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1944
MAY y
>tt
It
Final
Edition
ESTABLISHED
OVER 100
In 2 Sections-Section
YEARS
1
\al and
ommetciGL an
Chronicle
S. Pat. Office
Reg, tJ.
New
Volume 159 ' Number 4278
The
j
Price 60 Cents a
York, N. Y., Thursday, May 4,1944
Post-War Financial Problems
Keynes-Morgenthau Plan As Revised By The
Experts Of Thirty Nations
By BENJAMIN M. ANDERSON, PhD.
v
(Dr. Anderson is Professor of Economics at the University of California, Los Angeles. He was
formerly Economist of The Chase National Bank of the City of New York. He is Consulting Economist
;of the Capital Research Company, Los Angeles, is a member of the Executive Committee of the Econ¬
omists' National Committee on Monetary. Policy, and is a member of the Post-War Committee of the
.California. Commission on Interstate Cooperation.—Editor.)
And Outlook
Stock Exchange Head Not
Fiscal Policies Impairing
Concerned Over Wartime
Purchasing Power Of Post-War
Dollar—Sees Need For Balancing
Federal Budget When
The "Commercial and Financial Chronicle" asks me to comment upon the "Joint War Terminates—Says Banks Are Or By
Statement By Experts on the Establishment of an International Monetary Fund" released Will Be Subject To Excess Profits Taxes
jby the United States Treasury
the evening of Friday, April 21,1944, The plan proposed
on
Copy
Next Year
Speaking informally at a luncheon meeting of the Bond Club
joint statement is, of course, an outgrowth of the Keynes Plan dated April 8,1943,
'and the Morgenthau Plan released April 6, 1943. The Morgenthau Plan was subsequently of New York on May 1, Emil Schram, President of the New York
& stock
Ex¬
revised i on July 10,1943.
4
~
change re¬
I said in brutal interruptions, though
viewed
the
the ultimate result might be
m
important and
y address
p res sing
of May 11, expected to be the same, and
By WILLFORD I. KING
prob1em s
although
the
first
joyride
1943, that
will
Professor of Economics, School of Commerce, New York University which
both the could weir be very intoxicatconfront
the
Member Economists' Committee on Reconversion Problems
■.
Keynes and ing. ■
country
dur¬
in this
1
Profits In A Strait-Jacket
.
the
t h
In
Morgena u
important point
one
Plans Lord
Keynes has triumphed
Mr.
Morgenthau;
The
opinion, original Keynes plan provided
were,
B
r
in
over
my
i t i
h
s
international currency
new
a
called "Bancor" which
was
to
plans.2 Both
were Keynes be fixed in gold "but not un¬
alterably," whereas Mrl'fylorplans.
The plan genthau's original
"Unitas"
released was to be fixed in gold with
Benj. M. Anderson
April 21, no provision i for alteration.
1944, is still a Keynes Plan, The new plan drops both
though it is quite possible that Bancor and Unitas but pro¬
Lord Keyries may himself re¬ vides (IV, 5) that "an'agreed
pudiate it. It does not provide
1—The texts of these three documents
for
world
a
inflation
in
so
will be found i» the Federal Reserve Bulle¬
of June
tin
and
1943.
September,
That monetary
inflation gradually undermines the whole sys¬
private enterprise is well illustrated by the series of directives
being issued from Washington by the Office of Economic Stabiliza¬
tion.
Any competent student of economics knows. that the rela¬
tionship'of profit to the system of free enterprise is much like the
relationship of gasoline to the automobile—that profit, like gasoline,
tem of
makes
machine
go.
When the
mo¬
tivating agent
is lacking, the
likely
to
lead to price
regulation,
and price reg¬
inevitably
of events
con¬
fore
nected
with
of
somewhat
Angeles
Commerce,
May
11,
1943.
T have discussed this problem
light of subsequent developments in
Chamber
of
Since .then
in
the
Chamber
of
New. York;
State
of
Copies
obtained
these
Avenue,
on
New
of
on.
the
an
address be¬
Commerce
three
from
Committee
Underwriters
1943, and in
the
of
3,
1944.
may be
February
documents
Economist's
National
Monetary Policy, .70
York .City.
(Continued
on page
the
Fifth
is
the
is
by
price
Willford I. King
regula-
tion in
the
readjustme
a
-
n
t
peace¬
time economy.
of
tho
Office
ci
.
played
the
by
o
f
Emil Schram
Bond
quirements of law"
sequence
field of manufactur¬
—; such
price
approved by the
increases to
be
Director
Economic
tion.
of
However,
Npv. 16, 1943, Mr. Fred M.
(Continued
permission
on page
General index
on
page
for
granted
1840)
THE CHASE
NATIONAL
Distributors
Buy War Bonds
Dealers
MANHATTAN
for
Bond
BO#jHJND
VICTORY
'/e/
PROSPECTUS ON REQUEST
Hirsch, Lilienthal & Co.
Members New York Stock
and
other
London
.
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Geneva
8-0G00
INVESTMENT
''
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"
I
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1
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Security Dealers
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Tel. REctor 2-3600
Philadelphia
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Exchange
Exchanges
1840
Stabiliza¬
such increases was to be
ing.
On
1832)
case
illustrated
r
the
In This Issue
lim¬
to
itation of prof¬
its. That such
December. 16,
series
a
Los
e
in
of ade¬ Club
influencing industrial
quate supplies of essential con¬ thoughts and policies, because of
sumer
goods" in those cases in
(Continued on page 1'821)
which "existing maximum price
regulations constitute a serious
impediment to the effectuation
:
of the production programs." In
Special material and items of
such cases, the Office of Price Ad¬
interest
with reference to dealer
ministration was ordered, when
activities in the State of Pennsyl¬
necessary,
to "allow price in¬
vania appears on page 1826.
creases beyond the minimum re¬
ulation almost
with
the
v
and
members
Price Administration, to take steps
the
before
sion
Administrator
"to insure the production
the Commercial and Financial Chronicle of
address
2—An
n
After pointing
out
the
part
is
simple a manner as the orig¬
inal Keynes plan does. The
new plan would rather
pave
the way for a world inflation
post-war
o
Vinson, Director of Economic Sta¬
bilization, directed Donald M.Nel¬
son, Chairman of the War Produc
tion Board, and Chester Bowles,
machine stops.
But
inflation
leads
of
c
to
the
.
ing the period
Members New
York Stock
Exchange
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5, N. Y,
Telephone: REctor 2-7400
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Thursday, May 4, 1944
COMMERCIAL & FINANCIAL CHRONICLE
THE
1818
...
Trading Market* in:
"i
American Cyanamid Pfd.
Alabama Mills
We Maintain Active Markets in L
American Barge
S. FUNDS for
.
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;
Maguire Industries
noranda mines
Goodbody & Co.
king & king
4j
Established 1920
40 Exchange
'
•
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PL, N.Y. 5 ,HA 2r2772
Telephone BArclay
7-0100
York
New
Exchanges
Stock
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Remington Arms
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Johnson Automatic
P. R. Mallory
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Direct wires to
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branch offices
BELL TELETYPE NY 1-423
Gold In Post-War Monetary
"B"
Axton-Fisher Tob.,
Dr. Edwin W. Kemmerer Outlines Eleven
Colonial Ice, Common
Ft. Dodge, Des
4's
Cooperation With Voluntary Adoption Of National
Monetary Units To Conform To Each Country's Needs;
The Establishment Of A
Simple, "Fundamentally
Automatic" Cold Standard, With Convertibility Of All
Moines & Sou,
Common
&
Kearney & Trecker
Mayflower Hotel, Common
Currency Into Gold,, And [Elimination Of Restrictions
On Gold Movements And Exchange Rates—Holds
MitclielU Company
Stock Exchange
Baltimore
Members
WOrth 2-4230
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Central
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;
120 Broadway,
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Authority—Favors An "Inter¬
From Government
Free
Bank,
Should Be Sole Monetary
..
Teletype N. Y. 1-1227
national Central Rank"
'1
''■&*
.
Princeton
in
the
of
tee
on
April
and
gave
Preferred
Exchange
31
Curb Exchange
Telephone
Bell
NY
the
of
Some
1-1548
points
major
discussed 1
by
Professor
Kemmerer
to
Amer. Gas & Power
Stock"
Common
W
W
and
Kemmerer
*emmerer
the
the
At
Struthers Wells
Preferred
in
H.
B.
New York 5
Telephone: WHitehall 3-1223
member of the
Dr.
.Economists'
ment
His
National Com-
lows:
.
end
mittee
Congres¬
follows:
of
the
1-1843
and
advocates
be
vigorous
a
of
the
one
ion
the
our
in the field
of post-war monetary reconstruc¬
responsibility
great
Preferreds
tion.
(All Issues)
>
The
•
be
wisely adopted interna¬
tionally and maintained for any
can
SreeTiecmiCompcmt}
Dealers
considerable time
It
Hanover 2-4850
1-1126 & 1127
should
tional
be
free
jealousies.
(Continued
Trading Markets in
Railroad
In
1
that it
S.
establish
shall
people.
I
Teletype NY 1-608
by
of Illinois
revolving
fund
a
to
of
to provide for post¬
war
financial
stabilization and
financial
assistance
to
foreign
nations.
At the same time, Dr.
Beckhart presented on his pwn
responsibility to the Committee a
critique of the International Sta¬
Fund
bilization
Like
Caesar's
leased
1830)
,
)
1955
oh New York Curb Exchange
Frank C.Masterson & Co.
York Curb Exchange
""Members New
WALL
64
YORK
NEW
ST.
5
HAnover 2-9470
Teletype NY 1-1140
RAILROAD
proposed by the
Experts,
and re¬
Secretary of Treasury
by
Morgenthau on April 21st.
tionships in the post-war pferiod.
In
other
words
they constitute
one of a series of important ac¬
Distilling
during the
r
•
nations.
I should like to
general principles
which might be given considera¬
tion in the development of our
"Accordingly,
set forth
international
and
financial
trade
1.
In
to foreign
nations
we
should
distinguish
very carefully between gifts and
loans, between the financial aid
which
man
for
extending aid
extend
we
suffering
which
we
and
payment,
which
we
we
will
distress and
do not expect re¬
financial
aid
and
purposes
for
expect repayment. Na¬
tions occupied
ers
hu¬
extend for economically
productive
which
relieve
to
and
the
stand
by the Axis pow¬
in desperate need
on page
Deb. 5's 1969
1838)
N.
St., New York 4, N. Y.
Tele. NY
1-210
Y.
Security
Private
Wires
Detroit
-
to
-
Inglis Elected-V.-P.
Of Blyth S Co., Inc.
FRANCISCO,
SAN
election
The
has
Inc.,
Charles
CALIF.
—
of John Inglis as a
Blyth
of
&
Co.,
by
announced
been
R. Blyth,
President.
Mr.
Inglis has been engaged in the in¬
vestment business in San Francis¬
co
for 20 years
and has been with
Blyth & Co., Inc. since 1933.
He
heads the Pacific Coast
mu¬
now
department
of
headquarters
in
nicipal
with
the
firm,
the
San
Francisco office in the Russ Build¬
ing.
Fashion Park, 5s, 1963
.
r
Hotels Statler
.
Jonas & Naumburg
Wm. J. Mericka & Co.
Members
Union
Cleveland
Commerce
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Bldg.,
Cleveland
St. Louis
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Exchange
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vice-president
policies:
INCORPORATED
Members New York Stock Exchange
HAnover 2-0600
few
a
for circular
74
BUCKLEY BROTHERS
Members New York Stock
Government
this
which
American
period will be
Simons, Linborn & Co.
25 Broad
propo¬
viewed against
tional finance and economic rela¬
(Continued
•
Troster,Currie&Summers
1
Dewey's
be
best
can
fol¬
HENRY HOLT
industry, the demand
Write
Committee
"Congressman
sals
BONDS
prepared state¬
the
authorities
Bortos
WHitehall 4-4970
in¬
unparalleled.
•
ST., N. Y. 5
226)
troduced
Dewey
United Nations'
for men's clothing
g.A.Saxton&Co.,Inc.
70 PINE
Joint
$500,000,000
Members
I
the
;on
Congressm a n
Charles
interna¬
on page
demobilization
Industrial
&
Beckhart
H.
from
the opinion of
in the
April 27th
testi¬
give
(No.
B.
Beckhart's
before
might undertake in the extension
of financial assistance to foreign
Resolution
FASHION PARK, Inc.
Public Utility
stocks
is
have the confidence of the
Assn.
the
<
,
first
requirements of any
post-war monetary standard that
i
*
in
*Dealt
Chase
of Research of the
tions
House
forma¬
own
of
mony
intelligent public opin¬
an
and
to
country should
be prepared to act promptly and
effectively in meeting its own
public service
St., N. Y. 5
Teletypes—NY
Debentures
Preferreds
Common
House of Rep-
to
light and heat.
contribute
tion of
new england
Bell
&
Common
.resentatives
on
terms
on
Af¬
Foreign
fairs
debate
in
the
Committee
systems
should
37 Wall
S l/z%
&
*5%
;
,
appeared the background of the entire role
invitation^ of the United States in interna¬
icy
the
war
problem of rehabilitating its mon¬
their
on
r
Monetary Pol¬
Discus¬
sions of the problem at this time
Y. Security
■';
.
Professor of Banking at Columbia Uni¬
and; a<$>
—rrr—
r*
versity
'before
both
N.
Central States Elec. (Va.)
; ■
Beckhart, Director
•by
will
Members
Teletype NY 1-1919
Bell System
Mr.,
National Bank of New YoYk,
and of thereby
bringing. order out of the mone¬
tary chaos which the war has
created.
Many different kinds of
monetary
standards
will
have
H. G. BRUNS & CO.
NY
Exchange
WHitehall 4-8120
v
Professor
world will be confronted with the
etary
Teletype
firm
partner in R. M. Wright
a
Members New York Curb
65 Broadway
•
"Gold
the
before
Committee
sional
6s, 1952
Bell
was
Members New York Stock Exchange
with Schluter & Com¬
& Company.
book, en~
Standard".
Gold
statement
Indiana Limestone
20 Pine Street,
the
Inc., L. G. Smith Company,
pany,
and
was
under
G. Riley & Co.
Establishment Of A
Foreign Credit Administration, Similar To That Con¬
tained In Resolution Of Congressman Chas. E. Dewey—
Sets Forth Six General Principles To Be Followed And
Offers A Five-Point Criticism Of The "Experts Inter¬
national Monetary Fund"
forthcom-
titled
Common & Preferred
&
of W.
Edward A. Pureed & Co.
.
E
Common
business'
ment
name
Bay way T erminal
M.
R.
and
Chase Bank Economist Proposes
are
appear
his
W. L. Douglas Shoe
V
trading depart¬
Wright as man¬
ager of the wholesale department.
Mr. Riley was formerly with T. J.
Feibleman & Company, and Peter
P.- McDermott & Company. In the
past he conducted his own invest¬
ment
the
of
manager
Monetary Stabilization Plan
plannin g.
COrtlandt 7-4070
System Teletype
Du Mont Laboratories
New York A. C. 2s,
re¬
monetary
war
New York 5
Nassau Street
with
Beckhart Presents A Post-War
26
garding the
position
of
gold in post¬
Vanderhoef & Robinson
York
association
their firm of William G. Riley as
Indiana Gas & Chemical
tes¬
timony
New
City,
resentatives
^United Cigar Whelan
Members
the
announce
York
Pfds.
7%
&
Richmond Cedar Works
Company, Inc.,
New
Commit-
House of Rep¬
Curb
Roller &
Broadawy,
6%
Plain
..
3-6s, 1956
Y.
H.
F.
Ill
New England Pub. Serv.
•
fairs
N.
-'"
.•
University, and President of the Econo¬
mists' National Committee on Monetary Policy appeared before the
'
Foreign At-*—;———
—~—<
Savoy Plaza
on
'
Emeritus Professor of International
Kemmerer,
W.
Edwin
Dr.
Finance
Riley and Wright Head
F. 11. Keller Depls.
Wright
;
''
♦Traded
Principles Of
Policy, Comprising International Monetary
Monetary
Coal, Com. & Pfd.
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Plans
Broadway, New York 6
WHitehall 4-3640
TRADING
•
MARKETS
INFORMATION
•
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14
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Volume
The COMMERCIAL arid
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/FINANCIAL
Reg.
U.
1819
7
CHRONICLE
We
Ralston Steel Car
;
S. Patent Office
']
interested in
are
William B< Dana Company
Publishers
f
■
j
BEekman
Editor and Publisher
William
William
Dana
D.
Business
Thursday, May
i
1944
4,
1
'
PASSES FOR
"OKLAHOMA"
—that's
that
Manager
&
encer
Stromberg-Carlson
again
ing
Published twiee
every
a
Crowley Milner
week
Thursday
>
Telephone HAnover 2-4300
and every
Monday
Offices:
S.
135
La
Salle
Representative;
fdens,
London,
wards
&
jCopyrlght
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E.
1
Drapers'
England,
C.,
Members New York Security Dealers Ass'n
32
Gar-
Broadway
Harrison 2075
Teletype NY 1-832, 834
Teletype CQ 129
Smith.
1944
Reentered
by
William
B.
Dana
We
Company
MORTGAGE
|3, 1879.
Subscriptions in United States and
;Possessions, $26.00 per year; in Dominion
of Canada, $27.50 per year; South and
PARTICIPATIONS
i
America, " Spain,
Mexico
Chase National Bank
City Bank Farmers Trust Co.
of
NOTE—On account of the fluctuations
remittances for
^foreign subscriptions and advertisements
York funds.
Members
40 Wall
New
St., N.Y. 5
Bell
;
Stock
York
reconstruction
Exchange
fund
joint
with
foreign
gov¬
for
rehabilitation}
stabilization
currencies
and
recon¬
struction.
The
resolution
149 In
calljs
for
an
initial revolv¬
ing
Rep. Chas. S. Dewey
administered
be
governors
the Association's 5% mark-up rule.
I
think
means
must
SOLD
•
Complete
-
Statistical
QUOTED
Information
-J.GOLDWATER&Ca
Broadway
New York 6, N. Y.
HAnover 2-8970
Teletype NY 1-1203
Majestic Radio
stance follows:
we
of world
have
have
must
some
some
& Television
stabilization; we
means
of world
ing their duty that„ fiey should
(Continued on page 1836) t ]
in
account
ernments
;"ChronicIe,; to ascertain the views of the NASD member¬
on
BOUGHT
-
consisting in part. ,of
These results representatives of various govern-
used
>
The above caption is self-explanatory, containing as it
does the current results of the poll conducted by fhe
ship
TITLE COMPANY
Mr. Dewey's statement in sub¬
fund
of
$500,000,000 to
by a board of
1-2033
Maik-Up Rule:
837
be
to
tions.
cooperation, but I have not been
particularly impressed by the aca¬
demic approach that has so far
I am not particularly
been had.
impressed
by
an
international
conference representing, as was
suited on Thursday last when the!
Secretary of the Treasury men¬
tioned his plan of some 30 nations,
which would sit together and dis¬
cuss these plans.
I have the greatest admiration
for
the
practically selfish ap¬
proach of the. representatives of
other nations. They are only do¬
NY
of
NASD
J.
to
provide for a
WHitehall 4-6330
Teletype
resolu¬
(H.
226)
Res.
Newburger, Loeb & Co.
In Poll On
'
his
tion
"Bank and Quotation Record—Mth. $20 yr.
made in New
WALL STREET, NEW YORK
Members New York Security Dealers Assn. '
Representative Charles S. Dewey, Republican of Illinois, appeared
before the Foreign Affairs Committee of the House of Representa¬
tives on Aprils
25 in Support ment departments and organiza¬
Irving Trust Co.
^•Monthly Earnings Record—Mth,. .$20 yr.
must be
bids.
surprising
CERTIFICATES
Freedom of American Action
Guaranty Trust Co.
Other Publications
Jn the rate of exchange,
with
39
Central Hanover Bank & Trust Co.
and
Cuba, $29.50 per year; Great Britain,
...Continental Europe (except Spain), Asia,
Australia and Africa, $31.00 per year.
|
on
Telephone: WHitehall 4-6551
International Rehabilitation
cates
issued by
i
'r>t ;
99
-
Supports Before House Committee On Foreign Affairs
His Resolution For $500,000,000 Revolving Fund—
Opposes United Nations International Stabilization Plan
And Urges Preservation Of Our Gold Reserve—Advo¬
Buy
second-class matter Feb-
as
Exchange
Congressman Dewey On Post-War
Through Wire Service
(ruary 25, 1942, at the post office at New
I York, N. Y., under the Act of March
;Central
CHICAGO 4
DIgby 4-8640
Ed¬
c/o
Board of Trade BIdg.
NEW YORK 4
St.,
fChicago 3, 111. (Telephone: State 0613),
IWestern
he
STRAUSS BROS.
issue—market quo¬
records,
corporation,
banking,
.clearings, state and city news, etc.)
Other
may
Obsolete Securities Dept.
Teletype NY 1-5
Members New York Stock
tation
\
bids
rare
,
(general news and advertising issue)
J complete statistical
how
.
junk in your strongbox. But
and again we come clatter¬
up
25 Broad Street, New York
'
i
AS RARE AS
PREFERRED STOCKS
Oxford Paper
Seibert, President
Riggs,
AND COMPANY
Public Utility and Industrial
Pettibone Mulliken
Herbert D. Seibert,
"
\j
3-3341
High Grade
•
Chicago Rwy. Equip.
25 Spruce Street, New York 8
I;
,
Lichmii
B. S.
offerings of
•
ii
,
THE COMMERCIAL ,& FINANCIAL CHRONICLE
Number 4278
159
Allen Du Mont
Laboratories
Loft Candy
.
Circulars
on
Request
;
J.F.Reilly&Co.
Members
New
Ill
York
Security Dealers Assn.
Broadway, New York, N. Y.
REctor 2-5288
Bell System-Teletype, N. Y, 1-2480
..f
:of the survey warrant two conclusions: (1) the abject fallacy
I
of the statements by Association officials to the effect that
Bartgis Bros.
only a "small misguided minority"'do not favor the so-called
1 "philosophy," and (2) that the Board of Governors can no
i
j longer fail to heed the demand of an overwhelming majority
3 of its members that the rule be rescinded without further
Small Business In
Megowen Educator
Jeopardy
;
Food Co.
i delay.
For the record, we give here the latest results of Petitions SEC For Public Hearings On NASD 5% Rule
jj the balloting, which includes votes cast up to and including
A petition was served on May 2 upon the Securities and Ex¬
I.May 3,-1944:;.:;
;V
v;/;'\:.;■% %
^;: change Commission by the recently formed Securities Dealers
"A" & Common
Memoranda
on
Request
..
for public hearings and revocation of the
"5% spread rule" passed by the Board of Governors of the National
Association of Securities Dealers.
The action, it is noted, represents
the first formal step taken by the Committee to bring about the
Committee
Is
RETURNS FROM NASD MEMBERS
'
}•
s
Total Ballots Cast^-__^___-.—
.Number
Favoring 5% Rule-
Number Opposed to
;
:
986
149
_
5% Rule
837
or
or
15.1%
84.9%
asking
abrogation of the rule and is in line with its stated objectives to
combat all such proposals which^
it believes are really harmful to ness, destroys competition and aids
the ,securities business and against in the dissemination of monopolis¬
public interest.
petitioners are William S.
Baren, Baron G. Helbig and Ben¬
jamin S. Lichtenstein, who repre¬
sent a group of dealers and brokers
from all parts of the country, for¬
mally known as the "Securities
Dealers Committee," which is be¬
the
N.A.S.D. Catechism
Hmm&tolm
170 Broadway
Bell System
..
COrtlandt 7-6190
Teletype NY 1-84
tic practices.
The
Purport of the Rule
Last fall, the Committee points
With Hamlet we soliloquize, "To be or not to be." That
out, the NASD, by its governing
board, passed a rule which, in ef¬
was a real issue when the N.A.S.D. was
aborning. The his¬
fect, places a ceiling upon spreads
tory of the machinations behind the activities which brought
between the purchase and sales
it into being would make an interesting record and a reveal¬
prices in the securities field. The
ing supported by nation-wide vol¬
ing one to the suckers, some of whom are being hoisted by untary contributions. They claim effect of this will be to gradually
f
the petard they support, and more of whom will be increas¬ the issues involved are not lim¬ destroy the small dealers, since
the profit motif is entirely dis¬
ingly destined to meet the same fate. What an astonishing ited to the securities field but are regarded and the cost of doing
national in scope, may affect our
view a behind the scenes picture would be!
Perhaps some whole economy and have a dis¬ business in many instances is
larger than the 5%
limitation
-day it will be told.
tinct bearing on the post-war re¬
which has been fixed.
In the meantime, we have our lesson, and here goes.
construction period, because the
It is claimed that this rule, if
Question 1: Is the N.A.S.D. a private association in- rule invoked by the NASD pre¬
(Continued on page .1837)
vents the financing of small busitended to
SUGAR
SECURITIES
DUNNE & CO.
Members New York Security Dealers Assn.
25
Broad St.,
New York 4, N. Y*
Tel. WHitehall 3-027.2
*
protect its members?
Answer:
J
Because if it
were
a) There would be
•
}
i '
Nov
abling law such
'
•
and
■
!"
no
as
*
need for
an
Panama Coca-Cola
en-
the Maloney Act,
.
b) It would be powerless to exercise leg¬
islative functions such
as
it has done
Question 2:
Is the N.A.S.D.
Answer:
No.
a
strictly public body?
Pacific Good
Secttnitid
assesses
-
)
on page
HoitRsseSTrsster
*
for the maintenance of
LOS ANGELES
Established
1821)
Members Los Angeles Stock Exchange
1914
Members New York Security Dealers Assn.
74
What is the N.A.S.D.
(Continued
Public National Bank
& Trust Co.*
available
Wyeth&Co. >
organization.
Question 3:
Coca-Cola Bot. of Los Angeles
*First quarter analysis
NEW YORK
t.
Warrants
Y.
Coca-Cola Bot. "A" of Cincinnati
Because it has dues paying members,
whom it
American Cable & Radio
*
through the medium of its "5% spread
philosophy."
•
*
Bottling
Coca-Cola Bottling Co. of N.
Trinity Place, New York 6, N. Y.
TelephoneTeletype:
BOwling Green 9-7400
NY 1-375
on
request
C. E. Unterberg &
Co.
Members New York Security Dealers Assn.
61
Broadway, New York 6, N. Y.
Telephone BOwling Green 9-3565
Teletype NY 1-1666
& FINANCIAL CHRONICLE
THE COMMERCIAL
1820
Thursday, May 4, 1944
BOSTON
American
CROWELL - COLLIER PUB. CO.
Distilling
( Plain)
.Art Metal Construction
•
Bird & Son
Blair & Co.
