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Final
Edition
OVER 100
ESTABLISHED
In 3 Sections
YEARS
Section 1
-
tand
ommetciaL an
ROg. TJ.
tYolume 159
New
Number 4284
Electronics And
■>
1
A
20,000,000 and 25,000,000 radio re¬
ceiving sets will exist by the end
of 1944, as compared with' the in-!
:
dustry's
alltime high pro¬
duction of 13,-
units
it was
000,000
in 1941,
estimated
re-
cently
by
E.
Larry
Chair¬
Gubb,
of
Di¬
rectors
of
Board
Philco
Corpo¬
in
an
address
on
ration,
Airline Official Sees
I Just
town
and Television
any
Post¬
World"
of
Philadelphia.
"Today the radio-electronics in¬
is turning out specialized
dustry
Dean
the event
air..-
sue
page
on
2146.
SAVINGS and LOAN ASSOCI¬
ATIONS
material
editorial
pears on page
a
free
e
ap¬
2152.
night,
our
na¬
M.
Far too many
neither should
dustry, of government, of finance
and of
transportation gathered to¬
to
pay
tribute to
the
Brothers,
who had
launched the first flight — and
whose inventive genius gave the
world the airplane that is the
gether
Wright
*An
delivered
address
Miller before
the
by
Mr.
New York
So¬
ciety of Security Analysts on May
17, 1944.
ernment "
>
the main pro¬
vider,
dis¬
penser and
custodian
o f
economic
our
well
on page
2154)
being.
-
little
a
reflection
and
totalitarian
mination
e x a
T.
John
of
our
rience
(Continued
as
Holdsworth
expe¬
in the thirties should con¬
vince the most confused or skep-
Underwriters
Dealers
for
MANHATTAN
BON©)
VICTORY
Hirsch, Lilienthal & Co.
R. H. Johnson & Co.
Exchange
Geneva
Rep.
25 Broad St., New York
HAnover 2-0600
64 Wall
4, N. Y.
SECURITIES
"•
(Continued
see
on page
pri-
2156)
HUGH
Syracuse
Dallas
15 EXCHANGE PL 634 SO. SPRING ST.
JERSEY CITY
ELECTRONICS
Kohbe', Gearhart & Co.
INCORPORATED
Members
TELEPHONE-RECTOR 2-6300
W.
L. Hemingway
n
/
which provides the
consultation
on
machinery for
international
monetary problems.
'
.
To facilitate .the expansion
and balanced growth of interna¬
tional trade and to contribute in
(2)
this way to
the maintenance of a
(Continued
on page
2f55)
the
chase
BANK
Brokerage
Service
Broaden your customer
for Banks, Brokers
service with Chase
and Dealers
Hardy & Co.
Members New
York Stock Exchange
Members New
York Curb Exchange
30 Broad St.
New York 4
Tel. DIgby 4-7800
LOS ANGELES
Tele. NY 1-733
facilities
Member federal Deposit Insurance
Corporation
New
N.
Y.
Security Dealers Ass'n
45 Nassau Street
TeL REctor 2-3600
New York 5
Teletype N. Y. 1-676
Philadelphia Telephone:
Enterprise 6018
England
Company
Public Service Co.
COMMON
ALL ISSUES
INDUSTRIALS
STOCK EXCHANGE \
YORK 5.N.Y.
o
1
;
Analysis upon Bequest
Bought
14 WALL ST., NEW
t i
correspondent
w/lONG and-GOMPANY
RAILS
MEMBERS NEW YORK
u
OF THE CITY OF NEW YORK
Central Soya
BULL, HOLDEN & C°
through
permanent
instit
.
Actual Trading Markets, alway
BROKERS
mone¬
coopera¬
tary
to it that
functions
PHILADELPHIA
Albany
Buffalo
Pittsburgh
Williamsport
Troy
i
Bond
REQUEST
^—INCORPORATED
Cleveland
BOND
tional
tion
a'
pro¬
interna¬
nationalistic-social¬
Government
Wholesale'Dis+riiutors
Street, New York 5
BOSTON
Teletype NY 1-210
Chicago
ON
Established 1927
Exchanges
INVESTMENT
-
his
FUND
F/t
PROSPECTU
London
or
istic control he must
r
•
other
it attempt
(1) To
mote
NATIONAL
Buy War Bonds
and
purposes
.MU.
B
Distributors
Members New York Stock
announced
do
Govern¬
to dis¬
tribute what by the coordination
of natural
resources,
labor and
capital-management
is
created.
In a
democracy government is
essentially a political agency set
up and motivated to express the
will of the people in matters af¬
fecting the general welfare. And
unless the citizen is willing to sur¬
render all his hard-earned rights
and privileges, including the fifth
freedom,
free
enterprise,
into
Gov¬
the
to
things.
or
socialistic,
cannot of itself create any wealth,
look
to
should
democratic
ment,
had
us
come
Miller
D.
these
none
of
'capital,
of
and
competi ti v e
capital ism.
But
For index see page 2168.
Mone¬
tary Fund and
he
Government
under
enter-
prise
than
heavier
leaders of in¬
in that State on
dealer activities
was
h in
c
tion's
bearing
tional
,
in
information
Florida;
of Miami, Coral Gables,
Committee, Economists'
for
Interna¬
a n
the
cessf ul
a
m
That
OHIO SECURITIES section con¬
Executive
basic
principles
National Committee On Monetary Policy
/
first
flight in
(Continued on page 2168);
taining
University
Of
upon a
of
During the long depression and the period of pump priming and and policies,
"reforms," too many of us seemed to forget the clear lessons of our which I shall
rapid
indus€>
:
discuss
in
tical that in a democracy such
trial develop¬
turn
as
fol¬
as
we
are
ment
under
privileged
to
live lows:
and
Hawk,
i t e d Na~
have
set
JOHN THOM IIOLDSWORTH*
The
Member
Kitty
was
Gubb said.
in This issue
Emeritus,
Carolina* town
man's
war
By
North
The,
n
agreed
Post-War Jobs
tory. \
Secretary of the Treasury before
tions
his¬
of
equipment at the
rate of approximately $3.2 billions
a year—a greater volume of out¬
put than that of the entire auto¬
mobile
industry in
1939," Mr.
of
Of Fund Can Be
stated that the technical experts of the
<3j>U
since the
dawri
the
Club
Bond
fects
committees of Congress he
^
of an
with'ef¬
versary
event
In the recent statement of the
of men met one morning at a little
few weeks ago a group
as
before
types
a
the coast of North Carolina to commemorate the 40th anni¬
on
far-
Larry, E. Gubb
Prominent Banker Holds Main Purpose
Accomplished By The Bank For International Settletained Only Because Of Lack Of Faster Transportation. ments.Views Fund Merely A "Super Bank" Controlled
Looks For Further Reduction In Air Express Rates As By Borrowers And Would Entail Loss Of Nations' Eco*
Soon As Additional Equipment Can Be Had To Handle nomic Sovereignty. Scores Treasury's Neglect To Con¬
An Expanded Cargo Volume. Discusses Marked Changes sult Bankers Regarding Proposed Plan For Stabilization
He Envisages As Result Of Growth In Air Transport Of Currencies
as
war
Airplane Diverting Large Portion
'
St. Louis-
Of Business From Present Carriers That They Have Re¬
reaching
the
'
\
President, Mercantile-Commerce Bank and Trust Company,
Former President, American Bankers Association
Cargo Traffic Manager—American Airlines, Inc.
"Electro hies
in
J^::
.
the
of
man
By W. L. HEMINGWAY
'
By MELVIN D. MILLER*
/
pent-up demand for between
Copy
Shortcomings Of United Nations'
Proposed Stabilization Fund
For
Post-War Air
Post-War World
60 Cents a
Price
York, N. Y., Thursday, May 25, 1944
The Prospect
Television In The
Office
S. 'Pat.
—
Sold
—
Quoted
t
HART SMITH & CO.
REYNOLDS & CO.
Members New
120
York Stock Exchange
Broadway, New York 5, N. Y.
Teletype NY 1-635 G r-;
mm
New
York
IRA HAUPT & CO.
Dealers Assn.
Bell Teletype NY
Telephone: REctor 2-7400;,
Bell
!
Members
New York Security
52 WILLIAM ST., N. Y. 8
HAnover 2-0980
1-396
Montreal
Toronto
Members of
Principal Exchanges
111 Broadway,
REctor 2-3100
N. Y. 6
Teletype NY 1-1920
Thursday, May 25, 1944
FINANCIAL CHRONICLE
THE COMMERCIAL &
2138
:Trading Markete in::
Du Mont Laboratories
40
"
"
,
Sold
—
Quoted
Members New York Stock
'. ' Members
York Stock Exchange
■
New
120
REctor
Y.
'
New Orleans,
BROADWAY, NEW YORK
Tel.
Exchange
25 Broad St., New York 4, N.
HAnover 2-0700
*
NY 1-1557
New York Curb Exchange
Teletype NY 1-672
BArclay 7-0100
Telephone
—
request,
on
Steiner, Rouse & Co.
fyfcpONNELLfefO.
;
v
Principal Exchanges
NEW YORK 6, N*. Y. ,*
115 BROADWAY
HA 2-2772
Exchange PL, N.Y. 5
Bought
&. Co. Inc.
Bought—Sold—Quoted
t
Members N. T, Stock Exchange and Other
Dealers Ass'n
Security
York
New
Analysis
Light
"iV; COMMON '
Goodbody &. Co.
KING
Established 1920
Members
Power and
NORANDA MINES
?
P. R. Mallory
Delaware
i
KERR- ADDISON MINES
Maguire Industries
&
S
BULOLO GOLD DREDGING
Differential Wheel
KING
U. S. FUNDS for
We Maintain Active Markets in
Nu Enamel Corp.
2-7815
1
La.-Birmingham, Ala.
offices
Direct wires to our branch
■
TELETYPE NY 1-423
BELL
Holmes Trustee Of
New
Util, Com.
American States
Popular Writer On Economic Problems Paints A Picture
Of "Pluses And Minuses" Of Post-War Employment-
Moines & Sou.
4's & Stock
.
tr
Stock Exchange
A
N. Y. 5
120 Broadway,
Bell
g r o c e r i es;
That -is
a
good
pretty
-word
four
definition
the
windows with no
eral
Teller, Inc., as
its
Holmes
Savoy Plaza
3-6s, 1956
*
Russian Government
6l/2s,
•Traded
on
1919
Exchange
Vanderhoef & Robinson
Members
York Curb Exchange
New
New York 5
31 Nassau Street
Telephone COrtlandt
Bell
ply of groceries with our
but
Is
people
cannot
eat
freedom.
The
going
was
NY 1-1548
System Teletype
strong in 1932,
but 15 million
Chase
Stuart
freedom' with
why not.
...
v
, .
freedom.
I do not know
possible?
.
;
•
*•-
•
*
•
Jewish
M.
"•■■■/
.
&
Common
Preferred
Bell
Teletype NY
1-1843
speech in Salt
Lake City.
A
Detroit International Bridge Co.
snowdrift
Memphis St. Ry. Co., Pfd.
near
Nu-Eiramef Corp.
lecture
Chase heard
Common
&
U. S. Finishing
pinch
Preferred
Co., 7's, Pfd.
s
h
o u
done
the
SreeoecrndGompaTiu
Members
N.
Y.
Security Dealers Assn.
37 Wall
Bell
St.„ N. Y. 5
Teletypes—NY
New
on
e
n
James
L.
Wick
In
the opinion
in
the
of
the
2049).
"Chronicle"
'
'
(Continued
office
B
the
'
2150)
~
I
25 Broad
St., New York 4, N. Y.
HAnover 2-0600
Tele. NY 1-210
in
.
"°.
Convertible
..
District
reorganization
^
Court
of
in
the
208
South
La Salle Street Building
Corporation and served in a simi¬
lar capacity in the reorganization
of the Chicago-and West Towns;
Railway.
He is a director of the
Pere
Marquette Railway Com¬
pany.
Wires, to
Detroit
-
Buffalo
-
Newell Knight With
-
63 Wall Street, New York 5,
WHitehall 3-7253
F
"
N. Y.
,
Direct Wires to Philadelphia 81 Los Angeles
American Water Wks. & Elec.
1975
F
:
6s,
Mercanfile-Commerce
ST. LOUIS, MO. — William P.
Sharpe, Vice-President of The
Mercantile-Commerce
Bank
Company, Locust-Eighth-St.
Charles, announces that Newell S.
Knight has been appointed man¬
of the
ager
Mr.
bank's; bond
Knight
was
4s, 1948'
-
;;t
Chicago, in charge of the
-
5y25, 1951
Provident Loan
Society of N. Y.;
Certificates
j
/
.
Tyler Building (N.Y.)
•
depart¬
formerly
associated with Barcus, Kindred &
in
-
Eastern Minnesota Power
and
Trust"
ment.
1946 "
East Coast Public Service
6s,
1953
.
>
ic H. Hatch & Co.
1
Incorporated
63 Wall Street
Bell
'
New York 5, N. Y.
Teletype NY 1-897
Pittsburgh Rys. All Issues
.
«■
•
.
t
1969
.
H
v
■
•
:
Pgh.Term.Whse.&Tnsfr. 5s
Fashion Park, 5s,
1963
Henry Holt Common
Hotels Statler
WM.J. MERICKA 6- CO.
Memphis Str. Rys. Pfd
i
Jonas & Naumhurg
Members
Cleveland Stock
Union Commerce Bldg.,
•
Exchange
Cleveland
.
T. J. FEIBLEMAN &
Members
.>
•>
29
Broadway, New York 0
WHitehall 4-3640
Direct Private
Trading Markets •
Information •
0
Cleveland 14
HA 2-2400
St. Louis
Members New York Stock Exchange
5s,
.'
1-376-377
Pittsburgh
BUCKLEY BROTHERS
.
Community Water Service
Deb. 5',
Security. Dealers Ass'n
Teletype NY
Bought—Sold—Quoted
reorganization adviser to the
Preferred
Trinity Place, N. Y. 6
Private
Bonds and C. D.'s
the in¬
to
career
Telephone MAin 8500
74
YORK 5
NEW
HAnover 2-9470
5s, 1931
trustee of the In¬
Light Corp. since
INCORPORATED
N.Y.
York Curb- Exchange
ST.
Seaboard Air Line
the
sons-Taft Co. for many years. He
was
Common
■
Members
WALL
trading department.
Troster,Curne&Summers
Members New York Stock Exchange
a
&
business
for circular
Simons, Unburn & Co.
Members New
64
Teletype NY 1-1140
banking business, hav¬
ing been Vice-President of Pear-
Co.
on page
'51
Frank C. Masterson & Co.
vestment
MOXIE CO.
will be
Berkeley Carteret
\'V'
HENRY HOLT
industry, the demand
Write
of'his
of authorities
Request
issue
18
unparalleled.
1961
WHitehall 4-4970
appeared in the May
subject
for men's cdothing during
Teletype NY 1-609
and his remarks on this
taxation
t
demobilization period
G.A.Saxton&Co.,Inc.
70 PINE ST., N. Y. 5
m
In this same speech
post-war
Mr. Wick also spoke on
FASHION PARK, Inc.
4l/2s, due 1953
Memorandum
May;2; 1944.
end
to
speech
before the
Wick
Mr*
Midwestern
.
take a gigantic
spending program to increase con-
Company
Debentures 5s due
hitter
what
1 d,
b e
depres¬
n
needs!"
Conference
of
the
Controllers Institute of
America
at
St.
Louis, Mo.- on
should under¬
Hanover 2-4850
1-1129 & 1127
Associated Electric
Debenture
r
the
extemporaneous ;
by
Seventh
sion: the gove
Just what the country
made
a
-
telling
r
*An
hall,
.
that
the
Reaching
Standard Coated Products
it!
train.
his
Preferreds
Chase
well that
Tugwell was entranced,, took its
proponent to the President whose
reaction was to exclaim: "That's
Ogden held up
England Public Service
so
Tugwell
Rex
spending" advocate- was coming to,
Washington.
Hearing the idea,
to make a
was
wired
he
Chase
dent,
presentation
liked the
became Presi¬
New
other
purchasing power.
sumer
Roosevelt
Mr.
ftwyer,
Power
the
<♦>-
after
National
5»/2s,
Chicago
United, States
Analyzed.
day, Stuart Chase vouched
Soon
Great Amer. Industries
November, 1940, has devoted most
Washington "Newsletter" Pre¬
Franklin told me this story several years ago; the
for its accuracy.
>
I;:FFF':$
Jay
New York 5
Telephone: WHitehall 3-1223
Bridge
Common, 6V2S & 7s
headquarters in Cleveland,
Vice-President, it is announced.
Mr.
Objections To Plans And Principles Announced By
Stuart Chase, Alvin H. Hansen And Abba Lerner. Seven
H. G. BRUNS & CO.
■
Mr. Dwyer will be located in the
land
Separate Questions Presented And
Detroit Inff
«.
Hospital.
J. E. Buyer Appointed
Otis £ Co. Officer*
as
sents
20 Pine Street,
«the
A
with
Mo., on May 1, 1944.
(Continued on page 2158).
St. Louis,
By JAMES L. WICK*
Editor Of Prentice-Hall's
York
CHICAGO,
ILL. — John
E.
address
delivered by Mr., Chase before the Dwyer has become associated with
Otis & Co., investment bankers
Controllers Institute of America,
Can We Spend
Struthers Wells
the
Fund, Catholic
Charities, and
Holmes
company's
Common
the
New
William
•„
American Red
Field Building.
American Gas & Pr.
in
of
"An " extemporaneous
Americans were out of work, and
WHitehall 4-8120
System Teletype NY 1-1919
our
groceries, and a dependable sup¬
this
Broadway
Bell
been
Cross,, Greater
-'J--''/''
We want some
has
work
one.
racks..
Members New York Curb Exchange
65
Avenue
active
parachutes^
decent living
every
Members New York Stock Exchange ':
Assoc iation
and
out of high
ground.
Free speech
comes first,
Bill* of Rights
T-4070
for
standards
of
Curb
Y.
N.
y
lot
a
covers
>
c
Edward A. Pureed & Co.
of
a
V'
'V-''
\
Mr.
is
•
'
Director of the
Fifth
brokers and.
Most
Americans would not want to take
when
you
the finest living standards handed
come to think
about
it; -out of a government warehouse,
"Free
speech any more than they would want to
live permanently ,,in
and groceries"
army bar¬
a
r
c
of
Board
Trustees.
-
demo
member
a
Bayway Terminal
Manager
Bonwit
of
imply
Groceries
f
o
sky was full of
who bailed
bankers
Du Mont Laboratories
Holmes, Presi¬
distinguished gentlemari from Texas was asked what he wanted
war. He thought a moment, and then said: "Free speech and
1-1227
Y.
Teletype N.
'
dent and Gen¬
after the
WOrth 2-4230
Pfds.
7%
&
Emerson; Radio
Sav¬
■'■VOf, William M.
Achieving Full Employ¬
ment, He Advocates Adoption Of A "Compensatory
Economy," Under Which "Business Men Largely Own
And Operate The Means Of Production, But Govern¬
ment Underwrites Full Employment"
:
^;
Schenectady Rwy., Com.
Members Baltimore
Industrial
Emigrant
ings Bahk announces the election
After Considering Plans For
Mayflower Hotel, Common
0%
:
The
4's, 1991 & Common
La France Indus.,
STUART CHASE*
By
'V'v
Axton-Fisher Tob., "R"
Ft. Dodge, Des
England Pub. Serv.
Plain
Wire to Cleveland
New
CO.
Orleans Stock Exchange
41 Broad Street
BOwling Green 9-4433
New York 4
Tele. NY 1-493
.Volume *159
v
■
Number 4284
■
'
.
1
.
»
.
THE 'COMMERCIAL & FINANCIAL CHRONICLE
2139
,
Thi COMMERCIAL and
FINANCIAL
William
»!
y
B.
Dana
BEekman
3-3341
j
'■
'
Editor and Publisher
'
-William
William
:
Dana
D.
Seibert,
[,
Warner
Published twice
j,!;!';;.!**
;
and
news
'
Other
Offices:
week
S.
La
Cuba Railroad
1
Salle
-
STRAUSS BROS.
32
St.,
CHICAGO 4
DIgby 4-8640
Teletype NY 1-832. 834
Harrison
.
-V
2078'
Dana
as
MORTGAGE
1879.':;'yty!):;
PARTICIPATIONS
r
Subscriptions in United States and
possessions,, $26.00 per year; in Dominion
of Canada, $27.50 per year; South and
Central America,
Spain,
Mexico and
Cuba, $29.50 per year; Great Britain,
Continental Europe (except Spain), Asia,
issued by
v
.
Ejaters And Public Opinion v Poll-Catchers^ To Change
;
Chase National Bank
City Bank Farmers Trust Co.
Or Enforce A Statistical Standard For
i
;
,
BOUGHT
Complete
yr.
^ewburger, Loeb&Co.
! NOTE—On account of the fluctuations
In the rate of exchange, remittances for
1
Members New
foreign subscriptions and advertisements
140 Wall St., N.Y.
must be made in New.York
I
V
Bell
York
Stock
Exchange
WHiteball4-6330
5
Teletype
NY. 1-2033
SEC To Set Hearing
Date Oft NASD 5% Rule
j
offices of the Securities and
Exchange Commission in Philadelphia by appointment to
Ascertain what action the Commission intended taking iin
connection with the formal petition filed by the Committee
on
May 2. This petition applied for the abrogation of the
NASD 5 % spread rule.
QUOTED
■
Statistical
Information
J-GOLDWATERSCO:
Members New York Security Dealers Assn.
.
39
Broadway-.
■■■
New York 6r N. Y»
HAnover 2-8970
In,the. opening of the 28th Annual' Meeting of the National In¬
dustrial Conference Board at the Waldorf-Astoria Hotel, in New
York City on®
;
:
May 18, Virgil The address made by Mr. Jordan,
Jordan, its who presided at the meeting, fol¬
-V
President, ex¬ lows in full;
In a broad sense it would be
pressed strong
opposition to true to say that in all the 261
the mew phil- meetings of the Conference Board
o sophies
during the 28 years since it began
its work before the last preceding
.which
con¬
World War
demn- Ameri¬
Teletype NY 1-1203
Majestic Radio
& Television
Allen Du Mont
Laboratories
Loft Candy
have been discuss¬
we
'aspect 'or5 another of the
problems ol
past r e c o r d opportunities and
and which employment, before, during, after
business
ca's
m a
k
ing
one
between
and
e
a
d
i
c
1
a
Circulars
Request
on
talked
We
wars.
about the same
things a year ago,
ehanges in our in this same place, under the im¬
economic and posing title of post-war recon¬
social
struc¬ struction,
and in the monthly
ture to bring meetings since we have examined
about full em- one by one the more important
Dr. Virgil Jordan
ployment and elements in the enigma of post¬
a guarantee of war
employment—inflation, cap;(Continued on page 2148) - ?
economic,! security to* ~everyone.
r
J.E.Reilly&Co.
Members
New
York
Security
Assn.
Dealers
Ill Broadway^ New York, N. Y.
REctor 2-5288
Bell System Teletype, N. Y.
1-2480
TRACING MARKETS
.
When interviewed, the attorneys
for the Committee said
they had conferred with James A. Treanor, Director, Trad¬
ing and; Exchange Division.
They took the position that
By RAGNAR B. NAESS*
since the petition was filed more than 20 days, ago the Com¬
mission has had ample time to act upon it.
r Investment Counselor Feels It Inadvisable To Count On
•
SOLD
;
would
I
Before going to press lasfrnight we learned that Messrs.
A. M. Metz and Edward A. Kole, attorneys for the Securities
Dealers Committee, visited the
Employment."
-
'
Irving Trust Co;
Bank and Quotation Record—Mth. $20 yr.
funds.-.
get
CERTIFICATES
Freedom—No One Can Fix A National Income Figure
Central Hanover Bank & Trust Co.;
■
Monthly Earnings Record—Mth.. .$20
to
us
TITLE COMPANY
.
$31.00 per year.
Other Publications
^
America's Business Record
r-«*
Industrial System-*-Holds Government Guarantee Of
Economic Security Means Loss Of "Every Individual
A
tiuaranty Trust Co.
•
..
on
Telephone: WHitehall 4-6551
a
Efforts | Of "Political Word-Changers, Academic Cake-
second-class matter Feb¬
Australia and Africa,
/
J
esident Of The Industrial Conference Boafd;Condemns
We Buy
Company
ruary 25, 1942, at the post office at New
York, N. Y., under the Act of March
8.
bank
;
'
Reentered
Members New Yprk Stock Exchange
-"
Teletype CG 129
(■.. /Vt-;-,/: ; ;
by William B.
in a
stock?
Obsolete Securities Dept.
Virgil Joidaii Defends ^
Board of Trade Bldg.
Btoadway
NEW YORK 4
Representative; 1 Drapers' Gar¬
London, E. C., England, c/o Ed¬
wards & Smith..
just
mine
completely snowed-
WALL STREET, NEW YORK
99
Teletype NY 1-S
^
ride"
Arizona
be
out!
25 Broad-Street,' New York \
.
^
;
Members kew York Security Dealers* Ass'n
Westerri
Copyright 1944
-'fr '■
"sleigh
a
or
^
Chicago 3, 111. (Telephone: State 0613),
dens,
under
>
Telephone HAnover 2-4300
for
need) to
you
Monday
135
&
ncef
advertising' issue)
and every
Taken
Mexican
'I-.,.Jit
.
No
"
(complete statistical issue-—market quo-i
tation
records,
corporation,
banking,
Clearings, state md city news, 'etc.)
;
3
;
every Thursday
(general
X
a
Sugar
Manager
Thursday, May 25, 1944
V
MEXICAN
SLEIGH RIDE
PREFERRED STOCKS
I,
President
Riggs, Business
AND COMPANY
Public Utility and Industrial
.
;
B.S.
v
High Grade
;
n
>■
Herbert D. Seibert,
.•
interetfetfmo^^^
are
Alegre Sugar
;!
Company
Publishers
«
:
Punta
Patent Office
25 Spruce Street, New York 8
■
,
CHRONICLE
Reg; TJ. S,
v'
Bartg is Bros.
Post-War Outlook For Securities
Federal Screw Work
Megoweit Educator
.
Mr.
s
Treanor*gave
assurances
Food
that the Commission would Post-War National Income Exceeding $90 to $95 Billions
I
—Lower Post-War Prices With Stocks Selling As High
be advised of the views of counsel for the Committee.
There
will be set
likelihood that
for public hearings.
now
seems
every
an
early date Arid Somewhat Higher Than
My assignment
ties."'
with
bands
f NASD Inquisition Is On Again
Questionnaire Rampage In Full Swing
particular
phasis
c
o
stocks.
;
on
Association of Securities Dealers
News," the National
announces
that its "exam¬
ination
program" got under way last month with the mail¬
ing of transaction schedules to over 600 members and* that
at intervals during the next Several months the schedules
on-;
"Post¬
will be mailed to other members until all have been covered.
define.
The transition
from
to.
will be
gradual and
.
war.
will
i of this deferred demand will not
peace
when; all
—
—
merge into peace.
I
"post-war" to mean the
period after conversion when in¬
dustry will be stimulated ab¬
normally by a
large deferred
demand for many products not
now available.
In this definition,
I
am
making
one
important
i assumption — that a large part
is more
di f ficu It
to
<£_
take
111
war"
In the current issue of the "NASD
Securi-
stocks arid high-grade
common
War
em-
m
m
mean
...
satisfied while
be
in¬
Request
on
Now Probable
is, to talk about the "Post-War Outlook for
"Securities" I take to
Memoranda
It
war,
is
we
are
possible
MIOB,
lib Broadway
Bell System
V
ii"
,
r
COrtlandt 7-6190
Teletype NY 1-84
'
„
*1
MM
I,
' '
'
SUGAR
SECURITIES
still at
this
that
'
Says, the NASD News:
•
;
*
again
"The examination program
;
this year will be con- V
ducted along the same lines as that carried out in 1943."
v
;\V
:
The
implication is clear that this snooping plan is
intended to be a yearly affair, with annual questionnaires. \
■
FURTHER ON, IN AN ARTICLE ENTITLED
DISCIPLINARY
BERS
UPHELD
TION
OF
STAKE
IMPAIR
by Mr. Naess
Cumniings before the
Securities and Capital Markets
Division of the N. Y. Chapter of
the American Statistical Associa¬
a
on
of Naess &
been
tion
.
con¬
verted
some
for
Ragnar Naess
(Continued
"NASD
Panama
on page
Broad St., New
York 4, N. Y.
Tel. WHitehall 3-0272
;
2145)
OF
ITS
Coca-Cola Bot. of Los
AUXILLIARY
True, the SEC
*Circulars
;;
;
-
;
on
WRITTEN
Request
C. E. Unterberg & Co.
may,
(Continued
on page
2143)
& Trust Co.*
First quarter analysis
available on request
Wyeth &Ca
and from time to time does, examine
the books of securities dealers.
By upholding the "fight"
of NASD to go on "fishing expeditions,", the SEC, as to a
large segment of dealers throughout the country, is relieved
Public National Bank
Angeles
*
THESE BUDDIES FRATERNIZE IN THE
SAME PRECINCT.
American Cable & Radio
Warrants
WHY WOULDN'T IT BE SO
EFFICIENCY
Coca-Cola Bottling*
Coca-Cola Bottling Co. of N. Y.*
SINCE TEfE SEC HAS A DEFINITE
CAN IT BE EXPECTED THAT THE SEC WILE
POLICEMAN?
Members New York Security Dealers Assn.
25
May 24, 1944, at the Hotel
on
Sheraton, New York City.
time.
DUN NE & CO.
POWER,? RIGHT TO EXAMINE MEM¬
IN THAT ISSUE,
THE
An address made
basis,
m a n y indusT
trie? will al¬
ready
have
peace;
BY SEC," THE NATIONAL ASSOCIA¬
SECURITIES DEALERS REPORTS ON THE
GLEASON CASE.
UPHELD?
is
dustry
NEW YORK 5
t
40 Wall St.
■Members Los
LOS ANGELES U
,
647 So. Spring St.
Angeles Stock
Exchange*'
HoeRqseSTbqster
-
74
Established
1914
;
Trinity Place, New York 6, N. Y.
Members New York Security Dealers Assn.
61
Broadway, New York 6, N. Y.
Telephone BOwling Green 9-3565
Teletype NY 1-1666
2140
Thursday, May 25, 1944
EZNANCIAL CHRONICLE
THE COMMERCIAL. j&
'
.T^1?-pOSTON, MASS,
•
Botany Worsted
Stock in
A Low-Priced
an
Industry
With ''a Bright Future
Giant-Portland Cement
Warner Swazey
iVij stock:2-2%^;;iS
J-ijjv/^Arrears' Ctfs. 17 M -18'% ;:
Available-—Send for Copies
Circular
& 7% Pfd.
N. E. Pub. Serv. 6%
"LERNER & CO.:
Steel
Wickwire Spencer
Moxie Com. & Pfd.
L F.Reilly&Go.
v
Pollak Manufacturing }
BOSTON
Axton-Fisher "B"
,
'
INVESTMENT BANKERS
v.,
-
-
CREctor 2-5288.
..ti.'V* W)
Bell System Teletype. NX 1-2480
.
Bought
'
MEMBERS
■
Nu-Enamel
OTHER
Liberty Aircraft
Hearst Pfd.
-
...
Whelan
United Cigar
BONDS, STOCKS,
.v.-;
TELETYPE
r
AT-188
•
'
^
r
Horn. Office ATLANTA
;
;
TELEPHONE.
•
LO-V59.
APPROXIMATE
it Circular
Dallas Ry. &
All Texas
Check
INDUSTRIALS
Arden
Merchants Distilling*
/
Publishers of
■
120 Broadway, New
Telephone—COrtlandt
Teletype—NY
Industries*
Spin.
i
&
Bird
Sugar
Douglas
»
Com. & Pfd.
Shoe,
Bendix Home Appliances
Commercial Mackay, Bds. & Wrnts.
Tokheim Oil
Tank & Pump
*:
J.
AIRLINES
Chicago
Mid-Continent
National
An
^
'
Airlines*
Airlines
former
V
Washington Gas &.E1. 6s, 1960
Illinois Power Div. Arr. and Com.
Light & Power
Conn.
Queensboro Gas & Elec. Pfd.
Puget Sound Pr. & Lt.
Int'l Hydro Elec. 6s, 1944
Mass. Power & Lt. $2 Pfd.*
United Lt. & Rys. W. I.
Scranton Springbrook Water
s o
peace
1
nance
and
other
war
apparently
s—
look ing
e m
for
ployment.
number
be,
it
tain
p r o
Pfd.
nent
Emerson Radio
the
b 1
em
a
of
im¬
International Detrola
Majestic Radio & Tel.*
Magnavox Corp.*
for
employ¬
will be
nation.
General Instrument*
•
AT OUR EXPENSE
Request
WMSHKm
post-war
always available on
m*
Members N. Y. Security Dealers Assn.
broadway, new york 5
Direct
NY 1-1288!
Wires
to
BOSTON—HARTFORD—PHILA.
;
Common Stock
.
Memorandum
Dave
Beck
'■/
/■
poll
Only a few months ago a
management, conducted by
"Fortune" m a g a zine, disclosed
that over 70% of our top flight
business leaders felt that the end
of
the
war
will • automatically
bring a general boom, with full
employment,- and an expansion
to the workers
It is
a
;
^
Request
BOENNING & CO.
•
PH 30
Private Phone to n.
Bank of America
-
St., Philadelphia 3
Pennypacker 8200
y. C.
VCOrtlandt 7-1202
H.R. BAKER & CO.
Russ
S. F.
Los
Angeles
L.
196
ST. LOUIS
Spring St.
650 So.
Bldg.,
San Francisco
A.
42
':'
of this counrty.
truism to assert that the
workers' greatest need is
full op¬
portunity for employment; unfor¬
tunately, the full- force~v of that
truism is not always apparent or
appreciated,
themselves.
on
*
- „y
current report on
SAN
•
even - by
workers
For- the worker it is
FRANCISCO,
^
.
Clifton W. Morrill, Manager
Morrill, a graduate of Stan¬
University, has been identi¬
with the investment business
Mr.
ford
fied
in
San
Francisco for
the past
tivities
the
of
Central
and
Baker
&
Co.
firm
in
offices
17
cities of California and Nevada.
<*•, ">
'
~*~r
r:
V
LOUIS 1, MO.
Bell System Teletype SL 80
Members St. Louis Stock Exchange
R. W. Reward Partner
Northern
in
California. ' H. .R.
have
SOS OLIVE STREET
ST.
16
In his new position he will
assist the supervision of sales ac¬
years.
"
'
/
* ■'"v .'J' >'
In John G.
Hopkins Go.
PHILADELPHIA, PA.—The in¬
vestment firm of John G. Hopkins
& ' Co., -123 South Broad Street,
loss of N. Y. Trust Co. Interesting
dealers in Pennsylvania tax-free
rather than a lessening of produc¬ livelihood; it is a question of the
securities and general market mu¬
-Laird,'
Bissell&-Meeds,■}
120
tion.- It is somewhat-dishearten- irreparable loss <5f dignity -and
nicipal/.'bonds, 'announces
that
self-respect which comes. from Broadway, New York City, mem¬ Richard W. Heward has been ad¬
bers of the New York Stock Ex¬
*An address delivered at the sustenance on the dole which, in
mitted to th,e firm as a general
change, have prepared an inter¬
General Session of the 28th An¬ the past, has been the principal
bulletin " discussing - the partner., Mr. Heward, who has
answer of our society to the prob¬ esting
been associated with Boenning &
nual Meeting of the National In¬
lem;' From the union point' of current situation in New York
Trust Co.
dustrial Conference Board at the
Copies of this bulletin Co., Philadelphia, for a number of
view, unemployment has, of
years, is a specialist. in tax-free
Waldorf-Astoria Hotel on May 18, course, a direct and inevitable ef- may be had from Laird, Bissell &
corporate" bonds and stocks. '
(Continued on page 2162)
' ' Meeds upon «request.".' ;
1944.
not
only a question of'a
.
120
REctor 2-8700
tat*-
SECURITIES
Send for our
-
sst
i
£
em¬
war
of
PHONE OR WIRE ORDERS
.'
of
tions with a deep and abiding ap¬
workers, preciation of the very fundamen¬
the No. 1 problem of the tal
importance of job oportunities
•
MARKETS
and
-
PACIFIC COAST
and
displaced
the
FRANCISCO
CALIF. —
of the
adequate treatment of it" could trading department of H. R. Baker
& Co., Russ Building, for the past
possibly be made in the time per¬
mitted this evening, As a. repre¬ two years, has .been appointed As¬
sentative of labor, I offer sugges¬ sistant Sales Manager of the firm.
perma¬
vicemen
subject
ployment opportunities and prob¬
lems is, of course, ;an extremely
broad and complex one, and no
nd
ment, for the
returning ser¬
Du Mont Lab. "A"*.
The
,
study of
nual Meeting.
is cer¬
that
.
at this its 28th An¬
the problem
may
find ing
then
Stromberg Carlson
-
as
has undertaken a serious
the
Whatever
PH 265
464
SU
1606 Walnut
complacent about
future conditions or as unmindful
of the problem of maintaining full
employment as this poll indicates
might be the fact. I am therefore
greatly encouraged to see that "as
highly a representative business
group as is this Conference Board
mediate
on
TELETYPE
-
placed air¬
craft, shipbuilding, ord-
—
n. y. WH 3-7253
gjjA GAS
and the return to
ing to find that businessmen are
Philadelphia 2, Pa.
Lak| City it, utah
SYSTEM
CURRENT INFORMATION
million individuals—
diers and dis-
worker
Peoples Light & Power Pfd.
American Utilities Service Pfd.
Cons. Elec. & Gas Pfd.
Iowa Southern Util. Com.
.Nassau & Suffolk Ltg. Pfd.
*Circular
of
St.,
Bell Teletype
FEDERAL WATER
Accomplished Fact.
conditions of 1939 will find from ten to twenty
;
Airlines
Northeast
1529 Walnut
Main street
SAN
/V-
It has been estimated that the coming
& Southern Airlines
Airlines
Inland
Salt
Employment And Advocates Gov¬
ernment Maintaining Our Gross National Incopie At 165
Billion Dollars By Altering Its Spending And Taxing
Pplicies Every Three Months If Need Be To Make This
Export Airlines*
American
160
BELL
The Answer To Full
Co.
: y-
Philadelphia Stock Exchange
Phila. RIT 4488
West Coast Labor Leader Sees Federal Fiscal Policies
Son
Maryland Casualty
Purolator
k
Members New York Stock Exchange '
Vy. :
ESTABLISHED 1899
i(
:r '
•
By DAVE BECK*
Petroleum Heat & Power
request
BUCKLEY BROTHERS
8c COMPANY
Opportunities And Problems
Drill "A" & "B"
Camaguey
•
EDWARD L. BURTON
;
Enamel
Vertientes
Memo on
1-2312
Posi-War Employment
ISSUES
Telephone
Common
Members
'
Fine
,
UTAH-IDAHO SUGAR
York, N. Y.
7-4550
t
-
Analyses Upon Request
American
maintain markets in:
We
AMALGAMATED^SUGAR
TRACTION
Berkshire
San Antonio
-
Western Light &
Specializing in
CHICAGO
Great
"
PHILADELPHIA
SALT LAKE CITY
J. W. Gould & Co. :§:M
Remington Arms
Corporation
Magazine Repeating Razor
61
Broadway 3%s & 5s, 1950
United
•
.
; V -
Eastern
Nu
Houston
York 6, N. Y.
\
.
Railway Age, American Builder, Marine Engineering
'■'■/v.'
Sugar
Punta
.
PRICE TO YIELD 8.80%
Guarantee
Title
Alegre
I Auto Car
I
AT
and Pfd.
Triumph Explosives
IBrockway
Motor*& Trust
1
74 Trinity Place, New
$3.00 CUMULATIVE PREFERENCE
CURRENTLY AVAILABLE
Long Candy
Bell Lumber*
I Loft
Botany Worsted "A"
Southwestern Securities *
on
Established 1914
Co.
Farms
us
DALLAS, TEXAS
r
I
Terminal 6% 1951
Utility Preferred Stocks
RAUSCHER, PIERCE & CO.
Derby Gas & Electric
Consolidated Dearborn
1
f
PRICES
SELLING
WRITTEN request'
on
-
i1-. Republic. Insurance -' v • i
So'western Pub. Serv. Com. & Pfd.
Preferred 14—-Common 5
r
Quoted
—
Southern Union Gas Common
■
vUr.?/;r. 1943 EARNINGS.^/V/;,
Preferred—-$8.56, per share
Common— 2.26 ' " '
t
...
Com. & Bonds
Gas & Power & Wrnts.
;
•'■•••
:'
COMMODITIES
Vicana Sugar
Amer.
Butterick Co. Inc.
;/••':? *~vvV-
.
..
•
Sold
—
Dr. Pepper
DISTRIBUTORS OF
INVESTMENT SECURITIES
•
BROKERS OF
Southwest Pub. Serv.
EXCHANGE AND
EXCHANGES
LEADING
UNDERWRITERS AND
.
Public Util. &/%$
Cent.
NEW YORK STOCK
Teletype BS 69
f : .-
DALLAS
■
Mallory*
P. R.
Polaroid
';
Tel. HUB: 1990
Dealers Atsn.
Broadway, New York, N, Y.
Ill
Crowell Collier Pub.*
York Security
New
Consolidated Textile & Bonds
SQUARE
9, MASS.
OFFICE
POST
10
Members
jwI^M
Volume
■>.,
m**-1 wwrn
■«
i'tW
*
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4284
159
'i
2141
'
Trading Markets in
'
Bank & Insurance Stocks
Brown
Company \
Bulolo Gold
We
Industrial Issues
are
pleased to
that
announce
John E. Dwyer
'
,
,
Mr.
Dredging
Crows Nest Pass Coal
i
Electrolux
*
!
i
,'
International Utilities
Investment Trust Shares
4
has become associated with
**!
,
',
Corporation J
Corp.
us as
Minnesota & Ontario Paper
Vice President
Public Utilities
Mr.
Noranda Mines
Dwyer will be located in
Steep Rock Iron Mines, Ltd.
our
Sun Life Assurance
«
Chicago Office
Railroad Bonds
;
%«•
: v: 135 S.'LaSaile Street; ;
Montreal
(Incorporated)
Established
Toronto
American Cyanamid, Pfd.
1899
COrtlandt 7-9400 -TWX-NY 1-1950
BOSTON
HAnover 2-0980
St., N. Y. 5
New York
OTIS & CO.
New York 5
Broadway
WILLIAM
Bell Teletype NY 1-395
Telephone Central 7400
J. Arthur Warner & Co.
120
HART SMITH & CO.
;
■
52
Y
Real Estate Issues
\
Ohio Match
CLEVELAND
PHILADELPHIA
May 19, 1944
HARTFORD
Lawyers Mortgage Corporation, Com.
Petroleum Heat & Power
A National
SUGAR SECURITIES
Policy To Attract
Universal Match
-
,
Prospect of Large Post-War
Eitingon-Schild Co. Inc.
Sugar Demand
*
Frederic H. Hatch & Co.
Quotations Upon Request
Incorporated
Vice-President, First National Bank, New York
63 Wall
TEL. HANOVER 2-9612
Says Loss Of Investors' Confidence In Rails Not Due To
Excessive Fixed Charges But To "Erosion Of Net In¬
come" Due To Higher Ratio Of Operating Costs—Advo¬
cates Higher Rates, Better Wage Adjustments, And Ade¬
k
-
^
:
Favorable Current Earnings
($1.50 Cum. Conv. Class A Pfd.)
Private Investment In Railroads
By HENRY S. STURGIS*
Tokheim Oil Tank & Pump Co.
We
principals—Brokers viay trade
for our account.
are
V.;,-
FARR
S. R. Melven & Co.
)
quate Provisions For Depreciation And Obsolescence—
^Suggests "Regional Monopolies" System For Railroads
York
New York
:;j;V
6,
Coffee & Sugar Exchange
Specialists in Sugar «£ Sugar Securities
N. Y.
120 WALL
Telephone WHitehall 4-7544
-k
N. Y.
1-897
CO.
&
Members New York Stock Exchange
2 RECTOR STREET
New
...
New York 5,
Teletype NY
Teletype N. Y. 1-2123
'
.
Street
Bell
ST., NEW YORK 5
:
WE BUY r
;lif" BONDS;///;//
WITH
V;
The subject I have been asked to discuss is the national policy
'which must be adopted in order to attract private capital. Dean Van-
f
derbilt did not$>
say
whether
this discussion;
should
cover:
.
railroads
the
alone
the
or
transportation
industry as a
whole. I pro¬
because
pf my greater
pose,
fa
.
m
iliarity
with railroads,
and
because
-
credit
their
situation
has
at a'low
been
ebb, to deal
mainly with
that industry.
I
S. Sturgis
Henry
/
so
be¬
after all, the same credit
principles Which govern the rail¬
roads will apply to all members
of the transportation industry.
The question as to what the nacause,
* '
)
f tional policy must be to gain the
desired result might be answered
4
in
♦
It must be a pol¬
sentence.
one
icy which will restore confidence
in railroad earning power.
-
v
'?■.
What, then, is necessary
•> f
'
False Economic Theory
■"
■
;
..*•
'•
r
■
,
i;
proceeding with con¬
structive suggestions to this end,
it seems to me necessary that we
accurately diagnose the
the loss of confidence.
cause
of
And
in
making our diagnosis it is essen¬
tial
to
*. false
sweep
one
of those
by
so
many
of
have been led astray
theories
which
,
aside
we
in the last several years.
,
It is probable that a very large
percentage of the people of the
country believe that the funda-
.
'
mental trouble with the railroads
-is too much debt and too large
burden
*
of fixed
a
interest charges.
An address made by
Mr. Stur-
-gils before the Institute of Trans-?
iportation at the Waldorf-Astoria
Hotel, New York City on May 24,
<
1944.
■
■
'
1
.
(Continued
on page
2160)
The
Security
Professor
Traders Associa¬
of Transportation,
J
1
Graduate School of Business
Administration, Harvard University
Thursday, May 25,
at 4:30 p. m. in the Board of Gov¬
ernors
Room of the New-York
Transportation Expert Holds That Each Kind Of Carrier
Curb
Exchange.
"Should Be Placed On Its Own Feet And Rise And Fall
According To Its Own Economy and Fitness." Advo¬
cates Fair Charges For Commercial Use Of Highways,
of this forum and will have
speaker Harold H. Young, util-i
ity analyst of Bear, Stearns & Co.;
will discuss important facts
Waterways And Airways So That Each Agency "Would
which
Among the five forms of transportation—railroads, highways, wa¬
terways, airways and pipe lines—the pipe line is the only one that
as
the
industry
utility
has:
sub¬
sidy from the
Stern, Frank & Meyer
State
ANGELES,
&
Street,
will
Meyer,
ment. In their
early
CAL.—Stern,
325 West 8th
members of
become
the New York Stock' Exchange as
1, with the acquisition by
Louis Meyer, Jr. of the Exchange
by sub¬
stantial
land
grants.
The
rearlier
years
little
for
,
of
public
ways
Wm.
J.
even
Cunningham
after
Ward &
Co., 120 Broadway, New
York City, have prepared circu¬
situations
several
& Co. upon
Mont
a
from
than
less
true -cost
Water
highway
their
Laboratories
now,
series
carriers
the
of
on
the
users
>.
I
•■!>••
:
V
'k
Board
rates
use
of waterways
heavy
ex-
set
the air mail
scale
a
Indiana Limestone 6s, 1952
before r the. Institute > of
Transportation at the. WaldorfA^toria, New York City^Mayi£3,
1944.
V-',
a
.
-2
k
Chicago, Aurora & Elgin RR.
6s,
V
1951
*Memorandum
request
on
1
F.H. K0LLER & COMPANY
it'iM INC
111
Broadway, New York 6, N. Y.
BArclay 7-0570
NY 1-1026
Thomas Price Joins
|
No
extended
railroads
such
since
on
were
aid
has
These
1871.
obli¬
the part of the favored
those paid
a
an
by the general public.
result the government, dur¬
ing the past 75 years, has saved in
transportation bill an amount
much greater than the value of
the land which the railroads
ceived
tend
as
their
pay
and
inducement
an
lines.
like the pipe
way
Thomas
lines,
taxes
are
on
The
own,
to
re¬
ex¬
railroads,
maintain
their rights of
harmfully
handi¬
E.
Arrowsmith
Price,
& Co.,
associated
now
grants carried with them
gation
Campbell, Phelps Go. !
any
development.
and
*An address -made by Dr. Cun¬
ningham
1
on
offset
been
its
made navigable
and maintained by very
l
shall
sufficiently high
deficit from the
transportation/of passengers and
to
highways.
improved
■:• > .oatooo
'
tics
As
share
waterways "are" subsidized
because they pay nothing for the
"A";
Act
made during their early period of
high¬
and
.
Great American Industries
of air transpor¬
Aeronautics
the
*v
♦.
*
provides that the Civil Aeronau¬
of
fair
MARKETS'—
aid to
paid
the
inland
Distilling;
CrowellCollier-Publishing; P. R. Mallory:
General
Instrument; Long Bell
Lumber- Co.; Great American In¬
dustries; Mid-Continent Airlines:
Massachusetts - Power & Light»$2
preferred;" Majestic 'Radio: Magnavox
Corp.; Brockway' Motors,
and American Export Airlines.
an
personnel
and
commodities
at
rates
substantially
lower
than
the
Merchants
Civil
As
railroads to transport government
are
TRADING
r-vf^^Bartgfis Bros.
pay¬
and reg¬
collections
request.
the
the
fees, they are enjoying
subsidy in some states where the
of increases in gas taxes
currently offer attractive possi¬
bilities, the firm believes. Copies
of these circulars, on the follow¬
ing issues, may be had from Ward
for air mail.
ments
in
air express.
The land grants to
istration
which
furthersubsidized
the development
use
Attractive Situations
expenditures in lighted airways,
meteorological service, radio
beams, and air fields. They are
tation
in
J. Stern.
Du
Teletype NY 1-955
subsidized
are
roads
were
funds. Air
by public
of public
penditures
carriers
developme n t
many
rail¬
motor carriers
firm, which holds
membership in the' Los Angeles
Stock Exchange, are Louis Meyer,
Jr., Lawrence P; Frank, and Her¬
on
of
days
aided
of June
lars
Fed¬
or
Govern¬
eral
To Be NYSE Members
man
St., New York 5, N. Y.
re-^
not
ceived
Frank
—
Pay Its Way, And Competitive Inequality Disappear."
might affect security values.
LOS
Wall
Dlgby 4-70(50
;krkv,.:
who
in
& Co.
on
Harry Arnold of Paine, Webbeif,
Jackson & Curtis, will be chair¬
man
Gude, Winmill
Members New York Stock Exchange
tion of New York will hold a Util-<
ity Forum
Coupons Missing
By WILLIAM J. CUNNINGHAM*
Partners of the
Before
•
To Be Held Today
'''
to re- membership of John T. Collins.
establish, that confidence?
,
STANY-Utility Forum
in
safe
feel
doing
Equalization Gf Goveinmenf
j
Subsidies To Transportation
formerly of
New York, is
with
Campbell,
Phelps & Co., Inc., 7.0 Pine Styee,!,
York City.
Arro/Wsmith &
New
Co. will be inactive for the dura¬
tion of the
smith,
has
a
war.
John
lieutenant
been
in
active
on
E. Arrow-
the
Navy,
in the
duty
Southwest Pacific for
over a
year.
W. E. Hutton Co. Opens
Branch In Portland, Me.
PORTLAND, ME.—W. E. Hut& Co., members of the New
Stock Exchange and other
leading Exchanges, has opened an
ton
.York
office
here
at
188
Middle
Street.
Edward L.
Robinson, formerly in
charge of Paul & Co., Inc.'s, local
office, will be resident manager.
Also joining W. E. Hutton & Co.-
capped in competition with other
in the Portland office is Robert G.
forms
of
transportation
which Wade, previously with Frederick
M. Swan & Co.
*
(Continued on page 2166)
,
''
1
■
.
'«•
<*
<■€'>
'i
■'''
f
'•
)• f r'•;sV
i!
».
I
i:•
1
THE COMMERCIAL & FINANCIAL
2142
The Progress
SPECIALISTS
'
J
MARKETS IN
TRADING
in
Since
01 Onr (HI Industry
\ 7'
lk
Members New York Curb
40 EXCHANGE
Bell Teletype
I
_
Members
4-4950
41
Incorporated
_
:
.
Association
York Security Dealers
New
Real Estate Securities
Interested In Buying
American Oil
v
'
U
I
.7
.
Or Advisable.
Stocks
for
Show Further
Members N. Y.
in
reporting on these 4% Non-Cumulative Income bonds with
stock last October, we called attention to the fact that the rent roll
had been increased through additional leases and predicted that
In
Security Dealers Ass'n
BROADWAY
NEW YORK 6, N.
Y.
larger interest distribution would be the result. Net
six months period ended Mar. 31, 1944 amounted to
■
WOrth 2-0510
We solicit your
2d Mtge.
offerings
or
3%-G% Income Bonds
States^ Shares
$53,478.19,
in
an
profits
there
are
owned
very
John
form
Brown
A.
of
bonds
pubLc
and
in
stocks.
all
Negotiation
classes
Claims,
of
and
in¬
ployers
as
to
achieve¬
exceptional
Unquestioned integrity. Wide¬
ly travelled. Fluent French, German;
good Spanish and Italian oral and
documentary.
University,
5
years.
Perfect
health,
full
vigor,
beyond
draft.
Willing discuss any proposal
in
confidence.
Could
locate
in al¬
ments.
decent city. Sound reason
for early availability.
Interview de¬
sired with principals
only.
Inquiry
and developments mutually confiden¬
most
any
tial.
Box B-18
Commercial
25
&
Financial
Chronicle
Spruce Street, New York 8, N. Y.
|
have
galleries and ceil¬
spacious
ings of extra height.
There is a
large solarium on the roof open
in summer and enclosed with vita
Entrances to
provided on all
glass in the winter.
the buildings are
three streets.
o
■
Shortly after the reorganization,
bondholders
in referendum
the
the placing of a
first mortgage loan upon, the prop¬
erty in the amount of $2,500,000,
which provided for' the payment
of a balance of $94,295.03 of re¬
vote
approved
organization expenses and a re¬
serve of $50,000 for first mortgage
charges and sufficient funds to
distribute $230 in cash as a prin-
TRADER SEEKS
The M. A. Hanna Co. has mailed
to holders of its
a
recently
service
abroad,
AVAILABLE
returned from
honorably dis¬
charged, with over twenty years'
experience
and country wide
acquaintance among dealers, de¬
sires permanent connection with
high grade
firm.
Thoroughly
conversant
with all phases of
Investment
and
Trading busi¬
ness.
Available
for
immediate
connection. Box M 20, Commer¬
cial
&
Financial
Chronicle,
25
Spruce Street, New York 8, N. Y.
SE0MTY ANALYST
Excellent
background,
includ¬
experience in an¬
alyses and write up of underwritings,
deals
and
general
market
issues, seeks
a
part
ing current
time
connection with
permanent
L
possibilities. Box
& Financial
Spruce
Street,
24, Commercial
Chronicle,
25
New York 8,
ultimate
N. Y.
$5 preferred stock
prospectus offering to exchange
amine with anxious care all sug¬
gestions
should
',
the
that
take
over
Government
some
of
subse¬
He
quently
w o r
k
e
d-
as
crippling its ability to im¬
.'products, lower costs and
New York, the National City Bank expand to meet growing demand.
of Cleveland or American Trust The regulatory powers of Govern¬
Co., San Francisco. The exchange ment have been vastly extended
posit their $5 shares for exchange
with
either Bankers
Trust Co.,
thus
offer
in recent years,
May
will
As
unless
3,1
shares
remain
are
all
open
of
through
the
taken before then.
new
,
r
but
100,000 new shares are
to be issued, only a portion of the
prove
examined to
and need to be re¬
see
extensions
these
whether
some
of
promote or re¬
people. An
tard the welfare of the
improvement in the organization
present 128,531, $5 shares can be of-American government could
greatly
to
national
accepted for exchange, and, as ex¬ contribute
public
utility
security anal¬
yst
for
the
Charles Tatham, Jr.
and
Co.
&
Bank
Central ; Hanover
Trust
Statistics, Inc.
Standard
In 1934 he became associated with
firm
the
of
Institutional
Utility
furnishes a
•detailed, operating and financial
service / covering
public
utility
companies, and of which he is
Inc.,
Service,
which
Vice-President.
He
became
a
member of the New York Society
of
its
Security Analysts shortly after
organization in 1937. :
i;
Other officers elected at the an¬
nual
meeting of
N. Leonard
clude
the Society in¬
Jarvis, of Pen-
ington, Colket & Co., as VicePresident;
Oscar M.
Miller, of
General American Investors Co.,
Inc., as Secretary; Lancaster M.
Greene,. of Lancaster" & Norvin
Greene, Inc., as Treasurer, and as
members of the Executive Commit¬
tee, Thatcher Jones, of Lehman
Bros.; E. Ralph Sterling, of Merrill
Lynch, Pierce, Fenner & Beane,
and
Wm.
Hamilton
Swartz,
of
Goodbody & Co.
It
the
$5 shares for shares of the newly- functions of business, or increase
authorized issue of $4.25 preferred its control over it, or have a pro¬
stock at the rate of one and one- prietary interest in it, or draw off
twentieth new shares for each old too much of our substance by ex¬
in peace timeshare.Holders are asked to de¬ cessive taxation
was
I,
-
announced at the annual
mefeting that the membership
of
the
Society has reached a new
high of 630 security analysts. The
three
luncheon I
usually having
as the principal speaker an execu¬
tive of a major corporation.
'
At the regular luncheon meet¬
ing scheduled for May 26, the So¬
ciety will hear Pierre R. Bretey,
Society
holds
forums each week,
.
of
Baker, Weeks & Harden, who
recent reorganization
will discuss
developments in Soo Line, West¬
Pacific,
ern
Rock
North
Western and
•>■.I'?■-
Island.
