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141-le tat : 111Mira Volume 136 financial hrantrie L New York, Saturday, May 27 1933. Number 3544 The Financial Situation HE event of transcendent importance this week, from an economic and financial standpoint, has been the embarking of the Administration at Washington upon its policy of credit inflation through the further extension of the open market operations of the Federal Reserve banks. We say the policy of the Administration, since the announcement of the resumption of purchases of United States Government securities came early in the week from the Treasury Department at Washington and spoke of the Reserve banks having been "authorized" to resume purchases, and it is, of course, well known that the Administration is definitely committed to this very policy. It is becoming more and more apparent with each succeeding day that the Federal Reserve banks, with their vast resources, are getting to be simply the blind hand-maiden of the Government under the inflation amendment to the Federal Farm Relief Act. The amendment referred to, with its varied assortment of several different species of inflationary measures for achieving the end sought, to be used singly or in connection with others, has as its fundamental basis the desire and the design of the Government at Washington to manage the banking and the credit and the currency situation so as to readjust commodity and other values to higher levels. Adding to the volume of Reserve credit afloat through further acquisition of United States Government securities is only the first step in the process. It is important to note that in such a scheme the Federal Reserve Board and the Federal Reserve authorities lose all independence of judgment. They are no longer a free agent, in the sense that they may determine the banking and credit policy of the country in accordance with economic and monetary requirements, based purely on mercantile and financial needs. Instead, they can act only in response to the dictation coming to them from higher up. Their function is reduced to the single thing of registering and executing the decrees of those in the Government who have been delegated to supplant them in their former duties. In a word, the Reserve authorities in effect must do what they are told to do. In any event, the President has the power to compel obedience to his wishes, as he has the appointment of the members of the Reserve Board in which, conveniently for himself, there have recently been several vacancies. In such circumstances, surrender of the judgment of the Board itself, even if contrary to that of the heads of the Government, follows as a matter of course. The matter is made worse for the Reserve authorities by the fact that the T Government, in its policy, is acting entirely in accordance with prearranged plans, the sole purpose being that there shall be inflation so as to arrest deflation, and the Reserve authorities may have no faith at all that the object sought is to be accomplished in that way. In the present instance, if we may judge from the action of the Federal Reserve Bank of New York after the close of business on Thursday, in further lowering its discount rate from 3% to 2/ 1 2% (after a reduction from 3/ 1 2% to 3% on April 7 1933) the Reserve authorities are desirous of helping the inflationary movement along, or at least to increase its chances of success, by making borrowing at the Reserve banks cheaper, though it is already far too cheap and wholly unnecessary; or are we to suppose that this lowering of the discount rate has also been made on intimation or suggestion from the Treasury Department and other Administration circles? It is perhaps only fair to say that the Reserve authorities may be yielding acquiescence without demur (though they are really helpless to do anything else) because they are anxious to avoid an alternative which unquestionably would prove even worse than the unnecessary further expansion of Reserve credit. For, as already indicated, the inflationary sections of the Farm Relief bill contain provisions for many different kinds of inflation. One instance in particular deserves mention at this juncture. We published the Farm Relief bill in full in our issue of last Saturday, pages 3415 to 3420, and from Title III of the Act, on page 3420,Section 43,Sub-division (a), it will be seen that the President has been empowered "to direct the Secretary of the Treasury to enter into agreements with the several Federal Reserve banks and with the Federal Reserve Board whereby they will engage "in open market operations in obligations of the United States Government, or corporations in which the United States is the majority stockholder and purchase directly and hold in portfolio, for an agreed period or periods of time, Treasury bills or other obligations of the United States Government in an aggregate sum of $3,000,000,000, in addition to those they may then hold, unless prior to the termination to such period or periods the Secretary shall consent to their sale." But,in addition, there is a further and alternative provision designated Sub-division (b), which says that "If the Secretary, when directed by the President, is unable to secure the assent of the several Federal Reserve banks and the Federal Reserve Board to the agreements authorized in this section, or if operations under the above provisions prove to 3580 Financial Chronicle be inadequate to meet the purposes of this section, or if for any other reason additional measures are required in the judgment of the President to meet such purposes, then the President is authorized" to have recourse to the issuance of $3,000,000,000 in the aggregate of greenbacks or legal tenders under an Act of Congress passed in 1862. This alternative of the issuance of $3,000,000,000 of irredeemable greenbacks would obviously be infinitely worse than expanding the open market operations of the Federal Reserve banks, and it might easily be that the Reserve authorities want to give the experiment of further open market operations the fullest test and trial, rather than to invite a return to the greenback era of the Civil War. Be that as it may, the country is now fully launched on the inflationary era to which President Roosevelt would commit it with all the consequences that this may involve. And the Federal Reserve Banking System as a consequence is perverted from its original purpose of serving the needs of trade and commerce into an instrumentality of the Government for giving effect to new doctrines for regulating economic and financial affairs, not alone in the United States, but over the entire earth. The scheme is hollow and fantastic, by reason of its very immensity. The degree of failure likely to attend its operation must be left to the future to determine, but that it must fail in the grandiose fashion in which it is proclaimed seems beyond question. We are told that there is to be "controlled" inflation and not unlicensed inflation. But granting that controlled inflation is possible instead of the runaway inflation which invariably attends the operation when carried on under Government auspices, controlled inflation can never be viewed with unconcern when there is no need (as in the present instance) of any inflation at all. There is the further objection that when there are large-scale pure chases of Government securities (on this occasion $3,000,000,000 of additional Reserve credit is authorized) on manufactured credit, the whole governmental fiscal system is in danger of becoming undermined. This last should not be overlooked, as the situation to-day is that the banks of the country, both the member banks and the non-member banks, as well as the Federal Reserve banks themselves, are loaded down with far too many United States Government securities. Liquidity is necessarily impaired in such a state of things and under such tension. One can only hope that there will be a realizing sense of the dangers involved, thereby leading to a change of policy, before the loading down process reaches the acute stage. The announcement that resumption of the purchase of United States Government securities had been directed came quite early in the week, and it was then stated that the probable purchases for the week would be $25,000,000. The appearance, Thursday evening, of the condition statements of the Federal Reserve banks for the week ending Wednesday night showed that the amount given was correct, the total of the holdings of United States Government securities having increased from $1,836,598,000 to $1,861,712,000. The composition of the different classes of obligations is of some interest, and, accordingly, it may be noted that the holdings of certificates of indebtedness and of Treasury bills were reduced from $821,124,000 to May 27 1933 $801,523,000, while on the other hand the holdings of Treasury notes were increased from $594,482,000 to $629,583,000, and the holdings of United States bonds from $420,992,000 to $430,606,000. S IF to emphasize the determination to break with all the traditions of the past, the startling news came from Washington yesterday that President Roosevelt had asked Congress to take the country off the gold basis by statute. Representative Steagle, of the House Banking and Currency Committee, immediately introduced a bill to that effect in the House. Its principal provision reads as follows: A "Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, that: "(a) Every provision contained in or made with respect to any obligation which purports to give the obligee a right to require payment in gold or a particular kind of coin or currency, or in an amount in money of the United States measured thereby, is declared to be against public policy; and no such provision shall be contained in or made with respect to any obligation hereafter incurred. "Every obligation, heretofore, or hereafter, incurred, whether or not any such provision is contained therein or made with respect thereto, shall be discharged upon payment, dollar for dollar, in any coin or currency which at the time of payment is legal tender for public and private debts. "Any such provision contained in any law authorizing obligations to be issued by or under the authority of the United States, is hereby repealed, but the repeal of any such provision shall not invalidate any other provision or authority contained in such law." It is not altogether clear what interpretation is to be given to this resolution, but its purport is plain enough. The intention is to abolish the distinction between gold and other forms of money, and to permit payment "in any coin or currency which is legal tender for public and private debts." Silver certificates, 50c. silver dollars, greenbacks, National bank notes, Federal Reserve notes, are all placed on the same basis as gold, and no distinction may be made between them. All will accordingly fall to the level of the least valuable one—gold would be an exception except that it is already a crime to be found in possession of more than $100 of it. As the inflation amendment to the Farm Relief Act authorizes the issue of huge bunches of new greenbacks and of silver, there ought to be no difficulty in bringing about the depreciation of the American dollar, which is so earnestly sought by the authorities at Washington. Under the Gold Standard Act of March 14, "the dollar consisting of 25.8 grains of gold nine-tenths fine" is made the standard unit of value, and "all forms of money issued or coined by the United States shall be maintained at a parity of value with this standard." All this is now to be cast in the discard, and no one will have any assurance that he will have anything of value, even though there may be billions of gold in the Reserve banks. And the intention is to have this apply to the past as well as the present. The proposition is a monstrous one. Senator Carter Glass calls it repudiation. It is worse than that. It is breaking faith with any and everything, and it is a violation of every element of fair dealing, decency and, withal, of common sense. Volume 136 Financial Chronicle 3581 ment so difficult. It is fear and uncertainty. They USINESS recovery is making quite substantial foreign representatives) were, nearly all of progress from week to week, even without the (the them, just as we have been, afraid. They had all aid of the many adventitious aids projected by the experienced the heart-breaking burdens attendant Administration on such a huge scale, and it may be upon participation in the governing of nations which that in the end it will induce the Administration were, for many economic reasons, deeply depressed. to refrain from carrying into effect many of the If the nations have taken measures to protect themvisionary schemes designed to revolutionize pretty selves, even to the extent of shutting out contacts nearly everything under the sun. Latterly the domiwith others, it is largely due to this pschology. To nant powers at Washington have seemed to be actbecome resentful in the face of these matters is to ing on the theory that change was the order and make them worse." requirement of the day, that everything that in the Proceeding along these lines, Professor Holey been had past, however satisfying and satisfactory, went on to say: accepted with equanimity, must now give place to ng establishi of something different in the process "That it (the fear) can be partially dissipated by an entirely new era in the economic and social world. the initial meetings can be confidently expected. In this state of things new laws have been enacted But it must be remembered that each delegate in so radical and revolutionary in their character and London will have come from a nation over which prevailed. tendency that the ordinary mind finds itself in a the icy atmosphere of economic fear has common a in join ls, individua state of actual bewilderment as to where the whole The delegates may,as ake, but their conclusions will thing is to end and what degree of individual liberty spirit of give-and-t by what their parliamentary be modified is to be left, for all these laws are making the Gov- always be willing to approve. will bodies many and ernment the sole arbiter in human affairs, "This means, for one thing, that the thought of of them aim at the impossible. what reaction they will meet when they return home All these propositions, which proceed on the theory will act as a restraint upon what they are able to that the Government can do things better than the accomplish at the conference itself. And it means, individual, whereas experience is to the exact con- in addition, that they will be actuated by a personal trary, are the emanation of the so-called Brain Trust pride in achieving as much as they can—in other c victory for themwhich has been acting as advisor to President Roose- words, in achieving a diplomati velt, amplyfying the fertile devices of his own brain selves. "This suggests a competitiveness among the delealong the same lines, and prodding him on to further gations which will reflect and intensify the larger ventures along the same lines in the domain of ex- competitiveness among the nations they represent. periment into which the President is so prone to "One of the great problems of the Conference will enter. A satisfactory feature, however, is that this be to reduce to a minimum this spirit of competiBrain Trust does not appear to be above profiting tiveness." by the lessons of experience. We regard this as a Continuing with his discussions, Professor Moley hopeful sign, inasmuch as it appears to be modifying say: its expectation of what can be accomplished, along also had the following to revolutionary paths, and may lead to abandonment "Turning from the financial questions to the secof some of the wild schemes because the outlook for ond class of problems, economic matters, we find them is becoming so unpromising. We have been questions much more difficult of solution. All of particularly impressed by the speech which Profes- the nations, including our own, have in the past sor Raymond Moley, Assistant Secretary of State, years erected tariffs and other barriers against broadcasted on Saturday night of last week with trade, designed to secure for themselves a favorable of such barriers regard to the coming World Economic and Monetary balance of payments. The erection exchange various with and hand-in-h gone often has 12 June work Conference which is scheduled to begin s. and with reference to which he warned the Amer- operation "The process by which this has happened is long a result as e impossibl the ican people not to expect and intricate, and need not be gone into here. But of the work of the conference, and pointed out that the fact is that in the past 10 years each nation has "economic fear" would be difficult to overcome at been moving in the direction of setting up a selfcontained economic life within its own borders. London. the as head of regarded be may Thus it will be difficult to make extensive attacks Moley Professor the Brain Trust on which the President is relying upon trade barriers, however much this may be so implicitly, as he is the closest and most intimate desired. "This points to a fact which should be made very adviser of Mr. Roosevelt. That he is not so set in It should not be expected that the conferplain. sh beto distingui unable his views as to make him is going to be able to lay out a plan for itself ence tween the real and the fanciful and visionary, is a a series of international measures which will bring good sign, going to show that practical considera- about the alleviation of economic difficulties all tions may, after all, play a prominent part in con- over the world. trolling what is to be done and how far to proceed. "The action of an international conference which Professor Moley, during the course of his remarks, attempted to bring about cures for these difficulties observed that one thought had come to the fore- solely by concerted international measures would ground of his own mind as he had met and talked necessarily result in failure. In large part the cures with the various foreign representatives. It was for our difficulties lie within ourselves. Each nation must set its own house in order, and a meetthe thought that the people of the world, as well as ing of representatives of all of the nations is useful during suffered years these so their own rulers, had in large part only to co-ordinate in some measure of the depression that there was everywhere a feel- these national activities. Beyond this there are relaing of nervousness, not to say fear, in the face of tively few remedies which might be called internathe problems which are involved in recovery. "It tional remedies. "The failures of international conferences arise is not bitter-end chauvinism nor cold and calculated selfishness that makes the way to universal agree- from two mistakes. The first is that the general B 3582 Financial Chronicle may 27 1933 public is led to expect altogether too much from We may be sure that no serious attempt will be such international action. made to abandon the preferences which inure to the "The other mistake is that the mutual enthusiasm of those participating in conference leads them to benefit exclusively of the dominions within the attempt more than can reasonably be expected in British Empire, notwithstanding that Mr. MacDonold went on to say that"The experience and methods the way of accomplishment." The foregoing shows that Professor Moley has no of the Ottawa conference might well be copied in illusions as to what can and what cannot be accom- wider endeavors about to be made at the Internaplished, and this should also modify public expecta- tional Economic Conference to regularize and put tion in that regard. It seems to us, too, that it into some system the economic relations of the ought to lead the Government at Washington to world." Yet if the United States farmer is not to deal more frankly with the public in revealing what get relief from the harsh provisions of the Ottawa this country is to gain from the arrangements made agreements, where is the benefit to him to come in? from time to time with foreign countries in recip- In the meantime American wheat continues to be rocal agreements which are supposed to yield bene- shut out of the British market. The British trade fits to us in common with the countries with which returns have just come in, giving the figures for a the agreements are made. We referred last week to month later, and they are of the same character as the Tariff Truce arrangement between Great Britain those for the months immediately preceding. They and the United States, and which was hailed as an show that importations of wheat from Canada and accomplishment of a high order for the United Australia have enormously increased, while those States. We showed that the British Government from the United States have entirely disappeared. appeared to be continuing to arrange new treaties During the month of April not a bushel of wheat giving it preferred treatment over the United States, was imported from the United States, while the notwithstanding the supposed limitation imposed importations from Canada and Australia doubled under the tariff truce arrangement with that coun- and trebled in a comparison of the figures extending try, and we expressed the view that it was difficult back to 1930. In April 1930 the imports from Canto see what advantage the United States was gain- ada and Australia combined were only 2,738,472 ing or likely to gain from the Tariff Truce arrange- hundredweights; in 1931 and 1932 there was an increase, respectively, to 4,255,308 cwts. and 4,260,522 ments with that country. cwts., while in April 1933 there was a further inThe same question will come up with reference to crease for the two countries combined to 8,178,988 any arrangements between the United States and cwts. When the comparison is extended so as to the countries making up the British Empire at the World Economic and Monetary Conference at Lon- cover the whole of the first four months of the calendon next month. The Ottawa agreements, involving dar year, the results appear in even more striking trade preferences to the various dominions within contrast. Here is a table giving the comparative the British Empire, should certainly come up for figures for this period: consideration at that conference, for they operate IMPORTS OF WHEAT INTO THE UNITED KINGDOM FOR very severely to the detriment of American export THE FOUR MONTHS FROM JAN. 1 TO APRIL 30, trade, and especially to the American wheat raiser. IN HUNDREDWEIGHTS. As frequently pointed out in these columns, wheat 1932. 1933. grown in the United States is denied entry into 1931. 1930. Great Britain unless it pays a tax of 6c. a bushel, Australia 11,658,773 8,238,161 7,044,278 4,864,379 17,069,083 9,104,487 7,074,621 while under the Ottawa agreements wheat grown Canada__ 7,110,080 Total 28,727,856 17,342,648 14,118,899 in Canada is completely absolved from the payment 11,974,459 of any duty or tariff. This amounts to an absolute United States 1,680,133 5,006 2,074,577 5,114,730 Argentine Republic 8,252,710 11,839,254 5,813,879 denial of access to the British market for American Soviet 7,533,826 Un.(Russia) 1,151,442 250 7,125,835 524,900 wheat, and really lies at the bottom of the hardship British India 121,730 Other countries 971.377 995,003 962,504 1,485,114 and troubles that the wheat grower in this country Total all 37.957.199 33,008,480 30,217,424 28.63a.n2o has suffered during the last few years. Because of this discrimination, wheat exports from the Let the reader well note the fact that as against United States to Great Britain have now entirely 7,110,080 cwts. imported from Canada during the ceased. Had American wheat been allowed to com- four months of 1930, the imports from the same pete on equal terms with Canadian wheat and with source in the four months of 1933 have risen to 17,Australian wheat, how different would the situa- 069,083 cwts., and the imports from Australia, as tion of the American wheat grower be to-day! against 4,864,379 cwts. in 1930, have expanded to Any tariff arrangement at the London conference 11,658,773 cwts. Taking the two countries comwhich does not involve modification or abandonment bined, the steady expansion finds a most graphic of this tariff discrimination against the United illustration. Whereas in 1930 the imports from the States in the case of wheat and various other articles two countries were only 11,974, 459 cwts., this was coming from the United States, will hardly be de- increased to 14,118,899 cwts. in the four months serving of much attention. Yet at the celebration of 1931,further increased to 17,342,648 cwts. in 1932, throughout the United Kingdom, on Wednesday, of and now.for 1933 has risen to 28,727,856 cwts. On Empire Day, Prime Minister Ramsay MacDonald, the other hand, importations from the United States in his Empire Day message from Lossiemouth, Scot- have kept steadily dwindling, and as against land,laid particular stress on the good accomplished 5,114,730 cwts. in 1930, they dropped to the insigthrough the Ottawa agreements, saying: "The Im- nificant figure of 5,006 cwts. in the four months of perial Economic Conference at Ottawa was an at- 1933. Unless the American farmer once more gains tempt to unite Imperial interests without seriously admission to the British market on terms of equality interfering with our relations with the outside with wheat coming from Canada , his lot will conworld." tinue to be a forlorn one. Volume 136 Financial Chronicle NEWS item which appeared in the daily papers on Thursday morning, with reference to the plans and intentions of the railway labor unions, ought to prompt Congress to amend the Transportation Act before adjournment so as to prevent the carrying out of any schemes of the kind contemplated. In a dispatch from Chicago, May 24, the Associated Press reported that plans of the nation's railroads to serve notice of a further reduction in union wages had been revealed during the day and had met with "a bristling response from spokesmen for organized railway workers." "We will tie up this entire country before we will accept one penny cut in wages," declared A. F. Whitney, Chairman of the Railway Labor Executives' Association, at a meeting of union leaders in Washington. Whitney appeared skeptical, however, that the roads would serve notice on or after June 1, as provided by the contract between employers and employees of a decrease in pay. On the other hand, an official of a large Western road, with headquarters in Chicago, was quoted as saying that he believed the carriers would "insist to the last ditch" on a cut in union pay. He said the slight improvement in railroad business would not allow the roads to make up deficits of recent years unless greatly magnified. Non-union employees, he said, had taken cuts far in excess of the 10% deduction accepted by organized workers early in 1932. Whether the threat to tie up all the railroads of the country is seriously made or not the fact is beyond question that a strike of that kind is possible on the part of the labor unions if they have the audacity to undertake it. And the law should make it impossible for any class of labor to indulge in anything of the kind. It involves altogether too serious an interference with the ordinary everyday affairs of trade and business and of society. No government should place itself at the mercy of any body of men in that way. The labor provisions of the Transportation Act of 1920 are very complicated, and it is very difficult to determine what significance must be given to. them, though the underlying purpose is clear enough, and that is that in case of labor troubles the eventuality of a strike and the consequent cessation of railroad operations shall be delayed as long as possible. These labor provisions should now be clarified, and it should be made impossible for the railroad employees of one road to combine with those of other roads and thereby to bring about a complete cessation of railway operations. Collective bargaining is proper within its legitimate scope, but should be confined strictly to the employees of each particular road or system. If there are grievances these should be settled on the roads where they occur. And the employees of one road should not be permitted to combine with those of any other road or roads with the intent of throttling the entire system of the country. There is too much at stake for everyone to permit anything of the kind even as a remote possibility. A HE chief interest this week in the condition statements of the Federal Reserve banks is in figures showing the holdings of United States the Government securities. The figures fully bear out the statement which came the early part of the week saying that the Reserve banks had been authorized to purchase an additional $25,000,000 of United T 3583 States obligations as a part of the Administration's plan for expanding Federal Reserve credit with a view thereby to bring about a rise in the level of commodity values and replacing deflation' with inflation. Total holdings of United States Government securities are shown to have increased from $1,836,598,000 May 17 to $1,861,712,000 May 24. Holdings of certificates and bills have been reduced during the week from $821,124,000 to $801,523,000, but holdings of Treasury notes have increased from $594,482,000 to $629,583,000, and holdings of United States bonds from $420,992,000 to $430,606,000. Study of the returns, however,shows that it is easier to decree inflation of Reserve credit than it is to carry it into effect, for it appears that notwithstanding the acquisition of $25,114,000 of additional United States securities the amount of Reserve credit afloat, as measured by the total of the bill and security holdings, has actually been reduced in amount of over $27,000,000,the amount of such holdings having fallen from $2,249,770,000 May 17 to $2,221,925,000 May 24. What has happened is that while the holdings of United States securities have been enlarged to the extent of $25,114,000, other classes of bills and securities have diminished. Member bank borrowing, for instance, as reflected by the discount holdings of the 12 Reserve institutions, has fallen from $330,225,000 to $312,165,000, while at the same time the holdings of acceptances have dropped from $77,543,000 to $42,662,000, the Reserve banks evidently being unable to secure a new supply of bills as old holdings matured. This may have been one of the reasons influencing the action of the New York Reserve Bank in reducing its rediscount rate after the 2%,the close of business on Thursday from 3% to 21/ new rate becoming effective yesterday (Friday, May 26). There was also a further large contraction during the week in the volume of Federal Reserve notes in circulation, the amount having dropped during the week from $3,299,995,000 to $3,221,429,000, being a reduction of $78,566,000; and this was offset to the extent of not quite $10,000,000 by an increase in the amount of Federal Reserve bank notes in circulation, this latter having risen from $74,218,000 to $84,211,000. It appears, too, that the member banks in diminishing their borrowings at the Federal Reserve banks as indicated by the decline in the discount holdings of the Federal Reserve banks, were prompted entirely by the fact that their need of borrowing had greatly lessened. This is indicated by the fact that member bank reserves with the Reserve banks increased during the week from $2,114,283,000 to $2,194,390,000, and only $25,000,000 of this can be ascribed to the action of the Reserve banks in acquiring a corresponding amount of United States securities, the money representing the proceeds of the purchases having gone to swell member banks' reserves at the Federal Reserve institutions. A further increase also occurred during the week in the gold holdings of the Reserve banks, the total having risen from $3,467,508,000 May 17 to $3,499,234,000 May 24. With gold reserves further augmented and the liability for account of Federal Reserve notes diminished, a further improvement occurred in the ratio of total gold reserves and other cash to deposit and Federal Reserve note liabilities combined, notwithstanding the big increase in the deposit liabilities by reason of the growth in member bank re- 3584 Financial Chronicle serves. The further increase in ratio has been from 67.1% to 67.8%. The amount of United States Government securities pledged as part collateral for Federal •Reserve notes decreased during the week from $613,400,000 to $471,900,000. The holdings of acceptances for account of foreign central banks were further reduced from $38,886,000 to $36,770,000. HE New York stock market has made a new display of buoyancy the present week, thereby further strengthening the belief of observers of the market that a genuine bull movement is under way rather than a mere temporary upswing such as has happened several times during the long period of depression dating back to the stock market smash in the autumn of 1929. The soundness of this view still remains to be tested by the course of prices during the coming weeks. On Saturday last, and again on Monday, the market was reactionary, this being due largely to the fact that the commodity markets, and in particular grain, were also weak, and furthemmore, that the foreign exchanges ran in favor of the United States for the time being, which is out of harmony with the policy of inflation that is counted upon as a sure expediency for thrusting prices of everything to higher levels. On Tuesday the market again resumed its upward course, one factor in this being that the commodity markets also again showed a rising tendency. A further good piece of news, in current belief, was that the foreign exchanges once more turned strongly against New York, reflecting further depreciation of the American dollar, which in ordinary times would be regarded as a depressing influence, but which is now looked upon as evidence that the policy of inflation is bearing the fruit expected. Rumors also appeared that the Reserve banks had been definitely launched on the campaign of extending their open market operations in the purchase of additional amounts of United States Government securities. As these rumors found definite confirmation at the Treasury Department, prices swung upward with considerable force on Wednesday, and the rise was carried still further on Thursday, even though the grain markets once more showed a weakening tendency. On Friday, with the knowledge that the New York Federal Reserve Bank had, after the close of business on Thursday, reduced its discount rate from 3% to 2y2%, apparently with the view to making the inflationary moves more effective, and the news that a bill had been introduced in Congress on President Roosevelt's request taking the country off the gold basis by statute, prices swung still higher, in many cases to the highest levels reached in about two years, though profit-taking sales brought some reaction at the close. The railroads have been a strong feature all through, on the increase in car loadings and the fact that not a few roads in their returns for the month of April were able to show gains in net as compared with last year, in face of continued shrinkage in the gross revenues. This was taken to mean that with car loadings now increasing, thereby putting an end to the losses in gross revenues, gains in net earnings for subsequent months might be depended upon to show very general and quite substantial gains, enabling the roads once more to earn their fixed charges, correspondingly adding to the value of their securities. The bond market displayed exceptional strength,just as has been the case in recent T May 27 1933 preceding weeks, and noteworthy advances in prices have been recorded both in the low-priced speculative issues and in the case of the gilt-edged list. Great comfort of course was also derived from the continued activity of the steel trade, and the steel stocks, along with the rail list, displayed unusual strength. The "Iron Age" reported the output of steel at the highest rate reached since June 1931. It indicated that the steel mills of the country were now engaged to 38% of capacity as against 35% last week, 31% the previous week, 29% the week before, and only 15% at the beginning of April. The "Age" stated that renewed confidence in the persistence of recent improvement, was characterizing the attitude of both buyers and sellers, and said that "such hesitancy as was caused by the recent pause in steel demand or by the reaction in scrap has been dispelled by the increased buoyancy in the automobile industry, a new spurt in the tin plate business, a steady broadening of miscellaneous steel, and further price advances on both finished steel and pig iron." Many other evidences of reviving trade were also observable, and this naturally led to growing exuberance as to the promise for the later future, even though some of the commodity markets do not show the same sustained strength as before. The July option for wheat in Chicago, after having sold down to 681 / 4c. on Monday, recovered to 72%c. on Wednesday, and closed yesterday at 721/ 4c. against 713 / 4c. on Friday of last week. Spot cotton at New York, after dropping on Saturday last from 8.50c. to 8.25c., sold up to 8.70c. on Wednesday, and was 9.00c. yesterday. The price of silver has also shown a weakening tendency, and the London quotation yesterday was 18% pence per ounce against 181/2 pence on Friday of last week. It should be added that the textile markets are displaying the same activity as the steel trade. Some further dividend reductions and omissions by corporate entities continue to feature the course of events, but attract little attention, since they are taken to reflect past conditions rather than future conditions. Those this week have come entirely from the public utility field. The United Gas Corp. omitted the quarterly dividend due June 1 on the $7 cumul. non-voting preferred stock. The Southern Colorado Power 'Co. reduced the quarterly dividend on the 7% cumul. preferred stock from $1.25 a share to $1 a share. The Indiana HydroElectric Power Co. reduced the quarterly dividend on the 7% cumul. preferred stock from $1.75 a share fo 871/ 2c. a share. The Niagara Hudson Power Corp. took no action on the dividend payable about June 30 on the common stock, and the National Transit Co. declared a semi-annual dividend of 35c. a share on its capital stock as against 20c. a share quarterly previously paid. As indicating the continuous rise in stocks, no less than 495 stocks on the New York Stock Exchange touched new high levels for the year during the week, while only three stocks dropped to new low levels. In the case of the New York Curb Exchange, the week's record is 209 new highs and six new lows. The call loan rate on the Stock Exchange has again ruled unchanged at 1% all through the week. Trading has again been active. On the New York Stock Exchange the sales at the half-day session on Saturday last were 1,300,307 shares; on Monday they were 2,223,460 shares; on Tuesday, 3,143,851) Volume 136 Financial Chronicle shares; on Wednesday, 4,707,400 shares; on Thursday, 4,008,260 shares, and on Friday, 4,346,470 shares. On the New York Curb Exchange the sales on Saturday last were 235,760 shares; on Monday, 332,085 shares; on Tuesday, 403,425 shares; on Wednesday, 491,630 shares; on Thursday, 487,590 shares, and on Friday, 562,066 shares. As compared with Friday of last week, substantial advances are recorded as a rule. General Electric 2 on Friday of 8 against 191/ closed yesterday at 211/ 1 2 against 25; last week; North American at 26/ Standard Gas & Elec. at 12 against 11%; Consoli1 2against 53; Pacific Gas & dated Gas of N. Y. at 54/ / 4; Columbia Gas & Elec. at Elec. at 21 against 243 17% against 16y8; Electric Power & Light at 8 4; Public Service of New Jersey at 49/ 1 4 against 73/ against 47; International Harvester at 36% against / 8 against 33; J. I. Case Threshing Machine at 703 against 26½; Sears, / 2 Roebuck & Co. at 281 59½; 1 2 against 217 /8; Montgomery Ward & Co. at 22/ Woolworth at 39 against 36½; Safeway Stores at 51 against 48½; Western Union Telegraph at 43 / 4 against against 40%; American Tel. & Tel. at 1133 / 4; International Tel. & Tel. at 12% against 1093 / 8; Brooklyn Union Gas at 77% against 76%; 121 / 4 against United States Industrial Alcohol at 471 against 817 / 8 ; Commercial 88 American Can at / 4 ; 303 Solvents at 1834 against 16%; Shattuck & Co. at /8, and Corn Products at 74 FA against 87 against 69. 1 4 Allied Chemical & Dye closed yesterday at 104/ against 1013 4 on Friday of last week; Associated Dry Goods at 1234 against 12%; E. I. du Pont de Nemours at 71% against 621/ 4; National Cash Regis/ 4; International Nickel ter "A" at 19% against 163 1 4 8 against 13%; Timken Roller Bearing at 25/ at 141/ against 22%; Johns-Manville at 35 against 30; Gillette Safety Razor at 131/ 2 against 12%; National Dairy Products at 19/ 1 2against 19; Texas Gulf Sulphur at 27/ 1 2 against 257 /8; American & Foreign Power at 107 /8 against 10%; Freeport-Texas at 35 against 31; United Gas Improvement at 191 / 4 against 18%; National Biscuit at 54/ 1 4 against 49%; CocaCola at 89/ 1 2 against 86%; Continental Can at 57 against 54%; Eastman Kodak at 75/ 1 2 against 75: Gold Dust Corp. at 21% against 201 / 8; Standard Brands at 20% against 18; Paramount Publix Corp. certificates at 7 /8 against %; Westinghouse Elec. & / 4 against 361%; Drug, Inc., at 51/ Mfg. at 411 1 4 against 47; Columbian Carbon at 55/ 1 2 against 52; Reynolds Tobacco class B at 41/ 1 2against 40; Lorillard at 20 against 18%; Liggett & Myers class B at 87% against 8234, and Yellow Truck & Coach at VA against 5%. The steel shares have displayed great strength on the steady increase in steel production. United States Steel closed yesterday at 51/ 1 4 against 47/ 1 2 Friday United of week; States last Steel preon ferred at 901 / 2 against 843 / 8; Bethlehem Steel at 277 /8 /8, and Vanadium at 20% against 19/ against 257 1 4. In the auto group, Auburn Auto closed yesterday at 53/ 1 2 against 49% on Friday of last week; General Motors at 25 against 22%; Chrysler at 22% against /8; Packard 201%; Nash Motors at 18 against 177 1 2 against 41/ 1 2 2; Hupp Motors at 4/ Motors at 4/ 8, and Hudson Motor Car at 73 / 4 against against 41/ 71%. In the rubber group, Goodyear Tire & Rubber closed yesterday at 32% against 30% on Friday of last week; B. F. Goodrich at 12% against 11%, and 1 2 against 8%. United States Rubber at 9/ 3585 The railroad shares have also swung upward in notable fashion. Pennsylvania RR. closed yesterday at 257 / 8 against 24% on Friday of last week; Atchison Topeka & Santa Fe at 68 against 61%; 4 against 42½; Chicago Atlantic Coast Line at 453 1 4; New York Rock Island & Pacific at8% against 8/ Central at 30% against 28½; Baltimore & Ohio at /8 against 22%; 17/ 1 2against 16%; New Haven at 237 1 2 against 90; Missouri Pacific Union Pacific at 101/ at 31/4 against 3%; Southern Pacific at 24% against / 4 against 12; 23%; Missouri-Kansas-Texas at 123 against 15%; 8 167 / Chesapeake Southern Railway at & Ohio at 36/ 1 4 against 35%; Northern Pacific at 24 1 4 against 21. against 22, and Great Northern at 22/ The oil shares have against lagged behind. Stand4 ard Oil of N.J. closed yesterday at 34% against 343 on Friday of last week; Standard Oil of Calif. at 4 against 311/ 8 against 31; Atlantic Refining at 221/ 1 4. 1 2 against 18/ 221/ 8, and Texas Gulf Sulphur at 27/ In the copper group, Anaconda Copper closed yester/8 on Friday of last week; / 8 against 127 day at 133 8; American / 8 against 171/ Kennecott Copper at 175 281 / 8; Phelpsagainst at 31 / 1 2 & Refining Smelting Dodge at 12 against 11½;Cerro de Pasco Copper at 1 4 21% against 20%, and Calumet & Hecla at 5/ / 4. against 43 RICE trends were irregular this week on stock exchanges in all the foremost European securities markets, owing largely to a renewal of the uncertainty which has prevailed throughout the world on diplomatic and economic matters during recent years. The confidence occasioned by President Roosevelt's message on peace last week was largely dissipated as the representatives of the leading Powers continued the difficult dispute on disarmament at Geneva. There was also less optimism regarding the prospects of the World Monetary and Economic Conference which is to open at London on June 12. The war debt question became a matter of deep concern as the next payments to the United States are due on June 15. With uncertainty prevalent in so many matters of great importance, investment activities were moderate in the European markets. There were increasing speculative tendencies, however, especially in th London market, where some industrial stocks were bid up sharply. Such activities were stimulated to a degree by reports of advancing prices on the New York market, and by the growing belief in London that the industrial and price improvement in the United States heralds the end of the long depression. The Paris and Berlin markets were subdued all week, as apprehensions are pronounced in both centers regarding the international political siutation. The London market was cheerful as business was resumed on the Stock Exchange, Monday. Investment securities were inactive, and slight losses were reported in most gilt-edged issues. British industrial stocks were better, however, and home rail issues also were firm. International securities were uncertain, with the trend mainly downward. In a quiet and irregular session, Tuesday, British funds again declined, as there was little support. Industrial stocks made progress, and there were good features among shipping, distillery and rubber company stocks. South African gold mining shares also improved. International issues again were uncertain. Activity increased on the London Stock Exchange in Wednesday's session, but the general 3586 Financial Chronicle may 27 1933 tendencies were much the same as in preceding ses- Chancellor Hitler on the following day undoubtedly sions. Gilt-edged securities moved lower, while in- contributed to a continuance of the General Disdustrial stocks advanced. Reports from New York armament Conference at Geneva, which was in danthat steps for inflation were in progress contributed ger of complete collapse, it is not yet clear that a to the upswing in the more speculative departments basis for genuine disarmament •has been brought of the market. Anglo-American trading favorites appreciably nearer. The powerful support accorded were in excellent demand. In dealings on Thursday, the MacDonald disarmament plan by President British funds and other gilt-edged securities drifted Roosevelt and Chancellor Hitler made the British slowly lower, while industrial stocks advanced with project the sole subject of consideration at Geneva few exceptions. There was a little irregularity this week. A few quick forward steps were taken, toward the close, owing to publication of some un- but French objections to some features of the plan favorable reports by companies. The international were voiced Tuesday. The French objections not group was cheerful. Reactionary tendencies pre- only illustrated once again the conflicting interests vailed yesterday, owing mainly to profit-taking in involved in the disarmament problem, but they indiindustrial stocks. British funds remained soft. cated also that a protracted and quite possibly futile Trading on the Paris Bourse was extremely quiet, debate will follow on some of the most essential Monday, with the trend hesitant. The international features of the British plan. situation diverted attention from stocks, most of Of equal interest with the debate on the British which showed modest losses for the session. Per- plan were several additional statements on the sistent rumors that the United States dollar soon American attitude toward international consultawill be stabilized were prevalent in Paris, and these tion, made at Geneva by Norman H. Davis, United led to the impression that the commodity price rise States Ambassador-at-large and head of the Amerin this country will be halted. Liquidation on a ican delegation to the General Disarmament Conmodestscale resulted. Dealings Tuesday were again ference. In an address delivered Monday, before an in small volume, but a better impression prevailed attentive audience, Mr. Davis announced that the regarding prospects for continued European peace, United States is "willing to consult the other States, and moderate advances in securities were the rule. in case of a threat to peace, with a view to averting A debate on the budget in the Chamber of Deputies conflict." His statement was received with some occasioned some fears regarding the life of the Dala- enthusiasm in Geneva, dispatches from that city dier Government, and this factor kept the advance indicating that Mr. Davis was considered to have to small proportions. Trading was active only in "renounced isolation" in behalf of the United States, South African gold mining stocks. Changes in and to have "pronounced neutrality dead." The Wednesday's dealings again were small, but the tone declaration, however, added only a little to the statewas firm. Reports of a good trend in New York ment on the subject by President Roosevelt. and of further commodity price advances stimulated Candid facing of the problem reveals that there the French market a little. International securities is no alternative to disarmament which a sane world did better than French issues. The Paris Bourse could consider, Mr. Davis remarked. The position was closed, Thursday, in observance of Ascension of the United States in this regard is much simpler Day. Prices drifted downward in a quiet session on than that of the European nations, he admitted. the Bourse yesterday. "It is our very detachment from this situation which A confident tone prevailed on the Berlin Boerse, gives us hope that we may exert a helpful influence Monday, owing to reports from Rome that a four. toward the realization of our common objective," Power pact to preserve peace in Europe had been Mr. Davis continued. "As regards the level of armainitialed by diplomats. Although the best prices ments, we are prepared to go as far as the other of the day were not fully maintained, advances of States in the way of reduction. We feel that the 2 to 3 points were reported in leading issues. Fixed- ultimate objective should be to reduce armaments income issues also hardened. After an uncertain approximately to the level established by the peace opening, Tuesday, prices advanced slightly, and treaties; that is, to bring armaments as soon as posmost of the early losses were regained. Net changes sible through successive stages down to the basis of for the session were unimportant, and deslings also a domestic police force. In particular, as emphawere in small volume. The dubious issue of the sized by President Roosevelt, we are prepared to General Disarmament Conference disturbed the Ber- join other nations in abolishing weapons of an aglin market Wednesday; and trading was at a mini- gressive character which are not only the more mum. Stocks and bonds alike were listless, and costly to construct and maintain, but at present changes were irregular, but quite unimportant. The are those more likely to lead to a breach of the Berlin market was closed, Thursday, in holiday ob- peace." Reminding the Conference that a someservance. The tone was soft as business was re- what similar proposal was made about a year ago sumed yesterday, and substantial losses were by the United States Government, only to meet deregistered. feat because it was not acceptable to certain States, Mr. Davis stated that the Washington Government NTERNATIONAL debate on the disarmament now accepts whole-heartedly the British proposal 1 problem was continued this week with an appar- as a "definite and excellent step toward the ultimate ently increased determination to achieve satisfac- objective." tory results, owing to the appeal by President In other ways, also, the United States is prepared Roosevelt on May 16 for practical measures of dis- to contribute to the organization of peace, Mr. Davis armament and his warning that the political and declared. "In particular, we are willing to consult economic peace of the world depends upon concerted the other States in case A a threat to peace with a efforts, to be made by all nations in genuine sin- view to averting conflict," he said. "Further than cerity. Although the dramatic statement last week that, in the event that the States, in conference, deby Mr. Roosevelt and the conciliatory address by termine that a State has been guilty of a breach of Volume 136 Financial Chronicle 3587 United States will undertake to rethe peace in violation of its international obligations ernment of the action, and to withhold protection from and take measures against the violator, then, if we frain from engaged in activities which would tend concur in the judgment rendered as to the respon- its citizens if collective effort which the States in sible and guilty party, we will refrain from any to defeat the decided upon against the aghave action tending to defeat such collective efforts consultation ." which these States may thus make to restore peace." gressor These recent developments make it plain that the The proposal by President Roosevelt that the naAdministration in Washington is attemptpresent existtions agree to an undertaking that, subject to a common ground between the European to find ing sent be not ing treaty rights, armed forces should American participation in a definite guaracross national frontiers, was restated at Geneva desire for and the even more pronounced resolve by Mr. Davis. "In the long run," he added,"we may antee of peace, an people and the American Senate to come to the conclusion that the simplest and most of the Americ from European concerns. Whether the accurate definition of an aggressor is one whose remain aloof succeed remains to be seen, although will armed forces are found on alien soil in violation of experiment observers seem to incline to the ed most inform treaties." attempt to please everyone will the that n Several long steps toward implementation of the opinio in pleasing no one. In Geneva ially, proverb result, Roosevelt proposal for American consultation with sion, according to some disimpres nt prevale the Britother States, and toward its adaptation to the that President Roosevelt intends to make ish plan of disarmament, were taken in the session patches, is an declaration an executive one, which of the General Disarmament Conference held on the Americ require the approval of the Senate. Any Wednesday. Sir John Simon, Foreign Secretary of will not action, of course, would be binding Upon the Great Britain, presented to the Conference a new such States only in a very limited sense, and only draft of a consultation agreement to be included United term of office of the present Administrain the disarmament convention, and designed to during the held doubtful that the European nations is assure consultation by the United States and Soviet tion. It upon any extensive disarmament embark Russia in the event the Kellogg-Briand pact is vio- would American obligation is made more the unless lated. Mr. Davis promptly indicated that the project ng. Equally, any attempt to inenduri and c specifi United States Government, if the British draft inevitably effective American guaranproves acceptable, will make a unilateral declara- corporate an treaty would meet relentless oppotion that it is prepared to confer in such circum- tee in a formal Senate, it is maintained. In informal stances. Valerian Dovgalevsky, of Russia, gave sition in the explanations last week it was stated tentative support to the project. After a short de- White House States Government does not probate, during which several minor amendments were that the United its established policy of formoffered and adopted, the proposal was accepted pose to depart from ions and taking its own position unanimously by the general commission of the Con- ing its own conclus On this basis little likelicase. in any particular ference. most cautious and tentathe but any of The draft agreement prepared by Sir John Simon hood is seen ament by the more disarm e genuin toward and thus approved provides that in the event of a tive steps . Europe of States armed breach or threat of a breach of the Pact of Paris heavily Difficulties again began to crowd upon the gen(Kellogg-Briand treaty), either the Council or the sion at Geneva, Thursday, and the body Assembly of the League of Nations, or one of the eral commis in some dispatches already "far away parties to the general convention who are not mem- was reported nted situation that followed Presibers of the League of Nations, may propose immedi- from the rose-ti lt's peace message." An attempt was ate consultation between the Council or Assembly dent Rooseve a hard and fast definition of an agand any of the non-member States that are parties made to reach n Anthony Eden, of Great Captai but to the convention. Such consultation shall have the gressor, on the ground that it firmly it d oppose , object, the draft agreement states, of an exchange of Britain for the innocent and trap a only be to prove views for the purpose of preserving peace and avert- might will be necessary to It guilty. the for ion of and protect ing conflict if there is a threat of a breach, of aggression in case each of ound backgr the of know peace tion the use of good offices for the restora party, Captain ible the respons ine determ to ble order proves impossi if an actual breach occurs. If it objected to of Japan, Sato, e Naotak d. declare ine Eden shall determ ants to restore peace, the consult l the inclusion in the proposed genera convention of which party or parties are to be held responsible. ce to the London and Washington naval Mr. Davis promptly responded to the Simon pro- any referen s, such references might appear to sanctify posal with a statement that if it is found acceptable treatie as will be unacceptable to Japan after their the United States would make a unilateral declara- pacts that This declaration merely reflected the tion approximately in the following form: "Recog- expiration. of Japan for a higher ratio than desire nizing that any breach or threat of a breach of the well-known the London treaty of 1930. It in ed her was accord Pact of Paris is a matter of concern to all the signaeven the present agreements that r, howeve ed, the States indicat United tories thereto, the Government of prove to be short-lived, may ction constru naval on of a breach event the in of America declares that, here was made correatmosp ence the and Confer it will prebe Pact, this of or a threat of a breach . There were few delegates gloomy more ngly of spondi peace nance to mainte view pared to confer with a that even said, d, the broad outreports believe who is e such purpos for ation consult in the event that ent be reached ament can a agreem of disarm lines 1 of Part — to — Article to arranged pursuant ry and Economic ConferIn the event that before the World Moneta of the disarmament convention. on 12. at London June of Powers in ence opens a decision is taken by the Conference The question of land armaments was debated at or, with the aggress ining determ in consultation earlier in the week, but the results here also which on the basis of its independent judgment the Geneva encouraging. Count Rudolph Nadolny, of not were Government of the United States is agreed, the Gov- 3588 Financial Chronicle May 27 1933 Germany, announced the formal acceptance by his ers in the Italian capital. The draft made it clear, Government of the British plan of disarmament,this an Associated Press dispatch said, that the four action having been foreshadowed by Chancellor nations would not impose any solutions on other Hitler in his address before the Reichstag. It was countries, but a revision of the post-war treat ies was indicated in Paris, last Sunday, that France also stated definitely to be a possibility under Leag ue of would accept the plan, but with reservations, and Nations procedure. In general, the pact draft was there was keen interest at Geneva regarding the said to be a restatement of previous accor ds for nature of the reservations. Joseph Paul-Boncour, international collaboration. This development the French Foreign Minister, made the French poadded to the hopefulness regarding peace and dissition clear on a few points in an address, Tuesday, armament that prevailed after President Roosevelt before the General Disarmament Conference . sent his message to the heads of almost all important "When the time comes for definite decisions," he States last week. After study of the document, it said,"we shall then express the definite view which was indicated at Paris, Wednesday, that it diverged we have frequently expressed before, that destrucseriously from the French position and that distinct tion of the so-called weapons of offense would be changes will be necessary before it can be initialed an abdication and desertion of the League of Naand submitted for Parliamentary ratificati on. The tions." The readiness of France to hand over these extent and nature of the French reser vations was weapons to the League was reiterated by M. Paulnot fully disclosed, but it was assumed in European Boncour, but as it is obvious that this arrangement diplomatic circles that they would accord with seriwould hardly suit other States, progress toward the ous objections to the pact, voiced by Pola nd and the elimination of offensive arms seemed halted. The Little Entente allies of France. Optimism regarddelegates seemed hopeful for a time, but when the ing this development also dwindled. French declaration was made they "resumed the cynical expressions they have worn most of last LTHOUGH the opening of the World Monetary year," a dispatch to the New York "Herald Tribune" and Economic Conference at London is now said. only two weeks off, there are as yet few indications A number of additional replies to President that universally satisfactory adjustments Roosevelt's message to the heads of all States repre will be - reached at the parley. In Washington preliminary sented at the Geneva and London conferences were conversations designed to make the Lond on meetreceived in Washington this week, and in all ining a success were continued with Japa nese delestances profound diplomatic satisfaction was exgates, who will be the last special delegates to visit pressed concerning the American initiative. The this country for the purpose. Viscount Kikujiro omissions, however, were far more important than Ishii and his Japanese associates arrived in Washthe statements in the replies, as they appeared to ington, Tuesday, and it was promptly indicated that reflect hesitation in highly important capitals. The the influence of the delegation will be exerted at formal reply of the British Government was received London in favor of lower tariffs. The first in Washington on Tuesday. It expressed appre meeting cia- of the Japanese with President Roose velt and Section for the message and satisfaction regarding the retary of State Cordell Hull was held President's advocacy of the British disarmam Wednesday, ent and the talks were continued there after. The simiplan. But no reference was made to Mr. Roose velt's lar conversations with the Chine se delegation, proposal for a new treaty of non-aggression. Emheaded by Finance Minister T. V. Soong, were conperor Hirohito, of Japan, acknowledged the Roose - cluded May 19, and a joint statement issued by velt message last Saturday, and indicated that it President Roosevelt and Mr. Soong noted with prohad been transmitted to the Tokio Government for found gratification that the two count ries are in consideration. A highly cordial acceptance of all agreement regarding the practical measures to be of Mr. Roosevelt's proposals was received from taken for a solution of the major prob lems which China, Saturday, while the Argentine Government confront the world. "We consider it essential," the expressed its "decided adhesion" to the ideas of the state ment said, "that the price of silver, the great President in a message received at Washington on medi um of exchange of the East, should be Monday. Mikhail Kalinin, President of the Unio enhanced n and stabilized." of Russian Soviets, replied late last week with a Selection of the delegates to represent the United cordial acceptance in which he recalled that the State s at the London gathering was continued by Soviet Government has concluded non-aggression Presi dent Roosevelt. Representative S. D. McReytreaties with most of the Governments with which nolds , of Tennessee, was appointed Chai rman of the it is in formal relationship. American delegation, Wednesday. Delegates previously announced are Secretary of State Cordell HILE the discussion on international disarma- Hull, Senator Key Pittman, and James M. Cox, of ment was in progress at Geneva and in Ohio. It was again indicated in Washington that many world capitals, Premier Benito Mussolini re- Presi dent Roosevelt intends to ask autho rity of newed his efforts to make the peace of Europe secure Congress to make downward adjus tments of tariff through a four-Power accord. Heartened by indicarates, in the event that agreements to this effect are tions that the British Government remained quite reached at London. In contrast with previous tendfriendly to his suggestion, Signor Mussolini conencies at Washington to emphasize the importance ferred late last week with Captain Hermann Goeof the London conference a warning not to expect ring, Minister in the German Cabinet, and with the too much of the gathering was voiced last Saturday, British and French Ambassadors in Rome. A draft as already indicated in the earlier part of this of the, proposed treaty, whereby Great Britain, artic le, by Raymond Moley, Assistant Secretary of France, Germany and Italy would bind themselves State and one of President Roosevelt's principal adto keep peace for 10 years, was drafted and approved visers on world affairs. "In large part the cures last Sunday by the representatives of the four Pow- for our diffic ulties lie within ourselves," Mr. Moley A W Volume 136 Financial Chronicle said. "Each nation must set its own house in order and a meeting of representatives of all the nations is useful in large part only to co-ordinate in some measure these national activities. Beyond this there are relatively few remedies which might be called international remedies." N EUROPEAN countries the matter of primary 1 interest remained that of the war debts, which it is believed will be discussed at London concurrently with the sessions of the World Economic Conference. No hint of any kind has been given by the London Government regarding its intended procedure on June 15, when the next instalment of the debts is due. It is clear that the London conference will be unable to reach any decisions that might warrant action with regard to the war debts before the payment is due, and it has been made plain by President Roosevelt that he does not intend to ask authority of Congress to declare a moratorium. The debtor countries, therefore, will again have to make their own decisions on the payments due next month, and this matter overshadows the forthcoming World Economic Conference. Diplomatic circles in Paris were said in press dispatches early this week to be convinced that all the debtor nations will default. It was considered almost certain that France again will default on her payment, which amounts to $40,738,000 on this occasion. No indication of Italian intentions has been made available, other than a suggestion by Finance Minister Guido Jung, presented in a budget report, that the war debts be reduced by 80%. There were numerous reports early this week from European capitals, to the effect that the United States Government planned to establish an exchange stabilization fund, somewhat similar to the British Exchange Equalization Fund. No confirmation of such reports could be obtained on this side of the Atlantic. There was a tendency in some quarters to credit the reports, however, when it became known that Prof. 0. M. W.Sprague,financial adviser to the Bank of England, had been recalled to this country and invited to become financial adviser to the United States Government. Mr. Sprague's appointment as executive assistant to Secretary of the Treasury Woodin was confirmed Wednesday,and he promptly indicated that there is no present intention of stabilizing the United States dollar. "The currency of one country cannot be stabilized unless other currencies are put in order," Dr. Sprague said. He indicated that he may accompany the United States delegation to London as a financial expert. 1STURBANCES in Central Europe which accompanied the German change from a Republican to a Fascist form of government are rapidly lessening, and the persecutions by the Nazis of their political opponents and of persons of the Jewish faith also are dwindling. The National-Socialist power has apparently been consolidated to a sufficient extent to permit a start on measures for the common welfare. Orders were issued last Saturday for the formation of a labor-service unit of German youths, who will receive an appropriate wage and will perform required work. The Nazi leaders have indicated that such measures are intended not only to aid the unemployed, but also to inculcate pride in manual labor among young Germans. A decree was issued Tuesday designed to stop inter- D 3589 ference by self-appointed Nazi groups with business establishments, and it is noted, moreover, that the regular Nazi units no longer carry bristling arrays of arms. Restrictions on Jewish business men also have been modified to a degree. German antiSemitism has been placed on the agenda of the League of Nations Council for a hearing, and it is possible that this further indication of world-wide concern regarding the treatment of Jews in the Reich is aiding in the modification of the campaign. The matter was considered by the League Council on the petition of a German Jew against the treatment of minorities in Upper Silesia. The Nazi movement, which made great progress in Austria, Dantzig, and even in Hungary,immediately after the German overturn, now seems to have been checked in the areas contiguous to the Reich. ESSATION of hostilities in the dispute between Colombia and Peru regarding the Amazon River port of Leticia was announced in Bogota and Lima, Thursday, after a period of strenuous negotiations in which the League of Nations Council mediated between the two countries. The attitude of Peru on this conflict changed materially after the assassination of President Sanchez Cerro and the inauguration of President Benavides, and the prospect for a settlement of the informal war has been bright for some weeks. The League of Nations announced on May 12 that it had suggested adjustment through evacuation of Leticia by Peru, and placing of the area under the jurisdiction of the League. Direct negotiations were instituted at Lima, thereafter, between Alfonso Lopez, special envoy of Colombia, and the officials of the new Peruvian regime. In such conversations it was proposed, dispatches indicated, that Colombia return the Peruvian port of Guepi, on the Putomayo River, which was captured in the unofficial war. This action, it was suggested, could parallel the return of Leticia to Colombia through League auspices. Settlement finally was arranged on this basis, Thursday, and steps were taken at Geneva to name commissioners who will journey to the area and effect the transfers of sovereignty. The war thus terminated had been in progress since September last year, when Peruvian nationals seized the Colombian port. The actual clashes in the conflict were minor affairs, but preparations for extensive hostilities were in progress when the adventurous and war-like President Sanchez Cerro, of Peru, was killed by a political opponent. C IGHTING on an exceedingly widespread scale was carried on this week in the undeclared war between China and Japan, now being waged in China proper, south of the Great Wall and north of the old capital, Peiping. Panic conditions prevailed for a time among the Chinese populations of Peiping, Tientsin and other large cities near the battle area, but the Japanese advance was halted outside these places. The aims of the Japanese in this new invasion remain veiled in obscurity. The movement, of course, is in flagrant contradiction to the innumerable Japanese official statements that no territory of old China is coveted by the Tokio Government. In most quarters it is assumed that another "buffer State" will be set up in the area now taken. Adding to the confusion regarding the invasion and the aims of the Japanese were flatly contradictory 3590 Financial Chronicle reports regarding armistice negotiations in progress between the Chinese and Japanese. A Tokio report stated yesterday that a preliminary truce had been arranged and that the Japanese had engaged to remain north of a line above Peiping and Tientsin. The Foreign Office in Tokio announced this arrangement formally, but the world no longer is accustomed to placing any reliance upon Japanese statements. A Tientsin report, on the other hand, indicates that the Japanese have demanded recognition by China of the independence of the puppet State of Manchukuo; an indemnity from China of all Japanese expenses in the expedition south of the Great Wall, and immediate evacuation and permanent neutrality of the entire zone between the Great Wall and the Yellow River. May 27 1933 Friday of last week, and M% for three months' bills, as against 3/2%@9-16% on Friday of last week. Money on call in London yesterday was 3.1%. At Paris the open market rate remains at 23.4% and in Switzerland at 13/27o. T HE weekly statement of the Bank of France dated May 19, reveals an increase in gold holdings of 25,154,006 francs. The total of gold is now 80,929,323,900 francs, in comparison with 78,906,967,186 francs last year and 55,632,650,347 francs the previous year. French commercial bills discounted and bills bought abroad record increases of 20,000,000 francs and 47,000,000 francs, while credit balances abroad show no change. Notes in circulation contracted 657,000,000 francs reducing the total of notes outstanding to 83,368,085,040 francs. A year ago circulation aggregated 81,247,175,515 francs and the year before, 76,825,870,810 francs. The proportion of gold on hand to sight liabilities stands at 78.15%,as compared with 72.66% a year ago. A decrease of 27,000,000 francs is shown in advances against securities and an increase of 588,000,000 francs in creditor current accounts. Below we furnish a comparison of the various items for three years: RANK OF FRANCE'S COMPARATIVE STATEMENT. _ HE Bank of England statement for the week ended May 24 shows a further slight gain in gold holdings of £31,926 which brings the total up to £187,008,683, the largest amount ever held. This is the seventh occasion this year on which gold holdings have reached a new high record. The present figure compares with only £125,761,106 a year ago. Circulation during the past week fell off £763,000 and this together with the gain in gold brought about an increase of E795,000 in reserves. Public deposits rose £113,000 and other deposits Changes for week. May 19 1933. May 20 1932. £1,785,973. The latter consists of bankers' accounts May 22 1931. Francs. Francs. which increased £1,906,651 and other accounts which Gold holdings Francs. Francs. +25.154,006 80,929,323,900 78,906,967,186 Credit bills. abroad_ No change 2,462,469,046 4,585,238,988 55,632,650,347 fell off £120,678. The reserve ratio is now 50.69%; • 5,650,990,157 French commercial bills discounted— +20,000,000 3,109,754,180 3,450,549,071 a week ago it was 50.80%, and a year ago 34.70%. b Bills 5,344,470,697 +47,000,000 1,419,131,011 5 bought abr'd ,433,959,805 20,506,045,265 Adv. against secure—27,000,000 2,629,061,878 2,719,186,593 Loans on Government securities increased £1,550,000 Note circulation._ —657,000,000 83.368,085,040 81,247,175,515 2,770,350,865 Credit current accts- +588,000,000 20.182,825,938 27,352,583,325 76,825,870,810 22,775,055,404 but those on other securities fell off £437,876. Of Propor. of gold on hand to sight llab+0.07% ' 78.15% 72.66% 5/1 RIM. the latter amount £174 was from discounts and a Includes bills purchased in France. b Includes bills discounted abroad. advances and £437,702 from securities. The rate —4 -of discount did not change from 2%. Below we HE Bank of Germany in its statement for the third furnish a statement showing the different items with quarter of May shows a further loss in gold comparisons for back years: and bullion, this time of 12,676,000 marks. Bullion RANK OF ENGLAND'S COMPARATIVE STATEMENT. now aggregates 372,348,000 marks in comparison with 856,284,000 marks last year and 2,370,420,000 May 25 May 27 May 24 May 28 May 29 1931. 1932. 1933. 1930. 1929. marks the previous year. A decrease appears in £ £ E £ E 369,874.000 354,221,189 354,859,723 356,131,648 360,106.563 Circulation_a reserve in foreign currency of 1,014,000 marks, in 15,707,000 23,606,213 17,448,616 13,241,450 24,340,708 Public deposits 136,456,764 110,492,483 88,581,183 84,870,578 91.617.663 Other deposits bills of exchange and checks of 59,545,000 marks, Bankers accounts.. 99,204,834 77,544.132 54,760,689 48,963,730 56,349,043 Other accounts_ 37,251,930 32,948,351 33,820,494 35,906,848 35,268,620 advances of 6,074,000 marks, in investments in 70,001,127 69,374,656 31,214,684 45,577,629 40,031,855 Govt. securities of 22,810,605 35,960,003 35,378,170 18,321,267 30,574,080 Other securities 53,000 marks and in other assets of 53,983,00 Dlsct.& advances_ 11,573,631 12,171,642 6,825.098 6,805,493 8,151.163 0 11,236,974 23,788,361 28,553,074 11,515,774 22,422.917 Securities marks. Notes in circulation show a contraction of Reserve notes & COM 77,134,000 46,539,917 57,218,304 61,985,151 63,163,000 Coin and bullion 187,008,683 125,761,106 152,078,027 158,116,699 163,269,940 90,910,000 marks reducing the total of the item Proportion of reserve to 84.48% 57.33% 53.96% 34.70% 50.69% )''' to liabilities 3,245,594,000. The total of circulation last Flank mfr. 2% 3% 214% 234% 534% year a On Nov.29 1928 he fiduciary currency was amalgamated with Bank of England stood at 3,739,275,000 marks and the year before note Issues, adding a that time. E234,199.000 to the amount of Bank of England notes outstanding. at 3,751,395,000 marks. The proportion of gold --•-and foreign currency to note circulation is now at HE Bank of Norway on May 23 reduced its dis- 14.1%; a year ago it stood at 26.5% and two years count rate from 4% to 33/2%, the former rate ago it was 68.4%. Silver and other coin, notes on having been in effect since Sept. 1 1932. Present other German banks, other daily maturing obligarates at the leading centers are shown in the table tions:and other liabilities record increases of 55,511,000 which follows: marks, 2,605,000 marks, 12,865,000 marks and 2,DISCOUNT RATES OF FOREIGN CENTRAL BANKS. 816,000 marks respectively. A comparison of the Rate in Pr.Rate in Prevarious items for three years is furnished below: Country. Etfeet Date Date stout pious Country. Effect T T T Afay26 Irsiablithetf. Austria Belgium— Bulgaria— Chile Colombia Czechoslovakia-Danzig-Denmark... England— Estonia.— Finland._ France-Germany _. Greece 5 334 834 4% 5 334 4 334 2 534 8 234 • 9 Mar.23 1933 Jan. 13 1932 May 17 1932 Aug. 23 1932 Sept.19 1932 Afay26 Established. Rate. 6 234 954 534 8 Jan, 25 1933 434 July 12 1932 5 Oct. 12 1932 4 June 30 1932 236 Jan. 29 1932 834 Jan. 31 1933 7 Oct. 9 1931 2 Sept.81 1932 5 Dec. 8 1932 10 Holland.,... Hungary... India Ireland-Italy Japan Lithuania-. Norway... Poland... Portugal.... RUMSX1111.... SouthAfrica Spain. Sweden.— Switzerland 334 May 11 1933 434 Oct. 17 1932 334 Feb. 18 1933 June 30 1932 3 Jan. 91983 4 4.38 Aug. 18 1932 May 5 1932 7 334 May 23 1933 Oct. 20 1933 8 Mar.14 1933 8 Apr. 7 1933 8 Feb. 21 1933 4 Oct. 22 1932 8 334 Sept. 1 1932 Jan. 22 1931 2 Rate. a 5.11 754 4 734 654 7 5 651 4 234 In London open market discounts for short bills 2%,as against 7-16@3/2% on on Friday were 7-16©3/ REICHSBANK'S COMPARATIVE STATEMENT . 254 5 4 354 Changes week. Gold and bullion Of which depos. abroad Reserve in foreign curr_ Bills of exch. and checks Silver and other coin— Notes on other Ger. bks Advances Investments Other assets Liabilities— Notes in circulationOther daily matur.oblig Other liabilities Propor.of gold de foreign curr. to note <groan- May 1933 May 23 1932. May 23 1931. ak rM;s. Ileatychsmarke. Reichamarks. Retchernarks. Reie fr 0hsmee —12,676,000 372,348,000 856,284 000 2,370.420.000 No change 18,714.000 '207,638,000 98,795,000 —1,014,000 86,544,000 134,630,000 196,564,000 —59,545,000 2,869,260,000 2,798,891,000 1,430,498,000 +55,511,000 332,462,000 333,443,M 199,668.000 +2,605.000 13,975,000 20,856.000 11,036,000 —6,074,000 63.568,000 87.070,000 95,150,000 —53,000 317,089,000 361,561000 102.710,000 —53,983,000 332,644,000 783,391,00 472,266,000 0 —90.910,000 3.245,594,000 3,739,275,000 3,751,395,000 +12,865,000 371,351,000 364.566,000 374,394,000 +2,816,000 147.794,000 703,119,000 246,932.000 —0.1% 14.1% 20.5% 68.4% 3591 Financial ,Chronicle of acceptances have dropped during the HE artificial New York money market was ren- holdings $77,543,000 to $42,662,000. Their holddered somewhat more so this week by an accen- week from acceptances for foreign correspondents also tuation of the already exaggerated open market ings of d during the week from $38,886,000 to operations of the Federal Reserve banks, and by a decrease Open market rates for acceptances reduction in the Federal Reserve Bank of New York $36,770,000. as are follows: rediscount rate from 3 to 23/2%. It was indicated SPOT DELIVERY. —180 Days— —150 Days— —120 Days— Reserve Federal the that , Tuesday ton, in Washing Bid. Asked. Asked. Asked. Bid. Bid. further 1 1H 1 1% banks had been authorized to purchase a Prime eligible bills —90Days— —60Days— —30Days $25,000,000 in United States Government securities, 131d. Asked Asked. Bid. Asked. Bid. weekly the as H 34 Si and the addition was quickly made, 34 % Prime eligible bills FOR DELIVERY WITHIN THIRTY DAYS. statement disclosed an increase of this amount. 1% bid member banks This is the first step in the credit inflation program Eligible 134% bid Eligible non-member banks of the present Administration, and Secretary Woodin indicated that more purchases will be made from OTH the New York Federal Reserve Bank and time to time as conditions justify. From the strictly the Chicago Federal Reserve Bank lowered their money market point of view it can hardly be claimed rediscount rates this week. The change in the that there is any justification for more purchases of rate of the New York Reserve Bank was announced Federal securities, as rates are inordinately low. on May 25, and was put into effect yesterday (May The reduction in the rediscount rate of the New York 26). Instead of 3% as heretofore, the rate of the institution, announced Thursday, was made effective New York Reserve Bank, under this week's action, yesterday. The Chicago Federal Reserve Bank has is now 23/2%. The Chicago Reserve Bank yesterday followed by reducing its rate from 33/i to 3%. reduced its rate from 33/2% to 3%. Owing to the extreme ease already prevalent, there was little reflection of the increased open market HERE have been no other changes this week in acquisitions in the money market here. The rate for the rediscount rates of the Federal Reserve call loans on the New York Stock Exchange was 1% banks. The following is the schedule of rates now for all transactions, whether renewals or new loans, in effect for the various classes of paper at the this level holding unchanged yesterday as well as on different Reserve banks: BANKS. all previous days of the week. In the unofficial outDISCOUNT RATES OF FEDERAL RESERVE side market, call loans were reported arranged every Rate in Previous Data Effect on Federal Reserve Bank. day at %% to %%, depending on the collateral Rate. Established. May 26. offered. Time money rates were unchanged at a Boston_ 2% Oct. 17 1931 34 3 May 26 1933 234 New York 3 range of 1 to 13/2%. Minor easing was reported in Philadelphia 1931 22 Oct. 335 3 1931 24 Oct. 334 4 1932 25 the commercial money market. An issue of $60,000, Cleveland Jan. 334 Richmond 3 Nov. 14 1931 334 Atlanta awarded 31-4 1933 27 May 000 in 91-day Treasury discount bills was 3 Chicago 234 1931 22 Oct. 334 Louis 4 Sept. 12 1930 334 Monday at an average rate of 0.42% and another St. Minneapolis 3 Oct. 23 1931 334 City 4 Jan. 28 1932 33-4 issue went at an average of 0.32% yesterday. Brokers' Kansas Dallas 234 Oct. 21 1931 334 San Francisco loans against stock and bond collateral declined $55,000,000 in the week to Wednesday night, TERLING exchange continues firm but trading according to the statement of the Federal Reserve is exceptionally dull. The most important news Bank of New York. relating to exchange this week is the decision, flashed y, that President Roosevelt has deEALING in detail with call loan rates on the late yesterda United States should go off the gold the Stock Exchange from day to day, 1% has cided that A resolution is now before statute. by been the ruling quotation all through the week for standard standard act. Next in gold the repeal to both new loans and renewals. The market for time Congress in the rediscount rate n reductio the is nce importa money has shown little improvement this week. of New York on Bank Reserve Federal the of There has been an occasional transaction in 90-day 3% rate had The 2 to 3% from y Thursda maturities at 1%. Rates are nominal at %% for the rate was when 7, April since effect in been 30 days, % to 1% for 60 to 120 day periods, 1% for of the pressure the in hed establis 332%, from cut three months and 1@),13/2% for five and six months. sterling of range The 2. March on panic banking There has been a fairly brisk demand for commercial % to 3.934 for bankers' been from 3.865 paper this week, and while the supply of paper has this week has % to d with a range of from 3.975 also increased, it is still insufficient to meet the sight bills, compare has transfers cable 4% for extra choice 3.8534 last week. The range for dealers' needs. Rates are 13 of a range with d % to 3.94 compare 3.863 names running from 4 to 6 months and 2@23% for been from% 3 unthe Under ago. week a from 3.97 to 3.853 % names less known. settled conditions at present prevalent in all money HERE has been only a fair demand for prime markets, especially with respect to foreign exchange, bankers' acceptances this week. Dealings the latest decrease in the New York Federal Reserve exchange operations have been extremely quiet and the supply of paper rate can have no effect on foreign under embargo here and is gold Since ns. or quotatio The ed. down to a minimum. Rates are unchang d, a higher are ions restricte transact e exchang foreign for ce Council quotations of the American Acceptan e on no have influenc can rate bank or lower Reserve are bills nths' three-mo bills up to and including even An ts. market movemen money ional internat bid %% months, four 4% bid and M% asked; for hardly affect discounting in New Yorand 4% asked; for five and six months, 13/8% bid lower rate could ents of banks and their customers requirem New as credit of the rate buying bill and 1% asked. The levels. The publication of the York Reserve Bank is 2% for bills running from 1 to are at extremely low Exchequer report on Wednesday show90 days; 23/8% for 91 to 120 days, and 23/2% for bills weekly British the Government's due:in 121to180 days. The Federal Reserve banks' ing a £200,000,000 increase in Volume 136 T B T S D T 3592 Financial Chronicle May 27 1933 floating debt had no effect on the foreign exchange on the down side, as sterling is in great favor everymarket, as this increase represented the additional where, and on the up side it would seem quite evident grant of funds to the Exchange Equalization Account that the British authorities have abandoned whatrecently announced by Chancellor Chamberlain in ever hope they may have entertained a few months his budget speech. It involved no new policy and ago of holding sterling at 3.50. The best the British merely represented the provision of necessary funds can hope to accomplish is to prevent a runaway to carry out the program decided upon months ago. advanc e in sterling. There is nothing new of importance in the foreign It would seem 'now that London is the one center exchange situation since the drop in the dollar. in which owners of money and credit instruments Markets everywhere continue demoralized and finan- have any confidence. London has large earmarked cial leaders in all countries are watching with appre- holdin gs of gold in New York and Paris and perhaps hension the course of the dollar. In London, Paris, in other center s, but it seems not to have withdrawn Amsterdam, New York, and elsewhere the foreign any of this store in the past few weeks and for several exchange market is passing through a period of weeks the authorities have kept out of the open extreme inactivity with business confined almost market for gold. Gold keeps steadily moving into exclusively to ordinary commercial transactions, and the Londo n open market from South Africa, Australia these it would seem are at the lowest volume in some and especia lly from India, but as during the past decades. Speculation is practically at a standstill, severa l weeks all the open market offerings are taken at least in foreign centers, owing to fears of the effect for Contin ental interests motivated by gold hoarders. of the reported American stabilization program. So On Saturd ay last 127,000 in gold went in the open far no such program has been officially undertaken, marke t at 122s. 7d. On Monday Continental buyers although foreign exchange operators both here and took 1180,000 at 122s. 83/2d., on Tuesday they abroad feel that American and British authorities took 1325,000 at 122s. 6d. On Wednesday the are already working in co-operation to control the Contin ent took 1210,000 and bars were quoted at action of the market. As a matter of fact, no 123s. 8d. On Thursday foreign hoarders took 124,000 measures to stabilize exchange have been taken in and bars were quoted at 122s. 5d. On Friday gold the past few weeks, nor is it likely that a considered bars were quoted 122s. 6d. and the Continent took program can be arranged until the close of the £140,000 available in the open market. Owing to the Economic Conference in London, which is scheduled extrem e confidence in London and the great abundto begin June 12. There can be no doubt that ance of foreign funds on deposit there for security European speculative traders are at present intimi- rather than investment, money continues extremely dated by the course of events. Nevertheless there plentif ul in Lombard Street at excessively low rates. is apparent a greater confidence in the dollar as Call money is in abundant supply at M% down to bankers everywhere realize that despite the gold Y 1%. Two-months' bills are %% to 7-16%, threemoratorium here and other unpropitious courses months' bills are 7-16% to %%,four-months' bills either taken or contemplated, the American position are %% to 9-16%, and six-months' bills are %% to is exceptionally strong, with all commercial and 3 %. The Bank of England statement for the week 4 other balances entirely favorable and with gold ended May 24 shows an increase in gold holdings of holdings greatly in excess of need, so that if bear £31,926, standing at the new high level of speculation should become aggressive, the financial £187,0 the total 08,683, which compares with £125,761,106 a authorities here could strike promptly and vigorously. year ago. At present the foreign exchange market is comThe Federal Reserve Bank of New York reported pelled to rely almost solely on straight commercial that there was no gold movement at New York for business for its activity. This accounts for the ex- the week ended May 24. Neither imports, exports, treme dullness here and in all leading centers, owing nor chang e in earmarked gold occurred. On Friday, to the scant supply of floating bills in consequence of $7,326,100 of gold was exported to England and the great shrinkage in both the physical and monetary there was decrea a se of $7,326,100 in gold held earvolume of foreign trade due to the world depression. marked for foreig n account. There were no reports The Statistical Bureau of the German Government of gold having been received at any of the Pacific estimates that the total world trade for 1932 ports. amounted to only $25,000,000,000. The United Canadian exchange continues at a severe discount. States Commerce Yearbook estimated the value of On Saturd ay last Montreal funds were at a discount international trade for 1931 at 839,396,900,000. of 13%, on Monda y at 13%, on Tuesday at 1234%, The peak of the post-war period was reached in 1928, on Wedne sday at 128 /%, on Thursday at 125 /%, when the total turnover was, according to Depart- and on Friday at 123/2%. ment of Commerce figures, $68,124,200,000. The Referring to day-to-day rates, sterling exchange on figures from both sources represent the actual amount Saturd ay last was dull but firmer as compared with of bills of exchange arising from the exchange of Friday . Bankers' sight was 3.865 /i @ 3.87%; cable goods between countries. It does not include invisi- transf ers 3.863 4 @ 3.873/2. On Monday the pound ble items such as shipping charges, interest, tourist was firmer . The range was 3.889/i @ 3.90 for bankexpenditures, etc. At present bills of exchange which ers' sight and 3.8834 @ 3.903/i for cable transfers. might in normal times arise from capital account On Tuesd ay sterling moved to higher ground. through international lending have dried up to an Bankers' sight was 3.904 @ 3.923 /s; cable transfers extraordinary extent in the past three years. Owing 3.923 4 @ 3.923/2. On Wednesday sterling was to the extreme dullness in sterling and in all the lead- firmer. The range was 3.913/2 @ 3.933/s for bankers' ing foreign exchanges, the smallest transactions may sight and 3.916 % ® 3.933 for cable transfers. On cause wide swings in rates. It would seem that Thursday sterlin g was steady. The range was 3.9134 during the past few weeks neither the Bank of Eng- @ 3.92% for bankers' sight and 3.913/2 @ 3.93 for land nor the Exchange Equalization Fund has been cable transfers. On Friday sterling was higher; active in the market. There has been no occasion the range was 3.89% @ 3.933á for bankers' sight Volume 136 Financial Chronicle and 3.901% @ 3.94 for cable transfers. Closing 1 for demand and quotations on Friday were 3.93% 3.94 for cable transfers. Commercial sight bills finished at 3.91k; 60-day bills at 3.92; 90-day bills %;documents for payment (60 days) at 3.903 at 3.915 Cotton and grain and 7-day grain bills at 3.90 for payment closed at 3.913j. 3593 %. for cablejtransfers, against 5.961% and 5.963 Austrian schillings closed at 16.25, against 16.00; exchangeronlCzechoslovakia at 3.47, against 3.45; on BucharestTat 0.72, against 0.71; on Poland at 13.15, against 13.10, and on Finland at 1.76, against 1.74. Greek exchange closed at 0.65 for bankers' sight bills and at 0.66 for cable transfers, against 0.64 and 0.653. XCHANGE on the Continental countries is practically at a standstill. Many of the general XCHANGE on the countries neutral during the remarks in the resume of sterling exchange are applicWar have been conspicuously to the front during able to the Continental currencies. All are extremely to active speculative attacks inactive and markets everywhere are largely sus- the'past few:weeks owing guilders and Swiss francs. Holland pended, awaiting the developments of the Economic • directed against seems to have ceased, guilder the against Conference which opens in London next month. The pressure pushing the Swiss still are manipulators European French francs are the firmest and the most outstand- but Bank of Norway The vigorously. less much but unit, ing Continental unit. It was evident in Paris last to 31%% Thursday on rate rediscount its reduced week that the Bank of France authorities have been ease general the with keeping in is This 4%. from instrumental in supporting other European gold cur4% The markets. leading the all in rates money in rencies which until just now have been subject to it when Sept. 1 1932 speculative drives. This applies especially to Holland rate had been in effect since quoted were futures guilders and Swiss francs. Paris is watching with was reduced from 43.4%. Guilder to 10 points under 5 from of discount a at week this anxiety the course of events on this side. French 15 to 30 points from bills opinion seems to be that the dollar will not develop spot, making ninety-day days before, some for and week, further weakness. In financial circles in Paris it is under spot. Last 150 points. was guilders ninety-day on asserted that but for the full power granted President the discount to a point risen has Paris on rate Roosevelt to devaluate the dollar arbitrarily, the rate The Amsterdam are no Paris to Holland from shipments gold would have a natural tendency to advance rather where Bank The basis. exchange an on profitable longer than to fall. Paris seems to think that there has been he Nederlandsc the assisted has doubtless France of a considerable export of American capital, proceeding reserves. gold its on strain the relieving in Bank by roundabout means despite restrictions on exchange the Swiss operations. It is pointed out there that the extreme The French may be relied upon to support also. franc restrictions imposed by the French authorities in Bankers' sight on Amsterdam finished on Friday previous years were unable to prevent the export of cable French capital to other centers. Rumors have been at 46.65, against 45.85 on Friday of last week; commercial and circulating in the market for several weeks concerning transfers at 46.70, against 45.86, the possibility of franc devaluation, but have! now sight bills at 46.55, against 45.75. Swiss francs for cable completely ceased, after denial by the French closed at 22.41 for checks and at 22.42 Copenhagen 22.05. and 22.04 transfers, against Finance Minister. Mark exchange is purely nominal. The most im- checks finished at 17.49 and cable transfers at 17.50, portant factor bearing on the future of mark exchange against 17.24 and 17.25. Checks on Sweden closed 19.89 is the conference of Germany's foreign creditors which at 20.11 and cable transfers at 20.12, against 19.87 at finished Norway on checks while 19.90; and opens in Berlin on May 29. Items relating to this 19.70. and 19.69 against 19.88, at transfers cable and event and to other features of "blocked" mark Spanish pesetas closed at 9.91 for bankers' sight accounts are given in detail in other columns. Italian lire, in sympathy with the other European bills and at 9.92 for cable transfers, against 9.7434 units, are firm. As Rome dispatches recently stated, and 9.75. "The lire continues successfully to maintain its posiXCHANGE on the South American countries tion against both depreciated and appreciated curcontinues to be only nominally quoted. The rencies." Italian trade figures continue to register constant diminution of the adverse balance as com- export trade of all these countries seems to be impared with a year ago. The Bank of Italy is steadily proving in a most satisfactory manner and there is increasing its stocks of monetary gold, while note evidence of a tendency to liberalize the exchange circulation is decreasing. The Bank's statement as of control measures. Buenos Aires is particularly gratiMay 10 shows gold reserves at a new high record of fied over the wide improvement in wool prices, with 6,528,000,000 lire, while foreign currency reserves are good demand. Bankers there state that the beginning of the end of almost every depression in Argenat a new low of 534,000,000 lire. The London check rate on Paris closed on Friday tina has been marked by a steady advance in wool at 85.72, against 86.03 on Friday of last week. In prices. The Brazilian Government, it is understood, New York sight bills on the French centre finished intends to institute more liberal foreign exchange on Friday at 4.58, against 4.58% on Friday of last policies beginning in July. Argentine paper pesos closed on Friday nominally week; cable transfers at 4.583'I, against 4.59, and 283 at commercial sight bills at 4.573j, against 4.58. Ant%for bankers'sight bills, against 25% on Friday last of for week; cable transfers at 29.50, against 25.80. bankers' sight bills werp belgas finished at 16.20 milreis are nominally quoted 7.95 for 15.94 transfers, against Brazilian and at 16.21 for cable and 15.95. Final quotations for Berlin marks were 27.19 bankers' sight bills and 8.00 for cable transfers, for bankers' sight bills and 27.20 for cable transfers, against 7.60 and 7.65. Chilean exchange is nominally is at 18.50, in comparison with 26.96 and 26.97. Italian lire quoted 61%, against 63/g. Peru nominal % for bankers' sight bills and at 6.03 against 18.50. closed at 6.023 E E E 3594 Financial Chronicle May 27 1933 XCHANGE on the Far Eastern countries, while The Meaning of the American Declaration dull, with only a nominal market in New York, at Geneva. is steady, with Japanese yen inclining to firmness. The speech which Ambassador Norman .H. Davis The Chinese units are of course largely governed by delivered on Monday before the General Commission the price of silver. Silver was quoted in New York of the Disarmament Conference at Geneva,explained % 3 at 33 cents a fine ounce on Saturday, Monday and Tuesday on Wednesday at 33% 5 cents, on Thursday and supplemented by a further statement on Wedat 331A cents and on Friday at 334. The Indian nesday, embodies an announcement of American rupee follows closely the fluctuations in sterling to policy in regard to war and peace that calls for the which unit it is attached at the rate of one shilling most serious consideration in this country . Passing and six pence per rupee. Japanese yen are firm in over for the moment the question whether Mr. Davis sympathy with the firmer quotations for all the leading foreign currencies which have followed Washing- was properly authorized to make the promises which he announced, it will suffice to note that he spoke ton's undermining of the dollar. as the accredited representative of the United States Closing quotations for yen checks yesterday were 24 3-16, against 233 in the Conference as well as President Roosevelt's 4 on Friday of last week. Hong Kong closed at 27% ® 27 5-16, against 27A @ 27M; special diplomatic emissary in Europe, and that his Shanghai at 243 % ® 243', against 243. ® 24%; statements were offered as embodying specific comManila at 50%, against 503 %; Singapore at 453 4, mitments upon ,whose execution, under the condiagainst 453 4; Bombay at 295 %, against 293 %, and tions which he laid down, the League of Nations and Calcutta at 29%, against 29%. its members might henceforth rely. Mr. Davis prefaced his assurances with two URSUANT to the requirements of Section 522 proposit ions, the first of which was certainly novel, of the Tariff Act of 1922, the Federal Reserve while second, although not in substance seriously the Bank is now certifying daily to the Secretary of the denied the disarmament debates, has been the subin Treasury the buying rate for cable transfers in the different countries of the world. We give below a jest of wide differences of opinion as to its meaning record for the week just passed: and application. The first proposition is that the disarma ment of the defeated Powers which was deFOREIGN EXCHANGE RATES CERTIFIED BY FEDERAL RESERVE BANKS TO TREASURY UNDER TARIFF ACT OF 1922. creed the close of the World War was "based on at MAY 20 1933 TO MAY 26 1933, INCLUSIVE. the principle that armaments are a matter of general Noon suiting Rate for Cable Transfers in New York, concern, and that the time had passed when each Country and Monetary Value in United States Money. Unit State should be the sole judge of its armaments." It I May 20. May 22. May 23. May 24. May 25. May 26. is difficult to see under what provisions of the peace EUROPE1 3 $ $ $ $ 3 Austria,schilling 143750" .142500* .136250 .146250 .142500* .141666* treaties this proposition can be sustained. The disBelgium, belga 159316 .160316 .160891 .160953 .161591 .161261 Bulgaria. ley 007833* .007833* .007733* .008000" .007675* .007725" armament of the Central Powers was imposed as a Czechoslovakia, krone .034312 .034516 .034543 .034628 .034562 .034497 Denmark, krone 172215 .172991 .174225 .174590 .174890 .174160 England, pound penalty for their part in the war, and as a guaranty sterling 3 870333 3.888750 3.909500 3.918000 3.918166 Finland, markka_ _ _ .017266 .017275 .017425 .017358 .017433 3.900500 against their recovery of military, naval or air power .017383 France,franc .045006 .045248 .045503 .045518 .045658 Germany, reichsmark .268636 .270525 .270941 .271145 .272175 .045528 sufficie to enable them ever to make war again. nt .271076 Greece, drachma .006462 .006445 .006483 .006529 .006550 .006535 Holland. guilder 459808 .462900 .465684 .465664 .466576 .465428 There nothing is in the language of the treaties to Hungary, pengo .198333* .200666* .200833* .200833' .300833* .200833• Italy, lira 059660 .060025 .060181 .060201 .080413 .060171 imply victorio that us Allies, in disarming the the Norway, krone .196384 .197469 .198646 .199136 .199320 .198055 Poland, zloty 128750 .130000 .131000 .131000 .131000 .131166 Central Powers, meant to make the armaments of Portugal, escudo 035290 .035095 .035662 .035950 .035827 .035629 Rumania,lets 006925 .007025 .007075 .007000 .007106 .008987 other Powers "a matter of general concern" or to Spain peseta 097592 .098257 .098820 .098957 .099164 .098837 Sweden,krona 198325 .199400 .201050 .201283 .201566 .200490 deny to any of those Powers the right to be "the sole Switzerland, franc__ .220664 .222330 .223100 .223485 .221084 .223507 Yugoslavia, dinar__ __ .015500 .015800 .015925 .016050 .015925 .016066 judge of its armaments." Mr. Davis himself contraASIAChinadicts proposition by declaring later that the dishis Chefoo dollar 242708 .241666 .241458 .241875 .243958 .241666 Hankow dollar _ -__ .242708 .241666 .241458 .241875 .243958 .241666 armament of Germany and its allies was"with a view Shanghai dollar_ _ __ .243281 .241875 .241718 .242031 .243906 .241562 Tientsin dollar 242708 .241666 .241458 .241875 .243958 .241666 Hong Kong dollar__ 270781 .269375 .268906 .269687 .271250 .269062 to rendering impossible any aggression on their India rupee 291325 .292375 .293900 .294750 .295325 .293700 Japan, yen part," that "the theory behind these treaties was that 237000 .237950 .239150 .239805 .240750 .240281 Singapore (8.81.) dollar .449375 .451250 .453750 .454375 .455625 .454375 NORTH AMER.military forces of the disarmed Powers should the Canada, dollar 868802 .87u052 .872083 .873958 .873020 .871406 Cuba, peso .999212 .999212 .999212 .999150 .999212 .999212 be fixed on the basis of the maintenance of internal Mexico, peso (silver). .282525 .285833 .285850 .284380 .283831 .282166 Newfoundland, dollar .866750 .867500 .869500 .871500 .870000 .869250 order and the necessary policing of frontiers, but no SOUTH AMER.Argentina, Peso (gold) .665788" .870476* .672846* .1372675* .673464 .673132* more," and that "the whole purpose of these proviBrazil, milreLs 076450' .076350* .076350' .076350* .076350 .076333" Chile, peso 066250 .066250* 066250* .068250" .066250 .066250* sions was guarantee that the armies of Germany to Uruguay, Peso .550000 550000" .550000* .552500* .550000 .550000* Colombia, peso 862100" .862100* .862100" .862100 .862100* .862100' and her former allies should thenceforth stay at OTHERAustralia, pound 3.080833 3.095833 3.111250 3.118333 3.123333 3.105000 home." New Zealand, pound_ 3.088750 .104166 3.119166 3.126250 3.131250 3.113333 South Africa, pound__ 3.825000 3.84562n 3.865937 3.870833 3.875625 3.855625 The second proposition is that "there is and has •Nominal rates, firm rates not available. been a corresponding duty on the part of other HE following table indicates the amount of gold Powers, parties to peace treaties, that by successive bullion in the principal European banks as of stages they, too, would bring their armaments down May 25 1933, together with comparisons as of the to a level strictly determined by the needs of selfdefense." The proposition, as thus stated, is rather corresponding dates in the previous four years: the result of prolonged discussion of disarmament Banks of1931. 1933. 1930. 1932. 1929. than a close reproduction of provisions of the peace £ £ £ £ Z treaties. The introductory paragraph of Part V of England_ _. 187,008,683 125,761.106 152,078,027 158,116,699 163.269,940 France a__ - 647.434,591 631,255,737 445,081,202 350,419,309 292,721,812 the Treaty of Versailles, relating to military, naval Germany b. 17.681,700 38,356,400 108,139,100 121,803,550 80,079,400 Spain 96,933,000 90,108,000 98.803.000 102.408,000 90,373,000 air matters, binds Germany to "observe" the and 57,479,000 Italy 56,279,000 60,885.000 69,478,000 55,434,000 Netherlands 37,498,000 35,993,000 69,842,000 76,976,000 36,420,000 provisions that follow "with a view to making posNat. Belg41,320,000 34,179,000 72,183,000 76.456,000 27,491,000 25,711,000 Switzerland. 23,153.000 74,297.000 73.388,000 19,844,000 Sweden_ _ _ _ 13,309,000 13,515,000 12,031,000 11,442,000 sible the preparation of a general limitation of the 13,031,000 Denmark_ _ 9,587,000 9,552.000 7,397,000 8.032,000 9,595,000 8,133,000 8,144,000 armaments of all nations," while Article VIII of the 8,380,000 6,561,000 Norway_ _. 