Full text of Commercial and Financial Chronicle : May 26, 1955, Vol. 181, No. 5432

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UN!V-r
OF

ESTABLISHED 1S39

«

/Aiy

Mt-n.'-AN

1955

JUN 1

Commercial-^
Reg. U. a Pat. Office

New York

Number 5432

Volume 181

Price

7, N. Y., Thursday, May 26,* 1955

40

Cents

a

Copy

EDITORIAL

S

We See ItVi

As
In

one

degree

Guaranteed Annual Wage—

another the operations of the
only its forms of organ¬

or

General

ization and

efficiency but its spheres of action,
brought to the attention of the general
public during the past few weeks by various re¬
ports of the so-called Hoover Commission and its
"task forces.,, A large set of these documents have
been released to the public of late, and more are
to come, so we are told. Mr. Hoover himself has

Automotive

By ROY L. REIERSON*

FRANK RISING*

By

Federal government, not

Banking Conditions and
Interest Rate Prospects

Parts

In the adjoining column,

Rising points out not only the manufacturer, but
individual has a stake in its solution. Says it is the
consumer, the average citizen, who must support the
the

j
•j
i
'•

UAW," and

author Frank Rising dis¬

The

Annual Wage principle. Letters should be addressed to

Editor, Commercial and Financial Chronicle, 25 Park
Place, New York 7, N. Y.„

been

seri¬

afraid that the nature of the problem is not well under-

reason

that

the

that he has

now

been

more

charged not

merely with studying the forms of government
Continued on page 29
SECURITIES

porate

Washington,

by Mr. Rising before
D. C., May 18, 1955.

the

National

Press

NOW IN

securities

REGISTRATION

afforded

are

a

—

complete

Underwriters,

dealers

picture of issues

now

rising, most short-term
firmed
substantially.

rates -' have
Bond

yields have also moved upward
months, although the rise

in

recent

in

long-term yields

gradual and

more

has been more

moderate than was

generally anticipated earlier in the
Throughout, the tightening of
has proceeded in an orderly

year.

credit

fashion

without

and

unsettlement
Roy L. Reierson

-phis

in

disturbance

the

market

and

or

place.

good record reflects, by and

large, the flexibility of current credit policy, the absence
of market uneasiness with respect to future action by

and the Federal Reserve, and the fact that

the Treasury

credit and investment

address

by

Dr.

funds have been readily available

Reierson

Association, Atlantic City,

on

before the

page

Pennsylvania

18

Bankers

N. J., May 25, 1955.

in cor¬

investors

registered with the SEC

and potential undertakings in our "Securities in Registration" Section, starting on page

DEALERS

credit

bank

Continued

36

With

observers.

Club,

page

bond

recent

business advancing and demands for

»An

on

financial

of I most

_

Continued

of

developments has
been the close conformity of money
rate movements to the anticipations

Rising

address

*An

features

and money market

way:

This is true

time his work should attract wider and

for the

in its truculent

Indeed, one of the more

remarkable

~"Tbis is what we demand and this is

Wk
Nfc JHHMH

Frank

essayed this role, but this
case.

than say,

the way we think it can be paid for."
The union has stated that it rejects
proposals made by management and
is taking a strike vote. All America—not only the manu¬
facturer but everyone—has a stake in this.
And I am

findings of his Commission.
This, of course, is the second time

interest rates have been in a

since around mid-1954.

made, that the union has done

more

two

attention than in the former

Wage by the

an

now,

year

weeks since negotiations began—and
there is no feeling that progress has

n

public platforms to make pleas for
the proposals contained or to be contained in the

ous

f.

a

way

be

former President has

Annual

year,

tightening in

with a pro'blem of such magnitude, and of
complexity and intricate nature, as to render an '•
early
solution
very
improbable.
Even • though
last-minute
com¬
promise may avoid a great strike—
and compromise always is possible
—we will not have solved the prob¬
lem.
We will confront the question
again and again.
This is only the
first test of a great question, only
the beginning.
Time passes—it is now some seven

such

happy to accommodate in its columns
comments whether pro or con, on the Guaranteed

on

Guaranteed

of the

all America,

high level of employment and economic activity
throughout the nation. For this reason, the "Chroni-

been

the

for

the banking system
and proceed in their credit
orderly manner.

will furnish large reserves to

in the latter part

generally rising trend.! This behavior is an expected con¬
comitant of the expansion of economic activity under

ested in the objective of maintaining a continuous

/

drive

a more

UAW-CIO presents not only the automobile industry, but

warrant the utmost consideration by everyone inter-

imssmmm mmmm

.

when not working.

men

further credit restraint and

some

policy than has been the rule
months. Points out, however, the credit author¬

For almost

such plan, if adopted, would have
automobile industry but on the
nation's entire economy. The issue, in the opinion of
the "Chronicle," is of such vital importance as to

any

ities

its proposed demands will break the

Scores payment to

progress.

the Guaranteed Annual Wage demand

will

in recent

American tradition of confidence, risk-taking and steady

adverse effect any
not only on
the

cle"

says

Forecasts

rates.

?

restrictive Federal Reserve

plan. Scores the "implacable and intransigent position of

of the
United Auto Workers of America and discusses the
;

policy" and its relation to the expansion
of economic activity under way since mid-1954. Sees
current business strength as a basis for rising interest

every

tm

'

discusses various aspects of the current

"flexible credit

Mr.

WHAT DO YOU THINK?
cusses

Dr. Reierson

Picturing the drive for a guaranteed annual wage in the
auto industry as of such magnitude, affecting all indus¬
try, as to render an early solution very improbable,

Company, New York

Trust

Bankers

Association

Manufacturers

have been

wmmm%, w mm 11m.m mmmwmmm

;

Vice-President and Economist,

Manager,

38.

State, Municipal

in

U. S. Government,
State and

~

Municipal

—m

of INDIA, LIMITED
Bankers

Securities

and

NATIONAL BANK
to

the

Government

in

Kenya Colony and Uganda
Office: 26 Bishopsgate,
London, E. C. 2.

HAnover 2-3700

CHEMICAL
CORN

EXCHANGE

West

End

(London)

BOND

DEPARTMENT

30 BROAD ST.,

\

N.Y.

REVIEW"

13, St. James's Square, S. W. 1.
India, Pakistan, Ceylon,
Burma, Aden, Kenya, Tanganyika,

ARE NOW AVAILABLE

Uganda, Zanzibar, and Somaliland

Reserve

ON

Protectorate.

Capital
Capital

Paid-Up

£4,562,500
£2,851,562
£3,104,687

Fund

banking and exchange business.
Trusteeships and Executorships

OF NEW YORK
Bond Dept.

To

T.L. Watson&Co.

Orders

Common Stocks

Executed

On

Scuthwedt

COMPANY

Dallas

BONDS & STOCKS

CANADIAN

Exchange

DIRECT




PERTH AMBOY

*

Analysis

DEPARTMENT

WIRES TO

Pombikhi Securities

MONTREAL AND TORONTO

Goodbody

NEW YORK 4, N. Y.

•

COMMON

All
—

BROADWAY

BRIDGEPORT

Chattanooga
Gas Company

Canadian Exchanges At Regular Rates

MEMBERS

FIRST

BANK

coast to coast

CANADIAN

Industrial Bonds,
50

34 offices from

Chase Manhattan

NEW YORK 5

Brokers

Teletype NY 1-2270

Preferred and

14 WALL STREET,

Maintained

SECURITIES
Commission

American Stock

Markets

Dealers, Banks and

CANADIAN

1832

Members

gotdfmeat

Members New York Stock Exchange

Teletype: NY 1-708

Active

Net

■TF\

New York Stock Exchange

THE

HARRIS, UPHAM & C°

undertaken

ESTABLISHED

DEPARTMENT

BOND

REQUEST

THE FIRST NATIONAL CITY BANK

The Bank conducts every description of

also

first

Bonds and Notes

"ATOMIC ENERGY

Branch:

Branches In

Authorized

BANK

STUDY

RESEARCH

Head
TELEPHONE:

Public Housing Agency

COPIES OF OUR NEW

NEW

115 BROADWAY

YORK

&

STOCK

1 NORTH

LA

Co.

EXCHANGE

New York U, N.Y«

CHICAGO

Members New York Stock Exchange

111

other

WHitehaU 4-8161

Boston

Principal Exchanges

Broadway, N. Y. 6

WOrth 4-6000

Teletype NY 1-702-3

request

IRA HAUPT & CO.
and

40 Exchange Place,

SALLE ST.

"

NEW YORK

Grporaxioh

upon

Teletype NY 1-2708

Telephone:

Enterprise

1820

2

(2410)

.

>
■:

'

seamiDLfc

W

-The Commercial and Financial Chronicle

panions

nw#

The

Express Co.

Security I Like Best

ical,

participate and give their

reasons

for favoring

(The articles contained in this forum

particular security.

a

they

are

be regarded,

to

offer

as an

intended

not

are

be,

to

nor

but which has

spect

in

investment

hardly imagine

can

circles.

CHARLES

Iowa Public Service

It is

ingrained liabit of

an

fessional

this

Strategic Materials

investment

idea,

decided

we

Gulf

at

Tennessee Gas Transmission

T.20

to

Private

Teletype NY 1-40

Wires

to

you

to

pened

We

that

Since 1917

by

Members
York

Stock

INROAD WAY,
TEL.

i

Exchange

Stock

Exchange

NEW

REctor

YORK.5

general

for

each

nine

of

one

held

paid

Another

new

share

is

being paid
currently, hut is disregarded here

Alabama-Tennessee Natural

it

as

Company

not effective at the year-

was

Dan River Mills

he

Scott, Horner &
Mason, Inc.

would have

ment

a cost of 40% per
At the recent price of 87%,
have had a gain of 47

during the period.

future?
"

pilot plant operations,
elsewhere, without gain¬
ing tremendous assets in "knownoted

experience,

broad¬

as well as

It is believed that the Gulf will
to

and that the
shareholder will be well

patient

CAROLINA

grow,

in

rewarded

the

future

he has been in the past.

is still "small"

pany

lion

of

years

The

at

F. W.

CRAIGIE&CO.
RICHMOND, VIRGINIA
Teletype: RH 83 & 84

Telephone 3-9137

there

is

in

as

com¬

assets, although it is

company

the

South, indeed,
larger in that vast

industry.

management

has

Also,

the
itself

proven

capable of coping with

variety
of operating problems during re¬
a

cent years.

if

is

it is

H. Hentz & Co.
Members
Wtw

York

American
York

Wew

Stock

Commodity

f

Chicago

per

Board

Y. Cotton
NEW

of

Inc.
Trade

Exchange

exchanges

Chicago
Miami

HaRyvood,

Exchange Bids.

YORK
•

Detroit

Beach

Fla.

Geneva,

•

•

Pittsburgh

Coral

Gables

Beverly Hills, CaL
Switzerland

Amsterdam,

Holland




needed to pay the $2.00
In addi¬

were

share cash dividend.

merchandise

soon

casualty policies

$9.32, excluding gain

or

loss

on

Market
amounted

share
2.7
of

in

to

appreciation
more

1954, and

times

an

$27

per

figure

is

the entire capital stock

the company.

was

than

this

alone

While last

exceptional

one,

ft

year

is

of

interest to note that Gulf has had
an

annual

gain in market values

for

it

is

likely

will

permit,

basically similar.
Koppers
today

over

If

is

one

about

Campbell, Henderson & Co., In¬
Counsel, Dallas, Tex.
(Page 2)

vestment

Koppers

business

in

is

there

like

he

would

he

Stock

or

were

Alabama &

!

Monsanto.

Furthermore, he buys
at a price (at recent levels of near
46 on New York Stock
Exchange)
which actually represents a dis¬

count!

10%

of

from

value/;

current

Louisiana Securities

book

///;.;.■

Koppers

is

Co.

Bought—Sold—Quoted

Mellcn

domi¬

nated
be

and may be considered to
member of that fabulous fam¬

a

ily

other

of

Mellon

companies, such
The

controlled

-

Gulf Oil, A!-:
National Bank.

as:

Mellon

the

same

currents

cross

pletely by-pass Koppers,

Steiner,Rouse&Co.
Maimers

panies.

The high level of produc¬
create

of

limiting
term,

com¬

favorable prices will con¬

at

tremendous

a

insurable

factor,

values.

over

the

po¬

The

HAnover 2-0700

industry to

absorb

Mobile, Ala.
Direct

expansion
the

comnanies

of

like

may

A

combined
acumen,

to

may

Mellon

of Japanese potentiaL

Call

line

can

vorable

related

ates

for the ultimate

re¬

ward should be large enough to
justify his patience and faith in

the company. The stock is traded
in the Over-the-Counter Market.

Louisville, Kentucky

y.J

easy,
your

'

in

security

finger

the
stock will

why one
seize the public's fancy
other will not,

are

ings

all

of

on

and

an¬

say

tars

pitches, creosote oil, crude and

refined

coal-tar

and

chemicals,

and

insect preventatives.

(2)

Chemical

Division

chemicals

duces

from

—

Pro¬

coal

tar,
petro chemicals, plastics and plas¬
tic

SAVING^

materials,adhesives, resins and,'

synthetic

organic

chemicals

in industries and

use

ticals.

for

pharmaceu¬

Began producing polyethy¬
raw

material from which

made, in 1954.

LAMBORN & CO., Inc.
WALL

(3) Wood Preserving Division—
for

processes forest

prod¬

.

STREET

NEW YORK

5, N. Y.

protection

and

mechanical damage; operates
fabricating and wood-working fa¬
cilities.
Serves railroads, utility,
mining and construction indus¬
tries, and farms.

(4)

Gas

and

Coke

SUGAR
Raw

—

Refined

-—

Liquid

Exporte—Imports—Fut ures

Division—

Produces coke, gas, tar, ammonium

sulphate, and light oils. Customers
include public utilities, which buy

"faddy."

both

from

for

group to group
and
stock
to

public

Koppers
stock, for some

has

which

plastics,

coke

Long Island,
through retail

and

serviced

(5)

Paul

plants

Dysart

and

the

Construc¬

constructing

plete

by-products
for

the

business of

coke

as

chemicals

But

perhaps

and

this

fact is fortunate for the in¬

vestor

contemplating Koppers
common; for here is a stock which

manufacture

and

has basic similarities to such

com¬

handling equipment; chemical
plants, and other types of indus¬
trial structures; blast furnaces and
open

hearth

furnaces

for

steel

mills; ointering machines and
Continued

N. Q. B.
OVER-THE-COUNTER
14-Year

Performance

page

16

of

35 Industrial Stocks
POLDER ON REQUEST

National Quotation Bureau
incorporated

46 Front Street
on

/

INDUSTRIAL STOCK INDEX

com¬

plants;

purification of gas; coal and coke

ac¬

have.

and

in

designing

its

such

Engineering

tion—Engaged

the

of

principal

Island,
are

and

and the general
northern New Jersey,

rea¬

faddy lime¬
light, although

tivities,

in

gas

DIgby 4-2727

gas,

distribution yards.

never

in

several

manufactured

making

Staten

stock.

very

industrial

sorts,

erences

f

"V%

road-building materials,
roofing and water resistant coat¬

stock

pass

son,

anc

against decay,
marine borers, termites, fire, acid

reason

to

Bankers

Broadway, NX 6 COrtlaodt 7-5680

(1) Tar Products Division—Pro¬

ucts

except

Investment

A

duces

Chemically

Koppers Company

exact

producing

111

99

Trend way Stock Market Service

never

It oper¬

1897

Office Tokyo—70 Branches

Brokers

operating divisions, a short de¬
scription of each of which follows:

are

Investment Advisor

is

Established
Home

long

a

flexible squeeze bottles and tubes

PAUL DYSART

It

Securities Co., Ltd.

service facilities through its seven

lene, the

analysis, to put

products.

other

many

writ©

the

Company, an in¬
ignore periodic unfa¬

news

creosote, pitch and

of

or

Yamaichi

Business

such as

have unusual appeal

investors with vision—

investors with knowledge

with

Koppers is world's largest pro¬
ducer of coal tar products and
chemicals and plastic derivatives,

Insurance

vestor

offices

SECURITIES

be¬

Executive Officer.

policy,

usual

moth

for

growth

rate

branch

our

JAPANESE

confidently be looked for.

and

satisfactory

to

Brehon

and Chief Executive Officer. W. F

provide

a

wires

in¬

seems

the Army

heavy increase in business.
Assuming
that
there
will
be
enough
insurance
premiums to
a

NY 1-1557

Kew Orleans, La. - Birmingham, Ala,

death, recently,
Somervell, head
Service Forces dur¬
ing World War II, was Chairma
General

of

longer

wjell be the ability of

may

insurance

such

worry

new pre¬

income for insurance

tinue to

the

to

txchsng*
Exchange

8 roc it

credible. Up to his

optimistic

reason

Stoat

American

19 Keeter St.. New Ye* «. N. T.

aggressive and less cautious

availability of

York

new

Members

of

more

for

Dysart,
Advisor, Trendway
Service, Louis¬

Market

ville, Ky. (Page 2)

to

buy Dow, American Cyanamid

much of the

general
United
States,

the

little

about the

mium

outlook

Company—Paul

Investment

long-suslained appreciation

no

curve

Chief

reasonably

the

—

President,

The

come

line

Company

pays

of

full

a

Insurance

Charles V. Campbell,

and

other "Mellon" companies snectacular financial successes will com¬

than

Gulf

of growth prospects.

been

securities and market fluctuations.

of

business

management that have made these

territory. This development, re¬
sulting in a broader coverage of¬
fered, would unfold new avenues

brought total

share earnings

are

buyer

whose

tive Vice-President, has since

unknown

per

nature

when buying into

as

stocks

Munnikhuvsen, long time Execu¬

will

resources

income, an
underwriting gain of $3.33 and a
$1.42 gain in premium reserves

4, N. Y.
•

earn¬

tion to the investment

to

H.

of such

ings

Exchange,

other

than one-half

Exchange

Orleans Cotton
and

rose

Exchange

Cotton

i

ily,

other

That

Fads for stocks

Less

tariff exacted

case

better

and

common

opportunity
to buy into a true blue-chip with¬
out paying the usual fad premium
an

new

those

are among

Koppers

and

pre

income, growing stead¬
to $4.57 per share in 1954.

Exchange

Stock

as

in

casualty department, be¬
ing expanded as fast as personnel

that

The

investment

offers the investor

only

in

that
entered in

enjoying

quality of the investment
portfolio
has
been
maintained.

1858

written

obvious

be

can

Investment

Established

hard

as

new

casualty

territory lying West of Pennsyl¬
vania, South of Chicago and East
of California. Management is ag¬
gressive and highly regarded
within

has

tensive! v cultivated each year.

now

the

none

The

concerned.

$38 mil¬

the largest stock fire and

MUNICIPAL BONDS

getting

as

that the territory will be more in¬

A

product areas and sales ex¬
pansion. In short, I feel that an

has been

management

growth,

average

Gulf

v

continue

NORTH and SOUTH

invest¬

improvement can be ex¬
pected to continue. What of the

-

VIRGINIA—WEST VIRGINIA

his

on

the

not

LD 33

Specialists in

116.7%

or

The real question is whether or

Lynchburg, Va.
Tele. LY 62

years

would

points,

con¬

company

Their Selections

great com¬

a

Week's

numerous

coa,

are

tential

ago

is

the

a

far

as

being served

now

tion

share.

for

never

the need arises. Many of the states

acquired three and one-half

Company

and

business

Allowing for these capital
changes, a present owner of shares

end.

Commonwealth Natural Gas

Bell System

has

and

dividends.

dividend

stock

Company

attractive

at

three times

stock

two

Trading Markets

'

run

shareholders

its

Since 1932

Gulf Insurance Com¬

Since that time,

prices

Gas

1951,

Company, selling at 49 in Septem¬
ber, 1951, has since sold shares to

2-7815

American Furniture

September,

of market
the DowJones Industrial Average has risen
from 274 to 416 in May, 1955, a
gain of 142 points, or 51.8% dur¬
ing the period.
Gulf Insurance
the

ing

ITew

in

than he would by purchas¬

stocks.

tc Honnell & Co

It is diffi¬

keep working

states,
territory

which

investor would fare better

an

buying

pany

A merican

V. Campbell

Charles

the
during the past three

stated

of

to

As

and one-half years.

Ights & Scrip

not

14

hap¬

to

is

business

been

of

investment

stiff

and

possible.

represents a

Specialists in

size

worsen

Easy Street"

new

so,"

what has

small

how competitive

see
can

policy

rather

review

of

$38 million in 1954.

"on

"I

prove,

told

Principal Cities

competitive for years,
never been easy
young,
small company.

going has

spite

which

not

but

I

industry' has

very

this

cult

calcu¬
is

It

competition.

the

But

ditions

purpose

lations

5

been

to

Best."

the

of

Exchange

New York

Broadway,

WOrth 4-2300

'

The

Member

about

competition, the Gulf has grown
in assets from $5% million in 1941

Security

Like

word

fierce!

In

choice of

I

1920

is

for

our

"The

Corporation

of

to

and the

September,
1951

Stock

a

Com-

p a n y,

New York Hanseatic

take

to

A

to

In¬

surance

Associate

pro¬

advisers

look

second

the investment com¬
buy issues which fill
particular requirements.
ingness

mittee

evaluate their advice, ltr line with

Standard Uranium

American

from the Southwest and the will¬

Gulf Insurance Co.

Rockwell Manufacturing

Established

is made

Investment Counsel, Dallas, Tex.

Sulphur

The performance
possible by the inclusion
carefully selected issues

of many

Company

Long-Bell Lumber of Mo.

>

for many years.

President, Campbell, Henderson &

Lithium Corp.

Pan American

CAMPBELL

V.

This

Forum Participants and

One

ened

Home Insurance

Thursday, May 26, 1955

like Koppers conducting the

pany

how"

sell the securities discussed.)

to

duPont,

obtained their degree of re¬

as

Central Maine Power
Central Public Utilities

.

-

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

in the investment and

Central Indiana Gas

.

Monsanto, Dow Chem¬

as

and

never

A continuous forum in which, each

Brown & Sharpe

,

IJj

Dealers

For Banks, Brokers,

American

/If:
' •

.4-" ■'

New York 4, N.

Y.

Volume

Number 5432

181

.

.

.

(2411)

The Commercial and Financial Chronicle

INDEX

National Strength

Through World Trade

—Frank

Executive Vice-President,

.

1

*

„

Picturing the Russian threat

;

meaning the nation can no

as

National

longer afford to live by itself, prominent New York bank execu¬
tive cites reasons why our world trade should be expanded.

Holds U. S. is
pursuing an enlightened trade policy, and, although we have
not achieved our ultimate objectives that there should be no
discrimination against goods of any one country, present policy should be continued with greater efforts. Urges U. S. join

World trade is
us

for

essential

raising

our

Still more, it
the continued

living.

of

strength

important to each

means

a

as

standard
is

to

and

—A.

of

because

i

with

.

The

•

and carry

Texas

with

which
would

which

basic

a

brings greater

the

^strength

and

political
bility to

s

world

t a-

David

Rockefeller

in this

t h e
In the

arguments that

the

doubt if it is necessary

to re¬

the

great

this

to

audience

••changes that have

occurred in the

Canada

benefit

can

this

all

United

delivered

be

now

to

our

which

purpose

free nations

are

*

to

14

Magnolia Park Raceway
15

Cartwright

W.

*

Babson

17

Patterson

Association

We

Bank

See

:

Business

It

C

J. F. REILLY & CO.

Direct

(Editorial)

Cover

_____

Stocks

Man's Bookshelf

John' McCloy, has so
^graphically put it, the.atom and

;associate,

airplane have even changed
the shape of the world as we used
to think of it.
We can no longer
;afford to use the old maps with
•the

in

And

.

any

The

runs

truth

hard

i

Cutter Lab.

8

Dealer-Broker Investment Recommendations

8

•'

Washington Ahead of the News—Carlisle Bargeron

Indications of Current Business Activity

34

._

We

8

____

News About Banks and Bankers

Observations—A.

I

__

through

the

by Mr. Rockefeller at the
Ball of the Dallas
World Affairs, Dallas, Texas,

Council

May

19,

on

Continued

on

Reporter's

Railroad

the,

on

5

Governments

specialized in

page

Spencer Trask & Co.

State

of

Washington

Trade

and

Albany

•

Boston

Nashville




•

•

Chicago

Schenectady

•
•

Glens Falls
Worcester

Firmly Believe

Mid-Continent

4

You

48

Uranium
♦Column not available this week.

32

Will Become One of the
1

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

Weekly

and

t

D.

WILLIAM

Reentered

COMPANY, Publisher®

SEIBERT,

President

Thursday, May 26, 1955

Thursday (general news and advertising Issue) and every Monday (complete statistical issue
market quotation
records, corporation news, bank clearings,
and rifv nr-ws
a"d Clty ncWS' etc )
etC'j'
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Current

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per

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year.

Canada, $58.00 per
Other Countries, $62.00 per year.

Report Available

Other Publications
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...
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exchange,

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GENERAL INVESTING CORP.

.

remittances

for for-

elgn subscriptions and advertisements must
(Telephone STate 2-u613j»- oe maue in Mew York funds.

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£ry. 2£r *942, at Ahe Ap°st, ?fficeu at New

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]

•

Eng¬

Vort' N' Y" Under the Act <* M"c» «•1879'

New York 7, N. Y.

^_v„

C.

Uranium Producers

Reg. U. S. Patent Office

DANA

E.

Copyright 1955 by William B. Dana
Company

'

HERBERT

TELETYPE N. Y. 1-5

•

to

2

Every

TELEPHONE HAnover 2-4300

more

21

16

and Industry™—

„

•

,

Security I Like Best

The

WILLIAM B.

Stock Exchange

in

securities

WHY

42

:

and You—By Wallace Streete

.

The

PREFERRED STOCKS

ST., NEW YORK 4, N. Y.

Direct Wires

We
.

.

FINANCIAL CHRONICLE

Members New York

trading markets

over-the-counter

38

Securities Salesman's CornerThe Market

REctor

BROAD

f

20

:

Security Offerings

Prospective

25 Park Place,

25

■

26

_

Securities

The COMMERCIAL

have

250

*

Report

Published Twice

For many years we

.

40 Exchange PL, N. Y.
Teletype NY 1-1825 & NY 1-1826

33

Securities Now in Registration-—.

persuasions of Communism. Trade

1955.

>4

Philadelphia.. Chicago.. Los Angeles

—

Dinner

Reporter

Our

postwar years. Consider only one
example, although an important,
;a Mercator projection that spread
one
the story of recovery in
continents flat on a plane and
Western
Europe since
1947.' In
give the illusion of great distances 1947 Western Europe was flat on
at the poles. The fact is that the
its back, still prostrate from the
world is as round at the poles as
crippling effects of the most dev¬
at the equator, and the shortest
astating war in history. Produc- .
distance
to our heartland from
tion per person was then
only
bomber bases in Russia is by way
three-fourths of the prewar level;,
of the ice masses to the north. The
living standards were so low tnat
Russians already have high-speed
large masses of the people were
turning in despair to the strong
♦An address
International

■ s-

facts

of

history

..

HA 2-0270

Our

Public Utility Securities

these

>

Singer, Bean
& MACKIE, Inc.;

6

Wilfred May_.

\t

.

maintain

than

45

NSTA Notes

Straus-Duparquet

.

Standard Uranium

6

Funds

Mutual

••

Standard Factors

Einzig: "British Doubts on Forthcoming 'Big Four' Meeting" 21
From

calculation

of

City

Gulf Coast Leaseholds

of crucial importance. *
-

Philadelphia «ft

Lake

48

Nathan

of
trade, the position and policies
adopted by the United States are
sors.

to

Corpus Christi Refining Co.

28

broken front to would-be aggres¬

after

Teletype: NY 1-4643

wires

; V

essential if the

effects, are capable
«of devastating vast areas.
As my
sonous

Broadway, New York 4

DIgby 4-4970

35

_____

'

.

#

"t

Salt

-V

Insurance

and

Formed

request-

on

20

___

Explodes Purchasing Power Theories

Dealers

Prospectus

16

with

do

with their poi¬

which,

mainland

Progress Mfg. Co.

Guaranteed Annual Wage

Auto Workers and the

24

As

us

to present an un¬

are

13

________

£:-

—

City-busters

Koenig

26

Uranium

Perhaps the change is re¬ world trade? A very great deal.
most vividly by pointing For it is only through trade —
•to the fact that only two decades through
an
exchange of goods
makes
;ago we could relax in the knowl¬ which
possible in
each
edge that despite wars in other country the most efficient use of
that the
parts
of the world, our own labor and resources
homeland was virtually impervi¬ economies of the free world can
ous to
foreign attack. Today the grow strong. Thus, they will gain
•atom
and
the
airplane
have that sense of unity and common

that.

Corporations Operating Abroad

Opposition to Pay-TV—Frank Stanton

vealed

all

Higgins, Inc.

,

42

Economic Bases of World Trade
has

1

12

_

Coming Events in the Investment Field

What

Maule Industries
/

:

'

NAM Study

;years.

'Changed

Formation

800.

nearly

greatly if they are friendly or
neutral, but would be a se¬
rious threat in Communist hands.

of the United States in
its relationship to other nations in
the short
space
of the past 20

Holly Corp.

10

_

•

.

Industrial Development of Atomic Energy—James F. Fairman

even

'position

9

Home Financing—Albert M. Cole_________™

In

when we'
Communist

need the friendly support '

and

P.

'

Gold Money for Americans—Robert T.

people, or a third of the
population, it is evident

ica

free nation.

*

U

Arsmstrong

of

Dept.

NEW YORK

Telephone: WHitehall 4-65S1

,

___^

Agricultural Research—Roger W.

about trade as well as the resources of other
practices and policies, I do not nations if we are to continue to
believe that these considerations stand them off. The 330 millions
;are given sufficient weight.
So, I of Free Europe, the more than 700
arc
of Free.•should like to speak to you chiefly millions along the
;about the relation of world trade Asia, and the 180 ..millions who
to
the
strength of tne
United are our neighbors in Latin Amer¬
a

_

us

Very Prosperous Level of Home Building and

—Philip

hears pro and con

^States as

.

•1

And they are
this nation

that

we

•

A

Mid-

embraces

now

million

Sinclair

*—Robert

contrary,

that

■

WALL STREET,

facts

world's

o u r

n

On

Upgren

Tax Problems

why

reason

self.

i

—J.

longer afford to live by it-'

no

can

consider

free world.

—Arthur B.

en--

the

are

live

we

\

^

grim words and grim

are

Prosperity—George W. Coleman

Responsibilities of Investment Advisors

great State

greatly

be

Fear

Economic Expansion Through Saving and Capital

The

•economic

.allies

the

on

Obsolete Securities
5

,

could

attack

an

Twentieth Century.

it

because

of

with

to

to

cash away!

4

Outlook for Plastics

Zelomek

W.

•'

..

thoughts. Yet they

raw
and

^materials

can

Situation and the

Carry obsoletes

3

Anatomy of Bond Prices—Elizabeth Ellsworth Cook

How

before long to be a
practical reality, the

likely

These

d i s-

n

-pensable

I

Trade—David Rockefeller

*

hanced.

increasingly

call

Strength Through World

.

reported capable of

are

be made- even

provides us

•one

__Cover

Changing Deposit Trends, Branch Banking and Mergers

:

dropping hydrogen bombs in any
part of the United States.
With
the Intercontinental Ballistic Mis¬

ease

a

nation,

ree

tboth

it

as

through,

matter

United

the

States
f

CASH & CARRY!

Prospects

99

which, if they can break

bombers

sile

independence
•of

Cover

_____

Interest Rate

and

-

accomplishments of the Marshall Plan.

Organization for Trade Cooperation.

<of

and Brass Tacks

Rising

World Political

•

the

-

Sky

Wheels for Lanes and Lawns—Ira U. Cobleigh

principles of world trade, and lauds

Points out the economic

*

Wage: Blue

—Roy I. Reierson

J

,

Annual

Conditions

Banking

York

The Chase Manhattan Bank in New
M

Page

AND COMPANY

Guaranteed

By DAVID ROCKEFELLER*

i

llCHTtnSTfi

"

Articles and News

I."

:

•

3

80 Wall

St., N. Y. 5
I

*

i

BO 9-1600

4

The Commercial and Financial Chronicle

(2412)

When

Wheels for Lanes and Lawns
**

want

eminent corporations
roll, they call on Motor

For

those

investors

Some current notes

rolling

distinguished 35-year old

a

company

Wheel Corporation.
If

a

wheel
the civili¬

the

of

invention

the

marked

milestone in

then Motor Wheel

zation of man,

Corporation must be credited with
doing a whale
of
a
job of
civilizing a 11
of us; for,
since
this

1920,

mowers

selling
only

are

tionally.

In

sensa¬

164,000
power
mowers
were
sold; last
year
1,350,000, and the prospect
this year is still brighter with a
$150 million sales total indicated.
To

1946,

this

meet

powerful demand
MRW offers not only its own de¬
signed Duo Trim models (afore¬

has turned out

mentioned) but, by outright pur¬
chase for cash last fall, it acquired

mil-

the Lawn Mower Division of Reo

company

of

tens

lions

of

wheels.
ride

You

them,

on

on
many
makes of cars;

you

them

see

rolling
streets,
U.

Ira

and

highway
lanes; and you
gliding across

Cooleign

watch

them power
verdant lawns at

a

(No pun intended.)
is

city

on

clip.

merry

Motor Wheel

vital

a

enterprise, diverse, well
and
definitely
to
be
looked into by stock
buyers, not
averse to a 6l/2% current
yield on
directed

equity

an

of

merit.

Motor Wheel

Corp., as its name
started
out "making

reveals,

Motors,
town

Mich.),

The Reo line is the most

widely

distributed

lawn

has

It

job at

done

such

good

a

it

that, today, it supplies
of the industry's re¬
quirements, and is turning out

about

30%

wheels and drum and hub

assem¬

blies

million

at

a

above

pace

a

month. Clients include
Chrysler
Corp.
(Plymouth,
DeSoto
and
Chrysler), General Motors Corp.
(Buick, Oldsmobile and Pontiac)
and
among
the
independents,
Hudson, Nash, Packard and Wil¬
lys. Until quite recently, motor
a

wheels

riveted.

were

units

duced

since

models

power

the world, over a
having been pro¬

the

(both

war.

Reo's

Duo-Therm

sive

division—102

distributors

dealers.

this

effective

So

lawn

and

From

1955.

the

volume
fuse

and

its

welded

big

step

present

wheels

forward

in

Electro-

represent

style, per¬
and design.
Moreover,
they are perfectly adapted for
the use of tubeless
tires, which
you've

as

delivery

on

models.
fuse

noticed

of

many

Fifteen

standard

are

the

million

1955

Electro-

welded

wheels have already
produced.
Auto
wheels,

been
brake

drums

and

hubs

together

for

50%

some

of

MRW

But MRW must not be
regarded

solely as a specialist in wheels.
depression period (1932-34),
the only years since 1920 in which
The

cash

dividends

pointed

paid)
the need for product

up

diversification; and
that

end

has

broader

base

Defense

a

program

evolved

now

for

earning

work

important,
down

not

were

has

26%

to
far

Cates,
Manager, but to eager and loyal
echelons of junior executives and
some
4,600 employees, many of
whom
pany

have

the

com¬

20 years.

over

tions

with

been

Labor rela¬
and
employee

good

are

benefits include retirement annui¬
ties and group

life and hospitali¬

106mm.

ing

1953

Army recoilless rifle be¬

turned

ft.

sq.

one,

not

was

with

three

in

out

factory,

a

new

76,000
running in

now

shifts.

Then

there's

the

Division which has

Appliance
been

MRW

at

a

Last

particularly good

sales

dipping to

$53.8

Withal, however, 1954 per share
earnings were $2.04 — coverage,
albeit thin, for the $2 dividend.
This year things are looking bet¬
ter.
First quarter gross was up
40% to $20 million and net profits

worked

out

second

quarter
as

Balance

to

$1

share.

a

is

going

The

along

well.
sheet

of

1954.
Capitalization
could
hardly be simpler, consisting oi
merely 854,752
common
shares

N.Y.S.E.

and

now
selling
(3/31/55) stood
Eighty-five hundred

$32.46.

stockholders will be watching the
progress
of
1955
earnings
of

MRW, having in mind the com¬
pany history
of paying out, on
the average, around 60% of net.
Assuming possible 1955 per share
results of $4, a cash dividend pay¬
out of 60%

month in the
Duo-Therm products

would suggest

include

heaters,
water

air

gas

oil

fired

heaters

and

beginning

last
of

line

introduced
and

winter;

space

trailers; and
the

year

lawn

mounted

Duo-

to

smooth

has
its

and

As

a

car

so

out

Motor Wheel Corp.,
year

round

heavily
trade

into

which

sales,

thl
does

selling in the alternate
Sprjng and Summer.
like a logical program
working out well.* '

matter of

fact,

power




lawn

remember

on

T

wheels.

and

wheels,

and

since

only

makers

makers

It
as¬

of

pany

by

F

Since

Motor

serves

with

that

e n-

Wheel

such

and

truck

as GMC, White, Diamond
Studebaker, MRW should

Further than that, the com¬
provides about 40% of the

wheels used for farm

implements
tractors, supplying such dis¬
tinguished producers as Interna¬
and

tional

Harvester,
Deere,
Allisand
Massey
Harris.

Chalmers

Index

Business Failures

J
moderately in the period
ended on Wednesday of last week and was
approximately 12%
higher than a year ago.
Steel producers have
as

they

can

pushed production facilities about as far
for the present and the day of reckoning is near on
Important maintenance shutdowns are inevitable

maintenance.
in

the

near

future, and warning signals are beginning to flash,
Age," national metalworking weekly this week.

Combine

this

this trade

the

normal

summer

and

what steel consumers would like it to
back

will

hot

be, adds

from current near capacity opera¬
disposed of maintenance and vacation

disruptions, the ingot rate will drop

few

a

points from present

There will be little if any

letup in order volume, which is
currently running ahead of capacity. As a result, order backlogs
will continue to mount and broken delivery promises will con¬
tinue to plague both producer and
consumer, this trade authority
further reports.

vestment

gravate the tight demand-supply picture

bankers

and

brokers

with

h

adquarters

e

at 70 Pine

New

St.,

York

City.
A g reements"

part of the

are

Winthrop H. Smith

AEC's

new

policy of

per¬

American

mitting

industry
to
study
and
participate
in
the
peaceful applications of atomic
energy.
Under
the
agreement
signed by Merrill Lynch, a small
staff of selected personnel will be

"access"

permitted
tial

confiden¬

to

in

information

AEC

in¬

the

dustrial atomic energy

field.
In New
York, Merrill Lynch
managing partner Winthrop H.
Smith

the

firm's

firm

his

stated

lighted"

petition

"de¬

was

had

AEC

approved

participate
study group

to

in atomic energy on a

basis.

Smith

Mr.

feels
come

"Our

added:

in

that

sure

the

firm

to

years

industrial,

many

utility,

railroad and other companies will
additional

want

of

amounts

new

capital to invest in atomic appli¬
cations.

this

Under

established

dure

new

proce¬

the AEC,
Merrill Lynch
can
continue to
provide its conventional services
in the atomic energy field as a
principal financial underwriter in
by

the United States."

Mr.

continued:

Smith

that

when

our

to information

ergy

we

needed

for

"We

on

are

has

ac¬

atomic

en¬

firm

provide the
develop¬

help

can

capital

*

off

Before the mills have

levels.

vacation

journal.

Production

tions.

with

production problems and the outlook for the immediate

With the third quarter already spoken
for, and the fourth
quarter filling rapidly, the maintenance-vacation bugaboo will ag¬

Beane,

the

ment of atomic energy for peace¬
time uses."

On

products, mills

some

are

over

running 30 days

balance of the year.
or more behind on

deliveries.
The maintenance

problem already is beginning to crop up in
producing districts and the ingot rate in those districts is
suffering. Scheduled production rates are not being maintained,
although the national pace is holding steady this week at about
some

97% of capacity, unchanged from the previous week.
Normal mill customers are turning more and more to
higherpriced warehouse steel to fill in tonnage gaps. As a result, ware¬
house inventories are showing signs of imbalance.
Mills report
that warehouses

in turn

are increasing pressure for
delivery, demagazine.
~y
The pressure for warehouse steel is as good a sign as any that
consumers generally have been unable to do any
inventory-build¬
ing. Otherwise, a delay in delivery from ,the mills would not r

clares

this trade

create
pay

the emergency shortages that have forced some users to
warehouse prices in order to maintain their own production

schedules.

third

Some

quarter business

is certain to carry over into
virtually guarantees a good production rate
fact, some consumers would be willing to
place business for the first quarter of 1956 if the mills would
accept, concludes "The Iron Age."
,y*

fourth quarter, which
at the year-end.
In

,

week

Last

some

United

States

or

Canadian

assembly plant
Last year the
milestone was not reached until the week ending July 17.
Meanwhile, according to "Ward's Automotive Reports," United
States car and truck building the past week, pegged at 207,452,
was a slight 0.4%
under the previous week's 208,268 turnout, the
third highest yield in industry history.
Passenger car making alone, estimated at 176,489 will be
0.5% under the May 9-14 total of 177,287.
Truck building, at
30.963, will nearly equal the 30,981 completed in the prior week.
rolled 'out

the

4,000,000th

car

or

truck

of

1955.

Increases at General Motors Corp. and Ford

Motor Co. offset

losses suffered earlier last week by

American Motors due to labor
Kenosha and Milwaukee, Wis. Chrysler Corp. op-*
erations were hit by strikes last week, and the week before, ineluding a walkout early Friday at the Vernon plant in Detroit.
The statistical agency reported that Saturday operations were
on
tap last week at Buick, Pontiac and all Ford Motor Co. as¬
sembly plants.
The sharp increase in scheduling by General Motors Corp.
found the company taking a big 51.5%
slice of industry car
output, while Ford Motor Co. will take 28% and Chrysler Corp.
flareups

16.4%.

at

A

week

earlier, these producers took 50.1%, 27.4%

-

"

and

16.8%, respectively.
Among truck builders, Chevrolet will garner

a strong 37% of
construction, Ford 23.7%, General Motors Corp., 10.0%,
International, 9.2% and Dodge, 9.0%. Year-to-date truck erecting,

last week's

which

Gordon Scherck Jr.
With Scherck, Richter
ST.

LOUIS,

Mo.

—

Gordon

Scherck, Jr. has joined the trad¬
ing department of Scherck, Rich¬
ter

320

Company,

Street,

members

Stock Exchange.

recently

&

Fourth

Midwest

Mr. Scherck at¬

University and hag

been

Weintraub

North

of the

associated

with

Associates, Inc., ad¬

vertising agency.

until four weeks ago lagged behind
1954, is now 8%
ahead of the year-ago stage at 485,160 as against 447,667.
Car building since Jan. 1 at 3,409,560 is 46% ahead of the same

period last

year

truck production

which stood at 2,333,622 units and combined
is up 40% to 3,894,720 from 2,781,289.

This week's United

States

sum

of $542,997,099,

there

Floyd

B.

Floyd Odium

Odium, President

of

The

was

Women's

Bond

mill

Club of New York luncheon meet¬

part

at

The

a

drop of 4.0%.

be

ing, Thursday, June 2.

.

^_

.

The sub¬

ject of his talk is to be "Uranium."

the Current Week Dips
96.3% of Capacity

of consumers now is to get delivery of steel
scheduled for May and June shipment.
They want to get ahead
of a price rise, says "Steel," the metalworking weekly.
Steel is billed at prices in effect at time of shipment.
With

guest

speaker

will

car-truck

Steel Output

the

Corp.,

combined

$55,063,895 in the same month last year, and 16.2% less than the

to

Atlas

Canadian

Building plans filed in New York City during April had an
estimated valuation of $49,939,864.
This was down 9.3% from

Women's Bond Club
To Hear

and

car-

building at 220,397 is down a slight 0.7% under last week's 221,746 completions.
Activity in the building construction field during April con¬
tinued unabated, Dun & Bradstreet, Inc., states. The total valua¬
tion of building permits issued in 217 cities, including New York,
during the month was $521,173,029, or an increase of 6.4% above
the April, 1954, figure of $489,888,868. Compared with the March

$59,577,583 in March.

passenger

standard

but

is

Production

nation wide in¬

&

ner

continue to progress and to pros¬
per.

yes-

Lynch,

Pierce,

tended Tulane

to be a pretty well
tendency for motor cars

not

wire

this

guesswork.

seems

case

reel

—

is

the

consisting of six

seems

it

run

Corp.

mower

best

seasons

This

to

was

entered

power

There
defined

mowers

models.
The heaters
above mentioned sell best in
fall

but

is only

not, however, illogical to
sume
larger
dividends
out
larger earnings.

incinerators,

rotary

and

appli¬

gas

roof

conditioners for

Trim

and

and

—

$2.40

a

is

ances

an¬

Book value

declaration

The

Merrill

cess

at

was

nounced

Lawn Mower Division in the Fall

calculation

year.

This

terday

sure

de¬

every

Commission.

ery

position
(1954
year-end) was good with above
$14 million in net current assets,
even
after cash purchase of Reo

veloped to produce items salable

now

"Access
Agreement" with the Atomic En-

his

million from $84.2 million in 1953.

at 31.

of sales in

strike

Now let's turn to finances.
year

power.

last year. Principal prod¬
here is shell casings for the

uct

wide

occurred 18 years ago.

fairly
tapering

7%

to

plant

Industry

Price

Total industrial production advanced

financial

The "Access

corporate leadership
guidance of Mr. M. F.
President
and
General

Commodity Price Index
Auto

and

weather

an

can

you

the

listed

been

although

from

a

a

signed

effective

to

under

equally

account

sales.

first ; time
has

entry,

perceive that
Motor
Wheel
is
progressive. This is due not only

a

in

formance

the

been

last

wheels

For

institution

'c

foregoing

Trade

Food

*.

Agreement

that power mower sales accounted
for 12% of total sales for the first

quarter of

Retail

State of Trade

future is far from

AEG

15,000

has

Output

Carloadings

pay¬

Merrill Lynch Signs

exclu¬

market

mower

Production

Electric

states "The Iron

electric

production

welded

dividend

distributed

be

zation coverage.
The set retire¬
ment age is 68—optional at 65. The

of

cash

ments, then Motor Wheel Corpo¬
ration may attract you.

11

Wheel, however, pioneered in the

Mjotor

ening vistas of earning power and
history of sturdy balance sheets
liberal

Steel

stocks

a

and gas)
by 150 Reo
distributors and 5,000 dealers in
U. S. and Canada; while the DuoTrim units will be handled by the
broad selling organization of the
will

wheels for passenger cars 35 years
ago.

in

mower

million

home

for

market

managed corporation with broad¬

in the home
Wheel, Lansing,

Motor

the

price
wise, and which still provide a
generous yield, may we suggest
an
inspection
of Motor Wheel
common? If you seek wide market
swings, MRW is not the right
vehicle; but if you are content
to deploy your funds into a well

and

Thursday, May 26, 1955

The

have not gone crazy,

(right

Inc.

of

in

which

excellent earnings results this year—Motor

some

up

on

.

<r

peering

about

Enterprise Economist

.

these
to

Wheel!

By IRA U. COBLEIGII

.

not

big aim

order

books loaded

on

some

products, there is danger that

of the tonnage scheduled for second-quarter delivery will
get delivered until the third quarter. Early in that period a

Continued

on

page

35

Volume

Number 5432

181

.

.

The Commercial and Financial Chronicle

.

subject.

a

World Political Silnalion aid

(2413)

acts

the

But of

well

as

face of

uation—I

The Outlook for Plastics

am

sure

United

Statistical Bureau, Inc.

States

tlement

Mr. Zelomek expects long continuation

of Cold War, necessi¬
tating our preservation of strong economic as well as military
structure.
Forecasts vigorous promotion of our international
trade.
Discussing future of plastics industry, he cites two

No One-World
I

should

like

Adlai

Peace

first

look

to

at

really
wants
long-term peace set¬

a

with

is

China

what

and

BUREAUCRACY AT THE CROSSROADS
Can

the
relatively unorganized taxpayer ever, under the
democratic political system, prevail against the heavily entrenched

Russia.

the

Republicans
Democrats want,

pressure groups with their self-interest vested in our spawning
political empires? Can Big Government, the great lean-to, with
the unbalanced Budget ever be curtailed? Can

The

conditions I have described, how¬
ever,

such that

are

we

long-term

no

be

at

crossroads.

a

the

On

real

The

narrow

down

view
a

our

to

f

tion

political

the

of

prob¬

I

business

ican

with

moments

and

program

our

believe that the trend

European allies will be more
more to
withdraw from Far

and

predic¬

Russian

that

and

involvements

Eastern
A. W. Zelomek

among

will support this
trend.
Russian policy will be to
be no real
peace in international affairs—in seek decisions on the great issues
the next year, in the next two of the power struggle in the Far
And it is in the Far East
years, in the next ten years. And East.
there will be no great war that that Russia, together with Com¬
will engulf all
will
concentrate
nations and all munist China,
her aggressive moves. Thus, it is
parts of the globe.
Either the idea of a "one-world quite logical to suppose that Rus¬
will

There

peace"

is

absolutely

an

sible

idealization

plies

the

implau¬
it

else

or

subjection

of

im¬

inde¬

all

sia

will welcome

I

Now

don't

and

Clearly, neither is possible at the

all-out

war

politically real¬
istic kind of peace is a peace based
on a balance of power among the

Far

by

powers

present time.

power.

one

A

China

want

limited
aim

that

say

will

even

Their

East.

to

mean

is

an

the

to
not

an

immediate destruction of America

as a world power—for this would
great states of the world. World be unrealistic. Their aim is rather
War II did not create the condi¬ a gradual attrition of America's
tions for such a balance of power, international prestige and a grad¬

and

postwar developments in the

ual

of the Communist

expansion

of control.

have

East

especially

Therefore, the best

upset

hope

can

we

area

conditions

litical

American
that

aware

unfavorable

to

—

decision and crucial test is here

For¬

and lim¬

wars

tion

tary

industrial

of

ent

out

is

war

mili¬

istrative actions

port its commitments without in¬
volving large forces in ground

If there isn't

going to be

limited

and
ons

atomic

of

use

be used

may

And

us.

they

to

may

our

express

world peace, the likelihood is that
there

isn't

world
ular
war

war

going
either.

that

conception
or

conflict

be

to

a

There is

one-

a pop¬

any

future

the

among

great

this

will

longwill

be

the

power,
moves

sought.
the

eliminate

But

no

agreements
jockeying for

and counterchessboard of the

'■

world.

.

to

Let

us

f

now

move

a

little closer

terms

"Once

terms of actual events

It

East?

mean

in

in the Far

that China is sim¬

means

ply not interested in
fire

or

armistice

a real cease¬
agreement re¬

found, for example,

<

time

a

the Commission

the 1,000 pressure groups
sure

of the American

other 999
we

pressure groups

will help

Our

sary.

That pres¬

represented in Washington.

said, 'We deeply respect your words.

group

Reorganization

on

restraining words affecting one of

that

But it is only the

badly in need of reform and

are

They said our appropriations are very neces¬

you.'

Commission opined that they could

spell the words

'very necessary' with less than nine ciphers attached to

reply

was,

it.

Their

'Our spelling is absolutely necessary to save the Re¬

public'."
But it is far more than humor,

on

wisdom, and integrity that the

This veteran, himself working

Chairman has brought to his task.

chapter and verse, has reduced 1,800 pages of the

as
<

in THESE words of Clarence

less public
•task forces,

have

Task Force

His colleagues attest,

findings to 40 concise and readable sheets.

Francis, "His own example of tire-

service, so fully emulated by the Commission and its
is

an

example to all.

Who but Herbert Hoover could

provided the leadership and recruited the talent which make

the Commission's reports so great?"

the key to

successful? Surely the answer holds

the continuation of the vitality of our free

system, to the survival of our free
very

*

*

*

Will this unique effort be

workability of

a

enterprise

enterprise system, and to the

democracy!

need to actively demon¬

we

our

to counter

strength, when we need
aggressive moves made

by the Communist bloc. It may go
down some when temporary agree¬
ments

upon

of the Government said some

of

in

National Industrial

the

fortunately hew-found style—cites an "Aesop Fable," as

follows:

ship and see what this pic¬
the international
scene

our

ture

before

the current investigation operating

Obstruction

the Domestic Economy

on

out

Highlighting the basic difficulty of his task forces, Mr. Hoover
—in his

Effects

pointed

last week,

moves

the

op.

Board

medical aid; that 104 agencies devote part of
their services to the making of loans, guarantees and insurance;
and between 2,000 and 3,000 different units concurrently are in
direct competition with private enterprise. It is attempting "the
birth control of documents," in curtailing the 4,700 different varie¬
ties of questionnaires the government, is now sending each year to
the commercial world "and also to confuse plain people."

short-term

or

strate

Cease-Fire

policy

out its

that 71 agencies give

campaigns may
international confer¬
at which long-term agree¬

ments

Hoover

along functional, in lieu of departmental lines,

thereby facili¬

new

ences,

Mr.

Conference

New peace

bring

As

:*

temporary compromise solu¬

tions.

when

does

propose

may

Some "Birth Control" Needed

weap¬

strength without totally involving

-

No Far Eastern

Commission

"The

legislative enactments and admin¬

in its judgment are necessary to carry

as

fighting. The Air Force, the Navy,

tion.

What

teeth:

recommenadtions.")

means

a one-

law creating the present

(The

effected.

these

carries

such constitutional amendments,

United States may be able to sup¬

the Western powers.

War

yearly savings of $6 billion, enough to balance
quick jiffy—providing that all the recommenda¬

adopted and

are

Commission

But allnecessary.
The

time

'< No One-World

total

of

the budget in a

possible.

not

Hoover's

potential annual savings of another $114 billion, with Mr.

tions

not

is

$2 million, succeeded in introducing operating
$1V4 billion annually. The ores-

Commission, in the nine reports issued thus far, indicates

new

forecast

*

powers.

Peace

and

ex-President, are eliciting from the public.
Commission, which
used an appropria¬

economies amounting to at least

rich plum in the Far Eastern con¬
stellation

both be¬

now

stupendous job done by the Com¬

Hoover

than

less

of

of the

mission, and the unprecedented regard which
it as well as its Chairman, our now-respected

May

first

The

the

armed peace continually

an

interrupted by cold

A. Wilfred

attempt

large-scale
American
intervene
economy.
•
Or, they may so choose the
It means that we as individuals
and
the place that, if we
ited fighting wars.
are
caught in a time of conflict
There
are
some
people,
of pick up the gauntlet, we risk be¬
and tensions and that we must rec¬
course, who believe that there are ing isolated and, if we do not, we
ognize these conflicts and tensions
risk being humiliated.
peace
parties
in
Moscow
and
in any evaluation we make of our
In the case of China, we can
Peiping. They believe that there
national position, our industry po¬
see quite clearly the domestic po¬
are some groups who would wish
sition, our personal position.
to consolidate
the gains of the litical situation that is determin¬
The national economy will have
Communist
ruling classes in a ing her international aggressive¬
to continue to sustain armaments
ness.
The Communist regime is
period cf peace, in a reign of
production at about the present
insecurely seated. Having a for¬
"mutual coexistence."
level. And, of course, we as busi¬
Unfortunately, I cannot in this eign foe helps it to cement inner nessmen know that the converse
short speech go deeply into po¬ cohesiveness. And successful for¬
is true—that armaments produc¬
litical theory, into a discussion of eign adventures will demonstrate
tion
at about
the present level
the dynamics of the totalitarian the regime's power to the Chinese
helps to sustain the national e'cdiVstate. I can only say that domes¬ people as well as to the people of
omy.
But we must not overesti¬
tic
political conditions in both neighboring countries. "Give up mate the economic importance'of
Russia
and
China preclude the all hopes for a change in regime"
armaments
production.
Defense
—this is the slogan of the Chinese
possibility that peace parties will
expenditures now stand at about
Communists, and to back it up
come to power. The trend in these
12.2% of the Gross National Prod¬
states will continue to be toward they will demonstrate their mili¬
uct. It may go down some and it
invincibility.
They
must
an
extension of the states' mili¬ tary
humiliate the United States and may go up some—it will continue
tary and police powers and of
to fluctuate over the years of the
reveal the alleged inferiority of
new foreign aggrandizement.
armed peace. It may go up some

for is

cause

strategists

the

Thus,

they may
any possibilities for a balance of provoke a clash with the United
power
that might have existed. States under geographic and po¬
Far

cannot

we

Organization of the Execu-•«
This time for

on

tive Branch of the Government).

Formosa

tate

tralism in Europe.

Russia

pendent

and neu¬

peace

(the Commission

make

we

is not the end, but
beginning. Next will
come Korea, Vietnam,
Cambodia,
Thailand, Burma, or the Philip¬
pines.
And thereafter Japan, a

policy

•

for

well

only

our

Or will

questions now

Branch, of the glaring ills which are now
being demonstrated by the Hoover Commission

and then have

for example, cannot be for¬

saken,
are
on

on

down

Back
mosa,

foreign-

our

tion:

it alone?

go

neutral¬

I

a

double-bar¬
reled

few

a

trade with Europe.

start

me

in

have

may

economic-aid

industry.

out

may

discuss

to

a

climactically with the future disposition,
by action of the Congress and the Executive

pledges and then back down?

ism

specifi¬
cally the plas-

Let

shall

make pledges

we

the effect that European

and

tics

even

weapons,

"neutralism"

lems of Amer¬

and
because
of,
the trend
to
gain strength.
ties

economic

or

atomic

well

Despite internatonal

and

despite,

imme¬

diate

of it.

aware

-considera¬

more

in Washington, too, are

men

as

us

to these crucial

answer

lies

events,

larger

threatening

the tide of
public apathy,
self-governing

Can

and

debt,

democracy, be reversed?

agreement.
On the other hand,
the policy, noted the reluctance of our our allies are
increasingly reluc¬
allies to become in¬
major trends, of the present and European
tant to be the tail of an American
volved
in
shooting
wars,
and
the future, and then gradually to
kite flying across the Pacific. Will
there is no doubt that our states¬
the

of

some

taxation,

critically

one

a

have

cannot

we

the other fellow"?

for

mounting

American policy would seem to

hand,

get rid of the implied slogan: "Econ¬

ever

omy

settlement is possible.

radio

his

in

•

•

By A. WILFRED MAY

Policy and Aims

want, what the

American Far Eastern

on

Observations.

to

aim and

what you want, what I want.

/,

Stevenson,

address

This

needs, and

problems arising from defense
increasing demand from new uses.

want

our

America

would be

supply

sit¬

policy?

What

major

In

upon.

you

know—what will be

By A. W. ZELOMEK*

International

acted

this international

Economist and President

'

America

course

is

as

are

reached,

when

long-

agreements seem to be just
around the corner. But the peace
term

Participating Distributors and Dealers in all
Coast

Securities.

Specializing in

Over-the-Counter

will immediately turn into garding Formosa and the islands will always be only an armed
in the Formosan Straits. It means
an
engagement that will involve
that within the next few months peace, and our economy will have
all nations and probably destroy
to be an armed economy.
we shall probably see more shoot¬
the world.
This is a misconcep¬
tion of the consequences of atomic ing actions in the waters around
United States Must Be Strong

Securities.

Pacific

Inactive and

Interested

in

powers

weapons.

ment in

Just

because

could

war

involve¬

possibly be

so

completely destructive, there has
been a growing trend among the
statesmen

of

small

and

nations to "sit out the

medium

next

one."

will
for

*A

talk

muda,

by

of the

Conference

cn

May 9,

Mr.

Zelomek

Plastics
board

before the
Industry Annual
Queen of Ber¬

the

1955.




.

.

begin
a

means

make

to

attack

direct

mosa—but such

I

an

that

China

preparations
against

For¬

action may be

have

Two things need to

the

relation

decisions

were

only

talking

this

in

conflict—as

if

an

tures

to

the

of

be said about
expendi¬

defense

economy.

a year or

been

the

as

international

United

States

object, and not also

All

RAY

C.

Mining Securities.

MOORE—Mgr.

Trading Dept.

At Home

And they
two.
both point to the conclusion that
if only
defense expenditures are not the
side made the policy and the
decisive factor in our economic

postponed for
one

Society

It

Formosa.

5

health.

The first is that the minor

Continued

on

page

27

WALDRON & COMPANY
RUSS
GArfield

BUILDING,

1-2000

SAN

FRANCISCO

4

Teletype S. F. 752

(,y

\

The Commercial and Financial Chronicle

(2414)

serving
These
140

News About Banks
NEW

OFFICERS, ETC.

Bankers

and

*

The

of

National

First

York

New

City

Bank

opened

May 23

on

its 73rd Greater New York branch
at

Boulevard

Queens

39th

and

Street, Long Island City, and also
opened enlarged modern quarters
for

Fordham

its

Creston

The

Road.

branch

Avenue

2481

at

Fordham

near

branch

Queens

Consolidation under The

is

Company

pro¬

the

Fordham branch has expanded its
floor

and stockholders of both banks.

two-fold

area

in¬

meet

demand.

creased

Manager
of
Boulevard-39th Street is

Queens
Stuart

to

E.

Peoples

Cameron,

formerly

of

Trust

branch, Brooklyn.
Finnegan is Manager at

Thomas J.

the Fordham branch.
*

*

j...

Under

of the

terms

agreement,

stockholders of The Peekskill Na¬
tional

will

Bank

receive

Trust

Trust

and

Company

shares of

10

C\." ■'

County

Company stock for each of

Mr.

Announcement is made that the

58,000 additional shares of capital

will

Barry

ger

$3,000,000. The mer¬
effected under the char-*

was

ter and title of the National Com¬

mercial

Bank

of

& Trust Company
At the effective date
the merged bank, it

Albany.
merger,

stated, would have

was

stock

of

$3,000,000,

shares of

be

Countv
charge of

a

Peekskill

stock, par value
surplus of $7,500,000;

each;

profits of not less
than $1,000,000.
The main office
of

the

Athens

known

Bank

&

348,000 shares of stock issued and

I,218,950 shares of stock outstand¬

ford,

Conn.,

Federation

Bank

fered

the

to

one-for-five
was

it

and

York, of¬

stockholders

ratio

at $20

on

a

a

heavily oversubscribed.
indicated

was

on

outstanding, and total capital in
excess of $7,200,000.
In our issue
of April
28, page 1992, the is¬
and

suance

of

sale

58,000

shares of

capital stock of the bank at $20
share. T. J. Shanahan is Pres¬

per

ident

of

the

bank.

i-f

*

*

r

-j-vv-"

Anthony Gerosa, Vice-President
Metropolitan Roofing Sup¬
plies Company, Inc., and Vice-

of the

President

of

Gerosa

Paladino

-

Corporation, has been appointed
to the Advisory Board, Bronx and
Upper
Manhattan
Division,
of
Manufacturers Trust Company
New

York,

President
announced
is

a

Horace

of

of

C.

Flanigan,

Trust

the

Company

May 20.

on

Mr. Gerosa

brother of Lawrence

Comptroller of the

City

Gerosa,
of

New

York.
#

.

#

■

York

City,

Mr.

has

been

ap¬

Barry said, "The employees
all

of the Peekskill National Bank,

whom

of

expected to remain

are

will have the same
eligibility rights as all other
County Trust employees for bene¬
fits, including pension, life in¬
surance
and profit sharing. Last
year, County Trust's profit shar¬
ing plan equalled 13.52% of each
individual's salary."

Trust Company

County

have

offices

35

in

will

Westchester

22

communities.
*

*

*

The

of

merger

National

The

Com¬

Trust

and

Bank

Irvington

Plains, N. Y., under the name and

rently serving
Greater

Chairman of the

as

New

cur¬

York

Fund

cam¬

*

Arthur

Uie

if.

President

National

Tranklin
Square,
Nv. Y., announced

Bank

Long

of

Island,

May

on

of

16

the

completion of the consolidation of
"lie

Nassau

j any of

"he

County

Trust

Com-

National

Bank

Square under the

of

name

nod charter of the Franklin Na¬
tional Bank, effective at the close
< f business on
May 13. In making
Hie

announcement,

icated

<

i

that

lurces

:

(

now

'

He

in-

combined

re-

total

will

also

be

Chair-

of the Trust Committee and
hairman of the Advistory Board,
he first formal
"Open House"

'.an

bservance
-liff office
t

held

was
on

at

the

to

inspect

uilding.
jation

The

was

t Feb.

24,

the

in-

was

modernized

proposed

referred to in

consoliour

issue

936.

page
i:.

Sea

Saturday; May 21,

which time the public

ited

*

Roth

approximately
>390,000,000. William F. Ploch,
ice-President, will be iri charge
f
the
County Seat
Office
in

1 lineola.
:

the

Mr.

if

Bank

and

Trust> Com¬

Peekskill, N. Y. and The
bounty Trust Company on May 25
pany,

ipproved
ween
ears

a merger agreement

the
the

two

26,

W.

institutions

signatures

of

be-

that

James

Jiempsey, Chairman, and David




M.

consolidation,

David

and

Board

J.

Mr.

Chairman of
of

Directors,

Condon, Cashier of

the

Irvington bank, will be VicePresident in charge of the Irving¬

The

v

*

sale

stock

if

of

to

be

of

if

$1,200,000

the

of

of

new

Hartford

Company

Trust

of Hart¬

has

served

in¬

to

$8,-

800,000 to $10,000,000.
The en¬
larged capital became effective
May 18. The plans to increase the
capital

noted

were

in

these

col¬

'

i

.

^

the

of

Girard

Ccrn

Trust

Exchange Bank of Philadelphia, it

partment.
ferred

The

will give

merger

offices in 21 Westchester

30

The

total of

a

com¬

*

*

Over
of

the

there

National

of

Company

been

Marine

capital

stock

Bank

Rome,

N.

&

Y.,

exchanged for shares of
Midland

stock, according to
ment made

jointly

Corporation
announce¬

an

on

May 19 by

Baldwin

Maull, President of Ma¬
rine Midland Corporation and by
Carl

H.

Simon,

Chairman of the

Board and Charles W.

Williamson,

Jr., President of the Farmers Na¬
tional Bank
Rome.
in

The

&

Trust Company of

stock

to

was

acquired

made
by Marine
pros¬
pectus dated April 8, (referred to
response

these

its

to

proposal
Midland in a
a

columns

March

24, page

exchange five shares of

common

stock

for

of Farmers National.

each

share

Total

assets

of the Farmers National

on

of the transaction

brings the

ber

Midland

of

Marine

10

num¬

banks

and

in

1932,

1939, and Assistant Vice-

President
In

Real

Real

later

Mr.

1941,

that

Estate

in

Of¬

same

year.

was

made

Brown

Vice-President

Estate

the

trust

ad¬

ministrative
he

division, and in 1949
placed in charge of the

was

entire

trust

department.

mained head
ment

of the

until

artist."

'f

A

the

He

trust

spring

Senator

at Dravosburg,
stock
of

of

standing thait I
ator

is

March

26

Bank

of

$1,800,000.

date

of

of

re¬

A part

story by

Ohio,

author

the

of

a

common

merged

the

as

pressing his amendment

was

I

thought

it to

But

might

few

a

solemnly

the

be

the

to

ago

that

me

well

very

be

a

duck

genesis

Ohio

vehement

very

the

Constitution

In

time. I have

my

who

have

I

to

wanted

of

there

and

industrialist

hunting situation in Ohio
Senator Bricker's proposed
was

a

>

with

talked

rebel

under

encountered

lot

a

legitimate

very

the

tax

indignant

citizens,
load, income and cor¬
of

indignation

their

in

the matters

of

-

II, the Korean conflict, the growth of bureaucracy, the
National Debt, the catering to labor unions, etc. But I have never

.

citizen, a worthwhile one, a tax-paying one, quite so indignant about anything as was my industrialist friend from Ohio on
the subject of ducks, the killing of them, the rules and regulations
seen

a

regarding their being shot.

V

.

.

.

r*

-

assured me that it was idle talk of democracy
behind the Iron Curtain, in Indonesia, in Asia generally, when a
My

friend

virtual

reign of bureaucratic terror hangs

.

the head of the

over

Ohio duck hunters.
are we up against, he asked.
: y
permitted a bag of four ducks a day," he expostulated.
right. But what happens? This bureaucrat flies over

Well, what
"We

are

"That is all

,

the duck hunting country in a helicopter, and swoops down upon

law reads that you can't shoot

But the

route do and fro' its

feeding ground.

meal out of his
a

pocket and
feeding ground.
"In

of

us

will have

where

Ohio

we

duck

your

This

week-end.

;

.

:

.

great duck shooting lovers we have

are

friends

hunting

>.

duck when it is
This bureacrat will drop
a

dropped it and it constitutes

swear you

cottages out around the marshes.
of

none

bag of four ducks so this bureaucrat has nothing to complain

our

about.
en

Maybe

at the most unwarranted times.

you

bureaucrat

Say

at

entertaining some
these cottages over a
helicopter will swoop down

his

in

you are

of

one

declare you and your guests have been shooting illegally
and order you to go home. Well, you get ready to go home and by
upon you,

of breaking camp you throw your feed away. This bureaucrat
charges you with throwing this feed away with a view to

way

then

enticing the cucks.
break

Imagine that when you have been ordered to

and go home."

camp

;

:

;

My friend assured me that he knew of no better evidence of
Police

than

State

the

of the

experience

Ohio duck hunters.

happen to us it can happen to you, he said warningly.

can

friends

said

that

the

bureaucrat from

whom

they

had

hoped they would get relief under the Eisenhower Administration
but hadn't,

had been having a delightful time hauling duck hunters
them fined $500. The duck hunters paid the

into court and having

friend said, because they didn't have the time, money or

First

Na¬

fine,

Pa.,

lortitude to fight it.

a

common

At ''the

consolidation,

stock

effective

the

con¬

my

But

75th

his

finally the bureaucrat struck a determined duck hunter,
victim. This fellow did fight it out in court, cost him

$1,000 but he got
Number 75 is

hunters.

duck

making
every

a

a

verdict.

now

by way of being immortalized by tue Ohio
formed an association and aside from

They've

hero of No. 75 they have offered to supply a ducklet for

duck they kill.

-

My friend was down here, not to see about what the rest of

First

National

Bank

of

St.

Paul, Minn., which increased its
capital from $6,000,000 to $9,240,000 on April 18, by a stock divi¬
dend of $3,240,030, has made a

consider the problems of the

of theirs, made

State,"
taking

that

with

a

times, but about this proposition

view to getting out from under the "Police

not t'^e one that would come with Russia's
Their problem does seem more immediate.

exists,

us over.

still

Now Stewart,

With Federated Sees.

tal,

(Special to The Finincial Chronicle)

further addition to its capi¬
which, as of May 12, was
enlarged to $10,000,000 by the sale
of $760,000 of new stock. The pre¬

increase
our

in

the

capital

was

issue of May 5, page

2088.

BATON ROUGE, La.—Lester

C.

Anderson, Roy Bartlett II, Fran¬
cis C.

dius

Cox, John N. Evans, Thad-

Honora,

Harold R. Hustead,

Charles

(Special to The Financial Chronicle)

WATERVILLE, Maine —Robert
Tonge is

now

connected

M.

Jordon.

Clarence

R.

C. V. McCollum; K. T.
Phillips, Isidore Rozeman, Roy T.
Knotts,

With Smith & Co.

with

Company, 193 Main St.

Sessums, J. A. Shepherd, and C. W.

Sherrouse, Jr. are now with Fed¬
Louisiana

erated Securities Corn.,

National Eank Building.

Eubanks,

Meyerson & Co.

-

&

a

that his duck

migratory bird
part of a smear

why it should be.

reason

those

nights

assured

amendment

us

Smith

was

the

by

annoyed

were

campaign.

$600,000.

M.

Bargeron

Washington gossip columnist to the effect that the real

McKeespcrt,

bank reported a capital
$1,893,750, in shares of 189,375
of common stock, par $10
each,surplus
of
$3,106,250
and
un¬
divided profits of not less than

noted in

Carlisle

campaign against the
was
the'recent

smear

hunting friends in Ohio
treaty with Canada. Or,

of

vious

.

amendment

his

the Senator

reason

My

solidated

The

...

inclined to think the Sen¬

am

of the

and

1954

Dravosburg,

was

with
of

of

right.

Senator

depart¬

of

Pa., with

$75,000,

Bricker

proposed amendment bearing his name, has
stirred up a lot of scholars and internationalists
but apparently11 have been left cold, notwith-

if

v

•

treaties, not the entire Congress.

upon

If it

Bank

.*

foreign governments which override existing domestic law. Only the Senate passes

the

*

burning interest in the past

with

when he assumed direction of the

State

of

to the Constitution which would proscribe the
President in the willy-nilly making of treaties

banking department.
The

matter

two years is the so-called Bricker Amendment

being

years,

Officer

II,

1955,
were
approximately
$12,600,000 and deposits were in
of $11,000,000.
Completion

division

ficer in

April

excess

trans¬

was

department

for

which latter had

*

of the

Farmers

Trust

has

80%

he

estate

Assistant

tional

munities.

1931
real

trust

appointed

•

County Trust Company

In
the

to

the

reason

political movements in this country.

World War

'»•

George H. Brown, Jr., has been
appointed Executive Vice-Presi¬
dent

for the intensity
They originate, get
underway and sooner or later have our politicians beating their
breasts and swearing their undying allegiance to whatever is best
for the people, but at the same time turning
flip flops in the manner of a circus trapeze v

behind

porate;

April 21, page 1838.

umns

Most of the time you never know the

National

the bank's capital from

crease

office.

ton

1430)

Directors of both The Peekskill
National

May

on

serve as

Associate

the

in

if.

the

Eddison will

Mineola, Long Island, and

Franklin

ranklin

j

effective

comes

Eddison, President of the
Irvington bank, announced.

#

Roth,

Franklin

with

charter of the latter institution be¬

Under

T.

New York,

Irvington,

pany,

Barton

paign in the Bronx.

;•

served

The County Trust Company, White

is

is

branch

the enlarged* National Commercial
Bank & Trust Co. of Albany.

of

Company.

Borchers

Athens

was
announced
on
May
18 by
Geoffrey S. Smith, President. Mr.
Brown is in charge of the banking
On April 30, 1955, The Peeksdepartment. As Executive Vicekill
National
Bank
and
Trust*
; President,
in the absense of the
Company had total assets of $7,- President and Chairman of the
148,047 and deposits amounting to
Board, he will perform the duties
$6,546,368. The County Trust Com¬ and have the
authority of the
pany, on the same date, had total
President. Mr. Brown is a veteran
assets of $288,644,757 and deposits of 32
years of service to the bank.
of $265,190,502.
Upon completion He
began his career at the age of
of its currently pending mergers,
17 as a clerk in the transfer de¬

pointed to the Advisory Board of
the Bronx and Upper Manhattan
division of Manufacturers Trust
Mr.

as

with the Bank,

The

*

C. William Borchers, Executive
Vice-President of the North Side
Pavings
Bank,
Bronx
Borough,
New

$300,000,000.

announced

was

additional

an

ing and capital funds exceeding
$20,750,000, with deposits of about

National

the

share,
This,
May 23, makes

of

Trust Company of New

150,000

undivided

operations. Upon com¬
pletion of this proposed merger
and those now pending with The
Irvington National Bank and Trust
Company and The Central Na¬
tional Bank of Y o n k e r s, The
County Trust Company will have

stock

capital

a

in

common

$20
and

Trust Vice-President in

com¬

stock of

of

their present shares.

*

'

merger

of Albany, N. Y., with

pany
mon

two

cars.

parking facilities for 44

By CARLISLE BARGERON

Athens National Bank,
N. Y., with common
stock of $50,000, into The National
Commercial Bank & Trust Com-,

County

gxpected to take place in about

j

S.

close of business May 6, the mer¬

and charter

name

U.

ger of The
of Athens,

pany.

Trust

Washington
Ahead of the News

;

*

*

Comptroller of the
Currency announces the issuance
of a merger certificate approving,
and making effective, as of the.

Barry, President, of the Peekskill
bank and Andrew Wilson, Chair¬
man, and Joseph E. Hughes, Pres¬
ident of The County Trust Com¬

months, pending approval of
agreement by state
and
Federal
banking authorities

vides

'

billion dollars.

CAPITALIZATIONS

The

From

Re¬
Cor¬

Midland

Marine

poration, it is stated, are approxi¬
mately
one
and
three-quarter

BRANCHES

NEW

communities.

State
of

Thursday, May 26, 1955

.

operate

banking

sources

.

York

New
banks

York

CONSOLIDATIONS

REVISED

State to 11.
a total
of
offices in 68 New-

.

(Special to The Financial Chronicle)

SAN

Calif.—The
Eubanks,
Meyerson & York, 216 Montgom¬
ery
Street, members of the Los
Angeles and San Francisco Stock
Exchanges, has been changed to
firm

FRANCISCO,

name

of

Stewart,

Stewart, / Eubanks,
Co.

Meyerson

&

Matook R. Nissim has recent¬

ly joined the firm's staff.

Volume 181

5432

Number

.

.

The Commercial and Financial Chronicle

.

suburban

the total population.

Scnapiro & Co., Inc., New York City

increased vestments. On the other hand, for

When

people

-

move,

-

growth, the pressures of high
costs and high taxes have been

opportunity.
They
"Are we to remain
bank

fact

deposits

of

age

increasingly difficult to meet. The

.

or

is

that

banks

smaller

even

with strong deposit growth, doing
a
retail business, have generally

basic in modern banking.

come

ments had to decide the question

those banks with less-than-aver-

; move. / Like 1, other
businesses,
•banks, too, must follow their customers.
Branch banking has be-

By MORRIS A. SCHAPIRO*
M. A.

population

67% compared with only 20% for

Changing Deposit Trends,
Branch Banking and Mergers

Mergers
are
an
economical done better than larger, heavily
of acquiring already-estab- capitalized banks doing a wholelished brancnes. Mergers give the sale business.

Asserting bank

subject to official approval,

mergers,

healthy development, bank stock analyst points out the
for recent activities in bank mergers.
in

a

Sees

of commercial

power

come.

strengthen their future

as

privately owned enterprises.

At

time of unprecedented eco-

a

activity, mergers and liquidations are reducing the number
of commercial banks. Everywhere
the nuest,nn .s
question is
asked — why9
The charge of
monopolistic

:

„

In

the

ten

last

.bank

years,

V

have

which

under

banks

are

Bank customers today,-

costs

and

big business?

as

to

and

business

Shall

we

exclusively

operate

large

loans

to

few

is

no

more

borrowers

at

Since merger val¬
higher than book val¬
greater than,
market values, shareholders found

taxes

the

on

ues

ues

were

and hence much

changing

'^h^ToS mCTger
banks

in

old

metropolitan

areas.

York

ir[®s^1^

City

Clearing

House Asso-

Here in New York

ciation has been reduced from 25

Ron,

consider the 6,639 Federal Reserve

"patron"1 member banks outside New York
City.

-

little

in the Wall Street 'jungle' making

dramatically illustrated than here
in New York City. The impact of

-

g

of

clientele

tracks

merger trend.

development

The merger trend has released operating.
competitive forces throughAs financial analysts, let us exout the entire metropolitan area, amine'the"impact "of^Rising costs
bringing to people and their busi- on the operating figures for the
nesses'
more
bankmg service at years i945 to 1954. First, we will

ac<? intensified"

the

-

Realignment in New York

new

lower cost.

bank

a

continue

cross

discount from book values was,
of course, their low earning power.
This
discount
intensified
the

in both number and size,

been
a
national
phenomenon. Basically the trend
has reflected the changed condi-

mergers

tions

nomic

we

blue ribbon

a

limited

a

destructive rates or shall we
broaden our sphere through
branch operations and extend our
services to a larger public?"
1948 through 1954.
Already 1955
The reason bank shares were
has witnessed mergers impressive quoted in the marketplace at a

Impact of Costs

Concludes,

-though public interest must be safeguarded, commercial banks
must be allowed
to
make the necessary adjustments to
v

serving

shall

necessity and
had to ask,

versus

institution
broader ; Understandably then, banks
public contact, increased deposits, have turned to mergers as one
enlarged capital funds, and diver- solution of their problems. There
sification in operations and in- ^ave been 742 bank
mergers from,
continuing

,

.

danger of bank monopoly and

no

dual system of banking protects the public.

says

\

Says banks have been

showing that earning

still low.

is

a

reasons

due to impact of higher costs and higher taxation,

squeeze,

and cites statistics

banks

are

means

tradition

become
as well

,

'

7

(2415)

in l946 lo lS today

or

City, $2.8 bil23%, of all member bank

The extent U

capital is concentrated and held

these developments can perhaps
by banks, traditionally banks of be best visualized when we conOperating costs, exclusive of in- big business.
~
sider that the
10 which were
-

intent

is

not

_

Banks in Squeeze

acceptable

an

How did this

'"explanation.;.

other

all

have

empha¬

been

affected

sized

concen-

high

taxation—factors

tr

in :the

tion 'of

a

was

made that the

special

largest

banks

hold
all

48%

bank

A. Schapiro

of

div'q

the

According

100, largest

banks

commercial

hold

bank

46%

,

to

com¬

all

of

The
critics who use this figure should
also state, however, that in 1940
•the 100 largest banks held 58%.
In

deposits.

fact, despite the

there

trend,
concentration

merger

is

today less
deposits than before

of

Financial

like

bank,
must

earn

the

war.

analysts know that a

any
other business,
enough to attract capi-

tal.

They are neither lost in the
political smog, nor beguiled by
the tradition and prestige of banking. Properly, they insist on facts,

Let

then seek

us

I.

Wall
-

oi

the

.

.

But, first, what
striking
signs
of
As

nation

can

the

are

this

able to

do

product,

$27.7 billion in

most

merger

throughout the

big

1954.

;

Of

and credit, is in-

and break even, has risen low-cost group of banks? We find
in 1945 to 1.90% in that this critical yield, the yield

pares with about 6V2% in 1946.
Economies resulting from elirn-

in-

ination of duplications, and new

vestments in order to meet these

efficiencies, now possible because

operating

ex-

required

.

this

miirsp

is

an

average

the

in

ago

149th Street and Third Avenue
the 'Bronx,

we

which

head

have

Street

in

find

five

offices

competition

in

another

one

lenders

insurance

as

-

This announcement is not

•

companies, savings banks, savings
and loan associations, pension and
other

funds,

individual

and

constitute,

of

The

bank lenders would be
mercial

brought

the
now

trend

represent

combined 'capital funds

of $1,685 million.

"their

create

a

if

community

now

of

most

market.

do

the

in

Here

we

sell

or a

solicitation of

The Detroit Edison

time

banks

example,

four

of

of

Queens.

General and

are

regulated

work

Refunding Mortgage Bonds, Series O,
Due

May 15, 1980

the

of

out

business

well

as

to

Price 100%
Plus accrued interest from

as

service

;

May 15, 1955

-

people at less cost. Wider

more

operations make possible
ficiercies

larger

as

increased

revenues

equipment eni,
lower unit cos's.
cannot

ef-

new

volume

and

/

justifv modern:

The

hence, ultimately ^
Small ba^ks. for
S
afford

Prospectus may be obtained in any State in which this announcement is circulated from only such
of the undersigned and other dealers as may lawfully offer these securities in such State.

expensive

equipment,

Branch Banking Basic

The

these Wall

brought

taxes

also

of

The First Boston

.

inflation

casts

the

bank

ti™e.

same

high

created

expansion
t'-e

financial

same

and

enormous

deposits.

there

has

At

been

Halsey, Stuart & Co. Inc.

Corporation

.

v

A. C. Allyn and

been

accompanied

funds into

And again, in the North Shore
Long Island area of Bayside. as a

activity and

result

of mergers,
two of these
big city banks, with capital funds
of $748 million, are participating

in that community's

growth. Paygetting metropolitan

service.

Social,
forces

ulation.

of

*An
tional

address

Annual

by

of

at the
the
Na¬

Financial

Analysts

Mr.

Schapiro

Convention

Federation

of

Societies, New York City, May 10, 1955.




new

our

by

areas

Incorporated

Hornblower & Weeks

Hallgarten & Co.

Equitable Securities Corporation
L. F. Rothschild & Co.

Salomon Bros. & Hutzler

a

shift

Schoellkopf, Hutton & Pomeroy, Inc.

and

resulted

economic

in

a
disper¬
industry and shift of pop¬
Today, the distribution

this trend, too, has

been

bv

marked

income.

come

urbs.

II. Hentz & Co.

big,
is

Small

r^ional

cities

Bache & Co.

Hirsch & Co.

The Robinson-Humphrey Company, Inc.

New York Hanseatic

Corporation

F. S. Smithers & Co.

Stroud &

Company

be¬

Weeden & Co.
Incorporated

Wm. E. Pollock & Co., Inc.

Shearson, Hammill & Co.

Courts & Co.

Ira Haupt & Co.

Incorporated

Baker, Weeks & Co.

Ball, Burge & Kraus

R. S. Dickson & Company
Incorporated

shifts

have

Gregory & Sons

Baxter, Williams & Co.

.

expanding national income

is broader and

there

Francis I. duPont & Co.

of
"

of industrial

population expansion.

political,

have

sion of

in
Eighth

Dick & Merle-Smith

Blair & Co.

Company

Incorporated

a

continuous diffusion of these de-

brought three to Flushing.

now

Company

competition, this

with

is

'

money'

nosits throughout the economy,
tot^n^ The growth in deposit totals has

in

capital funds
$1,493 million. The merger trend

side

offer to buy these securities.

is tighter

'

Street

an

May 25, 1955

cut costs. To do this,
reach a wider public,'

;

retail

which

another

Borough

find

To

squeeze

wholesale, and give more

up-to-date

the growing community of Flush¬

ing

28

enjoy the orotec-

the

take

us

the

bv

electronic

banking facilities.
Let

P*

page

squeeze, banks are forced to increase' and
diversify their busi-

tion of large capital and the con¬

venience

on

monopoly,

This

a squeeze.

examnle.

