The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
ESTABLISHED 1S39
room
periodical
library
general
*
,
'
^rr
•
-
illTU
Reg. U. S. Pat. Office
Number 4910
171
Volume
New York, N. Y.,
EDITORIAL
Our
is
clear that the President intends,
now
able, to have the
far
so
President, United States
1950 election campaign duplicate
had
which the Democratic
party will fight out the
paign across the country. So far as Mr. Truman
can make it so, it will be a replica of the 1948
I
want
to
talk with you
reasoned
and
-
problem that
non-political
on
the sub¬
temperate,
non-political
wholly
a few guardedly kind
big business, the Presi¬
dent pointed out that—great and suc¬
cessful as this economic system of
has been—it still is not
ours
as
he—or
as any
of
us
is
not
and
good
as
for that matter
—would want it to be.
it
He said that
providing jobs for all the
who want
work, and
that—if it is ever to provide full em¬
ployment—more new businesses, and
more small businesses, must be estab¬
men
lished.
Benjamin F. Fairless
women
He
recommended
therefore
that
Congress pass legislation de¬
signed to provide these new, small businesses with
capital and with technical assistance.
warrant
support from the thoughtful citizen with
the good of his
country thoroughly at heart.
Now
Spokesman Now
I
have
officials set out,
ment
Up to this moment, no candidate and no party
official or group of
party members or officials
with a clear mandate to
speak for the Republican
r
Continued on page 28
of
our
that
noticed
whenever
My subject is "The Business
the outlook for
our
government
these days, to be helpful to some seg¬
they think almost automatically
economy,
♦An
address
of
Mr.
Progress sponsored by
Mass., May 18, 1950.
FINANCING
IN
THE
Continued
;
Fairless
the
at
Boston
on page
won't
we
OFFING—For
a
during that period.
business
a
I
And
won't
As
I
it,
see
In that event
outlook.
military out¬
have
a
subject.
Personally I don't expect Russia to
start the third
world
war
My
soon.
primary reason is that Russia now
has only a fraction of the basic in¬
dustrial strength we have. So far as
I
can tell, her basic steel producing,
capacity is less than one-third of
It is less than one-fifth of tV
ours.
combined
capacity
of
the
United
States and Western Europe. It is my
observation that superior industrial
strength is required
old model
modern
bombs,
Lit,
hydrogen, are going to
There is another eco¬
why I expect Russia to
or
change that.
nomic
win
to
believe atomic
I don't
wars.
reason
Dexter
M.
Keezer
defer the
she
is
shooting phase of World War III. That is, that
apparently gaining on us in industrial strength.
As I have noted, Russia now has far less basic industrial
capacity than
••
•
we
do.
But,
far
so
as
v
'
26
At
'
I
tell, she is
can
i.
»
Continued
on
page
22
the
Mid-Century Celebration of
Chamber of Commerce, Boston,
complete
Now
page
Stone & Webster,
have
Outlook."
immediately ahead is fine.
the proviso that the Russians don't
There will simply be a
look.
*A
May
financing operations turn to our "Securities
months
start World War III
.
.-•i
the
That is always with
same
After saying
.
Assuming absence of shooting war, Mr. Keezer predicts
high business activity during balance of year. As
constructive elements, he cites great demand for auto¬
mobiles, furniture, refrigerators, television sets, and
homes. Asserts plans for new plant and equipment are
being revised upward. Maintains business enterprise's
present primary job is to cure "the creeping cancer of
unemployment."
very
words about
intention of undertaking
NEW
tax laws
vein that I propose to comment upon
it.
as
No
a
exposition of his views
ject; and it is in this
prophet. We shall, however, from
in the past, venture opinions as
to the degree in which candidates for office, and
perhaps most particularly the opposing parties,
time,
today about
Company, Inc.
found
are
reasoned,
.
the role of the
time to
be
can
McGraw-Hill Publishing
President Truman discussed in a special
message which
he sent to Congress two weeks ago—a message on small
business.
It was a temperate,
campaign—with such variations as the existence
of a Democratic Congress renders necessary. Will
the .President's major opponents prove more ef¬
fective this time, and how will they endeavor to
reach an objective so devoutly to be wished?
Of course, time only will tell how effective the
opposition will be. Personal opinions as to the
probable outcome will doubtless be expressed
meanwhile, but in light of the final results in
1948, we are certain that there will be a general
tendency to withhold forecasts, permitting the
final outcome eventually to speak for itself. At
no
America
Federal
impeding business
investment and hamstringing venture capital.
Attacks
rulings of courts and holds judiciary is usurping functions
of Congress. Concludes we live in a
legalistic merrygo-round in which not even lawyers can figure out
"which end is up."
President's recent non-political whistle-stop cam¬
have
of hodge-podge
array
guilty of law violation, Mr. Fairless contends
permanently removed by the general tenor of the
we
vast
and government business controls
coming political battles this autumn, that uncer¬
tainty should have been quite definitely and
any rate,
under
statutes, every businessman in
doubt about the lines along
any
By DEXTER MERRIAM KEEZER*
Steel Corporation
Director, Department of Economics,
Asserting,
.
If anyone
Business Outlook
By BENJAMIN F. FAIRLESS*
he
Copy
a
The Glowing
Anti-Trast Laws
as
battle. Does the opposition appear to promise
more effective strategy?
,•
the 1948
Price 30 Cents
Hodge-Podge of
As We See It
It is
Thursday, May 25, 1950
record
of
talk
to
the
Cleveland
Management
Clinic,
Cleveland,
Ohio,
1950.
16,
forthcoming corporate
in Registration"
section, starting on
38.
State and
Inc.
Our
Current
Company,
Report
on
550 Branches
this
Municipal
with its diversified
interests including substantial
Holdings in the
dustry, is now
natural gas in¬
R. H. Johnson & Co,
available.
across
Established 1927
Canada
Bonds
Monthly Commercial Letter
!
To
receive
a
copy,
White,Weld&Co.
40 Wall
upon request
,
please address
Department F. C.
INVESTMENT SECURITIES
64 Wall Street, New York 5
Street, New York 5
Albany
Chicago
OF NEW YORK
OF COMMERCE
Scranton
Providence
Head Office: Toronto
Williamsport
Wilkes-Barre
Boston
CANADIAN BANK
Harrisburg
Buffalo
Bond Dept.
Springfield
Washington, D. C.
Teletype: NY 1-708
Distributors of Municipal
CANADIAN
BONDS & STOCKS
New
VANCK,
Analysis
Ill
authorized dealer* or
SANDERS A. CO.
Goodbody
OTIS & CO.
Established
1899
Los
Angeles
Grporatioti
115 BROADWAY
New York
Chicago
Denver
Dallas
Cincinnati
Columbus
Toledo
Buffalo
*
NEW YORK
CHICAGO
Teletype NY 1-702-3
upon
request
Members New York Stock Exchange
5, N. Y.
105 W. ADAMS ST.
>
England
IRA HAUPT&CO.
and
40 Exchange Place, New York
CLEVELAND
Chicago
Doxmion Securities
MEMBERS NEW YORK STOCK EXCH.
BOSTON
New York
& Co.
ESTABLISHED 1891
(Incorporated)
Devonshire Street
NEW YORK
Company
bonds
and
CITY OF
Northern
Corporate Securities
P'ospectus from
THE
San Francisco Loo Angeles
Stocks and
Underwriters and
NATIONAL BANK
Agency: 20 Exchange Pl»
canadian
Massachusetts
Department
THE CHASE
OF
IS etc York
Seattle Portland, Ore.
investors Trust
Bond
THE NATIONAL CITY BANK
PHILADELPHIA
BOSTON
Troy
TIE
WHitehaU 4-8161
other
111
Principal Exchanges
Broadway, N. Y. 6
WOrth 4-6000
Teletype NY 1-2708
Boston Telephone:
Enterprise 1820
%
/
'
2
(2150)
The
MARKETS
each week, a different group of experts
and advisory field from all sections of the country
in the investment
Toledo Edison
*
Philip Morris
Cities Service Rights
Kirchofer
New York Hanseatic
T,
j.,,.
,
would
It
be
1920
of
all
for
York 5
funds
have
some
is
pS
Since 1917
in
others
think, how-
I
Exchange
York Curb Exchange
NEW YORK 5
Tel. REctor 2-7815
*»
m
o rn
American Air Filter Co.
n
25 Broad St., New
Mobile, Ala.
Ferris, New York
ler, Crary &
Eastern Util. Asso.
(Page 37)
City.
To
moi
t
•
„
Incorporated in June, 1931, Sea-
Com. &
Seatrain
mind,
my
is
from
by
ports
utilities.
and
from this
is
It
last
Those
which
companies
gaged,
BANKERS BOND ^
™
are
en-
will be engaged, in the
or
transmission of natural gas appear
to
Flonr, Kentucky Home Life Bldf.
2, KENTUCKY
LOUISVILLE
Bell Tele. LS 186
risk
of
weighed
\
by
,to
seems
the
be
out-
potentialities
U. S. THERMO
for
almost unlimited market
an
natural
in many sections
country which do not now
of the
CONTROL
have
this
gas
fuel
and
also
in
areas
being served where the supply is inadequate for all potential
now
Request
Natural
users.
while
s
gas
unlimited
not
reserves,
would
ap-
pear
to be ample for the consump-
Uon
which
be anticipated
can
this time.
-
,
panies
in
this
field
at
-
While it is true that most
:
:
the
Teletype BS 259
Telephone WOrth 4-5000
of
sale
bonds,
have
thus
raised
creating
stocks with considerable
common
f leverage there is probably
and
Company
,
—A high leverage speculation,
selling at close to
six year low—
risk.
less
with
-
The
regu-
latory commissions have consistently recognized, the need for
such companies
to earn a fair
I. V. MANGANARO CO.
The combination and
rates.
STANLEY L. ROGGENBURG
Tel. HUbbard
4, N. Y.
Tele. NY 1-2916
York City
New
Enterprise 2904
Hartford, Conn. Enterprise 6800
Open End Phone to New York Canal 6-1613
and
1947.
Gf
the
"Texas"
occurred when
war
v£T<T
A
nitions
submarine
East
an
Alexandria,
for
bound
\ '
by
lost
123
n
New York City
have
vears
v
e
all
natural
re-
sources
Central
the
Iowa South. Util. Com. & Pfd.
very
for
Alexan-
Kentucky Utilities Com.
Puget Sound Pow. & Lt. Com.
agricultural
dia, via the Cape of Good Hope,
Red Sea and Suez Canal.
When
products
loaded
and
Rommell
set
out
the vital
struck at
spot
which
world
Stanley
Southwestern Pub. Serv. Com.
Roggenburg
the
needs
and
must
have-
(2)
V0GELL & CO., Inc.
you
excellent
Marshal
aid
Montgomery with
the-diversification and an
American tanks, artillery, return on your investment;
of
The
etc
Transportation
Water
corps said that "The Texas
and
Maine Power Com.
in-
valuable eluding
minThe "Texas," lying at erals, oil ores,
was
hurriedly metalsand
port,
action
PH 771
Tel.: BOwling Green 9-4818
the
t h
n
Phila. 9, Pa,
Bell System Teletype
States
100
«
Securities Dealers
PEnnypacker 5-2857
n
a
National Assn.
South Broad St.,
Phila. Telephone
n't h
rir»it in
n^lt in
IhnUeH
Henry B. Warner & Co., Inc.
Members
are
thVt
convoy carrying mufrom
the United
States
Egypt
s
/1 v
the Ger-
Alexandria,
from
far
Election'"
during
Army under Marshal Rommell
had~ advanced
in - North
not
this
for
sons
man
Africa
Issues
:
i®rly, the and Bolivians. My rea¬
Brazilians, Peruvians,
in
March,
interesting experience
Seatrain
Light Common
the
are
Mexicans
functions
An
the
Allan Wood Steel Com. & Pfd.
Philadelphia Transportation Co.
securities
favorite
My
their
into
entered
Harshaw Chemical
(South American Bonds)
r
1946, four were recon-
m
peacetime
(3)
possible
They have Very large
capital gains - potential;'; (4)
Montgomery started Rommell out
bonds
0f Africa."
because
pipe lines to raise
expansion largely
for
the sale of bonds
basis very favorable to the
through
at
are
the
an
markets
are
j
37 Wall Street, New York
WHitehall 4-2530
5
Teletype NY 1-3568
The
explosive
Natural
gas
stage
thin,
so
Bought—Sold—Quoted
Not
-
Hrf
■
Ki"
16^
tion, and (o) They are
1948
9.701.075
2.534.267
26rt
lent
1949
9.486.355
2,548,670
26^
America is the
of
Z\?m & COMPANY
Tel. CG 451
the
and
ana,
at
at
Dresent
present,
another world
8™
now
e
limited only by the
Financial condition
of Seatrain
is strong, with S8.200.000 cash and
expanded.
1949.
governments
on
Present
hand
dividend
Dec.
rate
31,
of
the stock of Transconti-
Pipe Line Corporation;
power, leaving
payments.
30%
of
room
for increased
earning
Capitalization:
Bonds,
-
$1,297,-
^finn^
^ excess profit taxes that
necessary
to
finance
N. Q. B.
OVER-THE-COUNTER
a
countries
would
redeem
^
.
^enntin
their
honrff
c
P?k
securities have
i^ed T 4e
nasl
a
terv ?L "'
'
y
"
reputation, due to the instability of their governments and
INDUSTRIAL STOCK INDEX
11-Year Performance
35 Industrial
of
Stocks
..
.
-BOOKLET
ON
REQUEST
T
their treatment of foreign
capital
With primary e m p h a s i s on 50e per share per year is less than and investments.
growth, I would select from this
nental Gas
SAV IKGS
war.
major
to engage in the coastwise trade
users.
In recent years, however. It must be borne J^min<i that
the inconvenience to which users service to the Gulf Ports is to the
of coal have been subjected, as a fastest
growing section of the
result of strikes, has stepped up United States, i.e., Texas, Arizona,
this demand to the point where California, etc.
industrv
South
continent, and
Wo"wmVaTn?'certafnf^L^
appear
capacity of present facilities and
the speed with which they can be
..
r
r-T.
c.
r.u,
208 =
Soutn La Calle St., Chicago 4
excel-
train.service is:mach in demand
years'
.
on request
one
war.
American Securities
encounter
are
against
tbfn°."L°"e:ibat cof'd possibIy
would
"a^ nuXSof p=
sales
hedge
from the last
operations that Sea-
It
com¬
cleanest,
b,0£dSn£alled f°ran
$918,891
few
the
-
$5690287
by shippers. At the annual meet- jT.ta _war
ceitamly your
recently the stockholders dlvl<*ends and possibly some infuels.-. It-m8 neia rrcenuy me siocKiioiciers t^Gst Davmp t
^ °
c "V
follows that it would voted authorization to the direcdne
an
increasing demand tors to have two new vessels built America« securities, due to enor-
efficient
emcient,
naturally
BONDS
is
Gross
-
1947
a
stockholders.
cheapest
Mexican Railways
on
V,
c
these conditions will
the
most
most
Dealers Inc.
Tele. BS 142
2-5500
Portland, Me.
Penna. Power &
Partner, Roggenburg & Co.,
ration 0f the steamships from war
con¬
tinuance of
mon
Tel*. RAndoiph &-4o±.j
Securities
since Seatrain's return t0 their due t0 the repatriation by their
as MJtsR.'irss— »««=•««•»
>,$£.
mitted to a policy of low interest net Pro^its have been as follows.
of dollar bonds to replace foreign
funds
Analysis
of
the11™ °S Treasuw^^artm^nt
enable
Tel. HAnover 2-3618
Assn.
sssrt-rsnss
Analysis Upon Request
50 Broad St., New York
Nat'l
75 Federal St., Boston 10, Mass.
no in- 0f Alexandria, he was stopped by South American bonds give
dustry where the leverage factor
can
be applied more profitably
Baltimore Transit
Quoted
—
Philadelphia Electric Common
come
supplies.
com-
the major part of their funds from
148 State St., Boston 9, Mass.
7-0425
Sold
J. B. Magnire & Co., Inc.
Members
Lines,
Inc.
period from 1934 through 1941
showed increasingly large net in-
of service
It is well established that there
Seatrain
the
the
ditioned
exists
of
stock
past
to provide
me
ment
N. Y.
ital
During World War II, the
the best vehicle vessels were requisitioned by the
tor
for
participating • in ; this
participating-in
mis
last- Q. s. Government, under charter
fast- *
growing industry because the ele- hire
Upon return t0 the corpo-
Incorporated
Tel. CA.
best qualified to judge, the conditions which have existed for the
several years in Cuba are
industry that I would select my bound to * change for economic
security for the future—one of reasons if for no other. .
those in the natural gas industry.
Although incorporated in 1931,
Preferred
on
—
an
train operates five
moved
Bought
($4
shares
1,373,552
Convertible
Atlantic City Electric
the more important are
the chemicals, airlines, television
Kentucky Stone Co.
Analysis
branch offices
our
tf
Among
Common
Long Distance 238-9
Birmingham, Ala.
Dan River Mills Common
American Turf Association
1st
NY 1-1557
New Orleans, La. -
Authority Bonds
Tuller, Partner, Tul-
—Robert N.
38 enterprise that can retain for
net profit about 25% of its gross
*
Exchange
Exchange
York 4, N. Y.
HAnover 2-0700
Common
5%
York Curb
Direct wires to
railroads, is fast and efficient and it is dif.
Anderson
ever,
that without moving the freight from fjcujt
diSCOver smother business
most
of
us
cars.
Four of these vessels at from whose gross a net income
would
select
a
security
vvhich present are serving two major
be obtained> comparable
to
offers maximum growth with a routes, New York-Texas City and
that of Seatrain
' ■
'
minimum of risk if the security is New York-New Orleans. Seatrain
As of Dec. 31, 1949,
the Sun
to be purchased for the future.
has suspended, temporarily, servOil
Company
owned
199.500
TKnvn
v'
im/Titefrltte
ina
in
PllKo
1713
TTjIVJinPI
fillf* "t*0
Members
Members New
Chicago Transit
.
the
objec-
'v i-;''
■
Members New York Stock
Stanley
expan<iing situation; rates paid by
steamships es- shippers are competitive with, or
tive is capital pecially designed for transporting
lower
than
those
{or
all_rau
appreciation, by water, freight brought to or
shipment
The service rendered
frfeP0NNELL&f0.
.
—
upon
main
120 BROADWAY,
o r
^
Steiner, Rouse & Co!
(Page 2)
income, such a business is well
safety and in- worth examining closely.
This
come
with Srowing,
labor-saving enterprise
minor
e mis
the
Seatrain Lines, Inc. a
357; stock
phasis upon unique form
of water - borne par).
growth, while freight car transportation,
Rights & Scrip
New
j
emohasis to be
Specialists in
y
*
••
(Seatrain Lines. Inc.)
necessary
m a
Bonds
Roggenburg, Partner, Roggenburg & Co., New York City.
riiv
.
it
cases,
Y.:
Frank
South American
«*• W. Gould & Co., New
*
Bought—Sold—Quoted
C. (Page 2)
Seatrain Lines, Inc.
Cannon, J. TTT Gould & Co., New
W.
~
York City. (Page 2)
FRANK Y. CANNON
-V
•
Arnold Associates,
Inc., Raleigh, N.
individual
m
w
;-v i
Vice-President,
Executive
Kirchofer &
\
"
<
Louisiana Securities
I rallS-
<S
Gas Trans¬
Co.—Glenn E. Ander¬
mission
son,
I
conservative investor.
more
In
invest.
to
for
New York Stock
not
any
who
those
Teletype NY 1-583
B A relay 7-5660
.
if
difficult,
select
to
TannocCHO
nnJ
Corp. and Tennessee
adaptable primarily to
single
security that is equally desirable
impossible,
Corporation
Established
particular security. Transcontinental Gas Pipe Line
a
(Transcontinental Gas Pipe Line accounts — Transcontinental being
Corp. and Tennessee Gas
more desirable for speculative acTransmission Co.)
counts and Tennessee-Gas for the
request
120 Broadway, New
Associates,
Arnold
&
Inc., Raleigh, North Carolina
Cyanamid Con v. Pfd.
Prospectuses on
Vice-President
Executive
Alabama &
Participants and
Their Selections
or, for a more conservative par¬
ticipation, the stock of Tennessee
Gas Transmission Company.
Both
stocks are unlisted
and are
GLENN E. ANDERSON
Dayton Power & Light
American
for favoring
participate and give their reasons
r
:
1
This Week's
Forum
A continuous forum in which,
STOCKS
IN RIGHTS AND
Security I Like Best
•
•
Thursday, May 25, 1950
.. .
i
NET TRADING
s
'
,
Financial Chronicle
The Commercial and
in
,,
This, however
'
'
,
_
T/u
Past- lile road
Continued on page 37
National Quotation Bureau
Incorporated
46 Front Street
New York
4, N-Y.
Number 4910
171
Volume
. . .
The Commercial and Financial
Chronicle
(zioi;
INDEX
The Outlook lor Prices
By EWAN CLAGUE*
Living
The Glowing Business Outlook—Dexter Merriam
Keezer__Cover
Hodge-Podge of Anti-Trust Laws
—Benjamin F. Fairless
4.—-—
Commissioner of Labor Statistics
Leading government statistician asserts postwar price
will stabilize between 1939 and 1946-47 levels.
AND COMPANY
—Cover
IT'S LATER
The Outlook for Prices and the Cost of
Living—Ewan Clague__3
level
Predicts price
1950 to Be Record Profit Year—Hon. John W.
Snyder___:.
-stability will consist of happy medium between buyers' and
sellers' market; and will witness neither a shortage nor glut
of
pag«
Our
:
..
4
THAN YOU THINK
ENJOY
In Defense
___—
of Formula
_______
.____
4
■-
_
Plans-^Lynn Shurtleff
that
be
buys
of depression. Let us look at that
first wartime peak. It represents
the
accumulation
of a
six-year
and
fearful
drop
of
in
prices
a
the
of
price rise with only occasional and
brief
interruptions. One of the
the
things
he
sells. Whether
remarkable
it is the farm¬
was
the
er,
that it swept up farm prices,
and
the
nonfarm
They
busi¬
nessman,
things about this rise
started
prices
at
together.
about
the
same
point in 1914, and although farm
prices rose more rapidly for a
time, they reached about the same
purchasing
agent, or the
ordinary con¬
relative
position in 1920., Then
sumer, every¬
came
the collapse. It was spec¬
one
is
halftacular,
and
nothing
escaped.
hopeful
and Farm
prices and nonfarm prices
half-fearful of
Ewan
what
Clague
happening
prices.
With
wages and
one
eye
the other
started
down, all within the span
months, and fell almost
at the same rate, although farm
prices hit a lower floor before
be
may
of
to
current
on
on
1920, we
are
wondering what will happen
next, and what will happen when
it happens.
'
1 *
,
It
is
is
prices.
In
understand
much
so
they bounced back.
in
a
produced
in
and
will
price
at
among
During
governor
through
prices
divided
producers.
the
war
be
"rigged"
was
control
to
predetermined
When the controls
machinery of the
were
the
keep
levels.
lifted, the
economy started
to race,
and only recently has it
begun to return to what appears
to be
more
question
is: Are
from
nearly normal.
in everyone's
we
approaching
which
we
can
The
mind
a
now
plateau
proceed
at
a
These
not
phase
one
turn out to be
of
what
may
rather violent
a
re¬
adjustment?
certainly premature to give
dogmatic answer to that ques¬
tion, but
analyses in the Bu¬
our
reau of Labor Statistics
leads us
to believe that the
readjustment
need not be violent nor
Now
;
that
it
can
bring
to the
threshold of a period of stable and
healthy
price-income
relation¬
ships. ■'
v
us
Record
the
long-time measure of the
price level is the Bureau's
Wholesale Price Index, which has
general
ore
compiled
talk
the
continuously
for
by Commissioner Clague beRegional Conference of State
Departments
of
Atlantic
Y°rk
New
and
Labor
of
England
City, May 23,
instances;
ask:
may
What
of
the
recent
develop¬
chart shows the
same
prolonged price rise from the
post-depression lows in 1939 to
the postwar
for
highs in 1948. Except
period of firm price control
a
1943 to 1946
(which
appears
all-too-brief plateau on the
an
chart), the price rise was about
steep in the second World War
as
it
in
was
the
first.
This
Rise
This
much
the
in
postwar
longer
than the
war
1920.
lasted
rise
has
the
beyond
The
After Marshall Plan Aid—A. W. Zelomek
9
10
:__
Sawyer
—Edward
T.
the Proxy
of
rise that ended
12
McCormick__
now
of
54 months be¬
the
Middle
States,
we have as yet
nothing approaching
general liquidation of prices.
In
the
past
several
years
the
price level has been several times
put to very severe tests. In the
spring of 1947 there
of
hesitation
contraction
view
New
of
the
and
in
was
the
a
period
momentary
a
economy,
uncertainties
Continued
1950.
Expansion:
—Edwin
G.
Promise
'
13
Nourse.
Capital—Philip W. Moore
*
Questions!
on
page
and
It
Insurance
Muntz-TV.
Cover
Stocks
20
Coming Events in the Investment Field.
42
Dealer-Broker Investment Recommendations
From
20
Washington Ahead of the News—Carlisle Bargeron
Indications of Business Activity
18
NSTA Notes
/.
Albany
.
Chicago
,
'
■
4
Hubbard 2-8200
Teletype—NY
-
Glens Falls
Incorporated
61
News About Banks and Bankers
14
:—:4
Observations—A. Wilfred May—:
*
"
:
Broadway, New York 6
Teletype NY 1-3370
BO 9-5133
*
Reporter's Report
43
._
41
Public Utility Securities
»
12
Prospective Security Offerings..
27
i
Railroad Securities
Securities
■
J
..
24
Salesman's Corner_____
;
Securities Now in Registration
30
38
—
The Security I Like Best
2
The State of Trade and Industry
5
Tomorrow's Markets
(Walter Whyte Says)
34
Washington and You
in
NEW ISSUES
reach national market
44
Investors all
*Not available this week.
the country
over
read The New YorkTimes.., in
24
Published Twice
Weekly
COMMERCIAL
1
Drapers'
Gardens.
London,
E.
2-9570
Office
to
Publishers
8, 1879..
9576
Thursday, May 25,
as
25, 1942,
York,
N.
Y.,
ary
-
second-class matter Febru¬
at
the
under
post office at New
the Act of March
-
Manager
1950
11,000
48
Subscriptions in United States, U. 8.
Possessions, Territories and Members of
Pan-American Union, $35.00 pt
year; in
Dominion
of
Canada,
$38.00
per
year.
Other Countries, $42.00
per year.
communities in all the-
states
and
the
Columbia. That's
District of;
why financial '
advertising in The Times
the
of
Subscription Rates
SEIBERT, Editor & Publisher
WILLIAM D. RIGGS, Business
Eng¬
Copyright 1950 by William B. Dana
\
Company
CHRONICLE
S. Patent
C.,
and
WILLIAM B. DANA COMPANY,
Every Thursday
rertlsing Issue)
plete statistical
(general
and
issue
records,
1-5
-
Reilly & Co.
whole
financial
covers
community
banking officials, corporation
executives,
tutional
professional and insti¬
security buyers, and in¬
dividual investors.
York Curb Exchange
"50 Congress Street, Boston 8
"
J. F.
37
REctor
Spencer Trask & Co.
HAnover 2-4300
Bought—Sold—Quoted
7
36
...
Mutual Funds
WILLIAM DANA SEIBERT, President
25 Broad
Street, New York
Stromberg-Carlson
8
Einzig—"Britain and French-German Steel Integration"
HERBERT D.
Members New
Radio & Television
34
_
Canadian Securities
PREFERRED STOCKS
Exchange
Olympic
10
Bookshelf
25 Park Place, New York 8, N. Y.
Stock
Hytron
Radio & Electric
>
(Editorial)
Man's
FINANCIAL
High Grade Public Utility and Industrial
York
Bumont
Laboratories
23
;__fc
Reentered
New
19
19
(Boxed)
Regular Fecturet
See
-I
.
18
Business and Industrial Construction Lags,
according to Survey
of Machinery and Allied Products Institute
21
Reg. U.
Members
Investment Securitie.
fl Post Office Square, Boston 9, Mm
Cites Menace in
Mutual Funds Announced
on
17
gener-
interested in offerings of
are
,
Tel. HUbbard 2-1990
_
Canadian Forum
Bank
;
LEEtNER & CO.
*
Independent Investors Planning Awards to Management and
Labor Leaders
1
Business
^request.
Selling about $9>50 ,4
>
21
National Industrial Conference Board
Farm Surpluses
As We
on
or
*
The
We
review of the Cement Indus¬
15
Strikes—Roger W. Babson
Some
Southern
Analysis of this Company and
14
Not to Spend—A Question of Government
Policy
—H. Christian Sonne
j.
Labor
fast-growing
try available
1
Small Business and Venture
To Spend
Performance
vs.
land c/o Edwards & Smith.
f
in
California.
Rules
postwar boom then
are
encountered
a
A leading producer of cement
a
Economic
(common) STOCK
11
Our Confused Foreign Policy—Alf M. Landon
The Corporate Secretary and
RIVERSIDE CEMENT CO.
CLASS B
World Trade and Point IV Program—Hen.
Charles
lasted
18 months from the end
We
!____
Our Reporter on Governments
end
For
WE SUGGEST
1929 Again—Only Worse—A. A. Mol__-_
Our
Long-Lived
•
WHitehall 4-6551
8
was
particularly true of the spurt that
followed the lifting of price con¬
trols in the latter half of 1946.
STREET, NEW YORK
Large Appreciation Potential
d__,
Let
present situation in
our
The
is
present situation to
repetition of this?
a
light
ments.
cipal
*A
isolated
WALL
6
6
_
Long-Term Market Trend Bullish—J. H. Allen
yond VJ-Day, and
Now let us go back and look at
the record of the
past. Our prin¬
been
pound to four cents.
our
look at
war.
The Past
you
in
prevent
us
extreme,
and
are
there
as
It is
a
44
dustries.
as
through
of
simultaneously in almost all in¬
from
passing
we
low
a
it
completely worthless.
Telephone:
.
_
Business, Banking and Government in 1950
—F. Raymond Peterson'___
ventory boom, without firm un¬
derpinnings
of
demand,
broke
direction,
are
high of $2
a
to
they are typical examples of what
happened when a speculative in¬
reasonable speeds and in the
right
or
1920
nine cents
what
quantities, and how the national
product
various
in
commod¬
Duties)—John F. Sullivan
spectacular.
1921, cotton from 42 cents
pound to 12 cents, and lead from
a
things
be
individual
equally
cents in
in
economy, since they are so influ¬
ential in
determining what
will
The declines
dropped from
bushel
a
real sense, prices are
"governor" of an enterprise
the
of
were
Corn
why
interest
prices
ities
,
to
easy
there
few
a
Philosophy of Trustee
"
for
you
Tomorrow
5
____
99
than nearly 60 years. The record of
usually, everybody is concerned the past 35 years according to my
about prices—hoping, for a drop chart shows clearly the two war¬
"in the prices of things that he time peaks separated by a valley
more
even
Are Common Stocks Respectable? (New
TODAY
give
we
obsolete!
may
—Murray Shields
>
days,
YOURSELF
with the cash
Unfavorable Contingencies in the Business Outlook
goods, steadily expanding production and vigorous competi:
/ »'■ tion, and healthy
profits.
These
liCHTtnsTfin
"
Articlet and Newt
And the Cost of
,
o
Schenectady
-
Worcester/
corporation news,
state and city news, etc.).
Other
Chicago
Offices:
3,
111.
135
news
and
ad-
every Monday (com¬
—
market quotation
bank
South
(Telephone:
La
clearings,
Salle
State
•,
Other Publications
Bank and Quotation
Record
Monthly,
$25.00 per year. (Foreign
postage extra.)
Note—On account of the
—
fluctuations in
the rate of exchange, remittances
for forSt..
0613);
pien
cHcpHdHotis
-r>Hi
o^"pvfisements must
be made in New York
funda.
"All the News That's Fit to Print"
»
1'V
4
increase
1950 to Be Recoid Profit Yeai
By HON. JOHN W. SNYDER*
for
year
profits, points to maintenance of price level
as checking inven¬
losses. Sees renewed upturn in capital goods outlay, as
well as a heavy consumer goods demand that results from
tory
serious
the
brought
war
challenges
to
econ-
our
Would America be able to
omy.
local
Your
the
in
enterprise
We
answer.
not
been
only
able
to
maintain
our
gains, but
our
productivity
is
constantly
the
on
in-
Since
crease.
the
close
the-
war,
of
In the Business
is
opportunity to supply a consider¬
able part of the requirements of
these assembly plants.
*
In the last analysis, of course,
the major market
goods and services.
our
Vice-President, Bank of the Manhattan Company
as
we
It is not
of
his
Sees, however, solid basis for confidence in po¬
period of expansion, progress and prosperity, such
as
improved phychological atmosphere; accelerated rate of
technological progress; and trend away from radicalism. Says
enterprise.
tentials for
the
American business.
^
of the Southern
century ago.
predecessors of even a gen- ings,
which represent potential
eration ago. For today, you must
purchasing power, are higher than
be specialists in the whole broad
ever
before.
Liquid assets of
field
of
business
analysis.
To individuals amount to over $200
evaluate
the
opportunities
for billion, in contrast to
only $68
growth in your communities and billion'when we entered the war
to judge which of these oppor- jn 194i. And this is not the full
tunities offer the best prospects measure of the
improvement in
for sound development, you must
people's financial resources. Their
be able to interpret the changes
investments " in
life
insurance,
occurring in business conditions homes and real
estate, corporate
not only in your own State, but in
securities, and other less liquid
your
unfavorable contingencies: (1) the
New York banker lists as
possibility of readjustment slump after final stage of postwar
boom; and (2) national economic policies inimical to private
for
ability to buy, but his
willingness to buy that supports
only
taxes
In
be reduced.
icies
banking
business,
charting
can
the
better
prudence
of
part
allow
for
d
u n
e
that
John W. Snyder
at
700
least
established
in
have
your
title
have
of
given
the
this
"New
region
South."
In my
The
to
While
year
First, there is
of
slump
nation.
our
into the second
We
quarter
of this year, and it is becoming
evident that 1950 will be one of
the most profitable business years
in our history.
the
It
outlook for
well
are
in
the
realization
of
is
jn
the
current
volume
of
volume, are
higher than
sumer
running
a
year
about
ago.
0
.
natural
your
resources
into
as
bankers,
will
major role in this further
sion
of
State's
your
play
the
drafts
of
cotton
points.
The bill of
controlling medium
expan-
New
home
am
certain that you
bankers will continue to be constantly on the alert for any finantrends
that
ship-
far-distant
of the entire
the
comparable period last year.
The construction industry is
«...
rtt.e sLfieth" a„»u5"&S235,S hi8My
the Tennessee Bankers
is,
Association, Mem-
>
1950.
giving
greater
Conditions
and
securities of
corporations,
par¬
ticularly those operating in
nish
the British
number
other
of
carefully prepared
in
lumber at competitive sale
May 22
your
construction
-
related
*
fur¬
an¬
alyses within short time and
at reasonable rates.
production
is
also
the
m
BELLEVUE
SEATTLE
2,
COURT
WASHINGTON
a
Proceeds
from
the
financing,
together with funds received from
/
we
our
Hon
more
that
we
have
people today
1^29.
30
mil-
than
0ff
$2,400,000 of 3% collateral
in promissory notes held
by banks.
The balance
I know that you are
eyeing this
be
used
industry with considerable interest, for the manufacture of auto-
struction
the
one
of the
promisfields
for
future
major
industrial expansion in this area.
Southern ownership of cars and
trucks in the 10-year period 19381948
increased over 44% com-
ing
1027
on
bid of 101.909%.
motive parts is
HERMANN SCHOENEN
issue
used, to the
exceeded the 1929 peak extent
necessary, to redeem $5,output of passenger auto- 000,000
outstanding first mortgage
mobiles.
And, again, we must 4y2% bonds due 1978 and to
pay
have
remember
we can
Halsey, Stuart & Co. Inc. on
May 23 publicly offered $3,000,000
strong points in the the sale of 100,000 shares of
2.35%
current business picture, and I am
$50 par value preferred stock and
told the demand is far from satis275,000 shares of $3.50 par value
fied.
In only one month so far
common
stock, will be
foreign
Commonwealth,
the
direct
Automobile
one
or
own
as
industries.
Analyzed
Great Britain
your
well
the
and
in
in
Interstate Power Bonds
construction Interstate Power Co. first mort¬
employment to gage bonds, 3% series due 1980
around 32,000 Tennesseeans, and at
102%%, plus accrued interest,
indirect employment to an even
The firm was awarded
Foreign Corporations
If interested
important
State's economy as
nation's.
Currently,
is
Business
Dangers of the Transition
Business
given
has
distinct lift by
a
stock
sentiment
a
pared
with
a
national
average
The
of the
for
the
proceeds will
company's
con-
program,
bonds
option
are
of
redeemable,
buoyant
by the sustained
demand for housing and durable
tries.
and
a
of
There is
in
indus¬
economy as
the picture
encouraging.
ended
of
softness here
some
there, but for the
whole
by the
orders
new
number
This
is generally
has strength-
the conviction that current
levels of operation in
trade will
industry and
be maintained
the
company,
for
the
there is
disposition
to
delayed until late in 1950
an
believe
or
early
1951.
Nevertheless,
observers
no
that, unless
ulant is
be in
there remains
perceptive and experienced
among
a
little apprehension
powerful new stim¬
introduced,
we may well
phase of the early
boom in exports, con¬
the last
postwar
struction, automobile production,
farm income and plant and
equip¬
expenditures with
the
risk
that a
simultaneous setback in
these factors would initiate a de¬
cline
in
business
substantially
more
serious than
was
experienced
in 1949.
Thus
far
in
nate
we
have been
fortu¬
that the
period of read¬
justment has been spread over a
long period of months instead of
being concentrated in a sharp and
substantial decline in
many indus¬
prevailing fear a
that the nation was
ing fashionable.
(2)
The
in population
upsurge
continued.
in
The
postwar re¬
family formation has
expected.
been much smaller than
In
addition,
medical
two
accomplishments in
research
decades
during the past
the
extended
have
life expectancy of our people and
cut the number of working days
lost
due to
illness—developments
which presage a substantial growth
in the consumption potential.
(3)
The
more
rate
technological
of
has accelerated. More and
progress
is
money
spent by
being
business concerns, associations, ed¬
ucational institutions and govern¬
ment
for
more
productive re¬
search, which provides a fabulous
scientific
frontier
tries and the
can
of
indus¬
new
by which costs
be reduced and markets widmeans
ended.
(4) The trend
away
from radi¬
In what
calism is gaining strength.
people pay to read, see and hear
there is evidence that
they^ are
less
susceptible
the
to
promises of welfare socialism
returning to the middle
of progressive capitalism.
are
"Lower Taxes
or
and
road
Bust"
potentialities for
progress be realized? Of that we
cannot be sure, for by continuing
•';w: Will
these
Continued
on
page
28
tries
simultaneously.
But
the
present phase of boom is so
pro¬
nounced and so much of
the
Established
pres¬
ent volume of orders
and produc¬
tion originates in
government out¬
lays and in credit expansion as to
justify
some concern
phase
of
readjustment—when
but to be
nounced.
Vigorous efforts
undoubtedly be made by the
ernment
we
are
sive
as
rests
entitled
to the
on
is
to
*An address
ci
.
M,y
Members
will
which
our
strengthened,
be
to
New
York
Stock
Exchange
New
York
Curb
Exchange
Cotton
Exchange
New
York
Commodity
Chicago
Board
of
New Orleans Cotton
And
Inc.
Exchange,
Trade
Exchange
other Exchanges
apprehen¬
outlook, and it will
probably be prudent
H. Hentz & Co.
it
pro¬
gov¬
to perpetuate the
boom.
But until the basis
1856
lest the final
comes—will turn
at
issue, the bonds are redeemable at
prices ranging from 103ys% to
100%*
increasing
and
the
nation. 1 Optimism is again becom¬
duction
considerable
nation's
a
inexorably toward eco¬
nomic-maturity and industrial stag¬
and "futures" markets and
prosperity
ranging from
to
100%.
Through an improvement
and sinking fund provided for the
to
ago
has
a
the
degree
optimism which is in pointed
of
goods, by strength in many "spot"
at
prices
Institution, the Twentieth
Century Fund, The National Plan¬
ning Association and others) have
moving
been
market,
vigorous flow
dis¬
ings
decade
The
ment
Halsey, Stuart Offers
and
(the Brook¬
contrast
cial
outlook.
I
agencies
students
will not be realized.
struction
quarter last year, and the increase
a
ever
research
potential with
in
the
eral
tinguished
appraised
of balance.
in
The psychological position
improved considerably. Sev¬
has
economic
that any material setback will be
than
(1)
-
recently
watchful of developments
which might tend to throw it out
_
phis, Tenn., May
terprise that
uncertainties several
recent
the undeniably great potentialities
for post-readjustment prosperity
be
'
fore
en¬
same
higher
building
for public works construction and
public utility construction likeexchange, the wise show substantial gains over
to
in¬
so
to
were
30%
economy.
covering
be
imical
next few months
might; threaten
be furnished by your institutions, construction is
at the highest level our continued
prosperity. For
From earliest days
banking has in our history.
Moreover, new upon America's domestic strength
supported
the
growth
of
your contracts awarded for future con- rests
not only
our
own
future
commercial endeavor. The South- struction of residential
units con- peace and security, but that of all
ern banker was a
pioneer in the tinue at a specatcular pace. New free nations of the world,
financing of foreign trade.
He contracts awarded so far this year
ments
policies
keep our economy strong,
healthy and growing.
We must
non-residential
Much of the capital required will
issued
eco¬
is widening.
I am particularly impressed, as
I know you must be, with the con-
fin-
ished wares, your annual income
can be increased
extensively.
You,
will
Shields
Murray
as
.
that
nomic
Con-
irw
possi¬
national
6%
buying for the country
And,
the
bility
trade and consumer expenditures.
Total retail sales, in actual unit
_
'
is
retail
Industrial
the
boom.
the outlook for the
next
of expansion, progress and
pros¬
perity which have punctuated the
history of this country.
from
postwar
second, there
willingness to buy is reflected
a whole is
currently running at a
production
is
not record annual level of
$181 bilpotentialities that lie ahead for only back to last year's level, but h0n.
still further expansion and prog- is now
rising, in contrast to the
The fact that last year's busiress.
decline
last
spring.
Business ness readjustment did not unsettle
Your State particularly has tre- profits this year are less likely to the
economy has created a justimendous
potentials
for
further be held down by inventory losses
fiable feeling of confidence.
development. Agriculture should, since commodity prices have
Another factor in the business
and is, turning to higher value shown a firm trend for
nearly a picture—one of the nation's
bigcrops and products.
The advance year, and inventories have
J^een gest assets for future progress—
which you have made in
dairying greatly reduced.
is our growing labor force
To
is
an
instance
in
point.
By
, TT
.
.
rallUal r^a
realize our full potential for busimarketing your grasslands" you Ren«wed Upturn in Capital Goods negg
profits and national income,
have become the South's
leading
The renewed upturn in capital new jobs must be
developed in
dairy state.
goods, now under way, raises the step with our growing population.
In
similar fashion,
there is question whether earlier estimates In the
longer run, as our populagreat opportunity here for indus- of a substantial
reduction in new tion grows, new jobs must be cretrial expansion in finished
prod- capital expenditures this year may ated
by the initiative and vision
H®;?■
industrial output is not have been somewhat exag>- of both management and job
still primarily m the production of
gerated.
New orders for machin- seekers.
raw
materials, of semi-finished
ery have been rising sharply since
To benefit by our tremendous
metals and textiles, and chemical
the third quarter of 1949.
New opportunities, it is essential that
intermediates.
By converting construction contract awards for we
rather
sition
or
Unemployment
a solid
basis
for confidence that the
potentials
exist for another of the
periods
on
the final tran¬
the
Alterna¬
Prosperity
developments provide
readjust¬
ment
caution
optimism.
two is clouded by inevi¬
or
table
possibility
a
moderate
Great
Mass
contingencies.
the
on
Post-Readjustment
tives:
two
unfavorable
assets far exceed the prewar total.
opinion, there is sound
basis for confidence in the business
own
State (Tennessee).
Yet it is not the material
gains
which you have already achieved
that
the nation and in the world.
in-
new
dustries
-
been
rstand
based
rather than unreserved
government policies for the
short- and long-range future it is
and
.
I
Outlook
By MURRAY SHIELDS*
business
producgains?
have
Unfavorable Contingencies
market,
established
been
Thursday, May
25,195Q
. . .
result of
Personal Incomes at Record Level
banks over a
Ability to buy is evidenced by
tion
In serving your customers to- the current record level of perToday — five day, however, the problems and SOnal incomes, which continues to
years
later— responsibilities which face you are run weil over the $200 billion
we
have
the far greater than those that faced mark.
In addition, personal sav-
tremendous
its
maintain
foreign exchange system
know it today, was part
daily
a
automotive assembly plants
many
have
represents
personal incomes. Pictures "justifiable
feeling of confidence."
of
As
Southern
it is the individual consumer who
record level of
close
28%.
of
growing
taking advantage of the profitable
Secretary Snyder, in predicting 1950 will be record
The
,
South.
Secretary of the Treasury
current
this
Financial Chronicle
Commercial and
The
(2152)
adopt pol-
by Mr. Shields before the
!^9r!(>A5S0Cia,i0n¬
N. Y. Cotton Exchange
NEW
CHICAGO
YORK 4, N.
DETROIT
GENEVA.
BldgY.
PITTSBURG®
SWITZERLAND
Volume
Number 4910
171
The Commercial and Financial
. . .
Chronicle
5
(2153)
■s
In Defense of Formula Plans
"OBSERVATIONS"
^
■
:;■!% The
Wilfred May's column
A;
not
was
Steel Production
;
j'
Electric
Chicago Bond Club
Annual Field Day
will hold their annual
June 2 at the KnollCountry Club.
field day on
wood
Manager, Investment Research Dept., Laird, Bissell & Meeds
Retail Trade
Commodity Price Index
Food
and
CHICAGO, 111—The Bond Club
By LYNN SHTJRTLEFF
Carioadings
State of Trade
available this week.
of Chicago
Output
Price
Auto
Industry
Mr. Shurtleff concedes flaws in formula plan technique, includ¬
ing tendency to over-liquidate funds out of stocks if prices rise
Index
Production
Business Failures
to
historically high areas. Contends, however, that plans with
timing methods can be devised to yield profits both over the
normal business
The immediate effects of the
reflected last week in
was
cycle and in a period leading to permanently
higher market platean. Describes such plan with scale-up and
scale-down purchases.
ending of the Chrysler walkout
moderate upturn in total industrial
production above the levels of the preceding week and of the com¬
parable period in 1949.
An all-time high record in the
output of
both
steel
a
automobiles
and
was
EDITOR'S NOTE—Mr. Shurt¬
noted, while the production of
leff
some
Elects New Officers
mm
f\
"Chronicle"
The
steel
those
reflect
to
falls
industry in the weekly
period just elapsed wit¬
nessed the fifth consecutive week of steel
operations at 100% of
capacity or better, and, to quote the American Iron and Steel
Institute, "never before has so much steel been made in a week."
before, the "Institute"
ever
naces
announced
on
Monday, last.
will be
The present week rising capital
goods expenditures are inten¬
sifying tight steel supply conditions, says "Steel," national metalworking authority.
Continued strong demand for sheets, strip,
tin plate and pipe is being supplemented
by expanding require¬
ments for bars, plates and structurals.
Heavy product deliveries
are
becoming increasingly extended.
Supply stringency in these
items in no way compares with that in the light, flat-rolled
classifications.
But some trade authorities foresee acute shortages
Dorothy R. Funck
Helen E. Dickinson
annual
the
At
of
meeting
the
Women's Bond Club of New York,
held
May
following
the
17,
of¬
\
.
President—Dorothy
Funck,
Vice-President—Irene Sheehan,
General American Investors Inc.
Secretary—Helen E. Dickinson,
Treasurer—Marion Quell, Irving
Trust Co.
Directors—Isabel
H.
Ben jam,
Brown Bros. Harriman & Co. and
Olga
Fluck,
Pressprich
W.
R.
& Co.
J. B. Hanauer Co.
■NEWARK, N. J.—J. B. Hanauer
Co., 9 Clinton Street, are ad¬
mitting Irving Stern, Bert Fried¬
Lewis
and William
Hanauer, Jr., to
partnership.
Cavalier Syndicate, Inc.
Cavalier Syndicate, Inc., is en¬
gaging in a securities business
nue,
years
mula
the
ago
plan"
ventional formula
un¬
.
& Co.
plans which is
receiving increasing attention.
street
ST.Lomsl.Mo,
investment
t
e c
h
in
i q ue.
n
areas
over
has ranged
such
metal, stability in finished steel prices, prevailing
since early in the year, continues,
;
creasing
• ■
in¬
the
past
"Ward's
week,
on
Automotive
the automotive industry
observed
Reports"
that
Chrysler, Ford and most of the independents succeeded in by¬
passing the problem, while General Motors was partially stymied
by the difficulty in shipping bodies to its widely-scattered as¬
sembly plants.
Tuesday last,
five-year agreement which is expected
to have a stabilizing influence not only on business but on the
economy of the whole country, was reached by General Motors and
the
a
Automobile; Workers
United
pensions, insurance and union
contract issues until May 29,
either party before that date.
Wilson, President of General
management relations."
Total
production of
United
States and
Union
(CIO) covering wages,
security. It settles all economic and s
1955 and may not be reopened by
The agreement, according to C. E.
Motors "is unprecedented in labor-
...
cars and trucks for the- year to date by
Canada was reported by this agency at
2,814,191 units, compared with 2,381,255 for the like period of last
year.
•
:*'v':v;
&■.
v..
$11,095,000,000, or "about equal" to a total of $11,137,000,000 for
the like period of 1949, the Department of Commerce reports.
April sales were "fractionally below" those reported for
March after the figures were adjusted for seasonal factors and for
trading days.
;
L
:
.
■
.
Sales of hard goods were $3,755,000,000 in April, a decline of
from March, after seasonal adjustment,
about 2V2%
ment
the depart¬
said.
this
In
category, the biggest drops were made by the auto¬
which was off about
motive and homefurnishings groups, each of
for the month.
leges,
which
the
market
during the past decade
banks,
The government attributed these drops in
col¬
trustees
ing
and
individual
Lynn
Snurtleff
on
formula timing
formula plan inves¬
tors in 1921 might well have ad¬
commentators
They have been widely adopted
at
and
provide
a
than
result
investment
be
funds
by any other method.
Indeed, the use of a formula plan
will insure capital appreciation
a
fund
over a
fully
a
invested position
in view of the fluctuations
age between
achieved
in
115
of the Dow-Jones Industrial Aver¬
better
can
typical
vocated
investors, both in¬
individual, have
many
that they
found
over
power
that
stitutional
the Dow-Jones
on
Average), followers of
plans might well be con¬
It has been pointed out by other*
in¬
vestors.
because
(90-215
their lack of purchas¬
protection should infla¬
tionary forces drive stock prices
to unimagined heights.
church
funds,
1897 and 1921.
would
out of stocks in
the
complete business
prior to
further five-
a
tripling of prices which
ties
failures
Business
reported in 1950.
were
the
market
to fluctuate
not
does
better-known formula plans were
cease
that stocks do not
or
nearly
profits will accrue over
cient period of time;
a
of
out
1947-1948
permanently worthless, a
logically constructed formula plan
guarantees that there will be no
ultimate loss and that reasonable
become
were
event
The
geared
a
during the
plateau.
They
buy
to
severe
bull
stocks
price,
only
decline
that
market
set
to
806,
the
lowest
In April, 1949,
succumbed this
stock
up) in high areas and buying (on
scale
holdings in such funds have
been cut back
to
a
low level.
new
in
down)
low
areas.
Inactive Issues
Harder!
are
It's
difficult for anybody to find satisfactory markets in
We've done a fair amount of business in that
not too
and south
carolina
•F. W.-
craigie&co.
VIRGINIA
System Teletype: RH 83 & 84
3-9137
-
Right
We
though, we'd like to talk about inactive issues.
now,
,
areas
steel items are now in
We don't
A
careful
of the steel trade.
among steel users in
check
(3) steel is regarded as better than money in the bank by many
users—whether they need it or not.
(4) Some plants are being
to
shut
down
intermittently
may
...
all major consuming
by "Iron Age" editors reveals the following: (1) All major
tight supply and the pressure is mounting
instead of decreasing.
(2) Flat-rolled products are most critical.
forced
bonds
week, steel
be sticking our necks out, of course. But we've got
enough honest faith in our 50,000 miles of private wire and 100
offices
enough belief in our perseverance and experience
to ask that you try us just once—to call us first, next time you
want a buyer or seller for some inactive issue.
states
virginia
steelmaking records almost every
having little or no success in building up inventories,
"The Iron Age," national metalworking weekly, in its cur¬
because
of steel shortages
(usually cold-rolled sheets), and (5) others are operating handto-mouth, with uncertain steel delivery playing havoc with pro¬
duction schedules.
Draw a circle around Chicago and Detroit and you have en¬
closed the two areas of greatest furor.
demand, resulting from over-corrected inventories
and production losses due to strikes, is still snowballing, the
magazine adds.
Even record-breaking steel production will not
If
a
save
But
on
page
35
care
how small it is
market exists,
as
we
think
time, trouble, and
you
we
.
.
we
.
how
can
closely it's held.
find it
.
.
.
think
we
can
expense.
said before, just try
us!
Trading Department
Merrill Lynch, Pierce, Fenner & Beanb
70 PINE
Pent-up
Continued
If
A
the Dow-Jones Industrial Average
shortcoming
of
formula
plans
Continued on page 27
generally, however, is that in a
a
active securities.
Break Ail-Time High Record
in
cous inflationary forces set in mo¬
tion by the war, has thus not ma¬
the conventional for¬
many
investment
mula plan aims merely to take terially aided
portfolios based on conventional
advantage of the fact that prices
formula plans since the common
fluctuate, by selling (on a scale
For the first time in four years, casual¬
of the
are
rent summary
Telephone
April
in
In essence,
field, ourselves.
Despite
RICHMOND,
in
in the
occurred.
suffi¬ June, 1949, reflecting the tremen-
less numerous than in the corresponding month
Steel Operations
users
municipal
9%
preceding year, states Dun & Bradstreet, Inc.
they totaled 877.
Two-thirds as many concerns
April as in the prewar April, 1940.
MEMBERS
virginia—west
declined
was
-
general merchandise and apparel groups.
-
been
1922 just
beginning of
year
Such
probably have
cycle. There will always be a the biggest bull market in history.
Most
formula-plan
profit when the market travels
managed
through any cycle and comes back funds today are probably almost
to the same level from which it out of stocks. Following the severe
originally started. Granting then,, 1946 market break, many of the
that
Retail sales In the nation's stores during April amounted to
differences in the number of
of
two
cerned
num¬
bers
MIDWEST STOCK EXCHANGE
Since 1932 Specialists in
As
widely used. Over the stock prices continue to rise in the
past decade,
face
of
unabated
governmental
deficit spending, inflation protec¬
they have been
more
tion naturally assumes an increas¬
widely
adopted by in¬
ingly important role in investment
vestors
than
policies. As most conventional for¬
mula plans are geared to function
any
other
are
by
number
509 olive
?
It is this shortcoming of con¬
r
familiar to investors. Today such
plans
i
Inflation
"for¬
term
relatively
was
•
in April, or "very slightly above" March totals, after seasonal
adjustment. Adjusted advances of about 3% were shown for the
INVESTMENT SECURITIES
oel«
Ten
•
•
Rapid Growth of Formula Plans
used
large part to lower sales of used cars in the automotive field and
of appliances in the case of homefurnishings.
Retail sales of nondurable, or soft goods were $7,340,000,000
North
'
demand for the
4%
Stix
equities provide.
Conventional Plans Vulnerable to
Industrial
from offices at 670
Lexington Ave¬
New York City.
of
he
when
r
Bassie, May 4, 1950.
or
&
man
most
that
plan
out
needs them
for the inflation protection
just
being
the
( To Admit Three
stocks
investor
the
take
Formula plans
On
Gartley Forecast.
formula
conventional
will
Timingby
are
Noting the effects of the rail strike
R.
a
the
Pit¬
developing in this area as delivery pressure mounts under impact
new capital equipment
programs.
Notwithstanding this strong
;.v
Irving Trust Co.
Formula
in
recent
"The
of
ficers and two new directors were
elected:
two
'
The fur¬
operated at an average of 101.8% of capacity, repre¬
senting an increase of one-half point from last week's 101.3% of
capacity.
of
in
articles:
vestor out of
Bradbury K. Thurlow, April 13,
1950; and "Investment and Spec¬
ulating
by Formulaby
V.
This record, however, is expected to be shattered the
current week,
since steelmaking furnaces are scheduled to make more steel than
dt&k
reached
new era" of prices,
plans would keep the in¬
the market. Hence,
severe
inflationary period,
"permanent
formula
offers
essentially
conclusions to
contradictory
weeks, nation-wide unemployment continued last week
some
slight decline.
Women's Bond Club
; 4
herein
subsidiary automotive materials such as glass and rubber,
reached unusually high levels.
As has been apparent in past
,
STREET, NEW YORK 5, N. Y.
Offices in 98 Cities
•'
1
6
(2154)
Of
Are Common Stocks
New
Respectable?
SULLIVAN *
-
-
sonable
trust laws, which permit trust fund
stocks, Mr. Sullivan contends this move*
of maintaining trust income. Discusses '
logical means
types of common stocks suitable for
trust
tee
stocks
common
buying by trust funds will be factor in
taining stock prices.
,
It
has
been
said
that
there
is
nothing new under the sun. Per¬
haps rather than "New Philoso¬
phy"
find
we
instead
steady,
a
financing of its cost for
interesting side-lights on investment thinking. At that time
many
of
ral
investment in
ment
to
meet
ties
changing
the
The
conditions
an
these
investors
that
,
their
eco-
nomical
de-
developments
with
f
a
the management and
yifAnnvftT
r\£
property
investing of
a4L
Am-
teeship.
of others in trusWith the often divergent
interests
of
lual
the
the
donor
remaindermen
side
income
and
other,
and
even-
the
on
one
beneficiaries
plus
the
on
be¬
squeeze
tween lower money
rates, higher
taxes and rising living
costs, the
l^osition of the
enviable
one.
trustee
The
is
not
an
in which
manner
this
challenge has been met has
reflected favorably on the trust
fraternity and the apparent trend
of
events in this
changing world
indicates that their ingenuity and
resourcefulness
further
in
will
the
be
tested
immediate
years
ahead.
Conservation is the basic func¬
tion of trusteeship—has been and
should continue to be.
does
the
mean?
term
Has
fulfilled
But what
"conservation"
the
his
modern
obligation
trustee
by
at¬
tempting
to conserve the dollar
value of the assets turned over to
him?
Can he totally
disregard
changing values in terms of what
these
dollars
will
buy
or
ISbes^Mo
York
should
otove
"Prudent Man"
Law
Recognizing
State
of
many
years
to
the
this
problem,
York, which
New
has
so-called
fiduciary, acting under
New York laws, may invest not
than
more
35%
af*
ijuch
of
the
aggregate
stocks.
mon
on
The
only restriction
stock purchases is
that, except
#or bank and
insurance companies,
they be fully listed
on
and registered
national securities
exchange.
a
While these events
ets and their
tions
desirability of maintaining
relatively low money rates to fi¬
nance
and
support the national
debt has resulted
cepted
conservative
from
viewed
*An
liefore
address
the
so
many years
with alarm
investors.
by
We
all
are
this unfortunate depar«y unfor u-
the
standpoint of in
come
beneficiaries, and its bearing on the overall trust investment
problem.
It seems unnecessary to
need
the
-c_
ever,
HowiT/iii
figures will
basic
few
a
with
statement
to illustrate the situation. In
serve
1929,
the
bonds
risk
added
-
.
be
must
-.1--
—
,
Ti.
in
assumed
—
,
yield
average
AAA
on
bonds
iL
J.
^
terest
Bankers Association, Atlantic
City, N. J.,
May 18, 1950.
outlook
The
for
deserves attention.
somewhat
The
year
ago,
less
farm
income
There may be
purchasing
power
in farming communities again this
year, as there has been since 1947.
management
Agricultural prices are down from
highs, and general crop
prospects this year are not quite
postwar
favorable
so
as
they
were a year
The government's $2.8 bil¬
ago.
lion refund of G. I. insurance pre¬
miums has just been completed,
*
...
.
,
...
—
,,
tlaKti0"', " « frequently offered in
rebuttal that common stocks failed
as
hedges in Great Britain.
A
7
.
it
age a
situation where the original
intent
For
bas
is
of
difficult
not
the
donor
instance, I know
heen
Set
up
has the income
at
her
the
the
death
eventual
in
than
is
to
40%
could
be
regarded
as
practice. This figure, how¬
ever, is based on the assumption
sound
that
the
envis-
trust which
a
the
worthy charity
remainderman.
would
to
be
assume
more
is
It
that
inter-
having his wife provided
that
assets
to
the
dollar
be
turned
charity be maintained.
x-
,
value
ot
of
over
If this
j
as
.,
timism
for
clearly
-
fir/t
the
has
been
lg£0
half of
justified.
It
,
appears
.
60%
rfAA AV»O 1
will
be
uuu
una
iui
quently
me
we
leason
look
at
max
•
banking.
on
banks
seasonal
loans <--•
by
Business
have
undergone
slight
a
since
decrease
January,
However, the decline has been less
portfolios
find
on more careful analysis that
so-called protective issues—
tx/hinV,
those which should afford the
highest degree of safety of prin-
the
thncf*
cipal
and
the
income—provide
way
of
little
protection
and
A
Ktioi
/-\+-
m
r\'c* c*
goods '
and household equip* ent
again moved ahead.
Ex'pansion of industries such as chemicals and
previous
expectations
continues
income
ployment,
tbe start
had
have
th
em-
sagged
^ the"
and
tjP<;
Personal
high; and
which
a
year, is
COmmodi-
There is strong demand for steel;
Orders for machine tools and
other heavy equipment are
at the
highest pumt they have reached
point mey
xmye reacnea
the
"since'lheTr"'postwar* high'
Q MT*1 TI rf
AT
1 Mfcl
spring of 1946
Industrial
"Prudent
is
and
Man"
common
50%
as
this
rule
is
in
practice
in
ratio
to put
common
has
defended by noted
effect
been
as
stocks,
pioduction has risen
authorities
on
"What
be
stocks
and
are
purchased
for
capital
long-term
through
tection
volves
types
of
a
of
considered?"
income
appreciation
purchasing
combination
Pro¬
power
of
both
for
of this
No
wi
Justification
inof
justification
ism.
smaller
for
^and
for
Perpetual
billion, con.
the
As
wlth a year ag
L
its
fi-
prog^am a* additio:na
to""" fl7r?hCTay
S rise further.
th
.
increase
thTextent
upon
-ts
amount of
The
The am in
depends
the gov
to which
•«
i
-
_ti
££ - caTs'upon the""banks to
fm j^g borrowing
new
money
of the
year.
requirements to
during the remainder
When general busi-
ness is strong- as,
U Vr°?hroU!>h
throUB"
expansion of bank credit
Sooner
for
or
perpetual
later
ontim
there must
an
adjustment in 'the demand
automobiles' a n h
hnncinrf
over
Mr
the-
29 M^yeis
Peter
k
t
j'Zl
AlS9S5(),atlon, Fort
Federal debt
to
the
Worth> Texas,
exceeds^
• iyiost: of
its growth,
took place during the
billion.,
course,
strong
momentum, there is, of course, no
particularly
page
,Ir
is°anin-
^ increased bank deposits.
period a
In the 3rea °£ -?overnme"
however, lies one of
Although business in general is
moving with assuringly
be
on
&
creYs^of over™!
I
tr
Optimism
speaking, and
Continued
deposits
shown
reCently
the
™
above those of the same
these but generally
for
ha
de-
bank
time
higher than iast year,
reporting member banks
Weekly
in spite of the fact comis generally keener
toan>
at
any time since the war ended,
stocks
growth.
are
WgheTlevW^istorv^Po th6 b°rr°wi,"g ^ thf ufTesuU
rate Drofitf
JP
must alm0St
^
Common
for
posits
same
petition
Trust Investment
should
tadusV^s^SLn^lf"^?1^6
;?dustnes-. Residential construe-
year ago,
Types of Common Stocks for
Next,
in
in recent
months,
because of strike settle-
strongly months
trust investments
the
*•
significantly
partly
n
Deposits Higher
Bank
^
pared
awin
istics
that
ago.
year
a
„
television has exceeded
possess
many of
the characterof
equities, I understand
in Massachusetts, where the
the levels of
has
ire-
which apparently have conservative common stock ratios only to
xrAlurA
IbtePdate leaX'to the confusion "?ed.ium size trusts- a compara- These are basic industries. They
?ha? revCTsal o? curremtends
,2*
!!!Ilbeen Produc«g
unprece"
is improbable
the foreseeable
^ £iCiP? ,should *An address by
'
future, what should the modern be the objectlve' Whlle d ls
trustee do about the situation?
have had measurable effects
year
^w
'"e^
fittle- at
^^Srfo^The "e^n "hltTel metals
wife
during her life and
a
remaining
defeated.
where
reasonable
donor
to
concerning
prospects for the second
th of"^
Q
.
rn A
up
much
trend
1
with the
vary
of the necessities of life.
this
1
individual trust but under current
conditions it would seem that
it
with
etc.
restraint
that we are also than we ordinarliy expect each
Free en- Ju.stlfled m shedding most of the spring.
Among weekly reporting
important ^nor doubts we had concerning member banks, it has amounted to
the
national-
.
riSe in income taxes and the cost
through
the
with
business
terprise, of course, is an
general volume of business
and integral part of the
only a little over $300 million, as
concept of
during the remainder of this year, compared with a decrease of more
common stock
investing.
One of the important
pleasant than $1,200,000,000 in the same
Having adopted a policy which
elements in the business picture is period
of last year. \ With the
contemplates the holding of com¬
the sustained demand for almost coming of the normal summer and
mon stocks we come to the
ques¬
tion "What percentage of the fund all kinds of durable goods.
The fall upturn
in the demand for
should be represented by common demand for automobiles, for re¬ credit, we may expect the volume
"y"*"" *U1
iU£[, Ie7 of
c+nfirc?"
Thic
bank loans to rise a little above
frigerators, and for similar "hard
stocks?" This *„ni
will
"
Following
Some
of the answers lie in the tax struc-
in
was
timism
in-
a
by Mr. Sullivan delivered
Division, Pennsylvania
Trust
a
early spring weather.
rates,
Treasury's
the
^
periods of pronounced
in
approximately 4.73%.
In 1939, the figure had declined
to 3.01% and in February of this
year it was 2.58%.
Adding to the
Woes of the beneficiary are the
the
was
You
trustee.
famUia'r with
for
ago
re¬
the
once
—
the ladder
investment that not
drastic
a
high-grade
commonly ac¬
investment media for the
bonds
respectability for the type of
up
in
duction in the yield on
Truly quite
step
inflationary implica¬
factors.
all contributing
are
The
ested
conservative
a
izati0n of industry
taking
place other developments brought
about a steady decline in purchas¬
ing power.
Deficit financing to
pay the costs of war and buy the
peace, unbalanced national budg¬
were
_
plied to legal bonds they are eniirely abandoned as regards stocks,
a
industry and
In-
commerce.
0ff and a satisfied customer is decisions regreat asset. Obviously,
some garding debt
ture in that countrv
Effect of Low Interest Rates
seems
of
0f
than
lower
VJt,
In other words,
although elabo¬
rate statistical formulae are
ap¬
;~J:
industry has
been
pay
.
business of finance; and the
many safeguards thrown around
stock investments through Stock
Exchange and governmental
regulations and requirements.
.*be foods held by
fiduciary in nonlegal securities—bonds, preferred and com¬
clicrhX^
.
the
substantiate
a
than four
more
the
partly because of mild winter and
also^any
detailed statistical analysis.
Man" law which will become ef¬
fective July 1 of this year.
Briefly,
under the terms of this new
legis¬
uri+Vimit
xroarc
not achieved its expectations.
net income of the oil
,
for
strictly
"legal list," has
dented levels for
W(llcu
the
adhered
capitulated, somewhat belatedly
it is true, to modified "Prudent
lation,
could>
:
velopment,
New
XV>r
gram on investments, particularly
of Maintaining Trust Income
x h e y
too
They,
too,
F. Raymond Peterson and the added purchasing power
equity type investments, through.
For the purpose of this discusmust' necesfrom this source has now disap¬
greater publicity of corporate de— sion it will be assumed that the
§arily be closely tied to the na— peared.
But the government is
velopments and earnings, greater logical medium for
attempting to tj0n's general economic
swings launching
a
new
program
of
availability of financial data from protect purchasing power will be
nlklA
4La fAAArfAi-.
and interolav.
F
J
deficit financing which will add
responsible sources; the recogni- common stocks.
It is not the inAt the start of this year, most at least
tion by the investment fraternity, tent here to
$5J/2 billion to the spendconvey the impression
0£ us were optimistic about busiing stream during the coming
including the New York Stock that common stocks provide a perness
conciitions generally during fiscal
Exchange itself, of the necessity feet inflation hedge but
year,
experitbe
baj£ 0£
of removing the mysticism which
year
^t the
The generally favorable develence
has shown that,
generally same
time, we expressed an op- opments in business thus far this
heretofore
seemed
to
surround
nate
The
l
^ "A
John F. Sullivan
r-
reaching effect and offering a
challenge to those charged with
the
they
general conditions of busi-
Thp
J.11C
ness
departure from the so-called and Fed era
in-^«riskiess" portfolio but, in -."'my 0
p en market
to
opinion,
and
assuming
careful policies, all
cash, on relatively short notice, \ r
supervision, the advantages out- have great
In the years that have followed.
weigh the disadvantages,
impact upon
the public has been subjected to a
.t »
our
day-tobroad
general educational pro- Common Stocks—Logical Method
politi¬
—
and
back
are
Attacks government insurance
of business loans.
learned that if necessary their
vestment could
be converted
.short space of
cal
principal
being adequately met by banks.
indenture
is highly competitive and in the
jong run management results will
,
getting
loaned the government. They
relatively
time
.
to
unwarranted, since needs of both large and small business
department
advertising.
Trust
business, like all modern business,
of
also cash in coupons representing!
interest on the money they had
re¬
corded] sweepin g changes
a
JJ...
addition
in
will
bonds.
many
ac¬
remaining 100% invested in high- outstanding
est grade bonds but the wailings varies with the
of the beneficiary make poor trust
shifting tides
first
surprised to
were
.
.
that
the
despite high level of business
provide the background for years without the slightest indiway out.
True, your bank banking and its day-to-day opera- cation of readjustment. Thus far
never
be subject to suit for tions.
The volume of bank credit this year, the^ textile industry has
easy
securi¬
Government
show
learn
era
which has
in
S.
records
of
find ourselves
in
U.
—
their
made
marketable
We
time.
our
citizens
our
where
cases
be content to sit back and take the
the
and
a
provisions permit, you should not
only to go back to World War I
normal, natu¬
develop¬
will or trust
should al¬
ways emphasize the disadvantages
of restricted investing.
In
warns
Holds principal concern is in area of government
finance, due to government deficit spending and resulting
inflation.
Contends President Truman's credit proposals are
agreement the banker
main-
J.
^
economic conditions,
tivity.
for a'dvice
upon
the preparation of
Association
■
against perpetual optimism,
investment powers.
suggestions in connection with
or
on
Bankers
National Bank & Trust Co., Paterson, N.
ABA head in reviewing current
drawn that the Trus-.
broad
Whenever called
investment, and elab-'
diversification principles. Says present level of stock
prices invites cautious selection of individual stocks. Concludes
orates
has
'
.
changing con¬
that many trusts
It is true
are so
American
President,
Chairman," First
degree of freedom of ac¬
ditions.
today
.
By f. RAYMOND PETERSON*
tion in the light of
Tracing trend of liberalized
offers
its com¬
use
amending the present laws to the
end that Trustees be given a rea¬
Members, New York Stock Exchange
common
body
bined influence in the direction of
Senior Analyst and Consultant,
Merrill Lynch, Pierce, Fenner & Beane,
investment in
this
that
Thursday, May 25,1950
Government in 19S0
connection it would be my sugges¬
tion
.. .
Business, Banking and
Pennsylvania statutes remain
pretty much tied down.
In this
~
-
-
people who are
you
administering trusts restricted by
Philosophy of Trustee Duties
By JOHN F.
course
Chronicle
Commercial and Financial
The
Par* :0
price of winning that war
It!
was
an
inevitable
^
rrbe
d6bt
s
„
well,
haLbeb\nsemair?remen^
Never before i* history
broad- Nev€r bef°re 'V'wso
has a pubile debt beer\
many
millions of people.
About $171 billion of
held by m>n-bank
Ualliv.
decreased
to
1946.
Of
hilli011
about
from its high of
in
the deb
-vestors.^T^
p
$116 bllb
current
ariy
k-held
bank
The Commercial and Financial
. . .
Federal Reserve.
Since 194-3
amount of the debt held by
the
Ihe
investors has increased.
These are healthy developments.
The total national;, debt reached
its postwar low in the spring of
1948.
Since that time, however,
it has increased by more than $5
billion
Further increases are,
coming as the government's new
deficit spending program gains
jnomentum.
Washingt
JV?
a
■
recent
approval by both
houses of Congress of larger social
security benefits, as distinct from
broader social
security coverage,
forceful
a
dilemma
example
the
the
of
faces
government
and will continue to face as long
as
it engages in deficit financing
in
periods of prosperity.
the
dilemma:
ment creates
rowing
and
later
spend
larger
offset
the
would not
see
country.
This latter would
by having
the
government
lend money for the establishment of the
co-ops
and the REA would retain title to them. When
government owns around
to
sums
can still shoot
loss of freedom here; he would
are
they refer to the vast power trust lobby;
Well, four companies in Georgia, Alabama,
Florida and Mississippi have just withdrawn
from the association, or the struggle) because
they are adjacent to
public power enterprises but for the time being are being per¬
acres
against
profitable
For
The
result
that
can
be thrown up*
lumber
the
industry, not alone on the
Pacific Coast but wherever there is this juxtaposition of govern¬
ment and private forest
lands, wherever there has to be this "co¬
operation" for the
saw mill operator to survive, is completely at
of the bureaucrats. The industry is estopped from op-
the mercy
posing,
the
carry
ously
march
I know of particular instances in which the Forest Service
has applied the heat to the industry to silence it and in which it
has been silenced.
of
public
power.
The private utility
industry has been
nicked just this much, of course, and this nicking of a company or
two at
to
see
a
time has been going on T6r many years.
It is not difficult
what the end will be.
'
The officials of these four companies are
gent enough to know that
not far off when
even
the Federal government
Have
will
move
notwithstanding their having been good boys.
in
on
them,
But having been
men
in such
a
And it
might be said that
government
must
holdings
or
move
before and
gone
now
in it will amply compensate the investors as it did in TVA,
a
■
■
.
position lost their freedom
■
•'
The
-•
man
Because he
can
no
choice.
ing.
dollars
burden
It
tempts
it
has
businessman who seeks to cash in
"to
exploit"
government
resources
It isn't
a
case
of his
being able to
<
the
own
his property intact, or of the private holdings being here and the
are
intertwined.'
way.
Through
no
doing of his the
proper-,
Undoubtedly the planners planned it that
:
v
;
■
*
cre¬
deficit-
clear
that
announcement is
neither
I
an
The
offer to sell nor a solicitation of an offer to buy
offering is made Only by the Prospectus.
any
of these securities.
NEW ISSUE
additional
of
American
borrowing and spend¬
should
the
bear
not
by
the
government
will
first,
Treasury's
result
from
Convertible Prior
Transferable Subscription
from
revenues
the
second, an increase in Federal
expenditures
for
domestic
and
welfare
to
July 1, 1960—Par Value $100
Warrants evidencing rights to subscribe for these shares have been issued by the
unsubscribed shares and, prior to
taxes;
and
social
3V2%
Company to holders of its Common Stock, which Warrants expire at 3:00 P.M., Eastern Daylight Saving
Time, on June 2, 1950. The Underwriters have agreed, subject to certain conditions, to purchase any
two
in
decrease
a
Cyanamid Company
Cumulative Preferred Stock, Series B,
The increase in the Federal debt
year
498,849 Shares
to
Result of Increasing Federal Debt
things:
-J
.j.
make good on the
promise behind
its original dollars.
and after the expiration of the Subscription Warrants, may offer shares
and on terms as set forth in the Prospectus.
of the Cumulative Preferred Stock, Series B, 3b£%, at prices
quite
purposes,
apart from the social
security pro¬
gram.
Every one in this country
aware
that
millions
of
the
burden
individual
ness taxpayers
must
inte§rity °f
h
debt and the
ernment
to
Rut
pledges of
a
per
Share
national
gov¬
our
to
are
relief
Pfden of taxation
vided is
$102
remain high
its
whatever
Subscription Price to Warrant Holders
upon
busi¬
and
our
people
fulfilled.
ultimately
be
Copies of the Prospectus may be obtained in any State in which this announcement
circulated from only such of the underwriters, including the undersigned, as may
legally offer these securities in compliance with the securities laws of such State.
the
from
can
be
is
pro¬
step in the right direc¬
tion.
Heavy taxation is a drain'
purchasing power of the
taxpayers. It lowers their stand¬
the
White, Weld & Co,
ard of
living. Heavy taxes melt
Way the funds of business and
mdustry
that
expansion
and
normally
go
into
modernization
plants, capital goods
utlays, and increased industrial
Production
and
employment,
are
national
the mainsprings of our
wealth.
source
of this
nomic strength.
and
-
They
are
The First Boston Corporation
Harriman
Goldman, Sachs & Co,
Lehman Brothers
upon
on
Amer-
page
..
.
-
Kidder, Peabody & Co,
,
•
Merrill
Lynch, Pierce, Fenner & Beane
Stone & Webster Securities Corporation
Lazard Freres & Co,
Union Securities Corporation
the
country's eco¬
depends
Glore, Forgan & Co,
Ripley & Co,
Incorporated
Smith, Barney & Co,
The whole world
Continued
Blyth & Co,, Inc,
of
ndustrial
nvies
in
still shoot
expect to take the consequences.. But in this instance,
businessman has
■
•
to address himself would
seems
say no, this is no loss of freedom at all.
off his mouth.
on
-: v'.