American La France
Bought
-
Sold
-
Quoted
6% & 7% Pfd.
N. E. Pub. Serv.
Magnavox Corp.*
Moxie Co.
Exchange and Other Principal Exchanges
»
du
Pont, Homsey Co.
CHICAGO
YORK
TELEPHONE
.
105 WEST ADAMS ST.
BROADWAY
NEW
^ —
BARCLAY
7-0100
TELETYPE
.
NY
J.F.Reilly&Co.
1-672
Moxie Com. & Pfd.
'
Ill
"A"*
Shawmut
Building
MASS.
9,
Dealers
Security
Capitol
Assn.
Teletype BS 424
4330-
Broadway, New York, N. Y.
ST. LOUIS
REctor 2-5288
WE SPECIALIZE IN THE FOLLOWING
Consolidated Textile & Bonds
Bank
BOSTON
Members
York
New
PoIIak Manufacturing
Du Mont Laboratories
United Elastic Corporation
United Stockyards Pfd.
v
115
Steel
Wickwire Spencer
National Gas & Electric
Botany Worsted
Goodbody & Co.
Members N. Y. Stock
Lawrence Portland Cement
Bell
System
Teletype.
1-2480
NT
Axton-Fisher "B"4
Central Power and
Crov/ell Collier Pub.*
P. R.
Mallory*
>
Polaroid
1st SVs's due 1973
•
1st 3%'s due 1969
Company
Iowa Southern Utilities
Majestic Radio*
Liberty Aircraft
Northern States Power
Hearst Pfd.
Whelan
Public Service
International Detrola
Incorporated
Loft
A. A. Fraser With
Radio
Co.
Farms
Minneapolis
Milwaukee
Boston
New York
Chicago
Merchants Distilling*
Candy
t
Long Bell Lumber*
Botany Worsted "A"
and Pfd.
Title
Explosives
Guarantee & Trust
Dealers Cite Reasons Why
NASD
5 % Rule Imperils Small Business
Auto
Car
Triumph
Punta
Sugar
Alegre
Remington Arms
Corporation
Eastern
Enamel
"B"
Great American Industries*
Drill "A" &
United
Berkshire
Petroleum Heat & Power
Son
&
.
*
,
Maryland
Casualty
Purolator
Co.
Douglas
Shoe,
Bendix Home
Com. & Pfd.
Appliances
Bds. & Wrnts.
Commercial Mackay,
Tokheim
Tank
Oil
& Pump
Consolidated Dearborn*
American
Export Airlines*
Chicago & Southern Airlines*
Airlines*
Mid-Cbntinent
Northeast Airlines*
&
Power
Warrants
Light & Power
Peoples Light & Power Pfd.
American Utilities Service Pfd.
E14c.
&
Util. Com.
Suffolk Ltg.
Pfd.
Queensboro Gas & Elec. Pfd,
Puget Sound Pr. & Lt.""'
Int'l Hydro Elec. 6s, 1944
Mass. Pcwer & Lt. $2 Pfd.*
United Lt. & Rys. W. I.
Scranton
Springbrook Water
Nassau
&
effect of
'•
;
,
/
Central
St. Paul Adj. 5s
&
4s, 5%s, 5%s
R. of N. J. 4s, 5s
R.
Chicago,
N.
W. 4%s
CHICAGO
TRACTION
ISSUES
PHONE
WIRE ORDERS
OR
AT OUR EXPENSE
*
Circular
on
Request
PPPfilllP
°»
J\lm
V
fS1
lllPi*!
Members N. Y. Security Dealers Assn.
120
BROADWAY, NEW YORK 5
REctor 2-8700
Direct
NY 1-12881
Wires
to
BOSTON—HARTFORD—PHILA.
V
respect to the additional comments herewith regarding the
rule on markets for securities of smaller enterprises,
the
preceding the
post-mark appearing on
the envelope in which the questionnaire was returned.
In cases
where publication of the name of the community would tend to iden¬
tify the firm (as in places where only one firm exists), the point of
origin is indicated by using the phrase, "A Small Maine Town," as
an example, or its equivalent.
it
an¬
ard
W. Bosworth
the
company
as
in
officer of
an
charge
and
of
account
their
analysis
department.'
Bosworth is
Mr.
Oberlin
and
Harvard
School of Business
ministration.
manager
graduate of
a
College
-
Graduate
Until
1933
Ad¬
he
was
of the statistical depart¬
ment of the Union Trust Co. Since
then
he
tional
has
City
where he
in
been
with
Bank,
of
the
Na¬
Cleveland,
assistant vice-presi¬
was
the
in
dent
investment
division
charge of trust investments.
At Ball, Coons & Co., Mr. Bos¬
will
continue
investment
worth
has
comments
was
obtained
will
and lower
A.
Alfred
Fraser
III
New York.
formerly did analytical work
buying department of the.
Lee Higginson Corporation.
in
limit the marketability
the
IN ILLINOIS
on
the market of the
corporations of the country will be definitely adverse.,
The securities of smaller corporations as well as most over-thecounter
securities demand relatively greater investigation, study,
attention and research work first, in the proper selection thereof for
proper distribution or recommendation to customers and, second, in
the constant checking of current conditions and future prospects in
behalf of customers holding same.
This applies, of course, to a sub¬
stantial degree for larger or well-known listed issues; however, we
believe, it is academic that the smaller issue or the normal unlisted
security demands much more of the dealer's time and special data
smaller
gathering.
,
Also, because of the plain fact that to retail such issues demands
much more discussions, sales effort and specialized knowledge, before
such issues can be placed.
However, experience has shown that
,
of these issues prove to be much more satisfactory and profit¬
able to customers than many larger, well known or listed issues.
.
We believe that one of the chief faults of a 5% mark-up rule is
the dealer,
Distribution Of Amer.
Gas § Elec. Common
judged, and the customer loses 50%
.
-
or
gross
A 2% mark-up or
of his capital.
A
profit is cheap if the security, because of
(Continued
the
of
Co.
Cleveland
the
and
a
Society
for the Blind.
V
A. A. Smith With Firm
William S. Baren is
American Gas and Electric Co. at
27%
75c
with
a
concession of
dealer
as
William
doing
now
S.
:
Baren
share. The
offering
immediately oversubscribed.
per
was
recently organized to
fight the NASD 5% rule and other
measures
inimical
to
Patton With
Gruitenden Go.
Los
Opens
Angetes Office
the
stock
and bond business.
H.
M.
Byllesby
Byllesby
and
Company,
Inc., Ill Broadway, New York
City, announce that Leo M. Pathas
ton
become
associated
with
Cruttenden & Co., 209
Salle
Street,
of
members
Chicago
nounce
cilities
South La them. Mr. Patton was previously
Chicago,
Illinois, with Lee Higginson Corp. and
the
New
York
and
ing of
M. J. Meehan &
Exchanges,
an¬
expansion of their fa¬
an
as
underwriters, distribu¬
an
office in Los Angeles,
Calif, at 634 South
on page
1834)
The
Co.
Stock
Spring Street.
Armin A. Bohn Joins
Merrill
new
office
will
be
under
Lynch Co. Staff
(Special to The Financial Chronicle)
INDIANAPOLIS,
A.
Bohn
has
IND.—Armin
become
associated
with Merrill
ner
or
mark-up
Products
Company and has moved to larger
tors and brokers in listed and up-
profit to a dealer or salesman is quite dear, if the security is poorly
10%
Bosworth, of
director
a
quarters at 42 Broadway.
listed securities through the open¬
security to the investor or speculative customer.
selected
of
trustee
is
the
ef¬
A. Albert Smith, formerly with
fected on May 2, 1944 by Paine,
Hunter & Co. and prior thereto
Webber, Jackson
& Curtis, 25
with Dimpel, Hulsebosch & Co.,
Broad Street, New York City, and
is associated with the firm.
Coburn
& Middlebrook,
1 Wall
Mr.
Baren
is
a
member
of
Street, New York City, of a block
the Securities Dealers Committee
of
15,000
common
shares
of which was
was
the percentage of profit, satisfaction and
on
City
business
emphasis on percentage of profit (gross profit) to
rather than
Forest
He
•
of
son
.
many
that it places the
a
Now Wm. S. Baren Go.;
Gompkle Secondary
Secondary distribution
and trend toward weaker bids
is
late Dean Edward I.
He
the past 19
'• ;•
•
Bosworth
Oberlin.
States Trust Company,
from the
prices.
been engaged for
Mr.
should be noted that the name of the city or town
It
Pac.
Building,
years.
SMALL TOWN
Chic., Milw.
Commerce
formed Securities Dealers Committee has .petitioned the
SEC to hold public hearings on the measure.
This represents the
Committee's initial formal action in its campaign to work for the
We believe the effect this rule will have
Missouri
Union
nounced the appointment of Rich¬
April 20 and April 27.' Apropos of the rule itself, mention,,is made'
of the fact that, as reported in detail elsewhere in today's issue, the
CHICAGO,. ILL.
Pfd.
CLEVELAND, OHIO — Ball,
Co., investment bankers,
Coons &
investment
,
Ga^ Pfd.
Iowa Southern
Bosworlh An Officer
work similar to that in which he
dealer's
Conn.
Cons.
United
stands, will virtually close the doors of the capital markets to the
nation's smaller businesses.
In this connection, we give further be¬
low some more of the expressions that have been received from
members of the NASD.
Others appeared in our issues of April 13/
With
Washington Gas & El. 6s, 1960
Illinois Power Div, Arr. and Com.
Gas
invest¬
of the
it
industry.
Amer.
with the
department
developed in the poll of the membership recently undertaken by the
"Chronicle", current results of which will be found on page 1819.
Of equal significance, however, is the further disclosure that the
bulk of the comments received on the subject hold that the rule, if
abrogation of the rule and the correction of other measures which it
deems
equally injurious to the welfare of the entire securities
Airlines*
National
be¬
recently
Airlines
Inland
ment
has
approximately 85% of the members of the NASD
unalterably opposed to the Association's 5% mark-up rule was
are
Sugar
Camaguey
Vertientes
Bird
associated
come
III,
fact that
The
Spin.
Fine
Fraser,
Emphasize That Attempt To Limit Gross Spread To 5%
Will Kill Interest In Capital Issues Of Smaller Enterprises
Magazine Repeating Razor
Nu
A.
Alfred
Brockway Motor*
Exchange
Of Bail, Goons & Go.
U. S. Trust Go. In N. Y.
Instrument*
General
Louis Stock
Security Adjustment Corp
j 16 Court St., B'klyn 2, N. Y. TR. 5-5654
AXXMJXN*™COMMNY y
Arden
1, M0.
System Teletype SL 80
Members St.
1st 3%'s due 1968
Company
LOUIS
Legal for N. Y. Savings Banks
due 1966
1st 4's
Bell
Buy Bonds—Yielding Over 6%
1st 3^'s due 1973
Derby Gas & Electric
Lmerson
ST.
idle cash.
or
due 1970
1st 4's
Company
Co.
&
509 0L!VE STREET
More income from securities
1st 2%'s due 1974
Company
Electric Company
Utah Power and Light
Com. & Bonds
Vicana Sugar
1st SVs's due 1973
Company of Indiana, Inc.
Sioux City Gas and
Southwest Pub. Serv.
Stix
(Investment Engineering)
1st SVk's due 1969
Service Co.
Northwestern Public Service
Public Util. 5V2S
United Cigar
Indiana Public
Northern
BONDISTICS
due 1970
1st 4's
Company
Michigan Consolidated Gas Company
Stromberg Carlson
Cent.
Light Company
Iowa Public Service
Lynch, Pierce, FenBeane,
Fletcher
Trust
&
Building.
the supervision of John B. Dunbar
with
partner of the firm.
officer
Mr. Bohn was formerly
Fisher
&
Co.
and
-was
of Fisher, Bohn &
Co.
an
THE COMMERCIAL
Number 4278
Volume 159
& FINANCIAL
MANAGER
in
all
securities—own
of
types
are
years—desires to
age
a
New York City, office
for
an
as
man¬
Abitibi Power &
Trading Department
our
and
ISSUES
mr. r. m. wright
of
manager
The
our
Chronicle,
Spruce
N. Y,
Internat'l Pr. & Paper Nfd.
Wholesale Department
5s, 1968
Montreal Light, Heat & Power
Street,
F. H. Roller
*
3s-3V2» Internals
Company
&
INC.
Ill
N.A.S.D. Catechism
f*
(Continued from
Governors
f.'
stant
Question 4:
j
l
to
their
state
the Board of
position, but
tune which
tive in
r
^
;
As
~
in
true
120 Wall
pleases them best;
which
not
were
were
give
we
you
the absolute nega-
to
>.■.
democracies, the
have
reservoir
been reserved to
New
the
several
Corporation
or
reserves
the right to amend,
repeal any provision contained in. this
certificate of
incorporation, in the manner now or here¬
inafter prescribed by statute, and all rights conferred
upon members are granted subject to this reservation."
ors
plain from these quotations, the Board of Govern¬
mainspring of power,
and not the members constitute the
and the
by-laws have been cleverly drafted with this ideol¬
ogy in mind.
Small wonder then-that the "5% rule" can
be flaunted, whilst these Board members persist in their re¬
fusal to
explain what conferences their representatives had
S.E.C. to bring about this "philosophy."
with
You will observe that the
rights of members
are
subject
WE DON'T CHOOSE
to reservations in favor of the Board.
TO CALL THAT "DEMOCRATIC."
Then there is this other vital and
dangerous situation,
given certain exclusive privileges
such as participation in underwritings, and dealing amongst
themselves upon more favorable terms.
From these, nonmember dealers and brokers are excluded.
This type of
special legislation of monopolistic origin must not endure.
It renders decadent the very fabric of our democratic proc¬
esses.
'*■
"'/'•*
' '4 '/■ ;
N.A.S.D.
members
are
>
of the Business Conduct Committee in the very area where¬
in one is doing business—these certainly are a negation of
We
have learned to regard as
fair.
go
Incorporated
New York 5, N. Y.
Teletype NY 1-897
Street
Minn. & St. Louis 5s, 1934
their contacts with
investors, Mr.
Schram said:
you
to
like
should
I
consider with
Iowa Central 5s, 1938
today some of the questions
are in all of our minds con¬
and, beyond victory,
transition from war to
become final
the
until
has been completed.
We may expect that the defeat
of
Germany will
precipitate a
peace
sharp
decline in the
production.
industrial
volume of
Following:
further de¬
victory over Afapan, a
cline would Seem likely; and this
our
carry
may
rapidly
quite
industrial output
to: the transition
Ail
decline,
this
of
be
in
of course,
the production of war
goods, for production of peace¬
time goods will begin to expand
immediately after the defeat of
Hitler and
even
when the aggre¬
output is at the transition
the production of peace¬
time
goods should have
been
greatly expanded.
Full recovery
from the
low point should
re¬
gate
low point
quire not more than six or eight
months
and
this
my
estimate is that
is complete
recovery
on,
where
area
changeover
of
cars,
ment,
which
cancel
war
the
ment
contracts
goods
are
the
no
mo¬
longer
It
needed by our military forces.
that
a
such
1
Teletype NY 1-955
be
Motor
jobs into peacetime jobs.
accomplished with¬
out
prolonged
dislocation,
we
must make speedy reconversion
our main objective as soon as vic¬
tory is in sight. This means thai
the Government must be prepared
to
St., New York 5, N. Y
Covered Wagon Co.
($1.50 Cum. Conv. Class A Pfd.)
Eitingon-Schild Co. Inc.
British Type Investors, Inc. A
We
are
principals—Brokers
for
there
must
be
in
procedure for prompt
amounts
due
under
and 11
that manufacturers whose
cancelled
means
may
trade
account.
our
S. R. Melven & Co.
2 RECTOR STREET
New
York
6,
war
of
liminary estimates that only about
one-fifth
of the
nation's indus¬
1 Wall
DIgby 4-7060
contracts,
plants are wholly or partly freed
war production must be per¬
mitted immediately to use avail¬
able materials and manpower tc
from
N. Y.
Telephone WHitehall 4-7544
If this is to be
payment
the
will
onerous.
develop.
hear a
great deal
about the problems of the transi¬
tion period.
The chief problem
for large numbers of our people
of course, will be that of shifting
from
Co.
&
Members New York Stock Exchange
we
readiness
that
Gude, Winmill
physical
demand will
1940.
recall
•
I
at
will
Greendale Minerals
are the goods
refer; and surveys ol
consumer requirements, I under¬
stand, indicate that it is in such
products that the most clamorous
to
in
You
Missouri Pacific Old Com., Pfd.
the like
ments and
aggregate production will be
least 20% higher than it was
,
American Locomotive Old Pfd.
household and other equip¬
factory machine replace¬
means
our
the
machines
slowest and most
Now,
low level.
will
20%
'
•
particularly if there should be, as
we expect, a time lag between the
coming of peace in Europe and
the defeat of the Japanese.
A
gradual, rather than an abrupt
would
thus
occur.
cerning the shape of things to conversion,
But, from the industrial opinion
come after the war has been won.
I shall first touch, briefly, upon which I have gathered, it would
the major developments that will seem that, however tha transition
occupy us during the months that begins, the products likely to be
heaviest
demand
are
in
the
must ensue until our victory has in
that
Baruch-Hancock report gave pre¬
but why?
In the formation of the
N.A.S.D., the; flame of democracy sputtered low.
Lastly,
was there, is there; need for the N.A.S.D.?
IT MUST BE
PLAIN BY NOW, THE ANSWER IS NO.
can
63 Wall
And Outlook
when
we
Frederic H. Hatch & Co.
Des Moines & Ft. Dodge 4s, 1935
.
Now, then, trials by one's competitors, by the members
what
Exchange
Sugar Exchange
(Continued from first page)
,
As is
Stock
Coffee &
Universal Match
;
Potf-War Financial Problems
problem?
"Eighth * * * In furtherance and not in limitation
granted by statute, the Board of Governors
/ is expressly authorized unless the by-laws otherwise prou; vide:
To make, alter or repeal the by-laws of the Corporation." '• ••
} ;
4
Tokheim Oil Tank & Pump Co.
Bell
of the powers
J;; alter, change,
York
V
May 1, 1944
of
quote from its certificate of incorporation:
"Tenth—The
Toronto
Petroleum Heat & Power
HAnover 2-9612
•"
■■
How does the N.A.S.D. handle this
We
York
New
state some facts for you
the people. That is axiomatic
constitutional form, the powers
expressly granted to the Federal Govern¬
deemed
states.
-
St., New York
& CO.
power is in the governed,
and explains why in our
ment
I
1-395
Lawyers Mortgage Corporation, Com.
to mull over.
know,
we
HAnover 2-0980 I
Montreal
Ohio Match
Members
reply,
Teletype NY
American Cyanamid, Pfd.
In the organization of N.A.S.D., how far
Rather than
Answer:
Bell
New York
We Announce the Removal of Our Offices to
have the democratic processes been ob,K'Vv.'V;served? ■ v,• '■ •/,;C;.
■
WILLIAM St., N. Y. 5
52
Teletype N Y 1-102©
BArclay 7-0570
they won't tell. They seem to play up
the public, private, or quasi-public nature
of their activities, depending upon the in¬
.
HART SMITH & CO
Broadway, New York 6, N. Y.
page 1819)
We have been trying to get
Answer:
Paper
1953—Bonds & C/ds.
5s,
Financial
&
New York 8,
of
manager
in¬
or
N5,
Commercial
25
CANADIAN
MR. WILLIAM G. RILEY
INDUSTRIAL
as
Box
firm.
vestment
the
of
us
SECURITIES
out-of-town New York
Exchange house
announce
association with
over
twenty
Stock
pleased to
1821
for
markets
Experienced
over-the-counter firm for
We
Trading Markets
AVAILABLE^
CHRONICLE
ditions
and
not
denied fulfillment
be
at
just wage need
a
in
this
great country, possessed as we are
with
magnificent
productive
fa¬
cilities, the finest of scientific
and managerial skill and an abun-.
dance
of
natural
resources.
We
know that the
problem of provid¬
ing jobs.cannot be solved unless
we are farsighted and intelligent
in putting
our
house in order.
The first step in that direction is
to
prepare
to
a
become
sound tax program,
operative upon the
t
termination of hostilities.
/ Such a
would involve a
tax program as I have reiterated
physical changeover problem. As¬
so much that I am afraid the sub¬
suming
that
this
estimate
is begin the production of civilan
ject is becoming tiresome, would
The fact that the Board of Governors of this hybrid has approximately correct, some of goods.
The problem of providing em¬ provide
definite
incentives to
our
most
important
industries
saddled the securities field with the illegally conceived "5%
will require time,
labor and a ployment for all who are able and post-war business.
Our taxes must be so revised
rule," and has had the insulting and continuing temerity to considerable expenditure of cap¬ willing to work will dominate all
persist in its enforcement despite the knowledge brought ital to return completely to nor¬ other political, economic and so¬ as to remove impediments to the
free flow of short-term credit and
Unquestionably, cial problems, not only in the
home to it that a large majority of the members opposed this mal operations.
capital, which* is the
a
substantial amount of peace¬ transition period but in the post¬ long-term
"philosophy" is in itself an answer. ,
blood
of progress
in this
time goods will be produced soon war period beyond as well. Surely life
As we see it, outside of certain special monopolistic after hostilities., in Europe cease, the will to work under good eon- country. .In this connection,.! aim
reliably informed that many of
privileges of doubtful value or legality, those police powers
the banks are, or by next year
which the N.A.S.D. seeks to exercise are more fully pos¬ by private exactions claimed to be voluntary, but really
will
be, subject
to the excess
trial
capacity
.
.
sessed, and capable of honest exercise by the S.E.C.
Whilst exchanged for special monopolistic privileges.
there is much to be desired in the S.E.C. set up, still it is de¬
The
autocratic attitude of the Board of
profits tax so that, in effect, they
Governors of
cidedly to be preferred over N.A.S.D., being a public admin¬ the N.A.S.D. in flagrantly disregarding the views of its mem¬
istrative body, with trial commissioners who give full time bers, has gained no friends for it.
to its work, and who are in no sense competitors of the
IN OUR OPINION, THERE IS NO NEED FOR THE
defendants.
Support is by Congressional appropriation, not N.A.S.D.
will
retain but 5%
received
on
future
of the return
increases
the
in.
holding of taxable Govern¬
ment obligations and commercial
loans.
(Continued
on page
1824)
THE COMMERCIAL & FINANCIAL CHRONICLE
1822
Thursday, May 4, 1944
Laurence Sisnonds With
"SUGGESTIONS*'
Orders executed
Brown Bros; Harriman
San Francisco
'
1
MARKETS IN
TRADING
J
We will be
★
pleased to make suggestions
who
are
has
associated
become
Stock
with Brown Brothers Harriman &
interested in the; re¬
10 Post Office Square.
Mr.
Simonds was formerly with Rob¬
Co.,
tail distribution of Real Estate Securities.
SECURITIES
<k
dealers
to
REAL ESTATE
BOSTON, MASS.—Laurence W.
Simonds
Morris
S.
ert
&
Co.
and
was
a
10 A.M. to 5:30 P.M.
Eastern War Time
ford.
Seligman, Lubetkin 8 Co.
SHASKAN & CO.
/Member! New York Stock
Members New York Curb
Boll Teletype
>'
Members
Dlgby 4-4950
40 EXCHANGE PL.,N.Y.
Direct private wires
Incorporated
Exchange
Exchange
New York
Attractive
Security Dealers Association
41 Broad Street, New York 4
Purolator
HAndver 2-2100
Real Estate Securities
By JOHN WEST
.
\
ALL
York
New
Stocks
AND
Athletic Club
Pay Interest At rears
First
Mortgage Fee Bonds
From Increased Earnings
TUDOR CITY UNITS
Three Months' Earnings Of Current
Fiscal Year Indicate
3% Interest and Approximately $200,000 Sinking Fund
C. H. TIPTON
SECURITIES
CORP.
Members N. Y. Security
Dealers Ass'n
BROADWAY
in
.
NEW YORK 6, N.
Products, Inc.,
com¬
stock appears attractive on a
speculative
basis
at
prevailing
price levels, according to a mem¬
orandum on the situation just is¬
sued by Ward & Co., 120 Broad¬
way, New York City.
Copies of
this memorandum may be had
We Are Interested In Buying
FRED F. FRENCH
Speculation
mon
1
NY 1-953
Y.
WOrth 2-0510
ment of
ESTATE
Bonds
All Issues Traded
Mont
in the
default
the
semi-annual
pay¬
difficulties
General Instrument;
Long
to
terms
which
come.
"Several
in
in¬
net
issue
and athletic
rooms
New
reduced
is
fixed
thereafter
<
TRADING MARKETS
•> '
*'
-
City
property were rented to the Air
Transport Command of the Army
Air
; Retype NYM
York
to
$4,000,000,
int erest
in¬
were
Colonel E.
T. R.
the guests
Based
creases.
of
the
current
on
fiscal
year,
compared
—
the
All
of
these
factors
have
following
comparison
before
Net
Fixed
Wick-
interest
over
———
fixed
interest
1942
$211,544.86
$12,722.14
90,972.00
90,972.00
$120,572.86
Invited
$78,249.86
Three
Telephone WHitehall 3-4794
before
Net
Excess
over
Ripley Mis
W. B. Coy In Boston
BOSTON, MASS.—William B.
Coy is now with Harriman Ripley
Inc.,
Street.
Federal
30
Mr. Coy was previously with E. H.
Bollins & Sons, Inc., and was a
Vice-President
of
Merchants
Na¬
tional Bank of Boston.
overf interest
ajid depreciation-
Attractive Situation
H. H. Robertson Company offers
attractive situation (the issue
an
Pennsylvania),' ac¬
cording to an interesting memo¬
randum
being
distributed
by
Buckley Brothers, 1529 Walnut
St., Philadelphia, Pa., members of
the New York and Philadelphia
Stock Exchanges.
Copies of this
memorandum ,may be had upon
request from Buckley Brothers.
block front
tire
of
current
situations
in
Loft
Candy Corp., Majestic Radio and
Television,
and
Allen
du
on
the
east
$26,982.38
28,401.66
28,401.67
$1,419.29
2. A first
of
side
Avenue, New York,
and 59th Streets,
22-story c l u b h o u s e
erected thereon overlooking Cen¬
tral
Park.
on
The
land
fronts
for
signed
Trav¬
Pelham
Westchester
sports.
(This
prop¬
post-war era.)
The encouraging feature in this
situation,
Mont
we
believe, is the
monthly uptrend in
bership
dent members.
con¬
which creates
offerings
or
a
With
Laboratories offer attractive pos¬
dum issued by J. F.
Reilly &
Broadway, New
York
Copies of these interesting
Co.,
bids
memo¬
request.
looked
market
in for
if
as
it
real
rally in¬
stead of just another one of
those wiggles.