8.156.000 Total week_ 1,259,469,974 1,195,857,243 995,213,329 905,051,817 808,449,152 Covenant declares that the members of the League Pray 1 284 278 416 1 187 407 289 994.291,619 904.918,967 808,567,439 "recognize that the maintenance of peace requires P a These are the gold holdings of the Bank of France as reported In the new form of statement. b Gold holdings of the Bank of Germany are exclusive of gold held the reduction of national armaments to the minimum abroad, the amount of which the present year is £935,700• E P T 1117Fak Volume 136 Financial Chronicle compatible with national security and the emecution of international obligations imposed by common action." That the phrase which we have italicized embodied an important reservation is clear from the provision of Paragraph 2 of Article XVI of the Covenant, which directs the Council, in case of the imposition of sanctions upon a member State which resorts to war, to "recommend to the various Governments interested the military, naval or air effectives which the members of the League shall contribute respectively to the armed forces designed to insure respect for the engagements of the League." On the basis of these two propositions Mr. Davis stated the position of the United States. The United States, he declared, is "prepared to go as far as the other States in the way of reduction" of armaments, the "level" to be sought "through successive stages" being that of "a domestic police force." "In particular, as emphasized by President Roosevelt, we are prepared to join other nations in abolishing weapons of an aggressive character which not only are the more costly to construct and maintain but at present are those most likely to lead to a breach of the peace." Further, in case a "substantive reduction of armaments" is effected by "general international agreement,""we are willing to consult the other States in case of a threat to peace with a view to averting conflict," and "in the event that the States, in conference, determine that a State has been guilty of a breach of its international obligations and take measures against the violator, then, if we concur in the judgment rendered as to the responsible and guilty party, we will refrain from any action tending to defeat such collective effort which these States may thus make to restore peace. Finally, we believe that a system of adequate supervision should be formulated to insure the effective and faithful carrying out of any measure of disarmament. We are prepared to assist in this formulation and to participate in this supervision." In a supplementary statement made on Wednesday, in response to a revised draft, submitted by Sir John Simon, of so much of the British disarmament plan as relates to consultation,air. Davis announced that the United States proposed to set forth its policy "in the matter of consultation and neutral rights by a unilateral declaration," and submitted "as an illustration," without binding himself to the exact form of words, a form of declaration which stated that "in the event that a decision is taken by the conference Powers in consultation in determining the aggressor with which, on the basis of its independent judgment, the Government of the United States agrees, the Government of the United States will undertake to refrain from any action and to withhold its protection from its citizens who engage in activity which would tend to defeat the collective efforts which the States in consultation might have decided upon against the aggressor." The acclaim which greeted Mr. Davis's assurances at first as a virtually complete surrender of the United States to the European, and particularly the French, demand for security and for co-operation with the League was quickly followed by doubts regarding the precise nature of the American promises and Mr. Davis's authority for making them. It is certainly unfortunate that an important statement of policy, obviously intended to help the Disarmament Conference to success and thereby contribute to the triumph of the coming World Economic Confer- 3595 ence, should be open to doubt or its authority subject to question. As far as the readiness of the United States to co-operate in some general scheme of disarmament goes, Mr. Davis merely reaffirmed what has been all along the declared American purpose. Down to the present time, however, there has been no semblance of agreement among the Powers as to what are the limits of "national defense" to which, according to Mr. Davis,the United States agrees that armaments should be reduced, nor any intimation that the United States would allow its own needs of defense to be judged and determined by other Powers. The crucial phrase, apparently, in Mr. Davis's promise of American consultation and co-operation is "if we concur." Precisely what does this mean? If it means only that the United States reserves a right of final decision regarding its own course as a safeguard against a possible irritated or"snap"judgment as to whether or not a particular nation is an aggressor, the reservation is merely such as any Government would be likely to make; but if it means that the United States, having encouraged the Powers to consult, is to dissent even though the consultation has resulted in a unanimous agreement,the prospect of co-operation is too insubstantial to be seriously counted upon. And when Mr. Davis spoke, was he speaking for Mr. Roosevelt, or has Mr. Roosevelt changed his mind? An official White House statement on May 17, referring to consultation, declared that while the United States was prepared to consult,"that does not mean that the United States will, in company with other nations, meet to determine" the policy to be pursued. "The policy will be determined right here in Washington by officials in the light of events and circumstances prevailing at that time." There is no hint of this important reservation in Mr. Davis's remarks. Other questions have been raised in Europe as well as in this country that involve not only the meaning of Mr. Davis's assurances, but also his authority for making them. What is meant by an agreement on the part of the United States to "refrain from any action . . . which would tend to defeat the collective efforts which the States in consultation might have decided upon against an aggressor?" Does it mean that the United States is to surrender its rights as a neutral or allow the freedom of the seas to be invaded? An abandonment of neutrality, at least, seems clearly envisaged in Mr. Davis's supplementary pronouncement on Wednesday, and the importance of such abandonment was frankly recognized by Sir John Simon in his speech in the House of Commons yesterday on security, with the significant comment that Great Gritain had now "no ground for complaint whatever." And why should the United States make such a guaranty unilaterally, with no corresponding agreement by other ilaterally, with no corresponding agreement by other Powers and not as part of a general agreement or treaty? Whence comes the authority of Mr. Davis, or of Mr. Roosevelt for whom he appears to have spoken, to pledge, in advance of any Congressional action on the subject,the suspension of the neutrality which, as has been well said,"has been a cornerstone of American foreign policy for a hundred and fifty years," or to agree in advance to any action regarding a State which the European Powers may adjudge to be an aggressor, or to put out of the protection of the United States (which means in practice to outlaw) any citizen who shall oppose either the Euro- 3596 Financial Chronicle pean action or the Presidential fiat? And by what authority is assurance given that America will accept international supervision of its armed forces by land, sea and air? We are not surprised that Geneva correspondents report that Mr.Davis's statements,instead of setting the Disarmament Conference forward on its way, have operated to raise new questions and objections, and that until it is known more specifically what the United States intends to do,the problems before the Conference will continue to await solution. Mr. Davis's statements need more than clarifying, however. If they mean what they seem to mean—what apparently they must mean if they are not idle words—the larger part of what he said should be repudiated at Washington. The Administration should not allow itself to be put in the position of seeming to propose the setting aside of American neutral rights at the instance of any group of foreign States or of the League, or to permit any body except Congress to decide what kind or amount of armament the United States shall have, or to tolerate international supervision of American affairs or the determination of American policy in any respect whatever. There is still an American public opinion, and it is not that opinion, we feel sure, that Mr. Davis has voiced. Postal Savings and the General Welfare. In spite of the innumerable complaints that are being made by banking establishments, especially those located in rural communities, with respect to the operations of the Postal Savings System, there is no question but that it is a great institution if limited to its intent by the legislation establishing it. The framers of the Act plainly intended that the system should have an appeal to the laborer, the mechanic, the clerk, and the man of average earnings, who probably would not patronize banking establishments. In other words, it was designed to promote the general welfare. As an indication of its popularity in this respect the Postal Savings System during the fiscal year 1932 had a growth breaking all precedents. The inrease of $63,032,370 in deposits during February 1933, to a total of $1,005,572,570, however, was considerably below the private expectations of officials. In spite of the country-wide run on banks which preceded the holiday, the February increase was only the second largest monthly increase in history. In October 1931 the increase was $66,215,000. The number of depositors now stands at approximately 1,545,190. Therefore, in a period of unparalleled financial disturbances the Postal Savings System has demonstrated its usefulness and capacity for expansion in a most satisfactory manner. The fact that it has kept hundreds of millions of dollars in general circulation made it an important factor and stabilizing influence in the field of credit. Statistics indicate that the number of depositaries in operation was 7,549, with a net increase of 90 during the year 1932. A postal savings account can be transferred from one depositary to another free of cost to the depositor and without loss of interest. During the year just passed 23,239 accounts, aggregating $13,688,078, were thus transferred, representing an increase of $7,562,620 over 1931. Of the balance to the credit of depositors, $681,726,890 was on deposit in 5,102 banking institutions may 27 1933 as against 4,175 a year ago, and through them funds which might otherwise have sought hoarding places were put to work along productive lines. The system has often been criticized for avoiding so scrupulously any semblance of competition with banking institutions—in other words, for keeping so closely to the fundamental policy of supplementing the activities of banking institutions, which view it as an encroaching governmental agency. Criticisms so divergent would seem to indicate that neither view is the correct one, and that the oft-repeated assertions of the successive administrative officers of the system that it functions in a mutually productive field and promotes the general welfare—that of the individual,the community, and the nation—is the correct one. The adverse attitude of certain banks seems to revolve about the idea that, were it not for the Postal Savings System, bank deposits would be materially increased in their communities. The opposite view is that the withdrawal of the postal savings service from such communities would produce results futile and unavailing; that the Postal Savings System has demonstrated its usefulness, particularly in times of financial stress; and the funds which are received— if there were no such agency—would go into hiding, stagnate. It must be admitted that the Postal Savings System promotes liquidity,for, by the process of redepositing funds in authorized banks when they qualify by the deposit and satisfactory security, circulation is certain. It is with this thought in mind—that of bringing hidden money to the light of day and putting it to work through banking institutions as agents of the system—that the Post Office Department has repeatedly recommended the maximum balance which may be accepted from any one depositor be increased from $2.500 to $5,000. Spreading the Benefits of Renovizing. Plans for renovizing properties in Philadelphia have operated with such good results that residents of the Quaker City want citizens all over the country to understand the advantages and to spread the gospel of repairs in the interest of prosperity. Through the mails, Philadelphia bankers are endeavoring to interest their correspondents in all States in the movement, and in addition the railroads are being persuaded to promulgate similar work in their respective territories so that every important city will be influenced. Samuel M. Vauclain, Chairman of the Baldwin Locomotive Works, who took a leading part in obtaining pledges for $21,000,000 of repairs and improvements in the Philadelphia area, last week called together the local agents of all railroads represented in that city, explained the advantages of the undertaking and urged them to make an organized effort to extend the work along their respective lines, particularly in the West. During the depression when owners, especially of dwellings,found that they could not make payments to retain their properties, the upkeep was neglected and buildings have consequently been sadly in need of repairs. Thousands of structures were sold by the sheriff and many of them were bought by creditors. Committees looked up the new owners and made a thorough canvass in order that they might show the new proprietors by convincing arguments how it would be to their advantage to put their buildings in good repair so that they could either be sold Volume 136 Financial Chronicle or rented, thus providing an income above ordinary carrying charges. Once well started the movement rapidly gained headway as reluctant owners soon found that it was imperative for them to keep up with their competitors. When a pledge was obtained it did not follow that the improvements would be made at once and consequently the new work has been extended over a period of months, but the effects are very apparent in the better appearance of both the inside and the outside of buildings. Dilapidation has given place to an atmosphere of thrift which is inspiring. The object to be obtained is three-fold, first to give needed employment to mechanics and laborers who have been long unemployed, second to create a demand for building materials of all kinds, metals, glass, lumber, cement and roofing and particularly paint and paper for the interior decoration of dwellings. Demand for new roofs has been especially brisk, a good roof being essential to the preservation of any improvements which might be made on the interior. All these in turn were designed to stimulate manufacturing, transportation and distribution. Appeals are made to property owners and agents not only upon philanthropical grounds but upon the well-known fact that prices of materials and labor are unusually low, bringing costs of improvements and repairs to a minimum if due care is taken on the part of the employer. Some contractors supplemented these advantages by offers of liberal terms of payments as to time and amounts of instalments. Now that workers are being more regularly employed families are looking about for better quarters. Where two or more families have been sharing a single dwelling by reason of enforced economy, isolation is sought as soon as increased earnings permit. Renovized dwellings appeal to both renters and those who seek to purchase. Mortgagees who have sought to protect their investments are easy to deal with. They want security for their principal and a reasonable return and are ready to listen to terms offered by prospective buyers. The innovation is also working out to the advantage of municipalities and States as new owners of responsibility are assuming the obligation of paying taxes of which cities and towns are very generally much in need. Renovizing, when systematically and persistently pushed, appears to be aiding both landlord and tenant and building and loan associations as well as assisting cities and States which have fallen behind in making customary appropriations for public works and maintenance of institutions. If the railroads will consent to be missionaries, as asked, they will not only help others but will be casting bread upon the waters which will return in greater traffic. New Responsibilities for the Courts—Legislative and Judicial Co-operation with the Executive Essential. The people have elected themselves to a changed attitude. They are looking forward instead of backward, which is an encouraging indication. A houseto-house census, however, seems to be needed to segregate the sheep, still growing some wool, from the wolves. Conditions which are pretty much the same in all communities, small as well as large, call for a showdown in order to protect the honest citizens who have not abandoned their customary meth- 3597 ods of gaining a livelihood by pursuing an upright course. The criminal court dockets are filled with cases in which the defendants are men who have been above suspicion and who new rely upon astute lawyers to bring about their acquittal upon some technicality. One brilliant criminal lawyer had the audacity to declare recently in court that his client should not be held for trial for the loss of other people's money intrusted to him for the reason that he had lost his own money in a speculative venture which swept away the savings of others. A man may perhaps hazard his own wealth in gambling if he chooses, but he has no right to jeopardize trust funds in his custody in such a manner. If the venture of the accused had been successful he alone would have profited. The confiding friends whose funds were misapplied would have had no share in the winnings. When a man accepts custody of the money of other persons for safe-keeping he assumes a responsibility which he cannot evade, and if the trust funds are misused the blame must rest upon the one who has betrayed the trust. Justice is not dependent upon an advocate at the bar, but in a great degree upon the wisdom and unbiased judgment of the Honorable Court. There are numerous instances recorded every week in many parts of the country where an aroused populace is disposed to take the administration of justice out of the hands of the courts, a condition which if persisted in would lead only to anarchy, which has no foothold in a Republic. An unusual degree of impartiality now rests upon those worthy citizens who have been legally called to the sacred position of administering justice. The situation requires exercise of the highest type of sound judgment. Justice is not merely based upon construction of a statute but upon a rule of reason which antedates even the period of the great commentator Blackstone. There is no reason to believe that the courts will fail us now when they are subjected in some respects to the greatest tests in the history of the Republic, because the aching hearts of wronged Americans are crying out for relief, alleviation and redress which will constitute the foundation for rebuilding hope and ambition of an afflicted and sorrowing people. Turmoil. [Prom the "Saturday Evening Post." May 27.) So many unusual and far-reaching measures have been proposed to Congress since March fourth by the new Administration, and in some cases enacted into law, that the average man has been in a state of extreme mental confusion. The swift and effective action of President Roosevelt in dealing with the bank collapse and his courageous attack upon the overgrown expenses of numerous Federal activities aroused the greatest popular enthusiasm and gave him enormous prestige. But the subsequent series of varied monetary, financial and economic measures produced a sense of insecurity and uncertainty. This is not to condemn out of hand all these extraordinary pieces of legislation which have followed one another with such bewildering rapidity, either because of specific demerits or on the ground that the President is being given too dictatorial powers. But regulatory and reformatory devices have been pressed forward faster than they could be given even cursory examination. The impression is that of an attempt to rebuild society at one fell swoop in a manner engagingly cheerful and bold, but at the same time rather casual and happy-go-lucky. No one denies that we have entered upon a period of expanded Government activities; in part, of necessity. But 3598 Financial Chronicle May 27 1933 these new departures should have a clearly- defined relation- as to the responsible and guilty party?" Questions like these ship to the known and familiar. Leadership is one thing, are inescapable in so far as we press toward what Mr. Davis especially if the leader is sure where he is going and what he called an immediate "decisive step in general disarmament." is doing, but action for action's sake is not leadership. Gov- For as matters stand to-day the problem of French disarmaernmentflows from the people, and its actions should be clear ment is the problem of British and American support of the and comprehensible to them. It is not enough that Govern- existing treaties. ment should do a great many things; the things which it does The fundamental difficulty of the whole problem arises should appeal through their ordered reasonableness. Future development in this country may be very differ- from the fact that the peace of Europe is not based upon ent from that of the past. All of us may be obliged to accus- consent, but has to be guaranteed. This is the tragic herittom ourselves to wholly new conditions. Many of the prac- age of the war. The nature of the problem can be undertices and customs of industry, commerce and finance have stood by comparing the peace that now prevails on the been discredited. New and, it is to be hoped, more whole- frontiers of Central Europe with the peace that prevails some forms of activity are in the making. But unless along the Canadian border. Our peace with Canada is industry, commerce, business and private employment are a true peace, based on consent. Neither nation, even in its to be abolished altogether, to be replaced by Government most secret ambitions, desires to alter that frontier. There activities entirely, it is essential that contracts and forward is no National policy on either side of it which any one assocommitments on a large scale be made by great numbers of ciates with the use of force. As a result, nobody takes the trouble to fortify the frontier. Neither Government is individuals. It is difficult to see how men are going to plan, contract interested in the other's armaments, its tanks, heavy guns, and employ,looking to future returns, if they are to be,from aircraft or poison gas. We do not have to sign pacts of day to day, puzzled and confused by volley after volley of non-aggression. We do not have to watch each other suddenly launched proposals and measures affecting employ- anxiously. We do not have to reassure each other. We are ment, management and the value of money. If business so genuinely at peace that we do not have to talk about peace. But on certain of the new frontiers of Europe there is no men are to recover their courage, they must not be kept in constant turmoil. The measures taken, even for emer- such peace. What peace there is is guaranteed by the armies gency purposes, should be related to what the community and by the indirect force which is contained in the diplomatic understands, and proceed with reference to those elements alignment, the various pacts and the machinery of organized of faith and trust without which everyday transactions can- action against war. In so far as there is no peace by consent — not take place.s.Therer.ikno real healing in any other course in Europe, the problem of peace is not really a question of reducing armaments, but of distributing them somewhat Difficulties in the Way of Disarmament—The differently. It is a naive illusion to suppose that the slightest progress has been made or is being made toward reducing British Position. by agreement that preponderance of force which guarantees [Walter Llppmann In the New York "Herald Tribune." May 25.1 Reports from London, Paris and Geneva tend, I believe, the treaties. The question is, and has been for nearly to confirm the idea that the chief practical consequence of the fifteen years, whether this preponderant force would be the American proposal made by Mr. Norman H. Davis is to pose large armies of France and her Allies or those same armies Elie question as to how eefinitely Great Britain will commit reduced, but immediately reinforced by the British Navy. herself as the guardian of the Versailles treaties. Mr. Davis My own skepticism as to how much real progress toward undertook to say that the United States might refrain from "any action tending to defeat such collective effort which disarmament can now be made arises from a conviction that these States may . . . take to restore peace"; in other little can be done by manipulating weapons until the underwords, that it might not insist on its neutral right to trade lying political situation is altered. This, if the newspaper reports are to be trusted, is the point of Mussolini's efforts to with a nation which was being punished by the League. Ever since 1921, however, it has been recognized that, in produce a new four-power pact. These. efforts seemed dealing with great Powers, there was no certainty whatever doomed at the moment to fail. But the essential principle that there would be any "collective effort." Article XVI, of his effort, that a political settlement is necessary to which provides for the blockade, has never been repealed, genuine disarmament, goes to the heart of the whole problem. Now, a political settlement is not likely to be reached in but when it] was put to the test last winter by Japan, it was not enforced. The theory has been held that Article the present condition of Europe. Germany has gone through XVI could not be enforced if the United States insisted on its a revolution which is just beginning to pass out of the first neutral rights. But there are good reasons for thinking that, phase of violence and wild agitation. Time is needed to even with this impediment removed, neither the people of enable the Germans to return, as they surely will, to the the United Kingdom nor the people of the British Dominions sobering responsibilities of their Government and their national existence. All the nations, including Germany to have any great liking for the task of policing the world. a high degree, are afflicted with the miseries of the world Whether they have or not is bound to be disclosed if the Davis proposal is seriously examined in practical negotiations. depression and the awful anxieties which it produces. It is The American proposal in effect amounts to saying that under idle to suppose that the deepest political differences in the certain conditions the United States will not interfere with Western World can be reconciled in this atmosphere. It is a mistake, therefore, to argue that decisive steps the League. This sharpens the issue, which has hitherto been rather successfully avoided, as to how far the members toward disarmament are essential to economic recovery. It of the League really mean to go in applying the Covenant. is much nearer the truth to say that economic recovery is essential to peace and disarmament, for the only conceivable The real effect, I should suppose, of this American action circumstances under which men would have enough good will would be to cause France to turn to Britain and to ask Mr. to keep the peace would be when they are again at work and MacDonald how far he is able and willing to go in pledging have some hope for the future. It is, therefore, particularly important that we should not the British Navy to preserve the existing treaties. Whatever the diplomatic formulae employed in the public debates, aggravate the political crisis by forcing issues and pressing the reality of the matter is almost certainly bound to be just for results before there is real certainty that the issues can that. The French and their Allies are asked to surrender be met and the results achieved. predominant military power on the Continent. This power, in their eyes, is the guarantor of the treaties; whoever asks Help Farmer to Aid Self is Aim of George N. Peek, Administrator of Farm Relief Bill. them to give up this power must supply its equivalent. Only Britain can do that. Therefore, if the MacDonald [From the Brooklyn "Daily Eagle" Sunday May 211 plan is to be put into effect, the obligations under Article In casting about for some one to administer his new Farm XVI of the Covenant must be made real. To do that a Relief Act, President Roosevelt expressed the view that he commitment of the British Navy would be required. wanted some one to fuse into a partnership agriculture, But before the British make such commitments they are industry and the Government. For this purpose he has very likely to ask us some extremely searching questions. chosen George N. Peek, now being freely referred to as the For example: has the President under the American con- "Agricultural Czar." No newcomer to agrarian politics, this stitutional system the authority to make the offer described former executive of big farm implement companies is known by Mr. Davis? Will Congress ratify a treaty to that effect? as a two-fisted fighter who has very positive views. Who in the American system of government would have He has been given a free hand by the President to run the authority to say that "we concur in the judgment rendered new experiment in price and crop control. His only limita- Volume 136 Financial Chronicle tions are those contained in the Agricultural Adjustment Act. These are so vague as to be almost indiscernible. Though many of his boyhood years were spent on a farm in Illinois, Mr. Peek has never been a dirt farmer. His interest in agriculture in late years has come from his connection with agricultural machinery mills. For many years he was Vice President and Manager of the Moline Plow Co. From 1917 to 1919 he was a member of the War Industries Board and in 1919 served as Chairman of the Industrial Board of the Department of Commerce. During the latter days of the Coolidge administration he was very critical on the farm relief policies of the Republicans. This view was unchanged by the substitution of Mr. Hoover for Mr. Coolidge in the White House. In 1928 he served as Chairman of the independent organizations working for the election of Alfred E. Smith and as Chairman of the executive committee of 22 of the North Central States agricultural conference; in 1924-28 he became known as one of the most forceful champions of the cause of the farmer and was one of the leaders in the historic fight for the equalization fee. His opposition to a number of schemes for acreage and production control has already brought him into conflict with several members of the ltooseveliTaTiserablFthe Assistant Secretary of Agriculture, Rexford G:Tugwell. -Apyearing before a Congressional committeelnot longkio, he declared: "The futility of undertaking to control supply by renting acreage or by limiting planting_throughout the =States instead of controlling the excess supply when and-where—itirknown to exist in a particular year is apparent." There are not a few in Washington who believe that the selection of Peek as administrator of the Farm-WAct marks a distinct setback fOr-thr`brain7r7gi" and a victory for the practical, as opposed to the theoretical farm experts. There may be some attempt at acreage control under him, but it is much more likely to take the form of voluntary agreements than a resort to thelioiver of goirernmelit... _.1011 The wide and alin=iiless powers placed-in his hands by Congress are to be used in an attempt to restore a balance between the prices of agricultural and othei•—c-ornmodities. The goal _ fixed-hi:Congress is the relations which existed, generally speaking, in the five-year period from August 1909 to July 1924. Agricultural,'prices have fallen much lower during the depression than industrial prices. Farm products, on the whole, are now selling for about 40% of their 1929 prices, while other commodities arefielling for about 60%. Mr. Peek's job is to bring agricultural prices up to 60% without boosting the other prices and then to keep them rising as the other prices rise. Explaining the purposes of the Act after he was installed, Mr. Peek said: "To agriculture it should be said that the purpose is not to do something for the farmer. It is to enable the farmers to do something for themselves. "Unless farmers will work with each other and with the Government, Government cannot maintain fair prices and restore prosperity to them. Nobody can." Mr. Peek's principal business during most of his life has been the selling of plows, harrows, reapers and binders to farmers. Consequently, he has been in an admirable position to press legislative measures aimed to increase agricultural buying power. He has long been one of the towering figures in legislative battles over farm relief. Associated Gas & Electric Debenture Conversion Plan—An Antagonistic View. Philadelphia, May 24 1933. Editor, Commercial & Financial Chronicle, New York City, Dear Sir:— On page 3398 of the May 20th issue of the "Commercial & Financial Chronicle", there Is printed an article on the plan proposed by Associated Gas& Electric Co.in respect to its debt. In concluding this article you say: "It would appear to be the part of widsom for these Debenture holders to give ready assent to the exchange under one of the options." May we suggest that you will find that your opinion in this matter is not generally concurred in by investment bankers. We have in the past dealt quite extensively in securities of the Associated Gas & Electric Co. We believe that the company owns very valuable properties and that the operating management is able. We do not share the widespread antagonism that exists toward Mr. Hopson, but at the same time we are not in sympathy with all of the company's financial operations. Before referring to your article, may we point out one fact: Over a period of years a very large amount of the Debenture bonds of Associated Gas & Electric Co. were sold. In connection with these Debentures it was generally stated substantially as follows: "A direct obligation of the company but not secured by a mortgage or pledge. The company covenants not to pledge any of its property 3599 without ratably securing this issue except in the case of purchase money mortgages and liens, and except in the case of pledge in the usual course of business as security for temporary loans maturing not more than one year from the date of issue or indemnity not exceeding one year." An examination of data in connection with the Associated Gas & Electric Co. would, we believe, have indicated that the operating properties were owned directly or through a sub-holding company. Last April I 1932 the management made an offering of Associated Gas & Electric Corp. 8% eight-year gold bonds. It then appeared that Associated Gas & Electric Co. controlled its operating properties or its sub-holding companies through the medium of a subsidiary holding company and the issuance on the part of the latter of its bonds pretty much nullified the restriction in connection with Associated Gas & Electric Co. bonds referred to above. The company was probably within its legal rights, but it always seemed to us that this move very closely approached a breach of faith. It further appeared that the corporation was incorporated under another name in 1922 and had existed throughout the period to date. We do not think, however, that you can find any reference to this fact in any Associated Gas & Electric literature. In 1932, the company was faced with a large amount of financing and under the stress of conditions then existing, necessity may have dictated and justified the action. We disagree with the recent proposal of the Associated Gas & Electric Co.for the reason that it is not in our opinion equitable. The Debentures are a straight obligation of the company surrounded with certain safeguards. They are entitled to priorities over all equity securities. The proposition which the Associated company now submits to these Debentureholders is— First, Debentures of the company may be exchanged for Debentures of the corporation, the interest rate to be the same as the securities presented for exchange, but the principal to be cut in half. Second, Debentures of the company to be exchanged for an equal amount of Income Debentures of the corporation, the latter however carrying a reduced interest rate,to wit:3K% against 4% on the company bonds; 33,i% against 43% on the company bonds; 4% against 5% on the company bonds;43% against 5% on the company bonds. This preserves the principal of the investment, but reduces the interest rate. It furthermore gives an income debenture which because of the income feature will always be looked upon with certain disfavor. The company's justification for A and B proposition would probably be that the security is stepped up somewhat. Third, Associated Gas & Electric Co. Debentures carrying a fixed rate are exchangeable for an equal principal amount of Sinking Fund Income Debentures, interest rates on the latter to be the same as that on the bonds surrendered. Under certain conditions a smllm fund aais tteod f additional interest will be paid. Likewise a small sinking created for the benefit of the Income Debentures. This proposition means that Debenture holders who exchange into the Income bonds step, in as far as interest is concerned, into a position junior to the bonds now held. The Income Debentures will undoubtedly be poorly regarded and probably will not behave satisfactorily from a market standpoint. We would have no quarrel with the above propositions if an other securities now junior to these Debentures were also called upon to make some sacrifice but that is not the case. All equity securities remain as they are including of course that portion of the equity owned by those active in the management and all sacrifices made by the present Debentures will in the long run accrue directly to the benefit of the equity. This seems to us to be far from equitable. There are certain other factors attached to this exchange proposition which we also believe should be looked into for instance the escrow provision which will apply to the securities deposited under the plan. If the company's offer as submitted had gone further and involved a readjustment of the equity and the delivery to the present Debenture holders of some portion of the equity as compensation for their sacrifice then the company's proposition might be looked upon in an entirely different light. We suggest that your article be considered in connection with the memorandum attached hereto which we have just received. Very truly yours, PARSLY BROS. & CO., INC. E. G. Parsly, President. Participants in Bail Bond Business Affected by Law Recently Passed by New York State Legislature and Approved by Governor Lehman—Special Licenses Required. George S. Van Schaick, Superintendent of Insurance of New York, has forwarded a notice to all insurance companies authorized to write bail bond insurance in New York State, calling their attention to new licensing requirements prescribed under a law passed by the 1933 Legislature and approved by Governor Lehman. The New York State Insurance Department, in noting the foregoing under date of May 17, continued: This measure, which amends Section 554-b of the Code of Criminal Procedure. affects all employees, officers and agents who participate in bail bond business or solicit bail bond insurance for insurance corporations or other insurers engaged in that business in a city of more than 175.000 population. Such persons are required to obtain special licenses from the Superintendent of Insurance, to be issued pursuant to the Provisions of Section 554-b of the Code of Criminal Procedure as amended. and file with him a bond, approved by the Attorney-General as to form and the Superintendent of Insurance as to sufficiency, in the penalty of $5,000 for the faithful performance of their duties. Attorney-General John J. Bennett, Jr., has approved a form of bend to be executed by corporate sureties. Copies of this approved form have been sent to companies writing bail bond insurance and also to their employees, officers and agents who are now licensed by the Insurance Department to act for them in transacting or soliciting bail bond business. Employees and officers of bail bond companies who are acting for them In transacting this business and agents soliciting such business for them in cities of more than 175,000 population, have been required since Sept. 1 1922 to file a special form of application and to procure licenses from the Superintendent of Insurance. These licenses have been issued under the provisions of the Insurance Law. The new feature is the requirement that they file a bond and obtain an additional license under Section 554-b of the Code of Criminal Procedure. 3600 Financial Chronicle May 27 1933 Annual Report of Federal Reserve Board—Renews Recommendations for Change in Reserve Act to Permit 30-Day Loans by Reserve Banks to Member Banks on Promissory Notes—Regarded as Designed to Expand Service for Country Banks-1,456 Banks Suspended During 1932 with Deposits of $716,000,000— Gold Movement During Year—Credit Agreements with Foreign Central Banks—Gross Earnings of Federal Reserve Banks at $50,019,000, Largest Since 1929—Excess Reserves and Free Gold. In its annual report, made public May 20, the Federal Reserve Board renews its recommendation for an amendment to the Federal Reserve Act "so as to increase from 15 to 90 days the maximum maturity of advances which may be made by Federal Reserve banks to member banks on their promissory notes secured by paper which is eligible for rediscount or purchase by Federal Reserve banks." In renewing this recommendation (made in several of its previous annual reports) the Board says: Under the present law Federal Reserve banks may rediscount for member banks commercial or industrial paper with maturities up to 90 days and agricultural paper with maturities up to nine months, and may make direct advances to member banks on their promissory notes secured by commercial, Industrial or agricultural paper for periods not exceeding 15 days. An amendment to the law Increasing the maximum maturity of advances to member banks on their promissory notes secured by such paper would not, therefore, involve a broadening in the character or class of paper or securities which may be legally acquired by Federal Reserve banks and would not constitute In any respect a departure from the fundamental purposes of the Federal Reserve Act. There is no difference in principle between the rediscount by a Federal Reserve bank of paper arising out of an agricultural, commercial or industrial transaction and an advance to a member bank on its promissory note secured by paper arising out of such a transaction. A member bank which has paper of this kind in its portfolio may use it to obtain credit from its Federal Reserve bank by either method. The underlying transaction which is the basis for the credit is the same in either case, and the only difference is one of form. From a practical standpoint, however, the use of promissory notes secured by collateral as a method of obtaining credit has many advantages over the rediscounting, which is troublesome and inconvenient. To obtain any substantial amount of credit through rediscounting, a member bank must offer to the Federal Reserve bank a number of separate notes and bills of varying amounts and of different maturities, which do not necessarily correspond to the period for which the accommodation is needed; and the amount of the discount must be calculated separately for each of these notes or bills. When a member bank borrows on its own promissory note secured by collateral, however, it is only necessary to compute the interest on one note for the full amount of the loan. It was the practice of banks, prior to the enactment of the Federal Reserve Act, to borrow from their correspondent banks on their own promissory notes secured by collateral. This form of borrowing from Federal Reserve banks was not permitted to member banks by the original Federal Reserve Act; and many of the banks which were members of the System preferred to continue their practice of borrowing from their correspondent banks on their own promissory notes rather than to change their method of borrowing in order to avail themselves of the rediscount facilities of the Federal Reserve System. By an amendment to the Federal Reserve Act, adopted Sept. 7 1916, Congress authorized Federal Reserve banks to make direct loans to their member banks on their promissory notes secured by collateral of certain specified classes. This amendment proved of material benefit to member banks which are located in the same cities with Federal Reserve banks or their branches or in nearby cities, and such banks have made extensive use of the privilege of direct borrowing on their promissory notes; but country banks generally have not availed themselves of this privilege to any great extent because of the inconvenience of renewing their notes every 15 days. The character of business conducted by the larger member banks in financial centres is such that frequently their borrowings are for only a few days at a time; whereas the character of business of country banks, particularly those in the agricultural sections, is such that they frequently need continuous accommodations for periods extending up to 90 days or more. It is obvious that a bank which needs credit for a period of 90 days will find it decidedly unsatisfactory to borrow on its 15-day note, which would have to be renewed five times during the 90-day period. Because of the inconvenience of rediscounting their customers' paper or borrowing on their own 15-day notes, many country member banks continue to borrow from their city correspondents on their promissory notes for longer periods instead of borrowing from the Federal Reserve banks; and it is believed that the amendment recommended would make the Federal Reserve System more useful and attractive to country banks. It was stated by the Washington correspondent of the Philadelphia "Public Ledger" on May 19 that the proposed amendment was generally interpreted as a step to expand the service of the Reserve System for country banks and banks outside Federal Reserve cities. The "Ledger's" correspondent further said: May Hold Country Banks. Although Board members declined to discuss for publication the indication that adoption of the proposal increasing the maturity date for bank advances would serve to hold some country bank members in the System, in other quarters around the Treasury the assertion was made that extension of such a privilege would reduce defections from the System. Inasmuch as the System is having its difficulties now because smaller banks in many communities are saying they can get along without their Reserve membership, the general thought at the Treasury is that additional service should be provided if possible. Among other recommendations of the Board we quote the following from the report: Jurisdiction of Suits by and Against Federal Reserve Banks. The Federal Reserve Board recommends the enactment of an amendment which would restore to the United States District Courts jurisdiction of suits by and against Federal Reserve banks. The Federal Courts formerly had jurisdiction of such suits by reason of the fact that Federal Reserve banks are incorporated under an Act of Congress; but Section 12 of the Act of Feb. 13 1925 provides that no District Court of the United States shall have jurisdiction of any action or suit by or against any corporation upon the ground that it was incorporated by or under an Act of Congress, except corporations in which the Government of the United States is the owner of more than one-half of the capital stock. It is not believed that Congress had the Federal Reserve banks in mind when this amendment was enacted, but its terms deprive the United States District Courts of jurisdiction of all suits by or against Federal Reserve banks, unless a question involving the interpretation of the Constitution of the United States or of some Federal statute is raised by the original pleadings of the plaintiff. The provisions of the Federal Reserve Act or the regulations of the Federal Reserve Board are frequently the grounds upon which Federal Reserve banks defend suits brought against them; but the fact that such questions are raised in the defendant's pleadings is not a ground of jurisdiction in the United States District Courts. The Federal Reserve banks are thus forced to defend in the State courts suits which turn upon essentially Federal questions and which result in nationally important interpretations of the Federal Reserve Act. Unlike National banks, the Federal Reserve banks cannot remove suits brought against them by persons located in other States to the United States District Courts on the ground of diversity of citizenship, because the Supreme Court of the United States has held that a Federal corporation is not a citizen of any State, and there is no provision in the Federal Reserve Act similar to that in the National Bank Act providing that they shall be deemed citizens of the States in which they are located. The Act of Feb. 13 1925 makes an exception in the case of corporations In which the Government of the United States is the owner of more than one-half of the capital stock; and it would seem that the same exception should logically be extended to include Federal Reserve banks, since they act as fiscal agents and as sub-treasuries of the United States and perform many other important functions for the Government. Moreover, in the event of the liquidation of the Federal Reserve banks, all of their surplus, which amounts to nearly twice their paid-in capital stock, would become the property of the United States. The Federal Reserve Board has recommended In several of its previous annual reports to Congress that the law be amended so as to restore to the Federal Courts jurisdiction of suits by and against the Federal Reserve banks, and, for the reasons stated, it is hoped that Congress may see fit to enact an amendment for this purpose at an early date. Exemption of Federal Reserve Banks from Attachment or Garnishment Proceedings. The Federal Reserve Board desires to renew the recommendation, which it has made in previous annual reports to Congress, that the law be amended SO as to exempt Federal Reserve banks from attachment or garnishment proceedings before final judgment in any case or proceeding. The purpose of attachment and garnishment proceedings is to insure to the complainant that he will be able to obtain satisfaction of any Judgment which may be finally rendered in his favor; and the credit and financial standing of each Federal Reserve bank is such that no difficulty may be anticipated in obtaining full satisfaction of any judgment which may be rendered by the courts against it. Under the provisions of Section 5242 of the Revised Statutes, Nationa banks are exempted from attachment and execution before final judgment in any case or proceeding. and the Board feels that the law should be amended so as to give Federal Reserve banks the same protection in this respect. It is conceivable that, If large amounts of the funds or credits of the Federal Reserve banks should be tied up through attachment or garnishment proceedings, the ability of the Reserve banks to perform their functions might be seriously hampered. The report states that during 1932 banks to the number of 1,456 suspended, with deposits of $716,000,000, compared with 2,294 banks with deposits of $1,691,000,000 in 1931. It is also pointed out that "increase in the demand for currency during recent years, amounting to about $1,300,000,000 from the middle of 1930 to the middle of 1932, reflected in part the hoarding of currency by the public. Gold movements during the year, Federal Reserve credit policy, the use of United States Government obligations as collateral for Federal Reserve notes, credit agreements with foreign central banks are also covered in the report, which also states that "gross earnings of the Federal Reserve banks in 1932 amounted to $50,019,000, or $20,318,000 more than in 1931, and were the largest since 1929." ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. The year 1932, covered by this the Nineteenth Annual Report of the Federal Reserve Board, may be divided into two periods of nearly equal duration—the first extending from the beginning of the year to the middle of July and the second from that time to the end of the year. In the first half of the year the banking system of the country was subjected to pressure through losses of gold to foreign countries and through increased currency withdrawals in the United States. The Federal Reserve Banks purchased a large volume of United States Government obligations, and thereby enabled the member banks not only to meet the demands for gold from abroad and for currency at home but also to reduce their indebtedness to the Reserve Banks. During the second period, comprising a little less than half the year, there was a reversal of the gold and currency movements, and member banks obtained reserve funds from the gold inflow, from currency returned from hoarding, and to some extent from issues of new national-bank notes. Holdings of United States Government obligations by Reserve Banks remained at a constant level, and the funds arising from other sources were for the most part added to the reserve balances of member banks. At the end of the year these balances exceeded by Volume 136 Financial Chronicle $575,000,000 the reserve requirements prescribed by law. Member bank credit, which had declined rapidly from the autumn of 1930 to the middle of 1932, continued to decrease during the latter part of the year but at a slower rate. The velocity of bank deposits continued to decline throughout the year. Conditions in the open market for short-term money were relatively easy throughout the year, and in the latter part money rates declined to exceptionally low levels. Rates charged on commercial loans to customers by banks In the the financial centers also declined in the last six months, but were still relatively high in comparison with open-market rates. Volume of new capital investment was small throughout 1932. Bond prices declined until mid-summer, but were stronger in the latter part of the year. The operations of the Reconstruction Finance Corporation, which was organized in February. constituted an important factor in the credit situation during the year. In 1932, as in 1931. developments abroad and the continuance of serious maladjustments and dislocations in international financial and trade conditions were important unfavorable factors in business and credit developments in the United States. Business Conditions in 1932. In 1932, for the third successive year, business activity, prices and incomes declined substantially, but after the middle of the year there were increases in activity in several important industries, particularly textiles, and the general average of wholesale prices fluctuated around the level reached in June. Throughout the year expenditures for capital equipment, houses, automobiles, and other durable products were in small volume. Domestic distribution of commodities and foreign trade declined further. Flotations of new issues of domestic securities declined sharply, and there was a considerable reduction in the volume of issues for refunding purposes. Flotations of foreign securities were in extremely small volume. First Seven Months.—During the first seven months of 1932 business activity continued to decline rapidly, and there was a further reduction in commodity prices. The volume of industrial production, as measured by the Board's seasonally adjusted index, decreased by one fifth during this period, from 72 in January to 58 in July. At that time industrial activity, including manufacturing and mining, was at less than half the rate prevailing at the peak of activity in June 1929. The course of manufacturing output from 1919 through 1932 is shown by the upper curve on the accompanying chart [We omit the chart.—Ed.], which also shows by separate curves the volume of output of durable manufactures, such as steel, automobiles and lumber, and of nondurable manufactures, such as textiles and leather products, foods, and tobacco products. As indicated on the chart, the decrease in output of manufactures between the middle of 1929 and the middle of 1932 reflected chiefly the long-continued decline In output of durable goods which had been produced in large volume during the preceding period of industrial prosperity and whose replacement in many cases could be deferred. During the early months of 1932, however, about one half of the decline was in the production of nondurable products, particularly textiles and foods. Output of the heavy industries continued to decline, reflecting in part a further reduction in the volume of construction work undertaken in the latter part of 1931 and early in 1932. The accompanying chart [We omit the chart.—Ed.1 shows for the period 1919-32 the course of construction contracts awarded, as reported by the F. W. Dodge Corp., with separte curves for residential building and other construction work. The continued decline in industrial activity was accompanied by a further decrease in freight traffic, which reached a new low level in midsummer. Dollar volume of department-store sales also declined further. reflecting both price declines and reduction in physical volume. Accompanying the reductions in output and distribution of commodities, volume of employment continued generally to decrease, with large declines In employment at factories, on railroads, and in the construction industry. Real estate values declined in both urban and rural areas, and wholesale commodity prices decreased somewhat further. By June the general level of wholesale prices had declined to 64% of the 1926 average as compared with 69 in December 1931, and retail prices had shown a somewhat smaller decline. Last Fire Months.—The latter part of the year was a period of renewed activity in some industries and of relative stability in others. There were increases in aggregate industrial output, in freight carried by the railroads. in factory employment, and in factory payrolls. These increases occurred for the most part in August and September, and the higher levels reached at that time were generally maintained ruing the last quarter. The increase in industrial output, amounting to 14% between July and September, was largely in the production of textiles, leather products and foods, but in the autumn, when these industries showed some decline in activity, there was a considerable expansion in coal output, and at the end of the year automobile production increased in connection with the introduction of new models. Volume of construction continued at about the low level of the first half of the year, with changes in dollar volume of contracts largely of a seasonal character. Crop production was somewhat smaller than usual, with reduced crops of winter wheat, cotton, tobacco and fruits, and a large output of feed crops. Wholesale conunodity prices, after reaching a low level in June. increased during July. August and early September, but later declined by an amount somewhat larger than the previous advance. The increase in wholesale prices during the summer was largely in farm products, foods, hides and textiles, and the subsequent decline, which was partly seasonal was also in prices of these commodities, particularly grains and livestock. Prices or cotton and other textile raw materials, which had shown a substantial increase, declined considerably, but at the end of the year were still above the low levels of early summer. The renewal of activity in tho second half of the year was of smaller proportions than the decline during the first half, and the year ended with activity and prices in general at a lower level than in December 1931. Output of nondurable manufactures at the end of the year, however, was at about the same rate as at the end of the two preceding years. . . . Member Bank Credit. Volume of member bank credit outstanding continued to decline during 1932, rapidly during the first half of the year and less rapidly thereafter, reflecting a further liquidation of loans, partly offset by an increase in investments. At banks in New York City the liquidation was arrested in the middle of 1932, while at other banks it continued throughout the year. Loans and investments of member banks in New York City decreased by $745,000.000 in the first half of 1932 and increased by $612,000,000 in the second half; at member banks outside New York City they decreased by $1,829.000.000 in the first half of the year and by $1.143,000,000 in the second half. The accompanying table shows, by classes of loans and by classes of investments, changes in member bank credit during each half or the year, with separate figures for member banks in New York City and outside New York City. It brings out the fact that throughout the Year member banks, both in New York City and elsewhere, increased their 3601 holdings of United States Government securities, while all classes of loans continued to decline except the open-market loans of New York City banks. At New York City banks, holdings of investments other than United States Government securities increased by about $100,000,000 during the first half of the year and by about $160,000,000 in the second half, while outside New York member bank holdings of these investments decreased by $307,000.000 during the first half of the year and by $221.000,000 during the second half. ALL MEMBER BANKS—LOANS AND INVESTMENTS. [In millions of dollars.] Dec. 31 1932. Changes During 1932. Member Banks in New York City. Ail Other Member Member Banks. Banks In AU aher N. Y. Member January July-De- January- July-DeBanks. City. June. cember. June. ember. Loans and investments_ 7,327 20,142 —745 +612 —1,829 —1,143 Loans 3,538 11,666 —1,082 —143 —1,592 —1,240 Loans to banks 216 228 —114 —44 —103 —85 Loans to other oust'rs 2,621 11,283 —838 —235 —1,465 —1,127 Open-market loans_ 701 154 —130 +136 —24 —26 Investments 3,789 8,476 +336 +756 —238 +96 U. S. Govt. securities 2,603 3,937 +240 +595 +68 +317 Other securities 1,186 4,540 +97 +161 —307 —221 Between Oct. 4 1929, and Dec. 31 1932. total loans and investments of all member banks decreased by 68,444,000,000, or 24%, of which a part represented the direct effect of member bank suspensions. The entire decrease from 1929 was in loans, including both loans to customers and loans made in the open market, while member bank holdings of investments increased by 62,516,000,000 during the three-year period to the highest level on record. Cutomers' loans, which represent the larger part of the total volume of bank credit outstanding, showed over the three-year period the largest reduction in absolute figures of any class of loans, amounting to $9,344,000,000, or 40%. This reduction was due to a large number of influences related to the depressed condition of business and agriculture. It reflected. on the one hand, a reduction in the demand for crdit due to a reduced vou.me of business operations and the reluctance on the part of business to incur indebtedness in view of the uncertainty of business prospects and, on the other hand, the desire on the part of banks to maintain liquidity. Reduction in open-market loans was smaller in absolute amount than the reduction in customer loans, but larger in proportion, amounting to 62%. It represented a decrease in the demand for funds because of the low level of business activity, rather than a shortage in the supply. That open-market funds were available in large volume is indicated by the fact that the rates charged for them declined to the lowest levels on record, ranging at the end of December 1932 from % of 1% on prime bankers' acceptances to 1 % on open-market commercial paper. The demand, however, was small. The demand for funds for stock-exchange purposes declined to small amounts in keeping with the low level of operations in the securities markets; the volume of open-market commercial paper outstanding also declined by a large percentage; and the decline in bankers' acceptances in the market was substantial, reflecting in part the reduction in the volume of foreign trade. Velocity of Bank Credit.—By far the larger part of all payments in the United States is made by check and is reflected in the debits made by banks to the accounts of their depositors. The amount of these debits, as estimated for the country as a whole from figures currently reported by most of the principal cities, decreased from 1929 to 1932 by more than $700.000,000,000, or more than 60%. During the same period the volume of available means of payment, including both money in the hands of the public outside banks and funds held on deposit in banks, declined by stout 23%. The decline in payments during the course of the depression, therefore, has been proportionally nearly three times as large as the decline in the available means of payment. The velocity of bank deposits, as computed for member banks in leading cities and expressed in terms of the annual rate of turnover, decreased from about 45 in the autumn of 1929 to about 16 in the last quarter of 1932. The decline in velocity of deposits during this period was almost continuous, reflecting a constant decrease in the volume of payments, while the deposits themselves did not begin to decrease appreciably until the middle of 1931 and showed relatively little change after the first quarter of 1932. The difference between the course of deposits and changes in velocity during recent years is shown on the chart [We omit the chart—Ed.], which compares by quarters from 1923 through 1932 the net demand and time deposits held at member banks in leading cities with an estimate of the velocity of these deposits. It brings out the fact that at these cities the rate of turnover continued to decline during the latter part of 1932 while deposits were relatively stable. Bankd Suspensions and Currency Withdrawals. During the year 1,456 banks with deposits of $716,000,000 suspended operations. compared with 2,291 banks having deposits of 81.691,000.000 in 1931. Nearly one-third of the deposits of banks closed during the year were in banks suspended during the month of January. After the Reconstruction Finance Corporation began operations early in February 1932, and made funds available to banks throughout the country, the number of suspensions decreased rapidly, less than S15,000,000 in deposits being involved in failures during March as compared with $219,000,000 in January. In June. however, there were banking difficulties in Chicago and elsewhere, and banks with deposits of $133.000,000 suspended operations, chiefly in Illinois and Iowa, and there were a number of mergers and reorganizations arising out of banking difficulties. After midsummer failures were less numerous for four months, but in December there were many suspensions in some of the Midwestern and Far Western States. During the year many banks in a number of States closed temporarily under special "banking holidays" declared by civil authorities, and in November a Statevide banking moratorium was declared by the Governor of Nevada. Many other banks, without actual cessation of business, obtained agreements from their depositors for the waiver Or deferment of their claims. Of the 1,456 banks that suspended during the year 1932, somewhat less than one-fourth, with about one-third of the deposits, were member banks. Of these, 276 were national banks with deposits of 62 14,000,000 and 55 were State bank members of the Federal Reserve System with deposits of $55,000,000. The other 1,125 suspended banks were nonmember bank with deposits or 6446,000,000. During the year 290 suspended banks with deposits of $276,000,000 resumed operations. Of these, 44 were national banks with deposits of $56.000,000 and 8 were State bank members with deposits of $15,000,000. During the three years 1930-32. there were 5,100 bank suspensions, and deposits of suspended banks totaled S3,260,000,000. This large number os suspensions reflected the rapid decline, during the course of the depression, in security values, in values of urban and farm real estate held as collateral for bank loans, and the value of commodities, as well as Financial Chronicle 3602 the reduction in income of the banks' customers and the consequent difficulty of liquidating loans at maturity. Another factor in undermining the position of many banks was the withdrawal of funds by depositors. both for hoarding and for redeposit in other banks and the Postal Savings System. In January of 1932 currency withdrawals were general in most parts of the country, but during the remainder of the year they were localized for the most part in districts in which many bank failures occurred. During periods when suspensions were less numerous, from February to May and again in the late summer and the early autumn, there was a return flow of currency to the Federal Reserve Banks and the Treasury, and for the year as a whole there was little net change in the amount of currency outstanding. Increase in the demand for currency during recent years, amounting to about $1,300,000,000 from the middle of 1930 to the middle of 1932, re. fleeted in part the hoarding of currency by the public but was also due to a number of other developments. Absence of banking facilities in many localities owing to the closing of all the banks resulted in an Increased demand for cash for the transaction of business: growth in the practice of imposing service charges on sanill or over-active accounts had a tendency to increase the use of cash: and, finally, the imposition of the tax on checks In July 1932, together with increased postage rates, was an influence toward reduced use of checks and greater use of cash in the payment of bills. All withdrawals of currency, however, though they differed in significance according to their cause, had the same general effect on the position of the member banks and that of the Federal Reserve Banks. Gold Movements. During the first half of 1932 there was a considerable outflow of gold from this country. This outflow followed upon heavy withdrawals in the autumn of 1931, after the suspension of the gold standard in England, and reflected in large part withdrawals of balances by foreign central banks. The outflow was particularly heavy in the six-week period from the beginning of May to the middle of June. After that time the direction of the gold movement was reversed and gold imports assumed considerable proportions, so that for the year as a whole there was an increase of $50,000,000 in the monetary gold stock of this country. The gold stock of the country reached a high point of $5,000,000,000 in the autumn of 1931 prior to the departure of England from the gold standard. During the following eight months $1,100,000,000 of gold left this country, so that by midsummer of 1932 the stock of gold had declined to $3,900.000,000. An increase of $600,000,000 during the second half of the year carried the total to $4,500,000,000, about $500,000,000 below the peak of 1931 and at about the level of the average for the years 1926-27. The chart (We omit the chart.—Ed.] shows the course of monetary gold stock In the United States from 1914, when the Federal Reserve System was established, to the end of 1932. Federal Reserve Credit Policy. During 1932 the Federal Reserve System continued to pursue the policy of monetary ease which it had followed since the beginning of the depression. This policy was expressed through the purchase of United States Government securities in the open market and through the reduction of rates charged for discounts and for acceptances. In September 1929 discount rates were 6% at the Federal Reserve Bank of New York and 5% at the other Resserve Banks. By May 1931 these rates had been reduced to 13,5% in New York,2% in Boston, and 234 to 334% at the other Reserve Banks. In the autumn of 1931, however, when there was a larze outflow of gold following the suspension of the gold standard in England and a large volume of currency withdrawals in this country, discount rates were advanced to 335% at most Reserve Banks and to 4% at the Richmond and Dallas Banks. During 1932 the rate at the New York and Chicago Banks was reduced to 234% and at the other Banks it was 335%. Bill rates were gradually reduced during the period and at the end of 1932 were at a 1% level, the lowest since the establishment of the System. System purchases of United States Government securities during 1932 were on large scale and raised the total System portfolio of these securities to a new high level. The chart(We omit the chart.—Ed.]shows holdings of United States Government securities by the Reserve Banks and discounts for member banks from the autumn of 1929 to the end of 1932. It shows that United States Government security holdings of the Federal Reserve Banks were at a low level in September 1929 and that they increased to $500,000,000 by the end of that year after the break in the stock market and the subsidence of speculative activity. In 1930 and 1931 the portfolio of such securities gradually increased to $750,000,000. Alter the passage of the Glass-Steagall Act on Feb. 27 1932, the Federal Reserve System pursued a policy of large-scale open-market purchases of United States Government obligations, which carried their total to $1,850,000,000 on Aug. 10, a level that was maintained throughout the rest of the year. Acceptance holdings of the Reserve Banks fluctuated in 1929 and 1930 in accordance with usual seansonal tendencies. By the middle of 1931, however, the Reserve Banks' bill portfolio had declined to a low level of $65,000,000. Between that time and the end of October 1931 large purchases of bills were made by the Reserve Banks, particularly during the period of heavy gold exports after England's suspension of gold payments. At the end of October the bill portfolio had increased to $725,000,000. From that level it declined rapidly,reflecting chiefly the fact that abundance of short-time money in the open market resulted in a demand for acceptances by investors, and that open market rates on acceptances were lower that the 1% rate at the Reserve Banks. During the last quarter of 1932 acceptance holdings of the Reserve Banks were about 832,000,000, representing for the most part bills purchased under agreements with foreign central banks. Purchases by the Reserve Banks in the open market from the autumn of 1929 to the middle of 1932 enable member banks to reduce their indebtedness, notwithstanding the demand upon them for gold for export and for currency for domestic use. From $1,000,000,000 at the beginning of September 1929 member-bank discounts declined to $130,000,000 in April 1931, but increased to $850,000,000 by February 1932, after a period of heavy withdrawals. Renewed purchases of United States Government BANKING DEVELOPMENTS, 1929-32. [In millions of dollars] Changes. Sept. 25 July 20 Dec. 31 1932. 1932. 1929. Sept. 25 1929 to July 20 1932. 1,855 235 4.513 5,67e 2,509 1,933 576 +1,684 —406 —423 +991 —328 —504 +178 • Reserve Bank holdings cd U. S. Government securities Discounts for member banks Gold stock Money in circulation Reserve balances Required a sr unmees a a Partly estimated. 152 944 4,375 4,744 2,364 2,293 71 1,836 538 3,952 5,735 2,036 1,7/39 247 July 20 to Dec. 31 1932. +19 —303 +581 —80 +473 +144 +329 May 27 1933 securities on a large scale beginning in February 1932 were reflected in a decline of discounts to $250,000,000 by the end of the year. Holding of United States Government securities by the Reserve Banks on Sept. 25 1929, on July 20 1932, and at the end of 1932, together with related items, are shown in the following table: The table shows that during the period of 34 months prior to July 20 1932, the Reserve Banks had bought $1,684,000,000 of United States Government securities. The funds released by these purchases were largely absorbed, however, by increases of almost a billion dollars in money in circulation and by over 400 millions of gold exports. Nevertheless, member banks, as the result of the System's security purchases and a decrease in their reserve requirements, reflecting a decline in their deposit liabilities, were able by mid-July of 1932 to reduce their discounts by over 8400.000,000 and to accumulate about $250,000,000 of excess reserves. During this long period, therefore, open-market purchases by the Reserve Banks enabled the member banks taken as a whole to meet both external and internal drains on their reserves and at the same time to reduce their indebtedness to the Federal Reserve Banks. Indebtedness of member banks to other institutions increased by $96,000,000 during 1932 and at the end of the year was $312,000,000, representing chiefly borrowings from the Reconstruction Finance Corporation, as compared with $251,000,000 on Oct. 4 1929. After the middle of July, Federal Reserve Bank holdings of United States Government securities continued at a practically constant level, but the inflow of gold from abroad, the return flow of money from circulation, and issues of new national-bank notes resulted in a rapid growth of reserve balances at the member banks. Member bank reserve balances decreased rapidly in the last half of 1931 and the early part of 1932, reflecting chiefly demands on the member banks for gold for export and for additional currency for domestic use. Beginning in March of 1932, however, member bank reserve balances began to increase, and at the end of the year were at a high level-5575.000,000 in excess of the requirements prescribed by law. The chart (We omit the chart.—Ed.] on the following page shows for all member banks for the period 1929-32 the course of reserves held, required reserves, and excess reserves. The increase in reserve balances in 1932 was entirely at banks in financial centers and chiefly at banks in New York City. This does not indicate. however, that the easing effects of open-market purchases by the Reserve Banks were confined to the leading cities. United States Government securities were purchased for the most part in New York, the principal market for these securities, and the funds arising from the purchases were in the first instance added to the reserve balances of New York banks. Later, however, these funds were distributed, largely through Treasury disbursements of all kinds, including advances by the Reconstruction Finance Corporation to banks and other institutions throughout the country. Funds acquired in this manner by banks in the interior, not being employed locally, subsequently found their way back to New York and other financial centers through the redeposit of funds by outside banks with their city correspondents. As a result of these movements,reserve balances of member banks in leading cities increased from Dec. 30 1931, to Dec. 28 1932, by $216,000,000, of which $162,000,000 was at banks in New York City and $54,000,000 at banks in other leading cities. During the same period amounts due by these banks to other banks, that is, bankers' balances, increased by $832,000,000, of which about two-thirds was at New York City banks. Funds arising from open-market operations by the Reserve Banks, therefore, which in the first instance were placed at the disposal of member banks in financial centers, and chiefly in New York City, were distributed throughout the country through interdistrict movements of funds, chiefly reflecting operations by the Government. Although these funds were largely redeposited in New York and Chicago banks and appeared as excess reserves of these banks, they represented the operating reserves of many country correspondents, maintained subject to withdrawal whenever occasion should arise. The increase in excess reserves of member banks after February 1932 was accompanied by further easing of the money market. The chart [We omit the chart.—Ed.]shows the course of money rates in New York City from 1929 to 1932, and brings out the fact that, except for a rise in the autumn of 1931, money rates at New York declined from the autumn of 1929 to the end of 1932, and that this was true not only of open-market rates but also of rates charged by the banks to their customers. Customers' rates also declined in other financial centers. Money rates usually tend to decline during a depression, because the low level of business activity results in diminished demands on the commercial banks for current financing and in an increase in their reserves through the return of currency from circulation. During the depression that began in 1929, however. member banks were under the necessity of meeting foreign demands for gold and domestic demands for currency, both developments which would have tended toward the tightening of conditions in the money market, had it not been for the fact that the Federal Reserve System through purchases of United States Government securities enabled member banks to meet these demands and at the same time to reduce their indebtedness to the Reserve Banks and to build up a considerable volume of reserves in excess of legal requirements. At the end of 1932 short-term money rates were at record low levels, but low rates did not extend to the longterm markets, where yields on long-term issues, except those of the United States Government, continued high and flotations of new capital issues were small. United States Government Obligations as Collateral for Federal Reserve Notes. The adoption by the Federal Reserve System in 1932 of the open-market policy discussed elsewhere in this report was made possible by the GlassSteagall Act of Feb. 27 1932, which authorized the Federal Reserve Board until March 3 1933.* to permit the use of United States Government obligations as collateral security for Federal Res ve notes. The fact that this authority enabled the Federal Reserve System to pursue its onesmarket policy makes it appropriate to describe in some detail the Pro visions of the Federal Reserve Act which are modified by it and the effect that these modifications have on powers of the Federal Reserve System to engage in open-market operations. Provisions Concenring Reserves and Collateral.—Under the terms of the Federal Reserve Act the Federal Reserve Banks are required to hold a 40% reserve in gold against Federal Reserve notes in actual circulation; that is, against Federal Reserve notes paid out by the Federal Reserve Banks. Nothing in the Glass-Steagall Act made any change in this requirement. The change related solely to the collateral which a Federal Reserve Bank may pledge with the Federal Reserve agent, who is a representative of the Federal Reserve Board, as security for Federal Reserve notes. The Federal Reserve Banks must at all times maintain with the Federal Reserve agents collateral to the full amount of the Federal Reserve notes outstanding. Prior to the passage of the Glass-Steagall Act this collateral could consist only of gold and eligible paper. This paper included commercial, agricultural and industrial paper, and paper secured •Later extended to March 3 1934. • lk Volume 136 Financial Chronicle by United States Government obligations, rediscounted by member banks with the Reserve Banks, member bank collateral notes secured by eligible paper or by obligations of the United States Government, and bankers' acceptances purchased by the Reserve Banks. Under the terms of the Glass-Steagall Act United States Government obligations purchased by the Reserve Banks in the open market also became eligible as collateral. In addition to the collateral against Federal Reserve notes, the Federal Reserve Banks must hold a 5% redemption fund in geld with the Treasurer of the United States for such Federal Reserve notes outstanding as are not covered by gold with the Federal Reserve agents, and a 35% reserve in gold or lawful money against their deposits. Excess Reserves and Free Gold.—It is on these provisions of the law that calculations of the Federal Reserve Banks excess reserves and of their free gold were based. Excess reserves are the total reserves of the Reserve Banks less the 40% gold reserve against Federal Reserve notes and the 35% gold or lawful money reserve against deposits. Collateral requirements do not enter into the calcualtions of excess reserves. The term free gold, on the other hand, meant gold held by the Reserve Banks that was not required either as reserves or as collateral for Federal Reserve notes. The position of the Reserve Banks in regard to excess reserves and free gold since January 1929 is shown in the chart[We omit the chart.—Ed.], which indicates that when section 3 of the Glass-Steagall Act became effective the distinction between excess reserves and free gold lost its significance. On Feb. 24 1932, the Federal Reserve Banks had $1,392,000,000 of excess reserves, but as they did not have a sufficient amount of eligible paper available as collateral,$930,000,000 of these excess reserves in the form of gold had to be pledged as collateral against Federal Reserve notes, in addition to $46,000,000 required for the redemtpion fund, with the consequence that the gold not needed for these purposes amounted to $416.000,000. This amount could have been increased somewhat by reducing the volume of Federal Reserve notes held by the Federal Reserve Banks in their own vaults, but, even after that volume was reduced to the minimum required as an operating matter, the free gold would have been $542,000,000. This situation arose out of the fact that during the preceding year there had been a large demand for currency by the public, in addition to a large export of gold, both of which have exerted a heavy pressure on member banks. In order to assist these banks in meeting the demands upon them without increasing unduly their indebtedness to the Reserve Banks, the Federal Reserve System had purchased a considerable volume of United States Government securities, in addition to amounts purchased earlier during the depression, so that on Feb. 24 1932, the Reserve Banks held $740,000,000 of United States Government securities. Since these securities were not eligible as collateral against Federal Reserve notes, the Reserve Banks were obliged to use a large amount of gold for collateral purposes. Free gold of the Federal Reserve Banks could have been increased by the sale of United States Government securities, which would have necessitated additional borrowing by member banks and thus would have brought into the Reserve Banks additional paper eligible as collateral for Federal Reserve notes. In the then existing circumstances, however, it was undesirable to cause an increase in the indebtedness of member banks. The situation was further complicated by the fact that, notwithstanding the large withdrawals of foreign funds which had occurred in the autumn of 1931,foreign central banks still had a large volume of short-term balances in this country, which were subject to withdrawal on demand and which there was reason to believe would be withdrawn in large part in the course of a few months. Policy Made Possible by the Act.—By the adoption of the Glass-Steagall Act on February 27 the Federal Reserve Board was granted the power to permit the use of United States Government securities as collateral against Federal Reserve notes until March 3 1933.a Having received this authority, the Federal Reserve Banks were in a position, through the purchase of United States Government securities, to enable the member banks to meet additional demands for currency and gold and at the same time to reduce their indebtedness at the Reserve Banks. United States Government securities were first pledged on May 5 1932. The largest amount used as collateral at any one time during 1932 was $682,000,000 on July 6, and the amount so used on Dec. 31 1932, was $428,000,000. Advances to Member Banks on Ineligible Paper. The Glass-Steagall Act also contained provisions in regard to loans to member banks. Sections 1 and 2 of this act added to the Federal Reserve Act two new sections, sections 10 (a) and 10 (b), under the provisions of which, in unusual circumstances, member banks that are without adequate amounts of eligible and acceptable assets to enable them to obtain sufficient credit accomodations from the Federal Reserve Banks, through rediscounting or other methods provided by the Federal Reserve Act. may receive assistance under certain conditions on the basis of other security satisfactory to the Federal Reserve Banks. Under section 10 (a), which is permanent legislation, a Federal Reserve Bank may make advances upon such security to a group of its member banks for distribution to such bank or banks within the group as are in need of assistance, and under section 10 (b) the Federal Reserve Banks were authorized, until March 3 1933,11 to make advances upon such security to individual member banks having a capital stock of not more than $5,000,000.c Advances under section 10 (a) may be made only with the consent of five members of the Federal Reserve Board, and the obligations representing such advances are not eligible as collateral security for Federal Reserve notes. No advances under section 10 (a) were made by the Federal Reserve Banks in 1932. Advances under section 10 (b), according to the provisions of the Act of Feb. 27 1932, could be made only with the consent of five members of the Federal Reserve Board,c and obligations representing such advances are not eligible as collateral security for Federal Reserve notes. The authority granted by section 10 (b) made it possible for the Federal Reserve Banks to extend to a considerable number of member banks in 1932 credit that was urgently needed to tide them over a difficult period and in some Instances to prevent suspension. The first advance under section 10 (b) was made on March 30 1932, and up to the end of 1932 loans aggregating $33,012.000 had been authorized under this section to 50 member banks. located in seven Federal Reserve Districts—Boston, New York, Philadelphia, Cleveland, Atlanta, Dallas and San Francisco. Of the amount authorized. 328.965.000 had been advanced and 314.993.000 had been repaid, leaving a balance outstanding of $13,972,000 at the end of the year, Extension of Circulation of National-Bank Notes. Section 29 of the Federal Home Loan Bank Act of July 22 1932, extended to all bonds of the United States bearing interest at a rate not in excess of 334 %. for a period of three years. the circulation privilege previously possessed only by certain limited issues of 2% bonds. It has been a Later extended to March 3 1934. b Extended to March 3 1934 by the Act of Feb. 3 1933, and to "such additional period not exceeding one year as the President may prescribe" by the Act of March 9 1933. . c This provision was eliminated by the Act of March 9 1933. (See Federal Reserve Bulletin, March, 1933, p. 118.) 3603 held by the Attorney General of the United States that the bonds given the circulation privilege by this act lose that privilege at the end of three years from the date of the passage of the act, and that notes issued upon the deposit of such bonds must then be retired in an appropriate manner.d On June 30 1932. there were outstanding $675,000,000 of 2% bonds having the circulation privilege, all of which had been callable at the option of the Treasury since April 1930. The additional bonds to which the Act of July 22 1932. extended this privilege amounted at the time of its passage to about 33,000,000.000. Formerly, the limiting factor on national-bank-note circulation was the available amount of Government securities having the circulation privilege, but under the Act of July 22 1932. in view of an additional 33.000.000.000 of bonds that qualify under the interest rate provision, the limiting factor is in the provision of the National Bank Act that a national bank shall not issue notes in excess of its paid-in capital. On June 30 1932. the capital of national banks was $1,570,000,000 and their liability for note circulation, as shown by the records of the Comptroller of the Currency, was $670.000,000 leaving 8900.000,000 as the maximum amount of additional notes that the national banks could issue under the authority conferred by the Act of July 22 1932. The additional issuing power was held chiefly by the national banks of four Federal Reserve Districts—New York, Boston, Chicago and San Francisco—which together could issue 69% of the potential increase in notes. The note-issue privilege extended by the Act of July 22 was utilized by the national banks only to a limited extent during 1932, owing to the fact that the member banks had a considerable and a growing volume of excess reserves, or idle funds. The issuance of notes by national banks has no effect upon the public's demand for currency, and consequently the payment of such notes into circulation tends to result in the retirement from circulation of other forms of currency. From June 30 to Dec. 31 1932, national-bank notes in circulation increased by $119.000,000; during this same period total money in circulation declined by $21.000,000, the Increase in national-bank notes being more than offset by decreases in Federal Reserve notes and other kinds of currency. While the issuance of national-bank notes has no effect on the total volume of money in circulation, it provides a method by which a national bank can obtain reserve funds without resorting to the Reserve Banks. When a national bank issues bank notes, an equivalent amount ofsome form of currency is likely to be deposited with a Reserve Bank and to be added to the reserve balance of a member bank. The power of national banks to issue additional notes, therefore, has an effect not only on the volume of Federal Reserve currency, but also, and more importantly, on the position of the Federal Reserve Banks in relation to the member banks, and on the influence of the Federal Reserve System on the general credit situation. Credit Agreements With Foreign Central Banks. The agreement of the Federal Reserve Bank of New York and other Federal Reserve Banks to purchase from the Bank of England prime commercial bills bearing its endorsement, which had been renewed for a period of three months from Nov. 1 1931, in the reduced amount,of $75,000,000, expired on Jan. 311932. no purchases having been made during the period of the renewal and no further renewal having been requested. The agreements by the Federal Reserve Banks and other central banks with the banks of issue of Austria. Hungary, and Germany. described in the Annual Report of the Federal Reserve Board for 1931. were renewed at intervals during 1932 by the creditor banks. The last renewals in 1932 were as follows: On Oct. 17 1932. the agreement with the Austrian National Bank was renewed to Jan. 16 1933. in the total amount of $12,664,000. the Federal Reserve participation being $975.000: on Oct. 18 1932, two agreements with the National Bank of Hungary, covering a total of $16,570.000, with Federal Reserve participation amounting to $4,000.000. were renewed to Jan. 18 1933: on Dec. 5 1932.following repayments during the year aggregating 314.000,000. the credit of $100,000,000 to the German Reichsbank was renewed to March 4 1933. in the reduced amount of 386,000,000, the Federal Reserve participation being reduced from $25,par000,000 to $21,500.000. Without exception, the Federal Reserve ticipation in these various undertakings was in the form of an agreement respective to purchase prime commercial bills endorsed or guaranteed by the repayment in debtor banks, and all such agreements provide for ultimate dollars or in gold. Reserve In addition to credit agreements with central banks, the Federal Banks in 1931 made a demand deposit of 310,000.000 with the Bank for purthe in time to time International Settlements to be employed from amount chase of bills guaranteed by that bank. At the end of 1932 the so invested in bills was 31.687,000 and the amount on deposit had been reduced to about $2,501,000. Earnings and Expenses ofthe Federal Reserve Banks. Gross earnings of the Federal Reserve Banks In 1932 amounted to $50,019.000. or $20,318,000 more than in 1931, and were the largest since 1929. After deducting expenses of 326.291,000—somewhat less than for the preceding year—reserves for depreciation on' bank premises, and reserves for losses, self-insurance, &c., there remained net earnings of $22,314,000, of which $9.282,000 was paid to member banks as dividends. $11,021,000 was transferred to surplus, and $2.011.000 was paid to the United States Government as a franchise tax. Earnings, expenses, dividend Payments, &c., for all Federal Reserve Banks combined for 1932 and 1931 are shown in the following table: EARNINGS AND EXPENSES OF FEDERAL RESERVE BANKS DURING 1932 AND 1931 [In thousands of dollars] 1932. Total earnings Current expenses Current net earnings Additions (profits on sales of U.S.Government securities,&e.) Deductions (depreciation and other reserves. &c.) Net additions to current net earnings Net earnings 50.019 28,291 1931. 29,701 27,040 23,728 2,661 3.884 6.298 3,187 2,876 —1,414 22.314 311 2.972 10.030 9.282 Dividends paid al1,021 a-7.058 Transferred to surplus 2.011 Franchise tax paid U. S. Government a The amount shown as withdrawn from surplus during 1931 is exclusive of 58.158.000 charged direct to surplus at the end of 1931 and set aside as depreciation reserve on United States bonds, and the amount shown as transferred to surplus in 1932 is exclusive of the same amount (18,158,000) returned direct to surplus before the books were closed at the end of 1932. Dividends of the Federal Reserve Banks of St. Louis and Dallas were paid in part out of net earnings and in part out of surplus. All of the other Federal Reserve Banks had sufficient net earnings to pay accrued dividends in full. The Federal Reserve Bank of Chicago paid a franchise tax to the d Opinion of the Attorney General, Aug. 12 1932. 3604 Financial Chronicle United States Government of $1,091,513.45, the Federal Reserve Bank of Cleveland of $832.745.90, and the Federal Reserve Bank of Minneapolis of $87.158.54. A reserve of $8,158,000 for depreciation on United States bonds, which was charged direct to surplus on Dec. 31 1931, was returned to surplus before the books were closed at the end of 1932. After the books were closed on Dec. 31 1932, the surplus of the 12 Federal Reserve Banks combined amounted to $278,599,000. All of the net earnings of a Federal Reserve Bank, after the payment of dividends, are transferred to its surplus account until the surplus equals 100% of subscribed capital, and thereafter 90% of such net earnings is paid to the United States Government as a franchise tax and 10% is transferred to surplus. At the end of 1932 all Federal Reserve Banks except Boston, New York, Philadelphia and San Francisco had surplus accounts in excess of subscribed capital. The total subscribed capital of the Federal Reserve Banks at the end of 1932 was $302,584,000, compared with $321,137,000 the year before, of which onehalf had been paid in. Gross and net earnings during the year 1932 and the distribution of net earnings of each Federal Reserve Bank are shown in the following table: FINANCIAL RESULTS OF OPERATIONS OF THE FEDERAL RESERVE BANKS DURING 1932. Federal Reserve Bank. Gross Earnings. Boston New York Phlladelphia Cleveland Richmond Atlanta Chicago St. Louis 82,774,303 8686,639 15,948,943 10,404,550 5,001,098 3,270,835 5,128,554 1,871,256 314,490 1,871,123 292,545 2,003,196 5,613,671 2,242,725 243,485 1,625,432 272,338 1,435,093 245,356 2,021,468 163,915 1,307,24b 5.288.b90 2,306,110 minneapolls Kansas City Dallas San Francisco Total Net Earnings. Dividends Transferred Franchise Tax. to Surplus.. Paid. 8675,511 3,562,030 973,393 858,427 314,490 292,545 1,029,933 268,505 175,495 245,356 237,970 648,589 811,128 6,842,520 2,297,442 180,083 121,279 -25,020 9,684 May 27 1933 and securities, together with an Increase in the average rate of earnings from 2.20% to 2.33%. Average daily holdings of bills and securities, together with average rates and amounts of earnings thereon, are shown for recent years in the following table: EARNINGS ON BILLS AND SECURITIES. [Amounts In thousands of dollars.] Bills and Securities Held by All Federal Reserve Banks, Year. Total. Daily average holdings: 1929 1930 1931 1932 Aver, rate of earnings(%): 1929 1930 1931 1932 Earnings: 1929 1930 1931 1932 United Bills States Bills Dis- Bought in Governcounted. Open Mar- meat Seket. curities. All Other Bills and Securities. 1,413,058 1,056,895 1,251,058 2,062,446 950,580 271,727 326,217 520,637 4.86 3.25 2.20 2.33 5.03 3.93 3.01 3.43 5.00 2.85 2.04 3.93 3.93 3.08 1.86 1.84 4.94 4.09 2.90 4.17 68,683 34,365 27,565 47,992 47,791 10,672 9,821 17,881 12,064 6,081 5,010 2,785 8,165 17,273 12,428 26,924 666 339 306 402 241,399 207,659 213,201 563,672 245,260 669,013 70,902 1,461,258 13,420 8,295 10,568 9,649 3832,746 1,091,513 87,159 -74,055 1,657,521 850,018,817 822,314,244 $9,282,244 *11,020,582 82,011,418 * Exclusive of $8,158,268 returned to surplus before the books were closed at the end of 1932, which amount had been charged direct to surplus at the end of 1931 and set aside as a depreciation twelve on United States bonds. The increase in gross earnings of the Federal Reserve Banks in 1932 was due to an Increase of $811,000,000 in the daily average holdings of bills Current expenses of the Federal Reserve Banks in 1932 were $26,291,000, or $749,000 less than in 1931. Reductions were reported in the cost of printing Federal Reserve notes, and in expenditures for salaries, insurance, telegraph, expressage, printing and stationery and office and other supplies. The average number of officers and employees, exclusive of those assigned to the Reconstruction Finance Corporation units, decreased from 9,426 in 1931 to 9,283 in 1932, and there was some falling off in the volume of work handled in the principal operating departments of the banks except in the discount and collection departments, where the volume of work increased somewhat. During the last six months of the year the Federal Reserve Banks had an average of 734 employees engaged on work for the Reconstruction Finance Corporation, which was established in February 1932. Text of $500,000,000 Wagner Unemployment Relief Act Providing for Federal Aid to States-Funds to Be Made Available Through Reconstruction Finance Corporation. We are giving herewith the text of the Wagner unemployment relief measure, as passed by Congress and signed (May 12) by President Roosevelt. The newly enacted measure provides that the sum of not to exceed $500,000,000 be made available out of funds of the Reconstruction Finance Corporation for direct grants of Federal aid to States. In these columns May 20 (page 3461) it was indicated: Half of the $500,000,000 fund is authorized for grants to States in the ratio of one-third of the amount expended by such States for relief. After Oct. 1 1933 this restriction will be removed. The balance of $250,000,000, plus any amounts remaining from the first half of the fund, will be used for grants to States where the combined Federal. State and local funds are inadequate. Additional grants are authorized for those in distress who have no legal settlement in any State or community, and this also applies specifically to co-operative and selfhelp associations for the barter of goods and services. Other items bearing on the new legislation appeared in our issues of April 29 (page 2894) and May 6 (page 3080). The text of the bill as enacted into law follows: [H. R. 4606] AN ACT to provide for co-operation by the Federal Government with the several States and Territories and the District of Columbia in relieving the hardship and suffering caused by unemployment, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Congress hereby declares that the present economic depression has created a serious emergency, due to widespread unemployment and increasing inadequacy of State and local relief funds, resulting in the existing or threatened deprivation of a considerable number of families and individuals of the necessities of life, and making it imperative that the Federal Government cooperate more effectively with the several States and Territories and the District of Columbia in furnishing relief to their needy and distressed people. Sec. 2. (a) The Reconstruction Finance Corporation is authorized and directed to make available out of the funds of the Corporation not to exceed $500,000,000, in addition to the funds authorized under title I of the Emergency Relief and Construction Act of 1932, for expenditure under the provisions of this Act upon certification by the Federal Emergency Relief Administrator provided for in section 3. (b) The amount of notes, debentures, bonds, or other such obligations which the Reconstruction Finance Corporation is authorized and empowered under section 9 of the Reconstruction Finance Corporation Act, as amended, to have outstanding at any one time is increased by $500,000,000 Provided, That no such additional notes, debentures, bonds, or other such obligations authorized by this subsection shall be issued except at such times and in such amounts as the President shall approve. (c) After the expiration of ten days after the date upon which the Federal Emergency Relief Administrator has qualified and has taken office, no application shall be approved by the Reconstruction Finance Corporation under the provisions of title I of the Emergency Relief and Construction Act of 1932, and the Federal Emergency Relief Administrator shall have access to all files and records of the Reconstruction Finance Corporation relating to the administration of funds under title I of such Act. At the expiration of such ten-day period, the unexpended and unobligated balance of the funds authorized under title I of such Act shall be available foe the purposes of this Act. Sec. 3. (a) There is hereby created a Federal Emergency Relief Administration, all the powers of which shall be exercised by a Federal Emergency Relief Administrator (referred to in this Act as the "Administrator") to be appointed by the President, by and with the advice and consent of the Senate. The Administrator shall receive a salary to be fixed by the President at not to exceed $10,000, and necessary traveling and subsistence expenses within the limitations prescribed by law for civilian employees in the executive branch of the Government. The Federal Emergency Relief Administration and the office of Federal Emergency Relief Administrator shall cease to exist upon the expiration of two years after the date of enactment of this Act, and the unexpended balance on such date of any funds made available under the provisions of this Act shall be disposed of as the Congress may by law provide. (b) The Administrator may appoint and fix the compensation of such experts and their appointment may be made and compensation fixed without regard to the civil service laws, or the Classification Act of 1923, as amended, and the Administrator may, in the same manner, appoint and fix the compensation of such other officers and employees as are necessary to carry out the provisions of this Act, but such compensation shall not exceed in any case the sum of $8,000 and may make such expenditures (including expenditures for personal services and rent at the seat of government and elsewhere and for printing and binding), not to exceed $350,000, as are necessary to carry out the provisions of this Act, to be paid by the Reconstruction Finance Corporation out of funds made available by this Act upon presentation of vouchers approved by the Administrator or by an officer of the Administration designated by him for that purpose. The Administrator may, under rules and regulations prescribed by the President, assume control of the administration in any State or States where,in his Judgment, more effective and efficient co-operation between the State and Federal authorities may thereby be secured in carrying out the purposes of this Act. (c) In executing any of the provisions of this Act, the Administrator, and any person duly authorized or designated by him, may conduct any investigation pertinent or material to the furtherance of the purposes of this Act and, at the request of the President, shall make such further investigations and studies as the President may deem necessary in dealing with problems of unemployment relief. (d) The Administrator shall print monthly, and shall submit to the. President and to the Senate and the House of Representatives (or to• the Secretary of the Senate and the Clerk of the House of Representatives, if those bodies are not in session), a report of his activities and expenditures under this Act. Such reports shall, when submitted, be printed as public documents. Sec. 4. (a) Out of the funds of the Reconstruction Finance Corporation made available by this Act, the Administrator is authorized to• make grants to the several States to aid in meeting the costs of furnishing relief and work relief and in relieving the hardship and suffering caused by unemployment in the form of money, service, materials, and /or commodities to provide the necessities of life to persons in need as a result of the present emergency, and/or to their dependents, whether resident, transient, or homeless. (b) Of the amounts made available by this Act not to exceed $250,000,000 shall be granted to the several States applying therefor, in the following manner: Each State shall be entitled to receive grants equal to one-third of the amount expended by such State, including the civil: subdivisions thereof, out of public moneys from all sources for the purposes set forth in subsection (a) of this section and such grants shall, be made quarterly, beginning 'with the second quarter in the calendar year 1933, and shall be made during any quarter upon the basis of such expenditures certified by the States to have been made during the preceding quarter. (c) The balance of the amounts made available by this Act, except the amount required for administrative expenditures under section 3, shall be used for grants to be made whenever, from an application presented by a State, the Administrator finds that the combined moneys which can be made available within the State from all sources, supplemented by any moneys, available under subsection (b) of this section, will fall below the estimated needs within the State for the purposes specified in subsection (a) of this section: Provided, That the Administrator may certify out of the funds made available by this subsection, additional grants to States applying therefor to aid needy persons who. Financial Chronicle have no legal settlement in any one State or community, and to aid in assisting co-operative and self-help associations for the barter of goods and services. (d) After Oct. 1 1933, notwithstanding the provisions of subsection (b), the unexpended balance of the amounts available for the purposes of subsection (b) may, in the discretion of the Administrator and with the approval of the President, be available for grants under subsection (c). (e) The decision of the Administrator as to the purpose of any expenditure shall be final. (f) The amount available to any one State under subsections (b) and (c) of this section shall not exceed 15 per centum of the total amount made available by such subsections. Sec. 5. Any State desiring to obtain funds under this Act shall through its Governor make application therefor from time to time to the Administrator. Each application so made shall present in the manner requested by the Administrator information showing (1) the amounts necessary to meet relief needs in the State during the period covered by such application and the amounts available from public or private sources within the State, its political subdivisions, and private agencies, to meet the relief needs of the State, (2) the provision made to assure adequate administrative supervision, (3) the provision made for suitable standards of relief, and (4) the purposes for which the funds requested will be used. Sec. 6. The Administrator upon approving a grant to any State shall so certify to the Reconstruction Finance Corporation which shall, except upon revocation of a certificate by the Administrator, make payments without delay to the State in such amounts and at such times as may be prescribed in the certificate. The Governor of each Statereceiving grants under this Act shall file monthly with the Administrator, and in the form required by him, a report of the disbursements made under such grants. Sec. 7. As used in the foregoing provisions of this Act, the term "State" shall include the District of Columbia, Alaska, Hawaii, the Virgin Islands, and Puerto Rico and the term "Governor" shall include the Commissioners of the District of Columbia. Sec. 8. This Act may be cited as the "Federal Emergency Relief Act of 1933." Approved May 12th 1933. The Course of the Bond Market. Bond prices again advanced to new high levels this week, in common with stock and commodity prices. Railroad bonds were particularly strong. News of increasing business activity dominated the scene, with steel mill operations at their highest level in two years. The value of the dollar in terms of foreign gold currencies again declined. United States Government bonds were up moderately this week, upon the purchase by the Federal Reserve banks of approximately $25,000,000 of Covernment bonds. News that the Federal Reserve banks were initiating the proposed new open market operations caused speculative rises in both stock and bond prices. Late on Thursday the New York Federal Reserve Bank cut its rediscount rate to 2%% from 3%, which had been in effect since April 7. The Reserve banks' statement as of Wednesday this week revealed a further decline in circulation, although it is still above Janu- ary levels, a decline in discounts, and an increase in excess reserves at New York. Second grade and high grade railroad bonds have been strong during the present week and new highs have been reached by several issues of the former group. Noticeable advances were made by the Baltimore & Ohio cony. deb. 432s, 1960, which gained 23/i points for the week, and the company's refunding and general bonds. Most of the Illinois Central Railroad bonds advanced several points, the deb. 4%s,1966, selling 84 points higher at the end of the week. The Wabash Railway junior obligations also showed large gains, the 5s, 1980, selling 49/i points higher for the week. Utility bonds continued to move ahead during the week. High grade issues scored fractional gains, while lower trades registered more substantial advances. Associated Gas & Electric debentures were off temporarily on news of a bond exchange plan but recovered. Illinois Power dr Light bonds also went off sharply upon application for receivership but they also recovered. Louisville Gas & Electric 5s, 1952, went from 99% to 101% during the week, while New Orleans Public Service 5s, 1955, went from 523/i to 56 and Indianapolis Power & Light 5s, 1957, from 84% to 85%. Further gains in the industrial bond list were scored during the week, bringing the averages into new high ground for 1933. The industrial price average stands currently at 90.27 which compares with a range of 90.27 high and 78.44 low in 1933 to date and 85.61 high and 62.09 low in 1932. Essentially all groups held previous gains, individual issues which had lagged coming into line, and a number of new highs being established. On report of purchase of the company by di Pont, Remington Arms 6s, 1937, rose 25 points for the week to 100%, later selling off to 913'. Secondary steel issues did well, Colorado Fuel & Iron bonds being a feature. Armour of Illinois 432s, 1939, moved to a new high at 87. Purity Bakeries 5s, 1948,gamed 2% points to 82% on activity in baking company stocks on the Exchange. Tire and rubber bonds as well as petroleum issues were firm, retaining past advances. The foreign bond market moved generally upward during the past week. The principal gains, however, were recorded in the defaulted bond groups such as the Chilean issues, which advanced from 1 to 4 points, and the Brazilians, which registered similar gains. Little change occurred, however, in the high grade group, notably the French and Swiss issues, which have been selling at substantial premiums during recent weeks. Uruguay and Argentine issues were another group showing pronounced strength. Moody's computed bond prices and bond yield averages are given in the tables below: MOODY'S BOND YIELD AVERAGES.* (Based on Individual Closing Prices.) MOODY'S BOND PRICES.* (Based on Average Yields). 5 4 3 2 1 se. 85.10 84.97 84.60 84.10 83.97 84.10 84.10 83.72 83.72 83.23 82.99 83.11 82.74 82.38 80.95 80.26 80.03 79.91 79.68 78.66 77.99 77.55 77.44 120 Domestics bp Rattail& daa. da. A. 103.99 93.26 81.78 103.82 93.11 81.78 103.82 92.68 81.42 103.65 92.25 80.95 103.48 91.96 80.72 103.48 92.25 80.84 103.32 92.25 80.72 103.15 92.10 80.60 103.15 91.67 80.49 102.64 91.11 80.03 102.47 90.97 79.91 102.64 91.25 79.91 102.30 90.55 79.34 101.97 90.69 78.99 100.81 89.17 77.88 100.33 88.50 77.11 99.68 87.69 77.00 99.68 87.56 77.00 99.36 87.30 76.67 98.88 86.25 75.61 98.88 85.87 74.88 98.73 85.10 74.88 98.88 84.97 74.88 120 Domestics by Groups. Data. RR. 68.04 67.77 67.33 66.73 68.64 66.73 66.98 66.30 66.55 66.04 65.71 65.62 65.62 65.12 63.50 62.64 62.95 62.79 62.56 61.41 60.38 59.95 59.65 84.47 84.35 83.97 83.23 83.11 83.35 83.35 82.74 82.50 81.90 81.90 82.02 81.66 81.66 79.91 78.99 78.77 78.88 78.55 77.11 76.25 75.61 75.40 P. U. Indus, 80.84 80.72 80.26 79.80 79.91 79.91 80.14 79.91 80.14 79.91 79.68 79.34 79.11 78.66 77.22 76.78 76.89 76.46 75.92 74.88 74.05 74.15 74.05 90.27 90.27 90 00 89.86 89.45 89.45 89.31 89.17 88.90 88.23 87.83 88.10 87.69 87.17 86.12 85.10 84.72 84.85 84.85 84.22 83.97 83.60 83.60 AU 120 1933 Domes Daily Averages. M. May 26_ _ 25_24__ 23._ 22__ 20.._ 19__ 18__ 17__ 16._ 15__ 13._ 12__ II__ 10__ 120 DOM48:10 by Groves, 120 DonaWA by ROW*. Ada. 4.51 4.52 4.52 4.53 4.54 4.54 4.55 4.56 4.56 4.69 4.60 4.59 4.61 4.63 4.70 4.73 4.77 4.77 4.79 4.82 4.82 4.83 4.82 AG. A. 5.19 5.20 5.23 5.26 5.28 5.26 5.26 5.27 5.30 5.34 5.35 5.33 5.38 5.37 5.48 5.53 5.59 5.60 5.62 5.70 5.73 5.79 5.80 6.06 6.06 6.09 6.13 6.15 6.14 6.15 6.16 6.17 6.21 6.22 6.22 6.27 6.30 6.40 6.47 6.48 6.48 6.51 6.61 6.68 6.68 6.68 Bea. RR. CON!...Volor.C>O2Nont-t,MMoTQN,00.W0.4. moo.vmnmmmoReiomm.q, m.t,t!mo.omm‘mmmmmt-mmmqqmm rnist:0:04.-Zr.0.0.4-060OmmoicOcO0O mc;40;mo;06mo;Mwm0,060.04060-cOr:m May 28 25 24 23 22 20 19 18 17 16 15 13 12 11 10 9 8 AS 120 Domes- mmammmommumommommo PP pmmoommoommmmmmmammmmmo r.mummomm.o.owmmom.. ov .mcw&w.low.mmmoo-immom 1933 Daily Averages. 3605 1 P. U. 1 Baur. o .m mommomammcompompmmmommmml 4m mmmommam-1mm-474-4o-;c0 C0a,WWW.03..bOmbbcoM;o6iotoMb000 m m omLI ;/0 ;0.MioMm4•C0mi0:-.1.60.col4 o Volume 136 6.14 6.15 6.19 6.23 6.22 6.22 6.20 6.22 6.20 6.22 6.24 6.27 6.29 6.33 6.46 6.50 6.49 6.53 6.58 6.68 6.76 6.75 6.76 5.40 5.40 5.42 5.43 5.46 5.46 5.47 5.48 5.50 5.55 5.58 5.56 5.59 5.63 5.71 5.79 5.82 5.81 5.81 5.86 5.88 5.91 5.91 49 For. doss. 9.66 9.71 9.75 9.81 9.88 10.00 10.08 10.16 10.21 10.33 10.23 10.09 10.07 9,94 9.98 10.01 10.08 9.93 9.89 9.84 9.83 9.89 9.91 m m m m m c 01 -0 m Melpo-nINcoo,m.-.0.-oponmmen weenyWeekly 6.72 5.77 6.76 Apr. 28 77.11 99.68 85.35 74.46 58.32 74.36 74.05 83.35 Apr. 28__ 4.77 5.93 10.21 21 6.95 6.98 74.67 97.78 83.35 72.16 55.73 71.38 72.06 81.30 21__ 5.93 4.89 6.10 10.5P 14._ Stock sod. 14 Stock Bulls age Clo sod. 6.77 13 75.61 100.00 85.87 73.95 54.80 71.09 74.67 81.90 4.75 5.73 6.70 13_. 6.05 10.81 74.46 99.84 85.10 72.65 53.28 70.62 73.25 79.91 5.79 6.90 7 4.76 6.84 6.22 11.0 1 74.77 99.52 85.48 72.85 53.88 71.38 73.35 80.14 6.88 4.78 5.76 6.83 6.20 10.8 77.88_ 101.64 87.83 75.82 57.24 73.65 78.10 82.14 Mar.24__ 5.58 6.59 Mar. 24 4.65 6.38 6.03 10 7t 79.11 102.30 89.17 77.33 58.52 74.57 80.49 82.74 17__ 5.48 6.45 17 4.61 6.17 5.98 1O.. 74.67 99.04 85.48 72.06 54.18 69.59 78.35 78.44 3 4.81 5.76 6.96 6.54 6.35 1i li 78.77 102.98 89.31 76.25 67.98 73.15 80.60 83.11 Feb. 24.. 8.55 4.57 5.47 6.16 geb. 24 5.95 I Lts 81.30 104.51 90.83 79.45 60.60 75.50 83.85 84.97 6.26 17__ 5.36 17 5.89 4.48 5.80 10.44 83.23 105.89 92.68 81.54 62.48 77.77 85.99 86.25 6.08 10.. 5.23 10 4.40 5.72 5.70 10.0 82.38 105.87 92.53 80.49 61.34 76.25 85.99 85.48 5.24 6.17 3 4.43 5.72 5.76 10.21 83.11 105.54 92.39 81.18 82.95 76.25 87.56 86.38 Jan. 27__ 6.11 4.42 5.25 5.60 5.69 Jan. 27 9.8 63.11 75.09 88.23 86.64 82.99 105.03 91.81 81.07 20__ 6.12 529 4.45 20 5.55 5.67 9.8 13__ 83.85 105.54 92.25 81.90 64.31 75.71 89.17 87.58 5.26 6.05 4.42 13 548 5.60 9.6 71.96 61.56 88.23 79.34 86.38 81.66 90.69 5.37 6.27 104.85 4.46 6 9.9 5.55 5.69 85.10 106.07 93.26 81.90 68.04 84.47 89.31 90.27 Low 1933 6.05 4.39 .5.19 High 1933 6.47 5.40 9.6 74.15 97.47 82.99 71.87 53.16 69.59 71.96 78.44 High 1933 6.98 5.96 4.91 6.97 6.35 11.1 Low 1933 67.86 78.99 87.69 Low 8.5.61 82.62 103.99 89.72 78 55 1932 6.34 5.44 4.51 BWIs 1932 5.59 5.75 9.8 9.23 57.57 85.61 71.38 54.43 37.94 47.58 65.71 62.09 High 1932 7.03 5.75 Low 1932 8.11 15.8 7.66 Yr. . AgoYear Ago8.86 6.70 5.62 7.38 7.85 15.1 May 26 1932_ _ 60.01 87.30 74.67 56.77 39.93 50.47 68.13 64.15 May26'32 2 Yrs. lo, Two Years A so4.75 5.73 4.36 4 OR A .10 74 May 27 1931_ _ 88.10 106.60 100.00 85.87 67.95 85.99 96.39 82.62 May27'31 • Note.-Theno prices are computed from average yield on the basis of one "Ideal" bond 44(% ooupon, maturing in 31 years) and do not purport to show either price quotations. They actual merely average movement of or the serve to comprehensive level way average Illustrate In a more the the relative relative levels and she movement of yield averages, the latter being the truer picture of the bond market. bonds used in computing these indexes was published in the • Chronicle" on Jan. 14 1933. page 222. For Moody's Index of bond pries, t The last complete list of by months back 10 1928, refer to the "Chronicle" of Feb. 6 1932, page 007. 3606 Financial Chronicle May 27 1933 THE OPENING OF THE NTERNATIONAL EXPOSITION AT CHICAGO, ILLINOIS "A Century of Progress" in the Theatre of the World Gala Day at Chicago Exposition—Opening of addition, it appears from a summary contained in World's Fair by Postmaster-General Farley, , special advices to the New York "Times" that Representing President Roosevelt. founder members gave $1,000,000 and the organizaIn earlier issues of our paper we have given various tion floated a bond issue for $10,000,000, all of which details regarding the Century of Progress—Chicago's was spent on buildings and exhibits. The Federal World's Fair of 1933. These items have appeared Government's outlay on its impressive building was weekly since the initial account in our issue of $1,000,000, and surrounding it is the triangular Hall of States, for which various commonwealths apMay 6, page 3045. To-day, May 27, will signalize the formal opening propriated $2,000,000. The remainder of the $25,000,000 has been invested of the huge exhibit, which occupies more than 400 acres along the shore of Lake Michigan. The Ex- by industry in buildings, exhibits and concessions. position will be dedicated by Postmaster-General For the admission price, 50 cents for adults and 25 James A. Farley, who will act as the representative cents for children, one may visit more than 50 of President Roosevelt. Mr. Farley, who is expected buildings, or 85% of the total investment. to arrive in Chicago by train about 10 a. m. to-day, will be escorted by the Black Horse Troop to the Harvey S. Firestone Expects Recovery in Business as a Result of Chicago Fair. line of march of the parade in Michigan Avenue. The Chicago 1933 World's Fair will be one of the greatest The parade of 10,000 men and women, comprising aids in bringing about an early recovery in business. This Army, Navy and Marine Corps units, civic, patriotic was expressed by Harvey S. Firestone, Chairman of the and fraternal organizations, and nationality groups, Board of Directors of the Firestone Tire & Rubber Co., will form at 9:30 near Chicago and Michigan Avenues, on Friday, May 19, when he had made an inspection of and half an hour later will start the three-mile march the Fair and of the Firestone exhibit. In speaking of the Fair, Mr. Firestone said: "This Fair to Soldier Field on the Exposition grounds. As is the greatest show I have ever seen. All over the country Mr. Farley enters the stand at the north end of the people are making plans to come to Chicago this year to Field a salute will be fired from Northerly Island see it. I am sure it will be one of the best aids in. helping and flags around the arena will be unfurled while business to get back to normal." Mr. Firestone and his son Russell gave a demonstration of the National anthem is played. His dedicatory how tires will be made at the Firestone exhibit. The main address is scheduled for noon. He will be introduced feature of the Firestone exhibit is the tire production line by Rufus C. Dawes, President of the Exposition, who where visitors to the Fair will see crude rubber will preside. Governor Henry Horner and Mayor automobile tires. The line will be operated made into by a picked Edward J. Kelly will also speak. crew of 10 men. After the ceremony, starting the Exposition on its In the party were: J. W. Thomas, President of the five months of activity, Mr.Farley will inspect theFair. company; L. R. Jackson, Vice-President, and C. D. Smith, In the evening the first flooding of the building who will be in charge of the exhibit. Daniel H. Burnham, Vice-President and Secretary of A Century of Progress, exteriors by the unusual lighting effects will take escorted the group through the grounds. place during the Arcturus ceremony. A ray of light from Arcturus, 40 light years from the earth, which The United States Steel Corporation Exhibit. started from the star about the time of the last The spectacle of a huge converter pouring out its white-hot Chicago World's Fair, will be captured by the use of contents in a blazing torrent of molten metal, with flames the photo-electric cell or "electric eye," and its energy licking out, sparks flying, smoke billowing up, is one which harnessed to throw switches controlling the lights. up to now only a comparatively few persons have seen. But to every visitor at A Century of Progress who views the The Fair has been rapidly carried to completion. United States Steel exhibit, this, as well as a score of other Employing 5,000 men in the hurried weeks which have colorful episodes in the drama of steel making, will be a preceded its opening, A Century of Progress Ex- memorable sight. position, organized as an Illinois corporation, not for No little mystery surrounds the methods by which the profit, in January 1928, represents an investment of great model converter, which is the major display of the $25,000,000, none of which comes from the municipal steel exhibit, has been made so realistic in its performance of what is said to be the most spectacular process in moderr tax chests. industry. When the lights in the great hall are dimmed Many of the details entering into the display have the giant converter, high above the heads of the crows, already been enumerated in these columns. In begins to tip, and what appears to be actual white-hot Volume 136 A Century of Progress metal cascades down in a gleaming stream of fire from its smoking maw. Forming a part of the central display, realistic and exactly proportioned models of ocean liners, automobiles, great steel bridges, skyscrapers, locomotives, machines—all kinds of steel-made products—are grouped about the base of the converter. Immediately following the dramatic tipping of the converter, as the stream of its contents disappears, these models are outlined in detail by concealed lights focused on them. It is as though the white-hot metal had been cast instantly and invisibly into an array of familiar products made of steel. As the visitor walks past the towering bulk of the major display to begin his tour of the steel industry, his first sight is of an open pit ore mine—a great red gash in the earth's surface from which the raw ore is being scooped and loaded into waiting gondola trains, which transport it to huge squat ore boats in the harbor for its journey to the mills. Next is a blast furnace in full operation, with the metal, already a glowing, fiery liquid, being drawn from its blazing interior. Then is seen an open-hearth furnace, the modern method of making fine steel. Another few steps along and the white-hot steel is seen in the slabbing mill, which shapes the hot ingot into slabs and passes it along for further refinement. Next comes the rolling-mill, where powerful rollers grip the slabs and flatten them. More closely allied to every-day life are the industrial settings which follow, depicting steel in its services to mankind. Here are seen the essential roles steel plays in all industry—steel in transportation, steel in the air, steel on the sea, steel in the home and on the farm, steel in industry and commerce and construction. These displays give a swift and comprehensive bird's-eye view of the manifold ways in which steel, the basic metal, has contributed to the progress of these essentials of every-day life. And in the background of each of these displays unfolds, as though by magic, the story of that progress, step by step, throughout the past century. In one section of the great hall there is a display which attracts unusual interest. There, encased in glass, are large bins. In each bin is a familiar material—coal, limestone, iron ore and other raw materials. In front of these tons of material is a single piece of finished steel weighing one ton. There is the story of steel in a glance—from tons of varied raw materials comes only a single ton of steel. Shining and glittering under the hall's bright lights, placed like jewels against a black velvet background, are the stainless steel display pieces. This new metal, the possibilities of which are just beginning to be realized, is presented in an array of products which range from stainless kitchen pots and pans to equally stainless industrial units. Housed in the northern wing of the General Exhibits Building, this presentation of the subsidiary companies of the United States Steel Corporation packs drama, excitement,interest and instruction into the story of steel's progress in A Century of Progress. Financial History of A Century of Progress— A Correction. Hathaway Watson coirecting an from Mr. following The error which crept into the article on the financial history of the Century of Progress Exposition prepared by Lenox R. Lohr, the General Manager of the Exposition, and which appeared in our issue of May 6, is self-explanatory. Chicago, May 10 1933. Mr. Lenox R. Lohr, General Manager Century of Progress Chicago, Illinois. Dear Mr. Lohr: In an article appearing over your signature in the "Commercial & Financial Chronicle" of May 6, page 3045, you 3607 make the statement "Through provision in the trust indenture the guarantors purchasing notes at par and accrued interest were released from their guarantee up to the amount of notes purchased." I think you will find that you are incorrect when you make the statement in this way. The trust indenture actually provides that guarantors will be released from their guarantee by presenting notes to the trustee for stamping. The exact wording of Article IIV of Section 2 having to do with this matter is as follows: Any guarantor shall be privileged at any time prior to the date when the principal of the notes hereby secured shall have become or been declared due and payable to present to the Trustee notes hereby secured belonging to such guarantor of a principal amount equal to or less than the amount of his guaranty and to direct the Trustee to stamp, and the Trustee shall stamp, both on the filing and on the face of said notes the following endorsement: This note is no longer entitled to the benefit of the guaranties mentioned hi the indenture securing the same, but is entitled to the benefit of all other security provided by said indenture. and the Trustee shall return the notes so stamped to said guarantor, and thereupon (a) the notes so stamped as aforesaid shall not be entitled to the benefit of any of the guaranties but shall in all respects be entitled to all other security provided for by this indenture, and (b) such notes so stamped as aforesaid shall not be included in computing the outstanding notes to which the unreleased guaranties are applicable, and (c) such guarantor shall be released from his guaranty in an amount equal to the principal amount of the notes so stamped as aforesaid and shall be entitled to receive a memorandum signed by the Trustee substantially in the form following: You have this day presented to the undersigned "A Century of Progress Guaranteed Gold Notes" in the principal amount of $-- with the request that the undersigned stamp thereon, and the undersigned has stamped thereon, a notation to the effect that said notes are no longer entitled to the benefit of the guaranties mentioned in the trust indenture under which said notes were issued, and by virtue thereof, as provided in said trust indenture, your guaranty of date--in the sum of $ respecting said issue of notes is released in the amount of$-. This instrument is executed by the undersigned as trustee pursuant to an express direction to that effect contained in said trust indenture, and upon the express understanding, to which you assent, that the undersigned does not assume any responsibility for the validity or effect of this instrument or of the action hereinbefore recited. Dated Central Trust Co. of Illinois Trustee. By In other words there is no obligation on the part of the guarantor to pay par and interest for his notes so tendered. As a matter of fact within 60 days notes bought at 50 have been tendered and the guarantors released to the par amount of the notes tendered. I feel that you should advise the "Chronicle" of your error and give them the opportunity to correct your statement. Yours very truly, (Signed) HATHAWAY WATSON. Huge Auto Exhibit of General Motors Opened at Chicago Exposition—New Economic Hope Born, Says Alfred P. Sloan, Jr. With the dedication on May 24 of the General Motors Corporation's $1,600,000 exhibit at the World's Fair at Chicago, Alfred P. Sloan, Jr., President, said the Century of Progress Exposition was at an opportune time. He observed that "it is fitting that this international Exposition should be held concurrently with the birth of a new hope for the economic future and the birth of a new spirit throughout the world of industrial and social co-operation." This social and spiritual revival he characterized as even more important than the scientific developments of the last century. "The greater progress," he called it. He stood before a statue of an artisan by Carl Miles, Swedish sculptor. It was made known in Chicago advices to the "Times" that leaders in science, education, industry and politics talked briefly at a luncheon, and then saw the wheels of an automobile assembly plant started by a cosmic ray with apparatus devised by Dr. Arthur H. Compton of the University of Chicago. The paper from which we quote also stated that Mr. Sloan's address was broadcast. Five foreign consuls then spoke to the listeners of their countries. They were Lewis E. Bernays, Great Britain; Hugo F. Simon, Germany; Giuseppe Castroceio, Italy; Rene Weiller, France, and Sebastian de Domero, Spain. A Century of Progress Mayor Edward J. Kelly invited the world to accept the hospitality of the city. Historic and picturesque events depicting the great progress in modes of travel will be portrayed in a "Wings of a Century" at A Century of Progress. Every known method of transportation, from the Indian travois and the rumbling ox-drawn cart to the luxurious trains and air liners of to-day, will be represented in this unusual spectacle, staged and presented by experts in the presentation of tableaux. The presentation will take place in a theatre on the shore of Lake Michigan opposite the Travel and Transport Building, one of the most striking buildings on the Exposition grounds. The dominant idea of the pageant will be pulsating and vibrant energy, driving the pioneers westward, to be brought out in the rhythmic tread and movement of the actors. Increasing tempo and speed in the method of transportation from 1700 to 1933, to be emphasized by percussion instruments in the band, will be a feature of the show. Virtually the entire pageant will be in pantomime with occasional dialogue building up the drama and local color of each episode. The stage is constructed in three parts. The first shows the highway or foresta.ge, a wide, level road stretching bebetween the audience and the actual stage, with sunken railroad tracks on which trains and vehicles will cross during the interludes. No scenery will be used on the roadway. There will be running comment by one or more narrators upon the events as they unfold. The second phase of the stage will be an elevated embankment or a raised area, two feet higher than the road, and approached at an easy grade over which vehicles and animals will move during the scenes. Settings will be used on the main stage during the scenes only. The boat runway, or rear stage, completes the huge scene of action. This consists of a narrow section of land beside the Lake, over which ships mounted on trucks will move. They will be so masked, however, that the spectator will have the illusion of ships passing over the water or coming to anchor. In the cast will be men, women, children, Indian squaws, Indian riders, Indian children and negro singers, a total of 150 performers. The order of the scenes, preceded by a prologue called the "Indian Retreat" shows "Little Old New York" first. Following is Interlude I showing scenes along the Erie Canal, with barges drawn by mules and horses. Scene II is entitled the "Baltimore Clipper," showing the arrival of a huge clipper ship in the harbor of the Maryland city. Picturization of "Little Old New York" will show the crudeness of the frontier fading before the sophistication of the town. Before a coffee house of Washington's time, and beside the early 19th century docks, stroll people in their Sunday clothes. The atmosphere is busy, cheerful and gay. Urban luxuries and social niceties have displaced the primitive customs of the frontier. Interlude I, "On the Erie Canal," will show a homely canal boat, depicting the simplicity of family life on board, emphasizing its humorous side. Then will appear a more elaborate passenger boat, portraying traveling in its liveliest and most entertaining moods of that period. The action takes place on the forestage. Competition between the first steam engine and a horseear depict the famous "Tom Thumb" race. Crowds are seen on either side of the rails cheering the contestants. The race ends with the engine beating the horse-drawn vehicle. Then follows a procession of such famous early engines as the "Jefferson," "DeWitt Clinton" and "John Bull." These illustrate in turn the development of the engine bell, the steam whistle and the cow catcher. May 27 1933 Scene III will portray the great "Gold Rush" of 1849 and the incidental perils of "The Oregon Trail." Pioneers in Conestoga wagons come upon the stage. The gaunt men and women reflect the sufferings and privations through Which they have gone in the long trek across the wilderness, beset by hostile Indians and other perils. "The Overland Mail," another thrilling pieturization of this heroic period in American history, is Interlude II. The date is 1852 when the forty-niners in California receive their first mail from relatives back in the East. Interlude III is a scene at Promontory Point, Utah, where workers lay the last pieces of track for the Transcontinental Ry. This dramatic portrayal signifies the birth of nationalism and the end of isolation and sectionalism. The mood is one of reverence because of the significance of the event. Then comes the "World's Columbian Exposition" of 1893, just 40 years ago. The entrance to the old Fair grounds is shown with the Transportation Building in the background. The atmosphere reflects the spirit of the gay 90's. People arrive in all types of early vehicles—the brougham, victoria, phaeton, buckboard, rockaway, high-wheel bicycles and horse-car. Interlude IV depicts the age of the "Horseless Camige," dating from 1893 to 1900. The scene is along Michigan Boulevard in the gay 90's. A crowd of fashionably dressed people are out for a stroll. Following the "horseless carriage" age comes Scene V,"Kitty Hawk," bringing back to memory that little town in the sand dunes of North Carolina where the Wright brothers made their first successful flight in a heavier-than-air machine, paving the way for the future development of the airplane. Then comes the final scene in this historic pageant. It is "A Century of Progress" or "A Trip to Mars," a fantasy of rare brilliance. The modern buildings of the Exposition are shown with stress on the Travel and Transport Building. A huge mechanical device is mounted in the center of the stage,from which a catapult to Mars is shot off. There is an assembly of all modern transportation, including an ocean liner, trucks and buses, automobiles and trains. The entire cast gathers to witness the send-off of the first passenger plane to Mars. An airplane arrives with a message from President Roosevelt wishing the inter-planet transportation success. New York visitors to Chicago's 1933 World's Fair will find at least one delightful spot that they will readily recognize as "home" in the New York State exhibit in the States Building on Northerly Island. Here, nestling tranquilly apart from the hubbub of the crowd and the massive modern buildings which characterize the Exposition, is an exact replica of an Adirondack bog garden, resplendent M verdant foliage and true to the very turtles and frogs and the moss underfoot. Indeed, this is more than a mere replica, for every shrub, every tree, every stick and stone and fallen leaf has been brought from the mountains of the Empire State. The visitor will enter the garden through the halls of the State exhibit, upon whose walls is an impressive panorama of some of the world's largest photographic murals, the• creation of Edward Steiehen of New York City. Among these giant photos, 18 feet high, which attempt to show that New York is an agricultural and resort area, as well as an industrial and commercial State, are pictures of woodland waterfalls, mountain lakes, great forests and rich farms. The visitor passes between two huge modern panoramas by the artist Joseph Urban out into the open air, which he is conscious of an almost breath-taking change as he steps upon an old corduroy road that winds into the peace and quiet of a mountain garden retreat. volume 136 A Century of Progress In the garden, which covers 6,200 square feet, are more than 150 varieties of trees and shrubs native to the Adirondack Mountains. There are white pine, swamp maple, mountain ash, larch, hemlock, red spruce, paper birch and other woodland denizens, all growing in their natural environment. On the edges of the brooks running through the park is seen a purple and green carniverous flower, a member of the orchid family, that lives on flies and bugs which it swallows after attracting them by its viscous juices. Along the path are little ponds with water plants; turtles and frogs sun themselves on floating logs and ancient stumps. There is an abandoned lumber camp, with an old log skidway. Everywhere the thick foliage harbors birds, already more than 15 varieties of which have settled in the garden, among them cardinals, catbirds, goldfinches, thrushes, orioles and woodpeckers. At one end of the garden is a real peat bog,dug six feet deep, and filled with humus,black earth and water. On a little rise overlooking the bog, a rustic picnic table invites rest and relaxation. The visitor is able to visualize clearly the tremendous scope of A Century of Progress here in the States Building, when he discovers that only a few steps will take him from this garden spot of the Northeast to the redwood forest of the California exhibit or the tropical garden of Porto Rico. Speed has been the watchword of the construction crews rushing dozens of buildings to completion for the opening of the World's Fair in Chicago May 27. But few, it any, of these structures which have sprung mushroom-like in Burnham Park during the past few weeks can equal the record of the Spoor Spectaculum at the foot of 23rd Street on Northerly Island. On May 4 the first steel work was begun on this $150,000 theatre, containing accommodations for 1,250 and housing the world's largest moving picture screen. On Sunday, May 20, the keys were turned over to 3609 George K. Spoor, father of the project,7according to the architects, A. Ervin Nicolai and R. Vale Faro. In the Spectaculum, visitors to the Fair will view the mighty, awe-inspiring spectacle of Niagara Falls, in threedimensional pictures—pictures that have depth as well as width and breadth. Special improved sound apparatus will record every roar and rumbling of the giant cataract, sacrificing none of the wild splendor of the scene. Under the direction of George K. Spoor, who was the first man to project motion pictures on the screen back in the 90's, a crew of sound technicians and cameramen flew out over the Falls May 19 and made an accurate recording by picture and sound for reproduction at the Fair. This work was the final step in a $4,000,000 venture— the production of "natural vision" motion pictures with sound. The pictures, to be thrown on a silver screen 64 feet wide and 40 feet high, eliminate distortion of figures, regardless of the angle at which they are viewed. The sound recording is a special invention of Spoor's which gives the full tonal range from the highest to the lowest notes. It is out on the edge of the film instead of on the surface, and employs the "hill and dale" system of cutting. Spoor has been a pioneer in the motion picture business since its infancy. In 1894 he projected moIon pictures on a screen for the first time. From this start he founded the Essanay Co. and introduced a galaxy of film stars, among them Charlie Chaplin, Gloria Swanson, Wallace Beery and Henry B. Walthall to the world. At the suggestion of his friend, the late Thomas A. Edison, who said that the motion picture industry needed "new shut tools" if it was to make further progress, Spoor in 1919 since and studios down producing operations at his Essanay that time has focused his attention exclusively upon the development of natural vision pictures with sound. Now, with Glenn C. Hayes and Percy A. Robbins of Chicago as his associates, he is ready to introduce his product to World's Fair visitors. Indications of Business Activity THE STATE OF TRADE—COMMERCIAL EPITOME. Friday Night, May 26 1933. One of the important events of the week was the resumption of the campaign for credit expansion by the Federal Reserve System. ;It had a very noticeable effect. At the same time business in general has been larger after a brief pause recently in some lines. The New York Federal Reserve has reduced its rediscount rate from 3 to 23/% and this was considered an event of capital importance as furnishing new evidence that the government means business in its credit campaign. On the 23rd prices advanced 1 to 6 points after another big advance earlier in the week. Stocks were up to the highest level in 14 months under the spur of the credit action and increases in trade. Both retail and wholesale trade is expanding. Among the industries cotton, woolen and worsted textiles and the boots and shoes are still in the lead but the iron and steel reports are very favorable and are attracting more and more attention as time goes on. For the whole country it is said that the steel production now averages 42% which is larger than it was two years ago and an increase it is said of some 200% since the upturn began in March and it is felt that the tendency is toward a still further increase. Everything gives promise of a further expansion in business generally. Railroad earnings tend to increase and favorable train loading reports come from the N. Y. Central and Pennsylvania. The production of electricity is increasing and each week shows some increase over the corresponding week of last year. Not only the stock market but the commodity markets have been active and at times very much higher. The international political news has been in the main favorable with the U. S. leading in efforts to establish permanent peace. Employment and wages here and there continue to show increases. This is becoming almost commonplace from week to week and is regarded as one evidence of the fact that the recovery in general business is something to be counted on. In fact, it is said that in no week during the last three years have the reports in regard to most lines of productive and distributive activity contained so many evidences of pronounced and stable gains. The increase in employment does not appear to be confined to any particular section. It is spread over the country and it is even said that more jobs are now available than at any time during the past two years. Railroad loadings of miscellaneous freight are nearly on a par with last years. The output of soft wood lumber is larger than a year ago. One factor which marks the expansion in industrial activity is the increase in production of bituminous coal. Retail sales are the largest thus far, keeping pace with the rise in wholesale orders. Retail sales of hardware are steadily gaining. The distribution of cotton goods during the past month has exceeded that of the same period in 1931 and 1932 and prices have advanced approximately 20% in that time. Ready-to-wear goods also sell more freely. In Chicago steel was the feature, with sheet mills operating at nearly 60%. A "State Street Day" stimulated business and greatly reduced supplies. In dry goods, too, there was a larger business. In Kansas City it looks as though the dollar volume of retail sales would exceed that of any reoent year since 1929. Transactions in securities and grain were much larger than those of a year ago. Live stock prices were at the highest prices seen for a year or more. Furniture prices are firmer. In Cleveland steel is moving ahead. The production is 54% in Cleveland, 43% at Youngstown and 24% at Pittsburgh. The output of tin plate mills is at very near full capacity. In St. Louis there is a general movement upward. All lines are cheerful. There is less unemployment. The decrease is not large, but 3610 Financial Chronicle May 27 1933 still there is some .decrease, which heartens trade. The as is insisted upon by the Exchange, by Aug. 23 or its output has increased of textiles and shoes and in some of securities will be removed from the listing. Bonds were the smaller concerns an increase in wages has taken place. more active, with all U. S. Government issues up. The Higher prices for products has encouraged the farming rest of the list was higher as a rule, particularly the bonds community to buy goods more freely in the country towns. of domestic corporations. German obligations were irregular. The large retail stores are having a much better trade. On the 25th prices closed generally lower althoug Prices of lead and zinc have been fairly steady and emh at one time during the session they were particularly bouyant. ployment in these lines has increased. In Minneapolis, Total sales were 4,008,000 shares. The feature of the trading trade in summer goods has been larger. Sporting goods was the action of the alcohol and kindred stocks based upon have a brisker sale. In the country districts trade conthe reiteration of the Administration's attitude toward protinued to be good. hibition repeal in the shortest time possible. After the close In Philadelphia, business continues to increase. The the announcement was made that the New York Federal industries are more active. Wages in some cases have been Reserve rediscount rate had been reduced from 3 to 23' %, increased 5%. The features are the metal and textile thus continu ing the Government's credit expansion policy. trades. The demand for goods is less exclusively for the Total bond sales were $15,070,000. Fluctuations were cheaper articles. In diamonds and jewelry, business is regular and the price range was narrow. United States irsaid to be somewhat better, though nobody expects any ernment Govs were somewhat lower. Foreign bonds had great activity. In Boston there is an active trade in the little decided trend. leading industries and prices in some cases are higher. Stocks There is noticeable activity in textiles and boots and shoes. ington to-day under the impetus of the news from Washthat a bill had been introduced in the House to repeal Wool has been firm at some further advance. The rise in the gold standard Act rose 1 to 10 points in trading of 4,346,wool in Boston in the last six weeks amounts to about 50%. 