Attractive Situations
•
progress.
We
need
a
highly
Panama Coca-Cola Bottling and,.
trained, competent and well-paid
group
of * career
civil servants Coca-Cola Bottling Co. of New"
working under sensible laws and York offer interesting situations
change effective the company will holding their authority to the according to circulars being dis¬
call for redemption any of the minimum required for the public tributed by Hoi.t, Rose & Troster,
shares of the $5 cumulative pre¬ welfare. With such a truly mod¬ 74 Trinity Place, New York City,
ferred which are not deposited for ern government, modern business Copies of these circulars may be
exchange.
To provide a portion could work in harmony, reaching had from the firm on written re¬
in
plained
CONNECTION
Trader
ment counsel
firmofLoomis,
Sayles & Co.,
Inc., in 1928.
~
Company j
Hakes Exchange Offer
protection.
,
invest¬
ton
-
II. A, Manna
settlement
ence
with the Bos-
The
Industrial, Commercial
cluding supervision of litigation. High¬
est recommendations from former em¬
experi
public,
held by the Mutual Life Insurance
Co. and called for 41//2% interest
business
first
ral
the
&/or Financial Institutions
Surety
ginning
by
large
gene
be- f
his /
College,
numbers of
the
Harvard
and
(when
any)
are
Merle-Smith To
.
Tatham
in Switzerland
their
and
as" a whole, through the
tax laws
(of- which the Income
carryover and
of about $20,000
!.y
With or without Stock
Tax
Law
is but one) takes most
seasonable reduced steam expense; for the first five years, .4%% for
of
the
the
next
five
corporate income remaining
years and for amor¬
These facts augur well for a larger
interest distribution Dec. 1, 1944. tization payments of $50,000 per after payrolls, materials and ad¬
ministration costs are paid, and
annum.
AMOTT,
We still believe these securities
This mortgage, was funded by n requires voluminous reports from
Incorporated
are underpriced and for additional
new loan from the Aetna Life In-j management to public authorities.
information in reference to them,
150 Broadway, New York 7, N. Y.
The money finally distributed
surance Co. in August, 1940; this
we
Telephone BArclay 7-2360
reprint part of the article
to | creditors as interest: and to
Bell System Teletype NY 1-588
which appeared in this column last mortgage runs until Dec. 29, 1947*
calls for 4% interest and annual, stockholders as dividends is again
October.
amortization of $50,000; The corpo¬ in;.- substantial degree taken for
The
property owned by the ration has accelerated • amortiza¬
Dick &
;
the-public as a whole through the
corporation has a frontage of ap¬ tion
payments. The balance sheet income .tax. Much of it goes to
Admit"
proximately 204 feet on Central as at March
31, 1944, shows $2,n mutual insurance companies, edu¬
I
Dick & Merle-Smith, 30 Pine Park West, with depth of 177 V2 200,000 outstanding.,
'j cational institutions; hospitals and
: Street,
New York City, members feet on 71st Street and 224 feet
Provision is made in the trust socially valuable organizations.
I of the New York Stock.Exchange, on 72nd Street It is improved
indenture that the property jhay | Society pays an exceedingly low
j will admit Kate Fowler Merle- with a 30-story apartment build¬ be sold, but fur not less than $5,-1 cost In net percentage of sales or
j Smith to limited partnership in ing containing 1,403 rooms divided 000,000 unless 40% in ' principal
capital investment to ownership
t the firm as of June 1.
into 208 apartments in units of
amount of bonds dissent thereto or management of business enter¬
from -two to-12 rooms.
In addi¬
within 30 days after notice of sucl} prise. We are already collectivist
tion, there are ten offices.
The contemplated sale has been mailed to a large degree. A drift to full
apartments are both simplex and to
registered holders. In our opin-1 collectivism is sure to cost more.
To
duple# types. A special construc¬
ion,Ihe income bonds which carry We - would have limitless power
tion eliminates the usual .corner
100% of the stock of the owning over our lives and fortunes placed
columns or piers. This space, up
corporation are in a very excellent in the political sphere. We would
to the 19th story, is used for. glasshave less production to distribute.
Executive Available
equity-position. •/.*.'
enclosed porches, which can be
We would all have far less free¬
transformed in the summer into
To take full
responsibility for, and
dom than we now enjoy, if indeed
pharge of your Insurance Department,
open terraces. In the upper stories
we could have any freedom what¬
(including
supervision
of, and co¬
the "set backs" are so planned
operation with your
Broker and/or
ever, and our mental and spiritual
that large terrace- space is pro¬
Agency relations) and ancillary mat¬
life would wither., I
ters. Thirty years' experience in Fire,
vided for all apartments located
>V
Therefore it is our duty to ex¬
Ocean
Marine,
Fidelity,
Casualty,
on
these floors.
All apartments
|
11
educated
was
their debts
increase of
BAKER & CO.
Elect OStas. Tatham
Mr.
profit for the
months period.
which will have the benefit of the
Analysts
B
$24,786.25 over the $28,691.94 earned for the previous sixj
Interest is payable^
*—
'
—J
in multiples of 14%, the amount cipal reduction of each $1,000 in-j
distributable June 1, 1944, will be come bond, which now is out-t
Vz %, the unused portion of $15,- standing in the principal amount
" ''
;
'
.
'•¥
596.50, being only $3,344.35 short of $770.
The
original' first
mortgage
of a %% multiple, will be carried
forward into gross income for the placed upon the property in 193?,
succeeding
six
months
period, in the amount of $2,500,000 was
bids
r n
N. Y. Security
corporate en¬
Charles Tatham, Jr. has been
terprise.
elected President of the'New York ;
Corporations
Society of Security Analysts, Inc.,
exist by pub¬
succeeding Lucien O. Hooper, of
lic approval
W. E. Hutton
through
the
i '
n
if
f
& Co.
laws
of
our
Improvement
By JOHN WEST
H. TIPTON
CORP.
SECURITIES
privacy
mode
for
Six Months Earnings Through September Should
j
is
there
and
industry" or
complete freedom
lives
our
business,
or-
little
TUDOR CITY UNITS
inexactly. We say "private
enterprise," but we know there is no
AND
C.
,
Words express thoughts
"free private
I
Nec¬
Ample And No Hoarding Of Reserves
New York Majestic Interest Distribution
Increased As Predicted
I
ALL
FRED F. FRENCH
...
.
Gain Us Nothing." Sees
Yankee Imperialism And Would
HAnover 2-2100
Broad Street, New York 4
NY 1-953
essary
We Are
Accomplished Without Gov¬
Participation. Warns U. S. Government Opera¬
tion Of Foreign Fields Would "Raise Again Cry Of
ernment
Seligman, Lubetkin & Co.
Exchange
Exchange
PL„N.Y.. Dlgby
Favorable International Position
Of American Oil Interests,
I
SHASKAN & CO.
Members New York Stock
>
,
Oil Executive Points To
i'
-
By JOHN A. BROWN*
President, Socony-Vacuum Oil Company, Inc.
1929
SECURITIES
k
And Prospects
V
Real Estate Securities
REAL ESTATE
Thursday, May 25, 1944
CHRONICLE
the
prospectus,
ex¬
changes will be accepted by the
company in the order received.
Upon declaring the plan 'of ex¬
of
the
funds
to
effect
such
re¬
demption the company may sell to.
underwriters shares of the $4.25
new
of achievement.
petroleum industry started
high levels
Our
*An: address delivered by Mr.
preferred as may not
pursuant to the exchange Brown before the Economic Club,
offer.
Principal underwriters are Hotel Astor, New York City, May
Kuhn, Loeb & Co. and Harriman 9, 1944.
.(Continued on page 2164)
Ripley & Co., Inc.
.
cumulative
be issued
quest.
0
Also
levels
is
circular
mav
<
at
interesting
Butterick
discussing
Co.,
this
also be had from
& Troster on written
'•
current
Inc.
A
situation
Hoit, Rose
request.
*
i
^Volume 159
'
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4284
NASI)Inquisition Is On Again
?>,
(Continued from page 2139)
of these examinations.
^
York, Lackawanna & Western Ry. Co.
The burden of
preparing and sub¬
mitting data is placed upon all NASD members. In this,
way there is assurance of group annual reports by indirec¬
tion, for there is grave doubt whether the SEC could compel
answers
being made by the: entire industry to such an
inquisition. : Such a practice is not equivalent to the right
•
of visitation which the SEC possesses,
such effort has been attempted by it.
and
to
up
&
1st
Ref.
Income
1973
5s,
& Western
Mortgage 5s,
New York, Lackawanna
1993
& Western
Bought & Sold
1st &
now no
Members
61
York
New
Stock
Exchange
Broadway 1
This is
one
.
Telephone—DIgby 4-4933
Bell
Teletype—NY 1-310
Delaware Power & Lt.
of them and here is how it
s
Another important step in the simplification of the Allegheny
Corporation set-up is in prospect over the immediate future, with the
remaining 5s, 1949 and 5s, 1950 expected to be called with the pro¬
ceeds of a low coupon convertible issue. While financial circles were
not surprised by this latest development (refunding of the 5s had
.been taken for granted ever since Isale to. the public of a large share
Chesapeake & Ohio"hold-^
The new $30,000,000 bond issue
there was some surprise
the fact that there is appar¬ is, according to present indica¬
over
ently to be
■for the
new
&
Chesapeake
have
tions, to
competitive bidding
issue.
!!'!.'.!
no
been
Ohio
among
and mature
Some
the
"evils'*
-inherent
in ten years.
It will
MEMBERS
New
York Stock Exchange and other
leading Security and Commodity Exchs.
120
1,100,000
& Ohio
common, constituting practically
all of the stock'still held by Alle¬
ghany.- The bonds will be con¬
the leaders in
competi¬
main
that
courageous
and for all.
once
attitude
;
of
"The
Chronicle"
on
The company realized
unconscionable .$32,000,000
from
the
for
income
further
will
debt
BONDS
Baltimore & Ohio
rate
of
$3.50
a
practices
can
.
,
and should be estab¬
lished
by legal means.
Unfortunately, the
'000,000
was
reduction,
widely diversi-f
a
t i
z a
properties,, practically
that be in NASD have mis¬
'blanketing the field. These pur¬
taken their function.
their attempts at regulation chases included the old and new
have created artificial distinctions between the
"big fellow": (when - issued)
securities! of
powers
In effect,
and the "small dealer,
j
OUR FIGHT WILL ALWAYS BE TO SEE THAT THE
RIGHTS OF BOTH ARE PRESERVED.
— <
—
Hold
Spring Outing
DALLAS, TEX.
B6nd
1
rl
Club
will
spring outing
on
—
The
Dallas
its
annual
hold
May 30, at 9:00
Club.
golf; $2.50 without golf. The out¬
ing is open to all registered secur>
ities dealers and employees.
Checks for reservations should
be
/'
■
mailed
j
Jefferson, Fritz, Rehnstrom
Dallas
James F. Jacques,
are:
in
engage
Partners
Paul
H.
securities
a
are
.
Fritz
business.
Edwin
and
Jefferson,
Aleck
The
series
new
of
■
the
income from
shares
:
issue is to
$30,000,000,
some of -the
term
Treasuries
used.
It appears likely,
are
that the plan does mot
be
;
7
1.100.000
Chesapeake & Ohio
stock, less annual inter¬
that
short-
so
also
to
purchased.-,
7 ®.-7,v!.77
'7
Mansfield
Tire
&
&
Teletype BS 25.9
Great American Industries ;
Situation Of Interest
F.
H.
Koller
Rubber
ysis
Co., Inc., have
comprehensive anal-7
a
Great American Industries
on
the
firm
attractive
at
Copies of this
as
well
Bros.
as
circular
a
had
levels!-
Bartgis-
on
request
upon
from: F. H. Koller & Co.
The firm has announced the
moval
of
offices
its
to
and
r-
-
■
new
re-:
and
1
■■■■
ent
$9,000,000 after sale df
time,
according
to
analyses
Lackawanna &
Western
77.7777''■
appears
current
interesting analysis,
be
may
believes
Rehn-
-
REORGANIZATION
7
-
&
larger quarters in the same build-'
ing at 111 Broadway, New York,
-7'
Z/.. ' • 7;' •
City. :
the Chesapeake & Ohio common. issued by Otis & Co., Terminal
Son, George T.
Hemmingson, Crummer & Com¬ strom. -• _. ~ .7":! I? 7, •, 7 -7 - :■ ■7
*' 77 However, available cash should be Tower, Cleveland, Ohio.
Copies
sufficient to retire some $4,000;pany of Texas, Joe M. Callihan,'
;of these memoranda may be had
and
Judson
S. <7r> James,. James, Ray,
Rauscher, Pierce &
Co.;: .00.0. of .this .obligation, .leaving la
from the firm upon request.
total debt of $35,000,000.
Stayart &, Davis, directors; Rogers Secretary & Treasurer.1
*
I
"vf;
Rupe
:
Michigan Public Service offer in¬
teresting possibilities at the pres¬
present bank loan which was re¬
to
recently
Interesting Situations
mediate entire .elimination of the
duced
reorganization securities
7.7
:
N. Y. Telephone HAnover 2-7914
which
be
therefore,
call for im¬
,
prepared
alone equivalent
-7; 7'
St., Boston 9, Mass.
Tel. CAP. 0425
ferred
stock, is
Manufacturing
148 Stale
on the proposed bonds and the
regular dividend on the prior pre¬
to
in
Lipe-Rollway Class "A"
Pollak
bonds
r
est
\,
4/50
4V2/78
Chic. & Eas. -111. CI. "A"
en¬
of
common
Alleghany
the amount of
.
/
The
the
7. ;• ;.i!
5/50
St. L. San Fran.
Chic. & Eas. 111. Common
Thus the
approximately $4.00 a share on
the regular '5%%- preferred stock.
Corporation 5s are outstanding in
This earning power will be bol¬
the amount of $40,798,000 which,
stered materially by income re¬
with
the
redemption premium,
ceived on the diversified list of
will require $41,808,970 for retire¬
The "two
presumably
Formed In N. Y. City
Rog'ers Ray, RausJefferson, Fritz & Rehnstrom
cher, Pierce & Co., Mercantile has been formed, with off-ices at
Bank Building, Dallas.
29 Broadway, New York City, to
Y
Bond Club
included $3,325,000
MOP 1st & Refunding 5s.
of
6/45
,
St. L. San Fran.
STOCKS
without taking
the
possibility, of
elimination
4/03
41/2 / 03
,
Boston & Maine Prior Pfd.
par
through conversion.
Tide
6f
situation.
Pacific
purchases
ment.
to
,1' Recently elected officers of the
Missouri
at
account
earlier
New Haven, Frisco,
.Few of the indi¬
vidual.. -items went as high as
$1,000,000 par value, with the
heaviest dollar investment in the
Seaboard.
.
Portland''Cement is 'a
low-priced stock in an industry
with a bright future and offers in¬
teresting possibilities,' according
to a circular prepared by Lerner
&
Co., -JO Post Office' Square.
Boston, Mass. Copies of this cir¬
Giant
at the Glen Lakes Country
Reservations, which close cular may be had from Lerner. &
Friday, May 26, are $3.50'with Co. upon request;
a.m.,
into
Pacific group,
Bright Possibilities
7
issue
5/2000
St. L. San Fran.
income fro m
the
pledged collateral as against the
bond interest requirements would
amount to $2,875,000 a year, or
nearly enough over the ten-year
tire
5/75
Chic. Mil. & St. P.
Seaboard
of
life of the bonds to retire the
Northwestern, and bonds of St.
Paul, Rock Island, Denver, Flor¬
ida East Coast, all of the Missouri
and
Dallas Bend Club To
o n
-
-,
s
main of the bank loan.
average
Chic. Mil. & St. P.
Lehigh Valley
Lehigh Valley
share the Chesa¬
used in the open mar¬
ket purchase of
3/49
5/95
Chic. & East. 111.
& Ohio common to be
pledged under the new issue will
bring in $3,850,000 in dividend in¬
come a year. The interest require¬
fied list of securities of reorgani-
3-4V2/57
Chicago & Alton
peake
sale,
% /60
5/95
Buff. Roch. & Pitts.
be
still
4
Baltimore & Ohio
and eventual complete liquidation.
At
the
recent annual
dividend
to
close
excess
;used
also
without competition, in. March of
and will
704,121 shares of Chesapeake &
that the iOhio common. Part of-the pro¬
.
.
[p
Chicago 4, 111.
Buy-Sell-Quote
mark-ups is unwavering. We have always opposed
continue to oppose them.
ment on the bonds Wfil amount to
Nevertheless, we feel
securities industry as a whole is composed for the most
part ceeds was placed ill $14,500,000 of only $975,000. Income from other
pf honest men and is no worse than any other industry or ■short-term U. S. Treasury Certifi¬ holdings should be more than suf¬
ficient to take care of general ex¬
cates. Somewhat more than $10,profession.
.
•
'' <•
^*•
•„
penses, faxes and what may re¬
Relief from unfair
LaSalle St.,
in
deals.1 Naturally,
-
The
So.
.
dealer, angered by the Injustice of It may, the recent and prospective
these superimposed inquisitions, and by the autocratic pas¬ ideyelopments in the Alleghany
picture have enhanced materially
sage and enforcement of the "5% spread philosophy," is ■the
speculative position and pros¬
bound one day soon to follow the same tack and to settle that
pects of the preferred stocks.
issue
Broadway, New York 5, N. Y.
231
shares
tive'bidding for rail financing and
among 7
3%% interest rate
be secured by pledge of
of
Chesapeake
interests
'the fight for compulsory
carry a
critics of the
vertible into the C. & O. stock but
negotiated
at the time of this writing the de¬
the proposed Al¬
tails of the conversion option have
leghany refinancing is not covered
not been announced.
by the recent ruling by the I.C.C.
The vast improvement in the
calling for competitive bidding on
most
railroad v bond
financing. Alleghany Corporation debt struc¬
from certain disciplinary
proceedings, it indicated that the
Nevertheless, it- is considered in ture does not presage any imme¬
Department of Justice, as Intervenor, attacked the legality many quarters that the principles diate actiori with respect to pre¬
of the Maloney Act, the foundation upon which NASD Tests; Involved are. the same. Be that as ferred dividends as it is believed
,
Bought—i-Sold—Quoted
ings),
membership.
*
■'
*
.«•
In its current issue of the "NASD News," the National
Association of Securities Dealers may have
unwittingly
pointed to a possible source of relief.Referring to an appeal
.
;
,
■of the
.directed towards
Whipping the membership into answering
promptly in an effort to provide the Business Conduct. Com¬
mittees with/material for disciplinary proceedings, all of
which is made possible by the colorable claim of a
voluntary
Common
Railroad Securities
be
explained.
'
.■Y;
First, there is the erroneous claim, as we have fre¬
quently indicated, that the NASD is a voluntary association.
The next step in this "logic" is that by applying for mem¬
bership, one agrees pursuant to Section 4 of the by-laws
to comply with the "certificate of incorporation, the
by¬
laws, the rules and regulations of ths corporation." Hence,
if any of these empower the NASD to send out question¬
naires, a member who fails to answer, violates his agree?;
ment.: Neat, isn't it?
V
Emphasis on the Gleason case is no coincidence. It is
can
Issued)
(When
!
•
New York 6
.
do.
Refunding 5s, 1973
Divisional Income 5s, 1993
PFLUGFELDER, BAMPTON & RUST
•,
Your next reasonable question will be, "Do you mean
to tell us that in some instances the NASD has greater
powers than the SEC?"
.
we
Ifyulroad
"C"
When, as and if issued
^
Indeed
Delaware, Lackawanna
k
New
V v.Vv/:4
,
2143
J We
FOTENTIALITIES^®|
for Selected Securities: of 7® 77
maintain active
Ry.
trading markets
1st
§iff SEABOARD - ALL
FLORIDA
5s, 1973
Income
5s, 1993
''
Missouri Pacific
.
:.
-
Copies,available
System !
upon request
v
Mclaughlin, baird & reuss
ONE
Exchange
WALL
NEW YORK S
TEL. HANOVER
•
:•
'7;
;
77:
*
2-1355
TELETYPE NY 1-1310
,
'
1. h. rothchild &
;
;
•■
>•
STREET
(when issued)
BONDS AND CERTIFICATES
;!
Members New York Stock
6s, 1935
.
7...
7--
■:
co.
specialists in rails
-
•
52 Wall Street
HAnover
2-9072
n.y.c.5
Adams & Peck
63 Wall
Street, New York 5
BOwling Green 9-8120
Tele. NY 1-724
Tele. NY 1-1293
Boston
Philadelphia
Hartford
Thursday, May 25, 1944
THE COMMERCIAL & FINANCIAL CHRONICLE
2144
Tomorrow's
Edwaid 6. Budd
Walter
Northern States Power
*
6% & 7% Preferreds
,
In the issue of the "Chronicle" of
peared
Bought
—■
So/cf
Paine, Webber, Jackson & Curtis
ESTABLISHED 1870
because of the
tation Association.
the
con¬
tending that
:
Mr. Budd "by
National Power & Light
holding companies to
achieve an all-common stock basis, and the company will be liqui¬
dated as soon as final SEC "clearance" is obtained on all problems
National Power & Light is one of the few
Minor system assets have been
relating to distribution of its assets.
tried
to
vince
employ¬
con¬
in-
an
would
be
them,"
and
that this
con¬
holdings are the common stocks<$>
Birmingham Electric, Carolina basis
stituted
a
vio¬
lation
of
the
of
of
Light, and Pennsylvania
Power & Light.
A number of re¬
Power &
the
been made in paid
have
adjustments
Carolina
Birmingham
and
to "stream¬
line" these companies to the sat¬
in
companies
isfaction
order
the
of
that
SEC
and
to
re¬
results.
1943
is based
mate
no
excess
This
esti¬
the assumption
section
profits tax need be
Labor
on
the interest savings ef¬
by retirement of the de¬
on
fected
bentures.
.
Using
a
multiplier,
times earnings"
$22,000,000 esti¬
"ten
the
which
Na¬
adjust their stocks for convenient
to
stockholders
of tional might have to make to
National—Carolina on the basis of Pennsylvania would about equal
one for six,
and Birmingham in the available proceeds from pub¬
the ratio of one for ten shares of lic sale of the Birmingham and
mated
contribution
distribution
.
The largest
ital
structure, even if a substan¬
tial amount could* be amortized.
culations
awry.
However, assum¬
Edward
advised the Federal Power Com¬
mission that it already,,
had made
provision for some $15,845,008 of
the write-off and that a consider¬
able
of
amount
subject
balance
the
was
controversy between
commission.
to
the company and the
Should
the
unwilling
mates
to
of the
FPC
and
SEC
be
reduce their esti¬
required write-offs,
National Power & Light
might be
required to make a contribution
of approximately
$23,000,000 to
Pennsylvania, the remaining
amount being met through can¬
cellation
of
the
present common
stock equity, and future amortiza¬
tion of the $15,668,403 assigned to
Account 100.5.
This cash might
logically be used to reduce funded
debt, possibly retiring the $28,500,000 debenture 4%s of 1974.
The improvement thus, attained in
an already strong favorable posi¬
tion might permit refunding the
three preferred stock issues ($7,
$6 and $5 dividend series).
Assuming
that
this
program
were carried out, the balance for
the common stock might be nearly
doubled, it is estimated, on the'
ever,
Budd
G.
?■
:
union
v
-
estimate—which
of-thumb
works
beginning of the new week,
Monday, all the good actors
of the previous market day,
apparently overcome by pre¬
vious
exertions, sank back
into
lethargy, y Even the rails
which
last
showed
week
an
exemplary spirit of inde- y
pendence got all out of breath ,
and dropped in their tracks.
Obviously, such action doesn't
make for any. enthusiasm by
any of the board-room crowd.
And, so far as the floor is con- y
of
the
United
States
declined
to
basis of the War Labor Board's
review the decision of the Labor cerned, it is back at the busi¬
complaint:
*. /: '
ness of
sniping for fractions
Dear
* y
y y Board and of. the United States
with few carrying stock over¬
I sincerely believe the attached ;Court in Philadelphia. This will
require the Company to withdraw
pages contain information of vital
night. ; " - ■
:
v
its
facts
are
as
.
-
.
.
.
recognition
Briefly, the
you.
of
the
E.R.A.
as
employees, v. y 7'-y'
.Vr
The Supreme Court did not it¬
follows::
ing that the program were con¬
1. On • Monday,
the • Supreme
as here suggested, the
Court of the United States de¬ self pass directly on the questions
in
stock of Pennsylvania might be clined to review the decision of
controversy. Under the law,
worth about $39,000,000 on a rule- the Labor Board and the United That Court need not take up every
States Court in Philadelphia con¬
(Continued
y
On
the position that
was
Monday night.:
Tuesday, the complexion
(Continued
2165)
on page
This
obtained until
on page
2165)
•
•
out at about $7.15 per share
tional (currently selling at
to make
a
'I '
an
distribution of Carolina
V.';,
Birmingham (rather than a
sale) the SEC might be influenced
by ^the fact that the top holding
company is Electric Bond & Share,
which in any distribution would
receive a substantial part of National!& assets.
Even if a~ com¬
plete
distribution of National's
assets were made, including Penn¬
sylvania, the latter would remain
a
subsidiary of Electric Bond &
Share, and thus the clearing up of
its capital structure would remain
under SEC jurisdiction. However,
the Commission may decide that
offer to sell
or a
solicitation of an offer to buy these securities.
The offerir\g is made only by the Prospectus„
vy
y •.
-
:/
&
J
-
fp
;y» fanm
?>.-.".vtt
•:ty4
;
.'i'i
-
:A.
$12,500,000
■<*
West Pcnn Power
First Mortgage
Due
Company
Bonds, Series L, 3%
May
i, 1974
it is better to treat all the stock¬
holders
in
National
basis, and not throw
on
the
Price T04%% and accrued interest
same
larger bur¬
den of readjustment on the ma¬
jority stockholder, Electric Bond
&
a
Share.
The
Prospectus may le obtained in any' state in which this announcement is circulatedfrom only such
Current Report Available
of the undersigned and other dealers as may lawfully offer these securities in such state.
H. R. Baker &
Co., Russ Build¬
Francisco, Calif., have
issued a current report on Bank
of America.
Copies of this interesting report may be had from the
ing,
San
firm
on
HALSEY, STUART & CO. Inc.
request.
EQUITABLE SECURITIES CORPORATION
HORNBLOWER & WEEKS
STROUD &, COMPANY
INCORPORATED
(INCORPORATED)
common
GRAHAM, PARSONS & CO.
NEWTON, ABBE & COMPANY
common
ARTHUR
Peoples Light & Power preferred
&
Co,
to
Chicago
*
"
y
GREGORY & SON
>
BROADWAY, NEW YORK 6, N. Y.
FIRST OF MICHIGAN CORPORATION
PERRY & CO.
INCORPORATED
INCORPORATED
Gilbert J. Postley
,
••
yy
This announcement is not
and
Ohio Match
f.'.K*''
summated
Federal Water & Gas
Wire
*
or
ness.
prohibits employers from
in the attached pages a detailed
interfering in the choice of organ¬
izations by employees to repre¬ statement for your consideration;
I most strongly urge that you
sent them in making
collective
read these pages carefully,: and
bargaining agreements. In view
of the widespread interest in this give them your mature delibera¬
tion before arriving at a decision.
case, and the further implications
Sincerely yours,
y
that might be drawn regarding its
;.
V.
Edward G. Budd y..
application in labor and employer
y
President yyyy-v
relationships,
the
"Chronicle"
publishes below copies of the
The contents of the pages re¬
letters written by Mr. Budd, and
ferred
to
in
the
above
letter
furnished
to
us
by Henry
S.
follow:
■!...
Drinker, of Drinker, Biddle &
;
February. 29, 1944 ;
Reath, Philadelphia, attorneys for
On Monday the Supreme Court
the
company,
which were, the
OTIS & CO.
Direct
"'"V'T
independent
•
intensifyThe nervous¬
Saturday's market, for
example, was good. At least
a Respectable
number of
stocks moved along as if they
meant business.
But, at the
or¬
not act without a complete
BEAR, STEARNS & CO.
29
tion
outside
an
knowledge of the facts concerned;
and I am therefore setting forth,
which
of Na¬
6%).
ing "plowed back," but this proc¬
In
determining
whether
Na¬
ess of building up surplus is slow.
tional Power should be permitted
The company on Feb. 12 this year
Three-quarters of earnings are be¬
y
a
days scattered strength/
few
y In any event, yours is the free¬
dom pf choice. You should, how¬
Act,
——
earnings). As the common stock
equity amounts to only about $27,000,000 this would obviously raise
difficulties with the present cap¬
•
'-v.
affiliate with
ganization,
Carolina
stocks
(whose
equity
;v;yf yyly.
holding and the ma¬ earnings currently total about
However,
National
jor problem is Pennsylvania $2,058,000).
Power & Light, whose revenues might be almost reimbursed for
this outlay by the increased value
constitute about 60% of the sys¬
of the Pennsylvania stock, assum¬
tem total. The company reports a
ing that the preferred stock re¬
net plant account (after deprecia¬
tion reserve) of about $198,000,- funding could be worked out as
estimated.
Tax
adjustments for
000. Of that amount the Federal
the three companies, which it is
Power Commission wants to write
Off over $66,000,000 (part of which impossible to estimate with any
accuracy, might throw these cal¬
importance to
might be amortized out of future
National.
of
you
y c. form an
of your own.
of the
.
exception
.the
the responsibility
' b.
>
for
better
largely disposed of, except for Memphis Generating and Edison
Illuminating Company of Easton which remain unsold.
Important
act well.
issues
By WALTER WHYTE
With
.
plant,,
dependent
union
proves
and your fellow work¬ the market as a unit did little
of the fu-,
since last week's' column was /
ture.
You may decide to:
a.
have no union at all in the written to cause any jubila¬
upon
ers
that
^
gaining agency for its employees.
3. This decision further places
implications
ees
—Individual
the
company
company,
the NLRB
I. ■
compels
to withdraw its recog¬
nition of the Employees Repre¬
sentation Association as the bar¬
of
employees
•
get going
to
interest
block — London
prices now point down, pos¬
sibly indicating war news
we, so far, know little about
.
decision
This
2.
of
stumbling
cerning the Employees' Represen¬
two letters ad¬
trying
lack
but
.
of
contents
dressed to the
>
Market
Appeals at Philadelphia, upholding the right of employers to express
their personal views to employees about labor organizations. The case
involved Edward G. Budd, President of the Budd Manufacturing Co.,
who was cited for contempt by the National Labor Relations Board
Quoted
—
Says—■ igyyf
May 11th (p. 1950) there ap¬
item covering the decision of the Third Circuit Court of
an
Whyte
A. E. MASTEN
COHU
May 25;'1944
v
/
■
R. L. DAY & CO.
;
•
:
&, COMPANY
&, TORREY
SCHWABACHER & CO.
,
THOMAS &, COMPANY
MINSCH, MONELL & CO,
•
Volume 159
THE COMMERCIAL & FINANCIAL
Number 4284
CHRONICLE
try, but more than huge banking
is required to encourage
Post-Wai Ontloo k For Securities
resources
2145
advertisement
in wage
rates, the wage cost per
unit value of output in manufac¬
turing industries in 1943 was only
consumers' 7% higher than in 1939 and 3%
higher than in
1937,
Further
plants A' and savings will stimulate the demand substantial
assumption will not hold water.' New. ; and. modern
gains in productivity
for goods.
A great part of these
Under this definition I bridge thie equipment will bring an enor¬
when new techniques, processes
savings, however, will be kept-for
gap
of ; reconversion •problems- mous increase in our capacity to
and equipment become available
a rainy day.
After the war, mil¬
such as; cancellation of govern¬ produce
and our skilled labor
for
use
with
greatly increased
lions of people will look for work
force
will
be
unparalleled.
In¬
ment contracts,
accumulation of
and other millions will have re¬ skill should, over a period of time,
government stock piles;! out
of dustry has "on ice" and in the duced incomes.
offset higher wage rates and re¬
It is only to be
surpluses, disposal of war inven¬ : "idea stage" an enormous number
duce wage costs per value unit of
expected that' a substantial pro¬
tories and many-other problems, of' new or 'improved products to
output.
It will: take time and
whet the appetite and stimulate portion of their savings will be
of more immediate importance.
effort
to
accomplish
this, but
spent only; as, needed for neces¬
the desires of consumers.
A
warObviously the level of common
there is no reason to expect a
sities.
I do not underrate the sta¬
stocks in the post-war period will- torn world is waiting anxiously
basic
change in the long-term
bilizing influence that these enor¬
depend upon (1). earnings and for the day of reconstruction and
trend toward improved produc¬
mous saving will exert, but I be¬
normal
.dividends at that time and (2) the the re-establishment of
lieve it unwise to assume that tivity in American industry.
Perhaps most important of
rate at which investors are willing life.
these savings will be spent on a.
Competition will be keen after
to capitalize these earnings and all, American industry, labor ana
reckless scale. •;'• ! avaaa;aa^'v/va:,!a the
war
because
manufacturers
dividends.
Earnings and divi¬ the consumer are acutely aware
Prices of certain goods, particu¬ will strive to secure the largest
not only of the obvious desira¬
dends
dependprimarily
upon
possible share of the available
business activity,; but, two other bility of ^utilizing as fully as pos¬ larly of consumers' durable goods,
market to employ their enlarged
enlarged
productive certainly will rise if price con¬
factors of great importance are sible A our
facilities
and labor force.
Some¬
trols and rationing should be re-*
capacity
but
also
of
the
necessity?
profit margins and taxes.
The
one
is bound to attempt this by
to do so if we would reap the moved
immediately
upon A the
rate
of
capitalization :? depends
benefits of our resources in a conversion of industry and before lowering prices even if profits
.upon the social, political and eco¬
should
be
reduced
temporarily.
higher standard of living. %A:^AA| such goods are produced in large
nomic
■A;;
/
(Continued fro m
;
;
2139)
page
greatly expanded bank loans.
NOTE—From time to time, in this space,
The! spending ' of
j
there will appear an article which we hope
will beof interest to our fellow Americans*
This is number
thirty-three of
a
series.
SCHENLEY DISTILLERS CORP., NEW YORK
,
A War
.
,
Correspondent
Speaks AAaaA
.
.
.
•
High up in the world's tallest
sky-scraper, The Empire State
Building in New York, we at
Schenley have a men's luncheon
,
club. It is called the First Name
Club. Each week
environment which creates
All of these are important, fa-i volume.A If controls were imme¬
of confidence" of the
investor.:'-C■.-A A ■''":'A.;/ ■; vorable and constructive elements diately removed, "prices for such
in the post-war economic? situa¬ goods would resemble those in
V The difficulties of judging the:
tion. A Apart from these factors,: some of our second-hand markets
putlook
for
post-war
common:
"state
and in the black markets of occu¬
prices are evident from a we will maintain a permanent1
recital of these "unknowns"; military establishment and a per-1 pied Europe; It would take more
manent war industry which will, than the wisdom of Solomon to
These
stock
mere
increased
the post-war
period is probably two to four
years offr To be asked to talk in
public
about events that may
occur in two to four years is in¬
difficulties
.
fold
many
deed
are
since
being put
on
the spot!
maintain
activities. •, •, A<• •
help
;
to
The Post-War Level of Business
A-.
A
*
1
•
•'
1
be the
should
who
decide
lucky
such goods as are
The pocketbook of the
of
recipients
available.
Economic- lavys. and forces are
still prospective purchaser would un¬
doubtedly have a lot to do with
stubborn, • however, and we
have to reckon with them.
most
"
economic
our
The
carefully compiled estimate
it. A No
retailer
responsible
or
I have made suggests that despite
manufacturer would wish such an
all these favorable
unhappy and unfair situation to
develop. Necessity will force con¬
tinuation of rationing and price
controls
until
a
long
list
of
"scarce"
commodities
is
again
factors, it will
be very difficult to offset by in¬
build dream castles
creased civilian production
and
about the post-war world.
Free
play of one's
imagination can by the maintenance of consider¬
able peacetime armed forces, more
yield highly gratifying results. It
than about one-quarter to one- available in large volume.
is, in fact, becoming fashionable
There will, however, be avail¬
to assume the nearly full utiliza¬ third of the drop in war produc¬
This is because our war able
tion of our productive capacity tion.
for
the
market
an
even
Even longer list of "over-abundant"
after the war.
This is because we production is so gigantic.
after
giving
all
possible
weight
commodities.
dread the possibility of returning
Agricultural prod¬
to post-war favorable factors, this ucts
will
be
abundant
to less favorable conditions.
despite
It is easy to
k,
As
result, we hear of esti¬
mates of post-war business of 180
a
upwards in the FRB index with
a
few observers even
level
close
is the best that I
post-war
basis,
should
can
On this
do.
national
income
about $90 to $95 bil¬
run
expecting a lions, and the FRB index should
be about
140.
Now remember
figure
the present
to
volume
this
of
business
Many manufacturers regard the
post-war period as providing a
real opportunity to improve their
relative pre-war position and to
enter new markets by supplying
a superior product at a low price.
Certainly, industry will have the
financial
for
resources
this
A
pose.
pur¬
,
In the light of these considera¬
tions,
I
it
regard
far
as
more
probable that post-war prices will
lower rather than
be
higher than
today's prices. In my estimates of
post-war business I have assumed
a
moderate
from
A
from
economic
must reckon
factors,
the power
with
of the
government. The political
party in power is bound to con¬
sider the prevention of a large
price rise as among the uppermost
problems on the post-war cal¬
endar.
The peace will not be won
large exports of staple foods for if we go through an inflation fol¬
reconstruction.
Most metals will lowed by a serious price collapse
be in excess of supply and the with
dire
consequences.
The
available steel will be
volume of
large. The supplies of many
manufactured products will be
more
than ample to meet post¬
war
demands.
We can all think
very
will
government
retain
large
enough powers to prevent a large
price rise, but it will probably not
be necessary to use them, a On the
of about 240.
that
Such ideas to my- mind must be
based
to
a
considerable extent
might prevail after complete con¬
version of American industry and
contrary, it will likely become
full recovery of civilian produc¬ of
examples.
No rationing or necessary to cope with the prob¬
tion.
During the interim period, price, controls will be needed for lem of
stabilizing a declining price
activity may be lower.
such products.
On the contrary, structure.
This estimate may prove to be the
problem will be one of keep¬
too high.
On the other hand, I ing prices of such goods from de¬
Post-War Profit Margins
may not have used my imagina¬
clining too couch. Price "floors"
During the last four years, ris¬
tion
enough to fallow for the rather than price "ceilings" are
ing prices and a huge volume of
enormous
changes that will be bound to become a popular sub¬
goods in a seller's market have
brought about by the war.
As a ject for discussion during the next
given industry abnormally high
person
responsible for advising few years.
You might say that profit margins before taxes. Cor¬
clients for a fee, I am forced to
this . overabundance would per¬ porate
profits before
taxes in
make important decisions affect¬
haps arise immediately after the manufacturing industries in 1942
ing their welfare. In that position war but that later on surpluses were 16.8%
of
total
assets as
I would dislike to use a higher will have been absorbed and the
against 5.7%
in
1939.
During
figure and I might prefer a some¬ pressure on ; p rices removed. 1943 the return before taxes on
r
wishful thinking. It is easy
optimistic if one starts with
assumption that nearly our
entire peactime labor force will
have to be employed.
In that
case business would, of course,-be
upon
to be
the
extremely active. Similarly, it is
easy to be optimistic if one starts
with the size of the post-war pub¬
lic debt and assumes that business
will
be
at
level
a
necessary
to
support and amortize this debt.
surely is highly desirable to
It
employ nearly our entire peace¬
time labor force and to maintain
a
volume of ; business that
can
support
does
aims
'immense
our
The
debt.
desirability
not
determined
be
their
secure
Post-war
filment.
to
post-war
of these
ful¬
production will
a
great extent
by the economic forces that dom¬
inate our economy at the time,
and not by the size of our debt or
peacetime labor force.
A.
war
guarantees a market
goods and services of about
$90 billions a year.
During war
there is no problem of distribu¬
tion—only
one
of
organization
our
The
for
and
Our
production.
technical
and
skill
resources
are
•
what lower one.
A 4evel of post-war
highest
The war production prob¬
has, therefore, been solved
with a magnificent record.. VAA- j
During the post-war period this
guaranteed market might shrink
to less than $10 billion.
The crux
of the problem of post-war activ¬
ity is the extent to which the re¬
level
in
production will
civilian
offset this enormous
current
our
We
are
ferred
shrinkage in
production for war.;.
of the large de¬
aware
demand, for
certain
com
kinds
producers' capital goods that
sumers' goods and for some
of
have
not
been
manufactured
in
many .months.
We know about the tens of bil¬
volume
any
lions
saved
of
for
dollars
that
have
by industry and labor
been
and
business of
would
be
the
of
record in peace times.
higher than the
Compared with
1939.
the
pre-war record of American
business, it would be highly sat¬
isfactory.
Against the war rec-!
ord, it would be considered un¬
satisfactory.
Having
post-war
come
to
jumped the hurdle of
business, I shall now
some
of the other factors
an important bearing on
prices of common stocks. - • ^ i
having
The
leled.:
vival
on
FRB
It would be 30%
unparal¬
lem
the
in
140
I
Post-War
hasten
to
Price
discuss
Level
)
subject
of great interest—the price level;
A lot of arguments of a rather
general nature are being used to
prove that prices must rise much
further.
We
hear
that
higher
prices are inevitable because of
such factors
as
the
one
pub¬
banking de¬
enormous
However,
American
that
would
out
time
an
be
industry
able to
at
turn
immense volume of civilian
total
assets
dustries
lower
rather than higher because of two
factors aside from our potential
ceipts
are
likely
to
be
probably
even
before taxes in manufacturing
goods to satisfy all requirements.
Prices
was
In 1942, corporate profits
in¬
higher.
1939
were
10.9%
of gross re¬
compared with 5.6% in
and 6.4% in 1929. Last year's
as
total
corporate
profits
before
productive
capacity,
namely taxes in all industry were in ex¬
This com¬
greatly
increased
productivity cess of $23 billions.
and keen competition.
The rec¬ pares with about $5 billion in
ord of the last few years gives a 1937 and 1939 and with about $9
clue to the
potential productivity
We had no
of American industry.
experience in war production. We
started from scratch.
Available
skilled labor
was
Millions
new
of
soon
exhausted.
workers
were
trained
overnight. In face of all
difficulties, output per man hour
probably
increased
more
than
one-sixth in the four years end¬
ing 1943. In the post-war period,
with a highly modern plant and
equipment and with the use of
the most skilled of the greatly
increased
skilled
labor
supply,
billion
in
1929.
great
us
on
many
I
But
a
guest
have
varied sub¬
men
years.
thinking of our last
Thursday's meeting, and I am
thinking of how strong was my
am
wish that the
;
where
room
we
met
might have been big enough to
have held a vast throng of people,
instead of just a comparatively few
members of our luncheon club; and
this is why.
;
We had,
as our guest, a famed
correspondent. He has been
with the British Army since a
;
month after Great Britain had
tered the
war.
and is home
He is
an
en¬
American,
"sick leave"
on
as
he
Eutspoke
it. Theto truth
is,was
an hour
after
us, he
scheduled
e
to receive the award of the
Purple
Heart. He had been wounded in
The
I
said
that
I
wished
nisia.
A-A
And
what
the
spiration in
;^AAA;;'-A; A/. A a'
guest's message to
perhaps spends his
or her days or nights putting in
single nuts or bolts in tanks or
planes or jeeps or gun carriages; a
job that seems so monotonous and
our
the worker who
unheroic. But there
are
no
unim¬
portant jobs. Each is a great big one
or—a
big little one!
Front
whenever I
now on,
pass a
war work is going on,
whether that plant produces planes,
plant where
or
ships, or guns, or tanks, or
jeeps, or alcohol for war purposes,
or what not, I am going to think
of brave
men
in
from Tobruk
cause
a
disastrous retreat
toward
Egypt, be¬
of lack of essential equip¬
ment. Then I shall
picture a mir¬
Alamein, followed
by a victorious march starting at
/El Alamein—because materiel*,
made by American workers' hands,
had arrived in quantity and—in
acle stand at El
time.
And if you don't mind, I am
going to bring up my hand, hum-,
bly and perhaps awkwardly—in a
respectful salute.
:;•, A
MARK MERIT
war
receipts
will
lower
and
For
while
a
returns
may
return
more
after
even
to
a
normal
much
level.
the
war
such
be
less
than
of Schenley Distillers Corp.
P.S.
* Materiel—bought
War
and paid
purchases of
Bonds and Stamps.
for by
your
and
my
FREE -A booklet containing reprints
of earlier articles in this series will be
sent you on request. Send a post-card to
me
care
of Schenley Distillers Corp.*
350 Fifth Avenue, New York 1, N. Y,
normal because of the difficulties
public works.
This would in¬
lic debt, the huge
who can doubt that there will be of reducing costs within a short clude interest on the public debt,
posits, the huge savings that will
a further great gain in productiv¬
period of time.
With the same thev ordinary
expenditures
for
press on
markets and the high
ity?
During the last four years volume of business as in 1940 or running the various departments
hourly wage rates.
v A
;
increased productivity and higher in 1941, industry is, likely to find and
agencies, the maintenance of
Our public debt will be huge
prices
have
almost
offset
in¬ that the return on capital before a large military establishment, the
but it will certainly not be so
creased
hourly earnings.
They taxes Will be much smaller than expenditures
for
war
veterans
great that our people will lose
actually did, if allowance is made during those years.
and social security, and a con¬
confidence
in
the
dollar
and
for
overtime
pay
rates.
The
siderable amount of public works
stampede for tangible commodi¬
Post-War Corporate Taxes
genius of American management
expenditures.
The post-war na¬
ties.
and
Huge banking deposits may not
higher prices but rather a
the
skill
workmen made
of
the
American
possible this
won¬
Federal
tures
government expendi¬ tional income and volume of busi¬
during the post-war period
ness
that I foresee would not
yield
mean
part, the satisfaction of needs and
wants that cannot be met now.
deposits are available to finance hourly wage rate in, manufacture without ■„ allowing for any ab¬ tures if personal income taxes
any conceivable needs of indus¬ ing. In the face of this large rise normally large
(Continued on page 2157)
expenditures for
know that these
•::
lot of renewed in¬
a
enormous
profits before taxes and the
high returns on invested capital
and on total receipts before taxes
are
typical of boom conditions.
The less efficient
managements
are able to show highly satisfac¬
tory results before taxes during
a
boom.
In the post-war period
the return on capital or on gross
that
might have been big enough
to have held thousands, instead
of a few, I meant just that. I
would have had every man and
woman, who is working in our war.
plants, present, to hear our guest
speaker pay tribute to the part
that American materiel* played in
that great, historic drive, in North
Africa, from El Alamein to Tu¬
room
billions will
be available to finance, at least in
we
:
war
action in Africa.
present levels.
Apart
we
decline of about 10%
have
Some
talked to
jects during the past few
.
the
we
speaker.
slower turnover of dollars.
These
derful
crease
achievement
of
49%
in
with
the
an ;
iri-t
average
will probably run for $20 billions
for the most necessary expenses
enough
to
meet
these
expendi¬
are
the commercial & financial
2146
v
'
loans has been
ing fund bonds to 11 insurance companies and negotiated $24,500,000
of serial bank loans with its regular commercial banks, the company
Common Stock
Bought
Sold
—
analyses
request
on
OTIS & CO.
(Incorporated)
v
ESTABLISHED
Tower
Terminal
States
1899
Phone
yesterday.
:
■
The
sold
face
West Va.
-
Met¬
group were;
Stock Exchange ./:;
since
come
Life Insurance Co.
O.
CINCINNATI 2,
-
gan
1 * ' '
firms
*
*
Cleveland
Ten
of
members
syndicate
a
■' ■
.
dent
a
issue
new
of
Alleghany Corp., top ( holding
company
of the Chesapeake &
Ohio Lines, has filed a lengthy
application with the I.CiC. for an
order designed to pave the way
for eventual merger of the Chesa¬
peake & Ohio Railway, Nickel
■
headed
shares
Rayon Corp.
Co., Hawley, Shepard & Co.,
McDonald-Coolidge & Co., now
ler &
CAREW TOWER
MAIN
1804
Trust
Land
2, OHIO
TELE, CI
»
140
Certificates
'
Globe-Wernicke Co.
or
better.
worthy of mention.
In the first place, one must ad¬
mire the courage of the examiner.
He called the president and
"
Bonds—Pfd. & Common Stocks
a
confer¬
Philip
Carey
Pfd.
Co.,
Gibson Hotel L. T. C.
Bonds, Pfd. & Com.
Income
W. D. Gradison & Co.
New
graciously
banks.
that if they
promised they would correct their
"deficiencies" in the portfolio, he
could accept such assurances. He
further to
Went
that if
tell them
preferred not to do as; he
said, they could carry the matter
up to higher authorities.
they
To
such
"A"
rated
not
and
or
probably the
realized
take
to
thority
had
he
is
legal basis for any
to
sell
municipal
no
order
bonds
—
there
knowledge,
our
absolutely
no
better
stand.
examines, then
him for
one
Terminal Building
his courage.
Ohio Personnel
CLEVELAND,
OHIO—Edward
with
Cunningham & Co., Union Com¬
A. Stanton is now affiliated
merce
Building.
(Special to The Financial Chronicle)
CLEVELAND,
'
,
.
*
*
Commerce Building.
the
Union
Murch
&
Co.,
OHIO—Spencer
with Maynard H.
Union
Commerce
Building.
A.
Hanna
approved, by
a
Association
at
Columbus last week.
Rodney P.
OHIO
large major-
the basis of 1
on
each
for
share
Hanna
is
an
old
iron
1/20
share
ore,
shipping company.
was
new
Emil
New
(Special to. The Financial Chronicle) ;',v,
and
CINCINNATI,
,
Schradin
Schram, president of the
York
Stock
Exchange,
has
OHIO—William
become
associated
Merrill
Ohio
Group
of
the
Mr.
Investment
Bankers "
Association,Cleveland
Security Traders Asosciation, the'
Lynch,-.Pierce,
& Beane,
Schradin
Fen-
330 Walnut Street.
in
the
past was
manager
of the municipal bond
department for Westheimer & Co.,
and prior thereto was an officer
of Field, Richards & Shepard, Inc.
ner
ad¬
dressed members of the Northern
However,
movement
a
the national
both
by
and state
agencies,
and the Federal
su¬
>
well
as
as
the
bankers
V
Deposit Insur-;
Corporation
ance
to
encourage
themselves
to
di¬
vest themselves W second grade
bonds, and improve the qualitytheir
portfolios,
properly
directed
could,
if
bonds
of
at
A
quality, be of considerable
poor
benefit to the banks.
More and
more
banks appear to
be
taking such action, either vol¬
untarily, or because of outside
Suggestions. It would seem that
the time.fs ripe, therefore, for thb
movement to
be
given support. \
In justification of such
suffice it
to
a
move,
here again, that
for many reasons, second grade
bonds are today selling for prices
say
nearly the
very
>
.
rate
not
a
same as
those at
hi^h grade bonds
are sell¬
describing these
banks improve
the quality of their
/.'iv-''i')- ..'?/■;l
portfolio's.;"'
For months we have been urg¬
ing the sale of second grade bonds
purchase of high quality,
for many reasons which need not
be repeated^ here.
But. it seems
worthy of notice that probably
and the
CINCINNATI
Tele. CI 150
Common
*
r
Cleveland
.
^
2152)
on page
nicipal Price
so
Date—
*
t
t
May. 17, 1944
1.31'
1-46/
1.16
May
1.31
1.46
1.16
1.32
1.47"
1.17
10
May
—
>3'
__
.30%
/
.30
'
.30'
'
Apr.
12
—
Mar. 15
1.32
1.46
1.17
.29
1.34
f
1.50
1.19
.31F
Feb.
16
1.37
1.53
1.21
•32
Jan.
19
L_
1.40
1.57
1.23
Dec.
15, 1943—
1,42
1.59
1.24
.35-
1.39
1.57
Nov.
—
■
17
Oct.
13
Sep.
15
—
—
—
Aug. 18
__
July 15
__
Mar: 16
Jan'.
—
.
■
.34
.
f-
1.22
.35}'
1.39
1.58
1.21
.37-
1.43
1.62
1.24
1.44
1.63
1.25
1.50
1.63
.1.32
1.76
1.97
1,55'
.42,
.36-
.38 A
.38
.36-.
1, 1943—
1.83
2.01
1.65
Jan.
1. 1942—
1.92
2.13
1.70
Jan.
1, 1941—
1.88
2.14
1.62
Jan.
1, 1940— 2.30
2.58
2.01
..57
Jan.
1, 1939— 2.78
3.33
2.24
1.09':
Jan.
1, 1938—
3.42
2.55
.87!.
2.98
.43*
.52.
'
:
Foregoing compiled by J. A. White, Cin¬
Z a
cinnati.
>
♦Composite
lower grade
gSpread
grade
index
bonds.
between
bonds.
,
for
20
tlO high
high
We
bonds.'
f 10
grade bonds.
grade
and
lower
v
Buy
1963
•
Trust
Members
,
•
29
•
For Our Own Account
Certificates
INCORPORATED
14, OHIO
Teletype CV 67
-
J. MERICKA & CO.
Union
......
•
-
(Continued
Terminal Tower
Commerce
CLEVELAND
Telephone Main 6800
Municipal
Common
Investment Securities
CLEVELAND
Ohio
Cleveland Terminal Building Co.
shares will be
Land
Building
the
Index, reported elsewhere
Terminal Tower Company
.
Union Commerce
In
Wanted
Terminal Tower 2V2-6
errill, Turben & Co,
Union Cent. BIdg.
assist him
will
that
determination to have his
his
in
mailed upon request
Field, Richards & Co.
ing.
Price
subdivision
a
grade bond, and
second
cooperation
BANK
CITY
which
debt.'
the third place, and most im¬
portant, this examiner must be
given considerable credit for his
OF CLEVELAND
SECURITIES
upon
ratings applied to
bonds, would be fraught with
insufficiencies, and would be de¬
cidedly inadvisable.
In
What is
held.
coal
-
Circular
Tele, CV 174
based
such
that has less than $200,000 of
•
Lien of the Cleveland Trust
does
tion
Offerings
CLEVELAND
or to prevent the purchase
banks of municipal bonds,
the
group's 54th annual meeting in
*
stockholders
Co.
NATIONAL
Union Com. BIdg.
of
portfolios
of
Young,
Marquette
;
(Special to The Financial Chronicle)
C. Duty is now
the
in
banks, with more attention
being paid to municipal bonds. A
move
to grant legal authority to
bank
examiners
to require ,4he
sale of municipal bonds held by
grade credit, and a bond not rated
"A" or better, is a second grade
with
CLEVELAND,
bonds
state
chairman of
R.
Pere
ity, proposed issuance of 100,000'"^fe«e^
^.Sl£e.!; a.
Howard
C. Hudson of Wilmington was i
$4.25 preferred shares.
desire.to have his banks dispose
named vice president.
Eliot
The company stated as 100,000
of second grade bonds. While his
succeeded Emerson L. Boyd of
new shares are to be issued, only
conception of what constitutes a
Warren.
a portion of the 128,531 outstand¬
second grade risk may be incor¬
ing $5 preferred shares can be ac¬
National City Bank' of Cleve- rect, and while he may not have
cepted
for
exchange
and
ex¬
had
legal authority for his ac¬
(Continued on page 2151)
"
changes will be accepted by the
tion, nevertheless, if such was his
company in the order received.
desire, his intention was good. He
The company will make an offer
deserves support—not blind sup¬
to stockholders to exchange the
port, but cooperation that will as¬
new shares for each $5 preferred
sist..him. prqperly to determine
share
OHIO—George
D. Schrauf has been added to
staff of C. J. Devine & Co.,
the
pervisory
second
the
In
new
Tele. CI 68 & 274
(Special to The Financial Chronicle)
>
Bros.
have
CINCINNATI 2
V
man
M.
Stock Exchange
York Curb Associate
Dixie
that the state banking de¬
partment in Ohio is also giving
more
attention to the quality ox
should ad¬
his intention and
such
pear
by
a
th6
to
no
report of action by a
examiner, it would ap*
definite
banks,
such
heard
have
we
this move¬
directed it
favor
great
a
state bank
examiner
Yet, if it were his intention to
improve the quality of the in¬
vestments held by the hanks he
mire
While
legal
au¬
be
Alleghany and C. & O. Railway,
asserted the corporation is "ask¬
and
Bankers
York Stock Exchange
Tel. Main 4884
petus will be given to
told them that he had enough con¬
men
a
as
doing, then a great im^
are
ment, and, if properly
ing the commission to confirm its risk, overlooks the fact that many
Merrill, Turben position that no authority for con¬
bonds'may be • rated "A," which
& Co., Ball, Coons & Co., now
trol (Of the roads) is necessary."
should not be in a bank's port¬
Ball, Burge & Co., Curtiss,-House Last Feb. 8, the commission or¬
folio, and conversely, there are
& Co.,'Faheyj Clark & Co., Field,
dered an investigation to deter¬
many high
grade bonds which
Richards & Co., First Cleveland
mine whether Alleghany, Young have
not
been
"favored" with
Corp. and Maynard H. Murch & and Allan P. Kirby, Young's as¬ such a
rating. To illustrate that
Co.
sociate, acquired control of the ratings are. inadequate to deter¬
Stock* was priced at $99 a share three roads
in violation of Section mine quality, it is sufficient simto the public and proceeds with
,5 of the Interstate Commerce Act.
i ply to realize that small communi¬
other funds, will be used to re¬
Hearing on this was scheduled for ties and school districts frequently
tire $10,000,000 promissory notes last week but was postponed until are
not "rated" by anyone, al¬
to banks.
The notes were issued
June 26 when the application also though these small subdivisions
last. Jan. 3, principally to finance
will be heard.
1
/ *
may be. a better credit risk than
part of $14,000,000 expansion pro¬
most large cities.
