
man, when he first made the offer,
mentioned the prospect of German

the

My great fear is that the politi¬
purposes of the Plan might
be
compromised
and
defeated
by its economic objectives, or that
cal

the

functional

politically

approach

and

the

Germans is

the main

cause

be¬

necessary,
of

causes

Franco-

German

hostility are political and
psychological and not economic.
(2) The Schuman Plan aims at

creating

economically
econ¬

step backward from the stand¬

point
run.

economic

freedom

and

internationalism in the long
Hazlitt
Plan

considers

the

Schu¬

major step in the

Holders of

anti-planning

ning system. In point of fact, this
is the
.

why economic liberalism is the right economic system
reason

on¬

the

attainment

economic

the highest

liberal

school,

efficient allocation of .resources,
but national cartels interwoven or
vr>t

into

private

international

cartel.

tories, to the effect that the securities in
nationals

occupied terri¬
question are not the

residents

France.

Conse¬

quently, the French Government has instructed the
undersigned
to make payment of bonds and coupons in dollars

Paying Agent
and after

May 25, 1951, without such formalities except as
regards securities already identified by the French Government
property.

►

J. P. MORGAN

•

...

CO. Ineorpoi-ated,

Paying Agent

City, May 24, 1951.

(3)

The Plan will put the coal
steel pool under the super¬

and

Before

I analyze the economic
political means to attain the

and

ends of the Schuman Plan, I wish
to

emphasize the following points:

The

Schuman

will

entail

implies

Plan

raises hopes,
sacrifices, and it

some

considerable

risks.

said before, the realization of the

bors.

the

Schuman

Plan

will

independent

High

suprana¬

"To
allow this to happen
(namely, to maintain the coal sell¬
ing agency) would be to make

ture of relations among the coun¬
tries of Europe. Nationalism, po¬

ing
in

seen

industry giv¬
to

access

time to

course

raw

con¬

ficient."
The

Germans

that

prove

should

heavy

centered

industry
Germany.

French.

Under heavy pressure from the
Americans, the Germans have ac¬

cepted to
coal

decartelize

their

steel-

industry

so that the German
steelworks will control only about

18%

the

dissolve
agency

German

the

coal, and to

central

within two

coal

selling

In this

years.

respect it should be kept in mind
that one of the central ideas of
the Plan

increase

lowering

and

To this effect it

costs.

sary

foster competition,

obtain

and

neces¬

was

the existing

break down

concentrations,

and

vertical,

into

units which will have to

hori¬

smaller
compete

the market for the business and

triotism,

sacrifice

the

free market will

the

arguing that

Events may prove this to be true,
but the risk is mainly
for the

Schuman Plan
will open a breach in national
sovereignty, in the name of which

words,

are

the operation of

cartels

goodwill of the

consumers.

Unfortunately the German em¬
innumerable
crimes have been ployers and labor unions are op¬
committed in the past. It will at-" posed to the Schuman Plan and
tempt to create a Eurooean pa¬ maintain that a heavy economic
or more

probably

nationalism.

pean

The

Euro¬

members

of the supranational

authority will
delegates of their individ¬
ual nations, but will represent the

not be

interests of Europe as a whole.
There is one legend which must

examined,

because

only

partially true. It is contended that
the

rivalry between French
heavy industry was

and

German

re¬

sponsible for the political conflict
between France and
Germany. As
far

simply
steel

steel

concerned this is
not true; the international

cartel

the Nazis
In

the

functioned

came

even

after

to power.

matter of

materials,

raw

order

and

regarding the Saar is simply

matter of coal. The Germans had

requested from them
a French-German

get

rapprochement

The labor unions

convinced

are

that

the

German

cartels and the central coal agency
made it possible for Germany to
extract coal from

thereby

and

high-cost mines

the Ger¬

for

secure

high level of employment.
The Ruhr represents, in the eyes
mans

of the average German,

tainhead

the foun-

strength.
Therefore, nationalistic prejudices
being what they are, the Germans
Germany's

readily

are

those

who
Plan

man

the

zontal

many

colleagues,
single market

materials and allowing production

litical and economic, was
dividing

Germans.

remains

purpose

his

free

everyone

Europe; the supranational author¬
ity will strive to unite them. In

Germans, and particularly by the
It

main

and

for European heavy

productivity

other

the

which is to create

particularly coal, the legend
partially true. For instance, the
dispute between France and Ger¬

Monnet

authority represents
fundamental change in the na¬

the spirit in which it
is approached by both French and

depend

As the London "Economist'*

puts it:

pranational

hopes which animated the archi¬
tects

tional in character and
independ¬
ent of any government.
This su¬

Plan Involves Sacrifices and Risks

inclined

believe

that

assert

will

Schu¬

the

weaken

Ger¬

industry and will reduce the
opportunities for employment in
Germany.

man

afraid

the

that

want to eat the cake

Germans

and have it

too.

mutual confidence which is indis¬

from

pensable

Germans depend less on French
supplies of iron-ore for the manu¬

They are too easily inclined
forget that the Schuman Plan
the cessation of
all discriminations against which
they were complaining, like, e.g.,

facturing

the

the Plan will create the

if1 the

French-German

rapprochement is to remain

thing else than
thinking. Only
whether

the

hope

mans

out

not

wisniul

will

lead

this

wish

respect

that

cizing" economic problems
flicts

make

economic

the

point

The

one.

But

what I wish to stress par¬
is that while the Plan

ticularly
entails

the

some

material sacrifices on

part of Germans

term

nature if the

all the risks
Fr^nrh

for

are

rpocnpo

short-

Plan succeeds,
the side of the

"rMch I shall

endeavor to make clear.

their

steel,

than

Luxembourg depend
supply of German coke.

In times of normal economic

was

only in times

boom, like presently, that the
were keeping for them¬

Germans

selves

the

greatest part of their
production. It will, however, con¬
tinue to remain true that in times
of

boom,

French

the

and

interests

German

the

steelworks

will be in conflict and competition
for the available coal. The devel¬

opment

France,

and

industrial

activity in
especially any in¬
crease
in
steel
production, will
depend on the possibility of France

secure

fact,
the

one

German coal. In point

of the main purposes of

Schuman

Plan

make

possible for the French to

will make possible

secure

limitation

steel,

production

Above
be

the Ruhr Authority, prohi¬

bition of certain industries.

ac¬

tivity the French had no difficulty
in buying in Germany all the coke
of

may

cupidity and
stupidity of the people being what
they are, this danger is a very
real

the

and

or con¬

interests,

solution

Plan.

France

they wanted.

the

difficulty in securing iron-ore
France.
Unfortunately the

"politi¬

of such prob¬
difficult and may even
compromise the political purposes

lems

Eu¬

French, Ger¬

Italians.

any¬

time will tell

Plan

and

ropeans

above-mentioned United States dollar and French
franc issues
for payment in dollars in New York to
present evidence, hitherto
since 1945 required by French law because of
the circumstances
arising out of the war and enemy looting in the

high

degree of competition and the most

European nations to think

payable in the United States

the

keep in mind that the alternative
to the Schuman Plan is not

whether

signed Paying Agent that it no longer considers it
necessary to
require bondholders presenting unpaid bonds or coupons of the

New York

that

assert

It is also

of coal.

single, wide market for centrated in those enterprises
steel, serving the needs which proved themselves most ef¬

Authority, which will be

namely, cupidity and
Philosophcally I would

industry. The German
are
controlling 56% of

production and prices in the ma¬
jor industries of Germany's neigh¬

Mr.

tal

toward

Plan because in their opinion it is
a

discrimina¬

necessary

nonsense

in African develop¬
psychologic treatment

This

vision

reasons,

steel

and

the production

participation

you can
boil them down to two fundamen¬

critics of the Schuman Plan must

The Government of the French
Republic has advised the under¬

enemy

the

cally United Europe, it deserves
wholehearted support.

our

Railway Company Dollar and Franc Bonds

for

economic system requires less col¬
lective intelligence than a plan¬

Schuman

and

property

the

war

stupidity.

apparently

Government of the French Republic Dollar Bonds

issued and

standards of living.
But even if I share the misgiv¬
ings toward the Schuman Plan of

free competitive

without

cartelized organization of the coal
steelworks

ment.

may constitute the foundation
stone of a
politically and economi¬

man

and

to dissolve the central
selling agency, which can by
(1) The Plan treats the Ger¬
its decisions practically dictate the
mans as equals with
the French.

Plan.

The

war.

history

you

eco¬

omists, like for instance Henry
Hazlitt, have come out against the

by Mr. Cortney before the
Policy Association, New York

Notice

But

the

supplies in

market

coal

same

Germany and France, and that it

real

as enemy

rather

Schuman

for nations dedicated to the pres¬
ervation of human freedom and

economic

Foreign
City, May 17, 1951.

reservations

United Europe. Some liberal

"The

*An address

the

clusion that because of the possi¬
bility that the Plan may bring
about a rapprochement between

and

Treaty, which the Germans

French

ex¬

chain

Paul

even

political goals. This
danger is inherent in the gradual

(question of whether they are right
^or wrong. It is a fact which we
•simply cannot ignore, keeping in
mind what happened to the Ver¬

Diktat."

one

ex¬

the State
Department, like myself and be¬
fore myself, has reached the con¬

ance

being

from

Mr.

Department

beginning

objectives of the Plan
might be frustrated in the pursu¬

called

proach)

one

economic

ifeel and assert that the economic
interests of Germany are
►sacrificed in this Plan.

State

the

aspects

Plan.

While

I have reached

the

from

nomic

may be,

our best guides.

conclusion

sailles

causes

after much thinking and consider¬

able soul-searching
the

either

of the Plan

slogans, however well-meanand enthusiastic

suppbrt

intelligence,
start

is the avoidance of

pressed

hopes raised
Plan, the risks

Schuman

| are hot

limited and

I may be mistaken but .it seems to
me that the political
implications

have

To understand the
entailed

speech he delivered
that the Schuman

that

will

experts

purposes

without keeping in mind economic
realities.

"the

they knew

are more important at
this stage than the economic ones.
As far as I know the economic

out

consider

coal

begin¬

gotiations and
whatever

the

ant

les¬

lowing the

for

coal and
deplore
Plan
democracy, because unpleas¬ speech
of 150 million
people, and will
which he delivered before the Eu¬
realities, political, psychologi¬
naturally increase and tighten
ropean
Council in Strasbourg,cal or material, will
always come
Germany's economic ties to the
said: "Let us not be planners or
to
the
fore, sometimes at the
west. If the Schuman Plan starts
wrong moment when much dam¬ anti-planners. Let us just be in¬ a chain of
events that will lead
telligent." Alas, it is easy for ah to
age has already been done.
a real European
union, then, if
intelligent man like Mr. Paul Rey¬
we
rid the economy of bureau¬
Important Political Implications
naud to admonish us to be intelli¬
cratism and controlism, production
While I have reached the con¬ gent. If it were easy for nations
and productivity will
increase, the
to behave collectively in an intel¬
clusion that we should
support
costs will decrease and the stand¬
the Schuman Plan, I have serious ligent manner we would probably
ard of living of the
people will
misgivings and reservations on not n e e d a Schuman- Plan to rise, which is one of the
purposes
many of its economic provisions. achieve its main purpose, which of the
in

Eu¬

one

European union, both economic
and political
(by what we have
come
to call the functional ap¬

truth

mentioned

and

by the French and

that will lead eventually to a real

they

they would not
the agreement; this is a

from

Strasbourg

Plan

getting

agreement

will

tensive plan. Much as I admire Mr.

which

drawn

Ung

support

rope. If I have

that

Plan

the spirit in which it

Plan is both

method

integration

asserted

toward

Western

son

succeed

Schuman

is approached

believe

whole

the Germans, and particularly by
the Germans.
Mr. Paul Reynaud

economic

and

the

judgment,

tempted to tell the people half

the

will not bring the results which
we
all hope for depends, in my

politically

the truth for fear that if

rap-

justified,

being rampant, when

kind

some
are

the

Reynaud's

governments

the

and

nationalism

French-

opinion is based on
disregard of many psychological
and political facts and problems.

of Western

stresses

apprehensions
are

afraid that his

to pool industrial re¬
Europe, Mr. Cortney expresses misgivings
and reservations on many of its economic
provisions. Fears
political purposes of Plan may be defeated or compromised by
its economic objectives, and holds Plan entails material sacri¬
fices on part of Germans and risks on
part of French. Holds
only alternative to Plan is renewal of international cartels,

and

(
ning, the Schuman Plan aims to tion in price..
This : explains why it was of
bring an end to the age-long hos¬
tility between the French and the crucial importance to break down
Germans, and to put the first the closely interlocked and highly

Though supporting the Schuman Plan

Political Objectives—Means
As

statism.

Thursday, May 24. 1951

his

economist

President, Coty, Inc., New York City

sources

international bu¬

international

and

While

By PHILIP CORTNEY*

march

reaucratism, international control-

all

the

should

Germans

constantly reminded of the

po¬

litical purposes of the Plan, which

is to draw France and Germany
together by bonds of self-interest
into the nucleus of

new

tion for the defense and
of

Europe.

associa¬

prosperity

The United States has

made it clear to the Germans that

acceptance

rejection

inter¬

national control of heavy industry
will be treated as evidence of their

reliability
Europe.
I

think

equal

partners

*
that

the

did what it should

United

States

have done.

nonetheless true that those op¬
posed to the Plan are propagan¬

dizing that the German signature
Continued

page

yolume 173

Number 5014

(2147)

The Commercial and Financial Chronicle

instances

Progress Toward Defense Power
Director, Office of Defense Mobilization

of Defense orders and production, Mobil¬

on course

ization Chief asserts

we are

Predicts by end of this

winning the "battle for production/'

will be ready to meet any limthreat, and by 1953 demands of all-out global war. Reply-

ited

ing to complainants
tne>

grievances

materials/ and

for. nickel

aiways

bric

emphasize that defense
mobilization is operating under a
basic plan.
It is our task to pro¬
vide

the

process.

military equipment and
supplies

for

By the end
expect that orders

will be translated into

being given almost weekly
productive

forces

as our

month.

.many
different
kinds
for
our
country business scarce metals and other materials.
being attuned to As you recall, numerous ideas
the plans for defense mobilization. were developed in World War II
New plants are going up and old to save materials needed for arma¬
ones
are
These ideas are being re¬
being converted.
Our ment.
capacity for the -production of examined, and many new ones

armed

ices

serv¬

the

United
and in

States

Europe;

the

'or

All

such

grow¬

basic

ing force of

aluminum

other

creased.

free

the

over

and industry are

metals
is

Most

and

steel

being

greatly

in¬

this

activity is
by private" in¬

have been devised/ :r/;'
t,

-1

;

/-•

Simplification,

present mobilization effort.
Needless to say, the govern¬
ment is cooperating enthusiasti¬

make

feel

valuable

it will

sure

contribution

and will relieve.

needed

do."so,
billion
three

full-scale

year and to do the

job in

plan

least

this

possible

with

dislocation

economy; in fact,
of the three-year

economy

Korean

levels.

plan to operate

economy and
side by side.
backs and
the

and

our

from

near

other

pre-

words,

mobilization

civilian

economy

There will

cut¬

shortages, of course, in

production

civilian

(1)

■i

The

the

this

reason

that

reason

absorb

large

defense

done—

economy

can

expenditure for

without

civilian

upon

can

our

effect

severe

production—is that

our

economy is an expanding one.
We are now

spending for de¬

fense at the rate of about
the

gross

national

10%

product,

against 45% at the peak of World
War II; this will rise to about 15%
at

the end of

the

not

1951; at the height
it

program

exceed

20%

will

probably

the gross na¬

national

product

billion

year.

1950,

gross

our

nearly $300

was

By the end of 1953,
gross national product should

our

amount

supplied

nearly

year at present

$350

billion

price levels.

and for armor

new

paste

type

copper

brazing

saves copper.

* for

in civilian

realization

for

This announcement is neither

civilian

for

goods,

increase

using substitutes;

Consolidated Loan Debentures

Dated May 15, 1951

Due

but their allo¬
be

Public

difficult

increasing demands

crude petroleum

and refinery

Oflering

Rate

Price

100.00%

1969

3V4%

98.32%

1970

3V4

97.91

3.40

3.20

1971

97.84

3.40

3.25

1972

3V4
3%

99.25

3.425

1973

99.23

3.425

1974

99.20

3.425

1975

99.18

3.425

1976

99.16

3.425

1977

33/g

99.14

1978

3%.

99.12

97.92

1960

98.65

3.30

1961

3%
'31/8

98.52

3.30

98.40

3.30

3.35

by one
total of

eight million barrels daily.
planned to increase electric

It is

3.375%

3.00%
3.10

98.46

1962

3.30

97.65

3.35

next three years.

31/s

3.35

power

1966

31/4

98.83

3.35

1979

33/g

99.10

1967

31/4

98.46

3.375

1980

99.08

1968

31/4

98.39

3.375

1981

33/g

99.06

tion in the last half of the century

^We need more
generation to carry out our
programs
for atomic energy,
aluminum,
other
light
metals,
alloy steels and so on—to lengthen
men's arms generally in our pro¬
duction plans.
Railway freight
cars are to be produced over the

97.51

even

first

half.

Our

war.

We have
and

entered, I believe,

brilliant

trial

pnase

revolution.

a new

of the indus¬

New

materials,
products, skills, methods and tech¬
niques promise to make produc¬
spectacular than in the
If

war

occurs,

Will be able to convert to peaceful
civilian uses many of the facilities
now being used to build the coun¬
try's might. :
v'/'i'V:"". l:VX

11 That

.do

have

not

basic

our

have made

tell

running start.

Defense

;

Military orders

at the

plan, and I
you that we

rate of

capacity

by some

few

30%

years

power

over

than

double the rate for the years 1946-

being placed
billion a week.

(Plus accrued interest from

tioned

their

need

alloying

metals, and those metals
ical of

are

typ¬

wide range of raw mate¬

rials needed

our

allies

well

these materials

among

all

of the

difficult task,
but it must be worked out on an

$30 billion and, by July 1, 1952,
we will have placed an additional

equitable basis.

lalk

trial

Mr.

Meeting

Conference

Wilson

before

35th

of the National Indus¬
Board, New York City,

May 17, 1951.

3.425
3.425

3.425

delivery)

Copies of the Prospectus are obtainable from only such of the undersigned and other
dealers as may lawfully offer these securities in the respective States.

free nations.

It is

Harriman

Smith, Barney & Co.

in some

Corporation

The First Boston Corporation

Wood, Gundy & Co.
Incorporated

Incorporated

McLeod, Young, Weir,

possible for

The Dominion Securities

A. E. Ames & Co.

Stockpiling — Our present
stockpile resources are valued at
more than
$3 billion.
This has
made it

Ripley & Co.

Incorporated

(4)

Annua!

3.425

(3) Requirements of Other Free
have already men¬

So far, we have obligated close to

May 15, 1951 to date of

3.425
-

Countries—I

by us.
We are trying to work
out plans for distribution of all

are

1963

1949.

Orders

Maturity

99.54

day to

Appro*.
Yield

Price

increased

1958

Public

Oflering

Coupon

1955

1959

y'•/;

1956

pansion in both refining capacity
and well-drilling.
Refinery, ca¬
million barrel^

Rate

98.92

stepping

•

Maturity

are

Maturity

1957

/'.

Appro*.
Yield

Coupon

up; ex¬

products,

May 15, 1955-81, incl.

are

Maturity

—To meet the

securities.

31/s
3l/g

the

page

(PROVINCE OF ONTARIO, CANADA)

continues

offer to buy these

1964

con¬

have arranged
supplies, and

our

solicitation of

1965

Europe',

only by the Prospectus.

the

gross national product soared in
the postwar years, despite the fact
of transition from war to peace.

contributions

expect fair arrangements

Continued

97.80

after

our

are

problem.

for

return for

can

City of Toronto

their defenses.
We
severely the uses of

metals

nor a

Corporation of the

are

building up
have cutback

cation

arma¬

needs of other countries which

sumer

to the defense of Western

act

$20,000,000

itself.
largely dependent upon
foreign sources for these metals;
moreover, we must consider the

these

our tungsten, zinc, cop¬
and wool, lead and bauxite.',

New Issue

industry

the

offer to sell

The offer is made

ment program

per

four

defense-supporting
example, the tool

steels needed
and

only

May 24, 1951.

•

amount of

thrust upon

war were

could

Allr

need.

tin, come- from abroad. In addi¬
tion, we must import a substantial

of
international
1 u nacy..
Some
strange things have issued from
us,

plate; they are also

for

pacity will

Contrary to numerous predic¬
tions, there was no deep recession

If such

the

rubber, manganese, industrial dia¬
monds, chrome, cobalt, nickel and

•

that

materials

nearly all of our uranium, natural

program.

our

(2) Basic Industrial' Expansion
of

end

tne

alloys are needed for jet engines

tional product.

that it

alloying metals, such as tungsten,
manganese,
vanadium,
chrome,
nickel
and
cobalt.
High-grade

purposes,

global scale.

un-

all- •metal from corrosion and abrasion.

Military Production — Our
shortages are in the

added

case

forbid

rubbery material known as
dercoating,
thus protecting

severe

required

in the

will

that

discuss very briefly

goods,
but these will be partly offset by

production, as
steel and aluminum.

their col-

Through

bnies, they have supplies of many

production lines.

aspects of
most

capacity

God

occur—could

our

Let

production

our

increased

been

war—and

should

civil¬

1953,

standby

our

have

at the

end

the

period,

should be able to support
ian

the

out

civilian

$50

some

years.

end

war.

plan to spend

street.

way

•

relationship with West¬
European nations is a twb-

ern

But our

•

France

that end, European defense
production and our defense pro¬
with private industry in duction should be tied more arid,
every phase of the conservation more closely.
I was given some
program.
Recently, a
Science idea of their requirements. They
Advisory Committee, headed by are badly in need of machine
Dr. Oliver E. Buckley, has been
tools.
They are suffering from
set up ,in the Office of Defense various
scarcities which we can

;

that

producing weapons as insur¬
against Soviet aggression.

ance

res e rve

o c

Part

convinced

the technical progress of the de¬
being carried on
Thus, various methods are being
dustry but, where necessary, en¬ used by our manufacturers to fense program.
s to be
I am confident, gentlemen, that
couragement is being given by •conserve aluminum, brass, cad¬
laid :
by; for government loans, loan guarantees mium and copper—in short sup¬ we are winning the battle for
J^er^vUcles; and tax amortization certificates.
ply. ; New alloy steels curtail the production now just as surely as
for the addi¬
By the end of this year, we will use of nickel, chromium, cobalt we won it in the years 1941 to
Charles E. Wilson
tion
of
probe
I am confident that, once
ready to meet- any limited and molybdenum. Silver is being 1945.
v
rV
diction
lines threat; by the end of 1952, we will used in solder to save tin.
Sheet we have built America's might to
beyond those needed for currently have accumulated vast quantities
steel is being saved by the use on the point that is now contem¬
scheduled output, but which would of all that is
needed for war; by automobile underbodies of a thick plated, there will be no war on a

countries;

for

«~

Our Allies'

cally

arid

American, French and Brit¬

ish officials,

standard¬

Eisenhower,

General

other

our

-Mobilization.

Substitution

with

only one of the

conservation pro¬

in^ World War II, and the expe¬ and Britain have a sincere desire
rience gained from these means of to do their
part in raising armies
conservation is being applied in and

getting

arq

Korea; for our
expanding

gram.

our

ization and emergency specifica¬
tions played a very important role

ingenuity and inventiveness

delivery of

varmsned

elements in

demonstrations of Amei>

new

for

Substitution is

;

immensely encouraged by

under way.
Especially am I en¬
end items, including new plant
couraged by the success of our
facilities, at the rate of $4 billion •engineers in finding substitutes of

worth

forces

our

$55 billion in orders.
of this year, we

this, of course,
involves a careful matter

ican
Let

the Kremlin in the last few years,
trust the men who do 4 the

substituted for rubber, silicon iron, but I

tribution.

and

emergency

inescapable in democratic

are

controls and taxes, maintains tnat

over

trivial viewed in military

are

shortcomings

year we

In many instances, felt is being

stockpiling

suspend

in favor of other demands for raw

alloy, varnished : cam¬ plotting in that walled/ fortress
silk, carbon still have some vestiges of sanity.
of judgment.
The Kremlin has some hard
We must, however, steel for phosphor bronze* cast
continue to add to the stockpile iron for aluminum.
Bright zinc thinking to do, not only as to our
and, since the most critical iriate- plating, protected by a clear dip progress in production, but as to
.rials in the stockpile picture are solution, is being used as a sub¬ what is happening closer to home
necessarily those upon which we stitute for chrome plate on hard¬ in Western Europe.
My recent
ware.
are dependent on foreign sources,
Ordinary gravel is doing trip to Europe took only six days;
the problem is bound up with the the work of expensive special nevertheless, I brought back some
whole question of free world dis¬ stone. '
:
;
'• distinct impressions from my talks

By CHARLES E. WILSON*

Reporting

'' ■"

The Commercial and Financial Chronicle

(2148)

this

Security Markets

mote

does occur and
some agreement
does materialize
from the Foreign Ministers' meet¬
ing, it nevertheless is clear that

By JULIAN D. WEISS

President, First Investment Company
Los Angeles, Calif.

J'".-"v"''/."-;

■

dence of
backed

business

does

not

refer

and

must

m e n

and
t

m en

de¬

of course,

from

though

factors,

might

the

relation

tories

and

all

interest

investors

and businessmen with regard to
problems of basic business policy;
with
reference
to
policies
ap¬
plicable
to
the
important
and

growing fields of pensions and
profit - sharing trusts; and with
respect

their

investment

own

problems..

In mid-February, in the face of

pessimism

stock

stated:

relative

market,

"The

the

writer

international

tense

problems continue to be the pri¬
mary factor affecting the economy
and

the

market.

situation is

be with

serious

for

think

Any

made

are

prove to

time and is

problem.

near

efforts

peace

1951

the

that will

one

some

unlikely to be solved in the
future.

A
it

peace

will

are

that

unlikely to

real solution to the

Business

doubt,

some

should

levels.

con¬

While

stock market itself is

levels, .it

over-priced
our

not

relation

appear

other

While

economy.

intermediate

the

historic

does

"shake-out"

re¬

action could occur at
any time, we
do not believe any reaction would
lead to a bear market.
We think

the market will

fluctuate

and

that

ingly
will
of

probably continue

around

will

recent

become

levels

increas¬

investment market.

continue
stocks'

market,'

have

rather

and

'market

than

'stock

selectivity

should

continue to be emphasized."
It is interesting to note that in
the few months that have
elapsed,

the

face

bearish

sentiment

the part of the public and the
investment fraternity alike,
the
on

Dow-Jones

Industrial

almost

are

February

near

Feb.

The

Industrial

14,

1951,

withstand

that

over

the market is
in

the

likely to

trading range; and

How¬

such development would

important step-up in

ernment
purposes

gov¬

expenditures for defense
will
make
itself
felt

beginning

sometime

during

the

fourth quarter of this year.
It is
important to note that according
to

responsible

many

in¬

sources,

cluding Secretary of Defense
Marshall, government orders are
being

placed

rate

$4-$5

month.
However, on
hand, the actual level
of expenditures is
only in the
neighborhood of $1 billion per
per

other

month.
our

Thus, the real impact

economy is not yet

any

being felt

major degree.

Business

riod and in

transition

pe¬

there have

some cases

been

present

period warrants

cautious

attitude

part of investors.
same

factors

the

This is because
that

were

re¬

sponsible for the March shake-out
still operative,

although prob¬

ably in lesser degree because of
increasing

should be at the rate of at least $2
billion per month, which repre¬

implications

the

therein.

pos¬

However,

pointed

stocks.

out below,
(relationship

continue

that

government

inflationary
credit

(at

least

policies

although

real

rialize,
that

substantial increase.

business

the

It is

setback

that

authorities

kept in mind

high

very

taxes—a level which
maximum

still

level

likely

ing

next year.
This means,
course,
the pre-tax earnings
calculations

partment.

Actually,

of pre-tax

earnings than

higher leyel

the

was

last year is postulated and
thus, even after taxes, corporate
earnings are likely to be off only
moderately

likelihood

moderate

decline

dividend

payments

tinue to

reflects

the

supported.

dividends

has been

payment
as

the
was

high

recent

years

period
dividend

around

74%

and

83%

1938.

postwar periods has been
follows: 1945, 63%; 194-3, 55%;

1947, 49%; 1948, 50%; 1949, 54%;
1950, 53%.
On

the

credit

front,

and with
its rele¬

to end in

real

letdown in business other than the

now

possibility of

moderate

decline

for

the

above mentioned.

Unfortunately,

there

short-

truce."

real

while

over

de¬

might

lower level of business
mean a

increase
of

and

long pull
mean

activity, it

lesser degree of

also

confidence

greater

the

sur¬

vival
of
our
type
of economy
which, in turn, would mean higher
capitalization ratios in relation to

earnings.
It
the

has

been

quite obvious

representatives
powers

agree

have
an

the

been

agenda

that
four

unable

for

the

meeting of the Foreign Ministers

the

fact

tions

show

billion
estimated

$2.7

originally

peace

the

expected

about

about $3 billion.

little

June, the government is

velopment actually would be bull¬
ish in character

emphasis

reasons

parison

that

between

a
surplus
against an

deficit

This factor, plus

current

the 30

industrial

listed

stocks used in the National
as

Quotation Bureau Averages, both
yield and market performance over an 11-year period—

National Quotation Bureau,

4, New York.

Inc., 46 Front Street, New York

Aerovox

Corp.—Analysis—Raymond

Co.,

State Street,

148

Boston 9, Massachusetts.
Anaconda Copper Mining Co.—Survey—Peter P. McDermott
;

&
Co., 44 Wall Street, New York 5, N. Y.
Also available are
data on Gardner Denver Company,
Halliburton Oil Well
Cementing Co., Continental Foundry & Machine Co. and

Dana

Corporation.

Bell Co.—Memorandum—Cruttenden &

Co., 209 South La Salle

Street, Chicago 4, 111.
Mills,

Botany

Inc.—Analysis—H. M. Byllesby and Company,
Chestnut Street, Philadelphia 2, Pa. Also avail¬
analysis of Pittsburgh Railways Co.

1500
an

Calumet and Ilecla Consolidated

Copper Company—Circular—

Saxton

& Co., Inc., 70

available is

tax

Pine Street, New York 5, N. Y.

memorandum

card

Dobeckmun

Company—Analysis—Walston, Hoffman & Good¬

collec¬

win, 35 Wall Street, New York 5, N. Y.
Drewrys Limited U. S. A. Inc.—Bulletin—Gartley & Associates,
68

William

bulletin

Co., 33 Lewis Street, Hartford, Conn.

Robert Gair Company,

39 South La Salle

International
111
on

Inc.—Bulletin—Barclay Investment Co.,

officials

are

Hydro-Electric

—

Review

—

Ill

Ira

Haupt

reducing

Bell

Long

Lumber

Broad

Merck

York 5,

Co.

& Power Co.—Analysis—Ira Haupt & Co.,

Corp.—Analysis—Eastman,

Dillon

The
that

third

Also available are analyses of Towmotor Cor¬

poration and Warner & Swasev Company.

Continued

their

Thermal Research
&

cautionary factor is

prevailing

sentiment

Engineering Corp.
Memo

defi¬

nitely is bearish, and the technical

nervousness.

admittedly utilize

this

fact.

basic

Experience

usually shows that wheri sentiment
is bearish, the market is not an

Continued

Request
■

■

Since

fundamental approach rather, than
a technical
one, we are inclined to
minimize

Primary Market

action of the market itself shows

evidences

page

Co.,

Inc.—Analysis—Cohu & Co., 1 Wall Street, New

N. Y.

with regard to the extent
imminence
of
another
tax
v

;

Street, New York 5, N. Y.

sights

increase.

Co.,

New York 6, N. Y.

Broadway,

considerably
anticipated, explains
now

Street, Chicago 3, 111.

Broadway, New York 6, N. Y. Also available is a bulletin
Missouri Pacific $5 cumulative preferred "when issued."

Iowa Electric Light

Company—New circular—Eddy Broth¬

Emhart Manufacturing
ers

available is

Street, New York 5, N. Y. Also
Packing Company, Inc.

Tobin

the fact that many Administration

and

Also

Tide Water Power Co.

running

are

higher than

in the

stocks used

Dow-Jones Averages and the 35 over-the-counter industrial

aver¬

particular

Bonds—Saunders, King Limited,
Building, Toronto 1, Canada.

Over-the-Counter Index—Booklet showing an up-to-date com¬

prewar

Canadian Internal Payment

Montreal Trust

Central Illinois Electric & Gas Co.—Card memorandum—G. A.

paid

Street, New York 4, N. Y.

payments.

the

Pa.—First closed

New York.

This

contrast, the percentages
of earnings paid out in dividends
in

Altoona,

Investing in the Canadian Dollar—Discussion of long-term fac¬
tors affecting this currency and the investment possibilities of

able is

City

the

McLaughlin, Reuss & Co.,. 1 Wall Street, New York 5, N. Y.

average

pres¬

considerably below

1935-1939,

•

■

put-and-call
options—Thomas, Haab & Botts, 50 Broadway, New York 4,

Inc.,

earnings

Thus, in the

age.

"Information Please!"—Brochure explaining about

con¬

ability

dividend

percentage

out

earnings,

should

increased

rates' of

The

companies to continue

many

ent

well

Also

North-

•

case

Despite :the

Situations—Brochure—

Co., 120 Broadway, New York 5, N. Y.
reviews of Phillips Petroleum Co. and

Authority

30 Broad

the Treasury De¬

are

mortgage revenue bonds—descriptive circulars—Allen & Co.,

of
important in the

are

Bros.

Housing

obviate the need of deficit financ¬

corporations

every

Street, New York 5, N. Y.

west Airlines.

the

even

not

opinion that there will be

because,

Sutro

available

pur defense activities, plus
various world commitments,

necessitate

William

assumption

government

It must

virtually

Guide to Domestic and Foreign Special

tions looking toward tightening of

our

records for the
lows, earnings,
active stock on the
Stock and Curb Exchanges—single copy $10.00;

York

New

mate¬

will back-pedal as rapidly as pos¬
sible and reverse the recent ac¬
credit.

preparation are
Insurance Co.,
Co. and

Insurance

Home

unnecessary

safe

Co.,

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

other

many

such

—

recognize
is anti-

so
far as
concerned,

are

not

respects

policy

Insurance

capitalizations, volume

so.

important

American

Co.

American

Co.,

tions of 1,001 charts complete with dividend
full year of 1950, showing monthly highs,

stocks) is extremely favorable
equity investment and is likely

Insurance

Aetna

Phoenix Insurance Co.

yields
obtainable
on
prime bonds and yields obtainable
to

Westchester Fire
on

Graphic Stocks—January issue contains large, clear reproduc¬

between

and

Great

fore¬

vancy to the tax situation, it is to
be noticed that in the fiscal
year

term

Co.

reports

Histori¬
in

Pierce,

Stocks—Special report—Merrill Lynch,

land Casualty Co., Merchants and Manufacturers Insurance
Co., New York Fire Insurance Co., U. S. Fidelity & Guaranty

prime

interesting to note that at a recent
meeting of some of the outstand¬
ing economists in the country,
there was a virtually unanimous

major
awareness

decline

the bond-stock ratio

way

activity.
By the fourth
quarter of this year, the actual
expenditures based on deliveries
war

degree
a

bond market.

runner

the

cally, this often has been

was

sents

weakness

corporate

layoffs reflecting this
changeover from peace business

tax

Short-Term Outlook

sible

business.

temporary
character.
There is every basis for believing
that

pro¬

caution.

substantial sell-

the following literature:

Beane, 70 Pine Street, New York 5, N.^ Y.
Also
available are individual reports on American Equitable As¬
surance Co. of New York, Boston Insurance Co., Glen Falls
Insurance Co., Globe & Rutgers Fire Insurance Co., Mary¬

price of government
accompanied by con¬

would also

reasons.

are

temporary period

unfavorable

ever, any

was

that over the long pull higher
prices will be witnessed for many

the

themselves

indicates

term

fairly

find

"armed

fluctuate

The

development could

basis for anticipating a real peace,
as
contrasted
with
a
possible

14.

dence

Without

compared with 256.08 on
The weight of the evi¬

255.10,
May

Averages
the mid-

exactly

levels.

Average

normal

theory that

forced selling on the
some smaller enterprises

may

billion

the

lower.

peace

the

favorable

withhold

induce

who

many

smart

part

psychologically
to feel that

scare

commitments
prices

also

some

at spending), but that it is not pro?
deflation. The outstanding char¬
the wholesaler, by
acteristic of present - day credit
and also "invisible
policy is its flexibility.
Should
at
the
consumer

induce*

Fenner

the

comitant

any

would

Fire Insurance

been accumulated

retailer,

facts

This is because inven¬

have

tinue at high levels with corporate
profits and dividends continuing

high

price

tight cash position and thus enable

prevalent
the

general

level.

probabilities. Such matters should
vital

the

inventories'1

future

levels; by

the
Julian D. Weiss

tion

u a

viewpoint,

al¬
the shorter term it
some
intermediate

over

structure.

present

reasoned
1

conver¬

2V2s of June
into the new

scare"—peace,

pull

mean

weakness

analysis

facts,

offering a

is fundamentally bullish

long

the historical

all

As to the "peace

care¬

study of

and

bond prices to
(higher interest

2%% bonds.

recent action
allowing long-

government

and

situation

the

from

sion of the Treasury
and December, 72/67

decisions
based

term

credit

tighter
"FED"

rates)

Such

should

the

the effects

(2)

seek lower levels

invest-

cisions.

for

send interested parties

purposes.

situation

credit
basis

off

the possibility of a

(1)

resulting
*

make business

"peace scare" and

pre¬

The

vides

bonds,

the

business-

e v a

tures for defense

forecast

that

There has been

"crystal ball" approach.
Rather, it is predicated on the fact

co r

government, • fully
public opinion, will

(3) current low price-earnings ratio; and (4) higher consumer
disposable incomes. Finds growing demand for common stocks.

suppose a

ful

our

will he pleased

It is understood that the firms mentioned

gives concrete evi¬
sincere desire for real

continue to make major expendi¬

long pull they will go higher, for following reasons: (1)
greater business activity; (2) continued depreciation of dollar;

outlook

Recommendations and Literature

Russia

peace,

over

possibility

until

Stock market analyst holds weight of evidence indicates nearterm stock prices are
likely to fluctuate in trading range, but

market

Dealer-Broker Investment

little hope of any tangible results
therefrom.
However, if the re¬

And Business Outlook
_...

entertains

government

our

Thursday, May 24, 1951

is apparent

also

summer.

that

Troster, Singer & Co.
Members:

Security

Dealers Association

Trinity Place, New York 6, N. Y.

Telephone:

2-2400.

Teletype

Private

wires

1-376;

377;

378

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

Louis

page

Number 5014'. v. The Commercial and Financial Chronicle

Volume 173

Where Is All the Steel
By BENNETT S.

Going?

capacity, and

with industrial

activity since Korean outbreak, U. S. Steel executive lays cur¬

the

allocations

of industrial production for June,
1950 stood at 199. (That means

been made

are

too far, it may

25, 1950, transformed the tone and
tempo of American economic life.
The first half

had

1950

'■•km

been

a period
energetic

recovery

from

mild

the

re-

cession
1949. By
year,

mid¬

the pro-

duction

goods
services
reached

and
had
a

new

should
time

need

it—and

the

same

have been

expanding our
output of electrical equipment,
chemical process equipment, ma¬
chine
tools, materials handling
equipment,
television sets and
nylon stockings.
we

Don't

misunderstand

me.

not

debating the
propriety of
these things. I am not arguing the
whys and
wherefores of guns
versus

butter, or of guns and but¬
I am merely saying that this

ter.

is what

have been doing up to

seemingly, this is what

now, and,
we would

like to

in the future.

continue

peacetime

S, Chappie,

high and em¬
ployment was
nearing a record
peak—a

Jr.

convincing demonstration of the
recuperative vitality of a compet¬
itive enterprise economy. This re¬

like the recession preced¬
ing it, also had its counterpart
abroad, particularly in Western

covery,

Europe.
But after the start of

the Korean

Under

circumstances

such

and

July onward, the dominant eco¬
nomic
problem in the
United
States became one of wedging an

military program into
productive
machine already
operating at practically full ca¬
expanded
a

such

desires, it is perhaps
only natural to find industry in
general bursting at the seams in
some spots and lacking nutriment
in others. Indeed, it is a bit of a
surprise to our industrial friends
in other lands to watch us go

produced normally.

themselves

ten

months which have

elapsed since our
complacency
was jolted,
we have found our¬
selves in a position without prec¬
edent.
We
are
fighting battles

but we are not at war.
We
are
engaged in widespread
international trade, but we are not
in Korea,

needs,

changing

of them indeed are
finding it impossible to fit them¬
selves and their enterprises into
the new scheme of things although
this often entails a short period
that very few

maladjustment.
A

the

But so com¬

petent are American industrialists
in the matter of accommodating

pacity.
In

manufacturer,

dress

for ex¬

ample, finds in military uniforms
a new outlet for his energies; an
automotive
parts
manufacturer
takes on a subcontract for tank
parts; a structural fabricator be¬
gins to make Bailey bridges; an
electrical appliance manufacturer

gets a new lease on life making
a
type¬
Like the sword of electronic equipment;
writer
manufacturer plunges into
Damocles, a horrible threat to
the making of component parts
our way of life hangs by a slender
thread over our heads, but we for artillery ammunition; a pressed
insist on business and pleasure metal jobbing shop subcontracts
the making of parts for military
as usual. We realize that the effort
we must make and are making to
planes. The point I would make
prepare ourselves and our allies here is simply that most American
against
aggression
will entail business men are adaptable. If
peace.

many

sacrifices, but we hope that
those sacrifices will not touch our

they find the going is tough for
the time in one direction, they

personal pocketbooks today.

veer

So, with simple faith that some¬

and

off

that

temporarily
is

one

why American industry

problems, we go blithely
forward, hoping that sheer volume
alone may be expected to provide
the solution to all our difficulties.
We are turning out rifles and

ways

cannon

the

and tanks and

ammunition

Army as fast as we are

currently able—and at the same
we have been pouring out

time

huge

quantities

refrigerators

and

stoves and

automobiles
and

kitcjhen

coffee percolators. We

are

building new military planes

and

guided missiles with unflag¬

ging energy—and at the same time
we have been erecting new houses,
new commercial and institutional
buildings and building new arte¬
rial
highways galore.
We are
making strenuous efforts to im¬

address

New York

City, May 17,

by Mr. Chappie "before
Railroad Club, New York

1951.

! V

June

last

your

moment

will
remember that, industrially speak¬
year,

you

was going great
Automotive production was
hitting a rate of better than eight
guns.

for

example*

equipment, farm implements, ship
repairs, etc., as well as the cate-

all

realize, of

needs

for

that means of comparison between the
steel Period immediately before Korea

course,

which

such

"set-asides"
not all

have

new.

and today.

At this point, then, let me summarize the outlines of the situation. As between June, 1950 and
April, 1951:
(1) Industrial activity and steel
production both increased by one-

eighth.
(2) The steel now controlled by
NPA amounts to 50% of production as compared with correspond-

ing undirected pre-Korea

Sk«

(?)/The steel available for all

tonnage
tonnage,

50%

usages

of 25%.

which
wnicn

h^ve
nave

l
l

iust
just

sald other~uses
tJoday. including increased
production, is actually
saia

an?°"nted
to approximately
of the steel industry's pro-

duction up to now, and compares
it with the volume of steel dis-

over one million tons a month lea
than pre-Korea.
;

//1X

„

Position
So

much

ment, and other phases of indus¬
trial activity were also at prac¬

tically floodstage.
this

Take
energy

from

add

picture
your

should

make

121/2%, or an
increase of one-eighth, and you
wilf have a rough idea of what
April, 1951 included. Then take
the increase in steel production
by 720,000 product tons from June
of last year to April of this year
and match it against the increase
in
industrial
activity. This in¬
crease in steel output was exactly
the same—12V2% or one-eighth!

So,

face of things,♦it
that we should be
that the situation with

the

was

appear

crease

industry

June,

tons

in¬

the

matched the increase in industrial

product

tons.

Two

explain the increase;

factors

small in*

million

steel

50% of the total

pP°n « to this length because it
is

*s necessary
necessary that

Thus,

about

Let

one-third

million

tons, or 75% of the production in
June last year, to some

three and

one-quarter million tons, or about
50% of the production in April
this year. In slightly less than
a

year,

the "loss,"

can

be seen

un-

'
particular
interest,
of
lies in steel for railroad

becomes evident fromT't ™
figures, the "civilian"
me unfold
'
■
•

four and

should

Steel For Railroad Use, ;./■%

Your

production.

course,

these rough

you

before
derstand the
the background
background before
any specific applications.
1 discuss any

share already has decreased from

has

been

tlus plcture for

„

.f National Production Autnonty^immediately after estabhshing the DO set-asides' as a
Perc6ntage of the product necessary for the armed services, estabdL1the number one formal pro-

well

over

one

^ral^J.or sup£^eP?®.^aj defense by

million

uP°n the recommendation of the

«0

You

will

comparison

activity, and the distribution of all
the steel produced this year ought nages

many

understand
is

the

rather
NPA

today

cover

that

rough

directed
a

great

...

this

for

steel "Task force." Then NPA issued

directives t6 the

duecrs

the

ton-

needed

Illinois Central

Equipment Trust, Series GG
3%

Equipment Trust Certificates
(Philadelphia Plan)

mature

To be

$130,000 semi-annually November 1,1951 to May 1, 1966, inclusive

guaranteed unconditionally

as to payment

of principal and dividends by

Illinois Central Railroad Company

Priced

yield 2.20% to 3.05%, according to maturity

Issuance and sale
The

of these Certificates are subject to authorization by the Interstate Commerce Commission.
Offering Circular may be obtained in any state in which this announcement is circulatedfrom only
such of the

undersigned and other dealers

as may

lawfully offer these securities in such state.

HALSEY, STUART & CO. Inc.
A. G. BECKER A CO.
INCORPORATED

THE ILLINOIS COMPANY

•'

WM. E. POLLOCK A CO., INC.

May 18,1951

steel

pr0_

prodPcts
*

Continued on page 31

deal

$3,900,000

ingots,

tons, roughly equivalent to 6,570,000

for

1950;

1950, the American steel
produced a little over

eight .mil lion

one-half

and

one

products, or some
25% of the total production of
that month, while in April, 1951
it equalled about three and onequarter million tons, or almost

in steel production exactly

brief

recent history of the steel indus¬
try; June 1950 as a typical period
immediately pre-Korea, and April
1951 as a period typical of today's
situation. Both periods are fairly
similar with respect to number of
working days, climatic conditions
and other matters affecting operat¬
ing characteristics.

about
tons

P^Widing sufficient steel, starting
product tons per month. Further- V1 January,
to produce 10,000
able to say
if1?*1 cars per
^1? wa5
regard to the supply of steel was more, this loss unquestionably will
continue to increase as the months allotted among all steel producers
no different in April, 1951 than it
would

comparsion of two months in the

In June

rampant
and

another

ground. Now let's get down spe¬
cifically to the problem of steel.
I

memory,

back¬

broad

the

for

Industry

Steel

tributed in June, 1950 for similar

will al¬

logistics facilities, pri¬ roughly equivalent to 5,850,000
marily to make adequate trans¬ tons of steel products. In Aprils
portation * equipment available to 1951 the ingot tonnage was
the military if, when and as they approximately nine million ingot
*An

let

memories drift back for

survive.

prove our

will

you

in another
the reasons

how tomorrow will solve tomor¬
row's

—

steel shipping containers, oil field

G) But in April, 1951 the
f.lvl„an ^con°my was still at pracmillion units per year, all sorts
of consumer durable goods like purposes, without directives, we tipally the same level of activity
find a
striking comparison. To ;as ^
^n^ 1950. In other words,
refrigerators and other household
somewhat oversimplify the de/)^e made practically the same
appliances were pouring out of the
scription
in
order
to
make
the
am°unt
of butter m both periods,
factories in rivers, building-con¬
V^ 10.
tetter period we had
struction
was
moving forward comparison clear, let's cdll all
these present requirements and added GTD s for DO and related
through a period like this without rapidly, oil and gas pipe line con¬ their
corresponding
pre-Korea
Pro§rams
accounting
for double
was
huge,
industrial
wholesale
derangements in our struction
e amount of steel used in corplant and equipment construction categories "defense," and everyeconomy. For actually, believe it
' responding categories last year/
was
rolling in high gear, rail¬ thing else "civilian."
or not, the truth is that less than
Then what we could call "deThis, then, is the broad over-all
5% of American industry's pro¬ roads were struggling to rehabil¬
ductive capacity up to now has itate their trackage and equip¬ fense" in June, 1950 amounted to Plcture up to now. I have dwelt

with

jmctdent there was a complete
change in the setting. This coun¬ suffered any serious difficulties
try, and its allies faced a clear .in continuing to make and sell
necessity to rearm. For the in¬ goods. True, many of these goods
definite future, it appeared, the thus made and sold are quite dif¬
"Western" nations must be pre¬ ferent than what would have been

pared at the least for sporadic
hostilities, and at the worst for a
speedy mobilization to meet the
challenge of total war. Thus, from

Where is the

normally be terjmedL;

activities

with

ing, this country

....

Right
along some steel has been going
direct
199% of the average for the years into
military needs, for
1935-1939.) Preliminary estimates guns, tanks, ammunition, airplanes
for April, 1951 will probably be in and so on. Some steel has been
the neighborhood of 224—an in¬ going to projects of the Atomic
crease
of
25
percentage points Energy Commission, for railroad
over
June. Or, stating this in a freight cars, for pipe lines and for
simpler way, industrial production other uses now definitely designated
as
was
somewhat more
than
one"programs."
Furthereighth greater in April, 195L than more, steel always has been disit was in June 1950.
tributed through warehouses for
Now,

of what would

gories of warehouse and converter
tonnages. Likewise it is extremely
April, 1951 we had: an NPA in difficult to get accurate
figures
Washington allocating practically on past and present
usage in each
50% of our total steel output to of
the
various
directed
cate- f
certain very important Hises either
gories. However, the rounded data
directly or indirectly related to I have just given you are substandefense needs.
tially correct, and will serve as a

The Federal Reserve Board index

Points out, however, if defense steel require¬
destroy healthy civilian economy. :

passed.

situation

Difficulties
Difficulties

i- do1es"t:

respect to steel use in both of the
months selected for comparison.

nist aggression in Korea on June

the

that question intel¬
have to look at the

economic

last

catch? Simply this: In June, 1950
we
had no Korean incident; in

have

overall

civilian

ligently

The outbreak of overt commu¬

for

distribution

Says defense orders and railroad requirements are
being met, and warns days of eating our cake and having it too
ments go

answer

the

Allocation
Allocation

lieve the situation?"

difficulties in meeting steel demands to NPA allocation

orders.

match

year-

period,, then,
ingot tonnage increased by one
million tons and steel product ton¬
nage by some 720,000 tons. And
the question is, ''Where did it go,
and why did not the increase re¬

Steel Company

rent

In that ten-month

Assistant Executive Vice-President, United States

pace

operating

higher operating
rate for that effective capacity.

UhAPPLE, Jr.*

Pointing out increased production has kept

effective

crease

(2149)

OTIS A, CO.
(INCORPORATED)

MeMASTER HUTCHINSON A CO.

The Commercial and Financial Chronicle

Thursday, May 24, 1951

(2150)

//:';

Changed

Mortgage Lending in

;.:vt

;

several ferings of bonds by the State cause of the limited time I thought
months for starts to come out at of
West Virginia for a bonus I had better not bring them upthe other end of the assembly line for^ veterans^ Since
it, was ap~ I do, however, want to repeat
It

cline.

takes

usually

proved by a referendum the Gov- that 1 am an optimist and t at I
.ernor; of*West Virginia felt he;-am sure that once the ■ present
\#U V vliftiftlviftl
IVVI
had a mandate of the people condition in the mortgage market
of his state to issue the bonds has righled. itself conditions will
By THOMAS E. LOVEJOY, Jr.*
take effect and the supply of loans aria pay/this bonus. However, the not be unfavorable to the operaPresident, Manhattan Life Insurance Company
will
be
considerably / reduced, underwriting houses in Wall St., tion of a mortgage business/proThat's the way I see it, but .of because of this voluntary credit, vided adjustments are,made;to
course I could be wrong,
restriction, have declined to bid bring them in line with competiAsserting recent drop in government bond prices has created
-

IIA17AVMm an

in the form of,mortgages ready
for the secondary. market,, but-it
looks now as if the old law of
supply and demand will begin.to

IvIATlrPt

RflVin

■

finds it
there is

however, is only temporary

--v;^

entire .financial structure, insurance executive
has increased new offerings of mortgages, of which
now evidence of an over-supply.
Says this situation,
on

pressures

The

building is falling off and there'll 1>e less mortgages.
Reports higher bond yields resulting from "unpegged gov¬
ernment bonds, with little likelihood of a reduction from pres¬
ent levels.
Looks for voluntary credit restraints to cut down
tions,

new

banks

also

commercial

justment in the price of ali classes
cf bonds as a result of this change

appears to be
effective this will, of course, have

Now, to get to the bond market,
has been a substantial a'd-

credit

tive

the

Uhlmann & Latshaw

restriction

Announce Changes

could

which

have

lafge volume of other corporate

secu-^
been

securities

the

right

character

bought four months ago at a 2.651 on the way that the results of
to 2.75 basis are now available the effective operation of the volaround

3.15.

have

in mind

untary credit restrictions will not

the

recent offerings of Consolidated immediately affect - interest rate
night is "The Government delivery for payment./ Now they; Natural Gas bonds that came out,, but it will help control inflation.;
Bond Market and the Effect on are forced to speed up deliveries,/on
a 3.16 basis and the :=Duke f L ok„'
1/ % Increase in U <
Mortgage Lending." That's quite and what do they find? They find Power & Light, bonds which -came.
assign:
that many of the institutions in. out a few weeks ago on a 3.15: '. /
®n Mor gages
..
merit
and
I
the so-called secondary market, basis. Also, a few weeks, ago Cons Now, you may ask what S the
haven't
trie
HBIHNhP" which includes savings banks and solidated : Edison of New York object of my talking the way L
termeritv to'
life
insurance
companies and bonds were offered at a 3.10 basis' have?. What I had in mind is to.
assume that I
W
' IBC other institutions of that type, do and the deal was a flop—the u.n- try briefly to paint a picture of.
know all
the I
- <;':aK
not have the ready funds to ab- derwriters had misjudged their these two branches of the invest-;
answers
to
R rmsorb these loans when delivered market. When the syndicate broke'merit market as I see them today
the
problems
Wr'W'S for payment.. Manv such institu- bonds were bought at a 3.15 to, and then tie them in together;
facing
all
of ft
ziflftft-* tions have for several years built 3.18 basis. Other types of bonds- since they are relative and haveus these days
ft
"P substantial, commitments for have had a comparable adjust-: an' effect -upon one another.
If
However ' I
mortgages, in some cases much ment in price and we seem to be my-thoughts are right, and wehave s o'm e
higher than they should have. I presently going through a process are going to have a bond market .-thoughts on
know oi one of :he large savings of establishing a new level of .in-/with yields around current levels;
this
subjectbanks here in New York, which terest rates which could be in ef-;fori an. extendedrperiod of time,,
in which ycu
J^hI 1 will not name (and I might say feet for some time to come./
'it will be necessary for. some adTnight be :.nftHE2I JHfti it is not the savings bank of
To put it another way, I don't ^ustments in the mortgage market ,/
terested.
t. e. Loveioy
Jr.
which I am a trustee), which had see any improvement in /bond
you want to place loans with
discussion

for

government

guess,-but, AAA corporate
rities

Holds there should be increase of %% m yield of con¬
ventional mortgages to restore their competitive position.;
subject

;

bond market, some affect on the supply of seWhether or not the adjustment curities
for sale.
My personal,
has been completed is anybody's, opinion
i? that there is such a..
in

ing.

The

investment outlets.

believe will-decline

to lend the money to the state for .
that purpose. Since this voluntary;

financ¬

municipals, but forecasts heavier corporate

volume of

on.the bonds and the

Market//

There

since, because of credit restrio.

Bond

New

and took their time about making/,

to-

•

William

J. Dyer

Geroge

Ashby

institutions once the present/large//
JPv<rPl0£,y "Situation has- adjusted
20% of its total assets. That's a cording to the information that I jtself.; Even^rf; we have a mere /
large percentage. Such institu- have heard, there is a tremendous
e slJPPly Of mortgages they
tions had been, for a number of amount of corporate financing on Will not .'be attractive to institu-. -

all

You"are

at the beginning of this/year prices or 'reduction-in yields .on
mortgage commitments equal to bonds for some time to come. Ac-

familiar with the substantial drop

prices since
John J. Strandberg
removed early in
March." So there is no need for
me
to'go-into that. Whether or years,,;selling/their government the way, which -the public does/!1011®
there is an increase
/ /
;
not they are going to drop fur- bonds at the pegged prices/thus not know about, which will keep 111 yield. ,vyh.ink there should be
KANSAS .CITY,; Mo.—Uhlmann
ther is anybody's guess. I do not frequently freezing a little profit bond prices ait close/to current 31 least
? increase in the yield & Latshaw, members of the New
know.
Some
of my friends in in some cases and using the funds levels and possibly put/them.a on conventional mortgages in or-. York
and Midwest Stock ^Exgovernment
bond
houses have 1o take up mortgages as they were little lower. In other words, we;
them to becoine competi-v changes?, have announced the re¬
called me, during the last' two delivered for payment. Now they/have another situation-of 'supply 'tivb- In the case of FHA and GI moval of their offices to new arid
or three days, to
tell me that in;cannot
sell
their /government and demand and there is the pos- loans there should also be an in- larger quarters at 111 -West 10th
their opinion, bonds at present bonds unless they are willing to sibility that the supp11
prices (around 96 and 26/32nds take a loss. On top of that, dur- rate bonds of good
hid) are attractive. They may be ing the first two months of this be very heavy. TL__,
.
....
right, but these same fellows told year withdrawals -of savings de- could go on for a couple of years. f°e premiums on FHA, probably space in the Board of Trade Buildme the same thing when governposits were in excess of new deIncidentally
the need for/all W1N -.disappear .or certainly drop ing.
Among/the features of *the
ment
bonds were
selling at 89 posits which of course resulted this financing is the result of our substan ially and GI loans prob- ;, new offices is a new fron , largely
2/32nds a few weeks ago. For my in a net decline in totaF deposits industry trvine to meet the nbeds
Will "have to be sold at a . glass,^ extending / to , the second
part, I want nothing of them right of such banks. I understand this. 0f the rearmament effort and alsd > disco*urvt'^
my thought actu- floor level.
/...•// •:'?
now—you can do a lot better with trend changed in March and was carry out the "butter as well/as a*ly that since GI loans will'not
The • firm has announced that
your money in other types of in- carried through during April, and vuns" philosophy r The "objective — competitive and even be sold William J. Dyer has been named
vestments.
•/'./; /
savings bank deposits appear to is good and'it is mv hone that we at a discount of one or two points /acting trading department man-/

government bond

the

pegs

were

be increasing again, but not :as will be successful
Last niehf I
.rapidly yet as they have-in the heard Mr. Chas. E.'Wilson talk 'at

"L-

Etfecis of Drop

Government

Prices o"

Bond

deflationary,

others

inflationary,

past..^:?^^^^ ://h-//v//-

:t
-

m0nths

but not much

not

hllifvp
believe 1
one

T
I

chances

'are

and

C"""

wi^h f• funds/to absorb

uncer,

standing commitments

tions

under

surh

that the

enfeestinn

inStftutionaf^exemfrivedo
id.err

(if

errors

rnnhi'

his

made)

are

?.eposhs

fundc

to-

M»nvi
Manvi

wiHp?nrpaH pfWe
widesDread
efferrs

ihT Sir

a
this

•

outrlMs,

many

the

bousing, to the ulfimate

warenousing tne loans, probr

ablysat
"An

spread

address

Monthly

Dinner

Mortgage
America;

Chapter,
•f

their favor,

Mr. Lovejoy at the
Meeting,
New
York

Bankers

.....

«"»rtgagein

deciine

•

gages should yield 1 to 1 ¥4% more/,,/,
than Treasury

*,/xr

•.!/•;/,/•

Peter Ver Cruisse Co.

and comes in

timfs^ Howev^ sei

frfend

iuc

the

trend

rate

<.tarts

difficulty

Regulation X,

in' getting

Investment-Securities C<^
,

...