Opinion was
qualified by pointing out that
the rally would be just
a
minor reversal "in
a
dowh
a
market and not the
of
f
a
beginning
sustained rise.
#
'
Raymond & Co., 148 State St..
holders
current
will fare by
the
of
Frisco
issues
up.
capital set¬
Post-war estimates and fig¬
ures
are
new
from
presented in this discus¬
Raymond
&
may
Co.
be had
upon
re¬
quest.
Public National Attractive
Stock
of
the
Public
*
.
V »J?
'•
■'
,
„;
Bell System Teletype NY 1-588
*
were
with stops.
Well, you know what hap¬
pened. The market slipped,
recommended,
grabbed a number of the
stops and left the column out"
on a
half-sawed limb.
Of the
original list of seven stocks
only three remained. These
Electric
were
Auto-Lite,"
with
a
stop at 16 3A.
As
the
this
is
above
:.
' '
*
*
being
three
back to about the
:
,
written
stocks
are'
prices
you
paid. They act all right, con-.
sidering the state the rest of
the market is in, but that's"
nothing to get excited about.
*
*
*
••
In the past two days,
how¬
picture
painted last Week has again,
begun changing color.
The
ever,
same
t he
do
leaders
w n
which
started
poking their noses above the
pack a few weeks ago are
again sniffing around.
The'
question is, are these signsimportant or are they the"
things which led me into a
blind alley three weeks ago?
bers of the New York Stock Ex^
ing positions of 39 major solvent
railroads; giving fixed charges be¬
fore and after Federal taxes; net
cash
income,
capital
Tel.
Co., 68 Wil¬
City,- mem¬
change, have prepared a report
concerning the financial and earn¬
Incorporated
New York 7, N.
number of stocks
National
York .offers
R. W. Pressprich &
without Stock
150 Broadway
a
Boston, Mass., have issued an in¬
teresting discussion on how the
liam Street, New-York
3%-6% Income Bonds
or
limb in
a
on
bought at 39, stop 37; Jones &
Gain Or Lose On Frisco*;? Laughlin, bought at 22 V21
stop 19j/2, and Serve!, at 18;
Report On Condition Of
AMOTTiBAKER & GO.
City.
randa may be had from the firm
upon
Available On Request
Schenley Distillers Corporation
have prepared aii attractive book¬
let
containing
the
first
arti¬
cles in the series they have been
running in the "Financial Chron¬
icle.'' Copies of this booklet may
be had upon request by writing
to Mark Merit, in care of Schen¬
ley
Distillers
Corporation, 350
Fifth Avenue, New York 1, N. Y
Bank and Trust
mem¬
sibilities according to a memoran¬
Ill
r
backlog
Savoy Plaza, Inc.
2nd Jltge.
!
this col?'
ago
saying that the leaders were
showing signs of life and that;
So
Company of New
interesting possibilii
ties for investment, according to
of earnings to meet fixed charges. a memorandum issued by C. E.
At the present level in the low Unterberg & Company, 61 Broad¬
way, New York City.
Copies of
30s, y the bonds should have ap¬
this memorandum outlining the
peal.
■
- •.
situation may be had upon request
from C. E. Unterberg & Co.
tinual
living quarters for resi¬
We solicit your
outdoor
in the
The upper floors are de¬
as
Rochelle,
on
in
erty has development possibilities
200
Avenue/ running
depth of 100 feet. The
building contains ' all the usual
appointments of a club, such as a
swimming
pool,
gymnasium,
squash
court,
indoor
running
track, lounge, library and dining
rooms.
went out
umn
were
County, New York, with facilities sion, copies of Which
Seventh
a
New
located
situated
Island,
and
the
feet
land,
ers
58th
between
mortgage on 17 acres
the country clubhouse
erected thereon,
Seventh
and
cause s
rally—Important buy¬
Three weeks
the
Schram, President, and John
A.
Coleman, Chairman of the
Board. Assisting in their reception
were
William B. Haffner, Ernest
L. Jones and George R. Kantzler,
Governors of the Exchange.
The
guests visited the gallery over¬
looking the trading floor, the
Major Solvent Railroads
Attractive Situation
The
22,743.00
$61,115.20
in¬
back to
tax free in
22,743.00
$32,713.54
security for these bonds is the
following:
1: A
first
mortgage on land
owned in fee occupying the en¬
mm
is
$49,725.38
interest
Deficit
Co.,
$83,858.20
Depreciation book charges.;-.:—,
Excess
Ended
Feb.28, 1943
—■—u__.
fixed
Months
Feb. 29, 1944
interest-..-;
Fixed' interest-
prospeel
in
covering
ing still absent.
Emil
in¬
t
interest
Excess
Coburn & Middlebrook
One Wail Street, New York
minor
May 1 at
the New York Stock Exchange of
on
Years Ended Nov. 30
1943
&
is
teresting.
en-
REAL ESTATE
SECURITIES
short
as
to
4,127 as of Feb. 28, 1943.
.
Harrimaii
earn¬
In
Force.
,
'•
Dealer Inquiries
months
three
dullness
Market
By WALTER WHYTE
W. Butcher, Frank ColJindridge, Ralph Etherton, Lord
Listowely Major S. Frank1 Markand
Fresno
,
Walter Whyte
Herbert
ham,
Oakland'
Tomorrow's Markets
Parliament,
ings indicate
payment
of
the
addition, while additional
interest
and
about
membership had been decreasing $200,000
available
for
sinking
for some time,
this trend was fund purchase and retirement of
Board of Governors' room and the
halted and membership increased; bonds.
v
1 .v'
ticker department, remaining in
•in fact, as* of Feb. 29, 1944, the
'To show this" trend of earnings, the
Exchange for ah hour.
total was *4*757 as
I £OrHamJir*9400
the
a
of
|t
NVV YV)<;;
in
result
members
ham
Sacramento
Santa Barbara
Monterey
Guests of NYSE
Six
;
to
San Francisco
June
{•■
CO. 7-4150
wires
Bell
t ?l DT«¥R WBFAR
')&_«%
Private
Laboratories
facilities
li«ftKIHUK
Members New York Stock Exchange
14 Wall St., N. Y. 5
request as
the following:
"A";
Merchants
Distilling;' CrowellCollier Publishing; P. R. Mallory;
interest
Schwabacher & Co.
upon
circulars on
as
Bu^
firm
work out its
without
foreclosure
Club
the
and reorganization and the ex¬
1, 1942, efforts of the pense that would have been the
Club
to
improve its financial result of such procedure.
Fixed
condition showed results which interest
requirements amount to
were
encouraging.
The Travers 2% per annum, 1% payable June
Island property which had in pre¬ 1 and
1% Dec. 1.
1% additional
vious years shown an operating interest is
payable, if earned, on
loss was closed and subsequently Feb. 1 with
any
surplus appli¬
leased
to
the
U.
S.
Navy on cable to sinking fund until the
due
REAL
well
the
Lumber Co.; Great American In¬
April 8, 1944, the Corporate Trustee received funds which dustries; Mid-Continent Airlines;
Massachusetts Power & Light $2
together with previous receipts were sufficient to pay all current
real estate taxes and to liquidate the balance of interest arrears. preferred; Majestic Radio; Magnavox
Corp.; Brockway Motors;
In view of the fact that all arrears have been liquidated and no
Consolidated Dearborn; National
defaults now exist, the agreement of July 9, 1942, >between the
Chicago and Southern
Club and the Trustee under which the latter received the net Airlines;
Airlines; American Export Air¬
revenue each month, is no longer^
lines; Northeast Airlines.
in effect.
*
Following
Trading Markets
from
On
abled
Exchange
Open from
partner of Cooley & Co. of Hart¬
*
on
Y.
BArclay 7-2360
as
estimated
and
net
working for real bundles of stock.
of Dec. 31, 1943; also
are
fixed charges for
1944
and
important
through 1.949.
-
For the past two, or three
days I've heard of various
bids, interesting ones too, that,
existed in the market; calling
I traced
maturities and
a
So
few of these stories
discovered
that
in
(Continued on page 1835)
all
Volume
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4278
159
Savs. Loan Ass'ns And
Stitzer Joins Shields
In Instifyfiona!
!„
During
&
Weeden
Co.,
Inc.,
and
president of the Corporation Bond
and
banks
of
nation
the
the
$5,000,000 class marked up a $200,-
lias
000,000
become
associated with
& Co., 44 Wall Street,
New York City, members of the
in
increase
.....
institutional
Canadian National
Bought & Sold
.
num¬
nancing insti¬
ment.
Members
tutions moved
this
into
Keith Shearman Joins
Railways
pflugfelder, bampton & rust
fi¬
home
and
depart¬
bond
*
.•
ber of 25 thrift
New York Stock Exchange; in the
firm's
31/2sand4s
unprece-
dented
f
Boston Terminal
and
assets,
the
r
(When Issued)
over-
Traders Association of New York,
Shields
New Securities
5s, 1931—Bonds and C/Ds
cooperative
in
Railway Co.
Seaboard Air Line
savings -and
the
1943,
associations
loan
Western Pacific
Old Colony Bonds
Banks Increase Assets
Dept.
Mervyn B. Stitzer, for 14 years
'with
1823
61
top-
York
New
Stock
4!/2S, 43/4s, 5s
Exchange
New York 6
Broadway
Bell Teletype—NY 1-310
Telephone—DIgby 4-4933
ranking group
Arden Farms
according to a
J. 0. WilEisfon
i
recent tabula¬
Dept.
J. R. Williston & Co., 115
tion
iway, New York City, members of
the New York Stock Exchange,
department. Mr.
formerly manager
Shearman was
of the corporate
statistical depart¬
& Co. and
ment for Amott, Baker
prior thereto was with Ernst & Co.
John J.
Delaney Has
:
Opened ln Minneapolis
(Special to The Financial Chronicle)
MINNEAPOLIS, MINN. —John
J. Delaney has opened offices in
the Roanoke Building, to engage
in
securities business.
formerly a prin¬
general
a
Mr. Delaney was
of
cipal
Delaney,
Johnson,
Mc^
Kendrick Co.
assets
figures
as
of
31, 1943,
by the United
!has become associated with them
in their research
tions'
Rail
the
Trading Markets
RAILROAD
BONDS
Loan
conditions in scattered
Twin
City
areas.
The
A
statement
Louisville Railway
Co.
City, have prepared a
of the plan of mer¬
accompanying the
request from Adams & Peck.
older
these
Under
laws.
be
available
tractive
Lose
cr
on
new
POSSIBILITIES
Circular
will
How
on
holders
current
request
at
the
most
at¬
levels.
The New
Jersey banks will now be able to
take advantage of the relatively
favorable early prices.
•
price
by
ures
estimates
and
presented
are
without
capital set-up?
new
interesting
in
discussion
obligation
fig¬
an
sent
the
amended
re¬
Jersey invest¬
regulations. There is recog¬
and
so
far
any
as
under
are
less
rigid legal
concerned there is
recognition of improvement
until the improvement has become
Broadway, New York
apparent to
148 State St., Boston, Mass.
Telephone REctor 2-7340
Tel. CAP. 0425
N. Y.
REORGANIZATION
:
:
Teletype BS 259
Telephone HAnover 2-7914
POTENTIALITIES
a
majority of the rat¬
r
charges, and net remaining after
fixed
charges, is computed, for
the purpose
of arriving at the
legality of
Broadway, New York 5, N. Y.
So.
LaSalle
St., Chicago 4, 111.
MINNEAPOLIS &
I
ST. LOUIS RAILROAD
("Old" issues)
Minneapolis & St. Louis 5s 1934
|
Minneapolis & St. Louis 4s 1949
Minneapolis & St. Louis 5s 1962
Iowa
Central
5s
1938
Iowa
Central
4s
1951
Des Moines
Ft. Dodge 4s
&
|
1935
Frederic H. Hatch & Co.
Incorporated
63 Wall Street
Bell
New York 5, N. Y.
Teletype NY 1-897
bond, before deduc¬
a
tion of Federal income
or
excess
profits taxes. It is gratifying to
see
at long last' a realistic ap¬
proach to a large investment field
which, at least so far as regula¬
tory and legislative bodies are
concerned, had fallen into such
disrepute.
It is devoutly hoped
that this step merely marks a start
of a general change in investment
thought.
—
L. E.
SEABOARD AIR LINE
RAJ1WAT COMPANY
Specializing in
Underlying Mortgage
and
Leased Line Issues
■■■
Borregaard Is
Van Tuyl & Abbe
72
With 0. W. IcNear
(Special to The Financial
was
a
formerly with Otis & Co. and
partner in Borregaard Brothers
Chicago.
new
stock of American-La
Common
5
R. A. Ganon With
Graham, Parsons Co.
*
(Special'to The Financial Chronicle)
CHICAGO,
ILL. —Robert
A.
Canon has become associated with
Graham, Parsons & Co., 135 South
La Salle Street.
Mr. Canon was
formerly manager of the trading
Interesting Possibilities
France
YORK
Chronicle)
prior thereto was manager of the
trading
department for Baker,
Fentress & Co. In the past he was
in
WALL STREET
NEW
CHICAGO, ILL.—Louis E. Bor¬
regaard is now affiliated with
C. W. McNear & Co., 105 West
Adams
Street.
Mr.
Borregaard
Corporation
Foamite
ap¬
department of the Chicago office
of Stone & Webster and Blodget,
Inc.,,with which he was connected
for many years..
attractive according to an
analysis of the situation prepared
by Reynolds & Co., 1500 Walnut
St.,- Philadelphia, Pa., members of
pears
New
the
and
ing agencies. Under the
York
Exchange
Stock
leading
other
exchanges.
New
New
Copies of this interesting analysis
Jersey law the bonds of Atchison, may be had from Reynolds & Co.
&,
Great
upon request.
Northern,
Louisville
We wish to announce
our
Lackawanna &
Western Ry.
the removal of
offices to
York,
,
Brief resume of plan of merger
for Selected Securities of
Missouri Pacific
231
they
income available for fixed
The
legislative body,
regulatory bodies
no
120
120
invest¬
set.aside.
standing of the marginal carriers.
far as the writers knows, this
is the first example of such rec¬
restrictions
Members New York Stock Exchange
as,
actual
As
operating
BROS* & CO.
New
nition also of the improved credit
ognition by
on
quest.
SUTRO
The reorganization railroads are
not the only ones benefiting from
ment
fare
Postwar
charges
time of
MEMBERS
older
.
FRISCO ISSUES?
fixed
the
at
are
of their unseasoned nature,
cause
to
Gain
Quoted
York Stock Exchange and other
leading Security and Commodity Exchs.
.
regulations the savings banks are
ger of the New York, Lackawanna not in a position to purchase the
& Western Railway. Copies of this new high quality liens when they
interesting resume may be had are first issued and most apt, be¬
ARBITRAGE
—
New
ment and applies the .test of past
legislation (Senate Bill No. 232)
outlining
the
purpose
of the earnings to such reduced charges
to determine legality. In addition
amending act states, in part, ". . .
and especially so as to make elig¬ there;may be excluded from fixed
amortization
ible the bonds of certain railroads charges- interest or
on
debt
already called for re¬
which have passed through reor¬
ganization.
." The act permits demption, or any- debt due to ma¬
ture within six months, for the
purchase of first mortgage bonds
of a railroad company reorgan¬ payment of which funds have been
resume
upon
the
takes
the archaic New York laws.
Federal
795,504 bringing its assets of $18,750,496 as of December, 1942, to
$25,546,000 at the close of 1943.
Runner-up was the Coast Federal
Savings and Loan Association of
Los Angeles with a gain of $6,264,356, and the Carteret Savings
and Loan Association of Newark,
ized under Federal law or through
N. J., was third in line with a gain
equity receivership, provided the
of $5,174,253.
These are larger bonds were issued within five
gains than have been made in any
years preceding the investment.
of the past 15 years by individual
Under previous regulations, and
institutions.
V,
under the laws still regulating the
These three outstanding associa¬
legality of railroad bond purchases
tions were included in a total of
in New York, purchase of such
55 member institutions, each,,of
bonds
is
impossible until they
which added over $1,000,000 to. its
have been outstanding for a pe¬
asset figure of December, 1943, as
riod of years so as to establish
compared to December, 1942, and
actual earnings coverage of the
collectively added well over half
new charges.
Pro-forma earnings
of the $200,000,000.
of the company for pre-reorganization years applied to the new
Rail Situation Interesting
capitalizations are not sufficient
Adams & Peck, 63 Wall Street, to establish eligibility under the
York
Sold
recently signed by Governor Edge. Up to now
the list of railroad bonds considered as legal investments for New
and
League.
Savings and
Loan Association of Minneapolis
led the field with a gain of $6,-
brief
—-
Banks in New Jersey,
Jersey Savings Banks has been notably meagre, consisting largely of
equipment trust obligations and containing the mortgage bonds of
only three of the country's majors
:
This was an¬
carriers, Union Pacific, Pennsyl- Nashville, Nickel Plate and Read¬
nounced
b y vania
Morton Bodfish
and
Chesapeake & Ohio. ing have become eligible.
the
As a new departure from the
League's The new regulations broaden the
executive Vice-President, Morton list
materially and constructively. traditional practice of just taking
Bodfish. '
•'
4' It is
hoped that the action of New actual reported fixed-charge cov¬
Of the 185 member institutions
Jersey marks the beginning of a erage back over a specified period
over
$5,000,000 concerned in the generally more enlightened legis¬ of years, New Jersey now gives
report, 93.5% showed an increase lative attitude towards the indus¬ weight to the effects of recent ag¬
in assets, with only 6.5% remain¬
try. For some time there has been gressive debt retirement programs
ing at 1942 levels because of local particular agitation for revision of of the carriers. The new law now
ings
Bought
laws regulating railroad investments of Savings
Sav-
States
New
Chicago, Indianapolis 6-
in, and approval of,
have evinced considerable interest
men
amendments to
.
.
Common & Preferred
Railroad Securities
mem¬
associa¬
Dec.
that Keith W. Shearman
.announce
of
ber
Broad-
52 Wall Street,
System
Our telephone
New York 5
available upon request.
number has been changed to
HANOVER 2-9072
Copies available
upon
request
Mclaughlin, baird & reuss
Members New York Stock Exchange
ONE
TEL.
WALL STREET
HANOVER 2-1355
NEW
TELETYPE
specialists in rails
YORK 5
NY
1. h. rothchild &
1-1310
Teletype:
NY
1-1293
co.
Adams & Peck
63 Wall
Street, New York 5
BOwling Green 9-8120
Boston
Philadelphia
Tele. NY 1-724
Hartford
THE COMMERCIAL & FINANCIAL CHRONICLE
1824
Thursday, May 4, 1944
terest of
Post-War Financial Problems
GENERAL TELEPHONE
QUOTED
a
taxable
condition develops at a time when
Paine, Webber, Jackson & Curtis
ESTABLISHED 1879
Utility Securities
New England Power Association Merger Plan
SEC hearings were
scheduled to begin yesterday (May 3rd) on
merger-recapitalization plan of New England Power Association,
the
designed to streamline this rather complicated holding company
system. Apparently there is no issue over geographical distribution
of properties, since they are all located in New England.
However,
(which is part of the International Hydro-Electric
systehi) controls four sub-holding»
companies and has a substantial' with the SEC earlier this year.
interest in a fifth.
Because of the Under this plan, the parent and
the
company
"grandfather clause" and the re¬
quirements
relating to capital
simplification, it is necessary to
readjust system relations and a
plan was developed and filed
Subsidiaries' Minority Interest.™-,...
Heorgan, Holding Cos. Funded Debt—
42 Preferred Stock (2,594,423 shares)—.
Common Stock (5,227,368 shares)—
$81,300,000
22,100,000
-w
forma balance
shows plant account of approxi¬
mately $420,000,000, less depre¬
ciation
reserve
of
$75,000,000.
However,
a
footnote
indicates
write-ups of about $82,000,000. It
is understood that, in any even¬
tual
readjustment of plant ac¬
count, the company feels that it
would be unnecessary to write off
this
entire
amount, because of
offsetting factors.
However, the
SEC>
apt to reduce
are
,plant account as much as possible,
and
assuming that
the
entire
amount were squeezed out
(to¬
gether with some $4,000,000 of
security values in excess of pres¬
ent market)
this would reduce
common
equity to around $47,-
000,000 and
this basis the per-
on
England Power Association
Massachusetts
North Boston
R.
I.
the attainment of
In
our
basic
6
8
3
4
a predetermined schedule of
capital gains taxes which would
definitely encourage broad pri¬
able
16
20
19
24
vate investment in business enter¬
133,653,000
35
16
prise.
the
last
*
100%
100%'
_
Power
Lt.
&
Lighting Prop.
Public Service
Util,
Massachusetts
Congress
is
already
giving
thoughtful attention to such read-?
in our tax structures
as would give
a maximum stimulous to private initiative while at
the same time marking adequate
provision for the Government's
fiscal
requirements.
Business,
large and small, must know that
Even if
the entire write-off
,
(
—
Misc. Cos.
11
Indirect Subs.
4
•
...
1
'
2
(MPL)_.
(NOBO)—-(MUA)
is
deducted, the holding company's
set-up remains conservative, since
its securities will represent some
the tax formula is to be for the
60%
equity in subsidiaries' net
post-war if it is to set up its
plant accounts.
The depreciation
budgets, allocate its funds and be
reserve appears
ample, amount¬
prepared to tdig its toes in and
ing to about 16% of pro forma
get ready to go with the ringing
assets and 2%% after adjustment
of the bell for victory.
Likewise,
Tor write-offs.
individuals with an honest, whole¬
The new holding company will hearted patriotic
desire to pay
hold investments in 44 operating our taxes, which we realize must
utilities,
seven
miscellaneous remain heavy, should be permit¬
companies, and four indirect sub¬ ted to plan our own personal
sidiaries,
obtained
as
follows budgets for the post-war. It goes
from
t h e
present sub-holding without saying that the peace¬
time tax bill which
companies:
Congress pre¬
—
(RIPS)
Assoc.
table
the
above.
(NEPA)
Assoc.
of
column
Oper. Util.
New
9
Z;
1
3
"I
2
sents
to
the
nation" must be
that will preserve
one
that
Now
presents an interest¬
21
ing question, and that is whether
the tax burden which we will be
.44
obliged to carry in order to pre¬
cents a share was reported and serve the integrity of our money
1943 earnings will probably be will stifle enterprise and initia¬
lower.
However, the manage¬ tive. The Federal debt after the
—
receive
new
of old stock
shares
as
follows:
Shares of New
Present Stock
MPL
$2
would
Company
$2 Pfd. Common
pfd,
1.1
.5
$2 second pfdCommon
—
NOBO pfd.
MUA
—
1.5
—
pfd.
$2
1.0
.2
—
pfd.
.
Clas3 A
NEPA
3.0
1.0
Common
RIPS
.02
»_
1.0
Common
1.5
3.9
.5
1.3
1.0
•
New
yet
England Power has
published its calendar
report,
ended
this
■
2.0
-
6'/r, pfd
pfd.'
not
year
but for the nine months
Sept.* 30, 17 cents
a
ment estimates that in
a
"normal
war
probably will be in the neigh¬
average post-war year" gross in¬ borhood of
$275,000,000,000.
It
come would be about
$19,300,000, may be higher, but we should have
largely on the assumption that a considerable salvage offset. The
Federal taxes will be lower.
On total
post-war
Federal budget
.05
share
reported earned on the com¬
mon, crmpared with 35 cents in
the previous period.
For the cal¬
endar year 1942, with total sys¬
tem
income
of
$16,531,336, 81
was
,
market
for
Government
This is essential, to
basis, $1.15 would be earned
close
to
son
be
and
prices of manufactured goods.
The index of the former has ad¬
vanced
by 84%, the latter by only
24%. While farm prices will prob¬
ably be supported by the Govern¬
loan
policy
for
many
ment's
months after the end of the war,
they probably will undergo some
dqwnward adjustment in the pe¬
riod after reconversion. Undoubt¬
edly,
farmers anticipate such
our
correction and will regard it as
natural and wholesome market
a
a
believe
that
wartime
our
favorable
ratio
industrial
to
prices than prevailed before
And this much of
war.
industrial
in
prices
cover
such
terial
costs and
increases in
likely
raw
ma¬
in wage rates as'
not reflected in wartime
are
the
advance
an
will
price
policies will substantially ceilings.
I realize that when anyone at¬
impair the purchasing power of
the post-war dollar to the extent tempts
to
examine the future
that some of our pessimists effect. price structure, under such cir¬
cumstances
as
these, when the
The cash balances held by in¬
dividuals
the
and
after
business
by
will be very much higher
than before the war.
These cash
war
balances
not
likely to be dis¬
sipated in reckless spending such
are
as
would drive prices to infla¬
tionary levels. They will be held
as
a
backlog and their effect, I
believe, will be to encourage a
high rate of spending out of cur¬
rent income.
In short, the pros¬
pect is for a high level of con¬
sumption, fed by a high level of
production and financed from cur¬
world economy
by
the
has been deranged
destructive war in
most
history,
is running
he
able risk
wrong
It is, nevertheless, a
worth making.
conjecture
When
consider-,
of being proven
by events.
approach
we
the
pros¬
pect for post-war business profits
we
find
ourselves
seeking
to
rationalize some of the antici¬
pated trends in taxes, wages, em¬
ployment and industrial activity
to which I have referred.
Corpo¬
rate earnings will depend
in large
rent income.
degree, of course, upon the scale
You are all familiar with the of
industrial
activity when *it
questions which are being raised loses the support of war orders.
But
when
we
consider
net profits
today with respect to plans for the
utilization of Government-owned other elements besides gross busi¬
plants and for the disposal of sur¬ ness enter strongly into the situa¬
plus inventories which the Gov¬
the
at
have
will
ernment
end
of
its
hands
war.
Con¬
on
the
to
swers
these
questions
as
the
end
of
the
Government
are
agencies concerned
carefully studying the prob¬
lems
involved
ticipate
and
I
do
not
already
predicted,
when the instruments of war are
The
war.
have
I
an¬
possible.
after
As
soon
For my part, I have
no
serious
apprehension, as so
many appear to have, that the
Government
will ' operate
these
plants for any extended period
as
tion.
production
and distribution
of
goods will fall sharply for a time,
an¬
delay on
their
part in disposing of the
plants. There are many difficul¬
any unnecessary
to
no
longer needed.
But taxes on
earnings should also
corporate
fall.
to
Reference
the
Federal
Re¬
Board Index of Production,
serve
242 in March, graphi¬
indicates, the
extent
to:
which the output of America's
facilities has been expanded.
In
December,
1941, the month of
Pearl Harbor, when foreign or¬
which
was
cally
ders
considerable
were
dominant
in
American
the index stood at 176.
but
not
business,
In 1937, a
good business year on the whole,
the high point of the index was
121.
In the business peak of the
summer
of 1929 it was 114.