One organiza¬
gram at several of the company's
municipal bonds
Paul M. Eliot of Mansfield,^ tion that rates
plants.
Other principal under¬
does
riot
rate
cities
and school
was moved up from vice presi¬
writers were Blyth & Co., Inc.,
districts of. less than 10,000 pop¬
dent to president of the Ohio
Goldman, Sachs & Co. and Leh¬
ulation,. while another organiza¬
'V:.,
MEMBERS
New
Cincinnati
whole
should
fidence in these
of what
bank -examiners
national
.
Pfd.
Hatfield Part
the above bank
the stand taken by
examiner be an example
ence to give them his verdict on
.
Pfd.
Gruen Watch Co., Com. &
of the great
Now, as is typical
their bond account and
McDonald & Co.,
& CO. Inc.
CINCINNATI
not rated "A"
were
majority of banks in Ohio, this bank owns only municipal and U. SJ.
Government bonds. Thus, the examiner had told the bank to sell any
municipal bonds that were not^v.'t;
others are making the same rec*
rated "A" or better.
Three aspects of this story are ommendation in recent months. If
by the Federal Reserve System'
Robert
Hayden, Mil¬
In the group were
MUNICIPALS
that
small
a
place, the ex¬
aminer most certainly erred in his
method of distinguishing between
high
grade
and second
grade
bonds.
The obvious assumption
that a bond rated "A" is a high
preferred Plate Road
Industrial Railway.
($10,000,000) of $4.50
Series
A,
of
stock,
PENNSYLVANIA
of
lie was vice presi- !
Pearson-Taft
Co.
of
ii:
.
were
100,000
in the investment bank¬
Chicago.
Ripley & Co. which offered
man,
MICHIGAN
business
of his
most
■
by KuhiV Loeb & Co. and Harri-
KENTUCKY
be¬
president and will be
in the company's Chi¬
field.
ing
& Co. and Lehman Bros., act¬
Q
OFFERINGS WANTED
omo
spent
career
Dillon, Read & Co., Glore, Foring as agents, arranged the sale.
has
1940,
office. A director of Pere
Marquette Railway, Dwyer has
V
"
of the
Corp.
cago
and Connecticut Mutual
Co:
ance
"
TERMINAL BUILDING
Light
&
November,
located
Insur¬
Life
Mutual
Penn
York,
.
associated with Otis & Co.
vice
,v as
Insurance
Power
Corp.
*
John E. Dwyer, trustee
Inland
Mutual Life Insurance Co. of New
bonds
MUNICIPAL-CORPORATION
participating in a
Si:
Si:
country town in mid-western Ohio, the cashier of d
small national bank related a most interesting story last week of
how his national bank examiner had told him to sell all his bonds
In
cashier of the bank into
the National
to the Continental Motors
Co., New England
Mutual Life Insurance Co., Sun
Life
Assurance Co.
of Canada,
COMPANY
DIXIE
In, insurance
Life
//'■
$30,000,000 "VT" revolving credit
Co., Equitable Life Assurance So¬
ciety of U. S., Massachusetts Mu¬
tual
Life
Insurance Co., Aetna
WEIL, ROTH & IRVING
Member Cincinnati
Bank of Detroit
ropolitan Life Insurance Co., New
York
Life Insurance
Co., John
Hancock Mutual Life Insurance
TI-IE
;
Cleveland Trust Co. was among
17 .banks headed by
due in 7 years.
;
Kentucky
-
h
H/2%, and the notes are
mium of
OFFERINGS WANTED
bonds," due in 1964,
amount plus a pre¬
new
at
*
eH
paid;
Ohio
Exchange
sinking fund bonds. Over Firms sponsored the meeting at
$8,000,000 five-year serial notes Which Percy W. Brown of Hornoutstanding have already been blower & Weeks, presided.
CV 496-497
CHERRY 0260
and heads
of Gulf of Cleveland banks
of
Stock
Steel Co. 4V2% first mort¬ Association
$5,748,000
gage
Cleveland 13,- O.
=
Bell Teletype
.
Security Dealers, Inc.
June 17 and on Jun<* 5
on
retire
will
Cleveland, National
Bond Club of
general mortgage
4V2%
standing
bonds
out-*
redeem $57,577,500
will
It
Current
><;■..~[■/iV.'
announced.
Quoted
—
has sold $50,000,000 of 3V2% first mortgage sink¬
The company
Michigan Public Service
By J. A. WHITE
and bank
Refinancing of its outstanding funded indebtedness
completed by Republic Steel Corp.
Common
and
r'v
Ohio Brevities
Mansfield Tire & Rubber
Preferred
chronicle
J. A. White & Co.
Building
Union Central
14
Teletype CV 594
BROADWAY
NEW YORK 6
Building
Cincinnati 2,
Cleveland Stock Exchange
Teletype
CI
163
'
Ohio
Telephone
-
Parkway
7340,
-.,<W
-Volume 159
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4284
No representation is
ffffNtiNNyfj ■■
'
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made by the underwriters that the interest on the Bonds is or will be exempt from Federal Income Taxes.
iiNNcNv-ifiF :,y "
.
NfN:
New Issue'
<■-
2147
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NAN'y.'N'FNA
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May 24, 1944
>"'*
f
,
'■
l»iwi^i00o,oo(^^®^
California Toll Bridge Authority
San Francisco-Oakland Bay Toll
Bridge Revenue Bonds
(Refunding Issue)
Dated
June
Due
1,1944
All of the Bonds, or all
of the Sinking Fund Bonds,
k
are
redeemable
as a
whole by the Authority
and March
1
date
on any
on or
shown below:
i5 as
after March
1, 1950,
and prior to
redeemable prior to maturity in part by the Authority on or after March 1, 1950 (but not prior to said date) in
inverse order of maturities but only after or simultaneously with the retirement of all of the Sinking Fund Bonds; the Sinking Fund Bonds are
redeemable in part by the Authority on or after September 1,1945, in each case by lot on any interest payment date, but only out of funds -. > y
available therefor under the Resolution; all on published notice of not less than 30 nor more than 60 days and at the following prices
'
plus;accrued interest: prior to March 1,1947,103^%; on or after that date and prior to March 1, 1949, 103%; ton or after that
idate and prior to March 1,1951,102^%; on or after that date and prior to March ir, 1954,102%; on or after that date and
prior to March 1,1957,101^%; on and after that date and prior to March 1, i960,101%,-on and after that date and
prior to September 1, 1962, iooj^%. ;
. . '
.
> *
,
maturity; the Serial Bonds
~
September
are
,
$20,000,0001%% Sinking Fund Bonds-due September 1,1962
Price To Yield 1/
(and accrued interest)
$36,000,000 Serial Bonds
Due
Rate
Amount
Rate
Amount
Maturity
•
Due
Maturity
9-1-50
1.20%
3-1-51
1.30
3-1:55
1.80%
1.85
3-1-56
1.85
1,365,000
2
9-1-56
1.90
1.55
1,380,000
2
3-1-57
1.90
1.60
1,395,000
2
9-1-57
1.90
1,410,000 '
2
3-1-58
1.95
1,425,000
2
9-1-58
1.95
1,440,000
2
3-1-59
1.95
2
9-1-59
1.95
.60%
3-1-46
.70
1,060,000
m
9-1-46
.80%
1,210,000
2
9-1-51
1.40
1,075,000
m
3-1-47
.90
1,225,000
2
3-1-52
1.50
1,090,000
3M
9-1-47
1.00
1,240,000
2
9-1-52
1,105,000
3H
3-1-48
1.05
1,255,000
2
3-1-53
1,120,000
3M
9-1-48
1.10
1 1,270,000 i
2
9-1-53
1 1.65
1,135,000
3%
3-1-49
1.15
1,285,000
2
3-1-54
1.70
3M
9-1-49
1.20
I 1,300,000
2
; 9-1-54
3M ?
3-1-50
1.25
:
1,150,000
1,165,000
;
2%
$1,180,000
92
i,i?5,oooij
I
>
-
Maturity
9-1-55
9-1-45
3M
v
Due
Rate
Amount
>
>2
W%
1,045,000
$1,030,000
Yield to
Yield to
Yield to
$1,315,000
1,345,000
■
11.75
:':
2%
1,330,000
k
-
1,460,000
(and accrued Interest)
These Bonds
are
offered when,
as
and if issued and received by
us
& Herrington, of San Francisco and Messrs. Hawkins,
It is expected that delivery in the form of Temporary
and subject to approval of legality by Messrs. Orrick, Dahlquist, Neff, Brown
Delafield & Longfellow, New York, Bond Counsel to the Authority.
Bonds of the Authority will be made on or about June 21,1944.
Copies of the Prospectus which should be read prior to any purchase of these Bonds may
only from such of the undersigned as are registered dealers in this State:
be obtained
Harriman Ripley & Co.
.
Mellon Securities Corporation
Blytb & Co., Inc.
Lehman Brothers
Incorporated
Smith, Barney & Co.
The First Boston Corporation
Blair & Co., Inc.
Lazard Freres & Co.
C. J. Devine & Co.
Drexel & Co.
Paul H. Davis & Co.
R. H. Moulton & Company
Incorporated
Lee Higginson
Corporation |
Bear, Stearns & Co.
;Equitable Securities Corporation
Bankamerica Company
'rv/,-7-
Alex. Brown & Sons
White, Weld & Co.
f
•
:
-V
-
•
'
,
'
.
■
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"i
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-t
Harris, Hall & Company
■
■■;.
■■■
(Incorporated)
.
.••
-
\ :
-I•:
Kaiser & Co.
Heller,4 Bruce & Co.
.
.
.
■
■■
Incorporated
Graham, Parsons & Co.
-
\
.•
Coffin & Burr
Incorporated
•
■'
^
Paine, Webber, Jackson & Curtis
Weeden & Co.
: ;■'
V
■.
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' •Cfffj'--AAf-
\N'
Incorporated
'V
Ladenburg, Thalmann & Co.
v
Stranahan, Harris & Company
y
Dean Witter & Co.
•
i Salomon Bros. & Hutzler
'•
;
'
;
-f;
i
' •
"
•
'
-
•
•'
.
L.P. Rothschild & Co,
'
•
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.
'
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•
irg
Tucker, Anthony & Co.
.
„
.
I
THE COMMERCIAL & FINANCIAL CHRONICLE
2148
^Thursday, May 25, 1944
than
Virgil Jordan Defends
Canadian Securities
America's Business Record
Provincial
Government
(Continued from page 2139)
Public Utility
Municipal
ital
^j
and "the
Wood, Gundy & Co.
in
our
prob¬
of re-employment, local and
to ask what we know .about
were
London, England
the
■;
opportunities and problems of
and
Premier
having placed the affairs of his own province
possible basis now turns his constructive eye to
broader national field, and in his recent budget speech emphasizes
it would be hard to say. One
rather that in the interval
have learned a lot of things
the
necessity of the overhaul of
the
fore
its
CANADIAN BONDS
deeply into
the manifold details, the broad re¬
sult of the adoption of the main
Without delving too
would be
the
of
report
MUNICIPAL
CORPORATION
depres¬
provincial
1 debt be
the
by
assumed
CANADIAN STOCKS
Do-
minion, but the provinces would
>
;
also be
*
burden
relieved of the whole
of unemployment relief.
western
for
benefit
immediate
An
the
would
provinces
the
V
Treasury
by the
bills held
INCORPORATED
Dominion in connection with
past provincial outlay for relief
>
TWO WALL STREET
purposes.
NEW YORK 5,
In
spite of the fact that the'
provinces have carried for
several years the whole weight
N. Y.
what
sidered
a
should
been
have
*
pi these provinces have neverthe¬
less made striking headway in the fully carried out, nevertheless did
lead
|>ast few
■
'
years.
British Columbia, backed by
wealth of varied natural
and
resources
by capable financial manage¬
ment, has placed its credits
on a
basis which vies with that of the
leading eastern provinces.
Mani¬
toba's
recent
financial
is
years
record
second
to
in
in
none
to
grievous
the
"error
default.
debt
and pro¬
the
tremendous
of
resources
find
to
possible
to
obviate
Saskatchewan, with
help of the central treasury
has succeeded in keeping its fi¬
nances on an orthodox basis, and,
^although placing an undue reli¬
ance
on its
production of grain,
has profited thereby to a consid¬
erable
years,
now
extent
in
the
past
few
and, moreover, efforts are
being made to develop its
promising mineral
resources.
Alberta, the problem child of
the Dominion, fell victim in the
Weak period of the general ; de¬
pression to the alluring possibili¬
ties of a specious monetary ex¬
periment, which,
although
never
Alberta
solution
a
The
,
leading
mediate
the
and
without
that
will
advocate
of
announcement
dicted
the
he
be
im¬
In
a
few minutes I shall intro¬
some
a
vestors will increasingly appre¬
ciate
the
greater
for
scope
profit afforded in the western
section of the markets as com¬
pared with the established east¬
contra¬
ern
that "he had
been kicked upstairs" and stated
report
situations.
that
he would retain his Provin¬
cial
Treasury portfolio
tone and there was a decided in¬
continue to work for
a
thus
debt set¬
that, as mentioned in his
last two budget
speeches, must
make provision for higher inter¬
rates
those
than
now
being
tendered, take into consideration
the
arrears
&
of interest, and agree
Company
WHitehaII3-I874
trate
ties
on
well
was
new
Ed¬
received
likely that before long
demand
will
.concen¬
the profitable opportuni¬
in western Canada.
offered
Montreal issues
demand
it
were
in renewed
certain
reorganization plan
no opposition.
The
internal issues were again a strong
as
now
appears
feature
and,
anticipated,
as
Canadian dollar in the "free"
the
reached
at
With
9%%
official
the
mar¬
♦
Municipal
♦
Corporate
only with
torian
day
emotional
nomic
far
came
sort of mid-Vic¬
a
the
which
and
would
be
greatest gift our gratitude could
give them, because we do not
know it ourselves or will not face
WPA.
seem
to have been
get much farther with
our
than-William
industries
that
since
time.
his
statesmen
to
have
developed
The
distracted
of every
nation in the
past quarter century have visited
the
Soviet
Sphinx abroad and
nomic
after
of
the
another
every
formula
for
ancient
full
eco¬
employ¬
ment have been exhumed and
hibited
the
to
in
masses
ex¬
modern
semantic
wrappings, but the
and businessmen, too,
still circle swiftly in their statis¬
tical squirrel cages in search of
the right answer to the riddle,
hoping to discover the SecTet of
the Pyramids—at least the poli¬
tical secret of permanent prosper¬
ity
and
complete 'employment
apart from war and its peacetime
counterpart of fake-work with
fake money. One begins to won¬
statesmen,
der
whether, in this ceaseless but
far unsuccessful search for the
so
have
asking the wrong questions.
answer
do
I
not "
we
not
may
assume
to
say
so.
I
submit, in these few com¬
by way of setting for our
discussion tonight, that we had
better
begin by making quite
tions are, and making
that they are what we
and
the : millions
of
brothers of
offering
know.
ours
quite sure
in America
and
sons
for whom we are
want
our
answers,
In the hundred
or
to
more
times I have discussed these mat¬
meetings, in the dis¬
humiliating decade just
ters in these
mal
and
ended, I have sometimes sought to
amuse you and sometimes to move
you, but now I shall tell you as
simply as I can what is in my
mind about them, for this crucial
is
moment
occasion
an
candor than for
These
more
for
eloquence or en¬
ten
stand
millions
to-¬
on the edge of an inferno
infinite force, facing or suf-
night
of
fering torture of flesh and spirit
which we can only dimly imagine
and which will pursue many of
them
and down
down the nights
the days to the end of their, lives.
They have asked no questions.
They know only that in one way
or another their lives have been
•(ber/of individual subscribers of
2,500,000)
should
lead
to
period of greater market activ¬
ity and the maintenance of the
"—present firm -undertone.*
* * —*
«*•>
the
roots
from the
and the rest of us from the
dan¬
of being driven to work and
live for masters-we do not choose
ger
pros¬
approximately $1,and a record num-
by
up
not
removed
outside the
Beyond that they do
serve.
why they are there,
the
stream
much
as
busy scene,
of
life
which
flows
on
before, with others tak¬
ing their places on the stage.
do
They
perceive the tragic para¬
that in truth, despite every¬
not
dox
us
thing, it is these martial masters
who command their life and labor
today, and, in the end, it was Hit¬
ler and Hirohito who put them to
-work, -because- no less
elsewhere in the
or
ultimately the only en¬
emy of peace or plenty he has to
fear, because it has always been
the greatest common multiple of
the
limitless
greed for
power
among men and groups. This war
should have reminded
us
both
labor,
in
business
and
of
*•
that,
but
far it has not, and so we face
so
the
One
mummies
for
answers
is
tions and
from
of
world
home.
to
resulted in a total sub¬
ment at home
consulted the academic oracles at
ask
future
questions and the
infallibly. And having lost it we
forgot what till that time every
consciously and surely, from the
beginning, which is that govern¬
the
did, despite
enormous and entertaining hew
the
that
almost
and
American had always known, un¬
do not
able to
'surrendered
or
instinctive
faith. which heretofore, in every
crisis or difficulty, had framed the
unique
To¬
of
equivalent of war, but so
we
have -lost
less worried about the
than
about the • eco¬
version
we are
selling
discount.
regard
400,000,000
over
Provincial
out
life—and he
torn
(which
♦
the 90,'s to
American soil to save themselves
scription
Government
to
will meet with'
pects, the successful termination
of
the
Sixth
Victory
Loan
canadian securities
them
r
less perma¬
that the debt
level
g
,
is
it
investment
ket
STREET, NEW YORK 5
issue
monton
and
The
in turnover.
crease
tlement
est
need to
going
are
tertainment.
During the past week the mar¬
ket generally maintained its firm
and
we
en¬
and
the
the
stage to take Tip the parts where
they left off. But we are not telbing them the truth, which we owe
courage
our
the martial
as
ments
general conclusion, it
now
appears
that
the
term
"prairie" and "western" prov¬
ince or city will soon cease to
be used disparagingly, and in¬
debt
recent
up
suggest what
equivalent of
war"—some peacetime mass activ¬
ity that would be as inspiring,
stimulating or merely as amusing
only
Vg.Ar'
we
war more or
as
in
6n :each other-
As
reorganization, the
Provincial Treasurer, Mr. Solon E.
Low, is now the national head of
the Social
Credit Party,
In a
Taylor, Deale
64 .WALL
thp
adjustment with regard
to varying coupon rates.
Conse¬
quently the settlement of this
long-standing problem is now def¬
initely ip sight.
'
.
the holders of its obligations.
future crises.
the
back
been
to
province can never be fully ex¬
ploited until its credit is restored,
great efforts are now being made
both within
use
this war
as
clear to ourselves what the ques¬
with the return of prosperity and
with the growing realization that
^Dominion, and by planned diver¬
satisfactory to the province and
sification of its economy has done
•everything
own
duce three speakers who will talk
Inevitably,
might
he called "a moral
icy, and by a stronge paradox men
social or economic secur¬
ity by dropping high explosives
,
vincial
a
nently
pursue
national obligation, most
and
fully
as
we
the
hope
employ our
That is what
maintain
right
con¬
will
machines
has done.
.main instrument of domestic pol¬
NY-M045
RECTOR 2-7231
income
or
has said that war has become
/
>
western
of
of its out¬
to
their"
for
A. E. AMES & CO.
i sumably be the cancellation of
*
more
or consumption
sake,; assume re¬
sponsibility for these things, and
make political capital of them to
maintain power.
War today is a
public works program turned up¬
side down.
That is why someone
ment
pre-
what
us
that
and
ideas
war.
economic
and are still
struggling under the past burden
with varying success!
:v
Not only would all
employ¬
find its peace-time
equivalent as an em¬
ployer and consumer is a much
larger problem than ever before,
though not necessarily a different
one.
The magnitude of the prob¬
lem
merely makes war
much
easier and politically more attrac¬
tive than peace so long as govern¬
ments put a premium on- employ¬
that
put,
sion of the early '30s,
L
self-con¬
been
much
consumes so
which had
the brunt of the
bear
so
post-war
we
Why this is so is an interesting
important question in itself,
which I shall not pursue tonight,
beyond repeating what I have said
in past meetings, that this total
war employs so much more of the
population than ever before, and
PROVINCIAL
revolutionary improve¬
ment in the financial structure of
to
have
and
GOVERNMENT
a
the western provinces,
new,
characteristic of this
1936.
recommendations
senses
ment, or put so much emphasis on
the problem. -Our anxiety about
it might almost be classed as a
form of home-front war-neurosis,
or
civilian shell-shock, specially
in
studies
intensive
and forgotten or
we once knew.
•' that: there is
different, more
that
scious "about
Garson
menced
not true,
formidable, menacing and strange
in the question today. Never be¬
Dominion-provincial relations, es¬
ambitious post-war program. As
view of Canada's
points out, the Do-<&
minion has a ready-made plan,'
that after a long period of study
was
finally • recommended
for
adoption
by
the < Rowell-Sirois
Royal Commission which com¬
in
pecially
Mr.
are
Everyone:
something
soundest
the
on
these
or
I
too, to comfort or
them in their trial
fear, against
time when they will return to
answers,
ourselves in our
it. Somewhere along the road that
led to this disaster during the
major industry.
.decade of delusion and confusion
William
James,? the
American,
and demoralization just ended: we
philosopher, racked his brains
years ago, or a year
lost something
Stuart S. Garson, after
hostilities.
of
materials
our
pre¬
for them the
framing
are
know,' unless
that
oft the Province of Manitoba, Mr.
Treasurer
so
painfully
anticipate peace
instead
labor
which
We
questions of the future which are
rooted in this paradox,: and the
post-war employment that we did
we
The
as we
they will tell
do
about
own way,
riddle
<
not know 25
ago,
feels
By BRUCE WILLIAMS
his
us
days,
subsidence
of the special
some
■y(>.-r'VvO :
If, after all this discussion, you
New York 5
occupies
round-table sessions we have con¬
technical.
Vancouver
Winnipeg
Montreal
Toronto
today
rest—as
to us, each in
this post-war
sidered
lems
Incorporated
14 Wall Street,
investment, management-la¬
relations, markets, education
bor
& Montreal
Direct Private Wires to Toronto
in England, Russia,
Italy,
Germany and Japan, there was no
other work to do, and no other
■1
way to live.
future
and
frame
and frustrated
as
our
ques¬
for it confused
answers
never
we
were
before, believing no longer in our¬
selves, but in the providence, om¬
nipotence and omniscience of the
unlimited State.
.
The
,,
greatest
faces
is
us
difficulty
that
,
that
itself,
business
along with labor, has lost, or no
longer has, any clear coherent
conception, conviction or philos¬
ophy of its function. During the
past decade it has suffered a deep
wound to its integrity of spirit, a
profound sense of inferiority or
guilt, from which it has not been
able to recover even despite its
spectacular
accomplishment
in
this war, and the great problem of
the future for it is to rebuild its
self-respect and purpose which
were
dissipated and demoralized
by the humiliations of the Great
Depression and the persecution of
the past decade. American busi¬
ness is drifting toward the diffi¬
cult problems of the post-war fu¬
without
ture
and
any
clear,
definite
consistent
philosophy
of
thought or action based upon any
candid
recognition of the facts
about the economic or political
consequences of the war, or upon
any
perspective of past experi¬
ence, or even any principle other
than that of momentary expedi¬
ency.
The confusion and conflict
of
toward
attitudes
issues of
which crop up
trols
crucial
the
post-war continuance of
wartime government
market
con¬
daily is dis¬
turbing evidence of the demorali¬
zation and intellectual devastation
wrought in the business commun¬
ity during the past decade. To any
the
of
observer
disinterested
ideas and behavior of business in
face
fundamental
of these
the
of
that
future
it must be
issues
evident
its
capacity to think or act
with candor, intelli¬
gence and integrity has been seri¬
ously damaged by ten years of
exposure or surrender to the po¬
litical
word-changers, the aca¬
demic
cake-eaters
and
publicopinion poll-catchers of our time.
Today, in every fundamental mat¬
them
about
ter
affects
that
the
future
American life it mistakes
thetic statistic like
come
ard
it
has
has
estimate for
or
a
a
a
of
syn¬
national in¬
a
moral stand¬
philosophical truth, and
no
ideas
of its
own
till it
consulted the totem-pole and
computed the lowest common de¬
of the passing opinion
of a random sample of indifferent
nominator
people on devious questions they
know nothing about.
>
One
after
another it hopefully
follows the ceaseless procession of
in. America spouting stooges of Statism who
)
!
Volume 159
have
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4284
promised
solution of
some
these problems by easy, comprom¬
ise or expert plan.
Its supreme
conception of policy has been one
of appeasement toward organized
labor and organized bureaucracy,
and today it is beginning to seek
escape from its political pessimism
and economic despair in a sort of
apocalyptic belief in the millen¬
nium based
the childish dream
on
that America is
kind of patent
a
cornucopia of automatic plenty or
unlimited
of
well
bottomless
a
us
forged by the hammer of po¬
can'start where
fear,
left off after
we
sufficient
a
for
substitute
a
ra¬
tional and self-respecting
labor
or
business
philosophy; It still seems
is to be
believe that salvation
to
found in spectacular
performances
of mezzo-soprano hog-calling by
professional propagandists and or¬
ganization promoters, or by of¬
fering
itself as
the sacrificial
scape-goat for past economic sins
or
errors
which were obviously
Even the business press >
universal.
has nothing to offer as a philos¬
ophy for the future except "more
government and more gadgets," a
hash
warmed-over
Hansen's
of
'
and
Keynes' stale and sterile ideas
public spending, and doses
of "whether you like it or not"
fatalism about permanent public
control, collective bargaining and
the like, as though tyranny were
more inevitable than poverty, or
preferable to it.
about
We
not
must
imagine that or¬
ganized labor has escaped this
process by which expanding gov¬
ernment power demoralizes, dissi¬
pates and destroys the self-respect
and integrity of groups of free
citizens in the community; For its
part
it has been endowed or
drugged by the State with a false
sense of power which has its roots
and
nourishment
in
the same
ambition
labor
to
time marches on.
as
But I
not
am
which it inevitably leads. Let us
not pretend to them that, for the
ington, these boys may come back
believing that civil liberty is less
important, or less problematic in
violent
and futility
business
labor
It
ment.
either
of
.
first time in human history, some¬
thing
happened
has
the future than
in America
a
full
them
the
economists, business men or labor
leaders, lie to them by making
words
mean
"national
planning"
anything different in the
personal compulsion. Let
end from
us
rather tell them the bitter truth
choose, but let
them
believe that
ment
can
we
that the quarrels and conflicts we
have been having here at home
that because business
about economic
ment did
leges
are a
the
ultimate
rights and privi¬
them
tragic illusion, and that
question
beneath
or
not
and
or
fession of sin
past
on
govern¬
em¬
offer to sell
State which
confusion and fear the
business
the
in
world.
It is
them,
be
who*
for silence
be
among
them
solicitation of
an
leaders,
above
all,
that
any
humiliated
should lend them¬
for whatever purpose
popularity or power.
selves to it,
It
does
not matter
to
what
me
others may do or say about these
things henceforth, but when some
smooth-tongued wizard from
Washington or elsewhere puts to
me
the typical twisted question
with which the patriotism and
pride of the American people has
been: slowly poisoned during the
past decade, and asks whether I
want to bring back the days of
Harding and Coolidge and Hoover,
of Teapot Dome, and Ed Doheny
and Albert Fall, and Inslill or Musica or Whitney or ^what not, I
shall look him straight in the eye
without
"Yes."
shame
And
fear
or
if
why, I answer
words which a
and
say:
asks me
him in the moving
Russian immigrant
anyone
of many years ago,
sky,
set
time
since
down
Simeon Strununnoticed some¬
in his
column
in The
Times:
•
"It is not true that the only kind
the
above
pect to build after the victory has
for
been
im¬
won.
fought
be
a
This
only
America
potence;. but the record then, as
always' before,
shows that
no
group among us and no govern¬
nor a
the
of America worth defending is the
'better' America which
we
ex¬
in
or
business
should
of passing
who knew better, may
or
blamed
to
a
and
false¬
were
than
worse
It. is, treason
shameful incitement to class
strife in the American community,
Twen¬
elsewhere
or
Those
or any
To pre¬
spirit and faith of American life.
of all, to which none in the
community we re
immune,
in
America
calamity
have endured.
we
otherwise
falsehood.
and
the
nesses
repudiation of the
the part of business or
an
on
>
or
This announcement is neither
tend
remember
it, they and their parents were as
a part of business as every¬
body is today, and as they will be
once
more, sharing
its sins, its
virtues,
its
failures
and
its
achievements
with
everyone
in
America.
The errors or crimes,
the ignorance or greed" the in¬
dolence or injustice, which may
have brought down the great de¬
pression of the Thirties, or any of
the past, were the common weak¬
ployment, either in the Thirties or
them all is not whether some¬
at any time before in the past
body's plant can be seized for any century and a half, business be¬
reason, but whether any business trayed them or the American idea
man or
labor leader, or anybody
has failed.
They are being told
whatsoever, can be shot in the this day by day, as we have been
back of the head for no reason at during the past decade, not only
all.
They may understand that,' by the w.ord-changing wizards in
because, before they emerge from Washington but by business men
the inferno where they are suf¬ and labor leaders, and it is a false¬
fering and crushing the irreversi¬ hood more cruel than any wound
ble force they are fighting, they of flesh or faith this war will in¬
may have seen with
their own flict upon them. The self-betrayal
that lies beneath any such con¬
eyes, and without looking under
the bed, the ultimate implications
of unlimited government power
others
to
much
could not give
both freedom and full
in
have been too young to
govern¬
give them both.
Above all, let us not tell them,
''
in this economic
us,
them
ties, or at any other time, was a
thing apart from everyone else in
America, a collective group of
people with complete power and
sole responsibility to make pros¬
perity or depression for everyone
else, which they were too wicked,
selfish or stupid to use with the
wisdom, benevolence and purity
which has since been permanently
established
in
public
office.
Though most of these boys may
belly. Let
usnot, as;
;while they were gone that makes
as
war
for
is
justified if
the
deefnse
it is in 1943.
justifiable
(Continued
war
of
It would
for the Amer2153)
on page
offer to buy any of these securitiesf
The offering is made only by the Prospectus.
.
NEW ISSUE-
$23,000,000
Virginia Electric and Power Company
■
to
both
First and Refunding;
of either
they face the
as
employ¬
post-war
seems
or
revolution
darkness
hood that
dangers of the world of free¬
dom' and
bedded ; down
in the
bureaucratic lamaseries in Wash¬
of
our
aban¬
to
force
defending
their faith
abandons
despair of de¬
is
the spirit of that hopeless purga¬
tory of Europe and Asia where
they are.
Let us not confirm to them by
the
ignorance,
indolence
and
and never will except by
and
pendence
doned the flesh and the devils and
of
the confusion,
psycho-analyze
problems
anvil
have
the
are
destroys
attempting tonight
frustration
or
1/
the
on
guilt-complex and sense of in¬
feriority which has so profoundly
crippled business, and which we
may be sure will bring its own
bitter disappointment, disillusionbient and frustration, to organized j
r
things
been
who
men
who
it
America
business
security, compulsory saving, com¬
pulsory labor, compulsory con¬
sumption, compulsory occupation,
location, leisure, speech and fi¬
nally thought.
No one yet has
cost, anybody anything,, and we
though it never hap¬
pened.
Sometimes
it imagines
that exhibitions of public selfflagellation and conspicuous dis¬
plays of synthetic hair shirts, are
these
broken this chain wherever it has
gether and still links compulsory
mass
as
brothers
for
them
us' tell
truly, even'though they may not
care
anything about them. Like
Mr. Vargas, who explained it all
to his people in Brazil the other
day, when he promised that he
might allow them to vote for him,
if they wanted to, after the war
is over, or like many of our own
litical
over
Let
rigorous, iron chain of cause and
effect which has always bound to¬
wealth; that the war won't really
it is
is a brutal breach
of trust to the millions of sons and
ruined cities..
not conceal from them the
ment had a Thonopoly of guilt or
of innocence, of folly or wisdom
labor leaders,
employment for anyone without to; do good to others, at home or
planning his occupation^ spending, abroad, in terms of concentration
saving and consumption for him.: camps, corpse-filled trenches and
Let
2149
me
!
H
i
that before
Mortgage Bonds
•>tv
Series D 3%, due April 1,1974
frame the
(can
questions and the answers of the
for the men in the
battle
far-flung
frankness
inferno of the
and
truth
with
future
line
there
fundamental facts
some
are
Price 103'/4%
must
we
face
or, flasehoods we must fight
ourselves if we are to keep
in
faith with them,
ourselves
•>
Plus accrued interest from April 1,1944, to date of
J
We may delude
matters for a
«
these
in
time, as we have been doing, but
let us no longer lie to the men in
hell about them. I shall mention
a
few of these fatal falsehoods
Copies of the Prospectus
briefly and bluntly before I in¬
troduce our speakers, and leave
them with you
Let
us
not
as
may
may
delivery
O'."'
hv
;;
be obtained in each State from such of the undersigned
legally furnish the Prospectus in compliance with the laws of such State.
till we meet again.
tell
these
sons
brothers of ours that we, or
and
labor,
government, are going to guar¬
them. economic security in
any
sense and still'leave them
their civil liberty
and personal
or
antee
Incorporated
freedom, if they still want it, It isj
not true." The governments they
fighting have demonstrated in
the past decade, and the whole.
record
of
human
experience
Stone & Webster and Blodget
..
The First Boston
Corporation
•.
?
*'
Harriman Ripley & Co.
Incorporated
are
proves
them
•
that it is a lie. Let us tell
rather
that
nobody, can;
.pledge them full employment as
workers or permanent purchasing
power
ajs. consumers
without de-t
priving them one by one of every
individual
freedom
they
have.
Let us- tell -them frankly, that not
one can fix a national income fig¬
people or enforce a sta¬
tistical standard for employment,
for
ure
or
*"
(Incorporated)
Estabrook & Co; '
1
Lee
Coffin & Burr
Kigginson Corporation
Incorporated
■
i Hornblower & Weeks
Hayden, Stone & Co.
I W. E. Hution & Co.
a
payrolls
still
Harris; Hall & Company
White, Weld & Co.
Shields & Company
C. Langley & Co.
Glore, Forgan & Co.*
Lazard Freres & Co.
Kidder, Peabody & Co.
Goldman, Sachs & Co.
BIyth & Co., Inc.
leave
or
consumption and
everything,
or
thing, about the life, labor or,
thought of everybody or anybody
as it was before.
Let us tell them
instead that nobody, business or
government,, can plan tomorrow's
Paine, Webber, Jackson & Curtis
The Wisconsin
Tucker, Anthony & Co.
;
1
any¬
■
.
■■
I
Riter & Co.
Company
,
V370
i|)
May 24, 1944.
rii-»J
'J
:
'
■'*<< ' /
,
■
the commercial & financial
Can We
PRIMARY MARKETS IN
A
..
vv
The
STOCKS
BANK and INSURANCE
-<
Spend Ourselves Rich?
pinch-hitter
changed
Utah,
was
snowdrift
A
Eccles.
Marriner
in
the
Ogden,
of
course
NEW YORK, BOSTON, CHICAGO,
CONNECTING:
ANGELES, SAN
SYSTEM
WIRE
LOS
LOUIS,
ST.
7535
CG-105
1-2875
NY
Street
Salle
La
FRanklin
0650
HUBbard
8-0782
WHitehall
S.
135
Square
FRANCISCO
PROVIDENCE,
7008
Enterprise
PORTLAND,
0011
Enterprise
HARTFORD,
SEATTLE
AND
TO
TELEPHONES
7008
Enterprise
This Week—Insurance
Stocks
insurance
fire
•
a
few miscellaneous matters
dealers in their shares.
1923450
normal
operations of
the
which presumably
have brought back prosper¬
economic cycle,
pertinent to
companies, and of interest to investors gnd
This week we discuss
stock
DEUSEN
his
fulfilling
(2)
would
the President began doping
the patient with a series of quack
ity,
remedies.
The
v
,
.
■.'
.
,
that
import.,of
this
as
believes
observer
Bulletin
primary long term trend
is upward, he
that the
Many
request
on
shift.
of the stock market
looks
installation of
for lead¬
for higher prices
insurance stocks sooner
or later.
The previous high of the
fire stock index was 124.3 in Feb¬
fire
ing
1936, and the 1929 high was
249.1, to reach which the stocks
iwould have to more than double
Laird, Bissell & Meeds
Members
"
•'
price.
•:
■
•
-
Losses—April losses in the
.United States, according to fig¬
'1:1. Fire
:
ures
released
National
the
by
Board of Fire Underwriters, were
This
$34,746,000.
11%
March and
for
losses
the
below
is
figure
York
New
120 BROADWAY,
Exchange
Stock
NEW YORK 5, N. Y.
machinery
ex¬
code
code
price-fixing clause; the
a
added
President
it
in
his
Burlington Gardens, W. I
and
printing firm; our code re¬
quired us to raise many commer¬
cial printing prices 100%.
Wages,
up 10%o; prices,'as much as 100%.
Federal Investigation — The
Ostensibly done to raise the pur¬
South-Eastern Underwriters case
chasing power of the masses!
is now awaiting a decision by the
Trading Department)
L. A. Gibbs. Manager
States.
the
of
Court
Supreme
United
First
The
Meanwhile, the ,Van Nuys-
"Compensation"
of
form
Some
"compensatory
/
of last
£115,681,681
Associated Banks:
tional Association of Manufactur¬
and
ers
the
Commerce
to
their
S.
U.
have
been
the
members
Glyn Mills & Co.
preaching
plants of the coun¬
losses should return to the
United
years
States
losses
fire
Annual
level.
the
over
have been as follows:
,
1931—
259,160,000
293,357,000
1936
284,720,000
1938—
—
———'
'
—i
;;
—
1943
302.050,000
313,499,000
306,470,000
j:
1942—-
•
$422,215,000
463,613,000
452,017,000
442,143,000
316,897,000
275,652,000
,1937
;
normal
in the
past 15
..a.——
322,357^000
314,849,000
im¬
vital
maintaining a com¬
petitive system.
The fight against greed—in the
form of monopolistic practices—is
as
old as the fight against sin.
Australia and New Zealand
bank" of
new south wales
QUESTION
ment
is
to
at
come
will
380,235,000
It will be observed that the year
greatest loss was 1930, with
$463,613,000, and the year of least
was 1935, with $259,160,000.
of
.
Of course, no one
let
rect, it will conclude that public
interest dictates that the regula¬
that
of
tion
insurance
should remain
with the states unless Congress
Rates—Although fire,. losses
have been increasing since 1940,
self
s
rate
reductions
been
effected
recently
have
in
two,
important
New
fire
premium rates have declined from
states,
viz.,
York.
Since
Michigan
1933,
and
average
J.78 cents per $100 of insurance to
i60 cents, a
reduction of 23%. An¬
nual fire premium volume, how¬
ever, with the 23% lower rates,
was approximately $580,000,000 in
1943 compared with $450,000,000 in
1933, an expansion of $130,000,000,
29%.
Some
New
York
should
even
if I
should
deem
am
otherwise.
it¬
But
the court
precedent,
wrong and
strike
down
agents and companies have
obligation to themselves and to
public. We should adapt our¬
selves to the new conditions in a
manner that will justify the con¬
tinued confidence of our millions
both
Fund
Reserve
Liability
past 20 years and
Aggregate
Assets
Sept., 1943
falls
below
General
Head
when
the
national
income
goes
ditional
productive capacity, the
government will increase taxes,
reduce
spending, and resort to
other deflationary devices.
Stuart Chase argues:
union limits the size of the
members
of
Philadelphia
the
New
Stock
Copies of this circular
upon
sales of electrical energy.
Hano.
York
and
Exchanges.
be had
may
request from Newburger &
paint
brush and outlaws the spray gun,
a union electrician must be em¬
if
ployed
has
to
every
time
an
be inserted,
electric plug
a standby
if
orchestra must be hired alongside
of
every
juke
box,
don't worry;
government spending will, "com¬
pensate."
-.If cartels
are
formed to hijack
government "spend¬
ing will make up his losses.
the consumer,
30th
f
£187,413,762
K.B.E.,
.*
Manager
:
'
The Bank of New South Wales Is the oldest
to
New
Zealand, the Pacific
it offers the most
London,
efficient
em¬
traders
f
.
branches
800
what
be
bank in Australasia. With over
in ail States of Australia, in
and largest
Islands,
and
complete
and
service
to
investors,
travellers interested in these
and
Threadneedle
E.
Street,
C.
Berkeley Square, W. 1
47
.
"
•
f
LONDON OFFICES:
29
•
banking
countries.
Hansen, Harvard pro¬
fessor, answers: "Congress should
establish a Monetary and Fiscal
Authority. ..*. The Executive, act¬
ing under the advice of the Mon¬
etary
and
Fiscal
Authority,
should be empowered to increase
or curtail
public improvement
He should, more¬
expenditures
Agency arrangements with Banks
throughout the U. S. A.
NATIONAL BANK
.
...
over
be
...
to
and
empowered
of EGYPT
...
Office
Head
.
.
Commercial
5
Cairo
Register No.
FULLY PAID CAPITAL
RESERVE
bold social
engineering."
448.)
6 and 7
(Fiscal
;
•
While
1
Cairo
lowed
to
King William Street, E. C.
all
the
in
principal
Towns
in
EGYPT and the SUDAN
NATIONAL BANK
of INDIA. LIMITED
Bankers
Branches
will
the
to
Kenya
Head
Government
and
Colony
In
Uganda
Office:
26, Bishopsgate,
London, E. C.
in
India, Burma, Ceylon, Kenya
Colony and Aden and Zanzibar
-
.
Subscribed Capital
£4,000,000
Paid-Up
£2,000,000
Capital
Reserve
The
i
IIOW
AGENCY
loose
thority.
QUESTION 2.
be spent?
£3,000,000
.
Branches
1
,
£3,000,000
.
.
.
al¬
be
broad
establish
.
V-
•
would
Congress
FUND
LONDON
Policy and Business Cycles, page
Fund
conducts
every
description
banking and exchange business
Trusteeships
the
£2,200,000
Bank
and
of
Executorships
also undertaken
money
Upon public works, feder¬
(a)
above, unless accompanied by ad¬
.
Utility Interesting
.
George Street, SYDNEY
Office:
Alvin H.
figure, the government will
spend enough to bring it back up;
If we lived
under perfect competition, unem¬
ployment and depression could
not occur.
But competition has
disappeared in 50% of our econ¬
of policyholders. We have a great
omy and exists only where busi¬
business, we have earned an im¬
ness
men
have been unable to
portant place in the life of our
abolish it.
v
country and we do a real service."
In other words, if the painters'
variably resulted in increased
income
8,780,000
DAVIDSON,
ALFRED
SIR
limits, the general effect is to take
away "the power of the purse."
Congress cannot be trusted to act
according to Hansen's fiscal prin¬
ciples — instead, would logroll.
Furthermore, Congress can not
act quickly enough.
By the time
it has completed the deliberative
process, a mild depression might
become violent; steps it was de¬
bating may be outmoded. The ex¬
at an agreed-upon figure— ecutive—advised by his experts—
say, at 160 billions.
When must be given virtually full 'au¬
national
the
the
State
which^have in¬
us
6,150,000
of Prop—
,
an
agentSi"view with alarm" the of¬
Delaware Power & Light Com¬
ficially ordered reductions while
others look upon them as an op¬ mon shares offer an interesting
portunity to sell the public more situation according to a circular
insurance. They point to the "in¬ issued by Newburger & Hano, 1419
centive rates" initiated by many Walnut Street, Philadelphia, Pa.,
public utility companies over the
come
prophesy the court's decision,
but I think, and I hope I am cor¬
loss
or
Reserve
£23,710,000 ?
govern¬
level,
have
.
concerned.
£8,780,000
Capital
*
national in¬
precise
a
mechanism
ployed?
If the
1:
keep the
.
can
1817)
(ESTABLISHED
Paid-Up
economy:
the intent
pump-priming. The President, in
a
recent address before the Ne¬
fact, kept promising every .year
braska Association of Insurance
up to 1938, that fie ^ould A'soon
Agents, Mr. Manning W. Heard, balance the budget."
Vice-President, Hartford Accident
But since 1936, a new school of
& Indemnity Co., made the fol¬
economics had been born, a schdol
lowing
remarks: "And now I that
believes
in
government
should like to refer to the Southspending as a permanent policy.
Eastern Underwriters case pend¬
Their program calls for a Com¬
ing in the Supreme Court of the pensatory
Economy. / "Fortune
United States'. I cannot help but
Magazine" is the more respectable
feel that the court, even though it
of its advocates; Stuart Chase, Aldisagrees with the doctrine of vin Hansen, and Dr. Abba Lerner
Paul vs. Virginia, will recognize
are its leading spokesmen.
the force of precedent and main¬
In
a
Compensatory Economy,
tain the status quo so far as the
the federal government will guar¬
application of the anti-trust acts antee to maintain the national in¬
are
>
of
portance
,
try moderates and hazards are re¬
duced.
In
the
post-war
years
i
was
never
-
the industrial
!
it
Ltd.
Bank,
Deacon's
Williams
of
Chamber
Bailey Senate Bill,
that
ASSETS
TOTAL
remark—
private enterprise will not
long endure under monopoly—ex¬
plains why the heads of the Na¬
which asserts spending" had to be devised. If determine the imposition
of the' idea hadn't come from Mar¬ withdrawal of taxes.
Admit¬
year.
Total losses for the first
Congress that the Sherman and riner
Eccles, it would have come tedly, Congress may be reluctant
;four months aggregated $150,682,to
Clayton anti-trust acts should ap¬ from someone else.
delegate power to the Execu¬
:
y;y.''£T tive,
000, compared with $134,363,000
on
so vital a matter as the
ply to the insurance business, has
When large
scale government
;and $124,849,000, respectively, for
been referred to the full Senate
spending — initialed CWA — was timing of the application of tax
;the corresponding periods of 1943
Judiciary Committee.
The com¬ started in January, 1943, no im¬ rates and expenditures. But if we
and
1942. This upward
"war
panion House bill has been re¬ portant official thought of it as are to make the economy work¬
trend" is likely to continue until
able under modern conditions, it
ported out of committee but floor
high pressure war production in debates have not yet started. In anything else than a stopgap—
will be necessary to engage in
1% above the April figure
W. /
64 New Bond Street,
that
own
I own a newspaper
handwriting.
1-1248-49
Teletype—NY
Bell
new
cept by permission of the
authority.
The petroleum
lacked
Telephone: BArclay 7-3500
ruary,
in
prohibited a second
The textile code prohibited
codes
Charing Cross, S. W. I
49
Company
much
Smithfield, E. C. /
8 West
direction of fire insurance stocks has been
The
Ten
Commandments
have
downward since July, 1943, and appears to be a secondary reaction
First, devaluation of the dollar. never been fully observed and
from the strong upward trend which started in April, 1942. As meas¬
Second, Triple A—killing little perhaps never will be. But when
ured by Standard & Poor s Index v
pigs, paying farmers not to pro¬ we give up the Golden Rule as
of, fire
insurance
stocks, they
duce.
(Designed, no doubt, for the ideal of human conduct, the
anoved from a low of 86.8 on April
When we
the benefit of one-third of the human race is done.
29, 1942, to 122.5 on July 21, 1943,
population that was undernour¬ give up the fight for the competi¬
New
York
an
appreciation of 41%. Since
tive principle, we have invited to¬
ished.)
then they have slowly sagged to
Third, NRA—industries being talitarianism into our home.
the present level of 112.7, which
Seven questions will bring out
allowed to. get together to raise
Trust
represents a decline of 8%. Inas¬
prices
and restrict
production. the functioning of a compensatory
Market—The general
E. C. 2
3 Bishopsgate,
establishing
confidence
in
the
banking system by allowing only
solvent banks to reopen after the
the
By E. A. VAN
LONDON OFFICES:
monopoly have its head.
After Big Business has destroyed
little business,
we
can
arouse
hatred against Big Business. Then
it will be a simple matter for the
government to step in and take
over."
holiday;
throughout Scotland
is
"Let
•
OFFICE—Edinburgh
HEAD
Branches
monopoly.
expressed by a
attributed to Rex Tug-
remark
;
campaign pledge to cut the ex¬
penses, of the federal government
by 25%.
But then without waiting for
Bank and Insurance Stocks
attitude
of Administration
policy preceding Eccles' visit sug¬
gests that recourse to spending
would have occurred, anyway.
Roosevelt began his administra¬
tion with two sound steps:
(1)
bank
toward
movement
well:
haps not.
An analysis
Chicago 3
9
Office
Post
10
Street
Wall
PRIVATE
Boston
5
York
New
67
And again, per¬
Well, perhaps.
the
1727
Incorporated by Royal Charter
Some extremists on the Left
have,no objections to accelerating
Their
American history!
Huff, Geyer & Hecht
Royal Bank of Scotland
(Continued from page 2138)
v,
..
Thursday, May 25, 1944
chronicle'
ally controlled; after completion,
locally operated.
-
National
The
Resources
Plan¬
ning Board, to which Dr. Hansen
was
economic advisor, says:
To
provide- outlets - for -government
spending,'»the building of public
works should be centered in the
FederalGovernment.
should
not
-
be
able
A \ county
to
build
a
except in according with
Federal
plan;
too
many
must
bridges
wrong
To
might
b'e
built
the
at
'
time.
u
"persuade" local communi¬
centralized control,
ties to accept
the
Government
Federal
would
all costs and gfter completion,
turn over "operation" to the com¬
pay
munities.
\
.
f
Distribution of purchasing power
may
be
inadeauate if limited to
public works. Housing;, especially
slum clearance, offers infinite pos¬
sibilities.
But
sometimes
money
out with greater
passed
is possible
long-term construction.
than
for
(b) National dividends, there¬
fore, have been proposed by some
spenders as a more flexible meth¬
od—let
of
us
$100 to every head
$50 to every childprecise
amount
will
say,
family,
whatever
bring national income back to
bridge
the
be
promptness
;•
QUESTION 3:
spending
par.
WHEN ^ill the
be turned ON?
When the national income falls
below,
billions
say,
160
decline
billions.
calls
for
Each
a
$
prer
determined distribution of Federal
money.
-
,
Others—including Chase—would
pour out the money primarily as
employment falls.
Chase tentatively fixes 3,500.000
unemployed
as
the
danger
line.
That number may be unemployed
during good times—moving from
,
there
hesitation about in¬
require,
circumstances
should be
no
Mone¬
of the
statistics
"the
that
As the national income and em¬
Fiscal Authority are
they are unsound;
the country has plenty of expan¬
sive capacity!
Build more capac¬
ity if it does not exist!
The na¬
tional income should not remain
ployment rises, the reverse pro¬
cess begins; spending is to be re¬
duced by pre-determined amounts.
static, but should be raised. The
party out of power, having noth¬
ing to lose, takes up the cry. Cash
false."
portions like 75 billions.)
I
4" :
is
WHEN
4:
QUESTION
money
and
tary
curring deficits of war time pro¬
the
to be turned OFF?
The
knew
and
QUESTION 5: WHERE is the
money to be turned OFF?
don't
(This answer applies to the
public works method proposed by
nent!
p.
Board.)
Employment has risen, let us
by a million, but there are
still' 5 million unemployed. Pub¬
lic works then are not terminated,
cut back.
perma¬
defeatists to hold down our
be
ard of
-why, they will bitterly ask?
.-
leader
to
Depression,
Great
the
QUESTION
IS
Where
7:
the
facile
should
be
Abba
instinctive
almost
that
we
revul¬
idea of
to the
have
overcome.
der to
pay
a
ings
—
Only after certain
reveal human fail¬
sometime infinitely more
program
in
Rye, N. Y., June I -3
.
...
borrow-X the
would
Hansen
governments
their expenses is pre¬
by
Dr.
This advertisement is not,
chronic
unemployment
(should be) by
means Of public expenditures fi¬
nanced by a
continually rising
individual free¬
public debt."
against political use
to
influence
yoters?
Democracy thrives only
when individuals and communi¬
ties can make a living in opposi¬
tion to the existing regime.
dom stand up
attack
"The
money.
I,House?
the
of
Board
Governors
Investment ' Bankers
of
will
America
.
.
Statement of Recorded Cost
,r
V V—-
•
-•
4
"
; V
Lj/A
•}/•.;
'/
- •\
//,•>'/../
w
•
.
der the Plan
..
.
..we
of Work Performed During the
27,1944 and March 29,1943
*'•>*.■ > f\4
.
v.
..-"r-v.
/ ^ £'♦./
■'
5
..
new
"
•
'
new
47
-
adjustments)
27, 1944
.
March"'" *
29, 1943
4
.
' .j
X
V
r
•
,
"
..
.
Totals
,v
,
May 18, 1944
rector, filling a vacancy.
V.;..
tit
*
tj!
Harold R. Lc Blond, president
of
Le
Blond
of Cincinnati,
Engineering
677,000
$33,477,000
$33,761,000
has been elected
gate to Chester Apy will be con¬
sidered
War
Paul
Home
J.
on
May
June 1. It is understood
an
Transfer of the Exchange mem-,
breship of William L. Strong, Jr.,
to Robert L. Gill will be consid¬
ered on June 1.
Both are part¬
15 was
ners
in Mallory, Adee
Edward
S.' Moore,
the Exchange,
Leonard
A.
died
& Co.
member
on
Cohn,
May 17.
Spencer B. Koch & Co., New
City, died on May 13.
be construed as, an offering of this stock for sale or
this stock, or as a solicitation of deposits un¬
"
;
K. I. FLETCHER ;
'
deposits is made only by the Prospectus.
Comptroller
Stock
value
outstanding
Plan of Exchange
exchanged for new
the basis of 1 and 1/20 shares of
Preferred Stock, on
of present stock held, together with a
cash
May 31, 1944, unless prior
thereto the 100,000 shares of $4.25
available for exchange shall be
Company proposes to call for
Cumulative Preferred Stock.
Cumula-
exhausted. The
redemption all unexchanged shares of
$5
f
KUHN, LOEB & CO.
May 22, 1944
'
*
-
.. .
,
such Plan of Exchange may be obtained from
HARRIMAN RIPLEY & CO.
Incorporated
...
_
of
v
in
York"
partner
has offered to the holders of its
stock for each one share
indi¬
vidual floor broker.
Jos. Walker Co. Admits
admitted to
on
that Mr. Apy will act as an
of the Treasury's
Finance Division.
Director
tional
Copies of the Prospectus relating to
•.
f
Co.
president
and
Colonel James
Hammond was made chairman
v-;-
/ 2,325,000
By Order of The Board of Directors
X
x
X 351,000
4,
'Hydraulic.Turbines and Accessories
•
$32,733,000;
$30,001,000
lj 151,000
"Ship Repairs and Conversions
and Other .Work
early in the month,
Rupert T. Zickl of Bartram Corp.
of New York, was elected a di¬
'
Treasury and, respectively, Na¬
tional Director and Assistant Na¬
\tive Preferred Stock
i
■
X ^
of Nickel" Plate
meeting
adjustment in lieu of fractional shares, if any, of such $4.25 Cumulative
Preferred Stock. Said offer will remain open until the close of business
1
■
Construction
a
The New York Stock Exchange
and is under no circumstances to
solicitation of
$4.25 Cumulative
/;
v
*Sf "'X.
«'' v
March
....
At
stockholders
128,531 shares of $5 Cumulative Preferred Stock a
whereby such $5 Cumulative Preferred Stock may be
,
-
;
* 'o
,'•••.
-
-
•New Ship
1943 he was made oper¬
vice president of Nickel
the larger
The M. A. Hanna Company
v,
*
»
vice
Plate.
the
$4.25 Cumulative Preferred
Thirteen Weeks Ended
1
assistant'
The M. A. Hanna Company
.
.
so
(Subject to year-end audit, charges and
f .XV-
-became
100,000 shares
shall have no ex¬
internal debt.
An internal debt is in fact
different from what we com-
debt-free
■
V'L
March,
ating
.Association
in Rye,
offer to buy or exchange any of
of Exchange mentioned below. Solicitation of such
or as a
ternal debt, only an
»
•
he
of the war,
Thirteen Weeks Ended March
•"**
Chesapeake & Ohio and in
1940
their
%
.
"We shall come out
weapons
exchange,
on
Newport News
Shipbuilding and Dry Dock Company
.
of
;
his railroad career
president and • assistant to the
president of the C. & O.,- Nickel
Flate
and
Pere
Ma,rquette.
In
be' held
without par
''
with
>
\
'
began
variations.
equal zeal use every "legitimate"
to prevent "the party of
t left
wing totalitarianism? from
fever getting back into the White
-means
*
Beal
."
Lerner as a
astounding discovery.
question; so is Dr.
Lerner—each with his own
[
r"
has retired.
The regular spring meeting of
;
partnership in Joseph
Walker
& Sons, 120 Broadway,
and ••
But
New York City, members of the
governments have always known
it.
In. ancient times rulers
de¬ New York Stock Exchange. ,W.
based the metals
used for ex¬ Seymour Smith retired from part¬
change. In more recent days, gov- nership in the firm on May 12.
sented
the
answer
is
Government
need not resort to taxation in or¬
willing to
is
Hansen
H.
Alvin
-Likewise, if a Republican Adiministration gained these powers,
twould not
its appointees with
Government
of
the
.and
This doctrine that
.
.v
Virginian Railway Co., one of the
country's leading coal carriers.
He siicceeeds Carl Bucholz, who
,
printing jnoney and the tendency
to identify it with inflation can
they still do not satisfy those who
sincerely want to know the me¬
chanics of getting the money.
;
I economic methods."
can
sion
the money
problem.
But
a
has
-
answers
be
not
X instead
X "The
finding
that
imply
I depression will automatically foL
Mow ."the return to reactionary
such
will
attract day-dream¬
Beale, who has been
past 30 years,
been made president of • the
-
employment.;
by Chase
created full
These
Frank D.
railroader for the
a
professional solicitation of
has
announced
the
following,
investors. Particpating
changes:
saved the trouble of making in¬ in the meeting will be Ted R.
;
Transfer of the exchange mem-,
terest
payments.