A•• -jyAy A;-•
,
the saloon to whom Mr. Truman
undoubtedly intelli¬
with their playing ball, the time is
penalty of further dilution of its
purchasing power through ever¬
growing and ever-widening at¬
eal
*
than perfunctorily, legislation to which it is vigor¬
opposed and which the Forest Services wants to advance
more
its domain.
They fear and
undoubtedly have been given to believe that the present "coopera¬
tion" will not continue if they persist in the
fight against the
This
government
■these
*
obstacles in his way; if he is in bad
no
all sorts of obstacles that
is
mitted by the public power bureaucrats to survive.
through social security taxes. The
public deserves this value, with¬
out
penalizing those who produce
and save, and without having to
°u
some
that people have set aside
power
is
this
locating a mill on his own property must be able, for
venture, to work the adjacent government holding.
this, he, of course, pays a fee. If he is in the good favor of the
they throw
when
in
mill operator
favor, there
Carlisle Bargeron
land
13 million on farms and owned
by industry. The government's
holdings interlace the industrial properties. Here will be a private
holding, next to it will be a government holding. The private saw
bureaucrats
as
forest
of
acres
Federal government owns more than 10 million
a
the National Association of Electric Companies.
This is what the leftist propagandists refer to
million
purchasing
previous
it
any
90
government holdings there.
and
now
advertise¬
newspaper
country while farm and industrial holdings constitute around 345
million acres. The "cooperation" which the lumber industry must
give to the bureaucrats, however, is pointed up on the West Coast.
In the Douglas fir
region of Washington and Oregon alone, the
tifes
borrow
There
has
probably consider this nibbling away by the government at its
critics as nothing more than
they deserve.
The second case concerns the lumber
industry. The Federal
them, and in the knowledge also that when the government does
a
In
company.
and
Of course, the fellow in the saloon who
off his mouth
mainly through their organization known
>1
bottom
so
nearing retirement age with handsome retirement pay awaiting
must
favor old age benefits.
But I be¬
lieve the public is entitled to the
full
benefit
of
the
purchasing
this
companies
of all the rural elec-
owner
different situation.
him.
by bor¬
it
larger
make
me
be
original loan is repaid the REA, which is
also the government, takes over the ownership.
The .private utilities have been fighting
financing.
Let
on
govern¬
sagging
its
bv
the
a
began at the
utility
badly scarred in the long struggle that has
or
and
of the
power
ated
tax
years as
who
State
money
new
to the conclusion that the struggle
«'
the
when
spending,
little
This is
power
the
sound and
from social security and
private pension plans.
few
trie co-ops in the
be accomplished
/
that
7
'
private
Rural Electrification Administration to
dupli¬
cate their transmission lines and to end
up in
providing
receive
in
man
'
bloody murder over the government moving
Probably he is not near enough to the retirement age
philosophical as his neighbors. And certainly a poor
future is being offered to the countless
younger and subordinate
against which there has long bfeen the steady
encroachment of government. Just now,' they
are
struggling against the; ambition of the
taxpayers. It places an
even heavier
mortgage upon the
future
of... many generations : of
power behind the money the pub¬
lic expects
and, is entitled to
a
iri
First, there is.thq experience of the
cost to the
syphons away the real purchasing
o
Now, the next time Mr. Truman asks the Republicans to show
is this creeping socialism which
they talk about,
they might cite these two experiences of business with
government.
The volume of manufac¬
trade and employment is
high. Under these circumstances,
the government's outlays and its
debt prudently should be reduced.
There
is no justification for a
larger government budget.
This
increases the debt and its interest
lasting economic or so¬
cial advances.
It is an unneeded
stimulant for purchasing power.
In the long run, it undermines the
soundness of the dollar and the
value of accumulated savings.
It
is
employes.
•
come
Carolina there is
South
reached the top of his
ments he is
screaming
him just where
good.
without
on
By CARLISLE BARGERON
<
turing,
taxpayers,
Over in
to
^
precisely at this point that
one of the nation's present major
economic concerns originates.
General business conditionsare
they, the officials, have
no longer worthwhile.
Ahead
It is
is
(2155)
is
From
,
non-bank
The
Chronicle
billion is placed with*
$18
dpbt
Number 4910
171
Volume
32
May 19, 1950
- ;
'
A
8
Long-Term Market Trend Bullish
By J. H. ALrLEN
Special Partner, Cohu & Co.
Members of New York Stock Exchange
Comparing
which
current stock
might
similar
a
develop in
few
next
excellent
1950
the
Says
1924
vs.
market
at
the
present
time
occupy a poritmn somewMt
similar to 1924. As shown on
the
just
ting
that
at
time.
(7)
Barring
of
exist
between
of the bullish factors which
today,
few
a
in
powerful form than
26 years ago.
periods
brings
more
the
1950 with
—
greater
strength
the
current
1924
and
In
from the
readjustments
Electric
The
latter
has
already
large proportions and is
more
in
rapidly than radio
War
research
I.
The
alone
sub¬
peration.
the
to
In
of
powers
For
World
In¬
example, the
prices in 1946,
Industrials,
pared
47%
Deflation
war.
prices
ities
was
only
was
with
break
in
as measured
in
continue
comparison,
without
the
(4)
Business activity remained
higher. A
every
S.
the
in
economy
a
U.
stock
phase
of
is growing.
securities is
business.
Interest in
the uptrend, with
on
exchange
ahead of 1924.
volume
already
World War I pur¬
chases of government bonds
ated
new
a
of
some
of
crop
whom
cre¬
investors,
later
turned
to
stocks.
Individual holders of gov¬
ernment bonds are more numer¬
today.
ous
added
an
In
addition,
factor in
isted
have
we
mutual
creating interest where
year, leav¬
ing
nineteen-twen-
with
war
funds,
none
ex¬
before.
15 years
ahead in 1924.
Market Moves Similar
(5)
Recovery set in more
quickly, another good sign. The
There is another
International
of number of
bull
any
continues
grade
tween
1950
and
1924,
excellent,
stocks
doing
speculative issues.
so
action"
far that
or
tion could
a
the
cular
which
excellent
DOW-JONES CLOSING INDUSTRIALS:
next
than
&
of consolida¬
few
-
I
Mf
ft
Works—^Cir¬
Auchincloss,
52
Wall
Parker
Street,
&
Co.—Analysis
Inc.—Complete
-
-
Street, New York 5, N. Y.
.,
,.
Rochester
&
Pitts¬
&
240
Also
-
available
is
~Jr
110
Petroleums
JfA/
tV*
UM
111
\
/
100
1
1
w®
V
65.52
V"l
X 1 A/i
/
urrVbft J*
khi ■ w f v
J»V
J.
1
/
lAI
1
in"
is
—
L
a
d
J 1fi?iV
Limited—
20
tttll i«al
iw»]iwoJ Ittl
IIMJ
Co.,
1 Ittilflw [IMOl
1944
U«V1
Mfl IM9
Wall
M.
Kidder
Street, New
;
Southern
York
Utilities
Inc.,
44
Wall
&
5,
Lion
Oil
Com¬
Rollins
Street,
York 5, N. Y.
I2C
40
IWsJlttJ
1
pany—Analysis—Blair,
&
Power
Memorandum—G.
Co.,
White,
Y.
Water
Inc.,
York 5, N.
Company-
Saxton
A.
&
Street, New
Pine
70
Y.
Also available is a card memo¬
on
Michigan Public Serv¬
ice Co.
Control—Analysis
U. S. Thermo
State
148
Co.,
&
Street, Boston 9, Mass.
Walt Disney
Productions—Anal¬
ysis—Batkin & Co., 30
Street, New York 4, N. Y.
Broad
Miiloy Nominated Pres.
Of
Municipal Forum
succeed
to
year,
Robert T.
& Co.
was
Forum
during the past ye^rn
meeting will be held
the LawyersiClum
annual
June 28,1950 at
Edward
Vice-Presi
McGrew,
D.
Northern
nominated
Madison Gas and
Electric Com♦
£anyoTcSEecial
225 East
report — Loewi &
Mason Street,
waukee 2, Wis.
Also available is
Le
Roi
The
Trust CO,
Company.
a
Mil¬
study of the
as
year.
Curvin of
S.
Winthrop
Smith,
nominatedI w
Secretary and E. Joseph Sen
of B. J. Van Ingen & Co., Inc., as
Treasurer.
Nominated for threeBarney & Co., was
year
terms
Daniel B.
senior attor¬
of
0T
®ar*)\
Inc. Gears
Port
with
of Fiduciary
T.
New
Rudolph J.
Counsel,
Ragsdale of Lehman
was
one
wer
Governors
as
Goldberg,
Authority and
& Co., 15 Broad
Street, New York 5, N. Y.
'
Vice-President of tn
Milloy
ney
Company—Analysis—
»
Shields
of
partner
New
Eastman, Dillon
60
(1)
York 5, N.
Tide
FC,
Dept.
Co., 40 Wall Street, New
President for the coming
Iowa
160
160
60
Ytl_
Stone & Webster, Inc.—Current
been
200
20
Tlttjl I«<1
Also available is a brief review
of the Cement Industry.
has
Co.,
100
7-
yw
40
&
Co.—New
& Co., 10 Post
Office Square, Boston 9, Mass.
of
N. Y.
140
^
Cement
dent
Memorandum—A.
220
/
it
Riverside
a
International Nickel
Company—
240
&
50
analysis—Lerner
Street, Newark 2, N. J.
260
i
Inc.—
Co.,
Hilton Hotels
Corp.—Circular—
Richard E. Kohn &
200
200
Co.,
&
Broadway, New York 4, N. Y.
320
300
_
Car
Dreyfus
5, N. Y.
Glass
Fibers, Inc.—Analysis—
Amott, Baker & Co., 150 Broad¬
way, New York 7, N. Y.
,
J44
n n
220
Steel
—
Albert J. Milloy, Assistant Viceof
The
First Bostoii
study of President
Consolidated Edison Company of Corp,
has
been
nominated i
New York.
President of The Municipal ro um
of New York for the coming
or
340
ijfc
JJfl
Analysis
Co.—Analysis—
Hickey, 49 Wall Street,
New York
Co., 20 Clinton
280
prices—The First
Corp., 100 Broadway, New
York 5, N. Y.
Railway
General
■"
Com¬
Boston
randum
Electric
England
Philip Morris & Co. Ltd., In<vTable of related
New
Bulletin—Milner Ross & Co., 330
Bay Street, Toronto, Ont., Canada.
~~
?<M 07
New
—Raymond
Vilas
280
60
Water
N. Y.
burgh
"buying spot."
[industrials]
1J
Northern
Weld &
&
Street, New York 4, N. Y.
Buffalo,
another
"
Company, Inc., 120 South La
Street, Chicago 3, 111.
pany—Analysis—Ira Haupt & Co.,
Ill Broadway, New York
6, N. Y.
Co., 120 Broadway, New York 5,
Pine
com¬
weeks
-
Co., 64
analysis—Stanley Heller & Co., 30
360
i
300
*
360
^
320
*
Bran iff Airways,
"™~-
J
Stocks—
—Bond, Richman & Co., 37 Wall
Street, New York 5, N. Y.
re¬
develop
provide
&
Street, New York 5, N. Y.
report—Write
Birtman
time. This
1
340
Sugar
Armour & Co.—Circular—Ernst
*
360
selected
N. Y.
present
Bulletin
—
Masterson
Pressed
and
Funds
Generally—26
Redpath,
re¬
3W.17
310
Ave¬
'
York 5,
1921-1950
one
Madison
654
Indian
—
has
might
would
special trial
Pension
for
American
mitments appears warranted.
Any
months
hedge selec¬
special
Foreign Power—
Circular—Herzfeld
&
Stern, 30
move
of
Jr.
New York 21, N. Y.
Broad
is up and the outlook bull¬
which
33
American
Leadership
with high-
at any
Retention
also
•
temporary, with
Company
C.
North
Bonner, 50 Broadway, New York
The
period
Wall
Top? —Current
offering an analysis of
probable stock market reversal—
West
opinion, the long-term
my
Market
Stock
bulletin
Brochure analyzing the outlook—
Lawrence Turnure & Co., Blyth &
sumption of the rise thereafter.
trend
Street, New York 4, N. Y.
5, N. Y.
better
Co., Board
Bldg., Chicago 4, 111.
Salle
"secondary
a
occur
should prove
ish.
Corp.—Memoran
American
Aviation, Inc.
—Memorandum—Floyd D. Cerf
points in the
market.
°»
yield and market performance
over an eleven-year period—Na¬
tional Quotation Bureau, Inc., 46
events
13, 1949 to
the present has already reached
record-breaking proportions.
In
terms
Averages, both as
Bureau
Frank
—
rise from June
over
similarity be¬
tation
issues
Goodbody
&
Co.,
115
Broadway, New York 6, N. Y.
Current Situation
In
Maid
Muter
industrial
to
Investors
the long-term trend.
The
thirty-
the
Averages and
over-the-counter
five
Stocks
prevent the expansion
out.
reaction
stronger
position.
Jones
Incorporated,
may
gone
fi
of Trade
Russia, World
in
real
depression followed
World War I, compared with
only
a "mild recession"
last
break
is
the
&
dum—J. P. O'Rourke &
nue,
to
Revised
Broadway, New York
Minute
com¬
offer—$1—Department 32, Bondex
Dow-Jones Industrials, it has gone
farther than the "first upswing"
commodity
but
those of the
on
to
showing an up-to-date
four weekly issues on
knows when the next conflict will
the
let
and
ties.
As
—
Unterberg
Over-the-Counter Index—Book¬
tions—current bulletins plus next
hold the key to the future,
confirming or denying our views
almost
less drastic. Commod¬
declined,
size
the similarity. As
a
matter of fact, the larger pat¬
tern in
1942-50 may imply that
any advances now may be larger
of the twenties. At present no one
The
first
wide breaks of 1920.
in
difference
the
not
are impor¬
building industries,
utilities, household appliances and
com¬
the
opinion,
tant
by the
24%
after
points versus four years
in 1921-24.
In my
larger than expected,
II.
stock
cov¬
does not destroy
than
Inc.
N. Y.
years
It did
New products and proc¬
should continue to appear
debt
were
War
more
fense, foreign aid and social legis¬
far
larger.
The Federal
opinion, it adds
long-term outlook.
after
severe
little
lation
recu¬
(3) Postwar readjustments
less
that 1942-50
than eight
periods is
a
spending is greater
than in 1924, with the cost of de¬
our
bullish
two
ers
Shoes,
Front
the
between
distinction
was
To
rallied
greater
The
new
War II
higher and the required
through
their
deficit financing unquestionably
postwar peak, four years and eight
The credit base is
months after V-J Day. The mar¬ inflationary.
broader, money easier, national
ket after World War I took
al¬
income
bigger
and
population
most a year and half
longer. This
greater. Population increases,
implies
dustrials
advances
later
highs with v;rtually
interruptions of importance.
no
Miles
Bissell &
Laird,
stocks used in the National Quo¬
Sharp
(3)
strides
are
government
the
April, the Dow-Jones
General
through the 1950's.
rav¬
of
ranges
esses
in
major wars.
(2) The present market required
recover
and
World
low
war.
at
—
parison between the thirty listed
ending
(3) developed just under pre¬
The trading
(2)
stantial.
and
inherent
both
Massachusetts
industrial stocks used in the Dow-
120
made
—
in
persistent
and
steady
C3S6S.
40 points
after
outlook:
ages
5, N. Y.
new
glance at it shows:
(1) The rises from the points
marked
(1) to (2) were long,
and
big impetus. West-
a
—
Co., 61
of
growing
(1) In the first place, both fol¬
less time to
sales
assumed
case
resemblance
the
nineteen-
increased
Railways
Analysis
Zippin & Co., 208 South La
Sail.
Street, Chicago 4, 111.
memorandum—C. E.
to
bank stocks now
r„
New York 5, N. Y.
Mexican
Meeds, 120 Broadway, New York
and
vision.
A comparison of the
the
out
pres¬
even
was
the
effects
Comparable expansion is
beginning now, with, for example,
new
metals, chemicals and tele¬
helped
are
Its
p0Wer
Corp., 120 Broad
peaks.
rallies
The chart
gen¬
soared.
Many
two
during
with
inghouse
the
1924.
generate the 1923-29 rise
I.
&
memorandum-New
York Hanseatic
way,
Legal in Massachusetts — Indi¬
vidual studies of New York City
Light
Card
—
pictures the Dow-Jones
Industrials from 1921 to 1950.
A
from
flying
later
cal" received
J. H. Allen
a
War
N. Y.
Mexican
Ltd
legal for Savings
Bank investment in the State of
radios, automobiles, refrigerators,
washing machines and
electric
appliances.
"Everything electri¬
state¬
present situation and
ent
expansion,
resemble
the masthead,
patterns
price
reached
World
twenties
Never-
similarities
Their
Hentz &
York 4,
into
ceding peaks.
a
number
earning
before the
by war-born scientific ad¬
appeared
sibly lie ahead.
theless,
Both
developed
1929 may pos¬
ment.
months, followed by an
new
high ground.
form
"flag"
formations.
many
advance
after
from 1923 to
broad
of
vances, usually follows every con¬
flict.
Such a period
rise
That's
concerns are
despite high taxes and gov¬
regulations.
erated
comparable to
long
Rela¬
"in trouble."
are
(8) Industrial
advance
the
of
ernment
another
b i g
position
money now than
war,
with Rus¬
war
sia,
record
Co., 60 Beaver Street, New
with
financial
Many
more
Industry—Anal¬
Electric Utility
ysis of the outlook—H.
flags
The
tively few
under
way
under the
large companies is better.
get¬
to
long upswing and a short decline
—short compared with the pre¬
1948.
(6)
bull market
was
only 2.4%
of
ter
big
a
understood that the firms mentioned will be pleased
send interested parties the following literature:
It is
Each consists of a very
striking.
another
peak established in the last quar¬
may
chart,
provide
national output of goods and serv¬
ices in the first quarter of 1950
was
Recommendations and Literature
a
ceding rise—then a trading range
wonid
"buying spot."
long-term point of view,
a
is
move
replica
of the earlier market.
Nevertheless, the resemblance is
market reaction that
any
weeks
Dealer-Broker Investment
bigger, broader, larger-scale
much
of rising prices, Mr. Allen
years
ahead.
move
1942-50
Thursday, May 25,
. •.
have
duplicated the pattern made by
the
price movement in 1921-24,
the base period for the long ad¬
vance.
The
two
markets look
The
Chronicle
is this
might prove significant. It
—stock
prices since 1942
alike.
market position with that in 1924,
followed by four
was
foresees
From
Commercial and Financial
The
(2156)
nominated
as
Broth^
Governor
year.
.
Central
Assist
Baf°V
Bank & Trust Co., was
Chairm
Otto
Goettert,
H.
Treasurer
of
t
Commercial and Financial Chronicle
The
4910
171 -Number
Volume
(2157)
close
1929 Again—Only Woise
to
the
low "of
lished since 1934.
These
By A. A. MOL
40%
.
the
They also disregard human
nature, as illustrated by the thesis
that the men who apply brain to
property for the purpose of pro¬
.
have
measures
effect.
estab¬
:
ob¬
jective of changing the trend of
business
in
upward
direction.
9
earnings will lie below the worst
in 1932.
In
article
an
where,
I
else¬
published
pointed
out
the
that
all and stock market has been more con¬
They were constructive pieces of sundry, collectively are the moral servative than business, and ex¬
big ammunition which the gov¬ inferiors of the underprivileged plained why share prices have not
Asserting the postwar boom is based on large-scale business
can't
even
expression
to
boomtime
provide
ade¬ given
ernment had on hand to shoot at who
and consumer gambling, resulting in a highly vulnerable posi¬
quately for their own families.
earnings
in
the
old-fashioned
real
depression when
it
came.
manner.
For the same reason, i
tion in credit, commodities and producing capacity, Mr. Mo!
As long as Washington fights
They were used to stem the inter¬
nal convulsion in business in 1949, the laws of nature, and disregards believe that a return of 1932 stock
concludes, despite governmental ameliorating efforts, business
which was so insignificant that it human nature, instead of endeav¬ prices, when the Dow-Jones In¬
earnings will fall below 1932.
hardly showed up in the rate of oring to make both work on be¬ dustrial Average reached a bot¬
hand to mouth basis and specula¬ consumer retail
half of the nation, we know that tom of 41, need not be expected.
buying.
We are told that the business
Mol & Co., Members, N. Y. Stock Exchange
tion in commodities
is
to
Analysis shows that
situation in the United States
sound because there is "nothing
liquidate."
Inventory
This
opposite is
true.
While
the
the
the
conservatively
than in
1929,
the
is
than
before. ;
During
the
ever
past 10 years,
the nation has
produced
goods
at
an 'y
unprecedented rate.
Mol
A. A.
boom combined are the
greatest on record. We have pro¬
duced goods to supply our Allies,
to
war
a
on
carry
on
our
own
make up for wartime
shortages, to bring production fa¬
to
hook,
inventories
and
cilities
of
con¬
including those in
consumers' hands,, to the highest
level in history, and, simultane¬
goods,
sumer
ously, we have, after the war, slipplied the citizens with enough
products for the highest rate of
consumption.
" '. \ :
r {
The
about
close
aggre¬
and
that,
come
thereby,
that
that, today,
as
we,
simultaneously,
which
goods
and
away
the
a
shot away during
were
remains
edge for saving
ment
for
the
impossible to continue in¬
definitely producing more than is
being consumed. Sooner or later,
the volume of national
production
decline, not only to the level
of simultaneous
temporarily
to
consumption, but
below
make
that
This
in
level
previous
for
up
overproduction.
is
cer¬
a
tainty and not just theory.
If
the
nation
postwar boom
shrinkage
still
count
and
a
had
that
rose.
cash
a
serious
influence
which
those
spoil
on
management.
circumstances, how¬
the influence
ever,
omy
would
not
calamitous.
boom
was
the
on
have
had
econ¬
to
Unfortunately,
not operated
be
the
cash
on a
basis.
the
assume
The
We may reasonably
that,
the
automobile
when
annual
New
golf tournament of
Curb
Exchange
York
■
capacity now in
much larger in in¬
excess
This advertisement is under
for sale,
or as a
The
Surplus Capacity
circumstances to he considered as an offering of these securities
solicitation of an offer to buy any of such securities.
offering is made only by the Prospectus.
no
which will have to stand idle for
worst order.
1920s, we were supposed
a new world in which
In the
to
live in
enough
learned
had
business
excesses
and
thereby
depressions obsolete. Today,
another kind of new world,
prevent
make
in
management of
supposed to do
government
economy
is
Philip Morris & Co. Ltd., Incorporated
to
130,610 Shares Cumulative
Government
per
share)
Subscription Price $100.75 per Share
all United
bodies
to¬
Since the end of 1945,
States
Preferred Stock, 3.90% Series
(par value $100
the
the
gether have taken in slightly more
cash than they have paid out to
333,077
that
per
share)
Subscription Price $48.00 per Share
Upon analysis, we find
ing them.
Shares Common Stock
(par value $5
government has, with all the
means
at its disposal, egged on
business excesses instead of curb¬
the
postwar boom has been
the
operated in the well-known oldmanner and that it is
the degree of
position built up in
^Business credit in the years credit, commodities and excess
iQdc
anc* consumer credit from producing capacity.
to
"
the
of
mree
times
present
as
increase
high
have
1920s-
The
credit
«nd
of
much
it
were
as
which
oiortgage
only exceptional in
Credit
speculative
panded at rates which
place
expansion
is
is
in
in
phenomenal
of
the
poorest
By going into debt on such a
urge scale, business and the con¬
sumer are
For
gambling.
n§ up
moved
have
We
much
never
sin
economic
and we must be prepared
proportionate
punishment.
When the boom ends, it will not
bring a mild setback but flagrant
the
1920s,
were
up anc* made more rePeople could progressively
number
to
a
as
near
as
possible
on
a
the prices
may
Warrants, the Represen¬
offer shares of Preferred or Common
and pursuant to the terms and
conditions set forth
Prospectus.
in
be obtained in any State only from such of the several Underundersigned, as may lawfully offer the securities in such. State.
Copies of the Prospectus may
writers, including the
1948 of $8,066 billion
cash deficit of
$1,254 billion
calendar year
.
buy
at
Underwriters
\
government took
of important actions:
1949.
(b) Restrictions on consumer
linm
credit were removed.
ork with
smaller inventories in
(c) Bank reserves were pro¬
^ °P°rtion to turnover. Through- gressively reduced.
(d) Margin requirements on se¬
tn k
Peri°d, the tenedency was
Sa(* deliveries of freight
Stock
in the
expiration of the Subscription
Last year, our
calendar year
of
P.M., E.D.T., June 5, 1950.
collapse.
horizontally. Besides that,
decade
Prior to the
years
a
than five years,
for subscription by its Common
and conditions set forth in the Pro¬
Subscription Warrants expire at 3
tatives of the
for
(a) The Federal Government
switched from a cash surplus in
the
spectus.
committed as
as in recent
leadto 1929, commodity prices
more
is offering these shares
Flagrant Collapse Ahead
the sharp¬
took
The Company
stockholders, subject to the terms
ex¬
about
quality risk.
cn
manufacture.
Tournament Jnne 20
fashioned
Over-Expansion
4
Curb 5 & 20 Coif
how long
Only
earnings, on ac¬ the economy.
The influence of
high break-even points their
operations has not been in¬
the long period of easy
flationary on balance. However,
of
us
The creation of surplus capacity,
its
business
Under
r»e
have
we
of
profits
est
This does not tell
from punish¬
same.
operated
basis, the
production would
on
in
have
overall
us
from
able.
hope
excesses
decline of 80%
Building and Autos the Pulse
have be¬
more
helpless
the
a
long periods, is gambling of the
It is
order
thereby to aggravate its evils.
Washington can continue to do the
that, postponing.
The big boom now
the government will succeed in
is being carried forward by build¬
applying a "new" kind of knowl¬ ing
operations and
automobile
There
oi
present level, a decline of be¬
tween 50% and 60% is more prob¬
the
.
top of
given
on
were
war.
must
and
against downtrend.
have produced more than we con¬
the
Instead
endeavors
members' Five and Twenty Club
committed.
dealers
in
the
aggregate
are
will be held on Tuesday, June 20,
recently,
Today, the laws of nature do loaded with the maximum inven¬
top in commodity prices lots of
at the Wheatley Hills Golf Club,
things for us which they tory they can carry, the day of
was
East Williston, L. I., for all mem¬
reached,
have
inventories did not do in the
This
past, because reckoning will be at hand.
bers of the
shrunk, but only to an insignifi¬ scientists have studied these
Exchange and their
laws item is far from the only possible
cant
extent.
Besides
that,
in in
Philip Diamond is chair¬
detail, and have learned more immediate cause of the downturn, guests.
counting inventory risk, for sell¬ than our
man of the tournament committee,
ancestors
knew
about but it is, at least, one where we
ers and
buyers alike, the size of
which also includes Harry Brickhow to apply them and how to can keep a finger on the pulse.
order books has to be taken into
man,
Henry
Goldberg,
Vjictor
make them work on our behalf.
Having failed to use prevention,
consideration. Forward buying is
Grande and Milton E. Reiner.
^ If
Washington
followed
the our government will then do its
immensely more prevalent than it
The day's chief prize will be the
methods of the
scientist, there level best to ameliorate conditions
was in 1920s.
would be reason to hope that in¬ during depression. A tremendous Curb Five and Twenty Club golf
Business has a large gamble on
deed something new under the Outpouring of Federal funds un¬ trophy which was won last year
commodity prices.
sun would be produced.
Whether doubtedly will prevent a shrink¬ by Joseph F. Reilly for the third
In 1929, it was not recognized
or not it
would work to perfec¬ age in the volume of consumption, consecutive year and which has
that the nation had. indulged in
been returned to competition by
comparable to that in 1932. ;
industrial
overbuilding. : Never¬ tion, first crack out of the box, is
Mr.
Reilly.
James J. Hopkins,
an open question but, at least, we
Nevertheless, unemployment,
theless, when the denouement
President of the club, will pre¬
might expect that the new type falling commodity prices and ex¬
came, its facilities were not used
side at a dinner in the evening
of sequence of events would be cess productive capacity will in¬
again to the full until the war
which prizes will be
more
constructive than the old duce business units to wage war during
pulled us out. I pointed out that,
awarded.
and familiar one.
v j
against each other in order to re¬
during the past decade, we have
The measures actually taken by tain for themselves the largest %, The Five and Twenty Club is
produced more than we consumed
composed
of
Curb
Exchange
simultaneously. This could only Washington in the line of eco¬ possible share of the reduced out¬
It is my judgment that, not¬ members who have owned seats
be achieved because the degree of nomic management, have merely let.
government inter¬ on the Exchange for 25 years or
industrial construction during and the objective of fighting the laws withstanding
of nature and of postponing their vention, the bottom in business longer.
after the war has been so
also
nation, own more in manufactur¬ existence is
ing plant and in national inven¬ dividual
industries, and spread
tory than 10 years ago,_ demon¬ over a much wider
field, than it
strates that during this decade we
was in 1929.
all
its
great
fact
sumed
-of
up
we
much
outcome
merely is to postpone the evil day
*
The height
and the duration of the war boom
and peace
world
inventories,
over
point is that it has been used
the
for
abundance
after the
gambling
the
business
hands
further out on
limb
com¬
gate business inventories kept on
climbing and climbing, while the
quantity of goods in consumer
aggre¬
gate, today
expired,
expansion has
tremendous rise in
a
control
business,
in
credit
OPA
Notwithstanding
statements by all and sundry in
more
haved
Inflation
after
modity prices.
be¬
has
ket
rapid
caused
stock mar¬
the
time,
We can argue over the reasons
why this big ammunition was used
against so small a target.
The
absent.
was
ducing
curities
were
reduced
to
50%,
LEHMAN BROTHERS
^
May 23, 1950.
GLORE, FORGAN gs? CO.
J
10
<2158)
The Commercial and Financial Chronicle
integration.
By A. W. ZELOMEK*
tory
measures
email.
find
Perhaps
that
not
that
reason
businessmen
many
I
do
to
seem
be
for
results.
and
ruled
areas,
political
trends outside
half billion
United
States.
the
old
Now
dilemma
if it
even
the
aid
were
With
ports and
1949.
take
us
adjusted to
look
a
at
Britain
ex-
be
partner in
a
they European economy.
In 1947, we
British plans strive for the
exporters,
of
course,
the
is
have been subsidized.
find that 45% of
-
exports were
corporation
different.
Their position
is
influenced
greatly by
political
de¬
velopments
that
political
Thus
selves
con-
what
like
sequences.
today's
frank
and
requires
and
to
subject
a
to
us
honest
consider
be
with
very
trade.
as
American
Trade
fact
Balance
.
,
-
.
.
.
we
must
that
also
United
policy has
m
.
,
ECA has been
think
It is not
necessary here to talk
at
.
.
!"£?, ?
which
a
failure.
;
T
I
recognize the
States
some
foreign
respects
been
realistic view of what is
happening and what may be expected to
they have to get dol- follow,
by selling goods to us, or dol¬
When
lars
have
to
sent
to
gifts, loans
ments.
them
in
tamly
invest¬
or
v
is
being
,
the
war
,
countries and in other
written
,,
,
ended, there
cei-
immediate need fo
was a
economic relief in war-devastated
•
Much
about
be
will be and how long West-
role
of
Western
Ger-
*
Germany can exist as a part
split-up Germany. A sharp
ern
of the
industrial
depression
in
Western
£ermany js already threatening to
attachment
attaenment
nf
01
wS^'Serman
of. their
the form of
un¬
the
Thp1* simple
<;imnlp
States. "They either
have to take dollars out
or
less
what
The
in the United
reserves
or
now
there
America's balance of trade
were
no
where
areas
foodstuffs
to
feed
ST
"to
already the
will have to rely on
American subsidies if it is to sury-ve ag ^
near_to-death,
called
para¬
for
creditor nation
Such
•^TPPrt^tnipt^
under
^g^irtheC'vear^
an
Either
by
-our
of
age
world
trade
pressing trend for the world
The
omy.
great
second
competition
manufacturers,
political
for
and
a
pressure
for
rw
4.
imports
was
.
quite
the export
surplus
ly.
ixports
this
small
,
so
that
dropped sharpwill
year
prob-
L.!
""Poris snouia snow
v^rv
However, this trend toward
balancing of our foreign trade
a
is
not
entirely encouraging. Our exports arc dropping because
formarkets
competitive.
countries
are
becoming
Production
has
in
increased
bigger supply of goods is
"
on
more
other
3ud
a\
1J
a
ailable
world markets.
A real
recovery of the capitalist
economy
might
have
world
brought
trade
a
a
Lit
much
a
balancing
it
would
;erent
of
have
form.
world
taken
By
this
time the flow
of capital from the
United States tc t t%er
areas would
,.
,
deficits,
and
East
foreign exchange
as
soon
as
We cannot
c„„u
net
achieved.
promises
achieved,
of
It
could,
by
the
were
that
seems
ECA
even
aims
not
most
the
be
ef-
ficient relief administration.
As
fact
matter of
a
number
a
now
of ECA countries
than they were when
ECA began.
*
There has been
countries
this
ops in Central
is
true
and
whoever
will
lose
the
the
foreign
ex¬
change position of most Western
European countries has
greatly
improved. Great Britain was able
to restore
gold and dollar reserves
"minimum" needed in order
to play its role as
center of the
to the
a
black market with the most
effec-
tive means — through increased
supplies which deflated free marprices.
Belgium.
ket
Holland also
certain amount
Unfortunately
that have
been
carry this out have done
out any
able
so
re—
the
to
with-
knowledge of what their
postwar market position would
be.
Production in France, Great
Brit-
Italy,
are
and
in a
stronger poviewpoint of for-
be found to
make
keep them busy.
°ri§inal ai™s °f EGA.
.Western ;Europe
to
self-suf-
27%
21%
48 %
44%
45 Va
36%
101%
82%
4.00
3.92
103%
1.60
4.22
38%
1.80
35%
4.09
36%
44%
3.00
41V:
44%
37%
4.80
67
56%
57
49 %
6.20
1.290
1.185
4.53
1,300
1,145
18%
311
287
0.90
295
252
4.80
19%
2.40
17%
4.10
17%
59%
52%
47
3.87
54 Vs
47%
42
45
4.35
37 V*
93%
84 Va
90%
80
46%
1.80-
92
-4.00
9314
*___
nas
has
4.00
105
4.28
8.00
•
233
been
3.43
239
4.76
105%
5.00
admitted
&
Bell
"
'
to
210
,
in
«.Keed in Burbank
.Financial Chronicle)
BURBANK,
Ohio—William
,
and Kenneth
E.
Reed
ing in a securities
offices in Burbank.
93 Va
84%
%
197
85%
198
94%
14%
73
170
88
98%
Joins D. J. St. Germain
■
Reed & Reed
to The
32%
14.00
ANGELES, Calif.—Joseph
(Special
95
are
(Special
to
The Financial Chronicle)
QPRTNTCvTirT
RnrHa
S°rf
ic
with
ty
n'
Tharles
T
9t
Germain
& Co., 1490 Mam^Street.
A
A. F U/J#—. Adds
E. Weltner Adds
'
(Special to The Financial Chronicle)
M.
m.
engagbusiness from
KANSAS CITY, Mo.—Edward
.vm.ojio
E. Mathews has become associated
with A. E. Weltner &
West
10th
Co., Inc., 21
Street,
exchange,
be dangerous to
assume that this is the result of
foresight of our international
planner5
the
or of ECA. We only have
remember the basic facts that
improvement was reached not
.
.
basis of expanding interain,
Belgium and Holland has national trade as
such, but hugely
been revived; to some
extent newr as a resu^ of import
restrictions,
plants and industries have
been especially for imports from hard
can
4.17
58%
West Seventh Street
But it would
w
built. But these
plants will depend
largely on exports, and no one
knows where the
export markets
2.00
25 Va
80.00
__
partnership in Kerr
'
Low
27%
Admit New Partner
LOS
Range
High
*309
Trust
National
Lockman
LocKman
Price
Low
4.86
Europe.
that
High
1,290
PHILADELPHIA—
Philadelphia National,,
dertU
1949
Price Range
Yield
1.30
62 la
CHICAGO—
Continental Illinois
First
Indie.
] )ivident
1949
44
New York Trust
ties between
and
3774
& Trust
Irving Trust
Manufacturers Trust
National City
Ger¬
1950
*
1950
102
Exchange
Guaranty
yield, and the
-
48
Hanover
First National
Germany will
drive
sition from the
industrial and agricultural
construction.
in
issues
V." .-'.i.;J,
.
26%
Trust
Chase National
Corn
return to
in
Price
Manhattan
Chemical Bank
j:,.
sterling bloc. In France, the Govplain and simi.le ernment has been able
to fight the
continued extensive
budget
deficits. Moreover, in the field
of
trade, unilateral restrictions are
greater
West
a
drive
overwhelming;
It
blame the adminis-
tration of ECA if these
The
restore the
and
ignores
unilat-
remove
possible.
*
Central
pi™*™iifmv
Germany economy
,
"normalcy."
be
.b.'VT,he
Mm», &ey:!i, ipso.
*
„
that
many to
budgetary
have
rtti
very uuie cnange.
rkH-mrme
of
Bankers
•
cannot be the basis for
and
deal
in,0
From 1948 to 1949,
exports decUned from about $15
bilhon to
about $11 billion. The
decline m
balance-of-pay-
Si restrlcUons o^oreign^
imply
"protec¬
tion."
balance,
T.
their budgets and
domestic
great
deficit
uetuzit
a
current
Current
NEW YORK CITY—
Bank
shlPments made
C
./V
...
on
dividend,
VUi*mvi
[93?
that ECA countries should
balance
econ-
would
international
finance
de-
a
be
ue
S
ECA money should not be
used to
shrink¬
a
and
to
uj
tcaie
cease
that Eu-
way
ments, and its vital products.
'V
Therefore it was stipulated that
or
however, would imply
of
its
sharp decline in our
by a sharp increase in
imports. The first of these,
a
in terms of its dollar
area
a
such
would
wuuiu
iupe
rope
ever, can come about in two
ways,
exports
in
high-quality investment
case,
price range for these 15
stocks.
wni
at*a
structed
big import surplus.
import surplus, how-
a
likely to be dynamic, the prospects
increasing amount of
the different bank
stocks.
to some extent, with bank
stocks
which are eligible under
the new
Massachusetts law on savings
bank investments.
This law will become
effective around July
1950 and
24,
already a number of investment houses
have published
compilations of the 15 banks that
meet the
requirements.
While there are
other banks which
should and will be con¬
sidered in any major
investment
program, these 15 institutions are
likely to receive an
increasing amount of attention. For this rea¬
son we have
compiled certain information
on the current
market
price, indicated
attention will be focused
This is
unbalanced than
The Western German
economy
not
appreciation in these
regarded as fav0rable.
•;
x.
%
keep in mind is that as the
effective dates for these
different pieces of
legislation approaches an
...economy
lyzed
are
for moderate
A fact to
human beings nor raw materials
the
i?"
necessity of reducing tariffs and
cold war in Berlin
machines to start up
ended, ship¬
producand
stepping-up our imports so tion
ment
of
goods
from
again.
Western
Immediate relief was
that foreigners can
continue to
Germany to
Eastern
jiecessary on a large
Germany
scale, and
buy in this country.
;
amounted
to
about
^
America was the only
8%
of
the
country that
And from the theoretical
point could provide 4t.
But ECA was shipment of goods made in 1936—
of view, it is
certainly true that not
a
year which still was little af¬
supposed to be a relief organiWestern Europe must have
large zation.
fected by the later
It was based on the
armaments
idea
export
surpluses in trade with
tboom. Shipments from the
Eastern
dollar areas and the United
States, u6
arS
F6COHStrUClGu<( cLTltl FGCOIl*' Zone westward will not have been
and that we as a
and
must have
There is also the fact that future
changes in dividend policies
of the banks
will, in part, be determined
by the action
taken on the FDIC
assessments.
As most bank
dividends have
been on a conservative basis in
relation to
earnings, there has been
the expectation that a
number of institutions would
increase these
payments sometime this year. It is
possible that any such action
will await favorable
consideration of the proposed
legislation.
These factors combined
with the recent enactment of
a more
liberal bill relating to trust
investments in New York State
and
the change in the
Massachusetts law which will
permit savings
banks of that State to
purchase certain bank
stocks, should have
favorable implications for the
market for bank shares over
the
remainder of the year.
are
more
l"eLe.
appears
some
Although gains
*
*the European
"rP°Lble
making
ppnnftrnv
the
tne
can
,
it is uncertain
now
passage
t
for
spread
length about the arithmetic of
lars
Even
many
In the next few minutes I'm
go-
well
as
at that time were more
realistic.
the eventual
pas¬
preliminary discussions, it
after the plans and estimates prepared
happen
Purposes and Results
ourselves
politics
will
ECA.
be little doubt about
to
seems
that it could add between 5%
and 8% to
operating earnings. Thus
the passage of this
legislation could have an important
effect on
the bank stock market.
*
During the first stage of ECA,
they recognize the fact that ecothe role of Germany was undedevelopments have political wonder that exporters ask them- fined and
ignored. Therefore all
and
although
form,
of legislation which will adjust the current
assessment
rates,
question at present is how soon. There is still
possibility that
nomic
consequences,
than
and
a
very good
be obtained in the current
session of
Congress which means the next two-to-three months.
The amount of
savings to the banks from the
passage of such
legislation will be uncertain until the final form
of the bill
is
determined. However, from
m-
subsidies in the third
year of ECA
than they did in the first. It is no
developments have economic
Federal
Legislation to reduce these
assess¬
is limited and is mainly
concerned with
progress has not been so
rapid as
measure
rather
.
.
positive action
currently being considered by the Congress
While there
sage
the
.
And
v
L
for this performance
may be that
investors
on the adjustment of
reason
more
opposition to the
a
^
subsidies, including ECA. Al- as well as the Paris plans ignored
though the dollar value of Ameri- each other s "Empire
interests
can
exports has declined, we see and both ignored the need for an
that they had to depend more on "integration' in
Germany.
A. W. Zelomek
selling near the high of the
range
only minor fluctuations have
would have been desirable.
Western
of
awaiting
substance
Europe
paid for by imports and only 10% into the sterling bloc, or for makby subsidies, including ERP. In ing London the center of West1949. these figures had increased ern
Europe's foreign trade and
to 61% for imports and
32% lor foreign exchange. But the London
is
completely
abroad.
our
parj- 0f the
ments is
.
situation
1946
still
are
Deposit Insurance assessments.
to what extent
see
stocks
past two months
been
experienced and most shares have shown little, if
any, improve-
are
European role where
a
the
,
accepted.
of
would
most
ment
or
in
let
While
-
integration plan to an extent that
it would not basically change the
colonial With
market
within
real
ropean powers.
economic
the
into
for bank stocks showed
considerable
strength
during the early months of the year and shares of the
leading
institutions moved un to the highest levels
reached since
negoa
JOHNSON
This Week—Bank Stocks
The
bring
current
high tariffs and
controlled by Eu- quotas,
restrictions can be preExports of private served.,. The role of Britain, as the
capital amounted to around $1 center of the sterling bloc and the
billion in 1948, but
dropped to a heir to the old empire, cannot be
directly
concerned
with
funds
But
tiations have watered down
government
will American investors send
nor
By H. E.
Hoffman's proposal for an interEuropean clearing agreement, at
least of ECA countries, may
gifts to private investments. But
Europe does not attract investors;
their
of
never gone beyond the point
talks, meetings and resolutions.
of
some
from
Bank
new
dilemma
has
■
world markets, and discrimina¬
against hard currency areas.
changed
the old
ual European industries. So far,
however, this kind of integration
on
have
Thursday^ May 25,
195Q
.
competitive expansion of individ¬
Citing emerging evidences of depression and accumulation of
surpluses in Europe, Mr. Zelomek expresses pessimism con¬
cerning U. S. trade outlook after ending of Marshall Aid.
For most companies the
importance
of
exports
is
relatively
This is to be the
from
escape
Economist, International Statistical Bureau, Inc.
\
.
ficient within five years, are now
reaffirmed in terms of European
After Marshall Plan Aid
Foresees strong competition
.
on
currency areas. Even then, these
countries had the help of high
P^ces for commodities exported
t0 ^e United States.
Britain
is in a special position
Continued.on page ,30
For
Institutional
Investors & Dealers
Individual reports
on
the 12 New
York City bank stocks
eligible in
Massachusetts for
savings bank
investment.
Laird, Bissell & Meeds
Members New
York Stock
Members New York
Curb
120
BROADWAY,
Exchange
Exchange
NEW YORK
5, N. Y.
Telephone: BArclay
7-3500
Bell
Teletype—NY 1-1248-49
(L. A. Gibbs,
Manager
Trading Dept.)
Specialists in Bank
Stocks
NATIONAL BANK
of INDIA. LIMITED
Bankers
to
the
Government
in
Kenya Colony and Uganda
Head
Office:
Bishopsgate,
London, £. C.
26,
Branches In India, Burma, Ceylon, Kenya
Colony, Kericho. Kenya, and Aden
.and Zanzibar
Subscribed Capital
£4,000,000
Paid-up
Reserve
Capital
Fund
£2,000,000
£2,500,000
The Bank conducts every description
banking and exchange business
of
Trusteeships and Executorship®
?
also undertaken
Number 4910
171
Volume
.
The Commercial
.
.
and
Financial Chronicle
11
(2159)
World Tiade and Point IV Program
which will be
By HON. CHARLES SAWYER*
'
)
-i,
,
'
The
Secretary of Commerce
.
.
Today,
i
dependent
changeable
of
other
Five years after the end
there
of the greatest war in
kinds
history,
i
from
other
blishing
monies
in
fewer
United
of
which
can
in
vate
pered by such
restrictions
import
as
it
is still tangled.
who
looks
at
world
blissfully
goods and money and
people.
The currencies of the
various na¬
tions were tied to
the value of
op¬
timistic about the future. It
is a
mistake to underrate the
complex¬
ity and size of the social, political
and
economic problems
ing
us.
lend
a
sels
is
also
friendly
of
to
ear
the
despair which
offered
at
outlook
for the
There
the
are
is
rifts
some
,
some reasons
the world
derly,
be
can
more
Point
for
those
more
more
permission
government
to
use
buyer
from
his
of
his
some
country's
supply of dollars.
In
days the American trader
those
hoping that
made
stable,
economy can be
which
will .be
both
dynamic and balanced. It will
be
dynamic insofar as it is based
on
the
release
of
the
creative
en¬
ergies of many other
peoples and
on
the
great expansion of their
productive powers. It will be bal¬
anced
the economic
as
growth of
not
was
or¬
export
j
forced
to
licenses
negotiate
from
con¬
his
for
own
country or import licenses from
to creative
business—and the
country to which he was sell¬
pleasant for the two-and-aing. Today virtually every coun¬
half-billion people who live in
it/
try in the world has thrown
Of
ducive
each
its
try
own
and
achieves,
of
the
world's
as
re¬
each coun¬
through, relatively
practices, its
railroads and
homes, and
of
the
the
or
wrecked many
institutions which
social
in
the
United
our
new
the
of
I
have
described
only by the great
of
all
nations.
It
can
be
is
part
tribution ...to
the
recovery
of
Europe, and our vital interest in
stimulating imports into the
United States
are
takable signs "of
clear and unmis¬
a
new
have
mat
recognized
are
our
Go
time when
business
nnsts
call
ihis is
u
sound
.
a
a
them to hasten
we
on
and
what
they
the
"multilateral
basis-."
a
world
of. all
and
in
which
nations
will
be
will
freely
the
be
,o50mm>nee,
New/York
an<* part of address
delphia, Pa., May
7, 1950.
people
tials
us;
at
to
Phila¬
pay
we
assistance
other.
they
certain
the
buy
these
one
by
kind
such
and
time.
a
pect
it
with
and
the
cated problems
ment.
large
on
natural
interest
in
doing
this
to invest.
is staffed with men
who are trained in
the compli¬
cated
techniques of industrial and
business' methods.
Most
Moreover, it
impor¬
all, it is only upon our
own businessmen
that we can
rely
to teach the
businessmen of other
nations the-methods
of produc¬
tant
of
and
us
ate
increasing
of
ments,
form
been
with the
at¬
are
countries.
not sufficient.
•
They
abroad
offering of these securities for sale,
govern- :
greatly /
familiar
far achieved.
Development
was
Bank
of this year
announced
on
our
,
or as a
solicitation of
an
no
-
,
•
organ-
Turkey, formed through
"
to
stock
by
a
Pan American World
izations.
It
was
formed with theiS*
Continued
on
page
•
••
V
,
to
he considered
offer to buy any of such securities.
as an
/
.
-
Airways, Inc.
Capital Stock
;
(Par Value $1
per
or
Share)
the
an¬
imports.
as
Price
$9,375
per
we
Share
lit¬
spend the money?
reasons,
some economic.
money
We-spent it to
In
to
bring
world in which trade will
be balanced" and
healthy—a
world
1.
LEHMAN BROTHERS
v
business
circumstances
366,954 Shares
sub-
nineteen. *
New Issue
I: ;/;: .;:
;
groups in Turkey,
in¬
cluding thirteen banks, two tex- '
tile firms, and four other
large v
commercial and industrial
organ- 4
many
alone
-
;
April 7
by the newly
•
.
of
ized Industrial Development Bank
are but a
■
/
*
One of
signed during
with
by
profit
ourselves
the most
promising new
plans for encouraging investment
Such
Treaties
•
Turkey
negoti¬
other
in
the
can
successes so
Industrial
the past six months with
Uruguay
and Ireland, and we are
ating similar treaties
embody
another
patterns of investment :
We
scription
treaties have
patterns
making
they
own.
invest- ;
corporations.
business and
of
our
joint
mixed
or
new
investors in other countries which
enjoy: in
situations
and
contracts,
and
pri¬
rights to
new
devices
new
ments.
our
same
agement
by
efforts to nego¬
tiate - trade
treaties * with
other
countries for the
purpose of guar¬
anteeing the
meet
ingenious!
activity.
They are not abstract
objectives
or
untried
schemes.
They have been demonstrated by
for
will
■
and
methods.
the last few
years, they *
have given attention to new
pat- |
terns of investment such as man¬
priVate
amounts
for hope is,/
businessmen are
reason
Within
these
-capital
from
the
United
States and other countries?
We
continue
to
new
compli- *
foreign invest- /
V; V";X' ; 1 V
enough
enough
with
and
general ;
principles which I have discussed
above. I wish to stress here
today ;
Capital
vate
can
flexible
one
prosperous.
the conditions which
tract
solid
of
American
These
distribution which have
Private
One
that
morning;
qualified to wrestle*
stubborn
be¬
carried
job.:. It has the capital
change the*
People who ex-;
tomorrow
I
in
must
well
the
:
particular
a
will
night.
of
as
by private business; Business
has
a
not
are
now,
financed
over
heaven
American
in
which
appropri¬
our
geperal,,we spent this
buy
temptation to look for
to
of
must, of course, avoid the
world
aid
businessmen
essentials.
it for various
political,
about
successful
be
We
Four
do
and
countries.
permit.
Why did
We. spent
>
Cape
development
believe
other
appropriate for foreign
>of
exports
we
be
part
only
time
The dollar gap is as
big or
as
I
ernments
at
thought
could
them
(3) Encourage
the
maximum!
initiative on the part of the
gov-,
essen¬
same
measured
Without
our
I
for
*
Point
spoke
on
possible
services, the skills/
the capital
they have already,
at their command.
This includes:
the fullest use of local
money in
those countries which are
short:
of dollars.
formula
that
ations there would be no substan¬
tial difference between the
value
tle
I
ago
it
the
these
earning enough dol¬
for
Make
utilize
and
lieved then, that if
Point Four is
to
...
a
(2)
to
world
means
can
at
is
gap
amount
This
and
are not
some
City,-May
v-'
the
deal
great
need
which
ex-
address by Sec.
Sawyer at Lunchsponsored by New York
World Trade
a
gap."
from
of
can
econo-
big and ponderous terrm
means
Jionies
ton
We
us.
working with
other
lars
welfare and our secutied up with the welfare
security of those other nations
Who wish
to work with
the
"dollar
This
are
hear
v
This advertisement
appears as a matter of record only and is under
Not
on,
'The philosophy of Point
Four
raises this question—how
can we
work with other
nations to cre¬
the
are
This is true
in
days about the "dollar shortage,"
as
some
people call it, the
the
and
nations
or,
they
fact
all
the
We
f
spirit of
international collaboration.
the
as
world.
'
Virginia,.
the economic
produce in abundance,
Na¬
financial support of the
it has re¬
international
ways
goods and the various
kinds of skilled services which we
leadership
United
today the
trade
dependent
'Making Favorable Climate
effort
of
and
connected with
is
.
; year
■'v..
created
common
history of the
,
is
exchange.
A
tion
bureaucratic
as a
dollar
many
gold
because
want
our
International Monetary Fund and
the World
Bank, our heavy con¬
nty
placed
aware¬
States
Our
establishing
tions,
In
medium of
responsibilities.
in
ured.
.
Another fact is the
ness
The
standard against which the value
of all other currencies is
meas¬
make trade
possible, international
trade surpassed
by 10% the high¬
est volume
it achieved
before the
war.
of dollars
use
pastime.
J
made
all the forces that
up
make for
along its borders barriers which philosophy of Point Four that it
better world, none is
so indis-• at
first glance seem to be de¬ recognize the need for common
pensable, none is so
effort and mutual assistance
powerful, as signed specifically for the
and
purpose
hope.
Without hope, men are
/interprets it in a large and gen¬
of
discouraging businessmen.
only half alive.? With
erous spirit.
The stronger nations
hope, they
dream and think and
can
assist
the
work. *• ' •
less... developed
Export Controls
countries in
acquiring the knowl¬
High Volume of World
Our own government
Trade
enforces edge and skills and capital which
What are some of
the facts that regulations for controlling the ex¬ they need in order to go forward
serve as a basis
port of goods from this
for hope?
One
country. I on the road to industrialization.
of these facts
have tried to reduce these
is the
controls In their turn, the less developed
high volume
of world
trade.
Last year the as fast as possible and to make countries can
do
everything in
nations of the world
sure that those which are
still in their power to make such tech¬
exchanged
with one another
force are serving a useful
nical and financial assistance ef¬
10% more goods
purpose.
than
they exchanged in
American businessmen and the fective by adjusting-their eco¬
1938, the
last full year
before the war.
Only American people should under¬ nomic practices and social atti¬
five years after
the end of a war stand,
however, that foreign coun¬
which
destroyed
tries have not placed controls on
thousands
of
factories,
business
Henry,
proportionate share of expanding
world trade
apd economic wel¬
fare. /;/
/
A dynamic balance of
this kind
a
which weakened
intimately
peoples.
free and competitive
more
and
and
and contributes
to, the growth of
mutual
understanding, respect and
frieiidliness among nations
and
the
sources, and insofar
foreign
world
Four program.
The essen¬
tial idea of Point
Four, as I see it,
is that a world
developed
the
things:
Convince other peoples that
interested in their
needs,
that we understand
the kind of
economy and society they want to
build.
attitudes and cultural val¬
More and more the
growth of
businessmen
of
(1)
under¬
world
economics
and. what
philosophy
the
them¬
eco¬
social
"Point
country is steady and in
harmony with the efficient use of
get
have
so
ues.
would
The
clouds, however, and a few shafts
of sunlight
shining through. We
have
be
been
pri¬
pesos.
No Ameri¬
trader selling
goods to a for¬
eign buyer had to stop and won¬
der whether that
cloudy.
in
could
yen
exchanged for
can
freely
time.
future
Likewise,
to
coun¬
are
present
Dollars could be
exchanged
freely and at known rates for
francs.
fac¬
now
mistake
a
gold.
before in
underlying
fa¬
were
the
clear
for
we
cooperation.
a
around
Four" program.
Despite this grow¬
ing literature, I feel that
some¬
thing still needs to be said on the
as
the
relatively free flow
of
be
can
It
easily
within
tional business
relations
vorable to a
Charles Sawyer
the contempo¬
rary
as
transacted
20th—interna¬
t
s
borders
our
now
United States.
For one
rather
brief period in the
history of the
world—late in the 19th
Century
and
early in the
trols, the net¬
work of trade
real i
is
dom
world
added to the
on
needed
want
new
capacity to. find ways of bridg¬
ing over such differences.
Sel¬
under¬
books, pamphlets, and
are
and
they
We must aim at these
the
a
governmental tech¬
and through
matter
relations
is
attitudes
about
country
selves.
gain.
of
standing of differing customs
areas
scholarly studies
printed
transacted
outside of
and
currency con¬
No
month new
standing attention to the desires
of other
peoples to build the kind
of
industry
There
This idea has
caught the imag¬
ination of the world.
Month after
'
preliminary in creating the un¬
derstanding which lies behind all
ex-,
process of
that the greater the
will¬
sure
nomic
the
American investment.
economic
a
trade; and it calls for a
step forward in international
was
nical 'missions
We cannot
bring into being eas¬
ily or soon the kind of world
in
which business can be
unham¬
bring
development in
living through
business rela¬
tions
to
In such
and
and the United
prepared to help other
countries raise their
standards of
States
con¬
money
needed
developed
more
worrying
getting his earnings back in
"
capital.
months
economic
without
dollars.
American
requirements of the
world
Point Four
projects one
great davances in world
techni¬
information
world
barriers
States
investing his
nations
about
ternational
n
the
template
dreams of
a
be
through the
American
and
be
ago,
President
Truman gave to the
world a mes¬
sage of hope.
He said that the
United States had in
abundance
the
technical
facilities to keep trade
flowing; a
world
in
which a
businessman
political revo¬
lution. Despite
t
will
the
world
a
of
of
ingness of each country to do its
best,- the greater will be its
r
thrown up against
trade and
we
see
political
insecurity and
e s
for
nations;
skills
Sixteen
closing "dollar gap."
look out upon the world
trouble.
our
of
means
trouble—many
we
see
cal
cooperation of recipient nations and
creation of
climate for private
investment
In address at
Philadelphia outlines
As
investment
is
success
the
give business dealings.
We must keep
and take, we
cannot measure ex¬ in mind the
point of view of other
actly the contribution which each
countries and we must
give under¬
country may make, but we can
Program
main
omy and world trade
implemen¬
out its
on
favorable
we
progress in
Program" and points
to
age
pansion.
inspires and
springs from our ef¬
fort to
strengthen the world econ¬
which
give hope for larger foreign trade. Sees
tudes
new
Point IV
the
against
subject of my
remarks is hope—the
hope which
Secretary Sawyer, in outlining world trade
prospects, contends,
despite trade barriers and "dollar gap," there are factors
tation of "Point Four
more secure
political aggression.
EMANUEL, DEETJEN & CO.
31
,
12
Our
By ALF M. LANDON*
President
American
Truman
people
the
told
that the
inter-
national
situation
im p r o
That
aim
eral
the
Asia
Bradley's
in
the
reason
I
Alf M. Landon
reflected
cannot
succumb
the
to
great nation is to survive
face
disaster
to
up
we
uncomfortable
change
find overselves
Atomic
may
has
soon
abyss.
possession
Bomb
altered
we
over an
Soviet
radically
we
course
our
The
drifting toward
are
unless
and
tist
hopeless.
Harold
that
and
the
C.
Atomic
scien¬
Urey has warned
next
two
could—
years
probably will—see the atomic
lead
the
of
United
States
effec¬
tively wiped out.
Perhaps that ominous prediction
inspired Secretary of State Ache■,i
set
to
son
1954
essential
as
the
Soviets
atomic
in
margin
tactical
air
of
power
they will be able to play with
like
with
cat
a
us
The
mouse.
a
march of events for the past five
is
years
most
making
the
of
of
nonsense
American
plans
to
contain Soviet aggression.
Once the
American
people
see
situation in proper perspective
our
they
be depended
can
to deal
on
with
the
for
than
it effectively.
In
survival it is later
race
we
dare think.
We
Power
embrace
World
War
II
at
cost, and lost the
tre¬
peace.
The foundations of American se¬
curity will be undermined in the
months
which
frank
lie
leadership
I
need
not
dwell
long
that
made
they seek the
struction
world.
of
the
it
quite clear
There
taken
is
Whenever
possible
standards
duct.
rejected
of
foreign
affairs.
no
between
war
con¬
To
the
placed
on
by Mr. Landon at Col¬
Emporia, Emporia, Kans, May
i,
a
sought-after issue.
taps themselves show the 1967/72s are still the
present state of the government
the
be
to
seems
or
the
of
short
market.
security business is
now
It
in
bond
evidently do not see enough, oppor¬
in either direction, to go long
tunities to scalp a few 30 seconds
appears
one
as
Lambert
Ehni
time, but which generally do not last very long./The
July refundings and the raising of new money to
finance the deficit should revive interest in the market again. The
take fairly sizable amounts
obligations out of the market. The securities that
out
let
still
are
of
being
come
selected
issues. These
tap
funds according
to
advices
pressure
Banks
were
quotation
on
away
there,
Frank
ing
face
even
if
the
Central
threat
policies
bonds in the past week has been the savings institutions. This is
in spite of some spot adjustments in certain issues. It is indicated
been slow to
there has been
have been
recognize the danger
it.
We
slower in reacting to
and
have tried to
preserve
our
peace
by refusing to 'stand by our prin¬
ciples.
One of the factors of the
present crisis
has been American
indecision and vacillation in high
places. 'i;
On the credit side the Adminis¬
tration
belatedly rejected the
in
vogue
Washington
at
1946.
electrifying
Missouri,
meanwhile
in
have
we
great nation of China to
and
cause
begun
his
Fulton,
But
lost the
our
made
when
to
have
we
advance
not
even
against
the
According to informed
a rather sizable if not too
noisy accumulation of
of the restricted issues by these concerns, especially those
which have had very substantial increases in
deposits. Pension
continue
to
seem
as
show
The frontiers of Communism have
freedom have
important buyers of the Vies, but reports
acquisitions from this source have not been
had
been
have
the
case
become
a
short
active
time
in
Fire and
ago.
the
market, in the
eligibles as well as the tap issues, and by switching out of the
former have become a more
important factor in the restricted
issues. The swopping of one
Treasury issue for another by these
will not last very
long because it is believed
of these exchanges have already been completed.
concerns
many
There
is
no
tendency yet
a
while
been
those
receding.
of
As
City, to
the fire and casualty com¬
panies to abandon the equity market in order to put new funds
into Treasuries. On the other
hand, there is a modest amount of
among
buying of the longest tap issues by institutions which follow the
so-called "automatic" or "plan"
type of investing.
Treasury securities
to make
new
head
was
of
Strasburger, Inc.'
Calif.-Paul
ANGELES,
with
Dempsey-Tegeler & Co., 216
West
Seventh
kar has
& Co.
ager
the
Street.
Mr. Asch¬
recently been with Fewel
Prior thereto he was man¬
of the trading department
of
Angeles office of Carter
Los
H. Corbrey & Co.
"Tappers" Schedule
I
Outing for May 29i
The
outing
their
the
Club, Mont-
will hold
"Toppers"
annual
May 29 at
on
Country
clair, N. J.
difficult now to get owners of
switches in holdings or to get them
more
to make
money
in the
Shakes¬
H. Aschkar has become associated
Montclair
Because it is somewhat
&
Mr.
open¬
Street,
engage
business.
formerly
LOS
great
Portfolio Switching Feature of Market
Expansion engenders expansion.
advancing
as
companies
forces of tyranny.
,
be
that
substantial
casualty
to
Wall
1
the principal buyer of the tap
sources,
many
funds
at
(Special to The Financial Chronicle)
adopted by our govern¬
confused, falter¬
ing and invariably late. We have
ment
Shakespeare is
Dempsey Tegeler Co.
Institutional Buying
the
and
.
Pan! H. Aschkar
not applying it.
■'
this
of
J.
office
an
New York
Policy
the
;
with
Co.
ineligibles, it is
from the market at intervals.
still
was
/
:;
&
Shakespeare
Opens Office in NY
Shakespeare
used to acquire corporate bonds and preferred stocks.
Because of the selling by other holders of the
•
been
Pont
Frank J.
peare
of
du
Cohu & Co.
securities
were
recently
I
mainly from Federal, although a few of the
large life insurance companies have again joined the parade as
The
In
has
Francis
and
these
Inc;,
government
though the
of those "dead spots" that happen
from time to
June
Co.,
Street,
639 South
members of the
Angeles Stock Exchange. Mr.
Los
resulted in somewhat decreased
Lessened activity which has
i LOS ANGELES, Calif. - Wil¬
liam R. Ehni has rejoined AkinSpring
Trading in Doldrums
reported Federal has moved
the aims of permanent peace.
commitments,
more
than
a
little
effort
is
the free world is being compressed
into a smaller and smaller area
being put forth by dealers to show why certain
changes in posi¬
tions should be carried out. As should be
expected, the issue which
by the malignant growth of Com¬
1967/72.
munism,
the
number
of
become fewer.
open to us
choices
appalling
present
tragedy of the
situation stems, in part,
from the reluctance of
our
lead¬
to make these choices because
ers
greater than that.
To save our
skins the false sense of security
created
by
assurances
groundless
must be
official
dispelled.
Soviet Aggression Unabated
bears the brunt of these
us
look
our
at
the
record.
tremendous efforts to
Almost
apparently valid
reason
the
to
"contain"
Soviet
from the
is
relatively stronger today than at
any
Kremlin.
It
will
continue
Continued
on
to
page
★
BILLS
CERTIFICATES
tended to work against
suggested swops out of this bond.
Switches
from
eligible
taxables
into
the
NOTES
partially-exempts
BONDS
and vice versa, are
among the favored ones, as are
swops within
the tap bonds themselves
with the
lengthening of the maturity,
to increase yield,
evidently getting tangible results. Some
how¬
favor the 2Us of 1959/62 for
swops. Many changes
among the nearer-term
suggested
obligations,
appears
to
be
the
issue Diat has
considerablPsuccess
when
it
has
other
It
short eligible
is
reported
been
put
and
been getting
are
the
the
being
D/2%
of
bulk
of
evident. The l%s of
1954,
according to some, have not been without
especially
forward
favorable reception
a
as
a
replacement for
Aubrey G. Lanston
obligations.
that
New York
City commercial banks
were
do
fairly sizable buyers of the 2y4s due
1956/59, the 2%s due 1960/65
and the l%s due 1955. A
fair-sized switch from the
2%s due
9/15/67-72 into the tap bonds was
quickly consummated last week
37
buyers of the bank issue,
with two out-of-town
commercial banks
v;
J-'-.
★
★
not too much success has
attempts to separate holders from their
September
the price of this obligation has held
up has
com¬
Empire
TREASURY
why this obligation should be sold and the
1967/72s. The way
the attention, with
efforts
due September 15,
business, it seems, had some
come
war-torn
our
:"r U. S.
is the 2 %%
the
Treasury obligations, it indicated
restore peace
tension created by Soviet aggres¬
sion continues unabated.
Despite
in
other
1955
and prosperity to a
world
the
underlying
assaults
everyone
proceeds reinvested either in other
eligibles or selected tap issues.
While there have been
swops out of the longest bank issue into
ever,
Let
and peace except in
address
1950.
single action
one
time in the past. Despite our
tardy efforts to restore our mili¬
military tary strength the balance of mili¬
tary power is tipping toward the
real distinction exists
emphasis
of
previous
on
by the Soviet Union since
principle- in munism,
one
Kremlin
lege
in
been exalted
number
Soviet
*An
all
international
Trickery has
the
the
aims
bellwethers of that group and despite the
the favorites of non-bank investors who
the end of the war consistent with
they Despite
philosophy
always
not
de¬
non-communist
adhered to these
practice.
Communist
to
Soviet
complete
have
has
the
on
facts of Soviet aggressions
leaders have
of
they believe them unpopular with
the people.
My trust in the char¬
ahead unless
acter of the American people is
requires
our
people to pay a still heavier price
for their own survival.
selling by Federal, are
continue to acquire them
scale basis. Switches between the eligibles and taps and the
(Special to The Financial Chronicle)
sellers
population
a
approximately 800,000,000."
The
won
mendous
people, the people's
of Europe and Asia
together with the Soviet Socialist
been
"It Is Later Than We Dare Think"
William R. Ehni
list, the Vies are the
buyers of tap bonds continue to
speech
their comfortable
superiority
last
The
democracies
equality and retain their present Churchill
overwhelming superiority on land
and
he
when
trend of appeasement so much in
attain
2%s of 1956/59.
waiting attitude of operators in government securities does not
mean there has not been some important business going on. The
.
If
attitude
com¬
pletion date for the Atlantic Pact
military defenses.
'
the
of the Chinese
the
of
completely
Today our situation is extreme.
Within the next few years it can
become
this
successor—
Confused and Faltering Foreign
struggle for survival.
our
—
Stalin's
we
The plain truth of the mat¬
ter is that
in the
possibly
being
man
recently stated "With the victory
easy
temptation to speak only
what people may like to hear.
If
facts.
suc¬
becoming
are
ranking
for
groomed
that
and
not without followers/In the restricted
market. Traders and dealers
like
success
Soviets
Politburo
General
For
The
Malenkov,
Bradley.
1955
are
volume
confident if not downright cocky.
cold
although increased attention is being given
as
if they had
pitched battles
in
Nothing breeds
support
must
Soviet
eligible obliga¬
to the 1/fcs of
three partially-exempts
2i/2% due 9/15/67-72 is still the leading
tion,
real
as
won
cess.
past
The-
our
The
stands
crisis
few months.
facts
by Hitler and the
the height of their
against the West.
worsened
banks.
won
at
are
been
words that the
had
empire
greater
a
today as a more
completely * military state than
Nazi Germany or ancient Sparta.
Communist gains in Europe and
of Gen¬
world
that
Union
followed
heels
Day the Soviet Union
conquered
military aggression.
able statement
on
has
much effect
longer eligibles have quieted down on
somewhat lower volume, while the nearer-terms have apparently
taken over some of the play on buying by the larger commercial«
The
quotations.
The
Since V-J
Japanese
ving.
psychological
and
being
asjvell
disposed of without too
from Federal were readily
upon
pressures.
than
was
remark¬
close
political
or
vj .
when not aided
by outside liquidation. Nonetheless, the restricted bonds are
well taken and those from the life insurance companies
as
Before embarking on his nonpolitical excursion to the North¬
*arf® life
hea^ t°1^-
eral continues to keep
should be destruction of Communist power.
Rejoins
Akin-Lambert Co,
interest m the longer
along with a decreased
eligibles, gave the government market a rather
the ineligibles under wraps
confused, faltering and invariably late, without clearcut, positive objective. Holds American position in Far East
has been weakened, but admits things might be worse. Con¬
our
of t.he
of the tap issues by some
Flash liquidation
insurance companies
as
impossible with Communist Russia, and
1950
CHIPPENDALE, JR.
By JOHN T.
Stressing Russia's present military might and aggressiveness,
former Republican Party leader says, in race for survival, "it
is later than we dare think" Criticizes Administration's foreign
tends peace is
Thursday, May 25,
. . .
Reporter on Governments
Republican Presidential Candidate in 1936
policy
Chronicle
William Ehni
Our Confused Foreign Policy
west
Commercial and Financial
The
(2160)
-...
reportedly
/
.........
very willing,
...
& Co.
"
v" ' INCORPORATED
15 Broad Street45
i
NEW YORK 5 /
WHitehall 3-1200
■
,
Milk Street
BOSTON 9
HAncock>6463
Number 4910
111
Volume
The Commercial and Financial Chronicle
...
ing.
And the
In
tough, and the job of processing forth in the proxy. And in a re¬
work in it by the Commission presents lease the Commission expressly
announced a policy against that
busy periods they manage in the more than routine difficulty.
vast majority of cases to process
At these times there is a high practice.
filed material well within the 10- premium on early preparation of
r
Further, in 1948 Bob McConday period of the rules.
preliminary material and consul¬ naughey, then a Commissioner,
Proxy Rnles
spite
of
the
concentration
Corporate Secretary
The
of
proxy
Commissioner McCormick defends SEC proxy rules
the
as
Commission is only one step
corporate
proxy solicitation is
Your group has wel¬
talks of SEC people on
secretary in
perennial.
comed
prob¬
proxy
lems
and
have
we
been
willing to
comply. That's
than
more
no
fair; after all
you fellows
have
live
to
with the stat¬
and
the
rules
we
ute
I have had
unique
vantage
ad¬
over
fellow-
my
McCormick
T.
a
Commissi
on¬
in observ¬
ers
ing the proxy rules in action, for
I have been on the staff firing
line
administering them since the
first simple and
rules under Sec¬
adoption of the
experimental
tion 14 of the Securities
Exchange
I talk from
experience when
I say that corporate management
has by and large accepted with
more
than good grace the addi¬
tional obligations which have re¬
Act.
sulted
the
in
advances
enormous
the
even
of
and
contests
to
rush
fellows
have
recog¬
nized that decent proxy practices
are
at the heart of decent and
responsible corporate administra¬
tion and have welcomed
im¬
the
provement in their relations with
stockholders that compliance with
the rules has brought about.
Depending
on
the
ed for its exercise
afford¬
means
the stockhold¬
er's franchise is either real
or
il¬
lusory,
The proxy provisions of
statute and' the rules have
the
the obvious purpose of making
a
reality of the stockholder's right
to vote.
It
is
always
a
crucial
been
semblance
by
.1 have
the re¬
the
modern,
right.
struck
between
publicly owned corporation and a
governed community. In
both, the
administration of community asand affairs
the citizen to a
is given
over by
governing group.
In
both the
governing group can
hold its power either
by the will
of
majorities
by manipulation
In both,
or
of the
means of control.
the day to
day management de¬
cisions
nity
upon
welfare
which
the
depends
commu¬
cannot
be
njade subject to prompt routine
check.
Except in
actions
special
cases
of critical
requiring referendum or
stockholder approval the
onJy effective check is for the
voter to be informed
(or the lack of
it)
xne
of
progress
and
management in
or
to
to
keep
vote it
out.
Substitute
for Stockholders'
Round Table
As
communities
ions
grow
neir
ne
town-meeting
.°un<L
n
f
size
ownership,
holders'
J
in
and
diffuse
substitutes for
and for stock¬
roundtables
It is not
corpora-
and
easy
have
to
be
to find them,
,a(J^less by Commissioner McCorbefore the American Society of
£?rate Secretaries, Atlantic City, N.
May 13,
.1950.
7
i
the
do
Failures of compliance are
best
likely
are
once
problems
the
opinion
of
to
Commission
can
would
arise
has
will
nor
at
Commission
the
tolerate
Troublesome to you as well as
to the staff.
Many of these dif¬
clears
ficulties
can
presses
lowing
simple procedure.
without
But
;
would
growth
corporate
substitute
some
carry
with it increasing management ir¬
responsibility.
hards
holders
the
To
die-
old
still insist that stock¬
who
are
a
entitled
necessary
know
to
evil
a
avoided
be
fol¬
by
Think
problem through and if
your
have
difficulty consult the
you
staff.
even
to
When
as
is
"incompetent."
It
the
opinion
that
Get to know the Section Chief and
the Assistant Director at the SEC
in
will be permitted to distort
answer
is that
en¬
trenched and
is
irresponsible control
odious in corporate life as
as
is
in
political life.
Russian
propaganda doles on these diehards.
But the majority of our
living
managements,
under
our
rules, give the lie to propa¬
proxy
ganda that insists that big business
is coextensive with big tyranny.
In
a
proxy
sense
rules
the
to
the benefits of our
to
stockholders and
welfare have
useful¬
corporate
been immeasurable. Their
does not stop at merely im¬
ness
plementing the stockholders' vot¬
ing rights. The proxy provisions
pervade the atmosphere in which
even
day to day decisions are
I have seen time and time
made.
again, proposals that have died
aborning because they could not
in the light of disclosures
by the proxy rules.
Time
and
again
managements
have discovered that the stock¬
holder electorate welcomes * full
for
discussion
by management of its
problems and may give an honest
charge
After
the
of
our
corporation.
of administering
rules the likelihood
proxy
that your
your
years
is
difficulty has been met
and solved before.
The staff's
ex¬
perience and help is at your dis¬
posal. Both you and we will be
helped thereby.
'
\\
\
.7
Of
I am by no means in¬
course
viting
you
write
your
You
to
number of
is
quest
ask
staff
our
to
solicitation material.
be surprised at the
would
cases
made
in which that
openly
re¬
sin¬
and
opposition is
in
any
of
who
latest
staff works know also that it
provide equal
stances where either side cuts
unusual issue for stockholder
any
forum
for
crack¬
prediction never
may
that
report
came
be interested in
according to our
figures the
average
number of proxy
cor¬
their face, reasonable.
on
ners
in violation of the rules.
mean
Follow
It
Soliciting material for the an¬
raise
a
op¬
But don't expect the staff
to carry your burden and do your
nual meeting which does not
the
statements con¬
taining stockholder proposals has
portunity in cases of contest. Tim¬
been about 25 per year out of the
ing is often important and the total of about
1,600 statements
staff makes special effort to ac¬
filed.
By and latye managements
celerate
clearance
in
order
to
have had litt'e difficulty with these
avoid disadvantages to either side.
proposals.
Many of them have
It cannot do the job as quickly as
been
well within the sphere of
it otherwise might in those in¬
stockholder action and have been,
does its best to
for
SEC
Practice
surprising
seem
that
manage¬
Get to know
many
still need it:
ments
troublesome
I don't
imply that there have not
ones.
A
pro¬
posal to change the place of an¬
nual meetings, or to provide for
rotating auditors is clearly a per¬
missible one.
Others are just as
late in the day
the following tip — but it is
may
to
been
cerely;
drafting.
You
knowing
how
know
into
Tr.at dire
facts
true.
you
was
pots, and hare-brained reformers.
way.
Those
our
as
wild-eyed
Congressional investi¬
a
^plicitation would be con¬
verted
"inexperienced" or
"irresponsible."
But neither side
the American
stock¬
/exploded.
branded
were
proxy
the
what
proper
bomb
a
gation was touched off, and it
confidently
predicted
that
is
for management
common
express
We
sphere of
action
radicals,
man¬
were
permit stockholders
and
justify
proposals
within the
holder
rules
proxy
to
make
to
opposition solicitation
though the opposition ex¬
the opinion that the
our
amended
Who
member
Stockholder's
Proposals
an
agement
just
staff
a
a
not—that
purpose.