470 shares. Homestake Mining, a gold mining stock afIt is a fact, too, that many of the larger woolen and worsted fected directly by the legislation, and one of the strong spots, mills are producing close to full capacity and are sold well was 15 points higher at one time. United States Steel ahead into the summer. Most grades of cotton goods are was up 2% points while American Telephone and Americ an Can active and higher. Leather prices remain strong. A better were 33.i points higher. Bonds were generally higher with demand prevails for steel and metal products generally, and sales of $14,800,000. The fact that the Federal Reserve there is a larger demand for machine tools, hardware and System lumber. Southern trade reports are very cheerful. Wash- ment had purchased in excess of $25,000,000 of Governsecurities and a reduction in the Federal Reserve disington reported gains of 2.7% on railroad earnings over those count rate were the main reasons for the strength. for the same week last year, with gains in most classes of The weather during the week has been mostly pleasant freight. with rising temperatures of late. There were showers As to the stock market, on the 20th, after early hesitancy, early in the week. To-day it was 67 to 82 degrees here and the prices fell off toward the close and the net result of the day forecast was for showers to-night and to-morrow. was a sizeable decline in the averages. Total sales were Overnight Boston had 66 to 82, Baltimore 72 to 88, Pittsburgh only about half those of the preceding Saturday, being 64 to 80, Portland, Me., 54 to 72, Chicago 60 to 80, Cincin1,300,307 shares. Trade news continued to be bullish nati 66 to 86, Cleveland 66 to 80, Detroit 64 to 86, Milwith steel production around the 40% mark and ear-loadings waukee 56 to 82, Kansas City 60 to 74, St. Paul 58 to 80, well ahead of the same week last year, but the rank and file St. Louis 68 to 76, Salt Lake City 52 to 76, Los Angeles 58 of traders felt that a reaction was due and for a time, at to 80,Portland, Ore.,46 to 62,San Francisco 52 to 66, least, inflationary prospects are not to the fore. Business Seattle activity, also has been going against the seasonal trend for 48 to 58, and Montreal 62 to 78. some time, and there is arising an uncertainty as to how Loading of Railroad Revenue Freight Increasing. long it may continue in the present direction. Bonds were Loading of revenue freight for the week ended on May 13 generally lower except for United States governments, with totaled 531,095 cars, the car service division of the American sales of only $6,271,000. Some foreign bonds rose in spite Railway Association announced on May 20. The total for the of the general weakness, German issues,in particular showing week of May 13 this year was an increase of 7,276 cars above marked strength. the preceding week, and an increase of 13,835 ears above the On the 22d, trading slackened and total sales fell to 2,- same week in 1932. It was, however, a decrease of 215,962 223,460 shares for the full day. Prices eased off a small cars under the same week in 1931. Details follow: fraction as a rule. The market chose to center its attention Comparisons showed that all commodities for the week of May 13 showed increases over correspon the on the disagreeable side of the political news such as the ding week last year with the exception of merchandise less than carload lot freight which showed a prospective increase in taxes, income and otherwise, the reduction. Miscellaneous freight loading for the week of May 13 impending resumption of Senate investigation into Wall cars, an increase of 1,745 cars above the preceding week,totaled 198,811 and 6,610 cars Street's activities and the weakness in wheat. Bonds closed above the corresponding week in 1932. It was, however, a decrease of cars under the same week in 1931. irregularly, with total transactions of $12,151,000. United a02,616 Loading of merchandise less than carload lot freight totaled 164,374 cars, States governments were firm and rumors were rife of open an increase of 31 cars above the preceding week, but 17,188 cars below the market buying soon to be done by the Rederal Reserve corresponding week last year and 59,878 cars under the same week two years ago. banks. Grain and grain products loading for the week totaled 38,947 cars, a On the 23rd prices again advanced decisively with some decrease of 465 cars below the preceding week, but 10,421 cars the increased activity. Sales were 3,140,000 shares and many corresponding week last year and 2,455 cars above the same weekabove in 1931. the Western districts alone, grain and grain products issues showed gains of 1 to 6 points. The main cause for the In week ended May 13 totaled 26,360 cars, an increase of loading for the 8,448 cars above rise was attributed to the reports from Washington that the the same week last year. Forest products loading totaled 20,024 cars, 857 cars Federal Reserve banks were beginning to purchase Govern. above the preceding week, and 1,241 cars above the same week in 1932, but 13,843 cars meat securities, thus starting a new species of inflation. below the corresponding week in 1931. Ore loading amounted to 6,724 cars, an increase of 958 Commodities were strong, particularly in the case of grains week cars above the before, and 4,131 cars above the corresponding week in 1932 but and mid-week trade reports contrived to show an upward 5,151 cars below the same week in 1931. Coal loading amounted to 81,046 cars, an increase of 4,381 cars above the trend. Railroad buying of steel rails both immediate and preceding week, and 7,518 cars above the corresponding week in 1932, but cars below the same week in 1931. prospective was another bullish feature. Bond prices were 30,322 Coke loading amounted to 3,728 cars, 247 cars above the week, generally better with total sales of $11,860,000. U. S. and 712 cars above the same week last year. Compared withpreceding the same week two years ago, it was a decrease of 2,821 cars. Governments were strong. German issues were mixed with Live stock loading amounted to 17,441,cars, a decrease the preceding week, but 390 cars above the same week of 478 cars below last year. it was, Reich bonds off. however, a decrease of 3,786 cars below the same week two years ago. In the Western districts alone, loading of live stock for On the 24th the market kept up its advance and at the May the week ended on 13 totaled 13,827 cars, an increase of 674 cars compared with the same close the averages showed an upward range of nearly 2 W(1 isat year. All districts reported increases in the total loading of commodities points. The recent measures taken for the expansion of compared with the same week in 1932 except the Eastern.all Allegheny, and Central Western which reported reductions. All credit together with the continuance of favorable trade ductions districts reported recompared with the same week in 1931. Loading of revenue freight in 1933 compared with news were the main reasons ostensibly for the strength. years the two previous follows: The volume of trading was much heavier than on the previous day even though the advance was not so striking. 1933. 1932. 1931. Total sales of stocks were 4,707,400 shares and of bonds, Four weeks In January 1,910,498 2,268,771 2,873,211 Four weeks In February 1,957,981 $16,837,000. One occurrence that marked a rather new Four 2,243,221 2,834,119 weeks In March 1,841,202 2.936,928 2.280,837 departure was the notice given by the Exchange to the Five weeks in April 2,504,745 3,767,883 2,774,134 Week ended May 8 523,819 745,740 533,951 Chemic al & Dye Allied Corporation that it must comply Week ended May 13 531,095 747,057 517,260 with the request that such data be given the stockholders, Total 9.269,338 10.618.174 13.894,018 3611 Financial Chronicle Volume 136 The foregoing, as noted, covers total loadings by the railroads of the United States for the week ended May 13. In the table below we undertake to show also the loadings for the separate roads and systems. It should be understood, however, that in this case the figures are a week behind those of the general totals-that is, are for the week ended May 6. During the latter period a total of 66 roads showed increases over the corresponding week last year, the most important of which were the Southern By. System, the New York Central RR., the Chicago Milwaukee St. Paul & Pacific By., the Louisville & Nashville RR., the Chesapeake & Ohio Ry., the Chicago & North Western Ry. and the Norfolk & Western By. REVENUE FREIGHT LOADED AND RECEIVED FROM CONNECTIONS (NUMBER OF CARS)-WEEK ENDED MAY 6. Total Loads Received from Connections. Total Revenue Freight Loaded. 1932. 1932. 1931. 1933. 1,642 2,800 7,100 932 2,330 9,638 656 2,015 3,039 7,890 711 2,663 10,754 660 1,774 4,014 10,556 849 3,424 14,099 730 296 4,397 8,995 2,119 2,174 10,865 920 458 4,913 10,035 2,373 2,632 11,588 1,175 25,098 27,732 35,446 29,766 33,174 4,274 7,596 10,002 218 1,323 6,594 1,855 17,533 1,761 338 267 5,705 8,277 11,552 238 1,422 7,533 1,505 17,342 2,038 322 419 6,744 10,293 13,599 229 2,111 9,926 2,236 25,820 2,227 672 481 5,755 5,346 12,146 1,650 952 6,399 33 22,737 1,813 28 174 6,572 5,365 12,071 1,982 978 6,574 21 25,272 2,074 55 247 51,761 56,353 74,338 57,033 61.211 434 1,168 7,363 20 291 271 1.394 2,965 5,824 2,933 3,920 4,121 3,382 1,025 4,866 2,675 629 1,154 7,243 46 247 189 1,718 2,702 5,887 3,534 4,190 4,389 3,432 716 5,046 2.101 631 1,891 10,352 80 488 304 2,225 4,756 8,592 4.710 5,210 6,326 5,374 1,750 6,417 3,677 791 1,650 8,871 39 90 1,494 765 4,919 6,827 167 6,905 3,547 3,893 656 6,559 2,412 952 1,544 8,848 80 102 1,805 048 5.310 7,348 184 7,349 3,396 3.915 668 6,895 1,837 42,652 43,123 62,783 49,585 51,181 Grand total Eastern District._ 119,511 127,208 172,687 136,384 145,566 Allegheny DistrictBaltimore & Ohio Bessemer & Lake Erie Buffalo Creek & Gauley Central RR.of New Jersey.... Cornwall Cumberland & Pennsylvania_ -Ligonier Valley Long Island Pennsylvania System Reading Co Union (Pittsburgh) West Virginia Northern Western Maryland 22.874 1,276 218 4,606 548 154 54 990 50,078 10,478 2,945 50 2,506 24,857 956 142 6,308 45 171 70 1,239 53,698 12,622 3,558 49 2,958 33,805 2,393 167 9,333 2 374 108 1,373 77,452 16,237 8,492 45 3,466 11.736 770 5 9,125 35 23 11 2.434 29,715 13,512 844 3 3,341 11.435 816 2 9,637 42 12 29 3.432 30,564 14,226 587 1 3,244 153,247 71,554 74,027 1933. Eastern DistrictGroup A: Bangor & Aroostook Boston & Albany Boston & Maine Central Vermont Maine Central New York N. H. & HartfordRutland Total Group B: Delaware & Hudson Delaware Lackawanna 4, West, Erie Lehigh de Hudson River Lehigh & New England Lehigh Valley Montour New York Central New York Ontario & Western_ Pittsburgh & Shawmut Pitts. Shawmut & Northern_ __ _ Total Group C: Ann Arbor Chicago Ind. & Louisville Cleve. CM. Chic. & St. Louts Central Indiana Detroit & Mackinac Detroit dr Toledo Shore Line.Detroit Toledo & Ironton Grand Trunk Western Michigan Central Monongahela New York Chicago & St. Louis_ Pere Marquette Pittsburgh & Lake Erie Pittsburgh de West Virginia.... Wabash Wheeling & Lake Erie Total Total Pocahontas DistrictChesapeake & Oblo Norfolk & Western Norfolk & Portsmouth Belt Line Virginian Total Southern DistrictGroup A: Atlantic Coast Line Clinchfield Charleston & Western Carolina_ Durham & Southern Gainesville & Midland Norfolk Southern Piedmont & Northern Richmond Frederick. & Potom_ Seaboard Air Line Southern System Winston-Salem Southbound_ -- 96,777 106,673 16,687 13,027 1,341 2,425 16,243 12,571 1,626 2,485 20,527 16.966 1,658 3,323 7,419 3,115 1,995 622 6,040 3,314 1,329 570 33,480 32,925 42,374 12,251 11,253 8,377 836 402 156 40 1,440 478 317 7,199 18,471 166 8,106 780 375 134 55 1,502 472 294 7,166 17,973 180 12,780 1,282 537 149 76 1,943 540 497 9,580 24,489 201 4,044 1,236 970 311 95 1,121 790 3,987 3,302 11,271 666 3,512 1,013 662 250 71 1,020 664 3,629 2,682 9,244 641 Total 37,882 37,037 52,074 27,793 23,388 * Figures of preceding week. zEstimated. y Includes in Gulf Coast Lines. Federal Reserve Board's Summary of Business Conditions in the United States-Increase in Industrial Activity-Factory Employment and Payrolls Also Increase. The Federal Reserve Board, in its summary of business conditions in the United States, issued May 24, reports that business improvement, which started in April, continued during the first three weeks of May, with wholesale prices of many leading commodities also advancing. The Board found that the improvement was particularly noticed in the latter part of April and the early part of May. Following the imposition of the embargo on gold, says the Board, the exchange value of the dollar declined and on May 20 was 87% of its gold parity. The review of the Board likewise said: The volume of industrial production, as measured by the Board's seasonally adjusted index, increased in March from 61% of the 1923-1925 average to 67% in April, compared with 63% a year ago and a low of 58% last July. Railroads. Group B: Alabama Tenn. & Northern.-Atlanta Birmington & Coast._ Atl.& W.P.-West.RR.of Ala Central of Georgia Columbus & Greenville Florida East Coast Georgia Georgia & Florida Gulf Mobile & Northern Illinois Central System Louisville & Nashville Macon Dublin & Savannah.... _ Mississippi Central Mobile & Ohio Nashville Chatt. & St. LouisNew Orleans-Great Northern__ Tennessee Central Total Revenue Freight Loaded. Total Loads Received from Connections. 1933. 1932. 1931. 164 722 652 3,663 166 1,429 781 361 821 15,459 14,152 106 145 1,903 2,861 530 316 182 623 658 3,503 189 938 758 279 632 16,067 13,695 120 112 1,880 2.884 476 416 212 854 724 4,047 261 2,069 1,039 346 938 22,448 21,110 128 184 2,527 3,465 660 576 160 597 1,008 2,205 172 535 1,441 325 645 6.974 3,861 399 231 1,557 2.481 310 491 1933. 1932. 132 595 763 1,907 147 486 1,103 268 584 6.853 3.192 296 172 1,081 1,924 269 443 44,231 43,412 61,588 23,392 20,215 Grand total Southern District._ 82,113 80,449 113,662 51,185 43,603 Northwestern DistrictBelt Ry. of Chicago Chicago & North Western Chicago Great Western Chic. Milw. St. Paul & Pacific_ Chic. St. Paul Minn.& Omaha_ Duluth Missabe & Northern... Duluth South Shore & Atlantic_ Elgin Joliet dc Eastern Ft. Dodge Des M.& Southern. _ Great Northern Green Bay & Western Minneapolis & St. Louis Minn. St. Paul dr S. S. Marie__ Northern Pacific Spokane Portland & Seattle.-- 745 13,897 2,286 16,990 3,575 3,439 313 3,736 282 7,248 505 1,879 4,127 7.061 *907 1,490 13,529 2,234 15,536 3,041 422 286 3,411 290 6,850 511 1,630 3.920 7,159 1,148 1,459 20,198 2,895 22,004 4.198 1,875 911 5,654 408 9,729 683 2.602 5,649 9,718 1,290 w w ow.qwwwwolowwvowow 0 o-4.p.-4.-coow-4-4000ww Railroads. 1,708 7,206 1,928 5.765 2,895 79 357 3.162 112 1,855 414 1,260 1.837 2,066 732 66,990 61.457 89,273 33,674 31,376 17,396 2,969 156 13,549 10,969 2.136 669 1.325 165 976 404 151 12,982 260 412 10,515 252 1,174 17,619 3,071 126 14,224 11,695 1,932 819 1,496 115 1,009 484 123 14,286 224 298 11,696 185 1,524 24,950 3,695 190 19,969 16,262 2,719 1,082 2,341 267 990 734 154 20,491 328 256 14,788 166 1.753 4,412 1,417 21 5,467 5,036 1,738 642 1,782 11 796 206 71 2,759 303 935 6,145 7 1,308 3,822 1,509 20 5,094 5,870 1,742 670 2.254 10 574 219 33 3,320 201 631 6.524 6 1,451 76,460 80,926 111,125 33,056 33,950 113 131 105 2,661 155 115 152 2,744 271 182 175 x2,816 2,808 334 129 838 2,172 342 125 919 4,640 71 1,378 1,192 125 479 74 4,379 11,827 53 115 7,119 2,502 -5.487 4.315 1,698 24 1,90 204 1,467 1,007 109 452 60 4,224 12,127 39 84 7,100 1,957 5-.988 337 2,078 1,638 240 731 105 5,337 17,368 46 127 9.860 2,753 1-,934 939 1,263 586 638 243 244 2.193 7,309 11 95 3.110 1,490 1,96.1 . 584 1,166 912 302 212 289 2,204 6,329 8 55 2,712 1,844 6iii ,2.878i 5,220 3,235 2,337 2.084 45 28 2.59i 3.038 1,728 37 48.488 44.313 Total Total Central Western DistrictAtch. Top.& Santa Fe System_ Alton Bingham & Garfield Chicago Burlington & Quincy Chicago Rock Island de Pacific_ Chicago & Eastern Illinois...-. Colorado & Southern Denver & Rio Grande Western_ Denver dr Salt Lake Fort Worth & Denver City-Northwestern Pacific Peoria & Pekin Union Southern Pacific (Pacific) St. Joseph & Grand Island.... Toledo Peoria & Western Union Pacific System Utah Western Pacific Total Southwestern DistrictAlton & Southern Burlington-Rock Island Fort Smith & Western Gulf Coast Lines yHouston & Brazos ValleY International-Great Northern Kansas Oklahoma & Gulf Kansas City Southern Louisiana & Arkansas Litchfield & Madison Midland Valley Missouri dr North Arkansas Missouri-Kansas-Texas Lines.Missouri Pacific Natchez & Southern Quanah Acme Sc Pacific St. Louis-San Francisco St. Louis Southwestern YSan Antonio Uvalde Sc Gulf_ Southern Pacific in Texas & La. Texas & Pacific Terminal RR. Assn. of St. Louis Weatherford 31in. Wells & N.W Total 5,i8" - 3 3,106 1.665 13 63.492 32.789 29.032 Activity at steel mills increased from 15% of capacity in March to 25% In April, and there was a further gain the first three weeks of May. The increased activity in the steel industry reflected chiefly increased demand from automobile producers and from miscellaneous sources, while demand from the railroads and construction industries continued at low levels. At textile mills and shoe factories production increased considerably, while the output of petroleum, which declined in the middle of April, increased later to a higher level. The Board also said: The volume of factory employment and payrolls increased between the middle of March and the middle of April by an amount somewhat smaller than the decrease in the preceding month. The value of construction contracts continued at previous low levels in April, but showed a considerable increase in the first half of May. Total value of awards in these'six weeks was considerably smaller than in the corresponding period a year ago. Distribution. Freight traffic, which was at a low level in March, increased during April and the first two weeks of May by more than the usual seasonal amount. reflecting chiefly large increases in shipments of miscellaneous products, grains and live stock. 3612 Financial Chronicle Department store sales increased sharply from March to April and the total for these two months showed slightly more than the usual seasonal Increase over the volume of sales in January and February. Wholesale Prices. During April, particularly in the latter part of the month, there were substantial Increases in the wholesale prices of grains, flour, sugar, textile raw materials and finished products, hides, pig iron, non-ferrous metals and rubber. Prices of most of these commodities continued to advance rapidly in the first two weeks of May, and showed little change in the third week of the month. Prices of live stock, which did not advance in April,increased considerably in the first three weeks of May. Silver prices after advancing by a substantial amount in the latter part of April, subsequently showed a decline, and petroleum prices also were reduced. During the four weeks following the imposition of the embargo on gold the exchange value of the dollar declined to 83% of its gold parity on May 5. but subsequently rose to 87% on May 20. The noon buying rate on cable transfers on the French franc rose from 3.98 cents on April 18 to 4.50 cents on May 20, and the rate on the English pound rose from $3.49 to $3.87. Bank Credit. During the four weeks ended May 17 about $215,000.000 of additional currency was returned to the Reserve Banks, and on that date all but $200,000,000 of the $1,930,000,000 withdrawn by banks and individuals between Feb. 1 and March 13 had been returned. Funds arising from the return of currency during the four-week period were used to reduce Reserve Bank holdings of acceptances by an additional $130,000,000 and to liquidate $85,000,000 of member bank indebtedness at the Reserve Banks. As the result of an addition of about $100,000,000 to the Reserve Banks holdings of gold, and a further reduction of Federal Reserve notes in circulation, the reserve ratio of the Reserve Banks rose considerably between April 19 and May 17. The decline in Federal Reserve notes reflected in part an increase of $50,000,000 in Reserve Bank notes in circulation. Loans and investments of reporting member banks in New York City increased by about $400,000,000 between the middle of April and the middle of May, reflecting chiefly a growth of $200,000,000 in loans on securities, and of 9140,000,000 in investments in United States Government securities. Net demand deposits also increased by about $400,000,000, of which about one-third represented a further growth of bankers' balances. Money rates in the open market continued at low levels. Retail Food Prices in United States Declined About 0.1 of 1% on April 15 as Compared with March 15 1933. Retail food prices in 51 cities of the United States, as reported to the Bureau of Labor Statistics of the United States Department of Labor, showed an average decrease of about .1 of 1% on April 15 1933, when compared with March 15 1933. and an average decrease of about 12%% since April 15 1932. The Bureau's weighted index numbers, with average prices in 1913 as 100.0, were 103.7 for April 15 1932; 90.5 for March 15 1933; and 90.4 for April 15 1933. The Bureau, continuing, said as follows under date of May 20: During the month from March 15 1933, to April 15 1933, the following articles decreased In average price for the month: Strictly fresh eggs, 7%; pork chops, 6%; evaporated milk, 2%; sirloin steak, rib roast, sliced ham, leg of lamb, canned red salmon, margarine, vegetable lard substitute, macaroni, canned corn, tea, and raisins, 1%; and round steak, sliced bacon, and coffee, less than .5 of 1%. Increases were shown in average prices of the following: Onions and cabbage, 14%; navy beans, 7%; flour and bananas, 3%; butter, rolled oats, canned peas, and auger, 2%; hens, 1%; and cheese and wheat cereal, less than .5 of 1%. The following articles showed no change in the month: Chuck roast, plate beef, fresh milk, lard, bread, corn meal, cornflakes, rice, potatoes, pork and beans, canned tomatoes, prunes, and oranges. Changes in Retail Prices of Food by Cities. During the month from March 15 1933, to April 15 1933, the following cities from which prices were received showed decreases in the average cost of food: Loa Angeles and New Orleans, 3%; Fall River, Indianapolis, Portland (Oreg.), and Washington, 2%; Baltimore, Boston, Butte, Cleveland, Houston, Philadelphia, and Providence, 1%; and Birmingham, Buffalo, Detroit, Manchester, Newark, Norfolk, Richmond, Savannah, and Scranton, less than .5 of 1%. The following cities showed increases: Peoria and Springfield, 4%; Charleston (S. C.), 3%; Bridgeport, Chicago, Dallas, Jacksonville, Louisville, New Haven, Omaha, Salt Lake City, and Seattle, 2%; Atlanta, Columbus, Kansas City, Milwaukee, Minneapolis, Mobile, New York, Pittsburgh, Portland (Me.), St. Paul, and San Francisco 1%; and Cincinnati, Denver, Little Rock, Memphis, Rochester, and St. Louis, less than .5 of 1%. For the year period April 15 1932, to April 15 1933, all of the 51 cities showed decreases: Norfolk, 19%; Indianapolis and Newark, 17%; Buffalo, Charleston (S. C.), Minneapolis, and New Haven, 16%; Atlanta, Birmingham, Chicago, Fall River, Memphis, New Orleans, Omaha, Rochester and St. Paul, 15%; Cleveland, Columbus, Dallas, Philadelphia, Portland (Oreg.), and Richmond, 14%; Bridgeport, Butte, Jacksonville, Little Rock, Milwaukee, New York, Pittsburgh, Portland (Me.), Providence, St. Louis, Savannah, Scranton, and Washington, 13%; Baltimore, Boston, Manchester, Mobile, and Seattle, 12%; Detroit and Louisville, 11%; Cincinnati, Houston, Peoria, Salt Lake City, San Francisco, and Springfield (Ill.), 10%; and Upriver, Kansas City, and Les Angeles, 9%. Monthly Index of Wholesale Commodity Prices of U. S. Department of Labor Advanced During April -Second Consecutive Upward Movement. The index number of wholesale commodity prices as computed by the Bureau of Labor Statistics of the U. S. Department of Labor shows an increase from March to April, 1933, registering the second successive advance in recent months and the first advance in the monthly index between March and April since 1928. This index number, which May 27 1933 includes 784 commodities or price series weighted according to the importance of each commodity and based on the average prices for the year 1926 as 100.0, averaged 60.4 for April as compared with 60.2 for March, showing an increase of .3 of 1% between the two months. When compared with April, 1932, with an index number of 65.5, a decrease of over 73 4% has been recorded in the 12 months. Under date of May 20 the Bureau continued: In the group of farm products increases in the average prices of grains, steers, cotton, fresh apples, lemons, hay, peanuts, tobacco, dried beans, potatoes and wool caused the group as a whole to rise 4% from the previous month. Decreases were recorded in the average prices of calves, lambs. live poultry, oranges and onions. Among foods, price advances during the month were reported for butter, cheese, rye and wheat flour, macaroni, corn meal, rice, cured beef, ham, dressed poultry, lard and raw and granulated sugar. On the other hand, fresh beef at Chicago, lamb, mutton, veal, and coffee averaged lower than In the month before. The group as a whole increased % in April when compared with March. The hides and leather products group increased approximately 2% during the month, gains for hides and skins and leather outweighing losses for other leather products, with boots and shoes remaining at the March level. Textile products as a whole advanced 1% from March to April. All subgroups contributed to the increase. Anthracite and bituminous coal, electricity, and most petroleum products showed reductions In average prices, causing the group of fuel and lighting materials to decline more than 2% from the previous month. Metals and metal products as a whole showed a further downward tendency for April, due to declining prices for iron and steel and motor vehicles. Nonferrous metals increased and agricultural implements and plumbing and heating fixtures showed little or no change during April. The index for the group was .4 of 1% lower than for the month before. In the group of building materials the average prices of brick and tile, lumber, and paint and paint materials moved upward during the month. Other building materials moved downward, while structural steel and cement showed no change between the two months. The group as a whole recorded a fractional decrease. Advances in the average prices of chemicals and fertilizer materials caused the group of chemicals and drugs to Increase slightly during April. Drugs and pharmaceuticals and mixed fertilizers decreased fractionally. As a whole, the housefurnishing goods group declined 1% front the previous month. Both furniture and furnishings shared in the decline. The group of miscellaneous commodities decreased 2% between March and April due to declining prices for automobile tires and tubes and paper and pulp. Cattle feed and crude rubber rose sharply in price, with other miscellaneous commodities showing a smaller increase. The April averages for the special groups of raw materials a d semi-manufactured articles were above those for March, with a gain of more than 1% being reocrded for raw materials. Finished products as a whole showed no change, while non-agricultural commodities and all commodities other than farm products and foods declined during the month. Between March and April price increases took place in 238 instances, decreases in 106 instances, while in 440 instances no change in price occurred. INDEX NUMBERS OF WHOLESALE PRICES BY GROUPS AND SUBGROUPS OF COMMODITIES (192e= 00.0). Groups and Subgroups. All commodities Farm products Grains Livestock and poultry Other farm products Foods Butter, cheese and milk Cereal products Fruits and vegetables Meats Other foods Hides and leather products Boots and shoes Hides and skins Leather Other leather products Textile products Clothing Cotton goods Knit goods Silk and rayon Woolen and worsted goods Other textile products Fuel and lighting materials Anthracite coal Bituminous coal Coke Electricity Gas Petroleum products Metals and metal products Agricultural implements Iron and steel Motor vehicles Nonferrous metals Plumbing and heating Building materials Brick and tile Cement Lumber Paint and paint materials Plumbing and heating Structural steel Other building materials Chemicals and drugs Chemicals Drugs and pharmaceuticals Fertilizer materials • Mixed fertilizers Housefurnishing goods Furnishings Furniture Miscellaneous Automobile tires and tubes Cattle feed Paper and pulp Rubber, crude Other miscellaneous Raw materials Semi-manufactured articles Finished products Nonagricultural commodities All commodities other than farm products and foods • Data not yet availablez April. 1932. March, 1933. April, 1933. 65.5 49.2 44.5 49.2 51.2 61.0 61.6 68.2 62.3 59.8 55.8 75.0 88.4 40.8 67.2 98.0 56.1 64.9 55.1 51.9 31.3 69.7 68.2 70.2 85.7 82.7 79.8 103.5 99.1 45.5 80.3 85.0 80.1 93.8 49.3 64.4 72.5 78.4 75.0 60.0 74.7 64.4 81.7 80.2 74.4 79.7 58.9 70.1 71.1 76.3 75.4 77.4 64.7 39.2 53.4 76.8 6.6 84.5 55.5 59.6 71.1 68.9 60.2 42.8 38.0 43.0 45.3 54.6 50.0 62.7 54.3 50.5 55.8 68.1 83.2 41.4 55.6 77.9 51.3 61.3 50.0 47.1 25.5 53.2 66.7 62.9 88.3 79.3 75.2 100.5 96.6 33.1 77.2 83.1 76.4 90.9 47.9 59.4 70.3 74.9 81.8 57.8 68.4 59.4 81.7 78.4 71.2 79.3 54.8 61.9 60.1 72.2 72.9 71.8 58.9 41.3 47.3 72.2 6.3 72.6 49.4 58.9 65.7 63.8 60.4 44.5 44.8 41.0 46.7 56.1 53.1 85.9 57.8 50.3 56.6 69.4 83.2 45.8 57.2 77.2 51.8 61.4 50.7 47.2 26.3 53.3 67.5 81.5 81.4 78.1 75.2 • • 32.5 76.9 83.1 75.7 90.4 49.2 59.4 70.2 75.0 81.8 57.9 68.9 59.4 81.7 77.9 71.4 79.5 54.6 62.9 60.0 71.5 71.7 71.5 57.8 37.4 49.5 70.6 7.4 72.7 50.0 57.3 65.7 63.7 70.9 65.8 65.3 Moody's Daily Index of Staple Commodity Prices Reverses Trend to Finish Week at New High. Commodity prices, as represented by Moody's Daily Index of Staple Commodity Prices, resumed the upward trend which had been interrupted during the previous week and ended the present week at the highest levels in nearly two years. The net change was from 114.9 to 116.9, the latter figure representing an advance of 49.2% from the low point of 78.7 reached on Feb. 4. Eleven of the fifteen commodities composing the Index showed price increases for the week, the most important being cotton, followed by hides, rubber, wool tops and copper, while silk, sugar, lead, wheat, cocoa and silver also contributed to the advance in the Index number in the order named. Steel scrap and coffee were unchanged, while hogs and corn were both lower. The movement of the Index during the week, with comparisons, is as follows: May 19 Fri. Sat. May 20 Mon. May 22 'rues. May 23 Wed. May 24 Thurs. May 25 May 26 Fri. 114.9 113.7 113.6 114.7 115.7 115.4 116.9 Two weeks ago, May 12 Month ago, Apr. 26 Year ago, May 28 1932 High, Sept. 6 Low. Dec. 31 1933 High, May 26 Low Feb. 4 115.6 102.4 83.8 103.9 79.3 116.9 78.7 "Annalist" Weekly Wholesale Price Index Slightly Lower During Week of May 23. In the reaction that overtook the markets last week the "Annalist" Weekly Index of Wholesale Commodity Prices dropped 0.3 points to 90.7 on May 23, from 91.0 (revised) the week before. In noting this, the "Annalist" said: It is still, however, well above a year ago, when it stood at 86.3. The week was a period of marking time in the absence of new developments and the spending of inflation expectations. The dollar strengthened slightly, rising a net M cent to $.862. The decline of the "Annalist" index was more than offset by the advance in the dollar, and the index, on a gold basis, accordingly continued its advance to 78.2 from 78.0. THE "ANNALIST" WEEKLY INDEX OF WHOLESALE COMMODITY PRICES. (Unadjusted for Seasonal Variation (191100). Farm products Food products Textile products Fuels Metals Building materials Chemicals Miscellaneous All commodities x Revised. *Provisional. May 23 1933. May 16 1933. May 24 1932. 80.8 96.9 x83.0 94.3 97.1 106.9 95.5 74.6 90.7 *81.3 97.3 *82.3 .96,6 96.1 106.7 95.5 74.1 *91.0 66.7 91.8 70.4 133 9 95.8 107.7 96.2 82.5 88.5 Department Store Sales in Metropolitan Area of New York During First Half of May. Department stores sales in the Metropolitan area of New York declined 5.3% during period from May 1 to May 15 1933 In comparison witch period from May 2 to May 16 1932, the Federal Reserve Bank of New York reported on May 23. New York and Brooklyn department stores reported a drop of 4.9% and department stores in Newark s drop of 7.3%. Chain Store Sales Rise Sharply. Rallying with the powerful stimulus of Easter buying, chain store trade in April scored a recovery which carried considerably beyond seasonal proportions, according to a survey issued by "Chain Store Age." Impressive gains were made by the five-and-ten, apparel and shoe chains, which benefited most from the holiday activity. Grocery and drug chains, though not reacting as strongly to the same influence, also showed satisfactory sales improvement. The publication continues: As a result of these sweeping advances, the state of trade in the chain store field for the month, as measured by the "Chain Store Age" index, which makes allowance for the Easter factor and the number of business days, rose 2.8 points to 78.0 on the basis of the 1929-1931 average for the month as 100. In March the index figure was 75.2 and in February it stood at 76.2. Total average daily sales in April of 20 leading chain store companies regularly used in computing the index figure, amounted to $6,800,000. The average daily business in March was $6,152,200. The average for April 1929-31 adjusted for the Easter element, totaled roundly $8,720.000. The shoe group, comprising two chains, and the apparel group, consist.. companies, each recorded in advance of over 10 points in their lug of four respective index figures. The April sales index of the former was 76.0 latter group 73.6 against 63.4 the against 65.7 in March, and that of the previous month. six chains in the five-and-tenThe April sales index for the group of department store field advanced to 85.4 from 78.4 in March. The index 85.3 compared with 84.2 the at stood chains in April of sales of two drug preceding month. chains increased to 74.4 in The sales index for the group of six grocery there was a decline of similar April from 74.2 in March. A year ago, extent between these two months. experienced by April sales of chains It is worthy of note that the rebound little or no Increase in retail doing a seasonal business was achieved with been fully communicated Prices. The rise in basic quotations has not yet is to the retail lines, mainly for trade reasons, but opinion fairly unanimous bring a pronounced rise to bound is that continuance of the recent trend in the store price structure. 3613 Financial Chrunicle Volume 136 Business the early part of May was maintaining a satisfactory level. Consumer response continued practically undiminished and it was felt that further improvement in industry and the financial situation would provide ample basis for a definite turn to permanent recovery. Building Operations in Principal Cities of United States During April as Reviewed by U. S. Department of Labor-Estimated Cost of New Residential and New Non-Residential Buildings Increased. There was an increase of 21.2% in indicated expenditures for total building construction in April as compared with March, 1933, according to reports received by the Bureau of Labor Statistics of the U. S. Department of Labor front 1gritical cities having a population of 10,000 or over. 7The 1933 increase of April over March was greater than the increase shown in comparing these two months in any of the previous three years. In reviewing the building operations in the United States, the Bureau, under date of May 20, continued: Comparing April, 1933, with March, 1933. there was an increase of cost of 29.4% in the number and an increase of 10.3% in the estimated new residential buildings. New non-residential buildings increased 44.7% in number and 43.4% in indicated expenditures. There was an increase repairs, and an inof 17.7% in the number of additions, alterations and The crease of 8.3% in indicated expenditures for this type of structure. indicated extotal number of building operations increased 23.1%. while during. his penditures for total building construction increased 21.2% period. During April, 1933, 2,378 family dwelling units were provided. March. in new buildings. This is an increase of 2.3% as compared with expendiTable I shows the per cent of increase or decrease in indicated tures for building operations in April as compared with March, each year. 1930 to 1933. inclusive: IN INDICATED TABLE I-PER CENT OF INCREASE OR DECREASE APRIL AS COMEXPENDITURES FOR BUILDING OPERATIONS IN INCLUSIVE. 1933, PARED WITH MARCH, EACH YEAR, 1930 TO Year. 1930 1931 1932 1933 Residential Building. Nan Residential Budding. Additions, Alterations and Repairs. Thal Fuildins Operations. + 8.2 +19.5 - 9.6 +10.6 +14.9 - 3.3 +38.1 +43.4 + 55 +12.4 +18.6 + 8.3 +11.1 +16.2 +19.3 +21.2 The various agencies of the United States Government awarded contracts during April for buildings to cost $4,720,642. This is nearly $1,500.in Aprli. 000 greater than in March 1933, but over $7,000,000 less than 1932. al population a having Comparing permits issued in 352 identical cities 25,000 or over in April, 1933, and April, 1932, there was a decrease of 41.2% in the number of new residential buildings and a decrease of 52.5% in indicated expenditures for new residential buildings. New non-residential this buildings decreased 32.2% in number, while indicated expenditures for type of building decreased 61.7%. There was a decrease in both the number and estimated cost of additions, alterations and repairs. The Lumber decreased 4.3% and indicated expenditures 24.0%. The number of total building operations comparing these two periods decreased 14.1%, while indicated expenditures decreased 51.3%. The number of family dwelling units provided in these 352 cities decreased 40.6%, comparing April 1933 with April 1932. Permits were issued during April, 1933, for the following important buildings: In Washington, D. C., for a power plant to cost over $700,000; In Roanoke, Va., for a telephone building to cost nearly $200.000: and in Fort Worth, Texas, for a public utility building to cost $300,000. ConDeparttracts were awarded by the Supervising Architect of the Treasury Minn., to ment for a post office and Federal customs house in St. Paul, Louis. St. in building customs and cost over $1,800,000,and for a post office Mo.. to cost over $2,600,000. IN 778 IDENTICAL TABLE II-ESTIMATED COST OF NEW BUILDINGS AND APRIL, CITIES. AS SHOWN BY PERMITS ISSUED IN MARCH 1933, BY GEOGRAPHIC DIVISIONS. New Residential Buildings. Geographic Cities. 109 New England 179 Middle Atlantic East North Central_ _ 182 West North Central- 69 76 South Atlantic 80 South Central Mountain and Pacific 83 778 Total Per cent of change.-- Geographic Diesion, Cities. Estimated Ont. Families Prodded for in New Dwellings. Mar. 1933. April 1933. Mar. 1933. April 1933. 245 165 9898,571 $706,117 641 972 2.328,660 2.948,664 112 188 6713,318 500,959 248 128 723.275 356,295 252 235 752.805 580,784 301 220 539,597 360,336 603 493 1,518,788 1,290,239 $6,741,394 $7,438,014 +10.3 New Non-Residential Buildings, Estimated con. 2,325 2,378 +2.3 Total Cosstruction (Includlng Alterations and Repalrs). Estimated Can. Mar. 1933. April 1933. Mar. 1933. April 1933. $600,489 2.473,346 705,425 4,789,945 1,620,157 878,848 1,288,023 $2,525,179 8,453,178 3,203,003 1,044,35.5 2,010,133 1,851,793 5,472,535 $2,512,551 7,943,140 2,487,182 6,198,443 3,350,377 12,087,754 5,176,591 New England 109 179 Middle Atlantic East North Central 182 West North Central_ 69 South Atlantic 76 South Central 80 Mountain and Pacific 83 $1,061,513 2,749,774 1.624,631 239,349 739,186 863,810 1,338,257 Total 778 Per cent of change_ _ _ $8,616,520 $12,356,233 $24,560,176 $29,756,038 +43.4 +21.2 A Further Increase Noted in Electric Output. According to the Edison Electric Institute, the production of electricity by the electric light and power industry of the United States for the week ended May 20 1933 was 1,483,090,000 kwh., compared with 1,468,035,000 kwh. in the preceding week and 1,435,731,000 kwh. in the corresponding 3614 Financial Chronicle period last year. The current figure is the highest since the week of Jan. 211933. The percentage increase for the week ended May 20 1933 was 3.3% over the same week in 1932, as against 2.2% for the preceding week over the week ended May 14 1932. The Institute's report follows: PER CENT CHANGES. Major Geographic Regions. Week Ended Week Ended Week Ended Week Ended May 20 1933. May13 1933. May 6 1933. April 29 1933. Atlantic Seaboard ____ New England (alone)__ Central Industrial__ Pacific Coast +5.0 +7.1 +3.5 -7.2 -4.2 +7.7 +1.4 -7.2 +2.9 +3.8 -0.2 -3.5 -1.3 Total United States_ 4-3.3 +2.2 +0.5 -1.8 +0.5 +2.5 Arranged in tabular form, the output in kilowatt hours of the light and power companies of recent weeks and by months since and including January 1930 is as follows: Week of- 1933. Week of- 1932. Week of- 1931. 1933 Under 1932, Jan. 14 1,495,116,000 Jan. 16 1,602,482,000 Jan. 17 1,716,822,000 6.7% Jan. 21 1,484,089,000 Jan. 23 1,598.201,000 Jan. 24 1,712,786,000 7.1% Jan. 20 1,469,636,000 Jan. 30 1,588,967,000 Jan. 31 1,687,160.000 75% Feb. 4 1,454,913,000 Feb. 6 1,588,853,000 Feb. 7 1,679,016,000 8.4% Feb. 11 1.482,509,000 Feb. 13 1,578,817,000 Feb. 14 1,683,712,000 6.1% Feb. 18 1,469,732,000 Feb. 20 1,545,459,000 Feb. 21 1,680,029,000 4.9% Feb. 25 1,425,511,000 Feb. 27 1,512,158,000 Feb. 28 1,633,353,000 5.7% Mar. 4 1,422,875.000 Mar. 5 1,519,679,000 Mar. 7 1,684,125,000 6.4% Mar. 11 1,390,607,000 Mar. 12 1,538,452,000 Mar. 14 1,676,422,000 9.6% Mar. 18 1,375,207,000 Mar. 19 1,537,747,000 Mar. 21 1,682,437,000 10.6% Mar. 25 1,409,655,000 Mar. 26 1,514,553,000 Mar. 28 1,689,407.000 6.9% Apr. 1 1,402,142,000 Apr. 2 1,480,208,000 Apr. 4 1,679,764,000 5.3% Apr. 8 1,399,367,000 Apr. 9 1,465,076,000 Apr. 11 1.647.078,000 4.5% Apr. 15 1,409,603,000 Apr. 16 1,480,738,000 Apr. 18 1,641,253,000 4.8% Apr. 22 1,431,095,000 Apr. 23 1,469,810,000 Apr. 25 1,675,570,000 2.6% Apr. 29 1,427,960,000 Apr. 30 1,454,505,000 May 2 1,644,437,000 1.8% May 6 1,435,707,000 May 7 1,429,032,000 May 9 1,637,296,000 50.5% May 13 1,468,035.000 May 14 1,436,928,000 May 16 1,654,303,000 a2.2% May 20 1,483,090,000 May 21 1,435,731,000 May 23 1,644,783,000 a3.3% May 27 May 28 1,425,151.000 May 30 1,601,833,000 Iune 3 June 4 1,381,452,000 June 6 1,593,662,000 a. Increase over 1932 DATA FOR RECENT MONTHS. Menath of- 1933. 1932. 1931. 1930. 1933 Under 1 932. January_ -- - 6,480,897.000 7,011,736,000 7,435,782,000 8,021,749,000 7.6% February _ *5.835,263,000 6,494,091,000 6,678,915,000 7,066,788,000 10.1% March 6,182,281,000 6,771,684,000 7,370,687,000 7,580,335,000 8.7% April 6,294,302,000 7,184,514,000 7,416,191.000 May 6,219,554,000 7,180,210,000 7,494,807,000 June 6,130,077,000 7,070,729,000 7,239.697,000 July 6,112,175,000 7,286,576,000 7,363,730,000 6,310,667,000 7,166,086,000 7,391,106,000 August September 6,317,733,000 7,099,421,000 7,337,106,000 October 6,633,865,000 7,331,380,000 7,718,787,000 November 6,507,804,000 6,971,644,000 7,270,112.000 December.... ____ 6,638,424,000 7,288,025,000 7,566,601,000 Total 77,442,112,000 86,063,969,000 89.467,099,000 • February 1933 has one less working day than February 1932 (Leap Year). Note.-The monthly figures shown above are based on reports covering approximately 92% of the electric light and power industry and the weekly figures are based on about 70%. Improvement in Business Conditions Reported During April and First Half of May by Conference of Statisticians in Industry-Activity in Production and Trade Increased. "Improved business conditions which began in the latter part of March were extended through the month of April and the first half of May," according to the "Conference Board Business Survey," dated May 20, prepared by the Conference of Statisticians in Industry under the auspices of the National Industrial Conference Board. "Advances in production and trade were made, however," the "Survey" continues, "from the low point of the depression and were confined largely to the industries not involving heavy construction. The gradual but steady rise in bond prices in recent weeks is a heartening indicator of possible new capital enterprise." The "Survey" also noted: Production in general advanced more than seasonally during April. Automobile output was sharply stepped up in successive weeks since the second week in March. Building and engineering construction showed some Improvement in the residential field though total activity was unseasonally retarded. Steel and iron production advanced sharply in April with a stepping up of activity which was decidedly more than seasonal at this time of the year. Bituminous coal mined during the month fell off by an amount which was less than expected between March and April. Electric power output in April moved upward though a decline is seasonal between the two months. Activity in the textile industries showed rapid improvement in the past six weeks. Distribution by freight of raw materials and commodities in various stages of manufacture increased in April as compared with March, while retail trade advanced by amounts greater than usual at this time of the year. Carloadings of all materials showed a total net gain whereas a slight decline is seasonal. Department store sales increased in dollar values more than expected at this time of the year. Commodity prices at wholesale in April and in May to date have advanced steadily. The gains were, however, registered chiefly in the prices of raw materials. Prices of agricultural cornmodities paid the farmer advanced again between the middle of March and the middle of April, and have risen since. Security prices advanced in April and in the first half of May to date. Advances were shared by both stocks and bonds. The latter, while lower In April, moved upward in May to date although commodity prices continued to rise. Money rates were low and easy in April and May while the total of Federal Reserve credit outstanding in April fell off sharply. May 27 1933 Commercial failures during April fell off slightly in number but increased in liabilities incurred, according to Dun St Bradstreet. The decline in number was an extension of unseasonal curtailment begun in March; the gain in the dollar value of liabilities incurred represents a hold-over from March. Employment in manufacturing industry increased in April as compared with March, though a decline is seasonal. Weekly earnings showed a measurable gain with a rise in hours worked per week. Hourly earnings were steady. The improvement in business noted in April was carried into the first half of May. Though still largely confined to the industries not involving heavy construction, increased activity in production and trade was clearly evident. Commodity prices continued their upward movement with advances in raw materials slowly being extended into finished items. A vary significant factor in the current situation is the steady rise in bond prices during the first half of May, with its promise of revived activity in capital construction industries. Decline of About 57% Estimated in Farm Income from 1929 to 1932 by United States Department of Agriculture. A decline of nearly $6,800,000,000 in gross farm income from 1929 to 1932 or about 57% is estimated by the Bureau of Agricultural Economics, U. S. Department of Agriculture. Gross income from farm production in 1932 was $5,143,000,000; value of products retained from consumption $942,000,000, cash income, or the value of products actually sold, was $4,201,000,000, and production expenses were $2,899,- 000,000, leaving $1,302,000,000 for farmers after production expenses were deducted. An announcement issued on April 29 by the Department of Agriculture with regard to the Bureau's estimate, continued: Gross farm income last year was the lowest in 23 years of statistical records by the Bureau. Cark income declined from $10,286,000,000 in 1929 to $4,201,000,000 in 1932, a decline of 59%. Total production expenses, including wages to hired labor, interest and taxes payable, declines from $5,629,000,000 to $2,899,000,000 during the same period. The most drastic decline in expenditures, says the Bureau, was for farm machinery, building materials, and fertilizer. The Bureau points out that "income available for farmers' capital, labor, and management last year provided no return on investment, and fell short by nearly $1,200,000,000 of paying the farm family for their labor even at the reduced wage rates for hired labor." This is the third successive year in which the income available to farm operators after paying production expenses has been insufficient to provide a return to the farm family for their labor equal to that of hired labor. The Bureau reports a sharp reduction in the inventory value of farm capital. All land and buildings which had a value of about $48,000,000,000 In the spring of 1929 were down in value to about $37,000,000,000 in 1932. The value of livestock on fartns during this interval declined from about $6,600,000,000 to about $3,500,000,000. The Bureau adds that "since land values and livestock prices continued to decline during 1932, and since farmers' purchases of farm machinery were unusually small in 1932, the total value of farm capital was materially smaller at the beginning of 1933 than at the beginning of 1932." The Bureau points out that although the reduction in farm income from 1929 to 1932 was general for all farm products, producers of livestock and livestock products in general fared better than did the producers of crops. Since 1929 the gross income from crops has declined about 61%, whereas income from livestock and livestock products declined about 53%. The decline in income from grains and cotton was especially marked, amounting to approximately 75% for grains, and 69% for cotton. The income from hogs in 1932 was only about one-third that in 1929. Gross income from dairy products is reported to have declined less than that for any other major commodity during the four-year period. A part of the decrease in farmers' expenditures the last four years is attributed to price reductions on commodities that farmers buy, but roost of the decrease was due to a sharp reduction in farmer buying. Expenditures for farm machinery, tractors, and repairs in 1932 were only about 16% of 1929 expenditures, and for automobiles and trucks only 15% of the buying in 1929. This sharp curtailment in purchases of machinery and repairs on buildings means that farmers are using up their capital equipment, and if it is long continued it will tend to restrict farm production, says the Bureau. The ranking of the principal lines of production in gross value as shown by these estimates places milk first, poultry and eggs second, hogs third, and cattle and calves fourth in the livestock group. Among the crops the vegetable group ranked first, cotton and cottonseed second, fruits and nuts third, and grains fourth. Country's Foreign Trade in April-Imports and Exports. The Bureau of Statistics of the Department of Commerce at Washington on May 17 issued its statement on the foreign trade of the United States for April and the ten months ended with April. The value of merchandise exported in April 1933 was estimated at $105,000,000 as compared with $135,095,000 in April 1932. The imports of merchandise are provisionally computed at $88,000,000 in April 1933, as against $126,522,000 in April the previous year, leaving a favorable balance in the merchandise movement for the month of April of approximately $17,000,000. In April 1932 there was a favorable trade balance in the merchandise movement of $8,573,000. Imports for the ten months ended April 1933 have been $938,603,000 as against $1,507,714,000 for the corresponding ten months of 1931-32. The merchandise exports for the ten months ended April 1933 have been $1,206,140,000 against $1,702,287,000, giving a favorable trade balance of $265,537,- Financial Chronicle Volume 136 000 for the ten months of 1932-33 against $194,573,000 in the ten months of 1931-32. Gold imports totaled $6,769,000 in April 1933 against $19,271,000 in the corresponding month of the previous year, and for the ten months ended April 1933 were $396,058,000, as against $483,244,000 in the same period a year ago. Gold exports in April were only $16,741,000, against $49,509,000 in April 1932. For the ten months ended April 1933 the exports of the metal foot up $108,088,000, against $795,498,000 in the corresponding ten months of 1931-32. Silver imports for the ten months ended April 1933 have been $14,727,000, as against $22,436,000 in the ten months ended April 1932, and silver exports were $7,781,000 compared with $16,846,000. TOTAL VALUES OF EXPORTS AND IMPORTS OF THE UNITED STATES. (preliminary figures for 1933 corrected to May 16 1933.) MERCHANDISE. April 4 Months Ending April 1933. 1932. 1933. 1932. Increase(+) Decrease(-) 1.000 Dollars. 105,000 88,000 1,000 Dollars. 135,095 126,522 1,000 Dollars. 435,137 362,615 1,000 Dollars. 593,965 524,230 1,000 Dollars. -158,823 -161.615 17,000 8,573 72,522 69,735 • Exports Imports Excess of exports Excess of Imports_ EXPORTS AND IMPORTS OF MERCHANDISE, BY MONTHS. 1933. 1932. 1931. 1930. 1929. 4 months ending Apr. 435,137 593,965 924,920 1,460,982 1,844,889 1,566,771 10 months ending Apr. 1,206.140 1,702,287 2,692,383 4.078,889 4,595,257 4,065,854 12 months end. Dec. 1,611,016 2,424,289 3.843,181 5,240,995 5,128,356 ImportsJAnuary February March April May Juno July August September October November December 96.006 83.750 94,859 88,000 4 months ending Apr. 10 months ending Apr. 12 months end. Dec. 135,520 130,999 131,189 126,522 112,276 110.280 79,421 91,102 98.411 105,409 104,468 97,087 183,148 174,946 210,202 185,706 179,694 173,455 174,460 166,679 170,384 168,708 149,480 153.773 310,968 281.707 300,460 307.824 284,683 250,343 220,558 218,417 226,352 247,367 203,593 208,636 368,897 369,442 383,818 410,666 400,149 353,403 352.980 369,358 351,304 391,063 338,472 309,809 337,916 351,035 380,437 345,314 353,981 317,249 317,848 346,715 319,818 355,358 326.565 339,408 362,615 524,230 754,002 1,200,959 1.532,823 1,414,702 938,603 1,507,714 2,078,925 3,313.945 3,538.335 3,476,270 1,322,774 2,090,635 3,060,908 4,399,361 4,091,444 GOLD AND SILVER. 4 Months Ending Apr. April. 1933. 1932. 1933. 1932. Increase(+) Decrease(-) 1,000 Dollars. 1,000 Dollars. 1,000 Dollars. 1,000 Dollars. 1.000 Dollars. 16,741 6,769 49,509 19,271 9,972 30,238 Gold- Exports Imports Excess of exports Excess of Imports SilverExports Imports Excess of exports _ Excess of imports_ _._ 66.399 180,593 329,493 111,066 -263,094 +69,527 218,427 114,194 171 1.520 1,617 1,890 2,200 5.830 5,136 7,805 1.349 273 3630 2.669 -2,936 -1,975 EXPORTS AND IMPORTS OF GOLD AND SILVER, BY MONTHS. Gold. 1933. Exports- January February Marsh April May Juno July August September October November December 1932. 1931. Silver. 1930. 1933. 1932. 1931. 1930. 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. 14 107,863 54 8,948 1,551 1,611 3,571 5,892 21.521 128,211 14 207 209 942 1,638 5,331 28,123 43,909 26 290 269 967 2,323 5,818 16.741 49.509 27 110 171 1,617 3,249 46 4 6 .212,229 628 82 ____ 1,865 2,099 4.978 _ 226,117 40 26 ____ 1,268 1,895 3,336 23,474 1,009 41,529 ____ 828 2,305 3,709 18.067 39 39.332 ____ 433 2,024 4,544 60 28,708 11,133 .... 868 2,183 3.903 61 398.604 16 4,994 13 32,651 9,266 5,008 36 ...... ____ ____ 1,316 875 1.260 2,158 872 2,168 4.424 4,103 3,472 121 9,555 4 mos.end. Apr. 66.399 320,492 795,498 106,426 10 mos.end. Apr. 108,088 809,528 466,794 119,087 115,967 12 mos.end.Dec. 2,200 5,137 10,781 21,687 7,781 16.846 34,936 63,738 13,850 26,485 54,157 'aspens128,479 34,913 January 37,644 February-------30,397 19,238 14,948 March 6.769 19,271 April may 16,715 _-__ 20,070 June -----20,037 Augui;t -- 24,170 September --------- 27.957 ___ 20,674 October ...-_ 21,756 November __ 100,872 December 1,763 855 1,693 1,520 ____ -___ --____ ___ ____ ---____ 34,426 16,156 25,671 49,543 50,258 63,887 20,512 57,539 49,269 60,919 94,430 89,509 12,908 60,198 55,768 65,835 23,552 13,938 21,889 19,714 13,680 35,635 40,159 32.778 2.097 2,009 1,809 1.890 1,547 1,401 1,288 1,554 2.052 1,305 1,494 1,203 2,896 1,877 1,821 2.439 2,636 2.364 1.663 2,685 2,355 2,573 2,138 3,215 4.756 3,923 4,831 3.570 3,486 2,707 3,953 3.492 3,461 3,270 2,652 2.660 5,830 7,805 9,034 17.080 Apr 396,058 483,244 289,651 304,851 14,727 22,436 28,522 48,285 10 mos:end. 19,650 28,664 42.761 363,315 512,119 396,054 12 mos.end.Dec 4 Mos end. Apr 180,593 111.066 125.796 194.709 Roger W. Babson Sees Improved Business ActivityPossibility that Country Will Be Back to Normal in Twelve Months-Views on President's Action. Roger W. Babson, head of tile Babson Statistical Organizations, told the Executive Club of the Boston Chamber of Commerce at a luncheon in Boston on May 22 that for the first time since 1929 his indices of business activity compare favorably with the corresponding month of the previous year and have carried the improvement above the levels of last September. A Boston dispatch to the New York "Times" quotes Mr. Babson as follows: The general impression among bankers is that although we have seen the worst, recovery may come slowly. This, of course, may be true, but a study of the previous depressions shows that in nearly every case the upturn has been very rapid after the deflation has been completed. I do not say that we will be back to normal in twelve months, but it is very possible. Four chances out of seven, the President will make no vital mistake In the administration of such legislation as is now being enacted, but will allow the nation to work out of this depression naturally. In this case we are on the road to real recovery, and stocks purchased to-day should be held for the long pull. Two chances out of seven, the President will make some vital mistake such as embarking on a riotous period of artificial inflation. In this case we will have a marked advance in commodity and security prices during the next twelve months or more, which will be followed by a collapse or violent reaction. In this case, stocks now being purchased should be sold within the next few months. The new deal can, in a few months, redistribute the cards, but it will take a generation to redistribute ability, judgment, initiative and courage. 1928. 1,000 1.000 1,000 1,000 1,000 1,000 Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. 120.593 150,022 249,598 410,849 488,023 410,778 101,516 153,972 224,346 348,852 441,751 371,448 108,031 154,876 235,899 369,549 489,851 420,617 105,000 135,095 215,077 331,732 425,264 363,928 131,899 203,970 320.034 385.013 422,557 114,148 187,077 294,701 393,186 388,661 106,830 180,772 266,761 402,861 378,984 108.599 164,808 297,765 380,564 379,006 132.037 180,228 312,207 437,163 421,607 153,090 204.905 326,896 528,514 550,014 138,834 193,540 288,978 442,254 544,912 131,614 184,070 274,856 426,551 475,845 ExportsJanuary February March April May June July August September October November December 3615 Industrial Situation in Illinois During April Reviewed by Industry by Illinois Department of LaborIncreases Noted in Employment and Payrolls Compared_with March. Howard B. Myers, Chief of the Division of Statistics & Research of the Illinois Department of Labor, reports that "employment in Illinois industries increased .7 of 1% between March and April 1933, as shown by reports of 1,604 manufacturing and non-manufacturing establishments of the State. The 1,604 reporting firms employed 263,662 wageearners in April," according to Mr. Myers, "and paid out weekly a total of $5,070,503 in wages." Continuing under date of May 18 Mr. Myers said: Increases of 1.8% in employment and 3.8% in payrolls were shown by 1,068 reporting manufacturing establishments of the State, which employed 162,916 wage-earners in April and disbursed weekly $2,733,118 in wages. Decreases of .9 of 1% in employment and 3.7% in payrolls were reported by 536 non-manufacturing establishments of Illinois, employing in April 100,746 wage-earners and paying weekly $2,337,385 in wages. Nominal man-hours of work, reported by 1,014 firms, increased 7.8% from Starch to April. Six hundred and seventy-seven reporting manufacturing firms increased nominal man-hours 8.3%, and 337 non-manufacturing establishments increased man-hours 6.2% during the period. The increases from March to April in employment and payrolls for all industries, ran counter to the normal seasonal movement. They represent, however, only partial recovery cfrom the unseasonal March declines of 1.5% in employment and 4.5% in payrolls. The all-industry employment index for April 1933, was 66.2, a decline of 9.2% from April 1932. The allindustry payroll index for April 1933, was 36.5, or 21.7% below a year ago. These index figures are based on the monthly averages of the three years 1925-1927 as 100. Female workers experienced larger percentage gains in employment than did males, but total wage payments to male workers were affected more favorably than those for females. For males, employment increased .8 of 1% and payrolls increased 1.8%, in all industries combined. Employment of females in these industries increased 4.3%, but total wage payments for females declined 1.7%. In the manufacturing industries, the employment of males increased 2.2% and payrolls 4.8%, while the employment of female workers increased 4.2% and payrolls 2.9%. In the non-manufacturing industries the number of male workers decreased 3.9% and total wags payments to males decreased 2.8%; the number of females employed increased 4.5% while total wage payments to females decreased 5.2%. The payroll decline in non-manufacturing industries for female workers was largely due to decreases in reporting telephone companies. The manufacturing industries, which had been most severely affected by the banking holidays in March, were responsible for the April increases in employment and payrolls. Manufacturing increases of 1.8% in employment and 3.8% in payrolls, however, only partially offset the March declines of 2.4% in the number employed and 8.2% in total wage payments. In April, six of the nine main manufacturing groups reported employment increases, and six reported gains in payrolls. The metals, machinery and conveyances group increased employment 3.1% and payrolls 5.0%. Six of the 13 industry classifications in the group showed increased employment, while nine reported increased payrolls. The automobile and accessory industry reported sharp gains of 54.9% in employment and 74.6% in payrolls, and the cars and locomotives industry increased employment 15.9% and total wage payments 18.9%. Gains in other industries of the group were more moderate. The iron and steel industry reported increases of 2.0% in employment and 3.7% in payrolls; these increases might have been larger but for the fact that some firms reported for the early part of the period and were still adversely affected by the bank holidays. Both the machinery and the electrical apparatus industries decreased employment and payrolls. The stone, clay and glass group increased operation by more than the normal seasonal amount, adding 10.3% more workers and increasing payrolls 16.2% from March to April. All industries of the group shared in the employment gains, and all but brick, tile and pottery contributed payroll increases as well. In the wood products group employment gained 6.8% and payrolls 31.0% offsetting part of the March losses. All industries shared in the April increases. The largest percentage gains were those for pianos and musical instruments, 37.9% in employment and 77.6% in payrolls. The furs and leather goods group showed more than seasonal declines, decreasing employment 9.9% and payrolls 20.5%. The leather and the 3616 Financial Chronicle boot and shoe industries were responsible for these losses; furs and fur goods and miscellaneous leather goods reported gains in both employment and payrolls. The chemicals, oils and paints group of industries reported moderate increases of .9 of 1% in employment and .2 of 1% in payrolls. The paints, dyes and colors industry, with gains of 18.4% in the number of workers employed and 33.0% in total wage payments, caused most of the gain for the group, although the drugs and chemicals and oil industries also increased employment. An increase of .8 of 1% in employment was reported for the printing and paper goods group, but the group decreased payrolls .7 of 1%. Both job printing and lithographing and engraving reduced emplconent and payrolls; all other reporting industries increased both items. The textiles group reduced employment .9 of 1% but increased payrolls t9%. All reporting industries except thread and twine increased payfolls; knit goods was the only industry in the group to increase employ*tent. Seasonal declines were reported by the clothing and millinery group, *bleb reduced employment 5.8% and payrolls 21.6% from March to April. The men's clothing industry, which reduced employment 15.8% and payrolls 45.9%, caused most of the losses. Both men's and women's hat factories increased activity, as did women's clothing, women's underwear, and men's shirts and furnishings. The overalls and work clothes industry increased employment but decreased payrolls. The food, beverages and tobacco group showed increases of 5.2% in employment and 13.9% in payrolls from the preceding month. These gains, which ran counter to the normal seasonal movement for the group, more than offset the losses of the preceding month. All industries except miscellaneous groceries shared in both employment and payroll gains. Marked increases were reported for the confectionery, manufactured ice and ice cream industries. The beverage industry, due to the rush to manufacture beer, increased employment 41.5% and payrolls 113.3% above March levels. Decreases of .9 of 1% in the volume of employment and 3.7% in payrolls. were shown by the combined non-manufacturing industries. Public utilities and coal mining caused these losses. Increases of 7.1% in employment and 5.5% in payrolls were reported for the wholesale and retail trade group. These increases are the largest ever shown for the March-April period by the records of the Department of Labor, which begin in 1921. Increased wage payments in this group were general except for milk distributing. Department stores, with increases of 18.4% in employment and 14.7% in payrolls, and wholesale dry goods establishments, with gains of 14.1% in employment and 15.7% in payroll., accounted for most of the gains reported for the group. The services group increased payrolls 1.7%, and retained employment volume substantially at the March level. The public utilities group decreased employment 2.8% and payrolls 6.9%, although the normal seasonal movement for the month is upward. All industries in the group decreased both employment and payrolls. Reporting coal mines reduced working forces 14.9% and total wage payments 11.3%. Sharp increases were reported by all industries in the building and' contracting group, and the group as a whole increased employment 21.8* and payrolls 36.3% above the March levels. Thirty-one establishments reported wage reductions in April affecting 6,659 workers, or 2.5% of the total employed by all reporting establishments. The wage cuts ranged from 4.5% to 33.3% but the typical reduction was 10.0%. No wage increases were reported. Weekly earnings for April averaged $19.23 for all reporting industries; $21.51 for males and ;Mil for females. For the manufacturing industries the respective averages were $10.78, $19.07, and $10.10; for the non-manufacturing industries they were $23.20, $27.18, and $14.37. Most Recent Wage Increases Made by Firms That Previously Instituted Much Larger Cuts, According to William Green, President American Federation of Labor. Most of the wage increases recently announced were made by companies that previously had ordered far larger decreases, according to a declaration in an interview on May 21 by William Green, President of the American Federation of Labor. The interview, in part, as contained in a copyright United Press dispatch from Washington, to the New York "Herald Tribune" follows: Organized labor warned the American public to-night not to be misled by announcements of "wage increases" by business and industrial leaders who still pay their workers "starvation wages." William Green, President of the American Federation of Labor, in an interview expressed gratification that the Chief Executive's plea had received quick response. He emphasized, however, that, in some instances. 10% wage increases had been ordered, but that these workers previously had been cut as much as 40 and 50%. North Carolina textile mills bore the brunt of Mr. Green's criticism. "I use them as an example," he said. "Other concerns have been just Si unfair." In New England, he pointed out, fabric mills pay their women workers from $10 to $12 a week. This wage, he said, is too low, but does permit of decent living conditions. "Now," the labor executive continued, "these North Carolina mills announce they have given their workers a 5% pay increase. What happens? The newspapers carry the announcement on their front pages, and rightly so, because it is the truth, but the fact is, these mills, even with their 5% increase, still are paying their workers about $4 a week." He then cited another example. A brokerage house recently announced a 10% salary increase for all workers. "It was not learned until later, however, that this firm previously had cut aviaries more than 60%," he said. Mr. Green said that only few concerns announcing "wage increases" in the last two weeks had not previously made much larger decreases. May 27 1933 Bank of Montreal in its review of trade conditions dated May 22. We quote further from the Review as follows: World-wide repercussions have in fact followed the meetings of the Prime Ministers of the leading trading nations with the President of the United States, and for the moment, notwithstanding incipient controversy, these have been in a uniformly favourable direction. The prominent association of Mr. Bennett with Mr. MacDonald and M. Herriot in the opening conversations with Mr. Roosevelt did much to enlist a close Canadian interest and to extend the psychology of the situation to Canada-apart altogether from its special significance for detailed discussion of the tariff between Canada and the United States later on. The outlook for the World Economic Conference has been definitely bettered-though the political tension in Europe provides a difficult background for economic co-operation. Perhaps the most immediate and striking result of the Washington developments lies in respect to commodity prices, which, by common consent, provide the key to economic recovery. Here there has been an undoubted move for the better. In Canada all staples have moved upward under the leadership of wheat and silver. The Dominion Bureau of Statistics index number for March was 64.4. In April it was 05.4, the highest point reached since last September, and during the current month further advance has been made all along the line. Since the low point in December, wheat prices have advanced approximately 25c. a bushel, of which roundlY 15c. has been contributed by the events of the past five weeks alone. With 235,000,000 bushels of wheat available in store and in farmers' hands in Canada on May 1st, the added value is approximately $35,000,000. Just how far the monetary factor and the rise in sterling have operated in the situation it is impossible to gauge, but there has been improvement in the market side as well, notably in the poor crop outlook of the United States. The Dominion Government figure of "intention to plant," issued on May 10th, indicates a reduction of 14 million acres in wheat acreage in Canada. In general business there is an improved tone. Construction contract awards, which amounted to $8,600,000 in April, compare with $3,200,000 in March, a gain much in excess of normal seasonal expectation and one which has been reflected in improved local demands for building materials. Flour milling has reported a considerable resumption in operations. Nickel, zinc and asbestos, among minerals, have been moving in larger quantities. Automobile manufactures rose slightly, and there has been some pick-up in orders for iron and steel. Whilst it is impossible to generalize finally, miscellaneous manufactures have shown increasing volume of production, and the reports to hand are predominantly of resumption of staffs, new plants and other indices of revival. Further Reduction of Lumber Stocks Recommended. Unless and until building operations expand mucrb more rapidly than is now indicated, and substantial upturn in wood-using industries is of continuing character, the special Lumber Survey Committee of the Timber Conservation Board, in its eighth quarterly report on lumber consumption and stocks, just released, states that further reductions in lumber stocks are essential to industry recuperation and reconunends a reduction during the year of three billion feet. The Committee further points out as follows: Although lumber stocks at the mills have been reduced over three billion feet since Jan. 1 1932, equivalent to nearly one-fifth of the total annual volume of lumber movement-as measured by consumption for the two years ended March 31 1933-the net decline in stocks from the beginning of 1929 to Jan. 1 1933 was only 30%, and that stocks in the first quarter of 1933 were reduced approximately only 6% below those of Jan. 1 1933. On the other hand, consumption in 1932 declined over 65% from 1929 and the first quarter of 1933 showed apparent further decline from similar period of 1932 of 20%. This was due largely to continued curtailment in building and in railroad uses. Recommendation is also made that diligent effort be continued through exchanges of stocks and sales to avoid unnecessary production of items already in industry surplus. This policy is now extensively practiced in the industry, as repeatedly urged by this Committee. Average lumber prices at the mill have continued the moderate advance begun in the last quarter of 1932 to a point in March averaging 5% above August 1932. Despite the general disruption of business due to the bank holiday, March chronicled the highest record of new lumber business received since last September, especially during the weeks ended March 18 and 25. Much, but by no means all, of its increase was seasonal. Dealers their stocks in March because of the upward price trend and not replenished generally because of greatly increased demand. Major upturn that will be of continuing and appreciable benefit to the lumber industry awaits resumption of building, particularly of residential construction. During the first quarter of 1933 lumber production was comparatively low, with many mills still closed or operating on part time. Since the first of April production has, however, increased to the highest volume since last October, but it has been held well within demand during 1933. The continued curtailment in building operations, with only slight improvement in other demand, justifies no present increase in production. The outlook for the second quarter of 1933 is promising of increase in activity, dependent largely upon bow and when the as yet undisclosed plans of the Administration for stimulation pending but private of public and construction and of national Industry and commerce begin to take effect. The Lumber Survey Committee appointed on July 9 1931 consists of Thomas S. Holden, Vice-President of F. W. Dodge Co., New York; Dr. Frank IL Surface, former Assistant Director of the Bureau of Foreign and Domestic Commerce; M. W. Stark, lumber and coal economist of Columbus, Ohio; Calvin Fentress, Chairman of the Board of Baker, Fentress & Co.. Chicago, Ill., and Dr. Wilson Compton, Secretary and Manager of the National Lumber Manufacturers' Association. This Committee serves voluntarily in co-operation with the work of the Timber Conservation Board in its study of the economic situation in the forest products industries. Improved Tone in Business Seen by Bank of MontrealConversations Between President Roosevelt and Lumber Mills Have Orders 20 Days Ahead-Largest Representatives of Foreign Nations Regarded as "Backlog" Since 1930. Helpful-Reduction of 13' Million Acres of Wheat Lumber orders at the mills overtopped previous 1932 Acreage in Canada Indicated. and 1933 records during the week ended May 20 1933, and "History has been written for Canadian business during the production and shipments made similar records, according past month at Washington rather than in Canada," says the to telegraphic reports to the National Lumber Manufacturers Volume 136 Financial Chronicle Association from regional associations covering the operations of 650 leading softwood and hardwood mills. Orders totaled 237,759,000 feet, the highest weekly total since April 1931; shipments were 179,750,000 feet and production was 140,363,000 feet. For the 20 weeks this year to date orders received were slightly in excess of those booked during similar period of 1932, this record being shared by both softwoods and hardwoods. An encouraging gain has been made in the last seven weeks; during the first 13 weeks of 1933 orders were 84% of those of the first quarter of 1932. Production during the first 20 weeks of 1933 was 91% of last year's output; shipments were 88% of those of similar 1932 period, continues the Association, which further reports as follows: All regions showed excess of orders over production in the week ended May 20, softwoods totaling 65% above and hardwood orders being nearly 2 1-3 times production. Production was 8% greater, shipments 36%, and orders 86% heavier than in the corresponding week of 1932. All regions reported orders greater than last year, and all showed heavier shipments. Unfilled orders at the mills on May 20 1933 were the equivalent of 20 days' average production of the reporting mills. So high a record has not been reached since 1930. A year ago the figure was 15 days. Forest products carloadings during the week ended May 13 for the first time since 1929, were higher than for the corresponding week of the previous year. They reached a total of 20.024 cars, the highest this year or last except for three weeks in March 1932. Lumber orders reported for the week ended May 20 1933, by 422 softwood mills totaled 214,855,000 feet, or 65% above the production of the same mills. Shipments as reported for the same week were 156.663,000 feet. or 20% above production. Production was 130,444,000 feet. Reports from 244 hardwood mills give new business as 22,904,000 feet. or 131% above production. Shipments as reported fot the same week were 23,087,000 feet, or 133% above production. Production was 9,919,000 feet. Unfilled Orders. Reports from 369 softwood mills give unfilled orders of 540.987,000 feet. on May 20 1933, or the equivalent of 20 days' production. The 535 identical mills—softwood and hardwood—report unfilled orders as 622,548,000 feet on May 20 1933, or the equivalent of 20 days' average production, as compared with 454,068,000 feet, or the equivalent of 15 days' average pro-duction on similar date a year ago. Last week's production of 408 identical softwood mills was 126,130.000 feet, and a year ago it was 114.271.000 feet; shipments were respectively 153,721,000 feet and 115,024,000; and orders received 210,908,000 feet and 113,133,000. In the case of hardwoods, 185 identical mills reported production last week and a year ago 8,415.000 feet and 10,093,000:shipments 18,749,000 feet and 11,396.000, and orders 18,366,000 feet and 10,150,000 feet. West Coast Movement. The West Coast Lumbermen's Association wired from Seattle the following new business, shipments and unfilled orders for 180 mills reporting for the week ended May 20: SHIPMENTS. NEW BUSINESS, UNSUIPPED ORDERS. Feet. Fees. Feet. Coastwise and Domestic cargo Domestic cargo delivery. _ _ 52,629,000 dedvery._ _ _179,279,000 intercoastal_ 34,644,000 12,242,000 Export 92,870,000 Export 20,592,000 Foreign 27,230,000 Ran 78,592,000 Rail , 6,000 Rail 6,769,000 Local 6,769,000 Total 350,741,000 113,976.000 Total Production for the week was 73,015,000 feet. Total 80,885,000 Southern Pine. The Southern Pine Association reported from New Orleans that for 106 and orders 48% mills rePortins, shipments were 35% above production, above production and 9% above shipments. New business taken during the week amounted to 38,291,000 feet,) previous week 41.756,000 at 110 mills); shipments 35,053,000 feet. (previous week 36,044,000); and production 25,899,000 feet, (previous week 26,227,000). Production was 41% and orders 61% of capacity, compared with 41% and 65% for the previous week. Orders on hand at the end of the week at 103 mills were 83,943,000 feet. The 103 identical mills reported an increase in production of 9%,and in new business an Increase of 68%, as compared with the same week a year ago. Western Pine. P The Western Pine Association reported from Portland. Ore., that for 113 mills reporting,shipments were 24% above production, and orders 95% above production and 57% above shipments. New business taken during the week amounted to 57,994.000 feet, (previous week 40,599,000 at 120 mills); shipments 36.856,000 feet, (previous week 35,115,000); and production 29,708,000 feet, (previous week 28,540.000). Production was 22% and orders 43% of capacity, compared with 20% and 28% for the previous week. Orders on hand at the end of the week at 113 mills were 139.608,000 feet. The 111 identical mills reported a decrease in production of 8%. and in new business a gain of 92% as compared with the same week a ear ago. Northern Pine. Minneapolis, Minn.. reported The Northern Pine Manufacturers of feet and Production from seven mills as 1.602,000 feet, shipments 2,381.000 production about the new business 3,440,000 feet. The same mills reported year. last the week for same same and new business 179% greater than Northern Hemlock. The Northern Hemlock and Hardwood Manufacturers Association, of from 16 mills as 220.000 feet, Oshkosh. Wis., reported softwood production were 14% of capacity shipments 1,488,000 and orders 1,154.000 feet. Orders identical mills reported a compared with 10% the previous week. The 15 new in business, compared 106% of gain a gain of 132% in production and with the same week a year ago. Hardwood Reports. Memphis, Tenn., reported The Hardwood Manufacturers Institute, of Production from 228 mills as 9,859.000 feet, shipments 21,466,000 anti new orders 45% of capacity, and 21% was Production business 21,117,000. 170 identical mills .compared with 20% and 48% the previous week. The greater than for the reported production 15% less and new business 81% same week last year. Manufacturers Association, of The Northern Hemlock and Hardwood mills as 60,000 feet, Oshkosh, Wis., reported hardwood production from 16 Orders were 31% of ca•shipments 1,621.000 and orders 1,787,000 feet. 15 identical mills /pacity, compared with 36% the previous week. The 3617 reported a loss of 81% in production and a gain of 84% in orders, compared with the same week last year. Crude Rubber Production in British Malaya During April Totaled 32,098 Tons Compared with 31,917 Tons in March. Production of crude rubber on large and small estates in British Malaya during April, according to results of the Far East Census for that month, totaled 32,098 tons, compared with 31,917 tons in March, and 30,564 tons during April 1932. Rubber production normally recovers in the Far East at this time following the "wintering period." An announcement issued by the Commodity Exchange, Inc., on May 23, continued: Rubber production for the first four months of 1933 totaled 131.396 tons, compared with 135,384 tons during the first four months of 1932. Rubber stocks were lower in Malaya at the close of April. Those on estates totaled 17,933 tons, against 18,318 tons at the end of March. and 20.730 tons at the end of April a year ago. Stocks in hands of dealers at the same time amounted to 20,735 tons, against 21.944 tons at the end of March. and 26,712 tons at the end of April 1932. Continental Automobile Co. and Hudson Motor Car Co. Announce New Models. The Continental Automobile Co., a division of the Continental Motors Corp., announces a new deluxe edition of the four-cyclinder "Beacon," utilizing the standard "Beacon" chassis. Whereas the standard "Beacon" will be continued at the original list prices of from $355 to $395,f.o.b. factory, the deluxe models are priced as follows: 2-passenger business coupe, $425; 5-passenger, 2-door sedan, $440; 5-passenger, 4-door, sedan $460. All prices are list, f.o.b. factory. The Hudson Motor Car Co. is offering a new "Terraplane" Special Six with a 113-inch wheelbase at the basis price of $505. The former "Terraplane" Special Six was on a 106inch wheelbase. The new car is an intermediate model between the Standard "Terraplane" Six which lists at a base price of $425 and the "Terraplane" Eight with a base price of $565. According to Detroit dispatches, the American Austin Car Co. has increased prices approximately $15 a car on some of its popular models. World Wheat Production in 25 Countries Reported 5% Below Last Year by United States Department of Agriculture. Wheat acreage in 25 countries, excluding Russia but including both winter wheat for harvest and the intended spring wheat acreage in the United States and Canada, is reported at 184,686,000 acres, or about 5% below the 194,121,000 acres in 1932, according to the Bureau of Agricultural Economics, U. S. Department of Agriculture. The 25 countries, the Bureau announced, had about 75% of the estimated world wheat acreage last year outside of Russia. The Bureau, under date of May 20, continued: Winter wheat acreage remaining for harvest in the United States is only 27,096,000 acres out of 39,985.000 acres sown last fall. A decrease of more than 4,000,000 acres in winter sowings is reported for Russia. No definite figures are as yet available from Australia where a smaller acreage is also in prospect. The Bureau says that if Canadian farmers carry out their intentions to plant spring wheat, the total 1933 wheat acreage in Canada will be 25,685,000 acres compared with 27,182,000 acres in 1932. About 6% of the acreage seeded to wheat in Canada in the fall of/1932 has been abandoned, leaving 514,000 acres for harvest in 1933, compared with 536,000 acres in 1932. Chile Admits Lack of Wheat—Must Buy 1,000,000 Bushels. The following from Santiago (Chile), May 22, is from the New York "Times": Because of insufficient Chilean production, Chile will have to buy abroad more than 600,000 quintals (more than 1,000,000 bushels) of wheat, according to President Alessandri. Intensification of farming is being fostered, while commercial agreements with Argentina contemplate the importation of livestock across the Andean frontier under low tariffs. Plans for International Action at Geneva to Deal with Wheat Surplus. Geneva advices (Associated Press) May 24 stated that the Council of the League of Nations was informed that day of a definite plan for international action to deal with the wheat surplus. The advices continued: The Council received and adopted a report from the economic committee saying that when the delegates to the international wheat conference meet again in London they hope to submit to the world economic conference a plan providing: (1) For limitation of production and, if necessary, of exports. 3618 Financial Chronicle (2) For liquidation of stocks. (3) For maintenance of a reasonable import margin in European importing countries. "A substantial rise in the price of wheat," the report said, "would be a powerful remedy for the distress of agriculturists and would help materially in mitigating the general depression." Winnipeg Wheat Pool Out of Red-Price Advance Makes Canadian Government's Operations Profitable. From the "Wall Street Journal" of May 13 we take the following from Ottawa: With the Winnipeg wheat price climbing up to around the 65-cent level, wheat price stabilization efforts of the Canadian Government through John I. McFarland have emerged from the red. Mr. McFarland, with Government backing, acquired some 75.000,000 bushels of wheat at around 53 cents a bushel, in addition to which he has been charged with responsibility of liquidating another 75,000,000 bushels passed on to him from the wheat pools. The Government stands to take care of whatever loss might be incurred through price stabilization efforts, but in case of a profit being realized it goes back to the grower and presumably would be turned over to the provinces by the wheat pools on account of their debts. The Government's plan to provide bonuses on a dozen or so export commodities, also may not cost anything, if sterling holds at its present strength or better. When the British pound was being quoted at $4.12 it was proposed to bonus commodities listed to extent necessary to make the return to the farmer $4.60. Extension of the bonus plan to affect many additional commodities has been widely agitated since the budget was announced in Parliament. Distribution of Beet Sugar During April Increased 23,809 Tons as Compared with April 1932. United States beet sugar distribution for the month of April 1933, amounted to 115,393 long tons, raw sugar value, according to a report received by B. W. Dyer & Co., sugar economists and brokers, from the Domestic Sugar Bureau, the Dyer Company announced on May 12. This is an increase of 23,809 tons compared with April 1932. The announcement also said that distribution for the first four months of 1933 amounted to 427,705 tons, an increase of 50,357 tons compared with the corresponding period of last year. Milk Strike'Tin Wisconsin Ended May 19 Following Truce Between State Officials and Leaders of Co-operative Milk Pool-Victory Claimed by Both Sides in War Lasting Six Days at Cost of $1,000,000. A truce between State officials of Wisconsin and leaders of the co-operative milk pool halted the milk strike in Wisconsin early May 19. It was reported that the strike, which lasted six days, cost the taxpayers $1,000„000. Upwards of 30,000 persons participated, one of whom was killed and many wounded. Victory has been claimed by both sides. United Press advices from Madison, May 19, said that the pool had laid down the following five demands: Recalling of National Guardsmen; abolition of the two-price system for milk; reorganization of the State Department of Agriculture into a oneman commission; prohibition against manufacturing of food products by chain stores; recognition as the largest organization of dairy farmers in Wisconsin. The advices said that under terms of the truce, the farmers received: Under terms of the truce, the farmers received: Guarantee of a conference between Federal authorities and the committee on establishment of a fair price for farm products; recommendations to Congress and the Legislature on a basis of the committee's findings; recognition of their repudiation of blame for violence in the milk war. With regard to the truce the same account stated: The armistice was reached after a long conference during which Governor Albert Schmedeman received an anonymous threat on his life. Armed National Guardsmen patroled capital corridors as the State and strike officials reached an agreement providing that the fighting should stop while a committee of five men investigate the farmers' demands and make recommenda tions to the State and National Legislatures. More than 20,000 farmers cheered the announcement here. They marched to the University of Wisconsin campus, singing and cheering and hailing the truce as a victory for their forces. The strike, intended to keep milk supplies from cities, became an unofficial civil war during the six days it was in progress. More than 32 units of the National Guard were sent into the fighting zones. Activity in the Cotton Spinning Industry for April 1933. The Bureau of the Census announced on May 20 that, according to preliminary figures, 30,966,794 cotton spinning spindles were in place in the United States on April 30 1933, of which 23,416,680 were operated at some time during the month compared with 23,429,122 for March, 23,659,100 for February, 23,766,968 for January, 23,775,136 for December, 24,349,506 for November, and 23,362,862 for April 1932. The aggregate number of active spindle hours reported for the month was 6,569,136,738. During April the normal time of operation was 243 % days (allowance being made for the observance of Patriots' Day in some localities), compared with 27 for March, 233 % for February, 25% for January, 26 for December, and 253 for November. Based on an activity of 8.96 hours per day the average number of spindles operated during April was 29,622,731 or at 95.7% capacity May 27 1933 on a single shift basis. This percentage compares with 93.9 for March, 95.0 for February, 95.1 for January, 87.2 for December, 96.9 for November, and 70.5 for April 1932. The average number of active spindle hours per spindle in place for the month was 212. The total number of cotton spinning spindles in place, the number active, the number of active spindle hours and the average hours per spindle in place, by States, are shown in the following statement: State. Spinning Spindles. Active Spindle Hours for April. In Place April 30. Active During April. 30,966,794 23,416,680 6,659,136,738 212 Cotton-growing States 19,051,214 New England States_ 10,868,844 All other States 1,046,736 16,752,042 6,041,556 623,082 5,136,587,480 1,307,269,967 125,279,291 270 120 120 Alabama Connecticut Georgia Maine Massachusetts Mississippi New Hampshire New York North Carolina Rhode Island South Carolina Tennessee Texas Virginia All other States 1,659,970 638,380 2,834,914 718,010 2,882,078 150,536 779,342 241,344 5,221,918 925,860 5,416,458 511,760 173,290 628,308 634,512 486,310,244 138,401,829 858,888,514 151,675,510 581,424,893 46,435,748 173,019,497 55,507,309 1,377,271,616 238,897,662 1,962,223,172 190,052,667 45,556,050 138,989,801 134,482,226 260 138 262 157 100 214 155 98 224 131 344 317 162 206 150 United States 1,873,366 1,002,568 3,280,970 968,176 5,840,820 216,756 1,112,916 567,808 6,140,904 1,827,100 5,682,828 599,664 281,968 673,304 897.646 Total. Average per Spindle in Place. Work in Planta, of Ford Motor co. to Be Increased. A program, which will steadily increase employment and production in Ford Motor Co.factories at Detroit, Mich., during the summer months, was announced by Henry Ford on May 22. Mr. Ford said that at present 35,000 workmen are employed in the Detroit manufacturing units and the factories have reached a production figure of 2,500 units a day. According to Associated Press advices from Detroit, May 22, Mr. Ford also said: Things are looking better to-day than they have since the 1929 market crash, but no easy times are in sight for any one yet. We are all feeling better for three reasons: first, because it is spring; second, because President Roosevelt is working away and actually accomplishing things; third, because there has been a substantial increase in employment. Steel Mills in Gary, Ind., Rehire 3,000 Workers. More than 3,000 men have been called back to work by steel mills in Gary, Ind., "the steel capital of the mid-west," according to Associated Press advices from Gary, May 18. An order for 75,000 tons of steel at "The Gary Works," plant of the Illinois Steel Co., and a pick-up among companies which manufacture automobile parts, railway cars,farm machinery and other implements of steel are responsible. The advices also noted that steel company executives are optimistic for the first time since the depression put one out of every three families among Gary's 100,000 population on the unemployment relief rolls. According to the advices some of Gary statistics are: 1. Illinois Steel Company working at 82% of capacity compared with 10% a month ago. 2. Forty-five hundred employees on the job at the company's huge plant -"The Gary Works." 3. Consistent drop in production and employment halted for the first time since 1929. 4. Pig iron in storage for months being sold, with the price up 60 cents a ton at $16. 5. Inland Steel Company reported planning a tin mill to cost from $10,000,000 to $15,000,000. 6. Elgin Joliet 84 Eastern Railroad, chief rail transport agency in the area, hiring men and replacing equipment. The Gary Works' order is for use in building California's San Francisco. Oakland bridge. It will serve as a "backlog" to keep the furnaces going In the Gary works for perhaps a year. Pay of 2,500 Employees of Nashua Mfg. Co. Raised. Effective May 29, wages of the 2,500 employee s of theNashua Manufacturing Co., with mills in Nashua, N. H. and Lowell, Mass., were increased on May 22. The increases, according to Associated Press advices from Nashua. May 22, are on a sliding scale, varying according to the departments. It was not made known whether the advance will cover a cut made last summer. Textile Mills Increase Wages of 30,000 Workers. Associated Press advices from Lawrence, Mass., May 20, said that five mills in greater Lawrence have announced wage increases for their 30,000 employees, effective May 22. The increases, according to the advices, are as follows: The American Woolen Company and the Pacific Mills announced 123,4% Increases and the Arlington, Monomac and Belden mills said they had granted. "higher scales." Agent Walter M. Lamont, of the Wood Worsted Mill, announced the increase for all American Woolen Company plants in Include the Wood, Ayer, Washington and Shawsheen this area. These wilt mills. Volume 136 Financial Chronicle The Pacific Mills said the increases would affect their worsted, print works and rayon division. John T. Mercer, of the Arlington Mills, the Monomac and the Selden worsted plant in Methuen made the simple announcements that a "higher scale would exist after May 22." Officials of the Acadia Mills, cotton manufacturers, and the H. T. Stevens & Sons Company, the latter with plants in Andover, North Andover, Haverhill and other places, said readjustments of wages would be made beginning May 22. Cotton Industry in Texas Reported by University of Texas—Sales and Unfilled Orders Increase. A spectacular increase in both sales and unfilled orders characterized activity at the 21 Texas cotton mills reporting to the Bureau of Business Research of The University of Texas. The Bureau under date of May 20 said: Unfilled orders at the close of April totaled 14,842.000 yards, or more than three times as great as the 4,086,000 yards reported at the close of April last year. Whereas the normal seasonal increase in unfilled orders between March and April on the basis of experience back to 1927 is only 11%, this year unfilled orders at the close of April were 52% greater than those at the close of the preceding month. At the present rate of production, unfilled orders are enough for three months run, the best showing since May 1929. One mill superintendent, in speaking of the large increase In unfilled orders, stated that the gain was not due to "large" orders, but to a great many small orders. Sales increased from 5,228,000 yards in March to 7,987000 yards in April; a gain of 53%: last year in April sales amounted to only 2,743,000 yards. Sales not only made a substantial percentage increase over those for the preceding month, but the relation of production to sales was much better—sales in April were practically 70% greater than output whereas the preceding month sales were greater than production by only 10%. Production totaled 4,757,000 yards, a gain of 47% as compared with production in April last year but down 2% from that for March. Bales of cotton used rose from 4,752 in March to 5.121 bales in April, or 7.8%; last year in April only 3,125 bales were used. Domestic Cloth Sales Continue to Exceed Current Output. Domestic cotton cloth business continued active during the week ended May 20, according to the New York Cotton Exchange Service, with the volume of sales by mails again in excess of the current increased production. Under date of May 22 the Exchange Service continued: On some lines of cotton goods sales were made through July and August Business was of a broad character. Heavy cotton goods for mechanical purposes sold more freely than for many weeks, although the volume on these goods was still much below normal. Goods prices continued their upward movement, with advances of an eighth to a quarter of a cent a yard reported on numerous lines of unfinished goods. Discounts on ducks were shortened, and some wide goods for industrial use moved up a cent a yard. Manufacturing margins on standard unfinished cotton goods have widened appreciably in recent weeks as a result of the active demand for goods, leaving cotton manufacturers a wider margin for profit as against unremunerative margins a few months ago. Cotton mill activity increased further this past week and is now at the highest rate in several years. Shipments of goods are running ahead of the current relatively high rate of production, and stocks of goods are decreasing. Mill activity is expected to continue high until restrictive legislation becomes operative. Petroleum and Its Products—East Texas Field Pressure Being Exhausted by Unbounded Production— Senate Committee May Present Oil Bill Shortly— exas Governor Approves Measure—Prices Steadying as Industry Looks to Late Developments as Solution of Inter-State Conflicts. The practically uncontrolled production in the East Texas field, which has resulted in that sector producing more than 1,000,000 barrels of crude daily during the past few weeks, is wreaking havoc in the bottom-hole pressure of the field and may ultimately prove the solution of the deadening influence East Texas has had on the business of the entire oil producing territory of the Nation. It is now estimated by engineers that the field cannot continue for more than 60, or at the most, 90 days under present conditions before operators will have to install pumps to bring the oil to the surface. The necessity for installing such pumping equipment will automatically close a vast number of the smaller wells whose production would not warrant the necessary expenditure for equipment. While this condition will prove beneficial to the manufacturers of pumping outfits, who estimate that $50,000,000 worth of business will develop for them in East Texas and Oklahoma City, at the same time the increase cost of production will force crude prices up, benefiting thereby all of the oil producing centers elsewhere. Contrary to the viewpoint of some of her officials who have openly denounced Governmental interference with the Texas oil situation, Governor Ferguson of Texas has wired her approval and support of the Capper-Marland Bill which, as described here last week, would give Secretary of the Interior Ickes control of the industry. Governor Ferguson telegraphed Secretary Ickes as follows: "The Marland Bill meets with my approval, and I think its early passage is demanded to stop the illegal and over-production of oil in Texas and perhaps elsewhere. We have a deplorable con. - T 3619 dition in Texas and, from reliable information, it appears that the production of oil in violation of our proration law exceeds the amount permitted by our proration laws. "In my opinion prompt action by the Federal Government is the only effective remedy of this condition which is resulting in waste of our most valuable resources and at the same time an inexcusable loss in taxes to the State and the royalty owners." Efforts to have the Marland Bill in the House of Representatives made a part of the Administration's industryrecovery bill have proved unsuccessful, and it is probable that the measure will carry through as an independent bill, although sentiment has been expressed that the general industries bill would cover the petroleum industry in a satisfactory manner, and would eliminate the "pointing up" of petroleum as being in special need of legislative control. Late reports from Washington indicate that the CapperMarland measure may be brought before Congress for action on Monday or Tuesday of next week. Various interests in the industry, both pro and con, have concentrated upon official Washington in the past week, and delegations are over-running the Congressional Halls, while Congressmen are being flooded by petitions and individual comments. Meanwhile, the status of crude in the various oil fields has, to a great extent, improved. The East Texas price has become steady at 25c. a barrel, and movement to refineries has been good. Considerable quantities of East Texas crude have been purchased by Canadian interests. Heavy rail shipments have been going through to refineries at Winnipeg, Moose Jaw and Regina. Further commendation of Administration efforts in behalf of the oil industry was given Thursday by Herbert L. Pratt, chairman of the board of Socony-Vacuum, who told stockholders that he believed "the sincere endeavor on the part of the Administration at Washington and within the industry itself to bring about a balance of supply and demand will result in an improvement in the situation." Price changes follow: May 22.—Pennsylvania grade crude oils advanced 10c. per barrel. Prices of Typical Crudes per Barrel at Wells. (All gravities where A. P. I. degrees are not shown.) Bradford, Pa $1.37 Eldorado. Ark.,40 Corning,Pa .85 Rusk, Tex.,40 and over .47 Salt Creek, Wyo.,40 and over__ _ _ Illinois .42 Darst Creek Western Kentucky Mid-Continent, Okla.,40 dc above__ .25 Midland District. Mich Hutchinson, Tex., 40 and over__ .25 Sunburst, Mont Spindletop, Tex., 40 and over____ .25 Santa Fe Springs, Calif.,40 cle over Winkler,Texas .25 Huntington, Calif., 26 Smackover, Ark., 24 and over____ .20 Petrone. Canada .52 .25 .23 ,23 .70 1.05 .75 .75 1.75 REFINED PRODUCTS—SOCONY GASOLINE PRICES REDUCED AS NEW POLICY BECOMES EFFECTIVE—BUNKER FUEL OIL STRONGER HERE AS GULF MARKET ADVANCES— COMPANIES START DISCOUNT MOVEMENT IN OHIO— MIDCONTINENT BULK GASOLINE MARKET FIRMER. Inauguration of the new price policy adopted by Standard Oil Co. of New York, resulted in reductions ranging from 1-10c. to Mc. in that company's tank car postings. The new policy bases prices here upon the Gulf cargo markets, and, therefore, the change in postings is not necessarily reflective of any new development locally. Under the new schedule "Socony" gasoline, above 65 octane, is posted at 4.85c. in New York, 5c. at Portland, Me., 4.90c. in the Boston district, and 4.85c. in the Providence area. Buffalo s posted at 4.75c., based on Oil City, Pa. Marked improvement in bunker fuel oil in the Gulf market, where prices have been slowly advancing until now the posting is 55c. a barrel as against 42c. a short time ago, is being reflected in a much stronger market tone locally. Advances which had been expected more than a month ago, but which were apparently eliminated when East Texas went on a producing "rampage," are again being discussed. The new lubricated-gasoline, which is now being introduced throughout the East, presents a new competitive slant to local business. Socony places on sale to-day its "climate control" gasoline in New York and New England, under the name of "Mobilgas" as a companion to its wellestablished "mobiloil." Tydol has countered with its new, so-called "revolutionary" gasoline, Triple X. These gasolines, although containing power which but a short time ago would have classified them as "premium" gasolines, are being offered at regular prices. Out in Ohio another series of "cash discounts" has been started, the first announcement being that of Sinclair Refining Co., which on Tuesday, May 23, offered a 2c. discount on all gasoline sold for cash at its service stations. Sinclair made this move openly, declaring it was made necessary by the action of competitors in making the same proffer secretly. 3620 Financial Chronicle Posted price of Ethyl remains at 183/2c. and regular at 15c. However, as almost all business is done on a cash basis, the discount amounts practically to a 2c. reduction. As an indication that Sinclair's move may be construed as the beginning of a price war, Standard Oil Co. of Ohio immediately met the "Aiscount," which is effective in Cuyahoga County, including the city of Cleveland. Reports from midcontinent areas indicate that distress offerings of gasoline have been exhausted, and the markets therefore have shown consistent gains during the past few days. Prices on lower grades of gasoline have moved up from Yo. to Mc. a gallon. Considerable interest was aroused throughout both the eastern and western marketing territories by intimations that the long-drawn out receivership of the Richfield Oil Company may be brought to a close within the next few weeks. The offer of Standard Oil Company of California is highly favored by many interests, and, unless Cities Service or Sinclair enter the negotiations in a definite manner shortly, it appears probable that Standard will absorb the Richfield properties. One conjecture which is causing much comment is the possibility of Cities Service and Standard of California arriving at some mutual understanding whereby the California Standard organization would utilize Richfield's eastern seaboard company, the Richfield Oil Corporation of New York, while Cities Service would control the California organization. This would give Cities Service a strong hold on the west coast territory, while the Standard, entering the east, would be brought into direct competition with Standards of, New York and New Jersey. Lubricating oils locally showed greater activity this week and prices are firm, especially for Pennsylvania products. Kerosene continues easy and in light demand. Price changes follow: on all gasoline May 23.-Sinclair Refining Co. posts 2c. cash discount Ohio. sold through its service stations in Cuyahoga County, posted by discount May 24.-Standard On Co. of Ohio meets 2c. cash Sinclair in Cuyahoga County. gasoline into May 22.-Standard Oil Co. of New York puts new tank car showing reduceffect, based on prices at Gulf cargo markets. New prices, Socony, above 65 octane: tions of from 1-1Cc. to Mc. a gallon, follow: Providence, 4.85e. New York, 4.35c.; Portland, Maine, Sc.; Boston. 4.90C.; Unbranded.-New York, 4.60c.; Portland, Maine, 4%c.: Boston. 4.65c; Providence, 4.60c. Gasoline. Service Station, Tax Included. 8.128 n.is New Orleans 8.152 Cleveland New Yora 12 18 Philadelphia .19 Denver Atlanta 115 San Francisco: .15 Detroit Baltimore 144 grade Third 17 Houston .145 Boston Above 65 octane._ .185 195 .165 Jacksonville Buffalo 219 33 Premium .12 Kansas City Chicago .14 Louis St. 125 Minneapolis .15 Cincinnati •Ices 2 cents cash JI•count. Kerosene, 41-43 Water White, Tank Car, F.O.B. Ltd. Refinery. N. Y.(Bayonne)S.05-.05%i Chicago $.64%-.034 .03 I Los Ans..ex_ .0434-.06 I Tulsa North Texas Fuel 0 I. F.O.B. Refinery or Terminal. $65 Gulf Coast C California 27 plus D N.Y.(Bayonne)3.75-1.001Chleago 18-22 D_.4254-.50 5 .75 Bunker C .70 .60 Philadelphia C Diesel 28-30 D-__. 1.65 New Orleans C Gas Oil, F.O.B. Refinery or Terminal. 3.01% Tulsa ChicagoN.Y.(Bayonne)$.01% 1-.04 32-36 G 0 28 plus G 0_3.035, Refinery. F.O.B. Lots. Car Tank U. S. Gasoline, Motor (Above 65 Octane). $.04-.0434 Chicago N.Y.(Bayonne)N.Y.(Bayonne)Shell Eastern Pet_S.0434 New Orleans ex_ .05-.05% Standard 011, N.J..04-.04% Arkansas Motor. U. S___$.044 New York.05-.07 California Colonial-Beacon- .05 Motor,standard .05 .04% Los Angeles. ex_ .001-.07 Stand. Oil, N. Y. .0485 a Texas .05-.05% ports .0485 Gulf Gulf Tide Water Oil Co .05 .05-05% .05 Tulsa Republic 011 Richfield 011(Cal.) .05% .05% Pennsylvania _.Warner-Quin. Co.. .05% a "Fire Chief." 8.05. a Richfield "Golden." z "Fire Chief," 5.05. Crude Oil Price Advanced in Pennsylvania. Leading purchasing agencies in Pennsylvania announced Increases of 10 to 13 cents in the prices of crude oil on May 22. According to Associated Press advices from Pittsburgh, the new prices are: $1.07; Eureka, $1.02; Pennsylvania grade in Southwest Pennsylvania lines, Buckeye, 90 cents. New York Transit, $1.37: National Transit, $1.37, and Buckeye was increased 13 cents; the others 10. Rise in Tax on Oil Output Approved by Governor Ferguson of Texas. The Daniel bill, raising the 2% tax on oil production in Texas to 2 cents per barrel and bringing oil pipe lines under the State intangible tax levy upon earnings, was approved by Governor Ferguson of Texas on May 22. The new law will become effective about Aug. 30. York and New England territory. The changes are in accordance with the company's new marketing policy based on prices at ports on the Gulf Coast of Texas instead of changes in the condition of the market itself. Discounts on Gasoline Canceled by Standard Oil Co. of Indiana. The Standard Oil Co. of Indiana has announced the can cellation of its agreements allowing a 1-cent discount on gasoline for the commercial trade on service station deliveries, effective May 26. Advices from Chicago to the "Wall Street Journal" of May 22 said that the practice of granting a 1-cent discount on tank-wagon deliveries of 25 gallons has already been abandoned. According to the advices the company also plans to send out cancellation notices on all tankwagon delivery agreements allowing a discount off the tankwagon market. on accounts using 500 gallons or more a month. Petroleum Imports Declined in April 1933. According to figures collected by the American Petroleum Institute, imports of petroleum (crude and refined) at the principal ports in the United States in April 1933 totaled 3,971,000 barrels, a daily average of 132,367 barrels, compared with 5,124,000 barrels, a daily average of 165,290 barrels, during the preceding month. The Institute's statement follows: IMPORTS OF PETROLEUM AT PRINCIPAL UNITED STATES PORTS (CRUDE AND REFINED OILS). (Barrels of 42 Gallons.) Month. Al Atlantic Coast PortsBaltimore Boston New York Pauackgobla Others. Apra. March. February. January. 300,000 201,000 2,203.000 968,000 299.000 239,000 133,000 3,139.000 1,117,000 496.000 215,000 134,000 3,374,000 353,000 303,000 237,006 135,000 1,990,000 797,000 205,000 3,971,000 5,124,000 4,379,001) 3,364,000 Total Dail average At Gulf Coast Pons132.367 165,290 156,393 108,516 Total x66,000 y17,000 Daily average 2,357 548 Al AU Untied States Ports3,971,000 6,124,000 4,445,000 3,381,000 Total Daily average 132,367 165,290 158.750 109.064 x Received at Port Arthur. o Received at New Orleans. z 65,000 barrel at New Orleans and 97.000 barrels at Port Arthur. DISTRIBUTION OF TOTAL IMPORTS. (Barrels 01 42 G .lions.) Month. April. March. February. January. Crude Fu.,1 oil 2,576,000 1,395,000 3.690,000 1,434,000 2,671,000 1,774,000 2,033,000 1,348,000 Total 3,971,000 5.124,000 4,445,000 3.381.000 Receipts of California OilS at Atlantic and Gulf Coast Ports Lower in April 1933. Receipts of California oil (crude and refined) at Atlantic and and Gulf Coast ports during the month of April 1933 amounted to 1,142,000 barrels, a daily average of 38,067 barrels, according to the American Petroleum Institute. This compares with 1,642,000 barrels, a daily average of 52,968 barrels, during the previous month. The detailed statement follows: RECEIPTS OF CALIFORNIA OIL AT ATLANTIC AND GULF COAST PORTS (CRUDE AND REFINED). (Barrels 01 42 Gallons.) Month ofAt Atlantic Coast P itsBaltimoreBoston New York Philadel his Others April. March. 180,000 157,000 435,000 232,000 148,000 512.000 309.000 432,000 February. January. 255,000 46,000 399,000 307,000 322,000 30,000 46,000 648,000 116,000 560.000 Total 995,000 1,410,000 1,329,000 1,400,000 Daily average 33,167 45,484 45,161 47,464 At Gulf Coast PortsTotal x147,000 1232,000 x74,000 ...... Daily average 4,900 7.484 2,643 ...... At Mantic and GulfCoastPortsTotal_ 1.142,000 1,642.000 1.403,000 1,400,000 Daily average 38,067 45.161 52,968 50.107 x Fuel oil received at Port Arthur. DISTRIBUTION OF TOTAL CALIFORNIA OIL RECEIPTS. (Barrels of 42 Gallons.) _ A yrU. Month ofMarch. JanuarY• February. Al atlantic COW PonsGasoline Kerosene Gas oil F. el oil Lubrioanta Total Gasoline Prices Revised by Standard Oil Co. of New York. The tank-car gasoline price schedule of the Standard Oil Co.'of New York was lowered, effective May 23; by reductions ranging from 1-10 to 1/J cent a gallon, throughout New May 27 1933 829,000 854,000 234,000 313.000 554,1)&5 492,000 220,000 75,000 616,000 1,142.000 1.642.0no 1 sea non 632,000 336,000 4-14;666 8.000 _ 1.400.000 Crude Oil Production Continues Ahead of Same Period in 1932-Inventories Increase. The American Petroleum Institute estimates that the daily average gross crude production for the week ended May 20 1933 was 2,705,350 barrels, compared with 2,733,850 barrels per day during the preceding week, a daily average production for the four weeks ended May 20 of 2,617,800 barrels and an average daily output of 2,225,350 barrels for the week ended May 21 1932. Stocks of motor fuel at all points increased 443,000 barrels during the week ended May 20 1933 as compared with a decline of 222,000 barrels during the previous week. Reports received for the week ended May 20 1933 from refining companies controlling 91.6% of the 3,856,300 barrel estimated daily potential refining capacity of the United States, indicate that 2,266,000 barrels of crude oil daily were run to the stills operated by these companies, and that they had in storage at refineries at the end of the week, 33,272,000 barrels of gasoline and 124,009,000 barrels of gas and fuel oil. Gasoline at bulk terminals, in transit and in pipe lines, amounted to 20,380,000 barrels. Cracked gasoline production by companies owning 95.4% of the potential charging capacity of all cracking units, averaged 482,000 barrels daily during the week. The report for the week ended May 20 1933 follows in detail: Copper Market Firm. The domestic market for copper held at 7c., Connecticut, throughout the week, with sufficient business coming to hand to absorb the offerings of thoseAsposed to part with the metal. Nearly all of the tonnage sold during the week came from custom smelters. Large producers were inclined to hold aloof. The undertone of the market was firm on continued favorable reports on the movement of metal into consumption and the uncertainty as to how far the Administration intends to go in respect to Inflation. The brass industry has been enjoying a substantial recovery. Large mills are operating at 42 to 60% of what might be regarded as normal, against less than 20% a short time ago. In respect to some of the smaller DAILY AVERAGE PRODUCTION OF CRUDE OIL. (Pleuras in Barrels of 42 Gallons Each.) Oklahoma Kansas Panhandle Texas North Texas West Central Texas West Texas East Central Texas East Texas Conroe Southwest Texas North Louisiana Arkansas Coastal Texas (not Incl. Conroe) Coastal Louisiana Eastern (not Including Michigan) Michigan Wyoming Montana Colorado New Mexico California.. Week Week Ended May 20 1933. Ended May 13 1933. 461,250 110,400 43,100 48,850 20,200 159,750 58,450 805,050 71,400 52,250 26,200 29,900 112,900 41,450 89,150 16,050 29,400 5,750 2,550 36,100 485.200 484,200 115.950 43,700 49,600 21,200 157,750 58,550 807,600 73,550 49,750 27,450 29,950 114,750 42,250 87,750 16,400 30,950 5,900 2,650 36,050 477,900 Average 4 Weeks Ended May 20 1933. 442,600 114,800 45,500 50,450 21,900 159,150 58,500 742,600 60,100 50,300 27,550 30,100 114,250 41,700 88,700 16,550 30,550 5,650 2,500 36,050 478,300 Week Ended May 21 1932. 430,800 96,150 52,750 50,750 25,400 185,550 56.900 338,100 54,450 29,450 34,350 114,650 4i,150 105,000 19,750 39,000 7,950 3,100 36,600 503,500 2.705.350 2.733.850 2.617.800 2.225.350 Total Note.-Tho figures indicated above do not include any estimate of any oil which might have been surreptitiously produced. CRUDE RUNS TO STILLS, MOTOR FUEL STOCKS AND GAS AND FUEL OIL STOCKS, WEEK ENDED MAY 20 1933. (Figures in barrels 01 42 Galons.) Daily Refining Capacity of Plants. District. Reporting. Potential Rate. 644.700 East coast Appalachian_ _ _. 144,7 Ind., Ill., Ky___ 434,900 Okla.,Kans.,61o. 459,300 Inland Texas.. _ 315,300 Texas gulf 535,000 146,000 Louisiana gulf North La.-Ark 89,300 Rocky Mountain 152,000 California 915,100 Total. % 638,700 135,000 424,000 390,000 177,700 542,000 142,000 79,000 138,000 866,100 99.1 95.0 97.5 84.9 56.4 97.7 97.3 88.5 90.8 94.6 Crude Runs to &Ws. % Daily OperAverage. atsd. 463,000 93,000 304.000 216,000 101,000 455,000 108,000 44,000 40,000 442,000 a Motor Fuel Stocks. Gas and Fuel Oil Stocks. 