Bronx

to

to

Actually, commercial banks
in

in

this

offer

$60,000,000

com-

seeking

were

money

Individual* and

businesses

Continued

'

impos-

an

overcome

banks

and

These five banks

merger

other four.

in-

non-

growing complex of

must

Pankers, Chase Manhattan, Chemical Corn. First National
City, and Manufacturers. National
City established its branch in 1928.-

to

oower

if'J

a

VaSt and

they

another:

banks

earning

their

offering is made only by the Prospectus.

large
this

ness,

one

crease

NEW ISSUE

and

course,

an

The

The investment

corporate lenders.

Wall

with

metropolitan

.

non-bank

with

but

well, such

as

banks

in

l«ure operating^resmts lavorabg

nearly 14,000 insured commercial
banks must compete not only with

affected

of many examples, in the
trading community at East

^ futureop^atin*resultf favorably^*

-increase

lend money at rates that are most

one

and

cause

money

so-called "Wall Street" banks have

active

loans

of their greater-tnan-aver- a major realignment of the citys
in
deposits and, banking structure through mergability. Within the limits thus set, therefore, in total loans and in- ers
and liquidations. Manageoperations

market control its cost and avail-

been
As

total

^<7^^1

for those "wholesale banks" which

moving onto "Main Street."

on

picture. Those banks operating in
20^'
the decisions of the Treasury and marked growth areas have so far "sen from 0.53% to 1.20%
the Federal Reserve authorities been able to do well largely beThe resulting pressures forced
whose

Low

somewhat more than 7% on their
total capital funds.
This com-

in

investments,

fluenced to the greatest extent by

City, where this developperhaps ;-most arresting,

is

ment

1945 were off to

Even now, after the elimina¬
$26,6 billion in 1954. In the same
period,, operating
expenses
of tions, earning power of the con¬
these banks rose from $216 mil- tinuing banks as a group is curlion, to $428 million, or 98%. What rently estimated at a rate of only

1.03%

from

The price of their

so.

money

examine the fig- merged had 177 banking offices,
Cen- $8 billion gross deposits and $702

has been the impact on the breakeven
yield
of this historically

and

loans

penses

raking

Si! o™!
are un¬

sible hurdle to

see,

hx

taxes

source of funds to
borrowers.
Parenthetically,

banking is becoming
neighborhood banking.
In New

York

relate these facts to the

order to meet their

Commercial banks

primary

„

>

;

all

total

mergers.

nnH

SI
pnees.

markets

answer.

..

Street in the Bronx

trend?

banking, and

Industry generally has met to-

deposits.

mercial
■

Morris

today

the' FDIC,

us

•

^

^

'100

' Let

of *our

of

are

us

Total deposits of the

143%; deposits from $89 billion tral Reserve member group in million capital funds,
10$121 billioiV or 36%New York City which averaged
Earning Power Still

inevitable

inflation

These, factors

Again, let
ures.

total of loans and investments.
importance to analysts in weigh- We find that the average yield
ing the investment significance of • or • rate^ of interest required by
changing deposit trends
branch this broad group of banks on their

The

-charge

052* million to $2,560 million, or

has'

banking

by rising costs and

financial

times.

re¬

sources.

businesses

taxes> have risen from $1'~

Like*come

about9

come

Merger critics

banking

i

E. F. Hutton &

Company

Henry Herrman & Co.

Stern Brothers & Co.

and, from all cities,
migration to the sub¬

ones,
u

From

1940

to

1953,

the

-

i

8

The Commercial and Financial Chronicle

(2416)

Federation Bank & Trust Company
& Meeds,

New

Merrill

Resources—Book

Utah

Power

10, Utah.

&

industrial

on

Light

Co., P.

O.

80

Salt Lake City

Energy

Upham

Review—Study—Harris,
York 5, N. Y.

14

Wall Street, New

(revised)—Describing and locating
atomic activity of 97 different companies—Atomic Develop¬

ton

Securities Co.,

—

same

issue

1033 Thirtieth Street, N. W.f Washing¬

Oliver & Company, Ltd., 82 West
Street, Vancouver 1, B. C., Canada.

Hastins

Chas.

Letter—Fortnightly review of the Canadian Securi¬

1

Pfizer

Wall

40

&

Co., Inc.—Bulletin—Francis I. du Pont &

Stret, New York 5, N. Y.

stocks

Riddle Airlines,

New

Riverside

Bank

York

Y.

N.

5,

Also

available

is

memordanum

a

&

on

P. H. Glatfelter Co.

Changing

Deposit

Reprint of
M. A.

Banking,

Mergers

and

Financial

of

Analysts

Societies'

Dominion

Bank

Review

—

E.

—

Building, Toronto,

T.

companies

and

their capital

Co.—New

views—Lerner

&

Co.,

10

Post

Square, Boston 9, Mass.
—

Canada.

—

Reynolds & Co., 120

stocks—brochure—Fewel &

„

,

"Monthly Stock Digest" — Nomura
Broadway, New York 6, N. Y.
\

Securities

and market performance
National
Quotation

Bureau,

over

Inc.,

Averages, both
a

46

York 4, N. Y.

as

Knowles

&

after serving in

Forces for about four

He

married

is

New

Stores—Data—Bruns,
York

(Victor

5, N. Y.

.

Table,
BlytheCountry Club and Park Con¬

gregational Church.
He is also
very active in political and civic

SECURITY TRADERS ASSOCIATION OF CONNECTICUT
The
their

Security

annual

summer

Woodbridge,

Conn,
Scheduled

person.

to

and dinner

13-year period —
Front Street, New

Traders

(steak

on

of

Connecticut

affairs.

will

golf and

tennis

with

cocktails

at

5

p.m.

1

the

of

son

Chemical

in

the

Works, and

bulletin

same

West

Penn

data

are

EVENTS
In

&

Mine—Report—L. D. Friedman

&

Broadway, New York 4, N. Y.
Bowater Paper

Corp., Ltd.

—

Bulletin

—

Standard

Investing

..

&

Sons,

173

the

of

uate

Wharton

University of Pennsyl¬
vania, Class of 1951 with B.S. de¬

a

Bros. & Co.,

Limited

Kirkpatrick, 315

Review

—

James

Portage

Company—Analysis—Clark,
Fourth

3, Tenn.

May 28, 1955

j
,

r

Lieutenant

1st

outing

Dealers

at

the

Asso-

Ridgelea

Country Club, Ft. Worth, Tex.

Land-

Avenue, North, Nashville

Security Traders Association

2, 1955

Women's
York

June

(New York City)
Bond
Club
of
New

luncheon

2-3,

meeting.

1955

(Memphis, Tenn.)
Memphis Securities Dealers Association

annual

outing at the

Chickasaw Country Club.

ftamtrca ^ccwrities

Chesapeake Industries, Inc.

of

New York Bowling League din¬
ner at the Antlers.
June

outing at the Elkridge Club.
(Chicago, 111.)

the

wounds

received

Outpost Vegas in

Member

a

member

action

in

First

for
near

1953. He came
in 1953. He is
Grand

the

of

Rapids

BIythefield
Country Club and Kent Country
Club, Grand Rapids Rotary Club,
York Lodge F. & A. M., Sigma
Chi Alumni Club, Fountain Street
Church
and
Western
Michigan
Club.

University

Football Officials Association.

center on

years

as

vania

football

He

football letter two

his Varsity

Bond Club of

the Pennsyl¬

1949 and 1950.

field

Chicago 42nd an¬
day at Knollwood

June

3, 1955 (Connecticut)
Security Traders Association of
Connecticut

annual

summer

outing at the Woodbridge Coun¬
try Club, Woodbridge, Conn.
June 3, 1955

(Philadelphia, Pa.)
Philadelphia Securities Associa¬
tion

annual outing at Hunting¬
Valley Country Club, Abington, Pa.

ton

June 6, 1955 (Philadelphia, Pa.)
Bond
Club of Philadelphia
luncheon meeting at the Barclay
Hotel.

DEPENDABLE MARKETS

©a., %t&.

$4.00 dividend Cumulative
$10.00 Par

the

Heart

Purple

ceived

won

June 3, 1955

with

Marine Division in Korea, and re¬

team in

the years

Club, Lake Forest, 111.

(Dallas, Tex.)

Security

ciation

Brook-

June 2, 1955 (New York City)
—

memorandum—Swift, Henke &
Street, Chicago 3, 111. -

&

outing at the
Country Club.

Dallas

Curtis Companies,
Inc.—Card
Co., 135 South La Salle
street

(Baltimore, Md.)

He served as

in Economics.

gree

nual

annual

•

Avenue, East, Winnipeg,
and Royal Bank
Building, Toronto, Canada.
Crown Cork &
Seal—Analysis—Boettcher and Company 105
East Pikes Peak
Avenue, Colorado Springs, Colo.

East Tennessee Natural
Gas

Y.

June 3, 1955

(Columbus, O.)
Columbus Stock and Bond Club
side

Pittsburgh Plate Glass Co.

Consolidated Paper Corporation
Richardson

N.

Field

May 26, 1955

Ill

Cleveland Trencher
Company—Report—Loewi & Co., 225 East
Mason Street, Milwaukee
2, Wis. Also available is a memo¬

Canada

day at the Sleepy Hollow
Country
Club,
Scarborough,

Bond Club of Baltimore annual

Broadway, New York 6, N.
Y.? , ...
Chespeake & Ohio Railway
Co.—Analysis—Sutro
120 Broadway, New York
5, N. Y.
:

on

field

Co., Inc., 52

Corporation, 40 Exchange Place, New York 5, N. Y.
Chattanooga Gas Company—Analysis—Ira
Haupt & Co.,

randum

Investment

(New York City)

Bond Club of New York annual

COMING

Co., 36

Electric.

Baltimore & Ohio
Railroads—Memorandum—Bache &
Wall Street, New York
5, N. Y.

Bonanza Oil

June 3, 1955

on

H.
grad¬
School of

Vice-President,

Samuel Greenawalt. He is a

Finance,

lobster) at 7 p.m.

Members of the Arrangements Committee are: A. Mauritz
Johnson, G. H. Walker & Co., Bridgeport, Chairman; Leslie Swan,
Chas. W. Scranton & Co., New Haven; William
Rybeck, Wm. H.
Rybeck & Co., Meriden; Thomas Melia, R. F. Griggs Co., Waterbury; Rudolph Knablein, Hincks Bros. & Co., Inc., Bridgeport;
John Graham, G. H. Walker & Co., Hartford; and
Joseph Shure,
Bache & Co., New Haven.

,

'

H. Samuel Greenawalt Jr. is the

hold

outing at the Woodbridge Country Club,
Friday, June 3. Tariff will be $12 per

are

or

Association

of the Round

Lodge F. & A. M.,

field

BOWLING DINNER JUNE 2, 1955 AT THE ANTLERS
CONTACT SIDNEY JACOBS

Nordeman & Co., 52 Wall Street,

Also

has

service;, he ;attended"Grand

with the company

Allied

and

Before -entering

children.-

York

Co., Ltd., 25 Adelaide St.,

West, Toronto 1, Ont., Canada.

with

came

company,

1946

the Knights

,

Railroad Shares—22 favored
selections—survey—E. F. Hutton
& Company, 61
Broadway, New York 6, N. Y.

Steel—Analysis—Ross,

MacNaughton,. Presi¬

the

of

dent

Junior College and' the
of Michigan.. He is a
member of Grand Rapids Rotary,

Over-the-Counter Index—Folder showing an up-to-date com¬
parison between the listed industrial stocks used in the DowJones Averages and the 35 over-the-counter industrial
stocks

yield

MacNaughton Jr., son

D.

University

,

used in the National Quotation Bureau

D.

John

Rapids

Oil Profits—Bulletin—Peter P. McDermott &
Co., 44 Wall St.,
New York 5, N. Y. Also available is a bulletin on 1955 Rail¬
road Profits.

•

oldest

the

John

of

the

Co., Ltd.,

Stocks—comparative figures as of March
31, 1955—The First Boston Corporation, 100 Broadway, New
N. Y.
;
- 1
'

York 5,

banking

nearly 30 years
locally owned
firm in Western Michigan.is

and

three

issue

New York City Bank

as

Grand Rapids for

years.

7, N. Y.

Japanese Petrochemical Industry—Discussion in current

Jr.,

has been in the
business in

company

the Armed

Investment Opportunities in Japan—Circular—Yamaichi Secu¬
rities Co., Ltd., Ill Broadway, New York

61

This

-

the firm in

in

Research—"Highlights" No. 30—Troster, Singer
& Co., 74 Trinity Place, New York
6, N. Y.

of

Greenawalt

Samuel

H.

just

—

Co., 453 South Spring Street, Los Angeles 13, Calif.
Investment

Stock

announced
the appointment of John D. Mac¬
Naughton, Jr. as Treasurer and

investment

Co., 52 Broadway, New York 4, N. Y.
Co.
Analysis — Hill, Richards & Co., 621
South Spring Street, Los Angeles 14, Calif.
'
•

White Eagle Oil

Detroit

and

have

Secretary of their company.

Report

son, Hammill & Co., 14 Wall Street, New York 5, N. Y.
Southwestern States Telephone Co.—Review—R. M. Horner &

Lynch & Company,

Ont.,

Cement

Midwest

Exchanges,

King, Libaire, Stout

South American Gold & Platinum Co.—Memorandum—Shear-

Fire-Casualty Insurance Companies—A performance record of
50

&

Greenawalt, Jr. J. D. MacNaughton, Jr.

R. S.

the

Broadway, New York 5, N. Y.

convention—

Schapiro & Co., Inc., 1 Wall Street, New York 5, N. Y.

Columbium-Ttantalum

Co.,

list of
.

Inc.—Bulletin—Eisele

Sherwin Williams Company

—

address by Morris A. Schapiro at the National

an

Federation

Branch

a

Co., 50 Broadway, New York 4, N. Y.

Office

Trends,

Also available is

which have reacted.

Stocks—Including facts on 37 selected insti¬
tutions—1955 Edition—Kidder, Peabody & Co., 17 Wall St.,

i

analysis of Mitsui Bussan Kaisha.

an

Noranda—Analysis—C. M.

Market—Newling & Co., 21 West 44th Street, New York
36, N.Y.
for

is

Jersey Natural Gas Company—Analysis—G. A. Saxton &
Co., Inc., 70 Pine Street, New York 5, N. Y.

ties

Case

—

New

7, D. C.

Canadian

Or¬

Uranium
Report — General Investing Corp.,
Street, New York 5, N. Y.

Wall

tne

Atomic Map, in four colors
ment

Conklin

Also available

Shoji—Analysis in current issue of "Weekly Stock
The Nikko Securities Co., Ltd., 6,
1-chome,
Kabuto-cho, Nihonbashi, Chuo-ku, Tokyo, Japan. Also in

.

Co.,

&

Witt

Mitsubishi

'

.

Continent

Bulletin"

Atomic

Limited—Bulletin—de

report on Holly Corporation.

a

Mid

M.,

opportunities—Dept.

Box 899,

.

Petroleums,

RAPIDS, Mich.—Mac¬

GRAND

Naughton,
Greenawalt
&
Co.,
Michigan Trust Bldg., members of

.

ganization, 100 Broadway, New York 5, N. Y.
is

Area

Appoints Two Officers

5, N. Y.

— Analysis — Amott,
Baker & Co.,
Incorporated, 150 Broadway, New York 38, N. Y.

the following literature:

send interested parties

Thursday, May 26, 1955

MacNaughton & Co. j

Co., 1 Wall Street,

Mead, Johnson & Company

mentioned will be pleased

that the firms

understood
to

Laird, Bissell

Shoe—Analysis—J. C. Bradford & Co., 418 Union St.,

Nashville 3, Tenn.

Recommendations & Literature
is

York

General

—

120 Broadway, New York 5, N. Y.

General Gas Corporation—Report—Cohu &

Dealer-Broker Investment
It

Bulletin

—

..

.

Bond Club Exchange
Offer Oversubscribed
The Bond Club Stock Exchange

offering of 2,500 shares has been
oversubscribed
and
the
books

closed, it

was

announced by Gil¬

Wehmann, White, Weld
chairman of the committee
in charge of the issue. Trading in
the shares will be a feature of the
Bond
Club of
New York Field

bert

H.

& Co.,

Day at the Sleepy Hollow Country
Club

on

June 3.

Bonanza Oil & Mine
Producing Quicksilver Mine

N.A.5J)

Preferred
Broker and Dealer

Common

—

$100 Par

Trading Markets Maintained
Material and Consultation

Inquiries

Invited
>

Tkoster, Singer
HA

2-

2400

Members:

74

N.

Y.

Security

Dealers

& Co.
Association

Trinity Place, New York 6, N. Y.




on

Report

on

request

Japanese Stocks and Bonds
without
NY

1-

376

61

obligation

L. D. FRIEDMAfi & CO. Inc.

Broadway, New York 6, N. Y.
Tel.:

BOwiing

Green

9-0187

Head Office Tokyo

DEMPSEY-TEGELER & CO.

52 Broadway,

New York City 4, N. Y.

Telephone Dlgby 4-0360

Number 5432

Volume 181

..

(2417)

The Commercial and Financial Chronicle

.

Increased Supply

The Anatomy

of Bond Prices
City

Publicity Manager, Hemphill, Noyes & Co., New York

of

impossible

for

many

could not pay

they

because

sues

attractive dividends. And the con¬

tinuation of the high tax on cor¬

revolutionary political ideas introduced in 1933 have
profound changes in
4

bonds,

bonds, and have resulted in greater demand for bonds by insti¬
tutions and reduced demand by individuals. Points out taxDescribes the

course

a

price of

which

within

■

r

nicipal

mu-

bonds

fixed

are

within

supply
the

by

and

demand

money

since

And

economy,"

the

the

whole

the

is

market

money

circulatory

been

have

ris-

of

but

important

exterft

small
their

a

and

way

every^her ureTf
y

by
y

_

,

possible to understand

It is not

bond prices
at
any
particular time without considerIng the relation of the money supply to the demand fbr credit from
se
Government, from farmers,
from
the construction
industry,
from the automobile industry and
municipal

from

borrowers,

business

other

all

from

borrowers,
borrowers, and

mortgage

Instalment

from

And then it is necto
know
whether
the
supply is being increased

speculators.
essary
money
or

decreased either by the natural

change
by official finanpolitical policies.

ebb or flow of business, by

velocity,

in

cial

or

or

iUiother

.m°st l

sideration

yield

P

J-ant conof

the

trend

i.e.,

is

curve,

the

.the

incipient

changes m the relationship between the yields of short and long
maturities.
It would be unwise

necessary

The

here.

it

discuss

is not

it

but

ence,

w|j:ich :far two generations had

Jj°ns Jto that of the solvency of

^g^eTthJ preference

subject

t?c'c

are

than

lower

times

they

are

long-term,

higher.

.^on? }r\uan

•

by
be

stiffer

some-

\eave s ar~

ties illustrate the point:

waning

die-hard

The

dollars.

the

of

value

conserva-

tjveS) wh0 still wanted the "promise to pay," were finally discour¬
aged by'the official low interest
what

below

bonds

from

the return

which reduced

policy

they

could accept,

Today, "balanced fund" investors include bonds in their port-

able

duu
tells

witn

the

and

lost

their

careers,

droops, prices

A

slight recovery on the
record a boiiing marAnd then
again there are
periods when the average
may

much

as

as

there

is to

the

nature and the volume of tax-

influence

exempt issues have been internal

bonds

comes

from

ber of investors not any

certain

except

public

the

num¬

and

long

-

intimate

these

of

crash

depression,

1929,

wars,

holiday,
dared
one

of

March

7-12,

1933,

And

stocks.

courage

on Feb. 14,
April 29, 1955.

1.29%
on

loans, or even

The

May
was

and credit-worthiness
borrowing in anticipation of
better days ahead and were paying good stiff rates. Moody's aver-

were

1946 to 2.40%

of

path traced over the years

the

by

each

averages is

with

course

others of its

own

competes

a

ability.

With

pened.

type in its prom¬

ise of safety, return,
many

mild

municipal

several

bond

dramatic, but it is only
.

...

issue

municipal

,

reminder

The

real

'
of

,

market

'

.

.

what

hap-

age

yield of 120 corporate bonds

nef,!,,V
The

triple B was

^

from
2 °*

money

"> ,, .
.
supply, i.e. all bank
.

and currency, had deany clined from $55,776,000,000 at June

at

deposits

time, the current demand for sic-

investors the

30, 1929 to less than

tual

and market¬

scales

distinguishing advantage,

$43 billion

on June 30,

supply,

is

of the

by

recorded

new

issues

the

1933, a drop of 23%.
Continued on page 30

they

as

$5,160,000
i

Northern Pacific Railway

Equipment Trust of 1955, Second Series

gajs>» am0ng which the trust departments choose tax-exempts to
iye tbe beneficiaries a "spend*ble„ income better than-they
wouid have left from corporate

3% Serial Equipment

Trust Certificates

(Philadelphia Plan)

after taxes,
»

.

newer types of
for

■

•

.

To

tax-exempt
incomey Tor

To be

'of
corporate

because many

them yield as much as

mature

$344,000 annually on each June 16, 1956 to

guaranteed unconditionally as to payment of bar value and
Northern Pacific Railway Company

dividends by endorsement by

(Accrued dividends to be added)

1956

April
tions of debt,
1«»29
194G
'Institutional Demand

3.05%

1966

3.125%

1962

3.10

1967

3.125

2.80

1963

3.10

1968

3.125

1959

limita-

1961

2.65

1958

in the case of School Authori¬

2.50%

1957

enjoy special facilities without
having to pay taxes for them or,

legal

1970, inclusive

MATURITIES AND YIELDS

ciude turnpike and various other

circumvent

2.95

1964

3.10

1969

3.125

3.00

1965

3.10

1970

3.125

I960

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 of these

Aaa

.4.77

bonds.

Corp.

S3
2.46

♦Average.
-

term

rates

had

But

long-term.
was

short

1930

been higher
than
the old pattern
changed, first by the depres-

usually

which

sion

reduced

short-term

borrowing to the minimum,
by

a

then
influx
of gold
1933 and 1941) which

heavy

(between
—7HT~

»

j

mZSEi SEgSj
29, 1955.

to

amounts

Before

pay
of dollars

regardless

**•

.




o

HALSEY, STUART A CO.

of

their value,
R. W. PRESSPRICH

Institutions take a greater pro-

portion than formerly of all new
bonds
other than Governments,
Also
the
enormous
increase in

BAXTER, WILLIAMS &. CO.
IRA HAUPT&CO.

their purchases, in dollars, has en-

Authorities, and corporations to market
.an annual volume of bonds, more
Nye„MvT°ct.lApn1 than four times as great as 20
t.

The

2oTearsThTdemand°for bondsTf
tUt&JTSSSOC
gate(j
out only fixed

years ago.

INC.

L. F. ROTHSCHILD &

&. CO.

FREEMAN &. COMPANY

THE ILLINOIS

McMASTER HUTCHINSON

May 26. 1955.
-

\

CO.

GREGORY & SONS

WM. E. POLLOCK&,CO.,

COMPANY

incorporated

abled local governments,

*

de-

by President Roosevelt as
his first official acts. By

—

obligation municipal
bonds for themselves, but large
amounts are bought for their
benefit by the trust departments

as

year. Industrial production,
turned up timidly from July 1932.

°us

Buyer's Index of twenty 20municipal bonds has ranged
from
5.69% on May
1, 1933 to

general

bonds

•

of 1933 industrial recovery
beginning in its slow oldfashion way.
Companies with

corporate bonds, mortgages, com¬

one

,

,

year

must

mercial paper, bank
with

.

.

Bond

compete with at
few other forms of invest¬
with Government and

a

.

„

^he *ow ? s
rPfuCes
heen passed m June oi the previ-

inflation, the cold war, and the full
employment act, it still is startling to see on the chart that the

a better bargain in some
form of debt paper.
Every

least

ceb^

cerned

,

,,,

market

stock

the

of whom,

funds

gloomy event was entirely
and 0f little interest exthose immediately con-

i0gjcai

have learned,

we

,,

all

hazards

they see

issue

-pbbg

and have

can

Recovery was hampered by widespread bank failures and the solprice vency of all banks was finally
in mind and remembering called into question by the bank
.

specifically restricted trust funds,
are compelled to buy municipals if
other

prjces sank to their lowest level,

What the Chart Shows

limited

a

we

1933
h 1933 mullicipal bond

Qn May

cerned

tax-exempt

for

demand

be callecl ttle money market-

of

element

folios, and no doubt there still are
some private investors who buy
corporate bonds,
Relatively
few persons buy

to

lko^lj9ISP ToS
^T:
:

tell,

*°U™ing the+ aYerage1 and *eT
J?! %
P?StlL
\S clear that

can

about

psychology, inseparable
from
anything
with
which
human
beings are con-

Specialized Demand

Juiy

v

the average

there still remains that unpredict-

fertilized

been

what

pondered

borrowing rates.

The-

ment

being worth more paper

have learned all

and may perhaps
in
any
period of

jet_the-user-pay issues, invented
to meet the wish of communities

These fig-

sudden

now

With

could at least re-

the

and

money

curtailed

fr^m fixed-income,

d0nar by

has

issues

easy

swung

rates

interest

short-term

times

chart

mimim'nai

nf

nri^e

bonds of similar Zrade- These in"

of April

ir Review

c

and

have been slashed in desper-

ation.

noou-

now that the con¬
welfare state is gen¬
erally accepted. The annual crop
of Authority
and other "volun¬

which

1?
11,

Suffice it to say that some-

1955.

fortunes

where
may

s

cept of the

stocks

to
is

% ruf ffv

Coin his "Review" of April

endlessly

features which

internal

governments,

vesfors

fixed-principal debt obligations to

RobTrf VaT'yc1eave°nAssistant peculation)
n

of in-

cities

the

toward

trend

new

overlook this price influ-

to

ever

thing to link

which have made

events

the part

a

on

story has to be hung
And an average is

tne

average.

men's

brought about by the wars, by the

of banks. Many old trust instruments restrict purchases to "le-

Yield Curve

The

talk

do

tho

for chiefly by the
astonishing growth of population
and the shifts of population

tary"

reduced the risk of such obliga-

"body-economic" in

to the

Private Investor Demand
The revolutionary political
ideas introduced in 1933 have produced profound changes in both

local governcontribute

Authorities

and

ments

of

bonds

of

sale

artery.

one

funds

the

trend toward the

old pattern.

Nevertheless,
borrowed through the

branching off of capillaries at the
end

long-term

a

Possibly there

somewhat.

tened

*he demand for and the supply of
bonds.
inf wish of private investors to
°1^vn bonds was first impaired by
the nullification of the gold clause,

system. Within it the market for
tax-exempt bonds is only the last

fit

an

listless

a

{TcaUed'the TTyTarkT ™

life-blood 1 of
Cook

E.

Elizabeth

prices,
on

production, department store
sales, the willingness to borrow.
We try to guess what Congress
were priced 0.75% and 0.80% to
away
from them, and by the
2.45%-2.65%, but similar maturi- development of new industrial may do. We discuss the next
ties of the recent issue, on April centers. Also it has been
Treasuiy financing, and study the
aug¬
13, 1955, were offered at 1.00% to
weekly bank statment to see what
mented by the number and cost
2.55%. The yield curve has flat- of services demanded from local the Fed is doing. But, when we

rates

short-term

is

market-

However, since there is no feasway
of charting new issue

ible

determinants of price. But also
in the course o£ the past 25 year3
munlciPaI bond Prices have been
Powerfully affected by taxes, by

ing. For example, new Housing
answer
may Authority bonds maturing one to
be found. The 40 years in the March, 1954, sale
of

of basing its

comparing their "at in g their
credit thfirscarcity their
laritv the trend of their financial
strength
Then descending from

the shining

prices

to

over

We, members of this group,
and

000,000 of 4% preferred stock, it
must have $833,333 of profits, to

mu-

a

made

along. No group would think
bid on an average,

come

of tne buyers

annually for interest charges be¬
fore taxes.
To take care of $10,-

nicipal bond? The money market?
Demand and supply?
Yes, those
six
words
define
the
area
of

income

Federal

outweighed

change of preference

swelled the money base, and finally by the war-time theory that
pay the 52% tax of $433,333 and
interest rates must be kept low
leave $400,000 for dividends.)
for the benefit of the Treasury.
The large increase in the yearly
search, the
In recent
months long-term
output of tax-exempt bonds can
haystack rates have changed very little but
be accounted

fixes the

What

be

(An issue of $10,000,000 of 4%
bonds costs a company $400,000

limited number of investors.
of municipal bond prices since_1933.

demanded by

exempt bonds are

C

on
taxes.

before

deducted

which is

interest

the

be

can

municipal, and Authority bonds is
arranged months in advance. Issues, may be withdrawn
or they
may not get a bid, but they can t

porate profits makes it advantage¬
ous
to secure new money from

produced
both the demand for and the supply of

from

by a
larger apparent or after-tax yield
or
by the prospect of a quick
profit.
Also the demand for tax-exempt
bonds, or for certain maturities
of them, can be ballooned or collapsed by a change in oificial
policy.
But the supply of state,

taxes,

companies to finance by stock is¬

n&imicipal bonds. Explains die yield curve and the interplay
short-term and long-term interest rates.
Points out that

of

it

made

prices

Miss Cook discusses the various factors which influence

by

corporations has been enormously
increased
by
the
Federal
tax
structure.
The excess profits tax

ELLSWORTH COOK*

By ELIZABETH

exemption

The supply of bonds put out

9

&. CO.
.

INC.

The Commercial and Financial Chronicle
10

the most important sector; of
v : /

up

the economy.

How to Fear Prosperity
Mo.

Trust Company, St. Louis,

Economist, Mercantile

As

Mid-Western bank economist

T do not know how many proTamionrt economists are in my
Diiiem e but I am certain that
there

e

e

great

a

amateur

many

tn.es. Unfortu"natel y, the

econo-

3111st

al¬

is

i

11

aire

are

//ways

com¬

unfav¬

pared

orably with
i
accurate
:ecast which

should

It

made.

difference

the

at

v

George W. Coleman

amateur

me
-s

.

amateurs and the

be realized
between the

professionals is

great as the professionals
\ '-mild like to believe. Every busiT'/sman
in
this
room
is
an
i mateur
economist and he uses
...

t

as

V
*

to

guides

expenditures.
3 .i uses guides familiar to him.
; :'»mie people use weather cycles.
ae of my doctor friends who is
'f
v sychiatrist forecasts the trend
business activity by noting the
.1,
nber of his patients who are
capital

make

'.i

as

"sustainable

a

rate

of

altogether satisfac¬
Farm income is expected to
on

capita
stable. 'This
per

a

in part to the fact
prices are slowly de¬
According to available

farm

clining.
indices, the Corn Belt is suffer¬
ing relatively larger decline in
income than some other regions
because

levels

prices are at lower
they were one

hog

than

now

It should be pointed

earlier.

year

that the decline in

out, however,
farm

income

farmers

in

who

that

argue

still

the

leave

relatively
sound
position.
For those

worth

net

will
a

we

may

have

a

growth."

economy

grow

can

that the
rate over

us

at a

short period more rapidly
be sustained
over
the

than
long
period. More productive capacity
can be added/ more facilities con¬
structed, more equipment built
a

to

seem

depression
in

crease

'

reemployed. He has a pretty good
'} dex, according to his own judg¬
ment,
because
he
deals
with

is

$1

almost

to

amounted
which

the

recorded.

highest month ever
Mortgage lenders have
maintain

will

which

builders

to

commitments

made

March
billion

in

awards

contract

high

this

level.
There is

some

skepticism about

whether the housing boom can
maintained.

It

has

be

widely

been

the

can

March

of

alone

there

almost

of

$425

million for automobile purchases.
Since

the

rate

in

creased

of

selling has in¬

April,

is

it

probable

declining

are

in

reached

severe

no

II

level

the

from

the

War.

Korean

We

have spent tens of billions
lars

in

adding

our

factories

and

we

of dol¬
equipment to

new

in the last

10

years

be coming to the end

may

of that process of

expansion. The

conditions for the traditional post¬

be used under conditions

can

of normal

to

growth.

maintain

ard

of

and

living

raise

for

the

stand¬

increasing

an

as

increase

an

War

war
depression could exist at al¬
Normal growth most any time, but that is not to
is also a difficult concept to de¬ say that I am forecasting any such
fine, but studies indicate that the decline. What I am attempting to
do is to remind all of us that they
economy has grown at a rate of
about 3% per year over the last have occurred in the past and they
"
several decades.
Without giving may occur again.
a precise definition, it is clear that
Great store is set by the fact
a
rate of
growth of about this that we have developed built-in
figure will be required in order stabilizers to curb depressions and

than

farm

month

was

As

depressions.

undergone

World

number
of
persons.
A rate of
the result of the de¬
income, it might growth substantially above this
be well to point out that,'while it figure over a long period of time
is still an important part of our may result in a sharp decline in
year,
we
may
come
close to society, agriculture is not as im¬ production later. Such a rapid
breaking the all-time level of
rate of growth would probably be
portant relatively as it was in
sales reached in 1950. Some peo¬
accompanied by speculative ex¬
1929.
cesses
in building, inventory ac¬
ple believe that we may sell seven
There is also another reason for
million automobiles in the current
cumulation, new construction and
feeling some concern about the
other activity.
year,
although I am somewhat
./"■/'
economy.
Durable
goods,, non¬
more skeptical.
Such
a
rapid increase might
durable goods and houses are be¬
The home building program is
ing sold to consumers on. the basis very well be financed by an ex¬
continuing at an extremely high of "so much down and so much cessive expansion of credit, and
rate. There is apparently little re¬
the
monetary authorities of the
per month."
The debts are all to
straint offered by a scarcity of
be
amortized; the consumer is country have set themselves to the
task ' of
mortgage money, and it would ap¬
attempting
to
limit
a
mortgaging
his
future
income.
credit expansion of that magni¬
pear that a high rate of housing Some idea of the size of the con-'
starts will be maintained during
sumers' debts can be gained from tude. It must, therefore, be real¬
ized that the persons who make
the remainder of the year because the
fact
that
instalment
sales
forecasts
of
the level of contract awards is so
rapidly
expanding
credit now totals $23 billion.
In

would

income

of

ad of business activity

\

?

been required

more

forecast the
in order high currently. The F. W. Dodge
at he can buy inventory, plan Corporation indicates, for exam¬
arertising and selling programs, ple, that residential construction
rtain

«

Thursday, May 26, 1955

.

yet we
postdepression.
Our
economy has
been sustained by
the "pent-up" demand from con¬
sumers
and by the Korean War.
It
is
relatively clear that the
/'pent-up" demand has been sat¬
isfied and
Federal
expenditures
have

that, although sales will
be lower in the second half of the

they

hi eh

.v.

1/

.

severfe

indicate

record. The
lii i s takes

•

are,

not

are

although

that

production industry was de¬

level

the

on

There

waaKrtess.

decline is due

stroying individuality should take
a new look at the color combina¬
tions now selected by buyers for
new
models.
The current high

imlged in b y
t' e
rcofes-

ways

have

rosy one,

basis it may be more

cause

mass

Torecas1 ing in-

r'cna1

carry

and "one
fairly, hafd to find
a

decline still further in the current

types of cars be¬
buyers want to take advan¬
tage of the different color com¬
binations offered.
Those people
who bemoaned the fact that the
to

of

year,

the next."

dealers

that

to

think, obvious to all of

tory.

incmse will undoubtedly diminish. Conand "in one stage of the busi¬

;

of the profes¬
sional/economist, this is referred

•Which

look

to

points

tludes situation bears watching

cycle it is wise to prepare for

relatively rapid rate.

a

Like most concepts that
are clear and obvious, this one is
difficult to define precisely pradoxical as this may seem.
It is, I

has

"extremely favorable at the
moment" Points out, however, that some economic develop¬
ments, such as the decline in farm income and the rapid
,growth of indebtedness, are not altogether satisfactoyV Holds
i:he expansionary movement is likely ^ go On for some time,

ness

at

the, iaTlguage

however,- economic developments

reviews current economic situa¬

finds business trend is

although the r2,U

In

the pic¬

stated initially,

was

ture is indeed

tion and

at this level is the

grown

Satisfactory

Not Altogether

of business rem/iiriiiig
fact<tl5t it has

possibility

,

Some Economic Developments

COLEMAN*

By GEORGE W.

'

.

(2418)

business
the

must

take

into

account

policies being followed by the

it must be admitted that

been
two

ployment
insurance,
tax
relief,
public works, monetary policy all
work

together to maintain aggre¬
demand in the face of de¬

gate

clining employment and industrial
activity. The record of success in
two postwar recessions is one
of
which
this
country can
be

the

proud. It is, however, equally im¬
portant to remember that these

techniques have not been tried in
the

of

case

pression
will

be

in

business de¬

severe

a

how effective

and

be

such

they

remains

cases

to

Theoretically, they should
relatively well — but much

seen.

work

remains to be

seen.
7L,

There is

•

.

•

•

i

,

point which I think
in this dis¬

one

should be emphasized

cussion

that

and

the factor

is

of

population growth. Much has been
said

authorities. It is their
curb dangerous

monetary

they have

remarkably successful in the
postwar
recessions. Unem¬

the fact

about

that the

con¬

tinued

task to attempt to

growth of the population
will
be
an
important factor in
maintaining a high level of busi¬
ness
activity. It should be em¬

excesses.

It is almost always possible to
the end of the year, criticize unfavorably and to dis¬
phasized, however, that this will
mortgage credit on homes was parage the actions of the monetary
be true only if per capita real in¬
believed to total about $77 bil¬ authority, which in this country is
come
is maintained or increased,
the Federal Reserve System.
It
lion, a large part of which is being

that another

ported.

will be

re¬

There

increase

are

At

amortized

monthly.

people who are concerned because
these obligations represent such a

however,

must,
that

be

this

and

remembered

is their task to

it

not

does

follow

auto¬

matically from an expansion in
the population. If it did Asia with

attempt to

curb inflationary excesses and this

its population of hundreds of mil¬
marginal people who are the first observed that new housing starts
large portion of personal dispos¬ is never popular. But the conse¬
lions would be substantially more
; /lose their jobs. The techniques
of speculative excesses
able income.
are running at a rate almost dou¬
It is felt that buy¬ quences
i sed
wealthy
than
the, rest
of
theby the amateurs not infre¬ ble the estimated rate of
family ing will slow down in the future have never been popular either,
world. As you know, they live just
quently yield extremely good re- formation. It should be
pointed while individuals liquidate their and it is by attempting to skim off
above the starvation level.
£kilts and it is frequently possible
some of the boom that they hope
out that there is some danger of obligations.
to
make
invidious
comparisons
The experience with amortiza¬ to lessen the severity of the de¬
a - statistical
discrepancy in the
Summary
with the forecasts given by prorate of family formation, but it is tion of outstanding consumer ob¬ pression which normally follows.
In summarizing this speech, it
l.ssional economists. The profes¬
There are, of course, critics of
also important to know that the ligations during the Great Depres¬
sional economists normally base
this monetary policy who say that would appear that emphasis has
figure
quoted is for non-farm sion of. 1929-33 was excellent. In¬
been given in this period of pros¬
their forecasts upon the study of
it cannot be done or that there are
housing starts. Inasmuch as there deed, one authority has stated
it much larger number of statis¬
no
men
intelligent enough to at¬ perity to the factors that might
is a substantial movement of fam¬
that, in terms of loss, consumer
tical series, surveys, reports and
ilies away from farms into the credit
loans
were
safer
than tempt it. It may well be that it cause business to turn down. It
historical comparisons.
cannot be done perfectly, but even
cities, it may be that the demand money in the bank. However, as
might well be regarded as a short
the volume of instalment credit an imperfect performance may be
for non-farm housing units is in¬
Business Trend Extremely
course in how to fear prosperity.
Favorable
increases, it may not be so safe. preferable to the tremendous de¬
creasing.
flationary crises which this coun¬ Emphasis has been given to the
There are other reasons for sus¬ This is especially true if/in order
Regardless of the standards
which might lead
to make sales, individuals in the try has suffered. A far more basic factors
to a
which you may use, it must be pecting that the level of housing
criticism rests
in the fact that
lower income
decline because the amateur and
groups
are
being
indicated that the trend of busi¬ starts may not be too high.
In
there is a danger of over-empha¬
ness
activity at the moment is the first place, families are in¬ encouraged to obligate too large
professional alike, who attempt toa portion of their incomes.
Under sizing the importance of monetary
extremely favorable.
The total creasing in size/ More than four
forecast : business
activity, must
these
circumstances,
unemploy¬ policy in maintaining a high and
production of goods and services million babies were born last
stable rate of growth. While it is watch
ment or even temporary seasonal
any one stage of the busi¬
.in the economy is undoubtedly at year and statisticians indicate that
an
important factor, it is not the ness
shutdowns which lead to unem¬
cycle for the appearance of
an
all-time high. Unemployment -the number of children per family
only factor to be considered.
those factors which are likely to
■seems to be
decreasing, although is increasing. This requires big¬ ployment could provoke a rash of
It
is
defaults
with
necessary,
therefore, to
disastrous
conse¬
there are certain distressed areas, ger
houses.
It should also be
lead to the next stage of the busi¬
quences.
If this were to occur, consider whether or not we are
especially in the coal fields of pointed out that the average fam¬
the next depression might be re¬ growing at a rate that is sustain¬ ness cycle. It is, in fact, a way of
southern
■

"West

nois.

Illi¬

Virginia and

The trend of prices is rela¬

tively stable, resulting from a
■balance between the decline in
agricultural commodities and the
increase in industrial commodi¬
Personal income is

ties.

level
able

now

at

a

of $295

billion, and dispos¬
personal income — the

amount left

over

after taxes have

ily

three or four times and
migration is also providing

moves

this

demand for homes.

One of the most important fac¬

in

tors

determining the trend of
business activity is the level of
expenditures for plant and equip¬
ment

which

are

business

the

to

be

made

community.

The

These

expenditures declined last
from the peak reached in

of

paid—is at an annual rate
billion. These figures
at all-time highs.

are

The

sale

automobiles

of

to

in¬

dividuals is running at phenome¬

nally high rates, and I have been
told

that

of

some

in the motor

car

the

economists

industry

are

at¬

tempting to explain not how many
cars are going to be sold, but why
they are selling so many cars.
The

stocks

of dealers
to

800,000.

of

are

cars

in

probably

One

reason

♦An address by Dr.

the
now

hands

close

for this is

Coleman before the

Salary Club, Quincey, 111., May




10, 1953.

decline

amounted

by

to

year

1953.
about

initially it had been ex¬
pected .that
a
further
decline
would take place in 1955.
The
vigor of the recovery movement,
however, has brought about an
upward revision of these figures,
and it is now expected that 1955
3%

and

will

be the year

expenditures
level

reached

penditures

are

in which capital

will
in

surpass

1953.

These

the

not

imply that

Amortization

the

way,

my

purpose

such

a

to

try to

depression

because it

seems

is

al¬

most certain that for the next six

able and whether

This

or

not we have

level that is sustainable.

a

not

it should be
emphasized, that there will be no
declines; it means simply that
there will be no severe declines.
does

taking

stock

about

what

might

occur.

mean,

To

immediately

reiterate,

outlook

remains

favorable;

parently the expansionary

the
ap¬

move¬

people can com¬ ment is
likely to go on for some
plain of the declines in industrial
time, although the rate of increase
activity which took place in 1948undoubtedly
diminish.
To
49 and 1953-54. It was apparent in will
the 1920's that we were growing at have stressed, as I have, some of
fact that
six - months ago
most
much
too
rapid a rate.
Excess the weaknesses which
analysts foresaw no increase of
may
ap-:
the vigor and magnitude which capacity was being created rapidly
pear
is not to exhibit any less
and one of the consequences of
we
are
now
experiencing.
This

months

there

will

be

sharp
decline.
The difficulty of saying
this with any degree of certainty,
however, is emphasized by the
no

Certainly,

few

that

was

-

fact

alone

ateur

and

should
the

give the am¬
professional alike

hesitancy
about
making
even short-range forecasts.
Sud¬
den changes, such as the ones we
have experienced, could reverse
themselves just as quickly.
some

policy

sion

of

the

the severe depres¬
1930's.
It
may
be

to examine our
current rates of growth to deter¬
mine whether they are sustainable.
necessary

again

confidence in the business picture.
is

It

a

Severe

Depressions

an

in

times

war."

effort

to

hold

the

in perspective. There is

maxim

"in
About

just

economy

military science that

of

While

peace

the

for

prepare

science

of

eco¬

.

ex¬

plans of business men who make

as

reached

is

under

Can

important because

they reflect the anticipations and

to

Crisis.
It

been

$260.5

ferred

the

Rate

of

Growth

Be

Sustained?
One of the important aspects to
be

considered

in

examining

the

Finally, a word ,or two about
depressions
may
be in
order. I do not know whether his¬

severe

tory repeats itself, but in the past,
great wars have been followed by

nomics has few maxims, one might
well .be
the

coined:

business

prepare

"In

cycle

one

it

for the next."

is

stage

of

wise

to

Number 5432

131

Volume

.

.

(2419)

Chronicle

The Commercial and Financial

.

Through
Saving and Capital Formation

Economic Expansion

shall

Such

individual
only spend more but also

Upgren points out that because, of rise in

Dean

of

rate

the

we

..

is

credit

economic

as

equal

abundance

an

of tools,

Despite this leveling of income,"
savings of the.American peo¬

the

and"

horse-power
in

the

of

the

work-]

i

n

1

■

a r

i

g

Probably today

directed.

savings

two-thirds of all personal

en-

with
plan for

is in conformity

his/

n g

institutionallyat least

increasingly

man,

g

greatly/

;

also become

sustainedi They have

hands

well

extremely

been

have

ple

family

some

or
worker
saving in¬
output, pro-,; volving such things as payroll
ductivity a n d deduction, repayments of debts,

standard

of

that

From

secure

enlarged

upgren

out¬

put

Arthur R.

also

we

purchase

since

In

subsistence.

That

margin

is

sav¬

reserves.

of these meetings

have

of the National

of Mutual

Savings

able
■

mulated

book

by

marched

the

across

$4,000

in

income level

the past
10 years and there is now a rising
tide marching across the $5,000 in¬
family

come

level.

Only two

economic

our

tieth

by

the

future,

told

Century Fund

1960

weeks ago
probing of

excellent

another

in

average

Twen¬

that

us

family incomes

will be well in excess of $6,000.

-

with passage across
the $4,000 income'level, Americart
families begin to experience for
the first time the joys of "discre¬
tionary spending" and the ability
to
have
sustained savings
pro¬

The discretionary spending

by families involves the purchase

ments

likewise

and

I have

The

capacity

to

the

remark¬

despite great progress even
toward an absolute equality of in¬
come distribution. I think a word
of caution should be sounded here.

reporting

the

a

National

few years ago to
Eco¬

Tor

.Bureau

Chairman, Dr.
Arthur Burns (now Chairman ot
the President's Economic Advisory
nomic Research, its

showed that from 1929
to 1947 we in the United States
had
moved
55%
of
the
way
Council)

absolute

toward

in¬
States,
other Communist
equality

this

may

not in Russia or

that

countries,

we

well

been

most

may

fact, the economic decline

be characterized by 'some net
repayment of debt as the late Will

managed.

of

have seen the

greatest "social revolution of all."
It is this process of progressive

us

finance

that

an

which

is

natural

both political
10

years.

Can

we

our economy can

economic

the

expansion

objective of

parties for the next
„

.

now

so

manage

further

plore

clumsily said,

be

is

expansion. It

going to be debt
true we have a

an

intelligent approach to Lester, Ryons & Co. announced.
have Wm. D. Witherspoon, of WitherI pri¬
spoon & Company, Inc., has been

expansion or do they
the inconsistency of urging
vate economic expansion of
duction
and
at' the same
debt

is

pro¬

given these details of

/ This announcement

is not an ojjer ojsecuritiesjor sale or a

May 24, 1955

This was

511,660 Shares

comprehended
by
a
large eastern bank which devel¬
oped a system of borrowing rather
akin to a revolving credit for the
consumer
wholly comparable to
It

was

ture

The

Potomac Electric Power

such

use

of

Danes,

who

are

Common Stock

consumer

best explained

was

to me.

Par Value

in

not

effect

in

which
Denmark,

to me that savings are
higher with a consumer credit
plan than without one. In fact, a
proved

the

for

plan

starting from a

The Company
.

•
-

Share

is issuing to holders of its outstanding Common Stock transferJune 7, 1955, evidencing rights to subscribe for these

able warrants, expiring
shares at the

price set forth below,

Common Stock may

of consumer
"savings plan
negative position."
a

all as more fully set forth in the prospectus.
underwriters as set forth in the prospectus.

be offered by the

Subscription Price to Warrant

savings plan is purposeful
because it is tied to the purchase
Such

per

use

really

is

credit

$10

thoroughly

conversant with our plans,
are

Company

,

in Denmark that the na¬

of

credit

of

solicitation oj an ojjer to buy securities.

the

a

$19.50

per

Holders

share

goods.
Economic
When

we

expansion,
volves

a

now

such

Copies oj ihe prosper!tis map be obtained Jrom such oj Hie undersigned (who
!he underwriters nanicd in the prospectus) as mag legally ojjer
these securities under applicable securities laws.

Expansion
turn to economic

expansion

are

in¬

larger development of all

low interest rates, and kinds of goods and services. Sev¬
rent control, which eral
estimations
have
recently
most high incomes been made of the possibility of
like the $23 million untaxed in¬ such economic expansion in the
come of Andrew Carnegie in
the next 10 years. The most widelyyear 1900. The shearing-off proc¬ known and respected estimate is
ess
of
President
Eisenhower
actually lowered, in the 20- that
year period after 1929, the average which was first made in a public
incomes of the richest 5% from address delivered on Oct. 27 of

income tax,
for

while,

a

sheared

This estimate President
repeated in his Eco¬
nomic
Report of the President
given us the massive markets in
the
United
States
which
have made to the Congress in January
made our business system and our of this year. In that address he
business performance in the last said: "Our country can within a
decade
increase
its
production
*An address by Dr. Upgren before the
from a current
annual level of
This

35th

leveling

Annual

Association
Atlantic

last

-

of

incomes

Conference

of

Mutual

City, N. J., May




of

the

Savings

has

National
Banks,

16, 1955.

year.

Eisenhower

about
or

$360 billion to $590

more,

billion

with the figures express¬

Alex. Brown & Sons

Merrill

Folger, Nolan-W. B. Hibbs & Co.,

Lynch, Pierce, Fenner & Beane

Ferris &

Company

Mackall & Coe

:

Johnston, Lemon & Co.

Dillon, Read & Co. Inc.

off

$13,500 to $8,994.

This

important structural change

assuring

Rogers

it proves that if there
be economic expansion there

is in the United

It

comes.

-

a

great bank liquidity which is the

the

may

recently

able

In

debt. In

decline

to get

management has retained for ua a

bring a
cessation to the increase in private
economic

to

assets

as

can

revolving credit for a business.

in

addition,

In

of

and

the lines of an agreed

ple choose to save today.

expan¬

save-

States Jhas 'been

United

fall far more
the total Federal
thus enlarging the

debt.

Federal

explanation

productivity

in which the American peo¬

way

great economic contractions.
-

is to

of a modified guar¬
annual wage program.

anteed

causing

for

All

beginning

of course, it
potential for

the

great- economic

inducing
sion

it

with

has

tax. revenues:, will

rapidly than
expenditures,

educational job

debt in such a
thoroughly man¬
ageable debt. Despite the work
required of our Treasury officials
in Washington the Federal debt

economic

be

relate

to

liquid
way

decline instead of expansion, total

1945.

but I hope

pay

only

funds

such

as

make along

of durable goods, and

carries

this purpose—10

for

there

an

time appointed Field Day Chairman.
choice as to'
Members of the Field Day Com¬
ranteed
urging total debt repayment? Of
where we may have the debt ex¬
be agreed to in future collective
course,"debts are going to be re-' mittee include John L. Herrick
pansion take place. In fact, we
bargaining contracts. I put this have chosen since 1945 to have paid by different individuals but" and Deeb E. Peter, of Blyth & Co..
matter in this way because while
there are going to be more in¬
our
own
publicly - held Federal
Inc.;
Robert L.
Lindstrom, of
we
certainly
cannot expect to
dividuals incurring more debt as;
debt actually diminish and ourAmerican Funds Distributors, Inc.;
have any fully guaranteed annual
such
partial payments may be
private debt greatly increase.
Albert W. McCready, Jr., of Revel
made. Only in this way can the
wage
for major industries, we
In fact, we have an instrument
probably shall have some devel¬ of automatic built-in flexibility standard of living rise in the next* Miller & Co.; Norman S. Pearson,
decade
when
President Eisen¬ of Bateman, Eichler & Co., and
opment of increases in labor com¬
really to assure that one or the
pensation flowing into funds to other of these forms of debt—pub¬ hower declares we can have a
David
C. Pearson, of Bingham,
begin a modicum of payments, lic or
private debt—is certain to $150 billion gain in output and Walter & Hurry, Inc.
over
and
above
unemployment
the standard of living.
grow. That instrument of built-in
compensations, to meet such pay¬

Beginning

grams.

shall

accumulated in the

proportion of the guarannual wage which may

of

editors

the

pension
we

whatever

recently read in a remark¬

"Fortune" magazine that we have
millions of American families who
have

reserves

soon

annual fund—the trust fund accu¬

Banks.
We

Perhaps

these,
savings

to;

old-age

by

represented

ings and this is always the theme
Association

addition

be included

should

there

how

10-year period.

that

should

But

of our

the total dollar amount

that this

include

an

would

I

Annual Field Day

trust se¬

of investment

curities.

margin of income above

a

must

conclusion

second

.

purchase of investment securities,
particularly stocks on ye i t h e r
monthly investment plans or by

living.

reach is

The

described the great de¬
come t either
from savings of a
private debt expansion that we
pression of the 1930's: "A period
positive character or from what I
finance the growth of American
of time in which American people"
like to call savings by a savings.
production, which will free us
were
paying up their debts and'
plan that starts from a negative
from the greatest domestic eco¬
not liking it."
.'/
*
position. The latter is a pleasant/
nomic-evil—the evil of concen¬
Thus the moral I would draw is;
description
of
debt.
In
other
trated doses of unemployment?
that an expanding economy re-/
words, all of our expansion must
be financed either by first saving, quires expanding debt. The rate
of expansion I am told by econo-'
money (the less popular way), or.
mists 4 for
large
businesses
in
by borrowing money (the more
America, must be about 4%
a
popular way) which someone elsehas
saved.
But
the savings of year. We prefer this expansion in
: LOS
ANGELES, Calif. — The
"someone else" can be the savings private debt in order to minimize'
the role of government and as-; Annual Field
Day of The Bond
represented by - amortized
pay-/
sure
the efficient utilization of; Club of Los Angeles will be held
ments on a
previously incurred:
resources which the private enter¬
June 10 at the Riveria Country
debt made by someone else.
prise system gives us. But are
Club, Pacific Palisades, Bond Club
those
who
sustain the private
Economic Expansion Means
(President Joseph
I>. Ryons, of
Debt Expansion
enterprise system prepared to ex¬

'

equip¬

ment

management that can assure
enlarged volume of saving.

fact, since 1945, we have had
years of surplus in our na¬
tional budget than years of deficit
in it. The total budget surpluses
have exceeded
the total budget

to

the envy of all the world
and the greatest guardian of the- annual rate of $17 billion for the
tween our modern
last six-year period.
i;
freedom of the western world.
economy of today and the econo-.;
I
do
not need
to explain to
From it we have won a wide
mies of the preceding 40 centuries
is that we distribution of the ownership of bankers that such expansion must
be
financed. The financing can
have
placed/ the good things of life.
10 years

difference be¬
jndu's t r i a 1

wise debtT-nanagement. It is wise

more

a

even

expansion

community must educate the
people to a system of

In

wise

by

I

the finan¬

in

rises, tax revenues will
grow more than apace to produce
a
fully balanced Federal budget.

thus

come

Again boiling out price advandes
since 1948 (when they have been
of a minimum character) we have
had
economic expansion at the

expansion, there is going to
expansion./7^//;I^ ^

holds, if there is to be economic

remarkable

cial

after boiling
deficits in
price advance contained

the

conclusion

first

the

is that those

reach

structure.

income tax

American

,/

only

our

that, as there is forward economic
expansion and the national in¬

national

our

is

That income tax structure assures

have enjoyed in the

10-years,

in

The

my

We

us.

of expansion,

fact,

out

funds for capital formation.? Calls consumer
"savings plan starting from a negative posilion," and
be debt

only

-

last

thus increasing
a

it

of

rate

a

matter

American families not
have been enabled to maintain sustained savings programs,
incomes,

..

household." /

N. H.

Dartmouth College, Hanover,

achieve

;

management

Administration

School of Business

Amos Tuck

Dean,

vouchsafed to

but it is not

Thus

flexibility in the American econo¬

buying

same

economic future may be ours

ous

UPGREN*

By ARTHUR R.

of the

dollars

in

ed

power." Then in words well re¬
flecting -the character of the
President, he added "... A glori¬

11

Auchincloss, Parker & Redpath

Jones, Kreeger & Hewitt
Robinson and Lukens
Rouse, Brewer &

fnc.

Becker

Goodwyn & Olds
Rohrbaugh & Company

12

(2420)
The Commercial and Financial
Chronicle

ties,

Responsibilities ol

all

groups

the

of the advertisements of securities

either the

industry

or

to

ago I

statement

cise

principles
Counsel

con-

functions

of

of

read the

and

the

Association

of

America,

You

call

it

"Code of

your

the

Ethics."

It is

encouraging
to
find
a

of

group

ple
in

peo¬

engaged

giving

in¬

vestment advice

the

to

public
status

the

tions

of

purchase

may

I

I

noticed

that

in

your

find

to

facts

ent

or

that

a

Advisers

Act.

partnership

For

as

client

should

of

agency

business.

J aisquallocation, ine laws

"5??

.

y

?• *5

understood by ^app
those
On
other

registered
engages

practice

the

other

factors

hand,

that

there

are

frequently

be

certain and

of

though they

even

less

definite

as

and
.

^'character,£ "ethics,"

.

provisions of Sections 205(2) and
(3) of the Act. The principle that
compensation should consist of direct

charges for services rendered

?°

and should not be
contingent upon
profits
recognizes
and
supple¬
ments the provisions of Section

205(1) of the Act.
Most

encouraging

phasis Placed in

is

the

different

government,

securities

are

ified

roles

business

and

advice,

responsibilities

under the law.

Under the Investment Advisers

Ac^'particularly 'this

romnetenrp

tecritv
tegrity.

and

These
These

relationship,

above

all

all
all

are
are

on

in-

annealing
appealing

ruritieT

Federal

law*

"

1

^
se

,

.

Many people have

some general
the provisions

.

information about
of the Federal securities
laws, but
too few remember that these
Acts

must

accept

"Ie11 responsibilities If thev hold
^punMumues.,n mey nuiu

themselves out

able

as

to

investment advice they
competent

teal™

tha

means

to

give

render

must

unbiased

adfice" They

vestment
maintain

be
in-

must

the
0rganizati0n
and
facilities needed to get and evalua^e
faC£s on -which unbiased
investment advice can be based,

who

iu the particular
business, who ad-

If the

of
and

rewards which
In

the

their

from

come

almost

two

which I have been
the Securities

clients and
the material

reap

and

this.

years

m

member of

a

Exchange Com-

mission l nave nad

nnnort,mUv

an

opportunity

to realize more than ever before
the important contribution which

the securities industry

and certain

Professional
organizations
can
to the accomplishment of

the

purposes and aims of the laws

which

the

Commission

groups.

Responsibility

adminis-

services

imposed by the
issuers of securities and
their officers, directors and
conActs

on

trolling

persons.

Responsibility is

imposed

on

cunties.

Responsibility

is

placed

brokers, and dealers

in

securi-

on

ties

on

underwriters

national

changes and
vestment

statements

is

of

securities

associations,

advisers

on

and

se-

ex-

in¬

others.

made

given are cjear
that the c]ient

and
an(j

the

advice

aCcurate

so

Responsibilities
We

at

of the SEC

Securities and Exchange Commission have many responsibilities under the Acts. We

tion of investment advisers should

business

lets"

May 12, 1955.

bTv^stmo'n"6Counsel




gives

a more com-

since

eral

or professional

an

investment adviser is

fiduciary, he should

avoid

a

situa¬

Securities Acts.

I
believe
cooperative efforts of
such organized
groups in the se¬
curities industry are sincere
and
that

if

the

continuous

they can reduce, in
par£ at least, the necessity for and
£be extent of
government regula-

tion.

your

two

me

stress just for

practical

reduction

of

The Investment Advisers Act
As

know,

you

Advisers

Act

investment

the

Investment

provides

adviser

who

that
has

any
not

^TnnnrPnr

to a court order
from

oLTloS
enjoining him

engaging in certain activi-

a

moment

applications

of

governmental

the

regu-

07 whkhVhavlnf

to be modified. When those
of us
whose appointments derived from
the new national

joined

the

^ ^
mission and
program

of

administration
Commission in 1953,

the public

continued
in

staff,

9™"
ready for a

simplification

and

organizations
of
the
securities
business undertake to
-prescribe
and enforce standards
which take

and

intelligent investment
whether

buy,

securities
the Commission

against
moved

have

of

out

with

you, the
and indus¬

accounting profession
try generally what we think is a
far
preferable
requirement for
semi-annual reports both of sales
and

net

operating results. But I
you, has industry assumed its

ask

proper

The

responsibility in this field?

New
be

can

York

Stock

Exchange
listing

commended for its

requirements under which a vast
majority of its listed companies
publish quarterly reports of sales
net profit or both.
the expensive and
or

Why should

heavy hand of
the Federal Government be
need¬
ed to rope in the
stragglers who

do

not

make

interim

the New York Stock
are

not

terim

asked

even

reports

to

make

reports by the other
It seems to me

changes?

profession

could

fluence to bear

to

Exchange

or

in¬

ible

Advertising

of

I

am

sure you

man¬

your

nor

are

indus¬

adequate.
securi¬

are aware

that

advertising of securi¬
ties which is
presently being dis¬
tributed by the securities
indus¬
is

unsound, both from the
standpoint of the industry and the
American investor, for whose
pro¬
tection the Federal
Securities and

Exchange Commission
lished by the Congress.
or

the

was

estab¬

Either the

industry, and

perhaps

both, are going to have
prompt steps to correct
this situation.
Conceivably, effec¬
to

take

tive

Federal

policing of

vertising pf securities
cure.

There is

some

ing of advertising

but

yet

will

have

to

be

relatively inexpensive
industry self-regulation

or

Americans
interested in
sure

have

alawys

become
interested in it.

more

been

freedom, and I

shall

we

am

more

and

One

im¬

-

portant characteristic of a free so¬
ciety is its ability to establish its
own
standards in the public In¬
terest.
This is true in economic
as
well as in political and
social
matters.

of

You know that
many provisions
the
Federal
securities

laws,

particularly provisions
curities

Act

and

of the Se¬

the

Securities

Exchange Act, resulted primari¬
ly from the fact that during the
roaring twenties many people, in¬
cluding those in the- securities
industry, had failed to recognize
their

ple

responsibilities to

they

dealt

with

the

and

peo¬

to

the

public generally.

Cooperative
the

been

Self-Regulation in

Securities Industry

After

the

in

Exchange

effect

for

organized groups
to

came

of the

Commission

not

ex¬

Securities

This is the
advertising of
some

aware

has

realize

Act

several

had

years,

in the industry
it

was

in

their

interest as well as the public
interest
to
supplement
Federal
regulation by a kind of cooper¬
own

government regulation

self-regulation

it

by the more rigid and expen¬
sive process of Federal
regulation.

your

Let me also mention
one area
where at the present time
neither

ties.

and

process of

non-reporting

companies. Most progressive
agements
are
sensitive
to
views.

try

securities

bring great in¬
on

industry is

which
with

served, whether it be by the flex¬

the

worked

practices

minority of the

a

cohesiveness and de¬
In the long
run, the
public interest in fair
advertising

listed

constantly ever since
requirement. We

us

reinstate

undesirable

termination.

companies.
Investment advisers and financial
analysts groups have been ham¬

mering at

of

is an invitation
to gov¬
ernment to use the Federal
power
stamp out abuses of which the

Commission staff
reduction, in
because of its inherent in¬
firmities, in 1953 we rescinded
the requirement (known as Form
9-K) of the quarterly reports of

to

Fail¬

area.

to

or

part

of

leader in this

a

icism

of

sales

association,

high standards of busi¬
conduct, might appropriate¬

indulged in by

reducing Federal regulation
being modified. In part because

gross

emphasis

Your

business

took
is

them, the other exchanges,

by the securities industry it¬
self to take effective
steps in the
face of
wdiespread, justified crit¬

de¬

sell

and

of the national secu¬

ure

parallel—seeking

able to

Securities Dealers

one

its

ly be

ours

cisions

of

exchanges, the New York
Exchange, have programs
self-policing of advertising by

ness

and

presentation to the public of ade¬
information in form suit¬

hold securities.
But one action

ciation

to this problem.

quate

to

flamboyance and the "cometechniques out of securities
advertising? The National Asso¬

with

administrators of the securities
should be

as

Acts

the

on"

and other associations
in the busi¬
to give additional

cooperation

advisers

self-regulating

ness

form revision
program. Your goal

investment

the

their members.
It would be an
act of wisdom in the
public inter¬

com¬

rule

should

est for

including

the

the

ad¬

could be

a

official polic¬
in connec¬

now

as

Stock

num¬

to be

are

so

t

Or

for

Industry

groups,

anti-fraud

statutes,

control the allure¬

rities

protec¬

our

it.

on

assistance

try

Two Practical Applications
Let

as

the

or

to

as

possi¬

air
waves, : or sent through the
mail?
That would be one alter¬
native.
"
-v\'
•
; •• •'

at least

program

reduced in

of

the

presently being held out to
the public in the
financial pages
of
newspapers, broadcast on the

ob¬

safe¬

of

ments

new

interests

h.elP iot fur'h,er the P"rP«sas
and, a™s of such laws as the Fed-

provisions

pace

for suggestions you have
We of Government so¬

licit

ca"

been convicted of certain
types of
America, New York City,

side

Prehensive, view. Any organized
group with the same or similar

be fair and reasonab)e and should
b
related to the service rendered.

——

Ell-on?
Association of

but seeing it

government

me a better rounded,

on,

the

the

understands not
only what ig being recommended
but why
The basis of compensa-

tions which create conflicts of
and
great
advantages are given to, interest.
investors—the investing public
I know from
reading the stateby these laws. Fulfillment of the ment of
principles which I menaims
of
the
Federal
securities tioned
a
moment
ago
that the
laws depends in
great part upon members
of
your
Association
the cooperative efforts of all
per- should not have any
difficulty in
sons who are
expected under the assuming their
responsibility and
Statutory scheme, to assume re- meeting their obligations under
sponsibility.
1
«sjjJ the law.•

Responsibility is placed

Ration of this before

from

and

This

advertising for

violations

to eliminate

duplica¬

for the

association,

and

are

visory

standards, gain the

selling investment ad- ters in the public interest. As a
in the nature of practicing lawyer and an active
Exchange bulletins
analyses or reports they Participant in bar association ac—
Commission administers allocate
must
be
sure
that
the
factual tivities, of course I had some realresponsibility to various

which the Securities and

members

mended

This

ble

conciseness
any J

appropriations sq,
all

inspect

two

submitted.

persons

confidence

been

work

ap-

deal with them, and in

here to high

has

and

a
man
applies in his
business depend
pretty much
on his
own
conscience, his training
and
background, and the

the

past

eliminate

necessary

can

your

rity which

customers

investment

confidential

soec-

em-

your statement of

render

in-

and

ber,

own

run

to

encourage
sacrifice
of

of

which

any

the long
practicing the
indus- particular profession, or engaging

vesting public—assume their

unbiased
to'^render"unbiased Investment investment adders
to

who

groups

participate in activities under the

the

investors.
continues as fast

"moral-

and

is

tion

words

factors.

is

and

guards

sub-

community can benefit from a law faives the public confidence in the
Q^iy if it works. It can work only people they deal with

iaw_that

tion

without

morality
law
The fact that a law has teeth and integrity are
high, the public
jt does not
necessarily mean —that is the clients, the customers
that
it
will
furnish
economic —understand
and
recognize the

aP

jective

as

these

for

and forms, to
keep
changing practices and
developments. The primary

Generally speaking, the standethics, morality and integ-

of

work

lations

ards of

existence

at

Exchange Commission
Congress for vastly

the

increased

regulatory scheme.
Commission has been

the

and

request

the

to

I ask you, should the Secu¬

rities

about

sold

super¬

gener¬

ally.

The cooperation of indus¬

Also

f

an(j

The

be

to

with

I have in mind the
concepts

ity,' integrity,

information

routine,

advertising

for

means

Thursday, May 26, 1955

.

not, as a matter of
vise securities

years on a program of revision
and clarification of its
rules, regu¬

may

difficult to

more

better

securities

hard

extremely

important in the practice
profession,

or

sanctions.

community.

groups

cooperated

Congress in

'

must

a
are

who

Ply-

operates
deceit upon any cliprospective client may sub-

a

any

investor

of the Federal

en¬

^

generally expressed in such

or

nourishment to

reduce

.

tion with new issues
publicly of¬
fered and with
respect to securi¬
ties of investment
companies, but
by and large the Commission
does

securities
laws
made' possible
these, very long needed revisions

put a person
The standards to

sub-

penalties

the

in

try groups and their recognition
of their responsibilities under the

pens^or regLtraUonm'us/be defi"
£esieor ™^\r®tl°n^tjtb® ^
an<
gvmonewhat constitute!
oeveryone what constitates

the

of business which

to

be

Industry

providing

public.

to

pen-

transaction,

to

Commission

the

new

make it possible for

is

who

the

and

stand¬

ex-

notify
any change in the
members of the
partnership. These
two statements
closely follow the
the

and

with

re¬

However, while these penalties standards generally followed
by
sanctions are necessary
to other people engaged in a similar
make the Acts
effective, it is not activity and in competition with
ample, there is a statement that
the penalties and sanctions stand- him.
In any business, and
no assignment of a contract
should
paraione which
determine the ticularly in any
be made without the consent of jag
profession, where
vaiUg or the effectiveness of the the standards of
the client.
There is a statement
ethics,
vestment

way which would

applied in determining whether

cus-

to

with

he

a

adviser

himself

have* definite

criminal

possible

fraud

a

that

Similarly,

any

ject
of

some

principles take cognizance of specific provisions of the Federal In-

the

sale of securities may

or

investment
course

are.

vio-

violate

connection

even

jected

Code of Ethics shows
your members

material

not

was

protection.

misrepresenta- 3ect 10 tftem-

makes

in

alties.

your

who

or

for

forfeit his registration and thus
be unable to conduct his business,
Under certain
circumstances he

as

as

laws

tomers

ligations and
responsibili-

Armstrong

provide
against persons who

knowingly

ties

J. Sinclair

In

Acts

rules and regulations of the Commission adopted under the laws.
A
registered broker-dealer who

fi-

their ob-

responsibdities.

the

sanctions

and

as

duciaries
of

as

of their

aware

meet these

this

disseminating

administrative

out of

addition,
late

must

forcing the law

to

have various legal powers to help
us

Investment

and

Commission's rules and forms. Of
course

an

of ethics.

provisions

be

days

code

ment

Wants all investment

join the Investment Counsel Association and

streamlining of the Acts

eli¬

as

ards, particularly where they con¬
tain
such
drastic
and
punitive

unsound and

are

adhere to its rules.
few
A f

is

registered

Laws which have to be admin¬
istered by the Federal Govern¬

the SEC "are going to have to take

prompt steps to correct this situation."
advisers

become

applicant to follow any gen¬

eral

Investment Advisers Act, and praises provisions in the code of
ethics set up by the Investment Counsel Association of America.
some

accurate

legislation,
quire him to meet any
particular which passed
unanimously and
standards of
competency.
While became law on Oct. 10,1954, elim¬
it prohibits fraudulent and
decep¬ inating certain complex and un¬
tive practices, it does not
require necessary provisions of the Acts

who partici¬
pate in the securities industry to assume their specified rolet
and responsibilities under the law. Outlines
obligations and
responsibilities of investment advisers under the terms of th«

Says

to

an

not

Commissioner. Securities and Exchange Commission
upon

files

application

investment
adviser.
While
the
Act requires the
applicant to dis¬
close
certain
information about
his background, it does

By J. SINCLAIR ARMSTRONG*

Armstrong calls

who

complete

gible

Investment Advisers
Commissioner

and

and

.

ative regulation of their
own in¬
dustry.
The
national
securities
exchanges reorganized their gov¬
erning boards to give more recogn

i t i

and

o n

groups

representation

to

dealing directly with the

public, and, in

some

public directly.
familiar

with

cases, to the

Many of

you

are

the

organization oi
the National Association of
Secu¬
rities Dealers,

Inc., the "NASD,"'

and the fine work it has done
and
is
doing in

maintaining

standards
dealers

ethical
brokers
and

among

doing

business

over-the-counter

NASD,
ized

as

you

pursuant

the

Exchange

eral

years

went

that

into
any

know,
to

organ¬

adopted

the

effect.

such

was

the
The

amendments

Act

after

in

markets.

original

To~the

to

sev¬

Act

extent

organization

can

Volume 181

maintain

Number 5432

.

.

bers

and

standards accept¬
majority of its mem¬

to the

enforceable

against

Tax Problems of

only inspires confidence
among the customers of its mem¬

bers, but it thereby reduces the
potential impact and scope of gov¬
I

why

active

more

in

capital

expanding

its

business

accept

the

hering

to

which

responsibility of ad¬
the
high
standards
yourselves.

that not

course,

investment

join

for

set

you

realize, of

adviser

is

Eisenhower

I

"An

to

counsel"; that only those

overseas

advisers primarily engaged in the
business of giving continuous ad¬
vice based on the individual needs
of

each

client

would

meet

350

of

the

have

new

simplified

that

filed

in

1954)

they

in this

Form

advisers

ADV

be

form

the

at

have

Com¬

indicated

primarily engaged
business, and so qualify as
are

investment counsel. I feel

ably

(the

registration

adopted

we

mission

than

investment

who

which

that

more

specification. However,

reason¬

convinced

that

it

is

not

only
in the public interest but also in
their

interest to belong to an

own

organization such
would

to

seem

as

And it

yours.

that

me

it

would

be in the interest of you who are
already members to get these in¬
vestment

advisers

into

your

or¬

ganization.
You

might also give serious
thought to finding some way by
which you can bring more vividly
to the attention of the

public, par¬
ticularly to prospective invest¬
ment-advisory clients, knowledge
the

of

in

standards

applicable to
investment

helpful to

employ,

that

It

are

be

would

ise

I

:

will

investment

whom

presi-

ifying

because

trade

Congress

corporations
such

Koenig

P.

them¬

selves in
a

Robert

ours

as

find

situation which is not

a

common

one.

Any corporation formed under
the laws of the United States is
citizen of the United

considered

a

States,

to

so

tax

Federal

for

speak,

However,
when substantially all of a corpo¬
income

of the U.

outside

done

is

S., the country in which
quite rightly feels en¬
levy taxes on substan¬

it operates

titled

to

tially all of the corporation's in¬
This
means
that such a

come.

corporation

"inter¬

subject to

is

national double taxation."

United

The

States

corporations
abroad

such

allows

business

doing

against. Federal

credit

a

tions

ship between the investment ad¬

of

works

It

to

or

of

Thus,

de

have

be reasonable for the client to

countries.

get

sendee

with any

for which he is paying, each client
and
prospective
client would

quire

eventually
investment adviser

his

these

meet

standards.

This

that

to
de¬

the

solve

many

circumstances

difficulty

ward

an

create

in

educational
demand

a

standards which
espouses,

public

which

have

the

I

to

high

association

your
am

and

far

as

Cerro is con¬

as

the

under

taxes

new

that the

Council, has said

Trade

how

the.

about

United

investments

which

and

large

abroad

expanding

a

on

scale.

In¬

will be of benefit not only to in¬

deed, except for one feature, the
system applicable to the taxation

pub¬

their

and

income

source

a

whole.

construc¬

Joms Walston & Co.

which Mr.

tests" to

"arithmetical

complicated
won't take time to .explain
referred

Carroll
I

requirements, one of

the detailed

exchanges,
B.

Stiles

with them

announce

has
as

a

the

The

Robin

right

course

from

United

registered

repre¬

sentative in their Philadelphia

income

income

at

reflect

fice, 1420 Walnut Street.

With Palmer, Pollachi

the

ship;

-

BOSTON, Mass.—Leslie K. Mull
now

with

Palmer, Pollachi

&

Co., 84 State Street.




and

corporate

income,

States'

that

abroad.

be

tax

tax

such

enough to
that
the
only

facts

the

to

in

which

*From

tie

the

1955

holders

of

remarks

Annual

the

of

Mr.

Koenig

at

Meeting of the Stock¬
de Pasco Corpora¬

stand

effect that

the

to

was

any

the Western
Hemisphere, no matter how small
or
incidental, would disqualify a
corporation from the benefits of
the Act.
Accordingly, it appears
outside

purchases

probable

the

Cerro

bring

and

to

purpose

in

announced

was

by Senator George for the
Finance Committee. It is

Senate
now

integral

an

important

and

part of the far-reaching and dy¬
namic international policy of the

present Administration, which has
been forcefully proclaimed by the
President,
by
Secretary Hun^phrey and by other leaders. In£terpretations of the tax laws af

eign branches until it is removed
from
the
country
where it is

the technical level should be con¬

earned.

and the announced

"I

the

also to explore the

propose

further

of

use

possible

treaties

tax

tal

countries.

other

by

This

tax

course

Under

for

Congress

a

serious

that

feel

I

we

it

taxation

of

matter

one

with

.

is

us

of

and

appropriate that

is

should make known our view?.

safeguards, credit could be

given

of

policies of the

Eisenhower Administration.

capi¬

concessions made to foreign

will

the

with

sistent

with

of

recognition

which

foreign

for

With BIyth

taxes

income

waived

are

limited
credit

period,
for

now

we

as

which

taxes

effectiveness

to

*■

!

Hennings has joined the staff of

im¬

foreign tax laws

-

Calif.—John H.

OAKLAND,

grant

are

& Co.

(Special to The Financial Chronicle)

initial

an

Blyth

This would give maximum

posed.

This is not
*

&

Co.,

Inc.,

Central Bank

Building.

offering of these Debentures for sale, or an offer to buy, or a solicitation oj an
buy, any of such Debentures. The offering is made only by the Prospectus.

an

offer to

$30,000,000

Lockheed Aircraft Corporation
33/4% Subordinated Debentures, due May 1,
Convertible Through April 30, 1965 Unless
for Previous Redemption

1980

Called

Price 100%
plus accrued interest from May 1,

1955

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

in

ways

additional

prior years. We
eventually we
will not have to pay such addi¬

Hornblower & Weeks

Blyth & Co., Inc.

White, Weld & Co.

Smith, Barney & Co.

Corporation

The First Boston

Goldman, Sachs & Co.

Glore, Forgan & Co.

Eastman, Dillon & Co.

Kidder, Peabody & Co.

Harriman Ripley & Co.
Incorporated

Lee

Lazard Freres & Co.

Stone & Webster Securities

Corporation

E. F. Hutton &

Union Securities Corporation

,

Carl M. Loeb, Rhoades & Co.

W. E. Hutton & Co.

Company

Hayden, Stone & Co.

Drexel & Co.

Dominick & Dominick

Bache & Co.

Iiigginson Corporation

Merrill Lynch, Pierce, Fenner & Beane

Lehman Brothers

other

for

ours

Rev¬
claims

many

operating

corporations
similar

Internal

will

that

Service

enue

against

taxes for certain
are

confident

taxes,

litigate

must

that

because

we

either

the

will win in the

agine,

couraging private investments

Two

Aspects to Solution

Paine, Webber, Jackson

& Co.

What is the solution?

We think

President
his message

Eisenhower

said

A. G. Becker & Co.
Incorporated

Hemphill, Noyes & Co.

Hallgarten & Co.

Central Republic Company
(Incorporated)

W. C. Langley

American Securities Corporation

Tucker, Anthony & Co.

William R. Staats & Co.

Emanuel, Deetjen & Co.

in
May 25. 1955.

Alex. Brown & Sons

Baker, Weeks & Co.

Irving Lundborg & Co.

I'rancis I. duPont & Co.

Clark, Dodge & Co.

Henry Herrman & Co.

G. H. Walker & Co.

Reynolds & Co.

& Co.

,

Company, Inc.

Elworthy & Co.

Hill Richards & Co.

McDonald & Co.

of Jan. 10, 1955 to the

Dean Witter & Co.

& Curtis

Bear, Stearns & Co.

Company

Incorporated

Courts & Co.

it has two aspects.

Congress:

F. S. Moseley

A. C. Allyn and

The Robinson-Humphrey

abroad.

Cerro

1955.

That

issued

which has never been
published but which we under¬
ruling

is U. S. citizen¬

country

the

Commis¬

the

passed,

was

poration credit as a means of en¬

low

rate

a

in

ern

Another

taxation

and

income of for¬

on

administered

be

Committee

Finance

all

forth¬

would be to exempt

tion, New York City, May 10,

0

domestic

deferral of tax

or

percentage

the

than

lower

on

14

rate

a

said, when sponsoring the law in
1942, "that merely incidental eco¬
nomic contact" outside the West¬

However, as you can im¬
this experience makes us
wonder about the practical effects
of Western Hemisphere trade cor¬

most

the income is earned has the bet¬

(Special to The Financial Chronicle)

is

important

law

light of the purpose to encourage
the investment of capital abroad.

the Western Hemisphere.

Senate

courts.

would
a

basis for the

;

has

States

any

derived

alternative

of¬

United

soundest

associated

that

become

of

undergone

change since 1918.
1

at

is, of course, that

which is that all business must be

tional

outside

Co., members of leading stock

subsidiaries

foreign

branches

rate

the

income

of

States

abroad

are

ruling, the regulations, or the law
will be changed, or that if we

not

&

for taxation of business income

points

earned

1942

investment of

relating to the taxation by
United

The

requirements."

tion of these

by the U. S. of income derived by

PHILADELPHIA, Pa.—Walston

Com¬

lems

the

of

excessively

by

administrative

narrow

so

and

nature

the

to

as

corporations like Cerro de Pasco

as

but

caiptal abroad I recommend en¬
actment of legislation providing
from'

of any

Hemi¬

Western

the

of

benefits

sioner of Internal Revenue

vestment advisers but to the

lic

thoughtful critic, Charles R.
Carroll, Counsel to the Board of
Directors of the National Foreign

law

vate

the

sure

generalities on the taxes

The second requirement

munists.

"To facilitate the

on

A

The

is looked to for world lead¬
ership in developing the resources
of areas which need capital in¬
vestments, its tax system is none
too well adopted to encourage pri¬

for¬

the

of

promises

alluring

false

Policy

simpliiy it.

broaden and

done in

try

very

program

for

want,

would

different

carrying

provisions has become
complex and we look forward to
amendments of the law which will
its

under

you

Well, we do not consider
our present
laws satisfactory but
we have high hopes that they will
be substantially improved in the
near future.
Although this coun¬

complicated

should

little

Cerro

burden

not

States?

in

many

credit has meant a
deal to corporations like
de Pasco but qualification

great

a

laying out
investment programs for different

individuals under

will

the

But

You investment counselors who

the

offset

not

satisfactory solution of the prob¬

corporation

two

Present Laws Need Revision

their business successfully.

can

Hemisphere trade

The Western

in

aged.

have to be met by investment ad¬
visers
who
expect
to
conduct

to

will

law

the

Tax Laws

This would

standards.

much

proper

Amendments to Law Recommended

Hemisphere would not de¬
Mining Code of 1950 are such prive a taxpayer of Western Hemi¬
that large mining investments in' sphere trade corporation status.
Peru have certainly been encour¬
Now in 1952, 10 years after the

by the people who buy and
for the service would then

problems involved

that

cerned

re¬

mand
pay

operate

worries

lax

find abroad other than to

we

say

that

Pasco

I

like

corporations

those

Cerro

to expect and

States, or

part to one and part to the other.

abroad

come

United

the

investment advisers must be high
and the cost of the service must
the

corpora¬

up

that

erate

investing public could be

of

such

that

out

end

paying the amount
higher tax, whether paid
in the country in which they op¬

made to realize that the standards

living

of

Administration

easily to
equipment so

do

this pro¬

be deferred much longer.

more

meeting specific arithmetical tests

arise from the fiduciary relation¬

benefit

the 38%, it gets credit
foreign income taxes paid.

paid locally, whichever of the two
imposes the higher tax.

viser and his client.

enabled

be

acquire the capital

sphere trade corporation "are re¬
stricted to domestic corporations

taxes

amendments

Against
for

taxes

income

for

countries

full

as a Western Hemispnere
corporation has paid 14 per¬
centage points less tax than one
not qualifying. A Western Hemi¬
sphere
trade
corporation
pays
38% at present, as compared with
52% for corporations generally.

purposes.

business

ration's

reasonably cost, and, par¬
ticularly, the obligations which

the

The

quoted.

just

dents

adviser

integrity

George,

tion

should

and

under the

Senator

of

have

I

done

was

other corpora-

income

competence

That

adopted >the proposal
and since then a corporation qual¬

have, the amount which
competent investment
advice

of

the
Western
trade corporation

leadership

from many

should

If the

situation some¬
Amer¬

proposed

credit.

employing

now

our

corporations

Hemisphere

heard

have

"To alleviate the

mittee

besimply a
repetition of
what you will

thus

would

countries

endorse

It would put tne tax^non

fairer basis
and vastly simplify the tax sys¬
tem.
Somewhat similar proposals
ran
into snags last year, but we
have high hopes that constructive

tax
badly needed by them to achieve
not been politically
sound economic growth and high¬
apparently it is not
change in

heartily

of foreign income on a

areas,

derdevelpped

in doing busi¬
ness in the Western Hemisphere,"
in 1942 the Senate Finance Com¬

will not

say

and

United

of

We

gram.

the

to

er

ican

that

I

way

what and to encourage our

can

you

what

investment advisers if they under¬
stood the qualifications which a

competent

hemi¬

at least prom¬

who intend to

persons

or

be

who render

persons

advice.

should

this

feasible

a

flow

prises."

could contribute
expansion of twointernational trade. The un-

much

now.

ana

sphere.

that many of them could

sure

such
system has
ever,

increased

developed

right to tax the income. How¬

ter

you
would be inter¬
learning something about
taxes
and
tax
problems which
confront
corporations
operating

invest¬

private investment funds
abroad, especially to the under¬

by President
Congress of Jan. 10, 1955.

to

message

ested in

association limited to "in¬

an

vestment

his

in

Perhaps

every

eligible

abroad.

in

States

require revision, and endorses solution proposed

and thus inducing
investment
advisers
to

and in such a

results

it

country

our

largely by individuals or
private enterprises rather than by
government.

operating in a foreign land
tax problems of U. S. corporations doing
Says present laws covering this situation

membership,

designed to encourage new enter¬

needs

ment

President, Cerro de Pasco Corporation

eligible

that

manner

Head of prominent mining concern
calls attention to

from

abroad

must be stimulated

organization

an

as

yours, with so admirable
statement of principles, is not

a

source.