Permiting
rarely
management chooses to tell them
are
only
and
no
serve
de¬
condemn
will have to
of
course
just that. They do not get by
staff and, short of creating
unnecessary
work
and
delay,
other time
any
the
in
the
t;o be provided for the
fight
arrows,
do
that
contestants. However, neither in a
proxy
to
or
sometimes
and
contest
the ring is squared off elbow
room
permit
type,
—sometimes
corporations.
discover that
recognizes
not
of
address
an
that the Commission
set-off
other devices
to be put on proxies to influence
the vote. Yet we still get proxies
develop
can
in
clear
group
forms
lived
have
you
some.
rules
proxy
called
most
But
in
even
You
this
gotten to know the
problems.
proxy
you
meet
can
By and large
of
tough proxy fight but
a
it
made
your
stockholders' roundtable.
our
stand up
But
clearance
majority of
and your material presents
ropes
strongest supporters
have
the
vast
staff
well.
pressure
few
the
the
cases
admit that they are at best an in¬
tions effected by the
gadgets.
through
In
process.
all
difficult
adequate- substitute for a compact
of
in
management-stockholder rela¬
rules, "v v
In some cases management has
simply bowed to the inevitable
and taken the proxy provisions
along
with' other
newfangled
by follow-ups, there is
pressure on the staff
a
Not
on
intentional but, whether viation from truthful disclosure.
But there is an area of char¬
they result from oversight or fail¬
ure to
comprehend a requirement, acterization in which some lati¬
they can be extremely trouble¬ tude must be permitted.
Don't
it
adopt.
E,
and
staff
anticipate.
differences
often
arise.
the
the
through
generally
question of legality of management's short-term options has
not yet been resolved by courts.
1
of
with
and
right of stockholder to vote. Lauds corporation
management cooperation and outlines problems of SEC han¬
dling of proxies. Upholds right of stockholders to present pro¬
posals for vote at annual meetings and SEC rules regarding
management's refunds of short-term trading profits. Holds
interest
tation
problems you
in proxy solicitation and must be
followed by printing, distributions
imple¬
menting crucial
The
unfortunate
Since clearance of material with
By EDWARD T. McCORMICK*
Commissioner, Securities and Exchange Commission
13
(2161)
clearly too far off on the other
But the practice and reconcile yourself side of the line.
For
example,
and to following it. As you know, sev¬
proopsals to require the corpora¬
proxy
fights, are fertile ground eral years ago the Commission tion to make annual contributions
for difficult problems.
For many was presented with attempts to to various
organizations, to have
proxy
itself to carry the
types of proposals, the schedule use the
corporation
petition
for
of items in the proxy rules con¬ statements or devices designed to
changes in the law, to have it
tain specific requirements for rel¬ influence the stockholders' vote.
favor
various
political schemes,
vote
is
major
evant
no
likely to be routine.
corporate
changes,
information.
tailor-made
is
We did amend the rules to require
full
identification of proposals as com¬
there
But
formula
for
are
clearly not permissible.
'^Others
have
hovered
close
to
leeway for disclosure in these cases; the ing from management or from
the line of doubt.
Proposals af¬
working out the company's des¬ corporate secretary must often co¬ stockholders. But we did not ac¬
fecting,
directly
or
indirectly,
tiny than an entrenched manage¬ ordinate the activities of many cede to the view that the proxy,
dividend policies often pose great
ment might dare to take in fear
segments and levels of manage¬ the ballot itself, should be a place difficulty.
of strike suits.
The occasion of a ment in order to prepare the for electioneering. Rule X-14A-4
It would be fine if there were
proxy contest often opens man¬
material. The job of presenting it requires matters up for vote to be
Continued on page 33
agement's eyes to the merits of fairly and clearly is sometimes "clearly
and
impartially"
set
the proxy rules—for the rules ap¬
ply equally to
all contestants.
Neither the outside group nor the
management is permitted to lie or
distort and many managements
have been spared a rabbit punch
by the Commission's insistence on
proxy compliance.
I
believe in the principal of
our proxy rules and I have tried
to state some of the reasons why
it is important for you and for
us
at the Commission to make
them work.
I would like to use
this chance to give you a few
1%% Equipment
ideas that have grown out of my
(Philadelphia Plan)
working experience with the rules
and with problems of compliance.
To mature $1,000,000 annually on each June 1, 1951 to 1960, inclusive
management
more
$10,000,000
Pittsburgh and Lake Erie Railroad
Equipment Trust of 1950
Trust Certificates
Seasonal Pressure on SEC
To be
know the proxy load of
Commission tends to be sea¬
sonal and to concentrate in the
7 As you
the
early part of the year.
also to come at a
Priced
It tends
to
time when the
Corporation Finance Division of
the SEC, which has primary staff
responsibility for proxy clearance,
is likely to be flooded with other
work just as pressing. The load of
clearing
registration statements
may
be high. Many issuers, in
order
to
avoid
special
audits
which, though not required by the
Securities Act of 1933, are often
insisted upon by underwriters, try
to
plan their financing within
three
months of the end of
their
calendar-fiscal year. And
annual report filings are likely to
begin pouring in while the proxy
rush
guaranteed unconditionally as to payment of par value and dividends
by The Pittsburgh and Lake Erie Railroad Company
yield 1.35% to 2.15%, according to maturity
of these Certificates are subject to authorization by the Interstate Commerce Commission.
Offering Circular may be obtained in any State in which this announcement is circulatedfrom only
such of the undersigned and other dealers as may lawfully offer these securities in such State.
Issuance and sale
The
HALSEY, STUART A CO. Inc.
A. G. BECKER
LEE
people are only hu¬
man and notwithstanding rumors
to the contrary are hard-work¬
staff
HARRIS, HALL &. COMPANY
BLAIR, ROLLINS & CO.
& CO.
(INCORPORATED)
INCORPORATED
INCORPORATED
PHELPS, FENN & CO.
OTIS &. CO.
HIGGINSON CORPORATION
(INCORPORATED)
THE
ILLINOIS COMPANY
WILLIAM BLAIR & COMPANY
McMASTER HUTCHINSON
HAYDEN, MILLER&CO.
WM. E. POLLOCK &, CO., INC.
A CO.
MULLANEY, WELLS & COMPANY
is still on.
Our
by endorsement
May 19, 1950. /
j
••
•
;
'•
•'
"•••.
•
."7
'
14
The Commercial and Financial Chronicle:,
(2162)
t r a i n e d
people
Economic
Expansion:
the proper
-to
Formerly Chairman, Council of Economic Advisers
economic progress:
peace;
midpoint of the century;
that brings us to a
it
stage in
economic
our
tions
u e s
is
life.
The
it
not
becames
tunes and
The
s*
the
only
dustrial
rock
nomic
of
in¬
No,
a
G.
Nourse
be
can
the
mc
let
reared.
'50s
uva
We
in
repeat
ic^cat
m
disheartening record
I
find
can
no
reason
book of economics why such
disappointing and discreditable
my
development need take place. But,
on the other
hand, we cannot, as
prudent
l
—i
beguiled
for
allow
men,
~
be
dence
that
the
not
in
into
an
there
future
ourselves
is
confi¬
easy
will
expansion.
cApuujiuii.
because
we
in a state of
apparently rising
prosperity, not to say boom. We
must
soberly examine the ecoinHiontrtrc
indicators
atomic
jtunds to be
in
state
a
anH
and
of
cbarbh
search
whether
sure
ingre¬
be
setup if
found
we
are
skill and operational competence,
we must have a general grasp of
basic
economic
which
strategy
gives direction to the underlying
forces which will create the
and
the business
operator can.be
successfully applied.
r»..r
our
we
really healthy
are
eco-
In
of
expansion
revealed
Sam's
national
the fact that
pituitary
Kilfor
kilter and
the
gland
™
we
are
in
quaint
phrase
is
Uncle
of
out
tKo
the
way
rvf
of
developing progressive deformities
debilitating diseases'
Makes Three
Demands
W€
it takes
to
come
to
assure
-
public
whole
the
debt
or
management
the
—
pecuniary process—that in
analysis determines
last
in
the
was
satisfactory
rate of economic expansion m the
that lie just ahead of us, it
years
.seems to me
to be
met.
that three needs have
The first
requirement
is technological advance. The second
skill
is
of
operational
the
comes
comfortable
businessmen and
simpler
would
day
P
much
pretty
would
we
this
of
just
itself
run
leave
a
process
u
it
"
f.
into
organizational
management,
or
Third
quality of broad
eco
-
bed
find
if
»
for
cant turn
you
loose to find its
Our modern
the
ning of it is
of
places,
in
way
nis
DC-6
a
home.
run,
and the
complicated
a
through
controls
nnp
no
-
-
an
that
{orm
the
up
in the government and
nrivatp
the
industrial
understand
anH
that
aiua
and
smoothlv
money
us
its
ner
'iudel
,„c
the
that
mai
,uuk-
keen
Keep
cannot
side
of
mechanism.
as
main
Street.
He
Savings
it
it
11
roaster
that
The
operators of
an
ro_
trouble
economy
use
of
science
"•
will
by
banquet,
George
C.
June
President
of
the
insti-
tut ion.
Bejj
w^0
do2(m
jg
director
a
corporationSi
vacancy
0f
deveioping
power and then using
f/-,
+u„
that nnumr to foui
power
np the delicate
economic process
in
ways
minister to
our
some
a
It
the
FooL
I wish
mental
assembly line
,,
that
individual desires
preconceived
"rights."
each draw
run
on
notion
would
you
picture of
such
a
an
basis
is a great
temptation to lay
blame for economic disruDaisrup-
half
death
of
Thomas
H.
Born in New York City,
began
Bell
financial writer
his
"Herald Tribune"
career
as
a
the New York
on
in
1929
and he
wrote financial news for the new
WiUlc aiucuiuipi news iui mc New
,
.
.
TM1
.
To be brief, 111 give you my
answers
as
to the first
two of
egy.
these
factors
graph.
*ull
m
The
thiid
treatment.
Interms
to
seems
one
para-
requires
the
that
technology,
there
ample evidence that
the scientist and the
engineer can
be counted on to do their
part in
the needed economic
«...
and
appear
to
accuse
the other of "back-seat
As
matter of
a
the
back
better
*
of
me
short
-
,
suits
driving.'-'
fact, neither is in
seat.
The
described
pilots. And both
as
situation
that
of
is
co-
must know their
job and must behave themselves
if
are to have
happy landing,
a
even
approval from this audience
by saying that
could straighten
and go along on
we
everything out
a
wi
sustained and glorious
program
of economic
expansion if
only the
quit extravagant spending, balance-the
budget,
government
and
lower
would
taxes
Financial
Writers
Association.
was economic advisor to
Thomas E. Dewey, research
Gov.
consultant to the late Wendell L.
Willkie, and a member of the editorial
board
"Times."
tion
of
man
York
resigna¬
Superintendent of
Banks, Mr. Bell
of
New
Following his
State
as
the
of the
named Chair¬
was
Executive Committee
McGraw-Hill
Publishing
Co.,
Inc- last Jan- 1» and a mor»th ago
became ^
publisher
of
"Business
Week." Among his other activities
Mr. Bell is a member of the Board
of Trustees of Vassar College;
President Board of Trustees, The
Lenox School, and director of the
justifies calm
confidence
future.
carry
It
on
performance that
for
the
promises that they can
old
comoanies
and
set
up new ones which will follow the
call
of
private
enterorise
auite
adequately both in production
♦From
an
and
address by Dr. Nourse before
City. May is,
Bo.^,
1950.
tional problems
successfully. In
total
we
a
are
way,
solving
making
economy click is much
operating
great
a
industrial
so
a
like
as-
not going
to say
that because the case is not
anywhere near that simple. Nor
is
there
the
slightest
that business is
likelihood
going to get swift
sembl>' line- There are a great and ample relief from
man£. seParate parts and subas- lems in this manner.
'.M ^d
neleO and timed
,ogether int0
mechanism
its
prob-
that they flow
a comP»ex worki"g
under
the
hands
of
the
annual
Hotel,
formerly for
Examiner for
Chief
New
York
Clearing House,
May 9 at the age of 87.
on
Jersey after
Born
week's
illness, was
Montclair, N. J.
a
resident
a
of
in
Cadiz, Ohio, Mr. Hanna,
after graduating from high school
there,
it
went
is
to
learned
Nebraska, where,
from
the
Newark
"Evening News" of May 20, he
began working as a ciciis. iui the
uegem wuiKing da d clerk for uie
^
J°™pany, °f Nw
•
Lincoln
also take the following:
we
"While
in
Lincoln,
friends with
he
made
Generals Charles E.
Dawes and John J.
Pershing. Their
friendship
a
Hanna
in
left
the
to
travel
1897
with
lasted
General
travels
the
last six months to
t0
the
dangers
Continued
on
ot
arouse
lar8e
page 34
West
Dawes.
In
1899 his
by
an
for
lasted
New
New
until
government
The
about
Mr.
Lincoln
offer
position of National Bank
Examiner
that
in
cut short
were
for the
lifetime.
bank
York,
dissolved
York
job
a
when
1911
the
the
post.
Clearing
House
immediately I111CU Mr. Hanna
hired
11I11Ilcu.aw;iv
chief
held
iYll
Examiner
until
"Mr
position he
the
his retirement in
Hanna
1939.
author of
the
was
as
^.ma¬
ftS?1 theAbank bulld"
Avenue, near
County, Ohio,' 'Ohio Valley Gene¬
alogy,' 'Scotch-Irish of Ohio' and
^ere
Street,
on
it
about
or
wiii op^n
'Wilderness Trails.'"
a
;
*
lo^ng approval by the Superintendent of Banks.
-nrpcpnfiv
arp
The
premises
nrpuninri
presently
are
George B. Maxwell has joined
July 3, fol-
occupied
by
it
^
the
_
Salle
Chicago
is
as
learned
leamea
'Journal
Bank
National
of
Assistant Trust Officer
from
irom
Chicago
the
uie
of
of
May
Commerce
New Yor* Trust Company
This
ZUTswill become the fifth New York
n° GS
Trust
Ofoffice of Bankers Trust Company, distant Secretary and
Jrus
Its Present locations are at 16
r
Co. of Chicag .
Wal1 street» Fifth Avenue at 44th ft is added that C. Ronald Fairs.
Street, Rockefeller Plaza at 51st former investment ;; analyst for
S\reet> and Park Avenue
at 57th
Manufacturers Trust Co. of New
street-
__
...
«
«
York,
„
authors
of
book
a
has
been
Chase National
Miss Finke
Women's
was
Jan.
j
Branches throughout
Scotland
LONDON OFFICES:
3
Bishopsgate, E. C. 2
8 West
Smithfield, E. C. 1
^49 Charing Cross, S. W. 1
Burlington Gardens,
the
64 New Bond Street,
r
tmeni and Loan
™lcer of the Industrial Bank of
off
1727
r
York
of
banking department.
HEAD OFFICE—Edinburgh
1, 1947.
Manager
Denart™,w
direct
of
activities
Incorporated by Royal Charter
"Moneywise'
untB her retirement
.*
Hirprt
to
named
been
Royal Bank of Scotland
published
Bank of New
has
investment
Salle's
,
M.lss Maureen McManus, Publicity
Director of Putnam's were guests
of the Associafion of Bank Women
on May 24 at a dinner honoring
H®len Knox and MaiT B. Finke.
Misses Knox and Finke are cowhich
,
,
*
W. I
.K
of New York until
her
TOTAL
ASSETS
£ 155,175,898
people
the
to
"News"
ing at 1002 Madison
Commerce
for the
on
Mr. Hanna was the autnor
Collections of Harrison
^
SO
at
Statler
'Historic
(
a
place
at the
Vice-
during
induction
Hanna, whose death occurred
Mountainside Hospital in New
at
Later he
-substantially
by
Difficult as the money and mar- and/or if labor would
G. P. Putnam's
Sons. Miss Knox
quit pushexpansion— ket adjustment process is, I don't ing
wages up, abandon feather- was President of the
lo be real pacemakers.
Association
Second, believe that, just as an intellectual bedding practices, and
drop inor- of Bank Women
I believe that our
1944 through
business organ- problem, it is any tougher than dinate
pension and other social
and associated with the
izers
and
operational
managers tke
technological and organiza- security demands. I am
have turned in
the
Post
Mr.
the
,
the
York "Times" from 1929 to 1939. First National Bank of
During that period he became the and by 1891 had risen
first President of the New York Vice-Presidency. From the
ministration
„
of
years
died
elected
was
Mr.
tiomic
^
the
Mr.
Roulston.
branch
SS?"
the
14.
many
the board created by
on
recent
proportionate to
re-
of
one
Charles A. Hanna,
90-year-
old
Elliott V. Belt
78?h
economic
the
office, 26 Cortlandt
was
take
on
in
of
Johnson,
t0 «lve
°r a rate of economic expansion
our
is
the last year. His formal
Brooklyn, it is
lu
,^acourse 15production
neS™
us maximum
Nelson
department
Commanders
of
£,0^;Foreign Policy Association.
It
f'Tse tne methods
hfmeThnrifnf
t0
to
to
thp
why
the economic processes that
make
our
one
that
operations
oDerations
UptJldUOIlS
running
0f
two
logic
the 1UUW1C
wxv.
rouUne
or
at
J PJjJ ° d *
"S,ars
d
modern
our
matic"
"ldUl
so-
elaborate set
center
in
,everaT nr'oopc^
run-
process,
®
brains, big and little, that
techniques,
iviin
p™
saying is that there
am
reason
hi^ centers of
tn
to
10
price-organized
ciety has to be
It is done
hnmp
home
nome
his ..way
stall, but
v
is
OP
s f national fipmhlv
prfpptHMvPn^fnrhiHi
eiieci. Heaven iorDia.
f
alone,
if
w™,Vfhthat WaSrSe,n
validity
^ on
..
,
anH
®na ec°~
*
wj^
belief
economists of
that
nrn5npr;tv
P
0* ductive
It
couldfurnOMDobbin t^selnd
anal>'ze what
a
?
hv
'h,,.pnHnt
nprrfptlial
1
nnlv
Hon° "taff
"
Whifp
,
,
ot
childhood, "It's money makes the
mare
go.It is price, income,
taxation, monetary manipulation,
and
Sound Expansion
havin/thp
devise
the
rpali7PH
ran
human
Itself
re-
debt
•"'V" s""'e l"
that the spIendld Prom,se of our
muntrv
hp
,
No, all I
of monetary inflation and the
rlf3moneb!™intotinnS^d the^ }vhethe£ bus}Pessyears ahead.
wlU bo°™
languish
the
viewed
Now, don't get scared.
Don't
imagine I've suddenly turned into
a "planner" and am
going to say
"
Mr.
bank's
announced
the
.
*
The Money System Does Not Run
Not
Controlled Plans
mar-
ket conditions within which these
tactical skills of the technologist
at the moment
we are
to
Self-Regulation,
Veterans Asso¬
meeting
18.
a
by the "Dime" trustees to fill the
Seek
War
May
maga¬
Dime
a
We
Estate
ciation,
at the .annual
election of
officers, at a dinner
Bank
pro¬
of available
economic use
Real
of
e r
mortgage
as to assure
up to the
Commander
of
peter
Post, the Real Estate
Post
of the American
Legion and the
Minuit
elected
public
so
h
Assistant
elected /
trustee of The
proeure-
amounts
s
Nelson,
Week
are
resources-
do
promise of economic
Besides technological
haven't had any postwar
slump or
just because
third
a
have
economic
our
I
in
save
limit of
commen¬
happy.
to
Mc-
w-H i 11
zine, has been
series
Both
Tba* implies expansion
promise
rosy
just
to
that
1 i
in full motion and in equilibrium.
or
great potentials?
consider
that
to fulfill the
let
not
uui
of the '30s.
*n
Edwin
our
and spending,
the
the
H.
Vice-President of the
East River
Savings Bank of New
York wa-
Business
money
market
of
Walter
,
of
Publishing
Co., and pub-
re¬
portioned to each other that they
will keep the productive process
that full confidence. For
must
we
non-
America the
am
I
dient
tureof the
»must
with
not have
eco¬
Soviet future
and
recent,
decade
next
glorious past and
our
surate
struc-
the
r a
incentive to work and to spend
economic
our
private
justment must be such
which will be equal to that
more
bed¬
whole
in
progress
upon
which the
think
of
G
and private price and income ad-
promises expansion and economic
and
financial
I
the
of the government.
at
happy about the whole
So
Committee
ment and employment operations
-f.:
as
us
competent
are
performance, current and
a
?World is look¬
to
I'm
thing?
*
■1^
free
ing
they
of
of taxing
con-
is being properly handled.
So
our
entire
as
preferences change. That is
say,,
egy
pros-
perity.
precision. Furthermore, the
product
and
Chairman
now
Executive
New
Superintendent
adjusted to each other with some¬
thing approaching assembly-line
business tactics if economic strat-
I
"national
available
former
Bell,
private market be
flows
to
mere¬
ly those of our
private for¬
the
interwoven with the whole
sumer
presents to us
of
the kind of skill needed to handle
*
are
price, income, and investment
lations
They have shown
as new
V.
State
that cost,
expanding volume
a
crucial
year
*q
and (2) fiscal sound¬
in distribution.
Elliott
york
Banks and
Turning to the economic mech-
performance" is due to "putting cart before the horse."
The year 1950 is not merely the
parts,
anism, smooth operation and max¬
imum production require
Concludes "our unsatisfactory and dangerous national
economic
its
execution.
the details of
to
Bankers
CAPITALIZATIONS
total
the
lay out
coordinate
and
ETC.
REVISED
*
supervisors and foremen who see
or
(1) industrial
who
and
process
NEW BRANCHES
NEW OFFICERS,
There
are
engineers, and works
objective.
managers
operational management;
Stresses as twin engines of
ness.
to
competent
Asserting we mast not let the 1950's repeat disheartening rec¬
ord of 30's, Dr. Nourse warns we must ascertain whether there
is a healthy state of economic growth or an
inflationary boom.
Says sound economic expansion depends on technological ad¬
CONSOLIDATIONS
is that these peo¬
cooperating with each
reach a recognized and
are
accepted
and sound free market strategy.
numbers. The key
dustrial process
other
skill of organizational
thej work,
to
in this remarkable in¬
success
ple
By EDWIN G. NOURSE *
vances;
1950
with proper tools, and
stationed in the right places and
Performance
vs.
25
.equipped
in
Promise
Thursday, May
...
Club
Manus
the
Mrs
Mavflr
gave
informal Talk,
publishing business
*
nit'
Associated
Williams
on
Banks:
Deacon's
Bank, Ltd.
Glyn, Mills A Co.
La
Number 4910
1^1
Volume
The Commercial and Financial
. . .
Chronicle
(2163)
investor.
Small Business
We
have
earlier
seen
because
that:
high
a
Mr. Moore, in
tal lies in
&
business
Co., Inc.
pointing out greatest attraction for
venture
55%
old.
less
were
able
of
to'
cented
in
worth
net
All
was
9.4
of
these
have the facts and those who have the facts do not have the
money."
worth
investor
Lists^ unattractive features of small business, and
contends, despite difficulties, small
markets in their
localities.
own
concerns can
reach capital
Contends small business
(9)
years.4 A ten-year
study of Indiana retail firms, for
instance, showed that 78% of the
re¬
quires advice and guidance more than capital and outlines plan
for giving this advice.
firms
with
$20,000
net
a
failed
worth
within
of
true
is
capital
,
meant
words "a few thousand"
tioned
are
in
the
quotation
What
the
two
statements
place itself in
prove
is that
which
money
was
willing to
>
the
ease
01
men¬
a
equity or in a
economy
is
cern
going
a
con¬
longer with us; the
has changed and that
no
business
are
The small business,
espe-
Efforts
to
earnings
and
more
gling
of
grow
have
difficult
enterprise.
such
from
been
retained
made
more
for the
strug-
The
retention
small
also
causes
size
7,
(3)
quite
of
a
peated calls for
'The
Small business has been
little overburdened (often
necessity)
with
above
vestor the
new
Redistribution
-
tion), which
was
either
Income
debt.
facts
the
make
in-
hard-pressed risk-taker
think twice before putting his in-
short-term
creasingly
f
bad.
un¬
tried
or
.was;
older
but
un-
roved
iri
p
e
a
:
scarce
is
He
at-';
tempted to show why this type of
capital was keeping itself more or
less in hiding—for such reasons as
personal income
tax rates, and widespread atten¬
tion
paid
among
all/ income
groups to security,
with a con¬
comitant flight from equity risks
into savings, savings bonds, lifeinsurance, and the like. Even in¬
vestment trusts with' the selling;
handle of "security," catering to
graduated
, .
the
new-moneyed
sopped
what
up
groups,
venture
not
surplus
willing
the
on
to
go
In
"capital gains" has resided
the only attraction for the overten-thousand-dollar
which
the
surplus
the
into
put
only
small
the
surplus
in
risk
their
return
for
small business.
some
looks like
Therein
why such a
reason
would
group
smaller
in
equity
Capital gains
good chance to prdf it,
•on
paper, but the surplus of that
group has been sadly
depleted,
and
point.
25% tax
a
is not
enough to bring
money easily.
such
out
vice-president
firm, had this
of
Wall
a
to
venture capital
__
28
25
facturers.
Collier*
Company.
The
Publishing
(7)
Some
.
to
finance
a
syn¬
While
what salary you made,
nowadays
sible.
.
.
Venture
The
.
is
it
not
pos¬
whole question
capital
revolves
-
of
around
the
is
waistline.
The
income
"middle
so-called
groups"
the ones who
are
have advanced the
most, and who
(multiplied by millions) have the
new capital to venture. The prob¬
lem seems to lie in how to get
them to venture it.2
the
Now
triangle
given
fact
appreciably.
the
have
to
which
formerly
has changed the
groups
picture
and
out
diffusely
more
dissavers
were
income
the
that
broadened
has
money
certain
Written
very
in
1927
which
interesting point
this study
terprises
thore
study
a
brings
to light.
a
venture
to
money
who
Those
the
have
That
money.
it up
a
general rule
properly
financed
be
can
ad¬
and
ministered by private syndicates
whose members
are
in
position
a
to be
adequately informed
Usks of the
enterprise.
,
a r e
-
usually
.
as
.
professional
to
They
-
or
Wealthy people who can afford'to
invest a few thousands in testing
relative
business is characterized
V„
J>aper
Presented by Mr. Moore before
of venture capital firms, New
i°JiP
City, May 23,
*°rk
1950.
a
one
of
or
has
It
new
a
"capital
and
labored
the
mouse;
so-
O'Mahoney Plan,
Federal
Government
and
has
Legislature
agreed with
Dr. A. D. H. Kaplan of the Brook-
ings Institute that there is
a grave
a
need to "broaden the financial
base for small businesses within
our banking system." 6
The answer,
they
say,
to
long-term
money for small business lies in
the Government for, as Dr. Kaplan
the
local
commercial
"overwhelming
an
bank
*>r liquidity."
J_bus
an,
concern
The Government
taketh away; it
blani
£al? ,s ln *J?e 1930^
timidity, but keeps the inter¬
es^ ra*e Pattern 20 years later so
low that Prlme credits are not
money-makers. Yet from the Fedcral eyrie, it wratches the banks
.
like :an eagle lest they make a
10811 not up to standard. It nods
bo/
1for
She
Short-term
ture
by
from
interview
that,
ness
not
ven-
the
with
he
small
said
Not Impossible for Small Business
/
to
Reach
Capital
Markets
seems
Just
all.
will
will
rpRp
ine
the
/v.;
fpll
tell
mnrP
more
nhmit
aoout
thp
tne
of this development.
progress
Monograph Nov. 17, 1938.
5 Ibid.
busi-
small
long-term
new
rinvpriinipnt
government
nas
Continued
>
HearinSs in
-7 As
problem of Small versus Big
Waih^gta.; m'S.
matter of interest
a
scheme of capital banks
survey
banks
with
5n
the
1948
the
answering,
survey
tested by »
FDIC member
Senate
stated
1,746 said
and
demand
feature.
Even
the
tee "on
Economic
19493 did not prove
all
Report
they
Equipment Trust, Series
2%% Serial
where
Equipment Trust Certificates
(Philadelphia Plan)
precisely prove
venture capital is lurking
do
studies
not
To
mature
$275,000 annually June 1, 1951
to
1965, inclusive
lacking.
or
To be
Unattractive
Investment Features
Of Small Business
On the other
business
small
guaranteed unconditionally as to payment of par value and dividends by endorsement by the
the property of Missouri Pacific Railroad Company, as Trustee but not individually.
Trustee of
side, of course, the
does
Priced
have its un¬
to
yield 1.50%
to
2.65%, according to maturity
attractive features for a potential
Issuance and sale of these Certificates are subject to authorization
Whitney,
partner
Riter
&
Co.,
in a study entitled "Capital for Unproved
Companies," New York, 1927, mimeograped and privately distributed.
ZMr. Thomas Phelps, Assistant to the
Chairman of the Board of Socony-Vacuum
Oil Co., stated in an article in "Fortune"
two years ago that «he of the big drains
on
available venture capital in these new
hands was the money spent on gambling.
It is estimated that between $5 and $10
billion
per
year
is spent in games cf
chance or gambling in this country each
year.
As an example of this, 12u oays ot
racing
HALSEY, STUART &, CO. INC.
McMASTER
Gulfstream Park in Florida
$90,000,000 at the Mutuels in
an average of $750,-
day.
bility
ington,
May 19,1950
,
Affecting Volume
and Sta¬
Investment,
Wash¬
of
Private
1949.
A. G. BECKER & CO.
OTIS & CO.
(INCORPORATED)
L. F. ROTHSCHILD & CO.
1949-50 season,
3 "Factors
& CO.
INCORPORATED
at
grossed
the
by the Interstate Commerce Commission.
Offering Circular may be obtained in any state in which this announcement is circulatedfrom only
such of the undersigned and other dealers as mav lawfully ofer these securities in such state.
The
R. W. PRESSPRICH
FREEMAN
HUTCHINSON
those
the
.
Missouri Pacific Railroad
anything, and
of
favored
capjtai bank idea, 3,298 said they did not;'
and 584 had not made up their minds.
the
the factors on which we have
Committeo
that
to
in
similar
was
14,000
The
,,ec
seems
(in
to
16
„
making
Hispiii^pd
aiscussea
on p(l(je
—~
$4,125,000
available
figures
,
Obviously only
not
loans
timo
time
businessmen
at
have not
The
by the Chase Bank,
Metropolitan Life and others, but
have gone into busi¬
themselves
for
neSS
felt
he
institutions
provided them to any extent.
exceptions to this are the
A
management.
when
never
4 TNEC
are
however,
loan, for the
also suf¬
concern
poor
"mrmy
for
funds
funds,
representative from New York
brought this point out in a recent plans
should
unworkable in conception. It
should perhaps be abolished, but
ih aijy case it must be realized
helped that in practice it has served small
business not a whit.
*
s ep
(8) The small
fers
^-e win be carried out
^fh'mktfVc^long'view'The 'The capital marke^ ara ha«*
ksharng
belt Sy or for sma» business to epter- bu*
man¬
agement.
supply question defi¬
feyver still to prove
this
nitely
the
000 per
a
its
has
forth
brought
called
scheme
It
Realize, however, that there are
few
1 John
as
centralized
banking."
with
short-term funds, the
enterpriser does not lack
sources:
Field warehousing and
rather neatly.
In
we find: "Immature en¬
enamored
theory) do not have the facts, and
those who have the facts do not
.
madeT available
rates/e
relatively
the
(question of 'surplus funds'."
Another
prominent
investment
banker
become
husirie^is
equipment financing have
look him, too;
enterprises
form a syndicate great detail gone into by the re¬
anything.- Nowadays it search staff of the Joint Commit¬
dicate to help Thomas Edison. In
those days
you could save some¬
has
fi
small
largely to one or two people to
important thing to
keep in business. While there may
fattening of the be other
employees, the small
most
notice
prove
the
the
begins operation with: less
capital than it should have. This
again is especially true of manu¬
20
1815.
Crowell
Source:
Street
about
say
shortage: "In
hard
thing from
fh^r^ntinncnf
often
16
16
11
1,000
Under $500
J?20s, you could
to finance
be
rich,
man
il
14
500—
sum
One of the outstanding individ¬
ual experts on venture
capital, a
■would
a
but the usual picture is one of the
Comparing
1,000— 1,500
a
the chance of
even
make
can
bu"
business enterprise.
new
lies
to
class
income
formerly had
available
is
business
Small
Mom.
volatile and
S
have
.
money
might linger there, to invest it in
high-grade stocks.
■
redistribu¬
'
Philip W. Moore
Government
unhappily when someone points
1950 business
earning for the owner bit ion
cnifZt nf
anH
out that banks prefer to be liquid
previous years, little more than a living.
1941-2 and 1935-6, we see the fol¬
have attempted to show that the and> frowning earnestly, decides
(5) The small business requires amatf
not treated too t0 start a Iittle banking venture
lowing changes in the so-called
more capital to enter than before
S/a
hf thfm T°
/ of its own. After RFC has failed
income triangle.
the war, but the capital needs are
course
higher for'the in its ideas' H comes up with the
not excessive for retailing, whole¬
Distribution of Consumer Units
'than
the
larger
O'Mahoney Plan. Whether that
saling, or certain types of service
By Income Classes
rOwer,
then so are
risks
reestablishments.
Manufacturing
Income
1950
1941-2
1935-6
higher. The Small business does,
■
presents a far different picture,
$5,000 or over
8%
4%
2%
dollar-wise, a large amount of / The RFC has been under fire of
however.
business with banks' and does a late months, and its service to
3,000—$8,000
17
11
4
(6) The small business/in its tremendous business with factors small business, such as it was, has
2,000— 3,000
21
21
10 : :
eagerness to commence earning, and
industrial banks.
1,500— 2,000
13
15
11
Thus, for been shown up as inefficient and
this
at
Earlier
high
the
at
with two groups of
power.
studies
look
tion of income should be valuable
i h g
n
r
brief
A
and
new
National
of
The
plans on paper and taken
two home for the night.
has
(4) Small business is a rela¬
blindly and jump from a taxable
tively profitable operation in good
frying pan into a problem-ridden,
times and can be most unprofit¬
money-consuming fire
able
in
(
posi-"s
11
thought, debated and held hearings, discussed and wooed ideas,
It has, of late sessions, flirted with
re-^says,
capital.
.
''senior"
about
some
shortage of venture capital and
line.
fact must be faced.
so-called
general
small
cially, finds the tax burden great,
times
bad
of
hearings.
Th,e
record
accounting
fretted
and
12 years now, since the TNEC
or
away.
bookkeeping,
and
(10)
than is the larger enterprise. Pre¬
really vious tables in Chapter III prove
getting this point.'
venture capital together to finance
extend
in
The
the would-be
causes
poor.
above.
small business
or
existence-wise
man-
worried
■
propositions
(in
either
project
and
are'. ac-
(and
the just-plain-small) for
over
Capital has been rela¬ the commercial possibilities of a period—1928-37.5
in lower supply than was new invention or a new process."!
(2) The small business is af¬
two or three decades ago. Note the casual way in which the fected much more, earning-wise
venture
By
problems
shy
methods
Venture
tively
to
keeping,
ten-year
a
difficulties,
This lack of depth un-
derstandably
group was 30
leadership,
by the small size of
agement.
17.7 years; and that of
businesses in the $75,000-$500,000
This
quotient, and
error
managerial
years, that of an" enterprise
with
some
$10,000-$75,000 net
was
."
.
.
of
weakness
general
$10,000
running
requires quite
technique
high personal
under
capi¬
It
the small business vulner-
makes
The TNEC
problems of
business.
different
a
roofing
good
a
textile
or
various
own
showed in the late 1920s, the av¬
erage life of a small business with
to venture do not
money
failures,
than three years
capital gains, contends because of redistribution
national income "those who have the
his
a business
last three years has it passed
the danger point. Dun and Bradstreet estimate that of all 1948
Schroder Rockefeller
Treasurer,
the
can
is
man
designer does
make him capable of handling
not
mortality rate; only if
By PHILIP W. MOORE*
a
salesman
(1). Small business has
•
Asst.
15
/'
•
.
&, COMPANY
& CO.
la »• (2164)
)A
Continued
-The Commercial and Financial Chronicle /.
•.
from
15
page
",'y
r
in.; 1944, ..a. representative
sample of small firms in all in¬
dustries
certain small businesses should be
offered
of
to
the
investment
an
customer
relies
selection
of
Capital
few steps toward this
been taken.
The
local
or
that house for
on
which
have
been
for
was
der,
plans
(such as
tried
—
had
experience
community
tion
in
be
can
the
presumed
his
small
the
not
are
business
out
exception
Wall
financed
Street.
.
.
well
as
tive
line
of
business.
that
small business could be
helped
local ground by people who know
the proprietor and who know his
by
.
cannot afford
be made
pay
that
much for it.
He competes for such advice with
businesses
The
general conclusion it
is that small business
requires ad¬
financed by indi¬
were
viduals in local communities.
vise
."8
..
with
up
small
any
and
guidance
requires capital.
small
retailer, wholesaler,,
establishment, of course,
to
come
by
than
more
Figures
to
Doctor
hard
are
are
shortage for the small
curities in general—here the small wholesaler, retailer, or service or¬
ganization, but that the small en¬
manufacturer
does
have
some
edge, despite other limitations for terpriser could well use guidance
the
service
does not have
he
chance to sell
a
at least sell
can
shares
in
(which
his
does
have
value) for what he
A
recent
in business matters is at
book
some*
get for it.'
and
capable
banking houses decidedly showed
pointed
concurred)
the
small
business
cannot raise money in the
capital
centers, and showed that the locale
of
the
business
the
was
place
subject, let
state
here
again that
the
us
of
cost
an
equity issue is not what has
kept the small business from the
cost
With the
does
enter
the small
to
raise
the
It is
a
picture; with
business, it is fortunate
what
it
money
can
re¬
gardless of the cost of distribution
of its securities.
No matter how
small the
them,
net
after
owners
of
filtering through to
public offering, the
the
small
business
are
of
possessed
with
ing to
and
Small
the need
The
not
nor
can
the cost of
distribution of risk
securities,
sidering their general
be considered
con¬
character,
exorbitant, and che
registration exempt feature of
less
sues
than
$300,000 is
tive for the small business
is¬
attrac¬
as
well
inexpensive.
as
The IBA idea of
stressing local
investment companies to aid small
business
the best plan of all
This is agreed to
by
almost all students of the
subject."
It is a flexible
system, geared to
local problems—but
it will take a
great deal of
organizing.
those
seems
seen.
Nothing
concrete has been done
about this
to date and
nothing is in the wind.
The
private
venture
houses, while they
capital
do represent
a
step in the right direction, are not
answer to the small
business
equity or venture capital
problem,
the
although to expand this
thought
from
the larger
capital centers
(where it is now
concentrated
into the locale of the
small busi¬
ness) would be a fine answer. The
cumulative experience and
larger
funds
of
a
cooperating
group
of such houses would
give such an
idea
an
excellent base.
good while off,
8 C.
This is
a
however, although
C.
Abbett, "Harvard Business Re¬
view," Winter, 1946, "Small
Business—A
Community Problem,"
9 Under
ment
p.
small
this proposal chartered
invest¬
be started in local
companies could
would
be
called
upon
to
accept
debentures of paid-in capital.
These
chartered companies were then
cial
permitted
ing
to
including
take
on
any
ownership
a
ad¬
business
be
form of financ¬
of small enter¬
separate
company
pool,
to
to
cover
man
of
under
formerly with the trading depart¬
ment of Reynolds & Co.
and prior
elements in the community and all
small business as well.
It
should
lend,
schemed
in
thereto
&
ley
fashion
some
Chronicle)
T. Matz
has become associated with
Whee¬
lock & Cummins,
Inc., 135 South
La Salle Street.
Mr. Matz was
(1) The advice should be local.
(3)
Financial
was
Co.
with
Harriman Rip¬
Chicago for many
in
vice and
be
to
as
within
pocket-
years.
where necessary, some ad¬
guidance as to required
book reach of the small business.
In the survey of. small firms
mentioned
should be looked upon as
Opinion
above,
the
Research
National
said
management
indicated
had
on
of
that
Center
as
outside
of these referred to their trade
as-
socations who did not use outside
professional service for advice on
advisory groups
community charge
Annual Field
client
a
and
not
The Bond
prob-
or
will
'
(5) The advice should in
way
Club, Montclair, N. J.
Events
scheduled
for the day
golf; horseshoe pitching; a
putting
contest;
and
a
special
event!
Luncheon will be served
small fee basis.
a
Day
Jersey
their
clair Golf
be paid for by the small busi¬
on
hold
Club of New
annual field
day
Friday, June 16, at the Mont-
on
some
ness
are
(6) The advisory center should
encourage local interest in busi¬
and in
ness
management problems, only 1 out
of 16 had felt the need of such
advisory functions.
(7) The movement should
mote
aid.
businessman
the
a
lem.
manage¬
ment problems in 11.1% of. the in¬
terviews made.
Almost 3 out of 5
small
V'7':77;7;77--V7''
-
Bond Club of N. J.
and available funds.
(4) The
:'■/■.,7,.:
general
interest
in
in the
and
pro¬
results
a
grill from 11:30 until 2:30
snack bar and beer will be
available
on
promote
how
or
The
to
Department of
Commerce
last analysis, locally. The CED
has
stated
this in their books
on
far
so
the
as
to
"Hand¬
as
Bank Credit" and "Selec¬
of
Sales
Personnel."
The
on
tion
Louisville
Industrial
Foundation
and the New
England Industrial
Development
Corporation
have
shown that local advice
locally
ap¬
plied is best. As G. Harvey
Porter,
Director of the Industrial
Corpo¬
ration of Baltimore, said:
"Thirty
years of experience of our cor¬
poration, dealing with hundreds of
has convinced
cases
business needs
cash.
Small
counsel
and
It is easier to
to
stay
in
your
fortable management rut
correct
practices
your
your
policy—if
cash;
whereas,
you
than
will
shortcomings with
your
cash
more
business
agree to that.
up
that small
us
small
not
cover
new
com¬
than
or
can
to
vary
get the
business
can
many times effect more fi¬
nancing faster with a new policy,
and sometimes personnel
changes,
than in any other manner."
Mr.
of
W.
the
L.
Stoddard, President
New
England
Industrial
Development Corporation, said in
1945: "Small
industry has special
problems of finance, management,
research and
marketing, etc., not
adequately met by existing facili¬
ties.""
.
There
vice
are
many reasons for ad¬
and
guidance being needed
by the small enterpriser, but the
greatest of these is the inexperi¬
of
ence
by
the
the
search
owner.
National
In
a
study
Opinion; Re¬
Center, University of Den¬
part a CPA
CPA's
W.
Local Credit
1044;
11 The
B.
of
Harrison,
reader
cases.
the
to
the
avail¬
able copies of the
tations.
hearings for exact quo¬
"Hearings—Subcommittee No. 2,
Finance," Pursuant H.R. 18, Washington,
1948.
l
^
From
Schcol
of
a
speech
before
guidance, 7 it was
substantial majority
/
'
7 /
note, before
Committee on Small
Select
Business of the House of
Repre¬
sentatives 14 stated: "Somehow or
other it seems to have
stepped up
so that 80% of small
business,
questionnaire
and
our
research
showed, seek advice and want in¬
formation badly.
They welcome
our
researches.
Such testi¬
*
.
typical of all those
hearings that lasted for a year or
mony
was
more.
Need for advice has
gone so far
that the NAM in a
study in 194615
in charge of the golf
committee;
..
be. Charles E. Reed, Kean, Taylor &
made to train the
management of Co., and Ray Vanderhof, Fidelity
small business in
necessary skills. Union Trust Co. of Newark, of
It
should
be
potential
should
drummed
small
will
success
efforts
into
about
come
the
Graduate
Banking,
American
Bankers
Association,
at
Rutgers
Univ.,
New
Brunswick, N. J., June 20, 1944.
horseshoe pitching.
the
businessman
charge of the special event
are Carl A.
Preim, R. W.
Pressprich & Co ; James S. John-'
son,
Bramhall, Barbour & Co.;
scheduled
only
through skilled management.
(9) The
center
house of
cial
advisory
should
other
or
seeking
\
groups
as
1
^
business
banker
and
is
cross
supply
and
small
help
on
firms
with
advice
the
managerial, technical
and economic problems.
It is felt
that small businesses cannot af¬
ford to provide themselves with
this
service,
concerns
whereas,
Mr. A. M.
the
larger
do so."16
can
with
local
*
both
Sullivan, Vice-Presi¬
Bradstreet, stated
dent of Dun and
in an article: w "What
the smaller
manufacturer needs more than fi¬
nancial
or
tax
preferment
is
management guidance, especially
in
product
and
marketing
search.
He
can save
costly errors, and he
decisions
with
a
himself
can
re¬
some
support
greater
confi¬
dence and swifter
competitive
ac¬
tion,
of
the
and
dis¬
if
he
technician
has
the
aid
in production
tribution."
in
As
a
direct
seems
Fewel & Go.
LOS ANGELES, Calif.—Thomas
Keller and Edward E. More
H.
have
to
For
13 "Small Business:
p.
New
York,
Its Place and Prob¬
McGraw
Hill,
1948,
10, 1948, in Washington, D. C.
"Financing Small Business," NAM,
New York, p. 29.
16 See Barron's, Jan. 9,
1950, "Does Dy¬
namic Small Business Need
Aid," p. 5. •
15
17 "New
Horizons
for Small Business-
Manufacturing"—-"Printers' Ink," Oct. 31,
1945.
formerly
was
Keller
Crowell,
Morgan & Co.
with
Weedon & Co. and
Mr. More
reason, the study is impressed
by
the possibilities latent
within the
&
state; i.e., the organizations with¬
fice of
Co.
was
with Daniel Reeves
and
prior thereto was comanager of the Beverly Hills of¬
in each state formed to
foster the
growth of industry and
Buckley Brothers.
Hanover Securities Co.
commerce.
Connecticut
Commission,
Development
for example, if it
Ralph L. Albanese has formed
Hanover Securities Co. with of¬
had cooperation
up and down the
line between state
and
locality,
could readily
support local efforts
and act as a
clearing house for
financing and research. The New
York State
Development organ¬
ization and similar
groups in other
states could so
serve, and could
the growth of
the local
groups within their own
state.
On such
incidentally, foster
allegiances
small
industry could thrive without
quiring the last straw of
re¬
York.
securities
fices at 37 Wall Street, New
City,
to
in
engage
a
business.
Singer, Beane & Mackie
Singer,
has
40
been
Beane
Exchange
City,
to
Mackie, Inc.,
&
formed
with
Place,
engage
in
offices at
York
securities
New
a
business.
Federal
|
^
18 C. C.
Abbott,
op.
cit.,
p.
staff of
Union
bers
been
added
Maynard H. Murch
Commerce
of
change.,
the
Building,
Midwest
Chronicle)
MIAMI, Fla.—George F. Adams
has joined the staff of A. B. Mor¬
rison & Co., 936 du Pont Building.
Chronicle)
CLEVELAND, Ohio—Phillip
Hopkins
has
With A. B. Morrison Co.
(Special to The Financial
183.
Joins Maynard Murch
(Special to The Financial
14 June
associated with
453 South Spring
members of the Los An¬
Co.,
geles Stock Exchange. Mr.
this
suc-
237.
&
Street,
vested with great¬
great effect.
become
Fewel
ad¬
an
study of this prob¬
"The small business¬
to realize that the
;
(Special to The Financial Chron tout)
«
theory, that
aid.
lem states:
D.
Bank
a
investment
financial
The
~
State
Keller, More With
boards
or
seem, however, that
local advisory method
visory function
efforts
Glenn
and
National
section of)
would
sound
er
a
life,
a
firm serving.
while
Kress
Thomason,
of Newark.
help, and of capital
employment on
should include
It
John ! W.
clearing
seeking finan¬
(10) Advisory panels
local
or
a
venture
local basis.
a
act
concerns
The commit¬
tee in
that
potential and able to
"Strong sentiment favors
tap a broader field of
government setting up an advis¬
experience,
would be able to back
up the local
ory
service
specially suited to
stated:
lems,"
referred
or
a
.
(8) Definite
"Louisville's
26.
is
or
advice
The advice then is
needed, and
it is looked for
eagerly. As the
testimony of J. K.^ Lasser, a tax
consultant of some
Pool"—"Banking Magazine,"
o.
attorney. Insofar as
lawyers can give finan¬
or
available in
man
10 See
two-thirds used, for the most
over
cial
hire personnel.
has attempted to fill this
gap, but
the answer must be
found, in the
spe¬
to
prises until their stock could be
disposed
of.
A certain
percentage of the loans of
issues for the
borrowing firms would be
withheld to go into
enable the financing
any. losses.
and
it, how to develop it, how
it, how to keep its
books, how to improve production
to
185.
communities, with a minimum of
$25,000
of paid-in
capital, and the Federal Reserve
Banks
pertain¬
for management
guidance
requires advice
book
great,
Busi¬
year were
statements
financial
vice.11
ac¬
business.
Committee of last
ness
firm
(in general)
they
professional advice
must
means
to The
CHICAGO, 111.—Charles
(2) It should be able to secure
the
cooperation of all business
Surely some
plan for local advice could be so
Committee
the
advice
the Senate-House
replete
small
present conditions."
that
the successful financing
The hearings
small
of
(and
that
typical
previously,
capital which for¬
merly existed not at all for them. subject, and has gone
issue pamphlets such
Registration costs for small issues
are
Dr.
beyond the financial
(Special
on
the North Terrace
However, over half of the
and attempts to interest the com¬ from
4 p.m. Dinner is in the main
financing, on J firms interviewed used an out¬
credit, on inventory handling, on side
munity both as consumers and in¬ lounge at 8:00 p.m:
accounting
not of
consultant,
in;
whether to start a
vestors on sources of
expansion
business, when most cases a CPA. On tax matters
Foy Porter, Estabrook &. Co., is
larger business,
to start
funds.
general securities market.
matter here of kind and
degree.
out
company
of
to
seek funds, not the general
public.
In closing on this
evi¬
once
proof.
mentioned
however
that
of
Kaplan, in his discussion of capi¬
tal banks before the Senate Com¬
investment mittee,
of
survey
dent
machinery
can
a
capital
se¬
representative
planter
prove
Charles T. Matz
any
necessary:
ness
venture
or
of some sort
up
\yithout coming up here
organizational ideas for
centers, it would seem that
the following features would be
Kaplan
counselling type), except per¬
haps in the area of accounting,
doubt
such
points
out:13
"Competent services (of the busi¬
it
setting
busi¬
little
seems
stances.
with
...
of
the
should
advisory
centers
would
be
probably the most constructive
step under all present circum¬
large business since, for example,
firms are not organized to do and Small Business Requires Guidance in
1944, it was estimated that $65
The word "helped" is used ad¬
they do not pretend to do such
million was paid by all business
financing.
By survey, an over¬ visedly—for if this study has come in the U. S. for such advice.
As
proportion
manage¬
small
to
of
should be financed and Wall Street
whelming
available
There
ness.
77.7;7:
to
Local
and financial advice
ment
Small business needs advice but
In
fact, Wall
place where they methods and his capabilities.
Should Be
Advice
p: This study feels that
Cannot Afford to Pay for Advice
on
manage¬
It
financial
background.
their flexible
arrangements, the
as
almost with¬
are
not
Street is not.the
funds.
seek
to
"Small businesses
for venture capital problem,
places
strained
and
employee, sales¬ nances
or some educa¬ ment."16
as an
apprentice,
investments, not the Louisville Industrial Founda¬ experience was limited to a frac¬
his risks. In general, we find that tion) 10 have proved valuable an¬
tion of the 11.3% who had indi¬
Wall Street or the larger capital swers to the local small business
cated previous owner or execu¬
centers
Charles T. Matz Joins
? Wheelock &
Cummins
except for
had
goal have
.
Thursday, May 25; .1950
the businesses
executives; the remain¬ small businesses
about 15%, who which have begun to. experience
no
experience, had had the "growing pains" of limited fi¬
owners or
man,
the
house,
job and that he
should be willing to receive ad¬
vice from other sources.
Many i
..
a
customers
average
for- his
"
asked,: "What expe¬
rience or; training: did you have
for this; business?"Only 11.3% of
the)' small businessman who
had had previous experience as most need help are the growing
Small Business and
Venture
trained
be;
businessman .must
f U'l
c e s s
ver,
V
>
to
G.
the
& Co
mem¬
Stock
Ex¬
Leo Schoenbrun Adds
(Special
LOS
to
The
Financial
ANGELES,
B. Pantell has been
staff
of
Leo
Chronicle)
Calif.—Joseph
added to tne
Schoenbrun,
Westwood Boulevard.
Uod
.
Number 4910
171
Volume
...
The Commercial and Financial
Chronicle
By H. CHRISTIAN SONNE *
Board of Trustees, National Planning Association
President, Amsinck, Sonne and Company, New York City
'
»
•
•
'
f j
■
.•
•,
1
'i
'
*'■
' i''
••
discussing fiscal and monetary problems, main¬
cannot keep our money sound and, at same time, keep
Mr. Sonne, in
tains we
within reasonable bounds if public debts
taxes
increased at
are
rapid rate. Advocates making efforts to accumulate budget
sur¬
pluses large enough to keep National Debt within safe limits
and not in excess of what can be absorbed by savings. Hints
wider market will be needed for government bonds if deficits
higher interest rates will be demanded.
continue, else
ask what will
the years to our na¬
tional debt—will it go up or down?
On this point everybody may have
One
well
may
happen over
opin¬
his own
restricted
if
prohibitive
debt
materially
mounts—the
because in order to find
a
ion, but I fear
market for those
that many re-;
ernment may have to pay a much
the
alize
po-
today.
stacles to
that
the
a
than
tent
We expect to
the
over
years.
This
H. Christian Sonne
'
the V
is
touch
we
the
times
several
Here
entering
a
period,
new
(whether through fiscal pol¬
icy, taxation, unemployment in¬
old
surance,
pensions,
age
Have
not
we
factor of
our
to continue
ard
of
increasing
life
if
we
our
such
upon
bring together
an¬
other conference of leading econ¬
omists to discuss this whole ques¬
by
almost thirteen
times, while the national income
has increased only about two-andone-half times.
At this rate, we
penditures
might have
There is
budget of
a
billion
dred
ten
hun¬
one
from now.
years
great danger of gov¬
a
getting into the habit of
ernment
spending and playing Santa Claus
for
votes.
increased
pleasant to
Moreover,
service
debt
is
not
contemplate.
well
full
I know
about
ments
speaking,
all the
argu¬
technically
how,
much greater debt can
a
be serviced
involves
a
that
and
it
such
conference.
a
that
pay
hibitive taxes
without
move
ahead
any
sion?
A recession-—if kept
within
bounds—also has its advantages.
operated a haberdashery in St.
This is not just talk but a very
serious reality which I al¬
observe in the practical
now
working
field.
is
it
But
Remember
or,
much
tween
less
that
Western
the
than
half
million of our
productive and be¬
ages
of twenty and
seventy
say,
citizens
of
some
are
the
sixty-five.
With
true
work—"too
American
Are
not
we
ed
by
but certainly "too
Republicans!
habit
the
in
When
nomic
we
crisis,
talk
about
an
If General Motors
stitute
sick.
Federal,
ment
They
state
and
must pro¬
unproductive
local
govern¬
the energy
of these
seventy million produc¬
tive citizens that the other eighty
million find support. Add to this
that
the
cold
war
will
call
for
great efforts.
This will show why we can
afford
middle
social
ages
to
have
that
loafing,
or
ill-
productive
softened
legislation which
group
collects
through
encour¬
to have initiative
*Part of
iac
the
an
address
students
and
by Mr. Sonne befaculty of Antioch
bellow Springs, Ohio, May 15,
of dollars
sells Chevro-
confidence?
We
the opportunity
have
in
to
general
over-production
under-consumption.
Must
we
that there
also
not
are
or
recognize
other kinds of
eco¬
nomic
crises, such as lack of raw
material and power to produce,
keep
tried
on
no
a
i
t
think
that,
extent
the
create
the gold basis.
They
it fashionable to
can
Was it "sour
it
should
if
inflation,
we
to
is
thermometer,
a
less likes to have
of
terest
ignored.
as
on
one
{
neverthe- ihand in
need.
(4)Do
be
useful}
a
is true that you f
but the average mother
case
our!
which
gold
It
without
do
the?
want to f
to
come
monetary policy
our
thermometer.
effect"
former,
should
we
spending and
supply?
the
of it.
watch
grapes" or was it because produc¬
tivity increased in later years to
a greater extent than did the gold
If
our
conclusion
number
longer could afford
throw it overboard.
right. T
Federal Re¬
similar statement
a
wisdom
I
make
to
speculators;
the
any
Came the time when
j
recently, serious thinkers doubted
gold less than in rela¬
apt to take it
of countries
for granted that it has its origin
not mix
we
when
rates?
though it
up
talk
we
Do
"cause and
in¬
about
not
we
treat it
something that
were
If the
,
Among the metals that may be
in the soil—or, at any
Fort Knox—is apt to be
left
at
rate,
gold,
tioned
long
before
gold
was
in
can
one
"Methinks
the
Thus,
where
safe
find in the new world,
still make 15% on
we
one
can
interest
enterprise,
lady protests tod high, whereas in the old
,
peri¬
Would
are lower because of keener
competition.
If one has a little experience
you
want
to
deprive
ladies of wearing pearls and dia¬
wish to, just be¬
cause in the opinion of some these
are valueless?
It is not essential,
but it is one of the sad chapters
in economic history that the na¬
if
tions still
they
powerful enough to use
gold have been gullible enough to
for the "sour grapes" argu¬
ment of the so-called "intellec¬
enterprise
in
South America
age,
one
what
the
various
sound
country
private
in, say,
make
on aver-
almost
predict
what
knows
and
a
can
can
interest
inefficient. A recession from
The
'instance, when industry and agri¬
culture
realize
15%,
preferred
Continued
offer to sell or a solicitation of an offer to buy these securities.
offering is made only by the Prospectus.
$3,000,000
Interstate Power
First Mortgage
Company
Bonds, 3% Series Due 1980
1, 1950
Due January 1,1980
Price 1021h%o and accrued interest
time
healthy enterprises might
be equally fruitful.
perhaps
(2) Do we actually think
through the phrases so frequently
used—"A rising standard of liv¬
Copies of the Prospectus may
be obtainedfrom the undersigned.
ing," "increased production," etc.
frighten me a little,
Such sayings
because
rise
a
and
to
thing that always has to
keep
me
to
moving
be
of the
minds
me
asked
why
he
very
darky who was
did
leave terra firma.
HALSEY, STUART & CO. Inc.
does not
safe (re¬
not
fly
and
"No, Sir," he
May 24, 1950
the
(For
fall
weed* out un¬
to time in which to
in
rates
categories will be.
This announcement is not an
Dated January
rates
worldr
they
much."
monds
<
make that establishes the rate?
benefit future generations; for governments is to print more
oil, iron and coal left in the notes, which certainly costs some¬
soil may be of great value to our thing and consumes resources. My
reaction to all these protests is—country in time to come.
but
at elections, of weeding
politicians as are deemed
odically,
seem
ore
was as
eco¬
made
serve
supply, and the price
produce changed in re¬
we are
the country and
dollars, does not that con¬
a
vote of preference, of
out such
employees.
It is
solely through
to
misnoth¬
were
throughout
and
for
world
gold
always
When, therefore,
to carry,
other material that
practical to handle.
v :
of
equivalent of votes?
aged
support of the
the collection
not
Is
the
for
well
in
limited
was easy
world "■
was
so-called
practically
majority vote?
a
and
as
It
there
treating with a certain
dren
vide
the
certainly proved that they
They all knew what
right.
was.
the
were
economic laws
slowly," may be, for
the Democrats;
lets
we
the
in
tion
him
use.
We know also that one
him
get on in the world with only
Was that useful?
quickly" for the
expect them to pro¬
vide for the education of our chil¬
generosity
gold
,
[„
ing wrong with the country's cur- I
rency.
1 History has proved that i
each other's currencies and events
that future generations will need
such raw materials desperately?
contempt
dollar profits but at the same time
European countries, from which
with a degree of reverence the
we can gain
experience.
Congressman who has been elect¬
in
worse
confidence
such
to big na- •
would hear,
speculators
You see how the
point they hamper initiative.
ready
Louis which failed. That took
out of that line and brought
certain
a
no
gold
you
assure
guided and that
various
to
reces¬
The fact into another!
paid to ourselves!
is that when taxes reach
had
in
lation
owe
high and pro¬
because they also
we
People
statesmen
that
never
(1) Is it not dangerous con¬
stantly to want to interfere too
much with the economic laws and
he
much
are
we
their
|
rela-
Whenever
things have happened
trade.
were
gold.
tions in the past,
instrument for interna¬
basic
to
in
discount
familiar with the his¬
are
tory of gold and why it became
the
prices ana
The dollar is quoted
considerable
tion
currency.
international
in
latter, it can be rectified government or other authorities
by from time to time fixing the can fix any way they choose?
Interest
is
part
of
nature's
gold price at a level where its
Cattle multiply.
If you
supply stands in the proper pro¬ scheme.
science to help
improve living portion to the items which gold start with a hundred head, in one
surpluses in good times to keep standards with the same or even
has; to
represent. (Free capital year you have one hundred and;
the debt that will increase as a
a
smaller rate of resource use; and, to a lesser extfent, capital fifteen after having slaughtered
result of deficits incurred in bad
develop consumption of the kind wealth and debt.)
to
cover
expenses.
A
enough
times within r e a s o nab 1 e
bushel
of
wheat
will
that can always be replaced, such
produce?
The more economists assure us
bounds?"
as
of
twenty after harvest.
And so on.r
agricultural commodities; that
gold is valueless, the more
Let
us
analyze some of the and encourage personal services.
So, is it not the average rate of
ridiculous
it
seems
to
protest
interest that first-class farming,
questions
which
in the very
Remember the fruit of last sea¬ against it being used as a circula¬
broadest sense may be raised at
business and industry can safely
son
which was left to rot can tion medium, for the alternative
not
does
much because
so
factor
throw that away?
we
of
It eliminates extravagance
and which must be considered at any
unhealthy enterprise and forces
monetary conference.
it to ourselves.
But, we should unsuccessful people to go into an¬
remember
that
the
(3) Do we not take too narrow a
government other field of endeavor for which
a view on this subject? We know
ewes'it to particular citizens who
they are better suited.
President that
still count as individuals under
gold is not an essential for
Truman—- quem
honoris causa
our
Constitution.
By the
same nomino—told us that in the '20's our economic system, which in
token it should
many
parts of the world func¬
not
matter
so
matter
You
eons
gradual depletion of the nation's
raw
materials, when we can see
very
a
international
an
Should
have
right
stand¬
a
due to the softening of the pro¬
important is¬ tion of monetary policy and debt
ductive middle group of citizens,
sue.
To spend or not to spend, management.
which are more serious and which
We may not find unanimous
that is the question, a problem
we may one day face?
that may stay with us and be de¬ agreement but it will, at any rate,
May we not in the new era
bated for years.
throw light on this question:
•;
which we are approachinjg have
During the last twenty years
"To what extent can this coun¬
to call increasingly on modern
the government increased its ex¬
try afford not to create sufficient
central and
as
which after
gold,
countries
the
overlooked
national resources?
To what extent have
have
etc., tional
etc.) have to be modified.
Monetary Policy and debt service.
great ex¬
a
of
extent
amount.
increase
will
to
the
are
life
planting
such bonds in the banking
system form the basis of credit to
na¬
debt
1
that may be worse
greenbacks, be¬
but
unanimously agreed it would take
at
,
cause
fore, visualize
tion
pays
v
system,
times,
there-
exchanges.
gov¬
place such bonds in the banking
pluses even in
and,
the
The only other alternative is to
largesur-
good
bonds
higher rate of interest than it
litical ob¬
when
and eons of time the whole world
when all the arguments of the last
decades about rising standard of
increase
government
more so
ful
We
we
Wants
through
will
language.
If so, I see grave
danger for the
future, for I have a notion that
taxes.
Taxes
more
standards of life?"
bonds absorbed by private investors.
more
firmer, the
'
Chairman,
i
17
Nevertheless, it is use¬ tuals" in those countries that no |
travelling abroad to longer can afford to do so.
Can an economy not stand on a know
It is not essential, as I say, for
other
languages.
The
firm basis without constantly ris¬ trouble is that in order to feel intelligent, conservative business
ing? Let us not forget that over quite at home in the world one can," at some inconvenience, do
the last decades the
has to know too many languages, without it and, so-to-speak, steer
upper income
so for years and years one strove
groups
have
by instruments. Buthowwouldyou :
definitely
gone
downhill and yet remain reason¬ to introduce a universal language like here to be forced to use gole, I
ably cheerful.
Is it too much to —Esperanto — with an idea of slates instead of paper for your j
ask that, once we have raised the simplifying life and having each studies?
It probably is as inconj
standard of life of the lower in¬ individual learn merely his venient to serious business to use s
come
groups to a certain level, mother
tongue
and
Esperanto. paper instead of gold as it would |
they, too, as they gradually be-, However, so far no success has be to learned institutions to use ;
come
educated, should live as been achieved in this direction. gold instead of paper! ;
happy citizens, without this con¬ But, in the economic world we j Whether governments like it or :
tinual
agitation
for
improved have the equivalent of Esperanto. not, gold is still a determining
said, "the less
terror.").
To Spend or Not lo Spend
i
(21-35)
on
page
33
.
18
and Financial Chronicle
The Commercial
(2166)
.
Finds Menace in Farm
Mutual Funds
Prospectus
request
upon
investment dealer,
or
from
from
Conference Board holds farm
by extending price support to perishable products, is
creating surpluses that seriously affect both food prices and
farm incomes, in addition to causing heavy outlays by Treas¬
ury. Says main headache is in support of perishable products,
but warns any lowering of price supports in these products would
mean heavy reduction in farm income, despite increased
output.
market average. Df course, volatility works both ways, but we
sincerely believe that as a result •
mutual fund, but of our ioss limitation operating
Hietnrv
&
SECURITIES
RESEARCH
commodities
leased
in
Well
-
;
Port-
tax
-
advantage
,
to
y^e commodity market outlook,
according to the Futures, Inc.,
circular, is that firmness may prethe ,vaij until the major crops start,
in- c0ming in this summer. However,
on
now
the
books, and point out that, subto the two-year loss carry-
that
ject
1950
Dividend Shares
Securities
recovered, at about $9.75 a share,
accrue directly to the stockPresent
around
In
Prospectuses
offering price is
$5.00.
the
holding
both
,
Fund's
own
words,
its
from
"Futures,
tions
Inc.,
short
and
long
futures,
it
various
a
position
in
opera-,coffee,
15,
1948,
after
The Fund's commodity market
selling 2,567, shares at an original outlook concludes
by saying that,
offering price of $10.00.
At that:'"Unlike most companies whose
time
felt
we
prices
that
commodity shares are likely to decline 'in
high and were prjce when business turns downdown as they had* ward, Future, Inc.,
subject to
too
were
likely to
come
after other wars in American his-
CALVIN BULLOCK
Established. 1894
Therefore,
tory.
versified
took
we
the
di-
l a
According
skill
of
our
in
management
taking
Surpluses
to
position in commodity futures in order to profit
from the indicated dollar declines,
and
aided
by the
while in¬
crops,
Hence
toward
prices
support
levels
.
and which
year
+
The new
has to do
key problem now
s^rp
s 1
eat*
Much of the price and surplus
with
storable
crops
as
before, problem now is left to the disNot only the cost of the program, cretion of the Secretary of Agriwhich
is
running into more culture under the new farm law
money than was foreseen, but also which took effect this year.
He
its effect on food prices, on farm may set price supports anywhere
incomes, and even on political is- within a range which varies for
with
perishable food
in
of
the
rather than
election
1950
different products,
make
businessmen.
to
concern
Loopholes
Wellington Fund Sells Vola-
feed
coming
1949, pro¬
In
Public
>
much
showing,
are
opinion
expected,
as
in
the
has
mounted,
against the accumulation and
waste of perishable food surpluses,
very
crop
controls which were instituted to
limit 1950 harvests because of the
particularly in view of the recent
potato
fiasco.
However,
any
Wellington Fund since April 1, surpluses already accumulated, lowering of price supports suffithree months.
last> has taken profits on some Winter wheat farmers have re- cient to
increase
consumption
volatile common stocks and re- duced
plantings 15%
but have might well reduce farm incomes
Encounters Difficulties
placed them
with
more
stable intensified
cultivation
on
.most in spite of the expanded output,
"We then ran into some diffi- equities, according to the Fund's productive
acreage, so that, with and there seems to be no easy
culties.
Because we were con- interim investment report made the aid of favorable
weather, the choice between the horns of this
centrating on major swings rather Publi.c today.
The report points new crop is estimated almost at a dilemma.
The looming problem
than short-term
trading move-' out that this shift to more stable par with last year's.
Also, the of 1950—output, prices and surments and because we felt that issues brought about little change new law does not
stop the farmer pluses of perishable foods—menthe major price trend was down- in the Fund's proportionate hold- from
using the land taken out of aces the whole concept of price
ward, we didn't close out our po- x ings of common stock which as a controlled crop (like wheat) support as it is known today,
sitions.
By prewar standards, we °f
May 18, last, amounted to for uncontrolled crops like rye
Accordingly, attention is shift¬
felt
that
certain
commodities,f62.85% of resources. This com-; er sorghams.
And plantings of ing to methods of disposal and
including coffee and cotton, were pares with 63.29% on March 31, these are
up this year.
particularly new methods of price
too
high, and we : deliberatelv last, and with 58.84% on Dec. 31,
Similiarly, the Agriculture De- support.
Already, - serious condecided to carry half our short 1949.
partment
is
asking
Corn
Belt, sideration is being given to Secrepositions * through any mtermeThe Fund realized profits of farmers to
plant 13% less acreage tary Brannan's proposal to allow
diate recovery no matter how far $1,429,411
on sale of securities to
corn—which these farmers
may commodities to sell at the free
it went.
As you know, coffee had-between Jan. 1, 1950, and May 18,
now
use
for
soybeans.
Mean- market price.1
Under his plan,
an
unprecedented
bull
move,
iash
After realization of these while, cotton
planters can be ex- the government would pay the
spurting from 20V2c to 52 cents Profits, Wellington
investments
pected to sow former cotton land farmer
the difference between
per pound.
Due chiefly to the bad a market value in excess of
to corn, as the controls on corn the market price and the support
rise in coffee, the
Futures, Inc., cosl °f $6,991,464, a gain of $3,- do not
apply to them, but only to price,
net asset value per share declined 255,062 in unrealized appreciation
the Corn Belt farmers.
All these
from $15.00 ($14.60 after allowing since the first of the year,
loopholes make for larger harvests
Change in Dairy Supp
for two dividends each of 20c per
$ Total
resources as of May 18
of controlled crops than is deSupport prices for dairy prodshare)
to
a
1949
low
slightly amounted to $127,905,316, for an sired
and
possible surpluses of ucts
will remain unchanged
under $5.00. Since mid-November, increase of $22,463,614 since Dec.
uncontrolled crops—which could through March, 1951.
Under the
despite the fact that we have fa- 31, 1949.
In addition to its commean
a
further
extension
and new law effective last January,
vored
the
short
side
during a mon stock holdings, the Fund had
period of irregularly rising com- 17.44% of its resources in invest- tightening of a whole network of the Secretary of Agriculture uses
controls.
V
^
his discretion in setting supports
modity prices, the net asset value m^nt bonds and preferreds on
'•
at between 75% and 90% of the
of the shares has steadied, with May 18, last; 0.83% inconvertible
Tighter Controls?
new
parity * for
manufacturing
recent
lows between $4.00
and seniors;
1.32%
in appreciation
While these difficulties are aris- milk.2
The announced price
$5.00."' •
v
- bonds and
preferreds; and 17.56%
ing in connection with the crop represents 81% of parity. In acin U. S. Governments and cash.
control program,V the
Operating Philosophy
main 1950 tual doHar*aird cents value, howfarm
headache is in perishable ever, this is about equal to last
Future operating philosophy is Television Fund Cites Rapid
est
point, the net asset value of»
Futures, Inc., shares had risen to
$15.00, a 50% increase in less than
Investment
last
ex¬
part
J*
] ?Jcn;:r °.utPUt.
PAncifJL^ LjJrrJ wthe nse ^
rWiaSlf 2mLI
r£Pn
enougb to lift the
Congress
January 1.
a
or
patchwork
new
which
cut
incomes
played
advanced,
eased.
.
rections."
and cotton markets hit their low-
Diversified
late
effect
also
prices.
1948
declined
the
their
Reduction in
already beginning
are
program
enacted
By Feb. 9, 1949, when the grain
Inquire about=
the Conference
to
threaten
farm
advantage of prevailing
trends, can profit from price sues
swings in either up or down di- this
short
large
food
comes
Board's report:
took
Nov.
on
duction
of the program to
perishable products.
of
food.
large 1948 harvests'
foreshadowed the
extension
include
after
the
which
of
share
demand
did
supplies, due in large part to
position
of
is threatened with
as
lower
is
including
short
well-protected
started
states
diversified
a
commodity
history has been this:
available
Futures
supported.
port
excessive food
approved list are not government-
will
holder.
on
effect, consumers
the
spent
pro¬
inundation
these
1948
In
back
that
gram
be the year when
may
the
of
in
reasons.
a
concludes
and
most
foods
the short
feed crops of 1947, but
prices de¬
clined nonetheless for a
number of
surplus
whole price support
the
believe
to
made
farm
the
of
situation
present support program for
over
provision of the Internal; agricultural commodities proves
Revenue
Code,
any
operating unworkable. The Fund notes that
profits from now until the loss is seven of the 15 commodities on its
Bullock Fund
Nation-Wide
inclined
is
Fund
has
businessmen,
survey
of
dropped
organization set up in 1916 by
featuring
vestors because of the loss
its
Belong
,
is
Inc.,
Futures,
duction
Industrial
National
The
Conference Board, a perma¬
nent and skilled research
Balanced
-
~
policies, the profits when we are
rjght should be far greater than
the losses when we are wrong."
re-
circular
"Futures Shares
Every
folio."
current
futures,
attractive
an
entitled,
CORPORATION
120 BROADWAY, NEW YORK 5, N. Y.
a
investment company, trad-
an
ing. in
NATIONAL
History
Futures, Inc.,
not
Surpluses
Survey of National Industrial
By ROBERT R. RICH
Hc
its
195Q
program,
Futures Fund Circular Relates
your
Thursday, May 25,
...
.
tile
Common Stocks
„
„
.
..
Fund
A Series
New
of
York
:
Stocks, Inc.
Prospectus
other
and
material available
investment
dealer,
Hugh W. Lonc
descriptive
from
or
your
local
from
and
Company
"
INCORPORATED
48
Wall
Street, New York 5
CHICACO
LOS
ANCELES
XT
t
^
-
eystone
-
r<
.
•
Custodian
^
to
concentrate
direction of
j
to
Certificates of Participation in
go
investing their capital
out
any
comments
BONDS
that,
than
more
and
,
PREFERRED STOCKS
more
Futures
"In
in
by
than
a
Fund
commodities
stocks, history
far enough so that if you
short and let profits
a single
profit will offset
ride,'
losses
losses, and
you
don't have
50% of the
to be right as often 4s
time
to
make
satisfactory
i COMMON STOCKS
(Series S1-S2-S3-S4)
net
$8.7 million in 1948 to $33.8 million in 1949, a gain of
288.0%.
Radio
revenues,
the
over
same
periodi increaSed from $408.1 milHon
to
$426
million,
44%
'
l'n'l948,
in
.
rise
More
Volatile
revenue
1949,
the
received,
loss
was
while
72c
for
Than
Other
that
Keystone Company
of Boston
,
j
Congress Street
Boston 9, Massachusetts
and^ 1949, Futures states
'demonstrated much
has
volatility than
in
each
Scudder, Stevens
most
(Special to The Financial
BOSTON,
; more
be
those of grains
the
as
same*time
these products
bulk larger in both
farmUincaomeCSSt 0f Uving ^ in
arm
incomes.
Last year
^ and
e!??
Federal DUrrha<;pc
purposes
millrrtSSlPV
million
*
Chronicle)
Mass.—Lawrence W.
year's support price,
of-
of
I
products for support
increased by about $200'
Butter will also continue
"when
we
The Fund remarks
are
"
.
60 cents
This
is
'
•
about
"The
8
„i
.
cents'la
- „roi«p
Business
value.
pouna
Record." Mar.
on Brannan Plan* 2 See "The Business Record, Nov-L»
1950' for a more detailed discussion
the Agricultural Act of 1949.
1949> for detail
•>
of
and early this
year steps
arranged to distribute tjhese '
perishable surpluses to authorized 1
were
agencies
on
virtually
'
'■
a
give-away
>
This
year, the problem will be
intensified by the
rising curve of
production and the
lowered level
of demand and
prices.
Back in
1947, production of
on
'"prospectus from
—
.
.
1
,
,
pound, wholesale
a
to be
level-of
at last year's
supported
meat, dairy
White is now with Scudder, and
poultry products was
high,
the right Stevens & Clark, 10 Post Office but so were
prices, as consumers
side of a .10% move in the Dow,
Square. .He was formerly with were
willing to spend an abnormal
Jones commodity futures
index, Schir
Atherton
&
Co.
and ; proportion
the net
asset value of Futures,
one-third
of
'
their
*
Inc., can rise 50% or more
Prior thereto was Boston Manager high incomes (after
taxes)—for
five times better than the general for Spencer Trask & Co.
all food and
liquor products. Pro- f
mutual funds.
,
that
50
it
greater
far
a
^Surpluses
ca"n0'
reaaiiy stored
and
fibers.
At
basis.
With
is
,
dollar of revenue
Funds
that
problem.
so
i
TV operations resulted
for each dollar
*
In 1948
Tke
of
\j
ioss of $1.71
a
of
a
.
profits almost every year."
be obtained from
And
sensitive
Teievision
shares. Inc., in its
bulletin, "Keeping Up," notes that
winch TV total revenue
increased from
risks
go
several
(Series Kl-K.2)
may
-
foods.
Industry Growth
the
shows that trends last long enough
'cut
Prospectus
in
positions
by
amount.
even
IN
reduce
to
it
against
limited
positions
prevailing trends and
endeavor
closing
INVESTMENT FUNDS
(Series B1-B2-B3-B4)
.
•••
.
'
Funds
I
•
.
xl
your
„
\
.
.
.
-
■
investment dealtf
or
.....
PHILADELPHIA
I
Number 4910
Volume
171
higher
than
The Commercial and Financial
., .
minimum
the
re-
auired by the new law.