A decline from 242 to the low¬
of
est
these
figures—1X4—would
indeed for the months,
immediately following the end of
war production.
A decline to 176,
be
steep
the
December, 1941, figure, could
be
more
realistically
contem¬
plated, and 1941 was a good busi¬
age hourly earnings
of factory ness year for profits. Although a
sharp
reversal of the production
employees are about 50% higher
trend must be looked for at the
than in 1940. When overtime
ment.
Trading Markets
prices is 23% higher
than in June, 1940, but there has
been a very great divergence of
prices as between farm products
fiscal
$20,000,000,000. ties, however, to be overcome, and
on
the common stock, and the This would compare with a budget one of them is to see to it that
of $13,000,000,000 in the fiscal year these plants, which will necessar¬
preferred
dividend
would
be
1941.
The $20,000,000,000 of Fed¬ ily have to be sold at a loss, do
earned 1.45 times on an over¬
eral
tax
revenues
required to not compete unfairly with other
all basis,
balance the budget would compare plants which represent privatelywith revenues of about $8,000,- invested capital.
000,000 in the fiscal year of 1941.
Let us look briefly at the ques¬
Hill, Thompson Adds
If we can maintain our national tion of what will
happen to wage
Theodore Zoob has become as¬ income at $25,000,000,000 to $35,- rates after the war.
000,000,000
higher
than
it
was
in
sociated with Hill, Thompson &
The answer to this question is
1940, there is no reason why this
suggested by the favorable out¬
Co., 120 Broadway, New York
prospective tax load cannot be look
for production and employ¬
City.
will
of wholesale
development. On the other hand,
we may expect that pries of man¬
ufactured goods will probably be
from 10%
to 20%
higher than
mercial banks.
We have, how¬ they are today. This would still
leave
farm
ever, made our decision as to the
prices in a much more
th6 sanctity of gress should provide concrete
the national debt.
,
Each share
the
der
of
sheet centages; would be as indicated in justments
pro
FPC and
reservoirs
71,347,000
60,000,000
r„
,
Adj.
28%
21%
1*1,800,000
,
$380,200,000
The
be protected.
sub-holding companies will merge
objectives, Congress should pro¬
a $475,000,000 company with
vide how for the elimination, di¬ level of war-time taxation and
the following capital set-up, ac¬
rectly when the war is over, of as to methods of distributing it.
cording to the pro forma balance
the excess profits tax and of the We have also refused to resort
sheet as at March 1, 1944:
double taxation of corporate in¬ to compulsion in selling Govern¬
% of Total Capital
come.
And, as a part of this pro¬ ment obligations to the public. In
Pro Forma
gram, Congress should have avail¬ my judgment, there is little rea¬
Amount
Pro Forma
__
sharply in the last few
the rights of employers as
as those of employees must
carried without the
credit, securities and it would smooth the
the banks of this country, in con¬ way for a gradual refunding of
Government
junction with the Federal Reserve short-term
obliga¬
Board, should be formulating a tions into longer-term maturities.
There is another question with
broad and courageous credit pol¬
icy in direct aid to production which we are all concerned, and
and employment after the war, that is whether we may expect a
My fear is that the incentive to serious reduction in the purchas¬
lend will be so weakened, unless ing power of the dollar.
The in¬
this condition is ameliorated, that crease in the nation's money sup¬
we
may- find that sound
credit ply during the war has not ex¬
risks will go wanting. This must ceeded the expansion in the phys¬
ical volume of output., It is un¬
hot happen.
Our long-term private capital doubtedly true that our people
markets must likewise be opened could have borne a heavier tax
up. We must revive venture cap¬ load during the war, were it fairly
ital, As we all know, it was the distributed, and it is certainly true
pioneer spirit of the past, coupled that a higher proportion of Gov¬
with risk capital, that made this ernment borrowings could have
taken place outside of the com¬
country great. largest
into
Oper, Subsidiaries' Funded Debt.-—
Oper. Subsidiaries' Preferred Stocks..—
Oper.
well
national solidarity and it is dic¬
impairment of
tated by considerations of elemen-,
five-year Government bond, for necessary business incentive. The
example, would be reduced to a balancing of the Federal budget tary justice.
At the present time the ind^x
little less than l/10th of 1%. This would put a strong foundation un¬
our
Public
days,
(Continued from page 1821)
The net return from
SOLD
econ-j
accented
And Outlook
$2.50 Conv. Pfd.
BOUGHT
stable post-war
a
lies in the field of labort
legislation. This question has been
omy.
At the present time
aver¬
pre¬
Deep Rock Oil
Robbins & Myers common &
Colonial Ice
Company
war's end, it is reasonable to ex¬
pect that some enlargement of the
manufacture of peace, goods will
son
to believe that this gain of have occurred in advance of it,
40% in the basic hourly rate, of particularly if an interval should
stand between the successful con¬
pay will be held by labor in the
post-war period.
This indicates clusion of the conflict in Europe,
miums and shift bonuses
common
PUBLIC
preferred
common
UTILITY
Stocks and Bonds
inated,
the
29
&
Co.
BROADWAY, NEW YORK 6, N. Y.
Direct
Wire
to
Chicago
elim¬
the
increase amounts - to
about 40%. There is every rea¬
the
Gilbert J. Postley
are
of continuation of
improvement in real wages
prospect
,
and in .Asia,
*as
we
anticipate.
Whatever the cushion
when considered in relation to the
time
probable lesser advance in prices
over pre-war levels.
And may I remark here that one
of the adjustments which Congress /
should quickly make in the in¬
will
production
lessen
tinued war
taxes
and
of peace¬
may
be,
it
shock of discon¬
business.
With lower
the
the
two-year
carry¬
form
(Continued on page 1835)
back. which is a credit in
Volume 159
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4278
1825
ADVERTISEMENT
The Securities Salesman's Coiner
Consultants
Banks
to
.•
will be
Merchandising Policy
Maximum Portfolio Income
Consistent With
NOTE—From time to time, in this space,
there will appear an article which we hope
Swimming .With The Tide Is Sound
s'
•
There
Capital Exposure
to
types of "timing" operations thai are essential
The first is concerned with
two
are
successful
offering the right security at the right time.
This is fundamental
achieving investing success from the standpoint of the security
buyer.
Unless investors are successful, it is academic that no
security dealer can continue to hold his clients and develop his
-
RUMBAUGH, INC.
Government Securities Consultants
"
business.
the
same
any other product which is purchased by the
It is important, therefore, that dealers should offer
with
as
general public.
the;"types" of securities in the lines of industry that
-
has been kind enough to act as guest writer this
of other contributors, the opinions expressed by
Rumbaugh
(Mr.
As
is
his own and do not necessarily reflect the views
of the Chronicle.—Editor.)
■
built
-
.
Anyone treading upon the toes of the economists should preface
as did a well known Washington news letter publisher,
not an economist but I employ them when needed."
am
...
is
It
true,
local economist has pointed out that we saw
as one
what appeared to be the bottom of the dinner pail in 1920, when the
reserve
of the Federal Reserve banks got down to the penalty
margin.
low.
.
.
.
.
.
future
gold
of deposit liabilities.
If scarcity of gold cer¬
...
then why should the Federal Reserve banks hesi¬
prerogative and issue Federal Reserve bank
which no reserve of gold certificates is required and, if
"expedient, use these notes as lawful money reserve against member
bank deposits.
tificates threatens,
tate
their
exercise
to
notes against
.
.
RESERVE
.
SUPPORT
BANK
her
industry from the security merchandis¬
block
opportunity
available.
to
35%
least
to at
awaiting
cer¬
at least 40% of their Federal Reserve notes in
circulation and reserves of gold certificates or lawful money equal
equal
substantial
a
of such
stock
a
to
our
.
:
to
yt
buy
•
.
one
as
soon
they
as
again
are
Other industries very much in the public eye are plastics, chem¬
icals, post-war housing and building, and the whole wide field of
automotive and accessory companies.
esting
and
attractive
an
field
coming
excellent investor
It
an-
„
.
interesting investment
There
are
be
merchandis¬
angles that could be developed by alert dealers.
One might
post-war opportunity list of attractive new industry investment
financing of the war may require purchases of
'$10,000,000,000 additional Government securities by the Federal Re¬ 'opportunities that could be offered to investors through newspaper
or direct mail
advertising. While on the subject of advertising, it is
serve banks in order to bolster the reserve position of member banks
also quite evident that newspaper ads dealing with these "new indus¬
and maintain current rate and market objectives, while we are expe¬
The public is
riencing continued increase in circulation, annual loss of upwards of tries"., are especially effective as lead producers.
billion from the monetary gold stock through our foreign pur¬
chases and another billion or thereabouts to be contributed to inter¬
'one
national monetary stabilization.
the combined average of 37Vfe%
We
...
the reserve below
may see
by late 1945, but why worry. . . .
'The Federal Reserve banks will pay their penalty for deficiency and
reduce the franchise tax paid to the Treasury.
Federal Reserve
.
bank
earnings
increasing rapidly
are
creased securities acquisition.
Long-term
and
for income and
a
can
are
.
.
essential
for
.
deposits.
BANK
after
only
careful
a
capital
the
account
.
of
analysis
the
be
inexpensively prepared ,and included' in mailings and with offer¬
ing circulars.
In this connection we can just refer as an example
a
mistake for anyone to
conclude that Government securities
Use of too
many long-term bonds may temporarily embarrass the bank man¬
agement, but insolvency and inability to meet deposit liabilities due
to poor degree of portfolio flexibility is not even faintly a possi¬
...
.
.
.
"
,
In short—there is no ''dead-end" for the Federal Reserve
the
If
line
with
smoother
is right, the
company sound and the price in
outlook, why buck the tide; it's much
sailing to swim with it.
industry
and
value
future
System.
Reaction On Congressmen To Plan For
International Currency Stabilization Mixed
In the view of Senator Connally (Democrat) of Texas, an inter¬
national
conference is likely to be the fruit of current
stabilization.
Senator Connally, who is
Chairman of the Senate Foreign Relations Committee, met, on April
monetary
discussions
on
currency
21, with Secretary Morgenthau, along with his committee, and other
It
can and will purchase enough Governments to see the war financ¬
committees to hear the proposals of the technical
ing through successfully, and the post-war reconversion period as United Nations respecting the In-^
ternational Monetary. Fund,
...
If
the
have
we
an
ence
to which appeared
April 27 issue, page 1737.
whether he expected that
inflationary boom, it would be in order for
dissipate their holdings.
Then
the Treasury meets redemptions with income and excess profits
'
savings bondholders to
curtail
credit
permitted
measures
can
If
we
'overtime.
have
temporize
and
to
rise.
be
used, such
price controls.
-
.
.
.
.
.
expansion.
.
.
But
rates* will not
as
effective
and
...
a
post-war depression the price controls will work
The RFC will be
hand to make essential loans.
on
.
.
.
Asked
an in¬
would
comment
details."
the
on
Con¬
gressional reaction to the $8,000,-
000,000 international monOy stabi¬
lization1
warm
...
there may be the time.when,the dealers will ask you
to give them a firm offering of your bonds to be sold and permission
to advise the Open Market Committee of the Federal Reserve banks
just who is wisping to sell.
This may be followed by a request
"for actual proof that the funds from The liquidation are heeded for
'essential loan purposes or withdrawals.
A bid would be forth¬
coming at once if the "Managers" were satisfied that liquidation was
.
.
.
...
essential.
...
If you were making a temporary customer loan or
expressed fear of market, you would,probably be told to borrow- at
the Federal Reserve and to keep your securities. ...
If
may
the
f
*
-
contemplated liquidation of
bring
RFC
a
or
a
portfolio entails losses that
bank within a dangerous ratio of capital to deposits,
FDIC should be consulted first.
;
Chances are
.
.
that a preferred stock purchase, the eventual retirement of which
could be made with Government securities at par and interest,
would
tide the
bank
over.
.
.
.
However, headlong liquidation
brought oh through panic complex of any one or more members
•of an investment committee should be avoided regardless of any
Doughton,
Democrat,
of
North
Carolina, Chairman of the taxwriting House Ways and Means
Committee, called the project "a
.The banks will be more than amply provided with investable funds.
Of course,
Representative Robert C.
fine approach to this international
conference
next
-Interest rates will be low and the recovery background will be all set
to "catch."
of the
be
the
less disturbing
restricting credit and exercising
More
.
,
refer¬
in our
experts
step, Senator Connally
according to the Associated Press,
told reporters that "there prob¬
ably would be one. I don't care to
ternational
taxes.... Interest rates should increase to help brake the boombe
that the wisdom
has
of time and
think- is
we
been
expressed before,
and so much more eloquently than
by our feeble efforts.
ours
hundred
Seventeen
years
ago,
then, there Were alcoholic bever¬
ages in general use, and seventeen
hundred years ago too, there was
abuse. And, perhaps, seventeen
hundred years from now, research¬
ers digging deep a3 we do today—4
Will find much in
to mar-,
our era
v.el at and to deplore
But, being
we
an
ingrained optimist,
think that perhaps the future
generations will* both learn and
benefit from the fantastic goingsand unprecedented upheavals
on,
—in this present century.
MARK MERIT
of SCHENLEY
DISTILLERS CORP.
FREE-A booklet containing reprints
of earlier articles in this series will be
sent you on request. Send a post-card to
me
care
of Schenley Distillers Corp.,
350 Fifth Avenue, New York 1, N.-Y.
...
iharket depreciation threatens solvency of banks.
well.
!
.
.
illuminating to
:
oping in these industries.
"honeymoon"
SOLVENCY
It is
bility.
selection.
The. daily press is full of free advertising both editorially and
from a paid standpoint—why not use it.
Photo-offset reprints can
some¬
...
are
appreciation and are a valuable border-line maturity investment for
semi-volatile deposits.
.
.
.
Volatile deposits should be carefully
distributed in maturities up to five years.
.
These can be used
intelligently
individual
tories and Stromberg-Carlson in the electronic field, or Bendix Home
Appliance in the automatic washing machine industry, as typical of
the publicity that dealers are receiving regularly.
It all helps to
make the investing public conscious of a new trend which is devel¬
.
employ them safely if using a cross section
maturities
definitely interested^ in this subject.
Another approach" is to con¬
centrate, in one field.
Select several outstanding television, home
appliance, air-transport situations and offer them as a group or for
to the,excellent advertisements of such companies as Du Mont Labora¬
primarily savings bank
However, any com¬
savings department needs long-term bonds
of normal deposits as a guide.
Intermediate
to greatly in¬
..
bonds
investments.
company
with
.
...
Government
insurance
mercial bank
.
any way,'due
,
a
think
originate ideas and
turn back the pages
see
can
we
find it extremely
•
,
program
several good
who
moderns
phrases and arguments in logic
There are several very
traded over-the-counter that have
are
created, out of these industries.
be
We
times that
inter¬
an
investment.
appeal.
that
to ...us
seems
of
stocks that
common
Air transport is also
iron,
no
clients
•
ing
>
Successful
should add 'Would there were
because' of mbrderers;
would there were no night, be-?
cause of thieves; would there were
no
light, because of informers.' In
this manner you might destroy
everything."
'~N
j
you
acquaint¬
of his
one
just because this investor's wife had been drumming the merits of
this certain machine into his ears for several months and was eagerly
...
The Federal Reserve banks must maintain reserves of
tificates
sold
ance
outstanding Government securities in the near
at any time.
or
Still another attractive
ing standpoint is home appliances. ' One salesman of
It was then that Liberty bonds reached their all-time
But it does not follow that gold certificate reserves 'will
.
decide the destiny of
offerings.
firm has
companies, which as is now well known have done very well marketwise during the past year.
Another salesman, seeing the great public
interest in television and electronics, has concentrated in this field.
As he put it, I am not only doing a good job for my clients but I
am convinced that this is not the day and age to
try and sell "buggy
whips, plush covered ■ bibles and mohair sofas."
his remarks
"I
a
a
use
human¬
on
ity by nature. When he heard the
hue and cry on the part of reform¬
ers against "deplorable excesses;"
when he heard, "Would there were
no wine," he answered, "O folly,
O madness! When men sin you find
fault with the gifts of nature. Is it
the wine, O man, that causes this
abuse? No ft is not the wine, but
the intemperance of those who find
an evil delight in abusing it. If you
shout, 'Would there-were no wine,'
concentrated upon the sugar stocks, after having
foundation of profits for their clientele in the bonds of these
One
was
disciple of moderation in the
times'during the,, past few months we have discussed
who have been concentrating their sales
such favored* groups of securities and they have invariably
attested to the lessened sales resistance to such
true
famous
of the boons bestowed
subject with dealers
efforts in
a
straint. In other words he
currently
Several
this
By JOHN II. RUMBAUGH
week.
are
in public favor.
"Our Reporter On Governments"
Mr. Rumbaugh are
fourth century A. D. there
theologian—Bishop,
of Antioch. He was a great phi¬
losopher who believed in the power
of human beings to exercise re¬
In the
lived
second
consideration, which in a way is tied in with the
first, is based upon the premise that there are styles in securities
18, NEW YORK
NEW YORK
Americans.
Then.. .and Now
"
*
The
Fifth Avenue
500
our fellow
security merchandising.
to
JOHN H.
of interest to
This is number thirty of a series.
SCHENLEY DISTILLERS CORP., NEW YORK
ters
enthusiasm
the
to
ranged
proposall
in
quar¬
words
quote
can
from
Texas.
ft."
We
Press
Washington April
21, which also had the following
to say:
situation
sions.
As
that
may
arise
•
...
finest
Patman,
of
constructive
Democrat,
of
the
Representatives
more de¬
tailed discussion of the plan be¬
fore they could form an opinion.
Representative
Harold
Knutthey would
going
to fix gold values
they will also have the power to
tell us what our tariffs shall be.''
Senator
Abe
Demo¬
Murdock,
crat, of Utah, commented: "I am
not sure how all this would be
done
getting
without some one
pinched."
their fingers
N. Y. Analysts
At
To Hear
its
meeting on Friday, May
5, the New York Society of Secur¬
ity Analysts,
Inc. will hold a
round
discussion under
table
the
E. Ralph Sterling.
Charles Tatham, Jr. of Institution¬
al Service, Inc. will present some
ideas on the F. P. C. and the post¬
war
of
utility outlook. The meeting
as usual at 56 Broad
Republican,
of Minnesota,
Republican minority leader on the
or
Street, at 12:30 p.m.
need
son,
from1 current
is
ment
will be held
Several
said
deny, but not to my satisfaction,
that if this super-world govern¬
leadership
government has ever
echoed
Representative
taken,"
C.
Associated
the
any
Frederick
describe
an
is
"It
step
Wright
from
account
Treasury Secretary Henry
Morgenthau outlined the plan be¬
fore it became public.
of
Smith,
Republican,
Ohio:
"So
perilous to the United States that
no
which
conclusion
blunt
Representative
some
from
question." Representative Doughton presided at a conference in
Ways and Means Committee, saw
in the -plan a "super-world gov¬
ernment"
and
observed:
"They
post-war
repercus¬
'
Insurance Stocks Attractive
Huff, Geyer & Hecht, 67 Wall
Street, New York City, have re¬
cently revised circulars on Em¬
ployers Group Associates, GeneraL
Reinsurance
Corporation,
and
Standard Accident Insurance,
Company;
which
the
firm
be¬
approach the crisis in this war, portfolio managers should lieves offer attractive possibilities^
exercise every precaution to assure a maximum of earnings con¬
Copies of these circulars and an,
sistent with a reasonable degree of. exposure of the
memorandum
on,
none-too-large interesting
capital account.
It is virtually mandatory with good manage¬ American Surety Company may;
we
.
ment to have daily
mortem
over
.
.
diagnosis of "volatile; deposits rather than
the investment accouht at
some
later date.
a
post¬ be had.from Huff, GeyOr & Hecht
upon
"request.
'
,
-
.
-
THE COMMERCIAL & FINANCIAL
1826
CLEARANCE
H. H. Robertson
enced
Company
Memo
experi¬
security
an
of
clearance
Our facilities are of the best and the cost is very
MUNICIPAL
pennsylvania
moderate.
THE PENNSYLVANIA COMPANY
Insurances
For
BUCKLEY BROTHERS
Members New York Stock Exchange
1529 Walnut
Bell
Teletype
—
Municipal Bonds
1421 CHESTNUT STREET
Member
Member
PH 265
Federal
Reserve
Federal Deposit
System
Insurance Corp.
Post-War
Teletype
New York
PH 70
BOwling Green 9-8184
Philadelphia
going to be any reconversion slump in the Quaker
City if the Citizens' Council on City Planning has anything to say
about it, and it has.
The Council is composed of 64 civic, welfare
There is not
*
Insurance Stocks
Inquiries invited on local
securities
professional organizations, formed last June from groups which
supported a city ordinance creating the City Planning Commission.
Since that time it has worked in close cooperation with the comand
<$>-
mission.
cated Federal and State financ¬
H.N.NASH&CO.
Locust
1477
an
Teletype PH 257
18-point improvement
and
Philadelphia
for
program
New York Phone
HAnover 2-2280
Phone
Phila.
ing of
Philadelphia 2
1421 Chestnut Street,
the Council advo¬
week
Last
burgh Railways Co. and under¬
lying
the
city
to
perhaps
—
$200,000,000, as
is retired"—for
debt
Amer. Insulator
Pfd. Stks.
Lehigh Valley Transit 5s 1960
Construction of underground or
Widened
Citizens Utilities 3s 1955
Inc.
St., Philadelphia 2
Phone
Teletype
Pennypacker 8328
16
N. Y. Phone
CAnal 6-4265
WASHINGTON
BOSTON
Delaware
approaches
to
the
River Bridge and new
4l/2s of 1988
Delaware Pr. & Lt. Common, W. I.
Extension
Frankford
the
of
Street.
Erection
of
sewage
disposal
and
incinerating
plants;
more
made.
Philadelphia 7, Pa.
York Phone
Bell System Tel,
-
PHLA 591
WHitehall 4-2300
P.T.C.
Rate Ruling
'
—
Sold
—
Public
Utility
previously restricted
a
and
CO.
Title
Telephone
10, PA.
Rittenhouse 3940
Bell System Teletype PH 380
thejP.T.C. to
$77,000,000
Buchanan,
a
C.
member
of
the
Commission, termed the
ruling as an usurpation of
the functions of the Commission,
complaining that "decisions are
by
the
without
court
aid
of the technical staff and facilities
It is to be recalled
that the last proposed plan of re¬
consideration largely because the
drastic scaledown approved by the
Pennsylvania Public Utility Com¬
mission proved entirely indigest¬
ible to security holders.
*
Beaver Coal Corp.
Cranberry Improvement Co.
Jamison Coal & Coke Co.
Leckie
Fire
Creek
Coal
Co.
Leckie
Smokeless
Coal
Co.
Union
Improvement Co.
BOUGHT
—
SOLD
—
QUOTED
;J;
The current status of the Pitts¬
burgh Railways situation is
ered
in
a
paragraph
cov¬
taken from
Lafayette
Building
PHILADELPHIA 6/PA.
Lombard 6400
Teletype PH 240
week on an¬
10-cent dividend
a
The distribution was
stated to be out of 1943 surplus
for-
new
commonin
ratio
the
of
share for each 10 old and
by the SEC
April 20, company
on
indicated
officials
dividend
the
on
that
new
a
25-cent
stock
could
probably be paid out of earnings
in
1945, but that the future pro¬
gram of U.G.I, has not been stabil¬
ized and that the company might
decide
cash
to
distribution
make
assets.
other
or
in
Then again
before.
distribution of the bonds.
Nevertheless,
with "when, as
liberally
it might not.
change in the Administration,
the November election
should
go
Republican, might indicate a
lessening
holding
of
persecution.
company
Many a sadly de-
feathered holding company may
*
*
its
77th annual
Peoples-Pittsburgh Trust
Highlighting
report,
Co.
noted the following:
Deposits
of
commenced
discussions
Philadelphia
Company
toward
an
agreement
plating the termination of bank¬
ruptcy
proceedings, the return
to the Pittsburgh Railways Co.
of the properties operated by
possible
that
to
discount if the market
dic¬
so
A serial issue would allow
large commercial and institutional
that
maturities
the
select
to
their
suited
best
thereby
policies,
financial
securing
wider
The original Philadelphia-Cam¬
den Bridge
funding
of
present
the
advantageously.
2.70%
premises, let
and
increased
to
now
more
for
the
company
se¬
and its
pose, as
at
:fs
$
July,
1943
and
would
sold
the
be
which
$210,000 an¬
additional saving
The
of
is
issue
Should
strable.
000
each
easily
the
consist of serial
maturities
were
paid off. Thus,
hy 1951, principal would be
duced by
after
a
certain date.
Single
term
3. Straight
interest charge by $100,000.
and
a
A
serial
30-year serial issue callable
most
issue,
non-
issue,
on or
after
all maturities
a certain date.
term
issue, callable.
straight
or
a
serial issue, nonserial issue callable,
ten years from date
of issue,
both from
standpoint and
that of the underwriters and
advantageous
Commission
able
bonds as,
earnings
turities
to
a
would
increased
plus
the
charges
en¬
or
not
should
the
be
premium, is
too
sideration
post-war
saving
outlined
premium, and if
of
it
as
surplus money accumu¬
due
Whether
probably be
set-uh for
rapid retirement of
more
a
lated
.combination of serial bonds
callable,
a
terest
4. Serial
5. A
certain
issue,
re¬
$5,000,000 and annual
the
2.
issue
$1,000,-
interest charges
year,
be set up,
or
demon¬
new
2s due
wopld be decreased $20,000 each
year
as
the $1,000,000 annual
A
callable on
of
$30,000,000
on
after ten years would
namely:
saving
to
possible ways
in which the refunding issue could
1. Single term issue,
a
interest charges
m
amount
nually.
serial
bearing
possible by employing the serial
form
in
totals $7,-
many
no
The first obvious
would
annually,
115,000.
are
least
30-year
a
be
7/10s of 1 %
$6,200,000
now
that
could
coupon.
result
sup¬
would, in the writer's opinion, be
=9
issue
2%
at
than the present, it would
appear
the Reserve Fund stood
approximately
out¬
bonds
conditions
under
worse
even
unreasonable to
all
not at
present
the
due August 1,
1973, callable 1946 are uffered
to yield 2.30% to maturity for
a
2.70%
coupon.
Therefore,
$30,000,000 need be raised by a
refunding bond issue. This is
say
customers.
Currently,
standing
re¬
point by
callable
customers
limit.
out¬
an
and
reduced
be
still keep¬
ing the issue within the 30-year
another step
the
could
maturities
due
us go
of
issue
increased in later years,
that this Fund will
assume
total
a
1946, earnings appear to justify
setting it up as a 30-year serial
issue, due $1,000,000 each year.