•

such

■

eomlulsory

being voiUntarv

regulations.
But
mv imnres-

it is

r.a

ma- ing an

terials, starts will continue to de-

-s-yo-ior
ana .uieu
cxmmiaie loans
waits which1
wnicxi' have
suave an
fnr jiiLeriid-i
fntprnal lusu>,.;
costs- 'and
then vestment Securities Company .of
eliminate
ail at,^
another C0SXS>
*% should
be p„i;f—u#
inflationary character.-]
character. ! I like it, * said,that
V Juternai^
and .trien
^ ,„.+u
and-1 believe that it is already set aside to build up "a reserve U1A1CCS ctL oou
effective and will be even more T^^orild ciri the net return to* Street." Principal of the firm ;is.
<50 in the not too distant future/ K
S u
net.return to jjarry1 Alton
Cottingham.
Au- i
f
aibiani ^uiure, 2%% which was not very comluu
•" s
1
S were
lu /.
U. S.
n
n
lf
f
If thJDse
fictions
com- petitive with
wi;h y.
s. Treasury bonds
institutic)ns, - w;1if.[1r!ien yielded
pulsory, 1.
I thlili\
think all institutions;-j-hgo
yielded 2!-!%.
lxk%. I meremereWith J. C. Bradford ;
betottoe
to "S'arlwnJ
mention .this to bring out the
j c Bradford & Co., 40 Wall

sion that a -great deal of care is
Due to this new condition in the being -taken in ^selecting loan?
mortgage market, and I believe which fit the pattern of not hav-

some

bonds.. It is.not a

^thumb

Now to give you an idea of the-

situation^is till sh^

recent weeks due to

Association

J^New6Vorkkecfty/SMayati°6

1951/

nhilitv

hie

mor^appq

P«r<^^;--'fa^ wMch^to^^ieve

^eTwaSlng thflof„°sr proboeen

imnrovcmpnt

•

institu-

V"T

Voluntary Credit Restrictions

my^gcoliecthan i^orr^ct/

meantime,

DiaCp

black market and- to ,40 basis points, more,
higher prices from developing:
Treasury;, AA should

UC[11

•

firm^ as a registered representative
than the and trader ^Partners in, the firm
^
yield 40 are Paul Uhlmann, Jr. and John
:/.,:v ...to oO basis points, etc.^and mort- Latshaw.
. . ..
security should yield

demand—thus .trying corporate

Prevent

^en

gS
trend

i2
Sic mortgage

mortgage
/
originators to move
out. loans,
which .such
which!
such banks
banks
were
warewafe-

public

cross currents and pressures that
at
PHOENIX. •Ariz- — Pe,er Ver
are difficult to iudae—we sbouldat
tlmes- However, sevare difficuU to judge—^we should -ral "Vears aeo'l heard a talk Cruisse and Company has been
the-out-, not .take lightly the i voluntary
by a
of mine at the -formed Building
with offices
in the
Seto engage
relatively credit restrictions about which gAmerican:
en Dy a "Life
menQ* Convention
01 m e aX in' curity
—
— in the

°"t:v ""T"""; V""
lro^ the mortgage,.market-and
money is tight. I bethe
® ^ aWei
abjo to:bang.on
to hang on
throughout
tnrougriout
trie
country ' I
fe/* country
I "am
"^
^1 am long enough, the mortgage ongitold,' have become nervous
-rvous
and
nator
will
find
there
will
be some
have put pressure on

nri^whan
■ices has haH
had

the

TelenhnnP Rr

banks'will be
S
you havo probably heard a Sreat which
- mada
an • analysis of securities
business. - Peter Ver
toward-higher
|Jul
deal recently. The mainj purpose;7mpttgagel
which
showed
that Cruisse was - formerly: Phoenix
^htinues, in addition to as you know, is to get lending in--;
not" verv altractWe "It manager for Marache Sims & Co.
^
he tool<.. /, :. // 5i/;/ i-/

The-savings

soon.

Ii
tamti^s and under such condi- helped,if
and

American

nature x>t,their

siich-new

that S
with-amortizations on and
S' -take
tlifo PrepsOTOents
of., the mortgages
they hold should enable them to

faced

T,
1
currents

cross

tairilies

oLthe
and

not

in«titiiUnnnl

All

men

be-

• Companies
dash outgo as

though

should

todav

investment
these

mean

longer

causef the'; insurance

cash'nflow exSs

/a
result
t'business

Th&does

the

they are not attractive or competi-,ager in the absence,of Russell K.;
ti^.e and we may see the/supply* Sparks who is now-serving as an
of. GI l°ans dry up. /
: Air Corps Captain at Carswell

,:c

inflationary character.

rituation^nd

good example is the proposed of-.

^ New Yo* fty

the of the New York Stock Exchange,
.mortgage situation ana tne
need for improvement
m. yields ann0unce that
Frank J. Jordan
is
makp thpm comrr*—,v
—;,~

■

associated with them m the

now

Municipal Department. In the past

There-are a lot,of other things he was with Roosevelt & Cross,

I could have mentioned but be-

Inc.

...

Volume 173

Number 5014

The Commercial and Financial
Chronicle

(2151)

'
■

.:>■

•

Common Stocks and Pension Funds

trust

have' probably
legal background of

ihvestments

and

oughly acquainted with the basic
legal
case
w

trus.

.our

great

many

years

new

Mas-

sachusetts

when

year

Harvard

signed

—

Governor

Col-

died

and,

.many

today

which I have had

men

left

safe

and

ment

From the beginning of our pension fund business, we have re-

pro-

-ductive stocks, garded them

either

funds,
bank
hereby en-

counts of

other stock,

joining

public

them particular

;

Let's

look at this problem.

"in

normal

trust

.long duration but

ac-

with

the

unusually attractive feature
of regular additions to principal

care

this
of

mnk-P

11*

mis

wh7

thiw

and

nice Drofit

disfj.

feast cur'rentl3;
the ladde;

While

beell

done

know

successfully,

have preferred to
concentrate
in

common

there, is

our

ing the supervisor

where
in

stead

farge

account

of the dolIar
This count
pears to be committed to a

spending

jn good

common'

well

bad

does

the

ket

the

the- bond
withm.t
without

only

its

scancity

together

burden,

the

for

earnings

portions.

even

con-

many

cor-

following

statement," diversification. A
very fre-

quently and which really states
the "Massachusetts Rule":
V "All that can be required of a
trustee to invest,
is, that he shall
conduct

himself

exercise

faithfully

and

sound discretion. He

-a

to observe how

men

prudence,
discretion and
intelligence manage their own affairs, not in regard to speculation, but in
regard
to

the

permanent

disposition

their

funds, considering the probincome, as well as the probably safety of the capital to be

able

invested."
Before

considers

commitments

concluding his opinion,
tribute to trus-

tees and the need for

limiting the

liability of trustees:

the

among

various

industries is very desirable. Even
the securities of the less favored

companies have their day of glory,
as evidenced by the resurrection
of

the

railroad

bond

market since June.
you already know, a
stricted

senior

and

stock

many

program

securities

eludes investment in

of
re-

pre-

tified

solely

inflation.

P?e which

has

One

been

kind to investors

hedge

against

■

cipal

.for

reason

stocks at the present
tbe greater
yield

apt

lower

common

time, namely,

and the attend-

contributions

the

ing

especially

recent

among

has any senior securities

the red

in .value.

breach

Common
r

Stocks

ments

good faith."
'

Trust

Invest-

Massachusetts-

this

favorable i atmosphere
trustees have operated in
my State
for

over

the

120

years,

probable

income

considering
as

well

tees
mon

have

Massachusetts

come

stocks

ingredients of

one

consider
of

truscom-

the natural

long-term investment
program,
the
percentage
varying with the outlook for business

and

security prices.
The position of common stocks

*A
Club

gs,

talk by Mr.

„

Wren before the Bond

of Baltimore,
Baltimore, Md., April
i95i.

si°n

funds

book

can

market

the

case

pension
to

nor a

NEW

when

are

connected,

value

pany

contributions.

have
book

level out the

This

•

Continued

solicitation of

page

offer to

3V8% Debentures due 1976
our

Price 993/4%

somewhat

nies

(and accrued interest after June 1, 1951)

with

this characteristic has
profitable.
Taking; the
broader point of view for the mo-

been

"ment, an account should participate in the profits from new products

and

other

provements

technological im-

emanating

from

research laboratories of the

provide

greater

fit

from

the

ticipation
secured

bonds

some

growth.
the

Some

profits

al-

Goldman, Sachs & Co.

Lehman Brothers

The First Boston Corporation

par-

can

Incorporated

Smith, Barney & Co.

preferred stocks but frethis privilege covers up

weakness
Tn

afMitir>n

the
if

Harriman Ripley & Co.

bene-

security

th»
invpetllseL1- .m addition, 11 me
lnvestis
successful, the premium

ment

regularly distribute the Prospectus within such State.

coun-

really
to

may

Blyth & Co., Inc.
May 24, 1951. '

Union Securities Corporation

by purchasing convertible

quently

not

security holder

the

manufacturing

facilities, these do
low the

A copy of the Prospectus
may be obtained within any State from such of the

Underwriters

....

- •

com¬

allows

the employer to avoid paying less

National Dairy Products Corporation

successfully. In other words,
long-term investment in compa-

use

$30,000,000

being

of the pension
plans with

ISSUE

penT
appraised at

found that the actuaries

participate

offer to sell

place,
that

valued for actuarial purposes.

op-

diversification

first

outstand-

the probable safety of the
capital/ try. While many companies which
With equal emphasis on the
posi- can be classified in this
category
tion#of the life tenant and the re- have to offer senior securities to

mainderman,

In -the

should be remembered

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

honestly and discreetly and handiwork over th£
years,
all
carefully, according to the exist- companiesi^ftSve their
problems
ing
circumstances, in the dis- but those with a strong
underlycharge of their trusts. If this were ing'growth trend
seem
to have
held otherwise, 110 prudent man
overcome the obstacles

neglect

better

industries,

are

or cutting losses and they

years

watching the results of

selves

summarized

ppporo

insurance field, j,Another
ls the banks,. Even in the mdus-

itself, which they held in ing*-'
trust, provided they conduct themIn

would run the hazard of losses
which might happen without
any

ths

reaved

ital

investment

see their Pension fund shrinking

the prin¬

are

stocks

may

This announcement is neither

exam-

families and
orphans, that to refund them privately. In some
they should not be held to make groups, such as the automobile,
good losses in the depreciation on]y one
of. the major companies
the failure of the
cap-

that

would

comDanv

which

common

provide

"Trustees are justly and uni- trial classification, the
stronger
formly considered favorably, and companies;, have tended to elimiit is of great importance to be- natc debt and preferred;
stocks or

equal

pvnppf

rbusTness denre^n
officers ofTe
worried about keeping ?t 0ut
of

The principal reasons for
utiliz¬

(

of stocks

alternative

funds

ran

portunity.;;;.

most

si^

ereatest douhts

i.nave leit to tne last tne
attractive

than

prime bonds, which

Yields of Common Shares
;

.should

marke^

•

number of

stock.

f fh

qhnnld

■

companies and industries which
have been successfully developed
without being forced to raise capital by borrowing money or sell-

ing preferred

the Justice paid

trustee usually
distribution

some

IntheDast

L^ed

the

0rn
PenS1?^ com"
company will exeit

cerni"g thH Pregram is the pod,ion
the trustee when the stocks
are selling at a substantial dis2„=y',Jcount
irZlTj
from the book value, which
T

has been quoted

common

Tt
the'msr

*m ,thJs ?ype. of account is

which

g a Pr°gram *or

dividend point

made

dangers

market to average down his holilings of common stocks and tobuild up the proportion of
those
items.
-

the heavier
point to lower

ma^be

•••

such pitfalls and state a
definite
policy of using low levels of the

strin-

profit

elements'ofSHanepr3^,'f'n

•

t0
have been advanced at the woist
possible time to sell. Any pension
trustee going into common
stocks
should arm himself now against

and, attention Mn the choice
peace as well as war
In passing
of,'during the early years. Phis arI might
funds.
The trustee presented his
say I consider the present
rahgement puts cash in the hands
oMainert in that
account
for
allowance
and,
as
of the trustee at various levels of Treasury surplus as only a tern- gin of
safety is greater'todav in
norarv
sometimes
nhenompnnn ' Whiln T rin
happens these days, the stock market
the
Tlnw
tne
Tnnec
permitting the not
Dow-Jones
the remaindermen
Industrial
and
submit the pr0position that
objected be- accumulation of stocks over a
peMoody's
averages
than
cause the value of the
common
before
stocks
are
the perfect
fund had nod of
time, thus averaging the
World
War
II.
At
the
T
'
declined.
As
present
a
matter of, fact,
cost.; Assuming the advantage of SOAutl°n>< 1. am .sure-that no one time, the yield on a list
of high
the three of the
stocks had de- this
arrangement for the moment, here will suggest bonds as a sub- grade common
stocks is around
clined from an
original cost of let's investigate some of the reatwice that available on
stitute* for?; this
high grade
purpose.
While
nearly $42,000 to slightly below sons for
buying common stocks in
bonds., In other
some
$30,000.
deflationary>
pressures
words, the yields
are
pension trusts.
ft-•••*•-"
( Justice Putam, of the
present, the specter of inflation on common stocks may be deSupreme
Diversification
Judicial Court of
remains
on the distant
but over a period of
Massachusetts,
#.
horizon so creased,
in giving the decision of
the Court
One of the first is the matter of that some common
stocks are jus- years it seems to me that income
•

~.c

ns^

production

great

From

exception,

gestions f°r such "hangesln
vestment policy often seem

with

money

government

seem to

abandon the whole idea as
being
silly, take the losses, and put the
in bonds or take out an

not

the imposition of

trols,

re-

the

pr+essare
the trfte,e' ?r
the trustee himse f may decide ta

been

and

pensions to

normal/lines, the lower profit
margins on government
business,
price

addition,

gent

cost

problem

a?°?.

years

ana,

the

has 4 not

Therestrictions

off-

nnttee of the

for

•'

the

raruthUytonfoVblTte/thnn^
3%basiftheHrsttimeh many
.

,lnwprpH

violation

par

deterioration

has

wo v,o,,o
changes. We
have

mistakes

investments,

direction

"Timing"
•

mar-

-i

employer. There are always two
sides to a question and this im-

raise

mov-

yields.

seen

the

equation

market

the

high

The stock

hiehs

new

the

portant

extent, with

sides

times,

part of the

move

duce

ma-

questions.

ing toward center.

dollar, and finally, to increase
yield of the fund and
thereby

In the last six weeks
this spread
has narrowed to some

tax

policy
receives,

more than it

times

stocks

interesting

setting

substan-

the spread in
between bonds and

grade

the

a
in_
today is the
deterioration in the value

vestment

man

stocks

"top" price

saving,

this

One of the greatest
dangers fac-

terial

yields

of bonds

case
:

stepping down

quality;

risk

the

both

hnrrls

return

least

made

tial amount of
money over a long
period of time, such as 30
years,
is large
and, , in the vernacular,
"it ain't hay." In view
of

slightly

procedure

bas

debat-

funds.

pension

If you make

can be purchased at
with th
h
f

means

tn the last few

able spot for this type of invest-

of money
trustees to

bonds

Dewey

one

All

™n

count

discussions

I find that the

years,

sum

(invest

the

3y4%-3y2%

WSence
tt^prese

ln their portfolios.

from

lessons

■

"growth" companies, to
offset,

based solely on the amount
of income deemed
necessary or desirable by the interested
parties. The
difference between a
2V2% and a

some

the

1TeguV-£rn?0ry- °f these lss"es
John MLean However

en¬

investing funds

' investments

their

bill allowing life insurcompanies, to include some

a nee

included

that

exact science.

fact
an

SUPC.eSef,,i

P1U,7
Common stocks have, +
found
interested
purchasers
this

dent.

has

be¬

jority0^^

york

thmkmg for

Paul I. Wren

the
not

spotlighted by the, legislation

was

frequently at the

.;,

pension plan by the
employer. No
investment
program
should

some

My training in this field of
deavor

in normal trust accounts, endowment funds, and similar trusts of
long-term duration has become
quite widely accepted. -This trend,

thor-

are

Investment Not Exact Science

tivity and diversification, and cautions investment is not exact
Cites advantages of higher
yield securities for pension
funds, and comments on common stocks as inflation
hedge.
you-

and

stock.

the greater yield and
appreciation possibilities available
on the
common stock made
that
the more attractive
commitment.

science.

security sells in¬
volatility almost to that

common

ginning,

After explaining Massachusetts
rule, which upholds prudent
investment in common stocks, Mr.. Wren outlines
factors in
common stock investment for
pension funds. Stresses selec¬

the

point,

Vice-President, Old Colony Trust Co., Boston

Many

the

creases its

By PAUL I. WREN*

studied

which

The Commercial and Financial Chronicle

(2152)

standard. The implication of

It Is Time to Reconsider
BELL*

and

ghost world.

These writers of fine

ity

Acting President, Economists' National Committee on
Monetary Policy

from

imitators.

their ideas

were

ideas

by
Eventually

President

Conference, July

On basis of

proposed corporate and individual income taxes,
Witherspoon estimates that, despite higher levies and be¬
cause of expanded consumer
buying, there is reasonable proba*
Mr.

Roose¬

the London

1933, and

the

Because

tempo of inflation
conspicuously dur¬

ha$ increased

ing the postwar "decontrol" pe¬
riod, it is commonly regarded as
a
war
phe¬

patient;

biiity that pre-tax corporate profits in next fiscal year will
billion, and the expected new tax bite will not there¬

his Fireside Chat of Oct. 22, 1933,

reach $45

attacked

fore result in dividend payments below 1950 level.

the

Korean

gold standard

Rapidity of Inflation

and

pres-

seated

Whenever

the
pro¬

gram,

our

until

forces

and

the

are

emergency

arises,

Such, also, was the period
'30s, when all manner of

today.

inflationary pres¬
sures—pressures which originated
in the early '30s but did not take
hold

needs

government controls and manage¬
ment.
We are in such a period

Bell

with

swollen

eco¬

'40s.

Inflationary
running strongly

now

they cannot easily be checked.

For many years the government
has been
deliberately following

the

nostrums and remedies were pro¬

Many of the measures then

posed.

proposed
success;

adopted

tried

been

before

some

had

were

often

without

and

innovations,

frankly experimental, based upon

principles not entirely

forward

into

the

postwar

of inflation and full employ¬
Government policies have

eira

ment.

fostered

and

nourished

ary forces in

inflation¬

the fields of

mone¬

legislation and administra¬
tion, fiscal policy, price support
programs, labor relations, housing,
tary

Idan and guarantee
iri

great
its

operations, and

other sectors of our
We are undertaking a

many

economy.

rearmament

colossal

program with
financial outlays be¬

have fully adjusted our¬
selves to the burdens of a welfare

fore

and

economy

the

staggering

legacy of debt imposed by World
War

and

(2) A

stable

Ways

has

This

for

fund but

were

our

postwar

foreign

aid program.

shibboleths which

today ex¬
inflationary influ¬

less

able

that

assume

business

government

might account for about

tax rates than

25%

advocated ' by

suming that the profit

ernment' business

only

Adminis¬

the

tration

but

these

Con-

of the

one-half

that

would

margin
of

segregating gold from the domes¬
tic monetary and credit system.

last

week

have

never¬

the 12.5% reduction in

Federal

was

without

apparent opposition

William

again

witness

Can this
again and

and

these

now

again?

take

against

Collateral

(3)

notes

(compare items 7 and 8;. As the
amount of reserves against notes
is

reduced,

lateral

character of

the

becomes

and

recent

Cor¬

It is like

tax

produce, to.
into

the

billion

law.

that

revenue

will

rates

future,

but

has

$2,250

million

the

billion annually

$45

compared

with the preliminary $40.5 billion

the

$24.0 billion

first

year

after

taxes

48.0% of esti¬

profits.

pre-tax

of 1950,

quarter of 1951

profit

applied. Hence, the Com¬

might

porate

profits

retained

after taxes.

earnings are better than either the
.

1947

1949

about

13.7%

j 1950.

earnings

but

From

comparative

standpoint this is not encouraging.
corporate earnings would still

estimate

profits
This

\pre-tax

seems

rise

very

made

billion

$45

corporate

reasonable.

possible

are

belqw the earnings

Nevertheless the

validity of the

cor¬

These

1950.

was

Economic Advisors for the year of

The

by'-' thev Council

estimated

was

lion,

tax

pre-tax corporate profits figure of

for

estimated

percentage of retalined earnings to
43.0%, and this percentage of the
projected $45 billion, or $19.3 bil¬

liability. If this is
true, the estimators have used a

corporate

This

taxes.

mittee proposal would reduce this

been

that this increase will add

additional

after
full

the

and

tax rates

suggested by the House Commit¬
tee

might

this latest quarter that the present

currently

for

the

mated

the

nothing of looking

say

step further

reason.

profits

porate

"striving for the wind"

estimate

present

into

corporate

entirely

figure has been estimated at $22.4

and

bite into earnings

enacted

are

realm

tax

examine the possible level of cor¬

higher rates will

even

before

Going

of the

reports

manufacturers,

deeper

they

col¬

The

important.

the

automobile

the

billion

$45

profits

enter¬

heavy toll of industrial profits,

increase in sales and

30%

that

busi¬

porate taxes are already taking

the

profit mar¬
gin would lead to the conclusion

vexa¬

prise.

(ex¬

Monetary Policy).

done

tion

.Witherspoon

ness

cept by Senator Robert Taft and
the Economists' National Commit¬
tee

the

June, 1945, from 35
25%.
This change
made without discussion and
40%

the

margin. The resulting vector

1950

added

theless

was

reduced
and

ratio

Reserve

busi¬

87.5%

substituted for gold reserves; thus

The

gov¬

about

profit

around

the

domestic

.overall

the

ness

volume. Further, as¬

gressional
proposals of

^Production Cure Inapplicable

some¬

advance in

now a mere

1913 conception
ercise
of eligible paper (collateral) was
strong
ences
and which serve to make gradually broadened from shortcontrols ineffective or impossible. 'term, self-liquidating commercial
We should examine them criti¬ paper to include government se¬
cally in the light of their depres¬ curities and, after 1933-35, any¬
sion setting and in connection with thing acceptable to Federal Re¬
the. present
situation.
I
shall serve authorities. Today the "col¬
merely enumerate them here, with lateral" back of Federal Reserve
brief descriptions sufficiently to obligations
consists almost en¬
identify them. Some have a hol¬ tirely of government securities.
low ring today because they failed
(4) Asset versus debt money.
to work when they were tried;
Some of our students in American
others persist because they have
universities and colleges are being
not
yet been fully tested; still
that
inconvertible
debt
others have not yet been applied. taught
money is the ultimate form of per¬
Practically all of them involve,
fection,
From a recent textbook
or
are
postulated on, increased
I read: "The evolution of money
government
regulation,
control,
from its earliest beginnings has
and management.
been
characterized
by a steady
(1) The "Ghost of Gold" and subordination of the commodity
even

in¬

what

redeeming obligations based upon
such

(GNP has
in
the first
quarter of 1951 some 13% over the
annual figure for 1950.) Further¬
more, if this increase in sales vol¬
ume develops, it might be reason¬
buying.

increased

already

percentage

points

will

sumer

dividual taxes.

longer

available

fund

both the government and the con¬

increase of 5 percentage points in

corporate taxes and 3

were

Means

and

recommended

concept of bank re¬

Reserves

considered

House

Committee

could achieve with

new

serves.

basically

false, and some fully sound if the
— policies
'which
were
devised
in
earlier underlying assumptions are grant¬
ed.
I have made a list of these
years to combat deflation and un¬
employment and which have been prescriptions, tenets, doctrines, or

inflationary policies

carried

The

paper, sys¬
more

convertible money.

widespread demands are made for

economy

direct

pressure

indicate. Even
defense

would
where

effort

bad.

groups
who stand to
benefit temporarily by the effects.

than

current events

without

figure limiting expansion of notes
go, but the damage done to society
and
deposits.
This concept was
by rapid, badly distorted, and inadopted not only for member bank
equitable price readjustments
reserves, but also for Federal Re¬
should
find no defenders, not
serve
Bank
requirements. Irre¬
even
the
vested
interests and
deemable
gold certificates were

of pres¬

ent-day infla¬
much

Crux

adjustments,

altogether

essentials

nomic

the

deep-

the

mild
gradual inflation in prices of

However,

economic

not

war

suresare

give

Sees, how¬

exceptions for individual companies.

ever, some

maintained

and

money

inconvertible

would

Since inflation shows a need for

war

tionary

that
tem

dollar than

phenomenon.
causes

balance.

ment

certain

even

view

the

restore

nomenon.

Some

perspiration of a fever
is nature's attempt to

the

.K*

Newhard, Cook & Co. ;

accepted in high

circles.

WITHERSPOON

Members, New York Stock Exchange

were

obstacle to the scientific manage¬
like

WILLIAM

Statistical and Research Department

country

velt in his message to

ancing (including "owe-it-lo-ourselves'* philosophy), and "if
business won't, government will" credo. Maintains no controls
can be made to work unless we have confidence in the dollar.

system was to blame lor

American

official

public debt monetization, interest rates, budget unbal¬

money,

Forthcoming Dividends

academic respectabil¬
the thesis that the gold

deflation, and their
transplanted to this

difficulty of checking inflation stems
shibboleths of the 1930s regarding gold, debt-

false

The New Tax Bite and

gave

standard

Dr. Bell asserts present

„

happily

successfully
prose

Association;

Secretary-Treasurer, American Economic

Thursday, May 24, 1951

these

that

mysticism and
superstition work with primitive
peoples, it should work with us;
we
can
bury our gold and live

The Gold Standard
By JAMES WASHINGTON

stories

ply

$19.3

billions of
am¬

last year's dividends of
$9.4 billion and seem to assure a
cover*

continuance

This

these

payments.

general

reasoning, " of
not be applied to in¬

greater

velocity' of
money
as
by
the
government
spending of tax revenue. We can

course,

stimulated

dividual companies. The earnings

siderably

sure

that

all

this

revenue

can

some

1951

will

than

off

the

con¬

13.7%

estimated

will be spent, and as it is spent
average but the higher
money.
Brit¬ aspects of money.
...
In its
earnings of others should tend to
vigorously attacked later stages it involved a transi- ; personal incomes' will continue
plain why inflation did not be¬ the conventional
to mount, even in spite of higher
compensate for
the
inroads
of
gold standard in tion from the tangible (gold coin)
come significant in the
taxes and lower profit margins.
'30s, but the '20s because it obstructed the to
personal tax levies. ; -i
intangible (gold certificates ex¬
the favorite prescription that "the
With this obvious development Therefore, we may conclude from
economic adjustments which had changeable for gold held in the
best preventive and cure of infla¬
we
might readily conclude that the apparently reasonable tax es¬
to be made, in part, at least, by Treasury)
and ultimately "from
tion is increased production" can¬
timates of the House Ways and
virtue of their mistake in going asset money to debt money." (C. R. personal consumption expendi¬
not be applied with as much force
Means Committee that the tax
tures will continue to rise. This be¬
back
to
the
par
of exchange; Whittlesey, Money and Banking,
today when we are already press¬
lief, however, will be refuted by bite will not cut overall corporate
namely, $4.86.
As a result of 1948, page 25.)
ing the limits of our productive World War
profits to such
an
extent that
many observers upon the basis that
I, England had be¬
capacity.
We have therefore to come' a
(5) Similarity of bank notes and there will.not be a sufficient quan¬ 1950 dividend payments are in
heavy debtor country and
demand deposffcs. The same author
rely in some measure on more revaluation at the
tity of consumers' goods and serv¬ jeopardy of being reduced, and
prewar parity
maintains
that
the
government direction of our eco¬
identity
of ices to go around; the
military de¬ that retained earnings will add
proved to be a painfully defla¬
nomic life, and this atmosphere is
notes and checks should be recog¬
mand- will necessitate sharp cut¬ materially to Corporate finances.
tionary process.
Within a year
npt a healthy ione.
Keynesian after his powerful plea that the nized, viz.: checks are money. backs. This, of course, might be
conceptions of depression financ¬ world return to the gold stand¬ The implication of this assump¬ true and would probably be most
tion are far-reaching.
ing are still capable of being mis¬
evident in-the steel- allocations.
ard, in 1922 John Maynard Keynes

,'The availability of unused

ductive

resources

pro¬

help to

may

ex¬

inconvertible paper
ish

writers

Roach Executive V-P

applied in these times when an
uhcontrollable inflation is not only
possible but is actually
ening reality.

threat¬

started

called

calling gold names.
He
(6) Monetary function usurped.
gold "a barbaric relic" in The view is widely held that com¬

his

Monetary Reform, 1923 (see
also "Aura Sacri-Fames," in Trea¬
''Inflation
is
not
synonymous tise,
1930).
Another influential
With rising prices. It is a condi¬ British economist, D. H. Robert¬
tion in which the supply and use son, in the 1920 edition of his

(Expenditures)

money

are

book

Money, wrote in Aliceser¬
in-Wonderland
style about the
vices to be bought at a given Bradburys (Treasury notes), tell¬
price level—in which the balance ing gold where to "head in," and
or
equilibrium
of
money
and he related stories about the glass
goods causes prices to rise.
As eye
in South Africa and stone
greater

than

the goods and

onp writer has put it: inflation is
'Statement
ence

the

of " Dr.

Bell

before

Confer¬

Monetary, Fiscal, and Credit

Policies of the United States in the Pres¬
World Crisis, under the

ent

the

auspices

Economists'

Monetary
-

Policy,

National

Committee

Washington,

1851.

May

10,

mercial banks have "usurped" the

monetary function which belongs
to

government!

the

this is::

(7)

■

tinguished

debt

money

prominent and dis¬

economist

Slichter

has

Prof.

books
trade

and

articles—so

they have
of

the

much

critics

the

gold

expanded about
25% since 1945, an*l the military
program is not as great as it was in

KANSAS CITY, Mo.—Cornelius

Furthermore, there

Roach has been appointed Execu¬
tive Vice-President of Waddell &

is not the heavy demand for steel

Reed, Inc., 1012 Baltimore Avenue.

War II.

the construction of ships, both
merchant and naval, as there was

H. T. Birr

asserted

that government

incur

become stock-in-

Of Waddell & Reed

ca¬

pacity has been

during World War II. There will,
of course, be shortages here and
debt, rather than there but the
point to be made is
private debt, provides the best
that a vast quantity of consumer
possible cover fdr'ihoftey' (Amer¬
.items will continue* to be avail¬
ican
Economic Association,
Pa¬ able under the
Sumner

money on the Island of Uap with
approval.
These- two latter ex¬
pers and Proceedings, May, 1950)
amples have been cited numerous
and the Federal Government must
times
by American authors in

that

must be remembered that steel

Paralleling
■;'yy'v!'• / .0' 'V;V World

Government

collateral.

However, even in this respect it

least $30

cumulative

deficit

billion over the next 30

Continued

page

present program.
Corporate sales, therefore will

expand in 1951. A 25% to 30%
.expansion in dollar voliime would
appear

to be

tation when it

reasonable expec¬

Trip

To East Coast
....

SAN FRANCISCO, Calif.—H. T.

Birr, Jr., President of First Cali¬
fornia Company, 300

Montgomery
a
trip East,
stopping at Chicago, arid will visit
New York City for about three
Street,

is considered that weeks.

has

left

for

Volume 173

Number 5014

The Commercial and Financial Chronicle

Gold Situation
Bank

ojf New York

about

gold markets; the behavior of world gold production, and the
an increase in price of
gold. Holds outflow of gold
beneficial all around, and should not

cur¬

Contends, also, despite high
gold premiums and large amount of gold hoarding, U. S. should
not alter gold
price. Foresees gradual trend to interconvertibility of currencies through larger foreign gold holdings.
The problem

diversified

of gold, in

aspects

and

forms, has been with

program.

all its

changing
for

lis

many years that it has

peren¬

the

entire

fi¬

has

ll an c e

been the sub¬

ject of

ex¬

tensive

and

;

continuous

public discus¬

sion. It would
be

presump¬

Knoke

tuous for me,
therefore,
in

brief speech on

gold, to attempt

the

encompass

say

the

countries,,, and

declines

have

course

field

whole

anything especially novel.

What I shall do is to focus merely
on certain selected aspects of the

the

1950

occurred

year.

sinqe#the
Viewed against

previously
heavy gold imports of this coun¬
try, a revel-sal of this magnitude
in the flow of gold must be re¬
garded as a special event worthy
of examination.

"/■;?

the world. From February 1, 1934,

following,. the

valuation

the

end

1941,

for

de¬
the

example,

our

dollar,

monetary gold stock jumped from
about $7.0 billion to no less than

$22.7 billion. This heavy net drain
of gold to the United States was
a

reflection of

large export

sur¬

plus of goods and services, coupled
with heavy net imports of

capital
during
the late thirties which
current world gold situation that
were associated with political and
seem
to me to be of particular
financial instability abroad. Our
interest. More specifically, I shall
continuing export surplus through¬
touch on the following matters:the

the

of much discussion and controver¬

countries; the diversion of gold
private hoards through the
free gold markets of the world;
the behavior of world gold pro¬
duction; and the question of an
increase in the price of gold.
into

It need

hardly be emphasized at
that the United States
special interest in gold and

the

outset

has

sy;

might refer, however, to
strong and persisting world

one

the

demand
duce

American mass-pro¬

for

products,

technological

country,

our

the rapid rate' of
advance
in
this

relative

self-suffi¬

ciency based on the bounties of
nature, and our high though de¬
clining tariffs.
v
,

in any

developments affecting its
movement,
supply,
distribution
or price.
One general reason for

During the

war

years

1945, however; there was

1942 to
a tem¬

reversal in the movement

porary
interest lies clearly in the fact
of gold,
that for many years we have been

our

and our gold stock declined
by about $2.7 billion; foreign coun¬
by far the largest gold holder in tries also built up their dollar
the world and, until recently at
balances by some $4.1 billion. That
least, also the largest gold buyer. foreign countries were enabled to
At the end of 1950, for example,
build up their gold and dollar re¬
our
gold stock amounted to $22.8 serves at a time when our export
billion

less

than

two-

thirds of the gold reserves of the

entire
As

world

excluding

Russia.

most

important

trading
in
the

the

investing

and

country

world economy, moreover, we are

vitally concerned about the ade¬
of

quacy

foreign

gold

reserves,

since the volume of such reserves
has
of

direct bearing

trade

and

the type

exchange

policies

countries pursue.
The heavy drain of gold to the
United ; States
during the past
foreign

which

surplus

was

wartime

greatly inflated

developments was basi¬

cally attributable to the fact that
during these years the bulk of our
exports
Lease

was

aid,

financed by Lend-

whereas

paid in

enlarged
troop ex¬

cash for the bulk of our

imports and our heavy

penditures abroad.
After the war the movement of
gold resumed its previous pattern.
Despite large-scale United States
Government grants and loans for

reconstruction abroad
twenty years has, in fact, directly and despite rigid direct controls
or
indirectly,
been
a
primary on dollar expenditures, foreign
cause of
the rigid direct import
countries had to drawn down their
controls, exchange licensing poli¬
gold and dollar holdings in the
relief

and

whole have thus been able to

and

Canada.

The

promotion

reasons

for

these

striking

changes are not difficult to find.

Briefly, they reflect a remarkable
decline since Sept., 1949 in our

trade. To

degree the recent
in foreign reserve

improvement
positions has
sible

■

multilateral

freer

some

already made
modest

some

progress

plus, and with a sizable net out¬
flow
of private capital.
In the
calendar year 1950, for example,
our
export surplus declined to
$2.2

billion

compared

with $6.2

billion in

1949, whereas our gov¬
ernment foreign aid declined only

$4.3 billion from $5.9 billion in
the
previous year, and private

For this reason,

world, notably in the Middle and
.

Far East

where trading charac¬
teristically, takes place at price3

prices, political
instability abroad, and flights from
foreign currencies. Although the
problem of external transactions
in

gold at premium prices is -by
means
a new one,
in recent
mionths it appears to have become
more
acute, and an increasing
proportion of newly-mined gold
and even of gold from official
stocks seems tb be finding its way
iftto private hoards through the
no

mechanism of free
As

far

back

international

markets.

June,

traffic

gold 1 at

premium prices had assumed siich
magnitude as to induce the In¬
ternational Monetary Fund in' that
a

month to issue

statement to its

members deprecating such traffic

gold

and because of the
stock which we still

possess, we
look
upon

run

interests.

Free

and

hoards of gold that

Black

Gold

should be

Fund made it clear,

however, that

Continued

page

small part may

bling them to increase
from us.

LIFE

Notice is

hereby given that in accordance with the provisions of the

Insurance Law of the State of New York the Board of Directors of The

Equitable Life Assurance Society of the United States has nominated the
following named persons as candidates for election as Directors of said
Society:
/•
ROBERT E.

BLUM, Brooklyn, N. Y.
Vice-President and Secretary,

v,:;;

prices of imported

Abraham & Straus.

RALPH

BUDD, Chicago, Illinois.
Chairman, Chicago Transit Authority,

•;

H. BEACH CARPENTER, New York, N.Y.
Vice-President and General Counsel,
The American

Sugar Refining Company.

J. REUBEN CLARK, Jr., Salt Lake City, Utah.
Counsellor-at-Law. Vice-President and Director,
■.
Utah First National Bank.

.vc'Cy.

R. STEWART

KILBORNE, New York, N.Y.
President, William Skinner & Sons.
'' '

;

JOHN C. KNOX, New York, N.Y.
Chief Judge, United States District Court
for the Southern District of New York.
GEORGE V. MCLAUGHLIN,

Brooklyn, N.Y.

Chairman, Executive Committee,
Manufacturers Trust

Company.

WILLIAM ROBERTS, New York, N.Y.
Counsellor-at-Law.

1949, and to some extent the
devaluations, which tended to re¬
to

STATES

Notice of Nomination of Directors

the

UNITED

•

our

foreign countries to
replace American goods by goods
from other sources of supply; and
the tightening of direct restric¬
tions against American goods by
a
number of foreign countries,
notably the sterling area, in the
latter half of 1949 had also the
same
effect. The continuing re¬
covery in foreign and especially
European production likewise
made it possible for foreign coun¬
tries increasingly to satisfy their
needs from domestic sources and
from trade with each other. Such
expansion as occurred in our im¬
ports primarily reflected the recovery
in United States industrial activity from the recession

ative

SOCIETY

393 Seventh Avenue, New York 1, N.Y.

for

duce

QUIT ABLE

ASSURANCE

THE

relatively more expensive, con¬
tributed to some extent to a ten¬
dency

their dol¬

purchase gold

export surplus
dropped so sharply since Sept.,
1949? Until the outbreak of the
Korean war,
the declind, which
was
attributable more to a fall
in our exports than to a rise in our
imports, was due to a number of
factors. The devaluations, for exr
ample, by making American goods
has

Why

THE

EORDYCE B. ST. JOHN, New York, N.Y.

Surgeon.

domestic

SAMUEL A. WELLDON, New York, N. Y.

Director, The First National Bank of
the

City of New York.

HENRY G. WOOD, New

York, N. Y.

Secretary of the Society.
PHILIP YOUNG, New

York, N.Y.

Dean, Graduate School of Business,
Columbia

University.

A certificate of nomination of the said candidates has been
with the Insurance

The annual election of Directors of The
New York 1,

duly filed

Department of the State of New York.

of the United States will be held

N. Y.,

Equitable Life Assurance Society

its Home Office, 393 Seventh Avenue,

December 5, 1951, from 10 o'clock

a.m. to

o'clock p.m., and at said election twelve Directors, constituting one
Class of the Board of Directors, are to be elected for a term of three years

from January 1, 1952. Policyholders whose policies or contracts are in
force on the date of. the election and have been in force at least one year

prior thereto are entitled to vote in person or by proxy or by mail.
HENRY G. WOOD, Secretary.

May 24/1951.

•

- •

con¬

centrated in official reserves. The

Markets

The
sceond problem which
I
capital exports rose somewhat to
wish to discuss relates to the di$1.1 billion (of which a relatively

lar balances and to

1947 the.

and requesting corrective action,
The Fund pointed out that such
might well afford to transactions tend to undermine
further losses with official gold prices and world ex¬
equanimity and even satisfaction change stability, and that they
from the viewpoint of our longer
involve a wasteful diversion into

huge

?.-* '

pos¬

in
directions. But clearly the
export surplus, coupled with con¬
tinuing large-scale United States degree of improvement has still
Government foreign aid on a scale a long way to go before any gen¬
considerably in excess of that sur¬ uine progress can be achieved.

rel¬
goods. Since
mid-1950 the factors reducing our
cies and
other such restrictive
early postwar years in financing export surplus have been greatly
practices in foreign countries that critically needed imports of goods
reinforced and indeed ov^r-snaahave so
adversely affected our
and services for which the United owed
by the expansionist effects of
own foreign trade and world trade
States
was
the only important
post-Korean developments, nota¬
in general. As the leading cham¬
source of supply.. As a result, from
bly the increased domestic arma¬
pion of an orderly international the end of 1945 to August 1949 our
ment expenditures and inventory
pattern of exchange rates, more¬ gold stock rose by almost $5 bil¬
accumulation, on the volume and
over, we have an obvious concern
lion to a new peak of nearly $25
prices of our imports. As a
with the level of foreign gold
billion, and foreign dollar balances our imports have risen markedly,
prices relative to our own.
were
also drawn down by $1.6 resulting in further declines in our
The Outflow of Gold
billion. The bulk of these foreign
export surplus.
The most interesting develop¬ gold and dollar losses occurred in
Gold Outflow and Foreign Aid
ment in the general world gold 1946 and 1947; thereafter the rate
An obvious question might be
picture during the past year and of loss was cut dpwn sharply with
the
a half has been the sharp rever¬
improvement in production raised: if foreign countries are now
sal in the direction of the inter¬ abroad, the abatement of the more accumulating monetary
reserves
national movement of gold. From urgent postwar; backlogs of de¬ in substantial volume, why don t
a peak of $24.8 billion in August
mand, and the diminution in in¬ we reduce our foreign aid pro¬
1949, our gold stock declined to)' flationary pressijres—all of which gram and .thereby cut down or
'/
}
'
iwere greatly aided by the Euro¬ eliminate our losses of gold and
♦An address by Mr. Knoke at the An¬
dollars? In the case of Great Brit¬
nual Meeting of the Bankers' Association' pean Recovery Program.
for
Foreign
Trade, Colorado
Springs,? ;• The currency! realignments of ain," We'" have, irt fact
suspended
Colo., May 15, 1951.
September 1949'haVe ushered in fnrthpr EGA aid since the begin¬
«

version of gold to the various free
and black gold markets of the

balances

have represented
speculative funds). In short, gov¬
ernment foreign aid and private
capital outflows have provided
foreign countries with more dol¬
out
the
inte.rwar \ period
as
a
lars
than they have needed to
reversal in the direction of
whole was the result of many fac¬
finance their import surpluses with
movement of gold between
tors which have been the subject
the United States, thereby' ena¬
United
States
and f oreign

the

■J*:

amount

these

Since 1933, with relatively few
exceptions, the United States has
gained
gold
in
embarrassingly
large quantities from the rest of

immediately

same

necessary
preliminary; to
the
substantial part of the achievement of the basic objec¬
tives
of
our
postwar foreign eco¬
gold and dollars which they lost
to the United States in the early nomic policies, namely the sub¬
stantial
relaxation
of foreign direct
postwar years. Although this im¬
provement was widespread, the trade and exchange controls* and
most striking gains in gold and especially the discriminatory as¬
dollar holdings, amounting to well pects of those controls; the res¬
toration of general interconvertover half of the total, have been
of
registered by the United Kingdom ibility
currencies; and the
as a

further

the

recoup

netf gold sales to

foreign

the background of the

result

end

turn

field

by the

status

hardy

Werner

billion

long since
the
acquired

nial. Probably
no other topic

$22.8

ning of this year. But' many otjher
countries and areas that have been

well in excess of official
gold
by with the result that this alterna¬ values.-t These * ■ premium
prices,
tive
is
not
during
open to us, even if we which have
obviously tended to
this period. Further gold and dol¬ wished to use it. What tends to be
pull gold, especially newly-mined
lar losses by the Uuited States frequently overlooked,
moreover, gold; on to these markets, have
have occurred since then. In ad¬ is the fact that the recent and
primarily reflected a strong priv¬
dition, foreign countries
added present accumulation of gold and ate
hoarding demand, indicative
approximately
$400
million
of dollar reserves by foreign coun¬ of
such
factors
as
speculative
newly-mined gold to their re¬ tries as a group is fundamentally anticipations of increases in for¬
in our interests in that it is a
serves in 1950. Foreign countries
eign official gold
increase their dollar

question of

to certain countries is

international

our

until the end of 1950, as already gaining reserves from us,
notably
noted, the United States gold stocx Canada and Latin America, are
declined by $2 billion; foreign not recipients of aid from us, or
countries, moreover, were able to at least on any significant scale,*

Federal Reserve official discusses
leading aspects of current
gold situation, such as reversal of direction of gold movement
of U. S.; diversion of
gold into private hoards through free

tail foreign economic aid

hew phase in

payments pattern. From that date

By L. WERNER KNOKE*

Vice-President, Federal Reserve

(2153)

The Commercial and Financial Chronicle

(2154)

and the four insured non-member

listed

banks

News About Banks

30 stood at approximately $3,000,-

of The Ma-

000; thus the total capital funds of

land Trust Company, Albion, N..Y.;

the bank (excluding reserves) will
be increased from $28,000,000 to
$33,000,000. It is stated that it is
the present intention of the board
to declare, at its* July meeting, a

branch to be known

semi-annual

charter

REVISED

CAPITALIZATIONS

Trust

Western

York, and branches

were es-

fice.

Company
the

Albert
for

Wiggin, whose name
years was linked in
capacity
with
the

many

official

ail

Chase

National

York, of which he
of

the

was

when

Board

Bank,

New

Chairman
retired

since

1918,

there

are>located

Commonwealth

the

ton,

later

Examiner

Bank

District

after

and

Bank of Bos¬

Assistant

became

Boston

the

serving

official capacity with one or two
Boston
banks Mr. Wiggin

other

from that

city to accept the
Vice-Presidency of the National
came

Park Bank of New York.

In not¬

ing this the "Wall Street Journal"
of May 22 added in part:
1; "After five years with that in¬
was appointed ViceChase National. He

stitution, he
President

President

became

tional

still

While

1930.

Park

organize

execu¬

served

once

three

direc¬

of the

Vice-President

made

was

member

Co.,

Trust

Bankers

committee.

tive

helped

New

City banks at the same time.
Wiggin joined Chase

York

A "When Mr.

National, it was largely a '.'bankers'
bank." While continuing to expand
this nation-wide service to banks,
he also greatly increased the in¬
stitution's
commercial
banking

bank's growth

The

business.

/A//;t,

was

accomplished chiefly through mer¬
gers with other institutions. When
merged
with
Equitable
1930, the resulting bank
the largest in the world/'>'

Was

office.

known

available

free

TravelExhibit- at

the

6th

4th

With

the

ings of New York located
22nd

Avenue at

Street.

to go—and

through July,
■"/

An enlarged and redesigned dis¬

the public

the

office

upon

Trust

June

22,

Stating:

Incorporation

will increase the

adopted,

authorized capi¬

tal

stock of the corporation from
$5,000,000,
consisting
of
50,000
shares, par $100 each, to $6,250,000
consisting of 250,000 shares, par
value $25 each, 200,000 of which

four

the

shares will be exchanged for

new

50,000

$100

such

value

par

outstanding

now

new

main

for each

shs.

present

outstanding; and
par $20) was reported by the New
(2) a proposed resolution granting
York State Banking Department
the stockholders, appearing of recin the May 4 "Weekly Bulletin"
orcj 0n June 14, the right to subMay 21 ''V;/ZXA /
*
*
*
*
scribe for and purchase at $33 per

The

Dime

Orville P.«Jack, Executive VicePresident of The Mid-City Trust

Savings Bank of Brooklyn, N. Y.,
it

announced

was

by George/C.
Johnson, President of the 91-yearold

bank.

May 21

Co., of Plainfield, N, J., has been
elected

the third

was

directors.

anniversary of establishment of
the display; it is known as the
Library of Homes and Home Buy¬
Exhibition

ers

and

Institute.

than

the

succeeds

stated

was

advices

the

late

said that Mr. Jack has

xix

1929.

elected Treasurer in 1938, and,

was

Executive Vice-President in 1949.

the past three years,
according to
Mr,.
Johnson. ,v Occupying
5,000

attended

the

$100

American

Insti¬

shareholders

The

mercial National

of The

Com¬

and

Trust

Bank

Company of New York, at a spe¬
cial meeting Ma,y

23, approved the
plan and agreement to merge into
Bankers Trust Company of New
York.

The

effective

merger

will

become

of May 28,

under the
name of Bankers Trust Company.
Details of the merger plans were
given in

our

April 26 issue,

page

1738.
$

square

feet

bank

Trust

/John

;

McWilliam

O'Callaghan

and

have

been

appointed
Assistant Vice-Presi¬
dents, and that Charles C. Lehing
has been appointed Assistant Sec¬
retaryMessrs, McWilliam
and
O'Callaghan formerly
ant

were

Assist¬

Secretaries. /

off the rotunda
DeKalb

virtually
oh

arise

any

home

Avenue

The National City Bank of New

brought its overseas branch
system to 54 on May 21 with the

'^opening of
■ness

area

unit in the busi-

a new

Santurce, suburb of

'San Juan, Puerto Rico.

has

now

seven

The bank

branches

the

Island

under the supervision of
Webster E. Pullen, Resident ViceThe organization has

President.
been

represented

in Puerto

Rico

nine

nancing and home ownership. De¬
scribed by some as "a home buy¬
department store." the Library

News"

Munsick

fo"vZ
Nx

of Homes pictures the current of¬

-Z/;#

$500,000 has been

made to the capital of the MahoNational

town, Ohio,

Bank

Youngs-

result of which

the capital is now (as of April 25)

$1,500,000 against $1,000,000 here¬
tofore, the addition was brought

a/-' /'' //'
*

issue

W. Roehrs

into

The Marine Trust
Company
Buffalo, N. Y.,*a state banking
institution, under the title of The
of

Marine Trust Company of Western
New York," effective
April 27. The

Company

and

operating

>was

three branches at the time of the

The Board of Governors

of the Federal Reserve

System

an¬

April 28 that the for¬

head office at Lockport, and
Barker, Middleport,

me^

its branches at
and

Wilson

branches

will

The

operated

Marine

Company of Western
at Buffalo.

The

New

•

Lewis

v3^%-3i/2%-3%% First Closed Mortgage

2.00%-3.50%

;

wii-

•

Williams,

Chairman,

Cleveland,

May

Ohio,-announced

15 that

bank,

the

directors

meeting

of the

May

recommended to the shareholders
an

increase

funds.

in^capitalstock which
jjjj*
$4>000,000 to the capital
The recommendation of the

board will be voted

meeting

June

The

the

on at a special
shareholders on

officers

*5?
increase would
shares to be sold at

stated

$32

that

125,000:

share,
increasing the 625,000 shares now
outstanding to 750,000 shares. If
a

proposal is approved by the
shareholders, warrants will be is¬

York,

sued

the

authorizing them to purchase

new

.share
All

for

basis

each

five

one

shares not taken by

new

exercise

warrants

will

Upon

*
Request

!
;

n "

Company
new york 4, n. y. *

J
!

of additional

Bank

approval

the

Comptroller

of the

Currency, it was announced
May 9 by Fred F. Florence,

President.
000

•allocated

new

The

increased $4,000,-

represented

proceeds

the

sale of 100,000 shares of additional
at $40 per share, and was
equally divided between capital
surpius—capital having been

and

raised from $16,000,000 to $18,000,000 and surplus from $16,500,000 to

the directors on May 9,
dividend of 19 cents
record

ize(j

now

the

surplus from the Gen¬
account

which

effect

proposal will be to

the

$2,333,000.

The

increase the capital from $1.0,000,000 to $12,000,000 and the
surplus
from $15,000,000 to

$18,000,000. The

reported

the

previously

was

"Chronicle"

May 17.

Bank

Capital Funds

i Up

Billion in 1950

Deposits and Loans Large
Only one item in the recapitu¬
lation of the condensed statements
of the banks of the nation, appear¬

ing

Rand

the

first

Bankers

smaller at

was

edition

1951

McNally's

the

Direc¬
close* of

total holdings of which/decreased
$5-6 billion to $73.26 billion. Both
loans

and

deposits

increased

ap¬

proximately $11 billion; cash and
exchange were up $41/2 billion,
other

•and

Capital

securities

$21/2

billion.

increased

accounts

near¬

billion, approximately half
represented transfers to

(000's omittedlCash

Govt.

Other
Loans

sight exch.

discounts-

Capital

12-31-50

12-31-49

37.042,-311

14,829,982

78,876,187
12,599,173

61,289,653

50,552,131

Total

2,564,353

2,208,633

193,647,681

180,978,440

3,662,704

3.542,493

;

Surplus
Undivid.

profits

Total cap.

6,690,730

3,686,581

3,346,810

14,538,093

13,580,033

177,412,323

166,121.853

accts..

Deposits
liabilities

Grand

7,188,803
&

reserves

Other

state¬

41,701,517
73,262,176

secur..

securities
&

Other resources

1,697,265

1,276.554

193,647,681

180,378,440

Total—.

May 21,

ation:

was

author-

12 31'50

National

banks

State banks & trust companies
Frivate

Other

outstanding.

The increase in

noted

was

columns April 19,
May 3, page 1867.

these

banks

...

....

banking

1650, and

page

Total

institutions—

banks

National

bank

State bank &

branches

12 31'49

4.961

4.981

9,594

9,616

120

-.120

J. 86

14,754

14,803

2,283

2,128

trust company

blanches

—

■

2,129'

2,851
-

Other

branches

Raymond J. Morfa, Chairman of
the board and director of the Mis¬

souri-Kansas-Texas Railroad

Total

Co.,

branches

J Grand

total

5,224

4,933

19,978

19/746

wa®

.e*ef;ted a
of ^ Rq~
publlc National Bank on May 8, Z. A.
Lippincott With '
£ was announced by Mr. Florence,
°
he banb- ^
Scbirmer, Atherton
(Special to The Financial Chronicle)
1Q^r-^?rfa movvf-d to, D?UaS m:
JSf
*ob°wing his election as
PORTLAND, Maine—Zeruah M.
Chairman of the M-K-T board.
r

Lippincott has become associated
with
The First National Bank of Mid-

April 26, reported

capital

from

of $600,000,
d,^rknnnrk increased
J
$500,000 by a stock dividend

Schirmer, Atherton & Co.,-10
Congress Square. She was former¬
ly Assistant Treasurer for Call K.
Ross

Co., Inc.

$100,000.

With Security Assoc.

was

monthly
per share,

capital

Reserve

outside1 of

the 900,000 shares of stock

be added to
eral

Dillon & Co.

man,

payable June 1 to stockholders of

land» Texas,

April 30, last,

1933,

Undivided profits of
Following are comparative fig¬
bank are in excess of $4,700,000.
ures covering the numbers of va¬
Rights to purchase the new stock
rious categories of banks in oper¬
expired May 7. At a meeting of

shares will be

follows:

in¬

$18,500,000.

$2,000,000 to
capital stock and $2,000,000 to surplus. An additional $1,000,000 will
as

since

the

service in the U. S. Navy Depart¬
ment. His association with East¬

of which

result of the $4,000,000 mcrease in capital and surplus which
became effective on May 8, following

Texas

Chicago, and

of the -Republic surplus. The comparative
of Dallas, Texas,
ment follows:

capital derived from

the sale of the

fetI"ow„ inuex.c^S 0/J5nnn'-°°

the

a group of underwriters headed by Merrill, Turben
J?.
(tVnnn nnn
&
Co. of Cleveland. TV,„
The $4,000,000

Revenue Bonds

due 1953-1999

street

Sec¬

purchased by

Housing Authority of the
City of Altoona, Pennsylvania

30 broad

Assistant

a?d^!dneJ
5' Co1ngd.®n'
Pres;dent
of The National
City Bank of

the

$1,200,000

Assistant Treasurer.

held.

qAllen

directors

Auditor. Al¬

• •

Capital funds

Trust

latter, it is added,

TAX EXEMPT From All Federal
Income Taxes

Descriptive Circulars Available

the

department.

been

vestment business in

ly $1

stock,

new

stock

Bank

Company, of Lockport,
N. Y., with common
capital stock
of $500,000, was
merged with and

nounced

that day the

and Trust

merger.

of the Morris

cZ! ot°AlorHsZwZ

Vernon Henry

fred

"Eve-

George

14'

/:V/'

National

Yield

President

Trust

appointment
1

Niagara County

Trust

Newarl

Mav

J., announced

new

about by tbe sale of

National

-Long Island counties. retary and Johnston Stewart, Jr.

Niagara County National Bank
York

According to the

question that may

ers'

//■A//

Banking.

buying, home fi¬

ferings of 77 builders of home developments and apartment houses

Mid-City Trust
is observing its 25th anniversary
this year, said the "News."

and Fulton Street, the exhibit has
been planned to supply answers

Company of New York announces
Franklin

just

in the four

The Corn Exchange Bank

:that

the

tute

has

Co., 135

as manager

than at the beginning.
That
//*''A Zv/Z item was U. S. Government Bonds,

investment

Mr,' Harmon

Street,

1950

;

An addition of

ning

their

value capital stock then tory,

par

held.
'Av/•//>'/.

been with

the trust company since

150,000

for earh share of the present

"Evening

"which^further

share the remaining 50,000 shares
of such new $25 par value capital
stock
in the proportion of
one

in Plainfield

Newark
wcm*

News"* of" May

have visited the exhibit in

persons

uary,

is. sponsored

of the board

Luther S. Ayer, who died in Jan¬

jointly by The Dime Savings Bank
and the Long Island Home Build¬
ers

President

Eastman, Dillon

the basis

formerly with Shields'&
Company, has become associated
South La Salle

Harmon

mon,

with

* *

CHICAGO, 111.—Robert R. Har¬

stock-

set forth

A proposed amendment to

(1)

consisting of 628,000
shares
(par $20) to $13,460,000
consisting of 673,000 shares (par
$20). A further increase (April
28) in the capital from $13,460,000

$15,424,000 (in 771,200 shares of

the

the shareholders

circular to

Robert

acted

to be

holders, the proposals
in

Company

are

Articles

of Western New York from

pany

Central

company/which,

March

-A/.; f

the

$12,560,000,

■

Plans to increase the capital of

the

columns

bank

$545,000,000.

Z/.Z

mer¬

1255, action was taken on
27 towards increasing the
capital of the Marine Trust Com¬

play of the houses and apartments
erected by more than 75
Long
Island home builders, and includ¬
ing the first public showing of 22
prize-winning house plans, was
opened to

these

The

year.

to Which appeared

April

supplied by the bank. The Travel
Show is free to the public and will
tontinue

page

folders

travel

also

how much it will cost

obtainable

are

merger the name of

Following these

plans

gers,

to where to go—how

Company of Buffalo had beeffective April 21 and that

New York.

help of airlines, railroads, bus and

present dividend

Cincinnati, Ohio,

with the Marine

the latter had been changed to the
Marine Trust Company of Western

ship lines suggestions for summer

holidays

page

$1.60

reported deposits on Dec. 31, 1950,
of

;

was

following the

Sav¬

office.

the

come

Main Office of the Bank for

rate

Eastman

Company,

The

of Niagara Falls

Annual

$1.80

rate

and would apply also to the

branch

Mgr. For
Dillon, Cgo.

This

Nov.

the

stated that the merger
of the Power City Trust Company
"Trust

the

cents

stock.

Y.;

Harmon Inv.

cents

new

issue of April 26,

our

and

would

of 90

dividend

Thursday, May 24, 1951

payable 45 cents on Aug. 1

year

Trust

Y.;

First Trust

1766, it

being made

Vacation

First

The

State Trust

Tonawanda,

Tonawanda,v N.

trips to nearby

State Trust Com¬

branch to be known

such places as Paris or

Albion of¬

branch to be known

North

pany,

Juan,

1 *

Mediterranean

Chase

Trust in

Information

resorts

the

the Board

with the Na¬

Bank,

which he later
tor and

Chase

Chairman of

and

1911

San J

Marine Mid-

Medina Trust Company, Me¬

Medina office.

branches

other

Arecibo, Bayamon, Caguas, Mayaguez, and Ponce. -Ernesto Lopez
has been appointed Acting Man¬
ager of the new Santurce branch.

1933, died on May 21 at his home
in Greenwich, Conn. He was 83
years of age.
Born in Medfield,
Mass., Mr. Wiggin's early banking
experience began as a clerk in

and

locations

former

banks listed:

dina, N. Y.;
;

title

New

of the

Bankers

and

ETC.

and

rine

tablished

NEW BRANCHES

NEW OFFICERS,

undivided profits account on April

under

the

CONSOLIDATIONS

below merged

A stock dividend of

served

increase

(Special to The Financial Chronicle)

$250,000 has

the

capital

WINTER

PARK,

the Alamo National Bank of San

Antonio, Texas, from $1,500,000 to

sociates,

$1,750,000, effective April 26.

land Avenue.

King is

now

Fla.—Merrill

with Security As¬

137-139

East

New

Eng¬

Volume

••

173

Number 5014

The Commercial and Financial Chronicle

:• "by faulteinzig

v;% ;

■;^,,r,:.\

Commenting

proposal of British Labor Government To grant

higher pensions
•

;

and

men

women

continuing to work after

ing at facilitating the continuation of work by old
people if they
"wish to continue to work after
having reached the age limit;' It is
not enough to
try to induce them to. work if their services are
refused," Before very long arrangements are
likely to be completed
to ensure that
nobody should be dismissed if he has reached the
retiring

retirement age, Dr.
Einzig points out heavy burden/of
increasing number of the aged has not been offset,' as ex¬
pected, by technological advances and
labor-saving devices,^v?;-'r£'i
y «
J
due to declining efforts of workers.
* j

age* provided that he is otherwise capable
of-carrying on;
expected that'work may have to be
reorganized to enable
older people to work shorter shifts.
This involves many problems
which will have to be worked out. What
matters is that a begin¬
ning has been made.
"
1
■'
;

ft*is

New Officers

LONDON,' Eng.—The

age limit at which old people are enretire from work
figured prominently in recent'-discus-%
in the British
Parliament. It presents an economic and social
problem of considerable
importance.
In the course of his Budget

sions
'

speecir

on April 10 .jUixahceilor Gaixskeii.
pointed out that the proportion of old oeonle
to the

population

yjr
I
•

WBglp

'r 1■

■

been

the fonii ' of higher

•

and

whj3

women

old

are

age

pensions, to

;

ex-

ij|jir,'j f-°r

CTrjfBroMBIi''
r

age

men and 6^ years for women.