<;nch high prices, in the opinion
been running at twice the volume
of early 1949.
in the trade, result in
consumption, with consequent hugh stock piles. Accordjng to the head of one of the
largest butter distributing compariies, the government will have to
huy "astronomical quantities" of
batter to maintain the
current
support price. "If something isn't
„T,
J
„T
j
<
_
Dried eggs
lower
salable.
In
virtually
seem
(2167)
But what will
ing
happen if the buy¬
program has to be stepped
mid-January,
April and May, the bulk of
the crop of pigs farrowed last fall
un-
gov-
will
be
This
coming to market.
10% greater than a
crop is
earlier.
to decrease or at best
continue stable or decrease more
and more milk will be channeled
into butter.
The Department of
several
Support Lowered
milk consumption is
Since fluid
expected
Hens are laying their fool
heads off" is the way one depart-
ment official explained the necesSlty for egg support. In this case,
Agriculture expects that produc- the problem of surplus has become
tion of butter
will be "signifi- s« acute that the government
cantly greater than in 1949." chose to drop 1950 support prices
Stocks in cold storage, on Jan. 1, 10 cents a dozen, or more than
moreover, were more than three 20 % below last year's average,
hundred
will
dealers
"
'
be
will
Thomas
be
A.
W..
Cusack, Keystone Co. of
Boston; E. C. Ertl, "The Financial
Times,"
Montreal;
Trevor
F.
Moore, Imperial Oil Limited, To¬
...
„
„.
level of parity, up to 90%, eggs
.
High
Government Holdings
prices last year, the
To support
Only
million pounds of nonfat dry milk
solids or about half of total out-
The
put.
total
luncheons,
of through
disposed
supply
but
grams,
large
a
pro-
amount
re-
mains.
.
is
There
milk
for
demand
no
million dozen
dried
discussion
in
will
Dean, Nesbitt, Thomson
Montreal; Charles F.
An
York
export market at existing support levels and no offer
....
Congressmen, government
officials, individual stockholders,,
management and labor of its eightf
point program as follows:
through its
President,
(1) The government must rec¬
ognize the rights—and power—of|
Benjamin A.
Javits.
The
formed
who
early
42
Benjamin
A. Javits
states
"Job Maker Awards"
further
to
principles
who until
of
the
now
the
small
are
positive
investor
has had little voice
unified
body, in contrast to
the powerful voices of organized
labor and organized management.
as
a
"Management and labor will be
asked to submit their qualifica¬
tions to the American stockholder
for
appraisal
for the
Mr. Javits said.
members of
have
in
award winners.
terest
the
selection
decision such
will
enter
as
produc¬
stockholder-manage¬
and
Railways.
of
United
and
stockholder
What of Hog Support.
represented at stockholders' meet-*
ings.
Montgomery
States Steel.
committees
Ward
He said
are
plus
event of
spoilage, the law makes
Hogs have only narrowly esmembership of the late Joseph M.
provision for disposal without caped government support thus
Adrian to Richard A. Adrian.
charge.
far through March.
As early as
The
tion
mid-January,
Commodity Credit Corpo-
ration held that
existed
in
this
latter situa-
early
were
at
the
levied
be
are
for
asked merely to pay
now
transportation
million
pounds
and
take
of dried
milk
170
off
government hands.
Prospects for 1950
•
Meanwhile,
butter
production
continues about 9% above a year
Since prices remain
ago-
year's
wul
level,
pressure
on
become increasingly
at
last
surplus
serious,
Thus far in
1950, more butter and
dry milk solids have been pur-
Mandatory hog
old Act—90%
support
(5)
anyone's guess.
„
One trade authority
as
long
as
argues
case
of hogs),
Ports the
price of eggs at
levels,
there
is
no
present
incentive
for
larmers to cull
flocks, and smaller
nocks appear to be the
only an-
to
90%
for
Federal
and
ination
unfair
and
against
their investors.
regulation
business
American
(6) Government must stop levy¬
ing
confiscatory
double
taxes,
taxes, triple taxes, and any other
unfair
taxation
that
• impedes
growth and prosperity by penaliz¬
ing the investor.
(7) Management abuses against
must be
vigorously
exposed by individual investors,
organized for militant action.
(8)
of
meeting
"to
the
the
public
The
must be
investors
and
kept constantly informed
problems
fight
to
and
win
progress
recognition
America's independent
help
conducting
25
Broad
under
B.
Street, New York City,
the
Todd
firm
name
of
Gordon
& Co.
offer to sell or a solicitation of an offer to buy these securities.
offering is made only by the Prospectus.
*
>-
m
Brooklyn Union Gas Company
First Mortgage
Dated January
Bonds, 3% Series due 1980
Due January 1, 1980
1, 1950
Price 103% and accrued interest
authority. Expectations at that time were that
be set at only
the maximum
limit, and about at last year s
level.
Thi
Prospectus may be obtained in any State in which this announcement is circulatedfrom only such
of the undersigned and other dealers as may lawfully offer these securities in such State.
t
At these levels
the effect, of the
and
eligible
institutions.
HALSEY, STUART A CO. INC.
DICK &
MERLE-SMITH
OTIS &, CO.
R. W. PRESSPRICH
&, CO.
< INCORPORATED)
SALOMON
BROS. &,
HUTZLER
THOMAS & COMPANY
May 19. 1950
a
securities business from offices at
-■*r
anywhere
,
Gordon Todd Co.
Gordon B. Todd is
$8,000,000
The
in
for
investors.
an
The
and
,
in CCC borrowing
support have grams
h
state
of
what will be
new support
swer to the
egg problem."
measure on market operations?
How much of all this
produc-.
Pork products cannot be stored
ion will
find its way into govern- like potatoes. Under the original
iient
support purchases is not yet plans made in January, the govplear.
True, the price cut has ernment offered to buy smoked
lncreased demand, but it's not yet hams, shoulder picnics and bacon
UP to output.
Unusually warm only—products which keep relaWinter weather has
spurred out- tively well.
Moreover, arrangePut
temporarily, and in the first ments were made for immediate
wo
months of the year govern- distribution to school lunch prottient purchases
This announcement is not
the Secretary
could support prices at
that hog supports would
a few cents below
the government sup-
Local,
governments must cease discrim¬
under
of parity—ex-
the new parity
formula, or not at all.
Decision
chased for support.
Buying will on the matter was delayed through
increase rapidly
during the peak mid-March, pending Congressional
Production season in the spring,
approval of a $2 billion increase
Just h0w much
support the market will need is
against Investors' equi¬
ties.
marketings
pires March 31.
As permitted by
the new law (effective April 1 in
up
where
assessments to
over
*
the
the
annual
U. S. Steel management be among
been made.
'
table
conference
they bargain
unusually heavy, the Com-
modity Credit Corporation offered
to buy pork products for support,
But decreased marketings and
seasonally higher support prices
lifted market prices, and as yet
no
government purchases have
February,
Public and private welfare agencies
when
Steel
I
,/>■'•:;
■
now
being formed to investigate Sewell
Aside from potatoes, the other
To Be NYSE Member
Avery's
management
of
Mont¬
single farm commodity which has
On June I the New York Stock gomery Ward in preparation for
law permits sale at not less caused the greatest controversial
annual stockholders
5% above the support price, discussion in and out of Congress Exchange will consider the pro¬ next .year's
meeting, and a resolution was in¬
carrying charges. But in the is hogs.
posed transfer of the Exchange troduced in the last United States
than
:
•
(4) Management, labor and gov-*
ernment must accept the investor
has been made to lower the price.
As for the domestic market, the
new
j
stockholders
ment-labor relations.
meetings
unorganized.
(3) Individual security holders*
point of view must be adequately
of
Vital points of in¬
investor
the
to
time,"
power
the organization will
voice
a
first
The stockholder-
groups
pressure
of the inJ
dependent investor at whose ex-,
pense they have won their special
privileges because investors were
heretofore
and the
intended
Organized
the
must respect
small
citizens
investors.
are
(2)
this year rep¬
resents indi¬
vidual
millions of American
the
non-profit org a n iz a tion
tion, management's fair return to
the investor, industrial statesman¬
National
Program
notified
into the
Canadian
8-I?oint
Independent Investors, Inc. has
Investors, Inc.
.„
_
.
of
stockholders
I
City Thursday,
May 18 by the
Independent
Boston; W. H. Griffiths, Geffen,
Dunn & Co., New York; Merrill
former Chairman and President of
eggs,
more
of the
U. S. Steel.
Eaton, Jr., Eaton & Howard, Inc.,
the
the
on
New
stock¬
•
in
new
foreign
lunch
school
and
committee
independent
holders,, it was
announced
Egg production now is setting Fidelity & Guaranty Co., Mon¬
Stockholder Committees
records, topping demand.
It treal; Dr. John J. O'Neill, McGill
Dr. P. L.
has been about 10% above 1949 so University, Montreal;
Javits announced that since the
Pratley, Montreal; Arthur S. Tor- organization was formed it has
far, and some trade authorities
estimate that the year's output rey, W. C. Pitfield & Co., Ltd., taken action in behalf of stock¬
Montreal; and R. C. Vaughan, holder-members
at
the
annual
may top 1949 by about 5%—234
A substantial
was
H.
Com¬
Senate
Trust; Lt.-Col. E. G. Hanson, U. S.
purchase stocks.
dairy
Participants
R.
S.
program.
the leaders in American industrial
statesmanship so necessary to save
our system" by a public relations
for
most
again, large
amounts remain adding to earlier Griswold, Massachusetts Investors ship,
cost about $135 million.
portion of the milk
program
but,
U.
Banking and Currency.
& Co., Ltd.,
of all eggs pro-
In. duced.
Much has been disposed
about 450 of in exports, relief and school
purchased
it
on
be
quarter of it was sold.
a
addition,
mittee
the
eggs—about 4%
consumption of butter,
month's
if at all.
to
Last year, price support cost
$90 million for 207 million dozen
Federal Government bought about
a
to be supported,
were
visor
i
the
These
C.
'
ten leaders in labor who have done
Vance,
113
new
parity formula, compared ated Fund Inc., New York; Lucile
government
owned)
represents with 90% of the old basis for 1949 Tomlinson, economist; Raymond
approximately : a month's , con- supports.
Discretionary powers Trigger, "Investment Dealers
sumption at the 1949 rate of about were granted to the Secretary of Digest"; W. Howard Wert; and
19 pounds per capita.
Agriculture to determine at what Dr. Max Winkler, economic ad¬
.
group's eight-point
territories, as an organized
Sanders & Co.,
body and spokesman for their pro¬
Boston; Dudley F. Cates, Kidder, tection.
Peabody & Co., New York City;
Baxter,
>
,
Annual awards will be given to
ten
leaders in management and
in
This price represents 75% of the ronto; H. I. Prankard, II, Affili¬
This
million pounds (three-fourths
times as large as a year ago.
'
•
stockholders
represented.
Speakers
'
'
•
New stockholders organization to give recognition for efforts
on
behalf of small investor.
President Javits announces
year
Market prices may start
ernment stocks were ordered for
export at 40 cents a pound, or 90 to drop below support. levels.
cents a pound less than the gov- Large government purchases of
ernment paid for them, and 5-3 frozen pork may then be neces¬
cents below the current support sary to support the government
level. Only a nominal quantity price. In late summer and early
done," he said, "the scandal in have been sold.
For one thing, fall, another bumper crop of pigs
butter will make the one in pota- purchases are restricted to buyers will be coming to market.
In all,
toes look tiny."
not using Economic Cooperation about 7% more pigs will. be
The original intention of Con- Administration or other govern- marketed in 1950 than a year ago.
gress in setting such high support ment funds.
Moreover, since forstandards was to encourage eign
governments are not in
Canadian Forum on
greater
production.
But the essential need of eggs, they are
supply - demand
situation has unwilling to pay United States
Mutual Funds
changed considerably since last dollars for them, regardless of the
year.
The five-year decline in low price.
MONTREAL,
Que.,
Canada—
the number of cows was reversed
The latest development is the
The Third Canadian
Forum
on
in mid-year.
With a stable or government offer to give away
Mutual Funds, sponsored by In¬
possibly increasing cow popula- the surplus.
Public and private
vestment Distributors Limited of
tion this year,
milk production welfare agencies need only pay
"probably will exceed the 1949 for transporting the eggs from Montreal, will be held May 30
and 31. American dealers are in¬
output," according to the Depart- Federal storage depots,
vited to attend the affair at which
ment of Agriculture.
; k
\:.;
19
Independent InYesfors Planning Awards
To Management and Labor Leaders
up?
In
Who Wants Dried Eggs?
many
of
Chronicle
E. M. NEWTON
k COMPANY
WALTER STOKES &, CO.
Montreal Exchange
Governing Committee
Canada—Jacques
MONTREAL,
real
Dr.
by acclamation
closed.
It is
a
French-
term
in order to promote
speaking member has been given
the triple honor.
Mr. Forget has
been a member of the Exchange
1937
since
for
and
election
member
Curb
the Montreal
of
Market.
F.
& Co., was elected Vice-Chairman
the Montreal Stock Exchange
of
by
acclamation.
bas
been
change
several occasions and a
on
He is also a
.member since 1935.
the
of
Market
acted
and
the announcement was received in
Curb
Montreal
Chairman
as
mixed
for the latter from 1946 to 1948.
D. C. McEachran
Stock
Exchange.
with
connected
been
whether
should
brokerage business since 1919 and
bas been
As
member since 1945.
a
elected
was
Gratuity
Fund
for
period
a
of
and
members
Committee
the
of
for the
Governing
ensuing
year:
raised.
Chairman: Jacques Forget, For¬
&
get
F.
G.
Co.;
McEachran;
Governors
evils.
two
If
Britain
of
members):
Brault
R.
&
&
B.
Ashby,
currency
participate, her
barriers
combined strength
,
and
It is felt in
,
being made
obstacles
closing
Indeed in the
dramatic
duced
the
ancj
quarters that the British steel and coal
been
has
favor
of
country
Governors
members):
return
to
Bulman, Grant Johnston &
trolled
by the industry concerned.
K. C.
Co.;
W.
Norris
eau,
(advisory
T.
&
K.
Collier, Collier,
R. N. Trud-
ments the
Savard & Hart.
-
New
in
York
$2,000 college scholarships to chil¬
dren
of employees,
it was an¬
nounced by Winthrop H. Smith,
headed by Dr. Eugene
Amherst College.
y
'
Those receiving
ther
coming
•
The
year
are:
executive;
Es¬
Janice
Marie
Hogan,
Orleans, daughter of Mr.
William H. Hogan, clearing super¬
visor in the New Orleans office of
Merrill
Lynch; George Edward
Jackish,
son
of
of
Minneapolis,
Mr.
George
V.
of
French
the
with
interest
from
the
point of
participating
certain regional
each other.
latter line
nomic
Minn.,
The decision
of approach.
The arrangement under which
integration is confined to certain industries only is a
line of approach, and
Jackish,
*;
its results
Some quarters in London
eco¬
new
awaited with much interest.
inclined to doubt whether the
are
are
trade and
ably
fer the
As
areas.
ready
City, to act as brokers in munici¬
bonds. Mr. Ehienberger was
pal
in Sholten,
Knight & Co.
everything in their
the entry
courage
soft-currency
A further
is
to
Canadian
change
is
towards
of the
the
and
foreign
A
industrial
few
years
curtailment
for
farm
a
demand
11%%
at
/"V
T
Petroleums,
and
Petroleum,
Pacific
Foothills
to
continued
meet
strong support,
^
,
CANADIAN BONDS
Government
Provincial
Municipal
of
ex¬
>
Corporation
trend
supply
require¬
ago
of
grave
CANADIAN STOCKS
any
Canadian
products
would
economic
United
A. E. Ames & Co.
incorporated
Kingdom
sarily mean that it would be possible to come to terms oh details,
or
even
on
fundamental principles.
However, the feeling that
something must be done on the lines suggested by France is so
strong that possibly the hegotiators might set out to tackle their
thing
points
"T
ex¬
en¬
Under present
conditions
the possible failure
to renew
important
Agreement,
July,
can
now
which expires
be viewed with
to
Every¬
Canadian
Two Wall
Street
New York 5.
WOrth
N.YNY
4-2400
ability to compensate for
loss of
European markets for farm
prod¬
ucts by
increased sales of
other
commodities
areas
was
the
external sources of
equanimity.
*
there
in
diversification
reasonable
Nevertheless, it would
be unduly optimistic to expect spectacular developments in the
week
interest
and Mosher Long Lac notably
Prominent. Base-metals were firm
f°"°wing the copper price n e
but the Western oils made little
headway although Federated
con-
to
established
caused
next
with
currency
there
ments.
even
its
at
increasing
an
greater
essential
crisis
power
to
the
stable
a
Canadian economy. In ad¬
is now less depend¬
dition
for
a
the
moderate
areas.
trade
the
as
little
of goods from
Wheat
formidable difficulties in the right spirit.
is
healthier balance
a
on
dollar
10% discount unquestion-
important factor that
contributing
degree
economy
fully cognizant
are
between the attitudes of the two countries is
very wide, and the fact4 that the West German Government re-'
sponded favorably to the vague French statement does not neces¬
•
pro-
of the fact that it is in the nature
of enlightened self-interest to do
have
immediate future.
\
Canada
suc-
led by the papers and steels. Gold
P«»pects however provided the
heaviest trading group with New"i ,,!}
?'
'is.i'
improved position vis-
ion authorities
has
country in
any
^rgest scale ih many >^rs. In¬
dustrials advanced to a 19o0 high
been,
restrictions on imports from this
country. Furthermore the Domin¬
outlets
gap
the
and
has
ultimately
as
Canada
as
^ j 4. o-if"
^ in
were steady at 9 ,4%. Activity
he st°ck markets was on the
Unfited the easing alfS'ales has of
permitted
industry
Arthur Ehienberger has formed
Arthur Ehienberger Co. with of¬
fices at 61 Broadway, New York
far
cerned the
well
in-
barely
are
a?
of
closing of the dollar gap should
lead eventually to a relaxation of
the European ban on non-essential imports from
hard-currency
idea is that Lorraine iron
should be brought to the Ruhr steel industry. The controversy
halfway. But the
now
of multilateral trade. The
gradual
serious
certain novel aspects. The fear of Russian aggression might induce
both France and Germany to make concessions and meet each other
has
greatly expanded volume
would be built up, while the German
Ehienberger
Opens in New York
should
where
foreign
is
surplus
resources,
world
discount- The corporate-arbitrage
»ate 3s a result of U. S. demand
time-being at least, largely
a
constituted
highly lucra-
but the internal Dominion's were
in
This constructive turn of events
duce
item
ternal section of the bond market
eliminated
moreover
of
domestic
natural
a
check,
as
During
both
Canada
her
proportions
soft-currency
result
a
tendencies
rates
again
exchange position. The
manageable
ore
Arthur
therrfore
In
hard-currency deficit
ence on
though the situation in which it has to be faced has
increase
improved
hopes and fears aroused by the French announcement are justified.
For it is by no means certain that France would be able to come
to terms with Germany.
Evidently, the French idea is that Ruhr
coal should be brought to Lorraine where a
strong steel
Portland,
partner
plan is viewed
of countries in their trade with
is not new,
a
participate in the scheme it
by 50% the extent of quantitative trade restrictions within
/ Europe is an example of the former line of approach. The estab¬
lishment of a Customs Union between Belgium, the
Netherlands,
and Luxembourg, and between France and Italy, are
examples for
Portland office.
previously
to
greatly
of
The
the soundest backing in the world.
recently registered
eratifvine
directions
to cut
Ore.,
son
of Mr.
Darl Vernon Miller,
commodity man ager with the
;
were
by
groups
the Minneapolis office; and Clarke
Miller,
Britain
abandonment of certain types of trade barriers
by all
countries or their complete abandonment
trader and account executive with
Perry
if
gradual
W.
of New
hand,
view of its bearing on the O.E.E.C. and Western Union
plans for
European integration. Hitherto the idea was that progress towards
the desired end would have to be made in the form of
scholarships for
school
bilateralist character of Britain's
wrould go a long Way towards the abandonment of British resistance
to American and Continental pressure in favor of multi¬
lateral intra-European trading.
S. Wilson,
Dooiittle, of Providence,
It I., daughter of Mr. Lytton W.
Dooiittle, Merrill Lynch account
further accentuation of the
the other
■
the
a
foreign trade policy. For in face of the increase of the competitive
power of the continental coal and steel industries, Britain would
insist more firmly than ever that the proceeds of exports to the
sterling area must be spent on imports from the sterling area. On
Stock Exchange, has granted four
managing partner. Each scholar¬
ship
is for
four
years.
The
•scholarship selections were made
by a committee of educators
con¬
information.
nongovernmental circles in London that,
unless Britain participates in the scheme, it would inevitably result
Beane, 70 Pine Street, New York
the
was
absence of any detailed
The view is held in
Merrill Lynch, Pierce, Fenner &
of
Steel Cartel which
Under the proposed arrange¬
would be
European plan to be elaborated for the purpose of serving the
general interest. It would not necessarily eliminate competition
between the rival industries, and it would not necessarily fix rigid
prices. This at any rate is the way it is viewed from London in the
Merrill Lynch
City, members
control
vested in a board controlled jointly
by the participating governments. The cartel would not be run
for the sake of securing the maximum of profit for the participat¬
ing firms but for the sake of coordinating them under an inter-
Quinlan;
Employee Scholarships
the prewar International
a
in
current
the
industries could ill-afford to keep aloof from it, and that even in
some
in
beeping her
a
the absence of their
tiate
export
limitless
ceeded
United
Kingdom. On the other
hand, partly as a result of the de¬
have
as
Dominion's
that
kept
pro-
,
Flood & Co.; N. L. C. Mather,
MacDougall & MacDougall; F. L.
Stuart, Kingstone & Mackenzie;
participation it might be necessary to nego¬
form of inter-European cartel. This would not mean a
instead
expanding
dollar; basis, the Canadian
has
that
in
the
requirements.
improved
fiationary
of British-
case
there
balance
a
na-
shortly to have
surpluses
rapidly
m0st
on
freer
to
of
change
oil,
considered that Canada has
only
just commenced to exploit her al-
volume
Despite these impediments
step has been made tothe
of
iron-ore
procedures
customs'
these
wards
country. Fur-
case
and
*
import
by the
^
combination arising
gas,
r
Which
heavy deficit
a
this
the
to oil, steel
goods
production and the valuable
normally would be expected,
first
in
invisible
valuation of the Canadian dollar,
the
Dominion's
exports to this
many
a
tjve tourist traffic. When it is also
trade.
the proposed French-German scheme is causing some con¬
cern.
be¬
tariff
inate
a
The possibility of a formidable steel-coal
from
is
extent
foreign exchange position will be
both sides of the Atlantic to elim-
a
respect
Dominion is likely
more
Although
areas.
strong efforts are
strong steel industry in Lorraine with the aid of
possibility of an agreed limitation of the output
all participating countries must be envisaged.
■
5V
Hugh
Co.; J. E. Chaput,
Chaput; H. S. Jones,
price
once
still operate to reduce the
that
The
,
Mackay
tural
from soft to hard-
is to
(regular
the
Dominion
with
exportable
has permitted
halt,
flow of goods
Canadian trade
develop
trade
thermore
further
a
in
heavy
removal of
The
gap.
Ruhr coal.
can
increasing
previously created
f^e
a
Dr. Paul Einzi*
in existing circumstances that might lead to a very
overproduction, unless other participating countries
it
that
can
manufactured
exports to this country almost to
industries, possibly reinforced by the inBelgium and Luxembourg. On the other hand. British
And
an(j
ly brought British and European
refuse to
to
the
an
sufficient
differentials, which had previous-
industries
were
hand
one
COming to
appreciably
been
agreed to a reduction of their output.* Moreover, the French idea
C.
D.
very
dollar
Hemisphere
Western
improved.
positions
producers
European
has
markets
proposal confronted Brit¬
awkward dilemma, as to
not British steel and coal
substantial
Forget;
Vice-Chairman:
McArthur, A. E. Ames &
Secretary-Treasurer:
vis-a-vis
French-German
participation might mean acceptance of a curtailment of British
steel and coal production in order to avoid overproduction. For
there could be no doubt that Germany would never agree to a plan
unless her present maximum permissible limit of steel output is
officers
elected
were
or
dustries of
Forget announced that the
following
a
ahead
envisaged
become the
world's strongest currency. On
the
in
competitive
the
Western
of
realistic step has
a
better
rate changes of
exchange
ments,
London with
of French and German
three years.
Mr.
a
the
Following the currency adjust-
announced,
steel and coal industries would have to face the
Trustee of the
a
at last
economic pol-
last September.
participate in the arrangement.
it is seen from London, the choice is
between
H. J. Feijguson, of G. E. Leslie &
Co.,
with
ain
stock
the
of
On the one hand every body
towards
Canadian
icy but mostly as a consequence
ized that the French
has
He
taken
further
readily
foreign
result of Canadian
understanding. On the other hand, it was real¬
by acclamation to the post of
Secretary-Treasurer of the Mont¬
real
feelings.
pleased that
was
been
re-elected
was
-
government's
in which this important matter was
of the Dominions
in the past
Looking
exchange and WOrld supplier of basic industrial
trade difficulties, has been largely
requirements
as
well
as
farm
adjusted. This striking change has products.
On
the
other
hand
been brought about partly as a
Canada is rapidly
becoming self-
respect,
his
about
abroad. Within the
and
home
principal
decision to devalue
sterling. Apart from annoyance about the way
Ex¬
Governor of the
a
member
McArthur
Mr.
minute.
vis-
the
^e
cause
however, the French were
merely following the example set by Sir Staf¬
ford Cripps in September, 1949, when he left
the French Government entirely in the dark
that
In
and
Canadian
balance of payments in relation
to this country,
past year the geographical imbalance of Canadian
trade, the root
withheld from
Government until the last
the British
of A. E. Ames
G. McArthur,
Canada
ultimately exert a marked influence on the economic trend
both
multilateral trading, bnt doubts France and
details in implementing proposal.
can agree on
information about the plan was
a-vis
passed with little fanfare, but the
achievement
nevertheless
will
the French proposal
and coal industries
came as a complete surprise to Britain.
The first reaction in offi¬
cial circles in London was one of annoyance at the va> in v. hich
his
been
has
history
economic
dian
LONDON, England—The announcement of
for an integration of French and German steel
He is also
Chairman.
as
milestone in Cana- the European trade position
_
London views it as
Britain may participate in plan
at
Governor
a
was
number of years prior to
a
Germany
notable
A
proposal to integrate
French
on
Points out
choice of two evils.
that
time
first
commenting
Einag
By WILLIAM J. McKAY
By PAUL EINZIG
.
French and German steel industries, reports
nominations
when
the
,
third
Exchange for a
Stock
consecutive
•
Thursday, May 25,1959
. *.
Canadian Securities
Steel Integration
Forget, of Forget & Forget, was
♦ e-elected Chairman of the Mont¬
a
Financial Chronicle
Commercial and
The
(2165)'
20
This
to
hard-currency
process
double purpose of
serves
Boston 9.
Street
Mass.
the
improving
Fifty Congress
1-1045
both
I
4910
371. Number
Voiume
The Cofrtrnercial and Financial Chronicle
. . .
Business arid Industrial Construction Lags
Machinery and Allied Products Institute contends
Study of
Ry ROGER W.
construction since the war, in terms of constant
ioWer than in previous years.
business
analysis made
the
Machinery and Allied
products Institute, business and
•nrfustrial construction has been
.
during the postwar
record-breaking business activity
in other lines. The
"
suits of the study have just been
rmblished in the second issue of
the Institute's new "Capital Goods
Review "
Business construction,
in terms of constant dollars, the
publication states, has averaged
lower in recent years than it djd*
twenty years earlier* despite the
tide
low
t
of
npriod
population
in
growth
:
RR. Plan
charting plant expenditures
In
equipment expenditures, the
Institute
found
a. similar
lag.
and
,
Coniputed.
atg t ^rices^
wSl
re'yTaTs fromTMfto
uTnearly
p
Plant
WSO
from the five-
150%
1 Q2fi
frnm
^penditures,
1Q30'
to
* M declared operative the
company's modified offer of ex-of
consolidated
its. first
W'HM? for
h8nd'
late
workers want and
to get it.
I
-
S S'SMMarch fit?) (tear^820s. Prior to 1930, plant
rate of •4'^'
re-
am
minded of the
old
story
about
forPr°hf6nrn
i o
1
asked
What
him
Labor*
In'
explanation
seeking
of the
lag in postwar plant construction,'
the
examined-five fac-
Institute
t
.
(1) Economies in the use of
It reached the conclusion
that this factor has been present
throughout history and there is ho
clear evidence that it has exerted
space.
more
in
influence
than formerly
(2) Cost
this
recent
years
;
,v"'*
' '
construction.
of
connection
it
In
costs
much
sharply
relation
involves
such
to
that there may
be a tendency to
postpone it unless outside capital
is
on
readily available.
High taxes
personal income, it said, have
aggravated
the
associates
chOlogists,
and
community.
economists
Psycol-
and
The
question,
economic
factors
is: motivators
of
sole
the
are
Except in
More what ?, economic depressions, neither
Many
labor labor nor management is moti¬
Rogef W. Babson
economists* as vated primarily by dollars and
well as news¬ 'cents.
Both groups want certain
paper
columnists and psychoid- "psychic" satisfactions of recoggists, seem to think most strikes nition, respect for the individual,
are for only one reason: more
pay treasonable
personal power and
for less work.
As a matter of, prestige. It is the inadequate satfact,
the
May,
1948,
issue ;of isfaction of these wants and needs
"Monthly
Labor
Review"
re- that drives men into conflict,
-
difficulties
of
(4) Earlier overbuilding.
This
was discarded as a factor affect¬
ing the postwar period, because
plant construction figures show no
overbuilding since the 1920s and
at
that
of
<
Satisfying
Needs
Psychic
higher
the
in
growth of
the country's labor
force. On this
Point the Institute cites the
long
history
of
decline
in
It is
a
foldings in
,
^$50,724,000^
the higher rate of interest for two,
sl.n^1"^, unj?'
1S nt>.^
vided for the first consolidated
boflds*
Mr- Davis said further that, to
accommodate those holders who
have not yet assented, the ofier
°f exchange will remain open at
least until the close of business
on. J'4ne L 1950, but may be terurinated on that date or at any
,
.
...
.,
.
,
to
wholesome
flare
up,
around
go
manhood.
They
strike, then look
on
for something to
More wages and
demand,
shorter working
hours
usually is
But,
fundamentally,
simple formula,
a
inadequate
"psychic" compensation is the root
...
-
.
.
of most of our industrial conflict.
These programs
Investments.
On
are
tion
being sponsored in
with
the
forum
know
so
lations
little
is, most executives
about
they
that
human
don't
.
re-
the
birth
as
525,000
in
compared
ner
private
to only
the decade 1940 to 1950.
The labor force
which
ginning
century,'
of the
lng at about 2.5%
ner
For Shanks
Trophy
At the annual
This is not
an
Stock Exchange.
{
defined and explained the princi-
>
pal types
of securities and their*
relation to each other.
at the be-
was growhas
vear
the "Cnnital
Goods
Review"
states*
"It
foubtful if the several factors
up to a
satisfactory
low
level
ferred
stocks
were
terms
Penditure.
postwar
is
re-
the
of
nlant
ex-
an
ele-
The^fremains
jnentpf obscurity,
ery> in
if not of
mys-
the phenomenon.
Apart from an abatement of
e tax
erosion of equity capital
Pal Bond Club
of
existing
the
Mr.»
emphasized the fact. that
goals differ and the
degree of safety as well as return
must be established
vidual
-
in each indi~,
;
case.
the
In
}
session
which1 followed,
the audience
proved
their interest with the
number of questions asked con¬
open
forum
cerning the general topic of in¬
vestments.
Two more
on successive
evenings will com-'
plete this series. All the programs
lectures
Wednesday
where to begin, If the average
executive would sit down and
analyze his own basic psychic
i°b needs, recognize that his
iitAv»lr
fL
Avn
workers
crave
'
«
fee
charged and the public is
is
welcome to attend.
r\Ot
in"
the same "psychic'
ways
to
Robert Jones
>.
/ /
to
Admit
D. C.—Robert
Metropolitan Bank
Building,
and
York
members of the New,
Washington
(D. C<)
Stock
Exchange, will admit Rob¬
Jones, Jr., and John M.
Buckley to partnership on June 1.
ert
C.
On
April 30 Oscar P. Hunt ririti
August H. Schmidt withdrew fromJ
the firm.
,.
v:
275,000 Shares
Interstate Power
PresA
Company
(Par Value $3.50 Per Share)
rangements for the trophy were
made by a (c0^nli^ee Tof
composed of Charles J. Wald-
niann,
share
Chairman.
This trophy is a sterling
Paul Revere bowl, seven
on an
Price $9.25 per
silver
inches
12't '"^n^lhfbowTis
Copies of the Prospectus may be obtainedfrom the undersigned only by persons to whom
undersigned may legally offer these securities under applicable securities laws.
ebony base. Ori the bowllis
Sanders Shanks Jr.,
Trophy, The Municipal
the
engraved
Memorial
Bond Club of New
Each year
York.
ner
& Co., Inc.
the name of
also will be
struc- graved, to
keep permanently.
May 24,1950.
r
WASHINGTON,
C. Jones Si Co.,
Common Stock
of '*er
?"r lat| member and former
ident, Sanders Shanks,^ Jr.
p
obsolescence
■
investment
^
the wh}~
engraved on the
bowl and he will hqtfe possession
ft* " }ue most Promising approach until the next annual outing. In
P the expansion of business addition, the winner will be S
construction) is to accelerate the a small reproduction, suitably en
"
among
covered.
-v
..
reasonably high and
explanation
of
Bonds and
debentures, rights, warrants, divi- >
dend dates and common and pre-1
outing to be hold
% the sleepy Hollow Country
c.lub on Jun£ 9'
Paying members
da2??Lee
2tWred add
Illustrating his
talk with examples from the list
of the local exchange, Mr. Schick
offering of these shares for sale, or an offer to buy, or a solicitation of an offer to buy, any of such shares.
The offering is made only by the Prospectus.
recently been growing at the rate ™an">
K^an>
R' Wald
°f
only 1%.
M. Wood, and George K. waiaIn conclusion
1
,
by1
Carl Schick of the San Francisco
sented by the club for the purpose
660 000 workers
to the
;
conducted
was
Bond Club to Play
to
Were added
lab°r force
Francisco
know
"
compete for the Sande s
,
fT., Memorial Trop y.
trophy, whic)ti wdl be
1
&1f prize of the outing is pre-
1910, about
coopera¬
Educational1
Adult
Program of the San
Public School System.
The
,
econoirdc>
The trcuble
satisfactions, and develop
tjrne thereafter.
rate, the curtailment of immigration and
increasing absorption of
workers in government service,
t shows
that in the decade 1900
fear
{
Schick
wages and shorter
:that
should
time
have been
fully digested long ago.
(5) A decline
this problem.
Exchange Holds
fundamental
our
Psychic Compensation
share these satisfactions, I believe
°ffer of exchange is subauthorization by the InterPsychic
compensation
is the he would be on the road to reprices prevailing during most of state Commerce' Commission of
inner satisfaction and feeling of solving his industrial strife, prothe postwar period has discour- the issuance of the new seaies A
well-being derived from individ- vided labor leaders would fairly
aged new equity flotations.
bonds.
excess
,
Forum and Lecture
men.
mobilizing risk capital.
At the
The
same time, the low level of stock
iect to
any
to \
from
—
that
large investment
a
they
risen'
have
in
equipment
prices than they did formerly.
,
(3) Shortage of outside equity
capital.
The Institute points out
that
plant > construction usually
more
in
years
that
and one-half years, themeW gen- stances workers get angry be- union leaders to develop strike are held at the Auditorium of the
cause
they are not receiving the activity if the workers' "psychic"
?
series A bonds will
High School of Commerce from
recent bb entitled to the benefit of a "psychic" satisfactions necessary
wa^gd s
as
were 7:30 to 9:30 p.m. No registration
showed
construction
S. F.
is v£ry important in keeping
workers contented,
We live in a highly competitive
working
mistake to say that society
which stresses and rehas been very satisfactory. Mr. strikers
want only more money.
wards individual; achievements,
J^avls
Hc stated
up to
Strikes have cost not only the prestige and power.
Executives
M?y 18, 1950 assents had been received from over 600 bondholders employer but the employees huge and workers are all moulded
a?£^e
excess sums; it will take years for many from the same clay. They have
$15,250,000 of the outstanding employees to make up the money' attended the same schools. They
If have the same physical make-up.
bonds and additional assents con- they lost through strikes.
money were the sole underlying There is no reason to believe that
t0 come *n* _0. nnn
„
,,
There are
of the; motive, why, then, do $10,000-per- the economic and "psychic" mph6n-callable first consolidated 4 /0 year workers, such as script writ- tives of one group differ markedly
bonds outstanding. In addition to ers, airplane pilots and locomotive} from those of another group. It
engineei*s, strike?
In many in-}wduld
be
pretty
difficult
for
^
I therefore, am coming
conclusion
hand in settling
compensation does not, of course,
supplant an adequate wage, but it
,
"More."
hours.
said-
suf¬
con¬
their independent position—must,
soon wake up rind take an active
-
really wanted,: lege/ professors have all
been
he r e p 1 i e d
wrong with their notion that
^
reception given the announcement
flict.
the
'psychic
-
constituted
about to ^ept. 1, iyoz;.
-r ■/-v.
40% of total fixed capital out- .-p^ Announcement that the offer
lays, whereas in the postwar pe- dfuonaf
security
ported that only 74% of all
riod they have averaged only
of
ji\/r
strikes
involved
the
issue
about 25%, the Institute discov- b9nds was made May 12, and the
expenditures
fhat in¬
is
SAN FRANCISCO, Cal.—A look
Samuel;
Interestingly enough, the busiGompers, one- iiess executive's inner wants behind the scenes of the securities
time head of* closely parallel those of the business was given an audience
thO A. F. of L.. worker.
He wants power, inde- of almost 600 persons at the sec¬
Once
when pendence of action, a free hand to ond lecture of the San Francisco
someone
carry out ideas, recognition by Stock Exchange's current; Series
Operative
nounced that the directors on May
ferers because of this
ual recognition, praise for work
well done, fair treatment, and a
how they hope* Steady job.
This ' soul-satisfying
C. McD.
change
faci
nocent investors are the real
There is ho easy way of settling
Strikes
signify
what
strikes.
Davis, President of At¬
lantic COast Line RR. Co., has an.
the other
on
Babson, in pointing out strikes are costly both to employers
and employees, maintains they result not only from demands
for higher wages, but also for more workersVpsychic satis¬
factions." Urges employers analyze their "psychic" job needs.
Atlantic Coast Line
the
,
Mr.
turfes, thus stepping up the volume
Of replacement demand. By our
estimate almost 60%. of the entire
stock (of structures) consists of
assets over 20 years of age, while
nearly 30% of them are over 30
years.
Acceleration of obsolescence h a s the potentiality,
therefore, of developing a tremendous volume of business. .
Such a shift to the replacement of
earlier structures is as logical for
the construction industry as it is
desirable for the country at large."
in-
and
activity,
industrial
r-rpased
Institute found.
^orkers.^
What About Investors?
&ABSON
The unfortunate
dollars* has averaged
According to ari
We must jack: up the
"psychic salaries" of our
co-operate.
Laboi Strikes
"Jftr:
22
(2170)
The Commercial and Financial Chronicle
Continued
from first
ture
page
of
outlook
business
the
must create
for
the months immediately ahead. In
The
scene.
borders
last long.
at
believe
rate
a
And
there
that
faster
also
at
than
is
we
But
they
about
that
basic
to
probably
V
stantial
Public Well-Heeled
cut)
capacity
convincingly
Russia
won't
touch
off
that
at
than
In
the
to
individuals
so-called
Lily
liquid assets,
accounts
bonds.
and
immediately
industry,
producing
field
still
to
be
less
are
more
make
work
with
to
propose
the problem
business
lion
I
cash,
know
the
that
they
of
no
automobile
deal
bright
over
Even
a
while
Chrysler
was
period of
a
dustry raced along producing
years ahead rather than
period of months. That, I assure
you
is a
far
tougher problem
than
expounding
short
I
also
ture
that
suspect
it
is
eration.
by the
the
business
run
a
I
more
have
is
sally into the wit
ages in
bleak
and
favor of
I
but,
hope,
humor
Well
consequential
Business Until November
First,
about
the
for
Thanks¬
giving
I mieht
stretch the period to Christ¬
Here is a quick
summary of
even
mas.
the
key elements which, it
comfortably
clear
to
seems
me,
are
bound to produce the continuation
of a high level of business
activ¬
ity.
Consumers
are
biles, homes
record
close
or
and plan to
ance
buying automo¬
and
appliances at
to
keep it
record
up
a
clip—
for the bal¬
of the year.
The
of
source
our
knowledge
that they plan to keep it
up is the
Federal Reserve Board
Survey of
Consumer Finances. This
survey,
now in its fifth
year, is establish¬
ing itself
as
basic guide to
a
intentions.
sumer
It
is
con¬
worthy of
Also, you
careful
study.
ought to give those who are de¬
veloping the survey an encourag¬
ing cheer. They deserve it.
your
I
Here
the
are
key findings of
1950 survey:
People
new
automobiles
motor
as
as many
they
did
The bloom is still
on
the
Demand
for
furniture,
refrig¬
erators and other
appliances is
strong
it
as
a
boom.
car
was
More than
a
as
as
as
those
a
year
many
peo¬
who
will
There
ago.
regard
that
are
as
something of a cultural catas-i
trophe, but it brightens the busi¬
ness
outlook.
More than
million people plan
to buy new homes
this year.
It
is
have
money
one
the
at
is
that it
will.
But
I
requisite
the
right
amount
time.
Or
That is
a
direct drag on the
Somewhere
omy.
industrial
our
to
some
get
ing paid.
A
giddy
that
sold
at
several
as
months is
or
and I am
premiums are be¬
a
car;
market
consumer
suggests
as
least
at
mild form of hysteria. That is
something to worry about.
a
I
reach
however,
assume,
capacity to worry,
It is
near
that
your
To
have
employment
year,
stretch
the
rampant.
But
well
^
-
when
get to running
margin of unem¬
we
the
above
ployment I have indicated,
letting
we a'*e
cancer develop
in our
and body politic. ; In
studying the origins of the deadly
Nazi regime in Germany, Walter
a
and
effective
recruits
the
German
Imperial Army and
unemployed university graduates.
During the '20s Germany pro¬
duced
large
a
crop
of Ph.D.s.
But
of organ
sure,
however
happens to taxes
over
the next few years
will be
vastlv
more important in
shaping your
future than
anything that is likelv
to happen in the
labor
field.
raise
sonal and
and
that
therefore
common
pleasant
of
anyone
man.
a
posture.
Federal
tax
will
we
a
now
glanc¬
really hits,
harder
the
in
changed, is
this
That's because
same common man.
up both the sources of
capital and the inclina¬
venture
tion to
a
the
the'kind
structure
hit much
dries
not
However,
future if it is not
it
who
foe of
That's
haveihits the rich at most
ing blow. The fellow it
and
per¬
corporate income
taxes
advocates lower rates is
it.
use
It blights the
crea¬
jobs which must be created
our
expanding labor force is
be matched
by jobs. As you
if
to
Kottschnigg discovered that Hit¬
ler found his first intellectually:
competent
buoyant manifestations
labor, I am
that what
par
tion of
economy
among unemployed ex-officers of
Talk
and
the more flam
key economic fact is that
absolutely full
would
of
some
ized
the
Such
economy so tight it would not
work. Inflation would be
running
well
know, it takes
about
$10,000
plant
an
average of
of
investment in
equipment to set an
and
American industrial worker
up in
business.
It
takes
considerably
than that to equip the
more
age
belt
corn
fact which is
aver¬
farm
workers—a
reflected in the re¬
markable
productivity of the
jobs
farms in that area.
for many of them. So, in
despera¬
As matters stand, our Federal
tion they joined Hitler.
If large numbers of our June income tax system simply is not
geared to provide the investment
graduates find
then
it did
not produce
they
any
cannot
get
jobs I do not know how they will
express
themselves.
But
I
am
confident that it will not be pleas¬
antly.
However,
or
econ¬
and
economy rapidly enough
vent a serious rise in
en¬
them, of course, could be sec¬
ond place in the arms and indus¬
trial
race
with Russia.
In
that
However,
have
survey of
expenditures
for
equipment. If
and
well
you
that survey,
to
give
us
about it.
you
on
It
a
an¬
prospec¬
new
plant
don't know
would
you
chance
can
in your business.
our
be
to
do
tell
important
Our recheck in¬
dicates that expendtiures for new
plant and equipment are being
revised upward.
expenditures
touched
boost
is
off,
in
and
Eisenhower
Secretary of
Defense Johnson has followed
ment.
I am not sug¬
should let fear
the front pages where it
spicuously located when
returns
government
4.7
came
in.
reported
million
was
the Feb¬
a
needed to expand job opportuni¬
ties at the required rate,
A few
favored
industries
companies and
to
seem
have
all
the
then the volume of
unemployment
has been cut both by the
regular
spring upturn in business and by
expansion beyond that due to the
change in
seasons.
Right now the
volume of unemployment is
prob¬
ably somewhere in the neighbor¬
hood of 3 million.
In
June
the
ever, I personally don't expect
to hit its February
high by quite
margin. If I
right, it
am
we
give
our
kind of economy
quick pick-me-up.
in
at
significance
defense
A
that
gains in
account.
to
to
Combined, the elements I have
mentioned produce a
glowing pic¬
as
our
But
this
It
is
not
are
we
a
exciting play in
crucially impor¬
very
are
work
creating jobs as
creating additions
steadily
in¬
million
It
force.
will
be
is
at
least
half
year
axiomatic
that
to
the main lines of attack.
Tax Revision Needed
One
of
them,
I
*;
am
sure, is a
drastic revision of the Federal in¬
come tax structure
that will
keep
unem¬
ployment under proper control
we
Employment and Capital
,
There
duce
vest
much
in
more
new
capacity to in¬
risky business
and
enterprises,
and
clination to
such
a
much
more
in¬
I
would
of
corporate dividends both as
corporate income and
personal in¬
come, reduction in the
corporate
tax rate and provision
for corpo¬
rations to
average their losses over
a much wider
span of years than
now
I
permitted.
perfectly aware that in
advocating reduction of the Fed¬
income
tax
structure I do
two things
that I don't
enjoy do¬
ing. One is that I
start
put you to sleep. The
other is that I
identify myself in
the minds of
many, and perhaps
even
of
most
what
the
effi¬
replaced
that if we
that
are apparently overlooked in
simple line of argument:
this
(1) The
and
install
new
I
about
have
a
machinery would
H
indicated,
third of the
(2)
The
of
increase
they are
population of
and
That would
hardly
employment problem.
ard
produce
who
workers
lose their jobs.
the
most
solve
in our
the
stand¬
living would be halted.
That
increase
sult of the
use
the
direct re¬
more
and better
is
of
(3) The
capacity to
heavier load of social
which
seem
a
great majority of Peop
to
want,
eliminated.
That
er
carry a
services,
would be largely
capacity depends on greatper hour or day tro
output
our
work force, and that
as a
Srealn
champion output
directly depends in turni
vulgarly known as
people
are
fat cats.
It has been
vation
more
have
machinery.
am
eral
,
workers, and argue
stopped this sort of thing the em¬
ployment problem would be sim¬
pler. These are some of the things
As
revision
and
new
machines
personally include, among other industrial workers
things, elimination of the taxation highly skilled part.
is
»
are
where
cases
cient
invest.
In
Investment
those, of course, who
that the way to solve our
employment problem is to slow up
on
capital investment.
They cite
pro¬
fectively to
for several years
to come, and then get
higher. It
a
however, indicate what I am
reasonably confident are a few of
can,
most ef¬
This year the total net addition
our work force
will be about
700,000.
a
Glowing Picture
a
fast
The increase
expenditures
on
get
it
not
the
may
fact will still be there.
probably nothing like
defense expendi¬
the
there is no simple and easy
doing it. It is an extremely
complicated piece of business. I
of
Since
that
increase in
match
Unhappily, how¬ think
the
total
unemployed.
tant
a
con¬
Then
request for the next fiscal year.
an
to
ever,
press.
tures to
plan
creasing number of people avail¬
able for jobs with the
right num¬
ber of good jobs.
way of
Unemployment Off Front Page
Right now unemployment is off
right along by asking an increase
of $350 million above his
original
There is
pre¬
largest graduating
class in the history of our
country
—about 450,000—will start
looking
defense for jobs. Then the
unemployment
in
the figure will shoot
up again. How¬
clearly
General
it
to
our
That gives major
business outlook.
substantial
making.
recent
have not expanded
we
unemploy¬
ruary
McGraw-Hill
recheck
a
nual year-end
tive
at
we
made
place at all.
no
having in
years
of
second is
been
are
workers
also has other grave
consequences
to which I shall return later. One
race
having
have
third of
a
gaged in producing and installing
industrial plant and equipment. It
of
least it used to be until
these mad
consumer credit who
sell things at
nothing down and
three years to pay came on the
merchants of
being
told that
that
a
thing, of course, to
plan to buy things. It is another
to
not
or
to be worri¬
as
Not many
required
as
2,000,000 this
ticularly
at least your
capital they need, or if not they
gesting that we
inclination to worry is
relatively
can
readily get it, I can't imagine
limited. Hence, I shall not con¬ prompt us to create more jobs. I
that the officers of General Mo¬
New Houses
tinue a catalog of all of the mani¬ hope that we will do it because it
tors
is the right and profitable
Corp., with profits of $656
thing
Through April of this year al¬ fold things about the business
to do.
But in any event, I am million after taxes in 1949, and
most
400,000 new houses were outlook which offer good sources
certain that if the business out¬ $212 million in the first quarter of
started.
That
is half
again as of inspiration to one given to
look is to stay bright, let alone this year, are losing much sleep
many as last year, and an all-time worrying.
Instead I shall close
the outlook for our ancient liber¬ about how to meet their immedi¬
record.
Heavy construction, as right in immediately on what all
ties, it will be necessary to match ate capital requirements. But that
measured
by
the
"Engineering of of us need to worry about if
our
expanding labor force with stands in dazzling contrast to the
News-Record" compilation of con¬ we are going to
keep the business an
equally expanding number ef record of much of industry, and
tract awards, is running 44% ahead outlook
bright in the months and
job opportunities.
of last year.
particularly that of smaller com¬
years ahead.
panies. Many of them right now
As a whole, business investment
That is the fact that with all
Having reached this point I
the
are confronted
in new plant and
by a serious short¬
equipment has tremendous outpouring of produc¬ wish that I might promptly pro¬
been
vide a nice simple and sure-fire age of venture capital.
lagging behind last year. tion and prosperity we are
A
ple plan to buy television sets this
year
tion
strength to the
year ago.
twice
know
that result by using mirrors.
not a reliable method.
about
plan to buy
now
year ago.
!
few
a
do whether
*
■■■
outlook
business until, let's say
Day.
If pressed
I
You
year,
dizzy
so
wait of several weeks
rate will be cut down by a strike
at General Motors.
My expecta¬
of
economic discussion.
per
as
con¬
hundred dollars off list
price. Now
in some of the same markets a
production rate of 9,-
000,000
rather
some
annual
an
the
of the
aspects
end of the current situation
frequently
6,400,-
in production some people talk of
sort of group that will not mind
the omission of the conventional
the
of
rate
a
With Chrysler back
prewar year.
encouraged
this
at
a
But
at this junc¬
important op¬
that
trucks
000 per year. That is a rate over
million higher than the biggest
cheering
outlook.
been
assurance
and
are
months ago the
most popular makes of cars were
cars
economy
ing from job to job and seasonal
who expects
one
are
some.
down by strike the automobile in¬
an
total would include people mov¬
industry to main¬ layoffs.
which
shut
of
unemployment, perhaps some-;
thing over 3% of the working
a
sumer
production.
of keeping the
outlook
"•There
along the lines of
kind
our
is inevitable and necessary.
at the last
back
mm
in
.It has become almost
properly. A certain amount
force or about
tain its production pace of recent
That pile,
reflected
certain
a part
of
the American credo
that the
wav
to "soak the rich"
is to
employment and still
of
some
Dangers
government
100%
that
before
so
have
rather
are
so.
pile of
i.e.,
particularly
rayon,
droopy, and are expected by
with expert
knowledge in
created largely
during the war, was still $175 bil¬
ahead,
more
problems,
working force will still be look¬
months very far into the future.
Virtually all of them see a siz¬
counting.
able
downward
adjustment
of
So the plans to keep on
say
the next six months, is so
buying
bright I don't intend to spend a in a big way are not pipe dreams. production not far ahead. That
won't be pleasant.
great deal of time on it.
That They are backed by the necessary
■> There are also dangers in the
would partake of gilding the
lily. wherewithal.
headlong pace which the housing
Also it would go over a lot of
High Retail Trade
industry is maintaining. There is
ground you
have
already
had
probably still something in the old
covered in the heavy
The
volume
of
retail
trade,
outpouring
wheeze about the higher
of optimistic
they fly
reports about the which has recently been reaching
the harder they fall.
new all
immediate business outlook.
time highs, is, of course,
months
Instead, I also
r
tile
first
is
backed up by an enormous
Because the business outlook for
the
•
in
addition, the current flow of
bank
Business
of $199.6
billion higher
rate
no
inducing slumber
i95o
m
inflation.
does of
business outlook. Parts of the tex¬
individual savings in the form of
dustrial strength. I shall return to
this important point later.
the
annual
of
quarter
rate
That's $6.2
the
income
great headstart, we
let the Russians
outstrip us in in¬
our
Gilding
first
the
annual
quarter of 1949.
will be supremely stupid,
we
with
in
an
billion.
the
final world show-down in the im¬
mediate future. They also argue
if,
ran
1950
industrial
to argue
me
is
25
ence
appropriate
My guess is that we shall. I ing for jobs.
,; :
moment she can, without too much
Happily, however, the consum¬ would expect industrial prices to
military difficulty, take over some ing public is well heeled with the be a little
Unemployment Impracticable
higher by the end of
western European
industrial ca¬ purchasing
power
required
to the year, and farm prices, a little
This will be so obviously bad
pacity which we are very dili¬ carry out its I buying intentions.
lower—to balance out at a rela¬ for all concerned that there is no
gently repairing and modernizing. The nation's disposable income
tively stable general price level. need to labor the point. I prob-t
These facts (or more properly (the income going to individuals
There are, of course, less glam¬
ably should make it clear that I
after the taxpayer has taken his
they should be called surmises)
orous
aspects of the immediate am under no illusion that we can
seem
Thursday, May
.
However, the present prospect
of American
business
is that we will miss it by a wide than to talk
about Federal
taxi"
been doing, it seems clear that the margin. The prospect is that when At the
same
time I have S
problem in that line which lies the next mid-winter peak of un¬ that by all odds
the
easiest wav
won't immediately ahead is whether or employment rolls around, a large to rouse
such a
group is to
;
not we shall escape another sub¬ part of the new recruits in the about
labor
to
reason
the
there
of
fact, far from worrying about a
painful deflation, as some have
Glowing Business Outlook
expanding the capacity within her
are.
700,000 new jobs this
year.
.
.
over
more
:
unhappy
several
<
obser¬
years
that
and
more
better
equipm1e
'
be J**,
to win the struggle for world s
premacy hands down. They wo
(4)
my
The Russians would
Number 4910
171
Volume
The Commercial and
...
Financial Chronicle
(2171)
could
nessmen
need to worry about the cold
war.
The would win by default.
No, the poorest possible answer
to our employment
problem is
that of calling a holiday on the
installation of more and better
n0t
find
oppor¬
tunities in the fields I
have men¬
which are not now
tioned
Colliers Featuring
Bawl St. Journal
being
exploited.
But I could be
wrong
about that.
However, I
am
that I
sure
Wall
am
Street
receives
recogni¬
equipment. >, Our economic salva¬ not wrong in the expectation that tion in an
unusual way this week
tion, as well as our salvation as a if private business does not take
when Collier's
magazine, in its
free' people, lies in having high up the accumulating slack in un¬
and steady level of capital invest¬ employment, the government will o?ne 3 issue> on the stands May
26, will run a feature
ment.
jt is
undertake to do it.
true,
installation
of ^course, that the
of new and better
Personally, I hope
equipment often displaces work¬
I heard only the other day
of a
new
calculating machine
which
will
replace
about
36
skilled human calculators at an
installation.
Where
competition
ers.
the government, I am sure.
Also
that way of handling the
employ¬
ment
problem
would
avoid
a
whole array of tax complications
prevails, as it does pretty gener¬
ally, the new and better equip¬
is
also
ment
reflected
in
with
the
But—far
The net result may be
combination of
displaced
workers looking for jobs and con¬
saved,
money
to wreck
to
paper and quotes
niest
items
Also,
it
something
on
ated
For
new.
combination
workers
placed
of
some
that
what I
to
me
am
which
been
most
prise,
and
business
new
I
in the search for
as
bargaining
enjoy the success it
promoting uniform wage
The
tendency
toward
continues
has
in
rates.
scarcely
to
I
new
the
lated
a
rates
of
the
on
not
accumu¬
the
a
been
few
equally
point in
group of this
have
vigor
part
and
of
management
new
op¬
this
lush
has
postwar
period.
years
Halsey, Stuart & Co. Inc. headed
that I
army.
In
years.
spent
some
ad¬
years
Many Things to Be
takes
soever
to
of
range
no
of
a
things that
what¬
tremendous
need
to
be
our
country and our
people in anything like first class
shape—slums
to
be
cleaned
out,
streams filthy with
sewage to be
cleaned up, millions to be
prop¬
erly clothed and fed.
It seems
me
dow
that right out of
my win¬
on
the
29th floor
of
the
McGraw-Hill
Building
in the nature of the governmental
process and
he
is
also
the Washington
engaged in an
scramble
less
with
which
for
more
direct
to
scene
rest of
along some particular road to
paradise.
us
Up
to
Business
Enterprise
Personally I have no doubt that
you and I are going to check
further and perhaps final inroads
liberties the only
ancient
our
York City I can
see
ing to be cleaned out and cleaned
up to keep a small
a
long time.
back and forth from
shoulders
with
work
armies
I
of
look out
with
on
a
start
toward
establishing
modern standard of
living.
1
cussion °f
what
is
going to be
things as slum
clearance, low-cost housing, formgn economic
development quickabout
such
Jy tends to
gravitate
to what the
government is going to do about
The idea that there
^re busi¬
u.
ness
opportunities, in the
opportunities
to
haidly
world
sense
make.,ja
seems to get
pushed
ground
almost
intaihe
is
possible,
"hat
is
where
of
the
of
profit,
back¬
immediately
exploring.
"It
as
cofrrse, that
idea"
belongs.
I am
convinced personally that
Vigorous and imagiojiiyje.j3US.i-
is
for
business
the
cure
creeping
of
unemployment.
If you
will do by all odds
the most important single thing
to
keep
the
business
outlook
bright not for months ahead, as it
clearly is now, but to keep it
bright for years.
And of vastly
more
abiding consequence, you
will prove yourselves worthy of
that
your
you
heritage
free
as
men.
Lehman Brothers and
Emanpel,
Deetjen & Co., headed a group of
underwriters, who on May 23,
made a public offering of 366,954 shares of
capital stock of Pan
a
Airways, Inc., at
price of $9,375
per
share. The
shares being offered represent the
in
was
Pan American.
oversubscribed.
Victor
Emanuel, President of
Avco, said this sale is in line with
Avco's general policy in that pro¬
ceeds
will
be
used
further
to
broaden
fields
Avco's
in
which
bonds
redeemable
has
to
are
Inc.
American
sinking fund the
had
Airways,
Dec. 31,
1949,
stock
out
an
prices
The
principal
business
Brooklyn Union Gas consists
of
capital
authorized
of 10,000,000 shares.
issue
»
not
someone
who
should
feel
bound to permit the businessman in good
take part in the formulation of
Must
we
depend
proaches" for
How
with
our
about
one's
duty
faith to
public policies?
future welfare?
work
affairs in
and
a
intelligent
concern
spirit of enlightened
if,
Atlantic Coast Line Railroad
the manufacture, distribution and
sale of gas for residential, com¬
mercial, industrial and other
poses.
Late in
1950
the
Modified Offer of Exchange Declared Operative
To Holders of Atlantic Coast Line Railroad
Company
First Consolidated Mortgage 4%
Bonds, due July 1,19521
pur¬
company
The
Board of
Company
Directors
of
Atlantic
Coast
Line
Railroad
May 18, 1950 declared operative the Company's
Modified Offer of Exchange, dated
May 12,1950, providing for
the
on
exchange of its First Consolidated Mortgage 4% Bonds,
July 1, 1952, for new General Mortgage 4% Bonds. Series
expects to obtain natural gas from
due
Transcontinental
Gas
A, due March 1, 1980 (bearing interest at the rate of 4'/a%
Corp.
at
time
Union
will
which
Pipe
distribute
Line
Brooklyn
mixed
gas.
per annum
the
Halsey, Stuart Offers
A
headed
group
Equips.
by
Halsey,
Stuart & Co. Inc. on May 19 pub¬
licly offered $10,000,000 Pittsburgh
& Lake Erie RR. Co. 1 % % equip¬
ment
trust
certificates, series of
1950, to mature annually June 1,
1951 to 1960, inclusive. The cer¬
tificates,
offered
subject
to
au¬
thorization by the Interstate Com¬
merce
Commission, were priced
yield from 1.35% to 2.15%, ac¬
to
cording to maturity.
Proceeds
from
the
sale
of
the
certificates, which will be issued
under the
be
used
of
Philadelphia Plan, will
1,500
1,000
cost
new
new
a
finance
to
box
total
of
the
gondola
cars,
purchase
cars
and
estimated to
$13,100,500.
Henry
ated
P.
with
New York
new
General
Mortgage has been approved by
Company's stockholders, and the Board
of Directors has
approved the issuance of the Series A Bonds. The Modified
Offer of
Exchange is subject to authorization by the Interstate
Commerce Commission of the issuance of the Series A Bonds.
As of May 18, 1950, assents had been received from over
600
bondholders with aggregate holdings in excess of
$15,250,000 prin¬
cipal amount of First Consolidated Mortgage Bonds due 1952.
The Modified Offer of
Exchange will remain open at least until
June 1, 1950, but may be terminated on that
time thereafter.
the close of business
date
or
at
any
on
Bondholders who have assented
now
wish
to
to
the Offer and bondholders who
accept the Offer are requested to forward their Bonds,
accompanied by a Letter of Transmittal, to City Bank Farmers Trust
Company, Agent, Corporate Trust Department, 22 William Street,
New York
15, N. Y. The
new General Mortgage Bonds, Series A,
promptly as possible after authorization by the Inter¬
state Commerce Commission, whose decision in the matter is
hoped
for about May 31, 1950.
will be issued
as
Copies of the Letter of Transmittal are available in two forms, one
use
by bondholders who have already assented and the other
incorporating an Assent which is for use by bondholders who have
not yet accepted the Offer. Copies of these forms of the Letter of
Transmittal and copies of the Modified Offer of Exchange
may be
obtained at the Office of the
Company, 71 Broadway, New York 6,
N. Y.; at City Bank Farmers Trust
Company, Corporate Trust
Department, 22 William Street, New York 15, N. Y.; and at Morgan
Stanley & Co., 2 Wall Street, New York 5, N. Y.
for
Warren,
Jr., associ¬
Langley & Co.,
City, was killed when
W.
C.
his automobile overturned
May 22
at
from March 1, 1950 to September 1, 1952). The
creation of the
Greenwich, Conn.
I
"objective," collective "ap¬
upon
hard
own
in
3"
%
of
manufac¬
outstanding on
6,136,115 shares of
of
at
Henry P. Warren, Jr.
World
there
at
varying from 103% to 100%.
turing operations.
Pan
give
at
option of the company
prices
ranging
from
106%
position in those
it
Is
by the company to retire its
The
entire holdings of Avco Manufac¬
turing Corp.
The offering
a
con¬
the
Pan American
Airways
Gapilai Stock Offered
two:
or
businessman under obligation to
a
employment"?
outstanding bank loans totaling
$14,625,000, and for construction.
Pittsb. & L. E.
American World
find, however, that most dis¬
done
to
rub
countries which still have to
a
ahead
enterprise
question
Why is
will be
stock,
the
other
docks that hook up
cumulative
preferred
redeemable
do
is good for the
economy as a whole rather than the
special interest of any one group."
186,341 shares of 5%,
value
par
vertible
are
On my way
People needing almost
everything.
I
make
the sale of
$40
For
cancer
Mr. Folsom further said that the
goal of stable,
productive employment at a high level depended on
"an objective approach
by businessmen, workers,
farmers, consumers and the Government as to what
together with funds obtained from
100%.
more
from
(
financing,
bonds
to do is to prevent
•
Chairman of the CED.
bid of 102.-
a
the
and
in busi¬
army
ness for
on
from
flowing to Washington
and its eager power seekers.
By
all odds the best single way to do
way
more
to pre¬
incentive, to increase pro¬
ductivity and to increase op¬
portunity for all the people."—Marion B. Folsom,
serve
folsom
self-interest?
Proceeds
if
on
May 17
on
3991%.
end¬
power,
the
sale
in
New
enough need¬
bankers
publicly offered
$8,000,000
The
Brooklyn-Union
observation that the typical Fed¬ Gas Co. first
mortgage bonds, 3%
eral Government worker, at least series due
1980, at 103% plus
in the upper echelons, is a person accrued interest. The
group was
of high purpose and integrity. But awarded the issue at
competitive
mediately
Done
imagination
think
done to put
to
a
group of investment
which on May 19
,
on
to stabilize the
economy,
M. B.
Halsey, Stuart Group
I have also put in
five
that in the months and years im¬
It
I.
cor¬
our
negative or hands-off
governmental pro¬
grams.
They should assist in
developing a positive program
A
Bonds Offered by
enough of them
as
a
Washington
correspondent.
On
those assignments it has been my
and
business than
characterized
a
imagination
adventurers in seeking
portunities for
have
are.
attempt to
a
attitude
Brooklyn Union Gas
national
adult life, and
more
must
1931, is
...-I
Govern¬
newspaper
convinced, how¬
there is
since
policies and taboos
my
every
over
dition to
I
Federal
my
"Bawl"
where the material for
observation
used
more
U5
do
know-how.
am
lot
of indus¬
which
areas
talking about it to a
kind—that we also
1
seems
heavy wet blan¬
advantage
ever—and
IM
continental
a
wage
the expansion
over
try into
have
of
to throw
me
ket
than
less
uniformity
the
of
have
in
been
not
my
considerable.
for
take
low and sly
a
has
during
there
we
nation-wide collective
been
emergency
far
should, and probably must, if the
process
of
industry-wide
and
That
ment
opportuni¬
new
ties for business enterprise
to
the paper comes from and
what its
functionary is
has
equally vigorous
of these opportunities.
as
Straley, Vice-President
Hugh W. Long & Co., who has
of
on
worked
enter¬
going to get nearly
all
the
observation, and
personally don't believe that
are
clients
and
edited
to
we
branches
the country."
John A.
quoted
fellow.
an
utilization
their
eral
our
for
infiltra¬
tending to proceed on the
assumption that the typical Fed¬
employment prob¬
lem and keep the business outlook
bright over the years.
That of a
very vigorous search for oppor¬
tunities
to
communist
must
imperfections in
to take
investment
and
*
sys¬
tem. Businessmen cannot afford
each year,
over
possible
nessmen
rect
"the
have
-1
"Working with others, busi¬
the
us
talk
key requirement if we are going
to handle
leave
tion of the government, I find a
great many people with whom I
dis¬
is another
sure
believe,
litical and economic freedom.
largest
always the banks,
are
brokerage houses
concerns
sold
are
says
purchasers
cussion of trends toward socialism
and consumers
in hand—brings
with more money
ri
of
I
primary responsibilty of a business¬
profitably—because
provide employment
—he, along with other groups, must participate and
really help in the developing of
national
policies which will
preserve and strengthen our po¬
is to operate his business
without profits he cannot
long
drawings which have appeared.
Stating that some 26,000 copies
and
present seems to me an essential
of your future prosperity.
That—the
would,
"While the
man
editions.
past
grossly insulted in that particular
with a lot more personal freedom issue," adding that "some of the
these displaced workers an ade¬
than we are likely to have other¬ insultees buy hundreds of
copies
quate system of unemployment
wise.
In these days of heated dis¬ which they mail with
shy pride
benefits which we not have at
spend
Some Questions!
of the fun¬
some
from
reproduces
Collier's
important from
more
story about
"The Bawl Street Journal."
Entitled "Wall Street Has a
Sense of
Humor," the article tells
something about the history of the
widely known burlesque news¬
of the "Bawl"
prosperity.
my point of view than anything
else—private provision of the job
opportunities which must be cre¬
some
with
large potentialities
national
lower
prices.
sumers,
much
very
that private enterprise will do
the
the job.
It can do it with far
greater technical efficiency than
.
a*
good
ATLANTIC
COAST
New York, N. Y, May 19. 1950.
LINE
RAILROAD
COMPANY
C. McD. Davis, President
.
*
1*
t
24
(2172)
t
Continued from page 3
.
,
dropped
;
three
dropped
if
But
The Outlook foi Prices
of
by the
1946.
peared
rapid price rise
very
For
short
a
time
it
of
just
ap¬
steel,
in
as
we
the
all
were
that
year
crop and the crops of bread
grains abroad were seriously dam¬
aged by drought, which created
a
world-wide shortage of grains
stimulated
of
farm
the
a
and
new
for feed.
good
of
products and foods.
At
time increases in costs
prices
in
coal
steel-making, and
through 1946.
These developments in the lat¬
half of 1947 set in motion a
of
reactions
which
of
livestock
in
In
in
peared in the
very
which
Did
off"
copper, scrap
by shortages to one
recognition of good
up
in
Yr
i i
adjustment in farm
prospects.
crop
," ,.
prices
,
,
The
as
-
the dominant characteristic of
was
the price
sharpest sin¬
the
Not
retrospect,
that if
the
1947-48, because of the
supplies and higher prices
grains.
This caused
a
temporary decline in prices of
meats,
ourselves
Decline
ever
our economy,
movements of 1948, but
for
asking whether or not we were the Wholesale Price Index.
There
starting into another 1920-1921 are the same two wartime
peaks
collapse.
Our answer was "no'? and the same intermediate
and subsequent history proved us troughs. > The movement
of the
correct.
If there are some points Consumers' Price Index
since the
of similarity,
there are more outbreak of the war reflects
tions.
In the first place: price
1920.
toward
awesome
had reached
a
might
say
general decline had been
offing, this violent price
might well have provided
push that would have started
it rolling down.
It was particu¬
larly significant that nothing of
early months
the
sort
happened.
buy¬
high of 28 cents
a
which they will buy, and on which
the
rise from the outbreak of
the
to the middle of
1943, when
wartime
economic
long
war
the
stabilization
began in earnest with
"Hold-the-Line" Order,
in
program
the
those 45
about
months, the index
one-fourth,
year. : Then
of
tight
middle
1946.
price
of
control
1943
rose
by
about 7% per
was the
period
or
there
to
from
the
the
middle
of
they will make support loans. If
these three
years, the
of the corn has too high a moisture index rose
less than 7%, or a
print cloth fell to less than 16 content (and much of it
little over 2%
does), or
per year.
Then
cents by the year-end.
As is so if the wheat is not
properly stored, followed the "decontrol year" in
often the case with the prices of
farmers must sell it in the open which the index rose
18% in the
basic commodities, this proved to
market. Nevertheless, there is no first postwar price
boom; only to
be the forerunner of a general
doubt that^the existence of the be followed
by another rise of
weakening in cotton textiles. This
support program offers strong re¬ 11% in the second
boom, which
also was an overdue recognition
sistance to a broad and prolonged was touched off
by the short coin
of an accomplished economic fact.
decline of farm prices.
;
crop of 1947 and carried the index
in
Materialize
we
in the postwar
ing rush. From
the
the
ap¬
Cotton
early
January, .the
With the end of the
return of 12 million
and the
war
household
the
textiles
prices
nomenal
and
which
margins
levels.;
bid
up
phe¬
to
Once the stock¬
ing, by consumers and retailers,
was/; completed, textile markets
Central of Georgia
began
normal
somewhat
unique situation of a
uncompleted,, reorganization.
take
to
on
.This
aspect.
nearly
more
a
An
from the
men
services/ there was a rush
buy cotton clothing and cotton
to
In
price
armed
Central of Georgia presents
four
distinct phases of economic
condi¬
•
There was first
points of difference between 1949
and
oc¬
drop
feed
and
bid
"sold
domi¬
short
livestock
level
question, "Is this it?"
winter of
of
ask
to
nated the price movement of 1948.
The most immediate was the li¬
quidation
"Of
<
ter
chain
of the
rate
25, 195Q
test
drastic
"most
a
the end of the year other supports.
It would be a mistake
adjustments, which turned out to to think that support prices set
curred in the Wholesale Price In¬
be equally significant, began to a firm floor below which
prices
dex.
appear. The first of these was in cannot fall. Indeed, we are seeing'
In
a
period of 10 days spot
cotton
textiles. ; As far back as
many quotations at less than sup¬
prices of winter wheat fell from
January 1948 the spot price of port prices.
This is possible
$2.93 to $2.37 a bushel, and the
print cloth as recorded in the (among other reasons)
because
spot price of corn from $2.60 to $2,
Bureau's index began to decline the
Department of Agriculture has
At that time a lot of us
stopped from the
extraordinary levels it certain
standards, for
products
prices, led a
corre¬
sponding
up-surge
of
nonfarm
prices. The rise through 1947 was
very steep,
though not so steep
the rise
one
gle month's decline that
petroleum
as
cause
a
was
the strength
sugar,
specific to certain market condi¬
tions as we passed from a price
in 1948.
Apparently
"came to" at once, be¬
February 1948 at such
to
mining and
sharp rise in
a
and
the prices of grain fell pre¬
cipitously in the first two weeks
prices
Thursday, May
.
In other words, the drop moved almost horizontally.
t
Except for these
differences in
As was the case in 1948, when amplitude, the chart of
localized, primarily in grains
the Con
secondly in livestock, which prices began to decline in the first sumers' Price Tridex for the
mast
affected by grains; and it was half of 1949, many people kept 35 years
closely resembles that
are
cause
same
and
all
as
.
markets.
was
crops
they
This
spurt in
time—
same
ago —thfe
years
short supplies of grain, in the face
of prospects for at least
normally
our
corn
both for food
Living
the
traders
looking for, but
of
summer
About
two
you
.
of peak last summer were more
tha
but twice as high as they were
iu5
by summer it was clear that we before the war, and half again
had weathered the storm.
After high as they were under
nrW
the
dropping nearly 10% between Au¬ control,
Consumers' pT\Ql
gust, -1948
and June, 1949, the Index at its peak had risen bv
prices -of all commodities other three-quarters from the
prewar
than
farm products leveled off level and by less than
one-thirri
very sharply, and have since from mid-1946.
This
stbers
tin, wool, lead, and
cotton
print cloth during those
two weeks, you would never have
suspected that anything unusual
was
at work on the commodity
grain
suddenly woke up to the
fact that they were
holding up a
price structure based
on
very
though we might be
reaching that plateau of stability
that
1948.
c'ents;
>
hogs dropped $3.50.
look at the prices of
$3;
such commodities
And the Cost of
ated
Financial Chronicle
The Commercial and
return
to
even
is
ence
supported
chasing
which
the
by
economy
now
is
a
volume of pur¬
from many sources,
power
conspicuously lacking
was
in 1920.
important differ¬
more
that
For one
thing, consumers'
purchasing
power is vastly greater.
weekly earnings of fac¬
The real
tory workers in 1949
about
were
50% higher than in 1920.
Employ¬
to
its peak in the late summer of
1948.
If
;
look at the components of
Price
Index, we
we
the
Consumers'
find, as we might expect, that
food prices have risen further and
faster than any others.
This is
than
more
tion
anything also
of th6
of
power
a
reflec¬
enoihhpus purchasing
Our
consumers
during
ment
is
very high, and loss of the war and since. Our studies of
required; among
other
purchasing power from unem-/ consumption habits in the United
things, very substantial declines
For, like the New Haven
reorganization, with which it can be f. in prices. Since
ployment is partially offset States over the past 50 years have
consumers were
compared, the company emerged in mid-summer 1948, with allo¬
through unemployment compensa¬ demonstrated quite clearly that
no
longer avid to buy at
railroad
undergoing
a
drastic,
a
yet
cations still incomplete due to
litigation with respect to
involving both creditors and tax refunds.
Accordingly,
almost unbelievably bad
operating statistics for the past
years, recent developments of a legal and financial nature
normal
high
claims
prices,
despite
minated in
several
The
of
(1)
Prospects for an early tax refuMd of
$2,713,000 from the
Federal Government—Of this amount
approximately $1.4 million,
or $70 per
$1,000 bond, will probably be distributed to bondholders
having
even
the
of
to
of
cover
increase
considerations
the company's
in
do
not
into
account
the
quarter.
April earnings, while
not
excellent, although
as
good
as
more on
or
the income bonds.
more, on
May 1, 1951 (to
years)
tively
managed.
market!
Surely
••—
meats,
dairy
products,
fresh
conserva¬
fruits and vegetables. This has
the
And
pressed itself
stock
as
ex¬
steady and vig¬
a
demand for foodstuffs,
could sug-:
gest that share prices offer much broken only now and then
by re¬
room
for
One
no one
orous
price collapse.
of
the
encouraging things
sistance to peak prices/ Thus, food
have
much
more
than
prices
about
the price adjustments that
going on is that they are not
indiscriminate (as they would be
doubled since before the
increased by nearly one-half from
the time controls were lifted to
in
the
the
case
tion).
of
a
They
general
liquida¬
selective
and
are
specific to certain
commodity and
market situationsFShortages, such
those
as
we
still
are
metals
acting
carried
of
on
forces
our
markets
into
over
1949—the
which
the
been
facing
in
in
more
nearly
changes
situation.
in
the
de¬
During the first
quarter of the year,
many indus¬
trial consumers
almost simulta¬
neously
decided
overstocked
and
that
a
they
were
downturn
in
market
a
have
from
being alarming, this is
YVYYvfeY--/-.
Raw Materials More Sensitive
The
of
reflected
area
provide
made
in 'recognition
of
a
supply-demand relationship.
healthy.
first
movement
metals,
many
Far
broad
same
mand
peak in the
Since
then,
war
1948.
of
summer
and
declined
The average retail
they
significantly.
have
prices of foods in American cities
about
was
10%
lower in January
farther
babk
finished
goods
markets,
the
tuations
we
to'-raw
are
from
go
materials
sensitive
more
extreme
more
we
and
the price fluc¬
find.