If necessary, amounts in the early
August 1,
1973 callable August 1, 1946 at
105. By exercising the call priv¬
ilege, the Commission would be
required to raise $38,850,000 to
take care
of the 5 point call
premium. At March 31, 1944 the
Sinking
Fund
Reserve
Fund
amounted
to $7,115,000.
Since
we
are
assuming two
major
Bonds,
Assuming
$30 000,000 to be floated in Aug.,
$37,000,000.
of
than
ities.
present
The
of
consists
debt
callable.
number
Sept. 1, 1935, reached $1,000,000 due Sept. 1, 1949, and $2,000,000 in the last several matur¬
standing bonds could be effected
deposits showing a gain
in the last four years;
128%
so,
a
fine
in
in¬
above.
callable
callable
ma¬
at
a
at- how much
technical
for
this
con¬
brief
discussion.
I
the most advantageous
with
contem¬
the
entirely
demand
of
has
looking
a
tated.
appears
amounts callable serially.
curities
holders
it
$181,749,891, an increase
of
20%, setting a new all-time high;
two more branch banks acquired;
bonds and other Government
security
,
starting point,
a
There
%
Board and President:
and
Taking these two assumptions
as
sit tight.
worthwhile to
find it
taxes
income
August 1946 that only
It is not hard to believe that
a
Federal
tially at present levels.
have
Philadelphia
Company, over the signature of
Leo T. Crowley, Chairman of the
"A substantial group of cred¬
Established 1919
accounts
and money rates remain substan¬
last
198,000; resources exceeding
$200,000,000 for the first time;
purchase of $240,000,000 in war
the annual report of
itors
WM. W. FOGARTY & CO.
of developments of the
ensuing 24 hours is fraught with
more
danger than possibly ever
2. That
Improvement com¬
May 31.
organization
of
the
Pittsburgh
Railways system failed of serious
Building
PHILADELPHIA
Democratic
of the P.U.C."
Philadelphia Stock Exchange
Land
on
Thomas
Commission
Court
1923
Established
Members
of 6%
return
made
KENNEDY
ord
five-man
Quoted
perked
mon
s;<
.
designation of a par value of
only
Bought
Gas
$13.50 for the rrew shares. Quizzed
$93,000,000.
maturities
term
the long term bonds
tication
result.
s!s
United
the
valuation of
medium
at
Delaware River Joint Commission
answer.
found
on a
and
allow pricing
due
600,000 held in trust by the Penn¬
sylvania Railroad. The larger part,
new
valuation.
Maine Co.
his
unclaimed
$1,-
one
significance in
the April ruling of the State Su¬
perior Court which increased the
limit of earnings of Philadelphia
Transportation Co. to a return of
under
even
$1,500,000
on
operators particularly
and utility companies in general
favorable
field,
any
an
book
a
bonds were 4V4S, dated
Sept. 1, 1933, and maturing se¬
rially Sept. 1, 1935 to 1973, call¬
able Sept.
1, 1943, at 105.
The
maturities started with $200,000
eyes
earnings. This month stockholders
are;expected to approve the, ex¬
change of present; U. G.- Lishares
blocks.
The
Securities
and
and ifs,"
the following suggestions regard¬
ing the call and refunding of the
The Commonwealth of Pennsyl¬
vania casts covetous
nouncement of
several
recalls
conditions as they
today, politically, socially, fi¬
nancially and militarily, prognos¬
hedged
payable June 30 to holders of rec¬
playgrounds and recrea¬
heavily populated
sections, and extension of the In¬
dependence Hall" park area for
61/2%
American Investment
sis
parks,
Traction
213 So. Broad St.
months,
are
years' standing cannot
accomplished overnight but
security holders feel that a
practicable
approach has
been
tional centers in
Federal Water and Gas Common
cerstley, sunstein & co.
two
world
2.70% bonds on Aug. 1, 1946, are
represents
dividends submitted.
Delaware Avenue.
by, the owners while
This discussion is predicated on
Removal of elevated tracks on $100,000 is in shares of stock held two
necessary
assumptions,
Market Street, at least to 46th by the company as trustee.
In¬ namely:
voking
the
seven-year
escheat
1.
That
the
Street, running them underground
war,
at least the
law, the Commonwealth filed a European phase of it, is over be¬
through a Schuylkill tunnel.
Opening of the Locust Street suit in equity in the Dauphin fore 1946 and that a substantial
subway
and
its
extensions
to County Court. The court allowed increase in the amount of gasoline
the
railroad
until
May
20
to
Southwest Philadelphia.
arjd rubber for civilian use is a
bridges across the Schuylkill.
An elevated express highway on
■'
4s &
writer
time has just about run out.
many
Elevated north of Bridge
Akron, Canton & Youngstown
within
end
most
$
The
to war. More recently, one ot^
country's leading industrial¬ as the underwriters could obtain
ists predicted that the war would sufficient premium for the short
be
Sis
to be
go
Untangling an $80,000,000 snarl
off-street parking
facilities in the central city.
in
events
proves
the
the
by
future
conditions, often
forecaster.
With
other adequate
Southwest Pub. Serv. Com.
1500 Walnut
as
city are:
General Acceptance
W. H. Bell &'Co.,
listed
projects
the
Among
held
companies
probable
embarrassing pastime
published in 1938,
written by one of the then leading commentators on world
affairs,
in which an entire chapter was devoted to. an enumeration and
.exposition of the reasons why Germany could not and would not
the
for
public."
of
vital to the future progress of the
most favorable
of the securities of Pitts¬
pany
By WILLIAM F. MILLS
f
Forecasting
Com¬
Philadlphia
by
purchase
borrowing capacity
proposed projects.
Autocar Com. & Pfd.
trustees, the distribution of the
cash so made available, and the
urged the "development of some
$100,000,000
New
PHILADELPHIA
s
Philadelphia
Rittenhouse 2580
specialize in
Bank and
PH
jersey
N. Y. WH 3-7253
Phila. RIT 4488
We
new
A. Webster Dougherty &. Co.
Annuities
PHILADELPHIA
Philadelphia 2, Pa.
St.,
and Granting
Lives
on
15th and Chestnut Streets
Stock Exchange
Members Philadelphia
BONDS
Inquiries Invited
request
on
the
transactions.
Pennsylvania
Tax free in
Security,,Dealers
handling
for
department
Thursday, May 4, 1944
FACILITIES
to. Brokers .and
offer
We
CHRONICLE
First
quarter sales of Philco
Corp. are reported as 55% ahead
of the corresponding 1943 pe¬
riod. March output set a pew
high record.
(Continued
on page
1827)
the
Commission's
from
Farr Co. In New Location
Farr &
Co., members New York
A serial issue would Stock Exchange, announce the re¬
result in the naming of a lower
moval of their Offices to 120 Wall
coupon rate than would have to be
named for a long term maturity, Street, New York.
purchasers.
analysis of
an
request
Kingsley 2400
other leading
Commodity Exchanges
Neiv York and
Members of
Stock and
His
REPORTER'S
of
which
there
promise of reasonable activity
of nervousness
fortnight ago,
flurry
the
developed a
is
the
in
market in the
current month
issue
new
the
of
half
latter
opinion of those who
business
of distributing
in the
a
privately with
place
in¬
large
namely,
investors,
insurance companies and banks.
recurrence
a
of financing which
involved propose to
stitutional
REPORT
there is
roads
the
make
new
Burlington has arranged
The
through Morgan Stanley
for the direct sale of an
& Co.
issue of
collateral trust
bonds, while the Pennsylvania,
through Kuhn, Loeb & Co., pro¬
of
$30,000,000
to place $35,000,000 of the
poses
Pennsylvania
Co.,
subsidiary,
a
in the same manner.
matters
help
would
It
con¬
siderably, of course, if dealers
could
clear
their
shelves of
remain
such unsold balances as
from
With
undertakings.
new
nervous¬
having subsided consider¬
investment fraternity
the
ably,
mony
will
and taken much testi¬
the matter of competi¬
on
bidding for railroad bonds.
decision, it now appears,
must await the appointment of a
successor
to the late Joseph B.
its
But
Eastman.
Texas
The
April
the new
ahead,
Looking
issue
sizable pub¬
major
possibilities for the final fortnight
of May.
All told, the prospects
in sight would provide the market
with an aggregate of some $53,utility undertakings
lic
as
000,000 in new offerings.
announcement by President R.
ible
preferred to
dividend
stock
ginia Electric & Power Co., on
Tuesday,
invited
bids
from
underwriters for $23,000,000 of
Power
because of the manage¬
ment's feeling that earnings nor¬
3%, series D, due in 1974. This
project also involves $9,000,000
of 214 % serial notes.
Bids will
be opened May 22.
should be retained in the business
for
New Jersey
has
Power & Light Co.
registration
into
gone,
with
$9,01)0,ppO? of 30^year first mort¬
gage bonds and 30,000 shares of
\
(
$100
ferred
cumulative pre¬
value
par
which it is expected to
on
seek bids to be
.opened May 15.
investment
the
Meanwhile
world looks for West Penn Power
issue
to
for
bids
to
be
probably around May 23
of $12,500,000 first
opened
issue
an
on
call
a
mortgage, series L, 3%, to finance
the
redemption
of
an
equal
of
amount
outstanding
5s,
series
E, due Sept. 1, next.
Canadian
First
Municipal
&
Light
Power
ments
cate
with
for
an
may
be expected to
refinancing
its
out¬
develops,
consider
first
mortgage
lower cost basis.
standing
bonds
is reported that
syndicates are being
fact,
banking
it
gotten together to bid for such
new
securities
from
such
might
as
arise
undertaking.
an
upward
has
company
of
$41,000,000 of first mortgage
bonds outstanding, with an issue
of $26,500,000 of 5s falling due in
1956 and an additional $15,000,000
of 4%s, now privately held
ma¬
turing in 1965.
!'.r.VjL-
of
$9,150,000 of debentures, the city
of Edmonton becomes
the first
Canadian
The
been
the SEC.
securities
new
pected
about
of
to
enter
market since the
the U. S., money
creation
to
municipality
be
offered
ex¬
publicly
already
placed in registration with
17,
May
having
the Federal agency.
-
Maturing
annually in
May 15, 1955, and in lots of $550,000 annually from 1956 tffHf)64,
the debentures will carry poupo&s
ranging from 3 to 3%%, and will
be
in
payable at the holder's option
lawful
money
of either the
United States
or
Canada.
AIR
50th Street,
39-36
The
ding
FORCE—
Conlon, 32, of
Was
tremendous odds.
His formation was
jumped by 30
to 40 enemy
fighters that soon in¬
creased to 200. Conlon's ship was
and
Blown
20
and
out
of'
blast
mm.
of his
20
one
torn by
bul¬
shells.
American
Car
Foundry 'Motors Co. into Brill
Corp. and for the recapitalization
of the latter company will be sub¬
the
of
merger
starting
April 21. Not sure that all Philadelphians have yet returned.
dinner
the
at
Last
mitted
both
stockholders ^of
to
Present
27.
indicate
Motors
meetings
annual
simultaneous
prices
market
ACF
two-to-one ratio,
a
preferred
to
on
Brill
Corp.
preferred, but the Street is only
guessing.
*
*
*
Waldorf,
Samuel K. Phillips i Co.
Members
Philadelphia Stock Exchange
Packard Bldg., Philadelphia 2
N. Y. Phone
Teletype
PH
REctor 2-0040
375
in the Waldorf cock¬
seen
tail
lounge in the
wee
hours,
Harry Fahrig, Reynolds & Co.,
missed
long succession of trains.
a
Edmund J.
Close
Davis, Rambo, Keen,
&
Kerner,
group into
small
American-La France Foamite Corp.
Intome Conv.
District Court has
S.
U.
The
Pennsylvania
for
to
at $50 per
due
Rollins
owl's
Wallingford,
L.
Charles
&
the
at
just in
Sherry
Utility
or
approve
Com¬
disap¬
share.
SV2% Notes
Common
Stock
his
to
Sons, returned
nest
&
1956
H.
E.
greet his wife who arrived
on
the
3
p.
m.
Saturday train
from Philadelphia.
BOENNING & CO.
1606 Walnut
St., Philadelphia 3
Pennypacker 8200
Private
("Iron Man") Hutchinson,
Bros.,
was
physically
at his Philadelphia desk
Saturday morning.
A. L.
Phone
PH 30
to N.
COrtlandt
Y. C.
7-1202
Buckley
present
Brooks, W. H. Bell & Co.,
in war plant duty
Ben
doubles
who
awaiting his 38th birthday,
not
attend
but received a
Pennsylvania
while
did
account
blow-by-blow
tele¬
by
phone through late Sunday.
Germain, J. Arthur War¬
Jack
Co.'s candid
&
ner
extended until May 31 the time
ws
•.
STANY Party
Biggest
and
best, voted
100
Pennsylvanians, more or less, who
attended
the
Security
Traders
Association of New York's annual
companies in June for action at
York
Corporation
reports
the
turret
mm.
$7,408,140; total sales, $17,337,294
against $14,202,278; net income,
before income and excess profits
taxes, $1,541,570 against
by the
shell,
he
$877,864;
profit, $373,570 against $255,634; orders booked during halfnet
year, $20,001,024 against $15,294,594. Holders of old York Ice Ma¬
chinery
Corp. 7%
dissented
entitled
the
to
and merger
with
Jersey
Municipal Bonds
photographer,
Chesterfieldian
true
and New
re¬
straint, refrained from immortal¬
izing a disheveled Philadelphia
group
who confronted him several
hours
after the party.
Dolphin & Co.
Fidelity Philadelphia Trust Building
PHILADELPHIA 9
Willis, H. M. Byllesby
& Co., found J. F. Reilly's postparty
hospitality
abundantly
Telephones:
Alfred J.
Philadelphia—Pennypacker 4646
New
York—HAnover 2-9369
Bell System
Teletype—PH 299
pleasant.
to
preferred who
recapitalization
plan were found to be
value
a
of
$90
per
share, under appraisal proceed¬
ings.
Those who "went along,"
John 0,
Hopkins Go.
Retail
Is Formed In Phila.
PHILADELPHIA, PA.—Forma¬
of
tion
investment
new
a
The
announced.
formerly
&
Clark
J. N.
a
Hopkins,
G.
partner
Charles
of
ALLAN N. YOUNG & CO.
Co., M. L. Hopkins and
firm will have offices ta
Tower Building
52
123
will deal
South Broad Street, and
Lewis
PHILADELPHIA, PA.
The
Leo, a limited partner.
new
Distributors
is
partnership
John
of
comprised
firm,
Co., has been
John G. Hopkins &
Wall
NEW
Street
YORK CITY
Private Phone to New
York Office
HAnover 2-4960
in
special¬
securities,
investment
^
picked himself up, helped put out
the fire caused by exploding in¬
turned
man
to
ammunition,
his
damaged
his guns.
With
then re¬
turret to
Crouter, Bodine & Gill
we invite
one gun use¬
inquiries
1943.
Myehs, Florida, in February,
Overseas
for
five
months,
possesses
the Air Medal with three
Oak Leaf Clusters.
Philadelphia
mid
York
Exchanges
and
New
Packard Building,
NEWBURGER & HANG
Members
York and Philadelphia
New
Stock
N.
Y.
Curb
Exchanges
Exchange (Associate)
1419 Walnut Street
New
York
Be'timore
Harrisburg
Atlantic
(2)
—
City
bank stocks
Stock
Curb
and
ACTIVE
Philadelphia
TRADING
IN
—
Underlying Rail Bonds
and Stocks
Lebanon
Scranton
philadelphia
transportation co.
securities
Philadelphia
Transportation Securities
Race 7951
LOCust 6200
York
Exchange
Entering the Army on July 18,
1942, the former New York bond
won his gunner's wings at
all
philadelphia
Members
New
ers.
trader
izing in municipal bonds.
Primary Markets in
less, he nevertheless managed the
destruction of three enemy fight¬
Sgt. Conlon was formerly head
Shipstead (R., Minn.) round¬
ly assailed the latest undertaking Bond Trader for J. Arthur Warner
&
ot
Co., 120 Broadway, New York.
the
Chicago,
Burlington &
ator
plan for
in
.
again early this week when Sen¬
It is announced that a
following comparative results for
the raid over Regens- the first six months of the current
Durg, Germany, Feb. 25, according and
preceding fiscal years: Com¬
to recently published orders.
pleted sales, $10,092,600 against
The entire AAF Flying Fortress,
lets
1500 Walnut St. 6-1950
*
!j!
*
time to
*
gallantry in action while partici¬
pating
Standard Ice 2-6-1957
have an equivalent
$150 per share.
now
value of
Surmyside, has
subject of competitive bid¬ hq. has flown 23 combat missions.
Besides
the
Silver
Star,
he
for all railroad securities
brought strongly to the fore
*
*
purchase
the Silver Star for
been awarded
Fort
Needling the ICC
Fund shows
$1,179,000 to a new high.
Awarded Silver Star
amounts cendiary
$525,000 from May 15, 1948, to
of
of Wel¬
increase in
report
all
proposed
new
10,573 shares of Philadelphia &
Western Ry. Co. common stock
badly battered
are
quarter
Sgf. Bernard Conlon
ARMY
pre
However, it was raining.
prove
of which Conlon was top
turret engineer gunner, was cited
as a whole for extraordinary team¬
issue of work and
cooperation in battling
an
March
*
*
Philadelphia
Suburban
Transportation
Co.'s offer
to
15 th
old
drive from Fifth to Sixth Avenue.
*
mission
T/Sgt. Bernard J.
ferred,
of
share
shepherded a
a Central Park
ers
surrey
(no fringe) at 5 o'clock the
soliloquized: "Well, anyway,
there'll be another issue to trade following
Sunday
afternoon to
Street was
Trad¬
the
although
point,
July
arrange¬
investment syndi¬
sale
the
Probably
war.
long-term view¬
the
from
Light Co., it
&
crew,
completed
Having
.
the
after
use
sound
assets of
The
dividends
for
available
mally
lington
first and refunding bonds,
new
contem¬
is
dividend
stock
common
plated
earlier.
a
the
Mr. Page said that
shares in 1944.
in addition to those outlined here
In
issued as a
be
on
John B. Stetson Pfd.
each
for
mon
P.
Page, Jr., that the company is
planning
to
redeem
its
3,070
shares of $3 preferred stock and
to create a new issue of convert¬
in."
on
Largest of these undertakings
came
into sight when the Vir¬
Co.
brought not the expected declara¬
tion of a cash dividend but the
underwriting company offi¬
point out, numerous other
refunding prospects are in sight
Texas
PITTSBURGH
the receiving 15 shares of new corn-
of
meeting
14
board of directors of Autocar
cials
calendar shows three
Exchange
Conestoga Traction 4s 1950
(Continued from page 1826)
nevertheless disappointed..
As
out in good order.
move
extensive
held
has
tive
securities
dealers' hands
in
remain
ICC
hearings
that such unsold
feel
as
recent
the
of
some
ness
Pennsylvania Brevities
the
securities.
The
Street, Philadelphia
telephone wires to New York and Baltimore
Private
involved
attack
latest
pieces
\
Investment Securities
1518 Locust
Stock
Pittsburgh
9
Railroad.
two
Members
Pennsylvania
the
*mnd
Reed, Lear & Co.
Rambo, Keen, Close & Kerner, Inc.
STREET
Teletype PH 577
•
Common
Power Comoanv
Talon, Incorporated Common
York—72 Wall Street
New
Quincy
OUR
Unless
West Penn
Exchange
Stock
BROAD
PHILADELPHIA
1800
Telephone Kingsley
SO.
123
Y.
N.
Members
\
Warner & Swasey Common
Federal Water & Gas Common'
CHARLES CLARK & CO.
Philadelphia 2
NEW YORK CITY
Pennsylvania Telephone $2.50 Preferred
Philadelphia, Pa.
STOCK
St.,
Walnut
•
Philadelphia Transportation Preferred
Ref. 2.70s
Stromberg-Carlson Comoany Common
Reynolds g- Co.
1500
DIRECT PRIVATE WIRE
City of
FOAA/flTE CORP.
Copy gladly sent on
—
Philadelphia Transportation 3-6s due 2039
Delaware River Jt.
Com. Bridge
AMERICAN-LA FRANCE
COMMON
We Have An Active Interest In:
Offerings Wanted
prepared
We have
1827
& FINANCIAL CHRONICLE
THE COMMERCIAL
Number 4278
159
Volume
Phila.
Telephone
LOCust 6770
N.
Y.
f. J. morrissey & co.
1510
Chestnut
Rittenhouse
Telephone
HAnover 2-7900
New York
Boston
Street,
8500
Philadelphia 2
PH
279
Phone—WHitehall 4-1234
Phone—Enterprise
2050
1828
THE
COMMERCIAL & FINANCIAL CHRONICLE
Hailey Lutz's Post-War Tax
Program Subject Of Comment
Insurance & Bank Stocks
Bought—-Sold-—Quoted
ANALYZED
REVIEWED
-
COMPARED
-
Special Bulletin and Booklet Service to Dealers & Brokers
Trading daily 7
to 5
a. m.
Inquiries invited.
Royal Bank of Scotland
Incorporated by Royal Charter 1727
HEAD
Editor, Commercial and,Financial-.Chronicle:
t '
•
Dear Sir:—I read with-great
interest dhe''illuminating and con¬
structive article- (A Post-War Tax. Program),
by Professor Lutz ih
,
(P. C. T.)
p. m.
Thursday, May 4, 1944
Orders solicited.
of
CALIFORNIA
OF
has overlooked certain pertinent
cial world.
"
«
210 West 7th Si, Los Angeles
v
PRIVATE
New York
Chicago
-
TELETYPE
WIRES
San Francisco
-
A.
L.
Professor Lytz
270
L.
-
A.
national
Seattle
-
lished
280
and
serve
<&——
admits;that "the
government
to
factors, in the economic
national interest."
it
not
be
said
that
the
no
pointed out that divergencies in the
was
than
holds true for
leading New York City bank stocks, as
the accompanying tabulations will show;
same
TABLE
balance
Asked
Asked Price
12-31-42
of
Manhattan—.
: Bank
of
New
1
'
York
Bankers Trust
-
Chase
•
%
National
Chemical
_
Bank
Commercial
&
..
•Continental
Bk.
_
&
Trust
27.5
•'
'25.8
39.1
49%
13%
18%
41.1
20
-•
Rational City
York
.
!
Public
•
~
Trust
States
:.
30.3
that
observed
in
during the calendar
of
each
bank
the
18
stocks
New
under
minimum
30 Va
36%
21.2
37
year
which
much
National
95%
28.1
37%
'30.9
1,310
+ 30.3 %
0.3
+
5.3
+
more
Trust,
in
average
1943,
below
„
-•
been made by United States Trust
iwhose 1943 appreciation -was un¬
Other
average.
oddities
in
relative market moves will be
noted in the tabulation,
It is perhaps more significant
helpful, however, to
market
moves
over
extended
a
period.
Request
New
York
Stock
Exchange
5, N. Y.
two
to
years
lows of
April 1942, at.which time
many of
the bank stocks1 were
selling below their 1932 lows, and
Standard
York
59.2
compare
& Poor's
stood
at
compared with 60.3 in 1932.
somewhat
The
We there-
Table II.
comparisons
II
shown
are
Bank
of
New
'
York
....
_r
Central
Chase
Hanover
&
~
-
Trust
_
„
Bank
Corn
Exchange
First
National
Irving
New
_
-
•'
-J
Trust
I
-
-
-
.
_
_
_
_
United States Trust
'
•
are
true
that
not
devils, it is equally
all
known
and
not saints.
are
We
enough of domestic
international
that
the
monopolies
curbing
cannot
of
„
be accomplished by
Governmental action
soft words.
not
necessary
to
destroy free
DAVID J. CONCANNON
Hartford, Conn.
.
56.4.
80.7
21%
37
74.(1
95%
67.5
39%
74.2
Boston
Stock
•
.
46.3
Bank Stocks
STOCKS
-
Exchange,
U.
S.
A.
NATIONAL BANK
an¬
of EGYPT
Head, Office
office at 30 Federal Street.
with
was
Company.
time, he
had
Co.
W.
been
.
was
with
the
For
Commercial
Cairn
Register
No.
FULLY PAID CAPITAL
RESERVE FUND
National
11
years
1
Cairo
Since
F.
S.
1934
he
Moseley
&
.
£3,000,000
....
£3,000,000
LONDON
of
and 7
6
in charge of the
in-their Boston
AGENCY
King William Street, E. C.
Branches
in
principal
Towns
EGYPT and
all
the
the
in
SUDAN
office. In his
position he will assist Rodney
Brown, manager of the Boston
office
of
.the
ment firm
The
of
firm
NATIONAL BANK
99. year old. invest¬
Clark, Dodge & Co.
also
of INDIA, LIMITED
that
announces
Bankers
fice as
Head
member of the staff. Mr.
a
Johnston
was
for many years
Smith, Barney & Co. and
cently
was
as
on
leave
deputy
Branches
the
Government
Colony and
in
Uganda
Office:
26, Bishopsgate,
London, E. C.
in
India, Burma," Ceylon,
Kenya
Colony and Aden and Zanzibar
with
Subscribed Capital
more re¬
of
to
Kenya
as¬
sociated with their New York of¬
appreciation
90.5%
was
■
fared
Trust.
aid
;
.
is
of
now
over
Assume
by Con¬
Paid-Up
absence
Reserve
The
administrator
Bank
Capital
Fund—
£4,000,000
-£2,000,000
£2,200,000
conducts
every
description
banking and exchange business
of
.
the
that
two
and
Executorship!
the
first
,
period.
year
invested
$1,0.00 in each of the five stocks
which performed best, and the sec¬
tinental Bank and Trust and min¬
imum was 46.3% by United States
ond,
$1,000 in each of the five
stocks which performed the
poor¬
•'
of
interest, with the
hindsight, to See how' two
est.:
Market gains
only
are
con¬
sidered; dividends have been ig¬
hypothetical investors would have nored.-,; V %
■
*.
$5,000,INVESTED IN
,
Continental
Chase
Bank
FIVE
&
Trust
National
Manufacturers
Trust
•
;
$5,000
Rippel & Co.
1881
18 Clinton St., Newark
2, N. J,
MArket 3-3430
States
Chemical
Bank
First
INVESTED IN FIVE
&
Trust
—
$905.
864
859
•
1,807
807
$9,300
$4,300
'
,
gain of the first
investor is $1,575 greater than the
•
PERFORMERS
Chicago office at 135
Salle Street.
Market Gain
$1,463
$463
1,515
.
1,000
564
574
1,609-
better.
a
native
City, died suddenly at
home of
many years
a
he
First National
=
54.5%
gain of the second inves¬
58%
Sioux
heart attack.
For
.
609
$2,725
of
his
515
1.564
1,574
$7,725
SIOUX CITY, IOWA—Frank R.