6,579,000 72.5 16,681,11 1 822,000 68.9 2,177,000 71.7 8.673,000 3,779,000 5.5.4 4,885,000 3,076,000 56.8 1,737,000 2,164,000 83.9 5,921,000 5,957,000 76.1 1,522,000 1,969,000 316,000 579,000 55.7 656,000 29.0 1,264,000 51.0 13,986,000 98,428,000 Totals week: May 20 1933.. _ 3,856,300 3,632,500 91.62,266,000 64.1 57,162,000 124,009,000 May 13 1933_ _ 3,856,300 3.532,500 91.6 2,243,000 63.5 56,719.000 123,308,000 a Below are set out estimates of total motor fuel stocks on U. S. Bureau of Mines basis for week of May 20 compared WI h certain May 1932 Bureau figures: 58,760,000 barrels A. P. L. oath-late of B. of M. basis, week May 20 1933_6 68,811,000 barrels U. S. B. of M. motor fuel stocks, May 1 1932 69,135,000 barrels U.S. B. of Si. motor fuel stocks, May 31 1932 b Estimated to permit comparison with A. P. I. Economics report, which Is on Bureau of Mines basis. c Includes 33,272.000 barrels at refineries, 20,380,000 bulk terminals, In transit and pipe lines and 3,510,000 barrels of other motor fuel stocks. Tin and Silver Prices Advance-Copper and Lead Firm on Fair Demand. "Metal and Mineral Markets" for May 25 says that outwardly the market for major non-ferrous metals appeared to be a quiet affair in the week that just ended, but a peek at the sales record for the period discloses that a good volume of business was put through, especially in zinc and tin. Toward the close interest revived considerably on news from Washington that the Federal Reserve banks have been instructed to resume open-market operations. This was interpreted as signifying that inflation of credit would be the next step to revive activity. Naturally, prices firmed up in nearly all directions. The week closed with prices for zinc, tin and silver higher, and copper and lead unchanged, though firm. The bill to regulate industry during the period of the "emergency" attracted wide interest in the metal trade. The same publication continues as follows: Zinc, 3621 Financial Chronicle Volume 136 plants the rate of activity has actually reached normal. The demand for fabricated products has been quite general in character. Wire mills have not yet shared extensively in the recovery, though some improvement has been registered in recent weeks. Copper authorities believe that good inroads are being made into the invisible stocks of copper and that actual domestic consumption of the metal at present is probably in excess of 30,000 tons a month. This would indicate that consumption of copper has increased since the first of the year by 50%. Leaders in the industry are greatly concerned over the trade practice code that will have to be drawn up as soon as the bill proposed by Senator is exWagner becomes law. Final approval of the measure by Congress pected soon. This means, according to operators, that the copper inhigher dustry will be forced to co-operate as perhaps never before, and a market seems assured. and prices Foreign buying of copper again took on good proportions, in European centers held close to the United States limits. In fact, last Thursday prices abroad and here, reduced to a refinery basis, were even. Great Britain consumed about 10,439 metric tons of copper monthly during the first four months of the current year, according to the American of Bureau of Metal Statistics. This compares with a monthly average tons 10,933 tons in 1932, and 9,875 tons in 1931. France consumed 8,030 monthly in the first two months of 1933, against an average of 7,925 tons Italy monthly last year, and 9,342 tons monthly in 1931. Germany, year. and Japan are consuming copper at a slightly higher rate than last The German smelter output of copper during March amounted to 5,083 total metric tons, against 4,273 tons in February, making the quarter's Pro13,575 tons, compared with 13,344 tons in January-March 1932. tons, 11,274 against duction of refined copper amounted to 11,633 tons, tons. 38,139 and tons 34,847 totals making the respective quarterly Good Sales of Lead. sales Demand for lead improved, particularly late yesterday, total were held for the period being above an average week's business. Prices figure uniformly at the basis of 3.65c., New York, the contract settling St. Louis. Corof the American Smelting & Refining Co., and 3.525c., were the principal buyers, roders, particularly battery manufacturers, participating in a fair way in with cable and mixed metal interests also the trading. the disclosure by the The outstanding development of the week was the middle of the period by April statistics of the industry, issued about stocks of refined metal had the American Bureau of Metal Statistics, that was said to be the result increased again by 2.650 tons. This increase secondary sources, estimated of the large output during the month from where curtailment at 3,300 to 3,500 tons. Clean-up stocks from plants be a contributing measures became effective in April were also held to to several infactor. Statistics for May will probably show, according metal stocks. refined in tons formed observers, a decrease of about 2,500 Zinc Active and Strang. week and, Buying of zinc by galvanizers was fairly active in the last especially with concentrate again higher, prices strengthened materially, for demand In the last two days. A feature in the market was the good stocks permitted have must near-by material, indicating that galvanizers during the week to shrink to an abnormally low level. Prices received toward the close. ranged from 3.70c. to 3.85c., the top figure prevailing district, Prime Western With zinc concentrate at $27 per ton in the Tri-State bringing more than 4c. zinc, according to trade authorities, should be Tin Moves Up Again. which was accompanied by Following a quiet period early in the week, level for Straits, activity a downward movement in prices to below the 36c. change in trend began with in the tin trading improved materially. This news announced inflation of Tuesday,and was held to be the direct outcome business booked during on that day in Washington. The substantial consumer account, with the bulk the last two days was principally for manufacturers. Demand for block tin of the metal going to tin-plate volume. by tin-pipe fabricators continues to be of fair 18, Chinese tin, 99%, prompt shipment, was quoted as follows: May May 22, 32.125c.: May 23. 33.25c.: May 19, 32.60c.; May 20, 32.50c.; 32.50c.; May 24, 33.50c. Robert P. Lamont Says Steel Industry is in Sympathy with Purposes of National Industrial Recovery Bill-Head of Iron and Steel Institute Finds Threat of Foreign Competition Serious, but Believes Measure Will be Changed to Protect Domestic Producers-Sees Increased Use of Steel Tonnage in Construction Projects. Robert P. Lamont, President of the American Iron and Steel Institute, and former Secretary of Commerce,discussed salient features of the national industrial recorvery bill in an address before the annual meeting of the Institute in New York City on May 25, and declared that while the steel industry is in entire sympathy with the purposes of the measure he nevertheless doubted the constitutionality of that section that gives the President the power to issue and revoke licenses for industry as a means of enforcement. A serious omission in the bill, he said, was that it contains no provision to offset foreign competition which will be fostered by the proposed shorter working hours, and the maintenance of fair wages and prices. Mr. Lamont said: "It is obvious, of course, that the operation of the bill, the purpose of which is to shorten work hours and maintain fair wages and prices, will tend to increase costs and selling prices and thus make this market a still more attractive field than it now is for foreign goods. There is no provision now in the bill to offset this competition, but an amendment,which has been drawn, will do so if it is adopted. 3622 Financial Chronicle "The tariff truce until after the adjournment of the World Economic Conference is a serious difficulty, but it may not be insurmountable." The second part of the bill, Mr. Lamont remarked,creating a Federal emergency administration of public works and providing for a comprehensive construction program to be carried out under its guidance, will require the use of substantial steel tonnages and is therefore of particular interest to the steel industry. In commenting on that portion of the proposed law which exempts industry from the AntiTrust laws, under certain conditions, he said that the opportunity to experiment with this freedom, combined with more government supervision and regulation, may give the country a good basis on which to judge results before such a change is made a permanent policy of the government. Analyzing the facilities for industrial co-operation afforded by the measure, Mr. Lamont said: "It is with the industrial features of the bill, however, that we are more immediately concerned. The success of this plan in accomplishing its stated purpose will be determined almost entirely by the character of its administration and by the spirit and manner in which industry itself carries out the provisions of the law. The bill possesses such vast potentialitie s for good or evil, such great possibilities of success or failure in attempting self-government in industry, that it challenges all our practical experience and intelligence. The lip service which we have been so ready to render to the ideal of co-operation and the maintenance of ethical standards will now be supplemented by a very real co-operation and standards enforced by law. The selfish and often ruthless minority will now be compelled to conform to a code of fair and ethical practices which makes the welfare of the entire industry, and of the nation, its chief concern. "Moderation, restraint, fair play will be just as necessary in operating under this law as under existing competitive conditions. The conduct of business will not be any easier; indeed, it may be much more difficult than under the highly individualistic, independent conditions we have been accustomed to for many years." Production of Bituminous Coal and Pennsylvania Anthracite Increased During Week Ended May 13 1933. According to the United States Bureau of Mines, Department of Commerce, production of all coal increased during the second week in May. The total output of bituminous coal is estimated at 5,080,000 net tons, a gain of 270,000 tons, or 5.6%, over the week ended May 6 1933, and of 785,000 tons over the corresponding week of 1932. Anthracite production in Pennsylvania during the week ended May 13 1933 is estimated at 724,000 net tons, an increase of 60,000 tons, or 9%, over the preceding week. Output during the corresponding week last year amounted to 765,000 tons. During the calendar year to May 13 1933 there were produced 107,292,000 net tons of bituminous coal and 16,880,000 tons of anthracite, compared with 115,237,000 tons of bituminous coal and 19,673,000 tons of anthracite during the calendar year to May 14 1932. The Bureau's statement follows: ESTIMATED UNITED STATES PRODUCTION OF COAL AND BEEHIVE COKE (NET TONS). Week Ended May 13 1933.c May 6 1933.d Calendar Year to Dale. May 14 1932. 1933. 1932. 1929. Bitum. coal: a Weekly total 5,080,000 4,810,000 4,295,000 107,292,000 115,237,000 194,854.000 Daily aver_ - 847,000 802,000 716,000 950,000 1,022,000 1,724,000 Pa. anthra.: b Weekly total 724,000 664.000 765.000 16,880.000 19,673,000 26,919,000 Daily aver__ 120,700 110,700 127.500 151,400 176,400 241,400 Beehive coke: Weekly total 11,100 11,500 10,300 328,500 332,100 2.303.500 Daily aver__ 1,850 1,917 1,717 2,882 2,913 20,197 a Includes lignite, coa made into coke, local sales, colliery fuel. b Includes Sullivan County, washery and dredge coal, local sales and colliery fuel. c Subject to revision. d Revised. ESTIMATED WEEKLY PRODUCTION OF COAL BY STATES(NET TONS). Week Ended Stale. May 8 1933. April 29 1933. May 7 1932. May 9 1931. May Average 1929.a §§§§§§§ §§k§§§§ §§§§§§§ §§§§ C4M. MaCCi.;..7C:Ciet,.4.1, :064.ACT;V%-tt-:06006Cia :C. V.COOVWMM. N..1, MV.MV.N=W .V. CO NM . ON .; .; Total bituminous coal Pennsylvania anthracite 4,810,000 4,824,000 4,475,000 6,786.000 10,878.000 664,000 968,000 1,023,000 1,932,000 675,000 V......VI, VONON .V. CO §§§§§§§§§§§§§§§§§§§§§§§§§ a;..ini.ric7c4.-;c4t.:‘,7-706.5.cO-7.ic;•ar.it:o3.i, 4c>,-; Alabama Arkansas and Oklahoma Colorado Illinois Indiana Iowa Kansas and Missouri Kentucky-Eastern Western Maryland Michigan Montana New Mexico North Dakota Ohio Pennsylvania (bituminous) Tennessee Texas Utah Virginia Washington West Virginia-Southern b Northern c Wyoming Other States 01...00V.M0.0=.1 NM CO GIN ,., . 140,000 251.000 398,000 10,000 24,000 66,000 48,000 95,000 168,000 129,000 756,000 1,292,000 149,000 237,000 394,000 46,000 49,000 89,000 62,000 82,000 131,000 389,000 553,000 679,000 149,000 141,000 183,000 22,000 37,000 47,000 5.000 1,000 12.000 27,000 32,000 42.000 19,000 30,000 57,000 13,000 17,000 14,000 89,000 335,000 860,000 1,376,000 1,885,000 3,578,000 51.000 87,000 121,000 7.000 18,000 22,000 28.000 35,000 74,000 128,000 168,000 250,000 24,000 28,000 44,000 1,062,000 1,352,000 1,380.000 439.000 483,000 862,000 62,000 88.000 110.000 1,000 2,000 5,000 ,.........) 0..1 5 474 mil 5 400 non 5443000 7.809.000 12.810.000 a Average weekly rate for entire month. b Includes operations on the N. & W.; C. de 0.: K.& M. Virginian; and B. C. & G. c Rest of State, incl. Panhandle. May 27 1933 Steel Production at Highest Rate Since June 1931Operations Now at 38% of Capacity-Prices of Finished Steel and Pig Iron Higher. Renewed confidence in the persistence of recent improvement in the iron and steel market characterizes the attitude of both buyers and sellers, reports the "Iron Age" of May 25. Such hesitancy as was caused by the recent pause in steel demand or by the reaction in scrap has been dispelled by increased buoyancy in the automobile industry, a new spurt in tin plate business, a steady broadening of miscellaneous steel buying and further price advances on both finished steel and pig iron, adds the "Age," further going on to say: Buyers are offering less and less resistance to prices, evidently being impressed both by the earnestness of sellers and the possibility of subsequent stabilization at still higher levels under Government auspices. Steel production, under the stimulus of reaccelerated bookings, has again increased in most districts. Ingot output has risen from 23 to 25% at Pittsburgh,from 33 to 37% at Chicago,from 41 to 44% at Cleveland, from 38 to 42% at Birmingham and from 75 to 80% in the Wheeling district. The national average has advanced from 35% a week ago to 38% of capacity, the highest rate since June 1931. The widely held expectation of the industry that it would soon lose some of the support received from the motor car makers as summer approached is not being fulfilled. Retail demand for automobiles is gaining rather than losing momentum and total sales for May will surpass those of April by a wide margin. Motor car builders have accordingly revised their production schedules upward and it now seems likely that May assemblies will exceed 200,000 units. Steel releases by leading automobile makers indicate that little change in operating rates is contemplated for June. At least a mild recession in activities is still regarded as a possibility for July, although this opinion is subject to modification according to the course of retail sales. Tin plate demand has been swelled by sharply increased specificatio ns from the pineapple canning industry in Hawaii. The pineapple pack is now expected to be fully one-third larger than last year, possibly amounting to 8,000,000 cases. Tin plate output has risen above 80% of capacity. Fabricated structural steel lettings, at 15,500 tons, are the heaviest since early in April, with the exception of the first week of May when awards were made for the San Francisco-Oakland bridge. New projects of 18,100 tons include 10,000 tons for an extension of the West Side elevated highway in New York and 5,000 tons for a court house and jail in Kansas City. Plato fabricators continue to book sizable tonnages for brewing tanks, the outstanding award of the week being 1,000 tons for the Schnitz brewery at Milwaukee. Two thousand tons of plates, as well as 900 tons of shapes and 200 tons of steel bars, will be required for four destroyers for which the Navy Department will open bids on July 6. Reinforcing bar demand from distributers has been stimulated by a $4 a ton advance in mill prices, and standard pipe specificatio ns from jobbers have improved. The Pennsylvania Railroad will receive tenders May 26 on 5,000 tons of structural shapes, 1.400 tons of plates, 500 tons o reinforcing bars and 250 tons of sheet piling for piers at Baltimore. The Nickel Plate plans to scrap 6,000 cars, joining the ranks of other roads that have undertaken the demolition of old rolling stock. No new equipment purchases of consequence are expected, however, until the Government's plan for railroad coordination is perfected. Finished steel bookings at Chicago were the heaviest in 17 months. While growing consumption accounts in large part for the widespread gain In demand, consumers generally are closely following the price situation. Considerable tonnage for June shipment will probably be bought out for products on which price advances for third quarter are definitely established. The feature of price developments is the announcement of third quarter prices on the heavy tonnage sheet mill products, which are $3 a ton over recent asking prices. Hot-rolled strip has been marked up $1 a ton to 1.60c., Pittsburgh, and cold-rolled strip $2 a ton to 2c., Pittsburgh or Cleveland. Wire mesh has been advanced $4 a ton. Pig Iron in eastern Pennsylvania has advanced for the third time since April 1, going up $1 a ton. A 75c. a ton increase in Southern iron prices has occurred at Cincinnati. Buying is in good volume. At Chicago shipments are running double those of April. Scrap has weakened at Detroit and Pittsburgh but has advanced at Birmingham and St. Louis. The "Iron Age" composite price for heavy melting steel has declined from $9.83, a week ago. to $9.66 a gross ton. The "Iron Age" composite for finished steel has advanced from 1.867e. to 1.892c. a lb., while the pig iron average has risen from $14.41 to $14.56 a gross ton. Iron and steel exports in April, at 100,395 tons, were the largest since April 1931. Scrap accounted for 73% of the month's movement. Imports rose to 28,061 tons from 22,114 tons in March. THE "IRON AGE" COMPOSITE PRICES. FinishedpS ate se 1.892e. a Lb. edl.on steel bars, beams, tank plates. One werkaago 2 o3 1933' 1.867c. wire, rails, black pipe and sheets. One month ago 1.8670. These products make 85% of the One year ago 1.970c.1 United States output. High Low 1933 1 948e. Jan. 3 1.867o. Apr. 111 1932 1.977c. Oct. 4 1.926c. Feb. 2 1931 2 037e. Jan. 13 1.9450. Dee. 29 1930 2 273c. Jan. 7 2.0180. Dec. 9 1929 2.317e. Apr, 2 2.2830. Oct. 29 1928 2.2860, Dec. 11 2.217o. July 17 1927 2.4020. Jan. 4 2.212o. Nov. 1 May 23 1933. 314.56 a Gross Ton. P Iron. Based on average of bask: iron at Valley One week ago $14.41 furnace foundry Irons at One month ago 14.01 Philadelphia, Buffalo, Valley Chicago. and BirOne year ago mingham. 14.06 High. Low. 1933 $14.56 May 23 $13.56 Jan. 1932 14.81 Jan. 5 13.56 Dec. 6 10 93 30 1 15.90 Jan. 6 15.79 Dec. 15 18.21 Jan. 7 15.90 Dec. 16 1929 18.71 May 14 18.21 Dec. 17 1928 18.59 Nov. 27 17.04 July 24 1927 19.71 Jan. 4 17.54 Nov. 1 Steel Scram May 23 1933, 89.67 a Gross Ton. Based on No. 1 heavy melting steel One week ago 89.831 quotations at Pittsburgh. One month ago Philadelphia 8.83 and Chicago. One year ago 7.41 High. Low. 1933 $9.83 May 9 56.75 Jan. 3 1932 8.50 Jan. 12 6.42 July 5 1931 11.33 Jan. 6 7.62 Dec. 29 1930 15.00 Feb. 18 11.25 Dec. 9 1929 17.58 Jan. 29 14.08 Dec. 3 1928 16.50 Dee. 31 13.08 July 2 1927 15.25 Jan. 11 13.08 Nov.22 Volume 136 3623 Financial Chronicle Advancing four points, steel works operations last week rose to an average of 40%, highest in two years, and this week will show a further gain, states the magazine "Steel" of May 22. While automotive requirements are well sustained and still dominate, the base of the market structure broadens each week, continues this publication, which further goes on to say: The industry appears to be generating its own momentum, for actual price advances or serious threats of impending increases are driving in tonnage, which in turn emboldens producers to seek more remunerative levels. At 35 to 40% operations, a majority of steel interests now are breaking even.' With Government control of industry almost certain to result in higher wages and prices—its objectives—the prospects for a strong market this summer become more definite. Steel ingot production during the week increased in seven districts; remained stationary in two. At Wheeling, W. Va., the rate was 70%; Cleveland, 58; Worcester, 50; Youngstown, 45; Detroit and Buffalo, 38; Pittsburgh, 33; Birmingham, 30, and eastern Pennsylvania, 18. Tin plate mills this week will move up 20 points to 80%. Six blast furnaces have been blown in this month; two more are scheduled. Sheet prices have been advanced $3 a ton for third quarter by leading producers, and some new classifications have been adopted. Hot-rolled strip has been raised $2 a ton for that period, and cold-rolled strip to a minimum of 2.00c., which in most instances represents an increase of $2 a ton. Concrete reinforcing bars are up $4 a ton at Cleveland and about to be raised again at Pittsburgh; and highway reinforcing material Is $2 to $3 higher at New York and Boston. Pittsburgh fabricators anticipate an advance of $2 a ton on plain structural shapes for third quarter. Warehouse quantity differentials have been adjusted, raising prices on small orders, lowering them for tonnage. A rush to cover pig iron requirements preceded the general advance of 50 cents to $1 a ton last week in Ohio, Michigan, Indiana. Pennsylvania and Alabama, resulting in some unusually heavy tonnages booked In the Lakes districts. Cleveland furnaces took more than 12.000 tons. largely for third quarter. These advances have narrowed the general spread between foundry iron prices and scrap from $7.49 a ton in 1932 to $5.75. Scrap prices have leveled off, and in some districts are actually lower, though no basic weakness has developed in the market. Chrysler has sold 30,000 tons of scrap; and the New Haven RR., 25,000 tons. Structural steel awards for the week, 2,730 tons, relapsed to March levels. The Government construction program is not expected to be active for steel bidding until late in the summer. Specifications will be out shortly for 25,000 tons for transmission towers, Boulder Dam,Nevada, to Los Angeles. New York Central will open bids May 29 on over 7,000 tons of rails; Chicago Great Western has purchased 3,000 tons; and the British American Oil Co. has ordered 150 tank cars from a Candaian builder. Plate demand is broadening; 3,000 tons have been placed by the Philadelphia Gas Co. Bids are being taken on four Government destroyers requiring 4,000 tons of plates, shapes and bars "Steel's" iron and steel price composite this week is up 26 cents, entirely on advances in pig iron. The finished steel composite is unchanged at $45.10. while the iron and steel scrap composite has risen 25 cents to $9.41, highest since May 6 1931. Steel ingot production for the week ended May 22 averaged about 39% of capacity, according to the "Wall Street in the Journal" of May 23. This compared with 34 two weeks ago. The previous week and with 32 "Journal" adds: against 4034 in the Independents are credited with a rate of 45 preceding week and 3834% two weeks ago. For the U. S. Steel Corp. the in the week compared with 2934% rate is estimated at nearly 3334%, before and 2734% two weeks ago. The following table gives the percentage of output in the corresponding week of previous years with the approximate changes from the week immediately preceding: 1932* 1931 1930 1929 1928 1927 * Not available. Industry. U. S. Steel. Independents. 1 43 7334-1 95 —1 79 —3 8134+134 4434-154 79 —134 9935— 34 8134-5 89 +2 42 —1 69 —1 9234— 34 76 —2 74 +1 Current Events and Discussions The Week with the Federal Reserve Banks. The daily average volume of Federal Reserve Bank credit outstanding during the week ending May 24, as reported by the Federal Reserve banks, was $2,243,000,000, a decrease of $43,000,000 compared with the preceding week and an increase of $238,000,000 compared with the corresponding week of 1932. After noting these facts, the Federal Reserve Board proceeds as follows: On May 24 total reserve bank credit amounted to $2,219,000,000 a decrease of $35,000,000 for the week. This decrease corresponds with decreases of $57,000,000 in money in circulation and $15,000,000 in unexpended capital funds, non-member deposits, &c., and an increase of $40,000,000 in Treasury currency, adjusted, offset in part by an increase of $80,000,000 in member bank reserve balances. Bills discounted decreased $8,000,000 at the Federal Reserve Bank of New York, $5,000,000 at Cleveland and $18,000,000 at all Federal Reserve banks. The System's holdings of bills bought in open market declined $35,000.000 and of Treasury certificates and bills of $20,000,000, while holdings of United States bonds increased $10,000,000 and of United States Treasury notes $35,000,000. Beginning with the statement of May 28 1930, the text accompanying the weekly condition statement of the Federal Reserve banks was changed to show the amount of Reserve bank credit outstanding and certain other items not included in the condition statement, such as monetary gold stocks and money in circulation. The Federal Reserve Board's explanation of the changes, together with the definition of the different items, was published in the May 31 1930 issue of the "Chronicle" on page 3797. The statement in full for the week ended May 24, in comparison with the preceding week and with the corresponding date last year, will be found on subsequent pages, namely, 3677 and 3678. Beginning with the statement of March 15 1933, new items were included, as follows: 1. "Federal Reserve bank notes in actual circulation." representing the amount of such notes issued under the provisions of paragraph 6 of Section 18 of the Federal Reserve Act as amended by the Act of March 9 1933. 2. "Redemption fund—Federal Reserve bank notes," representing the amount deposited with the Treasurer of the United States for the redemption of such -notes. 3. "Special deposits—member banks" and "special deposits—nonmember banks," representing the amount of segregated deposits received from member and non-member banks. A now section has also been added to the statement to show the amount of Federal Reserve bank notes outstanding, held bo Federal Reserve banks and in actual circulation, and the amount of collateral pledged against outstanding Federal Reserve bank notes. Changes in the amount of Reserve bank credit outstanding and in related items during the week and the year ending May 24 1933, were as follows: 131115 discounted BilLs bought U. S. Government securities Other Reserve bank credit Increase (+) or Decrease (—) Since May 24 1933. May 17 1933. May 25 1932. $ $ TOTAL RES'VE BANK CREDIT__2,219,000,000 —35,000,000 +171,000,000 +1,000,000 +107.000,000 4,314,000,000 Monetary gold etock 1,969,000,000 +40,000,000 +179,000,000 Treasury currency adjusted Money in circulation 5 795,000,000 —57,000.000 +385,000.000 Member bank reserve balances —20,000.000 Unexpended capital funds, non-mem-2,194.000,000 +80,000,000 +94,000,000 514,000,000 —15,000,000 her deposits, ,kc Returns of Member Banks in New York City and Chicago—Brokers' Loans. Beginning with the returns for June, 1927, the Federal Reserve Board also commenced to give out the figures of the member banks in New York City, as well as those in Chicago, on Thursday, simultaneously with the figures for the Reserve banks themselves, and for the same week, instead of waiting until the following Monday, before which time the statistics covering the entire body of reporting member banks in the different cities included cannot be got ready. Below is the statement for the New York City member banks and that for the Chicago member banks, for the current weeks, as thus issued in advance of the full statement of the member banks, which latter will not be available until the coming Monday. The New York City statement, of course, also includes the brokers' loans of reporting member banks. The grand aggregate of brokers' loans the present week shows a decrease of $55,000,000, the total of these loans on May 24 1933 standing at $563,000,000 as compared with $331,000,000 on July 27 1932, the low record for all time since these loans have been first compiled in 1917. Loans "for own account" decreased from $594,000,000 to $539,000,000, while loans "for account of out-of-town banks" remain unchanged at $17,000,000, and loans "for account of others" at $7,000,000. CONDITION OF WEEKLY REPORTING MEMBER BANKS IN CENTRAL RESERVE CITIES. New York. May 24 1933, May 17 1933. May 25 1932. Loans and investments—total 6 786200.000 6,847200,000 6,583200,000 Loans—total 3 287,000,000 3,352,000,000 3,825,000,000 1,663,000,000 1,735,000,000 1,810.000,000 1,624,000,000 1,617,000,000 2,015,000,000 On securities All other Investments—total U. S. Government securities Other securities 3,499,000,000 3,495,000,000 2,758,000,000 2 384,000,000 2,378,000,00081,781,000,000 1,115,000,000 1,117,000,000 977,000,000 Reserve with Federal Reserve Bank Cash In vault 913,000,000 37,000,000 823,000,000 36.000,000 899,000,000 42,000,000 Increase (+) or Decrease (—) Since May 24 1933. May 17 1933. May 25 1933. Net demand deposits Time deposits Government deposits 5,601,000,000 5.558,000,000 5,133,000.000 685,000,000 692,000,000 766,000.000 105,000,000 105,000,000 101.000,000 312,000,000 —18,000,000 43,000,000 —35,000,000 1 862,000,000 +25,000,000 3,000,000 —6,000,000 Due from banks Due to banks 62.000.000 81,000,000 75,000,000 1,300,000,000 1,300,000,000 1,108.000,000 —159,000,000 +5,000.000 +337,000,000 —10,000,000 Borrowings from Federal Reserve Bank_ 3624 Financial Chronicle May 24 1933. May 17 1933. Afay 25 1932. $ Loans on secur. to brokers & dealers; For own account 539,000,000 594.000,000 350,000,000 For account of out-of-town banks_ _ 17,000,000 17,000,000 37,000,000 For account of others 7,000,000 7,000,000 6,000,000 Total On demand On time 563,000,000 618,000,000 393.000,000 413,000,000 150,000,000 472,000,000 146,000,000 294.000,000 99,000,000 Chicago. 1,186,000,000 1,146.000,000 1,353,000,000 Loans and investments—total Loans—total On securities All other 635,000,000 637,000,000 904,000,000 333,000,000 302,000,000 335,000,000 302,000,000 518,000,000 386,000.000 Investments—total 551,000,000 509,000,000 449,000,000 U. S. Government securities Other securities Reserve with Federal Reserve Bank_ __ _ Cash in vault Net demand deposits Time deposits Government deposits Due from banks Due to banks Borrowings from Federal Reserve Bank.. 343,000,000 208,000,000 166,000,000 37,000,000 872,000,000 351,000,000 8,000,000 225,000,000 258,000,000 312.000,000 197,000,000 184,000,000 42,000,000 860,000,000 350,000,000 8,000,000 221,000,000 254,000,000 262,000,000 187,000,000 200,000,000 15,000,000 892,000,000 380.000,000 17,000,000 156,000,000 279,000,000 1,000M May 27 1933 Ambassador Davis Tells Geneva Disarmament Conference United States Will Consult with Other Nations in Event of Threats of War—Pledges this Country to Ban Assistance to Guilty Nation if It Agrees with Others as to the Aggressor-Address Termed End of American Policy of "Isolation"—Ambassador Davis Pleads for Speedy Action on Disarmament. A restatement of the position of the United States with respect to international disputes was given before the World Disarmament Conference at Geneva on May 22 by Norman Davis, Ambassador-at-Large. In an address which many observers contended marked a complete change of American policy as regards European affairs, Mr. Davis pledged the United States as "willing to consult the other States in case of a threat to peace with a view to averting conflict." He also virtually rejected the idea of neutrality in time of war by declaring that the United States, if it agreed in the international designation of an "aggressor" nation, would refrain from any steps tending to defeat collective action to coerce that nation. Mr. Davis added that the "simplest and most accurate definition of an aggressor is one whose armed forces are found on alien soil in violation of treaties." He also accepted, on behalf of this country, "effective, automatic and continuous supervision of armaments." The co-operation of the United States along all the lines mentioned was made conditional upon "substantive reduction of armaments" at the Geneva conference. Mr. Davis's address listed the steps which the United States would be prepared to take for the maintenance of world peace, on this point saying: Complete Returns of the Member Banks of the Federal Reserve System for the Preceding Week. The Federal Reserve Board resumed on May 15 the publication of its weekly condition statement of reporting member banks in leading cities, which had beer discontinued after the report issued on March 6, giving the figures for March 1. The present statement covers banks in 90 leading cities instead of in 101 leading cities as formerly, and shows figures as of Wednesday, May 17, with comparisons for May 10 1933 and May 18 1932. Corresponding data by weeks beginning March 1 will be published, it is stated, in I wish to make clear that we are ready not only to do our part toward the substantive reduction of armaments, but if this is effected by general the Federal Reserve Bulletin. international agreement, we are also prepared to contribute in other ways to Licensed member banks formerly included in the condition the organization of peace. In particular we are willing to consult the other statement of reporting member banks in 101 leading cities, States in case of a threat to peace with a view to averting conflict. Further than that, in the event that the States, in conference, determine that but not now included in the weekly statement, had total a State has been guilty of a breach of the peace in violation of its international loans and investments of $712,000,000 and net demand, obligations and take measures against the violator, then, if we concur in time and Government deposits of $661,000,000 on May 17, the judgment rendered as to the responsible and guilty party, we will refrain compared with $711,000,000 and $650,000,000, respectively, from action tending to defeat such collective effort which these States may thus make to restore peace. on May 10. As is known, the publication of the returns for the New This passage was generally interpreted as indicating the York and Chicago member banks was never interrupted. willingness of the United States to limitation of the doctrine These are given out on Thursday, simultaneously with the of "freedom of the seas" in certain instances. Most Eurofigures for the Reserve banks themselves and covering the pean comment, made shortly after the address was delivered, same week,instead of being held until the following Monday, agreed that it signalized the end of an American policy of before which time the statistics covering the entire body "Isolation" from the rest of the world. of reporting member banks in 90 cities cannot be got ready. Mr. Davis stressed the fact that a new policy regarding In the following will be found the comments of the Federal armaments was incorporated as a fundamental part of the Reserve Board respecting the returns of the entire body of Versailles Treaty, and that that policy embodied the prinreporting member banks of the Federal Reserve System for ciple that armaments are a matter of general concern and the week ended with the close of business on May 17: that the time has passed when each nation would be the sole The Federal Reserve Board's condition statement of weekly reporting judge of its own armaments. The initial step under that member banks in 90 leading cities on May 17 shows increases for theweek principle, he said, was the disarming of Germany and her of $28,000,000 in loans and investments, $172.000.000 in net demand deposits and $21,000,000 in reserve balances with Federal Reserve banks, former allies. He added, however, that it was not intended and a decrease of 347.000,000 in time deposits. that the Central Powers should be subject for all time to a Loans on securities increased $19,000,000 at reporting member banks in special treatment in armaments, but that "there has been a the New York district and $9.000.000 at all reporting member banks. "All other" loans increased $23.000,000 in the New York district and corresponding duty on the part of other Powers, parties to $8,000.000 at all reporting banks, and declined 159,000.000 in the Boston peace treaties, that by successive stages they, too, would district. Holdings of United States Government securities increased $20.000.000 bring their armaments down to a level strictly determined in the New York district and $26,000,000 at all reporting member banks, by the needs of self-defense." Mr. Davis said that the first while holdings of other securities declined $10,000.000 in the New York step toward disarmament was the acceptance of the British district, $5.000,000 in the Chicago district and $15,000,000 at all reporting banks. draft convention reducing army, navy and aviation material. Borrowings of weekly reporting member banks from Federal Reserve While mentioning, in the course of his speech, Chancellor banks aggregated $85,000,000 on May 17, an increase of 35.000,000 for the Hitler's recent pronouncement on Germany's position regardweek. Licensed member banks formerly included in the condition statement Of ing disarmament,and while expressing approval of the Hitler reporting member banks in 101 leading cities, but not now included in the reply to President Roosevelt's message, Mr. Davis was firm weekly statement, had total loans and investments of $712,000,000 and net demand, time and Government deposits of $661,000,000 on against any measures toward re-armament. May 17, compared with $711,000.000 and $650,000.000, respectively, on May The text of Ambassador Davis's address at Geneva, as 10. A summary of the principal assets and liabilities of the reporting member made public on May 22 by the Department of State at Washbanks, in 90 leading cities, that are included in the statement, together with changes during the week and the year ended May 17 1933, ington and as printed in the New York "Times," follows: are as follows: The initiative taken by the President of the United States in communicatIncrease (+1 or Decrease (—) ing directly with the heads of the States participating in the Economic and Ri/$4.0 May 17 1933. Loans and investments—total_ _16,346,000,000 Loans—total On securities All other Investments—total U.S. Government securities__ _ Other securities Reserve with F. R. banks Cash in vault Net demand deposits Time decosits Government deposits Due from banks Due o banks Borrowings from F.R. banks 8,421,000,000 3,724,000,000 4,697,000,000 7,925.000,000 4,934,000,000 2,991,000,000 1,557,000,000 199,000,000 10,681,000,000 4,271,000,000 218,000,000 1,328,000,000 2,762,000,000 85,000,000 May 10 1933. 3 +28,000,000 May 18 1932. +17,000,000 +9,000,000 +8,000,000 +11,000,000 +26,000,000 —15,000,000 +21,000,000 —12,000,000 +172,000,000 —47,000,000 —13,000,000 +73,000,000 +62,000,000 +5,000,000 —1,696,000,000 —650,000,000 —1,046,000,000 +1,144,000.000 +1.102,000,000 +42,000,000 —53.000,000 +20,000,000 +299,000,000 —337,000,000 —77,000,000 +192,000,000 +185,000,000 —43,000,000 —552,000,000 Disarmament conferences was prompted by the pressing need for concerted and decisive action to solve the interrelated problems with which these two conferences must deal. The Disarmament Conference has reached the moment for definite decisions. We must face the issue; we must now determine whether the nations of the world propose to go forward with progressive disarmament or revent to the pre-war system of unrestrained competition in armaments with all the continuance of the international suspicion and fear which this will involve. At the end of the World War the peoples of all States and their leaders resolved that the suicidal armament policy of the preceding decades must be changed. They were convinced that this policy had been one of the contributing factors which brought about the war. Hence a new policy regarding armaments was incorporated as a fundamental part of the peace settlement. This policy, adopted to prevent a future race in armaments, was based on the principle that arntaments are a matter of general concern and that Volume 136 Financial Chronicle sole judge of its armathe time had passed when each State should be the ments. Obligation Assumed Voluntarily by Victors. the disarmament of To carry out this conception, provision was made for taken unprecedented the defeated Powers and at the same time a decision was an obligation In history whereby the victorious States voluntarily assumed to reduce their own armaments. of Germany and As a first step the peace treaties reduced the armaments on their part. her allies with a view to rendering impossible any aggression forces of military In fact, the theory behind these treaties was that the the maintenance of the disarmed Powers should be fixed on the basis of but no more. International order and the necessary policing of frontiers, that the armies The whole purpose of these provisions was to guarantee at home. of Germany and her former allies should thenceforth stay that the It would neither have been just nor wise, nor was it intended, in armaCentral Powers should be subject for all time to a special treatment part of other ments. There is and has been a corresponding duty on the too, would Powers, parties to peace treaties, that by successive stages they, the needs bring their armaments down to a level strictly determined by of self-defense. implications While the United States is not bound by the provisions or the of our of those treaties, I have no hesitancy in saying that it is the will other Powers People, interpreted by President Roosevelt, to join with the in disarming down to that level, and we are prepared to exert our influence but to bring this about; not by theoretical statements of good intentions, by decisive and progressive reduction of armaments through international agreement. The present situation admits of no further delay. The States of the world must either go forward in good faith to carry out in all its implications the disarmament policy which they adopted in 1919 or we must recognize frankly that this policy has been abandoned and reconcile ourselves to reverting to a race in competitive armament. War Inevitable if Conference Fails. If the latter course is taken the consequences are inevitable. Sooner or later there will be the breakdown of the peace machinery which has been so laboriously built up since 1918 and the world will be swept into another war. .The immediate result of a failure here would be a setback to economic recovery, which depends upon such mutual confidence between nations as will permit a real collaboration in the task of restoring international trade and the freer movement of goods. This is impossible in a situation clouded by the fear of war. National budgets which should be devoted to productive and social ends are burdened with excessive and wasteful expenditures for armament. This leads in turn to an almost unbearable load of taxation on all our peoples. If we thus candidly face the situation there is really no alternative for a sane world to consider. It is inconceivable that the responsible leaders of any country in the world could hesitate over this issue. We cannot shirk the duty which this choice imposes upon us. We cannot safely delay taking effective steps to reduce armaments to a purely defensive basis. As far as the position of the United States is concerned we are frank to recognize that we have a simpler problem to meet than have many of the European Powers. Fears and apprehensions based on historical and racial grounds have led to the maintenance of large armaments in Europe. These large armaments have caused resentment, particularly in the less-armed countries. The resulting political tension has in turn reacted to keep up the general level of armaments. We are not unaware of the difficulties which lie in the way of reduction in armaments here. It is our very detachment from this situation which gives us hope that we may exert a helpful influence toward the realization of our common objective. But we are prepared to aid in other ways than through exerting our influence, and I shall take this opportunity to show what we are prepared to do. What the United Stales Is Prepared to Do. As regards the level of armaments we are prepared to go as far as the other States in the way of reduction. We feel that the ultimate objective should be to reduce armaments approximately to the level established by the peace treaties; that is, to bring armaments as soon as possible through successive stages down to the basis of a domestic police force. In particular, as emphasized by President Roosevelt, we are prepared to join other nations in abolishing weapons of an aggressive character which not only are the more costly to construct and maintain, but at present are those most likely to lead to a breach of the peace. To cut the power of offense and remove the threat of surprise attack would do more than anything else to lessen the danger of a war. Almost a year ago the American Goverrunent submitted a proposal along these lines. This proposal, which received the approval of a large number of States, was not acceptable to certain States and was therefore not adopted. A few weeks ago the British Prime Minister submitted a detailed proposal which embodies many of the features of the American plan of last year. As the British proposal represents a real measure of disarmament, we accept it whole-heartedly as a definite and excellent step toward the ultimate objective. We therefore are prepared to give our full support to the adoption of this plan. In addition, I wish to make it clear that we are ready not only to do our part toward the substantive reduction of armaments, but if this is effected by general international agreement we are also prepared to contribute in other ways to the organization of peace. In particular we are willing to consult the other States in case of a threat to peace with a view to averting conflict. Further than that, in the event that the States, in conference, determine that a State has been guilty of a breach of the peace in violation of its international obligations and take measures against the violator, then, if we concur in the judgment rendered as to the responsible and guilty party, we will refrain from any action tending to defeat such collective effort which these States may thus make to restore peace. Effective Supervision Held Indispensable. Finally, we believe that a system of adequate supervision should be formulated to insure the effective and faithful carrying out of any measure of disarmament. We are prepared to assist in this formulation and to participate in this supervision. We are heartily in sympathy with the idea that means of effective, automatic and continuous supervision should be found whereby nations will be able to rest assured that as long as they respect their obligations with regard to armaments the corresponding obligations of their neighbors will be carried out in the same scrupulous manner. 3625 formulated measures for the The Disarmament Conference has already Commission. The powers now establishment of a permanent Disarmament The Commission will proposed for this Commission may well be reinforced. essential than that of effectively have many important duties, but none more supervising the fulfilment of the treaty. disarmament must be attained We recognize that the ultimate objective in the next and decisive step is by stages, but we believe that the time for long overdue and cannot be further postponed. upon the solemn obligaVirtually all the nations of the world have entered as an instrument of national tion of the Briand-Kellogg Pact to renounce war pacific means. policy and to settle their disputes only by we must definitely make If we are to keep faith with these obligations a conference table instead of around up our minds to settle our disputes preparing to settle them on the battlefield. proposed an undertaking It was with such a thought that the President rights, armed forces should by the nations that, subject to existing treaty not be sent across national frontiers. Simplest Definition of an Aggressor. that the simplest and In the long run we may come to the conclusion whose armed forces are most accurate definition of an aggressor is one found on alien soil in violation of treaties. One was the appreThere have been two main obstacles to disarmament. the reluctance of the hension that Germany proposed to rearm; the other world to take a real armed Powers of Europe in the present state of the step in disarmament. conclusive evidence If at this decisive point any nation should fail to give rearm, even though the of its pacific intentions and insist upon the right to disarmament, then other Powers take effective and substantial steps toward Disarmament Conference, the burden of responsibility for the failure of the would rest on the with the incalculable consequences of such a failure, shoulders of that nation. solved if one nation The problem with which we are faced cannot be inevitably would be insists on rearming while the others disarm. The result another race in armaments. unaware in the As regards the action of the other Powers we are not in the way of the United States of the political difficulties which still lie reduction of European armaments. its We recognize the legitimate claim which any State has to safeguard security. But we are firmly convinced that in the long run this security can best be achieved through a controlled disarmament by which the military strength as of the most heavily armed nations is progressively reduced to a level such that provided for in the peace treaties. To the extent that armaments create political tension they in themselves very constitute a menace to peace and may jeopardize the security of the nations which maintain them. agree and If we take a long step in the direction of disarmament to-day claim by stages to achieve our ultimate objective we can meet any legitimate of the powers bound by the peace treaties and at the same time effectively help to insure peace. A few days ago the conference met a serious obstacle to further progress in its detailed examination of the British plan. Since then there has been an appreciable change. New German Attitude Makes for Success. The recent speech by the German Chancellor before the Reichstag clarifying the German attitude and policy with regard to disarmament and endorsing the proposal of President Roosevelt has been most helpful. This, and also the subsequent announcement made here by our colleague, Herr Nadolny, of Germany's acceptance of the British plan as the basis of the future convention, have so altered the situation as to justify us in assuming that we can now resume our consideration of this plan with real hope of agreement. Our present agenda is a consideration of the chapters on war material. It was understood that other related subjects might be introduced, and my colleagues may feel that I have made wide use of the latitude thus given me. But in closing my remarks and to bring our discussion back to the concrete question before us, I desire to state that the American delegation accepts the chapter on material and expresses the hope that the other delegations will join in this acceptance and that the way may thus be cleared for an immediate decision on the concrete proposals in this chapter. emergency This conference is not only a disarmament conference. It is an ession. prn co ference of a world in a state of political uncertainty and economic deThe next weeks will bring the decisive test. It will require courage and statesmanship to meet this test, but the failure to do so will go far to shatter any hope of world organization for peace. As far as the United States is concerned, our abilities and our incentive to collaborate whole-heartedly in the continuing task of helping to maintain world peace depend in large measure upon the results achieved here in disarmament. United States Ready to Share Responsibility. President Roosevelt's message is a clear indication of the fact that the United States will exert its full power and influence and accept its just share of responsibility to make results in disarmament definite, prompt and effective. The results of success here and now would bring benefits beyond all calculation. It would give new confidence and hope—confidence that governments can still govern and leaders lead; hope that a definite step in dia. armament having at last been taken, economic recovery will be hastened and the millions in all countries who are only asking for the opportunity to work will have restored to them the possibility of living in peace and of earning their daily bread. If by a great act of faith each and every nation will now summon the courage to take a decisive step in general disarmament, conditions throughout the world will so improve that we can henceforth face the future with a real feeling of security and confidence. With the alternative to success in mind, we cannot allow ourselves to fail. Ambassador Davis Outlines for Disarmament Conference Terms of United States Pledge to Consult When Peace is Threatened—Statement Encourages Hope of Success at Parley—Formula Defining "Aggressor" is Framed. F Incident to the disarmament conference in Geneva, Large, NormanH. Davis, Uni -StiFeT—Airib restated on May 24, in legal terms, the position of the United States with reference to consultation and action 3626 Financial Chronicle against an aggressor nation. According to Mr. Davis, the United States would undertake to consult when peace was threatened, would not hinder collective action against an aggressor, and would withdraw protection from any American who interfered with such action. Mr. Davis' statement was regarded at Geneva as acting to solidify sentiment among the representatives of the various nations, and also was believed to meet objections which had been raised by the British delegation, which is reluctant to extend to the entire world the consultative privilege proposed for Europe. The same session of the conference witnessed the submission by the security committee of a definition of the term "aggressor," following along the lines of suggestions made by Maxim Litvinoff on behalf of the Soviet delegation. This definition listed the following acts as constituting aggression: The declaration of war; the invasion by armed forces of the territory of another State with or without a declaration of war; an attack by land. naval or air forces; a naval blockade, or support to armed bands formed within the State which have Invaded another State or refusal to deprive such bands of protection. It was further stipulated that aggression should not be excused or justified in any instance by political, military, economic or other considerations. On the preceding day (May 23) Foreign Minister, Joseph Paul-Boncour, of France, repeated to the conference a proposal made in 1932, that heavy war material classified as offensive weapons be turned over to the League of Nations instead of being destroyed. The plan visualizes that such heavy materials would be employed against an aggressor nation by a nation which had been attacked. The statement made by Ambassador Davis 9n May 24, explaining the pledge of the United States to consult on violations of peace, was as follows: Sir John Simon has presented revised draft of Part I (of the British consultation plan]. It may therefore be helpful if I state how we would relate our action to what he has submitted if it proves acceptable to the general commission. As my colleagues are aware, we propose to set forth our policy in the matter of consultation and neutral rights by a unilateral declaration. As an illustration and without binding myself to exact words, our declaration would be in some such form as the following: "Recognizing that any breach or threat of a breach of the Pact of Paris (the Kellogg-Briand pact) is a matter of concern for all signatories thereto. the Government of the United States of America declares that, in the event of a breach or threat of a breach of this pact, it will be prepared to confer with the view of maintenance of the peace in the hope that consultation for such purpose is arranged pursuant to Articles of the disarmament convention. "In the event that a decision is taken by the conference powers in consultation in determining the aggressor with which, on the basis of its independent judgment, the Government of the United States agrees, the Government of the United States will undertake to refrain from any action and to withhold its protection from its citizens who engage in activity which would tend to defeat the collective efforts which the States in consultation might have decided upon against the aggressor." This declaration would be drafted in final form previous to the signature of the disarmament convention and would be made at the time of our deposit of our ratification of that convention. Ambassador Bingham Indorses President Roosevelt's Peace Message—Says Anglo-American Co-operation Means World Peace. Unqualified approval of "every syllable" of President Roosevelt's recent peace message to the nations of the world was expressed on May 17 by Robert W. Bingham, United States Ambassador to Great Britain, upon his arrival in England. Mr. Bingham's remarks, as reported by the London correspondent of the New York "Times," follow: May 27 1933 sisted," said Mr. Young, "that our Allies sign the bond to return money which we had advanced." Continuing, he said: They could only repay that debt by sending us their goods. To the extent which we would not accept sufficiently of their goods, they could only pay by sending us their gold. So, having refused their goods, we took their gold until we ruined the currency and banking systems of the world, including our own, until international exchanges and trade were paralyzed. The fact about it is, the sad fact, the indicting fact, that we insisted upon the bond, we insisted upon the performance of the bond, and then we made it utterly impossible for the bond to be performed. We violated that basic obligation of relationship which underlay the bond itself. As to the action of the United States in keeping apart from the League of Nations prompted the following by Mr. Young: Now, may I ask, with great respect for the letter of the bond, did we escape our obligations to the world by refusing to sign the covenant of the League? We escaped the bond, to be sure, but did we escape the obligations? We escaped the bond, to be sure, but did we escape the penalty? Mr. Young also said: Had the commerce of the world been developed and enlarged; had barriers to trade been diminished rather than Increased; had our efforts and our capital been applied to productive ends; had we not tried to gain by speculation what we did not earn, the normal indebtedness resulting from such extension of credit would not have been burdensome on the borrower or Insecure to the lenders, because every dollar would have paid its own way and more. Have we learned the lesson that we cannot lend at home and then close the bank where our debtor has his money? Have we learned that we cannot lend abroad and then destroy international trade, which is the only bank out of which our foreign indebtedness can be paid? From the New York "Times" we take, as follows, the outstanding portions of Mr. Young's speech: To-day you hear on every hand about the threatened disaster to our civilization. Perhaps these carping people are cutting the dates on the wrong tombstone. Perhaps it is the enemies of our civilization that are dying. Our worst enemies are not men, but the false notions and destructive prejudices by which men are misled. Of these we are all the victims. If getting rid of them is a painful process—and it always is—it is also a highly educative process. We are learning, for example, that you cannot dispose of living questions merely by writing a treaty, a constitution or a statute. We are learning it in reference to prohibition. England is learning it in her relations to her dominions beyond the seas. Prance is learning it with reference to armaments and her relationship to the countries on the eastern boundaries of Europe. The world is learning it in connection with the war treaties. I venture the statement that the lamentable things happening in Germany to-day have their seeds in unfortunate clauses of the Treaty of Versailles. But Germany will learn, too, that she cannot disfranchise many hundreds of thousands of her citizens, among whom may be counted her oldest families, her most productive students, and her most effective and loyal workers both in peace and war, by any ordinance or decree. The whole world is learning that treaties, constitutions, statutes, ordinances and bonds are good only to the extent that they are made coincident with basic human relationships which have the approval of that sensitive, quick-acting and dominant power, the public opinion of the world. The question that I put to you is whether we have been relying too much on the letter of the bond and not enough on those basic obligations which must always underlie it. The inquiry is not without significance in these stirring times when we pass in review the things we have done or left undone. It is futile to look for a scapegoat on whom to cast our faults. It is very human for us to pass the blame along. Self-Examination Urged. Perhaps it would be better if we all accepted our own share and then resolved to profit by our own mistakes. If this is true of individuals, it is equally true of nations. In spite of Burke, we are indicting other nations daily and they repay us in kind. This form of international exchange is wholly vicious. Barriers to it rather than to trade would be helpful. Can it not be replaced everywhere by a little self-examination? Suppose we begin by looking at a few of our "We must, if honest with ourselves," said Mr. Bingham, "realize and acts as a nation, acts authorized and until recently sustained by the votes recognize the very grave situation that confronts the whole world to-day. of large majorities, so there can be no question of individual responsibility. I hope,as far as I can,to contribute to the most important thing in the world When we refused to sign the covenant of the League of Nations we escaped —restoration of the world to health and the protection of the world against from the letter of the bond. What a glorious achievement, we thought, to be be believe can achieved by genuine the cruelty and obscenity of war, which I free from entanglements abroad! How secure we were in our self-satisfacunderstanding and co-operation between Great Britain and ourselves. tion and isolation at home! "We feel that in the United States, and I know you feel it here. I canContentment and happiness were to reign while we mixed those two not believe any sort of problem or difficulty cannot be solved when apingredients so essential to them, prosperity for ourselves and pity for them proached in an attitude of common sense and good-will." less well off than we—the most insidious and satisfying form of self-adulation that I know. Debt Policy of U. S. Declared by Owen D. Young as And as if that were not enough, we added Having Ruined Currency and Banking Systems everybody else in the world what they ought atolittle seasoning by advising do. To be sure, we broke of World—Action in Calling for Payment in Gold down the barriers of our isolation sufficiently to suggest to our Allies in the Held as Cause—Criticizes Aloofness of U. S. war that they should return the advances which we had made to them. We even suggested that in that respect the letter of the bond from League of Nations. would be very satisfying. The policy of the United States in insisting upon payment When, signed the bond, they said that, due to their stress and the of war debts in gold by debtor nations was held by Owen D. ravages ofhaving the war, they could pay only by collecting from Germany, we Young, author of the Young Reparations Plan, as responsible lifted the high moral standard that we at least, perhaps the first in the for present world conditions. Speaking before the Associa- history of the world, would not as victors impose penalties on the vanquished. To keep the standard pure, it was necessary to say that reparations had tion of Junior Leagues of America, in Philadelphia, on no relationship to the debts. We were right by the letter of the bond. May 15, Mr. Young declared that "the whole world is learnSeem Our Ignoring of League. ing that treaties, constitutions, ordinances and bonds are Now, may I ask, with great respect for the letter of the bond, did we good only to the extent that they are made coincident with escape our obligations to the world by refusing to sign the covenant of the basic human relation§hips which have the approval of that League? We escaped the bond, to be sure, but did we escape the obligations? sensitive, quick-acting and dominant power, the public We escaped the bond, to be sure, but did we escape the penalty? opinion of the world." Mr. Young went on to say that "the We face a world disturbed economically and politically, each reacting on question that I put to you is whether we have been relying the other, where the costs of armaments threaten the economic life blood of the nations, and where armies endanger their peace. We do not have to too much on the letter of the bond and not enough on those wait for war to reap the bad effects of these. They by their existbasic obligations which must always underlie it." "We in- ence fear instead of faith, and we only need to look atcreate the problems in the Volume 136 • Financial Chronicle 3627 country as a whole, the problems in our own community, the doubts in our own homes, to realize what fear can do. It is a dangerous ingredient in an orderly world, and particularly so in a closely integrated and interdependent one. Frontiers are always nervous because of their contiguity to danger, but our modern weapons and our new communications on the surface of the earth, under it and over it, have brought the risks of the frontier, whether it be to life, property or happiness, to everybody, everywhere. So long as the world lived in compartments separated both in time and space, it could better rely on the letter of the bond, because relationships were less intimate and less important. The freedom of action which one had on the farm must be restricted in the congested areas of Broadway and Chestnut Street. It has to be restrained, not alone by statute and municipal ordinance, it has to be done by courtesy, by good feeling, and by faith that if you behave well your neighbor will also. Is that a lesson which nations must now learn, too? If so, it becomes all the more important to stress our education in international courtesy and good faith, those relationships which, after all, must, in the long run, govern our present behavior and our ultimate fate. but Herr Bernheim asserts that even this safeguard has had no practical effect. Its chief value is represented by the admission it implies that none of these anti-Semitic laws is applicable in Upper Silesia. If this admission is made explicit and executed in practice, it would seem to transform Upper Silesia into a haven of refuge to which Jews in other parts of the Reich could turn. But, says the jurist, "one must go further." "The League could not consider itself satisfied if an exception like the one mentioned above were generally recognized by the German Government," he declares. "If the Jewish question is raised before the League only in Upper Silesia because the formal right to do this and established procedure for doing it exists there only, in the same terms over the whole territory of the Reich, and it is really the treatment of the Jews everywhere in Germany that the League will have to consider. "Public opinion, which has been so aroused by the anti-Semitic measures' of the German Government, would not admit of the League escaping its duty by a procedure of quibbling. Moreover, on the moral side at least, there exist obligations for Germany." Currency "Ruin" Laid to Us. On the debts we got the bond, to be sure, but did we get our money? On the debts we said they had no relationship to reparations, and it was true as written in the bond. But what happened when reparations failed? Perhaps you will permit me to follow that a little further. We insisted, as I said, that our Allies sign the bond to return money which we had advanced—no, not money, even, but goods which we had contributed to a common cause. We asked them to sign the bond. They could only repay that debt by sending us their goods. To the extent which we would not accept sufficiently of their goods, they could only pay by sending us their gold. So, having refused their goods, we took their gold until we ruined the currency and banking systems of the world, including our own, until international exchanges and trade were paralyzed. The fact about it is, the sad fact, the indicting fact, that we insisted upon the bond, we insisted upon the performance of the bond, and then we made it utterly impossible for the bond to be performed. We violated that basic obligation of relationship which underlay the bond itself. And we pay the penalty now. Had the commerce of the world been developed and enlarged, had barriers to trade been diminished rather than Increased, had our efforts and our capital been applied to productive ends, had we not tried to gain by speculation what we did not earn, the normal Indebtedness resulting from such extensions of credit would not have been burdensome on the borrower or insecure to the lender, because every dollar would have paid its own way and more. Have we learned the lesson that we cannot lend at home and then close the bank where our debtor has his money? Have we learned that we cannot lend abroad and then destroy international trade, which is the only bank out of which our foreign indebtedness can be paid? Stresses German Demand. The jurist then points out that the minority provisions imposed on Poland and others were due partly to a German demand. He recalls that Germany, in counter-proposals submitted on May 29 1919, insisted that the German minorities be protected under the League's guarantee and voluntarily added that "Germany on her side is determined to treat the minorities established on its soil in conformity with these same principles." The Allies in reply on June 16 1919, took special note of this promise and the jurist concludes that this exchange of notes constitutes more than a moral obligation. Moreover, he stresses the continued German campaign since entering the League for the defense and extension of the rights of minorities. In this connection, he summarizes the numerous speeches made here by Dr. Stresemann, Dr. Julius Curtius and other pre-Hitlerites as boiling down to these principles: "The problem of minorities in its essentials is a European and even an international problem. "It is necessary to give minorities all facilities to allow their complaints to be heard by the League and to give these petitions all possible publicity. "Recognition of the 'rights of man' of a minority and the synthesis of its rights with the rights of the State, far from being a danger for the internal consolidation of a State, can only contribute thereto. "Germany is qualified to preach these principles, being herself inspired by the new spirit governing the treatment of minorities and having gone very far in this direction without being obliged to by any treaty." Letter of Bond "Not Supreme." In these difficult times individuals, guided by their own self-interest, are learning that the letter of the bond is not supreme. If that be true of Individuals, how much more so should it be true of great nations? The large self-interest of the creditor requires him to take account of the basic obligations of relationship. If anger and prejudice be substituted for patience and understanding, the bond will not succeed—the basic obligation will be violated. It was touchingly said when we were at war that it was its purpose to make the world safe for democracy. It has been cynically said since that the purpose of the war was to make the world safe from democracy. I confess that I had great hopes of the wide extension of democracy following the war. I felt that the instinct and sympathy and understanding of vast numbers of people dealing with each other through a democratic form of government meant a keener appreciation of the obligations of relationship and less emphasis on the letter of the bond. Until now I have been disappointed. Our democracies, instead of gathering up the best, with charity toward all, have, like our mobs, developed the worst, governed as they seem to have been by prejudice, not understanding; by selfishness, not sympathy. So democracies, in their wild rush for their own advantage, have contributed, too, in bringing a world of plenty to a state of penury. League of Nations Council to Hold Hearing on Charges of Jewish Oppression by Nazis—Sir Eric Drummond Places on Agenda a Petition Invoking Treaty Rights in Upper Silesia. A hearing by the Council of the League of Nations on charges of German anti-Semitism was assured when, on May 20, Sir Eric Drummond, the Secretary-General, placed on the Council's agenda a petition from one Franz Bernhelm. The petitioner, who is now a refugee in Prague, requested the abrogation in Upper Silesia of all anti-Semitic laws and regulations in virtue of the Polish-German convention of 1922. When the question of the petition was brought up at a private meeting of the Council on May 22, the German delegate obtained an agreement that legal points in connection therewith be first examined by a committee of Jurists. Principal points in the petition, as described in Geneva advices to the New York "Times" May 20, follow: Herr Bernheirn's petition, after recalling the articles of the Upper Silesian convention, cites various anti-Jewish regulations adopted by the German Government regarding public officials, lawyers, the administration of justice, notaries, the schools, medicine and so forth. He holds that all these imply discrimination contrary to Article LXVII of the convention, which assures all German citizens in Upper Silesia of equal rights before the law "without distinction of race, language or religion." French Jurist Backs Him. Herr Bernheim argues—and a jurist is ready to support him—that these nation-wide German laws, in so far as they apply to Upper Silesia, are incompatible with the convention. Ile points out that only one of these laws—the one concerning foreigners In the schools and universities—includes a provision whereby its "prescriptions do not affect German obligations deriving from international treaties." This would seem to mean that it would not be applicable to Upper Silesia, Brazilian Mission to Washington Finds Close Similarity in Purpose with United States in Measures to Be Discussed at London Conference. A statement declaring that the purpose and policies of Brazil and the United States, with respect to subjects on the agenda of the World Monetary and Economic Conference, are strongly identical was issued at Washington on May 23 by the Brazilian mission, of which J. F. de Assis Brasil is head. The statement read: In the course of the conversations with the Secretary of State regarding policies to be pursued at the monetary and economic conference, the Brazilian mission takes the opportunity to make the declaration that it feels there is a strong identity of purpose and policy between the two governments. The Brazilian mission takes the further opportunity to declare that the Brazilian Government assures and will always assure all American interests completely fair treatment in connection with the service of loans and the disposition of exchange under the exchange control. It will in no way discriminate between different nations. Germany Pledges Support of British Disarmament Plan —"First Step" Suggested by President Roosevelt in Recent Message Endorsed by German Delegate at Geneva on Behalf of Chancellor Hitler. At a meeting of the General Commision of the World Disarmament Conference at Geneva on May 19, Germany accepted the British disarmament plan as a basis on which to conclude an agreement. The acceptance of this plan, which President Roosevelt in his message of May 16 urged all nations to adopt as the "first step" toward disarmament, was regarded as of the utmost importance, so far as possibilities of a successful outcome of the Conference are concerned. Rudolph Nadolny, German delegate, acting on — the instructions -of Chincelloi-Adolf Hitler, announced his country's acceptance after Arthur Henderson, President of the Conference, had pleaded with Germany and. other nations to withdraw their amendments. Rene Massigli for France, pledged his Government's readiness to co-operate. Viscount Ishii,in Washington for Economic Discussions with President, Says Japan Would Favor Reciprocal Treaty with United States—Seeks to Stabilize Money and Lower Tariffs, Japanese Delegate to London Conference Adds. 7%7-reciprocalitrade-agreement-with-the United States, containing mutual advantages and concessions, would be welcomed by Japan, according to a statement made on May 23 by Viscount Bikujiro Ishii after his arrival in Washington tolconduct preliminary discussions A with President Roosevelt preparatory to the orla- one and Economic Conference. He added that Japan is convinced of the desirability of stabilizing the yen, and that 3628 Financial Chronicle his country will seek to promote lower tariffs throughout the world. Other details of the interview, as given by the Washington correspondent of the New York "Times," follow: On political questions, Viscount Ishii was less definite, but he said that he considered the difficulties with China already virtually settled by the establishment of Manchukuo and the definition of its boundaries. The expected early withdrawal of Japanese troops north of the Great Wall, he said, will definitely end the trouble. Asked whether Japan could agree to the definition of an aggressor offered by President Roosevelt at Geneva by Norman H. Davis, namely, "one whose armed forces are found on alien soil in violation of treaties," Viscount Ishii replied that he knew of no accurate definition of aggression at the present time. He recalled the efforts at Geneva of jurists to define the term and said they "arrived at no determination." "Acts which would be considered aggression in some parts of the world are not aggression in other parts of the world, depending on the circumstances surrounding them." he said. Premier Daladier Declares France Cannot Reduce Armaments at Present Time—Holds Out Hope of " Cut if Obstacles at Geneva Are Surmounted. A proposal to decrease French military expenditures was rejected by Premier Edouard Daladier in an address before the French Senate on May 19, when he said that "at the present time it would be a delusion to slow down our military preparations." He added, however, that reduction of armaments might be possible in the event of a successful conclusion of the Geneva Conference, but he expressed doubt that the difficulties in that path could be overcome. Additional details of the Premier's remarks, as reported in a Paris dispatch to the New York "Times" May 19, follow: Premier Daladier's remarks occurred during debate over a proposal to cut all Government expenses 5%. Certain exemptions were made and General Bourgeois, one of the Senators, suggested an amendment also excepting expenses pertaining to the military budget, such as army instruction, upkeep of materials and the construction of new materials. General Bourgeois pointed out that the military budget already represented an 1145% cut for the home army and one of 1545% for the Colonial forces. Premier Daladier, while agreeing that there should not be a new cut, denied that his reorganization of the army was going to weaken the defense forces in any way. "In accord with the responsible army chiefs, whom I consulted recently at a meeting of the Superior War Council, I affirm that we can have confidence in our army," he asserted. "I affirm that our National defense is assured." The Senate's reception of the Premier's declaration was unanimously enthusiastic, which is another straw showing which way the wind is blowing. British Reply to Roosevelt Peace Message Is Cordial, But Omits Reference to Suggestion for Treaty of Non-Aggression. An official British reply to President Roosevelt's peace message of May 16 was forwarded from London on May 23. While the tone of the British note was cordial, press commentators noted the omission of any reference to the President's proposals for a treaty of non-agression. This was attributed to a belief that such a pact could be discussed better at the Geneva disarmament conference. The text of the British note follows: His Majesty's Government in the United Kingdom have read with much appreciation the message which the President of the United States of America addressed to the heads of all countries participating in the disarmament and economic conferences on May 16. His Majesty's Government feel that the action which Mr. Roosevelt has taken in addressing this message to the peoples of the world Is of the highest importance and is well calculated to further the aim which His Majesty's Government have striven to secure, namely, the success of the two world conferences. They entirely share the President's view that on the successful outcome of these conferences hang the future happiness and prosperity of the world. They are all the more encouraged by Mr. Roosevelt's message because the President places the first step of his program the adoption of the draft disarmament convention presented to the disarmament conference by the Prime Minister on March 16 last. His Majesty's Government see in this an earnest of the intention of the United States Government to collaborate at Geneva in pressing the general adoption of this draft convention as a whole. His Majesty's Government believe for their part that if this can be attained the result will be a restoration of confidence between the nations of the world and that thus the best preparation will be made for the vital decisions which the monetary and economic conference will be called upon to take. Great Britain Signs Trade Treaty with Iceland—Will Increase Sales of British Coal—Sixth Treaty in Recent Weeks Signed in London. A treaty designed to benefit the British coal industry was signed by Great Britain and Iceland on May 23. This represented the sixth commercial pact concluded by Great Britain within recent weeks, the others being with Argentina, Sweden, Norway, Germany and Denmark. Under the provisions of the treaty Iceland agrees to take not less than 77% of her coal imports from Britain. Reduced duties are provided for imports of British cotton, linen and aritficial silk, and it is stipulated that Iceland will not increase duties on coal, certain varieties of woolen piece goods, sailcloth, Hessian sacks, linoleum, stockings, socks, waterproof May 27 1933 clothing, galvanized iron roofing sheets and wire rope. Great Britain agreed under the treaty not to increase the current 10% duty on fresh or salted fish from Iceland, and agreed also to give equitable treatment to imports of chilled or frozen mutton or lamb. The treaty will not become effective until the passage of enabling legislation by the Icelandic Parliament. British Delegation to London Conference Composed Chiefly of High-Tariff Advocates—Neville Chamberlain to Be Active Head. The personnel of the British delegation to the World Monetary and Economic Conference was announced on May 18 by Prime Minister MacDonald. The list, as read In the House of Commons,comprises seven men in addition to the Premier. Since Mr. MacDonald will act as the President of the conference he will not be able to attend regular meetings of the British delegation. and Neville Chamberlain, Chancellor of the Exchequer, will be the active leader. The other members, as announced in Parliament, are: Viscount Hailsham, Secretary for War. Sir John Simon, Secretary for Foreign Affairs. J. H. Thomas, Secretary for the Dominions. Sir Philip Cunliffe-Lister, Secretary for the Colonies. Walter Runciman, President of the Board of Trade. Major Walter Elliott, Minister for Agriculture and Fisheries. The British delegation, as listed above, will be composed principally of believers in a high-tariff policy, with Mr. Chamberlain, Mr.Runciman and Mr.Elliott particularly wellknown for their opposition to Great Britain's former freetrade position. Canada and France Sign One-Year Trade Agreement— Provides for Reciprocity on Long List of Products, with Reductions Up to 50%—Lower Duties on 209 Dominion and 931 French Products. A new commercial agreement between Canada and France was signed at Ottawa on May 12. The treaty will be effective for one year, and it provides for reciprocal reductions in duties levied on the goods of eacih nation by the other. Details of the convention, as reported to the Department of Commerce by Lynn W. Meekins, American Commercial Attache at Ottawa, and as contained in a Washington dispatch to the New York "Times" on May 13, follow: Since June 17, when Canada permitted the commercial treaty with France to expire, both countries have been applying their general or maximum tariff rates in their trade with each other. In the case of Canadian wheat exports, which accounted for $12,000,000 of that country's $18,000,000 of total shipments to France in 1932, for example, the minimum rate of 80 francs per 100 kilos was increased to the maximum schedule of 160 francs. Restoration of the commercial treaty, while not considered important from the amount of trade involved, at present is regarded by officials as being Potentially of great significance, both from the standpoint of trade and as an indication of Canadian policy. In addition the resumption of treaty relations between the two countries is held likely to improve the French market for some products of American branch plants in Canada. Many Products Affected. Under the new arrangement, 185 Canadian products obtain the French minimum tariff rates and twenty-four others receive percentage discounts from the French general rates. In return, to French products numbering 840 are accorded the Canadian intermediate tariff rates, with ninety-one others made dutiable at from 10 to 25% below the intermediate schedule. The British preferential rates are also accorded to French exports of novels, books and periodicals, musical and surgical Instruments, X-ray apparatus, microscopes, glassware and other scientific equipment for hospitals, surgical operating tables, sterilizing apparatus and positive motion -picture films. The principal Canadian products obtaining French minimum tariff rates include: meats, hides, condensed milk, cheese, butter, honey, fish, Including canned salmon ; wheat and flour, apples, maple products, confectionery, leaf tobacco, lumber and timber, vegetables, bran, wood pulp, abrasives. cement, coal, silver, aluminum, ferro alloys copper, lead, zinc nickel ore and oxides, cadmium cobalt, ore and oxides, coal tar, pitch, varnishes, talc, starch, electrical insulators, typewriter ribbons, silk and rayon knitted goods. photographic paper and films, leather and leather footwear and belting, clocks, steam engines, pumps, compressors and unspecific motors, internal combustion engines, agricultural machinery and parts, sewing machines, electric dynamos and transformers, wireless telegraph and telephone apparatus, electrical heating apparatus, flour milling machinery, hoists, Pulleys, typewriters, refrigerators, tools, pianos and organs, bicycles and parts, automobiles, trucks and accessories, tires and tubes, rubber goods, fountain pens, brushes, skins, skates, corsets and brassieres. Intermediate Rates to French. Intermediate rates are accorded by Canada to French exports of the following: animals, agricultural products, fish and provisions, 130 items ; sugar and manufactures, 10; tobacco and manufactures, 5; spirits, wines and other beverages, 25; pulp and books, 34; chemicals, drugs, oils and paints, 108; earths, earthenware and stoneware, 47; metals and manufactures, 278 ; wood and manufactures, 29; textiles, 115 ; miscellaneous, 59. More important in some respects than the import duty reduction provided are some of the articles of the treaty dealing with the foreign trade policies of both countries. The principal stipulations of this character follow: Goods must be shipped direct, or via a treaty port to obtain respective preferences. Article 5. Most-favored-foreign-nation treatment is not extended to favors already or hereafter granted by either party to adjoining States to facilitate • Volume 136 Financial Chronicle adjust taxes or assure traffic for frontier districts or favors to third State to particular arrangements reciprocal legal protection of fiscal obligations or to to rights and privilin conformity with international conference of Stresa or under auspices of the eges to third foreign States in multilateral conventions League of Nations. with protective Most-favored-foreign-nation treatment does not interfere exchange or dumping measures such as compensating taxes for differences in regulations if applied without discrimination. by any Article 6. Both countries agree not to interfere with trade reservations. prohibitions or restrictions of imports or exports with certain competidishonest Article 11. Protects each country from all forms of tion in the other. so as Article 12. Provides valuation for duty purposes to be determined foreignto make no discrimination whatever and to preserve most-favorednation treatment. Article 13. Similar to but more emphatic than Article 16 of AngloCanadian trade agreement regarding customs administration. Foreign Minister Paul Boncour of France Assures Poland and Little Entente that Four-Power Pact Agreement Has not yet Been Reached and that Signature of Mussolini Proposal Is not Imminent. Despite newspaper reports from Rome that virtual agreement had been reached by representatives of France, Italy, Great Britain and Germany with regard to a revised draft of Premier Mussolini's four-power pact, Foreign Minister Paul Boncour of France on May 22 is understood to have assured France's allies—the nations of the Little Entente and Poland—that there is little prospect that the pact will be signed in the immediate future. In mentioning this report, a Geneva dispatch to the New York "Times" dated May 22 continued: of the Reichsbank, The real purpose of Dr. Hjalmar Schacht, President obtain a British loan in coming to London, it was learned to-night, is to private debts. that would prevent a default by Germany on her £10,000.000 Dr. Schacht Is said to be seeking a loan similar to that of Anglo-Argentine advanced to Argentina under the provisions of the recent British investors trade treaty. The arrangement with Argentina enabled that had been owing there to obtain payment of the interest and dividends restrictions. exchange Argentina's to them but that were frozen under investors in It is assumed here that Dr. Schacht is offering British other creditors Germany the same kind of priority over her American and as they won in Argentina. have about they for delicate, and The position of the British is difficult as much as they had in £100,000,000 still frozen in Germany, ten times Argentina. the Bank of EngWhen the German moratorium was declared in 1931, relief to the London land and the "big five- banks here arranged temporary the condition that the private banks most heavily involved in Germany on will be necessary for Germans continued paying interest. This time it the rescue again— the Bank of England and the "big five" to come to conversation with long a in or so Dr. Schacht is reported to have argued yesterday. Montagu Norman, Governor of the Bank of England, confronted with two The British banking authorities find themselves rediscount facilities unpleasant alternatives: either they must give further by a German default to private bankers who might be seriously affected paying interest. or they must lend the Germans enough to continue to say why he had come Dr. Schacht lleft to-night for Berlin, refusing to England or what he had accomplished here. It Is understood this pact now begins with a preamble which stresses that It Is within the spirit and framework of the League of Nations covenant. Its first article provides for co-operation among the four powers. Article II deals with the revision of treaties on the basis of the French demand for a system composed of Articles X,XVI and XIX of the covenant. Article III deals with disarmament and equality. It is stated that Premier Mussolini and Henry de Jouvenel, the French Ambassador to Rome, were in agreement on Article II, but the British balked at any reference to the sanctions of Article XVI of the covenant. Regarding Article III, Signor Mussolini is said to have induced M. de Jouvenel and Captain Hermann Wilhelm Goering of Germany to agree on a formula, subject to both submitting it to the approval of their governments. Some persons have the Impression here that this pact has been or is being reduced to an empty tribute to Signor Mussolini's prestige. Departure of Albert H. Wiggin and John Foster Dulles for Germany—To Attend German Debt Conference—Mr. Wiggin Accepts Subpoena for Appearance Before Senate Committee in July. Before his departure for Germany on May 20, on the North German Lloyd Steamer Bremen, Albert H. Wiggin, former Chairman of the Governing Board of the Chase National Bank, accepted service of a subpoena to appear before the subcommittee of the Senate Committee on Banking and Finance in July, to testify in the investigation of banking activities. This was made known in the New York "Herald Tribune," which reported Mr. Wiggin as stating that he had informed the subcommittee that he was always available. The proposed participation of Mr. Wiggin in a conference to be held May 29 on Germany's foreign credits was noted in our issue of May 20, page 3449. In the same item we indicated that John Foster Dulles, who also sailed on the Bremen, would represent, at the conference, bankers who had marketed German issues. Just before sailing Mr. Dulles made the following statement as a general reply to numerous individual inquiries as to the precise capacity in which he would act at the Berlin debt conference: German bonds outstanding in the United States are estimated to exceed S1.000,000,000, exclusive of the Dawes and Young bonds which were issued internationally. This billion dollars of bonds Is widely distributed among Investors throughout the country. The position of these holders deserves, and I trust will receive, most sympathetic treatment. I have no mandate from the holders of these bonds. This would involve the laborious and costly process of seeking powers-of-attorney from the hundreds of thousands of investors concerned. However, the houses which sponsored the public issue of these bonds have a deep concern that the bondholders receive what is justly due. They, as well as Ole German authorities, have felt that the debt conference which has been called by the Reichsbank should not occur without there being present someone who will have, as his particular concern, the position and welfare of the holders of this Important part of Germany's foreign debt. Accordingly, to attend the Berlin at the request of the houses of issue. I am now sailing conference. My sole concern is that every resource be exhausted to prevent or minimize loss to the American holders of German bonds. If, following the Berlin discussions, any German debtor feels impelled to make proposals requiring action by the holders of its bonds, such proposals would, of course, have to be submitted to the bondholders individually for acceptance or rejection by them. Dr. Schacht of German Reichabank Said to Seek London Loan to Bar Default—Reich's British Creditors May Get Priority. The following London cablegram, May 20, is from the 'York "Times": NewA 3629 After TransPrussian Diet Resigns for Four Years Premier Cabinet— Hitler the to Powers ferring Its Reconstruction. Goering, in Address, Pleads for 18, adopted an The Prussian Diet, at a meeting on May Goering Cabthe to powers its all ng transferri act enabling the completed action this by inet until April 1 1937, and Reich. Under the the with Prussia ing co-ordinat of process by Captain terms of the new law Prussia will be governed Hitler, Goering and his Ministers appointed by Chancellor adopting Before Prussia. of Governor Reich xvto is also the for the Socialist the enabling act the Diet heard a spokesman also addressed was It measures. proposed the protest Party d, in part, as by Premier Goering, whose speech is summarize York "Times" New the to dispatch Berlin a in follows, May 18: far cry from his Goering's was a Like the speech of Herr Hitler, Captain months. Then Prussia's leading firebrand fulminations of the last few followers to violence; to-day Minister seemed to be deliberately inciting his reconstruction of the State he called for law and order and the creative and the nation's business. proceed in conformity with That reconstruction, he said, must naturally government and under the National Socialist principles under authoritarian individual interferchief leadership of Herr Hitler, but free of arbitrary liberalism of a past era ence in government or in business, replacing the must be subwith the spirit of old Prussia that the welfare of the individual ordinated to the welfare of the State. by the The reason for the change in Captain Goering's tone is explained following passage in his speech: had to be "That epoch of the national revolution in which the first aim has substantially to conquer power in its foreign and domestic acquisitions continues. But come to an end. Just the same, the national revolution into an now it ventures into a new phase with a new thought, namely, epoch of reconstruction." aims of this new Premier Goering summarized the three important organic reconstruc• Period as "the regeneration of the German people, the life of every German tion of the State and of the entire public and private reconstruction in so far as the public welfare requires it, and the organic the existence of the people's economic life as the material foundation for of each individual and of the people as a whole." Chancellor Hitler Pledges Peace in Reviewing German Navy. Peace Is desired more in Germany than in any other country, it was declared by Chancellor Adolf Hitler in reviewing the German fleet at Kiel on May 22. Herr Hitler then added, as reported in Berlin advices to the New York "Herald Tribune": "We require it to obtain bread for our millions of jobless compatriots. But peace will be given only to those who are worthy of peace. That nation alone is worthy which preserves its feeling of the necessity for honor and liberty. In this sense the German resurgence proclaims the struggle for German liberty and equality in the world." In concluding the Chancellor declared that the visit of Government officials to the German fighting ships was intended as a demonstration that, "great as is our longing for peace, as great is our determination to win back for the German people equal rights and freedom once more." Import Duty on Lard and Similar Fats Again Increased by Germany. The German Government increased the import duty on lard and similar fats, including oleo oil, from 50 to 75 reichsmarks per 100 kilos, effective May 16 1933, according to a radiogram received in the Department of Commerce fro m Commercial Attache H. Lawrence Groves, Berlin. In a Memorandum issued May 15 the Commerce Department also noted: It Is stated that the reason for this new duty increase is to further increase the consumption of domestic butter and lard, since it is alleged that the greatest part of the recent duty increase on lard from 10 to 50 reichsmarks was assumed by the foreign exporters, thereby leaving lard in a preferred position as compared with German butter. 3630 Financial Chronicle 80% Reduction in War Debts Suggested by Italy's Ministry of Finance. An 80% reduction in the war debts of the former Allied governments to the United States was suggested on May 19 in the budget report of the Ministry of Finance, presented in the Italian Chamber of Deputies by Finance Minister Guido Jung, who returned on May 18 from his economic discussions with President Roosevelt. We quote from Associated Press advices from Rome to the New York "Herald Tribune," which also said: Deputy Giuseppe Mazzini, who wrote the report, said that so% of the debts is all the debtor countries can pay after sacrificing 90% of German reparations. This would be true, his report said, even if inter-European Allied debts were canceled. The 80% reduction was the first official suggestion since the Fascist Grand Council on April 8 1932, urged cancellation of both reparations and debts. The budget report said: "Presuming a stroke of the sponge on the debts and credits among the European Allies, and admitting that all damages of the war and expenses of reconstruction in the devastated war regions are to be assumed by the nations most stricken—Italy, France and Belgium—it is evident that, as a result of the Lausanne reductions in German reparations, a reduction of 80% in Allied payments to America is necessary." Deputy Mazzini emphasized the "impossibility of paying" so far as Italy Is concerned, and asked: "How can Italy, after having reconstructed the devastated zones; with unemployment, which although less than in other countries nevertheless is heavy; with a budget deficit; after having renounced the indemnities from Austria, Hungary and Bulgaria under the St. Germain and Trianon treaties, and not receiving $45,000,000 annually in German reparations, pay an average of $38,000,000 annually to the United States for more than 50 years?" Italy Increasing Supplies of Gold—Note Circulation Shrinks—Rise in Prices of Wheat. From Rome, Italy, May 20, a wireless message to the New York "Times" said: The lira continues successfully to maintain its position against both depredated and appreciated currencies. Trade figures continue to register constant diminution of the adverse balance as compared with a year ago. The Bank of Italy is unceasingly increasing its stocks of monetary gold, while the note circulation is decreasing. Speculative interests are taking advantage of the inflationist program. Forecasts of a poor wheat crop in America have temporarily boosted wheat prices here. This increase in price, however, does not appear justified by any well-founded likelihood of increased exportation to Europe. It is calculated that a poor crop in America will be balanced by a reduced demand on the part of importing countries which predict excellent domestic crops protected by customs barriers. Acreage under cultivation has also well been increased so that it is not expected that existing stocks will undergo any appreciable variation. Russia is now purchasing Argentine wheat, and is meeting with serious difficulties in collecting and distributing wheat necessary for sowing. Soviet Russia Floating Internal Loan-3,000,000, 000Ruble Issue to Aid Five-Year Plan—Part in Lottery Class—Workers Invited to Subscribe to Amount of Three Weeks' Pay. A cablegram May 14 from Moscow to the ,New York "Times" said: The Soviet Central Executive Committee in a decree to-day called for the first issue of the new internal State loan. The loan will total 3,000,000,000 rubles in 10-year bonds of two classes, one bearing 10% interest and the other receiving varying money prizes in the State lotteries. The proceeds will be used for Five Year Plan construction work. A special commission to aid the loan invited every worker to subscribe three weeks' salary. Internal loans during the first Five Year Plan furnished one-fourth of the money used in that program. This went mostly to pay the salaries of Russian workers and to buy supplies produced in Russia. It could not pay for imports because the ruble was not accepted outside Soviet territory. For a week before to-day's decree, a campaign has been carried on in the factories and institutions to encourage subscriptions. The methods used were similar to those in the Liberty Loan campaigns in the United States, except that here the loan committees have tried to arouse "social competition" among the workers to induce them to subscribe one month's salary or more instead of the minimum of three week's salary. In general both rural and urban subscribers to Soviet loans prefer the type of bonds which have a chance of winning lottery prizes rather the prosaic interest-bearing type. It appeals to their gambling spirit.than The hotels are being canvassed for foreigners who might want to subscribe in foreign money. Not many have been found. Poland's Public Works Program Speeded by Credits From State-Controlled Bank. From the New York "Times" of May 21 we quote the following: The difficulties that have been experienced in recent years in financing mortgages and the discussions that have lately been held as to means of financing public works programs have directed attention to the methods employed abroad for meeting financial problems of this character. The National Economic Bank of Poland is an example of a State-controlled institution which is designed specifically to supply long-term credit needs for productive purposes. It grants mortgages on rural and urban real estate, finances State and local government projects, provides credit for special industrial enterprises which serve the purpose of the country at large and is instrumental in the financing of credit and savings institutions. Roman Gorecki, Chairman of the Bank, is at present in this country where he has been engaged in a visit to 12 posts of the American Legion in as many days. The bank was organized in 1924 by a merger of three existing government banks. It has at its disposal a capital of 219,000.000 zlotys (the May 27 1933 zloty is worth 11.22 cents at par) and at the close of 1932 held deposits of the Polish Treasury and funds invested by the latter in the bank equal to 745,000,000 zlotys. Despite the economic depression the bank's turnover in the last two years has risen substantially. This has been due mainly to the fact that the government, in order to mitigate the effects of the crisis, has intensified its activities in extending credits for productive purposes. The sum total of credits extended by the National Economic Bank aggregated at the end of last year 1,861,000,000 zlotys, including 838,000,000 zlotys in longterm credits covered by mortgage certificates and bonds and 1,023.000,000 zlotys in long and short-term commercial credits. Among the long-term credits are loans secured by mortgage certificates on rural and urban real estate, municipal debentures secured by local government enterprises, bank bonds secured by industrial enterprises and building bonds secured by mortgages on residential dwellings. In connection with the commercial credits, the bank supplies government-owned enterprises with credit as well as special industrial concerns serving a public use which are either owned by the State or belong to the system of business enterprises controlled by the bank. President Roosevelt Asked by American Chamber of Commerce for Brazil to Use His Influence Toward Effecting Solution of Exchange Problem—American Interests Urge Reciprocal Treaty—Claims Brazil's Trade Is Unjustly Diverted to Other Countries. A cablegram revealing that President Roosevelt has been asked to intervene in the foreign exchange situation as It affects American interests in Brazil was made public in New York on May 17 by Leslie E.Freeman,70 Pine Street, counsel for the American Chamber of Commerce for Brazil. The New York "Times," from which we quote,staid: The communication, sent from Brazil by Halbert M. Sloat, President of the Chamber of Commerce, protested that United States dollar exchange was being denied to companies under circumstances amounting to discrimination, since dollars were made available to their foreign competitors. As a result of this practice, Mr. Freeman estimated, between $30,000,000 and $40,000,000 in American funds are tied up in Brazil and Americans there face the possibility of being forced out of business because they cannot pay in dollars for goods purchased in the United States nor transfer dividends. Because of this situation the President was asked in the cablegram, of which the first copy was sent to the White House, to bring the situation to the attention of the Brazilian envoys who are to confer with him in the near future as part of the program for understandings with foreign countries. There is no cause for not furnishing dollars, the cablegram said, since the purchases of the United States from Brazil are three times the sales of the United States to that country. Mr. Freeman forwarded copies of the message to the Secretary of State, the Secretary of Commerce, and to others, asking them to use all available influence to obtain relief for the United States interests involved in the Brazilian situation. The following is the cablegram received from Momsen & Freeman from Mr. Sloat, President of the American Chamber of Commerce for Brazil: Following cable sent to President Roosevelt: "During past two months exchange allotted American imports has been constantly reduced, now practically nil, creating an intolerable condition threatening very existence of American trade here without prospect of relief even though American purchases from Brazil are three times as large as sales, furnishing Brazil large favorable balance which is being unjustly diverted to other countries. American companies and exporters are being compelled to discontinue shipments which will soon result in closing American branch houses and practically annihilate already diminished American exports. Consequently, we urgently and strongly recommend our Government insist with Brazilian delegation en route to Washington that delegation cable Government here for immediate relief. While this Chamber strongly favors reciprocal commercial treaty, this will probably require many months' negotiation. In meantime, exchange problem is paramount issue requiring urgent solution and should precede other negotiations. Present opportunity must be used to insist that Brazilian Government immediately furnish exchange for: First, recent unpaid shipments; second, new current requirements; third, frozen funds." Please communicate same to Secretary of State, Secretary of Commerce, Fred Kent, Ambassador Morgan, Committee Inter-American Relations, United States Chamber, National Foreign Trade Council, New York "Times," asking them to use their influence in Washington for solution of this important urgent problem. Bias by Brazilians on Exchange Denied—Finance Minister Aranha Contradicts Charge of Discrimination Against U. S. From the New York "Times" we take the following from Rio de Janeiro, May 16: Commenting on Washington and New York press dispatches published here as possibly an echo of the telegram of the American Chamber of Commerce for Brazil to President Roosevelt, Finance Minister Oswaldo Aranha issued a statement to the press to-day denying there had been any favoritism in alloting foreign exchange coverage, as was asserted in the telegram. "The unpaid commercial credits are not so large as said," according to the statement. "They probably are about £6,000,000, including all countries. Regarding preference, we have carefully maintained impartiality. A great majority of the American colony can vouch for our correctness; we have repeatedly allotted exchange coverage to oil companies, wheat ship- ments and cinema films; thus the interests of American exporters are not forgotten. "Our coffee shipments in the last two months show great improvement, and the country's economic and financial prospects are such that great hope exists that the situation soon will be normal." Senhor Aranha did not say, when asked, whether he intended to begin "unfreezing" exchange at the beginning of June, when the Rothschild loan payments end. Conversion of Brazilian Bonds Urged by Secretary Boucas of Brazilian Committee of State and Municipal Loans. Valentin F. Boucas, Secretary of the Brazilian Committee of State and Municipal Foreign Loans and a member of his Volume .16 Financial Chronicle country's delegation to the London Economic Conference, issued a statement in New York, on May 13, in which he recommended that American bankers and holders of defaulted Brazilian State and municipal bonds, which are outstanding in the amount of $200,000,000, co-operate at once with the Brazilian Government in reaching some readjustment. The New York "Times" of May 14, in reporting this, added: Mr. Boucas advised that the State and municipal bonds be converted into Federal non-gold bonds of Brazil, with no changes in interest rates. The embargo on gold exports from Brazil had been necessitated, he said, by the low volume of exports and the depreciation of Brazil's currency. As an alternative to conversion, he suggested that the interest on the original bonds be accepted in Brazilian currency for five years, or until economic conditions improved. Evidence of the good faith of the Brazilian Government, he said, lay In the fact that it had encouraged the Brazilian States and municipalities to deposit in the National Treasury sums in their own currency to meet thE interest payments. This had been done, he added, to protect the rights of foreign creditors and to prevent the States and municipalities, which are autonomous, from heading toward the dangerous ground of "forgetting to meet their obligations under the excuse of lack of exchange, as unfortunately has been done in the past by parts of Brazil." Mr. Boum, whose recommendations are based on four months' investigation, said many American bondholders had written to Brazil expressing willingness to receive payment oq the bonds in Brazilian milreis, and that numerous loans had been negotiated without necessary caution by previous Brazilian State and municipal administrations, and also by some "intermediaries, possibly bankers." Brazil Forwards £542,744 Loan Installment to London —To Pay in American Currency Dollars. Rio de Janeiro advices, May 14, are taken as follows from the New York "Times": The Government, through the Banco do Brazil, has forwarded to London £542,744 sterling as the instalment due this month on the Rothschilds' £6,500,000 loan. The balance due, £545,163, payable in June, will liquidate the loan and free the Government of monthly payments amounting to about 420,000 sterling daily, which it is expected the bank will divert to cover foreign unpaid shipments and free many millions of the frozen accounts of foreign exporters and private invested capital. The bank also has remitted £56,000 sterling to cover monthly requirements for funding of the loan. From the "Wall Street Journal" of May 17 we take the following, from London: The Brazilian Finance Minister has informed N. M. Rothschild & Sons that interest due May 15 on the 1931 5% 20-year sterling bonds will be paid In American currency dollars and not in gold dollars, in accordance with the policy adopted by the Americans themselves. Brazil receives American currency for its shipments to America, and has no other means to satisfy obligations in American currency than in the currency in which it is paid, it was stated. Possible Easing of Exchange in Brazil—Change in Rule Indicated as Likely in July. Rio de Janeiro advices, May 21, to the New York "Times" said: Coinciding with a statement by Armando Vidal, President of the National Coffee Department, assuring the coffee trade of freedom from Government tutelage beginning in July, this correspondent is reliably informed that the Government also considers altering its foreign exchange policies in July, allowing more freedom and eliminating certain limitations now existing. Brazilian Financial Envoy Supports World Cocoa Plan—With Departure from Trinidad to See President Roosevelt, Backs Segregation Scheme to Stabilize Prices. Before the departure of Augusto Amaral, Brazilian financial envoy, from Port of Spain, Trinidad May 18 on the second stage of his 4,800-mile air Journey to the United States to join in the conversations with President Roosevelt prior to the World Economic Conference he had a discussion according to a wireless message from Trinidad to the New York "Times," with Gerald Wight, sponsor of the Trinidad plan for a world conference of cocoa producers. The "Times" advices report that Senhor Amaral issued a statement to the press in which he said: I disagree in general with economic theories of restriction after ex- perience with coffee and rubber schemes, but after analysis of the Wight plan I find that many good points appear to make it possible to take action with regard to cocoa. I understand that the British Government is being asked to consider the scheme with a view to enlisting the co-operation of all the cocoa countries, especially Brazil, which, together with the British Empire, controls 80% of the supply. I think the scheme would be successful if the cocoa countries agreed that every shipper should deliver to a central authority part of each shipment for segregation for the purpose of stabilizing a reasonable price level. The central body would safeguard the interests of the consumer and prevent profiteering by releasing the segregated cocoa when the price exceeded a reasonable level, assuring the economic welfare of the planter, and would enable him to exchange his products of the soil for goods of other countries. The scheme is not a panacea for the depression, since it is not intended to apply to all crops in which production exceeds world consumption. New York Stock Exchange Expels Joseph D. Frankel. Joseph D. Frankel, a member of the New York Stock Exchange since Nov. 23 1916 and a specialist in more than 3631 a dozen issues on the floor of the Exchange, was expelled from membership in that organization on Thursday of this week, May 25. Richard Whitney,President of the New York Stock Exchange,in announcing Mr. Frankel's expulsion from the rostrum of the Exchange Thursday morning, said: "Charges and specifications having been preferred against Joseph D. Frankel, a member of the Exchange, under Section 7 of Article XVII of the Constitution, for violation of Section 5 of Article XVII and Section 1 of Article XIX of the Constitution and for violation of Section 4 of Chapter VII and Section 1 of Chapter XI of the Rules adopted by the Governing Committee, said Charges and Specifications were considered by the Governing Committee at a meeting held on May 24 1933 said Joseph D.Frankel being present. "The substance of the charges and specifications was that Joseph D. Frankel, while acting as specialist in Atchison, Topkea & Santa Fe Railway Co. common stock, had in his possession for execution orders to sell 1.600 shares of said stock and that he purchased for his own account 500 shares of the stock entrusted to him as a specialist, without bidding for and offering the same in the open market in accordance with the Rules adopted by the Governing Committee. "It was further charged that Joseph D. Frankel made misstatements to the Committee on odd lots and specialists in connection with its investigation into the foregoing matter. "The substance of the other charges and specifications against Joseph D. Frankel was that he had failed to charge commissions on securities received on a privilege for an account in which a non-member was interested and had also rebated commissions to a non-member. "Said Joseph D. Frankel was found by the Governing Committee to be guilty of said charges and specifications and was expelled." Mr. Frankel is one of two partners in the firm of J. D. Frankel & Co., 50 Broad Street, this city, the other partner being his wife, Sylvia R. Frankel. The firm was formed last year. Ultimatum Given to Allied Chemical & Dye Corp.— New York Stock Exchange to Drop Shares Unless Company Revises Its Accounting by Aug. 23. The New York Stock Exchange announced on May 25 that it would remove the preferred and common stocks of the Allied Chemical & Dye Corp. from its list on Aug. 23 unless the company agrees before that date to furnish stockholders "with adequate information in regard to the present condition of the company." The step regarded as the most drastic ever taken by the Exchange with a view to revising the accounting practices of a listed company. In the past the Exchange has carried on extended controversies concerning accounting methods, but has always declined to remove listed issues for such a reason on the ground that innocent stockholders might suffer through the step. Richard Whitney, President of the Exchange, issued the following statement concerning the dispute with Allied Chemical & Dye Corp.: Notwithstanding prolonged negotiations with Allied Chemical & Dye Corp.. no agreement has been reached in regard to the information to be furnished presently to stockholders or in regard to the future publication of the balance sheet, surplus and income account of this corporation in a manner which, in the opinion of the Committee on Stock List, would furnish stockholders with information essential to a proper understanding of the condition of the corporation and of its operations. Accordingly, the Committee on Stock List recommends to the Governing Committee that the preferred and common stock of Allied Chemical & Dye Corp. be stricken from the list of the New York Stock Exchange on Aug. 23 1933, unless prior thereto the corporation shall have furnished stockholders with adequate information in regard to the present condition of the company and shall have entered into an agreement with the Exchange, satisfactory to the Committee on Stock List, as to the manner in which the financial reports of the corporation will be published in the future. The above recommendation of the Committee on Stock List was adopted by the Governing Committee. For more than three years the Stock Exchange has been seeking to induce the Allied Chemical management to itemize more fully its balance sheet and income account. The controversy reached an acute stage about a month ago, when the Exchange made public the long correspondence between Orlando F. Weber, President of Allied Chemical; H.F. Atherton, Secretary of the company; J. M.B.Honey, Executive Assistant of the Committee on Stock List of the Exchange, and Frank Altschul, Chairman of the Committee on Stock List. (See "Chronicle" April 29, p. 2888.) The New York "Times" May 25 had the following regarding the matter: After two adjournments of meetings of the Governing Committee, at which final action was to have been taken with regard to the controversy, the Exchange announced on May 10 that the company had agreed to make a final statement yesterday. No representative of Allied Chemical appeared yesterday before the Governing Committee of the Exchange. A letter, however, was sent to the Committee. In which the company stated that it would not be in the best interests of its stockholders to make known further details concerning the company's investments and operations. The Stock Exchange and the Allied Chemical officers declined to make public the text of the letter. Officers of the Exchange are understood to feel that foreign and domestic competitors of Allied Chemical would be eager to learn more details concerning production costs and profit margins of the company, and that the disclosure of the sources of the company's income might be of use to its rivals. Views of the Management. With regard to the suggestion that the company disclose its investment portfolio to its shareholders, the management, It was said last night believed that this would serve no useful purpose and would give information Financial Chronicle 3632 to competitors and speculators. The company's holdings in common stocks are understood to be divided among six corporations. It does not trade in these securities, and is said not to have disposed of a share that it has acquired, beyond the sale of 15% of one investment and about 20% of another. in 1931. The management was said also to believe that the dispute had resolved itself into the question whether the company's stockholders or the Stock Exchange should determine corporate policies. The Exchange also believes that it has thrown the matter into the hands of the stockholders. If they support Allied Chemical management the Exchange will have no alternative but to remove the stocks from its list, New York Stock Exchange Rules Bonds of Missouri Pacific RR. Co. Be Dealt in "Flat" on Exchange— Like Ruling Made on Bonds of New Orleans Texas & Mexico Ry. Co.