In
the
highly
organized ; commodity
markets,
the
risk-taking functions make
prices very sensitive to
changes
in
supply and demand
less
dependent on
versely, as goods
and
costs.
much
Con¬
Prices
what
about
the peak
at
of
they
were
one-fifth
house-
and
apparel
are
in August
double
before the war and
higher than they
quite
not
werti under price control.
increases
reflected
the
These
great re¬
stocking boom that occurred when
goods
that
had
been
scarce
or
absent during the war
returned in
How far this
increasing volume.
increased demand may carry over
permanent stable basis is one
on a
of the
ing
big questions
now
confront¬
Even
though consumers
on, the average are well stocked
today, there is always a vast res¬
ervoir of unfilled wants which are
us.
translated into demand
as
long as
available,t°
modities became a powerful fac¬ successive
sustain it.
It is particularly for
stages
of
processing
tor in the
economy. Between the and fabrication, with more and this reason that the price adjust¬
end of March and the
end of June; more labor and overhead costs in¬ ments now going on in some cloth¬
copper
cents
cents,
steel
a
com¬
dropped
from 23V2 to 16
pound, lead from 17 to 12
zinc from 17 to 10
cents;
scrap from $31.50 to $19.50
ton and cottonseed oil from
13V2
to 12 cents a
March, and from
a
It
pound;
or
cover accruals
for both 1950 and for
would supplement
near-term payments to follow
early receipt of the
company's tax refund.
previous
all
of
year.
the nonagricultural
of
In that
event, payments of nine points
prudently and
are
furnishings
nearly
result
agricultural prices was dominated
by fluctuations in
supply, while
marked
equal 10%
day
try-by-industry adjustments
the
were
of
1948
interest
preliminary indications May is also
expected to be excellent.
would not be
surprising if earnings for 1950 would
inventories accumulated after the
first World War, inventories to¬
sumers'
have generated unprecedented de¬
mands for the high quality foods
basis for high prices. Where short¬
ages have been
overcome, indus-
These
half
yet available at this writing,
as
In
heavy speculative
'
were
power
not
and
demand.
people when they
will buy food, and
The high levels of con¬
incomes in recent years
than
1949
than make
up overall interest
requirements for the first
should prove
of
money
good food.
1950
do,
this year. March earn¬
years, were sufficient to cover fixed and con¬
tingent interest requirements almost
three times, and at the same
time more
ings, best in several
the
American
have
1948.
the prices of basic
industrial
take
earning
price
increased twice in
were
sources
to
new
annually.
These
on
prices,
absolute
months; and lead went from
throughout the
$2.5 million
contingent
of
years
assured
the
are
were
20%
Aluminum
/important
are
contrast
es¬
shortages
out of earnings and
liquidated within a period of five years. Ulti¬
mately Central of Georgia will benefit to
the extent of additional
to
than
more
for the military
exports and
tablishment
the heavy demands and
persistent
Through economies, Cvitral of
Georgia expects the Savannah & Atlanta to
contribute $500,000 or
more annual
earnings. However, no dividends are to be
paid to the
parent company while the R.F.C.
loan is
outstanding, management
anticipating that both principal and interest can
earnings, estimated as
sufficient
requirements of $600,000
11
The
care
over
tion. Government
expenditures for
the average
were on
greater;
year.
J3) Savannah & Atlanta Railroad—Application for
acquisition
this railroad, purchased in
late December,
F949, has been made
the I.C.C.
Hearings are to begin next month. Cost to Central
be taken
15%
15 cents to 21.5
cents, and zinc
from 11 cents to 18 cents over the
quarter of the
a
steady and
increase in
prices —about
stability,
four
was sustained. No late
oper¬
If the Southwestern Railroad
problem
the end of
1950, the company will have to
Georgia was $3.5 million, in part financed
by
ten-year loan from the R.F.C.
characteristic
large
average.
after
loss of $168,500
to
major
creases in nonferrous metals
available.
parent company.
This it is able
$1 million of liquid funds in its
treasury.
some
1949
18% higher at the end of the year
than at the
beginning. The in¬
(by the majority stockhold¬
or a possible compromise between
the litigants, Central of
Georgia, as the operator of the Southwestern Railroad
by order of
the Courts, will receive
payment from the latter road for operat¬
ing deficits of recent years. For the fiscal
year ending June 30,
1949, a loss of $123,000 was suffered and for the first
"resolved" prior to
all deficits to the
other
increased and
ers)
pay
cul¬
of
year.
Prices of various iron
and steel products were
repeatedly
aside distribution of
securities authorized in the reorganization
by
the I.C.C. and later confirmed
by the Courts. Case was remanded
to the Supreme Court of
Georgia. Minority stockholders won and
assuming no further successful appeal
is
half
the
(2) Southwestern Railroad
Suit—Minority stockholders of this
formerly leased line appealed to the U. S. Supreme Court to set
a
first
1948 prices was the
metals
July 1. It is even possible for a larger payment to be made
should the Court authorize directors to
allocate a somewhat larger
percentage of the refund for bondholders.
are
the
comparatively
before
1949-50 fiscal year,
readjustment
in widespread
(if not so very
sharp)
price declines of many
cotton products.
>
V
should
favorable to holders of the
company's income B 41/&s, selling
currently at 48, and currently carrying 13 V2 points of arrears:
These developments include:
prove
ating figures
this
continued
:
to
decline
print
to
reach
postwar low of 121/2 cents.
ployment
rose
we
since
called
recession
or
its
Unem¬
sharply during this
period and
been
cloth
were
in
"the
vested
in
ments
tend
to
become
move¬
more
It
purchasing
power
is
ing and housefurnishings lines are
especially significant, since they
may
be decisive in determining
is
partly for this
partly because of the whether we can find a price level
sluggish movements of rent which will permit a steady volume
reason
and
and
consumer
services that the
Consumers' Price Index has risen
less, both since prewar and since
decontrol,
than
the
Wholesale
what has
Price
inventory
market
readjustment period."
through
them, the price
sluggish.
more
pass
Index.
prices,
Wholesale
Whereas
as
Price
primary
measured by the
Index,
at
their
of
buying.
Since
peak
their
m
October
1948, apparel and housefurnishings prices have declined
more
than
8%.
:
The importance of the
"miscellaneous"
f
v
so-called
segment
of
th<
index is often overlooked because
•
y
Number 4910
171
Volume
The Commercial and Financial Chronicle
.. .
nondescript, name, but it car¬
very heavy weight in the
index—its relative importance is
about 25%—and it contains many
nf the most important items in the
consumer's budget. All transporta¬
tion is in this group:
street-car
nf its
ries
a
fares as well as automo¬
tires and gasoline. It also
and bus
biles
most personal, services
beauty and barber shops)
and medical services
(including
doctor, dentist, and hospital fees)
includes
tsuch as
items of house¬
hold operation (such as laundry
and dry
cleaning services, and
telephones). The relatively slow
well as many
as
marked contrast to the
is in
age
the aver¬
those prices on
rise of
price changes for food, apparel,
and house furnishings.
Because
most of these miscellaneous com¬
modities and services are only in¬
directly affected by changes in the
commodity markets, and because
include many regulated and
institutionalized prices, they tend
they
The
ditions.
those
items
we
price
purchased
customarily
are
while
by
drawn
in
terms
of
the
grope
toward
that
goal, "the balanced price
we
elusive
moderate-income families in
large
cities.
The
specifications
are
structure,"
There
.
physical
which
.
t
are
are
kinds of
some
likely to
more
charactersitics by which ah agent
may identify the items. Our pric¬
only rise.
ing practices require that
they rise will depend
we
than down.
re¬
cord
the prices of merchandise
available to moderate-income con¬
if
in
sale long enough and
on
toward
full enough assortment to be
a
available to moderate-income
generally.
sumers
cord and
prices
con¬
That is, we
of,
hand,
if
or
sheets
of
are
irregulars,
or
and
run
in
have
is
much
so
prices
preoccupation
their effects
and
on
the economy.
We
war, con¬
their
hospital
bills
utilities.
not
rise—for
the
and
The rise
laggard prices must al¬
kept in mind when we
be
asked:
At
what
the
of
we
con¬
and
too
relation
to
inflation will follow.
tivity,
if
in
far,
in¬
in production and produc¬
But
profits and investment outstrip
real
incomes, we accumulate ca¬
pacity and production in excess
of purchasing power and deflation
will follow. Historically, our pro¬
tinue
peak levels
index.
of
important
more
What
1947-48.
which
we
than
the
I think
reason
increase.
why
reason
our
There
level
of
is
no
living,
too, cannot continue to increase,
provided that we find the means
share it.
to
level
Girl Softball
Champs
expect to find
may
To
will
recognize the
approach of price stability because
we
to believe that it will con¬
to
is
itself is the economic environment
it.
that may
is
supply, with costs and
competition.
Certainly a stable
postwar price level would be well
above the level of 1939, and we
should hope somewhat below the
be in prospect in some
commodities arid services.
the
that if
ductivity has increased at the rate
of 3% per year, and there is every
structure
in
effects
think
I
sumers' real incomes rise too fast
stable, our price
dynamic, with prices
constantly moving in response to
comparatively
declines
assess
productivity.
have learned by now
creases
often
are
raise
hand, investment income
demand and
con¬
probably
of
many
these
ways
the
price is in effect only a
day or two, the price is not used
the
level.
without rent
course
example,
reduced
in
with
the kind
on
economic
more
even
services
the
rates of
"off
if
or
there
wonder that
no
we
Many of the miscellaneous goods
longer. On the other
the
quality"
can
tinued to rise through 1923.
sheets
our
specifica¬
tions, if they are of standard qual¬
ity and if the prices are in effect
two weeks
course,
trol, rents, after the first
re¬
sheets if the
say, bed
fall within
a
Note that
in the index reduced
use
sufficient to expand capacity and
have, but over level will we find
stability in the
period of years, as the housing
price structure and a stable rela¬
shortage is gradually eliminated
tionship between prices and in¬
and as controls are taken off, we
comes? Personally, I do not think
may
expect to see rents rising
anyone can tell.
Even when it is
they apply to items of standard
quality
the other
and that the two plateaus are sep¬
arated by a difference of about
a
generally. Price reductions
quickly reflected in the index
are
.Rents, of
move up
25
the years of stability were so few
prices 25% in level, it is
How fast and how far
of rent control
sumers
*
•
(2173)
Play at Field Day
This is important
slowly on the aver¬
When we look at these charts, it will be neither clearly a buyers'
The sports program of the Bond
to bear in mind when you try to
age.
This group advances more
the most striking thing about them market nor clearly a sellers' mar¬ Club Field Day on June 2 will be
use the newspaper advertisements
slowly than the index as a whole,
(aside from the similarities be¬ ket; it will be a market with enlivened by a baseball game be¬
or
store windows to foretell the
but, by the same taken, this is a
tween them) is how many of the neither a shortage nor a glut of tween
two
championship
girls'
group which tends to
keep on general movement of retail prices. last 35 years have been years of goods. It will be characterized by Softball terms, it was announced
What may we expect from here
rising after other prices may have
full and steadily expanding pro¬
by Joshua A. Davis, Reynolds &
on? I am no prophet and prophecy rapid price change and how few
turned down.
Where food and
have, been years of that kind of duction and vigorous competition. Co., Chairman of the Field Day
is not one of the functions of my
clothing prices have dropped, since
It will reward efficient enterprise Baseball Committee.
stability which we like to think
the summer of 1948, the prices Bureau, but we can draw on com¬ of as "normal."
If we pace off with healthy profits, and by the
The
to move more
automobiles and other transpor¬
of
and
sense
mon
Raybestos
knowl¬
common
the
rates for medical edge to foresee something of what
lies ahead. In the first place, we
arid hospital care have continued
have observed seasonal changes in
up under a momentum that may
food prices. Typically, these prices
carry them higher long after other
tation, and the
This,
dropped.
prices have
will notice, was
you
.
the case after the
reach their
March and
seasonal
begin
carries them to
first World War.
in the fall.
Rents
Unique Case
a
factors
a
low
a
were
affecting food
prices,
total
of
charts
the
of
Index, there
14—about
about
are
two-
approximating stabil¬
There is the first postwar
plateau from 1923 through 1929,
ity.
when
other
no
the
the fluctuations
were
com¬
paratively minor; then there is the
post-depression plateau from 1935
we
unique case be¬ might expect an increase of about to 1940. For the rest of the time
2 to 3% between now and Sep¬
cause, alone among prices, rents
prices Were moving either very
are still
under control.
Up until tember.. But of course we must
rapidly tip or very rapidly down—the fact that the
the revision of the Rent Control never forget
certainly more than are required
Act of 1947 rents, had. risen less weather can have a tremendous
to satisfy the functions of a dy¬
effect on food
Rents present a
than
beginning of
the war,
In the past 2lk years
they have risen more than twice
5%
much.
as
Although our rent index
over-ceiling
rents
as
includes
they
do
reported by tenants, they
are
reflect
not
the
higher
built
If these
effect
for
the
of
dwellings
and
war
taken
were
the rent
full
the
rents
during
into
since.
account,
index might be 2 or 3%
higher than
it
still
be
would
stable of
is
shown,
much
living costs.
-These
charts
contrast
the first
but
the
it
most
-
show
between
•in the years
the
what
marked
happened
following the end of
World War
and the
that have followed the end of the
Here again
second.
the
question:
encounter
we
Will
consumers'
prices be
deflated
as
in
Again
must
1920?
T think not,"
the
same
I
they
were
answer,
and for very much
reasons.
past year
have
we
seen
waves
of
reductions, not only in foods
but
in
and
housefurnishings
drop
tyok
various
in
food
upon as
items
that
have
Parel and
though
nave
as
which
result
occurred
we
of the fine
in
index
the
The reductions in ap-
housefurnishings prices,
in
some
been
attracted
instances
spectacular
they
have
and
wide
attention,
have
relatively small number
commodities, concentrated in a
aiiected
nt
a
lines^ly smal* numher of price
But if
,
t
our
you
rough
Jui
\
.
ave
will go through any
great
the
stores
.pages
or
of
thumb
most
the
you
that
realize that the prices
come down are
greatly out-
mbered by those that have
•I
the
same
or
even
re¬
risen.
ls ls
ems
is
Particularly true of the
which we price for the Con¬
fers' Price Index.
little
a
difficult
more
We have for
^nny years had detailed specififn lof,s-and
explicit instructions
!
S^dance of our price
it
its
crop of failures among the inef¬
ficient and the marginal enter¬
prises.
^ey. would be pric-
same~-ite,ms from
-month and under the
month
same
con¬
produce
Equally important is the rela¬
prices and in¬
No price level can long re¬
tionship
comes.
main
stable
it
unless
results
in
healthy distribution of the na¬
a
bition
with
game
the Arians
last
year's runner-up for the title.
Pitching for the Brakettes will
20-year-old
be
Barbara
18
wins
two
vs.
defeats included
four
tion and investment. This
"Chammy" Chamberlin, described
the
on
come
one
hand,
sufficient to
requires,
in¬
consumer
provide
a
stead¬
as
no
-
the most
in the
hit,
no
-
run
retailers
both
are
on
for the Ariarts.
.
to
many
manufacturers
and
sensitive to the need for
meeting consumers' demands for
acceptable quality at lower prices.
are
very
On
the
other
break-even
hand,
points
and
costs
high, set¬
are
ting limits on the amount of price
There is the inevitable
reductions.
temptation to hold prices and re¬
New
duce
production to reach an equi¬
librium point, even.though it may
be
at
a
lower
level.
This, of
course,
»
it
because
which
of
lead to
will
spiral
course
downward
precisely
is
a
contracting
production, employment, purchas¬
ing power, and demand.
ch<"0
Street-
the
Hydro-Gin Fizz
Like the
®c
'-iS!
is the greatest danger that
face,
this
s-i
'
World Horror:
H-bomb, it's dynahaven t tasted
mite! If you
the same effect
the Ba
Journal's own expose of
one,
get
by
reading
Prices Can Be Lowered
I
think
the
experience in
our
past
sales
managers
and
shows, that jengineers
be
can
very
latest
the
drink craze.
in¬
genious in redesigning production
to maintain essential quality and
still
meet
the demands for lower
price tags. These changes may not
always lead to lower prices in the
Ulliy ^ I • will take
econQmic sense—that is, price re¬
on
identical quality. In
ductions
a
such true reductions
are
possible through closer con¬
trols on costs and the economies
many
tour
terials and
give
stability of prices.
In
the
other cases prices will be
engineered and merchandised to
consumers'
copies
Journal
they can and will pay.
is
characteristic of
such ad¬
justments as these that they are
no
longer
dominated by broad
sweeps of economic changes such
as
those of 1919-20 and those of
1946-48.
On the contrary, they are
specific and selective in response
to the market conditions of indi¬
vidual
commodities.
It
is
characteristic
that
some
while
of
such
a
ensure
others
are
going
up
down,
peep
inside the
of
Bawl
the
($1! apiece)
delivery
on
Street
now
to
June
2.
Send checks to Edward Glass1
nave to
read
et
Journal
was
the
market
prices will be going
a
funny animals. Order your
what
of
ideas
you
side-show, plus a look at all
many
It
you on
of the Bawl Street circus,
cases
that arise from availability of ma¬
to
meyer,
the
find
mir
done by
bond
cups, of course.
c/o
Circulation Manager,
Blyth
&
Co.,
Street, New York.
games.
promising girl pitcher
East, will be
On
signs
of healthy conditions: inventories
are low, demand is still high, and
there
"Rusty"
Abernethy whose 1949 record of
housefurnishings.
and
hand
one
of
Linden, N. J., 1948 champions and
few months to prices of ap¬
next
parel
of
tional product between consump¬
Considering that ily rising level of living; and, on
namic economy.
Brakettes
Stratford, Conn., national cham¬
pions in 1949, will play an exhi¬
between
soc
so
will
foresee what may happen in the
meet
mail ordor catalogs,
named
.
It
apparel
well. The
crops of 1948 and 1949, has been
largely responsible for the declines
up to now.
prices higher; bumper crops could
push them down further. V
of
prices,
a
fail¬
crop
this summer could send food
ure
we
'The
question
is J particularly
pertinent today because during the
price
prices. A
since the
token
same
something
point in
seasonal plateau
a
on
fifths of the total—when there was
slow rise which
If there
years
Consumers' Price
14 Wall
the mound
2S
and Financial Chronicle
The Commercial
(2174)
Continued
from first
Courts—particularly the Fed¬
the
page
their
Courts—as
eral
propensity
have
has been accused—among
& P
Hodge-Podge of
Anti-Trust Laws
our
against Du Pont is that
lowered the price of
cellophane 21 times.
Yet the Court as you know, did
So if our businessman obeys the
outlaw the selling methods used Sherman
Law
he
is probably
in the cement industry. The result violating
the
Robinson-Patman
of his
in
aids,
or
backs.
ernmental crutches which may
well
serve
economic
selves
attitudes
enough to support an
invalid, but—of them¬
they can do nothing to
—
his
-cure
to
government contemplates go¬
ing into the crutch business per¬
manently, therefore, the day must
feet.
dering
if
the
of
roots
nomic
fact
years,
for
American
our
himself in any
he
A
economic
temporary
periods
and
famine
that
have
always
agricultural
depression
of
the
—
"lean
years"
both the
beset
and
been
industrial
ad¬
of mankind since the days
vances
«of Joseph and
the Pharaohs.
Federal
our
on
centuries,
generally,
there have been jobs in America
for
all.?J.XcT;V'.'-/''
.i"
Now if what the President says
is true—if
fulfilling
"in
this
system is
our
day
no
longer
employment
our
needs
hour
and
when
we
allowed
Topsy,
for
cannot
be
60
other.
of
laws which
to
be
can
which
with
even
the
And
like
grow,
and
years,
only
a
way
of obey¬
sure
Now
gentlemen,
I
shall
merely read you
a
ask
by Supreme Court Justice
Jackson when he
Anti-Trust
the
the head of
was
Division
"It
is
impossible for
lawyer
by
here in this
room
ly
acquainted
with
parts of
our
it
seems
to
to
find
the
intimate¬
are
the
working
industrial
that
me
economy,
it's
to
up
monkey-wrench
us
be¬
fore it is too late.
Let's look around,
in
Here
we
are
Boston,
the
birthplace
manufacturing and
American
than
125
in
Greater
businesses.
setts
has
established
are
So, clearly,
manufac¬
new
enterprises
year.
of
centers
Boston
do have
we
Moreover
new
Massachu¬
investors
more
every
in
pro¬
portion to its population than
any
other State in the Union, and the
savings deposits in Boston's banks
«are
nearly three times the national
average
on
a
capita
per
basis.
Clearly, therefore, there is avail¬
able capital for business here.
Why is it then that
bave
more
investors
are
of
imore
unwilling
their
do
we
businesses?
new
not
savings?
mechanic
a
who
has
Government
In
is
except the Supreme Court
the
of
United
times
even
don't
had
Washington gear box. In fact it
would not surprise me if we were
monkey-wrenches
there.
to
seem
too
be
towards
quotation
from
Discourage Investment
the
sure
anti-
our
me
Ralph
of
a
Waldo
discourage
investment
and
that encourage small businessmen
to sell out, and to cash in on their
capital gains.
We
shall
tagonism
to
inflation.
Everybody
worker
a
in
week
widespread an¬
profits and a
recognize the facts
towards
reluctance
1939
who
realizes
earned
$30
a
has to get $51
order to have the same amount
now
purchasing^ power.
people
Yet
understand
to
seem
stockholder
dividend in
$10.20
on
who
1939,
that
to .break
even
that
got a
$6
has to get
now
same
few
investment,
in
terms
of
in
—
America,
College building in New
York, but which might be equally
appropriate if chiseled on
the
marble
Court
walls
of
the
Supreme
building in Washington. It
of
are
different
opinions
hours; but we always
be said to be, at heart, on the
may
side of truth."
Now
that
a
commend¬
very
able
philosophy. An enlightened
willingness to change one's mind
from
hour to hour may be a
fine
thing in the academic atmosphere
of any College or of any
Court,
speaking
I
nessman,
as
a
practical busi¬
only
can
to
way
say,
run
a
"It's
a
railroad."
Court Made Laws
So
we
come
face
to face
with
the fact that laws
ness
not
are
five
governing busi¬
really written in
members
of
the
Su¬
Court say the law is, may
something
vastly
different
be
from
what
small,
from
run
And
;>;
is
that
opinion
personal
mere
no
part either. One of
on my
the severest critics of this
tic merry-go-round we
Chairman
Lowell
legalis¬
live
Mason
is
on
of
the
Federal Trade
Commission, whose
duty it is to enforce many of these
laws,
who
and
outstanding
subject.
He
the
of
one
as
therefore
can
authorities
/V
.
"American
business
bled
jacked
the
on
Congress intended the
law to be.
and
under
had
the
been
half
use
repeated
bills
Then it
"We
often
the
basing point system
in
study
steadfastly refused to
the
in
pointed
by industry for
century, and that Congress
a
after
—
was
said:
know
and
so
of
had
pass any
of
fo outlaw it.
proposing
was
—
'
no
:-
criticism
to
he
It's
Wonder
no
businesses
started
is
at
only
and
welter
a
interstate
ernment
is
"In
governing
pants
unfair.
laws
of
that the gov¬
commerce
literally
There
find
can
charge to bring against
it
cern
chooses
to
any
con¬
prosecute.
that this system is
say
some
I
outrage,
an
and that it's time the government
did
something
sensible
about
bringing its
the
operations up to
own
standard of ethics that it
same
expects of business."
Now
those
coming
Federal
from
to
Trade
a
that
man.
of
the
Commission
who
man
words,
member
a
and
appointed
by President Tru¬
office
was
also
are
"Everything Business Does
goes
into
wrong.
need
to
lawyer
us
personal
the
"Later
jail
prices.
if
In
a
or
we
now
big
retail
there
packing business. I
a
succeed
courage to-
for
great
a
is
he
public
is
per¬
service,
willing to take such,
or
subsidies—but in the:
clean-cut, understandable
which
clearly
mark
the
not
be
left
to
those
who
business, to those who seek
personal
to
poiltical
or
power over
theorists who
periment with it.
packers.
want to
it,
ex¬
It is not
a job
underlings in
a job which
requires the highest skills of gov¬
for
irresponsible
Federal bureaus.
dozen
the
in
to
should
nor
half
are
chains
of real
today, knowin*
satisfy the conflict¬
must
grants,
hate
We made them get out of the re¬
tail chain store business in 1920.
But
a
us
boundaries
of
good and lawful
business practice.
The defining of those boundaries
versa.
meat
1
of
here
profound "Amen."
a man
if he
rules
a heavy
against him if he didn't
charge a fixed price. That is, of
course, if the coal was soft. If it
the
he
form of
penalty
take
the
business stopped
and robbers with
it seems to me that he is;
entitled to look to his government
for aid—not in the form of
loans,,
if he went into the
hard—vice
America
time
and
risks,
coal business we assessed
was
it's
business
forming
con¬
1933
of
men
demands
And
Mason
put
of
thought-provoking
that, I think all
serves
been
he
loosening
of his workers, his;
stockholders, and his customers..
Any man who can do that de¬
again.
versa
on,
meat
ernment
the
guess the meat
It is
officials who
understand
problems of business, and of
packers just went into the wrong
businessmen
problems of government.
It is a
job—in short—for men who have
Business
once
business,
thing he does is
a
vice
year,
It
unhappy fact is that
man
fix
to
ing
com¬
"we
says,
in
a
and
cops
into
go
new
put him in jail if he didn't. Next
Is
Wrong"
a
he
or
tighten
business first."
Unfortunately, they
true words.
The
1932,"
spired
Mr.
*
a
To
final
It takes
way:
presser
"Then
strong
are
from
To
of the
part
gentlemen
each other."
all.
a
our
complete
redefinition
business conduct
one
playing
that
governing
prices
have
name,
produce,
mys¬
laws
'f
a
government
is that any new busi¬
are
in
businessmaT
need is not
we
will utter
The only
today.
me
that
about
of the laws,
who
are
reluctant to rush in and start
the
selves against the
certain
people
..
submit
sentence from Lowell
Mason: "The
Comintern loves it when
the men
of America who
govern, pit them¬
he does, he's sunk.
1
point
theorists in
Washington'
hear a great deal
lawful
Congressman
ever
mprolv
the
loopholes?
quote
their
Senator O'Mahoney
Celler. What¬
and
frequently.
such
of
get an "invitation"—or a sub¬
poena—from
0r
merely
them, but
anti-trust
is almost
don!
belabor
with
we
What
concerned, and in addi¬
that
to
the
as
unlocks the
heaven's
what
and his
raise
and
changed
any¬
We don't
tell
that.
us
know it from
our
own
is
that
Discouraged
wonder,
a
tion
businessman gets discour¬
these days when not even
lawyer
end
is
But
can
up?
..
that's
not
If
end
of
example:
a
the
rights of'
devo¬
realistic
of America.
informed
and
government will ever sit
experi¬
and make
busniess
of
men
their collective mind
up
the
common
the welfare
of
enced
his
Let's
take troubles either. In
1941, in the
competition, for Rigid Conduit Case, the Federal
Trade Commission's staff came
up
of
understand
down with reasonable and
v.;-'<V'-;
the
other, and
to
men
figure out which
who
mutual respect for the
each
gentlemen,
a
aged
his
Gets
any
experience.
question
as
to what
monopoly really is, what competi¬
tion is, what business conduct is
ethical and proper, and what busi¬
with a wonderful new
a
practical businessman
theory. It
ness
conduct
is
injurious and
stripped of a lot of legalistic decided that it didn't even have
gobbledygook — competition is a to go to the trouble of finding a wrong, I think we will find fewer
monkey-wrenches in the machin¬
very simple thing. It exists when businessman guilty of any trans¬
ery, and the government will be
two or more companies are
trying gression of the law. His personal able
to get out of the crutch busi¬
to
sell
similar
guilt—or lack of
—
and
products
customer.
same
businessman
of
to
the
it—didn't
the
when
But
today
tries
to
compete in the open market, what
happens?
ter.
If
there
the
Commission
was
a
social
mat¬
felt
volved, it could issue
against him anyway.
an
ness
that
danger
in short order.
need then have
in¬
no
I believe we
fears about our
economic system.
It will continue
—as it has for these past 330 years
order
—to provide us with the jobs we
Lowell
If
his product is of
Mason,
in
a
recent need and
approxi¬
the abundance of goods
mately the same quality as that of speech before the American Steel and services that has made Amer¬
Warehouse Association in
his competitor, if each
Texas, ica the wealthiest, happiest, ana
competitor
provides the same service, and if pointed out that this interesting most secure nation in the world.
theory of justice—whereby a man
both enjoy
equally good reputa¬
But all this is not just going to
could be penalized
tions for
without being
dependability and in¬
happen of its own accord.
It is
found guilty of
tegrity, it is perfectly obvious that
anything — was not
going to happen at all unless
introduced in Russia
both are going to have to
offer
by Com¬ we do something about it.
AS
missar Krylenko.
their wares at the same
price in
4
order to
"It
keep in the running.
if
both
to be evidence
violation
quote
the
same
of
of collusion
the
Sherman
and
a
Anti-
So
our
businessman
cuts
his
price, tries to undersell his com¬
petitor, and thinks he's staying
safely
on
the
right
Sherman Act. Don't
my
is
not
clear," he
says,
"whether the Federal
Trade Com¬
mission got the idea
from Kry¬
lenko, or whether Krylenko got
In
friends,
side
ever
because
of
the
try that,
then
you're
in real trouble under the Robinson-Patman Act. Look what
hap¬
so
and
at
when
to
Minneapolis-Honeywell,
Standard
Oil
of
Indiana
they tried to cut their prices
pride in this
in this hisi°jr
State—in Faneuil Hall, the cradle
Americans
historic
of
our
we
city
take
and
precious liberties, and li¬
which was for¬
any
Commission."
the Bill of Rights
ever to protect us
event,
it from the
Krylenko
pened to
forcibly directed
tion
far
so
are
The
Trust Law.
dissenting 1 opinion
started
laws
that
of laws, many
unintelligible, un¬
In
prices too, he can stay in business,
but
he's right
back where he
But
Supreme Court Justice Burton in
that
lead
his
puts it this
enforceable
of
price,
crazyquilt system
are
today,
competitors don't, he goes out of
business. If
his competitors
do
follow
not
ing
his
raises
he
story.
price, that fact alone is construed
out
If
and
which
that,
»
care
"tightening the loopholes" in
anti-monopoly legislation.
and demand.
being
preposterous
a
and
From our
it.
against
memZ
office.
not
T
I
o
would"
violating the
t
something wrong with the
law
except the law of supply
course,
black¬
is
even
you to take
word for it. I refer you to a
quotation cited by United States
Cement Case. There it
law
no
to raise
is
do
to
petition
But
Again I do not ask
his
There's
nesses
,
him
for
field
guilty
law, then theie
and he can't leave
where it is; so the only thing
it
m
illegal
every
businessman
America can be
found
safely,
price
be
when
his
lower
can't
He
own
i95a
painstaking '
even
shaH
rt.her
further,
Anti-
Sherman
the
Law.
tery to
says:
harassed,
be
Nation's
To
"
is
and
Alcatraz.
or
Most of
says:
"We
big
going to have to be
Hunter
my
find
it
offenders
Emerson which is carved in large
letters on the side of the new
preme
We shall certainly find tax laws
of law—and if we
impartially against all
virtually every busi¬
system
a
Trust
left
that if we persist in that kind
enforce
some¬
of
fact, the present judi¬
monopoly laws reminds
what
just
and
members
Congress, but in the Courts, and
Laws
the
States,
the
attitude
cial
misplaced monkey-wrench in the
•n-
;:y/y **■
anywhere else knows what the
or
law
helluva
of
attempting
:
other
it is my professional
opinion that
we will do well to look for that
that
to
words, gentlemen,, no¬
body in business, in government,
.
but
of
officials
to enforce it."
slight experience with this
great industrial machine of ours,
that
lawful
pronounced
wishing to obey the law and
.some
to find several
con¬
the Courts. This situation is
embarrassing to
businessmen
risk
Or, why
are our people
unwilling to seek
tnore
of this capital and to set
themselves up in business?
As
a
business
at different
Why
to
what
be
about it. In
More
tiere
will
duct
Court
of the Nation's great
investment capital.
turing
of
one
determine
criminals.
as
I
25
practice
to
newcomer in the
before he
Act, and if he obeys the RobinsonPatman Act he is almost sure to
violating
held
course, do wellv to
this - list
with
brought
be
business
of
the company
of
the
in
Department of Justice. He said:
in the
of
comment
a
the possibility of being
Gentlemen, I don't have to tell
to take my word for that. I
written
to
us
classed
regarded
not
am
lawyer and I'm not going to
you
perfectly law-abiding
were
suddenly con¬
—
fronted by
to¬
ing them all is just to go broke.
enjoying a relatively high
of prosperity—then, some¬
where, there is a monkey-wrench
machinery. And since all of
manner
a
Atlanta, Sing Sing, Leavenworth,
have
we
books
reconciled
businessman
are
peak
affairs in
is
of
hodge-podge
"anti-trust"
been
each
statute
complete
a
have
But
the
over
100,000 American businesses—men
had been conducting their
ness
Yes, the truth is that
so-called
grown. Of course, there have
po¬
a
Anti-Trust Laws
300
Nation has
our
becomes
Complete Hodge-Podge
for
as
business nowadays,
tential jailbird.
All
day
people
establishes
than
more
who
minute
the
that
automatically
.system has provided employment
our
fact
successfully
man
any
his
than
more
the
system—is the amazing but
recognize
must
we
that
most
to
heads of
the
that
was
judicial
in
tide
high
usurpation."*,
you
trouble.
the
the
even
newcomer
business, but the biggest
undeniable
won¬
in
America for
Certainly
the
help
President,
the
Jobs in
..
can't
certainly tend
single drawback to the effec¬
tive operation of our modern eco¬
has really probed down
program,
to
I
So
of
and
monkey-wrench of all—the great¬
be able to stand squarely on their
own
will
laws
est
will
businesses
these
when
that
other
discourage
field
the
come
find
venturesome
Unless
affliction.
basic
shall
We
the
mark
present-day, sixty-cent green¬
our
money—of financial
subsidies. These are gov¬
of
terms
the Courts, it will
be outlawed by
Thursday, May
.
been
usurping of Congress. If this other things — of consistently
pricing system which Congress, underselling its competitors. And
one of the charges in the suit that
over the years, has steadfastly re¬
fused to declare illegal, is now to the
Department of Justice has
for
Our
.
different
The
competition.
their
meet
to
A
.
tyrannies of thoughtless
he
has
observes,
since been liqui¬
dated; but the American authors
of the same
philosophy within
the
Commission have not.
These, then, are a few of the
hurdles that confront
the intrepid
soul who would
venture into the
business world
today-—but
they
ferent government.
I
think
can
of
no
more
appro¬
priate
surroundings
which to dedicate ourselves he
and
now
from
the
is
the
task
of winni
one
unjustly denied to evfiry
only
a
few. A
compilation of
nessman
the
orders
already issued by the
man
go
to
in
»
Congress at Washing
remaining right that too*
our
are
Federal Trade
Commission shows
that there are
more
than 2,200
from the petty
and indi -
nu
and to ev
America who may wis
in America
into business.
That is the right to
be
right.
^
Number 4910
171
Volume
The Commercial
.. .
and Financial Chronicle
(2175)
Continued from page 5
that can be
expected to accrue
from growth
equities, or from is¬
sues
In Defense of Foimnla Hans
i
Jarred by
?L dollar,
I
ment
On
the
other
han$,:
should
at 10%.
appreciation and would
/
:
power.
Obviously
;
however, with
sufficient flexibility to provide
necessary inflation protection. For
example, such a plan was worked
out by a New England group a
few years ago. Discussed at length
by Garfield A. Drew in his (1948)
book, "New Methods for Profit in
the Stock Market," this invest-
operations
ducted mostly
in
where
25%
equal
prices, but
for stock
of
two
employs
the
By OWEN ELY
Electric Bond & Share Co.
Electric Bond and
for
the
while
zone
this
plan
appreciation
75%
a
,
of
thus
have secured
a
$40
ciation of
Now the purchase scale must
be
Let it be < assumed
that the first market
purchase re*
suited in 16 shares
bought at .60.
tiized
precepts for successful inresults: (1) Let profits
and (2) never let a fair profit
an
received
to
used
stocks
mediums
as
for
I
carefully selected
are
re-
J,®S8 26%
basis of certain criteria.
mediums
are
With
the
on
not
are
subject to erratic market fluctuations.
Dividend
more
geared to needs of the individual
instead
of
declining,
scale-up
buying
is
em¬
ployed; scale-up buying - orders
are placed at 60% of the
dowfiMe
.
The first
Therefore,
buy
stop"
New England
^
high" and the "expectable possible low" for the stock
to be used.
the
proportions.
extreme
^2
These may be defined
extreme
prices which
stock might be
expected to
in bull or bear markets
of
points,
60%
of
which
is
ap-
on stop,
meaning
that it
becomes an order to -buy at the
market when and if; that price is
reached.
is
higher
Clearly,
these
or
the
will
be
one
orders
sooner or
than the last
major bot-
ponversely,
lower
the
in
owntrend
in
m
tne
labor,
of
later.
further decline.
wp
Govern
Nothing
12%%
is
done
XI.
gafn occlfs
zones
the
"possible
r£r dsuFeiationshiP
tyciicai
a
The up-
rise,
a
ls then designated
u
here
until
meantag
above-normal price
'UMower sixth
as
and
below-normal,
kware-a between the
Sra,?one
zone.
If
+u
area
over
a
sfart
oeiow-normal
a start
a
in
were
made in the
zone,
the
initial
being
as
m the foregoing
J"ade when
inno/1" .^ban
0%
taken
an-
gainam^ie from 60
the
price
was
"possible low,"
invested position
at
even
once.
If
a
would
start
a
the distance
from, cost
next
scale-up point
latter is reached.
be
to
$8.1 million
amounts purchased
on a
The
preferred stock is
—est.
iK^f,n ai"e reversed, Le., 10%
f°^ow^ by 20%;.'30%
orally 40%
in-
and
^jienever
vertible at any time prior to
Less
...
on
10.06
$30.29
2.35
$27.94
times
5
forma
„
on
required
pay¬
preferred stocks stubs.
If Electric Bond and Share is forced to
distribute United Gas
this will about cut the market price in half—in
other
stock
words, the
stock would then sell around 10 with net
assets estimated at about
18-20, depending on the amount of any payment against the pre¬
ferred stubs (this question is also before
the
at
sion). When the three
factor)
and
the
construction
of
its
widPiv
diVprsified
There are other losses
ably be realized
of
M.
.
in a securities
some
used up it
small amounts of
It is estimated that with United Gas retained and
' J. B.
of
Co.
Midwest Exch. Members
business.
Gundel & Co., Inc., is enin
a
securities business
at, 209 Vf*
Street, New York City.
E. D.
Jones, Jr.
on
.
Glindel & Co.
from, offices
flow
Foreign Power (after recapitalization) the com¬
might be able to pay, within a relatively short time, $1 or
more a share, which (based on the recent
price around 20) would
afford a yield of about 5% on a tax-free basis. In 1949
the dividend
(in Middle South Utilities stock) had a value of about 50^ a share.
In the past three years the value of
dividends, plus rights offered
to stockholders, aggregated more than $3.50
per shqre at the time
received by stockholders.
pany
CHICAGO,
111.—The
Executive
Committee of the Midwest Stock
J*
some
of dividends from
Munro
Gere
,
ar
miscellaneous holdings which can prob¬
sold from time to time. When miscel¬
are
for some years.
linp
Y.—H.
on
these
would, of course, be necessary to
Foreign Power stock in order to con¬
tinue tax-free dividend payments, but this could
probably be done
sell
H. M. Gere Co.
H.
as
laneous tax losses
other allied products.
N.
than the
rities. Even after the
recap plan of Foreign Power is consum¬
mated, it is understood that these losses will continue on the books.
of a Wldely diversified line of
has formed
accurate analysis of net asset value
stock may have some interest for
wealthy
of the possible future tax-free dividends.
The
has potential tax losses on its books said to approximate
$200 million, largely from its big holdings in Forejgn Power secu¬
chemical, pharmaceutical and
SYRACUSE,
more
company
sail
,
much
In any event the
subsidi-
and
a
investors because
lonitrile and other chemicals.
and
the SEC awaiting deci¬
by the SEC—the United
above.
capacity for manufacturing oil cracking catalysts, acrycomDanv
to be decided
distribution, treatment of the stubs and the recapitalization
Foreign Power—are decided, it will, of course, be possible to
make
additional
Th
cases
Gas
'p"rg°tses' including capital exP.^tures for new plants and fa-
to engage
plan to mdltdply and
at the
possible low. compound the capital Appreciation
for possible
reserve
ment
Proceeds from the sale will be
available for general corporate
—
....
1.54
par
stock
Total
with offices at 205 Harrison Street
W1
_
this
16, based
(preliminary)
pro
earnings of $3.20 a share
July
common
the
By thus taking advanhige of the
with
value
new common
1949
con-
new
Gere
More Capital Growffi from
scalp-
8.1
12.3
Deb., valued at
new
3.3 million shares
common
-u
were
1.92
se¬
curities, which under the old recap
plan would be exchangeable for—
share for
of
the
Growth
n
one
shares
the point of rnXture^purS
Should
(to 67%) the stopupjder is moved
to 60. Similarly, on another 12%%
gain from 67% (Tb;$6>;if would be
of
10.0
52.8
American & Foreign Power—various
that and production of
pharmaceutical
products (including extensions to
ommitment is 40%, followed
by moved up to 67J/?. sgft£L,S.O. on until
or scale-down purchases an execution took place. Scalelinrv
' 20 % and 10
In the very up Purchases are pmtected at 40%
unlikely chance of a start
fin
Aa
"12%% gain from'average cost, its piants for the
production of
stop-loss sell o$£er shall be enaureomycin and animal protein
other 12%%
or
are
6.77
100 investment firms headed
^al^~uP
me
^
purchases show
33 ** the averaf
a®!
were made 12%% gain, cost56%.
or
35.5
1—'.
by White, Weld & Co.
upper and .stop is entered half-way between
the middle
zone, scale-up
caJe-down purchases of
25%
used. If
selling" pfbvide
the price rises,
$10.00
$158.8
loan
conversion price of $72 per share
common stock,
taking the preat $100 per share,
example, when tljp price rises to
60, thus showing a 12%% gain, a
profit protecting Order to sell on
as
$52.4
Ebasco Services—Earns about $2 million
—value estimated at 5 times
earnings
In that ferred stock
between tered and progressively raised
range
possible high" and the
"pos-
a n
for
when scaleTdown
to previous
highs and lows.
of the
Rules
calculated
are
Per Share
(5,250,000 shs.)
Gas—2,871,000 shares at I8V4-—Cash and Miscellaneous Stocks at recent
market prices less $3.9 million bank
of record on
May 16,
subscription rights will
expire at 3 p.m. (EDT) June 2,
1950. The offering is
being underwritten by a nationwide group of
l, i960 into
.
rmines
«>w,, three
Share
Millions
'
' ' ifie
t
etev*
crlities. Among projects now conthe -same median~, templated are further expansion
wbJcb> .adjusted; to other inS P0?$tpf ,§0.
0f facilities for the development
•
and
The
char?,
to
of
*
i
of Dollars
?.yi?g
«S1X
It would also utilize Ebasco Services
to assist it in sup¬
The approximate net asset value of Electric
Bond
is estimated as follows:
held
accc^on the
■
Employed
at the rate
1950.
J.
But the price may
event a profit
Amounts of Unit Purchases
in
a
Services.
plying venture capital in special situations,
share for 498,849 shares
0f 3y2%
cumulative convertible
preferred
stock,
series
B
(par
stock
Clinching Profits
A recalcu-
'
ih
ine
Electric Bond does not plan to dissolve but
has filed with SEC
plan to permit it to continue in business as a
special investment
company, with a pool of venture capital from sale of
miscellaneous
holdings of about $25 million. It would retain whatever it receives
in a recapped
Foreign Power, its United Gas interest and Ebasco
per
executed
riin«hsn;
computed-
is
manner.
$h)2
to
'
nninf
Electric Bond and Share in recent
years has also been building
$146.5
uiiuiuiu
seven
Let it be assumed
stock.
made at the end of each
Zones Are
ii£
new
a
American Cyanamid Co. is offering to the holders of its com¬
mon stock rights to subscribe at
otherr-^ofJ^ch
buy 26 shades at 38%
(20% below 48),.:to take,.care o^ a
secular
a
developing in the
same
tered
it would become
event
possi6Ie high
is
was
United
•
determined by the
relationship of that the price declines, giving the
previous cyclical low
points to fund 20 shares at 48 in addition
that line.
Hence, if the stock being to the original 16 at 60. The
buyused is
definitely in a long-term stop order at 67 y4 is now canuptrend, the "possible low" would celled, and another order is en-
be
grow but
approved sometime ago but
plan is now in preparation and
plan
a huge construction and
company, extending its operations far outside the
utility
industry both at home and abroad. Ebasco now earns about
$2,000,000 and has a huge
backlog of orders.
Underwritten by Over
100 Investment Firms
ah order to
also Centered
^
at 67 A
reach
median line
a
is
proximately 7% points. Hence,
ordfr *?,to buy 14 fbar^a
major
determine these
To
prices,
"on
tbe
the
first calculated, by a
moving average of ten years of
price fluctuations. The "possible low" is
then
torn.
A
Amer. Cyanamid Stk.
above the market at 60% of the
downside interval. The^latter was
_
possible
as
a recap
service
rise
interval.
step in the operation
Plan is the
determination of the "expectable
of the
streamlining;
Thus,
How the Plan Operates
v
considered
its 100%-owned Ebasco Services into
up
,
may
being
United States it need not be
dissolved.
stoc^ at lower prices,
ruJ:; a?
same time, affords the
amount of dollars.
It is recog- inflation
protection which connized, however, that ,the price vcntional formula plans lack,
investor.
now
be presented to the SEC this summer;
assuming that this does
materially from the old plan, it will leave EBS with
majority control, and since Foreign Power operates outside the
more
shares willhave begn .bought-8aares
at the lower price for the same
is
not differ too
height,
aJPount °f money will buy
paying stocks in
chip" class are generally
used.
As the plan is applied to
individual stocks, it is particularly
the "blue
question
may
13 38%; 38% less 20% island it is not subject to the criti/ vv J:;;h cisms which have been aimed at
Therefore, after the initial pur- f®r^P.ula
plans generally. This
chase of 16 shares at
60, an ordefc* P*an retains the basic formula
is entered to buy 20 shares at 48. Plan
principle
that
the
same
If the price drops to that
point,
The best
issues which
the
and
failed of consummation.
The
the
distributed
dispose of these by February, 1951. Thus
only the American &
Foreign Power holdings remain of the former Electric Bond
utility
holding company system. Foreign Power continues to
times
I employment of the New England 3U^).
Plan
this
needs
any
a
The company also owns
approximately 6 to 8% of the common
stocks distributed by American, The
company is under order to
~
The Formula Principle
&
by the SEC.
Elation Protection Added
"possible low" has been caW,.
Through the use of profit-prorun
culated to be 30%.
A table of tecting
stop-loss orders and probecome a loss.
logarithms shows that if purchases visions
for scale-up
buying, the
The New England Plan differs ?re made at 20% down intervals New England Plan
is geared to
from conventional formula plans [rom 60, the fourth purchase will cope with a rise in the
Dow-Jones
in a number
of
respects.
The fe aL3J?°4 (60, less 20% 18 ^ 48-Industrial Average to
vestment
Power
Light dissolution Electric Bond
27% interest in United Gas, which the
company hopes
However, certain stockholder interests are anxious to
retain.
have
appre-
nine
over
"super" holding
a
.
Out of the Electric
i
SUH
it determined.
recog-
116%,
better than his
buy-and-hold
was
National Power & Light and American &
Foreign Power.
Amer¬
ican Gas and Electric
was, of course, only partially controlled and
later became a
separate system "on its own." Electric Power &
Light was dissolved last year and American distributed
the greater
part of its holdings early this
year; National is only a shell awaiting
distribution of remaining small assets.
investor,
enabled
time
one
Light,
apTreciatton
buy-and-hold
Share at
company with five great systems under its
control—American Gas
and Electric, American Power
& Light, Electric Power &
increasing the
The first tangible step
buy-and-hold appreciation fivein plan operation, therefore, is to fold.
Over the dozen years
ending
purchase at the market the num- Dec.
31, 1949, the buy-and-hold
ber of shares allowed--by one- investor in
General Motors comfourth of the fund allocated to mon stock saw his
investment apoperations in that particular issue, preciate
12.7%. Had the buy-andIf the fund is $4,000, then $1,000 hold
investor applied this plan to
is used to buy the shares this
General Motors over this
period
amount allows, such as 20 shares he would
permanently higher price
plateau
also
'
commitments
England Plan. This plan is comprehensive in that it not only..,em— of a $50 stock, 25 shares
ploys sufficient flexibility to cope stock, etc.
Utility Securities
appreciation and,
+
are used.
ment method is known as the New
a
Public
can
w+uPr?gra™' F°r example, durinfhmu £? °
40 S' West"
con-
the normal
plan
vL hJrpa+f1* 1 aPPreciation
Daredwith
cimhi££
C°T
hold^ nSam Tn a bay~and~
V'
are
the
can
.
There are plans,
markets
hvtU?/ly achieve
-the
of purchasing Delegation of Purchase Scales
After a serious loss
with
declining
it is true that invest-
formula plans would accrue
jHtle
t
600,
to
lacking growth, for that mat¬
Indeed, in certain types of
ter.
inflation and fear of price rise even higher, all purchase units under the
scale-up
accounts based on conven- purchase provisions would remain
S
S.
rise
to
day
some
,ore
27
Trip
Edward D. Jones, Jr., who rep¬
resents Edward t). Jones &
Co.,
Exchange has elected to member¬
300 North Fourth
ship
Mo.,
in
dani
for
&
V. Butler of F. M. Crump
Co., Memphis, Tepp., apd WU-
liajn
Martin pf W- F?
Inc., Elkhart, Ind.
Martip,
Street, St. Louis,
and Illinois, i$
sailing May 29 on the S.
Volenin
Missouri
a
two-months'
vacation
France, Switzerland, Spain §nd
28
The Commercial
(2176)
Continued from first page
As
1
Without commitment
would,
as
1
thoughtful citizen
to detail the
for
of
"Finally,
appearance.
that it commands either the
support or the
admiration of influential elements within the
assurance
party. Of
corresponding division (or should we say
•divisions) within the Democratic party, but a President in
office with strong popular support such as that shown
by
Mr. Truman in 1948 can in
large measure dictate broad
party campaign strategy—even if much of it is not in full
accord with the personal record or beliefs of
prominent
there is
course,
a
But the Senator also says:
[the Republican Party] will not hesitate to use the
power of government to prevent the abuses and excesses
of a laissez-faire economic system, to protect a proper mini¬
officeholders.
Much of all this
well illustrated last week when
was
Senator Taft undertook
mum
farm prices in the market place, that
will maintain agricultural
purchasing power in reasonable
relation to other groups in the
population, and prevent any
destruction of that
purchasing power which could bring
about another depression.3'
reply to some of the things that
saying across the country. Senator
Taft is one of the ablest men in the
Congress of the United
States. Along with less than a half dozen others he could
t>e said to be the very ablest of the lot. His views
carry
4*reat weight among large elements within his party.
a
the President had been
While
shall be
we
obliged in the
course
If these ideas
last week, we bluntly that we should
welcome many, many more like him in both the Senate
and the House of Representatives, and to add
very em¬
phatically that we should be deeply disappointed if any
of his opponents in his State of Ohio should succeed in
plans, which
those of the Senator.
are
We
definitely not consistent with
unable to find much support
for the idea in the record, but it is nonetheless a fact that
the Senator is rather
widely believed to be a sort of
for what
we
We
are
popularly termed the "reactionaries"
or the "mossbacks"
in the
party. There are accordingly
those, some of them in Congress, who by reason of possible
misunderstandings "back home" are not over-eager to
have themselves regarded as close followers or associates
of Senator Taft. For our
part, we should find most of them
do not understand what the
hope
time
as
be resolved in
than
more
passing interest. They are more rather
than less important
by reason of the fact that they illus¬
trate at points the weakness of the
opposition even when
the
opposing views are from the brain and the lips of
.Senator Taft.
dress
during the tour which the Chief Executive
concluded.
dent
gent,
larger part of the Senator's ad¬
devoted to demolition of the President's
argu¬
was
ments
Much the
was
Here the Senator had
wide open, as
well-informed
Senator is
a
they
no
say, at
citizens
:
least
policies?
sentences
not
so
far
judges,
as
wartime
scales
peacetime
of
taxation
The
are
answers
found
in
and
the
of
the
certainly heartening—or would be if
one
did
study other sections of the address. One could scarcely
ask for
more
heartening promises than these:
"A
Republican Congress will return to the principles of
thrift and sound fiscal policy on which this nation was
built up.
That's the best method of providing a foundation
which
ment
in
business to
for
the
of from
can
700,000 to 1,000,000
incentive, and create
j the channels through which the earnings of all income
adequate military
maintain
invest¬
an
one
taxes
could
we
the
over
cial ruin to
nation
we can
can¬
be sure,
to
were
reduce
ahead
years
be assured of
we
we
now
standard of
scale
the
that
the
only
it
eco¬
to
provide
serious
insurance
business
against
relapse
a
and
to
give
assurance of a period of great
business expansion is tax reduc¬
No other device can lower
tion.
costs and
prices enough to widen
markets, free a wider margin
our
of
income
consumer
for
enlarging consumption
both
in
use
and
stim¬
saving and productive
investment
in
new
or
expanded
enterprise.
The need for lower taxes
is
un¬
accomplish, the measures neces¬
should not be impossible of
sary
attainment.
Obviously
we can
no
longer af¬
by putting into effect the
of
the
recom¬
Hoover
Com¬
Moreover, it should
be
equally clear that all new spend¬
ing programs by the Federal Gov¬
ernment should
be deferred until
the level of
expenditures required
cold—but
a
can
Even
there
is
very
be reduced
in
protection
in
in
to
-V'
addition
three
in which it would be
make
substantial
revenue
might
unconventional
first
at
as
it
appear;
it would
fact, be in line with the
com'
mon
practice of states and
other
political bodies in
issuing secure
long-range invest¬
revenue-producing proi,
need not be
inflationary
ties to finance
ment
or
ects.
It
if the Federal
to
were
hold
the
on
that
be
Reserve
authorities
a
tight enough rein
position so
organizations
seekin®
bank
the
in
reserve
the
open
market would
forced
to price them
so that
they would be attractive to
non-
bank
investors.
Such
measures
mately
to
those listed]
as
above would enable
Congress ulti¬
bring the tax load
to.
considerably less constrictive
lev¬
els. And—as proved to be
the case¬
in the decade of the
'20s—the-
stimulative effect
of tax
reduction
might turn out to be so great as;
to produce higher dollar
totals of:
at
revenue
we are
the
lower
rates thai*
likely to obtain if
not reduced.
are
tax rates
r
"Let the People Do It Themselves'*
would
be
(1) By allowing budgeted out¬
lays in the Foreign Aid and the
Veteran's
Education Programs to
according
to
original
schedules, total expenditures
off
run
would
be
gradually reduced
point $6-7 billion per
to
annum
a
less
than at present.
(2) A drain
load, the out¬
much
more
pro¬
on
the U. S. Treas¬
could
the
be
billion
avoided
by
a
outlays of Federal loan
cies
to
more
conservative
requiring them
as
to
agen¬
limits
raise such
are
obligations
Federal
year
restricting
necessary to their
by sale of their own
—
guaranteed
Government—in
market.
by
the
the open
(3)
Substantial charges to the
budget could be elimi¬
by deferring public works
projects until periods of
slack
Federal
expensive—
materially.
this
fabulous
country
reason
to doubt
that
we
vate
pri-
business,
of them
revenue
having
by
placing
more
(when
undertaken) on a
producing basis and by
these
managed
and
nanced
raise
fi¬
by agencies which
would
the
necessary funds through
deficit funds into
to
privately
organized, financed,
managed organizations the.'
powers they would need to handle-
and
such
operations
more
outside the
tal" to
develop new technological!
advances, for credit or capital for
small businesses, for
agriculture,,
for foreign investment, for mort¬
gage investment, for rural electri¬
fication, for river valley, and for'
highway or airport development,,
should
they
drafts on the
The result would
ments11 annUal revenue
The
require-
placing of Federal loan
public works
agencies
on
a
and
self-
supplied
be
not
by;
privately organized, managed and:
financed organizations in which;
private investors and investment:
institutions could pool their re¬
share the risks in such;
sources and
enterprises?
Many of the governmental agen¬
presently engaged in such
cies
activities
are
managed in a busi¬
cannot:
but that
manner,
be said of all of them.
The essen¬
tial point,
however, is that if their'
functions
were
vate
assumed
pri¬
by
organizations,
the revenue'
requirements of the Federal Gov¬
enough*
ernment would be reduced
so
as
to
permit
absolutely es¬
an
sential reduction in taxes.
Private
management of suchr
undertakings would be in keepingwith our traditions, for since early
colonial days our people and their
institutions have joined their re¬
sources
of
energy
and.
projects'
and funds
talent for socially worthy
and for socially desirable
phnan-
thropies without taint of political
other interest.
or
A
"let
selves"
the
people do
attitude
mination by our
Treasury.
efficiently
If large amounts of funds are,,
in fact, needed for "venture capi¬
ttC S.
om^tead
U.
reduction of from
$3-4 bil-
be done-
may
arid
government.
Congress,
a
as
effectively
sale of their
securities to the pub-
be
a com¬
of
politically ad¬
ministered loaning and investing;
organizations, to which are grantedl
powers denied to private enter¬
prise, and were instead to grant,
nesslike
of about $2-3
ury
or
network
re¬
requirements
nated
ford to forego the several
hundred
million dollars of
economies per
annum
which could be realized
mission.
social
are
operations
And while
our
highest
living and the highest
areas
funds
Reduced
the
in the next few
years:
and
Taxes Can Be
mendations
major
this
;v:::
ductions in
There
that
welfare, since
world.
possible
be
clear
have
of
living.
well
is
social
long period
of expansion,
prosperity, full em¬
ployment and a rising standard of
nomic stimulant powerful
enough
it
forego further adven¬
tures in
a
Con¬
on
attempt to do all these
And
can
citizens
real
extravagances
urged
It would be courting finan¬
gress.
things.
thing
If
socialistic
have been
We may find
present scale of taxation,
however.
by
on
Of
not.
incre¬
the
on
enduring prosperity
have
our
provide
annual
labor force.
our
we
for
jobs
new
war
to reduce taxes
support
establishment,
which
the
tax system
can
incentive
the economic machine can be
kept running at a
high rate of speed with full employment. It will readjust
«on
>
arrangement, moreover
as
in
plex
ment in new enterprise at indi¬
spensably high levels and embark
tax reduction will not be
easy to
Senator's
an
not
ceipts
drying up the sources of funds
without which business expansion
is limited, and of deadening the
mistakably imperative.
replace the Truman
some
into
running the risk
we are
of
intelli¬
keen, intelligent and formidable debater.
But with what would the Senator
J
just
is
!
out
could" be induced to stop
setting,
up and pouring billions of tax re¬
Unfavorable Contingencies
In the Business Ontlook
ulate
difficulty. The Presi¬
the
are
had
Such
;
ea
additional
:■
pitious if the Federal Government,
may
outstanding ability of the Senator and his influ¬
do, however, render his recent thrusts at the Presi¬
lays.
an!!
used onlvt*
burden-not X
duction in the tax
,
The
tax
to funds for
access
look
Under the present conditions
His Words Important
,
the
iead
and, in
be
While a
change in financing:
techniques would facilitate a re¬
;
V:';'"
with
ence
and
men
women.
but the risk is great that
more
worthy of admiration if they exhibited more
independence of mind and general intelligence char¬
acteristic of the Senator from Ohio.
The point we are
making, however, has for the moment nothing to do with
such questions. It is
merely that the Senator clearly does
not speak with
authority for his party or for a clear ma¬
jority of his party.
dent of
satisfactory to thoughtful
way
of the
"
these apparent contradictions will
passes
a
much
•j
ably championed, then
gentleman is trying to say.
so
are
spokes¬
man
of the rest which the Senator
the fact
is, as all informed citizens know,
there are important elements in the
Republican party
which are not ready to follow Senator Taft—at least not
at present—and indeed who have ideas
and, in some in¬
stances
are
Continued from page 4
unseating him this autumn.
course
wholly free of Fair Deal notions, or
fully consistent with "sound fiscal policy" and much
are
of this discussion
to find certain faults in what he had to
say
are more than
glad to assert quite
But of
wage, to protect
could-^h,!?
—
provide the government
with
funds
"It
operation
it should
reduce
a
It
necessarily
in
event,
Republican Congress will be interested, as
every man concerned in government must be interested,
in promoting better education, better health, better hous¬
ing, better security for our people, and better equality of
opportunity for our children. The Federal Government
can aid by research and education.
It can give financicil
assistance where it is absolutely necessary, and where it
can be done without destroying incentive or placing too
great a drain on the Treasury. We believe that hardship
and poverty can be eliminated in America without extend¬
ing government welfare service and regimentation to the
entire population, for such universal free service can
bankrupt the government while it destroys the freedom
and the character of the peple to whom it is extended "
It is, perhaps, more or
less inevitable in the
existing circumstances that this be
true. Our system does not
normally, or at all events not
necessarily, give rise to an opposition leader such as Mr.
Churchill in England. Our general
system is not conducive
to a closely knit, fully responsible
party system, such as
is found in Britain. The Republican National Committee,
which might be expected to function in some such
fashion,
actually does not do so. Indeed there is an evident lack
an
reduction.
not
abuses
sentences:
party has put in
tax
need
following
believe, be inclined to applaud the
we
Thursday, May
25,19^
..,
which
the productive enterprises
groups may flow into
alone can make jobs."
We See It
and Financial Chronicle
on
coupled
it them¬
part
the
with a
citizensLto
themselves" will help us to
maintain
our
economic
freedom,
our
economic
strength and
viate the crushing
ation.
---
burden of
'
of
deter¬
"do it
retain
alle¬
tax-
171 ./Number 4910.
Volume
.* The Commercial
and Financial Chronicle
Continuedfrom page 6
opinion that this is a definite
trend of the times and that steps
my
must be taken to meet the
com¬
petition. Some help in this direc¬
tion is available from
ent
New
Philosophy of Tinslee Duties
from common stocks
♦hat income
to a degree that makes
generalization an impossibility,
fhere are many common stocks
that have paid regular dividends
for decades, while others have av¬
eraged good returns over a period
nf vears. In other words, it would
La relatively simple matter to
sit down and work out a portfolio
of perhaps 50 common stocks with
varies
uninterrupted dividend record
a quarter
of a century and
which would be so diversified as.
to represent a fairly good crosssection of American industry. It
would also
be of more than
passing interest to trace the pat¬
tern of income distribution on
stocks of such relatively mature
and conservative companies as for
instance
American Can, Union
arbide, duPont, F. W. Woolworth,
etc. For example, we would find
hat in the case of American Can,
an
of
back in the
would now be the
quivalent of 4V2 shares, now payng $4 per share, or total dividend
istributions on an adjusted basis
f $18 per share. American Can
bought
share
ne
1920s
early
eached
low of around 21% in
a
he 1920-21
period.
In the case
of duPont, this stock;
multiplied roughly 28 times
ince 1926 so that with current
ividends at the rate of $3 an¬
as
nually, the 1926 buyer would now
be
1
receiving dividends at the rate
of $84
yearly on his original $360
investment
This is
made
or
more
a
24
years
ago.
less typical ex¬
ample of what we have in mind
when
we
talk
about
growth
stocks, and certainly the Chemical
Industry has all of the character¬
istics of
growth industry.
a
Diversification
essential
tection
and
industry
by
aimed
at
is
pro¬
in judgment
and unexpected turns in the de¬
velopment of industry. It is im¬
possible for even the most able
student
against
is
to
errors
pick out
certain in¬
banks
certain
ments
The "Blue Chip" Stocks
Common
stock
are
firms
Research
with
Depart¬
continually publishing
material which should be of great
value to the average trust officer.
indentures
investment
correspond¬
larger cities, and
investment
For small
y
in
fully f staffed
the
Republicans will call upon
television to bring them back into
the White House.
trusts, and where trust
permit
we
would
strongly recommend the
trust fund which banks in Penn¬
will
sylvania have operated with
to
as
undoubtedly be confined to
are
frequently referred
"blue chips." Of course, the
so
cess
over
common
a
suc¬
period of years. This
trust
fund
idea
how to
appears
buy and purchases
distribute a larger percentage «#
This ^earnings than was the case in the*
immediate postwar years when
expansion programs necessitated*
we would be inclined to continue
the retention of substantial fundswith them, unless these were basic for that
program. Thus with the
changes in that industry, or in the average yield on 200 stocks cmposition of the individual company rently estimated at roughly 6V4%,
made
on
a
were
long-term basis.
that having satisfied ourselves as to their, intrinsic merit
meant
within
t h a t
industry.
Subsequentiy when the market declined
^the Fall of 1946 we added ancarefully; selected
Q+nokc
stocks.
careful
constant
interim
and
supervision
review
added
we
to
have
the
the
in
common
stock
portfolio until today it represents 35% of the total fund.
say
a
"this is it!"
It is
,
compared with an average yield
of 2.58%
on
AAA rated bonds, ti
reasonable to expect a continuation of the demand for sound
seems
stocks
on
th&
part of trustees and institutional
investors
^
.
,.w
*s usually a good policy t&
.
ook for possible flaws in a pie-
Naturally there have been times ture which seems so favorable a&
chips is to be spreading rapidly in New
that over a period of time they York State as a result of more during these years when market Jke present time. Looking back,
inventory ' readjustment of
have met the tests of sound man¬ practicable legislation but Penn¬ quotations for many of the stocks '-theheld were below cost prices, but 1949 was mild and its duration,
agement and financial strength, sylvania continues to set the pace
this was relatively unimportant was cut short by the unsatiatcd
have given at least average mar¬ in this direction.
since the main objective, that of demand from the heavy induaket performance and the individ¬
increasing income with good qual- tries, such as motors, building
What About Stock Prices?
ual
companies aye regarded as
ity stocks, was being realized. As electrical
equipment, pipe-lines*
Now to the $64 question, "What
among the leaders in their respec¬
a matter of fact, it is
interesting to and steel. Due in part to strikes*
tive fields. Gambles would
not would you do with common stock note that
today the 35% invested there are still some shortages in
be justified nor could they be monfey at these market levels?" in
common
stocks
is
currently heavy industries but these ar©
As a result of a practically un¬
explained.
producing considerably more in- rapidly
being
satisfied.
Otheir
11-months
advance, come for the fund than the 65% problems, which are stories by
Where emphasis is on principal interrupted
average industrial stock prices are in U. S. Government obligations,
themselves, include our declining
protection, but with better yields
at historically high levels—high¬ Since this is a
than can be obtained on highest
particularly good exports and increasing compete*
est in about 20 years. Certainly time to look at a common stock
tion in foreign markets; declining
grade bonds, consideration may
this fact in itself invites caution portfolio from a market standpoint farm income from
be given to bank and insurance
high levels
and a close study of each situa¬ it is also pleasant to record that
farm surpluses which
may be—
company stocks. Bank stocks are
tion.
Furthermore, every point the entire portfolio now represents come more unmanageable during?
accorded high investment stand¬
Not
advance
in
the
rrnn vpar
;
averages
from an increase in dollar value.
ing and dividend records over a
here means that we should be that only has the fund been able to
°
period of years, in good and bad
ke. f°reiSn situation is daily
much more conservative in our meet its demands without invadtimes,
have
been
satisfactory.
ing principal but the trustees have headline news. Continued ECA
While not a growth industry in approach. As a trustee yours is
been able to broaden their activi- spending, and perhaps later on aid
the strict sense of the word the not, and cannot be, the short-term
ties
beyond the scope of their for Southeastern Asia, and furIntermediate market
outlook on
the whole
is fair. viewpoint.
ther upward revision of defense
swings must be disregarded, I original expectation.
Average yields in the neighbor¬
expenditures seem to be reasonwould like to tell you of my ex¬
Cautious Approach Needed
hood of 4% coupled with relative
able
expectations. While taxcat
market stability would seem to perience with a fund with which
A lesson which might be drawn may not be increased in an elecI have been identified as financial
from
the
above
would
be
the tion year this might not be the*
qualify this group as a conserva¬
advisor for the past several years.
tive trust investment.
necessity of cautious approach in case in 1951 if the deficit conI
believe the
handling of this the matter of common stock
pur- tinues to widen. In view of al|;
Insurance
stocks, particularly fund and results obtained may
chases at these high market levels, of this we feel that selectivity it*
fire and casualty companies, com¬
serve to
bring out a number of Where income is of paramount of the utmost
importance and that,
mand good investment rating. Fi¬
basic points which definitely ap¬
importance, where money must be portfolios
should
be
well-baVnancial
strength, diversification ply to trust investing today.
put to work, it would seem that anced and ready for any possible*
and limited cyclical characteristics
This is a charitable fund which some Attempt should be made to surprises.
*
are
among
the - industry's out¬
during the war years accumulated average
costs_ over a
standing factors. Yields are satis¬
In conclusion, in those trusts*
some $15 million and which quite
factory, quality considered, and
nLpr tho Lw Ynrir inwc where the trustee is free fro»%
properly during that time was in¬
reason
these
are
blue
„
,
Period■ oj
increases
over
the
in
return
are
foreseen
intermediate term.
The
vested in U. S. Government bonds.
Current
returns
was
not
a
factor
mav
purchase
common
Stocks
up
important investment portfolios of and, of course, there was no tax as of July 1 does not necessarily
these companies provide in them¬
problem. The beneficiaries of this mean that on that date all trustees
selves a conservative general in¬ fund are deserving individuals in will immediately step
into the
High
on
Pletely^ fulfilled his obligations*
ke *Jas
satlsfied with
the
Hflng kls. ? efforts to conserve
*he principal value of the assets*
turned over to him. His invest-*
would
ment policy should be elastic sc.
vestment.
industries
legal or indenture restrictions, hi»
of the value of the fund
35%
to
temporary financial straits. At the
market
that
to
In
extent.
other
list of preferred end of the war the trustees were words, this is a permit and not a
probably
be confronted with various alterna¬ directive. < It also means that these
possible, on the other hand, to say public utilities with their record tives Demands on the fund were purchases would be made only in
with reasonable
assurance
that of stability of earnings and divi¬ increasing day-by-day while the such securities and under such
industries A, B and C have rela¬ dend distributions coupled with rate of return was fixed, and at a conditions as prudent men of distively better prospects today than, slow but steady growth. In this comparatively
low
rate.
There cretion and intelligence in such
industries X, Y and Z. Frequently, connection
individual selections were no investment restrictions matters, bent on securing a reait is posible to
pick out several should place emphasis on the na¬ but the nature of the trust and its sonable income and the preservaindustries and say that on the ture of the territory served and objectives precluded other than tion of their capital, would make
average they have good prospects the attitude of regulatory bodies conservative investment practice. for their personal funds.
of growth.'
in
the
area.
Consumer groups Should the trustees invade prin¬
Effect of Trust Buying of v
Naturally, the conservative ap¬ generally are, as a rule, less sensi¬ cipal, which they had the right to
Common Stock
do?
Should they restrict their
proach
to trust
investing pre¬ tive to the industrial cycle and in
The extent of this trust buying
cludes any attempt to participate this category food and food chain activities to a minimum, or should
and its influence op high-grade
in the
growth of new, although equities have much to recommend they attempt to increase the over¬
all investment return through di- common stock quotations cannot
promising industries, because of them. Tobacco stocks, particularly
After be estimated at this time but un¬
versifing their portfolio?
the speculative risk involved. For
leading cigarette companies, have
considerable thought and delibera¬ questionably it will be at least a
instance, we hear a great deal proven satisfactory holdings over
tion it was decided to take steps supporting factor.
Further than
today about the potentialities in a period of time.
/ "
;
in the latter direction.
that, the law may not only un¬
the television
Stocks of companies in basic
field and profits to
The problem is particularly in¬ freeze "legal trusts" but it may
be gained if
industries
such
as
petroleum,
you select the right
provide official encouragement to
company.; The same general story automobile manufacture and elec¬ teresting at this time because of
the fact that by the time this de¬ others, who up to now may have
was more or
less true years ago trical equipment are cyclical by
due care.
cision had been reached, market been proceeding with
m the
field of automobile manu¬ nature and therefore require more
Other
reasons
for
continued
averages were very close to cur¬
facture. The individual
who, for emphasis on timing, but under rent levels, historically high — in
buying support of investment-type
instance, chose General Motors or proper conditions they deserve a
the general vicinity of 200 for the common stocks include the growth
Uirysler Corporation has been
place in any well diversified stock Dow-Jones Industrial Averages. of the pension fund idea and the
generously rewarded but most of portfolio. Steel company shares, At that time We
pointed out to the substantial funds being invested
^^ecall names of many cars even more volatile, have little to trustees that we believed that if by open-end investment trusts.
wnich
long since have disappeared recommend them from a strictly faced with this problem a con¬
Particularly as regards pension
mm the
highways. What hap¬ investment standpoint.
servative corporate trustee might funds there is not only the matter
pened to the
Star? Or the Auburn,
be inclined to suggest maintaining of funds recently set up but it has
me
Diversification Principles v
Jordan, the Cole, the Stanley
a ratio
of 65% in U. S. Govern¬ come to our attention that a numsteamer, etc.?
It was mentioned earlier that ment obligations and placing the ber of funds which have been in
^ of growth potentiat¬ diversification as to industry is balance, or 35%, in sound invest¬ operation for a period of years and
es, it has been
This have previously confined their
said that the of great importance. Just what ment-type common stocks.
automobile, as, a new way of percentages of the total stock 35%, however, would be a goal purchases to bonds and high-grade
transportation- tcfok the American portfolio should be allocated to and not necessarily an immediate preferred stocks, have recently
changed their policy to include a
ctaJ A,out
home
and specific industry groups would objective.
list of good quality
We pointed out that "timing" diversified
vary in accordance with the out¬
dustry and
as
dividend-paying
Under
common
selections by the average trustee
what
»
(2177)
that it can be readily adjusted to*
meet changing conditions in this*
changing world, and he should*
make every attempt to take full
advantage of the maze of material*
statistical data and reports whicl*.
are
available to him through^
ordinary channels. You owe it to*
your trust
customers, to your in-*
and to th<*
■
.
.
,
„
dividual
institutions,
trust fraternity in general to do*
this important job to the best in-*
terests of all concerned,
Interstate Pow. Com.
Stock Offered
by Blyfli
Public offering of 275,000 a<£ditionai
shares
interstate
of
common
Power
Co.
stocfc
wast
made on
May 23 by Blyth & Co.*
The stock is priced at $9.25r
inc.
share and
per
was
awarded to the
.
j
Hvf
dnJ?8
e trend toward suburban
position of these indus¬ should be a primary consideration
in the purchase of common stocks
\wa«
e airplane, another new tries at a given time. All of this
icni
transportation took the leads to the fact that common for investment and similarly that
Wtiomsm out of our inter¬ stock investing makes for more no security could be "bought and
national
For that reason we
relations./ The refrigera¬ work, involves additional respon¬ forgotten."
suggested putting only 15% of the
ting a.way of food preserva- sibilities for the trustee. Many
total value of the fund in common
hnrn
man out of the of the smaller banks may feel that
stocks at the time. The individual
mw
Radio, a new way of com- the expense involved is out of issues which were selected repre¬
proportion to the remuneration
oti+ 1?!;on' tQok the Republicans
sented the best stocks we knew
of the
White House. Possibly received but in spite of this it is
+•
decentralization of in-
.
look and
The
stocks.
at
competitive
]yjay 22 when the utility
ajso
issues of first mortgage
bonds and preferred stock,
saje
on
,,
£r2
_
J ree.. saIe*£
-
"sed
redemption o£
$5,000,00() outstanding first mortgag® bonds, 4/2 %_ series due 1978,
and to pay off a $2,400,000 promtssory note. Balance of the proceeds will be used to finance the
company's construction program,
-
,
fairly
satisfactory. While certain indus¬
tries may report lower earnings
for 1950 than were reported for
1949 this may not result in a re¬
for
duction
the
in
year
the
appears
total
dividends distributed.
panies
firm
under which approximately $12,300,000 will be spent in 1950 and
earnings and dividend out- 1951.
common
look
investment
are
now
in
a
amount
With Waddell & Reed
\
(Special
to The
DENVER,
Financiai. Chronicle)
Colo.— Clarence WE.
of Blair and H. Pearl McBeth are
sociated with Waddell
position to Inc., of Kansas City.
Many
com-
&
as-*
Reed^.
30
Financial Chronicle
The Commercial and
(2178)
maintain
Continued from page 10
control
only by the
colonial
These
areas
figure;
probably boost this
would
use
of armed forces at great cost.
„
triumph of sterl¬
However, this
not
are
Thursday, May
.
find
our
25
political
This
competition
on
greater
m
She has been able to export large
amounts of
addition, the U. S. bought gold for
$200 million.
Thus foreign coun¬
improve
tries had
sterling capital and to
her international posi¬
tion; but this was largely done by
building up rather than reducing
the
barriers
The
cial
position stands
the
soft
needed
U.
of
system;
the
scarcity of dollars in almost two-
J
currency
i'i-
countries
Britain,
duced
the
dollar
further flow
1
of
Thus
Marshall
>?
of
in
is
the
of
ECA
second
of
for
restoration
I1'
nomic
these
billion, of which U. S. Gov¬
loans)
It
of
European
to
seems
were
that
me
failed to recognize the eco¬
changes
that
have
taken
place.
amounted to
$5.7 billion.
Ameri¬
investments amounted to $500
million and private donations to
another
$500
million.
Interna¬
of
hot
a
As
result,
a
the
which
based
were
of
all, European
invisible
dollar
No
sources
income
had
of
former
colonies,
or
Securities Salesman9s Corner
vH(,
A
wise
man
once
said, "Be Yourself."
V*;..
added,. "But make the
,'V
prefacing this week's idea
I
reason
am
on
try
Nothing is more self-defeating in sales work than
try something that belongs to someone else and as a result it is
transparently artificial to the other fellow.