Kirk, 1313 Douglas street,
4-27-44
or
Joseph D. Murphy, president. Mr,
Nongard makes his headquarters
86.0%
$1,000
tor,
president and director of Stifel,
Nicolaus & Co., Inc.,
according to
Frank R. Kirk Dead
-
POOREST
market'
CHICAGO, ILL. — Richard C.
Nongard, formerly assistant vicepresident, has been made vice-
South La
4-29-42
$5,000
Nongard Elected V.-P. Of
Stifel, Nicolaus & Co.
at the firm's
865
1,864
1.859
1,'QQO*
<
-—
market
1,865
1,000
1,000
1,000
N. Y. Phone—REctor 2-4383
The
Market Gain
$1,905
1,000
——1
Trust
National
Total
4-2.7-44
$1,000
$5,0,00
Trust
Irving Trust
Bankers
PERFORMERS
4-29-42
1,000
Total
United
BEST
1,000
Corn Exchange
Brooklyn Trust
All Issues Traded
throughout the
Of the OPA in New York.
war¬
.
Jersey
Established
Agency arrangements with Banks
also undertaken
BANK
J. S.
Threadneedle Street, E. C.
47;Berkeley Square, W. 1
come^ associated
with
them
as
assistant manager of their Boston
,
INSURANCE
,
that John Barnard has be¬
nounce
serving
The average two year apprecia¬
tion has. been 69,9%; maximum
r
New
29
Trusteeships
.
69.9%
and
South Wales is the oldest
largest bank in Australasia. With over
branches in all States of Australia, ill
New
Zealand,
the
Pacific
Islands;
and
London, it offers • the most complete ana
efficient
banking;
service
to
investors',
traders and travellers Interested in these
countries.'
800
,
65.7
15 %
•
.
The Bank .of New
86.4
50%
—
Let business insure
time, just as.it has in
peace
90.5
60.9
1,500
devih
own
comparatively full employment in
71.6
.
Manager
and
John R. Johnston has become
economic prac¬
51,5
.
DAVIDSON, K.B.E.,'
George Street, SYDNEY,
BOSTON, MASS.—Clark, Dodge
to
un¬
50
;
Office:
30th
—£187,413,762
& Co., members of the New York
and
this
tax1
While it is true that all business
It
Average
heavy
its
49%
■>
LONDON OFFICES:
new
men
is
"
a
67.2
316%
1,025.
with
85.9
9%
_
1—
'
27%
Trust
National
interfere
86.5
49%
1
not
burden.
39%
1,625
191
'
57.4
ALFRED
General
so doing.
Sincerely
be broken only by;
Springfield office.
action, then the Fed¬
100%
20
__
City
York
Public
.
10%
__
....
Tfust
29
——
Trust
Manufacturers
National
*
Trust
&
61.7
SIR
Head
April 17, 1944.
City
consumer
enterprise but to protect it from
99
6014
.
Commercial National
Guaranty
l
_
Bank
Continental
50%
_
National
Chemical
:
73.3 %
401
__
_
time in
no
stitute he
eral government need not and will
tices
4-27-44 Market Apprec
248
_
Trust
6,150,000 '
Aggregate
Assets
Sept., 1943
are
over
can
sound and selfish
22.%
autonomy.
decreased
courageous
have
in
•
'
Bankers
and
realize
•
local
eliminate this condi¬
can
Liability of Prop.., 8,780,000
Barnard Asst. Mgr. Of
Clark Dodge In Boston
Federal government
greater market for all, and that
vicious circle of unemploy¬
Index of New
City bank stocks
Manhattan
Brooklyn Trust
we
Fund
Reserve
to stimulate
relieve; unemploy¬
and
Reserve
£23,710,000
local powers.
of one fact: if
assured
take
y .
West
Lutz. be¬
the
the
Asked Price
,
state
markets
back
go
4-29-42
of
upon
ment
TABLE
Bank
of * the
a
Teletype—NY 1-1248-49
Trading Department)
A. Gibbs, Manager
fore
rest
and
deplore,the encroach¬
one,
1
£8,780,000
our
Mr. Barnard .has had .broad ex¬
forthright and -unselfish
If industry and finance perience in the securities field.
will keep in mind the. fact that a For 14 years after his graduation
high level of employment means from Worcester Polytechnic In¬
Telephone: BArclay 7-3500
Bell
L.
and
1817)
__i.'
tion by
action.
Laird, Bissell & Meeds
120 BROADWAY, NEW YORK
con¬
Capital
Fed¬
our
,
reduction in taxes on;
a
would help
ment
Yet
Members
Professor
(ESTABLISHED
Paid-Up
private enterprise cannot
That may be so but in 1937
I, for
un¬
changed, while the maximum ap¬
preciation thus far in 1944 has
the
on
But
not
dignity: above .'the
been used to pump life-blood into
our
economic system.
,
Available
willing, to yield
savings institutions had approxi¬
mately $69 billions of savingsidle money which could well have
Comparison and Analysis
was
remains
average,
sign?
industry
0.5%;
move
dollar
ment.
however,
declined
Chemical, whose 1943
human
i943
City,
the
government to become
financial protector unless we
depressed
conservativeness
place
City;
Stock
allow
waste
lieves that
Insurance
cannot
eral
we ..that pri¬
enterprise will shake off its
moth-worn
4.5%
We
physically, morally, and mentally,.
business
21.2%, or not
thamhalf of Brooklyn
Bankers
more
+
+ 14.5
moved' up
age.
and
"
1,500
1.4
new south wales
by exercising mil¬
What guarantee have
became
banJTof
in
out
or will
the economic reins
then the Federal government will
vate
I<&
which appreciated better than the
i
95%
39%
:
■24.8
+
that
Ltd,
"
other power
some
remember
Bank,
Australia and New Zealand
inde¬
Federal
itary, political and financial
trol.
dollars, of idle money
while millions of men,
women
*
Trust's rise.
Since December 31,
1943, the 18 stocks have further
appreciated by 4.5% on the aver¬
der
2.1
5.2
5.5
consideration
by
+
+
+
experienced.substantial apprecia¬
tion, averaging 30.3%. Maximum
appreciation was shown by Brook¬
lyn Trust, which moved up 41.2%,
and
and
1514
Table
York
stagnant
50%
,
be
4.2
7.4
29.1
28%
.
+
22.1
Average
will
6.7
of
We
Deacon's
Glyn Mills & Co.
even¬
as
times Athens started
acy, and ended
economic well-being.. Bil¬
our
lions
+
14 ¥2
.
It
316 ¥2
.
5.9
+'
,
49%
1,625
•
must look to
for
'
47%'
1,050,
we
5.3
+
+
11%
74%
^
Trust
39%
25,7
310
1-3
H-
■
50
30.6
•
+10.0
37
'
T-
National
United
47%
1,495
238
_
_
100%
47
37%
—*
31.0
37%
1,145
Manufacturers Trust
New
'99%
-
0.5
—
-
Associated Banks:
Williams
military protector of the
members of the Delian Confeder¬
to be followed by private-enter¬
prise in the future is to be judged
by their actions in the past, then
0.3
■+
'
99
ASSETS
£115,681,681
the
as
prise handle the problem of un¬
employed millions?
If the course
7.1%'
+
-
50%
41.2
50
Tr.
Guaranty Trust
401.
34,2
29 ¥2
.Corn
Irving
38.4
-
33%
,
—'
22%
39 %
_
—
Exchange,
First, national
90
75%;
Trust
National
From
12-31-43
.
1
51
,
63 %
—
Central Hanover
Price
4-27-44
25.0%
400
38
—
_
Market
,
21%
289
1
—
Brooklyn Trust
'
union.
ancient
■
■
12-31-43 \ Apprec..
17
continued, would
had
government
1
,
tually destroy the states
pendent members of a
time not due to high
hamstrung business with high
taxes.* How did private enter¬
% Change
TOTAL
the-true
preserve,
as
outlined by Professor Lutz is
conservative but not
radically so,
to use a paradox.
I agree with
his statement that the recent trend
in taxes, if
was
a
Federal .taxes;
will
between: government and
industry. J The revenue program
not
I
'
Bank
at that
was
study of
a
more
-
.
who
men
slight jab in the
•economic arm, yet it was a politi¬
market performance of fire insurance stocks are
very pronounced,
cal
and
economic necessity.
and th$t if the investor wishes to secure capital
The
appreciation closely
in line with the market he must select and
diversify with care. The "stagnation of private business"
In last week's column it
,
64 Neu) Bond Street, W.
people in capitalistic system and
they! will..restore to Washington
plight - of
ing the depression of the .'30s
Smithfield, E. C. /
Charing Cross, S.W., /
Burlington Gardens, W.-1
,
the efforts of the government dur¬
By E. A. VAN DEUSEN
1
quickly
estab¬ .centralization of power in Wash-,
the ington. : Restore the faith of the
was
Bishopsgate, E. C. 2
49
:
promote
Without wish¬
15,000,0.00
unemployed
was
of
"national interest". It is true that
This Week—Bank Stocks
3
8 West
and finan¬
time, and there will end
ing to sound "New Dealish" might
Bank and Insurance Slocks
—
throughout Scotland
LONDON OFFICES:
l!;
issue of Feb. 10,1944.
While his'predictions op the consequences
continued,Federal taxation,at, present levels have,great merit, he
your
BUTLER-HUFF & GO.
OFFICE—Edinburgh
Branches
,
;
past
14
years
was
cashier of the
Bank, and for the
had
operated
the
firm of F. R.. Kirk & Co. Invest¬
ment brokers.
jiStiimmi^
^T
.
v
---- -
■■ -
>-* ^ ;
"
> ,t 1
NS5H
»^pI1
\
-
^
...
::>••;
v
/v::;-:v.::;x|x':::'*>'
Till
*«*
«**
ill
'^.
IS HH
.'
*
«••
ft *#
r
o
»
vi
<V:
;i
**'«.** ■•
<:
V
s&S-v;.
*&
,
Upon his return to New
London,,
To get
a
■
:
"thank
while
unsolicited
letter such as the above
'
you" naturally makes us happy.
we are
vices of
our
positors at the Chase and whom we try to
■:
.
And,
•
.
feel
wrote
the Commander
this letter,
also
we
.
.
||p
|B||fflp^M
they
®J?S
1
.
f
THE
THE
NATIONAL
CITY
OF
NEW
HEAD OFFICE: Pine Street corner
LONDON—Main Office, 6 Lombard Street;
Havana
»
San Juan
*
Panama
•
may
help keep up the fighting
giving so much for all
si b*m<, sv-^
CHASE
OF
only wish that, in some degree,
spirit of those Americans
armed forces who are not de-
BANK
YORK
of Nassau
Balboa
who are
Americans.
Branches, 51 Berkeley Square; Bush House, Atdwych
Colon ^ Cristobal
is
•**■■•
our
privileged to have served those
in our
little these services
weigh in the scales of total war. It
Berkeley Square branch
us
help
■:■ '..
We know how
f«s.
who
I
■
in many ways through all our foreign branches,
delighted that the ser¬
in London impressed
York after two years' service in
the 'Chase,
American Naval Officer writes to
an
Office of Representative: Mexico City
1830
THE COMMERCIAL &
FINANCIAL CHRONICLE
Canadian Business
Non-Callable Bonds
The
4%s, 1 May 1961
yieldihg 3.12%
Wood, Gundy & Co.
Incorporated
14 Wall
Gold In Post-War
Continues To Expand
$100,000 Province of Quebec
Price 114.75 and interest,
Street, New York 5
Direct Private Wires to Toronto and Montreal
of
Bank
Canadian Securities
By BRUCE WILLIAMS
efforts
on
the
of theoretical
part
monetary
experts to dethrone gold as the basic standard of value, the yellow
metal retains the position maintained through the ages as the only
Montreal, in its
dated April 24
Governments rise and fall,
universally accepted monetary basis.
economic changes proceed apace, but gold continues serenely as the
dominant immutable
factor
in
our
economic scheme.
states, that the Dominion's exter¬
nal trade, particularly on the ex¬
port side, continues to expand. In
March, according to the bank,
domestic exports (excluding gold)
reached a value of $282,682,000,
bringing the total for the first
quarter of the year up to $751,862,000 as compared with $550,194,000 in the first three months
of last year.
Thq bank also states:
attached to gold must be
as
is
when
crisis—and
of
machine
economic
it
smoothly
serves
is
al¬
CANADIAN BONDS
the
finest
the
last
war
Cana¬
the
weather
successfully
to
MUNICIPAL
period of deepest de¬
a
pression.
California
The
enabled
us
contributed
to
measure
recently released place
production in 1943 of aluminum
in
small
no
therefore,
of
this
of
an
very
A. E. AMES & CO.
'
TWO WALL STREET
NEW YORK 5,
po¬
REctor 2-7231
NY-1-1045
sition for the duration of the war,
the inherent possibilities are al¬
ton
ritories has
pality to enter our market with a
public issue (since establishment
of
the
SEC), following on the
caused
its
cently to advance in
fashion.
shares
re¬
meteoric
a
The Minister of Mines of
Manitoba
has just described- the
gold discoveries in the Snow Lake
district north of The Pas
ing
as
"verg¬
the spectacular."
on
is the
first
Canadian munici¬
heels of the successful flotation of
the first Canadian provincial
reg¬
istered
issue
Brunswicks.
of
short-term
Serial
New
debentures
In this connection it is highly
encouraging to note that the Cana¬
dian gold mining industry is cur¬
rently taking steps to ensure ade¬
quate protection of the investor in
$9,150,000, ranging from
May 15, 1948 to 3%s of May
15, 1964, will be offered by a
group headed by the First Boston
Corporation and the Dominion Se¬
mining enterprises.
curities
it
that
Furthermore,
authoritatively stated
be
can
the
Canadian
supported
ists,
is
by
doing
Government,
leading
industrial¬
everything
in
its
to correct the unfavorable
situation caused by the antiquated
power
taxation
in this
system
country
whereby estates
liable for ex¬
are
cessive Canadian succession taxes.
It
is
anticipated
that
an
official
announcement
concerning
this
long overdue reform will be made
in the
near
totaling
3s of
This
Corporation.
departure from the
recent,
practice of financing by means of
private issues should prove of in¬
estimable
for
benefit
Canadian
country
to
the
securities
market
in
this
whole,
and it is to
be hoped that the Province of On¬
tario will resort to this method
as
a
should it be decided to refund the
$18,325,000
issue
which
matures
experienced
industry
recovery
in
some
the
as
which
During the past week the
the
of
value
was
new
$31,019,000
data
available,, also
are
increase."
an
FIG Banks Place Gebs.
offer:,
of Oct.
1, 1969,
offerings
At
99% to yield 2.28%
Taylor, Deale
64 WALL
Company
STREET, NEW YORK 5
'
WHitehall 3- J874
bid at 177%
were scarce.
offered
in
connection
Victory Loan.
continued
in
with
Internal
demand
matters,
eous
social
or
chief
reform
of
a
fiscal
nature.
The
of
money
and
/exchange.
important
These
system
and
value
stable
highly
and
every
should
be
or¬
operated with the
of performing
purpose
them well. All too often
have
systems
rocks
the
and
media
are
functions
monetary
ganized
primary
of
measure
efficient
In the
been
of
monetary
wrecked
fiscal
on
opportunism.
light of these facts I
introduce
may
recommendations
my
for post-war
monetary reconstruc¬
tion by quoting an
excerpt from
the
1931
report of the famous
Macihillan Committee of
which
consisted
of
ral level" there should be
out"
England,
14
eminent
The
Commit¬
a "tryfacto stabilization Of the
de
monetary unit at this level.
(6) The de facto stabilization in
due time should be followed by a
de jure
stabilization, but the latter
should
not
be
position
in
it
to
be
confiT
make it stick.
can
There
enough
strong
financially
dent that
(7)
adopted until the
is
government
are
proyiding the public with
common
with
of
either
functions
those of
a
three important
are
types of the gold standard, name¬
ly, the gold-coin standard, the
gold-bullion
standard
and
the
gold-exchange
standard.
These
types frequently overlap and each
of them is found in many vari¬
Each type has its own ad¬
eties.'
and
vantages
these
fiscal
disadvantages
and
political
conditions
the different countries.
should
tion
and
relative to the economic,
are
chose
adapted to its
Each
the
type
in
na¬
best
needs.
own
(8) While there should be
some
management of the gold standard,
both international ,and national,
this management should be kept
as small as possible and should be
superimposed upon a system that
is fundamentally automatic in its
more
important
object
in
the
operation.
field
of
human
technique than
The popular idea is a fallacious
that the world as a whole should
one,
that metallic-money stand¬
achieve
a
sound
and
scientific
ards like the gold standard are en¬
monetary system.
But there can
tirely automatic in their opera¬
be little or no hope of progress
tion, and that paper-money stand¬
at an early date for the monetary
ards are entirely managed and not
system of the world as a whole,
automatic at all.
All monetary
British
financiers.
said:
tee
except
of
,
"There
as
is, perhaps,
the result of
a
no
process
evolution
starting from
historic gqld standard."
the
No other kind of currency sys¬
tem in a distracted postwar world
will
quickly restore the con¬
fidence of the public as a true
gold standard. No other kind can
so
be made
simple,
so
That
easily
so
un¬
much
means
racy.Can there be
any
for
doubt what
the verdict would be if you should
put' to
popular votb in the United
a
States today the
kind
fer
of
have
to
question: In what
dollar
a
and your
would you pre¬
your
social
security
standard,
war
the
to
a
the world is to
international
what
,
kind
of
gold
in
standards
more
of
of
sence
modern
times
less managed.
or
question
the
presence
monetary
are
It is not
or
a
ab¬
management,
but rather of the extent and char¬
of
acter
the
With
management.
the gold
standard the management
that will be required should be
conducted according to certain es¬
tablished principles that will be
accepted by the world's leading
central banks under the authority
of their respective governments.
With
reference
ment
or
this
to
manage¬
non-management the fol¬
lowing general principles
be
government bonds pay¬
able, a gold-standard dollar or
managed paper-money dollar?
standard
shall
Future
will
market
continue
to
on
to
developments
be
dominantly
influenced by the general factor
of pre-invasion caution, but any
should
of
investment
beneficially
activity
affectj the
Canadian section of the matrket,
as
several recent bullish factors
have
passed unnoticed
because
the present general
investment interest.
lack W
of
a
it
The deter¬
mination of the size of
monetary
unit,
is
such
a
is
highly prized
so
great
a
nation's
affected
public
with
should
followed:
There should be
restrictions
no
the
holding by the public of
gold coin or gold bullion within
the country, nor, under the goldcoin standard, on the free coin¬
age of bullion at the mint or the
on
as
a
preroga¬
interference. If compulsory inter¬
ference from outside is undertak¬
en
it is
very
not
national trade and finance and to
the smooth and orderly function¬
ing of
interest and
tive of sovereignty that it is im¬
practicable to subject it to outside
fol¬
lowing increasing discussion
the
prospects of the return
parity of the Canadian dollar.
renewal
&
were
only other notable feature
was
the placing of an important
block of provincial issues which
2'4s, due April 15,1948
Payable in U. S. and Canadian funds
kept simple and to func¬
tion efficiently and not at cross
purposes
the monetary
system
should be kept free from extran¬
from them whatever.:
1, 1969, duly materialized and the
outstanding National issues were
consequently in demand.
The 5s
issues
Province of New Brunswick
be
what, for want of a better
be called their "natu¬
name, may
successful
the Sixth
$100,000
To
down to
gold
plan to have?
melting down of gold coin.
The
That is a large question and all I
offering
of
an
exportation and importation of
issue of debenture for the Fed¬ may hope to do within the limits
gold should be free from all trade
eral
Intermediate
Credit
Banks of my short testimony today is to
restrictions and tariffs. Under such
was concluded April 18 by Charles
state briefly a few general prin¬
conditions gold will enjoy a very
R. Dunn, New York fiscal agent ciples.
high degree of fluidity in its
for the banks. The financing con¬
The
following
11
principles
movements, both national and in¬
sisted of $31,460,000 %% consoli¬ should be adopted:
ternational, and the value of the
dated debentures,
(1) The subject is an interna¬
dated May 1,
gold monetary unit in each gold1944 and due Jan. 2, 1945.
The tional one, and its satisfactory so¬ standard
country will be held very
issue was placed at par. Proceeds, lution demands a high degree of
close to that of its gold equivalent
together with other cash funds international cooperation, which in
every
other
gold-standard
was used to retire $41,010,000 de¬
should begin at once and continue
country'and to the value of gold
bentures due May 1, 1944. As of indefinitely.
It
should
include bullion in the free
markets of the
May 1, 1944 the total amount of small nations as well as large ones world. ' There should be a
high
debentures outstanding was $284,- although a few large nations may
degree of freedom in the inter¬
well take the initiative.
435,000.
national movement of goods.
The
(2) The monetary unit should gold standard can function over
be
established in each country,
high
tariff
barriers
as it has many
ket remained quiet but firm. The
after conference with other coun¬ times in the
past, but high tariff
anticipated call for payment of
tries, but without any compulsion barriers are obstacles to inter¬
the Canadian National 5s of July
A
were
We
a long, common
experience.
The people distrust
what they do not understand.
If after the
The
mar-
de¬
a
velopment out of
return
but
Sept. 1, next.
future.
be
it
erations. The construction
ready
properties in the North West Ter¬
and
be
end
the monetary system of a democ-
showed
discernible.
Even though
Another
drilling has been on a compara¬
interesting Canadian
tively small scale the tremendous financial
development has
just
promise of the Giant Yellowknife taken place. The City of Edmon¬
simple
should
this
derstood.
as
compared with $16,229,000 in
February
and
$11,110,000
in
March, 1943.
The output of flour
in February, the latest month for
N. Y.
be
March increased their scale of op¬
contracts awarded
play ah important part in the
post-war economy. In spite of the
relegation of the gold-mining in¬
relatively minor
packing plants continue
busy and the cotton mills in
March
can
a
an
wood¬
"The
INCORPORATED
dustry to
of
winter..
frequently mentioned,
Canadian North-West
great
number
ger
commerce.
as
industries,
forestry
in the
precious
expansion of world
program of
year ago.
the
March, 1943, has resulted in a lar¬
cut of wood during the past
CANADIAN STOCKS
confidence
monetary
a
cutters, estimated in March to be
9,000, or 37%, higher than in
and is also indispensable in any
the
non-fer¬
data
increase
African
In the present
scheme,
supply
Thus,
of
source
and
metal is essential in the preser¬
vation
supply
the
be
to
metals for the United Nations
"In
period of world¬
a
wide prosperity.
ample
continues
rous
than
CORPORATION
withstand
to
the great discoveries of
human
,
duction continues in lower figures
gold
the strain of the Civil War and
„
was
$9,450,000,000. He explained
492,000 tons, of nickel at 102,tons, and of zinc at 300,000
tons.
The gold mines
are
still
handicapped by the inadequacy
of their working forces and pro¬
PROVINCIAL
gold industry enabled the
Dominion
gold
date
to
up
con¬
war
000
After the
strikes
about
the
at
GOVERNMENT
lubricant.
dian
of
awarded
main
working
as
value
"Canada
clearly demonstrated in pe¬
riods
total
tracts
accepted
which
instinct
basic
a
ways
Supply, 'speaking in Parliament
on March 21, estimated the value
of
Canada's .production
of war
materials
during the fiscal year
1943-44 at $3,435,000,000, an in¬
crease
of $535,000,000
over
the
figure for 1942-43, and said that
curtailed, the expansion of others
is planned.
of affairs will continue. The value
standard
suspicion.
To
above
should
that, while the output of certain
types of war materials is being
Unless
human
nature
can
be^>
fundamentally changed, this state
the
wife,
business summary
the
Monetary Plans
(Continued from page 1818)
"The Minister of Munitions and
Despite repeated
Thursday, May 4, 1944
likely to be effective
long.
monetary standard.
any
this
On
confusion
much
the
subject there has been
popular
moves
in international trade only
"to pay balances."
fact, gold
damental
moves
As
moves
that
—
matter of
a
for the
reasons
commodity
(3) War time inflationary poli¬
growing out of
notion
that
gold
same
fun¬
other
to seek the
any
best market. It goes abroad when¬
cies should be discontinued at the
ever
earliest
possible date after the
armistice, and everything possible
should be done by the government
cient margin to yield an attractive
profit
to
penses
inspire confidence in the
cur¬
rency.
(4)
early
it
it is worth abroad
worth
is
at
home
more
by
than
suffi¬
a
after paying all the ex¬
of its exportation. Its im¬
from abroad is merely
portation
Measures
should
be
taken
providing for the ultimate
discontinuance
of
all
artificial
the other side of the
As
a
general
same
shield.
proposition,
omitting such things
as
and
gifts, and
price and exchange controls, but losses by shin-wreck, bankruptcy,
the process of discontinuing them fraud and theft, a nation's total
should be put into effect by cau¬
exports—visible and invisibleare
tiously measured steps.
equal to its total imports(5) After prices have settled visible and invisible—when view-*
in-countries whhre there is
substantial period of ".
were
not true a no. central bank of issue, one
should be established.
." In
nation would either be
getting
the interest of an efficient admin¬
goods from abroad free or giving
away goods to foreigners.
If, for istration of the gold standard, the
central bank should have the ex¬
example, a country is normally
clusive right of note issue, and
exporting 50 different commodi¬
ties (including gold from time to the gold reserve of the nation
time), and is normally importing should be centralized in the bank.
ed
a
over
If
time.
1831
THE COMMERCIAL &.FINANCIAL CHRONICLE
Number 4278
tVolume 159
.
Edmonton, Can., Issue
.
this
Mutual Funds
.
The
commodities (includ¬
60 different
other will be in
and the 60 on the
balance.
The
destroyed
if
will
be
commodity
on
balance
any_
is
true of the commodity
either side is omitted and this
more
no
gold than of any other
in the balance sheet.
While
nation's
nor¬
of all commodi¬
very
foreign
there that it
a
applies
this
and
prices,
said in
exploitation than by
exploitation for profit by private
left
.
the
to
had
When a
sell."
directors of the central bank. The
exhausted
be
country
board
should
gold standard loses an undue
amount of its gold it is usually
not because the
gold has been
on
have
should
nothing
country government
not
domination.
under
theory
pulled out by foreigners but be¬
cause it has been pushed out by
inflationary
fiscal
government
it
as
not
is
of
much
so
abstract
monetary
home.
There should be interconvertibility on demand of all kinds
of non-gold money with gold coin,
(9)
standard
will
national
bank
call
for
with
central banks of all
an
inter¬
which
the
gold-standard
countries should be affiliated and
which
to
they should
the necessary capital.
contribute
gold bars or gold drafts, as the
case may be.
Such convertibility
The
functions
of
this
bank
serves the gold standard in three
should be exclusively of a mone¬
different,
but
closely
related,
tary and banking character.