By ROBERT P. KOENIG*

regulation.

wonder

such

world

free

America is its largest
In that light, the flow of

capital;

Corporations
Operating Abroad

all,

it_ not

ernment

whole

"The

high

able

13

(2421)

The Commercial and Financial Chronicle

.

Brush, Slocumb & Co. Inc.

Mitchum, Jones & Templeton
Schwabacher & Co.

Sutro & Co.

Clement A. Evans & Company, Inc.

Kerr & Bell

Lester, Ryons & Co.

Walston & Co.

14

The Commercial and Financial Chronicle

(2422)

—predated

A

Very Prosperous Level of Home
Building and Home Financing

The
of

In

been

a

deal

great

cussion

has

there

public dis¬

of

usually

housing — as there
The home mortgage

is.

has

market

4

tion

been dissected
and

debated

from

all

an¬

gles.

During
two years

my

Housing

as

A d

i

m

trator,

i

n

I

s-

have

local

local

treatment.

close

We

-

local

in

;

and

issuance

of

mortgage

reasonable

value.

homebuilding thus far in 1955.
it

expected

was

in

the

that

we

out

FHA

to

believe

about.

beginning

are

has

I

be¬

to

see

Albert

M.

Cole

choose

from.

We

been

having

level

of

a

very

homebuilding

financing.
seemed

To
a

home

and
this

some

be

to

have

prosperous

of

cause

has
alarm

and great
danger.
But then, in
politics we are used to having

people "view with alarm."
times it is
seems

Some¬

justified—sometimes

it

just like politics.

Some

of

reminded

these

weeks

many

alarmists

of the

me

been

so

run

also

Labor

released

its

Staistics

figures

on

housing starts for the month
April.
The 127,000 starts in

of

that month, while above last year,
are below the April
peak in 1950.

that,

in some
promotion of the

practice of including closing costs
in the mortgage was
contributing
to a degree of overselling. Homeseekers

being

were

"come

and

get

it"

The

Bureau's

seasonally
ad¬
rate for April has
1,309,000 compared to

dropped to

this

of

inducement

come-one-come-all

a

a

basis,

on
en-,

irresponsibility by both

courages

buyer and seller.
To

prevent

practice,

the

in

'sign of

failure.

lie

doctor for
After

in

finally went to the
complete check-up.

a

testing

every

serious organic

some

and

to

medical

science,. the doctor finally told
his patient: "There's not a
thing
act health.

You

about!": the

"But if I feel this

1 .d when

I'm healthy, how
lAng to feel if I get sick?"
Something of this man's
to

seems

have

of the alarmists.

am

I

is

psy¬

infected

They can't

is

quite

ion't

<

:

healthy thing.

a

different

a

want

nistaking

to

kid

But that

matter.

hat

We

lie ahead in

We
Jn

have

want

the

Housing

nformcd
/e

got

be

squalls

or

that

attitude

Agency

and

the

In order to be well
the

on

out

to

the market.

adopted

J5ov^rnment.

into

market for

eady for any showers
*!

We

ourselves

a prosperous

millennium.

a.

underlying facts,

our

economic

stetho-

copes, called in our specialists,
and, through the economic advi¬
to

sors

and

the

President

VA field

iewed
detailed

ousing

at

offices,

the

and

level

reported

markets

FHA

have

we

national

facts

on

re-

local

throughout

the

Our diagnosis—not
only by the
lousing Agency, but through the

vdministration

—

tousing market
.ondition.
Our
ag.

of

is

that

was

in

surveys

general

the

healthy

a

gave

no

overbuild-

-

called

a

slight surplus in

a

comparatively few localities, and

hese were the result of
special or
ocal
conditions.
In most areas

Mutual

of

gov¬

lot further,

for

by

but

all the

was

the

undermining

meet

the

Savings

Cole

at

National

Banks,

the Annual

Association

Atlantic

A. J, May 17, 1955.




few

a

current

we

should

basically

a

local

situations

and

We did not think

problems.

that

government should attempt to

re¬

or manipulate normal forces
operating in the private market.
In fact, we regard a
high level

City,

figures

housing activity in this coun¬
try as a good thing. And that is
particularly true when it reflects,

as
it does now, a general
high
level of prosperity in the
economy.
Gross national product for the

first

quarter

rate

of

reached

annual

an

$370,,billion, just slightly

above

the

mid-1953

peak. The
production index and the employ¬

high.

The

come,

moreover,

level

of

new

personal

has

risen

in¬
con¬

new

dropped
about

to

I

the

April

million

1.4

to

a

units

million

with

so

other

figure

financing,

is not just a recent
happening. The liberalizations in
of

1954

did,

the

to

more

housing

people
market —

rise

in

and

home

be sure,
to

as

enter
it

was

creased

level of

of

use

call

—a

ernment,
at

as

our

going to
housing and living stand¬
gradually sink lower and
we

are

ards

lower

housing in¬
ventory continues to age and de¬
teriorate.
To

~

future

-

I

years—rests

only just
beginning to meet since the pas¬
of the Housing Act of 1954.
we

by long-haired government

million

high birth rate—

births

in< 1954—has

I

haven't

used

it

industry
I have leaned over

job.

private

see

that

has—that

you

have—that .opportunity.

this

But

-

involves

than

more

just another business opportunity.
You in the private

have

nance

yes,

industry of fi¬
social, ethical, and,

a

responsibility

political,

a

to

consider and to serve the require¬
of minorities.

ments

This

is

just

much your

responsibility as it
mine, and as it is that of the

as

that

larger
Income
im¬

quarters.

is

significantly

also.

a

them.

has

year,

exceeded

by

recognized
market

reconditioned

About 20%

ilies

have

issues

,

by state and local
governments, the backlog of local,
government
requirements
for
public facilities and improvements,

is still
As

a

very

large

result

a

of

one.

market

money

developments thus far,
FHA

and

little

a

were

less

a

on
are

attractive

than they
Lenders are be¬
selective.- Builders

year ago.

coming

more

finding

are

yields
financing

VA home

it

difficult

more

to

obtain forward financing commit¬
ments at the most liberal terms.
The

.

private market is exerting
measure

against

dangers

housing.

that

the

ral

to

metropolitan

in

forces

than

of

the

poor

in

level

of

premium they have had to

housing

to

past

The

concern

should

areas

uled

to

and

which

provided

sched¬

in

slum

redevelop¬

under way or
One hundred or

now

of the

These

—the

are

cities

new

among

These

markets

are

are

devel¬

Housing Act.
our
future

your

markets

of

private enter¬
And the President's whole

housing
ward

and

is

program

helping

demands

directed

to¬

to meet the

you

to

n~w

and

serve

adequately througn private,

we

serve,

—housing demands that you have
not adequately met up to now.
In this connection, I
want to
discuss

this

of

program

essential

role

This

the

it.

phase

because of its
importance to you and

new

special
the

particular

one

is

Mortgage

that
new

you

play

Voluntary

Credit Program.

President's program

under

the

in the Hous¬

preferred market.
It covers the
market, and you have a pub-,

total
lie

obligation to service all those
can meet sound requirements

who

mortgage financing, including

minority families.
Yet the Negro has had, and

still

has, difficulty in obtaining funds
to acquire a home on terms equal
those

to

citizens.

other

of

Even

though he can meet private stand¬
ards of credit, he finds private
lenders
in
his
community
too
often uninterested and indifferent
to his

business,

willing to lend

or

payment of a penalty not
exacted of others.
only

on

The Negro's rights are equal

to
those of any other citizen, and his
housing needs are greater.
If
private enterprise will not provide
for
them, then the government
to assist him to get the

proposes

home financing he needs on terms

equal to those afforded others.
This

do

can

we

authority

National

tion

to

the

through

have to

we

eral

the Fed¬

use

Associa¬

Mortgage

support the mortgage fi¬

nancing

of

housing

mi¬

to

upon

norities.
I

not

am

authority
vate

using this FNMA
I am giving pri¬

now.

enterprise, through the Vol¬

Home

untary

Credit

Mortgage

Program, the opportunity to show
what
for

it

can

do—what

do

it will

these families.

But

Voluntary Home Mortgage Credit
There

can

be

"overbuilding"

in

no

question

which this program is

areas

wait

cannot

Association

sponsors

of

this

representatives

one

the

on

the

of

Your

program.

National

Committee

that

and Robert M. Mor¬

gan.

In

areas

directs

representatives
committees.

it

are

where mutual

ings banks operate,

you

the

on

sav¬

also have

regional

You therefore have

opportunity

to

further

to

a

its
'

success.

now,

over

of

mutual

in

ticipating in this

intended to

indefinitely.

is

Harry Held

Up

the

I

Your

real

Program

have substan-'

for

responsibility
embraces
the market, or the

means

—

deflationary swings.

That is what

Nearly

misunderstanding

consequent violent inflation¬

responsibilities.

Your

over¬

are

urban

start.

program

ary

tially

scale.

eliminated

be

markets.

the

or

large

on ? a

100,000 dwelling units

often

in

in

neighbor¬

the same time, communities
beginning to clear and re¬
develop these slum and blighted

in¬

result

dwelling

for

substandard

At

in

actions

prompt

in

are

Home

these

pay

hoods and slums.

prise.

should

republican form

see a

,

the

crowded

to

has

activity.

government's primary

the

oping more extensive undertak¬
ings under the new urban renewal

pri¬

stable, healthy econ¬
such as we have today, gov¬
policy

new

mar¬

a

housing

for

resent

towns

the

who

market
even

to

"take prompt action."
But

stimulating the
housing.
They

soon

government

bureaucrat

ex¬

more

themselves—those

the

suburbs,

sections to

more

private

some

from
from

areas,

of the country. Most
of them are seeking better oppor¬
tunities, better living. They are

projects

has

such

for

areas

ment

these

operators
want

panding

clearance

government

confidence

new

of the nation's fam¬

of self-correction

overfinancing
Sometimes it appears

wish to

government continued. Pater¬
is achieved
by shirking

nalism

been

of

own

for

a

homes.

almost one-fourth. Although there, urban centers
to
has
been
some
decline in
new
heavily populated

capital

as

moving annually
for the past few years—from ru¬

the

year

being

are

vast,' effective

during the first four months

this

States.

not just part of

The

and

of

of

:

>.

volume has been rising. The vol¬
ume of new corporate
security is¬

comparable total for last

United

you

including the loweroccupations
and
groups.
Families
not
previously in the
housing market at all are becom¬

time

sues,

the

of

population,

to

of FHA and VA terms

I

want

push the problem un¬
der the bed; you are the people
who must solve the problem if

the

homebuilding

to.

enterprise

private

are

was virtually drawn
businessmen and bankers

you

the

haven't used.

to do the

isting demand for better housing
living environment — a de¬
which

that

done

be

in, or it is
government

backward, gentlemen, to

and

mand

go

compelled

because

the ex7

on

be

to

was
you

up

the gov¬

Housing
Administrator,
I
have a good deal of authority that

housing market—and the market
of

it

job that

a

left to

As

large extent, today's

very

a

if

inevitable
will

usable

been

Either

all.

to do

you

has

now

call by you—for it

own program, and
sincere in formulating it

on

means

to

our

en¬

financing—and the in¬

others.

that

say

paid

in plant arid
equip¬
expenditures seems to ' be
reversing itself, and business loan

and

commencement

the

let

be to help maintain a sta¬
ble, continuing long-range housing
market that will not be subject

Housing

tended to do.
the

of the demands

to

your

you were

It

tions.

The continued

indications,

suggests

more
seriously not be turned up and down like
concerned, in fact, if housing were some sort of thermostat in a con¬
not sharing in the general
effort to adjust fractional
pros- stant
erity of the country.
fluctuations
to
a
preconceived

under

want

mainly

existing families for better
and
better living condi¬

our

homes

4.1

popu¬

We would be much

This uptrend in home

I

to you—and a

we

downtrend

omy,

able

means

Important among these are mi¬
nority families, who for the first

ernment

Act

will not meet any

It

increased

of preceding months—is consistent

terms

ing and in finance.

ing homebuyers—if homes and fi¬
nancing are? made available to

with this general level of

moreover,

to

is

Now

backwards fast—in hous¬

go

self-adjustment is taking
place. Although savings continue
high, other capital demands have

rate

activity.

institutions
to
on
the
same

available

are

as

to

and

planners of previous generations.

feel

homebuilding "take prompt action." It is always

in

1.3

terms

is

through

thi3
program offers a real test to the
private lending field. It is a call

higher

months.

recent

April

who

V

compared

the

the government controls

ket

of

private
lending
minority
groups

do

can

The other

make such loans available

private enterprise can
and
will
accomplish—is to just
provide homes for new families,
we are going
to go backwards—

—not

lar with previous Administrations.

vate

last August to a
high annual rate of $292 bil¬

of

country

VA-guaranteed loans

areas.

President

new

rate

this

all

these

You cannot

tinuously since
lion.

into

provement has affected the entire

in

a

insured and

left to self-adjustment rather than

national product will reach

—which

de¬

a

created family pressures for

its

rate

of

housing

ment level of 61.7 million in
April
indicate that this quarter's gross

The

of

by

financing needs of remote

it also further supports our judg¬
that the market should be

of

But

*An address by Mr.
-onference

rea¬

the

wanted
a

We did not think

FHA

We found

go

the

ountry.

ndication

of

place

enjoy the sunshine for worrying
C.bout the rain.
Now a sense of cautious con¬
cern

people
to

face

ment

concluded that this

action

risk

worry

exclaimed.

come

com¬

sound national market in order to

"Nothing to

chology

we

facts.

worry about."

nan

Some

per-

in

are

on

if

But

by

normal

certificates

or

ernment

have nothing to

y/rong with you—you
:

mitments

based

in

for

seeking

of

And this Act

expressed

nervousness

quarters

some

an¬

sonable value.

checking him

known

way

loans

on

in

the

April 28, clos¬
ing costs would have to be paid
cash

of the

some

VA

and

that

sage

April report should relieve

this

nounced that after

a

—the

of

spread

FHA

un¬

due importance to these reported
monthly rates—which represent a
highly variable benchmark at best

Taken

the

do

rate

can

designed

One is to meet the

small communities, by
private, lenders to pipe¬
line money and credit for FHA-

questioned whether

ment

as

speculative building technique

be

„

to

should not attach

we

even

the proverbial "dollar down." The
use

down, with all sorts of aches and
pains that he imagined it all to

.

urged

without

we

clining

'

is

and

areas

have

:

*

two purposes.

come.

Some

—

program

home

justed annual

While

found

private

areas,

who for

man

had

have

We

a high, prosperous level of
homebuilding for many years to

of
of

so
these actions can put an effective 1,407,000 the month before — a
really- brake on speculative building ac¬ figure significantly more in line
expert
opin¬ tivities until local market forces with better informed forecasts of
ions— and so^ have
brought supply and demand the housing level throughout the
many
differ-; into balance again.
year.

expert
opinions — to

This

'

-

Bureau

just

ad¬

market

many

ent

terprise.

absorb

new

insurance
of

come

now.-

The
—

that

money

had

never

am

can

economy

—if all that

lieve

was

areas

We

the

that

traditionally underbuilt and
traditionally un¬
served and ignored by private en¬

formations start to increase.

of

certificates

and

confident

that have

are areas

been

ac¬

industry—I

commitments at liberal terms, and
these
commitments > have V sup¬

'

follow market developments, and,
where advisable, to cut back on
commitments

private

Thursday, May 26, 1955

.

underfinanced

FHA

ported much of the high, volume

worked

market

of

rangements for advance mortgage

;

approach

between

progressive thinking and

.

operate. These

with

and

—

,

J

situations

have

available

family formation
financing became until the 1960's, when the large
available.
-;J,- number of postwar children come
Builders were able to make ar- of
family age and new family

'

not national

—

coordination

VA

and

The

larger supply of funds for

a

VA

would have to

these

to

sypply of mortgage

term bonds declined early in 1954,
'and

already been justments

We concluded that the

makes

Act

the

easier

savings continued at
high level, but the net demand
for
other
long-term investment
fell off. Interest yields on long-

instituted.

through

level

net inflow of

corrective action had

about

recent

the

ing Act of 1954. With the home
financing and community aids the

the

But

months

of

source

,a

decrying the alarm

recent

that

funds that developed in 1951.

Finance Agency

regarding excessive home building,
Administrator Cole sees home building on a very prosperous
level and the housng market in a healthy condition. Says high
level of housing is a good thing and reflects the general high
level of prosperity in the economy. Contends private market
is enacting its own measure of self-correction against dangers
of over-financing in housing. Calls attention to the Voluntary
Home Mortgage Credit Program, of which the Association of
Mutual Savings Banks is one of the sponsors.
In

of

passage

housing activity can"#>e found

an

By ALBERT M. COLE*

Administrator, Housing and Home

the

.Act.

.

savings

half

banks
new

of

are

the
par¬

program.

I

hope more of your members will

Volume 181

•

•

' *

*

•

Number 5432

'

"

-

,

.

.

(2423)

The Commercial and Financial Chronicle

,

'

*

join

m. However, unless
you send
the questionnaire
provided you

in

by

this

Association,

taxpayers also pay for the cost of

applications

Most

The Guaranteed Annual Wage

mutual

financing terms. I want
to compliment you for realizing—
earlier than some—that with the
income

of

recent

In

influence
of

this

in

great

willing

make

to

outside

field.

You

in

vjL

nority

housing

loans

usually in metropolitan areas,
usually in metropolitan arpas.
property inspections can be easily
handled. In many larger minority
projects, the program is placing
loans on a single project with a

of

group

lending

be among

'With

,

^e.

ers

managem ent

and

presenta-

tives
-.

the

of

various

sav.ngs

firms

,

.

in ,v?e a"t0"

funds.

panies,

insurance

banks

your

not

are

in

states

outsir'ie

„

gaining
demand

for

essary

able

•First, inform

of

submissions

tions.

VHMftP
VHMCP

Second,

round

know the

that

so

of
ot

out-of-state participaby mutual savings banks has
been nearly as effective as it

not

should
W„

is

as

stated

pos¬

income

secure an

employment fully, are laid off

for

be

this

in

ofnpp

good

are

success

o

better

no

of

limit

the

payroll.

y *

its
cost to the firm
to

rate, Ibutdhe tola lot.these cannot

part of the year.

hppn
been

a

are

of

proposals one can
which will achieve each

.the* UAW

find

one

goal,

exceed the maximum charge.
Once the reserve fund is estab-

listed the cost to the firm dePerJs on the number of eligible

This is not

to

as-you-go
financing system the
cost of maintaining income pay¬
ments to those currently

laid off is

charge against current receipts!
means that
the cost of the

a

This

sales

in

the first

with

begins

guarantee
decline

and pro¬
in the lace

orders

duction and increases

This

cost

sales and
output.
impact severely handi¬

caps

the

firm

declining

of

in its adjustment
situation. On the

market

the

to

other

hand,

the UAW points

as

guarantee

vides

at

which layoffs begin pro¬

the

layoff.

point

the

incentive

greatest cost

the

prevent

to

management

to

of the
in time

cost

the

focussing

It is thus the

pay-as-you-\

principle which is supposed to
Continued

which is designed to

an

plan at¬

combine the pay-asyou-go method with the reserve:
method. Under a complete pay¬

the UAW thus has thought up a
„gimmick"

UAW

all the

of

First

tempts

be made

can

are

they necessarily lead either to a
compromise, in terms of goals, or
to
mutual
incompatibility.
An
examination
of
a
few of these
conflicts will illustrate the point.

provision for reinsurance. For althat

"specifics"

the

if

but

examined in relation to each other

If the charge is that the

mQst any charge

irreconcilable.
If one
socalled "specifics"

the

examines

particular firms may be

on

offering of these shares for sale, or an offer to buy, or a solicitation of
any of such shares. The offering-is made only by the Prospectus.

an

page

37

offer to it\.\

f

400,000 Shares

.

cost, production schedexpansion and the whole

respect to

nPW

uling,

The other essential features of
the proposal are concerned with

•

reducing the impact of a guaranteed wage on the f£"eed0m °f

of management prerogatives,
In °ther words the UAW wished

area

C."
«r •

operations of .the firm and the
but where they
*alg which wou]d be as palatable economy. To reduce the size of
than the conpossible to management
The reserve accumulation it is pro-

StSrivSte
Sri lnln! hfVp
dred
l°ans
have

of

selves

cost tor Particular tirrns may the
oe
excessive the answer lies in

workers drawing layoff payments
same time minimizing the impact currently plus any rebuilding of NotaNewIssue
frppriom
nnoratinn? nf the reserve fund, again not to ex^ and "Jhe economy with ceed the maximum charge.

wherethf= prospects foi
.1 Z
where the

piogram

will

of

tions

will be the cost of paying for cur-

ize

be.
nr~

some

matter how ail-

no

which will achieve a
goals which in them¬

designed
series

during

we

formation,
tion

to

maximum

up

?bll,1y o£ lhe industry to stabil-

-ent n- thi~ insent us this in

have
nave

von
you

period
This

charge.

,.

Irreconcilable?

Goals

principles,

go

annlieaapolica

B

few
lew

given

the reserve fund. built until the
Thus,
reserve, fund
is

steady,
the year

as

its members

for

any

new

encompassing they may be, can be

out,

A secondary objective may be
will know
said to be the desire to achieve
to whom we should send applica¬
the major objective while at the
tions for your review.
Because

contractors,

If the charge is forced
in
business opera-

inflexibility

of

^a*ir?um C.hurge'-+Si^h P3^™611*8
Jail be met by withdrawals from

guar-

a

f°Y,!"embe(r3' vYh° bfecau3e °f

of your local loan

names

First,
employment

sible; second, to

would like to

we

two:

full-time

local contrac-

your

charges is limited dur-

of such an
dimension cf

strategy
a

Unfortunately,. however, no set

tribution rate. If the cost of cur- provision limiting maximum liarent layoff payments exceeds the bility to a percentage of current

its memThe major objectives of the

bers.

"of your'into'estinreceivrng

tors

cartwright

by the UAW for

UAW .are

do two things:

to

you

W.

anteed annual wage for

con¬

their

u.p

me

is

__

0

This makes it urgently nec¬

own.

answer.

.

,

and

the

Are

*■

0

dimension to
*
area 0
collective bar¬

com¬

to commit themselves to loan

tractors

.ls n^w

other things you can
life

reasonable

No

collective bargaining.

they point to the provision
graduation of guarantee paycharge, . which is the other keyments rights
If the charge is
feature of the plan, will be a cercreating immobility of the labor
tain
percentage of the current force they point to the provisions
payroll,
the
percentage
to
be requiring laid-off employees to be
negotiated.
The charge for cur- available
for
suitable
employrent
layoff benefits is the first ment. If the charge is increased
obligation against .the maximum rjsj^ ancj curtailment of economic
charge. If the maximum charge expansion they again point to the
at any time exceeds the cost of
graduation
of
guarantee
paycurrent layoff payments, the ex- ments
rights.
If the charge is
cess will be applied to the con- heavy fixed costs they point to the

ing

ro°bile mdus-

Unlike

two

maximum

the autowork-

they are willing to operate, both in their own states and
outside, in order to reach these
areas
of
inadequate
mortgage

do.

a

representing

in which

are

to be

liability.

banks could extend the territories

There

seems

these

r e

helpful if mutual

In addition a percent-

charge even before
one can deny the

the

approach to

"proposals and come up with what

"

_

off

wisdom

Workers-C10

communities, it would also

be very

economically unsound.

employer.

most

institu-

remote

to

sort of a guaranteed

,.

them.

respect

smaller

y

'

Jt

the

are

part

the subject of

on

+

tions. I hope mutual savings banks

will

the

out of the present negotiations, he

grow

claims of the unions

become

may

some

examines

even

significant development in labor- age (to be negotiated) of base payjf one charges that a guarantee
manaSement relations in the post- roll known as the contribution rate 0f an annuai income for auto
vvar Pe™d is now the subject of is charged against current pay- workers would be too costly they
negotiation
roll of the employer tostated limit p0jnt to the provision of a maxibuild up a
provision
i
lu e
reserve fund to some
mum
limitation on
employers'
Detween Auto
th
(also negotiated).
The sum of
United

or

are

small

some

y

,

What

mi-

to

open

As such

occupancy.

finds that

mi¬

nority borrowers—or for rental
cooperative

v/ill probably

wage

areas

loans

Cartwright critically

Mr.

wage,

proposals, and although holding that

being

communities to

your

annual

teed

can

by

of the United Auto Work- y
regarding the guaran¬

with the automobile manufacturers

ers

increase your

assistance

of Labor Economics,

Institute

Director,

discussion of the negotiations

a,

years,

minority families are now
qualified for home ownership and
make good borrowers.

be

who has read

guaranteed annual wage can
help but be impressed with the
wisdom and strategy with which
the UAW has drawn up its pro¬
posals for a guaranteed employ¬
ment plan.
It is obvious that a
great deal of thinking, planning,
and research has gone into the
development of the plan. This be¬
comes apparent when one realizes
that no matter what charge has
been leveled against such plans,
the UAW can point to what it
refers to as the specifics of its

University of Washington

many

I believe you can

one

the

By PHILIP W. CARTWRIGHT
Assistant

to equal

in

it is made.

No

of the literature

savings banks, I
believe, have long recognized the
equal right of a minority borrower

rise

head

unemployment compensation.

The United Auto Workers and

cannot be referred to
you, nor can
you be considered as participants,

i

15

^1"
made

dev^se

plan

a

or

set

propos_

^ of

refers to

Price $37,125 per

would also help the firm whose

"specifics" of the

as

Par Value $1 Per Share

posed that reserves of several or
a" firms be pooled. This proposal

the UAW> consisting of a
set of principles which the union

a

Common Stock

plan' has been set forth in a pub- sales and employment are relaSt
Nation of the union entitled "Pre- tively unstable.
Such a firm
of the 2,5«).-paring a Guaranteed Employment m.ght, fmd the cost of on its own
mamtatning adequate reserves

share

d^rof ADdl^nd^' indication

tho

aLosfhalf

of

case

an'

applications then in the hands of

particinants.

^

The

UAW

essential

The

to

Proposals

UAW
proposals designed to
fine support to this new
approach to some of our pressing follows
be
problems. I want to urge all of guaranteed 40 hours work or pay
you to join in, and to increase for all weeks in which he is called

^verv^workerS wilf

I

support.

like

would

conclude

to

acknowledging

ciation

to

such

of

leaders,

your

Morgan,
who
the President's Advisory
Robert

as

served

some

this

my appre-

on

Committee, and Harry Held, for
the constructive help and cooper-

industry- This is known as rein?<"ran.ce' Pr , *n ,s,?me P*aces as
.

Blyth & Co., Inc.

Smith, Barney & Cr*

Kuhn, Loeb & Co.

<

Ilarriman Ripley &

Goldman, Sachs & Co.

Incorporated

Kidder, Peabody & Co.

Hemphill, Noyes & Co.

Merrill Lynch,

Lehman Brothers

workers

All

work.

who

have

'

_

c

they have given in helping

ation

to formulate our housing program,

and

in

gress

work.
well

supporting it before Con¬
in helping

—

to put it

to

I want to ask—for them as

as

for myself—the full back¬

ing and cooperation of your mem¬
bership.
We

have

established

of strength

coalition

in housing

a

and

strong
purpose

through common eiiorc

and consultation—within the gov¬

ernment, between government and

private* Industry,"
That

community
stantlv
y

seek

to

and

must

'strengthen
8

con-

and

preserve.

The

of this coalition,

is private enterprise—
acting not only in behalf of its
own
self-interest, but in the na¬
tional interest as well. In housing,
actions speak louder

than legisla¬

tion.

indefinitely
over

with

rather

each

of

amount

than

starting

benefit year. The

benefit

payments

.

employment compensation would
be deducted from the employer's
liability.
This, of course, would

ably larger than the present state would permit. Moreover, it proPayments which average about vides an incentive for manageone-third

of

the

action, first of all, be

yours.




weeks

52

normal

pay

maximum

of the
is,

of

ment to work for

improvement in
adminisstandpoint of

the state laws and their

tration

from

the

size and duration of
mum
payments. In other words, mansystems.
agement in the auto industry
The plan provides for financing might thus be induced
to work
twice the 26 weeks maxinow
provided under state

course,

by
and

that

.

.■

_

-

r<

,

,

worker. The duration of payments

keystone

however,

Let

I

"within "the w°uld Presumably be consider- reduce the cost it the state laws

wp

Pierce, Fenner & Bean

Passing the buck,
Union Securities Corporation
Stone & Webster Securities Corporation
Workers who are laid off must
Dean Witter & Cc.
Walston & Co.
seniority (i.e., three months' serv- register and be available for suitSchv/afcacher & C %
ice) will be guaranteed an income able employment elsewhere. This
F. S. Moseley & Co.
Paine, Webber, Jackson & Curtis
sufficient to maintain f n o r m a 1 is
similar to provisions under
William R. Staats & Co. A. C. Allyn and Company American Securities Corporathj
standards
for
those
weeks
in state unemployment compensation
Incorporated
which they are laid off.
This systems except that suitability of
J. Barth & Co.
Bateman, Eichler & Co.
A. G. Incorporated Co»
Becker &
benefit payment will be guaran- employment would be determined
Central Republic Company
Crowell, Weedon & Co.
Francis I. duPont & Cc*
teed on the basis of one week's by a* joint board of union and
(Incorporated)
Honker & I'V?
layoff pay for each two weeks management.
There is presum- First California Company
Hill Richards & Co.
ncorporated
*
worked since acquiring seniority ably the added incentive to the
Mason Brother!
Lester, Ryons & Co.
up to a maximum of 52 weeks of
worker to take another job, n E. F. Hutton & Company v
Sutro & Ca»
Reynolds & Co.
eligibility. This is known as the available, since he retains hrs
Mitchum, Jones & Templeton
Incorporated
graduation of benefit rights pro- guarantee
rights in suspension
Alex. Brown & Scm
Robert W. Baird & Co.,
vision and is one of the two key thus lengthening his period of se- ; Tucker, Anthony & Co.
Incorporated
Elworthy & Od»
features of the plan.
This pro- curity.
Brush, Slocumb & Co. Inc.
Davis, Skaggs & Co.
vision is similar to unemployment
Finally, the proposals provide
Irving Lundborg & Co. Wulff, Hansen & Company Bingham, Walter & Hurry, fe,
compensation except that the-that any payments received by Blunt Ellis & Simmons
^\
Ferris & Company
The Illinois Compan/
worker retains his benefit rights the laid-off worker from state unIncorporated
fo

talk by

By pooling re-

prohibitive.

any heavy layoff it might ex¬
perience to the other firms in the

Many of you have already been

giving

that

be

s!rY??.iLCan.sl?"L?^!: °£ «!<; cost
of

the

of

features

Copies of the Prospectus may be obtained from any of the several mocV*
writers only in states in which such underwriters are qualified to act as
dealers in securities and in which the Prospectus may legally be distribuh d.

two

methods,

reserve

to pay

pay-as-you-go
financing. A charge

for current benefits is made

against the current payroll of the

eligibility^

tQward

fhe

hiftj

cost

John C. Legg

First of Michigan

Lawson, Levy &

Stone &

°

Corporation

Harbison & Henderson
^

Howard, Weil, Labouisse,

(

Friedrichs and Company

Nauman, McFawn & Company

Newhard, Cook & Co.

Stern, Frank, Meyer & Fe s

Stephenson, Leydecker & Co.

Incorporated

May 24. 1955.

Morgan & Co.

Daniel Reeves & Co.

Hopwood

Campbell & Robbins

Kerr & Bell

McDonnell & Co,

McAndrew & Co.
Incorporated

Revel Miller & Co.

Youngberg

of this

guarantee as far as possible to
firms in other industries who as

Bosworth, Sullivan & Company,

Williams

Reinholdt & Gardner

Piper, Jaffray &

Pacific Northwest Compaq
Inc. Fewel & Co,
Robert Garrett & Sons
Gross, Rogers & Co.

McCormick & Co.

& Company

Wilson, Johnson & Higgins

Henry F. Swift & Co*
Holt & Collioi

Edward D. Jones & Co.

Yarnall, Biddle & Co,

16

(2424)

The Commercial and Financial Chronicle

for
growing interest on the
part of investors in this divi¬

THE MARKET... AND YOU
By WALLACE STREETE

if

By ROGER W. BABSON

if

Some stocks seemed to be

suffering

longer

than

Asserting industrial aad chemical research, and not Federal
aid, is the farmer's best bet, Mr. Babson tells of the work

usual

from poor first quarter earn¬
good work gener¬ mand, the former finding
favor on the introduction of a ings. In mind we have Westupside late last
week, which resulted in giv¬ new series of drugs for the inghouse, Alco Products, Allis
All

ated

higher reading

a

stock

market

since

early April,

avail.

For

table, the first mental

the

to

was

recovery

V

if

was

this

ton into the

dull

as

witnessed

1954

market

a

on

12

if

• ;

if

if

y//-••/•••'

turned

The Short Position

cover

been

to former

There

little

was

and motor sections

sessions.

re¬

On the

steel

both

in

if

if

although

much to

veloped in the

Wednesday

not

*

Mercantile issues held to

strong group

od. The
*

if

;
,

/

..

'/

Snap Back in Aircrafts

tax

possibility that

windfall

will
on

effected

Wednesday,

mostly

Friday and again

on

this week, amounted
to

seven

last been

Thursday

Tuesday

than

and

12

points.

Boeing, Curtiss-Wright

Republic have

back

come

*

design and
of all such equipment.

if

do

expressed

not

in

this

necessarily at

coincide

with

those

any

the

of

Chronicle.

They are presented
those of the author only.}

as

now

more

realistically priced,

secondly, the public is
better

informed

negotiation

little

a

about

re¬

under

moves

Renegotiation

and

the

Act of 1951.

Metal

Products

The

tinued

Allied

chemical
to

find

chalking

shares

favor,
up

the

con¬

im¬

proc¬

ries

and

pilot

con¬

with
best

two,

a

week ago, while

added

Monsanto

better

static

precipitators

for

and Dow better than
if

if

a

than

three

point.

if

The pharmaceutical
issues,
particularly V i c k Chemical
and Chas.
Pfizer, were in de-




removing

solids from industrial gases, smoke
and liquids/
Manufactures piston
rings for aircraft engines and

heavy

duty

diesel

.and

for

elevators,

motive

additional

plants

facilities

other

engines

of

government

all

transmission

kinds.

consists

(7) Research
—Is conducted

units

located

22

pilot plant

at

locations.

in

a

No

number

less

processes

than
said

are

trol

experimental operation at
present time, including con¬
and

flow

of

automation

ium ores and metals.
nection

of

and

it

has

been

for

In this

into

an

agree¬

ment with

:

.

Pe2edBt0.

.

™

business and

in

the

Chemurgic
i

i

?JC1S

■

Movement

said

to

be

the

I

recommend

prices near current levels and be¬
lieve that the present
yigld return
is

perfectly

earnings

safe

and

probably

that,

with

pointing

sig¬
fair

a

an

increasing dividend

•

cum.

Common
Earned

taxes

preferred
stock

$10

stock
par

surplus

Book

value common
Earned per share common

Dividends
Common

common

per share

range—High
Low

Margin of Safety—
(Pre-tax profits Net sales)
Cur.

assets + Cur.

liabilities

of

or-

-

poorer;

~

our

For, example,

a

Targe number of

elements are found in
meal, and fish meal.
Fish

crab

ii.

pr0dUcts contain aluminum, bari-

c^ium, chromium,
fluorine, lead, lithium,

copper,
magne-

sjum> manganese, nickel, phosphorous, potassium, silicon, silver,
SO(jium,
strontium,
and
zinc!

Truly

Foundation.

the

of

resources

the

sea

provi(je plenty of
opportunity for
the new College of Fisheries at

ii?ii
Wheeler McMillen of
The Farm
Journal.
The idea was to encour-

m*°YS£eniiWas

the

Gloucester, Mass.
-

lead to

Phila. Sees. Assn.
Annual

beginning, I supported
council.

of

tional

Farm

was

this

year,

by

a

organization

Council

old

Chemurgic

superseded

larger

the

outing of the Philadelphia
Securities Association will be held

for

Council

pa„ Robert E. Daffron, Jr., Har& Co., President of the As-

and'nson

called

the

Agricultural

Chemurgic Research.) The

Friday, June 3 at Huntington
Valley Country Club, Abington,

Na-

new

sociation, announced,

and

1953

1952

1951

1950

$

$

$

137.562,000 265,410,000 323,132,000
287,954,000 212,397,000
13,420,000
25,456,000
22,549,000
30,982,000
22,912,000
22,517.000
23,766,000
25,112,000
26,869,000
25,915,000
15,000,000
15,000,000
15,000,000
15,000,000
15,000,000
19,932,000
18,671,000
18.671,000
16,171,000
16,171,000
45,462,000
44,726,000
40,968,000
37,623,000
25,457,000
51.24

51.97

49.96

48.95

2.77

41.33

4.51

4.29

6.32

2.50

will

continue

jn

receipt

2.50

2.50

44%

41%

49%

47%

37

29%

28 >/4

35%

36

24%

3.00

7.15

9.59

6.98

10.76

4.71

10.79

4.88

3.02

3.16

2.70

are

of

en-

vvill

of pew crops and

ery

to

new

be

traded

at

char--

the

fourth

an-

nual stock
exchange, one of the
crops. In addi->
tion, if; will set up the machinery- high-lights of the outing,
p
MrCov
to co-ordinate the
chairman 0f
various agri-. 'John p*

actenstiys of old

cultural-chemical

Farmers'

are

sons

research

proj-

be, ^rrfiP

being undertaken, stated

should learn of this

o m mi t

f

f

that at the conclusion o
*bls ^.ear s
in keeping with
the times, there will be a proxy

before leaving the farm
for
city employment.
contest.

The

most

20

shares

members
wil

voting

receive

gift
entitling them to two
*ree
course steak dinners at
scientific farm research will have
Barclay Hotel. The meal
the wholehearted
support of sci- tificates, it is pointed out, should
ence, industry, and government, have particular appeal to the udFarmers

Diversify
hope that the activities of this

I

It

Must

takes

search

time

to

certificates

any re- coming
crop of 'summer bachespecially elors." George A. Bailey, Jr. of
George A. Bailey & Co., is in
field as ag- charge of reservations,

expand

facilities;

it

takes time to co-ordinate
research
so

large

a

This wider approach to
problem is not being undertaken any too
soon, for there is
now
a
great need for American
farmers to
the

diversify

duction

and

look

their

more

to

pro-

indus-

NowKnraer
INewDUrger,
Newburger,
Broad

Such

lead to

diversification

more

should

members of

stable economic

con-

ditions.
This need for diversification of
farm products is so apparent that
the Council chose "New

Crops"

as

the theme of its March meeting in

Columbus, Ohio. It

may seem odd

I neh
LOeD

Loeb

Street,

trial, rather than food, consumpExchange

tion.

6.81

2.50

w,,

Members of the Association

new or-

handsomely
engraved stock certificates, with apcourage individual research
proj- propriate
coupons attached, that
.ects looking toward the
discovganization

activity in

Balance Sheet Items, and
Operating Data

an-

nual

allying chemistry with agriculture has grown
tremendously. In
March

Oiling

PHILADELPHIA, Pa.—The

of

riculture.

$

before
Funded debt

v

the

Koppers stock at

is possible.

sales

storehouse

a

than

These

chemical

work

property,

richest in the world.

through laborato¬

1954

Net

more

coastline.

with every hard
eans> into wMch the
rivers empty, are
getting richer.
rain

prva5' President
An-

,

along

of

are

getting

pohti-

In an effort
to
improve
the
demand of that era, the
National
Farm Chemurgic Council
was organized at an historic conference

af!i,

la^nd

our

miles

ganjc and
inorganic, matter of
great actual and potential
importance to industry. As our soil is

Began

tanium

KOPPERS COMPANY

Profit

of

4 8q0

»

i-r

..

Council
wealth

st

circles.

How
,

n

the

studies

oceans

In those days, the farm

ects which

chance for

Capitalization, Selected

?°J

vvas

discussion

field,

encourage further
the mineral and other

cradled in the two great oceans.
These flow up to the very-door-

seemingly a more
arrestmg public issue than it is
today. At least, it evoked more
cai

Needed

#

economic

problern

Is Also

•

of

ST

and what happened to the
rest of
the economy as a result of the
decline in
the
farmers

position.

Research

In addition to their work in the

.

agricultural

.

+£

farTf

u

■

could
,

we?*

*

v

^

*e™e™ber

Republic Steel to proc¬
ess
titanium metal from Repub¬
lic's huge new-found Mexican ti¬

nificantly higher for 1955,

tanks.

con¬

reported that

Koppers has entered

Development

and

Marine

wtuvi

Since then, the whole
movement

to be in

units

power

gun mounts for army

4rf>

about

ma¬

blowers; makes electro¬

about five points to

its value of

duPont

industrial

chines; manufactures Aeromatic
Aircraft propellers and industrial
fans and

erratic movements.
This issue
on

J^e

cancer

From

Pittsburgh and Verona, Pa.; with
of

the

Division—

design and manufacture of ship¬
board gun mounts, aircraft carrier

overall gain in the
weekly
period despite a few
days of

tacked

between

power

Work

Strong Chemicals

tents.

LUUI1U

the aims of this

responsible Designs and builds large and small producing a variety of chemicals,
for the
recovery of the air is¬ gas holders for utilities and in¬ plastics and petro chemicals; a
sues;
the long setback has dustry. Produces a self-aligning process and pilot operation for the
coupling device for transmitting reduction and processing of titan¬
eliminated much of the
spec¬

this
liliO

Ha-

Islands, both of which
miraculous
vitamin
con-

have

it—

!? 1IJ.1935 a? Deafborn> Mjch.,
auspices of Henry Ford

are

ulative runup since the 1953
lows so that aircrafts are

be-

of

expansion
of
markets
for
American farm products to
be
used as industrial raw
materials.

addition, its technical staff is
stantly at work developing

(6)

Two factors

time

corti-

an

plants for beneficiating iron ores;
and designs and constructs com¬
plete steel mills on contract. In

esses

*

article

of

source

phylanthusenblica from the

under/the
views

Southeast;

waiian

or

country which could
J
W111V11
easily erupt into a serious social

2,825 shares from 49,450.

Security I Like Best

provements in the

five points.

some

t
v

n

ii

afarmprob.

lem All
IC1U
in

representative in that two

Continued from page 2

The

e
w

perhaps

month

a

roughly

Dynamics it

some

factor

m

in

age research which would

points for Douglas,

measured

dominating

and

McDonnell, North American
Aviat'on and United
Aircraft.
For General
Bell,

the

suits has

n
ii

paper

drugs; new varieties of
castorbeans; canaigre, a wild root
plant of high vegetable tannin;
and acerola from Porto Rico or

Despite

Roger W. Bab.on

to

settlement of

The snap back in the
air¬ the "lifo" recovery

r
«

the

plant

scorea, a
sone-like

two

best-in-

cause

issues alone

|The

of these

some

some

accrue

past

in

of

source

program

was

ular advance.
if

a

during

good

a

price-support

if

provided most of
buoyant tone for the second the 114,668 share reduction
recovery week running, leaders here, for the month -Grahamin the aircrafts
which had including Gimbel, May, Fed¬
been on the skids for
Paige dropping to 2,400
more erated, Allied and Macy add¬
than two months on
shares from 44,000 and Hook¬
profit- ing one to more than two
taking from the long spectac¬ points to values for the peri¬ er Electrochemical
dipping to
movements. Most notable
the much heralded

crafts,

e
c

a

T V'.'/\ *•

•

week since last

some

dio-

oc-

tentioned gov-

Big Board 81 of the

larger totals

suc-

cessfully

the

the Ameri¬

or

bamboo,

years.

few of the smaller while three issues
were
un¬
volume figures left steel
companies can claim
changed. The figures were
be desired, there de¬ some
plus signs.

While

drop in

PulP which has been grown

the

16i short-position issues had

in recent

Leaders

if

.

top levels has
the

on new crops
such heavy sur-

have

we

There is every reason to believe
it will again pay off. New
crops
now being studied include timber

aware

curred

v;

of

concentrating

when

pluses of old crops, but such research has paid off
handsomely
before, as in the case of soybeans,

which has

be

to

dipped on
if
the Stock
Exchange it was
major factor higher on the junior mart.

heaviness

oceans.

farm income

in¬

Exchange market, other

Apparently a
in the market's failure to

to be

pretty
I am

of the

curb¬ groups are now modestly ago.
77 issues showed de¬
under the levels of a week, clines in
their short status,

ing shutdowns.

doing
well,
keenly

.

than while the total

if

Re-

search—not Federal Aid—is the
farmer's best bet. Although most
American farmers appear to be

toward

eyes

if

was

session under the

if

has

week.

to

Day holi¬

Chemical

the gleaned as market ammuni¬
leaders in this highly impor¬ tion from
the recent report,
tant industry. Aluminum Co. on
the short position of either

And

Exchange policy of
*

V

growing shortage

aluminum

vestment

was

date

the first Columbus
new

as

Tuesday.

remember, Oct.

day market

of

have to

12,

back to Oct.

go

find

and

good favor.

to

we

Industrial

Investigation by Washing¬

in the market

juncture;

in

if

the of America and Kaiser Alumi¬ the Big Board
the grow¬ num got a big play early this can

disappointing

ing disinterest

if

•>.

V

bullish element

and

provement in second quarter
ready to unveil several new
figures could snap these back
items of import.

no

And interest dried
up so fast
that there is left in doubt
just
whither are we bound now.
V

mineral and other wealth cradled in the

Chalmers, Bucyrus Erie, Col¬
prevention of
illness. Pfizer is about gate and Pullman. Any im¬

treatment

stopped short of retracing the
ground given up since fresh
tops 'were reached in April.

Most

Chemnrgic Council. Says farmers must
diversify their production, and also urges more research of

the

ing the week

at

of the National Farm

the

on

Thursday, May 26, 1955

..

Agricultural Research

sion of the market.
if

.

New

AAA*
Adds
Co.,

York

15

City,

the New York Stock

and

other

that

announce

&

the

exchanges,
following

Registered Representatives have
joined
their
organization;
Mrs.
Lilliam

Cohen.

H.

Bendel,

Conrad

Richard

D.

Cohn, Percy G.
Melville, C. Ramsey Siegel, Louis
H.
Singer, Leon J. Sutton, and
Irving D. Taub.
•

Number 5432

181

Volume

.

.

The Commercial and Financial

.

its

during

Americans

York

New

purchasing

cline has varied from year to year,

Economics
Commerce, Accounting and Finance,

of

Its rate of de¬

purchasing power.

Assistant Professor of

School

those devaluations,
savings, pensions, annuities, and
interest-bearing securities, saw the

When

preserve

gold

the

to

return

we

standard the coins will be smaller

elementary explanation of our
system, of which he states the peculiar and

Professor Patterson gives an
current monetary

for the real money-material is closely associated with
other basic freedoms and is a vital part of the mechanism

when you
step into a bank, hand the
some paper money, and re¬
in exchange gold coins. All
needed

There
could

teller
ceive
you

the

were

time

a

was

ap-

could

and crisp

only

as

as

itself.
They could be

is

gold coin. For

Robert

Patterson

T.

people's con¬
gold
minted in different de¬
nominations. The commonest were

can

they

when

you

'counter.. Gold

money—it was

form of

Paper

currency

of
gold that—if the gold standard is

pieces for your paper money.

Over

the

the

gold

hasn't yet

of

when

was

ever

we

were

tory—the

if

ways,

dom

and

peculiar feature of our pres¬

situation is that al¬

though we can't exchange paper
dollars for gold, foreign govern¬
ments
and
central
banks can.
Their
dollars
and
their dollar

ultimate controllers of
and governors of
money
supply. Al¬

in gold
moment's no¬

redeemable

is redeemable,
halt to the waste
of official¬
it threatens to dissi¬

call

when

pate the wealth they have
is

It

labored

obviously

an

dollars they
hold just as if they were gold, and
they trust our Treasury to con¬
tinue to redeem them as it has

not

free

to

obtain,

gold behind their dollars that
in great abun¬
dance.
It is undestandable, like¬

the

that those who favor a
government - controlled economy
are utterly opposed to a redeem¬
wise,

able currency.
No matter how great our
of

gold, it can't serve as an

matic regulator of

hoard

gold

internationally, the dol¬
lar is the standard money of the
world. This situation is ironic, for

standard

have
currencies,

governments

their
them

own

ta small

Of their former values.




fractions
r.

The

new

officers

sales, Eugene T.

in charge of the trading
department; Homer G. Bradney,
(formerly manager) in charge of
the Jacksonville, 111., branch; C.

(formerly manager)
of the
Alton, 111.,
branch; Leslie V. W. Schrader,
creased productivity.
(formerly manager) in charge of
(11) "Promote maximum em¬ the Belleville, 111., branch; Walter
ployment, production, and pur¬ Fassel, Frank E. "Pete" Jenger,
chasing power," the declared pur¬ and Miss E. A. Zuschrott, Vicepose of the Employment Act of Presidents.
D. M. Bollinger has

of scores
progres¬

1946.

of

•v/

equal to 510 grains of gold, now

End

central banks.

grains. To¬

(13)

100 francs will scarcely buy
what one franc bought before a
day

the

Minimize

elaborate

money

need

for

and credit con¬

in

Keehner,

charge

appointed

Secretary-Treas¬

in charge of internal opera¬
With an optimistic eye to
the future and in anticipation of
its 25th anniversary
on
Nov. 3,
the firm also announced plans to
urer,

tions.

expand its sales and sta¬

further
tistical

trols.

rotted away

B.

been

the discrimination
against American citizens and in
favor of foreign governments and
(12)

units.
A hundred
French francs, for example, once

"

This

announcement

is neither

an

offer to sell

The offering is

departments.

nor a

solicitation of

an

offer to buy any of these securities.

made only by the Prospectus.
May 26, 1955

New Issue

361,282 Shares

Penn-Dixie Cement

Corporation

Capital Stock

our

currency

would be but a
In today's

Subscription Warrants evidencing rights to subscribe for these
one share for each six shares held, have been issued by the

shares, at the rate of

Company to holders of its outstanding Capital Stock. The Warrants expire at
3:30 P.M. Eastern Daylight Saving Time, on June 10,1955. During and after the

subscription period, shares of Capital Stock may
as more fully set forth in the Prospectus.

be offered by the underwriters,

Subscription Price to Warrant Holders

that pur¬
it cannot

$27.75 Per Share

redeem-

can

be ex¬

be obtained within any State from
regularly distribute it within such State.

Copies of the Prospectus may
any

Underwriter who may

mole-hill.

world of inflated and

depreciating currencies the money
units of almost every country have
fallen to a fraction of their former
values,

($1 Par Value)

Transferable

and some have become
They depreciated when

worthless.

they could no longer be

redeemed'

and

Burns,

auto¬

done for many years.

of

have
have
interest in
they

stockholders are Shelton W. Moz-

the money sup¬

panded without limit. The quan¬
tity of it can rise to astronomical
heights compared with which the
mountain of gold at Fort Knox

degraded

firm.

if they wish,

ability

manv

,

(10) Assure all segments of the
population the
benefits of in¬

impediment

Foreigners value the

foreign

financial

a

ley, in charge of

Encourage investment and
assure a rapid
resumption of in¬
vestment
whenever
savings ac¬

money

series of devaluations

and

appointed

acquired

progress.

cumulated.

possible

Eight new Vice-Presidents
been

the veil of the

best service

its customers.

to

(9)

that

sively reduced the gold content

contain only about 4.5

to renoer tne

all who labor that
will be higher in

Tear away

of management, it was

form

stated, has been carefully planned
and designed to perpetuate active
interests in the firm and thereby

the

our

ports to be a claim upon
be
redeemed.
Without

most

have

Assure

a

"money illusion" and facilitate the
economic calculations essential to

nothing of the bitter
that

announced its
partnership to a
corporation, effective May 18. The
has

from

change
new

Social Security benefits,

(8)

and

zle

Building,

higher wages
real buying power.

present-day democracy that
the citizens of a free country are

of

ply so long as the paper

thus on the

and

Corporation

Mo.—Fusz- SchmelCo.,
Boatmen's Bank

create.

to

that

Because we are

say

countries

their

Restrain unwise fiscal and

(6) Assure the future worth of
life-insurance benefits, pensions,

a

It

a

They

New
ST. LOUIS,

tracts.

dol¬

abroad,

and shameful experience

Fusz-Schmelzle Go.

in the

Assure equitable treatment
both parties to long-term con¬

for

would result.

of

Preserve confidence

(5)

content so that the gold
back more dollars—

and

sound and

money.

largesse

should be, whether we are
full gold standard or not.

right and proper

(4)

a currency

can

reckless

they
on

sound

be—as they

can

tice.

is

gov¬

the mone¬

the Treasury holds

without limit.

are

(3)

can

home

honest

nation's

the

backing for them is
greater than that held at most
times between 1915 and 1932, the
modern part of a long period dur¬
ing which Americans could ex¬
change currency for
gold coin

credits

at

would then be removed, and

would have instead the protec¬

we

dollar.

They say
nothing of the inevitable and per¬
manent cheapening of every dol¬
lar,

irredeemable cur¬

vantages of an
rency

dollar.

smaller ones, however.

the public purse

far larger than
the gold stand¬

bullion at almost a

have

per

simple act of Congress. can make
it so. All the dangers and disad¬

(2) Be the best available insur¬
against a flight from the

cheap-money

throughout most of our his¬

were

they

ent monetary

we

$35

of

rate

be re¬
estab¬
ounce. A

the

at

ance

part of what they owe.
and

gold

ordered

many

so

The

currency

our

in

tion and the benefits of

(1) Prevent further and indefi¬
nitely prolonged depreciation or
loss of the dollar's buying power.

(7)

in effect cancel

and

standard.

Thus, by way of the gold stand¬

ard, the gold

A

an

difficult to re¬

requirement now lack¬

that

is

ing

gold

them.

gold

other ard, the people

today there is much
in circulation and

when we were on

currencies for

dollars

lar's gold

would—

deemable in gold

exchange

advocates favor reducing the

evidence

complete

own

Inflationists

public's low estimate of the
value of the currency foisted upon

currency

bank deposits are

a

of the

depositories there's a veri¬
table
mountain of it—over $21
billion worth—practically all in
the form of bars or ingots than
can
readily be minted into coin.
Although

more

of
their financial incompetence and

gold

more

their

alterna¬
forced abandonment of the

be

would

has plenty

firmly .established... on., the
standard. At Fort Knox and

It would enable them to

The

practices.

1/50 of

Foreigners in debt to us would
another dollar devaluation.

gold standard—would be political
catastrophe for those in office. It

gold—several times as much as

there
.

tive—a

standard

United States Treasury

and

tary authorities to return to

States
and
returned to it. But the

ago

off

went

officials

ernment

United

years

'20

maintained—compels

be

to

gold

longer

no

can

people

financial

get

You

the

tion, they can cause an outflow

primary
money it¬
was
the

freely exchanged for it. ;
'

of

lives

the

they

that

for gold, when they
deem it necessary in order to pro¬
tect their savings from deprecia¬

gold that could be

claim check for

ilk—know

presented abundant
fully re¬

evidence that a currency

of 1/35.

of gold instead

like

paper money

the

upon

destiny.

sovereignty

tion's

the

was

ounce

In it he

1954.

course,

A dollar would then be

themselves
then
over their na¬
finances.
By
exchanging

The

have

their untarnishable

"rang"'them

.pocket or

self.

the

the clear "true" tone
jingled them in your

and

luster,

which

people when every citizen has in
his hands a redeemable currency.

the

gold by

knew-they were

You

their heftiness,

if an ounce of
gold were made the equivalent of
say $50 instead of the present $35.
benefit, of

our

a

dictate

cannot

metals.

money

producers here and abroad would

The planners and con¬
trollers—the Socialists and their
Communist

Research, before a Senate
subcommittee
in
the spring of

banking policies.

people would like to see
the dollar devalued again.
Gold

vital

a

the

to

principal

nomic

Some

geration.

were

of

weight

atomic

highest

possible to reverse.

This is not in the least an exag¬

had approxi¬
mately the dimensions of a half
coins

of

mine for themselves their

quarter, and the 20
as

ately.

democratic nation
govern* themselves and deter¬

the people

five, 10, and 20-dollar pieces. The
.five-dollar gold piece was about
the size of a nickel, then
10 a

But

It is

part of the mechanism by

coins were

heavier, for gold has far

with

associated

closely

It would not be
turn

from the penetrating testi¬
of E. C. Harwood, Director
of the American Institute for Eco¬

should rise proportion¬

The measure was a short¬
sighted one that is practically im¬

represents—

currency

other basic freedoms.

venience

much

each

that prices

that

metal

redeemed in

dollar.

gold

the

of

By making the gold value of
dollar less it was intended

lars.

others would like to
that freedom to ex¬
change paper money for the real
money - material — the
precious

gold

as

to

was

know, and
conceal, is

they
good

and in the bank¬

The idea, avowedly,
inflate the currency by

really

people today do not

What many

wrinkled, and
worn,

the back¬

or

the present gold content of
firmly established by

dollar

lished

plenty of gold

of

standard. Others are not,
they are indifferent to them.

the gold

deemable

devalue the

to

was

standard,

economists

of these advantages

aware

mony

system.

ing

of course,

is,

virtue

one

There

in the Treasury

standard.

lettuce, or old,

were

This

reassured.

be

didn't have

advantages

the gold

/

Some of the nation's
are

the

all

system of free en¬

our

terprise.

ever,

repeated.
We

a

would require many pages.
summary can
be made, how¬

A

greater and that it was not

dollar.

in

law,

the devaluation

that

glad

no

was

return to

the

is spreading the stock of gold more
readily enough and thinly over many more paper dol-;
dollar

the

could find out

brand new

er

gold content would involve

coins,

they
wanted to.

they

if

so

behind

ing

or

Wheth¬

notes.

do

Whoever wondered what

engraved cer¬
tificates

you

a

with

difficulties. For
that reason we shall probably have
to be content to accept smaller

under normal conditions, but

*

opriately

pr

each dollar
approximately

almost insuperable

might ask, should
anyone choose to exchange con¬
venient paper currency for heavy
and
awkward gold coin?
The
answer is that few people would
Why,

manner.

same

reaeemauie

the years.

describe

of

To restore the dollar to its

former

over

To

devalued—that is,

was

reduced—by

was

41%.

of democracy.

.

value

the amount of gold in

money
our

dollar

the

currency

a

fixed amount of gold can retain its

After gold
forbidden in 1933,

redemption was

perhaps unjustifiable feature is that although we as citizens
can't exchange paper dollars for gold, foreign governments
and central banks can.
Holds freedom to exchange paper

Only

they used to be.

than

(16) Facilitate foreign trade.
(17) Bulwark the freedom of
citizens
and
help to

American

deteriorated in the

upturn.

University

(15) Facilitate sound, long-term
financing of the public debt.

of their hold¬

power

of the Federal Reserve Board.

ence

ings fall to 1% of what it had once
been. Many other currencies have

appreciable

but there has been no

independ¬

the

Reinforce

(14)

had,

throughout

Even in the United States,
the past 15 years, the
monetary unit has lost half its

PATTERSON

By ROBERT T.

who

Frenchmen

value.

in gold.

Gold Money ioi

17

(2425)

Chronicle

Dominick

&

Dominick

18

l'he Commercial and Financial Chronicle

(2426)

Continued from

first

strong.

page

Initially,

from

recovery

the 1954 low po.nt

financing

capital

by

State

and

sparked by
the rise in automobile production
and

Banking Conditions and

local

upturn has

tum

Isieiest Sate Piosneiis

in

building, but the

been gaining momen¬
months.

recent

Consumer

governments in 1955 should

about match the record volume of

levels

in

later

The calendar of new secu-

t>oue.

T'ty issues in the second half of
the year is expected to be heavier
than in recent months, and large
'?>ew
Treasury
borrowings
are
T.' ead. At the same time, a high
•?"te
of
business
activity is in
'j>rospect through 1955 and into
•7"56.

factors

These

vnilt in continuing

\>»r>k

well

may

pressures

re-

upon

entail further up¬
ward adjustments in the rate and
yield structure, and pose more
complex problems for the mone4i-vy authorities that has been the
reserves,

se

rr

this

far

so

year.

Flexible

Basic

to

Credit

Policy

appraisal

an

market outlook

ni-rney

preciation

ings

the
ap¬

an

fact that the
Bc deral
Reserve
is
following a
flexible credit policy, designed to
Tirve direct and immediate effects

the

upon

position of the
banking system. Al¬

reserve

commercial

though

this

lowed

in

policy

has

principle

fol¬
the

been
since

J./arch 1951 accord, only gradually
did

it

gain its present shape and

meaning; after

a

pegged

prices,

bond

sustained

era

both

of

the

monetary authories and the financml

markets

able

time

and

required consider¬
experience to be¬

familiar with its techniques

come

and effects.

however,

Bow,

flexible

credit

the
policy has passed through
poll swing of the business cycle,
c

"Compassing

rise to the

a

peak

boom in 1953, a moderate but

O va

business adjustment
mid-1954, and a surge
new
high marks at the

vodespread

through
toward

time.

present

Consequently,

implications with respect to
rent

conditions

f rom

a

better

•heretofore.

be

can

its
cur¬

assessed

vantage point than
basic

The

goal

of the

changed, namely to foster
vironment

have

running

business
from
in¬

shifted

ventory liquidation to accumula¬

construction

tinues

to

set

activity

output

con¬

Indus¬

records.

new

peak levels of 1953.

voldme

market

conditions^ the

"free"

of

reserves

in

the

banking

system, i.e., the amount
by which excess reserves exceed

member

bank

borrowings; these
wnich averaged around
$550 million in 1954, have on oc¬
casion disappeared in recent
reserves,

development, which is
the
combined
result
of
higher
bank borrowings and lower excess

is probably the most in¬
single measure of the
shift in credit policy in

gradual

months.

recent

Present

Prospects

economy

continues

however,

credit

As

—

the

expand,
faces a

to

policy

progressively more difficult task.
aim

The

of

credit policy in the
phase of the business
is to help curb those ex¬
of expansion which in the

ascending
cycle
cesses

past have

so often led to broad
painful corrections. Conse¬
quently, the authorities may be
expected to make bank reserves
somewhat
more
expensive
and

and

somewhat

straint

difficult

more

thereby

tain,

upon

re¬

In

general terms, the task is to keep
credit
expansion
reasonably in
with

line

the

amounts

to meet the needs of

required

industry and

and to ward off

commerce

a

The

latest

is

in

large borrowings
inflationary pres¬
and augment a boom.

sures

Flexible

credit

policy
in
an
economic upturn thus faces more

decisions

complex

and

requires

greater foresight than when

even

business is contracting.

timid

policy

a

to

avoid

credit
nomic

be ineffective,

may

time

same

it

sharp

so

restraint

While too

is

degree

a

to

as

desirable

of

eco¬

cause

unsettlement.

ap¬

business

of

surveys

ness

In

prospect.

addition, busi¬
is likely to add to inventories
the

over

remainder

the

of

year.

Consumer

income

is

levels

further

increases

in

and

at

record
are

in addition, consum¬
ers
are
evidencing their willing¬
ness to augment their spending by
prospect;

going

into

debt.

government
continue

State

outlays
the

on

and

local

likely to

are

rise

for

siderable time ahead.

a

con¬

Finally but

importantly, it appears that the
cutback in Treasury spending has
been completed and that the trend
in

Federal

expenditures

may

be

stronger in the latter part of the
All this supports the outlook
for a record year 1955 and for a
continuing of the cyclical upturn
year.

into

Prospects

for

Slower

Growth—

Assuredly, not all forces will be
operating in an upward direction.
A fairly sizable reduction in auto¬
mobile
production from present

Also, some decline in

economy.
the

of

rate

recent

housing starts

months

would

below
be

not

un¬

expected,
although the
current
high level of starts should assure
active

i d

r e s

throughout

t i

e n

most

a

of

1

building
Rapid

1955.

trend

of

the

Recent

period

Shift

of

in

Policy

business

In

—

the

sag,

a

task

of credit

policy appears fairly ob¬
vious, at least in principle. In the
1953-54

decline,

authorities

the

monetary

bank

made

reserves

available in abundance and at low
cost.

By this

avert

and

that

in

the

of

financial

have

might

spiral

a

action, they helped

pressures

system
in

resulted

credit

contraction

inventory liquidation. In ad¬

dition,
these
policies
promoted
conditions in the investment mar¬
kets

which

long-term
turn

favorable

were

borrowing,

contributed

strength

of

to

which

the

building

to

in

sustained

activity

in

1954.

Beginning in the latter part of
1954, when evidence appeared that
business activity was turning up¬

ward, the authorities moved
from

the

policy

of

away

aggressive

credit ease which they had been
following since mid-1953. At first,
their
objective
was
merely
to
absorb some of the overly abun¬
dant

cushion

to

economy.

reserves

that had

been

pro¬

difficult adequately

more

the

subsequent

upward

rates.

appraising

pressures

the

interest

on

However, it not infrequently

happens in

dynamic and volatile
that an upturn develops
a

economy

troublesome boom

on

a

broad

base,

a

further

and

fundamental shift

in policy
policy, while
not one of credit
restraint, had the
effect of making
bank reserves
less
freely
and
less
liberally
more

took

place; the

new

should

of

credit

policy

was

to

sions

from

1

% to 1%%.

This change in policy has




been

well

more

months
upon

probably
more

characteristics;
develop, the money

could

tighten

recent

be

permitted

sharply than in

and

the

interest

repercus¬

rates,

temporary,

albeit

might

be

severe.

Current Business Strength

affirmed

by the recent increase in the dis¬
count rate

this

market

available. The shift in the empha¬
sis

1955

expected to exceed
corresponding period
Requirements for real
estate mortgage and consumer in¬
of

are

1954.

stalment credit will probably be
higher, while the increase in loans
on
securities may be less than in
the comparable period a year ago,
unless
speculative
fever
takes

have

eventu¬

may

retarding effect
upon tne willingness of consumers
to buy, but there is little to indi¬
some

portant factor

over

hold.
An

important
difference
is
likely in the behavior of business
loans. These loans
seasonal
summer,

to rise

the

are

liquidation

facing some
until
mid¬
are likely

but thereafter

substantially faster than in

latter

prospects

part
are

of

for

Current

1954.

some

accumula¬

ahead, in contrast to last
when they were still being

year,

liquidated. Furthermore, the large
payoffs of loans by metal and
metal
product companies, which
occurred throughout 1954 as the

tional

if

a

as

in the period ahead

reserves

sharp stringency in the

market

is

to

be

money

avoided.

Estimate of Required Reserves—

Estimates

be

of

prospective member
requirement tend to

reserves

quite

precarious.

The
gold
changed
signifi¬
cantly of late. However, increased
has

stock

not

loan demands and bank

participa¬
fi¬
nancing during the balance of the
year support the expectation that
tion

in

bank

Treasury

deposits

new

will

during

Deposits
what

less

months

money

expand

the

sub¬

balance

increase

may

than

of

in

the

of

some¬

last

sever*

when

1954,

they ad¬
vanced by $11 billion. This year,,
bank
purchases of Government

defense pro¬

securities

have ended and are not
likely to be resumed this year.
The prospective increase in busi¬

siderably

result

in

of cuts

the

gram,

spending on plant and equip¬
also contribute to some

ness

ment may

for

loans,

meeting demands

commercial

the

rise

are
likely to be con¬
smaller. However, the
nevertheless likely to be

is

sizable.

At

higher
the

banks

crease

the

reserves

ment construction programs.

increases

are

Thus,

expected in

holdings

municipal

of

se¬

will find it

financing
the year.

to do

necessary

substantial volume of

new

a

money

during the balance of
It is currently expected

that about $5 billion will be raised
in

July and almost as much in the
quarter of the year. While

final

than

in

the

maturities

half

second

of

of

savings notes
will be considerably larger, so that
1954,

in

all, the Treasury's new financ¬
ing requirements in the last six

bank

therefore, the amount of
required by the banking

guess,

sytems
1955

during the remainder of
be estimated near $2t
if present prospects ma¬

may

billion

billion raised in the

1955

are

likely

to

ex¬

mar¬

On balance, bank reserves will
presumably be provided by theFederal Reserve in large volumeThis may be achieved through a

reduction

it

present,

seems

in

Federal

Reserve

banks.

It

is;

tightening of credit.
While

Bank

Borrowings

increased

that the great

member
Reserve

bulk of the Treas-1
financing in the
business, balance of the year will be con¬
centrated in fairly short-term ob¬

re¬

or, more

likely, however, that these de¬
velopments will' be accompanied1
by continuing pressure upon the
money
market
and
a
further

ury's

new money

bank

like¬
ly, by open-market purchases. In
addition, of course, commercial
banks can obtain reserves by in¬
creasing their borrowings at the

Member

probable

member

requirements

serve

ket in the second half of 1954.

At

that

creating,

terialize.

Treasury Financing—The Treas¬
ury

be

greater
reserves,,
reserves
will
by the seasonal in¬
in money in circulation. As

a

large state and local govern¬

time

same

will

for

be drained off

will be called upon to help finance

further

the

deposits

need

furthermore,

increase in loan demands.

of

contribute

by

borrowers,
Treasury financing ac¬
tivities, will be large in the sec¬
ond half of the year, at the time
when requirements for bank loans
will be substantially higher. It is
thus evident that the monetary
authorities will need to supply the
banking system with large addi¬
well

as

months

months

however, it is not likely
significantly to a

economy;

are

term funds

private and municipal

stantially

ceed $8

proportionately the gen¬
erally optimistic prospects for the

current indications

sum,

the year.

likely

seem

share

In

demands for long

tion of business inventories in the

near term.

the

Agriculture does not

management.

Bank Reserve Requirements

bank

less

instalment debt

ally

debt

banks

borrowings

Federal

the

from

funds

provide

—

by
the

to

banking system, they generally donot lead to an easing of credit. In
money
market
outlook
in
the activity.
On balance, therefore, there are ligations. There is little doubt of' fact,
rising borrowings are in¬
present period of rising economic
the continuing desire of the Treas¬ dicative of a generally tightening
activity
means
formulating
an forces at work which may moder¬
opinion with respect to the judg¬ ate the rise in industrial produc¬ ury to lengthen the maturity dis¬ money market, since there is a
ment, attitude and policies of the tion and total output,-but they, tribution of the debt, but im¬ fairly widespread aversion among
monetary authorities. The authori¬ are not likely to precipitate a proved business, greater loan de-/ bankers toward continuous bor¬
and
the
trend
toward- rowing. Reserves obtained from
decline
in
ties, in turn, take their cue from business
the [ near mands
this source, therefore,
the condition of the economy; the future.
are
tem¬
Provided we succeed
in higher interest rates all tend to
key to credit and money market; avoiding an outright boom and dampen the enthusiasm of com¬ porary expedients, and the Fed¬
authorities
on
oc¬
conditions lies in the authorities' subsequent break in economic ac¬ mercial banks to lengthen their eral u Reserve
casion have
used
persuasion in
appraisal
of
business
prospects tivity, the prospects are fpr the portfolios. Also, business corpora¬
order to encourage banks individ¬
and
of
demands
for funds.. If rising trend in business to con¬ tions, because of greater liquidity,
Should
business gives signs of turning tinue into 1956, although perhaps are exnected to provide ». better ually, to get out of debt.
market for Treasury
obligations reserves not be provided through
down
in
the
near
future, this with some slowing down and pos¬
would surely mean a prompt re¬ sibly some interruptions in ensu¬ than was the case in 1954. As a other sources, therefore, the com¬
banks
would
result,
commercial
banks
will mercial
severely
versal of credit policy, an
easing ing months.
probably make smaller additions curtail their lending and invest¬
in the money market and declin¬
to their government holdings than ing activities, and this curtailment
ing interest rates. If the upturn Prospective Demands for Funds
in the preceding year, when their- of
financing would probably be
Most business upturns require
continues, but without generating
holdings increased by a record $6- much greater than desired by the
a boom psychology or
inflationary a relatively sizable volume of new
billion.
authorities.
Consequently, it is
tendencies, and perhaps with some financing. The favorable business
It is worth noting that the fi¬ certain that the Federal Reserve
slowing down in the rate of ex¬ outlook today suggests that de¬
nancing needs of the Treasury in. will provide some reserves to the
pansion, the prospects favor con¬ mands for both investment capital
prospect for the remainder of this banking system by other means
tinuing but gradual and orderly and bank credit loom large in the
year are not likely to prevent the
during the balance of the year in

Consequently,

the easy credit

banking system under
policy. In Decem¬
ber, with business activity rising

year.

demands

and

to

vided to the

•

de¬

cline.

Total

—

the cash deficit may be somewhat

become

and

state

the $4 billion of

expansion in residential mortgages

to

the

of

bank

to

may

be

to

curities.

months, and this will have
dampening effect upon the

expansion is tapering off, it

employed to this

likely

those of the

few

end, however, will vary according

measures

is

for bank loans during the balance

levels is expected within the next

cate tnat this may become an im¬

credit

Credit

Bank

bond

the'preceding

In addition to

Also, if a
restrictive policy is carried be¬
yond the point where economic

economic

of gradual restraint, without
ignoring the problems of Treasury-

The

year.

corporate

new

issues in

new

1956.

situa¬

to

likely to

are

spending intentions on plant and
equipment suggest that an upturn

which

in

contribute

Further

—

during the next few months.

pear

some

tion

Factors

expansive forces

ob¬

to

placing some
credit
growth.

currently back at their

are

Supporting

weeks. This

bai¬

to

policies

been
ago:

year

haps the most significant indicator

steady
growth
of
activity. The
specific

conducive

Reserve

a

of money

the

and

1955 than

of

trial production and gross national

en¬

a

ced

less in

has

and

year

ahead

million prevalent a year ago. Per¬

at

an

rn

Federal

however,

tion;

un¬

monetary authorities remains

the

from

issues,

banks; recent levels around $500
million
compare
with the $150

the

of

substantial

formative

of

is

fairly

a

increase in member bank borrow¬

reserves,
A

in

reflected

of

the

volume

last

ft prevailing rates. The question is
whether this good record will con-

Thursday, May 26, 1955

.

1954,

demonstrated great
strength in the closing months of

buying

.

one

with offerings expected to
increase significantly above recent

residential

was

.

It

has

that

the

by

now

become

expansion

of

evident

economic

activity is impressively broad and

downturn

period

in

aggregate

ahead.

Investment

credit

Requirements—The

authorities

from

following, order

combined financing needs of

con¬

policy of credit restraint if eco¬
nomic
developments
so
require.

struction, of State and local

gov¬

Admittedly,

ernments, and of corporate longterm borrowers in

1955

likely

are

to be

larger than ever. Real estate
mortgage debt is virtually certain
to show

a

record rise. In

allowing for
cline in

the

a

fairly

rate

of

fact,

sizable

even

de¬

housing

new

a

Treasury
financing
restrictions upon the
timing of Federal Reserve action;
periods shortly before or after a.
Treasury operation are not pro¬

places

some

pitious for
credit

the

restraint.

need not be

a

starts "later in the year, the growth

conceived and

in home

sued credit

mortgage debt outstand¬

ing is likely to

surpass

the

increase of $9.3 billion by
stantial

margin.

New

a

1954

sub¬

long-term

of

active pursuit of

recent

However,

barrier to

a

this

broadly

systematically

pur¬

policy. The experience
years

shows

that

the

Federal Reserve is able to follow
a

flexible credit policy, including

limit

to

member

bank

the

increase

in

borrowing.

Statutory Reserve Requirements
—Member bank

reserves

have been

ments

require¬
in

reduced

each

of the past two years. The reduc¬

tion

in

1953

reversal

in

of

was

step

a

credit policy

May, when the credit

was

reaching

tions

and

business

approaching
1954,

the

easy

credit

panied

disturbing

a

in

squeeze
propor¬

activity

turning point.

reduction reflected

slack

policy

that

business

the

initiated

was

In
the

accom¬

conditions.

Volume

Neither

of

Number 5432

181

.

.

situations

these

.

is

The Commercial and Financial Chronicle

Good

;

nevertheless

reasons

would

make

speculative

Finally, such a move would
release funds to support long-term
way.

growth in the money supply. Any
undesirable easing of credit that

might result from lower reserve
requirements at this time could
readily
be
forestalled
through
open-market operations. Possibly
these consideration might prevail

prehensive

the

of

intentions

of

a

Operations

Open-Market

*he

In

—

event, it is reasonable to expect the Federal Reserve to place
any

reliance

extensive
market

open-

upon

purchases and repurchase

agreements during the remainder.
this

year. The resumption 0f
operations on a large scale
will
not
necessarily ' indicate a
change
in
credit
policy.
The
authorities may well conduct their
purchases in a manner designed
to keep the money market under
fairly continuous pressure.
The
■degree of pressure will be in■dicated by the behavior of free re-

of

such

n?°?ier?£e 5:rec^
restraint. Today, both the finanJ:13* markets and the authorities,
the experience of 1953 u"j}er
their belts. Borrowers who in 1953
advanced their financing;inanticipation , of higher lntei est rates
soon found this a costly procedure
in Xiew ?f the subsequent rapid

?{ ™dit, while enders
^ad hoarded funds in the exPectaiion of better terms dis+covejed they had missed some attractlve investment opportunities,
easinS

The financial community
to be mindful of this

appears

and member bank borrow-

experience. The recent rise in in-

ings and will be reflected in the

terest rates has been remarkably
orderly, and the financial system

.serves

(behavior

interest

short-term

of

has

xates.

singularly

been

nervousness

Outlook for Interest Rates

The

,

rored

during the previous business

helped precipitate the credit crisis
of the spring,

in-

At present, there are few signs

but

of anticipatory borrowing; indeed,
the volume of new security issues

terest
terest

rates

of

classes

Most

rates.

have

advanced,

the hardening has

been most prorates and yields on

has been relatively low in recent
bank-type investments, that is, months. Some mortgage lenders
:short- and medium-term invest- appear less eager to make 30-year
merits.
These yields
have risen loans with little or no down paymore,
both in absolute amount ments, but they are continuing to
in

pounced

■

that gripped the mar-

less liberal credit

a

credit,

policy,

,

of the

have already been mirin a general firming of in-

for

demands

•combined with
:

ket

free

expansion two years ago, when
fear of tight credit in the fall

Sizable

relative

•and

long-term bonds.

<on

To

-

SnfHhfitirf1 trv^he refahvelv

(sensitivity to changes in business
•conditions
and in credit policy.
Furthermore, much of the rise in
money rates, at least until early

ivLrfcJIr? inn<*

regarded
regaruea

be

mav

vear
year,

ne

may

as
as

a

a

■

jL^m k»terSt

+uQn

credit policy then

aggressive easy

In effect. Short-and medium-term

squeeze.

1

■now

•

oUhe credit

Long-torn yields, on the

have

and

ately

significantly lower

the^pTroach

wrior to

*

still

are

increased

only

VV,«„+UC,.

4.

~

recent months,
near the same levels
in

moder

4nrn

y
as at the

beginning of 1953.
the

and

current

anticip a ted

strength in business, the
(financing requirements of
term

of

large
long-

•

borrowers, and the inereas-

demands for bank credit ; in
period ahead, it would appear
that the adjustment of long-term
ing

the

ibond yields has not been fully
completed, and that some further
firming might reasonably be ex-

-pected, especially in the corporate
and municipal sector, where recent increases in yields have been

particularly small.
the

In

-

vances

been

more

S-oclamations

Commercial

for

mands

reduced from 314% under
of lower crejdit' deand

easy

bank xeserves.

availability of

With loan lemands

credit^ policy less liberal
and the cost of bank reserves now
higher an increase in bank lendrising

rates,1 including

C. E. Wilson Gov.

For

"

money

Outlook

—

All

the

i

Of N.Y. Stock Exch,
Keith Funston, President of the
New York Stock Exchange, has

evi¬

dence

indicates that, short of an
international emergency, the Fed¬

Banking
the

past
several
years,
rates and bond yields have

announced the election of Charles

E. Wilson

as

tive

eral Reserve will continue to fol¬
low a flexible credit

the

on

Public Representa-

a

.

.

recently, in

more

noticeable

policy. v

serve

Lending

-

Operations

—

Bank

lending rates, as already observed,have not yet importantly reflected
prevailing conditions in the money
market, and some firming is to be
expected. Furthermore, the mod-,
erate credit tightening under way
is
likely
to ' produce
greater
selectivity in lending operations.
This,
indeed,
is
probably
an
underlying goal of credit policy in
a

business

the

to

upturn:

maintenance

of

encourage

high

lending

standards, which means discrim¬
inating against marginal or specu¬
lative borrowers in favor of those

signs

of

ruled

velopments
for

will

in

be

^the

commercial

months

to

come
toward

contribute

to

economic

be such

may

the

event

any

to

serves

credit

authorities

will furnish
the

large

Mr.

tric

jji
re¬

proceed

the

case

boom becomes

and

any

..serious

ment's

and

avoid

the

maturities

extent

on

with

Investment

are

than

Portfolios

portfolios

—

at

Bank

present

longer average maturity
they were in 1953, and are
more

vulnerable

to

to

interest

rates.

There

the

is

"I

linnn

a

changes

in

the

of

^ring

has

given

been

rLainecc

a

Public

Governor, Mr.

accepted this

the

industrial

resources

among

national

Ross

are

Baker, Simonds

and

Achiel

John

with

R.

Baker, Simonds & Co., Buhl

ni.thoritipq

helD

tf)

emergency
At the same

Dickey, President
College, and Charles

C. F. Childs Adds
CHICAGO, 111.—William T. Price

has been added to the

Stock

Jackson

staff of C.

Company, 141 West

Boulevard.

no
the

avert

a

This advertisement is not and is under

credit

neip avert a preait

of the shares for sale
shares. The

time, it should be

or

as

no
a

circumstances to be construed

solicitation of

as

an

offering oi

any

offer to buy any of such

an

offering is made only by the Prospectus.

recognized that , there are other
NEW ISSUE

S

^ co^ en™

hility of a credit squeeze later in
the year. Among these is the generaj expectation that business will

remai/active
when

to

the

business

somewhat

200,000 Shares

at least through the
rp^jg

0£

contrast

jn

spring

sentiment

skeptical

with

PROGRESS MANUFACTURING COMPANY, INC.

striking
1953,

of

was

respect

Common Stock

the iatter part of the year. To-

with
business
confidence
probably at an all-time peak, the
voiume
0f
borrowing, spending
and investing could well acquire
growing momentum in the period
ahead.
Should
boom
conditions
day?

(Par Value $1.00

per

Price $10 per

develop, they might lead to larger
requirements for bank credit, a
more restrictive credit policy, and
a
considerably
tighter
money
market than anticipated at this

Copies of the Prospectus

may

the several Underwriters

as are

Share)

Share

be obtained in

any

so

far in 1955 has

Blair & Co.
,

-

-

State only from such of

registered dealers in securities in such State.

Emanuel, Deetjen & Co.

Incorporated

field, have not * reacted more
sharply to the change in credit
policy and to the prospect of large
financing requirements * yet to
come. However, it would be unrealistic to assume that credit

'

Stroud & Company
Incorporated

scarcities now belong to history,
the prime In any event, some volatility in




Dempsey-Tegeler&Co.
Straus, Blosser & McDowell
May 20, 1955._

First California Company

Cruttenden & Co.
,

■

"

•

free

Hook, Chairman of the Armco

F. Childs and

Exchange.

our

Steel Corporation.

Building, members of the Detroit

tions, that fluctuations particuarly

of

Sloan

of Dartmouth

Van

L.

welfare

to doubt the readiness of tne

plip

the

responsi¬

new

cn

cause

was

.

DETROIT, Mich. —William H.
Katzenmeyer, Howard D. Kraus,

Conse¬

condi¬

office

enterprise business system."
;
The Exchange's Board has three
Public Representatives. The others

(Special to The Financial Chronicle)

fluctuate

business

the

member

because

our

of undue credit restraint.

Four With
-

assumption

will

rates

as

have

Wanseele have become associated

interest

a

company
its 101-

appoint¬
I believe so firmly
Exchange's objective of
spreading the direct ownership of
in

conse¬

Robert

the

appointment

that

family.
•
assuming his

ment

expansion and
adverse

best

on

by

R.

indication
continuing abreast

quently, bank investing policy had
proceed

His
of

W.

director

a

every

possible

quences

an

increase in interest rates. Also, the
effects of a more restrictive credit

short-term

joined
as

na¬

Defense

Wilson said:

.bf

excessive business

of

therefore

task

He

of

people throughout the country. I
believe, too, in the Exchange's
that they are
of current economic trends and educational campaign
to inform
are
alert both to the hazards of people about the contributions to

keel.

instalment loans.

investment

the

Director

history that

bility

or

■

to

and

Elec¬

the

the first time in

held

In

consistently live
making credit
temptation
to
relax
lending policy responsive to changing eco¬
nomic conditions and of helping
standards, to take on lower grade
credits, or to reduce down pay¬ to keep the economy on an even

authorities

General

become

Grace

The authorities

carrying out the aims of the credit

to

consultant.

not

markets.

money

first

year

inflationary

unsettlement'

or

left

after the outbreak of the
War

marked

orderly as has
over
the past few
rampant, they will
development

crises in bond

of

Corp.,

Public Governor since

Chairman

as

necessary

wish to forestall the
of

di¬

a

Chairman

Grace & Co. in 1952

as

an

Francis,

former

Mobilization.

year. They
presumably anxious to assure
that any further credit
tightening

should

a

soon

tion's

are

become

Mr.