(Italics sup¬ Gamble and Edward B. Hall, both
bership of the late James C. Col¬
assistants to the Secretary of the
plied.)
Europe, re¬
built her economy. Twice in our
generation—during war—the U. S.
has
$184,000,000 five years ago. Sid¬
B. Congdon is president.
~
ney
shall
bonds
country; in
poorest
should
rency
when Mussolini went into
Ethiopia. Japan could never fi¬
nance a major war, said the ex¬
rupt
recognize the
the
,
Italy was bank¬
Chase answers:
win the
fTugwell, Felix Frankfurter, Tom¬
my
Corcoran — sincerely believe
itheir first duty must be to keep
the opposing party out of office;
How long
means
.
coming from?
money
| instinct to use all power within
to aid the "cause"? Experts
—men like Leon Henderson, Rex
,
other
money,
is
largest
.
tempo¬
were
cerned, the Great Depression" con¬
tinues to scrape bottom. .. v
[grasp
of
plenty of
questions are asked
cold-blooded
,
„
the
N. Y., June 1, 2 and 3, or ten
of the board of Cleveland Auto¬
have less money to days before the opening of the
matic Machine Co.
Hammond spend; forexample, when they Fifth War Loan drive, it was an¬
is a former
publisher of the
would otherwise spend enough to nounced on May ; 23 through the
Memphis Commercial Appeal.
Association's office at Chicago by
bring about inflation.
.
.
Le
Blond
became
a
director
'X "As long as the public is willing J. Clifford Folger of Folger, Nolan
along with C. M. Jacobs, Cin- ;
to keep on lending to the govern¬ &
Co.,
Washington, President.
cinnati
attorney,
and
E.
G„
ment there is no
difficulty, no Among other business of the meet¬
S c h u 11 z
also of Cincinnati. ;
matter how many zeros are added ing, Mr. Folger said, plans will be
Sehultz was elected vice presi¬
to the national debt. .'V
:
perfected for intensifying in the
dent and treasurer.
"If the public hoards, the Gov¬ Fifth War Loan the "drive within
drive"
which
the
securities
ernment can print the money to a
meet its interest and other obli¬ dealers .of: the. nation have con¬ New York Stock Exchange
gations, and the only effect is that ducted in connection with each of
Weekly Firm Changes
the public holds Government cur¬ the other war bond campaigns by
Boards, of course, will be "in'dependent." But need we look be¬ perts. Hitler would not be able
yond the present boards in Wash¬ to get the money to attack rich
ington, filled with ideological en¬ England and France. But they
thusiasts looking to the President
all found the money.
Russia, the
their
the
payers
in the New
moratorium.
seen
foreclosures
home
f
fas
....
unhesitatingly
would
payments. . . . Tax¬
be
imposed only
when it is desirable that the tax¬
rarily forbidden. Each year now
—for
14 years—the moratorium
has
been temporarily
extended.
As far as this privilege is con¬
be
will
ing followers.
ation
'44":ri: *' 4
public
foreclosure
During
feverish.) ■ If the executive can
keep the Congressional districts
back home in fear of the with¬
drawal of public funds, few Con¬
gressmen will be able to hold out
against him. (A few well-timed
promises of bridges for Florida
; helped
Senator Pepper
jrecent primary.)
'
be
may
York
intimidate as well as
Competition for the favor
Administration
living?
favors
not only
can
the
are
Huey Longs who will be delighted
to promise bigger and better def¬
icits—with every man a King.
make money
stand¬
How difficult it is to end
economic, but political "possibili¬
ties."
An
executive with these
of
there
sure
dictatorship to resolve the in¬
print
Why allow pikers and
4-5 hours!
What communities shall
"discriminated against"—and
jected?
bribe.
be
can
—will always
Lerner
bank
but
deficits
..
projects, upon which communities
have built high hopes, will be re¬
powers
always eager
willing to turn them off. If
are not to be feared, you
never
speech and its delivery, he saw a sound finance.
X .
Taxing is
new
light. He upped the desir¬ [never to be undertaken merely
able income to 200 billion. All in
because the government needs to
What new
Centralized power has
are
the expenditures;
on
IBA Governors To fleet
"
say,
but merely
turn
.
.
Governments
failing. (Lernerites regard Hansen harmful than those of the system
Not
it is designed to supplant.
long ago,' Vice-President as a reactionary.) /
Wallace wrote a speech setting 130
A* few quotations from Abba
billions as the right national in¬ LerneFs monograph: "Functional
come after the war. "Copies of his
'Finance and the Federal. Debt."
"Functional Finance rejects com¬
speech were released to the press.
Between the distribution of the pletely the traditional doctrines .of
Planning
Resources
National
the
them
make
THEM—and
money" policy.
end: the corporative state
ternal conflicts.;
DOUBLE
off;
them
cut
The
Cleveland,
national bank in Ohio and second
largest in the Fourth Federal Re-'
serve
District.
Its deposits total
Many a program is beautiful in
is that theory. The repetition of a noble
a huge debt eventually can bring
objective — however impractical
about a kind of civil war.
Ul¬ the means proposed of reaching it
timate
in
oldest
The plain fact
members.
last week.
ness
nearly $400,000,000 compared with
to
burden, the greater the necessity
for every group to organize, to
enforce iron discipline among its
(Continued from page 2146)
land started its 100th year of busi¬
and
psychological
the
.
be¬
bitter the struggle
Ohio Brevities
"
political consequences of an "easy
disregard
conflicting blocs to shift the
tween
If true,
dividends stimulate the economy;
x't
more
the printing
on
Even when the public
nothing of economics and
inflation, the end-result of the
outpouring of money -was always
rising ana finally skyrocketing
prices.
Lerner's
theories
completely
presses.
.
if
turned
ernments
one part of the country to»another,
QUESTION
6:
WHY should monly think about as debt , . .
that it- should scarcely be called
looking for better jobs, on strike, spending be turned OFF? \
a debt at all."
etc. ■*"\
;
(This answer applies to the
I. The
debt being internal, the
When unemployment drops to Cash Dividend Method.)'
'
1
amount collected in taxes is equal
4,500,000, perhaps 5 billions in
The Monetary and Fiscal Au¬
,to; the amount paid in interest,
purchasing power will be distrib¬ thority - decides, that
spending
uted;
at
5,000,000,1 perhaps
10 should be reduced.'- But if divi¬ j.y The National City Bank Letter
billions; at 7,000,000, perhaps 30 dends of $50 or $100 per person replies: In thq case of a private
debt, there is never any doubt as
billions, v
have been passed out, recipients
to who must pay the debt, j- In the
are not going to stand idly by and
(Spenders sharply criticize the
case of a public debt, the exceed¬
3. billion dollar deficits of the first see them cut off.
Having tasted
ingly'knotty problem is raised:
two Roosevelt administrations as "dividends," they want more and
who shall pay the taxes.
grossly inadequate; deficits should bigger ones!
The higher the- national debt,
have been 15, 20, or 30 billions;
Pressure blocs rush in to claim the greater the, cost in interest.
.
^
2151;
CHRONICLE
THE COMMERCIAL & FINANCIAL
.Volume 159 I Number" 4284
Thursday, May 25, 1944
THE COMMERCIAL & FINANCIAL CHRONICLE
2152
Gov't Housing
Always highest
returns, based
rCDERji il
FIRST, paid
on
INVESTMENTS
p; Runaway real estate prices and possible later collapse may be
RSSN
SHVING5 & LORN
the result of inflated prices and
Earns from 1st
iionman
<
South
Main
Crown
Point
io6
C. E. BAGLEY
Hammond
YOUR
INVITES
ket in
Indiana Savings and Loan
INVESTMENT—
AND OFFERS YOU
!
RETURN-
IN
League at Indianapolis.
evi¬
in¬
tinue
p rices
existing
on
(Assets—P/z Million Dollars)
houses
rf<s,
the
is
Fahey Cautions Against Making
so
foretell
high prices, it is hard to see any
inevitable col¬
result other than.ultimate crash
lapse, Mr. Fer¬
"H
price movement in
mortgage lending on such
properties, was issued on May 20, by John H. Fahey, Commissioner
of the Federal Home Loan Bank Administration.
He drew a parallel
warning
against
threatened
a
runaway
houses
4'The
<S>>
de¬
ular
prices for ex¬
isting
houses
off.
which attract¬
States
when
in
said
John H. Larkin, Assistant Vice-
•
"Two
elected Presi¬
of the American Savings and
New
dent
York,
was
Institute, New York City
Chapter No. 18, at the annual
meeting recently held at the In¬
stitute offices, 41 Park Row, The
American Savings dnd Loan In¬
stitute is a national, non-profit,
educational organization serving
more than 3,000 Savings and Loan
Associations of the country. Sub¬
Loan
jects
estate
taught are accounting, real
law, appraising, manage¬
ment, public speaking, basic sav¬
ings and loan principles and kin¬
dred subjects.
Sprague Re-Efecled
Vice-Ohairman Of NYSE
■
Raymond Sprague
Vice-Chairman
of
was
the
reelected
Governors of the New York Stock
Exchange
at
the
organization
meeting on May 18 of the Board,
which
tion
followed
the
annual
elec¬
Monday, May .8.
Mr.
Sprague, a member of the Ex¬
change for the past 26 years,
on
served
as
to 1938 and
from
Governor
a
reelected
was
ber of the Board in
1929
a mem¬
1942, becom¬
ing Vice-Chairman the following
year.
:.v
-■;':;." :'i; J; -'
- - ■ >if.,
John Q. Adams, of Chicago, and
Robert V. Fleming, of Washington,
D.
C., were reelected members of
the Board of Governors as repre¬
sentatives of the
Mr.
public
on
May 18.
Adams, prominent in agricul¬
ture
and
West, is
nental
Trust
business
a
Illinois
Co.
the
in
Middle
director of the Conti¬
of
National
Chicago,
Bank
and
&
Mr.
Fleming is President and Chair¬
of
and
workers
of the Board of the Riggs Na¬
tional
Bank
John
of
Washington.
Rutherfurd,
it
re¬
was
ported to the Board, has been re¬
elected Chairman, of the Gratuity
Fund and William-D.
Scholle, Sec¬
retary and Treasurer.
Arthur
Broderick is Chairman of the
F.
John H. Fahey
shortage
H.
workers, mortgages in unjus¬
war
tifiable
amounts
made in
an
and
towns
are
being
now
increasing list of cities
throughout the coun¬
The chief exception to the
general trend is in the northeast¬
ern group of States, where only in
1942 did home values begin to re¬
cover from the extreme deflation
of the thirties.
Even in these
try.
prices and loans
are
now
climbing to hazardous
levels in a few communities.
States real estate
"Loans based
on
valuations far
reasonable level are be¬
ing made by all classes of finan¬
cial institutions, in growing num¬
beyond
a
the same States where
similar lending practices led the
nation into the record-breaking
in
bers,
mortgage
began in
the twenties,
panic which
Just
1930.
as
in
States well in front in this move¬
include
Ohio,
California, Arizona, Illinois, In¬
diana, Wisconsin, Oklahoma, Ore¬
gon and Washington.
This un¬
healthy activity is also conspicu¬
ous in parts of other States.
ment
Michigan,
"While sale prices
revenue
indicated by
stamps and mortgage re¬
cordings in recent months show
plainly what is happening, the
records of sales of houses by own¬
Klingenstein
is
Secretary.
man
as
mortgages had been
the Home Owners' Loan
Corporation
reveal
disquieting
facts.
During
the
first
three
months of this year, 1,293 proper¬
ties owned by HOLC borrowers
were
sold at prices 17 per cent
Governors at the annual election
of
the
Exchange
noted in
our
on
May 8, was
issue of May
11, page
1942.
higher than the HOLC Valuations
made about ten years ago. On the
may
to lend
indicate
sales
also
are
in
numerous
Omaha,
Lincoln,
Little
Rock,
Louisville,
Shreveport,
Kansas
City, Missouri, Tulsa, Houston,
Salt Lake City and. Seattle.'
/'
"Unless this dangerous course
is
arrested, the post-war curtailment
of war production may bring a
wave of foreclosures and seriously
interfere with the resumption of
construction in¬
dustry, a vital factor in peace¬
time adjustment."
'
" ;
As
the
in
activity
prudent counter-inflationary
steps by financial institutions, Mr.
Fahey recommended adoption of
precautions recently urged by the
Federal Savings and
Loan Ad¬
visory Council.
These include:
downward adjustment of the ratio
of
loans
to
appraised
values,
shortening of repayment periods,
accelerated repayment of prin¬
cipal during the first few years of
the loan, calculation of loan per¬
centages on the basis of property
prices in a pre-war period during
more
market
which
conditions
were
ing of additional security, in cases
where
high percentage loans are
made
on
market
■■
the
basis
of
prices.
.
.
«-——
current
:v
w————
■
;
"In
in
neighborhood
the years.
connection with
condi¬
the
sales
4,097
average
per
60 Beaver St.,
York
City, members of the
York Stock Exchange and
New
New
loan
increase
of
$1,504
property, or 81 per cent more
other
Department.
;
Mr. Abbot has had 20
"
—
years'
ex¬
perience in the financial district
and has specialized in the study
of bank and insurance shares. He
was
in
this work for
with1 G. M.-P. Murphy
charge of
many years
& Co,
Mr. Abbot has also written
many/articles
jects//'
■
on
financial
a
■
sub¬
this
in
yield
Ohio
unusually large demand for hous¬
ing in the first year after the war,
the
inflationary
very
possibilities
are
;
great, he said.
"Neither mortgage
-
lenders nor
the sit¬
builders alone can control
uation," he added. "By adopting
joint policy of resistance to ex¬
cessive appraisals, high prices and
high pressure salesmanship, they
can perhaps have some influence
in restraining the-market.
But
most builders and lenders do not
have the facilities for determin¬
a
precise point at which
their own appraisals and prices
reach the danger point, and no
way of gauging their effect on the
national economy."
;
;
ing
the
The
best existing means
of
page
2146)
section, the current
10 high grade Ohio mu¬
.30% more
second grade
on
nicipal bonds is only
than the yield on 10
Ohios.
•
' i
.
Bank Earnings
the
At
annual
meeting of the
Association, held in
May 17-18, some of
Ohio Bankers
Columbus
the
on
worthwhile 'comments
most
heard
informal
in
were
conver¬
sations relating to
It
bank earnings.
refreshing to note how
was
of
some
the
more
bankers
alert
quite optimistic about prof¬
were
The
comments of one, Mr.
White, the alert and ca¬
pable; president' of the National
City Bank of Marion, serve to il¬
lustrate how the properly man¬
aged bank can make money and
its.
Robert
The value of
yet be conservative.
attending
convention
any
lies
largely in exchanging such infor¬
mal comments.
"
;
Six
or
seven
years ago
-
supply and an
limited
not
in
uncommon
it
Ohio
bank to have 50%, or even
a ;
60%, ?
deposits in loans. Today,;
it is uncommon to
of its
of
was
for
course,
find
even
country bank with ;•
a
loans amounting to as much as
20%
of its deposits,
and often
the loans amount to only 5% or v
6%.
Moreover, the 50% figure
used
to
now
the
6%
20% of its
loans, u-ually has
in
large loan account only
a
because
has
it
sought" loans
at
interest.
despite
Yet,
trend
profits
aggressively
4, 4y2
:vVV
this
bankers
-
loans, while
bank with
deposits
such
in
be
have
5%
or
discouraging
found
that
growing because they
considerably more money to
have
are
invest, and their capital structure
is usually little more than it was
spiral- several years ago. Thus declining
ing home prices is the FHA ap¬ income from loans, has been more
praisal system, which is based on than offset by income from much
long term values rather than short larger investments, supplemented
term price increases, Mr. Fergu¬
by income from service charges
son said'.
.''■:■:j."V' and by reducing interest paid on
"Through widespread use of the savings deposits.
*
exerting influence against
•
.
FHA system,
can
the individual buyer
be made conscious of the fact
high price for a
property, he is paying a premium
for
immediate
occupancy*"
he
said.
"At the same time,- the
.
ciated with them in their Research
over
With
lender
prices, of course, do not
depreciation or adverse
properties
on
which
mortgages
were
held
by
the
HOLC, new loans were made by
private
institutions
during the
past eight months
showing an
of
Henry Abbot Now In
Hentz Research Dept.
H. Hentz & Co.,
billion dollars.
about 2
>
that if he pays a
Exchanges, announce that
Henry W. Abbot has become asso¬
changes
tions
result from present proposals
.
reasonably stabilized, and the tak¬
dollars thai
$1,000 to war veterans to
down payment on a home;
(4) a tremendous pent-up demand
for new housing; and (5) a lim^
ited production capacity in the
building industry during the first
year
after war-time restrictions
have been lifted, which has been
estimated by the FHA at 400,000
privately financed homes costing
Phoenix, Tucson, Evansville, Fort
Wayne,
Gary,
and
Hammond.
Such
billion
3
use as a
"The records of the Home Own-
Corporation
more
than
noticeable each month.
Loan
.'(Continued from
>
be subject
than 95 billion,
dollars
in liquid
assets in the
hands of individuals; (3) an esti¬
mated home buying potential of
record;, (2)
more
Municipal
Ferguson
.
southwestern
the
these properties are now
than 20 years old.
These
average,
*
Chairman of the Board of
and
held by
new
H.
ger
in the
few
States, the. upward movement in
prices and loans is becoming more
whose
ers
new
The reelection of John A. Cole¬
a
cent
per
ers
allow for
Nominating Committee and Paul
and
housing in many cities began to that inflationary sales are more
be apparent.
With prices on ex¬ common in and around Detroit,
isting homes far above normal be¬
Milwaukee, Cleveland, San Fran¬
cause of the stoppage of the con¬
cisco, Los Angeles, Seattle*
struction of houses for all except
-
man
cities
of
of
Board
ef¬
mass
migration
the
In a number
appraisals.
Nebraska
of
Abner
prices repre¬
years
the
and
t g age
coast 'to' deflation in the post-war pe¬
riod* and to avoid contributing to
cent of earlier inflation," he declared/ ; ,
Indicative of the increased dan¬
sales
recent
Mr.
ago,
ations
:m o r
Pacific
the
some'of
of old HOLC ap¬
praisals.
In parts of Michigan,
northern Illinois, some sections of
fects
Ohio
to
commitments that may
coast
122
Fahey.
President of The Franklin Society,
of
now
spread
to
many sections
of the nation,"
Of Savs. Loan Inst.
them
paid
on
was
J
-
valu¬
of inflation in real estate
Southwest, sales prices ran up to prices immediately after the war,
Mr. Ferguson said, are (1) an est¬
150 per cent and 200 per cent of
sound values.- In various sections imated national income for 1943 of
147 billion dollars, the highest on
of Ohio, the sales prices are about
of
dustry in 1942
Larkin Elected Pres.
loan
.
HOLC
ters of war in¬
has
owed
sented about 134 per
cen¬
some
HOLC
the
"In
attention
ed
balance
the
than
' ;v
ing institutions."
partic¬
care
avoid
;
velopment of
inflationary
ever,
must
with
the twenties, which, he said,
new>
mortgage moratorium laws, and a
new HOLC
to bail out the lend-;';
watched
be
of
present ascending price levels and the "boom" market
collapsed in a tide of foreclosures.
o w
existing
urban homes, accompanied by inflationary
between
with wholesale foreclosures,
said.
guson
A
sinking into a depression of
long duration," he 1 said.
"With
over-lending and over-buying at
far out of line
to
the mortgage and real
could hardly es¬
markets
estate
cape
yet
uncontrolled
completely
a
situation,
situation
not
as
price control measures, per¬
"In
al¬
are
,Rv-:v
haps indefinitely, he said.
ready present,
'vv*cCOfc"
^'x
of
flated
"Just Mail Check—We Do The Rest"
\ seC
While
,
dences
SAFETY, GOOD YIELD, and AVAILABILITY
C0<v
excessive appraisals in the existing
housing market unless a concerted effort is made now to hold the mar¬
line, Abner. H. Ferguson, Commissioner of the Federal Housing
Administration, said earlier this month in an address before the
if in by 10th of
each month.
INDIANA
PRESIDENT
INDIANA
Official Warns On
SAFETY
on
is
notice that the
funds he is advancing may not
be completely repaid and that he
is taking a greater risk than pru¬
dence justifies."
v
put
on
participation in the FHA
is entirely vol¬
untary on the part of lending in¬
While
insurance program
stitutions and builders, if the sys¬
tem is given proper support by all
in the real estate and
mortgage markets, it will provide
machinery
for
exercising
farreaching influence in preserving
stability in the market, Mr. Fer¬
guson declared.
groups
If
the
situation
is
not
met
FHA and interested groups,
will be strong pressure to
by
there
con¬
Not
only
are
.
the
more
alert
bankers
giving due attention to
the possibilities of keeping fully
invested, but they also are giving
due
attention
to
the
value
of
a
proper distribution of such invest¬
ments in taxable and tax free in¬
come.
come
Most of the increase in in¬
has,
taxable
and
of course,
Government
this
fact
is
come
from
investments,
reflected,
often
surprisingly, in much higher in¬
come
tax
payments, all of which
eives
increasing importance
to
the value of maintaining a proper
proportion
of investments in tax
free municipals.
Elected
Ralph
E.
to
Phila.
Pendergast,
Exch.
Vice-
President and Director of Paul &
Co.,
Wpre
Inc.,
and Paul & Co., Inc.,
Piecte<3 fn membership of the
Philadlephia Stock Exchange.
*
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4284
iVolume 159
of Europe
The Securities Salesman's Corner
-:.Ji
;
1j
Five New Faces Every Week
-
Regular readers of this column are aware that two major con¬
siderations have always been: foremost in our approach to the solution
V''
\
practically every problem connected with security sales and merFirst, we believe that a sound security business is based
upon the premise that you must KEEP YOUR CLIENTS.
We do not
believe that any security dealer can operate upon any other basis and
make his business pay.
This means giving service, paying attention
to the needs of clients, selling the right type of securities to fit the
requirements of the investor, and treating the customer fairly as to
mark-up.
The second fundamental, which we seem to stress even
more than the first in our weekly articles, is that
every firm and
of
'chandising.
-%■
pi
4
what they think of the
American record."
•
,
So,
gentlemen, though times
change and no man can swim in
the same river twice, and we can
and should admit that we might
Union Bond
Fund
have done better, and
hope to do
it, we must take America all to¬
gether as she was and is and will
be, an inseparable whole, price¬
less and irreplaceable.
When
emphasis upon the building of new ac¬
■V.'i counts rather than
keeping old customers is that we believe that most
security dealers find it more difficult to build new business than to
keep the old. The average security dealer does a pretty good job for
his clients. ;He keeps them informed as to their holdings—he calls
them occasionally on the phone or pays them a personal visit.
In
many instances he makes up their income tax returns and he takes a
fair mark-up on their purchases and sales.
There are short cuts and good ideas that assist salesmen in opening
new accounts such as direct mail and newspaper advertising cam¬
The "reason we place more
,
.
paigns to procure leads, j All these things progressive dealers are
willing and anxious to try in seeking the best method of building up
a new business.
Yet they all boil down to one essential element—
THEY MUST BE BACKED UP BY CONSISTENT WORK.
campaign which drew a
Several weeks ago we were discussing a
;
mailing that went
This dealer was
very pleased with the results as to the mail inquiries received.
Yet,
be seemed disappointed as to the actual sales resulting from this
10% reply for a dealer.
This was the result of a
a stockholders' list, using a double reply card.
battlefront
the
on
or
Lord, Abbett & Co.
pirations and problems of the fu¬
ture against the efforts or failures
of our past, whether as business
or labor leaders, let us not aban¬
people, or repudiate or bargain
for whatever benefit or favor
from the present or the future the
least thing, good or bad, in the
qualities or the record of the past
of our country or our people. To
possible that any intelligent human being could possibly expect
to come in from a single postal card mailing without any
further work on the part of the sales organization—but this is almost
seem
INCORPORATED
,
NEW YORK
CHICAGO
.
•
JERSEY CITY
♦
LOS ANGELES
Mutual Funds
3
away
otherwise for
do
moment is to
a
millions abroad
these
leave
spir¬
itually homeless, exiles and casta¬
ways on alien soil. They may not
know now whether they do
not; but let us remember that
care, or
or
if
this
win
to
are
we
we
war,
these
have
not
boys
back to America, but we
to bring America back to
have
merely
bring
to
them.
quarter BARRON'S holds a mirror up to the investment
company field and publishes the results for all and
sundry to see.
it would be difficult to assess
the value of these surveys, both &>
investors
and
to the investment
companies themselves.
For, cer¬
tainly, this "Quarterly Investment Company Gauge" everlastingly
continues to place
emphasis on management—where it rightfully
belongs!
—*
.■
The
steady and marked im¬
provement in investment company
performance
is
during recent years
clearly illustrated by the cur¬
issue
rent
lished
of
in
the
the
the
of
1936
to
March
Wymond
Cabell, .senior
partner of the Richmond, Va., firm
of
the
1
There
and
"Gauge"
Wm.
Railroad
"Gauge," pub¬
May
edition
it
is
of
Equipment Shares
shown
periods from the end
the
31,
stock
mon
Exchange Firms Ass'n
-1
Each
that in
Cabell Ranted Head Of
Investment Company Gauge
a
BARRON'S.
campaign.
orders
f
to
to
Further questioning made the answer very simple—HIS
SALESMEN HADN'T FOLLOWED UP THE LEADS.
Now, it doesn't
MM
comrades at home of the as¬
our
a
:: I MAIN STATIC WITHOUT GOING BACKWARD.
J
speak to our sons and
we
brothers
Tl"
V
Prospectus upon request
ACQUIRE NEW ACCOUNTS.
Clients die, move awayf or
don or abate the smallest bit of
become dissatisfied (you can't please everyone no matter how hard
our
"integrity, loyalty or selfyou try), and for various other reasons you must not only replace
lost clients but constantly expand-a clientele.
No business can RE¬ respect or pride as a group or as
salesman MUST CONSTANTLY
The reason for so-doing are obvious.
every
2153
end
1944,
funds
did
age—although
riod there
1938
23
included
not
Dow-Jones
of
the
do
up
in
the
well
as
A Class of Group Securities, Inc.
com¬
Prospectus
as
Composite Aver¬
in the latter pe¬
was
Request
DISTRIBUTORS
noticeable clos¬
a
on
Branch, Cabell & Co., has been
1
<
ing of the "performance £ap."
"v.
GROUP# Incorporated
Further questioning indicated that this organization had no plan elected President of the Associa¬
However, in the more recent
tion of Stock Exchange Firms at a
of regular solicitation of new accounts.
Salesmen called on their
63 wall street—new yori
periods from the end of 1940
prospects and clients whenever they felt like it and in a haphazard meeting of the Board held in Cin¬
and the end of 1942 to March
Mr. Cabell, who
manner.
Here was the suggestion which was made to this dealer. cinnati, Ohio.
31, 1944, the 23 common stock
A highly interesting "Study in
Take the list you circularized.
Make personal calls upon every one succeeds John L. Clark, resigned,
funds gave a better account of
Values" is the subject of Keystone
who replied. Don't try to sell a security on first call—SELL YOUR has been a member of the Ex¬
themselves, beating the DowCorp.'s current issue of Keynotes.
FIRM, YOUR SERVICE, YOUR PERSONALITY. Pick out the names change since 1936, a Governor of
Jones
Composite
Average
by
This study shows the present earn¬
of everyone who was contacted on the first mailing and who did not the Exchange for the past two
3.9
percentage
points
in the
ings of the securities held in the
reply AND CALL UPON THEM TOO..
Those who do not reply to years and is a former President of
first
period
and
trailing by
four Keystone Stock Funds in re¬
the
VirginiarCarolina Chemical
a mailing are sometimes better potential clients than those who do
only 1.4 percentage points in the
lation to their 1936 prices and also
reply.
SOME OF THEM ARE AFRAID TO SEE SALESMEN BE¬ Corp. ana a director of the John¬
second.
in relation to their current prices*
CAUSE THEY KNOW THEY CANNOT RESIST THEIR APPEALS- son Publishing Co. He was elected
The improved performance of
The
chart
reveals
that
"net
Governor
of
the
Association
MANY OF THEM ARE RIGHT IN THINKING THIS WAY—THEY a
what this dealer had in mind.
.
,
,
•
j
<
#
,
.
funds, as measured by earnings range from slightly above
He the BARRON'S "Gauge" has re¬ to well over twice 1936, despite
idea in mind of eliminating the dead-wood and selecting the actual and last fall was re-elected.
Prices, on
and potential customers.
v
' Will continue to make his headr sulted in the wholesale reprinting high wartime taxes."
of these quarterly surveys by the the other hand, are "only 40% to
Then make a RULE TO SEE AT LEAST FIVE NEW PEOPLE
quarters in Richmond.
| .
70%
of
1936
various
price levels."
EVER WEEK.
Whether you get them from a list, a campaign for new
sponsors. This is another
John L. Clark, President of the
The bulletin concludes as fol¬
leads, from radiation, from friends, or out of the telephone book— Association since September, 1942, wholesome development, giving as
lows:
"While
there
have been sim¬
it
does
SEE THEM.
widespread publicity to an
had indicated some time ago that
MAKE GOOD CUSTOMERS.
Then call upon these names with the
reorganization
its
upon
1941
in
the mutual
,
r
"
;
-
It's nine-tenths work and one-
This system will build a business.
tenth
inspiration—but it can't fail. ^:•>
:
,-
of 1939 and of 1925,
which is
the date of Tear
pot Dome. It is a justifiable war
ica
because it is
being fought in de¬
official
anese
and what
Our discontented
few years ago,
a
fraternities
murder
provided for their own youth. But
if our young people had looked
at
American
the
whole
and
would
have
in
its
record
in
the
essentials, they
found
an
American
to enlist their loyalty and
pulses. .'The, country
which we are defending today was
purpose
their
stir
there five years
ago,
and twenty
years ago.
"What is this America that
are
fighting to defend? For
than a year after the col¬
France, England alone
held the gate against Hitler. With¬
out
the
English stand America
lapse
of
have
would
come
But
the
had
no
arsenal
without
of
time
to
be¬
democracy.
the
good hope of
American aid England might have
been unequal to the mighty task.
We
are
the
day in the
final
say.
hope of the world to¬
sense
We
that
have
we
have the
the
envied
and Mussolini's
hearts of Hitler's
young
the
Before coming to
Association
in
February
of
which
to
they happen to
identity of the country
victims
the
Mussolini's
and
Mr. Merritt was em¬
by the Republic Aviation
year,
did
men,
the
note
mmtmrnm
crusading
faith
fleeing for refuge? The ref¬
ugees came to America,
as the
have
refugees
America for
The
victims
did
not
been
of
coming
to
than 300 years.
more
the
stipulate
Hitler
for
a
terror
better
America before they consented to
seek
refuge here. Our old Amer¬
Status Quo was plenty good
enough for them. Our old Amer¬
ican Status Quo gave them life,
liberty and livelihood.
ican
then, do we seriously
that America of the 12,000,-
"What,
mean
unemployed ten years ago is
world? Yes.
the hope of the
"America
to
be
proud of their
there
were
the
of
Economic
The
Aetna
Insurance
capital stock offers
high-grade
"America of the Ku Klux fana¬
tics, of the Negro lynchings, of the
Dillingers and the corrupt politi¬
cians—this America the hope of
"One
word
with very
conservative,
a
situation
Huff & Co. of
seventh
issued
Butler-
Angeles
Los
this study
from
request
upon
study of
a
by
California, 210 West
Street,
Calif. Copies of
had
security
interesting growth pos¬
sibilities, according to
the
by
North
Commonwealth
Britain,
it.
re¬
American
take America's
not
the
people
China
and
Ask
Russia,
casting' conquered and
of
the
martyred nations
Se¬
Investment
Co.
Commonwealth has the distinction
of
in
standing at the top of the list
performance
for
both
of
the
longer
periods covered by the
"Gauge;"* Another was published
by Hugh W. Long & Co. in behalf
Fundamental
stood
may
ilar
deviations
earnings
iii
past
always
have
periods-
ultimately
reasserted themselves as the basic
factor in
determining stock-values-
and stock prices."
Investors
which
high
in
both of these
performance
over
periods.
Dis¬
same
tributors Group, sponsor
Securities,
Inc.,
of Group
published
a
re¬
print in which the performance of
the
various
classes
curities Inc.
m
the
not
of
Group Se¬
Research
Corp., is currently
series of articles em
"Scientific Developments from the
Investor's Viewpoint."
The dis¬
&
carrying
a
cussion in the current issue is the
third in the series and is on Elec¬
Concludes the article:
tronics.
"After
the
war,
vigorous
pansion in the fields of improved
radio, television, X-ray, radar and
vast
a
number
of
new
industrial
applications, stimulating prosper¬
ity and increased earnings for the
companies in the electronics in(Continued on page 2157)
1
already included
BARRON'S
list
were
added for comparative purposes.
be
Huff & Co.
Enhancement Possibilities
PEP
afford
Bonds
interesting
possibilities for enhancement with
Securities
particular
appeal
to
those
long-term
cording to
a
capital
summary
gains
pany,
Landreth
Building,
pre¬
St.
Louis, Mo. Copies of their inter*
esting circular
may
upon
"A
request
ac¬
of recent
developments in the situation
Series
;
seek¬
Prospectuses
ing
be had upon
request from Scherck, Richter: Got,
National Securities &
Research
ISO
LOS
Corporation
BROADWAY,
ANGELES,
634
NEW
S.
YORK,
Prospectus
from
may
authorized
be obtained
dealers,
or
(5)
Spring St., (14)
BOSTON, 10 Post Office Square (9)
CHICAGO, 208 So. La Salle St. (4)
im¬
petus is expected in electronic ex¬
Butler-
pared by Scherck, Richter Com¬
Yes.
need
for
fewer
,
Company
investment
issued
'
Royalists and utility pirates the
hope of the world?
Yes.
the world?
per¬
curities Co., general distributors of
of
Bright Outlook
Hitler's
of
/
were
000
we
now
more
r
was
Corp., previous to which he had
spent 20 years in the investment
banking and brokerage business.
Hitler and Mussolini and the Jap¬
(
defend—the
the old record. - When
few years ago
the flaming faith in the
months,
Vice-President.
ployed
age devaluation of America, com¬
plained because we had no flaming American ideal to compete
with
the
dynamic ideal which
'
of America
this
educated by two decades of sav¬
*
kind
the
hope,
.
invest¬
the
for
young people a
V;;-:
of
performance.
(In
the days when the funds had less
prints of the BARRON'S "Gauge.")
Assistant to
Investment
Timing, published
In this week's mail three such
past four
by the Economics & Investment
reprints came to hand. One was
elected Executive
Department of National Securities*
President
our
;
measurement
company
reason
old
white and
years,
college youth of
'
is
ment
Henry C. Merritt,
it for humanity and
"That
unbiased
partner
formance,
Abbott, Proctor & Paine.
the
victory, and we have cast
civilization.
vote for
Gover¬
a
as ^
people are asked to
through the
is that nation?
m
of
(The
ord
"What is that record
I
continue
to
meeting.
fense of the whole American rec¬
black;
9
unable
May
Board elected Mr. Clark
(Continued from page 2149)
approximately
■/'/
'
the
nor. He will continue
Jordan Defends America's Business Record
f
be
would
beyond
-rnr
jfttjl#
he
The PARKER CORPORATION
ONE COURT
ST., BOSTON
Management Associates, Boston,
Thursday, May 25, 1944
THE COMMERCIAL & FINANCIAL CHRONICLE
2154
V
other real values because of its in¬
The Prospects For
Post-War Air Cargo
dominating force in today's vast the size of Pennsylvania, interna¬
air
transportation
will
global war, and which will prob¬ tional
ably do-more in tomorrow's era of shrink the world to the size of the
Mississippi
Valley,
in
terms
of
peace than any other one thing to
relative improvement of transport
preserve peace, and to change the
speed and with particular refer¬
habits of the world.
transportation
has
experienced such rapid
ever
Within 35 years after the
invention of the airplane, it had
become a factor in the domestic
growth.
Air Age
countries, and today the
has
global reality, ex¬
the necessities
of
II.
Prior to 1939,
become
pedited
a
by
War
World
other
of this and many
commerce
pilots made about 33
flights. In the one
American
transatlantic
thous¬
of flights
of 1943, 4 years later,
year
ands
thousands
upon
made over the Atlantic alone
were
by planes under the direction of
our
Army Air Transport Com¬
mand and the Naval Air Trans¬
Service. Never before has
great transportation change
taken place in so short a span of
time. And, almost incredible as it
is, it is a mere hint of what is to
port
such
a
The air-nearness of all peo¬
come.
ple, one to another, is rapidly ac¬
quiring new, unprecedented and
unpredictable potentials not only
a military sense, but for every
phase of human activity. It is to¬
ward the post-war aspects of this
changing scene, and particularly
the cargo aspect, that I intend to
in
growth
the
and
trade,
and
industry
and
Commerce
trade
of
centers, have always been limited
carriage of goods by
air.
Air
Transportation of cargo is
new to be a known quantity
too
The airlines of this
in commerce.
those
abroad, ob¬
tained
their
pre-war
growth
primarily as carriers of passengers
country,
and
mail
and
and
made
no
real
at¬
tempts to invade the cargo field.
There
are a
of
ments
few records of
move¬
merchandise
by air in
the earliest years, but it was not
until 1927 that any coordinated
and regularly scheduled air cargo
service was inaugurated. On Sep¬
tember 1st of that year, air cargo
took its first real step,
in the form
of Air Express. At that time only
four airlines were operating regu¬
larly scheduled air service in the
United States, with a total of 4,508
route miles, and only 26 points en¬
joyed direct air service. In 1928,
the first full year of Air Express,
approximately 17,000 shipments
were carried, weighing a total of
64,000pounds — an average of
three and two-thirds pounds per
shipment.
In 1943, only fifteen years later,
commercial air transportation had
the
this
of
Because
highway.
earliest centers of trade grew up
It
took longer for transportation to
conquer the land because of the
coasts and
on
natural
great rivers.
on
existed
that
barriers
in
the form of mountains and rivers,
and
but eventually land
linked the in¬
deserts,
routes
commerce
with
terior
the
of
centers
com¬
that had grown up on
merce
coasts and on lakes and great
ers.
the
riv¬
But, ships could not travel on
there
42,000 route miles of sched¬
were
the point where
to
uled service in the United States
with
than 350 cities served
more
to
the
limits
which
and
it
of
was
the
-
to
on
move
which brought in¬
creased speed the time of surface
transport over distances has been
measured
in
days
and weeks
velopments
that the value of air transporta¬
tion's speed and flexibility in the
field has been really tested
only by war, but the results of
that still continuing test are indi¬
cating that air cargo can take a
major role in the post-war car¬
riage of commodities. It is, there¬
cargo
fore, not too early for us to trans¬
late what
to
and
stacles
without the re¬
boundaries
which
or
always
have
ob¬
beset
The great
air bridge which covers the earth
has made it possible for the air¬
plane to destroy all of the barriers
surface transportation.:
the
of air transportation
surface transportation. These
vary widely.
Some of the
optimistic proponents of air
transportation have visualized it
of
weeks
and
months and
miles—to discard all our old yard
sticks.
It is
no
lpnger 11,300 miles,
31 days, from New York to
Chungking. Air reduces the miles
to 7,500 and flying cuts the time to
and
38 hours.
markets
Merchandise
in
Moscow
in
can
reach
23
hours
after it leaves New York.
and
products
can
go
People
from
San
in
commerce
turned
not only
The
take
a
portion of the long
traffic of the railroads, but,
haul
the
did
as
ultimately
haul of
airplane will
been
to the longer
over
railroads.
will
railroads,
con¬
—
emergency
make
shipper or for con¬
it
will
replace
slower
of transport, for, as Mr.
for
money
signee
modes
Civil
the
of
Chairman
Pogue,
d, has said,
"Services that make money have
B
Aeronautics
a
oar
habit of becoming
Two
popular.|'
major 'factors are tempo¬
retarding
rarily
the
of
growth
commercial air cargo transporta¬
in
tion
States today,
United
the
Almost two years ago our domes¬
turned
airlines
tic
to
move
by
time
airplanes
or
another
almost every commodity
Mining machinery
carreid by air to points in¬
was
man.
accessible
surface
to
transporta¬
Oil companies shipped sup¬
tion.
plies
into
Perishable
moved
jungle-bound airports^
food
products were
to remote points
in hours
where weeks would have been
quired
in
re¬
surface
transportation.
Drugs and dresses, coats and cut
flowers,
hardware' and
repair
parts and millinery and machin¬
ery
all have reached their
by air.
Future air cargo will not
have to find
move,
new
commodities to
but it will have to prove its
economic
every
carry.
users
usefulness
to
each
and
commodity that it hopes to
It
can
wrest
traffic
from
surface transportation
only to the
extent that it can add economic or
to
over
the
of their
planes.
Very few of these planes have yet
been returned.
So, today, when
Army. nearly
one-half
changes will
of industry's
transportation will,
With faster
saving in the capital needed*
business.
A tremendous
come
do
to
capital formerly locked:
in inventories of retailers and.
jobbers will be released when the
speed of air transport makes it;
up
to carry smaller stocks:
they can be replenished
in hours instead of days or weeks../
because
Perhaps
manufacturers will
some
resist this trend towards
transportation. Packing methods
will change and packing costs will
be reduced. In international trade
tailer
packing
today,
from
sometimes
in¬
shipping
costs
surface
to 20%
10%
because of the
necessity for using heavy crates
that
withstand
can
high
the
of
abuse
and of loading,
carriage; because
the
weight,
whichever is greater, and because
basis
freight rates
ocean
of
measurement
internal
and
taxes
revenue
on
or
cus¬
countries, be¬
the landed cost of
toms duties in many
ing based
on
the shipment, take additional toll
from increased packing costs. and
the other increases that they bring
about.
Since
carriage by air re¬
less handling
and
less
rough treatment en route, lighter
packing will be possible in both
quires
domestic
and
This
merce.
foreign air com¬
be particularly
will
mouth
hand-to-
but once the re-,
clear to take
buying,
his
sees
way
advantage of it the suppliers who.
in line with his desire* to do
fall
business
with
lower inventories, and
on
in
investment
less
storage
will win the first lap in the.
race
with competition.
Further¬
more, there will be less of today's
great waste of capital invested in
space,
transit.
goods in
elemental
knows
Even
the most,
of
business
student
that
in transit
goods
idle goods that can earn no
an
of
average
quarter of a mil¬
a
merchandise
lion dollars worth of
in transit at all times can use
to cut that average to
$50,000, the
saving is obvious.
A collateral of
is
will make it
.
,
transportation
possible to speed up
turn-over
and greater
turn-over,
transactions.
crease
merely because
transactions;
expenses
every
our
tion.
unit of product for cost of
Probably many industries seek¬
ing to use the advantages of- air
will
faced with
are
traffic of
more
kind than at any time in
history, we are terribly short
of equipment. Under these condL
tions cargo cannot be allotted as
much space as it needs in the lim¬
ited service which we operate,
and
have been unable to allo¬
we
appreciable number .of
planes to a badly needed exclu¬
sive cargo service. After the war
these
conditions
will
certainly
cate
any
change, and increased production
already making it pos¬
sible for the Army to return a
of planes is
retarding factor is
though Air Express
other
been reduced
rates have
a
num¬
ber of times tince the service first
began, they are still high in com¬
parison with
those
in effect for
the fastest forms of surface trans¬
In July of 1943, they
portation.
reduced from a base rate of
mile to the present fig¬
of 70c per ton mile,
Today's
80c per ton
ure
rate is still about six times
that of
reductions
Further
Air
in
Ex¬
rates will come as soon as
the airlines can secure enough ad¬
press
ume
enable them
expanded cargo vol¬
and to get the benefit of the
which
economies
specialized
a
operation will give. When
that hapepns, the airlines will be
cargo
anxious
riod
in
a
of
make
to
rates.
further
reduc¬
probably,
Quite
post-war trahsition pe¬
two to three years, the
shipping public will see rates for
Air Express reduced to approxi¬
mately 60% of their present level
and
the
inauguration - of
Air
Freight
Service
lower rates.
.at
-.
somewhat
After this transition
period, when aircraft manufactur¬
ers
have had an opportunity to
tool up and get
into production in
quantity on cargo planes, built,,to
airline specifications^ r.rates: will
again be reduced and to a much
lower level.
Rate' reductions; can
operating
we have
pot proceeded far enough in our
research and planning for me to
be able to give any prediction as
only
costs
come,
are
however,
reduced,
as
and,
to what ultimate air
freight urates
might be. I feel safe .in saying,
however, in fairness to the ship¬
pers
ning,
who, in their post-war plan¬
are
trying
to
intelligently
handling
costs,
salaries
of
developing
keep bomber
a
crews
weight,
light
warm
in the
temperatures
encoun¬
tered at extremely high altitudes.
even
costs,
administra-.
movement of merchandise.
tive officials, and overhead gener-.
ally, will be less
There
will
each unit sold*
on
less risk
be
of
loss
from style, obsolescence, price
in¬
seasonability when
transportation speeds the
stability,
stores
and
When
less stock they be¬
come
decreasingly vulnerable to
changes in style and to whims of
carry
public fancy; with less money tied
in
up
will
inventories manufacturers
more
ready to modify:
products to suit changing
be
their
furnaces
demands. .Many retailers will no
as
logical air cargo potential in
but such a development
as
this can change the picture
completely. Dehydration will also
longer find it necessary to place
the past,
orders for
be used to prepare food products
for carriage by air./ As an ex¬
at
ample of the reduction in both
weight and space resulting from
dehydration, government bureaus
have stated that a bushel of po¬
possible for the retailer to reduce
We've
never
considered
advance
blind
the
to
actual
they might be experiencing
need
the time for which
been ordering.
his
weeks in
merchandise
and
they have
This will make it
price risk and his style
or
de¬
terioration risk.
In
•
the
high-priced
style fields
hats, shoes,,
weighing 60 pdunds weighs
only 8 pounds after dehydration,
that cabbage shrinks in weight
and accessories, as well as dresses
from 20 to 1,
ters
tatoes
rail express.
insurance
air
carriage of mail and cargo.
Even
capital
less, and because rentals,
21-pound furnace that will heat
l-3~room house'. Incidentally, it
was military aviation that brought
about this furnac^—the necessity
sub-zero
^The
the
because
a
compact heating unit that would
rates.
of more
will
be
outlay per
a
for
,,
Nor will profits in¬
and
few planes to us and wfe hope
planes particu¬
larly adapted
to the exclusive
r
be
more
on
transport to expand markets will
lighter weight materials in the
manufacture
of
their
products.
Just a few days ago I read of the
preparations one manufacturer is
making to market, after the war,
use
before long to get
very
profits
more
lowered
,
saving in capital
Air
turn-over.
trans-shipment, light¬
erage, and reloading will not be
necessary in air transportation as
it has been in surface transporta¬
we
the
greater speed of air transportation
means
unloading,
are
profit
sale, and if a national
chain organization that today has
through
true in international trade where
of i transport
fleet
total
more
■
advantage
of and receive the values of air
of
can
rates
take
to
and flexibility of
during
one
about because
come
trans-shipment
unloading, and
tions
used at
other
down
come
that
time
same
portation, and, since the advent of
the airlines, by virtue of their
lower rates. Wherever the speed
flight
>■'
possible
the
creases
the lack of faster trans¬
traffic.
therefore
and
sales
more
rates.
"At
x
the limits
amount of
large portion of their 'business
that they have retained only be¬
cause of
products move beyond
practicable with slower
transportation. In the style mar¬
ket, ' too,
expansion will mean
that these
but the" ad¬
vantages of air transportation will
offset for many products and for
much traffic,
the difference in
determination
a
those of
remain above
will
stantly extend the length of the
average haul by the creation of
new,
long haul traffic.
In my
opinion, the airplane will not take
the place of rail or motor, or
water carriers, but it will divert
weight commodities.
instead of the former 21 days.
has
stances,
shipments, and high value—light¬
Francisco to Brisbane in 35 hours
So,
if domestic air transportation in
these United States has, as has
been said, shrunk our country to
other
Freight
demand;
freshness will continue to
also
am
Air
rates
They also created
traffic which, in some in¬
to handle an
move
that
certain
surface transportation:,
railroads.
I
the foreseeable future.
quite
the
ditional equipment to
driving great railroads and
steamship companies into
bankruptcy. Others have failed to
see the possibilities in carriage by
air and have accorded to it only
a stingy fringe of the
things that
used
in terms of hours and minutes in¬
distances,
transportation into con¬
sideration, that the rates to the
public of 5 and 7 cents per ton
mile,
which
are
being talked
about by theorists who have had
no practical experience in airline
operation, cannot be expected in
took much short haul traffic from
as
Even in pre-war days
portation, just now coming into its
own, has forced us to revise all
our ideas about distance, to think
best.
serve
short
for
great
flying time from any other spot.
This relatively new form of trans¬
stead
lifting their
effects
upon
were
no
useful
were
are
voices to describe their views of
spot on the globe is
distant than sixty hours in
more
distribution,
selling, and on
Many prophets
of land and water.
Today,
of
shipping habits.
views
or
channels of
on
methods
on
more
can move
has taught us into
war
of
terms
Transportation brings his¬
tory's greatest step in speed and
gives commerce freedom in the
one
great universal element in
Air
strictions
transported
by other forms of transportation.
We can safely say, therefore,
rather than in minutes and hours.
which it
merchandise
have
intended
spite of technological de¬
in
of
ume
medium
stop
tion has always been
has
ume
restricted by
was
at water boun¬
daries.' Hence, surface transporta¬
forced
directly.
peacetime commerce—
study the place the air¬
plane will have in post-war trans¬
portation and the effects it will
transport
land
hnd
land,
can
,
Relatively, express vol¬
grown, too, but the 1,shipments which
were
ciety, trade, and culture has been 630,000
aggregating
32,577,000
one
of
expanding horizons carried,
brought about by increased and pounds, and averaging 20 pounds
speedier means of inter-communi- per shipment, constituted only an
cation. Water was the first great infinitesimal part of the total vol¬
by, or stimulated by, the speed of
transportation. The history of so¬
that it
Motor vehicles, because they were
more
the
grown
direct my comments.
the
to
ence
flexibility; Like
other new facility for trans¬
port, it must seek the level of its
greatest usefulness and it will ab¬
sorb traffic and create traffic in
the fields
(Continued from First Page)
No other form of
creased speed and
every
air
take
and that dehydrated
soup shipped to our allies during
the month of May, ?1943, alone,
saved 20,000 cubic feet of cargo
space,
."v:
■v..
These changes in products and
methods, and other changes, will
be taken advantage of
to further
bring down the costs of carriage
of commodities by aiy.:>/
Our present methods of market¬
ing and distribution" will feel the
specific effects of air cargo in
many ways. Companies that have
in the markets that
"creations''
most
and
in
coats, originate in style cen¬
like New York.
Top notch
stores in San
Francisco
Mexico
or
Buenos Aires are given
exclusive
offerings for
a
few
weeks before they are copied and
City,
or
moved down into the medium and
low
It makes a lot
in Dallas orKansas City if fewer days of this
precious long-profit time are used
in transportation rather than in
of
priced shops.
difference,
even
selling.
Losses from price
be
cut by
instability can
In certain
of. air.
use
they could economically reach by
perishable fields, y shippers fre¬
quently. start marload movements
slower surface
towards. distant market
limited
been
transportation will
new ^markets.
fore
areas
be¬
the
be forced to do; so. in order* to
survive, because air transport will
commoditytis sold, ex¬
pecting. to .take. advantage of an
opportunity- to divert the ship¬
ment- to a market .where a price:
advantage ..can. be gained.. .These
make it
"rollers"
reach
>.
out
into
Others that may
sive
bej less progres¬
andydornot ^care to expand
may.
be sold
ad¬
possible fof remote com¬
to invadq the nearby
markets upon which companies of
a
local nature have always de¬
without the anticipated profit op¬
pended for their volume.
portunity and end
petitors
;
New
.
markets
will
.
be created.
may
on
an
vantageous market, > or they may;
move tslowly, across
the*, country*
site
coast
after
taken, such
a
up on
the
oppo¬
deterioration
toll that
a
has
substan¬
vegetables which have
tial loss replaces mny possible op^
always
been
picked green, to
portunity for profit.
Air trans¬
ripen en route, will move over
portation may make it possible
night to market centers, and con¬
for much of this traffic to be held
sumers who, for the .first time, are
at the point of production until a
able to enjoy new flavor and new
Fruits and
Volume 159
THE COMMERCIAL Sc FINANCIAL CHRONICLE
Number 4284
particular point
Another bad feature in the pro¬
dictates that it be placed there byair in a matter of hours, in fresh
posed Fund is one that you find in
all programs of the Planners. In
order to make the plan work they
prpvide for the exercise of power,
for they instinctively feel the dif¬
ficulties inherent in the plan and
they intend to see that it works
by forcing compliance if neces¬
sary. In the instant case the plan
provides "Changes (in the par
market rise at
a
condition, and ready for sale at
top market prices.
v.;-','Air cargo transportation may
v
Shortcomings Of United Nations7
Porposed Stabilization Fund
bring about important changes for
the wholesaler and the intermedi¬
ate distribution center.
that
tent
To the
shipments
more
ex¬
are
made direct from manufacturer to
retailer, by air, and to the extent
that
more
manufacturers will sell
direct to consumers, the need for
wholesalers and distribution
cen¬
ters will be diminished.
;
Public
warehousing will un¬
questionably be affected. Ware¬
houses are, in many ways, a part
of the transportation system of the
country, and the need for them
has arisen to
the need
come
extent out of
some
of distributors
to
over¬
the time lag between the de¬
pletion of the dealers' stock and
receipt of replacement from the
factory.
As
air
transportation
makes it possible for wholesalers
and retailers- to replenish their
stocks more quickly, the need for
the warehouse will be diminished.
'
As
air freight can make
substantial reductions in its rates,
soon
as
it will attract much traffic in the
form of perishable food products.
In the immediate post-war period,
it will probably touch only a mar¬
ginal part of this traffic because
■its rates will still be too high to
compete for the vast bulk of fruits
and
vegetables, and meats, which
long distances from produc¬
ing centers to centers of consumer
population. Even in that period,
however, the airplane will move
move
.
2155
a.
goodly portion of the more per¬
and higher priced prod¬
ishable
ucts to distant markets where fine
restaurants
and
first-class
hotels
;Will attract trade by advertising
top grade fruits and vegetables,
(Continued from first page)
In
high level of employment and realthere are serious objections.
income, which must be a primary the first place it proposes the cre¬
ation of a Super Bank to cooper¬
objective of economic policy.
(3) To give confidence to mem¬ ate with another World Bank for
ber
countries
by
making
the Reconstruction, and these together
Fund's resources available to them with other international bodies, to
under
adequate safeguards, thus
giving members time to correct
maladjustments in their balance
of payments without resorting to
destructive
measures
of
national
international
prosperity.
(4) To promote exchange sta¬
bility, to maintain orderly ex¬
change
arrangements
among
member countries, and to avoid
competitive
exchange deprecia¬
tion;-.";
:
(5) To assist in the establish¬
ment among member countries of
multilateral
payments
facilities
or
on
current transactions and to aid
in
the
elimination
of
foreign ex¬
change restrictions which hamper
the growth of world trade.
(6) To shorten the periods and
the degree of disequilib¬
lessen
rium in the international balance
of payments of member countries.
With number
there should
one
be no disagreement because it is
generally believed that a perma¬
nent institution devoted
to inter¬
national monetary matters would
be productive of much good as it
would
provide
a
meeting place for
the representatives of the various
nations to discuss their monetary
and
financial problems.
organization
statistics
on
could
Such
an
gather
also
those subjects and by
disseminating the information ac¬
quired enable Treasury officials
and the business world generally
and seafood, fresh from distant
to keep informed ,on trade and fi¬
'producing areas. Later, as rates nancial movements
throughout the
'drop further, these products will world. This would be of
special
•move
in greater quantities, be¬
value to exporters and importers
cause
overnight movement will in all countries. But the machin¬
'eliminate the need for, and the
ery for this already exists in the
;cost of, refrigeration and because
Bank
for
International
Settle¬
•producers can take advantage of
ments.
By
amendments to its
-momentary price rises through charter when
Germany is defeated
:the ability to ship quickly to any
it can be made to perform the
•point. It is not likely that air¬ services described.
f
planes will have to be encumNumber two is a generalization
•bered with heavy and costly re¬
of
the
objectives sought
with
frigeration equipment. Since they
which all will agree and again I
•can move, in the domestic market,
entirely across the country even say the Bank for International
Settlements can be successfully
"today in 18 hours, it appears that
and practically used to facilitate
;precooling of the product and and
expedite the flow of world
^proper insulation will suffice.
trade.
The value of air transportation
increases in almost direct ratio
"with
the
■points
distance
served,
between
and
it
the
therefore
is
the
kernel
of
this
diminished when
shipments are carried by air in¬
stead of by rail and steamship.
because
tances and
of
the
greater
the longer
[between the price that the
pro¬
ducer gets for his
product and the
[price the consumer in the foreign
country pays, than there is in the
domestic
field.
This
"spread" is
enhanced because of several fac¬
tors p e c u 1 i a r to international
trade.
These include, in surface
[transportation, the greater cost of
export packing, the expenses of
trans-shipment at ports, consular
fees, marine insurance, export and
import duties, port charges, and
the cost of financing the shipment
for a longer time en route. Many
ers
breakage
There
are
is
a
very
definite
tainty that the end of this
will
signal
cer¬
war
expansion in
transportation,
and as that expansion progresses
the changes I have mentioned will
follow. So, in its post-war plan¬
ning, almost every type of busi¬
commercial
great
a
i
r
must consider how its meth¬
which
they
domestic
States
come
airlines
of
about.
the
The
United
by air transportation, and
tsome
eliminated entirely.
With
air freight moving at a speed ap¬
proximately
25
times
thatof
[ocean freight, interest charges on
'inventories in t r a n s i t will be
future planning. American busi¬
ness and the airlines of the United
•greatly reduced.