65
;;

years y

£..',

This announcement- 'came

as a shock to V;
many r quarters, for until then it was .widely; if 4;
not generally assumed that, as a result of in•

<men

prepared-'" to work- after

having attained the retiring;

MmzMlmi■■■.."

and

rising

Pecie^ to continue to-rise,%and with ritds increasing the burden of their-maintenance, after
'their retirement by the rest of the community.
He' therefore put forward; a proposal; under
which financial; inducement would bje given, in

has

/greased productivity, ;t would be. possible1 to

C k. V; lower gradually the
retiring age, so as to. en-,
.Dr. Paul Einzi*
/-y. able people. to
relinquish work before they %

*;'iV,v..have
rest.

grown too old to enjoy their well-earned

Instead .it now appears that the
trend points to the opposite
is; true, under political pressure the Government
greatly modified its original proposal.; But the

direction, vlt

principle that it is f"

necessary and essential for old people to continue to work
longer f
than hitherto has been
upheld. '

.The facts of population statistics a r e indeed inescapable.
Owing to the improvement of general conditions of health the: ;
•-

average expectations of life
a

generation

through

earlier.

third

are

now

Barring

world

much

longer than they were
relapse of civilization

general

this progress is
likely to continue/
Unless the
growing number of old people contribute toward the
productive effort of their
communities, the increasing burden of V
their maintenance will fall on
the productive section of the
population.
Since _with the general
improvement of health conditions
old people are now

than

physically and mentally in a more fit condition
a generation
earlier; many of them are in a

they had been
position to remain
retiring

age.

This
for

the

worker

•

work

■/. '

problem would

for

many

not

scription

the

have

school-leaving

arisen

present,

it not

were

useless

age

expect

generation
means

from productive work. The
only labor
old people who are not too

reserves

available

the

are

old to do at least part-time or

lighter

The alternative would be for the

working population between

16 and the

retiring age to work harder
accept lower reward for their
work, in
vide

official

yy'y1. h?;--r

has'just been raised from
reinforcements from the
capable of working. Rearmament and con¬
that a large proportion of
young men are diverted
it is

years,

youngest

Work.

beyond the

years

* r y -'y-y

•

prevailing condition of over-full employment. ' For each r
out of
employment there are now at least ,10 unfilled

vacancies.. As
15' to

war

for

longer hours,

order*to

be able

to
f

pro-

for the

growing number, of old people. This truth is at last
%,
beginning to be realized, but even now the majority of the
general •,
public imagines that the problem is
simply one of .finance,->and y
that all that is needed is for

Parliament to vote increased
old.age %
pensions to enable the retired generation to live
happily forever
after. It is assumed that the
money will be-forthcoming somehow

—preferably through increasing taxation

capital and enterprise

—arid that the increased
pensions to a larger number of recipients
need not involve
Sacrifices for' thef working population.
It may
take some time before the public will
come to realize
that the

goods consumed

by the

Of the New York Stock

)

Exchange* that is. Read
about the fireworks when

retired

generation have to be deducted >,
the volume of goods available
for the working generation.'
It is helpful from the
point of view of the lealization of the
basic facts of the situation that Britain. is at
present working to

he takes over

from

July 4th.

•

thp limit of the capacity of the productive
tion.

With

the

progress

the

section of her popula-^
drive the volume of

rearmament

goods available for civilian consumption is bound to
decline gradually, and the expanded purchasing power of consumers will
bear
on
a
greatly diminished volume of goods. This
may make the
public realize that when an increase of
pensions is voted, or when
the number of
beneficiaries; increases, it must necessarily mean
that less is available to the
workers.

Although
per

technological progress;

man-hour, it is

now

increase

may

realized that there is

of the advent of the
millenium from that direction.
the wars production was

;

Wall Street

productivity

early likelihood

Kefauvered

When between

handicapped by lack of adequate mone¬
tary resources, advanced
monetary reformers claimed that, if only
that handicap could be removed
with the aid of new reform
pro¬
posals, the road would be open to comfort and
luxury for all.
Since the war most countries have
gradually increased their production to .capacity—that is to
capacity based on the existing age

limits.

And

yet

the

standard

slightly higher than before the
progress since

cial
ress

ing

handicap.

of
war.

1939 and the almost

living

This in

Bawl Street

spotlight
who don't
:

complete absence of

JOURNAL
Financed by
R. F.

,he

Order

C., of course.

copy,

seems

effort.^ The, devices

adopted

were

not

laborer-saving devices.

Read the
tions

labor-saving
r

retirement; Iri addition

Mr. Gaitskell's

budget,

about to be taken in that
direction.

to the"financial inducement'w
another

Decisions

important
are

step

imminent aim¬

revela¬
Bow

Street

Journal.

now

from

Manager, c/o Kidder,
Peabody & Co., 17
-Wall Street, New York
5, N. Y. Send check with

application.

COMING

Robert

Johnson, Circulation

in the

Sooner

SAWl STREET

d.c.

or later the
public will have to realize that, in order to
increase the standard of
-living further, or even in order to mailt--tarn it in spite of
rearmament and in spite of the.
growing propor- tion of ,old
people, it will be necessary for the old
people to defer
their complete

announced

RiAP THE

bles.,

finan¬

any

mar.

only

comparatively
spite of technological

steal will

washington,

characters

play for

that in most countries
technological prog- *•.
has been used not so
much for
producing more as for produc¬
with less

devices but
-.

Journal turns

gigantic

JUNE

8 th

The Commercial and Financial

Chronicle

Thursday, May 24, 1951

(2156)

purely statistical mechanism, not tion during this period of mate¬
a productive one.
It will not pro¬ rial shortages.
duce one pound more of any basic
Although we who are actually
material.
The scope of CMP ac¬ producing for defense don't have
tivities should be determined very all the facts, by any means, and

Peifozming Industry's Dual
lob in Present Crisis

Let's not, for instance, don't know all the answers—we
have 85% control of steel in a de¬ do know the situation in our own
fense effort that
demands only company and industry.
We also have a good idea of
15 or 20% of our total production.

carefully.

HENRY FORD, n*

Ford

President,

Motor Company

Let

Citing problems of Ford Motor Company in

Program and at

needs of National Defense

efforts to fulfill

the

time continue

the

same

Mr. Ford points out difficulties arising from
and confusion created by orders of NPA officials.

uncertainties

dangers in' such

steel

requirements over

Says all-out controls and allocations

sentatives

vised

this estimate had been

If there is any one

their

thing Amer¬

take

businessmen

ican

that

ability

pride in,
produce ci¬

agement must be cost-conscious
in its operations and take every
means
to
produce as efficiently

automolbilies
and

such

goods

hairpins

from

—

trucks.

civilian

pro¬

duction

for.

long

time.

derstand

un¬

it.

believe

strong

cuts

these

for

people

were

today: is

that

You

see

can

facts

minum

about

the

We in
couldn't

knew

in¬

lot

steel, rubber, alu¬

all

and

rials which are

the

other

vital to

mate¬

our own

production. It seems to me that
it is our obligation to make this
-

know

situation

all

which

experience

possible to those who

conducting

are

—

first-hand

from

clear

the

defense

pro¬

people who are
establishing and administering the
They

the

are

which

under

twin

these

Henry

Ford,

2nd

ment

Bear

and

picnic

Yacht

Club

Phila. inv. Women

of meeting military and ci¬
needs at one and the same
time.
But those controls should
jobs

White

the

14.

June

cocktail

party will be given on
Wednesday, June 13, at the Nicoleet Hotel, Minneapolis.
Features
for
the
day of the

outing are the golf tournament,
starting
at
9:00
a.m.;
tennis,
bridge, swimming and
boating.
Breakfast will be served at 9:00

a.m.,.luncheon from 12:00 to 2:00
p.m. and dinner about 7:00 p.m.
Fees are $6 for non-golfing mem¬
bers; $8 for golfing members, and
$25 for guests.
Reservations may
with

made

Mannheimer

George

Freeman,

Egan

Co.,

St.

Paul.

Chairman

of the club's

various

committees are:

Paul

Maley,

general

chair¬

W. Wardwell Lewis, Merrill
Lynch, Pierce, Fenner & Beane,
cocktails; Malcolm Aldrich, Cen¬
tral Republic Co., transportation;

man;

Babcock, Jr., Piper, Jaffray
Hopwood,
tennis;
James

C. H.
&

Klingel, Juran
Paul
Matsche,

Obviously, we must have cer¬
controls

City Bond Club

Twin City Bond Club will

hold its 30th annual golf tourna¬

must

plan

Outing for

Twin
The

gram.

controls

have

now

even

which

tain

—as

required.

industry

business unless

pared another 7%. And, at
that
time, government officials
were dubious that, even then, they
had the real facts as to what was
were

Moody, golf;
Paine,
Webber,

Curtis, publicity; Fred
Irving J. Rice & Co.,
special prizes; Art Rand, Woodard-Elwood
&
Co., registration;

Jackson &

•

Goth,

vilian

permanently lower level. There
hundreds, even thousands, of be applied as, if and when they
know
our
I
process
engineers, plant layout are needed—and not before.
business.
men, and such classifications of don't believe, for; instance, that
We not only know how to make salaried employees who must be there's any justification
in the
aqd sell .but we know how to maintained in order to process argument that since we may have
because

automobile

the

over

many

even then, it isn't as if we
reducing our operations to

But

prosper¬

ous

company,

months.

coun¬

try

our

hire

rea¬

our

and

that

big

one

22%.

situation

the

dustries which supply us.

few weeks later, these
estimated
steel
requirements
a

actually

'or example,
announced
by

ad¬

we re

what

no basis
production or operate. They should understand
our problems
fully. So let's not
NPA mean that we must reduce manpower
requirements beyond
to
speak
out
plainly,
our
labor force
by some 10,000 July 1. Normally, to operate our hesitate
work out solutions to our prob¬
men
and women within the next
business
efficiently, we should
60 days or our costs would be know our schedules at least four lems together and keep on pre¬
senting the facts, as v/e see them,
prohibitive. Because of necessary months in advance.
so that our government can make
tooling to get those defense jobs
Do Not Need All-Out Controls
sound and reasonable decisions.
underway, we simply can't re¬

this

conditions.

production

have

been

business-

m e n

industry

scaled down by

possible, because it can't pos¬
sibly make a normal profit under

vilian

son

repre¬

industrial groups not to

Only

it's

stated

March,

Later,

plan.

year, the
estimated
their

services

period.

are not needed, and urges
jockey for preferred positions, but to
help Washington reach sound basic decisions.

this

beginning

armed

civilian production,

give you an example of

Annual

Elect Officers

are

PHILADELPHIA, Pa. —At the

Hartung,

Grant

annual election dinner of the In¬

vestment Women's Club of Phila¬

Allison-Williams

prizes;

Co.,

Wood
Carlton Cronin,
Co., entertain¬

Harold E.

delphia
on
May
21,
Henrietta ment; Wallace Fisk, John Nuveen
Kemmerer of Yarnall & Co. was & Co., prize solicitation.
which we are ne¬ all-out war we need all-out con¬
elected
Officers of the club are James
President; Leanor H. Sil¬
our products can be made avail¬ gotiating or on which it is in¬ trols now so that we will have
able to more and more people at dicated
the
government would had some practice when the time ver of Wellington Fund, Inc. Vice- S. Graham, Allison-Williams Co.,
the lowest possible prices.
President; Dorothy H. Wight of President; Edward B. Lynch, Mer¬
like us to quote. It is impossible, comes.
And if we look at the record of
rill
Lynch,
Pierce,
Fenner
&
The all-out
control formula— Jenks, Kirkland & Grubbs, Treas¬
therefore, to reduce our overhead
World War II,
it seems pretty as we would if we were merely before it is actually needed—is urer; Virginia Lee of Stroud & Beane, Vice-President, and George
clear that we learned, when we in the civilian
J.
Freeman,
Ivlannheimer-Egan,
goods business 'and too dangerous for "practice."
If Company, Inc., Secretary.
had 4of the business of all-out
Elected to the Executive Board Inc., Secretary-Treasurer.
iacing a slump.
there must be a plan—and we
war production^
At Ford, we're eager to take on agree that something of the sort is were Dorothy Lentz of Hecker &
But now we have a brand new all of this two-fold civilian-de¬ necessary—it should be applied Co., membership; Louise Powell
Hilliard to Admit
manufacture

low cost,

that

defense jobs on

assignment—the job of preparing
for

with

war

ing:

civilian

production with
This dual job must be
a
minimum of waste

the other.

done

hand and carry¬

one

with

and at the lowest

the

possible cost to

fense

program

And

all

lems

that

from

those

other industries but I'd guess that,
in the main, all our problems run

parallel

other

large

can

been

phasing

fense

work

with

tion.

That may

trick

inate
that

that
gap

their

the

real

problems

involved—it doesn't

are

defense

de¬

produc¬
sound like a neat

but it doesn't elim¬

paper,

any

work

closes

mean

the

left in civilian production.

Major Problems in Defense Work
One

our

utilize

our

major

is
plant and facilities

just as efficiently
ing this period.
To handle
and

tion

which

have

own

possible dur¬

civilian

produc¬

vitally needed, we
build new plants

expense

with the pos¬

sibility of partial accelerated de¬
preciation or take over govern¬
ment-owned

mobile

the

lot

forced

Freed

Uncertainty

this assignment

ried

out

freed

is to be car¬

successfully,

we must be
possible of un¬

soon

certainty and confusion and trial
balloons

—

trial

such

recent

the

Washington

told

that

rumor

balloons
-

born

that steel for

what

like
in

material

are

those

going
which

estimate

steel

and

manpower

to be—guesses
finally resulted
of third-quarter

has

you

airplane
motors

yet

been

know,

can

engines

devised.

with

another

mix

you

truck

kind

line.

In the automobile

industry with
decreasing volume, increased ma¬
terial prices, increased labor rates
and

increased

taxes

the

one

hand, and with prices frozen since
Dec.

with

justment
*An

only

one

minor

the other hand,

address

National

Dearborn,

by Mr. Ford before the
Security Industrial Association,

Mich., May 17,

1951.

and

be
in 1942

was

That's

1943.

but

do,

businesses

because
less

are

small

many
able to

supply.

opened

with

fense

York.

reelected.

At the

the

ules

meeting

recent

in Washington do not—the
interrelationship this com¬
pany has with some 13,500 small
businesses
our
suppliers
and

defense-related
the

basis

pro¬

sched¬

proposed

come

under

CMP—added up to 26 million tons
of

finished

steel

product.

The

fact is that the steel,

industry can
only supply some 20 million tons
for the third quarter.
And this

organization meeting of
all officers were re¬

board,

elected.

■

with

sociated
Wall

Street,

their sales

cars, household
and others.

passenger

appli¬

create

anything else.

must face

because
an

employee of the

years

Exchange for

and was first employed
telegrapher on the trading

guest of
given
for him by members of the Ex¬
change and his fellow employees.
Mr.

honor

New

York

City,

Crawford

Walter O. Schulz
a

party

is engaging in

securities business

at 81 Cliff

department.

was

farewell

Walter Schulz Opens

has become as¬

Gregory & Son, 40

from offices

Street, New York City.

New York

Security Dealers Announce Outing

—

hurt, we
are
hurt. When they and we are
both hurt, the over-all economy
they

are

Reach

Washington

Help

Sound

'Basic Decisions

/•

I think that

portant jobs

of the most im¬

one

have to do right

now—and this is

critical

period

perhaps the most
in

our

activities,

because

steps taken now may set
the pattern for years to come—is
make

every

Washington
basic

effort
These

withstand

help

reaching

decisions.

must

steel,

copper

and

impelling

seem.

It certainly is evident that CMP

aluminum,

the New York
retired May 17
of disability. He has been

sound,

decisions

i
from
requirement, mind any particular segment of our
you, did not include any steel for economy, withstand any kind of
consumer
durable goods such as political pressure, however strong

cannot

Crawford, Manager

Reporters' Division on the

trading floor of
Stock Exchange,

Gregory & Son Add
Conrad W. Rapp

pressure

26-million-ton

ances

of the

floor in 1906.

with¬

ple

third-

originally filed by those in¬

dustries

directors

William

specific, NPA offi¬

statement that total

and

All former

New
were

because

not

'there's nothing for small business

ad¬

man¬

liquidation rate may

higher than it

suffers.

available

and

that

tire

tanks

line

even

When

duction—on

Nor,

business

dealers.

for

our

any

under

all-out controls. I am elected: James H. Becker of A. G.
told that there is some suspicion Becker & Co. Inc.; Joseph A. W.
even
now
that when the fatality Iglehart, of W. E. Huttori & Co.
count is known this time, the small and Harold G. Wimpfheimer of

defense
and
so-called supporting indus¬
tries totaling more than the en¬
requirements

You

shop

R. Crawford Retires

PHILADELPHIA, Pa.—At the
annual
meeting of stockholders
of City Stores Company the fol¬
lowing
new
directors
were

production

work.

automobiles

country were

in
the stand the strangling grip of con¬
be cut 40%. trols.
Forty per cent was the rumor;
We at Ford do not like this
20% was the fact. And we can't prospect at all.
Our reasons are
plan our business on rumors.
pretty selfish. That is because we
We must do away with guessing realize—as
apparently some peo¬

automotive

fense

assemble

of World

second quarter was to

able, doesn't
major part of

can't

years

of the

shut

change.

Elected Directors

business.

of the so-called small

War II, 16 %
businessmen

quarter steel requirements for de¬

free
any
facilities for de¬

two

first

the

Kidder, Peabody & Co., enter¬
LOUISVILLE,
Ky. — Henning
tainment; Marguerite A. Campbell Hilliard will on June 1 become a
of-A. CL Wood, Jr. & Co., educa¬
partner in J. J. B. Hilliard & Son,
tion; Blanche Rose of Calvin Bul¬ 419 West Jefferson Street, mem¬
lock, publicity.
bers of the New York Stock Ex¬

has been the result

of such controls on small

should recall what his¬

tells

tory

the

production
30%
doesn't
actually make any capacity avail¬

actually

judge results and get all the
practice we need on that basis.
can

of some of

approach

and Confusion

facilities.

know, cutting back auto¬

only to that portion of the econ¬
omy involving direct military and
related requirements. Surely we

system of

cials
As you

complete

All of

the part
those in Washington.
problem

needs

defense contracts

continue

either
our

our

problems

realism

must

there

com¬

civilian

make

even

job,

panies, automobile manufacturers
have

that before we
fair start on the

believe

Must

courses.

Like: most

carry.

we can

are

Charles E. Wilson.

But

differ

that

agreement with the necessity for
the- tremendous goals that have
been set up by Defense Mobilize!'

taxpayer.

Many of us in the automobile
industry have been trying to do
Just that. We have some prob¬

We,
that

We in industry

the fact that CMP is

the
•

•

industry,

cannot get

motives

must

Annual

Club,

New

Outing,

Melville S. Wien

Roggenburg

York
on

Security Dealers Association will hold

Hempstead, Long Island.

realize

nament for

insists

jockeying for preferred posi¬

prizes with

dinner will be served

this job done

their *

Friday, June 22, 1951, at the Hempstead Golf

and associates of their firms.

if any one particular group
on

may

The

It will be confined to members
an all-day golf tour¬

There will be

soft ball game scheduled for 6 p.m., and

at 8 p.m.

The committee consists of Charles

H. Dowd,

of Hodson & Co.,

Inc., Chairman of the Outing Committee; Stanley L. Roggenburg
of

Roggenburg & Co., and Melville S. Wien of M. S. Wien & Co.

[Volume 173

Number 5014

Commercial and Financial Chronicle
The

(2157)
cerned with present versus future

Urges Businessmen Watch Reserve Policy
In talk at Montclair, N.

J.,

May 21, Dr. Ivan Wright

money values.
"
"I am of the opinion that most

says

managements

has lost contact with reality," and whether we have
inflation or some deflation is up to Federal Reserve Board.

through very

"our money
more

"Money and credit

deflation policies which

have not thought
carefully these in¬

flation and deflation consequences.
for their business and investment

By JOHN DUTTON

being policies.
■■
make and
break
threatened will be just as elusive.
"To know the Federal Reserve
The Program Sale
.
Dr. Ivan Wright told a group of In fact, it is generally true that policy and be sure that you know
y-(Article 3) ■■■;,;•: \
businessmen in Montclair, N. J., a
deflation readjustment goes its longer-term consequences is
After
you
start
in
with
the told you that he
on
May 21. much
faster than an inflation your best business and investment
only earns $2 500
questions which we suggested in a
year and has about $700 from*
"Good money, movement.
Just how successful guide/'
'
"
last week s column [May 17
issue, his securities. He would like to
bad money, the managers can be in seeing the
page 26], and you have initiated add
to
his income.
and uncertain consequences of their policies in
They have
the
flow
of
information
which $25,000 in the
savings bank. an<i
money, each time, only time will tell. If their
your prospect is only too willing
$12,000 just came in from a piece
have their dif- deflation policies show no more
to give you (once the
pump has of real estate that is now in checkferent
effects foresight and success than their
been
primed),
it
is
only
a natural ing account at no interest rate
at
and qualities," inflation management, the consething for him to go farther. He all. He wants to do
he pointed out. quences may seem very devastat¬
something but
has told you of his age, his
health,
Mrs.
Prospect is just too afraid to
"It has been a ing
to investors
and
property
are

that

the forces
business,"

are

Cincinnati

Exchange

Elects Trustees

time

long
since

good

"A
rates

money
con vertible

Dr. Ivan Wright

established
which

our

values

have

the years,

have

Federal

losses

Reserve

money
and credit
been measured over

of uncertain value drove interest

and this applies to the

of inflation money

rates

about everything

When the standard meas-

on.

ure

all

changed,

was

money

these relationships were changed,
Creditors

far

were

Those who

should
of

the

market.

lost their

affect

purchasing power

the

uncertain money.

Our

the

into the standard medium
only has the

money

exchange. ; Not

gold

content

dollar

the

been

reduced, but the reserve require¬
of
the
Federal Reserve
Banks
have
been
reduced.
In

ments

„

addition, the Reserve banks have

all

loans,

and

the

greater

change

the

will

elastic

the

goods

linnr,

of production and disLww
thP
Reserve
tribution.
Instead, the Reserve
banks have become, as one of the
processes

of the Board has

ablest members

said, the 'engine of inflation,' ex¬
panding the Federal Reserve note
currency

government

against

making
loans to member banks in need of
reserve
balances against govern¬
ment debts.
One dollar of such
bonds

and

collateral

or reserves in the pos¬
session of the member banks has
currency

value of about
of member
bank loans to customers.
a

multiplication

six times in the form

"This inflation has now gone so
far

that

actual
aciuaA. purchasing

tne
the

of the d°llar in terms of
goods, raw materials, labor, and
property, and tools to work with
power

perhaps more
than 50% in the postwar years.
I doubt whether the dollar will
been

has

reduced

than 25% as much as it
would buy in the middle 'thirties
©r in 1914.
buy

"Many people have been hurt
by this inflation, and many have
profited or think they have because their property values have
in

increased

who

Those

terms' of.
now

are

dollars.

trying

hedge against inflation, may find
it

worthwhile

inflation

But rnost so-called in-

continue.

flation hedges have risen in
until

purchases

the

PJice

present

speculative unknnw that, we are to have
less you know
that we are to have
a great deal more inflation.
seem vai*y

prices

von

"Whether

are

to have more

deflation is up
to the Federal Reserve Board.
I
inflation

doubt

intended
tion

some

the Reserve Board
to have

now

ever

much infla¬

have when

they

mechanism

cannot

balanced

disposal we
it. fully.' But

that

sav

good

and in

commodity

Harrv

sjckj q

Vonderhaar

Hutton'&

Vonderhaar

made, that

They

need

+r.

p1irni

thai

settinj

investment program? You.
[that the same you as you

up an
do

hii<£

«Drimed the numn" with her

^™e?,-tnep.umpWlth ber, hus7
You set

over-

band.

appointment
for* another evening if
you can't
keep going any longer., But you
Set the two of them together and"

monev

our

monev

our

values

yard-

a. Hinsch

long,

for

cost

very

longer than it takes

or any

the

than

less

producer to

use

his

surplus.
#

is therefore worth its
production. That cost of
production with the labor and
"Money

cost of

machinery costs of today is very
high.
Money rates are the hire
for money
rates might
of money.
costs

plus

the

risks.

called

the

The
wages

Those wages in

will

market

much

free

the

production, and those
costs of production are as high as
the labor wages and machinery
costs
of
mining.
Now,
paper
money and credit are only prom_
igeg tQ
good money>
when
d mone
cannot be paid for
money

disappeared

credit

and

banking system

m0ney

supplies

will drive in-

terest mteg down for
is

just what has
years

the*

reached
nponlp

But

^^^a

now

that

stage

good

has

awakeninff

arp

and

while

been hap-

pening in this country for
many

the

sound money has

Abundant

uncertajn'

that

some

Co.

many

the fact

paradise'^)f

up an

Lynch Gives
Scholarship Awards

cas6:

and

say

this

wants

this

will

wants peace of mind.

•

These things

will discover, will come flowing out to you if you will only sit

you

down with this old couple and talk

four

scholarships to
and daughters of employees

SiStSJfta
cchnl^rshin
i<? fnr four

vears

Each scholarship is for tour years

a.nA!Ss^0d$bv
or
girl selected by

the committee.

lo°ks

to!

com«

She has arthritis which

aidcki

ajSPPrn

Thcv

ant homey people bpt
.

you

arc

iust

you

Mrs.

Prospect looks

Scholarship winners, one from cerned when she finds
major geographical area of a securities salesman.

each

out you ure

...

made bv

help?
a com-

educators^

f
_

lege.

award

winners,

second

graaP since the program was inaugurated, will enter college in

the fal1* The scholarships
used in

see.

•

fest of the "tal data

you

need

t° make an objective
investment problem

Usually,
.

how far is

ested

your

situation.

people who don't know where*
they; are going financially and

a jj

J* A. Ray Vis Adds

otherwise. They want to tell theso
things
to
someone
they
can

you

trust. If you are that kind of a
salesman and you know what to
do with the information they give
you, there are literally thousand®
helpful." And you start in. Is he of people in every community m
still working? How is your health? this country that are waiting to
is this your home? etc., etc. Be- see you, tell you about their troufore you know it, Mr. Prospect has bles, and turn them over to you
you

and

all this, and he has also

your

firm for solution,

■
;

Prompt Wire Service X

FOR BROKERS AND DEALERS
To Western Markets in
LOS ANGELES

SPOKANE

•

With Cantor, Fitzgerald

•

DENVER

SALT

•

LAKE

CITY

J. A. HOGLE & CO.

(Special to The Financial Chronicle)

Calif.—Jack

factory,

business,

Newman
with

insurance policy,
an

or managing an
investment trust, a bank

„transaction

that

con-

has

Cantor,

become

Reeves & Co.

affiliated

Fitzgerald & Co.,
Driye; Hg

224 Nor'th Ca*on
was' *.previously with

Inc

mjnd if I ask you a few questions? I assure you it will be
just between us.' Possibly l ean
give you a suggestion that may be

(Special to The Financial Chronicle)

BEVERLY HILLS,

let them tell you about their hopes
and fears. The world is just full

"Mr. Pros-

college or university.
x

Well, let's

pect'" you ask> $<it is our business
to help People with their invest-

may be
accredited American told

any

suggest th6

they have in the bank.

Eugene S. Wilson,
missions, Amherst College; William G.-Averitt, Vice-President of
Colgate - University; and Jean
Palmer, Secretary of Barnard ColThe

p™Per approach to obtaining the

ments in every ; way possible.
Dean of Ad- Frankly, I am very much inter-

,irM

*
T

however, if your approach is since^e and you explain that you:
?nly wanA the information to sees
you can help them to better
themselves, everything you want
to know (and sometimes a great
deal that you don t care about)
Just flows out to you. I you want
Ritchie, & T.) He is 65, etc. Does he need to gain the confidence of other®

Sr. in the Houston office.
were

This is to be used when people*
might be a little hesitant in tell¬
ing you what they earn and what

States, are Scott V.
You sit down with Mr. Prospect.
Rutherford,
Jr.,
whose
father, You tell him about his shares in
Scott V. Rutherford, Sr., is an ac- the
Umptydunk Brewing Comcount
executive
in
the
firm's pany.
He is interested because
Lansing, Michigan office; Barbara you are giving him solid facts—
Ann Hamstrom, daughter of Ed- you know your
business." Then
ward Hamstrom, an account ex- you start probing.
What other
ecutive in the Philadelphia office; stocks do you hold, Mr. Prospect?
William Keith, son of Harry Keith, Well, I just have 10
shares of
cashier in the Los Angeles office; A. T. & T. and this. (He has $5,000
and Charles Ritchie, Jr., son of in Umptydunk and $1,500 in A. T.

Selections

1]? ord^r

con-

tfje8 United

account executive Charles

In Article 4 I will

don't: know much ahm.t

stocks.

made"

the

can

nlpas-

defla-

it going.
I
is the most important
question in buying anything,
whether a house, a farm, inven-

any

won't have to go on charity. Sho
to know that her husband

you

those

tion

Assume that you are calling by
appointment to see a man who has
informed
your
office -that
he

it cannot stop without

|g tbe ^rend 0£ inflation

tories,

that

addition
Ar-t^io

would like to have some informa- with them sincerely and helpfully.
sons
^on orf a particular stock. You They want someone to help them
of Merrill Lynch, Pierce, & Beane, S1Z.® up the situation when you, and if you can show them you aie
ha, been announced byWinthrop
Modest home tenished the' their man, I tell you this, your sal.
Award

MIAMI, Fla.—Wayn T. Mitchell
deflation.
has been added to the staff of J.
"The most important question A.
Ray vis
Company,
Inc., 550
today before any man in business Brickell Avenue,
A

questions
in

Merrill

on withuftimately further destroying
monetary values and all claims in

xt-

ask

Q11{y{jpc+pr|

be able to quit his
job, and
Ciancey> Wj P/Clancey suggested in Article 2 of
series
but
I will save them for with social
security, and his inAlfred
J.
Friedlander, series but
next week. Because I want to
give
come
from securities, that they
Benj. D. Bartlett & Co. and Aryou an illustration of what I mean won't
be
hungry.
She worries
thur w. Korte, C. H. Reiter & Co.
by finding out "where the major about him, too. She worries
about;
issue
lies," take the following herself.
She is scared
and
she

inflation, and cannot go

money> and

should
are

Power

costly and it will not be pro-, .000 to the boy

duced
for

A commodity such as gold fof c,allege study

stick

•

here:
♦

So you have

Prospect'f:tears

Mrs.

Pros-

have made

you

cbn set her consent to

you

your

opening interview, but don't

issue

But how

nate

sell Mrs.

can

income.

If you

case.

for Mr. Proi*~

customer.

main

West-

other members of the board

v^^haTbeen^
drf?
value has been a defi

nlte measure of gold

tion

Smith

our

into

suffice it

estate,

Maybe the present

same

place

finely

the short time at

Smith

you

the idea,

Remember your sale is going to
be made when you find out the
heimer & Co"
bavG been 'eiected one thinff above a11 else that he you don't sell stocks. You find out
b
f tb'
Board of Trustees wants his money to do for him. what
is hurting Mrs. Prospect,
f the Cincinnati Stock Exchange
Find that. out> and then he is go- Mrs. P. wants more income; she
succeeding Charles H
Tobias of
to be interested in accomplish- wants to know that if she is in-Westheimer & Co. and Neil Ran- ing
1 was ^oing to give you capacitated in her old age she*
..

Few people understand, it, and in

the

do this.

and sensitive barometer of values.

entered upon their present infla-

policies.

Kenneth

be &

other values, from merchandise to
real estate. The money market

discounting

by
bills and notes for member banks
currency

will

take

SSSaS
an

during

sale and

confidential

other

in rates.This

revaluation

money

ity.

for

rates

speculative

has lost contact with real¬
That is you cannot convert

money

highest grade loans will

Continuing, Dr. Wright said:

long time now we have

rates

An increase in the rates

the

"For

very

money

market

pect

?actfudy
men~
nature
of

Jvj

good job

pect and

affairs than al-

conversation

your

You have
a

for

grades

had

free

supply and demand in the dif-

money in things that would rise
in value as the depreciated dollars

that

for

rates

their ferent compartments of the

seeing; invested

and

defrauded

were

debtors were enriched.

the

and

his

,elsetthf^e nas ever

a re-

sound, convertible money in which
every one can have confidence,

studied

can

he has told you more

about his private

money

pay

reason

of just

Now

up.

some

money

and the price

actually

Now you are
getting somcNow
you
are
on * solid

ground.

case objectively.
This brings
into his close confidence very
quickly.
He may even be surprised after you have left, that for

and bank

Over-supply of

down

where.

you

an ex-

Cess

reserves.

move.

Possibly

own

management

supplying the market with

and

person

money rates
the product of

are

have clarified his invest-

objectives for him.

in his life that
he ever sat down with a
qualified

money

low

The

had

billions of

cause

in values.
we

rise

small

very

will

freely into the
standard measure in

ment

it is the first time

running versal of this process will do just
into the future, such as mort- the' opposite. ; Of
course,; we
gages, bonds, life insurance and should have
a
good
money,
a
contracts

and you

fully hedged

who think they are.

coun-

try.
By good
'money I mean

who are now

owners

money

this

had

Daniel

ESTABLISHED

Members New
and

other

50 BROADWAY
Tel.: WHItehall 3-6700

1915 ;

•'

York Stock Exchange

Principal

Exchanges

NEW YORK 4, N. Y.
*

Teletype NY 1-1850

The Commercial and Financial Chronicle

(2158)

conference and I

With Waddell & Reed

of the

(Special to The Financial Chronicle)

BEVERLY

Joseph R. Ferlitz, Jr. is
nected with Waddell &

Wilshire

8943

Calif.

HILLS,

now con¬

Reed, Inc.,

Boulevard.

By ROBERT R. RICH

NATIONAL
bCOME

investment dealer,

your

three

which

The

National
research

No.

securities

day to

120 BROADWAY, NEW YORK 5. N. Y.

the keting is obviously very expensive.
again This leads to another serious

convene

legal

Berger

11)

Bill

introduced

15 and referred

the

same

subcommittee, under the

making such
investment of

for

legal

ments of the mutual funds indus¬

the

investment

ciaries

commissions

the

believe

from

trust

benefici¬

commissions."

fidu¬

with

mak¬

powers

connection

Mr. Welch,

fund

trust

investment.

The efforts of the mutual funds,
led by Joseph E. Welch, .Execu¬
tive Vice-President and Treasurer
of

Wellington
the

in
your

bill

culminated

Fund,

introduction of

den bill

identical

the Snow-

of power is not absolute
Pennsylvania has long
recognized the right of a trustee
gation

The Snowden

May 14.

with

and

the

Berger
bill, except that the securities of

CALVIN BULLOCK

investment

are

cifically

legal

the

Established 1894

companies
authorized as

inves'.ment of

the

Before

New York

introduced,
versy were

those

men

trust

"to

spe¬

ior

bill

IIMBWilllWIWIWIIMIMUmiMXHMWIII
VRNaiMMNBRllHRRinNMBUMBUBUBBIBBBBia

device

was

the

lines of contro¬
clearly drawn between
who, in principle, be¬

Mnmn

WELLINGTON)!

for

trust

State

the

funds

those

and

Senator

'investment

lieve

r■

your

investment dealer
or

trust'

firmly
rule

would

have

placed
and

the

be¬

long -estab¬

decision

volume

would
in

would

timing of

for

the

Funds

many

these

record

so-called

for

Participation in

the

early

thirties

invest¬

BONDS

been

(Seriei B1-B2-B.3-B4)

sufficient

force to the

forties

and

during

and

apply

with

shares of

in¬

for

there

special

equal justifi¬
treatment for

come

to life tenants and other in¬

come

beneficiaries in this period

inflation.

tions

fiduciaries

Century-old limita¬

investment
are

powers

being abandoned in

the realization that

the

period from their organization to

PREFERRED STOCKS

equal

would

tion of the need for increased in¬

organized in the late thirties

early

introduction of Senate Bill No. 11
results from a universal recogni¬

many of the
sotrusts'
have
'investment

called

raised

"Most of the objec¬
to investment com¬

investment company shares."
Mr. Welch further stated: "The

efficiently

common

operated

stocks

corpora¬

tions afford suitable protection to
time, a great majority
the > ultimate beneficiaries and at
of the corporations whose com¬
the same time offer greater in¬
mon stoqks. are included in such
come to the immediate
benefici¬
investment
the present

(Series K1 -K2)

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

fProspectus

Tke
'

have

trusts,

the

steadily

be obtained from

normal

Keystone Company
of Boston

times ". V

since

will

''r

usual
"
•

inflationary forces,

the

"Anyone

familiar with

stated,

rific overload upon such funds for

approved,

find the

sit¬

same

companies which has al¬

developed

and loan

between

Federal

associations.

had

loan

the

and

State

our

associations,

the

long

building

had

and
par¬

and

the

building and loan

ciations
served

the bankers feel

they

and

home

ownership.

The Federal building and loan as¬

into

came

they

soon

ing field.

your

present course,

will eventually find the

you

and

your pursue

being

invading the bank¬
I believe that if

were

same

kind of

opposition from the banks
generally as it has now developed
between

the

banks

and

family" have forced

The

Berger

amendment

Section 9 of

26,

1949.

bill

subsection

authorized

are

tions earned a net profit over a
given time period and paid divi¬

them

even

pathetic
the same

A
Massachusetts
manufacturer made $35,000 a

in 1950, but he found he

year

had to dip into savings to meet
his
Christmas
and
year - end
expenses.

In fact, he "had to"

sell

some

stock

car.

This

new

by the

car,
new

that

for a
second

other

also

had

There

expenses

"had

including quite

to"

make,

few for his

place.

summer

all

pay

himself.

several

were

to
was

way,

for

car

that

n o w

taxes and cost of

higher

living do take

heavy bite from income these

days—for

But

everyone.

wouldn't

sensical" for

"common

people to go
principles On which
country was founded?

back to the

this

Wouldn't

practical

find fewer things

which
"had to be" spent, and
not

to,

their

reduce,

income-producing capital?
—From

May

investment provided the corpora¬

years

in¬

this

Stock

Investors

Fund

Investor

Diversified Services

Under the amendment,

stocks

dends

according

case,

(a)

Act approved

which contains the usual "prudent
man" clause, preferred and com¬
mon

try, is

money
to
add

proposed

debt,

newspaper.

Federal

building and loan associations."

of $16,000 in the past six years.
At the other end of the coun¬

useful purpose to encour¬

thrift

age

asso¬

He's

spend their capital to the tune

building

ticular conflict between the banks

for

specific

number
within the time period.
a

further

qualification if that,

in the case of any stock
the stock of a bank or

and

investment

other than

shorter-term

which

issues

available at about the

were

prices.
When it appeared that the major
part of the decline in corporate
bonds

the

was

over,

held

transferred

remainder of

viously

same

the

funds pre¬

Treasury

bonds

bonds.

New issues of high-quality

high-quality

corporate

corporate bonds have been offered

insurance

dual

many

purpose
cases

one-third

exceeds

of any

the

market

participation in

a common

trust fund."
It

tion

stability sec¬
portfolio will be in¬

our

creased."

American

reports

j
Business Shares, Inc.,

assets per share of
April 30, 1951, compared
$4.00 per share on April 30,
1950. Total assets were $36,653,279
compared With $35,433,436.

$4.09

net

with

reported that the activity "WHILE DEFLATIONARY
forces,
funds to have written
accompanied by the decline in
into the Pennsylvania bill specific
commodity
and
b o n d
prices,
permission for trustees to invest

mutual

would

investment

with

the

from

New

York

where the funds
to

ask for such

to offer
date.

company

largely

were

experience

legislature
advised not

stipulation but

amendment at

later

since

Considerable difficulty has
been
experienced by the

funds

concerning the amendment.

Legislation specifically permit¬
ting
investment
in
investment

shares by trustees

company

normally call for extreme

investment

caution, the prospect

of accelerated defense orders and

heavy

plant, expansion

indicates

that any readjustment in business

should be moderate and probably
will be followed by a further rise
in
national production, employ¬
ment

income

and

levels

this

fall,"

new

high

Lloyd,

Rawson

Wellington Fund, declared in

interim investment report.

and

"Since the

end

March," the
"Wellington
Colorado,
Kansas,,;: Maine,
New Fund continued its policy initi¬
Mexico, New Jersey, North Da¬ ated at the end of last year of
kota, South Carolina, Tennessee, reducing war beneficiary stocks
Utah
and
Washington.
Similar which had risen sharply and in¬
institutions

has

amendments
Rule

have

Hampshire
last

year,

list"

state,

been

passed

the Prudent

been

California and

Man

introduced

Connecticut.

adopted
Nebraska

New

measure

"legal

permits trust in¬
vestment in mutual funds meeting

but

certain
and

requirements.
In Illinois
Michigan, amendments to the

Prudent Man Rule

are

under

con¬

sideration, and in Ohio and Wis¬
consin, new laws are under con¬
sideration, since these states do
not have

stocks

common

value of the estate, not including
in such market value the value

present,

common

the income from the

stocks shall be made, "so that the
market value of the investment

effectively than will the acquisi¬
listed

invest¬

shares,"; Mr. Campbell
"must recognize the ter¬

vestment

tion/of .individual,

"Prudent Man Rules" at

:;<!yj-y;

;

+;V-.

r e

i% continues,

p o r

creasing the investment in quality
stocks with favorable long-term
prospects.
Following this policy,
volatile

some

the

airline,

metal
were

and

stocks

common

aircraft,

non-ferrous
machinery industries

reduced and chemical, drug,

natural gas, oil and utility stocks
were

increased.

These

realized

securities

raised
to

first

total of
the

realized
ments

"We

changes

profits
$2,928,607 since the

year,

leaving

appreciation
$12,707,940

believe

the

of
on

un¬

invest¬

May

Fund's

17.

invest¬

ments
are
well adjusted:Jo the
SECOND quarter of our
current outlook for business and
year," writes H. J. Prank- securities
shares.",- - ,/■•:s -:*; ■ •; •
prices: giving due con¬
ard," II, President of American sideration to the
conflicting forces
Secretary .Campbell^ in letter to Business Shares, "we sold our U. S.
in
our
economy in
which either
Mr. Welch, said, "I
attempted to Treasury issues of 1967/72 and in¬
give you some good advice at our vested most of the
Continued on page 38
proceeds in

ance
.

ment trust

achieve this

well

under the extreme pressure of un¬
r

Boston 9, Massachusetts

We feel that the acquisition
of shares of investment
companies

economy--has been-steadily rising

50 Congress Street '

aries.

trend of in¬
flated prosperity.
One can¬
not
argue
that the 'investment
trusts' have stood the test of even
.

may

enjoyed

rising

would

soon

year.

says, and "taxes and
creased cost of living of

However, I

uation between the banks and in¬

stems

pany

cation

"Secondly,

for

companies
and
banks
which are made legal investments

opinion to disqualify their
shares as a sound and proper in¬
vestment for fiduciary funds.

investing their capital

vehicle

surance

ment trusts' in the financial panic

INVESTMENT FUNDS

ar¬

of mutual

case

natural

stated:

tions

sad

remaindermen, and

investments and

The

Principal and In¬
in discussing

1947

small trust funds.

timing of their sales in
and down cycles of the

market.

open

and

funds

their purchases of

stocks

common

solely

gued strongly the

The operators

lesponsible

Mr.

Welch

Act

ants

corporate

delegation

the problem of apportionment of
capital gains as between life ten¬

com¬

would

$17,000
he

your

Secretary of Banking.

come

the

amendment
you

with

meet

family income of

company,

said, "the prohibition is not

referred to the

shares,

might be
investment trust

the

such

the

public.

ends

combined

but

improper dele¬

pointed to the out¬
standing records of mutual funds,
compared with leading indexes,

trustees of the investment trust

the

Custodian

Certificates of

the

from

selling

make

can't

the

Mr.

issues which

soundly and safely.
or

Mr,.

authority,
rather against exoneration of
fiduciary from liability result¬
ing from improper aqtion on the
part of the persons to whom such
authority is delegated."

fiduciary
would not be fulfilling his obli¬
gation to his trust to control and
manage
investments wisely,

K. iystom

been

Principle

Texas lawyer who

during
recent
weeks
at
yields
the stock is listed or which are higher than at any
traded, or eligible for and applica¬ time since 1939. We are continu¬
tion made for such listing, on the
ing to make corporate bond pur¬
New York Stock Exchange or any chases
as
opportunities present
other exchange approved by the themselves with the result that

Welch

fiduciary who
'investment trust'

stock

mon

that

quality

type,

trust."

last few years

against

fiduciary can¬
not
delegate
his
investment
powers to another. Obviously, the
acquire

busi¬

gation of authority.
"In
the
final
analysis,"

corporate

PHILADELPHIA 2, PA.

the

does not constitute

McPherson,

legal for trust investment.
lished

employment

operate

es¬

rental

of the Courts
Massachusetts, Ohio and Okla¬

stated, "I am firmly and unalter¬
ably opposed to any proposal to
make

owned

real
or

Welch referred to rulings within

L. M. Campbell, Secretary of
Banking, in a letter of March 27

\mm

managers

ness

who do not.
IIRUMRf

validity of investment homa, declaring that the purchase
shares as an investmentby a trustee of mutual fund shares

company

IkMIIMIIIIIIIURHUUIiaiUiWHRIBIIHIIII
tfWRW-RM—WRBR»»*»—I—H«—MlttlM

employ services of

of real estate and the

funds.

Snowden

that

tate broker for the sale

lieve in the

from

the

sociations

of Wellington Fund,

replied, in a letter to Senator
McPherson, point by point and at
length, to the objections raised by
Secretary Campbell.
Concerning the improper dele¬
gation of authority by a fiduciary
who purchases investment
com¬
pany shares, Mr. Welch argued
that the prohibition against dele¬

ing shares of mutual funds legal
for

prospectus

banks

collection

the

upon

estates.

try led to action to have included
in the bill specific reference to

One Wall Street

opposition

hibition

McPherson, of the Senate Ju- aries of trust estates could well
diciary General Committee.
object to the fact that large fees
Ordinarily, it is reported, the and commissions are charged by
bill would have been introduced the managers of 'investment
and referred to the Senate Bank¬ trusts' and the corporate fiduciary
ing Committee.
acquiring such shares would have
Discovery of this bill by ele¬ to make another charge for its

investment denier

has

there

generally

ready

Prospectus from

time

banks

trust funds and I refer to the pro¬

double

Chairmanship of Senator Donald

for

objection

Bill

(Senate

quietly

was

Jan.

corporation

readings

will

June 4.

from

believe

necessary

House

from

request

this

time.

particular

Pennsylvania

amendment at this
that up to the

drawing

Return to

There's

have attempted to find out the
background of strong¬ management and salesmen fees. sentiment of the bankers through¬
ly-contested actions, the Berger I know from my own experience out the Commonwealth with re¬
"Prudent
Man
Bill"
passed its that there is a large force of gard to this amendment and I
third reading Wednesday in the salesmen engaged in personal learned that the sentiment is de¬
Senate of Pennsylvania at Har- solicitation in the sale of these cidedly
against making your shares
risburg and is now up for the shares and such a method of mar¬ eligible.
If you insist, and this

Against

upon

mistake in not with¬

grave

Thursday, May 24, 1951

still decidedly

opinion that you are mak¬

present

Storm Clouds

Prospectus

ing

Mutual Funds

—

•

upon -an

company

Exchange,
shares

insur¬
bank

"IN

THE

fiscal

Number 5014

Volume 173

Continued

from

The Commercial and

(2159)

Financial Chronicle

page

Observations...
of its ruinous effect on business

;

distribution, and promoting extravagance and

and

individual—and because of,

inence
ties

view of its

the

V.v.'.

York 5,

way,

Social Credit Government. For¬

Beaver

•

Thermal
for

Research

Research & Engineering

New

■

Television Shares Adds
(Special to The Financial

Chkonicle)

Schwabacher Adds

Lerner &

Co.,

South Spring

Homsey & Co., 31

Hayden, Stone Adds
(Special to The Financial Chronicle)

Hig-

With Francis I. du Pont
(Special to The Financial

Chronicle)

SAN

Isco Stock

Exchanges.

passing

Premier

Provincial

Man¬

Treasurer

new

the

sidering

CANADIAN BONDS

Edmonton

Government
Provincial

Municipal

■»

new

CANADIAN STOCKS

gas-scrubbing

plant at Jumping Pound gas field
for

the extraction of sulphur for
paper

This

industry.

economic

strength

A. E. Ames & Co.

province that only a few years
ago was so largely dependent on

incorporated

agriculture points to the conclu¬
sion that Western Canada, led by

the million Toronto issue which

1947

Lynch, Pierce, Fenner & Beane.

Corporation

Two Wall Street

•'

New York 5, IN. Y;

<rvrr-t>v;

was

1-1045

4-2400

WORTH

Fifty tloiigress Street

oil

Co., opened

most con¬

back.

with

Fidelity

Co.,

it would
will soon

position to recognize its finan¬
cial obligations and by the reor¬ Alberta, will soon outstrip in eco¬
ganization of its debt was able'to nomic importance^ ' the thitherto
expunge the stigma of the 1936 predominent East.
default. Since then Alberta has
During the week the new $20
looked

affiliated
&

dride, and other chemicals. Cana¬

province found itself in

discovery

now

Cook

$50 million plant for the
of acetic acid, anhy¬

diversified

among

production

self

CLEVELAND, Ohio.^-R. Donald
Paul

Canada's

Lawrence Cook Adds

progress

million.' dollar
plant for the processing of ethy¬
lene, j an
oil
by-product,
into
plastics. Last week the Shell Oil

associated

was

Building.

dian Industries Ltd.f is also con-

return of pros¬

years

Lawrence

the

prominently

ning, curiously enough proved it¬

the

tremendous

eco¬

lower

Boston 9, Mass.

sympathy with the fur¬

possibilities of the province
created world-wide interest and

ther decline of the Canadian dol¬

foreign capital, notably) from south
of the border, poured into Alberta

purchases

lar to 6 5/3 6%. Although

Canadian

ROOM FOR GROWTH—

for rearmament
purposes account to some degree
in mounting volume.
for the persistent weakness of the
Today nearly all the major U. S.
exchange there are also offsetting
companies together with the do¬ factors which
normally would
mestic oil interests are constantly
create strength at this time of the
extending the boundaries of Al¬
year; nevertheless at the current
berta's new oil empire. The de¬
level the Canadian dollar is un¬
velopment of the natural gas in¬
dustry is now receiving somewhat
belated
attention following the
decision

Alberta

the

trials

registering

which

As
for

the
become

consequence

has

gas

now

The

notable

tendency

the

Western

Federated

lend

policies

long experience with

Canadian

industry

benefit

you

will

in selecting suit¬
investments in this fast

able

growing neighbour.

widest de¬
oils, among

Petroleums

Our

ment.

Stocks

undervalued.

financial

sound

themselves favourably to invest¬

volume of

govern¬

clined

IN CANADA!
Canada's thriving economy and

again lower on a restricted
trading with the indus¬

were

prohibit gas exports until

ment to

here

doubtedly

greater reserves have been estab¬

Correspondence invited

was

jMlilner, I^oss

example, showed a
resist the general

•

Co.

Members*

The Toronto Slock Exchange

primary objective on the part of trend, and the golds also displayed
companies. A new do¬ some resiliency.
- /
enterprise Britalta Petrol¬
eums; Ltd.; in collaboration with
Stewart, Scanlon Adds
the Deep Rock Oil Co., has al¬
(Special to The Financial Chronicle)
ready achieved remarkable suc¬
SAN FRANCISCO, Calif.—How¬
cess in its initial venture. Follow¬

several

The Investment Dealers' Association

of Canada

mestic

330

Bay St. Toronto, Canada
'

ard F. Sillick has been added to
satisfactory strikes on their
two drillings in the Many the staff of Stewart, Scanlon &
Island-Medicine Hat area, the ex¬ Co., 216 Montgomery Street, mem¬
tent of their new field has just bers of the San Francisco Stock

Winds**

Brantford

Hamilton

Brampton

Sudbury

ing

first

INVEST IN

the Exchange. He was previously with
discovery of new wells on their Supple, Griswold & Co.
next two
attempts. These early
discoveries clearly indicate, that
Joins Reynolds Staff
as
Premier
Manning predicted
(Special to The Financial Chronicle)
been

Chronicle)
LOS ANGELES, Calif. — Fred¬
FRANCISCO, Calif.—Fisherick W. Robinson has been added
r
J. KinsLow, Jr., is now with
to the staff of Francis I. du Pont
chwabacher & Co., 600 Market
& Co., 722 South Spring Street.
treet at Montgomery, members
He was previously with Merrill
E the New York and San Fran(Special to The Financial

the

stration

SPRINGFIELD, Mass.—
bee has been added to the staff Kenneth R. Bunce is now affilof Television Shares Management iated with Hayden, Stone & Co.,
Co., 135 South La Salle Street.
1387 Main Street.
CHICAGO, 111.—Donald M.

never

in
fi¬

(Special to The Financial Chronicle)

northern

put into

theories

were

huge

ber

'■

Alberta

construction

nomic

Corporation—Special report
Trinity Place,

& Iron—Circular—duPont,
Milk Street, Boston 9, Mass.

Mould

Philadelphia

with the investment business.

Inc.—Analysis—Hill Richards & Co., 621
Street, Los Angeles 14, Calif,

Valley

in
on

the

widely known

nancial circles, where for a num¬

at. Leduc satisfactorily received was the
a
new era of provincial
main centre of attraction. The in¬
prosperity. This striking demon¬ ternals were inactive and slightly

only—Troster, Singer & Co., 74
York 6, N. Y.

Time,

due

financial

party

never

and

dealers

over

is
and

Knox

York

marked

Engineering Corporation — Bulletin —
Goodbody & Co., 115 Broadway, New York 6, N. Y. Also
available is a bulletin on Foremost Dairies.

Thermal

largely

Mr.
New

industrial
develop¬
lagged behind

that

appear

Broad¬

Nordeman &

routes

World"

location

the

strategic

resident of Atlanta,

Ga., and in his new post will make
his headquarters there.
.;

the

operations in connection with the

Aberhart

Premier

lished.

Inc.—Anatysis—Bruns,
Street, New York 4, N. Y.

air

Mr. Knox is

the

who

1945

Falls Machine Co.

Webster,

known

other economic

provincial ad¬
ministrations in'the Dominion. In

Co., 10 Post Office Square, Boston 9, Mass. Also available is
memorandum on Gear Grinding Machine Co. and on Seneca

its

Although

servative-minded

Stone

now

an¬

W. L. Morgan & Co.,

national distributors of the Fund.

West

swept into power at the head of

With

—

Aberhart and the

Drydock.

Card memorandum

during

recourse

practice.

N. Y.

—

North

in this field
result of the newly
established oil and gas industries.
The
Celanese
Corporation
of
America has already commenced

new

Cement

Cement Company

the

'the

Roads

largely as

epic

New York 4, N. Y.

Riverside

usual

the un¬
flagging opposition of the Provin¬
cial Treasurer,
Solon Low, the

Line

Products—Analysis—R. M. Horner & Co., 52

view

figure

tunately

v' '

Company—Analysis—Elworthy & Co., Ill Sutter Street, San Francisco 4, Calif.
Placer Development, Ltd.—Analysis—John R. Lewis, Inc., 1009
Second Avenue, Seattle 4, Wash.
Punta Alegre Sugar Corp. — Circular — J. F. Reilly & Co.,
61 Broadway, New York 6, N. Y. Also available is a circular
Purolator

perity, the Social Credit govern¬
ment led by the youthful Premier

Pacific Lumber

Maryland

Provinces,

this
instance the
people of Alberta were beguiled
by
the
intriguing doctrines of

N. Y.

Portland

and

invariably made to desperate ex¬

former

Co.—Memorandum—Boettcher and
Company, 823 Seventeenth Street, Denver 2, Colo.
Northern Pacific Railway Company—Special analysis—Ask for
Memorandum F—Wood, Walker & Co., 63 Wall Street, New
Missouri

parlous

of depression

pedients.

Co.—Memorandum—DempseyStreet, St. Louis 1, Mo.
Pacific—Analysis—Vilas & Hickey, 49 Wall Street,

York

New

such

debt.

cial

Tegeler & Co., 407 North Eighth

early thirties the province

periods

Recommendations and Literature
Missouri

depression

wealth

mineral

covered
Yukon

nounced by

newly' dis¬

the

passed

ment has somewhat

Barge

which

coun¬

try sold through dealers, was

as
the
through

described

once

plight that the decision was made
in 1936 to default on the provin¬

Dealer-Broker Investment
Valley

chequered his¬

monton,

and

open

balanced mutual fund in the

the

has

"Gateway to the North"

"Cross

and

Mississippi

similar area on
capital city, Ed¬

"top of the world."

productive system; that flag-

{

recent

other

any

economic

was

therewith.

mineral,
and
oil
rise of Alberta, how¬

heels of the

the

weird

areas

tory.

Wilson:—I respectfully

possibili¬

extensive

is all the more striking in

ever,

rajther than in

thrust into prom¬

tremendous

these

wealth. The

submit that this plea, along with
those from many millions of conscientious fellow citizens, by no
means represents an inconsidered yell—and is, in fact,
consistent
with the democratic process, along with the prevalent Washington

the

agricultural,

abroad.

.V .'-.if-:

cases

the continent. Its

instead of concentrating on the more efficient use of the
directive powers already possessed; that some wisdom be used in
the liquidation of billions orf our assets in give-away schemes

Continued from page

both

than

rote,

confusion which you justify

will

and natural gas

waving of "democracy" be not used as an excuse for the auto¬
matic and cumulative laying on of ever-increasing controls by

Mr.

Texas. In

that

the

rival

province

discovery of vast resources of oil

in lieu of high-sounding white-washing; that there
cessation of hasty ill-considered administrative orders

and "letters" which scramble up our

the

and

veloped coal and water resoruces

expansion

dynamic

State

bureaucracy
a

District

world

ap¬

representative

Wellington Fund, largest

of the Peace River

spaces

the

now

undoubtedly

of, the sacrifices being made in the fox-hol^s of Korea.
Precisely because of such sacrifices, and our acute world struggle,
do I want to be extra certain that there is realistic appraisal of
be

threshold

most fertile

earlier
meteoric economic progress of the

spite

shall

the

of the

ample
scope for agricultural expansion.
This
youngest of the Canadian
provinces also has more unde¬

stands

one

empty

emerged from deep depression

region
areas

furtherance to the sup¬
port of Mr. Wilson's goals by both big and little business, there
must be
much more "realism"
in " Washington; seems entirely
reasonable to

decade, Alberta,

has

plea of Henry Ford II, that as

The

than

less

the Cinderella province of Canada,

supply of soft goods.

pointment of William S. Knox-as

PHILADELPHIA, Pa.—The

By WILLIAM J. McKAY

southeastern

Regarding price control (whose encumbrances do not

Canadian Securities

Wellington Fund
Appoints Wm. Knox

practice, in curtailing production

inflation.
hamper
me),.I am concerned solely with the strangulation of our vital
productive and distributive effort resulting from the hampering
network of administrative orders and regulations to be inflicted
on our businessmen by the army of 35,000 controllers asked for by
genial price boss Michael DiSalle from the fiscal 1952 budget.
In lieu of lengthy argument over this or that detail of policy
or
administrative order, perhaps on the ground of its unavoidability in an emergency, rather am I primarily worried over the
more basic question whether actually the situation in real short¬
ages justifies the enormous machinery being created for price and
wage controls; and only secondarily whether that machinery is
disastrously curtailing our vital production and distribution, with¬
out even effectively stabilizing anything.
To my mind, the real
argument concerns the actual need for justifying the very existence
of far-flung controls—such as the infliction of the labyrinthine
super-complex system of price ceilings on the now-abundant
and

further-established

when

imposing the export ban, it
will not be long before sufficient
new

reserves

are

established

WINSTON-SALEM,

its :

wealth of oil and natural
berta is also

other

weather

value

duction

resources.'

1950

■v:

Despite

conditions

the

excess

'(Special to The Financial

Hays, Jr.
Bache
.

Chronicle)

has joined the staff of
National City East

Co.,

Sixth Building. He was

|
j-

formerly

$500 million. Alberta's black earth•, with Asiel & Co. in New York.

request

i*
•

jl.

Robertson & Morgan

! Montreal Stock Exchange Is
The

Toronto Stock

Montreal

CLEVELAND, Ohio—George H.

agricultural .pro¬
was

Available

With Bache & Co.

Al¬

richly endowed with

natural

adverse
gross

gas

—

nolds Building.

growing

Securities

Canadian

Armfield is now asso-;;
ciated with Reynolds & Co., Rey¬

/>.

addition

Information

Wyatt A.

permit the piping of gas across the
U. S. border.

CANADA

Curb

^266 Notre Dame St., W.,
18 Kin*

Street W.