Wilson

Korean

banking system in

might

and

had been

the latter part of this

that

Charles E. Wilson

Francis.

May, 1952.

restrictive credit policy
has been the rule in recent

months,

suc-

the Board of General Foods

to. call

as

of

Clar¬

s

rector

de¬

a more

than

He

d

ence

that

out

been

responsibility of

Co.
c e e

in

Although the possibility cannot
be

Board

W. R. Grace &

business conditions.

months, and unless

financing will contribute
steady and productive economic
growth. Consequently, an impor¬

softening

a

whose

bankers

the

in interest rates until they

creases

perceive

to

tant

Chairman of

moderate but. bank reserves, and the authorities
Federal Re-, may well permit economic forces
to bring about some further in¬
" ; '
' . '
,

a

in

shift

remained

was

rates

re-

garding Possible further restraints
prpriif
that the
market

ad- time.
wide- Experience

conditions

ing

Implications

that

unchanged at the perhaps astonishing that interest
3% level since March, 1954, when rates, especially in the long-term
it

medium-term

...

with

(spread, but here too, some rates,- been reassuring. In fact, considerhave lagged. Conspicuous among ing the vigor of economic expanthe laggards is the prime lending sion and the prevailing high de¬
rate in commercial banking, which gree of business confidence, it is
has

and

field,

short-term

have

of short-

Credit

The monetary

rates

lrom aggiessive pioc a

end

Firming Tendencies—In view

rates

,

aggressive

,in mid-1954 that resulted from the
v-,^iir.,7

interest

especially on short- are likely to be substantial," and
and
medium-term
securities, - is that bond accounts will show al¬
the essential .corollary of a flex¬
ternating periods of book profits
ible credit policy.
and losses.

have refrained

xebound from the exceptional ease

rates

in

of short-term rates recustomary
greater

their

fleets

mortgages

vestors to "warehouse" mortgages

the

of

yields,

record volume. In fact, the will- policy, should it prove necessary,
ingness of some institutional m- would probably not be liimted to

>

,

acceptable

greater

extent

some

volatility

rfhte
Jinis

acquire

of

months ago, than have yields

^ome

:

levels

their

to

movements

and

reduction in re- the credit and debt management
serve
requirements has come to authorities and entertained what
be
regarded as a signal of an proved to be an exaggerated imeasier credit policy.
:
•
,
: pression regarding the severity of
though

even

the

19

policy. The
Ex c h a n g e's
moved in the same general direc¬ policies
curreritly pursued by the
Board
of
tion as 4 economic activity. They Federal
Reserve can
hardly be
reached
the
highest
levels 'in described as more than mildly Governors.
Mr. Wilson,
decades near the middle of 1953, restrictive and the recent shift4in
Comparison with 1953—In gen- when industrial
who served 51
production was emphasis
on
the - part
of
the
eral, the present money market
setting
a
record, and
declined authorities seems justified in the years with
environment differs importantly
sharply with the ensuing business light of the strength of the recent General
from that of the spring of 1953.
Co.,
adjustment. The vigorous expan¬ business upturn. However, if the Electric
Two years ago,, the then newly- sion of business
activity since economy V remains^ as active as becoming
adopted flexible credit policy was around the
middle of last year has seems probable at this time and President in
still largely untried. The finan-„
again been mirrored quite faith-, demands for credit continue heavy,. 1940, recently
cial community was generally apfully in rising interest rates and, additional pressure is likely upon was appointed

take hold in a dangerous

pressures

a

_

now
increases

for

room

should inflationary or

is

Jamty of large borrowings and
Prospect of tighter credit in
months ahead coupled with
JV&h and mounting economic acr
tivity, may bring about a scarcity
of funds, a .sharp rise in-interest
fa^es and a §'eneral squeeze upon
^e money market such as devel°Ped io the spring of 1953.

reduction

a

ahead

The salient question in the outJ0?^ t°d^y is whether the cer-

may

be advanced for reducing reserves

Also,-

period

the

reasonable expectation.

requirements this year. Reserve
requirements in the United States
.are
significantly
above
those
prevalent in other countries of
major importance in international
finance.

in

rate,

in

prospect for the months ahead.

(2427)

Newburger & Co.

20

(2428)

■'

;

The

't.

•

Corjimercial and Financial Chronicle

.

.

Thursday, May 26, 1955

.

It is difficult to believe that the

In

Opposition to Pay-TV

Federal

By FRANK STANTON

Columbia Broadcasting

President,
*

System, Inc.

'
.

v.-/

■■

•

.

'■

.

Dr. Stanton presents arguments

against the general introduc-

tion of

would be a betrayal of
34 million families who have already spent $13% billion for
TV sets. Points out that under general pay-television expense
to the average family would be $100 per year, meanng a total
annual outlay of $31/2 billion; more than is spent on shoes,
doctors or electricity. Concludes television could not remain

Com¬

scheme

a

which seems to be so clearly con¬
trary to the public interest. How¬
ever, if pay-television should be¬
come established, economic neces¬
sity will force CBS to participate.

says,

pay-television, which, he

Communications

mission would authorize

.

Unlike

theater

-economic
economic

no

,

owners,

to

axe

We
we

During the long and consistent

profitably

rjse jn rajj st0ck

sys*em °* Pay-televlslon'

a

With

Southern Pacific

have

we

grina.
grind.

could expect to operate

our

know-

programming

how, facilities and

now
a

lasted

and

year

half-free and half-fee

their

in

sets

the

wnich already

favor

expecta¬

tion

that

much

as

they

as

the

bid

programs would scramble
tures and sound so
that

paid

programming service
now getting free.

a

are

the

each

for

and,

years ago

the

President

25 the two stocks. Another important
1946, factor is that postwar Southern
Radio Pacific has not kept pace with re-

prophecies
reeenty

as

of

as

Zenith

be

to

spect to improved operating efficiency. In recent years its transfor the type of continuous portation ratio has been running

pay

that

programs

will

be

above the industry

necessary

established,
be

in

free

television

kind of program which the

in

36 million television sets

daily

Unlike

use.

prophets,

set

we

these

limits

no

false

to

the

Southern

Pacific's

performance is in

pect.

The

near

road

operating

un-

would be levied

per game

public

if

watched

un-

each

the

Series

in

the

on

family

which

1954

were

During
and

at

the

the

past

cost

seven

of

refrigerator,

a

.

j

s1^ ei^a.

V

Debentures Offered
Representing

of the largest

one

financing^operations^of^r e
nf

nGW

a

c e

rTt

within the aircraft industry,

years

j

19gQ

Weeks.

ftnn nnn

T

t

33/4% subordi-

0ffereci

was

yester-

The debentures

100%

and

are priced
interest to

accrued

yield 3.75% to maturity,
Conversion privilege e x t e n d s
through April 30, 1965 unless the

debentures

called

are

locomotives, redemption.
sdmhonal central- into capital

years,

con-

at least

Lockheed Aircraft

at

somewhat

now enjoys.
For example: increased and continually increas- laggard in dieselization and it is
For viewing the World Series at ing service to the
public of free expected that this will be remehome, a tribute of some $6,000,000 television.
died by early delivery of an order

set

that

come

(May 25) by an underwriting group headed jointly by Blyth
&
Co., Inc. and Hornblower &

term pros-

was

is estimated

to $7.00 a share.

jyjay

Many analysts believe that a
significant change for the better

there

are

whole it

a

solidated results will

^ay

buy television
receivers by the millions."
Today

to

seems
quite
certain
that
some
further year-to-year improvement
will be witnessed and for 1955 as

natedcorW

average.

to make the public

able

than

ago.

heed Aircraft Corp

public

program,

could

programs

from

away

every

the pic-

could not receive them

he

for

they

becomes
generally
pay-television would

Frank Stanton

pay-television,
stations
which are now broadcasting free

Such

year

be

would

If this scheme is authorized and

Under

owner

that

is

false

operating ratio

points lower

higher than in the opening
1954
quarter.
While percentage
gains will probably not be so wide
during the balance of the year it

our

vertisers haven't sufficient
money

which

prerogative of
watching.

less

public

this

of

these

3.5

60%

than

earn

over-all

Earnings of $1 77 a
(consolidated) were almost

year

share

experience, we

more

Corporation flatly stated "the ad-

pay¬

for

result

made

as

would

victimized

a

wanted

without

ing

the

The

it

we

into paying out billions of dollars

them

use

has found such high
present day free tele¬

in

vision.

they

would be able
to

that

about

a

half, Southern Pa-

a

the

was

than

more

cific common has been rather
lagprobable gard in comparison with other
share of rail
stocks
of
roughly
similar
the billions of pay-television dolquality. About two years ago, for
CBS opposes pay-television beIt is probable that pay-tele- lars. But this is not where CBS
instance, it was selling a couple
cause
it
would
highjack
the vision would deliver an occasional believes its best interests lie.
of points higher than
Southern
American
We are proud of the progress
public] into paying for heavyweight championship fight,
Railway while recently the latter
the privilege of looking at its own and possibly such special enter¬
the
broadcasting
industry
has has been selling nearly 60% above
television
tainment as a multi-million dollar made
in
establishing a nation- Southern Pacific.
Granting that
sets. This is a
"first-run" movie, which the eco¬ wide free television
service.
The there have been
important develnomics of present television can¬
betrayal of
pay-television promoters
have opments in the interim with rethe 34 million
not reach, at least as of today. On
continuously predicted the failure spect to Southern Railway's debt
families> \vho
the other hand, the bulk of any of free television at
every point structure and impending maturhave already
programming for which pay-tele¬ of its development; that it could ities this does not
appear to be the
vision would bid is bound to be never
spent $13 V-i
support itself without di- only consideration affecting the
billion
for
the very kind of entertainment rect tribute from the
public. They relative market performance of

regard

and

prices, which has

somewhat

They

for

earlier

are convertible

stock of the company

the average family has been able
to convert its home into a center

lzea traffic control and modern at $50 per share, subject to adcommunications are being pro- justment. They are redeemable
graaie<L Important yard modern- under a sinking fund
commencing
nation projects have already been at 102% on May 1, 1960 and de-

enjoyed 10 short years ago. The
being paid by the sponsors who finest talents of
Broadway and
two programs at once, any station bring them the games free,
Hollywood, the significant events
broadcasting
a
scrambled
pay V If only 5% of the families who of
Washington, faces of Presidents
program would necessarily have now watch- Ed Sullivan's "Toast and
legislators, the art of museums
to eliminate its free program dur- of the Town" would
pay only 500 and advances of science have being that time period. Pay-tele- each to see the show, they would come as familiar to television set
vision would black out the best spend $375,000—two and one-half owners
as
their neighbors down
of free television. In essence, this times as much as the
sponsor now the street. And past advances are
is a booby trap, a scheme to ren- pays to bring it to the
public free, only a prelude to future accom-

comple^ted and others are pro- clining thereafter to 100% at May
Jectcd. The Central Pacific lines ^ 1955 ancj thereafter. Optional
are t^ing improved to the tune of redemption prices range from
roughly $40 million, most of 103% to the principal amount.
which will be covered by rapid
company proposes to use

scrambled

only

when

costly

a

forced

gadget, attached to the home receiver, is fed a coin or slug, a key
or

station

a

and

then

blind,
seeing eye

owner

him

rent

a

dog at so much

per mile—to rehim, only very partially,
what he had previously enjoyed
as a natural right.
Pay-television promoters say
they would be satisfied if they
got $100 a year from the average
family.
On
this
basis,
today's

to

store

television

audience

$3V2

some

than

it

billion

fewer

three

ing

without

times

paid

the

doctors

or

The

the

charge.

This

amount

public

for

the

tent.

system

is

as

now

then

have

this

which

on

is

happens, the
"Toast

broadcast
out

for

of

the

would

be

who

everyone

of

these

two

ex-

all

lar

attractiions

of

they
to

as

for

putting them
produce the

could

income.

most

of popu-

owners

No

one

believe

be

can

that

so

popular

programs would be broadcast free

his

if they

Thus

television

of pay-television is

remain

half-free

living

placed ip the
the families who rely

Either television programs belong
to the public free or they belong

prosperous

room,

once

as

rpost on television for their entertainment

be

the

hit

would

and

hardest

the

be

information

would

because

they

who, for

ones

eco-

nomic

reasons, would have to restrict their viewing most severely,

Television

would

longer

no

could

not

and

long

half-fee.

place, they
the

say.

American

would,
vision

they

tradition.

they claim,
for

are

would

Surely this is in

those
now

There

be free

It

is

claimed

television

that

there

would

be

paymore

free

rently.

But

this

is

the

stalling a minimum service in a
single major city will cost tens

there

served by television will cost bil-

a

by

cur-

specious

the

eco-

the,sheer-

sophistry and it is-in-

tellectual quicksand.




television

far

out-

believe, therefore, that the

best

best

interests

interests

as

well,

expansion

and

lie

in

our

the

of free tele-

that television channels
dedicated to all the public

now

should

not

duction

of

be used for

the

intro-

system whose bene-

a

fits to each viewer

would be lim-

ited by his ability to pay.

scheme

the

would

pay-television

impose

an

unnec-

essary burden of billion of dollars
on

the

American

projects should lead to substan-

public; because

it would charge the nuhlic for the

iarger

inventories

tial operating savings. In addition

wj(h

Jo the prospective improvement

Government

in

transportation costs, it is expected
that the company will go considerably further into meenamzatiwi»'0f maintenance, allowing cuts
In. 'hese ratlos. als?' Thus, even
without

any

revenues

rise

traffic

in

take

It

is

and

indicated

enable

or

under-

certain

pro jects f0r the Governarising
from
changes
in

nnS

„r

2 827 939

I

V

the
tQ

shares of $1

Th

debentures
fhe

subordinated

are

t

borrowed

capital

oar

indenture Drovides that

debtedness

„

o{

other

jn_

representing money
indebtedness

except

hHit,

.

suhn-dinated

robo.dmated

Pf* Wlth> the debentures,

Lockheed,

of

one

the

largest

companies in the aircraft building
field,
sells

revenue

that

to

'"is financing ieaves the caDita,
financing ieayes the capital

in

With the Indus-

traffic

of

contracts;

in

trialization of large segments of
the service area, and with particularly wide population growth in
many of the states served, Southern
Pacific has displayed very

impressive

connection

new

ment

The prospect for a significant
improvement in the operating ratio is not the only factor calling
for a constructive attitude toward
to company in the opinion of

many^ analysts.

in

of terms

procurement policies, and for additions
and
improvement to its
properties and facilities

and

sizable

a

revision

j( to accept new orders

prospect.

trends.

this

designs,

manufactures

aircraft

and

and

parts.

spare

territorial expansion has not as Various wholly-owned subsidiyet fun
^UH course and that aries are engaged in activities
traffic

trends

will

continue

generally

up-

The

ward.

stantially

company is also sub—
increasing its non-rail

related to aircraft,

m-

eluding opeiation of airports and
repair

and

modification

of

air-

transportation activities through craft.
expansion of truck operations and
Of the company's business volconstruction of an oil pipe line. Ume in 1954, 81% represented
Finally,
Southern
Pacific
has sales of aircraft to the U. S.
it large non-rail interests for which Government and 11% sales of

milliions of dollars, installing
throughout the total area now

lions of dollars.
such

shows

largest
families
each

to

pay;

because

prospects are bright. There are
some 5,000,000 acres of land and/or
mineral rights in California, Neit before the Federal vada, Texas and Utah. Oil inter-

shall oppose

rr

iip.i

1WO

With

very valuakle on
coveries made last

r*

Lampeau

(Special to the financial chronicle)

DETROIT

Courtney

Mich.

and

Elden

John

J.

will

audiences.
were
see

.a

on

Last

H.

If

a

the

million

willing to

pay

mpvie and

100,000

pay

$2 each to

ballet, there would be

no

$1

see

ballet.

R. C. O'Donnell Adds

the

^
earnings

DETROIT,
now

Mich.

—

George

H.

connected with R. C.

O'Donnell & Co., Penobscot Bldg.,
members of the Detroit S. E.

o

® 1P

over

up

year

Yn
the past

+u

only

a

gross

little

in
10

revenues

more

than

4% from the like 1954 period and
Federal income taxes were nearly
double

those

of

earlier,
However, the transportation ratio
was cut by more than two
points
a

year

to commercial

April

3, 1955 the
backlog of the company
wholly-owned subsidiaries

am0unted

to

about

$1,085,401,009,

approximately 84% of which

rep-

resented orders from the Govern-

Pacific's-

During the first quarter of

current

were

(Special to The Financial Chronicle)

d

Lockheed's
am0unted

income

^
a"f
age

parts
At

ment.

earnings °n a1 consolidated basis

years.

Liebel is

a n

year.

Southern

year

and

estimated

basis of dis-

Dreher

the type

attract

aircraft

customers.

ests feel that the acreage in Nevada
in
particular may
prove

Communications Commission.

People who make have become affiliated with R. F.
will have to Campeau Co., Penobscot Bldg.

which

people would
a

to

endanger the scope and
quality of nationwide news and
public service programming, we

investment

an

get it back by putting
of

afford

in-

and

nomic facts of life. It is
est kind of

as

say,

of

be pay-television for those

unsupported

promoters

it

television cannot afford

claim,

pay-television

tele-

who want the unusual, the sort of
entertainment and culture which

We

public's

would

under

what

getting

free

weighs the potential gains of the
pay-television scheme.

could

improbability.

want

who

of

the

in

(he proceeds from the sale to meet
increased cash requirements for

popular, programs it nows enjoys
hours when most people watch free; because it would become a
television, co-existence would be discriminatory service, available
in large part to only those who
unlikely; it would be an economic

If,

Try it out in the market

public in dollars and

loss

,

amortization certificates. All of
these
property
and
equipment

increase
The cost to share earnings appears to be

During the

One of the arguments made by cultural
programs
appealing to
the promoters of pay-television 15^small
minorities. We believe the
that its introduction would hurt
reverse to be the fact.

nobody.

are

economy.

Because

could be charged for.

to the highest bidder.

be-

long to all the people all the time,

We

vision;

blame the

the turnstile

as

the

continuing

he

But,

entire

our

could

is

naive

neighbor.

plishments.

amples is true of every one of the
public's favorite programs. If paytelevision is authorized, nobody

television, no set owner
is deprived of a program because
not

would

doesn't pay.
What is true

American

is

95%

scrambled

where

present

much

as

Once

Town"

be-

now

other

channel

spectator admissions.
Under

modest

unwilling to
the, "free choice" that pay-tele- see the present system, under
vision
which
promoters want to give
everybody • watches telethem: the free choice of not watch- vision ; as
much
as
he
wants,
ing "Toast of the Town" or pay- destroyed and a great and unifying to see it. It's the old story of ing medium of communication disletting the camel get his nose into rupted, with attendant dangers to

viewing far
than
it
now

the

by

15 to 25 times

for

—

programs

watches

pay

year—more

for shoes

pays

electricity

or

would

a

the

up

televise

cannot

television

the

der

put

sounding sum of 500 for each of information and
entertainment
game. Thus the people would pay not even
the wealthiest could have

card for which the viewer pays.

Since

to

to

was

sales

in

1954

$732,872,000 and net
$22>44W equal to

$7'94 per share on the taPital
stock* The comPany's Principal
plants

are

in Burbank, Calif,

With Straus, Blosser
(Special to The Financial CkroniixEI

DETROIT,

Mich.—Peter Kon-

rad has been added to the* staff
of Straus, Blosser & McDowell,

Bankers Equitable Building.

Number 5432

181

Volume

.

.

.

The Commercial and Financial Chronicle

(2429)

to

lowed

Doubts

plan

adequate

disarmament

Each

effects

ordinated

its

in

employment
ana

Government

the

maintain

to

measures

Western Powers and Russia has

must

before

produce its eco¬

can

elaborate

should

that prospects of a meeting of heads of the
failed to produce any dramatic
the British markets. Sees doubts of Soviet good faith,

countries

measures

effects.

nomic

PAUL EINZIG

Dr. Enzig reports

on

might

It

of control.

out

the Democratic

of

"Big Four" Meeting
By

two far,

proceed

is against
this danger that the Governments
get

Forthcoming

on

By JOHN DUTTON

necessary

trade

Toll Road Bonds

and

country

own

The

these measures should be co¬

is

There

time to lose. If it
that
the
matter
is

stantial cuts in the arms produc- given the necessary attention, this
would
go
a
long way towards
tion and stockpiling, it is liable
mitigating the immediate psycho¬
now
willing to participate in to affect the economies of the free
logical adverse effects of the con¬
top level meeting of the heads countries quite considerably. Un-

LONDN, Eng. — The announcement that President Eisenhower
a

United

the

of

less

States, British,
French

and

Gov-

Russian

ernments, and

a

to

reaction

this

preparations

slump.

are

of

develop-

spy

writer

to

published

with

Linzig

nite

no

defi¬

tendency.

a

novel entitled "Wish-

of

the

Kremlin

may

overlooked the possibility of
international
achieving a practically bloodless
should cause
world conquest as a result of an
ciate, but owing to the proximity economic collapse in the demoof the General Election there is cratic countries. That idea played
no sign
of any such tendency.
in fact a decisive part in the shapThe
Stock Exchange did not ing of Communist foreign policy
show any immediate response to during the early postwar period,
the political news.
It remained Soviet Russia had abstained from
under the influence of the Gen- embarking on world conquest by
eral Election factor. The improve- force of arms, not only; because
ment in the prospects of a Con- of the deterrent effect of the atom
sarvative ^viciory affected equi- bombr? but
ties favorably a ri d Government considered it expedient to wait, in
Loans unfavorably.
This -is be- the hope of :being helped-by>a
cause shareholders
are
bound to slump in s the x Western countries,
benefit if the Conservative Gov- Y-, Owing to the recovery of the
ernment should * be confirmed in United States from the business
office, while Government Loans recessions of 1949, 1951 and 1954,
might be affected favorably by wishful thinking, in this respect
the Socialist Government cheap must
have been abandoned in
money policy.
*'_■
Moscow; The Communist leaders
Possibly the; reason why the must have realized that a major
favorbale change in the interna- slump is not likely to develop on
tional political outlook has failed its own accord. This may possibly
to produce any immediate finan- have led to the present attempt
cial effects is that it is looked to engineer a slump by agreeing
with

doubt.
it

of

Moscow

more

amount of
the face
appears to be

certain
though
now

on

conciliatory, there is

a

wide-

spread feeling that sooner or laier
the hitches will become apparent,
of

basis

the

On

experience

past

businessment and investors would
to

like

prepared

concrete

more

see

Moscow; .rnn-

take

to

of

before they.are

Soviet good faith

ciliatory gestures at anything like
its face value.
Meanwhile they
make

cannot

whether
either

for

minds

their

up

is

there

much

optimism

or

cause

for

un-

easiness.
In

any

case,

even

if the heads

of Government should meet in the

future, and if their meeting

near

should result in an understanding,
the
be

immediate

effect is likely to

phsychological rather than
Under the proposed

terial.

ma-

terms

there would be no large-scale

dis-

armament, at any rate for the
time being.
The standing armies

to some disarmament

in

substantial.

Immediate cuts

military expenditures would be

relatively moderate. The effect on

The

mere

fact

be

as

have

no

immediate

spectacular
the im-

effects should not convey




as

attractive issues

of these

have

they

as

offered

been

beginning to wake
and buy them too.

public is
up

now

Co.

&

Incorporated

And

and

Here

are

that

issues

bond

sand,

of

his bonds

per share.
This offering
quickly oversubscribed.
Of
the 200,000 shares olfered, 122,053

$10

was

shares

were

.company
on

sold

and

on

behalf of the

77,947

shares sold

behalf of certain selling stock¬

holders.

investor

run

millions. An
buy five or ten thou¬

can

half million of these
and
enjoy marketability

or' a

bonds

He

that is second to none.

through

any

can

broker or

quickly as
telephone.

he

can

pick

up

proceeds from the sale of
the 122,053 shares offered for the
company, together with such ad¬
ditional funds as may be required,
will be applied to the prepayment
of the balance of the company's

4% bank note due Aug. 12, 1959.
Proceeds from the note, originally
$1,400,000, were used for the re¬
demption of all of the company's

outstanding < 7 %; cumulative pre¬
stock, 'w,

the

sometimes wonder
why it is that the people in the
business

securities

been

have

interest.

is

there

If

built

near

there is

being

road

toll

a

community—if

your

new

a

road in your state

where a ferry
that cuts off

bridge

new

—a

used to be—a tunnel

labored miles, or a cause¬

many

that is going to save time and
as well as human lives
in the future, tell it to your cus¬
tomers.
Tell it to the people in
way

so

the

by offering them in¬
to how they can

town

your

formation

as

their

make
twice

fast

as

day

salesman re¬

a

call from a customer who
claimed that the price he paid for
an
unlisted security was higher
ceived

a

it

than

quoted in the

was

salesman

The

paper.

ly held issues of tax exempt secu¬
rities
are
so
vastly superior in

buy some of

grade municipal bonds will fluc¬
tuate with money rates, but me¬

?;*

ijj

other

The

public just how much these wide¬

marektability
to
many
other
forms of investment. True, high

savings grow just
in these good tax

exempt securities.

as

I

lax in the matter of informing

Net

sell

securities just about

in

dealer

and

tempers

Not?

Why

May 20 offered 200,000 shares of
Progress Manufacturing Co., Inc.
common stock (par $1) at a price

daily

politely

time you want to
this stock, Mr. Smith,

said: "The next

call up the daily

why don't you
paper,

and if they'll sell

it to you

price it-was offered in the
paper, call me and I'll pay you a
quarter of a point more for it."
He made his point! Quite often the

at the

grade toll road bonds, and
authority '; bonds
will fluctuate
even less so in this respect. These -spread on unlisteds in the papers
v
bonds
are
acceptable ~ collateral is out of line with markets.

dium

ferred

with banks for the purpose of me¬
Manufacturing ; Co., dium term or short borrowing.
Inc., .and its two wholly-owned -They, meet every test of a con¬
subsidiaries are" engaged in .the servative *> investment
and they
*

'

Progress

;

scheme,

a

result of heavy arms expen-

an

manufacture

and

wide ^provide both market stability
fixtures pri¬ excellent marketability.'

sale

of

a

Variety Of lighting
marily for residential use. - Fix¬
tures produced
by the company
and its subsidiaries include both
incandescent
for

tures
and

and

florescent

fix¬

bathroom hall
residential use as

kitchen,

general

•v-

"

VY
•

:

v.

The

the year

1954, the corpora¬
subsidiary, Minute
Inc., had total net sales
of $12,308,450 and net income of
$670,654, equal to $1.22 per com¬
and

:*

3% tax-

The difference between

who

has

to

pay

out 50%

its

Mount Co.,

keep if he holds
he has

two,

or

&

of

members

the

treal,

American

Stock

10 years,

Charles King

Broad\yay, New York,
Y.l Charles King & Co. are

Co., 61

N.

If

and he expects

for five or

The

the

private wire to

rect

to just
he can

tax exempts.

—

South ;15th Street, an¬
installation of a di¬

225

Inc.,

nounces

of this

these reserves for a year

to hold
or

program

a

PHILADELPHIA, Pa.

Philadelphia investment securities
firm of Arthur L. - Wright & Co.,

Yield

as
jnany
lantern-type fix¬ -income (in taxes) amounts
tures for outdoor and garden use.
doubling the income that

For

and

v.;>,

well.

tion

Wright Wire
ToChas.Kingin N.Y;

Arthur

:aJble and 3% tax exempt, to a man

Inter American
.

economic point of view at any

rate, they are

Toronto,

and

Mon¬

Canadian

Exchanges.

Communist
have had

some

■

Industries, Inc.
i

r

-

.

COMMON STOCK

not afraid of dis-

(Par Value lOtf per

armament.

share)

argument may

Price $5.00 Per

foundation in the

But the new economic and
sociai policies adopted in the free

Share

pasc

evident that it

maintain

a

war have

is

high

now

Copies of the prospectus may

made

be obtained from

possible

UNDERWRITERS

level of em-

ployment even in the absence of

large-scale military expenditure,
The danger lies in the transition
pression, however, that the change period during which a sudden reof attitude
on
the part
of the duction of arms production and
Kremlin is of no importance from stockpiling demand for raw matean
economic
point of view.
If*-rials is liable to set in motion a
and when there should be sub- deflationary spiral which, if al¬

been

most

show them
awaken

can

you

advantages

their

bought

into the many, many

diture. It is for the Democratic
Governments to prove that, from

correspondthere

these

in

been

have

But

bonds.

•

to

that

and

yields.

which they now pay
tax and turning
into tax
exempt

income
funds

these

Arthur L. Wright & Co., Inc.
the mon share.
when you add compound interest
■;:V
•:
Y .
Y
also maintains direct private
change in the Soviet attitude is
to
this
tax
exempt set - up as
Joins Craig Halium
inspired by such motives is no
wires to A. W. Benkert & Co.,
against a taxable income, you be¬
reason
for not welcoming the
(Special to The Financial Chronicle)
Inc. and Wm. V. Frankel & Co.,
gin to come up with some mighty
change.
There may be strong
MINNEAPOLIS,
Minn. — Vin¬
Inc., New York and C. T. Williams
military and political arguments cent O.
Law, Jr., is now with persuasive arguments for these
& Co.; Baltimore, Maryland.
against disarmament, owing to the
Craig-Hallum, Inc., Rand Tower. tax exempt bonds.
ever-present danger that the
Communist countries would be in
a better position to conceal their
arms strenght or to reconstruct it
This advertisement is neither an offer to sell nor a solicitation to buy these securities.
at short notice. The argument that
The offering is made only by Prospectus
disarmament is liable to lead to
a
slump must not be allowed,
NEW ISSUE
however, to influence the Western
attitude towards disarmament. It
150,000 SHARES
has always been one of the favorite
arguments
of
Communist
propaganda that full employment
under capitalism is only possible

production and on the balances of countries since the
payments would
mgly restricted.

have

and

vanguard

upon

heavy

itself the suspicion that

in

of the V/esiern Powers would remam

ment

usual institutions and

investors

informed

the

attractive

Deetjen & Co. were joint
managers of a syndicate which on

improvement of
political relations
sterling to appre-

a

agree¬

as

available

also

are

similarily

Although

operation.

put into

Blair

an

Even

offer

Emanuel

have

read a translation of this imaginain
tive piece of writing and it may
showed
weakness
following
the have given them an idea or two.
announcement. Its decline is at- Or perhaps they may have artributed to the desire oi holders rived at the same idea independto
hedge against the possibility ently through sheer coincidence,
of a Socialist victory at the Gen- In any exent it would be surpriseral Election today (May 26). The ing
if the Communists leaders

upon

thorities

Offering Completed

immediate reaction was
"security
sterling"
which

of

time

vantages of converting an invest¬

tax

exempt obligations of
the various bridge and tunnel au¬

Progress Mfg. Stock

The only

prospects

is

are busy, they are try¬
ing to make money in their own
business. They are usually not in¬
terested in working out the ad¬

which

the

on

during the past few years, the lay

means an economic crisis in the
democratic countries.
The new
rulers

Other

measures

disarmament

the

bonds

People

market, af¬
fording income yields that are ex¬
empt from taxes from a range of
2V2% all the way up to 4%%.

agree¬

enough

necessary

Road"

soon

ment

pro-

fairly steady
hfcul

"Toll

available

are

fiction, Bernard Newman,

duce any

Ur.

the

adopt

before

ful Think," in which the Soviet
Government pretended to accept
dra- all
the 'terms of the Western
matic
effects Powers concerning disarmament
on
the mar- and the termination of the cold
kets.
Sterling war. It was found that Moscow's
remained object was to bring about by such
far

Governments

cratic
to

disarmament

a

Advertise Them

becoming

now

of the attractiveness of the

This would give the Demo¬

ment.

failed

ment,.
so

of

clusion

•

In 1954 a popular British

Russian

the

adequate

made to meet the situation there
would be a possibility of a grave
business recession developing into

is

aware

by

no

realized

is

public

many

supplemented

and

international action.

should the meeting result in an understanding, the
effect is likely to be psychological rather than material.

and holds,

is

21

•

\

Baruch Brothers & Co., Inc.
44 Wall Street
New York 5,

New York

Milton D. Blauner
115

& Co., Inc.

Broadway

New York

6, New York

22

(ICO)
The Commercial and Financial
Chronicle

.

.

Thursday, May 26, 1955

.

advertisement
advertisement

advertisement

SOUTHERN RAILWAY COMPANY
Sixty-First Annual Report for the Year Ended December
31, 1954
March 23, 1955.

v

To the Stockholders of

]

Rents, amounted for the year 1954 to
$34,557,054, as
compared with $41,986,218 for 1953, a decrease of 17.69%.
A comparison of the ratios for 1954
with those of the

SOUTHERN RAILWAY COMPANY:

two

preceding

'

With the approval of our Board
of
this report of the affairs of
Southern
for the
year
ended December

31,

formally

presented

to

1954.
stockholders at

our

It

will

the

be

of

years

the

several

subdivisions

of

Operating Expenses, Taxes, and Equipment and Joint
Facility Rents, expressed in the number of cents out

Directors, I submit
Railway Company
;

of each dollar of
revenue^

is

as

follows:

annual
1954

meeting due to be held in Richmond,
Va., on May 17,1955.
In 1954, your railroad
was operated with

'

"

1953

1952

*

efficiency and economy,

tion

ratio, the

good

operating ratio, and

operation.

overcome

income

a

as

as measured

This

,

31.91#

outstanding
by the transporta¬
other yardsticks of

Incidental

compared with the high receipts and
earnings

of 1933.

12.b9#

17.83#

17.88#

However,

the

downward

began in November,
1954.

Our

1953,

for

gross

the

trend

latter

in

business

reversed

was

month

in

improvement trend
of 1955 and is
the year.

has

continued

hopefully expected

Industrial development
Southern went ahead at

in

above
sub¬

of

This

the

1953.

first

to continue

quarter

throughout

the

South

served

by

Taxes

is

estimated

will

produce

an

that

these

annual

and

new

rail

freight

of

excess

expanded

revenue

$20 million.
Prospects for another year
steady industrial growth are
exceedingly favorable.
The Directors and
your
management

the stockholders

for

wish

to

in

of

thank

their

support and confidence, and
acknowledge with appreciation the
contributions of
employees to the Company's
progress in the year 1954.

to

our

HARRY A.

DEBUTTS,

:

~President.
HIGHLIGHTS

_.

Tax

Accruals

Stock

31.91

15.61#

1.41#

1.40#

86.13d
86.13#

84.75#

86.61#

Common

13.07

__

$26,262,681

___

Income

viding

Per

Share'

Stock

for

after

of

ferred Stock
Total Dividends
Stock

__

mon

Total

on

9.56*

$2.50*

3,000,000

—

2.00*

of

Shares

6,491,000

18,474

5,192,800

19,067

18,244

Stockholders

of

of

Stock

1,200,000
2,596,400

—

•Adjusted to give effect to

2 for

1 stock

THE YEAR

1,200,000*

1,200,000*

2,596,400*

2,596,400*

split in June,

1953.

iate

1954

a

that follow are for
the entire
year,
statistical analysis would
probably differenthe first ten
months and

between

nasmuch

the

last

two

as
the receipts and
the performance
figures
getting comparatively better as
the year progressed.
Operating Revenues in 1954 were
$249,079,701, down
1.50%, or $26,132,645 from 1953.
Freight Revenue fell
>ff
10.21% ar.d
vere

Passanger

the previous
The .volume of

rom

eceipts therefi

handled

om, as compared with

Freight moved (t< ns)
Average distance moved
Ton miles

Average revenue

Revenue

per

ton

1954

11.06%
and

(miles)——

the

were:

1954

1953

62,780,260

225.22

1.609#

1.767#

$236,557,267
2,472,143

2,231,324
245.79

249.89

548,433,268

passenger

mile

617,759,823

2.825#

revenue

2.820#
$17,420,561

$15,494,242

Operating Expenses decreased
by $10,298,585,
is
compared with

or 5.52%,
1953, the larger savings
being $5,036,619
Maintenance of Equipment
Expense, and $4,867,282
ess
Transportation Expense.
Maintenance of Way Ex¬
pense decreased
by $518,782.
2ss

Railway Tax Accruals declined
by 20.99%
corresponding 1953 Accruals and
387.

This

amounted

represented

about

Operating
;nare of

Revenue and
Common Stock,

was

from

to

13d

the

$33,937,-

out of each dollar
of
equivalent to $13.07 per

as compared with
thereon for the
year of $8.95.

a

net

earning

Net

Railway Operating
Income, being what is left of
Operating Revenues after deduction
of all
Operating
jSxpenses, Taxes, and Equipment




and

in such

ac¬

taxes

being equivalent

(being about $247,500,000 in 1945 and
$249,000,000 in
1954), Net Income for 1945 was equivalent to $5.12 per
as

compared with the

'

further concentration and mech¬
anization
of
equipment maintenance, elimination of
duplicate practices and services, and a drive, in general,
to

the

save

way,

last

possible

of

out

penny

the

Cdmpany's

gross revenues.

V

The Company continued its program of

discontinuing

unprofitable

passenger trains,
and thirty such trains
discontinued on Southern Railway
System Lines
during 1954.
During the year, there were abandoned and scrapped,
with authority of the Interstate Commerce
Commission,
9.8 miles of the leased line of the
Transylvania Rail¬
road Company,
running from Rosman to Lake Toxaway,

N. C.

Operation of this segment had been discontinued

from

the

1954

earnings of
figure the tax
there still remains

latter

amortization,

Joint

Facility

New

During

there

1954,

of

new

New

Early

in spite of sharply higher costs of
labor and
materials, on a gross which exceeded the
earlier year by
only $1,542,868, the Company earned a
net income in 1954 of

$9,963,960

than in 1945.

more

in

to

the

Annual

ordered

was

In

January,

The

entire

cost

non-cumulative Preferred
of

62V20

per

share

the

Stock were

quarter.

per

$50

of

means

down

equal

payment,

on

the

Common

1953 after

On

the

Common

providing there¬
There

also

16,

same

an

extra

dividend of $1.00 per share on
the Common
Stock, which was paid on February 15,
1955, and a dividend of. 750 per share on the
Common
Stock, which was paid on March 15, 1955. This latter
dividend of 750 per share
compares with a dividend of
62V20 per share on the Common Stock which was
paid
in the previous
year, on March

15; 1954.

The efficiency ui the
Tne
eillCiency of me pajpci ^ ux the
property of •-««=

operating
a

entity,

w**vj

?

has

——

increased

cent years.

Company, as
through

markedly

—

w

_

an

anization,

costing over $230,000,000 in the 1946-1954
period, and the extraordinary accompanying

advancement

in

economical

In

operating techniques.

the past six
years, the
performance has improved

ducing 48,960
1954

as

gross ton

Company's freight haulage
by nearly two-thirds, pro¬
miles per freight-train hour in

compared with 29,577 ton miles in 1948.

Wages, for the Company and all other
railroads, are
the principal element in
Operating Expenses, but de¬

spite

the

wages

to

many increases in wage rates, the
the Company, expressed in cents

out

cost
of

of

the

operating dollar, has decreased, because of
economies
resulting from capital expenditures and
efficiency tech¬
niques, from 48.10 in 1948 to 44.30 in 1954. The
latter
figure may be compared with
approximately 49.00 in
1954
for all Class I railroads.

;
.

'

*

forma statement for 1955 would indicate, after
adding in the Conditional Sale Agreement covering the
box

to

cars

of

be

acquired

Equipment

.

in

1955,

Obligations

December

outstanding
approximately

an

of

31,

1955,

the

installments

-

of

payable in 1955 of $9,502,705, being
offset by
estimated depreciation (exclusive of rapid
amortization) chargeable to operating expenses, in the
amount cf approximately
$9,200,000.
Acquisition of New Lines
For

the

many

1930's,

during and after the depression^ of
necessary in the Company's in¬

years

it

became

and in that of its affiliates and
subsidiaries, to
abandon with ICC approval substantial
segments of un¬

profitable

mileage to effect the great savings detailed
Reports for those prior years.
increasing industrialization of the South,
however, and the spreading of the industrial potential
into new territory, an
interesting development has taken
place in the recent past, and is continuing, wherein the
Company, its affiliates and subsidiaries, have found it
in the Annual

With

the

advisable
short

and

lines

System.

profitable

for

them

to

acquire certain
mileage as feeders to the
complete turn-about in the Company's

and

This is

additional
a

outlook.

The

first instance was the
acquisition in 1952 by the
Compahv's affiliate, the New Orleans and
Northeastern,

of the Louisiana

Southern

Railway Company, at a cost
$1,038,000. The line of the railway
extends from New Orleans
along the east bank of the
Mississippi River, a distance of 14.7 miles to Braith.—
waite, Louisiana. It is being operated
approximately
i

re-

trxA
This has resulted from the pnnHinatinn of
coordination of
large capital improvements for modernization and mech¬

post-war

in
no

annum.

A pro

of

Operations

vyv.iuvi.*ij5

per

terest

the

declared

3%

31, 1954, the Company's outstanding
Equipment Obligations amounted to a balance of
$75,-"
489,165, as compared with $85,015,025 at the end of 1953.

an

surplus

$12,087,400 is the largest amount of
any recent year.
surplus net earnings of 1954, after pro¬
viding for dividends of 5% on the Preferred
Stock, there

were

of

by

Equipment Obligations

was

1954,

The total of

of

cost

with

debt

dividends paid in
Out

interest

an

payable

installments

December

equipment

dividends, out of 1953
earnings, aggregated $2.50 per
share, or $3,000,000 on
the Preferred
Stock, and $3.50 per share (including the
extra of $1.00 per
share), or $9,087,400, on the Common
Stock.

Agreement,

•

approxi¬

Company also has on order two Diesel-electric
road-switching locomotives for delivery in August, *
1955, which will be paid for in cash.

continued, at the

February

on

Sale

at

financed

The

at

dividends.

Stock,

cars, estimated
contemplated to be

semi-annual

at

$75,982,460

quarterly dividends of 62MJ0 per share were paid
March, June, September and December, 1954, out of

the surplus net
earnings of
for the 5% Preferred

these

is

Conditional

a

twenty-four

value

par

Stock

from

of

mately $10,000,000,

1,200
on

"<•*-

Report for 1953; but no new rolling
during the year.
1955, there were ordered, for delivery
early in the year, 1,200 50'6" 50-ton all-steel box cars.
stock

balance

During 1954, dividends of 5%

Equipment

in

1954, the Company received and put into
service the thirty-nine 70-ton flat
cars, the 240 70-ton
covered hoppers and the 250 95-ton ore cars
referred

At

in dollars,

were

149.82

1945.

Thus,

Rail

laid 30,024 tons, or 146.12
rail, as compared with 28,739 tons, or
miles, laid in 1953.
The Company has ordered
36,000 tons of new rail for
the year 1955.
miles

$7.39 per Common Share for
1954, an increase of 44%
over

13,388,753,269

$212,394,314

Commission

reduction

a

approximately $4,048,000,

213.26

13,203,652,889

mile

of
Passtngers
Average Journey (miles)
Passenger miles
Average revenue per

passenger

in

1953,

58,626,459

Number

Total

declined

year.

business

Commerce

extra dividend of $1.00
per share out of the
net earnings of 1953.
Thus total disbursements for

statistics

although

Interstate

per share of Common Stock.
For illustration of progress in the
ability of the prop¬
produce net earnings, the results of 1954
may
be compared with the results of the
year 1945. Although
the gross revenues of the two
years were not far apart

paid

Operating Statistics
The

under

of

erty to

in

Outstanding:

.

Preferred
Common

1954

to about $1.56

rate

9,087,400

Humber
.Number

.

preciation

counting regulations, effected

Dividends

Stock

;

the Preferred

Stock, con¬
was equiv¬
Stock, as
compared with $11.62 in 1953 and $9.56 in
1952, the
latter figure adjusted for the stock
split in June, 1953.
Rapid amortization on certain capital investments
made in aid of national
defense, allowable in. computing
federal income taxes, but not
chargeable to regular de¬

3,000,000

2.50*

Common

on

$2.50*

3,000,000

3.5C

Dividends

$43,352,931

11.62*

Com¬

Stock

dividend of 5%

a

Common Share

16.54*
16.69*
$33,190,325
$27,834,9ld

$2.50

*.

After

suming $3,000,000, the balance of Net Income
alent to $8.95 per share
on
the Common

$8.95. After deducting
deferment from rapid

,

Preferred

Dividends Per Share of

1953, and 13.390 in 1952.

Net income was
$2-3,262,681, as compared with $33,190,325 for 1953, and $27,834,916 for 1952.

32.64

$42,952,412

8.95

_____

on

of

Net Income

63.25

on

Preferred Stock
Dividends Per Share of Pre¬

After

30.65

Pro¬

Dividend

maintenance

.

were

the above
deductions, there remained for fixed
charges, for capital and corporate needs,
including the
proposed retirement of the 1956
maturing bonds, and
for the owners, 13.870 out of each dollar
of the year s
gross, as compared with 15.250 in

compared with 17.100 in 1948, a substantial improve¬
ment, and one which ranks well with other leaders of
the industry.
\
■
'
/
): The operating emphasis in the year just closed has
been primarily on the mechanized
"streamlining" of

15.96#

1.80#

1

67.73
.

.$33,937,887

of

—^

Common

70.70

*

J icome

Net

YEAR

(Federal, State

..^Dd Local!
Taxes Per Share
Net

OF THE

;1954
1953
1952
$249,079,701 $275,212,346 $271,624,397
176,101,146
186,399,731
188,102,101

Operating Revenues
Operating Expenses
Operating Ratio
Transportation Ratio

Grand Totals

for

Sincerely,

•i

69.25#

13.63#

the

inspiring pace. In 1954,
plants* new large distribution
warehouses, and
major additions to existing
facilities, a combined total
of 353, represented an
investment of more than $508
million.
It

67.73#

Transportation Ratio was 31.910 for 1954.
Operating Ratio was 70.700.
Company in 1954, before Federal Income Taxes,
brought down 21.090 out of its operating .dollar as
The

late in 1953.

of

new

facilities

0.97#

70.70#

which

revenue

1.93#
3.14#

0.83#

November,

4.05%

was

November, 1953. December gross freight
stantially improved over the same month

1.86#
3.52#

Expense

ts
•

32.64#

13.04#

17.63#

Equipment—r___.

2.01#

sufficient, however, to
drop in operating revenues and net

severe

of

4.01#

not

was

30.65#

14.20#
Maintenance

The Cost of

The

~

*

-

C*.

*
,

-

line.

became

A

A

~

iio'iiahlp
valuable

available

already the

3
,

no

XV

j.

short

to

Louisiana

nPW
new

_

industrial

Southern
Southern

seParftely
tGITltOry
territory

„

a

®

thus
lllUb

Railway
is

System, and
currently applying

to the Interstate Commerce Commission for

authority to

extend its line 3 miles to reach the site of what
promises
to be

major new industry.
Again, in 1954, the Company's affiliate, the Georgia
and Florida, acquired all the stocks of two
railroads, located in south Georgia and north Florida,
at a cost of approximately
$1,020,000. One of these rail¬
roads is The South Georgia
Railway Company, extend¬
a

Southern

ing

from Adel, Georgia (where it connects with the
Georgia Southern and Florida), to Foley, Florida, a dis¬
tance of 77.48 miles.

Perry

and

Gulf

The other railroad is the Live

Oak,

Railroad

Company, extending from
;Springdale, Florida, to Live Oak, Florida, operating,
with a branch, a total of 58.37 miles. These
two lines
connect

with

each

other

at

Perry

and

Foley, Florida.

r

\

Volume

Number 5432

181

.

.

(2431)

The Commercial and Financial Chronicle

.

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

23

SOUTHERN RAILWAY (Continued)
The

acquisition of this substantial additional interest
Cincinnati, New Orleans and Texas Pacific Rail¬
way Company is also another step in the integration of
ownership by the Company of its System affiliates.

industry and con¬

These lines serve another major new

in The

profitable venture at present, but
also are expected to become a more profitable one as
other industries develop in this new territory.
stitute

not

only

a

After

the Company owns directly
165,028 shares of The Cincinnati, New Orleans and Texas
Pacific
Common
Stock, and the Company's System
affiliate, The Alabama Great Southern Railroad Com¬
pany (in which the Company has a-56% interest) owns
directly 147,033 additional shares. The total ownership
b.y the Company and its affiliates in such common stock

Finally, the Company has agreed to acquire, at the
cost of about $525,000, the capital stock of the Atlantic
and East Carolina Railway Company, subject to approval
of the Interstate Commerce Commission. This company
ileases and operates a

short line railroad extending from

to Morehead City, North
miles, the controlling own¬
the State of North Carolina,
the development of the port
of Morehead City, on the
Atlantic Ocean. The Company believes that this acquisi¬
tion will ensure the present and future development of
the territory and port. It also believes that its opera¬
tion, together with the operation by the Company, under
lease from the Navy Department of the United States

North Carolina,
distance of 95.82
ership of the lessor being in
iwhich is vitally interested in
and the new port facilities
Goldsboro,

Carolina,

a

Carolina.

NET

is

by

granted

Amounts

4%

With these acquisitions, the mileage to be operated by
Company, its System affiliates, and its and their
-short line subsidiaries, will aggregate approximately
the

"

550,605

include

the

of

550,605
$283,789,230

Company's

St.

Taoie

4,

by

the Company

Louis Divi¬

tDoes
and

v

note

not

include

of

$4,474,000

of

Dec.

31,

$12,474,000

East

the

the

of

Tennessee

Louis

St.

Bonds

Division

referred to

in

§Does

not

$18,548,500

include

Securities

of

subsidiaries

of

Use in 1954 of the Company's Financial Resources
In

addition

taxes

meeting

to

all

of

its

current

treasury cash the following conspicuous items:

v

•

(1) For capital improvements to Road and Structures,
$7,541,885; for Equipment, . $13,780,111, consisting of
'installments of Equipment Obligations, $9,525,860 and
for additions and betterments to equipment, $4,254,251,
making

aggregate of $21,321,996 capital expenditures

an

for the year, as

compared with $21,979,076 in 1953;

For dividends, $12,087,400, being $2,596,400 more
than in 1953;
(2)

;

foot-

The

fact

by

the

that

Company

or

Funded

net

its

Debt

as

of

as

December

31,

31,

Promissory Note, to be amortized
within ten years, referred to above, which also serves
to increase the Company's fixed charges.
Although the
increase is more than off-set by the return on the com¬
mon
stock of The Cincinnati, New Orleans and Texas
Pacific acquired with the proceeds of this Note, the
return, however, appears in Other Income rather than
in

reduction of fixed charges.

a

<

and

(4) For the acquisition and cancellation of $2,605,000,
principal amount of the Company's Development and
General Mortgage Bonds, and the acquisition by a sub¬

principal amount of the Company's
Virginia and Georgia Bonds, both issues
/maturing in 1956, $2,744,059.
$45,000,

sidiary of

fixed charges, on an annual basis,
as
defined by the Interstate Commerce Commission,
were
approximately $12,279,000 at December 31, 1954,
a
slight decrease from tne corresponding amount at
December 31, 1953. The Company's net

current net fixed

The

charges

are

equivalent to only

of 1954's gross.

4.93%

East Tennessee,

Company had left on December 31, 1954, (a) in¬
vestments in United States Government securities in the

the close of business for

[ cleared through the banks at
the year.

'

;

the

Acquisition of Additional Interest in the Common Stock
the

Cincinnati, New

Orleans

and

Texas

Pacific

Railway Company
substantial

acquisition of stock of The Cincinnati,
New Orleans and Texas Pacific Railway Company was
effected in November, 1954, with Interstate Commerce
Commission approval.
This was financed through the
A

sale, under competitive bidding, of the Company's Col¬
lateral Promissory Note, dated November 1, 1954, in the

principal amount of $15,000,000 (payable in installments
November 1, 1955, $500,000 on November

1956, and $1,750,000 on November 1 in each of the
years 1957 to 1964, inclusive), at par, with interest at
3.23% per annum.
entire

The

the purchase
Ohio

of such loan

were

used

to

pay

price of $15,000,000 to The Baltimore and

Railroad Company for

its interest in the stock of

Southwestern Construction Company.

The Southwestern

Construction Company, a holding company, was

imme¬

diately merged into the Company's System affiliate, The
Cincinnati, New Orleans and Texas Pacific Railway
Company; and the Company's interest in Southwestern
was
converted
into
its
allocable proportion
of the
common

Pacific

stock of The Cincinnati, New Orleans and Texas

Railway

Company,

formerly

held

by

South¬

western.

fore
of

The

result of

the transaction

was

that the

Company

This is an additional 25% interest in the
latter, which, at the current rate of dividend being paid
thereon, produces an income to the Company, after the
Federal Income Tax on intercorporate dividends at the
current rate, of $829,650 annually. The net return (after
deducting the cost, after Federal Income Taxes, of the
way

Company.

interest

on

the purchase money loan) amounts to $597,090

the first year, and will

progressively increase

is curtailed.




as

the loan

1956 Maturities

approximately $168,786,500.
Included

amount

New Plants

During the year, 102 new

industries were located at

aggregated

points served by System lines, v These plants
an
investment of more than $378,000,000 ($133,000,000
of which represents
private capital), with estimated
new
annual rail freight revenue exceeding $8,000,000,
and

providing

a

potential of 11,660 jobs.

Distribution Warehouses

year's Report noted the growing number of
warehouses being set up throughout the

Last

of

in

this aggregate were

the

Company's

$62,948,000 principal
and General

Development

and 6J/2% Bonds due April 1, 1956,
amount of its East Tennessee,
Virginia and Georgia 5% Bonds due November 1, 1956.
There

6%

remained

of these

two

originally out-

issues,

stancing on January 1, 1942, in the aggregate principal
amount
of $124,103,000,
a
balance of $56,636,000 at
December 31, 1954, a reduction during 1954 of $2,650,000.
The

Company expects

to pay these bonds

(less any

acquired in the meantime), at their respective maturities,
from treasury cash. If this be done, fixed charges will
be

ritory as indicative of

reduced

by approximately $2,785,000

annually from

this source.

and Agricultural

Forest

Construction of

new

Development

Additions to Existing

factories moved at

a

slower tempo

1953 but the outlay in new plant
investment, exclusive of TV A and other governmental

expenditures,

exceeded that of the previous year by

was
the significant
projects, with plants estab¬
lished to manufacture precision tools and machinery,
silverware, lawn mowers, electric clocks and wool car¬
peting.
Further, developments also took place in the
electronics and metalworking fields, and in the produc¬

"than

60%.

Diversification

The

equipment.

jobs.

gains.

of the year's indus¬

The number of additions made to existing

plants surpassed that of any year since World War II,
textiles, furniture and containers heading a varied

with

group

of items, tie production of which was

materially

increased.
Investment

75%

_

in

expanded

plant facilities was

greater than in 1953.
was begun at three major pulp

Production

mills mentioned
rayon

in prior years' Reports, and

pulp mill near Jesup, Georgia,

nearly

and paper
at a large

Announcement has recently been

made of large expan¬

existing pulp

and paper mills at

sions

projected

for

importance of a

Alert to the

sound agricultural econ¬

the Company is taking an active interest in the
promotion of additional ammonia-base fertilizer manu¬
facturing and distributing facilities. There has been a
substantial increase in the use of liquid fertilizer, and
the territory served by /the System possesses many ad¬
omy,

vantages and

opportunities for its further

development.

of livestock and poultry production
and with it the location of several large

Expansion
tinued

con¬

feed

mills.

With

a

industry has brought
pulp-wood production, and
farms" are being established.

of the pulp and paper

increased

interest in

thousands of "tree

balanced and

diversified crop program, modern

production methods, increas¬
supplemental irrigation, and wider mar¬
kets, the outlook for the Southern farmer is bright.

machinery, more efficient

ing interest in

Of General Interest to
Electronic Data
In 1955 the Company

will place in service

Processing Machines
paper

basis.

It is

the Stockholders

Processing Machines

Data

Electronic

designed to perform repeti¬

work on a more efficient and economical
anticipated that this program will expand

next few years. Intense
increased efficiency and
economy in performing functions which are now per¬
formed manually or with less adequate machines, but
also to the development of new techniques and analyses
of basic information heretofore too costly to undertake.
It is expected that ultimately these machines can be
adapated to empty car distribution, with large econo¬
mies resulting from faster and better handling of such
equipment, plus increased shipper satisfaction.
rapidly and materially over the
study is being given not only to

included in 1954's

plants report.

•"

...

Agriculture—Livestock—Forestry

tious

-

healthy and substantial growth of existing indus¬

try was the most gratifying aspect

expansions, costing a little more

$130,000,000, made to existing

feature of.the new industrial

tion of air conditioning

Facilities

than
facilities along the Sys¬
tem's lines in 1954. It is estimated that these expanded
operations will produce an additional annual rail freight
revenue of more than $10,000,000 and provide 5,125 new
There were 153

about

in

purchasing

expanding markets. This trend continued
distributors opening up facilities
along the railroad, the largest number in any single
year since a record of new warehouses has been main¬
tained. Notable expansion was made for the storage and
distribution of petroleum products, leaf tobacco; flourfeed-fertilizer, building materials, food products and
chemicals.
Annual gross revenue to be derived from
these operations is estimated in excess of $2,500,000.
1954, with 98

during

Growth

Industrial,

more

the area's increased

dis¬

ter¬

and

power

$4,519,000 principal

trial

acquired 112,480 additional shares of the common stock
of The Cincinnati, New Orleans and Texas Pacific Rail¬

the

its affiliates retired securities, on
required to pay fixed charges, thereto¬
outstanding in the hands of the public in the amount

numerically than

proceeds

City, North Carolina.

established on the Company's
tracks at Louisville, Kentucky, and Jacksonville, Florida.
Similar facilities to be served by the Company are now
being considered for other cities.

and

Company

of $500,000 on

1,

and

which they were

Mortgage 4%,

.\-v.

from which,
Gaston and
spodumene
Kings Mountain, North Car¬

North Carolina. In 1951, a

January 1, 1938, to December 31, 1954, inclusive,

From

and

of

Reduction

Debt

The

principal amount of $71,601,500, held in reserve for the
acquisition of debt or reduction of maturing obligations,
'subject to further order of the Board of Directors, and
(b) cash of $28,811,809, as shown in the balance sheet,
the latter being reducible by items which were not

1954;

in

tribution

(3) For advances to its real estate subsidiary of moneys

;for the acquisition and construction of new industrial
facilities to produce income to the Company, $916,405;

Company

an

Collateral

money

the

of

Produce terminals were

increase of $2,524,740 over the previous
year, the first increase in many years, is due entirely
to
the
inclusion therein
of tne $15,000,000 purchase
1954, shows

by providing a ready market for the
land owner. Twelve such yards were

refinery was located at Bessemer

Es¬

although these Securities are shown in Table 6, supra.

expenses,

payments, the Company paid from its

fixed

and

owned

19o3,

they stabilize the economy
farmer and small
set up along the

producers but also because

established at
lithium chemical plant at Sunbright, Vir¬
ginia, in the following year. Capacity of both of these
installations was doubled in 1954, and another large

Bonds

Dec.

tates
v

industry

substantially as the country's

olina, and a

19^4,

Leeasebold

on

capacity. The South's pulp and paper

should continue to expand

refinery was

Leasehold E:tales,

as

above, fv'%

(*)

and paper

Lincoln Counties,

although these Securities are shown in Table 6, supra.
i

and forestry experts estimate that with the
being made in cultivation and conservation
methods the area can support twice its present pulp
nation,

advances

largest known deposits of spodumene ore
lithium chemicals are made are found in

sub¬
shown

a

on

subsidiaries

its

or

those

being studied in its survey. The South now produces a
little more than 60% of the pulpwood harvested in the

they are expected to
than $650,000.
The growing importance of lithium chemicals is hav¬
ing a favorable effect on the development and diver¬
sification of industry in the Company's territory. The

supra.

not include $18,516,900 of Securities

southern location,.and

the lines of the Company are among

sites along

produce annual revenue of more

Company's East Tennessee,

5% Bonds due in 1956, both held by
the amounts of both of tnese issues are

although

major producer is considering a

lines

$12,474,000 of the

and $4,519,000

Bonds

tDoes

*

'

;

85,015,025

and Georgia

sidiary,

owned

26,408,100§

75,489,165

(Table 5)

-----

not

*Does

in

$171,815,500t

26,258,700t

(Table 6)

third paper company

central Alabama for a proposed new

yards along the lines of the System. The wood-yards
are important not
only because they are good revenue

Dec. 31, 1953

81,1954

$184,015,500*

4)

$286,313,970

3)

VLginia

J

'

(Table

a

population increases. These operations have brought
about the establishment of many pulpwood concentration

CHARGES

FIXED

Totals

stock will be owned by the Company.

8,100 miles.

AND

Payable to Affilated Companies

(Table

Commission, the

the

DEBT

Equipment Obligations

J Marine Corps line will be operated by the Camp Lejeune
j Railroad Company, a new corporation all of whose
*

Debt

Leasehold Estates
.

•

authority

When

FUNDED

Dec.

Funded

sion

i

acquisition,

aggregates approximately 71%.

[Government, of the Marine Corps railroad, 36 miles in
length, serving the Marine Corps base at Camp Lejeune,
'will be most profitable, and will great.lv benefit t^e
economic
well-being of the : entire
State of North
;

such

Carolina, and Palatka, Florida, and
has just acquired a site in west
plant. Still another

Charleston, South

Rates, Fares

and Mail Pay

la
15%

general increases were sought by the railroads
freight rates during the year as the increase of
No

24

(2432)

The Commercial and Financial Chronicle

ADVERTISEMENT

ADVERTISEMENT

SOUTHERN RAILWAY (Concluded)
Parte

175,

in effect, is not scheduled to expire until

now

December 31,

matters

in

1955.

the

of

case

month.

each

1955

proceedings accordingly were instituted with the Inter¬

and

Interstate Commerce Act
states.

These

as

proceedings

under

to

are

Section

intrastate

13

of

in

rates

The

the

and

the

stability

that

to

as

from

$300 to $350 per
estimated $500,-

OUR

CORPORATE

Company looks forward with optimism to the

control

those

still pending except

employee

Looking Ahead

not grant the railroads' petitions for the
increase, as to intrastate traffic, as granted
by the Interstate Commerce Commission in Ex Parte 175,

Commission

of negotiation.

process

This will cost the
Company an

Tennessee, did

same general

Commerce

the

in

000 annually.

However, since certain of the states in the South, i.e.,
Alabama, Kentucky, North Carolina, South Carolina and

state

still

are

ADVERTISEMENT

Effective July 1, 1954, the tax base on which the tax
to finance railroad
retirement benefits was increased

by the Interstate Commerce Commission in Ex

granted

These

,

be

can

the

beyond,

years

were

never

greater, confident that

maintained

South

will

over

continue

The

policies

firm

a

and

were

the Interstate Commerce Commission
finding that the intrastate rates and
discriminatory against interstate commerce

ordered

exist.

removal

the United

District
order

of

of

unlawfulness

found

The

Carolina

to

set

aside

and

and

The

the

Leaving

Commission.

the

on

present

level of traffic.

approximately $500,000
in the North Carolina
litigation.

per

annum

Of

is

"

was

:

—

v

176,101,146

taxes

traffic

which

Leaving
Other

involved

required—

lost

other

to

33,937,887

derived

and

bonds

from

and

investments

As*

indicated

in

Making

total

a

Interest

miscellaneous

year's Report, the railroads'
seeking a 10% increase in com¬
transportation of United States Mail

and

the

the

the

Interstate

services, connected

Commerce

therewith,

granted

was

obligations,
and

-

"

Commission

in

its

order

of

Resulting in

a net

r

paid

Reports

the

over

equipment
leased

deductions

'

The

$34,557,054

$41,986,218

Service.

Under

the

settlement

J- '

tee

Internal Revenue Taxation

on

involved.

The

net

over-all

of

the

additional

$2,500,000 has been made.

railroad

tracks,

other
Less:

fixed

Depreciation,

donations

and

and

]tax

and

other

payment

of

Unexpended
for

balance

under

last

year's

Report,

of

which

referred

to

the

July, 1953, report of Interstate Commerce
Commission

Examiners recommending dismissal of
all the Govern¬
reparations cases, these cases have
been fully
briefed and argued to the full
Commission. Final deci¬
sion by the full
Commission is expected soon.
ment's

Seatrain Litigation

the

number

District

Court

the
for

of

Company, remains pending in

the

District

of

New Jersey, to
it was remanded
by the United States Court of
Appeals for the Third
Circuit, as stated in the last An¬
nual Report.
which

Total

The

For

number

a

extensive

by

laws and
intense

years,

railroads, street railways,
and
other
corporations >having
injury litigation have found their
claimants sharply
increasing. This has been

personal

combination of unfavorable
factors, such
court decisions more
favorable to
a

activity and organization by lawyers

as

claimants,

represent¬
ing claimants, and the tendencv of
present-dav juries to
award

extremely

striven

these

large

to hold

oown

payments,

In

verdicts.

the

The

increase from

1954

it

was

Company
year

successful

lo

not

preventing

has

year

in

only

in

any increase, but also in
actually effecting
decrease in the amount
paid out with resoect to oersonal injuries from
$2,003,732 in 1953 to
$1,645,653 in
1954, a reduction of $358,079.
a

a

approximately

annum.

$3,128,000

^

.

per

mid-1954, the Trainmen and Firemen
served notices
which
contemplate pay for holidays
though not worked,
penalty pay if worked,
penalty pay if worked during
vacation
perjod, 28-cents per hour increase in

five-day work

cents per hour
for Road

in addition

week

increase,

Firemen, and

the number of cars in

a

a

a

pay under

to

guarantee

the
of

present four-

$18.00

per

graduated rate scale based

train.




$1,161,963

temporary

to

Company) had

rails,

ties,

other

151,500

$12,131,254

$31,283,437

$395,824

70,375,435

1,484,344

20,574,250

2,357,472

and

for

order

11,288,211

16,523,570

5,235,359

Deferred

assets
and
unadjusted
debits, including items owed to
not

available

yet

The

5,113,525

920,373

$821,110,024 $815,611,806

$5,498,218

Company owed for materials,
companies, and
dividends
and
rents

interest,

but not yet due

accrued

Operating

of

leased

items

yet

and

from

other

to

of

and

8,678,117

3,885,082

39,024

4,642,825

4,288,733

354,092

10,036,221

2,328,492

but

these

not

was

$85,896,735

$97,435,094

$11,538,359

assets there remained,

for

capitalization

the

of

The

capitalization
consisted

pany

day
on

$735,213,289 $718,176,712

the

of

Preferred

Common

tion

of

Manufacturers for the purpose of
helping indi¬

Americans decide

the

$17,036,577

including bonds,
$277,048,270 $274,329,130

Stock

60,000,000

a total capitalization

of

to keep pace with our fast
jobs and goods and services.

tion

deducting
from

mained

net

this
assets

129,820,000

$2,719,140

t

$466,868,270 $464,149,130

$2,719,140

more

purchasing power,
This would

requirements

for

,

if

even

be

it is artificial

pur¬

done

through inflation¬
ary government spending,-wage rises without
prod ac¬
tivity increases, or tax cuts that would aggravate exist¬
ing discrimination."
"tsir-J'
requirements

for

.an

expanding,

prosperous

(1) A steady flow of investment capital—private
capi¬
provided out of the savings of individuals. With an
investment of more than $12,000 needed for

tal

job,

every

and

with about
must

one

million

"prevent and

new

jobs needed each

eliminate

interference

year,

with

the

basic processes of
capital formation."

Incentive

to

(3)

Freedom

invest

capital.

The obstacle

of

dis¬

must be removed.

from

undue

Economic decisions

government
must

be

control

and

made

by people
who have a personal stake in the outcome
instead of by
bureaucrats who have
nothing to lose personally.
(4) An end of government competition with business.
venture, which must pay out of pocket for it
mistakes, cannot compete with government, which passes
errors

and

inefficiencies

on

to the tax¬

An atmosphere which encourages fa:th and

fidence in the future, based
circumstances.

(6)

on

con¬

favorable conditions and

Greater understanding of how
This includes recognition

higher

real

largely the
conjured

(7)

a

$268,345 019 $254,027,582

$14,317,437

There

our

free

economy

of the fact that
greater benefits and more security
result of growth in productivity and

wages,

up

re¬

surplus, largely in¬
vested in the property, of——-

growing

power.

cannot be

capitaliza¬
there

that

"On the other hand,
purchasing power theorists ap¬
parently believe that the only important thing is to ap¬
ply an immediate economic stimulus through creation

are

After

action

60,000,000

129,820,000

Stock

of

courses

payer.

fol¬

etc

the

on

bring continuing growth and prosperity.
"The program emphasizes the fact that
without rapid
growth
and
expansion
of
our
productive
facilities,
through capital investment, the nation will not be able

operates.
Making

Economic Advisers under Presi¬

will

(5)

Debt,

of

Com¬

lowing:
Funded

Council

the burden of its
of

,

Private

the

Company, net assets of

the

direction.

deducting these items from

the total

nation's productive
employment and a

economic

new

criminatory taxes

liabilities,

reserves

of

(2)

including

others,

the

high

analysis completely refutes
purchasing power theories currently sponsored by
Reuther, of the CIO, and Leon Keyserling, Chair¬

man

we

7,707,729

liabilities,

total

48,770,683

Com¬

adjusted

The

$846,818

equip¬
::

due

"

$30,454,375

3,846,058

road

panies
Deferred,

.

$29,607,557
40,092,566

—

due

not

reserves

Depreciation
ment

but

national

economy defined in the NAM study include:

railroad

accrued
Taxes

as

rising living standard.

Major

supplies, wages and balances to
other

for

new

encourage growth of
the pathway to

or

chasing

4,193,152

The Assets of the
Company totaled

prescription

by

inade¬

study, "So People May
Prosper," NAM presented to the public a program for
prosperity based on full production and in¬
creased productivity.
The study advocates measures to

of

the

to

its

an

national

vidual

keeping road and equipment in
good

of

as

Truman," said Kenneth R. Miller, senior Vice-Pres¬
ident of the NAM, in
releasing the study. He continued,
"This study has been issued
by the National Associa¬

71,859,779

material

release

booklet

a

dent

in

necessary

supplies

5,035,500

hand fuel,

on

bridge

,

;

Walter

and

Company

dangerous,

even

the

"NAM's

18,216,778

companies

others owed the

With

the

$31,679,261

investments

railroad

16,004,791

spe¬

S. Government Securities

The

82,159,492

$683,872,843 $671,741,589

and

deposits amounting

Other

quate, and
growth.

permit

151,500

—

certain economists—was described in
National Association of Manufacturers

facilities

of

—

equipment obligations,

!|

In

a

5,700,655

acceptance

Investments

cial

After

were effected
national basis by the
Railroads, involv¬
ing increases in
wage rates and other
benefits, including
for the first time
hospital, medical and surgical insur¬
ance, which had the effect
as
to the
Company of in¬
creasing labor costs by

on

116,877,359

$585,557,060 $584,395,097

Relations

Settlements with the labor
organizations

during 1954

$6,862,618

disbursed

redemption

years.

Needling our economy by hypodermics of "purchas¬
ing power"—as proposed by prominent union leaders
the

5,035,500

for

iund

credits

Labor

Decrease

Sale

Company

companies,

payments to
caused

of

be

and

Company had cash

but

Personal Injury Litigation

insurance

4

contracted

bonds

U.

The action under the Federal
anti-truct law* hvnugM
in 1951
by Seatrain Lines, Inc., against a

to

principles, the

confidently approaches the future

'

or

and

equipment

Sinking

And

railroads, incluaing

Increase

carried

Conditional

delivery

upon

Reparations
the

31, 1953

98,164,283

Agreement

Since

31,1954

122,578,014

investments

the

Exploding Purchasing Power Theories

On

December

vestments in stocks, bonds and
notes
of
affiliated
companies

credits

of

owners

-

"New Deal" economists, and others.

On

ac¬

addition the Company had in¬

In

the

to

Booklet, entitled "So People May Prosper," issued to
refute purchasing power theories
sponsored by CIO,

amortization,

grants,

return

With steadfast faith, and with these

$33,190,325

$708,135,074 $701,272,456

quisition adjustment

fair

a

13,516,057

terminal

property of_

pay

-v..'.

13,726,947

the

>.&

/

•

refund

women

$46,706,382

.

December

Company makes additional

payments of taxes for some
of the years, and receives refund
credits for taxes paid
for other
years, subject to review
by the Joint Commit¬

and

4,720,164

$26,262,681

1

To

*

Southern

facilities,
shops,
locomotives,
freight and passenger cars and

the

Revenue

men

keeps the railroad going;

3,873,985

trust

totaled

Company had investments in

land,

and Excess Profits Taxes for the
years 1941 through 1946
been agreed upon between the
Company and the

adequate

railroads

income of—

/

has

Internal

for

*-..

Federal Tax Liability 1941-1946

controversy referred to in prior
Company's liability for Federal Income

and

territory where

South";

fairly and kindly the

property.

4,483,614

Financial Position at the End of the Year

March

settlement of

economical

,

<

$39,989,628

debt and

rents

miscellaneous

by

15, 1954, in Docket 9200, effective from October
1, 1953.
v ...
;
, V

treat

42,952,412

application

pensation for

A

To

items

income of

funded

on

'

of

last

safe,

$45,860,203

5,432,574

transportation.
amended

furnigh

the "Southern Serves the

in

was

modes

fo6ter faith in

tp

railroad transportation in the

$88,812,615

$39,040,668

of—.

income from railway operations of

an

income

jstocks

.

been

had

To
•

186,399,731

$72,978,555

j

regain

They

>■

South, its people and its opportunities;

whose work
balance

are—

In 1953

$249,079,701 $275,212,346

maintaining the property and of

Company paid to other companies for
hire of equipment and use of
joint facilities
in excess of the amount
received by it from
those sources

this

During the year, the Company found it necessary to
reduce the freight rates on a number of
important com¬
modities,, either to hold the traffic or in an effort to

been, and

Raihvay

years.

rev¬

balance from railroad operations of

a

Southern

develop the territory and

the

In 1954

the

The

freight rates, on an annual basis, will
Company's freight revenues by an esti¬

amount,

total

a

_

a

Leaving

These intrastate

the

operations

—

of

Federal, state and local

mission's order.

$900,000

of

'

Eastern

annul

February 11, 1955, the District Court upheld the Com¬

improve

miscellaneous

cost

operating the railroad

Upon dissolution of a tem¬
porary restraining order the increased rates
became
effective on December 18, 1954.' In a decision dated

mated

Company received from freight, passenger

enue

to

Carolina, and others, instituted

States District Court for the

North

the

the

of

The state of North

suit in

Financial Results for the Year

that state,
an
order

charges

guide

varied through the

not

have

To
As to

that

System have

expenses, and certain
tremendous industrial

its

CREED

year

knowing that its strength

growth and progress.

North Carolina.

entered

Thursday, May 26, 1955

;..

must

be

by arbitrary
industrial

means

and methods.

based

upon the
practice of sound human relations between employer and
employee.
peace

Number 5432

181

Volume

...

The Commercial and Financial

((243SJ

Kenneth C. Ebbitt, Shelby

Cullom
Hall, R. L.
Day & Co.; George W. Hall, Wm.
E. Pollock & Co.; William T. Hall,
Jr.,
Blue
List
Publishing Co.;
Frank L. Lucke, Laidlaw & Co.;
Albert
J.
Milloy, First Boston

Rheem Manufacturing

Davis & Co.; Denton D.

Common Stock Offered
A secondary offering of 400,000
shares of Rheem Manufacturing
Co. common stock, formerly own¬

by Bethlehem Steel Corp. was
made publicly on May 24 at a
price of $37.12V2 a share by a
nationwide
investment banking

ed

Co., Inc.; Kuhn, Loeb & Co.;
Smith, Barney & Co.
Rheem
Manufacturing

Co.
makes containers, tanks of vari¬
ous
types, water heaters, hot air
furnaces, evaporative coolers, air
conditioners, water softeners, gas
ranges, clothes dryers, and auto¬
motive parts,
y. ' *
;
.

of the com¬

Sales and earnings

Co.; J^mes F. Reilly, Lehman
Brothers; William J. Riley, Drexel
&

Co.; Alex Seidler, Jr., National
State Bank of Newark; Joseph B.

crued
issue

First

Boston

Corp.

the

by

won

on

the
at

group

May 24

on a

bid of 99.39%.
Net

■

Minneapolis Assoc.

(Special to The Financial Chronicle)

MINNEAPOLIS, Minn.—James
E. Paulsen, Jr., has become affil¬
iated with Minneapolis Associates,

the
to

the sale of

proceeds from

new

will

bonds

be

added

to

general funds of the company
be

used

for

purposes,

payment

of

construction

and

including the

re¬

$14,-

approximately

for

~

-

TllS .Detroit Edison Co. is en¬
gaged in the generafioriy trans¬

con¬

*•-

1955, it is estimated,

of mission, distribution and sale of
electric energy in a service area

approximate '$85,000,000,

$19,500,000 has been ex¬
pended to April 1, 1955. The esti¬
mate for
1955 contemplates the

comprising 7,587

steam

plant

now

at

the

well

dustrial
outside

business

section

to

be

option

of

the

the highly

of

of

The company

the

heating

steam

a

business

central

Detroit

and

furnishes

Vassar, Mich.

For the year 1954, the company-

at any time as a whole

had

in part, at redemption prices
ranging from 103% to par, plus

gross

utility

revenues

accrued

$195,883,768

and

net

income

$22,137,173.

interest.

$1,562,906, respectively, equal
cents per share on the out¬

to 95

Sales for

standing common stock.

1954 were $163,623,-

the full year

$6,026,952,

and earnings were

302

equal after preferred dividends to
$3.67 per common share. The com¬
mon
stock is on a $2.40 annual
dividend basis.

N. Y.

Municipal Bold
Onling June 101k

Club

day on Friday, June
Westchester Country

field

10th

the

at

Club and Beach Club at
s

of

its 22nd an-

York will hold

nual

Club

Bond

Municipal

The
New

Rye, N. Y.

and instal¬
lation of officers will take place
The annual meeting

at the Main Club at 1 p.m.

Luncheon

will be served either

Beach Club
p.m.
The
Board of Governors will tender a
11:30

from

or

3

to

a.m.

party at the Beach Club
pool from 5:30 to 7

cocktail

the

around

dinner will follow im¬

and

p.m.

Club

Main

the

at

mediately after.

scheduled for the day
tennis, horeshoes, softball, bridge and swimming. One
copy of the "Bond Crier" will be
distributed to each member and
Sports

golf,

are

of this

guest. Additional copies
amusing publication may

be or¬

George Hall, Wm. E.

from

dered

Pollock & Co., Inc., at

$1

per copy.

should

Reservations

made

be

June
1st with William H.
Mears, Chemical Corn Exchange

by

Bank.
Members of the Field Day

Com¬

mittee are:

General Chairman's Committee:

H.

A LOOK INTO THE FUTURE-The

Wells, Jr., Andrews &

Grady

it looks here. (Actually, only two inches in diameter.)

day it may be no thicker than a fountain pen.

Co.;

Publishing

List

Some

engineer, is an experimental v

McKay, Blue
Myles G.

P.

William

Bank;

hollow tube, held by a Bell Telephone Laboratories

Waveguide for telephone service and television. It's not as large as

Wells, General Chairman; Robert
M. Goodwin, First National City

Walsh, Blyth & Co., Inc.
William

Finance:

Corn

Chemical

First

National

Bank,
Durkin,

of

Chicago;

Bank

William D. Muller,
&

Mears,

M.

William

Chairman;

H.

Exchange

The

NEW LOOK in Telephone and Television Transmission

Halsey, Stuart

Co.

Arrangements: Gilbert White,
R. D. White & Company, Chair¬

There's many a new

P.
C.
S.

Hurley Bogardus, J.
Morgan & Co., Inc.; Edmund
Byrne
&
Phelps;
William
Shanks, Bond Buyer.
P.

man;

interesting developments

Richard N.

Co.,

Chairman;

Rand

Rand,

P.

John

&

Northern

Byram,

William

Company;

A.

One

Trust

new

Devlin,

Sports:

Robert I. Doty,

W.

Wolf,

Recent

Ranson,

Bond

Harris

Crier:
Trust

&

Inc.;
Van

J.

Burke,

Blyth

Stuart




&

long dis¬

long distance

pipe

may

continue to be used in

straight sections, this completely new

day

carry tens

of thou¬

telephone

con¬

able

to carry

signals around curves.

It is another

ahead in the

example of looking

telephone business and

never-ending progress in provid¬

the

ing better service for more

Co.,

Walter Dempsey, B. J.
Ingen & Co., Inc.; William
Halsey,

extraordinarily

time—and thus sup¬
plement coaxial cable and radio relay.

L.

Dore,

operate at

versations and hundreds of television

Savings

&

can

&

Bank, Chairman; Douglas D. BalJin,
Hannahs, Ballin &
Lee;
Jerome

It

M.

Trust

James

important is that

Waveguide, being flexible, will be

sands of cross-country

Savings Bank.
Daily

over

experiments indicate that

it may some

Co.;
Brothers;

Harris

so

reception. And though solid metal

programs

Waveguide.

&

Davis Kales, Wood, Gundy &
Paul

a

announced recently by Bell

Laboratories. It's the

Son;
Andrews & Wells;

Karl J. Panke, Lehman

Waveguide

practical for long distances.

high frequencies with small loss in

tances,

William H. Urell, F. S.

Coleman, Gregory

but for short distances

television

Smithers & Co., Chairman; Fran¬
X.

developments is

it is

and different medium for trans¬

time

only. What makes the Bell System's

mitting telephone conversations and

Reynolds & Co.; John C. Fitterer,
Jr., Kuhn, Loeb & Co.; August F.
Pardey, Chase Manhattan Bank;
James J. Ryan, Park, Ryan, Inc.

cis

of these

Waveguides have been used for
some

new

coming along.

Prizes and "Mutts":

F.

thing in the

telephone business these days and
many more

Co.;

THE NEW WAVEGUIDE is constructed
'

of thin cop¬

per ivire, tightly coiled. It is flexible, can operate
at

programs at one

more

people.

high frequencies, and channel radio waves

any way

that it is bent.

o£

or

March
and

in¬
and

extensive in¬

as

of Detroit.

in

Detroit

agricultural sections

water service in

re¬

are

as

and

conducts

also

property and equipment.

deemable,

City

environs,

$11,800,000 for new business ex¬
tensions, and $8,400,000 for other
bonds

includes

area

dustrialized

substations; $17,000,000 for trans¬
mission
and
distribution
lines;

new

Michigan, with anpopulation of 3,828,500.

This

electric generating
under ■ construction;

$11,000,000 for the construction of
new,
and enlargement of other

The

miles in

estimated

in connection with the new River

Rouge

square

soutneastern

about $36,800,000

of

expenditure

company,

other

500,000 of short-term bank loans.

Inc., Rand Tower.

expenditures

which

and

of

Award

interest.
was

competitive sales

the

for the three months ended
31, 1955 were $39,433,541

pany

The

3%% Bonds

Wise. Dean Witter & Co.

With

Gross

struction in
will

Edison

Halsey, Stuart & Co. Inc. and as¬
sociates yesterday (May 25) of¬
Corporation; Henry Milner, R. S. fered
$60,000,000 of Detroit Edison
Dickson & Co., Inc.; William S.
Co. 3%% general and refunding
Morris, Talmage & Co.; Edmund
mortgage bonds, series O, due
G.
O'Leary, Eastman, Dillon &
May 15, 1980, at 100% and ac¬

Blyth &
and

jointly headed by

group

Bankers Offer Detroit

»

BELL TELEPHONE

SYSTEM

and

of

SB

The Commercial-and Financial Chronicle

"3

(2434)

the net heat rate 10,700
the cost per

Industrial Development
Of Atomic Energy

At

present stage of devel¬
of tne unknown quan¬
tities is the ultimate overall cost

Vice-President, Consolidated Edison Co. of New

kilowatthour of producing en¬
ergy in the atomic power plant
which we propose to 'built. Def¬

York, Inc.

inite

such a plant is
operated. We es¬
timate that during the initial op¬
erating period, overall costs, in¬
cluding taxes, depreciation, inter¬
est, fuel, fuel processing, labor,
and maintenance, will
be about
nine mills per kilowatthour.
As
fuel fabrication and reprocessing
techniques are developed and ad¬
vanced it is anticipated that this

is simply another fuel for electric

energy

but also construction of new plants will be essential, Mr. Fairsays immediate problem is to develop the new fuel eco¬
nomically, either as a replacement or supplement to conventional fuels. Reveals the philosophy which has prompted the
Consolidated Edison Company of New York to take steps

j

man

,

looking toward construction of

only

fuel for the production of
not

means

research

electric
develop¬

industrial

and

energy,

only study and

but

construction*
of

plant

of

make
the

fuel.

new

of its serv¬

and lowering the cost

Any electric
utility is in

■jrjay

ice).

the business of
c o nve r

form

one

of

Role

The

ting

another

of atomic energy can
the electric util¬

velopment

be accelerated by

w^m

to the customer

ity industry

in

for

form

which

mm

be

can

conveniently
and

James

F.

by

buying

energy

material

either

coal, oil,

or

sell

it

as

the

little

a

as

in

customer

to

for

By

in

means

expenses

little left

the

use

this

business, and the fuel
about

costs.

sticks
and

20%

These

new

measured

in

the

New

atomic

an

its

the

of

1954

Atomic

the

opened

to

the.

manufacturers

propositions

on

they

were

now.