States
•ally
The greater cost
lor export packing, as has been
-previously pointed out, will be
•eliminated.
[leave
from
Since
airplanes
interior
points
will
and
land* at interior points, all of the
[expensive features of trans-ship¬
ment
at
land-water
-be eliminated.
surance
borders
will
Very probably, in¬
costs will
come
down be¬
or
must
move
forward
to¬
gether in their efforts to stimulate
the growth of this newest form of
transportation, and to take every
possible advantage of the domi¬
nant place our country holds to¬
day in the field of aviation. If
we
do this, and if we can establish
American competitive principles
in international air
transportation,
in transit a shorter
time are subjected to less oppor¬
tunity for deterioration,: because
will have done, much to guar¬
antee our territorial security and
less handling and rehandling low-
welfare in the post-war world.
cause
goods
ill will and defeat the very pur¬
for which the Fund was
cre¬
ated.
of
resources
will
been
exhausted,
made
be
Fund
the
for
shall
demands
further
assess¬
we
our
social, cultural and economic
currency—
of
rectors
the
Fund
to
have
the
to change the value of the
power
of
hostilities in Eu¬
rope. Under the proposed Inter¬
national Monetary Fund-it is spe¬
cifically provided that during the
period of transition following the
member
war
countries would be
permitted to retain their exchange
controls with the expectation that
these would gradually be relaxed.
If
is
as
argued by the proponents
Fund the stabilization of
of the
currencies is believed to be
a pre¬
to post-war recovery,
then the quicker it is
accom¬
plished the better.
Their plan
certainly does not hurry it up.
requisite
Mr. Fraser recommends that the
Bank
for
ments
be
International
Settle^
enlarged and its func¬
tions extended to enable it to per¬
form the services heretofore re¬
ferred to,
It should be empha¬
sized, however, that the Bank for
International Settlements in com¬
parison to International Monetary
Fund
is
while
it
institution
small
a
be
can
very
and
useful in
helping to stabilize currencies and
effect
of
and treasuries
banks
countries
various
the
between
settlements
central
the
does not
it
have the large
power
size or the political
to exert the pressure it is
International Mone¬
intended the
tary Fund shall do. Its activities
would complement the ordinary
day to day transactions in order
to render more
currencies uniformly, even though
tions in
country having 10% of the ag¬
gregate quotas could veto the pro¬
posal because the hesitant country
would
a
stable the opera-;
cited
show
to
not
the
intent of the nity to discuss the proposed plan
plan to put the for the stabilization of currencies
Fund in a position to punish any with their technical men before the
member country which does not
plan was made public and I told
subordinate
its
sovereignty
in him that I had appointed a com¬
framers
of
the
such matters to the Fund.
drawn
as
velvet
It is
so
to enclose the fist in the
glove
but
it
is
there
to
strike if desired.
The
fourth,
statements
fifth and
sixth
apply equally
could
study post-war financial
mittee to
problems, which could be called
together whenever he advised that
his men were ready. He readily
agreed and phoned Doctor White
accordingly — but nothing
to act
ments
well to the Bank for International
further has been heard from them.
is easy to see that the
Settlements
carrying
requires no
Super Bank, but merely machin¬
ery already existing and of ac¬
Now I do not
cumulated experience.
the
against the members and it
nation de¬
clining to contribute would be
pointed out as defeating the pro¬
gram for reconstruction.
So we
would find ourselves in the posi¬
tion of having our original contri¬
bution frozen in the Fund, and if
we didn't pay up again we would
see a serious derangement in the
exchanges which is the very thing
want
we
to
correct.
to
to be
So
it
seems
impractical ap¬
proach to a problem, which, all
ods and its profits and its exist¬
ence
will be affected by these agree, should be solved if possi¬
ble.
Furthermore, I feel that a
changes, and the rapidity with
ness
formulating their plans
for expansion, are searching for
ways to improve service and re¬
duce
operating - costs,
and
are
analyzing market potentials and
traffic characteristics in their own
of these costs may be cut materi-
helpful of course, but as a matter
of fact they must acquiesce.
If
they refuse or if they withdraw,
as they may, they will create great
have
dis¬
its broadest opportuni¬
member's
a
quickly realized after the
termination
foreign exchange, but it
be in a position to
dominate the operations to the ex¬
tent of affecting any country's in¬
would feel the pressure of world ternal
economy. And it could very
debtor in substantial amounts to
opinion to force it into agreement. effectively
provide
a
meeting
other
countries.
That
is
the
If our country should find itself
place for the representatives of
United Kingdom of Great Britain
in that position we would see our the nations "for consultation on
and Northern Ireland.
Congress faced with world opinion international monetary problems."
There are a few of the smaller
demanding that it conform to the Mr.
Fraser's
recommendations
countries represented by directors
program of the Fund even though seem to me to be so much more
who sit in creditor seats but the it
might be inimical to our best practical and capable of accom¬
large majority of the directors interests.
plishment than the program out¬
represent nations which
either
And further, 'The Fund may lined by the technicians of the
from the ravages of war or un¬
require a member country to ex¬ United Nations that I hope the
favorable economic conditions at
ercise
controls
to
prevent such Congress will substitute the one
home are indebted abroad,
The
for the other, or as it may be ex¬
uses of the resources of the Fund."
reconstruction of many devastated
This refers to capital transactions pressed the practical for the ideal¬
countries
is
desired
and
large
and it goes on "Nor is it intended istic.
amounts of materials of all kinds
to
prevent
capital
movements
It is easy to see, however, that
must
be
imported so that the
which are met out of a member the authors of the Treasury plan
debtor nations need more credit
country's own resources of gold do not want the advice of prac¬
for those purposes.
It is but nat¬
and
foreign exchange provided tical men. Last October I asked
ural that the majority will
be
such capital movements are in ac¬ Mr.
Bell, Under Secretary of the
favorable to the liberal use of the
cordance with the purpose of the
Treasury, to give the American
resources
of the Fund, and
the
Fund."
Other examples can be Bankers Association an opportu¬
creditor countries will want to be
the
with
times en
[route.
In international trade,
there is an even greater spread
ties,
of
gold of the world. Another direc¬
tor also represents a great coun¬
try, but it has by reason of two
exhausting wars changed from a
creditor
position to one of a
Monetary
the opportunity for pilferage,
and because wear and tear and
one
about two-thirds of the monetary
the proposal for the International
and
of
expressed in terms of gold) shall
be made only with the approval of
organized, will unite to form the
Fund, subject to the provisions
the
Super
Government.
Now below" and then it
provides the
idealistically perhaps the Planners
conditions under which changes
are
drawing a beautiful picture, can be made. While member coun¬
but they seem to leave out the
tries may not give up their sov¬
practical question; will it work in
ereign right to fix their currencies
this
distraught world?
Imagipe to suit themselves
they are placed
for a moment that this great In¬
in a position where the finger of
ternational Super Bank has been
scorn and opprobium of the other
created and is at work. The stock¬
nations would be pointed at one
holders are the 30 or more United
which did not comply with the
Nations. They have selected their
clear intent of the plan, namely
representatives to serve on the
cooperative action. For example,
board of directors. The Board is
our
Congress would find it em¬
in session and is considering the
barrassing to take any action con¬
post-war problems before it. They
cerning
our currency or monetary
are many and
pressing. One di¬
matters without the approval of
rector represents a great creditor
the Fund. It is clearly the intent
nation, the United States of Amer¬ of the framers
that member coun¬
ica, which by good fortune £as tries to
a degree surrender their
great natural resources, a great in¬
economic
sovereignty.
This
is
dustrial and agricultural plant, an
further borne out by the evident
intelligent and industrious popu¬ intention in
the plan for the di¬
lation of 130 million people and
And furthermore, it is not
unreasonable to expect that when
Fund
value
be
pose
Number three
follows that the international field
'is
•
will be
me
survey
ners
a
very
of the work that the Plan¬
have carried out in the inter¬
national
out
of
because
these
the
aims
Now it has been said that bank¬
prone to criticize but lack¬
ing in constructive proposals. That
cannot fairly be said on this sub¬
ject because the excellent report
of the Economic Policy Commis¬
ers are
sion of the American Bankers As¬
sociation has laid down the funda¬
mental
guide
zation
the
principles
any program
of
which should
for the stabili¬
currencies
boundaries
and
within
defined
which
it
field, such as the Board
of Economic Warfare, does not
cause one to feel that the degree
should be confined.
of
create
New York who has probably had
in
their
ability
to
larger project to a pros¬
more
experience in international
monetary affairs than any person
in this country, has offered a defi¬
nite proposal for the stabilization
of currencies. This plan has met
with
general
approval
of the
American -banking profession be¬
cause it is believed to be practical
is
success
sufficient
to
confidence
carry
a
perous
profitable
or
matter of
end.
As
a
fact, there is consider¬
able doubt in the minds of many
that the Planners have done such
a
good job
The
on the domestic front.
philosophy behind them all is
the same, namely, that a few men
at the seat of government can suc¬
Furthermore,
Mr, Leon Fraser, the able Presi¬
dent of the First National Bank of
and
sound.
If
adopted it would
Jead to an early improvement in
cessfully plan the affairs of the
people for them and then getting
together with similar groups of
throughout the world
based on the dollar and pound
sterling redeemable in gold at a
Planners
stated value.
from
other
countries
exchanges
out the course for alLmanIt is reasonable to assume that
kind. Well, I think it is tpq ..bj^1
.under the Fraser plan a sound in¬
a"job even for the brightest
ternational medium of exchange,
map
miiid^;
with human nature what
it'is."
charge Mr. Bell with
I think he left- it with
bad faith.
Doctor
White, who either forgot it
purposely avoided carrying out
agreement. In either case, it
is apparent that he did not want
to call in the committee of the
American
Bankers
Association
or
which represents over 90% of
banks of this
country and
the
has
within its membership some very
able
familiar with the
men
sub¬
ject of foreign trade, foreign ex¬
change and stabilization of cur¬
is
It
rencies.
very
unfortunate
Government would at a
critical time like this fail to util¬
that
our
experience and judgment
the
ize
such
of
men
a
large body of trained
in its efforts to meet
the per¬
plexing problems with which we
faced.
are
"v■,[
.
.
Interesting Possibilities
The
stove,
post-war
and brewing
shoe,
tries appears
[
outlook for the
indus¬
attractive according
interesting
statistical analyses
of these fields
prepared by Lester
to
&
Co.,
Los
621 South; Spring Street,
Angeles,
Calif., members of
the Los Angeles Stock
Copies
of
these
Exchange.
interesting
an¬
alyses may be had upon request
namely the dollar and the pound, from Lester & Co.
Thursday, May 25, 1944
-U.
THE COMMERCIAL & FINANCIAL CHRONICLE
2156
\
V
incentive
for
only about a quarter of the
country's
workers.
Again,
the
obvious but significant point here
Post-W
v
(Continued fi
om
first page)
:
v-
,
drive, of all en¬
terprise is profit.
from
basically
"production
for
It thus differs
the motive of
use"
;
most
of
and theories.
Our system of capitalism or free
enterprise has not only made us
the richest nation in the world,
the most powerful in peace and
war alike, but it has given us the
highest standard of living any¬
where in history.
As the Baruch
Report says: "The war has been
a crucible for all of the economic
systems of the world, for our
own,
for Communism, Fascism,
Nazism—all the others. And the
American system has out-pro¬
socialistic. schemes
•'
duced the world."
JJ.It is true, of course, that when
as
free
now
democratic
peoples
are
compelled to fight for their
liberty free enterprise, competi¬
and
tion,
peacetime func¬
most
tions and motives must of neces¬
be subordinated, but only
the duration."
Our mar-
sity
"for
experience, had demonstrated
private enterprise their capac¬
ity to organize American industry
for the biggest production job in
and
America
"the
has
that
job
a
producer
made
It
whole
our
arsenal of democ¬
prise.
with confi¬
overwhelming ma¬
our
racy."
war
of
the
people of this
country believe firmly in restor¬
ing our system of free enterprise
as
quickly and fully as is pos¬
sible after the war ends.
And,
perhaps, it is later than some of
us think.
Even as the war effort
peak, raining destruc¬
the enemy,
rises to its
tion and defeat upon
and re¬
Though
production of some types of war
supplies is still rising it is taper¬
ing off in others.
War contracts
are being cut back, renegotiated;
some
war
plants are curtailing
maximum operations; some drib¬
demobilization
partial
conversion have begun.
war
.
defeated countries
low
sacrifice,
long years of
standards,
living
painful reconstruction. These are
the costs, current and future, of
war—the killing or maiming of
millions of young men and work¬
the burdens and privations of
ers,
non-combatants, the normal gains
of
peacetime production, the sus¬
of numerous
The genera¬
tion that wages a war has to pay
pension or ruin
small enterprises.
for it,
;y;-x
I
no
in waging war there can
thought
either
of cost or
the Gov¬
of profit.
Of necessity
ernment
becomes the
big
pro¬
ducer,
buyer,
seller, borrower,
spender, employer, director. This
is a clear case of production for
destructive use, with no con¬
of profit to anybody.
To be sure there will always be
use,
sideration
unpatriotic, sordid chiselers who find opportunity to make
a
contemptible profit from war
through black markets (in which
selfish buyers are
equally cul¬
a
*
.*
Above the confusion of voices,
earned
few
with sellers), strikes and
stoppages on war production, "get
mine now" grabbers in both in¬
dustry and labor, and pressure
grQups
resisting
adequate war
taxes and efforts to keep prices
stabilized and so to prevent in¬
flation
which
would
be vastly
pable
first
the
In
place,
we
the
that
end of all
production is consump¬
capital
and
heaviest taxes.
evitable
evils
These
than
the
almost in¬
of
war;
which
short of Gestapo meth¬
wrholly eliminate,
do
not,
however,
affect
any
large proportion of our people.
Most of us recognize the neces¬
sity in war times of such Govern¬
nothing
ods
would
ment controls as
fixing,
priorities, price-
rationing,
strictions
upon
and
our
other
normal
re¬
way,
ways
have
accumu¬
we
.
the
lies
.
pays
or
of the
end
it by exchanging his goods
The
that
what
line it is
who pays the bill,
services for those
important
the
he
here
*
is
get
unless, he is wil¬
consumer
wants
of others.
point
will
not
ing and able to pay for it, includ¬
ing a profit to producers and disdistributors.
In the distribution
dividing
up
of
the
total
product the largest share (more
than
one-half) goes to "wages
or
salaries."
Normally, fewer
total popula¬
tion
are
"gainfully employed,"
and of these only about 13,000,000
are
members of organized labor
unions, leaving three times ast
many voiceless, voteless, without
collective influence in bargaining
and
than
a
half of
our
in
As
and
sale" of these vast Gov¬
business
should
look
mean
the
that
more
and
abroad
and
in
must
In
blueprinting
considera¬
"in-pre¬
to follow vic¬
paration for
peace
and
small
that
inherently inefficient."
are the
considerations
"broader
of
pre¬
serving the traditional American
system of competitive capitalism,
of protecting freedom of enter¬
prise,
and
insuring
'ownership
with responsibility'." He submits
that even under present condi¬
have
the
efficient
economic
many
tions of first importance
"challenge the contention
big business is relatively
Moreover, there
for the end
Government
yv{;
of depressions
business tends to
small
business is
that
post-war
instances
busiT
as war cas-
;;
consequence
wars
which
period. Private
enterprise alone cannot meet the
challenge
of
reconstruction
at
home
small
workers each. Beckman cites facts
of collaboration with Government
in
a
million
disappear
relatively
smaller and
big business larger. Both are es¬
sential to
the preservation and
strengthening of our American
system of competitive enterprise.
Moreover, "small business is es¬
sential to the maintenance of big
business." For example,
General
Motors
states
that
over
18,000
separate organizations supply
them with parts and materials on
a
sub-contracting basis and 43%
of them employed less than 100
holdings and inventories
liquidation must be gradual and
orderly pending the time when
business can take over safely and
profitably. As Secretary of Com¬
merce
Jesse Jones has recently
not
all
of
become
ernment
does
may
ualties.
To avoid the shock, loss, confu¬
sion, and price disturbances of an
"This
half
a
nesses
in terms of plant, ma¬
chinery and materials the physical
job of reconversion seems and is
"gigantic".
said:
82%
manufacturing
that
ualized
"auction
before the war over
small enterprises. Even
were
plants were single unit businesses
employing less than 200 persons
each. He thinks it quite possible
$50 billion of stock piles of
all sorts of supplies all over this
country and in foreign lands. Vis¬
of sustained
hope
production
to
reached in war,
national in¬
the
and
hold to
the
high levels
though some well-
supported estimates maintain that
the latter goal can be reached and
held
within a few years after
tions small business does not need
"crutches in the form of subsidies
or
What it does
special favors."
sorely need is "action to remove
the
institutional
principal
and
artifical pressures which unfairly
burden small business and which
grossly discriminate against it " '
other suggestions - for
protecting and stimulating sniall
yf Among
business
Dr.
Beckman
with emphasis laid upon
the re¬
and women
who are our first concern," and
(2) "taking the Government out
of business," and offers a "Com¬
plete Kit" to meet the varying
turning service
men
only from large corporations
but from Government
as
itself,' just
the farmer is protected by the
Department of Agriculture, labor
by the Department of Labor, and
big business by several wellknown governmental and private
needs of war contracts while ful¬
agencies; and alleviation of the
ly protecting the Government.
capital stringencies facing small
In recent meetings, panel dis¬ enterprise by providing the nec¬
cussions, periodicals, and public essary sources of risk capital and
addresses executives of "big busi¬
long time
credit, thus putting
ness" have expressed confidence small business more on a
par in
in their ability to cope with the that
respect with its bigger
admittedly grave problems con¬ rivals."
/
V.:.. y y y"
fronting industry in the transition
When after Pearl" Harbor this
period and after if they are as¬
country knew that we were ac¬
sured that "atmosphere" of enter¬
tually "in the war" and that mass
prise that is really- free,—free,
production of every kind of war
from unnecessary choking restric¬
equipment
would
have
to
be
tions and controls, free to compete
speeded up to unparalleled capaer
under
reasonable and clear-cut.
ity, big business naturally was
"rules of the game," free to seek
expected to do the major part of
venture
and investment
capital
the job. How well it met, is stjll
without undue red tape limita-;
meeting
that
assignment
the
tions. In general big business has
enemy now know.
There could
been more completely converted
be no thought of an equitable al¬
to war production than have smalh
lotment of war contracts but only
businesses. Their reconversion to
.
peace
mate
a
comes. Other studies esti¬
decline in the national in¬
of
come
from
a
half
to
a
third.
budget of last
January assumed an annual post¬
President's
(The
war
national income of $125
lion.)
billion
bil¬
But whether it will be $100
or $200 billion will depend
large measure upon the en¬
couragement, the incentive, for
private enterprise to produce and
in
distribute
needed
to
the
goods and services
this
absorb
pent-up
purchasing power of our own
people and to meet the enormous
and urgent needs of millions in
other lands where
nomy
a
normal
eco¬
will have to be rebuilt from
the ground up.
Industry which has made such
magnificent war production rec¬
ord
can
be
depended upon to
"throw all its weight" into post¬
a
production and employment
given a fair chance to make a
profit (or take a loss). For a dec¬
ade, before the war "big business"
war
if
especially was subjected to re¬
strictions, controls, Government
with employers.
In other words,! co!fnp^iition, and burdensome tax¬
collective
bargaining; ; functions', ation whicjixgreatly t weakened this.
.
90%
,
come
the
ness concerns
some
every
In these
Business con¬
sists essentially of the exchange
of goods and services for other
goods and services by means of
an : intricate network of mechan¬
isms, processes and devices. None
of the prime factors in produc¬
tion—land, labor, capital, man¬
agement—will or should work
without reward, that is, getting
its proper share of what is pro¬
duced according to its or his con¬
tribution to the cooperative effort.
at
stated, tjiat pf the 3. million fyusi?
$15 billion worth of Governmentplant and equipment plus
We
the top.
to
small
These
■
owned
unparalleled
an
level
c
burdensome
jmo.re
carried
have
,
able to pay for.
consumer
1
a giant, monopoly,
selling,
borrowing,:
producing, allocat¬
ing, spending, and employing, setting prices, regulating our very
"way of living". To cite a single
example of Government control
of war production, our $50 billion
of
pre-war
privately - owned
manufacturing plant and equip¬
ment has been increased by about
real sacrifices.
post-war employment. It is less
than realistic to expect peacetime
the
■'
buying and
lend-leasing,
drive of
management work on natural re¬
sources
to
produce
goods and
services that consumers want and
And
■/
more
over
materials
or
sell?
proposes
buying tory," the Baruch Report empha-i
"effective machinery for enforce-,
power.
'
■
sizes two
main
objectives: (1) ment of
existing
antitrust
laws,
In this pent-up buying power of "getting us all back to work in
including patent reforms; estab¬
135
million
people and in the peacetime enterprises," and sug¬ lishment of a Bureau of
Small
peacetime capacity of agriculture, gests a special authority "to give Business Research and
Education;
industry, capital, and labor to its entire attention to the problem and
protection of small business
maintain
production at a high of bringing jobs to all workers, not
purpose
and
Laborers
tion.
time
drive
help
or
businesses, ranging from the one
man (or woman)
grocery, repair,
or
service shop to the store or
small manufacturing "works" em¬
and, despite a hand in business." To the same
higher taxes and some increase in effect the Baruch Report says:
living costs, have saved more. We "Basic wartime controls must be
have paid off billions of mortgage, retained as long as necessary, but
installment, and other debt. We all controls and the war agencies;
have greatly increased our sav¬ administering
these
controls
be
ings accounts, bank deposits, and should
liquidated when no
insurance
policies, and at the longer necessary."
lated
must be
and
reminded
its
to
ment to become
Despite the strains and exactions
of war we have "lived better" on
have
itself
of
lack
fabricate
ploying a dozen to a hundred
workers,
outnumber
big busi¬
nesses many times and constitute
activities would be very short¬ the very heart of our industrial
sighted and, perhaps, calamitous. democracy. Dr. Beckman of Ohio
The war has forced the Govern¬ State University has recently
activates
the whole than ever before.
of
'■>
«
Abrupt retirement of the Gov¬
ernment from all its war-business
furnishing enough
to support the mightiest military
outlay in history and still leaving
more
than enough to supply all
the necessities, most of the com¬
forts, and many of the luxuries, of
normal living. Aside from, a few
types, of consumers' goods (new
automobiles, homes, furnishings,
etc.) we have lacked but little.
Only those called upon to do the
actual fighting and their families
make
devote
enterprise, and of umpiring
the game.
national income have doubled
various
reports and plans con¬
cerning
post-war
employment,
some
simple but basic economic
considerations stand out clearly.
are
Aiid
be
yy
| \
surveys,
tive
system of free enter¬
have had to
and
and essential function of
insuring a fair field for competi¬
in three years,
jority
businesses
small
;
thousands of
throughout the
of the
what
of
It is to urge that wher¬
possible and as soon as pos¬
Government get out of
proper
productive capacity and
our
billion dollars.
a
But
ly ahead.
business
income from
consumer
Under the compelling
be asserted
can
dence that an
bles are being released from the
production has been
huge accumulated reserves for
devoted primarily to destructive
civilian use.
A trickle of over¬
purposes.
Aside from technolog¬ seas
fighting men are coming
ical advances, new materials and
home and an increasing number
processes, war spells destruction, of
discharged men are looking
waste, economic exhaustion, debt for work.
Soon the full tide of
(mortgage on future production), the
employment problem will same
and iq the case,of ravaged and
bond
set in.
^
venous
to
half
ever
sible the
it
flow of wealth and
plans involving the expenditure
country,—the
retail > store,
the
service, repair, and specialty
shops which could not get into
war
work and by the hundreds
have had to close up shop because
dous tasks of reconversion direct¬
creasing standard of living keeps
from overflowing.
This free
in
history,
it in
handicapped
responsibility. This
observation
is that the worker whether or¬ is not to suggest the abandonment
of
all
Government
regulation
of
ganized or unorganized does not
employ himself but is employed business, or its withdrawal from
by industry, and that to enjoy a active participation in the tremen¬
.marily as his political agent, re¬ of living, even though we may
serving to himself the right and exercise our democratic privilege
and stable, balanced economy their
privilege of wealth getting and of grouching about them
distributing—in short, of making sounding off about how much total joint production must be
better
it
could
be
done.
J
'
a living.
To that end he should
adjusted to the demands of total
To
bur
almost
incredible consumption. Too much produc¬
require of his Government only
that by legislation and adminis¬ achievement in war
production tion of particular commodities at
tration, and with special privi¬ history will credit no small part a given time or place causes a
leges or favors to no group or of the victory for freedom.
In glut, so-called "over-production,"
class, it shall establish fair and this achievement, culminating in and loss to producers.:- Too little
clear-cut
"rules of the game," an annual aggregate war output production or faulty distribution
and keep clear the--field of pri¬ exceeding that of all the rest of has the opposite result, with un¬
vate competitive enterprise.
The the world, valued in , terms of employment and lowering stand¬
term "free enterprise," has been money at over $90 billion, there ards of living.
Only through in¬
given many definitions and mean¬ is enough "glory" (though this creased production and expand¬
ings. For the present purpose we word should be reserved for those ing business with resulting lower
shall consider it as that economic who risked their lives to pre¬ unit costs can labor get better
system under which the individ¬ serve our freedoms) to go around wages, that is, more goods and
ual has access to the raw mate¬ —to agriculture, labor, industry, services for a day's work.
And
rials of nature, to labor and cap¬ and
the
scores
of coordinating the
same
principle
applies to
ital (tools, machinery, etc.), and agencies set up for specific war agriculture, industry and public
to
managerial skill and expe¬ tasks.
It may not be inappro¬ treasuries.
There
is
only one
rience, under conditions of open priate, however, to point out that well,' the total national income,
competition, in order to produce in the main these agencies, or¬ from which can be drawn wages,
and
distribute
the goods and ganizations and activities have profits, interest, dividends, taxes
services needed by consumers, at a been directed and coordinated by and public revenues.
Productive
profit to himself, and to the eco¬ executives whose business genius, enterprise feeds this well; orderly
nomic and social advantage of all. organizing and managerial skill consumption under a steadily in¬
The motive, the
and
the fulfillment of its function and
of what
peacetime production, therefore,
may be expected to require more
time, more rearrangement of
mechanical, plant, and distributive
facilities, more financing, yet all;
of them while concentrating upon
the
war
one
as
great job of finishing the
quickly as possible are
making plans for post-war
opments.
has
One
large
devel¬
corporation
recently announced, post-war
the
could
concerns
imperatively
turn
out
needed- equip¬
ment
most
quickly and in the
largest volume. As war produc¬
tion
got
into
.
high
gear
smaller
businesses began to get a share of
the work by means of sub-cont
r a et s
and specialty- products
through the Smaller War Plants
Corporation and
otherwise.
In
,
,
post-war planning this all-impor¬
tant group must be
given primary
<
Volume 159
THE COMMERCIAL & FINANCIAL CHRONICLE
/Number 4284
consideration
in
and
many
to get
back into normal business.
Specifically,
they
should have
first call upon materials, tools,
,
the
and
leased
will
which
like
be
re¬
stock
Government
from
and
cases
financial aid to enable them;
some
piles and other reserves as soon
as the war need permits.
•
Most of the reconversion pro¬
grams and post-war plans, includ¬
ing those of the Government, rec■sognize the necessity .of restoring
small business to. its rightful place
in our American system of free
i;
Post-Wai Outlook Foi Securities
if
is
than
slightly, and
the corporate excess profits tax
eliminated.
The deficit, how¬
more
would probably not be very
ever,
large.
Congress will have to de¬
cide whether the present tax rates
be reduced
can
balanced.
be
to
consider¬
cannot
effort will
any
extent if the budget
able
Every
Undoubtedly be made to encour¬
age private industry, including all
enterprise. Thus, the Baruch Re¬ possible corporate tax reduction.
port: "The particular problems of This problem of the Federal bud¬
small business
have been con¬
get and the post-war structure is,
stantly in our mind. .
As pro¬ indeed, a serious one.
Further¬
duction controls- are relaxed par¬
more, it is likely to be compli¬
ticular care should be- taken to
cated by other considerations. ;
.protect the competitive positions
The government will probably
\of small business (the broad back- be forced to make efforts to main¬
bone of enterprises s e a t t e r e d
tain business at "a higher level
-throughout the country which than
the
prevailing
economic
•rely largely*on the initiative and forces seem likely to provide. On
.
resourcefulness
individ¬
their
of
-
.
ual/proprietors) as far as practi¬
cable within the needs of the war.
Cancellation of-war contracts
can
;be
guided to permit the earliest
^releasing of small concerns which
.can
convert back to peacetime
the basis of my estimates the vol¬
of production might run
ume
the
tween
1940
and- 1941
Civilian non-agricultural
those
in
ment
years
be¬
levels.
employ¬
averaged
just under 39 millions with an
average work week in manufac¬
production." Legislative measures, turing of just over 39 hours,
such as the Murray bill, looking After the war we will
certainly
to the retention and expansion of
employ
several
million fewer
the SWPC, would do much to ef¬
people at this level of production
fectuate this purpose and might because of
improved methods of
well prove to be "one of the most
operation
throughout
industry.
important effects of the war on Even including a military force of
long-range American economy."
several million, civilian and mili¬
Finally, let it be reiterated that tary employment, excluding agri¬
a
high level of employment can culture, will probably be less than
be
attained
in
the
post-war pe¬
through a high level of
profitable production, and /that
this objective must be achieved if
we are to
avoid the dangers of
inflation
on
side and business
one
depression with heavy unemploy¬
ment
the other. Solution of the
on
complex and difficult problems of
the reconversion and post-war pe¬
riod
will
require- the
greatest
business statesmanship in plan¬
ning for the future and the great¬
est boldness in putting those plans
into execution.
call for
tion
Above all it will
cooperation and coordina¬
of
the
best
thinking and
planning and doing of which we
free people under free enter¬
as a
prise
capable.
As
leading
industrialist has recently said:
yf
are
"We shall emerge from this
war
f,
a
with
the
greatest produc-
tive capacity,
the
largest
and
j*»y best-trained labor force, and
jy the greatest pent-up effective
for goods and services
history. Given a favor-
million..;
39
riod only
of
total
civilian
all
>
therefore
prosperity of.our system of free
enterprise is boundless."
•"Y: Yes, this can be "an adventure
in prosperity," the greatest since
the adoption of the Federal Con¬
anyway.
The
ment.
additional/ expendi¬
tures will probably run
the bud¬
get up by several billion dollars
to at least $25 billion.
In'that
would
deficit
the
case
run
so
large that substantial tax reduc¬
be
will
tion
plish.
difficult
"
.
Under the
;
■ <
• <
to
accom¬
•
circumstances, it re¬
that corporate
the
will
be
low
as
post-war period.
additional
as
to
taxes
40%
in
Some form
the
take
and
work for its
Meantime,
our
let
get
us
on
with
immediate job of winning the
.-'V -v}■
•war.
*Dr.
the
John
writer
of
Thorn
the
Holdsworth,
article
"Post-
War Jobs," is a recognized
authority in the field of finance
international
and
is
the
author
economics.
of
He
the
widely
book, "Money and
Banking," now in its sixth edi¬
tion; a "History of Banking in
Pennsylvania"; and many other
publications, and is a frequent
contributor to economic, financial,
and business periodicals.
He has
taught at several universities—
Pennsylvania, Pittsburgh, where
used
he
text
was
Business
Dean
of
the
School
Administration
for
evidence
far
in
advance.
is
gathering that
of approach
may be huge government or gov¬
ernment-guaranteed private cred¬
its to foreign countries for re¬
one
of these
avenues
Dr.
Holdsworth's
teaching,
lecturing and research
backed
by practical expe¬
corresponding
conditions
the
without too- much friction.
in
porate tax rates may exceed 40%
the
pre-war
think
that
there
stock
will
lower
at
worst
best possibly
translate
1943
into
more
much
and
not
much
be
and they
worst
$12
from the
take
we
lasting
;
peace.
handle
we
ourselves
give us a level
prices at least as high and
of stock
I will
specific
have
during the
probably somewhat higher than
present prices.
This conclusion
may not square with some very
high projections I have heard.
been
can
see
that it is difficult for
The divergence in the rates of
capitalization of earnings and div¬
idends that has* prevailed during
the war will probably continue
into the post-war period.
This
and
large.
war
reserves* are
American
if
lower
at me to accept some of the underly¬
be as high ing assumptions necessary to ob¬
tain these very high projections.
payments
conservative
corporate
may
share.
per
years
will be sufficient to
at
earnings were almost $10
share in 1943. Post-war they You
per
as
be
not
of
20% higher.
this
a
Unless
The Dow-Jones industrial
terms.
As al¬
badly, therefore,;'I believe in¬
after vestors' confidence in the future
industry • will emerge
in a strong financial
war
position.
If earnings should rise,
dividends may rise
correspond¬
marked than that of earnings
ingly
dividends
more
from
the
1943
divergence
level.
Also, dividends should drop less panies.
earnings should be lower than a great
if
I
estimate.
I
see
no
reason
to
suppose
that Dow-Jones dividends
will
4ower
be
in
amount
has
been
among
even
and
tax
by
factors
will
affect
and
industrial com¬
The result is likely to be
divergence in the action
of individual issues.
indi¬
ways.
mobile
companies, for example, is
of
years
The
he
was
Bank
of
Pittsburgh, N, A., where he or¬
ganized and operated the foreign
relations (foreign trade- and for¬
eign exchange) department; and
was" President
of the
Pennsyl¬
vania Joint Stock Land Bank.-
-
Any
bank
reserves.
conceivable
loans
increase
should
not
ir*
be
large
enough to necessitate heavy liqui¬
dation of bank
holdings of bonds.
Much has been said about the pos¬
sibility of large-scale liquidation
of savings bonds having a - de¬
pressing effect upon bond prices.
The
government has many ways
this problem if it
should occur but chances are that
of:
meeting
this
problem
serious
will
not
become
a
There
one.
will, < of
be liquidation of savings
course,
far
more
;7'f*7..
•
by Hugh
Co., summarizes the
"Anti-Inflation Bulletin" recently
W.
Long
&
issued by the Life Insurance Com¬
panies
of
America, "in
group of the nation's
omists
These
tial
of
which a
leading econ¬
the post-war outlook.
economists are in substan¬
scan
agreement
on
the
likelihood
u
post-war boom.
a
-
/>C;/'''".'"/'C-".
'."777
Calling attention to "London
Leadership" in the stock market
during recent years, Lord, Abbett
points
of
in
out
Abstracts
market
the
that
current
the
New
issue
York
is
London,
•
substantially - behind
making allowances for
the two-year price lag here/ States
the bulletin: "Our prices, from the
middle of this year to the middle
of 1945, if the London pattern is
followed, will rise from 136 to 162
the Dow-Jones Industrial Av¬
on
erage, and advance further in the
third quarter next year."
'/
Boston
assets
1944,
a
of
as
year
Fund
reports total
$11,863,738
on
net
April 31,
compared with $10,33$,881
earlier.
During this" pe¬
riod net asset value per share rose
from $15.74 to $16.49.
Mutual Fund Literature
Calvin Bullock—The
May 15 is¬
Perspective,
discussing
"Trends
in Utility Regulation."
Distributors Group—A Cur¬
of
sue
.
.
.
rent Information Letter and
vised folder
re¬
a
Institutional Bond
on
Shares
sheet
together with a portfolio
showing present holdings of
that fund.'.'.
&
ers
Research
on
.
National Securities
Corp.—Revised fold¬
National
Bond
Series and
National Low-Priced Bond Series.
Also suggested letters for dealer
pears
to—be- no reason to fear
higher bond yields after the war mailings on these two series.
Selected Investments Co.—A cur¬
or to fear that price inflation will
depress high grade bonds.
It is rent portfolio on Selected Amer¬
.
assured than the outlook
quite possible that interest rates
The ending of the
for the steel and copper producers.
The impact of the coming changes
in the corporate tax structure
*
7
,
i
The mid-May issue of The New
York Letter, published
any
are
five
banking
our
more
the
corporations
in
varying
The outlook for the auto¬
For
will return from circulation after
the war which will also augment
circumstances
earnings
those
than
good chance
a
these
under
taxes
is
pre¬
advantage of the opportunity that
is offered to really establish the
although they will be substan¬
tially below the present rates.
/ basis for
I
that will
If that is
done, most of our
post-war problems could be solved
cor¬
vidual
Vice-President
purchases
here
of
muchgoods:
This will add to
gold reserves.
We will also
again take gold in payment for
our
exports.
Secondly, money
our
77'
der
vail.
ready mentioned, world conditions
of could be far more favorable than
volume
business in the past and the
writing,
rience.
for
needed
machinery
As
an
investment
counselor,
important therefore, I take a constructive
post-war period
point of view towards the post¬
eign markets will be important than about $6 per share, the level
war level of common stocks on a
during the post-war period as one of 1943.
'
highly selective basis. If this is
potential source of stimulating
The really important feature of too conservative a position, I shall
domestic business.
The difficulty
the post-war common stock earn¬ be
happily
surprised
and my
is to find a sufficient volume of
ings will be the divergence be¬ clients handsomely rewarded.
imports without disturbing do¬ tween
individual industries and
mestic industry.
Also, the world
Post-War High Grade Bond
companies. Some will show larger
Prices
earnings' than in 1943, others about
ganizations, and of the Econo¬ the same, and some companies
From the discussion so far it is
mists'
National
Committee / on will show lower
earnings.
It is apparent that I believe money
Monetary Policy.
obvious that post-war economic will continue cheap. . There ap¬
I believe that for¬
construction.
of
versity of Miami, where he has
Dean (now Emeritus)
for
15 years.
He is a member of vari¬
ous ..economic
and business or-
so
10
years,
Princeton, University of
Southern California, and the Uni¬
been
discuss
Much
accomplishment.
the
Dividend
coordinated effort to that end and
.
bal¬
-
vestments.
stitution, provided industry, agri¬
culture, labor, Government, and
every community, every citizen in
the land unite in an intelligent,
dollar
Mutual Funds
should
be forced
beyond public works to at¬
tempt to meet the problem of
unemployment.
The
possible
avenues
of approach are many
but they are difficult to visualize
and
"■
system of incentive taxation for
corporations may be instituted
which will encourage capital in¬
The government may
gold
accumulated here by for- "
eign nations will probably be used
,
average
to go
large
ance^
bonds, but the government should
and or¬
/
Post-War Stock Prices
be able to finance such require¬
ganization will be established that
If earnings and dividends for ments for funds without much dif¬
will insure peace and that will
common stocks as a group in the
ficulty under the conditions that
provide the foundation for an
post-war period should be within I visualize.
enormous
revival
in
peacetime
a
I therefore expect high
range
moderately below and
grade
foreign trade in the post-war
somewhat
above those of
1943, bond prices to remain high in the
world.
Future war and political
chances are that common stock post-war period.
developments
may,
of
course,
prices will be as high or some¬
—♦——■—t——■—■
'
■•■■'•Y'alter this prospect.
what higher than at the present
I shall not take the time to dis¬
time. / This would be true if their
cuss other possible steps that may
rates of capitalization should im¬
(Continued from page 2153)
be taken by the government to
;
prove moderately.
Earnings and dustry on a
greater scale than
stimulate business.
It is evident
dividends are now being capital¬
ever
before.
Careful
selection
is
enough that there may be many ized at rates that are neither very
requisite for successful longand varied demands for govern¬
liberal
nor
" very
conservative. term investment." - ; •
■';>>
ment funds beyond those that I
Some improvement post-war could
have
enumerated
in
compiling therefore
easily take place. It is
Considerable encouragement for
budget
expenditures.
This all true that in the world that I have
investors holding common stocks
leads to the same conclusion—do
outlined there will be many diffi¬
is to be found in the current issue
not take it for granted that the
cult problems.
The Government of Brevits. As "Next on the
Pro¬
corporate tax rate of 40% is in will be an
important factor to'be gram," it is
pointed out that sim¬
the bag.
reckoned with and some of our
plification and revision of the
pre-war problems will reappear in Federal
corporate tax structure
Earnings for Common Stocks
a
modified form and under dif¬
should take place.
With passage
It is difficult to generalize about
ferent conditions. I hope and be¬
of the individual tax
simplifica¬
earnings for common stocks in lieve that it will be
possible to tion bill by the
the post-war period.
House, investors
It may be arrive at a favorable
working re¬ have reason to
hope that before
dangerous and misleading. I have
lationship between government, long a way will be found to eliniindicated that we should enjoy a
industry and labor.
We have a inate present
inequities in our
substantial expansion of business
good chance of creating harmo¬
tax structure.
from pre-war
V'v
levels while de¬ nious relations between them un¬ corporate
'V.'. 7
international
place of excess profits taxes may
be evolved.
On the other hand,
a
within- industries.
.
common
mains questionable
of
competitive busi¬
ness, the future expansion and
million
10
be
and
Foreign markets will be more im¬
some companies than to
others. The element of growth of
market will be very competitive.
individual • companies
into
the
Huge American credits could, of
post-war period is also of great
course,
temporarily solve these
importance.
problems.
I have allowed for a
Since the war started in Europe,
very
large increase in foreign
our economy has been in a state
trade from the pre-war level in
of contstant flux, There is every
making my post-war estimates,
reason
to believe that the next
but not on a scale that may be
few years, including the post-war
possible under the stimulus of
period, will also be ones of great
credits running
into many bil¬
changes and economic adjustments
lions of dollars.
which will result in a strong di¬
The
first
requirement for a
vergence between the experience
greatly enlarged foreign trade is
among individual companies and
assurance
of a prolonged peace.
industries. I am stressing this be¬
This
can
only come about by
cause
normally
in
peacetime
close cooperation among the lead¬
earnings and dividends in most
ing United Nations.v Stability of
industries tend to move with fair
exchanges
and
elimination
of
uniformity as economic conditions
trade
barriers
are
also /indis¬
change.
That is not. likely to
pensable.
At the present time
there is reason to believe that the prove true in the next few years.
will, indeed, be difficult to
get along with such unemploy¬
ment without starting very large ferred demand is
being filled even
progams
of additional Federal, though
business
may
not
be
State
and
local
public works. nearly as good as some observers
Such public works will be largely hope and believe.
Profit margins
financed by the Federal Govern¬ will
probably be lower than, at
It
without competition by Govern¬
ment and unnecessary restricupon
gives a
military em¬
and
ployment of no more than 47 mil¬
and possibly less.
The total
employ¬
ment under peace conditions sev¬
eral years hence should be 56 to
58 million.*
Unemployment may
taxes
lions
employ¬
millions
9
to
labor force available for
'atmosphere' in which free
enterprise can function freely
able
;;
8
lion
demand
in
;;
.
agricultural
Adding
ment
price relationships will differ' The
Detween
portant to
(Continued from page 2145)
reduced
2157
will be lower.
war
will re-establish certain eco¬
nomic
W^ll
forces
that
tended
to
in-
.
*
ican Shares and the current issue
of "These
tant."
...
Things Seemed Impor¬
Broad Street Sales Corp.
issue
of
The
Broad
—Current
from company to •corhpahy.' -crease our monetary reserves in Street Letter and a study of "DouPotentialities
of
Competitive conditions,' Govefti- the pre-war period. Among these bled-Barreled
ment policy and changes In Yost' I will mention two of importance. Growth Stocks."
vary
(
■■■PIP*
After The War-What?
Most Americans need five kinds
of material
demobilized, especially before factory re-tooling is completed.
It isn't a matter, however, of
finding 65 million jobs—say, 55 to
things—the Big Five,
Plenty of
sometimes call them:
that
of
worth
dollars'
billion
20
industrial
new
plant
are
we
building now, both public and
private—synthetic rubber, alumi¬
up
We have stepped
manufacturing capacity
steel.
num,
our
ways
much
as
but
of Lend-Lease,
because
produce about V as
top of that, if you
will
we
much.
On
please, We are going to produce as
much more in the way of war
That
that
means
time
of
living any
In financial
to.
care
we
guns.
double
can
we
standard
1939
and
ships
tanks,
goods,
the
terms, it means an increase in the
National Income from around $80
billions to $160 billions.
The "Big Five," as you
do
not
out of our
come
mine.
work
out
come
of
all know,
hat.
a
labor,
They
and
yours
Work for everyone
who
can
probably will be the strong¬
est demand there is after the war.
Let
imagination rest for a
those 12 million
lean, hard fighting men of ours
completely uninterested in selling
lemons, watermelons, apples, or
any other fruit on street corners.
I have been to Fort Hamilton,
"G. I. bull sessions," and talked to
the boys just before they were to
go overseas, and I think I can
make that statement emphatically.
Full employment isn't just a
job. It is the feeling that you be¬
long, that you have a place, that
your work amounts to something.
When children are shut up with
nothing to do for any length of
time, as any mother knows, they
are
quite likely to start pulling
your
moment
upon
the house down.
arid
men
And when grown
long deprived
women are
been
maintenance
been considerable numbers
Government, and in the
1929
4.
new
to
Harbor; private business,
plus the government, plus these
non-profit enterprises, all three
combined, fell short of providing
full employment by 100 million
man-years of
labor.
The labor
lost during that grim period would
probably pay for the war. The
worst unemployment came when
that
private business can auto¬
matically employ 57 millions after
demobilization day,
What
will
be
the
shape of
demobiliza¬
months ago,
American economy on
few
A
nearly everybody was prophesy¬
ing a great boom to come out of
these tremendous banked up sav¬
ings. Now the pointer seems to be
swinging toward a great depres¬
sion. The Post-war Division of the
Bureau
materials
of Labor Statistics warns
be
at least
at work
or
deflation.
Every time Hitler was
Russian cam¬
driven back in the
the
quantities of
available—plastics,,
65
million Americans
The
Federal government, spend¬
$100 billions a year, will be
meeting the payrolls, directly or
indirectly,
of
around
70%
of
everyone employed.
That means
ing
if ,;
never
unemployed there
the
war
ends. No
are
when the
Germany
is
million Americans would be with¬
would be
one
out work.
if
should be knocked out
this will
first!
Nothing so extreme as
happen, of course; but it
gives us a measure of how far the
American community at the pres¬
ent time is deliberately under¬
writing its own employment, quite
outside the normal
course
ply
It gives
and
measure
demand.
of the task of
of sup¬
us
a
reconver¬
Japan
on
knocked
We believe that private business
or
later will have
a
place
for most of those demobilized; but
if
economic history
to
not
tell us,
have a
has anything
it tells us that it will
place for all of those
in
which was $40
billion. It must mean, directly or
indirectly, at least
10 million
workers. Now, is there any way
income
we can
1932,
absorb 10 million workers
the aircraft complex after the
war?
Of course there isp't.
On
in
the day
tacked,
Pearl Harbor was at¬
had less than 400
transports for all our commercial
needs.
Massachusetts and New
the pluses, assets, if you /want to
call them that—conditions which
-sooner
is not far from our entire national
we
balance sheets.
in
'•
'
when the
"
the fox-holes and camps.
In
field
international
the
if opr
fixed
or
farm
blocs
labor unions.
or
reestablishment
What is going to
What
happen
Russia
is
a
j
com¬
plete reestablishment of free
tainties.
Lend-Lease?
in
good
as
for
high-
the
of
com¬
as
going to do?
wheeled bicycle. As Walter Lipp»
man
has said, "Competition has
ing to do?
survived
to
What is Britain go¬
This will not make for
employment in the export indus¬
tries.
'
'
'
„
,
dreadful downswing, as we
a
after the
stock
market crash
As Chester Bowles
has said: "If we permit the econ¬
omy to sag immediately after the
war we face a tailspin.
We face
the menace of deflation feeding
on
itself, with no one knowing
how fast the economy will fall,
—only
worse.
It
how far.
or
perative that
seems
to
me
im¬
must not permit
we
this
to happen.
Assuming full
only
where
men
unable to abolish it."
were
About 50%
of all U. S. goods have been taken
out of the free market at some
the
.aim of
is
four
are
ways
completely rationed
economy,. in which
citizens are
assigned to work, as in the Army,
and then go to the mess hall and
get their supplies.
Money isn't
used
at all.
If you don't like
strawberries., you've got to eat
'em, just the same.
Second, by completely social¬
ized economy, where the State
owns
a
of
most
industrial
the
and
plant and appoints
managers to operate it. Money is
used, consumeers have some free
agricultural
choices.
berries
Perhaps
get blue¬
strawberries.
you can
instead
of
But the Government
runs nearly
everything, and free enterprise
just about disappears.
'v
Thirdly, be compensatory econ¬
omy, where business men largely
own
and
operate
production,
but
the
.
where
underwrites
ment
means
of
full
Govern¬
employ¬
ment through the control of finan¬
cial
machinery,
through
security
measures,
and
social
public
works.
economy,
Of
these
between free enterprise and State
regulation.
a
The State is
four
theoretical
so¬
cieties, all but the first, have been
kind of
a
banker under this system, not a
producer, not
distributor.
a
..
•
Fortune
magazine, in its famous
supplement of December,
1942,
develops the thesis that the choice
is
longer
no
petition and
forms
of
between
State
free
control, but be¬
tween the State
financial
as
as
un¬
production
With the State
manager.
derwriter,
com¬
less rigorous
more or
derwriter and State
as
un¬
Fortune,
large
areas
of free enterprise can be
maintained and perhaps expanded
over
a
National Policy,
our
to achieve it:
First, by
«
says ■
what
had before the
we
Fortune then
employment
r
big way by corporate groups,
monopolies,
trade
associations,
petition look about
Fourthly, by free competitive
where savings'are so
workers in government services promptly invested that the dollar
who will have no place to go circuit is always closed, and plant
and labor resources fully used. In
when the war ends. Some people
this society the Government acts
will say, "Well, good riddance,"—
as umpire only.
demand of con¬
but even a bureaucrat must eat.
sumers for goods, especially dur¬
able goods.
We must remember There are said to be 1,600,000 of
1. The pent-up
unworkable
Today the chances for the
.
5. There will be the emergency
Here are some of
should aid employment
war ends.
is
It
administered
be
to
,
.
•.
prepared a rough balance
4. Then, there will be 10 million
sheet of pluses and minuses. As soldiers
coming back on the mar¬
your Chairman has said, I am a ket. They are off the market now,
ity from
to peace.
complex this year is going to ac¬
count for some $30 billions. That
have
-—
war
planes, ground crews, bases,
training pilots, everything.
The
trying to construct a picture
the post-war employment, I
My mind runs naturally to
us,
of
military experts though.
C.P.A.
before
war
complex involves all activity con¬
nected with aircraft, the making
It wouldn't be the first one
York.
lies
that
of workers
boom
industries,-
discharges
employment. 'Take the aircraft
complex alone. I say "complex"
rather than
"industry," because
military experts
to shift
60% to 70% of all economic activ¬
sion
the map. This
heights un¬
on
theoretically there
orderly fashion.
shipbuilding, machine tools,
aircraft, are bound to create un¬
In
of
the
can
an
like
It
out.
Mass
from
matter, or how long it will
to knock out Japan after
on
of surplus
a lot of firms
do it again, unless
dumping
1918, and
3.
is going to end, for
war
The
released in
really knows
take
the
8.
into
in
will be when
one
it.
there will be all kinds of uncer¬
did
2.
great automatic boom theory, and
am equally unimpressed by great
Republican
strategy
theory.
I
doubt if anyone knows how many
morning after De¬
mobilization Day, theoretically 45
on
know, put
is carrying it to
v/ar
which
stocks bankrupted
took much stock in the
that
cold
orders
I
stopped
Gqvernment
you
as
production
mass
examine the liabilities—conditions
likely tp depress post¬
war employment: ,1. A wholesale cancellation of
war contracts in a bungling fash¬
paign, the stock market had a
sinking spell. People were afraid
of what will happen to the earn¬
will
in the armed services.
war,
a
automobile and aircraft industries
ployed.
Quite apart from the necessity change to peacetime operation."
of full employment and an ex¬ Mayor LaGuardia is afraid there
panding economy for our own will be a million unemployed
country, there is the effect on the swarming around New York City.
world at large. "If you fall into A writer in "Fortune" went so far
as to say that Repubicans might
a deep depression after the war,"
let Mr. Roosevelt win next elec¬
a noted Englishman told me, "you
will drag the whole world down tion without much of a fight, so
with you." I think you will agree that he, and not GOP, would have
with me that he is right—so great the onus of coming terrible de¬
is our economic leverage.
pression upon his shoulders!
ends there
last
dreamed of.
and
.
war
13,000 and is still going down.
The
,
ployed
generation every nation on earth
been
getting farther
away
requiring fewer workers portunities for investment fail to
per unit of output. The cost of a .keep pace with our national sav¬
medium bomber, for instance, has ings..: It is unworkable if pricey
been cut from 70,000 man-hours, are taken'out of the free market
to
£
has
from
ciency,
any'useful work for hands and ings when peace came. "Peace ion, as you know better than I do,
brains, they are quite likely to scares" was the Wall Street term. will create unemployment.
Mr.
start pulling down the social order The Governor of Michigan is re¬ Baruch
has
laid
down
certain
in which they live.
Hitler came ported as saying: "Michigan will principles which seem to be ad¬
to power when one man out of be confronted with the worst un¬
mirable for handling that situa¬
three
in' Germany
was
unem¬
employment in its history when tion.
the
.
7. A very
of
When
depression.
•
>,
important liability is
the increase in mechanical effi¬
nor
'
million
12
smoothly
The fourth method—a
.
training that will keep, young about allowing nature to take her
will be unem¬ men
f
from entering the labor mar¬ course. ''
few months after de¬ ket until later.
We must plan now. We mustn't
mobilization day, if no adequate
let
people become afraid.
So much for the assets.
'
plans are laid. The stock market, 1
It is a task of timing. If our
Now, let us look over on the
of course, is an eloquent index of
other side of the balance sheet and
timing is wrong, then we can get
that
employment. We know she is go.ing to have it after this war. ::;-f
itself.
Activity duripg the; 1920's. running competitive system—was
In 1927, we find a little dip. Why? .approached by some countries for
Ford changed over from Model-T certain periods during the niner
teenth century, but for the* last
to Model-A, and he created a mi¬
be
will
There
being completely socialized in
the 193U's, and she did have full
look at the chart of Busi¬
a
Russia was close
tal rationing, but
to
■
private business was almost com¬
pletely unhampered from 1930 to
1933. So it is dangerous to believe
day?
is
knowledge has operated under to¬
retooling
the
ness
after the war,;
dollars
is
there
extent in prac¬
No national economy to my
9. Finally there is the psycho¬
synthetics, light metal products
and the like, to stimulate markets., logical factor — the fear which point or other in their flow from
natural resource to ultimate con¬
5. There will be the demand
may seize war-boom towns like
Detroit, Seattle, Bridgeport. I live sumer.
from abroad for food and sup¬
fV
As for rationed and socialized
plies^ That; vsdllh^p employment^ only 20 miles from Bridgeport,
and
the
other t|ay
Remington economies, such proposals are
though it may. only be an emerg¬
highly unpopular with the Amer¬
ency demand of limited duration.. Arms found they had piled up
6. The return of many women enough small arms to last for ten ican people. They might give us
to their homes will take pressure years, and five thousand people groceries, but we would lose our
went out on the street.
Some of Bill of Rights.
off the labor market.
They have been
7. The reduction of hours from them I know. They were scared. rejected
by large majorities in
You see, if people believe there poll after poll.
50 a week to 40 will help em¬
Even larger ma¬
is a plan which they can trust; if
jorities, however, have, demanded
ployment.
full employment after the war. If
8. Insofar as the armed forces industry, government and labor
full employment is long denied,
exert a political demand, for jobs together work out a plan for full
as
they will be likely to 'do. employment, people would not their opposition to more radical
through their organizations, that, mind a period of temporary un¬ proposals may presently weaken.
will put the heat on Congress and employment.
They will spend People in mass, I have observed,
their savings.
But if people are are less interested in economic
help employment.
9. If the policing of vanquished afraid, the fear of depression can theory than in results. They pre¬
fer bread and work, whatever the
nations
is
necessary,
that will bring a depression.
Where the balance will lie, no¬ theory, to no bread and no jobs on
keep men in the army and in the
war industries and help employ¬
body can know exactly, but these most exalted ideological grounds.
ment. Also if we have a
Acompensatory economy,
p(^t-war lists of pluses and minuses do not
program
of
universal military warrant any too much optimism method No. 3, offers a compromise
Pearl
tion
of their de¬
Bonds.
*
in
Take
present estimate for cash and War
cooperatives, the churches,
clubs, foundations, the colleges.
For the twelve years from the
crash
Then
■
tories for the retooling job
more
generally.
savings in the hands,
D Day. Somewhere
of people on
around 60 billion
the
market
Some
little
,
3. The vast
non-profit groups, including many
in, the ranks of the self-employed,
stock
a
and for deferred public works
the
in
have
demand for housing
There have al¬
people.
6.
,,
Private'business men, as a mat¬
of fact, have never employed
1944, we are going
produce almost as much in the
way of civilian goods as we did
in 1939. We won't consume quite
In this year,
to
period in various industries, when
no goods are made for people to
buy, and only a few skilled ma¬
chinists are needed in the fac¬
get one of these beautiful
"tear-drop" jobs I $m going to
make my present car do. Perhaps
a great many other Americans are
going to feel like that.
/
.
2. There will be a widespread
ter
all of our
supposing the war
lasts five years.
Would you then
buy five cars? There is another
thing that our friends in Detroit
year;
cannot
use
somewhere between 35 and 50%.
tice.
that dream car, you will have to
make your 1942 Model do." If I
unemployed. If you
the term "high" em¬
ployment, that is all right, too.
...
and mine.
signers, in ;Time, Fortune, and
other magazines, gave us pictures
of a beautiful post-war car, engine
in the rear, plastic top, sixty miles
to a gallon, $300. Boy! And then
they said, "No, you can't have
frictionally
want to
applied to some
Supposing you were
in the habit of buying a new car
careful about.
million in the ranks of the
3
or
them, and many are your friends
cumulative.
should
nourishing food, a decent house,
adequate clothing, competent 60 million. I think Mr. Paul Hoffmedical care, and education, at' man's estimate of 57 million is apleast through high school.
proximately correct. Many in the
Have we the manpower, the armed services will go back to
know-how,
and
the
industrial school. Many women will go back
plant to provide the Big Five for to their homes—but some will be
every American?