- Interest Due Aug. 1 and Sept. 1 1933 Unlikely to Be Paid. The following announcements were issued by Ashbel Green, Secretary of the New York Stock Exchange: NEW YORK STOCK EXCHANGE Committee on Securities Missouri Pacific BR. Co. May 27 1933 "Mr. Lockwood, I believe that the hearings conducted so tar in this investigation into the so-called unlisted department of the New York Curb. Exchange, have developed the existence of practices which, in my opinion, constitute serious abuses in that department. My examination into the unlisted department of the Exchange is practically completed. I have not yet, however, gone into your fully listed department. "You, of course, realize that this entire investigation has been conducted' by not more than four members of my staff assigned to the Bureau of Securities, without any outside help whatever, without one cent of extra expense, and without the slightest interference with the regular work of that bureau, which has been especially heavy during the whole course of this investigation. "I do not propose holding any further public hearings in this investigation during the next three weeks, in order that Mr. McGohey and Mr. McCall may have a sufficient time to prepare further data. H you have any plans to submit which in your opinion will eliminate those abuses in the unlisted department which have been so far shown to exist, I shall, ol course, be glad to receive them." Plotests Against Trading. It has been brought out during the hearings at the State Building, So Centre Street, that protests against the practice of trading in unlisted securities have been made by a number of corporations issuing these stocks. The Exchange has contended that sale of the stocks on the Curb has been a real service to the investing public. Mortimer Landsberg, a broker at 25 Broad Street and a member of the Curb Exchange, was questioned about dealings he had in Missouri Kansa. Pipe Line stock and Trans-America stock. It was brought out that in 1929 his firm made a profit in Trans-America4 dock of $1,300,000 and the same year he made a profit of $270,000 in the Missouri Pipe Line stock. Witnesses examined at the morning session included Charles S. Leahy, member of the Board of Governors of the Exchange, and Martin J. Keenan, Assistant Secretary. Mr. Leahy testified that a large part of his trading in stock from 1927 to 1929 was for his own account, May 11 1933. Notice having been received from the Missouri Pacific RR. Co. that it does not appear likely that the interest due Sept. 1 1933 on the general mortgage 4% gold bonds, due 1975, will be paid on said date. The Committee on Securities rules that beginning Monday. May 15 1933, and until further notice the said bonds shall be dealt in "flat" and to be a delivery must carry the Sept. 1 1933 and subsequent coupons. May 111933. Notice having been received from the Missouri Pacific RR. Co. that it does not appear likely that the interest due Sept. 1 1933 on the first and, refunding mortgage 5% gold bonds, series F, due 1977, will be paid on In the "Times" of May 17 it was stated that the stocks of said date: 47 corporations were traded in as unlisted securities despiteThe Committee on Securities rules that beginning May 15 1933 and until further notice the said bonds shall be dealt in "flat" and to be a deprotests by their officers, it was disclosed on May 16 at the livery must carry the Sept. 1 1933 and subsequent coupons. public inquiry conducted by Attorney-General Bennett. TheMay 111933. Notice having been received from the Missouri Pacific RR. Co. that it account in the "Times" of May 17 went on to say: does not appear likely that the interest due Aug. 1 1933 on the first and This was read into the record by John F. X. Mcaohey, Assistant Attorney. refunding mortgage 5% gold bonds, series I, due 1981, will be paid on General, in charge of the Bureau of Securities. He was questioning Austin said date: K. Neftel, former Chairman of the Listing Committee of the Curb Exchange, The Committee on Securities rules that beginning May 15 1933 and regarding a letter J. Highlands Burns, President of the Maryland Casualty until further notice the said bonds shall be dealt in "flat" and to be a deCo., Baltimore, had written asking that its stock be removed from trading. livery must carry the Aug. 1 1933 and subsequent coupons. The letter read, in part: May 111933. ..AB our stock was given unlisted trading privileges without either our Notice having been received from the Missouri Pacific RR. Co. that it knowledge or consent, I feel I am entitled to again enter a protest against our stock beingdoes not appear likely that the interest due Aug. 1 1933 on the first and continued on the list." paid on be refunding mortgage 5% gold bonds, series A, due 1965, will The letter was written Dec. 12 1927, and closed as follows: said date: "I trust the committee will no longer oppose our request that the stock which was. The Committee on Securities rules that beginning May 15 1933 and traded in without our knowledge or consent, be withdrawn." until further notice the said bonds shall be dealt in "flat" and to be a delivery must carry the Aug. 1 1933 and subsequent coupons. Mitchell Statement Regarding Stock of National City Bank Quoted. New Orleans Texas & Mexico Es'. Co. There was considerable amusement when Mr. MeGohey quoted a statement May 111933. by Charles E. Mitchell, former Chairman of the Board of the National City Notice having been received from the New Orleans Texas & Mexico Bank, who is now on trial in the Federal Court for tax evasion. Mr. Mitchell By. Co. that it does not appear likely that the interest due Aug. 1 1933 requested that the stock of the National City Bank be removed from trading on the first mortgage 5% gold bonds, series C, due 1956. will be paid on the New York Stock Exchange, as manipulation of the stock might on said date: undermine confidence in the bank. The officers of the casualty company The Committee on Securities rules that beginning May 15 1933 and also made the point it was a corporation depending on confidence of the until further notice the said bonds shall be dealt in "flat" and to be a depeople generally and that such confidence might be disturbed by sudden livery must carry the Aug. 1 1933 and subsequent coupons. fluctuations in the price of its shares on the Curb Exchange. May 111933. Referring to the requests made by the officers of the corporations to Notice having been received from the New Orleans Texas & Mexico remove the securities from trading, Mr. MeGohey asked, "In all, there were By. Co. that it does not appear likely that the interest due Aug. 1 1933 47 corporations who made requests to have their stocks removed from trading on the first mortgage 4 % gold bonds, series 13, due 1956, will be paid because they did not know they were being traded in on the Exchange, were on said date: "I think so," replied Mr. Neftel. there not The Committee on Securities rules that beginning May 15 1933 and It was brought out that in many instances companies had only a small until further notice the said bonds shall be dealt in "flat" and to be a depercentage of stock outstanding, and their officers protested that trading livery must carry the Aug. 1 1933 and subsequent coupons. in such stock could easily snake possible "a corner." The witness explained it was the general practice of the Exchange to see that at least 15% of the Inquiry into Listing Practices of New York Curb stock was outstanding, adding, however, this was not a fixed rule. Exchange—Stocks of Corporations Alleged to Have Been Traded in Despite Protests of Officers of Companies—Hearings Suspended Pending Submission by Exchange of New Regulations—Removal by Exchange of Additional Issues from Trading Privileges. The public inquiry into the listing practices of the New York Curb Exchange, which was resumed on May 16, was suspended on the following day (May 17) by New York State Attorney-General John J. Bennett Jr., as the result of a request by William A. Lockwood, Chief Counsel for the Exchange, for time to present a plan to eliminate criticism of the Curb's unlisted department. According to the New York "Times" of May 18 Mr. Lockwood, at the close of the hearing on May 17, read a statement saying: The examination by the Attorney-General has been of great value to the Curb Exchange in that it has shown the Exchange ways in which its socalled unlisted department might be strengthened in the interests of the investing public. The Exchange has already adopted principles whereby the future admission of dealings of such securities is predicated on the filing of additional information and the making of a more searching analysis. The Exchange respectfully suggests to the Attorney-General a temporary suspension of hearings in order that it may present to him certain requirements and rules which it believes will meet and eliminate all possible criticisms of the unlisted department. For that reason an adjournment until further notice is requested. From the "Times" of May 18 we also take the following: Mr. Bennett's Statement. After discussing the request with John F. X. McGohey and Ambrose V. McCall, Assistant Attorneys-General, and Frank Meehan, chief statistician, who have had charge of the investigation, Mr. Bennett read the following into the record: Brokers Got Trading Privileges. It was also brought out that in many of the 47 cases the stocks were admitted to unlisted trading privileges upon the applications of members of the Exchange who owned small blocks of shares, and wanted to specialize in them. In such instances the companies were not asked if they desired full listing privileges, which entailed a $1,000 fee and required that transfer offices be maintained in New York City, Mr. Neftel was questioned by Ambrose Y. McCall, Assistant AttorneyGeneral, regarding refusal to act on the requests for removal from trading made by the American Manufacturing Co., the United New Bedford Gas & Electric Co., the Manhattan Dearborn Corp., the Empire Corp., and others. The witness said some requests for removal from trading were granted. At the morning session the Presidents of two corporations, W. Roy McCanne, of the Sfromberg-Carlson Telephone & Manufacturing Co., and Herbert Abraham, of the Ruberoid Co., testified that stocks of their companies had been traded in on the Curb Exchange without their knowledge and over their vigorous protests. The trading was prior to 1928. It was also brought out the Detroit Aircraft Corp. was removed from full listed privileges to unlisted privileges Dec. 31 1931, and no notice of this effect was carried on the tickers. In addition to the securities which we have heretofore noted have been removed by the Curb from its trading list, it was stated in the "Times" of May 23 that, as of the close of business May 20, the following issues were removed from the Curb's unlisted trading privileges: Canada Bread Co., Ltd.-7% preferred stock, par value $100. Davis Coal & Coke Co.—Capital stock, par $100. El Paso Electric Co., Delaware.—A 7% preferred stock; par $100. Ideal Cement Co.—Common stock, no par. Illinois Brick Co.—Capital stock; par $25. New River Co.-6% preferred stock, par $100; common stock, par $100. Peck, Stow & Wilcox Co.—Capital stock, par $25. Strawbridge & Clothier.-7% preferred stock, par $100. Utica Knitting Co.—Common stock; par $100. Volume 116 Financial Chronicle $100. J. S. Young Co.-7% preferred stock, par $100; common stock, par Adriatic Electric Co.—National City Bank, American depository receipts for bearer shares capital stock, par 100 lire. Navigazione Generale Italians—National City Bank, American depository receipts for bearer shares capital stock, par 500 lire. 2% 10-year sinking fund gold de1 General Laundry Machinery Corp.-6/ bentures due June 1 1937, with warrants and certificates of deposit therefor; 2% 10-year sinking fund gold debentures due June 1 1937 (without war/ 61 rants), and certificates of deposit therefor, capital stock, par 200 lire. Societe Generale Elletrica Dell Adamello.—National City Bank, American depository receipts for bearer shares, capital stock, par value 200 lire. Terni-Scciete per L'Industria E L'Elettricita.—National City Bank, American depository receipts for bearer shares, capital stock, par 400 lire. The same paper (May 11) stated that removals from dealings yesterday included Wheeling & Lake Erie Railway 7% prior lien stock, Geometric Stamping Co. common stock, and Muncie Gear Co. preferred and common stocks, all "because of lack of public interest." Items regarding the State Attorney's inquiry into the listing practices of the Curb, and bearing on the removal of issues from trading privileges, appeared in these columns April 8, page 2339; April 15, page 2521; April 22, page 2703, and May 6, page 3076. Nomination of Officers of New York Wool Top Exchange —William S. Dowdell Renamed for President. William S. Dowdell has been nominated for re-election as President of the Wool Associates of the New York Cotton Exchange, Inc., Philip B. Weld as First Vice-President, Joseph R. Walker, Second Vice-President, and Kenneth G. Judson as Treasurer, it was announced by the New York Wool Top Exchange on May 18. The announcement said that the nominations for the Board of Governors follow: William A. Boger, H. Nicholas Edwards, Frank J. Knell, Elwood P. McEnany, John J. Pflieger, Henry H. Royce, Gordon S. Smillie, Max AV. Stoehr, Alvin L. Wachsman, Herbert K. Webb and J. Victor di Zerega. E. Malcolm Deacon, James B. Irwin and Byrd W. 1Venman have been nominated for Inspectors of Election. The annual election of the Exchange is to be held on June 5 and the new officers will assume office on June 7. Loren S. Spoor Becomes Manager of Westchester County (N. Y.) Clearing House Association. It was indicated in White Plains, N. Y. advices May 12 to the New York "Times" that Loren S. Spoor, former Vice. President in charge of the banking department of the Westchester Title & Trust Company here, would become manager of the Westchester County Clearing House Association on 3la3- 15, succeeding C. H. C. Greentree, who will retire. The announcement said the dispatch was made by Arthur H. Titus, President of the association. Mr. Spoor was at one time White Plains Commissioner of Finance. He has been Secretary and Treasurer of the Clearing House Association since it was organized about a year ago. Municipal Bonds Face Period of Probation Before Return to Former Favor as Savings Bank Investment, According to Carl M. Spencer of Home Savings Bank of Boston—Views Presented Before National Association of Mutual Savings Banks. "A period of probation lies ahead for the municipal bond before it returns to its former favor as a savings bank investment," said Carl M. Spencer, President of the Home Savings Bank of Boston, who as Chairman of a special committee of the National Association of Mutual Savings Banks, reported on May 24 to the annual conference of the association in session at Swampscott, Mass. Mr. Spencer pointed out that "because of events of the last year savings banks have been forced to revise their judgment of municipal securities to some extent." He went on to say: Changes developing since the beginning of deflation culminated quite suddenly in an unprecedented situation. A few years ago the average bondholder would have said that municipals "stood next to governments." It seemed to him that safety was assured, the market good and the yield satisfactory. Contrast this outlook with conditions of the last six months, when many cities have found it hard to meet bond and interest payments and some actually have been unable to do so. Fortunately, in spite of recent troubles, municipal reforms have been set in motion, real economies made, and the tax burden is being readjusted. Both the citizens and the administration of the average city can be commended for the vigor with which they are attacking a difficult condition. The taxpayer is talking of and thinking about city affairs and generally accepting a responsibility which he should never have forgotten. A continuance of this favorable Progress again will enable our cities and towns to find a market for their bonds. Probably as municipal and State debts mature the total burden of debt will be decreased. Almost automatically this should improve the market. Any increase in Federal income taxes also would have a marked effect. One great advantage to the holder of municipal bonds is tax exemption. Any pressure for tax exempts upon a narrowing outstanding total would improve the market. Our cities and towns have the matter of this improvement largely in their own control. If they faithfully and consistently continue to seek economies, enact wise legislation and curtail appropriations and borrow. lags, the interest of the bond buyer will be quickly awakened and municipal issues of the better grade will return to favor. 3633 The special committee's report upon municipal financing contained many points of interest, including recommendations for the conduct of municipalities generally. It read in part: responsiWith broader investment in governments must come increased business bility and an interest in public affairs. Neither enthusiasm for a dangerthe to us blind should recovery nor an unthinking patriotic impulse ous possibilities of uncontrolled inflation or unbalanced budgets. No thinking citizen can fail to recognize the unprecedented crisis facing those in control of Government policies. During the emergency many cherished traditions of economic and fiscal philosophy may have to be thrown overboard. On the other hand we cannot shut our eyes to the even more tragic possibilities if we fail, after the crisis has passed, to return to sound principles of public finance. As citizens and as trustees of the billions intrusted to our care we should lose no opportunity to exert every influence to maintain unimpaired the integrity of the credit of the United States Government. A tremendous change for the municipal bond investor has taken place in the last five years. His sense of security has been undermined, his market has been narrowed and his remedies for default, a contingency hitherto unsuspected, have became uncertain. Municipal bonds no longer are classified next to Governments as secondary reserve for emergencies. This is true even of the short term municipal note, issued in anticipation of revenue, for which there formerly was a ready market. The remedy depends partly upon legislation, Federal and State, but more upon economy, efficient operation, wise accounting and fiscal planning by municipalities themselves. Aid to farmers, Federal relief, mortgage and home loan refinancing, new bankruptcy laws, lending of State or Federal credit, legislation to regulate municipal operations and loans, the effect of inflation as a relief to debtors generally, and a genuine, even if slow, revival of business may be expected eventually to solve all but the most desperate cases. The laxity of municipal accounting methods, the short-sightedness of fiscal practices, the lack of vital information, have made it difficult for the municipal investor to get a true picture of the values behind his bond. Carelessness and inefficiency have played their part even when downright dishonesty or evasiveness has not been present. Political influences have ruled and scientific appraisal, accountancy and fiscal methods have been conspicuous by their absence. Reforms are needed and will come in response to enlightened public opinion and the pressure which the cautious investor will inevitably exert. The troubles of municipalities, however, lie not in figures and reports, but in the facts and causes behind them. The growth of expenditures and debt, extravagances indulged in by heedless voters, wastes resulting from graft and political corruption, increasing demands for unemployment relief, finally have brought the average municipality to the point where the burden scarcely can be met by the taxpayer out of his diminished income and resources. In too many cases he is, indeed, faced with a bill entirely beyond his ability to pay. Default results; the cost has been counted too late. in Rediscount Rate of FedReduction from 3 to 2 eral Reserve Bank of New York—Chicago Reserve Bank Reduces Rate from 33. to 3%. The rediscount rate of the Federal Reserve Bank of New York was reduced on May 25 from 3% to 234%, effective May 26. The 3% rate was established on Apr. 7, at which time it was lowered from 33-%. The Federal Reserve Bank of Chicago yesterday brought its rate down from 334% to 3%. The 334% rate had been in effect at the Chicago Bank since March 4, when it was raised to that figure from 23/2% The announcement issued by the New York Reserve Bank regarding the change in the rate follows: FEDERAL RESERVE BANK OF NEW YORK. Rate of Discount. To All Member Banks in the Second Federal Reserve District: You are advised that, effective from the opening of business Friday, May 26 1933, until further notice, this bank has established a rate of discount of2%% per annum for rediscounts of eligible paper for member banks, and for advances to member banks under the terms of Section 13 of the Federal Reserve Act, as amended. GEORGE L. HARRISON, Governor. From the New York "Times" we quote the following from Washington, May 25: Another indication of the disposition of the Federal Reserve System to "go along" with President Roosevelt's expansion program was seen here to-day in the reduction of the rediscount rate of the New York bank from 3 to 2½%. The rate structure of the banks was understood to have been discussed earlier in the week by Eugene R. Black, Governor of the Federal Reserve Board: George I. Harrison, Governor of the New York bank, and other bank Governors. This conference of bank Governors also decided to resume open market purchases of United States securities and authorized initial purchases of $25,000,000. This was interpreted as placing the system squarely behind the program of expansion of credit. The New York bank established the 3% rate on Apr. 7. this having been a reduction of % of 1%. All other banks of the system are on a 3%% basis. Seven of the banks have made no change in rates since October, 1931. Officials said other banks now might reduce their rates. Glass Bank Bill Passed by Senate—House Passes Steagall Bill—Deposit Insurance Plans Carried in Both Bills. The Glass banking bill was passed by the Senate on May 25 without a record vote; earlier in the week (May 23) the House, by a vote of 262 to 19 passed the Steagall bill. Both bills carry deposit insurance provisions; the Glass bill provides for both temporary Federal insurance of bank deposits up to $2,500 for a year, beginning July 1, and permanent deposit insurance thereafter. The permanent insurance 3634 Financial Chronicle would be effected through a Federal Bank Deposit Insurance Corporation, included in the Glass Bill and also in the Steagall Bill said the New York "Times," which in its account from Washington May 25 went on to say: Going through the Senate with unexpected speed, the bill was subjected to a few changes. The Senate reduced to one year the time in which commercial banks must divorce their security affiliates and in which private banking houses,such as J. P. Morgan & Co., must give up either the investment business or the receiving of deposits. President Roosevelt has been described as lukewarm toward it while Secretary Woodin has opposed its enactment at this time, but Senate supporters expressed the hope the President would sign it. Pressure for the bill was ascribed to the demand for Federal guarantee of deposits, following upon the March bank holiday, and to disclosures in the investigation of J. P. Morgan & Co. Only a viva voce vote was taken on final approval; no dissenting voices were heard. The Steagall Bill was immediately substituted for the Glass Bill as a preliminary procedure to insure a conference between the two houses, to which Senators Glass, Bulkley, McAdoo, Walcott and Townsend were named to represent the Senate. The principal differences to be resolved in conference incolve the deposit insurance provisions. The temporary deposit insurance fund was placed in the bill through an amendment by Senator Vandenberg. Allowing easy access for State banks to the benefits of the guarantee, the amendment suited State bank Champions, such as Senator Long. He backed the bill, although he hadled a filibuster against the Glass measure in the last Congress. Under the Vandenberg amendment, Federal Reserve member banks licensed before and after July 11933. become members of the fund. So do State bank and trust companies applying for membership before next Janunary, if State banking examiners declare the institutions solvent. The temporary fund would insure deposits of any depositor up to $2,500, but not those "under restrictions imposed by the Secretary of the Treasury." Banks becoming fund members before July 1 must pay in on June 15 a check for % of 1% of their total deposits eligible for the benefits, and those becoming members afterward pay on the same basis at the time. The Treasury will contribute through an appropriation of $10,000,000. Banks shall not pay more than 23 % on insured deposits. If the fund cannot pay its obligations, the Treasury will stand the expense, to be later reimbursed from the members. The fund would be administered by the Federal Reserve Board. May 27 1933 An item bearing on the two banking bills appeared in these columns May 20, page 3458, at which time we noted that a deposit insurance proposal said to have been suggested by Secretary of the Treasury Woodin was rejected on May 19. On that date the "Times" advices from Washington said: The Glass Banking and Currency subcommittee early to-day unanimously rejected a proposal purporting to come from the Treasury Department, to have the Reconstruction Finance Corporation temporarily underwrite all deposits in all banks now open. The committeemen were obviously surprised at the motion since all believed heretofore that Secretary Woodin was opposed to such guarantees. As soon as Senator Glass had finished his introductory speech, however, Senator Vandenberg offered an amendment which would result in guaranteeing all deposits up to $2,500. Glass Criticizes Woodin. The bill bearing Senator Glass's name is considerably changed from the form in which it was passed by the Senate in the Seventy-second Congress, a notable change being the insertion in this bill of the authority for Mr. Woodin to continue to sit On the Reserve Board, and, as Senator Glass said, continue to exercise, as have his predecessors,a"dominatinginfluence." The Senator, in his speech, spoke rather sharply of Secretary Woodin for insistence on this point, which, he said, has made the Reserve Board "the foot-mat of the Treasury." Mr. Glass uttered an unqualified criticism of one phase of the Treasury's alleged practices. "The Federal Reserve banking system was devised for the purpose of responding to the business of industrial and agricultural requirements of this country," he said. "It is owned exclusively by the member banks. It was never intended that the Federal Reserve banking system should be used as an adjunct of the Treasury Department and particularly was it never contemplated that it should be so used to such an extent as recently has been done as to very materially curtail the capabilities of the Federal Reserve Banks to serve the business interests of the country. "There has not been a bond issue floated by the government since the beginning of the World War up to within two weeks ago that was not floated through the agencies of the Federal Reserve banking system. "In latter years the Federal Reserve Banks notably and the member banks of the system substantively have been compelled to subscribe to the issues of United States bonds. I say compelled in the sense that it was regarded as dangerous for a member bank or a Federal Reserve Bank to decline House Approval is Expected. to take its allotment of securities, whether long-time bonds or Treasury The clause allowing State banks to share freely in the insurance benefits, notes as apportioned by the Secretary of the Treasury. it is understood, will make the amendment acceptable to the House, where "The major part of those issues have been taken by the Federal Reserve a large group, headed by Representative Steagall, stands strongly for the Banks or the member banks. That largely means in time of stress that rights of these institutions. these banks, just in that measure, are disqualified from responding generIn providing for permanent deposit insurance, the Steagall plan would ously and liberally to the requirements of commerce, industry and agriallow State banks to participate with Federal Reserve member banks on culture. easy terms and without the strict Federal examination demanded by Senator "That has largely been done, your committee thinks, through the domGlass, who seeks to make all banks eventually members of the Reserve inating influence of the Secretary of the Treasury as a member of the System. Federal Reserve Board." The controversy over the Postal Savings System occurred because the . Such coordination of the Treasury Department and the Reserve Board bill as presented barred withdrawal of funds in less than 60 days. The Was necessary during the World War and in the early post-war years, Senator Banking and Currency Committee insisted that this was only fair, because Glass said, testifying on the basis of his own experience as Secretary of the the bill abolishes payment of interest on checking accounts by Federal Treasury, and calling for verification on Senator McAdoo, another former Reserve member banks. Secretary of the Treasury. But, he contended, now it is unnecessary. Senators McKellar, Bone and Wheeler charged Senators Glass, McAdoo Answering the question why his committee did not persist in eliminating and Bulkley with trying to destroy the Postal Savings System, and this the Secretary from the board, Senator Glass said: was bitterly denied. The Senate finally adopted an amendment by Senator "That provision is not included only by reason of the fact that the SecTydings, allowing withdrawal at any time, but foregoing interest if withretary of the Treasury seemed to regard it as a personal affront to him and as drawal were made within less than 60 days after deposit. a curtailment of his power which he ought to have at this particular time." When the private bankers section was reached, Senator Tydings vainly "Stock Gambling" Credit Barred. strove to substitute a plan allowing the private banks to continue in both The new Glass Bill retains the former provision designed to keep Federal the deposit and investment securities business, but requiring strict liability. Reserve credit out of speculative channels, or "stock gambling," as Mr. He vigorously forecast that the language commanding the private banks to Glass called it. ... give up either investment business or receiving deposits would be held Chase "Divorcement" is Cited. unconstitutional. further colloquy with Senator Norris, Senator Glass said he believed The Washington correspondent of the New York "Journal theIntransition in affiliate business should be comparatively simple, pointing of Commerce" on May 25 reported: to the divorcement action in this regard already taken by the Chase NaNew York City as an example. tional Bank of Resist Changes on Separation. "These affiliates," Mr. Glass went on,"were the most unscrupulous conSenator Glass and Senator Bulldey resisted all efforts to modify the tributors, next after the debauch of the New York Stock Exchange, to the provisions separating investment and deposit banking. Senator Tydings financial catastrophe which visited this country,and were mainly responsible (Dem., Md.), urged an amendment that would have enabled Alexander for the depression under which we have been suffering since, and they ought Brown & Son to continue their present operations as a partnership, a privito be speedily separated from the parent banks, and in this bill we have lege, however, that would have extended to other unincorporated concerns. done that." He argued that deposits with this concern would be safer in this manner, Passing over the branch-banking provision, on which there is little disbecause of the personal responsibility to depositors by all members of the pute at this time, Senator Glass took up the liquidating provision of his bill. concern to the full extent of their personal assets. This would establish a corporation with a capital of $500,000,000 to insure Section 21 of the bill was materially "tightened," but the deletion of the —not guarantee—deposits in banks holding membership in the Federal word "principally" making it unlawful for any one engaged in the business Reserve System. of issuing, underwriting, selling, or distributing, at wholesale or retail, or Adverting to his former bill, which included a provision similar to this through syndicate participation, stocks, bonds, debentures, notes, or other one, Mr. Glass exclaimed: securities, to engage at the same time to any extent whatever in the deposit "Had that bill become law there would have been released hundreds of banking business. This means complete divorcement. millions of dollars—more than a billion dollars—tied up in closed banks. Senator Glass declared that there would be no lack of co-operate financing The bill did not become law and there are still hundreds of millions of dollars because of such a separation or from the divorcing of securities affiliates tied up in closed banks." from parent national banks within a 12-month period. He pointed out Denies "Loose Banking" Incentive. that without awaiting passage of his bill, although in anticipation thereof, the Chase National Bank undertook to divest itself of its interest in the Senator Glass cautioned the Senate not to regard the bill's provision Chase Securities Co. He added that steps were taken to continue the as a "guarantee" of deposits. operations of the latter as a separate entry, pointing out that wherever During the debate the Senator denied insinuations contained in questhere is profit to be made in such a venture, there would be capital to emtions by numerous Senators that the insurance of Federal Reserve member bark upon the project. banks' deposits would, first, ruin State and non-member banks, and, There were a number of minor amendments adopted by the Senate, second, encourage loose banking. one of which gave assurances of eligibility for membership in the Reserve The first contention he termed "nonsensical," telling the Senate that system and for securing the benefits of the insurance provisions of banks "there are thousands of strong State banks which would apply ImmediatelY organized prior to the passage of the measure in completed form, although for membership In the insurance corporation, as they could do without having a capital of only $25,000. surrendering their State charters, simply by paying the proportionate Senator Glass opposed a proposal that banks be permitted to write fire assessments made on the reserves of member banks automatically eligible." and other insurance, and the Senate backed him up. He said also that the insurance system would not go into effect for While he agreed to the "softening" somewhat of the provisions treating one year. thereby giving all banks ample opportunity to prepare to take postal savings deposits as time deposits, so that while they might be withadvantage of it. . drawn on sight, they would not be accorded interest for any part of an Denying the charge that loose banking would be encouraged, he said: uncompleted 60-day period. "On the contrary. In my opinion, It would lead to the severest espionage It was declared by the Virginia Senator that the inquiry made by the upon the rotten banks of this country that they have ever had because Banking Committee impressed the members with the fact that the payfor the last 12 or 14 years they have not had any espionage upon them. ment of interest on demand deposits "has gotten to be a dangerous vice in "What a spectacle is presented when the Comptroller of the Currency the banking system of this country." He charged that it has resulted in under oath and obligation to enforce the law of inspection, of examination, syphoning to the surplus funds of the interior large the money of comes before the Senate Banking Committee and tells us that. If he had the centers enforced the law as was done nearly two years ago, he would have closed banks, which would rather accept a nominal interest rate than to lower half the national banks in the United States. their own Interest rates upon loans to their customers. Volume 136 Financial Chronicle Comptroller's Office Criticized. sworn duty and "That means the Comptroller's office has not done its and illicit has permitted this great number of banks to engage in irregular whole banking the practices, with the result that they have endangered community community and have pretty nearly paralyzed the whole business of this country. this insurance." "I think that better banking is inevitable if we have In the case of the Steagall bill, it was stated in the "Times" that on May 22 an organized minority of both Democratic and Republican members of the House launched an attack on the deposit insurance proposals. The May 22 Washington account to that paper said: to $10,060 Proposed amendments ranged all the way from a limitation involving foreign of salaries within the Federal Reserve System to others of banks officers by stock of transactions. State banks and the ownership and trust companies. Majority from Early in the battle the opposition forced the admission Leader Byrns that the bill is not on the Roosevelt program. * * * Pennsylvania and The leaders of the opposition were McFadden of Texas, Hoeppel McGugin of Kansas for the Republicans and McFarlane of of California and Weideman of Michigan for the Democrats. Patman Amendment Adopted. only one of imAn amendment offered by Mr. Patman of Texas, the provided that after all portance to be adopted, eliminated Section 3, which paid or pronecessary expenses of a Federal Reserve Bank shall have been on thepaid-in vided for, the stockholders would be entitled to a 6% dividend capital stock. admita Morris The second phase of the battle came over the section that in similar Plan banks and other incorporated banking institutions engaged offered by Mr. business to the provisions of the bill. An amendment Weideman was defeated, 54 to 36. section permitting An amendment proposed by Mr. McFadden to the and operate State member banks of the Federal Reserve System to establish lines held and branches produced plenty ofspeech-making, but the majority sought to amend the section remains in the bill as written. McFadden also rejected in a the open-market section of the bill and the amendment was storm of noes. Reserve Banks to The second amendment adopted requires Federal the facts of report to Congress as well as to the Federal Reserve Board This was the negotiations and agreements with foreign banks or bankers. last to be adopted today. In recording the passage of the Steagall bill by the House had on May 23 the Washington dispatch to the "Times" the following to say: the Steagall The House made only a few changes of a minor nature in liability" BBL An amendment to strike out the clause abolishing "double of the enactment of bank stockholders on account of shares acquired after bill was defeated, 83 to 23. as the agency The bill creates a Federal-controlled insurance corporation the first $10,000 to guarantee deposits. The protection would be 100% on deposits in excess of any deposit, 75% for the next $50,000 and 50% for any of $50,000. State Banks Centre of Fight. against the The battle preceding passage was waged almost entirely institutions, provisions relating to State banks. Spokesmen for these Texas. Brown of Representatives McGugin of Kansas, McFarlane of members of Kentucky and Boileau of Wisconsin, managed to eliminate Federal Deposit the the Federal Reserve Board from membership on providing that Insurance Board and obtained adoption of an amendment "after the the bill would become effective by Presidential proclamation by the Comexamination of State banks is concluded" and not, as urged enactment. mittee on Banking and Currency, within one year following no member The section dealing with bank affiliates and providing that any corporation, bank of the Federal Reserve System shall be affiliated with flotation or association or business trust engaged principally in the issue, of the bill underwriting of stocks, bonds or debentures was another part against which the opposition concentrated its fire. enactment. Under the bill this section does not apply until two years after Opponents Win on Board. making it Representative Fish of New York offered an amendment effective in one year, but it was defeated. 68 to 64. of the The one real victory of the State bank group was the elimination corFederal Reserve Board members from membership on the insurance poration. The bill as reported provided that the corporation board should member of consist of the Comptroller of the Currency, who is an ex-officio and three the Federal Reserve Board; a member of the Reserve Board citizens, to be appointed by the President. the Representative Patman of Texas submitted an amendment making that personnel of the board the Comptroller and four citizens, arguing made be should since there were more State than national banks the board systems. This up of members independent of both Federal and State vote. viva-voce overwhelming amendement was adopted by an or employe Several amendments to fix the minimum salary of any officer of the bill led to an hour's of any bank operating within the provisions majorities. The limitation delay in passage. All were voted down by large annual salary of $10,000, regardless of in all the amendments was to an the size or importance of the institution. eliminate State banks in Near the end a determined effort was made to officials or employes in banks small towns from the provision prohibiting from engaging in the insurance business, but it lost. the White House Speaker Rainey said that while the bill was not on sign it, or a measure along program, he believed the President would future. similar lines, if the Senate acted in the near Deposit Provision Resolution Opposing Guaranty Bank Adopted by New Jersey of Glass-Steagall Bank Bill to 'Association—Resolution Forwarded Bankers President Roosevelt. bank deposit guarantee proA resolution condemning the bill was adopted by the Banking all Glass-Steag the of vision annual convention in its at Association Bankers' New Jersey to the resoopposition Unexpected 20. Atlantic City, on May led by Frank C. Ferguson, meeting, the at developed lution Bankers' Committee on Federal Jersey City, Chairman otthe 3635 Legislation, the group which had made and reported to the convention an intensive study of the Glass-Steagall measure. A dispatch from Atlantic City, May 20, to the New York "Herald Tribune" stated that Mr. Ferguson was joined in his "No" vote by seven other delegates. From the same dispatch we quote: It had been expected that the resolution would go through unanimously for an impressive telegram to President Roosevelt, directly on the heels of similar action by the Pennsylvania resolution, and it set forth that "dig. astrous State experiences have shown that guaranty proposals are unsound in principle and should not be undertaken by the Federal Government or any other agency." "If that resolution," said Mr. Ferguson, "had been offered five year' ago, I would have given it my unqualified approval. But in the present state of affairs, I am satisfied that the only thing that will re-establish public confidence in banks is some sort of guarantee. The public confidence has been so shaken that the only thing that remains is their confidence in the Government." Mr. Ferguson is President of the Hudson County National Bank of Jersey City and Vice-President of the Port of New York Authority. The names of the seven who joined him in the minority vote were not recorded. The resolution is being sent directly to President Roosevelt, rather than to Senators and Congressmen as in the past. Speakers to-day explained that "the President feels that objections to the guarantee plan should be brought directly to him, because he has had little information on it." The Committee report on the Glass-Steagall bill analyzed it and offered these comments: "The effort of the Glass bill will be to drive all non-member banks into the Federal Reserve System." This also was the concensus of talk among bankers in the convention lobbies. "Senator Glass unquestionably is one of our leading authorities on banking." "The Committee advocates support of all Federal legislation that is sound, but, while Federal supervision may be needed, it should not be allowed to encroach upon the individual enterprise of bankers. "The Committee feels that the effect of the Glass bill is so tremendous that the Senate should have more time for Committee study of every phase of the bill and its amendments." Repeal of Gold Standard Act Called For in Resolution Introduced by Representative Steagall at Instance of President Roosevelt—Makes All Money Legal Tender—Would Remove Obligation of Foreign Governments to Pay War Debts in Gold. Under a resolution introduced in the House yesterday(May 26) by Representative Steagall the gold standard act would be repealed. With respect to this move Associated Press accounts from Washington said that President Roosevelt has decided that the United States should go off the gold standard by statute, and that he had requested Chairman Steagall of the House Banking Committee to introduce the proposed resolution. The further Associated Press accounts from Washington yesterday as given in the New York "Sun" stated: The Alabama Democrat conferred with the President at the White House. Later he called newspaper men to his office and read a copy ofthe resolution which, he said, "decides the United States is off the gold standard by statute." "It repeals the gold standard act," Mr. Steagall said. He added, that, under the resolution, no bonds, no obligations of the Federal Government and no obligations of any form would have to be paid in gold or gold currency upon the enactment of the measure. Would Affect War Debts. He said it would be possible for the foreign debtors to pay the United States their war debts in any legal money. "This bill frees the United States from the obstacles and handicaps of the gold standard," he declared. "It is an administration bill and a part of President Roosevelt's emergency relief program." In addition, Mr. Steagall said, the law would make it unnecessary for President Roosevelt to devaluate the gold dollar under the inflation provisions of the farm relief act. Mr.Steagall termed the measure one of the greatest steps toward stabilizing money in the United States. All legal money under this act, he asserted, would meet all obligations payable in gold. Chairman Fletcher of the Senate Banking Committee will introduce an Identical resolution in the Senate. The Bill Is Introduced. Mr. Steagall immediately introduced the bill in the House and made the following statement: "I give it as my humble judgment that this bill marks a final, definite and determinate step that will bring a revival of business and a restoration of prosperity and happiness to the American people." The resolution is entitled "to assure uniform value to the coins and currencies of the United States," and reads as follows: Whereas the holding of or dealing in gold affect the public interest, and are therefore subject to proper regulation and restriction; and Whereas the existing emergency has disclosed that provisions of obligations which purport to give the obligee a right to require payment in gold or a particular kind of coin or currency of the United States, or in an amount of money of the United States measured thereby, obstruct the power of the Congress to regulate the value of the money of the United States, and are Inconsistent with the declared policy of the Congress to maintain at all times the equal power of every dollar, coined or ssued by the United States, in the markets and in the payment of debts, now, therefore, be it Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, that (A) Every provision contained in or made with respect to any obligation which purports to give the obligee a right to require payment in gold or a particular kind of coin or currency, or in an amount on money of the United States measured thereby,is declared to be against public policy; and no such provision shall be contained in or made with respect to any obligation hereafter incurred. Payable in Any Coin. Every obligation, heretofore, or hereafter incurred whether or not any such provision is contained therein or made with respect thereto, shall be discharged upon payment, dollar for dollar, in any coin or currency which at the time of payment is legal tender for public and private debts. 3636 Financial Chronicle Any such provision contained in any law authorizing obligations to be issued by or under the authority of the United States, is hereby repealed. but the repeal of any such provision shall not invalidate any other provision or authority contained in such law. (B) As used in this resolution, the term 'obligation' means an obligation (including every obligation of and to the United States, excepting currency) payable in money of the United States; and the term 'coin or currency' means coin or currency of the United States, including federal reserve notes and circulating notes of federal reserve banks and national banking associations. Section 2. The last sentence of paragraph (1) of sub section (B) of section 43 of the act entitled 'an act to relieve the existing national economic emergency by increasing agricultural purchasing power, to raise revenue for extraordinary expenses incurred by reason of such emergency, to provide emergency relief with respect to the agricultural indebtedness, to provide for the orderly liquidation of joint-stock land banks, and for other purposes.' approved May 12 1933 is amended to read as follows: All coins and currencies of the United States (including Federal Reserve notes and circulating notes of Federal Reserve Banks and National Banking Associations) heretofore or hereafter coined or issued, shall be legal tender for all debts, public and private, public charges, taxes, duties and dues, except that gold coins, when below the standard weight and limit of tolerance provided by law for the single piece, shall be legal tender only at valuation in roportaloin ual aw ntoethaecht• Under0 weight."9 14 0reaffirming previous acts, it was acted provided: "The dollar consisting of twenty-five and eight-tenths grains of ninetenths fine shall be the standard unit of value, and all forms of money issued or coined by the United States shall be maintained at a parity of value with this standard, and it shall be the duty of the Secretary of the Treasury to maintain such parity." Decision Made Suddenly. The decision by the President to seek the gold legislation came suddenly. The first inkling was this morning when he talked with Steagall. They conferred but briefly. Later the President consulted with his economic delegation and then with Secretary Woodin, who announced he soon would explain the action. It was regarded in Washington as another move to give the President an absolutely free hand in his economic negotiations with the other world Powers. Of course, already the United States Is off the gold standard, but by repeal of the gold act Mr. Roosevelt will be free to negotiate any standard he sees fit. Ruling on Bond Clause by New York Supreme Court Justice Ingraham—in Proceedings Involving Trust Mortgage Given by Libby Hotel Corp.—Holds Obligation Need Not Be Met in Gold—Ruling Affects Payment by City in Condemnation Proceedings. In passing upon a petition of the Irving Trust Co. of New York as trustee of the bond issue for the Libby Hotel Corp., sold in 1924 by the now defunct American Bond & Mortgage Co., Justice Ingraham of the New York Supreme Court decided on May 24 that the fact that bonds given for the property stipulated that the payment be made in "gold coin of not less than the present standard of weight and fineness," a payment by the city in condemnation proceedings need not be made in gold. In handing down his conclusions Justice Ingraham drew attention to the President's proclamation suspending gold payments by the United States, and said "at the present time there is but one lawful medium of exchange, and this has the same coin value as gold of equal amount." "I accordingly" he said, "instruct the trustees to accept current funds and upon payment of the amount due to satisfy the mortgage." From the "New York Law Journal" of May 24 we quote as follows the decision: Irving Trust Co.. &c., v. Hazlewood, &c.—This is a motion by the trustees under a trust mortgage made by the Libby's Hotel Corp. for construction of the provisions of the mortgage and for direction to the trustees to satisfy said mortgage upon receiving payment in full of the amount due them in funds other than gold coin. The obligation of the mortgagor Provides that: "Libby's Hotel Corp. . . . will pay to bearer or to the registered holder hereof . . . dollars, in gold coin of the United States of America of not less than the present standard of weight and fineness as now fixed by law (notwithstanding any law which may now or hereafter make anything else legal tender for the payment of debts) . . .," and the coupons attached to the bonds contain a similar provision. In August 1929, the mortgaged property was condemned by the City of New York, and as a result of condemnation proceedings and award of$2.850,000, with interest thereon, has been affirmed by the Court of Appeals. The city is expected to make payment of the award during the current week. Such payment will not be made in gold coin, and the trustees accordingly seek instructions of the court. The attorneys for approximately 96% of the bondholders, on behalf of their clients, have presented an affidavit consenting that payment be made in current funds instead of gold coin. By presidential proclamation all gold coin and gold certificates have been withdrawn from circulation. Upon surrender of gold coin or certificates the holder has received other currency of equal coin value. The case of Bronson V. Bodes (74 U. S., 229) is not in point. Different circumstances there prevailed. Two varieties of money were in general circulation: the gold dollar and the paper dollar. The latter had a much depreciated value. At the present time there is but one lawful medium of exchange, and this has the same coin value as gold of equal amount. The case of In re Societe Intercommunale Beige d'Electridte-Feist v. The Company, decided by the Court of Appeals of England in March of this year and reported in the Times Law Reports (page 344), decides the question involved here. I accordingly instruct the trustees to accept current funds and upon payment of the amount due to satisfy the mortgage. Order signed. In its issue of May 23 the New York "Times" had the following to say regarding the proceedings: The first plea made here for a ruling as to payments in gold in settlement of a mortgage was filed in the Supreme Court yesterday (May 22] in behalf of bondholders of the former Libby Hotel property at Chrystie and Delancey Streets. Justice Ingraham will be asked this morning to decide whether a payment of more than $2,000,000 to be made by the City of New York, which condemned the property, must be in gold, which the city cannot pay, or in other currency which the city will tender. The question arises on an application by the Irving Trust Co. as trustee under a trust mortgage given by the Libby Hotel Corp. on Nov. 1 1924, on which bonds of $1,420,000 are outstanding. The petition filed yesterday May 27 1933 is directed to the committee for the protection of holders of first mortgage bonds sold by the American Bond & Mortgage Co. The committee is headed by Craig B. HazIewood, and represents 94% of the bondholders. The petition recited that a foreclosure suit against the property was brought in 1929 and that it was bought in by a nominee of the American Bond & Mortgage Co. The city condemned it subsequently for the lower east side improvement. The award in the case,amounting now to more than $3.500.000, has been upheld by the Court of Appeals. Of this sum more than $2,000,000 will be payable to Charles E. Hughes, Jr., as receiver of the American Bond & Mortgage Co. Each bond provided for its payment in "gold coin of not less than the present standard of weight and fineness." The trust company said that the city would not pay in gold coin and the company is in doubt whether or not it can satisfy the provisions of the mortgage "upon receiving payment from the city in currency other than in gold coin." The petition pointed out that the city expects to pay about May 25, but cannot do so in gold "and if payment is not received at the present time it is extremely doubtful when, if ever, the large amount required to be paid by the city, will be available." The bondholders' committee has requested the trust company to "accept payment in current funds and not insist on gold," the petition concluded. It was noted in the "Times" of May 25 that the bonds were quoted above 90 on May 24 as word was received of the probability of full payment. Prof. 0. M. W. Sprague, Formerly Advisor to Bank of England, Appointed Executive Assistant to Secretary of Treasury Woodin—Will Serve as Financial Adviser to United States—Reported He May Act in Stabilizing Dollar Through Equalization Fund. On May 23 announcement was made by Secretary of the Treasury Woodin of the appointment of Prof. 0. M. W. Sprague as Executive Assistant to the Secretary of the Treasury. In that capacity Prof. Sprague will serve as financial and economic adviser to the United States Government. Inducted into office on May 24 as Executive Assistant to Secretary of the Treasury, Prof. Sprague who was former financial adviser to the Bank of England, declared according to the Washington correspondent of the New York "Journal of Commerce" that there would be no immediate attempt at stabilization of the dollar. From the same account we quote: Dr. Sprague felt that the stabilization of general economic conditions must precede currency stabilization and he intimated that it would be useless to stabilize the currencies of one or two important countries without the rest taking similar action. Adviser to Government. • As executive assistant to the Secretary of the Treasury, Dr. Sprague will be economic and financial adviser to the Government. He said that he might go to the London Economic Conference, accompanying American delegates, although apparently a definite decision had not been reached. Sprague declined to comment on an arrangement with France, England and the United States forming a large fund for currency stabilization purposes. "It is impossible to stabilize currencies to-morrow or next week," Sprague said. Workiny for Stabilization. "Currencies cannot be stabilized until economic conditions are stabilized We are working to that end. "The currency of one important country cannot be stabilized unless other currencies are put in order. "The problem of stabilization is part of the large and general program. We can work toward stabilization of economic conditions and stabilization of currency. Stabilization must be developed." Dr. Sprague was in conference with Secretary Woodin, Under Secretary Dean Acheson and other officials throughout the day. Prof. Sprague, who arrived in New York from London on May 19, immediately left for Washington, and on May 20 was in conference with President Roosevelt and Secretary' Woodin. On May 20 a dispatch from Washington to the New York "Times" said: Dr. Sprague is connected with Harvard University, but since /930 has been—and still is,it is emphasized here—an adviser ofthe Bank of England. It appeared probable that he had been invited to give the administration his ideas in connection with currency stabilization. Dr. Sprague first called on Secretary Woodin at the Treasury Department this morning, and the latter escorted him to the White House, where the three men held a long private conversation. Following that talk it was merely announced that the fiscal authority had "called on the President." Since 1913 Dr. Sprague has been Edmund Cogswell Converse Professor of Banking and Finance at Harvard, and is the author of three authoritative works on banking, his topics principally concerning banking reform and banking history. His experience in England is considered as having eminently fitted hint to advise this government at this time. for Dr. Sprague assumed his post with the Bank of England only a year before Great Britain went off the gold standard and he has had intimate contact with the problems of British currency stabilization during a period in that country's history very similar to the current history era in the United States. When President Roosevelt was a student at Harvard, Dr. Sprague was Just beginning his scholastic career as an instructor iii economics. He was promoted to an assistant professor in 1904. Dr. Sprague left Harvard only once in his career, from 1905 to 1908, when he was Professor of Economics at the Imperial University of Tokyo. According to the "Journal of Commerce" President Roosevelt conferred with Prof. Sprague, Secretary Woodin, UnderSecretary Dean Acheson and Governor Eugene Black of the Federal Reserve Board. In its advices May 23 from Washington the "Journal of,Commerce" in part said: • Voatme Financial Chronicle Equalization Fund. Sprague's appointment has brought the questioif sn equalization fund to the Bank of England to stabilize the dollar to the forefront. As advi Sprague directed the operation of the fund used for the support of the British pound sterling. However, it was said in some circles tha the trend, for the present at least, is away from the equalization fund so far as this Government is concerned. What is finally done may dçend upon any deal the United or the outcome of the eco omic States may make with France and Engle confer solution Against Deposit Guaranty Feature o Glass-Steagall Bank Bill Adopted by Pennsylvania Bankers' Association—Views of 0. Howard Wolfe. A resolution declaring that it "would be most unwise" to enact any plan "purporting to guarantee bank deposits," was adopted on May 19 by the Pennsylvania Bankers' Association, in annual convention at Atlantic City. According to the Philadelphia "Public Ledger," the resolution, introduced by George W. Belly, President of the Harrisburg National Bank of Harrisburg, Pa., and Chairman of the Organizations Committee on Resolutions, read as follows: Whereas, Senate bill 1631 and House bill 5598, the Glass-Steagall Banking Reform bill now before Congress, provide for the establishment of the Federal Bank Deposit Insurance Corporation to be financed by the United States Treasury, the Federal Reserve banks and the member banks of the Federal Reserve System in combination, and Whereas, it is sought thereby to effect a guaranty of bank deposits in member banks. That the Pennsylvania Bankers' Association records its opposition to any plan purporting to guarantee bank deposits, and that we express our firm conviction that any such plan, if enacted into law, would be most unwise. 3637 Nine-Point Program Embodying Reform For Complete Operation of Banks Now on Restricted Basis— Group of Banks in Philadelphia and Delaware County in Petition to President Roosevelt Contend That Regulations of Reconstruction Finance Corporation Are Too Severe. The Philadelphia "Public Ledger" of May 19 stated that what is expected by its sponsors to be the signal for a Nationwide protest movement by the 5,000 banks now on a "restricted" basis against the policies of the Reconstruction inance Corporation and the Federal Reserve Bank was yen on May 18 when representatives of restricted National ad State banks in Philadelphia and Delaware County sent to President Roosevelt a nine-point program of suggested reform in procedure to enable the restricted banks to operate fully. The "Ledger" continued: Frank II. Schrenk, President of the North City Trust Co., was spokesman for the group. At the Manufacturers and Bankers Club he gave out copies of the program as sent to President Roosevelt and explained the situation in an interview. He said the institutions in his group had 147.299 depositors. There are 11 restricted banks in Philadelphia and 130 in this Federal Reserve District. Deposits in restricted banks throughout the country aggregate $5,000,000,000 to $8,000.000,000. Regulations Called Too Strict. In putting into effect the law passed by Congress in March. whereby the Reconstruction Finance Corporation might buy preferred stock in banks or loan against preferred stock, regulations and requirements adopted have been so severe, Mr. Schrenk said, that no bank has been able to meet them, and up to date not a single restricted bank in Philadelphia has emerged from that status. "These regulations were issued," the bank President said, "by the personnel of the Reconstruction Finance Corporation appointed during In advices from Atlantic City, May 19, the "Ledger" stated the Hoover Administration, and are in line with the deflation policy that that informal discussions off the convention floor indicated we were experiencing until the present Administration took office. The Finance Corporation policy has been such as to wreck and that bankers were displaying keen interest in the Govern- Reconstruction ruin and not help banks. insurance of form some ment proposed plan to enact into law Reconstruction Finance Corporation Loans a Drawback. for bank deposits. The same account reported 0. Howard "Many banks are shut tight to-day because after they had teen urged Wolfe, President of the Pennsylvania Bankers' Association, to borrow from the Reconstruction Finance Corporation in order to increase their liquidity they later found that the loan was militating against their and Cashier of the Philadelphia National Bank, as saying: reopening. "As we cast about for measures, whether they be legislative or merely of "The policy of the Reconstruction Finance Corporation and of the banking practice that will strengthen our banking system, we must give Federal Reserve Bank of Philadelphia has been one of discrimination consideration to changed modern business conditions, and it is not reasonable against the banks now operating on a restricted basis. They are asking that banking can accept changed conditions without itself suffering change." us to do things which they are not asking of unrestricted banks, and they • present the speaker, The however, registered himself in opposition to are doing nothing to assist or facilitate the reopening of banks, as evidenced system is futile, plans for bank-deposit guarantees, declaring that such by the fact that not a single bank in Philadelphia has reopened." as it puts a penalty upon well-managed banks. Conditions Called Impossible. "Wherever deposit guaranty has been tried it has inevitably resulted in Among the requirements particularly complained of in connection with the destruction of the restraining influence which a banker feels toward the Reconstruction Finance Corporation's conditions under which it will depositors and catastrophe has resulted," the speaker continued. buy or loan on banks' preferred stock are, first, that the bank pay off all Practical Plan Suggested. loans made with the Reconstruction Finance Corporation, the Federal "I believe, however, that a practical and sound plan of bank insurance Reserve and all other bank loans, and, second, that it match dollar for or guaranty can be devised and offered to a certain large group of depositors, dollar with "new"cash the grant of the Reconstruction Finance Corporation. who are not only entitled to it, but are willing to pay for it. "If a banks were able to meet these conditions," Mr. Schrenk said, "it Is obvious that it would not be necessary for it to issue preferred stock or "In the first place, neither savings nor time deposits, in any judgment, seek further assistance from the Reconstruction Finance Corporation. to are entitled to any protection whatever, other than such protection as sound These conditions are so rigorous that there is hardly a bank now operating banking can give. 100% or an insurance company or a railroad or a business corporation With respect to commercial demand deposits, such deposits are usually that could comply with them." maintained primarily to secure collection service of the vast volume of Strangulation Policy. checks, which are cleared through any business house, and the account also is maintained to entitle the depositor to secure credit accommodations. It is Another complaint is that income on collateral and paper held as security scarcely fair that this type of depositor should contribute risks in the shape for a restricted bank's loans goes not to the bank but to the Federal Reserve of his loans from the bank and yet be immune from the effect of such risk." to be credited against the loans. Collateral is sometimes as high as 200%. Mr. Wolfe then proposed that legislation be enacted permitting any bank Mr. Schrenk said, which means that the bank loses income it needs for to receive on deposit funds that shall be designated either as service accounts, operating expenses, sometimes as high as 14% over the 354% it should utility deposits or for political reasons, perhaps, guaranteed deposits. The Pay the Federal Reserve for rediscount. The restricted banks describe investment of such funds would be limited, one recommendation being that this as "strangulation policy." They point out that their "segregated" they be invested to the extent of 60% in United States securities or in loans deposit accounts allow of no profit. collaterally secured by such securities, with the additional provision that a Methods of appraisement of assets of restricted banks are also attacked. Mr. Schrenk cited many instrances in support of this. A typical one was 10% reserve be maintained against this type of deposit and that banks be to the effect that in one bank an examiner had ruled that seven shares of permitted to make a service charge of not more than $1 per month for each U. G. I. was liquid collateral, and the same examiner in the same bank had account and make a charge of not more than Sc. per check collected or paid. in another case ruled that 400 shares of the same stock was not liquid. With respect to inflation, the speaker said: In another bank an examiner ruled that United States Liberty bonds were "If I were asked to define a sound money and credit system, I think I not liquid collateral. should be inclined to suggest as two fundamental requirements first, that New Plan Suggested. there must be a gold base not only representing a stability of value but Among the points in the program submitted to the President regarded also check upon undue credit expansion and, second, bank credit money to as most important by the sponsors are two which declare the Reconstruction be based upon commercial loans only, those of the self-liquidating typt Finance Corporation and the Federal Reserve have both required from referred to in the Federal Reserve Act. Thus our money would always restricted banks collateral "far in excess of the sums loaned." represent real value." It is proposed that on this collateral additional credit be extended up to 75% of value of collateral. Equalization Fund Raised by'Britain—Increase FloatOther recommendations are that depositors' balances tied up in banks ing Debt of Treasury £200,000,000 in Order to may be used for matching Reconstruction Finance Corporation money in Permit Huge Offers on Market of Sterling. purchase of preferred stock, if depositors so desire; that priority of ReconFinance Corporation preferred stock be eliminated, as it is illegal A London cablegram May 24 to the New York "Journal struction In Pennsylvania; that bank's cash shall be defined so as to include credits due from Reconstruction Finance Corporation and Federal Reserve; that of Commerce" said: restricted banks shall be able to use the latter definition of cash in the reAs a result of the increase in assets held in the equalization fund, the floating debt of the Government during the week ended May 20 was inquirement of meeting net deposits 100%. emased by 1200,000,000. An increase in the fund was authorized shortly "The President of the United States," Mr. Schrenk's statement concludes, "is working out an economic recovery program, fundamentally to after America declared its embargo on gold payments. increase the price of commodities. At present there is tied up in 5,000 The sale of Treasury bills to swell the sterling balances of the Treasury makes it possible to send the pound to much lower levels than obtain in restricted banks in this country between 85,000.000.000 and $8,000,000,000 of deposits. the markets. However, there are no indications that the Treasury up to "The acceptance of a plan whereby, these banks are permitted to rethe present has been acting to reduce quotations on sterling. open and function 100% will restore to the country an even larger amount Pending the efforts during the World Economic Conference to fix a of credits. Increasing bank deposits invariably results in increasing compermanent rate both for sterling and the dollar in terms of gold, the increase modity prices." in the volume of funds in the hands of the Treasury will make it possible undue any in prevent increase rate. the sterling to There are many rumors of plans for temporary stabilization of the poundOffering of $100,000,000 or Thereabouts of 91-Day dollar rato. Actual evidences that a rate of stabilization has been agreed Treasury Bills—Will be Dated May 31. upon are still lacking. Failing to reach such an agreement, it is pointed out, Bids to a new offering of Treasury bills to the amount of the Treasury may decide to throw large amounts of sterling upon the market. $100,000,000 or thereabouts were received at the Federal 3638 Financial Chronicle Reserve Banks or the branches thereof, up to 2 p. m.Eastern Standard time, yesterday (May 26). In inviting the bids on May 23, Secretary of the Treasury William H. Woodin said that the bills will be for 91 days; dated May 31 1933, maturing Aug. 30 1933. On May 31 an issue of $100,613,000 will mature. Secretary Woodin said that on the maturity date the face amount of the new bills will be payable without interest. His announcement continued in part: The bills will be sold on a discount basis to the highest bidders. They will be issued in bearer form only, and in amounts or denominations of $1,000. $10,000, $100,000, $500,000, and $1.000,000 (maturity value). No tender for an amount less than $1,000 will be considered. Each tender must be in multiples of $1,000. The price offered must be expressed on the basis of 100, with not more than three decimal places, e. g., 99.125. Fractions must not be used. Tenders will be accepted without cash deposit from incorporated banks and trust companies and from responsible and recognized dealers in investment securities. Tenders from others must be accompanied by a deposit of 10% of the face amount of Treasury bills applied for, unless the tenders are accompanied by an express guaranty of payment by an incorporated bank or trust company. Immediately after the closing hour for receipt of tenders on May 26 1933, all tenders received at the Federal Reserve Banks or branches thereof up to the dosing hour will be opened and public announcement of the acceptable Prices will follow as soon as possible thereafter, probably on the following morning. The Secretary of the Treasury expressly reserves the right to reject any or all tenders or parts of tenders, and to allot less than the amount applied for, and his action in any such respect shall be final. Those submitting tenders will be advised of the acceptance or rejection thereof. Payment at the price offered for Treasury bills allotted must be made at the Federal Reserve Banks in cash or other immediately available funds on May 31 1933. The Treasury bills will be exempt, as to principal and interest, and any gain from the sale or other disposition thereof will also be exempt,from all taxation, except estate and inheritance taxes. No loss from the sale or other disposition of the Treasury bills shall be allowed as a deduction, or otherwise recognized, for the purposes of any tax now or hereafter imposed by the United States or any of its possessions. William H. Woodin, Secretary of the Treasury, announced on Friday that the tenders amounted to $407,553,000, of which $100,352,000 was accepted. The accepted bids ranged in price from 99.937, equivalent to a rate of about 0.25% per annum, to 99.915, equivalent to a rate of about 0.34% per annum, on a bank discount basis. Only part of the amount bid for at the latter price was accepted. The average price of Treasury bills to be issued is 99.919, and the average rate is about 0.32%. Tenders of $60,078,000 Accepted to Offering of $60,000,000 or Thereabouts of 91-Day Treasury Bills Dated May 24—Bids of $221,557,000 Received—Average Price 0.42%. May 27 1933 ordinary corporations was not specifically denied by Congress until enactment of the 1928 revenue law. The appellant is a Cincinnati corporation engaged in an insurance agency business, all of its stock being owned by the Eureka-Security Fire & Marine Insurance Co. Consolidated returns were filed for the two companies for the years 1926 and 1927, and in 1929 it was held by the Commissioner of Internal Revenue that they had not the right to file consolidated returns. The case went to the United States Board of Tax Appeals, which upheld the Commissioner's action, that opinion later being confirmed by the Circuit Court of Appeals. Convention of 3,000 Bonus Marchers Meets in Washington—Majority of Veterans Accept Reforestation Jobs After Week's Session in Capital. Almost 3,000 war veterans who held a convention in Washington from May 10-22, and passed various resolutions demanding immediate payment of their adjusted service certificates, ended their series of meetings with widespread acceptance of the Government's offer to enroll them in the reforestation corps. It was estimated that all but 300 or 400 of those attending the convention decided to join the reforestation unit, despite objections of their leaders that the wage of $1 a day offered was too small. Plans were made to furnish free transportation home to those who refused to sign for the forestation work. After the arrival of the bonus marchers in Washington they were promptly registered by Government officials and then sent to Fort Hunt, 12 miles from the city, which had been assigned for their use and where they were furnished free food and lodging during the term of the convention. There was little disorder at any time. In addition to holding regular meetings, delegations of veterans visited various Congressional leaders, and on May 19 a group of five called on President Roosevelt and presented him with their petition for immediate bonus payment. Although the veterans received no satisfaction on this score, the counter offer of reforestation jobs was, as previously mentioned, accorded a fairly enthusiastic welcome. American Jewish Congress Votes to Raise $1,000,000 Fund to Counteract Anti-Semitic Propaganda— Aid of American Government is Asked. A fund of $1,000,000 to protect the rights of Jews in Germany and elsewhere will be raised shortly, according to a resolution voted by 1,500 delegates to the American Jewish Congress meeting in Washington on May 21. The fund will be used primarily for propaganda purposes in the United States and abroad to counteract "poisonous propaganda" which, according to the resolution, is being broadcast throughout the world in a war of extermination of the Jews. After the vote was taken a total of $69,000 was immediately pledged toward the fund. At the closing session of the Congress on May 22 a resolution was adopted calling on the American Government to "exert its good offices to help bring about a cessation of the wanton attacks upon the life, property and honor of the German citizens of the Jewish faith." Tenders of $221,557,000 were received to the offering of $60,000,000 or thereabouts of 91-day Treasury bills dated May 24 to which reference was made in our issue of May 20, page 3459. Bids totaling $60,078,000, were accepted, Secretary of the Treasury William H. Woodin announced on May 22. The bills were sold on a discount basis to the highest bidders at the Federal Reserve Banks and their branches up to 2 p. m., Eastern Standard time, Monday, May 22. They were disposed of on a discount basis of 0.42% according to Secretary Woodin's announcement. Previous offerings brought rates of 0.45% (bills dated May 17); Letter to President Roosevelt, Signed by 35 0.48% (bills dated May 10), and 0.49% (bills dated May 3). Educators and Engineers, Urges U. S. Economists, Recognition The average price of the bills dated May 24 is 99.893. of Soviet Russia. Secretary Woodin's announcement, noted in advices from Recognition of the Soviet Russian Government by the Washington, May 22 to the New York "Herald Tribune" United States and co-operation between the two countries of May 23, follows: advocated were in a letter sent to President Roosevelt on William H. Woodin, Secretary of the Treasury, announced May 22 that May 14 by 35 economists, educators and engineers. the tenders for $60,000,000, or thereabouts, of 91-day Treasury bills, The signers of the letter, all of whom have visited dated May 24, which were opened at the Federal Reserve banks May 22, Russia in amounted to $221,557,000, of which $60,078,000 was accepted. recent years, said that the World Monetary and Economic The accepted bids ranged in price from 99.901, equivalent to a rate of Conference is likely to prove a failure unless Soviet about 0.39% per annum, to 99.890, equivalent to a rate of about 0.44%, participation is assured, and added that greater co-operation on a bank discount basis. Only part of the amount bid for at the latter between price was accepted. The average price of Treasury bills to be issued is the United States and Russia would lead 99.893 and the average rate is about 0.42%• toward world reconstruction. Consolidated Tax Prior to 1929 Illegal—United States Supreme Court Upholds Ruling in Denying Review to Ohio Agency. The Supreme Court of the United States on May 22 in effect approved a decision of the lower court denying to insurance corporations the right to file consolidated returns with other corporations for periods prior to January 1929, even though one corporation may own all of the stock of another. This was made known in a Washington dispatch, May 22, to the New York "Journal of Commerce," which further stated: In taking such action the Supreme Court refused to review a decision of the Sixth Circuit Court of Appeals in the case of the Cincinnati Underwriters' Agency Co. against the Commissioner of Internal Revenue. 1928 Law Is Cited. Appealing to the Court for a review of the decision, counsel for the underwriting company pointed out that the right to file consolidated returns with President Roosevelt in Message to Congress Requests Suspension of Law Requiring Governor of Hawaii to Be a Resident of Island. President Roosevelt, in a message to Congress on May 22, requested the suspension of the law requiring the Governor of Hawaii to be an actual resident of the Islands. The message follows: To the Congress: It is particularly necessary to select for the post of Governor of Hawaii a man of experience and vision who will be regarded by all citizens of the Islands as one who will be absolutely impartial in his decisions on matters as to which there may be a difference of local opinion. IP In making my choice, I should like to be free to pick, either from the Islands themselves or from the entire United States, the best man for this post. I request, therefore, suitable legislation temporarily suspending that part of the law which requires the Governor of Hawaii to be an actual resident of the Islands. FRANKLIN D. ROOSEVELT. Volume 136 Financial Chronicle Care of Needy by American Cities Adding to Credit Troubles of Municipalities—David Wood at Conference of National Association of Mutual Savings Banks Fears Creation of Class Content to Live on Dole. The prodigality of American cities in caring for the needy is rolling up a great burden of debt, thereby adding to the already serious credit troubles of many municipalities. Such was the warning given before the National Association of Mutual Savings Banks at Swampscott, Mass., on May 24 by David Wood of Thomson, Wood & Hoffman, New York attorneys, and a specialist in municipal bondholders' actions. Moreover, he fears that we are creating a class content to live upon the dole. He said in part: There is one item of expense which most'municipalities must now contend with which must be regarded as an abnormal expense. I refer to welfare relief. It is, no doubt, essential that a municipality take care of that percentage of its population, which, through no fault of its own, finds itself without income, but there is an increasing opinion throughout the country that welfare relief has been carried to extremes; that we are producing a class of citizens who would prefer to remain upon the relief rolls rather than to accept employment. I have been told by men in a position to know the facts that work has been offered to persons on welfare rolls and often refused. These people have learned to adapt themselves to the standard of living which the welfare relief affords, and rather enjoy a life which requires but two days' labor per week. As the demand for labor increases we must proceed to overhaul thoroughly the welfare laws so that the attractions of this life, at the expense of the community, will be decidedly lessened. The burden which the welfare work now imposes upon many municipalities cannot be continued indefinitely without completely destroying municipal credit. But the most important element in the situation, to which we must now give serious attention, is the quiet but persistent taxpayers' strike which is going on all over the country. In my judgment, this taxpayers' strike is a result of the campaign waged for the reduction of municipal budgets. Many cases have come to my attention where real estate organizations and similar civic bodies have urged taxpayers not to pay their taxes. A considerable amount of propaganda has been resorted to to accomplish this purpose, a good part of which was misleading, either deliberately so or because of ignorance of the true situation. This propaganda has served to undermine the confidence of taxpayers in their local governments, and shrewd individuals, who are well able to pay their taxes, are taking advantage of the movement by refusing to pay. As a corollary to this tax strike, there has arisen the demand that penalties be repealed and interest charges on delinquent taxes be reduced so as to remove these impediments to an effective taxpayers' strike. The result is reflected in tax collections all over the country. Delinquency has increased to an alarming rate, and our municipalities to-day are faced with serious problems as a result of it. In my judgment, the time has come to put an end to this deflationary propaganda and to embark upon an intensive campaign to stimulate the payment of taxes. We must make the public realize that the taxpayer. who is able to pay his taxes but does not do so, is on a par with the gold hoarder, putting in jeopardy the properties of the taxpayers who do pay their taxes. And bear in mind that approximately 75% or more of taxpayers still pay their taxes regularly. House and Senate Approve Conference Report on Federal Securities Control Bill. Congress this week completed its action on the bill providing for the Federal regulation of securities, both the House and Senate having approved the Conference report on the bill during the week. With its approval by the House without debate on May 22 a dispatch from Washington to the New York "Times" said: Representative Rayburn of Texas, Chairman of the House conferees, said that the bill as reported out of conference was in the main a substitute for the Senate and House bills. In the opinion of the Conferees, it contains the best provisions of the two measures. Among other things, the Conferees provided for the same control of traffic in securities in the District of Columbia as in the States. The Conferees exempted the securities of farm co-operatives and eliminated a House provision exempting stock dividends and the sale of stock to stockholders. The time limit for registration statements to become effective is now twenty days, as against thirty days in the House bill and immediate effect in the Senate bill. The conference compromise permits appeal from the Federal Trade Commission to any Federal Circuit Court of Appeals instead of only to the Court of Appeals of the District of Columbia, as provided in the House bill. The Senate approved the conference report on May 23, at which time the "Times" published the following from Washington: Senate Acts Swiftly. The Senate acted swiftly on the Securities Bill, which requires future registration with the Federal Trade Commission of all except a few exempt security issues. Complete publicity is required concerning the stock issues, and in addition to newspaper advertising supplying the facts, every purchaser will receive a prospectus containing full details. Directors and officers of companies floating stock issues may be held legally liable for false statements in the registration statement, unless they can show they had used reasonable care to assure the accuracy of the statements. The right to institute "stop orders" on registration statements, if the data furnished is found to be misleading, is reserved to the Federal Trade Commission. The registration statement would not become effective until twenty days after filing, thus affording the public an opportunity to scrutinize the proposed issue. The conference report contained the Johnson amendment, setting up a "corporation of foreign security holders" to protect American holders of foreign bends, but the Senate and House agreed that this corporation should be made effective only with the consent of the President. The bill also provides that the corporation shall never assume to speak for the State Department or government, and that it must do nothing to interfere with the nation's foreign policy. 3639 A Washington account May 23 to the New York "Herald Tribune" had the following to say regarding the bill: As passed, the bill contemplates far-reaching governmental supervision over the traffic in securities in inter-state commerce. It is intended for the protection of the public in investing in securities by requiring the essential facts as to the condition of corporations issuing securities to be filed in registration statements with the Federal Trade Commission. While originally the bill applied not alone to new isuses of securities, but also to old issues, it has been changed to apply only to new issues. The Senate passed the bill in more drastic form than the House measure, but, in conference, some of the more stringent provisions were cut out and the more moderate House provisions kept in. This applies especially to the liability of directors and chief financial officers as to false Statements in the registration statements of corporations made to the Trade Commsision. The following from Washington May 22 is from the same paper: The bill provides that before anyone can sell securities in inter-State commerce, or even send prospectuses across state lines, the securities must be registered with the Federal Trade Commission. Securities to be registered must be accompanied by statements telling the financial condition of the issuer in detail, the purpose of the issue, salaries paid to officials, receipts from securities sold in the previous two years, the interest of every officer or director who holds more than 10% of outstanding stock. Sellers of foreign securities would have to supply much the same information, all of which would be available to the public through the Federal Trade Commission. Violators of the law would be subject to maximum punishment of $5,000 fines and five years' imprisonment, or both. In an item published in our issue of May 13 (page 3271) we referred to the fact that the House bill passed that body on May 5, and that the Senate on May 8 passed a similar bill as a substitute for the House bill. Bill to Regulate Oil Production Introduced in Congress —Marland Measure Would Give Semi-Dictatorial Powers to Secretary of Interior—Letter from President Roosevelt First Prompts Inclusion of OilControl Provisions in Industrial Recovery Bill, but This Move Is Not Taken for Fear of Delay to Recovery Legislation. A bill to promote conservation of the nation's petroleum resources and to establish joint State and Federal control of the oil industry was introduced in Congress on May 19, when the measure was presented in the House by Representative Marland of Oklahoma and in the Senate by Senator Capper of Kansas. The bill, which was framed through the cooperation of the Interior Department, representatives of the oil industry and members of Congress, makes detailed provision for production control and gives the Secretary of the Interior virtual dictatorial powers in cases where States fail to actor disagree. It also fixes a tax on petroleum which is produced contrary to production-control agreements, and specifies penalties of fines or imprisonment for direct violation. On May 20 President Roosevelt sent a letter to Vice-President Garner and Speaker Rainey, in which he suggested that It might be advisable to incorporate action "relating to the oil industry with whatever action Congress decides to take In regard to other industries." Following the receipt of the President's communication, Congressional leaders decided to Include the provisions of the oil measure in the National Industrial Recovery bill. On May 22, however, Representative Doughton, Chairman of the House Ways and Means Committee, after a conference with Mr. Roosevelt, announced that the oil-control bill would be handled as a separate measure. This action was taken, It was reported, because of fears that if the oil-control features were incorporated it might seriously delay passage of the National Industrial Recovery bill. The text of President Roosevelt's letter to Speaker Rainey was as follows: As the Congress is doubtless aware, a serious situation confronts the oil. producing industry. Because oil taken from the ground is a natural resource which, once used, cannot be replaced, it is of interest to the nation that its production should be under reasonable control for the best interests of the present and future generations. My administration for many weeks has been in conference with the Governors of the oil-producing States and with component parts of the industry, but it seems difficult, if not impossible, to bring order out of chaos only by State action. In fact, this is recognized by most of the Governors concerned. There is a widespread demand ,for Federal legislation. May I request that this subject be given immediate attention by the appropriate committee or committees? The Secretary of the Interior stands ready to present any information or data desired. May I suggest further that in order to save the time of the special session it might be possible to incorporate action relating to the oil industry with whatever action the Congress decides to take in regard to other industries— in other words, that consideration could be given at the same time that action is taken on the bills already introduced and now pending in committee. In introducing the oil-control bill in the House on May 19, Representative Marland said that the movement to solve the problem of overproduction and wastage of petroleum. and uncontrolled prices, represented an effort by the Government to "atone for a crime" which resulted in "the despoils- 3640 Financial Chronicle • tion of the oil fields of this country through the lack of technical knowledge of some and the greed of other producers." The principal provisions of the measure, as summarized in a Washington dispatch to the New York "Times" May 19, follow: The bill declares Congress's policy to be one of conservation of natural gas and petroleum resources for present and future uses of the nation and its defense; to prevent waste in the production, marketing and use of these resources "due to the existing demoralized market," and to encourage and assist the States to control production and limit it to the reasonable market demands. This emergency act, whose operation would be limited to two years, would make it unlawful to receive for shipment inter-State or foreign commerce natural gas, crude petroleum, or their by-products, when there was knowledge that such products were produced or withdrawn from storage in violation of any law, regulation or order of any board or other authorized State or Federal agency, or when such transactions were in excess of the market demands as determined by the Secretary of the Interior. It is further provided that no persons shall receive for shipment or transportation in inter-State commerce petroleum or natural gas unless the shipper furnishes and the carrier receives in good faith "an affidavit to the effect that no part of the shipment" was produced in violation of any order or regulation of any Federal or State agency. In all instances the shipments must comply with regulations to be fixed by the Secretary of the Interior and must be within the "market demand" regulations promulgated by the Secretary. The Secretary of the Interior is authorized in the bill to investigate all phases of the oil industry, including methods and costs of production, distribution, refining, selling, and these investigations he may make as often as may be deemed necessary. H. L. Hopkins, New Federal Relief Administrator, Estimates 16,000,000 Are Now Receiving Direct Aid—Hopes to Transfer Many to Jobs Under Administration's Re-Employment Program—Grants of $5,336,317 Made to Eight States. An estimate that perhaps 16,000,000 persons in the United States are beneficiaries of relief measures was made by Harry L. Hopkins, the new Federal Emergency Relief Administrator, on the occasion of assuming his duties in Washington on May 22. Mr. Hopkins based his estimate on the fact that in New York State alone about 400,000 families, involving 1,600,000 individuals, are receiving direct relief. He said that the total annual relief outlay, including expenditures under the Wagner relief act, which provides $500,000,000 for the purpose, would approximate $1,000,000,000. Every effort will be made to do away with the principle of a dole in making these expenditures, he added, and continued that "it will not be my business to perpetuate in the United States a policy which will keep any such number of persons on the relief rolls." An effort will be made, he declared, to transfer a substantial portion of those now being paid • relief funds to jobs under the Administration's re-employment program on public works and other projects which the President is considering. Mr. Hopkins' first official act was to make available a total of $5,336,317 to the following States: Colorado,$302,645; Georgia. $40,622; Illinois, $2,600,000;Iowa,$47,207; Michigan, $1,630,540; Mississippi. $164,193; Ohio, $39,245, and Texas, $611,865. Corporations and Wealth—Representative Rayburn's Statement Incident to Federal Securities Bill. Under date of May 5, Associated Press adviees from Washington said: Representative Rayburn, in opening debate on the securities bill in the House to-day, reviewed the history of corporations, which, he said, now number about 300,000. "The combined assets of 200 of the largest corporations in 1930 was estimated at $81,000,000,000," Mr. Rayburn said. "The National wealth in 1928 was estimated as $360,000,000,000. "Thus we have 200 corporations controlling roughly one-fourth of the National wealth, two-fifths of the business wealth and more than fourfifths of the securities wealth represented on the stock markets. "These larger corporations dominate many smaller corporations. We have a condition where about 2,000 directors control about one-half the corporate wealth." While National wealth increased annually at the rate of about 2%, he continued, the assets of the 200 large corporations had increased at the rate of 6%. "It was estimated in 1928 that there were 18,000,000 stockholders In the United States. This shows the great interest of the American p ple In the securities of these many corporations which have been floating / / i in -State commerce for many years without any regulation and without ny means of the people knowing their value." —...-- resident Approves Plan to Supply 274,375 Reforestation Jobs by July 1. A comprehensive program for placing 274,375 men in emergency conservation work camps In National and State forests by July 1 was approved on May 12 by President Roosevelt. An abstract of the plan, as contained in Washington ads-ices to the New York "Times," follows: The plan, submitted to the President by Robert Fechner, director of the work, was accompanied by a report of the War Department on its preparations. After the President approved the project Colonel Duncan Major, the army representative on Director Fecfmer's advisory council, conferred with May 27 1933 General Douglas MacArthur, Chief of Staff, who will immediately issue necessary army orders. Explaining what was to be done, Mr. Fechner said: "War Department officials advise me that this rate of 8,540 men received, processed and equipped per day will be greater than the average rate maintained by both the army and navy of the United States during the World War. "Officials of the War Department, the Labor Department, the Department of the Interior and the Department of Agriculture, now assigned to aid this office, have assured me that the full 275,000 men will be at work in forest camps by July 1." in Administration of Farm Mortgage Act Assured to Henry Morgenthau, Jr., in Conference with Representatives of 33 Life Insurance Companies-23% of .4S8,500,000,000 of Farm Mortgages Held by Insurance Companies Basis of Exchange of Mortgages for Bonds Under Act— Interpretation of Provisions. On May 15, 33 representatives of leading life insurance companies holding farm mortgages throughout the United States, including Presidents of some companies and others designated by the Presidents to represent them, assured Henry Morgenthau Jr., Governor-designate of the Farm Credit Administration, that they wished to co-operate with him to assure successful administration of the Emergency Farm Mortgage Act. The representatives of the insurance companies explained that the extent to which they would wish to exchange farm mortgages for bonds under the provisions of the Act would be governed by the welfare of their policyholders as interpreted by their Finance Committees and Boards of Directors. Several expressed the view, however, that there would be no wholesale offering of insurance company mortgages for bonds, since they believed most of their mortgages to have been written on a conservative basis and that they would eventually pay out. There were undoubtedly individual instances, they said, where an exchange might be desirable. Advices to this effect were contained in an announcement issued May 16 by the Federal Farm Board, from which we also quote the following: Co-operation The insurance company officials met with Mr. Morgenthau at his invitation, extended by telegraph May 12, immediately after the Farm Relief bill, of which the Mortgage Act is a part, was signed by President Roosevelt. The purpose of the conference was to explain the Act to the insurance company representatives, since the life insurance companies hold approximately 23% of the total of eight and a half billions of mortgages on American farms, and to obtain their views. IV. I. Myers, Assistant to the Chairman of the Federal Farm Board, who had a part in the drafting of the new Martgage Act, and Paul Bestor, Farm Loan Commissioner, explained the basis on which these exchanges might be made or the 4% bonds of the land banks, authorized up to $2,000,000,000 by the Act. The amount of bonds which could be exchanged for any mortgage, it was explained, is limited to 50% of the appraised value of the land plus 20% of the value of insured improvements. Much interest was expressed by the insurance company officials as to the interpretation of the phrase "normal value" of the land, as contained in Section 22 of the Act. It was explained by Mr. Bestor that this value would be detemrined in each ease by the Land Bank Appraiser, but that it would not be either a distress sale value nor yet the high value at which some lands changed hands shortly after the war, but would instead be based on the productive value of the land over a period of years. Both Mr. Bestor and Mr. Myers stressed the point that in any case where a mortgage holder accepts a scaled-down price—an amount in bonds less than the face of a mortgage taken in exchange—he would not be permitted to take a second mortgage for any part of the difference. The purpose of the Act, it was explained, is that the farmer-borrower shall get the benefit of any reduction in principal that may be made by this process. Mr. Bestor explained that application for the exchange of mortgages for bonds might be made either by the mortgage holder or the borrower, but that the agreement of both to the transaction would be necessary. For the borrowers whose mortgages are taken over by the Land Banks through National Farm Loan Associations the Act guarantees for five years an interest rate not to exceed 4%%, and for direct borrowers from the Land Banks not to exceed 5%, but subscription to Farm Loan Association stock or Land Bank stock is required in both instances. Mr. Bestor announced that applications for direct loans from the Farm Loan Commissioner, limited to $5,000 and to 75% of the value of the property pledged, prior liens being included, are already being received to-day in all of the 12 Land Bank districts. An indication that farmers are anxious to take advantage of the provisions of the law granting lower interest rates and more liberal terms of payment was given in the announcement by Mr. Myers that already an application had been received from 15 Iowa citizens who wish to form a new National Farm Loan Association through which to obtain loans from the Federal Land Bank of Omaha. Those attending the conference Included: A. L. Aikin, Vice-President, and George S. Murray, Assistant Superintendent, Farm Loan Department, New York Life Insurance Co., New York. Glenn McHugh, Assistant to President, Equitable Life Assurance Society of the United States, New York. J. IV. Kinsinger, Vice-President and Counsel, Midwest Lifo Insurance Co., Lincoln, Neb. S. A. Apple, President Royal Union Life Insurance Co., Dee Moines, Iowa. George S. Beaumont, Assistant Treasurer, Continental Assurance Co., Chicago, Elbert S. Brigham, Chairman Finance Committee, National Life Insurance Co., Montpelier, Vt. Henry S. Nollen, President Equitable I.ife Insurance Co. of Iowa, Des Moines, Iowa. Volume 136 James Lee Loomis, President Connecticut Mutual Life Insurance Co., Hartford, Conn. Arthur M. Collens, Vice-President, Phoenix Mutual Life Insurance Co., Hartford, Conn. G. W. Baker, Assistant Treasurer, Travelers' Insurance Co., Hartford, Conn. Glenn E. Rogers, Manager, Farm Loan Division, Metropolitan Life Insurance CO., New York. M. J. Cleary, President Northwestern Mutual Life Insurance Co., Milwaukee, Wisc. Alfred MacArthur, President Central Life Insurance Co. of Illinois, Chicago, Ill. E. W. Randall, Chairman of the Board, Minnesota Mutual Life Insurance Co., St. Paul, Minn. Isaac Miller Hamilton, President Federal Life Insurance Co., Chicago, Ill. B. Frank Bushman, President, and J. H. Sandell, Treasurer, Federal Reserve Life Insurance Co., Kansas City, Kan. Dante M. Pierce, Director Central Life Insurance Co., Des Moines, Iowa. Theo. M. Beal, Assistant Treasurer, Mutual Benefit Dife Insurance Co., Newark, N. J. H. G. Hornfeck, Vice-President, Mutual Benefit Life Insurance Co., Newark, N. J. J. H. Aubin, Assistant Treasurer, Farm Marketing Manager, John Hancock Mutual Life Insurance Co., Boston, Mass. G. S. Nolien, President, and G. W. Fowler, Vice-President and Treasurer, Bankers' Life Insurance Co., Des Moines, Iowa. S. F. Westbrook, Vice-President Aetna Life Insurance Co., Hartford, Conn. R. R. Rogers, Assistant Secretary Prudential Insurance Co. of America, Newark, N. J. Franklin B. Mead, ex-Vice-President Loncoln National Life Insurance Co., Ft. Wayne, Ind. Sidney W. Souers, Financial Vice-President Misf30111i State Life Insurance Co., St. Louis, Mo. Wm. H. Kingsey, Vice-President Penn Mutual Life Insurance Co., Philadelphia, Pa. Andrew T. Davis, Vice-President Provident Mutual Life Insurance Co. of Pennsylvania, Philadelphia, Pa. D. T. Torrens, Vice-President Kansas City Life Insurance Co., Kansas City, Mo. Robert W. Huntington, President Connecticut General Life Insurance Co., Hartford, Conn. W. Howard Cox, President Union Central Life Insurance Co., Cincinnati, Ohio. The signing of the Farm Relief Currency Inflation bill was noted in our issue of May 13, page 3269, and the full text of the Act was published in these columns, pages 3415-3420. Questions Arising in Connection with the Farm]Relief Act. From well-informed quarters at Washington we have obtained answers to the following queries that are likely to arise in connection with the operation of the Federal Farm Relief Act. While they are not official, they are, we believe, entirely reliable: QUESTIONS AND ANSWERS. General. Q. To-day we have want in the midst of plenty. What answer does the Farm Act make to that? A. When the farmer has not the income to buy from the city, the city worker loses his job and cannot buy farm products. By creating conditions which will help to restore the ability of the farmer to buy from the city, one step will have been taken toward doing away with want in the cities. Q. But isn't the trouble underconsurnption rather than overproduction? A. It is both. Domestic consumption of food, however, hasn't declined as much as you might think. Even if domestic consumption were back to normal, farmers would still be producing surpluses af most staple commodities, in addition to the heavy excess stocks already on hand. Q. How do you reconcile this reduction of production with the fact that for years the U. S. D. A. has been urging farmers to produce more, and showing them how to do it? A. We have urged farmers to produce more to the acre, and have urged them as individuals to reduce their acres. The present bill faces the fact that the individual farmer cannot adjust his production intelligently unless he knows that his neighbors will do likewise. Hence the collective action proposed by the Farm Act. Q. How will this plan help the farmers? A. It is designed to give them greater income. Q. How many farmers will be helped by the plan? A. When action on wheat, cotton and hogs becomes effective, perhaps 2/3 to % of all farmers will profit from greater returns. Others may be benefited by trade agreements. And the prices of all farm products should react to a rise in the prices of basic products. Q. How much do you intend to cut down production of wheat, pork and cotton this year? A. We can't tell until after public conferences and hearings are held. Calling these conferences will be the first step in operation under the law. Q. When will you issue the first order to farmers to cut down their acreage? A. We won't order farmers to cut down acreage. If we decide on that action on any crop, we will offer those farmers who do cut acreage a chance to share cash benefits. Q. When will the farmers get their money? A. It may be worked out so that they will get part of it before harvest time—as soon as the reduction in acreage has been proven. Q. Where will you get the money to pay farmers to cut down their production? A. From taxes on the first processing of the commodities involved. Effect on City Man. Q. How much will the living costs of the average city family be increased by this plan? A. A specific answer cannot be made until commodity hearings are held. The adjustment benefit should raise the cost of living only slightly—not enough to offset the increased city incomes which may go along with it. At most, it will add no more than a cent to the price of a loaf of bread, ana no more than a nickel to the price of a cotton shirt. 3641 Financial Chronicle Q. What good will it do the city man to increase the buying power of a section of the population that in the best of times buys only one-fourth of the industrial products of the country? A. Nearly half of the population lives in rural communities or on farms. Furthermore, a given increase of purchasing power in farmers' hands is more effective than in the hands of others, since farmers will spend largely for equipment and machinery that leads to expanding circles of employment. A rise in farm income and in farm prices leads also to a strengthening of the entire credit and financial structure—the necessary bases for industrial revival. Q. Will this measure give the farmer a bigger share of the money that is spent to feed the unemployed? A. Products sold for distribution to unemployed are exempt from the processing tax. Processing Tax. Q. Why do you call it a "processing" tax? A. Because it is based on the bushels of wheat processed (manufactured) into flour, or bales of cotton spun (i.e., processed) into yarn or thread. Q. What does "first processing" mean in connection with milk, peanuts, corn, oats, wheat, tobacco, pork? A. That means milling wheat, slaughtering hogs, or spinning cotton. Oats and peanuts are not in the Act. For milk and tobacco, it has to be determined separately for each product—butter, for example, would be when churned. Q. How will you decide how much tax to levy on each commodity? A. First, in public hearings or conferences find how much of a crop we want to grow; second, determine how much must be paid to achieve the necessary reduction; and adjust the taxes accordingly. Q. Who will be your principal advisers in fixing taxes? A. Responsible representatives af the groups engaged in the production, processing, and distribution of each product. Q. Does a farmer have to pay the processing tax on garden stuff he raises for his own table? On the hog he butchers for his own family? A. No. Distribution Costs. Q. Won't the packers and millers and bakers and storekeepers tack on the amount of the processing tax every time it passes through another pair of hands, and won't the tax be doubled and tripled before the consumer has to pay it?? A. The Secretary of Agriculture can use the licensing feature of the Act to prevent profiteering. The consumer must not be gouged. Q. If competition among food dealers on a buyers' market hasn't kept down distributing costs, how will Government "partnership" in trade agreements cut those costs? A. By eliminating wasteful and costly competition. Administrative Details. Q. Will the farmer be expected to keep the acreage he retires from cultivation bare? A. That remains to be determined, for each crop and in each area. If crops are removed this will be done as early in the growing season as possible, and the basic crop will, so far as possible, be replaced by a noncompeting cover crop, such as grass. So to replace part of a sowing which promises to prove unprofitable has long been recognized as sound farming practice. Q. How many men will you hire to enforce the acreage cuts? A. Just as few as possible. No great force should be needed. Most of the local administration will be through committees of representative farmers. Q. Who will actually sign the agreements with farmers? A. The properly accredited local committees or representative, acting for the Secretary of Agriculture. Q. Is there anything to prevent a farmer from leasing his whole farm to the U. S. D. A. and getting paid for doing nothing? A. Probably only a given per centage of the land in any crop on each farm will be leased, during this year at least. Q. Must a farmer let his land go absolutely idle, or can he grow garden stuff on it for his own family? A. He probably will be required to handle the land so as to prevent erosion and maintain soil fertility, but not for production of cash crops. Q. Will the extension agents enforce the Act out in their counties? A. They may act as secretaries of the local committees or organizations of farmers, but the local committees will do the enforcing. Exports. Q. How is this going to help our export business if we can't sell stuff in the world market without this processing tax tagged on? A. The tax is refunded when processed goods are exported. Choice of Commodities. Q. If this bill is good for some agricultural products why doesn't it apply to all of them? Doesn't it discriminate against the fruit growers and the poultry farmers and the rest whose products are not in the bill? A. You must make a beginning somewhere. The products included in the bill are those suffering most from foreign competition and international trade restrictions. Agents Selected to Aid in Making Loans to Farmers under Emergency Farm Mortgage Act—Will Assist Paul Bestor, Farm Loan Commissioner—Inquiries Concerning and Requests for Loans under Act Made by More than 4,000 Farmers. Paul Bestor. Farm Loan Commissioner, met in Washington, D. C., on May 11, with newly selected agents who will assist him in making direct loans to farmers under provisions of Part 3 of the Emergency Farm Mortgage Act passed by Congress May 10, we learn from an announcement issued on May 11 by Henry Morgenthau Jr., Chairman of the Federal Farm Board and designated to be Governor of the Farm Credit Administration. (The Act was signed by President Roosevelt on May 12, as noted in our issue of May 13, page 3269.) The agents who have been selected and who attended the meeting, with the exception of A. P. Graves, of IIouston, Tex., who was represented by A. A. Spacek of San Benito, Tex., Deputy Agent, according to Mr. Morgan- 3642 Financial Chronicle thau's announcement are: (The names of the States served by the different regional offices are also indicated.) Charles Windholz, of Syracuse, N. Y., with headquarters at Springfield, Mass. (Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont.) George Stevenson, of Be! Alton, Md., with headquarters at Baltimore, Md. (Delaware, District of Columbia, Maryland, Pennsylvania, Virginia, West Virginia and Puerto Rico.) Henry S. Johnson, of Columbia, S. C., with headquarters at Columbia, South Carolina. (Florida, George, North Carolina and South Carolina.) William L. Pryor, of Laurel, Miss., with headquarters at New Orleans, La. (Alabama, Louisiana and Mississippi.) Ernest J. Rodman, of Little Rock, Ark., with headquarters at St. Louis, Mo. (Arkansas, Illinois and Missouri.) Graves Shull, of Hugo, Okla., with headquarters at Wichita, Kan. (Colorado, Kansas, New Mexico and Oklahoma.) A. P. Graves, of San Antonio, Tex., with headquarters at Houston, Tex. (Texas.) William H. Woolf, of Phoenix, Ariz. with headquarters at Berkeley, Calif. (Arizona, California, Nevada and Utah.) J. A. Scollard, of Chehalis, Wash., with headquarters at Spokane, Wash. (Idaho, Montana, Oregon and Washington.) Mr. Morgenthau's announcement 'also said: C. W. Carson, of Amarillo, Tex., has been chosen as Assistant to the Farm Loan Commissioner and will have charge of the direct loan provisions of the Mortgage Act. He was among those who attended the meeting where Mr. Bestor and his assistants were at work on the details of the plan for administering this portion of the new measure, in which Congress authorizes and directs the Reconstruction Finance Corporation to allocate and make available to the Farm Loan Commissioner $200,000,000. This Money will be lent to farmers through 12 offices located in the Federal Land Bank regions In various parts of the United States. The security required will be first or second mortgages upon real and personal property. The Act provides that individual farmers may borrow as much as $5,000 at an interest rate not to exceed 5% annually. Under the law, the amount of the mortgage to the Farm Loan Commissioner, together with all prior mortgages or other prior evidences of indebtedness secured by such farm property, may not exceed 75% of the appraised value thereof. Corporations are not eligible for these loans. Borrowers may use the money for the following purposes: To repay indebtedness, secured or unsecured, of the farmer; to provide working capital for farm operations, and to provide funds to enable any farmer to redeem and/or purchase farm property owned by him prior to foreclosure which has been foreclosed at any time subsequent to July 1 1931. Application for a loan should be made to the agent of the Farm Loan Commissioner in the district in which the property offered as security is located. Later announcements issued by Mr. Morgenthau said that Jerry P. Riordan, of Madison, Wis., has been appointed agent for the Seventh Land Bank District, with headquarters in the Federal Land Bank of St. Paul, Minn.; Bert Waddell, of Moorcraft, Wyo., appointed agent for the Eighth Land Bank District, with headquarters in the Federal Land Bank of Omaha, Neb., and Robert L. Immell, of Chillicothe, Ohio, appointed as agent of the Fourth Federal Land Bank District, with office at Louisville, Ky. Mr. Immell, who was appointed on May 19, completed the list of agents to be appointed. Under date of May 21, Mr. Morgenthau announced that during the week following the passage of the Emergency Farm Mortgage Act of 1933 the Farm Loan Commissioner's agents stationed in the twelve (12) Federal Land Banks have received inquiries concerning, and requests for, loans from more than 4,000 farmers. He continued: The Federal Land Bank District of St. Louis, comprising Arkansas, Illinois and Missouri, continues to be far in the lead with a total of 1,348 inquiries and applications during the first week, followed by the New Orleans district, covering Louisiana, Mississippi and Alabama, with 666; the Spokane district, covering Washington, Oregon, Idaho and Montana, with 586; the St. Paul district, covering North Dakota, Minnesota, Wisconsin and Michigan, with 471, and the Omaha district, serving Nebraska, South Dakota, Iowa and Wyoming, with 304. The Farm Loan Commissioner's agent, Ernest J. Rodman, located in the St. Louis bank, also leads with the number of loans actually closed during the week. He reported to the Farm Loan Commissioner, Paul Beater, the closing of 20 loans for a total of $71,000. Henry S. Johnson, agent of the Farm Loan Commissioner in Columbia, reported closing one loan for $2,000, and 28 applications pending at the close of the week for an aggregate of $6,935. The agent at St. Louis reports receiving letters at the rate of more than a thousand daily. The financial position of the borrowers to -whom loans were made during the first week show a great variation. Some represent first mortgages on farms, the refinancing of which gave the farmer a lower rate of interest and a longer period in which to repay-13 years. Others represented loans to farmers who were so heavily involved it was necessary for their creditors to scale down their claims to make it possible to refinance the farmers with Commissioner's loans. National Farm Strike in West Called for May 13 Postponed Following Signing of Farm Relief Bill and Appeal of President Roosevelt to Refrain from Farm Foreclosures—Strike Had Been Called by Milo Reno, President of Farmers' Holiday Association—Iowa Resolutions, The National farm strike set for Saturday May 13 by Milo Reno, President of the Farmers' Holiday Association, was suspended indefinitely at a conference of officials of the Association, held at St. Paul May 12. As to the action staying the strike the Associated Press advices May 12 from St. Paul said: May 27 1933 After a long conference with seven leaders of the National association, Milo Reno, of Des Moines, President, issued a statement, saying: "The National officers and representatives of the Holiday Association in the Northwest are suspending the strike order until the request by the President is more fully understood and the effect of his farm-relief program Is known." The postponement came on the heels of a statement by President Roosevelt urging leniency in foreclosures and a request from Governor Floyd Olson of Minnesota for a postponement pending the development of the Government's farm-relief plans. Reno's statement referred to President Roosevelt's statement in Washington to-day. "Telegrams," Reno's statement said, "will be sent out immediately to all State Presidents, explaining our reasons for this suspension. The President's statement, which, in effect, Is a command, under the powers granted him, should be respected. We have in no way receded from our fundamental demand for production costs." Reno said he would call a meeting of National holiday directors soon in Des Moines to determine whether they shall call a strike later or abandon the plan. Earlier in the afternoon Reno had said he had no authority to call off the strike, inasmuch as the Holiday Association in Des Moines had voted to "go ahead." Governor Olson dictated the request to Reno from his bed in a Minneapolis hospital where an appendectomy was performed earlier to-day. He suggested a statement that the Farmers' Holiday Association is "standing by the President of the United States and will not hinder him in any degree in his endeavor to alleviate the dire condition of the American farmer." "The success or failure of the plans of the National Administration will be known within a few months." Governor Olson said, "If and when it becomes apparent that the President's theories are unworkable, or that in the administration thereof, Government officers do not act within the spirit of the law, then, in that event, the Farmers' Holiday Association might declare a nation-wide strike." The strike, at best, may cause a slight and temporary increase in prices paid for certain commodities by the middleman to the farmer, but its "lack of executive organization throughout a larger area dooms it to failure," Governor Olson said. In a dispatch to the New York "Times" May 12 President Reno was quoted as saying: The President's statement should be respected by all Governors and all Courts. It is a patriotic duty of the Farmers' Holiday Association to see that it is respected. We have, in deciding to extend the time of declaring our holiday, in no way receded from our fundamental demand for production costs. This action is taken out of respect for the President and a regard for the opinion of the general public. We believe in giving the Federal Administration an opportunity to redeem pre-election promises to farmers. President Reno was also reported in the same account as stating that the farm bill was unsatisfactory in that it did not assure farmers the cost of production. Associated Press advices from St. Paul May 12 stated: Milo Reno said to-day that before he left Des Moines last night he had sent the following message to President Roosevelt: "According to press reports you are willing to do all in your power to avert farmers' strike and resultant confusion. Will you declare moratorium on farm foreclosures and executions until fair production costs are conceded farmers? Answer." President Roosevelt's statement, urging farm mortgage creditors to refrain from foreclosure proceedings until the provisions of the new farm relief measure can be made effective, was issued at the time he signed the bill on May 12, and was given in our issue of May 13, page 3271. While the farm strike was deferred, milk strikes in Wisconsin and Northern Illinois were in progress, said the Associated Press May 13. On May 9, President Reno of the Farmers' Holiday Association called upon agricultural leaders in 24 States to join in the National farm strike which his organization had scheduled for May 13. United Press advices May 9 from Des Moines, Iowa, to the New York "Herald Tribune" in which this was indicated, went on to say: Any possibility that the strike might be postponed was ended, the militant farm leader said, when Congress to-day struck from the farm relief bill a provision guaranteeing cost of production plus a reasonable profit for farm produce. That provision had been the keynote of the demands which led to calling of the farm strike. "That amendment," Reno declared, "was perhaps the one measure which might have prevented us from striking. Now the farmers must either lie down and accept peasantry, or battle to a finish." In a message to State Holiday Association Presidents, who will inaugurate In the gut, South and Middle NVest on Saturday a strike during which the farmers enlisted will neither sell their produce nor buy manufactured goods, Reno to-day ordered: Appeal in every possible way—appeal through loyalty to country, loyalty to fellow farmers and families. Leave nothing undone in solving the problem and avoid revolution. Into Reno's office in the Farmers' Union headquarters came communications from over the Mid-West that his followers would not need this stimulus. A powerful movement which for a week has been afoot to break the strike, if the price-fixing amendment was adopted by Congress, appeared definitely killed. In Associated Press advices from Montevideo May 10 it was stated that 90% of the farmers in Oklahoma would join the farm holiday in which all farm products would be withheld from market,It was predicted by R. L. Rickerd of Oklahoma City, President of the Oklahoma Farmers' Holiday Association. From the Des Moines "Register" of May 5 we take the following: The Farmers' Holiday Association in convention here Thursday (May 51 voted unanimously in favor of a nation-wide marketing holiday on all farm products beginning May 13. Volume 136 Financial Chronicle to The Convention also voted to resubmit previous legislative demands Townley's the United States Congress, and went on record in favor of A. 0. manuand products proposal to issue scrip to facilitate exchange of farm factured goods between farmers and laborers. National Action Required. While the strike resolution was voted unanimously and a subsequent motion which would have modified the order was defeated, it will require action of the National Board of the Farmers Holiday Association to put the national farm strike into effect. Several of the members of the Board were said to be of the opinion that decision in Washington, D. C., of the Congressional Conference Committee to keep the cost of production guarantee in the farm bill would change the strike situation somewhat and might obviate its necessity. From the same paper we take the following: Farm Holiday Resolutions. The resolution for a national farm holiday adopted by the National Farmers' Holiday Association, Thursday [May 5], follows: "Be it resolved, That this Committee recommends unanimously that the National Farmers' Holiday Association proceed to declare its marketing holiday on all farm products May 13 1933, and that its original legislative demands be again presented to Congress, and further, "That this Committee recommends the adoption of the strike resolution as presented by A. C. Townley, and that a Committee of 15 or more be elected by this meeting to present the plan of the Townley resolution to all other . industrial groups." . Some of the features of the Townley plan are shown by the following excerpts from his resolution, previously submitted to the Convention: "Be it resolved, That we delegates and representatives of millions of farmers, producers of food, assembled in this national convention of the Farmers' Holiday Association at Des Moines, do hereby this day call upon all the producers of wealth who labor in the.mines, mills, factories, shops, stores and offices, on the trucks and railroads—all workers in all industry, whether employed or unemployed, through their regular officials and delegates elected to join with us in national convention and there set up a People's National Council of Defense of 100 men or more with full authority to execute a program that will enable the farmers to exchange food products of the farm for fuel, clothing and all the manufactures and services that industrial workers can produce in exchange for the food products we can and will provide. "We call upon the industrial workers to join with us in this exchange of goods and services on the basis of cost of production." . . . "To the end that we may immediately put into operation this program of fair and just distribution of food and clothing and all products of labor, we declare that beginning May 13 1933, and for all time thereafter, we will refuse to deliver the food products of the farm into the hands of the gamblers." . . . "To facilitate free and unrestrained exchange of services and goods among the producers, the representatives of all groups, through the National Council, must provide a temporary medium of exchange—due bills, credit tokens, service warrants, scrip—something that can be used for money, such instruments would not be good for taxes, interest, payments of mortgage indebtedness and would not be redeemable in gold or silver. "But because this scrip would be redeemable in food, clothing and all services and products of all producing groups, it would serve in the place of money. We call upon all producing groups to join with us through the National Council to provide such medium of exchange in whatever form seems best, and we pledge ourselves under fair and equitable rules to accept this scrip for all food products of the farms on the basis of cost of production with the agreement that all industrial groups joining and dealing with us will likewise accept this scrip ior their services and products on the basis of cost to produce as determined by the People's National Defense Coilscll." Minnesota Farmers' Holiday Association Request President Roosevelt to Remove Secretary of Agriculture Wallace-4,000 Members Declare Against Payment of Debts Until Dollar Is "Honest"—Act to Join National Farm Strike. A resolution requesting President Roosevelt to remove Henry A. Wallace as Secretary of Agriculture, was adopted on May 9 at Montevideo (Minn.) by the Minnesota Farmers' Holiday Association. The resolution as adopted read: "Whereas, Secretary of Agriculture Wallace had not favored the cost of production bill for agricultural products: be it "Resolved, That the Minnesota Farmers' Holiday Association asks the President of the United States to have Secretary Wallace removed from office." The 4,000 delegates at the same time voted a resolution (we quote from a dispatch to the New York "Times") stating that the members would not pay debts or interest until "the dollar is an honest measure of value" and demanding that the government take over all banking and declare a national moratorium of mortgage foreclosures on farms and city homes. The developments in the mid-West Agricultural situation were cited as follows in an Associated Press dispatch May 9 from Montevideo to the New York "Herald Tribune": Distribution of circulars urging civil disobedience among farmers, based on the campaign led by Mahatma Gandhi in India, was revealed in Minneapolis. Governor Floyd B. Olson of Minnesota, in Washington, asked President Roosevelt to request cessation of farm mortgage foreclosures until the farm bill was in operation. Ile said he believed this would "temper" mid-West feeling and expressed the opinion Mr. Roosevelt would make such a request soon. Governor A. G. Schmedeman of Wisconsin announced he would confer with District Attorneys and Sheriffs Thursday to plan for keeping highways open during the farm strike. At Omaha, Neb., W. W. Waters, commander of last summer's bonus expeditionary march on Washington, offered to back up with evidence his statement that the farm strike scheduled to start Saturday was "being fomented, urged and fanned into action by Communists." Ile declared agents of Communist organizations were active throughout the "farming district." 