Rather

staff

City

of

Vitro

to

make

us

types of reactors

ready

than

experts

build

retained

we

Corporation

to

assemble

a

the

consultants.

as

We notified the A. E. C. of our in¬

The

Immediate

terest

Problem

and

In

simplest

terms,
our
im¬
problem
is
how
eco¬
nomically to use atomic energy as
a
replacement of or supplement

not

only study* and ex¬
perimentation but the assumption

quite

few

a

of these

sur¬

of

of

and

have

proposal

authorized

the

plant, subject
obtaining the neces¬

A. E. C. approvals for which
have applied.

furnish and erect is

a

& W

will

pressurized

water uranium thorium converter.
It
will
utilize

uranium

and

highly enriched
be
equipped with

thorium elements for partial con¬
version of thorium to U-233.
Al¬

need on the part
The electric util¬
furnishes a market
a

though
much

it

does not produce as
fissionable material as it

consumes,

pro¬

vides the incentive for him to do

charge

the

the

effective

life

of

research

and

de¬

sign.
The manufacturers have
already
done considerable work on reactor

these

can

reactors

be built

will

not

now

be

work

until

we

actually

is

lengthened

consider¬

operate

product

us

development means
development on an economic

basis.

but

them.
There

to

We

built

unless there are buyers and we
shall not know how well
they will

as

do
4

to

We

always bugs in

and

^Statement

by

a

field
Mr.

test

Fairrran

Evening Forum of the American
Conference, Chicago, 111.




are

not

atomic

purists.

willing to mix our fuels
we have
long since learned to
to advantage. So we are
going

use

oil fired Superheater to
temperature of the steam

an

raise the

from

the

reactor,

a

new

the

thereby increase the overall plant
capacity as well as improve the

the

heat rate and reduce the cost
per
kw.
The overall

Power

Coast

Edison

second

electric

electricity to

estimated
82

the

largest

utility.

It

population
3,623,000, including

at

a

cities and, oyer 150 small com¬

munities' apd

rural

,

it does riot

ever,

How¬

areas.

the City of

serve

Los

Angeles, which has a muni¬
cipal system. The company sells
electricity Jat wholesale to four
cities

from

and

time

time

to

to

The

territory

includes

and

subscribe

for

Debenture

314s of 1970 at par, the

large

plant

will

be

capacity of the
235,000 kw,

about

common

Convertible

new

rights expiring June 14. The rights
entitle
to

the

holder

of

each

snare

$5 principal amount of deben¬
The

tures.

of

third

issue

new

the

amount

will

debentures

will

million.

$37-41

proximate

of

ap¬

One-

the

new

convertible

be

into stock at $42.85 beginning Jan.

1957, an additional one-third
later, and the remainder
following year. The conver¬

15,
a

privately owned utilities.

stocks to

preferred

year

the

do

we

other

our

devoted, to agriculture, much
pf which isynade possibly by ir¬
areas

sion

„

.

„

rate levels effective Sept. 13.
rates were designed to pro¬

new

Bankers Offer Slock
Of Cuban
mining

The
vide

firm

return

a

preciated

Mining Firm

Inter American
a

Industries, Inc.,
drilling for

of

5.9%

book-cost

on

de¬

a

rate

base,

while the company had asked for
a return of 61//4%.
The increase in

kwh.).

On

of

its

Long Beach steam station,

the
Wilmington Oil Field
(see pages 12-13 of prospectus).

about

under

dividend

proper¬

The

negotiations

$2.56

properties—a

the

claims—had

of

been

38

mining

mined

inter¬

mittently by Cuban interests be¬
being leased by Inter Ameri¬

fore
can.

drilling

the property.

—

ore

bodies

on

If the 150,000 shares

the

sold

$652,000

a

program to determine the

nature and extent of

firm

will

realize

$270,000 of which will

be used to

begin mining and mill¬
ing operations in certain sections
of the Cambute

area, which com¬
prises 16 of the claims leased by

Inter American.

claims, 17

Of the remaining
in the Los Negros

and

are

five

are

in

the

El

Iris

and Don Palmas sections.

they

the

calendar

mated

at

March

$3.05,
1955

year

around

For

year.

ended

to

year

with

compared

previous

months

increased

allowance

the stock yields
5%, which is above the gen¬
average for
stocks of this

caliber.
next

Should
to

year

or

an

$2.60
so

increase in the
occur

(as

over

seems

a

the
rea¬

It

31

for

and
are

$3.40.

possibility), a 5% yield
would mean a price of 52 and a
corresponding debenture price of
nearly 121.

esti¬

is

un¬

M.

Prescott

Grant

is

&

Co.,

Bank Building.

now

with

E.

J.

Northwestern

and

con¬

4.56%

conditions.

In

1954

only

of total pqwer output was
produced by hydro stations com¬
pared with over 50%
in
1952.

Moreover, only about one-third as
much power as In 1952 was ob¬
tained from Hoover
amount

Dam, the 1954
being about 6% of total
Water

are

in

the

that

levels

at

Hoover

reported to be abojt the

on

conditions

(Special to The Financial Chronicle)

further

4.48%

28%

lowest

MINNEAPOLIS, Minn. —Rich¬

some

the

The
company/ has also been
handicapped recently by bad
water

output.

E. J. Prescott Adds

for

versions of

convertible preference stocks.

Dam

ard

in
12

the

$2.95

were

eral

the recently increased

on

dividend

sonable

Earnings for the calendar
1954

Based

derstood that this estimate makes

Inter American has instituted

area

agreement, so that
required to put

were

these rates into effect.

firm, incorporated in Dela¬
ware, has acquired a 24-year lease
on
7,335 acres
of
property in
Oriente
Province, Cuba. The
total

lease

a

re¬

over

However,, it included $1,915,000 pertaining to customers in
the City of Vernon who are served

Cuban

the

some

which occupies an area of 43 acres

$2.40

its

on

is offering 150,000 shares of
par value common stock
through Baruch Brothers & Co.,
Inc., and Milton Blauner & Co.,
Inc., both of New York, N. Y.
The offering price is $5 per share.

hand

other

still have

curring trouble with "sues'.danee"

stock.

now

the

company may

revenues, based on the 1954 level
of sales, was equivalent to about
50 cents a share on the common

and

is
a*

for

that

same manner

are

obtained
are

is

privilege will remain the
same through Jan.
15, 1962, with
types of fuel.
Wer
the price rising to $44 after that
rigation.
Industrial
activity
is
do not want a subsidy in any form.
well 'diversified.
date, and to $45 after Jan. 15,
Although many
We are not interested in produc¬
1964 and prior to July 17, 1967.
of the
company's industrial cus¬
ing
weapons
grade
plutonium, tomers
are/major users of elec¬ Conversion prices are subject to
radioactive tracers, or changing
under
certain
con¬
tricity, revenues, for the calendar adjustment
lead into gold.
We want to use
tingencies. In conversion, no ad¬
year 1954 derived from the largest
atomic energy to make electricity
industrial customer accounted for justment will be made for interest
and we want to keep the price of
only about. 1%, of electric rev¬ or dividends; scrip or cash may be
electricity as low as possible. If
issued for fractional shares..
the fissionable fragments in the enues, and the 10 largest custom¬
At the initial convers.on pricfe
ers
together .accounted for less
fuel elements develop a value like
than 6%
of revenues.
In
1954 of $42.85 the holder of a $100
the once despised lly ash from
could
convert into 2.3337
electric revenues were obtained bond
pulverized coal,
which is now
as
follows: residential and rural shares of common stock. Based on
used as a pozzolanic aggregate for
the recent price (May 17) of 4814
44%, commercial 21%, industrial
concrete, we shall hope for a
25 %-•. and; wholesale and miscel¬ 'for the stock, the conversion price
credit but we do not propose to
would be $112.60. This compares
laneous 10%.
go into the by-product business if
with the market price for deben¬
The company has shared in the
we can avoid it.
We believe that
rapid "growtri of tne area, 1954 tures (when issued) of 113, which
the fabrication of fuel elements
indicates
the
popularity of the
revenues of $154 million
compar¬
and their reprocessing offers an¬
new
issue.
Since the debentures
ing with $68 million in 1945, an
other attractive field for private
have
an
estimated
bond
value
increase of T27%".: Share earnings
industrial development which will
have also shown substantial im¬ around 102 and are not converti¬
corne about if the utilities furnish
ble for one year and eight months,
the market.
We hope ultimately provement, about doubling during
the decade.
Dividends have in- they would normally sell at a
to pay for atomic fuel on a net
Thus the Detroit Edi¬
creasedr from* $1.50 to $2.40 (the discount.
BTU basis and to obtain it from a
rate was recently raised from $2). son Convertible 314 s of 1989 sell
non-governmental source.
at only about 136, although con¬
The company has been handi¬
Since we firmly believe that
vertible next February into four
capped by special charges: during
only by actual construction and
share of common stock per $100
1945 to 1948
inclusive, the cost of
operation of atomic power proj¬
bond. Detroit Edison is currently
change frequency totalled about
ects can atomic power be shown
around
.35 V2
which
is
$40 million,t'aiidk .in 1950-51 sub- selling
to
be
commercially practicable,
sidance
costs
amounted
to
$3.6 equivalent to 142, so that there is
our immediate objective is to get
a discount of 6 points.
million
(one of the generating
on
with that job, as I have in¬
It is possible that buyers of the
plants sank because it was located
dicated.
However, we have not
Southern California Edison bonds
over an
oil-field, and the founda¬
lost sight of the long range ob¬
tions had to be;rebuilt).
These anticipate higher earnings over
jective of more economical atomic
charges were a drain on net earn¬ the next year or so. This should
power and are continuing our par¬
be possible if good water condi¬
ings during these years.
ticipation in and support of one
tions should be restored.
Impor¬
The
company
has
also
been
of the study groups represented
tant new steam generating units
handicapped by a sub-normal rate
here tonight by Mir. Cisler. As we
are being added,
of return on the rate base.
16/000 kwh. in
The
see
it, both short range and long
July this year, 320,000 in 1956, and
company applied to the California
range programs are necessary and
160,000
in
1957.
These
units
Public Utilities. Commission for a
should
be
complementary, not rate
should make the system less de¬
increase in December, 1952
competitive, in the development
pendent on hydro (total capacity
and the Commission issued its de¬
of this new industry.
at the end of 1954 was 2,245,0j0
cision in August 1954, with the
much the

are

Industrial

types which

and to pay

Pacific
serves

three

ultimately to obtain
for our atomic fuel in

a

ably.

necessary

hope

reduced.

Southern ^California

Company

10-cent

of

Wilcox Com¬

The reactor which B

mally done by the manufacturer

which

to

course

we

manufacturer

Plant

sary

manufacturer as partners. Devel¬
opment and research work is nor¬

industry

we

construction

ing usually involves both the op¬
erating utility and the equipment

the

and

pany,

have progressed.

ity

We

manganese

New

We have accepted the

This process of educated
guess¬

for

Proposed

of the Babcock

prise packages and has succeeded
in sorting out the
pieces and fit¬
ting them together. That is how

in response to
of the utility.

substantial contribu¬

direction.

Consolidated Edison Co.

industry has

our

a

in that

The

wrapped up with an assortment of
problems in the same package.
years,

In

went about

we

be

can

By OWEN ELY

ties,

tion

prise industrial development.
Every
innovation
comes

opened

possible

as

have made

of the risks of actual construction
and operation, all of which com¬

the

information

in the same way in which we
normally proceed to make plant
additions.
We
hope thereby to
industrial development
promote
by the manufacturers as well as
by other utilities. We believe we

The solving of this problem in¬

Over

obtained

it

conventional fuels.

cludes

and

guidance from their staff.

far

so

mediate

we

of

which

area.

to

Act

be

York

of

plant in

fuel

new

must

enter¬
diet of

private industry. We in
Con Edison walked in by asking

those

a

power

enactment

door

yard¬

process

construction

The

alone

of
the

are

against which
a

the

Energy

the total annual costs involved in

total

a

take similar ventures.

owning
arid
maintaining
the
equipment necessary to accom¬
plish it, represents about 30% of
our

free

on

terri¬
tory and which, it is hoped, will
encourage other utilities to under¬

conven¬

processing,; including the cost of

represents

of

It

the

energy

over

today,

re¬

the

that

philosophy
which
Consolidated Edison to
take the necessary steps looking

efforts

our

our

a

mar¬

and

obvious

system

a

elements.

fuel

be

dif¬

of

as

prompted
to

have

trouble.

izes

de¬

on

well

as

This in general terms summar¬

in

paid and to have
tional

we

market

a

reactors

prise thrives best
private dollars.

of

we

the

of

also

American

raw

electricity. Indeed,

mand and in return for

our

a

shape

product

deliver it to

expect

have

processing

finished

a

the form of

we

We

should

natural gas and after

than

more

him.

of

fabrication

the

for

ket

Fairman

processing

utilized

been

providing

number

a

ferent varieties

economi¬

cally

Utility

It is obvious that industrial de¬

to

and

distributing it
a

Electric

the

Companies

from

energy

cost

way

development cost) and partly on
the utility company (which is in¬
terested in bettering the quality

to

use

a

plant.

energy

to chase them into the
open. In the electric industry, re¬
sponsibility for the field test falls
partly on the manufacturer (who
wants to sell some more of the
same items in order to recover his

Atomic energy is simply another

ment

atomic

an

until

constructed and

production and therefore, not only study and research,

energy

Utility Securities

Southern California Edison Company

obviously cannot be

answers

determined

Asserting atomic

Public

one

per

By JAMES F. FAIRMAN*

{▼;

BTU and

kw around $230.

the

opment

Thursday, May 26, 1955

...

record.
of

share

The good water

1952

were

reflected

AREA

RESOURCES

explains why
tremendous

area

we

BOOK
serve

offers

opportunity to industry.

Write for free copy

P. 0. Box 899, Deot. M, Salt Lake

City 10, Utah

earnings of $3.27 in

year.

The company on

May 17 issued
rights to holders of the original

UTAH POWER
ft LIGHT CO.

Volume 181

Number 5432

Continued

from

.

.

.

The Commercial and Financial Chronicle

5

\

(2435)

yls and the European industry is

27

short of vinyls?

page

?

World Political Situation and

-

The Outlook (or Plastics
fluctuations

tainly

defense

in

we

be

not

expendi-

expect will

may

constantly

as alternative representatives of the national interest. And

driving Aheir

the economic fever up and down,
Business may improve despite dedid

in

1954-1955.

spending
indexes

will

not

economies

thing that needs to be

spending to the national
quire

{both

our

quite

be

economy

regardless

needs

be

to

moments

spent

munist bloc

of

gram

to keep
I said a

that the

ago

is

attrition

of

Nothing

prestige.

Com-

in

engaged

a

would

than

gram

coliapse

domestic

a

pro-

American

better

the purposes of such

serve

re-

kept
how

of

armed forces strong.

our

few

a

economy

Our foreign relations

that

much

pro-

a

the

international

economic

In
international
international

economy.

other

words, our
prestige
and
our
political power certainly

do not
depend only on our military
strength.
They are directly re-

our

of

world

our

political

parties

committed Yo

sence

allies,
in es-

are

extension

an

of the foreign-trade policies of the
postwar years.

This

does

not

that

mean

government will do

—directly subsidize American

economy.

As I wrote in my

Depression

"The aim of

tariff

and

loan

policies must be designed to maintain the economic bonds, the continued exchange of goods between
America and the nations of the
some

rases

may

be

areas

or

rnnntrirc

non-Communist

that

■

■■

there

strength

In

book, No MaOur

Lifetime,

America is

is

of

armed

our

decisive

to

retain

conflict,

In

struggle

with

cannot

by

and West

active trading rela-

on

tions with the Western World. For
and Peiping recognize

Moscow
*bat

their

political conquests

in

our

again

of

the

the

'30s

either—economically. Now, in the
World

War

II

integrating

these

into

areas

era,

arrangements

a

between

also

we

have

a
great political stake in a
strong economy. And our govern-

"co-

and

extended in the last

even

eral

years.

Rubber is

a

crude

of

rubber

from

Let

and

stimulation

Obligations
vojigauons

that have

of
oi

neces-

regimented

a

greater.

eco-

policy of extending the

goods

the nation's

of

whole

fiscal structure by manipulation of

stock-market

credit. margins,

porate and individual income tax

They do involve support of
farmers

and agriculin order to avoid
the kind of extreme and prolonged
agricultural slump that character¬
economy

ized the period after World War I

eventually

national

affected

the

These

economy.

government techniques do involve
recognition of the real problems
Al_

„

states

,

,,

financing needed

in

urgently

.are

development

of

economy.

we

naint this General

mav

oTthe^inTernlt^afS

of

instalment credit, of cor-

nation's

Indonesia's
Thius

that'

the

situation
armed

the" Wars

during

The

neace-

of

United

the

Statps

Government will support and
both

courage

and

American

American

irhnorts

en-

exports

This

will

be done for the sake of maintain-

ing

the

the

American

for maintaining Ameri-

economy,
can

of

health

interests and prestige abroad,

and

for

economic
allies

strengthening American
ties not only-^Hvith our

but

tries that

als0

with

those

coun_

S0rneh0w suspended

are

construction of

highways and pubpolitically between the free world
lic builoings They do involve recand the Communist bloc.
ogniticn of the real problems of
. individualsi who,are old or sick or
Some Difficulties
income

and

sion

their families k Y
but
m

the entire nation.
and

themselves
the long

in

The exten-

liberalization

of

social

security and unemployment bene¬
fits constitute
vice

a

very

practical de¬

fqr

maintaining
the
functioning of the economy.

good

American
our

inter¬

national position is recognized not

only by
the

one

party—not

only by
by the Repubrecognized by both

Democrats

licans.

It

is

the

of

that

ties
both

be

and

future

holds

no

ForrYhere

difficulties.
course,

international-trade

the

will,

of

continuous

dislocations

foreign

sources

of

regards

supplies

foreign markets.

Will

the

or




Will

the

increase?

Malayan

supply

of

supply of naphthalene

j.

Will
Europe continue to sell
vinyl to the United States while
our
our

mentioned

tj„

a

production icapacity exceeds
consumption of domestic vin-

one

have to face in the

you

try to tell you
foreign trade

Every industry

need

I again stress the
industry's part to recog¬

on

nize

the

international

importance

of

political
foreign, trade

our

the

depression of
point¬

few minutes ago,
was
a

bad enough to

depression

thought that,

question,

tnis

on

Barring

such

conflict,

a

f

th

policy,

and

for

great

tolerance

*

occur

tynftPri

ct„tps

such

UIlueu ouues.,

as

the

health

economy

of

do¬

our

has international

political importance,

£

that

a

conceal

trade

From

of

raw

(1)

phase M
dustrial

basic

almost

in

used

on

Let

me say

unequivocally that the

THE

I

one.

tried to

not

have

the fact that I

believe

about its future.

f

th

oossibilitv

OF THE UNITED STATES

and

-

of

unless

volved.

have

In

to

defense

serious

create

lems

the

such

supply

cases,

prob-

is

in-

Notice is hereby given

Insurance Law of the State

like

of The

a

repetition of the conditions during
"police action "

the Korean

another

*d'

as

tb

"ion

as

temnorarilv

exceeds

induslyto
,

.

Directors of said

JAMES B. BLACK, San Francisco, Cal.
President, Pacific Gas & Electric Co.

the

meet it

CHARLES W. DOW, New

WILLIAM J.

500

Consultant.

Chancellor of New York

WILLIAM A. KELEHER,

million

NICHOLAS KELLEY, New

W. W. KLINGMAN, Dallas,

Life insurance and

refrigeration,

television cables, electrical insulation, etc.
Imports
Here

also

must

we

,

Tex.

banking,

i ELMER L. LINDSETH, Cleveland, Ohio.
President, The Cleveland Electric
Illuminating Company.
RUSSELL B.

as

packaging,

York, N. Y.

Counsellor-at-Law.

pounds,

well as the great
variety of end uses for polythy-

in

Albuquerque, N. M.

Counseilor-at-Law.

capacity
which is

This rapid growth merely emphasizes the high level of American living standards and produc-

lene

Y;

University.

a

again.st.a British capacity of about
million pounds,

tive ingenuity,

GRAHAM, New York, N. Y.

HENRY TOWNLEY HEALD, New York, N.

Polythylene serves as a good
example. Originally developed in

approaching

York, N. Y.
Society.

Senior Vice-President of the

.

EnSland, we now have
in the United States

Rochester, Minn.

Physician.

,

f demand'

Society:

ARLIE RAY BARNES,

type of supply shortdemand for new plastic

* y
"
" y.
0u*" countryhas the highest livln£ standards on earth. This not
on'Y creates a great volume of derJ!and'. but also creates a great

of New York the Board of Directors

Equitable Life Assurance Society of the United States has
nominated the following named persons as candidates for elec-

(2) From time t0 time there will
be

that in accordance with the provisions of the

would

you

something

expect

Notice of Nomination of Directors

budget

shooting

some

N. Y.

'

period^

j ao not believe that the

jn

393 Seventh Avenue; New York 1,

small

time to time

EQUITABLE

LIFE ASSURANCE SOCIETY

downs in the defense budget, and
,,

'

LOWE, Fitchburg, Mass.
Manufacturer.

[ RICHARD H. MANSFIELD, New York, N. Y;
Vice-President, Rockefeller Center, Inc.
1

ARTHUR B. VAN BUSKIRK, Pittsburgh, Pa.
Vice-President and Governor,

aistjnguish

T. Mellon and Sons.

between two situations.
(n

cases

U' C

in
in

wmcn
which

need

we

imports from abroad, but may not
be able to get them in sufficient

quantity.
Naphthalene provides
ple.

Europeans

mestically

has

an

1954

exam¬

used

do¬

a

ited.

in

larger part of their
supply, and our imports were lim¬
of

This

created

something

supply problem in

a

dustries.

(2)

A

problem

some

in-

second

type

occurs

when

of

because

above their

they

own

have

needs,

or

excesses

because

duly
of New York.

The annual election of Directors of The

Equitable Life Assurance
Society of the United States will be held at its Home Office,
393 Seventh Avenue, New York 1, N. Y., on December 7,1955,
from JO o'clock a.m. to 4 o'clock p.m., and at said election
twelve Directors, constituting one Class of the Board of Direc¬
tors, are to be elected for a term of three years from January 1,
1956. Policyholders whose policies or contracts are in force on
the date of the election and have been in force at least one year
are

entitled

to vote

in

person or

by

proxy or

by mail.

GORDON K. SMITH, Secretary.

import
foreign

countries ship to the United States,

not

A certificate of nomination of the said candidates has been

filed with the Insurance Department of the State

prior thereto

-

in¬

life,. The industry is truly

it

viewpoint, faces some serious problems.
I
the general level of exports is
hope it is plain, however, that I
bound to influence its attitude
toward a given volume of imports, find strong grounds for optimism

there

ups

every

and

consumer

our

the industry's

VJ

We must count

ma¬

and produces end products

are

try within the United States.

As

'wide variety

terials"?

so is our for¬
policy an instrument
of international diplomacy as well
as an object of concern to indus¬

eign

will still be material supply prob¬
lems from time to time, originat¬
A W \J

we

have great need for flexibility of

and

Just
mestic

uncertain¬
as

-

of

prosperity in terms of

view

picture

crude rubber hold up?

Importance

importance

not, please, infer from what

whole, I feel that the
question of foreign trade and for¬
eign trade policy is the most dif¬

if it does arise.

may seem to be a very optimistic

&nd

Foreign Trade Has Political

The

Do

plastics

the

understanding in the rela¬
time, simply jbecause of
between
its economic effects; but it would tions
government
and
be doubly bad to have a similar
industry.
depression now, because it would
This to me has been a very in¬
also have world-wide political ef¬
teresting subject, since the plas¬
fects, which would undermine the
nosTtion"'and"'nres- tics industry itself encompasses

ten years. In any case, there
is not much that the industry can
do about a situation of this sort

ability of the

for

our

On

next few years.

that

at

or

produced there and-pay for them
either in gold or dollars or in the

capital

what

have had such

above, however, I personally do not think in terms of a
major war within the next five

age

needed

system at all times—or at
time. They do involve flex-

not going to

ing out that it

stated

will

-

a

I

were

efforts.

wartime

increases

supports

am

the 30's

Supplies

from+ Thailand botfly were 100%

any

ible control

to

the

protection against exces¬ policy. On the other hand, those
imports, which undermine its who administer the policy must
price structure or depress its ac¬ recognize the international po¬
litical importance of a strong do¬
tivity.
Every
industry, on the
mestic economy, and analyze very
other hand, must also recognize carefully the effects that
foreign
the fact that this nations world trade
policy might have on this
trade has political as well as eco¬
strength.
I
leave
you
another
nomic importance.

out, quite obviously the
plastics industry would face very
serious supply shortages, as well
as
a
diversion of activity from
civilian

in

as

of its pre¬

more

wants

specific terms

fhootin^wars f?fm

the

nomic

run

sum up some

major world conflict

a

absorb the vasUajnoUntsmaterials
of rubber> tin. and other raw

Government
uovernmeni

techniques do not

require

the

to

now

years 1934-1938.
Shipments f ro m ;Mdoziesia and

in

+hfnJearnflfM pra^ticfd since ^st:West trade jies. For cannot
Comdays of the New Deal.
munist China and Russia

of

political

competitive,

sive

break

the

that

try

me

jn somewhat more

the

a commitment to keep it
Another case, in j-point is the
And this commitment will economy of Indonesia. Here, derequire the government to use all suite the growing Ctfmmunist inthe new techniques of economic fluence, the government
officially

entire

careful

significant

ness.

.AAA

ment has

and

planning,

of

these

realized

economic trends, and a good
deal of old fashioned adventurous-

-

iQ??SfhWer? 0VeJ^^
greater
1953 than averagqjmnual ship^nts

I

ing in two different and contrastca^e.in point. Ship- ing sources,
•>

•

ments

sev¬

strong.

tural

only be

and

East

Russianand West have been maintained

.—

depression

by

in-

Of ccurse, America could not af-

the

careful

to

prosperity economy." Prewar trad¬

debilitating and demoral¬
izing economic debacle that we
underwent during the early '30?."

consumer

while

today,

Raw Material

ing

Communist
afford

the

kind of

These

industry

any

there exist good and even exciting

If

will be

economy

importance

America

the

inessmen fear, there is still considerable uncertainty regarding
specific details, and in some cases
details that may affect whole industries.

more

importance

war

ficult
Trade Policy

exactly

i

exports

our

*

Germany regains

dollars,

Even though the picture of over¬ policy should be.

being clearly anti-Communist.

not

rates.

' *;'V

v

.

ex-

economy.

without

More Trade Between East

but

1954

chiefly special grades and
the imports came in the United
States at low prices chiefly because European countries needed

*

weighing

that

imports,

in

case

a

were

to

an(;wpr„

ply

means

ceeded

less

even

ff

can

their empire on the basis of

sarily

with

scene

can

we
th

ff

for the future,

the Far East capnot be sustained

control

.

possibilities

world leadership, if possible without armed
conflict.
Whether or

post

.

possibilities

still carry

i

the broad

qualifications,

ex-

Thus, some countries that have
ties to the Communist bloc will

ford

For, if we must temper

view of

ports by means of a foreign relief
and economic-aid program. Itsim-

lated to the strength of our inter-

of

markets.
our

the

it did then

as

rial

jar

true of
other questions in regard to
specific commodities and specific

the United States and ,non-Communist bloc—includingin of these
important considerations

in

collanse of Uniteri States strength

in

And this generalization is

if defense omy. For the sake 6f the internal a^ economic conditions is probslightly, the •> strength of the American economy ab*T n°t nearly so dim as some
necessarily sky-;as well as for the sake of the commentators and even some bus-

said about the relation of defense

strong

markets

And

j

The other

this:

Vinyl materials are
point.
Our exports in

increases

rocket.

is

obligation *to maintain

economic strength js carried into
the broad policies of international
trade as well as the,domestic econ-

in defense spending—as it

creases

These are specific questions that
require specific research and care-

many

parties,

cer-

opportunity for exports will prob¬
ably become smaller, and foreign

^fttl^nalysis of specific conditions,
>

tures that

need the supply, but because
they must have American dollars.

we

May 25, 1955.

^

23

The Commercial and Financial Chronicle

(2436)

Ten-Year
Book

Bank and Insurance Stocks

Statistical

Record

—

Per

Share*

Invested

Operating

Value

—Price Range—
Dividend

Assets

Earnings

This Week
THE

This

In 1905 the title

Co., chartered in 1890,

1889

smaller accounts.

with deposits

3.59

58.48

4.04

195342

Fcur well located branches are maintained in

Statement

assets—

or

of

31,

Government

obligations

Loans

discounts...-.-....

and

Customers'

liabilities

for

__,

Interest received and other assets-

;

:

Surplus

______

$77,006,000
1,259,000

_ _

_______

■ta¬

-

*■-,

$868,254,000

A Ui«ak-down of these assets into principal categories follows:

j-| Cash,;.l,-i.^-^,_-^_.__-_-._____-_-_-__:

____/ 30.3%

,

i United

States Government obligations....—23.4
Other securities
..I......
4.6

li

—

Loans and discounts.

39.7

______________________

Miscellaneous assets

The following is

'

_

2.0

9%c

1954.
a

eight

cities, with

Due

73
with«n

years,

six

years,

in

seven

<

on

Due

in

six

Bulletin

1.99

3.16

1.90

in

commercial

where

and

cent

is

totals

12th

•

,

counties
York

Maltz, Greenwald

will

City

impact

of

Thruway

reaching

in

trends

Spear, Leeds & Kellogg

BArclay 7-3500

Bell

Teletype—NY 1-1248-49
Gibbs, Manrg-?r Tracing Dspt.)

Specialists in Bunk Stacks




&

Leeds,

find

in

of

is

the

New

bound

to

accelerating
and

York

related

and

far-

popula¬

industrial

activ¬

firm

111

name

As

financial

the

ing,

field

est

of

enlivened
in

As

against

engaged
bank¬

mergers
investment inter¬

industry.
With the
trend, the discount from

be noted.

Mergers have dramatically af¬
investment

shares of the
With

values

of

the

participating banks.
development,
bank

this

Figures

In

The

is

1945

.

Number

Banks—

1954

1945

1951

which

developed

hvAaJc

City, members of the

Interest

Stock

Loans

changed

to

Exchange, will
&

Yield

mergers

branch

their

capital, and have enhanced

their

competitive
shows

record

which, by

positions.

that

those

have been able to follow

tion

The

banks

of these policies,

reason

popula¬

business

and

trends, serving
little as well as big business, have «'
grown and succeeded in doing a '
better job for their shareholders.
Dual System Protects

V

-

.

Summarizing,

~

might

we

say,

beginning " of
evitable

in

is'only in the'-;
readjustment, in-*

a

rapidly

a

changing ;:

world. A

Economic,
social,-: s^nd
political forces which have shaded
the /banking

situation

to

persist. High costs are with us. #
are taxes. Population,:
income, ; l
and meposit shifts will continue.-/f *
So

-

What about future

The

ers?

trend

rupted for

foreseen,

bank

might

*
-

with

be

it

will
of

mergers

he;~

even

than

We know that the movement is

already under close official scru-tiny to determine how the public;
interest is affected. All of

us

want

vigorous

competition,
not pro¬
tected monopoly. It is evident that
the
developments to date have
competition

for

the

conditions.

demonstrated

on

is

it

as

elsewhere

throughout

the

customers

This

East 149th

in

is

Street,

other

cases

country.

Bank

receiving

are

more

seryice,

more efficiently, and at
steadily lower costs. Despite the
sharp rise in the cost of living

since

before

price of

is

rower

War

II,

the

to the small bor¬

generally

primarily
banks

World

money

to

into

lower, due
entry of large

the

the

retail

field.

The charge has been made
unless the merger trend is
we

will

be

soon

down

to

that,
halted,

a

mere

handful of giant banks as in other
countries.

Even if this absurdity
prospect, the public, as
pointed
out,
would be

in

from
of

monopoly

by

the

non-bank lenders.

Further,

might consider how

we

6.6^0

37

21

6,847

6,639

our

dual system of banking, state

$11,724

$2 026

$2,651

$5,217

59,073

and

148,200

27,700

26.600

89.300

national,

121,600

57,500

6,300

11,300

13.500

45.700

67,300

18,400

10,300

59.000

56,500

1,268

2,988

216

428

1,052

2,560

394

Interest-

778

86

157

303

621

public

from

serves

the

to protect the

danger

both

of

monopoly and nationalization. So
long as the Comptroller of the
Currency

and

the

various

state

banking departments continue to
required

to
874

"Exclude

taxes

based

on

271

348

620

24.700

1.77

0.53

1.76

(%)__:

(% )

130

4.034

124,800

0.90

Investments

required

2 210

L7Q8

realized

income

Yield realized

exercise

97,200

eV£Il

and

3.23

1.40

income.

744

1,939

1.360

3,414

72 509

102,209

1.20

1.03

1,90

2.74

1.88

3.34

-

greater magnitude.

77,400

income

•

inter-

perhaps

or

merg-

reason, now un-

some

continued

vast front

1954

•_

?7

bound V

are

Member Banks
1945

-,

commercial banking

19,300

Expenses®

other

York

expanded

6,804

________

Interest

have

through

$7,243

Accounts

Income

be¬

reorganization
be deemed a merger.

protected
A'l Other

Less:

of

through

then

117.000

of

Capital

effected

transaction

business

already

City

or

tax-free

a

may

were

Millions)

New York

severance

a

by

monopolistic
analysts

investment

managements are now more con¬
scious of the quoted value of their
shares. More liberal dividend pol¬

fected

bene¬

buyer.

the

can

acquiring

branch locations,

new

intensified

book value in the marketplace has
narrowed, and, in many cases, dis¬
appeared.
Understandably, bank

icies

the

institution

public's patronage and not brought

know that bank

we

merger

All Member Banks

Operating

Broadway,

Leeds

branch

Discount to Premium

City Members

York

Spear,

state-wide

banking for banks and trust com¬
panies having capital and surplus

im¬

be

Back

funds of $25 million or more.

in

must

interested

systems
concurrently
experienced
deposit
growth,
have
enlarged

and again in 1933, the
Superintendent
of
Banks

From

which

the

customers, and increased de¬
posits. The earnings of the retir¬
ing bank now become those of the

the

recommended

of

have

1932,

then

be

may

new

Banks

City banks' participa¬
future growth of the
New York. The banking

in

it

of

their

fiting from

and

not

question

Central Reserve

New

Kellogg.

The

however,

(Dollar

New

be

far have

so

basic

ap¬

liquidation, the

by

Shareholders

their

additional

Selected Data for Federal Reserve Member Banks, 1945-1954

Loans

■

adja¬

continue.

banks,

Deposits

the

that

other

and

Investments

120 BROADWAY, NEW YORK
3, N. Y.

the

be sold

net

sale, there is a
continuity of ownership when the

consideration.

name

wald & Co.

1

tion

1441 Broad¬

York
Stock Exchange,
changed to Maltz, Green¬

June

mergers

or

consequences

York

have

precluded

tion

'

New

On

the

among

New York City, member of
be

have

indication

every

these

provements

1

Greenwald & Co.,

the

New

bank,

the City of Houston,
Portland, Ore., which

in

The

Effective June 1 the firm

Request

Members New York Stork
ExchaTige,
Members American Side!; ^'v/Honjrp

Telephone:

-

,

will
on

of

11th

State

loins increased about 35% in this period;

Laird. Bissell & Weeds

(L. G.

1.69

3.19

way,

cash,

sale

be
weighed
parties.

7.3%;

shares.

Bank

in

yesterday

1.54

3.00

& TRUST CO.

requirements

,

by legislation of
from
following
the
business
and
population move¬
ments of today.

From Securities

1.42%

of

by
a

termination

million

10

answered

The

in 1954, or 340%.
approximates the total

or

growth

2.f 9

FEDERATION BANK

York.

million

There

to

•

2.44%

To Be

reserve

total

rank

From Loans & Discounts

securities nearly 37%.

New

cities of the country.

are

on

in

than

Counties

New

The rate of return

common

more

deposits in Westchester and Nas¬

and from its investments:

1950—

thorized

growth

This schedule gives the average rate of return that New York
Trust Company has been deriving from its loans and discounts

,

deposit-capi¬

a

15 to 1, enjoy, in

of say

deposits

c

years,

years.

was

ities throughout the state.
With
foresight,
New
York's
leading
bank holding company last De¬
cember raised $25 million through
sale of preferred stock and au¬

First,

deposits per dol¬
capital, and are sub¬
lower reserve require¬

Texas,

27%d

b due

d Due in six to nine

effected

deemed

stock.

bank

$1,550

l%b

91

for bad

bank to

a

represents

praised book value plus a premi¬
um
for
good
will
or
earning
power.
When the transaction is

bank

York

This

99

reserve

7

page

risen from $350 million in 1941 to

Over 10 Yrs.

8%a

1953.

that

from

This is perhaps best illustrated by

100

1952.

a

on

consider their tradition¬

to

sau
5 to 10 Yrs.
-

merged

tax

by several factors.

must

Maturities

92%

shareholders of

1955.

Changing Deposit Trends,
Branch Banking and Mergers

the

1951.

54

previously quoted

discount from this book value.

a

Generally, the consideration to

and

break-down for several years of the bank's
government bond portfolio:

1950.

691/4

in

marked and is bound to continue.

a

XJp to r> Yrs.

2.75

stock split-up

v

-

L.

+

..

515

'

900,000
13,690,000
Accrued taxes, etc.-__-^____._.h. &
8,967,000
Deposits
766,432,000

I...'.

4.68

City, admittedly out¬ State of
are
aware
of
the
moded, are discriminatory and a; authorities
situation.,
The
State
handicap
to; adequate
earning f changing
power., rVV*
v;'/%/v- Legislature in its last session au¬
thorized a study of the Banking
Law with the view to possible re¬
Restriction Limits Growth-codification.
Such: a
legislative
Another* major factor limiting'
study
naturally
will
consider
the New York City banks as a*
those sections of the law which
group is the restriction imposed,
confine - bank
branches
within
by the banking laws of the State •
their present limits.
Of New York which confine their "
Financial analysts, when com¬
branches within the city limits. *
The rapid growth in the suburban: paring banks in New York'City
with banks in California, must re¬
areas
around New York City ismember
that, while state-wide
typical of the national trend. The
banking is not yet possible in
movement of people and business*
New York, the matter has long
to the suburbs has been especially
been under

>v

_ _ ...

501/4

.

Dividend payable
-

51%

581/4

those of banks

or

merged. Merg¬
premium above book

a

•

'

Acceptances

59 y4

2.75

comes

higher

$30,000,000
40,000,000
7,006,000

Undivided profits

at

2.50

brought

were

sold

were

consideration

Continued,

New

Capital

value for shares

the year-end book value
the $3 dividend represents 64% of 1954 earnings.

and

ject

:

■

45%

490

year); the rate of earnings

ments

liabilities—

56%

shares, at this price, are selling at 15.2 times 1954 operating earn¬
ings (giving no effect to net securities profits of $1,000,000 in that

effect, 50%

$868,254,000

2.50

split-up in February,
1955, has been on a $3 annual dividend basis. At the present
market price of approximately 73 the yield is about 4.1%.
The

lar of

3,857,000

er

The stock of New York Trust, after the

tal ratio

13,432,000

acceptances

42%

debts, set up under a treasury formula, amounting to $4,595,779,
a
general reserve of $1,709,444. The former is carried as a

other

37,744,000
344,984,000

...

481/4

469

ally strong deposit-capital ratio,
currently about 10 to 1. Banks in

203,271,000
2,100,000

...

Stock of Federal Reserve Bank

Other bonds and securities-..

2.25

They know that, in recent years,
most profitable
bank shares

and

we

S.

475

earnings

limited

$262,886,009

which

reduction in total loans and discounts.

1955

banks

39%

At the close of 1954 New York Trust carried

years.

Condition, March

451/4

book value.

Manhattan, with

*

Cash and due from
U.

more

2.00

were increases in: book value 44%; oper¬
33%; invested assets —6%; dividend 57%. The
gain totaled $42.02, or at an annual rate of $4.20 a
share, the total gain being approximately 95% of the Dec. 31, 1944,

employees, approximately one-quarter of whom have been with
New York Trust for 25

to have held

In this decade there

The staff comprises nearly 1,100

year.

long-term

the

40

475

.

63.76

ating

approximately

effect of keeping down over¬

45%
401/s

45

.*

4.35

61.96

the

to

51

:

4.50

60.21

f

trend

merger

value of their holdings.

58

stockholder's

merged.

v/as

of

This had had the

fifth to be opened this

'

56.94

shareholders, too, are everywhere
recognizing the importance of the

or

leading banks.

*

426

enabling the institution to operate with a relatively small
It is regarded as one of the most compact of New York's

staff.

'

3.27

♦Adjusted for 2-for-l

merged with it.
r

was

head and

a

55.60

S

49%

Thursday, May 26, 1955

..

-

$2,300,000,
New York Trust Co. has seen this item grow to more than threequarters of a billion. The bank has been fortunate in having over
Its history a group of highly influential members on its directors'
board.
The bank derives a substantial proportion of its income
from wholesaling its credit, but every ef ort is made to cultivate
in

2.00

1954

In 1949 Fulton Trust Company, also

specializing in personal trust activities,
Starting

2.00

402

1952

New York Trust Co. and Liberty National Bank

personal trust business.

461

3.25

1953

was
effected in 1921, the name of the former being retained.
Liberty National, primarily a commercial institution, had in 1919
acquired Scandinavian Trust Co., which brought an excellently
equipped foreign department to the ultimate consolidation. The
original New York Trust Co. had built up a substantial corporate

and

3.27

54.92

1951

TRUST COMPANY

changed to the present one,

was

A merger of

53.67

1950

is the outgrowth of the

1904 Continental Trust

2.00

Low

571/g

$1.88

456

1949

consolidation of five
banks. None of the mergers during its history was made merely
to attain size; each component institution served to bring to the
New York Trust its specialized branches of the banking business,
and resulted in a well integrated bank.
The company started
business in 1889 as the New York Security & Trust Co., and in
company

$575

3.70

Bank Stocks

—

YORK

NEW

$3.97

52.38

1947

■

$49.92

1948

By ARTHUR B. WALLA CP

1945
1946

High

.

parallel

assured

of

under state

tional

48

powers,

banks

we

are

operating

charters and 48 addi¬

under

national

charters,

a

than

a

total

of

mere

handful. And it would be the

96.

This

is

more

Number 5432

Volume 181

violated.

were

server,

such

states'

unless

minimum

..

.

success

of course, believes that any
fantastic
situation
is
in

wider understanding will redound

Changes

the banking

in

thinking

scene

on

.

ultimate

benefit

of

Bank

mergers,

the

and

(Ms

We

See

organization and methods of operation and making suggestions for improving the practical efficiency of our national
.government—as was the case with the former Commis.sion—but likewise to inquire into the present scope of

;

It

i

no

surprise that

It

works.

was

more

or

many

the

.'

rather

patently

Salle

frankly recording it

as

I

proceeding in such
about

the

a way as

n v e

of

Chicago.

;

Their Presi-

dent,

Miss

Joan Richard¬
son,

of Glore,

Forgan &

Richardson

Joan

the

Officers

and the Board

of

Directors, this

name

more

was

in keeping with the growth of the

organization

as it now represent?
Chicago, and the possibility of
establishing a relationship with
other
similar
organizations
in
cities
throughout the
United

situation, although, of course,,

States.-

this suggests greater anxiety

politics of the situation than about the eco¬

Join Brew-Jenkins Co.

proportions, and the great rank and file do not

to be

aware

of the fact. How many

realize, for

CLEVELAND, Ohio—James
McCollum

ex¬

have

ample, that the volume of liability assumed under OASI
on

a

present value basis

now runs

to

an

Brew-Jenkins

There

with

are

the

many

ordinary

Co.,

of

Inc.,

could

our

Federal government

CLEVELAND,

Ohio

—

Harry

Stanley is now with Jaffe, Lewis

learn with dismay but

&

profit from the reports of the Hoover Commission.

Co., 1723 Euclid Avenue, mem¬

bers of

Midwest S. E.

the

^

complaint is a different one. We think that the
report, so far as it has been made public, is not nearly
anti-New Deal enough. The authors of these documents
are evidently not in sympathy with a good deal that has
been going on in Washington. They do not hesitate to
•condemn much that should be condemned. There are, of
Our

good

a

the

many

Comes

anomalies in the Federal program
which far antedate

establishments

Federal

Up

with the Low-Down

the

rise of the New Deal.
But Mr. Hoover and his associates show a
more

great deal

inclination to wince and relent and refrain when the

ATOMIC BLAST '55

larger and more vital elements in the New Deal are ap¬

proached than we could wish they had. One supposes,
for

one

their
too

Greatest Fallout Since 1929

thing, that these gentlemen felt that whatever
beliefs,

own

a

Touched off

set of recommendations which went

come

to regard as desirable

—

WALL STREET SET TO

thanks to the

INVESTIGATE CONGRESS

preaching and the politics of the New Deal and the Fair
Deal—would be too
do not

Order

likely to be rejected out of hand. We

Wants to Know

profess to be politically wise enough to know what

justice of such an argument is. What we do know

the

Is that

we

should be much

more

heartened by a

Salaries Up

w

forthright

report which stated in effect that virtually all of the New
Deal should be

dismantled, and that the

mantlement should

proceed

as

begin

as

of dis¬

possible and should

soon as

rapidly and vigorously

process

as

feasible in the cir¬

cumstances.

Its task forces should, in any
a

number of

event, be forcefully reminded

assembling the facts of the case these

hardworking individuals with
perform

difficulties.

copy.

were,

of

course,

many

other pressing duties

faced by many and very real

They did not always find a way to surmount




—

_

•♦

Send your

$

or

—

—

—

—

—

— —

— —

— —

Up Only 47%
—

— — — —

— — — — — — mm

mm** mm <

SWITCH TO URANIUM

$$$ to

ROBERT L. HATCHER, JR.

Will Sell Insurance Business

Manager
to

P. O. Box 1355,
#

—

Prudential for $1
— — — — — — — — —

- — — — «

Church Street Station
New York

really quite disturbing elements in the

current situation. In

to

of the Commission and

—

METROPOLITAN LIFE TO
a

Circulation

Close students of the reports

Why Senators'

50%

When Stocks Are
—

of

by Sen. Fulbright

greatly contrary to what the rank and file have ap¬

parently

8, N.Y.

Mil¬

(Special to The Financial Chronicle)

facts about
man

with

With Jaffe, Lewis

ment, direct and indirect?

which

Male

waukee.

amount roughly

equivalent of all the regular debt of the Federal govern¬

■

C.

Theodore

associated

and

become

The support commanded by the former Commission has
through the years been greatly exaggerated, so we think,
V fout it is evident that even that support will be more dif¬

and

in

the opinion of

•

•course,

Co.

that

stated

entirely during the past 20 years—to expect largesse from
the Federal government.
It may be taken for granted,
therefore, that more opposition will be encountered by this
Commission than by the last. It is also less likely—with
-deep regret be it said — that as strong support can be
mustered for much of the program now being put forward.

ficult to obtain this time,

to;

stment

Women

such). Such tactics reveal some

sort of uneasiness about this

La

of

Street

'

Women

of

a means

to

the

name

proposals for financing huge

are

Meeting held at the Chi¬

Bar Association, on Wednes¬
day, May 18,
voted

enlarging Federal debt (in fact, if not in theory, without

seem

not up

•

current,

—
Members of
Women, at their

(Special to The Financial Chronicle)

•camp.

points recommendations have been made which touch the
pocket book nerve of a good many vested political inter¬
ests and of others who have learned-—mostly although not

the

further road construction

tainous

Democratic

The fact is that Mr. Hoover and his colleagues have
to this moment completed their studies and their
recommendations.
It is clear, however, that qt various

of

111.

Street

change

nomics of it. But other forms of debt have assumed moun¬

:

less to be taken for granted that

this sort should be" heard from

cries of

Dinner

always fully presented
far beneath the surface and are
American citizen can pass them over

up—are never

■

the Fair Deal and all their

of the New Deal and

ment

Salle

cago

*•

,

occasion

violently
soi-disant liberals are saying that Mr. Hoover is suggest¬
ing the complete (or very nearly complete) disestablish¬
need

CHICAGO,
La

pointed

Some

governmental functions and to suggest which, if any, of
the general duties which the government has undertaken
rshould be dropped. In short, he was directed to make a r
-careful appraisal of the suitability of the activities of the p
Federal government in many fields into which it has |
•entered during the days since Mr. Hoover himself was in
the White House.

To Inv. Women of

lightly only at his own very serious risk. Nowhere is this
more
startlingly the case than in the financial undertak¬
ings of the government. The usual financial reports of the
Federal establishment are quite enough to cause deep
anxiety on the part of the citizen of this country, The •
Treasury regplarly reports its ordinary indebtedness, in¬
cluding contingent liability upon securities issued with *
Treasury guarantee. Now not too far short of $300 bil¬
lion, this figure is certainly not conducive to sound sleep.
It has long been a special worry to such leading states- :
men
as
Senator Byrd — and doubtless many others in
places of public responsibility.
■:;V'
Hf. ■■

^ -'

29

Change Group's Name

so obscure and so unenlightenthe accounts of the governmental agencies and so
and so ambiguous are the reports of governmental

often such that the

They
inventive managements to
public interest must, of course, be function more efficiently, bring¬
safeguarded. Yet commercial ing better banking to). a wider
banks must be allowed to make1 public.
The
merger
trend
has
the necessary adjustments to added vitality to the industry. ? -

getic,

Continued from first page

instance, there probably was no

But the facts—even when not

always
healthy
allow ener¬

subject

development.

lators, bankers, and investors. The

one

vague
establishments.

inves¬

to official approval, are a

part of banking authorities, legis¬

than

are

tors in bank shares.

nevertheless place new importance

long-range

the

to

Vitality Added

;

on

ing

more

of surmounting them,

way

will depend upon the sup¬

port of an informed public, and a

prospect.
*

them. In

strengthen their future as pri¬
vately owned enterprises. Their

rights
ob¬

serious

No

(2437)

The Commercial and Financial Chronicle

R. Re's GET YOUNG IDEAS

Piggyback for Passengers
Instead of Freight

30

The Commercial and Financial
Chronicle

(2438)

Continued

from

page

Bond

9

ure

The Anatomy

Feb.
that

city during the months of greatest
might account for the
more rapid advance of
municipal
bond prices. They may have been
demand

level for

months.

of Bond Prices

w

1.29% index fig14, 1946 and stayed
a couple of

Buyer's

on

around

*

.

.

mittee
then

Thursday, May 26, 195

.

pulled

the

pegs

on

some

all

on

The

Government
2Y2s declined

bank

issues

nearl~"

five
points
in
the
next
fou
Looking at some of the prices minor influences. More
likely the months although the Fed
conpaid
for;,, new
issues
in
those preference
of Banks
for
serial tinued to foster
an
"orderly marpaid for money, seem to have months, paid eagerly by experi- maturities was what made
the ket" and
by December, 1951 held
been due more to reluctance to enced investors, it is evident that difference. And the banks
were
$1,676,000,000 more Governments
lend
than to a lack of funds, there is no lack of "relativity" in
clover, witk.practically unlim- than in
February (average : of
With municipals, over-supply also in bond prices.
For example, ited funds for both loans and indaily figures),
was
a factor.
Corporate bonds Allentown, Pa. School District Is, vestments —
because they could
Stripped of its political bittermade their lows in 1932, but mu- 1948-74 at
0.50%-1.00%; St. Louis sell Government bonds to the
ness, the accord was
tardy recnicipals not
until about nine County, Mo. Is, 1953-66 at 0.70%- Federal Reserveany
time they ognition of the
absurdity of exmonths later. The total of new 0.90%; Dallas Is, 1947-66 at 0.40%- wanted cash.
f/;:;;;'///pecting the Federal Reserve }to
municipal issues in 1932 was less 99; Houston Is, 1947-71 at
0.40%-;
This phenomenon of "interestkeep money rates low for the
than $1 billion, but 30% of them 1.20%; California l%s, 1949-66 at
bearing cash" ^carried the mood Treasury when
the
creait
were crowded into the last three
de0.75%-1.25%.
of
1950
overt into
1951.
Bond mands of a new
war were raising
months, followed by heavy calBy the end of April there had prices
continued
to
rise
until rates for other
borrowers
• /
endars in the first four months of been four months of heavy offer- March
3, 195L the date of the
'The. various measures of
re1933 when the affairs of financial ingS) with plenty more coming, famous "full
ageord" between the straint taken by the Federal Re¬
institutions were approaching The boom was rolling and many Treasury and
tfee Federal Reserve serve, before
,

But

in

money

1933

46%
Less

was

1929.

needed to carry on
example, the sales

was

For

business.

in

Electric

General

of

services)
than in

and

(goods

less

Product

National

Gross

1932 were

only 35% of those in 1929. Moredollars still had

gold buying
they were no
longer convertible. By May 1933
the New
Dealers had
prepared
the way for inflation but had not
yet been able to get it started. ■
over

although

power

At

did

Federal

the

time

that

Re-

have

not

authority to
change reserve requirements but,
by open -market operations and
changes in the discount rate, it
could increase the money supply
serve

and

it had

the

influence

And

of

cost

credit,

been

increasing Federal Reserve credit steadily since
January 1932.
During the fear
confusion

and

of

the

bank

crisis

in March 1933, member bank bor-

rowing from the Federal Reserve
banks
rose
to
$1,432,000,000 on
March 4 and then declined to less
than half that amount in the fol-

lowing three weeks.
rate

raised

was

The discount
2%%
to

from

3Vz% then quickly reduced to 3%
and 2V2% and by the end of the
year to 2%.

,

the accord deduced
them nadir.
other borrowers had securities to Board. Then
^Scorching blast of the .availability of credit land in-'.At their low^point the prices selL
^
rationality destroyed the/clover creased its cost
to
many
borof municipal b OJ)i d
s^Rlustratpcj From May, 1946, until near the field on a single yday.
•
rowers but had no
adverse effect
how their own supply-demand end 0f 1943 - with only brief and
The
_

,

year 1950 was split evenly on the
prices of either corporate
between
peace-and
or
tends
However
municipal
bonds
were
swept sudden and real demand for war
soon
as
open market operations
along down by the flood of taxmaterials, combined with hasty could be used
as a
tool of over*
exempt issues.
U;r-:.v,;
civilian buying in fear of scarcity, all
Federal Reserve policy bond
By Feb. 14, 1946, when mumci- ' Life insurance
companies, most looked so mudi'like the
beginning prices sank to levels which niade
pal
bond
prices
reached
their 0f which are mutuals, were
heavy of an inflationary scramble tnat
the cost of long-term
high, inflation was in full swing., sellers of
borrowing
municipals in 1946, did the Federal Reserve took action
consonant
with
The
rates
in
nthnr
money
supply
had
been almost nothing in 1947, but have at
once. '
And
throughout, the divisions of the monev market
quadrupled since ; 1933.
Interest increased their holdings in every Korean
War, July, 1950-August,
Neither corporate nor mnmVi
rates
were
being kept low by year since then. Figures are not
1953, watchfulness was not re*

ratio

the

exaggerate

can

^effect
y

feeble_ recoveries, the prices of

of the generally prevailing mo
rat®,s«

war./The

municipal

al

..

fiat.

Government

bonds

were

pal

available ' for
stock ; insurance
companies, but, since tax exemp-

pegged and there were plenty of
them
(over $198,000,000,030 of
marketable issues) to be sold to
the Federal Reserve any time any

laxed.

tion is valuable to

them, they also
presumably have been large buy-

ers

in all recent years.

The

civilian
to

effort

spending

to

was

and

curb

borrowing

leave

factory,: space free
orders, and 'to
avoid
over-expansion which would

prices

made

to

decline

the

middle

anv

after the accord

tinued

for

until

the

war

//•.■//;

bond

covery

was

logical

for

hut

almost

of

1953

monev

.rP"
eon"

efoa;m«7
This

rates-in

ne-.
creased throughout the period of
them wanted money to
cessitate
a
painful
contraction the Korean
had the same duty as now to keep buy municipalIs or anythin,g else.
War.
//
1949-1950-1951
»
when war orders ended.'
the amount
of
available
The remainder of the vear 1951
credit V World War II had ended the
From ear]y in 1949 the prices
It was a half-hearted war./The
was
adequate to the legitimate needs previous August, amidst pred c- of
relatively uneventfuLte the
tax-exempts climbed for two public was in no mood for
reof the economy, but it had
no tions
that unemployment, would years. Industrial
money market
The Federal Re
production was strictions.
Manufacturing facili- serve added to it?
duty to keep interest rates low soon start a cham reaction toward Iower in 1949 than in 1948.
Some
ties, already expanded, were ex- Government
or
high or steady. Mr. Martin, depression. Instead^ the workers of the
money not needed by busi_
>ded ^

The

Federal

Reserve

System

owner of

.

-

Chairman of the-Federal Reserve

beat

the

swords

companies

into

ness

Board, in a recent interview said, plowshares and spent their leisure
-"Money must always be there- buying the gadgets deniedhem

SteTrice'

-

In

1933

the

highEnid their

plants,,

price was high and
was

corporations
xb
d
.

A

came

kond

put

int0

market

of

new

fo^ther

the

municipal

and found

issues

Wages

con-

thfeir

tinued

steady

l%

restrirtivA

hv

fewer

noTes

bonds

hnii

rise

ernments, taxed
corporations, and citizens
all
earned

increased

more

tha" in 1945'

derthe
nf

faith
thp

^xneri
frfir

shatterine

nrwiniw

vpar-

^^Mcte^^ehtors
debtors

Manv

Many formerlv respected
formerly

defaulted." Current borrowers
had
to! pay enough to make

than respond to

n0 more

money

market changes.
^

The price pattern nf miini„jnal
of municipal

bonds

ties-

quite different. ;/;

was

The

money-love outweigh caution.
Much of the

+U1!?
the dismal
i

1946-1947-1948

borrowing done in

+v70VrmM <^on?_From
of
May 1933

the
1945

August

fhpnprPf?R nfn?h?rmii°
mu-

suggest that the credit of the

nicipality
•

likely to improve
future; for example:

was

in the pear
\

Bidder

Offering

Rochester, N. Y. 6s,
1934-38

100

zozc7
5.25 %

monev
ran

the

bonds

iafter

or

war,

a
a

local govern-

5.99% 5.60%

In the depression years the low
prices of bonds of all kinds, i. e.
the high rates which had to be

than.the

war ended,
heavy sellers of
Governments and buyers of municipals.
/
/

1935

1936

1937

193S

1939

1940

1941

1943

1944

1945

1946

1947

'

1941

1949

1950

sales of tax-exempts in 1951

issued

credit.

Again

1951.

*

Public

banks

a little less than in 1950.
No other effect is visible in the

November, 1950,
requested to restrain

were

unnecessary

records

credit expansion. But issues

expansion continued.
Member
banks increased
their loans ; by
nearly $7 billion in the first six
months of the war.

tions

in

financing

by

early in 1951

and

^^tiorr

*

X.

;>

both

1953

two

the

;

apart.

/inflationary

(|honth

weeks

effect

w£fe

But

1951,

accord,

in

phd the fear of its

greatly

were

.

magnified by

to1 within

Washingfew days

a

understood

.to

would be

change in the policy
official interest rates

to

mean

that

there

no

keeping
The

assist
terms

[Treasury financing.
pf the

accord

were

not revealed ih detail, but it

•

1939

1940

1941

1947

1943

1944

1945

1946

1947

1948

1949

1950

1951

1952

1953

calendar

was

more rewarding to buyers.
decline
was
-not
yet

the

extra

inflationary push to the
early months of the next year.
Factories were
busy with war
orders

made

it

was

evident by both parties

that

thp

intention

was

to

•

while / the

dragged on.
going - strong,

right and
election

Mr.

-

truce

"giving

left.

talks

Truman

The

'em

was

hell"

Presidential

coming up. -Everyone felt like spending and borrowing to spend more.
was

.

Local
hold

back

longer.
put of

governments
their

could

not

borrowing

any

Nineteen fifty-two's outnew

tax-exempt bonds (exeluding refundings) was $4,071,803,000, fully 28% greater than
1951 and more than in any previous year. The $326,000,000 Ohio

Turnpikes, the

largest -toll

issue

up to that time,
and by the end

came out

June

discourage bahks and others from
of the year new
selling Governments to the Fed- revenue issues reached $1,133,eral Reserve to secure funds for.836,000,
nearly doub ' such filending at higher rates.
nancing in 1951. The Ohio Turn^

™

"of
ot
1954

the

terrupted only by the steel strike,
the, recovery from which-gave an

refrom

of its announcement, which were

193#

be-

to 2.03%

depressed, and their yields

made

This

.....

earlier statements from

1937'

when

were

effect

increased

-1951

.

ton and up

1936

prwes

rose

small. Thus during a second year,
the prices of
tax-exempt bonds

margin

shock i of: the

The

March,

1935

2.11%,

April, then sank to 2.38% with
only a few brief recoveries in

year

under Regula-

twpl weeks

same

;

,

to

Bond Buyer's

in

75%.^;,/

•

soon

1952 at

ended.4
bank reserve
Nineteen fifty-two was a year
Z|vere increased on of intense industrial activity, in-

the

quirements
50% to

of

a

January,j|l951,

dates

low

pri-

1953:

is/v44v«

of about $1 Billion of the afterChristmas return flow of funds,

„

sold

playing

|r

' jn

requirements
nullified

1954

restricted

was

According to the
gan

regi||ations

In

1934

the

index municipal bond

jl.

1949 and 1950.- was.
jaf; 1950. But both
less than in^ 4.948j of these
were liberbut
corporate
bond
prices
in-? alized by Coh£resS in the latter
creased very little in 1949
and half of 1951.

1953

all

have been

;

;

Instalment; credit

considerably

1951

and

may

vately. The Fed
lone hand, /v

was
restricted uncfer Regulation W in
the autumn

corpora-

were

further^expansion of bank just

the

Feb. 26,

on

With
demand
increasing and were almost stationary in.„J950.
calendars light, municipal 'bond 'This would make it appear—that
prices went up with a rush to the tax exemption and relative scar1943

discount

iy2%v to

was

^

k
1934

warning

a

about voi¬
untary credit restraint. The chief
result was to add uncertainty to
a few municipal issues.:
Public

.

Jan- 3> 1950 to 1.59%

normal amount of

fiviumx

became

valuable

and

_

men or matecapital improvements. Only $818,781,728 of new municipal issues were
riais for

more

the

was-raisld,/from

rate

1%%

a year, from March,
Federal Reserve Board

the

endeavored to bring

•

.

before. Prices \JX I'QA
of
IJC1U1C#
Ad
CCHlJf
tax-fefc
As early as* U Uijr
July,_ Ai/uvj JL. JLjlx
1950, FHA
empts shot upward, as indicated and VA
tightened mortgage terms
by the
decrease
in
the
Bond
somewhat, and-, further restricBuyer's average from 2.08% on tions followed later in

ments could not get
Hdiaxwx

was

year
yCdr

scarcity, then to heavy supply.
During the

municipal

new

than

therefore

even

them, due first to

of

-

August, i950,

against

smaller in the second half. Taxes
„,Prp
hi ehpr
were
exemption
higher and
and
exemption

mu-

ereatlv exaggerated

market influences

supply

_.r.'.r,:'='"■>

nearly 25% greater in
in
1949, but rather
evenly distributed with offerings
1950

in

sold in 1945. When the

r*r\

6s,1935*60

untB

II

j

counter to

banks

Westfchester Co. N.Y
nnc

niHnaT

.,—

Price

Buffalo, N. Y. Work
Relief 6s, 1943,___ 100
N. J., Emergency Re¬
lief 5s, 1934-1941. 100
-t

and

bonds

War

of

months of 1948 the prices of

Paid by

High:y

v

end

month

/'

f.

■

.

jn

»

cL?i?fcat/s

and

1951,

^0Wly '"m?® f«St ^ °* 1950> more' borrowed more, and spent
more.

then rapidly after the Korean
War began. The money supply
followed the same pattern. Bank
loans increased with war activi-

the prices of corporate bonds did

had

.

In those tw0 years

and

For about

or

-

causes

i!,it?
rSf
" ^

what

The
gov.

out-

than

^ter than production
Industrial .in im.

sold
iq46

the

less

securities

JQ

both guns and butter.

The/ Treasury'
non eugioie
non-eligMe

offered

holders

«
2%s, June 15 and
,

P«« and several
sues .went

'out

They bad t0 be

ot
: large is
ft _wifidow.'

pncf;

2%s.

Open Market Com-

All through the

for

imme-

diate sale for at

n. time'could
Beginning Jan. 3, 1946, the line for Government bonds in the graittr
1580/75, which would be con- rising bond prices be predicted
is
Government Bank 2J/^s of 1972/67, after
38% corporate income tax, up vertible at anyt time into five year wltP any confident
The comto Sept. 28, 1950, 45% through Dec.
29, 1950, 47% through Oct. 21, 1951 and 52% thereafter, as shown 1
%% marketable notes. The Fed-^. petition for funds v
itense.'
in our
TT

.

NOTE: U. S. Government Bonds.
based on the yield of U, S.

-

_nto

j

non-neguuauie

•

.

,

*

weekly compilation "The Bond Buyer's Index
pf




Municipal Bond

Average

Yields'^——

;

.eral Reserve

;

he prices

Number 5432

Volume 181

.

.

/

The Commercial and Financial Chronicle

.

(2439)

struggled with mors of a long-term Government terms for any legitimate business months in the December financsupply-demand ratio, issue persisted. At last it was an- need.
ing and the longest of the year.

of municipal bonds
their

own

addition

In

Member ^nk loans incr^sed
1983/78. -A total^fJJP jQtb e.end^ofine _year, many

tax-exempts^had to nounced for. the middle of April

with nearly $2,000,000,3%s,
corporate bonds than 606,000,000 was issuedwhich Qt them
in 1951 and with the many bor- $1 billion was for new money, some

compete
000

,

was

14

The

i

.

to

up

although

December

in-

banks

the

^

SalReserve ™^$931 oSS.000
total of$1,728 000,000

to the hu«e
tne

uu^e to

on

*

Vi-hoct

De£ 2V95i'J

m

"The

supply,

money

TTe

credit
than

more

of

the total

i.e.,

was
year

a

the

were

doubl!

that

the whole of 1952 but
tight-fisted open markept the banks
deeply in debt. In several months
the average of daily figures recorded borrowings greater than
operations

reserves.

excess

to

meant

this

What

of the

<| the first

either party. Industrial
was Jtown to 125 from
as they

lor it was hardly more than

Tesfc^if^' "ut
by

because

fcXCess

rGservPo

1]ntii

™0"?de£,:esns0 rS® btthat

Feb" X'

that!

re!

.v

c.

'

v

Since then stock prices have
J^ade ^l-hme highs, and it has
been. noticed that instalment buy-

widened.

Since none of these types of bor-

Some tax cuts glready

week old the new
dropped were in force, more were legisbelow par, and tFey continued to lated, more deductions allowed,
faii7 carrying tlre_ whole bond excise taxes were cut. The tax
market with therrft' Oh June 1 the #n dividends was reduced slightly.
31/45 hit bottom yft 9818/32 bid; (Companies, already freed from
the bank 2V2S, j^ich had been ;the excess profits tax as. of the
95 26/32 early in^the Year, were^hd of 1953, were allowed more
municipal only 90.0 bid at
close that dayr^fifeeral amortization charges.

money market in which new tax-

and perhaps too

~

rowing can be curbed
there is now beginning

great,

easily,
to be

some question as to whether or
n°t an incubated boom can be

healthy.

done
But

if

it isn't.

1954

should

have

been

^ost

_,

fefur?ected to

■

city jn those twb^ceksPFed^ral

"•ioco
1952

.,fJvpar

seven-year

a

was

able after five

years.

1953
municioal
mu

ThP
The

huge

:

now°that
tnat
mors

a

market

s

new
ne

rc

r

,

issui

new

now
WaS

bond

pav^

can^ mto
of

.

Administration
.

S
began
under

'20

stopped truce
runningg^e e mfen-t^^
jdqwn tiiU.The
a

big

Industrfa!

■

19s§

tbe Federal Reserve1 continued to

There

1.

.

^e

debt

than
but

bv

year ru\ Dy.

actuallv

at

the

Julv

was

fkst

anv

a

of

mis-

K aI?y mls:

/hopt the blessings of

paper

But the supply of debt

of all kinds was so over-

whelming

that

investors

have had little time to do
thimr

h»t

could

jLn^trurtinh
continued
ease»

thing but invest.

was

'

had been.dispelled. Seeing

The years total of_new taxcutting exe™Pte was $6810.758,613, al-

do

all

this

and

keep

prices of all bonds declined
during the early months of 1953,
municipals most of all, because
the hew issues planned long be'fore kept coming in volume. RuThe

'

*




first

the

Then

"active
week

it stonoed

of

buv-

e" cepfW HttL

ing"

temporary help to excess reserves
then, has gently reduced

„ow and

bank

credit

through April 20. Banks have^^ increased their loans contra-seasonaily and to keep their reserves in
order have sold Governments and
increased their borrowings from
the Federal Reserve by a moder-

pointed hints from Washington

have made deadlines,

On Jan. 5 margin requirements

0„

raised from 50% to 60% and
April 25 to
0n Feb. 15

70%f

the Treasury exchanged $1,923,000,000 of maturing or called obUgatlons into 3s, 1995, thereby
rem0ving that rather large sum

w&artyMsas

Qf $5,902,000,000
Certificates
in ' f^ed the discount rate.from 2%
month through July, July
During tlte,.remainder of,.,tO 1%% on Feb. E and to 114%
1953, the member banks did re- the year the Federal
Reserve on APrd 16, 1?54. It also reduced
duce their indebtedness to
the bought bilis whep Deed ^ addi. reserve
requirements twice in
Federal Reserve, but they also in- tional credit appeared and all new July- Its open market operations
creased their new loans to cus- Treasury
issues were carefully were attuned to seasonal needs
tomers, contra-seasonally, and in tailored to bank'"preferences for and the Treasury's borrowings.
the first half of the yedr, sold purchase or rollover. Nothing was
The Treasury borrowed less
over
$3,000,000,000
of Govern- done to make anymore trouble- new money in 1954 than in 1953
every

to

of

oolicv

On April 14 the discount rate

Governments,

ments

its

e*Panded their plants. At the end tion bonds and $3,056,497,817 rev- from the possibility of being used
enue bonds, largely of Authorities, for short term lending—for marAnd also demanding attention gin trading, or buying automowere $7 545,000,000 of corporate biles, for example.

•tasf«as?s, ..«■».

their reserves in good order.

Npwr-

were

-

expansion.

contraction

^

■

Tim?

from

through

December^^

buying. The banks couldn't buy foster easy money
I ^'he year the index of indus'many bonds. They needed their
_
;
™
tnal Production was back to 130.
returning funds to pay off thelr serve requirements was" announced
The Federal Reserve, which
; loans at the Federal Reserye
large e
h toadd annqstitnaled sees ."s du'y as curbing extremes

In

SSvhvIpnfpS
ontout ^ rhIShle

Xartn

theless the Federal Reserve Board

any-

inv*«t

noSnOTemee^to- a0W htu 6
buSe S of down -hls exPeh?^Fes;
divided between
Could.bee^ased, and comPai"es revised theirpilans and $3,754,260,796 of general obliga-

curb

leased funds or encouraged more

;

w

fortunate year for the municipal Federal Reserve

For fiV(! monthg early in 1954 ever.
lhstalment

Korean-war^ent-qp^emanddS vea^

requirements were
dropped from 75% to 50% but it
is a question whether this
remargin

wLrtlS

m54

.

reached late in Ajfgust 1953. The
the deluge

Bvcom®^

production showed a a^ain m the near future.
ate amount.
;
ment bona prices dkL &ot turn slight increase. "The veterans orNineteen fifty-four gave little
The open market operations of
upward until eaijly in junei and it dered new homes with multiple cause for complaint on the score the Federal Reserve are of little
was
juiy before- municipals enthusiasm.
>
of demand, which was the largest interest to anyone outside of the

d°x

■

measures

ejempt issues must be sold is

Federal Reserve gupppi^jQfovertt* riustrial

of new b °
.
, aireadirdhded^?The
issues.
On Jan. 16 the discount
of
rate was raised to 2%.
On Feb. touched its
high' b| i37-,-in May
wilted

extraordinary

Reserve credit increased, But the immediately forestalled the fears £ond markff ln that it did not
^ in • fear of tight mo*ey caused some which might have curtailed have to suffer for the recklesshnnd yc ii
as it did when
bond, call- dumping of securities ^-r-and any spending, and soon the borrowing ness of others
amount of glooi<^ talk".
As al- they were designed to encourage money wag allowed to get tight
wayS) fact and fiightihad a-hard resulted
in
increased
employ- irVe1a?'ly 1953 to che?k the indoS"
time getting together, t Despite ment. As early as May, 1954, in- friaf boom—-and as it may suffer
matur-

'

.

»rThese

.

be

eYer

wo^d take money away [S^o^^f^sevrral wrek;
dictator he could hlrdl^ of 1953 to 2.26% for a short time
bonds by offering a
steadied
«iaye thought of more shots to in- during the summer lull to 2.36%
This didn
hapunw^'^steadKd.^
ject into more arms.
:
on Dec 31, 1954. It was a very
The Administra orr
d
longest

1975 @2.10%
•

_

And then there is the
further question as to what can

in£> automobile sales, and mortSage borrowing are the greatest

other

ThP

1965 @1.75%
.

Stated differently, short maturities have to yield enough to compete with the high interest rates
being paid by other short term
borrowers. For long^ term borrowing the recent increase m
rates has been more moderate
and as yet hardly shows in the
long end of a municipal scale, because of relative scarcity,
However, the condition of the

long-term issue
pen.

V

'

the most possible.

The strictly New Deal proposals

Treasury

nQtPTPd
had fostered.

April

without help and to $30,000^00 Califo^a sold 4-27-55

operartions'^|a

from

s

1975® 2.20%

to'leav^t^MlVmarke^to

ga„

1959 @1.15%

lSSaiAM

■

H was

of WPA type were defeated but ac^n was prompt and far-reaching.
Regular government expenditures
<&ere due for a slighU'reduction
but stock piling waS Resumed.
Social security was raised and

secoi^
the^Fe^had

^are

Longer

1960 @125%

Tnerp

the

covlry^a^wdl starfel

a

that the banks

was

firouo

a

the market. For example:

which
Much resentme^ was expressed
imp0rtantof all, the hous- ideal for municipal bonds, with
had been buyers to a modest ex- because the
Fed^a Reserve did^ act was modified to permit Treasury borrowing non-comtent in the early part of
1952, not use 1 s open
r^rket
loans oh easier terms to petitive, money easy all the year,
were
sellers of municipal bonds vigorously to
supjfort Government-mfre borrowers, and VA loans and banks buying eagerly. It was
on balance in later months.
!??,
prlfes
^ ^
made available to veterans an excellent year in that it mar-.
;
Besides all the other bond mar- 3 /4s weakened. Actually, by the
bomes witb no dqWn payment keted a huge and difficult total
ket depressants of a boom year, end of the
wbekri. e.^b^ ^bd 3Q years to_run. . of bonds with a gain in price Over
municipals were disturbed from May 6,
bougbt - a^|jad ]yfr Keynes himself been the year. The Bond Buyer's intime to time by rumors that the small amount
of-^Jovernments^on
act as emergency dex went from 2.58% at the end
bonds

as

maturities are about unchanged
or up a littie, because insurance
companies, trust funds, and other
iong term investors have been in

The Federal Reserve continued
to keep the banks weU supplied

any^help^fmm"wShin^on.

^ dSlthan

banks

buying next to nothing.

ate, all-wise Uncle in Washington
will take care of everyone all
..
J January
the time and never, never per- $60,000,000 California sold 1-5-55
mit another depression.
due Feb 1 1957 @
75% '

argued, it slipped on down to 123.

G^NaWpn a 1
0flesTthan 3%'a^persojiai con-

0f^ie

what has happened. One to 15
year maturities are off sharply

that the all-rich all-compassion-

137 the previous May, and

quar-

The averages

_and because the averages
are made up ot 20-year bonds.
The averages give no idea ot

biUfon

eral Government and by tne Fed-

year,

ter, although

represented

Fed's

ket

end

.

being built -jip'at an annual

$2.284,00(^000

through

the

the

at

over 36% in the pjgt year. In the Party.
second quarter of i953.inventories

before and 40%

increase ^was

the

2.58%. Sales of tax-exempts^ in intentionally inflationary. The
1953 less refundings totaled $5,- stimulation they provided stopped
431,348,531, a new high.
the business cycle in its tracks,
Worry was replaced by the belief

app0jntment
free riders.
Their hope of a^uick profit, on
by the increase in member bank pUrchases made^vith borrowed,
borrowing.
The banks had ex- money, was dashed, when leading
panded their loans more than New York
banks""raised their
10% in the year 1952.
prime rate to 3 *2% on April 27,
Reserve requirements and the 1953.
There wasL."no run-up in
discount rate were left unchanged price.
Instead, before they were
this

of

to

'

When Congress met in January
1954 every member knew that
ahead of purchases, even- though then was the time for all good
instalment buying had mereased men to come to the aid of the

rate

faU deposits), in'-

bank

serve

g
payment,

of

means

in

short sentences.

have not -declined much because
the output of new issues has been
small—only about 86% as much
as during the same period last

The jange for 1953 was 2.38% to eral Reserve were frankly and

it declined to

operations
p

1953

They creasedmoretLnSgi/,

-

eral Reserve Boand, was to curb 2.58%

April 29.

of this year can be stated in a few

^cemoer las^to the

$234,000,- orders were aboi^to be cut.
000 by the end of the year; the
The wish oi ihfe monetary autotal
of all their other invest- thorities to curbafurther expanments increased only $455,000,000 sion was based ontfigures showing
™fil I f
that the products and aecumu'lriTv, Xrrv +h#>ir ^rpatlv ex- iation of goods vaere running far
nanded
pande

in

quirements, banks hastened to

securities borrowing for faiitory^expansion
$809,000,000 in October and inventories, flfcw that- defense

on

bondP

most

i°creased

loans

months but total loang decreased

The many measures taken by
cooperating*with the- Fed- the Bond Buyer's Index rose to various departments of the Fed-

DeDec. now

tlie end of

to

estate

As soon as their funds
increased by lower reserve re-

holdings of Government
ran

„

month

a

municipal
prices
Real have done in the first four months

bought some bargains and pushed
The intention M the Treasury, prices up i rom 3.09% on June 26

their

in

increase

^

was

on Jan. .7, then .2.45% for

What

through August. After the summer lull industrial production inwere creased rapidly.
t

municipal or buy municipal bonds.

pended in September, 1952.
wise have gone latq,
Member banks increased their corporate bonds. .►(

loans by S3,777,000.000 from
cember, 1951, to the peak on

•

index

were liquidating inventory.

from the Federal Reserve
on was not a suitable matunty for were much ]lessithan inithelattei
tne them. The new; ingh coupon for part of 1952, over-,$1,000,000,000

suspended
May 7, 1952. By the tna of
year consumer borrowing had in- a
Government ...bond attracted
creased
by
$4,185,000,000, over long-term investors, and reduced,
20%.
Regulation X, restricting by the amount ofelhpir purchases,
real estate borrowing, was sus- the money
wh^.jmght othercredit,

sumer

Buver's

March and is 2.40%

bec^e manufacturenslmd stores

Banks could pay by. credit to
their tax and loan accounts, but it mgs

Regulation W, restraining con-

.

banks decreased through August,

fo^exces^moti^ to purposes, but.njember. bank borrow-

clamoring for bank funds.

rowers

Bond

Despite all these helpful efforts 2.38%
the business loans of member about

for carrying inventory,

more

1

1955
The

31

some

the

mild

everyday

Last year's tax-exempt issues,

their great volume and diversity, needed imagination as

Bank of New York madeaspeech
which he sugges'ted what
be iogical devllopments in a re¬

pould

well as experience for their pric- covery period. The papers printed
ing. High grade issues, over- portions of his talk and copies
numerous, dulled each
others were free for the asking at the
luster. And there was such a Federal Reserve Bank. Since no
a
parade of turnpike, tunnel, one»s opinion on the subject of
bridge, and other Authority bonds monetary policy could be more
rebessiop- which but it had a great amount of re- that the free riders got their fill enlightened than Mr. Sproul's, his

more evident.
The
policy of the Federal Reserve,
publicized under,Uhd 4ncon.gru.aus
designation of "active ease," .was
well -understood MdT me&i that
money could be borrowed on easy
was

.

in

funding to do. Each financing
long discussed and carefully
fitted to what the banks could
use at that time. Maturing obligations were offered a choice of
maturities, with eight years eight

was

of them. And without these spec- points will bear repeating.

ulators, unwelcome as they have
been at times, it was hard to
know how to create enough interest to sell such huge issues
quickly.
.
^ >

gproul said that

Mr

be

av0|ded

..

these

'
'

and

if

war can

recovery

thines

might

conoccur

6

Continued on page oZ

32

The Commercial and Financial Chronicle

(2440)

Continued

from

day tell us what has happened up

31

page

two

to

but that they might.

cur,

it

will oc¬

He did not say that they

;

'

■

;

.

rise in interest rates. "In
fact, as you know, there has
already been a rise in inter¬
est
rates, proportionally
greater at short term than at
long term,
but extending
throughout the whole range
of

.

more

closely

terest

rates

which

the rate may be

the

veloped in many areas. It was in
these circumstances, and in this

he

which

a

Plan

did
of

ment

had to be gifts—not

the further
expansion of credit in the early
months of 1953, saying that mone¬
tary policy can be "most useful
restrict

to

recovery

production started, our shipments
truly trade in
the sense that they represented

explained in detail why tie Fed¬
eral Reserve Board had thought it
necessary

simple objective: the
of 1 Europe

a

through increased production and

he

Instead

views.

his

Marshall

expanding
trade.
Neither one
could
have
been
accomplished
without the help of exports from
the United States. At first, to get

state¬

make any

not

lay

all

were

concerned

so

us

been taking steps

to

other

with

trade

our

recent years.

over

tariffs

30's

States

continue

minium consistent

a

with

healthy operation and em¬
ployment in those industries al¬

ready active in
is

been

This

country.

our

the

essentially

have

path

same

pursuing

we

the past
The President is deter¬
continue

substantial

for

it;

along

and

in Congress
have agreed that tnis is the wise
a

group

few years

a

objective
of

mum

calls

trade

for

consistent with

maxi¬

a

between

nations,

the most

efficient,

ranging

goods

on

up

Indeed

tariff

the

all

on

try

compared with other coun¬

as

For

tries.

down the

and

discrimination

slows

healthy growth of trade

forces

it
into
uneconomic
that entered the
about 50% in channels. Today there is still dis¬
It would be an exaggeration to this
period. Today the average is crimination, though on a much,
imply that the export of U. S. only 12%, although tariffs very smaller scale than formerly, and
goods shipped under our foreign much higher than this still stand that discrimination is exercised
aid program has been solely re¬ on many goods. Even so, a num¬ chiefly by other nations against
sponsible for this progress. Most ber of items now enter the coun¬ goods sold by United States ex¬
important has been the industry try in much larger quantity than porters.
and

the

and

whom

people

are

Europe.

Western

of

dutiable

goods

averaged

country

of the men formerly. Moreover, almost three-

perseverance

women

we

can

fifths

of

our

any

would
the

admit that without

freely

enlightened economic policies

pursued by the United States, this

would have been pain¬
prolonged, or mignt nave

recovery

Exists

It may surprise you that this

tariff.

to call allies; and To
a
considerable
extent
this
to them chief credit is due for the
large
proportion
of
duty-free
revived
military
and economic items is caused by and reflects
strength that confronts the Soviet our
increasing
dependence
on
Union in Europe today.
Still, I other nations for essential raw
believe most objective Europeans materials.
V

Discrimination

Where

trade today

foreign

without paying

enters

indeed be proud

the

But

so.

like

fact

Britain,

that

is

France,

Australia not

Italy

only impose

tries

addition

in

but

of
goods

certain

quantity

and.
duty

a

goods coming into their

on

is;

nations,

coun¬

limit

the:

imports

of

U. S.
such as machinery..
Clearly this gradual liberaliza¬
They do this because the dollars
tion of trade has paid big divi¬
earned through the sale of goods
dends. It has enabled the rest of

the Free World to exchange their

to

the

United

still

States

not.

are

adequate, nor is the flow stable
goods for the machinery and sup¬
enough to permit their citizens to
plies they need so badly from the
the United States. And in so doing buy all they want from the United

fully

goods. But this failed altogether.
A principal
Initially,
assistance
took
objective of the plan was to re¬ form of economic aid. It was out¬
the Free World has slowly but
in checking the excesses of the store each country's ability to buy right gifts of goods which enabled
perceptibly strengthened itself—
later stages of boom, thus helping from others (including the United Western Europe to climb back to
not only Western Europe, but the
States)
the things it could not her feet, and start building for
to prevent or diminish the agonies
Middle East, much of Asia, and
of the 'morning after'.!"
produce easily itself, such as cot¬ the future. Today emergency aid our
neighbors to the North and
ton, wheat, or special types of properly
has given / way to a South as well. At the same time,
He went on to discuss the dan¬
machinery. It goes without say¬ wholesale competitive trade which
gers of the Employment Act of
this whole process has also bene¬
1946 as it has been interpreted, ing that if Western Europe were permits
Europe and the United fited us. By bringing us goods at
to do this without subsidy on our States
to
reap
the fruits of a a lower cost, trade raises our
the difficulty of avoiding "creep¬
part, it would have to build up growing and mutually beneficial
ing inflation" with dilution of the
standard of living.
More impor¬
its sales to the United States and
exchange of goods. This trade is tant, it has added to the security
purchasing power of the dollar,
other countries in order to earn
and he ended by saying for him¬
quite naturally not only with the of all of us by making the econ¬
the necessary dollars and other United
self and other
Federal
Reserve
States,
but with
other omies of our allies more robust
foreign exchange.
areas as well.
Western European
officers, "we can never lose sight
and more resistant to possible ag¬
of the broad purpose of our being
living standards are dependent to gression or subversion by Com¬
Accomplishments of the Marshall
a
—to help maintain those condi¬
high degree on trade and any munism.
Plan
curtailment
would
tions in the economy which will
inevitably
How has this plan worked out?
cause her economy once more to
At the Crossroads on Foreign
promote high levels of produc¬
We now are at a point where we
Trade Policy
decline under a growing anemia.
tion, employment, and consump¬
of

exchange

an

was

This

use

many

to 100% or more were not uncom¬

has all but disappeared.

ago, now

They

the

of

heart

economic

of the
state
of the
economy.
Many persons are say¬
ing that we are floating on a wave
of thoughtless optimism, but Mr.

judgment

Sproul

1948.

the

At

Marshall

the

born in

Plan was

his

base

must

that

atmosphere,

large num¬
ber of searching questions which
he applies to the mass of informa¬
on

billion of goods shipped
to Western

$11

Europe in 1946 and 1947, cnaos
and anarchy might well have de¬

raised again any

Last Monday the weekly bill
sale was at an average of 1.697%
annually.)
Mr. Sproul listed

re¬

from the United States

that

rumored

rest

Indeed, had it not been for

cover.

day.

tion

the

of

v

is

Europe and with the
world had failed to

within

fre-

more

."

of foreign
have not always been

advantages

United

of resources in each countryperhaps do
achieve
such
a
goal, therenot realize how great the change To
should
be
no
discrimination
has been in our trade policy over
the past two decades. In the mid- against the goods of any one coun¬

mon.

made

Comment—(It

trade to

nations

Through World Trade

of the Federal Reserve Banks

.

the

Yet

liberalize

3

National Strength

(3) "Changes in the discount rates

.

nicipal bond prices, as arithmetic
can be known, may be impossible,

Nevertheless,

lessen the effect.)

be

the

of

to be held to

high quality goods from Western 20 years.
mined to
Europe and Britain.

ernment has

ing."

might

powerful changer of prices.
know the anatomy of mu¬

To

too

went

uranium

the

between

and other nations would

own

Continued from page

Comment—(i.e., bond prices are
under
pressure
of rising money
rates but scarcity or new demand

quently

years,

could be damag-

far too fast

may

market

money

be watched

A rise in in¬

...

the

watching

rates

interest

of

will have to

.