We have, in¬ damned if they do! Full employ¬
deed. We had enough before the ment furthermore does not mean
war.
After the war we are going everybody on the job on Monday
to have more than enough. Think morning. There will always be 2
of
however that demand will not be
every
(Continued from page 2138)
I
Thursday, May 25, 1944
THE COMMERCIAL & FINANCIAL CHRONICLE
2158
goes
on
war.*
to outline
compensatory economy.
Advocates
define
it
of
such;
these
by
an
economy
three
basic
principles:
First, encourage business men
to carry the maximum possible
load
production and distribution
long as output is sound, in de¬
mand, and able to pay its way.
so
The
free
should
market
be
ex¬
panded to practicable limit, using
incentive
taxation
and
other
en¬
We have tended to
couragements.
the reverse policy—discour¬
agement, in recent years. We havfe
use
it
made
difficult
more
for
the
business man to take a chance in
the hope of a profitable venture.
We have thrown obstacles in his
As Geoffry Crowther, Edi¬
way.
tor
of
the
"The
London
Economist,
business
man's risks
have been increased by the great
load of prior charges put upon
him in the way of rigid wage
says:
rates
and
centive
the
to
like, while his in¬
take
these
risks
has
been dulled by all manner of in¬
spectors, controls, regulations, in*quisitions, prohibitions and indict¬
ments."
The approach has been
negative when it hasn't been pu¬
nitive.
The compensatory econ¬
idea is to make the approach
positive,
encourage
production
and encourage employment.
/:
omy
The second
principle is that the
Federal Government, in coopera¬
tion with local governments and
local
groups,
undertakes
to
fill
ft
Volume
Number 4284
159'
any ;, serious
left
THE COMMERCIAL & FINANCIAL CHRONICLE
gaps in: employment
by ordinary business
Hence, the term ''com¬
T/■ We might call it a
,
vacant
activity.
pensatory
,
permanent public works
in
necessity
gram
ernment stands
economic
search
economy
in
group
Say a re¬
universities
the
counted the
unemployed, and gave
monthly
figure
on
the
10th of the month. Say the dan¬
ger mark was established at 3.5
a
million.
2.7;
Say on May 10, it was
June 10, 3.1; on July 10,
on
3.6.
.
Pull the lever and let in
.
.
public works! It would be
operated in a goldfish bowl.
z
your
'
Public works, I believe, should
be
locally administered as far as
possible. Housing, slum clearance,
parks, schools, urban redevelopments, the integration of trans¬
portation, conservation, come un¬
der this head. No more raking of
leaves;
standard wages, make
the worker, especially the return¬
ing soldier, feel important,
f; The third plank in our program
is
pay
that
the
insures
Government
Federal
minimum
standards
of
health and decency by the exten¬
sion of social security to every
citizen.
The
Beveridge Plan in
Britain, and the Wagner bill here,
indicate how this can be done. It
.men
power
on
which business
Ever since prosperity
•
fused
the
materialize
to
coyly
round
from
1930, the era has
been a pretty bad one for eco¬
nomic prophecies.
Do you re¬
member how we were supposed
to be in
a
in 1935?
Do you remember
debt
to
of
Forty
death
$40
lead
grip of inflation
how a
billion
to
us
going
was
pauper's
billions
—
grave?
chicken
feed!
Tonight
it is $185 billions.
Do
remember the master minds
you
who
that
said
afford
to
incentive
In
Do
you
re¬
it
was
'
Despite this sad record, I am
'going to venture a prediction. I
predict, as Mr. Drew Pearson is
wont to say, I predict that in the
'next year or two everybody will
be talking about incentive taxa¬
tion, as loudly as they talked
about the Ruml Plan last Spring.
Incentive taxation,
broadly speak¬
ing, as you Controllers already
know, is a generalized name for
any tax system which promotes
investment in job-making enter¬
prises; which encourages venture
-capital. Narrowly speaking, it is
;a specific tax plan invented by
.my neighbor Mr. C. William Haze-
;
Greenwich,
taxation
ifirst
he
will
point
-economy
Connecticut.
to have
and
•term,
in
originated the
believes incentive
help achieve the
our compensatory
program
mentioned
as
namely, that business men
.carry the maximum possible load
:of production and distribution.
: before,
'
It
is
method
a
whereby
the
•state, through its power of taxa¬
tion/ fold idle savings into the
kind •' of investment which puts
.
.men
to work.
i agree
it
is
that
idle
ione
Most students now
that idle dollars breed idle
A rough way to remember
;men.
one
idle
dollar
man-hour.
Hazelett's. plan,
means
Under
unless
you
Mr.
keep
dollars moving at a certain
rate per year, you will have the
your
.daylights taxed out of you. But if
do keep them moving, you
don't pay any tax at all. That goes
.for corporations as well as for in¬
.you
•
He would have it the
dividuals.
■
only tax on corporations.
there
is
for it.
In
a
good deal to
'
the
:■
I think
be said
':/'Y,
compensatory economy,
■
it, the state is re:t
sponsible for full employment and
: social
security, guided and
; checked by the measuring-rod of
a
regular count , of the unemi
ployed. It relies heavily on taxa¬
tion to keep the dollar circuit in
'active motion. Public works proas
I
But
incentive,
picture
grams—with accent on local in¬
itiative and administration — are
on file, ready for emergencies, as
they are now in New York City.
The community is also committed
In
prac¬
have
when
the
serv¬
in the depression,
as
first
the
ject
to
that
as
competitive
already
was
bonds
The
fornia Toll
struggle neither side can
can just make the econ¬
impotent. The- right course
satory
the
and
This is what
Bridge Authority and
the San Francisco-
service
a compen¬
There is
no
road back to
using
the profit
incentive for
everything. There is no possibility
of using the service incentive for
everything,- without going 100%
its
placement
of
the
middle-of-the-road
a
many
econ¬
where both
years,
and
service
the
are
argument anyway, is ver¬
academic.
Sweden has
and
for
profit incentives
deliberately encouraged. Mar¬
quis Childs, of the St. Louis PostDispatch, has written a book en¬
titled, "Sweden, the Middle Way,"
which demonstrates that beyond
all
Walter
peradventure.
Nash
tell you, as he has told me for
hours at a time, how New Zealand
can
has cultivated both incentives.
large
originally
in
Treasury's
Drive,
and
time
were
Fifth
these
just
made
advance
War
syndicates
before
joint
a
bid
tender
for the bonds.
The
four large banking houses
the bonds through a
reoffered
of 232 associates.
group
indicated
was
both
the
bonds
And, it
market circles,
in
serials
the
and
term
moving out to invest¬
in remarkably good fashion.
ors
were
Competition Is Keen
There is
gainsaying the fact
that
competition is keen these
days especially when the issue up
no
for sale is of comfortable propor¬
tions such as that sold by the
West
Penn
Power
Co.
Tues¬
on
day.
Four groups were in the run¬
:
ning when the
bids for its
veloped
opened
company
$12,500,000 of first
mortgage 3%
bonds and it de¬
that
the
contract for pro¬
at
Brewster's
Long Island,
in
plants
Navy announcement said
terminating the Brewster
contract
there
"is
no
dissatisfac¬
tenders
were
agement of the company by Henry
Kaiser
with the
or
ment which has
"In
view
of
new
manage¬
just taken office.
the
fact
Barely half
is molding the post-war eco¬
the
a
for
that
the
He
would
tender
he did not elaborate
ment.
'Y
>
Both
plants
ing
William
to
was selected to bear the major
impact of this curtailment in the
Navy's aircraft program," the an¬
nouncement added.
The
contract with
Brewster called for production of
1,500 Corsairs, the Navy said, and
added it was estimated that by
July 1 approximately one-half of
original
the
original contract would be
completed.
The Navy estimated this cut¬
back in the fighter plane program
will make possible total savings
of $180,000,000.
Preston Lockwood, the
new
President
nautical
saying
ment's
the
of
Aero¬
Brewster
Corp., is credited with
that the Navy Depart¬
decision to terminate
underwriting syndicate head¬
by Stone & Webster and Blodget, Inc. offered publicly May 24
$23,000,000 of first and refunding
mortgage bonds series D 3% of
the Virginia Electric and Power
Co. at 103^4 and accrued interest.
The
part
planes being built at the
company's Long Island City, N. Y.,
and
Johnsville, Pa., plants was
"unjust to the company's 12,250
employees and nearly 3,000 stock¬
holders."
was
notified, said
Lockwood, that the contract
tric Corp.
If
do not develop some mod¬
we
concepts for handling the na¬
tional debt, for instance, it can get
us into a great deal of trouble. If
we
to handle it on strictly
lines, the resulting de¬
try
orthodox
pression might well lead to repu¬
Our economy is like a
diation./
Flying Fortress, it can't suddenly
stop without cracking pp. It must
maintain
a
national
$150 billions, or it will crack up.
we try to handle the debt on a
"live frugally" basis, then may
Lord have mercy on our souls.
the
It
will
na¬
tional
unmanageable if the
income
that
a
much
falls
$150 billions.
below
The British rule is
debt which is not
more
than
twice the national
income, is man¬
ageable.
We may well come out
of the war with a $300 billion
debt.
.
This
compensatory economy is
all very well, it may be objected,
but where is the political pressure
coming from to get what may be
a
conservative administration and
gun-shy Congress to sponsor any
such program? I think the politi¬
a
cal
pressure
is
coming from
directions;
From
services.
'
;v-./
the
the
From
must find
jobs.
who
Y ■/■-■•-/,::
falling head-long,
as
prices
they did in
1920.
From
organized business.
leaders of
our
ganizations have
that if
of
we
The
great business
do not
said
or¬
repeatedly
maintain
a
level
high employment after the war,
the
other
bids
Were
received
on
Monday for the Virginia Electric
& Power Co.'s $23,000,000 of first
mortgage 3%s, and here again the
bidding was rather close, suggest¬
ing that investment bankers are
really getting the feel of the auc¬
of
of $5 preferred stock are
being issued to present holders
of preferred
stocks in the two
companies.
' '
Net
the
proceeds from the
new
the
getting
'
a
of those
some
trifle
notes,
assumed by
It
is
top
bid
was
YYY YYYYYYvY
Subject to SEC approval tof
price and spread the winning syn¬
dicate fixed a price of 103.25 for
offering to the public with a good
inquiry indicated.
Here's one prospective offering
emanating from the railroad field
should go to competitive
bidding without necessity of hav¬
ing the Interstate Commerce Com¬
which
,
mission rule
on
the matter.
Alleghany Corp. has registered
with the Securities and Exchange
Commission for an issue of $30,-
102.2999
the strongest advocates of
competitive bidding for railroad
among
realize
that unemployment was
something
sent
like
the
weather,
but "something
manmade, something which could be
securities
not
open
controlled.
/
/
that what is
is
financially
all
the
manpower
tanks
and
we
We
have
materials
seems
to
be
an
Too Many
Cooks
In view of the trend of discus¬
war has taught
physically possible
possible.
this
and shut case.
,
forget thd
us
build
;
can
the
for.
sion in
some
quarters,
other
general
it
groups may
investment banking
that selling
be somewhat smaller
appears
in size as time wears along.
Several recent
incidents lead
the merged company.
to use these funds
planned
$26,000,000 of bonds
$10,500,000 of debentures and
to
pay
$2,012,296 to holders
of Virginia Public Service 7% and
preferred stocks who
holdings into the
ponvert
new
pre¬
Giving effect to the financing,
the capitalization of the new con¬
solidated company will consist of
$37,500,000 of 3%s; $3,000,000 of
3'%s and $23,000,000 of 3s, all first
and
refunding mortgage bonds;
$9,000,000 in new notes; $6,020,000
in old bank
There Should Be No Question
spending started, unemployment
presently vanished.
He began to
and
redeem
6%
discon¬
000,000 of 3!4% secured converti¬
ble notes, due in 1954.
Proceeds, together with other
our free enterprise system will be
funds will be applied to redemp¬
in great peril.
tion of some $40,700,000 of the
From the man on the street, who company's outstanding obligations.
Since backers of Alleghany are
has not failed to notice when war
The
of
funds, will be applied toward re¬
financing debt securities of Vir¬
101.7699, and judging from
comments of
certing.
sale
bonds, together with $9,000,-
000 to be derived from the sale of
and
lowest
tion game.
of
preferred
shares of
loans; 289,491 shares
stock and 2,938,445
common
stock.
Other members of the offering
Blyth & Co., Inc.; The
Corp.;
Goldman,
Co.; Harriman Ripley &
Co., Inc.; Kidder, Peabody & Co.;
Lazard Freres & Co.; Glore, Forgan & Co.; W. C. Langley & Co.;
Shields & Co.; White, Weld & Co.;
Harris, Hall & Co.; Lee Higginson
Corp.; Coffin & Burr, Inc.; Estabrook & Co.; Hayden, Stone & Co.;
Hornblower & Weeks; W. E. Hutton & Co.; Paine, Webber, Jackson
& Curtis; Tucker, Anthony & Co.;
The
Wisconsin
Co.;
Bosworth,
Chanute, Loughridge & Co.; H. M.
Byllesby & Co.; Scott & Stringfellow; Whiting, Weeks & Stubbs,
Inc.; R. S. Dickson & Co.; Riter &
Co.; C. F. Cassell & Co.; Daven¬
port & Co.; Folger, Nolan & Co.,
Inc.;
Mason-Hagan,
Inc.;
and
Scott, Homer & Mason, Inc.
group are:
First
Boston
Sachs &
Interesting Growth Stock
Panhandle Eastern Pipe Line
secondary, as you all
Company
offers
an
interesting
to
set
up widest possible groups
know, Many soldiers and many
growth stock according to a de¬
does not always pay off.
civilians are now asking why we
tailed circular on the situation is¬
cannot keep
For example two prospects
prosperous
making
sued by Arnhold and S. Bleichhouses for people to live in as dropped out of one syndicate early
roeder, Inc., 30 Broad Street, New"
well as by making tanks for peo¬ this
week, rather than agree with York City. Copies of this compre¬
ple to die in. The honest answer the price views of the managers,
hensive discussion may be had
is that we can.
Disaster is not the thus making- a bit of readjust¬
on
request from Arnhold and S.
only way to maintain full employ¬ ment necessary at the last mo¬
ment.
ment.
Bleichroeder, Inc.
Money
From organized labor. : ;
From farmers faced with
and
Virginia Electric Power 3s
Three
Never
armed
workers
war
new
the
V'YYY'''/Y Y
/ /',
.
103.629
With
the
succesful
syndicate
pricing the issue at 104V2 for-reoffering subject to approval of
price and spread by the SEC, it
was reported inquiry indicated a
quick disposition of the bonds.
;>YY
in
men
six
of
103.42.
of
income
If
be
one
is
system, is being merged
their
ern
bonds
shares
also
the
is
the
into Virginia Electric and Power
Co.
Also under the plan, 289,491
three
mal
of
a
ginia Public Service which will be
The company was
while
issuance
of
j
plan under, which the
Virginia Public Service Co. a unit
in the Associated Gas and Elec¬
con¬
tracts for
Mr.
An
ed
ferred stock.
two other bids
a
it
ing through to the fourth deci¬
were
Kurtz,
either of the two other companies
in this particular production field,
the bids this business of carry¬
in between
Fulton
smallest
producer of Corsairs, has no addi¬
tional Navy contract, or prospects
of any, and further because of its
higher
production
costs
than
the
sandwiched
■
be readily con¬
Brewster company is the
while the lowest of the four bids
And
A
director.
behavior, new ways of looking at
men, materials, money and debt.
103.1599.
can
that state¬
on
;/V,
the
who have the job of setting up
was
this
substantial
verted to shell production, accord¬
103.6499
The win¬
paid
make
termi-
while
The company has en¬
couraging prospects for new busi¬
ness, Mr. Lockwood declared, but
which took the bonds.
syndicate
be
that
business."
nomic system;' All of us are being
conditioned in new habits, new
ning
would
added
layoffs at both plants inevitable,
"the company is not going out of
to
point separated
lowest bid from the
planes
nated.
action
man¬
surprisingly close.
Day by day, hour by hour, the
war
of
well
consolidated
totalitarian.
This
occa¬
merger
groups
Loan
They
may quote Abraham Lincoln —
"You can't have society half slave
and half free." If this is true, the
outlook for democracy is black
bal
another
Bridge
but, presumably because of
its size and the desire to assure
Some people may object.
indeed.
Toll
sue
tries to do.
economy
and
scheduled to compete for the is¬
is to take the brakes off both the
incentive
em¬
bonds of the Cali¬
Bay
Two
The Brewster
that
banking syndicates.
We
Vought division of United Aircraft
Corp.
tion" with either the recent
underwriting,
$56,000,000 of term
revenue
Oakland
produced by Brewster with reduction in the production of Goodyear
Corp. /and the Chance^
—
Aircraft
The
the
way
major
serial
according to Associated Press dispatches
plane production,
N. Y., and Johnsville, Pa.,
effective July 1.
when
bracing
May 22, announced termination of its contract with
Corp. as part of an overall cutback in
Aeronautical
Brewster
nated
so
of public offering.
In this
omy
done
on
duction of Corsairs will be termi¬
reached market by
sioned
win.
bidding
Navy,
from Washington, D. C. The Navy said this reduction "in the imme¬
diate future" will be applied chiefly to the Corsair planes now being
good part of the work
a
corruption and dictatorship to red
.«
three
all
is usual in such circum¬
stances
issued against
ruin!"
place
of the larger offerings were sub¬
been
Govern¬
business
every step is taken to the accom¬
paniment of charges ranging from
used
when
claims
have
we
democracies
centive.
omy
•He
war
inceh^
service
ment has tried to follow the
ice
The
fighter
reaching market
this week, including the biggest
municipal refunding in several
years, served to keep underwriters
and
their
dealer
organizations
busy for a change.
deadlocked for a generation," says
Geoffry Crowther. "The business
man has been constantly checked
in trying to follow the profit in¬
almost
of
the
New
centive. '
universally agreed that we could
not spend our way out of a de¬
gression? Well, $200 billions for
rwar certainly took us out.
.lett,
and
the
"The
With levy To
JesEy t, Next
Terminate
*
>
the
REPORT
tically nothing but the service in¬
couldn't
Germany
re-arm?
member
am
incentive.
re¬
in
corner
I
going to emphasize
important thing I have
to say tonight.
A compensatory
economy allows for both the profit
tive.
S
starts
the most
profit
count.
can
the pivot of the
see-saw.
When
the
down, the Gov¬
ernment throws its weight up, and
when the economy starts up in a
runaway
inflation, the Govern¬
ment throws its weight down.
Now
Brewster's Fighter Contract
OUR
on
;
also gives us a steady pull of pur¬
chasing
pro¬
their own right and
heretofore. The Gov¬
-
as
"thermostat" economy.
us.
.
to
2159
v
is
to the conclusion th&t the effort
"
w»' r-fn^s1
can
A National
Policy To Attract
Private Investment In Railroads
(Continued
It seems to be the common
2141)
from page
belief,
railroad men, and
•even investors, that if we can re¬
duce fixed charges everything on
the railroads will be all right.
This view has been encouraged
shared by many
constructed
has
ment
account
the
on
an
income
assumption
that
after the war gross revenues may
those
to
return
1941, namely
material
and
costs
of
With present wage
$106,845,000.
prices,
they
by the politicians. The drastic re¬
figure that expenses will be $11,-
required
679,000 higher than they were in
1941.
This is nearly twice the
ductions
fixed
in
debt
by the Interstate Commerce Com¬
•'! r
mJ,'
i*'v
l-
Thursday, May 25, 1944
.
colossal nerve
on
my
part to go
counter to such a preponderance
•of opinion. However, I propose to
join iqy friend, Mr. Fairman Dick,
who has so ably asserted the con¬
trary view. That debt and fixed
charges are the fundamental trou¬
ble with the railroads, I believe,
*":is just as false as the economic
theory that low production will
provide more for all of us to di¬
vide. To deal with debt and fixed
increased
be
the
without
absorbed
of
tion
other
steadily declining por¬
gross revenues.
If
a
the
factors
had
remained
the
railroad credit would now
be at a higher level than ever
before instead of being only re¬
cently at its lowest point in his¬
same,
tory.
We must look elsewhere for the
real
must
of
trouble, and national policy
focus on some other angle
railroad financial picture
the
charges only is to deal more with
if capital
the result than with the cause.
to that
which
had
been earned in
every
Since this mort¬
so
that
severe,
rnew
is to be attracted again
industry.
':
est burden
was
mean that never mind the
growth in the railroads' gross
business, in spite of continued in¬
creases in efficiency, and regard¬
figures
What To
should be very happy with our
showing.
But the tax authorities
stepped in and increased
their take
over
$13,000,000, an
amount equal to all the savings
which the management had con¬
trived to make in 13 years. Sure¬
ly, the size of the debt, either be¬
fore or after reorganization, had
nothing to do with this.
then
Turning now to the future, and
again using the Erie, the manage-
been
worst
but
necessary;
all, it has meant retaining in
operation old, inefficient motive
power
and • cars r which * would :
otherwise have* been replaced by <
of
new, modern tools. If any of our
large industries had followed such
a
policy, they- would have been
forced out of business long ago. ;
It is extremely
important, in my
-
■
#
ments in their severe
competition
They must share
with the Commission a large part
with each other.
they
competition
costs have risen and that
not
as
effective
are
as
known, particularly by the work¬
ers
themselves.
The
:
.
the
moment
daily
wage
is
rate
raised, it becomes profit¬
able to make expenditures aimed
at cost reduction, which expendi¬
tures could not be justified prior
to the wage increase.
This con¬
tinued process brought about a
decrease in railroad employment
from
2,000,000 men in 1920 to 1,100,000 in- 1941 when the tonmiles
carried
were
very
much
Over those years, 900,000
men lost their jobs. We hear much
today of full employment after
the war.
Is it in the interest of
larger.
the
nation, or of the workers
themselves, that this process be
continued indefinitely?
The serious aspect
of this situa¬
tion, from the point of view of the
investor, and from the point of
view of the shipper as well, is that
under
the
prevailing
seniority
rules it is the younger men who
have
had
to
The
work.
turn
elsewhere
railroad
industry
for
is
bo
Since
the
supplies
shall
cost
cannot
limit
my
of
be
materials
and
controlled,
I
discussion to the
Rates
There
mind
is
that
no
in
my
rein¬
However, I
wish most strongly to point out
that the earnings were there be¬
fore the cost and price reductions
could be made.
It
seems
j
to
me
the
that
same
policy, if adopted, will hold true
for the transportation division of
the
national
and
economy,
there lies the surest way
that
perma¬
nently to lower rates and obtain
transportation effi¬
the utmost in
to
earn
money.
will,
surely
costs
their
rates.
come
Allow
down, so also
them to keep
fruits
the
of
some
As
improvements.
for
earnings
will
allow the carriers
Let them, as they
use a part of their
First,
ciency.
theirs in¬
Others
of
efficiency.
vestments 'and
do, why not the railroads?
After
all, if you would attract capita!
to the railroads, you must give
it in that industry the same break
it would get
on a
elsewhere.
could
too,
Rates,
well be put
business basis. In good times,
When
to-
an
one
enter
,
sees
the
railroad
business.
Surely, youth will not be attracted
to an industry that cannot earn
adequately, for in such an indus¬
try there is little future to be seen.
prices rise.
raise railroad rates.
policy than that of reducing rates
when it is easy to carry them, and
them when the econ¬
then raising
least bear them, and
usually too late to do the roads
much good.
Surely the method of
dealing with railroad freight rates
up to now has brought the result
"too little and too late."
omy
can
fact that
generally work and
plead for the restoration of free
enterprise,
they somehow just
cannot bring themselves to apply
the same principles to their own
transportation agencies.
It
is
unpleasant
an
while shippers
•
.
The
last
Taxes
in
element
the
rail¬
road cost
picture, and a most im¬
portant one, is taxes.
Long they
have been unfairly laid and-the
burden on the railroads has been
excessive. \A .former
sessor
told
once
me
county
that
as
as¬
the
should not stand in the way of a
gines
freight rate structure which will
bring adequate net railway oper¬
ating income.
cars,
way
question
railroad
result of the
the
loading, high-rate commodities.
Fear
of
competition,
then,
light-
Passenger fares is another matte'ivtTn this category of the rail¬
other four factors.
been
vestment of earnings.
people of the country swore off
their taxes, the assessments were
kept up by the mere transfer of
ical to repair freight cars over 18 the sworn off assessments to the
years old.
Nor, in the face of the local railroad. National policy as
development of Diesel road en¬ far as railroad taxes are concerned
by lowering the rates on the
net operating income
results largely from five factors—
rates, wages, materials and sup¬
plies,
depreciation,
and
taxes.
Railway
has
Then is the time to
The national
economy can stand it.
Railroads
could then, as others do, and as they
are
now
doing, put something
that more is not done to attract
away for the inevitable rainy day.
youth to the railroads.
In bad times, rates should decline.
National
policy
from
every The national
economy needs that
standpoint should encourage youth boost. This would be a far better
industry of old men.
the youth which
is making such a success of air
transport, one cannot but be sad
becoming
they were some time ago.
larger, and the inter¬
Waterway competition is seri¬
Depreciation
the shme, who can
less
of
the
billions
of
dollars
ous.
It is made possible by a na¬
One of the elements of cost is
say that this debt was responsible
poured into these properties, both tional policy which provides and
for the receivership?
the bookkeeping item of depre¬
from earnings and new capital,
maintains the right of way with¬
Let me repeat. This is only one
ciation, the laying aside of funds
they
have
been
able
to
save less
out cost to the user. In truth, the with which to restore
of
several
examples
of bonds
expended
and less of their income. No won¬
waterways are subsidized.
Na¬ capital. I have long believed that
which were good 50 years ago
der the industry has lost its stabil¬
tional policy should take this bur¬ these reserves set aside by the
and which are being drastically
ity and its credit.
den from the shoulders of the tax¬ railroads have been
inadequate.
pared today.
Finally, let us suppose that net payer and put it on those who In fact, I believe that many of
Figures taken from more recent
railway operating income should profit by it.
That would make the present railroad ills can be
years may throw more light on
become a red instead of a black waterway competition more fair, traced to this
shortsighted policy.
the subject. In 1929 and in 1942,
and less difficult to meet. Such a Until
figure.
Suppose
also
that
all
debt
recently they set aside de¬
the Erie Railroad had about the
were
completely
wiped
out.
Do
policy
would
be
sound
national
preciation reserves only for equip¬
same volume
of business.
Gross
you think that under such circum¬
policy.
ment, none for structures. And
revenues were larger in 1942 by
stances the investor would buy
those for equipment were ridicu¬
Airplane
competition
will
grow.
$4,000,000, in round figures, and
railroad stocks or the institutions
Surely
it
will
be
severe
in
its
ef¬
lously low. Equipment is being
expenses were less by nearly $13,lend them money?
fect on the first, class passenger depreciated on the basis of a life
€00,000. Here is a fine improve¬
I conclude,
It will be years, how¬ of 25 to 30 years,-although a mod¬
therefore, that a business.
ment,
totaling
$17,000,000,
an
national policy which will attract ever, I believe, before it can se¬ ern locomotive is far more effi¬
amount
larger
than
all
fixed
charges of the road before its re¬ capital must be directed toward riously cut into the freight busi¬ cient and economical than one
cent reorganization and equal to the restoration of net railway op¬ ness, particularly if air freight built only 15 years ago, and an
competition is dealt with as the engineering firm of high repute
nearly three times the present erating income.
trucks should have been, that is, has esitmated that it is uneconom¬
charges of the road. At this point
gage was no
than would otherwise
money
have
,
you are
until then.
is
judgment, not only that national
policy should provide for adequate "
tal
will
not
be
attracted
to
the
in¬
that
the
present war situation
net earnings but that such net in¬
proves the value of traffic vol¬ dustry, and our national policy come should be after providing
ume to
the roads.
True, volume will inevitably be one involving for depreciation and obsolescence
is helpful. But an even more im¬ government ownership.
<
on a realistic basis.
^
\
This whole subject of compe¬
portant lesson learned is that the
:
j Interest of the Shipper
heavy loading of cars reduces the tition requires analysis along an¬
cost per hundredweight. If, in or¬ other line, and this I will discuss
At this point, I can imagine
der to attract volume, we experi¬ shortly.
/
shippers saying, "All this is very
ment with lower rates, I would
;Wv;v^v^\^':»Wages well for the investor, but how can"
then expect to see all the rail¬
Wages constitute the largest I be expected to pay rates that
roads in the hands of the courts.
single item of railroad expense. will bring such a result?"
•
However, I do think we can ex¬ It may surprise you to know that
My answer 4s that it is about
periment with rates based upon the railroad wage bill in 1943 was
some
scale that will encourage approximately equal to the entire time that the shipper, in his own
heavy loading. Whatever we do, gross revenues of the carriers in interest, should look at the rail¬
roads as he does his own business
rates must be at a level which,
1938, and exceeded
the year's
either directly or through the en¬ total revenues of 1934 and 1935. and consider them not as parasites
but as an essential element in his
couragement of operating econo¬ The last two wage increases alone
mies, increases net railway oper¬ exceed all railroad fixed charges. business, that is, the agency which
takes his goods to market.
The
ating income.'.
•
^X
Inasmuch as efficient operation
The responsibility for rates lies requires that a high type of man extraordinary advances which this
has
made
industrially
primarily in the hands of the In¬ be *attracted to the railroads, I country
terstate Commerce Commission. It would be the last to advocate low have been due very largely to a
is an unfortunate fact, however, wages. On the other hand, there constant reduction of costs permit¬
that many of the rate reductions are some aspects of the wage sit¬ ting steady reductions in. prices,
and a widening of markets.
This
have been initiated by manage¬ uation
that
should
be
better
of the responsibility for the plight
going to ask The Real Cause of Lack of Credit in which they find themselves. Of
me to prove my case.
This I shall
What then is the true cause of course, as guardians of the public
endeavor to do, and I shall rely
the current bad credit of the rail¬ interest, it is not as easy political¬
in part on figures compiled by Mr.
ly for the Commission to protect
roads?
Dick for a portion of my proof.
the railroads against themselves
Going back again 50 years in
Fifty years ago there was an¬
in the matter of rate making as
railroad financial history, we find
other epidemic of railroad receiv¬
it is in debt reduction, but that
that in the 90's the railroads were
erships. At that time some of the
does not reduce their responsi¬
able to bring down into net in¬
roads had outstanding issues of
bility to do so.
come about 35 cents of the gross
first mortgage bonds, which bonds
This proposal for higher rates
dollar.
At
that
time, interest
are outstanding today.
All during
charges consumed over 30 cents. will undoubtedly be met with the
those receiverships interest was
Obviously, this was too much. argument that competitive condi¬
earned and paid on these bonds
Many of the bond issues then out¬ tions will not permit them. I do
and they commanded high prices
not believe that this is so.
in the market in spite of the fact standing had been issued to the
full cost of the properties. A re¬
Let us look at the competitive
that the properties were in the
sort to the wringer was absolute¬
situation for a moment. Pipe lines
bankruptcy courts. ly necessary. Perhaps it is because are so economical that the rail¬
Let us trace the record of the
that was true then that we have roads cannot in any case compete
General Mortgage 4s of the Chi¬
jumped to the conclusion that the with them. Instead, the railroads
cago, Rock Island & Pacific. They
same is true now.
But the trouble should encourage the pipe lines
were
outstanding in the 90's in
now lies in those elements before
to use railroad rights of way and
the amount of $1OO,QO0,OOO, and
fixed charges.
thus obtain at least some rent out,
the interest burden was $4,000,000.
Since the 90's, the percentage of the oil that is moving. Trucks
In 1894, the Rock Island had gross
of gross carried t© net railway op¬
have taken quite a slice of the
revenues of $21,000,000, and earned
railroad tonnage, but in a great
the interest on these bonds one erating income has steadily de¬
measure this was possible because
and a half times over. Since then, clined, and this decline has been
the
roads
have
permitted the
the
Rock
Island
has
increased particularly noticeable since the
Interstate Commerce Commission trucks
to
take
the
high rate
substantailly the size of its prop¬
was
given control over rates in "cream" commodities. If the rates
erty, its gross revenues have mul¬
1906. From 1900 to 1906, net av¬ on
these
"cream" items, which
tiplied several times, and it has
eraged 31% of gross.
In 1914, it constitute only a small percentage
been
operated with more and
was 22%.
In the so-called boom of railway ton-miles, were re¬
more
efficiency.
With what re¬
period from 1921 to 1929, net av¬ duced, truck competition would
sult?
In 1938, having gross rev¬
eraged under 17%. And' in 1932 be far less effective. And it is
enues of $77,000,000,
it failed to and
1938, it was under 10%. These common knowledge that trucking
earn
the
$4,000,000 of interest
Naturally,
automobile
ed
impairment of our na¬ rates will probably have to be
•:
tional economy. Freight rates in lower rather than higher. >
But
the
sum
total
of
both
this country are among the low¬
est in the world. They have been freight and passenger rates must
higher than they now are without be designed to provide adequate
disturbing the economy. Other in¬ net railway operating income. It
dustries can, and do, even under is my belief that rates should be
the OPA, increase the prices of based in some measure on costs
their products when their costs and that they should be designed
to bring into net an average over
rise. Why not the railroads?
I have been much disturbed at the years of not less than 20% of
Otherwise,, capi¬
hearing the theory put forward gross revenues.
slightest
,
reorganization plans, present fixed debt burden of the
road..
v
-'/•
coupled with that body's contin¬
The point I want to make in
ued pressure on other railroads to
> reduce
debt, have done much to using the last two examples from
the Erie is that these big swings
•solidify the belief. It is true, of
in the income account take place
course, that failure to meet fixed
before we deal with interest.
:
;
charges has been the immediate
The truth of the matter is that
precipitant of our epidemic of re¬
in the last 50 years railroad debt
ceiverships, but this failure is in
has been a steadily declining per¬
fact the result of other factors
centage of railroad property val¬
Which lie deeper.
Perhaps it is an evidence of ues, and interest charges have
mission in its
we
H"'i
THE COMMERCIAL & FINANCIAL CHRONICLE
2160
year
i/i
"
business,
bars is
so
very
heavy loading of
important, and the
freight rates competition of the privately
own¬
and light-weight freight should be, in all fairness, to ask
is there any allowance for them to bear their share of the
burden, but no more.
obsolescence.
The effect of
ciation
state
reserves
permitting
to be brought both for
earnings,
pressure
lower
inadequate depre¬
has been to over¬
thus
rates hnd for more
it has forced the
wages;
raising of more
There
are
two other factors in
help re¬
I need
to dwell on these briefly.
One is
the Interstate Commerce Commis¬
the situation
which
can
store investor confidence.
sion
policy
on
reorganization and
<
(Volume 159
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4284
the other is'the national
policy re¬
importance.
The shipper does not care how
Reorganizations
:
Over
the investor
involved in railroad re¬
has been
have
which
ceiverships
from
his goods
years
many
unwise
resulted
financial
foolish
or
The owners, or stock¬
holders, have paid the price for
their lack of wisdom. ■ But those
policies.
their
loaned
who
out
in
whole
the
different today. "
Although
merce
It is all
end.
; r
,
charges
are not the
problem, that
the
the
at
route
The
rates.
lowest
care
who hands
pay envelope so long as
is good. The government
definite interest in having
has
day
a
enough to pay taxes. And
the investor will always be wooed
all
earn
to
which
industry
an
makes
money.
convinced
am
national
that
should be directed to the
of transportation sys¬
policy
formation
tems
equipped to haul passengers
and freight by the most suitable
economical
available.
body is forcing reductions of fixed
and
charges, and totaL capitalizations,
which are going to leave many
bondholders with little or nothing,
and no chance whatever of ulti¬
I
would myself advocate
re¬
gional monopolies under proper
governmental >; regulation. Trans¬
portation is the only regulated
public utility enterprise in the
country which is not a monopoly.
Under such regulated monopolies
mate
This is a serious
confidence in railroad
recovery.
blow
to
generally. The Commis¬
apparently given no con¬
sideration whatever to the fact
that in its own hands lies the
securities
sion has
have
we
means
had constant reductions
in
electric
rates, coupled with
constantly improved service.
We
and, under the law, the have practically a national mo¬
increase rates :;and thus nopoly in telephone communica¬
'Save many of these values now tion, characterized by outstanding
being destroyed.
One is almost efficiency and service, steadily de¬
impelled to ask whether, having clining rates, and sufficient in¬
permitted the erosion of net in¬ come to attract the investor, not
come, the Commission might un¬ only to its bonds but to its stock.
consciously by saving its face by Finally, within recent months the
Congress has permitted the com¬
now stressing the need for reduc¬
tion of debt. Truly it is hard to bination of the only two telegraph
understand what is now happen¬ companies we had into one.
I am unable to see why the
ing to many investors unless it
be the confiscation of their prop- same principle should not be ap¬
-erties in the interest of the ship¬ plied to the transportation indus¬
per, labor, and the tax authorities. try with great advantage to the
A prompt about face, to the ex¬ national economy, shippers, labor,
tent that it is feasible, would be the government, and the investor.
sound national policy if the rail¬
power,
duty
to
roads
'
are
amounts of
large
the
attract,
to*
which they
new money
will surely need after the war.
The least the Commission can do
is to soft
•
sure
on
pedal its constant pres¬
railroads, includ¬
solvent
ing those just out of receivership,
to retire debt. Not that I' do not
favor the retirement of debt, be¬
cause I do. But constant Commis¬
sion
pressure
to those few roads
wisely
to
•
*
...!
:'jC-%fX'
Competition
Earlier
I
stated-that
tion
un¬
industry
it
took
Act
in
the
of
Interstate Comnierce Commission
would
competition. I do so again from
the point of view
Streets
New
York
'of
Directors
&
Stuart
Co.,
Inc.,
is offering to¬
(Thursday)
Both
dividend
payable
Record at
The stock
of
$12,500,000
quarterly
the
American
regu¬
of
$1,25 per share on
the Preferred Stock and a dividend of 50c per
share on the Common Stock of the Company
July
1,1944 to Stockholders of
of business June 15, 1944.
close
the
books
record
will
be
closed
for
the
Purpose
transfer
of until
stockJuly
at 1,the1944.
close of
usmess of
June
15. 1944
West Penn Power Co. first mort¬
ROBERT
bonds, series L, 3%, due
May 1, 1974.
The offering price
is
104 92,
plus accrued interest.
Net proceeds from the sale of the
B.
BROWN.
Treasurer.
gage
INTERNATIONAL
together
cents
(65c)
per
payable July 15,
at
$12,500,000 principal amount of
mortgage gold bonds, series
E, 5%, on Sept. 1, 1944, at 105%
interest
demption date.
:
the
to
;
■,
475 Fifth Avenue,
A
dividend
been
:
SALT
1944.
Slock
CENTS
this
Corporation
15, 1944, to stockholders of
1944.
Y.
share
a
llie Common
record May 31,
has
Checks will be mailed.
the
capital
stock of
this
payable
July
1,
1944,
to
stock¬
of record at the close of business on
15,
1944.
The stock transfer books'of
Company will not be closed.
on
of
(37%0)
cents
on
declared payable June
was
:
COMPANY
New York 17, N.
FIFTY
of
declared
19,
SANFORD B. WHITE.
INTERNATIONAL
re¬
/ '
'
v.:■
■
June
on
share
per
share on the common stock
1944, to all holders of record
the close of business
first
accrued
and one-half
The Directors of International Harvester Com¬
pany declared a quarterly dividend of sixty-five
,
and
A dividend of thirty-seven
HARVESTER
COMPANY
with additional
funds that may be required, will
be used for the
redemption of
bonds,
Company,
.
holders
addition to
In
Halsey Stuart &
June
the
Co., Inc., the offering group com¬
prises:
Bear,
Stearns
&
Co.;
Equitable Securities Corp; Otis &
Co. (Inc.); Hornblower & Weeks;
Stroud & Co., Inc.; .Graham Par¬
sons & Co.; Newton Abbe & Co.;
Arthur Perry & Co., Inc.; First of
Michigan Corp.; Gregory & Son,
Inc.; R. L. Day & Co.; Schwabacher & Co.; A. E. Master & Co.;
HERVEY
,
and
J.
a.
OSBORN, Secretary.
TREASURER
Philadelphia, Pa.
Johns-Manville
Ma/19,1944
Corporation
dividend
The Board of Directors declared
of 50c
able
share
per
June
"
holders
to
MAKERS OF PHILLIES
dividend
a
the Common Stock
on
1944,
9,
May 27, 1944.
^homas & Co.; Cohu & Torrey,
pay¬
record
of
.
ROGER
HACKNEY, Treasurer
Minsch, Monell & Co.
Capitalization of the company
as
of Dec. 31, 1943, after giving
effect to the
present financing,
consists of:
$27,000,000 of series I
31/2 % bonds; $17,000,000 of series J
3V4s; $3,500,000 of series K 3s; the
series L bonds; 297,077 shares of
4i/2% preferred stock, and 2,935,000 shares of common stock.
-:
for
1943
$29,855,344,
were
KANSAS
CITY
POWER
First Preferred Series
Dividend No.
stockholders
.June
v
record
of
at
receive
the
H.
C.
DAVIS, Assistant Secretary.
Power
is
Co.
en¬
tion
sale
and
electric
of
energy,
120
New York 5, N. Y.
Broadway,
<77:
May 19, 1944.
distribution
of
twenty-five
cents
(25c) a share and a special cash distribution
of twenty-five cents (25c) a share have today
been declared by
Kennecott Copper Corpora¬
tion, payable
on
of
share
holders
of
July 10, 1944; also $1.25 a share, as the secMMf
"interim" dividend for 1944, on the outstanding?
Stock,
payable
14,
June
stockholders of record at the close of
1944, l»*
business ©ft
\
W. F. RASKOB, Secretary
Vv
tne
record
at
June 30,
ciose
ot
to stockholders
1944
business
2,
June
on
BOAT
ELECTRIC
1944.
•
a.
S.
CHEROUNY, Secretary.
The
board
of
NORTHERN
'
of
Northern
States
(Wisconsin), at a meeting held
on
May 16, 1944, declared a dividend of one
and one-quarter per cent (1%%) per share on
the Preferred Stock of the Company, payable
by check June 1, 1944, to stockholders of record
as
of the close of business May 20,
1944, for
the quarter ending May 31, 1944.
N.
H.
★
York 5, N. Y.
33 Pine Street, New
STATES
(WISCONSIN)
directors
COMPANY
*
Power Company
authorized
8,775 square miles
rates that to serjve covers
yield adequate net railway in the general vicinity of Pitts¬
operating1 income under efficient burgh, with a population esti¬
and economical management. La¬ mated
at
more
than
1,100,000.
a
Preferred Stock, payable July
cash
and the territory it is
to initiate and approve
dividend of $1.12^
May 22, 1944.
77..'-
A
declared this day a
on the outstanding
25, 1944, to stock¬
record at the close of business m
The Board of Directors has
Common
outstanding, and
after the re¬
demption of the series E bonds,
Penn
business
KENNECOTT COPPER CORPORATION
COMPANY
gaged in the production, distribu¬
of
close
dividends.
OF
$1,977,500.
& Company
Wilmington, Delaware; May IS, 1944
.
persons
OFFICE
be
the
1944.
;
holding stock of the company are
requested to transfer on or before June 14, 1944,
such stock to the persons who are entitled to
14,
All
POWER
West
E. I. du Pont de Nemouns
70
City, Missouri
■
May 17, 1944
regular quarterly dividend of $1.50 per
share on the First Preferred, Series "B", Stock
of the Kansas City Power & Light Company
has
been
declared
payable July '1,
1944, to
The
all the first mortgage bonds to be
will
COMPANY
LIGHT
&
B
Kansas
.
Consolidated operating revenues
Transporta¬
1920, and again in
1940, and issue a mandate to the
:
like to discuss further the matter
of
are
financed^ but not applied
the
sition
i
I
which
generally.
The
Congress should reaffirm the po¬
leading many away from sound
thinking on the subject of raliroad
credit.";v r.''.;r?:'■■■;>
lar
group that
a
of
Board
DIVIDEND NOTICES
COMPANY
Manufacturing Company has declared the
and
:.rf Conclusions
gross income, before interest and
other income deductions, was $8,My conclusions are that a na¬
For 1942 the correspond¬
tional policy which will attract 798,561.
capital must first of all contem¬ ing figures were $28,648,406 and
$8,980,855,
and for 1941 they were
plate adequate net earnings. The
Total
bugaboo of fixed charges should $27,288,267 and $8,170,825.
be put in its proper place, directed annual interest requirements on
is
this subject
on
Halsey
West
Brooklyn,
Power Bonds
heads
and
Noble
The
his
him
MANUFACTURING
AMERICAN
Offers West Penn
the pay
NOTICES
DIVIDEND
Halsey Stuart & Go.
efficient
most
does hot
worker
I
Com¬
travel, except that they
over
move
.
the ( Interstate
root of the railroad
;
come
Commission itself has stated
fixed
that
the
money,
usually
have
bondholders,
waterways, where speed is of
ized
no
garding competition.
2161
de¬
per
special dividend of twenty-flv©
cents per share on the Capital Stock of th«
Company, payable June 10, 1944 to stock¬
holders
of record at the close of business
clared
a
and
share
May
Directors has this day
dividend of twenty-five cents
Board
The
27,
a
1944.
Checks
Co.,
of
16
will
be
Wall
Transfer
by
mailed
St.,
Bankers
15,
York
New
Trust
N.
Y„
Agent.
BUCKSTAFF, Treasurer,
G.
H.
SMITH,
Treasurer
1944.
May 18,
TEXAS GULF SULPHUR COMPANY
will
The
of Directors
Board
has
declared
a
dividend
of 50 cents per share and an addtional dividend
of
25
cents
per
share on the Company's capital
stock, payable June 15, 1944, to-stockholders of
of increasing net
bor should be asked to consider The
physical
property
of the record at the close of business June 1, 1944.
railway operating income.
This
V ' >
H. F. J. KNOBLOCH, Treasurer.
the effect on total employment of company includes -eight- electric
time I approach it not from in¬
steadily < increasing rates of pay. generating stations with an aggre¬ THE YALE & TOWNE MFG. CO.
creasing gross revenues, but from
On
May
23. 1944, a dividend No. 217 of
reducing expenses.
If the views Surely jit should abandon the old gate generating capacity of 481,475
rules which base pay on the as¬
cents (15c)
per share was declared
by
kw., as rated by the company, the fifteen
here expressed should be adopted,
the
Board of Directors out of past earnings,
sumption that trains now move larger part of which has been in¬ payable July 1, 1944, to stockholders of record
not only would capital be attract¬
at
the
close
of
business
June
9,
1944.
12V2 miles per hour, and stalled since 1920.
7::. ,V/'; ■:
ed to the industry, but the shipper only
F. DUNNING, Secretary.
would have lower rates and more give a full day's work for a full
day's
pay. Management should do
efficient service, " railroad labor
more to encourage youth to enter
more permanent and steady work,
Nat'l City Of Cleveland
and the government a more as¬ railroading for a career. Reserves
for depreciation and obsolescence
Situation Attractive
sured source of taxes.
t
.
The Euctric.Storage BAfTERt
;7;7?v:
Quarterly Dividend
The Directors have declared
The Business
Back
in
should
be realistic.
.
the
railways,
the
the
trucks,
buses, and airplanes.
Before such competition has run
waterways,
its
Then
we
Man's Bookshelf
Taxes should
the Interstate
be no more than are paid by other
Commerce Act was adopted in or¬
industries. Reorganizations should
der to stop the ^destructive and
be speeded—and they can be, I
wasteful
competition that was
know—and an attempt made to
then current.
It seems to me now
that unless we change our policy bring the bondholder out whole.
Finally, the theory of competition
we shall again have competition
should be modified in the light of
which will be just as wasteful and
our
successful
experience with
just as destructive. The competi¬
tion will be not between railroads, regulated public utilities, to pro¬
vide for regulated regional mo¬
one
with another—which is still
wasteful enough—but between the nopolies equipped to furnish any
and all kinds of transportation.
several transportation industries,
1887,
shall have the lowest
cost, most efficient transportation
system that can be devised.
Conciliation
International
National
land .offers
1944—Carnegie Endowment
405 West
—Otto
of
Nathan—National
Economic
Bureau
Research,
some
ness.
of
the
express,
and
of the L.C.L.-railroad busi¬
The
truck
has
place in short hauls.
its
definite
There is
no
competitor to the railroad in mass
A
stndv
of
Fashion
Park, Inc., is contained in a spe¬
cial circular prepared by Simons,
Linburn & Co., 25 Broad Street,
New York.
Copies of this interpptirm ctnfjy pnpv
transportation, except the subsid¬ firm
detailed
upon
request,
ha(i from the
circular
ben
Amalgamated
■:
Labour
Street,
Jackson
the close of business
77;":9^<:77
H- C. ALLAN,
.
Secretary and Treasurer
Philadelphia 12, May
/V
i<j44
SOUTHERN PACIFIC COMPANY
DIVIDEND
v
NO.
106
QUARTERLY DIVIDEND of Fifty Cents
($.50) and an EXTRA DIVIDEND of Twentyfive cents
($.25) per share on the Common
Stock of this. Company has been declared pay¬
at the Treasurer's Office, No. 165 Broad¬
New York 6, N. Y., on Wednesday, Jun»
1944,
to stockholders of record at thres
o'clock P.M., on Monday, May. 29, 1944.
The
stock transfer books will not be closed for the
able
way,
Company
attractive possibilities,
ac¬
cording to a detailed financial an¬
alysis of the situation prepared by
Edward L. Burton & Company.
160 South Main Street,, Salt Lake
21,
payment of
7
...
this
dividend.
J.
A.
SIMPSON, Treasurer.
New York, N. Y„ May 18,
City, Utah. Copies of this inter¬
esting study may be had from Ed¬
ward L. Burton & Company upon
request.
at
June 9, 1944.
A
7'VV;
Sugar
on
Checks will be mailed.
1944.
UNION CARBIDE
AND
'
CARBON
j
CORPORATION
Attractive Situation
"'
The
current
situations
in
033
Loft
Candy Corp., Majestic Radio and
Television, and Allen du Mont
A cash
(750)
dividend of Seventy-five cents
per
share
on
the
outstanding
Development
Laboratories offer attractive pos¬
capital stock of this Corporation haa
Staley—International
sibilities according to a memoran¬
been
dum issued by J. F.
to
Economic
—Eugene
*
Sugar Stock Attractive
offers
World
'
1819
Broadway, New York 23, N. Y.—
paper—500.
.
Stock, payable June
30, 1944, to stockholders of record
&
request.
the Common
on
of Cleve¬
interesting situa¬
tion,
from the
Accumulated Surplus of the Company.»
dividend of fifty cents ($.50) per share
Bank
according to a descriptive
prepared by Merrill, TurCo.,
Union
Commerce
117th Street, New York 27, N. Y.—
Building, Cleveland, Ohio, mem¬
single
copies,- 50;
subscription
bers of the Cleveland Stock Ex¬
price, 250 for one year.
change.
Copies of this interest¬
ing circular may be had from
Nazi War Finance and Banking Merrill,
Turben
&
Co.
upon
May,
for International Peace,
all transportation, in¬
Postwar
Employment
Oppor¬
dustries are likely to be in finan¬
tunities—National Industrial Con¬
Interesting Situation
cial
difficulties,
having' in the
meantime dissipated large sums
Board,
Inc., 247 Park
Common stock of Federal Water ference
of capital. We will have repeated & Gas offers an attractive situa¬
Avenue, New York City—paper.
the mistakes of 50 and .60. years tion, according to a memorandum
issued by Boenning & Co., 1606
ago.
Report
on
the
Work
of the
Each of these industries has a Walnut Street, Philadelphia, Pa.
special place in oiir transportation Copies of this interesting memo¬ League, 1942-43—League of Na¬
Publication
1943.1—Co.
system. The airplane will almost randum may be had from Boen¬ tions
surely carry the first class pas¬ ning & Co. upon request.
lumbia
University Press,
New
senger, to whom speed is either
York 27, N. Y.—paper—500.
desirable or important.
Airplanes
may well carry
all the mail, a
Fashion Park Attractive
part
an
—
course,
good
City
COMPANY
175th Consecutive
Office,
3480
Montreal,
Place,
D. C,)~board—
University
Canada
(734
Washington
16,
Reilly & Co.,
Ill Broadway, New
York City.
Copies of these interesting memo¬
randa may be had from the firm
upon
request.
declared, payable July 1, 1944,
stockholders of record at the closo
of business
June 2,
1944.
ROBERT W. WHITE,
Vice-President
THE COMMERCIAL &
2152
part of industry, the giving of
higher wages to make possible
and effective the demand for the
products of industry; on the part
of labor, the giving of its fullest
energies at all times so as to raise
productivity to the highest pos¬
(Continued from page 2140)
Orient and in India, and all of
built these goods will be
be carried in
up in years of sacrifice and strug¬ ships and planes again made and
gle, Closely related to this is the manned by American workers. I
feet
in
lowering
the
union
of
standards which have been
issue of discrimination in job op¬
have the conviction that the grow¬
portunity, with the profound so¬ ing development and importance
cial effects of such discrimination. of Alaska and future trade in the
Unemployment following the war
mean the ushering in of a
would
Orient will be a tremendous fac¬
tor
the
in
employment
post-war
period of discrimination and bit¬ situation in the Pacific Northwest.
ter group feelings between all the This war has awakened the West
component parts which then would Coast to the possibility of its in¬
compose
our
industrial society. dustrial development; it is not
Antagonisms and tensions would likely that the managerial ability
draw the line between returned and labor skill that have existed
servicemen and civilians, men
women,
work e r s
older
and
will be wasted in the
workers, native born and
born, skilled and un¬
skilled.
Principles of fair play,
fraternity and equal opportunity,
to
which
everyone,
and trade
unions above all, owe the deepest
younger
allegiance, will be at stake, with
the
the outcome depending upon
or
absence of complete
job opportunity, I don't believe it
is necessary to elaborate on that
riod.". '
area
post-war pe¬
7777.7777'7
777
.
I could go
that
to
and been
foreign
existence
attracted
and
enumerating the
possibilities and Openings
for
post-war employment indefinitely
—a
on
nation-wide need for adequate
housing,'for instance, in itself of¬
fers unlimited possibilities.
Un¬
fortunately, however, as has been
proved many times in the past,
the answer to unemployment is
not to visualize vistas opened by
further. Your very the inventiveness of our scientists
here indicates your pro¬ and engineers.* The real problem
found appreciation of the prob¬ is to make those employment op¬
lem of job opportunities, and your portunities, of which, as I have
.earnest desire to find a solution.
already said, we have no lack
aspect
any
presence
To many, a solution, or a partial
solution, is to be found in the de¬
velopment of new fields of en¬
deavor -i— the aircraft, television,
plastics, and other industries
brought to the fore during the
war.
I am not one of those who
put hope for the future in dreams
of a sky spangled with helicopters,
or highways covered with superconveyances, with resulting full
employment for all. To me the
problem is a great deal more fun¬
damental one, at least in terms of
the maintenance of long-range
full employment. I believe that
our resources,
existing plant fa¬
cilities, managerial abilities, and
skilled and unskilled labor
ener¬
even
without
fields,
available
matter and
ter
as
those
to
a
industrial
new
practical
a
as
permanent mat¬
of
millions
persons
who, with the end of war produc¬
tion and a cessation of hostilities,
will be in need of employment.
To
speak of job opportunities or
to worry about new fields of em¬
ployment in a country whose pro¬
ductive capacity is the greatest
the world has ever seen, and the
sible level.
.
'
'
two
have
The
classes.
relates
first
would make large segments of our
This
problem is particularly acute on
country into
the
im-
to
distress areas.
much -of
where
Coast
West
the ship and airplane building has
It is my con¬
enterprise to invest in
duce
viction that the social cost to the
dollar
as
a
reconversion
whole of obtaining
through government
subsidies would be much less than
the social loss
if plants were
al¬
lowed to remain
idle, the area to
mediate
post-war conversion become a distress one, and pres¬
problems. The second involves ent expenditures on plant, equip¬
proposals for the maintenance of ment, housing and schools to be
full employment after conversion completely lost.
Of course, the
has been achieved and the return¬ granting of necessary subsidies to
free
enterprise
to
convert plants
ing soldiers and discharged war
workers have been absorbed into such as Boeing and Douglas in
the productive system.
my area, for instance, will have to
To my mind, it is unthinkable be preceded by careful study and
that reconversion be
attempted planning under the government,
with any less active participation with the participation of all inter¬
ested, to determine what to con¬
on the part of government in re¬
conversion policies than has been vert into, consistent with the best
to create and maintain
necessary
war production; we will need
fight just as hard on the pro¬
duction front, and be willing to
undergo the same sacrifices, to
put free enterprise in full pro¬
duction for peacetime consump¬
tion as was necessary to supply
our
to
our
war
Industrial
demands.
conversion
for
calls
orderly,
rer
co¬
planned action under
federal
reconversion
agency on which management and
labor are fully represented. This
agency is to have the/same duty
of guiding and assisting the na¬
tion in the problems of reconver¬
ordinated,
single
a
sion
that
the
Production
War
Board, for instance, had in guid¬
ing and assisting the nation to
meet the demands of the war ef¬
This
fort.
public
reconversion
agency should be so
as to make
the best
constituted
use
of the
experiences and resources of all
war agencies
in assisting private
enterprise to take over its respon¬
sibility for production in a war
industry of our .post-war era; the
initiative to. create a prosperous
future lies with it. Industry must
have sufficient confidence in free
been concentrated.
country
'
specific proposals
for maintaining full employment.
The proposals fall into two
I
Thursday., May ;25«, 1944
FINANCIAL CHRONICLE
interests of the national economy.
As a further means of insuring
employment during the reconver¬
sion period, a program of needed
public works and services should
for
a
and pro¬
165 billion
minimum
free American
economy.
