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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

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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

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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•

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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-

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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.




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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

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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.

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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