"The

maturities."

debt

movement
.

the

Our life is certainly made
by the coffee from Brazil,
the wool from Australia, and the

trade

Thursday, May 26, 1955

..

course to follow.
supply-demand ratio, but the complexity of the struc¬ fully understood.
There was a
but they never can be independ¬ ture
challanges us to keep on time in our history wnen we tried
It seems to me that there are
ent of the over-all demand for learning.
And the more sensitive to shut oi(t many important classes very compelling reasons why we
we
become
to price
influences, of goods. While it is debatable if should continue to hew to the
and supply of credit.
Fortunately, there is nothing the more adequately we can as¬ such a policy was ever a wise one, basic principles that have gov¬
secret about the money market.
sist in the distribution of these it is clear that the prewar world erned our trade policy in recent
The
Federal
Reserve
Bulletin, instruments of credit which pro¬ trade restrictions did not have the years. First, while we have un¬
each
month, the member bank
far-reaching consequences which doubtedly made great progress,
vide the facilities of civilization
statements on Thursday, and tne
follow in the much smaller world we have
not
yet achieved our
for our fellow men.
Reserve Bank statements on Fri¬
of today.
Fortunately, our gov¬ ultimate objective in world trade.

their

some

:K

of Canada, the copper of

and

be

of mu¬

like the prices of
anything else, can be distorted by

Comment—(i.e., less money for

(2)

the

over

Chile,

the

growing need for

and

ore

richer

most

bonds,

nicipal

serve."

municipal bonds.)

back

Looking

great
iron

Congo.

continuously is to neglect the one

it is clear that the prices

Re¬

Federal

the

from

banks

aspects of the economy. To be in
business and not to

to be alert at all

necessary

all

on

foreign trade is, in fact, increas¬
ing.
We have, for example,
a

the securities

times.

borrowing b,y the

(1) "more

is

the latest news

tistics and

ike Anatomy of Bond Prices

of

full

are

papers

Our news¬
business sta¬

before.

days

.

only temporary.

Our

States.

own

government

rec¬

ognizes this to be tr.e case, ancL
it' has not objected to such dis¬
crimination

as

temporary

a

ex¬

it has insisted, and
other countries have agreed, that,
pedient.

But

.

tion, and stability of the pur¬
chasing power of the dollar. This

can

back

look

with

it

on

some

Industrial output in
today stands 85%
above 1947 and is fully 50% more
than in
1938.
Living standards
a
view
to
accommodating
the
have moved up substantially and
needs of the whole economy, in
the public interest, and not the they also are higher than in the
late Thirties, despite a 12% in¬
needs of special groups or inter¬
crease
in
population.
Signs of
ests, whether they be economic
this improvement are everywhere
groups or political interests.
—the Volkwagens in West Ger¬
.We are not vassals nor the pawns
jof any vested interest.
We have many, the new homes in Britain,
demands flexibility.
...
It de¬
mands that actions be taken with

.

-taken

binding oath to

a

-interests

the

of

all

United

the

of

States

ability.
-purpose."

We

-our

to

.

people of

the

have

best

no

Western Europe

.

the

serve

perspective.

of

other

and

a

in

to

more

whole

eat

generation,

new

The

ropeans.

been thrown

idle

it

is

Federal

cifically

imagine

policy

concerned

of

prices
rowers

to

ever-

Reserve

issues

with
The

wares.

our

whose

is

are

that
spe¬

the
bor¬

tax-ex¬

empt and the merchants and buy¬
of those issues occupy only a
small corner of the huge money
market.
There is neither favor

hope is stirring

hearts of many West Eu¬

the

the defensive, and

the very real fear right after the
war

that

key

areas

now

are

they

might

like France

malice in the guidance of the
Reserve Board which is

^Federal
"the

servant

of

all."

rising

or

.proper profits

-merchants
be

and

selected

falling,

prices
there are

to be made by the
wise investments

by investors.




But

or

over

Italy is

in

This progress

of Europe was

varying

degrees

of

nations

other

the

of

Free

brought about by

trade serves as useful
as

now

we

background

consider

what

we

the

be

of all

goal

common

should

eventual

nations,
elimina¬

tion of these discriminatory prac¬
tices. This is

goal in which quite-

a

obviously the producers of many
a

As

States;

large stake.
matter

a

of

lems

United

the

in

items

key
have

the

and

the

his

of

fact, the prob¬

American

business

harm

that
in

exporter,,

will

the

come

absence

to«

of

too often are forgotten by

trade,

those concerned about tne impact
of

industries with
competi¬
arithmetic shows
only sell to other

imports

on

which foreign goods are
tive.

Yet simple

that we can
from should do in the future. For in a
the close of the war in 1945 until very real sense, we have arrived, lqnds an amount equal to what
1953 the United States exported at a crossroads in the determina¬ we;buy from them. For short in¬

World.

During

the

period

trade policy—indeed
in tervals, and on an emergency
a value tion, of
billion. During the same the determination of the entire basis, it may be otherwise; but
period we imported goods and complex of policies which shape basically if we cut back on our
services having a value of only relationships between our econ¬ imports, our exports also must he;
curtailed. Whom do we hurt in sor
$99 billion. The difference of $36 omy and those of other lands. The
Well, today more than a
billion was made up almost en¬ crisis of Western Europe is now doing?
fourth of our cotton, a fifth of our
tirely by U. S. Government aid largely behind us. We have low¬
and loans. In this time, however, ered tariffs substantially in
the textile machinery, almost 30% of
our tractors, and close to a fourth
the volume of exports that could last 20 years, and, as a result, our
be paid for by our imports con¬ purchase
of
goods
from other of our tobacco goes abroad, to>
a
few products that
tinued to rise, so that by 1953 Eu¬ countries has shown an encourag¬ name just

goods and services having
of $135

own

the Free World as a ing response. We may well ask,
largely earning their then, does this mean that we can

and

rope

whole

were

way

in trade with

now

us.

Now this great step

ward

hope for in 1948, have

every

a

forward to¬
balanced, self-supporting

drift

to

afford

relax

for

a

rest

on

oars,

our

perhaps even
while in the opposite

bit,

a

and

lean

heavily

on

demand..

foreign

Quite clearly the welfare of these
and other producers for export is

heavily

involved

eration of

our

in

consid¬

any

trade policy.

trade would have been impossible

direction?

revival
of trade, larger trade between the

if the United States had not pur¬

There

nations of Western

myself among them; nor, I have be achieved through trade—pro¬
been gratified to see, has Presi¬ vide the steam behind the steady
other nations could turn out more dent Eisenhower or a majority of pressure to reduce barriers against
economically than we. The dollar Congress felt that this would be exports. To date we have made
As you substantial progress. The various
value of our imports of raw ma¬ a wise course to take.
terials and other goods increased know, the President has followed quotas here and elsewhere that
by more than three-fourths in the a path recommended more than shut out or limit the import of

to

reason

in

stemmed

part from

the

the

with

rest

of

of

the

more

even

now

own

"dollar

r

trade

world.

Western

doubled

nations

their

Europe them¬

with

larger

trade

is

a

States; larger trade

selves;
United

about

Whether municipal bond
are

take

the

true

was

true

These results, which
bit as good as we had

gone.

ers

Tior

have

Communists

on

Mr.

Sproul's speech puts the
municipal bond market in per¬
spective. He makes us see how

throughout the

For the first time in

area.

What
also

the

since

1947.

has
What

encouraging, these
are

way.

gap,"

The total

Europe

largely
The

paying

so-called

about" which

we

sued

an

enlightened trade policy.

is

the

are

case.

.

those who think this
But

I

cannot

count

These

facts—coupled

with

realization that maximum
within

the

Free

World

the

strength

can

only

We let

goods flow into our coun¬
try which we needed and which

period from 1947 to 1953.
process

the

we

economic

bonds

World but added to

being. ; Our

In the

not only strengthened

own

the

Free

our own

well-

of

dependence

on

by a committee of dis¬ goods, including U. S. exports,,
citizens
headed
by have been cut back steadily. For¬
Clarence
Randall, Chairman of eign currencies since the war have
the
Inland
Steel
Company,
a moved gradually toward full con¬

a

year ago

tinguished

course

by which

the-barriers to - vertibility with respect to

one an—

Volume 181

other and

Number 5432

the dollar:

.

.

.

The Commercial and Financial Chronicle

(2441)

certain quotas that now discriminate against our exports. I should
add; however, that one exception
to this provision is the complex of
quotas designed to help agriculture. The continuation of these
has been found necessary in the
United States and elsewhere,
Obviously, to administer properly an undertaking as large and

market specialists.

organizational framework through

complicated

the

which the give and take of mutual

trade relations among 34 nations
which handle 80% of the Free
World's trade, some form of co-

West

German

lands

notably the

mark, the Nether-

guilder

and, most importantly, the British pound. The goal.
of currency convertibility has at
last come within sight.
But this
is

progress

not

persistence,
sistent

concession

It requires

easy.

adherence

policy and,

to

a

by no

least, the existence of

some

be worked

can

con-

means

form of

out

by

all the nations concerned.

Fortunately,
created

such

postwar

the

Free

World

mechanism in this

a

period

—

mechanism

a

through which it has managed to
achieve

a

great

deal

of

mutual

operative

Actually,

been

involving

supervisory body is

or

necessary.

has

GATT,

as

in

secretariat

a

existence

since

the

^rst days of the General Agreement in 1947-. But this secretariat

bas s0 ^ar existed on a temporary
and inadequate basis. The nations
under- which are parties to the General
stood by ?.the general public; yet Agreement, including the United
in my judgment it is of critical States, therefore have worked out
importance.- I refer to the Gen- a Plan to establish a more permaagreement and concession
matters.

has

It is

been

eral

trade

on

mechanism which

a

little

known

or

nent supervisory unit, called the
Trade which was organized in 1947 .Organization for Trade Coopera->
and to which 34 countries now be- tionThe President has strongly
long, including the United States, recommended to Congress that the
Agreement

Tariffs

on

and

=:United States join this body.
The .GATT and

OTC

In

The General Agreement on Tariffs and Trade, as well as the

pro-

posed

joining the Organization for

Trade Cooperation

undertaking

would

we

be

Andrew Jordan Back
Our

Per-

haps1 the

inevitable nickname of
the General Agreement on Tariffs
and;
te

Trade—"GATT"—has tended

make

people suspicious. Cerour public
officials, at any
rate, have tended to regard GATT
tain of

as

some

dangerous
In

no

explosive -and

weapon.

actual

Agreement
is

of

type

fact,
than

more

the

Tariffs

on

General

and

what

it

Trade

caution

Even

to

are

it be

common

in

It is the end

recent years.

of long

suit

and

that

careful

as

make.

As

more

than

have been possible if it had tackled the
job of
tariff reduction
piecemeal,

through

bilateral

country-by-country

gotiations.

ne-

Moreover, the ground rules set
under GATT to govern trade
relations serve a valuable func-

tion,

especially

States.
that

no

cut

simply

some

the

by

replacing

form

new

United

of

States

it

with

barrier.

For

this

has great
significance, since tariffs have not
been the
our

principal means by which
exports have been shut out of

other

countries.

gested, much

As

have

I

sug-

important have
been various types of quotas which
set

limits

more

on

the

quantity

of

United States goods imported. Under the terms of GATT new quotas
can't

be

goods

except

levied

cumstances.

nations

against

under

U.

special

Moreover,

member

pledged to press for
the elimination of quotas that alare

ready exist.

This

is

very

portant provision at the moment,
since the gradual disappearance of




23,

1955.

spending, would be important to not only the economy as
but also to the money markets. It is believed that the

serious setback to the

a

a

of

opment

cooperative

mo-

of the

the sale

arranee-

trade restrictions

of

other

countries,

in

result

which

contraction

a

would
world

of

result in

ments of nations.

The

the

truth

entire

a

developwould play

say,

hands

of

fabric

and there.

the

of

slightly increased number

that

international

point

structure

trade,

foreign

turned

in

interrelated
to

the

the

and

Our foreign
aid program

lands—all'are

all

are

nized

ity

fact

why I

shall

by

responsible

our

is

which

and more

more

of

That

a

of

is
a

continue

to

The

major-

follow

the
co-

see

a

trade
as
a

and

our

do, I foregrowth in our
foreign investment

This will

stronger,

a

we

certainly

more

secure

mean

and

May 20 offered to the public
$30,000,000 issue of one-year
consolidated collateral trust de¬
bentures through John T. Knox,
their fiscal agent.

a

America, for national strength in this day and age
depends on world trade,

These

debentures,

which

are

being offered at par, bear inter¬
est at 2.35% a year. The interest

payable with the principal at
maturity.
These debentures are
dated June 1, 1955, and will ma¬
is

With Marache Dofflemyre
"NCT"

^""ONIC'*)

LOS ANGELES, Calif.—Arnold
and
Fred
E.
Moore

Handelman

ture on June
,

The

proceeds from the sale of
will

primarily to redeem $40,-

000,000 of Central Bank for Co¬

operatives

this

second

issue

Francis

I. du

Pont &

Montgomery Street. Mr.
was
formerly for many

317

Miller
years

with Sutro & Co.

U.S. TREASURY

STATE, MUNICIPAL
and

debentures ma¬
June 1 and to finance
1%%

turing on
the bank's lending operations.

PUBLIC REVENUE

ing made with the assistance of a

of

group

security

bentures are the

SECURITIES

secured de¬

joint and several

obligations of the Central Bank
Cooperatives and 12 district

for

Banks
banks

Cooperatives.

for
are

chartered

The

under

the

provisions of the Farm Credit Act
of 1933.
They operate under the
supervision of the Farm Credit
Administration. The banks make
and service loans to farmers' mar¬
keting,

purchasing,

and

business

service cooperatives on terms par¬

ticularly

suited to their needs.

AUBKET G. Lanston
6c Co,
INCORPORATED

1, 1956.

these consolidated debentures
be used

of

These consolidated,

Banks for Cooperatives

13

a

prosperous

""■-"'C'"1

Co.,

dealers.

on

If

continued

well.

more

eco-

The

sale

consolidated debentures is be¬

of

nationwide

By 13 Banks for
Cooperatives

that

path

nomic relations.

making

$30,000,000 Offering

citizens,

of friendly and mutual
operation in our international

we

with

ated

pension funds have

reports that some of the state

the

recog-

confident

am

SAN FRANCISCO, Calif.—Wil¬
liam A. Miller has become associ¬

essential

strength

Ur'^d States and the Free World,

is

are

not too important commitments in the 3s, while
others have been taking on a few of the long-term 2V2S. There
is likewise evidence that private pension funds have been sellers
of the 3s and 3V4S, with part of these funds being put to work in
short Treasury issues and nongovernment obligations. The latter
includes bonds and preferred stocks.

been

Asia), and pur ne¬

olher

growing

This

There

helping bi/ild up

to

of Free

arc

to endanger

throughout.

our

(now
the

means

making a
of what are being termed "desirable

(Special to The Financial Chronicle)

Pension Fund Activities

economic cooperation is very delicate indeed.
To tear it apart at
one

the smaller

Joins F. I. du Pont!

-

loans."

estate

real

population of about 1,360,000.
:

<;

hand, there are reports that some of
banks with savings deposits have been

furnishes electric

to an area of approximate¬

portions of adjoining counties in.
Maryland and Virginia, having a

minor slowing down here

:•

approxi¬

ly 643 square miles comprising the
entire District of Columbia and

.

On the other

commercial

of the matter is

The company
power

are

though there have been signs of a very

Such

ments, needless to
directly into the
Communists."

projects estimated to cost
mately $26,000,000.

the favorable

equity market is still an item as far as the money mar¬
concerned, and even though the amount of credit being
used in the purchase of common stocks is not considered to be
excessive, there is not likely to be much abatement of the pressure by the monetary authorities as long as the stock market is
in the spotlight. Likewise, the instalment picture is not without
importance, either, as far as the future of the money market is
concerned. Mortgage lending continues at a very rapid pace, even

the part

on

other

funds will be used, after
retiring $3,200,000 of bank
loans, to finance 1955 construction

The

kets

and

bonds

mortgage

company

whole

developments abroad, which have been on

from

stock together with pro¬

ceeds from the sale of $10,000,000

Money Market Factors

ments in defense of the free world,
It could lead to the imposition of
new

Proceeds

upon

side, have been responsible in some measure for the slightly better
feeling and the rallying tendencies which have come now and
then in the government market.

mentum which has been generated
toward that objective. It would
strike a severe blow at the devel-

im- joined the staff of Marache^ Dofflemyre & Co., 634 South bp ring
Street, members of the Los Anthe dollar shortage in Europe and geles Stock Exchange.
Mr. Hanelsewhere should enable our coun- delman was formerly with Daniel
try to press for the elimination of D. Weston & Co.
a

May

record

of

held

shares

as

first

S.

cir-

:

consideration

first

for

the United
They provide assurance
country can offset a tariff

stock

defense expenditures, because a reduction in these items,
which still constitute about two-thirds of the Federal Govern¬

ivestment

up

is offering the common
through warrants expiring
on June 7, at $19.50 per share on
the basis of one share for each 10

company

upon

regional realign-

would

511,660 shares of common stock to
its
common
stockholders.
The

"Failure to assume membership
in the Organization for Trade Cooperation
would
be interpreted

back to United

result of this general

a

not without

Lemon

investment banking group

common

could

bargaining. the United States undoubtedly has gained .considerably

situation is also

& Co. Inc. and
& Co. head au
which
is "underwriting an offering by
Potomac
Electric Power Co. of
Read

Dillon,

Johnston,
-

government obligations. Any abatement of the
Cold War would most likely have its principal immediate effect

along the

truly reciprocal, with other countries matching the concessions the
United States has been
willing to

Offering Underwritten

-

the money markets are concerned, and improved rela¬
between World Powers would not have un unfavorable

far

tions

sharo setStates exports. It

nation has
benefited at the expense of another. Tariff reductions have
been

Potomac Elec. Power

bear market.

Impact of Lessening World Tension
international

The

Jordaa.

Mrs.

-

influence

trade and constitute

one

a

*

month's vacation

"Tex" is boosting Honolulu for
climate, scenery, and people.

As President Eisenhower, himself,
has put it, and here I quote,

negotiathere has

no

or

a

with

Honolulu

at

expected, since prices generally back and fill, whether

bull market

Andrew A. Jordan

Avenue, after

for funds.

war.

take all

In the
been give and
so

re-

....

not look as if

However, it is believed by certain money market specialists that
there will be some relief from the pressure of the powers that be
in the future to enable the Treasury to take care of its needs

the Organization for Trade Cooperation this might well prove to
be a decisive step toward dissolvinS the Pattern of trade coopera¬
tion which, with our help, has been

process

tions.

line,

consent

to be a minor betterment in the

market is marking time, awaitwhich are not expected to crystalize in the
very near future. It seems as though the demand for funds is
going to continue strong for a while and this, along with the
credit limiting and interest hardening operations of the monetary
authorities, are not exactly conducive to the making of important
commitments in the more distant maturities of government bonds.

tute

duced tariffs by

appears

.

Optimism

developments

will follow in trade relations with
another. To
my way of thinking GATT represents a real step
forward in cooperation
among nations in vital matters of trade. In
fact, the General Agreement is the
chief way in which the
United
States and other nations have re-

one

.

.

It is evident that the money

ing

recent

tariffs

.

though there

be
a

part of this country in the efforts
to expand trade. It would consti-

the

1221 Fourth

that

important developments in the broad policy of
the powers that be, in the near future, which would bring about
a
more
optimistic feeling towards government securities.
The
fact that quotations of Treasury obligations have been able to
rally here and there, has not been unfavorable to the money markets, but this represents mainly technical developments which

they will
charge and the ground rules they

says—it

agreement among 34 nations

Co.,

A.

witfe

both

there will be any

ment

an

regarding

,

attitude of specialists in the money markets, it does

throughout the free world as a
lack of genuine interest on the

is

&

desk

and

.

a coop-

carefully built up since the

Witter

his

at

money

a

No Present Cause for

erati.ve arrangement in which all

s0

back

is

market

somewhat improved feeling, among certain

spite of

governments is very thin and professional, which means
they are very susceptible to not important movements in
directions.
,
'
i
j

General

ment, as well as of the
tion for Trade Cooperation.

Wash.—Andrew

The time has not yet arrived, however, when
uncertainty which is typical of a bear market
in Treasury obligations is being dissipated. However, it appears
as though the current thinking does give some encouragement to
the opinions that the worst of the decline in quotations of Treas¬
ury obligations has already been seen.
The near-term government issues continue to be the impor¬
tant ones because this is the only section of the market in which
there is confidence, even though rates have shown a tendency to
fluctuate a bit. The market for the intermediate and longer-term

I say this with care, behere, too, there has been
Agree-"some misunderstanding.
If the
Organiza- United States were to fail to join

the

Jordan
Dean

Unfortunately,' there appears to hand.
some
misunderstanding of the ' cause
of

At His Desk

Governments '

A defensive attitude still prevails in the government
in

recommending that the United parties to the General Agreement
States join, will be under
public 0n Tariffs and Trade would have
discussion in the weeks ahead, an administrative and supervisory

functions

on

By JOHN T. CHIPPENDALE, JR.

is

be

Reporter

SEATTLE,

commitment,

no new

would be agreeing to

Organization for Trade

new

Cooperation, which the President

s

33

15 BROAD

ST., NEW YORK S

WHitehall 3-1200

Ashton Adds to Staff

SSI So. La Salle Su

Braidwood is

Mich.
now

—

George

C.

with Ashton &

Co., 15315 West McNichols Road.

45 Milk St.

CHICAGO 4

(Special to The Financial Chronicle)

DETROIT,

BOSTON 9

ST 2-9490

HA 6-6463

Commercial and

The

34

Financial Chronicle

Thursday, May

.

.

.

26, 1955

(2442)

Indications of Current

latest week

other figures for the
either for the

statistical tabulations cover production and

The following

Dates shown in first column are

month available.

or
i

week

Business Activity
IRON

§96.3

May 29

§2,324,000

Equivalent to—
and castings (net tons)

Steel ingots

oil

Ago

Month

-

output

;

(bbls.)

Kerosene output

(bbls.)

fuel oil

Distillate

Stocks at refineries, bulk terminals, in
Finished

unfinished

and

(bbls.)

gasoline

1

at

fuel oil

Distillate
Residual

(bbls.)

at—

oil

(bbls.)

at

fuel

transit, in pipe lines—
(bbls.) atMay
May
—May
May

Re/enue

freight received lrom connections

(no.

CONSTRUCTION

ENGINEERING

—•

2,177,000

2,019,000

10,307,000

10,841,000

8,953,000

7,530,600

8,026,000

U.

22,195,000
70,551,000

19,451,000

175,750,000
21,590,000

63,360,000

>

-

9

44,996,000

May 14
of cars) —May 14

757,333
651,343

740,935

674,389

677,540

645,574

606,292

of

OF

lignite (tons)J
Pennsylvania anthracite (tons)

DEPARTMENT

589,362

v

$475,705,000

$458,746,000

19

324,471,000

286,442,000

$382,790,000
233,676,000

19
19
19

151,234,000

172,304,000

149,114,000

I#C:—215

$35,119,569

117,460,000

116,208,000

116,194,000

80,483,000

33,774,000

56,096,000

32,920,000

8,920,000

8,690,000

8,445,000

394,000

385,000

418,000

AVERAGE

May 14

108

134

103

97

West

Central

Mountain

-

(in

output

York

INDUSTRIAL)

AND

DUN

—

York

New

Pig iron

lb.)

(per

1

(per gross ton)

METAL PRICES

Electrolytic

(E.

Lead

May
May
—May
May
May
-—May

u.

Louis)

(St.

at

at
at

—

(East St. Louis)

Zinc

at

MOODY'S BOND PRICES

4.797c
1

$56.59
$28.08

number

35.775c

38.050c

91.375C

92.125c

15.000c

15.000c

14.000c

14.800c

14.800c

14.800c

13.800c

12.000c

12.000c

12.000C

10.250c

99.50

$20,568,000

4,932,000

4,574,000

10,765,000

11,972,000

12,030,000

6,450,000

4,468,000

3,692,000

2,229,000

2,916,000

1,648,000

$35,968,000

$41,209,000

$42,512,000

13,417

10,272

34,700,000

37,150,000

28,478,000

1,640,000

•1,910,000

1,953,000

6,235,824

*5,394,166

5,144,689

6,130,731

*5,326,969

5,109,543

105,093

*67,197

35,146

2,525,662

♦2,613,521

2,718,856

,

liabilities

Total

—

BUSINESS INCORPORATIONS

UNITED- STATES-^-DUN
INC.—Month of April
r
*•

11,756
■

_•

.

Group

*

Group

'

■■

.

'■ '•

V

-

:

'•

"

.

(BUREAU OF MINES)—Month

COAL OUTPUT

96.65

97.00

96.32

108.88

108.88

109.42

110.70

112.37

112.93

115.43

Bituminous ,caal and J.tgnite

110.34

110.34

110.70

112.5c

Pennsylvania^finthrasjte

108.88

109.06

109.60

110.34

104.14

104.14

104.48

104.66

May 24
May 24
May 24

Baa

IN THE
BRADSTREET,

(NEW)

&

May 24
May 24

.

Industrials

$16,921,000

liabilities

May 24

A

Group

975

3,871,000

May 24

__

Aa

Utilities

66

1,038

$12,653,000

112.19

Public

66

903

May 24

U. S. Government Bonds

92

66

-

93.500c

15.000c

535

108

106

82

520

.

Manufacturing liabilities
Wholesale* liabilities

29.675c

200

'

119

.

29.700c

35.800c

18
18
18
18

35.700c

91.375c

18
18

35.700c

55,063,895

225
V

93
484

Retail-liabilities

35.700c

18,831,505

•

154

;

Total number

4.634c

$36.00

$34.67

36,676,458

BRADSTREET,

&

April:

numJjpr

Commercial service number

DAILY AVERAGES:

Average corporate

Railroad

$434,824,973

CommerctaKservice liabilities-

Straits tin

(New York)

248

$56.59

4.797c

$56.59

$34.67

copper—

refinery at
(New York)

Export

$483,260,516

number

Constructlori

Domestic refinery at

Lead

$471,233,165

Construction numbet;

QUOTATIONS):

M. J.

&

4.797c

$56.59

May 17
May 17
May 17

i

,

(per gross ton)

Scrap steel

Wholesale

8,373,000

204

233

226

May 19

IRON AGE COMPOSITE PRICES:

Finished steel

79,781,772

$542,838,099
59,577,583

$439,888,868

City

FAlLURESJ^DUN

BUSINESS

Retail

&

BRADSTREET, INC

92,135,424

$521,173,029
49,939,864

City

Outside

INC.—Month of

9,697,000

9,673,000

9,730,000

May 21

kwh.)_,

000

(COMMERCIAL

29,963,928

93,209,258

.»

„

Total United States.

EDISON ELECTRIC INSTITUTE:

FAILURES

96,005,69 1
42,651,962

23,288,665

^

Manufacturing
Electric

46,303,002

—

:

———

Pacific

New

100

=

110,066,444
43,536,082
105,167,335
71,770.239

7,149,000

395,000

$24,059,033

106,256,795
54,570,182
93,021,764

22,454,000

May 14
May 14

-

«

$22,232,353

81,747,900
44,085,131
102,254,681
95,164,82 3

—

Central

South

227,510,000
102,937,000

$178,914,000 $154,759,000

DUN &
CITIES—Month
—

Atlantic

Middle

$330,447,000

19

INDEX—FEDERAL RESERVE

SALES

STORE

SYSTEM—1947-49

7

April:—
?
England —i

New

East Central

May
May
May
May
May

—_it.

and

200,740
31,702

$158,289,000

VALUATION

PERMIT

BRADSTREET,

S. BUREAU OF MINES):

(U.

coal

-Bituminous

70,258
70,618

90,837
60,057

GOVERNORS OF
SYSTEM—Month

(in thousands)

April

BUILDING

ENGINEERING

:

COAL OUTPUT

89,179
94,507

65,531,000

44,741,000

.

Federal

83,804

(tons of

output all grades

THE FEDERAL RESERVE

43,305,000

and municipal

State

2,833

-~t''
pounds)

DEBITS—BOARD

BANK

171,134,000
22,951,000
72,710,000
44,161,000

construction

Public construction

4,038

2,750

INC.—Month of

Shipments (tons of 2,W)0 pounds)-—_
99,896,
Stocks at end erf period (tons);—74,745
Unfilled orders at end,of period (tons)
65,127

13
13
13
13

construction

S.

Private

Ago

8,136,000

181,864,000

NEWS-RECORD:
Total

Year

Month

INSTITUTE-

South Atlantic
CIVIL

Previous

freight cars delivered—

smelter

zinc

2,000

of

(number of cars)

freight loaded

24,050,000

Slab

174,243.000

—

Revenue

24,017.000

2,075,000

RAILROADS:

ASSOCIATION OF AMERICAN

7,020,000

'

2,070,000
10,040,000
7,470,000

May 13
May 13

——

6,428,250

7,131,000

23,959,000

24,416,000

(bbls.)

Residual fuel oil output (bbls.)

Kerosene

May 13
May 13

—

6,828,450

7,029,000

6,681,050
117,061,000

—

output

6,687,550

May 13

-

of quotations, are as of that dates

*

ZINC INSTITUTE

April:

(bbls. of

May 13

each)
stills—daily average (bbls.)

Crude runs to

Gasoline

of April:

New domestic

1,698,000

2,307,000

'2,338,000

&R

AMERICAN RAILWAY

71.2

95.6

cases

Latest

Ago

AMERICAN

output—daily average

condensate

and

42 gallons

or, jin

-

PETROLEUM INSTITUTE:

AMERICAN
Crude

Year

'96.9

May 29

capacity)

operations (percent of

Indicated steel

that date,

on

Month

Month

Week

Week

STEEL INSTITUTE:

AND

month ended

Previous

Latest
AMERICAN

or

107.27

107.27

107.44

109.42

109.42

109.42

109.97

110.52

109.97

109.97

110.52

of

Aprils
(net tons)

(net tons)

COKE-(BUREAU OF MINES)—Month of Mar.:
Production

(net tons)

Beehive coke

111.81

tori2Tj_

(pfet

coke

Oven

—

(net tons)
—
—
at end of month (net tons)

Oven coke stock

MOODY'S BOND YIELD DAILY AVERAGES:

May 24

2.75

2.72

2.77

2.53

May 24
May 24

3.23

3.23

3.20

3.13

3.05

3.04

3.01

2.88

May 24

3.15

3.15

3.13

3.03

—May 24

3.23

3.22

3.19

3.15

May 24

3.50

3.50

3.48

3.47

May 24
_.May 24
May 24

3.32

3.32

3.31

3.20

3.20

3.17

3.14

8. Government Bonds

U.

Average corporate
Aaa

——..

.—

.

:

—«

Aa
A

——

————

—

.

Baa

_

Railroad

Group

Utilities

Public

Industrials
MOODY'S

Group

Group-

NATIONAL

PAPERBOARD

Orders received

i_,

-

INDEX

COMMODITY

of

3.17
401.7

3.14

3.07

400.4

,

243,958

372,718

235,891

May 14

274,269

271,427

266,031

:

AVERAGE

=

252,436

97

97

92

514,762

417,905

May 20

106.73

106.79

107.07

108.13

DEALERS

100

EXCHANGE

SPECIALISTS

AND

SECURITIES

—

Odd-lot sales by dealers

Y.

N.

EXCHANGE

value

Customers'

gas

14,700

7,700

**

5,900

5,200

181,600

217,000

172,400

136

135

123

137

137

124

101.1

101.2

104.8

$201,474,000

—■«.————

$176,943,000
51,320,000

$196,916,000

—

——.—

COMMISSION—
Railway Employment at middle of
-•SftflrW (193&*4MfcAvtel&ge
100)

$66,416,081

$71,524,445

$64,645,879

$52,036,873

1,122,658

1,302,009

1,185,730

1,110,720

7,697

7,078

8,451

8,162

1,114,961

1,294,931

1,177,279

$65,679,789

$57,924,956

$50,707,069

i

Apr. 30

Short sales

303,440

398,430

Apr. 30

320,220

358,470

Apr. 30

303~,440

398~430

320~220

3~5~8~470

Apr. 30

.

URANCE-—Month of March:

1,102,558

$56,990,244

I^TSURA^T&E—BENEFIT PAYMENTS TO
LICYHOLjPEJRS— INSTITUTE OF LIFE

LIFE

by dealers—

sales

58,200

9,300

,Index,, of

1,090,970

Apr. 30

Number of shares—Total sales

Other

1,274,329

Apr. 30

sales

Round-lot

1,369,366

Apr. 30

^

Dollar value

Round-lot

63,900

INTERSTATE COMMERCE

1,246,390

Apr. 30

other sales

sales

53,018,598

(units)

Unadjusted -£•*£_,

Apr. 30
Apr. 30

Odd-lot purchases by dealers (customers' sales)—
Number of orders—Customers' total sales
short

51,277,150

»

ASSOCIA¬

(units)
"range shipments (units)

Seasdtmily SdJtfSted

COMMISSION:

*

Customers'

$596,986,000

INDUSTRIAL PRODUCTION—BOARD OF GOV¬
ERNORS
OF
THE
FEDERAL
RESERVE
SYSTEM—I'M7-49=100—Month of April:

purchases)—t

(customers'

33,034,637

$660,153,000

STOCK

—1

Number of shares

Dollar

ON

'*

92

611,141

.)••:

$655,779,000

shipments (units).

furnace

Domestic

578,264

...

38,197,992

operated boiler shipments

STOCK TRANSACTIONS FOR ODD-LOT ACCOUNT OF ODDLOT

>'

51,361,703

conversion burner shipments

Gas

May 14

OIL, PAINT AND DRUG REPORTER PRICE INDEX—
1949

' v

TION—Month of April:
Gas-fired

242,970

.May 14

at end of period

.

37,654,269

BjSustomers

Number

GAS APPLIANCE MANUFACTURERS

438.9

May 14

(tons)

"

y-'

consumers—

(000's omitted)

uitlipa^e customers—month of

from

Revenue

ultimate

to

oL February

Month

Gas

activity

Unfilled orders

3.17

sales

Kilowatt-hour

ASSOCIATION:

(tons)

Percentage

,

399.1

'

May 24

(tons)

Production

3.20

ELECTRIC INSTITUTE:

EDISON

432,380

421,850

413,560

—»;»■■

endowment^*

Matured

5g'216 000

tmOk

33,632,000

86,702,000

73,883,000
75,285,000

79.293,000

102,651,000

divide^

10,241,000

39,210,000

$424,607,000

$461,416,000

£10,356,000

£10,254,000

£9,338,000

17.612,000

ZZ'ZZZZZZ

——

Surreridervames

355,060

purchases by dealers—

Number of shares

49,479,000

38,307,000

$498,058,000

Disability payments^*-Annuity payments

8,869,000

86,805,000

_^-SZtr

TOTAL ROUND-LOT STOCK SALES
»

EXCHANGE

AND

FOR ACCOUNT

Total round-lot

ON THE N.

ROUND-LOT STOCK

OF

MEMBERS

Y.

STOCK

TRANSACTIONS

NBW^^ITABHWSU?S/JN

GREAT BRITAIN—
MIDLAND BANK ""LTD.—Month of April

(SHARES):

sales—

—■«'»i,

-i i

Short sales

Apr. 30

533,740

569,080

574,860

Other

Apr. 30

12,830,950

14,747,530

14,275,030

12,071,290

Apr. 30

13,364,690

15,316,610

14,849,890

12,567,130

j

495,840

sales

Total sales

TRANSACTIONS

BOUND-LOT

ACCOUNT

FOR

OF

MEM¬

Transactions
Total

of

specialists in stocks

in which registered—

purchases

Apr. 30
Apr. 30

302,850

335,390

332,690

Apr. 30

1,432,410

1,545,120

1,428,140

1,077,430

Apr. 30 '

Other transactions initiated

1,735,260

1,880,510

1,760,830

1,323,250

on

360,850
31.000

Total

Apr. 30

315,620

330,740

470,910

375,780

operating reventtes.
operating expenses—
Operating ratio
Z*L—

Apr. 30

340,020

364,440

407,810

406,780

Taxes

Apr. 30

639,229

596,625

532,661

437,660

Apr. 30

106,330

98,880

89,100

Apr/30

658,033

643,524

573,701

401,130

Apr. 30

764,363

742,404

662,801

456,180

Apr. 30

2,712,259

2,613,635

2,664,051

2,070,790

Apr. 30

433,580

467,970

458,690

331,870

2,372,751
2,831,441

1,854,340

Net

#

purchases

Apr. 30

Total sales

(1947-49

=

SERIES

—

U.

S.

DEPT.

2,406,063

2,519,384

Apr. 30

sales

2,839,643

2,987,354

2,186,210

:

ESTATE: FINANCING
IN
NONFARM
OF U.
S. r- HOME LOAN
BANK
BOARD—Month-6f*March (000"s omitted):

All

loan associations
companies1.

and

Savings

Insurance

Bank and trust
Mutual

"ZZZZZZZZZZZZZZZZZMay

17

91.7

A_May 17

103.0

111,

-

'92.3

92.1

other than farm

and foods.

102.4

figure.




77,000,000

$927,627

-

78.52

$73,783,955.
66,604,264
46,000,000

$81,846,577

$702,007

$666,335

69,105,788

50,000,000

173,867

150,944

123,583

458,034

365,144

335,343

133.904

115,786

102.773

302,550

228,138

241,198

458,630

395,683

314,287

$2,454,612

$1,957,702

$1,783,519

$29,872,000

$18,878,300

—-

:

1

companies

savings banks

institutions
.

.

107.

84.1

85.2

83.4

May 17

115.7

115.7

115.8

^Includes 611,000 barrels of foreign crude runs. §Based on new annual capacity of
Of Jan. 1, 1955, as against Jan. 1, 1954 basis of 124,330,410 tons.
fNumber of orders not reported since introduction of Monthly Investment Plan.
'Revised

97.733,233'

627,577,859

.

...

100.

103.3

.May 17

commodities

$793,305,586

AREAS

.

110.3

110.4

110.3

Meats

$93,921,574

77.83

REAL

Miscellaneous lending

100):

foods-

612,02^;9^
74.17

Individuals

OF

commodities-

products

'•

operatffa# income before charges
chajges (estimated)
—:■

railway

Commodity Group—

Processed

—

Net 'Income after

for account of members—

Short sales

NEW

$724,335,469
564,101,448

55,050

floor—

^

PRICES,

78

$825,160,081

Total

36,900

Total sales

Farm

—

377,030

33,700

off the

sales

81

RRs.)—Month

301,600

,

Total round-lot transactions

27,562,000

(AS¬

OF-AMERICAN

24,400

Short sales

—

SOCIATION

15.202,000

j/r-

EARNINGS CLASS I ROADS

RAILROAD

322,540

Total purchases

LABOR

.

i

Other transactions initiated

All

.

L

Total sales

WHOLESALE

.i

Apr. 30

sales

Other

..fflBi,''

16,895.000

13,314,000
23,436,000

78

Shipments TrotB mHts*<barrels)-z——
EBifiks -fat end of month—barrels)—,—
Capacity'"bsfed _.*i—

20,231,000

13,806,000

27,017,000

—

Apr. 30

purcuases

Total

(barrels)

:,vl March:

the floor—

Short sales

Other

1,272,280

_

sales

Other

1,754,360

245,820

Total sales

a wear

1,715,410

-

Short sales
Other

1,750,490

MINES)—

rC! on £tf of' FSWu ary *
Production

BERS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS:

(BUREAU OF

CEMENT

OB.Tt.ANJ>

101.
114

125,828,310 tons as

Total

———

TREASURY
RECT
r

OF

Net

U.

MARKET.
AND

^TRANSACTIONS IN DI¬
SECURITIES

GUARANTEED

S. A.—Month of

purchases

♦Revised.

April:

-^seSS

"Being revised on

$2,937,500

basis of new data.

Number 5432

181

lume

.

.

Continued from page

steers. Lower in
tea and hogs. ,
The index represents the sum total of the price per pound of
31 raw foodstuffs and meats in general use and its chief function
is to show the general trend of food prices at the wholesale level.

barley, hams, bellies, sugar, cottonseed oil and
price were flour, wheat, corn, beef, lard, coffee,

result of feteelworkers'
weekly reports.
/ ,
'"•This push for deliveries is strengthening the merchant pig
on business, which for a long while has lacked bounce.
Because
f slack demand, pig iron prices did not rise last summer when
teel prices went up after a wage increase.
Since then, iron ore
rices have risen, and the iron and steel business has strengthened,
oundries think a price rise on pig iron is a sure thing after the
coming wage negotiations, continues this trade magazine.
;:
:
One group pressing for mill shipments but not for the same
reason
as most consumers is
canners.
They want tm plate and
at the same time are trying to protect themselves against the offchance of

a

the peak

near

of the fruit and vegetable

Week to

the corresponding date a year ago.

Early buying of the bread cereal reflected short covering
and relatively small stocks of free wheat in the Chicago area.

less

ings about equal to current demands of processors.
was less active with prices trending slightly

for oats

Trade

American

The

.

,

Steel

and

Iron

■

2,324,000

124,330,410 tons

+ ■'.v^

of

week's

This

firmness

Early

profit-taking

was

liquidation influenced
of the cotton belt.

and

in the 14 markets totalled 137,300 bales.
largest weekly volume in two months, and
compared with 48,200 bales a week earlier and 63,200 two weeks
ago.
Activity in cotton textiles during April was limited and
prices for some kinds of gray goods declined slightly.
Trade Volume Lower for Week But 5 to

57,000,000 kwh. above' that of

Than

actual output stood- at 9,673,000,000
1,357,000,000 kwh., or 16.2% above th#comweek and 1,717,000,000 kwh. over the likV week

In

:

;v',+■ ./.v.j'':•./:+

Loadings Advanced Further in Latest Week
With

roads.

1954

f

'

<&■

r-j ",f'

to

!

207,452

units,

drop

amounted

week's

798 cars, and truck output by 18 vehicles during the
week. In the corresponding week last year 126,50Lcars and 22,171
trucks v/cre assembled.
r

reported there

Last week the agency

States.

were

■

and

and

dollar volume

above

a

year

trade in the week ranged
according to estimates by Dun

and Northwest +8 to +12.
household items continued
Case goods, refrigerators, washers and

a

year

retail

led

ago.

sales

in

this

category,

with

many

consumers

a

week

ago

Department store sales on a country wide basis as taken from
Board's index for the week ended May 14,

like period last year. In the preced¬
rise of 9% was registered from that
of the similar period of 1954, while for the four week's ended
May 14, 1955, an increase of 9% was recorded. For the period Jan.
1, 1955 to May 14, 1955, a gain of 7% was registered above that of

*•

May

week

7,

1955,

a

1954.

Retail

trade

volume

in

New

York City the past

week ad¬

>

vanced slightly over the

Business Failures Hold to Lower Course
■.«-

r

i

ward

trend

to

like period a year ago aided by favorable

down¬
226 in the week ended May 19 from 233 in the

■

According to the Federal Reserve Board's index department
store sales in New York City for the weekly period ended May 14,

that of the like period of last year. In
the preceding week May 7, 1955, an increase of 3% was recorded.
For the four weeks ending May 14, 1955, an increase of 3% oc¬
curred.
For the period Jan. 1, 1955, to May 14, 1955, the index

in 1939 when the toll was 289.

recorded

Failures involving

.

.

$100,000,

as

against 12 last week.
-

wholesale food

price index,

compiled

street, Inc., turned slightly downward last week

by

low for the year

$6.35.

rise of 1%

from that of the corresponding period of

Corporation
Opens NYC Office

,

following the mild




13.8%.

cars.

members of the offering

Other

include: R. W. Pressprich &
Co.; L. F. Rothschild & Co.; Bax¬
ter, Williams & Co.; Freeman &
Co.; Gregory & Sons; Ira'Haupt
& Co.; The Illinois Co. Inc.; Wm.
E. Pollock & Co., Inc.; McMaster

group

Co.

Hutchinson &

Penn Oixie Cement

•

Offers

Capita! Stock

Penn-Dixie Cement Corp. is

of¬

rights

to
of

fering

stockholders

its

361,282

for

subscribe

shares

stock (par value $1) at
share on the basis of
one new share for each six shares
held of record May 25,* 1955. The
capital

$27.75

per

offer, which expires at the close
of business June 30, 1955 is being
underwritten

Dominick

by

&

Dominick and associates.

proceeds from the sale of
capital stock will

The

additional

this

added

be

to

company's cor¬

the

porate funds, with about $8,000,000 to be used to retire outstand¬
ing indebtedness to banks and the
remainder
to augment working

capital.
Giving effect to. the current fi¬
nancing, capitalization will con¬
sist
of* $550,000
in
notes and

shares of capital stock,

2,528,971

$1.

Uranium Sec. Dealers
Form Naf'i
Uranium

The

Association,

a

Group

Security Dealers

national

organiza¬

tion, has been formed to act as a
clearing house of information on
uranium financing for the benefit
of its members and to work out a
code

fair

of

dure

to

practice and

proce¬

of the
Commis¬
State regulatory bodies.

meet the approval

sion' and

was
made by
President of the
new Association,
which was
formed as a result of a meeting
of uranium security dealers at the
offices of Gearhart & Otis, New
York.
The
Association will be

Announcement

temporarily located at Tellier &
Co., 1
Exchange Place, Jersey
City,
New Jersey.
G. Everett
Parks,
Hunter
Securities, and
Herbert E. Teden, Teden & Co.,

Sutro Adds to Staff

is Secretary
The

more

tending

and Treasurer.
than 60 dealers

the organizational

at¬

meet¬

ing included representatives from
Denver, Colo, and Boston, # Mass.
Salt Lake
City brokers sent a
to

their

cover

which

The
used

(Special to The Financial Chronicle)

Vice-Presidents and A.
of Tellier & Co.,

are

Henry Fricke, Jr.

dealer.

The index for May 17 fellTo $6.37, a new
and the lowest since April 14, 1953 when it was

It compared with $7.39 a year ago, or a drop of

locomotives, and 200 all steel box

check

Parker

Dun & Brad-

upturn of a week ago.

equipment

less than

not

cost

fees,

-

Wholesale Food Price Index Strikes New Low for Year
The

a

previous week and 211 last year.

ities in excess of

•

1955, advanced 2% above

1954.

liabilities of $5,000 or mory dipped to 189

A mild decrease
also appeared in small casualties,
those with liabilities under
$5,000, which declined to 37 from 42 a week ago* but continued
even with their 1954 level.
Fourteen concerns failed with liabil¬

from 191 in the

estimated to
$6,450,800; two
diesel-electric freight locomotives;
21
diesel-electric
road-switching

railroad

Inc.,

shopping weather.

•

industrial failures continued, a mild

preceding week, Dun & Bradstreet, Inc., stated. This dip brought
casualties below the 248 which occurred a year ago, but they re¬
mained above the 156 recorded in the comparably week of 1953.
Jn relation to the prewar level, mortality was 22% lower than;
■

by

Walter F. Tellier,

ing

the previous week Dominion plants

Commercial and

secured

of retail
ago,

1955, advanced 11% from the

30,963 trucks made

and 2,680
built 10,669 cars
2,809 trucks, and for the comparable 1954 week 7,859 cars
1,489 trucks.
iIn

be

to

the following new standard-gauge

par

the Federal Reserve

Canadian output last week was placed at 10,265 cars
trucks.

is

issue

Securities and Exchange

v."

This compared with 30,981 in the previous

week and 22,171 a year ago.

The

tinued to rise moderately.

by

in the United

authorization of the

the

to

Interstate Commerce Commission.

in the seven-day period ended on Wednesday.
Orders were well above the level of the similar week in 1954,
as
the demand for clothing, textiles and household goods con¬

Last
week

above

than

output of 816 units, states "Ward's."
i:
week's car output declined below that pi the previous

a

9%

to

sections of the country.

making replacement purchases. The buying of air conditioners
lagged, but outdoor furniture and barbecue equipment were more
popular.
The dollar volume of wholesale trade edged slightly higher

below-the preceding

trucks

markedly higher than in
low temperatures

was

+9; South and Southwest +7 to -j-11
As in the past few weeks, sales of

driers

week-ended May 20,
1955, according to "Ward's Automotive ReportsJ.. assembled an
estimated 176,489 cars, compared with 177,287
(Revised) in the
previous week. The past week's production total of Jears #nd
to

ject

1954

well

automobile industry for the latest

The

contrib¬

Bradstreet, Inc.

ing

Declined the Past Week

U. S. Automotive Output

special night

Regional estimates varied from the correspond¬
levels by the following percentages: East +2 to +6;
Pacific Coast +3 to +7; Midwest +4 to +8; New England +5

&

r:+++.,■'■

:

5

many

total

The
from

the week ended May 14, 1955, totaled 757,333
an increase of 79,793 cars, or 11.8% above the corresponding'
week, but a decrease of 22,472 cars, or 2.9% below the corre¬

sponding week in 1953.

as

week of 1954, when heavy rains and

same

prevailed'in

American Rail¬

sales

of

volume

dollar

The
the

Loadings for
cars,

such

Automobiles, furniture and other hard goods
significantly to total retail activity.

uted

•

revenue

"v;+:: ;•

■

at

J'

Ending of Labor Trouble

preceding week, according to the Association, of

9% Higher

Ago

promotions,

widespread

of

Year

ing week.

freight for the week ended May 14,1955,
during which labor trouble on several railroads in the Southern
District came to an end, increased 16,398 cars, or J.2% above the
Loadings of

spite

a

openings and "Downtown Days," retail trade in the period ended
on Wednesday of last week was slightly lower than in the preced¬

in 1953.

Car

rains in

favorable

sales

the previous week, when the

1954

by

This represented the

kwh.; it increased

parable

attributed to moderate price-fixing and
easiness shown in late dealings reflected

of the dry areas

some

;

-

output increased

a

short covering, while the

industry for the week ended Saturday, May 21, ,1955,
estimated at 9,730,000,000 kwh., according to the Edison Elec¬

-

market developed a firmer

sugar

raw

active with prices stronger.
slightly easier in slow trading. Hog values declined
at the close after holding firm most of the week on sustained
broad shipping demand.
Cotton
prices moved irregularly in a narrow range and
finished slightly lower for the week.
*

and power

-

ru¬

offered

are

Demand for world sugar was also

Further Gains in the Latest Week
electric energy distributed by the electric light

tric Institute.

irregular with prices

certificates

The

prices scaled to yield from 2.50%
to 3.125%, according to maturity.
Issuance of the certificates is sub¬

improved demand from refiners in the

Reported

was

1970, inclusive, is being made to¬
by a group headed

day (May 26)

Lard trended

Electric Output Made
The amount of

and

serial

3%

series

1955," second

by Halsey, Stuart & Co. Inc.

sugar.

ago

of Jan. 1, 1954.

as

nervous

was

under¬
South and
seasonal pick-up in the demand for refined

domestic

expectations

the actual weekly- production
was placed
at 1,698,000 tons or 71.2%. The operating rate is not
comparable because capacity was lower than capacity in *1955.
The percentage figures for 1954 are based on annual capacity of
A year

tons.

market

coffee

aided by

tone

96.9% (revised) and 2,338,000 tons a week ago.
The industry's ingot production rate for the weeks in 1955 is
based cn annual capacity of 125,828,310 tons as of Jan. 1, 1955.
For the like week a month ago the rate was 95.6% and pro¬
duction 2,307,000

and 50,-

The

Institute announced that the

steelmaking
of the entire industry will be at an average of 96.3% of
for the week beginning May 23, 1955, equivalent to
tons of ingots and steel for castings as compared with

capacity

45,000,000 the previous week,

working lower under the influence of various unconfirmed
mors from Brazil regarding plans to stabilize prices.

this year,

operating rate of steel companies having 96.1% of the
capacity

Board of
of about

The

the good

easier. Pur¬

grain

40,000,000 bushels, from
000.000 last year.

inventory-building is inspired by the possible price increase
in business. Buyers are coritinuing to order,

The demand

and soybean futures on the Chicago
the week preceding declined to a daily average
of

chases

and the improvement

J

estimated

was

operating at 96.5% of capacity.
.
Mill production of steel is exceeding consumption as is the
case with new orders.
Consumers are putting steel into inventory.

"Steel."

production, according to the official May 1 forecast,
at 653,000,000 bushels, or about 9,000,000 bushels
than the April 1 forecast. Corn was quite steady with offer¬

Winter wheat

ordering, is
consecutive
week, output of steel for ingots and castings in the week ended
May 22 was at the record level of 2,328,800 net tons with mills

Ctfs.

Pacific Railway Equipment Trust

.

push for deliveries, along with continued :
keeping mills near capacity operations. For the third

says

week.

dealings but weakened at the
close influenced by reports of intermittent rains in the Southwest.

This

they will have a place on mill order books in case
business continues into the third and fourth quarters of

in rather dull trading during the

Wheat showed strength in early

canning season. Tin plate
Tin plate is sold, on a

so

with prices holding in a narrow

Grain markets were irregular

-

range

buyers are protected on price to October.
contract currently of six months duration.

The

Offers Equip. Tr.

Offering of $5,160,000 Northern

equipment trust certificates, mat¬
uring annually June 16, 1956 to

Following the mild uptrend of last week, the daily wholesale
commodity price index, compiled by Dun & Bradstreet, Inc.,
turned slightly lower last week to finish at 272.83 on May 17.
This contrasted with 273.34 a week previous, and with 275.94 on

If it were to come, it would be

steelworkers' strike.

Price Index Reacts in Latest
Mildly Lower Level

Wholesale Commodity

35

Halsey, Stuart Group

of

negotiations, this trade

age

cost the past week were rye,

Moving higher in wholesale

4

price rise is expected to come as a

teel

(2443)

The Commercial and Financial Chronicle

.

will

be

initiation
per

$100

.

Association's funds will be

for three purposes:

(1) Em¬

ployment of a full time Secretary
SAN FRANCISCO, Calif.—Al¬ to serve the membership; (2) For
legal counsel to represent the As¬
The Parker Corporation has an¬ len Q. Jossey-Bass is now affili¬
sociation in its conferences with
nounced the opening of a New ated with Sutro & Co., 407 Mont¬
the SEC, and (3) For public re¬
York City office at 61 Broadway
First task of legal coun¬
gomery Street, members of the lations.
under the management of George
New
York
and San
Francisco sel will be to set up the rules and
Washburn, Vice-President of the
regulations of the Association.
Stock Exchanges.
firm.

33

(2444)

The Commercial and Financial Chronicle

Continued from first page

Nor is it easy to discuss matters
like this with a man who says that

Guaranteed Annual WageBlue Sky and Brass Tacks

which permits the employer with
more level or stable
employment

he

to

does

after

even

discussion. ;
The
question
General

peak

full

a

whether

not

and

Ford, at the
with large re¬
prospects, can

fortune,
and
good

to

build

up

unemploy¬

an

ment compensation fund over tne

five

next

years.

r

The question is not whether un¬

employment compensation as now
regulated is inadequate, or
•whether

supplementary fund is

a

good.
The

real

question

is

members

of

of

That

question,

is

distressing,

and

It

asked

time

and

don't

want

to

get lost in per¬
again, seems to make the sonalities,
innuendo, name-calling,
problem just another De¬ and the tossing of dead
cats, even
troit squabble
something of though I am supposed to be an¬
exciting interest, but not of major swering a recent talk to the Na¬
.

.

whole economy.
There
has not
been
our

and

full

labor

system

cept

one.

There is

one

by UAW-CIO
such

an

who

answer

repeated allegation
which

cares

anyone

guaranteed

a

—

enormously important problem in

their

and

pay

relations

cents

hour for

per

since

the record.

to look back

idleness—but

have

certain

a

"get

quality.
is, in fact, a dreamy
plausibility about the whole Guar¬
anteed

conclusion
most

except

radical

uncertainties

that

proposal,

full

accepted

of

them.

Employers are in
of stability of
markets, of
payrolls, employment, sales, trade
relationships and the many factors
of our day-to-day process of earn¬
ing
a
living.
Merchants
want
stability, so do teachers, profes¬
favor

sional
tude

people, and
of

all

not

persons

the multi¬

engaged

me

job

in

haven't

done

much

keeping

the

public

of

pare

already

we

the

automobile

today with the
very

€3i

constant

you

in¬

on

will find

I

doughnut, much
ever

in
as

the matter of

comes

All

up.

people

about

amount

of

time

Now

I

we

over

very

do

a

the

by

when

when¬

don't

at

the

the
.

over

mand obscures

or

we

can

that

I

but

thought the plan
did

so

people.

awful

an

dud,

was a

lot

of

other

And when the time

came

of

acres

tools

and

the peace-time lines and

up

remade the factories.

1

do

of the automobile

some

panies themselves have
down.

;

And

only

said in

letting
to

the

employer

stabilize

that

he

be

him

saddled

with

obligation?
what

to

the

CIO

unions

conference held in

a

Chi¬

and

yourself
or

faith

by

that

The fact

lieve
not

Goes Beyond

just

likes

to

be

and

yet

that you can

your

we can

in

that

these

who
boot¬

own

have

a

good

do not be¬
nostrums and will
many

buy the Blue Sky is

no reason

actually

determine

for

the

most

part the stability of any business."
Now—I think

the CIO

was

un¬

duly pessimistic at that time about
the ability of employers to im¬
stability, and is now chas¬
ing a will-o-the-wisp in its cur¬
rent
claim
that
employers can
level everything off just right if
they only want to. The fact is that
prove

it is not a question which
exactly determined. Some

can

be

compa¬

nies take too large a gamble and
suffer

for

in

is

it,

good.

some

just right

are

their

estimate of the market
for their goods, some under-shoot
the potential, That isn't bad, that

taking,

That

better

a

element

of

risk-

daring, or shooting for
position, is what makes

or

♦

o

several
years
they've bee
preparing for a major assault o
standards
which
the American
economy has
always considered
fair and proper, and they will g
to great effort to destroy those
v

,

standards.

Briefly, here is

of the stand¬
working for
a
living should expect, and get,
considerably more than a man
who is not working for a living.
I may be in the minority, but
A

ards:

one
who is

man

Management Viewpoint

Let's

take

viewpoint,
never

the management
find it.; I have

up

I

as

found

management opinion

as unified
on
any labor relations
subject for twenty years, as it is
on this question.

We have entered

in

a

new

the manufacturing

some

of

years

war

period,

world.

lived in

we

subsidized

a

and

For

period
defense

work, and generally a sellers' mar¬
ket.
During these years it was
quite common for the major in¬
dustrial unions to make a deal
with the largest companies in each

industry,
the

then

smaller

it

carry

and

ones

intact
insist

to

that

they "follow the pattern."
The smaller companies agreed
during these years without much
objection or resistance
in fact,
—

it became

common

about

the

com¬

been

cut

that

not

than

have

GAW.

reservations

The

demand

is

not

popular anywhere, really, ex¬
cept in the top offices of two or
three
not

afraid

isn't

of it.

committee

ad¬

economics

on

Now—honestly—what
of

the

argument

do

you

that

the

GAW must be good because

man¬

agement, always in opposition, is
against it?
To
ager

say

must

that the business
be forced

to

man¬

seek

sta¬

bility is simply to ignore the facts,
and

to

cast

an

management.
and

does, do

the

peaks

a

unfair

slur

in

And

the

the

when

major

realize that

you

automotive

i

a

incentive

age

look

to

for

parts

customer

industry

may

be

the

automobile company, you can

by the promoters of the GAW
scheme, who would
completely
destroy that pride, that sense of
fair exchange in a good job done
for good pay.

Maybe I'm wrong. But the laws
unemployment compensation
to follow this line of reason,

too, and efforts in every state of
the union to raise unemployment

compensation up to near the level
working pay have failed time
time again.
Now comes a strong union with

of

and

the

economic

admitted

shut

the

power

to

companies
in a major industry, or even the
entire industry, and says that it
down

largest

is going to get by muscle and eco¬
nomic force what it cannot get

through the legislative process.
It seems to me that this is ob¬
viously

circumvention of public

a

will, but the manufacturers can't

singly or jointly.
That's why it
important for everyone to ex¬
it, either

stop

Public opinion can.
is

thoroughly, and do

amine the case

his best to think out what is right,
and

fair, and which side he is on.
*

'

Believe me,

see

industrial manage¬

left

have

ments

source

no

search

untapped,

into

not

ruinous.

He

no

unemployment

com¬

employment stabiliza¬
tion, and fair adjustment of the
employee's problem.
Yet despite all of the careful
study, and despite the fact that I
pensation,

the

manufacturers

will be liberal and

logical in their

confident

am

replies to the union in negotia¬
tions, I do not expect the manage¬
ment answers to satisfy the union

the UAW

believe

negotiators.

I

leaders want

a

strike—a big strike

great and crushing "vic¬
tory" by forceful, militant action.

—and

a

Impact

long as the manager
could "pass it along," the increase

of in¬

experi¬
ence unstudied, no combination of
possibilities unexplored in its re¬

formation

Companies

Small

on

I believe that the GAW

Sure—as

was

aver¬

American wants pay for not

working. I think there is such a
thing as pride in having a job,
and pride in doing a good job, and
that all of us are being insulted

ing.

his costs

one.

believe that the

Nor do I

what kind of problem was build¬

in

is

a

or

if forced
would

upon

close

demand,

industry, not only
out
many
smaller

on

all

Management
can,
great deal to level

face the fact that you. can't oper¬

companies, but eventually would
force the largest ones into a mo¬
nopoly, dependent upon govern¬
ment subsidy and government su¬
pervision. If you want monopoly,
this is a quick and certain way to

ate

Even the UAW's

supporting the demand.

make

the small company found it¬

paying considerably more
.the big one, in direct labor

costs.

remember

third

that

and

in the automo¬

industry for small companies
say that they would "do what¬

self

feel

is out of work

half as much
as he would be if working, is do¬
ing pretty well. I have the idea,
and think that others have, that
the guy out of a job needs some
getting

tive

cases

country

this

who

man

seem

The

in

people
a

on

American industry great.

our

get it.

passed it along and the next man
passed along, and eventually the

customer, either the private
bill.

con¬

the government, paid the
that is ended, and we

sumer or

Now

a

competitive

blindly follow
These

might

are

say,

a

the

business
"pattern."
brass

tacks,
of industrial life.

and

v

After

you
Not

blue sky,

where everyone is pro¬
tected by government subsidy and
guaranteed pay without work, but
the hard realities. We now face a

major revision in labor contracts,
all
through American industry,
without the easy "pass-along" of
higher costs and higher prices.

tem

ous

short

a

that

under

run

a

sys¬

of

guaranteed full pay-with¬
out-work, it would become obvi¬
formerly competitive,

a

dynamic, and growth-seeking in¬
dustry was obliged to become one
of stagnant, standardized output
and size, not daring to maintain
even its present-day total of em¬
ployment and afraid of expansion
or

and

The UAW says frankly, roughly,
valleys of unem¬
ployment.
Unemployment c o m- and repeatedly that its guaranteed
pensation laws generally recognize wage demand is not for the
strong
no
way to advance public educa¬ this
possibility, in allowing for* and big, alone, but for everyone.
tion, really.
what we call "experience
This hard, truculent attitude of
rating"
for them to be reviled
by the man
who does believe in them.
That's

avoids most of

bit

or a

For

employ¬
com¬

bluff,

in 1946:

cago

,

let's

managers

visory

spirit

life without
working for it.

the UAW's de¬




of

man

straps,

can

Detroit Squabble

The debate

of

simply do not believe

get complete, or perfect, "stabil¬
ity." But striving to get more is
rot bad, it is
perfectly normal.
Important Question

ment

even

confidence that

fidence

em¬

highest
we

very

Listen

industry but

shackled to the status quo
simply
because it is the status
quo.
But
there are a great
many good-citi¬
zens
who
have worlds of con¬

lift
believe

by the government which, if you
hardly a business¬
man's government. Sure, manage¬

any

dislike the attitude which
that if you disagree with me,

No

country,
cries of

our

provide

compulsion
don't understand.

relatively small
unemployment, time

again,

But

will recall, was

and

do

kind

big

a

ployment stands
point in history.
'

about

a

unemployment

roused

are

disaster
and

debate

a

hole

untimely.

CIO unions. It not only is
popular throughout the CIO
you
are
a
wretched
person
of itself, it isn't popular with the
little faith. The
posturing, proud AFL and independent unions. The
individual who must claim to have
editors, writers, and economists
all
the
answers
and
always to who have studied the demand are
have been right is ridden
for the most part skeptical and
by some

and

into

small

ask

this

at

our

says

a

•

very

and

management didn't have the power
to decide—the plan was laid
away

tore
em¬

spirit.

has to do is look at the record.
We
allow
ourselves
to
be

dragged

forced in the

are

better. Most Americans have that

Com¬

steady growth
There it is; all one

stability.

changes

dreaming. Life is worth living
partly because of our dreams, The
spirit of hope and ambition rests

a

industry of
industry in

same

days and

prewar

have.

mea¬

I don't condemn the dreamer for

formed about the great amount of

stability

the

progress,

in

factory life at all.
Management and representatives
like

and

demands

got a
work and

Stability of
pay
aren't
things
desired
by
factory workers alone—everybody
wants

of

best

oppose pensions — there were
all. Further, the union
to
many pension
plans in force in
joint management of this
ever GM did"
and then wait for
industry for years before the CIO.
commitment, with a third party
the package to be announced.
Some
management
people
said
present to "break deadlocks."*
With the arrival of competitive
that the forced following of
"pat¬
I do not say that such a
conditions, and the buyers' market,
system terns" cut out for the
largest and
simply won't work and can't hap¬ most successful
this habit began to be very costly.
companies would
pen.
It can happen, and it can
Often the union made a tougher
eventually hurt the smaller and
work—but it will work
demand on the small and middleonly un¬ marginal companies, but
nobody
der
compulsions
and
controls
sized companies than it had made
paid much attention to that. You
which will break the American
on the largest ones—it had a sure
know what happened — not
only
tradition of hope and confidence
some
forty parts companies have thing, and made the most out of
and
it.
The result was that in some
risk-taking and steady disappeared from the

work

a

objective—and we've
it.

cannot

cannot

good thing and

a

that

impractical,

ployers accept a principle which
You don't have to
be wrong,
says that the employer has a con¬
necessarily, to be opposed to some¬
tinuing, perpetual obligation to
thing.
provide full pay for his employees
Management as a whole didn't
even
if he

of

i

Stability is
of

and

The union demands that all

free

our

economy.

lot

else,"

or

structure.

ness

and

standards

this

fundamental structure, aims, prac¬
to turn the factories to the
pro¬
tices, and policies which underlie
duction of war goods, we carted
the present-day competitive busi¬
out acres

face

we

that

and cannot live with unless

sure,

imponderables,
distinctly threatening to the

good

it,

radical

Annual

Wage
demand.
Upon closer examination, it breaks
down into a nightmare of economic
doubletalk, leading to no certain

and

feel

not

the ultimate cost of,

There

a

does

demand represents something
which management cannot count

persuasive

his

ment, under unemployment
pensation rules, now revile

on

It is that management

the

threat is real, that it is backed by
very
militant
determination
to

the arguments for the guaranteed
wage

who

man

the cents per hour for productive
work are vastly different from the

idea

do

can

surge

work

some¬

a

propaganda made solely t
maintain
solidarity.
The uni
spokesmen mean what they say.

The

great always
opposes everything good,
of industrial organization in and the inference then
is clear
which does not supplement, but the late ''thirties, and even the
that GAW must be good because
substitutes,
for
our
present struggle over recognition was not
management opposes it.
methods.
nearly so complex and shrouded
Both parts of that argument are
It is the consumer, the average in overtones of
determined, mili¬ fallacious.
Management has, it is
citizen,.who must support such a tant economic assault.
true, opposed the unions many
The
UAW
plan, not the employer. The em¬
promotional
pub¬ times in
many places.
Manage¬
ployer distributes the money — licity for the past two years on
ment, by and large, opposed the
but it comes from the customer.
this demand represents the most
Wagner Act. After a run of some
The crucial and critical points implacable and
intransigent posi¬ years, much of the
Wagner Act
at
issue
in
this
great national tion taken by a major union on was laid
away, it seemed to me
debate escape the notice of the any issue of modern times. The
with majority approval.
average good citizen, perhaps, as union
declared very early, long
Management
was
against
the
he thinks to himself: "What dif¬ before negotiations could
begin, sit-down strikes. Who
speaks of
ference is there between so-many that there was no question of its
them now as being good and
pro¬
cents per hour as a wage increase getting the
guaranteed wage—the
gressive?
and
the
same
sum
as
a
guar¬
only question was how."
Management, or at least part of
antee?" He may add, "The salaried
Among hundreds of business¬ it
(as Walter Reuther said here
people are guaranteed their pay, men I've talked to about the GAW
recently) thought that the Reuther
why not the hourly-rated demand,
during
two
years
of
Plan, to make engines of war and
worker?"
studying, discussing, and debating automobiles at the same
time with
Of course, the salaried
people the question, I have yet to find a the same
tools, was half-baked,
aren't

without

pay

the

the UAW is not

I think I am with the majority,
tional Press Club which was full
"Although there are some meas¬ when I say that unemployment
important questions go far of distortion and evasive
general¬ ures which an
employer can take compensation should not be as
beyond Detroit, and beyond the ities. It is difficult to
pass them to
stabilize unemployment, eco¬ great as working pay, or anywhere
automobile industry. What hap¬
lip, but I will ignore them all ex¬ nomic forces
beyond his control near it. I suspect that most of the
pens in Detroit this

the rest of the nation.

to

concern

union

big

unions, particularly the CIO un¬
ions, have railed against the idea
that the employer could do

Thursday, May 26, 195

..

union

the

to

time

.

But

thing about it.
reason
with a man who
Odd/ isn't it, that the unions
bluntly that he is prepared to which have been so bitter against

try

I

better treatment.

get

to

whole

substantially

one

others

for

pay

worked.

really important questions and get his demands "the hard
way."
always to wind up with the
My time is limited here today,
question: "Will they strike GM and I want to use it in
reporting
and Ford, or will they settle?"
management opinion as I find it.

and

wants, and will support,
system which
guarantees all

Jater

vacation

weeks

discouraging,

the

year may very
well influence all other industries

whether

America
a

week's

two

every

pay

seems

is

Motors

serves

of

,

of

afford

months

want

without
work, and adds that he insists on

says

stood,

not

.

risk-taking.
Where

five and
a

year,

settle

based

now

we

a

we

for
on

look

for

some

half to six million

would
a

be

"safe"

replacement

cars

obliged to
calculation,
and

care-

Number 5432

181

Volume

The Commercial and Financial Chronicle

..

.

fully-hedged projections of pop¬
growth. We would need to
produce one-twelfth of such a
total each, month, and have an
allotment system for distribution.
The car buyer would lose quite
a bit of his freedom of choice, of

ulation

too late to do that, and that each
of us can add something.

has been going on forever. I call
it
mechanization.
It
is
mostly

good, not bad. It results in put¬
ting more and more horsepower
into the hands of the individual, it
brings about largescale produc¬

*

It

doesn't

Wage,

for the car*—but he
would be counted on to accept it.
so

eager

If the

in which a
had missed its styling, or

company

for

one

was

year

other

some

did

reason

not

most
wanted, its production neverthe¬
less would have to be used and
the car buyer might not get just
have

the

car

a

the

among

he ordered.

car

would

there

more

Under
be

to be

an¬

system
bidding up of
such

a

prices in the first half of the year,
much as we saw during the scarc¬

after World

ity period

War II,

and reluctance to absorb the

quota

at year's end with new models
coming. This would dislocate the
market place, and I assume that
an

of bureaucrats would be
to administer and police

army

needed

the system.
But—it could be done,

and that,

Continued

study the problem.
It
would result in a controlled, lev■eled-off caricature, but it could
foe done. In the name of stabiliza¬

would like it, but it is not im¬
possible. It is simply the easy,
deteriorating system of dividing
up a sure market among a few
producers, and keeping risk, en¬
terprise, and growth to a mini¬

; :/v..

mum.

Inflation, of course, would fol¬
of such

low in

the

gram.

Greatly
increased
costs
certain, because the ef¬
and the inefficient, the

train

a

pro¬

would be

ficient

good and the bad, all would be

controlled

With

protected.

non-working employees if

many

demand eased.

of

The rise in costs and prices,

would have to be met by
buyer. Nothing more er¬

course,

the

car

has

roneous

union's

been

than
"the

said
that

statement

the
em¬

ployer will foot the bill" for the
guaranteed wage; he can't foot it.
The consumer must pay, either as

^UfcMser of the goods

or as a

taxpayer—and the union has been
frank to admit that its plan in¬
cludes the utlimate "reinsurance"
of risk by government, which is
a
fancy way of saying the tax¬

for losses and fail¬

payer can pay

Incentive would suffer, not only

employers but among em¬
ployees. That pride of the older
-employees would hardly be suf¬
ficient to keep them steadily at

work, I think, if they could see
younger
men
getting
while idle. An obvious

full

pay

premium
paid for finding ways
to get laid off.
This is at least part of the fu¬

would

be

ture, as I see it,
teed wage demand
the

if the guaran¬
is forced upon

automobile industry.

don't
like it—but it does little good to
say

that such

able.

It

Icnow—it

is all
can

I

thing is unthink¬
thinkable, you
happen.
a

too

Automation
Now let

me

pay

just

a

little at¬

tention to "automation."
is

said

that

these

Some

"automation"

revolutionary
dreadful




the

Guaranteed

Wage principle. Letters should be
addressed to Editor, "Commercial

of

we've

...

got

The

which

are
supposed to do away
bookkeepers and account¬
ants.
What has happened in that
field is what you will find in any
area of rapid modernization,
ex¬
pansion, and development — the

the war.

is 75

before

was

*

i:

It

is

have

too

go at these matters in
spirit of fear and hate and

a

nerstone of the

new

union build¬

ing here in Washington was laid,
and it made pretty good sense to
me.

'

;V~/VY'; 'V/,

What President Wilson said to

organized

labor

something

was

like this: "If you come at me with
doubled fist, my own fist will

double."

reaction.

at

came

the

And

It is

the

automobile

a
UAW

industry

with doubled fist.

Nevertheless, some people tried
a fight over this issue.

to head off
I

one

am

plan for
ployment
the
and

UAW

them—I proposed a
supplemental unem¬
compensation pool to

of
a

more

than

a

several

distributed

ago,
thousand

year

copies of the plan to management,
union, and government people. It
simply said that the union could
get money from the employers as

increases, recapture part of
it in dues, and manage an unem¬
ployment
compensation
pool

wage

which would

be free

of the vast

complexities and conflicts other¬
wise invited.
The

q

union's

"Nonsense."

,

■' *'

reply to this was

Just one word.

Summary '

Y*

'

mv;

up, it seems to
that this UAW plan is illogi¬

Now—summing
me

cal,

unrealistic

poorly de¬
a thing
earlier, I think that Nash, Hud¬
son,
Packard, Studebaker, and
Chrysler would have carred an
unnecessarily heavy burden in
their come-back attempts.
And
one can recall a time when Ford,
now healthy and strong, was not
doing so well.
■

vised.

If

we

and

had had such

Unemployment compensation
and
employment
stabilization
should be studied constantly in
the hope of improving our system;
no one disputes that.
But no one
man or
small group of men has
the wisdom to plan and direct the
lives of exeryone, in a great burst
of paternalistic fervor.
Further, tne use of muscle and
crude, crass economic power to
force one's objective when reason
and

hour

man

accumulate

when

layoffs

less than average and decumulate when layoffs were more
than average, but over the course

were

of the year and

the

the business cycle
would

fund

reserve

ably be maintained at
quate figure.
is

similar

to

presum¬

some

ade¬

pension

any

annuity fund in which the pay¬
over the average life span
of the worker subsequent to re¬
tirement are supposed to equal
the contributions to the fund plus
interest over his working span.
The cost of the guarantee is thus
a set amount per hour but varies,
of course, with total payroll. The
heaviest charge on the firm would
ments

be

of rising or
stable employment,
The advan¬
tages of this method are that, one,
it clearly limits the firm's lia¬
bility to a known cents per hour
contribution; and two, its allo¬
periods

during

cates

the

the

majority of the cost to
period when the firm can

best

That's true, you know.
natural

per

or

we

to

such

would

This

that

really,

bad,

much

so

payments
to
laid-off
workers
throughout the year. The funds

%

%

of

employment will provide Suf¬

it.

afford

thus

It

the maximum in
firm's

solvency.

vides

little

prpvides

protection of the
However, it pro¬

or

incentive

no

to

stabilize, .since the firm cannot
avoid the charge by stabilizing
employment, except by renegoti¬
ating the size of reserves and con¬
tribution rate.
The UAW has

attempted to gain
both advantages simultaneously
(at least in principle) by pro¬
posing pay-as-you-go for current
layoffs but only up to some max¬
imum percentage of current pay¬
roll. An further layoffs are to be
paid out of a reserve which has
been accumulated and maintained

by a contribution rate which to¬
gether with the charge for current
layoff cannot exceed the maxi¬
mum
liability
charge.
In
at¬
tempting to get both advantages
the UAW plan really is a com¬
promise. What is gained in terms
of pay-as-you-go incentive is lost
in terms of reserve protection.
The
higher is the contribution
rate (and the closer it is to the
maximum)
the more the plan
will rely on reserve financing.
The

lower

contribution

the

the higher the
will

have to

pay

for

the

amount

of

will

the

be

rate

maximum liability

rate

be

in

order

to

of any given
and the more

cost

layoff,

reliance

on

pay-as-

is thus impossible to
have both the advantage of sta¬
It

you-go.

bilization

which

incentive

tends

to focus the cost at

point of lay¬
off and the advantage of maxi¬
mum
protection
of the
firm's

solvency, since they are not com¬
patible goals.
The UAW has

tribution

rate

proposed

of 4%

to

a

con¬

accumu¬

late^ reserve of 20% of the base
payroll and
of

8%

of

a

maximum liability

current

payroll.

The

high rate of maximum liability
suggests that the UAW wishes to
emphasize the pay-as-you-go
principle but with this rate it is
doubtful

would
are

that

so

large

a

reserve

really be necessary. These
original asking demands, how¬

to

sta¬

necessarily re¬
flexibility. One may

sults in less

that the employer or con¬
or someone
pther than the
workers should share the cost- of
flexibility, and this argument may

perfectly

and

sound

But

that

the
that

.

transferring

to achieve it,

will

'•

;

r

-AV'

The Plan and Labor Mobility

Another conflict in the charges
defense of the UAW's pro¬

be

and

The Question of Management
Of GAW

plan

the

concerns

effect of the

the

mobility of labor.
Mobility, here, refers to the ease-

Directly related to the financing
method is the charge of manage¬
ment that the guaranteed annual
will make labor fixed cost.

wage

from

equity.

mean

the cost of flexibility to the em¬
ployer would not effect his ability

Wage

undoubtedly

not

posals

financing method
is generally
that a contribution
hand

ficient funds to meet the cost of

"automation"

higher than it

other

designed

of

with

to 80%

pay-as-you-go financing
bilize
employment,

does

reserve

the

rate

in¬

number of accountants now

through costs and
profit relationships resulting from

sumer

scaled down by negotiation.

so

have "electric brains"

we even

will be induced

argue

ever,

the autoworkers.

on

creased more than 80%.
Sure,

nor lays off
irresponsibly." The very prem¬
of the UAW, that
employers

ise

Place, New York 7, N. Y.

promote year round employment

1940 the

operators

that he neither hires

and Financial Chronicle," 25 Park

for

had

Since

fast?

so

number

Annual

15

,

is
persuasion fail is something
de¬ to be condemned.
It would be good if we could
spectre
seems
necessary as part of the decide these matters on their mer¬
demand, and this is it. Now—to its, with more reason and com¬
me,
"automation" is the latest mon sense and real concern for all
I hope that it is not
fancy term for something which America.
It

forcing

mands.

toward

The Guaranteed Annual

your dial's
commands.
know what happened to
employment among telephone op¬
erators when this dreadful thing

translate

ures.

among

pleased to accom¬
modate in its columns any com¬
ments,
regardless
of
attitude,

The United Auto Workers and

Do you

ume

greater volume to meet demand,
ft also would have to carry a good

page

be

look at the automatic banks which

vol¬

and lowered scope, unit costs
would necessarily rise. If, on the
other
hand, a company risked

the

at the highest possible
Accordingly, the "Chron¬

will

standpoint of

fighting spirit. That seems to be
tion, industry would be turned the way, though, that the ap¬
into something like the European proach always is made by some
of the unions. I noticed the other
cartel system.
Y
Cartelization, in fact, is the day that Mr. Eisenhower quoted
word for it. I doubt that many of Woodrow Wilson, when the cor¬
us

of

that merits the

from

levels.

be

If you prefer to think of "auto¬
mation" as specific, take a look
at the dial telephone, or go and

we

as

opinion
one

maintaining both employment and

is the important thing to remem¬

ber

the

Annual

utmost consideration of every one
interested
in
the
objective
of

233,000 employees—it has 520,000
employees!
:

bloomed

still

is

There

ticipated.

in

activity
icle"

*

Guaranteed

a

"Chronicle," is

decrease

jobs, it in¬
creases them. Look—in 1940, Gen¬
scheme.
eral
Motors
had
233,000
em¬
enough -cars in the spring, and ployees. "Automation," to use the
when the car buyer finally got stylish term, has been going on
delivery as part of the allotment at GM as it has in industry every¬
for some later month he might not where.
Now GM does not have
foe

$

WHAT DO YOU THINK?—The

subject of

tion and lower unit costs.

his purchase timing
to
fit the overall
There would never be

course, and
would have

(2445) *•' 3T

The

UAW argues that with its
provision of maximum liability as

on

with which

ing

workers in

business

to

an

tend

expanding

a

declin¬

be

to

shifted

business.

The

UAW argues that this plan will
not

"freeze"

firm

or

the

workers

to

any

industry.

But, simultane¬
percentage of current payroll, ously they argue that "faced with
labor is not a fixed charge but is a possibility of
having to pay idle
"as variable as the payroll itself."- workers,
industry
will
move
It should be noted, however, that heaven and
earth to find pro¬
it is the maximum liability, and ductive work for them."
If the
not
the
actual
liability which workers are laid off they must
varies directly with the payroll. make
themselves
available
for
On a pay-as-you-go system the suitable wdrk, suitability
subject
costs begin to increase as the~payto review by the joint administra¬

a

roll

decreases, i.e., as layoffs com¬
The real question here is

mence.

whether the firm

assumes

an

ob¬

ligation to pay currently for labor
that is not used. As long as there
is to be any pay-as-you-go financ¬

ing, then some part of payroll cost
thought of as a fixed cost,

must be

will

and

income

used.

go

of

to maintain
who

workers

current
not

are

Although the payroll cost

tive board.

Experience under state unem¬
ployment compensation systems in
industries

which

seasonal

are

in

character, where workers are tra¬
ditionally laid off for weeks each
raises doubts about the

year

tual

ac¬

availability of these workers.

Even

with

benefit

payment?

of one-third normal
pay many of
these workers do not seek work.

will vary with the size of the em¬

With

ployed labor force, it will not, of
course, vary as much as would be

approximating normal take-home

the

much

A

annual

wage

with

as

the

or

guar¬

even

completely

a

as

re¬

financed plan.

serve

in

in absence of

case

anteed

similar

inconsistency

connection

arises

with

management
guaranteed an¬
strangle the busi¬
ness firm, making
its operations
completely inflexible. The UAW
argues "that the plan must neither
prevent the movement of workers

charges

that

the

nual wage will

of

out

declining

companies nor
establish any roadblocks to the
hiring of workers by expanding
companies." In this regard they
point to the provisions of gradua¬
tion of benefits of

fit

for

each

one

two

week bene¬

weeks

a

rate

of

benefit

payment

it seems doubtful that work¬
ers,
until they have exhausted

pay

benefits, would be
before.