Toronto

Exchange

Market

Montreal
Queen St.
Ottawa

The Commercial and Financial

Continued from page

would

disproportionately

expand

with

the

that

this

control

The Schuman Plan—lis Hopes,

French

the

reason

why

will enjoy is

the

High Authority will be gov¬
erned in its decisions by political
as much as by economic consid¬

lead one to believe that the supra¬
been obtained by
national authority will consider it erations. The necessity of main¬
from France and partic¬
its duty to bring wages up where taining a political equilibrium may
ularly from the U.S.A.
they are low to the level where frustrate Western Europe of the
The great danger is that under
they are higher.
For instance, possibilities of economic benefits
natural conflict

pressure

ihe Plan

the

<^conomic

interests

wages

will be given

presently

are

higher

France than in Germany, and be¬
publicity, will be politi¬
sides, social charges are more than
cized, and therefore will inflame
about 40% in France as compared
the passions of the public, thus
with 20% in Germany. I am afraid
jeopardizing the political aims of that
politics being what they are,
"the Schuman Plan.
The danger,
the trend will be to increase wages
as I have already pointed out, is
regardless of productivity for the
inherent in the gradual approach
sake of equalizing them. How this
to an economically and politically
will be reconciled with the objec¬
'United Europe, because the bene¬
tive of reducing prices remains to
fits expected from the Plan will,
be seen.
Furthermore, it is not

undue

in my opinion, become real and
■evident only after there will be

quite clear how wages will be ad¬

ministered in the coal and steel
The private
industry without affecting other
enterprises are contending that if
industries.
left alone, under the supervision
There is little doubt that the
of an authority like that created
Schuman Plan contains principles
by the Schuman Plan, they will
and rules designed to foster com¬
be able to get the coal they need
petition and give the proposed Eu¬
by international bargaining of the
ropean community the benefits of
prewar type, without politicizing
a free economy. But the Plan em¬
-the conflict of interests.
bodies also many provisions char¬

union.

complete

acteristic

planned

economy,

due to

wide market and the ra¬

tion of steel

the cost of produc¬
The Plan Purports also to

production in Western

Germany may not out¬
tion.
weigh heavily France in this field.
protect the
consumers
against Herein lies the great French risk,
Malthusian agreements and arti¬ which the French have assumed
ficial increases in prices. If suc¬
boldly and with courage.
in

cessful

Europe,

economic purposes

its

his

book

recent

"Unite

in¬ Perish," Mr. Paul Reynaud has
crease in the standard of living of
tried to argue that the marriage
all Western Europe. One of the
of German coal with the iron ore
immediate objectives of the Plan of
Lorraine, should have as a re¬
the Plan should result in an

-will

also

the

suppression

railroad

discriminatory

the

that

sult

steel

made

difficult

rates, as
goods

However, besides these features
of

the

which

Plan

will

ore.

the

win

applause of the defenders of eco¬
nomic freedom, there is no doubt
that

Plan

Schuman

the

contains

He also

necessary

iron-

that the mak¬
needs relatively few
In contrast, he says, the
argues

omy.

High

The

Authority

have considerable power over in¬
stances

fix

not

clearly

minima

In case of

and

defined,

maxima

reduction of economic
'

activity, it
duction.

can

fix quotas of pro¬

Mr. Monnet stressed

steel to the one, man¬
products to the other.
would * furnish France

Germany

with coal and coke from the Ruhr

re¬

stock

some

Unusual

a new

in the use of
stocks, is the possibility
dogma

demands

cash

for

being

w a

fea¬

ture is that the
dial instead of

Banks
President

if the cash is received the trustee

reas-

Sav¬
Carl

Freese

substantial

■

to
•,

gain wit¬

continued, the April in¬
slightly
exceeding, the
$56,000,000
rise in March. The
April gain reflects the fact that,
crease

in March, amounts deposited in

regular

the cash flow to
meet the benefit payments. If the
contribution of the company fails
merely

can

Con¬

in March

the

least

accounts

exceeded

with¬

appear,

use

balanced investment

program
should
include ' some
short-term bonds which could be

liquidated.
From

project the ef¬
investment

institutional

af.

solely in bonds.

time additional debt is cre¬
If the principal accumula¬
of capital available for in¬

every

tion

the fu¬

in securities in

vestment

ture will be

name.

im¬

very

pressive
graving

en¬

was

the
why

back tells
he

letters

Walter F.

Schag

award¬

ed the watch.

He deserves to be

congratulated,
tell you

and perhaps
what the engraving

will
says.

Schaffer, Necker Go. |
To Be Formed June I

To maintain the

quality of its obligations, a public
utility or any other corporation
should
add
some
equity almost
ated.

num¬

theoretical point of view

it is interesting to
fect

The

unusual

during the early years
of a fund, the contributions by the h i s
employer exceed the outgo so that Soiree
At

Sav¬

Bank

Skaggs

&Co., Ill Sut¬
Street, is
displaying a
ter

bers has

ings

SAN FRANCISCO, Calif.—Wal¬

again probably at the wrong time.

you

Timing by
Walter Schag

ter Schag, trader at Davis,

rolled steel, which drawals but that, unlike March,
it
would
in
turn
process
into amounts deposited in April as well
of the basic raw materials
(re- goods of greater value. In addi¬ as withdrawals exceeded tiiose of
gardless of origin) will be allo¬ tion, this division of labor would the corresponding month in 1950.
cated among all the countries ac¬ satisfy the desire of the French
Portfolio policy of the mutual
If everyone were savings banks during April re¬
cording to their needs. The Plan for security!
contains many of the features of as
intelligent as Mr.
Reynaud flected the more settled condi¬
the ill-reputed cartels. As long as maybe the economies of steel and tions
in
the
securities
market.
there is no United Europe with a coal in the planned
community Funds received from <• depositors
single currency, it seems to me would operate in accordance With were supplemented by drawing
that foreign markets will have to Mr. Reynaud's rational scheme. I upon cash for $34,000,000 as weli
be divided among the countries am afraid, however, that political, as reducing U. S. Governments by
participating in the Schuman Plan. economic and social realities will $100,000,000 and this total was
I wish to express in passing my
not prove pliable to the syllogisms placed in mortgage loans and cor¬
conviction that either Europe will of Mr. Reynaud.
porate and municipal securities,
What then if some enterprises which rose $157,000,000 and
get a single currency or there will
$49,-.
be no Europe. In point of fact, I in the Ruhr, for instance, where 000,000,
respectively.
.

commitments,

having

in exchange for

peatedly the fact that during peri¬
ods of shortages the total resources

heavier

direction

the

great that stocks have to be sold,

ings

what

"Do

said:

As¬

for the first time this year

one,

was

National
sociation

discussed earlier. Jus¬

case

Putnam

subject, the more appropriate
prime bonds, with the believe this quotation to be.
insurance companies heading in

fined

nessed

ufactured

tice

While this special value was con¬

common

million

also
prices. natural

market

Amory

though their will, the capital is at risk." The
considerably
less. more I talk and think about this
even

the

Haven,

la¬

1930's, bonds amply secured

and not in default were carried at

amortized value

Another

The

division of

such

In the

stocks, will be open to question.

New

The

nies

Conn.

bor, concludes Mr. Reynaud, be¬
tween France and Germany is a

seen a

valuihg

form of society will beautiful new
the value of the relics, Omega 17of the past, such as bonds and jewel wrist-

for Western Germany to its

unemployed.

and it can in circum¬

vestments,

again,

Presi¬

necticut

need to fincl work for two

will

special approach used stocks at market.
I find that I often end a talk
the assets of compa¬
with
long-term
liabilities similar to this by quoting" front
as life insurance companies.
the
same
Harvard
College vs.

have

urer,

swer

econ¬

manufacture of steel into finished

centralized controlled

prin¬

than can be
an investment
restricted to fixed-in¬

performance
obtained through
cipal

emerge and

the

dent

and

provisions compatible only

words,

conditions return to the 1932 level

the

workers.

with

true.

period of years, a

the case
the book program
value method, it is not liable for come obligations.
As for our actual experience
any
larger contribution than in
any other year or than if the trust with pension funds, it seems to
me
that the investment restric¬
was composed solely of bonds or
even
if
an
insurance
vary
more
between these
company tions

nth, a ccording to

and

many

reverse

over

better combined income.and

above the company uses

rn o

ing of steel

products requires a large labor
force. Hence this may be the -an¬

the

show,

Mutual

portation of the

other

$20,162,000,000

of the origin.

when

liberalization
of this procedure may be made
When the next pinch on surplus
all-time high of over $20 billion.
comes.
Like so many arguments
in this world, the real solution
Deposits in the nation's 530 mu¬
tual savings banks increased $57,- probably lies in the matter of de¬
000,000
during
April,
bringing gree. I might add here that I am
one
of those who believe that if
them to a new all-time high of

Freese,

materials

raw

high and profits

are

of production.
It is
contract had been used to meet accounts than in the case of many
predict whether the
of our other trusts. For this rea¬
functional approach to a United the pension liability. The annual
contribution can be postponed and son it is difficult to give you the
Europe will create a European pa¬
the
plan still remain qualified rate of return which might be
triotism or whether it will exas¬
considered normal. However, five
perate nationalistic feelings and provided the limit set by the Bu¬
reau
of Internal Revenue is not of the p'ension trusts in my bank
suspicions by the politicizing of
exceeded.
Therefore, the use of showed an average yield (exclud¬
national economic conflicts of in¬
common
stocks does
not prove ing
capital gains or losses) of
terest, thereby jeopardizing the
more costly than any
other plan. 3.86% on book value in 1950, as
chances for a political union. The
You may accept this conclusion compared with 3.30% in 1949. An
conclusion seems to me inescap¬
but then question the justification account of recent
origin yields
able. The answer to the European
of figuring the pension liability 3 Vz % based on estimated current
problems is in an economic and
Another
trust ' over
of the company,
using common dividends.
political United Europe, wherein
stocks at book value as an offset. which we have somewhat limited
economic liberalism will be al¬
It must be admitted that from an responsibility returns about 8J/2%
lowed to prevail.
ultra conservative point of view, on book value so that you can see
It remains to be proven that the the company should add enough the yield varies with the invest¬
gradual and functional approach to the pension trust to make it ment policy and also with the
is the best or even simply a sound whole. However,
the company date the plan started. Based on a
scheme to bring about a United does have the right to postpone recent
appraisal, I find that the
Europe. I think we should give its contribution so that the fund pension trusts over which we
our wholehearted support to the
would become actuarially unsound have control, and which probably
Schuman Plan and be prepared but still have the approval of the represent fairly our policy, had
with a more rational plan, in case tax authorities. Furthermore, we between 33% and 38 % in common

tionalization

Lorraine, on the ground that the
transportation cost of the neces¬
destined for export and those for
sary coal to make one ton of steel
the domestic market, independent is lower than the cost of trans¬
between

page

usually large and then paying

are

Savings
Deposits Increase

thus reducing

stocks

when

Mutual

will do what he is most able to do,

from

Common Stocks and Pension Funds

Integration-~Means with considerable power over in¬
In point of fact, this
The economic purpose of the vestments.
this one should break down. The
plan is to create a wide market by attempt to reconcile the exigen¬
very survival of Western Europe,
■eliminating artificial barriers like cies of a free market with those of
and maybe of the western civili¬
tariffs and import or export quo¬ a planned economy are not unre¬
zation, depends on the realization
tas, and thereby reduce costs and lated to the European philosophy of an
economically and politically
prices. In theory, at least, the of competition and cartels. The United Europe.
Plan aims at fostering competi¬ great majority of European indus¬
that
moderate
tion; we may call it planning for trialists believe
competition. It will attempt to competition is sound, but that
provide for the most economic lo¬ fierce competition is poison for
cation of steel production. To the the economy.
extent that there will be economic
A disturbing
question whichfreedom, the Plan will achieve the comes to one's mind is whether, if
Gain of $57 million in April
greatest and most efficient use of the Schuman Plan provides effec¬
the available resources. Each one
brings total at end of month to
tively for the most economic loca¬
•The Economic

Thursday, May 24, 1951

But this also

explains to you why I think that

to the Plan has

the

which

investments

over

Continued

surmise

one.

the High Authority
rather considerable.

Risks and Dangei

Chronicle

(2160)

by insurance compa¬

nies and trustees of pension

funds,

PHILADELPHIA,
tive

June

Co.

will

Pa. —Effec¬

Schaffer,

formed

in the Packard

Necker &

with

offices

Building to deal in

State, county, municipal and rev¬

bonds, specializing in City of
Philadelphia issues.
enue

General
firm will

partners
be

Russell W.

the

new

Schaffer,

'the

conclusion

•

that

these

reached

can

have

will

buyers

supply some of the equity capital
in order to keep their bond hold¬

''..O

ings sound.

formerly
Carl
and

Schaffer

Co., and
Necker, Charles A. Schaufler
Linford

previously

Cassel,

general

Jr.,

all

partners

Moncure Biddle & Co.

y.-rrd

think that the free

they enjoy natural advantages in

30 % of a

bility of European currencies and
the slashing of quotas and tariffs

the cost of steel, should make sub¬

would have provided

mit them

tional
of

way

The

ra¬

of attaining the goal

United

ently our
Tational.

Europe,

world

but

refuses

appar¬

provisions of the Plan

that

are

become

nomic

expand abnormally?
a

unless

political

re¬

eco¬

tion

MINNEAPOLIS, Minn. —Piper,

been

Seventh

& -Hopwood, 115 South
Street,. members of- the

Parlia¬ New York
a de¬
Exchanges,

such

have

Piper, Jaffray to Admit

Europe Jaffray

and

unity, the French

ment will not tolerate

garding wages and social benefits

Chances

has

per¬

and
on

Midwest

June 1

Stock

will admit

velopment, if the result should be George F. Piper to limited part¬
that the German steel industry nership.

T. W. Pignata Opens

the policy of

full

investment

common

continued

overlook the

stocks.
and

common

discre¬

This

has

not

stock mar¬

ket whenever' cash is added to the

pension fund. We believe that un¬
der
an

JERSEY CITY, N. J. —Thomas
W. Pignata is engaging in a secu¬

bank has been to invest about
pension trust over which rities business from
offices at 240

interconverti-

stantial profits which would

30% Formula

For several years

present

common

which in¬ tional

space

should

111.

vestment Co. have
space

.stocks

;

Larger Quarters

CHICAGO,
office

uncertain conditions,

investment program

cludes

Harrison Avenue.

—

Barclay

I
In¬

increased their

50% with addi¬
next to their present

offices at 39 So. La Salle Street.

Volume 173

Number 5014

; The Commercial and Financial Chronicle

(2161)
Continued

from first

;

page

;

unless

pre-tax

entire

industry

the

Outlook for Stock Prices
Today

have to be

you

combina-

tion of economist, political analyst

(domestic and foreign), psychologist and sociologist, as well as an
expert in a host of industries,
Sometimes I wonder how anyone
of us can qualify for the job we
hold and the responsibility we assume.

However, thinking about
discussing the various aspects
of the problem always helps to
clarify one's mind. So let me offer
and

of my

some
we

thoughts and perhaps

arrive at

can

reasonably in-

telligent conclusion
for stock

the outlook

years from 1946 to 1949.

tax and

^11^hlpcurce

know, we are dealing very powerful factor. It virtually
market, a free and highly weds the investor to his blue
sensitive market, controlled solely chips, and his, in turn, puts a
by demand and supply, neither of certain scarcity value on such
is

^
'""ation

k°und to be
controlled
not controlled.

are

J'r„L™ 5

stocks.
, h i
gSu°f
All this could change virtually
° „Pr^f,c
,
e, y
development, any sudden shift in overnight,
of course, if there J™ u«
nfl tim wffl f
sentiment, is apt to upset the should be a major turn in business
^eaTethe budget defkit' and thus
market's tenderly balanced equi- prospects.
And here is where we "®>s® ine Duaget deticit and thus
lin.i,™
have to resort to crystal-gazing.
librium.
widen t h e inflationary gap —
fully measurable.

thermore,

Fur-

any unexpected political

investment

strong

which

demand,

Crystal-Gazing

attracted

by
high and
wellsupported
dividend
yields, has
been pushing up stock prices since
v

the middle of 1949.

This demand

has lost much of its urgency since
the beginning of 1951 largely as a
result of the rise
deters

the

in prices which

individual

However

investor,

persistent,
though
reduced, investment demand con-

'it

tinues.
the

best

centered

oualitv

largely

come

investors.

The

investment
stocks

perhaps

for

from

mutual

million

pension

trust

and

vestors,

and

life

from
in-

corporate

non-recurrent de-

$750

over

insurance

to invest in

million

companies

have iust recentlv

market

funds,

each

nearly $100 million
insurance
companies.

There is also
mand

been

million—

$800

$250

from

common

has

source

over

million

$225

annual

recurrent

this

seems

fostitutionM

demand

from

estimated

and

from

stocks

which

been nermitted

stocks.-

common

value

from

The

listed

stocks

the

risk

being

what

started

of prices

law has
wrong tomorrow morning I pre- .been attempted since the dawn of
dict tnat Russian will not start a history. It has always failed be-

tilis year unless seriously cause it involves a logical fallacy,
Provoked. One such provocation Inflation occurs when the effecWC)uld be, in my opinion, the re- tive demand exceeds the available
West

Another might be British military

Never-

now.

theless, let

us assume that the pressure
Present "cold war" will continue
Right now, when
,

ior the ^me being.

.A year ago our military expenditures were at the annual rate of
about $13 billion. The present
rate is probably close to $30 bilhen. By the end of 1951, I estimate that we will be spending at
rate of better than $45 billion,
oven ^ the Korean War should be
brought to an early conclusion.
h has been said that Washington

goods

becoming

increasingly
concerned
about declining sales
and
rising inventories, it may
seem unrealistic to talk about inflation. Yet, inflation remains a
are

threat of potentially serious
portions.

pro-

the

Curtailing Inilation

;

•

It is commendable that the
Administration is taking steps to
prevent, or at least control, furBut there

are

only

tional

cushion

demand

factor of considerable

taportance
suffer

this institu-

year,

investment

becoming

V—.WWW

~is~"changTng 'hands~ during

course

It may well serve
the

market

Aside

from

occasional

flurries

1+.

;

common stocks
hns
sxocks nas

been
oeen consoicuconspicu

Tf^the

one

reasons

why I doubt that we have
already reached the final phase of
this bull market which is normallv

characterized by hectic speculation
in marginal securities.

Only Moderate Increase in Stock
Supply

spending
a

there

far

has

increase

moderate

been

the

only

overall

Xpirof Stocks
prices

were

As long as stock
low and senior capital

could be raised

ning
put

unattractive.

This

interest

costs

tax
on

rates
self-

have

risen

appre-

loans are
harder to get.
On the other hand,
stock prices have reached a level
where equity financing has become
considerably more attractive. As a
result,

and

long-term

increasing amount of
stock, or senior securities

convertible

into

stock, is
coming into the market.
The
other
source
of
supply,
common

now

business

snottv

gross

may

will

ness

over

outlook.

butter than

well

possibly

can

con¬

Taxes and Earnings

Although income taxes will
be

boosted

few

index

Fverv

disposable

income,

This does not necessarily

PP y

encourage-

shocking results.

Despite

industries

mean

will

further rise in wages

(including

fringe

benefits )

I have emphasized this question

Too few people have

and
even affected business enterprises
don't seem to appreciate fully the
viciousness of this "ceiling price

not only because I consider it a
basically wrong and stupid antiinflation measure, but to waim
you that the effects on earnings
of affected corporations can be

regulation"

very

this

been

little.

elaborate

paying attention to

cover some

which

it,

intended

This order, CPR22, is designed
roll

tured

back

goods

permitting
higher

prices

and

only

material

the near-term busiOne

reason,

un-

for

costs

doubtedly, is the unabated fear of

research, etc. Price increases will
not be permitted, unless a company is actually losing money or

cor¬

high-grade

bond prices

not

foresee

anything

than

a moderate
decline in divi¬
dend payments this year—there is

incentive

ments

for

from

shifting

invest¬

stocks

common

into

bonds.

Although I
the

fact

that

fully

the

Dow-Jones

aware

in¬

dustrial

average
has
advanced
than 100 points in less than

two

years, and although I know
that many market technicians find
bearish indications in their

charts,

cannot reach

clusion

pessimistic

con¬

the

general market.
Without trying to straddle the is¬
sue, I should like,
however, to
emphasize "general market." The

effects of material
shortages, price

profits taxes, etc.,
to industry,
to company.
Dis¬

excess

from

industry

company

in
the
selection
stocks is most important.

The short-term market

should

concern

the

outlook

investor

only

ings

good-sized

can

the

still comfortably support

present level of

Furthermore,

stock prices.

dividend

the

pay¬

outhas been

low, tha^ evem a

20%

corporate

decline
not

necessitate

profits

general

reduction in dividend payments.:
Just
a

and

word

one more

subject that is

little understood.

inflation,

much discussed,

eral Reserve Board's

The Fed¬

victory

over

temporary deflation to a re¬
sumption of inflation, from black

ink in the Federal

reaction
during this
period, but I would be surprised
,

if this reaction would be much in
excess of 15%
in the Dow-Jones

industrial average, bringing prices
about to the level of last Decem¬
A possible setback of such

ber.

proportion

important

trader

those

and

investor

can

general acclaim.
To permit the
price of government bonds to de¬

but to ignore it.

What

important is that banks

insurance

and

companies

have

loss—which
they do not like to do. But with¬
out

selling governments, they do

not have

funds to grant commer¬

industrial loans which, as

know, have been partly re¬
sponsible for the inflationary out¬

burst

after

Korea.

Credit, while
still "cheap," is really tight right

opinion

afford

has

for

with

awaiting investment, but
term

the Treasury Department deserves

less than V% of 1 % in interest rates
is comparatively unimportant.

budget to red

It is quite possible that the
market may experience a

stock

funds

long-

to,

little

and

choice

Edwin S. Dwelly Joins
A. C.

Allyn & Co.

(Special to The Financial Chronicle)

BOSTON,Mass .—Edwin S.
Dwelly
has
become
associated
with A. C. Allyn &
Company, Inc.,
30 Federal Street. Mr.
Dwelly

was

recently

with Waddell & Reed,
Inc. and in the past conducted his
investment business in New

own

York.

N. Y. Curb Elects

regular

board

York

Curb

meeting

governors

the

the
New

Exchange, John H.
Crago of Smith, Moore & Co., St.
Many analysts point to the re¬ Louis, Missouri, and Paul Jules
decline
in
the
cent
commodity Gordon of
Nielsen,
Gordon
&
price index as well as the decline Hall, New York City, were elected
in bond prices and, remembering to? associate
membership.
The
past experience, conclude that the board also accepted the resigna¬
now.

that

sure

rect.
are

this

As far

conclusion

commodity prices
I

new

high before this

With Marache Sims
(Special to The Financial Chronicle)

ex¬

pect the commodity price index to
be at

Smith,

Moore & Co., St. Louis, Missouri.

cor¬

concerned, I believe that this

is merely a temporary dip.

tion of Charles W. Moore of

year

•i LOS ANGELES, Calif.—Robert
A. Rogers has joined the staff of

tured goods, especially television
receivers,
household appliances,

textiles and

their lows.

glut

comes

now

certain

manufac¬

also automobiles,

manufac-. is causing much concern not only
pre-Korea levels, among the manufacturers, dealers

adjustments

wages

thinking is

Marache Sims & Co., 634 South
Spring Street, members of the
it Los
Angeles Stock Exchange.
is my opinion that, for the time
being, they are at or very near

serious!

The

75,000 industrial firms,

Ceiling Price Regulation
to

ink.

hurt by one of the most discrim- not only a futile attempt at

yield

decline

over-all decline in corporate prof¬
its of some 10 to 20%, such earn¬

cial

but is trying to cure symptoms.
Trying to limit, or even roll back,
be prices of some goods without pro-

hurt by taxes; still others will be

should

recent

from

The Administration, however, is
not confining its activities to the
removal of the causes of inflation,

hurt by shortages; others will be hibiting

fi¬

necessarily presages a decline in
stock prices. As long as
average
stock yields hold above 6%—and

crimination

con¬

its

does not rise
appreciably
3V8%, then I question that

earnings, generally, had been con¬
servatively appraised by the mar¬
ket, and even if we allow for an

lmP»rt restrictions,

that everyone will be very happy,
or that profits will be universally

Some

the

and

without registering

on
wage
rates,
increasing sunnlv
are

Jaryq goods and the lifting of

consumer spending—all will be
higher at the end of 1951 than at

this time. ;

bonds

above
the

line

per¬

lid

™nt of production of non-mlli-

national product, industrial

production,

If this

rect,

soon

centage points, even the rates al¬
ready in effect are producing some

success

nancing operation by questionable
practices.

vary

been placed in a position where
they cannot sell government bonds

tight

&
limited largely to the

liquidation of investment hold- which have occurred up to March
ings, is not yet showing much of 15, 1951,
No adjustment is alan
increase, despite tempting lowed for overhead costs such as
capital gains that have accrued, depreciation, general administraand
despite considerable appre- tion,
clerical and selling costs,
hension

have all the guns

we can

might need

state and ^municipal authorities,
and

believe it will oe.
talking now 3bout

un~;.npC!S

primarily taxation, limitations

?n credit, encouragement of savthese *Pgs> utmost economy by Federal,

Prosperity
it

power

overall

with

helieve

cuitailing buying

means of

are

visualize

oe spotty.
But wg

common

not

can

Prospects in sigh.

begin-

financing out of retained profits,
ciably

sion that
we

inatory government edicts, known controlling inflation, but unfair
as CPR22, supplemented by Mr. discrimination against various in- major stock market trend too will
soon turn downward.
I am not so
equity finane- Johnston's "fair profits standard." dustnes.

change.
High
definite" limit

to
a

wholly unjustified impres¬

easily and cheaply,

corporations found

ing

Washington has

money,

P^tty good record.

good.

ates the

In this one respect we can ing effective buying power; and cline below par has been the most
f u 11 confidence in our (2) by increasing the supply of effective brake on further credit
Administration; when it comes to wanted goods and services. The expansion. The actual increase of

This

advance

would, in my opinion,
be most helpful in curing the pres¬
ent inventory surplus which cre¬

PPar.

letdown

the purely speculative demand for

ment credit

bave

should

sharp decline.

contributing
factor was a delay in placing de¬
fense orders by the armed forces.
A temporary relaxation of install¬

would

mwsnliii* inflation

being ther inflation.

are

down

come

has been slow in spending money
°n defense.
Some of our present

inventory troubles

many retailers
manufacturers of consumers'

and

down.

the

supply of goods and services.
It tinuing increase in volume it will insofar as it may affect his buying
be virtually impossible for
the policy.
Right now we are in a
should be obvious that the balance
can not be restored by price re¬ great majority of corporations to transition period—transition from
ductions.'
On the contrary, it maintain their recent rate of earn¬ a peace economy to a defense ecnmerely intensifies the inflationary ings. Fortunately, however, these omy, from surplus to shortages,

Germany,

intervention in Iran. A third one,
in the Far East, is being discussed
in Washington right

stay

hardly afford to

can

jeopardize

war

armament

and

magnitude,

controls,

about
shares

sume.

Control

proven

people that prices will

out

prevent.

the

since

production

reduced

;Fles- .The long-range effect of
the price-control order as an m-

miss a few dividends
This consideration is a

may

which

Secondly,

you

with

of the three best

comes.

many items which now are avail¬
able in such abundance will be

automatically by the
This order exempts important
impending curtailment of mate¬
inflation and' the
absence
of:.industries, such as agriculture, rials needed for military produc¬
attractive substitute investments. forest products, fuel, metals, tion.. Thirdly, people will resume
Another reason is the fact that chemicals,
textiles and foods buying when they realize that no
even now average common stock which are being covered by spe- further price concessions can be
yields are double the return C111C regulations.
Labor, too, is expected.
obtainable on high-grade bonds, covered by special regulations the
This whole situation is most un¬
Third, many investors shy away elasticity of which will be in di- fortunate. It is due to the belated
from the capital gains tax which rec'; proportion to the political tightening of ^installment credit,
they incur upon the realization of P^ssurek that can be exerted, the government-inspired inflation
a profit.
The man who bought CPR22 discriminates against the psychology which was largely re¬
Standard Oil at 50 will not sell at manufacturing industry which sponsible for last winter's buying
110 unless he is reasonably sure of
£.s,
P°tent political power hysteria, and to Mr. DiSalle's
buying it back well below 95, which is enjoyed by labor, the promise of price roll-backs which
because he has to pay a 15-point
^
exempt mduB- raises false hopes in the minds of
besides.

prices.

average

earnings of; the
fall below 85%

With

term

end.

regard

to bond prices,

The yield on the long-

Victory

2%s has come up
to about 2.70%. Any further ma¬

With Rockwell-Gould

ELMIRA,
Thomas

has

—

become

Gerald

affiliated

and retailers who are directly af- terial rise in the yield could lead with
Rockwell-Gould Co.,
Inc.,
fected, but also among investors. not only to a wholesale cashing of 159-167 Lake Street.
While this condition is bound to savings bonds, but possibly even
result in a sharp decline in earn- to a "reconversion" of the
recently
With Waddell & Reed
ings for the second and possibly issued non-marketable 2%s. In¬
(Special to The Financial Chronicle)
the third
quarter of 1951,
vestors who accepted the Treas¬
one
should not get overly alarmed, ury's exchange offer would ques¬
BEVERLY HILLS, Calif.—EmFirst of all, inventories are not tion that it was made in good faith. mett E. Hinkley has been added
greatly out of line with the pro- The Treasury,' which is facing a to the staff of Waddell & Reed,
jected level of consumers'
in¬ refunding program of tremendous Inc., 8943 Wilshire Boulevard.

Financial Chronicle

The Commercial and
22

Continued from page

$219 billion for the rest of 1951, or
about 8% above the high figures

for the

Security Markets and

issue of "Monthly
Comment on, Transportation Sta¬
tistics" released by the Bureau of
Economies and Statistics of tne
Interstate Commerce Commission
May

and inter¬
statistics re¬
losses 'sustained by

has some enlightening

esting comments and

the

garding

railroads

the

passenger

have been re¬

railroads

the

1936

their

Beginning with the year

services.

service

factor

which

last

revenues

were

year

that

considerable
quarters of the

been

has

There

criticism in many

Commission formula for the allo¬

cation
the

that

claimed

service

as
between
Specifically, it
if the passenger

expenses

services.

two

billion, com¬
pared with the record of about
New York City dropped sharply $221/2 billion estimated for 1950,
last week and are at low levels. $17 billion in 1949 and $21 billion
There can be no problem of in 1948, and an average of $4 bil¬
lion in the 1936-1939 period.
forced liquidation.

$107 million
to prior years.

attributable
million were deducted
1950 results there would
remain a deficit-of $615.5 million

If this $107
from the

Stocks

net operating income
This would be only
5.2% below the 1949 deficit and a
in passenger

Long-Term Outlook

for last year.

to be eliminated en¬

were

of the dollar).

approximately 16% ahead of
a
year earlier and less than 1%
below the all time peak estab¬
lished in 1943.
In other words,
was

work on and most railmen them¬

Book value.

(d)

Earnings.

(e)

Stock yields vs. bond yields.

Aiso,

stock

of service.

the re¬

To quote from

port regarding 1950:
"Attention

called

passenger roads as Pennsylvania
and New York Central have been

that the operating expenses

tant

operating

total

72.7%

sisted

ex¬

Commission formula

significance.
of accounts
has
been
requiied, there have
been consistent losses in the passeuger
services except for four
years
(1942-1945) during World

is relatively of minor

Since the separation

War

The deficit in

II.

net

oper¬

and

gave

again

way

1946.

r/f,

the FRB Index of Industrial Pro¬
duction—now 223—while

consolidated

likely to

perhaps decline a

hit

all time peak of $649.6

lion in 1949.

was

mil¬

some

im¬

last

Glore, Forgan to Admit

tween

1949

and

1950

senger department was

the pas¬
more

ap-

Manero

Partner

Alfonso
on

Manero

June 1.

Election
and

George

William

Board

Mr.

Selected Situations at all Times

the

Foremost

was

Textor

President

Co.

Trust

Director

Marine

Averages

earnings.
are

This
very close to the all-time low
and compares with price-earnings

the

Committee

and

of
a

D-J Ind.

Date——

Bosch

Allen

May
Apr.

29,'46
28,'42

;212.50

22.8
7.8

Mar.

31, '38

9.32
11.98
10.50

the

Director

NOTE:

Company,

with

investment

92.92
98.95

7.0
8.1
10.0

on
our

estimated at
billion, well above the
This

1950.

expenditure,

class

with a
still high level of building activity
and high public purchasing power,

coupled

spell favorable levels of demand-

particularly

when huge govern¬
expenditures
are
super¬
imposed upon private demand.

ment

(3)

Important

sources

new

and,

values

reference to the liberaliza¬

amortization during
Thus, book values
considerably below present-

tion of the New York law
last year.

(d)

day actual values.

bonds.

term

The

insurance

for

funds

(2) It is probable that one of
the most important factors per¬
tains to the depreciation in the
dollar.
As indicated above, the
rise

stocks

indeed

has

low..

1951

after-tax

lower
appears

porate

■

income,

will

However,

after

adjusts

opinion

of-living increases, tends to result
in higher prices, particularly since
not fully offset by higher produc¬
tivity.
The current press indi¬
cates
that President Truman's
current
efforts
to
appease
the
labor leaders means that the wage

again be punctured.
will endeavor to
corporations passing this on
will

ceiling

The government

limit
in

form

the

of higher prices,

ex¬

show hard¬
ship.
However,
it must be
recognized that over the long term
higher wages, which is the pri¬
mary
factor in cost, must be

cept where they

reflected

can

been the

has

Huge government expenditures
for an indefnite period.

lie ahead

tax increases; this will
an unbalanced budget and

government

While in

toward

income

(albeit

will

mated that,

cushioning factors of

higher

individuals

tend

militate against an

important de¬

cline. i

/f
Conclusion

light of the historical record,
which shows that over the long
pull

stocks have been a
medium than

common

investment

better

bonds

(despite the greater short-

term fluctuations in

equities), plus

the evidence that stocks on

tistical

basis

sta¬

overvalued,

not

are

plus the fact that the fundamental
long-term economic outlook points
to

further reduction in the pur¬

chasing

dollar,

the

power

equity investment is believed to
be

highly suitable medium for
investors.
Over the
long pull, stocks provide an in¬
flation hedge not offered by bonds
and, in addition, afford a much
higher rate of return.
%
a

long-term

IDisposable
sonal

income

Personal

income

proximate
time

income

individuals
for

1951

$247-$250

high.

equals

lessi taxes.

likely

billion,

will

ap¬

all-

new

''f-

O. H. Wibbing

per¬

gross

•

Adds

(Special to The Financial Chronicle)

ST.
meyer

LOUIS, Mo.—Carl K„Ries-

is with

Wibbing &

O. H.

Co., 408 Olive Street, members of
the Midwest Stock

Exchange.

Thus,

(Special to The Financial Chronicle)

LINCOLN,

Neb.—Emil

Fa-

feita is with Waddell & Reed, Inc.,

Barkley Building.,,

dollars

With Smith, Clanton

dollars)
is

about

(Special to The Financial Chronicle)

esti¬

GREENSBORO,

based on present rate

rate

Joins Waddell & Reed

disposable

depreciated

annual

invest¬

which

character

ment

unfavorable com¬

personal taxes, disposable in¬
come of individuals will probably
at

perhaps $800 mil¬

These factors do not point to a

the form of
lines retail

taxes. be

sharp rise, but rather are defensive

many

continue.

means

pumping more

parisons over the short term, the
basic fact still remains that the
trend

this

lion.

into the credit stream than

taking out

common

potential additional de¬
mand of

in the past.

case

buy

Some sources esti¬

that

mate

prices, just

increased

'to

their

been

matic annual increases, plus cost-

sales will make

safe to predict that cor¬
net

recognized that in
earnings

factor.

taxes.

9.4

than .1950.

one

thus

funds

6.3

May,

is widely

moderate

companies
portion

stocks.

common

mean

represented
the
then
April, 1942, and
March,
193&,
represented hear, .market
lows.June,
1949,- represented a
bear

utilize

This constitutes an

sources

legislation in
permitting

current

New York State

basis for utili¬

investment

tutional

profit-

the past war.

investment

and

Common stocks for trust in¬
vestment, with particular

(c)

emergency

are

Pension funds
sharing plans.

(b)

considerably

are

replacement

Despite

1946,
bull market high.

Corpora¬

Director of E. & G. Brooke
&

Earnings

;

Co.,1 and is associated

bankers, Nevv York,

Times

Rate

25.84

Earnings

Average

161.60

Fuel

bearing

direction

billion of

$18.6

also, that plant account is carried
at
very
low levels because of

13,'49

April

market

the ^American

dates

follows:

12, '50

American Bosch Cor¬
Fidelity Safe Deposit
Chairman

other

various

June

and

Colorado

ratios

recent years as

June

Fi¬

Iron

sold 15 and 16 times
At the present time,
selling at only 7 times

Vice-

Mr.

the

Midland

Harder

tion,

Members Nat'l Assn. Securities Dealers, Inc.

example, at the annual mean
base
period
1936-1939,
stocks in the Dow-Jones Industrial

Feb.

Co., and other corporations.

Telephone BOwlIng Green 9-6400

low levels in relation to earnings.

250.83 $35.64
255.71
31.38
288.38
22.92

Executive

the

of New York,

Iron
Co.,
poration,

nance

New York 4, N. Y.

selling at

6, '51
13,'51

elected Chairman

- « • I

25 Broad Street

are

Textor

Harder

Directors

market peaks.

stocks

of the Finance Committee.

SECURITIES

by the higher price level.
Put¬
ting it another way, stocks at the
present
time,
on
this adjusted
basis, are'well below the levels
that obtained at the 1929, 1937 and

earnings for the year 1951.

Harder also

RAILROAD

changes

For

Dairies, Inc., was announced by
Paul E, Reinhold, President. Mr.

Specialists in

for

Similarly, stocks

Named Directors
improvement be¬

adjusted

the

movements

the

1946

Glore, Forgan & Co., 40 Wall
Street, New York City, members
of the Nevv York Stock
Exchange,

million.
The indicated

movements of the stock mar¬

purchasing power of the dol¬
lar, illustrate some interesting
things.
They show that based on
the cost of living index, taking
1935-1939 as 100%, there was a

major

and

about $23.5

the

209 South La Salle
Street, members of the New York

of " con¬

overall economy, are

been

market

Co.,

will

year

values

below

for this
that for
many
reasons,
the
long - term
trend of commodity prices and of
Glenn R. Miller
the adjusted level of the market
cost
of
living
will
be
upward.
is considerably
lower, reflecting
CHICAGO, 111.—Glenn R. Miller
For one thing, the growing im¬
the fact that a part of the actual
will become a partner in Cruttenincrease in stocks is accounted for portance of labor, with its auto¬

admit
when the
passenger service
net operating partnership
income deficit declined to $508.5

provement
h

There

book

The

high degree of correlation between
1920 and 1941.
Since that time,

den

have

level

ket

•

to the deficits
Subsequently the

deficits increased year by year to

sell

means a

level

Suffice it to say that at portant in light of the significant demand for common stocks have
the present time stock prices are reinvestment in assets over the been
developed.
These are as
below their normal relationship in past decade (earnings in excess of follows;
comparison with the level of busi¬ dividends paid out).
(a) Open-end investment comness activity.
(It is believed that
panies.
Further, it should be noted that

raw

ating income for passenger serv¬
ices increased from $233.3 million and
Midwest Stock Exchanges,
in 1936 to a prewar top of $262.1 June
1.
million in 1940. By 1943 this had
been converted into a profit of
$279.8 million. The profit declined
in each of the two following years

advisable

the

This is particularly im¬

important
underpinning
to the
trend of the buying
market, particularly in light of
power
of the dollar has been the
increasing emphasis of insti¬
downward.
Charts relating the

services. These per¬
centages have varied but slightly
from
year
to
year
from
1936
through 1950." It is obvious, then,
that what margin of error may
the

made

capita

higher

tionships.

ments,

and passenger

been more

turning points which would

equities.

certain intermediate contra move¬

proportion of operating expenses
that were common to both freight

exist

asset

and

has

which

of perspective, we zation of
equities continues highly
analyzing some inter¬ favorable in
light of the bondesting charts correlating the stock
stock ratio.
The yield on prime
market levels to the cost of living.
stocks is almost
times the yield
It is interesting to note that over
obtainable on high quality longthe past 50 years, subject to only

the

and

values

such

living, which

the

(2)

expenditures.

For purpose

reported for such services
remainder (27.3%) con¬
of the passenger services

penses

toward

eted at very high levels. Accord¬
ing to reports filed with the SEC
these important expenditures,

stock

extended have

discussion to cover all these rela¬

have

solely to passenger and allied ser¬
vices amounted to $1,257.7 million
or

and

Expenditures by business for
plant and equipment are budg¬

high level
important

increase

demand, and

per

sumer

characteristic of periods of market

ately higher.)

Admit G. R. Miller

higher

intangibles or
going - concern values.
At the
present time, the relationship be¬

few

Gruttenden & Oo. to

reflects

the

trend

standard of

upward depression rather than of impor¬

term

definite

the

points

other

two

One

increase in

high in relation

were

confidence

subsequently work its way moder¬

the fact

temporary

scare-buying

population, with the concomitant

values, inasmuch as such

capitalization

hard

can

the

offset

consumer

are

factors/

selling at low levels
asset values.
His¬

condition

tween

require

It .would

prices

asset

channel of stock prices.

traced
specifically to the individual type
Expenses

located

its

There

turning

values- is

long

(f) The

service has been more
profitable than it was even during
the peak of Word War II. Over¬
all results are being dragged down

$20

are

relation

torically,

points
in
the next few
pressed to keep pace earn- months, probably will maintain
as brought out in the Bureau re¬
ingswise with the industry as a itself at favorable levels over the
port, a large proportion of the al¬
whole in the postwar years.
intermediate trend and, in fact,
selves consider it adequate.

outbreak

market have been witnessed when

(c)

the freight

the expenses allocated to
by
passenger
operations.
Last
that
phase, particularly in the
year the passenger service deficit
maintenance
of
way
accounts,
absorbed 32.9% of the profit from
would not be similarly eliminated.
the
freight
business, compared
There may be considerable valid¬
with 48.6% in 1949 and 35.9% in
ity to that argument but the fact
1948. With this background it is
remains that ihe Commission for¬
riot difficult to see why such large
mula is the only one we have to
tirely

earnings may

after-tax

1951

approximate

the

It is believed that over the long
under
ICC
accounting
rules, to separate operating ex¬ larger deficit than had been sus¬ pull stocks will attain levels sub¬
tained in any prior year except stantially above present levels.
penses, railway taxes, equipment
rents and joint facility rents be¬ for 1949.
(1) Stocks are not overpriced
In
contrast
to
the passenger
tween freight service and passen¬
on a statistical basis in relation to:
service
deficits,
freight service
ger service.
Included in the pas¬
(a) Business activity.
net
operating income last year
senger service is mail and express
(b) Cost of living (depreciation
amounted to $1,547.8 million. This
and other head-end business.

quired,

effects

market

the

some

was

right to anticipate in the face of
many
domestic and foreign
uncertainties.
Brokers' loans in

by roughly $149 mil¬
lion of retroactive mail pay.
Of
amount,

and

than

Further, the will be better than any year in
itself has our history excepting only 1950
It is likely
better than anyone has had and possibly 1948.

been

augmented
this

important de¬
continuance,
expected, is likely to

mand

sale.

out-and-out
action

The passenger

real.

parent than

This

at various times since the Korean

Railroad Passenger Losses
The

comparable period of last

year.1

Business Outlook

Thursday, May 24, 1351

(2162)

SlawsOn

C.—Daniel

has become affiliated

with Smith, Clanton

& Company,

Southeastern Building.

Volume 173

Number 5014

Continued

from

The Commercial and Financial Chronicle

ties

metals

when

proposition, and
add up the industrial

you

capacity and natural resources of
we can expect fair arrangements
the free world, you will find that
it retains

strong advantages

over

the slave world of communism.
At the same

the

there is

you

assure

will

cause

fortunate

better

have been.

Western

Europe suffered the direct impact
of

The

war.

France,

cities

Italy,

Holland

Britain,
Bel¬

and

mind

some

Western
to

the

Europe

had

only begun
they found it

when

recover

nations

necessary to arm

again.

once

practice to sing:

America."

Out

heart,

our

"God

the

should

sing:

Hath Blessed America."
When

States,

returned

"God

the

was

United

hue-and-

the beef price rollback.
Washington was
invaded
by a
small army of cattlemen and their
neces¬

effort to stabilize beef prices.

sary
I

against this

could

this

not

help

demonstration

but

compare

with

the

pa¬

Russia, there

and

television

cut

back

and

single

ham¬

and

they

Lucky

We!

are..

not

cattlemen,

unique.

Congress

course,

the

housing

buy them.

good-sized
the

Soviet

satisfied

living

space

the

ordinary

When

President, the
the mobilization

hear

their

thoughts to

who

tempted

are

time

take out this

and
our

solemn

resolve

power

save

the agony and
world war.
We

owe

this

our

tions still unborn.

caped death from

country

being

called

upon to make.

winter, when

their

legs

and

arms

From one

The

mobilization
burdens

Now the weather in

point of view, this is

sign.

good

aim
all

among

defense
distribute its

segments

the

population, in order that they
may be borne fairly and equitably.
So, if all groups are yelling, it
must mean that they are all being
bit and this is

it should be.

yells when Congress completes its
new
program
for higher taxes.
higher taxes
elfective

other

with

means

and they should

measures,

of the most

one

are

fight inflation,

It is

painful to

$50

power,

out

to pay $5
the tax

his

chasing

flies,

excess

pur¬

competing

for

supplies of goods, that
prices to soar.
So

their

without

even

com¬

forced

Amerada :il~

AUUi__

Gulf on

Sun

Co.

Skaggs Go.

Dow
du

Securities..

Tel

rest

enjoy the comforts of
the blessings of liberty.
in

war

Korea

there

front.

Often

arguments

were

whether

this

that

done.

thing

was
worth
shorten the

should

to point out that

used

fair price level.

Now

have

777/—

Chemicals

group.

X'7

•

-7X7'.

oil

trusts,

■

—

7:7

—

■■

—

l.'..

V'7

securities constitute the

the other favored classifica¬

are

chemicals

are

the largest

largest holdings.

Inasmuch

Christiana Securities is

investment trust whose

Emmet

this

hold

Whitaker

security

stock, many institutions prefer

common

rather than

When

Pont.

holdings

are

considered from this point of view, du Pont and Standard Oil of

the

men

-7 7
-

V':

—

investment

principal asset is du Pont

for defense.

the

—

5
7

daily,

yes, hourly, reminder of why we
have embarked on a national pro¬
gram

second

—

Among the five companies oils

and

";-,y

Union Pacific

the

—>;> • ■
—
—

soldiers,

that

the

3
1

■

—

Tel., &

with

'■

Carbide

our

No. Amcr.

—

Ins. Co. of

Insur.

-7

...

may

The

4
—

Home

77.7

tion.

life and

4
—

Fire

—

Chemical

American

—

Pont

Hartford

—

Oil

Texas

most favored

of N. J.

munist
of

American

able
conditions, have just gal¬
lantly turned back a bloody Com¬
so

Great

I'heni.v

Humble Oil

under these miser¬

offensive

Also shown is the relative

Fidelity-

Kennecott Copper
:Philadelphia Electric...

And

live

position of the security in the holdings, that is, 1, 2, 3, 4, or 5.

that

hell

held for control

were

similar purposes have been eliminated.

constant

Pont, International Busi¬

uniformity in the types of securi¬

Securities which

the

shattered land would be
earth

other

shown.

are

IBM

Life

casualty insurance

panies

into

mud.

Oil, General Elec¬

In the following tabulation, the five stocks which made up the

Guaranty Trust "J----.

sticky

Paper,

largest individual holdings of five of the major insurance

The rains have

doing

message

SAN

FRANCISCO,

sion

general

Emmet

Skaggs & Co.,
members

Stock

Whitaker

partnership

Calif.—An¬

New

nouncement is made of the admis¬

war even
one
actually what a man loses in would
higher taxes, he may more than minute.
Why, in one minute a
gain back by the establishment of thousand men might die.

Ill

the

Gulf

Oil and

with three companies

Davis,

Sutter Street,

Union

listing them

Carbide
among

are

also

popular

very

their large investments.

There is considerable difference among the other large hold¬

Francisco

San

Jersey are among the largest holdings of four of the five

companies.

ings with

Exchange. Mr. Whitaker has

none

of the companies showing the same security among

its first five.

been with the firm for many years
in the trading department.

7-7.'

Changes in the market since the end of last

year

have

.7,
un¬

doubtedly altered the relative size of the various common stock

John O. Greub Joins

that

holdings.

strongly,
Walston, Hoffman
namely, that if we do this mob¬
(Special to The Financial Chronicle)
And, while I am speaking of ilization job as it should be done,
SAN FRANCISCO, Calif.—John
gripes, I hear a good deal of talk it might prevent the greatest'ca¬
O. Greub has become associated
about
confusion
in
Washington! tastrophe in the history of the
with Walston, Hoffman & Good¬
Of
course
there's
confusion
in world.
7rvr -v.^v
265 Montgomery Street,
Washington.
How can we avoid
What greater objective can men win,
members of the New York
and
some confusion in so big a job as
have than to do all in their power
San Francisco
Stock Exchanges.
we
have set out to do?
But I to prevent World War III?
7.7/
He was formerly with E. F. Hutdon't think we have a monopoly
Our memories are pitifully
ton
&
Company and Davies &
on
confusion.
In this springtime short.
Do
you
remember that
when
everything grows lush, I more than 300,000 Americans died Mejia.

However, because of concentration in oil and chemicals,

which have

should appeal even more

/ Confusion Democratic

selected list of fire and

begun to turn the roads and fields

that

Oil of New Jersey,

Standard

Union

did

pocketbook

power,

In Davis,

International

cipal holdings of insurance companies and the investment trusts.

Korea has

hot and our
by nauseating
mosquitoes and the

following five stocks in order

Machines, Union Carbide and Standard Oil of California.

Christiana

tortured

excess

higher prices.

causes

man

but if he

this

render

limited

odors,

While there is considerable

Emmet Whitaker Part.

In the last war, I served with
not sur¬
purchasing the War Production Board and my
far larger sums might be job was to see that weapons got

collector,

taken

$100

unbearably

are

ever-present rats.

be considered in

this light.

turned
men

peril of death.

There will be another chorus of

Combined

of these

way

ties held there is variation in the stocks which constitute the prin¬

enemy

bite.

7Healthy Yelling

held:

Slandard

fire lost
from frost¬

holdings, prefer in the

the largest investments:

dead who

who es¬

many

what investment trusts

tabulation of holdings of closed-end

honored

cold

see

companies shows the following five stocks to be the most widely

third

that

the

interesting to

companies, two of the oldest and most impor¬

Oil, Amerada Petroleum, Gulf Oil and Texas Com¬

-A tabulation

being assailed every
day by groups wno are protesting
against the very meager sacrifices

are

favor who

tric, Gulf Oil, Kennecott Copper, and General Motors.

humanity from

horror of

institutions

number of investment trusts, were Continental

high

all

likely that these investors will
securities

common stocks for a number of years.

31, 1950,

insur¬

The stocks most widely held, that is owned by the greatest

pany.

should make

Dec.

Continental

ness

to which

investing in

size represented

fought to keep America
free.
We owe it to the living.
It
should be our legacy to genera¬

are

bleeding and dying for
American principles.
Those men
have just come through a cruelly

officials

conditions

attention

fire insurance

that goes under the
of defense mobilization.

I think

gripes, I turn
men in Korea,

our

people

ought to get down
on our knees
every night to thank
God for the blessings he has be¬
stowed
upon this land
we
love.

are

such

some

policy

think

rapid growth of pension funds have

trusts and mutual funds showed the

indeed.

make—next

not

the

investments.

being

are

American

common

tant factors in common stock

and of other tem¬
sacrifices we are called

name

not cry
grievances of

fancied

the

ance

square

person-

gentlemen, let

In this connection it is
and

begin to feel sorry for ourselves,
just consider what might happen

one

per

size of

the

one.

the sacrifices that

upon

planners

with 36

Under

the stakes.

are

porary

for each member

room

family,

must

aim for

not allow

portion of funds in

viously had the problem of investing in such securities.

States—

civilian goods,

shortage

But whereas

■

These changes and

complain of controls, of restraints,
of higher taxes, of cutbacks in

wnich, ac¬
cording to our standards, is a real
one.

the

small ones,
Next time we

masses

groups who do not want to accept
the small sacrifices asked of them.

The

and

—

invest

stock

common

broadened the market for equities into fields which have not pre¬

have been

escape

result, insurance companies,

not

were

j';V

The

sets

United

seem

The Reds in Moscow read about
our

over

lucky

not

are

could not afford

No,
We do not know how

television

the

savings banks in states which heretofore did

devote

asked

Even

bacteria

legal restrictions

years,

investments may now

has been spared direct
attack in the last two wars—would

war,

may

million.

with

Surely, when we consider the
cataclysmic effects of another

American bathroom.

week.

per

stocks.

Such

available in Russia in quantities—

less than

person

receivers

six

than

size

men, women and children.

output of radios this
wilLbe only 14 million sets

feet of

the

In all

because the
year

trustees and

and

costly in dollars.
It would
fought with atomic bombs and

would face the destruction of our
cities and the killing of civilians—

million

concerned

we are

wealth

JOHNSON

investments have been relaxed.

such

automobiles.

They read that

During the last few

even

which

hardly 80,000

are

natural

devastatingly

This Week—Insurance Stocks

Moreover,

going to have only

are

By H.

populations, plus
many other ghastly devices now
being perfected.

annoyed be¬

are

could

war

perhaps
also
poison
whole

Soviet Rus¬

automobiles this year.

new

tience of the British, who are al¬
lowed a small piece of meat—less

burger—per

other

5V2 million instead of 6V2

cry over

allies to protest

Americans

radio

the first things that

one of

confronted

Bless

thanks

much

happenings over
They read in Moscow that

cause

By contrast—and even a six-day
trip brings this home forcefully—
how fortunate we are!
We make

how
than

the

some

here.

are

world

deadly,

sia, for example, must be amazed

bombing and artillery fire, while
economies

constantly

off

people in the world.

gium still bear the marks of aerial
the

badly in need

are

We ought 'to bear

perspective.

third
more

wasteful

than

These figures are so large that
they make the mind stagger.
A

confusion

We Americans
of

over

to deviate from that

plan%

you to remember how much more
we

that

you

totaled

million.

have outlined to
to attain our might.
And I

can

Bank and Insurance Stocks

military and

persons,

wounded

basic plan I

you

time, in considering

officers

natural
forever.

civilian, lost their lives, while the

confusion among

mobilization

your

the

basic

of Western Europe, I urge

case

000,000

It is it down. In any event, I can assure

need.

give-and-take

lost

were

In the world at large, some 22,-

Progress Toward Defense Power
for those materials

other

and

that

resources

nothing of the incredible quanti¬

page

(2163)

been

among

the leading groups in the market, these

securities should still be among

the largest investments.

NATIONAL BANK

BANK

ishing
can

elsewdiere

avoid

some

well.

How

confusion in

democracy, where every man has
a right to speak his mind?
Per¬
haps there's no confusion in Mos¬
cow,

where

the

discussion and

sickle

lops

off

the hammer beats

the

last

war?

than

mil-

(Special to The Financial Chronicle)

men.
,

KANSAS

In terms of dollars, the war cost

CITY,

Mo.—Donald

F^ Roberts and George E. Swope

Bishopsgate,

STOCKS

India, Burma, Ceylon, Kenya

Paid-up

Kenya,

and Aden.

and.Zanzibar

Subscribed

Capital

Capital
Fund

•'»:

Laird, Bissell & Meeds

.*•'>'J*.

Members New York Stock Exchange v

£4,000,000

Members

£2,000,000

The
.

Bank

conducts

bcnking and

every description ol
exchange business
.

alone

one-third

was

trillion-^trillion

said—to

say

are

1012

with

Waddell

Baltimore

Reed,

Avenue.

Inc.,

Trusteeships andl. Executorships
also

undertaken

New

York Curb

120 BROADWAY,.NEW.

.£2,500,000

Exchange

YORK 5, N. Y.

Telephone: BArclay 7-3500

;* ZBelL Teletype—NY 1-1248-49

(L. A.

;

INSURANCE

Government in

26,

Kericho,

....

Reserve

lien,

and

London, E. C.

Branches in

■

missing, totaled

Office:

Two With Waddell Reed

Kenya Colony and Uganda

Colony,

Our casualties,

including wounded, prisoners and

Bankers to the

Head

find the weeds of confusion flour¬

•

of INDIA. LIMITED

•

Gibbs, Manager Trading Dept.)

Specialists in Bank Stocks

(2164)

The Commercial and Financial Chronicle

Continued

jrom

page

The

Thursday, May 24, 1951

Position of the Treasury

Another

Our

Reporter

Governments

The Current Money Market
And Bank Portfolios

By JOHN T. CHIPPENDALE, JK.
The

government market seems to be settling, at least tempo¬

state of inactivity, aside from the near-term end of
the list, which has been showing signs of coming to life. Pension
and state funds have been nibbling at the higher yielding Treasury
obligations in modest amounts. However, this type of buying has
not shown any inclination yet to get very much excited about the
long end of the list. The intermediate and more distant bank issues
are being picked up here and there in small lots mainly by insti¬
tutions that were sellers at higher prices. Offerings of these elirarily, into

by the Government itself. Present

year

controls, also, will tend to

has

reduced demand for capital and
credit in some instances.
Federal

The

the Treasury and the Federal Re¬

;•

large deposit banks,

especially those in the New York and
Chicago areas. Very little of significance is likely to happen in the
market, according to most money market followers, until terms of
the impending financing are announced.

recent

Treasury
before
Trade

government market, operating on a greatly curtailed
basis, as far as activity and volume are concerned, looks as though
it were bottoming out at current levels. However, there are so
many things that are not realistic about the market as it presently

exists, that very few, if any, conclusions can be drawn from these
minor

price fluctuations. In the first place there is a rather sizable
amount of long Treasury obligations, according to reports, that
will have to be liquidated sooner or later. These securities, it is

indicated, will have to be disposed of in order to provide funds for
commitments that have already been made by nonbank investors.
Up to this time, there has been no need to push the liquidation but
this situation cannot go on too long, because it is getting nearer
to the deadline when the cash must be put on the barrelhead. Al¬
though losses will have to be taken when the securities

let out,

are

it is reported that this is what is and will be done because many
of these commitments cannot be postponed.

there

seems

bonds

that

are

overhanging the market,

to be real absence of size buyers of the more distant

.Treasury obligations. This excludes Federal who is

a touch-andgo buyer in not too large amounts.
This is what is known as
orderly market purchasing. Nonetheless, even with the Central
Banks in there and a bit more aggressively in a protective way
there is no great size to the bids. To be sure, this is understandable
as far as the Federal is concerned, but how is the market going to
have confidence restored if there isn't someone that will give it
that touch which is so important from the psychological angle?
While the thin and narrow market seems to be
establishing a
bottom area, there are very few followers of the
money market
that are being fooled by this development. Outside
buyers have
funds and small amounts are being used but
they are not going to
stick their necks out again in a sizable
way and have prices go
down on them, as has been the case in the recent past.

Those that turned in the 2^s for the nonmarketable 2%s
got
an. issue yielding 2.75%, whereas today it is possible to
buy the
2^s of 12/15/67-72 at prices that yield only slightly less than the
nonmarketable

2%s.

is shorter than the

Also the maturity of the marketable 22/2%

nonmarket

obligation.
the old* cry, "What price glory?"

This is bringing back

Market for Longer Issues Quiescent
.

buyers make for

stalemate which

now

being witnessed in the longer Treasury market. Whether this is
going to accomplish what the authorities set out to do will be
answered

only with, the passing of time. It will, beyond

result in losses

owners

of these

any

doubt,

obligations who have to sell

them and in that way it should slow
up the use of Reserve Bank
credit. But on the other hand, a large number of
projects must be
financed for the war effort, and this means some credit will
have
to be created.
ers

Is this, gpjng to be done almost
entirely by the hold¬
of Treasury obligations that have to sell
them and take losses

of three points or more?

The

exchange of the 21//2S into the 2%s and then the

of the nonmarketable issue

tions.

This exchange took

lYz% notes is the only

can

way

conver¬

holders

get back into marketable obliga¬

plenty of

pressure away

from Federal

from the

market protection
angle, because it was not expected
that conversion into the V/2% notes would take
place until some
time in the distant future. Although the amount
of the conversion
of the 2%s into the five-year notes is still
very small, according to

reports,

these shorter-term

obligations have been appearing

limited amounts in the market from time to time.
;

obligations is still substantial because of the general market un¬
certainty and the very great desire for liquidity. Purchases of
short-term securities

are

rather widespread with
corporations and

banks the leading buyers.
The mid-year
each

feeling in

some

quarters that

market factor
a

large-scale

operation is- in the making.

Combining of the June, July and
August maturities is considered quite possible by some
money
market followers.

The

new

tax

notes, according tb advices,

are

being taken by

corporations, but not in too large amounts yet. More settled con¬
ditions in the money market woula not be an
unfavorable devel¬
opment

far

the sale of the tax notes is concerned.

tions

address

Board

June

1967-72.

and

would

the

offer

Treasury

policy

tangible evidence that

credit

small

rowed

need

the

has

had

real

and

this

that

had

agreed
Reserve Board

Federal

Government bor¬

funds

rationing

increases

time

for

better

that there

difference

not

was

effect in cutting down
volume of private borrowing
and in retarding inflationary pres¬

sures.

to retard inflation and that
while the Treasury has agreed to
a
new
debt .management

fighting inflation must

dispelled from

another portion

minds." In

our

policy,

this policy does not mean a com¬
plete withdrawal of support from
the market by the
monetary au¬

of his speech the

Secretary said: "Any increase in
the 2%% rate would I am firmly
convinced,
seriously upset the
existing markets,
Government,
Municipal and Corporate. We can¬

thorities.
ment

The

policy
the

store

debt manage¬

new

designed to

seems

re¬

initiative in the matter

not allow this to

happen in a time of creating reserve balances to
impending crisis with the heavy Federal Reserve banks and

such it is

mobilization program to fi¬
nance. We cannot afford the
ques¬
tionable luxury of tinkering with
a

market

the Government securities

ket.

Now

delicately

is no

sirable

balanced
mar¬

time for experi¬

made that the

Secretary

correct in his statement that

would

seriously

However, the real
has

gument
less

matter

proved

credit

reserve

securities

government

ations.
wish

the

not

expansion

take

place.

the

question,
or

these

banks.

made if

could ;,not

able

for

ties,

and,

the

created

not

While

government

obviously,
then

the

securi¬

their

sale

developed.