Paul G. Hoffman,
Chairman of the Committee for
Economic Development, said re¬
cently:
7.7'
7'"- ;,7'
"In the final analysis, the ques¬
peacetime
•
whether
of
tion
achieve
we
an
of abundance depends on
we
have courage and
faith in ourselves.
And faith in
economy
whether
ourselves must mean a large meas¬
faith
of
ure
in
one
another—a
justified by our works. With
such courage and faith we ean
faith
make ourselves strong to conquer
number
the
post-war economy
one—unemployment."
•
less than a realist,
I would be
however, if 1 expected that con¬
fidence and that enterprise to be
entirely forthcoming on its own,
without outside assistance and as-:
than the initia-.
to produce the,
necessary war materials was
whenever and wherever
unem¬
forthcoming without outside im¬
ployment conditions occur. Surely, petus. Without that assistance, it
a small portion of the billions we
is fairly certain that more busi-.
found it necessary to spend un- nessmen will
talk of enterprise, of
productively in terms of social taking risks, and of taking initia¬
benefit in the present world con¬
tive, than will practice them. Un-.
flict could be spent in making til
there is some assurance that
nee d e d internal improvements,
the bottom will not drop out of
such as better roads and schools,
the market, that industry will co¬
if, "thereby, employment to the re¬ operate
among itself and with la¬
be
planned
turned soldier could be assured at
least
surancej any more
tive and enterprise
available
made
and
temporarilv.
bor, and that investments will bq
with
prospects for con¬
secure
The
improvement of existing tinued success in busines ven-;
highways and the building of a tures, there will not be the in¬
vast network of additional high¬ vestment necessary to produce for
ways
affords an excellent field for
a
such
nomy.
some
public works.
There are
54,000 towns in this country
with
no
many
access
to
railroads
and
inade¬
If we
bring to inhabitants of these
of them with very
quate road transportation.
are
to
demands and needs of whose peo¬
minimum 165 billion dollar
eeo-
7
The reconversion effort must, to
a large
extent, supply the neces¬
sary stimulus before that effort
...
be
can
considered
completed.
If
this stimulus calls for government
subsidies
and
for
widespread
which makes for full and stable towns the abundance which our
ple are still far from filled, seems employment at fair wages. None economy can produce, it must be long-term loans to private indus¬
to me to be greatly anomalous. but a public agency could under¬
through a system of highways try,
then: subsidies
and '■;/ loans
In the short space of three years, take the termination of war con¬
which will permit our trucking should be forthcoming.
But the
unity of effort has increased the tracts,- the disposal of war inven¬ industry to extend its facilities to government cannot be
expected to
total productive facilities of this tories and surplus materials, and
regions heretofore inaccessible to provide the whole impetus if free
county by one-half, and the to¬ the reconversion of production it.
enterprise is to remain. »freq.
tal national
income has bee n .facilities.77"
77
77 77 77;/:.;.
The foregoing are proposals ap¬ American initiative, confident in
doubled.
A record such as this
Since, in my opinion, some and plicable to the immediate post¬ our free enterprise system, must
calls for a revision of all former perhaps a great amount of un¬
war reconversion period.
My pro¬ produce great capital investment.
estimates of what is possible and employment during the reconver¬
posals for the maintenance of full If under the assurances of gov-n
desirable.
It is now certain that sion period is inevitable, I believe
employment and a high national ernment support and the full co¬
bur productive capacity can pro¬ that the government should pro¬
income thereafter involve the operation of labor, full production
vide better homes, better food, vide
demobilization
allowances same elements of cooperation be¬ is
achieved, it devolves upon in¬
more adequate clothing and med¬
for returning soldie!rs, and interim tween
capital and labor that has dustry and upon the free enters
ical care, finer communities, and
replacement benefits, plus train¬ been found necessary to maintain prise system to maintain that pro¬
richer
educational and cultural ing
opportunities, for all in the a high national income in time of duction, with industry and labor,
opportunities for all.
Certainly, labor market. Such allowances,
7
war, together with somewhat the working together, to that end.
....
gies, plus
our
sufficient
are
unfilled demands,
in
themselves
and
without the need for the develop¬
ment of new industries to insure
adequate employment for all and
progressively higher standard of
assuming certain condi¬
a
living,
tions
are'
met,
^
.
Before
proceeding to a discus¬
sion of those conditions, I want to
explain
my position of what many
think should be the principal
subject of discussion under the
topic "Post-War Employment Op¬
may
.
is
there
lack
not
of
vistas
every
able-bodied
for industrial development or ex¬
fulfill
all
portunities"—-namely,
new
demand
for
such improvements, and certainly,
it would take the employment of
individual
such demands.
To
to
my
mind, nothing could, be m o r e
paradoxical than with the facili¬
of economic development by a ties available to produce an abun¬
brief reference, I do not mean to dance for all, and with a labor
sufficiently skilled
and
minimize the importance of this supply
aspect, or to imply that any op¬ sufficiently energetic to achieve
portunities for such development material welfare for all, there
should be any problem of em¬
should
be
neglected.
Develop¬
ment of new industrial fields is of ployment opportunities.
pansion.
By thus dismissing
the
effect of the opening of new fields
particular importance in
of transition such
as
a
go
through following the coming of
peace.
Coming from the Pacific
Coast, and particularly from the
Pacific Northwest where I believe
*we
have
one
of
the
This
period
will
we
new
great
has
war
conclusively
interrupted,
never were
to
resources
maintain
of
come
year
at
a
165
1939
mists tell
of this nation
gross
national in¬
billion
dollars
prices;
our
that such
us
a
per
econo¬
national
velopment, I should be the last
55,000,000 jobs at 40 hours per
week, at decent wage levels for
employees and reasonable profits
for employers. The working pop¬
the
can
development
fields
as
come
of
through
such
new
television, aircraft and
others.
Nor do I overlook
the fact that the inevitable role of
this nation in
many
building up a shat¬
play a very ■ im¬
portant part in solving the ques¬
tion of employment.
It will be
tered world will
the capital goods of this
country,
by the workers of this
made
country, which will be used, in
great part, to rebuild a broken
Europe and a torn Asia: and it
will be the food
farmers
which
produced by our
supply vast
will
millions of the world's homeless
and. destitute. It will be our con¬
sumer
kets
goods which will find
in
the
newly
mar¬
awakened
whose
those
existing
income
problem which
The key to total employment is
plainly incumbent upon the the maintenance in time of peace
government to initiate, and which of the same 165 billion dollar
will have the effect of occupying gross national income which has
thousands who might otherwise been proven possible in time of
be unemployed in the reconver¬ war. The maintenance of such a
sion period is the providing of national income will provide the
educational opportunities for re¬ assurance of an over-all 165 bil¬
turned
service
men—both
for lion dollar market.
Enterprising
Another interim program which
it is
shown that it is possible under the
frontiers for future industrial de¬
to
overlook the great contribution to
the solution of the
.employment
however, should be recognized as same element of cooperative plan¬
Two steps appear to me to be
purely provisional measures; the ning for purposes of coordination,
necessary to the maintaining of
demobilized can have economic but without such planning being
this necessary high national eco¬
security only as they are employed under the same degree of govern¬
nomy.
The first step is the es¬
in productive work.
mental direction and control. '77;
tablishment of a government fis¬
is
sufficient
to
maintain
schooling
and
for
has
been
those
who
able to start. The fact
man has become
American business, if freed from
inhibiting restraints, will provide
the jobs necessary to produce the
goods to fill the demands created
should be by such a market. The payment
of adequate wages and the assur¬
no bar to affording him a chance
for education; government educa¬ ance of' reasonable
profits will
tional allowances should be suf¬ make effective these demands.
that
a
service
married during the war
ficiently adequate to permit both
the schooling of the service man
and the maintenance of his family
But
come
these
will
conditions
of themselves.
What is
not
re¬
quired primarily is bold initial
impulse, and thereafter reason¬
the war will ap¬ / A special feature of the recon¬ able assurance
of Continuation,
proximate that 55,000,000.
Ac¬ version program withr whibh/Iam plus a regulator to' see1 that the
demand
for
cordingly, any s ol ut ix>'n of the particularly1 c o n c e r he dais the
goods and - services
and their production
employment problem must con¬ problem of reconversion'^
template maintenance of national plants designed solely tb^t^oduee so far .apart' as to' cause inflation
income at the 165 billion dollar war materials or
ether^rdducts or deflation. The initial piirchas-1
level. Is this possible in time of for which there will be^-post¬ irig power is now in the hands of
our consumers as a result'of sav¬
war need or demand; add* where
peace?
The attainment .of full employ¬ large populations have^been as¬ ings and the high national-income
ment, accompanied by Ihe preser¬ sembled in otherwise ^re-mb t e of the last few years. The poten¬
vation of the democratic and civil areas who are entirely dependent tial effective demand is there also
rights of all concerned, is a much on production at such plant for because of deferment of many
more difficult task in this coun¬
employment." The cost to private types of purchases under wartime
try than it would be in a totali¬ industry of reconverting s uch restrictions. All that is-lacking is
tarian system. It must be predi¬ plants and facilities into peace¬ the initiative and the courage to
cated on the principle. of volun¬ time production of a product for provide the jobs to produce the
tarism, of a mutual give and take, which there is .or may be a de¬ goods to fulfill this potential de¬
with the emphasis on the give mand would' in most instances be mand. 7
*
: - -!
ulation
during the period. of schooling.
/
after
•
rather
than
on
the
take-7-on
the
prohibitive. Yet to fail to convert
This is
the
great' challenge to
cal
policy that will insure
billion
can
ner.
dollar
gross
This
be done in the following man¬
We are able to make accu¬
rate
quarterly
tional
income
estimates
and
Whenever national
to
165
a
income.
fall
below the
government
of
na¬
expenditures.
income
insured
tends
figurej
make up the de¬
can
ficiency through expenditures on
public works or through subsidies
or
through other
designed!
means
to
stimulate, and not compete
with or deter, private enterprise.
On
the
other
to
seems
be
hand,
if
income,
outrunning possible
production, government could
take up the excess through appro¬
priate taxation. There is nothing'
frightening about such
a
program^
What it does is to provide an in¬
sured
market for American in-'
r y
at/ something near its
capacity to produce .aL full em■ploy ment;:leVels;V::;:
dust
The extent of government ac¬
tivity binder this fiscal policy will
be the measure j ef the deficiency
of the confidence of business in
-
the
of la -free enterprise
to provide vfull employ-,
ability
system
ment
on
the
one
shortcomings
on
in
hand, and
proper
the other hand.
its
planning
Such
a
fiscal
policy, is
entirety consistent with
lowering
or
the
complete
aboli¬
tion of corporate and other taxes
which curb the ability of
to. make jobs.
busines^
Nothing is
so
de-
Volume 159
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4284
signed to lower tax rates in gen¬
eral than
sustained high income
a
at full employment
/'
I
levels.
The ability of free enterprise to
national income sufficient to pro¬
Municipal News & Notes
vide
jobs for all, the utmost co¬
operation between capital and la¬
is
bor
a
first
Neither
essential.
A
-
nation-wide
banking
group
headed by Blyth & Co., Inc.; Mel¬
can do the job alone; each is en¬
lon
Securities
Corp.; Harriman
tirely dependent on the other.
ployment will measure the extent
If the cost to Industry of full Ripley & Co., Inc., arid Lehman
to which government intervenes
employment is loss of chance for Bros., and comprising 232 associ¬
pry interferes in the affair s of
ates, made formal public offering
either industry or labor.
Labor spectacular profits in specific in¬
yesterday of the new issue of
wants no more government direc¬ stances, surely the goal is worth
tion of its affairs than does indus¬ it, particularly when the mainte¬ $56,000,000 California Toll Bridge
nance of full employment condi¬ Authority, San Francisco-Oakland
try; thus labor and industry have
tions will insure a more steady Bay Toll Bridge revenue bonds.
a further joint interest
in main¬
flow and perhaps a greater sum Representing one of the largest
taining full production and full
total of profits. If the cost to la¬ refunding
operations
in
many
employment through cooperative
bor is a willingness to forego ex¬ years, the issue was awarded to
action. It is my hope that the ex¬
cessive wage demands and to un¬ the group on Monday on a bid
tent of government intervention
dergo other disabilities that were figuring a net interest cost to the
Into the affairs of- business and
authority of 1.96%. This was the
labor will be limited to the main¬ necessary during the war, I for
only offer submitted, although two
tenance of the free enterprise sys¬ one, and! know many like me,
would be willing to pledge labor's separate
groups
originally
in¬
tem.
If full production and full
full support if thereby the spectre tended to compete for the issue.
employment do obtain, it is my
most feared by labor—unemploy¬ In order to facilitate rapid dis¬
produce and provide for full em¬
r
i
7
!/■
.
belief
function
the
that
of
gov¬
ernment should be limited to the
prevention of monopolies as the
principal deterrent to free enterpr i s e .
Monopolies have ever
tended to restrict production, raise
3:
prices,
■
wealth,
concentrate
-
and
to.
The
-
people
have tasted of the horn of plenty,
know that an economy of abun¬
wisdom
The
this
of
action
dance is possible.
%
If it
worth
was
533,000 Consumers Public Power
refunding bonds is ex¬
pected to attract no less attention
by underwriters and dealers. Bids
on this undertaking will be opened
on May 31 and, according to pres¬
ent indications, at least two syn¬
dicates will participate in the bid¬
ding,
Purpose of financing is to
arrange for consolidation of the
outstanding debts of a number of
the district's operating divisions.
The Consumers District offer¬
ing is the largest of the several
issues of general
of
vance
cause of that
very pessimism, be¬
cause of
refusing even to try to
at
realize our potentialities.
If the
.coordination among
in
•the total production necessary for pessimists are right, it will be
total employment. A second step Solely because defeatism, selfish¬
ness
and intolerance have once
which-, to my mind, is a necessary
Even the
.concomitant of the maintenance again had their way.
0;
This does not
.should
not. be
that there
mean
bonds
•
of a high national income and full
'employment is the establishment
most pessimistic cannot doubt the
capacity of this nation to produce,
acknowledge the genius
of some central
coordinating
of our management and the skill
agency on a national'basis, comand energy of our workers. Prop¬
posed of ! representatives of pri¬
coordinated, these factors
vate industry, labor and the gov¬ erly
proved more than sufficient dur¬
ernment, for the purpose of giv¬
ing the last few years to give em¬
ing broad general direction to the
ployment to • all willing to work
production of goods and services.
of the
with
the re¬
demption on March 1, 1945, of
all of its then outstanding 4%
bonds, currently totaling $57,070,000, and to the pay interest
on the refundings from June
1,
1944 to March 1, next.
The ex¬
tremely favorable cost basis on
which
the
Authority
effected
issue,
together
other available funds, in
and must
the
refunding,
and
the
b
•This
coordination
/will
.
be
and; guidance
voluntary
by
obtained
agreement among industry, by co¬
operation from labor, and by sug-
gestions ,and adyice from the
ernment.. The purpose of this
.•
gov¬
cen-
and
of
to
at
sustain
least
165
a
national
billion
power
terests of all of the people of this
-
»ties,
of facili-
to formulate general plans,
apprise of conflicting plans.
/ and to
:/<:■
The
necessity for
'of labor
in
some
participation
such coordinat¬
takes
more
vision than has pre¬
viously been manifested, and more
willingness to give rather than to
take, still the alternatives of a
failure to achieve what
an
awak¬
ened
people know is possible
pleasant to contemplate.
are
ing-agency at the- national level; not
as
well
as: at
the
local
level,
The world is at the crossroads,
/through something akin to the and the free
enterprise system is
present labor-management com¬ about to face
its greatest test. The
mittees, canot be
overstressed. success of that
system, as the suc¬
"One of the great lessons of this
cess of other systems with which
;
war
has been the increase in pro¬
ductivity
worker, .which, to
was made possible by
per
•my
mind,
-'the
effort
•
4
labor
willing
was
expend when it was treated
partner rather than ,as a raw
as
to
a
ma-
•
terial.
•
«
?
•
the
It is indeed significant that
physical
has
increased
80%
of
industry
since
1939,
while the number of persons em-
ployed has risen only 18%. The
experience of such industrialists
f as
the Kaiser
pany
the
on
great
•
output
Shipbuilding Com¬
Coast, and a
other
outstanding
West
many
-business
organizations in America, of the results in increased
•production of an enlightened la-
it must compete, will be measured
in
terms
which
of
the
abundance
it
is able to supply those
dependent upon the sys¬
tem for their well-being.
I have
no doubt of the ability of our sys¬
tem to triumph over all others
under this test. This means, how¬
ever, that the abundance must be
provided to all in this country and
who
are
•
bor
policy
is
indicate
conclusively
possible when labor and
in a spirit of
cooperation father than hostility.
The
contribution
to
production
made through the War Production
/management meet
:
•
,
•
Board
Labor-Management
mittees
what
.
tain
afford
can
that
be
to
further
expected.
obtain
the
Com¬
proof
It is
cer-
goal of
of
a
the
bonds
new
The project is considered one
cepted, however, it must assume
all of its responsibilities to the
common man.
a
just
tural
shall
to
certain
advancement,
not
have
met
therefore
behooves
Kanawha
Stock
of
Public
the
National
Bank and Trust
Company of New
York offers interesting possibili¬
ties for investment, according to
a
memorandum issued by C. E.
Unterberg & Company, 61 Broad¬
way, New York City.
Copies of
this memorandum outlining the
situation may be had upon request
from C. E. Unterberg & Co.
Forms A. W. Porter & Co.
A. W. Porter & Co., a partner¬
ship,
has
with
formed,
been
New
offices at 52 William Street,
BOSTON,
City.
Mr. Porter was
President
Associates, Inc.
MASS.—Joseph
Porter
of
W.
McGaragle has become associated
with
30
Amott,
Baker
Street.
State
&
Co.,
In the
McGaragle conducted his
own
in¬
vestment business in Boston.
is
Goodwin
connected
with
In
Street.
the
past
with Elmer H. Bright &
was
distributed by Buckley
1529
Walnut
Street,
Philadelphia, Pa., members of the
New York and Philadelphia Stock
Exchanges. Copies of this memo¬
randum may be had upon request
from Buckley Brothers.
Brothers,
II.
William H. Coburn & Co., 68 Dev¬
onshire
offers
common
bilities, according to a memoran¬
MASS.—William
now
Light
&
Telephone
interesting possi¬
Western
dum being
(Special to The Financial Chronicle)
BOSTON,
Attractive Situation
Inc.,
past Mr.
he
Co.
(Special to The Financial Chronicle)
REDEMPTION NOTICE
BOSTON, MASS.—Edward A.
Gigelow has joined the staff of
Donald
B.
Litehard,
70
State
Street.
.:
V-!
(Special to The Financial Chronicle)
MASS.—Albert
BOSTON,
Day
is
with
Trust
Funds,
89 Broad Street.
OTHER
ALL
PARTIES:
C.
of Trustees, has
called for redemption its following bonds:
$50,000.00 2'/4 c/c
School Bonds dated
July
1939, and,
3%
School
15,
$92,000.00
(Special to The Financial Chronicle)
DETROIT, MICH.—Lawrence J
associated
become
that date, at AMERICAN
AUSTIN, TEXAS, they
to bear interest after such re¬
on
BANK,
will
demption date.
cease-
of May, 1944.
CORPUS CHRISTI
17th day
TRUST
/■
/<; i'. :
Christi,
'
Corpus
at
EXECUTED
this
NOT
ARE
EONDS
IF
redemption
scot
& Co. and Dominick & Dominick.
dated
JULY 15, 1944.
PRESENTED for
the date of redemption being
with Smith, Hague, & Co., Penob¬
Building.
Mr. Gareau was
previously with Watling, Lercher
Bonds
1*5
rWnhpr
has
Nueces County, Texas,
Board
of its
order
by
/
.
INDEPENDENT
CHEISTI
SCHOOL DISTRICT,
Inc.,
STATE
THE
AUSTIN, TEXAS, AND
INTERESTED
TEXAS,
OF
OF
TREASURER
THE
TO
CORPUS
•
(Special to The Financial Chronicle)
'
Texas,
~
BANK
AND
COMPANY
By C. D. JOHNS. Vice-President
Treasurer, Corpus Christi
Free
Independent School District.
ATTEST/
1'
W. P. PITTMAN,
'
■
/■•./
■
Cashier and Secretary
,
as
the
communities.
forward
give to every child in this
(Special to The Financial Chronicle)
country the right to education and
ST. LOUIS, MO.—Don E. Mor¬
to full opportunity to make his
rill, formerly with Barrett Herrick
fullest contribution to our social
&
Co., is now connected with
and
economic
world. Wherever
Slay ton and Company, Inc., Ill
communities
local
contend
that
prohibits these opportunities
of education and development to
cost
young America, we must find a
solution in the same degree as we
are
ready to contribute in time of
national
to
war
emergency
and
welfare.
we
need
have
no
fear
that
our
listen to other
theories of production or govern¬
ment.
We will have conclusively
people
will
North Fourth
Street.
(Special to The Financial Chronicle)
SPRINGFIELD, MASS.—Robert
P.
Clark
with
has
Percy
O.
become
Dorr
&
associated
Co.,
Inc.,
Third National Bank Building.
ever
.
■
,
•
.
<rilLU.de1■
OF
CITY
Notice
MONTREAL
Payment of Interest
of
Coupons
that
of Para¬
graph 11 of Article 4 of By-law
No. 1735 (By-law providing for the
financial
reorganization of the
City of Montreal) the City of
Notice
under
is
the
given
hereby
provisions
Montreal intends to and will pay
upon
presentation as they sever¬
ally become due the interest cou¬
pons
maturing
on
and
between
May 15th 1944 and October 15th
1944
inclusive
and annexed to
Assoc. Elec. Attractive
Recent
developments
are
com¬
bining to give a "quality" rating
to
Associated Electric Co,
deben¬
industry, in
ture 4V2S, due Jan. 1, 1953, and
fact it is incumbent upon it, to go
to
the
depressed areas of this demonstrated, as we have demon¬ debenture 5s, due Jan. 1, 1961,
country, there to make its invest¬ strated
up to now, the finest gov¬ according to a descriptive memo¬
ments, and there to raise living
ernment in terms of serving the randum on the situation prepared
standards, so that this nation will
G. A. Saxton & Co., Inc.,
indeed have equality for all, and interests of all of its people, comes by
so that no nation can point with
from "a free and voluntary
co¬ 70 Pine Street, New York City.
deprecation to what our system
operation of industry and labor. Copies of this interesting memo¬
has failed to provide.
This is our biggest post-war op¬ randum may be had from G. A.
In conclusion, I want to again
Saxton & Co. upon request.
■
■
r.ru u v rt'
emphasize that I am an advocate portunity.
'"rtmw bn >■;/
.
FINANCIAL NOTICE
It
must
geographical
our
system
the test.
It
Public National Attractive
formerly
MILWAUKEE,
WIS.—Stanley
free government A. Kemmeter has
joined the staff
by actual per¬
of Merrill Lynch, Pierce, Fenner
formance that it can produce a
& Beane, 710 North Water Street.
finer standard of living than any
other system of government has
(Special to The Financial Chronicle)
as yet devised.
It must search the
ST.
JOSEPH,
MO. — George
highways and byways of Amercia,
II. Gee is with Atlas Investment
and go into the backward as well
Company, 708 Francis Street.
in
RH 83 & 84
Telephone 8-9137
and N. A. Porter.
Personnel Items
(Special to The Financial Chronicle)
demonstrate
must
RICHMOND, VIRGINIA
Bell System Teletype:
NATIONAL
system of free enterprise.
If that system is to be fully ac¬
enterprise
for
CRAIGIE&CO.
On June 7 Houston,
and
Gareau
our
welfare of the
refundings
F. W.
Partners are A. W.
Porter, G. E. Porter, M. A. Seibert
the most successful revenue un¬
of
MUNICIPAL BONDS
York
of
dertakings in the country.
electric
County,
W. Va., will dispose of $3,000,000
airport bonds. //;'>':/;/'/./■
pre-;
bonds, testi¬
exceptionally
revenue
May 31.
on
that
If we accept the full re¬
sponsibility that evolves from free
areas.
Until all are provided with enterprise, and we do develop the
the standard of living and oppor¬ fairest standard of living for the
tunities for educational and cul¬ common people of this country,
not
•
•what
with
to
June
on
Texas, will place $2,040,000 va¬
rious
municipal
improvement
heavy
fine
record of operations achieved by
the bridge since its inception.
in time of peace, as well as in
time of war, we are willing to do
whatever serves the common in¬
•
extension
fied
If
country, it is entirely possible to
tral
coordination is to diminish
•make available as a practical mat¬
complete anarchy of production,
ter the jobs for which opportunity
i to
make,, available " information
was never lacking.
Granted that
which will permit intelligent and
it
non-wasteful
vailed for the
i
income
dollars.
demand
drive
which offers will be considered
■
investment
ad¬
the
of
000 Chattanooga, Tenn.,
will employ the proceeds
current
attempt
industry
some
opening
Others include the $6,040,-
12.
underwriters
-
the
of
Fifth War Loan
.
i -
market inter¬
est scheduled to develop in
immediately apparent in the large
volume
CAROLINA
District
was
placed by the
shortly
after
the
mainspring of our well-being,, By
the expenditure of many lives and initial offering.
monopoly I do not mean only the
In reoffering the issue to in¬
^acquisition by capital of control billions of dollars to smash and
vestors, the banking group priced
,of a particular industry;! include destroy a distant enemy, it is
the
$20,000,000 1%% sinking fund
also the acquisition of control of worth the spending of billions to
bonds of Sept. 1, 1962, at a price
competing branches or services in rehabilitate our fighting men and
to
yield
1.90%, and the balance
the same industry, such as acqui¬ the men on the war production
of
$36,000,000 serials, maturing
sition in the transportation indus¬ front, and put our economy on a
semi-annually
from Sept. 1, 1945
basis to supply them and their
try of trucking by railroads, or
to Sept. 1, 1959, were scaled at
families with jobs.
'
airplanes by trucking.
It is im¬
' 1
yields
ranging
from
0.60%
to
It may be thought by the
portant to the maintenance of our
pes¬
1.95%, according to interest rate
free enterprise system that neither simists that much of what I have
and matririty.
The serials include
the
transportation./ industry nor said is idealistic, can never be
$10,975,000 33/4s, due from Sept. 1,
.the several of its. branches nor fully achieved, and that we can¬
1945 to March 1, 1950, inclusive,
any one branch be brought under not expect economic and social
and $25,025,000 2s maturing from
.single financial and capital con¬ well-being in the post-war world.
Sept. 1, 1950 through Sept. 1, 1959.
trol.
The same is true of all in¬ That may be their view, but it can
All of the $56,000,000 bonds are
dustries. Government cannot play hardly be comforting to them to
optionally callable.
1
too strong a part in preventing know that failure to achieve the
The
Toll
Bridge Authority
■such a possibility.
goal I have described will be be¬
L .;
destroy the initiative which is the
NORTH and SOUTH
Although not quite the size of
California toll bridge issue,
the forthcoming offering of $41,-
the
tribution of the bonds, the two ac¬
counts joined forces and the ac¬
industry and labor together
do not assume responsibility for cepted tender was submitted on
behalf of the combined syndicate.
full
employment, then govern¬
have
on
VIRGINIA—WEST VIRGINIA
District Issue Awaited
If
will
Wire Bids
Consumers Public Power
ment—were eliminated.
ment
2163
the
bonds
and
debentures of the
City and annexed municipal cor¬
porations maturing on or after
May 15th 1944.
Accordingly, the securities to be
given in exchange by the City
under the said By-law will bear
interest only from the last inter¬
est
payment
tober
16th
date
1944
preceding Oc¬
of the
and debentures to be
old bonds
replaced.
MONTREAL, May 10, 1944.
Director
L.
of
Finance
ROBERGE
1
of. all the rest of the world to
Government above or which we can have access with J
below grouhd, or that there should overseas transportation, protected
be equally costly storage of a huge by our military forces.
In the
Basin
of
Venezuela
volume of products.
:
; i Maracaibo
alone there are proved reserves of
If such ideas snould be put into
of crude oil should £>e
of barrels
The Progress
:
Ai d
Prospects
Oi Our Oil
(Continued fi
>m
Industry
2142)
page
investment, be¬
investment
the
cause
by
the American private oil
industry
at home ; and abroad
would be gradually throttled.
A
system of underground hoarding
for emergency use would have to
provide for a daily production
rate of at least a million barrels
effect,
;
in relation to the
only 85 years ago with a shallow
in Pennsylvania, and with
well
stored
in
dollars
five
least
at
barrels
billion
of
and
its main product.
as
t
has kept pace
.
■
.
.
.
miles
.
-
—
rel of crude oil
and to make prod-;
thought impossible at
nets
times
past, No industry is more
competitive. There are thousands
•in the
aggressive companies and in¬
engaged in it, and no
of
dividuals
optimum rate
that production
—
sufficient to meet market demand
has
the.
through
extended
been
for
Administration
Petroleum
(according to pre¬ War, representing, the Govern-;
figures) sells quite 10% of ment, and the Petroleum Industry
war
distributed
gasoline
branded
the
public of the United States.
The industry made possible the
Winning of the former World War.
It is assuring victory in this war,
which uses petroleum in quantities unimagined by Army and
to the
three years
Navy men as little as
policy.
condition
results
The
of
this
all
well-
War
Council, representing the in¬
dustry—both working together to
effi¬
material
critical
this
make
es-^
ciently available for war and
sential civilian
use.
Of course, we
all
expect that the special regula¬
which appear to be needed
in war time will be discontinued
tions
such va¬
in
peace
time.
Outside
the
the
Government
to
thereto by improvement in the
technology of production methods,
both
primary
and
secondary.
improvements may easily
increase by 50% our estimate of
the
first
two
classifications
of
These
reserves.
(4)
great enough to produce
known conversion technique
by
much
as
average
pre¬
States,
v
•
oil
of
"proved"
5
we
of 20 billion
continue to dis-
fields.
of highways
the United
was built by Federal and
governments largely out of
special taxes levied on the use of
automobiles and on the consumption of oil products. In the case of
States
State
i
;
good. It is
therefore,
have
a
natural presumption,
that
been
the
policies
past
sound.
however,
Recently,
great, network;
roads
covering,
The
fand
r
new
cover
has
still
reserves
j; barrels, while
4
and
you
may
have heard much about the need
for
drastic change in oil policy,
a
which would increase government
control to an extraordinary de¬
We
gree.
hear
that
dwindling at
ing
that
rate;
we
oil
our
serves are
an
look
must
re¬
alarm¬
to
and revolutionary changed
policy of our Government
the Government might release a
toward
oil. Considering our total
flood of oil at any time upon the
market, upsetting all the value oil resources—not only in crude
which induced the explorer to run petroleum, but in all forms—we
have in the United States alone,
his great risk?
C
and,
on
the other, the danger that
gerous
in
The way to provide for defense
oil at home is not to
of
reserves
set aside certain areas or fields for
the Army and Navy to'be
up
drilled
and maintained in idleness be¬
wars, at great public ex¬
the
regardless of any other oil area,
nearby or far away—a supply suf¬
ficient to meet our needs for an
indefinite
period.
sources are as
These oil re¬
follows:
gasoline as the present
refinery yield is likely to
produce
serves."
of
from
move
great
"proved
the
Re¬
more than half
is contracted to
for fuel, it is certain that
additional volumes of gas
1
Although
our proven
gas
will be found.
(5)
Shales containing material
convertible
into
oil.
These
exist
in vast volume.
Estimates, based
using only the richest and
most easily mined shales, indicate
they should provide 50,000,000,000
barrels of gasoline, or enough at
probable
post-war
consumption
for about 65 years.
Cost of gaso¬
on
volume
.
barrels
Natural gas—now proven in
volume
•
r
which
would
obviously
large oil supply
without
interfering with other
uses
for coal.
Even today coal
can
be mined, converted to oil,
and then to gasoline, and be sold
at a price to the dealer, exclud¬
ing tax, no higher than the price
of
1918-22, excluding tax.
The
technology of this conversion has,
naturally, had little attention' in
the United States, and when our
able research talent really gets to
work on it the cost will be greatly
reduced.
The prices of 1918-22
would seem high to our people
today, because our private oil in¬
dustry has continually reduced
the cost of gasoline.
make
,
■
included in
6,000,000,000,000 barrels of gaso¬
line, which at probable post-war
consumption
would
provide
enough gasoline for 8,000 years—a
'
•
Crude oil not
calculating the first two classes of
reserves, but which will be added
the trillions of tons.; It.has been
estimated that this could supply
,
wanted
United
shall find a lot more
Of oil.
in North America is calculated in
; about four billion dollars, and if
vent further entry on public lands,
the stored as products, it would cost
Predictions of oil shortage made
and
one-half
billion
"Open Door" policy of our De¬ over six
headlines
after the last World
have had to work miracles to pro¬ partment of State, although not dollars. This does not take into ac¬
completely
successful
with
all count the difficulties of trans- War, and the proposals that seem
duce them.,
to be going the rounds today are,
countries, has helped American portation to assemble the storage,
v
\The record is one of marvelous
unfortunately, similar to those
oil companies to compete in the nor
the
disturbance
of normal
achievement by private industry.
made then.
'
Since the former war, we have development of oil areas in other business operation caused by tak¬
In 1920' a bill was introduced
parts of the world. Without threat ing such a volume out of the reg¬
quadrupled our crude oil produc¬
of force, and without force ever ular stream of commerce, nor the into the Senate to form a United
ing capacity, found and put to use
our
nationals extra refinery capacity necessary States Oil Corporation to operate
enormous
volumes
of gas, in- being exercised,
in all foreign countries with cap¬
have been able to hold their own to provide the products.
creased our yield of gasoline from
ital supplied by the oil industry
with foreign enterprises, whether
Aside from these cost factors,
a barrel of crude oil by 75%, built
private or governmental- partner¬ this locking up of a reserve sup¬ and a directorate of nine ap¬
100,000 miles of pipelines, not only
pointed by the President of the
ships, even in those regious of the
ply, one way or another, would
quadrupled refinery capacity, but
United
States.
Dollar
gasoline
world designated as some other
weaken
or
destroy
incentive
for
; changed refinery technology to an
country's "sphere of influence." the; discovery or "wildcat" effort was predicted as an immediate
amazing degree.
calamity. The then Secretary- of
;v
During
thef 23
years,
1919 Recently there seems to have been of ; small and large, producers. the
an
Navy wanted to nationalize
impression that our nationals When we remember that only one
through 1941, we drilled 551,676
the oil industry. With the benefit
have not done as well as others
"wildcat" well out of every five
•wells
in the United States, of
of hindsight, we see clearly how
in getting foreign oil reserves. The
which 136,381 were failures.
is a producer, we may ask our¬
In
fortunate we were to avoid the
truth is the contrary.
We have selves the
question: who will be
1918, technical men of the indus¬
dreadful mistake of adopting these
done better than any other nation
willing to face the loss of 80% of
try estimated the crude oil of the
plans, which would have stopped
his venture for the sake of a dubi¬
United States, both "proved" and during the past 25 years.
With this amazingly successful ous 20% success, when he faces, the industry's progress, and might
"to be discovered" at only 7,000,easily have reduced greatly our
^000,000 barrels, and the automo- history of the American oil in¬ on the one hand, possible Gov¬ chances of winning the present
dustry, we ought first to examine ernment
r bile industry feared that oil short¬
expropriation
of
his
war.
"V :h-^5
V5' &'■ V;
age would hamper its growth. the oil policies of the past when property at a low price before he
There is no necessity or urgency
Since then, our private oil indus- we think of possible change in can prove the real value of his
The results have ■( been discovery by additional drilling, which should compel such dan¬
try has produced 23,000,000,000 policy.
and which requires
ago,
riety and quality of products that
our
refineries
and
technicians
to
doubtedly
line from shale is probably no
higher than gasoline from coal. '
(6) Coal.
The amount of coal
meant
planning will insure the
taken over and
Government and coming of the very disaster that
the planners seek to avoid.
Both
to drill up the partially developed
the planning and the fear of oil
fields as they are expropriated.
shortage which prompt it have a
Storage above ground would be
familiar ring to the older men of
equally costly and
impractical. the
industry, like some discredited
For example, if the above ground
legend from the past. As far back
storage should be adequate to pro¬
as
1908, the Chief of the United
vide an emergency supply of one
States
Geological
Survey
ex¬
million barrels a day for only
pressed great concern over the
three ..years,
the total volume
coming oil shortage, saying that
would amount to. over a billion
practically, all
good
geological
barrels.
If stored as crude, this
prospects had been tested, and he
would cost, over a 20-year period,
while avoiding waste in recovery.; proven oil fields
During the war, this cooperation locked up by the
company
one
to maintain in workable
the wells and installations in those
least
at
of
which
•
-
about
whereas
2,100,000 cubic
sedimentary strata in
look for oil, and un*
have
we
(3)
which, by
their
nature,
can
be
largely'
adapted to fuel for our Navy,
Today
our
well
established
position in the foreign field is
threatened by the recently organ¬
slowly
It has grown great. It has been able
to pay dividends to its stockhold¬
with, and in great
ers at only modest rates.
In the
part made possible, the growth of
motorized transportation and the past 20 years, the industry's divi¬
dends have averaged only 4% on for emergency (one-fourth of our
ized Government agency, the Pe¬
Airplane. Ever since gasoline in
present production). This would
its net depreciated investment.
troleum
Reserves
great volume became important,
Corporation,
The world-wide progress of the mean locking up proved and de¬
the industry has met the con¬
which, under its charter, has the
American oil industry has been veloped reserves of about seven
stantly
growing
demands,
in¬
billions of barrels, with all the power to put the Government in
creased its underground inventory accomplished without government
necessary
completed wells and any oil activity of any kind
participation,
but
with
some
gov¬
of raw material, paid better wages
abroad.
field installations ready to pro¬
ernment encouragement. The rec¬
with
shorter
hours, continually
The entrance of this Govern¬
duce
immediately when
called
ord, with few exceptions, is a
ment into other nations' territory
improved its products, and low¬
tribute to the sound relationship: upon, if the reserve is to be of
ered costs to the public.
as owner and operator of oil fields
which has usually prevailed be¬ real value in the emergency, j
I" Today, despite the failure of
or
transportation '."systems,
in
The suppression of production
tween the industry and the Gov¬
four out of five "wildcat wells,"
whole or in partnership, will cre¬
ernment.
-';V
■■
'\
'/' ■ 'j at home would kill the spirit of ate tension in the countries, thus1
each
of
which may cost from
For exmaple, for over ten years, venture necessary for discovering
invaded and in all other produc¬
$20,000 to $100,000, we go. on ex¬
the first and in¬
oil fields in some of our States new reserves
ing
or
ploring and drilling, finding new
potentially
producing
have been operated on a conserva¬ dispensable necessity for a live
crude oil and gas fields, produc¬
countries, who would fear such
tion basis, administered through and growing oil industry. Such a
ing oil from two to three miles
foreign government invasion.
It
the
various
State
commissions restriction by Government would
would raise again the cry of Yan¬
deep in the ground, advancing the
and coordinated through the In¬ require a great number of Federal
kee imperialism, which we have
science of finding,
drilling and
terstate Oil Compact Commission, employees, exercising rigid con¬
been at such pains to disavow,
producing, reducing the cost of
^with the approval of the Congress. trol of the operation of nearly
and would gain us nothing that
transportation,
improving
the
This enables the industry to pro¬ half a million oil wells. Another
could not be gained without such
technology of refining to get more
duce oil at what is known as the great number would be required
valuable fractions from each bar¬
a
lamp oil
serves," would occupy only
two cubic miles of space,
crude oil which will be drawn on
relatively
#Thursday, May 25, 1944
«
FINANCIAL CHRONICLE
THE COMMERCIAL" &
2164
possible
Finally,
oil
we
resource
of
a
have
all
our
greatest
in the ability,
and brains of American
operating,
engineering and re¬
search talent linked together in
the American private oil industry.
energy
This
combination
of
courage,
and technology created the
oil industry here and abroad; if
energy
permitted,
it will
constantly
re¬
create this industry and make all
these
of
sources
oil
available
to
the
country in sufficient volume
and at reasonable cost.
Without
this American daring and techno¬
our crude oil re¬
would have lagged and
disappeared from the scene
long ago.
: * ;v,'v
logical ability,
sources
almost
Crude oil cannot be obtained
by
building a factory and installing
machinery to make it.
It does
not
occur
in solid beds close to the
surface to be had by simply dig¬
ging it out. It is-not running in
surf ace. channels, needing only to
be harnessed to a pump
and a re¬
You cannot get it by
planting seeds or saplings and let¬
ting nature mature the crop.
Go
among the hills and to the plains
and the seashore, and you will see
(1) That part of the discovered finery,
States were
the rate of
$948,038,000 yearly in 1941.
Along these roads and highiways, the oil industry has estabj;lished the greatest distribution
system in the world, so that in
other
in America,
on wheels,"
rarely, if ever, out
1 of reach of a service station where
he is assured of fine products and
exceptionally efficient service.
Pearl Harbor.
They are figured
by
technological
brains,
great
production is at 20,000,000,000 barrels under
courage and persistence is crude
severe rules of measurement and
At home, we have heard
in¬ always available for war by pro¬
From this oil brought into being from na¬
timations that Government should ducing fields for a time at a rate bases of calculation.
ture's
hidden
accumulations,, a
suppress the production rate
of higher than the best engineering figure has come the often quoted, mile or two or three
l^elow an un-*
our
oil fields to make room for practice would dictate, plus some but quite wrong, statement that
restriction
of war-time civilian we have only 14 years' supply promising, looking ground surface.
large
gasoline alone, the
I collecting taxes at
i
•
I normal
\
peace
known
as
time,
nation
"a
i- the motorist is
;
A business
,
'
i
might
t earn
•
•
v
dealing with so vital
product, organized so efficiently
and enjoying so rapid and con¬
stant an increase in consumption,
a
pay
on
a
perhaps,
expected,
great
rate
of
to
profit and
dividends at high percentages
the
trarv.
in
be
investment.
On the
con-
the industry's profits, large
total
dollars, have been small
for
oil
tween
peace-time economv and for
defense; that this means
pense.
countries
sufficient
for
national
the
Federal
own
and
must
Government
operate
a
corporation,
Our national defense re¬
home will
serve
at
prise
all
United
the
States
chartered to engage abroad in all
citizens.
forms of oil activity—production,
and develop
hvmsnortation, refining and
keting.
•
:
mar¬
imports, so that this sup¬
production will be there
for emergency use —that proven
Jeveloned nil fields might be con¬
pressed
demned and locked up
in Govern¬
ment ownership reserve
tional
defense .measure—-that
Government
dustry
on
as a na¬
and
should
not
the
private in¬
try to develop
oil
the public lands—that billions
of
oil
owned
The freer
the
by
we are
entire
all
the
to find
crude recoverable by
today's prac¬
tices, called "Proved Reserves,"—
the smallest part, of our total oil
resources,
but Just as great today
of enormous war
as thev were the day of
after two years
oil, the greater these denmands
national defense reserves will be.
A great
V
always com¬
emergency
Locked up reserves mean de¬
use.
creasing reserves for the reasons
previously given.
To
this
can
we
defense reserve
add the fields geo¬
home
also
of oil.
Crude oil to be discovered
through the years by constant ex¬
(2)
ploration and wild-catting if pri¬
vate industrv is not stooped from
graphically clo«e to .us in friendly doing this job by ill-devised olans
that
ica
crude oil
whgrje. oil discoveries are cer-
taliijlo.^^xease, and also the fields
to
-
private industry in
of oik resources
creator.
Unless the
The role of
the development
is
that of
a
search for oil goes on
ceaselessly,
despite uncertainties and. difficult
ties*;the resources, cease to exist
If • this forceful
incentive.
All the for mankind.
American enterorise is preserved,
produced in our country
we have enough oil resources at
date, plus the "proved re¬
nations in northern South Amer¬
k
nothing but perhaps a little seep¬
age here and there to show that
crude oil resources exist.
Only
destroy
fVolume 159
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4284
-
home to carry, us through genera.'tions to come—undoubteidly until
the advancing technology of the
machine
no - longer-- requires
a
large volume of oil. Oil will con¬
tinue'to be a vital product only as
long as it continues to provide the
-best and most convenient service
cost.;'When ,it
lost
at
does
longer
no
this, it Will be gradually su¬
perseded) ' 'Until then
our oil retire adequate,- unless the
; sources
initiative
find
to
and
them is destroyed."
to
develop
:
>
V
:\v;
£. These resources which I have
i mentioned
domestic.
are
They
represent 4he natural desire of a
great nation to have its own sup¬
But we do- not have to insist
this self-sufficiency. •> Our
production of crude oil may fall
behind -our, country's
enormous
ply.
upon 1
The costs of find¬
ing oil* which, according to the
consumption.
V Administration
Petroleum
for
War, have quadrupled in the past
110; years or so, may continue
costly,
that
so
higher price will
a
be necessary.: It may take a few
before' the cost of making
oil from shale and coal is reduced
years
The Edward G. Budd Letters
Involving The Right
Of Employers To Free Speech
get our surplus needs from
coal, we can import from
other countries.
There is no im¬
to
or
or
whole.
The known
the world
as a
fields
vast, and those yet to be
are
found
are
to be
sure
great.
very
In these fields our nationals have
strong a position that we can
so
all
import
ahead
for
want,
we
far
as
Even
is sensible to look.
as
without ownership abroad by our
nationals,
oil
could always import
we
needs
by buying from
peace-time.
In war¬
time, of course, the oil can be had
by the buyer who has the trans¬
our
in
"others
facilities
portation
who
and
During the
portation.
go
for it,
the
trans¬
to
protect
can
British
war
and American nationals owned oil
in
and
the
British
Iran, but with Ru¬
enemy and during the
Rumania,
oil
owned
mania
that the Mediterranean
time
route
unsafe,
was
these
Sea
owner¬
ships meant little.
So
can
we
for
need
no
see
a
change
in
the
Government's
policy. toward the American oil
industry, and we can see grave
dangers.
Our industry fears that
the
Government may
put into
effect policies which could mean
the destruction of the private oil
industry and a real shortage of
crude oil.
The first definite sign
of
the
taking
ruin
is
primrose
path
the" Petroleum
to
Reserves
Corporation. The oil industry has
gone on record in condemning the
policy, indicated by that com¬
pany's charter, of having
ernment
rove
interest
nations.
have
We
;
proprietary
territories
in
clarification
Gov¬
our
the world in search
of oil adventures with
of
of
other
for
asked
Government
a
pol¬
icy, with the people participating
in the determination of that
policy
through their elected representa¬
tives.
We
all
hope that 'the
special committee of the Senate
Which is now investigating - oil
policy will clear this problem con¬
The recently con¬
cluded exploratory conversations
structively.;
between
United
a
States
and
a
British committee may also point
towards international cooperation.
The oil industry recently pre¬
sented
the
to
documents,
one
Government
two
entitled "A For¬
eign Oil Policy for the United
States," and the other a prelimi¬
report entitled "A National
Oil Policy for the United States."
These put forward statesmanlike
ized
as
be
can
follows:,
.
;.
summar¬
,
.
..,
.
mestic oil, industry should be en¬
couraged
to
continue
search
to
Actively for more crude oil and
gas fields.
All measures encour¬
aging to this finding effort should
continued and improved,' and
be
new
encouragements found.
suggested
policy
that
Any
would
be
ently had
bargaining, asked the Company to
help them to draw up its By-laws,
and to hold an election for Repre¬
sentatives". This we did,—to use
the words
of the Philadelphia
same
Court,—in
interest"
spirit of "friendly
and
cooperation.
The
a
paid for printing the
By-laws and the ballots, and co¬
operated in holding the elections
Company
in the plant.
:
:
-
Later the
them
distributed
1,995, chose, in a secret
of 3,152 to
ballot, the E.R.A. over the Local
of the A. F. L.
This Local had
conducting a strike, which,
while it seriously interfered with
production,
was
Company has dealt With
Repre¬
all questions
involv¬
sentatives
ing
on
hours
wages,
conditions.
How
and
well
working
have
they
bargained is indicated by the fact
that in that time the hourly wagerate has increased from 55 cents
in
1933
to
$1.19 in 1943 and the
annual wages have in¬
$1,092.64 in 1933 to
average
~
that
things
stocks,
acfc
are
ing nicely.
For ejxample:
Crane, recommended (and
available) at 221/2, is now at
a
new
high of about. 24.
Granted, the profit, in points,
is nothing to crow about, still
the fact that it's up in a so-so
C.I.O. Local
as
bulls,
their bar¬
confusion,
in
The
shows any sustained advance.
stock was advised a
chests When
their
with
puffed out, went around saying, I told you so. The bears
with the Labor Board, claiming
merely increased their dole¬
that the
E.R.A. was "company
ful shaking of their heads,
dominated" and hence unlawful.
The -Labor
Board
decided
in saying, it was just a flash in
March, 1942, that, because of the the pan which would result
assistance given the E.R.A. in its in a
greater decline. Strange
formation ten years ago, and also
to say, neither side, no mat¬
because of its later having secured
ter how strong its convictions,"
a share in the receipts of the Em¬
ployees' Exchange (which oper¬ had any position to speak of.
ates
the
candy and- tobacco The
bulls, while optimistic
booths) the Association was un¬
lawful in its beginning and so speak ramblingly about the
continued
in spite of the
1934 the long term, secretly wait¬
election and of all its successful
ing for a set-back to buy
operation since then.
stocks. The bears are simply
Last
fall
the
United
States
out of stocks, though telling
Court
in
Philadelphia, decided
that, under the Wagner Act, the everybody this one and that
Labor Board was the sole judge is a
good sale but doing noth¬
of the facts,; and the Court was
ing about it themselves.
bound by its decision,
'7:^77
gaining
representative.
>
the
At
time the C.I.O. filed a charge
<
,
.
777777.7.
Since
the
Supreme
Court
we
now
ket
decide whether
to
want
choose
one
have
v..,V-:
or,
*
71 #
Another
Gypsum,
advised
from Servel.:
934
at
NG
and
'
*
is
/. ■■
National
is
one
switch
as
was
bought
about
now
a
point better,. 103/4., A gain of
a
point is quite sm^ll, but the
fact that this one point was
made
against old offerings
which go back to
June, 1943**
is nothing to be sneered at.
About a half a point more
(across UV2) and stock will
writers
This
and
ad¬
fore the next column
appears.
unanimity
of But D-Day and all its
impli¬
opinion carries with it the cations is
something every¬
seeds of reaction.
For no
body has a guess about. All
post-SEC market can stand I know about it is what I read
a
of the outside
letter
visors).
bargaining
agency, and if you do, whether it
will be more to your advantage to
you
'
;
7'7.7
•'
still believe it to be
wrong, unfair and contrary to the
best interests of the employees.
We are, therefore, posting the no¬
tices which the Board requires,
and are discontiuing all further
negotiations with the E.R.A.
we
You must
jjc
#
met.
are
It
Board's order in good faith, even
though
;
stop of 20 was suggested.
I
now
suggest it be raised to
22.
On up-side, Crane looks
capable of getting to about 26
before any serious offerings
be in new high ground.
Stop,
might be wise to point however,' should be raised
out in passing that practically
to 9%^T'
v';-V7
everybody is bullish for some¬
7'' '"'V; -.7
i'f
5.%
* '77'V.v '
thing described as the long
On the news front there is
term.
Only on the near term little to report. The
big news
is there
any
difference of is of course invasion,
and, for
opinion (I'm referring to mar¬ all I know, it
may occur be¬
has
declined to take up the case,
will of course obey the Labor
now
unions
the other hand, to form prosperity.
But while our
$2,795.00
in
1943. During this your own organization. This you market is down one day and
have a perfect legal right to do.
time the Company has not paid
up the next, the London Ex¬
The Wagner Act says:
any dividend at all on its Common
Stock, and none on its Preferred v; "Sec. 7—Employees shall have change is going through what
the right to self-organization, to some
Stock except the two quarterly
people describe
a
dividends paid since last summer. form, join or assist labor organ¬
profit-taking stage and others
izations,
to
bargain
collectively
It has always been the Com¬
as
a
decline.
But whatever
through representatives of their
pany's policy and desire to pay own
choosing, and to engage in it is called, the London mar¬
wages as high as it can and at the
concerted activities; for the pur¬
ket is going down.
same p time
preserve
its credit,
7
;
keep its plant thoroughly up to pose of collective bargaining or
other mutual aid or protection."
date and sell its products in com¬
The Company fully recognizes
Disregarding the market as
petition with other manufacturers.
The present average earnings per this right of its employees, and
such membership in any organiza¬
hour are 45% above that paid in
Mallory Interesting
tion that you may choose to join
P. R. Mallory & Co., Inc., offers
January, 1941. ;
or to form will not affect the posi¬
an interesting
During the period of the annual
situation, according
tion or prospects in the Company
contracts negotiated by the E.R.A,
to an analysis prepared by Steiner,
of any employee.
On
the
other
with the Company, there has been
Rouse & Co., 25 Broad St., New
10 years of industrial peace in our hand, I feel that it should be made York
City, members of the New
clear to each employee that it is
York Stock Exchange. Copies of
plants. This has made it possible
not at all necessary for him to
this analysis may be had from
join any particular labor organi¬
Steiner, Rouse & Co. upon re¬
(2) Our nationals engaged in zation,
n
spte of anythng he
oil operations abroad should re¬ may be told to the contrary. Cer¬ quest.
ceive the full diplomatic support tainly there is no law that re¬
of our Government, but our Gov¬ quires or is intended to compel
Situations Of Interest
ernment should not take any pro¬ you to pay dues to or to join any
Herzog & Co.. 170 Broadway,
prietary interest in the business.
New York City, have prepared
organization.
(3) Our
Government
should
If you decide to form an inde¬
interesting memoranda on Hartgis
promote the world's prosperity, pendent union here in the plant, Bros., Federal Screw Works, and
understanding and peace by seek¬ the Company, although entirely Megowen Educator/.
Food, which
ing international cooperation in agreeable to this plan, can and offer
attractive
situations
cur¬
oil, with arbitration of disputes.
will do nothing whatever to assist rently, the firm believes.
Copies
(4) The domestic oil industry you, but would recognize such an of these memoranda may be had
needs no further Federal admin¬ association
as
your
accredited upon request from Herzog & Co.
istrative machinery, but the Fed¬ bargaining
agency when satisfied
eral assistance proven sound in that it was
properly formed and ish leadership, or is it not? Is it
the past should be continued, and had the support of a majority of interested in
your personal, indi¬
creased from
on
in the papers.
once it is
underway then
all the market
prognosticates
But I do know
that
will be
wrong—including my¬
self.
•
■
77-
*
:
should
be
encouraged
them.
to
adopt
*,
.
.
interest in oil
best be served by a vigorous
(5)
can
laws
without conservation
States
The
public
competitive industry, guided by
private initiative.
(6) The
Government ' should
avoid the dangers of hastily con¬
ceived measures, and if any new
oil policies are needed they; should
be based upon mature study and
knowledge,
and
adopted
only
with
the
aid
and
counsel
of the
private oil industry,
If
our
heeded,
we
recommendations
are
need have no fear for
this country in
the employees.
In deciding whether you prefer
to join an outside organization or
to form
a
own, you
new
Association of your
will make
up your
mind
on
If
outside
an
about
of
home.
ciently and continue to be able to
Of the
Company's willingness to pay the
highest wages it can afford you
have had ample proof over the
past ten years.
-
To what kind of
;
you
leadership
are
organization,
don't
questions
or
One
'
and
you
you
talk
article
time
views
do
expressed
in
this
not
necessarily at any
those of the
They are presented as
coincide
Chronicle.
with
those of the author only.]
;
LAM BORN & CO.
99
WALL
STREET
NEW YORK 5, N. Y.
7 SUGAR
Exports—Imports—Futures
U
DIgby 4-2727
7
Established
is
1856
H. Hentz & Co.
Af embers
know?
should
over
at
fast
York
New
York
York
as
we
nothing that
fere with
more.'
can.
Let
we may
our
us
allow
do to inter¬
maximum effort to
c a
New
Orleans
And
Exchange
Curb
Exchange
Exchange
Exchange,
C h i
g o
Stock
Cotton
Commodity
We are all
now engaged in making munitions
and appliances for use in carrying
on the War and finishing
it just
as
New
New
•
thing
7
—Walter -Whyte
7:
[The
it open and above board and de¬
pendable,
think
pay'you the highest wages.
7:7,\
$
.
the basis of its past record
are
going to entrust ybur' futbre
its oil supply is concerned. • with this Company? Is it unselfso
ing?
These
Company, and r which one
will be more likely to enable your
Comoany.to operate most effi¬
:jc
Thursday.
vidual welfare, or is it self-seek¬
which form of representation will
be better for you as an employee
this
7
More next
'
far as
unsuccessful in
the men to choose the
A. F. of L. as their bargaining rep¬
resentative; '■ v-!.- ■ ./■■ ■'.s•'v'--:''
7 Since
then for
10 years the
inducing
the
to
been
be rejected.
'
by a vote
election the employees;
the security of
'
the employ¬
to
after which another election
held in March 1944.
In this
ees,
was
resulted
objected from 1934 to
1941, and to choose and pay dues
simply as I can. '
- ',41'.; 'A- VIn September, 1933 our employ¬
ees, desiring to form an Associa¬
tion of their own for collective
discouraging to oil finding should
'
Savs—
limiting this dis-f,
individual
to
find
we
.
•
(1) First and foremost,. our" do¬
Whyte
»
nary
proposals which
cussion
(Continued from page 2i44)
changed again. ." Tape began
active .and
prices strong.
Ordinarily, such a condition
ment.;:- ;•
\ 4.;-.v ..v,;,-; >
; should make the average Wall
make this advisable.:
7
In the spring of 1941 the, C.I.O.
In order-that you may under¬
Streeter's eye glisten in an¬
stand what has : happened,
and made an unsuccessful drive to in¬
But, paradoxi¬ market
duce
the
what you may .lawfully do, I am
employees to desert the ticipation.
points^ to still better
Instead, it levels once the market itself
going to state this to you as E.R.A., to which no one appar¬ cally, it didn't.
in
an
Walter
unit and
a
.