It
ways. First, it keeps all the dif¬
ferent kinds of money, e.
g.,
coin, bank notes, fiduciary
coins and minor
should be
gold
a
tral banks.
silver
central bank of
cen¬
long-time loans to its mem¬
ber banks nor otherwise enter the
with each other.
It does so by
field
of fiscal operation.
Such
providing the machinery by which activities
may be very important
excessive issues of any particular
in international affairs, but they
kind of money are promptly with¬
belong to agencies other than the
drawn from circulation and defi¬
international central bank.
ciencies in the circulation of any
The principal functions of this
particular kind
of money are bank should be: (a) to serve as
made up. Second, the convertibil¬
art
international
clearing house
ity into gold on demand, by creat¬ for the member central banks,
ing confidence in the currency,
(b) To hold part of the reserve
increases its acceptability by the
of
public in times of low public con¬
fidence,
and
thereby checks
"flights from the dollar" and
central
member
the
banks,
(e) To collect, organize and help
members
interpret for" its
national
credit,
the
resulting enlargement of the cur¬
financial
other
Registra¬
the
ninth
the
largest
city in Canada, will employ the
proceeds of the impending sale to
retire on Aug. 1 next, $8,718,653.80
consolidated
first
Feb. 1,
The
debentures
due
debentures
will
ma¬
annually in amounts of $525,000 from May 15, 1948 to May 15,
1955 and in amounts of $550,000
ture
17, 1956 to May 15,
will range from 3%
3%%. The terms of the offer¬
from
May
monetary
inter¬
and
information,
(d)
supply which would other¬
To serve as a meeting place for
wise'be caused by the increasing
conferences, formal and informal,
velocities of circulation.
Third,
of member bank officials—a func¬
the third function that converti¬
tion which the existing Bank of
bility performs is fundamentally International
Settlements
has
the most important one.
It is the
usefully performed.
function of maintaining the gold
rency
ing will be announced at a later
date. The new debentures will be
payable at the holders' option in
lawful
money
of
the
United
States or lawful money of Canada.
with The First Bos¬
Corporation and The Domin¬
Corporation will be
Co., Incorpor¬
Under
conditions
of
currency
portation, the central bank must
always be in a position to give out
gold freely for exportation as
long as required to relieve the
country of its relatively redundant
currency and to force
exchange
rates below the gold-export point,
thereby
bringing the country's
price level and discount rates back
more nearly in equilibrium with
those of the rest of the world.
Obviously,
a
country's normal
is sound
tion
gold ex¬
rehabilitation.
v
the
war
monetary
should
subject,
the recommendation of the Brus¬
sels. International Conference of
1920, was sound in saying that,
The
principal
of
broad
fund
We, through the
fund,
can
accomplish
many
things that we could not obtain
as an unorganized group.
in
"Investors
owe
mutual
some
help
I
am
implement
the
Stock Exchange, it was an¬
Nominating Com¬
mittee which posted its nominees
for all offices to be filled at the
election
of
the
Exchange
1944.
The following were nominated
to serve threq years as members
be held
to
Monday, June 5,
of the Board
legislation
mutual
strength.
which
J. J.
of Governors:
funds
mutual
obtain
"We
receive
gall; Alfred W. Mansfield/Thom¬
son
&
McKinnon; Frederick R.
which
and George E. Hacht-
an
experienced
supervision
that
interest in
curities
hundred
a
over
This
fund.
the
in
se¬
saves
tremendous amount of detail
a
if
result
would
which
presented
&
M.
Horn-
Weeks, Chairman; Leo
Apgar, Apgar, Daniels & Co.;
William A.
Fuller & Co.;* John J. Griffin and
Henry L. Vehmeyer.
William
A.
had
we
to
dividend checks or
coupons
four times
a
100
"Finally,
I
fund
to
that
'peace
through
month.
hospital in about
INVESTMENT
TRUST
a
roads
the
were
their
(Continued
the
that
result
earned
fixed
1834)
page
on
rail¬
charges
SHARES
A Class of Group Securities, Inc.
Prospectus
on
Request
0 DISTRIBUTORS
GROUP,
Incorporated
yore
63 wall street—new
the
than
harder
is
a
Send for
know
to
ever
Prospectus
just what individual securities or
what industries will fare best in
the remaining
and the
months of the war
post-war period."
Republic
Investors
its
of
Keynotes
of
issue
rent
other
discussions
to
an¬
interesting series
on
This
taxes.
of
Fund, Inc.
Distributing Agent
Keystone Corp. devotes the cur¬
W. R. BULL MANAGEMENT CO. Inc.
Exchange Place, New York
40
memo¬
randum is entitled "Work Started
Relief"
Tax
on
and
it
the
lists
taken in the current drive
to make a comprehensive revision
steps
Federal taxes.
ijc
$
of
assets
Selected
$
reports
Fund
Putnam
George
$8,843,000
as
of
March
31, 1944, compared with
$7,965,000 at the beginning of the
quarter.
Total market value of
securities
owned
on
approximately
was
excess
of
An
cost.
March
31
$655,000
in
interesting
american
shares
lii
%
INC.
■M
tMtasa
aspect of the report was a chart
showing
the
increasing
1939, this category has risen
25% as of March 31, 1944.
to
may
be obtained
from authorized
dealers,
or
SELECTED INVESTMENTS CO.
135
*
*
Prospectus
percen¬
tage of the funds invested in rail
securities.
From a low of 10% in
South La
Salle Street
CHICAGO
Distributors Group has
a
published
study entitled, "Vital Statistics
In the
of the Railroad Industry."
covering letter two questions are
posed:
What
1.
IS
fundamental
the
Keystone
position of the railroads today?
Trading Markets
Kelly Convalescing
the
—with
charges
*
16.5%
Custodian Funds
Issues
Kelly,
leave
fixed
down
the
believe
offers
Fuller,
kind
MOINES, IOWA —James
resident manager for
Sincere and Company, has been
in Mercy Hospital, Des Moines, for
the past six weeks suffering from
a broken hip. He reports that he
is getting along nicely and expects
total
(c)
year.
Nominating
blower
operating
revenues
up 44.5%;
We
even
.?
Committee
today's reports
1943,
1929—
STEEL
quarterly dividends in
though we have
our
check
net
consists of Paul B. Skinner,
the year
for
(b) income available for fixed
charges was up 77.1%;
have
would otherwise be difficult.
dick, Jr.; Harry C. Daniels, Apgar,
& Co.; Chancellor Dou-
Daniels
DES
J.
were
important is the free¬
management
of all
Riter & Co.;
that
(a) total
gained by working together,
E.
Barnes,
Wayne,
Hummer & Co.; Joseph P. Brown;
Walter- J. Buhler; John R. BurGeorge
reorganization which
advocating for the post-war
answering these questions.
reveals
in comparison with
cago
such resolution at this time
of monetary
toward
(covering all Class I
should go a long way
of
diversified
portfolio.
This is very comfort¬
ing in these difficult days when
M.
rail-
funds
much favorable
their
The study
Railroads)
It
opportunities
discount
dom from unfriendly legislation
nounced by the
annual
In
bonds?
have
all
action, and does not
purport to offer a final solution
of the problem.
The adoption of
tuations in business.
(10)
The proposed Re¬
shareholders
order to ob¬
emergency
world,
authority in each country
be a central bank. On this
ends.
solution, I take it, is, intended to
the way for such prompt
gold exchange, of any currency
in circulation that may be ren¬
dered excessive by the usual fluc¬
emergencies.
pre¬
prepare
would
for extraordinary
should be
pared to act promptly the moment
gold reserve should be sufficient
to
provide for the absorption,
through, redemption in gold or
In addition
it should be large enough to af¬
ford a reasonable margin of safety
It
this
in
'mutual'
Payne, partner of Webster, March
& Co., was nominated to serve a
second term as Chairman of the
Board of Governors of the Chi¬
The
large responsibility in the great
7,000
there
rights.
it
Harry
fund
our
advantages
investors
Chicago Stock Exch.
—
in
Welling¬
investment
diversification; continuous income
and experienced management. We
mind'
The United States will have
post-war task of world monetary
the
tain
Chairman Of Govs. Of
ILL.
mean
together in
interest
Payne Renominated As
mutual fund,
by 'mu¬
a
mutual
a
nearly
deposit
mann.
a
is
because
banded
us
assigned to the Board are proper
ones.
fund
an
and McLeod, Young &
as
we
road
fund such
a
I would say that
Fund
ton
ated; Smith, Barney & Co.; A. E.
Ames & Co., Inc.; Wood, Gundy &
of the Resolu¬
and that the duties
tual?'
one
Weir.
speak of
we
as
Wellington
just what do
Harriman Ripley &
Tuerk, Cruttenden & Co.
'With reference to the Joint Res¬
of the monetary unit by
John J. Bryant, Jr. was no¬
olution
(H.
J.
Res.
226)
now
continually adjusting the currency
under consideration by this Com¬ minated for chairman of the 1945
supply to the changing currency
Nominating Committee. Other no¬
demand. Here, a nation's gold re¬ mittee, I would say without pass¬
minations for the committee were:
ing judgment on the details of the
serve functions as a buffer fund
Resolution or on the make-up of gidney L. Castle, Carter H. Har¬
or, as
it is cometimes called, a
Co.; M. Ralph Cleary,
the Board of Governors, that I rison &
regulator fund.
Cleary & Co.; Carl J. Easterberg,
redundancy and resulting
"When
ion Securities
parity
believe the purpose
his letter to shareholders:
Equally
CHICAGO,
that
quarter.
achieved the best
companies
company's progress, Walter«>
—
Morgan, President, inserts the'
2. Do
real
following interesting comment in
STILL exist in
to
Inc.
first
L.
to
Co.,
evident
increasingly
excellent
an
number of
a
is
it
the
on
1964. Coupons
Associated
hand
enjoyed
group
In this category is Wellington Fund with assets of $11,589,963 at
March 31, an increase of $1,179,000 since January.
After, reporting
equal
1967.
new
to
come
a
as
this period
during
are
1.
May
on.
The bank should not
make
coins, at a parity
*
Edmonton,
ton
gold
international
(11) An
Commission.
realistic
very
monetary history.
at
policies
This is
of
lesson
but
representation
be
a
a
substantial
a
the
of
Exchange
has
trouble
The
Viscount Goschen once
interests. The nation's monetary
speaking of England's po¬
of obtaining authority should be the board of
would (only
gold
when
well recog¬
majority
the great
needs.
under¬
since
Securities and
formation
SEC
ernmental
"Our powers
sition:
.
so
be
tion statement was filed with
been caused much oftener by gov¬
as
fully to gold as to any other com¬
modity.
and
market has credit suspended gold payments, it has
been
done
under
the
political
can draw upon for
pressure of governments to meet
in that market at the
ket
in
be
re¬
to
United States
the
in
taken
where central banks have
cases
purchase of any goods for sale
fiscal
current mar¬
the
a
borrowing
nicipal
;a
effort to earn
modest return on
little
that
nized
of
country that has sold goods
A
with
primary
public' welfare
the
of that capital, it is not
balance" in any true sense
term.
in
to
with
profits above
It does not move "to pay a
ties.
gard
that
should
bank
central
Corp.
will mark the first Canadian mu¬
denies
one
administered
mally moves very easily in inter¬
national trade because it is the
most marketable
no
Boston
figures
funds
Quarter
three months' growth in their history.
A banking group
First
American countries.
commodity
Gold
fact,
SEC Was Formed
board of directors on
the
As
mutual
Borrowing In U. S. Since
headed by the
and the Do¬
which there should be representa¬
minion Securities Corp. is sched¬
tives of the government, represen¬
uled to make public offering on
tatives of the member banks and
or about May 17 of $9,150,000 Ed-*
representatives of business, as is
monton, Alberta, debentures. This
the
situation
in
many
South
trolled by a
ing gold from time to time), the
50 commodities on the one side
A Good First
Initial Canadian Municipal
should be con¬
bank
central
To Reach Market Soon
Certificates of
NATIONAL
investing their capital as
B-1,2,3 and 4 in bonds
Series
.
Prospectuses upon request
K-l, 2 in Preferred Stocks
National Securities &
Series
S-JU-2, 3, 4 in Common
■
120
15
Exchange PI,
8Ergeir» 4-0670
Jersey City 2, N. J.
Teletype 4CY 164
follows:
Cpi) T1?S
Securities Series
^
Research Corporation
J. Arthur Warner & Co.
Participation in
Trust Funds
LOS
BROADWAY,
NEW
ANGELES, 634 S.
BOSTON,
YORK,
(5)
Spring: St.,
(14)
(9)
18 Post Office Square
CHICAGO, 208 So.
La Salle St.
<4)
Stocks
Prospectus may be obtained from
your local investment deale* or
The Keystone Corp. of
50 CONGRESS
Boston
STREET, BOSTON,
MASS*
t
t,
1832
:
THE COMMERCIAL & FINANCIAL CHRONICLE
The
tioned.
The picture in the which reads "The fund will be
proposal of the experts with entitled at its option with a
respect to the apportionment view to preventing a partic¬
Keynes-Moigenthan Plan As Revised
By The Experts Of Thirty Nations
of
125% of its quota in gold, if it
be made, had the gold, but if it didn't
in the gold value of member have much gold, it could put
currencies,
provided every in only 10 % of the gold it had
member country having 10% and obtain the foreign ex¬
or more of the aggregate change
it needed from the on the basis of our experience
fund up to a multiple of many
of 1919, permit a very lively
quotas approves."
times the gold it had put in.
This means that the Presi¬
export boom, pleasing to
It could import food and
dent of the United States,
short-sighted people, to deother things needed by its
develop in the United States
through his representative in
the international fund, could people as long as this foreign and to continue until the dol¬
make an agreement changing exchange lasts, and it could lars and gold in the fund grew
the politically un¬ scarce.
the gold content of the dollar put off
change
may
consent of Con¬ pleasant day of drastic in¬
ternal financial and
currency
gress—a power which the
reform until double the quota
Congress took away from the
is exhausted. Meanwhile the
Executive
in
1943, and a
without the
Apportionment of Scarce
At this stage, when dollars
and partic¬ and
power which the Executive
gold in' the fund grow
ularly the United States, ex¬ scarce, we run into one of the
should never have.
to weak countries,
There has been some sug¬ porting
very imperfectly thought out
could have a boom, ending
gestion that the dropping of
aspects of the new plan. The
Bancor and Unitas, and the violently when the borrowing
plan provides that when it be¬
frequent mention of gold power of the weak countries comes evident to the fund
We
exhausted.
plan a gold
peat
the
post-war
plan. This is wholly
is
make the revised
erroneous.
("fund")
The
new
bank
have
must
some!
1919-20
and
violent
post-war
then
1920-21.
could
boom
have
crisis
re¬
.
stabilization and with¬
sources
demand
the
that
for
a
par¬
of the fund at the out¬
countries
provided;,
of
foreign exchange offered would turn to us to borrow
exchange market orig¬ more to set the
thing going
inates, not in the importing
again. Now, how- would the
country, but in the exporting fund borrow? The
original
country. The rationing of dol¬ version of the
Morgenthau
lars would
be, first of all, a plan
gave the fund authority
rationing of dollars to Amer¬ "to, issue its own obligations
ican exporters of
goods. The and to discount or offer them
inauguration of the plan for sale in member countries"
would
encourage
American (III, 1). And the plan author*
con¬
fidence, drawing bills in
francs, in drachmae, in lire,
and in sterling with confi¬
dence, sending out goods to¬
day and drawing bills payable
in
ninety days in the foreign
currencies.
And
then
denly the time would
sud¬
come
out
and
propose
an
longer available.
a
finances
weak country of the weak countries would
were
out of be elements of weakness
a
free foreign exchange
market in the dollar in those
countries.
Will
Russia
put
her currency
into
the
fund, and allow the fund to draw checks
state
bank
of
Russia?
(III, 12) of different countries
which had
come
-
into its hands:
as
part of the original sub-.
Scriptions of the quotas of the
The
new
I
nothing about
any
;
which
?
different countries.
plan
of
says
these
would
procedures
ordinarily get
invest*.
;
accounts with any
banks exr>
cept the central banks of dif- i
ference. countries.
would
thus
The-fund/
naturally
deal a
with the Federal Reserve:
banks
of
the
United
States,
>»
with his assets in the form of
We might, of course, be sufilliquid blocked foreign cur¬ ficiently enlightened by an'
rencies, was a bankrupt un¬ experience of this sort so that :
able to pay his own debts. we would
say, "No more
the corollary has not
There would be indeed a fixed
credit, the plan is no good,
envisaged by the experts
exchange rate, but there we will take our losses now1
the thirty nations who
would be no exchange mar¬ and make our
readjustments."
But
been
of
drafted this report, or at all
events it has not been men¬
ket.
Of
course
"black
mar¬
But if
history and experience J
are
to tell us anything^ we
by them. What would would
do not need to go through this
we then be
obliged to do in prevent such markets in
peace experience again.
We went
the foreign exchange markets
time only if we had a Secre¬
through it in 1919 and 1920
of the United States as we
tary of the Treasury with the and we paid for it in 1920
ourselves deal in the curren¬
sagacity of Dr. Schacht, and and 1921. I have elaborated
kets"
tioned
cies
of
these
weaker
coun¬
a
in
foreign exchange
mitigate this. We could
President
the
with
power these episodes in my address
fund, and ruthlessness of Hitler.
of May 11, 1943, and again in
are Under
obligation (IX, Thus would come the first
my address before the Cham¬
not to allow exchange
great jolt, the first great vio¬ ber of Commerce of the State
tries?
If
we
enter the
have let it
The Creation of New Blocked
are
the
,
,
stroys
news
on
,
bonds
bring in the foreign exchange namely, from the Federal Re^ i
dollars must ration out
\
market, and liquidate his own serve banks.
supplies. It is by this
debtsj-' But with this new ar¬
Whatever way it borrowed,^ *
method that the fund would
rangement, designed to en¬ however, the objective would '
prevent the depreciation of
the weaker currencies in courage exports and promis¬ be to free the newly blocked
ing stablized exchange rates, foreign exchanges, and to per- '
terms
of
the
dollar.
This
he might suddenly find that mit a new
means
cycle of exports to
price-fixing of dollars, he had no
market at all, that
and rationing of dollars as
begin against dollars pro-»
his foreign currencies were
vided by credit in the United
part of the price-fixing, in all
!'
the weaker countries. It de¬ blocked, and that he himself, States.
money market rather than of strength to the
This would
mean
that
disorder, whose gov¬ fund, and this would be true
ernment, taxing inadequately of sterling as well as the Con¬ American exporters, holding
and avoiding internal fund¬ tinental currencies unless
sterling, francs, lire, drach¬
ing loans, was borrowing England makes a drastic mae, and other weak curren¬
from the central bank of is¬
change in her currency pol¬ cies as a result ofA exports to
sue to meet its
expenses, to icy.
The really effective as¬ these countries would sudcontinue in this course with¬ sets of the fund would be the
dency find
them blocked.
out concern for the
standing
They could not sell them at
3—These figures for quotas of different
of its
a
discount.
currency in the interna¬ countries
tentative,
and
are
taken
They could sell
from the
by John MacCormac
tional
them only at the fixed rate,
exchanges, up to 200% in the New Yorkstory
Times of April 22, 1944."
The country
sell
their
in
of its quota.
to
ing
Currencies
would be supposed to
put in
fund
borrowing not investor's,
money, borrowing not even >
or
sterling, but, at all events, from the commercial banks-,.!
Now this means that when
he could take his losses, sell but
borrowing in the most in- *
dollars grow scarce in the
them for what they would flationary manner of
all,;
fund all the countries need¬
hand, whose
was
the
fund, moreover, is not to have
doing anything about set would certainly be very
2)
budget balancing or other much less than the eight bil¬
transactions in our market in
lent setback in the
lion
dollars
or
ten
billion dol¬
grandiose
things necessary in a partic¬
currencies of other members
scheme for world inflation
ular country as a foundation lars talked about.
Most of
at a discount from the agreed
first drafted
for
by Lord Keynes.
currency
stabilization. the contributions made to the rates.
Lord Keynes' plan would not
The new plan, like the old, fund in the form of currencies
would allow
ized
when
With the free foreign ex¬
equitable method of appor¬
tioning the scarce currency, change markets of 1919 and;
and that this decision by the 1920 the exporter, selling in
fund shall operate as an au¬ francs or lire, might find that
thorization to a member coun¬ the foreign exchange market
had gone against him and that
try temporarily to restrict the
he got less dollars than he ex¬
freedom of exchange opera¬
tions in the affected currency. pected for his francs or lire
we
whose
f
they would find, as they or's money.. No bonds are to;
of ticular
country's currency take
these bills to their banks be
put into the fund as part
may exhaust the fund's hold¬
and try to get dollars for of the
of
quotas, only gold and?
ings of that currency, the
them, that the dollars are no domestic currencies. The i
fund shall so inform member
i
rency
from
the
"money of account" in which
The original Morgenthau
to keep its books. This could
be the dollar, or some other; plan had provided for quotas
currency, as easily as Bancor of five billion dollars or more.
or Unitas.
The important The new plan calls for quotas
question is as to whether the of eight billion dollars if all
unit is fixed in gold and re¬ the
United
and
Associated
deemable in gold. The answer Nations subscribe to the fund,
is "No," on both points.
and of ten billion dollars if
The great essentials of the the world as a whole comes
Keynes plan remain. The in. Practically, the available
strong currencies of the funds, the real assets of the
world, which means chiefly fund, would be chiefly the
the dollar, are to put their amounts subscribed; by the
strength behind the weaker creditor countries. This would
currencies so that all the cur¬ supposedly be 2 billion 500
rencies look strong, and so million to 2 billion 750 mil¬
that the weak may pull the lion contributed by the United
strong down. When weak and States, and such additional
strong alike have grown funds as countries like the
weaker
against gold, then Argentine, Sweden, Switzer¬
weak and strong alike may land,
and other
countries
agree to repudiate their gold without heavy foreign trade
obligations in part by making deficits, might put up. Great
"an agreed uniform change" Britain would almost certain¬
in their gold
obligations, and ly seek to take more out of
doubtless ex pect to retain the fund than she put into it,
their respectability while so and Russia, having in mind
doing. This plan, which thus her great desire for heavy
definitely contemplates world post-war imports of ma¬
wide repudiations of gold ob¬ chinery
and other things,
ligations, has, as one of its even though she put up 250
avowed objectives (I, 3) "to million dollars of gold to start
with (25% of her quota of 1
give confidence
."
The new plan, like the old billion dollars) 3 would rea¬
plans, seeks to achieve ex¬ sonably expect to take out a
change stabilization without good many more dollars than
doing anything about cur¬ she put in. The effective re¬
.
ular member's currency
in the
exporters to export with
Currencies
strong countries
standard
Currencies (VI) sug¬
scarce
gests that this rationing is to becoming scarce: (a) to bor*
gold put in and the dollars be only in the markets of the row its currency from a meim
weaker countries, but the for¬ ber
put in.
country."
That is to say, the fund
However, three billion dol¬ eign exchange market is a
lars in dollars and gold put market involving all the coun¬ having exhausted the dollars
into a fund of this kind would, tries/and the biggest supply which we first
(Continued from First Page)
uniform
Thursday, May 4, 1944
and
lars
come
so soon.
His
of New York
and
I
refer
on
to
Feb. 3, 1944, ;
these
discus-
>
;
•
;
plan drops a good
of the things that have
•
sions for the details.
The
many
new
plan, operating with bancor been criticized in the earlier
deposits, would permit a plans. The notion that the •»
much greater
fund should have liabilities (
expansion.
It
would
be, doubtless, at
in
source
show
of the
itself.
outcry from
and with
a
new
plan would
With
a
violent
angry world
violent outcry in
an
particular from misled Amer¬
the form of
deposits, and
a
country's
claims upon the fund should
be counted as part of the gold
reserves of its
central bank,
have both been dropped. The
plan says nothing whatever
this stage, that a further re¬ the
notion
that
ican exporters
facing bank¬ about what the liabilities of
ruptcy, the fund would be un¬ the fund shall be. We are
at the fixed rate the dol¬ der
great pressure to turn to told what its assets shall be,
available would be ra- its second resource (III 4 (a)) but we are not given a bal-
1
>
showing its
sheet plan
anee
This
liabilities.
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4278
yolume 159
than that for very
has money!
matter
much less
the
if
enough so that
could have
experts
The
wrong.
will be able to
the ordinary transaction
of the foreign exchange mar¬ straighten out their own cur¬
ket. There are, rather, abun¬ rencies by internal reforms,
Any
dant provisions for intrusion, as France did in 1926.
for controls, for restrictions, country can do it if given a
the
upon
war
stabilization loan in moderate
and for domination.
significant that the amount, accompanied by for¬
plan drops the provisions eign supervision of the loan,
in the earlier plans for taking and accompanied by the de¬
care
of
"blocked balances" mand on the part of the
and "abnormal war balances" lender for balanced budgets,
and "abnormal balances in resumption of gold payments,
overseas
ownership." The and a discount rate policy and
new
plan says (X, 1) "since general money market policy
the fund is not intended to which will protect the gold.
is
It
new
provide facilities for relief or
reconstruction,
or
to
deal
international
with
many and Hungary in 1924,
indebted¬ and Poland in 1927. I have
arising out of the war amplified these proposals in
ness
(bold mine.) Now this
.
is
Austria did this in 1923. Ger¬
highly important change.
The original Morgenthau plan
blithely started out with a
a
the
earlier
ferred to,
the
documents
re¬
and in particular in
article
in
the
"Commer¬
cial and Financial Chronicle"
of Dec.
The imme¬
should take care of the abnor¬ diate post-war problem of re¬
mal war balances and stabil¬ lief calls for gifts, not credits.
The * new plan retains the
ize
the
foreign exchanges.
When it then developed that vices discussed in that same
five billion dollar fund which
Great
ances
With
the
The New York Stock
$1,440,000 Allegheny,
Providence,
R. I., issues now out of the way,
and the Minneapolis offering of
000,000 for the 1939 fiscal ye&r to
$129,350,000,000 for the 1943 fiscal
has
year.
weekly firm changes:
$1,700,000 scheduled to reach the
the market today, the next sizable
of total tax collections in pro¬
and
Pa.,
issue
$2,000,000
calendar
the
on
consists
of
the
$3,180,000 Orleans Levee Dis¬
trict, La., loan, for which bids
will be opened on May 16.
Later
in the month, on the 24th, the
Chicago School Board will market
an issue of $11,000,000 refundings,
and this represents the only other
important new operation in sight
at this writing.
There are, of
course, two really substantial is¬
sues in prospect, namely, $42,000,000
by
the
Consumers
Public
Power District, Neb., and $57,000,000 by the California Toll Bridge
Authority.
issues
Both
be
believed
are
to
practically all set for place¬
ment,
with
insofar
the
issue
power
having
seemingly
"edge"
the
imminence of sale is
as
concerned.