Treasury's desire to

finance at the lowest possible in¬
terest rate

desire

the

Board

of
to

understandable, the
Federal

prevent

retard inflation is

derstandable.

that

loans

are

even

the

sharply

noted

above

that

committee

depend

taxation

huge spending

deficit

had

been

pro¬

some

$16,-

estimated

request for $10,000,-

than

had

and

been

the

estimated
of

amount

new

required obviously will be
considerably less also.
It

reasonable

seems

that

considerable

non-defense
be

effected

ary

believe

expenditures
but

that

could

despite inflation¬

and

pressures

straints

reduction

the

credit

being

are

re¬

effected,

there appears to be little political
desire

or courage to reduce these
non-defense expenditures.

Because

the

Treasury

receives

the greatest portion of the tax

re¬

ceipts

the

fiscal

year,

the

half

second

that

event

new

cash

some

there

either

would

requirements
requirements

money

such

temporary
as
might be necessary would be rela¬
tively small.
With
a
balanced
budget it would be possible for
the

Treasury to refund bank-held
with obligations suitable to

debt

institutional investors, thus reduc¬

ing

bank

deposits

purchasing

and,

power.

turn,

unbal¬

anced

budget, of course, is infla¬
tionary and with an unbalanced
budget a 2l/z% long-term rate or
a
long-term
rate - approaching
21/2% is possible only with Fed¬
eral
Reserve support,
highly inflationary.

which

The Refunding Problem
A

real

course,

serious

concerns

short-term

funded

issues

must

re¬

beginning

with $1,627,000,000 of 2%s called for payment
on
June 15, and on July 1 $8,445,000,000 of iy4% notes mature.
An

additional

$18,462,000,000

of
and ap¬
proximately
$13,600,000,000
of
Treasury bills must be refunded
notes

mature by Nov.

also.

The

Treasury

not to call the

1951-53

has

decided

$7,986,000,000 of 2s
Sept. 15, and the

$510,000,000 of 2s of 1951-55
not

called

Dec.

15.

may

How¬

was

Defense
of

Mobilization,

the

Council

Economic

Advisers, the Secretary
Treasury and the Chairman

of the

the

of
-

Federal

Reserve

Board.

May J remind you of the state¬
ment
of

that

was

made

the formation

tee:

"On

the

of this

hand,

one

time

commit¬

must

stability in the government

securities

market

and

confidence

in the

public credit of the United
States.
On the other hand,
...

must

banking

case.

think

program

Chairman

least

the
to

composed of the Di¬

private

un¬

This

Reserve

may

than

Committee, announced
26.

obtain

have

rector

been

reserve

and

charged with the task of pre¬ ever, the partially tax exempt 3s
of 1951-55 and probably the 2JAs
senting recommendations for a
of
December, 1951-53 will be re¬
better control of the inflationary
deemed on their respective option
pressures. As you will recall, the
dates,
these two issues amounting
committee is

com¬

market had been avail¬

part

Feb.

con¬

have

drastic

sooner

reasonable

Credit

Reserve

Certain it is that the

mitments

would

Federal

In¬

being con¬
sidered by the President's Special

always would be

the

alleviated.

forthcoming

seems

market at par or better for

securities

the

been

successful,

otherwise

sider longer-dated
Treasury obli¬
gations as equivalent to cash and

that

will

year

problem, of
the
Treasury
presently. Some $30,917,000,000 of
government

this money market operation was

has

been

not

effect pri¬
One can raise
wise to

year

taxes

successful

category, the problem

supporting

been

or to

was

70%

was

credit restrictions might well have

Neither

however,

not it

21/2%-23/4%

selling has continued,
but obviously in diminished
pro¬
portions.
If the conversion had

made to purchase
mortgages, cor¬

placements.

recent

stitutional

quarrel with the need by
the institutional investor for funds
where
commitments have been

vate

the

market

one

porate obligations

President's Committee

marketable

and thus do create the base
upon

whether

larger

$13,575,638,000 of marketable
obligations transferred to the non-

but that sales of government se¬
curities to the Federal Reserve
banks do create reserve balances

multiple

desire

liquidity in short-

conversion

borrowing sources indicated pre¬
viously, but there is no question

can

Undoubtedly

so.

greater

Reserve

costly and

obligations.

The

demand for loans, the
demand coming from the various

credit

mean

who

part of all financial institu¬

Since

create the

which

to the

earlier,

with

banks

those

acquire Federal

tions for

than ,/the Federal

that

means

risky to do

dated

Reserve Banks themselves.
contention

will

the

is the holders of the
government securities who have
the initiative in
creating reserve

quarrel

prices, it

not

undoubtedly will

credit will find it

fixed

Reserve
exhausted.

but

market, prices will
widely and the
Federal Open Market Committee
can be more flexible in its
oper¬

ar¬

Federal

support

fluctuate

holders of U. S. Government obli¬
gations. So long as the Federal
Reserve Banks are forced to buy

will

fiscal

economies

re¬

remain in the

mar¬

upset.

pertaining to the

accessibility of

additional

all

are

While

matter of interest rates and
a

create

existing

powers

was

of the

core

been

fiscal

new

spending
increases.
budgetary position for the

great and

quite evident from what
has transpired since these remarks

kets

when

were

is quite possible
financing may be
necessary
between July 1 and
serve balances when the
supply
Jan. 1.
It would, of
of
civilian
course, be
goods is decreasing,
when liquid assets are large, when extremely helpful if the Federal
budget could be balanced. In such
the.demand for credit is
direction.

mentation."
It

big step in the right
It is, of course, unde¬

some

000,000 in new taxes has been
submitted. It appears now that the
tax
take
will
be
considerably

the
as

use

retire

defense

gram.

fort

can

that the

appears

monetary
authorities
are
now
joined together in a common ef¬

The delusion that fractional

changes in interest rates
effective in

exist. Thus it

in the

500,000,000

genuine

for

converse¬

earlier and

the

surplus

there

need

offsets

the

wide

circumstances

borrowing, and
Treasury might

the

now

indicated.

immediate

1951-52

control

viewpoint as per¬
haps originally had been thought

ly the

upon

the

inflation

be
cash

The

the

with

will
new

from

there is

deficit for

surplus

such

necessary

December

appear

fiscal year but

greater cash borrowing would

2%% obligation
exchange for the V-k% obliga¬

forthcoming at

balances

refunding is becoming

day, with the

his

bank

the announcement

available

Despite not too plentiful money, demand for the near-term

York

there would

maturing obligations.
However, if this were to be done

non-marketable
in

market

substantial

the called

the

January 18th stated:
"The Treasury is convinced that

will

sion of the latter into
5-year

between

balances rather

A thin market which will not take securities in volume and

the lack of outside

New

interest rates

Heavy Liquidation in Offering
The

the

Snyder,

the

there evolved

authorities. Secretary of the

serve

means

addition to

controversy

increase

credit, and
exchange offerby the Treasury of the 24-29 year

moment

importance

money

the 1950-51

Under

been

expansion

consider for

the

that

had to be done to check the forces
of inflation as expressed in the

Reserve-Treasury

Controversy
Let

that

and

ago

factor

upon

position of the Treasury.
Originally it had been indicated

especially sharp since
the beginning of the Korean hos¬
tilities. Quite obviously something

market.

Treasury bills and other short maturities seem to be getting
most of the play in the market for the present.
The partiallyexempts have also been getting more than passing attention from

cause

the

gibles, according to reports, are limited and it is indicated there
is not too much of this kind of merchandise overhanging the

the

bearing

nancial

which

curb

loans

the

not

system,

but also

institutions
would

expansion

only

add

tionary pressures."

of
to

all

the

$1,873,000,000.

fect

ation,
must

refunding oper¬
the monetary authorities
permit the market to regain

its composure by

June 15, and

doubtedly

k et

m a r

would have been

had

proved

infla-

un¬

psychology
considerably im¬

the

Treasury

an¬

nounced the call of the September
2's
at
this
time. However, the

holders

should

be quite pleased
they are in possession of
2% obligation with a maximum
maturity of two years and four

since

now

months.

It is possible, of

that

obligation

the

fi¬ standing but 10

types

In order to ef¬

successful

Possible
Since
-imcfnrc

cmipVi

course,

be out¬

months."

Future

many

may

Demand

institutional
lifp

inGiirnrir>p

inrnm.

^Volume 173

Number 5014

The Commercial and Financial Chronicle

■

panies

credit and

large

channels be restricted.

and savings banks have
commitments to meet, sub¬
stantial • long
term
investment
lunds are not now available. Fur¬

thermore,

both

the

commercial

banks and the industrial investors

trols

credit

the

afiect

where

credit could

Such

the

tion

they

city of these issues.

holder

con¬

flow

expansion

do the

most

has

at par.

probably will continue their li¬
quidity preference and will not be

voluntary credit restraint
program
should prove effective
and if the recent

date

interested in anything other than
very short-dated issues. It is con¬

to drastically reduce monetization
of
the
debt,
severe
additional

If the

serves

called,

not

are

obligation

harm.

refunding

then

the

possible 2

year 2%
3 year 2^4% issue

It is noted

that there

are

$17,012,000,000 of the 1952 option
issues outstanding. No issues
in

are

due

are

callable at that

1953

but

$725,000,000

time; similar¬
ly, but $4,672,000,000 of l%s ma¬

ceivable

credit

ofier

However, if credit expansion con¬
tinues
unchecked, further con¬
trols are inevitable, but because

$681,000,000
partially tax-exempt 21/4s are re¬

the

that the Treasury could
cash, short-dated issues or
perhaps an option to exchange in¬
to

non-marketable

tions

2%%

exchange

for

obliga¬

the

June

and July maturities.
However, it
is to be doubted that
many of the
holders of these very
liquid ma¬

turing securities would be inter¬
ested

the

restricted

issue

and

seems

more likely that certifi¬
maturing within one year
less, or slightly longer notes

cates
or

tion

develop could readi¬
be handled by the Treasury's

many

current

rather

refunding is eminently
then
the
refunding
problems in the following months
well may be handled
readily.
and

Possible

the

than

Treasury,

quantitative

Investment
In

the

light

conditions,

char¬

Policy
the

what

foregoing

should

commercial

the

of the

banks?

It is clear that many uncertain¬
confront
us.
The
defense

ties

spending program has not yet
reached its peak and the inflation¬
forces

are

still strong. It seems

reasonable to expect that the need
for credit will continue

Credit

large and

Controls

that further credit restraints well

Another

consider

important

the

factor

outlook

for

to
the

market is the nature of the addi¬
tional
credit
control
that
may
prove

be imposed. It

may

seems

therefore,

neces¬

that
liquidity
strongly under
existing circumstances, and since
earnings from loans are fairly
sary,

needs

stressed

necessary.
If bank loans
rise sharply and if con¬
struction
requirements
call
for

satisfactory, the need for earnings

the

The

should

of large sums in the capi¬
market,
additional
controls

use

tal
will

sure

necessary

flation is

further

restrained.

in¬
be

number

of important re¬
already are effective.
Reserve requirements are at the
limit except in New York and
Chicago. Taxes have been raised
a

strictions

and

undoubtedly will
Through Regulations
credit

consumer

and

from investments is less

pressing.
policy, therefore,
be based to a very large

investment

should

extent upon the requirements for

safety and liquidity, with earnings
a
secondary consideration. The
liquidity position obviously should
include
short

enough

term

vide

for

higher.

that

one

and! X

such

housing

Naturally

tial

non-essen¬

buildings, also. Moderate price

and

controls have been im¬

wage

posed

although these do not
effective

pear very

ap¬

yet. Margin

requirements have been advanced
and Regulations
U and T have
been in effect for

very

for

pro¬

funds

possibly anticipate,
additional loan expansion,

striction have been put into effect.
Restrictions have been
imposed
the construction

demands

any

increased

and

Governments

may

re¬

and

cash

unusual

desirable

forced

would
well

sell

very

costly

intermediate

be
or

depressed

essential, there¬

seems

could

Treasury

the

change

issues

1952

holder

could

offering

are

called,
the

accept
at that

ex¬

time,

May 5, 1952 and extending
through December 1st of that year

$13,703,000,000 of issues currently
non-eligible for purchase by com¬
mercial banks will

be transferred

to the

eligible category. Obviously
these currently restricted issues
appear more
attractive than the
bank 2V2S of September 1972-67
and,
be

therefore, well may prove
very
desirable obligations

for

the

commercial

banks

1952-54

1952. To be

sure some

should

called

of these

re¬

by
and

exchange at some later date
probably the yields may not
attractive

from

year

now.

essence, serve to provide a stran¬

glehold

the whole

upon

banking

system. Similar control also might
be

effected

over

the

institutional

investors. This would be provided

by the formation of
sues

Committee

Capital Is¬

which

might

administered
as

by an agency such
Securities and Exchange

the

Commission.
time

From

have
a

been

time

suggestions

with

made

respect to
special certificate reserve which

might

present
cently

super-imposed
upon
cash reserves. More re¬
proposal

has

been

ad¬

vanced to effect

loans.
a

a reserve against
qualitative control is

This

rather

interesting

device

and

is being studied most carefully by
the monetary authorities at the

Since the

the

mium.

purchases

one

too

heavily in the issues due or call¬
able from 1954 to

1956

several

These

and

in¬

is,

not known whether or not

will

ment

are

have

provide for

against risk

assets

re¬

against long term Govern¬

securities,

provide for an

use

duction of civilian goods. The em¬

ployment of such
ously could have

controls

years,

While

vary

the

yield

the 2s

while

made

civilian

scarce.

likely that
credit
in

such

affect

controls

market

seems

would

present
the

additional

controls

the

goods

tion

2% U. S. Treasury obliga¬

maturing within 2 years.
some .attraction to the

There is
notes

the

is assured in
assumes

would

not

Government

nor

would

1956-59

fairly

1954 and

1955, but it

that the capital gains tax

unduly

securities

the

flow

assures

the

holder

attractive rate for the in¬
dicated
periods
at the
current

depressed

since

levels.

The 2s of
of

for

those

and

redemption

banks

where

sharply,

Government

loans

holdings

institutions

tain

prices

1952-55

teresting

obligations

the

2Y4s

recede

levels.

ap¬

The

market

the

for

coming

operations
Little good

must

appear, therefore,
current adjustment may

have

its

run

that

not go much higher
recept levels, a rise in

prices must await the res¬

bond

their

small and medium sized
have/ doubtless
reached
desired peak in loans and

lose some loans.,.Such
investments
in due course and perhaps will
wish to
restore their portfolios
to
well rounded maturity' dis-<

may

even

institutions will seek

Later

positions.

Itribution

Now It's the
"Events of 1950

but

with

compared

Bills

"What

arid

yield

in¬

and largely to maturi¬

ties

10 years.

curities

It should be

qualitative re¬
set up against

fully

tax exempt se¬

should

assets,

would

has conducted

1901
annual

sanctioned by

tournaments

the American Bowl¬

ing Congress.
Its current

champions—the team

representing Bache & Co., and its
individual champion, James Duffy,

this

Pierce, Fenner & Beane

—

were

feted at the Annual Dinner Dance

the

League, held

Sheraton
Plans
the

Hotel
are

at the Park

last

Saturday.

under

now

commencement

Annual

Tournament

way

its

for

39th

Sept.

classed

"Family Farm"!

emphasized the nation's growing

agriculture's vital role in present-

among

the

category. On the other hand,

are

after is

a com¬

traditional American
farming that

has contributed so

much to our

democracy, and what more can
be done,

Charles

Brannan

either within existing

legislation or through new legislation, to improve
opportunities for family farming and farm family
living to make a full contribution to the defense

effort.

*»

Family Farm Policy Review is a practical,
realistic undertaking geared directly and definitely
to both our immediate and future mobilization ef¬
"Our

tax ex¬

tions only,

serve

which was

pression, this League

system of family

bases,

ings should be confined to moder¬
ate amounts of high-grade obliga¬

the

ing
taxable

with partially

recognized that if

by periods of war and business de¬

plete reappraisal of how well
we are protecting and preserv¬

empt issues of similar maturities
after taxes. However, such hold¬

under

Secretary and Treasurer.

re¬

view

very

attractive

guise of agrar¬
the world's
rural under-privileged. ..'
reform

ian

large extent
upon one's tax position, liquidity
requirements, and the availability
of high-grade fully tax exempt
issues

and

day international affairs, and the potential strength
and usefulness of America's traditional family farm

grade State and Municipal securi¬
ties.
These
issues now provide

realization

$25,000 may find it
advantageous to hold some high-

representing Merrill, Lynch,

Many
banks

Co.

Thomas Mc-

Except for interruptidns -caused

continuous

prices to continue to
widely. While interest

the

than

Hirsch

Vice-President,

organized in

well

must expect

fluctuate

Law¬
O'Brien of Gude, Win mill &

3rd

Co.

although we

course

1st Vice-President,

Vice-President,

rence

must be suc¬
would be ac¬

would

Co.,
Lanza

Namara of Thomson & McKinnon

refunding

complished if the Federal Reserve
Banks again had to absorb a siz¬
able amount of maturing issues.

over

depends

Paul
2nd

problems ahead because the forth¬
cessful.

lon

expect
sharply below

can

1952-54.

are

their op¬

com¬

false lures in the

partially tax exempt Governments
would not be so classed and, in

nor

stabilized

re¬

risk

called

last Fri¬

the Wall
Street
Bowling
League elected Thomas J. Lytic
of
Shields
& Co. as
President,
John Hugelheim of Eastman, Dil¬
day,

term

still

2s of

Treasury

banks

Bowling

its annual meeting

have

also

provide some in¬
possibilities.
If
these

current

short Treasury Notes.
Some

Wall St.

of the

the result

likely,

pear

uncertainties it would
their

sharp

investment portfolio

sideration in

pattern as a convincing example
of successful democracy on the
land in answer to communism's

might well

securities

these

line

recent

League

pletely free market does not

estate

short

and the

1951-53

Such

the

management.

open-market policy,

new

maining consist largely of the 2s
of

first

bank's

With

important.

shock

severe

earlier. In
real

credit

consumer

expanded

risk

1952-54 and

too

Although the market has had

great many instances, especially

from

possibility of further severe
restrictions, liquidity must
continue to be the primary con¬

Conclusion

from September and, of
the 2s of 1952-54 would
eligible one year from
and December 1952, if not

called

income

loans, with continued
high demand for credit and with

portfolio

year

June

the

defense.

portfolio. Recent

suitable

lower

additional

increase

portfolio

not

definitely maturing in 1954
1955 especially to banks in fairly attractive yields. The proper
excess
profits tax bracket. size of Such holdings naturally

obligations sell at a dis¬
count and only the coupon rate
can be taken into operating earn¬
ings. The indicated yield reflects,
in part, the capital gain
which

folio

demonstrated clearly

regarded

course,

come

were

effected

emergency

hold

only securities due within
were to be acceptable,
the 2s of 1951-53 would be eligible

holdings

obvi¬

qualitative
be

year

of this issue on September
15th, nevertheless there are many
who would be quite satisfied to

tion

will be 25% in those years. How¬
in¬ ever, purchase of these obligations,
flationary effect, however, if the on a scale down, as well as the
armament program were contin¬
2V2s of 1956-58 and the 2V4s of
ued

one

be wise for them to build up

to the redemp¬

further

and

of the many

for

slightly

investments where the tax factor

become
course

have

and

If it should be

time the doubt

These

However, such controls, if
used widely, would have an ad¬
verse
effect upon the armament
program as well as upon the pro¬

callable

sire

toration of buying power.

angle of fur¬

restraints.

credit

course,
we

issues

1952-54, also

teresting from the
ther

later.

of 1951-53 has suggested for some

and

effective

partially tax ex¬
but little, no
great advantage is to be gained
in
extending maturities at this
time. The yield on the March 2y2s
indicates that redemption of this
issue is expected on the option
date, and it suggests the possibil¬
ity that a 10 months 1%% certifi¬
cate might sell at a slight pre¬
issues,

empt

could be stopped
trols.

the various

due

exclusive of the

present time. There is little quesT
tion but that the current inflation

promptly by the
quantitative con¬

yields

either

events

course,

investments, the investment port¬

similar in basic char¬

program may

before

ered

seems

securities

are

acter to the loan

rates for the period of the defense

gency Banking Act of March 9,
1933. The Emergency Banking Act

Treasury

They assuredly do
enjoy the marketability of the
Treasury securities and in many

instances

somewhat

higher
yields.
For
the
present, however, one
must realize that despite the de¬

portfolio

the

possibilities and should be consid¬

to set up such reserves

and,

than

However, they do offer interesting

reserve.

consequences

desirable

broader desire

eventuality,

mean

prices

these

obligations.

the

necessary

reaching

makes

would

not

securities

gations maturing frequently under
existing circumstances.

character

less

met,

investments well may return.

Such

obligations and their

investments

into the non-marketable category

fluctuated

is all embracing and if it were to
be
employed it could have far

asset

issues

stricted issues may be transferred

dated issues in recent months have

and it
prudent to have some obli¬

risk

with

course, could invoke
the powers provided in the Emer¬

widely,

However, the long maturities
most of these

that seemed desirable, or he could
do his own refunding. Beginning

additional short term Government

rather

for

government securities.

credit

maintained. Even these very short

President, of

provided

been

the

serves

Bills, Notes, and Short Bonds be

mensurately with the higher yields

have

companies and savings banks

ance

com-

highly liquid so
could be that the Treasury might as not to be
unduly embarrassed
prefer to keep 1953 and 1954 more by wide fluctuations in market
open
for cash financing or for prices of securities. However, some
the refunding of note issues ma¬
corporates of short term, such as
turing this year.
equipment trust obligations, can

long time. The

ana"the*
large commitments of life hnsiflr-.

obligations,

advanced

invent^: Jtojpt:

liquidated

ment

refunding these issues. It well

distribution

re¬

excess

for

serves

permitted to

that it is wise to keep the invest¬

fore, that a well rounded maturity
in!

course'/ have

perhaps early next >ear,

year,

when
been

Yields on corporate
of

attrac¬

some

because of the growing scar¬

outstanding until 1953 or
1954, but such a
move
would
merely serve to postpone the need

un¬

and

main

1951-53

longer dated issues in
market. It

issues

deposit withdrawals.

1954

deemable in that year. Obviously
1951
and
1952
option date

requirements

reserve

ture

investment policy

present

ary

Present

acter.

large cash balance. If this

successful,

position

avoided.

character
of
the Savings Bond
debt, such additional controls are
more likely to be of a
qualitative

term

near

the

may

the $255,000,000,000
debt, the re¬
funding program and the demand

may be offered in this

forthcoming
refunding. Such reasonable attri¬

controls

addition, they have

tion dates, the yields to those call
dates are fairly attractive and if

capital into desired

would

(2165)

forts.

are

going to get right down to brass

tacks

just where American agriculture can do a
better job—at a time when we very urgently need
the most efficient use of all our resources. And we
to

see

going to see where we in the Department of
Agriculture can help farmers do that better job."
—Charles F. Brannan, Secretary of the Department
are

Agriculture.
How

beguiling largesse can be made to

appear!

The Commercial and Financial Chronicle

(2166)

Thursday, May 24, 1951

*1-7*

Continued

Public

from

tion"

page

Utility Securities

tions have

ministration

Brooklyn Union Gas Company, with annual revenues of $42
million, is one of the most important gas utilities in the country,
supplying about 850,000 customers in most of Brooklyn and a large
part of Queens County, New York City. The service area has a
population of about three million. 1950 revenues were about 73%
residential, 19% commercial and 8% industrial. Thus far spaceheating sales have been of minor importance, but with the advent
of full natural gas in another year or so, will increase
obtaining

natural

lion

from
•

converted

the

use

high

The cost will be financed

initially by bank loans and then
amortized over a seven-year period (if
permitted by regulatory
bodies). The bank loans would be refunded into term loans, which
w|ll be paid off from amortization cash as available.
*

;

increases

in rates.
In the following year $1.21 was
earned, and
payments, which had been rather small and irregular
during the previous decade, were omitted completely. However,
the company was then successful in
gaining substantial rate in-

dividend

and at the same time fuel costs became more
reasonable,
that in 1949, $4.32 was earned and in
1950, $3.60. Dividends of

creases

$1.30

were paid in 1949 and $2.25 in 1950.
Earnings in the seasonally-important first quarter of 1951 were $2.05 vs. $1.62 last
year. .The dividend rate was raised to 60c or at a rate of $2.40

per

annum. *

The company is, ,of course,

benefiting currently by the re¬
manufacturing gas since it can substitute natural
gas for oil to enrich its product, and based on the recent cost of
fuel oil, savings (before taxes) are estimated at about $3.7 mil¬
lion.
This gain will help offset the adverse effects of a
6%
...

duced

cost

wage increase at the end of

1950 (costing about $860,000 a .year),
the funded pension plan toward which the
company is contribut¬

ing about $1.3 million, and the higher Federal taxes.

:: *

Commission

closed in

was

adjustment in

rates

needed

at this time.
(When the complete conversion of natural
gas is effected some downward readjustments may be necessary,
however, particularly in house-heating and other competitive

Despite the increase in earnings the return

mated rate base in 1950

just

still under 5% and in 1951
may be

was

* The defense program may delay the
company's program since
new pipelines from the south must be
laid and this might be de¬
r

layed until the fall of 1953

later.

By having two gateways for
its-gas supply, one coming under the "Narrows" in the harbor
-

and the other under the Hudson River at 134th
-

will

pany

make

Street, the

com-

considerable

saving in the construction of
mains, and will improve the safety factor. The supply of gas may

also

be increased

the

by construction, of special storage facilities by
New Jersey, if this proves feasible.
supply of natural gas is obtained, all restric¬
house heating cart be removed, but it will be
necessary

pipe line companies in

If and' when the full

tions on
to

wage

insure

continuous

fight

against

the

obtaining the desired additional

ritory;

rest

of the country to
for the New York ter¬

gas
'

'!
'
company was interested in
properties of Long Island Lighting.' They have
been studying this question but there have been
no negotiations
between the two companies thus far.
There have been

acquiring the

that the

rumors

gas

The company has a very aggressive sales
organization to push
appliances, and am excellent service department. They main¬
tain cooking schools and contribute
heavily toward research.
A
new dryer is
being sold, and an improved gas range will be on
the market
by the end of the year,- Tex and Jinx on TV sponsor

gas

the company's products.

Brooklyn Union has no heavy industrial business, but when
fully converted to natural gas, expects to increase the industrial
load.

There will, it is
expected, be a good demand for interruptThey will also then be prepared to compete with
and cil for water
heating in apartment * houses and other

ible gas supply.
coal

applications.
<

gas the company will be able to stabilize
pro¬
duction costs and reduce the number of
employees. The doubling
of BTU content will in effect
double the capacity of the distribu¬
tion system and hence will
an

estimated $40 million in

con¬

Struction costs, taking care of not
merely the natural expansion of
the business, but also of a
substantial amount of

house-heating

and

other new sales.

Officials have made

experience of other gas retailers in
to

benefit by this

the

summer

the

careful

in demand.

study of the

heating field and hope

study.. They will avoid too

overly-rapid increase

low

rates

Gas has

and

An effort will be made to build

off-peak load.

Brooklyn Union

'
a

tangibles in the plant account.

clean
The

balance sheet with

in¬

capitalization is $49 million

debt, $7 million convertible 5% preferred
stock, and $42 million
common

stock

equity,

The

management

to effect the conversion of the

apparently

preferred but

would

there is currently

price differential of about five
points, it might be necessary to
raise the present $2.40 dividend rate
in order
a

to make conversion

.{.

deserves

careful

The

credited

bills"

doctrine

mercial

banks

crisis.

Some

this that

attractive.

However,

pendent

continued favorable

any

have

commercial

which

always have
should

ways

This

had and al¬
in borrowing
Banks are

except when in need.

be¬

paper

lending agencies and not borrow-

com¬

conclude

be sharply

efs\ Deposits should

from borrowings;
paper distinguished
always liquid. In times of crisis yet a recent author has called this
any good asset may become non- tradition "of doubtful validity"—
government

liquid.

view which

with

(9)
A

"We

owe

ourselves."

his

Federal

philosophy of public debt
popularized by Alvin H. Han¬

and

sen

other

inconsistent

not

approval of
"banks
raising

apparent
Reserve

new

was

capital funds by floating bonds.

government ad¬

management

by i

bloc, deficit financing,, debt mone- ;
tization, NRA, WPB, OPA, etc., ;■
the "fixed interest rate pattern,"
a
record of bad forecasting, and
the current conflict and disagree- :
ments. between government agen- •

departments.

(24) Old policies survive. Gov¬
ernment policies devised in earlier

to combat deflation and unemployment persist to the present
day when conditions are
completely changed.
;;:.r
years

(25) Broken promises. -Perhaps
we
should add another item to

business ; won't, the
will."
This
slogan

"If

and

cies

this

(16)

Keynesian follow¬

characterized

was

are

some

vocate

familiar

also

cycle

with

which

the

controls;
to

lasts

depression.

mone¬

tization, deliberately adopted and

terest

terms, became a natural
procedure when war-financing be¬
Federal Reserve

necessary.

such-move-would

probably

earnings in 1951.

de¬
.

fiscal

had

longer

relation

in¬

To increase

rates.

savings,
therefore, meant increasing in¬
comes, not raising interest rates as

easy

came

skepticism

faith

unwarranted

genius

Keynes, who had

making generaliza¬

lor

tions, stated in his book on Mone¬

prices dur¬

Debt

The

employment.

John Maynard

tary Reform (1923) that the pro¬
gressive deterioration in the value
of money is not an accident but is
at whatever cost.*
.
• ;
caused
by
two
great
driving
(18) Interest not an inducement; forces. We should add to the con¬
to save. To superficial Keynesian juncture of. circumstances which
theorists, savings and its counter¬ have given; rise to the curious
part, . consumption; expenditures, mixture. of inflationary precepts
became a function of income and enumerated these two great driv¬

par excellence by which
purchasing power could be

ing the

stabilizaticn

controls and from price stabiliza¬
tion as a goal to "full employment

method

made available to raise

price

from

towards monetary controls shifted

and I am
extremist to ad¬

years,

some

f
(11) Public debt monetization.
Channeling the public debt into
the
banking
system
was
the

new

support of the government secur¬
ity market at a low rate schedule

inducement to

political influence j of - the debtor
class.

%v;

save.

ing forces which Keynes men¬
tions; namely, the impeCuniosity
of government and the superior
•

The ENCMP has been unable to

(19) Effective demand: Income stem the inflationary tide which
usual market restraints
must be spent to become effect
was
nurtured
by
doctrines of
public borrowing.
M. S. tive.
Since/ people are imbued
Eccles' proposal that the Federal
questionable validity and the driv¬
with
the spendthrift philosophy
Reserve
banks
be
ing economic forces alluded to by
permitted to of the
'30s, preaching thrift be¬
make direct purchases of govern¬
Keynes. The Committee has de¬
comes
ineffective today. •
ment securities would have short¬
voted itself chiefly to combating
cut the market
(20) Easy money. Easy money the more obvious mistakes-and
completely. This

took away
upon

proposal

was

during

opposed by ENCMP

and blocked by

came

cept for

and

billion.

(12)

Senator Taft, ex¬
maximum limit of $5

■;;7.

and

central

banks

have

from

Indeed,

succumbed

market
the

pressure

abandoning these last bulwarks
against credit inflation.
(13)

Spend

"what

we can

afford"—is consistent with

any

The

be¬
time"

orthodox

order

curb

inflation

inapplicable v/hen low in¬

rates' have

been

fiat.

fixed

There

is.1

by
no

policy, greenbaokism, etc. > Some
proposals
have
been

extreme

warded
tremes

the

tion.

(21) Public revenues. The
of

public

borrowing

off,
were

most

Other

cases

part

our

influence has

tampering

with the
,

that today we face the

ex¬

but for

moderated,

inadequate to prevent seri¬

been

way

cept

system;
dilemma

attempting to control inflation
the basis of an insecure, politi¬

cally managed dollar.
con¬
as

method of
,

fallacies, such as going off gold,
dollar depreciation, silver buying

ous

;

need."

the distinction made between pub¬
lic and private finance, namely,

times.

to reverse the policy when
changes in interest rates become
matter for political determina¬

re¬

This test of public expenditures—
"what we need" rather than "what

depression

of * tightening 1 credit

administrative

countries

most
to

terest

money

all

become

well*. This is the next step, adopt¬
ed in many countries, to free the

straints..

terms

commercial

government

times

"easy

principles

v-;.

Nationalization

banks

*
-

50-year balanced budget,

owe

"Kondratieff"

waiting for

•

list, i. e., the abrogation of the

omists

■

;

gold clause, because it typified
by the government
conduct in the '30s which helped
it to ourselves,"* signified the reluctance of busi¬ create, an "atmosphere of broken
and was interpreted b,y many to ness to borrow and spend during
promises."
In such an atmosmean that
public debts are not a the depression and was used,to
phere, inflation pressures flourish
burden and hence have no limit. justify government deficit spend¬
and controls are difficult to en¬
One extremist, Seymour E. Harris, ing (also for setting up govern¬
force. Not only do people want to
mentioned $4 trillion as a practi¬ ment corporations to compete with
avoid a "production-stifling tan¬
cal limit to our Federal debt.
business). The problem was to get
gle of government red tape' ; they
money in circulation—to have it
feel justified in connivance.
(10) A balanced Federal budget.
Not
used or spent.* From this concep¬
The traditional
acceptance of a
only do they feel that "somebody
tion
^originated ' the doctrine of unknown is swindling them" as
balanced
budget was no longer
functional finance":
Tax heavily
considered a deterrent to deficit
their dollar shrinks; they teel jus¬
and reduce expenditures in good
financing and debt monetization.
tified in playing tne game against
times;
lower;
taxes
and
spend
At first the annual budget was
the
government.
Note, for ex¬
heavily through deficit financing
discredited; a double budget was
ample, Beardsley Ruml's recent
in bad times, the government do¬
admonition to a group of busi¬
proposed.
Later an
unbalanced
ing the functioning throughout.
nessmen:
"It's poor business to
budget running over several busi¬
ness
cycles was justified. Econ¬
(17) From monetary to fiscal pay excess profits taxes."
It

ers.

slogan, "We

•

"pushing

referring

conception,

cognate

dis¬

was

business

was

the reluctance

"basically fallacious"

such

discredited.

rowing"

com¬

nonliquid in times of

comes

from

"real

loan

borrow.

(15) The "tradition against bor¬

C-.y; ■/■=": S

With natural

save

the esti¬

5%, according to management estimates.

over

avert

;

We have a com- ;

The company's rate case with the
and the management feels that

1950

sales.)

(8) Self-liquidating commercial
loans.

The

company's earnings during the decade 1937-1946 aver-;
aged about $2.25 a share, the poorest report in that period being
$1.75 in 1942. In 1947, however, a deficit of 29c a share was reported due to the sudden rise in fuel costs without any offsetting

orthodoxy

scrutiny.

because

gas

increase)

prices and chronic un¬
employment.
Such a departure

will

million.

75%

;

planning experts—or more chari¬
tably, so-called "competent and
on
a
string." Therefore, it was
responsible men"—this despite our ;
asserted, discount rate controls
experiences in gold buying,, de- /
are impotent.
'
,
- " r *
valuation, subsidizing; the; silver *
to

supply $120 bil¬

money

decline in

mercial

have

their

rich,

the

votes.

did not prove to be an inducement

the country of an

assure

adequate

early this
y.ear, and unless defense activities interfere, they hope in 1952-'53
to go on a
predominantly natural gas basis. Consumers' facilities
some

BTU gas, and a
Stone & Webster subsidiary is
doing current field work. Prelim¬
inary estimates indicate that such conversion will cost about $18

years

rapidly.

began

company

(23) Planners.

placent trust

Brooklyn Union Gas Company

The

for

profits" taxes are particularly popular because corpora¬
*

;;

low

"Excess

By OWEN ELY

"savings function" high; therefore
taxes
are
no
sacrifice to them.

financing expenditures
was expanded to include the con¬
cept of "productive taxation," the
argument being that we merely

Controls Postulated on Political

Feasibility

;

Present
and

controls—both indirect

direct—are

postulated

cooperation
or
selfrestraint and upon their political
social services (welfare) we get.
the former appropriates, then col¬
feasibility. These are frail reeds
Therefore, it was asserted that
to
lects, but "need" became liberally
support such ■ a program in
taxes
are
not
a
social
burden;
interpreted.
The
illusion
grew
peacetime or even during a period
hence there is no upper limit to
from this that we can spend our¬
of partial war. We cannot match
taxes.
Usually a powerful lever
selves into prosperity. " /
the ability of the Soviet Russians
for curbing expenditures, taxation
to
impose
controls.
Monetary
(14) Interest rates not a cost. has become an engine of social
credit and fiscal controls will not
A changed attitude toward inter¬ reform—of redistributing wealth
work well and may not work at
est rates occurred in the late '20s by taxing the few and subsidizing
all unless we have confidence in
or early '30s.
When interest rates the many, so that the individual
the. dollar.
Stable money, is not
were
high, it was alleged that burden need not be felt by the
possible without sound money.
profits were also high and that mass of voters.
Sound money is money which is
the cost of credit is a minor or
gold
at
fixed
(22 ) Tax ^structure.' "Equity in convertible into
insignificant matter in business¬
taxation" has come to justify high rates, into foreign currencies at
men's decisions; hence tight mon¬
taxation
of fixedr rates, and into commodities
ey is no curb to borrowing.. After progression — heavy
the stock market crash in: 1929, the few for the benefit of the and services at reasonably stable

4nterest rates eased, but low rates

Pay

ourselves for the benefits and

many.

The

"consumption

func¬

voluntary

rates.

What

need is

some

ob-

Volume 173

Number 5014

The Commercial and Financial Chronicle

jective market force independent
of political favor or red
tape.
force which we

such

lished;
gold

should

namely,
you

the

standard.
can

re-estab¬

rules

You

the

cannot

fool

argue with the

gold

standard

rules.
They are simple
easily understood. We should
seriously consider returning to the
gold standard base before the de¬

preciation

the

dollar

its

runs

that is, before it leads to
complete collapse—then start over
again. It would be better to stop
course,

depreciation
now
by
resuming
specie payments—by following the
precedent set by John Sherman in
1875-79.,
Our
dollar
would
be
safer if managed within the limits
which
a
redeemable
currency
would impose upon it.
The re¬

sponsibility

and

great

left

management
forces.

tion

power

the

hands

unchecked
We

which

have

has

mar¬

prescrip¬
in

worked

amine the virtues of

the

gold stand¬

monetary system.

NY Curb

Exchange,

operating stock ticker and
a display of 75
annual reports of
its
long
time
dividend
paying

companies, is participating in the
first

annual

being

held

business

fair

now

the

North

Business

for

the

fair

are

local, state and nationwide busi¬
financial

organizations

by the New York Curb Exchange,
will include the annual
reports of
75
companies
whose
common
dealt

are

squeezing of requests, it

that

now

appears

larger than government officials had expected. If anything, "The
Iron Age" prediction of several weeks ago that
only 25% of the
steel market would be "free" by the fourth quarter is conservative.
Non-essential users may be fighting their procurement battles in
an even smaller free market sooner than that.
:v.,

ex¬

greeting

and

the ^success

102

best

wishes

the fair

years.

for

ap¬

75%-control, 25%-free ratio now. For example,
picture today with one large steel company: Set-asides
for defense and essential programs equal 57% of total output. Requirements for its own maintenance, repair and operations, and
construction of new steelmaking facilities equal 10%.
That leaves
only 33% of output for non-essential customers.

system,

which

will

stock

carry

The
to

DO set-asides for July have forced some

new

virtually

eliminate July tonnage for

unclassified

Mill space thus made available will be used to take
DO

requirements of customers,

some

extended into 1952.

,,v.<

Mr.
of

John

Public

fair

explain

Sheehan, director

Relations

York Curb

the

New

Exchange, is attending

observer

the

and

will

workings of the

ex¬

change.

C. G. McDonald Adds
(Special to The Financial Chronicle)

DETROIT,

Mich.

—

George

companies

Building, members
Detroit Stock Exchange.

With Sherman Gleason
(Special to The Financial Chronicle)

BOSTON,
Huestis

Sherman
Milk
with

Mass.

Gleason

Street.

—

Ruth

associated

now

She

with

Co., Inc., 31
formerly

was

Trust Funds, Inc. and
& Co.

J. H.

Uoddard

The

of whose DO orders

Clarey

MINNEAPOLIS, Minn.—
M.

Leary

with

tional

has

Keenan

become
&

Edw.

associated

Clarey, Inc., Na¬

Building.

With B. C.
(Special

Christopher

to The Financial

KANSAS

CITY,

Chronicle)

Mo. —Joseph

vVi

American Iron

and

this week

ago, or a

decrease of 0.3 of

point.

This week's operating rate
steel

ingots

and

castings

for

;

duction

week

ago.

entire

the

tons.

ago

industry,

the rate

year

ago

compared

was 103.3% and proit stood at 101.8% of

„

oats

which

estimated

will

reach

about

3,000$00

granulated business prior to the impending advance in refined quo-.
tations. Cash lard prices remained steady. Trading in lard futures
fell sharply below that of a week ago. In the Chicago livestock
market, hogs were irregular and lower following a rather sharp
upturn at mid-week. Steers were down slightly as receipts in¬

tinued

favorable

this

28,536,000

year

weather; conditions

would equal

acres.

light and power
estimated at 6,559,218,000 kwh., according to the Edison Electric
Institute.
'/
"
•
''

further

indications that

'
,

was

in export allocations.

crease

and

exceed the government's goal of

Export demand for cotton

energy distributed by the electric
industry for the week ended May 19, 1951, was

limited despite the recent in¬

Reported sales in the ten spot markets last week totaled 38,000
bales, as compared with 72,900 the previous week, and ,156,300 in
the corresponding week a year ago.
Demand for cotton textiles

7,595,000 kwh. below that of the pre¬
vious week, 714,657,000 kwh., or 12.2% above the total output for
the week ended May 20, 1950, and 1,303,946,000 kwh. in excess of
was

the, output reported for^the corresponding period two

by slow shipping demand and the

creased, while spring lambs showed a small rise for the week.r
With trading down sharply from a week ago, spot cotton prices
continued at or near ceiling levels. Futures quotations were gener¬
ally steady and firmer as the week ended, despite reports of con¬

Output Trends Lower the Past Week

total

ended

reflecting a somewhat better manufacturer interest and a
scarcity of primary market offerings to this market. Interest in
refined sugar increased as cane refiners booked a fair volume id!

The amount of electrical

The current

Corn

up,
•

acreage

Electric

remained dull.
on

The final report of

the Department of Agriculture

the 1950 crop placed last year's total at 10,012,000

bales, as com¬
16,128,000 bales in 1949, and a five-year average of
12,012,000 bales.
'• ^• ";;.r '■

pared with

years ago.

Carloadings Rise Modestly in Latest Week
Loadings of

Trade Volume Somewhat

freight for the week ended May 12,1951,
according to the Association of American
Railroads, representing an increase of 4,790 cars, or 0.6% above the
preceding week.
totaled

808,127

revenue

before.

Combined

The aggregate dollar

volume of consumer spending was
in comparison with the similar period of a year ago,
it was somewhat increased, states Dun & Bradstreet, Inc., ipr its
current review of trade.
H
about steady;

Generally

Auto Output Continues Mild Rise of Previous Week But
motor vehicle production in the United States and

week, according to "Ward's Automotive Reports,"
totaled 160,726 units, compared with the previous week's total of
158,243 (revised) units and 175,314 units a year ago.
For the United States alone, total output was 150,836 units
against last week's revised total of 148,400 units, and in the like
week of last year 167,035.
Canadian output in the week totaled
9,890 units compared with 9,843 units a week ago and 8,279 units
in the comparable 1950 week.
}
Total output for the current week was made up of 113,419
cars and
32,417 trucks built in the United States and a total of
7,070 cars and 2,820 trucks built in Canada.

warm

weather, Mother's Day, and widespread pro¬

motions combined to raise
Total

Canada the past

Promotions featuring reduced prices in many lines throughout
much of the country helped bring retail unit volume, in the period
ended on Wednesday of last week, slightly above that for the week

by railroad labor difficulties, and an increase of 36,389
cars, or 4.7% above the comparable period of 1949,

Holds Under Year Ago

Higher Than Year Ago
Slightly Lower V

Order Volume

cars,

dollar

volume

consumer

sales of apparel last week.?

in the similar
by shoppers for
items, along with accessories, hosiery, and millinery
There was a heavy demand for some lines of sportswear, particu¬
larly rayon blouses, in many communities. The interest in men's
clothing also tended toward sports items, with colored shirts and
slacks predominating.
Wvv .v
?
' •
The purchasing of food by the nation's housewives was about
steady in the past week; over-all dollar volume was noticeably
week

1950.

Summer

was

slightly

dresses

above that
favored

were

women's

above the level for the comparable week a year
;

Although there

were

numerous

earlier.

promotions of house-furnish¬

ings last week, dollar volume was virtually even with that of the
prior week. Aggregate dollar sales were slightly above a year
earlier. Various items of furniture were favored by shoppers, with
floor-coverings also in generally increased demand. The interest
in appliances and draperies was limited in many communities.
Total retail dollar volume in the period ended on Wednesday

Business Failures Slacken in Retail Trade
Commercial and industrial failures dipped to 171 in the week
ended May 17 from 181 in the preceding week, Dun & Bradstreet,

Inc., reports. Casualties were slightly lower than in 1950 and 1949
when 199 and 172 occurred; they were down sharply, 41%, from
the prewar total of 289 in the comparable week of 1939.
Failures involving liabilities of $5,000 or more were virtually
unchanged, at 135, but were noticeably less than a year ago when
152 were recorded.
Small casualties, those with liabilities under
$5,000, declined in both the preceding week and the corresponding
week last year.
"

of last

week

was

estimated to be from

Regional estimates varied from levels of
percentages:
• r'-V
-v

ago.

above

a year ago

year

by these

New

+4; East
+2 to +6; and Midwest +1 to +5.

England, Northwest,

to —1; Pacific Coast
Wholesale

and

ordering declined

Southwest 0

very

slightly in the week with

total order volume somewhat above the level for the similar week
last year, largely by virtue of
commodities. The number of

number since

upward price adjustments in many
buyers attending various wholesale
centers, while dipping moderately, was about even with that for
the similar 1950 period.
Department store sales on a country-wide basis, as taken from
the Federal Reserve Board's index for the week ended May .12,
1951, increased 3% from the like period of last year. This com¬
pared with an increase of 8% in the previous week, and an In¬
crease of 4% for the four weeks ended May 12, 1951.
For the year
to date department store sales registered an advance of 12%.

but other

volume in New York

All

the

week's decrease

was concentrated in retail trade,
and trade groups sustained small increases
More businesses succumbed than a year ago in con¬

other industry

struction and service, but moderate declines from the 1950 level
prevailed in other industries and trades.
'r.pj:
The New England and Pacific States accounted principally for
the weekly decrease. A slight dip appeared in the East North Cen¬
tral States, while four regions had increases, including the Middle

Atlantic States where casualties

rose 15 to 73, the area's highest
January. Mortality exceeded the 1950 level in the
Middle Atlantic, East North Central States, and Mountain States,

regions had fewer failures than last year, with less than
one-half as many occurring in the New England and West North
Central States.

Building, members of the Midwest

The wholesale food price index; compiled by Dun & Bradstreet, Inc., leveled off last week. The May 15 figure held un¬
changed at $7.18, a rise of 21.9% over the corresponding 1950 date

...

during

improvement in shipping directions for flour was noted
during the week, but bookings of hard wheat bakery flours Were
very slow, with other flours also very quiet.
Cocoa prices firmecl

Wholesale Food Price Index Shows Little Change

Stock Exchange.

active

Some

is equivalent to 2,071,000 tons of

A month

yielded 2,065,000

featured

was

bushels for the season.,

Steel Institute announced

market

Canadian
*

small, they feel tickets might

Wise, Jr. is with B. C. Christ¬
opher &
Co.,
Board of
Trade

less

Weather conditions for the new corn crop were favorable al¬
though heavy rains retarded field work to some extent. The oats
market was quite strong despite the continued importation of

were

rVV..

that the operating rate of steel companies having
93% of the steel- 1
making capacity for the entire industry will be 103.6% of capacity
for the week beginning May 21, 1951, based on the industry's in¬
creased capacity of Jan. 1, compared to a rate of
103.9% a week

while

(Special to The Financial Chronicle)

year ago.

absence of any substantial export business.

of added

,■

well be issued for that too.

in mortality.

Joins Keenan &

The

consumers.

care

Previously most had favored the open-end system which is to begin July 1.
But, now that it is becoming apparent little "free"
tonnage will be available, many of them now favor a closed CMP.

Company,

Penobscot

were

business in wheat continued in moderate volume.
lower after displaying strength at mid-week.

The rapid spread of controls over steel distribution is causing
steel executives to change their thinking on open-end CMP.

Henouf has been added to the staff
of C. G. McDonald &
the

some

and

bond quotations direct* to the
fair for its duration.

markets

Crop damage, according to the May 1 report of the Department
of Agriculutre, was not as severe as earlier reports indicated. Pro¬
duction of winter wheat is now estimated at 682,000,000 bushels, or
about 44,000,000 bushels less than the April 1 forecast.
Export

appeared

this morning over the Curb ticker

May 15, as against 321.36 a week ago, and

the like date

the past week with
prices moving irregularly during the period. Wheat prices eased
as
demand subsided, influenced largely by reports of beneficial
rain in some of the dry areas of the Southwest.
r
>

the

reduced

319.68

Grain

here is the

dends

260.66

proaching

The week's total represented an increase of 96,338 cars, or
13.5% above the corresponding week in 1950, when loadings were

from

finished

change and which have been pay¬
ing annual common stock divi¬
for

■

Commodity Average Continues to Fall

After holding in a narrow range most of the week, the Duh &
Bradstreet daily wholesale commodity price index dropped sharply
toward the close to the lowest level since early January. The index

cer¬

Actually, states this trade authority, the steel market is

The year's peak was $7.31 on Feb. 20, afftd
on Jan. 2.
■mr^n

$6.93

prices at the wholesale level.

Wholesale

In spite of heavy

including leading brokerage firms.
A display, provided for the fair

stocks

North

Carolina.

135%

was

trend of food

tain that the portion of steel output scheduled under CMP will be

and

school

about

point

The index represents the sum total of the price pejr pdtwui of
31 foods in general use and its chief function is to show the general,

Industry

totaling

2,077,000

fraternity, opened today
three-day period on the
campus
at
Chapel Hill,

and

requests

the old capacity and amounted to 1,940,600.

the Alpha
Tau Chapter of the
Alpha
Kappa
Psi
professional

ness

steel

by the Uni¬
Carolina School

Administration

Participating

face

University of
The fair, which

Carolina.
jointly sponsored

versity of North

the

expected production.

At Business Fair
with

expected

Since free market tonnage will be so

Display

The New York Curb

when it stood at $5.89.

The State of Trade and

too

are

past and which can be made to
work again. It is time to reex¬
ard

page

the low

and

ket

from

deliberately

abandoned

nor

Continued

One

(2167)

for Week '

;

Warm

and

sunny

weather

the

past

week

lifted retail trade

2% above the corresponding week of 1950.

According to the Federal Reserve Board's index, department
sales in New York City for the weekly period of May 12,
1951, advanced 1% from the like period of last year.
In the pre¬
ceding week an increase of 10% was registered above the similar
store

week of 1950.

For the four weeks ended May

12, 1951, an incre&se
a year ago, and for the year? to
date, volume advanced 12 % from the like period of last year.

of 4%

was

recorded above that of

„

The Commercial and Financial Chronicle

selves and with the least disturbance

Continued from first page

■arid'will render far more

year which leave thoughtful
of definite uneasiness as respects

"Three of these—certainly

citizens with a feeling the longer term future.

the one to the

not unrelated

% other—are:
(1) Increasing fraternization of defense planners and
professional economic planners. The latter would, of
course, go much farther in controlling and managing the
social and economic system during the defense period
than could be defended on rational grounds, and no one
who has cut his eye teeth can doubt that they would continue much of all this permanently quite regardless of the

V'.

the

useful
has

regard the rear maof indefinite duration and a corresponding

/ment period

as
/ lack of real interest in what, economically
follow it.

speaking, is to

ners

only the rearmament period, but the econ¬

forevermore, is "depression proof." In this connection
many of the old cliches about having learned how to

omy

;

prevent depressions, and the political impossibility of not
applying them when the time comes are being constantly
Jjahdied about—as well as strangely garbled versions of

;t^e old economic maxim that overproduction in any real
with

inconsistent

sense

insatiability

the

of human

wants.

really

are

Continued

(3) A rapidly spreading belief among both the pro¬
should know

better that not

all had better

^-Mr. Wilson, for example-—do not realize the extent to
Which they are being utilized by the economic planners.
Of course, effective preparation for large scale attack by
major enemies involves, as is so often asserted by the plan¬
ners, enlarged production capacity in a number of direc¬
tions. Whether the Administration is warranted in making
lit in the most general of terms the very core of defense

from first

preparations is another question. Certainly, if we are
really to be ready to defend ourselves effectively—to say
1 nothing of offensive operations on many battlefields—we
Vmust/be in apposition to produce the sinewS of war in a
large way. It would appear sounder tactics to make certain of such capacity than it would be to proceed to pile
up large quantities of materiel which could quickly be¬
come obsolete and have to be scrapped.

values.

dollar

50
a

channels to

war

or more

in advance. Thus

years

lowered value dollar attacks the

heart of

our

business.

magnitude

life

the

in¬

insurance

invest¬

ment is

growing, in keeping with
the national economy.
The total
life insurance in force in legal re¬
serve companies on U. S. residents
was about $228 billion at the close
of 1950.

: During last
year, $4 ^ billion in
life insurance benefits was paid to

policyholders

and
beneficiaries,
the largest amount in history. The
value of those

dollars, in terms of
goods and services, however, must
have
been a disappointment to
those people.
Insurance policies
that

certainly find

use

each

,many

;

steel.

semi-fabricated

All this may and is

part how to do all this with

minimum of cost id

our-

be¬

the economy, a

together

politicians get

the

freeze

impractical

into

economy

virtually impos¬
quo.
Finally,
the

and

status

proximately $64 billion at the end

lar

of 1950.

Translated into

1940 dol¬

will

lifted

the

and

This may be a

will

for the

worse

politically popu¬
the inflation

description

isn't

but it, certainly
explanation.

crisis,

lars, however, the $64 billion of
assets represents a gain in pur¬

economic

chasing

doesn't just happen. It

the

experience.

the 1940 level

power over

first

assets, measured in 1940 year-end place, the elimination of the crisis
dollars, were equivalent to only that brought inflation into sharp
$434 per policyholder—$40 less focus is highly unlikely to siop
for
every
policyholder covered. the inflation; if inflation is per¬
to run long enough with¬
While this is not an alarming sit¬ mitted
uation,

the
of

fact

spite

new

that

coverage

have

the average

tion,

measured

policy¬

the

great

written,

less protec¬

out effective fundamental counter

it becomes such al'oice

measures,

that

couragement

outside

little

needs

en¬

going.

keep

purchasing feeds upon itself.

they had ten years
A Fresh Look at Inflation
the past ten years
everything about life insurance
But we must contend not only
has grown right along with the with the
facts, but with what :he
economy: yet it seems that nearly public thinks are
the facts.
In
everyone concerned has less pur¬ view of this, perhaps we should
than

power,

During

ago.

chasing

today

power

than

ten

years ago.

life

More than ever,

such.

insurance,

unique and
preeminent necessity for 99 fam¬
ilies

out

insurance

100.

Only with

the family

can

life
pro¬

where it

the

whoie

inflation—get

orientation

new

look

fresh

problem

The trouble is not with life in¬
surance

take

comes

what

some
it is,

from and what is

be done about it.

Inflation, we should point out,
about as the product of
chronic maladjustments or when

may come

external

some

economic

the 83

an average cov¬

only

$1,542

million

for

pol¬

years ago,

ravages

throwing
mand
roots

inflation
this

nation

inflation

except

weight behind

our

that

de¬
get at the

while

/:////>-

there

■/:/..■ *

$1,777..

and

throws

force

was

system

the

out

the external influence.

investments in war
substantial increase in
other forms of individual savings,
Very

bonds,
and

large

policyholders;

now

look

Inflationary Gap Widening

huge wartime taxes absorbed

•

The

inflationary

much

gap,

;

panies to

;

billion.

This

for

most

the

calling for

high level of $64
figure represents,
part, investments

new

fixed number of dol¬

lars;, unhappily,' $64 billion badly
■;

of
the
spendable money.
Government
controls
brought a
which measure of temporary checks on
what has happened to the life in¬ causes our troubles, is already sub¬
price and wage increases. These
stantial but it probably will in¬
surance
companies. V
things, fortunately, reduced the
In 1950, approximately $3.5 bil¬ crease this year and next. Defense
immediate evil results.
lion were added to insurance com¬ ; expenditures will " be stepped up
But then, after the war, controls
pany reserves. This increased the .from present levels of about 7%
had to be lifted, and it soon be¬
assets of all U. S. reserve com¬
to

the

readily conceded. ' In

need for such capacity., The problem is in good

dollars,

That is the effect of inflation

lines it is probably wise to make certain of at least

fe'any

none

with 65 million policyholders, the
■still time.

products

or certainly more or
less regardless, of whether in normal times there would

today

average coverage was

some

minimum capacity quite regardless,

insurance

icyholders; whereas ten

degree, though in much less degree, it likewise applies
to certain essential fabricated

life

erage

goods.

apply

written, represent

problem,
major proporawkward position if

makers of civilian

group

com¬

seems

when

of balance
society finds itself long on
into terms of 1949 dollars, be¬ The trouble lies with the
sinking money and short on goods and
comes actually only $213.8 billion
value of the dollar, against which services to
spend it for.
—a reduction of
$14.4 billion. In no device is a full protection and
The current inflationary crisis
terms of 1940 dollars, the amount
from which there is no haven.
started during the last war/when
of drop becomes $100 billion, re¬
Obviously, we are taking all defense
requirements absorbed
ducing the $228 billion protection possible steps to remedy this sit¬
most of the production facilities of
to $128 billion. These reduced fig¬
uation; but, as far as I can see,
the nation and brought unprece¬
ures, although they include the there is no real" way of effectively
dented prosperity to millions of
vast
amount
of
new
insurance
fortifying ourselves against
the
wage and salary earners. The war

nearly so to get ready to
turn, out weapons and other war supplies. This applies
'With special emphasis to the sort of
goods which could
hot be produced quickly and in
large amounts by plants
built for

sible

you can readily see why.
The tected against untimely loss of the
$228 billion life insurance cover¬ breadwinner. More insurance is
age at the end of 1950, translated needed
today than ever before.

doubt that plant to produce materiel

had to start from scratch

out, in
be inadequate.
the December,
consumer
price index of

178.81

in vast quantities "in case" presents a
very real
An unexpected and unheralded attack of
tions would

perform

cases, to
you

1950,

"In Case"
can

to
turned

objectives

many

designed

were

their

fied version of the "over-built" condition which depres¬

There

Life

Insurance

production capacity had been unduly
enlarged in this or that direction, and when it thus became
necessary to scrap a good deal of costly equipment and
plant. It could easily happen when the peak of defense
requirements have been met and when production capacity
must henceforth largely find markets in the civilian econ¬
omy alone, that we should be confronted with an intensi¬

simple:

factor in

comes

companies more than dou¬
bled, increasing $33 billion—from
about $31 billion in 1940 to ap¬

amount

channels.

inflation

course

serve

holders,

Impact of Inflation

have disclosed that

plan¬

develop controls. A somewhat
half-hearted attempt is thus made

the rate of life

Moreover, capacity itself becomes obsolete. There have
been many times in the past when ordinary depressions

sions have exposed in the past.

greatly over-simplify the prob¬
To the public generally, the

lem.

quite possible to make a fetish of this matter
^of capacity. Any "total war" must bring widespread diver¬

Such

that

have developed a tendency

many

place,; inflation
is the out¬
only $5 billion.
growth of deep-seated economic
surance industry makes this situa¬
At the end of 1940, when there maladjustments.
In the second
tion a matter of national impor¬
were
about
65
million
policy¬ place, its appearance on the scene
tance.
■
«
holders, life insurance assets aver¬ should not call so much for con¬
Life
insurance
companies are aged $474 per policyholder.
At trols, even though they may be
entrusted with savings of about the end of
1950, with about 83 necessary, as for well-considered
83 million U. S. policyholders, and million
In the third
policyholders,
company curative measures.

But it is

So much has been said about in¬

and

collect, hold,
invest and eventually return dol¬
lars to policyholders on a sched¬
ule prearranged 10, 20, 30, or even

consumer

the

flation in the past few years

page

sion of materials from

dedication

certain

problem on the part of every re¬
sponsible businessman.

paratively

justed to compensate for current

•

and

by and large, can keep abreast of of asset values is not hard to show. crisis which brought about the in¬
inflationary trends; nor can our During the decade of the '40s, the flation will
pass, and everything
payments to beneficiaries be ad¬ total assets of all U. S. legal re¬ will return to normal.
Con ro'is

The

It is quite possible that some of the more practicalminded husinessmen who have been drawn to Washington

Clearly, the situation requires
thinking, sound planning,

serious

to.

thawing-ont

it is not impossible that
the cost of living could go higher
—even
much higher.