For
.ft
1
1
well
to
.'A.'
it\
The
have
to do it his way.
'it
'
could
selling with these remarks, is that I
want to tell you about a man who has
developed a reputation for
knowing his business. But he does it his way. If
you feel that
the one point which I want to
emphasize is,,worth trying in tyour
work, you will of course, suit the shoe to the foot. You won't
4
•>)
•'
He
most of what you have."
many
general insurance.
has
man
been
Today people from all
ir
come
this
years
to his office for advice.
around
and
his community
Before they buy a
piece of income
property, or a
home, or send their sons to college, or go into a
business, they ask his opinion. He knows his business which is to
be expected; but
many people know their business and never
achieve
we
are
this
*
man's
clients
%
reputation for the sort of judgment and wisdom to which
a
referring here.
home
have
definite.
He
And
so.
times.
answers
a
ilit
he
In
sa.ys
one
certain
were
his friends
of
stands out.
He
or
categorically; it's either yes or no. He doesn't
a thing is good
he says so. If it is best for
more
a
lost commission for
definitely in these
where he
was
property
cases
him, he
than
at
would
be
considering its purchase
a
as
good
a
Vt
vestment and buy on
t
and
you
can
want to live
if**
'A:
an
Buy something else for an in¬
investment basis. If you like the home
afford it, buy it. It all depends
upon whether you
there now, that is what
you should consider."
So his first point is that he
that he has facts to back him
up.
with friends while we were
is
definite.
The
point is
I've heard him discuss insurance
sitting in his study at home. Not to
an interesting conversational
topic. He
sell them, mind
you, but as
had them all at rapt attention.
with knowledge of the
r
'
'j
things, than
most people who are
constantly searching for everything but
knowledge these days. He has read for an hour or more almost
every night of his life—and he has been
doing this ever since he
was
a
young man out of
So
T;
and
he
is
definite.
knowledge.
college.
And
But there is
he
has
one
a
more
background of information
thing. He is honest. He is
honest with himself, with his friends and with
his clients.
people come to him about all sorts of things?
motives
They
as
well
as
can
Why do
trust his
his judgment.
■
o
Everywhere you go, in
practically every line of business based upon
service, such as real
estate, insurance, etc., there are men who have
developed a sound
repeat business based upon a reputation for
integrity. The invest¬
ment securities business can be
developed in the same way. It may
be
i
('
a
bit
difficult at times to control the
public's desire for
speculations and unsound investment but
eventually a business
based upon knowledge of what
is sound, plus no compromise with
expediency, while being definite in your
recommendations, will
bring results.
I
and
other
monetary funds would not be held
in London.
is
trying to
financial
to
This
Germany,
applies
but
also
desperate
Europe
attempt of
balance its
to
markets in the Western
competition
also
with
world, in
American
Japanese
Western
and
manufactures.
Europe would also need
restoration
a
of
its
colonial
em¬
pires; with American military or
aid, for any return to
financial
the
status
But
quo.
this kind
of
compensation to Western Europe,
for
the- losses they suffered in
Europe, is not
possible.
As
solve
deficit
as
economies, rely¬
American
on
Whenever
this
financial
kind
of
aid.
deficit
balancing becomes too difficult,
they will have to seek their own
agreements
that
would
plans
with
mean
Eastern
Russia
means
—
this
cancellation of the
which the Atlantic Pact
on
This is the
we
successes
are
conclusion
based.
must
we
realistic about the
are
and failures of the ECA
There
program.
factors
which
her
be
may
other
change the
of developments—an
early
or
changes in the Eastern
sphere
which
will
disintegration of
pire. But these
start
are
a
developments
accurately estimated.
open
matter
of
cannot
be
and to lend
could
a
long-term
The
areas.
collapse
of
Britain
the
of
curbs,
new
a
financial
financing European defense.
What
this
do
we
sort
has
about
questions
of
bearing
on
direct
a
relations with Western
world
on
trade.
Europe
ECA
and
originally
that. East-West trade in
would
revive.
The
coid
however, prevented this. As
war,
long as the U. S. had the
atom
bomb and Russia didn't,
Western
Europe
inclined to follow our
political and eco¬
nomic policies. Thus the
original
lead
was
in
both
Marshall plan
tive in
gave
the initia¬
us
foreign affairs.
■
Now, however, this situation has
changed. Western Europe sees it¬
controls
would
be
and
directed
especially against the outflow of
capital into the dollar areas and
against dollar imports.
♦
Hopes
are
expressed
that
the volume of exports to the U. S.
in 1950-51 can be increased
42%
above the
this
1948-49
level, and that
followed by a further
be
can
gain of 60% in the following year.
mistake
officials
was
position
of
estimate, however, assumes
high and rising level of pros¬
perity in the U. S. If this fails to
develop, the estimate is entirely
such
to
of
sponsored
by
planning
Britain.
clearing
Mr.
balance sheet, on a
highly
a
That
sys¬
All
it
pro¬
duction.
The
U.
S.
is
supposed
ful in
rebuilding her sterling posi¬
tion, which threatened to collapse
right after the war. It is now esti¬
world's
on
a
that
trade
about
is
half
of
the
being conducted
sterling basis. Signing of
new
bilaterial
agreements
and
mul¬
tilateral agreements, which
would
provide for transfers of
accounts within the
sterling
sterling area,
U.
S.
In
'
short, the U. S. lost
.
great
a
deal of initiative in foreign af¬
fairs, both political and economic,
when it lost its monopoly in the
atomic field. I think
the
we may draw
conclusion that the
practical
of
ECA
will
search of Western
tries for
new
intensify the
European coun¬
markets. In the
com¬
ing phase of developments, Russia
will be able to make trade
offers,
restoring
the
East-West inter¬
change of goods on which Western
Europe depended before the war,
if
these
countries
their
neutrality in
flict.
Thus the
of
declare
will
any
new con¬
economic problem
Europe is tied
up
directly with
the defense problem of the United
States.
•
Offers MOP Equip. Clfs.
finance not only a
A
high level
group
headed
by Halsey,
prosperity in the U. S. but also Stuart & Co., Inc., on May 19 pub¬
in the sterling area;
Otherwise, licly offered $4,125,000 Missouri
the U. S. itself will be
held re¬ Pacific RR. Co. 2%% serial equip¬
of
sponsible for the failure of ECA.
There
is
another
contradiction
which should be pointed
out. The
American task to finance
perity conditions and deficits and
the
balance
entire
of
in
payments
the
Western
world, and es¬
pecially in the sterling area, re¬
quires large scale deficit
spending
the U.
S.
One
by
of
the goals of
budgets in ECA
be
unbalancing
achieved
the
only
American
budget. The, ultimate
continuous deficit
result
spending
financing
is
an
ment
trust certificates,
maturing
annually
series 00,
1951
1,
June
to June
1, 1965, inclusive, at prices
to yield from 1.50% to 2.65%, ac¬
cording to maturity.
Issuance of
the certificates is subject to au¬
thorization by the Interstate
Commission.
Com¬
merce
the sale
Proceeds from
used
in
by
will be
to finance,
railroad
the
the purchase of 30 new,
partj
Diesel-Electric locomotives wnicft
will
cost
less than
not
$5,175,503.
of
and
undermining
of
Crooks Vice-ChairmaR
currency values.
sharply.
clearing system.
This involves more
than a ques¬
hand, wants itself to become tion of
dollar supplies. I am
the clearing center for
not
Europe.
•
too optimistic about
the success of
success¬
with
in
less
to
other
mated
cooperation
Of NYSE
Hoffman
European
France, on the
and
war,'
implies, however, is that
S. is made responsible for
expansion of world trade and
reflects that
Conclusions
country's determina¬
tion to extend the
I'm afraid I can't
sterling sphere.
be optimistic
Dollar trade, if this
formula is about
what
will
happen after
carried out, would be more or
less: ECA ends. Barring a new
war by
excluded, and Britain would make that time,- our
exports will drop
itself the center of a
has been quite
about
another
the U.
countries—can
country's refusal to join the type
inter-European
to draw up
easy
nations, each of which
favorable basis.
ECA—balanced
ignore the special
Great
It is
being in the diffi¬
of being caught be¬
policies.V '
a
unrealistic.
as
neutrality
of
case
end
Meanwhile, Great
Britain
is
putting on an intensive export
drive.
bomb, but
system
only through
drastic
which
in high-
or
danger of
be minimized
system
in
Britain's Special Position
Another
tem
For
pros¬
an
the Russian Em¬
speculation and the timetable
for
of
by
would have to borrow short-term
will
course
war,
implications.
gerous
Europe
and
a
America's defense
draw if
problems
This
result, these countries will
a
remain
ing
own
risk
The
more
H
trade.
Western European coun¬
Britain
Almost every
community has its seer.
<'
economic
tries.
He illustrated his points with
cases,
pitfalls in contracts, of undercoverage and
holes in programs, of new fields of risk that he
had helped cover,
even to the extent of
rewriting certain clauses in policies with the
assistance of his home office
legal and statistical departments. He
knows a lot more about his business and
many other
'V.
be, but it
can
that the
of Western
such
second
Then clearing
system.
be"
ex¬
pected to finance its own
defense
and greatly increase its
share in
has the atom bomb. Much more
is
heard
now
about
says
in which to
City of London, and which
compete with the sterling
Wester
phase is
will be
S.
tween two
other
investment for
home
independent
U.
attempt will be made. It has dan¬
permanent it
East-West
and
asked if he thought the value of
be
finance'its
hope cannot be realized. But the
is
your home to be an investment upon
which you may make
money.
Homes are not investments except
in happiness and as a
place to live. If you want a good investment
don't buy any home on that basis.
''I
•' '<
some
thing
which would
tem
The
new
Europe has been
thoroughly upset by the shrinkage
—
One
live, he replied, "Don't expect
7 >
/
office, when
advice.
instances, both in
If
residential
people who
his
ask
even mean
so
case
in
to
hedge, hem, or haw.
the client, and may
'A-
I have observed several
and
come
European foreign exchange sys¬
a
ginning.
a
cult position
and
reversed
Eastern and Central
selling real estate
setup is the creation of
a
Europe. Now
Europe
really risk
to
deficits and those of
own
direct the outflow of capital. This
be
can
economies would mean an inten¬
sified effort to conquer additional
By JOHN BUTTON
■
has. been expected
assumed
its effects.
a
out, the U g
bal¬
how
Western
■
of
which
hard
self, not as being allied with the
only / nation
having the atom
control
have either lost
there
types
at
at¬
tracting again the monetary sur¬
plus funds of the world, and thus
velopment
*
■
in such
would
completely
since
restrictions
What Britain would
re¬
revival
a
solution
a
various
be
and
would nullify
of the
Europe,
a
still
controls
imply
not
problems,
present
would
Britain
ance
powers
H"
^
:'M
on
of
that
knows how far this de¬
one
especially
"ivi.
Western
of East-West trade, are
to other
t"'4
levels
original estimates for the
of
of
"i-t
Europe has
low
tions would
a
between
Furthermore,
trade.
dollar
clearing system under any condi¬
fears
many
trade
construction
is certain
In
the
such
to
European
million.
at
has been
war
Western
and
either disappeared during the war
or had
become decidedly limited.
$100
depend
Europe.
given
have been expressed.
war
supplied
Bank
been
developing and when
of
which
to
Eastern
has
ig¬
was
to
used
time when the cold
Monetary Fund and World
tional
participate on her terms, how¬
ever, it means further limitations
for
outdated.
First
can
that
extent
with
help
declined
certain goals
deficits
aimed
As I have pointed
countries, par¬
problems. If Great Britain can
no
on
Europe
trade
Eastern
example,
dollar
up
factor
the
is
For
and
$6.1
u
A
foreign policy?
In
my
opinion, these failures
are due partly to lack of realism.
,1
'PI'
these
some
the failures of
f Hjr,
and
for
and
income
piling
im¬
Western Europe.
ECA
for
reason
of
source
an
measures
currency areas.
ticularly in Southeast Asia.
A
European
clearing system
without Great Britain would solve
Consequently,
previously
were
now
Western
set
(grants
portant
nored
production.
aid
that
areas
are
off.
areas
in
surpluses
trade with colonial
moS
discrimin
atory,
dol¬
three-cornered
lar
if they are to remain under
political control of the old Im¬
perial systems.
Foreign govern¬
ments, however, badly as capital
is needed, are unwilling to write
these
dollar
a
number of countries
difficulties
for
a
What
capital.
ernment
of
increased
Last year's U. S. surplus in the
balance of payment amounted to
-
goods,
oversupply
an
spite
failures
the
aid
was
war,
however, they obtained large
on
especially
sharply re¬
gap.
there
tal from the U. S. will avoid these
areas,
the
Some Basic Changes
Government credit is largely used
to finance an international flight
u
-
and
have
of
trade
surplus to the foreign world.
exports has greatly reduced the
foreign demand for dollars. Most
Great
for
pay
It also means
that
European countries will
proW
themselves in any
way they can
by tighter controls and
have
always had a large deficit in
with the U. S. Before the
eign Governments.
American exporters.
This year's balance of payments
will supply even a greater dollar
The sharp decline of American
ECA
to
surplus
export
dollars,
and
in which to operate.
)>/
order
shortage in
thirds of the world in effect pro¬
vides Britain with a deficit area
'
S.
Thus
falls with
or
in
Britain and Western Europe
Private capi¬
markets.
position.
tion of London's prewar
the
were
services and investment income.
finan¬
or
dollar supply of about
$7 billion, while $6.1 billion
against dollar trade.
British commercial
a
ing trade does not mean a
posed for both the U. S. and for¬
1
•
restora¬
producing the revenue that they
used to.
Moreover, a dilemma is
eat
worla
,
After Marshall Plan Aid
19^
prob
impossible.
.
A
.
will
we
lems
about 66%.
to
.
a^European clearing
about
progress
ination of
exchange
C3n the
contrary,
sion
in
that
At
are
we
already get
of
depres¬
accumulating,
developing in
industries
the
is
as
or
elim¬
coal
and
samejtime, Germany
have to have
more of
a
such
steel.
will
market,
or
of
partner
McKinnon
&
member
of
and
Exchange
the
,sin^
elected Vice-Chairm
of Governors, wr.
Crooks has been a Governor of t
1941,
of
was
the
Board
Exchange for the past four
He
succeeds
William
as
a
K.
Crooks
y®ars*
Vice-Chairman
as
Beckers,
Governor
Mr.
evidence
Europe
surpluses
basic
the
restrictions
and trade
controls.
reports
system
toward
Richard M. Crooks, a
Thomson
Board
whose term
expired on May
entered the
,
•
securi¬
1928, as
Jacquelin
DeCoppet. He became associa f
with his present firm, as an em
ties
business
an
employee
ployee,
in
August,
in
of
November,
resides in Jersey
1928.
City, N. J-
•
171
Volume
Number 4910
y
.
.
.
The Commercial and Financial
Chronicle
(2179)
'
■'
X
j
Continued from page 11
of
l
Above
hope.
all
cither
natfntr
balanced development of
the Turkish economy. The Turkish
the
What
has
government ; is
cooperating! by
guaranteeing a minimum dividend
stockholders,
to
and
nf
Particl-
in
vestment, which is less than pri¬
vate capital normally expects to
II,
become
in
other
development
diversifv the
diversify the
is of great interest as an example
companies.
Similar
Nations agency can combine their
skills and their money to
encour¬
private investment and
create
a
climate
conducive
later
private
'
on.
patterns
ment;
to
but
which
investment
is
...,•' world.
will
bank
be
staffed
with
in
is
of
parts
many
For many years
firms
type
almost standard
now
in
sought \ affiliates/in
foreign countries for the manufac-
loan
ture
the
is
bank plans
Turkey.
The
.be
in
Turkish
position
a
to
Chilean
turies!
we are
reauire
ods
new
the old theme.
chances
finished
not
have
been,
Corporation,
result
since
created
was
the
of
1939.
the
+H
pc^th
be
Joint
may
arrange
nrnhahi v
most
3
niimfirrviic in Mpvinn
Rn7ii
numerous m mexico ana in israzu.
in
As
the
ployees in local
earth¬
1947.49
about
were
foreign
ing the balanced
crease
Many
economic growth
U.
reluctant
Chile.
S.
businessmen
to venture
a
factory is
and is
the
factory in Chile.
in
now
making its contribution to
Chilean
It
It
economy.
is
also
to
is
.
the United
that
making money for itself. Another'
mtention
plan established
by the Corpora¬
political structure
tion
and
imports
then
from
the
builds
•
fairs of any
United
do
and
cases
covet
we
economic
power
jange
of industries, including
lumbering, textiles,, mining, copper
..
products,
irrigation,v.
and
broadened
r
u
which could
as
couragement
veipomept '
u.
S.
men
given
by
stablished.
agreements
the
by
the
en¬
-
De-
many
entered
into
have
with Chilean business¬
means of
of
of
Corporation,
firms
agreements
result
a
which
new
in-
many kinds have been
Sometimes
consist
arrangements,
hnean firm to
of
which
use
permit
the
processes
and
techniques developed by the U. S.
th1'
Sometimes the stock in
ti?eW *ndustries is controlled
S-
b
firm
y
the
Chilean
and
sometimes
firm.
Though
so
to
as
be
constitute
policy. It is also
in part
or
of
government
in-
any
offi-
our
our
a
rule of
practice.
TJtrnntfh
ctrpndthpninif
Through strengthening thp
the
raiTetoe level" ofTradT We
ppn
eco-
must
over
f
which
is
to
towns
many
Brazil
find
to
local
goods to replace those
that could no longer be
brought in
from
the
United
States.
They
planes, in buggies, in
taxis and barges, from the
edge
of the Amazon jungle to the bortraveled
tavic
in
nnH
can sel1
bicycles,
?loth and cutlery to the dollar- ders of Uruguay, Paraguay, and
long nations.
In Japan a rice Argentina to find local sources of
thresher has been developed; it the goods they needed.
They
might be sold in Siam. If pay- found them. Today 70 to 80% of
ments for these and similar sales the goods that are sold in the
are made in dollars, England and Sears, Roebuck stores of Brazil
Japan will be able to earn, come from 1,400 sources within
accounts
with
the
United
is oiooc iw it will affect
clear that
trade,
part
of
States,
our
own
which
at
illustrates
the
point
Rra.il
Brazil.
The same ingenuity has been
displayed by other firms. You are
all familiar with the way in which
nnr
mntinn
£"
Pone
ni(ltliro
nirW*
S
the
monev
nnmnQniDC
counTries
other
to
whirh
m
S
snend
nrnHurtLlv thl Inn !
tLv hJL parnpd L Athpr^nnn
makp
made
earlier that
in
thk
hi
cannot
any program to corimbalance will mvole a
,
.
variety of factors and that no simA targe
JLfl 7nd emlinmeld
Pie formula will suffice
has an estawPhed Colir^nfTel?
tbe otlier hand, I do feel f19® an established policy ot helpthat by an increase in the total ing other countries create new involume of world trade it will be f0USf
J^nish'free MrveTOTnd^rac'
poaalbl.e j°
the things we have
advice to othermuntriM
suggested without any drastic re- "cal f^etooUier
ZhX lnl
duction-and perhaps even with the d<evetopmeiit olIIiheir ecoan !ncrease of our present export
d
,^
bus?nass' "ls en™uraging to see octets; in. the United States for
that the nations of the world are
'
exchanging 10% more goods than
These activities and hundreds
nn
,
.
._
..
.
„
...
before the war. This is an in- of others like them,
crease m the actual physical vol- that Yankee ingenuity
P, ~
dollars
i^rrPasinfy
thp
to
I ®
from
the
TTniteH
c:+afPtl
States.
United
•
nrfjaciipo slso hold nromisp of
ap-
proof
are
is alive and
sup-
^h8Sftm/hi
if
from
necessary
Seirtov^meMs
We
must
seek
multilateral
among
restore
of
pattern
nations.
Healthy
the
trade
inter-
enthusiasm for far
should
places
not
forget our good
neighbors in this hemisphere. We
we
need
their
skills
as
experience
our
of
resources,
much
as
and
a
and
their
they need
knowledge
our
of
business methods. The future
the
world
depends
upon
the
strength of America. The strength
Increased trade between dollar-
short and dollar-long nations will
help
restore
a
healthy
balance.
The United States pays out dollars
to
nations
countries
like
in
Brazil
Latin
and
other
America,
to
and prosperity so that the
countries of the world can exchange
their
materials,
skills,
goods and cultural values and
peace
thus add to the wealth of nations,
Philip Morris Stock
standing, and as a result of actions
taken by the Argentine Govern-
Offered Stockholders
ment and by Argentine businessmen following these discussions,
Philip Morris & Co. Ltd., is ofexports from Argentina to this fering its common
stockholders~of
country are expected to increase record
May
_
19,
substantially.
1950, the right to
One hundred
sev- subscribe to 130,610 shares of cuenty-five million dollars is a con- mulative. preferred
stock, 3 90%
servative estimate of our imports series (par $10o per
from Argentina during 1950—an 333,077 additional
increase of $75 million over 1949.
A second promising approach is
ti
fhianced
h
underde-
,
historv
We ourselves
accepted
help
in
times past. The entire stock of this
nation's first railroad, the, Baltimore and Ohio, was bought up by
investment
most
were
of
the
houses,
bonds
that
as
fi¬
nanced the Erie Canal.
A third hope of creating
a
can do healthy
business with each other—and do
more
share) and to
shares of com-
Subscription
war-
rants wili
expire at 3 p.m. (EDT)
June 5> 1950
on
Holders
giyen
of common stock
rjght to subscribe
,he
are
for
Se ne^rSd
share in the ratio of one share of
preferred stock for each 15 shares
9
of common stock held, and to subscribe for he_ additional shares
common stock at
of
$48
the ratio of
one
share in
a
share for each six
shares of common stock held,
The
offerings have been under¬
a
group
of 67
invest-
world ment bankers headed jointly by
iu which traders
it
stock.
mon
written by
easily—is the ingenuity of
Lehman Brothers and Glore, Forgan & Co.
The group has agreed
to purchase from the company
any shares of stock not subscribed
for
by
warrant
holders.
Prior
Senious methods of getting around to expiration of the warrants the
the dollar shortage- Man-V of you underwriters may offer shares of
success
of the
preferred stock, either
subject or not subject to prior
Janeiro and in Sao Paulo.
What subscription by warrant holders.
you may not know is that in the
Net Droceedz from the financing
common or
Sears, Roebuck stores in Rio de
"erieTof VwowavTreets radtat3 Ph"! f 1949' th1h ne™ly-estab"
IZ Lf fZZ
2 st?t2" disaster. Brazil threatei?ed "lth
bshe? st0"es w?re
running dan-
too many "road closed," "detour"
and
"private,
no
trespassing"
signs.
>
These brilliant improvisations
of American businessmen hold
promise of doing more than help
close the dollar gap. They show
how businessmen of many nations
are learning to. work together for
ported into this country. As a reof increased mutual under-
have read about the
to
aonar snortage.
suit
,p
if ® rkpH
t hpd anH hn]dlv
American businessmen.
Many
^nniiph hv nrivatP businessmen businessmen have improvised in-
simple solution, for achieving this )Web of interlocking roads and
objective.
highways. At present there are
our
Last fall
the Argentine
of the United
States Government held meetings
over a period of three months,
The meetings were informal, factfinding sessions. Without authority
to make binding commitments the
representatives of the two governments sought ways, on a problem
by problem, commodity by commodity
basis,
to
increase
the
amount of Argentine goods im-
earn
J other n^tion^
go
hn
go about the tesk of strengtnening
about tne tasK 01 strengthening ling out from the United
States,
these economies in many ways. '0r from
any other single nation,
There is no magic formula, no it
is, or should be, an intricate
In
sion among the nations.
London
1949.
Ilowever, I believe that other
'
"
these
licensing
invest-
We will, of course, try theTwell'
k;
v
dependent state. This is
cial
many others.
Partly
the
$100 million
any
"
—of
indirectly, in dozens
projects covering a wide
They
;dolla^h^ doUa?4andngnsomc^
^ ^sed^e
^sources
States
for- ourselves
control—either in whole
new
England,
d,01!?r"short,
throuehout
political afother nation. Neither
directly
°!
other
the United
or
makes the final
assembly in Chile.
The Corporation
has participated,
or
we
These nations are
"dollar-loneF.nelnnd
whirh
is
"dollar-long."
for :frienids
back^i
?ometimes
e m *be old countries receive
,
of
motors
refrigerator
other parts
States;
goods
for us to #help other nations to
tourists with enriching experience
be^me
as well as selling them transpor- "oipants in international trade
tation, food drink and presents There
territory and has no
.tVl
tL.
interfering with the
no
..
,
their
"tourist expenditures in 1950 indiof the greatest importance
„cate $800 miiiion—an increase of
repeat
covets
in
from
States; they
earn
dollars
carrying
cargoes;
they earn dollars by selling marine and other insurance; they
earn dollars supplying American
are
own.
operation
dollars
earn
operated
vited to set up
The
Foreign
nations
have
of earning dollars.
ways
their capital
Some enterprises are
in foreign investments unless they
directly by the Corpora¬
can operate with the same rights
tion,
but
its
most
important;
enjoy
within ,the
achievement has been; the encour-« they would
United States. We should try to
agement of new enterprises which
gain these rights for American
are financed
jointly- by the Chil¬
investors. At the same time we
ean
Government and by private
business and managed by busi¬ must realize that customs and
ways of doing business in other
nessmen
themselves^ The United.
States General Tire Co. was in¬ countries are different from our
imports.
our
1 ments
■
as our econ-
states economy strong, we can in-
ing techniques far beyond its fiself.
*
that
means
continues to expand, the possit»ilities for sales to us expand
aiso
we
keep
the umted
nancial ability to provide for it•
this
omy
to
access
over
perjod
;
modern research and manufactur- V
agency responsible for encourag¬
of
gains
country
40%
55%
greater jn value than in the pre-
and the
currency
rich
Despite the postwar consumption of synthetic rubber, our imPorts of natural rubber in the perj0d
countries enjoy increased markets
in 1939,' which
virtually
destroyed many" small towns and
villages and seriously damaged
ment
were,
.
"
of ; the dollar shortage. On the
the- other hand, the firm can pay em-
larger cities. The Develop¬
Corporation is a government
are
Labrador and Liberia will increase. Imports of paper keep going UP- Coffee> cane sugar, and
spices are growing imports.
subiect
havo flonrishpH
a rp
imports.
growing
meth-
amJrlpan^Poiin
Tatin
pv
It
and
will
annroval
mnnv
stock
on
quake
some
worth
are
the
Mesabi range is depleted, our im- representatives of
'P°rts of iron ore from Venezuela, Government and
This
as.
disastrous
than
and
rials>
of
Corpo¬ for their products—markets which
operating with' might otherwise not exist in face
success
and
of all imports, and in 1949 they
war
marked
Such
they may be extremely
important to some nations.
Before the war, these two classes of
imports together amounted to 35%
has been devised in
Chile, where
the Chilean
Development
been
and
foodstuffs?
]arger jn qUantity and
has
clos-
manufactures
interesting of these, modern mix-" The result is that American manufacturers
tiires of public and private
operating
in
foreign
money
ration
of
though
sometimes
products
oneration
its
in
One of the most
.
of
mpnt« nf this kinH
Century,
variations
principles
majority
a
that
of
to
It has gone on for cen¬
devising
the
minority
a
In the Twentieth
in
firm holds
mixing of private and public
new.
of
agement. Sometimes the American
Development
capital for economic development
in underdeveloped countries is.
not
nations
buy
we
city
throughout
mate- ume:
<.;:j
vigorous,
proof that American
semi-manufactures, and
One contribution to an upward businessmen refuse to get downmodern plant layout,
operation, ^rude foodstuffs. Zinc, tin, nickel trend of physical volume will be Varied over an obstacle, even
merchandising, research and man- and copper .and petroleum are a full, frank and friendly discus- when:i isasbiig and tough as the
ployees
bring
Corporation
/
The
kinds
and
rubber
sell to them.
rect
,
accounted for 30%.
be produced and undertaking to
The big dollar earners
train
and
supervise local
em-' and continue to be, crude
capital and capital from
together.
• " /
The
how-
war,
of providing drawings and
specifications of the products to
Other nations
11"
number
the
the
re-
not now, the biggest dollar earners for the rest of the world, al-
sists
bank
will have available a wide
range
of information on local conditions
and investment opportunities, and
will
the
of
are
following
imports
i
rapidly. Sometimes American
participation in these firms con-
to make- available to
in
invest
end
and
dollars
more
of closing the current This
manufactured
these arrangements have increased
help which this
those in other countries who wish
to
the
ever,
Of special interest to American
investors
of
*
assembly of their products,
or
Since
means
What
;
American
have
sources of
Din- export
the: ing the gap by raising the imports
technical advisers who will guide
capital into enterprises con¬
tributing to the balanced eco¬
nomic development of Turkey.
and
"dollar gap" in the
marks:
invest¬
'
fee,, oil, tin,
from these
of the Philadelphia Chamber least is a windfall from the war's
of Commerce on May 24, Secre- destruction of the
producing and
tary Sawyer outlined the chances trading capacities of other nations.
other
another
Trade
*
every
ner
•
mixed
of
there
by
practice
'
The
Speaking at the World
Week-Stephen Girard Day
have described two relatively
new
to
age
large-scale
I
.
petro-
'
4
Persia in the Middle East, and to
Malaya in the Far East. The cof-
through trade, some of the dollars needed to balance their trade
ble ^™4
Means of Closing Dollar Gap
corporations
in which private cap-' have been established
government, and a United parts of the world.
ahead
move
to„„iKic
and
by American and British oil
of the way
ital,
stant
rich
ment of its vast reserves of
leum
some less fortunate
must
We
step by step' building a world in
wbich hope is nourished by con-
es-
had
though
somewhat
unbalanced through the develop-
bank
new
bring hope to
ha?
cornoraUon
the
can
Pe0Ples-
countries
of' ^country wS
economy
in Turkey.
The formation of this
the material resources and
exPe"ence with which we
rhile
Venezuela
iQ4K to
1946 to
in
m
afsoTartici
are
America
tahlished
tablished
'
K-
hanneneH
hanoened
South
its
the";
has
stockholders have agreed to accept
no
more than 12%
on their in¬
earn
capital
businessmen
countries
the force of fear- The h°Pe which
free and nrocrressive nennles enfree and progressive peoples enjoy must be held out to those who
Z* now without hope- w« have
oonitni
private
h.in_
ment of private long-term capital
6%
new
UniteiT States^
Its aim is to encourage the invest¬
of
the
.
national Bank.
in
of
most
cherish
must
we
We have seen hope disapin nations which rely upon
pear
approval and advice of the Inter¬
all,
J
^
America is the strength of
the Americas.
31
was
gerously low
on
this
dollars.
the
danger
To meet
government
re-
quired all businessmen, including
Sears, Roebuck, to cut down dras-
tically
on
imports of
goods that
At that time, 70% of
cost dollars.
the
merchandise
stores
ported
was
of
scheduled
from
the
the
to
United
in
the
business.
history
Buyers
of
were
of the company.
<;tantiaiiv
An amount sub-
equivalent
to
the
net
stantiaiiy equivalent to ^tne net
proceeds will be applied to reduction of bank loans which
gregated
$49,750,000
on
ag-
May
17,
1 qc-ft
Sears
be
im-
States,
What the company did in the face
of catastrophe is an exciting chapter
will be added to the general funds
American
sent
to
With Harris Upham
(Special to The Financiai, Chronicl*)
EVANSVILLE, Ind.—Robert O.
Geiss is witn
xiarHc
mms,
iinham
upnam
b
Co., Old National Bank Buiiaing.
32
Financial Chronicle
Commercial and
The
(2180)
that
about
would
lines
of
fev
and
this tax relief
be equalled or exceeded
to
were
business
of
If
reduction in Federal expen¬
a
ditures,
long
the
effect
range
-
The
has
public
probably
impression that our in¬
general
an
Federal
creased
during the
to
in
coming
"cold
our
nism.
expenditures
year
war"
due
are
with
commu¬
But the fact is the increase
the
debt
during
coming
the
fiscal year is not due to increased
for
outlays
.services,
defense, veterans'
the Marshall Plan.
It
will result instead from increased
or
expenditures
for
welfare
and
Upon the shoulders of the Sec¬
of
burden
of
the Treasury falls the
managing the public
debt after funds have been appro¬
priated.
He
of
work
public
must
the
hard
management
debt
do
after
expenditures
which
in¬
crease
the debt have been author¬
ized.
A
out that
moment
I
ago
pointed
present Federal debt
our
The Savings
is an excellent way
sound economics to mil¬
carry
lions of American citizens.
It not
only induces them to take
interest
in
per¬
a
financial
good
management, but also has tremen¬
dous educational value.
It alerts
realize the importance
of sound budgetary, fiscal and fi¬
nancial management by the gov¬
people
to
ernment.
The
ABA's
Committee
on
biggest banker and guarantor of
in
credit
loans,
Its
world.
the
loan
guaranties, and loan insur¬
individuals, and
other borrowers have expanded
ance
by
for business,
than
more
the past
The
ment
billion during
$6
whole
lending and
loan guaranty
began during the dark days of the
Great
Depression in the
early
Bonds
has
re¬
1930s.
that time,
At
types
some
of government
borrowers.
A recent survey by
bankers have always sup¬
the American Bankers Association
ported the Savings Bond program
in which 3,200 banks, or one out
still carry, and will continue to
of every five banks in the coun¬
importance.
First,
helps to spread the try, participated shows that only
great
carry,
the
program
national
debt
investors.
non-bank
among
This
provides
safe¬
a
against
the
inflationary
pressure
of
the large
national
guard
debt.
Second, it helps in the ma¬
distribution of the debt.
turity
This is
is being managed ably and well.
debt
The competence with which Sec¬
of the
one
vital points
in
management today,
because
large portion of the debt pres¬
ently is in short-term securities.
a
retary Snyder is carrying out his
one-fifth
made
all
of
the
than
more
had
banks
5,500,000
forces
inflationary
the
and
vitals
One
not
There is
calculable risk.
a
loans
is
Certainly
there
is
national
no
banking,
nationalization
and
nationalization
eventually
of
business
that
direction
is
and
control
credit
no
afford to pay could
take
in
future
some
these
socialized
For
ultimately
pay
The
The
of
most
than
are
insured
the
the
loan
average
Marginal
loans
loans
is
and
socialist
a
have
administered
Their
grow.
practices
the
help
strength..
banks
soynd
safeguard
But to¬
have
another
responsibility.
We must encour¬
age wise credit policies and prac¬
tices
by the
government.
We
discourage government
credit policies and practices which
must
believe
we
in
success
unsound.
are
Our
fulfilling all of these
responsibilities, I shall always be¬
lieve, will be the ultimate test of
course,
to
and
day,
would
of
made
are
life
preserve
century, the
banks, chartered and
by national and state
economic
our
outstand¬
loans,
that
live,
of
to
Their credit pol¬
helped the nation de¬
have
credit
made
be
than
more
velop
taxpayers
would
to
way
trying
governments,
icies
for it.
situation
the
communist
supervised
may
This
business
have
credit carefully.
depression.
losses.
credit.
is
commercial
Presumably the government would
underwrite
jeopardize
against
be devised to
the losses that
of
care
occur
industry must
of the
cap¬
which
encroachment from abroad.
could
businessman
and
America
insurance premium
small
a
to
and
industry than this. Here at
home,
the subtle fingers of
government
determining small business loan
or in fixing premiums.
No
business loan
total
government
of, and di¬
that
control
road to
surer
no
of
losses
ing.
banks.
have
system
of
influence, the capital and
industry uses. There
rectly
pool of experience to guide a gov¬
ernment or other insuring agency
in
into the
credit which
be marginal loans.
They are sub¬
ject to much higher risk of loss
being adequately met by the
is
control
and
This
are
still
ital
business
of
influence
enterprise
basic tenets
can
Insurance
loans.
convincing evidence that
financial
deeply
the
of
should
Calculable Risk
a
government
the
of
state
particularly acute by the fact that
is
for
sinks the roots
of the
more
even
seem
The average amount of these loans
is a little less than $2,500 each.
the credit needs of small business
loans
government's
mounting again.
to be
proposal
sponsored insurance of small
busi¬
ness
with
urged
in the
e.
The
equally poor timing.
It can pro¬
an expansion of bank credit
at a time when business is strong
of govern¬
concept
being
succeed
other.
duce
Not
participation in the
credit field were justified by the
cently forwarded a message to all
of its state chairmen throughout emergency which then faced the
nation.
Today, adequate credit is
the
country.
The
Committee
available
for
large
and
small
points out that the same reasons
Savings
Treasury
is
insurance
two years.
why
other domestic programs.
retary
to
sonal
would be far better.
debt.
government's
Bond program
princinL
field, it will
one
automatically
Government in 1950
employment.
insurance
in
well
works
put
Business, Banking and
number
the
because
A
any
legislation tends to overexpand credit.
the government number of attempts have been
even more deeply into the
lend¬ made in recent years to enact
ing business than it is now.
At Federal legislation with the inten¬
the
present time, more than a tion of curbing the expansion of
bank loans.
Even the President
score of government credit agen¬
cies
have
made loans; commit¬ urged Congress to enact some of
Two years ago,
ments
to
make
loans; or loan this legislation.
guaranties for business, industry, the banks were asked by the gov¬
ica's
productive
and financial lems of debt management realis¬ farmers, railroads and home own¬ ernment to dampen their lending
tically.
power.
ers
in excess of $26 billion.
To to aid in holding down what has
I know of no better way
The Treasury has been wise in
to this
total, the Administration now become a long-term trend toward
recommending to Congress meas¬ interest the public in the govern¬ proposes to add still many more inflation.
The government's ac¬
ment's financial housekeeping
ures to reduce certain excise taxes
It was on the
billions of dollars of business loan tion was ill-timed.
Imposed during the war. This is a than by encouraging the people to insurance,
and
equity
capital. eve of a minor business recession
a
jsound method of encouraging a own
very
large part of the
in 1948.
Now government loan
Already, the government is the
concerned
Continued from page 7
Thursday, May 25, 1950
. . .
mar¬
real
our
competence
as
bankers.
ginal business and industrial
It is
the
best
emergency in the form of a busi¬
guaranty of our
managing the govern¬
producers.
They are borrowers future as administrators of credit.
Third, the Savings Bond program ness depression to justify a further
ment's financial
whose
liability is re¬ creates a
equity, production costs,
large body of holders of plunge by government into the
markable.
American banking is
and chances
business.
In
another managerial ability,
Treasury Bonds.
As owners of lending
fully aware of the ability with
for survival in a competitive busi¬
fixed income securities, they will great national emergency, Word
which he is serving the nation and
ness
world are highly question¬
have a natural interest in gov¬ War II, government lending re¬
tiie public.
No Secretary of the
able.
Giving them insured credit
ernment
economy,
sound fiscal ceived its second great impetus.
Treasury in the history of the
would in effect be a
subsidy for
management, and in preserving Through government guaranties
country has had so large a debt the
purchasing power of the dol¬ under the V-loan program, credit them. It would enable them, for
NEW ORLEANS, La.—The Bond
to manage, or one more compli¬
a
time, to carry on business in
lar.
Fourth, the program helps to was made available on the secur¬
Club of New Orleans will hold its
cated
by difficult problems of teach the
competition with their competent,
general public the basic ity of government contracts for
annual field day on May 30 at the
refunding and interest rates.
At
need
for
thrift, security, self- many industries producing vital healthy, small business competi¬
its recent annual meeting in
Country /Club, 6800
tors who can stand on their own Lakewood
reliance and financial inde¬ war material in tremendous
quan¬
French Lick, Indiana, the Execu¬
feet.
This would weaken other Pontchartrain Boulevard, New Or¬
pendence. These are the opinions tities.
Today, we have no na¬
tive
Council
of
the
American
leans. Sports planned for the day
small businessmen who are able
voiced
bv
the
ABA's
Treasury tional emergency or war, either.
Bankers Association dispatched to
are
golf, horseshoes, and swim¬
Yet government lending and loan to get credit on their own merits.
Savings Bond Committee.
ttie Secretary of the Treasury the
guaranties continue now, as an It would impair the chances for ming: A buffet lunch will be held
May I add that I believe no one
following telegram:
survival and growth of these able from 1 to 2:30 p.m. and a banquet
will challenge this fact: when the instrument of the Welfare State.
"Sound management of the pub¬
dinner at 6:30 p.m.
and
hard
working,
competent,
government
engages
in deficitduties
in
New Orleans Bond Club
Annual Field Day
-
lic debt is essential to the nation's
economic health.
This is particu¬
larly true
now, because the coun¬
try is faced with a debt that is
fraught with intricate problems of
management. Decisions regarding
interest rates, maturities, and the
investment
needs
groups affect
of
various
directly the business
life of the country.
As Secretary
of the Treasury, you have man¬
aged the debt with competence.
The
Executive
American
in which
performing this task."
I,
way
as one
who
was
of
of the
ef¬
you
are
approval with which the Council
forwarded this message to Secre¬
tary Snyder.
The Independence Savings Bond
Drive
know, the Treasury has
just begun its Independence Drive
for United
The Drive
the
Fourth
States Savings Bonds.
will continue through
of
July.
least
that
risk
deficit,
the
to
with
economy
the
as
a
whole, is through the sale of Sav¬
ings Bonds to the public.
I urge
bank in the country to give
every
full support to the Independence
Drive and to the Savings Bond
a
me
feanks
of
Secretary
very
important for the
continue their support
to
the
program.
there is
an
It
is
true
that
apparent inconsistency
in the government's
campaign for
thrift on the part of the
public at
.a
time
when
the
government
is
engaging in deficit-financing and
increasing its debt.' Yet we as
bankers
must
look
at
loans.
We
are
particularly
ap¬
President's New Credit Proposals
I should like to turn now to an
exceedingly important current
velopment in the
legislation
and
of Federal
area
bank
de¬
credit.
As
guaranty
bank
of
credit
loans
and
government
now
has
on
the
the
credit-granting
nan,
Swimming,
applied
to
a
Zollinger,
equally well if it is
small
home
business
for
small
The
recommends that
message
business.
Con¬
the
prob¬
structure.
nia
of
enact
bank
legislation
the
insurance of business loans would
The
owner
must have
loans
up
to $25,000; sec¬
ond,
to
create
new
"national
investment companies" to provide
equity capital for small business;
third,
to
broaden
the
lending
powers
nance
of the
Reconstruction Fi¬
Corporation and increase to
organization
ment
of
within
the
Depart¬
Commerce; and fifth, to
transfer the control of the RFC to
the Commerce Department.
At the
time
his message to
of bills had
the President
Congress,
a
sent
number
already been intro¬
duced, several months earlier, to
provide more # loans and capital
for small
business.
We
are
very
banks protects the whole
economy
against loss, and
not
just
the
banks alone.
This function is the
heart
for
and
economic
chartered
justification
banking
and
it
is
part and parcel of the enterprise
system.
Insurance of loans to induce a
superabundance of business credit
is wholly unwarranted.
The fig¬
have just cited speak elo¬
quently of the ability of small
business to obtain credit from the
ures
I
banks.
More than five and a half
million loans, which average less
than $2,500 each,
by only one-fifth
of the banks, attest the
willingness
of the banks to lend to small busi¬
ness.
Government-sponsored
in¬
surance of loans at a time when
the volume of credit provided
by
both the banks and government
credit
agencies is
already
high
Leon
Jones,
Adams, Hiber-
Building, is in charge of reser¬
vations.
a
Jack Eagle Opens
OKLAHOMA
Jack
the
to
&
Scharff
by the property on which the loan
Government-sponsored
to
cripple the real riskbring tend
about five things: first, to provide taking
function
of
commercial
Wise risk-taking by the
government - sponsored insurance banking.
gress
Frank Williams, Na¬
Jr.,
Committee.
loans.
is secured
owner
It substantial and
know,
the
President
has competence of private lenders.
growing equity in
undermines
the
recently sent a message to Con¬ also
long-run the property.
In
the event
a
of the total credit home
gress dealing with credit and cap¬ soundness
mortgage loan is a bad one,
ital
Lynch, Pierce, Fenner &
Horseshoes, Arthur KeeSt. Denis J. Villere & Co.;
Beane;
Inc., is Chairman of the Field Day
work
is made.
and
a
Merrill
assuming that the principle
home loan mortgage
guaranty
of
would
alertness
is
com¬
Orleans; Drinks, Jackson Hawley,
Equitable Securities Corp. John
no
A loan to
This
various
completely dissimilar.
justification whatever
are
enterprise
slow, weaken¬
ing, debilitating effect on the risk
system.
the
They
for
more
of
Golf, Charles Manion,
tional Bank of Commerce in New
There is
even
are:
and small business loan
insurance.
prehensive of this business loan
insurance proposal.
We believe
it would have an
subtle influence than
part.
Chairmen
mittees
>
that
of which the drive is
program
Snyder has asked the banks to fifteen years
the present ten4*ive the same wholehearted sup¬ year limitation on the maximum
port' to the Independence Drive maturities
of
the
corporation's
they have always given the Sav¬ loans; fourth, to provide small
ings Bond
program
since
the business with technical and man¬
early days of the war.
It seems agerial advice
through a research
to
Dangers of Government Insurance small businessmen.
Of Business Loans
It has been pointed out that the
What is still more
alarming is government now insures home
this: to the
lending program has loan mortgages.
An effort has
been added the new
concept of been made to draw a parallel be¬
government insurance for business tween home
mortgage insurance
you
present when
the ABA's Executive Council took
this action, attest the unanimous
As you
financing
the
Association
appreciation
-expresses
fective
Council
Bankers
financing, the soundest method of
long
life
and
usefulness
of
curities
property, and the long-range
cycle of real estate prices, almost
guarantee ultimate
liquidation of
the loan.
the
the
principal
loans goes into raw
of
the
wages,
expenditures.
The
quickly.
the debt
MILWAUKEE,
The assets behind
Bank
often promptly dissi¬
pated, and the chances for even¬
are
tual repayment
are
The owner of
failing
other
start
js
a
employment,
another
to
or
seek
out
he tries to
enterprise
quickly.
He abandons his
failing business.
On
the
home
to
other
owner
hold
ion
will try
(Special to The Financial
MIAMI,
ard has
tors
Chronicle)
Leon¬
of.Inves¬
of Florida, 1
Fla.—Harold A.
joined the staff
Corporation
Northeast
Second
Avenue,
strenuously
important
he and
loan
reason
Waddell & Reed
usually the
personal
posses¬
his family have.
similarity between
insurance
and
business loan
insurance.
no
■
to his home and
repay
His home is
There is little
home
average
''
on
his loan.
most
hand, the
Building.
Joins Investors Corp.
far less.
business that is
prompt
Chronicle)
Wis.—Gene W.
and
other
Wilberg is with A. C. Allyn &
principal is Co., Inc., First Wisconsin National
ventories,
spent
Allyn Co.
(Special to The Financial
materials, in¬
-
City National Building.
Joins A. C.
In small business
loans,
however,
Okla.
CITY,
is engaging in a se¬
business from offices m
Eagle
whatever to
: small
There is
assume that
(Special to The Financial
BEVERLY HILLS,
ald
H.
Black
the staff of
has
Add
Chronicle)
Calif.—Don¬
added °
been
Waddell &
Reed, Inc.*
I
Number 4910
171
Volume
...
The Commercial and
Financial Chronicle
(2181)
Continued from page 17
democracy, but
with
Spend or Not to Spend—
A Question of Government Policy
a
country
reduce
the
amount
of
Federal
the banking
that amount
ple contend that to get the stock
the
option holder gave up the
option plus cash for the exercise
condition
price and that the option is worth
an
administration, let us say, government bonds in
type of a Chiang Kai-shek system. To increase
of the
To
in
not
The underlying
financing
is
idea of deficit
to
keep
industry
such periods when
going during
people refuse to
invest or spend
their savings. It follows that
there
should be no
and, in effect, create
that
tion,
is
a
result in violent
may
3£
permissible
only
infla¬
in*
ex¬
treme emergencies.
Public opinion should be mobil¬
the
difference
between
market
value and exercise price.
Others
insist that the option is not
"givert
up"
though
as
in
sale,
a
but
is
ized to urge government to work extinguished
in
the
will pay 10%; mortgages, healthy condition in the money
exercise.
necessity for gov¬
to this end. As private citizens we They
8% to 9%; bank loans, 7% to 8%; market.
say that if you exercise a
ernment, over the years, to show
We must first try to avoid hav¬ deficits
must
be on
the
alert and not contract to buy a $100 ring for $50
bank deposits, from 4 to 5%; gov¬
larger than their own
fall for the theoretical
ernment bonds, from 5% to 6%, ing this condition become worse. spent savings.
argument and then sell the ring for $100
To this end, the Joint
of the so-called "spenders." One you have made a $50
for obviously government cannot
Congres¬
profit. But
Our middle
group workers, of
sional Committee on the Presiden¬
of
their
borrow at below the rate which
arguments is, for in¬ on the theory that you "gave up"
approximately 70 million, support
tial Report made the
the banks pay for deposits.)
stance,
that
the
following the
huge national your contract to buy the ring yon
remaining 80 million. Hence,
debt has a stabilizing influence would have no profit.
Now,
when there is danger statement on interest rates: "As it is
For yon
essential that this group—
a
long-run matter, we favor in¬
would have spent $50 plus a con¬
on
the economy—oh,
abroad or war is a possibility,
the backbone
yes, so has
of
our
country— a
terest rates as low as they can be
tract worth $50 to buy a $100 ring1.
and
other
activities
business
rope
around
your
neck, but
be kept vigorous and
free from
without
Neither the courts nor the SEC
that is not the kind of
cease and the funds that were to
inducing inflation, for
stabilizing
excessive taxes that stifle initia¬
low interest rates stimulate
have resolved this problem.
we are
be used for
such activities are
capi¬ tive.
We
looking for!
But we believe
We must try to solve as
idle and rates go down.
It is at tal investment.
recognize that in some cases a re¬
many
Our inquiry into
that the advantages of
fusal to accord value to the option
monetary pol¬ problems as possible
such times that government gen¬
avoiding
stock
erally can step in and sell bonds
tive
Why?
cheaply.
very
the government in
Not because
control rates but
happens that govern¬
the long run can
because it so
generally needs money for
support purposes at the
ment
or
war
time that rates are low, ow¬
very
disturbed conditions in the
ing to
kept low
be
can
whole.
as a
economy
inflation
Such rates
long
as
as the
In the
disturbed conditions last.
are so
the
much
so
freedom
to
serve
interest
rates
ization
world
the
.
over
are
to the
As soon as world conditions in¬
general
the
Re¬
raise
stabil¬
be
re¬
should
cost
greater inconvenience
a
Treasury in its sale of
for
se¬
financing
new
and
Whereas
the last few years
over
Federal
Reserve
seemed
hamstrung,
it
is
lesser
a
evil to
at much
there
that
world
was
rates
money
deemed
stay
there would be
will live up to this recommenda¬
would
scarcity of
be
long
a
cap¬
off,
way
Let
tion
and
thus
take
future. As regards past
had
can
been
developed,
freedom
of
what
wishes
he
taken
were
In
the
in
interest
can
individual
with
to
do
his
society
long
rates
the
savings
from him.
away
free
a
can
the
unless
government
control
run
no
more
than
the
they
control the tides of the oceans.
(5) Must we
not
understand
"interest rates" in order to take a
1
view of
sane
monetary policy and
debt management?
As
i
is
you
a
finer
and
than
the
trade
policy.
bonds
As long
as
System has
and
the
recession to
a
bud,
interest
purchased.
the Federal Reserve
no
commitments other
keep the government
as a
certain level
government
it
Scylla
issue
can
finds
and
so
that the
new
itself
bonds,
Charybdis.
bonds,
the
banks
can
that
re-establish
by
selling their
governments to the bank at the
Minimum price which the Federal
Reserve
Bank
is
morally
com¬
mitted to pay.
Here
bemg
we
face
forced,
the
ill
during
emergency, to place
effects of
the
war
large part of
the
government
bonds,
which
9°ld not be absorbed by private
investors, with the banking sys¬
tem.
This
raises
monetary
-
a
havoc
system,
with
because
our
such
bonds in the hands of the banks
torm a basis -ior credit to the ex¬
tent
private
investors
will
banking system of them.
This,
done
naturally,
could
not
be
overnight, but it could, with
skill and courage, be
period
a
fifteen
of
accomplished
from
during
years,
Federal
be
Reserve
five
to
the
which
Bank
debt
limited
should
to
be absorbed
can
by
of
many times the amount,
■the result is that we
have an un¬
cer¬
amount
an
new sav¬
ings. We should aim to gradually
advances
people
behind
the
in¬
an
govern¬
ment are, after
than
with
cope
we
work
;
than
to
problems
It is often
easier to
schemes
them out in prac¬
carry
combine,
the
theoretical
are.
with
tice.. When
most
all, human beings
me, and often less
and
practise
you
and
apt to
are
hardship.
If a per¬
option for a long¬
during which value has ac¬
crued to it, exercises it and then
sells the stock, he may be re¬
turning long-term' accretions in
son
what to do, form a sub-committee.
The
work
holds
may
theory
the
get
satisfactory result.
a
an
time
value
if
profits
he
is
forced
calculated
option had
to
return
though
as
the
value.
no
On the other
hand, assuming a
value for the option may open up
areas of evasion.
The history on
which this law is based is full of
illustrations of flagrant abuses by
insiders by means of the option
device.
Liability Under Long-Term
Continued from page 13
Options
Several years ago we asked for
The
automatic test of
gradually
But there is
such
no
to
The
permissibility.
test.
Resort
to state law and often
speculation
about the law in untried fields is
sale
all
is
color
a
constant
one's
subjective
temptation
conclusions
notions
of
the
of the proposal to which
has been taken.
with
merits
objection
It is not
an
easy
temptation to forego, but I have
never
permitted myself — either
as
staff member
a
sioner—to
been
that
of
Commis¬
as
yield to it,
tolerant
tions of
or
have I
nor
manifesta¬
any
tendency in
others.
The President did not appoint me
to sit in judgment on the merits
As I
see
few
Section
16
must
government
(b)
"profits
the
need for most of
as
the
realized"
wisdom
tough
we
cases.
The earliest
judicial decision in
this field disposed of the question
of pairing transactions
in cases
where
there
purchases add¬
were
ing to and sales diminishing
isting
holdings.
The court
Smolowe
that
statute
the
profit
out
"to
of
the
purpose
to
of
the
was
all possible
squeeze
stock
transactions"
prohibited period.
the
subtracted
beyond
The
measured
the
six-month
a
rule
would
have
profit in such a
difference between
by the
price and the lowest market
case
sale
within
value
fore
short
a
after
and
period
sale.
mixed
reactions
at that
time, there
to
There
the
rule
The
answer
pending litigation.
has been settled
litigation
without
and,
was some pros¬
pect that the courts would
the problem in
be¬
were
decision.
At the present
circumstances merely requires
the court held that it
within
values
period.
time the Commission under these
prevent possible conflict between
duty and selfish interest. To ac¬
complish
stock
account to the
increments in
any
ex¬
intended
was
to
(in
emphasized
Delendo)
v.
the
necessary
a
not
simple
as
extract
we
statute
not
are
But
have
corporation for
And out of the two words of
job is done when I have de¬
or
problems.
transactions
whether
my
quired,
of profit real¬
case
a matched purchase and
sale and purchase for cash
presents
this.
problems.
simple
or
these
There
a rule designed to as¬
long-term option hold¬
ers would
not, by exercising the
options and selling the stock re¬
on
that
sure
ized from
necessary as an aid in solution of
to
comment
Coiporate Secretary
And the Proxy Rules
banks against
proposal
bonds, first at falls within the realm of stock¬
holder action and otherwise com¬
par and then reduce the advances
plies with the rules.
by 1 or 2% each year.
their
It
lowest
statement
of
conclusion
Section
In
the
16
factswithout
to
as
liability
under
(b).
other
the
cases
Commission
has, of course, exercised its rule¬
making power to exempt transac¬
tions
of
within
the
the
section
The
purposes.
literal
but
most
meaning
within
not
recent
plans under which the officers
Some
of
the
most
difficult
gold, for it
would be the modern equivalent problems we face in proxy clear¬
riod.
ceived
a country in the old days, after ance arise in connection with the
suspending gold payments during disclosure of management profits
method
this
dollar
would
in
discount
within
accomplished, the
were
be
not
Management Disclosures
quoted at a
of
terms
of
the
going
war,
back
gold
a
on
in
short-term
trading.
As you
(b) of the Se¬
Exchange Act provides
basis. The strength of England in
know, Section
the old days was that she did
curities
that
soon
as
idea
then
of
just
possible, with
as
an
being ready for the
for
return
suit
by
to
or
on
16
the
corporation, in
behalf of the
cor¬
of all profits realized
(Just
as
an poration,
athlete, after he has participated by an officer or director in buy¬
in an exhausting game, ought to ing and selling (or vice versa) the
rest and get himself in shape for company's equity securities with¬
next
the
emergency.
next
From
monetary point of view
a
must
we
have
recognize first
not
order
brought
hence,
must
the
since
secondly,
pared
in
contingency.)
that
for
in
and
;w|ar;
be
must
we
higher
we
house
our
last
that
interest
pre¬
rates;
the care with which we
contemplate the con¬
period of
a
many
ence
its
six months.
as
a
proxy
problem.
does raise serious
disclosure
and
But
it
issues of proxy
frequently
occurs
enough
to
sion of
underlying principles.
First:
warrant
Why
is
discus¬
some
an
or
icy
and
debt
cost
of
-
an
management:
We
must
recognize
that there are
certain periods of bad times when
a
deficit
but
that
at
is not only permissible
helpful. That does not mean
deficit
all
times
financing is justified
in
and
all
countries.
Should it result in reckless spend¬
ing, it
mand
may
an.
be
a
lesser evil to de¬
annual balanced
budget.
We may well favor deficits oc¬
casionally
in
a
the
courts
in
suits
on
behalf
of
■
court
was
recognized
different
that this
from
that
used for income tax purposes and
that
this
under
method
"profits"
might be returnable
if
even though,
purchases and sales within
all
six months
were
considered, there
would have been
a
loss.
But only
this method, in the court's opin¬
ion, would comport with the aims
the
of
section.
Compensation Through Options
has
It
cently
ments
been
to
fashionable
compensate
re¬
manage¬
through options. Where the
option is sold within six months
it
has
been
contended
that
the
entire proceeds of the sale should
be
considered profit.
But in a
recent
officer's
short
term
trading
addi¬ director's
profit a subject for proxy dis¬
tional, large government debt.
closure? Section 16 (b) is not ad¬
Summing up
these
delibera¬
ministered by the SEC but by
tions on governmental fiscal pol¬
and
sequences
'v.',/-'
The
Not
of you have had the experi¬
of dealing with such prof¬
any
case
the
Commission
ex¬
pressed to the court the view that
under the exact facts of that
case
if the
options were issued under a
fide
employment contract
and the recipients had no control
over
the
timing, it would be
bona
the
corporation.
But the proxy .proper to consider as the cost
rules provide that a proxy relat¬ basis of the options their value
ing to the election of directors or at the time of issuance.
remuneration
must
the
disclose
of
indebtedness
rectors
and
management
information
of
others.
about
officers,
And
the
di¬
lia¬
bility of an officer or director to
return profits arising from shortterm trading
in his company's
equity securities
:well-managed this provision.
,
comes
within
Complications arise if the op¬
are
exercised,
stock
ac¬
quired, and the stock sold. What
adopted
involved
number
a
its
rule
purchases
six months' period
from the highest sales in the pe¬
If
v
hold these bonds
their reserves
it
buy these bonds and relieve tne
between
If it
has
to
raise
money
rates
and con¬
tract credit, which normally
should reduce the price of gov¬
ernment
tainly
the
cided
than to wisely handle the
money
market, this can be a useful fac¬
tor, but when the Federal Reserve
Bank has to
then
in
it,
the
rates should be lowered and gov¬
bonds
crease
make
in
public, which is brought about by
raising the interest rate and by
selling government bonds.
Con¬
ernment
level—be
market
keep
debt over the years
within reasonable bounds.
Any in¬
of stockholder proposals.
banks
versely, if there is
be nipped in the
bonds
below today's prices—
which
at
sins, they
if rwe are
enough cour¬
government
that
25%
to
on
way
stitution, when they do not know
to
enough
them
same
members of the board of
as
able
large
their natural level and meanwhile
When there is dan¬
the
to
government in the
surpluses
government
would allow the bonds to sink to
boom, there should be
contraction,
with
less
money
for
seek
20
the
you
good times
It
a
available
to
the
only
show
to
allow
to
are
like
.
in smoothing
ups-and-downs
cycle.
of
dglicate in¬
fiscal
be of assistance
out
ger
more
rectified
prepared
age
over
know, monetary policy
strument
can
/
be
of
care
namely, not until the whole world
ourselves, for
inclined to load
we
the years.
v r; ■
We must,
therefore, make every
effort to accumulate in
an
hope that the authorities
us
time
same
if it is
raise them
in order to avoid inflation.
no
the
low
to
necessary
and confidence, the time
predicted
by
economists when
peace
at
over
is, to have government cost of
borrowing greater—than to let
Granted
ital
sound,
keep taxes
within reasonable
bounds, if our
debts are increased at a
rapid rate
and
government bonds go down—that
the
newer
our money
have
domestic
but also
such as Brazil,
keep
to
countries,
Africa, etc., etc.,
higher rates.
alone
not
develop
field,
to the conclusion that
us
cannot
have at
we
any rate gone so far that in the
opinion of the Congressional Com¬
mittee
icy leads
we
that
purposes.
have been
spired confidence, billions of dol¬
lars would pour forth and further
and
a significant increase
charges on the Federal
debt and
the
Federal
should
if
con¬
to be
prove
in service
kept down
ernment
interference
temporarily chaotic.
can
credit
for
even
refunding
conditions
the
purposes
stored
unless
of
restric¬
a
this end that
to
restrict
curities
or
policy
monetary
tribute
long run, however,
they cannot be
except through gov¬
great that
stock
It
bonus
a
in
the
in
form
the
re¬
of
each year.
company
pointed out to the Commis¬
was
sion that the provisions of Section
16
(b)
deprived
the
officers
of the benefits of such
some
for any
sale of stock made by
officer
would
be
months
of
receipt
the
of
plans,
within
of
an
six
sucftt
stock.
Accordingly, he could not
stock
without
running the
sell
risk that he would be required to
return a portion of the proceeds
that sale to the
of
the
a
stock
were
corporation if
issued
to
cost basis less than
stock
which
he
him
at
that of the
sold.
The
rule
adopted
by the Commission pro¬
any
purchase made
pusuant to a bonus or profit shar¬
vides
that
ing plan is to be exempted from
the
for
section
if
certain
safeguards
security holders are observed.
other
exempted,
a sale with¬
in six months destroys the ex¬
emption for the bonus stock as
well, and stocks acquired as bonus
may be matched against the sales.
However,
any
purchase,
that
than
when
expressly
accompanied by
Section
16
standards
is the "cost" of the stock in such
ship which, I am glad to say, al¬
most
all corporate management
case?
Some
have
the market value
the
time
of
and that the
argued
of the
exercise
is
the
profit must be
puted on this basis.
that
stock
at
cost
com¬
These peo¬
now
of
(b)
establishes
fiduciary relation-
tions
a
f*
of
companies which had stock bonus
observes. It is
no
longer
pos¬
sible to observe that profits from ;
insider
usual
office.
trading
are
emoluments
of the 1
corporate 1
one*
of
^
34
'•■♦I.
(2182)
Financial Chronicle
The Commercial and
.
.
Thursday, May
.
Ml.
•>*
.
that because I suggested
buy¬
ing that everything's going to
Tomorrow's
be wonderful.
<v
Markets
f
1TT7
;--v
Whyte
•
^
;$■
,
:
w
I
just
4.
common
finished
:|<
interested
f.
to
I T
law
reading
a
would
make
stocks available
vestments.
common
for
H
Balance of
legal in¬
There's been
lot
a
bullish last week, I
rise.
make
common
International
Washington 25, D.
C.—Paper.
new
stocks
tunes of Industrial Corporations—
Hultgren,
National
business healthy and the economy
expanding, j
,,
glimmering. But I have also been
pointing out that we are living
in a prosperity that is based upon
the inflationary stimulus of large
Cyclical Diversities in the For¬
-Thor
I
real threat
believe that is a very
thought occurred participant in the market
that because I became would
me
economy brought about, they
should force the showing of the
to the soundness of the Treasury
whole economic picture, not cover
and the dollar, and without such -it, so that both parties may face
Payments Manual— soundness the chances
of sus-(the economic facts of life together
Monetary Fund, -tained economic expansion
go in
the interest of keeping the
I
in times of prosperity.
deficits
a
change in the New York State
ments, market letters and the of talk about how this
like and the
in
that
aware
from page 14
Economic Expansion:
Promise vs. Perfoimance
■
,
with thousands of
people
markets, was
of financial news, state¬
ream
<'''%
■
in
=By WALTER WHYTE=
vf
*
other
Says—
V
1
.
$
For the past few weeks I,
li/ri
Walter
'V
■
¥
Continued
25 195
Bureau
s
<
V
.
.
Industrial Pea^ce and Fiscal SoundnesBthe Twin Engines of
now dis¬
hope all this material¬ of Economic
government spending. If thisstimResearch, Inc., 1819
ulus were withdrawn, we should
Economic Progress
agreed with all the pessimistic izes though I fear that all this Broadway, New York
23, N. Y.—
have to face the problem of supIn closing, then, I believe that
news
I just waded
through talk is likely to be a lot of Paper—500.
plying jobs in private industry to market balance through collective
and blithely agreed with all moonshine.
Nobody with the
those
How Much Social Security Can offset
dropped from the economic
adjustment of pricethe bullish interpretations.
intelligence that fiduciaries We Afford?—Leonard J. Calhoun public payroll or employed on income relations is one of the
are
sje
sj«
*
supposed to have is going —American Enterprise Associa¬ government contracts. Even if full twin engines to power the car of
to jump in
merely because an tion, Inc., 4 East 41st Street, New employment were attained, pass- economic progress. The other, I
I suppose this is natural.
York 17, N.
ing out of an inflationary situa- need hardly repeat, is sound na¬
invitation
Y.—Paper—500.
«s
n?
.
V»;
;
j'.' ;v
,'"N\
/?:*»»•
has
Whenever
stock
than to bolster his stand.
ffc-
S
*
same
Ji'.St
r
M
X>>).
j»i
If
rfc;
thing applies in
sells
one
then
I*
?"
*
long of
goes
a There'll
digs for all the con¬
firmation of his original
posi¬
tion, if for no other reason
»#■
i? •*,
one
reverse.
or
goes short from
all the bad news one
on
lay his hands on is read
voraciously. While I recognize
I'F".
this
as
and
H?
as a
desire for
company
reflection of mob
psy¬
a
7«v
i'tU
The
can
r'V-
chology, I also see in such a
a
danger. But so far
■
stand
'
'-'Mr
be
been
made.
r"iv
But
vice
'*!■
give
peated.
1
ing stocks.
■'M
.vi
at
:
&
29,
and
The first
the
*
Timken
a
stop at
a
stop
those of the author
''gn u.E.
or
.'■M'
SAN
FRANCISCO, Calif.—Har¬
old E. Work and
so,
31,
Sf
from here
so
rj w
'
i
on
-we'll
carry
the stock at the latter
The last, Timken
'11
■m
available at 17.
George I. Long,
„
Trading Department for the
Wells Fargo Bank & Union Trust
figure. Co.
Detroit, was
That brings Mallen,
ture, though this doesn't
mean
McMicking & Long
"
'ify
Has the Market
»iiv.
Further
-•J
a
securities
business from
preciation
.«■' u,
;i»
concise
■
■
"
•*
i.w
00
vO
fl:
;.
or
(Special to The Financial
Chronicle)
OMAHA,
to
Neb.
—
!*
City, Mo.
;
I ■'?
»■*
v
*«
\L
-
while
serving capital in the
BONDEX
con¬
on
Pacific Coast Exchanges
market
Schwabacher & Co.
Today
New
Members
York Stock Exchange
Exchange (Associate)
San Francisco Stock
Exchange
Chicago Board of Trade
INCORPORATED
1654 Madison Ave., New York
14 Wall Street
Publishers of
BANKERS INVESTMENT SERVICE
Avenue, New York 21, N. Y.
Students of
t
of
*
Liberty—Leonard
E.
Read—Foundation for Economic
Education, Inc., Irvington-on-Hudson, N.
Y.—Paper—500.
ANGELES,
frey C. Ettleson
Los
that decade.
nA' sh'tft?
.12
1
sue-
But if so,
it will
re-
good faith and
will
or
satisfactory
compromised settlements based
not
the
on
do
to
rely
strength and
either
party
bargains."
to
-
Since the war, it has been posover
most of our business
all
wage-price adjustments which
truly stabilizing in their
effect and thus pave the way for
economic growth.
The
is
Calif.—Geof¬
now
Angeles office
of
with the
Francis
I.
Co., 634 South Spring
He
formerly with the
claim
share
a
profits.
to
Or
push
ployers
•
@ 89% Aug. 22 $462.50
Plymouth Oil <g> 48% July 26 312.50
Std. Oil (N J) @
76% Aug. 25 325.00
J. I. Case.... (5)
44% Aug. 11 287.50
Boeing ,....@30
Aug. 21 237.50
Atch., T.&S.F. @ 115 July 14 375.00
.
Norf. & West.
@47% July 24
Bethm. Steel. @ 37y2
Aug. 4
Grumman Air. @ 27% July 28
Noma Elec... @ 14%
Aug. 17
Cutler Ham'er @ 29.70 Nov. 29
Subject to prior sale
or
225.00
237.50
187.50
it
Put
&
Dealers
50
Calls
the
tional
up
to
price change
Brokers
<fe
Assn., Inc.
and
wages
the
pass
for
added
debt.
labor
includes
It
that when you
in
put
labor-saving devices, the
should be "free
riders" on the industry; who think
tempting
possible
was
write
freed
that if
for
workers
you make employers guar50 weeks of work a year
antee
em-
and
costs
.
$200
pension after
month
<a
in higher prices.
But as full
inventories and well-stocked lar-
expansion that everybody will be
ders,
able to
living-rooms,
and
60, that will
garages
cause
buyers' lassitude and then
resistance, it will become neces-
of economic
expansion
accept
by private
the
meet
can
view
this
that
helps, but undermin-
ing the dollar is
not
the
way
to
assure
long-run economic growth
progress.
Management and
organized labor will have to hamand
out
tween
a
workable
themselves
answer
hand
or
time
to face this need
all-inclusive
adjustment is
eral
the
rains
collective
Fix the roof be-
come.
aware of the
bring
pass.
f
an
I
am
harped
good
not
un-
difficulties in trying
that
But I
s
methods
sides.
ideal condition to
believe the chance to
speak
prevail
and
is
ever
margin of profit just as much as
productive dollar. It includes all
a
those who clamor for tax relief
in prosperous years when every
million of lowered taxes means a
million in increased national debt,
to spur inflation and cloud
confidence."
ness
*
In
a
s.j
4-u
*aeY
scientific
better, today
•5
e n In g their
y ^ave nothing to
vvant to
see
beneficial
(• ].!-
presentto
to
the
con-
for
the
It
all
processes
enable us
real wage,
profit figures and
values, genuinely ex-
productivity
to
that. will
write
larger
property
panded national income accounts'
and balance sheets.
In my
I learned the Scripture text,
youth,
"Seek
y-e first the Kingdom of God and all these things will be added unto>
mula
most
our
-reference
with
tickets ;and
you."
.
word,
busi-
-
will
buy true and solid expansion. In;
fact, only honest work and sound ;
investment will bring the enlarged;
hnrtS"10?* J? ~° p
S'-t
final
.
.
inflationary
says
before. Hence, I think
employers should reexamine
their
Broadway, N. Y. 4, Tel. B0 9-8470
cuts
wasted dollar carries a.
economic progress seems to me
put the horse before the cart.
of mutual
bargaining in
taith on both
a
The
powers.
You will note that I
have
0
because
performance
while the gensituation is still
economic
and "five
"pork barrel"-
procurers
and
and
now
reasonably good.
tore
on
beover
fast-growing
of
on
ment expenditures or impede
job of economic expansion to
government of
soon
lean
percenters"
prob-. Congressmen who run up govern-
by pouring out more monetary purchasing power indefinitely. There are times when a shot
arm
their
"featherbed"
to
to silver producers but to those
of .any metal that looks like a
promising candidate for a military
stockpile. It includes contractors
who
cannot
want
market with subsidies not merely
tivity, or to reduce volume. The
latter, of course, sounds the knell
enterprise.
and penmanufacturers
wages
includes
It
who
such economic
cause
these
pay
sions.
sary to check cost advances or
effect declines, to
step up produc-
137.50
137.50
THOMAS, HAAB & BOTTS
Members
in
to
want
groups who think
on
the
Per 100 Shares Plus Tax
Gen. Motors
cen-
banking machinery for monetizing it have made it possible to
raise prices and then for labor to
mer
was
our
It includes
the country.
who
and who want the inevitable surplus bought and carried out of
deficit funds—irthat is, as an addition to the already gigantic na-
sustained
debt and
eco-
parity
formulas at levels, even higher
than the emergency rates used in
the war to stimulate production
would be
war
wicked "They" in Wash-
In fact, it is the bad
over
those
field to avoid any real showdown
swollen
na-
performance is
nomic performance of an easygoing, greedy, and reckless "We"
so-called
sible
on
a
ington.
our un-
dangerous
economic
that of
ruthlessness
the
austerity,
that
say
and
tional
forced
on
^ *ace
uP°n
It is easy to
:
verified facts,
on
It
during
.
hut if we wont even slow down
the joy ride, we shall probably
end 111 the ditch,
the test of
was
a
^
?a,
more
quire true economic adjustments
collective barganing in
aition
v
even
the transition from deficit to balani:e conditions. We need not be
sincerely
through
in the
SPECIAL CALL OFFERINGS
Monterey—Oakland—.Sacramento
Fresno—Santa Rosa
I
lem
firm in New York
City.
San Francisco—Santa Barbara
I
'30s.
intelligently—than
I
(Special to The Financial
Chronicle)
LOS
Teletype NY 1-928
Private Wires to Principal
Offices
iiiaiiniiiiniiiiHii
New York 5, N. Y.
OOrtlandt 7-4150
21
32
M
u r r e n
tions—Current bulletin plus next
four weekly issues on
special trial
•
decline ahead.
the
private
our
have had to
we
strong and aggressive labor groups
probable stock market reversal—
and also 33
special hedge selec¬
Securities
Orders Executed
of
test
trust that it may be more
cessfully met—which means
a
New York Curb
!j'1
V-
Y.—Paper—$1.00;.
Stock Market Top?—C
bulletin offering an
Street.
Pacific Coast
Get SPECIAL TRIAL
OFFER
of Current Bulletins
plus next
4 weekly issues.
i,
N.
du Pont &
special stability hedge
selections for
Send $1
s?
J.
unhedged analysis of
INCOME
William-Frederick Press, 313
35th Street, New York
1,
West
'
Clarence
Parrott is with Waddell &
Reed,
Inc. of Kansas
security
HIGH
The
Of Francis I. du Pont
mf
i''
j
—
and also recommend
.
'
income
Stock Market Reversal
V' it-
■*
or
since
face
a
Ettleson in L. A. Office
With Waddell & Reed
probable
r #
""'^1
!"
Gains?
real
enterprise system
government
Strength for
Substantial
agement and labor will be put to
the first
eager beavers"
}YG c?nn<^ t°re§® expenditures
tor the development of the couneven though deficits mount,
They
we. cannot let employ-
tral
Witter & Co.
SELL to conserve
capital for
future buying spot?
Our current Bulletins offer
f 3\
f
McMicking was formerly with
Irving Lundborg & Co., and Dean
tortoise. The
1951
Organic Nature of Human En¬
terprise, The—J. O. Hopwood—
are
Mr.
in
later, I do not know.
or
inflationary potential created by
Part¬
T. Kevin Mallen, Henry
A. McMicking and
George I. Long.
come
Princeton, N. J.—Paper—$2.00.
FRANCISCO, Calif.—Mal¬ offer—$1.00—Department 32, Bonlen, McMicking & Long is engag¬ dex Incorporated, 654 Madison
ners
Should you seize this
oppor¬
tunity—to BUY stocks for ap¬
"i
Observations—Oskar Morgenstern
Princeton University Press,
SAN
offices at 100 Bush Street.
rrt*
,
analysis
(Special to The Financial
Chronicle)
ing in
STOCK MARKET
TOP?
v
Accuracy of Economic
—
of the
back into the bullish
pic-
us
m
if
S
Work & Co.
the
On this point, our
present national position repeats
the famous case of the hare and
But whenever it does come, man-
80 Fifth Avenue, New
N. Y.—Cloth—$6.00.
only.]
(Special to The Financial
Chronicle)
Detroit
stop at 14.
in at 18
came
Cer¬
On
a
1955
or
Publishing
,
tional finances.
market
,
Whether this will
Lower Prices
Coming—William
views
keener
mean
competition and living with lower
prices.
;
X
^
of
the low
'/"fit
#
&
to
*
Jr., have formed H. E. Work & Co.
during the week was with offices at 100 Bush Street to
I8V4. The second was avail¬ engage in a securities
business.
Mr. Work was formerly Manager
able most of the week at
,./•?«
v.
were
at 33 with
Axle at 17 with
i**;
V
These
15; Flintkote
I'" f' ':
-
■
[The
*
tain-teed at 18 with
■
r
*
Guide
expressed in this J.
Baxter—International Economic
article do not necessarily at
any Research
Bureau,
76
William
Last week I recommended time coincide with
those of the
Street, New York 5, N. Y.—Pa¬
the purchase of several build¬ Chronicle.
They are presented as per— $1.
<■
I:
•
until
*
*
Annual
—B. C. Forbes & Sons
picture again Co., Inc.,
switch so the ad¬
York 11,
last week is re¬ changes we'll stay long.
warrant any
/'Jt
1950
•
there's little in the market to interruptions here and there.
-
Forbes
tions before
any real amount Investment Companies—A Manual
on Mutual Funds—B. C.
of
Forbes &
money is invested in new
Sons Publishing Co., Inc., 80 Fifth
mediums. And even then it is
Avenue, New York 11, N. Y.—
presumptious to assume that Paper—$15.00.
.J-.;"
managers of large sums of
Impact of Estate and Gift Taxes
money will buy any or all
on
Property Disposition, The—
stocks at the market.