If

mobile

as

workers

as

not

are

as

freely laid off by declining firms,
and if they are not as
readily
available for re-employment else¬

where,

then mobility has been
impaired. The mobility achieved
in

our
economy in absence of a
guaranteed annual wage may be
undesirable
from
many
stand¬

points.

The

price

we

to

pay

achieve it in human suffering and
other ways may exceed the bene¬
fits

of proper

resources.

allocation of labor

Certainly, however, the

UAW's plan would reduce the ex¬

isting mobility of labor.

worked,
indicating that the maximum cost
of hiring an additional worker is

There are other inconsistencies
in the arguments of the
UAW, for

less

different groups of workers.
The
observation has been frequently

than

work.

must

have

of

a

the

fact

that

maximum of

benefits

be

overtime

of

cost

Moreover,

workers

weeks

the

and

available

that

for

52

they

suitable

work with other employers is also
referred to.
The real

question of flexibility

here is concerned with the

ease

in

terms of cost with which the firm

example, the relative benefits to

made that the less senior workers

gain the most from
annual

a

guaranteed

since they are the
most likely to be laid off.
The
wage

UAW has responded that even the
senior workers are laid off when
a

plant is shut down.

course, true, but it
the point that the

This is, of
alter

doesn't

incidence of
or contract its output
employment. The fact that it layoff is greater for the less senior
worker and hence the benefits of
may be more profitable for a firm
to increase its output by increas¬ guarantees much greater. In spite
of their arguments to the
ing its work week to include
contrary,
the UAW has recognized the
overtime
po¬
pay
under
particular
circumstances
rather
than
hire tentiality of reserve funds being
additional workers has nothing to exhausted by less senior workers
do with the question at issue. * It during protracted periods of lay¬

expand

can

and

is

obviously

additional

more

workers

costly to hire
on

the

basis

of

a
guarantee of one week of
potential layoff pay for each two

worked

such

out

than
a

to

hire

off

recommended

some

workers against possible layoff.*

is

There

them with¬

the

guarantee.

has

and

provision to set aside or impound
part of the funds to protect senior

UAW

no
question but that
recognizes the impos¬

sibility of achieving all their goals
simultaneously. An examination
the
proposals of the UAW
the payroll by layoffs without any of
shows that they have been strug¬
financial obligation to the laidoff workers than if the firm has gling with this impossibility and
Put in

less

another way,

costly to

be able

it is much
to

reduce

such

obligations no matter how
small they may be. It is nonsense
to argue that the plan "can have
no

adverse effect

on

the flexibil¬

ity of the economy" while simul¬
taneously stating that "it merely
presents
certain
potential
cost
factors for his [the employer's]
consideration designed to assure

have

had

result

an

part

of

to compromise.
objective position

the

union

As
be

admit the

necessity of these

promises,

but

realistic
of

to

perhaps

expect

the

it

is

a

the

on

would

to

com¬
un¬

principle

objectivity to prevail in discus¬

sions of this kind.

38

The Commercial and Financial Chronicle

(2446)

Securities

Now

Adams Engineering Co., Inc., Ojus, Fla.
April 29 (letter of notification) 101,552 shares of class A
stock (par 10 cents), of which 82,924 shares are to be
offered publicly and 18,628 shares to employees. PriceTo public, $3 per share; and to employees $2.75 per

share.

Proceeds—For

facturer

of

jalousies

and outdoor aluminum furniture.
Miami Beach, Fla.

Underwriter—Atwill & Co.,
All State

Uranium Corp.,

Moab, Utah

Allied Industrial Development Corp., Dover, Del.

April 7 (letter of notification) 300,000 shares of class A
stock. Price—At par ($1 per share). Proceeds—For oil
and gas activities. Underwriter — Paul C. Ferguson &
Co., Houston, Tex.

+ Ambassador Hotel of New York, Inc.
May 19 filed 163,898 shares of common stock (par $1)
to

be

ord

offered

for

subscription

by

stockholders

of

rec¬

of

one

share

new

share.

per

properties and

American

Asbestos

Co., Ltd.
;
Feb. 17 (Regulation "D") 600,000 shares of common stock
(par $1). Price — 50 cents per share. Proceeds—For
general corporate purposes. Underwriter—Maine Invest¬
ment Co., Ltd.

March 3

be

each

10

expansion.

Office

shares'"

Kennedy

Underwriter—None.

'

,

filed 540,000 shares of

Price—$3.75

share.

per

holders at

stock

common

(par 50

Proceeds—For manufac¬

common

stock (par $
subscription by common stoc
8, 1955 on the basis of on
newushare for each eight shares held; rights to
exp'
be

to

stockV(no par),

common

offered

and improvements.
Underwriter—Smith, Ramsa
& Cp.; Chas. W. Scranton & Co.; G. H. Walker & Co

Hip&s Bros. & Co., Inc.;
Bridgeport, Conn.ty Brown

March

Corp., New York.

Bankers Fire & Marine Insurance Co.

i

June

on

{June 28.; Price—To-be Supplied by amendmen
Proceeds—To repay bank loans and for property add

2-week period)

Underwriter—The First Boston

record

for

tions

on basis of one new share for
held; and the remaining 70,000 shares to
employees (excluding officers) up to and including July
6, 1955. Price—To be supplied by amendment. Proceeds
—To repay bank loans and for construction expendi¬

tures.

of

first

on

10 shares

17

filed

$14,217,100 of debentures due May If
common stock (par $1) bein
for subscription by holders of "called" $5 cumu

offered

^

for each six shares held

$100 of debentures and

lative

into

(with an oversubscription privi¬
lege); rights to expire on May 27. Price—$14 per share.

convertible

first

their

stock.

common

preference

shares

for

These

-

stock

holders

have

A

conversio

or

subscribe

may

share of

one

who

redemption

fo

stock

fo

common

each $5

preference share held. Price — $100 per urii
Proceeds—For redemption of $5 preference ^tock. Un

increase

capital and surplus. Office—312
St., Birmingham, Ala. Underwriter—None.

23rd

*

1975, and 142,171 shares of

surrendered

Proceeds—To

and T. L. Watson & Co., all

Co., Berlin, N. H.

April 12 (letter of notification) 15,000 shares of scommon
stock (par $5) being offered for subscription by stock¬
holders of record April 7, 1955, on the basis, qf. one share

derwriter—None.

Statement effective May 18.
i.-

•

.

.

■"

K

..

(par $5)

for

offered

subscription by key employees of
American Gas & Electric System pursuant to key em¬
ployees' stock purchase plan.

NEW

ISSUE

CALENDAR

American Machine &

Foundry Co. (6/8)
May 19 filed 237,641 shares of common stock (par $7) to
be offered for subscription by common stockholders of
record June 7, 1955 on the basis of one new S/'iare for
each 10 shares held; rights to expire on June 22, 1955.
Price—To be supplied by amendment. Proceeds — For
expansion and working capital. Underwriter — Union
Securities Corp., New York.

stock (par one cent).

mon

Price—$1

share.

per

May 26

com¬

(Thursday)

Missouri Pacific RR
(Bids

V

EDT)

noon

June

J

,,v

Trust' Ctfs.

Equip.

"

$2,925,000

."V£

.

May 31
Cuba

(Republic

(Tuesday)

of)

Bonds

(Allen

&

Co.)

'

$2,500,000

B.

Burnside

&

Co.,

Inc.)

60,000

debt

repay

for

and

general

corporate

Boland

Inc.)

"

$300,000

Aquafilter Corp.
May 13 (letter of notification) 150,000 shares of
stock

For

(par 10 cents).

working

Price

capital

and

—

$2

per

general

share.

Office—270 Park Ave., New York,
Vickers Brothers, New York..

N. Y.

purposes.

v

*

.

com¬

working capital. Office—807 West Washing¬
ton St., Phoenix, Ariz. Underwriter—First National Life
Insurance Co. of Phoenix, same address.

the

basis

of

one

held; rights to expire

new

share

June 15.

on

for

each

Oils

&

Price—$15

per

shares

share.

common

and

stock

class

A

(no par)

to be offered first to

stockholders

common

on

a

common

l-for-3

basis.

Price—$20

per share to stockholders; and $22 to public.
Proceeds—For additions and improvements. Underwriter

May

11 filed

to be offered

Peabody

June

6, 1955, on the basis of one new share for each
held; rights to expire on June 27. Additional
subscription privilege for unsubscribed shares, by stock¬

four shares

holders and employees.

Price—$5

To reduce bank loans.

Underwriter—Auchincloss, Par¬

ker

&

share.

Ltd
Ltd.)

225,000

Co.,

Inc.)

Co.;
&

Rauscher,

Pierce

&

Co.
;

Public

2

'

/'

.s

&

June

Colohoma

^('•(Offering

and

i/'v

& Co.)

and

^Bridgeport

,

T' T%

.

and

Common

and Shaiman &

'

shares:.,,-

(Friday)

Blyth & Co.,

^.Common

Inc.)

by

The

First

Boston

245,000 shares,

13

-

Hydraulic Co

W.

Scranton

&

(Offering

to

stockholders—no

(Offering

to

Dodge

Co.;

Se

June 14

underwriting)

663,469

Securities

by

Corp.;

•

>•

June
*

~

Clark,

15

(General

Julius A.

|

;

....

}:j

I

Co.)

162,080

shares

'

New

j'|

Common

Noel

&

Inc.)

Co.)

Haven

(Olfenng

(Tuesday)

&

a.m.

Precision

Co.,

&

11

Common

Sulzberger

$1,500,000

&

Co.;

debentures

stock

Co

Common

underwriting)

$2,040,000

20

Natural

;/$/

Gas

(Monday)

Co

Common

(Union Securities Corp.)

770,000

shares

21

(Tuesday)

i'Southern New England Telephone Co

^

(Bids to

Gas

Co.^H-

and

a.m.

Debens.

$20,003,000

July 12 (Tuesday)

Bonds

*

'

.Bonds

^. Illinois Bell Telephone Co
(Bids to

be invited)

$30,000,000

$600,000

■ >-

Co.—
Brothers)

$25,000,000

J.

Preferred

,

••

i

(

-Common

Bonds~-

~

be

& Light

(Bids

..

$299,000

(Bids to

"

Utah Power

/

(Tuesday)

!;; Utah Power & Light Co

7

"

$6,000,000

Vermilye

September 13

f
f

J f

„_Debentures<

Corp.)

EDT)

invited)

IfJ_-Common

Corp.

invited)

be

by

Virginia Electric & Power Co
(Bids

^

_

CDT) $4,000,000

Investing

Co.

Inc.)

stockholders—no

Auchincloss,
98,195 shares,,
%'■'
" "

Standard Electrical Products
Fuller

:

*

Pioneer

^

Southwestern Gas & Electric Co._

D.

.

*-T. *T

.

(3.

Hailowell,

Inc.;

215,000 shares of

Water

to

yf-Common

& Redpath)

Electric

be

*.

88,000,000

'

7

stockholders—underwritten

to

invited)

Co.,

&

June

.-Common

Carpet Co., Inc.-

(Bids

-

I

^-

$750,000

$2,112,500

(While, Weld & Co.; Lehman Brothers; and
McCormick & Co.) 160,000 shares

Chicago

•

Debentures &

Blauner

D.

Common

(Barrett Herrick & Co.,

Common

$600,000

Debentures

be

-

(Milton

and

Stewart Oil & Gas Co

,

^ International Hardware Mfg. Co., Inc.

(Monday)

1

—Common
.

(Bear; Stearns & Co.) $3,500,CG9

-f

Cosmopolitan Life Insurance Co. of Memphis, "*""" f-v •*

(General

»

Debentures

^... and Baruch Brothers

June 6

Creek

•

„

Hack en sack Water Co

/

,

Silver

Debentures
o

(Wednesday)

Common

(Offering to stockholders—underwritten by The FirsTf^^T
Corp.; Blyth & Co., Inc., and Smith, Barney
*'
Co.) 275,464 shares

10:30

&

Hincks

$1,562,500

•

Investing Corp.)

(Bids-to

Boston

Illinois

Ramsay

Co.;

55,000 shares

Evans Products Co..

*•,;

/

Common

Public Service Co. of Colorado

to

&

Colorado Sports Racing Association

<5e

(Offering to stockholders—no underwriting) 111,836 shares—

Alstyne,

Smith,

by

Walker

(Tuesday)

--

,

share*

Adams

Peoples Gas Light & Coke Co

&

H.

(Char)es Plohn & Co.)
•'■■■•

^Common

Rippel, Inc.;
& Weissenborn, Inc.)
$4,095,000

(Allen

G.

National Telefilm Associates, Inc.

^

.

Nugent & Igoe;

Parker

Common

Co.;

4
i
(Lehman Brothers) $5,000,000

|:t-

' .W

;„Common

stockholders—underwritten
Union

*

(Monday)

Mueller Brass Co

$1,250,000;/, ^

Co.)

Co

Signode Steel Strapping Co




100,000

stockholders—underwritten

to

Chas.

,

offices

*

by

(Friday)

National State Bank of Newark, N. J

(Bids

Cleveland

Co.)

.

Parker

all

Boston

.Common

Bros. & Co., Inc. and T. L. Watson & Co.)

j/

~

-

Co.;

ijt

Hailowell,

$150,000

Offering

|l:

l|:/./

3

Investing Corp.

<

Common

Inc.,

Uranium, Inc

(General

Central

to

Common
First

The

Co

to stockholders—underwritten
Corp.

,

June

...Common *'>**7

Co.,

Illinois Bell Telephone

(Offering

San Francisco

..

^Kansas City Power & Light Co

'

,

&

Sulzberger

Artloom

Private Wires

-

.

10

June

Philadelphia

by

$2,000,000

Service

/June

(Thursday)

Blauner

D.

June

Pittsburgh

:

stockholders—unde:written

to

Bioren

shares

$650,000

$6,000,000

Co.)

^Southeastern

(Offering

Debentures

Corp

(Milton

(Van

Boston

Co.

(Thursday)

Corp.)

Common

t:

$300,000

stockholders—underwritten

to
<

Common

Securities,

&

June 9

~

.

,

Vanadium Queen Uranium Corp

New York.

Snare

Merchants National Bank of Boston.

Common

Offering to stockholders—no underwriting 738,721 shares)'-

Heat-Timer

Tenn.

Atlantic Oil Corp., Tulsa, Okla.
April 22 (letter of notification) 40,000 shares of common
stock (par $5) to be offered for
subscription by stock¬

>

.^Offering

Consolidated Natural Gas Co

Proceeds—

Redpath, Washington, D. C.

Common

shares

I?.L

and

common stock
(no par)
by stockholders of record

per

&

Russ

Hinckley;

Inc., Philadelphia, Pa. (6/7)

98,195 shares of
for subscription

78,400

—Common

(Israel & Co.)

$300,000

Industries, Inc

(Kidder,

—Laird, Bissell & Meeds, Wilmington, Del.
Artloom Carpet Co.,

Davidson

O'Connell

(Homer

Texas

(May 19).

Artesian Water Ce., Newport, Del.
April 26 (letter of notification) 5,446 shares of class A

Co., Inc._:

Co.)

Western Nebraska Oil & Uranium Co., Inc.__Com.

Common

Co.)

Aviation, Inc

Proceeds—For working capital and future general cor¬
porate purposes.
Underwriter — None.
Offering — Ex¬

pected today

&

Minerals,

and

Co.

Robinson

&

June

three

&

'

v

Breweries, Inc
^ (Shields & Co.) 500,000 shares

Bancorporation, Phoenix, Ariz.

April 29 filed 100,000 shares of common stock (par $10)
to be offered for subscription by common stockholders

Witter

stockholders of Electric Bond &
underwriting) 525,036 shares

to

Preferred
■

International

Pro¬

ceeds—For

on

(Dobbs

(Doolittlc

Amortibanc, Phoenix, Ariz.
(letter of notification) 300,000 shares of
stock, class A. Price—At par ($1 per share).

,

Common

Gas Corp

(Offering

."«■■/

v.

Hawk Lake Uranium Corp

Peruvian

Arizona

Arizona

(Wednesday)

General Precision Instrument Corp

Underwriter—

April 4
mon

June 1

Proceeds—

corporate

jlJnited

•%
T

(The First Boston Corp. and Tucker,
Anthony & Co.) 100,000 shares

common

Union

—no

purposes.

Underwriter—Equity Securities Co., 11 Broadway, New
York, N. Y.

by

shares

Boston

Friden Calculating Machine
(Dean

.

237,641

Corp.)

stockholders—underwritten by The First'
Corp.) 575,856 shares

(Offering to

.

lc

Common

& Co.,

Common

stockholders—underwritten

to

Securities

shares

Co., Inc

(John R.

Proceeds

-

r,

-Common

Kurman Electric

(Wednesday)

...Baltimore Gas & Electric Co

.....

—To

(Offering

V

Co.

Duraloy

8

American Machine & Foundry Co

y—

.

(Mortimer

ic American Rare Metals Corp., N. Y.
May 11 (letter of notification) 300,000 shares of

•

(6/13)

May^.11 filed 55,000 shares of

of which 575,856 shares are to be offered for
subscrip¬
tion by common stockholders of record on or about June
a

$100 of notes for each 100 shares

.• Bridgeport Hydraulic Co.

'it Baltimore Gas & Electric Co. (6/8)

(for

of

rate

held.
Price—95% of principal amount to stoc
holders and 100% to public. Proceeds—For
developme
costs' and
general corporate purposes.
UnderwriterNone.

holders

7

ISSUE

stock

of Teleac

May 19 filed 645,856 shares of

REVISED

Bonnyville Oil & Refining Corp., Montreal, Ca
April 29 filed $2,000,000 5% convertible notes due Jul
1, 1975 to be offered for subscription by common stoc

develop¬

—

ADDITIONS

PREVIOUS

ITEMS

•

Sending and Receiving Units, working
capital and general corporate purposes. Office—Balti¬
more, Md. Underwriter—Mitchell Securities, Inc., same
city.
'
*

N.

ir American Gas & Electric Co.
May 20 filed 192,000 shares of common stock

•

for

Proceeds—For

May 17,

1955, on basis of,one new share for each
share held..,Price—To be supplied by amendment. Pro¬
ceeds—To repay bank loans. Underwriter—None.

to

of

cents).

each

Thursday, May 26, 19

.

SINCE

Automatic Remote Systems, Inc.

ture

April 19 (letter of notification) 1,000,000 shares of com¬
mon stock
(par one cent). Price—30 cents per share.
Proceeds—For mining operations. ...Underwriter—Gen¬
eral Investing Corp., New York.

basis

on

Price—$7.50

Bldg., Tulsa, Okla.

equipment. Business—Manu¬

new

Registration

holders
ment

.

★ INDICATES

in
held.

.

to

Bonds

invited)

$15,000,000

Co

Common

be invited)

177,500

shares

%

f

November 9
Southern

(Wednesday)

Co.
(Bids

—Common
to be

invited)

500,000 shares

Number 5432

Volume 1'81

...

(2447)

The Commercial and Financial Chronicle

39

i%

Xno par); Price—$25 per
incident to 'oil activities.

tive

but Herbert T.

fund;
stoc^
(par $1) to be offered in units of a $1,000 debenture and *
100 shares of stock. Price—Expected at $1,100 per unit
Proceeds—For expansion and working capital. Office—
San Diego, Calif.
Underwriter—Barrett Herrick & Co..
Inc., New York. Offering—Indefinitely postponed. State:

1

slflhrjati
Underwriter—J. E. Ca&t*

Proceeds—For mining costs.

Co., Salt Lake City,
Central

Utah/

.

Illinois Electric & Gas Co.

/ New York.

—

curities Corp., same

city.

/

*

*

Boston, Mass. " -:= y
1

•

Colohoma

.

Uranium, Inc.,

April 21 filed 2,960,000

■

■

■

'

purposes.

&

,

St., Denver, Colo.

Underwriter—Peters, Writer & ClirisColo. * * '
*

tensen, Inc., Denver,

it Community Television Corp., Grand Forks, ift D.
] April 25 (letter of notification) 2,500 shares of cld^ A
preferred stock. Price—At par. Proceeds—For wooing
capital, etc. Underwriter—None.
^

Omaha, Neb
%
March 11 (letter of notification) 150,000 shares of 7%
cumulative preferred stock (par 95 cents) and Iff,000
shares of common stock (par one cent) to be offered in
units of 10 shares of preferred stock and one share of
common stock.
Price — $10 per unit. Proceeds — For
working capital. Underwriter—J. J. Riordan & Co., Inc.,
42 Broadway, New York City/
■
' f*
Confidential Finance Corp.,

*

Consolidated Natural Gas Co.

(6/2)

to expire on June 21.
Pride—
Proceeds—To repay bank loans arid to
purchase securities from or make loans to company's
subsidiaries for use for the their construction programs.
shares

held^ eights

$31 per share.

Underwriter—None.

-

exploration and development of properties. Underwrite*
—Stock to
be sold on Toronto Stock Exchange or

selected dealers in United

States.

Cooperative Grange League
Exchange, Inc.

.

.

,

Federation

5% cumulative preferred
to farmer and non-farmer
patrons of the Federation Exchange and others who
desire to become stockholders, and 200,000 shares of com-

May 4 filed 10,000 shares of
stock (par $100) to be offered




Co., Inc.
1
(letter of notification) 2,306 shares of pre¬
(par $100) being offered in exchange for

(Robert)
28

ferred

stock

1,237 shares of first preferred stock (par $100) and 1,069
of second preferred stock (par $100) of Great

shares

Pa.

>

share-for-share basis; offer
Underwriter—None.

Southern Box Co., Inc. on a
to

expire May 16.
General

Homes, Inc.

300,000 shares of common stock (par $1).
Price—$5 per share. Proceeds—For plant expansion, new
equipment, inventory and working capital.
Office—
Huntington Station, L. I., N. Y. Underwriter—S. D. Ful¬

Dec.

Underwriter—None.
(5/31)

Dyno Mines, Ltd., Toronto, Canada.
25 filed 1,100,000 shares of common

March

Price—To be related to the current

$1).

15 filed

ler & Co.,

New York.

*

filed 100,000 shares of cumulative preferred
stock (no par), of which 67,176 shares are to be of¬
fered in exchange for four series of outstanding pre¬
May

market price

6

filed

300,000 shares of capital

stock.

""

Bldg., 5 Philadelphia, Pa.

build¬
Trust

ceeds

Underwriter—Bear, Stearns & Co.,

shares of State held.
increase capital and

Underwriter—None.

Co.

Proceeds—For general corporate
Office—Newhouse Bldg., Salt Lake City, Utah.
Underwriter—Allied Underwriters Co., same address.

Price—$40 per share.
purposes.

Insurance Co., Miami, Fla.

Price—$3 per share. Proceeds—To
paid-in surplus. Underwriter—None.

it Great Western Metal Corp., Las Vegas, Nev.
May 2 (letter of notification) 300,000 shares of common
stock. Price — At par ($1 per share). Proceeds — For
.

mining expenses.* Office

—

43 Sierra St., Reno, Nev.

Underwriter—None.
•

Hackensack Water Co., Weehawken,

N. J. (6/15)'

18 filed $8,000,000 sinking fund debentures
June 1, 1985. Proceeds—To refund 2lk% notes due

due
Aug.
1, 1955, purchase securities of Spring Valley Water
Works & Supply Co., a subsidiary, and the balance for

May

— To be determined by
Probable bidders: Halsey, Stuart &
Inc.; Blyth & Co., Inc.; Dillon, Read & Co. Inc.;
White, Weld & Co.; Drexel & Co. and Central Repubilc
Co. Inc. (jointly); Kuhn, Loeb & Co. and W. C. Langley
& Co. (jointly).
Bids—Expected June 15.

new

construction.

Underwriter

competitive bidding.

S. C.

(letter of notification) 86,666 shares of com¬
(par $1). Price—$1.87% per share. Proceeds
—To increase capital and surplus.
Underwriters—McDaniel Lewis & Co., Greensboro, N. C.; Dietenhofer &

Harley Patents, Inc.
April 6 (letter of notification) 10,000 shares of capital
stock (par 10 cents.) Price—$1.50 per share. Proceeds—
For working capital. Office—580 Fifth Ave., New York
36, N. Y.

March 25

stock

Heartfeld, Southern Pines, N.

C.; and Calhoun & Co.,

Spartanburg, S. C.
* Fifteen Oil Co. (6/15)
May 25 filed 200,000 shares of common stock (par $1)
of which 175,000 shares are to be sold for account of
and
be

25,000 shares for selling stockholders.
supplied by amendment.
Proceeds—For

incident to oil activities. Underwriters—White,
& Co., New York, and Rotan, Mosle, Inc., Gal¬

expenses

veston,

2623 Hyperion

Co.

Federal Security Insurance

Weld

—

ing common stock and class B voting common stock on
basis of one share of Great Atlantic for each three
v

April 21 (letter of notification) 6,000 shares of common
stock (par $10) to "be offered first to stockholders on
the basis of one new share for each five shares held.

Price—To

Office

Angeles, Calif. Underwriter—None.

18 filed 108,000 shares of common class A non¬
voting stock (par $1.50) to be offered for subscription
by holders of State Fire & Casualty Co. class A non-vot¬

it Evans Products Co. (6/15)
May 20 filed $3,500,000 of convertible subordinate de¬
bentures due May 1, 1975.
Price — To be supplied by
amendment. Proceeds — To retire bank loans and for

company

For mining expenses.

Great Atlantic Life

notification) 12,500,000 shares of com¬
mon stock
(par one cent). Price—Two cents per share.
Proceeds—For mining expenses.
Office—c/o The Cor¬
poration Trust Co. of Nevada, 206 No. Virginia St., Reno,
Nev. Underwriter—Coombs & Co., of Washington, D. C.

mon

>

May

Elk Mountain Uranium Corp.

expansion program.

—

Ave., Los

March 18 (letter of

•

'

it Gold Shares, Inc., Los Angeles, Calif.
May 9 (letter of notification) 2,900,000 shares of common
stock.
Price—At par (10 cents per share). Pro¬

Price—At

($1 per share). Proceeds—For machinery and
ing and working capital. Office — 407 Liberty

Price—To be sup¬

Tucker, Anthony & Co., both of New York.

Electronics Co. of Ireland

par

stock; offer to expire June 7.

plied by amendment. Proceeds — To retire unexchanged
preferred stocks on or about July 16; and for working
capital.
Underwriters — The First Boston Corp. and

address.

Jan.

11

ferred

the Toronto Stock Exchange.

-

(6/1)

General Precision Equipment Corp.

•

stock (par

Proceeds—To American
Trading Co. Ltd., the selling stockholder. Underwriter—
R. W. Brown Ltd., Toronto, Canada, on a "best-efforts
basis."
''!■--''/V*
East Texas Loan & Investment Co.
Jan. 20 (letter of notification) 25,000 shares of common
stock (no par). Price — $10 per share. Proceeds—For
working capital. Office—203 East Cotton St., Longview,
Tex. Underwriter—D. G. Carter Investment Co., same
on

Fidelity Insurance Co., Mullins,

f

Sudbury Basin Mines, Ltd., **
Toronto, Canada
*Jan. 31 filed 3,000,000 shares of common stock (no pafY
Price—To be supplied by amendment.
Proceeds-L-F^r
Consolidated

through underwriters or

Gair
March

New York.

738,721^additional shares of capital stock
(par $10) to be offered for subscription by stockholders
of record June 2, 1955 at rate of one new share for'feach
10

Canada

—

search, for drilling expenses

April 27 filed

Underwriter—L. A. Huey Co., same city.

it Friden Calculating Machine Co., Inc. (6/8-9)
May 18 filed 78,400 shares of capital stock (par $1).
Price—To be supplied by amendment. Proceeds—To sell¬
ing stockholders. Office — San Leandro, Calif. Under¬
writer—Dean Witter & Co., San Francisco, Calif.

60,000 shares of common stock (par $1).
Price
At prevailing market price at time of public
offering. Proceeds—For plant modernization and im¬
provement program. Underwriter—Mortimer B. Burnside
& Co., Inc., New York, who will acquire the stock at
$4 per share.

used to pay for

•

Renovo, Pa.

Duraloy Co., Scottdale, Pa.

sale of 200,000 shares to Alator Corp. Ltd^ $nd
Yam Securities Ltd., and $175,000 treasury funds, fojbe

geological surveys and metallurgical |seand other general corporate .
Office—Toronto, Canada. Underwriter—$pn%,

Denver, Colo.

Columbia

May 10 filed

from

purposes.

(letter of notification) 600,000 shares of com¬
(par 10 cents). Price — 50 cents per share.
Proceeds—For mining expenses.
Office—235 Ivy St.,
stock

mon

(letter of notification) 500,000 shares of com¬
cents) to be offered for subscription

1

;

Denver, Colo.

April 22

stock (par 10

704 Erie Ave.,

Consolidated Fenimore Iron Mines Ltd.
;
Jan. 24 filed 204,586 shares of common stock (pajf;$7),
to be offered for subscription by common stockholders
of record Feb. 7, 1955 at the rate of one new shard for
each five shares held. Price—$2.20 per share. Proceeds
—From sale of this stock, plus $440,000 to be available
*

Omaha, Neb.

by stockholders. Price—25 cents per share. Proceeds—
For drilling operations and working capital.
Office—

#

^ Colzcna Oil & Uranium Corp., Denver, Colo.
/ April 29 (letter of notification) 3,000,000 shares of «&mmon stock (par five cents).
Price—10 cents per sUfcre.
Proceeds—For mining expenses.
Office—1300 Larlfner
.

,

No public

March
mon

V

it Fowler Telephone Co., Pella, la.
May 6 (letter of notification) $260,000 of 4% first mort¬
gage bonds, series A, due May 1, 1975. Price—At par
(in denominations of $1,000 each). Proceeds—To retire
existing debt, acquire Northwestern Bell properties in
Leighton, la., and for conversion of both exchanges to
dial operation.
Underwriter — Wachob-Bender Corp.,

the

Devonian Gas & Oil Co., Renovo,

•

shares for each Phila¬

Option Plan for Foremost officers, and key em¬

ployees.

Underwriter — American Securities Corp., New
offering contemplated at this time.

poses.

(pal%ne
gbbexpia¬

vesting Corp., New York.

;Stock

Uranium, Inc.

warrants for

common

delphia Dairy common share; and 152,499 shares are to
be reserved for issuance under Employees' Restricted

purchase of 200,000
shares of capital stock (par 25 cents—Canadian) at $1.50
per share and 200,000 shares of such stock. Price — At
the market price prevailing at the time of the sale of
the warrants.
Proceeds — For general corporate pur¬
filed

31

York.

fP
Montrose, Colo. (6/#)

(parjjve

-

&

Devon-Leduc Oils, Ltd., Winnipeg,
March

April 29 filed 600,000 shares of common stock
cents). Price—$1 per share. Proceeds—For purcha^a of
land and other facilities and for working capital. ^Of¬
fice— Grand Junction, Colo.
Underwriter—Genera^n-

*

the rate of five Foremost

Fremont Uranium Corp.,

St., Grand Junction 2, Colo. Underwriter —
Securities Co., Inc., Denver, Colo.

Underwriters—General Investing Cffitp.,
New York; and Shaiman & Co., Denver, Colo.
h
• Colorado Sports Racing Association
(6/15) ^
ate

*

Oil

per share.
Underwriters —

Dairies, Inc., Jacksonville, Fla.
April 21 filed 495,524 shares of common stock (par $2),
of which 343,025 shares are to be offered in exchange
for 68,605 shares of common stock; (par 25 cents) at

'

:■

Price—$43

Foremost

For

Cuba

Dalmid

cent), of which 2,500,000 shares are to be offered
licly. Price—50 cents per share. Proceeds—For
tion and development expenses and for general corgfer-

'

•

May 31.

■

$5).

May 9 (letter of notification) 2,999,000 shares of common
stock (par one cent). Price—10 cents per share. Pro¬
ceeds—For mining expenses.
Office—1730 N. Seventh

as

shares of common stock

■;/,V' 1

on

For construction program.

—

Kidder, Peabody & Co., and Merrill Lynch, Pierce, Fenner & Beane.
\ ■*

•

(Republic of) (5/31-6/2)
April 29 filed $2,500,000 of 4% Veterans, Courts and
/Public Works bonds due 1983. Price—To be supplied by
amendment.
Proceeds—To Romenpower Electra Con¬
struction Co. Underwriter—Allen & Co., New York.
•

-

it Coffee Time Products of America, Inc.
May 9 (letter of notification) 165,500 shares of class A
common stock
(par $1), to be offered in exchangosfor
stock of American Dry Ginger Ale Co., Inc., on basis of
one share of Coffee Time stock, for each AmericansDry
share. Underwriter — None. Office—47 Lemartine*St.,

1

Proceeds

Underwriter—Justin Steppler, Inc.,

Bldg., Casper, Wyo.

(6/7)

of first mortgage bonds due
Proceeds—To repay bank loans and for constTOgSbri
program. Underwriter—To be determined by competitive?1
.bidding. Probable bidders: Halsey, Stuart & Co. fi&eS*
Stone & Webster Securities Corp.; Kidder, Peabod^3®*
Co.
Bids
Expected to be received up to 10:30 Mm;
(CDT) on June 7.
Chieftain Uranium Mines, Inc.
April 22 (letter of notification) 4,000,000 shares of cj
tal stock. Price—At par (five cents per share). Proe
—For mining operations. Office—223 Phillips Petro
: Bldg., Salt Lake City, Utah.
Underwriter—Empire
May 6 filed $4,000,000

.

basis; rights to expire

of Memphis,

Crown Uranium Co., Casper, Wyo.
■ VV."./May 6 (letter of notification) 225,435 shares of common
stock (par five cents). Price—At market (estimated at
about 15 cents per share). Proceeds—To selling stock¬
holder who received these shares in exchange for shares
of Kontika Lead & Zinc Mines, Ltd.
Office—205 Star

(letter of notification) 746,280 shares of
stock (par one cent). Price — 25 cents per

(par $7.50) being offered for subscription by
of record May 11 on a l-for-10

stockholders

common

Underwriter—Allen & Co., New York.

of Tennessee.

Corp.

(letter of notification) 232,557 shares of com¬

stock

mon

V

April 27
mon

Florida Power

April 14

selling stockholders. Business — Sells industrial and
ordinary life insurance and accident insurance in State

.

(Utah)

Carbon Uranium Co.

cumula-

Corp., and to

May 16 filed 162,080 shares of common stock (par
Price-^-To be supplied by amendment. Proceeds —

Co.,

Miami,

Fla,
shares of common
Proceeds—To in¬
crease capital and surplus.
Office—7120 Biscayne Blvd.,
Miami, Fla. Underwriter—None.

•

Cosmopolitan Life Insurance Co.
Tenn. (6/6-7)

Insurance

March 14 (letter of notification) 3,000
stock (par $10). Price—$24 per share.

funds

•

•

Home

Florida

present

cumulative preferred stock when¬
ever such shares are presented for redemption; any funds
remaining to be added to working capital. Underwriter—
None.
/
;
(-:'
' ,;:
"• ■" '
v -, v
■' v.';:,

(amendment) $500,000 of 6% sinking
50,000 shares of common

\

to

ing corporation's 4%

California Tuna Fleet, Inc.

ment with drawn.

only

necessary to redeem outstanding 4%
cumulative preferred stock and common stock and Hold¬

debentures due 1967 and

-

offered

of G.L.F. Holding

stock

preferred

provide

^California Texas Oil Co., Ltd. (N. Y.)
.
?■
May 23 filed 83,000,000 of participations in the Employees
Savings Plan to be offered to eligible employees of "the
company and certain other participating companies.
Feb. 15 filed

be

to

retire class B common stock, redeem 5%

Offices—1522 East 145th St., &—To

Calif. Underwriter — None,
Grubb, President will handle sales.

(par. $5)

members of Federation Exchange" and to farmers in¬
terested in becoming members. Price—At par. Proceeds

capital stock
share. Proceeds—For expenses

Gardena,

*

stock

mon

it Cal-Cobra Oil Corp., Gardena, Calif.
April 9 (letter of notification) 800 shares of

Tex.

Underwriter—E. E. Smith Co., same city.

Hartford Gas Co., Hartford, Conn.

May 10 filed $1,500,000 of 3J/4% 10-year convertible de¬
bentures due July 1, 1965, to be offered first to preferred
and common

stockholders of record May 6 at rate of $25

principal amount of debentures for each three shares of
stock held.
Price—At par.
Proceeds—To repay bank
loans and for additions and improvements. Underwriter
—None.
•

Hartford Special

t

Machinery Co.

May 2 (letter of notification) 8,140 shares of common
stock being offered for subscription by common stock¬
holders of record May 24 on a l-for-5 basis; rights to

Continued

on

page

40

40

(2448)

The Commercial and Financial Chronicle

Thursday, May 26, 1955

..,

'

i

Continued from page 3$

if Investment Trust of Boston, Boston, Mass.
May

**plr£ 6n June 21.

Price—At par ($20 per share). Pro¬
to finance carrying of in¬

working capital

ceeds—For

creased inventories.

Hawk Lake Uranium

•

(6/1-2)

Corp.

Co., New York

Underwriter—Dobbs &

etc.

Heat-Timer Corp.

Iowa

of

j

Heliogen Products, Inc.
(par $1), of which 12,670 shares are being offered
by

stockholders

up

Service

May

additional

an

Israel

mar¬

to

and

including

June

15, 1955, and 10,000 shares are to be offered pub¬
licly. Price—$5 per share. Proceeds—For working capi¬

Feb.

11,

Underwriter—None.

Pecan

and for construc¬

28

Plantations,

common

stock

—Natanya, Israel, and New York, N. Y.
Jarmon

Properties & Oil Development Corp.
Jan. 17 (letter of notification) 30,000 shares of captal
stock. Price—At par ($10 per share). Proceeds—For fur¬
ther exploration and development. Addres—P. O. Box
1109, Wichita Falls, Tex. Underwriter—John A. Aicholt2
&

Associates, 505 Macon St., Fort Worth, Tex., and

an¬

other.

tal, etc.

High Pressure Equipment Co., Inc., Erie, Pa.
v
April 8 (letter of notification) 26,000 shares of common

debentures due June 1, 1975. Price—100% and accrued
interest. Proceeds—To repay $450,000 of 4% promissory
notes and for general corporate purposes and working

stock
repay

(par $1). Price — $2.25 per share. Proceeds—To
short-term loans, and for new equpiment and

working capital. Office—1222 Linden Avenue, Erie, Pa.
Underwriter—Reitzell, Reed & Co., Erie, Pa.
Home-Stake Production Co., Tulsa, Okla.
May 12 filed 60,000 shares of capital stock (par $5) and

1,000

of 60

(par $100)

debentures

units

shares

of stock

be offered for sale in
$100 debenture, or

to

and

one

multiples thereof. Price—$400 per unit. Proceeds—For
-working capital. Underwriter—None. O. Strother Simp¬
son,

of Tulsa, Okla., is President.

Horseshoe

v-\;:

Bend

Uranium, Inc.
March 16 (letter of notification) 150,000 shares of com¬
mon stock (par one cent).
Price—$2 per share. Proceeds
—For

exploration

and development

expenses.

Office—

10 West 2nd

South, Salt Lake City, Utah. Underwriters
—James Anthony Securities Corp., New York; Lawrence
A. Hays Co., Rochester, N. Y., and Ned J. Bowman Co.,
Salt Lake

City, Utah.

v

Horton Aircraft Corp.,

and

company

construction

of

Las Vegas, Nev.

and expenses

Price—$1

model

of

per

share. Proceeds—For
Wingless Aircraft"

"Horton

incident thereto.

Underwriter—None.

Illinois American Casualty Co.
May 5 filed 100,000 shares of

common

stock

(par $2).

Illinois American Fire Insurance Co.

(6/3)
663,469 shares of capital stock to be of¬
fered for subscription by stockholders of record June 3,
1955, on the basis of one new share for each six shares
held; rights to expire on June 30. American Telephone

Underwriters

i( Jewel Tea Co., Inc.
(letter of notification) 5,555 shares of common
(par $1) to be offered to employees under stock

May 6

purchase plan. Price — $2 per share under the closing
on the New York Stock Exchange on the day be¬

price
fore

application to purchase stock is accepted.
working capital and general corporate

—For

Office—1955 West North

purposes.

of

mining expenses. Office—1946- S. Main St.,
City, Utah. Underwriter — Guss & Mednick
Co., Salt Lake City, and Moab, Utah.
• Industrial Hardware
Mfg. Co., Inc. (6/15)
May 12 (amendment) $1,500,000 of 5% debentures due
3975 and 300,000 shares of common stock (par 50 cents),
of which 85,000 shares are to be sold to Seymour and'Bernard Offerman at $5 per share.
Price—To be sup¬
plied by amendment/ Proceeds—To purchase Hugh H.
Eby Co. and Wirt Co. Underwriters—Milton D. Blauner
& Co., Inc., New York;
Hallowell, Sulzberger & Co.,
Philadelphia; and Baruch Brothers & Co., Inc., New

York.

<

International Breweries, Inc. (6/1-2)
May 12 filed 500,000 shares of common stock

by amendment.

31

stock

mon

&

Ave., Melrose Park, 111. Under¬

Tool Co.

(letter of notification) 33,745 shares of com¬
(par $1) being offered for subscription by

stockholders at the rate of

Price—$5.35

one

share for each two

new

share to stockholders; and
after 30 days (about June
6), to public at $6 per share.
Proceeds—To purchase new plant site and shop build¬
ing, and to increase inventory and working capital. Of¬
fice—801 Fourth Ave., Grand Junction, Colo.
Under¬
writer—Taylor & Co., Chicago, 111.
per

Kane Creek Uranium

Corp.
April 1 (letter of notification) 6,000,000 shares of capital
stock.
Price—At par (five cents per share).
Proceeds
—For mining expenses. Address—P. O. Box
528, Moab,
Utah.

Underwriter

Mid-America

—

Securities,

Inc.

be offered

'

for

construction

Under¬

Corp. and Blyth & Co., Inc.,

drilling

.

28

per

share.
and

expenses

West

Proceeds—For development
other

Second South,
Underwriter—None/*"
■
—

corporate

purposes.

Salt Lake City, Utah.
'''
'""v.

Knapp Uranium & Development Co.
April 21 (letter of notification) 20,000,000
common

shares

of

stock. Price—At par (one cent per share). Pro¬

ceeds—For mining expenses. Office—2174 S. Main
St.,
Salt Lake City, Utah. Underwriter — Guss & Mednick

Co.,
•

same

(par $1).

Proceeds—To¬

gether with other funds, to be used to finance acquisi¬
Office—De¬
troit, Mich.
Underwriter—Shields & Co., New York.

tion of assets of Frankenmuth Brewing Co.

International Fidelity Insurance Co., Dallas, Tex.
March 30 filed 110,000 shares of common stock
(no par).

share. Proceeds—To 12 selling stock¬
Underwriter—Name to be supplied by amend¬
per

ment.

it International Glass Corp., Southgate, Calif.
May 10 (letter ;of notification) approximately 55,000
shares of common stock (par $1). Price — At market
—

Proceeds—To

city.

Kurman

including Kuhn,
Co.; United California Theatres, Inc.; Harris,
Upham & Co.; Prudential Theatres, Inc.; Carl M. Loeb,
Rhoades & Co.; Brown Brothers Harriman &
Co.; and
United Artists Theatre

Marine Midland

Circuit, Inc.

May 17 filed 45,000 shares of common stock (par $5) to
be offered in exchange for all issued and
outstanding
capital stock of The First National Bank of Falconer,
N. Y„ at rate of 30 shares of Marine stock for one of
First National held of record June

The offer is sub¬

First National.

Mcintosh

Laboratory, Inc.
(letter of notification) 1,000 shares of common
(par $10). Price—$18.50 per share. Proceeds—For
working capital. Office—320 Water St., Binghamton,
May 3

stock

N. Y. Underwriter—None.

Mechling

(A. L.)

Barge Lines, Inc., Joliet, III.
$837,252 of instalment note certificates to
be offered in exchange for the 3,578 shares of authorized

March 31 filed

and issued

$234

stock of Marine Transit

common

per

share.

The balance of $1 of

a

Co.

at rate

total purchase

offer price of $235 per share is to be paid in cash.

The

exchange will be contingent upon acceptance of the
offer by holders of not less than 81% of the MarineTransit shares.

Statement effective May 11.

'

Mehadrin

Plantations, Inc., New York
April 28 filed 70,000 shares of common stock (par $10).
Price—$10.75 per share. Proceeds—For acquisition oT
additional

groves and working capital and other gen¬
eral corporate purposes. Business—Production and saleof citrus fruits in State of Israel; also plans to
grow sub¬

tropical fruits.

Underwriter—None.

Midwestern

United

Life

Insurance

Co.

April 14 (letter of notification) 75,000 shares of commonstock to be offered for
subscription by stockholders on a.
l-for-4 basis. Price—$2 per share. Proceeds—For
capital!
and surplus. Office—229 West
Berry St., Fort Wayne,.
Ind. Underwriter—None.

Millsap Oil & Gas Co., Siloam Springs, Ark.
March 17
mon

(letter of notification) 599,200 shares of com¬
(par 10 cents). Price — 50 cents per share.

stock

Proceeds—For

oil and

activities.

gas

St., Siloam Springs, Ark.
ment

Office—518

Mainr.

Underwriter—Dewitt Invest¬

Co., Wilmington, Del.

Monarch

Uranium Co., Salt Lake City. Utah
(letter of notification) 15,000,000 shares of;
capital stock. Price—At par (one cent per share). Pro¬
March

28

ceeds—For mining operations. Office—430 Judge
Bldg.,.
Salt Lake City, Utah. Underwriter—Ned J. Bowman
Co.,.

city.

same

stock

(John) & Co., Ottumwa, Iowa
(letter of notification) 16,000 shares of capital,

(no

par)

be

to

offered

in

number of shares of John J. Felin

payment.

exchange

for

Co., Inc., plus

a

like-

a

cast*

Underwriter—None.

if Mueller Brass Co. (6/13-14)
May 23 filed $5,000,000 of convertible subordinated de¬
bentures

due June

amendment.

1, 1975.

Price — To be suppled byexpansion.
Underwriter—

Proceeds—For

Multi-Minerals Corp., Salt Lake City, Utah
May 5 filed 1,500,000 shares of common stock (par one
cent).
Price—$1 per share.
Proceeds—For payment on>
uranium
claims and. for exploration and other costs.
Underwriter—M. Raymond & Co., Inc., New York.

National Credit Corp., Phoenix, Ariz.
May 6 filed 300,000 shares of common stock (par $1)„
Price—$3 per share.
Proceeds—For working capital.

Underwriter—None.

if National Light & Pump Co., Denver, Colo.
April

29
(letter of notification)
2,000 shares of 1%,
cumulative preferred stock (par $100) and 12,000 shares

Wazee St., Denver, Colo.

if La Sal Uranium Corp., Salt Lake City, Utah
(letter of notification) 2,850,000 shares of com¬
stock (par five cents).
Price—10 cents per share.

Proceeds—For

mining expenses.
Office—209 Phillips
Petroleum Bldg., Salt Lake City, Utah.
Underwriter—
Amos C. Sudler & Co.,
Denver, Colo.
LeBlanc Medicine Co., Inc.,
Lafayette, La.
April 6 filed 1,000,000 shares of common stock (par 10
cents).
Price—$1 per share. Proceeds—For purchase
of land, plant,
warehouse, office building and equip¬
ment; and additional working capital. Business—Proc¬
essing, packaging and merchandising of new proprietory

iqedicine, KARY-ON.

Underwriter—None.

^ Hi J M & M Oil Co., San Francisco, Calif.
May 10 (letter of notification) 397,849 shares of capital
(par 10 cents)

1.

ject to acceptance of not less than 80% of the stock of

magnetic control apparatus. Office—35-18 37th St., Long
Island City, N. Y. Underwriter—John R. Boland & Co.
Inc., New York. Offering—Expected next week.

stock

'

Corp., Buffalo, N. Y.

of

stockholders.

"Okla¬

of

present holders,

Electric Co., Inc.
(5/31-6/3)
May 2 (letter of notification) 100,000 shares of common'
stock (par 25 cents). Price—$3 per share.
Proceeds—
For equipment and
working capital. Business—Electro¬

mon

distribution

the
per¬

Lehman Brothers, New York.

March 31 (letter of notification) 260,000 shares of
capital
stock to be offered for subscription by stockholders.
Price—50 cents

1/6,000th of 5/12ths of Magna's

&

March 31

(6/10)

program.

receive

par¬

Morrell

May 11

Proceeds
To selling stockholders!
Underwriter
Francis L duPont & Co., Los Angeles, Calif.

homa."

of

for

and

to

centage of profits due from the

Proceeds

writer—None.

Office

Salt Lake




purposes.

stock

and

"

Price—At par (one cent per share). Pro¬

—

corporate

King Oil Co., Salt Lake City, Utah

ceeds—For

holders.

general

writers—The First Boston

Uranium

Price—$6.50

and

Aistyne, Noel & Co., New York; and Butcher &
Sherrerd, Philadelphia, Pa. Offering—Not expected un¬
til latter part of June.

both of New York.

Telegraph Co., the parent, owns 99.32% of the pres¬
ently outstanding stock. Price—At par ($100 per share).
Proceeds—For repayment of. advances from parent com¬

To be supplied

capital
—Van

tire bank loans

&

—

19

common stock (no par)
subscription by common stockholders
of record June 9, 1955 on the basis of one new share for
each 10 shares held; rights to expire on June 27, 1955.
Price—To be supplied by amendment. Proceeds—To re¬

Illinois Bell Telephone Co.

Price

filed 200,000 shares of common stock (par 10
Price—$4 per share. Proceeds — For working

to

May 17 filed

April 25
capital stock.

May

cents).

May 23 filed 245,000 shares of

Corp., Salt Lake City, Utah
(letter of notification) 15,000,000 shares

holder

of

(Pa.)

if Kansas City Power & Light Co.

May 5 filed 100,000 shares of common stock (par $2).
Price—$5 per share. Proceeds—To engage in insurance
business. Office—Champaign, 111. Underwriter—None.

Inca

stock), and 6,000 outstanding units of "Oklahoma"
ticipation, certificates
(each certificate entitling

Utah, 26 West Broadway, Salt Lake City, Utah,

share. Proceeds—To engage in insurance
business. Office—Champaign, 111. Underwriter—None.
per

Underwriter—None.

ic Jerrold Electronics Corp.

shares held.

Co., Dallas, Texas.

pany.

Underwriters—Van

Aistyne, Noel & Co., New
York; and Butcher & Sherrerd, Philadelphia, Pa. Of¬
fering—Not expected until latter part of June.

March

Humble Sulphur Co., Houston, Texas
April 25 filed 500,000 shares of common stock (par 10).
Price—$1.20 per share. Proceeds—For exploration for
sulphur and related activities. Underwriter—Garrett &

Price—$5

capital.

Junction Bit

100,000 shares for account of William E.

Horton, President.

(Pa.)
/
May 19 filed $2,750,000 of 6% convertible subordinated

<

April 26 filed 500,000 shares of common stock (no par),
of which 400,000 shares are to be offered for account of

if Magna Theatre Corp., New York
May 23 filed 122,300 shares of common stock (par five
cents), 6,000 outstanding warrants for the purchase of
439,800 shares of common stock (as well as the common

(par one Israeli pound). Price—$10 per share. Proceeds
—For capital expenditures. Underwriter—None. Offices

if Jerrold Electronics Corp.

Office—35-10 Astoria Blvd., Long Island City,
N. Y. Underwriter—Smith & Co., Waterville, Me.

Sansome

Loeb

V

-

Ltd.
filed 24,900 shares of ordinary

bank loans and for working capital. Office—155
St., San Francisco, Calif. Underwriter—None,

repay

200,000

Price—At

Co.

Proceeds—To repay bank loans

tion program.

(6/2)

March 7 (letter of notification) 22,670 shares of common

subscription

Public

record

„

100,000 shares of common
stock (par 20 cents). Price—$1.50 per share. Proceeds—
For expansion and working capital. Office—657 Broad¬
way, New York 21, N. Y.
Underwriters — Milton D.
Blauner & Co., Inc., New York, N. Y.; and Hallowell,
Sulzberger & Co., Philadelphia, Pa.

for

amendment)

1955 at rate of one new share for
each
10 shares held
(with an oversubscription privi¬
lege); rights to expire on June 1. Price — $15.50 per

May 6 (letter of notification)

Mock

(by

Proceeds—For investment.

share.

City, will act as agents.
-

filed

April 20 filed 270,220 shares of common stock (par $5)
being offered for subscription by common stockholders

April 12 filed 200,000 shares of common stock (par 10
cents). Price—$1.50 per share. Proceeds — For mining
expenses,

ket.

Office—287 Homestead Ave., Hart¬

Underwriters—None.

ford, Conn.

23

shares of beneficial interest in the Trust.

to

Price—50

be offered for subscription by
cents'per share. Proceeds—To

comomn

shares
stock.

of

stock

(par $1 )to be offered in units of four

preferred

Price—$500

tribution

markets

stock

per

and

25

shares

of

Proceeds—To broaden dis¬

for

Office—-

and

working caoital.
Underwriter—None.

if National Telefilm Associates, Inc.,
New York
(6/14-15)
May

19

filed

375,000

common

unit.

shares

of

common

/

stock

(par ID

cents), of which 312,500 shares

are to be offered
publicly
exchange for outstanding
securities of Ely Landau, Inc. Price—$5 per share. Pro¬
ceeds—For payment of loan,
working capital and other

and

62,500

shares

corporate purposes.
New York.

issued

in

Underwriter—Charles Plohn & Co.,.

New Bristol Oils., Ltd.,
Toronto, Canada
April 11 filed 2.400,000 shares of common stock (par
$l)v
of which 1,600,000 shares were issued to
Newton-Conroe1
Oil Corp. and 800,000 shares to The
Phoenix-Campbell?
Corp., in exchange for properties. Newton-Conroe is dis¬

tributing its stock to its stockholders in

a

liquidation.

As holder of 51% of the Newton-Conroe
stock, Phoenix-

Campbell will receive about 800,000 shares which it pro¬
poses to offer to the public, together with the
800,00(T
shares received directly from New Bristol Oils. Price—

Volume 181

At .market.

Number 5432

...

The Commercial and Financial Chronicle

^Proceeds—To selling stockholder.

Under¬

writer—None, the distributing stockholders having

un¬

dertaken to market their
holdings directly.

ijr Nw Era Metals, Inc., Steamboat

Springs, Colo.

April 29 (letter of notification) 1,500,000 shares of com¬
mon stock. Price—At
par (10 cents per share). Proceeds
—For mining operations. Office—414 Oak
St., Steam¬
boat Springs^ Colo. Underwriter
Justice B. Detwiler,
517 Empire
Bldg., 430 16th St., Denver, Colo.
—

New

Haven

Water

Co.

(6/15)

May 17 filed 40,000 shares of capital stock (par $50) to
be offered for subscription by stockholders of record
June 15, 1955 on basis of two new shares for each seven
shares held. Price—$51 per share. Proceeds—-To
repay
bank

loans

for

and

Haven, Conn.

new

construction.

Office

—

New

Underwriter—None.

May 2 (letter of notification) 8,000,000 shares of common
Price—At par (three cents per share). Proceeds
—For mining expenses. Office—El Rancho
Hotel, Gallup,

stock.

Underwriter

—

additional share at prices

Rocky Mountain Securities, Salt

derwriter—None.

Pomona Tile

•

Potomac Electric Power Co.

each

purchase outstanding stock of Anson Telephone & Tele¬
graph Co., for
Address—P.

new

O.

Box

construction and working capital.
38, Matthews, N. C. Underwriter—

R. S. Dickson & Co.,

Charlotte, N. C.; McCarley & Co.,

Asheville, N. C.
North Penn Gas

Co., Port Allegany, Pa.

•April 29 filed 419,000 shares of capital stock (par $5).
Price—To be supplied by amendment.
Proceeds—To
John

Fox of

Boston,

Mass., who is the selling stock¬
holder. Underwriter—To be named later (may be East¬
man, Dillon & Co. and Allen & Co., both of New York),
r
North Pittsburgh Telephone Co.
"May 5 (letter of notification) 2,000 shares of common
stock to be offered for subscription
by common stockholders. Price—At par ($25 per share). Proceeds—To
reduce bank loans. Office—Gibsonia, Pa.
Underwriter
-

-At Oklahoma Gas A Electric Co. (6/21)
May 23 filed $15,000,000 of first mortgage bonds due
June 1, 1985. Proceeds — To repay bank loans and for
.new construction. Underwriter
To be determined by
—

competitive bidding. Probable bidders: Halsey, Stuart &
Co. Inc.; Equitable Securities Corp.; Merrill Lynch,
'Pierce, Fenner & Beane and White, Weld & Co. (jointly);
Brothers and

Blyth & Co., Inc.

(jointly); The

First Boston Corp.; Kuhn, Loeb & Co.; Harriman Ripley
& Co. Inc. and Union Securities Corp.
(jointly); Smith,

Barney & Co. Bids—Expected to be received up to 11
a.m. (EDT) on June 21 at The Chase Manhattan
Bank,
15 Broad St., New York 15, N. Y.
Old Faithful Uranium, Inc., Casper, Wyo.
April 22 (letter of notification) 4,500,000 shares of com¬
mon stock (par one cent).
Price—-Five cents per share.
Proceeds—For mining expenses.
Office—300 Consoli¬
dated Royalty Bldg., Casper, Wyo. Underwriter—E. L.
Aaron & Co., New York.
•

Penn-Dixie Cement

Corp.

May 6 filed 361,282

shares of capital stock (par $1)
being offered for subscription by stockholders of record
May 25 on the basis of one new share for each six
shares held; rights to expire on June 10. Price—$27.75
per share.
Proceeds — To repay bank loans and for
working capital. Underwriter—Dominick & Dominick,
New York.

Peoples Finance Corp., Denver, Colo.
May 2 filed 50,000 shares of 60-cent cumulative con¬
vertible preferred stock (par $5). Price—$10 per share.
Proceeds—To reduce bank loans.

Underwriter—Paul C.

Kimball & Co., Chicago, 111.

2

the

at

estimated

for each ten share held

lege); rights to

rate

(with

of

an

one

additional

share

oversubscription privi¬

empire

on June 24. Price—To be sup¬
plied by amendment. Proceeds—To repay bank loans,
acquire additional stock of Peoples Production Co. and
for general corporate purposes.
Office — Chicago, I1L
Underwriter—None.

it Personal Industrial Bankers, Inc.,
Washington, D. C.
May 23 filed 60,000 shares of $1.40 prior preferred stock
($18 stated value) and 60,000 shares of common stock
(par 10 cents) to be offered in units of one share of each
class of stock.

Price

—

To

be supplied

by amendment.

Proceeds—For working capital to be used

increase receivables
assets

or

primarily to

for the acquisition of additional

from

Lemon &
•

others, or both. Underwriter
Co., Washington, D. C.

—

Johnston,

Peruvian Oils &

Minerals, Ltd. (6/1)
April 27 filed 225,000 shares of capital stock (par $1).
Price—To be supplied by amendent. Proceeds—For ex¬
ploration and development work and working capital.
Office
Toronto, Canada. Underwriters
Doolittle &
Co., Buffalo, N. Y. and Davidson Securities, Ltd., To¬
ronto, Canada.
—

—

Philadelphia Daily News, Inc.
(letter of notification) 50,000 shares of common
stock (par $1) to be offered for
subscription by stock¬
holders of record March 24. Price—$6 per share. Pro¬
Feb. 24

ceeds—For
22nd

Accumulation

of

Common

—

stock

of

the

com¬

Issuer—Capital Reserve Corp., Washington, D. C.

Precision Radiation Instruments,

Inc.
April 28 filed 225,000 shares of common stock (par 50
cents), of which 165,000 shares are to be offered for
account of company and 60,000 shares for selling stock¬
holders.
Price—To be supplied by amendment. Pro¬
ceeds—For acquisition of real property and other new
plant facilities; and for working capital. Office—Los
Angeles, Calif. Underwriter — Dempsey-Tegeler & Co.,
St. Louis, Mo.
it Primary Minerals Corp., San Francisco, Calif.
MJay 24 filed 1,400,000 shares of common stock (par one
cent). Price—50 cents per share. Proceeds—For acquisi¬
tion of mining equipment and other mining expenses.
Underwriter—General Investing Corp., New York.

it Prudential Discount Corp., Dallas, Tex.
May 9 (letter of notification) 17,904 shares of 7%

;

cumu¬

lative preferred stock (no par) and 17,904 shares of com¬
stock

mon

(par

one

cent) to be offered in units' of one

and

modernization

Arch

and

improvements.

Streets, Philadelphia, Pa.

Office—

Underwriter

—None.
Pioneer Mortgage & Development Corp.
April 27 filed 300,000 shares of common stock (par $1),
with warrants attached entitling the holder to purchase




of each class of stock.
Price—$10.01 / per, unit.
Proceeds—To purchase outstanding voting common stock
of General Finance Co. of Texas. Office—943 National

City Bldg., Dallas, Texas. Underwriter—None,

/

v

PuMic Service Co. of Colorado (6/3)
^ f
May 13 filed 303,010 shares of common stock (par $10),
of which 275,464 shares are to be offered for subscrip¬
tion by common stockholders of record June 3 on the
basis of

one new

on

one

share

Pollock

of

outstanding.

are

stock

of

which

42,00$

This offer is subject to deposit

of 80% of Pollock stock.

>

Samicol Uranium Corp., Santa Fe, N. M.
Sept. 14 filed 300,000 shares of common stock

(par 10
Price—$2 per share. Proceeds—For develop¬
exploration expenses/ etc.
Underwriters—|L
V. Klein Co. and McGrath Securities Corp., both ©£

cents).

share for each 10 shares held;

rights to

New York.
San

Miguel Uranium Mines, Inc.

(letter of notification) 2,000,000 shares of

Jan. 6

commas,

Price—15 cents per share. Pro¬
operations. Office —Mineral Bldg,
Grand Junction, Colo. Underwriter — Tellier & Co*.
Jersey City, N. J.

stock

(par

one

cent).

ceeds—For mining

Rafael

San

March

4

common

Uranium Co.

of Maryland

of notification) 15,000,000 share?,.pf
Price — At par (one cent per share).

(letter
stock.

Proceeds—For

mining expenses.
len-Bybee Co., Washington, D. C.

Underwriter—Lavfei-

Uranium Mines Ltd., Toronto,

Saxon

Canada

April 29 filed 1,500,000 shares of common stock (par $1),
Price—40 cents per share.
Proceeds—For exploration
and working capital; also to repay advances and other,
Underwriter

liabilities.

—

Degaetano Securities Corp*

New York.

:

Securities Acceptance Corp., Omaha, Neb.

May 9 (letter of notification) 6,000 shares of 5% cumu¬
lative preferred stock (par $25). Price—$26.25 per shar&
Proceeds—For working capital. Office—304 South 18th

Underwriters—Cruttenden & Co., Chi¬
Omaha, Neb.; and The

St., Omaha, Neb.

cago, 111,; Wachob-Bender Corp.,
First Trust Co. of Lincoln, Neb.

'

,

Shield Chemical Corp.
April, 19 (letter of notification) 182,211 shares, of com^
mon stock (par;7.% cents).
Price—$1.50 per share,.Pro¬
ceeds—For working capital, etc.
Office — 251 Grove
Ave., Verona* ;N, J. Underwriter—None.
■
■ ^

,0:

•

X

Uranium Corp.,

Riverton, Wyo. r
April 21 (letter, of notification) 2,000,000; shares Of .com¬
mon stock (par one. cent),
Price — 15 cents per share.
Shoni

Proceeds

—

.

For mining expenses.

Underwriter

Riverton, > Wyo.
Denver, Colo.

—

Address

—

Box 489,

Melvin F. Schroeder,

program.
Underwriters—The First Boston Corp.,
Blyth & Co., Inc. and Smith, Barney & Co., all of New

Sightmaster Corp., New Rochelle, N. Y.
April 19 (letter of notification) 165,000 shares of com¬
mon stock (par five cents).
Price—At market (about 30
cents per share).
Proceeds — To Michael L. Kaplan,
President and Treasurer. Business—Electronic products.

York.

Underwriter—None.

expire

on

June 20.

The remaining 27,546 shares

are

to

offered for sale to officers and employees. PriceTo be supplied by amendment. Proceeds—For construc¬
be

tion

•

Public Service Co. of New Hampshire

May 4 filed 413,016 shares of common stock (par $5)
being offered for subscription by common stockholders
of record as of May 24 on the/ basis of one new share for
each six shares held; rights to expire on June 7. Em¬
ployees to be offered right to subscribe for up to 10,000
unsubscribed shares. Price—$16.75 per share. Proceeds
—To repay bank loans and for construction program.
Underwriters—Kidder, Peabody & Co. and Blyth & Co.,
Inc., both of New York.

it Signode Steel Strapping Co. (6/7-8)
May 18 filed 160,000 shares of common stock (par $1),
of which 100,000 shares are to be sold for account ci
company and 60,000 shares for account of certain stock¬
holders.
Price—To be related to current market price
of outstanding stock immediately prior to offering. Pro¬
ceeds—For additional plant facilities and working capi¬
tal. Underwriters — White, Weld & Co., and Lehman
Brothers, both of New York; and McCormick & Co.,
Chicago, 111.

Dec. 22filed 250,000

shares of cumulative preferred stocfc
(par $100). Price—To be supplied by amendment. Pro¬

March 31 filed $600,000 of

Corp. (6/7)
10-year convertible 6% de¬

bentures due June 30, 1965.

Price—At 100% of principal

ceed*—To reduce bank loans and for construction pro*

amount

Underwriters-t-Morgan Stanley & Co.; Drexel &
Co.; and Glore, Forgan & Co. Offering — Temporarily
delayed.

For

Public Service Electric & Gas Co.

,

gram.

•

Pyramid Electric Co., North Bergen, N. J.
May 3 filed 75,000 shares of 5% cumulative convertible
preferred stock. Price—At par ($10 per share). Pro¬
ceeds—For new facilities, equipment and machinery and
working capital. Underwriter—S. D. Fuller & Co., New
York. Offering—Expected early in June.
U

vesting Corp., New York.
Sonic Research Corp.,

it Rambec Exploration Corp., Las Vegas, Nev.
May 5 (letter of notification) 1,180,000 shares of common
stock (par 10 cents). Price—25 cents per share. Pro¬
ceeds—For mining expenses.
Office—230 S. Fifth St.,
Las

Vegas, Nev.

Underwriter—None.

Revere Realty,

Inc., Cincinnati, Ohio
March 8 filed $1,000,000 of 5%% cumulative convertible
debentures due Jan. 1, 1980 and 25,000 shares of common
stock (no par). Price—Par for debentures and $100 per
share for stock. Proceeds — To purchase real estate or
interest therein. Underwriter—Stanley Cooper Co., Inc.,
Cincinnati, O.
e Robinson
Aviation, Inc. (6/1-7)
May 6 filed 100,000 shares of common stock (par 20
cents), of which 40,000 shares are for account of com¬
pany and 60,000 shares for selling stockholders. Price—
$6.50 per share.
Proceeds—To redeem 5% cumulative
preferred stock and for research and development activi¬
ties and expansion of facilities. Office—Teterboro, N. J.
Underwriter—Homer O'Connell & Co., Inc., New York.

$1).
and
general corporate purposes. Underwriters—J. P. Marto
& Co., Boston, Mass.; Boenning & Co., Philadelphia, Pa.r
and First New

—None.

Hampshire Corp., Concord, N. H,

Sonoma Quicksilver

Mines, Inc.

April 27 filed 800,000 shares of capital stock (par 10
cents), of which 80,000 shares are to be initially offered
to public. Price—To be fixed on the basis of the market
value at the time of their first sale or $1 per share,
which ever is lower. Purpose — To increase facilities

quicksilver properties; and for work¬
Office—San Francisco, Calif. Underwriter
R. Whittall, Ltd., Vancouver, B. C., Canada.

and invest in other

ing capital.
—Norman

Southeastern Public Service Co.

of notification) 28,000 shares of common
cents) being offered in exchange for
(par $1) on the basis
of 3% Southeastern shares for each Hamilton share. This
offer shall terminate when offer shall have been accept¬
Jan. 24 (letter

stock

(par

10

Hamilton Gas Corp. capital stock

by Hamilton stockholders owning not in excess oL
8,000 shares of Hamilton stock. Office—70 Pine St., New
York 5, N. Y. Underwriter—None.

ed

it Southeastern
New

York

Public Service Co.,

(6/9)

May 20 filed 100,000 shares of common stock (par 10
cents) to be offered for subscription by stockholders of
record June 8 on the basis of one new share for each

eight shares held. Price — To be supplied by amend¬
ment.
Proceeds—For general corporate purposes, in¬
cluding
Bioren &

it Saint Anne's Oil Production Co.
May 9 (letter of notification) 20,000 shares of common
stock (par $1) to be first offered to stockholders. Price
—$6.25 per share. Proceeds — For oil and mineral and
related activities. Office—Northwood, Iowa. Underwriter

Boston, Mass.

April 18 filed 150,000 shares of common stock (par
Price—$7 per share. Proceeds—For working capital

•

Pyramid Electric Co., North Bergep, N. J.
May 3 filed 50,000 shares of common stodkJ (par $1).
Price—To be supplied by amendment. Proceeds — To
selling stockholders. Underwriter — S. D. Fuller & Co.,
New York. Offering—Expected early in June.

Silver Creek Precision

(in denominations of $100 each). Proceeds—
working capital and general corporate purposes.
Office—Silver Creek, N. Y. Underwriter—General In¬

•

Peoples Gas Light & Coke Co. (6/3)
May 9 filed 111,836 shares of capital stock (par $100)
to be offered for subscription by stockholders of record
June

Proceeds

share

—None.

Lehman

share.

June 7.
For construction
on

it Potomac Electric Power Co.
May 24 filed $1,000,000 of Potomac Plans for the Sys¬
pany.

Proceeds—To

per

held; rights to expire

Underwriters—Dillon, Read & Co. Inc., New
York; and. Johnston, Lemon & Co., Washington, D. C.

^ North Carolina Telephone Co., Matthews, N. C.
May 10 (letter of notification) 250,000 shares of com¬
Price—At par ($1 per share).

shares

program.

tematic

stock.

10

$19.50

—

Paper Co.,

ment and

May 2 filed 511,660 shares of common stock (par $10)
being offered for subscription by common stockholders
of record May 23, 1955, on the basis of one new share
for

common stock (par $5)
exchange for common stock of Pollock
the basis of 6.8095 shares of St. Regis

to be offered in

stock for

Manufacturing Co.

41

St. Regis Paper Co.
May 12 filed 369,999 shares of

shares

April 25 filed 120,928 shares of common stock (par $1).
Price—Expected to be $5 per share. Proceeds—To re¬
tire bank loan and for general corporate purposes. Un¬
derwriter—Crowell, Weedon & Co., Los Angeles, Calif.

Hake City, Utah.

mon

ranging from $13 to >$20

depending upon the exercise date. Price—$10 per share
"as a speculation." Proceeds—For working capital and
general corporate purposes. Office—Houston, Tex. Un¬

Price

• Newmex Uranium & Development Corp.

N. M.

one

(2449)

•

investments in subsidiaries.
Co., Philadelphia, Pa.

Underwriter

—

Southern California Edison Co.

April 19 filed a maximum of $40,950,600 of convertible
due July 15,. 1970, being offered for sub¬

debentures

scription by holders of original oreferred and common
Continued on page 42

Financial Chronicle

The Commercial and

42

Continued jrom page
Btock

pire

May 16 filed 60,000 shares

construc¬

of cumulative preferred stock

Thursday, May 26, 1955

poses.OPOnderOT?ter^Gearhart Ifotts,
Crerie & Co

,

ft..Ele, ,c?i.

o

—Fnr mininP'

and Vermilye

o

c

nur

j*

Proceeds—lo repay bank loan, ana

he

fiW

ntwrf

ninvpp<,»

in

e'vpLn

*e

nf

fn^

p'nmmnn

(nar

ctnrk

fund hnnHo
bonds.

cents)',

of which 680,000 shares of preferred and 1,360,000
shares are to be offered in units of one preferred and
Itwo common shares; the remaining 80,000 shares of preferred stock and 180,000 shares of common stock may
be exchanged for properties. Price—$10 per unit. Proceeds—To purchase property; for construction of hotel;
and for working capital. Underwriter—Coombs & Co.,
Salt Lake City, Utah.

lit Sunburst Uranium Corp.

'

"May 12 (letter of notification) 3,000,000 shares of common stock.
Price—At par (10 cents per share). Proceeds
—For mining expenses.
Offices—Terminal Bldg., Portiland, Ore., and Reno National Bank Bldg., Reno, Nev.
4

•Underwriter-None.

filed

Racing Association, Inc.

debentures due 1966 and 70,000 shares of

hank

rpnnv

Price

Luq fnS

—

pr

common

rnif

f

1

n

m

j

for stock. Proceeds—To
AnirUrt10?

Gulf-Atlantic, Inc., Tampa, Fla.

^oyal
•?'. c.*r ffr°rtb Worth, Texas
May 6 (letter of notification
37,500 shares of common
stock.

Price-At par

($1 per share). Proceeds-For oil,
gas and other mineral activities.
Office
3515 West
'Vickery Bldg. Fort Worth
May 11

(letter of, notification) 6,000,000 shares of comstock (par one cent). Price—Five cents per share,
For mining

operations. Office—1890 S. Pearl
Underwriter -— Carroll, Kirchner &

Jaquith, Inc., same city.

★ Technical Charts, Inc.
May 6 (letter of notification)

an

aggregate of

$29,500

book value of class B stock to be offered for
subscrip-

tion by employees.

Proceeds—For working capital.

..fwe—189 Van Rensselaer St., Buffalo
writer
None.
(

Texas

May

11

,

/

10, N. Y.

Of-

Under-

,

Industries, Inc., Dallas, Texas (6/1)
filed $6,000,000 of subordinated (convertible)

'debentures due 1975.

Price—To be supplied by amend-

ment.

Proceeds—$3,363,980 to redeem 15-year 6% sinking fund debentures and the remainder for working
capital and general corporate purposes. Underwriters—

Kidder, Peabody & Co., New York; Rauscher, Pierce &
Co., Inc., Dallas, Tex.; and Russ & Co., San Antonio,
Tex.

Texboard, Inc., Dallas, Texas
17 filed $1,500,000 of 6% series A debentures du<*
^serially from Feb. 1, 1957 to Aug. 1, 1961, and $1,000,000
Jan.

»of 6% series B convertible debentures due
serially from

iFeb. T. 1962 to Aug. 1, 1966.
-amendment.

Price—To be supplied by
Proceds—To construct and operate a manu-

-facturing 'plant

near

Orange, Tex., for the

purpose

5!!f!uU*acturin^ *nsulation building products.
writer
Emerson Cook
Co., Palm Beach, Fla.

of

Under-

Triangle Mines, Inc., Salt Lake City, Utah
;May 3 (letter of notification) 100,000 shares of common
-stock. Price—At par (50 cents per share). Proceeds—
-For mining operations. Office — 506 Judge Bldg., Salt




\

, ,

share, plus accrued dividends. Proceeds—To redeem
presently outstanding preferred stock, for payment of

per

-

,'

em-

.

w & M Oil Co., Lincoln, Neb.
/;
'Feb. 25 (letter of notification)225,000 shares of common
"stock (par $1). Price—$1.30 per share. Proceeds—For
"oil and mining activities. Office—116 S. 15th St., Lin-

ing stockholder.

Underwrites-None.

^

.

>

a

_

Co

&

Milwaukee, Wis.

In

.

.

•

coin, Neb.

,

Underwriter

—

None.

J. Keith Walker ia

,President.

.

Umversal Beverages, l"c'\ D?nver' £ol°"

Wwfl

,

April 26 (letter of notification) 150,000 shares of common stock (par $1). Price—$2 per share. Proceeds—To
buy product from Real Fresh Milk, Inc., and for general
corporate purposes. Office—510 Farmers Union Bldg.,
Denver, Colo. Underwriter—Birkenmayer & Co., Denver, Colo.
j

~

^ll 7 nl

^

,nr

'J!®.'' fa,t.

Laka Citv

uta«.
t

nnP°SS»*l '°Prire

mon stock (par one cent).^Pricc —-10 cents per share.
.Pi^ceeds—For mining expenses. Office—429 Ness Bidg.,
v^alt Bake City, Utah. Underwriter
Rocky Mountain
|Securities, Las Vegas, Nev.

| " Wy-Okla Oil & Uranium Co., Denver, Colo,
? March 29 (letter of notification) 3,000,000 shares of
mon stock (par one
^common stock (par two cents). Price —10 cents per
Proceeds—For mining expenses. Office — 414 Denver ^share- ^.oc®eds17"
mining expenses. ORice--804
National Building, Denver, Colo. Underwriter—Floyd
®e1?v®1!
Underwriter-CarKoster & Co., same city.
.roll, Kirchner & Jacquith, Inc., Denver, Colo., and RobUranium Prince Mining Co
Wallace
Ida
$
Baker & Co., Inc., Fort Collins, Colo.
April 18 netter of notification) *1 750 000 shares "of com^ Wyoming Uranium Corp., Salt Lake City, Utah
Uranium Geophysical Exploration Co.

March 14 (letter of notification) 7,400,000 shares

of comcent). Price—Four cents per share,

Underwriter—Wallace Brokerage Co.,
Vanadium Oueen
a

fo

-i

Uranium

Corn

same

;APril f (letter of notification) 833 333 shares of com-

^orp".,

f

'1'on stock (par one cent). Price 3/fc cents per share.
Sr?cee<ls £,?f m'"lng expenses. Office 522 Felt B'dg-.

city.

!alt

(6/6-10)

^h«tnn

^ ^ ?"ee" Uraniu"1

ing stockholders and 775,000 shares for the company's
Price-$2.50

account.

per

share.

Proceeds

-

—

Grand Junction

Colo

Underwriter—Van Al-

unaerwri er van m

New York

NoeL & Co

refunding

_

program.

Mines, Ltd., Toronto, Canada
"D") 300,000 shares of common stock
(par 10 cents)
Price—$1 per share. Proceeds—For generai corporate purposes. Underwriter—.Tames Anthonj
"Securities Corp., New York. Offering—Expected in two
Webster

or

t

,

j

stockholders some additional common stock on a l-for-10
basis (at March 31, 1955 there were outstanding 2,378,787
shares.) Price—To be announced later. Proceeds—For
expansion and working capital. Underwriter
Union
Securities Corp., New York.
American Telephone & Telegraph Co.
April 20 stockholders approved a new issue of not to

Western Electric Co., Inc.

.April 13 (letter of notification) 1,155,000 shares of com-

Underwriter—None

Offerings

6% stock for each
preferred share held. Offer to
expire on May 31.. Dealer-Manager—Kidder, Peabody
& C°-> New York.
American Machine & Foundry Co.
*
May 4 it was announced company plans to offer to its

three weeks.

Office—195 Broadway, New York.

JTiUSIIvVliVv

standing 136,744 shares of 5V2% cumulative preferred
stock» series A (par $100) on the basis of ten shares of

-

Western Development Co. of Delaware
March 14 (letter of notification) 18,773 shares of capital
stock (par $1) being offered in exchange for 124,165
shares of class A and class B capital stock of Excalibur Uranium Corp. on basis of one Western share for
each 6.6 shares of Excalibur stock held; offer to expire on June 15. Address—65 Sena Plaza, or P. O. Box
1201, Santa Fe, N. Mex. Underwriter—None.

mon stock (no par)
being offered for subcription by
'stockholders of record April 12 on basis of one new
'share for each 10 shares held; rights to expire on May
-27. Price — $45 per share. Proceeds — For expansion

,

•
Alleghany Corp.
Feb. 10 company.offered 1,367,440 shares of 6% convertIble preferred stock (par $10) in exchange for the out-

Uranium

30 (regulation

f

_

Dmhhh AiilmA

Underwriter—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart &
Co. Inc.; Union Securities Corp.; Stone & Webster Securities Corp.; Kuhn, Loeb & Co.; Salomon Bros. &
Hutzler; White, Weld & Co. Bids—Expected to be received up to 11 a.m. (EDT) on June 7.
Dec

.

Securities Co" both of Denver- Col°"

mortgage

bonds, series L, due June 1, 1985. Proceeds—For construction

u

Peters, Writer & Christensen, Inc., and Mountain States

mit\

b.

nnn

Apri1 \ ( etter of notifica ion) 1,4^5 000 shares of com]Jon stock (par 10 cents). Price 20 cents per share.
Proceeds—For mining expenses. Office—208 Iirst National Bank Building, Denver 2, Colo. Underwriters-

To repay

notes and for exploration and development expenses.
office

styne

9ty' Ytal1' Undcrwnter—James E. Reed &

Co., Salt Lake City, Utah; and Coombs & Co., of Washn
r
'
:.
v
' ' '
„
«

,1A

April 18 filed 845,000 shares of capital stock (par 10
cents), of which 70,000 shares are for the account of sell-

and

^ Tasha Oil & Uranium Co., Denver, Colo.
Proceeds

»,? ••
/

-

offered to

ployees. Rights to expire on June 7. Price-$25 per
share-. Proceeds—To repay bank loans and for new con.
struction.. Underwriters — Smith, Barney & Co., New
Yorkj 3nd Robert/W, Baird & Co., Inc., IVIilwsukee^ Wis.

May 4 filed 30,000 shares of new cumulative preferred
stock (par $100) being first offered for subscription by
preferred stockholders of record May 16 and employees
£ comoanv lights to exDire on June 7 Price—$102 75
OI company iignis 10 expue on uune i. fritv

fnar $10)

r

Tex^ Underwriter-None.

-St., Denver, Colo.

^

Pnrcha«p Plan

share for each 10

be

to

: . Wisconsin Power & Light Co.

same

snares of common stock (par $1U)

—

mon

stock

Unsubscribed shares

held.

bank loans and construction program. Underwriters-rSmith Barney & Co., New York; and Robert W. Baird

stock

100% and accrued interest for

rpi

Tlni S
Underwriter

Sl
capital.

(Fla.)

$700,000 of 6% convertible sinking fund

,(par 10 cents).

-

mon st0ck. Price - 10 cents per share. Proeeeds-For
mining operations. Address — Box 709, Wallace, Ida.

_

18

common

Office-Suite 201, 65 East

record May 16 on the basis of one new
shares

Ave/

:
of

of

stock. Price—At par (one cent per share). Pro-

tbe basis of Qne new sbare of United Gas stock for
each 10 shares of Bond and Share stock held; rights to
expire on or about July L Price—To be named later,
Proceeds—To Electric Bond & Share Co., who is the sell-

nfFlnr

Hotel, Inc., Las Vegas, Nev.
capital stk. (par $9.50)
and 1540 000 shares of common capital stock (par 25

,

shares

ing offered for subscription bv common stockholders of
.

on

$1)

«Feb. 16 filed 760,000 shares of pfd.

Sunshine Park

W. fficks & Co

Inc

350%harec

Sun

Nov.

19th

East

Utah

^

26,750,000

notification)

• United Gas Corp. (6/8)
May 17 filed 525,036 shares of common stock (par $10)
to be offered by Electric Bond & Share Co. for subscription by its common stockholders of record about June 8

Hpv^n^rrmn^ r^ve
nnipriritpr Nnni development reve~
Underwnter-None.

^nrt^rap'p

Qtnck

PAU^

Msec

charge

wi nnn

«r(!t

au

p

*nue

tutut4*\rrt

„

148

of

• Wisconsin Power & Light Co.
.
1
May 4 filed 263,140 shares of common stock (par $10) be-

to be Offered for subscription under the company's em-

and

loan

Lines

filed

28

flay ZdJnec{

Salt Lake Citv.

Uranium Co..

(letter

Mednick Co., same city.

/

^ United Air
,

'York.

in

Office——230

city

properties and other activities incident to oil and gas operations.
Office — San Angelo,
Texas. Underwriter—Barrett Herrick & Co., Inc., New
C4,,.

ooerations

Denver?Col0g Underwriter™;

for development of

Mav

River

MLn!ckhCoasamaekcityty' W8h" Unde^kr--<Juss and

Mareh 2 (letter of notification) 10,650,000 shares of comstock Price_At par (one cent per share)- Pr0Ceeds

stock (par 100).
hank

2,000,000 shares of capital stock (par $1),
shares are to be issued in payment
properties to be acquired from American

ceeds-For mining expenses.

mon

minins

Under¬

Colo.

1,000,000

25

common

,,

_pQr

Denver,

^

Union Uranium Co„ Denver> Colo.

(6/6)
rpnav

Wind

Feb.

'

Calif

ities> and working capital. Underwriter—None, but sales
wm be made through agents.
,/
\

Winnemucca, Nev.

Pr«nd»i»fi«_Tn

ohoro

Broadway,

share. Proceeds—^
and working

costs

Underwriter—None]

St..

pr0perty, construction of hotel, athletic and health facil-

ip ?rQhSfi10naA ng'' Wini^™ucca> Nev* Underw
4L. 1. oneiiey LO., uenver, LOIO.
Price—$1 per share.

Ho„vwooH

,nc

per

development

Trading Co., Ltd. who will purchase the remaining
1,000,000 shares for $455,000. Proceeds—For exploration
and development costs and working capital.
Office—
611-850 West Hastings St., Vancouver, B. C., Canada/

and 100,000 shares of common stock (par $10) to be
offered in units of three preferred and 10 common
Shares. Price—$400 per unit. Proceeds—For purchase of

«\

'April 25 (letter of notification) 1,500,000 shares of common stock (psr one cent).
Price — 20 cents per share.
Proceeds-For general corporate purposes Office-Suite

Stewart Oil & Gas Co.