Inflation and Life Insurance

very

Utilized by the Planners

in the face of such
process,

ourselves to what

arouse

gap

in fiscal 1952, with a

fessional Fair Dealers and some others who

when

come

inflationary
$6
to ' $26

about

from

The time

produced.

are

during

of
billion
medium esti¬
mate of around $16 billion, based
upon Federal expenditures of $75
billion. With this huge excess de¬
mand during fiscal 1952, the re¬
port points out that in the absence
of tighter con tfpis, present price
freezes could easily unf reeze; and
suggests

is to follow rearmament—and to what the Fair Deal

(2) A rather general tendency to

only if the right things

likely

coming year? A recent report

by the Department of Commerce
the Bureau of the" Budget

Infinitely increased production is healthful and

nonsense.

status of defense or rearmament.

;

Thursday, May 24, 1P51

and

from all too widespread in¬
difference on the part of large elements among the public,
is the insistence of the Fair Deal planners that there is
no such
thing as excess capacity or excess production in
a well-managed peacetime economy—that what is - essen¬
tial in the way of enlarged capacity for rearmament pur¬
poses is precisely what is necessary to insure the maximum
benefits in a peacetime economy. These "expanded econ¬
omy" enthusiasts, succeeding their blood brothers who
said only a short span of years ago that overproduction
was
killing the nation, are now in the way of having a
field day.
Their glib assurances that there is no such thing as
overproduction, hence of overexpanded capacity—in the
sense
in which they apparently mean it — is, of course,

difficult, the tasks of the re¬

i past

the

What disturbs us, apart

planners. This may or may not be unfortunate.
We suspect that, so far as the rearmament program itself
is concerned, it may be something of a mixed blessing.
But there are several aspects of our experience of the

supply

ably

.Fair Deal Planners '

armament

distortion of

or>

normal peacetime economy.

§4s We 'See ItEES§:'
*

(21G8)

cut value dollars.

* v

The extent of that cut in terms
1 Revised

Index.

perhaps 16%. or 20% of the

gross

national product within the

next 14 months. Consumer income

!will continue

to rise

in the face of

came

trol

the

evident that each lifted
merely

fires

increasing shortages of things con¬ not, by
sumers

buy.:*'

f/What is the
land business

excess

of" consumer

idemand over avail¬

tion,

any

died

removed
inflation

lid

which

con¬

from
had

stretch of the imagina¬
out.

manifestations /.of

the

outward

inflation

ap¬

peared in earnest all over again,

(218»>

became

and

Wartime

This

worse

savings

the

situation

huge

spent.

were

controls

farm products attempt ened.

to keep prices down, while parity

complicated arrangements

was

still further with the development

Some

wages

of the

while

the

present crisis.

Defense

ex-

penditures mounted, scarce materials

businessmen
generally scrambled

grew

arid

scarcer,

people

for goods

and supplies because it

assumed

was

they

disap-

would

pear, and we found ourselves back
where we were in the early days
of World War II.
'

Then

familiar

the

political

ar-

keep prices up.
have
been frozen,
continues

government

develop

Pi ophets

controls

proclaimed

begin-

I say "malignant social disease."

mind

that

dom of pricing for the
component

goods
materials at

raw

same

other levels,

ways.

t0^rAth-?
M.lmJn.uafV^
°fcontrofe
cure
in
spite of the grave dangers to

end-results of inflation would

Voluntary

Credit

Restraint

The life insurance industry par¬
ticipated actively in the develop¬
ment and drafting of the national

s^alnt"1
Life ^Trance represe'nl
'
..

sion.

describes

Men

influence, such

in this room,

you

provide for him-

dependents

progress in the world.

can provide

the

tegrity

the

insurance
the

traits.

dignity
has

rest

the

in-

individual.

self-reliance

the national interest?

Life

because

and

pressure am
1 exerting,"pr
permitting to be exerted on thy
behalf, to gain advantage or avoid
responsibility at the expense

square-

They

and

grown,

what

our rep-

democracy rest

those

.upon

upon

cepting the responsibilities of that
leadership is self - examination:

his

and

Our system

private enterprise and

resentative

Controls, at best, are only palliatives; but controls that don't conthat trol are not even that. Neverthe-

best

•

the growing tendency to turn from leadership in countless situations
self-reliance to looking to and de- and in a myriad of
ways.
That
pendency upon'government. That leadership can be exerted in the
is
the first phase of the disease,
intelligent operation of his own
This nation grew great because of enterprise and in the
enlighten-**
the initiative, drive, self-reliance ment of the people who work with
and self-respect of the individual and for him. The first
step in ac-

ning to be helpful. The life insurance industry aided in the draftwage
adjustments to keep •* pace ing of Regulation X and has supwith inflation. We have rigid con- ported the program at all points,
trols of some prices at some levels with statistics on the real estate —his desire
of distribution, and complete free- mortgage market, and in other self, for his

began,

again

consumers credit fields are

recognize cost-of-living wage
contracts that call for automatic
to

guments rang out, and the strug-

gle

The life insurance industry
supported the move in every way.
Regulations X and W tending to
restrict credit in the housing and

It is human

to look for one man to lead

out

of the wilderness. But if each m'an

self-respect

this

room

were

take

a
-

the

situation; and wise men coun- production: which can flow from
Vninnfavv rtLof the lndivldual; it fosters those
small part of the job, we could do
seied, not too effectively, that con- them. To my mind, the psychoUiedlt Kestiaint traits, and it would disappear if without him.
i
'
Committee.
irols don't cure anything — even logical
effect on the nation rethey withered away. Fanned by
A guiding
principle of the pro¬ the promises of those who would
good and enforceable controls. It quires them, all
^

—

apart

sawing

off

iceberg

other

the water level and assuming that

iceberg

sink

can't

you

Attack

The

now.

should

be?

it.

What

are

is:

question

be; doing?
that

where

about

Where

should

are three things
be done or not done about

can

There

have

only three

real

op-

lions.

nothing

and

hope that inflation will disappear
it

This

came.

dangerous

extremely

but

course,

that

one

followed early in World War
II, and again for many months in
the present Crisis.
was

Tiie

seconu

option

production. Everything

this

sidered,

probably

that

anvthinff
anything

but bring
brine:
but

have

anything

temnotempo

off.

are

free

controls

come

end-

the

resembling

the

later must

you

under
under

inflation.

measures

some

government,
©r

these

control

results

im¬

But we

deceive ourselves into

never

thinking
rary

con-

provement over the first.
must

sooner

And when

take the lid off, the pot will

boil
over.
boil over.

The

and

nize the

unfortunate fact that ef-

consumer—to recog-

controls

which

else

the

cannot

will

curtail

and -not

de-

every-

interfere

with

normal

progress of one's own
Some profits, som£ wases,

affairs.

votes, and

some

comforts

some

necessities

ever}

must

option is to make a
serious attempt to get at the eco-

extended

to help maintain

the domestic economy
through the
restraint of inflationary tenden¬
cies

and

the

essential

time

same

needs

help

program and
of agriculture,

industry and

commerce.

non-essential

purposes

Loans for

the

nation's

are

curtailed in order to release
of

pansion

ficed, the burden must be

shared

by all.

for

resources

Bear

80%

will

continue

vital

production.

sumption.

ex¬

areas

mind

that

our production
be for civil con¬

This

distribution

production

and

must 'be

system

sus--

tained.

sacri-

pating in the program
to

partici¬

are expect-

screen^Ioan applications

the basis of their purpose. The

Getting at Roots of Inflation

question is:

"Does

the loan

key

com-

What About the Third OptionAn attempt to get at the roots of

mensurately increase or maintain
production, processing and distri-

inflation?

bution

On this score, many groups, ineluding the Life Insurance indus-

services?"

try, have been active.
Working
through the Joint Committee oh

of many who

infiation Control of the American
Life Convention and The Life In-

Association

surance

America,
industry has

ijley insuranCe

tfje

been

pressing for sound

national

monetary, fiscal and debt management

policies

52LJ?

effort

efforts have been directed at

re-

The
some

of the major sources out of which

nomic roots, or some of the roots,
7 Tu
•
x',
j
t

essential

goods

and

that no volunwill work where
competing lenders are involved, I
believe that the voluntary protary

say

program

has helped to date, and I
have high hopes that it will prove
gram

effective in the future.

gramjjis .in

The

pro-

general terms.

The

least
has

the

whole

one

brought

©f

nations

©f

our

civilization

the

about

well

and

ruination

within

the

memories.

own

and,

downfall

scope
re-

inflation in this light, then
diagnosis and treatment are called
lor.
Like most serious diseases,
gard

this
or,

cannot

one

Let's

;

quickly, easily

least of all, painlessly cured.

tions,

these
time.

three

examine

one

op-

feasible,

which

puts

the

taxation

structive and

far

government

pay-as-you-go basis.
feasible because there is a

say

point

becomes

de-

inflationary; (2) for

campaign is doing about all that

advertising campaign can do.
Whether it or any other action
works, depends upon the underly¬
ing
attitude
of
the
American
any

tary

expenditures

effort

every

and

insure

tary expenditures

are

ciently

with

and

that

mili-

effi-

minimum

waste; (3) tor tightening monetary
credit

controls;

Personal

(4) for

man-

the

First

Option — Ignoring
hoping that it will
go away—little needs to be said,
The futility of this course, is self-

those

and

the

schools

grade

thoroughly instructed
its

cause

time

—

inflation,
and effect. Perhaps, then,
may be born a national
on

discouraging further rounds in the
wage-price spiral, calling for the
cooperation
of
both
labor
and
management.
the

will to take effective steps.

Life

hoe

"rncrranr,

has

program

Turn Now to the Second Option
The
installation
and
mainte¬

lated in

-—

nance

the

government controls.

present crisis,

the effort
.

establish

process

still

for

controls

without

has

been

time, and

some

effective

are

controls

spite of the actions of recent days,
In fact,
can
be
time

attention.

One

thing

stressed

the

Federal

which

ently

government

with

Present

freeze

with

the

believe

should

by the Life

when

done

has

be desirable to

Much

their

bonds
left

promote

done.

compared

sum

natural

maintenance of

field

appar-

relatively
price
an

or-

idea.

the

phase of the disease
is the likewise growing tendency
to

turn

from

than

the

and

would

productivity
suffer—but

groups

gainst
in

the

was

Investment
of

Gov-*

Bankers

America.

past District Chairman

National Association of Securities
Dealers, Inc., and in 1945 was a
member .of the Board of Gpv-

productivity
and
taking their share of the increase,
Most
press
for gains over and
above

was

America

of the Investment Bankers C'Onference, the predecessor of" the

or, in many or most
be justified. Few groups
willing to apply themselves

increasing

Investment
of

Barret

the

Association

econ¬

allocated

seem

ernor

otherwise

was

Springs^ West

Sulphur

Virginia. Mr.

and

to extract

pressure

government

omy

action

group

through group

the

Association

White

Barret

Kansas City to

Spring Meeting of the Boafd

Bankers

The second

Mr.

from

way

Governors

-J.

Missouri.

his

in his
Hotel, St.

Plaza

Some

main,

ernors

and

tional

Association

Treasurer

Dealers, Inc. He

government
tends
to
hand
out
funds not backed up by increases

of the

was

Na~

Securities

also Director

of the Kansas City Title Insurance

Company of Kansas City.
A

graduate

r\:

LawrencevfRe

The spectacle in Washing¬ Schooly, Lawrenceville, New Jerof
organized groups. sey, and of Princeton University,
seeking special advantages and at Mr. Barret was active in

away.
ton

today

the

college

time seeking to avoid
an sacrifice which should

same

any

sports

Princeton

shared

by all, is but a show¬
example of where turning to

case

and

captain

was

track

team.

the,

During

World War I, he served in France
with an ambulance corps. ..

government
has

led

and
We

us.

group
pressure
have seen where

Kansas City Mr. Barret gaVe
TO
much - T]me
time to
cnaritamG
charitable
eiiter-

„

miJpn

individual
individual

free

his

One

in
in effect
eriect to

ceases

citizen

and

becomes

organization

called

man

know

for.

Not

horseback

version,

that

demagogue

ppntpr

the

was

Princeton

City,

Rockhill

past President of

Club

Kapsas

Tennis

Club, the
University Club, the Kansas City
Country Club, and also a member

his modern
on

Presbyterian Church.

Mr. Barret

leadership
nor

^rK tonege and a memoer oi xne

Central

Moses

nor

President of the Children's

I must say that I
pat solution for this prob¬

lem.

was

rnnvaiPoPpnf

closing,

have

ward

•

For the last two years he

the

.cnfr.liaDie

Chairman of the Community
Chest Central Budget Committee.

state.,
grim results is infla-

the

tion.
In

be
oe

was

of the River Club of Kansas
and the

televi-

Kansas

City*

City Club.

NSTA

saving

than

interest

rate

the

benefits

of"saving.'

But, basically, none of the steps
to

INVESTMENT TRADERS

control

PHILADELPHIA

Philadelphia will hold,

their anni al
summer
outing at the Manufacturers
Country Club, Oreland, Pa. on June 15.
SECURITY

TRADERS

ASSOCIATION

NEW

Golf

inflation: will

succeed

unless the fundamental attitude of

good and tight in order to be op¬
We

suffering from a
malignant social disease. Inflation
are

of the end-results.

and,

YORK

Security Traders Association of New York (STANY) Bevel¬
ing League Standing of May 18, 1951 are as follows:
-•
2nd Half Final
1

...

Won .Lost

TEAM

Hunter

(Capt.), Lytle, Reid, Kruge, Swenson^

Donadio >

(Capt.),

O'Conner, .Whiting

DeMaye,

29
:

Work26 '19

Goodman

Kumm

.20

iCapt.), Lax, Valentine, M. Meyer, H. Frankel.
(Capt.), Weseman, Tisch, Strauss, Jacobs_-______

Greenberg (Capt.), Sullivan, Stein, Wechsler, Siegel

2.4

Mewing (Capt.), Klein, Cohen, Manny, Chegan__„„L„Leone
(Capt.), Krassowich, Nieman, Pollack, Gavin—

'22

Burian

(Capt.), Manson, King, Voccoli, G. Montanyne__
Serlen (Capt.), Gersten, Gold, Krumholz, Young
H. Meyer (Capt.), Smith, Farrell, A. Frankel, LaPat(w__
Krisem (Capt.), Bradley, Montanyne, Weissman, Gannon
Bean (Capt.), Kaiser, Growney, Gronick, Rappa_^

the people is right. On this score
I find I must screw up my courage

one

ASSOCIATION OF

The Investment Traders Association of

•

sus¬

more can

actively encourage
saving would cost an infinitesimal

jt will be maintained and
strength-

the

May

Park

would

timistic.

Certain

been

which

serve.
I believe it is a
long and
cfr0ng step in the right direction,
One can only hope fervently that

and

may

tain the economy.

derly market by the Federal Re-

liberty
•

seek

been

Louis,
on

died

Mo.,
at the

room

war, and the
proposals for spending in the so¬
cial field testify to the ■ virulence

under

City,

budgets, apart from

Insur¬

industry, other thrift insti¬
tutions, and by the government:
is, personal saving. Not only
is saving highly effective in clos¬
ing the inflationary gap, it is one
activity which is not in any way
injurious or detrimental to the

*end

prices,

market.

long

that

uneasy

controls

some

others

effective

even

Reserve Board

have
to

really

cost

ance

flowing from it—and such a rate
:
>
need not be high, in any event.
An, accord
was
reached
this We have not begun to exploit the
spring between the Treasury and possibilities of
salesmanship in the

level

leave
go

wide

made

peace.
to

pamphlets. ; It has attracted

free

peace,

been

through
Institute, this
widely circu¬

advertising, publicity and

I doubt whether controls

Working

Insurance

toil

the recipient. The
succession
of
unbalanced

Increased '

agement 0f the public debt in
such a way as to reduce the money
supply of the general public—^getting a substantial part of the debt
evident.
So far as I know, few out of the banking system into the individuals involved.
Only a post¬
advocate such a course today.
I hands of savers—making new is- poning of desires to purchase is
need discuss it no further, except saes
attractive enough
to
be called for. Furthermore, the sav¬
to -suggest
and
urge
that
our Placed
outside the banking sys- ings would be available for spend¬
people, especially young people— tem; (5) for a vigorous policy of ing following the defense effort
Of

inflation

sweat

Savings Should Be

bending

made

without

the part of

Barrel

Henry Barret, 54 years eld,
President of Barret, Fitch & Co.,
Inc., Investment Bankers, Kansas

PeoPle-

cutting to the bone all non-mili-

and

life
on

H'.

John

drafting sub-committee found it the surrender of individual disrImnnJhle to
tn write one in detailed
impossible
write one in detailed nity and independence to
groups
and specific terms. Its success will and group spokesmen led in the
depend upon a widespread desire case of "Hitler and " Mussolini." The

inflation
grows.
One important
ulIiauon
Srows>
<-me
imporiani ™ abide by its spirit.
inflationary
trends.
In facet of this is a
pr0gram directed
Finally, the life .insqrance.commany ;,quarters,
within
govern- toward
reducing the active money panies, acting through the Life Inment and without, honest efforts
SUpply in the hands of the public, surance Institute, have financed a
are
being made to get something
js
the
active
money
supply most substantial advertising camdone on this score. In this connec- which
does the mischief.
In this PaiSn designed to get cooperation
tion, I regard inflation as an'eco- connection, the
industry has from the public in matters that
nomic result of a grave social dispressed strongly (1) for a federal mi§bt further discourage the inease; one which has affected other tax program that cuts
directly into flationary spiral.
I believe this
countries in other times; a disease mass
purchasing power
caused

stay in political power, the
idea has grown that government
can
provide the better things of
or

in production—and the dollar rots

In spite of the defeatest attitude

of-, the

which

John

gain

cases, can

institutions

Financing
ed

strain the forces Jl
of inflation.

third

way

lective

create

palliatives — government controls
on prices and wages and, in some
cases,

nessman

one

first

The

raent, government, landlord, farmer, small
businessman, big busi-

signed

credit

more permanent finance the defense

bejng effected. But it is
to all of us — labor, manage-

damaging end-results of

inflation

That

in such

mflation^
while a
cure

that

gram

reason.

Much

the

Three Options

any

good can come from concan't trols which will effectively check

see,

ship.

from

This is the final standing
first

half

result.
will
67

Wall

awarded.
Street.

our

will

dinner
Dinner

second half.

the second

winner will bowl

Our' annual

to
;

be
.

23
2.4

„

2,9

2.9

This week

half winner for the tanaj

7, and all pn7.es
at Antlers Restaurant ,at

held June

held

22
2.1
,

The Commercial and Financial Chronicle

(2170)

Thursday, May 24, 1951

Anyway here goes. Inciden¬ Continued jrom
tally, allow me to wander off
at this point to mention that

Tomorrow's

Walter

the

stuffy about it, I suggest you
columns of the past

Says—

reread my

month

By WALTER WHYTE=

past three-four weeks was
unexpected. If I sound

not

Whyte

All this sounds

so.

preamble to one of
The fears that we are in the those "If-I-was-right - before,
first throes of a bear market I'm-right-now" things. I don't
are beginning to gain momen¬ mean it that way at all.
I've
tum. The fears are based on been humbled by this market
nebulous affairs sparked by a too many times to become
market action which would boastful or pompous about it.
a

it did not

rafps

give any
meemies.

bull the screaming

how¬
*
*
*
ever, as part of a major pat¬
The most widely accepted tern I thought I saw forming
theory is the one started by a few weeks ago. At that time
Peter
Hamilton
and
today I saw up tendencies when
forms the backbone of the
everybody cautioned against
Dow theory as espoused by a reaction.
Then when the
Robert Rhea. It says in effect
majority opinion seemed to be
that

new

rallies which fail to that

market

the

going
go above previous high points still lower, and then to be fol¬
are immediately suspect of a lowed
by a great big up, I
market

turn.

fol¬

this

was1

flatly said that I saw exactly
lowed by new declines which the opposite. No more down
go; lower than previous de¬ but an immediate up to be
clines, the suspicion becomes followed by a big down. You
intensified.

The

chances

are

saw
what happened.
Then
paraphrase is'all wrong. when it went up the forecasts
But you get the idea.
oi here-we - go - again were
once again in the fore. Again

the

I wish I could

categorically

I warned that the time to sell

when they were

was

strong.

disprove statements for and
the

against
other

than

for

market
a

selfish

reason

During the past week they
went lower than

they've been
long time. But instead of
pleas¬
ure to
explode theories. But running away with the mob,
I sounded a new warning:
I have little to give you in
That buying was best when
their place, except my own
the selling was widespread.
opinions. And there's no guar¬

that it affords

some

anty that they'll be right.

I don't know if

are

indvidual

Orders Executed
v

you
how's the

Schwabacher & Co.
Members
New

York

Curb

Stock

Exchange

Francisco

San

Exchange

Stock

14 Wall Street

COrtlandt 7-4150

Private Wires to

Principal Offices

Francisco—Santa

San

[The

buying
it.

' If

time

and the end of

now

not

coincide

Chronicle.

with

Fresno—Santa Rosa

They

Innnholes

SPECIAL
OPTIONS

U. S. Steel...

•

@44% July
@52%July
Cities Serv.v @102% Aug.
Armco Steel.. @42% July
Pure Oil'.... @52- July
Molyb. (Curb) @39
July
StuJebaker
@30% July
West. Maryl'd@24^ July
Frisco Pfd.

562.50

325.00

Beth. Steel...

Chi. Gr. West.

LouifT.-Nasb.
Merck Chem..

South. Pacific
Mo.Kan.Tx.Pf.

@65
July
@23% July
@52% July
@80% Aug.
@66% July
@59
July

13 $462.50
23

362.50

625.00

287.50

500.00

875.00

375.00

425.00

325.00

825.00

400.00

525.00

Subject to prior sale or price change

Explanatory pamphlet

PUT

OPTIONS

Members Put & Calls Brokers & Dealers

Dupont

v..

Astociatibn, Inc.

Broadway, N. Y. 4, Tel. BO 9-8470

connection

this

was

the

during 1948 and 1949 an
anoarently substantial fraction of
semi-processed

ostensibly

gold,

designed for industrial and artistic
tended

uses

legitimate

the

be diverted from

uses

world

to the free markets

premium prices
for hoarding purposes. The Fund,
therefore

while

strict trade in

reluctant

re-

gold for bona fide

in industry and the arts, re-

uses

members

quested

control

the

over

exert closer

marketing

semi-processed gold so as to minimze the

possibility of its becoming
a
significant medium for
hoarding. Arrangements were
worked
out
by the Fund with
certain gold producing countries,
notably
to

Africa,

South

certain

whereby

adopted

safeguards were

semi-fabricated

that

secure

275.00

Southern

300.00

Steel...42%Aug 24
Pac..65%Aug 24
Int'l Harvester.34%Nov 17
SPECIAL

CALL

gold would be exported only for
of genuine industrial or

artistic

OPTIONS

use.

Zenith

Radio..63

July 23

300.00

5/8/52
.54%Aug 17
N. Y. Central.. 18%Aug 17

125.00
175.00
162.50

Pepsi Cola.... 12
Western Pac..
Booklet

Puts

and

Calls

Request

Filer, Schmidt & Co.
Members
•l.

Put

Dealers

Call

Assn.,

30 Pine St., N. Y. 5

Brokers

concerned, the hoarding degold as a hedge against
further currency depreciation fell
off sharply. Largely because of
this, the premiums on free-market
gold prices over official prices
likewise declined markedly. Un-

der

the influence of

shift

WHitehoM 3-9177.

resources

south

the

manpower

deliberate

especially
effort

war

recovery in world

thereafter

has

siow>

1949

gold production

been ..extremely

production

had

of factors,
the wartime deteriora-

mining
pull on

0ther

resources

trjes

the

manpower

and

from other indus-

time

equipment;

full

employexpensive

costs

official

September,
in

the

prices

1949,

face

for

gold,

which

greatly reduced the profitability of gold mining. These difficulties

have

deviated

been

by special

-♦

only partly
aid to gold

•

the latter months of 1950, with the

newiy_mined

——

gold,

whole

™nre

which raised official gold prices
in terms of local currencies by
44% in the sterling area, 14% in
the Belgian Congo, and 10% in
Canada, enhanced the profitability
°f S°ld mininS in these countries,
wo?ld gold production in 1950 ac-

Hpvplnnmentq

whlrh ra^<fpd

hones of further inofficial

eoM

J?^ gHPn?and bec!me

Jeneral with^ further infrpp' n^rkpf told orices
H^vp^nm^^t^ w^re irmvitin

diversion
and

rose

by only another mil-

^ newly-mined gold
of

even

gold

from

tinTied

official

been^con-

since the turn of the

?ft in
tive

Marnh

•

q1i

and

vear

nractfces

longer

deemed

satis-

imnlpmpntinff the

Fund'sffold
the

Fund's

staff to

eHeetive

elab-

methods

ir h/S wirt Ll
re^; to he Teen Bu it fs dear
nniecc

snme

effective

b" takel? eithe/ by way of
annronriatefvchanging thTgold
revulsions and Practices of the
individual countrtes concerned

exert their ful1 effect

methods

would

have

Such

inflationary

renewed

higher
been

gold

late

entirely
lateral

has
the

method

for

pressure

prices

there

has

focused

almost

second,

multi-

raising

prices. For there would

gold

appear to

nothing in the'present balanceof-payments positions of foreign
countries
to

justify

with

the

United

States

a new round of devalua-

tions against the
dollar—which is
what the first method
would involve—or to lead one to
expect
that foreign countries in
general
would be willing to

undertake,

the
to

International Monetary Fund
such unilateral in-

sanction,

creases

Quite

official.. gold

prices,

the

contrary. As we have
aiready seen, during the past year
and a half foreign countries
have
greatly improved their balances
0f

payments

with

the

States and teve been
quire gold and dollar
quire
gold and dollar

United

able

Suggestions

for

tn*;r

rflsf>r*°,.a9-

reserves

substantial quantities from

us.

increase

in
'

the United States gold price, as
part of a multilateral, uniform inin official gold
prices, have
always been resolutely opposed
by the United States, as well as
by
the International Monetary Fund.
crease

This opposition seems to me to be
well taken, and I can see
nothing
in the present situation which
would in any way justify

revi-

™ aU'tUde'
The Price of Gold

The most significant effect of
a rise in the dollar price of gold
would be to increase

at a
stroke,
by 3 ProP^ionate amount, the
dollar value of existing foreign

uPon

reserves,
a

this

most unsatis-

way of achieving this ob-

ficial gold prices, or for increased countries which we do not want
freedom to dispose Of gold on free to help; and the greatest benefits
markets at Premium prices, as a would accrue, to " those foreign

■

means

alleviating

price-cost

emergmg

private hoards.

gold producers.
I should

lem calling for a few remarks is

methods

been a renewed chorus-of voices jective, especially at the present
from
gold-producing
countries time. The beneficiaries would incalling for further increases in of- elude both friendly countries and,

will continue to be attracted into

Another facet of the gold prob¬

existing for-,

Both

implications.

t'ons. Of late, in faet, there has factory

World Gold Production

kets), at least to the extent that
these spreads reflect anticipations
of higher official gold prices.
Both

set the original benefits conferred gold and dollar
°" S°ld producers by the devalua- would seem to be

action

ifrlrrmtinrthetcmntinffrtHfe?entdal^ between free-market and
foreisn^ official fiedd Drices d°svoid
turbingly large ■' amount V
of gold

; first,

gold stocks and of new gold
pror
duction, and thereby to provide
S°ld outPut- But meanwhile the foreign countries with a great
continuing sharp rise in costs un- fund of additional dollar purchasder the imPact Qf WOrld inflati°n ing P0Wer' WhUe " is in our in"
has already eaten away a substan- terests, for reasons already noted,
tial part of the '"crease in gold that foreign countries as a group
a"d haa t0 that extent off" shouId be equipped with larger
can

Africa
a

the

(and thus presumably the incentive to divert gold into free mar-,

Aus-

Fx' most> failed to increase their outPut in 1950 at alL 11 may be that
wiU take some time before the
several h[Zher official gold prices abroad

TncUiHin? South

ri.Wted

and

the

RhoS

tralia, which'of all the gold producing countries had devalued the

Bofrd
the Fund
a£
^at the Listin Jarrange-

^nntriPQ
were

have

*unlike

profitability of
gold mining and perhaps also narrow
the
spreads between freemarket and official gold
prices

now

the

squeeze

like to make

re-

countries already holding the most

gold and not
necessarily to those
with the greatest dollar
needs. If

few

observations

wish to

concerning the suggestion, that has again been be-

to build

coming prominent of late in

cer-

help foreign countries

up their reserves, a more
logical way would seem to be to

so,

/
.

curren-

the dollar
value, not
every unit of new gold

0^° In S ^

Cnuth AMca

^The^e trend^

the

case,

would enhance the

deter.loratJ°";of
_1?1 pdrty0Sfears part' 0n free markets/
nf°a ipn^ral wJ and with worldAlthough the devaluations,
\?J

method,

produced, but also
eign gold stocks.

K0ofU^?
a "T-b,er 0f. coun"
tnes'"eluding
subsidies, tax
reductions,
and permission
to sell

ond

Canada, Australia and other leading goid producing nations. The

depreciate against the

would raise

un-

and

Fund

dollar in direct proportion to
the
increases in official gold
prices; in
the second
case, exchange rates
WOuld remain unaltered. The
sec-

Africa, the United States,

rising

cies would

only

in 1945

Monetary

Agreement. In the first

During World War II, however,
goid production fell off
sharply and declined to a level of
ounces

provided for in the

exchange rates of foreign

world

only 21 million

are

international

metal.

fjxed

war,

justment

in value terms in view of

devaluations

noticeably.

eluding the United States. Conditions governing either
type of ad-

had

mines and to open mines that had
been shut down during the
war;
and above all, at least until the

circumstances, the flow
gold on to free markets
the
diversion
into
private

1938

expansion in gold supply, in fact,
that there was growing talk of a
world superfluity of the yellow

new

gold

average

ment,
the need
for
large-scale capital outlays to rehabilitate
and
expand
existing

der these

which

the

there might be a proporincrease
in
the
official
prices of all countries, in-

tionate

the increased prices for each unit
of gold produced. So great was the

heavy

cies

and

their

second,

price of
by about 70% as compared
with 1929, with no proportionate
increase in costs. Output rose not
only in physical terms, but even
more

large number

countries might in¬
official gold prices

1949—or,

ounces

gold

|ion

mand for

hoards fell off

decade

including

creased confidence in the curren-

Inc.

million

retarded by a number

ean

Corp..<. .23% Oct 19 $225.00
Steel.40%Aug 13 200.00

pansion in gold output has been

that

Crucible

reached in 1940. The postwar ex-

Following the devaluations of
September,
1949,
which
raised
official gold prices
in the devaluing countries and which in-

325.00

(Per Hundred Shares, plus tax)

Philco

doubled—from 19.4 million

risen only to 23.6 million
ounces,
or t0 just 65% of the
peak output

purposes

ments

Aug 27 $650.00
N. Y. Central.. 18%Aug 27 187.50
Magnavox ....16%Oct 23 275.00
.98

■

not

rigidly closed. Of most impor-

nonnced

on request

THOMAS, HAAB & BOTTS

could

those

(Per Hundred Shares)
Per 100 Shares

fact that

pen

•

not

were

by its
possible

the

individual

in the United States price
0f $35 per fine ounce—this is what
was done in
September,

(excluding Russia) had, in
physical t e r m s, approximately

increased

all

the

should

crease

tion

that

But

price,

(in terms of their own currencies)
without
any
accompanying
in-

the

00Id

SPECIAL

anomalous

thirties

Fund's request and to abide
nolicv

gold

tinguished. First,
of

crease

annual rate of world gold produc-

Mtually

are

the

1940—largely because of the widespread exchange depreciations of

wpacps

of the
presented as
those of the author only.}

Monterey—Oakland—Sacramento

somewhat

During

1930

official

following

States

that

especially

raised. Two ways of
raising
gold prices should be sharply dis¬

that of world
^gold production,
which in recent years has been
pattern.

and

export or import
regulations attempted to meet the

don't T^p<fp

expressed in this
necessarily at any

views

article

Barbara

time

any
to do

Beyond that I
to go on record.

want

Teletype NY 1-928

gold

raS
interested in quick
turnover, you'l-l have a chance ^Ip!

June.

New York 5, N. Y.

plan

you're

between

(Associate)

Exchange

Chicago Board of Trade

member

however, free-market gold
prices, especially in Far Eastern
countries teartul
countnes
fearful ot
of mvas]
invasion, rose
rose
sharply under the impact of a reAnmmri
Tn
surgence of" hoarding
demand.
In
'
J

beautifully golden 10 points
higher haven t dimmed their
radiance because they're obtainable cheaper today.

par-t,

stage of the game.

Pacific Coast Exchanges

New

their'

most

by appropriate changes

But the stocks which seemed
so

Securities

the

For

the

position of

With the outbreak of the Korean

at this

care

Pacific Coast

effect

members.

countries

the first stages of a bear mar¬
ket or what.' Frankly I don't

the

affecting

adversely

tance

this at you,

throw

had

they

international financial

unless

undermining official exchange

object to purely domesgold at premium

circles,

prices,

United

tic tranactions in
nricPQ

foreign

gold

The Gold Situation

the action'of the market for

Markets

tain

page

.are

now,

via

oui;

Number 5014

Volume 173

The Commercial and Financial Chronicle

(2171)

aid program, which en¬
help those countries we
help and •to the degree

foreign
ables

wish

which

Continued

from

The Nationalizers Become

increase in

Continued

gold price is that, at a time of
world-wide inflationary pressures,greatly to those

and, aggravate

sures

difficult

Nationalized—In ban

pres¬

containing inflation.

directly

created, both,
indirectly,; and the

and

psychological "effects would' also
be decidedly
inflationary. At a
time, moreover, when the Atlantic
Community is engaged - in a new

your

house

half

your

jewelry Us
the

steals

and

takes

;-,V;

The
affair

unfortunate

is, of

the

assets

worth

far

im¬

fact

that

company

tive

pooling

utilization

and

ate

effec¬

provement,
Technical

said

for

production ;.and

gold

ferring the
to

for

resources

trans-•*

There

lin

released

'few

are

would

urgent requirements.1 Fi-\ eagerly

with

the

125,000 tons

such

Assistance

the

Board,

the

•

goals

than

the

Krem-

achieve

the

investments

overseas

destruction

will

substituted

for

Si
the

give

on Tuesday,
May 15, which
incidentally was the normal lead

accounting for about

date

month.

per

added

for

July,

advised,

was

impetus to this

date

the

steel

industry

first,

that

the lead

this

for

single

program, the steel producers were

been cut to 30 days,

asked, regardless of glutted order
books, to support this program by

the

badly needed by many under-de¬ 000 tons. If
veloped* countries where " indus¬
t

Exclusive of M-6,

™lu"tar/ basls- Tbey

warehouse

over.200,-

order

had

apply

which is the

and

steel,

M-l,

the

converter

(als0 with the exception of

f. Pr°P°sed CMP plan of dis- jjne pjpe which

tnbution, which becomes effective

nally, I believe that an increase in„
British and the - Americans... Al¬ must
be
exported - along
with
the dollar price of4 gold is alsoUndesirable because our present ready Moscow has implemented "know how" in order to create an
its
propaganda
In many
toward effective .-combination.
looking
price, unchanged since 1934, has
this objective.
instances
development work of
been one of the few fixed

order,

non-integrated

understand correct-

month

and, seobnd,

DO "set-asides" to

new

in the month of July were identified.

anticipating the formal directive
and
increasing December shipdid this .to the extent of

;

But

month,

per

Asia

for

Far

of trialization has not advanced very
the far*- Quite
frequently - capital

CMP

Going?

effective

East, the UN Edu¬
cational, Scientific and Cultural
Organization, the Food and Agri¬

the

and

plates

discouraging

even

300,000 -tons

im¬

in various other countries.
For culture Organization," and others.
There
is no
doubt
example, if Anglo-Iranian can be
but
what
seized, why not the Suez Canal? American' technical assistance is

existing resources, there-is much
to

mately

economic

Economic' Commission

precedent for similar actions

half of 1951 has averaged approxL.

organizations dedicated

international

to;

Its

far

multiplicity'of committees, bu¬

major rearmament' effort, iL- military and political aspects have
widely
discussed
in ; the
is questionable whether, any spe¬ been
The; danger is that the
cial incentive should be given to press.
seizure of this property may cre¬
gold production; on the contrary,
most

that

rating procedures currently in use.
Within the past few days regulations 1, 2 and 3 have been issued,
Until Tuesday of this week, how-

oil

reaus and

may

billion- dollars. *

„

UN has

Iranian

mere

the

NPA

the month of May, when the reignored the quirement was reduced to the
situation, but. it is tonnage necessary for 9,000 freight
doubtful
whether
this
attitude cars. Total requirement of
indus-\ever, these regulations
dealt
can continue
indefinitely.
It has try for freight cars for the first primarily with broad principles,
The

and

in the interests of the

continued, as revised
each month during the. first half
of this year, with the exception of

Iran, UN, and Point Four-ism

Anglo-Iranian

course,

portant than
be

only
much a

who

one

all.:

would ,-be

power

into

burglar

of -spending

reserves

new

which have

already

problem in this, country

and abroad of

Vast

,the

July

page

Where Is All the Steel

our

it would add

from

„

deem desirable. Another'

major .objection: to

page

July

1,-programs

such

with

we will continue
DO rating)
these

new.."set-asides,"

based

the

on.

vari^s'steeT'producer^0
producers, no

various steel

points

reference

this

otherwise

Socialist

changing world. The stability of T
gold pricej has been ;of such-

our

psychological value that it
should not be lightly abandoned.
great

concluding these remarks, I
like

should

once

again to revert

The

ian

lesson

affair

Contagion

that

Anglo-Iran¬

the

kind

slow

and
opinion neither the inter¬

our

ests

the

United

process

States

nor

earlier comments regarding.' all, the Iranian Parliament is only
accumulations of gold
imitating the British; example if
and dollars by foreign • countries.;■ it decrees that Iranian oil should
I should like to re-emphasize that be nationalized.* Is it not there-/;
those accumulations, and the cor-* fore "logical to state that when¬
responding losses of gold and dol- ever
Washington
acts
unfairly

uals-and corporations.

lars

it has not been suffi¬
ciently emphasized by well mean¬
ing
but 4 impractical
promoters
of international understanding.

the

recent

tant

provement in -economic conditions

Central America and Anaconda in-

abroad, but theyX also • lay the
groundwork for further significant

Chile.

tives of our postwar

foreign

eco¬

nomic

policies, namely, general
interconvertibility * of ^currenciesfreer

and

multilateral;

criminatory

non-dis¬

trade.

world'

the' accumulation

long

How.:
mone¬

for

is.

already

the trend

that

long at

some

evidence

not continue

may

its present

rate.

For
thing, there has of late been?
some
softening - of raw materialprices, the high, level of which
has been, one of-the major-factors
increasing foreign dollar earnings
since June, 1950. Secondly, once
one

the expanded armament programs
in

European countries" get under

there will be increasing de¬

way

for

mands

American

from

Finally, in

broader

sense,

abroad

once

have

may

find further

accumulations less attractive than

acquisition of additional American
goods, and consequently cease, ac¬
cumulating and even draw down
those reserves, \

"widely

With Chilson, Newbery
,

Street,

announce

tion paid to owners.

hand, there is

On the other

distinct implica¬
tion/that such sovereignty must
not apply to a foreign corporation
operating under a concession or
contract.
This is strange reason¬
ing indeed since it establishes the
rule that the legality of an assault
on invested capital vanishes- when
international border is crossed.

the

philosophy

which char¬

the

Act,

acterizes

illegality
but

Mann

such

matter

that

is not absolute
geography, j;

It would not be too late at.this

point for Washington to announce
a

firming

our

NPA

the

mills

tonnage

deemed

contract'

car

have

55% V"*

2°~d finished bars

50%
_____

Galvanized sheets

for

—*

established
the

Low carb°n wire

2" country goods_______—110%
Pr9ssure ^bing

steel

soV large

that

plates

portion

JJa**s ,and accessories

___

Wheels and axles

—95%

10%,„**»

You will note that I have not
mentioned plates. The reason is
that plates are now set at 85%,
but they are to be figured upon

represent
the

70%

.Wire roPe —--—L——60% yr)

necessary for building
locomotives, which again required
a heavy contribution in
plates.

fact

•

;

/ .;

60%
60%
50%

High carbon wire

to provide

program

60% y
40%

—25%

Cold rolled strip

builders, railroadowned car shops, and component
parts
manufacturers,
and
producers of fastenings were added in
May. Commencing in April, NPA

40%

r°lled strip_______

covered

necessary

60% //;/

Reinforcing bars

Hot rolled sheets.
2°*d rolled sheets

any

Each month directives issued

Outing Huge Success

SAN

trans-

;

H
/

FRANCISCO, Calif.—The

clarification

Chilson,
Inc.,; 48
-the asso¬

assistant

American

investment

that

true

treaties

been

have

Frank

Barry Re-elected

[

Eugene P. Barry, partner of
Shields & Co., New York City,
was

re-elected

member

.-of -the

director

and

executive

mittee of Interstate Motor

Just

now

there is

any
a

publicity.

drive

adoption

their

those

Jeffrey

Granger, of Sulzbacher, Granger & Co., New York

New York.

the

Joins Stewart Co. Staff

pro¬

(Special to The Financial Chronicle)

MACON, Ga.—Irving
is

Lovitt

with Stewart & Company,
358 Third Street.
now

small

other than

any uses

specifically by the

been

net

result

all

quite simple. Any

this

of steel who has had the
and

good

business

fortune
the

;

Joins Dean Witter
(Special to The Financial Chronicle)

has

consumer

foresight

military economy can be mainGained successfully only if it i
matched by a . healthy civiliar

adapt his
requirements of

and businesS alike to keep their

ai?

Plated firmly on
.

g
,

far

has

had

orders

which

directed

pany,

Beyond

these

Skaggs

(Special to The Financial

Chronicle)

FRANCISCO, Calif.—Arthur F. Hoggard has become con-

slim indeed and undoubtedly will
become slimmer as the defense

m Sutter Street,

SAN

Davis, Skaggs & Co.
members of the
Francisco Stock Exchange.

nected with
San

<ti

expands.

Fortunately for
the railroads,, the great bulk of
their pressing requirements have
been

recognized,

now,

and

least
.

presume,

has

just been announced

With Baldwin, White
(Special to The Financial

Chronicle)

Mass.—Walter t.
Lewig ig with' Baldwin, White &
Co., 30 Federal Street, members
"by of the Boston Stock Exehahge.
,

adequately

programmed.
It

j,.

categories, as you
can realize readily
today, chances
to provide all the steel sought are

effort

■

510 South Spring Street,

With Davis,

steel

needs.

Moulton Adds to Starr

few worries about getting the steel
he; needed, because NPA issued
the

?
£

fitting within the pur(special to the financial chronicle)
poses and objectives of directives
LOS ANGELES, Calif— Johr
issued by NPA—that is, for direct
q. Youngs has been added to the
defense needs or any of the restaff of R. H. Moulton & Comprograms—so

crrnnnri

contracts

lated

economy, however austere. In thi . ,
emergency, whiclr history maj ■;..*<
descibe as one of the greatest in
;
?ur Peacetime experience^ there
>.
ls ?a real need for government
P

producers to supply those

Midday Club, 23 South'
tion
at
this
point.
Otherwise, 632 South Spring Street.'
Street/ New York City,
celebrates its 50th anniversary on they will become vulnerable to
"t.
the charge that they are merely
May 15. In honor of the occasion,
With Bache & Co.,
"give away"
members
of
the
club
will
(Special to The Financial Chronicle)
be promoting another
tendered a luncheon at the club program and building an inter¬
BOSTON,
Mass. — Joseph
L.
house, according to an announce- national Welfare State to be oper-/ Flagg has been added to the staff
ment byBuell Hollister^ President.-ated
by an overseas bureaucracy. of Bache & Co., 21 Congress St.
_

exceedingly

directed

The

LOS ANGELES,
they could do nothing bet¬
Calif.—Dougter than to stand
up and
voice Ids J. McCay has been added to
their opposition to the Iranian ae-, the staff of Dean Witter & Co.,

William

free to dis-

government

■

world

Club Celebrates 50 Years

products for

Jeffrey Granger Elected

part of the Point IV protagonists
the

only

are

fractions of their output of these

Freight

with foreign -countries in
- but
these are/ far City, has been elected President
from being sufficient. They have* of; the Brown University. Club of

tribute

means

is that the steel producers of this

country at present

com¬

recent -.years,

received;" little

produced before. What this
1

System.

few

Trust

Co.; Russell R. 'of our plate shipments
during which I quoted in terms of th
Shaughnessy & 'January, when our
shipments of actual sheet tonnage that will t
Co.; John Inglis, Blyth & Co., Inc.; this product broke all records in left f°r civilian consumption.
Collins
L.
Macrae,: Jr.,
Wulff, this commodity
up to that time,
This> then> is where the steel
Hansen & Co.; Jo Tvler. R. H.
except during World War II.
S°ing- 1 believe the days of eatin;
Moulton & Co.; R. C. Van Houten,
The fact of the matter is that, °ur cake and having it too hav
Heller, Bruce & Co.; and Ivan in addition to
plates,, NPA cur--Passed- However, the danger , i
Wing, Weeden &
rently is directing the distribution ev.?r Pr9sen^ ^at ^he pendulur
of more bars than have ever been will swing too far, for a soun>
Hodge.

policy for protecting foreign

investors. .'It

his

available

space

—

for the

say

same

needs

mill at the time your order is received.

must be

office.

City

earliest

will

and you
in the
defense

are.

this campaign. - If. the Point IV
father/ who- manages that;
They will constitute Glov- people are serious in their claimersville's first father and son in¬ that they really wish private cap¬
ital
to
flow liberally
into the
vestment team.
* /'"1
" :
under-developed
areas
of
the
to

other

Structural shapes-.
_
75%
/
Bays — 45%, plus? 15% - for „ :X*r:■>
shell steel quality, or a total^

total

mills

nine

;portation requirements, added to a new and different base. I am ^
those which are involved in ship advised that NPA's realistic ap- '
1:
many
capitalistic countries that
annual spring party of the San
repair, maritime vessels, and well- praisal of the plate requirements
lack of respect for private prop¬
^
Francisco Bund Clufcs held at the head
equipment,
has
brougnt
for
the
month
of
July
exceeds
the
erty and the wholesale violation
Santa Rarbara Biltmore, was pro¬ about a critical
of the sanctity of contract are ex¬
industry situation current production of plates on
nounced ;a
huge success by all necessitating curtailment in other the platemills of the industry by
tremely contagious.
/
"• ;;
products to meet the plate de- substantially more than 100,000
In a note delivered on Ma.y 19 attending, May 18-20.
Members of the Entertainment mand. For
example, the load of tons.
This
additional
tonnage
;
by the British Foreign Office to
Committee were: Jesse M. Levy,
Iran
the
plates which United States Steel therefore must be secured from
I
right of a sovereign
power
to
nationalize
privately Jr., Chairman, Lawson, .Levy & Company is committed to furnish sheet mills. This is merely another
j
Ernest Blum, Brush, for government directed tonnage way °f saying that the sheev
owned enterprise within its bor¬ Williams;
v,
Slocumb
Co.;
Daniel
Collins,
ders is not questioned, nor is the
-during .the month
of
June
is Percentage set-asides are actual!:
Holt & Collins; Harvey Franklin,
amount
and type
equivalent to approximately 96% much higher than the figure
of compensa¬
r

gram,"
and,
unfortunately,
too
much emotionalism has crept into;

company

make,
orders

the

handled, that is to

The

gersinger in the Gloversville of¬
the

San Fran. Bond Club

ciation with them of Floyd. J. Arof

tunately,

is'indivisible";-but

for

fice

are

An impor¬

process

recipient country must, be favor¬
able for * American
risk
capital.
This
is
imperative, but unfor¬

agreed

signed

KINGSTON,: N.
Newbery & Company,
.

Main

that "freedom

certain point, many for¬

countries

eign

and

export: industries.

monetaryreserves

risen to

goods,

progressively*

may'be

resources

diverted

now

part of this

your

manner

requirements

part

which

o£

tary reserves abroad Will continue,
nowever/ :• remains r, to*
be
seen...
There

towards sthev eventual,Jt_.is. only beginning to- dawn
of the basic objec¬ highly placed public officials

achievement

place

that the investment climate in the

by the United States, far- toward American business in Its from oeing a cause for • concern, * domestic operations it may jeop¬
should be viewed by us with sat¬ ardize the security of such im¬
isfaction. Not only do they funda¬
portant holdings as Aramco in
mentally1 reflect a genuine im-r Suadi Arabia, United Fruit in

progress:

required

recipient * country * will
be
with
valuable* : assets - overseas served I if the capital is derived
gives a hostage" to fortune and from the United States taxpayers
invites imitation when it attacks rather than from the voluntary
invested capital at home. ~ After investment of American individ¬

to my

Your
a

become

"set-aside"

country* the

any

will, obtain.
will

orig'na*
base Period
months of 1950 are:

longer
longer

BOS T O.N,

The Commercial and Financial Chronicle

(2172)

IRON

AMERICAN

INSTITUTE:

STEEL

AND

(percent of capacity).

Indicated steel operations

Equivalent to—
'
ingots and castings

Month

Week

Ago

-May 27

103.G

.May 27

2,071,000

2,077,000

that date,

or,

AMERICAN
Total

1,940,600

•'

March:

2,065,000

ASSOCIATION

GAS

sales

gas

Mixed

t"p"

—May 12
May 12
Kerosene output (bbls.)
May 12
Gas, oil, and distillate fuel oil output (bb,ls.)
May 12
Ke.iidual fuel oil output (bbls.)—
May 12
Stocks at refineries, at bulk terminals, in transit and in pipe lines—
Finished and unfinished gasoline (bbls.) at
May 12
Kerosene
(bbls.)
at
May 12
Gas, oil and distillate fuel oil (bbls.) at
May 12
Residual fuel oil (bbls.) at
May 12
Crude

stills—daily

runs

ii 6,460,000

6,283,000

6,127,000

20,962.000

20,322,000

19,371,000

18.264,000

2,485,000

2,773,000

8,035,000

8,453,000

2,691,000
8,492,000

2,047,000
7,177,000

Shipments

8,956,000

8,959,000

8,834,000

7,707,000

Stocks

134,522,000

135,764,000

139,431,000

17,740,000

16,802.000

14,337,000

125,851,000
13,916,000

47,056,000

45,247,000

43,203,000

38,139,000

36,557,000

36,095,000

36,826,000

39,255,000

(bbls.)

average

(bbls.)

output

AMERICAN ZINC

5,118,150
5,427,000

6,174,200

6,162,100

-.-.-----May-12.

gallons each)
Gasoline

——

6,120,200

'•

of that date:
Previous

Year

Month

Ago

4,745,569

4.922,364

4.215,314

4,377,588

4.533,443

3,829,017

224,333

233,741

252,601

143,648

155,180

133,686

'■'*

—

•'

are as

Month

__i
_

therms),..
1

;

either for the,:

are

Latest

(bbls. of 42

Month

(M therms)—
sales (M therms)

gas

sales

gas

For

—

therms* '

gas

Natural

Manufactured

AMERICAN PETROLEUM INSTITUTE:
Crude oil and condeascte output —daily average

of quotations,

cases

Ago
101.8

Thursday, May 24, 1951

production and other figures for the

cover

Year

103.3

Dates shown in first column

month available.

month ended

Latest

103.9

tons)

(net

Bfceoi

latest week

week

Business Activity

statistical tabulations

The following

Indications of Current

•

INSTITUTE, INC.—Month of

April:
Slab zinc

smelter output,

(tons of

Unfilled

(tons of 2,000 lbs.)
end

orders

period

end

TION

URBAN

period

(tons)—

THE

80.450

75,877

70,845

73.38J

14,511

11,105

52,520

77,293

80,769

56,304

LABOR —Month

77,813

69,113

VALUA¬

PERMIT

AREAS

DEPT.

(tons)—

CONSTRUCTION

BUILDING

—

all grades

lbs.)—

2,000

February (000's omitted):
/

(number of cars)
freight received from connections (number of cars)

Revenue

CONSTRUCTION

ENGINEERING

—

808,127

—May 12
May 12

freight loaded

Revenue

CIVIL

All

OF AMERICAN RAILROADS:

ASSOCIATION

803,337

701,382

684,567

711,789

New

691,086

603,176

New

construction
construction

Public

and

.State

municipal

Federal

17
17
17
17
17

$294,770,000

$220,797,000

$206,029,000

74,811,000

174,824,000

98,768,000

101,956.000

Wholesale

76,981,000

119,946,000

-122,029,000

104,073,000

Retail

45,157,000

90,851,000

69,376,000

91,963,000

Construction

31,824,000

29,095,000

52,653,000

12,110,000

Commercial

*9,710,000

9,973,000

10,102,000

845,000

749,000

529,000

999,000

135,700

*137,400

132,800

84,900

9,620,000

May 12
May 12
-May 12

INDEX—FEDERAL

SALES

STORE

AND

(COMMERCIAL

INDUSTRIAL)

—

DUN

60,340

BRADSTREET,

.'i.V-.;-

;—_

number

service

377

693

732

805

$5,894,000

$5,169,000

$7,980,000

2,200,000

2,211,000

3,807,000

5,647,000

5,605,000

7,179,000

2,268,000

3,292,000

1,465,000

1,055,000

1,375,000

819,000

$17,064,000

$17,652,000

$21,250,000

number,

liabilities

—

;—

liabilities

—

liabilities

Construction

service

-——

liabilities

May 12

313

326

288

308

May 19

6,559,218

6,566,813

6,730,464

5,844,561

liabilities

Total

SEED

PROD-

COMMERCE—Month

Received

Stocks

mills

Crushed

199

151

181

171

May 17

IRON AGE COMPOSITE PRICES:

(tons)

•'

•

.May 15

4.131c

3.837c

Fig iron (per gross ton)
flcrap steel (per gross ton)

.May 15

$52.69

$46.38

.May 15

$43.00

V
•

'"■■'•

(tons)
_

___

(pounds)

$32.42

$43.00

Domestic

refinery

Export
Hlraits

tin

(St. Louis)

Ixjacl
Zinc

•'

37,103

56,343

213,182

227,180

318,824

492,17S

335,248

575,329

at,:

at_.

—

•'

■

24.200c

18.200c

Stocks

24.425c

18.425c

.May 16

139.000c

142.000c

147.000c

76.875c

Shipped

.May 16

17.000c

10.500c

16.800c

10.300c

17.500c

10.500c

Government

•

corporate

Average

•

Railroad

Group

97.68

102.58

Produced

May 22
May 22

111.44

115.82

Shipped

May 22

114.46

114.08

May 22

110.15

110.52

May 22

105.86

115.43

106.04

108.16

111.25

111.44

111.25

.May 22

115.04

—May 22

2.68

Industrials Group

Hull

225,820,000

204,544,000

271,007.000

89,675,000

110,864,000

160,817,000

76,811,000

92,265,000

174,461,000

128,685

165,276

31—

186.445

104,030

144,994

220,201

140,621

178,852

230,161

53,282

67,211

84,657

54,728

74,261

116,870

68,657

94,566

133,274

59,864

82,573

126,774

75,772

104.707

98,431

142,774

■'

—!

Fiber

(1,000-lb.

bales)—

146,820

192,123

■:

•

119.20

Stocks

115.43

Produced

108.52

106.21

May 22

120 84

—

March 31—

(tons)

March

97.30

115.24

—

(running bales)—

97.33

115.24

162,217,000
177,433,000

(tons)

May 22

—

Utilities Group

Public

(tons)

Stocks

Bonds

103,897,000

121,061,000

(tons)

Produced

Linters

March

Stocks

75,456,000

(tons)

Shipped

March

(pounds*

99.469,000

•

(pounds*

Hulls—
•

MOODY'S BOND PRICES DAILY AVERAGES:
U.

(tons*

.May 16

853,10f

87,973,000

104,192,000

——

(pounds)

Produced

.May 16
.May 16

Louis) 'at———i

(East St.
i

24.200c

.May 16

60,010,000

(pounds)

Consumption
Ostkc and lytc&l

„

Oil—

Stocks

at
York)

(New

(New York)

Lead

refinery

March

Shipped (pounds)
Refined

QUOTATIONS):

M. J.

Produced

(E. A

;■

March 31

(tons)

Produced

Finished steel (per lb.)

PRICES

93
39$

Seed—

Stocks

Electrolytic copper—

BRAD-

COTTON

AND

March:

Crude Oil—

METAL

155

liabilities

Wholesale
Retail

lfcS

119'

365

—1

UCTS—DEPT.

INC.

STREET

97,236

number

Cotton

FAILURES

157,244

67,432

April:

number

COTTON

000 kwh.)

(in

Manufacturing

•2DESON ELECTRIC INSTITUTE:
output

360,221

270,314

SYS¬

RESERVE

TEM—1935-30 AVERAGE=100

Electric

$577,805

391,367

164,650

number

Commercial

DEPARTMENT

$758,917

340,070

Manufacturing number

$151,792,000

BUREAU OF MINES):

(U. S.

OUTPUT

Hitugiinous coal and lignite (tons)
Pennsylvania anthracite (tons)
Beehive coke (tons)

etc

FAILURES—DUN

Total

COAL

alterations,

INC.—Month

May
May
May
May
—May

$572,152
—;——_____

—:

nonresidential

BUSINESS

ENGINEERING NEWS-

construction

residential

Additions,

RECORD:

Total

Private

construction

building

777,989

V Shipped

110.88
c

March

31
—

Stocks

120.02

Produced

369

461

519

370

—

Motes, grabbots, etc,

116.80

460

March

(1,000 pounds)—

___

Shipped

714

:_L—

504

1,030
.

2,255
•

5.078

5,180

6,307

1,815

2,367

3,053

2,907

3,37i

1,917

—

'•

MOODY'S BOND YIELD DAILY AVERAGES:
O.

Government

Bonds.

corporate

Average

3.09

May 22

—

Aaa

May 22
Baa

Railroad
Public

Group

Utilities

—

_____________—.

Group

May 22

Industrials Group

2.65

2.31

3.09

2.86

2.89

2.88

2.61

2.93

2.95

2.69

3.16

3.14

2.88

3.40

3.39

3.38

3.25

2.89

;

______

2.68

-,Vo

3.27

3.12

3.10

3.09

3.10

2.81

2.90

497.0

498.0

•

2.90

2.65

516.3

387.5

EDISON

ELECTRIC

May 22

consumers—

February
Number

FREIGHT

COMMODITY INDEX

ultimate

of February (000's omitted*
from ultimate customers—month of

Revenue

ultimate

customers

Feb,

CAR OUTPUT—DOMESTIC

25,966,117

26,689,735

22,203,215

467,200,400

474,794,000

416, 129,500

45,213,823

45,085,983

43, 145,025

(AMER¬

RAILWAY CAR INSTITUTE)—Month

ICAN

MOODY'S

sales

Kilowatt-hour

Month

INSTITUTE:

April:

Deliveries

(number

cars)-

8,274

7,011

971

155,871

153,619

32,857

128.1

127.9

113.5

$153,724,000

$129,006,000

$152,034,000

47,349,000

41,556,000

48,070,000

8,682,000

7,959,000

8,354,000

22,689,000

22,573,000

21,704,000

62,476,000

53,161,000

63,116,000

Backlog of orders at end of month (number
NATIONAL PAPERBOARD
Orders

received

Production

ASSOCIATION:

(tons)

203,058

'379,141

199,937

186,417

May 12

252,035

252,896

248,406

211,915

May 12

104

107

102

_May 12

732,449

% 771,457

726,783

377,831

(tons)

Percentage of

activity—

Unfilled orders (tons)

May 12

INTERSTATE COMMERCE COMMISSION—
of

Index

April

153.9

154.8

120.5

INSURANCE—Month of

STOCK TRANSACTIONS FOR THE ODD-LOT ACCOUNT OF ODDDEALERS

AND

SPECIALISTS

EXCHANGE—SECURITIES
ft;

EXCHANGE

THE

orders

Number of

Dollar

STOCK

Odd-lot

May

33,178

31,997

30,980

33,804

ZZMay
ZZIll May

1,154,695

960,080

896,196

$53,432,366

$43,603,485

$38,575,902

1,057,132
$42,327,446

May

34,320

29,541

ZZ-—May

25,798

37,284

261

222

728

258

purchases by dealers (customers' sales)—
orders—Customers' total sales

Customers'

short

sales

Customers'

other

sales

Number of

Mav

34,059

29,319

25,070

37,026

Mav

972,495

__ZZ__ZZ~Mav
11111111111" May

820,862

713,919

1,079,127

9,401

7,839

9,989

963,094

813,023

27,004
686,915

1,069,138

$41,932,600

$34,634,428

$29,017,008

$39,598,777

259,080

242,450

198,160

343,520

2~59Zo80

242Z450

198" 160

3~43Z526

shares—Total sales

Customers'
Customers'

short

sales

other

sales

Dollar value

Round-lot sales by dealers—
Number of shares—Total sales
Short

May

sales

Other sales

Round-lot purchases
Number of

by dealers—

•a
,

PRICES

NEW

SERIES

'i*'

DEPT.