(Continued from page 2144) ;
for : th'e employees to have steady
case which is brought before it,
and
has enabled the
but only those cases which it com earnings
siders of sufficient importance, or Company to develop its new prod¬
of
sufficient public
interest to ucts and thus expand employ¬
..
shortage of crude oil in
mediate
Tomorrow's Markets
V
Representatives thor¬
to the cost
of making it from oughly revised the Proposed By¬
.crude petroleum.
If we are un¬ laws, had them approved by Wm.
willing to pay a slightly higher H. Davis, the Director under Gen¬
price to find oil in our country, eral Johnson of the N.R.A., and
shale
2165
v
Board
Cotton
other
N. Y. Cotton
of
Inc.
Trade
-
'
Exchange
Exchange«
Exchange Bldg.
NEW YORK 4, N.
Y.
this end.
Sincerely yours,
Edward G. Budd,
President
CHICAGO
DETROIT
GENEVA,
PITTSBURGH
SWITZERLAND
Equalization Of Government
Subsidies To Transportation
have the free
partially free use
publicly owned and maintained
or
of the Board, nor in Mr.
Delano's
letter to President Roosevelt.
As
a matter of fact, Mr. Young spe¬
the carriers cifically relieved the Advisory
by highway are at a disadvantage Committee of responsibility for
in
competition with Waterways the recommendations and findings
and airways. The subsidy to water in the report by stating that it
and air carriers is certain and sub¬ must not be understood that the
stantial. They pay nothing for the members of the Advisory Com¬
use
of publicly bwned and pub¬ mittee
necessarily
endorse
the
licly maintained rights of way. views set forth in the report, since
full
The
liberty of expression was ac¬
highway carriers,
on
the
rights of
In
way.
smaller
degree
He
other hand, pay
corded to the writers^
the privilege of
mended, however, that the report
be made available as a guide to
ways
and
doubt
as
substantially' for
operating on high¬
streets but there is
to whether the commer¬
cial carirers, as
distinguished from
carriers and automobile
owners,
are
bearing their full
share of the burden of joint costs.
private
The degree
of subsidy to commer¬
highway, however,
is uncertain and is yet to be con¬
cial carriers by
vincingly established.
recom¬
appears,*
form
one
favored
be
should
in
degree than others.
An
exception to this principle may be
justified during the early years as
an aid to development of a new
form.
Commercial
carriers
by
greater
water and
highway, however, are
industries" and air
"infant
not
transportation
is
now
emerging
adolescence.
Each form should now be placed
on
to
childhood
from
its
own
feet, to rise or fall ac¬
cording to its own economy and
its inherent advantages
'
fitness,
thinking and an aid to planning.
The specific suggestion that the
railroad fixed property be pur¬
chased, therefore, may not prop¬
erly be considered as one ap¬
proved by the Board, even though
it appears in the summary written
by Dr, Watkins, the Director of
the Transportation Study.
Fol¬
lowing a discussion of charges for
conditions
these
in
differences
supplying capital may balance
well enough for all practical pur¬
insure equity, but be¬
poses to
cause of changing
circumstances
the ultimate solution may lie in
the public ownership or leasing of,
all basic transportation facilities,
with
the
railroad
fixed
plant
placed in the same category as
public highways, waterways, and
airways and paid for according to
use.
This step would establish a
basis of equality in the provision
from uneconomic and of all transport facilities. Like¬
competition by fair wise, it would overcome the dif¬
and impartial regulation.
ficult problems arising from the
While the attainment of precise railroad's burden of fixed indebt¬
protected
destructive
equality between modes of trans¬ edness, for the user charge would
portation in the degree of subsidy be based on the voluihe of traffic,
is not practicable, an approxima¬ thus substituting a variable for a
tion of equality may be achieved fixed obligation.
In addition it
in three ways.
One is suggested would permit more effective pro¬
in the recent report of the Na¬ vision of transportation plant be¬
tional Resources Planning Board. cause it would facilitate joint use
It would not disturb the present of • rights-of-way and structures,
policy of subsidy to highway, coordinated
terminal
arrange¬
water and air carriers but would ments, and over-all plans directed
extend a form of subsidy to rail¬ to transportation requirements as
roads by
purchasing or leasing the
property, financing
railroad fixed
the needed
additions and
better¬
ments, and permitting the railroad
companies to operate their trains
the government owned right
of way under user charges.
over
:
:
A second method is found as an
element in the plan
of the Trans¬
portation Association of America.
Under it the many individual car¬
riers by all forms of transporta¬
tion would be put together in a
limited number of transportation
Each of approximately
24 systems would be built around
a group of railroads as now organ¬
systems.
ized and would embrace also car¬
riers
Each
by highway, water, and air.
system
would, therefore,
a
whole."
This statement
one
was
followed by
which may indicate that the
principal thought in Dr. Watkins'
mind
social rather than
was
nomic.
eco¬
This is what he wrote:
.
"Still another advantage of pub¬
lic ownership or leasing of all
fixed
be
the
transportation plant would
realized
in
connection
with
public works programs
which now apply only to high¬
ways, waterways and airways. In
emergency
the
the
future
programs
have
the
creating
extension of
such
the railroads would
advantage not only of
to
a
more
equitable
com¬
petitive condition, but of tapping
a
large new reservoir of useful
would in ef¬
The third method
withdraw
fect
all
transportation
the carriers
subsidies by requiring
now
subsidized
to
pay
user
charges which would fully reim¬
government for the car¬
rying charges on and amortization
burse the
of
the
capital
expenditures
in
transportation facilities, and for
the cost of maintaining those, fa¬
cilities. Each of the three meth¬
ods will be discussed in the order
named.
suggestion offered in the
report of the National Resources
Planning Board, that the railroad
fixed plant should be purchased
or leased by the government, was
included in the body of the text maintenance would be done by
'and in'the summary, both written the government or by the rail¬
The
by the Board's economists, but it roads.
report is silent on
was not mentioned in the letter of
questions affecting the purchase
transmittal by Chairman Owen D, price or the terms of the lease, the
Young of the Advisory Committee legal rights of the holders of
to Chairman Frederic A. Delano mortgage bonds, and the means of
The
losses
for
-ly
enues.
and
towns
in
tax
rev-
V
rights of
way
.
discuss its underlying philos¬
ophy and objectives. Here we may
discuss it solely from the view¬
may
Reference is made to joint use
of
portation Association of America.
Other speakers on this program
and structures.
for example, that the At¬
lantic Coast Line could operate
its trains between Richmond and
New York over the R.F.&P. and
point of equalization' of transpor¬
tation subsidy.
v.ov
Briefly stated, the plan of the
Association contemplates that in¬
stead of continuing the present
Pennsylvania or
whether the
Pennsylvania could operate over
modes of
We
do
this
whether
know
not
the
New
Haven
between
New
York and Boston. We do not know
whether
vehicles,
of
operators
the auto-rail car, equipped
with ruber tires for use on high¬
such
as
for
use
steel rails, would have
on
water and air
department by ac¬
metal wheels quiring present carriers in those
wayshnd flanged
the right to operate on
roads.
;
•'
■
<,
the rail¬
each
Within
fields.
the
system
servcies of all four forms of trans¬
■' portation would be coordinated or
question integrated so that the service by
basis on which each type of transportation would
>
prefer to operate
which
carriers
independently in competition with
the integrated systems.
It is not
unlikely that the
present un¬
friendly attitude of those carriers
toward railroads would continue
and would breed distrust toward
require
would
which
plan
any
ft'eedon)
and virtually put the future of
their enterprise in the hands of
to surrender their
them
competition
between
transportation, the rail¬ their erstwhile enemy. And even
roads would be grouped into a if they were induced to surrender
limited number
of competitive their independence, the water car¬
systems and each system would be riers and air carriers are not suf¬
permitted to have its highway, ficients in number to permit an
wasteful
.
equal distribution by number and
importance among the integrated
companies. How would the Amer¬
ican, the United, the T.W.A. and
the
Eastern — the
"Big Four"
t
One
very'important
has to do with the
the
charge would be deter¬
user
If the government were
mined.
to
purchase the railroad fixed prop¬
erty at-a fair price, and in the de¬
termination of the user charge
had to deal only
corporations,' it
that
that
with the railroad
be assumed
may
the charge would be set so
the government would not
sustain
loss
a
on
its
investment.
charge would cover the full
ownership by the^govern-
If the
which
superiority and
be confined to the field in
has, economic
it
Within each system there
fitness.
Railroad?
petition between systems and the
serious doubts
ment,
borne by the
by at least two of the
railroads, the only way in which
the railroad would be better off
integrated systems.
financially would be in the lower
interest
r ate
o n
government
sible
bonds.
That advantage, however,
would be
more
than offset by the
additional interest charges on ex¬
uneconomic
for
penditures
gov¬
ernment-made
improvements and
by higher operating expenses in
providing service not justified by
earnings. The political pressure
to spend money lavishly on ex¬
pansion and improvements in fa¬
cilities, and in going beyond rea¬
sonable bounds in adequacy of
service on lines with light traffic,
is almost certain to be intense.
The
sugar-coating of the Wat¬
kins plan is in its promise that the
user
charge, which impliedly
would
be
proportional to
the
quantity of use, would substitute
a variable cost for a fixed cost, so
that the burden
in
on
the railroads
period of depression would be
lightened by government assump¬
tion of loss. There is no certainty,
a
however, that the terms to be im¬
posed
be
as
by the government would
liberal
as
Dr. Watkins sug¬
The greater likelihood is
that the government would make
gests.
sure
that
its
interests
would
be
protected by a provision in the
agreement that the user charge
would be subject to periodic re¬
vision to take account of changing
conditions.
In
of
view
the
many
difficult
legal,
financial
and
operating
problems inherent in the Whtkins
plan,
and the valid doubt as
whether
it
would
in
fact
be
to
a
subsidy, it is easy to understand
why the railroads strongly object
to the proposal.
There is sound
basis for the belief that the domi¬
thought in the plan is to
the railroads in with the
highways, waterways and airways
as
a
very
large field in which
nant
bring
practical,
as
well
as
deficient in
application to our im¬
problem of equalization
its remedial
systems? Would they be broken
into parts to fit the needs of the
integrated systems, or would in¬
be built around the Union Pacific
tant cities
now
larger number
public with the maxmium of effi¬
ciency at the minimum of cost.
There would, however, .be com¬
aim would be to serve all impor¬
charge
the
tegration be effected by a distriT
bution of stock ownership? What
water lines could be "allotted to an
no
cost of
a
the air lines—be allotted t<?
of integrated
among
competition between
of service. Instead
the services would be integrated
in such manner as to provide the
would be
its four types,
;
.*
<
,
.
,,
Such integration is not now pos¬
severely re¬
The Interstate
permits
railroad ownership of a highway
carrier only when the highway
service is complementary to but
not competitive with the railroad.
in
degree.
except
stricted
Commerce
The
with
CanaT Act
Panama
railroad
a
of
control
which
forbids
water
lines
there might be com¬
petition, and the Civil Aeronau¬
tics Board is carrying out a policy
under which
an
air line may not
or controlled by a rail¬
highway, or water carrier.
The
plan
of
the
Association,
therefore, would require the re¬
be owned
road,
moval of such restrictions.
The
of
transportation
agencies
alter¬
native of government ownership.
The creation of integrated trans¬
and to avert the dangerous
portation companies would elimi¬
nate in greater part the wastes in
destructive and uneconomic
com¬
petition, would reduce the over¬
all cost of transportation to the
public, and by the improvement
in
net
income
threatened
would
bankruptcy
avert
of
the
all
the
transportation
agencies
in
post-war period if with it should
slump in business activity
and an accentuation of the present
degree Of wasteful competition.
come
a
The theory under
which the As¬
sociation asserts that integration
would bring about an equalization
of government subsidy rests on
the premise that each of the in¬
tegrated companies would em¬
brace
railroads, which are not
now subsidized; highway carriers,
which
may
be
subsidized
but
probably in small degree; and
grated
tion
companies,
between
the
and the rela¬
number
such
,
These and other questions raise
to whether the
as
plan, of the Association, meritori+
though it is in many other re+
an adequate solution
of the problem of unequal distri¬
bution
of
government
subsidy
among transportation agencies.
:
ous
spects, offers
Having rejected the plan of the
Resources
Planning
National
Board and having found that the
plan of the Transportation Asso¬
ciation of America is inadequate
in
far
so
it relates to equaliza¬
as
tion of subsidy, we are left
natives, that is, the elimination of
subsidy to any and all transpor¬
tation agencies by imposing ade¬
quate charges for the use of gov¬
ernment
facilities
owned
-
services.
Parenthetically
and
charges
user
rather
tion
the
of
plan
would
'
strengthen
integra¬
Association;
Transportation
o";
•
,
charges are already ap¬
plied in principle to commerciaji
and private carriers by highway.
They pay registration fees and
gasoline taxes in all states and ad¬
ditional charges, such as vehicle
mile or ton mile taxes, in a few
states.
Every state has* its own
basis for charges and the differ¬
The carriers
extreme.
are
ences
inland waterways pay nothing
in reimbursement to the govern¬
on
for its heavy expenditures
making the inland waterways
ment
in
navigable, in maintaining them;
and in providing lighthouse serv¬
ice; and they pay little to the
cities
and
loading
for
towns
the
ditures and maintenance costs
the
lighted
weather
airways
bureau
or
and
payments to
air
lines
duced
a
few of the larger
by
the
Civil
been re¬
Aeronautics
Board.
;
\
The
principal difficulty in the,
determination of fair user charges
in the fact that the
lies
ment expenditures were
govern¬
made
and
the maintenance expenses are be¬
ing incurred for the benefit of the
general public as well as for the
benefit
riers.
the
commercial
car-*
highways and streets
the most difficult problem
offer
of
of
The
apportionment because they
be
maintained, although
not to present standards, even if
-
would1
there
were
cles.
tional
for
no
They are
defense,
commercial
necessary
for
mail
vehi¬
for na¬
service;
police and fire protection, and
for other forms of community use.
horse-drawn
tion
linked with power
subsidized
beam
have recently
and
the
on
the
by payments for transportation of
mail, even though the air mail
the integrated systems
and the number and transporta¬
of
for
radio
parts
product
of
service, and they pay little for the
use
of municipal air fields.
Be¬
sides, most of them are subsidized
cies,
second of the three alternatives
use
unloading facilities.
The air carriers pay nothing to the
government for its capital expen¬
and
vehicles, farm equipment,
of
•
User
They
the plan sponsored by the Trans¬
may
weaken the
than
transportation product of the sub¬
agencies which become
we
and
it
be noted here that the solution of
sidized
transportation agen¬
may now consider
the
with
the last named of the three alters
of subsidy to
mediate
might
as
the subsidy problem by adequate
objective of the
plan is to assure a continuation of
private ownership and manage¬
principal
ment
integrated system
Commission
water and air carriers, which en¬
joy substantial subsidy. The rail¬
public expenditures of the makeroad department of each system
work type could be undertaken in
would constitute the greater part
the post-war period to relieve un¬
of the total investment, produce
employment. More sinister than
the greater part of the transporta¬
with its bearing on equalization that, from the viewpoint of eco¬
tion units, and earn the greater
of subsidy. Unfortunately the only nomic and efficient transportation
part of net operating income. The
description of the plan is that service and the probable effect on
remainder of the system net in¬
contained in the above quotations other large industries, is the prac¬
come would come from the oper¬
from the summary of the report. tical certainty that if the govern¬
ation of its subsidized agencies of
The railroad property to be pur¬ ment were to purchase or lease
transportation and the benefits of
chased or leased by the govern¬ railroad fixed property, and had
the
subsidy to
those
agencies
ment is described at one point as the power to dictate the manner
would flow to the integrated com¬
the "fixed plant" and at another and extent of post-war rehabilita¬
panies father than to the separate
point reference is made to "rights- tion and modernization, the ca¬
and independent individual agen¬
of-way and structures." It may be lamity of government ownership
cies.;"' \ ,■
assumed that the track structure would quickly follow. The Wat¬
The soundness of the theory
and bridges are to be included but kins plan then may be disposed
integration would bring
we
are
not sure about terminal of by the statement that it is a that
about equalization of subsidy de¬
and
station
buildings,
engine- wolf in sheep's clothing.
Having rejected the plan of the pends in large part on the equal¬
houses, repair shops and other
such buildings.
Nor is anything National Resources Planning ity in the distribution of the sub¬
said as t6 whether the work of Board as both dangerous and im¬ sidized agencies among the inte¬
and needed construction projects."
subsi¬
We need not consider the Wat¬
dized forms and would maintain kins suggestion from the social
its own railroad rights of way and or
unemployment relief
view¬
structures without subsidy.
point. We are here concerned only
share in the subsidy to the
cities,
counties
,
therefore, that the
subsidy to the several modes of the use of publicly owned trans¬
transportation is unequal in de¬ portation facilities, and differ¬
gree. No one can fairly find fault ences in methods of determining
with the principle that if govern¬ the costs of private and of public
ment largesse is to be bestowed facilities, Dr. Watkins suggested:
on
commercial transportation no
"Under existing investment
It
reimbursing
means,
(Continued from page 2141)
of
Thursday, May 25,, 1944
THE COMMERCIAL & FINANCIAL CHRONICLE
2166
ment
are
used
by
pedestrians.
of
inland
cyclistsj
The
improve¬
waterways
is
projects, irri-
Volume 159
Number 4284
'
•
gation, flood control', and'the pre¬
of soil1 erosion, and the
waterways are used by govern¬
ment
and
private vessels.
The
lighted airways are- used' to a
large extent, and the public air¬
ports to ' a small extent, by the
military air forces and are there¬
fore chargeable in part", to dia-
•
h
tional defense.
In all cases, there¬
fore, there
troublesome prob¬
lems
in
the
/ apportionment
OFFERINGS
BEATRICE
registration
of
tion
four
as
chase
Republic
M.
H.
M.
A,
.the
stock
for
the
of $4.25
the
the
shall
commercial
form
shares
may
the
offer.
exchange
Principal
un-;
in
Inc.
which
PRODUCTS, INC.
registration statement for 150,-
a
value.
of
underwriters,
issued
shares
and
of
par
100,000
the
to
public
shares
to
50,526
stockholders
to
without
registered,
offered
be
to
are
stock,
common
the
Of
shares
Colonial
be
Radio
Corp." Proceeds of the 100,000 shares will
be used as additional working capital. Filed
Jackson
Details in "Chronicle," May
Underwriters are Paine, Webber,
& Curtis, 29,000 shares; White,
Weld
Co.,
May 11, 1944.
18, 1944.
&
Estabrook
12.200;
Higginson
12,200J- Lee
&
Co.,
8,000;
Lynch,
Pierce, Fenner &
Goldman,
Sachs
&
Co.,
Merrill
1,700; Mackubin, Legg & Co.,
1,300;
Herbert
1,000; Van Alstyne, Noel
l'.OOO and Wyeth & Co., 1,000.
(100,000
shares)
May
23
ELECTRIC
VIRGINIA
amended
Electric
&
Service
Co.
plan
Co.
Power
filed with
Amended, plan
POWER
&
from
and
SEC
April
17,
1944.
each
(3)
share
of
preference
Vps
new Vepco $5
plus,
for the
one share of
'preference stock
dividends' in
crued
dividend
restrict
an
payments on
(plus ac¬
Vepco will
by difficulties is recog¬
These difficulties, however,
An earnon. the part of the govto overcome them should
'be made because the collection of
10 years
as
stock (par $1001 offered
May 19 by Stone & Webster and Blodget,
Inc.,
The1 First Boston Corpt, -Harriman
Ripley & Co., Inc. and associates.
preferred
Bonds
Offered—$23,0.00,000: first and
funding mortgage bonds, series D 3%,
fered
24- by
May
Stone
&
Webster
re¬
of¬
and
Blodget, Inc., The First Boston Corp., Harri¬
man Ripley & Co., Inc., Blyth & Co., Inc.,
Goldman,
Sachs & Co.
and
associates.
The:
bonds
awarded
were
to
the
■/•
May 22 on a bid of 102.2999.
PENN
POWER
CD.
bankers
.fV.
has
filed
a
registration statement for $12;500,000 first
mortgage- bonds,
1974.
Price
amendment.
to the
to
series- L, 3% due May 1,
the public will be filed by
the
let
gether with such additional' funds as may¬
be required, are to be used for the redemp¬
arti¬
cles in the series they have been
running in the "Financial Chron¬
icle."
be
Copies of this booklet may
had
to Mark
upon
request
by writing
care
of Schen¬
SEC's
tion
of
Rule
the
U-50.
Net
outstanding
proceeds,
$1Z;500,000
mbrtg-age gold bonds, series H, 5
on
1, 1944, at 105 and accrued interest.
April
May
1944.
28,
Details
in
to¬
F-l.
"Chronicle,"
awarded
and
Halsey, Stuart & Co
May
23; on .bid -of
,
BUILDING
maximum
a
of 2,370
Distillers
Corporation,
350
Fifth Avenue, New York 1, N. Y
CORP.
shares of
Georgian-Demipg Building Corp.
Address—Owns building located' at 53739
Deming Place, Chicago.
Business—Operating apartment building.
Purpose—Certificates
are
already
out¬
standing in hands of registered holders,:
it
is
proposed
to extend
trust for
the
seven
years from Nov. 14, 1944, with
tain amendments in the agreement.
103.6499.
Offered May 25
by Halsey, Stuart & Co.,
Inc., Otis & Co., Hornblower & Weeks and
associates at
104%
and1 interest.
•
-
5s
to
be
of
are
the
1,
20-
units
due
Address—100
F-l.
(5-13-44).
SUNDAY, JUNE 4
ROCKY
RIVER
Mass.
maximum of
a
Rocky River Apartments,
Address
River,
near
Business—Operating
ing.
Avenue,
to
price
and
First
Boston
S-l.
INC.—
6,713 shares
,
;.:
in
Boston,
-v...
the
of
Address—60
RADIO
KEITH
-
-
ORPHEUM
has
CORP.
registration statement for 57,337
6% preferred stock, cumulative,
$100 par,
convertible on or before' April;
11,: 1947, and 458,696 shares of common
stock, $1 par, reserved for issuance upon
of
Address—1270
Sixth. Avenue,
Holding
company
subsidiary companies
picture business.
engaged
Proceeds
—
'and
owned
ceeds
the
Underwriting
Goldman,
to
be
derwriters,
controlling
motion
in
by
the
We
the selling
OF
&
Co.
are
others
(5-17-44).
to
and
Brothers
principal un¬
be named by
below
or
dates
or
list
a
more
OIL
of
have
is
Martha
of
not.
of
in
of
L.
debentures.
for
to
sinking
The
interest
rate,
ma¬
consummation
of
the
proposed
of
Darby
Petroleum
of
Corp.,
into Sunray Oil Corp., and
mortgage indebtedness.
Okla.,
retire
Underwriting—Eastman, Dillon & Co., is
named
of
principal
underwriter,
with
names
others to be filed by amendment.
Registration Statement- No. 2-5376. Form
S-l.
Feb.
ferred
WEDNESDAY, JUNE 7
1,
(for
Pacific
March
non-cumulative series 2 preferred,
$100 per share.
par
retire
Details
Business—All of the business of the
com¬
except in the case of the acquisition
trucks
Curtiss.
owned
by
employees
1944.
by
De¬
'
1944.
INC.
$300,000
—
CO.
OF
"Chronicle,"
3V%%
share
first
due
for
Co.
of
in
1,
March
9,
CO.—15,000
basis.
No
underwriters
RAILWAY
has
filed
,:
...
1959,
Candy Co., an. affiliate and
of registrant, have been
company
from
its
will
first
..
Underwriting—None named.
Offering—Price
to
the
'
,
•„
public- $100
v'."'
*"
per
underwriter.
Details
,'./_
(.204.075 shares is $3.75 per share.
ditional
000 shares
prior
effective
named.
of warrants
of
common,
three
to
from and after the
registration statement.
years
date
of
Proceeds for working
New York
are
Details
VERTIENTES-CAMAGUEY
OF
general funds as may
be
mortgage
at
to
redeem
gold
bonds,
used
chase $1,663,500
of first mortgage (col¬
lateral). 5% convertible bonds of company,
idue
Oct.
owned by National City
Underwriters propose to ponor prior to closing and
1951,
1,
of
the 252,852 shares of
underwriters, interest rate and price to
public will be supplied by amendment.
1944.
Details in "Chronicle,"
May 11, 1944.
Bids for the purchase of the bonds will
be received by the company at 2 Rector
St., New York City, until June 5, 12 noon,
the bidders to specify
the interest rate.
the
are
previously
Price
from
Inc.,
Co.,
107
April
1,
1944.
Co.,
-
has
for
2,000
filed
un¬
accrued
N.
Y.,
make
on
up
such
the
Harriman Ripley
principal underwriter.
Details in "Chronicle,,"
common
and
Street
Railway
pre¬
ferred offer interesting possibili¬
Railways
•Memphis
Proceeds for
ties,
according
to
memoranda
issued by Bittner & Co., 80 Broad
a
shares
NATURAL
registration
of
$5
GAS
state¬
cumulative
preferred stock (no par) and 58,636 shares
of common stock
($5 par).
Holders of
common
will
Rails Offer Interest
1944.
NEBRASKA
INC.,
Inc.,
Gary
•
KANSAS
stock which
April 6, 1944.
Details in "Chron¬
purposes.
icle," April 27,
of
mentioned,
Filed Mar 29, 1944.
1959.
Chicago,
exclusive
common
the underwriters
GAS
NATURAL
series C, due April 1,
Republic
by
total stock to be offered.
&
has filed a registration state¬
$1,500,000 first mortgage sinking
construction
the
received
conversion, together with the 443,850 shrs.
INC.,
4%
Y.
vert these bonds at
Filed May 3,
NEBRASKA
CO.
common
Of. shrs.
registered,
443,850
are
outstanding
and
by the National City Bank, N. Y.
underwriters have agreed to pur¬
6%
the
of
Several,
The
under
SUGAR
shares
($6.50 par), U. S. currency.
'owned
$3,-
102 and. interest.
CUBA.—696,702
stock
Bank, N.
fund bonds
Burr & Co.,
"Chronicle,"
in
May 4.
from the
Proceds
to be offered for sale
-
capital.
principal underwriters. Filed
1944.
24,
An ad¬
is reserved against
to purchase 100,at $4.50 per share,
100,000 shares
the exercise
TERMINAL COM¬
&
and. use proceeds* as ad¬
capital.
A. C. Allyn &
Filed March
16,
in "Chronicle," March
23,
working
Inc.,
competitive* bidding requirements1 of the
Securities and Exchange Rule U-50. Names
ment
preferred
stock, of which 23,225 are being
the company through underwrit¬
180,850 shares by three present
Offering price to public on
to pub¬ ! stockholders.
registration statement
mortgage serial bonds
1944 due each June 1 from
series due 195-1,
CO.,
preferred
be used
will
of a maximum of 8,649
a
inclusive.
necessary,
'Central
v/1
and
ers
bonds, together with such addi¬
tional cash
ment for
cumulative
Proceeds
.
CORP.—
issued by
first
dated June* I,
bonds are
Bonds
common
shares
■
$3,000,000
567,700
1971.
STERLING ENGINE' CO. has filed a reg¬
istration statement for 304,075 shares of;
30, 1944. Details in "Chronicle,"
sale of the
6%
$100).
1944.
Wyeth
Filed Dec. 20,
"Chronicle,"
working, capital.
be
of
shares
(par
1944.
and
Calif;
common
stock (par $1).
Price
$30 per share.
1,717 shares are being
currently offered, to a group of. officers anc:
employees at $21.50 per share under a
separate registration and; prospectus,
Nei
proceeds. ($446,000) are to be used for
Filed Mar.
stock
mortgage
Feb.
share
-.,'.
■
the acquisition
Co.,
purpose of conversion)
loans and working
lic
to
>
exchange of $6 preferred of
Light & Power Co.
(sub¬
1944.
bank
of
1945
..
OKLA.—$1,-
preferred
$6,600,000
A
for
on
ditional
of
transacted directly with Curtiss Candy and
its subsidiaries!
•.
share.
amendments.
In exchange of shares and $575,000 will be
applied to retirement.of 5,750 shares of 6%
cumulative preferred of Sprague at $100
per share.
Company also plans* to issue
$3,250,000
face
amount
of
installment
v.';"/.OV..:/';;••
interest
Address—Chicago, 111.
parent
by
shares of Western Grocer Co. 1%
a.r
Name.1
public
29,
named underwriters.
derwriter.
value
certain
;
,
redeem first mort¬
cumulative
and
16,
15,000
stock
for
Cushmar
to
price
CARPENTER PAPER
for
stock
promissory notes
capital.
CO.,
EQUIPMENT FINANCE CORP. filed a
registration statement for 14,000 shares
of
v
,
an
invita¬
at competitive bid¬
Registration effective Jan. 10, 1944.
Filed Dec. 21, 1943. Details In
"Chronicle,"
(5-18-44).
pany,
filed
the
will be offered for sale
debentures;; series of 1943,
1951 and 11,400 prior pre¬
to
PANY
^
ding.
deter¬
Trust.
March
PRODUCTS,
shares
KANSAS
4%
on
.
5%
sidiary)
Issues
Cushman.
Allen
and
Filed
Proceeds
DALLAS
regis¬
a
$13,000,000
,
the
12
bidding
SERVICE
series
is
April
turity- date and: redemption provisions will
be filed by amendment.
Address—Philtower Building, Tulsa, Okla.
Business—Development of oil and gas
lands.
-V /
;/:*'■.
Offering—Offering, price to the public
will be supplied by amendment.
Proceeds.—The proceeds of the new fi¬
nancing is. to provide the funds required
Tulsa,
May
on
underwriters
$100)
Stock
convertible
due
for
1944.
1944.
bonds,
us.
A.
"Chronicle," April 6,
BEN-HUR
5%
of
share
a
April 27,
U-50.
of
500,000
whose
been
to;
Cushman
A.
underwriters
tails
that
Bryan
L.
amendments.
6
has 'filed
CORP.
statement
merger
rule
Southwestern
but
ago,
unknown
are
sale
'
TUESDAY, JUNE
for
on
preferred
the SEC proposing
competitive
PUBLIC
April 6, 1944.
fund
be
"Chronicle"
Company
of
April 6,
OFFERING
:
Lehman
—
with
SUNRAY
exchange \
number
and 5Vz%
Filed Mar. 29, 1944. Details in
present
for
and
pro¬
filed
tration
equal
an
exchange to
in
names
AMERICAN BAKERIES CO.—13,000 shrs
class B stock, (no par)*.
The stock of¬
1944.
price to the public
by amendment.
Registration Statement No. 2-5375. Form
A-2.
retirement by
of
1%, 6%
bonds, reimbursement of company for
funds used to redeem preferred shares and
reduction in V-loan.
Price to public and
;..v
days
offering
1943.
Offering—Offering
be
its
underwriters.
twenty
are
amendment.
to
Company plans
220,078 shares of 5% preferred
Proceeds will be used to
whose registration statements were filed
Atlas
the
receive
sale.
Sachs
York.
New
registered
sold
will
which
from
$100 per share.
effect the
gage
UNDETERMINED
trustees
,
6%
May
redemption
(par
fered
the
on
PLOMB TOOL CO.—$600,000 10-year 5%
convertible debentures
due
Jam
l,
1954.
.
proceeds will be received by
& Co.
shares
The
are
Corporation
share
a
a
Co.,
par
under
Registration Statement No, 2-5380. Form
S-2. (5-20-44).
of the 6% preferred stock
The preferred shares are issued
—
$2.66%
on
cash adjustshare on the
a
a
The
on
to
1944.
conversion
Business
and
noon
tion
Underwriting—F. Eberstadt & Co., heads
of
a
registered.
preferred
new
SPRAGUE-WARNER-KENNEY
MONDAY, JUNE 5
shares
for
basis, with
amendment with
Street, New Canaan,
.;■ r\
mined
stock,
preferred
Exemption from compeiitive bidding rule
denied by, SEC in opinion issued May 5,
F-l,. (5-16-44).
filed
stock
Details
Offering—Price to the public will be sup¬
and it is proposed to extend the trust
5%
Blodget,: Inc., and Harriman Ripley & Co.,
Inc., New York, are principal underwriters
a
Proceeds—Net proceeds from sale of 15,000 shares by the company are to be used
for general corporate
purposes.
Balance
seven years from Jan. 24,
1944.
Registration Statement No. 2-5374. Form
of
preferred
cumulative
amounting to $7.83
stock, the
Elm
plied by amendment.
for
6%
stock
shares of
Business—Owns the trade-mark "Kreml"
out¬
cumulative
and
share
or
in the United States and Canada, and dis¬
tributes two proprietary products.
hold¬
shares
share basis plus a cash payment to be filed
by amendment.
Stone
&
Webster
and
DATES
registered
7%
old
stock
regis¬
for
101,300 shares of
stock, par $1.
Of the total 15,000
represent stock to be sold by the company
and the remaining 86,300 chares to be sold
by present stockholders.
the list of
15,000
preferred
stock
($100
par).
Is offering to holders of its out¬
to Issue the
statement
stockholders.
registered
A,
stock,
public
common
Conn.
has
CO. has filed a registration statement for
220,078* shares of 5% cumulative preferred
Corporation.
SEMLER, INC., has filed
tration
Co.;
,
Rocky
already
are
the hands
B,
&
of
NORTHERN INDIANA PUBLIC SERVICE
(5-20-44).
R.
for
Beecroft, Cole
& Co., Winona, Minn,, 500.
Filed
April 25,
1944.
Details in
"Chronicle;"
May 4.
' :.
working capital.
Underwriting—Paine, Webber, Jackson &
Curtis
Chicago;
Neb.;
Tarras
>.
.
Co.
exchange offer will expire
20,
Underwriters are
5,750
shares;
Wisconsin
Co., 4,750; Morris F. Fox & Co,,
1,500;
Loewi & Co., 1,500; Bingham, Sheldon &
Co.,
1,000 all of Milwaukee, and A.
C.
Proceeds—For
apartment build¬
an
Purpose—Certificates
standing in
share.
per
Co.
share for
at
filed
has
...
Offering—Offering
Co.,
Trust
preferred.
as
Inc.
Building
located
Cleveland, Ohio,
—
.
Trust
Co., Topeka; Harold E. Wood
Paul; Rauscher, Pierce & Co.,
7%
Business—Research work.
of
APARTMENTS,
Rosset, Louis J. Borinstein and
Charles J. Young as trustees have filed a
registration
statement
for
voting
trust
certificates for
Brookline
&
Milwaukee
CORP.
con¬
of Lincoln.
ment
THURSDAY, JUNE 8
RESEARCH
of
First
are
their
com¬
collateral
of
sale of stock
costs
stock
series
stock of the Chesapeake & Ohio Rail ¬
on a basis to be filed by amendment
substituted
defray
stock, series B, the privilege of exchanging
con¬
pledged
to
Underwriters
Company
standing
registration statement for 50,000 shares
of common stock, par value $1 per share.
cer¬
Registration Statement No. 2-5373. Form
.
ley
convertible
notes
Proceeds from
used
MISSISSIPPI VALLEY PUBLIC SERVICE
a
$11
share.
cumulative
Registration Statement No, 2-5378. Form
(5-19-44), ,*.:
L.
tificates for
the.
to
associates-
of
Un¬
expenditures.
CO,
3-4.
out¬
Rosset, Daniel J. Brumley and
John T. Dempsey, as trustees, have filed a
registration statement for voting trust cer¬
ers,
The
shares
June
amount
1944.
Dallas;
Abilene, Kansas, and
Frank & Belden, Inc., Minneapolis. Details
in "Chronicle," April 27, 1944.
;
20-year
due
5s
face
trust
1950.
into
into
be
United
Registration Statement No. 2-5379. Form
GEORGIAN-DEMING
first
Filed
1,
a
will
St.
provided in the indenture.)
(5-13-44),
—Barnet
Sept.
11, 1944.
Bonds
Inc.
Merit, in
already
are
registered holders,,
to extend the trust for
from April 30, 1945, with cer¬
tain modifications in agreement.
Registration Statement No. 2-5372. Form
Bonds dref tbi be sold pursuant
competitive bidding requirements of
have prepared an attractive book¬
first
collateral
vertible
of
com¬
a
WEST
the
proposed
is
hands
to
common
with original proposal of $6,000,000period of five years.
Original plan
filed Feb. 28, 1944, details of which were
outlined in
"Chronicle," March 16, 1944.
Stock Offered—15,008 shares of $5 divi¬
over
dend-
•est effort
containing
year
of
amount
$19,137,000
26,
struction
&
company.
convertible
and
April
face
trust
1949,
years
will leave in surplus $11,-
extent which
pared
not insurmountable.
Schenley Distillers Corporation
both cases) ;
020,000 over a period of
; rounded
Available On Request
and it
seven
provides
original plan:
dividend
the allocation of joint cost is sur-
.
in
merger
receive
,will
of way and services,- The fact that
,
Purpose—Certificates
CO.—
of Virginia
Virginia Public
for
Vps preference1 $19 in cash
its way, and
the present competitive inequality
would disappear;
/. V
•
■;v'*'-./
outstanding and do not represent new
financing by the company.
••:,
notes;
pay
and
Mo.
standing
of
Wil¬
$105
Cruttenden
NATIONAL
building located at Euclid
West
Pine
Boulevwd,
St.
and
6%
portation would
a
and
Equitable Building,
$21,661,000
ing
collateral
as
filed a registration state¬
voting trust certificates relating
maximum of 2,548 shares of Parkedge
15,
Del.
Address—Owns
the
by
underwriters at $28.50 per. share.
in¬
charges would eliminate
-the subsidy, each agency of trans¬
Young,
Charles'J.
have
3'A9«
April
for
6,000;
the
user
and
Rosset,
due
May
shares
will be taken up
by the
underwriter? at $6.50 a share and offeredi'"
to the public at $7 per share,
Offering
price of the preferred to the public is
regis¬
a
$30,000,000
notes
Business—Investment
Beane,
8,000;
6,000
Lehman
carriers
by
highway,
waterway, and airway should re¬
fair
to
L.
for
share for each* four shares
a
Rights, expire
subscribed
Underwriting—To be supplied j?y amend¬
ment.;.:..
Offering—Price to public to be supplied
by amendment.
Proceeds—Net
proceeds,
together with
other funds of company, will be. used for
the redemption of all of the outstanding
bonds of Alleghany within 60 days from
the date of issuance of the notes, include
Corp,...'"•■
Corp.,
Vps preference, $24.50 in cash and for
'ernrfient
mington,
(or
CORP.—Barnet
Gross
trustees,
by
7%
are
William
ment
May
com¬
nized.
Address—704-5
way
THURSDAY, JUNE 1
PARKEDGE
held-
1954.
mon
April 29, 1944.
11, 1944.
Filed
"Chronicle,"
following changes
(1) $23,000,000 of 39c
bonds1 of Vepco
will be sold instead of
$24,500,000 of 3Va% bonds; (2) $9,000,000
of 2V*'% 10-year serial notes will- be issued
instead of $5,000,000 2V*%
5-year serial
the
the underwriters.
Filed May
Details in "Chronicle," May 18,
of
1944.
Kuhn, Loeb & Co. and Harriman
& Co.,
shares
526
An
imburse the government for their
share of costs of providing rights
;
cumula¬
Offered
mercial
1
$4.25
to
above
fairly deter¬
to
declaring
ant
& Co.,
rec¬
which
Government and
extent
the
of
1,300;. Stein Bros. & Boyce,
has
soundly supported facts and
states
Upon
preferred as may not be.issued pursu¬
W. Schaefer & Co.,
(3) the relative taxation imposed
on each.
The report on subsidies
•is likely soon to be released. We
hope that it will have definite and
dividual
of
exhausted.
Monell & Co.,
•been and-is being subsidized, and
mining the
May 31 unless
$4.25
preference
Putnam
& Co.,
3,100;
Graham, Parsons & Co.; 2,400; Whiting,
Weeks & Stubbs, Inc., 2,400; Brush, Slocumb
& Co.',' 1,700; Yarnafl & Co., 1,700; Minsch,
of the several
of / transportation, (2) the
-Federal
open
tive
Brothers,
[economy and-fitness
from
remains
business
shares
and for other corporate
Alstyne, Noel & Co., and
Higbie Corp. are named repre¬
1944.
pre¬
of the funds to effect
redemption the company may sell to
Ripley
users
Research, created under the au¬
thority of the Transportation Act
of 1940, was charged with the task
of making studies and reaching
"conclusions on
(1) the relative
ommendations
offer
to
shares
l-20th
and
SYLVANIA ELECTRIC
The Board of Investigation and
each
1
value 12 Va
augment
par
used
convertible
Barnet L.
ways.
which
such
cumulative
basis of
between
highways', waterways and air¬
in
$4.25
portion
derwriters
•
degree
of
be
a.
Details
a
forms
(no par). Com¬
plan
provide
formula that may be used to
determine a reasonably fair scale
;
shares of $4.25
exchange
to
be
Business—Operating apartment building.
registra¬
a
stock,
will
200,000
Van
M.
sentatives
*
•
.
of exchange effective the com¬
pany will call for redemption any of the
shares
of
the. $5
cumulative
preferred
which are not deposited for exchange.
To
be, it should be possible for
qualified experts in government
service, federal and state, to work
of
Inc.
preferred' for each share of
close
Carlton
11,
has
CORPORATION
for
statement
filed
has
CORP.
tration
at $6.50
mon
(5-19-44).
secured
the
capital
purposes.
Louis,
cumulative preferred
This
100,000
stock
the
filed
stock
$5
the
on
preferred.
until
may
charges for
has
100,000
the
of
stock
share
$5
of
right
shares
ferred.
tempted to find and allocate the
cost. Yet, notwithstanding the dif¬
ficulties, formidable though they
of
A.
CO.
for
shares of
128,531
has filed
out
Co.,
IIANNA
un¬
discretion of
statement
common
Proceeds
Avenue
•'-.•/
and interest by
C. Allyn & Co.,
100
is offering to holders of outstanding
pany
and those who have at¬
users
at
cumulative preferred
such
differences
working capital.
Chicago,
is
Inc.,
Byllesby & Co.,
statement
effective,
pur¬
.<*
and
tion
capacities?
of
:
Co.,
23
May
underwriters
ciliation
the
in part, bank loans and
Republic
Central
probr
Iems explains why there is ex¬
treme divergence of view and why
thus far there has been no recon¬
,
has
minimum of $500,000 will
a
repay,
Offered
statement of these
mere
with
1944.
be divided among motor vehicles,
vessels and airplanes of different
A
CORP.
BISCUIT
of
cents.
-
principal underwriter.
Filed May
1944.
Details in "Chronicle," May 11,
3,
highway maintenance? How are
costs, when finally determined, to
or
to
twenty
TUESDAY, MAY 30
of Etching Co. of.
wholly-owned subsidiary.
a
become
course
registration
a
shares
named
'highway department, be included
•weights
now
Central
fi¬
costs
acquisition of* factory and
buildings and additional trucks.
Registration Statement No. 2-5377. Form
ALLEGHANY
than
according to dates
registration statements will
BURRY
filed
stock
capital
remainder will be added to
From what date
unquestioned
Proceeds—For
warehouse
registration
less
2167
/
•
■
,
grouped
normal
1944, of the entire out¬
April 21,
on
used
be
Should
the, costs of .lighting and patrol¬
ling, and the administration of the
the
•
connection
in
Of the balance
cur¬
those
•
SEC.
"Chronicle,"
in
MANUFACTURING
standing
America,
should costs be computed?
'with
Details
,
incurred
whose
filed
less accelerated at the
for each
1944. Proceeds,
a
000
issues
were
ago,
working
What basis should be used
for amortisation?
to
registration statement for $1,000,000
15-year 4%
sinking fund debentures due
May 1, 1959.
A portion of the proceeds
will be used to repay a bank loan of $375,-
nanced by the sale of government
; bonds?
privilege
of
which
on
in
same on
from
on
«
treasury
other
1944.
DODGE
filed
Inc.
financed
1,
days
of
of
Should the treatment
income
tax
with
29,
4.
May
privilege? In the buildZing up of costs what should be
idone about interest on capital ex¬
rent
' *
,
NEW FILINGS
List
statements
subscrip¬
Holders
given
be
shares held to June
April
thereto in the nature of
expenditures
par).
funds, will
be used to
redeem on Aug.
1, 1944 ap¬
proximately
29,788
shares of company's
outstanding
$4.25
cumulative
preferred
stock at $105.50 per. share.
Glore, Forgan
& Co.; are principal underwriters.
Filed.
'a fee for
charges be the
will
'
a
shares
Company is
stockholders.
19
May
filed
100,433
the .shares for
common
together
weal, or should the commercial
carriers assume their full propor¬
tion of all costs, with possibly an
of interest
($25
;;//v
has
CO.
for
subscribe for one additional share
private gain in the service of
•transportation be looked upon as
a by-product of investments made
,and expenses borne by tye gov¬
ernment for the 'general public
penditures?
stock
offering
to
record
the public ways commercially for
/addition
CREAMERY
statement
common
initially
of
use
•
S-l.
Many of them call for decisions in
Should the
t1
*
■.
.
•-
No less difficult are the prob¬
lems in the determination of cost.
public policy.
•
Calendar Of New Security Flotations
joint costs along functional lines.
;
•
.
vention
are
THE COMMERCIAL & FINANCIAL CHRONICLE
•
■/
stock of record May 12 are offered
right to purchase:
one
share
of com¬
New York City.
Copies
memoranda, into which
are' incorporated
news of recent
developments in
the situations
,and earnings,, may be had from
Street.,
of these
Riltnpr
Rr
P.n
nn
rpmipsi.
.
Thursday, May 25,
THE COMMERCIAL & FINANCIAL CHRONICLE
2168
REMEMBER...
Teletype—N. Y. 1-971
HAnover 2-0050
Firm
The Hecht Co.
WE place the finest in trading facilities,
CUBAN SECURITIES
Merrimack Mfg. Co.
expeditious execution of orders, wide
dealer
contacts
and private wire
connections
AT
;
;
PARL marks & cp- INC.
service for trading in
your
O VER
FOREIGN SECURITIES
-
SPECIALISTS
"B"
Axton-Fisher Tobacco
SUGAR
RAILROAD
THE
-
M. S. Wien & Co.
COUNTER SECURITIES
(Actual Trading Markets, Always)
Members N.
New York 4, N. Y.
50 Broad Street
England Pub. Serv.
New
Trading Markets
GOVERNMENT
1944
Y. Security
Dealers Ass'n
N.Y. HAnover
Teletype N. Y. 1-1397
25 Broad St.,
AFFILIATE: CARL MARKS & CO. Inc. CHICAG0:=-==
2-8780
Kobbe, Gearhart & Company
On Governments".
"Our Reporter
By DONALD MacKINNON
\'.;v
New
York
philadelphia
telephone
•f
rn '
■
Association
Y O R K
N E W
new
••
v- v.
Gary Railways Inc.
5
Common
Teletype
Bell
telephone
Enterprise 6015
2-3600
REotob
//•..''
.
Dealers
Security
STREET
NASSAU
45
■*.
(Mr. MacKinnon has been kind enough to act as guest writer this
week.
As is true of other contributors, the opinions expressed by
Mr. MacKinnon are his oum and do not necessarily reflect the views
INCORPORATED
,
Members
york
1-576
Memphis St. Railway
Preferred
of the Chronicle.—Editor.)
May 8 the Ways and Means
On
Committee reported a bill to
limit of the public debt from
increase the statutory
Electronics And Television In
$210,000,000,000
The Treasury had previously requested an in¬
crease of the limit to $260,000,000,000.
The Administration thus
yielded to Republican demands for a slash of $20,000,000,000 from
the originally proposed new ceiling. ...
$240,000,000,000.
.
.
.
to whether the reduced
80 Broad
has caused
great acceleration of research
and development work in radio
and
the
ultrahigh
frequencies
"The
Treasury
figure would be acceptable to the
and Senate subsequently passed
the Doughton bill
It is alleged that Representa¬
for the Republican minority of the
until March 31,
1945."
.
.
.
.
two
reasons
unexpended funds:
available
in the interests of
security.
But it is not
secrecy
.
.
.
,
correct, and the war does continue for another year, the require¬
Treasury may decrease. . . ..
ments of the
...
.
longest term taxable
FM stations
is
can
the
air.
The
fact
tions
.
Broker-Dealer
Treasuries
Personnel
should
be
Canadian Securities
2148
Mutual
a
W. T. BONN & CO.
120
Broadway
New York 5
Telephone COrtlandt 7-0744
Bell
Teletype NY 1-886
extremely
be
deferred
on
demands
developing
sets,
that
market
industry
for
busy
to come catching
years
the
for
up
radio
great
new
is opening,
FM
and
beginning to make television
available
to
135,000,000 Amer¬
icans."
Chicago Bond Traders
Appoint Directors;
Annua! Spring Outing
CHICAGO, ILL.—At a recent
of the officers of the
Bond
Traders
Club
of Chicago
meeting
Utility
....
Markets—Walter Whyte
.
,...2144
.
.
the
J.
Conlan
of
Allen K.
&
Sparks, F. A. Carlton
Co., is Program Chairman.
growth of radio
Television gives
to public attention.
George J. Bosarg With
Scharff & Jones, Inc.
profits taxes will be reduced.
.
.
.
Senator Walter F. George, Chairman of the Senate
ORLEANS, LA.—Scharff
&
Jones, Inc., Whitney Building,
announce that George J. Bourg is
ndw associated with them
South
Louisiana
as
their
representative.
Mr.
Bourg
was
formerly
with
White, Hattier & Sanford and the
Whitney National Bank.
.
Our Recommendation for
Government
May
and every
market has behaved
We expect it to continue to do so.
.
.
very
well indeed.
Some selling of
,
month until Victory
War
Bonds
par¬
is to be expected in preparation for the Fifth War Loan, but we
Securities..............2142
.2153
Peter
the years
feel that strength in such issues will develop about the latter
.2143
Securities
with
tially exempts by Mutual institutions during the next few weeks
2159
2144
Securities
Security Salesman's Corner
Says
tremendous
after it was first in¬
troduced.
Radio had
a
vitality
that offered the kind of new in¬
terest and excitement that gets
in
What with invasion jitters, and in the face of the Fifth War
Loan,
Governments..... .2168
Reporter's Report.
Tomorrow's
will
the
PRESENT MARKET ACTION
2153
Reporter on
Estate
FM
on
of televireminded of
made
Hornblower & Weeks.
period, but does not see how there can be any reduction in the fed¬
eral budget for at least a full year after the war. ...
i
Real
some
projection
any
special Post-War Planning
Committee, said that any reduction in taxes depended largely upon
the federal budget.
,
He admitted the possibility that the fed¬
eral government could operate on a $20 billion dollar budget, and
that on that basis, taxes might be reduced by about 40%. . . . He
stated that a reasonable and fair tax is the hope for the post-war
2163
and Notes
Funds
Railroad
now
great relief
excess
On May 23,
.
Public
"In
vision's future, I am
Finance Committee and Chairman of the
Items.... .2163
2167
Our
the war, television was so far
advanced that if was
bringing
.
Page
■
Calendar of New Security Flotations
Our
radio-electronic
"The
should
NEW
and Insurance Stocks.........2150
Municipal News
Cent, of Ga. Mobile 5s, 1946
the
But most
emphatically, we do not believe that any important changes will
be effected until after the war, or that will materially alter the
privileges now enjoyed by partially exempt Treasuries.
.
.
INDEX
Tennessee Products
Stand. Coated Prod, Pfd.
be licensed
that
.
Pressurelube
many
make it possible to license several
thousand more broadcasting sta-
premiums during post-war
\ -v
that
than the 900 AM stations
.
Bank
in
to
equally impor¬
an
consideration
more
the prices
Eastern States Pfd.
receivers
.
"Then, too,
tant
Changes in corporation taxes would obviously affect
of partially exempt Treasuries. . . . It is probable that
corporation taxes will be changed for simplification. . . . It is
.
FM
for
mand
/:
^
will continue to sell at par or at slight
years.
developments which should, there¬
fore, result in a tremendous de¬
-
POST-WAR PRICE PROSPECTS
;
be
popular
more
of network stations that
possible that
:
would
and air navigation
sea
and the period of adjustment which must follow over an
the
chains.
point where new FM transmitters earning power of the well-estab¬
lished radio companies.
can be built.
-
Everyone, in one way or another, is vitally concerned with the
possibility, however remote, of any decreases in Treasury require¬
ments, for obvious reasons. ... We are not attempting to attach
any significance to Mr. Doughton's statement referred to in a fore¬
going paragraph. . . . We are not concerned with the political as¬
pects or the implications of this legislation as such. . . . But every¬
one of us must be concerned with this or any legislation that may
affect the continued stability in market values of Treasury obliga¬
tions both during the time up to the successful termination of our
even
Radio set owners
benefited by all these
tional
with
better service—one
appeal.
Un¬
questionably television will make
a great place for itself and I
see
no
reason why, when the stand¬
ards are set, television should not
demonstrate as great and as ro¬
mantic a story of growth as radio.
far
apply for FM transmitting licenses
to be ready for post-war.
This
simply wish to point out that, even though Mr. Bell's assumption is
that
through
public
the
to
possible development of addi¬
even
an
they lieve much more rapidly. The Valiquet & Co.
y-..
The Annual Field Day of the
significant fact is that the rev¬
enues
from
television, whether Club will be held on June 24 at
new
in
policy will have very far- they become large immediately the Mohawk Country Club
Guests are wel¬
reaching effects as soon as the after the war, or over a period, Bensenville, 111.
come.
Reservations
should
be
material
situation
eases
to
the will add further to the proven
ers
.
believe
the
Teletype
NY 1-492
BOwling Green 9-2590
the following were appointed to
This whole picture was improvements."
"The rate at which television serve for one year on the board
radically changed in January
will
Richard W. Sim¬
the
grow in the next few years is of directors:
major broadcasting
chains announced an entirely new somewhat a matter of conjecture," mons, Lee Higginson Corp.; Jules
policy of making their top-hit Mr. Gubb continued. "Some Fellegi, Farwell, Chapman & Co.;
programs available to the FM au¬ groups think it will progress Robert B. Krell, Bacon, Whipple
dience and suggested to the own¬ rather slowly at first, others be¬ & Co., and Charles G. Scheuer,
spend that amount through June 30, 1945.
Currently the Treasury deficit is roughly four and one-half
billions less than it was for the same period a year ago.
.
We
indeterminate number of years.
make
St., N. Y. C. (4)
Telephone
when
the War Department will
We
...
limited.
\
f
further important .effect
broadcasting may be to
more
national
programs
not too enthusiastic pleasure' and enjoyment to thou¬
about FM," he continued.
"Only sands of receiving set owners.
a few FM stations, mostly of low
Developments growing out of the
power, were on the air, and the vast electronic research of the war
number of FM programs was very period will result in even further
given for the existence of the .huge
One, over estimates last year regard¬
are
FM
plications may result from these
scientific advances. Much of the
work is still surrounded by war¬
Gubb'said.
ing the size of the Army, and two, the War Department did not spend
as much as was anticipated originally.».
One may wonder whether
two wars,
"One
ago, we were
/
,
BALANCES EXPLAINED
.
able.
early to foretell
what revolutionary peacetime ap¬
portant in the post-war years, Mr.
"Until a few months
Congress a request for
$33,607,000,available to
total of $49,283,000,000 through the fiscal year
the War Department a
ending June 30, 1945.
many applicants be¬
of the limited number avail¬
down
ing
cause
post-war period."
The greatest application of all
for electronics is television, Mr.
Gubb
said. "Television provides a
In addition to the normal re¬
placement demand for radio sets, new kind of service to the pub¬
FM will become increasingly im¬ lic," he pointed out.
"Even prior
for the current fiscal year amount to
If passed, the new appropriation would make
At least
memoranda
and, in many respects, profound¬
ly change our ways of life."
.
May 10, the President submitted to
War Department
.
fifteen years
have
been
of
safety in
$15 ,676,000,000 in new appropriations for the War Department for
the fiscal year beginning July 1, 1945. . . . As of that date, figures
■available indicated that unobligated and unexpended balances of the
amount of
or
work
hope and believe that
electronics will make for greater
Means
Committee, made a statement to the effect that the increase of
the public debt limitation to $240 billions will be sufficient "in
the opinion of the Committee tt^cover necessary public debt is¬
,
ten
too much to
Representative Doughton, Chairman of the Ways and
.
research
national
in power
replied that this Administration would not be
then to make such a request. ...
.
us
of
time
...
Committee
000.
that
tell
"It is still too
in the national debt limit to $240,000,-
ther increases in the debt limit.
On
that our technicians
so
Communications Com¬
mission, which has had the dif¬
ficult job of rationing the avail¬
able number of licenses and has
had the unpleasant task of turn¬
the Federal
since Pearl Harbor.
House
tive Harold Knutson of Minnesota,
sues
war
compressed into the thirty months
...
which provides for an increase
;
much
—so
-000,000. . .. Certain political implications were emphasized when, it is
reported, Representative Jere Cooper of Tennessee, for the Demo¬
cratic majority of the Ways and Means Committee, warned that the
Roosevelt Administration would be back in January asking for fur¬
;
present
a
would be all right with us," but that a request for a still
larger ceiling would be made early in 1945 if the higher rate of war
expenditures continues. . . . Mr. Bell also said, "We would not need
this new limitation if the war should end this year. ... The request
is based on the assumption that the war will continue another
The
our
Bittner & Co.
(Continued from first page)
of the Treasury Daniel W. Bell,
said that, "It
year.
incorporated in
The Post-War World
.
answering a
question by Representative Charles S. Dewey, Republican, of Illinois,
Under-Secretary
:
developments—earnings
.
.
as
Recent
of June or the early part of July.
.
.
.
sell off slightly because of exchanges
|
j
,
.
part
Certain taxable twos may
into the new 2's of 54/52,
but. any such declines will be temporary, with advances to follow
which should carry most 2%.issues to new highs prior to the
end of 1944.
...
T..
'
>
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