3643 Militant Protest Voted. militant The Holiday Association here voted to "advocate and promote a protest against mortgage foreclosures" until relief is granted by legislation. It is said in another resolution that members did not desire to "seek redress of our wrongs and grievances through force except as a last resort." mechanism The organization urged that the entire banking and credit should be operated by the Federal government "for the benefit and protection of all the people." In other resolutions the organization favored establishment of a third party nationally, and demanded lower interest rates on mortgages, an end to Issuance of tax-exempt securities, heavy Federal Income, gift and inheritance taxes, payment of adjusted compensation to veterans in Treasury certificates or notes, discontinuance of compulsory military training in schools and imposition of an acreage possession tax on corporations or individuals owning exceptionally large amounts of land. Farmers were urged to adopt passive resistance as a weapon in obtaining relief in the circulars. unsigned and lacking any indication of authorship. Several were found in Minneapolis to-day. "India brought mighty England to her knees by civil disobedience." they said. "We can do the same here. Don't pay a cent on a debt, don't pay a cent to a banker. Don't pay a cent to a storekeeper until we get our grain and cream and cattle, hogs and eggs at a price that is right." The circulars said no formal organization was planned but that all sympathetic should consider themselves members of the Farmers' Civil Disobedience League. On May 8 Associated Press advices from Montevideo stated: nothing," Adopting as their slogan "stay at home, buy nothing, sell 4,000 delegates attending the Minnesota Farm Holiday Association con[May Saturday. vention here to-night voted to call a farm strike effective 13]. On May 10 the delegates were reported as joining Milo Reno, National Farm Holiday Association President, in attacking the rejection by the National House of Representatives of the cost production amendment to the farm relief inflation bill, Mr. Reno at Des Moines (according to Associated Press advices) stated the elimination places the bill in the "same category with other farm legislation." Chester C. Davis Selected as Production Administrator of Agricultural Adjustment Administration. Chester C. Davis, for many years active in various agricultural organizations in the Middle West and Northwest and formerly Commissioner of Agriculture in Montana, has been selected as Production Administrator of the new Agricultural Adjustment Administration. The appointment was announced May 20 by Secretary of Agriculture Wallace and * George Peek, Chief Administrator of the Agricultural Adjustment Act. The announcement added: Mr. Davis is a native of Iowa and has been well acquainted with Secretary Wallace for many years. He has been associated with Mr. Peek recently In a company concerned with the industrial use of cornstalks and other farm wastes and the development of methods originated at Iowa State College. He was also associated with Mr. Peek from 1925 to 1928 when both were working for the passage of the hIcNary-Haugen Bill. In 1928 he was Vice-Chairman and Secretary of the Smith Independent Organization Committee. In 1921 Mr. Davis was appointed to organize the Montana State Department of Agriculture and was Commissioner of Agriculture until 1925. He left his work with the State Department of Agriculture to become director of grain marketing of the Illinois Agricultural Association at Chicago and then became actively interested in farm legislative work. In addition to his associations with Mr. Peek he worked with Walton Peteet, Secretary of the National Council of the Co-operative Marketing Association. In their legislative activities they represented a number of large farm commodity groups. M. L. Wilson of Bozeman, Montana, Named Wheat Administrator of Agricultural Adjustment Administration. M. L. Wilson of Bozeman, Montana, has been selected by Secretary Wallace and Administrator George Peek as Wheat Production Administrator of the Agricultural Adjustment Administration, it is announced by the U. S. Department of Agriculture. He began life on a farm and has been close to the land and farm problems ever since. He goes to Washington from Montana State College of Agriculture where he has been head of the Department of Agricultural Economics. In its announcement, issued May 21, the Department adds in part: Mr. Wilson became county agent leader for Montana, did work in dry farming investigations, and then became head of the division of farm management and costs in the Department of Agriculture at Washington. After two years in this work, he went back to Montana, in 1926, as head of the Department of Agricultural Economics at Montana State College where, except for brief intervals, he has been working ever since. As an economist Mr. Wilson has been for many years in close sympathy with Secretary Wallace and credits his assistance in the development of many of his own ideas for the economic betterment of the farmer. He has been active in the formulation of farm relief plans since the time of the first.McNary-Haugen bill in 1924. Appointment of C. A. Cobb of Atlanta, Ga., as Cotton Production Administrator of Agricultural Adjustment Administration. Secretary Wallace and Administrator George Peek announced on May 22 that Cully A. Cobb of Atlanta, Ga., has been selected Cotton Production Administrator of the Agricultural Adjustment Administration. According to the announcement Mr. Cobb has 25 years of service to agri-. 3644 Financial Chronicle culture in the South to his credit. The announcement continued in part: For five successive years he was elected and re-elected President of the American Agricultural Editors' Association. He has been a member of the National Boys and Girls Club Committee since 1923 and is a member of the Country Life Association. He was selected as Chairman of the National Advisory and Legislative Committee on Land Use. The membership of this committee is made up of 26 men nationally known in American farm leadership. At the meeting of the U. S. Chamber of Commerce in Washington the first week in May Mr. Cobb led the round table discussion on land utilization. Guy C. Shepard Appointed Administrator Under Agricultural Adjustment Administration in Charge of Trade Agreements With Regard to Packing House Products. Guy C. Shepard of Evanston, Ill., for 40 years engaged in the meat packing industry, has been appointed Administrator in charge of trade agreements in the field of processing and distribution of packing house products under the new Agricultural Adjustment Administration. The appointment was announced May 22 by Secretary of Agriculture Wallace and George Peek, Chief Administrator of the Agricultural Adjustment Act. The announcement continued: Until his retirement from business two years ago, Mr. Shepard served continuously in various capacities with the Cudahy Packing Co. At the time of his retirement, he was director and Vice-President in charge of hog and pork operations. During the World War, he served on several emergency committees concerned with the production and distribution of foodstuffs for the armed forces of the Allies, including the United States. He spent some time in Europe after the War adjusting private claims on food purchases during the years of conflict. Jesse H. Jones of Reconstruction Finance Corporation Finds Decided Evidence of Advance Toward Business Recovery—Bank Reopenings of More Than 125 a Week Reported—Purchases of Preferred Stock in Banking Restoration Total More Than $52,000,000—Repayments to Agricultural Credit Corporations Exceed $100,000 a Day. Stating that "the advance toward national recovery, of which there has been decided evidence now for a period of two months, is supported by information reaching the Reconstruction Finance Corporation," Jesse H. Jones, Chairman of tp the Corporation, in a statement issued May 21, went on to say: Two essential elements, on which this statement is based, are the decrease in the number of applications which the Corporation is receiving for loans to banks and the rate of liquidation on the loans outstanding. Reports to Washington from the loan agencies throughout the country substantiate both of these conclusions, a clear indication that the period of extreme gravity is behind us. Up to the present time the Corporation has been repaid approximately $500,000,000 of the money which it put into the financial and credit stream of the nation prior to the bank holiday. Repayments to the Regional Agricultural Credit Corporation, which has loaned $130,000,000, are being made at the rate of more than $100,000 a day and now total $7,500,000. These repayments seem a clear indication that the flow of money is being restored. The most important duty before the Corporation to-day is the restoration of sound banking in those communities where such facilities are either lack'Ing or greatly curtailed. Figures now available for the month of April show that through their own efforts and the assistance of Federal agencies, Including the Reconstruction Finance Corporation, banks were being reopened at the rate of mom than 125 a week. There has been an improvement in that rate during May. The extent to which the Reconstruction Finance Corporation has definitely shared in banking restoration may be judged by the fact that actual and conditional purchases of preferred Bieck made by it so far total more than $52,000,000. The Government to that extent has become a partner with various local interests throughout the United States in the resumption of credit facilities. It stands ready to expand that partnership wherever possible and necessary. It has been the aim of the Corporation in each instance of preferred stock purchase to participate only in plans which would result in the creation of sound financial institutions. The President has shown us that there is a way out. What we now need Is to follow his leadership with confidence and courage. Requests for Loans from Reconstruction Finance Corporation to Aid in Self-Liquidating Projects Totaled 561 Up to May 15. Up to May 15 the Reconstruction Finance Corporation had received 561 applications for loans to aid in self-liquidating projects, of which 95 were informal or incomplete, the Corporation announced on May 19. Of the remaining 466 applications, 33 were withdrawn and 20 suspended, leaving a new total of 413. The Corporation's announcement continued: One hundred and six applications are on hand, totaling $118,891,106, on which necessary information is being assembled. When the legal, financial and engineering examiners are supplied data required for the final report, these applications will be laid before the Engineers Advisory Board for its consideration and recommendation to the Board of Directors. The applications on hand include 40 for water and sewer systems, eight each for public buildings and housing, seven each for bridges, sewers and power plants, five for irrigation projects, four for public markets, three each for reforestation, flood control and drainage, swimming pools and athletic fields and stadiums, two each for docks, parks and hospitals, and one each for a gas plant and a municipal slaughter house. The Engineers Advisory Board has made recommendations on 304 applications, with three pending, and the Board of Directors has taken final action on 264. May 27 1933 Resignation of Ford Hovey, Chief of Agricultural Division of Reconstruction Finance Corporation. The resignation of Ford Hovey, Omaha, Neb., Chief of the Agriculture Credit Division of the Reconstruction Finance Corporation, was announced May 20 by the Board of Directors. Commendation for the service which Mr. Hovey has rendered from the creation of the Regional Agricultural Credit Corporation, Sept. 1 1932, until the present time, was voiced at a meeting of the Board, on May 20. Judge Wilson McCarthy, Director of the R. F. C., said that the work of the Agriculture Credit Division, under Mr. Hovey, had preserved and kept intact the livestock industry, which he felt confident was going to come back and pay its obligations. Jesse H. Jonese, Chairman of the R. F. C., and Mr. Hovey's associates in the Regional Agricultural Credit Corporation joined In the tributes. House Passes Bill Providing Reconstruction Finance Corporation Aid to Insurance Companies Through Purchase of $50,000,000 Preferred Stock—Salary Maximum $17,500 for Insurance Employes, but Limit is Discretionary with Reconstruction Finance Corporation in Case of Other Corporations —Measure Goes to Conference. Insurance companies and affiliates paying salaries not more than $17,500 annually would be eligible to secure loans from the Reconstruction Finance Corporation, under the terms of the Fletcher bill, which was passed by the House of Representatives on May 24 by a vote of 202 to 137 and then returned the Senate for concurrence on several amendments. The bill authorizes the corporation to purchase not to exceed $50,000,000 in preferred stock of insurance companies, and carries the salary limitation mentioned. As the bill originally passed the Senate the maximum salary of officers of any borrowing corporation was fixed at $17,500, but the House Banking and Currency Committee eliminated this provision and substituted discretionary powers for the Reconstruction Finance Corporation on such compensation, which was defined as "any salary, fee, bonus, commission or other payment, direct or indirect, in money or otherwise,for personal services." In the case of insurance companies with which transactions under the bill are negotiated the $17,500 salary limitation still applies, but in other instances salary adjustment is left to the corporation. Provisions of the bill, which would constitute an amendment to the Reconstruction Finance Corporation Act, were summarized as follows in Washington advices to the New York "Times" on May 24: Under the amendment any insurance company which is in need of funds for capital purposes may,on recommendation of the Secretary of the Treasury and with the approval of the President, request the Reconstruction Finance Corporation to subscribe for its preferred stock of any class, exempt from assessment or additional liability. The amendment further provides that the corporation may, with the approval of the Secretary of the Treasury, sell in open market the whole or any part of any stock acquired. In the event the insurance company is incorporated under the laws of a State which does not permit the Issuance of preferred stock exempt from assessment or additional liability, or in which such issues are permitted only by unanimous vote of the stockholders, or upon notice of more than twenty days, the corporation is authorized to purchase the legally-issued capital stock of the insurance company. As a safeguard it is stipulated that the corporation cannot subscribe for or purchase any preferred stock or capital of any applying company until it shows that its capital stock is unimpaired, or that it will furnish cash capital which will be subordinate to the preferred stock or capital notes purchased by the corporation, and equal to the amount of stock or capital purchased. Another provision of the amendment gives the corporation authority to make loans to trustees of railroads which reorganize under the provision of the Bankruptcy Reform Act passed March 3. Another provision permits loans to any State insurance fund established for the payment of compensation to injured workmen or those disabled by disease contracted in the course of employment,or their dependents. Senate Finance Committee Reports Favorably on Home Mortgage Refinancing Bill—Amendments to House Measure Include Increase to $25,000 in Value of Home which May Be Aided—Cash Advances Allowed Up to 60% of House Value on Partly-Paid Mortgages. The Administration's $2,000,000,000 bill for refinancing home mortgages was reported favorably on May 22 by the Senate Finance Committee, after amendments had been inserted which greatly liberalized the measure as passed by the House, and which raised the value limit for homes to be aided under the plan from $15,000 to $25,000. The bill was originally introduced in Congress on April 13, after a special message from President Roosevelt on the same day. As first introduced, the limit of value of homes to be included in the bill's provisions was $10,000. The Banking Committee of the House raised this limit to $15,000 and then favorably reported the measure on April 25. It was passed Volume 136 Financial Chronicle by the House on April 28 by a vote of 383 to 4. Previous references to the bill, and to the President's message concerning it, are contained in our issues of April 15, pages 2530 and 2531, and April 29, page 2899. Other important amendments inserted by the Senate Finance Committee included an increase from 30 to 50% in the specified property value which might be advanced to home owners for immediate retirement of partially-paid mortgages. Further details of the measure, to be considered by the Senate, were reported as follows in Washington advices to the New York "Times" on May 22: Under the general plan of the bill, ordinary home owners could obtain relief through voluntary arrangements with mortgage holders, with bonds to be offered to the mortgage holders in exchange for the mortgages. The interest but not the principal of these bonds would be guaranteed by the Government. Such arrangements could be made to cover mortgages up to 80% of the present value of mortgaged homes. The cash-advance section was inserted in the bill to assist householders who had comparatively little indebtedness and who might be unable to effect wito their creditors arrangements based on the proposed interestguaranteed bonds, for the reason that the security of their homes might be considered more desirable by mortgage holders than the proposed bonds. The Committee further liberalized the House bill to make it apply to four-dwelling homes, instead of a maximum of three-dwelling houses provided for in the House bill. When the value limit for homes which could be aided was increased to $25,000 the limit of $10,000 set by the House for any one refinancing project was removed; instead, the limit in the bill is now simply 80% of the present value of any home within the $25,000 range. The House provisions for refinancing of mortgages at current interest rates. for 15-year amortization of the refinanced mortgages and for .n:eeyear moratoria on all payments in very needy cases, were retained unchanged. Proposal to Apply Normal Income Tax Rates to Corporation Dividends Opposed in Telegram Sent to President Roosevelt by Executive Committee of New York Chamber of Commerce—Suggests Federal Sales Tax. The Executive Committee of the Chamber of Commerce of the State of New York on May 24 telegraphed President Roosevelt its opposition to the proposal now before Congress to apply normal income tax rates to corporation dividends. The Committee, while commending the Government plan to provide for special taxes to finance the National Industrial Recovery measure, was unanimous against the corporation dividend feature on the ground that it would be double taxation. It suggested instead a Federal sales tax, with exemptions on necessities, as a means of raising the necessary additional revenue. The telegram, which was signed by Lawrence B. Elliman as Chairman of the Committee, was also sent to VicePresident John N. Garner, Speaker H. T. Rainey, Director of the Budget Lewis W. Douglass, Senator Pat Harrison, Chairman of the Finance Committee, and Representative Robert L. Doughton, Chairman of the Ways and Means Committee. It follows: The Executive.Conamittee of the Chamber of Commerce of the State of New York, while commending the plan of the Government to provide for special taxes to meet the expenditures of the National Industrial Recovery bill is opposed to the application of normal income tax rates to incomes Blom corporation dividends on the ground that it is double taxation and that corporations are already heavily taxed not only by the Federal Government but by many of the States. Chamber already on record in favor of Federal sales tax, believing this more practicable in giving more stable return in times of business depression and If essential food and clothing are excluded from the sales tax, the returns will be largely from these purchasing more than the necessities of life. Report covering this subject being mailed to you to-night. The report referred to, which will be acted upon at the next meeting of the Chamber on June 1, follows: to the tax proposals The Executive Committee has given consideration by the National in Congress to provide revenue for expenditures authorized Industrial Recovery bill and finds itself unanimously against the proposal from corporation dividends. to apply normal income tax rates to income exemptions on necessities, It favors instead the proposal for a sales tax with the essential revenue. produce to required this tax to be at the minimum rate FurtherDouble taxation in itself is objectionable on general principles. is already heavily taxed more, in the case of corporations, their income income rate is Federal The both by State and Federal governments. 1434% upon consolidated 13 j% upon returns by separate corporations, and impose income taxes on returns. At the same time, at least 20 States even much higher in a few corporations which run from 1% to 6%, and an additional tax on the States. A tax on dividends is a collection of surtaxes, and this double same profits. Dividends are already subject to taxation should not be further extended. on Sept. 29 1932,called The members of this Chamber at a special meeting unanimously in favor of a solely to consider taxation, went on record for the United States, desirable most Federal sales tax,of a form which seems necessary to raise additional revenue to in the event it should be found reached because a sales tax is balance the budget. This conclusion was revenue under present conditions; because the only available and desirable periods of business depression, in even it gives comparatively stable returns of inhabitants of our country, and is and because it reaches the great bulk than an increase therefore more equitable in this great National emergency burden entirely upon less than in income taxes which places the additional heavily taxed. 5% of our population who are already of dividends should be obThe revenues contemplated from taxation and clothing are excluded, the foods tained by a sales tax. If essential contributions to the Government will come, in general, only from those able to purchase more than the necessaries of life. 3645 Raymond Moley, Assistant Secretary of State, Says Administration's Reconstruction Program Is Product of Practical Minds—Tells New York Relief Conference Economic Measures Should Give No Cause for Alarm—Purpose Is to Protect Public Against Special Interests. President Roosevelt's program for economic reconstruction, involving close Government supervision of economic affairs, gives "no cause for alarm," according to a statement by Raymond Moley, Assistant Secretary of State, in an address before the eighth annual meeting of the Welfare Council of New York City on May 23. Mr. Moley declared that the Federal program is designed to save property and human values, and that it has been formulated through the advice and co-operation of practical men in industrial, financial, agricultural and social fields. "It is," he continued,"by no means, as sometimes charged, a mid-summer night's dream of theorists." The Assistant Secretary of State devoted his remarks chiefly to the measures for Farm relief, Muscle Shoals, the securities publicity bill, railroad reorganization and industrial agreements. His talk was later construed in some quarters as a reply to criticisms that professors and theorists have played too large a part in carving out the reconstruction measures advanced by the Administration at Washington. His further remarks on measures recently introduced in Congress, as reported by the New York "Times" on May 24, follow: "All these long-time acts have one thing in common—the desire to enable the Federal Government to supervise the ebb and flow of economic , affairs more closely than has been possible in the past," Professor Mole) said. "There is no cause for alarm in such supervision. The intent of all these measures is simply to assure every American citizen that there will be some one in Washington whose duty it will be to see that his general interest is not sacrificed to special interests." While emphasizing that the recovery program in general is the President's own conception, Mr. Moley said the sources of its details were many. "To the leader in Washington the country owes the general conception deep of this program of recovery," he declared. "It arose from his own awareness of national unity. the of People many. were program "The sources of the details of this poured into country, stirred as they never had been by economic distress, rebirth Washington their thoughts, ideas and proposals. It has been a of popular, plain thinking by all sorts and conditions of men. professional men, "Measures of economy were proposed by practical public and business men, deeply conscious of the necessity of maintaining Sugcredit—and were ably formulated by the Director of the Budget. gestions for farm relief came from an infinite variety of sources. It was theoof by no means, as sometimes charged, a mid-summer night's dream their rists. It arose out of ten years of endeavor by practical farmers and leaders." Assistant Secretary of State Moley Warns United States to Moderate Its Expectations of London Conference—Says "Economic Fear" Will Be Difficult to Combat—Domestic Policy of Paramount Importance, He Declares. A warning to the people of the United States that our domestic policy is of paramount importance at the present time, and that the "impossible" should not be expected of the World Monetary and Economic Conference, was voiced in a radio address on May 20 by Raymond Moley, Assistant Secretary of State and one of the close advisors of President Roosevelt. Mr. Moley declared that the London conference would be useful principally as it co-ordinates the domestic measures of the nations participating. Mr. Moley predicted that two of the chief achievements of the conference would be: (1) to find a solution for the removal of restrictions on exchange and (2) to clarify the immediate monetary policy of the various governments, with the establishment of better relationships between the central banks in each country and their own governments, as well as a closer co-operation between all central banks. The economic problems to be considered at London he believes are of a more serious nature, and he said that the fact that during the last ten years each nation has been moving toward "a self-contained economic life within its own borders" would make it "difficult to make extensive attacks upon trade- barriers, however much this may be desired." Mr. Moley reiterated the position of the Roosevelt Administration that intergovernmental debts will not be discussed as part of the conference program by the American delegates to London. He added that "any general process of trading results in an international market place, rather than in an economic conference looking to the general rehabilitation of the world on a sounder and more enlightened basis." This was the first radio address Mr. Moley has made as a member of the Roosevelt Administration. His warnings regarding over-expectation as to the possible results of the London conference might have been interpreted as an assurance that—even if the conference failed to attain many of the objects generally hoped for—the United States could 3646 Financial Chronicle still forge ahead toward business recovery by concentrating on domestic matters. The text of his address, which was given over the Columbia Broadcasting System, was given as follows in the New York "Times": The World Economic and Monetary Conference, which begins next month in London, is the result of the historical conference at Lausanne a year ago. Toward the close of that conference in July of last year, a resolution was adopted suggesting that the general program of the London conference should be divided into two parts, financial and economic. Among the financial questions were monetary and credit policy, exchange policies, the level of prices and the movement of capital. Among economic questions, the Lausanne resolution suggested the general subject of improved conditions of produce and trade interchange, with particular attention to tariff policy: prohibition and restrictions of imports and exports, quotas and other barriers to trade and producers' agreements. In preparing for the conference, the nations created what was known as an Agenda Committee, charged with the duty of exploring the field in a preliminary way and of setting up a program for the consideration of the Conference. The work of this Committee can not in any restricted sense bind the Conference itself and in so far as the Agenda Committee expressed opinions, these can not be binding on the Conference. It did, however, set up a fairly satisfactory list of topics to guide the Conference and make some helpful suggestions with regard to the consideration of each. It may be interesting in view of the importance of the agenda in planning the course of action for the Conference to describe its essential outlines. It begins with a discussion of the conditions under which a successful restoration of a free gold standard may be considered. No positiveland dogmatic conditions are laid down with regard to this. This following statement indicates the care with which the Agenda Committeelhandled this subject: "The time when it will be possible for a particular country to return to the gold standard and the exchange parity at which such a return can safely be made will necessarily depend upon the conditions in that country, as well as those abroad, and these questions can only be determined by the proper authorities in each country separately." Return to Gold Standard an Outstanding Topic. It should be noted that this was said by a committee meeting some months before the United States left the gold standard. It was no doubt an expression which met with the full approval of the representatives of countries that were then off the gold standard and, presumably, represented the particular conditions to be faced by a country in such a status. No doubt the consideration and thorough exploration of this question will be one of the most useful discussions of the Conference. The agenda, moreover, suggests the importance of a joint consideration of currency policy to be followed prior to such a general restoration. It Invites an examination of various practical questions related to the functioning of the gold standard,such as the relation between political authority and central banks, a question now under discussion here in the United States. The problem of monetary reserves is also involved. The agenda suggests the lowering of cover ratios and other methods of economizing gold, and, finally, in this connection, the co-operation of central banks and credit policy. One of the very important questions to be considered will be the status of silver in world economic policy. Not only the United States but many other nations have a deep concern in this question, which will probably be centred around various methods of raising the price of silver. In preliminary discussions, foreign governments have expressed themselves as sympathetic to this general point of view. As is pointed out by sound advocates of silver, It is not a question of remonetizing silver so much as the enhancement in the price of silver in order that Oriental and South American countries may again be able to purchase American goods. A major section of the agenda deals with the level of prices. It points out that the tremendous fall in the price level makes the position of debtors exceedingly disquieting and unpleasant. This general situation produces a world-wide distress. Moreover, decline in prices has not proceeded at the same pace for all classes of commodities. This has caused very serious confusion in international adjustments. Here, again, the majority of the representatives of the various nations participating in the conferences in Washington in the past month have favored constructive action to increase the price level. A further section of the agenda is entitled "The Resumption of the Movement of Capital." This covers not only the question of existing indebtedness, but suggests the possibility of new and safer methods of international lending. Probably the most perplexing and difficult part of the conference will have to do with the restrictions on international trade. The report of the Agenda Committee very strongly point's out the innumerable methods now used by nations to establish trade advantages, including not only tariffs, but exchange restrictions, clearing agreements, measures relating to the obligation to affix marks of origin on imported goods, quotas, prohibitions and many others. It points out the various methods of dealing with these restrictions, the difficulties and advantages in the case of each. Practical measures with respect to this subject will no doubt be presented for consideration. The agenda suggests economic agreements with respect to specific articles like wheat, and also various metals. Finally, the agenda suggests some consideration of shipping and of ship subsidies. United States Bars War Debts as Topic. The American delegates on the agenda were especially enjoined not to permit the introduction of the subject of the debts owed to the United States by foreign governments into the list of topics to be discussed at the conference. This wise prohibition represented not only the point of view of the Hoover Administration but of the present one as well. It was the firm conviction of President Roosevelt. expressed even before his inauguration, that the subject of these debts should not be considered in connection with general economic matters of mutual interest, although they might be discussed concurrently. His contention has been that the various matters involved in the conference can, most of them, be adjusted to the mutual advantage and satisfaction of the various parties concerned and, except in unusual cases, the settlement of one need not be based upon the settlement of another. It is, for example, exceedingly difficult to measure the relative values of a trade concession, let us say, against an agreement to stabilize currency. Any general process of trading results in an international market place rather than in an economic conference looking to the general rehabilitation of the world on a sounder and more enlightened basis. Somewhat in the spirit of this position is the contention of the present Administration that the debts are not a matter to be traded against other May 27 1933 matters, but are essentially questions to be determined in consultation with the countries concerned. The further point Is that the debtor countries cannot be recognized collectively in the consideration of the debts and that each one separately and distinctly should be heard at any time that it wishes to present suggestions or requests. It was clear very early in this present year that much of the success of the Conference would depend upon the extent to which the participating governments understood each others' problems and points of view, before the Conference should assemble. Therefore, President Roosevelt invited to Washington individually representatives of various countries to discuss the considerations involved in the Economic Conference. This invitation resulted in individual discussions between representatives of the United States and a score of nations. Some of the nations notably England, France. Italy, Germany and China, sent special representatives, accompanied by expert delegations. Others delegated their accredited representatives in this country to carry on these conversations. In these conferences there were reviewed the various topics in the agenda of the Conference, and the points of view of the various governments were mutually and sympathetically reviewed. These preliminary conversations were not intended to be definite. Agreements were not sought,but rather mutual understanding was sought. On thought has come to the foreground of my own mind as I have met and talked with these various representatives. It is the thought that the People of the world, as well as their own rulers, have so suffered during these years of the depression that there is everywhere a feeling of nervousness, not to say fear, in the face of the problems which are involved in recovery. It is not bitter-end chauvinism nor cold and calculated selfishness that makes the way ot universal agreement so difficult. It is fear and =certainty. The disposition of all of these delegates to lend a willing hand to general recovery was unmistakable. The communiques of good-will and hope issued by President Roosevelt and the various leaders during rhese conferences were not mere formal expressions of international piety, but bespoke a concerted desire to be helpful. No one who came into contact with these representatives could fail to discern their sincerity. But they were, nearly all of them, just as we have been, afraid. They had all experienced the heart-breaking burdens attendant upon participation in the governing of nations which were, for many economic reasons, deeply depressed. If the nations have taken measures to protect themselves even to the extent of shutting out contacts with others, it is largely due to this psychology. To become resentful in the face of these matters is to make them still worse. Fear Among Nations Is Most Serious Problem. This deep fear of the nations of the world is the most serious problem which must be mot at the World Economic Conference. That it can be partially dissipated by the initial meetings can be confidently expected. But it must be remembered that each delegate in London will have come from a nation over which the icy atmosphere of economic fear has prevailed. The delegates may, as individuals, join in a common spirit of give and take, but their conclusions will always be modified by what their parliamentary bodies will be willing to approve. This means for one thing that the thought of what reaction they will meet when they return home will act as a restraint upon what they are able to accomplish at the conference itself. And it means in addition that they will be actuated by a personal pride in achieving as much as they can —in other words, in achieving a diplomatic victory for themselves. This suggests a competitiveness among the delegations which will reflect and intensify the larger competitiveness among the nations they represent. One of the great problems of the Conference will be to reduce to a minimum this spirit ofcompetitiveness. It can be done in part by mutual understanding and in part by a limitation of the efforts to those suggestions that provide the opportunity for a genuine meeting of minds. In other words, the Conference will best serve the hopes and expectations of the world if it does not attempt the unattainable. That this will be true no one can doubt after a calm review of the views of the practical men sent here by the foreign nations to discuss their problems with us. There are, however, some problems for which solutions will probably be found. The first of these relates to the immediata monetary policy of the various governments. No doubt the establishment of better relationships between the Central Bank in each country and the government of that country, together with a closer co-operation between all Central banks, would help recovery. This is primarily a mater for the action of the Central banks, but It might well be supplemented by an agreement among governments to synchronize policies of internal public expenditures with the aim of increasing internal trade and employment. Of course, the details of such policies of public expenditures and other action will necessarily be left to the governments themselves; but there is a great value to be derived from co-ordinating these policies by international understandings. At the present time, specifically, the Unit.xl States is in the act of working out its own internal policy of public expenditure. That is in part the import of the message sent by President Roosevelt to the Congress last Wednesday. Part of the philosophy behind this measure is that the Government is seeking to counteract the element of uncertainty in our economic life which makes individuals unwilling to engage in normal business activity. It is necessary to repeat, however, that determination of such policies must in the final analysis be left to each government. But the coming Conference should provide the theatre for a better mutual understanding of the policies of the participating governments. The second problem with regard to the money matters relates to exchange. It is generally agreed that out of the Conference there must come progress in the removal of exchange restrictions. These restrictions exist because of top-heavy debt structures, but action with regard to this is not, however. primarily a government problem. These debts are for the most private debts. But it is possible for governments to guide their nationals toward the finding of a solution. Tariff Among Issues of Domestic Difficulty. Turning from the financial questions to the second class of problems. economic matters, we find questions much more difficult of solution. All of the nations, including our own, have in the past years erected tariffs and other barriers against trade, designed to secure for themselves a favorable balance of payments. The erection of such barriers has often gone hand in hand with various exchange operations. The process by which this has happened is long and intricate and need not be gone into here. But the fact is that in the past 10 years each nation has been moving in the direction of setting up a self-contained economic life within its own borders. Thus it will be difficult to make extensive attacks upon trade barriers, however much this may be desired. This points to a fact which should be made very plain. It should not be expected that the Conference itself is going to be able to lay out a plan for a series of international measures which will bring about the alleviation of economic difficulties all over the world. Volume 136 Financial Chronicle It is a popular fallacy that the depression has acted like a kind of disease which has swept over one nation after another by the process of contagion. It was argued by a number of distinguished Republicans in the last campaign that our own depression came as a result of a bank failure in Austria. The fact is that there are many depressions in many countries, which did not come upon them at the same time and which have not affected them in the same way. It is overwhelmingly clear that a good part of the Ills of each dountry is domestic. The action of an international conference which attempted to bring about cures for these difficulties solely by concerted international measures would necessarily result in failure. In large part the cures for our difficulties lie within ourselves. Each nation must set its own house in order and a meeting of representatives of all of the nations is useful in large part only to co-ordinate in some measure these national activities. Beyond this there are relatively few remedies which might be called international remedies. The failures of international conferences arise from two mistakes. The first is that the general public is led to expect altogether too much from such international action. The other mistake is that the mutual enthusiasm of those participating in conference leads them to attempt more than can reasonably be expected in the way of accomplishment. The clear understanding of these possibilities of danger must be had In approaching this Conference. It is very important that such mistakes be avoided. With clear understanding of the nature of the Conference and its objectives, the people of the United States can place the advantages that they may expect from it in the proper proportion of their general view of their own economic recovery. Above all, they must recognize that world trade is, after all, only a small percentage of the entire trade of the United States. This means that our domestic policy is of paramount importance. We must recognize, all of us, that common sense dictates that we build the basis of our prosperity here and direct all of our efforts to the end that our national welfare and prosperity may lead us away from the distress Into which the depression plunged us. But wise international co-operation can help distinctly and permanently. tions into bankruptcy, to sit silent while amateurs and sciolists, pretending to prescribe quack remedies, put continued and enormous pressure upon our financial institutions, overburden them with bonds representing government deficits, and give us a currency that has as its basis a group of unemployment relief projects. That, Dr. Willis contended, is the way to final and irretrievable diaster. According to Dr. Willis, there are three main steps which are needed in order to meet the situation. He said: Of these, the first is to restore to the people the use of the banking institutions. Whether we do that by permitting branch banking, either permanently or on a limited basis, whether we arrive at the desired result by guaranteeing the deposits of banks and then ordering them to re-open, our course is plain. We must re-open and set into solvent working order enough banks and banking offices to supply the necessities of the people, enable them to get legitimate credit when, as, and if they need it; and provide for as safe a place of deposit for their surplus funds, when they have any, as can be devised. This simple and elementary need is now refused because of purely political exigencies. The politicians at Washington refuse to allow anything that smacks of branch banking because they think it tends to monopoly or concession to the "money trust." While they are engaged in arranging to ignore, and render nugatory, the anti-trust law, they are yet so tender in their feelings regarding the dangers of monopoly, that they seem to require the people to starve because they have doubts on disputed points as to the physiological effects of the food they are called upon to eat. Parker Willis Asserts United States To-day is Nation / Without Banking System—Would Restore Banks To Use of People Either Through-Branch Banking or Guarantee of Deposits—Reconstitution of Federal Reserve System Also Advocated. Restoration to the people of the use of banking institutions, either through branch banking or through guaranteeing deposits; alteration in our banking codes that will permit the sound and profitable operation of our banks; reconstitution of the Federal Reserve System and taking of measures needed to prevent and save the Federal Reserve System from being crushed by the Government, were among the steps advocated on May 17 by H. Parker Willis to save our banking system from annihilation and to strengthen it for the future. Dr. Willis, former editor of the New York "Journal of Commerce," and Professor of Banking, Columbia University, urged these steps at a luncheon meeting of the Financial Management Conference of the American Management Association at the Hotel Pennsylvania in New York. Dr. Willis said that the United States is to-day a nation without a banking system if by that term, we mean a system organized adequately for the service of even the most elementary banking needs and requirements. "Nor is this all," Dr. Willis continued. "We not only lack a banking system, but we have no means of getting any to fill the place of the old one. Our banks lack capital. If we recognize the plain truth, we shall admit what has been evident to many of us for some two years past—that the banking system of the nation, taken as a whole, has little left of capital and surplus." He went on to say: Were we, in other words, to write off the undisputed and inevitable shrinkage of assets and to take into account the unquestionable losses of the various institutions, we should recognize that the banks would have, as a group, not much more than enough resources to cover their liabilities. The equity of their stockholders is almost zero. The stockholder, in fact, has often a real and genuine liability for his ownership, which some time or other. he must make good. Stockholders recognize the case at last, and they are not willing to subscribe new capital, any more than they will provide it to the railroads. They will recapitalize neither, though for very different reasons in the two cases. Doubtless, there are banks that could raise new capital by appealing to stockholders but I do not know where they are, and question whether you could tell me. Dr. Willis maintained that we cannot gain any real or lasting prosperity or be sure to hold what we have so long as this condition exists in our banking system. Banking, he said, is to-day the basic industry around which the whole capitalistic system revolves. Without it, he contended, the best endeavors of industrialists must prove futile and the aspirations of public men, devoted as they may be to the "welfare of the world" will fall to the ground. "It is, therefore," Dr. Willis added, "essential for the progress of every art and science, for the protection of every type of human institution, for the up-building of business, and for the restoration of the population to a self-supporting condition, that our banking system shall be put back into working condition." To overcome the present dangers and discontents, Dr. Willis said we ought not to debase our currency, to run the whole machine into the ground, to force still more institu- 3647 The second step that is essential, according to Dr. Willis, 's to put into effect measures designed to render the banks n effective working mechanism operating in the service f the communities in which they are situated. In order to see hat banks command confidence and are prudently, as well as liberally, operated, Dr. Willis maintained that there must be alteration in our banking codes that will permit the sound ad profitable operation of our banks, revision of the conditions of operation in such a way as to repeal the conflicting and irregular systems of taxation to which they are subject under the laws of the several States, simplification of laws governing interest rates and discounting, and wise adaptation of antiquated legislation to modern requirements. Among other things, legislation designed absolutely to keep the banks out of the securities business and to make it worth while for them to continue an exclusive devotion to commercial banking business is essential. As to the third step, Dr. Willis said: The third element in our situation as to which action is imperative is the restoration of a sound basis for banking in actual practice. This means, in part, the reconstitution of the Federal Reserve System and the taking of the measures needed to prevent and save it from being crushed by the Government. Starting as a commercial banking system, the Federal' Reserve System has steadily gone down hill. It received a stunning blow during the World War, allowed itself to be drawn into the maelstrom of speculation, and has now again been put Into leading strings by a government which wishes to base our currency upon unpaid deficits as the foundation of values. Continue as at present and the Federal Reserve System (and along with it our whole currency) must become a completely discredited institution. Instant relief from the burdens of deficit financing through the use of long-term financing is absolutely essential to the safety of the System, and of those who are dependent upon it—among which our banks,in general, occupy a foremost position. The Federal Reserve System, whatever we may think of it, and however, we may view its management, Is the ultimate holder of the banking reserve of the United States. Throw away that reserve, fritter away the reserve strength of the System through so-called "open market operations," and the System collapses. With it goes our whole structure of solvency. It is proposed to-day to do just this. We face a huge deficit—our "balanced budget" a mere farce, a matter of words without reality or sincerity. We have not the means for the huge expenditures we are planning. We apologize for our action by the suggestion that, unless something of the sort be done, we shall have, as some put it, "revolution,"—the last vague threat always resorted to by extremists when it is proposed to do something of dangerous character. In order to get the funds we immediately want, we propose to throw the reserve of the Federal Reserve System into the breach and to make them available for paying the obligations to be incurred in the various hazardous schemes of government enterprise that are on the boards. Dr. Willis continued: Can we afford such a step? That is the resort that we unmistakably project. "Open market operations," are a means by which the government's obligations are converted into bank credit. We say that perhaps we shall not find it needful to go further, and to enlarge our resources again by resorting to the issue of legal tender green backs or Treasury notes. Perhaps so. Whether we do or do not is a matter of secondary importance, since we propose to do much the same thing by the application of our banking reserve to the purpose of paying for current extravagances. The proposal calls for utmost hesitation. The price that is asked is future bankruptcy and unquestionably a long period of difficult convalescence from depressed conditions in a banking system already exhausted by mismanagement and speculation. In concluding, Dr. Willis said: The task is not easy, but its difficulty is found not in lack of resources, but in unwillingness to make the necessary sacrifices and to bring the Immediate readjustments that are called for. We can do it—and do it with relative ease, considering the greatness of the task—if we will. The sooner we make a beginning, the better for all concerned, and especially for the average man, the employee and the farmer. It is no favor to him that we latter his follies, tolerate his idiosyncrasies and indulge his dangerous desires to comit economic suicide. Non-Shatterable Glass to Be Necessary Requirement on Motor Vehicles in New York State. The Department of Taxation and Finance of the Bureau of Motor Vehicles, New York State, issued the following announcement at Albany, N. Y., on May 12: 3648 Financial Chronicle An important addition to automobile equipment requirements is made by Governor Lehman who signed last week a bill making it unlawful to operate cars unless they are "equipped with safety glass wherever glass is used in doors, windows and windshields." The prohibition applies to omnibuses manufactured after January 1 1934, and to all motor vehicles manufactured after January 1 1935. "Safety glass" is construed by the new law to mean "any product composed of glass, so manufactured, fabricated or treated as substantially to prevent shattering and flying of the glass when struck or broken." A requirement of this character has long been favored by Charles A. Harnett, Commissioner of Motor Vehicles. The use of non-shatterable glass will tend to reduce personal injuries caused by flying glass, when cars are in collision. Move for Single Unified Banking System Under Federal ReserveAGaining Strength, According to Gov. Moore—Tells New Jersey Bankers Association Plan Will Not of Itself Solve Financial Problems— Opposed to State Income Tax, Municipal Finances and.Mortgage Foreclosures. A single unified banking system in the United States under Federal control was urged before the New Jersey Bankers Association on May 19 by Governor A. Harry Moore of New Jersey, who cited Great Britain and Canada as examples of the success of unified systems. He pointed out that no bank in England had failed since the World War, and none had been closed in Canada in the last three years. The Jersey City "Observer" further reports Governor Moore as saying: Regardless of our fears of centralization of political or economic powers, we have traveled steadily in that direction. Closer regulations must be placed upon banks everywhere, and neither State nor Federal banks should be chartered unless capital and reserve are entirely sufficient. Governor Moore contended that "our very failure to conduct both our public and private business within the bounds of sound economy and finance have accelerated" the move toward centralization of power. The Philadelphia "Public Ledger," in its Atlantic City advices, May 19, likewise quoted him as follows: Anyone who has followed the banking moves in Washington in recent weeks must see that the case for a single unified system under the Federal Reserve is rapidly gaining strength. There must be a change in our regulation of banking procedure, yet I am constrained to say that the cure for this situation lies deeper than law and regulation. The action of a comprehensive centralized banking system seems alluring. I expect to see radical changes made by the present Congress, and much greater Federal control, if our whole banking systems are not merged into one. But, however well conceived such a plan may be, it will not of itself solve our financial and credit problems. No systems and no degree of supervision will serve as a substitute for honest and sound management. No statutory enactments will remove speculative greed nor furnish banking knowledge and sound financial judgment to the untrained amateur so often found in the banking field. :The "Observer" reports Governor Moore as expressing positive and unalterable opposition to a State income tax and to any tangible tax, in his address at the annual banquet of the New Jersey Bankers Association. The "Observer" also states that the Governor also announced that Senator Ricihards, President of the Senate, is likewise opposed to an income tax. The Newark "News" reports that the bankers adopted a resolution declaring opposition to new taxes. A resolution disapproving the deposit guaranty feature of the Glass-Steagall bank bill, also adopted, is referred to in another item in this issue of our paper. Regarding further comment by Governor Moore in the course of his address, we quote the following from the "Observer": Governor Moore also spoke briefly on State and municipal finances, pointing out that municipal indebtedness totals more than a billion dollars in New Jersey. Debt service alone takes 31c. out of every tax dollar, he said. Speaking of mortgages, the Governor said that he had watched with a great deal of anxiety the rising tide of mortgage foreclosures against homes and farms of New Jersey citizens. Every foreclosure, he said, holds a tragedy for a family, and he was pleased to learn that financial institutions have determined upon a policy of greater leniency in handling mortgages and individual debt problems. In conclusion the Governor said: "The situation calls for work rathe'• than inspiration, for honesty rather than shrewdness. There is no oas dramatic move or any fortuitous circumstance, I am sure, that will suddenly lift us out of the mire. We shall save ourselves by the practice of the humble virtues of thrift, and prudence, and self-denial which were the cardinal guides of our forefathers who planned and builded this nation. "The people have suffered, and when they suffer they think. We are on the road to recovery. We have regained our courage. We have retained our faith. Fired by a new and understanding leadership in Washington, we are marching on. We shall follow that leadership back to our old conditions of peace and plenty and well-being," Bank Reform-Bills Passed by Pennsylvania Legislature Signed by Gov. Pinchot—Larger Reserves Re1' quired—Loans and Investments Restricted— Prohibition Against Guaranteeing of Mortgages by '--- Banks. On May 16 Governor Pinchot of Pennsylvania signed new State banking laws which he said are "two of the most important Acts passed in Pennsylvania in many years." They are effective July 3, it was stated in Associated Press advices from Harrisburg, May 16, to the Pittsburgh "Post-Gazette," which also said: May 27 1933 The legislation, enacted in two codes sponsored by Senator Andrew J. Sordoni, Luzerne, give the State wider control over banks and set up new safeguards for depositors and stockholders. Seen As Almost "Ideal." Dr. William D. Gordon, Secretary of Banking, regards them as "a tremendous step forward" and legislation which missed being "ideal" largely through the Senate's refusal to put all private banks under control of the Banking Department. Under the new laws the Department will have what Pinchot terms "real power to determine whether a new institution is needed in any community" and prohibit establishment of "unnecessary" institutions. Greatly increased capital and surplus minimums are required, with onehalf of all earnings set aside until a surplus equal to the capital of each bank is built up. By this and other methods, the new laws require banks to accumulate larger reserves, maintain ample cash reserves and restrict loans to new safety levels. Investments Restricted. Stock inveatments are restricted and banks are prohibited from guaranparticipating teeing mortgages and in mortgage pools except for trust funds. The codes authorize the Banking Department to speed up liquidation of closed banks and modify present procedure to permit the elimination of unessential expenses and to conserve assets for depositors and stockholders. The Legislature struck from the measures provisions for regulation of banking affiliates. At the annual convention, in Atlantic City, on May 18, of the Pennsylvania Bankers Association, Franklin Spencer Edmonds, Philadelphia attorney and President of the National Tax Association, reviewed some of the work done by the Pennsylvania Legislature at its recent session; according to the Philadelphia "Public Ledger," which went on to say: He predicted the passage of the banking codes would rebound to the benefit of depositors and the financial institutions of the State. Mr. Edmonds referred to four sections of the code which he asserted would be especially helpful. They relate to mortgage pools, the prohibition on the guaranteeing of mortgages or lending of fiduciary funds to officers, directors or employees, and the purchase of exchange of assets with a bank's commercial department. The new Pennsylvania banking code was termed the most far-reaching piece of banking legislation adopted at any session of the State Legislature In many years, by John G. Reading, of Williamsport, Pa., Chairman of the Association's Committee on Legislation. U. S. Population Increase Put at 180,000 for 1932— Cities Fail to Show Gain First Time in Century. United Press advices from Chicago May 6 to the New York "Herald Tribune" said: Population increase in the United States last year was the smallest since 1880 and the first year in more than a century in which cities did not show a gain, a report issued to-day by the "American Journal of Sociology" disclosed. By 1940 the report predicted, the United States may have a population of only 130,000,000 and may show only a slight increase thereafter. Rural population increased during the last year due largely to pression, the report stated, but city population declined possibly the deas much as 470,000, it was estimated. The nation's population increased 180,000 last year, the report showed, a decrease of 5% from 1931. Since 1923 there has been a decline of 60%. If the growth continues at about nually the rest of the decade, the report said, the population 800,000 anwill be 131,000,000 in 1940, compared to 122,750,000 in 1930. Investigation into General Level of Railway Freight Rates by Inter-State Commerce Commission— R. H. Aishton of Association of Railway Executives, in Appearing as Witness, Reports Net Income for Railways in 1928 of $786,824,000 Wiped Out in 1932 and Replaced by Net Deficit of $152,135,000— Finds Operating Expenses in 1932 46% Below 1928. A striking picture of the financial difficulties now confronting the railroads and a comprehensive summary of the intensive efforts of the steam lines to increase the economy and efficiency of their operation were presented to the InterState Commerce Commission, at Washington, on May 25, by R. H. Aighton, Chairman of the Executive Committee, Association of Railway Executives, and Chairman of the Board of Directors, American Railway Association. Mr. Aishton was the first railway witness to appear before the Commission in the course of its current investigation into the general level of railway freight rates. In emphasizing the financial emergency confronting the carriers, Mr. Aishton pointed out that railway net earnings, before the payment of fixed charges, totaled $1,173,427,000 In 1928; in 1932 this total had fallen to $326,364,000, a decline of more than 72%. Likewise, railway net income, after the payment of fixed charges, amounted to $786,824,000 in 1928; in 1932, however, the net income of 1928 was completely wiped out, and was replaced by a net deficit of $152,135,000. An announcement issued by the Committee on Public Relations of the Eastern Railroads and the Western Railways' Committee on Public Relations, also quoted Mr. Aishton as saying: In 1929, out of a total of 241,684 miles of Class I railroad, only a total of 10,180 miles of line, or 4.2% of the mileage, reported a net deficit. This deficit mileage had increased in 1932 to 177,932 miles, or 73% of the total operated mileage. The railway companies operating these 177,932 miles of line reported a total net deficit of $250,295,000 in 1932. Furthermore, in the first quarter of 1933 Class I railways reported net earnings, before fixed charges, of $33,909,000 compared with $65,478,000 for the corresponding period in 1932, or a decline of more than 48% within the last year alone. Volume 1.:6 Financial Chronicle testified, Total railway operating revenues, Mr. Menton 000 in 1932, a fell from $6,100,000,000 in 1928 to $3,100,000, operating expenses decline of 49%. In this same period, $2,400,000,000. were reduced 46%, from $4,400,000,000 to in revreductions percentage the in coincidence This close witness the , noteworthy especially enues and expenses was that are not directly said, in view of those railroad expenses t. He continued: managemen railroad within the control of costs, representing 60% of Among these items are such factors as labor which legislative machinery operating expenses and for the greater part of in 1932 were equal to 11.4% of for changes has been set up; as taxes, which legislative action, such railway operating expenses; and as costs entailed by trains, and non-productive exas full-crew laws, limitation of length of penditures. carried on by Co-operative and individual research work "A recently Aishton. Mr. by stressed also was the railways handling collective a "shows compiled summary," he stated, the adoption of in resulting problems, 3,000 than more of in the specifications, rules and standards, every one of them efficient interest of better service and more economical and operation." Mr. Aishton further said: authorized by the railFor example, a special appropriation of $2,000,000 cost of $125,000 a roads was recently spent in a study of air brakes. At a was recently comgears scientific investigation of the various types of draft the railroads covering pleted, which resulted in changed specifications of treating water used this mechanism. Development of a plan for chemically saved the railroads in locomotive boilers to prevent corrosion and scale has several millions of dollars. on these Furthermore, a detailed report from 44 railroads indicates that under way on 70 lines there are investigations either about completed or cars, freight to subjects pertaining to locomotives, 65 subjects pertaining to mechani38 subjects pertaining to passenger cars, nine subjects pertaining 15 to signals cal methods and tools, 67 subjects pertaining to engineering, view of all these and eight to telephone and telegraph installations. In and truth activities and the results obtained therefrom, it cannot in fairness investigabe said that the railroads have been remiss either in research and research to their tion or in their lack of application of the results of this operating conditions. passengerFurthermore, agreements have been effected resulting in reduced that may train mileage and in obviating certain competitive expenditures The total be dispensed with at this time and under existing conditions. number of miles run by passenger trains has been reduced from 522,000,000 In 1928 to 362,000,000 in 1932, a reduction of more than 30%. These totals exclude motor passenger-train miles, which have increased extent from 44,000,000 in 1928 to 60,000,000 in 1932, an indication of the place. to which substitute service by an economical method has taken Again, since the beginning of 1933 there have been eliminated, or it is contemplated to eliminate, a total of not less than 22,000,000 passenger-train miles annually in addition to those which had already been eliminated at the end of 1932. The railways may be depended upon to so adjust their charges and services, consistent with good business judgment, as to meet the needs of commerce. It is to the carriers' interest to maintain freight rates which will not only permit but encourage the development of business which may be handled by them. Few, if any, general reductions in freight rates in the past have stimulated such a substantial increase in traffic as to overcome the loss in net revenue resulting from such general reductions. It is my belief that the best interests of all concerned will be better served by a continuation of adjustments of specific rates to fit the needs of each particular situation rather than by any horizontal reduction in rates. The railroad managements can continue to be relied upon to do their part in meeting the needs of industry. regional committee to assist the co-ordinator, two shall be "special members," of whom one will represent steam railroads, which in 1932 had operating revenues of less than $1,000,000, and the other will represent independently owned electrical railroads, or electrical systems not owned by steam railroads. The other amendment provides that no loans may be made in the future by the Reconstruction Finance Corporation to railroads when the Commission is of the opinion "that such carrier is in need of financial.reorganization in the public interest." The amendment to safeguard the rights of railroad labor contains the following clause, which forms a part of Section 7 of the bill: be reduced The number of employees in the service of a carrier shall not under the authority of this title beyond the number as shown by the payrolls any emof employees in service during the month of May 1933, nor shall ployee in such service be deprived of employment or be in a worse position in respect to his compensation by reason of any action taken pursuant to the authority conferred by this Act, except to the extent that after the effective date of this Act vacancies are created by the death, normal retirement, or resignation of employees, but not to exceed 5% in any one year. A long succession of witnesses was examined by the InterState Commerce Committees of both the Senate and House during the preliminary hearings on the bill, and a number of the witnesses appeared before both Committees. These included Secretary of Commerce Roper, Joseph B. Eastman, member of the Inter-tate Commerce Commission, and Donald It. Richberg of Chicago, General Counsel of the Railway Labor Executive Association. Secretary Roper entered into a detailed explanation of the plan embodied in the bill, as di-1 Dr. Walter M. W. Splawn, special counsel on railroad matters for the House Committee on Inter-State and Foreign Commerce. Both men participated in drafting the measure for the President Mr. Eastman outlined the projected changes and results If the bill should he enacted, while Mr. Richberg presented the position of the organized workers. Another important witness at the Senate Committee hearings was Carl R. Gray, President of the Union Pacific Railway System, who attacked the practicability of Section 14 of the Administration bill. That section provides that the Inter-State Commerce Commission shall not approve a loan to a railroad under the R. F. C. Act, nor authorize a carrier to issue bonds or other certificates of indebtedness, unless the Commission finds "there is reasonable prospect that such carrier can without financial reorganization survive the existing economic depression and provide for its capital needs thereafter." The testimony before the Committees of the Senate and House, as reported, in part, in the "United tates Daily" (issue of May 6-13), follows: Railroad Bill Amended in Senate Inter-State Commerce Committee to Protect Labor—Changes Seen as Limiting Economies Visualized in Administration Measure—Hearings Before Committees of Senate and &House — Secretary Roper, Commissioner Eastman and D. R. Richberg Among Those Heard. The Administration's emergency railroad program, as contained in the reorganization bill now before Congress, underwent several important changes before a favorable report was agreed upon it by the Senate Inter-State Commerce Committee on May 19. The Senate Committee conducted hearings on the measure during the week of May 8, and in the following week considered proposed amendments to the bill. Introduction of the bill in Congress on May 4, following the reading of President Roosevelt's special message calling for the appointment of a Federal co-ordinator to guide the roads through reorganization, was noted in our issue of May 6, page 3087. The chief amendment to the railroad bill, written during Its consideration by the Senate Inter-State Commerce Committee, acts to fix the minimum payroll as that in effect during the current month (May 1933), and also practically forbids further cuts in pay. The amendment permits decreases in total personnel of 5% annually, but only as they come about through natural causes. The motivating force which shaped the amendment was the influence of organized labor. Its result is interpreted as indicating that economies in railroad operation under the measure will be limited to reductions in operations and maintenance of materials. Among the many other amendments to the bill that were added in Committee, two are of especial importance. One stipulates that of five members to be appointed on each 3649 Discussion Confined to Co-ordination Plan. Representative Rayburn (Dem.), of Bonham, Tex., Chairman of the House hearCommittee, announced May 8, at the opening of the House Committee repeal of the ings, that the Committee already had approved legislation for Inter-State recapture provisions of the Transportation Act of 1920 and for of Commerce Commission regulation of railway holding companies, both the which were recommended in the President's message of May 4, and that emergency Committee therefore would confine its hearings to the President's 5500). plan for Federal co-ordination as outlined in the Rayburn bill (H. R. Secretary Roper testified that the future of railway transportation largely depends on the results of the emergency plan now before Congress, and that these results depend not so much on the Federal Co-ordinator to be created under the terms of the proposed law, but on the railroad executives themselves. He advised the Committee of the studies of the proposed legislatiOn by a special committee headed by Joseph B. Eastman, Inter-State Commerce Commissioner, and of suggestions received from F. E. Williamson, President of the New York Central RR.; Carl Gray, President of the Union Pacific RR.; J. J. Pelkey, President of the New York New Haven 8: Hartford RR., and from Henry Bruere, the last-named in connection with the views of savings banks. Secretary Roper explained that the purposes of the bill are to assist the railroads to help themselves, stating that the bill is more or less experimental and that the plan contemplates regional co-ordinating committees to be selected by the railroads, with whom the Federal Co-ordinator would co-operate over a period of two years. He said that labor organizations are not represented on these regional committees, but that they are safeguarded in their rights of collective bargaining and the bill preserves to them all the rights they now have under Federal and State laws. Plan Does Not Cover Questions of Rates. Dr. Splawn explained the details of the bill. Representative Huddleston (Dem.), of Birmingham, Ala., suggested that the bill does not make any provision for horizontal rate reductions, and both Secretary Roper and Dr. Splawn pointed out the bill does not deal with rates. Dr. Splawn, answering questions of the committee, said the amount of the savings which might be expected under the bill could not be estimated at this time. Representative Cooper (Rep.), of Youngstown, Ohio, a former railroad engineer, asked who would get the benefit of the savings. Dr. Splawn said that if the savings are relatively small they would inure to the benefit of the bondholders, but if the savings amount to a substantial figure the benefits probably would be passed on to all parties, including the shippers and the employees of the roads. Representative Wolverton (Rep.), of Camden, N. J., observed that "the effect of the bill, then, would be to increase the purchasing power of the railway bondholders and decrease the purchasing power of railway employees." Financial Chronicle May 27 1933 "We might as well face this bill with open eyes," said Mr. Cooper. "If such carrier can under normal business conditions, without reorganization, there are going to be railroad reorganizations, there is certain to be reduction provide for its financial needs ; Provided, however, that the term 'carrier' in the number of employees. This bill, as I see it, will certainly deprive as used in this section shall not include a receiver or trustee." many railroad employees of their jobs. There are now about 500,000 railJohn E. Benton, Washington, D. C., counsel for the National Association way workmen out of employment. I am in sympathy with what is sought to of Railroad and Utilities Commissioners, testified there is no desire on their be accomplished for the railroads, but it probably will cause unemployment part to oppose the objectives of the pending legislation, but said the bill to a considerable number of men now on the railroads." does not recognize the State Commissions. "You cannot spend money and keep it, too, that is certain," Chairman Senator Couzens asked if he believed in limiting to $17,500 a year the Rayburn interrupted. . . . salaries of executives of railroads seeking these Government loans. Mr. Dr. Splawn expressed belief that large economies cannot be realized withFletcher said he did not, adding that many of the railroad executives could out some men losing their jobs—how many he did not estimate. He added get better opportunities if so limited. that the Federal Co-ordinator's duty would be to serve notice on employees Mr. Thom discussed different kinds of financial structure of railroads and who would lose their jobs and to give them opportunity for a conference on the priority of liens. He said at the present time nothing can be liquidated, the subject, with the right of appeal. . . . and Mr. Couzens suggested the railroad employees are being liquidated with Commissioner Eastman, testifying May 9 before the Senate Committee, foreclosures of homes. outlined what he said are illustrations of matters that come within the range Mr. Benton said he felt the omission of recognition of State Commissions of the bill. He listed these "prospects," as he called them, with which the in the bill was accidental and should be remedied. . . proposed law, if enacted, may deal, as follows: The membership of the regional committees provided under the bill should be increased to allow the short-line railroads to be represented in "Unnecessary duplications of service or facilities, including wastes existing matters at large railroad centers, which wastes could be eliminated by joint use of which concern them, E. J: Jones, of Washington, counsel of the American Short Line Railroad Association, testified May 12. freight and passenger terminals and the lines and facilities incident to them, Mr. Jones submitted an amendment which would allow the and unnecessary passenger or freight train service such as could be elimiCo-ordinator to appoint to each regional committee a representative of the nated by pooling arrangements. short-line railroads in that region. . . . "Use of unduly circuitous routes. Extravagance in solicitation of traffic. H. W. Purvis, Chairman of the Southern Short Line Railroad Waste in equipment repair expense, such as could be avoided by joint use of Conference, suggested there should be one member of each regional committee certain shops and abandonment of others. Waste in passenger ticket offices, to represent the short lines. such as could be avoided by combined ticket offices. Unnecessary allowances Mr. Purvis asked that R. F. C. loans to receivers and to large shippers for certain services. Unduly low charges for warehousing trustees of the roads be continued. Ile said he fears that "unless the short and like accessorial services. lines are given representation the trunk lines will seize upon the bill as a "Waste in use of equipment such as might be avoided by pooling arrangemethod of eliminating them." ments. Change in car rentals or other means of reducing empty return W. W. Roystcr, of Chicago, representing the Railway movement of cars. Wasteful practices in purchase of equipment, rails, ties, Employees' National Pension Association, asserted "the bill does not afford materials and supplies, including not only purchasing methods but also labor any means of protecting itself." He favored a pension provision for standardization and specifications. workers who may be dismissed because of the new law and he also "Reduction of unprofitable operations and provision of better service by suggested it would be desirable for the railroads to pension some of their older the substitution of motor vehicles for steam service and their use as auxiliaries employees to give younger men a chance for work. in terminal service. J. G. Luhrsen, President of the American Train "Waste in practices in payment of loss and damage claims. Wasteful pracDispatchers' Association, suggested an amendment placing train dispatchers on a tices with respect to freight-forwarding cotnpanies and improvements in their six-hour day instead of the present eight-hour day. use. Waste in handling of less than carload freight, such waste as can be Ben C. Marsh, Executive Secretary of the People's eliminated by railroad co-operation. Wasteful practices in operation of Lobby, expressed his organization's disapproval of the proposed law, and unnecessary parallel motor bus or motor truck services. Wasteful policies the Government should take over the ownership of suggested instead that with respect to rates, and consideration of general plans to adjust freight the roads. rate structures to modern needs." At the same time, Commissioner Eastman suggested a public works proHead of Railway Labor Union Threatens gram might well include widespread elimination of railroad grade crossings Strike if Carriers Move for Further Cut Nationwide at public expense. He declared he would be happy if a practicable way in Wages. could be proposed whereby funds could be supplied for making up deferred The railway unions will not accept any additional cut in railroad maintenance, now amounting probably to more than a billion dollars. pay, according to a statement made in Chicago Discussing railroad capitalization and fixed interest obligations of railon May 24 by A. F. Whitney, chairmanjof the Railway roads, Mr. Eastman pointed out there are only two possible ways of reducing Labor Execusuch obligations, namely, consent of the creditors of through action of courts tives' Association. "We will tie up the entire country before in equity receivership or bankruptcy proceedings. He also told the Comwe accept a one penny cut in wages," he mittee that "it is not at all true that financial difficulties are confined to declared. "But the railroads are just kidding themselves. over-capitalized railroads or to those which have squandered .capital in such They are not ventures." going to cut wages, and we are not going to permit any more He predicted that to bring about a complete co-ordination of transportadeflationary moves because we are down to bed tion the rail lines must change their methods of operation and services and rock now." Despite Mr. Whitney's prediction, Western types of equipment, extend the use of motor and perhaps water and air railroad auxiliaries, and change their rate structures. officials were represented as Organized Employees Opposed to Program. Mr. Richberg told the Senate Committee, May 10, that organized railway employees oppose the program embodied in the Administration bills "because it provides a mechanism of false economy which will seriously reduce transportation service for the public, will deprive from 50,000 to 300,000 employees of work, will not permanently improve railroad operations or railroad credit, will retard economic recovery and will promote policies that will work infinite harm to the public interests." "In the proposed bill," he said, "the Congress is considering an effort to accomplish the impossible: to bring about a consolidation of railroad operations whereby less transportation service will be furnished but more money will be made; to bring about greater concentration of private control, fostering monopoly, while at the same time attempting to increase public control; to deflate capital and labor drastically in a great essential industry, while at the same time promoting a program of inflation and economic recovery. "We do not believe that such an effort can succeed." Mr. Richberg asserted that "the primary reason for an industrial enterprise is to furnish a livelihood to workers." He submitted as "a statement of fact, not a statement of principle," that "the Government cannot at the present time assume the responsibility for depriving workers of employment without assuming at the same time the responsibility for their future support. If railroad workers lose the employment they now have, they will become public charges," he said. Suggests Changes in Financial Structure. The labor spokesman offered several amendments to the bill, including a provision that the powers of the Co-ordinator shall be extended over motor, water, air and other transportation services. He proposed also that the Coordinator be empowered to direct rehabilitation, improvements and extensions of facilities so as to provide additional employment. Senator Couzens (Rep.), of Michigan, asked about the feasibility of keeping funds required to be impounded under the recapture clause of the Transportation Act of 1920 as a fund to aid discharged employees. Mr. Richberg agreed with Chairman Dill that it has been difficult to collect that fund and that it may be long delayed through litigation. At the Senate Committee hearing, May 11, Carl R. Gray, President of the Union Pacific Railway System; Richard H. Fletcher, General Counsel of the Association of Railway Executives, and Alfred P. Thom, Associate General Counsel, attacked the practicability of Section 14 of the Administration bill. That section provides that the Inter-State Commerce Commission shall not approve a loan to a carrier under the R. F. C. Act, nor authorize a carrier to issue bonds or other evidence of indebtedness, unless the Commission finds "there is reasonable prospect that such carrier can without financial reorganization survive the existing economic depression and provide for its capital needs thereafter." Mr. Fletcher asked the Committee to adopt a substitute providing that the Commission shall not approve a loan unless it shall find that "the financial structure of the carrier is such that there is reasonable prospect that believing that the carriers would insist in union pay reductions, and would serve notice on or after June 1, as provided by the contract between employers and employees. Inter-State Commerce Commission Issues Rules to Govern Petitions Filed for Approval of Bankruptcy Proceedings Against Railroads. Rules governing the procedure to be followed by creditors of railroads in filing with the Inter-State Commerce Commission applications for approval of bankruptcy actions against carriers were issued by the Commission on May 9. The detailed instructions relate principally to the documents and supporting data that shall be included with the application, made by creditors "having claims or interests aggregating not less than 5 per cent= of all the indebtedness of such corporation." Among the exhibits required to be filed are copies of the railroad's balance sheet and income accounts for five calendar years and for months of a current year for which figures are available, and a statement showing in detail the indebtedness of the carrier. The text of the Commission's order follows: IN THE MATTER OF PROCEDURE BEFORE THE COMMISSION UNDER SECTION 77 OF THE ACT TO ESTABLISH A UNIFORM SYSTEM OF BANKRUPTCY THROUGHOUT THE UNITED STATES, AS AMENDED. It is ordered, That the following special rules of procedure be, and they hereby are, adopted and prescribed to govern the procedure before the Commission under the provisions of Section 77 of the Act of July 1 1898, entitled "An Act to Establish a Uniform System of Bankruptcy Throughout the United States," as amended. (a) Creditors of any railroad corporation having claims or interests aggregating not less than 5 per centum of all the indebtedness of such corporation as shown in the latest annual report which it has filed with the Commission, intending to file a petition with a court and desiring first to obtain the approval of the Commission after hearing, as provided in Section 77(a), shall file with the Commission an application herein referred to as creditors' application. (b) Creditors' applications shall be made either (1) by the creditors themselves, or (2) on their behalf by a duly authorized representative. (c) A creditors' application shall show, in the name and post-office address of each applicant following order: (1) The ; (2) Whether applicant is an individual, a corporation, a firm, or a partnership, and if a firm or Volume 136 Eastern Railroads Agree to Cut Milk Rates 19% for Experimental Period of One Year—Presidents' Conference Reaches No Agreement on Passenger Fare Reductions. An average reduction of 19% in freight rates on milk for an experimental period of one year, beginning July 1 1933, was agreed upon at the regular monthly meeting of Presidents of Eastern railroads held on May 19 In New York City. The decision was made after conclusion of conferences berepresentatives of the milk industry and the Eastern carriers, No agreement was reached by the railroad executives on the question of passenger fares in Eastern territory, but it was generally understood that several of the larger roads, including the Pennsylvania and New York Central, opposed any important passenger reduction at this time. The announcement on a cut In the rate on milk, as made may 19 by the Committee on Public Relations, Eastern President's Conference, follows: Representatives of the milk Industry and rail carriers in Eastern territory have had a series of conferences over an extended period regarding the measure of reduction in the rates on milk necessary to retain the movement of that commodity in rail service as against competitive transportation agencies. 3651 Financial Chronicle partnership, the names of the members thereof; (3) The name, title, and Post-office address of the person to whom correspondence in regard to the application is to be addressed; (4) The facts relied upon to show that the creditors are entitled, subject to the approval of the Commission, to file such petition viz: (a) that each applicant is a creditor or represents creditors of the railroad corporation (here inserting without abbreviation Its corporate title) ; (b) that the railroad corporation is insolvent or (as the case may be) is unable to meet its debts as they mature; (c) that the railroad corporation has not filed a petition for reorganization under the provisions of Section 77(a) ; (d) that the creditors propose that the railroad corporation shall effect a reorganization, and desire to file a petition in court and seek the approval of the commission to that end; (e) the nature and amount, together with descriptive title, if any, of the claims or interests of such creditors, in such detail as to enable the Commission to reach a conclusion as to the classification of the claims or interests as indebtedness of the railroad corporation; (f) the total amount of the claims or Interests, and the total indebtedness of the railroad corporation as shown in the latest annual report filed by the railroad corporation with the Commission, with statements thereof classified under the headings of the "comparative general balance sheet—liability side" in form as prescribed for the annual report; (g) any other facts relied upon to show that the filing of a petition for reorganization of the railroad corporation should be approved by the Commission. (d) There shall be filed with the original creditors' application and with each copy thereof, as a part thereof, the following exhibits: (1) If filed on behalf of the creditors by a representative, all agreements, powers of attorney, and other instruments, or certified copies thereof evidencing the representative's authority to act for the creditors, together with a statement showing the name and post-office address of each creditor and the amount of each class of claims or interests of each creditor. (2) A copy of the proposed petition to which the application relates. (3) If an applicant is a corporation and the filing of a creditors' application with the Commission or the petition with the court requires the authorization of the applicant's board of directors or a committee thereof, a copy of all appropriate resolutions, authenticated by proper executive officer, authorizing the filing of the application or petition. (4) A copy of the railroad corporation's balance sheet as shown in the latest annual report filed with the Commission. (5) Copies of the railroad corporation's income accounts for the five preceding calendar years and for the months of the current year for which the figures are available; also copies of the last profit and loss account of the railroad corporation. If the property of the railroad corporation has been operated by receivers during any portion of such period, there shall be filed income accounts of the receivers covering such operation. (6) A statement showing the nature, together with descriptive title, if any, and the respective amounts and maturity dates, of the obligations of • the railroad corporation maturing within twelve months from the date of verification of the application. (e) The following procedure shall govern the execution, filing and disposition of a creditors' application. (1) The original creditors' application shall be personally subscribed (a) by the applicant or by one of them duly designated for that purpose by the other applicants, or (b) by an officer of the applicant, if a corporation or other organization, or (c) for the applicant or applicants by an attorney or practitioner duly authorized to practice under Rule 1-B of the Rules of Practice, thereunto duly authorized. The facts alleged must be verified iv manner as provided by Rule III (h) 2 of the Rules of Practice. (2) The original creditors' application and supporting papers, six copies for the use of the Commission, and one copy for service upon the railroad corporation shall be filed as provided in Rule XXIII of the Rules of Practice. Each copy shall bear the dates and signatures that appear in the original and shall be complete in itself, but the signatures in the copies may be stamped or typed, and the notarral seal may be omitted. The Commission will serve the application upon the railroad corporation. (3) Upon receipt of creditors' application, the Commission, as provided by Section 77(a) of the bankruptcy act, will order a hearing upon the application, and will give notice thereof to the applicant or applicants and the railroad corporation. (f) Every application under Section 77 shall conform to Rule XXI of the Rules of Practice. (g) In all proceedings under Section 77 of the Bankruptcy Act, protests, motions, petitions, and briefs must, when filed or tendered for filing by the Commission show service thereof upon all other parties to the proceeding before the court under that section. (1) Petitions for leave to intervene and answer thereto, hearing upon applications and other proceedings under Section 77 of the Bankruptcy Act shall be governed by the Rules of Practice. By the Commission. GEORGE B. McGINTY, Secretary. The subject was further considered at a meeting of the Presidents of Eastern lines, held to-day, when the conditions surrounding the transportation of milk in Eastern territory, with particular reference to shipments destined to the New York Metropolitan area, were fully discussed. The representatives of the rail carriers, after a. thorough review of all the conditions surrounding the handling of this traffic by rail, have announced that they are prepared, for an experimental period of one year from July 1 1933, to make substantial reductions in the rates to points in the New York Metropolitan district, which approximate an average of 19%. Under the new rate basis the existing rates on I. c. 1. shipments of milk in 40-quart cans will be reduced 15%, the rates on shipments in cans, in carloads, will be made 80% of the 1. c. 1. rates, and rates on milk in tank cars will be 70% of the I. c. 1. rates on milk in cans. With regard to passenger fares, an announcement said: The question of passenger fares in Eastern territory which has been the subject of study by traffic executives and passenger traffic officers under the direction of the Presidents was further discussed by the Presidents of Eastern lines to-day but without reaching a definite conclusion. Inquiry Into Affairs of J. P. Morgan & Co. by Senate Committee Investigating Stock Market Operations —Statement of Public Offerings of Foreign and Domestic Securities Since the World War—Total $6,024,444,200, of which $2,098,953,400 Have Been Retired. A list of the public offerings of foreign and domestic securities by S. P. Morgan & Co. since the World War, was on May 25, inserted into the records of the Senate Committee, which has been inquiring into the operations of the banking house. The statement, which was presented to the Committee by George Whitney, a partner in the Morgan firm, follows: It may be of interest to the Committee to give a brief summary Of the public offerings of securities, foreign and domestic, that J. P. Morgan & Co. have made since the World War. For the period from Jan. 11919, to date, we have offered to the public. In almost every instance in association with others who have Joined us in such financing, securities to the aggregate amount of 86,024,444,200, of which $2,098,953.400 have been retired. Manifestly, it would have been impossible for us alone to have handled such a tremendous volume, but in every instance the public offering was made over our name and In most instances over the names of others as well. For convenience we have listed these public offerings under six groups: GROUP I. Obligations of Foreign Governments and Foreign Corporations. These public offerings aggregate $2,232,757,000 in principal amount. Of these obligations 40%, or 8883,854,400, have been retired either by payment at maturity, by redemption at prices ranging from 1073 % to 115%, or by purchasing at .1 arlows prices through sinking funds. There remain outstanding bonds or obligations of foreign governments or foreign obligators to the aggregate principal amount of 81,348,902,600. Of these, even in these depressed times, $446,690,500. or 33%, were on May 11 1933, selling above the original public offering price. The average offering price to the public of these obligations was 94.69% and the average current market price on May 11 1933. was 81.07%, a decline of less than 13% points. (The figures which I am giving in this group and in subsequent groups for public offering prices and for current market prices are a weighted average based on the total amount of bonds remaining outstanding.) No investor, who in this period purchased any of these bonds which we offered to the public, has failed to receive the regular payment of interest at the full rate in United States currency or the regular payment of principal when due. The only German bonds that we have offered were the German Government 7% bonds and 5J% bonds, both of which were issued in pursuance of international plans for German reconstruction and under the auspices of the great powers. GROUP II. Railroad Company Bonds. The total principal amount offered to the public aggregates $1,845,639.300. Of these about 29%,or 8536,814.500, have been retired, substantially all by payment at maturity, by redemption or by conversion, as few railroad Issues have sinking fund provisions. Of the balance—namely, 81,308,824,800—only 7.2% were, on May 11 1933 selling above their original issue prices. The average price at which these bonds were offered to the public was 96.58%; the average current market price on May 11 1933 was 63.94%, a decline of 32.64 points, or about one-third. Of these issues $125,079,000 are in default in payment of interest or Principal—namely, $45,000,000 Florida East Coast Railway first and refunding mortgage 5% bonds; $18,879,000 Mobile & Ohio Railroad Co. refunding and improvement 4%% bonds and secured 5% notes. and $61,200,000 Missouri Pacific Railroad first and refunding mortgage 5% bonds, Series I. This aggregate amount is 6.78% of all railroad bonds offered and is less than 2.1% of the total of all classes of securities offered by J. P. Morgan & Co. in this period. GROUP III. Public Utility Bonds. Including Obligations of Public Utility Holding Companies. The aggregate principal amount offered to the public is 81,074.750.000. Of these $268,269,800, or 25%, have been retired, in the main, by con- version, by redemption at'prices ranging from 105% to 110% or by payment at maturity. PI There remain outstanding of the bonds so publicly offered 8806,480,200 in principal amount. Of these bonds $693,480,200 in principal amount, or 86%, on May 11 1933 were selling above the public offering price. The average price at which these bonds were offered to the public was 97.08%; the average current market price on May 11 1933 was 95.68%, a decline of 1.4 points. None of these bonds is in default in the payment of principal or interest. GROUP IV. Industrial Company Bonds and Industrial Company Preferred Stock. The aggregate public offerings in this group amount to $578,297,900. Of these securities 8397,046,700, or 69%, have been retired, again mainly by redemption at prices ranging from 1004% to 125%. 3652 Financial Chronicle May 27 1933 Baldwin Locomotive Works. Kennecott Copper Corp. There remain outstanding bonds and preferred stock to an aggregate Louisville & Nashville RR. Co. Barber Asphalt Co. amount of $181,251,200. Marland 011 Co. Bethlehem Steel Co. Of these $123,208,000, or 68%, on May 11 1933 were selling above the Montgomery Ward dr CO. General Steel Castings—construction New York Central RR. Co. account. public offering price and $42,187,000, or 23%, were selling, within 10 Kent (Atwater) Manufacturing Co. Niagara Hudson Power Corp. points of the public offering price. Northern Pacific RR. Co. Keystone Watch Case Co. Industrial company bonds and preferred stock now outstanding, which Lehigh Valley Coal Co. Pere Marquette fly. Co. were offered to the public, were offered at the average price of 99.28%. Pullman Car and Manufacturing Corp. Lehigh Valley RR. Co. The Midvale Co. Royal Baking Powder Co. The average current market price on May 11 1933 was 99.07%. a decline Southern fly. Co. Phila. dr Reading Coal and Iron Co. of about two-tenths of a point. Standard Brands, Inc. Reading Co. There has been no default in the payment of principal or interest on Reading Iron Co. Standard Oil Co. of New Jersey. these bonds or in the regular payment of dividends on the preferred stock. Texas Gulf Sulphur Co. Standard Brands, Inc. United States Steel Corp. United Gas Improvement Co. GROUP V. And the next page is Drexel & Co.: Senator Couzens—For what period were those average balances? For Municipal Bonds. how long? The amount of public offerings in this group aggregates $160,000,000. Mr. Morgan—It has an average daily balance of $1,000,000 or over Of these, $1,000,000 have been retired and the balance remains outstanding. during any year of the period. The average public offering price was 101.64%. Senator Couzens—For the whole year? The average current market price on May 11 1933 was 82.83%, a decline Mr. Morgan—Yes, sir. of about 18.8 points. Senator Gore—These are mostly concerns on whose boards of directors None of these bonds is in default in the payment of principal or interest. appear some of the names of your partners, largely? GROUP VI. Mr. Morgan—Very probably. I might say that they are all companies Railroad Holding Company Bonds. for which we worked. Mr. Pecora—These corporations for the most part are corporations that These aggregate $133,000,000, or 2.21% of the total public offerings of. your firm has been financing for in the past, is that right? securities made by my firm since Jan. 1 1919. Mr. Morgan—Yes. Of these, $11,968,000 have been retired. The balance, namely, $121,Mr. Pecora—Now, have you caused to be prepared a list of all corpora032,000 are selling substantially below the public offering price. The tions maintaining demand deposit accounts with your firm with a balance average public offering price of these bonds was 97.25% and the average of a of about 50.94%, decline $100,000 or more? current market price on May 11 1933, was Mr. Morgan—I think we have. 463. points. Mr. Davis—Mr. Pecora, I think we have that, if you will just give me None of these bonds as yet is in default in the payment of principal or a minute. Interest. Employs No Bond Salesmen. Mr. Pecora,—You may go ahead and answer the question, Mr. Morgan. J. P. Morgan & Co. employ no bond salesmen and have never adopted Mr. Morgan—Corporations engaged in inter-State commerce having an any methods of high-pressure salesmanship. We have distributed these average yearly balance of $100,000 or over during any year of the period consisting in cases of the from Jan. 1 1927, to Dec. 31 1931, inclusive: securities through syndicates or selling groups largest issues of as many as 1,100 or 1,200 retail and distributing houses, "Acewood Petroleum Corporation"— large and small, scattered throughout the country, and invited by us to Senator Gore (interposing). Mr. Chairman, is it necessary to have that read? Could it be inserted? join in the offering of these securities because of their distributing ability Mr. Pecora—Suppose I offer in evidence the lists of such names as have and their standing and reputation in their own communities. We have bebeen furnished to me by the firm of J. P. Morgan & Co. I will offer in lieved in this method of distribution and have consistently adhered to it. evidence the actual comments which the firm furnished me. Of the issues now in default, namely, bonds of the Florida East Coast In order to complete the record the balance of the names on the list of Railway, and of the Mobile & Ohio Railroad, and of the Missouri Pacific $100,000 or over is here copied as of: Railroad, we ourselves purchased and still hold bonds of those issues or of Hercules Powder Co. All American Cables, Inc. issues junior to them on which our aggregate losses, based upon the difAllied Power and Light Corp. of Delaware Hocking Valley Ry. Co. ference between our purchase price and the present market value, are The American Brake Shoe & Foundry Co. International Harvester Co. greatly in excess of the profit that we made from these offerings. American Car & Foundry Securities Corp. International Mercantile Maria Co. In the case of securities of railroad operating companies and public utility International Standard Electric Corp. American Tobacco Co. Amoskeag Mfg. Co., D. W.Jarvis, agent. The Koppers Co. of Delaware. operating companies, the price paid to the obligor is a matter of public Long Dock Co. Associated Dry Goods Corp. record. MacLeod & Co., Inc. Atlantic Coast Line RR. Co. In the case of the foreign issues offered by us since Jan. 11920, the price Magna Copper Co. Atlantic Transport Co. Maracaibo 011 Exploration Corp. The Babcock dr Wilcox Co. paid to the obligor was made public by us in the testimony submitted to the Marsh & McLennan, Inc. Bendix Aviation Corp. Senate Finance Committee in December, 1931. Merchants The Borden Co. Despatch Transportation Co. during the five-year period from Jan. 1 1927, to In the case of all issues Missouri Pacific RR. J. I. Case Co. Jan. 1 1932,the spread between the price paid to the obligor and the offering Mobile & Ohio RR. Co. Celluloid Corp. Mother Lode Coalition Mines Co. Cerro de Pasco Copper Corp. price to the public has been given in the detailed record which we have furNew England Car Co. Chile Copper Co. nished the Committee. The New England Steamship Co. RR. Co. Cincinnati Northern We are not opposed to, but are heartily in favor of publicity and disThe Cleveland, Cincinnati, Chicago & The New York, New Haven & Hartford closure of the gross profit or commission paid in respect to all securities RR. Co. St. Louts By. Co. The Colorado & Southern KY. Co. Northwestern Improvement Co. offered to the public, as is proposed by the legislation which you are now Peabody Coal Co. Columbia Phonograph Co., Inc. considering. Penn-Ohio Edison Co. The Commercial Cable Co. As to the group of bonds which have shown the greatest declines, namely, Penn Coal Co. Congoleum-Nairn, Inc. Phelps Dodge Corp. railroad and railroad holding companies, it may be pertinent to point out Continental Can Co., Inc. Copper River & Northwestern fly. Co. The Procter & Gamble Co. that, in the case of the railroad issues, every issue of bonds of a railroad Pullman, Inc. The Cream of Wheat Corp. operating company issued after June 27 1920, was authorized by the InterFA. Joseph Lead Co. The Cream of Wheat Sales Co. Scoville Manufacturing Co. State Commerce Commission as being in the interest of the public and a Crowell Publishing Co. Jacques Seligman & Co., Inc. Detroit River Tunnel Co. minimum price fixed at which these bonds could be sold; and in the case of Simms Petroleum Co., Inc. Diamond Power Specialty Corp. the railroad holding company issues, which were all collateral trust issues Standard 011 Co. of New York, Inc. Eastman Kodak Co. of New Jersey. secured by stocks or bonds or obligations of railroad operating companies, Standard Steel Car Corp. Federal Steel Co. Stonega Coke and Coal Co. The Firestone Tire & Rubber Co. the collateral behind the bonds at the time of the issue and the financial Sulphur Export Corp. The Fleischmann Co. strength of the company making the issue seemed to afford more than Terminal RR. Association of St. Louis. Fort Worth & Denver City By. Co. ample security. The Texas & Pacific Ky. Co. Samuel Fox's Sons, Inc. United Cigar Stores Co. of America. General Motors Acceptance Corp. United Verde Extension Mining Co. General Steel Castings Corp. West Publishing Co. Inquiry Into Affairs of J. P. Morgan & Co. by Senate The B. F. Goodrich Co. West Virginia Pulp and Paper Co. Brothers Corp. Committee Investigating Stock Market Operations Graham Westmoreland Coal Co. Grover Co., Inc. —List of Incorporations Maintaining Daily Balance HartfordLoening The Yale & Towne Manufacturing Co. Fire Insurance Co. of $1,000,000 or Over—Supplementary List of Corporations With Yearly Balance Averaging $100,000 or More. In its record of the testimony of the hearing of J. P. Morgan on May 23 by the Senate Committee inquiring into the affairs of Mr. Morgan's firm, the New York "Herald Tribune" gave the following account, from its Washington bureau, of the presentation of a list of corporations having a daily average balance of $1,000,000 or more with J. P. Morgan & Co., and those with an average yearly balance of $100,000 or more. Mr. Pecora [Counsel for the Committeel—Mr. Morgan, have you prepared a list at the request of counsel for the committee, or has your firm caused such a list to be prepared, showing the name of all corporations maintaining demand deposit accounts with your firm with balances averaging one million dollars or more? Mr. Morgan—Yes we have done this. I believe. Mr. Pecora--Will you produce the list? Mr. Morgan—This is for J. P. Morgan & Co., and this does not involve Drexel & Co., or anything else. Mr. Pecora—All right. Mr. Morgan—It says: Corporations engaged in inter-State commerce having an average daily balance of $1,000,000 or over during any year of the period from Jan. 1 1927, to Dec. 31 1931, inclusive: The Commonwealth and Southern Corp. Alaska Development and Mineral Co. Continental 011 Co. of Delaware, Alaska Steamship Co. E. L. du Pont de Nemours & Co., Inc. Allegheny Corp. Erie RR. Co. American Car and Foundry Co. American Telephone and Telegraph Co. General Electric Co. The Atchison,Topeka & Santa Fe fly. Co. General Mills, Inc. General Motors Corp. Celanese Corp. of America. Humble 011 and Refining Co. The Chesapeake & Ohio Sty. Co. Chicago, Burlington & Quincy RR. Co. Ingersoll-Rand Co. Tele. and Telegraph Corp. International Indiana RR. Co. Western at Chicago The Cincinnati, New Orleans & Texas Johns-Manville Corp. The M. W. Kellogg Co. Pacific Ky. Co. Inquiry Into Affairs of J. P. Morgan & Co. by Senate Committee Investigating Stock Market Operations —List of Directorships Held by Members of Morgan and Drexel Firms. During the hearing in Washington on May 23 by the Senate Banking and Currency Committee into the operations of J. P. Morgan & Co., the following list according to the Washington account to the New York "Times" of directorships or trusteeships held by members of the Morgan firm was given to the Senate committee: Banks and Trust Companies. THOMAS W. LAMONT—Guaranty Trust Co., director. THOMAS COCHRAN—Bankers Trust Co., director. GEORGE WHITNEY—Bank for Savings of the City of New York, director or trustee; Guaranty Trust Co. of New York, director. ARTHUR ANDERSON—New York Trust Co., director. WILLIAM EWING—Bankers Trust Co., director. H. P. DAVISON—New York Trust Co. Industrial Corporations, J. P. MORGAN—United States Steel Corp., First Security Co., Discount Corp. of New York, Pullman, Inc., and Pullman Co., Aetna Insurance Co. of Hartford and two subsidiaries, Century Indemnity Co., World Fire and Marine Insurance Co. E. T. STOTESBURY—Reading Co. and its three subsidiaries, Now York & Long Branch By. Co., Philadelphia & Reading Terminal RR. Co. and Philadelphia, Newtown & New York RR. Co.; Beaver Coal CO.. Lehigh & Hudson River By. Co., New York & Middle Coal Field RR. Co.; Second & Third Street Passenger fly. Co., Transportation Mutual Insurance Co., Highland Coal Co., Wyoming Valley Water Supply Co., National Storage Co , Bellevue-Stratford Hotel Co. CHARLES STEELE—Atchison, Topeka & Santa Fe By. Co., Cerro de Pasco Copper Corp. Volume 136 Financial Chronicle 3653 No. of Shares. NameCorp., Northern Pacific 1.000 Secretary of the Navy Adams, Francis THOMAS W. LAMONT-United States Steel Charles Corp., Texas Gulf& Sulp'r 1,000 Publishing Co., First Security W.H. Aldridge, director Johns-Manville Ry. Co.. Chicago & Erie RR. Co., Crowell Guaranty of America, Co. m Lamont, Aluminu Agricultural Corp., George G. Allen, director 500 Co. of the City of New York, International Trust Co., Texas Co National Railways of & Co., director Inter- 11,500 CorlIss & Co.; Southwestern Construction Co., M. Anderson, partner J. P. Morgan Arthur Coryi. Investing Securities Cable h & Telegrap el Corp., Postal national Tel. & T. Mexico, Foreign Finance Corp., American 100 Co. and its subsidiaries, Montgomery B. Angell 300 HORATIO G. LLOYD-Philadelphia Electric Auchincloss Power Howard nna J. Susqueha and Co. 500 Power which are the Philadelphia Electric Austin A. Chellis First Security Co. of Pennsylvania, Diamond George F. Baker, director First National Bank, Co.; General Asphalt Co., Bell Telephone Co. 10,500 of N. Y., New York Central States Telephone Co. of War, director Baltimore Secretary former Baker, D. Intery, Newton subsidiar its and Co. Electric ral N-Gene THOMAS COCHRA & Ohio RR 2.000 000 Copper Corp. and its D. S. Barnett Jr national General Electric Co., Inc.; Kennecott 11,500 Co., Braden Copper Co., F. D. Bartow, partner J. P. Morgan & Co subsidiaries, Copper River & Northwestern By. Mineral Co., Nevada F. D. Bartow, special Tel., All America Cables, Alaska Steamship Co., Alaska Development and Sosthenes Behn, director Int. Tel. & Finance Corp., Ameri3 G°0 1:000 Northern Ry. Co., Astor Safe Deposit Co., Foreign General Sugar Corp 1.000 & Co., 44 Wall St Beldon partner Beldon, V. s L. Co. Securitie Foreign can Ohio RR., Pere & ke Chesapea director Bench, Case Corp., Mary Mrs. General Motors 500 J. S. MORGAN-United States Steel Corp., Marquette RR 5,000 J. J. Bernet Foreign Finance Corp. Trust, Bankers Co., Copper t Copper Kennecot t director Kennecot Stephen Birch, RR.,Northern Pacific RR. 1.000 GEORGE WHITNEY-General Motors Corp., Chicago Burlington & Quincy RR.,Erie Steamship Co., Alaska Co., Metropolitan Opera and Corp. and its subsidiaries, which are the Alaska C. N. Bliss, director Bankers TrustInsuranc River & Copper e Co., New York New Co., Life Copper York Real Estate Co., New Development and Mineral Co., Graden Consolidated Gas Co., Haven & Hartford RR., Radio Corp. of America 1.000 10 0°° Northwestern Ry. Co. and Utah Copper Co., United York y, New Bonbright & Co 7,500 New York Edison Co., United Corp. and its subsidiarPullman Co., JohnsCharles Bradley, director Saranac Realty Co 2,000 Corp.; Texas Gulf Sulphur Co., Pullman, Inc., and Corp., New Jersey Nicholas F. Brady n Co., Inc., Aviation Finance Matthew C. Brush. director Air Reductio Manville Corp., Continental Oil Co., Foreign 1.000 Exchange Assurance Corp., Bank of Manhattan Trust Co & Hartford RR., & New York RR. Co., American Branch of Royal Haven New York New director States , United Ltd.; E. G. Buckland Co.. e 500 Western Insuranc & General Ontario and Car ies, York its subsidiar and Railway Express Agency, New Assurance Co., Ltd., House Association, Branch, Provident Fire Insurance Co., and State M. N. Buckner, director New York Clearing 500 Investing Securities American Co New York Trust United States Branch, Willow Corporation. 500 Rico Sugar Co W. E. Burnet, director Southern Porto Bank & Trust Co.. Corp. William 0. Cannon, director First National InterCo., By. Pacific rn Montclair. N. J RUSSELL C. LEFFINGWELL-Northe es. All America Edward F. Carey 1. 2 2: 5 0 national Telephone and Telegraph Corp. and its subsidiari : North British and Bernard S. Carter Corp.; 2,500 Cable and h and Postal Telegrap Inc., Cables, J. Ridgely Carter h of New York, Catto Mercantile Insurance Co., Ltd., of London and Edinburg S. Thomas Sir 1,000 Hendon Chubb and its subsidiary, Mercantile Insurance Co. of America. 2,000 American Radiator Clark, Dodge & Co Co & Morgan P. FRANCIS D. BARTOW-Johns-Manville Corp., J. partner Thomas Cochran, Willow Corp., 2,000 and Standard Sanitary Corp., 150 William Street Corp., Co., United Thomas Cochran 500 Co., U. S. Guaranty Co.. 1.0 Electric Clinton H.Crane, director St. Joseph Lead Home Life Insurance Co., International General Macy, H. R. Bank, Savings Bowery Donald K. David, director Electric Securities Co. Inc Brands, Standard e e and Telephon of America, Marine MidARTHUR M. ANDERSON-International Telephon Arthur V. Davis, director Aluminum Co. 1,000 h Co.; United States land Corp., Mellon National Bank of Pittsburg Corp. and subsidiary, Postal Telegraph and Cable General Co., Davis RR. W. John 2,500 Co Guarantee Co., New York, Susquehanna & Western & Morgan P. J. H. P. Davison, partner Foreign Finance Corp. 500 Corp. of New York- _ Steel Castings Corp., Western Pacific RR. Corp., E. B. Dibrell, director Associated Dry Goods Copper Co., J. I. Dominick & Dominick 4 : 2 ;8 50 0 WILLIAM EWING-Standard Brands, Inc., Utah Drexel & Co Corp. and of Lord 500 Case Threshing Machine Co., Associated Dry Goods Caleb C. Dula American Co., e Co. ton Insuranc Life -Washing itan d Metropol & Taylor, a subsidiary; Richmon F. H. Ecker, director 1,000 York Corp., Niagara Express Co., Chase National Bank of New HAROLD STANLEY-Columbia Gas and Electric Ward Co., Johns-ManYork United George B. Everitt, director Montgomery New y, subsidiar and Corp. Power Corp.. United Hudson ville Corp 0 0° 5° 10,0 & Co Corp. William Ewing, partner J. P. Morgan 30,000 is a director) subsidiaries, the First Securities Co.(of which J. P. Morgan 000000000 10,000 , 1, HENRY S. MORGAN-Kennecott Copper Corp. and Motors Corp Lawrence P. Fisher, director General Utah Copper ke & Ohio_ Braden Copper Co., Copper River & Northwestern Ry. Co., Herbert Fitzpatrick, director Pere Marquette, Chesapea Inc Co. and Alaska Steamship Co. Ma's C. Fleischmann, director Standard Brands, 1,000 Cone Corp., Follansbe D. Mitchell T. S. LAMONT-Texas Gulf Sulphur Co., Phelps Dodge Indemnity Co., Newark Fire InH. A. Fortington, director GlobeCo 500 tinental Oil Co., Great Lakes Pipe Line Co. surance Co., Royal Indemnity Mercantile Marine, & Co. P. A. S. Franklin, director International H. P. DAVISON-Standard Brands, Inc., Montgomery Ward 1,000 subsidiaries, National City Bank of New York THOMAS NEWHALL-Baldwin Locomotive Works and W. C. Frew Co., 1,000 5°° the Midvale Co., Baldwin-Southwark Corp.. Standard Steel Works Fummi Giovanni RR., Pittston Co.. Co., FedMichael Gallagher, director Pere Marquette Southwark Foundry and Machine Co., Whitcomb Locomotive 1,000 Morris P. Cleveland 500 eral Steel Foundry Co., Cramp Brass and Iron Foundry Co., I. GenGeorge H. Gardiner 200 and De La Vergne, Inc., and Baldwin Locomotive Securities Corp., Thomas Garrett 500 Corp. CoIron Aeolian Co., Trust urers and Manufact Coal Readng eral Steel Castings Corp., Philadelphia and Harvey D. Gibson, director American Tel. & Tel., the Bank for Sharp & Co., director Iron Gifford, and S. Coal Walter Reading y, and subsidiar Philadelphia and 1,000 • Corp Steel S. Savings, U. 500 Dohme, Inc. Mrs. S. Parker Gilbert y, New Investors, Inc., Guaranty Philip G. Gossler, director American EDWARD HOPKINSON, JR.-United Corp and subsidiar 1,000 Corp Fire United ania York, Trust Co. of New York United Corp.; United Gas Improvement Co., Pennsylv Guaranty Trust Co. r RY• Eugene C. Grace, Bethlehem Steel Corp., 1,000 Insurance Co., Frankford & Southwark Philadelphia City Passenge of New York Ry. 500 Coal Co passenger Valley Street Lehigh Bros.. Co., Keystone Watch Case Corp., Second and Third R. F. Grant, director Burns 1,800 subsidiaries, London Co.. and renfell Morgan-G Co. Grenfell, Electric C. E. hia Co., Riverside Metal Co., Philadelp nna York New Susqueha Guaranty Co. of 1,600 50° Philadelphia Electric Power Co., Susquehanna Power Co.and GuarantyCo. of New York 1.000 Electric Co., Public Service Corp. of New Jersey. W. J. Ilanahan , Terminal District Lehigh Eastern y, Brooklyn subsidiar director Horace Havemeyer, _ Arms S. PARKER GILBERT-Lehigh Valley Corp. and n 1.000 Co__ Remingto Delaware Lackawanna & Western RR., Co., American Express Valley Coal Sales Co. Charles Hayden, director Adams Express 2,000 Philadelphia and subsidof on Coca-Cola Co. and seventy other large companies Associati Co., -Fire DICKEY S D. 1,200 CHARLE Victory Insurance Co. Michael G. Herbert Co., & Refining iaries, Reliance Insurance Co. of Philadelphia and Smelt American director Charles D. Hines, Co., Sharp & Dohme, Life Insurance o. and Republican York New of Philadelphia; Beaver Coal Co., American Pulley Co., Trust Bankers Improvement Co. 1.000 National Committeeman for New York State Inc., Stonega Coke & Coal Co., United Gas 500 Hitt, Farwell & Co., 1 Wall St., New York adelphia & Reading Coal and Cleveland Builders RR., Erie Lake & ARTHUR E. NEWBOLD, JR.-Phil Union director Iron House, Co.: A. & J. Coal Reading & hia 1,000 Philadelp Co Rubber & y, Tire Iron Corp. and subsidiar Supply Co.. Goodyear & Southern Corp., Coal Co. and Jeddo-Highland George H. Howard, director Commonwealth Foreign Markle Corp. subsidiaries, Hazle Brook Power Co., and Wilkes-Barre Corp. Electric Bond & Share Co., American & 1,000 Coal Co., Wilkes-Barre & Hazleton Corp. President United Corp Hires Co., Markle Corp. and lmers Mfg. Co., J. G. White Allis-Cha director , G. R. Hutchins H. GATES LLOYD, JR.-Charles E. Co. Coal RR 1,000 ghland Hartford & Jeddo-Hi Haven New York and Engineering Co., New subsidiaries; Hazle Brook Coal Co. & Quincy RR., Arthur Curtiss James, director Chicago BurlingtonCorp RR. Co., Philadelphia Steel and Dodge Phelps. York, of New Co. PERRY E. HALL-Northern Pacific First Security 1°00 1.000 Pecy H. Johnston Wire Corp. 2,500 Nelson D. Jay Valley Coal Sales Co., Debardele2,500 EDWARD H. YORK, JR.-Lehighsubsidiary, Basle Brook Coal Co.; Joy Benjamin and Copper Chile ben Coal Corp., Markle Corp. Cornelius F. Kelley, director Anaconda Copper Co., and Bee Line Transportation Co. Co., Guaranty Trust Co Franklin County Coal Corp., Inc., 2,000 Kidder, Peabody & Co 5,000 Kuhn, Loeb & Co 2.500 partner S. Lamont, Morgan & Co. by Senate Thomas 18,000 W. Lamont, Morgan partner Thomas Inquiry Into Affairs of J. P. Morgan 500 g Tradin Market ion Stock Lapondos Corporat Committee Investigating 2,000 any Corpo- Lee, Higginson & Co 13.500 List of Those Offered Stock of Allegh B. C. Leffingwell, Morgan partner 500 Augustin Legoretta ration Below Market Price. 