Charles Looker,
Proskauer, Rose,
*
*
Goetz &
Mendelsohn, 11 Broad¬
What is in the immediate way, New York City—Paper (re¬
printed
from
California *vLaw
future is
something I* can't Review).
foresee. I think stocks are
go¬
Inside Story of the Stock Ex¬
ing higher, subject to various
change, The—Humphrey B. Neill
-
would
tion
investiga¬
many
one
I suggest as America's
for
Seek first
a
sound
sincere
economic
a
solvent
dollar,
as
if
a
one
for-
expansion:
government,,
day's labor as
were
working
'
fnr
runs
Number 4910
171
Volume
The Commercial and Financial
. . .
himself, a management that
its enterprise to create 30b
Continued from
;
/, *
Chronicle
(2183)
paqe 5
at 260.66
Ssl£l¥IFEf,3 The State, of Trade
"eek
of economic
this kingdom
catch up with it overnight.
efficiency, we shall find that all
L blessings of economic expan¬
unto US.
consumers
and Industry
*
It will be many weeks before
quick
most steel items.
on
are
compared with 259.85 a week ago, and with 248.92 on
the like date last year.
Grain markets developed an irregular trend with most grains
convinced
that they
face
thus far without
McDonald Co.
Detroit ExcK. Member
G. G.
Orders Tor
success.
nearly aill major products are still pouring in
can turn them
out, adding to the tremendous
faster -than the mills
backlog.
a
By the end of the summer the mills
full month behind mn deliveries. This
are
expected to be
them to drop
catch up
may cause
a
The Detroit
Stock Exchange
announces the
admission of C. G. -McDonald as a
member of the Exchange and the
registration of the firm of C. G.
[McDonald & Co. with offices in
the Penobscot Bldg.
DETROIT, Mich.
—
Riddel!
and
schedules
they
so
can
over.
putting
more pressure on the steel market
mokers, states this-;trade
auto company was
last week,
but
shipment from
facing
an
paper.
In suite of this, one
immediate shutdown for lack of sheets
bailed out at the last minute by a stop-gap
Appliance makers are also
continuing their torrid pace, using the steel ,as fast as they get
it.
was
of its competitors.
one
their products aren't
And
in warehouses.
firm, R. Ward Richardson
i will be Secretary and Treasurer
G.
start all
No other group is
new
James
out of their allotment
than the auto
In addition to Mr. McDonald,
I who will serve as President of the
and
month
with deliveries and
i
I
long-term
a
problem m procurement of cold-rolled sheets.
Hence they are
-trying-to make conversion deals into the first quarter of
1951, and
J,
'
be obtained
can
Some
have been added
progress
sion or
delivery
They
are
resting
being sold.
on
distributors' shelves
or
Warehouse prices have been increased
by $2 to $4 a ton on a
H.
number of steel products.
Although the increases are fairly gen¬
eral, prices have not been raised in all areas, declared "The Iron
Age."
| Allen Campbell will be directors.
reacting lower after reaching new highs for the crop year to date
earlier in the week.
The easiness was largely influenced by the
advent of more favorable weather in the Central West and North¬
west, which permitted a resumption of planting and field work,
and improved prospects for winter wheat due to scattered rains
in the Southwest.
Liquidation induced by
tributed to the
New
KANSAS
&
three
;
operating rate of steel companies having 94% of the steelmaking capacity for the entire industry will be 101.8% of capacity
Representatives
Fitch
new
for the week beginning May 22, 1950.
last week's rate of 101.3%.
CITY,
Mo.—Barret,
have opened
representative offices.
This will be the
Inc.,
Co.,
The American Iron and Steel Institute announced this week
-
that the
100%
at
Frank Oberg is representing the
Clay Center, Kans.; George
This week's operating
Wilson
Kansas.-
•
000
in
Manhattan,
V v-:-A A; : !l!
tons
'
CINCINNATI, Ohio —John J.
O'Hara has become associated with
Benj. D. Bartlett & Co., 313 Vine
Street, members of the New York
Cincinnati Stock Exchanges.
O'Hara, who has been in the
investment business in Cincinnati
The
The Department of
Agriculture estimated the probable winter
drop of 74,000,000
bushels compared with the April 1 forecast, and 210,000,000 bushels
short of last year's production.
Market receipts of corn were somewhat larger with prices
holding firm under good demand for current offerings.
Trading
in grain futures on the Chicago Board of Trade slackened off
considerably to a daily average of 42,700,000 bushels, as compared
with 55,200,000 bushels the previous week.
\
Domestic flour business continued to lag although some mills
reported a moderate expansion in shipping directions.
Export
demand for flour was fairly active.
Trading in cocoa futures was
active; prices advanced to new highs for the season reflecting im¬
proved demand at gradually rising prices for actual cocoa.
The
coffee market developed a slightly easier tone at the close.
The
lard market was unsettled with trading volume below a week ago.
Prices
were
100.3%
and
it stood
at
It
Reeves
(Special to Tip: Financial
Chronicle)
19,765,000 kwh. lower than the figure reported for the
Carloadings Cut by Kail Strike
Loading of
totaled
freight for the week ended May 13, 1950,
according to the Association of American
a decrease of 27,390 cars, or 3.7% below the
revenue
716,650
cars,
This
was
were
reduced during the week by
a
strike of firemen
four large railroads. A
The
week's
total
represented
below the corresponding
7.1%
130,295 cars,
or
Auto
decrease
of
55,088
cars
or
week in 1949 and a decrease
of
a
15.4% below the comparable period in 1948.
634
South
&
Exchange. He
formerly with Holton, Hull
Co., and prior thereto
..each Manager
for
& Co.
was
ported by the New York Cotton Exchange Service Bureau, totaled
4,305,332 bales, compared with 3,324,237 in the same period last
year.
The Bureau also reported a slight gain in the daily average
rate of cotton consumption during April to 36,200 bales, from
35,900 in March and 29,300 during April a year ago.
Retail and Wholesale Trade Shows Moderate Gains
With
previous week's total of 174,480 (revised) units. week wgs
output
as
-
production from the previous
accounted for by a decline of 6,000 units in Chevrolet's
a result of the rail strike, "Ward's" said.
The total output
for the current week was made up of 136,325
built in the United States and
and 2,280 trucks built in Canada,
v
and 29,120 trucks
cars
6,295 cars
a
crease
total of
is
now
Neb.
with
Alonzo
Lamson
H.
Commercial and industrial failures in the week ended May 18
the preceding week, Dun & Bradstreet,
Despite ;this decrease, casualties were above a year
when 172 occurred and were more than twice as numerous as
92 in the comparable week of 1948.
Failures were 31% below
total of 289ireported in the similar week of prewar 1939.
Co., Stuart Building.
He was
Previously with B. C. Christopher
Inc., reports.
ago
the
the
trade groups except wholesaling had a decline
during the week. The decline was more noticeable jn
retail trade whetfe casualties!ell to 99 from 113. Retailing failures,
however, were Appreciably above a year ago when 69 were re¬
All industry knd
in mortality
A. C.
(Special
,
Allyn Co. Adds
to The
°MAHA,
Financial Chronicle)
Neb.—Robert F. Hall
A1? bec°me connected with A. C.
£ P° > *nc> First National
ank
Building.
ported. Comme(g£al service was the only
casualties than
The week's
With Cantor, Fitzgerald
(Special
„
to The
is with Cantor,
erly Drive.
Fitz¬
Inc., 211 South Bev•/..
Ri^ID9EFIELD
PARK,
N.
J.—
vy is engaging -in a
unties business from offices at
Garden Street.
seon
^
,apd the East North Central states.
Slight increases -prevailed in four other
regions while casualties
unchanged th one area.
.
'
-
..
Food Price Index
•
•
'
'
■
"
.
very slightly in
in past weeks.
.
'•
/
Commodity J?Jape Index Rises to 15-ftfonth High
,
it&ggoriual upward trend, the Dun & Bradstreet
daily wholesale com^Sdity price index last week advanced to
the highest level
past fifteen months. The May 16 figure
Continuing
*
slightly last week,
helped to
the past week.
Furniture eustomers
There
sections.
was
a
were
goods dipped
The rise
was
in
ago.
less noticeable than
v>
-
increasingly plentiful with outdoor
room
chinaware
contraseasonally.
'
sets especially popular.
seasonal demand for gardening
Interest
year
demand for house-furnishings increased
consumer
furniture, bedroom and dining
and
similar
tools in
small
some
household
Appliance buying continued at
Total retail dollar volume for the
period ended
on
Wednesday
«
ago. Regional estimates varied from the levels of
by these percentages:
a year
year ago
New England, East, and Pacific Coast -f1 to —3; South 0 to
—4; Midwest +3 to —1; Northwest —1 to —5 and Southwest 0 to
+4.
Following renewed activity in the gray cloth market and a
volume rose moderately
last week.
Total dollar volume was very slightly above that for
the corresponding 1949 period.
The number of buyers attending
various wholesale centers increased moderately and was slightly
spate of apparel reordering, wholesale
above the figure of a year ago.
Department store sales-on
country-wide basis, as taken from
ended May 13,
1950, advanced *8% from the like period of last year. A decrease
of 10% was recorded in the previous week from that of a year
ago.
For the four weeks ended May 13, 1950, sales reflected no
change from the corresponding period a year ago, but for the year
to date show a drop of 3%.
a
the Federal Reserve Board's index for the week
Holds Unchanged at 15-Month Peak
unchanged at $5.89, the Dun & Bradstreet wholesale
food price index/for May 16 continued at the highest level since
Jan 25 1949, when it stood at $5.91.
The latest figure represents
a rise of 4.1%^v$tthe $5.66 of a year ago, but it shows a drop
of 14.8% from tbe#6.91 recorded on the corresponding date ;two
Holding
years ago.;-'
Richard Levy Opens
oo
decline was concentrated in the Pacific, Middle
Financial Chronicle)
beverly hills, Qalif.—Oscar
gerald &
Co.,
other group having more
1^1949.
Atlantic, West North Central
were
buying for both men and women reflected
retail prices of some basic foodstuffs
dollar volume at a level slightly below a
The over-all
level of
Slightly
declined to 199 from 217 in
Bros.
in sportswear
maintain
a
®
in part of the
of last week was estimated to be from 1% above to 3% below the
Business Failures Ease
(Special to ,The
Finajncial Chronicle)
buying
last week's level.
like 1949 week.
Joins Lamson Bros. Staff
Day
expensive
.with 117,188 units produced in the
The week's total compares
last-minute Mother's
on
In the purchasing of women's wear, accessories were notice¬
ably popular in scattered localities; ready-to-wear dresses and
lingerie were eagerly sought by many shoppers.
The interest in
coats and suits was largely limited.
The demand for men's
apparel, except for haberdashery, declined moderately.
An in¬
The drop in United States car
Long
Palmer, Miller
the
Wednesday of last week, over-all retail volume
rose slightly; dollar volume remained slightly below the level of
the similar 1949 week.
Sales were also partly aided by the return
of seasonal weather to many areas of the country, Dun & Brad¬
street, Inc., reported in its latest summary of trade.
less
—
pJ^GOLN,
lis
print cloths and broadcloths was the largest
While the total demand for food increased
Output Declines Due to Rail Strike
According to "Ward's Automotive Report" for the past week,
vehicle production in the United States .and Canada de¬
clined to an estimated total of 174,020 units, compared with the
the
of
Stock
was
[.&•*
prices moved
the approach of the summer season.
.
ANGELES, Calif.—Stuart
\rr?wn has become affiliated
Co.,
cattle
Cloths.
period ended
LOS
members
as
all of last week's losses.
Exports of cotton for the crop season through May 13, as re¬
?
was
&
Brown With Morgan & Co.
&
further strength
showed
recover
irregularly during the week
with final quotations little changed from a week ago.
Easiness
in early trading was influenced by profit-taking and hedge selling
induced by the recent advance in values, reports of generally
favorable weather conditions for the new crop and continued
heavy repossessions of 1949-crop loan cotton.
Supporting factors included mill and export price-fixing, the
bright outlook for export trade and an improved demand for print
motor
Morgan
market
Hogs continued to advance with current values at the highest
previous week, 589,289,006 kwh., or 11.2%, above the total output
May 21, 1949, and 759,149,000 kwh. in excess
of the output reported for the corresponding period two years ago.
on
Co.
spring Street,
Los Angeles
beef
since October, 1949.
Domestic cotton
for the week ended
Wil¬
liam H. Byrens
has become asso¬
ciated with J. B. Hanauer
& Co,
639 South
Spring Street. He was
with
dressed
prices turned upward to
Sales volume in
of
Institute.
Loadings
Financial Chronicle)
formerly with Daniel
ago
preceding week.
With J. B. Hanauer
—
year
.electrical energy distributed by the electric
light and power industry for the week ended May 20 was esti¬
mated at 5,844,561,000 kwh., according to the Edison Electric
Railroads.
ANGELES, Calif.
a
slightly easier in sympathy with weakness in vege¬
table oils.
Electric Output Continues Downtrend
amount
was
& Co.
(Special to The
industry compared to 1,931,-
with
Cincinnati manager for
Granberry
& Co. and was with W. E.
Hutton
LOS
production
the Institute,
A month ago the rate was
production amounted to 1,912,000 tons;
94.1% and 1,734,700 tons.
w
for many years, was
formerly
Hill & Co. Prior thereto he
steel
to
sharp break in soybeans also con¬
since last fall.
(Special to The Financial Chronicle)
and
week ago.
one
O'Hara With Bartlett
Mr.
of
rate is equivalent to 1,940,600 tons of
steel ingots and castings for the entire
Lawrence, Kans.; and
Robert
J.
sixth consecutive week
of
capacity or better, and, according
the largest in the history of the industry.
firm in
Hedrick in
This is one-half point above
a
decline.
wheat yield as of May 1 at 690,000,000 bushels, a
The
Barret, fitch Co.
£5
Retail trade here in New York last week
was
subject to the
whims of the weather and sales volume, as a consequence, con¬
tinued below the level of the comparable period of last year.
According to the Federal Reserve Board's index, department
store sales in New York
City for the weekly period to May 13,
1950, rosb *5% from the like period last year. In the preceding'
week a decrease of 14% -was registered from the similar week
of 1949. For the four weeks ended May 13,1950, a decrease Of 3%
was
reported from tfce Uke weekpf last year.
/volume decreased by 16%.
*
on
For the year to date
'
•
•
Changes from a year ago reflect In part the fact that Mother's Day occurred
May 14 this year while in 1949 it was on May S.
A
I)
•>♦»,
'!'
'
J*
C(yfTifnercidl and Findnciol Chronicle
The
(2134)
...
Thursday^ May
25
19^
■
''
"•hi
latest week
month available.
Business
Activity
week
''Mil.
or
or
month ended
on
Latest
Mi,.
AMERICAN
;%
Indicated
IRON
AND
STEEL
steel operations
(percent of capacity)™..
Previous
Month
Week
Ago
May 28
101.8
101.3
May 23
(net tons)
1,940,600
1,931,000
94.1
BRADSTREET,
of
April:
England
New
Crude
;aHs
r;?v
oil
Crude
condensate
IK
to
runs
Gasoline
\
and
output
South Atlantic
—
daily
stills—daily
——_
—.—
(bbls.)
output
4,955,300
4,998.800
May 13
5.113,150
115.427.000
5,399,000
5.116,000
5,216.000
18.264,000
18.270.000
16,820,000
17,506.000
2.047,000
5.058,450
2.056,000
2,044,000
7,162.000
6,767,000
7,541,000
8.519.0C0
May 13
i,
,i ■ i,.
125.851,000
127,431,000
133,458,000
Kerosene
Gas
(bbls.)
May 13
oil,
13,916,000
13.364,000
12,686,000
121,596,COO
19,750,0e0
May 13
38,139,000
37,466,000
37,499,000
52.545.C00
May 13
at
distillate
and
Residual fuel oil
fuel
(bbls.)
oil
(bbls.)
at
at—.
39,255,000
38,766,000
39.881,000
Central
West
61,797,000
—
.
OF
AMERICAN
freight loadea
Revenue
,v,
Total United States
York
New
$445,978,656
York City
of
INC.—Month
—
—
FAILURES—,9UN
BUSINESS
&
freight received from connections
-V.'
'
May 13
(number
of
744,040
707,272
771,738
May
cars)
716,650
655,734
658,657
655,179
620,305
6
CIVIL
ENGINEERING
Total U.
fin
—
93
Public
CONSTRUCTION
ENGINEERING
—
State
,*.,
$206,029,000
$183,343,000
$185,708,000
municipal
90,214.000
105,753,000
93,129,000
79,955,000
98,750.000
91,963.000
64.654,000
67,800,000
83,724.000
12,110,000
28,475,000
12,155,000
63
75
10,115,000
*10,820,000
11,360,000
l*l,.
coal
and
lignite
Pennsylvania
anthracite
(tons)
.
(tons)..
(tons)
Commercial
CIVIL
11,141,000
May 13
...
—
999,000
953,000
778,000
♦WflPARTMENT
103,500
*125.600
115,600
149,000
STORE
TEM—1935-39
SALES
INDEX—FEDERAL
RESERVE
SYS¬
Public
AVERAGE=100
May 13
308
*301
285
254
NEWS-RECORD
—
State
.May 20
5,344.561
5,864,326
5,845,636
5,255,272
and
OF
Month
—
(COMMERCIAL
STREET.
AND
INDUSTRIAL)—DUN
A
551,681,000
MtON AGE
'
Total
May 13
COMPOSITE
steel
Pig iron
(per
Gcrap steel
188
217
199
172
.
——
-i
>
gross
(per
.May 16
._
ton)
3.837c
3.837c
3.837c
$46.38
$46.33
$46.38
THE
FEDERAL
Estimated
of
as
Feb.
$32.42
$32.08
$28.92
$22.75
M. J.
QUOTATIONS):
reiinery at
refinery at—.
fKraits
tin
(New York)
f<ead
(New Yoik)
Ciead
(St.
Tlinc
Louis)
10,892
.May 17
at
19.200c
19.200c
18.200c
17.700c
.May 17
19.600c
19.425c
18.425c
18.000c
.May 17
.
77.500c
.
-
at
77.250c
12.000c
11.500c
10.500c
11.800c
11.300c
10.300c
^
I__
12.000c
12.000c
10.500c
12.000c
103.000c
■'
,
14.000c
4.
PRICES
"wif
AT. S.
;S-.
DAILY
•
Government
COTTON ACREAGE
Bonds
COTTON
IT.
S.
Government
Average
115.82
115.82
116.22
11331
120.84
120.84
121.04
118.80
In
119.20
119.41
119.82
117.40
DEPT.
May 23
115.43
115.43
115.82
112.56
108.52
108.34
109.06
111.07
110.83
111.62
23
116.80
116.80
117.20
11437
May 23
120.02
120.22
120.22
117.40
___
^Mav
7
of
as
Linters—Consumed
month
Cotton spindles active
COTTON SPINNING
of
of
as
(.DEPT.
May 23
2.31
2.31
2.30
May 23
2.86
2.86
2.84
239
DEPARTMENT
May 23
2.61
2.61
2.60
2.71
2.69
2.68
2.66
2.78
May 23
14,877,009
April 30
April
Public
ZZZ
2.88
2.88
2.86
3.03
STORE
m
Production
spindle
7,442,000
place April
in
473
472
221
*220
*243"
225"'""
*208
♦239'
DISTRICT,
OF
FEDERAL
Y. —1935-1939
N;
3.22
3.44
3.08
3.26
2.81
2.79
2.94
(average daily), unadjusted
-~~~
(average daily), seasonally adjusted
Stocks, unadjusted
2.65
2.64
387.8
May 13
2.78
381.7
363.5
343.0
186.417
269,661
171.463
147.537
-May 13
211,915
207,307
193,925
166.639
—_—May 13
:—.May 13
93
92
88
79
377.331
404,445
,
(tons)
i
seasonally
235
♦244
217
Y
*239'
237
237
230
231
♦232
$152,034,000
$124,549,000
48,070,000
38,750.000
$143,484,000'
44,426,000'
8,354,000
7,800.000
adjusted_ZZZZZZZ_Z_ZZZZZZ
LIFE
INSURANCE—BENEFIT PAYMENTS TO
POLICYHOLDERS
INSTITUTE OF LIFE
INSURANCE—Month of March:
Death benefits
Matured
endowments
ZZZZZZ
Disability payments
Annuity payments
Z_~
ZZZZZZZZ"'
_ZZZZZZZZZZZZZ_~
at
379,118
271323
-ML,
PAINT
AND
DRUG
REPORTER
May 19
120.5
120.6
121.0
ZZZZ_Z
65,460,000
47,168.000
$288,708,000
$326,023,009
$1,352,000
Z
~
ZZ
$1,489,000
$1,268,000'
21,704,000
19,434,000
63,116,000
values
Policy dividends
INDEX —1926-36
PRICE
8,142,000'
20.500,000'
50,587,000
58,889,000'
$358,738,000
(tons)
AVERAGE^ 100
51,007.000
130.8
Total
(*»
43TOCK
3*1
V
TRANSACTIONS FOR THE ODD-LOT ACCOUNT OF ODD-
LOT
Ml
DEALERS
AND
SPECIALISTS
EXCHANGE—SECURITIES
Odd-lot
sales by dealers
Number of orders
•
K
rt
•
'.■*
Number
lj*
Dollar
(!)
ON
EXCHANGE
(customers'
THE
May
Dollar
*
1.057.132
1.006.291
770.822
541.843
6
$42,327,446
$39,402,651
$30,239,610
May
6
37,284
37.338
28.801
6
258
243
167
216
May
6
37.090
28.634
18,871
May
6
•1.079.127
1.076,774
812.260
516.812
sales
May
6
9,989
9.352
6.237
sales
7.756
May
6
1.069.133
1.067.422
806.023
509.056
May
6
$39,598,777
$38,804,350
$28,677,102
$18,201,523
May
6
343,520
total sales
4
-
——
Other sales
♦tound-lot purchases by
Number of shares
261.850
.WHOLESALE
PRICES
6
343,520
373^930
261,850
NEW
SERIES—U.
S.
DEPT.
OF
6
332.130
285,250
243,750
214,280
May 16
May 16
155.9
May 16
...
——
...
Livestock
^'4
X 'ft
Meats
:
...
*
All commodities other than
*
"Textile
farm and foods
J
and
lighting
Metals and
/ %
metal
Z
Nondurable
4.
>
*Revised figures
May 16
$31,136
17.650
$34,409
13,17$
$312,161
$267,574
108.954
89.962
245.970
204.269
60.738
~
57.104
Total
ARpfs
FINANCING
,
of
(000's
162.9
157.5
170.8
172.8
173.5
169.6
161.8
Individuals
220.3
216.7
194.4
204JJ
*158.7
155.0
163.2
Miscellaneous lending
235.6
*232.0
212.2
221J
147.5
*147.2
146.1
crude
NON-FARM
omitted):
135.6
130.5
130 j
banks
~
"
79,446
193.944
51,479
170.571
133.776
134.411
157.633
218.979
181.961
$1,221,644
Total
"instltutlonsZZZZZZZZZZZ
$1,003,090
$896,796
$1,123,500
$6,316,900
$1,505,250
,
1413
132.2
Banks and Trust
companies
Mutual Savings
147.0
135.3
132.6
170.3
170.1
170.0
168.6
197.8
*197.0
193.8
193
May 16
of foreign
IN
JZ;C,S~FEDERAL SAVINGS
^ I\SLRANCF CORPORATION
March
164.7
135.4
May is
products.
Blncludes 479,000 barrels
$16,629
17,78c
SERIES—
,milii°ns of dollars):
ZZ
155.5
May 16
4 if
*17,256
$402,592
NEW
SALES
Savings and Loan assbciations
Insurance companies
May 16
products
Chemicals and allied
♦$13,880
17,271
&
Durable
152.2
May 16
materials
Building Materials
J
$1,352,000'
17,956
COMMERCE)
InJStSies- February
*155.1
May is
products
'
Fuel
$2,413,000
$13,869
INVENTORIES
160.5
Grains
414.000
170,000'
\
MtAN^£rURERS'
(DEPT. OF
Month
May 16
Farm products
I
'1m
490.000
434,000
■
Sales
LABOR—
commodities
1
445,000
$31,140
.
168^10
1926=100:
All
~
374,000
•
Avn
'Jk
°< A<*»
dealers—
i.
'■>1
ZZ__Z~ZZ
Group
163,310
6
May
...
373,930
May
May
sales
Industrial
$2,171,000
37.026
value
Short
|
19,445
Total
sales
sales by dealers—
Number of shares—Total sales—
INSTITUTE
19,087
May
—
Ptound-lot
|
—
$22,366,643
25.262
other
Customers*
?*i
6
32.672
short
Customers'
'
33.804
6
May
other
PURCHASES
Ordinary
~
shaies
of
INSURANCE
?^,tS?,u-EANCE-Month
COMMISSION:
May
Number of shares—Customers'
J
LIFE
STOCK
value
Customers'
3*.
Y.
N.
purchases)—
Odd-lot purchases by dealers (customers* sales)—
Number of orders—Customers' total sales
Customers' short sales
"r*
!'.??
r P
Sales
Sales
—
—
,-fc
f H
327
FED¬
AVERAGE=100—Month of April:
(average monthly), unadjusted.
Surrender
zl*
b:
23,188,000
23,733,000'
19,801,000'
3.12
-May 23
(tons)
AJnfilled orders
'
i i*
19,805,000'
11,130,000
3.26
2.64
INDEX..
Percentage of activity
'Li
20,340,000
20,340,000
2.81
'
<
20,048,000
8,764,000
3.11
May 23
COMMODITY
received
112,576
20,048,000
3.25
MATIONAL PAPERUOARD ASSOCIATION:
Orders
336,034
73,861
AprillZZ
t
SALES—SECOND
RESERVE
RESERVE
BANK
Stocks
MOODY'S
k
119,394
360.265
Sales
K
r-K
155,824
353,931
_
Group.^
industrials Group
598,502
COMMERCE):
_May 23
:
1,449,180
5,869,427
898,223
23,113.000
30
May 23
Group
Utilities
1,881,498
8,302.175
119,100
April 30
OF
711,511
1.759,305
131,056
of April
.May 23
•tailroad
952
7,369,348
(000's omitted
ERAL
;
May 23
a
2,865
238
....
Im ■s
[h
3,169
COM¬
Spinning spindles in place on April 29_
Spinning spindles active on April 29
per
Bonds
V,
22,821,009
30
consuming establishments as
storage as of April 30
Active spindle hours
Active spindle hrs.
AVERAGES:
6,935
*997
'
16,127,000
of
as
April
105.17
108.34
4,033
♦3,002
■
27,230,000
OF
In public
corpoiate
Aaa
—
public storage
May 23
•>aa
MOODY'S BOND YIELD DAILY
LINTERS
consuming establishments
May 23
___
■
__IZIIZI
bales.
gross
In
May 23
#talhoad Group
Public Utilities Group...
Iniustrials Group
500-lb.
AND
May 23
101.65
f
*7,505
*3,506
(
•"
1_
Production
May 23
iii
102.70
2,310
AND
Acreage
102.57
102.59
1,000
1,99s
PRODUCTION—U. S.
AGRICULTURE—Final:
DEPT. OF
May 23
1
*4.665
r
.
3,007
•i,t
In
Average corporate
i
V'lvi.
i__
3,227
4,305
?
*3.005
*
7,234
________I
MERCE—RUNNING BALES:
Lint—Consumed month of April
AVERAGES:
4,685
■
——1.__Z___—____^
credit
*3,179
*
2,949 "
credit
Charge accounts
Single payment loans
3,339
*6,207
..
3.258
—
13.850c
.May 17
...
:
77.500c
.May 17
.May 17
at—
*10,839
6,207
Service credit
at—
(East St. Louis)
MOODY'S BOND
•'
$15,325
$18,126
i
——
Noninstalment
,
(E. &
.'•-I)
,
♦$18,347
RE¬
short-term
31;
I
credit
credit'
Loan
$45.91
.May 16
Domestic
I
•is
''
49,669,009
credit
consumer
Other
3.705c
.May 16
ton»___
gross
OF
—
•Bectrolytic copper—
Export
))
266,003,009
75,860,000
Automobile
PRICES:
(per lb.)
METAL PRICES
;
315,672,009
294,178.000
*
55,741.000
OUTSTANDING—BOARD
SYSTEM
Instalment
■
1.
$589,693,009
274,021,009
370,038,000
279,442,000
....
^______
J"
623,415,000
335,183,000
Municipal.
credit in millions
BRAD-
INC.
Finished
-.,
$993,453,000
of
1
:
GOVERNORS
SERVE
PftfLURES
Sale
•<.*
$31,930,000
EN¬
construction
construction
CONSUMER CREDIT
output (in 000 kwh.)
bU:
*
$27,900,000
$886,864,000
CONSTRUCTION
April:
j'fW
jnUi:
v'Vm ,;■■
!
6,139,000
1.519,000
5,774,000
2,777,000
1,706,000
«9»iSON ELECTRIC INSTITUTE:
•flectric
Mm
7,859,000
819,000
liabilities
Federal
?"•>;
877
$14,523,000
3,975,000
1,465,000
Total U. S. construction.
W
V
3,317,000
7,179,000
—
liabilities—
ENGINEERING
Private
If
884
$12,241,000
$21,250,000
service
GINEERING
997.000
May 13
.
coke
806
3,807,000
(U. S. BUREAU OF MINES):
•teehive
♦
93
406
15,026.000
May 13
„
—
liabilities
Construction
Total
Ilituminous
-
_———_—
^
liabilities
Retail
49,023,COO
104,073.000
May 18
.
1
.
101,956,000
May 18
May 18
and
COAL OUTPUT
>
74
$7,980,000
———_———
liabilities
liabilities
Wholesole
$147,773,000
May 18
——
.
Federal
,
number
Total
May 18
{"i.
.!
86
44
223
402
76
number
Commercial service number___—_—_—
NEWS-
construction
construction
y-'K'
-
244355
116
398
—f
Manufacturing
S.
Private construction
vK
'
206
3875320?
309
April:
number
Construction
RECORD:
ni;,
:
195
$347007=-
'^*1
V«ilK
•
$448,893,654
48,240,730
400,652,924
BRADSTREET,
number
Retail
388,255,201
57,723,455
City—
Outside of New
Wholesale
(number of cars)
65,937,918
35,885,670
83.446,186
•47,555,461
18,660,953
12,723,98*>
64,935.015
74,909,557
31,135,301
12,141,135
83,973,783
67,539,252
Pacific
RAILROADS:
Revenue
96,407,895
13,188,647
—————
$18,842,667
47,509,445
88,108,955
39,652,228
—
—
41,605,035
69,215,152
—
Manufacturing number
JIRSOCIATION
Year
5,821,COO
7,178,000
oil. and distillate fuel oil output (bbls.)
—/—
May 13
Kesidual fuel oil output (bbls.)
May 13
stocks at refineries, at bulk terminals, in transit and in pipe lines—
Finished and unfinished gasoline (bbls.) at—
:
H*,
,——
—*
Central
Mountain
1,706,000
7,177.000
7,707,000
—May 13
,_
Gas
1 t'
t"k
South
$23,255,763
87,859,715
98,742,832
—
™—.—
East Central
42
—
(bbls.)
average
—
of
——May 13
May 13
,_—
output (bbls.)
Kerosene
(bbls.
average
gallons each)
Month
$19,627,615
—
Middle Atlantic
AMERICAN PETROLEUM INSTITUTE:
Previous
VALUATION —-DUN &
INC.—215 CITIES—Month
PERMIT
BUILDING
1,734,700
1,912,000
of that date:
are as
Latest
'
m
of quotations,
cases
Month
Equivalent to¬
uted ingots and castings
in
or,
Ago
100.3
the!
Dates shown in first column are either for the
that date,
Year
Week
INSTITUTE:
production and other figures for
statistical tabulations cover
i
"b-1
■
The following
Indications of Current
in
f'Mn-
116.5
11S.9
117.2
1133
TRKRF:c?Y AvnR rEJ, tR\\SActi°NS IN DIOF^D
GUARANTEED SECURITIES
Ne? sa^s ;7M°nth__0f Apr":
S
Net
purchases
runs.
•Revised figure.
'
Number 4910
171
Volume
The Commercial and Financial
...
Chronicle
Continued from page 2
Continued from page 12
L A. Bond GEub
Sets Annual Field Day
Security I Like Best
The
LOS
ANGELES,
Calif.
—
Our Confused Foreign
The
much smoother be¬ a whole. This involved installa¬ annual field day of the Bond so unless we
immediately mobilize
cause they
realize the need for tion of proper cost accounting as Club of Los Angeles will be held our resources on a scale far be¬
well as careful control over all
foreign funds to develop their re¬
at the Bel-Air
country Club, Fri¬ yond that contemplated by the
sources,
and consequently give operating expense.
The clue to
day, June 2, Ralph E. Phillips of Administration.
success
in
this
quarter lies in Dean Witter &
their people a much better life.
The
Co., Club Presi¬
inadequacy of American
In my opinion, the
Congress is now working on a management.
dent, announced.
foreign policy can be seen on any
till to insure
foreign investors CTA system has no peer in the
More
It was also revealed by the
than 250
members and map.
against confiscation of their capi¬ managing ability shown by Wal¬
guests are expected to partici¬ insolent Soviet action in shooting
ter J. McCarter, an able
tal so that these countries will be
engineer
pate in the activities which will down the American plane in the
and formerly General
in a position to furnish the maManager of
Baltic with the loss of ten Amer¬
aterials we so sorely need to build Cleveland's city-owned transpor¬ include lunch and dinner, golf,
tation system.
horseshoes, baseball, tennis and ican lives.
up our stockpiles, in the event the
It is an
ironic fact that the
The purchaser of these bonds other sports, topped off by an en¬
cold war should turn into a hot
ahead seems
should
believe
in
the
following
W*Below
I am listing a package points as do I:
First—That
favorite securities:
City of Rio de Janerio (Brazil) tion system is
a
of my
2s,
due 2012,
currently quoted
351/2 -36 V2 •
Brazil 3%s, due 1979, currently
63%-64%.
quoted
efficient
trial
an
1993, currently
quoted 34%-35%.
Colombia Departmental 3s, due
1978 currently quoted 38-39.
Peru—l %-2 %s, due 1997, cur¬
rently quoted 23%-24y4 (interest
rising to 2% beginning Jan. 1,
,
in the
eve¬
General
Chairman
of
field
the
indus¬ Webber, Jackson
an
& Curtis.
Committee Chairman in charge
city of the
of other events include Rufus Car¬
Chicago.
ter, Carter & Co., entertainment;
people
of
Chicago own their own transpor¬ Charles E. Driver, Capitol Rec¬
tation system and will ask for ords, dinner; Thomas Drummond,
and receive
exactly the kind and Paine, Webber, Jackson & Curtis,
judges and trophies; Francis
type of transportation
able and
the
willing to
pay
they
for.
Third—That if the second
are
con¬
United
States
the peak
at
power stands almost at
ning.
transporta¬
of
commercial
Second—That
Chile, 2-3s, due
tertainment program
essential in the day is Stevens Manning of Paine,
fuctioning
and
size of
mass
S.
McComb, Blyth & Co., Inc.,
golf;
Hamilton
Keller,
Paine,
the assaults of
of her
bay before
nation inferior to
a
us
spiritually, politically and in¬
dustrially.
The only fair way to
judge a policy is by the results it
obtains.
war
The primary weakness of our
policy lies in the fact that it has
never aimed at a clear cut, posi¬
tive
objective.
essential
to
is
It
know
absolutely
where
you're
paying about $9.50 a year.
•'Mexican Railway issues yield¬
Atlantic Pact, the most positive
step undertaken by the Adminis¬
tration, is essentially defensive in
10% to 15%,
securities selected.
ing anywhere from
depending on
Bolivians 6s, 7s and 8s,
currently
quoted at 14%, which are expected
to offer a plan in the very near
future.
bad
historical
minds
New York
Stock
dicating
vestor
for
the
of
the
that
the
/
)'
-/r"/
v
classification
which
in¬
in¬
selected
is
type
security
of
I
I
' ' '
";
q
u
SAN
Francisco
San
elected
Bond
Club
has
H. Taylor Peery, Bank of
America,
President,
Alexander
McAndrew, McAndrew
&
Co., Incorporated.
Witter
Dean
&
Co.,
to
succeed
Ted Baker,
named
was
Vice-President.
BROOKLYN,
'
r
-
.
Company
N.
Lawrence
Y. —Dansker
106
Montague Street.
become
1
Wall
Steinbugler will
a
partner in Mol & Co.,
Street, New York City,
Exchange,
on
Stock
June 1.
term
o r
i t y
at
time
Notes
NSTA
a
r
in-
n
c
^
,
called
term bonds
to
risk bond,
are
the
writing,
rne
income
are
of 94
4.10%
33/4S
selling at a
to yield ap¬
to maturity,
is exempt from Fedtaxes
under
existing
regulations and court
decisions
issuance
in
r^'nTe obligations
the
Lex
nounces
the defensive will lose.
Moreover,
negative policy of con¬
tainment has
been
applied in¬
even
our
consistently.
view
I for one cannot
loss of China as a tri¬
our
umph
American
of
true
the
of this
causes
the
be
may
diplomacy.
The
China
American
described
once
reformers
by
with
a
the
Department
tied to Moscow
are
This defeat—
rod of iron.
of
one
present rulers of
as agrarian
State
policy makers
most
far-reaching in
times—took
place
announced
fall
of
of the Chi-
hnf? ?I?nsii; Authority have been
Whuie1u a b o u t considerably,
fm
tbere exist valid reasons
hac I
e ^uctuations, this period
tJT* J° brinS out Points of
Drnh?men
strength. The main
natiin"J 0f declininS traffic (a
crea^S Postwar trend) and ha-
It is
will be held at Savannah,
Ga.,
on
June 10 and 11 at
Tybee, Savannah Beach.
Varnedoe, Chisholm & Co. is in charge of
the Hotel
Sam Varnedoe of
principles
spired
which
nation since its foun¬
our
could
munist
conquest, the first objec¬
of
tive
survive
American
must be
direct.
equally
In
the
bold, equally
words,
plain
policy
foreign
as
of
the
might be
the
and
Wal¬
worse.
appeasement
he
given his walk¬
was
We
Europe,
But
made
have
offensive,
in
finally
and
have
we
the
not
Asia.
taken
yet
the
we
have not yet seized
the initiative.
Moscow has called
the
main
since
munist Party from power.
Peace Impossible with
Communist Russia
I do not suggest
the elimination
Communist
the
of
I
do
that
assert
The Bond Traders Club of Kansas
its annual field day at
City
on
June 9th will hold
plays in
world, but
h*
Soviet
Union is ruled by the Communist
impossible
just
a
long
as
peace
the
as
Party.
The
only
to clear an are»
way
munists
in
is
as
nights
as
politics
world
the world
men
have
schemes
millions
in
sleepless
many
their
as
An
Kremlin.
the
continue
we
tackle
to
communism only in places remote
the
from
Greece
only
gain indecisive results at the ex ¬
pense of great effort.
We have
poured millions of dollars into*
Greece, yet we have not solved
such
center,
China
or
Iran,
or
as
we
can
is
It
obvious
Communist
to
that the
anyone
campaign
to
conquer
Greece will be renewed whenever
it suits the Communist purpose
Dardanelles.
Berlin
tion
also
more
no
saves
domina¬
hundreds
Yet
free
of
mil¬
of
today Berlin
than when the
secure
again
food
send
lift to
Communist
costs
Soviets
to*
th<*
air
Our
from
lions of dollars.
is
toward
operations
resume
permitted
overland
to
us
thif»
into
beleaguered city.
Lacking
cold
have
we
have
war
objective,
real
a
few victories
results entirely out of
to
their
vast
on
the
other
lost
costs.
nothing
by
limited
proportion
The
hand,
the
in the
won
achieved
Soviets*
really
have
abortive
these
I
want
that
it
make
to
quite
men
destruction of the organism of the
Communist Party and not the peo¬
ple it enslaves. Rather, we must
declare all people who are labor¬
ing under the yoke of that
strous
The
tyranny
Russian
must be
be
to
mon¬
allies
our
people
themselves
encouraged to join us in
the battle for freedom.
I
submit
that
in
the
Americans
we
is to push our
of
world
political
of
the real
are
courser
revolutionary ideas
and
economic
dom under the rule of
furthest
over.
clear
objective should be the
our
revolutionaries. Our wisest
Kremlin
their
The main nest of the Com¬
long
I look forward to the
1945.
brought to
the Quivera Country Club.
wiH
Party
solve all the ills of the
today
the
KANSAS CITY
Com¬
world-wide
ington will give the evil
arrangements.
pri¬
our
objective must be the sep¬
mary
aration
day when decisions made in Wash¬
BOND TRADERS CLUB OF
Com¬
dation,
forays.
only fair to say, however,
that things
in
Jolly, Johnson, Lane, Space & Co.. Atlanta, President, an¬
that the Annual Outing of the Georgia Security Dealers
Association
so-
a
1978> and> at the time
mi -r P4nfe
proximately
interest
ai
qualified
businessman's
-these
investors
hold
.
n?e*v?« y
this
or
f°r
..
Tuller
.
cojd, the
or
great decision to stop the retreat
GEORGIA SECURITY DEALERS ASSOCIATION
e
companies and
xt
we
stays permanently on
championed
ing papers.
this
beliefs, none of
have in¬
spiritual
our
the
the problem of communism there..
whether hot
side which
lace
as
for
s
•
In war,
objectives
them.
even
Things Might Be Worse
being the se¬
curity I like
u
will lose
the
Au-
best
continue to hold
we
while
policy was to con¬
tain Communist aggression.
Chicago
Transit
It is time to move for¬
negative
to
bonds of
the
t h
only
our
cation I would
choose
resis¬
Except in a few areas,
such as Greece, we have been on
the political defensive.
Even the
modern
-
of
nests.
and
position in the Far East has been
J.
members of the New York
any
tance.
weakened.
Realty & Securities Corp. is con¬
ducting a securities business from
offices at
To Be Mol Partner
make
containment
of
Whatever
<
Since it is obvious that none
lin.
those
FRANCISCO, Calif.—The
this
1 i f i
a
t
,
suitable.
With
Club Elects Officers
to
in
the motto of the Krem¬
has been
of rattlesnakes is to destroy
debacle
Dansker
order
Soviet1*
The
squeamish
The only aims ever an¬
nounced for our policy have been
ward, for if
combina¬
law
in
been
setting forth their avowed policy.
"One or the other must conquer"
progress.
character.
niche.
glad that the rules of this
a
think
properly appreciated in the
They are presently
working their passage to a higher
,
forum permit
I
will slowly and
surely enable these bonds to be¬
'
Bonds)
San Francisco Bond
gations.
Their
present
market
price suggests such a classifica¬
marketplace.
Exchange
tennis.
bonds with all other transit obli¬
(Chicago Transit Authority
am
the
be¬
I
come
City
Members
I
investors.
management
ROBERT N. TULLER
York
connotations in
establishing this
Authority, together with a sound
Partner, Tuller, Crary & Ferris
New
no
lieve that the special factors cited
above in the CTA picture make
unwise the classification of these
tion
$200.
now
and
old
of
tion.
*Par
true
action.
never
is
going
be
talization
have
tragic failure by this standard.
a
Policy
influence
to
The conduct of American
policy since the end of the
Webber, Jackson & Curtis, spe¬
overcapi¬ cial
event; Darwin H. Clark, pub¬
exists, that the securi¬
Donald
E.
Summerell,
ties of the system are sound and licity;
currently quoted 13-13 % (present
Wagenseller & Durst, Inc., base¬
that
all
contractual
obligations
interest rate 13.75% per year).
ball; Arthur G. Kane, California
will be met.
"Mexican
Treasury
4s,
dated
Bank, horseshoes, and Frank Dyer,
The word
transit has certain
1910, currently quoted 9-9 lA and
Jr., Wagenseller & Durst, Inc.,
1951).
vr--.
"Mexican Treasury 6s, due 1963,
dition
37
(2185)
corners
free¬
law to the.
of the earth.
'
BOND TRADERS CLUB
The
Bond
Traders
Club of Chicago will hold
outing at the Nordic Country
AD
This time of crisis calls for radi¬
OF CHICAGO
their annual
Club on June 24th.
It is with great pride we advance the name
Joseph' H. Weil of Weil & Arnold, Canal
Building, New Orleans, La., for your applause.
of
Joe has
served before as
Chairman of the
affiliate on our National Adver¬
tising Committee and obtained recognition due
to his ability and cooperation m securing ads
for our yearbook and convention issue of the
ha* k
^(aSe and material costs "Chronicle."
When accepting participation on our com¬
tr0l nTP largely met by the conihie
are rates. Take note that mittee he said' "Am still at my same post and
of th
bes witb the Board « to do what I can to help out." Fellow
elsp
^Authority and nowhere members will agree with me I'm sure that
sho\irc
record of this period Joe's personality has gone a long way in' mak¬
the u.n° hesitancy on the part of ing all in our national organization his friends.
Joseph H. Weil
F. Y. I., his son is following a great ex¬
to be realistic on this
conriue wben the financial ample.
HAROLD B. SMITH, Chairman
Oti n. required action,
NSTA Advertising Committee
the
laiPortant problems were
Pershing & Co.
Parte a?mbRng of the component
makin
u "joitilateral
system and
120 Broadway, New York
City
g it function
efficiently as
New Orleans
new
decisions
policy. We need
ican
to
work
this
litical
will
we
we
if
us
moment
Unless
brand of Amer¬
limited. It
for
foreign
our
worthy
time
The
in is very
in
a
leadership
name.
LIBBING
4u
cal
on
adopt
a
can
the
to
act
be made
strike
we
a
of
have
out
course.
new
bold, new po¬
the Soviet Union
program
inevitably draw ahead.
We
the
read
as
the
their
could
not
exist half slave and half free, the
world itself cannot endure divided
it is today. The time for mak¬
ing deals with Moscow has ended.
as
Let those who say
peace
exist
can
that
as
genuino
a
long
the
as
Communist leaders rule the Krem¬
lin
come
for their
forth and state the basis
pipedream.
technology
the world
were more cour¬
ageous and had greater vision than
nent
the leaders of
the
East
and
question.
made
long as a perma¬
schism exists be¬
as
political
tween
has
That peace can bo
one.
established
pol|tical leaders
Carthage.
country
our
Modern
of
Roman Empire today because
history
Just
West
Let
us
Of
is. out
be
as
cour¬
„
,
poi>ard
Whether
the
will write of
ciples
future
our
historians
heroes and prin¬
of freedom
of
or
our
na¬
tional destruction depends on the
type
of
leadership
during these crucial
we
receive
years
the Soviets can match
our
atomic
to
ture
objectives
earth
if
they
must
are
be
going
the
Communist
life and
death
and
na¬
of the struggle.
Destruction of
Communist
Poweir
Should Be Objective
Once
tion
Political
as
recognize the
before
stockpile.
down
ageous
of
we
establish the destruc¬
Communist Power
primary objective
we can
Continued
on
as
our
end the
page
3S
38
(2186)
Continued jrom page 37
is
vital
member
of
must
become
unified
a
and
Western
Oar Coxtiased Foreign
Policy
tion of
the
the
conduct
promise. European unity has been
of
affairs.
our
Practical
political offensive campaigns
one
of
foreign
with
proclaim
millions
munism
in
vakia,
Poland,
Romania
and
the
not
com¬
our
to
eventual liberation just as we did
to the people of Europe when
subjected
to
the
to
enslaved
be
told
by
cise
the
dawn
all
campaign
of
our
unless
existing
the
Soviets
withdraw
there is
is
to
no
essential
1939
chance whatsoever of
Europe
entire
world
French
scene
offer
with
economy
Political
to
and
is
the
integrate
that
50
by
an¬
—
to be
was
and
I
all of
of
one
by
the
American
A
come.
they
Germany
part of
political
range
recent
as
At
large
we
Yalta
Each
and
contribute
is
ended.
When
United
dole
pro¬
Nations
inseparable and this concrete and
enlightened action on the part of
within
the
German
must defeat this scheme.
•
•
.
..
•
-
I-
I-'
offensive
to
any
The United Na¬
ready-made instrument
a
the
to
choose
on
the Iron
talized
their
remain
to
in
Nations.
United
revi¬
a
Today
in the United
Nations is extremely limited.
Of
destroy the
Success
the
front will help
participation
34
sions
Curtain and force
bodies, commis¬
agencies of the United
separate
or
Soviet
the
Nations
has
Union
joined or is boycotting 22.
We can no longer permit Soviet
time
obstructionism
prepare new
gains to
to
never
consolidate
spring¬
work the UN
boards for further advances. Nor
can
We
•
the
are
Communists
we
of
Communist
V
• .1
I
suffer the world-wide ap¬
pendages
Germany
•
of
be
their
unity
Communist orbit.
will
aims
the
will melt away.
tions is
the Communist power to disgorge
the bait of these stolen territories
inducement for
War
its conquests. We cannot allow the
This
creasingly obvious, is to hold out
as
the
practiced in
Eastern Europe the Iron Curtain
step I have ad¬
positive part of the
power.
crack
which has become in¬
maneuver,
a
achieved
the
their
"of
aims
Cold
the
realized
specific
Communist
from
swindle.
free¬
the
vocated
clever, long-
a
for
through which the free peoples of
world can press their offen¬
wellbeing of the millions
sive i*,r peace and survival.
of people in Asia and* the Oceanic
Perhaps the Soviet Union will
Islands.
themselves
squarely
areas
the
When
be¬
must
battleground
our
the
Kremlin
Parties of
•'•••
;;
".
—
realize
the
advance
France, of
sored
the
real
the
I
measures
today are far in
you
of those
officially
spon¬
by the administration,
not
manv
our
The dangers of a
infinitely less
are
weak
a
friends
destroy
-
remain
we
strong policy
than
those of
Suppose
one.
and
on
for
ex¬
the political
continue
to
spend
billion
annually in national
foreign aid. Twenty
years from now,
after spending
$400 billion on a fruitless policy,
$20
and
defense
we
will be
off than
worse
we are
today—and the Soviet Union will
be immeasurably stronger.
V '
unified
A
command
Atlantic Pact
democracies
the
of
under the
little unless
means
Western Eu¬
prepared to back it up
with the integration of their eco¬
are
rope
nomic
as
well
military
as
meas¬
There is, of course, the risk
ures.
that an offensive policy will pro¬
voke the 'j men in the Kremlin to
strike before their base system is
utterly destroyed by the forces of
This risk we must cour¬
freedom.
ageously accept as the lesser of
two evils.
^
There is a stronger
offensive
accelerated
an
\
chance that
policy
generate sufficient power for
the Western democracies to pre¬
vent World War III.
Consequent¬
will
ly, I can see rid better path toward
peace than to energetically push
forward the frontiers of freedom.
accomplish.
can
that
to
advocate
block
to
with
this power to
tyranny.
Charter of the United Nations are
mutual
:
Germany.
Soviets detached
Nations
United
The
come
support
can
Moscow-
in
directed Fifth Columns.
be found to harness the
that
so
Party, but only
peril
greatest
dom.
to
harm in any
can see no
native Communist
con¬
China has been
an
use
civil liberties defined by our con¬
stitution. I
overrun
must
totalitarian
maudlin
by
are
We have great
pow¬
joined
defensive
skill and industry of the Japanese
people
war.
ample
Communist pup¬
generations
gram must
unity must be
short of
essential campaign to be
by false cries for civil
There
our
disposal to force
back the frontiers of
Communism
liberals. Treason is not one of the
we
supported
for
at
—
forget Japan. Under
policies Japan will be
can
present
welcome
means
must
permit the necessity
lea
offensive does
war.
,
we
not
v.
'hs.j-t-'
/:
freedom
liberty
during the Cold
ours
War when
Nor
A
imply
and
us
nnt
poli^,
'
"v
•
1950
Does Not Imply War
by
ago
years
the Japanese
tinue
agents
the seeds of treason and
v.
m
,
er
Let
pets of Moscow.
arms.
sow
Thursday, May 25,
.
procrastination,
free world.
guide in World War II
enslaved by the
Germany.
unity are
of
economic
China
for
over
our
overall
the
on
or
The Iron Curtain cuts
across
omen
was
Germany Should Be in Atlantic
/v?; '>>.
Union
Western
European
Recovery
also
re¬
quires European Unity. Perhaps
heartening
goods
professional
not
economic life depends.
the most
policy
our
people
which Europe's healthy
on
and
American
must encourage it.
the natural flow of trade
Eastern
the
cow
to
which
of Mos¬
by
apparatus
the
for this
when much of China
than trying to suppress this basic
instinct of the German
recovery
succeeding.
The Iron Curtain stands as a bar¬
thing
Communist
of
worldwide campaign to
a
smash
more
the Open Dootf Policy. That policy
goals within the larger frame¬
work of a European order. Rather
to
initiate
obscured
a
exer¬
must
we
its
Secretary of State John Hays
Cold
of
base
do
or
disunity through the camp of the
nounced
our
borders,
between
interest
friends
German
European
rier to
the
the
Europeans will
this type of leadership.
for
forced
are
their
in
in
believe
to
programs
freedom
the
will
at
have
a
the
are
Curtain
preoccupation with
Europe must not make us forget
the vast problems of Asia. We
objectives
We
Iron
We.
offensive.
our
..
the crisis we face
will
solved either by
half-way
spinal cord of these
Fifth Columns by severing their
connection with Moscow. We must
member of
a
sabotage
States—
must cut the
Our natural
P. A. It has
common
to
Power.
right to promote Euro¬
unity with every ship filled
with
of
liberty will follow their night.
That
like
as
Community
point. It will
any
other single
than
possess.
conducted
enemy.
a
as
America
Italy, of Japan, of Latin
and even of the United
as
our
pean
Communism
that
and
European
Philippines when they lived
under Japanese militarism. These
people
of
War
tyranny,
China and
the
must
we
the
destroy
with all
practical
the
the
arsenal
Nazi
people of
gain
against
they
were
of
that
one
democracy during World
II we
properly insisted that
military equipment be used
War
coun¬
a
West,
not
weakest
senal of
tries of Eastern Europe. We must
hold open to them the hope of
and
aims
but
and
Germany
Atlantic
crack
European aid pro¬
been
furthered
great
steps to¬
ward European unity. As the ar¬
Hungary,
smaller
policy
vast international W.
Czechoslo¬
Bulgaria,
constructive
our
has
gram
our
of
been prosecuted
Much of
suffer¬
ing under the iron heel of
seeds
the skill and influence
existing behind the Iron Curtain.
publicly
the
has not
First, we must end our coward¬
ly acquiesence to the status quo
must
holds
our
can
then be undertaken.
sympathies
French
nation
the
Communist satellite. The unifica¬
drift which still characterizes the
We
Financial Chronicle
The Commercial and
The
our
shackles
if
fate
tyranny will be
blindly refuse to
of
we
make this choice
in time.
The Time Is Now!
but
'•
■
•
•
:
•
.
Now in Registration
American Cladmetals Co.
(6/1)
480,000 shares of common stock (par
Price—$1.50 per share. Underwriter—Graham &
Pittsburgh and New York.
Proceeds—To install
March
$1).
Co.,
31
filed
additional facilities and for
working
June
capital.
1.;
Expected
American Cyanamid Co., New York
April 26 filed 498,849 shares of series B 3V2% cumula¬
tive prefererd stock
(par $100), which is convertible
before July 1, 1960.
They have been offered to common
stockholders of record May 16, 1950 at the rate of one
preferred share for each
expire June 2.
seven
common
held; rights to
Underwriter—White, Weld
$102
per
share.
eral funds.
& Co. Price—
Proceeds—For working capital and gen¬
American-Marietta Co., Chicago
April 28 filed 50,926 shares of common stock
(par $2)
50,926 shares of capital stock
Co., Kansas City, to complete
acquisition of this company. Underwriter—H.
M. Byllesby & Co., Chicago (to serve as
dealer-manager for
soliciting United Brick stockholders. Expected this
to be offered to holders
of
of United Brick & Tile
American
Metal
Products
May 19 filed 426,000 shares
Price—To
be
nolds & Co.
of
Co.
(7/8)
common
stock
(par $2).
filed by amendment.
Underwriter—Rey¬
Proceeds—To go to selling stockholders.
Ampal-American Palestine
Trading Corp.
April 10 filed $3,000,000 of 10-year 3%
sinking fund de¬
bentures.
York.
Underwriter
Israel Securities
Corp., New
Proceeds—To increase working capital to
be used
—
for enterprises in Israel.
Business—Developing the
nomic resources of Israel.
•
of warrants at the rate
held.
—28 E. Center
•
Artcraft
Fluorescent Corp.,
Brooklyn, N. Y.
of notification)
30,000 shares of 7%
cumulative participating preferred stock.
Price—At par
18
per
share).
to
May 15
(letter of
stock to be sold at
par ($100 per share).
repurchase Louis Solomon's 185
$220,000 for working capital.
Street, Brooklyn, N. Y.
to
of
"
stock
at
build
a
$100
per
natural
share.
No
underwriter.
transmission
gas
Boulder, Tulsa, Okla.
'
line.
V
'
Proceeds
Office—105
u
•*
.
Mav^'ffwf1?^ o^Suburban Be" Telephone Co.
stopkbiiit^ 234>856 shares of common stock to be offered
each thrpfr£
re.c<lrd ^ay 26 a* rate of one share for
fS5ft
J? I ngilts to exPire July 3. Price—At par
to
N.
n*
'
Corp.
April 26 filed 1,924,011 shares of
exnandl
struction
issuable
warrants
are
common stock
(par $5)
by corporation if all outstanding
option
value $100, to be sold to officers and
directors
at par ($100 per
share) and 1,000 shares of 6% pre¬
ferred stock, to be offered to
the public at $100
per
share.
Underwriter
None.
Proceeds
par
—
stores
common
No underwriter.
and
Boston
15
stock
add
new
To
stores.
Underwriter—None.
Proceeds—For
reduce bank loans incurred for con-
Der
improve
Mav^rw!3* Manufacturing Co., Inc.
Electric Steel
(letter of
Casting, Inc.
notification) 400 shares
(no par) to be offered
at
$50
per
writer.
ard
'
3
ADrH1?'? en!f7e[e?hone Co"' Decatur, Ind.
preferred in tr
notification) 3,000 shares of W
^lf Sr^n0n"C0nvertible- Price-At par ($100
additfnnc
.Underwriter—None. Proceeds—For plant
240 W- Monroe conVersion to dial operations< officeW Mn
St., Decatur, Ind.
Ballentine
stock,
lre
exercised.
Underwriters—None.
Grocery Stores, Easley, S. C.
May 15 (letter of notification) 1,000 shares of
common
•
—
eco¬
k°00,000 shares of no par value common
•
shared »
Atlas
be
in
80
'
\
•
Proceeds—To finance
centc^p1CV
shares to be <>ffered publicly at
remainder are registered as "bonus
underwHiYnderwr:iter—Reputed negotiating with new
Statement effective Dec. 9.
W pf.oceeds—To develop mineral resources,
statement
Indefinite.
i
stock and
Office—248-274 McKibbin
>
(6/7)
Ltd-' Vancouver, B. C.
Proceeds—$80,000
shares
Co.
-
ctnot
Associated Natural Gas
Co., Tulsa, Okla.
March 14 (letter of
notification) 2,500 shares of common
May
of
Underwriter—None.
Power
LPr°P ? on June 7.
Bidsbe opened expenditures for 1950 and 1951.
(letter
($10
emP!oyees, offer to expire June 9. Office
Electric
Kidder, Peabody & Co.
.,
Street, Fayetteville, Ark.
May
ISSUE
ifnaL fl-ied
000'000 first mortgage bonds due 1980.
uer77To be determmed by competitive bidding.
blddJrrs; rfahsey, stuart & Co. Inc.; Shields &
of one share for each nine now
Proceeds for construction. Office
No underwriter.
ADDITIONS
Ave., New York, N. Y.
California
May 2 (letter of notification) 28,948 shares of common
stock (par $6) to be offered at
$10 per share to holders
Research
Laboratory, Inc.
notification) 800 shares
m«Qn
—630 Fifth
Arkansas Western Gas Co.
•
Antenna
Of¬
Lane, Columbus 2, Ohio.
INDICATES
SINCE PREVIOUS
to
week.
•
Proceeds for plant expansion and
working capital.
fice—797 Thomas
•
Proceeds for working
capital.
Street, Boston, Mass.
share.
stock
of
No under¬
fnlr
share
common
Nn
Office
uince
7n
70
Office—53 Ger¬
«0tlflcation) 44>000 shares of common
11 fe^fd to warrant holders at $4.50 per
"nderwriter. Proceeds for working capital,
plne st., New York NY
•
Botany Mills, Inc.
May 22 (letter of notification)
Price—At market
1,000
(approximately $8
writer—Lamont & Go.
shares^ (par
$1).
per share). UnderProceeds—To selling
stockholder.
Budget Finance Plan, Los Angeles, Calif.
May 8 (letter of notification) $300,000
principal amount
of series A 5% debentures of
$1,000 principal amount
each, with warrants attached to buy 25 shares
of class B
stock at from $4.25 to
$4.75 per share between June
15,
1951, and Aug. 15, 1952. Underwriter—Morton
Seidel &
Co., Los Angeles. Proceeds
For working
capital and
expansion.
—Allen *
'
n
sllLkl.nS furtd bonds, due 1964. Underwriter
ceeds^General funds, for be filed by amendment.
fnn^° property additions.
general
-
MavCi°^,Unl^i,1e Deve,°Pment Co. (Colo.)
Stock (par sim *
hnotif*cation) 3>°°0 shares of common
writer
PrS!L
sold at $12-50 Per share- No under"
or construction and . operation of a
Grancffunction PCoto. ^ °ffic£-614 R°°d Av^Ue'
nilin
new
an j
—
New York.
Boston
Philadelphia
>'.
•
Pittsburgh
San Francisco
'
'
.
■
Cleveland
'
•.
Private Wires
to
all
offices
Chicago
Bulova
May 10
Watch Co., Inc.
(letter of notification)
9,090 shares of common
stock
(par $5).
Price—$33 per share.
Underwriter—
None.
Proceeds—For working capital.
Offering—To be
MavD?n'afn P!°*er & Light Co. (6/13)
Underwr«!;500T00uOf first mortgage bonds, due
Pr^
T?° e determined by competitive
S ie bidders: Halsey, Stuart & Co. Inc.;
Corn
TTn^ o ^orP*» Lehman Brothers; First BosBlvfh ^r10nTUrities CorPJ Kidder, Peabody &
Co., Inc. and Merrill Lynch, Pierce, Fenner
1980.
bidding
Equitahle
tpn
Co.,
ki
•
y
n
&
Number 4910
171
Volume
(jointly).
Reane
Proceeds—To retire $16,000,000 of
initial exchange offer
struction.
1
■*'
NEW ISSUE CALENDAR
,
w
ril 20
Dumont Electric
J
May 31, 1950
^
1950
Common
s
.Bonds
General Radiant Heater Co., Inc
Common
(H.) Associates, Inc.
Common
New York Central RR., noon (EDT)__Eqp. Tr. Ctfs.
Gloeckler
United Mines of
Honduras, Inc
Wisconsin Power &
Common
Bonds
Light Co...
June
June 5,
Gulf States Utilities Co.
Guild Co-operative Service, Inc.
May 23 (letter of notification) 1,000 shares of common
stock at par ($100 per share). No underwriter. Proceeds
for organizational expenses and working capital. Office
1-310 Bridge Street, Brooklyn 1, N. Y.
..Common
1950
(EDT)
Bonds & Common
Bonds
June
6, 1950
Northwestern Bell Telephone Co
Pennsylvania Co. noon (EDT)
Public Finance Service, Inc
(5/25)
May 16 (letter of notification) 62,500 shares of common
stock (par 10 cents).
Price—$3.50 fcer share. Under¬
June
Proceeds—For installa¬
of additional machinery, further extension of facili¬
and for other corporate purposes. Expected May 25.
-Debentures
Bonds
Debentures
7, 1950
writer—Aetna Securities Corp.
California
tion
Southern California Gas Co.
ties
8:30
Equitable Gas Co., Pittsburgh, Pa.
M&y 23 filed $3,000,000 of 20-year 3%% sinking fund
debentures, due March 1, 1970, to be sold by The Phila¬
delphia Co. from its present holdings.
Underwriter—To
be determined by competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; The First Boston Corp.; Kuhn,
Loeb & Co. and Smith, Barney & Co. (jointly); Harriman Ripley & Co., Inc.
Proceeds—To retire 100,000 out¬
standing shares of $6 cumulative preference stock by
•
Philadelphia Co.
'
,
Bonds
(EDT)
Bonds
....
Mississippi Power & Light Co
Columbia
St., New York 17, N. Y.
v
...Debentures
.Preferred
Corp
Common
July 8, 1950
American Metal Products Co
Common
;
,
Mines, Ltd., Winnipeg, Canada
(EDT)
on
June 5.
fund debentures due 1962.
•
Inc.
(letter of notification)
capital
stock
$10).
(par
Underwriter—None.
capital and reduce bank commitments.
ton
Colo.
$10 par
Price—$17.25
Proceeds—To
increase
Office—500 Carl¬
Bldg., Colorado Springs, Colo.
-
-
,
Grant (W. T.) Co., New York City
April 3 filed 118,935 shares of common stock (par $5).
No underwriter. These
shares will be sold to employees
from time to
time
under terms of
Purchase plan approved on
udded to general funds for
an
18.
Not less than
$22 a share. Statement
Granville
Mines
Employees Stock
Proceeds—To be
corporate purposes. Price—
April
Corp.,
Ltd.,
effective May 1.
British Columbia,
Canada
common non-assessable
(par 50c). Price—35c per share. Underwriter—
Proceeds—To buy mining machinery and for
Working capital. Statement effective May 10.
•
;
stock
16 *ded 100,000 shares of
None.
Gulf Atlantic
Transportation
Florida
Co., Jacksonville,
??' 1949> filed 620,000 shares of class A partic. ($1
Par) stock and
270,000 shares
„?ertofr7-135,000 shares
ascription by holders
0
(25c par) common
sinking
stock.
of common will be offered for
the basis of one-for-two at
may include Blair, Rollins & Co., Inc.;
Kidder & Co. on a "best efforts
common $5 for class A. Proceeds
c°roplete an ocean ferry, to finance dock and term."ivies' to pay current obligations, and to provide
rking capital. Statement effective May 10.
rim,
3
.ae 1980.
Wo
•»
Ink
Mp,
erl
Win
(6/19)
Underwriter—To be determined
Probable bidders:
petitive bidding. Probable bidders: Halsey, Stuart & Co.
Inc.; First Boston Corp.; Union Securities Corp.; Harriman Ripley & Co., Inc. Bids—Expected to be received at
noon
(EDT) on June 19. Proceeds—To pay bank notes
and for construction.
'
.
'
Industrial Stamping & Mfg. Co., Detroit
May 15 filed $500,000 of first mortgage 5% sinking fund
bonds, due 1967, with warrants to purchase 60,000 shares
of common stock.
Underwriter—P. W. Brooks & Co.,
Price—100% of principal amount. Pro¬
ceeds—To pay mortgage, buy machinery and for addi¬
tional working capital.
Business—Stampings and as¬
semblies for automotive, refrigeration, household appli¬
Inc., New York.
and other
ance
industries.
International
To be offered in June.
Packers,
Ltd.
May 11 filed 2,000,000 shares of common stock (par $15)
and certificates of deposit for these shares which will
be offered on a share-for-share exchange basis for out¬
standing stock in Compania Swift Internacional Sociedad
Anonima Comercial,
an
Argentine corporation.
The
r>
$50
common
Underwriter—
for
share on a one-for-five basis.
per
Miller
Co.,
(Walter R.)
Inc.
(letter of' notification) 1,000 shares of 6%
cumulative preferred stock at par ($100 per share). Un¬
derwriter—George D. B. Bonbright & Co., Binghamton,
N. Y. Proceeds—To assist in acquisition of 1216 shares
March
of
6
company's common stock.
Mohawk
Corp.
Machines
Business
May 19 (letter of notification) 6,668 shares of common
stock (par 100).
Price—$1 per share. Underwriter—
Jacquin, Bliss & Stanley, New York.
ing stockholder.
•
Nave
Proceeds—To sell¬
Inc., Washington,
Typographic Service,
'i:/'
v
(letter of notification) 2,170 shares of common
($1 per share) and 310 shares of
stock to be sold at par
($100
units
in
share),
per
stock at
preferred and
of one
but sales
Proceeds—To pay expenses
of incorporation, purchase assets of Nave Typographic
Service and provide working capital. Office—1367 Con¬
shares.
common
>
Underwriter—None,
agent is J. G. Lawlor & Co.
necticut Avenue N. W., Washington, D.
C.
England Gas & Electric Association
April 17 filed 173,126 shares of common stock (par $8),
being offered to stockholders at rate of new share for
each eight shares held on May 5; rights expire May 26.
Dealer Managers—A. C. Allyn & Co.; Townsend Dabney
&
Tyson;
& Durst;
Wagenseller
G. H. Walker & Co.;
Draper*, Sears & Co.; C. L. Putnam & Co.; Smith, Ramsey
& Co. Price—$13 per share. Participating dealers have
been given a
retail price of $14.50 per share for the sale
bank loan and for further
investments in subsidiaries. Statement
of the stock. Proceeds—To pay
common
stock
effective May
8.
Washington, D. C.
stock (no par.) To
offer only sufficient shares to raise $1,000,000 at $5,000
per share.
No underwriter. Proceeds to be used to ex¬
plore and develop oil and mineral leases.
North Western Coal & Oil Ltd., Calgary, Ala.,
Norlina Oil Development Co.,
March 28 filed 600 shares of capital
Canada
April 6 filed 2,200 basic units of $250 face amount each
of production trust certificates, or an aggregate principal
amount of $550,000, Canadian funds. Underwriter—Israel
and Co., New York City.
Price—$123.75 (U. S. funds)
per $250 unit. Proceeds—For equipment, working capital
and current liabilities.
Northern
CONFIDENTIAL
May
a
printing cosine,
by compet-
Illinois
Coal
Corp.,
Chicago
of notification) up to 2,000 shares of
stock (no par) to be sold at the market price
(letter
(between $20 and $22 per share) by T.
SINCE
■«*
Halsey, Stuart & Co.
10
common
SERVICE
bonds,
SIlittlijM; SiIf. E»BK7,fll.V.
&
£ and Union Securities Corp. (jointly); Carl M.
',?hoades & Co- and Lee Higginson Corp. (jointly);
Lynch> Pierce, Fenner & Beane; Lehman BrothuPr0ceeds—T0 finance construction program. Bids—
be received
at Central Hanover Bank & Trust Co.,
Newark, N. J.
5,200 shares of common
stockholders of record March 17
(letter of notification)
Clark, Dodge & Co, Proceeds—To pay notes and
additional working capital.
Expected this month.
&
Stone & Webster Securities Corp.; Salomon Bros.
share for each 10 held, and
New
1920
Utilities Co. (6/5)
$13,000,000 of 30-year first mortgage
ddin§*
Electric Co.
May 19 filed $20,000,000 of 30-year first mortgage bonds,
due
1980.
Underwriter—To be determined by com¬
Gulf States
M
_
Indiana & Michigan
amendment
„
wi
at
John J. Ber-
h!nCo- and A- MJSS* Price—Par for
,
Proceeds—To retire bank loans and for working
capital.
on
cents per share. Underwriters—Names by
<W
one
shares will be offered to the Trustee
seven
$250,000 of 5%
Underwriter—The Ohio Com¬
pany.
Golden Cycle Corp., Colorado Springs,
May 8 (letter of notification) 17,168 shares of
common
the remaining 56,000
of the Thrift Plan
of the Tennessee Gas Transmission Co.
Price—To stock¬
holders will be furnished by amendment: to Thrift Plan
of
par
Hart Stores,
Proceeds—For buildings, equipment and working capital.
share.
May 2 filed 522,667 shares of common stock (par $1),
of which 466,667 shares will be offered to common stock¬
holders of Tennessee Gas Transmission Co. at the rate
voting, noncumulative, participating, preferred
-
May 1
value
Baltimore, Md.
May 16
A, 70 Broadway, New York, N. Y., up to noon
—To be made only in New York State for the
present.
Hydrocarbon Chemical Corp.,
Mathieson
.
April 10 filed 500,000 shares of common stock (par $1).
Underwriter—None.
Price—$1.50 per share; to increase
25 cents per share for each
100,000 share block. Offering
per
1,200 shares of common
(approximately $9 per share). Proceeds
go to selling stockholders. Underwriters—To be offered
through Childs, Jeffries & Thorndike, New York, N. Y,
D. C.
Office—
.
Inc., New York City
stock at market
•
System, Inc._^_.
Rockland Light & Power Co...
Room
Shore
.Preferred*
Bonds & Pfd.
Gas
Sunray Oil
debt.
(M. H.),
stock offered to
Common
Louisiana Power & Light Co
(H.) Associates, Inc. (6/1)
May 11 (letter of notification) 30,000 shares of common
stock (par $1), of which 20,000 shares are to be offered
publicly at $5 per share and 10,000 shares to employees
at $2.50 per share.
Underwriter—None.
Proceeds—For
Gold
Lamston
Feb. 9
June 19, 1950
Arkansas Power & Light Co
Bonds & Preferred
Indiana & Michigan Electric Co.
Gloeckler
155 East 44th
•
Bonds
.....
June 20, 1950
expansion program and for working capital.
increase in funded
Middlesex Water Co.,
Ry. Co.
'
com¬
Stuart & Co.
Inc.; Glore, Forgan & Co. and W. C. Langley & Co.
(jointly); White, Weld & Co., Shields & Co. and Central
Republic Co.
(jointly); Lehman Brothers and Bear,
Stearns & Co. (jointly); The First Boston Corp.; Equi¬
table Securities Corp.;
Smith, Barney & Co.; Kuhn,)
Loeb & Co., Salomon Bros. & Hutzler and Union Secu¬
rities Corp. (jointly); Harriman Ripley & Co. Proceeds
—To retire $4,822,500 of bank loans and for construction
program.
Stockholders will vote June 8 on approving
petitive bidding. Probable bidders: Halsey,
Bonds
June 15, 1950
noon
bonds,
build, equip and operate a plant.
Business—Manufac¬
ture
of
ethylene glycol and other organic chemical
products.
Debentures
Toledo Edison Co
Southern
& Light Co.
Kansas City Power
Trustee, $10 per share.
Underwriters—Stone & Webster
Securities Corp. and White, Weld & Co.
Proceeds—To
(PDT)
Dallas Power & Light Co
Pacific Gas & Electric Co
Inc., N. Y. C. (6/1)
May 3 filed 170,000 shares of common stock (par 250).
Price—$3 per share. Underwriter—Mercer Hicks Corp.,
New York. Proceeds—For plant and warehouse, adver¬
tising research, working capital, etc.
Expected about
-
•
May 19 filed $15,000,000 of 30-year first mortgage
due
1980.
Underwriter—To be determined by
June 13, 1950
General Radiant Heater Co.,
June 1.
capital.
.Bonds
Co
June 12, 1950
Northern Natural Gas Co
<
.
by amendment, along with interest
pay
bank loan and for working
Bonds
Electric Power
a.m.
filed
Proceeds—To
rate.
Common
Wisconsin Gas & Electric Co
"
be
Price—To
Bonds
noon
Rosefield Packing Co...
Wisconsin Electric Power Co
(5/26)
Corp.
5 filed $4,000,000 of convertible debentures, due
1965. .Underwriter—Butcher & Sherrerd, Philadelphia.
May 19 (letter of notification)
2, 1950
Northern Indiana Public Service Co...
•
Electric Corp.
1,
American Cladmetals Co
Colorado Fuel & Iron Corp
Drug
Dumont
Common
June
Canada.
Capital
.Common
Vieh Co.
Exploration (Western) Ltd.,
V
Toronto, Canada
Jan. 30 filed $10,000,000 of notes, due 1960, with interest
at 1 % in the first year, 2% in the second year, and
3% thereafter, and 249,993 shares of capital stock (par
$1). To be sold to 17 subscribers (including certain part¬
ners of Carl M. Loeb, Rhoades & Co., State Street Invest¬
ment Corp. and State Street Research & Management
Co) Underwriter—None. Proceeds—For general funds.
Business—To develop oil and natural gas properties in
•
May 29, 1950
Sentry Safety Control Corp..........
Television Equipment Corp
Dome
Western
..Equip. Trust Ctfs.
.....Common
May 26, 1950
International Utilities Corp..___.._....Debentures
f
/
Common
Debentures
Wisconsin Power & Light Co..
Utilties
has
May
Corp.
Helicoper Corp
Reading Co. noon (EDT)
Statement effective May 10.
Dean Co., Chicago
Anril 10 (letter of notification) 1,000 shares of common
stock
Price—At par ($10 per share. Underwriter—
Boettcher & Co., Denver and Chicago. Proceeds—For
general corporate purposes. Offering—Only to residents
Illinois.
May 25, 1950
Piasecki
struction.
(The)
of
of
International
Power & Light Co.
filed 283,333 shares of common stock (par $7)
hPine offered to holders of outstanding common May 10
f the rate of one new share for each seven held; rights
pvnire May 31. Underwriter—Morgan Stanley & Co.
tid W E. Hutton & Co., New York. Price—$30 per
hare
Proceeds—To repay bank loans and for con¬
nayton
.
will become effective July 19 if a
1,650,001 shares of Swift International
been tendered and accepted.
No underwriter.
minimum
bonds, pay note indebtedness and for con¬
mortgage
first
39
(2187)
The Commercial and Financial Chronicle
.. .
Howard Green,
Underwriter—Faroll
Co., Rogers & Tracy and Shields & Co., Chicago.
Vice-President
Northern
of the
Indiana
company.
Public
(6/2)
Service Co.
May 12 filed 422,000 shares of common stock (no par)
to be offered to stockholders of record May 29 at the
rate of one share for each six held.
June
19.
Underwriters
—
Central
Rights expire about
Republic
Co.,
Inc.;
Blyth & Co., Inc., and Merrill Lynch, Pierce, Fenner &
Beane. Price—To be filed by amendment. Proceeds—For
,
Qtiottgo AffQtiats'
\
£ <wwl HEADER SON, be,
ionJon Associate
;
The
UAGRAVE PRESS, ltd.
construction.
Continued
on
page
40
~\
40
The Commercial and Financial Chronicle
(2183)
At
Continued from page 39
Northern
Natural
Gas
Co.
Power
May 9 filed $40,000,000 of serial debentures due 19531970.
■Vi,
.
Underwriters—To
determined
by competitive
bidding.