450,750
V. 1
OF

firms

Total

extended

Cash

Total

370,870

haaid

net

value

listed

value

listed

332,180

65,460,000

$358,738,000

$1,285,737

$1,303,605

$1,084,257

April

accounts—

balances..
in

S.__^

balances

credit

bonds—

U. S. Govt, issues

other collateral

MARKET

TRANSACTIONS

GUARANTEED

AND

debit

banks

customers' free

Market

TREASURY

margin

Market

49,887,000

$304,142,000

customers

and

Member borrowings
Member borrowings

RECT

392,270

EXCHANGE—As

carrying

customers'

Credit

WHOLESALE

STOCK

71,371,000

$366,291,000

(000's omitted):

Member

„

_______

values

YORK

dividends

Policy

NEW

Number of

LIFE
'

payments

Surrender

endowments

Annuity

PAYMENTS

March:

Disability payments

COMMISSION:

value

middle

benefits

Matured

Odd-lot sales by dealers (customers' purchases)—
Number of

Employment

average=10Q)_—

POLICYHOLDERS— INSTITUTE
153.8

May 18

—

Death
LOT

Railway

(1935-39

INSURANCE—BENEFIT

LIFE

OIL, PAINT AND DRUG REPORTER PRICE INDEX—1926-36
AVERAGE=100

cars)

A.—Month

44,324

54,023

50,531

375,073

391.325

310,958

379,267

678,232

102,747,277

918,245
98,112,284

82,415,209

100,247,400

114,382,062

125,497,1'27

47,716

60,779

125.975

700,814

803.326

680,2U

$8,370,000

$482,674,850

$1,123,500

$1,280,500

$1,076,000

$860,000

1,099,600

907,000

664,967

DI¬

SECURITIES

April:

Net, sales

LABOR—

1926=100:

Net

purchases

-—

—:

AIL commodities
Farm products
...

»•

Grains

Foods

ZZ"
ZZZ"
ZZ
ZZZZZZZZZ.Z

:—

Meats

All commodities other than farm
w
-

Textile products
Fuel and lighting

materials

Metals

products

and

Building

metal

and

—ZZZ!

ZZZZZZZZ

Chemicals

♦Revised.