500 Colonel Charles A. Lindbergh of the stock n commo of 1,000 issue brokers Co.. an roke & in Lindley partner ants senior A. L. Lindley. A list of particip directors F. L. Carlisle ident and d , Vice-Pres E. MacHold was Henry & Co. Morgan P. J. 2,000 Alleghany Corporation through & Co., director Marine Midland Co 1,000 & Cable Co tee inquiring into Clarence 11. Mackay, Chairman Board Postal Teleg. put into the record of the Senate Commit committee Johns-Manville executive , E. Chairman H. Manville ed was embodi list The 1,000 house. banking the ion of Corporat the operations A. Martins. partner Tolles, Hogsett & Ginn (Allegheny ing to the New York Henry 500 Corp. lawyers). Vice-President and director Chesapeake Corp.._ in the following statement (accord the Banking William Gibbs McAdoo, now Senator from California, former 500 "Times") by Ferdinand Pecora, counsel for Secretary of Treasury 100 Lee McCanliss of Davis, Polk, Wardwell. Gardner & Reed Committee: 1,000 H. C. McEllowney Corporation issued 3,500,000 shares of its 500 h W. McGarra On Feb. 1 1929 the Allegheny Gates 1.000 Co. purchased 1,250,000 at $20 T. N. McCarter common stock, of which J. P. Morgan & 1,000 Feb. 15 1929 J. P. Morgan & Co. sold D. H.McLennan 6,000 per share. Between Feb. 1 and the following to . share . price of $20 per cost the at 2.000 shares 1,250,000 these T. F. Merseles Albert G. Milbank, member firm Milbank, Tweed, Polk & Webb. -selected list": 500 attached, the prices at that time ranged director Borden & Co., Chase National Bank As shown by the quotations 500 . Exchange Stock York Edward G. Minor New the on $35 10.000 Y_ between $31 and N. of Bank City National President former Mitchell, Charles B. follows: list The 3654 Financial Chronicle May 27 1933 NameNo. of Shares. S. Z. Mitchell, Chairman Electric Bond & Share, Morgan partner_ 2,500 share, 613 to $17 below the market price at the time of Daniel J. Moran 500 the offer. The New York "Times", from whose WashingHenry S. Morgan, Morgan partner, son of J. P. Morgan 4,100 ton advices May 24 we quote, stated that Mr. Woodin J. P. Morgan 40,000 P. Morgan J. & Co., stock account 175,100 accepted the offer, sending his check for $20,033.33 in Junius S. Morgan Jr.. partner J. P. Morgan & Co 8,000 J. R. Morron, Chairman executive committee Chicago & Alton payment. Mr. Woodin, who is now Secretary of the TreasRR., director Baltimore & Ohio RR., Pullman Co., First Securities Co ury, was in 1929 President of the American Car & Foundry 500 Frederick K. Morrow, President, director United Cigar Stores, Co. The letters placed in the Senate records on May 24 Vice-President, director Gold Dust Corp 1,000 John P. Murphy 500 were given as follows in the Washington dispatch that date National City Co 10,000 Newmont Mining Corp., Albert G. Wiggin director. Margaret T. to the New York "Herald Tribune": Biddle, S. E. Dodge 10,000 J. R. Nutt, Vice-President Allegheny Corp 3.000 J. P. MORGAN & CO. Robert E. Olds 500 Carlo Oral Feb. 1 1929. 500 General John J. Pershing Photostat Department (File Copy) 500 Frank L. Polk, partner Davis, Polk, Wardwell, Reed 300 & J. Co. P.M. W. C. Potter, President and director Guaranty Trust Co., director Atchison Topeka & Santa Fe RR 40,000 William H. Woodin, Esq., care American Car & Foundry Co.. 30 Church St.,. Seward Prosser et al., member executive committee and director Bankers Trust Co New York. 12,000 William S. Rainsford 100 My Dear Mr. Woodin:-You may have seen in the paper that we recently John J. Raskob 2,000 made public offering of $35,000,000 Allegheny Corporation 15-year collatLansing P. Reed. partner Davis, Polk, Wardwell, Reed 300 Samuel W. Reyburn, President, director American Dry Goods eral trust convertible 5% bonds, which went very well. Corp. of New York 500 In this connection the Guaranty Co.offered to-day 325,000,000 Allegheny W. L. Ross 1,000 Corporation cumulative 534% preferred stock. There was also strong John D. Ryan, director Anaconda Copper Co., director National demand for this stock. City Bank 1,000 Franz Schneider Jr., director Lehigh Valley Coal Co The Guaranty Co. also sold, privately, some of the common stock at 500 Schoelkopf, Hutton & Pomeroy, Inc 1,000 $24 a share. John Sherwin Sr 5,000 We have kept for our own investment some of the common stock at a E. H. H. Simmons, member of firm. 52 Broadway 1,000 cost of $20 a share, and, although we are making no offering of this stock, Alfred P. Sloan Jr., President General Motors Corp 10,000 Matthew S. Sloan as it is not the class of security we wish to offer publicly, we are asking 500 Vivian H.Smith 3,000 some of our close friends if they would like some of this stock at the same F. S. Smithers Sr Co 1,000 price it is costing us, namely, $20 a share. Somerset Corporation 10,000 I believe that the stock is selling in the market around $35 or $37 a Harold Stanley, partner J. P. Morgan & Co 10,000 Charles Steele, partner J. P. Morgan & Co share, which means very little, except that people wish to speculate. 14.000 Charles Steele, special 1,000 We are reserving for you 1,000 shares at $20 a share, if you would like G. D. Steers 2,000 to have it. John A. Stephens Jr 500 Frederick Strauss, partner J. St W. Seligman There are no strings tied to this stock,so you can sell it whenever you wish. 1,000 Silas H. Strewn 1,000 For further information regarding this corporation, I am enclosing Edwin S. Sunderland, partner Davis. Polk, Wardwell. Reed 300 circular covering the bond issue. Myron C. Taylor, Chairman finance committee board of directors We just want you to know that we are thinking of you in this connection United States Steel Corp 10,000 Walter C. Teagle, President, director Standard 011 Co. of N. J and thought you might like to have a little of the stock at the same price 1,500 Joseph B. Wardell 500 we are paying for it. William B.Thompson 1,000 I am sending this to your office, as I understand that you are now on 0. P. Van Sweringen 2,500 Your Allen Wardwell, partner Davis, Polk, Wardwell, Reed way through the Panama Canal, but this can wait until you return. 300 F. Edson White Hoping you are having a pleasant trip and with best regards, 2,000 Robert H. White, partner Asiel & Co 1,000 Sincerely yours, White & Case...,,. 1,000 We-Ems Enc. George Whitney, Morgan partner 14,000 York New Stock Richard Whitney. President (Handwritten Note) From file designated: "Allegheny CorporationExchange 1.000 C. F. Whigham January 3 '29-Sale of Common Stock." 3,000 A. H. Wiggin,former Chairman of board Chase National Bank_ _ _ _ 10,000 Second letter: Ira E. Wright 500 J. P. MORGAN & CO. Joseph Wilshire, President. director Standard Brands, Inc., President. director Royal Baking Powder Co '1.000 Photostat Department (File Cop.) Wood,Struthers & Co 1;000 J. P. M.& Co. William H. Woodin. Secretary of the Treasury 1,000 Clarence M. Wooley. Chairman of board American Radiator & Feb. 25 1929. Standard Sanitary Co 1.000 William H. Woodin, Esq.. care American Car & Foundry Co., 30 Church St., Owen D. Young, Chairman board General Electric Co 5,000 New N. Y. York, L. Edmund Zacher_ 500 William Zeigler, director Standard Brands, Inc Dear Sir:We acknowledge, with thanks, the receipt of your check to our 200 order for $20,033.33 in payment for 1.000 shares of Allegheny Corporation Total--------------------------------------------------- 1,250,000 common stock (as par value) at $20 a share, plus interest from Feb. 15 to Shares Allotted to Drexel & Co. date. We have deposited in your account the above stock, in temporary form, The 50,000 shares of stock which were allotted to Drexel & Co. of Philaregistered in our nominee's name. delphia were distributed at $20 a share as follows: Yours very truly, NameNameNo. of Shares. No. of Shares. gyn.-JJC-OMW (Rubberstamp). 500 Howard Loeb Thomas G. Ashton 100 Mailed Feb. 25 1929, J. P. M.& Co. 500 Edward E. Loomis W. W. Atterbur7 500 (Handwritten Note)-From file designated: "Allegheny Corp.-Jan. 31 200 George H.McFadden & Bro_ 1.000 Thomas J. Baldridge 100 Andrew J. Maloney Charles W. Bayliss 1929 -Sale of common stock." 300 400 Donald Markle Charles G. Berwind 500 600 John C. Martin Harry A. Berwind 1,000 500 John H. Mason Samuel T. Bodine 200 200 Marshall S. Morgan William W.Bodine Inquiry Into Affairs of J. P. Morgan & Co. by Senate 200 100 Effingham B. Morris Jr Francis B. Bracken 200 Committee Investigating Stock Market Trading200 Arthur V.Morton Henry G. Brengle 200 50 Jonathan C. Neff Arthur S. Burgess Testimony of Mr. Morgan and George Whitney200 B. Dawson Coleman 500 A. E. Newbold 2,000 Statement by Leonard Keyes Indicates No Income Jay Cooke 1,000 C. Stevenson Newhall 100 Tax Was Paid by Morgan Partners in 1931 and 1932 D. Graham Craig 100 T.Newhall 4,000 Samuel M.Curwen 500 Richard E. Norton 200 -British Taxes Paid-Loss of $21,000,000 Shown Charles Day 500 W.A. Obdyke 2,000 -Big Taxes Paid in United States in 1929-Clients Margretta B. Dice 500 Charles S. W Packard 200 Drexel & Co 900 George Wharton Pepper-___ Offered Allegheny and Standard Brands Stocks 200 Sophie H. Drinker 100 0. H. Perry Pepper 100 Under Market Price-Loans to Bankers. William N. Ely 200 Evan Randolph 200 Charles H. Ewing 100 E. Robert Biter 100 An inquiry into the operations of J. P. Morgan & Co. as Philip H. Gadsden 250 Ovrne J. Roberts 100 Estelle B. Gadsden 250 Benjamin Rush 500 private bankers was begun in Washington on May 23 by the T.S.Gates 4,000 Bernard Samuel 50 Clarence H. Geist 600 William J. Schaffer Senate Committee conducting the stock market investiga500 William P.Gest 500 Harold S. Schutt 200 tion. The intention of the Committee to turn Its attention Herbert W. Goodall 100 Frank Seamans 100 Alfred M. Gray 100 Arthur W. Sewall 300 to the affairs of private banking houses was made known John H. Gross 200 E. T. StotesburY 4.000 Harry J. Haas 200 George H. Stuart 3d several 200 weeks ago by Ferdinand Pecora, Counsel for the subEdward Hopkinson Jr 4,500 Frank H. Taylor 50 George H. Houston committee of the Senate Committee on Banking and Cur200 Samuel M.Vauclain 500 Albert A. Jackson 200 Robert Von Moschzisker____ 150 rency. J. P. Morgan was the first to be heard by the ComLivingston E. Jones 300 Carroll J. Waddell 100 John W. Kephart 300 Samuel D. Warriner 1,000 mittee with the start of the hearings this week on private William T. Kirk 100 Joseph Wayne Jr 300 Louis J. Kolb banks, and a prepared statement submitted to the Committee 500 John H. Weaver 300 Conrad N. Lauer 300 James M. Wilcox 500 by Mr. Morgan at the outset of the hearing on the duties and William A. Law 500 Edward H. York Jr 100 Edward B. Leisenring 1,000 John E.Zimmerman 500 uses of private bankers is given elsewhere in our issue toCharles P. Lineaweaver 200 H. G. Lloyd 4,000 day. Likewise we give in another item a consolidated stateE.G. Lloyd Jr Total 1.000 50,000 ment of condition of J. P. Morgan & Co. and Drexel & Co. --40-- Inquiry InteAffeirs of J. P. Morgan & Co. by Senate low Committee Investigating Stock Market TradingLetter Addressed to William H. Woodin in 1929 ^" by William Ewing Offering Stock of TAlleghany F- Corporation Below Market Price. At the Senate Committee hearings in Washington this week into the operations of j. P. Morgan & Co. there was put into the records on May 24 a letter addressed to William H.1.Woodin in 1929 by William Ewing of the Morgan firm extending to Mr. Woodin an offer to buy 1,000 shares of the commoestock:of the Alleghany Corporation at $20 a for the years 1927-1932, which was presented to the Committee by Mr. Morgan. Various other data, which were inserted into the Senate record during the week, are also published in the current issue of our paper under separate heads. Mr. Morgan was subjected to extended questioning during his appearance before the Committee during the week-the appeared before the Committee on Tuesday, May 23, and each day since-and notwithstanding the antagonism displayed at times by his interrogators, Mr. Morgan's attitude remained calm and unruffled. The hearing was conducted by Ferdinand Pecora, Counsel for the Senate Committee. With the Volume 136 Finan :ial Chronicle its report opening of the hearing on May 23 the "Times" in • from Washington said: whose slight The Committee was present en mane. Senator Fletcher, on Mr. Fletcher's voice was occasionally heard, was Chairman. Mr. Glass sat snapping and banging on left and slumped in his chair when he was not particularly impressed the table; Mr. Couzens, wealthy and obviously not Senators regarded by Mr. Morgan, across the way, as two or three other of Senator Mcthe banker with the most deferential gaze; the thin form the Treasury, Adoo, as in the case of Mr. Glass, another former Secretary of the fullest at the foot; Senators Byrnes, Gore, Bulkley and others—quite of the attendance at any hearing of the Committee in some time. Some Mr. Glass, sturdiest supporters of Mr. Morgan, it was observed, were, like Democrats. W. With Mr. Morgan, said the same advices, were John ; Davis, the former Democratic candidate for President Thomas W. Lamont, Thomas S. Lamont, George Whitney and Russell O. Leffingwell, partners. At the first day's hearing (May 23), it was revealed that Mr. Morgan and his associates paid no income taxes in 1931 and 1932. • Regarding the hearing on that day the Washington correspondent of the New York "Journal of Commerce" said: 1931 Mr. Morgan's admission that he paid no income taxes for 1930 and firm. was borne out by testimony of Leonard Keyes, office manager of the Mr. Reyes stated that the twenty partners of the firm paid no income less taxes in 1931 and 1932 and that their returns in 1930 amounted to the inthan $48,000. It was later learned from authoritative sources that members come taxes paid in 1930 by the partners came from four or five of the firm and was earned in outside sources. taxes for Coupled with the revelation that the partners escaped income from the two years, came the development that during the two-day period, December 31 1930, to January 2 1931, a revaluation of the assets of the firm showed that "losses" of $21,071,862 that were reported to the Bureau of Internal Revenue. Pecora Questions Morgan. Mr. Pecora attempted to bring out through Mr. Morgan and Mr. Keyes that that this revaluation was made in 1931, instead of in December 1930, so up the firm, under the Revenue laws could extend the loss to cover income to 1933. Mr. Morgan and Mr. Reyes contended that the revaluation was made, as had been customary with the firm, because of the entrance of Parker Gilbert, former Under-Secretary of the Treasury, into the partnership. Mr. Morgan insisted that he knew nothing of the income tax reports made by the firm. It was continued probing along this line that led to the first break in the Committee. Senator Glass (Dem., Va.) objected to the questioning, after developing that the Internal Revenue Bureau had checked the returns. "They also checked Mr. Mitchell," Senator Couzens (Rep., Mich.) interjected, referring to Charles Mitchell, former Chairman, National City Bank, now on trial for income tax evasion as the result of information developed by the Committee. Couzens Makes Rejoinder. To Senator Glass's charge that the remark was an implication, the Michigan Senator replied that it was not intended as such, but he could not see why "the witness should be treated differently from any others." Protests by John W. Davis to making public individuals with accounts of $100,000 or over with the firm and the list of bank officials and directors who have borrowed from the company, on the ground that the matters were "private," furthered the Committee break with certain Senators siding with his views. Mr. Davis pointed out that he "was not objecting" but wanted the firm relieved of "responsibility of making the matters public as they were private matters between citizens and their bankers." Mr. Pecora asked Mr. Morgan if any of the loans to bankers were overdue, and received the reply "yes." The banker also answered affirmatively that some of the loans were now "under collateralized." Huge Asset Shrinkage. In a report of assets of the banking firm, introduced into the record it was revealed that aggregate assets shrank from $703,909,405 in January 1931, to $432,560,788 in January 1932, a shrinkage of $271,342,617. On December 31 1932, the figure was down to $424,708,095. Reads Prepared Statement. Mr. Morgan, in taking the stand, read into the record a prepared statement defending private banks as "national assets" and protesting against the tendency of present legislation to "limit their scope." Pointing out that the private banker operates on a "code of professional ethics that could never be expressed in legislation," Mr. Morgan added that to disregard the code would mean loss of credit, "his most valuable possession." Charges that private bankers force their way onto the Board of Directors of corporations were hit by the witness. He said: "I can only say that in my experience of over forty years, I cannot remember any partner of the House taking a directorship except at the earnest request of the Board of Directors of the company in question. It is often useful for the directors of a company who are not financial experts to have an expert of that sort, in whom they have confidence, at hand for a consultation. Regrets Legislative Tendency. "This is why I regret the tendency of so much present-day legislation, which endeavors to prevent bankers from being directors of one thing or another or which throws on directors such liabilities for errors for which they could not be responsible as to make it too dangerous for any man of experience or means to assume such responsibilities." Regarding the question of whether private bankers should be permitted to accept deposits, Mr. Morgan declared such action would curtail services of such banks in supplying capital for development. After describing his firm's activities, the senior partner named its affiliates in this country and abroad. Thomas W. Lamont handles most of the foreign security issues that the firm undertakes, he stated. No record is kept of the daily meetings of the partners of the business, he added. $340,000,000 in Deposits. Deposits on hand with the firm December 31 1932 totaled $340,000,000, Mr. Morgan stated; increasing a previous estimate by $100,000,000. Capital 3655 given as $53,194,000. of the company, or "net worth of the company" was witness stated that the In response to questioning by Senator Gore the have a similar fund of firm did not carry a legal reserve, but that it did $224,000,000 in Govand loans call in $7,300,000 cash, in $33,800,000 about ernment securities. Other asiets were listed as follows: from other banks, State and rminicipal bonds, $6,745,299; acceptances investments, $810.925; time corporate bonds and stocks, $13,875,028; other banking houses, $9,loans, $34,836,442; demand loans, $47,869,164, and 691,304. liability account: No acceptances were held under guarantee. Customer $10,645,958. Acceptances $11,397,271 ; foreign exchange, company liabilities listed were Besides the deposits and net worth of the No accrued interest or $12,820,358 in acceptances sold under guarantee. bills payable were listed. New York In the advices from Washington May 11 to the the articles wanted Pecora Mr. that "Times" it was stated but Mr. Morof partnership made available for the record, make them public, gan said mildly that he preferred not to Davis. From the and won his point with the aid of Mr. following: the take also we 23 May dispatch "Times" conflicting interests of a private He differed also with Mr. Pecora on the corporation. Although hard banker who serves on the directorate of a of difference between a pressed to admit that there would be a margin and a director protecting firm his for terms best the get to trying banker not see that both functions his corporation, Mr. Morgan said that he could might not even be identical. could not be carried out honestly or that they be fair, and he said there If a banker wanted to remain in business he must for only one side. was no value in any relationship which held profit As to Loans to Other Bankers. came to a list of bank Mr. Pecora struck his first real snag when he firm. Mr. Davis said officials who had obtained loans from the Morgan being included, but that that Mr. Morgan had no objection to these names y of bringing about a he felt the Committee should take the responsibilit was suggested that the breach of confidence on the part of the bank. It Senators, after looking matter be taken up in executive session, which all the approved by vote. over the list of names, including Senator Glass, might be obSenator Adams then wanted to know what other matters Mr. Pecora did not want jected to, so that all could be taken up at once. was known that one subject to disclose what he had in view, although it floated by the firm at was a list of persons invited to subscribe for shares his statement, prices below the public offering. After Mr. Davis had made Pecora, who sat and only one or two Senators seemed to be supporting Mr. would ask permission angrily twisting a roll of paper, Mr. Pecora said he to answer Mr. Davis. I did not call upon "You will observe that with regard to the last list regardless of their J. P. Morgan & Co. to produce a list of all individuals loans," he said. position or station in life to whom that firm had made individuals to "I called simply in that question for the names of all directors of comwhom they had made loans who were executive officers or avowedly conmercial banks, which from the nature of the banking business field. ducted by this firm, competed with this firm in the banking Cites Purpose of the Request. are lists of "The other lists to which Mr. Davis has made reference privilege of subindividuals to whom J, P. Morgan & Co. have given the launched sr scribing to the capital shares of corporations which were they had a participasponsored or floated by J. P. Morgan & Co. or in which tion interest. frequently the charge "This Committee has heard frequently and has read tremendous power is exercised a that allegation the or statement the and over the industrial field not only in the field of banking and of finance but charge has been made upon in this country by private banking firms. That the floor of both houses of this Congress. the Committee pre"The information I have asked for, and which unless hearings, is information vents me I will have spread upon the record of these existence of any such which, in my humble opinion, tends to disclose the power is exercised, and the power and the channels through which the reasons for it." session, leaving the feeling After that the Committee went into executive hearing would be hamthat if Mr. Pecora were beaten on these points, the to receive the list strung. But when it was over and the Committee voted invited to subscribe for of loans to bank officials, and the names of those to reshares, Mr. Pecora left the room beaming. The Committee decided in exceive the names of individuals having deposits of $100,000 or more ecutive session. At the hearing on May 24 it was brought out that 1,250,000 shares of Alleghany Corporation stock was offered to the clients of J. P. Morgan & Co. at prices ranging from $15 to $17 below the market quotation on the same day. The "Journal of Commerce" reported as follows regarding the hearing on May 24: A lengthy list of names of the persons allowed to share in the transactions, including those of well known figures in financial, commercial and political life, were made public by the Committee. At the morning session another long list, containing names of directors and officials of banks and trust companies that had received individual loans from the house, was introduced into the record. Through questioning, Ferdinand Pecora, Counsel for the Stock Market Probe Committee, developed from George Whitney, partner of J. P. Morgan ez Co.. intimate details of the Allegheny Corporation stock transactions. Pecora Reads Letter. Mr. Whitney stated that the Allegheny Corporation was set up by the Van Sweringen brothers and financed by J. P. Morgan & Co. Mr. Pecora read a letter, identified by Mr. Whitney, purporting to show that the Van Sweringens issued 3,500,000 shares of common stock in the corporation, of which 1,250,000 shares were to be turned over to J. P. Morgan & Co. at $20 per share for the account of the firm or for resale. Before the stock was issued, according to Mr. Whitney, J. P. Morgan & Co. entered into an agreement with the Guaranty Co. of New York City under which the latter was to underwrite 500,000 shares of the stock. In submitting the list of names of persons allowed to take the stock at the same price paid by J. P. Morgan & Co., Mr. Pecora called attention to Financial Chronicle the fact that two of the names on the list were Charles Francis Adams, former Secretary of the Navy during the Hoover Administration, and William H. Woodin, Secretary of the Treasury. Pecora read into the record a letter, identified by Mr. Whitney, offering Mr. Woodin 1,000 shares of the Alleghany stock at $20 a share. May 27 1933 A chartered bank cannot lend more than one-tenth of its capital stock Ind surplus to any one borrower, while there are no restrictions on a private bank as to loans. Also, a private bank can own stock in other corporations, but National or State banks cannot do so, except to a limited extent. Mr. Morgan gave his theory of the place of private banking in the banking system of the country, and said he did not with to see it done away $35 to $37 Market Price. with and that he objected to such examination which chartered banks were The letter stated that at the time the stock was being offered at that subjected to, because of "the more confidential" relations between private price it was quoted on the New York Stock Exchange at from $35 to $37 a bankers and clients. Senator Glass, who has supported Mr. Morgan several share. . . . times when being pressed by Mr. Pecora, again interjected an inquiry when Another letter from the J. P. Morgan lt Co. files, acknowledging receipt of an attempt was made to define in just what respect relations were more Mr. IVoodin's check for $20,033 for 1,000 shares of the Alleghany stock at confidential than with commercial banks. $20 per share plus interest, was submitted by the Committee counsel. Glass on Congress's Rights. Asked by Senator Adams (Dem., Oolo.) the price of the Alleghany stock Mr. Glass asked if it were not possible for the State of New York to at present, Mr. Whitney replied about $1 per share. alter the law so as to control private banks if it were deemed necessary, Mr. Pecora said that Mr. Whitney took 14,000 shares of this stock himand said that he did not think Congress had any constitutional rights or self, sold 8,145 shares on the open market at $32 a share, making a profit of jurisdiction over such bankers. $229,411. The witness refused to identify this transaction. And at this point he clashed with Senator Fletcher, the Chairman, who J. P. Morgan was on the stand only a few minutes during the Committee raised his usually mild voice to say: session to-day. Ile reiterated, under questioning by Pecora, opposition to "There has been a special sub-committee on banking that has been supregulation or examination of private banks. The Committee counsel further posed to get out banking legislation that has been two years on it, and it developed that the senior partner of the large financial institution paid an has not done it yet." incomb tax in Great Britain during 1931 and 1932. Inasmuch as the Committee referred to is Senator Glass's, he protested,. out of the corner of his mouth, that not an idle moment had been spent. Yesterday's Testimony Recalled. Mr. Morgan amplified his view as to the value of private banks, howYesterday it was revealed that neither Mr. Morgan nor his partners paid ever, by saying: income taxes in this country during those years. "We have no Board of Directors. We have no officers that are hired Mr. Morgan stated that he had no opinion to express on the matter of to look out for the business of the shareholders. We have no shareholders. laws limiting the amount a bank might loan to an individual borrower, in Consequentlywe can do things immediately without anybody but the answer to Mr. Pecara's questioning. partners and the people who make records in the office knowing anything The banker did contend, though, that private banks should not be subabout it. And a great many people do not like their private affairs shown jected to examinartion because their relations with their clients are "much to directors, although I think as a rule they are not readily shown to them more confidential" than those between commercial banks and their dethese big banks." in positors. When any one puts money into the Morgan bank he does so on faith, Mr. Following his statement that he was opposed to regulation of private banks Morgan said in reply to a question by Senator °omens, and back of that the witness v.-as subjected to a volley of questions from the Committee which faith, he added, are all the resources and fortune of every partner in the revealed that the larger part of J. P. Morgan Is Co. business is banking; firm. There is an unlimited liability in this respect, he said, whereas underwriting transactions are less in volume and in profit, and the firm has chartered banks have a limited liability. His clients, he remarked, are a large business in exchange. Mr. Morgan also stated that the firm had clients by choice. He told Senator Fletcher in answer to an inquiry that made unsecured commercial loans. not even the Senator could deposit money in the Morgan bank or obtain The company carries a reserve of about $18,000,000 against "under collaa loan there unless he came properly introduced. teralized" loans, according to the testimony of Mr. Whitney. The loan to Charles E. Mitchell, former head of the National City Bank now on trial on charges of evading income taxes, came up. It was made Explains Mitchell Loan. in October of 1929. after the market crash, at a time when there was talk Mr. Whitney took the stand to explain a loan made by the firm to Charles of a merger between the National City Bank and the Corn Exchange Bank E. Mitchell, former Chairman of the National City Bank. He said that and Trust Company. the total loan to Mr. Mitchell was about $12,000,000, and was made to hold The National City stock sold below the contract price, and Mr. up the stock of the National City Bank when it was to be mergeg with the Mitchell wanted to support it. Ile arranged with the Morgan firm. Mr. Whitney Corn Exchange Bank. said, to borrow $12,000,000. He drew something over $10,000,000 of this Senator Glass (Bern., Va.) inquired if the Mitchell loan was made by the amount, and in about a week paid back $4,600,000. company so that it could acquire control of the National City Bank. This, The loan now amounts to about $5,800,000, which is not entirely Mr. Whitney denied stating that the company had "no interest in any way covered by collateral, although the collateral put up originally—National City in the National City Bank." Bank stock—was twice the amount of the loan. The Morgan firm still holds Collateral Loans Cited. this stock, although it is worth much less than its former value. Pointing to the comparison of the $18,000,000 setup against under-colBecause of this fact, the Morgan firm set up a reserve against the loan lateralized loans against the "net worth" of the Company of around $63,of $3,500,000, and in 1932 there was set aside a reserve of $18,000,000 to 000,000, Pecora asked if Mr. Whitney did not think that some regulation protect all loans. This amount was taken from net worth, or the capital of private banking of this type was necessary. When the witness replied assets of the•firm, leaving the net worth $53,000,000. . in the negative, the Committee counsel asked if he meant that there should Some Senators were curious, as a result of the Mitchell loan discussion, be no examination made of banks. as to what assets partners brought to the firm when admitted, and Mr. "Oh, no," declared Mr. Whitney. "But we believe that our own examinaMorgan said there was no rule about it, that a partner who comes in does tion of our firm is the strictest that could be made. We never fool ournot necessarily invest anything, but is obligated for the losses,:if any. Mr. selves about our assets." Pecora asked if any of the partners had borrowed from the firm and Mr. Senator Gore asked the witness if there was any truth to rumors that Whitney said they had, although he did not know how many had loans. the company sold stocks to break the market in 1929. At the hearing on May 25 there was incorporated in the Mr. Whitney replied that an examination of the company's books would records a further list of clients of J. P. Morgan offered stock show that stock transactions during the period were mostly on the purchase side. He explained that the company joined with several other large below the market figure, this list having concerned an offerNew York bankers in a "stabilization pool" to create some sort of a market ing of Standard Brands common stock which became effor stocks during the 1929 crash. fective on September 6 1929. From the Washington account A list of J. P. Morgan dr Co. deposits in other banks were identified and Introduced into the record. May 25 to the "Wall Street Journal" we quote further as Further information from the company's files listing loans nada to of. follows: ficers and directors of banks and trust companies contained the names of Morgan St Co. purchased and sold the stock at $32. The market former Vice-President Charles G. Dawes and Norman H. Davis, United quotations between September 6 and 10 ranged from 40% to 437%. States Ambassador at Large. Included in the Standard Brands list was the name of Calvin As indicative of the type of questioning which featured the former President of the United States, who had retired from Coolidge, Vublic life by the time the transaction took place. William H. Woodin, hearing it was stated in the "Wall Street Journal" of May Secretary of the and Senator McAdoo of California were on the new list as 24 that Senator Gore asked Mr. Whitney if "the House of they Treasury, were on that in connection with the Alleghany transacMorgan in the fall of 1929 sold stock in order to break the tion introduced Wednesday. Many other names on theCorporation Allegheny list were also on the Standard Brands list. market," or "scuttle the ship." The introduction of the list came in the midst of a series of rapid fire In its Washington account May 24 the "Times" said in developments which included a statement by J. P. Morgan on his foreign part: tax payments, a statement by George 0. Whitney on Morgan security offerings since 1919, involving the enormous sum of six billion Switching to taxes, Mr. Pecora brought from Mr. Morgan, who testified dollars. again to-day, the fact that although he had paid no income taxes in the Whitney was on the stand except for the brief period while Mr. Morgan United States in 1931 and 1932, he did pay taxes in those years in England. was making his tax statement. Counsel Pecora pursued questions to WhitMr. Whitney added for the Morgan side that in 1930 the partners paid ney as to why the various names were put on the select list and as to how $11,000,000 in taxes on their 1929 incomes. allotments of stocks were made but at the end Pecora said Whitney's stateWhy Mr. Morgan was compelled to pay taxes in Great Britain in 1931 ments were "vague." and 1932 was explained by a high authority to-night as follows: As the Morgan inquiry was about to recess for lunch J. P. Morgan asked leave to present a statement on foreign income tax payments made by him. "Whereas In the United States capital losses are not taxable, In Great Britain they cannot be deducted from income-tax returns. Thus, the Morgan partners Mr. Morgan said he paid an income tax to Great Britain of £7,000 in were able in this country to balance their losses against their gains, but In Great 1930, and about the same in 1931 and 1932. Britain this was impossible. . . ." "The English income tax includes the tax on rental value or property Morgan Again Goes on Stand. value, which the owner uses," Mr. Morgan explained, "and which would Mr. Morgan was on the stand but a part of the day, and even then he iannere increase d laoes., income had he rented it. It does not include any capital gains frequently gave place to his partner. Mr. Whitney, who was more familiar with the loans and stock transactions under discussion. To a question by Senator Fletcher, Mr. Morgan stated that he was talkMr. Morgan was as urbane as the day before, and was treated with the ing about his personal income tax. same consideration by members of the Committee. . . . "I take great pains to pay the income tax and other taxes I am called The point of Mr. Pecora's tactics was clearly an attempt to show the upon to pay by the various Governments," he added, "and I get the best need for legislation that would permit examination and control of private advice that I can that I do not underpay or overpay." banking institutions. Mr. Morgan said his losses were greater than his income here. Mr. Morgan denied that this need existed and said that, compared with "I am not responsible for the figures. I view them with great regret." the record of corporate banks during the depression, the private bankers he continued. had proved to be in a much stronger position. But in his examination Dlr. Mr. Pecora asked Mr. Morgan if he would have had to pay taxes in this Pecora brought out two main points of difference between the operations of country if the British law was in effect here. Mr. Morgan replied that he a chartered bank and a private bank. would have, in substantial amount. Volume 136 Financial Chronicle pay to the Mr. Fletcher asked Mr. Morgan: "Is the tax which you United States?". British Government exempt from taxes which you pay in the Mr. Morgan said: "That I don't know; I think so probably." United "If the law allows it," Mr. Morgan added, "it is exempt from States tax." On May 23 when the hearings started, the "Times" from Washington reported: said be In response to the first questions from Mr. Pecora, Mr. Morgan P. was a private banker and that he was a member of the firm of J. Morgan & 00. in New York and Drexel & Co. of Philadelphia, "which are one firm"; and of two 4oreign houses, Morgan, Grantell & Co. of London in and Morgan & Co. of Paris. The firm of J. P. Morgan & Co. has been existence since 1894, he related. Mr. Morgan testified the firm conducted a general banking business, "such as is conducted under the law of New York by a private banker." "We take deposits from people who wish to deposit with us," he said. "We at times issue securities. We buy and sell exchange. We issue letters of credit. We take orders, which we have executed on th Stock Exchange. In fact, we do a general banking business." As to the hearing on May 25 the Washington advices to the "Times" said in part: Mr. Whitney sought and received permission to "clear the record" with respect to questions asked yesterday regarding his own personal sales, and stock selling on Feb. 1 1929. On "checking up," he said, he found he had given wrong information concerning the latter. Whitney Tells of Allegheny Sale. "I have searched the record over-night," Mr. Whitney testified, "and apparently it was on the first of February that the Guaranty Co. made a public offering of the 500,000 shares of Allegheny Corp.common stock at 24. "There was created on the New York Stock Exchange what they call a 'when issued' market. Feb. 1 that was. That was the first day, so far as any record shows, when there were any quotations of any kind. On that date the prices opened at 37, the high was 37, the low was 32% and it closed at 33. "That was the first day there was any trading, and they ranged alongwell, 37 as a matter of fact, the opening sale, was the highest price at which they sold for a long time-I mean through the month of February." "Were any restrictions of any kind placed or even suggested by J. P. Morgan & Co.upon the right of any of the individuals to whom an invitation was extended to subscribe to the stock at $20 a share?" asked Mr. Pecora. "No," answered Mr. Whitney. "So, any individual who availed himself of that subscription right could have disposed of the stock allocated to him in the open market, and would have reaped a very substantial profit," commented Mr. Pecora. "Isn't that so?" Dtd Not Count on a Market. "There were no strings to it," said Mr. Whitney. "If they had taken advantage of the market they would, undoubtedly, on the prices, have made a very substantial profit. "But this question on yesterday, particularly from Senator Couzens, had to do with when we had our discussions, and what the prices were. In a great majority of cases when people could be reached we offered and they accepted it without any basis of any possible future market profit there might have been. "The more fact that there was a market created substantially was not in their minds or ours." "In the letter to Mr. Woodin," Mr. Couzens asked,"it specifically stated that the market was 35 or 37." "Yes, Mr. Woodin was away." Mr. Whitney explained. "We tried to reach him, but could not, and that letter was sent Feb. 1 to reach him. That was one of the few cases which was done in that way." Close Vote on Publicity. It became known to-day that on Tuesday, when the committee in executive session decided that the lists of Morgan loans to bankers should be made public, the decision was reached by the narrow margin of six to five. Those favoring publicity, it was understood, were Chairman Fletcher and Senators Costigan, Byrnes and Gore, Democrats, and Senators Couzens and Steiwer, Republicans. Opposed to publicity were Senators Glass, Barkley and Adams, Democrats, and Townsend and Goldsborough, Republicans. On the vote to make public the list of favored stock subscribers the vote was 7 to 4. It was also reported that Mr. Pecora at the session threatened to resign unless publicity were voted, but this could not be verified. The motive behind the special offerings of stock was inquired into. Mr. Whitney said it was hoped that the men who bought the stock would make money, and that it was made available to them because of long-continuing relations. Yesterday(May 26) a recess was taken by the Senate Committee until Wednesday next. Inquiry Into Affairs of J. P. Morgan 8c Co. by Senate Committee Investigating Stock Market Operations -List of Those Offered Common Stock of Standard Brands, Inc., Below Market Price. During the hearing in Washington on May 25 of the Senate investigating committee inquiring into the operations of J. P. Morgan & Co. there was placed in the record a list of those to whom were given subscription privileges in 1929 to an offering of common stock of Standard Brands, Inc. Noting that this list included the name of Calvin Coolidge, the Washington correspondent of the New York "Evening Post" on May 25 said in part: The presentation of the new list followed rapidly upon the disclosure Democratic National Comthat John J. Raskob, former Chairman of the of Allegheny Corpomittee.in sending his check to pay for the 2,000 shares thanked the Morgan firm warmly him, ration stock similarly allotted to that "I sincerely hope the future for this and past favors and told them holds opportunities for me to reciprocate." were made in the summer of The allotments of Standard Brands stock committee showed, at a price 1929, Ferdinand Pecora, counsel to the Senate began on the Exchange In September it of 32 when trading in the stock opened at 40% and went to 43 • Baruch on List. firm were Bernard Among those to whom it was allotted by the Morgan Party circles, 4,000 shares; Calvin M. Baruch, prominent in Democratic 3657 candidate for Coolidge, 3,000 shares; John W. Davis, former Democratic CommitteePresident, 5,000 shares; Charles D. Hilles, Republican National Amman for New York, 2,000 shares; Norman H. Davis, now American the bassador-at-Large in Europe, 500shares; Mrs. S.Parker Gilbert, wife of G. William 500 shares: Commission. Agent-General of the Reparations McAdoo, now United States Senator, 1,000 shares; John J. Raskob, 2,000 500; R. B. shares; General John J. Pershing, 500; Charles A. Lindbergh, State Mellon, 5,000 shares; H. Edmund Machold, former Republican H. William now SecreWoodin, and Chairman in New York, 2,000 shares, shares. tary of the Treasury, 1,000 In addition to that,large blocks of stock were sold to prominent business men, many of whose names, like those of some of the politicians, appeared revealed yesterday. on the lists of the Alleghany Corporation distributions J. P. Morgan received for himself 28,750 shares; Myron C. Taylor, 10,000; A. H. Wiggin, 8,500 shares, and Matthew Brush. 2,000 shares. of J. P. The Raskob letter was thrown into the Senate investigation the Morgan flotaMorgan & Co. to-day after it had been brought out that to 1919 amounted 1 Jan. since issues tions of bond and preferred stock on the 14,000 shares $6,024,444,200 and that the profits of George Whitney of Alleghany Corporation stock he was allowed to buy at 20 were $146.125. Whitney Tells of Personal Deal. According to a Washington dispatch May 25, Mr.Whitney explained his participation in the Alleghany Corporation issue as follows: stock during I acquired 14,260 shares of Alleghany Corporation common that were on that list. 1929, which includes 12,400 shares of the 14,000 1929 The total cost of those shares was $285,508.82. I sold in September $392,311.32. 2,000 shares. Which makes 8,145 shares which I sold for which results in the profit of approximately $229,000. 48. I then The average price of that was not 32, but approximately shares at sold, in 1930, 4,000 shares more for $28,977.50; in 1931. 2,000 $10,345. and I still hold 115 shares. although I So my gross profit on the whole transaction was $146,125, return. declared a profit in 1929 of $229,000 in my income tax In its Washington advices the same day the "Times" gave the list as follows: stock of A list of those who in July 1929 received an opportunity to buy Standard Brands, Inc., before it was placed on public sale by J. P. Morgan The to-day. committee Senate the & Co. was put into the record of list follows: Shares. Name1,000 Alamance Club 1,000 W. H. Aldridge. President Texas Gulf Sulphur Co 2,000 Alta Corporation 10,000 A. M. Anderson, partner J. P. Morgan & Co 1,000 Argonaut Securities Corp 2.000 Asiel & Co., members New York Stock Exchange 1,000 Challis A. Austin, late President Equitable Trust 10,000 Bankers Co. of New York, security affiliate Bankers Trust Co___. 2,000 Charles D. Barney & Co., investment bankers 500 D.S. Barrett.Jr 11.000 F. D. Bartow, partner J. P. Morgan & Co 4,000 Bernard M. Baruch,financier 1,000 Hernand 13ehn, President International Tel. & Tel. Co 1,000 Sosthenes Behn, Chairman International Tel. & Tel Co 300 Julius Berger 500 J. J. Bernet, President C. & 0. RR 4,000 Stephen Birch, director Kennecott Copper Co 2,000 Co Trust C. N. Bliss, director Bankers 1.000 Claude K. Boettcher, Chairman Denver National Bank 20,000 Bonbright & Co., Inc., investment bankers 500 RR Charles Bradley, Chairman Erie 5,000 Nicholas F. Brady, late Chairman N. Y. Edison Co 5.000 bankers investment Co., Brown Brothers & 2,000 Matthew C. Brush, President American International Co 500 E. G. Buckland, Chairman N. Y. N. H. & Hartford RR 1,000 Co Sugar Rico W. E, Burnet, director So. Puerto 1,000 Callaway, Fish & Co., members New York Stock Exchange 2,000 F. L. Carlisle, Chairman N. Y. Edison Co 3.000 Chicago Corporation, investment trust 2,000 Hendon Chubb, partner Chubb & Sons 2,500 Climax Corporation 10.000 Clark. Dodge & Co.. members New York Stock Exchange 500 Case I. J. President Leon R. Clausen, 25,000 Thomas Cochran, partner J. P. Morgan & Co 3,000 Calvin Coolidge 1,000 C. C. Cooper, Treasure. Hotel & Railroad News Co 1,000 0. A. Corliss, President Lamont, Corliss & Co 1,000 Co Trust Bank Corn Exchange 100 Walter Craig 1,000 Co Clinton H. Crane, President St. Joseph Lead 500 RR Central York New P. E. Crowley, former President 5,000 John W. Davis, counsel .1. P. Morgan & Co of America 1,000 Arthur V. Davis, Chairman Aluminum Co. -at-Large 500 Norman H. Davis, United States Ambassador 2.500 H. P. Davison. partner J. P. Morgan & Co 500 Edward Dibrell, director Associated 10,000 Exchange Dominick & Dominick, member New York StockBusiness Adminisof School Graduate Dean Wallace B. Denham, 1,000 tration, Harvard 42,000 & Co Drexel & Co., Philadelphia partnership of J. P. Morgan 2.000 Co Insurance Life Metropolitan F. H. Raker, President 500 Cornelius Cousins Egan 500 Martin Egan, employee J. P. Morgan & Co 3,000 Exchange Evans, Stillman & Co., members New York Stock Co 1,000 George B. Everitt, President Montgomery Ward & 10,000 William Ewing, partner J. P. Morgan & Co 2,000 Marshall Field. director Guaranty Trust Co 00 Chicago0 of Bank National First affiliate Corp., First Chicago 25:000 Y N. Bank, First Security Co., security affiliate First National 500 H. A. Fortington, Financial Secretary Royal Insurance Co., Ltd 1,000 P. A. S. Franklin, Chairman International Mercantile Marine_ 1,000 W. E. Frew, Chairman Corn Exchange Bank 500 GiovannI Fummi 1,000 W. Tracy Gaffey 5.000 A. L. Gates, President New York Trust Co 1,000 Walter S. Gifford, President American Tel. & Tel. Co 500 Mrs. S. Parker Gilbert, wife of Morgan partner 2,500 Philip G. Gossler, Chairman Columbia Gas & Electric 1,000 Co Trust Guaranty Co. of New York, security affiliate Guaranty 5,000 Guggenheim Brothers, bankers 1,000 Perry E. Hall 2,000 Reginald Halladay, member New York Stock Exchange 500 W. J. Harahan, Senior Vice-President C. & 0. RR 500 Albert H. Harris, Chairman executive committee N. Y. Central._ 2,000 The N. W. Harris Co., investment bankers 5,000 The Harris Forbes Corp., investment bankers 1.000 Horace Havemeyer, director Delaware Lackawanna & West. RR 5,000 Ilaystone Securities Corp 500 R. C. Hill, Chairman Consolidation Coal Co Charles D. Mlles, National Committeeman for New York State. 2,000 resident manager Employers' Liability Assurance Corp 1.000 Hitt, Farwell & Co. member New York Stock Exchange 1,000 J. J. B. Hilliard & Sons 100 Oil counsel Socony-Vacuum general George V. Holton, 2.000 Hornblower & Weeks, members New York Stock Exchange 1,000 George H. Houston, President Baldwin Locomotive Works 2.000 George H. Howard, President United Corp 2.000 Arthur Curtiss James. Chairman Western Pacific RR 3658 Financial Chronicle May 27 1933 NameShares. testified before a Senate committee on foreign loans, but the details were Jessup & Lamont, members New York Stock Exchange 1.000 not brought out at that time. P. H. Johnston, President Chemical National Bank 1,000 F. B. Keech & Co., members New York Stock Exchange 1.000 Fees for Foreign Financing. Cornelius F. Kelley, President Anaconda Copper Mining Co 2,000 L. A. Keyes, employee J. P. Morgan & Co The largest on the list was a $200,000,000 revolving credit for the British 4.600 Kidder, Peabody & Co., investment bankers 5,000 Governmen t opened on Aug. 28 1931, to run for one year. Under the T. S. Lamont, partner J. P. Morgan & Co 2,000 contract, J. P. Morgan & Co. bought British Treasury bills to the amount T. W. Lamont, partner J. P. Morgan & Co Thomas W. Lamont, Vernon Monroe and William B. Thompson, 20,000 of the loan, and discounted them at 4;4%. as trustees for the benefit of Phillips Exeter Academy A group of 108 banks was formed to participate in the credit, the com5,000 Morgan et Cie., Paris affiliate J. P. Morgan & Co 20,000 pensation being 1%, or $2,000,000. Morgan & Co. obtained $500,000 for Morgan, Grenfell & Co., London 20,000 M.Morize managemen t. The firm's share of the 1% commission was $111,940, 100 J. R. Morron making a return to the firm of $611,940, minus expenses of $33,560. 1,000 Frederick K. Morrow, President United Cigar Stores 1.000 A revolving credit of $25,000,000 and 5,000.000 pounds sterling was F. S. Moseley & Co 2,000 set up for the Bence d'Italia of Rome on Dec.22 1927, by a group consisting Vernon Monroe, employee J. P. Morgan & Co 300 John P. Murphy, Secretary Allegheny Corporation of Morgan, Grenfell & Co., Baring Brothers & Co., Hambros Bank, Ltd., 500 National City Co., security affiliate National City Bank and N. M. Rothschild & Sons, all of London, and J. P. Morgan & Co. of 20,000 Newmont Mining Corp New York. A further credit of $75,000,000 was furnished at the same Old Colony Corp., security affiliate First National 0 0 John E. Oldham, director Atlantic National Bank Bank of Boston- 2:0 time by Federal Reserve banks here, the Bank of England and other 500 Robert E. Olds, late Assistant Secretary of State European banks. 500 Miss Anne O'Rourke • 100 There were 89 participants in the credit, which was paid on Dec. 29 1927. Carlo Oral 500 The commission was 1 %, of which $312,500 went to the participants, J. J. PeHey, President N. Y. N. H. & Hartford RR 500 T. Nelson Perkins, director American Tel. & Tel J. P. Morgan & Co., also receiving 3. of 1% for arranging and managing 500 General John J. Pershing the credit. 500 Bernard E. Pollak, Chairman Union Solvents Corp $25,000,000 Credit to Japan. 2,000 Mrs. Bernard E. Pollak 2,000 W. C. Potter, President Guaranty Trust Co On Nov. 19 1929 a currency stabilization revolving credit of $25,000,000 John W. Prentiss, President Hornblower & Weeks, members New 10,000 was established for the Yokohama Specie Bank by J. P. Morgan & Co., York Stock Exchange 1,000 Kuhn, Loeb & Co., the National City Bank, and the First National Bank Seward Prosser, Chairman Bankers Trust Co 10,000 of New York. The loan was to run for a year. The participants received John J. Raskob, former Chairman Democratic National Committee, and director of General Motors $250.000, equal to 1%, and $62,500. or g of 1%, as a management comStanley Resor, President J. Walter Thompson Advertising Agency_ 2,000 mission for the group. There were 85 participants. 1,000 Lee, Higginson & Co., investment bankers 5,000 The Morgan firm and a group opened a $20,000,000 revolving credit J. S. Leech, employee J. P. Morgan & Co 200 for the Bank of Spain on Aug. 5 1928. The commission was 1%,or $200,R. C. Leffingwell, Morgan partner 10,000 Augustin Legorreta 000 to the participants, and also la' of 1%. or $50,000, to the Morgan firm. 500 Charles A. Lindbergh 500 Another $38,000,000 revolving credit for the Dank of Spain was opened A. L. Lindley, Vice-President New York Stock Exchange 2,000 on March 26 1931 by J. P. Morgan & Co., the commission being $570,000, Robert 0, Lord, President Guardian Detroit Bank 500 Luke. Banks & Week. members New York Stock Exchange or 1%, for 18 months. Henry E. Machold, Chairman executive committee St. Regis Paper 2,000 The managing commission was $142,500. or of 1%, and there was a Co. and former New York State Republican Chairman 2.000 refund of $187,500, of which $142,500 represented the managing commission C. H. Mackay. Chairman Postal Telegraph Cable & 2,000 Corp John Marshall and $45,000 represented 1 and on % a participatio n of $3,000,000. 500 Miss Mary Marshall 100 William Gibbs McAdoo, Senator and former Secretary of Treasury 1.000 • T. N. McCarter, President Public Service Corp., New Jersey 1,000 Uzal H. McCarter Inquiry into Affairs of J. P. Morgan & Co. by Senate 1.000 H. C. McEldowney, President Union Trust Co., Pittsburgh 5.000 Committee Investigating Stock Market Operations R. B. Mellon, President Mellon National Bank, Pittsburgh 5,000 Stephen Mergelis, late President Johns-Manville Corp -Statement by William G. McAdoo as to Partic500 Albert G. Milbank, partner Milbank. Tweed, Polk & Webb 500 ipation in Stock Offerings Through Friendship Edward G. Minor, Chairman Pfaudler Co 500 Minsch, Mone11 & Co., Inc.investment bankers with R. C. Leffingwell-Lost $2,565 in Transac1,000 C. E. Mitchell, former Chairman National City Bank tions-Newton T. Baker on Participation in Firm's 10,000 S. Z. Mitchell, former Chairman Electric Bond & Share 3,000 "Selected List"-Statements by John Francis Daniel J. Moran, President Continental Oil Co 500 H. S. Moran Adams, Charles G. Dawes and Norman H. Davis. 1,000 J. P. Morgan 28,750 S. W. Rayburn, President Associated Dry Goods A prepared statement by William G. McAdoo, now Sen1,000 Arthur Reynolds, director Armour & Co 3,000 ator, and who was Secretary of the Treasury in Woodrow John D. Ryan. late Chairman Anaconda Copper Mining Co Salomon Brothers & Hutzler. members New York Stock Exchange_ 2,000 1,000 Wilson's cabinet, was submitted on May 25 at the Senate J. A. M. De Sanchez, employee J. P. Morgan & Co 100 Franz Schneider Jr., Vice-President Newmont Mining Co Committee hearing into the operations of J. P. Morgan & 1.000 Mrs. Florence S. Schuette 2,000 A. P. Sloan, President General Motors Corp Co. Senator McAdoo was one of those permitted to par1,500 Matthew S. Sloan, former President N. Y. Edison Co ticipate in an offering of stock of the Alleghany Corp. before Edward B. Smith & Co., members New York Stock Exchange_ - 1,000 2,000 F. S. Smithers & Co., members New York Stock Exchange the public offering, and at a price below the market figure; 3.000 Somerset Corporation 5,000 Harold Stanley, Morgan partner his statement presented to the Senate Committee this week 9.970 Charles Steele, Morgan partner 5.000 John N. Steele, general counsel Kennecott Copper follows: 500 John H. Stephens, Jr When the United States entered the World War in 1917, 500 Frederick Strauss, partner J. & W. Seligman & Co I selected 1.000 Russell C. Leffingwell of New York to be Counsel for the Charles I. Sturgis, Vice-President C. B. & Q RR Liberty Bond 300 Cornelius .T. Sullivan, partner Eidlitz & Hulse, lawyers issues. He was a member of a prominent law firm in New York, versed 500 in Myron C. Taylor, Chairman United States Steel Corp these particular matters. I had known him as a young man-h 10,000 is family Walter C. Teagle, President Standard Oil of New Jersey 2,000 and mine having lived across the street from each other at Yonkers, William Boyce Thompson. late capitalist N. Y. 2,500 Subsequently, because of Mr. Leffingwell's ability, I made him A. A. Tilney, Chairman Bankers Trust Co an As2,000 Spencer Trask & Co., members New York Stock Exchange sistant Secretary of the Treasury, a place he filled with great 2,000 ability and 0. P. Van Sweringen, President Allegheny Corp distinction. When I left the Treasury in 1918 Mr. Leffingwell 5,000 F. T. Ward, employee J. P. Morgan & Co remained 1,000 with my successor, Mr. Carter Glass, and also I believe with Mr. Mrs. Marie N. Watkins Glass's 30 successor, Mr. David F. Houston. Kenneth W. Watters N. A. Weathers, Chairman United Electric Securities Co. (General 1.000 After leaving the Treasury he became a partner of the firm of J. P. Electric affiliate) Morgan & Co. 1,000 White, Care & Co., Morgan lawyer 2,000 Ten years after I resigned as Secretary of the Treasury and four White, Weld & Co., members New York Stock Exchange years 5,000 George Whitney, partner J. P. Morgan & Co before I became United States Senator from California, Mr. Leffingwell Richard Whitney & Co., members New York Stock Exchange...- 20,000 offered me the opportunity of making three investments through 5,750 A. H. Wiggin, former Chairman Chase National Bank his firm. 8,500 J. P. Morgan & Co. Ira W. Wright (1) February. 1929, 500 shares of the stock of the Allegheny A. H. Wigren, G. Jordan and L. A. Keyes, as trustee for the bene- 1,000 Corp., fit of Andover Academy which I paid for in cash and which I sold at a net profit of $4.900. 5,000 Joseph Wilshire, President Standard Brands (2) January. 1929. 250 shares of common and 250 shares of preferred 50,000 Daniel G. Wing, Chairman First National Bank of Boston 2,000 stock of the United Corp., which was sold at a loss of approximate Winslow, Lanier & Co. investment bankers ly $400. 1,000 Gerrard Winston, director Oliver Farm Equipment Co (3) September, 1929, 1,000 shares of Standard Brands, which was sold 500 Wood, Struthers & Co., members New York Stock Exchange at a loss of $7,065. 2,000 William H. Woodin, Secretary of the Treasury The net loss on these three transactions was $2,565. Arthur Woods, President Rockefeller Center and Chairman of the 1.000 I have never been a "preferred client" of J. P. Morgan & Co. Presidents Emergency Unemployment Relief Committee, 1930-31 500 Clarence M. Woolley, Chairman American Radiator & Standard The participations to which I have referred came to me solely through Sanitary Corp my friendship with Mr. Leffingwell. Prior to this time I had 2,000 never had a Mrs. Noramae Wylie transaction with the firm of.T. P. Morgan & Co., nor have! 200 John M. Young had any trans100 action L. Edmund Zoeller, President Travelers Insurance Co with the firm since. 500 I have never borrowed from J.P.Morgan & Co. and.therefore, have never owed them anything. Inquiry Into Affairs of J. P. Morgan & Co. by Senate Committee Investigating Stock Market Operations-Details of Establishment of Revolving Credits for Foreign Banks-British Credit of $200,000,000 Largest-Advances to Spain, Italy, and Japan-Managing Commissions. Associated Press accounts from Cleveland, May 25, said: Newton D. Baker, former Secretary of War, whose name appeared on J. P. Morgan & Co.'s "selected list" as produced in the Senate hearing,said "the only preference granted by the Morgan Co. was sale of the stock at no profit to themselves." Mr. Baker was listed as the purchaser of 2,000 shares of Allegheny Corp. stock from the Morgan Co. at a price below the market, lie said he was Counsel for the Van Sweringen interests at the time the Allegheny Corp. was formed and considered the stock a good investment, "I still have part of what I bought," he said. "I never made money on it, I am very sorry to say." The details of operations by which J. P. Morgan & Co. established revolving credits for banks in England, Italy, Spain and Japan, and the commissions paid to the firm, were put into the record on May 25 at the hearing in Washington before the Senate Committee investigating the operations of Charles Gates Dawes on May 24, according to a Chicago J. P. Morgan & Co. Regarding these credits we quote the dispatch to the New York "Times," issued the following following from the Washington account May 25 to the New statement relative to a loan he obtained from J. P. Morgan & Co., which was mentioned in the list put before the York "Times": The facts as to the revolving credits were placed in the record amid a Senate Investigating Committee: mass of other data as to the operations of the Morgan firm in floating bond issues and making loans for the five years ending December 1931. Some reference was made to them a year ago, when Thomas W. Lamont "On Oct. 20 1931, while at London. I borrowed from J. P. Morgan & Co., $74,725 on a note payable on or before six months, with interest at the rate of 5%,secured by 2,700 shares of North American common stock and 2,000 Volume 136 Financial Chronicle value shares of Murray Corporation stock, with an approximate market of $120,000. 1932. "The note was paid in full, with interest, at its maturity, April 20, American "The loan was made in order to purchase 2,000 shares of North cbmmon stock for investment, which I still hold." A Boston dispatch, May 25, to the same paper said: president Charles Francis Adams,former Secretary of the Navy and now conceal" as of the Union Trust Company, to-day said he had "nothing to one of the J. P. Morgan & Co.'s "favored customers." preference in The Secretary's name appears as one of those who received buying Morgan-controlled stocks. is nothing "There "There is nothing to conceal," Mr. Adams said. purchase unusual about my transactions. I was given an opportunity to I invested. stock at a certain figure, which appeared to me attractive, and How good that investment is, I have yet to learn. before I "The point I wish to make is that I did this as a private citizen entered the service as Secretary of the Navy." The following from Geneva, May 24, is from the "Times" of May 25: Press telegrams were brought to Norman A. Davis to-day in connection with a loan from J. P. Morgan & Co. To inquiries he said: "It is true that two or three years ago I borrowed approximately $50,000 I ask of the Morgans, but I furnished collateral worth considerably more. own no favors because I have been obliged to pay out considerable of my reimbursed been yet money for service to the government, which has not and I have been unable to repay the entire sum." Mr. Davis's friends point out that in serving his country he has neglected his business most of the time since the depression began. We also take the following from the "Times" of May 25: At the offices of Norman H. Davis here it was explained yesterday that a loan by J. P. Morgan & Co. to Mr. Davis, mentioned in testimony before the Senate committee, was a business transaction growing out of the fact that Mr. Davis kept a checking account there. A statement given out by 0. W.Quinn, Mr. Davis's secretary, said: "With regard to the dispatches from Washington published to-day giving the testimony by J. P. Morgan relative to loans made by his firm to bank officers, directors and associates, in which mention is made of a loan to Norman H. Davis, which remains unpaid, the facts are as follows: "Mr. Davis has for many years kept a checking account with J. P. Morgan & Co., together with certain other New York banks, and has borrowed money from these banks, including J. P. Morgan & Co.,from time to time, always secured by ample collateral. "The loan to which reference was made to-day was originally negotiated In 1930, for $45,000, and subsequent payments have reduced it to $18,000. Interest has been paid at the current rates and the loan has at all times been secured by ample collateral. No favor was made in granting this loan, as any bank would have been willing to make the loan against the collateral. The loan was arranged with J. P. Morgan & Co. because it was there that Mr. Davis kept his checking account." Statement Submitted by J. P. Morgan on Duties and Uses of Private Bankers at Senate Inquiry Into Stock Market Trading—Private Banker a National Asset. Hearings into the affairs of private banking houses were begun in Washington on May 23 by the Senate Committee conducting the stock market investigation. This phase of the inquiry was opened with J. P. Morgan as the first witness. Eleven members of Mr. Morgan's firm had been subpoenaed, and, as we indicate in another item, Ferdinand Pecora, counsel for the subcommittee of the Senate Committee on Banking and Currency, conducting the investigation, has also issued subpoenas for the appearance at the hearing of other bankers, including partners in Kuhn, Loeb & Co. Mr. Morgan in appearing before the Senate Committee on May 23 submitted a prepared statement embodying his views as to "the duties and uses of private bankers," indicating his ideas regarding differences between the rights and privileges of a private banker and an incorporated bank. This statement we are giving herewith, further testimony of Mr. Morgan appearing elsewhere in this issue of our paper: Statement to Senate Committee by Mr. J. P. Morgan May 23 1933. Our desire being to be of use to the Committee, I have ventured to frame a brief statement of my views on the subject of the duties and uses of private bankers, which I hope the Committee will receive as an outline and, if it so desires, discuss with me or with some of my partners. In the first place, what are the differences between the rights and privileges of a private banker and an incorporated bank? As I see it, they consist chiefly in the fact that an incorporated bank receives from the Government, Federal or State, from which its charter comes, certain privileges, and for those privileges it has to conform to certain laws and regulations of the Government, applying only to the incorporated bank's business. The private banker has none of these privileges, but as he does not have to conform to any special Government regulation, he has a somewhat greater freedom of action. The private banker is a member of a profession which has been practiced 811103 the middle ages. In the process of time there has grown up a code of professional ethics and customs, on the observance of which depend his reputation, his fortune and his usefulness to the community in which he works. Some private bankers, as indeed is the case in some of the other professions, are not as observant of this code as they should be; but if, in the exercise of his profession, the private banker disregards this code, which could never be expressed in legislation, but has a force far greater than any law, he will sacrifice his credit. This credit is his most valuable possession; it is the result of years of fair and honorable dealing and, while it may be quickly lost, once lost cannot be restored for a long time, If ever. The banker must at all times so conduct himself as to justify the confidence of his clients in him and thus preserve it for his successors. firm, of which I have the honor If I may be permitted to speak of the the idea of doing only to be the senior partner. I should state that all times way, has been before our minds. class and in first a that business, first class 3659 the law, but have We have never been satisfied with simply keeping within the professional constantly sought so to act that we might fully observe which has been banded code, and so maintain the credit and reputation have no more we Since firm. the down to us from our predecessors in other men, we have made many power of knowing the future than any but our mistakes have mistakes (who has not during the past five years?), been errors of judgment and not of principle. is to take special banker private Another most important duty of the deposits is at all times sufcare that his banking position in regard to his of the aids provided by the ficiently strong, knowing as he does that none Reserve System Government for incorporated banks, such as the Federal •-•4 at his disposal. are or the Reconstruction Finance Corporation, he must be ready and duty: other one least The private banker has at his clients to the best of willing at all times to give disinterested advice to without reference to his his ability. If he feels unable to give this advice in the integrity of his belief own interests he must frankly say so. The have spoken above, as being advice is a great part of the credit of which I the best possession of any firm. the uses of private bankers. So far as to the duties. Twill now pass on to fact that, as they are risking These seem to me to be closely related to the may properly undertake they work, own their own money and doing their the management of an incertain responsibilities and businesses which with. Subject to the corporated bank might not be justified in dealing toward their depositors paramount need of keeping their banking position way assist in the effective and prompt sound and liquid, they can in a very largely industrialized development of the industries and productions of this situation, or of their world. They can also come to the aid of a general an extent that an infriends and clients, in times of panic and stress, to to do with its stockright a corporated bank might well feel it had not holders' money. serve as a channel Another very important use of the private banker is to meet its needs for exwhereby industry may be provided with capital to can serve well, banker pansion and development. To this end the private own reputation, since, as he has at stake not only his clients' interests but his sale and puts his he is likely to be specially careful. If he makes a public obligation of own name at the foot of the prospectus he has a continuing done which will is the strongest kind to see, so far as he can, that nothing contract with the Interfere with the full carrying out by the obligor of the desirable that holder of the security. To accomplish this it is frequently the securities of the private banker should be a director of the company, which he has sold. carelessly made As to the charge that is frequently and, as I believe, only say that, that bankers force their way into boards of directors. I can any partner of In my experience of over forty years, I cannot remember of the board the house taking a directorship except at the cermet request for the directors of directors of the company in question. It Is often useful of that sort, of a company who are not financial experts to have an expert This is why I In whom they have confidence, at hand for consultation. which endeavors to regret the tendency of so much present day legislation or which prevent bankers from being directors of one thing or another: could not be throws on directors such liabilities for errors for which they experience or means responsible as to make it too dangerous for any man of to assume such responsibilities. capital for We must not lose sight of the fact that the steady supply of which may hinder industry is an essential of our system, and that anything of the the flow of such a supply, or needlessly diminish the confidence the present investor in the safety of his investments, is undesirable. At depression, moment, owing to the destruction of confidence in this time of investment there is no flow of capital into industries, and consequently no to savings daily over turned possible for the savings of the people which are are banks and insurance companies to be invested. Just at present these the only sources from which industry can obtain its needed capital, as the savings of the incomes of private persons have been so greatly reduced by the depression and by the extreme weight of taxation on incomes and the estates; and as the depression, for the first time as far as I know in money in any history of the world, is so widespread, no country can lend other. for industry, Though, at the present time, there is no demand for capital force the organithis condition will pass, and we should not by any means there is again zation for distribution of securities out of business, lest, when of distria legitimate demand for capital, it be found that the machinery we are) a (as is bution has disappeared. No private banker whether he with the directly deals he whether wholesale merchant of securities, or had no other sort of ultimate investor, could continue in the business if he business to fall back on in such times as the present. should be perThe question has been raised whether a private banker New York very wisely, mitted to accept deposits. The laws of the State of the practice. as I think, and under careful restrictions have sanctioned our holding ourselves out Those restrictions prevent, among other things, interest on deposits of less as depositaries for the public and from paying from our having done than $7,500. The bulk of our deposits has come agents for coupons, or paying the work for some client, or because we are the custodians of sinking funds. If we, for instance, should be deprived with us, we should of the right to receive deposits which clients wish to leave very probably have to disband a large part of our organization and thus service in the important that should be less able to render in the future we have rensupply of capital for the development of the country which dered In the past. In regard to the presence of private bankers on the boards of directors of other banking institutions, I believe it to be true that none of the directorships held by any private banker in other banking institutions is held at his request, but because of the strong desire of those in charge of the institution of which he becomes a director. This certainly is the caselin our own office and I believe in other cases too, although of course I cannot speak for anybody but our own firm. Personally, I have always been averse to banking directorships for my partners, but I felt constrained reluctantly to consent, because of my belief that it is one of the duties of a private banker to be of use in the general affairs of the community, and that the only way people can be helped is in the way they wish to be helped. Therefore, if friends in whom we have confidence ask us to serve them by advising with them, we are bound to give them the best advice we can. No law could prevent any one from discussing problems with, and seeking advice from, friends in whose judgment he has a confidence which is the result of years of experience and co-operation, and I do not see any need for legislation which makes such consultation more difficult. The private banker is also useful in offering a sort of neutral territory where, at times, the management of the incorporated banks may meet and discuss the general problems without rivalry or competition. I believe if you were to ask the heads of all the great banks in New York who have had experience of both good and bad times, you would be assured that the miss d hadha ground, neutral ehna niuch offering thveeyser : n fa ercr haveb ve bankers,andwo beveed ore smtsee, would pripurpose, out o l uf State or either Federal. business by law, To sum up, I state without hesitation that I consider the private banket 4 . a national asset and not a national danger. As to the theory that he may Financial Chronicle become too powerful, it must be remembered that any power which he has comes, not from the possession of large means, but from the confidenc e of people in his character and credit, and that that power, having no force to back it, would disappear at once if people thought that the character had changed or the credit had diminished-not financial credit, but that which comes from the respect and esteem of the community. The dispatch also said: Mr. Morgan testified that all these loans had been paid except those to Norman H. Davis, F. C. Dumaine, Artemus L. Gates, Harvey D. Gibson, Mortimer N. Buckner, Charles E. Mitchell, Seward Prosser. Lansing P. Reed, H. C. Stevens and Richard Whitney. Inquiry into Affairs of J. P. Morgan & Co. by Senate Committee Investigating Stock Market Operations -Banks and Trust Companies Holding Firm's Deposits. A list of banks and trust companies in which J. P. Morgan & Co. have maintained deposits since Jan. 1 1927, together with balances of such accounts, was submitted by J. P. Morgan on May 24 to the Senate Banking and Currency Committee inquiry into the operations of Mr. Morgan's firm. From the New York "Times" dispatch from Washington May 24 we quote the list as follows: Inquiry into Affairs of J. P. Morgan & Co. by Senate Committee Investigating Stock Market Operations -Morgan Loans to Bank Officials. During the course of the hearing in Washington on May 24 by the Senate Banking and Currency Committee into the operations of J. P. Morgan & Co., Mr. Morgan gave to the Committee a list of all individuals who were officers or directors of banks and who received loans from J. P. Morgan & Co., or Drexel & Co., during the five years from Jan. 1 1927 to Dec. 31 1931. The names on this list and the bank with which each individual was identified, either as an officer or director, were as follows according to the Washington advices to the New York "Times": E. F. CURRY (now dead)-Continental Bank of Chicago. W.P. CONWAY-Guaranty Trust Co. of New York. JOHN W. DAVIS-Guaranty Trust Co. of New York. NORMAN H. DAVIS-The Bank of New York & Trust Co. CHARLES G. DAWES-Central Trust Co. of Illinois. F. C. DUMAINE-First National Bank of Boston. ARTEMUS L. GATES. HARVEY D. GIBSON, MORTIMER N. BUCKNER,,joint account-New York Trust Co. PHILIP G. GOSSLER-Guaranty Trust Co. ALBERT H.HARRIS-Guaranty Trust Co. CLIFFORD M.LEONARD-(Mr. Morgan could not name the bank with which this borrower was connected). H.B. MANVILLE-Pleasantville (N. Y.) National Bank. EDGAR L. MARSTON-Guaranty Trust Co. of New York. THEODORE F. MARSELES (now dead)-Seaboard National Bank. ALBERT G. MILBANK-Seaboard National Bank. CHARLES E. MITCHELL-National City Rank. F. K. MORROW-(Mr. Morgan was unable to name his bank). G. M.-P. MURPHY-Guaranty Trust Co. of New York and the New York Trust Co. WILLIAM C. PROSSER-Guaranty Trust Co. of New York. SEWARD PROSSER-Bankers Trust Co. LANSING P. REED-Guaranty Trust Co. SAMUEL W. RAYBURN-Guaranty Trust Co. H. C. STEVENS-Guaranty Trust Co. ?Ig COW0OWN7O4 CA 00 cv el.0 GP N 17-2 Piolclort^"1. ‘o es .o o co 0;-, PIP° , t..o mr..4 4. . CIN N co " 0.1 0 d 'o v."0 ""N NON 0, 00 vol. Ww co m mmo.trwom 44,-,,,io csiov.v.o. ,-.0to cqvc4 '00c." -. N"t , CNC, wi...6 WNW 00 VNV t:GOO cm co " NCO v•V r-I AV " 0 , 1 .1. 1 ,0 mi om r: co ui O iv Ot , V 'SM. 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"Neje 1 1 OWWW 1 r. 4 toM 22 88 82til8' 55 r.; .cl, -:,,D. -'CO GP Co 422 88iti 2 2';118482 CA N M 71 t.0N00 V is CV CA CA I. 00 466 MN .1.31t,c0 w "NM . py .01 " Ci v MM N" m4. g CA W 0 '10 00) ot; N 680.381.938.63 703.909,403.69 CO cm q coca q 1-1 ,t.r, . .00CAMMM 0000 M t, "et! t: CP 00 CA Or: Ci00M . , ..VCi0-0000006.4. cm wN yO oo '0 0) cc' 09 0" 0-0 "" MO, ,-4 . co 00000WWW0-000 WM 0 01 , COO 01000-00-C t-" t.: 0-0)0 )t-0 t. eq co COQ ai ci co t- co co t- .0 CA CD 00 C. ,f, CO0 co M. O.'1. M: tO. M.al. 1. M. N." 4:N. 1. V: . 1 t ;X g t l. M.up -"0 CO p4 1, .-q 00 01 -'00 CO 00 co cs CO CO mt-eq.-.11 .mot-m-.0o , mn m w0 CO .1R°0 . .gcrol °D.'S '1 °!'ll N "1 , NO 0000 Dec. 31 1927. Dec. 31 1928. Mr. Morgan submitted also a list of banks and trust companie s in which Drexel & Co. have maintained deposits since Jan. 1 1927, together with balances of such accounts, as follows: Bank. Balance March 24 1933. Baltimore Trust Co.(formerly National Union Bank of Maryland). Account closed Feb. 19 1932. Continental Illinois National Bank & Trust Co.of Chicago_ -$8,465.25 Peoples-Pittsburgh Trust Co 21.361.99 Mellon National Bank, Pittsburgh 88,064.08 Union Trust Co., Pittsburgh 84,054.46 Philadelphia National Bank 3,140,846.19 First National Bank, Philadelphia 2,760,441 .87 Corn Exchange National Bank & Trust Co., Philadelphia_ __ _ 103,736.36 Fidelity-Philadelphia Trust Co 363,595.6 9 Girard Trust Co., Philadelphia 233,959.16 The Pennsylvania Company, &c., Philadelphia 694,789.59 Integrity Trust Co., Philadelphia 1,087,500.00 Guarantee Trust & Safe Deposit Co., Philadelp hia None Federal Reserve Bank of Philadelphia. Account opened March 8 1933 47,650.00 WOO 629 - 7 - 3 22-1061680.381,938.63 703.909.403.69 CO a , UP 0cO ,-. clo.'" -, colo r- ,.o C.. 424,708,095.56 Consolidated Statement of Condition of J. P. Morgan & Co. and Drexel & Co.-Comparative Figures of Assets and Liabilities for Years 1927-1932. At the hearing of J. P. Morgan on May 23 before the Senate Committee investigating stock market trading, the following statement of condition was submitted to the Committee by Mr. Morgan: CO 000 mo 0 ' e*82 22558 '41 ei Bank. Balance March 24 1933. Bankers Trust Co., New York $2,240,565.32 Chase National Bank, New York 1.411,799.78 Central Hanover Bank & Trust Co., New York 1,594,116.52 Chemical Bank & Trust Co., New York 1,113,180 .03 Corn Exchange Bank Trust Co., New York 938,719.97 First National Bank, New York 2,431,732 .34 Grace National Bank, New York 100,006.46 Guaranty Trust Co., New York 2,609,591.80 Irving Trust Co., New York 1,399,495 .72 National City Bank, New York 1,265,921.74 New York Trust Co., New York 1,251,734.65 Manufacturers' Trust Co., New York,account opened Dec.29 1932 335,878.12 First National Bank, Boston 109,993.55 National Shawmut Bank, Boston 243,508.06 Second National Bank, Boston 150,437.71 New England Trust Co., Boston 14,840.00 American Exchange Irving Trust Co., New York. Name changed Feb. 1 1929. Central Union Trust Co., New York. Bank merged May 16 1929. Hanover National Bank, New York. Bank merged July 1 1929. National Bank of Commerce, New York. Bank merged May 6 1929. National Park Bank, New York. Bank merged Aug. 23 1929. Farmers Loan & Trust Co., New York. Account closed July 19 1929. Mechanics & Metals National Bank branch. Bank merged Oct. 31 1927. Old Colony Trust Co., Boston. Bank merged Jan. 2 1930. The same dispatch said: May 27 1933 IVIYRON C. TAYLOR-First National Bank, New York. A. A. TILNEY-Bankers Trust Co. RICHARD WHITNEY-Corn Exchange National Bank. 1 3660 ..4 CO , i 8 E. 0 E. g S1 A , i : .gv 81 m a . en,. a O.?. OtP a t1P 205 .3 . . .F,: 0..0 3. S -a.w 0 _ =to auszam g 1 r =PqVI g5 wl= .15.0,E 'A' 'Ci='mSE:.P44-Stm tSg EgEE.51 giSEg . ,1M 0 4 .0 5. '..==.0.... ;17... a.E5M: 51E1g nfl=.3 cm,00 g m.s. : , cor. b a 1 5 gg ggig Wig 40 c4 A 1 .1.= imggi imfErlm Z 010 SP .. p a a.5 -1 zcCA, 13.4 B § E ,,° English Tax Laws Bar Capital Loss Deductions -J. P. Morgan Payments There Explained by Experts . The following from Washington, May 24, is from the New York "Herald Tribune": Under an interpretation of the British income tax laws by the Commercial Intelligence Division of the Commerce Department, losses of capital, generally cannot be deducted from income tax returns in Great Britain. The explanation was made that capital losses which are taxable are defined as the loss of money invested as capital. Losses arising from dealing in securities would be defined as trading losses and deductable from income tax returns, the bureau explained. It was added that capital gains are not subject to taxation, but that trading profits are taxable. The point arose after J. P. Morgan had testified to-day that he had paid income taxes in Great Britain for the last two years, but had not paid in this country Inquiry Into Affairs of J. P. Morgan & Co. by Senate Committee Investigating Stock Market Tradin gJ. P. Morgan's Comparison of Banking Powers . From its Washington bureau the New York "Herald Tribune" gave as follows J. P. Morgan's statement captioned "Comparison of Power and Restrictions on National Banks, New York State Banks and Larger New York Private Bankers": Volume 136 3661 Financial Chronicle RESTRICTIONS AND DISABILITIES. NEW YORK STATE BANKS. Same. NATIONAL BANKS. Limited to capital (with further individual liability of stockholders for par value of their stock unworkable as practical matter). Two examinations required each year. Mast make at least three repotts each year and further special reports as required by Comptroller, all in form prescribed by him. Reports to be published In local newspaper. Must report all dividends declared and amounts of net earnings in excess thereof and report annually list of shareholders. Liability Examinations and reports__ Seven per cent to 13% of demand deposits (13% in New York City) and 3% of time deposits required. Reserves No restrictions. PRIVATE BANKERS (AS DEFINED). Unlimited personal liability. Two examinations required each year; also four quarterly reports which must be pubbashed in local newspaper. Superintendent may requLe any further reports, all in Prescribed form, and may subpoena witness and require production of relevant papers. Unless surplus equals 20% of capital must report all dividends with net earnings. Must keep books and records in conformity with orders promulgated by Superintendent. Twelve per cent to 18% (18% in New York City) of demand deposits required (in case of trust companies 10% to 15%— 15% in New York City). No restrictions. Receiving deposits No restriction. No restriction. No restriction. No restriction. Paying interest on deposits__ • Soliciting business by advertising as bank No restrictions. Receiving f No restriction. money for transmission MENTIONED). POWERS (IN ADDITION TO FOUR LAST NEW YORK STATE BANKS. NATIONAL BANKS. Substantially same. Cannot loan more than 1-10th of its capital Loaning money stock and surplus to one borrower. Also subject to restrictions as to loans on real estate, Ace. May become members of Federal Reserve Federal Reserve f Required to be members of Federal Reserve System and possess Its privileges. membership System and consequently have privilege of and privileges( rediscount and clearing No authority. f Have authority to obtain and issue circulating Issuance of currency..___ I notes. same trust powers (where authorized Have Reserve Have (when authorized by Federal by Superintendent of Banks). State trust Trust powers__ Board) general fiduciary powers—to act as companies have such powers without such trustee, executor, administrator, guardian, authorization. receiver, ctc. May be designated as depository of State Depositary of May be designated as such by Secretary of funds by State officers. public funds 1 Treasury. I In general cannot do so except to protect self Owning stock of other on bad debt, atc. corporations { In general cannot own real estate except for Owning real estate own office building and except where purchased to protect bad debt. 'State bank' means any bank incorporated under laws of State of New York. What is true Of it is generally true of a New York trust company. "'Private banker,' as used here, means only larger unincorporated New York City banking institutions which do not come within Section 150 of New York banking law. Section 150 is the heart of the New York restrictions on such private bankers. If a private banker falls within it he becomes subject to State supervision and iequirements, including examinations, quarterly reports, the reserve requirements applying to banks, dm. Same. State trust company may own stock provided investment does not exceed 10% of its capital and surplus. Substantially same. "Section 150 applies to every incorporated banker who either -1. Uses the word 'bank,' banker.' dm., on any sign stationery, circular or advertising matter or who solicits deposits by signs or advertising, or "2. Pays interest on any deposit of less than $7,500 (not applying, however, if aggregate of deposits of leak than $7,500 receiving interest do not exceed 2% of banker's total deposits), or "3. Receives money in such sums that the average of all separate deposits from all depositors during twelve months is less than $1,000, or Payment of 50% to Depositors to Be Made Immediately by Harriman National Bank & Trust Co.—Loan of $7,000,000 Made by Reconstruction Finance Corporation—Announcement by Secretary of the Treasury Woodin. A loan of about $7,000,000 from the Reconstruction Finance Corporation on May 24 to Henry E. Cooper, Conservator of the Harriman National Bank & Trust Co. of New York City, makes possible immediate payment to depositors of the institution of 50% of their credit balances. The loan, which was arranged by Secretary of the Treasury William H. Woodin, was advanced on the bank's unpledged assets, In exclusive of a claim against Clearing House banks. announcing that the loan had been arranged, Secretary Woodin said that "the funds are being deposited with the Manufacturers Trust Co. and Conservator Cooper will forward checks to all depositors as rapidly as possible." At the same time, Mr. Woodin said that he had asked the Comptroller of the Currency either to bring legal action against the New York Clearing House Association or to arrange for arbitration, to enforce the claim of the bank against the Association. This claim involves more than $7,000,000, and was said at the Treasury Department to have developed from an agreement volunteered by the Clearing House Association, which announced its willingness to accept liability for losses provided the Treasury Department would take no immediate action, after a bank examination had revealed that the institution was in distress. The statement issued by Mr. Woodin on May 24 read as follows:. that I believed the On April 10 I authorized a statement to the &effect Trust Co. were adequate assets and claims of the Harriman National Bank to meet its liabilities. be necessary for the conIn order to pay the depositors 100% it would servator of the bank to obtain a loan from the Reconstruction Finance Corporation, pledging as security its assets and its claim against the New York Clearing House banks. No State or Federal examination or supervision except for State to determine whether banker is within scope of Sec. 150. No publication of financial statement—such publication would involve possible violation of advertising restriction of Section 150. No particular reserve reached. Cannot without becoming subject to State supervision and requirements, receive deposits if average of all deposits from all depositors within twelve months is less than $1,000. Cannot, without becoming subject to supervision and requirements, pay interest on deposits of less than $7,500—with a "saving margin provision." Providing for exemption of deposits of less than $7,500 if total of such deposits on which interest paid does not exceed 2% of total deposits. Cannot, without becoming subject to State supervision and requirements, solicit deposits by means of signs or advertising or use word "bank," "banker," drc. on any sign, stationery, circular or advertising matter. Cannot, without becoming subject to State supervision and requirements, receive for transmission an amount less than $500— unless $100,000 Government securities deposited as security therefor. PRIVATE BANKERS(AS DEFINED). No restriction. Cannot be members of Federal Reserve System and have no rights consequent thereon. No authority to Issue currency. No trust powers In real sense—but can act as transfer agent, registrar or fiscal agent (as can also National and State banks). Cannot act as such depository. No restriction on ownership of stock. No restriction. "4. Receives money for transmission in amounts of less than 3500—unless $100,000 Government securities are deposited as security therefor. "In general—private bankers, not being Incorporated, do not depend upon the State for their grant of powers and consequently have in general as broad powers as those of individuals, except where expressly restricted by law. No attempt has been made to enumerate such inherent general powers or various less important differences between private bankers and incorporated institutions not deemed material here." House banks had been It later developed that some of the Clearing this claim without advised by counsel thefcould not make any payment on Therefore. the court action or arbitration definitely fixing their liability. secured for a Reconstruction Finance Corporation would be properly loan sufficient to pay the depositors in full. bring legalizaI have requested the Comptroller of the Currency to either as protion against the Clearing House banks, or arrange for arbitration Navided by law, for the purpose of enforcing the claim of the Harriman banks. tional Bank & Trust Co. against the Clearing House adjudication. final for required be I cannot predict the time that will I have, therefore, arranged for the conservator of the Harriman National Bank & Trust Co. to borrow from the Reconstruction Finance Corporation on its unpledgod assets exclusive of the claim against the Clearing House to the depositors of banks, sufficient to make an immediate distribution 50% of their net credit balance. The funds are being deposited with the Manufacturers Trust Co. to meet this payment and Conservator Henry E. Cooper will forward checks to all depositors as rapidly as possible. Trial of Joseph W. Harriman Postponed—Former Banker Disappears from Nursing Home and Attempts Suicide When Found by Police on Following Day—Condition Not Serious—Will Probably Be Brought to Trial After Conclusion of Proceedings Against Charles E. Mitchell. The trial of Joseph W. Harriman, former President of the Harriman National Bank, which was originally scheduled to begin on May 22, has been postponed until May 29, although it is anticipated that on that date it will be adjourned again in order to permit United States Attorney George Z. Medalie to complete the prosecution of Charles E. Mitchell on charges of income-tax evasion. Mr. Harriman is under an indictment which charges him with having made 13 false entries in the books of the Harriman National Bank. A week ago, on May 19, great anxiety was experienced by friends and relatives of Mr. Harriman when he disappeared from a nursing home in New York City, where he had been a patient, leaving behind him notes which apparently indicated suicidal intentions. A city-wide search was immediately instituted, with police authorities using all available 3662 Financial Chronicle sources of information to endeavor to trace the missing banker, who was at liberty on bail. It was not until the following afternoon, however (on May 20), that Mr. Harriman was found by police at the Old Orchard Inn, at Roslyn, Long Island , where he had gone after walking out of the nursing home. Relatives were summoned after the former banker admitt ed his identity, but he stabbed himself several times with a kitchen knife while police were absent from his room. He was taken to a nearby hospital, where his wounds were pronounced not serious, and several days later he was able to return to the nursing home in New York City. Spring Meeting of Board of Governors of Investment Bankers' Association of America at Sulphur Springs, W. Va.—Report Declares White Mandatory That States and Municipalities Find It Some Method to Overcome Tax Delinquencies—Six Points in Municipal Economy Named. A six-point program for more practical econo my and more permanent efficiency in taxation and public expenditures is laid down in the annual May report of the Municipal Securities Committee of the Investment Bankers Association of America. The report was made public at the Association's office in Chicago on May 17 at the close of the annual spring meeting of the Association's Board of Governors held at White Sulphur Springs May 13-17. The report gives first the salient developments affecting municipal securities and municipal finances in various States, and then a "prog ram of constructive economy." The six points of the program are: 1. Overlapping governments should be consolidated because "local taxing and administrative units have become too numerous for efficient operation. This condition has grown out of various circumstances during our recent period of expansion. Many of these units have become burdensome upon the taxpayer. Frequently they are too small to render economical services and they cannot support the cost which their separate entity requires. The tendency toward reorganization and consoli dation Is showing itself in some of our communities, but it has not as yet accomplished sufficient results." 2. Municipal governments are indispensable to the general welfare and must be maintained at whatever odds. Economies must be maintained and tax levies reduced where possible, but certain taxes must be paid because the municipality has been not only the first line of defense against distress and starvation, but certain taxes must be paid if our health, lives and property are to be safe. A closer understanding and co-operation between officials and taxpayers is necessary to further efficiency and economy and to avoid destructive tax strikes that cost more than they gain. 3. Tax bills should be sent out at least quarter ly and perhaps even monthly. Under the present system revenue s begin to come in six months to a year after the related expenditures begin. This necessitates shortterm borrowing. Other difficulties in the present system are "too numerous and too evident for enumeration. Spreading the tax payments over the entire year should overcome a large part of these troubles. There are some obstacles in connection with this program, of course, but they are by no means insuperable. The annual saving in the cost of tax anticipation financing and the satisfaction of operating on a cash basis would justify the change." 4. More frequent tax collections should provide a quarterly or monthly control of expenditures. Operation outgo would be curtaile income; but any plan for improvement in financial adminis d according to tration demands that accounting methods be raised to a higher level. 5. State supervisory control of municipal finances in event of default is recognized as a desirable method of dealing with defaults , since municipal corporations are creatures of the State and it is the duty of the State to administer the finances of its subdivisions in event of a breakdown in a community's credit. New Jersey and Massachusetts provide receivership commissions to administer local finances. Ohio. Michigan and North Carolina have State agencies to supervise and assist in debt refunding. The Canadian provinces of Ontario and Quebec have permanent commissions, which, on petition by a municipality or its creditors, take complete charge of the community's financia l activities, either before or after defaults. 6. "It is mandatory upon our States and municipa lities to find some method of catching up with themselves on tax delinqu encies. tions of past due obligations are one of the most serious " Accumulathreats to local government credit. Tax levies should be reduced where possible, but this year apparently requires "some sort of a levy over and above operating expenses and debt service. This excess, as small as special situations can stand, should be set up as an additional asset to offset obligations which already existed because of these delinquencies. " The report was presented by E. Fleetwood Dunst an, Bankers Trust Co., New York, Chairman of the Commi and was signed by 21 members of the Committee as ttee, follows: Clifford S. Ashmun of Minneapolis. R. Emerson Ayers of Philadelphia. Joseph E. Chamber of Buffalo. Eugene I. Cowell of New York. James A. Cranford of Jacksonville. John W. Denison of t Wage>. Clifford T. Diehl of Cincinnati. Howard II. Fitch of Kansas City. George C. Hannahs of New York. George P. Hardgrove of Seattle. Henry Hart of Detroit. J. G. Hickman of Vicksburg. Milton G. Hulme of Pittsburgh. Royal D. Kercheval of St. Louis. Robert W. Knowles of Boston. John S. Linen of New York. Francis Moulton of Los Angeles. D. T. Richardson of Chicago. A. 3. Spencer of Toledo. E. Warren Willard of Denver. Meade H. Willis of Winston-Salem. Suspension of May 27 1933 Holidays and Opening of Banks for Business. Since the publication in our issue of May 20 (page 3469) with regard to the banking situation in the various States, the following further action is recorded: FLORIDA. A charter has been applied for by the First National Bank of Tarpon Springs, Fla., according to advices from that place on May 20 to the "Wall Street Journal," which added: The new bank will have capital of $50,000 . It will take over the affairs of the present bank which has not been re-o pened since the bank holiday. Half the capital will be taken by the Reconst ruction Finance Corp. ILLINOIS. The following Illinois State banks were given re-open on May 17, according to the Chicag authority to o "Journal of Commerce" of that date: First State Bank of Zion City; the Peoples' State Bank of Flat Rock; State Bank of Cherry, at Cherry; Farmers' State Bank at Ferris, and the Farmers' & Merchants' Bank at Carlyle. It is learnt from the St. Louis "Globe -Democrat" of May 18 that two Illinois State banks, the Campus State Bank of Campus and the State Bank of Marissa at Marissa, were to re-open on an unrestricted basis on that date under authority granted by the Illinois State Auditor. The directors of the Reconstruction Finance on May 19 authorized the purchase of $200,0 Corporation 00 worth of preferred stock of the First National Bank of Joliet, Ill., a new institution, contingent upon subscription of a like amount of common capital stock by those intere sted in the organization of the new institution. In its issue of May 19, the Chicago "News" reported that Stitte Auditor Barrett of Illinois had author ized ing banks, closed since the banking holiday, the followto reopen on that day: State Bank of Paw Paw, Villa Park Trust & Savings Bank, Villa Park: People's State Bank of CoBison and First State Bank of Tilden. The Chicago "Journal of Commerce" of May 19 that the First National Bank of Coal City, Ill., reported has been licensed through the Federal Reserve Bank of Chicago, to resume operations on an unrestricted basis. The Chicago "News" of May 23 reported that reorganization plans for the City National Bank & Trust Co. of Evanston, Ill., were expected to be completed in a few the institution reopened shortly under the title days and of the First National Bank & Trust Co. of Evanston. The "News" went on to say: Majority of the $300.000 of new capital required for reopening has been raised. The bank will have a surplus of $37.500. Half of the capital will be in 6% preferred stock. On May 22, two Illinois State banks, the Bank of at Wyanet and the Carterville State & Saving Wyanet s Bank at Carterville, reopened on an unrestricted basis. The following day, May 23, two more banks were reopened in that State without restrictions. These were the Lena State Bank at Lena, Ill., and the State Bank of Davis at Davis, Ill. INDIANA. That the Batesville State Bank at Batesville, Ind., has reopened for business is indicated in a dispatch from that place on May 20 to the Indianapolis "News," from which we quote in part as follows: As a result of the reopening of the Batesville State Bank under terms outlined some time ago by the State Banking Depart ment, an atmosphere of increased confidence has been in evidence in this in the surrounding agricultural districts. . . . community, particularly Following the bank holiday, the old Batesville institut ion was taken from its former Class A rating and a demand was served on directors that 50% of the deposits be segregated, a 50% assessment be levied on stockholders and that $45,000 in new stock be sold. Conditions laid down by State Banking authorities were met and the capital stock of the new institution thus was increased from $55,000 to 5100,000. Where the old bank had less than eighty stockholders there now are more than 300. IOWA. The Ames National Bank of Ames, Iowa, which with its affiliate, the Ames Trust & Savings Bank, closed Feb. 16 last, has surrendered its National charter and merge with d the Ames Trust & Savings Bank, the enlarged institution opening without restrictions on May 17. Advice from s Ames to the Des Moines "Register," from which the above information is obtained, furthermore said: One-half of the deposits were made available immediately to depositors. Stockholders have agreed that no dividends will be declared upon capital stock until $75,000 has been earned towards a special fund to release the other half of the deposits, which at present are guaranteed by the bank's least desirable assets and a $10,000 fund established by stockholders. Capital stock amounts to $75,000. It is learnt from the Chicago "Journal of Commerce" of May 19, that two Iowa National banks, which formerly were Financial Chronicle Volume 136 administered by conservators, the American National Bank of Arlington and the First National Bank of Colfax, have been licensed to re-open by the Federal Reserve Bank of Chicago, and that two other Iowa banks, which recently became members of the Federal Reserve System, have also been granted licenses. They are the Holstein State Bank of Holstein and the Ida County State Bank of Ida Grove. On May 19 the Board of Directors of the Reconstruction Finance Corporation authorized the purchase of $60,000 of preferred stock in a new bank in Waterloo, Iowa, to be known as the National Bank of Waterloo. The authorization is contingent upon the subscription of a like amount of common stock by those interested in the organization of the new institution. KENTUCKY. The purchase of preferred stock to the amount of $100,000 in the new Paintsville National Bank of Paintsville, Ky., was authorized by the directors of the Reconstruction Finance Corporation on May 19. The authorization is contingent upon a similar amount of common stock being raised by interests in Paintsville. The Deposit Bank of Smith's Grove, Warren County, Ky., of which John A. Logan of Bowling Green, is President, has taken over the assets of the Farmers' Bank at Smith's Grove and guaranteed all indebtedness of the sister institution, according to Bowling Green advices on May 22 to the Louisville "Courier-Journal." The dispatch added: The Farmers' Bank, which was unable to open except on a restricted basis following the closing of the banks under proclamation of President Roosevelt on Mar. 5, had deposits of about $105,000. The capital stock and surplus of the institution was $32,000. Stockholders in the Farmers' Bank will lose their investment unless they collect on $21,000 worth of notes which the Deposit Bank did not include in the deal. LOUISIANA. The $360,000 of capital and surplus required from the depositors of the Bank of Baton Rouge, Baton Rouge, La., and its affiliated institution, the Union Bank & Trust Co., for the formation of a new national bank with the aid of the Reconstruction Finance Corporation, has been more than subscribed. A dispatch from Baton Rouge on May 17 to the New Orleans "Times-Picayune," reporting this, continuing, said: Frank H. Kean, Chairman of the solicitors' committee of the Bank of Baton Rouge, and Carroll S. Mayer, Chairman of the same committee of the Union Bank & Trust Co., both announced late to-day (May 17) that more than the 15,000 shares required from the depositors of each bank had been subscribed and that the banks are now in position to go forward with the arrangements with the Reconstruction Finance Corporation for opening the new national bank in the near future. When the new bank is opened, according to an announcement made about two weeks ago, just before the opening of the campaign for funds for the capital and surplus, it will be able to release 65% to the depositors of the Union Bank and 45% to the depositors of the Bank of Baton Rouge, In addition to the 5% already released The stock subscriptions, amounting to 20% of the deposits in the case of the Union Bank depositors and 12% of the deposits in the case of the Bank of Baton Rouge depositors, will be deducted from the first sum released. Approximately $3,000,000 of deposits, in addition to public funds, will be released when the new national bank is opened. . . . The stockholders of the new bank will elect the board of directors, which, In turn, will elect the officers, These officers must be acceptable to the Reconstruction Finance Corporation, which is to subscribe to $300,000 preferred stock in the new bank. 3663 was formally opened for business. The opening of this bank made available to depositors 30% of the "frozen" funds of the old bank, or approximately $18,000,000, in addition to 5% previously paid. The new institution begins with a capital structure of $3,000,000, of which $1,500,000 is preferred stock (purchased by the Reconstruction Finance Corporation); $1,200,000 common stock; $200,000 surplus and $100,000 undivided profits. It reported as of the opening day deposits of $17,600,565.66 and assets of $20,600,565.66. A. D. Geohegan and Oliver G. Lucas continue as Chairman of the board and President, respectively,of the new institution. MARYLAND. The Board of Directors of the Reconstruction Finance Corporation to-day authorized the purchase of $1,000,000 of preferred stock in the Baltimore National Bank, Baltimore, Md., a new bank to succeed the Baltimore Trust Co. The preferred stock purchase authorization is contingent upon the subscription of a similar amount of common stock by those interested in the organization of the new bank. From the Washington "Post" of May 23, it is learnt that the Chevy Chase Savings Bank (Chevy Chase, Md.), one of the 13 restricted banks in Washington, D. C., will shortly become a branch of the Riggs National Bank of that city. Continuing the paper mentioned said: This plan was made public by John C. Walker, conservator of the Chevy Chase Bank, who declared that an agreement had been reached following a conference with Robert Y. Fleming, President of the Riggs Bank, and members of the Chevy Chase Board of Directors. Certain assets of the Chevy Chase Savings Bank will be purchased by the Riggs institution, it was announced, thus making available to depositors 60% of their deposits in the former bank. The purchase is being made on the so-called Spokane plan, it was declared, which required approval of the Comptroller of the Currency and the District Supreme Court. Assets not purchased would remain in the hands of the conservator to be liquidated for further benefit of depositors. Hearty approval of the plan has been voiced by the majority of Chevy Chase depositors, Mr. Walker said, and a permit will be issued by the Treasury Department as soon as final arrangements are completed. Following consummation of the plans, the name of Chevy Chase Branch of Riggs National Bank will be adopted. Depositors of the Towson National Bank of Towson, Md., have been informed of a plan of reorganization for the institution providing for the waiver by the unsecured depositors and creditors of 25% of their respective claims and the raising of $135,000 additional capital. The plan, according to Stuart Cassard, President of the institution, has been approved by the Comptroller of the Currency, and its adoption by the stockholders and depositors will permit the re-opening of the bank on an unrestricted basis. The Baltimore "Sun" of May 19, authority for the foregoing, continued as follows: The new stock, proposed under the plan, will have a par value of $100 a share and $100,000 of the total will be appropriated to capital and $35,000 to surplus. The plan will make possible the elimination of doubtful items and the marking down of bonds to the values fixed by the bank Examiner. It was stated. Certain assets included in the items charged off as doubtful and as lost will be set aside, subject to the right of substitution, and any recoveries will be distributed among the depositors and creditors affected by the waiver in proportion to their respective interests, the notice stated. In view, however, of the "importance to the community that the public activities" shall be carried on, it was stated that the directors believed it to be advisable, although not essential to the re-opening of the bank, that the unsecured depositors "shall consent to the repayment of the 25% of public funds, affected by the waiver, out of the first money recovered .from the assets so set aside and to accomplish this purpose it is necessary that an additional consent shall be given by depositors." The Hibernia National Bank in New Orleans, the new institution which replaces the Hibernia Bank & Trust Co. of New Orleans, La., opened for business on Monday of this week, May 22, thereby releasing approximately $14,MICHIGAN. 000,000 of public funds and private deposits, representing The People's State Bank of Caro, Mich., on May 18 was 43% of old deposits, in addition to 5% previously paid. reopened without restrictions, according to Associated Press The new bank starts with combined capital, surplus and advices from that place on the date named which went on undivided profits of $3,000,000, of which $1,500,000 is owned to say: Reopening of the bank was made possible through a 300% assessment by 3,543 stockholders and $1,500,000 is preferred stock which has been subscribed and paid for by the United States against stockholders. The Caro plan was described by State Banking Department officials Treasury through the Reconstruction Finance Corporation. as being the most unusual In the State, it being the first in which the stockholders shows in have voluntarily raised their assessment above the 100% limit a as of the condition statement of opening date It deposits of $14,165,583.59 and total resources of $17,165,- set by law. The Crossman & Williams State Bank of Williamston, 583.59. The Comptroller of the Currency has granted trust powers to the new institution, which means that it Mich., has been licensed to reopen on an unrestricted basis, will be permitted to operate a complete trust department, according to Chicago advices on May 22 to the "Wall Street including the right to act as executor, trustee, adminis- Journal." MINNESOTA. trator, custodian, &e. The following Minnesota State banks were reopened for The personnel of the new bank is as follows: R. S. Hecht, regular business on May 18, according to an announcement Chairman of the board of directors; A. P. Howard, Chairman by Elmer A. Benson, State Banking Commissioner: executive committee; A. P. Imahorn, President; J. H. of the St. Cloud Bank of St. Cloud; Security State Bank of North Mankato;' Kopper, Executive Vice-President; Bernard McCloskey, Eitzen State Bank of Eitzen; Peoples State Bank of Spring Lake; State Mahtowa; Granite Falls Bank of Granite Falls and Yellow Medicine Fred W. Ellsworth and Willis G. Wilmot, Vice-Presidents; Bank, County Bank of Granite Falls. G. W. Owen Jr., Cashier, and Louis V. DeGruy, Trust Elmer A. Benton, State Commissioner of Banks for Minnesota on May 20 announced the completion of reorganization of two institutions and the Officer. consolidation of two more, according to the Minneapolis "Journal" of that On Monday, also, the new National Bank of Commerce date. The organizations which had completed technicalities of reorganizain New Orleans, successor to the Canal Bank & Trust Co., tion were the Marquette Trust Co. of Minneapolis and the LaCrescent 3664 Financial Chronicle State Bank of LaCrescent, while the consolidation was that of the State Bank of North Mankato with the American State Bank of Mankato, the two institutions to continue under the name of‘the latter institution. MISSOURI. The probable organization of a new bank in St. Louis, Mo., under the title of the American Exchange National Bank in St. Louis, which will take over a portion of the assets of the closed American Exchange National Bank of St. Louis and assume a portion of its deposits, is indicated in the following taken from the St. Louis "Globe-Democrat" of May 17: Reorganization of the American Exchange National Bank . . . is proposed in a prospectus sent to prospective subscribers to capital stock in a new banking corporation which is being organized to take over a portion of the assets of the old bank and assume a portion of its deposits. City Collector Edmond Koeln is President of the bank, which closed at the Inception of the banking holiday and failed to re-open. The bank is in charge of Armin Pfisterer, Cashier, as conservator during reorganization. The reorganization plan has the approval of the Comptroller of the Currency, who, it is stated, also will specifically approve all assets taken over by the new bank from the old, and the prices to be paid. The reorganization plans call for issuance of 10,000 shares in equal amounts of $20 a share par value preferred and common stock at $33.33 a share. Of this, $100,000 will be paid the old bank for good-will, established earning power and "certain guarantees" furnishing added assurance of the strength and earning prospects of the new bank;$200,000 will constitute the capital of the new bank and $33,333.33 the surplus. The $100,000 paid the old bank will enter into the dividend of80% which will be paid on deposits of the old bank as soon as the new bank opens. Depositors of the old bank then may transfer the dividends placed to their credit to accounts in the new bank or to cash. The reorganization plan outline states it is regarded "as likely that the assets retained by the old bank will prove sufficient to pay eventually the full 20% due depositors of the old bank after payment of proposed 80% dividend." The new bank will be opened as soon as the capital stock is subscribed and paid in full. May 27 1933 the stock of each of the old banks in the new bank. The liquidating agents will then be removed. The new bank will have total capital funds of $1,500,000. There will be $600.000 in common stock to be purchased by the three old banks at $15 for each $10 share so as to provide $300,000 surplus. The remaining $600,000 will be in preferred stock, which will have full voting will be purchased by the Reconstruction Finance Corporation. power and Ownership of half the voting stock will give the R. F. C. control over the new bank, but important questions of policy will not be settled until the new boards for the old banks are selected as those boards will vote the stock of the old banks, which will be divided among the three as follows: North Carolina Bank & Trust Co., $300,000; Page Trust Co., $200,000, and Independence Trust Co., $100,000. To begin with the R. F. C. and the three defunct banks will be the only stockholders in the new bank, but the directors, when chosen, will have to purchase at least 50 shares each before they can qualify. The board for each of the defunct banks will consist of four depositors, two stockholders and one representative of the R. F. C. Among the questions to be settled as soon as the new bank is organized are: The name of the new institution, the location of the home office and the towns in which branches are to be located. The North Carolina Bank & Trust Co. now has its home office in Greensboro, two local branches and additional branches in the following towns: Bayboro, Burlington, High Point, Kinston, Monroe, New Bern, Raleigh, Rocky Mount, Salisbury, Scotland Neck Spencer, Tarboro, Wallace and Wilmington. The Page Trust Co. has its home office in Aberdeen, Its central office in Raleigh, and the following additional branches: Albemarle, Apex, Carthage, Hamlet, Liberty, Raeford, Ramseur, Sanford, Slier City, Thomasville, Troy and Zebulon. It is expected that the new bank will drop some of the branches. . . . The re-opening on May 23 of the Union Trust Co. of Shelby, N. C., is reported in the following advices on that date from Spartanburg, S. C., to the New York "Journal of Commerce": Shelby has taken on new life in business with the opening to -day(May 23) of one of its banks, the Union Trust Co., which has been closed since the National holiday and a wage increase of from 5 to 10% in five textile mills. The bank, which has four branches in Rutherford and Cleveland Counties opened without restrictions. OHIO. The Lemay Ferry Bank of Luxemburg, St. Louis County, Mo.,reopened for business on May 23 under a license granted the institution the previous day by the St. Louis Federal A dispatch from Bellefontaine, Ohio, on May 20 to the Reserve Bank. The bank had been closed since the National Cleveland "Plain Dealer" reported that the campaign to bank holiday, March 4. Dr. Samuel J. Will is President and sell 1,000 shares of stock at $120 a share necessary to organize J. L. Crecelius, Cashier of the institution, which is located a new national bank in Bellefontaine and release 70% of at 113 Lemay Ferry Road. The St. Louis "Globe-Democrat" the deposits in the Bellefontaine National Bank .had gone of May 23, authority for the above, furthermore said: "over the top" on that day, according to an announcement Resumption of business was made possible through issuance of $50,000 by F. M. Baxley, who headed the citizens' committee. We preferred 4% stock which was subscribed by stockholders and depositors. quote further from the dispatch as follows: This subscription raised capital stock from $50,000 to $100,000. Common stockholders surrendered two-fifths of their holdings, which were repurchased by themselves or sold to others, so that a surplus of $24,000 was set up for the bank's operation. Officers explained federal regulation required $20,000 surplus; they said the surplus would reach approximately 828.000 when all the surrendered common is resold. No aid was required from the Reconstruction Finance Commission for the bank's new setup, officials stated. The bank, according to its last published statement as of Dec. 10, had deposits of $1,015,707, and total resources of $1,264,536. Deposits included checking accounts, $253,618, and time and savings accounts, $762,026. Considerable depreciation in the bond account necessitated reorganization of the bank's affairs. It was stated this account has now been written down to present values. The depository serves Luxemburg, a part of Carondelet, and communities as far South as Cape Girardeau. NORTH CAROLINA. The new bank, which will open in two weeks after the $120,000 is paid will have 300 stockholders. Under the plan of the chief bank examiner in the Fourth Federal Reserve District, 100 solicitors spent three weeks obtaining the needed subscriptions. Approximately $700,000 will be released in this community when the new bank opens, Baxley said. The incorporation of a new bank in Cleveland, Ohio, as successor to the Lorain Street Savings & Trust Co. of that city, to be known as the People's Savings & Commercial Bank, was announced on May 22 by Carl W. Schaefer, Chairman of the reorganization committee of the Lorain Street Bank, according to Cleveland advices by the Associated Press on that date, which furthermore said: Provided State and Federal officials approve, it is planned to release unnamed percentages of the deposits now frozen Lorain Street Bank. Gurney P. Hood, State Bank Commissioner for North The projected bank will have a capitalizationinofthe $200.000, a surplus of Carolina, on May 20 formally approved plans to form a new $40,000 and undivided profits of $10,000 under the Schaefer plan. State-wide banking institution through the union of the The new First National Bank of Massillon, Ohio, opened North Carolina Bank & Trust Co.