Price—$1.50

Petroleum, Ltd., Toronto, Canada

certain

for

March 1 filed 30,000 shares of preferred stock (par $50)

wl?

March 14 filed 750,000 shares of common

which

of

Underwriter--CoIumbia

utah.

A.

Brothers, both of New York.

Standard Mercury Corp.,

Wifrich

Securities
Co., Denver, Colo., and Salt Lake City, Utah.
/

Inc. and F. H.

nrnn

and

Office—924

^

Lake

(letter of notification), 149,500 shares of common stock (par 25 cents).
Price—$2 per share Proceeds
—For working capital. Underwriters—S.D. Fuller & Co.
May 18

Offir.e—954.Eftsi, First South

pvnpnsps

cents).

exploration

March 24 filed

Securities, Inc.,

Northern

—

(6/8)'

Inc.

writer—Israel & Co., New York.

ir U-NEV Uranium Corp., Salt Lake City, Utah
29 (letter of notification) 15,000,000 shares of
common stock., Price—At par (par two cents).
Proceeds

convertible

at/i

For

capital.

April

both of New York.

Inc

~

™

Underwriter
Seattle, Wash.

Proceeds-For exploration and

supplied by amendment.

«tiite&4'par JO

Co., Salt Lake City, Utah

Utah.

City,

Underwriter—

111.

April 4 (letter of notification) 200,000 shares ot common

May 5 (letter of notification) 260,000 shares of common
stock (par 10 cents).
Price—$1 per share. Proceeds—
For mining expenses.
Office — Judge Bldg., Salt Lake

Corp., Toronto, Canada

April 18 filed 200,000 shares of cumulative
preferred stock, series A (par one cent).

.

.

Western Nebraska Oil & Uranium Co.,

•

Corp.

U-Kan Uranium & Oil

Price—To be named later. Proceeds—For
repayment of bank loans and for construction program.
Underwriter—To be determined by competitive bidding.
Probable bidders; White, Weld & Co. and Kidder, Peabody & Co. (jointly); Lehman Brothers; Merrill Lynch,
Pierce, Fenner & Beane and Union Securities Corp.
(jointly); W. C. Langley & Co.; Harriman Ripley & Co.
Inc. Bids—Expected to be received on June 7.
Stancan Uranium

Schwanz & Co., Inc., Aurora,

—

(par $100).

♦

.

Dallas and Fort Worth, Texas.

between

Lewellen-Bybee Co.,

2,000,000 shares of com¬
mon stock
(par
cents). Price—10 cen^s,
share.
Proceeds
For mining operations.
Office-^f^W'Social
Hall Avenue, Salt Lake City, Utah. Underwriter—Melvin G. Flegal & Co., same city.
-

(6/7)

Electric Co.

Southwestern Gas &

Uranium

—

(letter of notification)

April 1

principal amount. Proceeds—

bank loans and for new
Underwriter—None.'

To retire short term
tion.

Turner

held

June 14. Price—At

on

City, Utah. Underwriter
Washington, D. C.

Lake

41

the basis of $5 of debentures for each share
as of record May 17, 1955; rights to ex¬

on

of stock

^

.

(2450)

-

exceed $650,000,000 convertible debentures. When issued, each stockholder would receive rights to purchase
F16 debentures in proportion to his holdings of stock
(probably on the basis of $100 of debentures for each
eight shares of stock held). Underwriter—None,
/ Beaumont Factors Corp., New York
April 20 it was announced company plans to raise addi-

American Telephone & Telegraph Co. owns 11,528,585

tional funds through a debenture issue, details of which

Western Hills Inn, Fort Worth, Texas
-Jan. 31 filed 200,000 shares of capital stock (no par)
fPrice—$5 per share.
Proceeds—Together with other
'funds, to construct, furnish and equip hotel to be built

to over $1,000,000). Proceeds—For expansion in volume
-of business activities. Business—A commercial finance
company. .Office—325 Lafayette St., New York 12, N. Y.
Underwrite*—None.

shares

(99.81%)

of presently outstanding stock.

will be announced in

near

future

(expected to amount

Number 5432

181

Volume

'

J

f

early
registration of $2,000,000 convertible debentures and
approximately $5,000,000 of common stock. Business—

of

Underwriter—James
Securities Corp., New York.

Anthony

Central Maine Power

Co.

it

Insurance
was

Co.,

additional common stock
stockholders) in the latter part of
1955. Proceeds—For construction program. Underwriter
—May be determined by competitive bidding. Probable
bidders: The First Boston Corp. and Coffin & Burr, Inc.
(jointly); Harriman Ripley & Co. Inc.; Blyth & Co.. Inc.
and Kidder, Peabody & Co. (jointly).
Meeting—Stock¬
holders on May 11 voted to increase the authorized
common
stock from 3,250,000 to- 3,500,000 shares.
Of¬

—For general

corporate-purposes.
A. Searight, NeW York.
.

fering—Probably in September.

May

B.

$10 (prpbably to

par

^ Central Telephone Co., Lincoln, Neb.
May 11 it was announced stockholders will vote
1 on increasing the authorized common stock from

•

issue

of

June

850,000 shares and on creating an
20,000 shares of preferred stock.

Chicago, Milwaukee, St.

\

Paul & Pacific RR.

>/.;/

Clinton Trust Co.,

•

Hammermill

if Hertz Corp., Chicago, III.
May 24 it was announced the directors have approved
plans for the early registration of an issue of $5,000,000
of convertible subordinate debentures.
Proceeds — To

New York

capital

Operators Casualty Co.,

Coal

April 25,
be

Greensburg,' Pa.

,

stock

was

Co. Underwriter—
May be The First Boston Corp., New York.
•

changed to Old Republic Insurance

For

and

its next financing
new" construction, which, it is estim^ed,
cost about $125,000,0000 in 1955.
Underwriter#—
last equity financing were The First Boston £prp
Glore, Forgan & Co.

applied to the Federal Power
issue and sell 15,000 shares
preferred stock (par $100) and requested
exemption from competitive bidding. Proceeds — For
construction program. Underwriter — Blyth & Co., Inc.

Co.

Inc.;

Inc.

• Illinois Bell Telephone Co.

*

stockholders authorized issuance and sale
$6,000,000 convertible debenture bdhds
in connection with the acquisition of Uranium Mines of
America, Inc. stock. Public offering of $2,000,000 bbhds
expected early in 1955. Underwriter — Tellier & Co.,

July 23, 1954,

of not to exceed

Jersey City, N. J.

,

.

'

/r

.

Continental Can Co., Inc.

preferred stockholders approved creation of
additional $25,000,000 of debentures" or
other indebtedness maturing later than one year after
the date thereof,
The company has no present pl#ns
for making any additional borrowings.
Underwriters—
Goldman, Sachs & Co. and Lehman Brothers, both, of

April

18,

not to exceed an

,^4

New York.

Daitch

April

authorized

the

5^

Crystal Dairies, Inc.

28 stockholders

stock

(par

$1)

from

500,000

provide for future financing
Underwriter—Hirsch & Co., New York.

shares to 1,000,000 shares to
and expansion.

"

Detroit Edison Co.

May
about
offer
ers
.

—£

approved a proposal authorizing
$60,000,000 of convertible debentures.
Previous
of convertible debentures was made to stockhold¬

2

stockholders

without underwriting.

Dorrs an

\

Helicopters, Inc.

>Feb. 17 Donald S. B. Waters,
holders voted

to

& Co. and Union Securities Corp. (jointly); Morgan
Stanley & Co.: Kuhn, Loeb & Co. Bids—Expected to be
received on July 12.

gan

International'Bank, Washington, D.
April 25 it was iahnounced company,
ing

increase

stock

from

1,000,000 shares to 3,000,000 shares in anticipation "of
expansion of the company's activities.
UnderwriterPrevious financing handled by Greene & Co., New York




Office—726 Jackson Place,
Business—Industrial merchant

the Autumn of this year.

N. W.,

Washington, C. D.

bankers.

Canadian Fund Ltd.
announced early registration

Investors Group

April 28 it was

is expected

shares of common stock (par $1). Price—To
be initially offered at $5.41 per share. Proceeds—For in¬
vestment.
Office—Winnipeg, Canada. Distributor—In¬
vestors Diversified Services, Inc., Minneapolis, Minn.
of 20,000,000

if Ionics, Inc., Cambridge, Mass.
May 18 it was reported company plans early registra¬
tion of 100,000 shares of common stock.
Underwriter—
Lee Higginson Corp., New York and Boston.
Isthmus

President, announced stock¬

authorized capital

an

the next few

vertible
in

C.

in addition to plac¬

issue of $500,000 convertible deben¬
weeks, will offer additional con¬
debentures to shareholders, probably sometime

privately

tures in

March

30

it

Sulphur Co. (Texas)
was reported early registration

is planned
Under¬
Garrett

undertermined number of common shares.
writers—L. D. Sherman & Co., New York, and

of

an

& Co., Dallas, Tex.;

and others.

,

,

Maine Central RR.

Spencer Miller, President, said company has
the idea of refunding the $17,000,000 5Ys%
first mortgage
and collateral trust bonds due 1978.
Probable bidders for new bonds may include Halsey,
given

up

Stuart & Co. Inc.;

Kidder, Peabody & Co.; W. C. Langley

& Burr, Inc.; The First'Boston Corp.;
Lynch, Pierce, Fenner & Beane; Blyth & Co.,
Inc.; Glore, Forgan & Co.
&

Co.;

Coffin

Merrill

if Maremont Automotive Products, Inc.
May 23 it was reported company plans early registra¬
tion of $2,000,000 convertible debentures due 1970. Un¬
derwriters — Hallgarten & Co.; Straus, Blosser & Mc¬
Dowell; and McCormick & Co. (latter

handling books).

National Bank of Boston

(6/9)

announced the company plans to offer to
stockholders of record June 9 the right to subscribe
was

50,000 additional shares of capital stock (par $10) in
ratio of one new share for each six shares held;

rights to expire on June 27. Price—$40 per share. Pro¬
ceeds—To increase capital and surplus. Underwriter —
The First Boston Corp.,

New York.

if Merritt-Chapman & Scott Corp.
May 19, Louis E. Wolfson, President and Board Chair¬
man, announced company plans to issue and sell $25,000,000 of convertible debentures.
Proceeds — To re¬
finance certain outstanding bank loans and term debt,
for working capital purposes, and for future expansion.
Underwriter—A. C. Allyn & Co., Inc., New York. Offer¬
ing—Expected late in June.

(7/12)

May 17 it was announced company plans to issue and
sell an issue of $30,000,000 first mortgage bonds. Pro¬
ceeds—To repay advances from American Telephone &
Telegraph Co., the parent, and for capital expenditures.
Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Glore, For¬

approved a proposal to increase

common

company

Offering—Expected early in June.

Probable bidders: Halsey, Stuart
Co.; The First Boston

Morgan Stanley &

Consolidated Uranium Mines,

the

Commission for authority to
of cumulative

Corp.
'

22

Underwriter—Probably Blair & Co. Incor¬

porated, New York.

the

April

2,000,000 shares (there are 804,063 shares out¬
It was reported previously that the company

proposed to raise approximately $1,500,000 through the
sale of 150,000 shares. However, no immediate financing

for

Idaho Power Co.

May 23 it was reported company is expected to do some
financing in the Fall, the form and amount to be deter¬
mined later. Underwriter—For bonds, to be determined
&

standing).

shall be (new) serial
preferred stock, $50 par value and 1,000,000 shares shall
be common stock, $1 par value); also waiving of pre¬
emptive rights to such increased shares.

the company undertakes

by competitive bidding.

shares to

May 7 it

(200,000 of such increased shares

should^ be

it

Consolidated Edison Co. of New York, Inc.

•

Lucky Stores, Inc.

Merchants

May 13 stockholders approved a proposal increasing the
stock from 3,000,000 to 4,200,000 shares

Proceeds—For
will

basis of one new share for each

a

Williams & Co.

April 20 stockholders approved a proposal to increase
the authorized common stock (par $1.25) from 1,000,000

authorized capital

Willis Gale, Chairman, announced

Fall before

on

Underwriter—None.

Hupp Corp.

Commonwealth Edison Co.
Jan. 24,

(par $15)

25 shares held.

(jointly); W. C. Langley

Co.; Smith, Barney & Co.; Baxter,
Offering—Expected late in 1955.

&

<

»

• Housatonic Public Service Corp.
May 23 it was reported company plans to offer to its
stockholders approximately 18,017 shares
of common

announced capital and surplus would
increased to more than $3,500,000 and name
it

York.

of New

both

Price—$20 per share. Pro¬
and surplus.
Office—857
Ave., New York, N. Y. Underwriter—None.

Tenth

soon

provide working capital for expanded operations. Un¬
derwriters—Lehman Brothers and Hornblower & Weeks,

May 20.

on

increase

ceeds—To

Corp. and Blyth & Co., Inc.

ton

not

stockholders voted to increase the authorized
capital stock (par $10) from 120,000 shares to 130,000
shares.
The additional 10,000 shares are being offered
for subscription by stockholders of record April 15 on
the basis of one new share for each 12 shares held*/

competitive bidding. Prob¬

Stuart & Co. Inc.; The First Bos¬

Feb. 14, E.

(Inc.), Chicago, 111.

Becker & Co.

able bidders—Halsey,

is planned.

Paper Co.

•

.

April 27

rights to expire

may

May 10 stockholders approved a proposal on increasing
the debt authority to $20,000,000.
Underwriter—A. G.

change for outstanding preferred stock, series A, about
Aug. 1 on a par for par basis; offer to expire on Sept. 1,
.

writer—To be determined by

company

(joint¬
ly); Stone & Webster Securities Corp. Registration—Ex¬
pected in June. Bids—Expected in July.

10 it was announced stockholders will vote July
13 on approving the creation of an issue of $60,000,000
5% income debentures, series A, to be offered in ex¬

.

reported

Higginson Corp. and Carl M. Loeb, Rhoades & Co.

May

1955.

111.

was

Corp. and W. C.

Long Island Lighting Co.
23 it was announced company plans to sell an
issue of about $15,000,000 first mortgage bonds, series H,
due 1985. Proceeds—For construction program.
Under¬

Gulf States Utilities Co.

it

:

'

April

issue and sell
$10,000,000 first mortgage bonds if market conditions
permit. Underwriter—To be determined by competitive
bidding.
Probable bidders: Halsey, Stuart & Co. Inc.;
Lehman
Brothers; Merrill Lynch, Pierce, Fenner &
Beane and White, Weld & Co. (jointly); Salomon Bros.
& Hutzler and Union Securities Corp. (jointly); Kuhn,
Loeb & Co. and A. C. Allyn & Co., Inc. (jointly); Lee

700,author¬
Under¬
writers—Paine, Webber, Jackson & Curtis, Boston and
New York; and Loewi & Co., Milwaukee, Wis.

000 shares to

ized

Blyth & Co., Inc., The First Boston
Langley & Co., all of New York.

Manufacturing Co.
May 19 it was reported company plans early registration
of 87,500 shares of 6% convertible preferred stock (par
$10). Underwriter—Straus, Blosser & McDowell, Chi¬

16

-

struction, the company is contemplating the sale of about
650,000 shares of common stock in June or early July.
Rights will again be offered to common stockholders to
subscribe to the new stock, probably in the ratio of one
new
share for each ten shares held. "Underwriters—

Berkeley, Calif.

reported that company (in process of

Given

•

'•*

Co.

April 19, Errol W. Doebler, President, announced that
as
additional funds* will be required to finance con¬

casualty, fire and allied coverage.- President—Ray
Wiser, 2054 University Ave., Berkeley, Calif.

cago,

stock. Proceeds
Underwriter—George

_

Long Island Lighting

write

plans to issue and sell some

S.W., Atlanta, Ga.

posed is&ue of?600,000 shares of common

was

organization) plans to sell initially a minimum of $2,^
000,000 of capital stock at $22 per share. Business — To

President, stated that company

W. F. Wyman,

31,

Freedom

An

if Lithium Development, Inc.; Cleveland, Ohio
May 25 it was announced that company plans soon to
file a letter of notification -with the SEC covering a pro¬

Motor

March 28

sale nationally.

offer additional shares for

Office—517 Stephens St.,

1955, if then."

underground development.

and for

date to

offering of 16,666 shares of common stock was recently
made to residents of Georgia only
at $3 per share.

Stuart

Co., Detroit, Mich.
reported that following a probable 10offering of approximately 4,000,000
new shares will be made to the public.
Price—Expected
to be around $60 per share.
Proceeds — To the Ford
Foundations Offering—Probably not until "latter part

19

—

Keystone Wholesale Hardware Co., Atlanta, Qa«:
was stated that the company plans at a later

for-1 stock split, an

it was announced company plans issue and
sale of a debenture issue of several million dollars.
Proceeds—For a concentrating mill, mining equipment

Dec.

Ford

March 15 it

Mines Corp.

Uranium

Halsey,

bidders:

Offering

Jan. 27 it

Boston Corp.
•v.

rotating equipment. Underwriter
& Co. Incorporated, New York.

Manufactures electrical

Cavendish

ly); Glore, Forgan & Co.
July 1.

about

Probable

& Co. (joint¬
Expected before

Pierce, Fenner & Beane and White, Weld

& Co. Inc.;
Kidder, Peabody & Co. and Merrill Lynch, Pierce, Fenner & Beane
(jointly); Lehman Brothers and Blyth &
Co., Inc. (jointly); Glore, Forgan & Co.; and The First
ding.

;

if Bogue Electric Mfg. Co., Paterson, N. J.
May 19 it was reported that this company plans

April

Jersey Central Power & Light Co.
was reported company plans to sell $5,000,000
of preferred stock. Proceeds—For construction program.
Underwriter—To be determined by competitive bidding.
Probable bidders: The First Boston Corp.; Merrill Lynch,

was

1955

43

Feb. 21 it

was

announced company may issue and sell
$12,000,000 of first mortgage bonds.
Underwriters—To be determined by competitive bid¬
in

late

by Allen

Co., New York.

—Blair

it

April 14 it

the authorized common
$1) from 1,000,000 shares to 1,500,000 shares.

Underwriter—Previous financing was handled
&

16

Florida Power Corp.

Co.

April 26' stockholders increased
stock (par

Texas

announced Bank plans to offer to its
stockholders the right to subscribe for 100,000 additional
shares of capital stock (par $10) on the basis of one new
share for each 5V2 shares held. Price—$23.50 per share.
Proceeds—To increase capital and surplus.
Meeting—■
Stockholders vote June 7 on increasing capitalization.
May

pected late in May'.

(E. W.)

First National Bank of Fort Worth,

•

Insurance Co.

plans to issue and sell
Price—Expected at $5
per share.- Proceeds—To acquire Blackhawk Mutual In¬
surance
Co., Rockford, 111.
Underwriter — Arthur M.
Krensky & Co., Inc., Chicago, 111.
Registration—Ex¬

April 5 it was reported company
200,000 shares of common stock.

Bliss

(2451)

The Commercial and Financial Chronicle

.

& Casualty

Fire

Blackhawk

.

.

if Middle States

Telephone Co. of Illinois

May 19 it was reported company plans to issue and sell
additional common stock.
On May 11, the authorized
issue was increased

to 450,000 shares from

Underwriter—Central Republic Co.,

350,000 shares.

Inc., Chicago, 111.

if Missouri Pacific RR. (5/26)
Bids will be received by this company in St.

Louis, Mo.,
purchase from it
of $2,925,000 equipment trust certificates due annually
June 15, 1956-1970, inclusive., Probable bidders: Hal¬
sey, Stuart & Co. Inc.; Salomon Bros. & Hutzler; Kidder,
Peabody & Co.; Blair & Co., Incorporated.
if Mountain States Telephone & Telegraph Co. ,
May 21 it was announced that company plans to issue
and sell to its stockholders additional common stock
next Fall, the amount and ratio to be determined later.
American Telephone & Telegraph Co. owns about 86.7%
of the presently outstanding common stock. Underwriter
up

to noon

(EST) on May 26 for the

—None.

Murphy

(G. C.)

Co., McKeesport,

Pa.

12 stockholders approved a proposal to increase
the authorized limit of indebtedness from $3,000,000 to
April

Proceeds—For expansion program. Under¬
Lynch, Pierce, Fenner & Beane, New
York, handled preferred stock financing in 1942.
National Co., Inc., Maiden, Mass.
March 29 stockholders increased
authorized common
stock (par $1) from 300,000 shares (260,100 shares out¬

$20,000,000.

writer—Merrill

President,

standing) to 400,000 shares. Joseph H. Quick,
said it is contemplated that some financing will

Continued

be ar-

on page

44

44

The Commercial and Financial Chronicle

(2452)

Continued

jrom

during

aanged

1955

struction

43

page

additional

provide

to

capital

in

Under¬

connection with the current expansion program.

writer—Probably A. C. Allyn & Co. Inc., New York.
•

National

Newark

Banking Co.

Essex

&

May 23 stockholders received right to subscribe for
28,880 additional shares of capital stock (par $25) on
basis of one new share for each eight shares held on
May

rights

19;

fchare.

expire

to

Proceeds—To

June 14. Price—$70 per
capital and surplus. Un¬

on

increase

derwriter—Clark, Dodge & Co., New York.
•

National

State Bank of

(6/3)
May 23 stockholders approved a proposal to increase
authorized capital stock (par $25) by 55,000 shares, of
which it is planned to distribute 10,000 shares as a
Stock dividend of 8%, and to offer the remaining 45,000
fchares to stockholders of
one

share

new

for each

of the stock dividend.

Newark, N. Y.

record

three

June

shares

in the ratio of

3

held after receipt

Price—$91

per share.
Proceeds—
surplus. Underwriters—Clark,
Dodge & Co.; Union Securities Corp.; Adams & Hinck¬
ley; Nugent & Igoe; Julius A. Rippel, Inc.; and Parker
& Weissenborn, Inc.

To

increase

New

Orleans

Feb. 4 it
to

capital

issue

and

Public

Service

announced that

was

first

some

year

Under¬

1985.

Co.; Blair & Co. Incorporated; The First Boston Corp.;
Equitable Securities Corp. and Union Securities Corp.
(jointly); Kuhn, Loeb & Co. and A. C. Allyn & Co. Inc.
/jointly); Kidder, Peabody & Co. and Stone & Webster
Securities Corp, (jointly); and Lehman Brothers.
April 7 it

Electric

&

Gas

Corp.

announced holders of the serial preferred

was

000

Corp.

Pepsi-Cola General Bottlers, Inc., Chicago, III.
May 6 it was announced company plans to offer publicly
200,000 shares of common stock (par $1). Proceeds—To
retire bank loans and for expansion program. Under¬
writers—Straus, Blosser & McDowell and Link, Gorman,
Peck & Co., both of Chicago, 111.
(6/20-21)

Pioneer Natural Gas Co.

reported a secondary distribution of 770,000 shares is being prepared.
Registration—Expected
May 31. Underwriter — Union Securities Corp., New
May 4 it

was

York.

Webster

Securities

Corp., The First Boston Corp. and
Smith, Barney & Co.

stock will vote May 6 on a proposal to authorize
200,000
shares of preferred stock (par $100) to be issued

April 9 stockholders approved the possible issuance of
a

convertible

issue.

debenture

This

would

exceed

not

$50,009,000 and would be issued at the discretion of the
directors any time within the next 12 months. Under¬
writer—Probably Smith, Barney & Co., New York.
Radio

Receptor Co., Inc.
was reported that a public offering is soon
expected of about 250,000 shares of common stock, of
which 100,000 shares will be sold for account of com¬
pany and 150,000 shares for selling stockholders. Under¬
Feb.

it

28

writer—Bache &

in

series.

Company

plans

to

raise about $21,500,000
through the sale of new securities this year. Last pre¬
ferred stock financing was done
privately.
New York Telephone Co.
Jan. 17, Keith S. McHugh, President,

ap¬

proximately $200,000,000. Underwriter—For and bonds,
14 be determined by competitive bidding.
Probable
bidders: Morgan Stanley & Co.;
Halsey, Stuart & Co. Inc.
Jan.

Indiana

Public

Service

Co.

H. Mitchell, President, announced that the
company plans to raise
approximately $12,000,000 of
new money
(which may be done through sale of pre¬
ferred and/or common stock).

Underwriters—Probably

Central

Republic

Co.

(Inc.),

Blyth

&

Co.,

Inc.;

and

2£errill Lynch, Pierce, Fenner & Beane.
Northern Stated Power Co.
March

29

it

was

announced

capital require¬
$31,000,000. Present

new

for 1955 will approximate
contemplate these funds will be obtained tem¬
porarily from short-term bank loans to be repaid from

ments

plans

proceeds of the sale of additional bonds late in

1955

or

early 1956.

Underwriter—To be determined by competi¬
bidding. Probable bidders: Halsey, Stuart & Co.
Inc.; Blyth & Co., Inc. and The First Boston Corp. (joint¬
ly): Merrill Lynch, Pierce, Fenner & Beane,
Kidder,
Peabody & Co. and White, Weld & Co. (jointly); Equit¬
able Securities Corp. and Union Securities
Corp. (joint¬
ly); Smith, Barney & Co.; Lehman Brothers and Riter

tive

& Co.

(jointly); Glore, Forgan & Co.

Northwest

Nitro-Chemicals, Ltd.,

Alberta,

Can.

March 4 company plans to issue and sell
publicly deben¬
tures and common stock to finance its
proposed chemical

project.

Underwriter—Eastman, Dillon & Co., New York.

Ohio

March
iell

Water

28

it

Service

Co.

was

reported company plans to issue and
$1,000,000 of first mortgage bonds and $300,000 of

additional

common

stock

(the latter to stockholders) in

future. Proceeds—To retire bank loans and reim¬
burse the company's
treasury for construction expendi¬

near

tures.

Pacific

May 7, it

was

this

to

year

reported that the company expects later
make an offering of additional stock to

stockholders, following approval of
crease

a

proposal

to

to

10,500,000 shares.

Southwestern

plans to issue and sell
mortgage bonds.

Pro¬

ceeds—To

repay bank loans and for new construction".
Underwriter—To be determined by competitive

bidding,

probable bidders: Halsey, Stuart & Co. Inc.; The First
Boston Corp.; Kuhn, Loeb &
Co.; Kidder, Peabody &
Co.; Equitable Securities Corp.; Harriman Ripley & Co.,
Inc.

Pennsylvania
Feb. 21

it

Electric

Co.

was

reported company proposes issuance and
&ale of $7,500,000 of preferred stock later
this year. Pro¬
ceeds—For construction

program.
Underwriter—To be
determined by competitive
bidding. Probable bidders:
Kuhn, Loeb & Co.: W. C. Langley & Co. and
Glore, For¬
gan & Co. (jointly);
Kidder, Peabody & Co.; The First
Boston Corp.; Smith,
Barney & Co.; Harriman Ripley &

Co. Inc.

Pennsylvania Power & Light Co.
April 19, Charles E. Oakes, President, announced
that
company plans this year to issue and sell
$15,000,000 of
first mortgage bonds and use the
proceeds for its con¬




May

stockholders

10

to

additional

an

and

bonds,

of

issue

of

which

it

initially $19,500,000 principal amount

in 40-years.

mature

tions

Proceeds

improvements.

—

For property addi¬
be deter¬

Underwriter—To

mined

by competitive bidding. Probable bidders: Hal¬
Stuart & Co. Inc.; The First Boston Corp.; Union
Securities Corp.; Blyth & Co., Inc. and Harriman
Ripley

sey,

(jointly).

^ San Diego Gas & Electric Co.
E. D. Sherwin, President, recently

reported

that

the

company will need a minimum of $11,000,000 new capital
to help finance its current $20,000,000 construction
pro¬
gram.
The financing will probably take the form of a

bond

issue or preferred stock.
Underwriters—(1) For
preferred stock, Blyth & Co., Inc., San Francisco, Calif.
(2) For bonds, to be determined by competitive bidding.

Probable
Bros.

Corp.

&

bidders:

Hutzler;

Halsey, Stuart & Co. Inc.; Salomon
Blyth & Co., Inc.; Union Securities

Merrill Lynch, Pierce, Fenner
& Beane
(jointly); Lehman Brothers; The First Boston Corp.;
White, Weld & Co. and Shields & Co. (jointly). Offer¬
and

ing—Expected in September.

^-Schuster (Ed.) & Co., Inc.
May 23 it was reported offering of 17,000 shares of com¬
stock (par $10) is expected in near future. Price—
$16.37V2 per share. Underwriter — Robert W. Baird &

mon

Feb. 28 it

of

been

with

filed

Chicago, 111.

sell $3,000,000

first

froim

company

mortgage

California

P.

plans to issue and sell

bonds.
U.

Application

Commission

for

Southern
it

Co.

and

Texas Eastern Transmission Corp.

George T. Naff, President, referred to the pos¬
sibility of some $85,000,000 in new financing when and*
if the company's current application for the reconver-*
sion of the Little Big Inch pipeline and the construction
of the new natural gas facilities is launched.
He indicated that it was possible that $40,000,000 of that as- '
sumed $85,000,000 new financing might be in the form of
new first mortgage bonds, (to be placed privately), and»

that based upon the assumptions that he was making he
believed that the remainder of the financing would be

accomplished by the issuance of debentures and pre¬
ferred stocks (he did not assume the sale of any cornman stock). Plans for the possible issuance of new secu¬
rities

not at all definite as

are

M?rcb 4.

yet, it was announced on

Underwriter—Dillon, Read & Co., Inc., New

York.

it

15

plans to sell addi¬
finance cost of newat about $17,500,000.'

reported

was

company

tional first mortgage bonds later to

construction, which is estimated
Underwriter—Dillon, Read & Co. Inc., New York.

United Aircraft Corp.
April 26 stockholders approved a new issue of 500,000
shares of preference stock (par $100). Proceeds—To re¬
deem present 5% cumulative preferred stock
(233,500
shares outstanding), and for working capital.
Under¬

March

it

28

Ripley & Co., Inc., New York.
Light Co.

(9/13)

plans to issue and
$15,000,000 of first mortgage bonds due 1985. Pro¬
ceeds
To repay bank loans and for construction pro¬
gram. Underwriter—To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Union Securities Corp. and Smith, Barney & Co. (joint-ly); Kidder, Peabody & Co.; Salomon Bros. & Hutzler;
White, Weld & Co. and Stone & Webster Securities Corp.
(jointly); The First Boston Corp.; Lehman Brothers and
Bear, Stearns & Co. (jointly). Bids — To be received
was

reported

company

sell

—

Sept. 13.
Utah

Power &

March 28 it

Light Co. (9/13)
reported company plans public sale of

was

177,500 shares of
struction

common

stock.

For

—

con¬

competitive

thbrs; Union Securities Corp. and Smith, Barney & Co.
(jointly); Kidder, Peabody & Co. and Merrill Lynch,
Pierce, Fenner & Beane (jointly); Blyth & Co., Inc.; Th«
First Boston Corp.

Bids—To be received

on

Sept. 13.

+ Warner-Lambert Pharmaceutical Co.
May 24 it was announced early registration is expected
of an issue of 325,000 shares of common stock. Proceeds
—To International Drug Products, Inc., which presently
owns
558,411 shares. Underwriter—Morgan Stanley &
Co., New York.

and sell

it

reported

was

Co.,

Ltd.

company

plans

now

to issue

publicly about $20,000,000 of securities, probably

units

of

in

ex¬

and

placed privately.

notes

New York.

Western

May 2 it

stock.

Bonds

expected to be

are

Underwriter—Eastman, Dillon & Co.,

Offering—Expected in July.

from

Light & Telephone Co., Inc.

was

reported

about $2,500,000

(11/9)

Proceeds

Underwriter—To be determined by
bidding. Probable bidders: Lehman Bro-~

program.

has

competitive
were

issue

of convertible preferred stock.

Jan. 12,

April 25

Co.

bidding. Bids received on
Halsey, Stuart & Co. Inc.;
Blyth & Co., Inc.; White, Weld & Co. and Union Secu¬
rities Corp. (jointly); Lehman Brothers.

30

(Inc.),

Westcoast Transmission

reported

was

$40,000,000

Dec.

States

Sterling Precision Instrument Corp.,
Buffalo, N. Y.
April 14 it was reported company plans to

Co., Milwaukee, Wis.
Southern California Gas

common

company

Utah Power &

to $25,000,000 of first mortgage

is planned to sell

of

shares

vately) of $2,000,000 first mortgage bonds, to be used for
construction program.
Underwriter — Central Republic

Ry.

approved

60,000

Telephone Co.
applied to the Arkansas P. S. Com¬
mission for authority to issue and sell 40,000 shares of
cumulative preferred stock (par $25). Proceeds — To¬
gether with funds from proposed issue (probably pri¬
April 25

writer—Harriman

St. Louis-San Francisco

company

plans to issue and sell

first mortgage bonds, series H, due 1984.

announced company plans to Issue and
public 500,000 additional shares of common
stock (par $5). Proceeds—To repay bank loans and for

Underwriter—May be Dean Witter & Co.

investment in additional stock of subsidiary companies.
Underwriter—To be determined by competitive bid¬

March

sell

Pennsylvania Electric Co.
Feb. 15 it was reported
company
later this year
$9,300,000 of first

Prob¬

ley & Co.

in¬

the authorized capital stock from
8,500,000 shares

(7,215,180 shares outstanding)

the

Halsey, Stuart & Co. Inc.; Morgan Stan¬

last sale of bonds

Telephone & Telegraph Co.

of

it in the best

bidders:

emption

.

If,

indebtedness

Funded debt at Dec. 31, 1954
in the future, the directors

issue and the terms and conditions of the bonds.
able

& Co. Inc.

(Minn.)

that

authorized

June 7 will

on

interests of the company to
issue bonds, the board will determine the amount of the

up

12, D.

$84,077,350.

should deem

and

Texas Gas Transmission Co.

announced stockholders

to $125,000,000.

debentures

Office—160

March

increasing the

on

company

totaled

announced that
the company will have to raise more than
$100,000,000
of new capital money to aid in carrying out its
expan¬
sion and improvement program which will cost

Northern

vote

6%

Inc.

Foods,

reported company plans to offer $600,-

was

Broadway, New York City. Under¬
King, Libaire, Stout & Co., New York.
Offering—Expected in June or July.

Co., New York.

Co.
was

Frozen

Thursday, May 26, 1955

.

writer—Eisele &

new

Reading
April 18 it

of

stock.

Co.

Puget Sound Power & Light Co.
April 5, Frank McLaughlin, President, said that "it will
be necessary in 1955 to obtain funds for construction
purposes from outside sources—at least to the extent
of several million dollars." The company has scheduled
a large-scale
expansion program, involving $75,000,000
in order to keep abreast of estimated load growth over
the next five years.
Underwirters—Probably Stone &

Pure Oil Co.

plans this

bonds due

mortgage

York State

Southland

April 18 it

Boston

Inc.

company

writer—To be determined by competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co. Inc.;
White, Weld &

New

bond financing was ar¬
& Co. and The First

Previous

program.

ranged privately through Drexel

...

was

to the

Western Union Telegraph Co.

ding. Probable bidders: The First Boston Corp., Ladenburg, Thalman & Co., Carl M. Loeb, Rhoades & Co. and

mon

Wertheim

holders

&

Co.

(jointly);

Blyth

&

Co.,

Inc., Bear,
Stearns & Co. and Dean Witter & Co.
(jointly); Union
Securities Corp. and Equitable Securities Corp.
(jointly);
Lehman Brothers; Morgan Stanley &
Co.; Kidder, Pea¬
body & Co., and Merrill Lynch, Pierce, Fenner & Beane
Bids—Tentatively scheduled for Nov. 9. Registration—

it

15

was

announced

given to the issuance of

the

stock

through

April

13

that consideration

some

offering to stockholders.

an

voted

to

approve

a

4-for-l

company's stock and the issuance of

1,580,000
offered

have

new
as

been

shares, part of which

aforesaid,

but

formulated.

Not expected until Oct 12.

clude Kuhn, Loeb

^Southern New England Telephone Co. (6/21)
May 23 the directors authorized an issue of $20,000,000

is being

additional shares of com¬

no

of

additional

expected to be

are

definite

an

Stock¬
split

financing

plans

Underwriters—Expected to in¬

Dodge & Co.

of

debentures.

new

Proceeds—To

construction.

repay

Underwriter—To

bank loans and for
be

by
bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Lehman Brothers and Salomon
Bros.
&
Hutzler (jointly); Kuhn, Loeb & Co.; The First Boston
Corp.; Merrill Lynch, Pierce, Fenner & Beane; White,
Weld & Co. and Kidder, Peabody & Co.
gan

Stanley & Co.

June 21.

Bids—Expected

to

Westpan Hydrocarbon Co.
March 2 it

determined

competitive

(jointly); Mor¬
be

received

on

& Co.; Lehman Brothers; and Clark,

was

announced Sinclair Oil Corp. has agreed

with the SEC to divest itself of its investment of 384,380
shares

of

Westpan stock

Securities

(52.8%).

Underwriter—Union

Corp., New York, underwrote recent

Sinclair's holdings of Colorado Interstate
Weld

&

bidders.

Co., New York, may
1

be

sale of

Gas Co. White,

included

among

the
.

(2453)

tions 17 :34-15 and 17

only

apply

contract

Mutual Funds

surance,

delivered

or
a

Jersey Bills
Annuity Contracts
adequate description

ASSEMBLY BILL, No. 306

of

visions

By Mr. BARNES

be

Business Affairs
a

J

f

III !L^!ia«nn Th !r !

nf

m

secuon

ui*

n

Statutes.

Revised

the

BE IT ENACTED

in

by the Senate

tract

on

.

amount

•other

an

benefits

of

or

payments

contractual

values

shall
hv

SLJ Ar
providing for

company

dollar

The

basis"
issnpd

pnntrart

insurance

thereunder

to

or

as

so

vary

reflect investment results of

,to

in-

of

portfolio

segregated

any

designated ac•count in which amounts received
vestments

of

or

a

*34-19 of

the

j

^

Re^

+

"ame"ded t0 read

a

An

law

section

apply, and except

on

The

:34-19.

17

visions

this

of

foregoing

article

life

tion

basis, contain¬
for a deferred

a

to
<-u

or

and General

of N

?ses

e

.

'

'

.

a

'

if7

by the Senate

J

said

mutual

4

corporation

to

varjahi~

j

through
National Stock Series

i

a mutual fund, the primary objective of which is to provide an

of

common

such conshall have been placed.
any

evidencing'variable

tificate

ben-

^rmtrflr*fU<nn
•contain

shAll

statement of the essen-

a

features

tial

the

of

procedure

to

be followed by the insurance com-

.

in

vlpany

determining

other*
values

thereunder and

or

contractual,

vestment dealer or:

|

Research

3n

that

terms

clear

^^^f S

delivered

•contract

insurance

invest

a
and

account

ments
•on
*

the

:

insurance

provisions

*

i

No

ibasis,

thereunder

values

variable

a

*

certificate

or

benefits

evidencing
be "issued

to

iby any insurance company until
of the .form thereof and

„,a.copy

form

of such

of application

-contract have been

If

■shall at any
-

pany,

benefits pr values and gives to

connection with sales

r

withdrawal benefits, or any other
ATOMIC

OPPOSITION

of

a

ANNUITY

LEGISLATION

essence

a

variable

diversified holding of common stocks which will
in value and income productivity with
the fluctuations of the stock market and the rates

a

fluctuate

0f

stock dividend payments.
The purvariable annuity assumes all the risks
The insurance

common

chaser of

a

with respect to value and income.
company assumes no

such risks.

Federal Tax Status of Life Insurance Companies

(1) such contract or <fV2% life insurance company tax to 15% of dividend
certificate contains-income results in an effective tax of less than 1%.

Capital gains are not included in net investment
and are n.°t taxable.

unjust, un-

lair, inequitable, ambiguous, mis-.
,.

i*i

1.

4

likely to

leading,

•

i4

result

•

in

mis-

representation, or contrary to law,
•or

(2) sales of such contracts are

being

solicited

advertising,

by

any

means

communication

of

These tax

provisions were designed to applv to
guaranteed future dollar obligation of
insurance companies which is implicit in the term
a

which involves misleading

or

fjxed and

"annuity."

Under

A

a

portfolio of

securities

selected

tax

Pay"

provisions, however, the divi-

variable

tax

annuity has

accumulated

be

Dividends
other form,

an

'*

from

*

reinvested for him at

and

stocks

common

however,

as

mutual




:ystone

owned

in

any

Custodian ]FuncL

are

The

Internal

1954

Code

Revenue

contains new

permitting

BOND, PREFERRED AND
COMMON STOCK FUNDS

The Keystone

Company

SO Congress Street, Boston

special tax credit on retirement income received
in the form of annuities or otherwise. In addition,
annuity payments normally would be received dur¬

Please send

your
ten

me

9, Mass.

prospectuses describing

Organization and the shares of your

Funds.

ing the years when the annuitant is in a lower tax
bracket than while in his earning years, and if over

Name

65, he would enjoy a double personal exemption.

123

Addrtu

while

Thus

some

t

.....

—

portion of annuity payments

might be subject to Federal income tax, the de¬
ferred tax on the accumulated income would be

State

City

substantially lower—if not entirely avoided—than
had
the annuitant invested
in common stocks
through
come

any

taxes

other medium and paid individual in¬

on

his dividends

as

received.

Regulation:
life

Because

insurance agents would

be able to

offer such substantial tax advantages, as

explained

above, it is all the more important that their rep¬
resentations to prospective buyers
and advertising

and their selling
methods with respect to an invest-

Continued

on

page

46

fund

whose

is

EATON & HOWARD

EATON & HOWARD

BALANCED FUND

STOCK FUND

risk of

□ Incorporated Income Fund
Q Incorporated Investors

designed to

pro¬

diversified, managed investment
in stocks selected on the basis of pos¬
sible

a

participation in Canada's growth.
a free booklebprospectus by

&

HOWARD

CALVIN

BULLOCK

INCORPORATED

BOSTON

Proipectuse» from

City

U. S. mutual fund

mailing this advertisement to

Managed bp

principal.

a

vide

Send for

obtainable without

undue

.

Address

r

ownership interest

favorable tax treatment for annuities by

24 Federal Street

Name

GET THE FACTS AND, FREE PROSPECTUS

Federal Tax Status of Annuity Payments

EATON

on

,

'

subject to Federal income
tax rates of from 20% to 91% and capital gain9
realized on stocks ovyned in any other form are
subject to capital gains taxes ranging up to 25%.

Corporation, 200 Berkeley St., Boston, Mass.

Prospectus

resulting

ATOMIC DEVELOPMENT SECURITIES CI

1%, and capital gains realized in the
course
of portfolio revision would not be

Established 1925
a

r g

in activities

from Atomic Science.

of only

common stocks in which the purchaser

prime objective is to re¬
turn as large an INCOME

for

long-term GROWTH of
capital and income

Please send

clearly
46

INCOME FlIND

with

diversified

The Parker

be

on page

variety of

a

companies participating

INCORPORATED

INVESTORS
fund

these

dends from

INOORPORjITEO
mutual

were not designed to apply to a

'7 trfuTury3""'66 °£ d°Uar

or

in-

They

common stock investment medium with a fluctuat-

•dissemination of information

A

all times
Continued

managed investment.,

in

a

or

are

at

^

ownership interest in

particulars, of , income. Income from stocks is subject to the 85%
any such con-^corporate dividends received credit. Thus only 15%
form, application or certifi- pf dividend income is subject to tax. Applying the

provisions which

shall

subject to capital gains tax.

annuity represents, under

the guise of "insurance," an

a

normal

(Assembly Bills 305, 306, and 307)

vspecifying

^application

variable

of

would

TO

VARIABLE

Life insurance companies are presently taxed at
time notify any com-*a maximum rate of 6y2% of their net investment

•cate because

a

FUND, Inc.

designed to provide

WASHINGTON 7, D. C.

Lis disapproval of
tract

is

Opposition Statement
Variable Annuity Bills

commissioner

the

DEVELOPMENT

MUTUAL

cedure to be followed in de-

contracts.

filed with the

•Commissioner of Banking and Insurance.

MEMORANDUM OF

are

'thereunder, shall be delivered or
issued for delivery-in. this State

any

and
sec-

To

for

variable

a

(i

MUTUAL FUND.

1033 THIRTIETH STREET, N. W.

In

on

!

providing

contracts

Wall Street's

basis.

contract

variable

of

other contractual pay¬

or

or

|

in

through

issues vari-

annuities

or the State Department of Banking termimng the dollar .amount of
both' in the event that the insured and Insurance authority to review such contractual payments
•
becomes disabled from any cause, contract, application, or certificate
4- ihe investments and liabinIn every case where a contract forms and advertising used in ties of a viable contract account

amount

issued

or

New York

ATOMIC SCIENCE

variable contract account and

the Sranting of other benefits,

.•delivery to an individual, and any
isuch certificate, shall contain on
its first page, in a prominent po¬
sition, a clear statement that the
benefits

f£

«

Any such

ing to such procedure.

1

establishes

sa!

f

decrease or increase accord¬

JTiay

J
-

Established 1930

,

or

I

&

Corporation

120 Broadway, New York 5,

shall state

such

f

•

Securities

National

j

.

.

annujties

>

I
I

p.araSraPhs ba^* Jhls bd1, whlch is applisection ?ab-je to variable contracts ^issued
~ 5 s.
I10! app1^ ? any m
Jersey by a company of
Provisions included in life insur- any State, sets up protective pro'J?™

dollar provides for both

the

variable benefits
- payments

of

.amount

j

and reasonable expectance of its continuance with
regard to the risk involved. Prospectus
and other information
may be obtained from your in-

ac-

0ia*

I

.

yield

^ ^ ZpXtavin® such" an"
for the dolla^r amounts of annuity
"y company naving sucn an ac payments, return considerations,

1 ,oi sa,

„

•

of their relatively high cur-

cause

rent

life

which

able annujty

a

J
»■

account.

rontraot

dispose

diversified group
stocks selected be-

investment in

powTr^anv'New tosefmuSi whichT>th7n*a"nd aTpartVi'ts
p
s
y i\ew Jersey mutual authonty to grant, purchase or

shall not apply p°unt of contracts on a variable

section 17

ac¬

Assembly of the State

in

up

Any

bill

p!an' sectlon 17 :34"15 ot thls bfe insurance company to estabTitle shali not apply to group life lish a variable contract account,

!",<;% S™

set

u-n

•

corpocuiyu-

Jternai

l0/liC

contract

Jersey.

3.

STATEMENT

not

J™ "^meT'or Tra'ternal

variable

any

corpora¬

1. Any mutual life insurance
of any premium after 3 full years' corporation heretofore
or herepremiums shall have been paid, after incorporated pursuant to the
the
annuity shall automatically provisions of any general or spebecome converted into a paid-up cial law of this State shall have
annuity for such proportion of the authority to establish and operate
original .annuity as the number a separate account known as the
of
completed
years'
premium variable contract account.
paid bears to the total number
2. All amounts received in conof premiums required under 4w~ nection with contracts on a varithe
contract.
able basis shall be placed in the
5.
this act shall take effect variable contract account, and all
immediately.
liabilities on such contracts shall

is
a
companion
lms IS a companion
rations or associations operating Assembly Bill No. —

annuities

to
tu

operation by

insurance

BE IT ENACTED

annuity upon the life of the insured only, unless paid for by a
single premium, shall provide that
in the event of the nonpayment

rrsu■

apply

of

estab-

count, and the regulation thereof.

pro¬

shall

Stocks for Income

providing for the

mutual

con¬

a

Act

lishment and

of

1

variable

provision

a

in

Investing in Common

on

Business Affairs

contractual payments thereunder
t0 vary SQ ag to refject the intracts
vestment results of the variable
2
Any contract'on a variable
contract account, shall include in
basis delivered or issued for de- an<re P°llcies> f°r the payment of visions as to disclosure to pur- each such contract a statement of
livery in this State, and any cer- 5 la^.er amount of insurance^ if chasers of the variable nature of the essential features of the proin connection with

_

17

Referred to Committee

State, except
provisions

nonforfeiture

BILL, No. 307

By Mr. BARNES

be

variable

a

nn,,

mpan

use

Writ

Section
*, ^7 1 i

the State

this act "con¬

used in

When

or

proceding in lieu of preroga-

a
^ve

of New Jersey:
1.

thereunder

any

4

and General Assembly of

contract

ft

aTrafi^hi*

amenning

company

any

application in the form so
disapproved., Such disapproval of
-inii the commissioner shall be subject
and
to review by the Superior Court

ic<nl!irw,p

.

such

issue

to

certificate

or

.fll_

+

a

*}
St c
?y \

for

unlawful

ing

the procontract, it shall

the

thereafter

Referred to Committee on

tract

of

this

contained

this act

Full Texts of New

ASSEMBLY

contract to which the

(1943)

On Variable

in

of the standard

By ROBERT R. RICH

:34-16 shall

that part of the
which provides for in¬
but every contract issued
to

45

833

BOSTON
ESTABLISHED

your

1914

Investment Dealer

Established 1894

Montgomery Street

SAN FRANCISCO

or

the above.

ONE WALL

Name.

Address.

STREET, NEW YORK 5

46

The Commercial and Financial Chronicle

(2454)

Continued jrom page

Continued

45

Wall Street's

Opposition Statement
Variable Annuity Bills

To

which the buyer assumes

ment medium in
risk

be carefully

should

.

common

The economic control potential of the variable
annuity proposal is frightening. The concentration
of national wealth
of

and

sale

variable

of

under

annuities

poration
the

laws, all the comprehensive framework
federal regulation with respect to securities,

state regu¬

annui¬
/

tax structure

ment

tracts

In effect,
designed for guaranteed dollar pay¬

insurance

would

be

made

to

apply to

be

proposal such as the

into

able

An

the public interest and

7.

informal

committee has

been

the

on

formed

recognize
of

Any

the

mutual

Commis¬

the

benefits

vari¬
pro¬

in

relation

to

income

an

tending to vary at least

to

the

Distributions

some-

cost

would

of*

be

based

upon
actuarial application
mortality tables and would be

of

within

the

of accepted

scope

re¬

sponsibilities and functions'of life
insurance

companies.

obligations

keyed
of

value
in

investments

would

not

affect

obligations

and

the

the investment results
special account, fluctua-i

in market

tions

Since

a
company under
contracts would be

to

the

the

of

variable

such

or

such

the

account

other assets;

the

of

yield of j

company.

of

Securities

of

Department

Banking

surance.

and In-1
j

which

life

for

which

insurance

benefits

dollar

/

amount

establishes

a

TOTAL

NET

assets

increased

Fund

of

Boston

predetermined

in

that

specified

of

share

pro¬

date,
was

by

asset value per
compared with

net

$15.37

the Investment;

Dealers,

contracts

on

the basis of proposals which have been

high of 8,436,362.
the current quarterly report
proposals have been rejected in Maryland, New
This bill would authorize any to shareholders, Henry T. Vance,
Hampshire, New York and Texas and have not New Jersey mutual life insurance President of the Fund, notes that
been adopted in any state.
'it
company to establish a segregated on April 30 of this year, invest¬
account to be known as the vari¬ ment holdings were divided 13.6%
FOR THE COMMITTEE:

made before various state legislatures.

guarantee of dollar

payments. Insurance policy¬
supplement regular life insurance

protection by direct investment in common stocks,
or by investment in common stock investment com¬
panies or common trust funds managed by banks.

new

So far these

public interest will be served by substituting
untried unregulated variable annuity machin¬

of

*

Arthur Haussermann

(Secretary)
*'£.

1955.
10,

May

In

which

account, the assets
might be invested to

in

bonds, 13.7%

stocks

and

in preferred

72.7%

in

common

extent dn common stock stocks. A year earlier the propor¬
and
other equity
securities.
A tions were 15.8, 16.8 and 67.4%
company
operating such an ac¬ respectively.
large

a

Shelley

'

contract

able

William F.

STATEMENT

-

Hugh W. Long
Joseph E. Welch

for the machinery that now exists in the invest¬

y

tat „•

Baruch Bros. & Co.
Promotes Treat,
consecutive

Baruch

quarterly dividend
a

share from net in¬

vestment

income, pay¬

able June 30, to

of record June

stock

9, \955i

Bros.

Treat

and

your
or

Bonner, has been promoted to
Sales Manager.
Both mea* have
with

Baruch

Bros;

&

L. MORGAN,

Prestdwil

Mass.—Katina

Bok-

Kidder,
Peabody & Co., 75 Federal Street.

AVAILABLE
An

Italian,

perience

Fund
A Common Stock Investment Fund
Investment
are

objectives of this Fund
long-term
capital
and income
growth for its shareholders.

Prospectus

upon

request

dle




_

Chicago

—

Atlanta

Los

desirous

aged,

years

long

trading,

turn to Europe

ex¬

mid¬

to

above set forth.,

position

as

an

:*v

agent for

firm

in

Italy

Europe.

knowledge

of
Write

or

Good

_

to

a

the

little

Angeles

may present
for payment in accordance with the foregoing Notice, and

December

Prince, Haiti, West In¬

dies.

same

receive .the

Mario

Garfi, P. O. Box 535, Port
au

PROVISION FOR PREPAYMENT

Holders of The Baltimore and Ohio Railroad Company Refund¬

ing and General Mortgage Bonds, Series J and Series C,

English,

French, Italian, and

By W. L. PRICE, Vice President

Dated: May 25, 1955.'

an
-

American
Western

The Baltimore and Ohio Railroad Company,

i-j

many

after

re¬

in the Tropics, seeks

German.

Lord, Abbett & Co.
New York

with

in

-

.

has joined the staff of

Railroad;

.Company has elected to redeem and pay off all of its Refunding and
Mortgage Bonds-of Series J on December 1, 1955, by operation
of .the General Sinking Fund under the Company's Refunding and Gen—
Mortgage, and that on such date there will become and be due and,
payable upon each of said Bonds, at the office of The Hanover Bank,
70 Broadway, New York 15, New York, the principal amount of said'
Bonds together with accrued interest thereon to such date. No further
interest will accrue upon any of said Bonds from and after December
1, 1955.
Said Bonds -should be presented for redemption and payment at said
office of The Hanover Bank accompanied by all couj>ons, whether for
fixed or contingent interest, maturing December 1, 1955 and subsequently.
Any Refunding and General Mortgage Bonds of Series C which have
not been exchanged for Bonds of Series J are included in the foregoing
call for redemption, and should likewise lie presented for payment as

^General

Co.

*

J, Due December 1, 1995

(Series C, Due December 1, 1995)

NOTICE IS-HEREBY GIVEN that The Baltimore and Ohio

and

ron

WALTER

Series
,

Organ, former¬
ly with Ward and Co. and drearier

April, 1954.1

Company

Refunding and General Mortgage Bonds

Organ.

cate Manager. Mr.

BOSTON,

PA.

The Baltimore and Ohio Railroad

Treat, formerly with Shields
& Co., has been elevated
|q £>yindi¬

Kidder, Peabody Adds

investment dealer

PHILADELPHIA 3,

Sims

N.

NOTICE

NOTICE OF REDEMPTION

Mr.

since

FUND

Prospectus from

Organ

&

been

WELLINGTON

REDEMPTION

Co., 44 Wall
Street, New York City, announced
the promotion of two executives,
Amos

20c

|

This bill has the approval of the

$8,199,176 in j
variable contract account and is¬ the first quarter of the present
fiscal year to reach a new high
sues
variable
annuity contracts
may
in its discretion, but need of $129,657,021 on April 30.
Adjusting for the two-for-one
not, require in any case the pur¬
chase of annuities- which provide split of the shares effective on

.corporation

,

.

that

nature

and others for

persons

wide¬
retired

portions in combination with the $14.67 on Jan. 31, 1955 and $12,655
purchase of annuities providing at the close of April of last year,
for
benefits-" of variable
dollar when total net assets were $104,including bankers, brokers and investment dealers amount.
856,944. During the 12 months, the
domiciled in New Jersey and elsewhere, to pursue
8.
This
act shall
take
effect number of shares outstanding, ad- 1
vigorously all avenues of opposition to the offering
justed for the split, increased from
immediately.
r*
by life insurance companies of variable annuity
the equivalent ol 8,287,298 to a

amounts of settlement

ery

the

permit
a

Bankers Association of America, along with others

panies, which traditionally have provided a guar¬
anteed fixed-dollar settlement payment on policies,
to enter the common stock field to "provide protec¬

new,

the

which have not been explored thought-'

Association

)

no

In

matters.

initially is composed of members of the National
Association of Investment Companies, the National

economic need for insurance com-*

with

these

with

life insurance industry itself.

obtain carefully managed,
constantly supervised, widely diversified participa¬
tion in the ownership of American business and in¬
dustry on an economical basis and under Federal
and State regulations conceived for the protection

now

areas

tional economy, on

operates, an investor can

No

themselves

fully and carefully could have seriously damaging
effects on important financial elements irHfre na¬

experience-tested media for achieving
substantially the same investor objectives are avail¬
able. Through the investment business as it already

can

by

Banking and Insurance
to the requirements of

would

companies to help meet
spread
public
need
of

living.

shall

or!

purchase

grant,

legislation

extent

basis

within

vided.

meantime, however, this hastily contrived venture

effective,

holders

of

cedures

laws which have been enacted in the public interest.

annuity is in the answer to this question
—Does it fill a public need not currently being met
effectively and in the public interest?
'
The answer is NO. The fact is that other, more

tion'' against inflation

established

sioner

secu¬

variable

a

variable,

a

New Jersey mutual life insurance:

account.

contract

on

issuable

annuities.

of

This

of

assets

ownership in the form of variable annuities, Piquant
thus making it possible to avoid taxes applicable to the standard valuation law (1943)
securities ownership and defeat the purpose of tax- in accordance with actuarial pro¬

investment companies, in¬
and on the life insurance

public.

on

rities

concern

no

variable

the

Such

would also be completely circumvented.
a

variable

is

other than

cor¬

valuation may be made as
has been imposed on issuers, underwriters,
exchanges, over - the - counter markets and of such valuation dates as the
broker-dealers, would be completely circumvented corporation shall establish from
to the detriment of national public interest; and all time to time, except as otherwise
federal and state tax laws, applicable to securities required for such annual reports
ownership, which, though imperfect in many re¬ to the Department of Banking
spects, have nevertheless been laboriously devel¬ and Insurance.
6. The reserve liability for con¬
oped over the years to serve the public interest,

Conclusion:

the investing

assets, notwithstanding
application of other valuar

the

Obviously, the Treasury and the Congress will

Ther.e

in

stock

industry itself.

of

dispose

In¬

to

company

the

tion methods to assets of the

state

which

possessed of the tax advantages noted above,
obviously would have serious impact on the invest¬
ment banking business, brokers and dealers, trust

any

re¬

to

determined

be

existing authority of a
Jersey mutual life insurance,

and

Banking
be

contracts

would

.

now

New

such

of

a

of

and

important test of

of

the

-all

annual

corporation

shall

insurance

of

An

for

surance

ance

ties by insurance companies unrestricted by any
the safeguards governing the sale of common stocks

departments of banks,

the

Department

practical sense, this whole variable annuity
proposal boils down to this: By legalizing the issu¬

latory statutes.

vestment counsel firms

of

ports

basis

assets

including

purposes,

annuity

variable

accordance with the market value

In

though a vari¬
another means
purchasing common stocks, its issuance and sale
the public would not be subject to any of these

legalized sale of variable

account

of

account
of

nuity plans, could quickly lead to monopoly control

of course, that even
annuity merely provides just

The effect of the

giant life insurance companies may already be

valuation

of the economy.

This means,

desirable federal and

The

contract

small number

a

Further concentration, through their
ownership of common stocks, under variable an¬

by them.

and

in the hands of

5.

dangerous.

issuing shares representing an ownership interest
in a diversified holding of common stocks or other
securities. These Acts exempt from federal control,
life insurance companies and the policies issued

time-tested

any other investment
the corporation. *

over.,

,

v

prescribes severe penalties for misrepresen¬
the Securities and Exchange Act of 1934
regulates the business conduct of those selling secu¬
rities, likewise subject to severe penalties for mis¬
conduct; and the Investment Company Act of 1940
sets forth comprehensive standards for companies

to

Jersey Bills
Annuity Contracts

On Variable

business, the investment company business,
identifiable
and. distinguishable count would issue special
banking business and the
.types' o
public. Indeed, the public from the other investments and contracts, under which payments
No would vary in dollar amount so,
interest would be seriously damaged if these ele¬ liabilities of the corporation.
ments in the financial community were to be de¬ sale, transfer or exchange of in¬ as to reflect the investment re¬
vestments may be made between sults
of the
account.
Provided
stroyed, as would be the case in very large measure
if the variable annuity concept is allowed to take the variable contract account and, such an account were established,

and

of

Full Texts of New

stock investments by the

tation;

able

Thursday, May 26, 195t

.

the trust division of the

stocks in the form of a
variable annuity by life insurance companies would
not be subject to the various federal and state laws
regulating the sale of securities. At the federal
level, the Securities Act of 1933 requires disclosure
to the investor of basic information about the secu¬
rities he is purchasing before he purchases them,
of

sale

The

.

45

page

ment

all the

regulated to protect the

public interest.

jrom

.

full

redemption

1, 1955, at

any

including

price

time

on or

acerued

interest

to

after June 1, 1955.

The Baltimore and Ohio Railroad Company,
•

-

By Wv L; PRICE," Vice President

<

Number 5432

olume 181

.

.

The Commercial and Financial Chronicle

.

(2455)

DIVIDEND NOTICES

DIVIDEND NOTICES

DIVIDEND NOTICES

HOMESTAKE

WMPANY.

GEORGE W. HELME

•

DIVIDEND
The

York; N. Y.
On
May
25,
3955, a quarterly dividend of
3% cents per share. On the Preferred Stock
id
a
dividend of 40 cents per share on thc;
ramon
Stock
were
declared, - payable July.
1955, to stockholders of record at the close
Plaza, Ntw

Rockefeller

D

No.

J. P.

*w

• 1H

AT.

m

-«

INC.

MANUFACTURING

McCAULEY, Secretary.

10

Dividend !&>•

May

75c

of

share on

per

May 31, 1955.

record

^

declared a dividend

Allegheny Ludlum Steel Cotpirat'un

'

-

&%'

declared

Dixie

UGL following

June 6th, 1955.

of

stockholders

7

No.

stock—Dividend

Common
45c

share—payable

per

holders

at the close of busi¬
June 1, 1955.
Board also declared

record

of

of

business

record

the close of

at

No.

JESSUP, Secretary

165

the

New

Dated:

23,

May

R.

1955

the

Company has

Com¬

been de¬

of

close

'

'

the

at

May. 31,

business

1955.

E." J„ GOODWIN, Treasurer.
N. Y„ May 19,-4955.

York,

■

Treasurer

LONG ISLAND LIGHTING COMPANY

GAS

UNITED
EHR EVE PORT,

lO.f-1955.

DIVIDEND

<- u»

HARVESTER

Dividend Notice

J

TT V,

COMPANY

WEC&BRLEY, Secretary

declared

STOCK

PREFERRED

share
July 15,

per

record

close of business

to

on

on

GERARD

J. EGER, Secretary

Corpomt

dividend of thirty-seven and

cents

payable July 1, 1955, to stockholders
of record at the close of business on

quarterly

June 10, 1955.

payable July 1, 1955

*

B. H. WlNHAM

the close of business

at

'Secretary

May 25, 1955

June 10, 1955:
Per Share

Series

CORPORATION

share on
Corporation,

per

holders of Preferred Stock of

record

June 15, 1955.

commercial? Solve nts

following

the

dividends

the common stock payable
1955, to stockholders of
the

of Directors has de¬

clared

fifty cents (50^)

on

at

a

one-half

the Common Stock of the

The Board

Company have declared quarterly

dividend No. 161 of

Directors has this date

Board of

The

The Directors of International Harvest¬
er

LOUISIANA

QUARTERLY

INTERNATIONAL

to stock¬

1955.

FUEL AND

Seventy-

of

share on

per

this

Treasurer's Office,
Broadway, New York 6, N. Y.,
20, 1955, to stockholders of record

June

on

of

payable

'.

PAUL B.

DIVIDEND

($.75)

Stock

clared

at

June 1, 1955.

on

mon

Series
A—
share—

Secretary

IRON

27, 19557 to stock¬

June

on

holders

Cents

per

McCASKEY. JH

THE COLORADO

by

QUARTERLY

five

Y.', May 24th, 1955.

(quarterly)—

90

No.

Jupi 25,

June

H.

dollar nine and threeeights cents
(81.09375) per share on the
$4,375 Cumulative Preferred Stcck of the
Corporation, payable June 15, 1955 to Preferred Btockhcjdei's of record at the close
of business on June 1, 1955.
A.

dividend no. 150
A

divi¬

one

S.

.

WILLIAM T. SMITH,
New York, N.

a

CORPORATION

Preferredf- Stock,
(quarterly!—62V2C

Convertible

Dividend

on

The

of

of

Directors

or

payable July 10, 1955 to stockholders of reoord
June 10,
1955 whose shares variir not called for
redemption on Jnly 1, 1955}>
s

(50c)
per share
declared
on
the
Common
Stock of
the Corporation,
payable June 30,
1955, to

dividend

Board

has

of

cents

-

able

of

Directors

southern pacific company

dends:

the Board of Directors
of Allegheny Ludlum Steel Corporation held
today.
May
19, 1955, a dividend of fifty

a

the

1955

Cup
Company^ rpakers
of
paper
drinking cups end food containers,

Pittsburgh, Penna.

ness

24th,

($1.25)

Cents

KennecottCoppeKIorpipration, pay¬

stockholders of record at the close of busi¬

The

Common

May

Twenty-five

share hat been declared today

Mining Corporation declared a
regular dividend of 50(' per share on the
2,658,230 shares of its Capital Stock now
outstanding, payable June 15th, 1955 to
ness

record

42dStreet, New York, N.Y.

cash distribution of One Dollar

and

Corporation

On

'

meeting

161 East

Newmont

DIXIE CUP COMPANY

a

CORPORATION

Secretary.

Newmont Mining

?

President

N.Y-

Brooklyn,

the Common Stock

ROGER HACKNEY, Treasurer

At

KENNECOTT COPPER

Dividend No. 109

1955, to holders of record

payable June 10,

Dividend

May 20, 1955

r

DIVIDEND

The Board of Directors
•

JOHN" W. HAMILTON,
1955.
~ -

10,

°f

Corporation

»*.oouct>

8S6

declared

A
*

JJkil

NO.

Directors has

■

iff? Johns-Man ville

DIVIDEND NOTICES

896 of

Forty

301

-

ni_

.

TOHiwmwvHti

Board of

DIVIDEND NOTICES

COMPANY

forty cents ($.40) per share of $12.50
par value Capital Stock, payable June 10, 1955,
to stockholders of record June 1, 1955.
Checks will be mailed by Irving Trust Com¬
pany,
Dividend Disbursing Agent.

1955.

7,

June

business

MINING

47

Series B,

$1.25

5%

DIVIDEND

DIVIDEND
At

a

The

of

Corpora¬
New York, N. Y. on May 24.

in

dividend on the common stock of
in the amount of thirtyseven
and one-half cents per share was
declared, .payable July 1,
1955, to stock¬
holders of record at the close of business
on
June
3,
1955.
The regular quarterly
dividend on
the series A $50 par value
1955,

the

of.

dividend

A

(25c)

clared

the

on

outstcliding

a

corporation

of

this

June

30,

stock
on

of

record

on

June

at

cents

per

share

June

30,

1C55,

©rd

were

to

Scries E,

cents

common

1955, tb
the

A

dividend

Secretary.

on

the

^Secretary.

J

on

at

pany

will not be closed.

L I B E

Exec.

record

Preferred Dividend

($1.75)

of

one

share

per

five

cents

the Preferred Stock and

on

five cents (25^) per share on the
Common Stock of this Company have been
of

twenty

July 1, 1955 to holders of
the close of business on June 9, 1955.

declared, payable
record at

books for the Prefetrtd

transfer

Stock

fay 24, 1955

stock,

the close of business on

will be closed from

opening of business on
June 10, 1955 in connection with the redemp¬
tion by this Company of 100,000 shares of
Preferred Stock on July 11, 1955, and in
order to be a holder of record of such Fre-.
ferred Stock as of June 9, 1955 it will be nec¬
essary to be-a holder of record thereof at the

June 3, 1955 until the

close of business on

pay

1955, to stockho
at the close of b

e

June

One Wall

record

s

on

v,

L

dend

the

of

30

a

cents

.

JNT^

Q ftt tot

I.

Electronics—Tuned to Tomorrow

MERCK & CO.. Inc.

share

per

1955,

par

At

to

Quarterly dividends

on

the

$10, payable July 1,
the $3.50

stock,

RALPH B.

PLAGER, Secretary

DIAMOND

Payable Data

i

the

Record Date
(1955)

(1955)

2% Stock

March 30

March 25

June

30

June,

2% Stock

Sept.

30

Sept.

25

10 Cents

Dec.

30

Dec.

25

10 Cents

„

25

pre¬

$1.06%

a

/•

THOMAS D. WALSH

.

Att't Treasurer

the $4.25 second pre¬
have

stock

payable

clared,

PLASTICS

on

on

second

and

stock,
on

ferred

FIBERS

share

a

$4.00 convertible
ferred

on

share

a

meeting held earlier this
year,
the Beard of Directors
declared the following dividends:
a

stock,

cumulative preferred

$1.00

CHEMICALS]

share

a

common

87lM

stockholders of record

1955.

20<^

of

Com¬

the close of business June 1,

OF DIVIDENDS

raiiway, n. j.

divi¬

quarterly

capital stock of this

pany,

at

I

NATIONAL COMPANY, IMC.

GREENBURGH,
Treasurer.

share

I

business

of

Street, New York

day declared

June

Treasurer

r

close

the

at

The Board of Directors has this

CARL A. SUNDBERG

,

1955.

Secretary and Treasurer

NOTICE

30,

William G. Holman

S)

10,

Boston, Mass., May 16,1955

(50^)

ri of record

16, 1955.

Secretary

June

EMERY N. LEONARD

declared,

been

has

JOHN G.

May 19, 1955

June 3, 1955.

May 24, 1955

fifty

1955, to stock¬

Company

of

Liberty
Products
Corporation declared
a regular quarter!# dividend of
e-half Cents
Thirty-seven and
on its com(UVit) per sha
rs

mon

The

share

Irving Trust

124

dollar seventy

dividend-of

lune 8, 1955.

|ew York

No. 188

Common Dividend No.

Dividends

of

N.Y.'

Farmingdale,

business

of

15,

record

payable June 28, 1955, to stockholders

CORPOR
New York 8.

per

of

holders

'

An wexlra
cents

30 Cboreti Strrrl

close

the

at

seventy-five cents

share on the capital stock of

payable July

payable June 28, 1955, to stockholders

Sec'y.

PROD

INC.

ALCO PRODUCTS,

per

declared,

been

has

share

.ents -per

dividend of

this Company has been declared

June 8, 1955.

J. OSBORN

Vice Pres. &

A

quarterly dividend of fifty (50^)

A

of

•

Quarterly Dividend

N. Y.

York 6,

New

Broadway,

May 9, 1955

the close of

June 15, 1955. The

HERVEY

'

CI

Company,

stock transfer books of the Com¬

Consecutive

MIAMI COPPER COMPANY

.

payable July 1, 1955, to stock¬

stock of this

business
,

224th

DOLLAR

capital

McGEEW,

......

„

ONE

holders of record

declared, payable on
stockholders of r cD.vC.

of

share has been declared

a

the Close of business on June 3,1955.

at

COMPANY

Treasurer

May 25, 1955

BERGEN,

|

,

DIVIDEND NO. 164

stockholders

3, 1955.

May 23, 1955.

UNITED FRUIT

$1.0875

$1.0875

VINCENT T. MILES

COMPANY

tie

A. *.

4.35%

F, 4.35%

Series

International Salt

de-

Corporation, payable

preferred stock in the amount of sixty-two
and one-haL cents per share, and also the

regular quarterly dividend on t ie series B
$50
par
value
preferred
stock
in the
amount of sixty-eight
and three-quarters

Jwe

May* been

share has

per

$1.0625

D, 4.25%

fgfflB

Directors

meeting of the Board of
Colorado Fuel and Iron

held

tion

Series

NOTICE

on

been

de¬

July

1,

1955 to stockholders of record
at

JLc/

of business June

the close

13, 1955.
Dividend Number 14

cents

(15tf)

Common

this

#

on

Stock

the

Corporation

clared

CORPORATION OF AMERICA

sliare

per

was

1955 to

de¬

shareholders of

|:

record May 31, 1955,

I

Checks will be mailed.

i

1
I

E. ARCHIE
v

MISHKIN

VICE-PHES. & TREAS.

i
%

J

180 Maditon

1
ji|

N.Y.

THE Boardthe Directors has this day
of following dividends:
declared
% PREFERRED STOCK. SERIES A

4 Vx

The

regular quarterly dividend, for
the current quarter of
per
share, payable July 1, 1955. to
holders of record at the close of busi¬
ness

7% SECOND PREFERRED STOCK

The

Philadelphia, Pa.

May 20, 1955.

June 3, 1955.

the

regular quarterly dividend for

current

quarter of $1.75 per share,
July 1, 1955, to holders

payable

of record

1

Avenue, New York 16,

of

payable June 15,

PtftlLIES

America's No. 1 cigar

WEBSTER
The modern-mild cigar




on

at

-June 3, 1955.
,

.

the close

of business

'

COMMON STOCK

May 24, 1955.

•-

Treasurer
89th

Regular Quarterly
Dividend on Common Stock
The Directors of

Alkali

UTILITIES

May 19,1955, declared a divi¬
dend of $1.10 per share for

COMPANY

ending June 15,
1955, payable June 15, 1955,
to holders of "4.40% Cumula¬
tive Preferred Stock of record

DIVIDEND

The

per

Secretary

of

Board

declared

share

of the

1,

CARMICHAEL,

and

Year

of

Dividends

predecessor companies

A regular

quarterly dividend of

seventy-five

the quarter

DONALD S.

Cash

paid by Pullman Incorporated

Diamond

May 31, 1955, and a regular
quarterly dividend of 37%
cents per share, payable June
6, 1955, to holders of Com¬
mon Capital Stock of record

Consecutive

Quarterly

Company have on

Directors

on

1955

today

the Common Stock

Company, payable July

1955

to

stockholders

of

record at the close of business
June 1,

1955.
,

DIAMOND ALKALI COMPANY

D. W. JACK

Secretary

May 20, 1955

cents

(75 i)

share will be paid on

NOTICE

dividend of 58 cents

a

Cleveland, Ohio, May 19, 1955

R. O. GILBERT

Secretary

May 24, 1955

<

May 31, 1955.

\ll/z cents per share payable June
24, 1955, to holders of record at the
dose of business June 3, 1955.

John H. Gage,

4.40%

Cumulative Preferred Stock

A dividend of fifteen

to

per

June 14,

stockholders of record

May 31, 1955.

j

I

CHAMP CARRY
President

Aft

43

(2456)

The Commercial and Financial
Chronicle

.

Thursday, May 26, 195f

..

,JT

BUSINESS BUZZ

r

T

§•

I

•

yf *

BeWn3-tHe-S<ene Interpretations
from the Nation'*

Capital

control

WASHINGTON, D. C.—
that the military Re¬

"Chances
the

will

bill

serve

House

in

of

t&s* Hll

,Y;jfCf lor

bane

the

of

whip

existence

or

of

the

even

reported

—National Bureau

it, and it
unanimous con¬

against

or

the

get

procedure

has

the

have

ers

Y6rk " 16,

*

Y.|

N.

$1.25.

r

University Press Fall]
Catalogue—Columbia Uni-j
versity Press, 2960 Broadway,.]

Columbia

House,

1955

rather, certain key House lead¬

bill,

New

(paper)

opposed it—

always

Kendrickj

of Econr

Research, Inc., 261 Ma;'t;S0n Av->

gave

in

nowhere

which

Half of Federal Ex-j

a

penditures—M. Slade

the im¬
pression that the bill again will

news¬

the

Century and

a

enue,

This

When the Armed Services

Committee

twice

legisla¬

-game

sent.

was

thQ^f Rhexpected things
Jiixat Congresses do, that are the

man.

th^

passed by

was

of

party

spendl;^^""

Senate

Ng, otter Senator said

r

defeat

The

.

one

Federal

the

before passed
tion.

are

slender.

of

that

and

reported on the
authority to be most

of

best

revived

be

And You

.

New York

opposed it.

27, N.

Y.

(paper).

then the

checking around indi¬
cated. a comfortable margin for
its passing in the House,
i
However, Rep.
Adam
C,
Powell

this ■' proposal is a
modification of an existing pro¬
Actually

vision

the

whole

whose

effect

would

be, among other things,
to ban segregation in National
Guard

units

southern

in

states.

And

Rep. Frank (R., O.) got
adopted his amendment which
hereafter

would
status

"repeal"

service

ii

liable

are

ment in

the

s?or

personnel
trial

to

and

punish¬

of

suit

the

of

cloth.

country of their stationing
violation

laws

by

joined,

opponents

of

of

revenues,

bill,

the

j For the
takes

bill

$

entering wedge

view

tions

that

since

the

NOT

as

ruled

out

IV

if

'

."¥Sr

tions

indefinite

some

time

v

v

the future possibly might"stim¬
an
interest in behalf of

-VP

legislation.'

On

£5

the

other

id-

'S
I r

it
<§*

ment

now

b

hand,

appears

v

members

take
eral

r

j

_

.

*1;

V'

McClellan
Senate
ment

Chairman

(D.,

Ark.)

Committee

Operations,

few

words

7$

a

I'fj

of the bill

John
-

in

!

the

.

it

at

of

the

L.

;

Democratic

leadership

credit

of

would

long

so

as

there is

ployment.

-

Starting

this

is

Feb.

real estate credit.

sufficiently

will

budget,

no

procedure
make

it

special

the

gim¬

or

possible for

'

jealous

committees

in

and

.

of

of

their

this

that the Joint Eco-

reason

the

for

which

latter

business

that

outlook

-The

the

A

of

part

far

oped

less

.

of

present

with

to

,£

l

Government — Provincial

V'

—

Municipal

Corporation

—

long

mild

the

as

on

the

theory

New York

this

would

City,

is

"c

r e

it

the

absence

of

E.

d i t

by

the

was

Joint

staff.

Kuhlmann

i.

a

member¬

Joins Rothschild Co.
(Special to The Financial Chronicle)

"trouble

now

the

Stock

with Rothschild &

La

Salle

New

Street,

York

and

Midwesti

Exchanges.

of

that

to

re¬

flect the "behind the scene" inter¬
pretation from the nation's Capital
and may or may not coincide with

so

there is any unemploy-

the "Chronicle's"

own

views.)

External and Internal

New Views

on

RIVERSIDE CEMENT CO.
CALIFORNIA

Stock Orders Executed
»'

any

CLASS

Canadian Exchange

'i

►

on

Co., 135.

members

e., consumer and real

(This column is intended

H

B

(Common)

Copies

on

-

STOCK

request

j

ife

?■
i"
■jh:*

Burns Bros. & Denton,
Dealers

Tel: DIgby 4-3870

in

Canadian

37 Wall

lie.'

Street, N. Y. 5

TWX: NY 1-1467

Tobonto

•




Canada

Burns Bros. &

Montreal

The

FOREIGN

Company, Ltd.

Members:
v

Carl Marks,& Co. Inc.
;

Members:The Investment Dealers'
Association of

Invest went

10

Affiliated with:

Boris Bros. & Denton, Ltd.

LERNER & CO.

Securities

Toronto

Ottawa

50 BROAD STREET

TEL:

Stoct Fxeftmngt

SECURITIES

HANOVER 2-0050

Winnipeg
\

\

•

SPECIALISTS

NEW YORK 4, N. Y.

TELETYPE NY 1-971

>

CHICAGO, 111.— Sydney Blochi
is

estate credit expansion.

re¬

on.

M.

partnership. Mr..

j

hinted

on

to

devel¬

of

operate

the-

ship in the Exchange.

specific controls brought
to

Charles

Lockwood will acquire

Economic

It

of

Exchange,

admit

credit
'

subsidiary idea

members

Stock

will

Lockwood, Andrew Gray and Otto>

prob¬

South

back

market

excess

to

be

the

restraint

supply

considerable

serves
i

Reserve

dispute

areas,"

failing

serious

rather broadly that there should

memorandum is that it criticizes

Canadian Bonds

the

Joint Economic Committee staff

the

Railroad*

Pershing & Co., 120 Broadway,.

were not

easing.)

the

significance

Informa¬

Eastern

Admit New Partners

to the

came

York

call

;

rosy.

Railroad
—

Pershing & Go. To

2nd

pre¬

time

was

Street,.

(paper).

New

i Committee
at

48th

—

Manu¬

ob¬

tightening" but would probably

"

However,

own

jurisdictions.
They want no
overlayer of advisers. It is for

purpose

until

1953."

super-

Reserve

restraints

vailed

Finally, the committees themare

Federal

credit

trouble

June

ably

Eisenhower Administration and

legislative

East

of

1955

justify

fact

Democrats vigorously flayed the

the

2

of

Presidents Conference, 143 Lib¬
erty Street, New York 6, N. Y.

or

'

the

the

nor

tion;

general credit tightening." (In

when

Republicans controlled

It

conclusion that these

Joint Economic Committee, the

that when

Congress

productivity

Association

Yearbook

One by one the staff reviewed

-

1954,

1,

potential

full production

17, NV Y. (paper) $1
(quantity prices on request).

way

memorandum

on

New York

the trouble spots, consumer and

unem¬

any

the

J».

Prosper—Study

increased

facturers,

of

be

may

N.

program for national pros-

and

question

appropriate

an

Princeton,

May

H.

Univer¬

served.

how mild, may not be justified

the Fed¬

is

a

National

policy

—

Marver

—

Princeton

—

perity based

way

unemploy¬

may
well
the current

become

spots,"

matter

no

this

dealing with what

may

of

V'-'"

restriction,

of

one

measures

j. It is this idea: That general

the

the

the

selves

Commission

People

of

limiting the reserve position of
banks
through general credit

readily taking firm hold among

Congress. *

view

ment,

the germ of an idea that is now

point out that the

with

"In

whether

and later released
for publication after it "leaked,"

the

So

•

,

memo¬
Economic

Joint

.

.

recovery has been under
for six to eight months.

Committee,

the job to be done.

to gain a better

was

randum

spending picture and try to
spending to revenues

mick

of 4 the

explained

that

theory

Government

of

20c.

Press,
(cloth) $5.

[X
"We still have
a signifi¬
cant amount of unemployment
in spite of the fact that the

econ¬

Administration is determined to

Govern¬

on

and

Hints Broad New Policy

7. ;

the total look

balance

years, the Senate went
through, without a shred of
debate, the motions of adopt¬
ing the proposed Joint Budget

Committee.

officials

can

| There is in the staff

It

have

the

sity

fied.

-

ranking
appropria¬

would

.t*

Again, for the third time in

:4

which

Criticizes Federal Reserve;

estimated to be available.

recent

v,fe>.

;
:

only to recommend.

trouble

*

.

ent

ment, such restraint is not justi¬

never

publicly air their
views in the public prints.
r

seven

each

body

neither

/

.

has

contain

Joint Budget Committee
,

Committee

omists

-

Yeted Perfunctorily
.

Committee.

of

Observers

&

fore
*

called

was

Warehousing*

Regulating Business by Independ¬

ice'!"

beyond the function
of providing a theater stage be¬

Senate Finance and House Ways
and Means, or Taxing Commit¬
tees. Membership would be con¬

However,

taneously among the opponents
segregation, of the status of
forces treaty, and the opponents
of the bill, appears to be un¬
•

Figbar, if you'd merely say 'divi¬
poor' and not 'the dividends stink

progressed

- Senate
has
just
different kind of a

Budget

power

of

,

nomic

be¬

year

would leave out members of the

This

to stand, the

coalition which developed spon¬

beatable.

Budget

tions committee.

senti¬

as

a

fined to the first
<

this

first

again

What* the

Joint
.

ulate
-

the

never

passed is

in

'

Joint

together, although it exists as
legally as any other committee.

;

careful observers, since the pres¬
ent Congress will last through

2956, and changed world condi¬

<

it,

'

b,y the most

JKf"

appreciate

on

through the mo¬
working out a fiscal

of

tee

amendments, it is still alive
and can possibly be taken up
/
later and passed. This prospect
i

'■%

original

program,
and it was such a
dismal failure that the commit-

just dropped after the
approval
of
these

was

tentative

fice,

(paper)

latedly went

record the leadership

the

U. S.

of

avoid

to

revenues

:

Documents,
Government Printing Of¬
Washington
25,
D.
C.

Bernstein

Committee

tor universal military service,

an

raise

of

Superintendent

deficit.
This

who

regard it

•**r

as

Branch

.

Congress

the

firm stationery.

on

Utilization:

Storage—Commission
on
Organization of the Executive

appropriations

or

g*f
Con-*

and

dend prospects are

a

course,

H'

amount

—

u-j
n

Equipment, Attentiorii!
Information, 205 East'

requested

Depot

"I'd

would

rt

the

11 i

Street, New York 17, N. YJ
(paper) available on request to!
construction
marketers
when1

tive

criminal

| Sponsors of these two amend¬
?;»•

fit

to

Either

e

42nd

'

would be held down to prospec¬

in those countries.

ments-were

Market

S

Practices

and

struction

Committee

overseas

the domestic courts

Methods

Theoretically the Joint Budget
is to meet early in
the session, estimate probable
revenues, go. over total appro¬
priation requests, and then cut

the

treaty. This is
die treaty under which Ameri¬
can

facturer-Distributor

a

Committees of both Houses.

forces

of

and

by common consent.
The Legislative Reorganization
Act of 1946 proposed to create
a
"Joint
Budget Committee."
This group legally consists of
the
ranking members of the
Appropriations and Taxing

(D.,
N.
Y.)
got
his
adopted in commit¬

of

law,

in

dead letter

amendment
tee

already

Construction Equipment: Man

Securities

t

Post Office

Square
Boston, Mass.

Phone HUbbard 2-1990

Teletype BS-69