ZZ_

materials

Lumber

'iii

foods

Z~Z

and allied

products

JNot available-

jincludes

ZZZZZZZZZZZZ
544,000

182.2

May 15

~~~

Livestock
_

May 15

ZZ_

barrSTof

197.1

*198.1

183.1
201.2

156.1

UNITED

165.0

184.7

188.3

189.5

172.8

May 15

259.3

*260.4

268.0

220.3

Exports
Imports

May 15

187.5

188.8

186.8

160.4

May 15 *

274.4

277.8

273.2

235.6

May 15

171.2

171.4

171.8

147.7

May 15

183.3

STATES

BUREAU

May 15

EXPORTS

WINTER

RYE

PRODUCTION

BOARD

136.1

PORTING

138.4

138.9

132.2

CULTURE—As of May 1

189.6

169.5

227.5

198.2

358.9

1441

144.4

144.5

May 15

foreign crude

runs.

.•

March

189.5
227.5

184.1

IMPORTS-

CENSUS—Month

May 15
May 15

183.4

AND

(000's omitted):

May 15

-May 15
_

*182.8

WINTER

WHEAT

CULTURE—As
t

;

*Reviaed.

* :

CROP

DEPT.

RE¬

AGRI¬

(bushels)

PRODUCTION

PORTING BOARD

116.5

—

CROP

23,263,000

22,977,000

RE¬

S, DEPT. OF AGRI¬

May

(bushels)^—

632.196,000

750,666,00$

Volume

173

Number 5014

The Commercial and Financial Chronicle

Securities

Now

Air Lifts Inc., Washington, D. C.
April 23 (letter of notification) 30,000 "senior shares"
(par $1). Price — $10 per share. Underwriter
None.

Registration

data

this

—

Proceeds

and administrative costs to
Office—1835 K St., N. W., Wash¬

Alhambra

Nov.
par

filed

($1

per

Gold

Mines

Corp.,

Hollywood, Calif.
80,000 shares of common stock. Price—At
share). Underwriter—None. Proceeds—For

indicates that it is

further development of mine and for
working capital.
•

.American

Bosch

Corp.,

Springfield, Mass.

•

May 17 filed 98,000 shares of common stock (par $2).
Price—At the market (approximately $15 per
share).
Underwriter—None.

Proceeds—To Allen

15.1% of outstanding shares).

198,000 shares,

Co.

(owner

Co., Chicago, III.
May 8 (letter of notification) 7,652 shares of common
stock (par $2) to be offered in
exchange for 15,304 shares
of

stock

common

Inc.,

(par $1)

one-for-two basis.

—43 East Ohio

Metal

Disintegrating Co.,

Underwriter—None.

Office

St., Chicago, 111.

•
Appalachian Electric Power Co.
May 23 filed $17,000,000 of first mortgage bonds, due
June 1, 1981. Underwriter—To be determined
by com¬
petitive bidding. Probable bidders:
Halsey, Stuart &

Co.

Inc.; Kuhn, Loeb & Co. and Union Securities Corp.
(jointly); The First Boston Corp.; Harriman Ripley &
Co., Inc.
Proceeds—To repay bank loans and for new

1, 1975 (to be issued in units
$100, $500 and $1,000 each). Price—91% of principal
Underwriter—Boettcher
& Co., Chicago, 111.
Proceeds—To retire indebtedness and for working capi¬
tal. Offering—Expected sometime in May.
amount.

•

Cornucopia Gold Mines, Spokane, Wash.
May 14 (letter of notification) 229,800 shares of common

listing.

new

Oregon Power Co.
May 21 filed 250,000 shares of common stock (par $20).
Price—To be supplied by amendment.
Underwriters—
Blyth & Co., Inc., and The First Boston Corp. Proceeds—
bank loans and for

new

construction.

Offering

Oregon Power Co.
May 21 filed $6,000,000 of first mortgage bonds due June
1, 1981.

Underwriter—To be determined by competitive
Probable bidders: Halsey, Stuart & Co. Inc.;

Smith, Barney & Co. and Carl M. Loeb, Rhoades & Co.
(jointly); Shields & Co.; Merrill Lynch, Pierce, Fenner
& Beane and Kidder, Peabody & Co.
(jointly); White,
Weld & Co.; Blyth & Co., Inc.; The First Boston
Corp.
and

Salomon

Bros.

Hutzler

bank loans and for

repay

(jointly).

Canam

;

Proceeds—To

construction.

new

Expected next month.

construction.

Offering—

Edison Co.

(5/29)

April 24 filed 40,000 shares of common stock (par $5).
Price—To be supplied by amendment.
Underwriters—
William R. Staats Co., Los
Angeles, Calif.; A. C. Allyn
& Co., Inc.,
Chicago, 111.; and Refsnes, Ely, Beck & Co.,
Phoenix, Ariz. Proceeds—To repay bank loans and for
construction.

new

Arwood

April

Precision

(letter

cumulative
fered

Casting Corp.
notification) 4,000 shares

non-convertible

stockholders

Price—At

/: <"'■>/.;'*•• ■'V'

;■

($25

par

and

public

share).

per

Proceeds—For working

preferred

Copper Co., Ltd.,

Vancouver, B. C.,

capital.

ceeds—For exploration

Underwriter—None-

Office—70 Washington

Street, Brooklyn 1, N. Y.

lative

Jan.

for

each

held; rights to

expire May 28. Unsubscribed shares to be offered up to
May 25, 1951, to employees and to stockholders on an
oversubscription privilege.; Price—$19 per share. Un¬
derwriters—Union Securities Corp. and Smith, Barney
&

Co., New York.

Proceeds—For construction program.

•

par ($10 per share).
general corporate
Office—312 South 15th Ave., Phoenix, Ariz.

Proceeds—For

Central Louisiana Electric Co., Inc.
25 filed 250,297 shares of common stock

common

Gulf

and

l/25th of

common

held

share of preferred for each
of record March 13.
This

offer will

expire on June 15 and will not be extended.
remaining 35,497 common shares, 20,348 shares

the

offered

are

of record

for

June 4.

less

Central

Louisiana

May 1, 1951 at $26.50
each

than

None.

—

429,600 shares

stockholders

basis of

one

with rights to expire

Purpose—To acquire not

(80%)

March

common

per

shares held,

Underwriter

of Gulf

stock.

common

12.

Chester Telephone Co., Chester, 8. C.

May 17

March 15

mon

stock.

(letter of notification) 360 shares of common
per share. Underwriter—None. Pro¬

Price—$100
For plant

writer—None.

Proceeds—For expansion and drilling
working capital.
Office—400 Madison
Avenue, New York 17, N. Y. •

ceeds

costs

Street, Chester, S.

Bigelow-Sanford Carpet Co., Inc. (Del.)
May 16 filed 100,000 shares of cumulative preferred stock,
series of 1951 (par $100), of which 39,604V2 shares are

March 14 filed 900,000 shares of common stock (par
$1)
to be offered "as a speculation."
Price — 50 cents

and

for

Commerce to

improvements.

—

Office —109

Wylie

per

share.

Underwriter—Willis E. Burnside & Co., Inc., New
Proceeds—To take up option and develop prop¬
erties.
Offering—Not expected before the middle of

York.

The dividend rate will be not less than 4J/2% nor more
Price—To be supplied by amendment. Under¬

June.

proving issue.
•

Black

'..

Gold

Oil

Co.

ap¬

; ;

Nevada, Inc.
May 14 (letter of notification) 96,000 shares of class A
stock.
Price—At par ($1 per share). Underwriter—Ed¬
ward McGuire, Las Vegas, Nev. Proceeds—To
complete
an oil well now
being drilled. Office—206 Beckley Bldg.,
Las Vegas, Nev.

market.

Wash.

Distributor

—

Frank

Russell

Price

Co.,

—

Tacoma,

Proceeds—For investment.

•

Bryant Air Conditioning Corp.
May 22 (letter of notification) 5,000 shares of common
stock
(par $1).
Price—$4 per share.
Underwriter—
None.
North

Proceeds—For
Front

working
capital.
Street, Philadelphia, Pa.

Office—915

Bug Drilling Co., Inc., Philadelphia, Pa.
May 21 (letter of notification) 1,500 shares of
stock.

Price—At

($100

par

per

share).

common

Burlington Mills Corp.
March

5 filed 300,000 shares of convertible preference
(par $100). Price—To be supplied by amendment.
Underwriter—Kidder,
Peabody
&
Co.,
New
York.
Proceeds—For additions and improvements to plant and
equipment. Offering date postponed.

stock

•

Byron Jackson Co., Vernon, Calif. (6/12)
May 18 filed 100,000 shares of capital stock (par $10).
Price—To be supplied by amendment.
Underwriters—
Blyth & Co., Inc. ana El worthy & Co. (of Los angeles
and

San

Francisco).

Proceeds—To

construct

plant in the Province of Ontario, Canada.

and

equip

certificates

one

tion expenses and

working capital.

Underwriter:—Halsey, Stuart & Co. Inc. Proceeds—To
loans by $9,000,000, and the balance added
to working capital.
Offering—Indefinitely deferred.
reduce bank

Corp., Chicago, III.
132,182 shares of common stock (par $5),
subscribed for by stockhold¬
ers and 127,364 shares are to be offered to public. Price—
To stockholders at $5 and to public at about $6.77 per
share.
Underwriter—Dealers may be underwriters. Pro¬
filed

of which 4,818 shares were

ities.

investments

Statement effective

today.

railroad

and

April 11.

kindred

secur¬

Offering—Expected

Cumberland

(Md.) Motor Express Corp.
April 26 (letter of notification) $150,000 of five-year 5%
notes and 50,000 shares of common stock
offered in units of $1,500 of notes and 500

(par $1) to be
shares of stock.
unit. Underwriter—F. S. Yantis & Co.,
Inc., Chicago, 111. Proceeds—To retire three-year 5%
promissory note. Office—Springdale and Third St., Cum¬
berland, Md. Offering—May be made privately.

Price—$2,000

per

•
Deardorf Oil Corp., Oklahoma City, Okla.
;May 18 (letter of notification) 200,000 shares of common
stock (par 10 cents). Price—70 cents per share. Under¬
writer—None.
Proceeds—To pay obligations.' Office—
219 Fidelity Bldg., Oklahoma City, Okla.

Dewey & Almy Chemical Co. (5/29)
May 8 filed 200,000 shares of common stock (par $1).
Price—To be supplied by amendment.
Underwriter—
Paine, Webber, Jackson & Curtis. Proceeds — To retire

•
Drewrys Ltd. U. S. A., Inc., South Bend, Ind.
May 14 (letter of notification) 6,915 shares of common
stock (par $1).
Price — $14 per share. UnderwriterBear, Stearns & Co., New York. Proceeds—To Carleton

Smith, the selling stockholder.

filed

$25,000,000

first

Oct.

mortgage

bonds due
be determined by com¬

1, 1986. Underwriter—To
petitive bidding. Probable bidders Halsey, Stuart & Co.
Inc.; Dillon, Read & Co. Inc.; Blyth & Co., Inc.; White,
Weld

Co.

and

Co.; The First Boston
W.

Corp.; Glore, Forgan &
Langley & Co. (jointly); Equitable Se¬
Proceeds—For new construction.

curities Corp.
•

Codman &

May

Shurtleff,

(letter

Inc., Boston, Mass.
notification) $50,000 of 5% 10-year

2,000 shares of

common

stock

(no par) to be

offered in units of $100 of notes and four shares of

Price—$100
For

per

working

unit.

Underwriter—None.

capital.

Office—104

sto^.

Proceeds-^-

Brookline

Avenue,

(letter of notification)

balance of purchase price

for building ($20,000) and for

working capital.
Ekco Products Co., Chicago, III.
May 9 filed 35,000 shares of common stock

(par $2.50)

to be issued

only upon exercise up to and including Oct.
22, 1955, of options to purchase such shares granted on
Oct. 23, 1950, to certain employees
(including certain
officers and directors) of the company. Price—$13.78 per
share.

Underwriter—None.

porate

purposes.

•

Eikhorn

stock

Consolidated

Cigar Corp., New York '

March 9 filed 50,000 shares of cumulative preferred stock,
series of 1951 (no par). Price—To be supplied by amend¬

Proceeds—For general

cor¬

Mining Co., Boulder,

Mont.

Price—50 cents

share. Under¬
Proceeds—
working capital. Office—Boulder Bank Bldg., Bould¬
(par 10 cents).

working capital.

per

writer—Cecil Nelson Randle, Boulder, Mont.
For
er,

Mont.

Underwriter—Eastman, Dillon & Co., New York.
—

340,000 shares of com¬

stock (par 10c).
Price—75 cents per share. Under¬
writer—Olds & Co., Jersey City, N. J. Proceeds—To pay
mon

May 14 (letter of notification) 125,000 shares of common

Boston, Mass.

Underwriter—

Proceeds—For

drilling "and operating expenses.
Office^-2717 Fidelity-Philadelphia Trust
Bldg., Broad
and Samson Streets, Philadelphia, Pa.

May
June

Proceeds

•

None.

Cleveland Electric Illuminating Co.

ment.

stock

mon

Duggan's Distillers Products Corp.
•

notes and

•

Bondstock Corp., Tacoma, Wash.
May 21 filed 100,000 shares of capital stock.

construction of hotel.

share of one and two cent par com¬
companies.
Price—$2 per unit.
Un¬
derwriter—None,
Proceeds—For drilling and explora¬

representing

than 5%.

porate purposes./Stockholders will vote June 19

secure

$1,100,000 of 3%% serial notes issued April 1, 1949, and
for working capital.

Chevron Petroleums, Ltd., Toronto, Canada

issuable to holders of 26,403 shares of 6% preferred stock
on the basis of IV2 shares for each
preferred share held.

writers—Harriman Ripley & Co., Inc.; Kidder, Peabody &
Co., and F. S. Moseley & Co. Proceeds—For general cor¬

Proceeds—To pur¬

Cuban-Venezuelan Oil Voting Trust
March 29 filed 1,500,000 units of voting trust

ceeds—For

(par $10)

21,480 shares of 4.5% preferred stock (par $100), of
stock and 214,800 shares are being
offered in exchange for shares of common stock of Gulf
Public Service Co., Inc., on basis of 4/10ths of a share

Baruch Oil Corp.,

New York
(letter of notification) 260,000 shares of com¬
stock (par 10 cents).
Price—$1 per share.
Under¬

Price—At

stock.

None.

—

Statement effective

Statement effective May 8.

cumu¬

and

one

Underwriter—None.

Dallas Co., Inc., which com¬
pany will construct Dallas hotel. Business—A non-profit
corporation under sponsorship of Dallas Chamber of

Oct.

which the preferred

preferred

Underwriter

Cosmopolitan Hotel Co. of Dallas, Tex.
Dec. 13 filed $1,500,000 of 2% debentures due 1965. Price

Culver

Capital Feed & Seed Co., Phoenix, Ariz.
May 16 (letter of notification) 27,500 shares of 6%

Atlantic City Electric Co.
April 15 filed 117,200 shares of common stock (par $10)
being offered to common stockholders of record May 8
rate

and development work.

•

of 5%%

being of¬
July 1, 1951.

April 20 filed 200,000 shares of capital stock. Price—At
par ($1 per share).
Underwriter—Harry M. Forst. Pro¬

purposes;

stock

capital. Office—824 Old National
Bldg., Spokane, Wash.

Cudahy Packing Co.
March 23 filed $10,000,000 sinking fund debentures due
April 1, 1966. Price —To be supplied by amendment

■

Canada

Arizona

Proceeds—For working
Bank

chase debentures of Statler

California

bidding.

stock (par five cents). Price—To be determined by direc¬
tors, but not exceeding $1 per share.^ Underwriter—None.

—At face value.

—Expected next month.
•

Electric Co., Geneva, III.
(letter of notification) $300,000 of 6% sinking

California

To repay

American-Marietta

entirely

ISSUE

fund debentures due Dec.

Where

sources.

changes have been made during the past week, this
is indicated by the symbol
Or) appearing at the end
of the respective listings. As heretofore, the symbol
(•) preceding the name of the prospective borrower

ington 6, D. C.

ADDITIONS

Continental

information made

available by the SEC or other reliable

INDICATES
SINCE

March 2

compilation is brought up-to-date

each week in accordance with later

For equipment

—

manufacture aircraft.

•

ITEMS REVISED EACH WEEK
The

(2173)

Continued

short-term bank loans and for
Offering date postponed.

prepay

Consolidated Textile

Co.,

page

Inc., New York

Dec. 27 filed 220,000 shares of capital stock (par 10 cents),
offered in exchange for 200,000 shares of common stock
of

Bates Manufacturing Co.
(Consolidated now owns
51,400 shares, or approximately 13% of the 391,500 out¬
standing Bates shares) on basis of 11 shares of Consoli¬
dated

for

expire June 29.

of Bates

stock.

Exchange offer to

Statement effective March 2.

Continental

Car-Nar-Var Corp., Brazil, Ind.
(letter of notification) 150,000 shares of com¬
(voting) stock (par $1). Price—$2 per share. Under¬

March
mon

writers—Sills,

Fairman

Harris,

Inc.,

Chicago,

and

Gearhart, Kinnard & Otis, Inc., New York. Proceeds—
For

working

capital

Temporarily deferred.

and

general

corporate

New York

Boston

Philadelphia

Pittsburgh

San Francisco

Chicago

Cleveland
/

purposes.

Private IVires to all

offices

(2174)

The Commercial and Financial Chronicle

Continued from page 33

Allen

Thursday, May 24, 1951

Co., Inc., Los Angeles, Calif.

purchase baking machinery and equipment.

Elgin Sweeper Co., Elgin, III.
April 18 (letter of notification) 38,864 shares of common
stock (no par, being offered to common stockholders of

NEW ISSUE CALENDAR

•

record

April

basis

one

for

each

■

1951

May 25,

two

/ v.'..'

Common

Virginia Electric & Power Co.

held, with an oversubscription privilege; rights
expire about June 11. Price—$5 per share. Under¬
writer—None.
Proceeds—For working capital.
Office

Oak

Street, Elgin, 111.

•

which

19,593 shares

Mays (J. W.), Inc

Common

for the account of the company

are

Common

Dewey & Almy Chemical Co

Common

Telephone Co., Madison, Minn.
May 9 (letter of notification) 2,000 shares of common
stock and 1,200 shares of preferred stock. Price—$35 per
share for common and $50 for preferred. Underwriter—
None.
Proceeds
To rebuild rural telephone system.
Office—Cerro Gordo, Madison, Minn.

writer—Franklin

Noon

Idaho

—

___

Woolen

1951

March

(EDT)
Manning, Maxwell & Moore, Inc
Georgia Power Co., 11

Distributors, Inc., New York. Proceeds

a. m.

June

Common
:

(letter

New

June
North

Penn

Gas

Baltimore, Md.

(letter of notification) 22,500 shares of 5% nonprior preferred stock (par $5) and 95,000
shares of common stock (par 20 cents).
Price—Pre¬
ferred at $5.60 per share and common at par.
Under¬
writer—None.
Proceeds—For equipment and working
capital. Address—Box 7705, Baltimore 21, Md.

stock

common

advances

the

construction

subsidiaries
and

Texas Electric Service

June
Glenmore Distilleries

June

connection

for

general
Statement effective May 1.

poses.

with

corporate

their
pur¬

Georgia Power Co. (6/5)
May 4 filed $20,000,000 of new first mortgage bonds
due June 1, 1981. Underwriters—To be determined
by
competitive bidding. Probable bidders: Halsey, Stuart

Glenmore
Dec.
par

$1).

Distilleries Co.

June 5.

filed

159,142 shares of class B common stock
Price—To be filed by amendment.
Under¬

writer— Glore,
For

working

Forgan & Co., New York. Proceeds —
capital and general corporate purposes.

Offering—Expected

withdrawn

and

new

Goebel

(Adolf), Inc.

/
common

stock

(par $1).
Price—At the market (about $5.25 per
share).
Underwriter — The First Guardian Securities

Corp., New York.

Proceeds—To

Anthony De Angelis,

President, the selling stockholder.
Golconda Mines Ltd.,
Montreal, Canada
April 9 filed 750,000 shares of common stock.
Price—
($1 per share).
Underwriter—George F. Breen,
.New York.
Proceeds—For drilling expenses,
repayment
of advances and
working capital. Offering—Date not set.
At par

River Steel

Corp., Louisville, Ky.
May 10 (letter of notification) 342,500 shares of

common

stock to be sold to three

individuals and six underwriting
firms (latter includes A. C.
Allyn & Co., Inc., Chicago,
Reynolds & Co., New York).
Price—At par
(25 cents per share).
Underwriter—None.
Proceeds—

To construct steel plant.

Building, Louisville, Ky.

Office—Kentucky Home

1951

Life

Kansas Power & Light Co.

bank

(CST)—Bonds
Bonds

Co., 11:30 a.m.—

19,
Co.

1951

24,

1951

loan

(S. S.)
stock

common

Underwriter—None.

dorf-Astoria
May 28.

Corp.

exchange

for

Lorain

Tights to expire
writer—None.

holdings

July 1. Price—$20

$.oyalta

per

share. UndeT-

working capital.

Imperial Brands, Inc., Los Angeles, Calif.
40,000 shares of capital

stock. Price—At par ($1 per share). Underwriter—Floyd

Office—

Lorain, Ohio.

Oils, Ltd., Edmonton, Canada

April 16 filed 750,000 shares of capital stock (par $1).
Price—50 cents per share. Underwriter—James T. Chiles
of

Denver, Colo., who will conduct offering to public by

meafts
ada.

of a mail campaign directed from Edmonton, Can¬
Proceeds—To carry on drilling program.

Manning, Maxwell & Moore, Inc. (6/5)
filed 150,000 shares of common stock

(par

$12.|0), to be offered to stockholders of record who have
not

^ waived their preemptive rights at rate of 15/44ths

J; share held,

as of record about June 5, 1951. Pride
—T$ be supplied by amendment. Underwriters—HornbloWer
•

Weeks

Proceeds—To

and

Clark, Dodge

& Co., New York.

redeem $281,000 of preferred stock arid for

'-■/;</>

»*(■;.", *'

-V.',.-,;'-.-.

Mays (J. W.) , Inc., Brooklyn, N. Y. (5/28); ;
•April 27 filed 50,000 shares of common stock (par $1).

Priqe—To be supplied by
Carl/ M. Loeb, Rhoades &

amendment. Underwriter—
Co. and Lehman Brothers,

Nev^ York.
the

Idaho Power Co,. (6/4).
May 14 filed 35,000 shares of 4% preferred stock (par
$100). Price—At par. Underwriter—Wegener & Daly
Corp., Boise, Idaho. Proceeds—For new construction.
^

(letter of notification)

Proceeds—For

West Ninth St.,

working capital.

New York.

May 2

Telephone Co., Lorain, Ohio /

(letter of notification) 6,705 shares of common

Mayf l6

III.

stock" (no par), to be offered to common stockholders
at the rate of one share for each 10 shares held March 10;

their

Plywood Association, Portland, Ore;

Proceeds—To improve plant site and ac¬
quire facilities and machinery.

Proceeds—

share-for-share basis; offer expires "on
Dealer-Manager—Carl M. Loeb, Rhoades & Co.,
on

subscriptions.

Co., Philadelphia

Corp., Chicago,

Co., Detroit, Mich.

$2,500 per share for preferred stock. Underwriter—
None, but John J. Oxley and J. A. Williams will solicit

22,000 shares of class B

March 30 filed 153,252 shares of common stock (par $5)
now offered to holders of common stock of Hotel Wal¬
such stock

•March 13

Jenks, Kirkland & Grubbs, Philadelphia, Pa. Proceeds—
To increase capital and surplus in order to offer addi¬
tional lines of insurance, including automobile casualty
and liability coverage.
Financing indefinitely delayed.
Hotels

■

„

and

(letter of notification) 64,000 shares of capital
(par $5). Price—$4.50 per share. Underwriter—

Hilton

Proceeds—To repay

May 10 filed 400 shares of common stock and 200 shares
of preferred stock. Price—$5,000 per share for common

Services, Inc., Greenbelt,

Insurance

York.

construction.

(par $10).

holder.

Street, Brooklyn 15, N. Y.

Fire

new

Price—$39 per share. Un¬
derwriter—Watling, Lerchen & Co., Detroit, Mich. Pro¬
ceeds—To Estate of Anna E. Kresge, the selling stock¬

Bonds

share.

for

and

May 10 (letter of notification) approximately 7,690 shares
of

Gyrodyne Co. of America, Inc. (5/28)
March 14 (letter of notification) 34,320 shares of class A
common
stock (par $1). Price—$5 per share. Under¬
writers—Company itself in New York, and Jackson &
Co., Boston, Mass. Proceeds—Tor partial financing of
anticipated military contracts and for acquisition of new
manufacturing facilities.
Office—80 Wall Street, New
York 5, N, Y.
*
"

stock

(6/12)

.—Preferred

<203

Wash.*

Debentures

1951

To pay mortgage on shopping center.

Oct.

Statement effective

York, and J. J. B. Hilliard & Son, Louisville, Ky. Pro¬
ceeds—For property additions and new construction,
it

stock and 3,000 shares of class A common stock.

Hamilton

Utilities

—

Service, Inc._

Power

per

Public

Kentucky Utilities Co. (6/1)
May 14 filed 260,071 shares of common stock (par $10)
to be offered to common stockholders of record June 1,
1951 at rate of one share for each seven shares held;
rights to expire or. June 18. Price—To be supplied by
amendment.
Underwriters
Blyth & Co., Inc., NeW

1951

(letter of notification)

Price—$10

General

Inc., Nighthawk,

The First Boston Corp., New

Maryland

filing

expected to be made covering 30,000 shares of preferred
stock (par $100), with warrants attached.

May 14 (letter of notification) 10,000 shares of

18,

Greenbelt Consumer

common

(EDT)

•

Greer Hydraulics, Inc., Brooklyn, N. Y.
May 11 (letter of notification) 21,150 shares of common
stock (par 50 cents).
Price—$4 per share. Underwriter
—None.
Proceeds—For general corporate purposes. Of¬

•

May 22 filed 256,842 sares of common stock (par $8.75).
Price—To be supplied by amendment.
Underwriter—

—Common

Linnton

May 11

Inc.; Morgan Stanley & Co.; Lehman Bros.; HarriRipley & Co. Inc.; Shields & Co. and Salomon Bros.
& Hutzler
(jointly); Blyth & Co., Inc. and Kidder, Peabody & Co. (jointly); The First Boston Corp.; Kuhn,
Loeb & Co.; Union Securities
Corp. and Equitable Secu¬
rities Corp. (jointly). Proceeds—For construction
pro¬
a.m.

September 11, 1951

& Co.

Bids—To be opened at 11

Mississippi Power Co

18th

:.,7'v

Mines, Inc., who in turn will distribute them among
W

Kresge

man

gram.

15,

July 17,

fice—454

Price—To be Supplied by amendment.

programs

Consolidated,

its stockholders.

Missouri Powet & Light Co., 11 a.m.

equities of subsidiaries and temporary

V' '"

(letter of notification) 3,051.911 shares of com¬
(par 25 cents) to be issued to Kaaba Silvhr

Lead

Alabama

•

stock

mon

Common

Public Finance

Common

June

General Telephone Corp.
April 19 filed 150,000 shares of common stock (par $20)
being offered for sale to employees of the company and
its subsidiaries. Price—Fixed at $3 below the
average
market price either for the month in which
payments
are completed or for the next
succeeding month, which¬
ever is
lower, but in no event more than $35 nor less
than $25 per share. The initial
offering will close on
July 3, 1951. Proceeds—To make additional investments

Kansas Power &

June

bank loans and

■. ■

Amendment—On May 8 SEC granted an ex¬

KAABA

May 11

Squibb (E. R.) & Sons.—

New York

Proceeds—To repay
for general corporate purposes.

•

1951

(EDT)

•

returned unopened.

was

Byron Jackson Co

Noon

common stock (par $5) to
be offered to stockholders at rate of one share for each

.Underwriter—None.

12,

common

14.

doned.
Debentures

Victoreen Instrument Co._

May 16 filed 504,657 shares of
15 shares owned.

•

emption from competitive bidding. Preferred mav be
privately
placed,
but
reported,
temporarily
aban¬

1951

Light Co.__
Public Service Co. of New Hampshire

cumulative

Utilities Corp.,

11,

for resale. Office—Care of
Broadway, New York, N; Y.

(par $100). Proceeds—From sale of preferred, together
with proceeds to be received from the sale of 350,000

March

1951

Co.

June

May 1

Public

Bonds

England Telephone & Telegraph Co.—Common

—

General

14.

27, which
8,

320

Metrick,

Corp., the parent, will be used for new constructiori.
Bids—Only one bid, from Union Securities Corp. and
Salomon Bros. & Hutzler (jointly), was received March

Common

June

notification) 264.2 shares of capital
stock.
Price
At par ($25 per share). Underwriter—
None. Proceeds—For working capital. Office—26 Tenth
St., Wheeling, W. Va.

•

additional

Inc.

(EDT)

Distributors, Inc.,

General Glaze Corp.,

1951

Pennsylvania-Reading Seashore Lines
Noon (EDT)
;

Wheeling, W. Va.
May 14

Buffalo Electro Chemical Co.,

General Electronics

per

Jersey Central Power & Light Co.
Feb. 21 filed 40,000 shares of cumulative preferred stock

Common

Yale & Towne Manufacturing Co.

1:30 p.m.

($10

par

Bonds

—

Frontier Refining Co.,

Cheyenne, Wyo.
April 30 filed $1,000,000 5V2% convertible debentures
due May 1, 1961. Price — At par (in denominations of
$1,000 each). Underwriters—Peters, Writer & Christensen, Inc.; Sidlo, Simons, Roberts & Co.; Boettcher
6 Co.; and Bosworth, Sullivan &
Co., Inc.; all of Denver,
Colo.
Proceeds — To drill eight wells in San Juan
County, N, M., and for working capital. - Statement ef¬
fective May 18.
^

15,000 shares of common
share). Underwriter—
Proceeds—For corporate purposes and the pur¬
Price—At

Proceeds—For

June

Under¬

-•

Feb. 21 filed

Preferred

England Gas & Electric Association__Common

New

Wilton

Jersey Central Power & Light Co.
$1,500,000 first mortgage bonds due in 198i.
expansion program. Bids—Only onq bid
was
received by company on March 27, from Halsey,
Stuart & Co. Inc., which was returned unopened. Offer¬
ing—Postponed indefinitely.
Statement effective

Equip. Trust Ctfs.
Co.

Steel Corp.

(letter of notification)

Efrein

1951

(CST)

Power

chase of merchandise (steel)

Chicago, Milwaukee, St. Paul & Pacific RR.

—For investment.

•

stock.
None.

Common

June

•
Franklin Custodian Funds, Inc., N. Y.
May 16 filed 150,000 of Bond Series shares; 150,000 shares
of Preferred Stock Series;
100,000 of Utilities Series
shares; 100,000 of Income Series shares and 200,000 shares

Price—At the market.

1951

Kentucky Utilities Co

—

of Common Stock series.

Israel
Ian.

June

Mutual

capital and surplus.

crease

Arizona Edison Co

Pueblo, Colo.

Austin, Tex.
March 30 filed $1,200,000 special stock debentures to be
sold in units of $500 each by regular licensed insurance
agents of the company. Price—At par. Proceeds—To in¬

1951

May 29,

Durant Bldg.,

International Life Insurance Co.,

Common

Tracerlab, Inc

and 64,407 for selling stockholders. Price—To be supplied
by amendment. Underwriter—Fulton, Reid & Co., Cleve¬
land, O. Proceeds—For working capital.
:

Farmers

Common

Erie Resistor Corp., Erie, Pa.
May 21 filed 84,000 shares of common stock (par $5), of

Office—303

mines.

1951

May 28,

Gyrodyne Co. of America

St., Los Angeles, Calif.

Incas

Mines, Inc., Pueblo, Colo.
May 17 (letter of notification) $25,000 par value of com¬
mon stock to be issued for $10,000 cash.
Underwriter-—
None.
Proceeds—To
complete development work of

Fowler

East
•

Proceeds—To
Office—32J3
• "

Proceeds—To Joe Weinstein, President of
Company, the selling stockholder, -fa

McCormick & Co., Inc., Baltimore, Md.
*
May|3 (letter of notification) 7,795 shares of non-voting
comijion stock (no par) being offered to employees and

stockholders

to and including June 6 subject to allot¬

ment.1 Price—$25 per share.
&

Sons, Baltimore, Md.

Underwriter—Alex, Brown

Proceeds—For working capital.

Offi^fJrr-414 Light Street, Baltimore 2, Md.

Volume 173

•

Number 5014

McGraw

(F. H.)

The Commercial and Financial Chronicle

& Co.,

Hartford, Conn.

ITEMS REVISED EACH WEEK

May 17

(letter of notification) 4,650 shares of common
(par $2).
Price—$9 per share.
Underwriter—

stock

Granbery, Marache
working capital.

Co., New

The

;

struction

and for general

program

corporate

to 11

purposes.

(CST)

a.m.

June 18.
•

Co., Paris, Tenn.
>
May 18 (letter of notification) 290,000 shares of common
stock.
Price—At par ($1 per share).
Underwriter—
None.
Proceeds—For working capital.
;

National Research Corp., Cambridge, Mass.
April 16 (letter of notification) 2,000 shares of common
stock
(par $1). Price—$27 per share.
Underwriter—
Paine, Webber, Jackson & Curtis, Boston, Mass. Proceeds
—To William A. Coolidge, the selling stockholder.
New

England Gas & Electric Association (6/4)
May 16 filed 197,243 common shares of (par $8) bene¬
offered to

common

stockholders

record May 31 on basis of one share for each eight shares
then held; rights will expire on June 20. Price—Maxiof

lnum

$15 per share.

Corp. to act

Underwriter—The First Boston

dealer-manager. Proceeds—To pay shortterm notes and acquire stock of subsidiaries.
+
as

for

additional

New England Telephone & Telegraph Co. (6/8)
May 23 filed 777,850 shares of capital stock to be offered

of record

June

ratio

one

for each two shares held. Price—At par ($100 per share).
Underwriter—None.
Proceeds — To reduce outstanding

temporary borrowings.

i North American Acceptance Corp.
March 20 (letter of notification) 15,000 shares of 60-cent
:

cumulative convertible preferred

stock (par $5). Price
Underwriter—Michael Investment Co.,
Providence, R. I. Proceeds—For working capital.

—$10 per share.

Inc.,
Offering—Postponed temporarily.

North Penn Gas Co. (6/11) *
May 1 filed $2,700,000 of debentures due

•;!lv

Under¬

loans.

\
Illinois

Corp., DeKalb, III.
May 7 (letter of notification) 3,080 shares of $1.50 cumu¬
lative preferred stock (no par) being offered to certain
stockholders

of record

April 20, 1951, subject to allot¬
ment.
The subscription privilege will expire on June
14. 1951.
Price—$23.50 per share. Underwriter—None.
Proceeds—For
loans.

working
*

capital

•

Pharmacal

used

make

Co.

May 2

(letter of notification) 2,100 shares of common
stock (par $2.50). Price—At market (approximately $19
per share).. Underwriter—Reynolds & Co., New York.
Proceeds—To Warren E. Eaton, the selling stockholder.
Ohio Edison Co.

Marcn

meet

150,000 shares of pfd. stock

Pepsi-Cola

stock

(jointly); The First Boston Corp. Proceeds — For con¬
struction program. Bids—Temporarily postponed. Were
to have been submitted up to 11:30 a.m. (EDT) on
May

Olympic Radio & Television, Inc.
April 16 (letter of notification) 8,800 shares of com¬
mon stock (par $1).
Price—At the market. Underwriter
—None, but Van Alstyne, Noel & Co., New York, will

■*;.

broker.

Proceeds—To two

selling stockholders.

Pacific Paper Materials Co.,

Portland, Ore.

April 25 (letter of notification) 200,000 shares of common
stock. Price—At par ($1 per share). Underwriter—None.
Proceeds—To

retire

act

past

and

Pacific Western Oil

current

due

accounts.

Proceeds—To

Pan

J. Paul Getty, President of the
company,
selling stockholder.
-

American

Par

Milling Co., Las Vegas, Nev.
200,000 shares of common stock. Price—At
share). Underwriter—None. Proceeds—To

($1 per
purchase machinery and equipment, to construct

In Mexico and for

general corporate purposes.

mill

C.,

common

Under¬

Proceeds—To

4445 Bellevue Ave., Detroit 7, Mich.

;

Public Finance

Service, Inc., Phila., Pa. (6/24)
April 30 (letter of notification) $250,000 of 6% cumula¬
tive debentures, 1950
series to be offered to present
^

debenture holders.

Price—At par

each). Underwriter—None.
Proceeds—For addi¬
operating capital. Office—18 West Chelten Ave.,'
Philadelphia 44, Pa.
tional

Public Service Co.

May 11

of New

Hampshire

(6/12)

filed $3,000,000

first mortgage bonds, series F,
1, 1981. Underwriter — To be determined by
competitive bidding. Probable bidders: Halsey, Stuart &
due June

Co. Inc.; Otis & Co.; The First Boston Corp. and Coffin
& Burr, Inc.
& Co., Inc.

(jointly); Kidder, Peabody & Co. and Blyth
(jointly); Eqiutable Securities Corp.; Carl
Loeb, Rhoades & Co. Proceeds
For construction
—

program.

Bids —Present

papers

(EDT)

about

June 12.

plans

June

and

are

mail

bidding

bids

open

noon

Radioactive Products, Inc., Detroit, Mich.;
April 30 (letter of notification) 10,800 shares of common

Price—At the market (about $1.871/2 per
Underwriter—A. H. Vogel & Co., Detroit, Mich.
Proceeds—To
three selling stockholders.
Office—443
West Congress Street, Detroit 26, Mich.

share).

•

Sangamo Electric Co., Springfield, III.
May 21 filed 111,000 shares of common stock (par $10).
Price
To be supplied by amendment. Underwriter—
Paul H. Davis & Co., Chicago, 111. Proceeds—For work¬
ing capital.

Sattler's, Inc., Buffalo, N. Y.

Hornblower &

Weeks, New York. Proceeds—To Charles
Jr., President, who is the selling stockholder.
Offering—Indefinitely postponed.
Hahn,

Saul

F.)

(B.

Co., Washington, D. C.
notification) $22,500 of promissory
by first deed of trust on certain property.

(letter

Underwriter—B.
ceeds—To
to

Saul

reimburse

Co.,

latter

Washington, D.

firm

for

moneys

Pro¬
advanced

Contractors, Inc., 1028 Connecticut Avenue,
*

Seaboard
March 1
common

Container

—To

Corp.

(letter of notification) 12,000 shares of class A
stock (par $1).
Price—$5.50 per share. Under¬

writer—Barrett
Frederic

Herrick
R.

Mann,

Co., New York. Proceeds—
President, who is the selling

stockholder.
•
SeaPak Corp., St. Simons Island, Ga.
May 14 (letter of notification) 25,000 shares of common
stock (par $1).
Price — $6 per share. Underwriter—

French

Crawford, Inc., Atlanta, Ga.
working capital.
Smart &

Final

Co.,

ceeds

Securities Co., San

Coast

For

—

To selling stockholders.

Francisco, Calif.
Office

Blvd., Los Angeles 53, Calif.

stock.

State

filed
Price

—

Uranium

Mines

amendment

par

($1

—

Pro¬
4510 Colorado

Ltd.

(Canada)
shares of capital
share).
Underwriter-

384,000

per

Optionee—Robert Irwin Martin of Toronto.

Proceeds—

For commissions, exploration and development expenses,
and working capital.
•

Southeastern

Public Service

preference stock, series A (par $25). Price—To be sup¬
plied by amendment. Underwriter—Bioren & Co., Phila¬
delphia, Pa. Proceeds — For additional investment in
Investment

Co.

30 filed 15,000 shares of $1 cumulative sinking
fund preferred stock (no par) to be offered first to stock¬
holders from May 21 to June 5.
Price—$20 per share.

ceeds—For

working capital.

stock

(par $2) to

or
on

before

preferred stock at $13.50

31,

before Nov.

share thereafter and

May

$15

1953;

per

30, 1954; and $16.50 per

before

May 31, 1956. Proceeds

—For general corporate purposes./
•
Squibb (E. R.) & Sons, New York (6/15)
May 22 filed 300,000 shares of common stock (par $1), to
be split up on a two-for-one basis following approval of
stockholders on June 22 of a proposal to change each $1
par share into two 50-cent par shares. Price—To be sup¬
plied by amendment. Underwriter—Harriman Ripley &
Co., Inc., New York. Proceeds—For plant additions and
improvements.

Standard-Thomson
March

(letter

Corp.

of notification)

approximately 13,750
Price—At the market
(approximately $7 per share). Underwriters—Lee Higginson Corp., Carreau & Co. and Reich & Co., New York.
Proceeds—To four selling stockholders. No general pub¬
lic offering planned.
common

stock

(par $1).

Steak'n Shake, Inc., Bloomington, III.
April 4 (letter of notification) 18,180 shares of

common

stock (par 50 cents). Price—$5.50 per share. Underwriter
Proceeds—To three selling stockholders. Office

—None.

—1700 West Washington

St., Bloomington, 111.

Sterling Engine Co., Buffalo, N. Y.
April 27 (letter of notification) an aggregate of not to
exceed 16,000 shares of common stock (par 10 cents).
Price—At market (about $2.25 per share). Underwriter
—None, but Bache & Co. will act as broker. Proceeds—
To Addison F. Vare, the selling stockholder.
Stevens (J. P.) & Co., Inc.
>
April 27 filed 100,000 shares of capital stock (par $15)
Employees"
to certain employees of company. Price—At average of
high and low quotations on day preceding offering. Pro¬
ceeds—For general corporate purposes.
\
to be offered under "Stock Purchase Plan for

Sun Oil Co.,
May 3 filed 11,000
tive July 1, 1951,
becoming eligible

Philadelphia, Pa.
"memberships in the 1951 plan," effec¬
to be offered to employees upon their
for membership; a maximum of 111,000
shares of common stock (no par) which it is anticipated
may be purchased by the trustees of the plan during, the
period July 1, 1951, to June 30, 1952; and 193,262 shares

common

Lincoln, Neb.

Pro¬

stock which "it is anticipated may be

offered

for possible

public sale by certain selling stockholders
during the same period." Underwriter—None.

Telegift,
March

Inc.,

New York

(letter of notification)

60,000 shares of com¬
share. Underwriter
operate a "Giftsby-Wire" service to be known as the Telegift Service,
and for operating capital.
Office—40 East 49th Street,
New York 17, N. Y.
mon

stock

•

(par $1).

Price—$2

Proceeds—To

Texas

per

establish

and

Electric Service Co.

(6/18)

May 17 filed $11,500,000 of first mortgage bonds due June
1, 1981. Underwriter—To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Union Securities

Corp., Glore, Forgan & Co. and White,
Weld & Co. (jointly); Carl M. Loeb, Rhoades & Co.; Kid¬
der, Peabody & Co.; Salomon Bros. & Hutzler; The First
Boston Corp.; Kuhn, Loeb & Co., Lehman Brothers and
Blyth & Co., Inc. (jointly); Harriman Ripley & Co., Inc.,
and Stone & Webster Securities Corp. (jointly); Hemp¬
hill

Noyes, Graham, Parsons & Co. and Drexel & Co.
(jointly). Proceeds—For new construction. Bids—Ex¬
pected to be received up to 11:30 a.m. on June 18.

Thomson-Diggs Co., Sacramento, Calif.
May 9 (letter of notification) 6,000 shares of capital stock
(no par). Price—$50 per share. Underwriter — None.
Proceeds—For corporate purposes. Office—1801 Second
„

St., Sacramento 4, Calif.
Time Finance Corp., Brockton, Mass.
May 2 (letter of notification) 1,000 shares of 6% cumu¬
lative preferred stock. Price—At par ($100 per share).
Underwriter—Nione.

conducting

Proceeds—To

provide

funds^ for
Office—«

business of installment financing.

47 West Elm Street, Brockton,

Mass.

Tracerlab, Inc., Covington, Ky. (5/28)
May 10 filed 175,000 shares of common stock (par $1).
Price—To be supplied by amendment.
Underwriter—
Lee Higginson Corp., Boston,

Mass.

Proceeds—To retire

outstanding bank loans incurred in connection with ac¬

quisition of a controlling interest in Kelley-Koett Man¬
ufacturing Co., manufacturers and distributors of X-ray
apparatus and equipment; and for working capital.
Trans

Co.

May 22 filed 20,000 shares of 6% cumulative convertible

Underwriter—The First Trust Co. of

—

Ltd., Los Angeles, Calif.

ceeds—For construction program.
.

Proceeds

March 22 (letter of notification) 12,561 shares of common
stock (no par).
Price—$7.25 per share. UnderwriterPacific

thereafter and

—None,

March 22 filed 200,000 shares of common stock (par $1).
Price—To be supplied by amendment.
Underwriter—

May

stock for each share of

per

—

notes secured

III.
common

(in denominations of

$100

April

Offering—Indefinitely

common

shares of

Plywood, Inc., Detroit, Mich.
May 3 (letter of notification) 5,000 shares of common
stock (par $1).
Price—$4.25 per share. Underwriter—
Baker, Simonds & Co., Detroit, Mich.
Proceeds—To
Emery Investment Co., the selling stockholder. Office—

160,000 shares of 5%% prior preferred
stock (par $25). Price—To be supplied by amendment.
Underwriter—A. C. Allyn & Co., Inc., Chicago, ,111. Pro¬
.

Schwartzman, the selling stockholder.

Southwestern

26 filed

postponed.

stock of subsidiaries.

Peabody Coal Co.
March

Washington,

broker for over-the-counter sales.

April

200,000 shares of capital stock (par $4).
Price—At the market (based on quotations on New York
Stock Exchange at time of sale).
Underwriter—None.

Jan. 24 filed

5,000 shares of
Price—50 cents per share.

(par 10 cents).

South

Corp.

filed

who is the

Bottling Co.

(letter of notification)

Bernard B.

Office—1400 N. W. 15th Ave., Portland, Ore.

May

$7,700,000)

working capital.

be offered to holders of cumulative preferred stock upon
exercise of stock warrants on basis of one share of

writer—None, but Ferris & Co., Washington, D. C., will

(par $100)/

Underwriters—To be determined by competitive bidding.

N. W., Washington, D. C.

Probable bidders: Morgan Stanley & Co.; Lehman Bro¬
thers and Bear, Stearns & Co. (jointly); W. C. Langley
& Co.; Glore, Forgan & Co. and White, Weld & Co.

act

(estimated

Proceeds—For

Spiegel, Inc., Chicago,
May 2 filed 85,850 shares of

Inc.

•

Norwich

Texas.

stock (par $1).

1971.

writer—To be determined by competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co.
Inc.; A. C. Allyn &
Co., Inc.; Drexel & Co.; The First Boston Corp.; Lehman
Brothers; Smith, Barney & Co.; Equitable Securities
Corp.; Union Securities Corp. Proceeds—To repay bank
Northern

investment

stock (no par) to
May 21 to June 5.

per share.
Underwriters—Schneider, Bernet
Hickman, Dallas, Texas; G. H. Walker & Co., St. Louis,
Mo.; and Dewar, Robertson & Pancoast, San Antonio,

listing.

new

Co.

common

equity securities of Texas Illinois Natural Gas Pipeline
Co., a subsidiary.

to stockholders

entirely

Price—$20

Where

•
Peoples Gas Light & Coke Co., Chicago, III.
May 22 filed $25,000,000 of first and refunding mortgage
bonds, series H, due June 1, 1981. Underwriter—To be
determined by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Glore, Forgan & Co. and
White, Weld & Co. (jointly); The First Boston Corp.
Proceeds—To repay bank loans, for new construction and

May 11

Pharmacal

ficial interest to be

indicates that it is

Mitchum

information made
sources.

Investment

be offered first to stockholders from

'-'V;''*

•
Missouri Power & Light Co. (6/18)
May 17 filed $4,000,000 of first mortgage bonds due 1981.
Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Kidder,
Peabody & Co. Inc.; Equitable Securities Corp. and Har¬
ris, Hall & Co. (Inc.) (jointly); Otis & Co., Inc.; Salomon
Bros. & Hutzler; The First Boston Corp.; Carl M. Loeb,
Rhoades & Co. and American Securities Corp. (jointly);
White, Weld & Co. and Shields & Co. (jointly). Proceeds
—To reimburse treasury for expenditures made for'con¬

Bids—Expected to be received

Southwestern

April 30 filed 22,288 shares of

compilation is brought up-to-date

available by the SEC or other reliable

Mercantile Acceptance Corp. of California
May 18 (letter of notification) 4,881 shares of first pre¬
ferred stock.
Price—At par ($20 per share).
Under¬
writer—Guardian Securities Corp.
Proceeds—For gen¬
purposes.

this

changes have been made during the past week, this
is indicated by the symbol (jc)
appearing at the end
of the respective listings. As heretofore, the symbol
(•) preceding the name of the prospective borrower

•

eral corporate

data in

each week in accordance with later

Proceeds—For

York.

(2175)

Caribbean Air Cargo

Lines, Inc.

May 8 (letter of notification) 20,000 shares of capital
(par 10 cents).
Price—At market, approximately
$2.37^2 per share.
Underwriter—Gearhart, Kinnard &

stock

Otis, Inc., New' York.

Proceeds—O. Roy Chalk, Presi¬

dent, the selling stockholders.
•
United States Steel Corp., Hoboken, N. 1.
May 21 filed 1,300,000 shares of common stock (no par)
"to be offered from time to time to certain key em¬

ployees" under an incentive plan. Proceeds—For
corporate purposes.

Continued

general

page

The Commercial and Financial Chronicle

(2176)

Continued
•

from

page

data

The

Portland, Inc.

is brought up-to-date
made

this compilation

May 11 (letter of notification) 794 shares of capital stock

each week in accordance with later information

share. Underwriter — None.
Proceeds—To purchase merchandise for resale to retail
druggists. Office—322 N. W. 14th Ave., Portland 9, Ore.

available by the SEC or

Price—$50

(no par).

Utica

Cutlery Co.
of notification)

being offered

Office—820 Noyes
•

Van Lake Uranium

Mining Co., Van Dyke, Mich.

100,000 shares of common
stock. Price—At par ($1 per share). Underwriter—Titus
Miller & Co., Detroit, Mich.
Proceeds—For exploration
ancl drilling of mining claims. Office — 23660 Van Dyke
Ave., Van Dyke, Mich.
May 15 (letter of notification)

Veterans

Broadcasting Co.,

Ave., South, Rochester 4, N. Y.
•
Victoreen Instrument Co., Cleveland, O. (6/12)
May 22 filed 374,000 shares of common stock (par $1),
of which 221,000 are to be issued by the company and
153,000 for account of John A. Victoreen, Chairman of
the Board.
Price—To be supplied by amendment.
Un¬
derwriters—Barrett Herrick & Co., Inc., New York, and

Vogel &

Co.,

Detroit,' Mich.

Proceeds—For new

equipment and working capital..
Power Co.

Virginia Electric &

(5/25)

basis of

one

share for each ten shares held; rights

June 11. Price—To be supplied by amend¬

to expire on
ment

(proposed maximum offering price is $25 per
unit). Underwriter—Stone & Webster Securities Corp-,
New York. Proceeds—For new construction.
Warren

(Ohio)

Telephone Co.

March 23 (letter of

notification) 3,000 shares of $5 divi¬
dend preferred stock (no par) to be offered for subscrip¬
tion by present stockholders in ratio of 0.27695 of a
share for each share held. Price—$100 per share. Under¬
writer—None.
Proceeds—To reimburse the company's
construction costs.

Waverly Oil Works Co.
April 26 (letter of notification) 20,000 shares of capital
stock (par $1) offered to stockholders of record May 1,
1951 on a one-for-four basis; rights to expire on June
15.

Price—$10

—-For

general

per

share.

corporate

Underwriter—None.
purposes.

Ave., Pittsburgh 13, Pa.

Proceeds

Office—4403

Centre

York.

Proceeds—To Charles Dorrance, President, who is

the selling

Gold

Western

Mines, Inc., Carson City, Nev.
notification) 30,000 shares of capital
(par 10 cents). Price — At the "market" but not

May

(letter

stock

Powder Co.

Atlas

exceeding $3.50 per share. Underwriter—J. Arthur War¬
ner & Co., Inc., New
York, N. Y. Proceeds—For explo¬
ration and development of Utah properties.

somewhat

the

that

$4,500,000 and that some financing may be necessary.
underwriter—Morgan Stanley & Co.

Probable
•

Aircraft Corp.

Bell

May 16 it was announced stockholders will vote May 28
on
approving a proposal to borrow $2,500,000 on bonds
to mature serially. The proceeds will be used to finance
of

Fort

$3,000,000 helicopter plant near

Worth, Texas.
Edison

Boston

•

May

pany

plans

gage

bonds.

Electro-Chemical

Buffalo

(6/6)

Inc.

Co.,

1:30 p.m. (EDT) on
the purchase of 5,058 shares of common stock

and

including

said

announcement

many

bid.

bidders:

Probable

Allen

Co.; Smith, Barney & Co.; Merrill Lynch, Pierce, Fenner & Beane; A. G. Becker & Co- Inc.
Calvan Consolidated Oil & Gas Co., Ltd.
April 3 it was stated registration is expected week of
May 28 of 1,000,000 shares of capital stock. Price—About
$5 per share. Underwriters—Hemphill, Noyes, Graham,
Parsons & Co., New York, and Gardiner, Watson & Co.,
Toronto, Canada.
Carolina

in North and South Carolina. Esti¬

cost of the proposed facilities is $3,595,295, to

Power Co.

estimated

$10,000,000.

cash

require¬

No definite plans for permanent

plans to obtain
term bank borrowings.

company

Cooper-Bessemer Corp.,
May

financing

quately

Denver

necessary

funds through short-

16 filed

each

102,197 shares of capital stock

offered

five

expected

stockholders

shares held

rate

about

one

(par $25)
share

for

June

5; with rights
June 20. Price—To be supplied by
Underwriter—Morgan Stanley & Co.,.New

to expire

amendment.

York.

Proceeds —To

equipment.

repay

bank

loans

and

for

new

construction
to

increase

•

Alabama Power Co.

(9/11)

6, it was stated that

company contemplates issuance

sale

first

mortgage bonds. Under¬
writers—To be determined by competitive bidding. Prob¬

able bidders:

Halsey, Stuart & Co. Inc.; Morgan Stanley
& Co.; Blyth & Co., Inc.; Harriman Ripley & Co.,
Inc.;

Shields &

Co.

and

Salomon

Bros.

Hutzler

(jointly);
Drexel & Co.; Union Securities Corp. and Equitable Se¬
curities Corp.
(jointly); Kidder, Peabody & Co.; The
First Boston Corp.; Lehman Brothers. Proceeds—For ex¬
pansion

opened

program.
on

Alaska

Sept. 11.

Bids—Tentatively

expected to
Registration—About Aug. 10.

authorized

Telephone Co.

it was announced company may soon file a
letter of notification with the SEC
covering $300,000 of
6% convertible bonds. Price—At par (in units of $100
each). Underwriter—Tellier & Co.; New York. Proceeds
—For new equipment and for expansion.
Gas Co.

April 2$. ;William G. Woolfolk, Chairman, announced an
common stockholders
under rights on the

offering of
basis

one

during the

year.

for

ten

would

probably be made
No underwriting likely to be involved.
new construction costs.

Proceeds to be used for

from

St.

Paul

their

May

8,000,000 to

Pacific

will

RR.

received

Station
on

the

company

Bldg., Chicago 6, 111.,

and

1951

mature

ments of $265,000 each.
art
&

Co.

Room

before

semi-annual

Probable bidders:

Inc.; Salomon Bros.

& Hutzler;

noon

instal¬

(Inc.).

Chicago & Western Indiana RR.
16 reported company will probably issue
future

bonds

some

1, 1952.

refund

the

$49,988,000

Refunding of the $14,662,000 first and refunding
42/4% bonds, series D, due Sept. 1, 1962, is

mortgage

possibility.

Probable bidders:

Halsey,

Corp.; Harris, Hall & Co. (Inc.); Drexel & Co.; Kuhn,
Loeb & Co. and Salomon Bros. & Hutzler (jointly); Har¬
riman, Ripley & Co., Inc.; First Boston Corp.; Lehman
Brothers; Paine, Webber, Jackson & Curtis; Kidder,
Peabody & Co.
,

April 7 it

was

this- year

$30,000,000

determined

Halsey,

competitive

Stuart

Co.

Inc.;

(

Gas

Electric

Co.

reported company expects to market late

early
new

in 1952 between $25,000,000 and
bonds. ■ Probable bidders:
Halsey,

Stuart & Co. Inc.; Morgan Stanley & Co.;

Kuhn, Loeb &
(jointly); Blyth & Co.,
Inc., and The First Boston Corp. (jointly); Union Se¬

Co. and Salomon Bros. & Hutzler

bidding.
Morgan

both due

Jan.

3%-4% bonds, series A, and $8,666,900 of
Lake income mortgage 3%-4% bonds,

1, 1993.

was

•:

Co.

;,,

announced

$35,000,000

company

of first

plans to sell ap¬

mortgage

bonds early

Underwriters—To be determined by competi¬

Stuart & Co.
Trask & Co.
(jointly); Morgan Stanley & Co.; The First Boston Corp.;
Dillon, Read & Co. Inc. Proceeds — For construction
bidding.

Inc.;. Coffin

Probable bidders: Halsey,
& Burr, Inc., and Spencer

program.

;;

Chemical

Dow

Co.

April 5, Leland I. Doan, President, stated that the com¬
pany plans to spend $65,000,000 on plant expansion in
the current fiscal year ending May 31, 1951, and expects
to

somewhat more in the

spend

following fiscal year.

added, however, that no decision has been reached

possible financing in this connection. Traditional
Smith, Barney & Co., New York.
Y

any

Florida Power Corp.
March 29 the authorized common stock

from

increased

1,600,000

and the authorized
000

(par $7.50) was
2,500,000

preferred stock (par $100) from 120,-

250,000 shares.

to be determined

Underwriters for preferred stock
Probable bid¬

by competitive bidding.

may include Kidder, Peabody & Co.. and Merrill
Lynch, Pierce, Fenner & Beane (jointly); Salomon Bros.

ders

& Hutzler;

non-callable consolidated first mortgage bonds due July

also said to

;

RR.

Salt

Denver

744,

Halsey, Stu¬
Harris, Hall

April
near

Western

underwriter:

(CST)

bidders:

first mortgage

Milwaukee,

Cincinnati
Natural

voted

stock

common

part

Stuart & Co. Inc.; Morgan Stanley & Co.; Lee Higginson

April 25

American

Proceeds—To

finance

Stockholders

program.

Union

June

Feb.

$10,000,000

(jointly).

June 4 for the purchase from it of $5,300,000
equipment trust certificates, series NN, to be dated

and

Co.

(6/4)
Bids

Prospective Offerings

subsidiaries

Chicago,

for ade¬
volume of

& Co.; Kuhn,I Loeb & Co. and Bear, Stearns
(jointly).
Proceeds — Together with treasury

Co.

March

10,000,000 shares.

•'YYY'' V-Y.

Wertheim
assist

increased

funds, to redeem on June 1, 1951, $35,062,200 oustanding

Loeb, Rhoades & Co.; Ladenburg, Thalmann &

and

used

company's

Grande

Detroit Edison

Harriman Ripley & Co., Inc. (jointly); Lehman Brothers
Lazard Freres & Co. (jointly); Kuhn, Loeb & Co.;

Co.

Rio

derwriters—To

and

Vernon, Ohio

arrangements

an undetermined date the taking of bids for
purchase of $40,000,000 first mortgage bonds to be
dated May 1, 1951, and to mature on May 1, 1981. Un¬

stockholders.

May

the

Mt.

that

poned to

West Corp.

South

was announced company plans to issue and
approximately 400,000 shares of common stock (par
late in 1951 or early in 1952.
Underwriters—May
be determined by competitive bidding.
Probable bid¬
ders:
Blyth & Co., Inc.; Smith, Barney & Co. and

Carl M.

Inc.

the

tive

(6/5)

York,

12, Wilson McCarthy, President, stated that due
prevailing market conditions, the company has post¬

this Fall.

Mfg. Co., New York

announced

was

proximately

Yale & Towne

New

Offering—Postponed.

bonds due 1967.

gage

$5)

•:

Co.

by competitive bidding. Probable bidders: Halsey, Stu¬
Co. Inc.; Morgan Stanley & Cd.; The First Boston
Corp.; Merrill Lynch, Pierce, Fenner & Beane and White,
Weld
&
Co. (jointly).
Proceeds — To redeem
a -like
amount of Westchester Lighting Co. 3V2% general mort¬

Stanley
outside

that

for construction and other purposes will

financing have yet been formulated, and in the interim

Central

Edison

company

Probable

about

Hal-,

Gas

be
by the sale of first mortgage bonds and the
issuance of junior securities. Underwriters may include
R. S. Dickson & Co., Charlotte, N. C.

debentures:

art &

company

applied to New York P. S. Commis¬
sion for authority to issue and sell $25,000,000 of first
and refunding mortgage bonds, series H, due May
1,
1981 (in addition to $40,000,000 series G bonds filed with
the SEC on March 30). Underwriters—To be determined

April

April 3

of about $250,000,000

through 1954.
Neither the timing nor
new financing have yet been
deter¬

of this

Consolidated

certain

Maine

Edison Co.

Probable bidders for bonds

March 23

Central

were

business have been approved by the directors.

Natural

areas

bonds

Stuart & Co. Inc.; The First Boston Corp.; Glore,
Forgan & Co.; Morgan Stanley & Co.
^

SEC for
serve

sey,

fourth amended

issue

that additional capital

means

Corp., Charlotte, N. C.
application was filed with the
authority to build a natural gas pipeline system

Feb. 20

Underwriters—Last

progrqm.

nature

com¬

of the stockholders and
employees of the company, has formerly agreed to sub¬
mit a bid for the stock is an amount aggregating $3,034,800. Accordingly the auction will be opened by the
Brothers

that com¬
early offering of $10,000,000 first mort¬

will be required
mined.

(President of the

Co.

President, announced

May 22 Charles Y. Freeman, Chairman, announced that
the company's scheduled construction program for the
1951-54 period calls for the expenditure of about $450,-;
000,000, of which it is estimated that $200,000,000 will
be provided out of cash resources at the end of 1950.

June 6 for

Charles A. Buerk

Poston,

Commonwealth

the

by material shortages arising from
program, it is presently expected

July 1, 1948 through Dillon, Read &
Co. Inc., New York.
If competitive, probable bidders
may include Halsey, Stuart &
Co. Proceeds—For ex¬

Broadway, New York 5, N. Y., at

pany), Schoellkopf; Huttort & Pqnierby, Inc. and Lehman

April 10 it

•••

Defense

placed privately

This

120

Bids will be received at the office of Alien Property,

resented

sell

:\.Y,'

•

Columbus & Southern Ohio Electric

Wilton Woolen Co., Wilton, Me. (6/4-9)
May 14 filed 195,800 shares of common stock (par $1).
Price—To
be supplied by amendment. - Underwriter—
A. C. Allyn & Co., Inc., Chicago, 111., and George A. Mc¬
Dowell & Co., Detroit, Mich.- Proceeds—To 11 selling

★

do some

public financing will be required during 1951,"

30,

curtailed

National

pansion

Co.

V. Toner, President, announced that com
pany plans to issue $32,000,000 of securities to aid it
financing its construction program, which, it estimated,
will cost $65,300,000 through 1954.
He added that no
common stock financing is planned until 1955.

Jan.

ments for 1951

stockholder.

company may

Inc.
May 15, the company stated: "Since it now appears that
the
System's construction program for 1951 will be

financed

Virginia Coal & Coke Corp.
April 16 (letter of notification) 3,700 shares of common
stock (par $5).
Price—At the market (not less than $18
per share).
Underwriter—Tucker, Anthony & Co., New

Co.

reported that the

was

privately.

April 27, it was reported that capital expenditures for
the coming 12 months have been tentatively budgeted

mated

West

program.

Power

debt financing to raise additional necessary funds for its
1951
construction program.
Will probably be placed

(no par value), being 45.98% of the outstanding stock.
The sale does not represent new financing. A group rep¬

May 2 filed 449.674 shares of common stock (par $10)
to be offered to common stockholders of record May

construction

Central

Columbia Gas System,

construction

Inc.

April 19 (letter of notification) 26,575 shares of capital
stock. Price—$5 per share. Underwriter—None. Proceeds
—To construct a television station. Office—17 Clinton

for

used

April 13 it

St., Utica, N. Y.

Colorado

of the respective listings. As heretofore, the symbol
(•) preceding the name of the prospective borrower
indicates that it is an entirely new listing.

(letter

will

other reliable sources. Where
changes have been made during the past week, this
is indicated by the symbol (★) appearing at the end

per

1,000 shares of capital
stockholders of record May 1,
1951, on a l-for-4 basis; rights to expire June 5. Price—
At par ($100 per share).
Underwriter—None. Proceeds
—To expand plant facilities and for working capital.
May

stock

White, Weld &
(jointly); Lehman Brothers; Harriman Ripley & Co.,
Inc.; Merrill Lynch, Pierce, Fenner & Beane.
Proceeds
Co.

Wholesale Druggists of

United

Thursday, May 24, 1951

curities Corp.; Glore, Forgan & Co. and

ITEMS REVISED EACH WEEK

Harriman Ripley & Co., Inc.; Equitable Secur¬
Union Securities Corp.
Probable, under¬
common stock. Kidder, Peabody & Co. and
Merrill Lynch, Pierce, Fenner & Beane.
ities

Corp.;

writers for

Florida Power Corp.
March 29 it
000

was

stated company expected, to

sell $8,000,-

of new bonds this summer. Under¬
writers—To be determined by competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; Kidder, Peabody
&
Co., and Merrill Lynch, Pierce, Fenner & Beane
$10,000-,000

(jointly); Smith, Barney & Co.; The First Boston Corp.;
C. Langley & Co. and Glore, Forgan & Co. (jointly).
expansion program. Offering—Expected
in June or July.
W.

Proceeds—For

Gas

May 15
and sell

writers

Service

Co., Kansas City, Mo.

requested SEC authorization to issue
$5,400,000 first mortgage bonds due 1971. Under¬
company

determined by competitive bidding.
Halsey, Stuart & Co. Inc.; Blyth &
Co., Inc., and Kidder, Peabody & Co. (jointly); Lehman
—

Probable

bidders:

[Volume 173

Number 5014

The Commercial and Financial Chronicle

Brothers; The First Boston Corp.; Merrill, Lynch, Pierce,
Fenner & Beane and White, Weld & Co. (jointly); Union
Securities Corp. and Harriman Ripley & Co., Inc. (joint¬
ly). Proceeds—For
ed late in June

Offering—Expect¬

construction.

new

early in July.

Glass

Fibres, Inc.
16' it was reported

April

that company may do some
this year. Traditional un¬
derwriter—McCormick & Co., Chicago, 111.
stock financing later

common

Glenmore

April 23 it
file

B
&

stock

common

expects shortly to

statement covering

covering 159,142 shares of class

(par $1). Underwriter—Glore, Forgan

Co., New York. Proceeds—For working

general corporate purposes,
Green

shares of

30,000

(with warrants attached), and

preferred stock

par

withdraw statement

Mountain

Milwaukee

April

capital and

Power

Corp., Montpelier, Vt.
May 4 SEC announced approval of a plan for reorganiza¬
tion, which, among other things, provides for sale of
104,094 shares of new common stock (par $10) through
subscribe

for

the

shares.

new

will be used to repay bank loans and
tion.

for new construc-

Power Co.

May 14, it

was announced company is presently consid¬
ering the issuance of approximately $15,000,000 of addi¬

tional first mortgage bonds later

in 1951, in addition to
registration of 35,000 shares of 4% preferred stock (par
$100). Bonds will probably be placed privately, and pro¬
ceeds used for additions and improvements to the com¬
pany's properties.
Iowa-Illinois Gas &
was

preferred stock (par
$100).
An offering of part of this issue may be made
later this year.
The proceeds are to be used to finance
the company's construction program.

to finance its 1951 construction program.

money

I-T-E

Circuit

March 30 it
vote

Breaker

Co.

announced stockholders

was

May 5 will

increasing the authorized indebtedness of the
to $3,500,000 from $1,500,000, and the author¬
ized but unissued preferred stock from 15,000 shares to
30,000 shares, par $100.
J 1
on

May

Inc.; Glore, Forgan &
(jointly); Kuhn, Loeb & Co.,
Smith, Barney ft Co. and Blyth & Co. Inc. (jointly);
Kidder, Peabody & Co.; Harriman, Ripley & Co. Inc.
Proceeds—For construction.

Feb. 7, Harry B. Munsell, President, announced companj

through th«
sale of new securities, including from $5,000,000 to $8,000,000 preferred stock," and the
remainder commot
raise $15,000,000 of

stock

and

bonds.

Probable

new

bidders

money

for

stock

preferred

Weld

Co.,

The First

& Co.;

Shields

Co.

Boston
Central

and

Corp.;

White

Republic

(jointly); Harriman Ripley & Co., Inc.; Salomon Bros. &
Hutzler and Merrill Lynch,
Pierce, Fenner ft Beane
(jointly); Union Securities Corp. and Stern Bros. ft Co
(jointly).
Probable bidders for common stock: LehmaD
Brothers; Glore, Forgan & Co.; Harriman Ripley & Co.
Inc.

K'v/';,/'
Kansas-Nebraska

Feb.

15,

\:V

Natural Gas Co.,

announced

Inc.

Central Republic Co.
to be

used

for the

Light Co. ;rMay 5 stockholders approved proposals to increase the
authorized preferred stock from 200,000 shares to 400,shares

000

and

indebtedness

the

from

authorized

$9,000,000

amount

unsecured

$14,000,000.

Probable

[bidders for bonds: Halsey, Stuart & Co. Inc.; Blyth &
Co., Inc.; White, Weld & Co.; The First Boston Corp.;
Glore, Forgan & Co.; Equitable Securities Corp.; Harri¬
man Ripley & Co., Inc.

Proceeds—For

construction

Bids—

program.

Feb.
'

Shore

FPC

tration—Scheduled

for

June

and

Financing
;

plan

includes

the

issuance

and

sale

$1,075,000 in bonds to Stranahan, Harris ft Co., Inc..
Toledo, O., $225,000 in preferred stock and $150,000 Id
stock.

common

Lees

(James)

;

& Sons Co.

! ;

July 17.

May 16 it was announced stockholders will vote June 10
on
approving a $10,000,000 increase in indebtedness.
Company expects to sell $6,000,000 of 20-year bonds,
carrying interest at less than 4%. Proceeds will be used
to pay off short-term bank loans.
Traditional under¬
writer:

Morgan Stanley & Co., New York.

•

Michigan Consolidated Gas Co.
April 25 it
<

stated company may issue later this year
about $15,000,000 first mortgage bonds. Underwriters—
was

To be determined by competitive bidding. Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Smith, Barney & Co and

Blyth

Co.

Inc.

(jointly); White, Weld & Co. and
-Lehman Brothers (jointly); Harriman
Ripley & Co. Inc.
and Union Securities Corp. (jointly); Glore.
Forgan &
-Co, and W, C. Langley ft Co.
(jointly). Proceeds—For
construction.

Co.

Inc.

Proceeds—To

Utilities

Co.

Michigan,

Michigan

Coldwater,

reimburse

the

for further expansion and for working

way

Pitney-Bowes,
March 29 it

Inc.

announced

was

company

plans *o sell addi¬

tional convertible preferred stock from time to time for
"new money."•
•

Regis¬

Potomac

borrow
fund

Power Co.

Electric

announced

was

these

loans

has

company

to $10,000,000 from

arranged

17 banks and expects to

will be required prior to Dec.

sale of permanent securities
in 1952. Probable bidders: Halsey,
Stuart & Co. Inc.; Lehman Brothers, Stone & Webster
Securities Corp. and Union Securities Corp. (jointly);
First Boston Corp.;
Kidder, Peabody & Co., Merrill
Lynch, Pierce, Fenner & Beane, White, Weld & Co. and
Salomon Bros. & Hutzler (jointly); Kuhn, Loeb & Co.
and Elyth & Co., Inc. (jointly); Dillon, Read & Co. Inc.;

80,000 shares of preferred stock

Harriman Ripley &

March

sought FPC authority to construct
miles of pipeline, at an estimated cost of
$1,500,000, to be financed by issuance and sale of first mort¬
gage bonds.
company

New

this

England Power Co.

Jan. 24 it

estimated that $32,000,000 of new financing

was

31,1952. Between 70.000 to
may be initially offered.
Probable bidders: Harriman Ripley & Co.
Inc.; Lehman
Brothers; Kidder, Peabody & Co.; First Boston Corp.;

fall

Feb.
to

was

common

stock to General Public Util¬

preferred to be
by competitive bidding. Probable bidde/s:
Drexel & Co., Kuhn, Loeb &
Co., and Lehman Brothers
(jointly); W. C. Langley & Co.; Smith, Barney & Co.
and Union Securities Corp. (jointly);
Kidder, Peabody
& Co. and White, Weld & Co.
(jointly); Salomon Bros
Hutzler.

Proceeds

—

For

1951

construction

New

York

State

Electric &

•

through 1953 involves

new

Corp.

June

stockholders

under

employees

the

and

50,000 shares,

reduction plan.

payroll

Boston

First

basis

l-for-7

Under¬

Proceeds—For

Corp-

expan¬
.

Steel

Corp.

to $30,000,000 from $15,000,000. and to in¬
authorized capital stock to 2,500,000 from 1,000,000

company

crease

Traditional

shares.

At present, the company

standing.

has 925,863 shares out¬
plan,. recently an¬

The company's expansion

nounced, will sharply increase ingot capacity, pig iron
and coke output and finishing facilities.
The additions

Corp., New York.

May 15 it was stated that this company, a subsidiary of
American Gas & Electric Co., will need
$36,000,000,[per¬

and

haps more, which it expects to raise some months hence
through the sale of new securities. Probable bidders for

improvements are to

be completed

over

five years.

Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.;
Boston Corp.; Glore, Forgan & Co.,
White,
Co. and Union Securities Corp. (jointly). Pro¬

March

Tube

additional

Co.

stated

was

company

may

stock

capital

*/■,

;

(par $10) to
continuous buttweld mill expansion.

the next
'V/"

Sharon

First

Electric Corp.

March 27 stockholders voted to increase the debt limit of

Ohio Power Co.
underwriter: The First Boston

announced

increasing

Sharon

financing of $41,500,000

cordance with contracts entered last August.

Gas

was

sion program.

provided thus far this year
through the sale of 2.80% first mortgage bonds, in ac¬

bonds:

writer—The

in addition to the $10,500,000

The

Rochester

May 4, Joseph M. Bell, Jr., President, announced that the
company's $66,500,000 construction program for the three
years

Probable bid¬

reported issue of $15,000,000 new bonds are:

May

mon

vV;

Gas

estimated at about $7,000,000."

that .stockholders will.vote
authorized common stock from
1,250,000 to 1,750,000 shares.
It is planned to offer later,
this year about 150,000 shares for subscription by com¬

program

Expected late Summer and early Fall.

Colorado

(Inc.); Glore, Forgan & Co. and W. C. Langley & Co.
(jointly).
" .:■[
>/■:;•

Underwriters—For

determined

Halsey, Stuart & Co. Inc.; Blyth & Co., Inc. and Smith,
Barney & Co. (jointly); The First Boston Corp.; Lehman
Brothers; Kidder, Peabody ft Co.; Harris, Hall ft Co..

reported that company tentatively plana
$2,500,000 of preferred stock to public

Corp., parent.

needed is

sell

$1,500,000 of

ities

Co.

President, announced that "it will
to raise additional funds for construction
the second quarter of 1951. The amount

necessary

purposes

Jersey Power & Light Co.

issue and

Co.; Inc.

Service

Nov. 1, J. E. Loiseau,

ders for

New

through

early

Public

Lynch. Pierce, Fenner ft Beane; W. C. Langley
& Co. Proceeds to be used to
repay bank loans and for
construction program.
-

issue $1,800,000
finance its new
^

Dec. 20 D. S. Kennedy, President, said company Is con¬
sidering refunding outstanding $6,500,000 5V4% cumu¬

Inc.
•
V
May >3 it was reported company plans registration of
200,000 shares of common stock.
Underwriter—F. S,
Moseley & Co-, New York.
Proceeds—For expansion

lative preferred stock

program.

Oklahoma

Gas

Electric Co.

Slick Airways,

(par $100) with an equal amount
stock with a lower dividend rate and may

of preferred

Issue additional

common

stock

(par $10) provided

Panhandle

May 17 it
souri

Eastern

stated company has applied to the Mis¬
Commission for authority to issue and sell

was

to the public $20,000,000 of

1971, and to issue
stock to

sinking fund debentures due
60,000 additional shares of common

key employees under

stock option plan.

derwriters—For debentures,

to be determined by

petitive

bids

bidding.

Probable

may

include

Un¬
com¬

Kidder,

Peabody & Co.; Merrill Lynch, Pierce, Fenner & Beane
Halsey, Stuart & Co. Inc. (jointly).
Proceeds—For
program.

Public

Smith,

Earl

S;:.

Probable bidders for
Inc.; Kidder, Peabody ft Co.;
Merrill Lynch, Pierce. Fenner &'Beane; Union Securities
Corp. and White, Weld & Co. (jointly); Equitable Secur¬

President,

announced

that it would soon be in
senior securities. Prob¬
Inc.; Blyth & Co.,
Inc.; White/ Weld & Co.; Lehman Brothers; Merrill
Lynch, Pierce, Fenner & Beane and Harris, Hall & Co.
bidders:

Halsey,

Stuart & Co.

(A. E.)

Manufacturing Co.

pre-emptive or
preferential right of common stockholders to purchase
subscribe for the company's unissued securities. Ac¬
cording to A. E. Staley, Jr., President and Chairman,
cancellation of this right enables the company to meet
security market situations better in any future sales of
unissued common stock. Common stockholders of record
May 8 stockholders voted to cancel the
or

May 23 will receive a 100%

stock dividend on June 6.

ities Corp.;

This

follows

from

1,000,000 to 2,500,000 shares (par $10).

W. C.

Langley & Co. and Glore, Forgan & Co. (jointly);
Kuhn, Loeb & Co.; Smith. Barney & Co.; Kidder, Pea¬
body ft Co.; Harriman, Ripley & Co., Inc. Proceeds—

company

company indicated
market with $18,000,000 of

able

Lehman Brothers and Drexel ft Co.

The First Boston Corp.; Kuhn. Loeb & Co.,
(jointly); Harriman
Ripley ft Co., Inc. Probable bidders for preferred stock:

v,'

Southern California Gas Co.

the

Staley

by competitive bidding.

April 4, the

(Inc.) (jointly).

Utilities Corp., parent). Underwriter—To be de¬

termined

• •

issue of more than $8,000,000 by fall of
this year.
Underwriters—May be determined by competitive bidding. Probable bidders: Halsey, Stuart &
Co. Inc.; Lehman Brothers; Blyth ft Co., Inc. Proceeds—
To refund the presently outstanding $4,000,000 of 4yg%
first mortgage bonds and repay outstanding short-term
bank notes which are due before the end of the year.

Pennsylvania Electric Co.
Feb. 16 it was reported company plans to issue and sell
$3,000,000 of first mortgage bonds, $2,500,000 of preferred
stock and $2,500,000 of common stock (latter to General

•

Jersey Gas Co.

plans a bond

Pipe Line Co.

April

ket conditions warrant such action, to finance construc¬
tion program. Probable underwriters: Lehman Brother*:

Smith, Barney & Co.: Harriman Ripley ft Co. Inc.

•.

South

mar¬

bonds: Halsey, Stuart & Co.

It is also proposed to

capital.

May
National

constiuction

operate

June 21.

for plant expansion programs already approved

under

15.

authorized

this company to acquire, conpipeline facilities which will carry
natural gas into northeastern Ohio for the first time

struct

■

Pipe Line Co., Cleveland, Ohio

upon

Tentatively expected to be received

and

Lake

voted

Glore, Forgan & Co. and Sterne, Agee & Leach (jointly);
Blyth & Co., Inc.; The First-Boston Corp.; Kidder, Pea-,
body & Co. and White, Weld & Co. (jointly); Lehman
Brothers; Union Securities Corp. and Equitable Securi¬
ties Corp, (jointly); Merrill Lynch,
Pierce, Fenner ft

•

Kansas Power &

and

Beane.

[

of new common stock (par $1) on a l-for-10
basis, fol¬
lowing proposed 3-for-l split-up of presently outstand¬
ing 1.480,050 shares of common stock (par $1) which

company

ceeds will be used for construction
program.

(Inc.), Chicago, 111. The proceed*
company's expansion program.

plans issuance and

company

stockholders of 444,015 additional shares

common

F.- Eberstadt

that company

gage bonds in
recent sale of

are

sale to

& Co., Inc.

announced

was

(par $100). Underwriters—To be determined by competi¬
bidding. Probable bidders: W. C. Langley & Co.,

Weld

plans to raise
$4,200,000 through the sale of debentures or first mort¬
the spring of 1951 (this is in addition to
10,950 shares of $5 cumulative preferred
stock (no par) at $105 per share plus accrued dividend*
and 133,812 shares of common stock (par $5) at $15 per
share (the latter to common stockholders).
The bond
financing early last year was placed privately through
was

(Chas.)

18 it

tive

Glore, Forgan & Co. and W. C. Langley & Co. (jointly);

Smith, Barney

Pfizer

will

(7/17)

Proceeds—To retire $1,926,000 of 4%
1, 1951 and $2,200,000 of 5% bonds due

sell to the public an issue of 150,000 shares of cumula¬
tive convertible second preferred stock.
Underwriters—

Kansas City Power & Light Co.

expects to

•

Feb. 6, it was reported that this company
contemplate*
issuance and sale of $4,000,000 of preferred stock

the

company

„

Co.

May 1, 1954.

and

Public Service Co.

March 23 the company's report revealed it is anticipated
it will be necessary to
provide about $4,000,000 new

bonds due July

Merrill

Electric Co.

announced stockholders have approved an

authorized issue of 100,000 shares of

Iowa

Drexel

about 76.7

May 9, it

Light Co.

able bidders: Halsey, Stuart & Co.
Co. and Lehman Brothers

Proceeds

I daho

Gas

was

repor\eu company may issue some ad¬
ditional bonds this year, if conditions so warrant. Under¬
writers—To be determined by competitive bidding. Prob¬

underwriters, subject to the right of present preferred
stockholders to

Mississippi Power Co.

(6/19)

announced company

was

registration

$100

Distilleries Co.

(2177)

Sutherland

May
near

company

future

increase

Paper Co.,

announced
authorizing

common

stock

authorized

Kalamazoo, Mich.
stockholders will vote in
the issuance and sale of

Bids will

stock to common stockhold¬
The company is currently negotiat¬
ing with Lehman Brothers and Harris, Hall & Co. (Inc.)
for the sale of the preferred stock and long-term indebtedness sufficient to raise a total of approximately

June 6 for the purchase from it of $4,000,000 first mort¬

present outstanding

bonds, series A, to be dated July 2, 1951 and to
mature July 1, 1976
Probable bidders: Halsev, Stuart &

ferred stock and for additional

For
or

•

1951

construction

program.

Expected late Summer

early Fall.

t/< ~

Pennsylvania-Reading Seashore Lines

(6/6)

be received by the company at Reading Ter¬
minal, Philadelphia. Pa., on or before noon (EDT) on

gage

Co. Inc.; Salomon

Bros, ft Hutzler; Kuhn, Loeb ft Co.;

new
ers

convertible preferred

through rights.

$5,500,000.

The proceeds are to be

uesd to retire the

4J/4% cumulative convertible pre¬
working capital.
Continued

page

The Commercial and Financial Chronicle

(2178)

Continued

from

On* May 23,
they will vote on increasing authorized common stock
from • 2,000,000 to 3,000,000 shares.
Traditional under¬
writer: Blair, Rollins & Co. Inc., New York.
Proceeds
shares

are

preferred stock

to be used for

•

(par $100).

expansion program.

May 22 company filed with the SEC an "overall financ¬
ing program" which provides for an offering of 1,065,330
shares of its common stock (par $10) for subscription
by stockholders on a 1-for-10 basis, with an oversub¬
scription privilege; the issuance and sale at competitive

collateral
sell $50,000,000; and the refinancing of bank loans aggregating
$25,000,000 due Dec. 31, 1951.
Probable bidders for
bonds: Halsey, Stuart & Co. Inc.; Dillon, Read & Co.
Inc.; Equitable Securities Corp.; Harriman Ripley & Co.,
Inc. and Goldlman, Sachs & Co. (jointly); The First
bidding of $100,000,000 of first mortgage and
trust bonds, of which it is planned to initially

will

Proceeds

Virginia Electric & Power Co.
May 1 the company announced that it is contemplated
that there will be additional financing to an amount ap¬

stock to 1,808,144 from
1,640,000 shares. Company has no immediate plans for

031,856 shares and the common
any

financing.

proximating

used

April 24 stockholders voted to increase authorized $4.20
non-cumulative preferred stock to 1,200,000 from 1,-

$20,000,000, after
registered with

sale
SEC

stock

common

United Utilities, Inc.

of the additional'
(see above), inci-"

dent to the 1951 construction program, and that further
said company plans issuance and sale of
and $3,000,000 additional debentures ; financing will be required in 1952. Probable bidders
for bonds: Halsey, Stuart & Co. Inc.; Salomon Bros. &
or bonds this year.
Kidder, Peabody & Co. handled pri¬
Hutzler; Stone & Webster Securities Corp.; Union Secu¬
vate placement of an issue of $2,500,000 debentures in
rities Corp.; White, Weld & Co.
\
*
March, 1950.

April 11 it

United Gas Corp.

sale

Stores Corp.

United

(par $50). Underwriter—F. Eberstadt & Co., Inc.,
Proceeds—Together with funds from private
$4,000,000 of 20-year sinking fund notes, to be
toward expansion program.
'''■ [
■"

New York.

Line Co.

tures of United Gas Pipe

Textron, Incorporated
May 10, it was announced stockholders on June 8 will
vote on authorizing the creation of a new issue of 250,000

stock

Proceeds—To purchase bonds and deben¬

Boston Corp.

page

Thursday, May 24, 1951

was

between $2,000,000

Valley Gas Pipe Line Co., Inc., Houston, Tex.
May 9 FPC dismissed application of company proposing
the construction of a $144,500,000 pipeline project to>
carry natural gas from Texas and Louisiana to markets
in
Indiana, Ohio and Michigan.
The company had
planned to build 1,500 miles of line.

March 8 it

was

sell 100,000

shares of new convertible second

issue

ap¬

proceeds toward its construction program. Probable bid¬
ders for bonds:

Halsey, Stuart & Co. Inc.; Blyth & Co.f
Inc.; Smith, Barney & Co. and White, Weld & Co. (joint¬
ly); W. C. Langley & Co. and The First Boston Corp.
(jontly); Equitable Securities Corp.; Alex. Brown & Sons.

and

announced company plans to issue

March 30 it

that company may

announced

was

proximately $9,000,000 of bonds or obtain bank loans (or
some combination thereof)
during 1951 and apply the

Works

Victor Chemical

Washington Gas Light Co.

preferred

Oct. 12, 1951 (Dallas, Tex.)
for June 1, 1951 (Cincinnati, Ohio)
Dallas Bond Club annual Col¬
Cincinnati Stock & Bond Club
Capi- Annual Spring Outing aboard the umbus Day outing.

used

Continued

from

page

financing advances to the Trans-

portation Commission for
tal-improvements.

Our

Can

Reporter's

The chairman of

Delta Queen.;
June

of That

Sure

Commonwealth

Co., Charles Y. Freeman,
in outlining the company's budget

Edison

Field

Day at the

Montclair

Annual Convention

at the

Holly¬

wood Beach Hotel.

Golf Club.

change in the earnings

requirements this week, advised June 8, 1951 (New York, N. Y.)
stockholders that "it is unlikely
Bond Club of New York 27th
because of the unsettled condition
annual Field Day at the Sleepy
of the money market in recent
Hollow
Country
Club, Scarbo¬
This was the dullest week in months
that
future
expansion
some time in the
corporate new funds will be obtainable on as rough, N. Y.
issue field, with today's scheduled advantageous a basis as those of June 8-9-10,1951 (San Francisco,
offerings providing bankers their the last several years."
Calif.)
only important business.
San Francisco Security Traders
To that observation, Investment
True there were a number of
bankers,
especially
those who Association annual spring party at
smaller secondary undertakings,
handled its last $49,000,000 issue, the Diablo Country Club, Diablo,
but even these were more limited
would say "positively." That issue Calif.
in scope than had been the case
was brought out some weeks ago
June 11-14, 1951 (Jasper Park,
recently.
at a price of 101.335 and is now
Canada)
Potential issuers, whose finan¬
quoted at 93% bid and 94 asked.
Investment Dealers Associa¬
cial officers these days keep in
The big Chicago Utility has'
tion
of
Canada
Convention
at
pretty close touch with conditions
plans to spend $450,000,000 in the
in the investment market, pre¬
Jasper Park Lodge.
next four years of which it pro¬
sumably were inclined to sit back
June 14, 1951 (St. Paul Minn.)
poses to raise some $250,000,000
and await some indication of what
in the open market. There are
Twin City Bond Club annual
the Treasury has in mind by way
indications that it may be pre¬
picnic and Golf tournament at the
of
handling its substantial ma¬
paring for another issue later in White Bear Yacht Club
to
be
turities over the next few months.
the year, but thus far, Mr. Free¬
preceded by the usual pre-picnic
Doubtless these people still had man said, no decision has been
get together Wednesday evening,
fresh in their minds the fact that made on type of issue or timing.
June 13.
Secretary Snyder had decided to
An Important Date
forego his option to refinance a
June 15,1951 (Milwaukee, Wis.)
large issue recently by simply
For holders of American Tele¬
Milwaukee Bond Club summer
letting the call date pass.
phone & Telegraph Co.'s 3 Vs % party at Oconomowoc Lake and
Now he faces the task of pro¬
convertible debentures, - due 1959, Country Club.
viding for something over $15,400,000,000
of
maturing
issues it would be a good idea to mark June 15, 1951 (New York City)
which fall due between June 15 June 19 on the calendar.
Municipal Bond Club of New
and the beginning of August next.
That is the last day on which York annual meeting at Sleepy
Market observers are anxious to conversions into capital stock can Hollow
Country Club.

line on just how the Treas¬ be made at the current price of
intends to go about this busi¬ $130 a share.
A recent check
ness, and probably will tread cau¬
showed that only about $30,600,tiously between now and June 15 000 of the original offering of
when the Treasury must provide around $400,000,000 remained un¬
payment

for

$1,600,000,000 in

called 2%% bonds.

converted.

The

government market, rang¬

price
limits, has not been doing much
to provide anything in the way
ing pretty much in narrow

clue

National

June 20, jumps to $140 a

provisions

the

were,

manner.

The

the

■

company

to use
for plant

proposes

proceeds

resulting

increase
jts general corporate funds.
and

equipment

and

EVENTS
In

Investment

make

public offering of $20,-

000,000 of consolidation loan de¬
of the City of Toronto,

bentures
due

serially

from

1955

1981

June 22-24, 1951

Interest rates would range

3% to 3%% and it

was

from

indicated

prices would be set
provide yields of from three
offering

around

3.40%.

Banking

Texas Group
ers

(Minneapolis,

Minn.)

tion

Investment Bank¬

Association Annual Meeting.

Fishbite") at Gull Lake.

June 22, 1951

New York Security Dealers

As¬
the

May 25, 1951 (Cincinnati, Ohio)

sociation

Municipal Bond Dealers Group
of Cincinnati annual spring party
at the Maketewah Country Club

Hempstead Golf Club, Hempstead,

(to

cocktail

preceded by dinner and
party
for out-of-town

May 30, 1951
Dallas

Discretionary

Trusts:

Administrative
Martin

Franz

Securities

Club

Association

annual

June 1, 1951 (Baltimore, Md.)

June

outing at the Elkridge Club.

1, 1951 (Chicago, HI.)
to
Bond Club of Chicago annual
to Field Day at Knollwood Club,

Forest, 111.

(Detroit, Mich.)

Traders

30, 1951 (Chicago, HI.)
Traders

golf outing

Club

the

of Chicago
Nordic Hills

Country Club.
Sept. 30, 1951 (Coronado Beach,
Calif.)

the

for

company

and

Tax

Advantages

the

company.

—

Joseph—reprinted

Continued from page

Publishers, Inc., New York, N. Y.
Restrictions,

Exchange
Annual

inflationary forces
temporarily predominate. The

deflationary
may

Fund.

Monetary

diversification

Forward— Arthur F.

Looking

annual

Burns—31st

tional

Bureau

report—Na¬

Economic

Re¬

search, Inc., 1819 Broadway, New
York

23, N.

Y.—paper.

New York Laws Affecting

Busi¬

Common

and

stocks

seniors.-

Investment

bonds

and

Guidance

Manuals, Grosset & Dunlap, New
N. Y.—paper—$1.00.
Facts

and

9th edition—American

Institute,

York

West
20,
N.

Return,

Street

Wall

Figures—
Petroleum

50th Street,
Y.—paper—

How to Live

—

Lee

Robert

Year

Book

Gresham
House, Old Broad Street, London,
E. C. 2, England—and 111 Broad¬
York

Ltd.,

Y.—cloth

Income

and

Wealth

XIII—Conference
in

Research,

Income
Bureau

and
of

Wealth

Economic

Broadway,

1819

Barrows
East

Wilfrid

Meeting

Shares,

company

and

which had

$5,000,000.

investments

were

capi¬
not

aggregating

surplus

than

Previously,

restricted to the

insurance

companies
comprised the original list au¬

thorized

DURING

1936.

THE

six

Oct. 31, 1950 to

tal

assets

net

Guardian

from

increased

months

from

April 30, 1951, to¬
Fund

approximately

New

value

Dellquest

per

increased

from

$10.28 to $11.54.

New York Stock Exch.

;•

Weekly Firm Changes

—

Company, Inc., 114
Street, New York, N.

The New York Stock Exchange

has

announced the following

firm

and

32nd

changes:
Transfer of the Exchange mem¬

bership

"Joins Redden & Co.

Frank J.

(Special to The Financial Chronicle)

ered

LOUIS,

Hughes

the* company permitting it to
invest in the stock of any insur¬

Y.—cloth—$2.00.

ST.

increase

United States Coins: A Guide to
—

Ltd., share¬
holders approved an amendment
to the Certificate of Incorporation

23, N. Y.—cloth—$6.00.

Values

Research

$337,000 to $794,000, and net asset
in

—Volume

York

Co.,

ANNUAL

Institutional

stocks of

Exchange
&

$83,080,412,

THE

less

Los Angeles 33,

Securities

33% from the figure a year earlier.

tal

Calif.—Cloth—$5.

declared by

Corp. Net assets on April 30, 1951;

den

Wabash Avenue,

sales

Simonson, Jr., President of

National

ance

by George Clark—Bor¬
Publishing
Company,
3077

Studies

Funds'

$29,687,000 in the fiscal year

lustrated

Skinner

17.15
20.36

$172,246,454 100.00#

Sharp & Wallace H. Matlock—Il¬

Stock

29,548.850

Mutual

National

were

$2.50.

With

1.16

35,065.977

ended April 30, it was

Petroleum

J
'

0.41

;.-.'vVv;':•

preferreds

were

Opportunities in Finance—Sam

York,

716.250
1,989.462

Govt, bonds and cash

Broadway, New York 38, N. Y.—

paper—$2.50.

Vocational

60.929&

$104,925,915

preferreds

Convertible

16, 1951—United
Corporation Company, 160

—

Appreciation bonds

revised to April
States

investments

May 17, 1951, was as follows:

and

Corporations, annotated

ness

Mutual Funds

Second

on—International

Report

Mo.—Sherwood R.

now

affiliated

with

Frank

May 24.

bership

Charles

Olive
Street, members of the Midwest

ronado Hotel.

Stock Exchange.

sidered by May 24,

Company

812

consid¬
*

Transfer of the Exchange mem¬

Redden

Llewisohn

Bennett will

Security Traders As¬
sociation Convention opens at Co¬

National

about

the

from Trust and Estates, Fiduciary

—National
June 26, 1951

statistics

are

people who also have a substan¬
tial
stake
in
the ownership
of

Research

Long Island.

Bond

Lake

and Michigan summer
outing at the Plum Hollow Coun¬
try Club.

Memorial Day outing.

June

Outing

of Detroit

(Dallas, Tex.)

Bond

Annual

the

optimism about
is the intangible
factor of management.
Inthe
case
of Miles we have a happy
combination of proven operating

way, New
—$10.00.

(New York City)

namely,

reason

1951-VolumeI (London)—Thomas

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

Bond Club of Baltimore annual

inclusive.

Investment

and Commerce, University
Pennsylvania.

Field

Bankers here were slated today

American

quantitative factors,

the

Risk

nance

guests, May 24).
of Toronto

City

(Philadelphia,

Pa.)

the

plus side;
this is also true of many other se4
curities at this time. The primary

New

Seminar at Wharton School of Fi¬

COMING

according

Manufacturers

Country Club, Oreland.

June 18-23, 1951

debentures proved the week's
largest, and more than that, only
May 24-25, 1951 (Dallas, Tex.)
corporate debt undertaking.
Prospects

at the

Outing

Investment Bankers Association

It is

people interested in this offering,
that it would find good reception
and
move
out
in
satisfactory

Summer

Pa.

in¬

year

Philadelphia

and Dinner

denture.

offering of $30,000,000
Dairy
Products
25-

National

the

under

Products

Dairy

starting

Secretary

-what

Snyder may have in mind.
a case of wait and
see.

Today's

price,

(Philadelphia, Pa.)

Investment Traders Association
of

Golf and

conversion

The

June 15, 1951

While

company,

Shulsky

per

volume expands.

—

get

Security I

Like Best

Investment Bankers-Association

Report

ury

The

(Hollywood

25-30, 1951

Beach, Fla.)

of New Jersey An¬

Club

Bond
nual

Nov.

(New Jersey)

1, 1951

Jack W.

Kollste4e

Schiffer will be con¬

Volume 173

Number 5014

The Commercial and Financial Chronicle

DIVIDEND NOTICES

Midwest Exch. Members

Executive

111.—The

CHICAGO,

».

Committee of the Midwest Stock

Exchange has elected to member¬
ship:

Landstreet

Clark,

II,

Nelson,

William

Kirkpatrick,

Inc.,

DIVIDEND NOTICES

leather

states

united

the

The Board of Directors of
Board of
Directors
at a meeting held
23, 1931, declared a dividend of 75 cents
share on the Class A Convertible Preferred
Stock payable June 19, 1951, to stockholders of
record June 12, 1951.
*"•/.
■V'
.

CAMERON,

May 23,

1951.

COAL

COMPANY

'
a

meeting held today, declared

dividend of

cents

Stock

the

mon

June
the

1951,

12,

per

quarterly

the Com¬

Company,

payable on
shareholders of record

to
business

May

31,

1951.

DIVIDEND NOTICES

QUARTERLY DIVIDEND of One Dollar ancl
Twenty-live
Cents
($1.25)
per
share on the
Common Stock of this Company has been de¬
clared payable
at the. Treasurer's Office, No.
165 Broadway, New York 6, N. Y., on Monday,
June 18, 1951, to stockholders of record at three
o'clock P. M.,
on Monday, May 28,
1951
The
stock transfer books will not be closed for the

payment

York,

dividend

meeting of the Board of Directors
Alleghenv T.ud'um Ste"' Co>r>oratfen
held
today, May 15, 1951,
a
dividend
of
fifty
cents

the

June

85^

the Common Stock

1951,

The Board of

May

on'

ment

Cents

Y„

Secretary

SIMPSON,

17,

May

Treasurer.

1951.

INTERNATIONAL

UTILITIES

HARVESTER

COMPANY

Directors

record

all

pay¬

(25tf)

common

the

busi¬

such dividend to be
1951, to the holders of

15,

said

June

at the

stock

per

of fifty cents

145

the

common

declared

(50^)

stock payable

July 16,19 51, to stockholders of record at

JOHN J, O'BRIEN, Secretary

the close of business

Secretary

GERARD

per

share
the

CARLISLE
120

The Board of Directors has

dividend

de¬

cents

Twenty-five Cents ($1.25)
today been declared
June

29,

record

1951,
the

share has

by Kennecott

payable

Corporation,

Copper

June

business

1,1951.

Secretary

stock^and

Board

The

regular

July 2, 1951, to stock¬

declared

12%

and

share,

per

May

PREFERRED DIVIDEND

President

Stock
able
ers

Ifys

Value),

CONTROLS COMPANY

Inc.

The Directors of Foremost

Dairiesjnc.,

has been declared

have declared the

the Com¬

Stock, payable June 20,
1951, to stockholders of record
at the close of business June 4,

mon

following quarterly dividends:

6% PREFERRED STOCK
75c Per Share

1951. The
not

4% CONVERTIBLE

transfer books will

DIVIDEND

oscar

has th^ Hate

btuck

the

J. H. Miracle
Secretary

May 23, 1951

the

per

record

declared,

June

1951

20,
of

not

has

June

Directors

The

extra

per

dividend of

share payable >.

1, 1951.

Common

quarterly

regular

Dividend

No.

fifty

cents

previously au¬
thorized, will also be paid on June
12, 1951 to stockholders of record
(50(')

will

share,

per

June 1, 1951.

be closed.
Edward F. Galm,

May 21,1951

solberg,

Secretary

May 22, 1951

May 21,1951.

Treasurer

25c Per Share
Each

Dividend

of business,

July 2,

payable

to Stockholders of record at

the close

June 11.

>CHEMICALS

LOUIS KURZ,

Secretary

American Car

TEXTILES

PLASTICS

Southern

Edison

CELANESE
CORPORATION OF AMERICA
180 Madison

Avenue, New York 16, N. Y.

A dividend of twenty cents

the Com-

THE
Boardthe
of Directors
this day
declared
followinghas
dividends:

4v>% preferred stock, series a

(20c)

per

in on

Stock of this Corpora-

tion

was

declared

sssc

payable

15,

1951

stock-

holders of record

May 31,

§|

1951. Checks will be mailed.

An initial dividend of 82 J4 cents

30,

for

period April 25 through June
1, 1951 to

1951, payable July

holders of record at the close of busi¬
ness

June 5, 1951.

7% second preferred stock
The

THKA3UBEH

Philadelphia, Pa.
May 18, 1951

regular quarterly dividend for
the current quarter of $1,75 per share,
payable July 1, 1951 to holders of

record at the close of business

DIVIDENDS

dividend

cents

wT*'

share, payable June
holders of record at the

per

23, 1951 to

close of business

'4.32%

June 5, 1951.

•

The Board of Directors has

authorized the payment

of the
following quarterly dividends:

50 cents per share on
inal Preferred Stock;
27 cents per

Orig¬

year

share on Cumu¬
Stock, 4.32%

Series.
The

out

each

upon

the

dividend for

of the

stockholders of record

ber 1, 1951
of

business

pre¬

payable in four install¬

1%%, payable respectively,
176,

stockholders of record

September 14,

No. 178,

(1)

June 29, 1951 to

the close of business June

1951;

(3)

Octo¬

the close

Preferred

January 2, 1952 to stock¬

holders of record at the close of business December

14, 1951 and (4) Preferred dividend No. 179,

April 1, 1952 to stockholders of record at the close
above

dividends

are

30, 1951, to
stockholders of record June

of business March

14, 1952.

June

5, 1951. Checks will he mailed
from the Company's office in
Los Angeles, June 30, 1931.

Checks will be mailed by the Guaranty Trust Com¬
pany

of New York. The transfer books will remain

open.
—

1951,

par amount

15, 1951; (2) Preferred dividend No. 177,

Secretary

of the earnings for the

ended April 30,

ferred shares outstanding,

dividend

lative Preferred

R. O. GILBERT

fck~''

May 22, 1951.

today declared,

Preferred dividend No.

no. 17

p. c.

;

pany

fiscal

ments,

series

dividend

New York 8, N.

The Directors of American Car and Foundry Com¬

the year of 7 %

no. 168

Foundry Company

and

30 Church Street

original preferred stock

payable

COMMON STOCK

;

Americas Wtciqar

June

..^V:

5, 1951.

'*75

PHILLIES

Company

cumulative preferred stock

the

June

California

May 18. 1951

hale,

this

1951 to stockholders

12,

of record June

record

transfer books

The

SANDERS,

NO.

Board

fifty cents (50c)

pay¬

V
F.

DIVIDEND

The

day declared

Stock

Common

June 8, 1951.

Treasurer

N. Y.

per

the close of business

the close of

business June 8, 1951.

New York 6,

able

Street, New York 17, N. Y.

COMMON

quarterly di¬

stockholders

1951, to stock¬

July 2,

payable
holders

dividend of 30^

CORPORATION
60 E. 42nd

STOCK

37Yit

been

has

the Common Stock,

WEST INDIES SUGAR

STOCK

COMMON

cents

dividend of twenty-five

Corpo.ation, payable July 2,
1951, to stockholders of record at the
close of business on June 11, 1951.

WALTER H. STEFFLER
Secretary & Treasurer

May 16, 1951

50c Per Share

regular

vidend of

has this

closed.

PREFERRED STOCK

(25c) per share on the t.minun

Greensburg, Pa.

COMMON

day declared

A dividend of 15 cents per

declared

May 17, 1951.

llOBEKTSIIAW - FULTON

The Board of Directors

COMMON DIVIDEND

Board of Directors

UTILITIES,

pay¬

closed.

Jacksonville, Florida

dividend will amount to

share, subject, however, to any
change which may occur in the official rate of
exchange for South Africa funds prior to
June 1, 1951. Union of South Africa non-resi¬
dent shareholders tax at the rate of 7%%

close of

the

The

per

July 1, 1951, to stockhold¬
of record

LOUISIANA

Dividend Notice

June 5, 1951 of American shares issued under
the terms of the Deposit Agreement dated

SOUTH

business June 20, 1951. The
transfer books
will not be

FOREmOST DniRIESjrr.

Jacksonville, Fla.,

($50 Par

SHREVEPORT,

MIDDLE

quarterly dividend of 58.75
cents per share has been de¬
clared on the 4.70% Preferred

WILSON

CORPORATION

1951

New York, N. Y.,

ROY

Shares of the Company payable June 1,
to the
holders of Ordinary Shares of
record at the close of business May 25, 1951.
The Directors authorized the distribution of
the said dividend on June 12, 1951 to the
holders of record at the close of business on

nary

DUBUQUE, IOWA

15, 1951.

GILS

UNITED

per

By Order of the Board of Directors,
H. E. DODGE, Secretary.

COMPANY

payable June 1, 1951, to stockholders
of record at the close of business on

shillings

will he deducted.

POWER

extra divi¬
dend of 12% cents per share, on the
common" stock
of
the
corporation,

cents

Treasurer

May 22, 1951

dend of ten

May 18, 1951

today declared a divi¬
share on the Ordi¬

The Board of Directors

$1.39

John H. Gage,

INTERSTATE
of

Dividend No.

June 24, 1946. The

June 12, 1951.

dividend

preferred

holders of record at the close

;

Illinois

quarterly

stock have been- declared, pay¬

CASTINGS

Directors

com-

the $3.50 cumulative

able

the

mon

of business

CORP.

Secretary

O'okiep Copper Company
Limited

%7lM

stockholders of

ROBERT C. SULLIVAN,

Chicago,

RICHARD BULLWINKLE

A cash distribution of One Dollar and

MARSHALL, Fresident

ALUMINUM

50tf

May 31, 1951.

May 18,1951

Dividends of

share on the outstanding
capital stock of the Corporation,
payable June 5, 1951, to stock¬
holders of record May 25, 1951.

ADVANCE

& GO.. Inc.

RAHWAY, N. J.

Broadway, New York 5, N. Y.

per

FURBER

il MERGE

CORPORATION

clared

COPPER

payable

to stockholders

1951

of record at the close of busi¬

J. EGER, Secretary

ness

KENNECOTT

the Common Stock

Company,

July

June 15, 1951.

dividend of 32 cents

Directors today

Board

The

Company have declared quarterly

dividend No.

NOTICE

DIVIDEND

The Directors of International Harvest¬

1951.

By order of the Board of Directors.
;

COMPANY

Company

the

Twenty-five
shares

IHUIINAflOMAL

1951,

June

business

outstanding

of this

authorized

1951,

& ST. LOUIS

COMPANY

dividend

June

28, 1951.

COPELAND, Secretary

per

stock
ness

payable June 14, 1951, to stockholders of
record at the close of business on May

J<\

McCASKEY.

RAILWAY

payable

L. du P.
a.

interim dividend for

second

the

1951.
S.

1951, to stockholders of record
the close of business on July 10, 1951;

RICHARD T. FLEMING,

•

notice

THE MINNEAPOLIS

Pre¬

Stock—$3.50 Series, both payable

25,

also

per

the

and

ferred

share
was
de¬
the Common Stock
Corporation, *-a«rbe
June
30, 1951,
to Common
stockholders
of
record
at
the
close
of
business
on
(50c)

clared

87V2^

Series

July

has declared this

of Directors

day regular quarterly dividends of $1.12Vj
a
share on the Preferred Stock—$4.50

Penna.

Pittsburgh,

May 28, 1951.

business

Secretary-Treasurer

May 21,1951.

Board

additional
Com¬

Beachley,

V' Wilmington, Delaware, May 21, 1951
The

share and

pany's capital stock, payable June 15,1951,
to stockholders of record at the close of

dividend.

this

J.
New

dend of $1.00 per

dividend of 25 cents per share on the

•

Charles E.

Allegheny Ludlum Steel Corporation

TEXAS GULF SULPHUR COMPANY

134
The Board of Directors has declared a divi¬

CONSOLIDATION

Checks will be mailed.

COMPANY

NO.

Treasurer.

LI. DU PONT DE NEMOURS & COMPANY

Louis, Missouri.

DIVIDEND

St.

Co.,

Moore

SOUTHERN PACIFIC

PITTSBURGH

DIVIDEND NOTICES

The

May
per

Smith,

DIVIDEND NOTICES

co.

Nashville, Tennessee, and John H.

Crago,

(2179)

Treasurer

May 17, 1931

C Allan Fee, Secretary

The Commercial and Financial Chronicle

(2180)

union

BLS

it,

from the Nation's Capital

JljL I

TFM fw

l/U

cost

higher

was

showing that the

living,

figured. The

JL Cr 11/

crowd

view

true

the labor

running fight with
get the index "adjusted"

with

written into

were

contracts,

carried

Behind-the-Scene Interpretations

Thursday, May 24, 1951

escalator clauses

BUSINESS BUZZ

Washington...

BLS
move

official

saw

the

of this

purpose

provide

labor

than

justi¬

fication for the constant drive for

higher
WASHINGTON,

paradoxes of the current ef¬
fort for economy is that the over-

ply, without taking account of the
"non-essential"
automobile,
ap¬

gress

majority of the Con¬
appreciates that the legisla¬

pliance,
and
other
industries.
Hence something has to give some¬

tive

machinery

the

whelming

with the spending arguments

cope

uncontrollable

almost

vast,

that

Administration—but

prac¬

it.

have

by about

because every

be done about

concrete step

control ex¬
ecutive spending arouses "juris¬
dictional disputes"
between the
House and Senate, and between
one

machinery

tion

single appropria¬

control device of some
if not great
value. The House,
however, is dead set against it,
and this will probably fail.
bill,

Senator John L.

McClellan

(D.,

iArk.), the Chairman of the Ex¬
penditures Committee, is the au¬
proposition
receiving at¬

thor of another major

which

currently

tention and hearings.

should

there

experts

genuine
would

where

some

staff

Congressional

about

each

for

of Congress, would

about the activities of the bureau

this

could

members

the

way

staff

advance

prepare

reports for appropriation commit¬
members

tee

ment

was

how

spending its

depart¬

money,

appropriation

and

there

background

factual

what
was

What

will

ported,

cut

character

ing. These

back¬

deals

Real

talked

steel

not

"iron

itself.

said,

not

are

steel

they usually are, in anticipa¬
of a fiscal-year end, overa multitude of other
practices.

staffing, and
wasteful

McClellan's

proposal, however,
opposed both by the appropria¬

both

tions committees of

Houses,

and

by the House in its jealousy
over its initiative in handling ap¬

also

the

staff

would

"watchdog"

needs
29

1950's

over

best

solution

and

other

places

battle

increase

been

interest

put

rates

toward

eral Accounting

gage money—a

Administration

the

take
or

continuing drive

away

either

"irritating"

sured loans

which

op¬

erations.
«:

in¬

fear

trend, incidentally

officials

publication

This battle has

lost, how¬
it is authoritatively reported.

ever,

For

been

some

time to

will

come

not

market

keep

tially less than the two-thirds of
the sums used during the
first

present rates.

press

officials

was

indicated

here.

conference last week

indicated

that

the

over¬

the

big

way

market
:

try

blooming
•

prove

gage

money

sufficient

present

about one-third below the amount

home construction, then consider¬
ation may be given to boosting

consumed

the

six

months.

interest

FHA's

and

tary and essential civilian needs,
as presented to NPA, amounted to

paid

Congress

and

housing.

little

order

did

voted

cut

public housing, exhibited

that

House

were

the

action

the

sustained it would be

said that,

subsidized

ing, in which

are

rent is paid

outside "voteless

prices

ing
is

...

for

excess

people

If anybody wants a first class
example of how a bureaucrat can

openly

lobby

against

economy,

send for the statement of

Agency,

Washington,

25,

C.,

through 1975. They

from

the

last

102 %%

year.

to
re¬

Two With Slay ton

have become associated with
ton

low

hous¬

incomes

For

Large

pay

It's

are

their

WE SUGGEST

RIVERSIDE CEMENT CO.
CLASS B

Labor Statistics cost-of-living in¬
will

before

Even

get

nowhere

hearings
a

House

this

the

Labor

the

producer of

STOCK
cement

fast-growing Southern

Analysis of
a

review of

try

this
the

available

Company
Cement

and

Indus¬

request.

Selling about

$14.00

year,

LERNER & CO.

subject

Investment

subcom¬

10 Post Office

before

(common)

leading

California.

«!

pretty good bet that the

latest drive of the labor organiza¬
tions
to
jiggle the Bureau of
dex

Appreciation Potential

was

only,

of subsidized housing.
*

Slay-

Co., Inc. of St. Louis.

great part of the

ORLEANS, La.—Alma G.
and
Eugene H. Searles

Aucoin

everybody

public

by the Treasury,
of

' '>'

than

than 6% for each of

(Special to The Financial Chronicle)

years

less

by operation of the sink¬
fund, the redemption price

forms

the

100%.

own

■■

not

fornia, for instance, has in

and

scaled

100%

i'•''' .if'-

1964

deemed

and veterans, who have their

employees

redeemable otherwise than by
operation of the sinking fund at

way,

Federal

each

are

unsympathetic Congressmen. Cali¬

the 240,000 in the nation's capital.
■:

.Until Ray

thought

privileged to vote against

250,000

en¬

of the de¬

for

nor more

NEW

hasn't heard

employees

than 4%

the years 1965

un¬

Incidentally, Mr. Foley also de¬
clared

preponderantly able to

are

debentures will be

sinking fund providing

nor

down

current

Federal

are

new

usual courage.

cost-of-living

Securities

Square, Boston 9, Mass.

Tel. HUbbard 2-1990

Allied Electric

FIRM TRADING MARKETS

FOREIGN

Products

SECURITIES

Prospectus

50 BR0A0 STREET...NEW YORK 4, N. Y.

Hili, Thompson & Co., Inc.

Trading

tion appear to be combining once

request

FOREIGN SECURITIES SPECIALISTS

Administra¬

r.ARL MARKS & CO- INC.

the

this

substan¬

any

TEL HANOVER 2-0050...TELETYPE: NY 1-971

to cut

ever

HHFA

sacrificing

withstanding

grade.

pay

embarrassing

even

train,

gravy

not for defense workers who

VAs.
*

However, requirements for mili¬

volume

return

the

they

return, enough, that is, to sustain
sharply-curtailed

public

the third quarter, be cut down to

first

the

The

public

generously treated, it is because

mort¬

rates

the

lowest

anybody

case

the

all strictly civilian use would, for

during

Later this year, IF there should
not

titled to

tial actual production. It also dis¬
closes that Congressmen who not¬

mini¬

Federal employees

•

many

vigorously HHFA moved to
line up as many cities as possible

em¬

than

able to them will be very substan¬

ment and additions.

This release shows crystal clear

employees

civil service

The

re¬

ana

operations

along
in

through

mittee;.

to find that the actual steel avail¬

year,

bill under

in the highest

the

and

generally higher price levels, and
equipment replace¬

are

how

carrying
with

for plant and

1952.

May 16

41/4%, and VA's more than 4%.
Furthermore, the Federal National
Mortgage
Association,
"Fanny
May," will not step back into the

half

payroll. In

FHA mort-, by Raymond Foley, Administrator
of the Housing and Home Finance

the third quarter
arrives
July
1,
"non-essential"
steel-using industries are expected
before

Long

and

in¬

connection

bentures

despite

pay ; more

cities,

corporate

;

for

how far

projects

Washington" and in states where

trend

smaller volume of mort¬

have played down.

gages
*

to foreclose what

so as

officials

some

its independent audit,

to neutralize its

25%

90% of them

both

how

classified

Why

has

release

expansion

housing pro¬
gram down to 5,000 units in fiscal

;

real

just

housing

financing will

general

cutting

postal employees.

is likely to be.

for

for the retirement of not less than

make

levels.

gem

163."

postal a "bitter blow" to families of
deficit is almost matched by the veterans, servicemen, and defense
increases in pay Congress voted 'workers.;;
^fe;- f

organize
where

lost by the action of the House in

raises since the war. Aggre¬
gate pay increases since War II of

detail

the

from

pay

consideration would boost

"HHFA-OA-No.

Foley tells the world

have been neglected in respect to

drives for collection of scrap from

farms

used

employee. The
of all increases

by 10%.

83%

this source.

overlaps the function of the Gen¬

average

brackets of

acquisition of

million tons from

The

1976

Subsidized housing: units would be

fail to

probably

FHA- and VA-guaranteed and

stantly fought

per

week

Among custodial employees, or
bring in .janitors, elevator operators, etc.,
the 3 million tons of purchased the pay increases voted by Con¬
gress have run up to 105% of War
scrap which the industry this year
would

appropriations to see that they are
spent in accordance with Congres¬
sional intent.
This
immediately
Office, a Congres¬
sional appendage which has con¬

to $800

mum

Underneath the surface of news,
Senator

Arkansas

have

that

last

higher price, while it might help,

propriations.
The

feel

They

scrap.

Administration

ployees has ranged from

con¬

request to

wrong—when they want

Senate, however,

the

steel

due

purposes, including the
of increased inventories

Smith!"

this- little

Mr.

timate

pay

shortage to continued
production, offi¬

scrap

maximum

employees

It is not that Federal

production capacity.

Despite the ever-present threat
of

Federal

numbered

axiom

The

pay

of steel to add three tons of

ton

steel

annual

old

public

active

staff could
find out about such things as un¬

tion

Grandma

scores

the

takes

the

would add 6.9% to the

much

shortage"

ore

shortage

the

much

boost the ceiling price on iron and

spent appropriations rapidly spent,

that's

raise.

weighted

pansion program to this realistic
basis

$165

for limiting the ex¬

reason

2,300,000

proposed to boost annual

are being rechecked
care¬
fully, and probably will be denied.

official presentation of a case for
a

which tax amortization certificate

templating seriously

of the

that
can't

the projects upon

are

provide

demonstration

by out¬

fits of less than established

expansion plans of a

nebulous

cials,

'Confidentially,

out, it is re¬

which would get to the core

Such

ceivables

are

debentures

Proceeds

steel producers.

request.

These staff members then could

money.

3V8%

established

group of 107

99%%.

projects actually started or

projected

which

is
offering
publicly today (May 24) $30,000,000 National Dairy Products
Corp.

achieve by a
couple of years. This figure of 117
million tons pretty well coincides
with

Brothers head

underwriters

"prompt" the appropriations com¬
mittee
members with
questions

man

the expansion pro¬
gram below the target of some 117
million tons of capacity which the
plans

views.)

own

Dairy Products Debs,

reducing

industry

to re-

Goldman, Sachs & Co. and Leh¬

thought, it is said,

House.

Bankers Offer National

are

which

basis

Despite reports that officials
are cutting
back on steel expan¬
sion, there is

the

plans

favorably with the

square

re¬

and may or may not coincide with

year.

realistic

committee

fleet the "behind the scene" inter¬
pretation from the nation's Capital

during

expansion

industry

is to~incIude

cost-of-living

(This column is intended

plans of the industry.

department assigned to each for

watching.

steel

now

make it their business to know all

the

wa3

bill, which is doubtful,
killed in

the "Chronicle's"

would

staff members, who

be in the pay

half

if the

former

who

the

45%

use

will be

would

It is believed that official

whom

specialize intimately

These

their

segment of government activities.
.

cut

below

first

well

central idea is that

McClellan's

the

would

instance, the Senate is hot

For

whole

current drive

ports out

committee and another.

for the idea of

The

index. Even

only

former BLS

fired

income taxes in the

with

requirements,

initial

the

getting

Secretary
of
Labor
friendly toward labor.

one-third

industries

set

much

"non-essential"

\y-::

paring of

tically nothing can be done about
And nothing can

\ ■;

will be pared down, but even
a

succeeded

Commissioner

official requirements

In fact the

drive

the point of

where.

inadequate,

antiquated, and entirely unable to

steel sup¬

of the estimated

135%

C.—One of

wages.

This
'

Department

70 WALL STREET, N.
WMm*

hsjfi
••«w.vu&i.

Tel.

WHitehall

4-4540

Y. S

Full text of Commercial and Financial Chronicle : May 24, 1951, Vol. 173, No. 5014

FRASER