(head office Greensboro); on May 18, succeeding the Old First National Bank, which the Page Trust Co. (head office Aberdeen) and the Inde- was placed on a restricted operation basis in the March blink pendence Trust Co. of Charlotte, all of which have been holiday. Associated Press advices from Massillon, reportoperating under restrictions. The consolidated bank will ing the opening, also said: Charter for the new First National was Issued by the have an initial capital and paid in surplus of $1,500,000. Treasury Department early this morning. Sixty per cent United States Under the organization plan for the new institution, each of of of the deposits the old First National in addition to 5% released during the three banks involved was placed in charge of a liquidating available to depositors, releasing approximately $1,500,000 the holiday is agent on May 20. The liquidating agents are also to act as The Farmers' Banking Co. of Paulding, Ohio, which has conservators and will appoint conservators from the personnel been operating under a conservator, reopened without reof each branch of the defunct banks. New bank accounts, strictions Monday, May 22, according to Columbus advices trust business and safety deposit box business is to be con- by the Associated Press. tinued "on the same basis as during restrictions." The OREGON. Raleigh "News & Observer" of May 21, from whose account Initial steps were taken on May 18 looking towards the of the matter the above information is obtained, continuing organization of a new bank in Albany, Ore., to replace the said in part: First National Bank of Albany and the Albany State Commissioner Hood has directed each agent to prepare at once comBank, now operating under restrictions, when a telegram was sent parative balance sheets showing the conditions of the banks on the lasb day of unrestricted operation in March and on May 20. to the Comptroller of the Currency by a citizens' committee At the time of restriction debts of the three banks were as follows: North asking authority to sell stock of the new institution. A disCarolina, due depositors, $14,715,058.24, due others, $6,258,517.40; Page, patch from Albany to the Portland "Oregonian," reporting due depositors, $3,166,050.05, due others, $1,222.98; Independence, due depositors, 81,901.789.59, due others. $1,441,454.86. the matter, went on to say: The total deposits were $19,782,898.78. Appointment of the liquidating agents is for the sole purpose of levying stock assessments in the aggregate sum of $3,900,000 against the stockholders in the present banks. Two of the provisions of law in regard to liquidation of banks are that an inventory shall be filed within 30 days and that judgments for the full amount due under the stockholders' double liability law may be entered at any time after 30 days. . As soon as the new bank shall have been organized, a Board of Directors for each of the defunct banks will be appointed, and this Board of Directors will be in charge of the liquidation of each of the old banks and will vote If it is authorized, the new bank will be known as the Albany National. It will be capitalized at $100,000 and will have an initial surplus of $20,000 with $5,000 in undivided profits. The new bank will probably take over part of the assets and deposits of the existing banks, members of the committee said to-day. . . . VIRGINIA Advices by the Associated Press from Richmond, Va., on May 19 reported that a charter was granted on that day by the Virginia State Corporation Commission to the Old Volume 136 Financial Chronicle Dominion Bank of Cherrydale, Va. (P. 0. Washington, D. C.). The dispatch added: The new institution with George D. Cooke as President, will take over the business of the People's Bank of Cherrydale. Its authorized capital is $50,000. WISCONSIN Directors of the Columbia Savings Bank of Milwaukee, Wis., at a meeting held May 19, decided to turn over the institution to the Wisconsin Banking Commissioner for liquidation, according to the Milwaukee "Sentinel" of May 20 which went on to say: Continued operation was deemed unprofitable due to prevailing economic conditions, directors stated, adding that all assets of the bank are secured by first mortgages and that no loss to depositors is anticipated. The bank is in charge of John A. Bosshard, State Bank Examiner. In regard to the two banks in Kaukauna, Wis.,—the Bank of Kaukauna and the Farmer's & Merchants' Bank—a dispatch from that place on May 20 to the Milwaukee "Sentinel" contained the following: The 75% restriction of funds in the two Kaukauna banks will be lifted Monday (May 22) officials announced to-day. At the bank of Kaukauna depositors will be allowed to withdraw 60% of their funds, the remaining 40% to remain until "frozen" assets are liquidated. The Farmers' & Merchants' Bank will allow withdrawals of 70%. Additional List of Banks Licensed to Resume Operation in Second (New York) Federal Reserve District. Supplementing its statement of May 17 (noted in our issue of May 20, page 3474) the Federal Reserve Bank of New York issued the following list showing additional banking institutions in the Second (New York) District which have been licensed to resume full banking operations: 3665 At its meeting on May 24 the Board of Directors of the Chase National Bank of New York directed certain chargeoffs and additions to Reserve Accounts and authorized the reduction of the surplus of the bank to $50,000,000. As one of the results of this action, the obligations to the Bank of General Theatres Equipment Corp. and Fox Film Corp. and its subsidiaries have been written off or covered by reserves, so that the total amount of such obligations now remaining is approximately $15,000,000. The announcement of the bank says: "The capital of the Bank will remain at $148,000,000, the surplus as stated will be $50,000,000 and the undivided profit account will be in excess of $7,500,000. The total capital funds will therefore be in excess of $200,000,000. "It is the firm belief of the'Directors that the Bank will have substantial recoveries in many of the items which were subject to the action taken to-day." Important changes in the organization of the Chase National were noted in our issue of May 20, p. 3467. The Danielson Trust Co., of Danielson, Conn., which had been closed since December 1931, reopened for business on May 22, according to a dispatch by the Associated Press from that place, which said in part: Many depositors made withdrawals of needed funds but there was no great rush at any time during the day. The bank transacted a considerable amount of new business. Many deposits were received and new accounts were opened. Officials of the bank expressed themselves as well pleased with the developments of the opening day. The closing of the trust company was noted in the "Chronicle" of Dec. 26 1931, page 4271. Timothy J. Callahan, Vice-President of the Commercial Trust Co. of Jersey City, N. J., died suddenly in Atlantic City, N. J., early on the morning of May 19, when he fell MEMBER BANKS. from the window of his room on the 10th floor of the Hotel NEW YORK STATE. Ambassador. Mr. Callahan glad gone to Atlantic City to Athens—The Athens National Bank. the annual convention of the New Jersey Bankers' attend Narrowsburg. Narrowsburg—First National Dank of Peekskill—The Westchester County National Bank of Peekskill. Association, of which he was a member. The deceased Southampton—a The Southampton Bank. banker, who was 46 years of age, entered the employ of the NON-MEMBER BANKS. Commercial Trust Co. as a clerk in 1905. In 1914 he was NEW YORK STATE. placed in charge of the savings and transfer department of Lawrence—The Lawrence-Cedarhurst Bank. the main office of the trust company at 1 Exchange Place. This position he continued to bold until 1926, When he was a State bank member. promoted to a Vice-President in charge of the Bergen Avenue ITEMS ABOUT BANKS, TRUST COMPANIES, &c. branch, the office he held at his death. Arrangements were made May 26 for the transfer of two A 20% dividend is being paid to the depositors of the DuNew York Stock Exchange memberships, one at $160,000 quesne National Bank of Pittsburgh, Pa., aggregating $700.and the other at $164,000. The previous transaction was 000, according to an announcement on May 19 by Arthur B. on May 19 at $150,000. Atwood, receiver for the institution. The Pittsburgh "Post Arrangements were made for two sales on the New York Gazette" of May 20, authority for the above, continued: Curb Exchange: the first membership May 20, at $40,000, A total of 2,100 checks will be distributed. This is the first payment to closed Nov. 15 1932. unchanged from the last previous sale and the second, be paid depositors since the bank A substantial part of the payment is being obtained from collections, May 26, at $32,000. which, Atwood said, have improved recently, but a part was obtained in FEDERAL RESERVE BANK OF NEW YORK. (Circular No. 1232, May 24 1933.) The Commodity Exchange announced that arrangements were made May 20 for the sale of three memberships, as follows: Harold M. Lehman to J. Chester Cuppia at $2,300; Benjamin M. Wollman to Jerome Lewine, $2,400, and Paul Etlin to Jerome Lewine, $2,300 and on May 23 L. P. P. Bergerault sold a membership to J. Horace Block at $2,300, for deferred delivery abroad to another. E. M. Richards sold his New York Cocoa Exchange membership, May 25, to I. Witkin, for another, for $2,350, a decrease of $50 from the last previous sale. The New York Coffee and Sugar Exchange will be closed on Saturdays during the months of June, July, August and September. Irving Trust Co. of New York announced on May 23 the following official promotions and appointments: William F. Doyle, Assistant Vice-President, to be Vice-President. Charles W. Brugger, Charles J. Maurer and Charles 0. Wolff, Assistant Secretaries, to be Assistant Vice-Presidents, Chester M. Carre and John C. Kingman, to be Assistant Secretaries, Eugene T. Neville, formerly Assistant Cashier of the Harriman National Bank and Trust Co., has been appointed Assistant Vice-President of the Trust Co. of North America in New York. The Harlem Savings Bank, New York, has filed an application, dated May 17, with the New York State Banking Department, for permission to change the location of its branch at St. Nicholas and Amsterdam Avenues and 161st Street, Manhattan, to 157th Street, corner of Broadway. the form of a loan frixn the Reconstruction Finance Corporation. Checks to depositors will be disbursed at the Bank of Pittsburgh building where all the records of the Duquesne National Bank have been taken. Atwood is also receiver for the Bank of Pittsburgh. The closing of this institution was noted in our issue of Nov. 19 last, page 3471. A dispatch by the Associated Press from Wilkes-Barre, Pa., on May 23 stated that Dr. William D. Gordon, Secretary of Banking for Pennsylvania, had fixed June 15 for the second distribution of funds of the closed Dime Bank Title & Trust Co. of Wilkes-Barre to the depositors. The dispatch added: A 10% dividend, amounting to $173,875.41, will be paid to 8,058 depositors. The first disbursement of 10% was paid on Oct. 10 1932. On May 25, H. S. Whiteman, former Cashier of the Clearfield National Bank of Clearfield, Pa., charged with the misapplication of the bank's funds, was acquitted by the direction of the Court. Announcement has been made by Dr. William D. Gordon, State Secretary of Banking for Pennsylvania, that a 5% advance payment, amounting to $111,140, will be made June 3 next to the 10,039 depositors of the closed Anthracite Trust Co., of Scranton, Pa., according to Philadelphia advices on May 22 to the "Wall Street Journal". This will be the fourth payment made by the trust company. Concerning the affairs of the defunct Chesapeake Bank of Baltimore, Md., which closed Dec. 9 1930, the Baltimore "Sun" of May 19 stated that an order authorizing the receiver of the institution to pay a 10% dividend to depositors of the institution was signed on May 18 by Judge Eugene 3666 Financial Chronicle O'Dunne in Circuit Court No. 2. In a petition filed by Herbert Levy, attorney for the receiver, it was pointed out that as $168,417.86 of the bank's funds were deposited in institutions operating on a restricted basis under the emergency banking law, an order signed last March directing a similar dividend had been rescinded. The "Sun" continued in part: "Due to the recent rise in the price of securities," the petition stated "your petitioner has been able to dispose of certain of the securities of the defendant bank at advantageous prices and he now has on hand sufficient funds with which to proceed with the 10% distribution." ... Dividend checks should reach the depositors of the Chesapeake Bank about July 1, Mr. Levy said last night. Julian S. Jones, Court Auditor, who was retained when the former distribution order was signed, has already completed a considerable part of the work connected with the distribution it was pointed out. In a report attached to his petition, which was filed yesterday, Mr. Levy revealed that between Nov. 17 1932, and May 17 1933, he disposed of securities totaling $162,850.64. The new dividend, which will involve the payment of approximately $400,000 of the funds collected by the receiver, will bring the total amount Paid to creditors of the Chesapeake Bank, including depositors, to 32.5%. a payment of 22.5% having been made Dec. 15 1931. Acquisition of the First National Bank of Lowell, Ohio, by the People's Banking & Trust Co., of Marietta, Ohio, was reported in the following dispatch from Marietta by the Associated Press on May 20: The People's Banking & Trust Co., of Marietta, in which Governor George White is a stockholder, to-day (May 20) announced the purchase of the First National Bank of Lowell, 10 miles north of here. It will be operated as the "Lowell Branch" of the People's. Ira J. Fulton, Superintendent of Banks for Ohio, on May 18 announced that depositors and creditors of the Farmers' Bank of Martinsville, Ohio, which was placed in liquidation by the State in July 1931, had received payment in full of their claims, according to Associated Press advices from Columbus on that date. The final dividend to the depositors and creditors was paid April 18 1933, it was said. _•_._ George A. Coulton, for the past three years Vice-Chairman of the Board of Directors of the Union Trust Co. of Cleveland, Ohio, and widely known in Ohio and National banking circles, died suddenly in Cleveland on May 19 of a heart attack. The deceased banker, who was 58 years of age, had been an official of Cleveland banks for 30 years, and had headed two of the several banks which became part of the Union Trust Co. upon its organization on Dec. 31 1919. In 1925 Mr. Coulton was selected as representative of the Cleveland district of the Federal Reserve Board's Advisory Connvil of Twelve. He served one term. He was a director of the Midland Steel Products Co., the Ferry Cap & Screw Co., the Wheeling & Lake Erie RR. Co., and other concerns. —•___ George A. Archer on May 18 resigned as a Vice-President and a Director of the City National Bank & Trust Co. of Toledo, Ohio, because of ill health, according to the Toledo "Blade" of May 19, Which, continuing, said: One of the oldest members in point of service of the local banking fraternity, Mr. Archer was for many years President of the old Commercial National Bank which was merged with the City National a few years ago. lie started his banking career in his youth and was one of the prime movers in the negotiations which linked his bank and the City National when the Institutions merged. Advices from Chicago on May 15, by the United Press, stated that John H. Bain, head of a chain of banks in that city which failed in June 1931, pleaded "guilty" to charges of embezzlement in the Criminal Court, before Judge James F. Fardy, on that day, and was sentenced to one to three years in Joliet penitentiary. John Bain Jr., a son, and W. Merle Fisher, a son-in-law, also pleaded "guilty" and received similar sentences, the dispatch said. Reorganization of the State Bank of Hustisford, Wis., has been perfected with issuance of a formal order in the Circuit Court allowing reorganization, according to a dispatch from Juneau, Wis., on May 16, which, continuing, said: New stock was subscribed and Roland Radloff of Hustisfold named President, with W. E. Kohn, of Watertown, as Vice-President. The bank went into the hands of the State Banking Department on July 22 1932. Payments were made on May 17 to depositors in three failed Nebraska banks, according to Associated Press advices from Lincoln on that date. The banks and dividends paid were: First State Bank of Pleasant Dale, 5% dividend of $0,330, bringing the total returned to 75%, or $94,950. State Bank of Burchard, at Burchard, 5% of $198.63, bringing the amount returned during receivership to 39%, or $1,549. People's Bank of Wauneta, 5% of $4,019, bringing the total returned to 50%, or $40,194. May 27 1933 Adolf H. Hauser, formerly Assistant Cashier of the Mercantile-Commerce National Bank of St. Louis, Mo. (the midtown institution owned by the Mercantile-Commerce Bank & Trust Co.), has been promoted to the Cashiership of the institution, according to the St. Louis "Globe-Democrat" of May 13. Mr. Hanser succeeds as Cashier Guy R. Alexander, who retired. The directors at the same time, it was said, advanced William F. Hucke and Charles Wyskocil from tellers to Assistant Cashiers. Depositors and other creditors of the Bank of Blackstock at Blackstock, S. C., which went into liquidation last summer, have been paid dollar for dollar, according to an announcement by the officials of the institution on May 18. Associated Press advices from Blackstock, reporting the matter, added: Members of the Kennedy and Mobley families who controlled the institution made good all losses. Blackstock is situated on the Chester•Fairfield County line. Effective April 24 1933, the First National Bank of Bardwell, Texas, went into voluntary liquidation. This bank, which was capitalized at $40,000, was absorbed by the Citizens' National Bank in Ennis, Texas, The Citizens' National Bank of Ennis, Texas, capitalized at $100,000, was placed in voluntary liquidation on April 26 1933. The institution was succeeded by the Citizens' National Bank in Ennis. The First National Bank of Burkburnett, Texas, went into voluntary liquidation as of April 25 1933. The institution, which is capitalized at $100,000, was succeeded by the First National Bank in Burkburnett. MOW --•—•••• As of April 4 last, the First National Bank of Midlothian, Texas, with capital of $60,000, was placed in voluntary liquidation. The institution was succeeded by the First National Bank in Midlothian. A dispatch by the Associated Press from Spokane, Wash., on May 15 stated that announcement was made that day by James A. Drain, receiver for the closed Exchange National Bank of that city, that a sixth dividend, bringing the total amount disbursed to $6,442,572, or 99%, was to be paid to depositors of the institution. The dispatch further quoted Mr. Drain as saying that with stock and commodity prices rising, it was possible the additional 1% would be paid. The institution was closed In January 1928. THE WEEK ON THE NEW YORK STOCK EXCHANGE. The stock market has been active, buoyant and higher during the greater part of the present week. There have been frequent periods of profit taking, but the upward surge has, on most occasions, been so strong that it was readily absorbed and had little appreciable effect on the' trend of the market. The turnover has been unusually heavy and the tickers have, at times, been several minutes behind the transactions on the floor of the Exchange. Railroad shares have been in active demand throughout the week and the distillery and allied stocks have attracted a large amount of speculative attention. Industrial shares have also shown sharp improvement, the gains, at times, ranging up to five or more points. Large blocks of stocks of from 5,000 to 15,000 shares were turned over at higher prices, the buying wave reaching its peak on Thursday, when the gains ranged from two to six or more points. Call money renewed at 1% on Monday and continued unchanged at that rate on each and every day of the week. On Saturday the early trading was dull and the majority of the changes were within narrow limits. As the day progressed, the volume increased particularly on the selling side as a result of a break in wheat. A few miscellaneous issues made gains but they were not especially noteworthy. The principal declines of the day were Air Reduction 1% points to 71, Allied Chemical & Dye 13' points to 1003, American Tobacco "B" 1% points to 793, Atlantic Coast Line 1% points to 41, Central RR. of N. J. 7 points to 70, duPont 1% points to 61, Gulf States Steel 2 points to 19, Norfolk & Western 4 points to 146, Worthington Pump 2% points to 22%, Wilson & Co. pref. 2 points to 47, Standard Gas & Electric pref. 2% points to 13%, General Railway Signal 13 % points to 31, Owens Illinois Glass 13 points to 68 and Eastman Kodak 3 points to 72. Volume 136 Financial Chronicle Stocks moved within narrow limits during most of the trading on Monday. In the first hour, and again in the closing hour, there was a very modest upturn but the changes were unimportant. The bulk of the trading occurred around the noon hour when a brisk selling movement got under way as a result of the further decline in wheat. While there were some gains recorded during the day, most of the changes among the active stocks were on the side of the decline. These included among others, American Car & Foundry pref., 13j points to 3334; American Smelting (2) pref., 2% points to 51; Atlas Powder, 13 points to 18; Bon Ami, 13 points to 64; Bucyrus Erie pref., 3 points to 60; Coca-Cola, 234 points to 83; Continental Baking pref., 2 points to 4834; Crucible Steel pref., 2 points to 38; Federal Light & Traction pref. (6), 334 points to 45; Goodrich pref., 2 points to 32; Kendall pref., 3 points to 45; Mengel Co. pref., 23 points to 303; National Supply pref.,2 points to 40; New Haven pref., 234 points to 393/2; Reading Co.,2% points to 403; American Tobacco, 234 points to 76; Safeway Stores pref., 3 points to 45; United States Tobacco (4.40), 234 points to 7934 and Shell Union Oil pref., 134 points to 45. Practically every group in the stock market was in demand on Tuesday as new buying flowed into the market and lifted prices upward from 1 to 6 or more points. Railroad shares were among the leaders and surged forward under the guidance of Union Pacific and Atchison. Early prices were up quite sharply above the previous close, and while there was a moderate set back around the noon hour:the reaction soon petered out and stocks again move forward. Trading continued brisk throughout the day and better than 125 listed stocks sold at their best prices for 1933, while approximately 811 separate issues were handled in the day's transactions. Allied Chemical & Dye was a strong feature as the stock continued in brisk demand throughout the session and moved into new high ground for the year. Distillery and allied issues also were in sharp demand, particularly Distillers Products, which soared 8 points to a new top record. Considerable demand for tocks for covering purposes was apparent and this, no doubt, was a prime factor in the upward swing. Prominent among the gains were such active stocks as Air Reduction, 234 points to 73; Allied Chemical & Dye, 58% points to 106/i 3 ; American Can, 2% points to 8334; American & Foreign Power pref., 2% points to 2134; American Sugar Refining pref. (2), 234 points to 5534; American Tobacco (5), 294 points to 7894; Amer. Tel. & Tel., 23 4 points to 11134; American Woolen pref., 35% points to 443/8; Auburn Auto, 2% points to 5034; Bethlehem Steel pref., 534 points to 63%;Brooklyn-Manhattan Transit, 334 Points to 3634; J. 1. Case Co., 35% points to 6134; Colorado Fuel & Iron pref., 7 points to 42; Central RR. of N. J. 5 points to 75; Columbian Carbon, 3 points to 54; International Business Machines, 434 points to 121M; IngersollRand, 33/s points to 78; Goodrich pref., 534 points to 373/8; Glidden pref., 4X points to 6634; du Pont, 334 points to 64%; Louisville & Nashville, 334 points to 4734; National Distillers, 73 4 points to 5332; Norfolk & Western, 4 points to 150; Owens Ill. Glass, 534 points to 74; Reading Co., 434 points to 4494; Wilson & Co. pref., 334 points to 47; United States Industrial Alcohol, 43% points to 33%; United Piece Dye pref., 11 points to 66; Union Pacific, 494 points to 9334; Standard Gas & Electric prof. (7), 33 4 points to 36, and United States Steel, 234 points to 4934. Standard shares continued to forge ahead on Wednesday and many prominent issues broke through the 1933 tops. The sales for the day were over 4,707,400 shares and the tickers were taxed beyond their normal capacity, so much so that at times they were as much as 10 minutes behind the transactions on the floor. Railroad shares were featured by sharp advances in Union Pacific, New York Central and Atchison, and industrial stocks moved sharply forward under the guidance of United States Steel. The outstanding gains for the day were American Beet Sugar pref. 434 points to 38; American Metals pref., 634 points to 55; American Tobacco "B" (5), 334 points to 8334; Colorado Fuel & Iron, 3 points to 45; Ingersoll Rand (134), 3 points to 61;Federal Light & Traction pref., 3 points to 42; Crucible Steel Pref., 334 points to 4334; Laclede Gas pref. (5), 534 points to 3934; National Distillers, 394 points to 5634; Park & Tilford, 6 points to 2134; Peoples Gas, 534 points to 66; Texas Pacific Ry., 4 points to 30; Union Pacific, 634 points to 100; West Penn Electric A (7) 394 points to 515 %, and Sloss Sheffield Steel pref., 234 points to 3034. The trend of prices was again toward higher levels on Thursday, many prominent stocks moving up from 1 to 5 3667 or- more points before the session ended. The trading interest centered to a large extent around the railroad, distillery and allied stocks, the volume of sales gradually expanding as a big outside demand came into the market fOr blocks of one to 15,000 shares like National Distillers, ignerican Commercial Alcohol and United States Industrial Alcohol. In the final hour, public utilities moved to the front and a number of issues in this group closed will modest gains, though _part of the earliergadvances were c=ine on profit taking. Most of the gains, however, were confined to fst moving specialties, many of the market leaders like United States Steel, American Can, Amer. Tel. & Tel., General Motors and Westinghouse moving forward at a much slower pace. The upward swing in the utilities was under the leadership of Consolidated Gas, which got up to 5494 at its top for the day and then dropped back with a fractional loss. The principal changes were on the u ward side and included among others American Can pref., 3 4 Points to 1283; American Commercial Alcohol, 254 points to 2634; American Metals pref., 3 points to 58; Beatrice Creamery pref., 7 points to 85; Byers & Co. pref., 2 points to 53; Crucible Steel pref., 234 points to 4534; Liquid Carbon, 2 points to 35; National Distillers pref., 8 points to 71; New York & Harlem, 7 points to 123; Park & Tilford, 33% points to 2434; Pacific Tel. & Tel., 354 points to 8234; Tide Water Oil pref.(5), 234 points to 5834; United States Industrial Alcohol,534 points to 40; Vulcan Detinning, 3 points to 4334; West Penn Electric (6), 454 points to 54, and Tr -Continental pref. (6), 2 points to 70. Trading;continued heavy on Friday, most of the speculative attention being directed toward the distillery and farm stocks of the specialties group, the gains ranging from 1 to . strong and more points. Mining issues also were fairly m3VZTheaTu=er the leade711717f Homestake Mining which was up about 17 points at its top for the day. New & Harlem was another sensational performer as it forged ahead about 22 points at i1717;1, for the day._ Among the outstanding advances were such active issues as Air Commercial Alcohol Mauction 334 points to 7934, Canadia=thern (3) 4 points to poiliaW) 35127Crown Cork & Seal 434 points to 4934 National Le2.4_ff§ points to 108, Pullman Co. (3)9 points to 46, Umle-d States Industrial Alco ol 734 points to 47X and Westinihousr3 pointslto 4134. The market was strong at the close with prices near their tops for the day. Aizzraz TRANSACTIONS AT THE NEW YORK STOCK EXCHANGE. DAILY. WEEKLY AND YEARLY. 1,300,307 2,223,460 3,143,8.50 4,707,400 4,008,260 4,346,470 Saturday Monday Tuesday Wednesday Thursday Friday Total United States Bonds. State. Railroad Stocks. Number of and Ritual. Municipal & Bonds. For'n Bonds. Shares. Week Ended May 26 1933. $4,496,000 7,742,000 8,677,000 12,181,000 11,498,000 10,480.000 $393,000 1,712,000 1,628,000 1.685,000 1,131,000 1.512,900 $1,382,000 2,713,000 2.677,000 2,971,500 2,452,000 2,871,000 Week Ended May 26. 1932. 1933. Stocks-No. of sharesBonds. Government bonds_ State ax foreign bonds Railroadai misc. bonds $6,271,000 12,167.000 12,982,000 16,837,500 15,081,000 14,863.900 $8,061,900 $78,202,400 •19.729747 355.074.000 $15,066,500 Sales at New York Stock Exchange. Total Bond Sales. Jan. 1 to Arty 26. 1933. 1932. 5,902,204 •197,898,269 151,478,285 $8,061.900 524,472,000 15,066,500 14,654,500 55.074,000 29,020,000 $235,038,300 302,164,500 756,227,900 5330,060,900 312,483,500 618,539,300 19,729,747 $78,202,400 $68,146,500 $1,293,430,700 $1,261,082,700 Total * Notice has been received from the New York Stock Exchange of a change In the volume of sales for May 19. The total for that day should have been 3,275,362, Instead of 3,279,562. The total for the week should have been 20,899,470 and the total since Jan. 1, 178,168,522. DAILY TRANSACTIONS AT THE BOSTON, PHILADELPHIA AND BALTIMORE EXCHANGES. Philadelphia. Boston. Week Ended May 26 1933. 14,908 24,246 29,497 40,266 38,411 6,380 $21,000 5.000 21,000 300 1,500 $33,050 163,708 320.000 241.365 Saturday Monday Tuesday Wednesday Thursday Friday 29,950 41,632 46,120 62,946 60,028 8,097 $6,050 3,000 1,500 18,500 4,000 Total 248.773 302.200 Prey. week revised Bait more. Shares. Bond Sales. Shares. Bond Sales. Shares. Bond Sales. 1,436 2,205 1,453 3,236 2,645 2,502 32.000 1,000 5,000 6,000 14,000 9,000 $48,800 13,477 $37,000 522.200 19.786 131 4(10 THE CURB EXCHANGE. Curb shares:generally moved upward during the greater partJof the fpresenliweek despite the frequent periods of profit-taking which ithe Fnarket was called on to absorb. aiasi eir7Cbie sho-rt covering was in evidence in the so-called pivotal sr7tMlis,--andlwhile trading was slow at times, the turnoverfor.theyeek was above the average. Public utilities 3668 Financial Chronicle were in excellent demand and so were the oil shares, miscellaneous issues and industrials. Investment trusts were slightly higher and there was a moderate demand for some ofithe more active issues among the mining shares. The wave of profit-taking that swept over the curb market on Saturday erased a large part of the modest gains of the early trading. The selling broke out in the public utility stocks and oil shares and quickly extended to all parts of the list and forced the entire market down to net losses for the day. Trading was without noteworthy feature and the transactions indicated the usual Saturday evening up process. Public utilities were weak during the first half of the session, but met moderate support later in the day though, on the whole, most of the leading stocks like Electric Bond & Share, American Gas, American Light & Traction and Niagara Hudson Power were in light demand. In the industrial section Aluminum Co. of America was off and Pepperell Mfg. Co., which moved sharply upward during the previous sessions, was down about 13% points. Oil shares were in small demand and barely held their own. Trading on the curb was extremely dull on Monday, and while a few stocks showed slight gains the major part of the changes were on the downside. Electric Bond & Share was firm during the first hour, but reacted downward about a point and finally closed with a fractional gain. American Gas & Electric and Cities Service were off on the day and so were such active stocks as Aluminum Co. of America, American Superpower, New Jersey Zinc, Niagara Hudson Power, Swift & Co. and United Founders. Oil stocks were slightly stronger, Standard Oil of Indiana leading the advance with a gain of 13 % points, while Humble Oil improved 13% points to 60. Investment trust stocks were irregular, though the undertone was fairly firm. Mining shares were easier and the volume of trading was very small. All classes of Curb stocks moved upward on Tuesday, many of the popular trading favorites soaring upward from 3 to 5 or more points. Among the outstanding features of the day were Aluminum Co. of America, Hazel Atlas Glass, Cord Corp., Hiram Walker and Singer Mfg. Co., all of which moved briskly forward to higher levels. Public utilities were in sharp demand and moved vigorously forward, particularly such active issues as American Gas & Electric and Electric Bond & Share which were up a point or more, and Columbia Gas & Electric and Northern States Power which jumped about 3 points. Oil shares displayed moderate improvement and moved briskly forward under the leadership of Gulf Oil of Pennsylvania. Mining stocks were in good demand at higher prices and investment shares advanced with the rest of the market. The Curb market registered substantial gains all along the line on Wednesday and many popular issues were taken up in large blocks at higher prices. Aluminum Co. of America, for instance, had a further advance of over 6 points and closed at 71. Singer Mfg. Co., A. 0. Smith and Hazel Atlas Glass were strong features and registered substantial gains. Electric Bond & Share extended its recovery about a point and then eased off slightly. Public utilities were in excellent demand as stocks like Cities Service, American Superpower, American Gas and Niagara Hudson pushed sharply forward. Celanese 1st pref. had an advance of more than 5 points, Fisk Rubber prat. was up about 6 points, Duke Power gained 43% points to 52 and Pepperell Mfg. rose 3 points to 68. Mining stocks were strong, Pioneer registering a new top, while Newmont was up 13% points to 333%. Oil shares were quiet but firm, the leaders holding around the previous close. Following a sharp dip during the first hour, the Curb tone continued strong on Thursday despite the dribbling liquid°, tion that appeared from time to time during the session. As the day progressed, many leading issues continued to move briskly forward and at the close practically all of the early declines were cancelled. Some extremely wide advances were recorded during the day, especially the sensational jump of Jones & Laughlin of 23 points to 45. Aluminum Co, of America was also strong and gained 3 points to 74. Leading public utilities were generally in supply at lower prices, oil shales wele off on the day and there was a fractional improvement in a few of the mining stocks. The feature of the trading on Friday was the strength of the specialties group which led the upward movement and recorded the largest gains of the day. Northwest Yeast, for instance, jumped 3 points, Jones & Laughlin moved up 5 points and Tubise Artificial Silk advanced about 2 points. Aluminum Co. of America represented the industrials in the advances and moved up 2 points to 76. Oil stocks were May 27 1933 mixed and the changes were within narrow limits. Mining shares were somewhat higher. Newmont moving up about 2 points while gains ranging from fractions to 1 or more points were recorded by other members of the group. The major part of the changes for the week were on the side of the advance, the gains including among others: Aluminum Co. of America, 63 to 76; American Beverage, 23% to 23%; American Gas & Electric, 323% to 35; American Light & 3 to 193%; American Superpower, 48% to 43%; Traction, .1.7% Asso. Gas & Electric A, 1% to 13%; Atlas Corp., 113% to 133%; Brazil Traction & Light, 103% to 113%; Central States Electric, 23 % to 23%; Cities Service, 23% to 33%; Commonwealth Edison, 633% to 67; Consolidated Gas, Baltimore, 54% to 58; Cord Corp.,8% to 11; Deere & Co., 153% to 183 4; Duke Power, 473% to 53; Electric Bond & Share, 223% to 233 %;Ford of Canada,A 83% to 83%; Gulf Oil of Pennsylvania, 3 Humble Oil, 593% to 603%; International Pe443% to 44%; troleum, 123% to 133%; New Jersey Zinc,44% to 453%; Parker Rust Proof, 41 to 48; Penn. Water & Power Co., 523% to 533%; Singer Mfg. Co., 133 to 137; A. 0. Smith, 36 to 41; Standard Oil of Indiana, 253% to 263%; Teck Hughes, 43% to 53%; United Light & Power A,4% to 63%; United Shoe Machinery, 44% to 463% and Utility Power, 13% to 13%. A complete record of Curb Exchange transactions for the will be found on page 3696. DAILY TRANSACTIONS AT THE NEW YORK CURB EXCHANGE. Week Ended May 26 1933. Stouts (Number of Shares). Foreign Corporate. Total. 235,780 $1,637,000 332,085 3,129,000 403.425 3,808,000 491,630 4,450,000 487.590 4,724,000 562,066 3,874.000 $87,000 81,000 105,000 216,000 94.000 196,000 $65,000 $1,789, 118,000 3,328, 161,000 3,872,000 118,000 4,782,000 88,000 4,906,000 137,000 4,207,000 2,512,556 321,420,000 $779.000 $685,000 $22,884,000 Saturday Monday Tuesday Wednesday Thursday Friday Total Bonds (Par Value). Foreign Domestic. Government Week Ended May 26. Sales at New York Curb Exchange: 1933. 1932. Stocks-No. of shares. 922,939 2,512.556 Bonds. $21,420,000 $12,741,000 Domestic Foreign government 418,000 779.000 1,129,000 Foreign corporate 685,000 Total Jan. 1 to May 26. $22,884,000 $14,288,000 1933. 1932. 24,474,031 21,214,304 $356,444,000 14,492,000 18,428.000 3298,798,100 12,006,000 30,626,000 $389,364,000 $341,430,100 COURSE OF BANK CLEARINGS. Bank clearings this week will again show a decrease as compared with a year ago. Preliminary figures compiled by us, based upon telegraphic advices from the chief cities of the country, indicate that for the week ended to-day (Saturday May 27), bank exchanges for all the cities of the United States from which it is possible to obtain weekly returns will be 6.1% below those for the corresponding week last year. Our preliminary total stands at $4,156,888,219, against $4,426,652,358 for the same week in 1932. At this center there is a gain for the five days ended Friday of 5.9%. Our comparative summary for the week follows: Clearings-Returns by Telegraph. Week Ending May 27. New York Chicago Philadelphia Boston Kansas City St. Louis San Francisco Los Angeles Pittsburgh Detroit Cleveland Baltimore New Orleans Twelve cities, five days Other cities, five days 1933. 1932. $2.274,094,107 $2,146,835,237 151,235,945 165,310,872 208.000,000 205,000,000 142,000,000 157,000,000 42,556,019 48,943,692 45,200,000 56,500,000 65,391,000 72,425,000 No onger will re port clearings 51,784,663 65,329,761 5,761,096 58,368,844 32,980,919 51,626,114 26,110,477 40,042,327 21,594,930 53,045,114,226 33,088,974,577 418,959,290 438,114,090 Per Cent. +5.9 -8.5 +1.5 -9.6 -13.1 -20.0 -9.7 -20.7 -90.1 -88.1 -34.8 -14 , -4 Total all citlea,tive days All cities, one day $3,464,073,516 692,814,703 $3,527,088.667 899,563.691 -1.8 -23.0 Total all cities for week S4.156.888.219 54.426.652.358 -6.1 Complete and exact details for the week covered by the foregoing will appear in our issue of next week. We cannot furnish them to-day, inasmuch as the week ends to-day (Saturday) and the Saturday figures will not be available until noon to-day. Accordingly, in the above the last day of the week has to be in all cases estimated. In the elaborate detailed statement, however, which we present further below, we are able to give final and complete results for the week previous, the week ended May 20. For that week there is a decrease of 4.5%, the aggregate of clearings for the whole country being $4,447,175,126, against $4,654,351,599 in the same week in 1932. Outside of this city there is a decrease of 15.9%, the bank clearings at this center recording a gain of 2.5%. We group the cities accord- ing to the Federal Reserve districts in which they are located, and from this it appears that in the New York Reserve District, including this city, the totals show a gain of 2.5%, but in the Boston Reserve District there is a loss of 10.4% and in the Philadelphia Reserve District of 5.8%. In the Cleveland Reserve District the totals show a contraction of 22.3%, in the Richmond Reserve District of 29.6% and in the Atlanta Reserve District of 15.8%. The Chicago Reserve District has a decrease of 32.3% and the St. Louis Reserve District of 2.8%, but the Minneapolis Reserve District records a gain of 1.7%. In the Kansas City Reserve District the totals are smaller by 20.0%, in the Dallas Reserve District by 3.3% and in the San Francisco Reserve District by 9.2%. In the following we furnish a summary of Federal Reserve districts: SUMMARY OF BANK CLEARINGS. Week Ended May 20. 1932. 1933. 171C.OT Dec. 1931. 1930. $ $ Federal Reserve Dists. 3 % $ 481,808,295 412,684,505 229,672,412 -10.4 let Boston_ __12 cities 205,721,412 2nd New York_ _12 " 3,018,745,761 2,946,200,041 +2.5 6050,484.699 6,451,307 274 525,778,184 449,886,977 3rd Philadelphia 9 " 269,850,624 -5.8 254,332,252 389,770,260 310,220,275 195,621,583 -223 4th Cleveland_ __ 5 '• 151,931 424 153,277,337 137,818,605 102,376,33 -246 5th Richmond_ _ 6 " 72,101,342 146,651,788 122,712,117 87,931,000 -15.8 6th Atlanta_ _ _ _10 " 74,030,888 876,869 315 717,495,214 351,270,65 -32.3 237 844,347 7th Chicago_ ....17 •• 176,812,758 128,037,665 -2.8 90,976,01 88,398,133 8th St. Louis___ 4 106,764,436 87,987,015 66,939,323 +1.7 9th Minneapolis 7 " 68,063,559 180,101,209 138,811,521 10th KansasCity 9 " 100,105,29 -250 80,126,758 59,957,113 53,297,377 -3.3 37,070,686 11th Dallas_ _ _ 5 " 35,842,710 314,719,612 273,162,862 176,328 622 -9.2 160,036,540 12th San Fran. 13 " 109 Citie8 Total Outside N. Y. City 4,447,175,126 1,512,901,624 4,654,351,599 -4.5 1,799,503,583 -15.9 8,882,599,036 2,965,757.526 9,867,817,581 3.573,510,283 32 cities 286,555,833 240,631,276 +1.91 419.148,081 416,206,038 Week Ended May 20. Clearings at1933. First Federal Maine-Bangor _ Portland Mass.-Boston _ _ Fall River_ _ _ _ Lowell New Bedford Springfield _ _ Worcester _ _ Conn.-Hartford New Haven_ _ _ R.I.-Provident N.H.-Manches' 1932. Inc. or Dec. 1931. 1930 $ $ . $ 5 % Reserve Dist rict-Boston 400,919 -1.8 393,831 2,206,977 -62.4 829,497 181.439,354 197,901,084 -8.3 845,877 -20.1 675,853 434,974 -26.8 318.329 628,293 -14.4 537,563 2,958.242 -25.6 2,200,507 2,207,852 -55.1 991,967 7,830,817 -2.9 7.605,142 5,324,572 -48.2 2,759,150 8,515,500 -12.0 7,489,600 417,305 +15.2 480,619 568,533 2,932,885 371,002,561 1,016,613 516.215 760,577 3,932,173 2,714,826 10,466,328 7,558,746 10,675,100 449,948 549,875 3,331,534 433,288,252 1,146.914 945,315 912,336 3,908,795 3,082,093 12,128,476 8,829,941 12,730,200 954,654 229,672,412 -10.4 412,684,505 481,803,295 Total (12 cities) 205,721,412 Second Fede at Reserve D istrict-New York__ 5,055,657 8,133,363 N. Y.-Albany. 4,290,966 +30.5 5,601,628 Binghamton 708,145 1,105,021 1,242,922 +8.9 771,288 Buffalo 38,908,162 25,527,383 -1.9 50,952,717 25,151,128 Elmira 1,106.902 735,145 645.682 -13.7 557,538 Jamestown__ _ _ 794,246 546,084 -46.1 1,140,227 294,817 New York_ +2.7 5,916,507,587 6,285.695.515 2,934,273,502 2,856,787,922 Rochester 5,510.655 +28.0 9,267,299 10,729,313 7.053,387 Syracuse 3,903,721 -8.2 5.290,274 5,393,633 3,582,825 Conn.-Stamford 3,362,809 2,448,607 -12.4 4,042,866 2.752,256 N. J.-Montclal 1,767,691 703,044 *544,732 -17.5 449,198 Newark 36,755,176 28,619,754 20,530,189 -27.9 14,794,874 Northern N. J 46,284,079 38,198,771 23,463,320 24,655,055 -4.8 Total (12 cities 3.018,745,761 2,946,200,041 +2.5 6,050,484,899 6,451,307,274 Third Fedora Reserve Dist rict-Philad elphla- Pa.-Altoona _ 1,300,979 626,270 404,343 -42.2 268,337 Bethlehem. _ Clearing Hou se has suspen ded cle wings tempor arily. 1,236,408 002,756 Chester 430,147 -50.3 213,955 1,842,986 Lancester 2,289,069 595,461 1,312,839 -54.6 Philadelphia _ • 246,000,000 258,000,000 -4.7 431,000,000 505,000,000 Reading 3,0'74,285 3,817,270 • 2,171.858 -52.2 1,038,259 Scranton 4,220,506 3,945,677 • 2,342,473 -23.7 1,787,183 2,899.335 Wilkes-Barre 3,168,531 1,666.604 -13.9 1,435,012 York 1,828,700 1,619,389 1,143.860 -24.7 860,945 3,261,000 3,632,000 N. J.-Trenton • 2,327,500 -8.4 2,133,100 Total (9 cities) 254,332,252 271,942,672 -6.5 449,886.977 195,621,533 -22.3 310,220,275 389,770,260 Fifth Federal Reserve Dist rict-Richm ondw.va.-IIunt'n 425,659 -71.8 120,206 Va.-Norfolk _ 2,510.605 -12.8 2,189,000 25,911,338 -4.5 Richmond _ 24,756,559 S.C.-Charlest' 753,333 -5.2 714,317 53,995,504 -34.3 35,491,167 Md.-13altim ore _ D.C.-Wash'ton18,780,000 -53.0 8.830,093 684,708 3,799,817 32,415,573 1,647,186 75,873,797 23,397.524 1,045.186 3,638,306 41,288,000 2,185,097 80,959,094 24,161,654 102,376,339 -29.6 137.818,605 153,277.337 Total(5 cities)- Total (6 cities). 151,931,424 72,101,342 Sixth FederalI Reserve Dist rict-Atlant m2,000,000 2,700,529 -32.5 Tenn.-Knoxvil e 1,823,206 12,581,312 10,429,916 -7.4 _ 9.663.306 38,566,829 29.800,000 +0.3 30,800,000 Ca.-Atlanta 769.403 +14.3 1,312,714 879,617 Augusta 719,735 372,458 +14.7 427,268 Macon 13.110,066 9,271,947 -12.1 Fla.-Jacksonv.8.146,471 +12.5 11,731,286 8,974,18' . 58h 10,090,138 Ala.-13irmi1 +7.3 1,432,567 849,424 911,318 Mobile Miss.-Jackson _ Clearing hou se not functlo ning at present. 122,199 92,798 -8.0 85,375 Vicksburg- - _ 36.755.037 11,195,189 ..'.23,758.340 -52.9 La.-New Orl'no1_ 87,931,000 -15.8 122.712.117 74,030,888 Total (10 citi 0 2,251,743 20,762.717 44,817.930 1,453,643 1,172,509 14,185,429 19,839,075 1,715,760 128.695 38.574,972 1930. 1931. Seventh Feder al Reserve D istrict- Chi cageMich.-Adrian Clearing hou se not lunette fling at present. 620,774 463,090 -25.5 345,028 Ann Arbor__ _71,663,984 -88.8 153,432.373 8,025,578 Detroit 2,486,184 -67.3 814,040 4,393,366 Grand Rapids_ 2,555,344 2,196,000 -84.9 330,600 Lansing 1,565,630 -73.9 2,630,226 408,092 2nd -Ft. Wayne 16,559,000 14,283,000 -37.8 8,881.000 Indianapolis_ _ 1,688,986 -68.4 2,449,925 533,432 South Bend _ _ _ 3,982,722 3,124,456 -12.0 2,749,371 Terre Haute_ _ _ 20,648,812 14,702,485 -28.6 10,497.752 Wis.-Milwaukee Iowa-Cedar Rap Clearing boo se not tuned() Kling at present. 6,465,003 5,555,417 -34.4 3,643,583 Des Moines_ _ _ 4,008,828 2,252,041 -19.4 1,816,028 Sioux City- - No clearings available. Waterloo 1,615,011 1,047,681 -71.4 *300,000 111.-Bloomington 195,449.170 225,095,632 -13.2 488,078,93/ Chicago 811,722 577,053 -20.6 458,153 Decatur 3,894,523 2,396,316 -1.6 2,357,777 Peoria 3,111,864 676,027 -27.7 488,795 Rockford 2,236,784 1,496,677 -50.2 745,943 Springfield_ 673,303 220,908,369 5,460,214 3,212,000 3,520,096 21,501,000 2,194,834 4,670,567 28.210,509 7.163.218 5.308,820 1.889,098 559,870,192 1,191,935 5,374,482 3,114,107 2,606,571 720,851,615 876,869,315 Eighth Fedora I Reserve Dis rrict-St. Lo uisInd.-Evansville Clearing hou se not functio Mug at present. 93,100,000 62,800,000 -4.1 60,200,000 510.-St. Louis.. 22,240,732 17.853,614 -3.6 17,208,988 Ky.-LouLsvide _ 11,843,530 +7.6 10,543.145 9,802,401 Tenn.-Memphis Ill.-Jacksonville No clearings :only one ban k open. 853,407 520.000 -14.2 446,000 Quincy 118,100,000 41,078,748 16,430,860 128,037,669 176,812,758 Ninth Federal Reserve Dis trict - Min neapol is3,431,212 2,082,081 -1.7 2,046,315 Minn.-Duluth__ 59,605,776 44,962,414 -1.4 45,577,997 Minneapolis_ .._ 19,244,768 15,585,644 +4.5 16,282,373 St. Paul 1,805,227 1,583,926 -13.2 1,374,706 No.Dak.-Fargo 874,714 651,2.50 -24.5 491,669 S. D.-Aberdeen. 547,153 332,543 -21.2 261,978 Mont -Billings _ 2,428,165 1,741,465 +16.5 2,028,521 Helena 4,067.713 74.367.386 22,152,781 1,763,283 1,016,989 609.161 2,787.123 87,987,015 106,764,436 Tenth Federal Reserve Dis trict - Kan sas Cit 9-223,936 182.616 -75.34 45,088 Neb.-Fremont No clearings available at presen Hastings 2,663,294 2,163,089 -25.2 1,618,394 Lincoln 36,174,313 23,770,192 -15.9 19,989,776 Omaha 2,541,258 1,669,200 -17.4 1,379,109 Kan.-Topeka _ 4,701,516 3,659,257 -52.5 1,739,409 Wichita 86,476,145 64,561,298 -19.3 52,004,498 Mo.-Kans City. 4,015,868 2,423,546 2,627,450 -7.8 St. Joseph 924,679 400,79 626,506 -36.0 Colo.-Colo.Sngs 1,090,023 436,14 702,545 -37.9 Pueblo 3,075,062 42,008,243 3,567,297 6,246,500 116,744,243 5,505,682 1,178,591 1,473,965 99,962,153 -19.8 138,811.521 180,101.209 Eleventh Fede ral Reserve District-Da has1,338,153 -54.0 603,370 Texas-AustIn 26,237,341 +0.5 26,358,098 Dallas 5,086,955 -2.2 4,972,732 Fort Worth 2,156,000 -19.9 1,728,000 Galveston 2,253,137 -3.2 2,180,510 La.-Shreveport.. 1,265.188 38,286.882 7,857,051 2,347,000 3.541,255 1,233,153 40,500,450 10,663,808 2,390,000 5,169.702 -3.3 53,297,377 59,957,113 237,844,347 Total (4 cities). Total(9 cities). Total(5 cities)_ 351,270,659 -32.3 88.398.133 68,063,559 80,126,758 35,842,710 90,976,015 06,939,323 +1.7 37,070.686 1,203,150 301.626 Twelfth Feder al Reserve D [strict-San Franci sco32,206,641 22,680,707 --6.6 21,190,273 Wash.-Seattle_ 8,007,000 5,598,000 --19.6 4,499,000 Spokane 747,853 424.611 --23.0 326,832 Yakima 34,697.388 +10.9 19,450,463 21.563,926 Ore.-Portland 14,048,359 8,964,568 --3.2 8,676,540 Utah-Salt L. City 6,104,466 --0.8 2,828,96 2,805,704 Callf.-Long No longer will report clearin gs Los Angeles_ 4,378,133 3,290,83 --27.8 2,376,542 Pasadena 6,760,328 6,059,34 ---49.7 3,046,981 Sacramento __ _ San Diego_ _ _ No longer will report clearin gs 91,572,194 102,229,42 --10.4 155,356,232 San Francisco_ 2,105,070 1,567,50 --22.6 1,212,707 San Jose 1,809,474 1,112,407 --17.3 920,064 Santa Barbara_ 1,581,594 959,699 --19.9 768,819 Santa Monica_ 1,670,000 1,162,089 --7.3 1,076,954 Stockton 172.661,235 2,595,461 2,039,700 1,775,320 1.396,900 269,472,538 310,107,829 Total (13 cities) 160,036.540 176,323,622 Grand total (109 4,447,175,126 4,656,291,505 cities) -9.2 41,001,341 10,518,000 879.779 41,717.423 16,528,313 7,115,525 sal 5,362,983 6.015,849 8.882,265,113 9,859,205,793 Outside NewYork 1,512.901,624 1,799,503,583 -15.0 2,965,757,526 3,573,510,283 Week Ended May 18. Clearings al1933. 525,778,184 Fourth Fede r at Reserve D istrict-Clev elandOhio-Akron__ _ . Majority ba nks unlicense (I; Clear Mg house not functioning. Canton Clearing hou se not functio Mtn; at present. 58,324.459 _60,845,229 Cincinnati 42,955,176 -15.4 36,330,442 Cleveland 135,999,432 -32.9 104,856,912 130,163,368 . 44,275,460 14,578,100 13,706,400 Columbus.__ _ 7,811,600 -22.9 6,019,100 1,531,939 Mansfield_ __ _ _ 2,214,465 1,082,937 -17.0 898,558 b b Youngstown _ b b 77,772,438 -17.2 130,928,865 182,840,798 64,407,864 Pa.-Pittsburgh - 1932. 1933. Jotal (7 cities). We now add our detailed statement, showing last week's figures for each city separately for the four years: Inc. or Dec. Clearings am- Total (17 cities) Week End. May 20 Canada 3669 Financial Chronicle Volume 136 1932. Inc. or Dec. CanadaMontreal Toronto Winnipeg Vancouver Ottawa Quebec, Halifax Hamilton Calgary St. John Victoria London Edmonton Regina Brandon Lethbridge Saskatoon Moose Jaw Brantford Fort William _ - _ New Westminster Medicine Hat_ Peterborough_ Sherbrooke Kitchener Windsor Prince Albert Moncton Kingston Chatham Sarnia Sudbury 81,613,475 106,667,443 46,559,075 12.607,646 3,674,961 3,676,105 1,946,944 3,246.027 4,704,503 1,183,689 1,309,580 2,129,027 3,042,635 3,245,50" 267,059 294.08 1,134,56 575,17 795,09 535,23 385.82 150,32 496%35 551,997 802,707 2,678,021 226.423 470,057 431,393 376,774 .300,000 478,034 72,452,914 +12.6 74,828,168 +42.5 37,237,142 +25.0 12,788,454 -1.4 4,285.273 -14.2 4,665,142 -21.2 2,165,263 -10.1 3,689,133 -12.0 4,811,134 -2.2 1,709,926 -30.8 1,316,339 -0.5 2,285.737 -6.9 3,677,785 -17.3 2,826,514 +14.8 392,752 -32.0 311,682 -5.6 1,449,178 -21.7 513,801 +11.9 718,947 +10.6 606,627 -11.8 459,681 -16.1 159,476 -5.7 584,318 -15. 609,406 -9.4 813,866 -1.4 +8. 2,473,337 348,333 -35.0 724.693 -35. 555,460 -22.' 429,740 -12.3 262,565 +14.3 478,490 -0.1 Tote.(32 cities) 286,555.333 240,631,276 +19.1 146,651,789 b No clearings available. • Estimated. 1931. 1930. $ $ 160,477.210 147,003.090 137,490.469 127,386.030 43,805,594 50,009,970 16,525.836 19.40,2,057 7,217,722 7,953,473 6,463,748 6,511,074 4,590,611 3.317.369 5.254,830 5,911,121 5,794,993 7,081,571 2,444.047 2,4;22,459 2,043,356 2.530,127 2,887.567 3,393,832 4,657,630 5,971,950 3,816,720 4.967,839 384,623 491,817 403,515 850.994 1,697,551 2,132,520 827,685 1.169,605 1,107.707 1,095,205 741,083 963,168 581,492 807,786 237,813 365,764 911.815 751,372 922,122 971.905 1,024,328 1.192,193 5,899,800 3,415.49 436,787 409,052 1.032,967 793,656 707,811 672,556 633.185 443,687 804.749 504,407 1.276.005 669,557 419,148,031 416,206,033 3670 Financial Chronicle THE ENGLISH GOLD AND SILVER MARKETS. We reprint the following from the weekly circular of Samuel Montagu & Co. of London, written under date of May 10 1933: GOLD. The Bank of England gold reserve against notes amounted to £185,988.164 on the 3d inst., an increase of £49,638 as compared with the previous Wednesday. No important purchases of bar gold have been announced by the Bank. only $337 having been acquired during the week. Supplies of gold available in the open market during the week amounted to about £1,500,000. There was a keen demand from private Continental sources, prices again ruling at a substantial premium over the franc parity. Quotations during the week: Per Fine Equivalent Value Ounce. of £ Sterling. May 4 124s. 6d. 13s. 7.77d. May 5 124s. 8d. 13s. 7.55d. May 6 124s. id. 13s. 8.32d. May 8 123s, 9d. 13s. 8.76d. May 9 123s. 4d. 13g. 9.32d. May 10 123s. 4d. 13s. 9.32d. Average 123s. 11.33d. 13s. 8.51d. The following were the United Kingdom imports and exports of gold registered from mid-day on the 1st inst. to mid-clay on the 8th inst.: Imports. Exports. Netherlands £1,024,602 Netherlands £446,955 Belgium 23,000 Belgium 2,000 France 826,965 France 124,347 Switzerland 83,949 Austria 24,950 Iraq 20,874 Czechoslovakia 47,100 United States of America_ 653.036 Other countries 237 British South Africa 2,090,109 British West Africa 58,166 British India 706,136 British Malaya 29,124 Australia 67,496 Canada 230,000 Other countries 26,111 £5,839,568 £645,589 irr Gold shipments from Bombay last week amounted to about £1,112,000. The SS. Rajputana carries £922,000, of which £493,000 consigned is to London, £400,000 to New York, and /29,000 to Amsterdam. The SS. President Monroe has £80,000 consigned to York and £30,000 in sovereigns for Marseilles, and the SS. City of New Cairo has £80,000 destined for London. CURRENCY. A Reuter message from Moscow dated yesterday states that: "The possibility of the introduction of a currency in the Soviet Union is being freely discussed here, and platinum it is thought that the question is:being seriously considered by the authorities . Ime'The currency, it is suggested, would be merely for internal use and for the convenience of tourists and foreign residents, who, hitherto, have been forced to use American dollars or sterling for purchase at the Government stores of commodities which cannot be purchased for roubles. The U. S. S. It. possesses the largest platinum reserves in the amounting to some 7,000,000 ounces, whose output is controlled world, Ural Platinum Trust and exported through the Commissariat of by the Finance at prices based on the London market. Before the war, Russia a world monopoly in the supply of platinum, the only otherhad almost reserves being in British Columbia; and to-day the U. S. S. R. important still leads the world in production. "It is in view of the uncertainty of the platinum market that the Soviet Finance Commissariat is believed to be seriously considerin g the introduction of a platinum currency in order to meet the increase of output of the metal and at the same time for the convenience of foreigners. "The currency, it is thought, would be purchsable only for foreign 'valuta,' in order not to restrict the supply of dollars and sterling so essential for the meeting of Soviet commitments abroad." SILVER. Although movements in prices were less violent during the preceding week, the market continued very erratic, withthan fluctuations in quotations. The Continent has sold, but the other wide factors shown no decided tendency, speculators having bought and sold, whilsthave the Indian Bazaars have also worked both ways. American operations have again been affected by movements in the dollar exchange, nevertheless owing to weaker prices in New York the pressure from this quarter has eased. Rather as a result of hesitation on the part of buyers, the tendency has been towards a lower level, but the market is very sensitive and seems likely to respond readily to moderate pressure either way. The following were the United Kingdom imports and exports of silver registered from mid-day on the 1st inst. to mid-clay on the 8th inst.: Imports. Exports. Germany £24,039 United States of America-C.327.690 Netherlands 28,254 Yugoslavia 24.900 France 4,905 French Possessions in India 7,100 Japan 13,452 France 4,032 United States of America__ 42,200 Germany 2,565 Gibraltar 8.800 Other countries 2.260 Australia 19,590 Canada 2,472 Other countries 3,432 £147,144 £368,547 Quotations during the week: IN LONDON. IN NEW YORK. Bar Silver per Oz. Std. (Cents per Ounce .999 Fine.) Cash Deliv. 2 Mos. Deliv. May 4___19%d. 197-16d. May 3 35% May 5_ _ _19lid. 193-16d. May 4 35 May 6___193d. May 5 199-16d. 35 5-16 May 8._197 4d. May 6 19lid. 35 May 9_19 5-16d. 194cl. May 8 35 May 10__ _18 15-16d. 19d. May 9 Average _ _19.354d. 19.406d. 'The highest rate of exchange on New York recorded during the from the 4th inst. to the 10th inst. was $4.06 and the lowest $3.89. period The stocks in Shanghai on the 6th inst. consisted of about 150.000,00 0 ounces in sycee. 245,000.000 dollars and 8.460 silver bars, as compared with about 149,100.000 ounces in sycee, 245.000.000 dollars and 8.460 silver bars on the 29th ult. ENGLISH FINANCIAL MARKET-PER CABLE. The daily closing quotations for securities, &P., at London, as reported by cable, have been as follows the past week: Sat., Mon.. Tues., 1Ved., May 20. May 22. May 23. May 24. Silver, per oz__ 19 3-16d. 189d. 1634d. 18 13-16d. Gold, p.fine oz. 1225.70. 122s.834d. 1228.6d. 1228 8d. Consols. 234% 75% 72% 71% 713.4 British 3.%%W.L 90% 993.4 98% 9834 British 4%1960-90 109% 1093. 109 10934 French Rentes (In Parls)3% fr. Holiday. French War L'n (in Paris) 5% Holiday. 1920 amort Thurs., Frt., May 25. May 26. 18 11-160. 18340. 1225.50. 1223.6d. 7134 713.4 9834 9834 1083.4 1083i 67.10 66.90 66.80 Holiday. 66.30 107.30 107.10 106.90 Holiday. 105.20 The price of silver in New York on the same days has boon: Silver In N. Y., per on, (cts.): 3334 3334 3334 3394 3334 333.4 May 27 1933 PRICES ON PARIS BOURSE. Quotations of representative stocks on the Paris Bourse as received by cable each day of the past week have been as follows: May 20 May 22 May 23 May 24 May 25 May 26 1933. 1933. 1933. 1933. 1933. 1933. Francs. Francs. Francs. Francs. Francs. Francs. Bank of France 11,900 11,900 11,900 11,800 Banque de Paris et Pays Bas 1,600 1,610 1,620 1,610 Banque d'Union Parisienne 378 373 377 Canadian Pacific 283 284 293 -ioi Canal de Suez 18,095 18,075 18,295 Cie Distr d'ElectricItie 2.425 2,455 2,485 Cie Generale d'Electricitie 2,190 2.210 2,256 2:Zia Cie Generale Transatlantique_._ 54 54 56 Citroen B 522 530 520 Comptoir Nationale d'Escompte 1,160 1.140 1,160 1-,150 Coty Inc 210 210 210 220 Courrieras 340 339 343 Credit Commercial do France._ 790 790 807 Credit Fonder de France 4,830 4.790 4,800 4-,788 Credit Lyonnais 2.200 2,210 2,200 2,200 Distribution d'Electricitie Is Par 2,430 2,460 2.520 2,510 Haut Lyonnais 2.760 2,800 2.830 2,840 Energie Electrique du Nord 725 732 729 ____ Energie Electrique du Littoral._ 955 960 965 French Line 54 .54 56 57 Galeries Lafayette 92 93 02 92 Gas le Bon 1.040 1,040 1,030 1,020 Kuhlmann 590 530 610 610 L'Air Liquide 810 810 830 810 Lyon (P. L M.) HOLI955 915 900 FIOLIMines de Courrleres DAY. 340 340 350 DAY. -350 Mines des Lens 400 440 450 440 Nord Ry 1,270 1,280 1,280 1,280 Orleans By 880 890 Paris, France 1,010 1,010 1,al 1,010 Pathe Capital 955 980 990 Pechiney 1,110 1,130 1,140 1:155 Reines 3% 67.10 06.90 66.80 06.30 Rentes 5% 1920 107.30 107.10 106.90 105.20 Rentes 4% 1917 77.80 77.40 77.20 75.90 Rentes 434% 1932 A 83.80 83.30 83.00 82.00 Royal Dutch 1,610 1,620 1,610 1,600 Saint Gobain C & C 1,245 1,235 1.200 ---Schneider & Cle 1,505 1,590 1,599 Societe Andre Citroen 520 530 520 -Ltio Societe Fiancalse Ford 78 79 80 77 Societe Generale Fonciere 138 141 139 136 Societe Lyonnalse 2,765 2.810 2,840 --Societe Marsellaise 580 585 580 Suez 18,100 18,100 18,200 18:566 Tubize Artificial Silk pref. 165 166 173 Union d'Electricitie 880 ___ 890 -gOo Union des Mines ____ ____ 180 180 Wagon-Lila 75 75 76 THE BERLIN STOCK EXCHANGE. The Berlin Stock Exchange resumed trading on Friday, April 29 1932, after having been closed by Government decree since Sept. 18 1931. Closing prices of representative stocks as received by cable each day of the past week have been as foilows: Reichsbanz (12%) Berliner Handels-Gesellschaft (5%) Commerz-und Privat-Bank A. G Deutsche Bank und Disconto-Gesellschaft Dresdner Bank Deutsche Reichsbahn (Ger Rys) pre!(7%) Allgemelne Elektrizitaets-Gesell (A E G)_ Berliner Kraft u Licht (10%) Dessauer Gas (7%) Gesfuerel(4%) Hamburg Elektr-Werke (8)4%) Siemens & Ilalske(7%) 10 Farbenindustrie (7%) Salzdetfurth (9%) Rheintsche Braunkohle (10%) Deutsche Erdoel(4%) Mannesmann Roehren Hapag Norddeutscher Lloyd May May 20. 22. 128 94 51 55 55 97 26 112 109 92 102 156 130 179 190 112 75 18 19 128 94 51 55 54 97 26 113 111 03 103 159 132 __ 195 115 77 18 19 May May May May 23. 24. 25. 26. l'er Cent of Par 128 128 94 94 51 51 54 53 54 53 97 97 25 25 114 112 Holl112 112 day. 93 93 104 104 159 161 132 132 182 __ 195 197 114 112 76 74 21 20 22 21 126 94 51 53 52 97 25 111 111 92 103 168 129 1.5i 111 70 19 20 In the following we also give New York ns for German and other foreign unlisted dollar bondsquotatio as of May 26 1933: Bid Anhalt 75 to 10411 2,, Argentine 5%, 1945. $100 pieces 6c; Antioqula 8%, 1946 23 AustrianDefaultedCoupons 170 Bank of Colombia. 7%,'47 130 Bank of Colombia, 7%,'48 130 Bavaria 6345 to 1945 3512 Bavarian Palatinate Cons Cit. 7% to 1945 23 Bogota (Colombia) 634,'47 1 2212 Dolovia 6%. 1940 .5 Buenos Aires Scrip 110 Brandenburg Elec. 6s, 1953 52 Brasil Funding 5%,'31-51 4212 British Hungarian Bank 634s, 1962 135 Brown Coal Ind. Corp. 13%., 1953 63 Cali (Colombia) 7%, 1947 14 Callao (Peru) 734%. 1944 4 Ceara (Brazil) 8%, 1947_ 6 City Savings Bank, Budapest, 7s, 1953 32 Deutsche Bir 6% '32 unst'd 177 Dortmund Mon Util 65,'48 30 Dulsberg 7% to 1945 114 Duesseldorf 7s to 1945_ _ 25 East Prussian Pr. Os, 1953. 43 European Mortgage & Investment 734z, 1968.__ I 4712 FrenchGovt. 534s, 1937_ 110 French Nat. Mall HS.65;52 105 Frankfurt 7s to 1945 25 German All. Cable is, 1045 57 German Building & Landbank 634%, 1948 30 Haiti 6% 1953 67 Hamb-Am Line 640 to '40 61 Hanover Harz Water Wks. 6%, 1957 24 Housing & Real Imp 75,'46 28 Hungarian Cent Mut 7s '37 Ws Hungarian Discount & Exchange Bank 75, 196_11 2912 Flat price. Ask. 29 Bid. Hungarian Defaulted Coup 140 Hungarian nal ilk 7345,'32 71 Koholyt 634s, 1943 3312 25 Karstadt 68, 1943 C-D____ 13 Land H Bk, Warsaw 6g,'41 42 32 Leipzig Oland Pr. 634s.'48 32 Leipzig Trade Fair 75, 1953 53,2 3912 Luneberg Power, Light & 2412 Water 7%, 1948 46 28 Mannheim & Paint 75, 1941 44 2412 Munich 7s to 1945 32 612 Munic Bk, Hessen,75 to '45 26 20 Municipal Gas &I,lec Corp 5312 Recklinghausen, is, 1947 26 43,2 Nassau Lanclbank 0348, '38 6414 Nat Central Savings Bk of 3612 Hunga., 734s, 1962____ 3614 National Hungarian & Ind. 66 Mtge. 7%, 1948 1 3412 10 Oberpfalz Elec 7%, 1946._ 3012 612 Oldenburg-Free State 7% 10 to 1945 27 Porto Alegre 7%, 1968____ f1612 3312 Protestant Church (Ger80 many) 75, 1946 2912 82 Prot Bk Westphalia 65,'33 80 1612 Rhine Westph Elec 7. 1936 42 28 Rio de Janeiro 6%, 1933_ I 1712 46 Rom Cath Church 634s,'46 46 It C Church Welfare 7s,'46 3812 4812 Saarbruecksn M Ilk 68. '47 74 Salvador 7%, 1957 15 ff. () Santa Catharina (Brazil) 28 8%. 1947 11512 58,2 Santander (Colon) 75, 1948 13 San Paulo (hirs,211) (is, 1947 I 1412 32 Saxon Public Works 5%,'32 150 72 Saxon State Mtge 6e. 1947 48 64 Slem & MIAs deb 61, 2930 295 South Amer Rye 6%, 1933 99 28 Stettin Pub Util 78. 1946_ _ 37 33 Tucuman City 7s, 1951___ 124 3212 Tucuman Prov. 75. 1950_ 36 Veeten Elte fly is, 1947..__ 2312 31 Wurtenberg 7s to 1945_ _ _ _ 33 Att. 78 3aI2 19 47 55,2 2612 50 46 35 29 31 6534 3814 3612 33,2 31 17,2 3212 82 46 19 49 40 76 17 161s 1412 1512 53 310 100 40 26 40 2512 36 (Commercialand MiscellaneousEtnus Toronto Stock Exchange.-Record of transactions at the Toronto Stock Exchange, May 20 to May 26, both inclusive, compiled from official sales lists: Stocks- 3671 Financial Chronicle Volume 136 sates Friday Last Week's Range for Week. of Prices. Sale Par. Price. Low, High. Shares. Abitibi P & Pap 6% pre1100 50 Barcelona common 100 99 Bell Telephone 3% Blue Ribbon Corp corn_' Brantford Cord let pref_25 21 Brazilian T L & Pow com_. 1334 " 1.70 Brewers & Distillers 3% B C Packers common_ _• 100 . Preferred • 20% B C Power A * B • Building Products A Burt (1 ,N) Co common_25 31 • Canada Bread corn 100 1st preferred 100 B preferred 534 Canada Cement corn • • 2734 Preferred Can Steamship pref_ __ _100 * Can Wire & Cable A 5% Canadian Canners com___. 7 Convertible preferred. • loo 1st preferred 5% Can Car & Fdry coua____• 25 15% Preferred Gan Dredging & Dock com• 17% Can General Elec. pret 50 56 434 Can Indust Alcohol A_ _ _ _• Canadian 011 common_ _ _• 10 Canadian Pacific Ry__ _25 15% 7% Cockshutt Plow common..• Consolidated Bakeries_ _ _• 634 Consolidated Industries_ _• Cons Mining & Smelting 25 109 100 Consumers Gas 6 Cosmos Imp Mills corn_ _ _• Dominion Stores, corn_ _ _* 21% Ford Co of Canada A__ _• 10% Frost Steel & Wire pret_100 1 Wares com_• 2% General ,9•^, Goodyr Tire & Rub pref100 100 Great West Saddlery com_• 100 Preferred 3% Gypsum Lime & Alabast_it 6 }Linde & Dauche Paper _.• • Hunts Ltd A 634 • 16.00 Internatl Nickel cons Internatl Utilities A • 10 Kelyinator of Can corn.. _ _ti Laura Secord Candy com _• 41% Loblaw Groceterias A.. _ _ _• 13% • B Maple Leaf Mill prat_ __100 5% Massey-Harris corn • Monarch Knitting pref_100 • Moore Corp corn 100 A 5 Ont Equit Life 10% pd_100 * Ont Steel Prod 1 • Orange Crush com Page-Hersey Tubes cons_ _• 58 Photo Engravers & Elee._• 14 Pressed Sietals corn * 13 * Riverside Silk Mills A_ Russell Motor preL. _100 St. Lawrence Corp A_-.50 Simpson's I.td B " 100 23 Preferred Standard Steel Cons corn_• Steel Co of Canada corn_ _• 25% 25 30 Preferred Tip Top Tailors pref ..j00 4% Union Natural Gas eons_ _• Walkers (Hiram) corn.... _• 16% Preferred • 14% Weston Ltd (Geo) ' 21% BankCommerce 100 Dominion 100 Imperial 100 Montreal 100 Nova Scotia 100 Royal 100 Toronto 100 Loan and TrustCanada Pernianent_ _. _100 Huron & Erie Mtge_ _100 20% paid • Ontario Loan & Debent_ 50 Toronto Mortgage 50 • No par value. 144 140 143 185 145 166 140 13 105 95 Range Since Jan. 1. Low. High. May 3 Jan 1 202 3 3 May Apr 14 5 10 12 12 Jan 100 Apr 80 594 9714 9934 May 4 Apr 1 435 134 4 May 21 Jan 555 18 21 20 734 Apr 13% May 13% 16,979 12 2.00 May Jan 1.50 2.00 56,605 55c 834 May Apr 1 825 3% 3% May 16% Jan 6 260 16 15 110 1434 Apr 2134 May 2034 20% May 5% Feb 314 25 534 534 35 10% Apr 15% May 14% 1534 May Feb 31 35 20 31 31 5% May 134 Mar 50 4% 4% Jan Mar 68 10 40 55 55 May May 20 7 15 15 15 May 5% Feb 234 1,451 5% 534 Apr Apr 30 337 13 27% 26 9% May 2% Mar 200 7% 7% May 2634 May 5 26 2634 2634 534 May 710 234 Mar 4% 534 7% May Apr 3 1,585 6% 7 May Apr 72 145 46 70 69 Apr 5% May 3 230 534 5% 934 Apr 15% May 65 14% 15% May Mar 18 310 10 18 17 Mar 56% May 110 51 5934 56 May 5 134 Mar 1,010 434 4% May 634 Apr 10 747 834 10 Apr 16% Jan 9 15% 5,008 14 834 May 780 334 Feb 734 8 7% May Jan 2 1,071 7 5 2% May 34 Apr 50 134 134 May Mar 109 2,150 54 99 109 Mar Jan 181 389 170 174 175 May 6 Apr 2 145 6 4 May 23 Feb 12% 650 21% 20% Apr 1034 May 6 4,210 934 10% May May 40 40 40 40 40 May 3 Mar X 970 2% 3 May Apr 100 19 80 9734 100 May 1 Jan 44 100 1 1 May 8 May 5 20 8 8 May 4 1% Feb 2,319 334 331 May Mar 7 2 270 534 6% Jan 8 10 434 Mar 6% 63.4 8.15 Mar 16.85 May 15.00 16.15 23,546 Slay 10 Apr 534 390 734 10 May 3 % Mar 20 3 3 May Jan 42 100 36 40% 42 May 2,693 10% Apr 14 13% 13% 80 log Mar 13% May 13% 13 May Apr 5 1534 18 14 14 5% May 2% Mar 1,495 5% 534 Apr 4 25 May 20 25 25 Mar 1034 May 5 60 9% 10% Jar Apr79 50 65 77 73 May 6 5 Slay 60 6 5 May 5 4% May 50 4% 5 134 May 34 May 180 % 1% May Apr 58 416 40 58 56 May Apr 14 8 300 14 12 Jar 14% Apr 8 1,337 13 11 Mar 12 Slay 7 150 12 11 Jar May 45 28 5 32 32 634 May 634 May 25 6% 6% May 6 6 May 52 6 6 May Mar 24 6 187 24 20 4% May Jan 1 60 3% 334 1,090 14% Feb 25% May 25% 24 Mar 30g May 123 25 30% 29 May May 40 5 35 40 40 5 May May 2% 385 4% 4% May Mar 17 4 71,892 11% 17 9% Mar 15% May 1334 15% 13,72 75 16% Apr 21% May 21% 21 120 128 123 151 228 1233.4 152 136 135 143 176 235 142 164 144 140 144 186 236 147 166 80 55 34 59 48 121 132 139 80 13 105 95 140 80 13 105 95 21 120 12 77 117 13 20 104 5 90 Apr 144 Apr 143 Apr 156 Apr 189 Apr268 Apr 147 Apr172 NrEq Jai Ja. Jai Jai Ma; Jai Ja May 153 Ja Slay 102 Ja 18 May Ma Apr 105 Mar 9334 Ja Toronto Curb.-Record of transactions at the Toronto Curb, May 20 to May 26, both inclusive, compiled from official sales lists: Stocks- Sates Friday Last Week's Range for Week. of Prices. Sale Par. Price. Low. High Shares. Range Since Jan. 1. Low. 25 334 Jan 4 4 • Biltmore Hats corn May 3 50 3 3 • Bissell Co (T E) cons_ Jan 1,127 15e 1.60 1.25 • 1.50 Brewing Corp corn Mar 44 962 10% 9% Preferred • 10 534 Apr 8% 2,650 8 8% Can Bud Breweries com.• 3,675 13% Mar 30 24 • 30 Canada Malting Co 135 13% Jan • 20 19 Canada Vinegars corn 25 334 Mar 6 6 Can Wire Bound Boxes A • 3 Apr 50 • 5 5 A Press Consolidated 134 Jan 50 234 234 Cosgrave Rip Brewery-10 Sc May 1,420 25e Sc 10c Canada Paving corn Feb 4 0 734 934 18,050 Distillers Corp Seagrarns_• 225 14% Feb 20% 23% • 23 Dominion Bridge Apr 1 420 2% 134 of Canada_10 Dom Motors Apr 25 10 23 22 Dom Tar & Chem prat _100 Dufferin Pay de Cr StoneJan 5 10 10 10 100 Preferred Mar 52 40 87 82 Goodyear Tire & Rub com• 6346 85 23.4 Apr 674 _• corn_ Bridge Hamilton 44 Mar 1,400 1% 134 134 • Honey Dew corn Mar 5 25 10 10 * 10 Preferred Feb 7 87 9% 934 _5 Imperial Tobacco ord_ Apr 2634 190 34% 33% 3434 Montreal L II & P cons_ _.• 165 16% Mar • 24 2334 corn Breweries Natl Mar 210 534 • .1034 1034 Corp Nail Steel Car Jan 6 610 934 1034 Power Corp of Can corn-.• 10 May 50 38 394 38 Preferred Mar X 50 134 134 134 • Rogers Majestic 75 4634 Mar 73 71 prat---100 Robert Simpson Onns, 034 Jan S 5 35 au • High. 4 3 2.00 15% 934 30 20 6 5 334 25e 9% 24 3 23 May May May May May May May May May May May May May May Slay 1034 May 87 Slay 63.4 May 1% May May 10 10 May May 35 2234 May May 12 May 12 3934 May 2 May Jar 74 93.4 May Sales Friday Last Week's Range for Week. of Prices. Sale Stocks (Concluded) Par. Price. Low. High. Shares. Service Stations cons A_ _ _• 100 Preferred Shawinigan Wat & Stand Pay & Matls corn_ " Tamblyns Ltd (G) pret_100 Toronto Elevators corn_ • Waterloo Mfg A OilBritish American OIJ Crown Dominion Oil Co..* • Imperial 011 Ltd International Petroleum_ _* McColl Frontenac Oil com* 100 Preferred 5 North Star Oil corn Supertest Petroleum ord.* • No par value. 1,570 15 145 10 10 145 135 26 3 7 32 13% 2 88 26 3 8 35 13% 2 88 2634 3% 12% 3% 1234 1534 1234 75 1% 18 1134 3 11% 14% 1134 70 1% 17 17,296 13 230 334 12% 20,022 1534 4,750 270 12)4 84 75 250 725 18 7 35 13% Range Since Jan. 1. High. Low. 35 1434 234 88 27 May May May May May May May 13 Jan 3% Feb Apr 1234 Mar 15% Mar 12% Apr 75 Apr 1.50 18 Mar May May May May May May Mar May 2% Apr 16 Apr Feb 34 Apr Apr 82 12% Feb 1% Feb 734 134 734 10% 734 543 11 Philadelphia Stock Exchange.-Record of transactions at Philadelphia Stock Exchange, May 20 to May 26, both inclusive, compiled from official sales lists: Stocks- sates Friday Last Week's Range for Week. of Prices. Sale Par. Price. Low. High. Shares. 43% 4334 • American Stores 110 110% Bell Tel Coot Pa pref _ _100 234 2% * Budd (E G) Mfg Co 10 10 1043 Preferred 334 4 • Budd Wheel Co 1134 10 Camden Fire Insurance_ _5 1134 2 134 2 * Central Airport 20 20 100 Con Tract of N J 3734 39 Electric Storage Battery100 28 25 10 28 Fire Association 86 86 Horn & Hard(Phila) cons.* 85 85 Horn & Ilard(NV) prat 100 3934 4034 Insurance Coot N A_ _ _ _10 8% 8 Lehigh Coal & Navigation * 17 10% 50 Lehigh Valley % 34 Mitten Bank Sec. Corp__25 1% 134 1% 25 Preferred 2% * 234 3 Pennroad Corp vie 2344 2634 50 Pennsylvania RR 45 45 50 Penns, Salt Mfg 9934 Phila Elec of Pa $5 pref..* 9934 98 3034 3134 25 Phila Elec Pow pret 234 234 Mita Rapid Transit__ _50 5% 43.4 534 50 7% preferred 4% 5% Phila & Read Coal & Iron * 20% 20 Philadelphia Traction _ _ _50 134 13.4 Railroad Shares Corp._* 434 4% 43.4 10 Reliance Insurance 37 37 * Scott Paper 134 134 Seaboard Utilities Corp..* 4% 4 Shreve El Dorado Pipe L 25 19 1934 Tao:lily-Palmyra Bridge_ * 34 % X Tonopah-Belmont Devel_ 1 ji is 118 1 Tonopah Mining 634 7% 734 50 Union Traction 18 193.4 United Gas Improv com__* 1934 9434 94 * 94 Preferred 534 5% * Westmoreland, Inc 534 534 * Westmoreland Coal Bonds1834 19 Cleo & Peoples tr ctfs 4545 18 13 Certificates of deposit_ 86 86 Eng 5s_1954 Lehigh dr New 9134 913/ Lehigh Valley annuity 6s_ _ 2434 2434 Peoples Pass tr ctfs 4s_1943 105 106% Phila Elea (Pa) lot 5s_1966 10534 105% 1966 1st 5s ree • No par value. Range Sine Jan. 1. High. Low. Feb 100 30 100 106% Mar 34 Mar 1,900 334 Mar 25 34 Mar 800 Apr 9 800 3.4 Apr 1,300 May 49 17 197 2134 Feb Mar 275 18 May 10 82 10 8034 Feb Mar 700 25 534 Slay 700 1,008 834 Feb 34 Feb 100 X Feb 700 134 Mar 6,600 9,900 1334 Jan 25 2534 Mar Apr 480 93 700 287 4 Apr 300 13,4 May Feb 3 • 100 26 234 Feb Mar 300 15 % Jan 20 100 334 Apr Jan 10 28 34 Jan 30 Jan 1 1,100 May 37 19 1.8 Jan 1,000 q Jan 400 33.4 Mar 700 Mar 13,700 14 May 115 86 Feb 5 275 Mar 4 320 4334 May 11434 Jan 234 May 1034 May May 4 1134 Mar May 2 May 20 May 40 May 28 Jan 99 9334 Jan 4034 May May 9 1934 May % Feb 134 May May 3 263,4 May 41% May 103% Jan Jan 33 2% Jan Jan 6 534 May 2234 Jan 13.4 May 434 May 38% May 1% May 5 May 3034 Jar 34 Feb 13.4 Apt 1234 Jar 2034 Jar 9934 Jar 534 Mai 534 May Apr 21% $6,000 15 18 Feb 1,000 17 May 86 1.500 86 20,000 9134 May 9134 Feb 3334 1,000 24 5,300 10234 Ma 11034 500 10434 Mar 105% Jar Fel May May Jar Fel May Bank Notes-Changes in Totals of, and in Deposited Bonds, &c. We give below tables which show all the monthly changes in National bank notes and in bonds and legal tenders on deposit therefor: Amount Bonds on Deposit to Secure Circula I lion for Nationa Bank Notes. National Bank Circulation Afloat onBonds. Legal Tenders. Total. 6 $ $ $ 982,031,393 88,832,155 893,199,238 899,410,240 Apr. 30 1933 90,840.375 966.660,540 875,820,165 885,871,740 Mar.31 1933 894,321,055 93,435,155 800,885,900 806.026,070 Feb. 28 1933 95,111,140 881,146,010 786,034,870 796,069,670 Jan. 51 1933 881,330,848 94,596,698 786,734,150 796,908,870 Dee. 31 1932 79.848.287 875,880,908 796,032,621 812,590,590 Nov. 30 1932 863,075,900 75.161.955 787,913,945 799,672,590 Oct. 31 1932 832.022.785 62,191,678 769,831.107 780.377,630 Sept. 30 193° 783,406,353 63,576,840 719.829,513 793,600,490 Aug. 31 1932 733.877.423 66,046,173 667,831,250 672,408,440 July 30 1932 736.674,213 67,103.868 669.570,345 670,487,590 June 30 1932 738,616,923 70,036.500 668,580,423 669,827,590 May 31 1932 71.523.840 737.996.081 666.472.241 668,882.490 Apr. 30 1932 1933, 1 secured by May outstanding $2.628,343 Federal Reserve bank notes lawful money, against $2,830,090 on May 2 1932. The following shows the amount of each class of United States bonds and certificates on deposit to secure Federal Reserve bank notes and National bank notes April 30 1933: U. S. Bonds Held April 30 1933 to Secure Bonds on Deposit May 11933. 28, U. S. Consols of 1930 2s, U. S. Panama of 1936 2s. U. S. Panama of 1938 3s, U. S. Treasury of 1951-1955 3344, U.S. Treasury of 1946-1949 314s, U. S. Treasury of 1941-1943 354s, U.S. Treasury of 1940-1043 3949. U. S. Treasury of 1943-1947 3s. U. S. Panama Canal of 1961 3s, U. S. convertible of 1946-1947 Totals On Depostt to On Deposit to Secure Secure Federal Reserve Bank National Bank Notes. Notes. Total Held. 570,095,200 570,095,200 47,875,160 47,875,160 24,184,180 24,184,130 84.650,450 84,650.450 50,974,400 50,974.400 61,928,400 61.928,400 20,098.450 20,098,450 38,598,000 38,598,000 1,000 1,000 1.005,000 1,005,000 899,410240 899.410.240 The following shows the amount of National bank notes afloat and the amount of legal tender deposits April 1 1933 and May 1 1933 and their increase or decrease during the month of April: Financial Chronicle National Bank Notes—Total Afloat— Amount afloat April 1 1933 Net increase during April $966,660,540 15,370,853 May 27 1933 Per When Share. Payable, Books Closed Days Inclusive. Public Utilities (Concluded). Commonwealth dr Southern Corp.— $90,840,375 $6 preferred (guar.) $114 July 1 Holders of rec. June 9 2,008,220 Commonwealth Utilities pref. A (quar.)- $134 July 1 Holders of rec. June 15 Preferred B (quar.) 1 1933-- $88,832,155 $134 July 1 Holders of rec. June 15 Preferred C (guar.) $1% Sept. 1 Holders of rec. Aug. 15 Consolidated Gas of N. Y., pref. (qu.).. Aug. 1 Holders of rec. June 30 National Banks.—The following information regarding Dayton Power& Light Co.6% of. (mo.) 500 July 1 Holders of rec. June 20 Diamond State Tel. Co.,634% pf. 134% July 15 Holders of rec. June 20 National banks is from the office of the Comptroller of the Eastern Gas& Fuel Assoc.,6% pf.(qu.). (qu.). July 134% 1 Holders of roe. June 15 Currency, Treasury Department: 434% preferred (guar.) $1.125 July 1 Holders of rec. June 15 Empire Power Corp.$6 prof. (Ouar.)July $135 1 Holders of roe. June 16 CHARTERS ISSUED. Green Mountain Power Corp. pt.(qu.)_ 750 June 1 Gulf Power Co. $6 pref.(quar.) Capital. 5134 July 1 Holders of rec. June 20 May 18—The First National Bank of Massillo Hackensack Water Co. A (guar.) n, Massillon, Ohio- 5200.000 43%0 June 30 Holders of rec. June 16 (The capital stock of this bank consists of 5100,000 preHonolulu Gas Co.(monthly) 150 July 1 Holders of rec. June 15 ferred stock and 5100,000 common stock.) Illinois Bell Telep. Co.(guar.) $2 June 30 Holders of rec. June 29 President, E. A. Campbell; Cashier, L. A. Laubenstein. Illinois Water Service Co.6% Pf.(qu.)._ 114% June To succeed the First National Bank of Massillon,0. Indiana Hydro-El. Pow. Co. 7% prof.... 8714c June 1 Holders of rec. May 20 15 Holders of rec. May Kings County Lighting (quar.) El% July 1 Holders of rec. June 31 VOLUNTARY LIQUIDATIONS. 19 7% preferred (quar.) 134% July 1 Holders of rec. June 19 May 15—The Citizens National Bank of Ennis. Tex 6% preferred (guar.) 100,000 114% July 1 Holders of rec. June 19 Effective April 26 1933. Liquidating agent, J. L. 5% preferred (quar.) % July 1 Holders of rec. June 19 Clarke, Ennis, Tex. Lexington Utilities Co.635% pt. (qu.)..- 134% June 15 Holders of rec. June 1 Succeeded by the Citizens National Bank in Ennis, Lone Star Gas Corp. common (quar.)..... floc June 30 Holders of rec. June 15 Charter No, 13667. 5% preferred (guar.) $134 June 30 Holders of rec. June 15 May 16—The First National Bank of Burkburnett. Tex Long Island Ltg. Co.7% pf. A (qu.)._ 134% July 1 Holders of rec. June 16 Effective April 25 1933. Liquidating agent, I. E. 100,000 6% preferred B (guar.) 134% July I Holders of rec. June 16 Harwell, Burkburnett, Tex. Memphis Pow.& Lt. Co.,$7 pf.(qu.)_ $134 July I Holders of rec. June 17 Succeeded by First National Bank in Burkburnett,Tex., $6 preferred (quar.) $1% July 1 Holders Charter No, 13668. of rec. June 17 Missouri Utilities Co.,7% pf.(qu.) 134% 1 Holders of rec. May 22 Nassau & Suffolk Ltg. Co.,7% Id.(CPO - 134% June July 1 Holders of rec. June 16 National Transit Co.(quar.) 350. June 15 Holders of rec. May 31 Auction Sales.—Among other securities, the following, Newark Telep. Co.(Ohio)6% pref.(au.) 134% July 10 Holders of rec. June 30 Quarterly not actually dealt in at the Stock Exchange, were sold at auction $1 June 10 Holders of rec. May 31 New Eng. Gas dr El. Assoc. 8534 pf.(qu.) $1% July 1 Holders of rec. May in New York, Boston, Philadelphia and Buffalo on Wed- New York Pow.& Lt., 7% prof.(quar.)% July 1, Holders of rec. June 31 15 New York Steam Corp.,$7 pref.(guar.)- 21% July nesday of this week: 1 Holders of roe. June 15 $6 preferred (guar) $134 July 1 Holders of rec. June 15 By Adrian H..Muller & Son, New York: New York Telep. Co.. pref. (quar.) $134 Shares. Stocks. Niagara Hudson Pow. Corp. com. div. o milted. July 15 Holders of rec. June 20 $ per a. 20 VanCamp Milk, 7% cum. pref., par 8100 Nor. States Pow. Co.(Del.) 7% pt.(qu.) 114% July 8% 20 Holders of rec. June 30 50 Central National Corp.,"B," no par 6% preferred (guar.) 1 134% July 20 Holders of rec. June 699 Central National Corp.,"A," no par Ohio Edison Co..$5 pref.(guar.) 18 $134 July 1 Holders of rec. June 30 375 Sadonia Mills, Inc., preferred "A," par $100 15 $6 preferred (quar,) $38 lot 81% July 1 Holders of rec. 250 Commerce Building Cory.. par $100 15 $6.60 preferred (guar.) S8 lot $1.65 July 1 Holders of rec. June 75 Llro Realty Corp., par 5100 June 15 $7 preferred (quar.) $5 lot $IM July 1 Holders of roe. June 15 5 Skinner Automotive Device Co., Inc., par $100 $7.20 preferred (guar.) 7 $1.80 July 1 Holders of rec. June 1.133 Kildun Mining Corp.(Del.), par $1 15 Oregon-Washington Water Service Co. 1.56 A cert. of indebted. of 21 West Street Corp.,in the face amount $6 preferred (guar.) of $12,500 -8130 lot $134 June All of the right, title and Int. of Commercial Investwent Trust, Holders of rec. May 22 Penn. Wat. Inc., dr Pow. in and to Co.,Com.(quar.)750. July 1,333 1-3 shares of Internat. Germanic Trust Co. stock represent Holders of rec. June 15 Preferred (guar.) ed by ctfs. $IM July Nos. C321 to C333, incl., for 100 shs. each, and 0-3273 Holders of rec. June 15 Phila. Elec. Pow, Co.,8% Pt 50e. July (guar.).— scrip for one-third share represented by certificate No. 23 for 33 shs.; also Holders of rec. June 10 Philo Germant'n & Norrist'n RR.(qu.). 8134 June 810 lot Holders of rec. May 20 Public Elec. Lt. Co.,6% pref. By R. L. Day & Co., Boston: 134% June (qUar.) Holders of rec. May 24 Public Service Co. of Oklahoma, Shares. Stocks. 7% prior lien stock (guar.) $ Per 511. 134% July 5 Brookside Mills, par $100 Holders of rec. June 20 6% prior lien stock (guar.) 1414 114% July 18 American Mfg. Co., common, par $100 Holders of rec. June 20 Queensborough Gas & El.6% pf. (q11.) 13( 114% July 16 American Mfg. Co., preferred. par $100 Holders of rec. June 16 South Carolina l'ow. Co.$6 pf.(quar.).. $114 July 44 5 Nashua & Lowell Road, par $100 Holders of rec. June 15 asx Southern Col. Pow. Co.7% pt.(quar.).. 1% June 1 Holders 15 Batchelder Snyder Dorr & Doe Co.. pref., par $100 of rec. May 31 Southwes tern Gas & Electric Co., 16 10 Gmton dr Knight Mfg. Co., common, par $100 7% preferred (quar.) 114 134% July 5 Groton dr Knight Mfg. Co., preferred. par $100 Holders of rec. June 15 8% preferred 14 (guar.) 2% July 10 Plymouth Cordage Co., par $100 Holders of rec. June 15 Tri-State Tel. dr Tel. Co.,6% prof 55 15c. June 10 Life Extension Institute 7% preferred, par $100 Holders of roe. May 15 United Gas Corp.,$7 cum. p1. My.action not tak en. 25 1 Collateral Loan Co.. par United Gas & Elec. Corp., pref. (quar.)- 134% July 85 50 Wickwire Spencer Steel Co., corn.: 10 Rockland dr Rockport Lime Holders of rec. June 16 Wisconsin-Michigan Pow.,6% pf. Co., let (qu.) 114% June 1 Holders of rec. May 31 pref., par $100; 2 Rockland & Rockport Lime Co., par $10; $2,261.97 Iowa Loan & Trust deb, bonds, etre. dep.; $404.38 corn., Iowa Loan & Trust deb. Banks and Trust Companies. bonds, ctfs. deposit Public National Bank & Trust Co.(au.). 3734c July 1 $6 lot 13 Kidder Peabody Acceptance Corp., 2d pref.; 4 Kidder Holders of rec. June 20 Participations corn. No .2 Fire Insurance Companies. 87 lot_ 5 Tr -Utilities Corp.,$3 pref.; 10 Peoples Light dr Power,6% Halifax pre' Fire Ins. Co., lot 45e July 3 Holders of rec. cap.stk. (s-a> -. $1 First mtge. note for 320,000 dated Jan. 14 1928, Peabody, June 10 Mass., assigned to Warren National Bank, Peabody, Mass Miscellaneous. $500 lot Second mtge. deed and note dated Oct. 4 1928, maturing Abbott Oct. 4 1932 in amount Laboratories (guar.) 500 July 1 Holders of rec. of $5,600, covering property located at 26 and 28 Adams, Abraham & Straus, Inc., corn.(guar.) Waltham, Mass; 300 June 30 Holders of rec. June 15 Second mtge. note dated July 28 1928 maturing July — 21 Acadia Sugar Refining 6% pref. 23 1931 in amount of (quar.). 12.30 June 1 Holders of rec. June $1,500 on property 157 Lowell St.. Waltham, Mass May 20 Allied Newspaper, Ltd.— $50 lot Amer. dep. recta. ord. reg By Barnes & Lofland, Philadelphia: cm 4% June 7 Holders of rec. May Ordinary register cw 4% May 31 Holders of rec. May 22 Shares. Stocks. American Can Co. pref. (quar.) 8 per Sh. 134% July 1 Holders of rec. June 17 12 Philadelphia National Bank, par $20 16a American Bank Note Co. pref. (quar.) 49M 750 July 1 Holders of rec. 15 Central-Penn National Bank, par 810 June 12 American Home Products(monthly)21% _ 250 July 1 Holders of rec. June 14 20 Chase National Bank, New York, par $20 American Invest. Co.01 111. cl. B (qu.) 27 June 7 1 Sic Holders of rec. May 20 30 Real Estate-Land Title & Trust Co., par 810 American Safety Razor Corp.(guar.)--7% 31 Integrity Trust Co., par $10 75c June 30 Holders of roe. June 9 Associates Invest. Co., prof. 73i --- - $134 June 30 Holders of rec. June 20 10 Penna. Co.for Insur. on Lives & Granting Annuities, par $10 Automatic Signal Acceptance(quer.) 26 600 June (bi 1 Holders of rec. mo.) 263 Southern N. J. Title Sr Mtge. Guar. Co., el. "A"; 263 class Babcock St Wilcox Co B $89210 July 1 Holders of rec. May 15 20 units South. New Engl. Ice Co.(unit consists of 1 sh 20 Baldwin Co. class A pref.(guar.) $134 June 15 Holders of rec. June 10 Leeds & Lippincott Co.,6%, preferred series "B" of pref. kr lash. ot corn.) 10 Balfour Building, Inc., vot. tr. Otis 50C May 31 Holders of ree. May 31 10 Leeds & Lippincott Co., 7% preferred, series"A" Bancshares, Ltd., 6% cum.part.sha.(qu) 513 June 1 Holders of rec. May 15 83.g 50 Erie Lighting Co., preference, no par Bigelow Co..6% pref.(s-a) 75 $3 June 1 Holders of roe. May 27 Bondo— 1 Black Clawson, pref.(guar.) Per Cent. 8114 June 1 Holders of rec. June 848 Louis Bergdall Brewing Co May 25 Boot's Pure Drug— $56,858.26 lot Am. dep. nets. ord. reg. (extra) By A. J. Wright & Co., Buffalo: to is. June 16 Holders of rec. May 24 Boston Woven Hose & Rubber Co. corn. —Div.a tion no I Shares. Stocks. taken. Preferred $3 June 15 Holders of roe. June 5 per Bk. 10 International Rustless Iron 1 Brennan Packing, 8% cl. A.(guar.) $1 June 1 300 20 Zenda Gold Mines Briggs & Stratton Corp.(quar.) 250 June 30 Holders of rec. 31e Brillo Mfg. Co., Inc., common (guar.).15c July 1 Holders of rec. June 20 Class A (quar.) 500 July 1 Holders of rec. June 15 DIVIDENDS. June 15 British American Tobacco Co., Ltd.— Ordinary stock (Interim) 10d. June 30 Holders of rec. Dividends me grouped in two separate tables. In the Durmah June 3 011 Co., Ltd.— first we bring together all the dividends announced Amer. dep. rots. ord. reg ne15% June 16 Holders of California Ink Co., Inc.(quar.) current week. Then we follow with a second table the 50c July 1 Holders of rec. May 15 rec. June 21 in Canada Permanen t Mtge. 8234 July 3 Holders of rec. (quar.) which we show the dividends previously announced, June 15 Canadian Foreign Investme nt Corp.— but which have not yet been paid. $4 Preferred (s.-a.) June 15 Holders of rec. June 84 1 Carreras, Ltd., cl. A 44 15% B (interim) The dividenas announced this week are: Chesapeake Corp., corn.(guar.) 500 July 1 Holders of rec. June 8 Christiana Securities 7% prof.(quar.) % July 1 Holders of roe. June 20 City & Suburban Homes(s-a) June 5 Per When Books Closed Citizens Wholesale Supply 7% pf. (qu.). 87340 July 1 Holders of rec. June 1 Name of Company. Holders of rec. June 29 Cent. Payable. Days Inclusive. 6% preferred (guar.) 750 July 1 Holders of rec. Clark Equipment 7% pref. (quar.) % June 15 Holders of roe. June 29 Railroads (Steam). may 31 Clorox Chemical Co. (quar.) Carolina Clinchfield & Ohio (guar.) 50c July 1 S1 July 10 Holders of roe. June 30 Commercial Credit Co.,634% Pt. (Q11)- 134% June 30 Holders of rec. June 20 .Guaranteed certificates Holders of recs. June 10 SIM July 10 Holders of rec. June 30 7% 1st preferred (quar.) Chesapeake dr Ohio (guar.)(qW.) 43%0 June 30 Holders 62140 July 1 Holders of rec. June 8 of rec. June 10 8% preferred B (guar.) Dayton & Michigan 8% pref. (quar.)500 June 30 Holders of rec. July 5 Holders of rec. June 16 $1 June 10 Commercial Solvents Corp. corn. (5.-a.)Chestnut Hill (guar.) 300 June 30 Holders of rec. June 2 750 June 5 Holders of rec. May 20 Commonw ealth Grand Rapids & Indianapolis (5.-a.)Loan June 134% pf. (qu.). Co., 7% 1 $2 Holders of rec. May 20 June 20 Holders of rec. June 10 Communi ty State Illinois Central 4% leased line 15c Corp.. $5 cl. A June 30 $2 July 1 Holders of rec. June 12 Compagnie Gen, D'Elect., A bearer shs. 36.84 Dr May 31 Holders of rec. June 15 Little Miami original guaranteed $1.10 June 10 Holders of rec. May 26 Amer. de. rec. for A bearer shs Special guaranteed (guar.) 36.84 pr May 31 Holders of rec. May 29 JIM) 10 50e Holders of rec. May 26 Compo Shoe Louisville Rend.& St. L.5% p1.(s-a)_ 12340 June 1 Holders of rec. May 20 Machine(Qum.) 214% Aug. 15 Holders of rec. Aug. 1 Congoleum-Nairn, Inc., corn. (guar.) Common (s-a) 150 June 15 Holders of rec. June 1 Aug. 15 Holders of rec. Aug. 1 $4 Creameries of America $314 pref. A(qu.) 87140 June 1 Holders Norwich & Worcester, 8% pref. (quer.). 2% July 1 Holders of rec. June 15 of rec. May 10 Crowell Publishing (quar.) Rensselaer dr Saratoga, corn.(s-a) 250 June 24 Holders of rec. June 14 July 1 $4 Crown Willamette Pa. Co., let pf.((PO /al July I Holders of rec. June 13 Devoe & Reynolds Co., Inc.Public Utilities. 1st and 2d pref. (guar.) Alabama Power Co.,$7 pref.(quar.)_ _ $134 July 1 Holders of rec. June 20 um July 1 Holders of rec. June 15 Dominguez 011 Fields (monthly) 150 June 1 Holders of rec. May 24 $6 preferred (guar.) July 1 Holders of tee. June 15 $134 Dominion Glass Co.,corn.(qlian) $5 preferred (guar.) ir$13( July 3 Holders of rec. June 15 $134' Aug. I Holders of rec. July 15 Preferred (guar.) all American Telep. & Teleg. Co.(quar.)_ St July 8 Holders of rec. June 15 8234 July 15 Holders of roe. June 20 Dominion Stores, Ltd., common (quar.) 30c July 1 Holders of rec. June 16 Attleboro G148 Light Co.(gum.) ;3 July 1 Holders of rec. June 15 Draper Corp. (guar.) 500 July 1 Holders of rec. May 27 Bell Tel. Co. of Pa., 634% pref. (quar.)_ 134% July 15 Holders of rec. June 20 Driver-Harris Co.,7% prof. $1,4 July Brit. Col. Pow., cl. A.(quar.) (guar.)-Holders of rec. June 20 tr.5013 July 15 Holders of roe. June 30 Dunlop Rub. Co.. Amer. dep. rec, for rflansetleut River Power 6% of. (qu.) 116% June 1 Holders of rec. May 15 ordinary reg 10.70 May 31 Holders of rec. may 3 Amount of bank notes afloat May 1 Legal Tender Notes— Amount on deposit to redeem National bank notes April 1 Net amount of bank notes redeemed in April Amount on deposit to redeem National bank notes May $982,031,393 Name of Company. Name of Company. 3673 Financial Chronicle Volume 136 When Per Cent. Payable. Books Closed Days Inclusive. Name of Company. When I Per Share. Payable. Books Closed Days Inclusive. Railroads (Steam)-(Concluded). July 1 Holders of rec. May 31 50c Miscellaneous (Concluded). Bangor & Aroostook, corn.(quan) June 1 $1 $134 July I Holders of rec. May 31 Duncan Mills common (quar.) Preferred June 30 Holders of rec. Slay 31 1,4% July 1 $235 7% preferred (quar.) Boston & Albany 20e June 1 Holders of rec. May 29 $2.125 July 1 Holders of rec. June 200 Durham Duplex Razor $4 prof Boston & Providence (guar.) May 26 holders of rec. May 25 $1 Oct. 1 Holders of rec. Sept. 200 $2.125 Eastern Equities Corp. (liquidating)...._ Quarterly. Se June 10 Holders of rec. May 23 July 1 Holders of rec. June 8 $3 Eastern Malleable Iron Co.(quar.) preferred (8.-a.) Ohio. & 10 Chesapeake June rec. of Holders 1 July 50c June 1 Holders of rec. Slay 16 Electric Storage Battery Co.(guar.).Cinc. New On.& Tex. Par. pref.(quar.) $154 June 1 Holders of ree. May 10 50c July 1 Holders of rec. June 10 87340 Preferred (quar.) (guar.).guar Cleveland & Pittsburgh, 15 June rec. of Holders 1 July 25c 50e June I Holders of rec. May 10 Equitable Office Bldg. Corp.(quar.) - Special guaranteed (quar.) P4% July 1 Holders of rec. June 15 7% preferred (quar.) 87540 Sept. 1 Holders or ree. Aug. 10 Guaranteed (quar.) June 26 ree. of Holders 30 June 8e Sept. 1 Holders or rec. Aug. 10 500 Equity Trust Shares registered Special guaranteed (guar.) 80 June 30 87350 Dec. 1 Holders tut rec. Nov. 10 Bearer Guaranteed (quar.) June 15 Holders of rec. June 5 Dee. 1 Holders of rec. Nov. 10 51 50e Ewa Plantation Co.(extra) (quar.) Special guaranteed June 2 July 1 Holders of rec. June 16 $1 First National Stores, Inc., corn.(qu.)_. 6233c July 1 Holders of rec. June 2 Delaware RR. Co. (s.-a.) 200 July 1 Holders of rec. 4o June 10 Holders of ree. May 31 87 (quar.) 8% preferred (quar.) guaranteed 7% Pittsburgh & Erie % July 1 Holders of ree. June 2 Sept. 10 Holders Of rec. Aug. 31 87350 7% let preferred (quar.) 7% guaranteed (guar.) 250 June 1 Holders of rec. May 20 87350 Dee. 10 Holders of rec. Nov. 30 Florence Stove Co. common (quar.)7% guaranteed (quar.) $131 June 1 Holders of rec. May 20 800 June 1 Holders of rec. May 31 Preferred (quar.) Guaranteed betterment (quar.) June 15 ree. of IIolders I July $135 800 Sept. 1 Holders of rec. Aug. 31 Florsheim Shoe Co. pref. (quar.) betterment (quar.) Guaranteed 30 June rec. of Holders 25 10c July 800 Dee. 1 Holders of rec. Nov. 30 General Electric Co.,corn.(quar.) Guaranteed betterment (quar.) 15c July 25 Holders of rec. June 30 July 15 Holders of rec. July 1 $234 Special (quar.) (quar.) June 140 Georgia RR.& Banking rec. of Holders 1 July $1% June 20 Holders of red. June 10 $2 General Mills, Inc , pref.(alum) Grand Rapids & Indiana (8.-a.) 250 July 1 Holders of rec. June 10 June 19 Holders of rec. June 13 $3 General Hy. Signal common (guar.). -a.) (s. Y.) (N. Greene 5135 Jury 1 llolders of rec. June 10 Preferred (quar.) & GulfOklahoma Kansas 15 May rec. of Holders 1 3% June 1 Holders of rec. May 20 Gerard Court, Inc., 57 pref. (guar.)---- 5151 June Series A6% cum.pref. (s.-a.) 25c June 30 Holders of rec. June 5 3% June 1 Holders of rec. May 20 Gillette Safety Razor Co., corn.(guar.)- Series B 6% non-cum. pref. (s.-a.)--- June 10 rec. of Holders I July $151 1% June 1 Holders of rec. May 20 $5 preferred (quar.) Series C 6% non-cum. pref.(s.-a.) July 1 Holders of rec. June 8 $134 July 1 Holders of rec. June 16 $1 tau.). Glidden Co. prior preference (quar.) gtd. 4% J. N. of RR. Lackawanna July 10 Holders of roe. July 3 $1% June 1 Holders of rec. May 20 313 (s-a) RR. Globe-D Publishers, pref. (quar.) Mill Creek & Mine Hill Nay.& 10 June rec. of Holders 1 July July 1 Holders of rec. June I $2 3751c Goldblatt Bros., Inc. (quar.) Mobile & Birmingham pref.(s.-a.) July 1 Holders of rec. June 9 $135 June 30 Holders of rec. June 17 Gold Dust Corp., pref. (quar.) 451% -a.) Essex (s. Morris & June 15 rec. of Holders 1 July July 1 Holders of rec. June 20 9334c 5131 Great Western Sugar Co. pref. gtd. (s.-a.)734% Decatur & Nashville 15 May rec. of Holders 9c May 30 July 1 Holders of rec. June 15 -Grouped Income Shares, series A N.Y.Lack. Sr West'n,5% gtd.(guar.).- $114 June 19 Holders of rec. May 31 154% July 1 Holders of rec. June 15 $2 (attar.). Ilammermill Paper Co. 6% pref. (qu.) Norfolk & Western common 20 June 15 rec. of Holders 1 July 25c 354 Aug. 1 Holders of rec. July Halold Co. common (quar.) North Carolliaa (s.-a.) June 1 Holders of rec. May 20 25e July 1 Holders of rec. June 15 $1 (quar.) Common (extra) gtd. 4% Jer. New of North. RR. 1 Holders of roe. Aug. 21 Sept. 134% July 1 Holders of rec. June 15 $1 7% preferred (quar.) 4% guaranteed (emu%) Dee. 1 Holders of rec. Nov. 20 750 July 1 Holders of rec. June 17 SI Hazel Atlas Glass Co.(quar.) 4% guaranteed (quar.) 25c July I Holders of rec. June 17 24% June I Holders of rec. May 1 Extra Ontario & Quebec debenture Cs.-a.) 22 May rec. of Holders 1 1 Holders of rec. May 1 25e June June $3 Heyden Chemical Corp. corn.(quar.) Semi-annual 20 $154 June 30 $151 July I Holders of rec. June Preferred (guar.) Phila. Bait. & Wash.(s.-a.) 1 Holders of rec. Sept. 15 Oct. 75e -a.)__.Hiram Walker-Gooderham & Worts,Ltd. (s. Pitts. Bess.& Lake Erie corn. t r 25c. June 15 Holders of rec. May 27 June 1 Holders of rec. May 15 SI% Quarterly 65 preferred (s -a.) July 1 Holders of rec. June 10 50c July 1 Holders of rec. June 1 (qu.) 151% & Humble Oil & Refining (quar.) Chicago Wayne Fort Pittsburgh May 31 June 10 151% July 4 Holders of rec. Imperial Tobacco Co. of Can. ord. shs... I r134% June 30 Holders of rec. June 8 7% preferred (quar.) 1 July 1 Holders of rec. $3 151 % Oct. 1 Holders of rec. Sept. 9 Ingersoll-Rand Co., pref. (0.-a.) Quarterly June 22 Sept. 9 rec. of of rec. Holders Holders 10 3 July Oct. 151% $134 Internat'l Business Mach. (quar.) 7% preferred (Qum.) r 28e. June 15 Holders of rec. May 31 151 % Jan.2'34 Holders of rec. Dee. 9 Internat. Petroleum Co., Ltd Quarterly Holders of rec. Dee. 9 July I Holders ot rec. June 15 Jan.4'34 $2 4% / 11 Intertype Corp. 1st pref. (s.-a.) 7% preferred (quar.) July 1 Holders of rec. June 15 $3 2d preferred (5.-a.) Pittsburgh Youngstown & Ashtabula20 750 July 15 holders of rec. June 30 151% June 1 Holders of rec. May 21 Jewel Tea Co.,corn.(quar.) 7% preferred (quar.) Aug. June 12 rec. of Holders 1 July k (quar.) 151% Sept. I Holders of ree. Nov.20 Kimberly-Clar Corp.6% pref. 7% preferred (quar.) 25 May reo. rec. of of Holders I Holders 1 Dee. June 134% 3% Krause Corp.,6% pref.(s-a) 7% preferred (attar.) June 14 June 8 Holders of rec. May 18 50e Lehigh Portland Cern. Co., pf.((War.)- - h87350 July 1 Holders of rec. May 25 Reading Co. preferred(guar.) June I Holders of rec. 50c July 13,Holders of rec. June 22 Lehrenkrauss Corp.,6% pref. (s.-a.) - $3 (quar.) preferred 2d 12 June ree. of Holders July 1'Holders of rec. June117 $134 July 1 50c Liggett d: Myers Tob. Co., pf. (quar.) Sussex (s-a) 1735c. June 19 !folders of rec. June 10 Lindsay Light Co., pref. (quar.) 354% July I Rys., pref. (final) Terman la 17 June rec. of Holders 1 July $234 Lord & Taylor, common (quar.) $154 July 1 Holders of rec. June Union Pacific common (quar.) July 10 Holders of rec. June 20 25e. July I Holders of rec. June 24 Loudon Packing, common (quar.) United N.J. RR.d Canal Co. (quar.).... $254 Oct. 10 Holders of rec. Sept. 20 750. July 1 Holders of rec. June 15 Mapes Consol. Mfg. Co.,(guar.) $254 Quarterly June 19 25e. July 1 Holders of rec. June 15 Extra $235 July I Holders of ree June 15 Valley RR.of New York (s-a) 12 Mathieson Alkali Works, corn.(qu.). 37340. July 1 Holders of rec. June $154 July 1 Holders of rec. Dec. 15 Seashore, corn. (s.-a.) & Jersey West 12 June ree. rec. of Holders of I Holders July 134 $114 $154 Jan Preferred (guar.) Common (3.-a.) Slay 15 30c. June 1 Holders of rec. May 25 Maid Agricultural Ltd., extra 1%% June 1 Holders of rec. Nov. 15 6% special guaranteed (s.-a.) 250. June 1 Holders of rec. May 26 May Hosiery Mills, $4 pref 154% Dec. I Holders of ree. -a.) (s. guaranteed special 6% 16 June rec. 15e. July 1 Holders of Mesta Machine Co., corn. (quar.) $135 July 1 Holders of rec. June 16 Preferred (guar.) Public Utilities. June 1 Holders of rec. Slay 20 Sc Meyer (II. II.) Pkg, Co.. 634% Pl. (au.) 154% June 1 Holders of rec. May 16 American Elect. Secur., pref 3140. July 1 Holders of rec. June 10 July 1 Holders of rec. June 9 Monsanto Chemical Works (quar.) Amer. Water Wks.& El. Co., pf. Mar.) $134 July 1 Holders of rec. June 10 Mt. Royal Apartments, Inc. $7 pf.(Qu•)- $134 June 1 Holders of rec. Slay115 p1. (qu.) 151% 7% Co., Elect. HydroBangor June 10 15 June Mutual Chem. Co. of Am.,6% pf.(au.)- 154% June 28 Holders of rec. 135% July 1 Holders of rec. 6% preferred (allan) 400. July 1 Holders of rec. June 15 National Breweries, Ltd., corn.(guar.).$IX June 1 Holders of rec. May 15 Baton Rouge Elect., $6 pref. (quar.) May 20 rec. of Holders 440, July 1 Holders of rec. June 15 1 June r Preferred (guar.) 1.565 Binghamton Gas Wks., 63-4% pf. (quar.) June 15 Holders of rec. June 1 National Distillers Prod., pref.(qu.)- - - 6235c. July 1 Holders of rec. June 10 Birmingham Water Works,6% Pr- (q11.) 134% $131 June 30 Holders of rec. June 16 National Lead Co., corn. (quar.) Blackstone Valley Gas & Electric Co.$135 Aug. 1 Holders of rec. July 21 3% June I Holders of rec. Slay 16 Preferred B (quar.) 6% preferred (s.-a) N. Y. Ship Bldg. Corp. Dart. eh. (qtr.)10e. July I Holders of rec. June 20 60c June 30 Holders of rec. June 16 Light Co.(quar.) Gas Bridgeport 20 June rec. of Holders 1 July 10e. $2 June 1 Holders of rec. May 12 Founders shares (quar.) Brooklyn Edison Co. (guar.) July 1 Holders of rec. June 15 , SI% $134 July 1 Holders of ree. June 20 Preferred (guar.) (qu') • Pf Tran Corp., Brooklyn & Queens July 1 Holders of rec. June 1 1'2% July 1 Holders of rec. June 5 North Amer. Co., corn,(quar.) $IX (quar.) Co. Gas 1 Union Brooklyn 5 June rec of 75c. July 1 Holders 131% June 15 Holders of ree. June 1 Preferred (quar.) Butler Water Co., 7% pref. (quar.) June 1 Holders of ree. May 75e. July 1 Holders of rec. June 20 1134% Pagellersey Tubes, Ltd., corn. (au.). (qu.).. pf. let Hydro-Elee.,6% Canadian 20 June rec. of Holders 1 July $131 Preferred (quar.) Canadian West. Nat. Gas Lt. Ilt.& Pow. 1%% June 1 Holders of rec. May 15 Peerless Woolen Mills, 834% pref.(s-a)- $1% June 1 Holders of rec. Slay 16 6% preferred (quar.) July 1 Holders of rec. Yule 24 30c June 30 Holders of rec. June 20 Perfection Stove Co.(quar.) 15 Carolina Tel. & Tel. Co.(guar.) (qu.) $254 $134 June 1 Holders of rec. Slay 30 Pioneer Gold Mines of Brit. Col., Ltd. Central Arkansas Public Sore.. pf. July 15 Holders of rec. June trl5e. July 3 Holders of rec. June 10 (guar.). 154% Quarterly pref. 7% 301 Sept. Central Kansas Power ree. of 10 June rec. Holders of Holders 15 1 July Oct. 15c. % 151 Pittsburgh Plate Glass Co.(quan) 7% preferred (quar.) June 1 Holders of rec. May 22 $3 134% 1-15-34 Holders of rec. Dec. 31 Pratt Food Co.(quar.) 7% preferred (guar.) July 15 Holders of rec. June 30 3c Aug. 1 Holders of rec. July 14 135% Quarterly Income Shares, Inc 6% preferred (quar.) 135% Oct. 15 Holders of rec. Sept. 30 37340. June 15 Holders of rec. May 31 Reeves (Daniel) Inc., corn. (quar.) 31 6% preferred (quar.) 194% June 15 Holders of rec. Slay 31 154% 1-15-34 Holders of ree. Dec. 635% preferred (guar.) 6% preferred (quar.) 18 May /42 50c May 31 Holders of rec. Apr. 20 Rockwood tit CO.,8% pref Pow.(quar.)._ & Light Mass. Central rec. of Mar. 31 Holders Rolls Royce Ltd., Am.dep. rec. ord. reg. .291e. May 26 alrrMississippi Valley Elec. Prop.- $135 June 1 Holders of rec. May 15 niterfe Cep 25e July 1 Holders of rec. June 5 Royal Baking Powder Co., coin.(quar.)_ 135% July 1 Holders of ree. June 15 6% preferred (guar.) Gas Co. of Indinapolls, 5% pf. 134% June 1 Holders of rec. May 20 Citizens 250, June 15 Holders of rec. June 1 Ruberold Co., capital stock (guar.) (quar.) Holders of rec. June 20 20e. June 15 Holders of rec. June 7 $335 July San Carlos Milling (monthly) fly.(Phila.. Pa.) Pass. Citizens 16 June rec. of 30 Holders 350. June Scott Paper Co., corn.(quar,) Cleveland Elec. Illuminating Co.June 1 Holders of rec. May 15 250 July I Holders of rec. June 15 134% Scovill Mfg. Co.(quar.) 6% preferred (altar.) 30e. June 10 Holders of rec. May 31 115% June 1 Holders of rec. Slay 25 Senior Securities (quar.) Coast Counties Gas & El.6% Pl.(au.) 3735c. Aug. 15 Holders of rec. Aug. 15 $151 June 1 Holders of rec. May 15 Sioux City Stkyds., $6 pf. (guar.) Commonwealth Utll. Corp. pt. C(qu.)._ $3 June 15 Holders of rec. June 5 3735e. Nov. 15 Holders of ree. Nov. 15 $6 preferred (quar.) Concord Gas Co.(s.-a.) July 1 Holders of rec. June 15 250. July 1 Holders of rec. June 5 (quar.)_ 75e Standard Brands, Inc., corn.(guar.).corn. Service, Elect Connecticut Holders of rec. May 15 June $1% July 1 Holders of rec. June 5 151% $7 preferred, series A (quar.) (Qu.). er, 535% orw) ua (gl' CooTiec%ticut Light & 9 June of rec. Holders 30 June 1 Holders of rec. May 15 $235 June 154% Stand. Oil Export Corp.,5% pt.(5.-a.) preferred 2% June 30 Holders of rec. May 31 June 1 Holders of rec. May 15 62340 Sylvanite Gold Mines, Ltd. (8.-a (quar.)._. corn. Co. Connecticut Power 5501 1% June 30 Holders of rec. May 31 90e July 1 Holders of rec. June 15 Bonus Consol. Gas of Baltimore corn.(quar.)„ 250. July 1 Holders of rec. June 2 5154 July 1 Holders of rec. June 15 Texas Corp.(quar.) Preferred A (quar.) 25e. June 20 Holders of rec. June 5 July 1 Holders of rec. June 15 $14 Todd Shipyards Corp. (quar.) Preferred D (quar.) $134 July 1 Holders of rec. June 15 Traders Building Assoc. Ltd.(quar.)---- $1% June 1 Holders of rec. May 25 Preferred E (quar.) % June 1 Holders of rec. May 15 June 15 Holders of rec. May 12 85e 1226 Sherman Ave., Inc.,7% pt. MO com.(au.) Y. N. of Co. Consolidated Gas July 15 Holders of rec. July 1 •Quaker Oats (quar.) .)t. & Pow. Co.of Balt. Et. L zgtiar Consol. Gas, $13,5 Aug. 1 Holders of rec. Aug. 31 90c July 1 Holders of ree. June 15 Preferred (quar.) Common 250. July 1 Holders of rec. June 2 134% July 1 Holders of rec. June 15 Union Carbide & Carbon Corp 5% preferred series A (quar.) 50. July 1 Holders of rec. June 15a 154% July 1 Holders of rec. June 15 U.S. Foil Co., cl. A de B corn.(quan)6% preferred series D (quar.) $1% July 1 Holders of rec. June 15a . June 15 rrreceeec.. 11 Holders 13-5% July 1 Preferred (quar,) (quar.) D series 1 5)4% preferred June U.S.& Foreign Secs. Corp., 1st pf.(qu.) h$134 June 10 Holders of rec. June 3 % 14 14 1 i Consumers Power Co..$5 Pref. (quar.). ! 15 July 1 Holders of rec. June 15 Juneu Upressit Metal Cap,8% pref.(quar.).- - 2% (quar.) preferred 6% 600. June 30 Holders of rec. June 20 1 Holders ot rec.June July 1.65% Walalua Agricultural Co 6.6% preferred (quar.) 16 May of rec. 31 Holders May 15 $134 J June of rec. I Holders July % Welch Grape Juice Co., pref. 7% preferred (quar.) 500 June 1 Holders of rec. May 15 Western Dairy Prodcs., Inc. el A div. om Med. 6% preferred (monthly) of rec. June 20 1 Holders July 15 June 131% rec. of I Holders (qu.)_ July pref. & 500 Tablet 7% Western Stat., 6% preferred (monthly) 30e July I Holders of rec. June 15 550 June I Holders of rec. May 15 Westmoreland, Inc.(quar.) 6.6% preferred (monthly) 62,350 June 30 Holders of rec. June 20 June 15 ree. 1 of July Holders 550 Wilcox Rich Corp., el. A.(quar.) 8.8% Preferred (monthly) 1%% June 1 50c June 1 Holders of rec. May 20 World Radio Corp.,6% pref. (quar.)Dayton Pow.& Light6% pref.(mthly.)_ 15e. July 1 Holders of rec. June 10 June 1 Holdersof rec. May 25 Yale & Towne Mfg. Co.(quar.) Detroit City Gas,6% pref. (guar.) 15 Holders of rec. June 15 354% 1 (quar.) Duquesne Light Co.5% 1st pref. Below wo give the dividends announced in previous weeks East St. (g &rInterurban Water, 7% uLsua 1 Holders of rec. May 20 June 134% aninclude dividends Ifl and not yet paid. This list does not 135% June 1 Holders of rec. Slay 20 6% Preferred Mari 1 Holders of rec. May 10 $151 June (qu.) Pt. nounced this week, these being given in the preceding table. $635 Serv.. Shore Pub. Eastern $1 54 June 1 Holders of rec. Slay 10 $6 preferred (quar.) July 15 Holders of rec. June 30 (qu.)._ A 131% pref. 7% Elec. (Del.), El Books Paso Closed When Per $135 July 15 Holders of rec. June 30 Days hulustre. $6 preferred B (quar.) Share. Payable, rec. June 30 Name of Company. El Paso Elec. (Texas). 6% Prof• WILL- 135% July 1 Holders of $154 Aug. I Holders of rec. July 8 pref. (Q11.) $6 Co. Share & Electric Bond of rec. July 8 Railroads (Steam). Holders 1 $151 Aug. $5 preferred (guar.) 5435 July 1 Holders of rec. June 15 June 1 Holders of rec. May 20 Albany & Susquehanna (s-a) Empire & Bay State Teleg 4% std. (au.) $1 $435 Jan. 1 Holders of rec. Dec. 15 (semi-annual) Sept. 1 Holders of ree. Aug. 21 $1 4% guaranteed (quan) July 1 Holders of ree. June 12 $235 (s-a) pref. Coast, & Birm. Dee. 1 Holders of ree. Nov. 20 $1 Atlanta 4% guaranteed (titian) Sept. 1 Holders of rec. Aug. 20 $414 Atlanta & Charlotte Air Line (s-a) 3674 Financial Chronicle Per When Share. Payable. May 27 1933 Books Closed Name of Company. Per Days Inclusive. Wks% Books Closed Name of Company. Mere. Payable. Public Utilities (Continual). Days Inclusive. Elizabeth & Trenton RR.(s.-a.) Public Utilities (Concluded). Oct. 1 Holders of reo. Sept.20 5% preferred (s.-a.) Tennessee Elec. Pow. Co..5% pf. (qu.) 1 % July 1 Holders of reo. June Oct. 1 Holders of rec. Sept.20 Empire Gas & Elec.,6% pt. (quar. 15 8% preferred (qual.) A. ) 134% July 1 Holders of reo. June 15 114% June 1 Holders of rec. Apr. 28 7% Preferred (quar.) 7% preferred (guar.) 134% July 1 Holders of MO. June 15 % June 1 Holders of rec. Apr. 28 8% preferred C(guar.) 7.2% preferred (guar.) June $1.80 1)4% 1 Holders of ree. Apr. 28 July I Holders of reo. June 15 Escanaba Pow.& Trao.8% 6% preferred (monthly) pref. OR.)-.. 131% Aug. 1 Holders of ree. bOo June 1 Holders of reo. May 16 21 6% preferred (monthly) 8% Preferred (guar.) 134% Nov. 1 Holders of reo. JullY 500 July 1 Holders of reo. June 15 Oct. 27 7.2% preferred (monthly) 8% Preferred (guar.) 1300 134% 2-1-'$4 Holders of rec. Jan. 27 June 1 Holders of rect. May 15 Essex & Hudson Gas Co.(s.-a.) 7.2 preferred (monthly) doe July 1 Holder tot June I Holders of ree. May 20 United Federal U.& Trail., pref. s of reo. June 15 Corp. common (quar.) (Uttar.) $134 June 1 Holders of rec. May 100 July 1 Holders of rec. May 29 Florida Pow. Corp., 7% 15a Prefer red (quar. ) pref. A (guar.)- 134% June 1 Holders of rec. May 15 75e July I Holders of rec. May 29 7% preferred (guar.) United Gas Impt. Co.common (quar.)-8730 June I Holders of rec. May 15 300 June so Holder of rec. May 31 Frankford & Southwark,Phila. $5 preferred (quar.) City um June 30 Holderss of Passenger By rec. May 31 United Light & Railways (Del.) $434 July I Holders of rec. June 1 Georgia Power Co.$6 prof. 6.36% preferred (monthly) $1)4 July I Holders of rec. June 15 (1lutr-) July I Holders of rec. June 15 $5 preferred (quar.) Utility Equities Corp. $534 priority stk_ 53e $14 June I Holders of rec. May 15 July 1 Holders of rec. June 15 Germantown Passenger By.,(qu.) Virginia El. & Pr. Co., $6 prof .... $1.31 July I Holders of rec. June 15 (quar.)-- $134 June 20 Holders of ree. May 31 Green & Coats St., Phila. Virginia Pub. Serv.,7% pref. Pass.By.(qu.) $14 July 1 Holders of rec. June (quer.). % July 1 Holders of rec. June 10 Gulf States Utilities Co..$6 22 6% preferred (quar.) pref. (Qui $lX June 15 Holders of rec. June 1 134% July 1 Holders of rec. June 10 $5X preferred (quar.) Washington By. Sc Elect. Co.(guar. $14 ) June — $134 June 1 Holders of rec. May 15 Holder s reo. of June 1 Hackensack Water Co.(s-a) Preferred (guar.) 750 $134 June I Holders of rec. May 18 June 1 Holders of rec. May 16 Hudson County Gas Co. Washington Water Power $8 met. 18 24 (au.). $1)4 June 15 Holders of rec. May June I Holders of rec. May 20 Hungtington Water. 7% (5.-a.) Wheeli ng Elect. Co. 6% pref. (guar.).- 1 134% June 1 Holders of rec. May 29 )4% June 1 Holders of rec. May 25 6% preferred (guar.) pref. (quar.) Willia msport Water ' Co. $6 prof. (qu.) IX % June I Holders of rec. May 29 . $1)4 June 1 Holders of rec. May 9 Indianapolis Water Co.,5% pref. A 20 Industrial & Power Securities (quar.(qu.) 134% July 1 Holders of rec. June 10a Fire Insurance Companies. 15e )June Holder 1 s of rec. May 1 Kansas City Pow & Lt., pr. D., Agricul tural Ins. (Wate rtown (quar.)... 50e July 1 Holders of Key West Electric, 7% preferr(quar.). $134 July 1 Holders of rec. June 14 Glen Falls Ins. Co.(quar.) ) June 24 ed 400 July 1 Holders of rec. June 1 Holders of rec. May 15 Laclede Gas Light Co.common (guar. rec. June North River Ins. Co. (quay.) ).- $134 June 15 Holders of rec. June 1 15e June 10 Holders of ree. June 15 I 5% Preferred (s.-a.) $2)4 June 16 Holders of rec. June 1 Lake Superior Dist.Pow.,6% Miscellaneous. pt.(quar.) '34% June 1 Holders of rec. May 15 Abbotts Dairies, Inc., cons.(guar.) 7% preferred (quar.) 250 June 1 Holders of rec. May 15 % June I Holders of rec. May 15 Lehigh Power Securities, corn.(quar. 1st Sc Zsi preferred (quar. ). 250 $134 June I Holders of rec. May June 1 Holders of rec. May 10 Lexington Water Co.. 7% Affiliated Products (month) 15 10o June 1 Holders of rec. Pref. (quar.). 13.1% June I Holder of rec. May 20 Louisville G.dr E.(Del.) Agnew Surpass Shoe Sts.,Ltly) , A&B cm.(qu.) 4340 Julie 24 Holderss of d.,pref .(qu.) 134% July 3 Holders of rec. May 18 rec. May 31 Marconi Wirel. Tel. Co.,Ltd.ordibe Allegheny Steel Co., pref.(guar. June 15 arer. 2% ) June Kay 1 5154 26 Holder of s Holder rec. May 16 s of reo. May 15 Aluminum Mfg.,Inc.,corn.(guar. Amer. deposit rec., ordinary beare 500 ) r_ June 30 Holders of rec. June 15 2% June 3 Holders of rec. May 24 Ordinary reg Common (qual.) 500 2% May 26 Holders of rec. May 16 Sept.30 Holders of rec. Sept.15 Amer. deposit rec. ord. reg Common (qual.) 500 Dee. 2% June 31 Holder 3 s of rec. May 24 Holder of reo. Dee. 15 Memphis Nat. Gas Co.,$7 pref. Preferred (guar.) UM June 30 Holderss of (qual.)- $14 July 1 Holders of reo. June 20 Middlesex Water (quar.) rec. June 15 Preferred (guar.) $IM Sept.30 Holder 750 June 1 Holders of rec. May 25 s of rec. Sept. 15 Milwaukee El. By.& Lt.6% pf. Preferred (quar.) Dec. $134 (qu.)% June 1 Holders of rec. May 15 31 Holders of rec. Dee. 15 Milwaukee Gas Lt. Co..7% pl.(quar. American Arch Co. common (guar 25e June 1 Holders of ree. May 134% JUDO 1 Holders of rec. May 25 .).— Minneapolis Gas Lt.,7% pref.(quer. ) American Business Shares,Inc.(quar 20 .). 20 June 1 Holders of roe. ).% June 1 Holders of rec. May 20 8% preferred (quar.) American Chicle Co.(guar. May 15 500 July 1 Holders or reo. June '34% June 1 Holders of rec May 20 ) Mississippi Vail. Pub. Serv., Extra 12 pf.(qu. 250 14 7% ) % July June 1 Holder 1 s rec. of May Holder 22 6% preferred B (quar.) s of American Cigar Co.,corn.(quar. June 12 $2 June 15 Holder of rec. ) '34% July 1 Holders of reo. June 21 Monongahela West Penn Public rec. June 2 Preferred (quar.) $14 July 1 Holderss of Service, rec. June 15 7% cum. preferred (quar. American Dock Co.8% pref.(quar.)_.. 2% ) June % 1 July Holder 1 of s Holders of rec. May 20 rec. June 15 Muncie Water Works Co.,8% American Envelope Co.7% p1.(quar. pref.(qu.) ).. $134 June 1 Holders of rec. May 2% June 15 Holders of rec. June 1 NationalPower & Light Co. 7% preferred (guar.) 25 corn.(qua?.) 134% Sept. 1 Holders of rec. 250 June 1 Holders of rec. May 10 Nebraska Power Co. 7% pref. Aug. 25 Preferred (quiz.) 7% Dec. 134% (quar. 14% ) 1 June 1 Holders of rec. May 16 Holders of reo. Nov.25 6% Preferred Americ an Factor Ltd. s, (month ly) 100 % June 1 Holders of rec. May 16 June 10 Holders of rec. May 81 New Castle Water Co.,6% American & General Securities Corp.— pref.(quar.) % June 1 Holders of rec. May 20 New. England Tel. & Class A common (quar.) Co 7X e June 1 Holders $1.34 June 30 Holders of rec. June 10 • New Rochelle Water Tel. ree. May 18 13 preferr ed (quar.) Co.. 75e June I Holders of % June I Holders of reo. May 20 New York Pow. & Lt $6 7% pf. (qu.). of rec. May 18 American Hardware (guar.) 25e July 1 Holders of Quarterly ree. 7% preferred (quar.) Pref. (quar.)-- $14 July I Holders of rec. June 15 June 17 250 Oct. I Holders of reo. Sept. 134% July 1 Holders of rec. June 15 N. Y.& Queens Elec. Lt.& Pow. Quarterly 16 250 1-1-34 Holders of reo. D60. 16 June 14 Holders of reo. June 2 (guar.) $2 • • Preferred(guar.) American Hawaiian Steamship (quar.) $134 25e July June -1 Fielders of rec. June 15 1 Holders of ree. May 19 New York Steam Corp.,common (qu.) Americ an Horne Prods. Co.(monthly)-- 250 55e June 1 Holders of rec. May 15 June 1 Holders of rec. May 150 . New York Transportation Co.(quar. American Laundry Mach. Co. 50e June 28 Holders of rec. June 15 10e June 1 Holders of )-. North Amer. Edison Co., pref.(quar.s rec. May 20 American Paper Goods. 7%Pro(qual. ) $13.4 June 1 Holders of rec. May 15 f. (qu.). 134% June 15 . Northwestern Public Service Co. Americ an Radiator Sc Standard Sanitary 7% preferred (aunt.) Corp., preferred (guar.) 134% $134 June June Holder 1 s of reo. May 20 Holders of reo. May 15 8% preferred (quar.) American Steel Foundries, prof 134% June I Holders of reo. May 20 500 June 80 Holders of Nova Scotia Lt. Sc Pow. Co., Ltd.— reo. June 15 American Stores Co.(plias%) 500 July Holders of ree. June 15 Preferred (quar.) Americ an Sugar Refini ng $134 com.(q Co., 50e June u.) July I Holders of rec. May 17 Holders of ree. June 5 Ohio Power Co.,6% pref.(quar.) Prefer red 134% (quar.) $14 July Holden; of ree. June 5 • Ohio Power Service Co.,7% pf.(mthly 58 1-30 June 1 Holders of rec. May 9 American Thread Co.. pref. (5.-a.) June I Holders of rec. May 15 ) July Holders of rec. May 31 • 6% preferred (monthly) Amer. Tobacco Co. com. Sc eons. B(qu.) 12%0 50e June 1 Holders of rec. May 15 $134 June Holder 5% preferred (monthly) s of rec. May 10 Amosk eag Co.. common OHO 41 2-3o June 1 Holders of ree. May 15 $I July Oklahoma Gas & Elect. Co..6% Holders of ree. Juno 24 Preferred (s-a) pf.(qu.) 134% Juno 15 Holders of rec. May 31 $24 July 7% preferred (guar.). Holder, of reo. Jun* 24 Archer -Danie ls-Midlan d common 134% June 15 Holders of rec. May 31 25e June Holders of rec. May 20 Paterson & Passaic Gas Sc El. (s.Armour Sc Co. of Del., pref. (quar. a.)-...... $234 June 1 Holders of rec. May 20 $IU July Holders of rec. June 10 Pawtucket Gas of N.J.,5% Artloom Corp., preferred (guar. ) DI (v-a)-55134 June 3234 June 1 Holders of rec. May 25 ) Holder s of Peninsular Telep. Co., (guar. Associ May 16 ates Investment CO., COM. 250 July 1 Holders of reo. June 15 ) June 3 Holders of rec. ) $1 7% preferred (quar.) ree. June 20 Atlantic Refining Co. corn.(quar.(guar. 134% Aug. 15 Holders of ree. 25e June 1 Holders of rec. ) 7% preferred (guar.) Aug. Atlas 5 May 22 Corp. $3 prefer ence A (quar.) 134% Noy. 15 Holders of rec. Nov. 5 75c June Holders of ree. May 20 7% preferred (guar.) Automotive Gear Works, pref. 2-15-34 Holders of reo. 2-5-34 (quar.)-- 41)(c June Holders of ree. May 20 Penn State Water Corp.. $7 pref.(qual. 134% Bamberger (L.) Sc Co.04% $IX prof. June June ) 134% I Holders of reo. May 20 Holders of reo. May 15 Pennsylvania Pwr.Co.. $6.60 pref. Bankers Investment Trust of Am.(qu.)15e June 3 Holders of (mo.) 550 June 1 Holders of rec. May 20 (s.-a.) $6 preferred (quarterly) reo. June 15 Barber(W.H.). Pref. $14 July 314 June 1 Holders of rec. May 20 (guar.) Holders of reo. June 28 Pennsylvania W.& Pow. Co., com. Prefer red (guar. ) 750 July 1 Holders of rec. June (au.) $134 Oct. Holders of roe. Sept.213 Preferred (guar.) Beech-Nut Packing Co.. corn. (quar. $14 July 1 Holders of rec. June 15 July 75c ) Holder s of reo. June 12 IS Peoples Telco. Corp.(Pa.), 7% preferred (guar-) $14 June 1 Holders of rec. May 31 1 X% June Holders of rel. May 20 Philadelphia Co.$6 prof. pref. (qu.) Belding-Corticeill, Ltd., 3134 July 1 Holders of ree. June pref.. (guar./ )- - - $134 June 1 Holders of rec. May 31 $5 preference Beneficial Loan Society (qual.(Qum. $134 July 1 Holders of rec. June 11 ) 80 June Holders of rec. Philadelphia Sub. Wat. Co.. Pref.(qu.) 134% June Block $134 June 3 Holders of rec. May 20 1 Holders of reo. May 12a Blue Bros. Tobacco,6% prof.(quar)Ponce Elect. Co.,7% pref. (guar. June Ridge Corp.opt.$3 cony. pt.(qu.)p 134% July 1 Holders of ree. June 15 June ) Holders of reo. May 20 Potomac Elect. Pow.Co.,6% Bon-A mi Co.. ClOS3 (guar. A pt. $1 ) (qu.) 134% July June 3 Holders of rec. July ba 1 Holders of ree. May 13 5X% preferred (quar.) Class B 15 (quar. ) 50e July 134% June 1 Holders of ree. May 13 Holders of roe. June le Public Elec. Lt. Co.,6% pref.(quar.) Borden Co., common (guar.) 400 June .. 134% June 1 Holders of rec. May 24 Holders of rec. May 15 Public Serv. of Colo.. 7% pref. Bernet , the., class A 261-30 250 Jan. 1 Holders of (mthly.) June 1 Holders of ree. May 15 . 5% preferred (monthly) Breton Wharf Co.(s-a) Jan. 12 41 2-3e June 1 Holders of reo. May 15 $134 June 3 Holders of rec. ree. June 1 Brach (E. J.) Sc Sons, common (qual.).. 6% Preferred (monthly) 100 June 500 June 1 Holders of ree. May 15 Holders of rec. May 13 Pub.Serv. Co.of N. H.,$6 British Contro lled Oilfiel ds, Ltd.,7% pt. 3% July pref.(qu.) 5134 June 15 Holders of rec. May 31 $5 preferred (quar.) British United Shoe Mach. Co., Ltd.— $IX June 15 Holders of rec. May 31 Public Service Corp. of N.J.corn. American dep. reo. ord. reg to7I4% June 70c June 30 Holders of rec. June 1 (qu.) Holders of ree. May 22 . 8% preferred (guar. Brown Shoe Co., common (quar. ) 2% June 30 Holders of rec. June 1 75o June Holders of ree. May 20 7% preferred (quar.) Buckeye Pipe Line Co.(quar.) ) % June 30 Holders of reo. June 1 750 June 1 Holders of ree. $5 preferred (quar.) Burger May 31 Bros.. 8% pref. $1 $14 June 30 Holders of rec. June I July (guar.) Holders of roc. June 15 Cumulative preferred (month 8% Preferred (guar.) $I Oct. 500 June 30 Holders of rec. June 1 ly) Holders of reo. Sept. 15 Burrou 6% preferred (monthly) ghs Adding Mach. 100 JUIN 50e (guar. May 31 Holders of rec. May I Holders of reo. May 5 Public Service El.& Gas Co. 7% Cables Sc Wireless,Ltd „preference) (qu.)-. 134% June 30 Holders of rec. June 1 % /one Holders of reo. May Calamba Sugar Estates, common (final) ZW2U $6 preferred (guar.) 8 40e July $14 June 30 Holders of rec. June 1 Holders of reo. June 15 Ridge A ve. Pass.By.Co.(quar.) Canad a Vinega rs, Ltd., corn. 400 June (guar.)--July Holders of tee. June 15 Holders of ree. May 15 Rochester a.& E. Corp.,7% pf.B (qu.) $3% June Canadian Canners, Ltd., 1st pf. $114 (guar. July Holder ). s of roe. Apr. Holder 27 6% preferred C (quar.) s of rec. June 15 Cony. preferrence 50 July 13.4% June Holders of rec. Apr. 27 Holders of reo. June IS (I% preferred 1)(quar.) Canadian Cottons, Ltd., pref.(quer.) 134% June Holders of rec. Apr. 27 -- $114 July Holders of reo. June 17 Savannah Elec.& Pr.,3% pref. Canadian Oil Co., Ltd.8% pref.(guar. 2% 2% July A (qu.)July Holder ) of s Holders of rec. June 20 rec. June 16 7 X% preferred B (guar. Canadian Silk Products A (guar. 134% July 3734c June Holders of rec. June 16 ) Holders of 7% preferred C (quar.) ) Cartier. Ina.,7% pref 8710. Jan. 8 Holders of reo. May 15 134% July Holders of ree. June 16 reo. Jan. 14 Case(J.I.) Co., pref.(guar. 634% preferred B (quar.) $1 July 134% July Holder s of rec. June 16 Holders Savannah Gas C'o.. 7% prof. reo. June 12 Centrifugal Pipe Line Corixc)eD JUL. 100. Aug. 1 Holders of (quar.) - - 4334 June Holders of rec. May 25 (a u.) of rec. Aug. 5 2d & 3d Sta. Pass. Ry.Co.. gtd. Capital stock (quer.) 10o. Nov. 1 (auar July $3 Holder s of Holders of rec. Nov. 0 rec. June 1 Shenango Valley Water Co.6% Century Ribbon Mills. prof.(quar.).. pf.(qu.) 14% June Holders of ree. May 20 Holders o, ere. May 20 - - S14 Juno 6% preferred (guar.) Champion Coated Paper Co. 134% S.pt. Holders of leo. Aug. 20 8% preferred (quar.) Preferr 7% ed ((Plan 134% July ) Dec. % Holder s of rec. Nov.20 Holders of rec. June 20 Somerset Union & Middlesex 7% special pref. % July $2 June Ltir• (5.-11.) Holders of rec. May 15 ) Holders of ree June 20 South Jersey Gas, El. & Trac. Chapman Knitting(guar. Mills,7% prof(s-a)•• 3 % July (s.-a.)-- - $4 June Holders of roe. May 20 Holders of reo. June 30 Southern California Edison Charte red Invest ors. Inc., Co., $5 (quar. pt. Ltd. )- $11.' June Holders of rec. May 7% preferred, series A Chesebrough Mfg. (quar.) 15.1% June 15 Holders of rec. May 20 $1 Juno 2 Holders of rec. June 1 5% preferred, series B (quar.) Extra 8 ) 500 June 2 Holders of ree. 134% June 15 Holders of reo. May 20 Southern California Gas (quar. June 8 Chicag o Corp., prefere Corp. nce (guar.) — 5250 June Holders of rec. May 15 e84 preferred (quar.) Chic.Dock Sc Canal Co. $lX 31 Holder May s of reo. Apr. 80 Susquehanna Utilities, 1st 814% preferred C ((Mar 134% June $13.4 June 1 Holders of reo. May 20 (guar.) Holders of reo. May 15 Syracuse Leg. Co.,Inc.,8%pref. Chicago June. By.Sc Un. • it. Yds•Ol $23( July u Holders of rec. June 15 % preferred (quar.) pref. (quar ) 2% Aug. 15 Holders of rec. July 31 6% preferred (quar. $114 July % Holder Aug. 15 ) ree. of s July 31 Holders of rec. June 15 8% preferred (quer.) Chicag o Yellow Cab Co. 25o June 134% Aug. 15 Holders of reo. July 81 ) Holders of rec. June 19 Tampa Gas Co..8% pref.(quar.) City Ice Sc Fuel Co.. pref.(guar. (guar. 2% May 31 Holders of rec. May 20 $1 3.' June Holders of rec. May 20 7% preferred (guarCollins Sc Altman Corp., 7% pf.) % May 31 Holders of rec. May 20 (guar.)- 134% June Holder Telephone Investment) s of rec. May 19 Colom ba Sugar Estates, corn. (qual.).. 400 (monthly) July June 1 Holders of ree. May 20 20e Holders of rec. June 15 Monthly 7% Preferred (quar.) 350 200 July July 1 Holders of rec. June 20 Holders of ree. June 15 Colt's Texas Utilities Co. (guar.) Patent Fire Arms Mfg. June 3 Holders of rec. June 10 (au.)-- 25e 134% June 1 Holders of rec. May 20 Columbia Pictures Corp. pref.Co. Tide Water Power $6 pref.(quar.) (qual.)... 750 June 750 June 1 Holders of reo. May 10 Holders of ree. May his Toledo Edison Co., 7% pref.(month Columbian Carbon Co.(quar.) June 50c ly)- 58 1-30 June I Holders of reo. May 15 Holders of rec. May 15 Colum 6% preferred (monthly) bus Auto Parts Co.. prof.(guar.). June 500 June 1 Holders of ree. May 15 50c Holder s of rec. May 20 Commer cial Investment Trust Corp.— 6% preferred (monthly) 41 2-3e June 1 Holders of rec. May 15 Common (quar.) Terre Haute Water Works Corp., 7% 500 July Holders of ree. June 5a I Cony. Prof. opt. ser. •preferred (gear.) nSIX July 134% June 1 Holders of rec. May 20 ) Holders of reo. June Sc Compressed Industrial(guar. Gases(quar.) 350 June 1 Holders of reo. may 31 Name of Company. 3675 Financial Chronicle Volume 136 When Per Cent. Payable Books Closed Days Inclusive. Norm of Company. Per When Mare. Payable, Book: Closed Days /sclurtoe. Miscellaneous (Corittnessll. Miscellaneous (Continued). $114 June 1 Holders of rec. May 17 Lord & Taylor Co, 1st pref.(guar.) $1 June 30 Holders of rec. June 25 Confederation Life Assoc. (guar.) $114 June 1 Holders of ree. May 6 Mfg. Associates (guar.) Ludlow 25 Sept. tee. of Holders 30 Sept. $1 Quarterly July 1 Holders of rec. June 21 $134 pref. Co.. (guar.) Lunkenheimer $1 Dec. 31 Holders of rec. Dec. 25 Quarterly $114 Oct. 2 Holders of reo. Sept.22 Preferred 15 (quar.) May rec. of Holders 1 June $11/ Congoleum Nairn. pref. (guar.) Aug. 15 Holders of reo. Aug. 5 131% (cluar.)--pref. 6% Co.. & (I.) Magnin lb May moo. of Consolidated Clear, 7% pref.(guar.). _ 114% June 1 Holders 134% Nov.15 Holders of reo. Nov. 5 6% preferred (guar.) Consolidated Diversified Standard SeJune 1 Holders of rec. May 25 Sc Ltd.(monthly) Agriculture. Maul 15 May moo. of Holders 15 June 250 curities, pref $151 June 1 Holders of rec. May 15 Manischewitz& Co., pref.(guar.) 25o Juno 1 Holders of rec. May 20 Como Mills Co. (guar.) June 1 Holders of rec. May 15 250 May Dept.Stores,corn.(guar.) July 1 $4 Cottrell(C.B.) dr Sons Co.(annual) June 1 25 Inc., May Mills, (guar.).pref. Hosiery 1 1)4% July 6% preferred (guar.) June 1 $1,‘ Mayer(0.)& Co., lot pref.(guar.) 114% Oct. 1 6% preferred (quar.) June 1 $2 2d preferred (guar.) 1-1-'34 1)4% 6% preferred (quar.) June 15 Holders of rec. June 1 500 Associates (guar.) Mayflower 31 May 68e June 15 Holders of reo. Crown Cork & Seal Co., Inc., pref.(W.) June 1 Holders of rec. May 30 43940 McClatchy Newspaper 7% prof. May 20 Crown Zellerbach Corp. A & B pf.(qu.)- 37340 June 1 Holders of ree. June 81% June 1 Holders of rec. May 22 (gu.)PL Mol.. dr Refg. Sugar McCohan 19 moo. of Holders 30 June $2 Crum & Forster. preferred (guar.) June 1 Holders of rec. May 15 fr15e (quar.).... corn. Oil, Frantenac McColl May 31 Holders of rec. May 20 Crum & Forster Ins.She., A & B (quar.)- 100 u25e June 1 Holders of rec. May 1 McIntyre Porcupine Mines, Ltd.((BO % May 31 Holders of rec. May 20 7% preferred (guar.) June 1 Holders of rec. May 1 u1214c Bonus 1 June rec. of Cuneo Press, Inc. 611% pre/. (guar.)- 144% June 15 Holders tr1214c) June 1 Holders of rec. May 1 Extra June 1 Holders of rec. May 15 50c Cushman's Sons. Inc.. corn.(guar.) 81140 June 1 Holders of rec. May 20 Metal Textile Corp., pref. (guar.) 15 May rec. of Holders 1 June 114% 7% preferred (guar.) Metro-Goldwyn Pictures Cori).June 1 Holders of rec. May 15 $2 $8 preferred (guar.) 47340 June 15 Holders of rec. May 26 7% preferred (guar.) Daniels & Fisher Stores,6)4% pt.(qu.).. 114% June 1 Holders of rec. May 20 $114 July 1 Monaghan (Victor) Co., pref.(guar.) 15 May rec. of Holders 1 June 5c Deere & Co. preferred (guar.) $114 June 15 Holders of res. May 31 pref. Ltd., (guar.) Cottons, Montreal 'rho July 1 Deposited Sank Shares, series B-1 760 June 15 Holders of rec. May 31 & Loan Montreal ((Mar.) Co. Mtge. 15 May rec. of Holders 1 July 6214% -a.). (s. A Y. N. Shares, Bank Deposited $114 July 1 Moore (Win.) Dry Goods Co.(guar.) 250 June 1 Holders of rec. May 15 Diamond Match Co.common (quar.)...... Oct. 1 $114 Quarterly June 1 Holders of rec. May 19 $2 Dictaphone Corp.(guar.) $134 1-1-'34 Quarterly 15c June 1 Holders of rec. May 15 Doctor Pepper Co.(guar.) 15 Holders of rec. May 27 June 50c (qu.) corn. Inc., Co., & (John, Morrell 250 July 20 Holders of rec. June 30 Dome Mines, Ltd. (guar.) % July 1 Morris 50.& 10o.to 31 Sta..7% Pf.(o1.) 250 July 20 Holders of rec. June 30 Extra 1 Oct. 154% 7% preferred (guar.) of 15 June rec. , 3 Holders Jul) $1 Dominion Textile Co., Ltd.. corn.(qu.) % 1-2-34 7% preferred (guar.) $114 July 15 Holders of rec. June 30 Preferred (guar.) $114 June 30 Holders of rec. June 20 (guar.) A corn. Co., Finance Morris 160 tee. May of Holders 1 June 75o Drug. Inc., capital stock (guar.) 2734e June 30 Holders of rec. June 20 Common B (guar.) Dunlop Rubber Co., Ltd. % June 30 Holders of rec. June 20 7% preferred (guar.) sty 4% May 31 Holders of rec. May 3 Amer. dep. rots. ord. stock May 31 Holders of rec. May 24 200 ((mar.) Corp. Finance Motor 25 May tee. of Holders June 15 500 E.I.duPont de Nemours & Co..com.(gu) June 1 Holders of rec. May 24 $.005 (guar.) Develop.. as Min. 011 Mt.Diablo $114 July 25 Holders of rec. July 10 Debenture stock (guar.) June 1 Holders of rec. May 20 40c (guar.) corn. Co., C.) (G. Murphy 29 Apr. ree. of Holders I June 50e Eastern Theatres, Ltd., COM.(quar.).... 25e June 15 Holders of rec. June 5 Muskogee Co. common (guar.) 750 July I Holders of roe. June 5 Eastman Kodak CO., COMmOn (quar.)... $134 June 1 Holders of rec. May 23 6% preferred (guar.) 8114 July 1 Holders of roe. June 5 Preferred (guar.) 700 July 15 Holders of rec. June 166 (quar.) common Co. Biscuit National 31 May moo. of Holders 15 3715c June El Do:ado 011 Works (guar.) $114 May 31 Holders of rec. May 156 Preferred (guar.) $3 June 1 Holders of moo. May 10 Essex Co.(5.-a.) 250 June 15 Holders of rec. May 31 Corp.(guar.).Share & Bond National (Cl. Co. Ready Ever Britain) Ltd.50e June 1 Holders of rec. May 15 National Container Corp., $2 pref.(qu.) zw25% June I Holden of roe. May 15 Ordinary registration (final) 150 July 1 Holders of rec. June 10 com.(qu) Am. of Corp. National Finance American dep. rec. ord. reg. (final).... rte25% June 8 Holders of moo. May 15 15e July 1 Holders of rec. June 10 (guar.) preferred 6% 15 June rec. of Holders 29 June 16c Fifth Ave. Bus Securities Corp.(quar.) 15c July 1 Holders of rec. June ID (extra) preferred 6% Holders of moo. May 15 17140 June Finance Service Co., Pref. (guar.) $114 June 15 Holders of rec. June 2 National Lead Co., pref. A (Qum.) Firestone Tiro & Rubber, pref.(guar.)-- $134 June 1 Holders of rec. May 15 June 15 Holders of rec. May 31 50o (guar.) Pipe Sewer National 20 May tee. of Holders Fitz Simons & Connell Dredge & Dk.(gu) 12)40 June July 1 Holders of rec. June 1 500 National Sugar Refining Co.of N. Holders of rec. May 17 3114 June Franklin Simon & Co., pref.(quar.).. $134 July 15 Holders of rec. July 1 A Prod.. (qu.) Grain pref. England New 15 May res. of Holders June 50c Freeport Texas Co.,corn.(guar.) July 1 Holders of rec. June 16 15c _ (guar.) corn. Co., (J. Newberry J.) $134 June 1 Holde-s of tee. June 5 Gamewell Co., preferred (guar.) Newberry (J. J.) & Co., 7% pref.(qU.). 191% June I Holders of rec. May 17 Holders of moo. May 15 $114 June Gates Rubber, pref. (guar.) Md.of Corp. Share Niagara June $154 Geist(C.H.)Co.,6% pref.(guar.) $134 July 1 Holders of roe. June 1$ Class A $6 preferred (quay.) $151 June 1 Holders of ree. May 22 General Cigar Co.. Inc., pref.(quar.) 8134 Oct. 1 Holders of too. Sept. 15 Class A $6 preferred (quar.) June 12 Holders of too. May 11 General Motors Corp., corn. (guar.)._ 250 $114