Probable bidders: Halsey, Stuart & Co. Inc.;
Blyth & Co., Inc.; The First Boston Corp.; Kidder, Peabody & Co. Proceeds—For expansion and to repay prom¬
issory notse. Bids—Expected June 12.
.
'Hi.; 4
Northwestern
Bell
Telephone Co. (6/6)
May 5 filed $60,000,000 of 34-year debentures, due 1984.
Underwriter—To be determined by competitive bidding.
'I
,
be
bidders:
Probable
Halsey, Stuart & Co. Inc.; Morgan
Proceeds—For redemption on July 14,
1950, at 104.375% of their principal amount, of $60,000,-
Stanley & Co.
"i.V
,
■
r'ni;
000
31-year 3V4% debentures, due 1979.
to be opened on June 6.
v
■
Hv
nt\r
In units of
$100 of debentures and
at $105 per unit.
long-term
an
No underwriter.
commercial
lease.
(letter of notification)
Watt
and
Schoyer.
"'K|
Price—50 cents per share.
offered
(
stock.
Price—At
share).
Proceeds—To modernize plant.
None.
<>,,1 '
■''S>n
V
rvi
«.
O
($100
par
Underwriter—
per
Pacific Gas & Electric Co.
-C:
& Co., Inc.; Halsey, Stuart & Co. Inc.; First Boston Corp.
new
construction. Bids—Expected June
K»
Proceeds—For
V*,..
•
•
;
f'j'n
:
13, 1950.
&
"V--
Pacific
Refiners,
Ltd.,
March 29 filed $750,000 of 6%
*W;
Honolulu, Hawaii
15-year sinking fund de¬
bentures, due 1965 and 500,000 shares of common stock
(par $1) to be offered in units of $3 principal amount
Wii,-"
of debentures and two shares of
unit to
"tyy
rate of
>•<>.
common
unit for each share.
one
will be retained
stock at
$5 per
stockholders of record April 14 at the
common
Unsubscribed securities
by the company and subject to future
be subsequently determined. No under¬
issuance
writer.
-i;:
Proceeds for construction expenditures.
l^iSt
.
ohare.
1
6
' .1
"'I
1$
4
■
Parlin
May
/
at
per
Such option must be exercised or waived
subscription to preferred stock. No under¬
Proceeds for acquisition of plant,
machinery
of
materials
raw
1331
4;
4
}ȣ.
K\
Fidelity-Philadelphia
working capital. Office—
Trust Building, Philadel¬
Peninsular Mortgage Corp.,
Wilmington, Del.
May 4 (letter of notification) $230,000 of 5% bonds of
$1,000 principal amount each, and $20,000 of 4% bonds
of $100 principal amount each.
No underwriter.
Pro¬
ceeds
f.ti
invest
to
in
first
mortgages.
Office—1216 King
St^ Wilmington, Del.
Peoples Gas Light & Coke Co.
May 8 filed 116,962 shares of capital stock to be offered
fc \
:
to
stockholders
share
new
one
June 30, 1950.
!
for
and
phia 9, Pa.
)¥■
rij
share).
writer.
f!
'
Manufacturing Co.
(letter
time
and
r(
''Mi.
22
cumulative
t'
M*
Price—45 cents per
—
of notification)
10,000 shares of 5% '
preferred stock to be offered at par ($10
per share), each share to be accompanied by a warrant
to purchase one share of series B common stock at
par
■.
($1
i
'
Proceeds
Mainly for development. Statement
effective April 10, 1950.
"
<
Gold
Underwriters may be brokers.
.
■;
.
Ltd., Toronto, Canada
July 20, 1948 filed 1,983,295 shares of common stock (par
],(-.■
'* iiv
American
Pan
pur 'if
i
Com¬
pany refines and markets crude oil. Statement effective
May 4.
•;s|l
U
as
may
tr
of
record
for
each
June
seven
5,
1950, at the rate of
held; rights will expire
Price—At par ($100
Underwriter—None.
share).
Proceeds—To buy additional common stock
Natural Gas Pipeline Co. and to
pay
$10,000,000 of bank loans.
per
'.' ■ t
Texas
til
Illinois
Philip Morris & Co., Ltd., Inc.
April 28 filed 130,610 shares of 3.90% cumul. preferred
*itock (par $100) and 333,077 shares of common stock
(par $5) being offered to
it
rate
?%
%K\
of
4,
one
Lehman
$100.75
Brothers
per
of
stockholders May 19 at
for each six shares now
common
common
preferred for each 15
ently held; rights
j".*i
share
are
for
Glore,
Forgan
preferred
*
i
.
®
and
&
$48
Co.
for
Price
May 4 with rights to expire May 29. Underwriter—The
company's offering will be made under competitive bid¬
'K
17
vertible
4i
-*nd
'K
Helicopter Corp. (5/25)
(letter of notification) $300,000 of 4Y2% con¬
debentures due May 1, 1955 (converitble on
after
Jan.
1, 1951).
Price—At par and accrued
interest.
Underwriter—First Boston Corp.
Proceeds—
For expansion progijgm.
"V
t-v'
Bismarck, N.
Insurance Co.,
Life
Potomac Electric Power
Co., Wash., D. C.
April 21 filed 710,700 shares of common stock (par
$10),
being offered to holders of outstanding common stock
record
No underwriter.
Proceeds to maintain the
ratio of capital and surplus to liabilities in con¬
nection with entering the accident and health insurance
field. Office—Broadway at Second, Bismarck, N. D.
July
-
•
Public
(6/6)
May 22 (letter of notification) $250,000 of 6% con¬
vertible debentures, dated June 1, 1950. Price—At par.
Underwriter
None.
Proceeds —For working capital.
Finance
Service,
Inc.
Office—18 West Chelton Avenue,
Ltd., San Francisco, Cal.
April 3 (letter of notification) 10,000 shares of preferred
stock. Price
At par ($10 per share.)
Underwriter—
None.
Proceeds—To restore depleted stocks, buy new
items and for additional working capital.
(par $5).
None.
10,000 shares of
share.
per
Underwriter—
ceeds—To
') ♦.'
t
!
>t\r. :f
pay
ment effective
per
share.
bank loans and for construction.
Pro¬
State¬
May 9.
Pottstown
(Pa.) Small Loan Co., Inc.
May 8 (letter of notification) $100,000 of 5% debenture
bonds due July 1, 1967.
Underwriter—None.
Price—
writer—Willis E. Burnside & Co., Inc., New York
City.
antimony mine which produced
antimony for the U. S. Metals Reserves Corp. during
the war and to explore and develop the Montecilo
mining properties on which company has options; to
pay loans and for working capital. Office—North Ameri¬
can Building, Wilmington, Del. Expected June 1.
Proceeds—To reopen an
&
Co.; Estabrook & Co. and Kidder, Peabody & Co.
(jointly): Lehman Brothers; Harriman Ripley & Co.,
Inc.; Stone & Webster Securities Corp.; Union Securities
Corp.; Salomon Bros. & Hutzler. Proceeds—To pay off
short-term bank loans of $2,100,000 and for construction.
•
U.
writer.
common
1
■
'
J
'• '
Feb. 2
(letter of notification) 300,000 shares of common
(par 10c). Price—$1 per share.
Underwriter—
George J. Martin Co., New York.
Proceeds—For addi¬
tional
working capital.
Business—Assembles a coin
operated combination television and phonograph. Office
stock
.
—701—7th
Seneca Oil
Co., Oklahoma City, Okla.
April 27 (letter of notification) 225,782 shares of class A
stock (par 500).
Price—$1.25 per share. Underwriter—
■
•
Sentry Safety Control Corp. (5/29)
May 19 (letter of notification) 132,050 shares of capital
stock (par $1), of which 33,000 shares will be
initially
offered to public, the remainder to be sold after June
Price—At market (approximately $1
:
;
to
reduce
Pacific
indebtedness owing to
Bids—Will be received
Lighting Corp., parent.
(PDT) on June 7 at Room 934, 810 So.
Flower Street, Los Angeles
54, Calif.
to 8:30 a.m.
for working
Stow Fire &
Burglar Detector Co., inc.
(letter of notification) 1,500 shares of class A
6% noncumulative preferred stock to
be sold at par
($100 per share). No underwriter. Proceeds to
discharge
outstanding debts of less than $5,000 and promote the
15
Fire & Burglar Detector.
Office—2400
Avenue, Knoxville, Tenn.
Sudore Gold Mines
Ltd.,
375,000 shares of
June 7 filed
Toronto, Canada
common
share (U. S. funds). Underwriter
—
stock.
applied to the purchase of equipment
construction, exploration
and
development.
•
Sunray Oil Corp. (6/20)
May 23 filed 750,000 shares of
Price—To be
filed
by
:
amendment.
stock
(par $1).
Underwriter
each
per
Proceeds—For
Texas
50)
to
share.
amendment.
of
com¬
be
offered "as a speculation"
Underwriter —Tellier & Co.
Service
Co.
April 6 filed 65,000 shares of $4.56 preferred stock
par) offered in exchange for a like number of
(no
outstand¬
ing $6
preferred
shares
on
a
common
•
one
preferred share
shares; held; rights to expire on
Proceeds—For
ing construction.
corporate purposes,
includ¬
^
Western Oil Fields, Inc., Denver, Colo.
May 5 (letter of notification) 600,000 shares of common
stock and a $50,000 note
carrying interest at 4% payable
from percentage of oil sold. ! This note will carry with
it as a bonus 500,000 shares of stock.
Price—Of stock,
250 per share. Underwriter—John G. Perry & Co., Den¬
ver.
Proceeds—To drill for oil in Wyoming and for
working capital.
Western Uranium Cobalt Mines,
Vancouver, B. C., Canada
Feb.
Ltd.,
28
filed 800,000 shares of common capital stocif
(par $1). Price—35 cents per share. Underwriter—None,
Proceeds—Exploration and development work.
Wisconsin Electric Power Co.
(6/5)
May 5 filed $15,000,000 of first mortgage bonds, due 1980,
and 585.405 shares of common stock
(par $10), the latter
to be sold to holders of the
outstanding 2,927,021 con}m0,n
shares at
the rate of one new share for five now held.
Price of stock to be filed
by amendment. Underwriter
For
bonds to be determined
by competitive bidding.
Probable bidders:
Halsey Stuart & Co. Inc.; Glore, For¬
gan & Co. and Equitable Securities Corp. (jointly); Leh¬
Brothers and
Merrill Lynch,
Salomon
Bros.
&
Hutzler
(jointly;,
Pierce, Fenner & Beane; First Boston
Corp.; Union Securities Corp. and Harriman Ripley »
Co., Inc. Proceeds—$10,850,000 for partial payment tor
electric properties to be
acquired from a subsidiary,
Gas & Electric
Co., and the balance for
improvements. Expected June 5.
Wisconsin
capita
share-for-share basis up
Gas
&
Electric
Co.
(name
being
changed to Wisconsin Natural Gas Co.)
(6/5>
May 5 filed $3,500,000 of first mortgage bonds, due
Underwriter—To
Probable
working capital.
Electric
20
East¬
Television
(par
31.
Wisconsin
common
Dillon & Co. Proceeds—Together with other funds
$80,000,000 of privately placed long term
promis¬
sory notes, for retirement of certain
outstanding capital
obligations of company and Barnsdall Oil Co.
pursuant
to plan of merger of two
companies.
stock
May
13. Underwriter—Johnston, Lemon & Co., Wash¬
ington, D. C., and eight others. Price—To be filed by
from
mon
Expected
June
man,
•
capital.:
man
Price—$1
None. Proceeds
(5/31)
record May 31, 1950, at the rate of
Casualty Co., Knoxville, Tenn.
April 17 (letter of notification) 11,000 shares of capital
(no par). Price—$10 per share. Underwriters—
Strader, Taylor & Co., Lynchburg, Va., and
Bullington,
Schas & Co.,
Memphis, Tenn. Proceeds—To finance
growth and expansion.
Probably with¬
,
Washington Gas Light Co.
Southern Fire &
stock
Columbus, Ohio
Y.
,
(letter of notification) 19,500 shares of common
stock at $10 per share. Underwriter—The Ohio Co. Pro¬
ceeds—To buy the assets of Brodhead-Garrett Co. and
for
working capital.
and
,
May 8 filed 30,600 shares of $4.25 cumulative preferred
stock (no par) to be offered to common stockholders of
share).
Proceeds
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.; Lehman
Brothers; Harris Hall & Co. (Inc.); White, Weld & Co.;
Merrill Lynch, Pierce, Fenner &
Beane; the First Boston
Corp.; Shields & Co.; Kidder, Peabody & Co. Proceeds—
.
.
May 8
:
per
;
Southern California Gas Co. (6/7)
May 2 filed $25,000,000 of 27/s% first mortgage bonds,
due June 1, 1980. Underwriter—To be decided
by com¬
petitive bidding, along with the price. Probable bidders:
N.
:
Vieh Co.,
Valley Securities Co., Rochester, N. Y. Proceeds
—To acquire properties and for
working capital.
Underwriter—First Guardian Securities
Corp.
—To retool machinery for
inventory and
Avenue, New York,
drawn.
Genesee
—Funds will be
at par
for
Videograph Corp., N. Y. City
stock
Manufacturers of Skippy peanut butter.
per
Proceeds
general purposes.
(par $3),
Underwriters—Stephen¬
son, Leydecker & Co., Oakland, and Barrett Herrick &
Co., Inc., New York.
Price—$8 per share. Business—
Western
300,000 shares of com¬
($1 per share). No under¬
expansion, working capital and
Office—601 Heard Building, Phoenix,
stock to be sold
mon
Alameda, Calif. (6/5)
May 12 filed 111,700 shares of
to be sold by 17 stockholders.
sale of the Stow
Manganese Corp.
(letter of notification)
Arizona.
Rosefield Packing Co.,
•
S.
May 15
Bids—About June 20.
Price —250
Price—$14.50
mon
Light & Power Co. (6/20)
filed 50,000 shares cumulative preferred stock,
series A (par $100). Underwriter—To be determined by
competitive bidding.
Probable bidders: W. C. Langley
May
Mines of Honduras, Inc. (6/1)
(letter of notification) 200,000 shares of com¬
stock (par 50 cents). Price—$1 per share. Under¬
March 16
common
May 5
up
Purpose is to pay
United
Price—$7.25
construction
No underwriters.
indebtedness.
additional production fa¬
cilities and for working capital. Office—59 East Court
For
$3 per share, to be issued to Nationwide
Service (19,396 shares will be set aside
for this purpose).
Proceeds—To purchase
1, 1951.
at
Transport
Remington Corp.
stock
stock
mon
Air
—
•
13 at
•
Turner Airlines, Inc., Indianapolis, Ind.
May 15 (letter of notification) $58,182 of 3% three-year
debentures, due 1953, convertible into no par value com¬
Philadelphia 44, Pa.
Equipment Corp. (5/29)
May 19 (letter of notification) 1,120,000 shares
shares.
applied toward construction. Bids—Expected June
noon (EDT). Statement effective May 9.
—
May 9 at the rate of one new share for each
five held; rights to expire
May 25. Underwriter—Dillon,
Read & Co. Inc., heads a syndicate of nine underwriters
unsubscribed
ding; no underwriter is named for the Cities Service
offering. Probable bidders: Blyth & Co., Inc.; W c
Langley & Co.; Merrill Lynch, Pierce, Fenner & Beane:
Lehman Brothers; Smith Barney & Co. Price—For
400
000 shares to be filed by amendment.
Proceeds—To be
1.
for
*
rate
share for each Cities Service share
held
of one Toledo
proper
road
May
i
Statement
drilling.
and
expenses
27, 1949.
Provident
Piasecki
*
(6/13)
D.
effective June
—
common.
Edison Co.
Toledo
April 19 (letter of notification) 12,500 shares of common
stock (par $10) being offered directly to stockholders
of record April 25 at $20 per share; rights to expire
administration
For
shares pres¬
Underwriters—
Proceeds—To reduce bank loans.
v'*
fi
common
to expire June 5.
and
*
'
.
share
one
held and
Toronto Canada
Ltd.,
Rockland
May 17 filed $80,000,000 of first and refunding mortgage
bonds, series T, due 1976. Underwriters—To be deter¬
mined by competitive bidding. Probable bidders:
Blyth
1959
May 26; unexchanged $4.56
stock win
publicly offered at $110 per share. Underwriters
Kidder, Peabody & Co. and Merrill Lynch, Pierce
Fe!T
ner
& Beane, New York. Proceeds—For
constructor
Statement effective April 26.
U10a«
Street, Cortland, N. Y.
(6/13)
25
be
May 22 (letter of notification)
,
Orchards, Wash.
(letter of notification) 500 shares of common
March 16
eii/j
.
common
Orchards Telephone Co.,
'PJ-PH
n'-l
1,100 shares of
through Preston,
Proceeds—Toward repayment of
bank loans.
»
security
East 40th
as
Office—21
Thursday, May
.
April 18 filed 4,102,000 shares of common stock (par $5)
of which 400,000 will be sold by the company
and hi
remainder are being offered by The Cities Service
Co to
its own common stockholders at $9 per share at
the
Reid Brothers,
stock now held in treasury.
Underwriter—None.
To be
.
>'Hv.
t
Proceeds
of stock
Ohio Oil & Gas Co.
May 5
.
share
one
Petroleum
.
to and including
April 25, 1949, filed 1,150,000 shares ($1 par) common
of which 1,000,000 on behalf of company and 150,000 by
New York Co., Ltd.
Price—50 cents per share. Under¬
writers—S. G. Cranwell & Co., New York.
Proceeds—
street, New York 16, N. Y.
&■
Hb,
Bids—Expected
0
Norway Center, Inc., New York City
May 16 (letter of notification) $100,000 of 15-year 5%
debentures and 1,000 shares of common stock (par $5)
Yw>
Office—213
capital.
Proceeds—For working
par.
High Street, Pottstown, Pa.
(6/12)
.
be determined by
irv7S
competitive bidding.
bidders:
Halsey, Stuart & Co. Inc.; Glore,
Forgan & Co.; Lehman Brothers; Equitable Securiti
/Corp.; Union Securities Corp.; Merrill Lynch, PJ®rc■ ?
Fenner & Beane. Proceeds—For
redemption on or abo
July 10, 1950, of the 33,425 outstanding shares of
preferred stock at $105
per share plus accrued dividend.
Expected June 5.
Wisconsin Power & Light Co. (5/25)
,
May 8 filed 320,231 shares of common stock (par $1'
„
be
offered for
subscription by stockholders
at the
1711
Volume
Number 4910
.. .
The Commercial and Financial
Chronicle
(2189)
share for each five held on May 24; rights
Price—To be filed by amendment.
Proceeds—To finance construction program. Underwriter
!3smith, Barney & Co. and Robert W. Baird & Co., Inc.
Wisconsin Power & Light Co. (6/1)
Mav 8 i'iled $8,000,000 of first mortgage bonds, series D,
Sue 1980. Underwriter—To be determined by competi¬
tive bidding.
Probable bidders: Halsey, Stuart & Co.
Tnc * First Boston Corp.; Salomon Bros. & Hutzler; EquitahlP Securities Corp.; Lehman Brothers; Glore, Forgan
1 Co Harriman Ripley & Co. and Harris, Hall & Co.
fine)" (jointly); White, Weld & Co. and Kidder, Peabody & Co. (jointly); Union Securities Corp. Proceeds—
To repay bank loans and for construction. Bids—Ex¬
f
one
new
expire June 12.
will
opened June 1.
pected to be
•
Columbia Gas System, Inc.
(6/20)
May 17 corporation requested SEC authorization
and sell
Maine
to issue
$110,000,000 of debentures, series A, due 1975.
Underwriters—To be determined by competitive
bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Morgan
Stanley & Co.; Salomon Bros. &
Hutzler; Lehman
Brothers; Merrill Lynch, Pierce, Fenner & Beane. Pro¬
ceeds—To redeem
$14,000,000 of l7/8% serial debentures
and
$77,500,000 of 3%% debentures
500,000^for construction
Commercial
due
1971; and $17,-
program. Bids—Expecjted about
Credit
Co.
30 stockholders
approved creation of 500,000
shares of cumulative
preferred stock (par $100) of which
company plans to sell 250,000 shares. A
group of under¬
March
writers, headed by Kidder, Peabody & Co. and The First
Corp., are expected to offer the stock.
Boston
Prospective Offerings
reported that the
10 it was
May
Consolidated
Power Co.
Alabama
company may refund
$80,000,000 3%% first mortgage bonds due 1972. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; Morgan Stan¬
ley & Co.; Equitable Securities Corp. and Union Secur¬
ities Corp. (jointly); Shields & Co. and Salomon Bros. &
Hutlzer (jointly); Blyth & Co., Inc.; First Boston Corp.;
Lehman Brothers. '
•
YJ;v.\V.
YY'VY \
•
Alabama Power Co.
its
Edison Co. of New
York, Inc.
May 15, Ralph H. Tapscott, Chairman, said the
company
will require
approximately $90,000,000 of "new money"
through the sale of securities. No permanent
financing is
contemplated before this fall, however, and current ex¬
penditures are being financed by short-term
loans, of
which $16,000,000 are now
outstanding. It is anticipated
that $257,000,000 will be needed
for the construction pro¬
gram
over
Stuart
sey,
.
reported to be considering issue in late
of about $10,000,000 preferred stock. Probable
bidders: Morgan Stanley & Co.; Blyth & Co., Inc.; Union
Securities Corp. and Equitable Securities Corp. (jointly);
First Boston Corp.; Drexel & Co. Proceeds will be used
May 12 company
summer
for
construction expenditures.
•
American Investment Co. of Illinois
-v
prior preferred stock
(par $50). Price—To be filed
by amendment.
Underwriters—Glore, Forgan & Co.;
Kidder, Peabody & Co., and Alex. Brown & Sons, and
of
others.
Proceeds—For additional working capital.
American Natural
•
May 18 it was
Gas Co.
announced
380,607 shares of
issuance
of
common stock
to common
stockholders of record on or about June 21 at rate of one
share for each
eight shares held. Price—To be filed by
by amendment.
Underwriters — To be determined by
competitive bidding. Probable bidders: Glore, Forgan &
Co. and W. C. Langley & Co. (jointly); Blyth &
Co., Inc.;
Lehman Brothers; The First Boston Corp. Proceeds—To
increase investments in stock of Michigan Consolidated
Gas Co. and Milwaukee Gas Light Co.
v
•
Arkansas
Power
& Light Co.
(6/19) c ' :
applied to SEC for authority to issue
and sell 155,000 shares of
preferred stock and $6,000,000
of first mortgage bonds due
1980, to be offered at com¬
petitive bidding.
Probable bidders for bonds: Halsey,
May 17
company
Stuart & Co. Inc.; Equitable Securities
Corp. and Central
Republic Co. (jointly); White, Weld & Co.; First Boston
Corp. and W. C. Langley & Co. (jointly); Lehman
Brothers; Union Securities Corp.; White, Weld & Co.;
Merrill Lynch,
Pierce, Fenner & Beane. Probable bid¬
ders for preferred stock:
First Boston Corp. and W. C.
Langley & Co. (jointly); Equitable Securities Corp.;
White, Weld & Co. (jointly); Union Securities Corp.;
and
First Boston Corp.
Proceeds—To be applied to (a) re¬
Aug. 1, 1950, at $110 per share plus dividend
accruals, of all the 47,609 shares of outstanding $7 pre¬
ferred and 45,891 shares of
outstanding $6 preferred;
(b) the prepayment of
$5,000,000 of 2% serial notes held
by Central Hanover Bank & Trust
Co.; and (c) the
carrying forward of the company's construction program.
Expected about June 19.
demption
on
Associated Telephone Co.
April 21
Stanley
Corp.
bidders: Hal¬
&
Co.; First
"
Underwriters—Morgan Stanley & Co.; W. E. Hutton
&
Expected in June.
Domestic Credit Corp.
20 stockholders will
vote, among other
June
things, to
authorize a new issue of
200,000 shares of prior pre¬
ferred stock, issuable in
series, and on changing name
to Domestic Finance
Corp. Management plans further
expansion which will require additionl capital from
time to time.
•
plans
(no par)
company
the next four years. Probable
& Co. Inc.; Morgan
Dayton Power & Light Co.
April 20, it was revealed that
company plans to sell
75,000 shares of preferred stock (par $100) to finance
construction, if favorable market conditions prevail.
•
May 24 announced company is planning to file a regis¬
tration statement about June 1 covering 160,000 shares
i
Boston
Co.
\/Y,Y.:'.;
Florida
Power &
Light Co.
underwriters:
&
Curtis; Mitchum, Tully & Co.
Celanese Corp. of America
Apru 12 the
stockholders voted to authorize the creation
JnAn00'000 shares
005,000
shares
Plans are
n
of
of
a new preferred stock
which can be issued at
being formulated
for the
issuance
(par $100),
any
time.
Gatineau Power Co.
May 2, Bartholomew A. Brickley, trustee of International
Hydro-Electric System, announced that he has selected
Merrill Lynch, Pierce, Fenner &
Beane; Kidder, Pea¬
body & Co., and Harriman Ripley & Co., Inc., as the
syndicate for negotiations in connection with the pro¬
posed disposition of shares of Gatineau Power Co. stock
owned by International in accordance with
part two
of the trustees second plan. It is
expected that at least
$5,000,000 of Gatineau stock will be disposed of.
Georgia
April 11 it
Power
Co.
reported that the company may refund
$101,271,000 3V2% first mortgage bonds due 1971 held
privately by 27 insurance firms. Probable underwriters:
was
its
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.;
Boston Corp.
Feb. 21 company reported to be
ditional
financing
before the
or
First
planning $6,000,000 ad¬
end
of
in
1950;
$18,000,000
in 1952. ,Y Probable
1951, and $16,000,000 more
Halsey, Stuart & Co. Inc.; Morgan Stanley &
Co.; Drexel & Co.; Lehman Brothers; Harriman Ripley
& Co., Inc.; Shields & Co. and Salomon Brothers &
Hutzler (jointly); Blyth & Co., Inc.; Union Securities
Corp. and Equitable Securities Corp. (jointly).
more
bidders:
Iowa
March
Pe
conditions are considered
satisfactory, of
initial series of
this new preferred stock which may
convertible into common stock.
Net proceeds would
,Ps.ed in part for expansion
of the business, including
additional production facilities.
Probable underwriters:
lHon, Read & Co.
Inc.; Morgan Stanley & Co.
a
9'*'_2ens
company announced it plans to sell additional
engage bonds. Traditional underwriter: Lee Higginson
FpkP- Proceeds
*eb- 28,
1950).
are
to fund bank loans ($1,200,000 at
vw!l0'Tbia
Gas System, Inc.
ch*
27 stockholders voted to reclassify, the 500,000
,Jes
unissued common stock (no par) into 500,000
srZes of unissued preferred stock (par $50). They also
sn a°\ed
a Pr°Pusal to amend the company's charter
0„;% t0A Permit the public sale of common stock withenH
making an offering of the shares to its own
call* Pn stockholders. The company's program currently
J ® fpr the sale of $10,000,000 of additional common
rnnc+
stock, the proceeds to be used to pay for
"Pfr "Piion costs. Underwriters
May be named by
Inn. ou?1Ve Adding.'
Probable bidders: Blyth & Co.,
Tyrfl'-n lelds & Co. and R. W. Pressprich & Co. (jointly);
an
5Vz %
in
1950
will
cost
$20,000,000
which
is
currently being
by up to $12,000,000 bank loans pending per¬
manent financing which may be done following effec¬
tiveness of consolidation plan. Probable bidders for any
new
it
securities include Smith, Barney & Co. If common
be sold competitively. If bonds, it is expected
preferred stock filed April 24 with SEC), the*
Lorillard
(P.)
.
Y
$12,000,000. Traditional underwriters:
Smith, Barney & Co.
Lehman Bros,
and
Louisiana
Power
&
"
current
financing) to sell in September, 1950, $4,000,000
$2,000,000 preferred stock. Probable bidden*
Halsey, Stuart & Co. Inc.; Kidder, Peabody &
Co.; White, Weld & Co.; Drexel & Co.; Harriman Ripley
& Co. Inc. and Union Securities
Corp. (jointly); Carl AlL
Loeb, Rhoades & Co.; Lehman Brothers. On preferred
stock: Smith, Barney & Co. and
Goldman, Sachs & Co.
(jointly); Drexel & Co.; Glore, Forgan & Co. and W. C.
Langley & Co. (jointly); Kidder, Peabody & Co.; Carl
M. Loeb, Rhoades & Co.
n
Y-v YY
bonds and
on
bonds:
•
Middle South
Co.^
Utilities
May
17 corporation made application to the SEC for
authorization to offer an aggregate of 400,000 shares oM
its common stock to holders of the
outstanding preferred
stocks of its subsidiaries, Arkansas Power &
Light Co*,
Louisiana Power & Light Co., and
Mississippi Power &
Light Co. Offer will not be underwritten, but company
will use a dealer-manager to be selected
by "competi¬
tion-by-negotiation." The following may submit bids:
Kidder, Peabody & Co.; Merrill Lynch, Pierce, Fenner ife
Beane; First Boston Corp.; Union Securities Corp. - De¬
posits may
be accepted between June 26 and July 14,
with registration expected about June
l.^(See also list¬
ings
of
Arkansas,
Louisiana
and
Mississippi
listings*
elsewhere in these columns.)
Milwaukee Gas Light Co.
'
April 18 reported contemplating issuance of additional
securities, the proceeds of which will be used to finance*
$13,000,000 of first 4M>s due 1967 and $2,000,000 of 7%
preferred stock, to fund
d
$8,500,000 of bank loan%
definite plan has been
bidders—Halsey, Stuart & Co. Inc.;
Dillon, Read & Co. Inc.; Glore, Forgan & Co., and Leh¬
man Brothers
(jointly); Kidder, Peabody & Co.; Harri¬
man Ripley &
Co.; Smith, Barney & Co., Kuhn, Loeb &
and
for
evolved.
some
construction.
new
No
Probable
Co., Inc. (jointly).
Mississippi
Power & Light Co. (6/19)
May 17 company applied to the SEC for authorization to
issue and sell $7,500,000 of first
mortgage bonds, series*
due 1980, and 85,000 shares of preferred
stock, $100
par-
Underwriters—To
be determined by competitive bid¬
Probable bidders for preferred: W. C.
Langley &
ding.
Co. and First Boston
Corp.
(jointly); Blyth & Co., Inc.;
White, Weld & Co. and Kidder, Peabody & Co.; Equitable
Securities Corp. and Shields & Co.
(jointly); Lehman*
Brothers; Union Securities Corp.
Probable bidders for
bonds: Halsey, Stuart & Co. Inc.; Glore, Forgan &
Co.;
Equitable Securities Corp. and Shields & Co. (jointly);
Merrill
Lynch, Pierce, Fenner & Beane; W. C. Langley
(jointly); Union Securities Corp.;"
White, Weld & Co. and Kidder, Peabody & Co. (jointly)*
and First Boston Corp.
Proceeds—To be used to redeem, at $110 per share
plus
dividend accruals, of the
outstanding 44,476 shares of $6;
preferred, and to pay off $3,450,000 of 2% serial notes.'"
Temporary bank borrowings may be made to effect the1
redemption of the preferred stock, any such borrowings
to be repaid from the
proceeds of the proposed financing.
Montana-Dakota
Utilities
May 1 the bondholders voted
Co.
Y...
increase the aggregate
principal amount of bonds which may at any one time be
outstanding to $40,000,000 from $20,000,000.
April
of
19
Kalmus Television
Corp.
planning offering of 400,000 shares
reported
common
to
stock at
National
$1
per
share.
:
(#■
Y
Fireproofing Corp.
stockholders approved
$2,636,900 5% income deben¬
due May 1, 1952, together with interest thereon
amounting to $635,790, and provide additional working
capital, by issuance of evidence of indebtedness not te
exceed $3,500,000.
Probable underwriters: Kneeland &
Co.; Glover & MacGregor.
common
plan to refinance the
tures
New England
April
24
it
was
Power Co.
estimated
that
about
$37,000,000
new
financing
will be required to pay construction costs
estimated at $40,000,000 for 1950 to 1952. Present plans
Co.
April 4, Herbert A. Kent, President, said: "It may be
necessary to do some financing" before Aug. 1, 1951 to
redeem $6,195,450 of 5% bonds due on that date and
for additional working capital to meet expanded sales
volume.
He added that company plans to pay off its
bank loans in full by July, 1950. These loans now amount
•
•
Feb. 9 company informed SEC it intends (in addition to
will
they will be sold through negotiation.
company
plans to issue*
(in addition to 30,000 shares
Metropolitan Edison Co.
a
program
Co.
proceeds to be used for expansion.
April 6 debentures and
•
Light Co.
(6/19)
May 17 company applied to the SEC for authorization to
issue and sell 90,000 shares of new preferred stock (par
$100). Underwriters—To be determined by competitive
bidding. Probable bidders: W. C. Langley & Co. and
First Boston Corp. (jointly); Blyth & Co., Inc.; Equit¬
able Securities Corp.; Kidder, Peabody & Co. and Mer¬
rill
are
to
bonds
issue
and
bidders:
in- late
50,000
(1)
For
summer
shares
or
early fall $10,000,006
of preferred
bonds—Halsey,
stock.
Stuart
&
Probable
Co.,
Inc.;
Brothers; Kidder,
Peabody & Co. and White, Weld & Co (jointly); Union
Securities Corp. and Salomon Bros. & Hutzler
(jointly);
Otis & Co.; First Boston Corp.; Merrill
Lynch, Pierce^
Fenner & Beane; Carl M. Loeb, Rhoades &
Co.; F. SI
Moseley & Co.; Equitable Securities Corp.; (2) for pre¬
Harriman Ripley & Co. Inc.; Lehman
ferred:—W. C. Langley & Co.
New England Public Service Co.
April 7 SEC authorized company to file an application to
sell 200,000 shares of Public Service Co. of New
Hamp¬
shire
common
stock
or
a
Central Maine Power Ct).
sufficient number of shares of
common
stock to raise approxi¬
Lynch, Pierce, Fenner & Beane (jointly); Lehman
Brothers; Union Securities Corp.
Proceeds—To be used
to redeem, at $110 per share plus dividend accruals, the
mately the same amount of money. Probable bidders:
Blyth & Co., Inc. and Kidder, Peabody & Co. (jointly);
shares of outstanding $6 preferred. Temporary
borrowings may be made to effect the redemption
of the preferred, any such borrowings to be repaid from
the proceeds of the proposed financing.
proceeds will be used to pay bank loans.
59,422
bank
—
Rrnfi!
Lynch, -Pierce, .Fenner & Beane; Lehman
CWle/r.s'.Goldman, Sachs & Co. and Union Securities
P»
(jointly); Morgan Stanley & Co.
of
Natalie
that early registration with SEC is
offering of about $18,000,000 preferred
and common stocks through a negotiated deal. Probable
underwriters: First Boston Corp. and G. H. Walker & Co.
to
Utilities Co.
PHI 25
announced
$1,000,000 mortgage bonds
Electric Co.
10 reported
expected of
this year,
market
sn
Service
was
4
financed
*
Public
it
Co. and Blyth &
on creation of
50,000 shares
$4.50 cumulative preferred stock (par $100).
Stone & Webster
Securities Corp.; Paine, Webber, Jack¬
Traditional
10
of
Long Island Lighting Co.
May 18 it was reported company's construction
costs.
April
June 9 stockholders will vote
company reported planning early registration
of
175,000 shares of preferred stock, the proceeds to
finance construction
son
41
(R. H.) & Co.
May 8 it was reported that company is considering issu¬
ance of $10,000,000 of new securities, either debentures
or preferred stock.
Traditional underwriters
Lehman
Brothers; Goldman, Sachs & Co.
Macy
—
Coffin & Burr, Inc.; First Boston Corp.; Harriman
& Co. Inc. and Goldman, Sachs & Co.
Ripley
(jointly); The
•
New York
Central
RR.
*
(6/1)
Bids will be received by the company at 466
Lexington
Ave., New York, N. Y., until
noon
(EDT) for the
pur-1
chase from it of $11,100,000 equipment trust certificate*
to be dated June
15, 1950 and to mature annually from..
>
Continued
on
page
42
42
(2190)
The Commercial and Financial Chronicle
Continued from page 41
(jointly); First Boston Corp.; Kidder, Peabody & Co.;
June 15, 1951 to 1965, inclusive. Probable bidders: Hal-
(3) for both issues: Lehman Brothers; Harris, Hall & Co.
(Inc.). Proceeds are to finance expansion.
Stuart & Co. Inc.; Salomon Bros & Hutzler; Har-
sey,
riman Ripley & Co. Inc. and Lehman Brothers
New
York
April 27 it
State
Electric
announced
was
&
Gas
this
that
April
Corp.
000
sell later this year or early next year serial
preferred
stock or debt securities or a combination of them.
The
exact
method
1968;
new
Pacific
Petroleum,
Ltd.
of common stock from American Power &
Light Co. on
last, have informed him of their intention to
public distribution of these shares at earliest
practical date, which may be shortly after Aug. 6. A. C.
Allyn & Co., Inc. and Bear, Stearns & Co. headed this
group. The 500,000 shares of common stock are
being
split-up on a 31/2-for-1 basis, all or part of which will
6,
a
be
publicly offered. Company also expects
$3,000,000 in new money later this year and
•
to
raise
Pennsylvania Co.
Sobering Corp.
May 4, it was announced
Bids will be received at or before noon
at office of
company, 44 E. Lancaster
for
Ard-
exchange, share for share, for
pres¬
1951.
Traditional Underwriters —
First Boston Corp.; Drexel & Co.
Proceeds—To finance
balance of 1950 construction
program.
•
Pennsylvania RR.
May 23
issue
series
company
to
the ICC for authority to
$60,000,000 of its general mortgage 4V4%
bonds,
H, to be dated April 1, 1950 and mature
1, 1986.
the
applied
All
April
or
part of the bonds will be purchased
by
and the proceeds used
to pay the
15-year convertible 3J/4% debenture bonds.
that the company's entire
(440,000
was
shares)
near
from treasury funds.
Invitations to bid for the new bonds
are expected to be sent
out about May
29, calling for bids
to be expected June 15.
Probable bidders:
Halsey, Stuart
& Co.
Inc.; Morgan
Texas
May 8 it
Illinois
was
;
Natural
of
1,750,000 shares of
notes in addition
which
will
?
to
go
the
Power &
Light Co.
to
from
the
bond
and
stock
sales will be
repay
West Coast Transmission
Co., Ltd.
Feb. 10 reported that
Boston Corp. were
Eastman, Dillon & Co. and the First
ready to underwrite the financing
1,400 mile pipe line proposed by the West Coast
•Transmission Corp., along with
Nesbitt, Thomson & Co.,
Ltd., of Montreal, Canada, and
Wood, Gundy & Co. of
Toronto, Canada. The financing would be divided 75%
to bonds and the
remainder to preferred and common
stock.
A large amount of the
bonds are expected to
be taken by life insurance
companies. Arrangements will
•of the
be made to
place in Canada part of the securities.
expected
an
American corporation will
construct and operate the American
end
be
of
It is
formed to
the line in
-Washington, Oregon
was
and California. The completed line,
announced, will cost about $175,000,000.
Worcester County Electric Co.
financing
of
to
of
| for bonds: Halsey, Stuart & Co. Inc.; Drexel &
Co.; Har¬
riman Ripley &
Co., Inc. and Union Securities Corp.
(jointly); Kidder, Peabody & Co.; White, Weld &
Co.;
Lehman Brothers; Carl M.
Loeb, Rhoades & Co.
v
April 25
company reported planning issuance of $10,000,000 first mortgage bonds. Probable bidders:
Halsey,
Stuart & Co. Inc.; Harriman
Ripley & Co., Inc.; Lehman
Brothers; Kidder, Peabody & Co.; First Boston Corp.;
Merrill, Lynch, Pierce, Fenner & Beane.
:
/.
bonds
the
sale
common
is to be purchased
Utah
Pipeline Co.
that this
company's
the sale of
$90,000,000
proceeds
short-term loans in connection with the
company's construction program, and for
carrying for¬
ward the expansion
program into 1951. Probable bidders
it
announced
program contemplates
and $12,000,000 of interim
stock 50%
Gas
"
the
May 23, G. M. Gadsby, President, said
company plans to
sell
$10,000,000 of additional first mortgage bonds
through competitive bidding during the first half
of
October, and 166,604 additional common shares in
Sep¬
tember. The latter will be offered to
present shareholders
in the ratio of one new
share for each eight shares
held. Proceeds
Tampa Electric Co.
struction expenditures.
of
selling stockholders. Underwriters
Co., Inc. and Rauscher, Pierce & Co.
used
(6/15)
be retired
part
company and part to
—A. C. Allyn &
•
announced company is
April 25 it was announced
company plans to raise
$4,700,000 in new money through sale of
additional
securities, the proceeds to finance in part 1950 con¬
Service Co. of Colorado
May 22 stockholders voted to increase the
authorized
preferred stock (par $100) from
300,000 shares to 375,000
shares; the additional 75,000 shares, in addition to
$7,500,000 debentures are
expected to be sold about mid-year.
Probable bidders: (1) for
preferred: Glore, Forgan & Co.
and W. C.
Langley & Co. (jointly); First Boston
Corp.,
Boettcher & Co. and
Bosworth, Sullivan & Co. (jointly);
Lehman Brothers; (2) for
debentures: Halsey, Stuart &
Co. Inc.; Blyth &
Co., Inc., and Smith, Barney & Co.
working
common
stock,
.
Union Securities
Corp. and Drexel & Co.
Public
was
Tucker's (Mrs.) Foods,
Inc., Sherman, Tex.
May 13 it was reported that registration is
expected
early in June of an undetermined amount of
com¬
expected to be
future and offered
was
planning to refund
$10,000,000 of its $12,474,000 St. Lou^ Division first
mortgage 4% bonds, due Jan. 1,
1951, by issuing a like
amount of new first
mortgage bonds. The remaining
$2,474,000 of St. Louis Division bonds would
(See also Pennsylvania Co. above.)
''
reported that early registration with
SEC
shares of common stock.
Price—
$2.75 per share. Underwriter—Blair F.
Claybaugh & Co.
Proceeds—To pay loans and for
additional
highest bidder by the Office of Alien
Southern Ry. Co.
Corp.
Transvision, Inc.
May 20 it
Stanley & Co.; First Boston Corp.;
(jointly).
Pennsylvania Co.
railroad's
.
May 2 it
Co.
is expected of 300,000
July. Probable bidders: Morgan
Stanley &
Co., Kidder, Peabody & Co. and Merrill
Lynch, Pierce,
Fenner & Beane
(jointly); Blyth & Co., Inc.; Lehman
Brothers; Union Securities Corp. and Equitable Securi¬
ties Corp. (jointly); Harriman
Ripley & Co. Inc.
outstanding 4Y2% preferred stock. It is expected not
over 75,000 shares of
series preferred stock will be sold
early
•
stock late in
Light Co.
&
Union Securities
.
issue
or
Lynch, Pierce
(jointly); First Boston Corp. and
Glore'
(jointly); Lehman Brothers,
Harriman
Ripley & Co., Inc., Bear, Stearns & Co. and
Carl M.
Loeb, Rhoades & Co. (jointly); Smtih,
Barney & CnFenner & Beane
Southern Co.
May 11 company was reported to be
planning issuance
of
approximately 1,000,000 additional shares of common
17 the stockholders voted to authorize
100,000
additional shares of series prefgerred stock
and 12,000
additional shares of 4V2% preferred
stock. Latter
in late 1950
the
sell
Forgan
national Securities
Corp.; Dillon, Read & Co.; F. S. Moseley & Co.; Riter & Co.
April
ent
to
Edison Co.
was announced that the
company plans to
issue
$7,500,000 additional first mortgage
bonds in
December, 1950, and probably additional common
stock
sometime during 1951, the proceeds to
be used to
com¬
plete expansion program.' This is in addition
to prol
posed issuance of 400,000 common
shares, bids for which
are expected around June 13.
Probable bidders:
Halsey
Stuart & Co. Inc.; W. C.
Langley & Co.; Kidder,
Peabodv
& Co., White, Weld & Co. and Merrill
Probable bidders: A. G. Becker & Co.
(Inc.),
Union Securities Corp. and
Ladenburg, Thalmann & Co.
(jointly); Merrill Lynch, Pierce, Fenner & Beane; Kid¬
der, Peabody & Co.; F. Eberstadt & Co.; Allen &
Co.;
new
company to be formed by United States & Inter¬
Ironton RR. stock at $105.50
per share.
is to be offered in
sale
Securities Cn'r^.
Langley & Co.
May 9 it
Property.
Pa., for the purchase from it of $60,000,000 col¬
lateral trust serial bonds to be dated
May 1, 1950, and
to mature in 25 annual instalments of
$2,400,000 each
from May 1, 1951 to
May 1, 1975, inclusive.
Probable
bidders: Halsey, Stuart & Co.
Inc.; Kuhn, Loeb & Co.;
First Boston Corp. and
Kidder, Peabody & Co. (jointly).
Proceeds to be used to
buy $44,000,000 of Pennsyl¬
vania RR. general
mortgage ^Va% bonds, series H, and
to pay in part for
200,000 shares of Detroit, Toledo &
&
issue
approved an increase
in the
stock to 1,000,000 shares
from 500 000
Traditional underwriters: Union
capital. Offering—Expected late in June.
registered with the SEC in the
(EDT) June 6
Avenue,
more,
Pennsylvania Power
stock
mon
(6/6)
C.
and
thereafter to and including June 15, 1965.
Probable bidders: Halsey, Stuart & Co.
Inc.; Salomon
Bros. & Hutzler; Lee Higginson
Corp.; Harriman Ripley
& Co., Inc., and Lehman Brothers
(jointly); Harris, Hall
& Co. (Inc.).
similar
a
bidders:
and
"
15 in each year
1951.
Inc.;
common
Toledo
Reading Co. (5/25)
Light Co.
April 13, Paul McKee, President, disclosed that a group
of 16 purchasers who acquired
company's 500,000 shares
amount in
W.
Bids will be received at the company's office at Room
423, Reading Terminal, Philadelphia 1, Pa., up to noon
(EDT) on May 25 for the purchase from it of $5,430,000
equipment trust certificates, series S, to be dated June
15, 1950, and to mature in semi-annual instalments of
$181,000 each on Dec. 15, 1950, and on June 15 and Dec.
Pacific Power &
195Q
stockholders have
shares.
1970
Probable bidders:
minent.
derwriter—Eastman, Dillon & Co.
make
due
bonds
Co.
authorized
Raytheon Manufacturing Co.
May 12 company was understood to be planning the issu¬
ance of additional common
stock, probably with Hornblower & Weeks as underwriters.
Financing not im¬
(Canada)
announced it plans to file with SEC
additional shares of common stock shortly.
company
Proceeds (U. S. currency) will be used for further
expan¬
sion and development work in the Alberta oil field.
Un¬
Feb.
3%
&
May 4
and $15,000,000
Halsey, Stuart & Co.
Inc.; Morgan, Stanley & Co. and Drexel & Co. (jointly);
Kuhn, Loeb & Co. and Lehman Brothers (jointly); First
Boston Corp.
1952.
April 12
1,000,000
approved the issuance of $90,bonds for the purpose of refunding $50,000,bonds due 1965; $10,000,000 3Y4% bonds due
$15,000,000
Thursday, May 25,
.
Tide Water Power Co.
stockholders
3y8%
Probable
.
(1) for
bonds—Halsev
(2) for interim
notes—Whit*
Weld & Co. and Glore, Forgan & Co. V
new
bonds due 1972.
of
financing has not been determined.
company will require approximately
$30,000,000
money to complete its construction program through
The
17
000,000
plans to
Co.).
Stuart
Public Service Electric & Gas Co.
(jointly).
company
Coke
.
stock (of the common
by Peoples Gas Light &
,
June 2, 1950
Bond Club of Chicago annual
field day at the Knollwood Coun¬
COMING
try Club.
EVENTS
In
June
Investment Field
(Cincinnati, O.)
Club
Municipal Bond Dealers Group
Spring Party June
2, 1950
and Outing at the Kenwood Coun¬
May 26,
1950
(Pittsburgh,
Pa.)
Pittsburgh
Securities
Traders
Association annual outing at
High¬
land Country Club.
May 29, 1950
(New York)
«'Toppers" annual outing at the
Montclair County Club,
N.
Montclair,
J.
May 30, 1950
Dallas
Bond
(Dallas, Tex.)
Club
annual
field
(Los
Angeles,
Los Angeles
Country
(New York City)
Bond Club of New York
annual
field day at
Sleepy Hollow Coun¬
try Club, Scarborough, N. Y.
June
5-8, 1950 (Canada)
Investment Dealers Association
of Canada 34th Annual
the
Seigniory
Club,
Quebec.
June 6, 1950
Sleepy Hollow Country
Scarborough, N. Y.
(Philadelphia, Pa.)
Philadelphia Securities Associa¬
an¬
tion
Aronomink
field
Golf
day
at
June 10-11, 1950
10-11, 1950
Calif.)
(New Jersey)
Jersey out¬
ing at the Montclair Golf Club.
(Georgia)
(San Francisco,
June 8, 1950 (Boston,
Mass.)
Boston Securities Traders Asso¬
ciation Thirty-first Annual
Security Traders
spring outing
at the Diablo
Country Club, Con¬
tra Costa
County, Calif.
Twin
picnic
(Minneapolis, Minn.)
City
at
the
Bond
White
Club
Bear
Toledo
16th
an-
buffet dinner June 15 at the Com¬
modore Perry,Hotel.
June
20, 19504(New York City)
New York
Curb Exchange
Yacht
&
21-23, 1950 (Boston, Mass.)
Municipal Bbnd Club of Boston
parties at Hotel Statler and
outing
at
Conqor.d Country Club.
£3t£5>
Calif.)
1$50
(Los
Angeles,
r
Security Dealers Association
Los
June
of
Angeles spring outing at the
Hotel del
^oronado.
23, 1950 (New York City)
New York
Security Dealers
sociatibifv 'Anntml
Outing
at
golf
June 28, 1950
outing
at
Plum
(Pittsburgh, Pa.)
Bond Club of Pittsburgh
annual
spring outing at the Field Club. /
Investment Association of New
York annual
outing at the West¬
East chester Country Club, Rye, N. Y.
June
annual
Club.
5
ing and
Hollow.
July 7, 1950 (New York City)
20 Club annual
golf tournament at
June
San Francisco
June 14,1950
(Toledo, Ohio)
of
nual
Association annual
Bond Club of New
Club
Wheatleyv Hill§l Golf Club,
Williston, Long Island.
Georgia Security Dealers Asso¬
ciation annual
outing at the Hotel
Tybee, Savannah, Ga.
June
Bond
the
Club, Newtown
Square, Pa.
Meeting at
Montebello,
annual
June 16, 1950
Outing at the Inverness Club
Club, preceded by a? cocktail party and
June 9, 1950
of
nual field day at Bel-Air
Club.
of Cincinnati Annual
try Club (to be preceded by a
cocktail party and dinner
May 25
for out-of-town
guests).
June 9, 1950 (New York
City)
Municipal Bond Club of New
York annual
meeting and field day
at
2, 1950
Calif.)
Bond
May 26, 1950
(Chicago, III.)
Sept. 15, 1950
Asthe
Field
Day at the Manufacturers Coun¬
try Club.
Sent. 26-30, 1950 (Virginia Beach,
Va.)
Annual Convention of the Na¬
tional Security Traders Associa¬
tion at the
Cavalier Hotel.
Oct. 12, 1950
>
(Philadelphia, Pa.)
Bond Club of Philadelphia
Dallas
(Dallas, Tex.)
Bond
Club
Annual
Fall
Meeting.
Outing
Hempstead Gol&Club, Hempstead, Nov. 26-Dec. 1, 1950 (Hollywood,
House, Swampscott, June 16-18, 1950
(Minneapolis, Long Island.
Fla.)
Mass., with golf at the Tedesco
Minn.)
<jj%'
May 30, 1950 (New
Orleans, Country Club nearby.
June 24, 1950
Twin City
Investment Bankers Association
^Chicago, 111.)
Security Traders As¬
La.)
annual convention at the Holly¬
sociation summer
June 9, 1950 (Baltimore,
Bond
Bond Club of New Orleans
party at GrandMd.)
an¬
Trader^ Club of Chicago wood Beach Hotel.
Bond Club of Baltimore annual view
nual field
Lodge,
Gull
annual outjag at/the Nordic Coun¬
Lake,
near
day at Lakewood
outing at the Elkridge Club.
Brainerd, Minn.
Country Club.
try Club.
'
Dec. 8, 1950 (New York City)
day at the Dallas Country Club.
June 2, 1950
(Buffalo, N. Y.)
Bond Club of Buffalo
Spring
Party at Wanakah
Country Club.
at New Ocean
June 9, 1950 (Kansas
City, Mo.)
Bond Traders Club of
Kansas
City annual field day at Quivera
Country Club.
June
16, 1950
(Philadelphia, Pa.)
Investment Traders Association
of Philadelphia annual field
day
at
Whitemarsh Country Club.
New York Security Dealers As¬
(Detroit, Mich)
Security Traders Association of sociation Silver Anniversary Din¬
Detroit & Michigan,
Inc., and Bond ner at the Waldorf Astoria Hotel
June 26-27, 1950
Club
ofTJetWirjOlftt
summer out¬
(Starlight Roof).
:
Volume
Number 4910
171
The Commercial and Financial Chronicle
...
headed by a big West Coast
firm,
the second by a Chicago house,
and the third by a New York
Our
(2191)
hint of the type
to
be
Stockholders
of
of
are
,
Mr
|
before
S^dWt!
DIVIDEND
The Board of Directors declared
able
June
Common Stock pay¬
to
holders of record
1950,
9,
continued to mount.
was a banner week in corpor-
It
standpoint of ability
to move the new offerings which
came to hand. Three sizable util¬
ity bond issues, all of high qual¬
ity, and involving a total of about
$83,000,000 moved out in brisk
yielded
and
May 29, 1950.
ROGER HACKNEY, Treasurer
Two
POWER
DIVIDEND
The
clared
a
Rector
Street,
CAPITAL
York
New
STOCK
N.
6,
D.
W.
JACK,
which
gave
Pittsburgh,
At
also
Beard
dollar
twelve
Stock
$17,500,000
of
has declared
a
cents
per
REYNOLDS
METALS
close of business June 5,1950.
GAS
Wm. M. Hickey,
company
LOUISIANA
/
Reynolds Metals Building
Richmond 19, Virginia
May 18, 1950
the
of
declared
(25<f)
Cor¬
of
of
thirty-seven
share on the Common Stock
Corporation, payable July 1,
one
of record at the
the
June 9, 1950.
dose of business on
T950.
1,
dividend
of one dollar
and
one-half cents
($1,375) a share on the outstanding
51/2% cumulative convertible pre¬
ferred stock has been declared for
UNITED FRUIT COMPANY
J. H. Miracle,
cents
19,
McCASKEY,
stock
International Salt
new
3s
priced
were
to
yield
DIVIDEND NO. 144
INTERNATIONAL
similar coupon came out on
a 2.764%
yield basis, ar„d Brook¬
lyn Union Gas Co.'s $8,000,000 of
the
HARVESTER
CENTS
COMPANY?
around
clared
The
next
InternationaL-Har-
of
Directors
really
large-scale
yester Company have declared,..quar¬
public utility financing
in the works is the $80,000,000 un¬ terly dividend No. 140 of thir^-five
cents (35^) per share on the common
dertaking filed recently with thp.
stock payable July 15, 1950, to stock¬
Securities and Exchange Commis¬
holders of record at the close o£-busi¬
sion
piece of
by Pacific Gas & Electric Co.
ness on
Upon completion of this financ¬
procured
capital
carry
about
80%
calculated
as
of
the
Dividends of
J. Osborn, Secretary
a
J. EGER, Secretary
been
share
<►
on
the
share
<►
<►
com¬
u
a
<►
the $3.50
on
preferred stock and
<►
the $4.00
preferred stock have been de¬
COMPANY
::
consecutive
<►
<►
$1.00
share
a
on
<►
dividend
paymentsj
<►
clared, payable on July
Corporation
'
DIVIDEND
one
No. 62
.
NOTICE
DIVIDEND
J
dividend
(25c)
on
the
outstanding
declared
common
of
this
Corporation,
30,
per
1950, to stockholders
payable
a
share
the close of business June
<►
12, 1950.
dividend of 32 cents
on
<►
<►
<►
<►
<►
of Directors today
SOUTHERN CALIFORNIA
::
EDISON COMPANY
George W. Merck,
the Common Stock
May
23,
President
1950
Company, payable
of the
i
preferred dividends
July 1, 1950 to stockholders of
of record at the close of business on
June 7,
Board
The
cents
June
stock
on
twenty-five
share has today been de¬
per
clared
of
1,
1950, to stockholders of record
at
A
/
\
u
cumulative
41 year of
<►
cumulative convertible second
organized
St
<>
37V^
stock, 87V2<t
mon
program.
have
::
u
be closed.
COMMERCIAL SOLVENTS
y
<►
UTILITIES
Anticipating that bids for this
/
INC.|
N. J.
RAHWAY,
to
offering will be called for about
June 13, three investment
banking
groups
f MERCK & CO..
will not
books of the Company
through its six-year postwar
expansion
•
<►
transfer
stock
The
1950.
DILLARD, Secretary
18, 1950
Dated, May
<►
the close of business on June
15,
Bank of
A######################
T—
new
required
at
HERVEY
June 15, 1950.
GERARD
ing the big coast utility will have
stock of
1950, to stockholders of record
.
be closed.
mailed
be
Treasurer
payable July 1,
this Company,
2.85% to the buyer.
The
capital
the
payable
has been de¬
share
a
on
will
ALLYN
n. leonard
SEVENTY-FIVE
common
declared
been
by
Manhattan Company.
Checks
1950.
emery
A dividend of
twenty-five cents (25tf)
the outstanding
The transfer books will not
1950 to stockholders
June 8,
on
has
July 1, 1950, to holders of record at
the close of business June 19, 1950.
payable July 14,
of record
been declared
company
a
of
share
stock
share on the capital
this Company has
cents per
Secretary
seventy-five
of
dividend
Ji&,
1950.
A dividend of
a
A
A.
NO. 204
DIVIDEND
1950,
30,
ending June
quarter
payable July 1, 1950, to holders of
record at the close of business June
Secretary
May 24, 1950
regular dividend
The
per
the
1950, to stockholders
the closp of
DIVIDEND
COMMON
Directors has this date
dividend of twenty-five cents
a
DIVIDEND
PREFERRED
Dividend Notice
The Board of
($1.12^c)
per share on the $4.50 Cumulative Preferred
Stock of the Corporation, payable June 15,
1950, to Preferred stockholders of record at
the close of business on June 1, 1950.
one-half
S.
dividend of
a
share on the
COMMON STOCK, pay¬
10
President
the
on
June
on
declared
and
Secretary
a
with
declared
cf record at
business
The
yield of 2.77%, while Ohio
Edison's $58,000,000 of new bonds
2%s
was
stockholders of record at
to
the close of business June 2, 1950.
Board of Directors
The
record at
1950.
Treasurer
SHREVEPORT,
poration, payable June 30,
1950, to Common stockhold¬
ers
1950
Penna.
Common
plainly evident:
the
able June 30, 1950 to stock¬
holders of record
at the
a
meeting of the Board of Directors of
Allegheny Ludlum Steel Corporation held
today, May 17, 1950, a divi¬
dend of fifty cents (50c) per
che
for
closed
KENNETH H. HANNAN,
H. MICHAELI.
May 16, 1950
Allegheny Ludlum Steel Corporation
market at prices
Oklahoma
Gas &
Co.'s
to holders of
J.
be
not
per
The UNITED Corporation
CORPORATION
The aforementioned bonds were
Electric
1950,
UNITED
bankers in
to
1,
will
dividend.
A. SIMPSON, Treasurer.
May 18, 1950.
Y.,
Fifty cents
share on the outstanding
capital stock of this Corporation
has been declared payable July 1,
(50tf)
de¬
share on the
and Treasurer
Secretary
share
brought
per
the close of business June 8,
dividend of 16c per shafe on the Capital
Stock of American
Power
&
Light Company
was declared on May 23, 1950, for payment July
1, 1950, to stockholders of record at the close
of business June 5, 1950.
fashion.
bidding for the bonds
had a little more thought for the
ideas of the ultimate buyer who
has been decidedly "cool" to new
issues where the yield has been
much under a 2.7% basis.
dividend of 25<t
able July
Y.
A
'
books
this
N.
A cash dividend of
212
NO.
Directors has
of
DIVIDEND
ates from a
The reason was
Board
York,
of the par value of $12.50 per share, pay¬
COMPANY
LIGHT
&
of
J.
outstanding Capital Stock of the Company
AMERICAN
transfer
payment
New
LIGHTING COMPANY, INC.
ucc
A
QUARTERLY DIVIDEND of One Dollar and
Cents
($1.25) per share on
the
Stock of this Company has been de¬
clared payable at the Treasurer's < Office,
No.
165 Broadway, New York 6, N. Y., on Monday,
June 19, 1950, to stockholders of record at three
o'clock P. M., on Monday, May 29, 1950. The
CORPORATION
AND CARSON
130
Twenty-five
stock
AND
Union Carbide
Common
THE SAFETY CAR HEATING
no
DIVIDEND NOTICES
to
shelves
fall,
NO.
DIVIDEND
dividend
a
DIVIDEND NOTICES
some¬
COMPANY
SOUTHERN PACIFIC
-
of 60<f per share on the
l^#l
buyers permitted / under¬
writers this week to get corpor¬
ate inventories down a bit.
But some bankers were inclined
tional
cast a baleful eye in the direc¬
tion
of the
municipal market,
where the
so-called "blue list'that is bonds unsold on dealers'
the
for
• j |
.
price new issues for reoffering
L a basis that attracted institu¬
bonds
on
around $50,000,000 or $60,-
000,000.
Iff.1 Johns-Manville
k i
Corporation
Ralph
Tapscott,
C Ha i r m a n,
Somewhat more realistic bid¬ stated that no permanent financ¬
ing along this line would develop
ding and consequently the ability
to
calculating
where
DIVIDEND NOTICES
-*•
New
York, Inc., were
advised at the recent aqpual meet¬
ing that the company probably
would require
about $90,000,000
of new financing beforCfhe end of
the year for its expansion pro¬
gram.
' '3k >
Report
bankers
Consolidated
JOHH9-MANVU.il
Gas Co.
s
But
^TVIDENDNOTICES
derwriting firm.
,
size of the issue
or
expected.
un¬
43
ORIGINAL PREFERRED
record at the close of business
STOCK
DIVIDEND NO. 164
1950.
May 31, 1950.
CUMULATIVE PREFERRED
A. R. BERGEN,
N
,
security analyst
RICHARD
Secretary.
►
BULLWINKLE
CHEMICALS 1
STOCK 4.32% SERIES
Secretary
May 23, 1950.
T
DIVIDEND NO. 13
TEXTILES
r
May 19, 1950
CUMULATIVE PREFERRED
PLASTICS
SERIES
STOCK 4.0f%
DIVIDEND NO. 1
The Board of Directors
Beneficial
*
Special Bulletin*
Industrial Loan
"'V'' '
;* Market Letters
(20c)
SIS
per
ISO Msdiaon
Service Busy Wire &
tion
Heavy Correspondence
June
was
15,
Dividends have
declared
$3.25 Dividend Series of 1946
$.8H/4
May 31,
1950. Checks will be
per
J511, Commercial
financial Chronicle,
Place,
25 Park
New York 7.
ness
=
The dividends
19 JO
PHILLIES
to
per
are
of $1.18;K per
Julv 1, 1950 to
payable
preferred stock
regular quarterly dividend for
the current quarter of $1.75 per share,
payable July 1, 1950 to holders of
business June
common stock
payable June 30,
at
Treasurer
60
cents
Orig¬
stockholders
June 5, 1950.
on
share
on
Cum¬
Stock, 4.32%
June 5, 1950.
An initial
per
clared by the
on
the
dividend of 3.4
share
new
was
also de¬
Board of Directors
series; of 4.08%
Cumulative Preferred
Stock,
payable August 31, 1950, to
stockholders of record August
2, 1950.
share
on
Series, payable June 30, 1950,
to stockholders of record on
June 2, 1950.
record at the close of
stockholders of record
share
Stock, payable
ulative Preferred
close of busi¬
The
close of business June 5, 1950.
Philip Kapinas
j
regular quarterly dividend for
7% second
COMMON STOCK
$.37|/2
of record
cents
$1 per share
Philadelphia, Pa.
May 19,1950
America's 0ffflfar
The
holders of record at the
and
XHEASCKEB
$4.75 series
share,
share
(for quarterly period ending
June 30, 1950)
.ox
50 cents per
inal Preferred
27 cents per
first preferred stock
the current quarter
$4 Dividend Series of 1948
mailed.
THE Boardthe Directors has this day
of following dividends:
declared
follows:
CUMULATIVE PREFERRED STOCK
payable
1950 ..to .stock¬
holders of record
been declared by
the Board of Directors, as
Corpora¬
Avenue, Now Yoik 14, N.Y.
June 30, 1950, to
DIVIDEND NOTICE
share oj^the Com¬
Stock of this
mon
*
CORPORATION OF AMERICA
Corporation
A dividend of twenty cents
has
of the
following quarterly dividends:
authorized the payment
5,
share, payable June
holders of record at the
per
23, 1950 to
close of business June 2, 1950.
^
_
"""•
May 22, 1950
May 23, 1950.
R. O. GILBERT
1950, representing
crued dividend for the
the ac¬
period
May 19, 1950 (date of issue)
to
and including May 31, 1950.
T. J. GAMBLE, Secretary
Secretary
May 16, 1950
v
m
The Commercial and
Financial Chronicle
A
Bektod-the-Scene InterprettBoni
the loan with
n*
These latest little
proposals are
all wrapped
up in a bill
which
unless the economics
of the
pr0Dn'
sition become more
•
widely
derstood, is likely
Congress, and
gj
to
by
unanimous
tion
in
rarily
ties
WASHINGTON, D. C.—There is
It
of
bill very much with its tongue
#11 its cheek—feeling either that
the
lite Senate will kill the whole tax
V'Kli'i
its administrator.
bill
cut
will
the
or
stick.
It
President's
is
even
At
veto
about
that
time
Congress
■that Congress may get the bill to
1lie White House so near the end
s
session
that the
The best chance of
5.Tm>v
President
pocket-veto it.
can
i b 1
a
■
fKV*
C?")5/
r-
rl^vVyj
:vNvi*
feHivIv
V
.
;
•
4%, the present rate.
i
MV,..
4 -
>
in
j'!«
v
*
•■•
v#J-(+K
i ^'!'
)•;" J
;*>»;.
;
■)
•
P
\
u- v
■h'+v;':',
.v
Ibli 1
'I'""
a
or
leave it. Un-
These
could be expected to take the Sen-
ale bill, and a veto could be over¬ bursed and $189 million
ridden, if passage was not too near rently outstanding.
end of the session.
Farm
Security
are
the
from
-
thing which, however, is exceed¬
ingly rare
with the genus bu-
pV<;
•> i't;
■
)•)
■.
-
•A v4:
about
this
to
be
bureaucracy
able
to
turn
on
is
the
faucet on a total of up to $200
million of loans per year. If $200
million counts in these days of
4&2-billion dollar budgets, then the
little bureaucracy may be on the
I
vn
to
to
way
rkiih
> •
about
now
importance,
half
the
disbursing
This
.
little
loans
a
for
that
is
the
RFC
is
year.
faith
ernment
rcaucraticus.*
Yet
f>
the
for
Congress
and
the
*>wl,
!
long as the original
distribution is of "private" funds
oticased
M
1; :
St Ai
''
in
a
government-guar¬
antee and the time when the
guar¬
antee might come home to roost on
4&he Treasury is a hazy few or a
dozen
years
away—and
if
this
oovoids the appropriation of funds
mud the admission of an expense to
4lie taxpayer.
: : \
•
">
In the latter respect, the
story is
oArikingly akin to the action of
:'P)P
oCongress, reported in this column
jftpril 13, of shifting to the Federal
Housing Administration the ex¬
\
'
i
'2
iV
U'»
pense of financing housing at out¬
lying ,military posts, and taking
litis
^
i,'
*
V:
•
*
historic
governmetal
charge
«*ut of the Budget.
Administration,
not
endear FS
adores
to
or
seem
to
There
was
at FS.
appease
a
•£ fAjt.
Congress.
posed that FS be given $400 mil¬
lion
to
make
tenant
with
yield
a
to
the
bank
or
insurance company of but 2V2% on
a
90% loan, did not go across.
(The insurance ratio is 90% and
not 100% as reported a week
ministration act to
"FHA" to loan for the
purposes of
improving
well
or
direct
loans
government
On
expanding farms,
This was, of course, a great
leap.
It put the "FHA" with its exceed¬
pos¬
sibly
go
collateral
to
such
and
high ratio of
private
lenders
a
a 40-year con¬
tract, even if in practice it looks
like, according to "FHA," that
farmers will actually
pay out in
insured loan the borrower it is a general farm
mortgage lend¬
is free to borrow the
10% down- ing institution.
payment any way he can so long
The newest gadget is to
extend
as he
does not further encumber
"FHA" insuring
authority by law,
the real estate.)
;
automatically, without recourse to
Meanwhile,
however,
it \ was Congress, to $200 million a year
out
over
a
year
ago
and
every year, and:
.
a
Home
Administration, still to little amended the Farmers Home
avail.
It had to be satisfied to
get
along
for
on
$15 to $25 million
loans to
allow
"owners"
of
a
"FHA"
did, however, wangle enough mon¬
ey
to keep a little bureaucracy
easy
loans,
available
to take
Tfcgwell in charge, and RA spon->
*sered so many daring experiments
fit
ing of
a
even
if the loan money
seldom great enough
of more than the clos¬
was
care
one or
two loans to
HAnover 2-0050
;
were
private
lending
to demand in
institution
year.
,
In
:
2-8780
Cement Stocks: I;
Riverside Cement
Spokane Portland Cement
Oregon Portland Cement
Coplay Cement Mfg.
Giant Portland Cement
LERNER & CO.
Investment Securities
10 Post Office
Square, Boston 9, Mass.
Telephone HUbbard
Walt
2-1990
Teletype BS 69
Disney Productions
"The Cinderella Stock of 1950"
Analysis
on
Request
Missouri Pacific
General
1975
4s
Convertible SVz* 1949
Common A and Pfd.—When
Issued
BATKIN & CO.
30 Broad
Street, New York 4
Tel. WH 3-3388
Tele. NY
1-196$
writing that it
'
Teletype-NY 1-971
Firm Trading
Markets
"
1946, however, Congress did
create a system of mortgage insur-
Jack & Heintx
W. L. Maxson
FOREIGN SECURITIES
National Company
All Issues
South Shore Oil
6*
r ARL MARKS & p.p. INC.
FOREIGN SECURITIES
ES
county
a
Exchange PI., N. Y. 5
HA.
Teletype N. Y. 1-1397
year
tenants to be¬
farms.
Ad¬
ESTABLISHED 1919
40
could not dream of
part
as
M. S. WlEN & Co.
ingly liberal terms into competi¬
tion with not only private lenders
but the FCA, who could not
the "FHA"
had
a
beautiful
Executive
Chrder printed up about 1934 setling up RA with Rexford Guy
as
for making it possible for
tenants to become "owners."
as
an
worked
Scophony-Baird Ltd.
authorize
of the put into operation, another scheme.
In the past the law
required that
program' whipped When a local bank or insurance when a farmer
had paid down to
that year.
There were covert or lender makes a
40-year loan under the point where he had an
equity
open moves due in the FS
body the "FHA" insurance system, the of 35% in his farm
insured by the
corporate or its successor, but they (government enters into a
firm con¬ government, he would
be com¬
did not quite succeed. The most tract with
the "lender" to take pelled to
go across the street in the
serious of these was to consolidate back the
mortgage at any time Department of Agriculture
to the
"FHA" with the Farm Credit Ad¬ after
seven ^years. At
the same bitterly competitive Farm
Credit
ministration, where one has to time the yield to the lender was
Administration's land banks and
have a 35%
equity, currently, to boosted from 2^% to 3%.
take out a land bank
loan and get
borrow on a long-term
mortgage 1; Thus,
out from under the
"FHA" insur¬
mortgagees in theory made
loan. These moves
failed, however, a
ance system.
40-year loan but in fact a 7-year
for the Farmers'.
Union, widely loan at
3%, with the chance to
Now, it is proposed to do
understood to be the "poor farm¬
away
continue to hold it if
seven, years with this figure of 35%.
ers"
No other
organization,- fought tena¬ from
date, yields were so low it figure is proposed. The law
ciously for FS and "FHA."
would
was still a
still require
good thing.,
mandatory refinanc¬
About that time FS had another
It was not
generally understood, ing in theory, but the "FHA"
face-lifting and another change in
would be free to
but at the same time
impose this only
name,
and became
the Farmers
Congress if
ministration. The late Mr. Roose¬
HI.
the
great deal of sniping
In 1938 Mr. Roosevelt
pro¬
velt
..
the
be
^v^.cendant of the Resettlement Ad¬
(Ft*
to
as it
going in every agricultural county
called, albeit of consequence in the U. S. These
without courtesy of the Federal "FHA" agents spent a lot of time
Housing Administration.
showing sympathy for every farm¬
The' "FHA" is the lineal de- er who wanted one of these nice
iust
!s
gov¬
the Farm Bureau and the Grange,
and the change in name did not
come
The soulful little body corporate
fit question is the Farmers Home
|f!
tl>
:
an
average of 17 years.
ago,
FHA is
big farm organizations of rela¬
but the direct loan ratio is
100%. not just a tenant loan program—
tively successful farmers, such as
farm
of money, so
Upijpfr-,
■
lacked
of
planning.
did
Incidentally,c and inevitably, it is
"Spend-Lend"
miother story. The second story is
•tow blithely the Congress is in¬
clined to engineer the distribution
who
vision
Common
;
Cinema Television B
It is
didates
views.)
Govt. Employees Insurance
Jones, I'm not going to speak to you again about
sending your phone number out on the Trans-Lux!"
unexpected expression, never¬
theless, of the Committee's opin¬
some¬
own
"Miss
mi
extinguished,
liquidation
Trad Television
Video Corp. of America
agents advised, including raising a
pig the way the government ad¬
ance of 40-year loans at
3^% in¬
vised, or wearing shoes.
Farm Security, incidentally, was terest, with banks and insurance
ion that capital gains relief is a
companies offered the chance to
in the mid-30's given considerable
worthy object of legislation.
put up the money the government
♦
*
*
backing by the Administration of
would insure.
Congress, however,
the time for its appeal to the "poor
This is the "near success" story
still uppity about the
agency, sim¬
farmers" as distinguished from the
<©C a presently obscure little bu¬
ply did not provide the money to
"rich farmers." The "rich farmers"
reaucracy.
It has.hung on to a
start the new insurance
of cotton, corn, wheat, and
program.
pigs
fdace in the Budget sun by the
Finally "FHA" got $1 million to
were thought to be too unmindful
very skin of its teeth. It has been
get going.
of the hand that was feeding
But
the
setup
did
them,
^disappointed time after time by
and giving distressing majorities not appeal to the private lend¬
^Congress. At least twice it has al¬
The 40-year contract term
in mid-west constituencies to can¬ ers.
most
been,
"strictly free lance."
as
[.*
1
much hope
for enactment of a
capital. gains relief
proposition. farmers got so long as they would
*Ohis was characterized at the Cap- agree to do as FS management
tflol
of
Standard Gas & Electric
cur¬
inherited
time
will
inexpensive
"Chronicle's"
RA the job of making "rehabilita¬
tion" loans to farmers, loans which
None of these possibilities leaves
the
the
business
and may or
may not coincide with
were
loans of direct government money,
of which $355 million were dis¬
^ler such circumstances the House
's '
yu
■P^r-y
write
so
as
(This column is intended to
re¬
flect the "behind the scene" inter¬
pretation from the nation's
Capital
the
assistance
of
40-year
mortgage loans to 100% of value
at an interest rate originally of
3%, but later boosted in stages to
tnll,
Federal
to
bill now
greased to pass, will come
home to
roost on the
Treasury,
with
simple excise tax
reducer cutting from $750 million
to $1 billion, and the House will
tie told to take it
1;
rHfr
When
comes
ants.
It
did
this
by
enabling
farmers to "buy" their own farms
tax reduc-
now reported to be that
"fibe Senate will chuck the. House
t*
its
owning citizens out of farm ten¬
tiSon law is
continue
interest rates
the
in volume.
grow
Democratic-voting, land¬
y
on
amendments,
Security primarily
with the job of making upstand¬
ing, free-thinking, and just pos-
cf the
'/"• ••; v
•
that
these
mortgages, before or on the re¬
purchase agreement date. In
any
case, "FHA" is sure that with
/
.
Farm
vested
speculated
:
will
out
bear
to makp
"FHA" insured loans
by compari
son good
things to hang onto sev¬
eral years hence.
On the
other
hand, at the first sign of a
whole*
sale liquidation of farm
real estate
values, the heat will be on
the
government to
take over
"Beany" Baldwin, later the booster
Henry Wallace for President on
"Progressive" ticket, became
pass
withdrawn tempo
there was not a
work
may
policy
law.
became the
Farm Security Ad¬
Hore and more the House com- ministration, and eventually Mr.
♦nittee is "out of control." At the Tugwell passed on to the private
system
and
C.
B.
tf&me time the expectation is in¬ enterprise
»
oui
tentatively
reported
present when the
vote
was taken.
down
come
creasing that the House will
because
report
cutting the long-term to have a face-lifting in 1935.
In government you have a re¬
capital gains tax rate to 16% and
the qualifying period for this tax organization and change the name
from six to three months, will be¬ when you have a face-lifting. RA
V
im
passed
quorum
Utopian cooperative communi¬
and thereby got in such hot
water with Congress that it had
action
tee
be
probably hi
The pronoS
consent.
already has been
.?!^^^ was
commi.ttee,:
arid Then
little serious expectation that the
House Ways and Means Commit¬
195Q
•
JljL 11/fJu
from th* Nation's Capital
Thursday, May 25,
.
be allowed to
carry
out insurance/
BUSINESS BUZZ
•
..
SPECIALISTS
50 Broad Street
:
/
New York 4, N. Y.
Development
Hill, Thompson & Co., Inc.
Trading Department
70 WALL STREET, N.
-T..1
UMJI+ohall
4-4540
Y. 5
@FedFRASER