As
matter of fact,
a
with the Fifth
War
drive
Loan
scheduled to get under way on
June
12, it may be that both of
these offerings will materialize
before that date.
However, this
will depend on the state
of the
market, the tone of which, in¬
cidentally,
has
not
been
very
good in the recent past.
This
condition
flected
has
Relatively moderate
portion
re¬
the
income
federation
New York
is
partner
said,
but
Melniker, member of
Exchange, retired from partnership in Mervin Ash & Co., New
York City, on April 29. The firm
the
growing national income
in
absolute
amount, while
the
during
continues
collections
state
same
period did not keep
with
the
swift rise
in
national
Edward
from
collections
rose
from
1943
com¬
as
members of the Ex¬
change.
pace
income.
State tax
on
Blaicher,
general
Coggeshall & Hicks,
City, became a special
May 1.
Jerome
creased, not only in proportion
to the
Exchange
following
A.
in
partner
by the fact that local taxes de¬
W.
withdrew
Bishop
partnership in Billings, OI-
cott & Co., New York City, on
$3,057^000,000 in 1939 to $3,906,April
29.
000,000 in 1943, an increase of
William
J. Doyle, Jr.
27.8%, though they were only 3%
retired
of
national
in
income
from Scholle
with
4.5% in fiscal year
1939.
And significance of local
tax collections in proportion to
pared
national
in
half
income
was
City,
William
during the five-year per¬
ive
Federal
360%,
for fiscal
000,000
for
880,000,000
year._
from
1943
cal
from
,1939
based
ious
Preliminary estimates for fed¬
state
and
local
tax
on
in
City,
April 19.
present trends are be¬
cording to the federation's study,
to
—
16.9% for the 1943 fiscal year.
tions for the
partner
ing accentuated still further, ac¬
7%—equalled by lo¬
in
Hitchcock,
dicate that
On the basis of per cent
collections
April 30.
died
$21,-
Co.,
fiscal
of national income, the increase
was
&
Lehman Brothers, New York
$4,760,-
1939 to
the
Anderson
B.
City dissolved, effect¬
Thomas
collections, however,
increased
Brothers, New York
April 30.
on
New York
almost
cut
iod, dropping from 7 to 3.6%.
eral,
been
national
to
explained,
Arthur
increase
the
announced
■
ury
collec¬
the
1944 fiscal year in-
on
compilations from
sources,
var¬
including the treas¬
department and the bureau of
census.
in
a
marked slow-up in
activity, particularly, it
appears, with respect to high cou¬
pon
and high premium bonds.
trading
Items
of
character
this
held
are
dollars
blocked
and
were
in¬ exchange transactions to tne
creasing in India alone at the
of twelve hundred mil¬
lion dollars
a year, the inadeof the Morgenthau
quacy
fund of
domestic
such
a
market
money
way
that
in
money mar¬
ket control in each
interfered with
country is
by every for¬
five billion dollars eign exchange transactions of
(only part of which was in¬ magnitude. Central banks
ternationally valid cash) to and exchange stabilization
deal with this vast problem funds oughtr not to be the in¬
became apparent, and the strumentalities for foreign
next version
cut down the credits or foreign lending. In¬
amount of blocked balances vestors' money ought to be
that could be dealt with in the used when foreign lending for
first two years to something any
length of time is inand commercial
like five hundred million dol¬ v o 1 v e d
not
central banks,
lars. The new version drops banks,
the blocked balance problem should give the short-term,
entirely. Lord Keynes had a revolving credits.
better perspective on this
Finally, the new plan re¬
,
provided a fund tains the vice of the earlier
expand; indefi¬ plans that it creates an internitely merely by marking up national bank, the over¬
its assets on one side and its whelming majority of whose
when
which
he
could
liabilities
the
on
other!
The
of
Board
Directors
im¬
are
could
swallow
eight or ten billion thirty-four nations who have
dollars, refrains from under¬ unanimously agreed upon this
taking to swallow any of the plan as independent experts,
we
blocked balances.
might marvel that they
This means that the new agreed to create such a bank.
But if we look upon the for¬
plan gives up the great prob¬
lem of setting the foreign ex¬ eign experts as the political
changes free.1 It means that representatives of foreign
sterling will be left tied up so governments which are finan¬
far as existing blocked bal¬ cially hard pressed; and anx¬
ious
to
get credit without
ances are concerned. It means
that the world is called upon giving too much considera¬
tion to the ultimate painful
to subscribe eight to ten bil¬
pay-day, I think" that we
lion
dollars
without
being
should
rather
marvel only
promised anything like free
that our own Treasury joined
exchange markets. The plan
in making the decision unan¬
indeed
contemplates (X,
dollars to
"Transitional
ments")
that
Arrange¬
exchange re¬
strictions and bilateral trade
imous.
CHRONICLE
The
ments
Dr.
,
on
the views
invites com¬
expressed by
Anderson, in this article, or
any related phases of the sub¬
arrangements and extraordi¬
on
interferences with for¬
eign trade shall only grad¬
ject under discussion.
nary
be
ameliorated.
ought to get
very
much
should
be
addressed
Comments
to
Editor,
"Commercial and Financial Chron¬
We icle,"
more
conducted
public
25 Spruce Street, New York
8, N.Y.
institutional
by
funds
trust
in
the
and
recent
Because
past.
of the high pre¬
entailed, such issues ap¬
parently are not favored by some
investors, a point developed in
some detail in this space last week,
mium
as
of
result
a
the
subject
White &
recent
a
study
on
J.
A.
by
prepared
Co., Cincinnati.
Apropos
of
investor
reluc¬
tance, is the price reduction
cently
made
Md.,
more,
the
on
portion of the
?»
re¬
unsold
$2,311,000 Balti¬
314%
of 1970-1981.
water
bonds
These bonds
were
acquired by the syndicate from
the city sinking funds on March
28 at a price of 143.07, and the
original re-offering prices were
from 1.60% to 1.75%.
On April
27, however, the syndicate
was
closed and prices were cut from
5
to
10
basis points on the ap¬
proximately
$2,000,000
bonds
still unsold, according to report.
Prevailing
new
prices range
yields of 1.70% to 1.80%.
from
Maturities
of
of 1976-77
and
1972-75
cut 10 basis
were
pecunious debtors to the
anything, but the newly re¬ bank, anxious to borrow
vised Morgenthau fund, even more. If we could look upon
expanded from five billion the individual experts of the
fund
bancor
ually
Exchange
Weekly Firm Changes
bal¬ article and in the address of by dealers in considerable vol¬
representing
liquidations
alone amounted to four May 11, 1943, of tying foreign ume,
Britain's
billion
rate
16, 1943.
N. Y. Stock
Municipal News & Notes
-
whole
approach is
The problem is not a
agreed upon this point, they problem of foreign exchange
would surely have said some¬ stabilization. The problem is
a problem of currency stabil¬
thing about it. The new plan
ization for each country sepa¬
drops the absurd notion that
the fund "shall not intrude" rately. Many countries after
been discussed
1833
1978
points and those
and 1979-81
were
low¬
ered five basis points.
Members of the syndicate re¬
portedly ascribed the poor recep¬
tion
accorded
investors
the
the
to
securities
by
high
premium
involved, pointing out that bonds
of
HELP
HIM
LOHG
DISTANCE
GET
THAT
similar
maturity, with a low
have moved out rapidly
similar yields to those of the
coupon,
at
Baltimore offering.
Taxes Took 23.5%
of 1943 National Income
Increases
collections
of
141%
federal,
—
total
in
state
THROUGH
CALL
TONIGHT
tax
and
local—between 1939 and 1943 rep¬
resents
a
rise of only 5%
in
pro¬
portion to the rising national in¬
come
during
these
years,
the
Federation of Tax Administrators
said after analysis of pre-war and
wartime
tax
collections.
The three levels of government
collected (excluding social secur¬
ity
taxes,
considered
insurance
You
can
tween
7
do it
and
by
not
10 p. m.
using Long Distance be"
Those
are
the night-time
hours when many service men are
off duty and
payments)
the 1939
sented
$12,602,000,000 during
fiscal year, which repre¬
18.5%
for that year;
fiscal
of
national
income
its their best chance to call the folks at home.
total collections for
1943—$30,398,000,000—were
23.5% of total fiscal 1943 income.
National income (excluding un¬
distributed
however,
five-year
corporate .earnings),
rose
90% .during
period,
from
the
$68,021,-
BELL
TELEPHON E
SYSTEM
1834
THE COMMERCIAL & FINANCIAL CHRONICLE
Thursday, May 4, 1944
BURLINGTON, IOWA
.
Mutual Funds
(Continued from page 1831)
last year by a wider margin than
ever before—4.80 times,
a£ com¬
pared with 2.32 times in 1929.
Moreover, their cash resources
today are over three times what
they were in 1929.
"Yet,
despite
the
amazing
improvement
in
the
funda¬
of the railroads,
mental position
bonds,
railroad
discount
as
a
would still have to ap¬
preciate
approximately
35%
from present levels in order to
re-establish their normal price
Dealers Cite Reasons
Why NASD
5% Rule Imperils Small Business
(Continued from page 1820)
superior selection and judgment, increases the customer's capital
20, 50 or 100% or returns substantial income returns.
The test of any mark-up or dealer profit should be it's propor¬
tion to the amount of satisfaction, profit and gain accruing to the
customer compared to the average performance of the securities and
investment field, market and trade obtainable.
group,
will lose their
do well to study
in general may
the
prospectus of Equitable
new
Investment Corporation of Massa¬
this phase of invest¬
operations. But it
in
experts
ment company
is
relief to receive a prospectus
a
from cover
which is only 12 pages
CHICAGO, ILL.
None.
The only reason we dislike the
"5% mark-up rule" is the
evident drifting in this country toward regimentation.
In our opinion any inflexible arbitrary rule is dangerous.
Developments from
the Investor's Viewpoint," is the
under discussion in the
current issue of 'Investment Tim¬
subject
published
ing,'
Se¬
National
by
The
develop¬
Corp.
Research
&
summarizes
discussion
prospects
in
such
varied fields as electronics, sulfa
and
ments
I
believe
this
is
rule
CHICAGO, ILL.
None.
■
PEORIA, ILL.
It would
virtually eliminate new financing on the part of small
*
*
*
corporations.
A 5% profit will not cover the cost of underwriting
risk
capital and would entirely discourage participation on the part
Lord, Abbett presents an inter¬
of
small
dealers
in selling group positions.
If a 5% profit is proper,
esting
discussion
of Affiliated
Fund's current position in the why doesn't the SEC and NASD have Congress enact it into, the
Securities
Act
of
1933.
That
kind
of
a
move
would publicly air the
latest copy of "Abstracts."
Dur¬
ing the first quarter of this year whole mess.
the management has been build¬
PEORIA, ILL.
Just about kill them.
ing up reserves in bonds and cash
in preparation for any sharp re¬
QUINCY, ILL.
action which might occur on sud¬
follow.
.
ROCKFORD, ILL.
It
position of Affiliated Fund as of
bonds
and
effect
1944;.
Goods''
and bonds- J--
stock
"Reserve"
bonds
17,362,400
and
cash
seems
on
to
me
that the mark-up rule is bound to have adverse
4,176,000
-—-
underlines
memorandum
are
ROCKFORD, ILL.
Dividends
share payable May 15,
York
Stocks,
NEW YORK
1944,
April 29.
Inc.—The
Special Stock
Amount of
Dividend
A-
Per Share
Agricultural Industry Series
Alcohol & Dist. Industry SeriesIndustry
Aviation Industry
Bank Stock Series
_
-
Series
-
Series
_
.
_—
-
Building Supply Industry Series,
Equip. Industry Series-
-
Business
Chemical
Industry Series-
Electrical
Equip. Industry Series
Pood Industry
:
Series—
.
Series"
Stock
-
-
—
Oil
1
Series
—;*
J
.
Tobacco
.12
.13
.10
.22
.11
.13
.20.
.00
.20
.19
.20
.10
.15
-
Railroad Equip.
Steel Industry
.30
.33
.10
Industry Series
Utility Industry Series
Public
Railroad Series
$.14
.16
Machinery Industry Series
Merchandising Series
Metals
_
-
Government Bonds Series
Insurance
_
-
Industry SeriesSeries
Industry Series
_
.
-
.15
.18
.25
Philip Goodhart Dead
Philip J, Goodhart, member of
from
New
1877
York
to
Stock
1909,
the
act
can
securities
will
be
good
agent unless the court
But on inactive securi¬
as
bid will be accepted.
Too many times 5% is not commensurate with
the risk.
Both the estate and the dealer are in a
predicament.
We sell
panies
only to individual clients and we recommend only com-*
investigate personally.
After issues are on our approved
we
list of investments
we continued to
keep a personal contact with
the companies and attend all annual
meetings.
w
"
"V
'
It is necessary for us to have around 7% or 8% on much of
our
business
to
give the service
Exchange
passed
A.
we
a\;v
■
;
TOPEKA, KAN.
:;-
;>■
The small corporations are going to have a difficult time obtain¬
ing capital.
'
TOPEKA, KAN.
Trading would be
very
'
limited.
NEW YORK CITY
(From firm favoring rule)
None.
We
We completely disagree with your approach to this mat¬
small dealers, and we think you have done much more
are
harm with your "false
ever do.
,■
'•
alarm" than the mark-up philosophy could
-
,
WICHITA, KAN.
They will
"
:
by the boards, the same way the small investment
dealer is going when the "big shots" who control the NASD
gets
through with us.
go
.
WICHITA,, KAN.
Definitely retard financing.
•/
•
originate many small issues of first mortgage bonds and
preferred stocks of companies doing business locally. If this 5%
rule stands, it means we cannot handle any more business on
that
.A;;,
basis, and I do not know how these small companies are going to
com¬
finance themselves.
It can't be done with the 5%
is the
rule in effect.,
LOUISVILLE, KY.
Will be
dominate legality.
There just won't be any real
Changes must be made gradually from a cost Standpoint,
basis of any other "fair practice" business.
In order
selling price you must standardize the cost. This
is a profession and not manufacturing or merchandising, so you are
very limited as to increased production to offset lower price.
It is much more important to standardize the brains in the
organization instead of the price.
to standardize the
A SMALL INDIANA TOWN
We think it will hurt the market for securities of smaller
cor¬
excess
of
a
\
handicap.
NEW ORLEANS, LA.
The
rule
will,
|
believe, narrow the markets for securities
of the smaller corporations.
While we would like to make 5% gross
profit
on
even
a
we
small percentage of
our
transactions, competition
does not permit us to come anywhere near that
percentage of
We are against the "mark-up" rule in
profit,
principle, believing that
competition will, in general, hold down the profit margin to fair
proportions.
Undoubtedly there are dealers with a small clientele who require
greater than a 5% gross in order to conscientiously serve their cus¬
tomers and net
something for themselves,
Undoubtedly, also, there
advantage of their customers in the
profit taken, but we are confident that these are rare exceptions
The NASD 5% rule will eliminate all firms our size.
With all and that, as a practical matter, much more harm than good will be
small firms out of the business, securities of small companies all over accomplished by the invocation of this rule.
the country will be without a market, as we are the ones that dis¬
SMALL NORTH CAROLINA TOWN
tribute and maintain markets in these securities.
We can't imagine
the large houses handling the securities of the small corporations in
(From firm favoring rule)
Fort Wayne.
None.
HARTFORD CITY, IND.
LOUISVILLE, KY.
It would be my opinion that if this rul6 would operate for a
Seriously injure it. ,
.T.
,
;v
,
substantial period of time, that in the end it would work-to a dis¬
BOSTON, MASS,
advantage to the present stockholders.
are
instances of dealers taking
FT. WAYNE, IND.
,
Operating in a small rural community, there are many wellr
managed^ small companies whose' securities have provided a safe and
good income for the investors in that immediate community.
In a
lot of
cases
these securities
were
little known outside of the terri¬
tory where the company operated.
If I understand this rule, I don't see how most of these com¬
panies would ever, have got started, therefore, would not be in
now.
It seems to me the
same
would be true when
for risks of this
then there
so
much less.
,
I certainly agree with the position your editorials have taken
reasons for eliminating the 5%
mark-up rule.
.
J
I do not think I can add anything to what
you have said.
I
hope
your efforts will be successful.
,
j
BOSTON, MASS.
.
Wide spread, inactive market.
we
If this is to be the limit on this type of risk,
should be considerable less commission when the risk is
type.
„
and the
BOSTON, MASS.
get back to normal; that is, to find some means of raising, capital
Believe it will limit their marketability to an even greater extent
than at present.
Am opposed to the
rule, primarily because it is
palliative for
a
situation and not
a
cure.
And
I
doubt whether
will
away
INDIANAPOLIS, IND.
peacefully at his home 550 Park
Avenue, New York City.
believe
is necessary to do a
;
a <• .■ ■•:
\
The 5% mark-up rule, if it is
enforced, should be harmful to
the small retail broker
specializing in individual customers and
would ruin the market for many small corporation
issues, because
where a great amount of time must be taken to"
get posted on an
issue 5% is too small a mark-up, in that your sales are few and
you cannot operate profitably on that small a margin.
good job.
Economics
existence
the
Smaller
porations if this rule stands.
We seldom have profits in
5% except in transactions is low price securities.
STOCKS, INC.
*'
when
ties; both the attorney and the court want something more definite
than that.
Then the bidder must bid for
inventory and cannot hedge
by selling for delayed delivery, because he doesn't even know if his
A SMALL ILLINOIS TOWN
following
distributions
payable
May 25, 1944, to stockholders of
record May 5:
Automobile
reasonable
mark-up is all that is necessary.
panies would be injured.
which
to shareholders of record
New
A
market.
Keystone Custodian Fund "S-2"
•—A semi-annual distribution of
a
know
We
■
all-out
toward
volatility.
-45c.
will
stockholders
in favor of the 5% ruling but not on all transactions,
of the
or
other
LEXINGTON, KY.
(From firm favoring rule)
We
the
conservatism
doesn't
PITTSBURGH, PA.
$22,355,900
basic, longer-term confidence
management in the market,
but points out that, in its present
position, Affiliated Fund has not
gone to extremes^-either toward
time in the last 25 years
no
when a large profit was taken on any security.
However, there is a
principle involved in this proposed regulation which, I believe,
should be treated beyond any one's personal discomfiture; therefore,,
whether or not it adversely affects me, I am against it.
.
The
bidder
Therefore, he seldom
the market of securities of smaller corporations and, in my
I am a small dealer and can recall
'_,u—$817,500
"Consumers
the
delivery.
opinion, if will especially discriminate against small dealers.
Goods'* stocks
"Capital
estate
ter.
critical period of the war.
The following tabulation gives the
this
March 31,
,
The
become aware of their predicament and the
price of the stock will
suffer for lack of
marketability. Have you considered how this
rule has affected estates?
When a bid is made for securities in an
We would have to get out of business. No profit.
during
developments
news
attorney a bid. NoWJ
stock, I can't even afford
down the information.
run
CEDAR RAPIDS, IOWA
eminently fair and adequate. j-Take the
contra side. Suppose all issues of securities were orderecl. listed on
their local or normal exchange market?
What then? I fail: ^o; see
how "smaller corporations" will be so adversely affected. "One of
the vicious things in the promotion of securities of "smaller corpora¬
tions" in the past has been the spread between what the public is
asked to pay and what the corporation has received.
drugs, pencillin, soy beans and
synthetic textiles.
Other articles
on this fascinating subject are to
den
the stockholders for ideas and then made the
at a limit of 5% profit on this amount of
(From firm favoring rule)
"Scientific
curities
i
!
attorney asked me to make him a bid on a
local hotel stock where there are
just a few stockholders and little
stock outstanding.
Before the 5% rule I would have gone to the
secretary of the company for information, then contacted some of
an
BALTIMORE, MD.
H*
*
yesterday
order to sell is at the best market obtainable.
to cover.
®
and unconstitutional.
great handicap to unlisted markets and financing of the
smaller companies.
Small investment dealers like ourselves cannot
operate on such a basis very long. Salesmen would starve trying to
net 2%% and pay their own upkeep.
a
We don't pretend to be
chusetts.
CEDAR RAPIDS, IOWA
Just
Certainly the estate will suffer.
We believe this action to be un-American
It will be
sponsors
company
companies.
We underwrite and handle secondary markets as well as maintairi
trading markets in a broad list of securities of small midwest comi
pames, mostly in Iowa.
We think there will always be a place for
this type of dealer in each
locality. We don't like the 5% spread
rule or any other rule forced on us in this manner,
/
<<,
CHICAGO, ILL.
■,
❖
sjt
,
to
years!"
Investment
seriously—they
sponsorship.
good
of previous
relationships
CHICAGO, ILL.
The market for smaller corporations will suffer
.j
Almost do away with an already limited mafket for this class
of securities;
About 75%. of our business over the past 23 years
has been in the unlisted securities of small mid-western
(From firm favoring rule)
Time will tell-
-one
guess
would be
an
°
improvement,
a
it
accomplish even what it is primarily intended to do/
A.
Theoretically, it will protect the uninitiated customer against dilution of his capital (relative to security prices as a whole) without
use
.
of the alternate
remedy of full disclosure of profits
on
transac-
Volume
tions
Number 4278
159
However, such dilution .can occur rapidly,, on a
principal
as
entirely
upon the type of security sold to the customer,.the judgment of the
salesman or the intelligence' of the customer, .and upon the :frequericy of transactions. ' In the case' of thousands of issues a larger
than 5% mark-up is justified.
Such issues Would naturally suffer
under the rule, if it stands.
In the case of other thousands of
issues, such a mark-up as 5% would be outrageous ^except for small
of a trip to the sticks.
Aside from
relationship between NYSE member and nonmember firms, what we need is not a mark-up limitation, but full
disclosures: the latter, however, should not be adopted until NYSE
members are forced to do business only with dealers.
But, in
the final analysis, the old proverb still holds: "A fool and his money
are
soon
parted."
Investors have been led to believe that, with
State and Federal regulation, etc., they can trust virtually any regis¬
tered' broker or dealer.
They can, in certain respects, but all the
orders
executed
because
.
.
.
b'asic changes in the
.
.
.
regulation in the world won't put the investment business on a pro¬
fessional, highly ethical basis. The effect of regulation is actually
the reverse.
What it seems to do is make bigger fools of those cus¬
tomers who were fools to begin with and at the same time make it
just that much harder for an honest and ethical firm to make a
decent living.
.
What the present rule is trying to cure is the
basic evil of overpricing, and it merely scratches the surface, infect¬
.
.
ing the scratch with another virus at the same time. .
cure overpricing until you stabilize the price structure of
and you can't do the latter
without going socialistic or
You can't
everything,
totalitarian.
.
then, it doesn't seem to work.
Sorry to remain anonymous,
but the 5% rule doesn't have any direct effect on my own business,
Even
while the
making of such comments might.
k,
iV
-eC
-'
(From firm favoring rule)
there would be any effect.
doubt if
+
will be
Markets
;
and less
narrower
volume.
,.,v.
DETROIT, MICH.
1
"
We believe it will have a
a
financed.
OMAHA, NEB.
Will undoubtedly
turbing than some
sider
it
be
to
from
the
present
Realistic revision of
the tax structure will, I believe,
improve the
general
corporate
viewpoint.
situation
These
and
peace-time procedures.
days of high tension
are
raw
returns
business
when
normal
to
We
nerves.
threshold
of
the
at
are
We
moment
that the long-waited invasion has
begun.
Unless our calculations
badly miscarry, this news, when it
may
events.
great
receive word at
any
the beginning
triumph of po¬
democracy and
economic
will
comes,
the
signal
greatest
enterprise since our country
founded
upon
those very
principles.
While many days of
grave
anxiety
and
of
heavy
casualties undoubtedly lie ahead,
we
cannot doubt that the ultimate
injure credit of many small corporations.
to dominate the
has
now
That
world.
civilized
threat
And victory in
been
removed.
to
impossible
dramatize
over-
significance of the
military victories which lie before
us, or to over-estimate the part
which
the
in
United
States
them.
achieving
prestige among nations, as the
symbol of liberty, oi opportunity,
and of unlimited accomplishment,
MONTCLAIR, N. C.
Definitely ruinous.
has been great in times of peace,
but it will have been enhanced
'
BOSTON, MASS.
(From firm favoring rule)
■'
beyond
measure
by
our
of
RIDGEFIELD, N. J.
Not favorable.
NEW YORK
CITY
We cannot judge the general situation in our Counter Trading,
show a new interest in dis¬
tribution of Investment Trust shares, as liberal commissions are
sanctioned by SEC and clearly outlined in all prospectuses and other
literature on the subject.
From all that has appeared in print the NASD 5% ruling must
be considered as arbitrary and hardly based on a strict interpreta¬
tion of powers given the Board of Directors by the members of the
I
but it appears that brokers and dealers
Association.
;
The 5% rule should be thrown out like a lot of other "New
nonsense,
opinion. About time the U. S. A. regained the com¬
of its forefathers, and drops the school-marm stuff.
Per¬
in
sense
mon
my
sonally, the 5% doesn't affect my business.
BUFFALO, N. Y.
will be eliminated from
security business if the 5% ruling is to stand. The only other
alternative is, for dealers to resign from the NASD and do business
No question but what the small dealer
,
the
with non-members.
dealers
are
I
am
for such action 100%.
under the impression, that
I believe many small
in order to remain in busi¬
they must be members of the NASD. A little publicity by your
Chronicle on that subject, I feel, would be of tremendous help in
ness
bringing the NASD higher-ups to their senses, I haven't any doubt
but what the great majority of small dealers would resign from the
NASD without delay if they were informed that membership in that
organization
was
not necessary in order for them to continue doing
business.
NEW YORK CITY
Diminish the
marketability.
NEW YORK CITY
difficult to float small new issues and will cause the
It will be
trading spread between the bid and asked price to be widened—and
we won't have active, close
trading markets in stock like we have
Also will cause the tendency of concentrating the business
in the hands of a few large houses as the little ones will have a lot
today.
of difficulty in
making both ends meet on a maximum 5% profit.
NEW YORK CITY
As
a
question of practical business it is a monstrosity.
hamper if not completely destroy the market
Dealers
will
suffer,
become a thing
this rule for
but more
I
of the past.
many reasons,
so
am
the public.
It will
for unlisted securities.
display
and
of
.
own conclusions.
One thing
Naturally, even short-cov¬ I know, and that is the mar¬
ering has clues within it. ket has probably discounted
Your short trader, who usu¬ the invasion.
As a matter of
ally has jnore acumen than fact, don't be surprised that
the long-side buyer, doesn't the
day actual invasion occurs
cover
unless he feels the
ket
through on the down¬ the market
*
But, by the same token,
is
side.
mar¬
for reasonable profits, but against
ciple.
to
It must be apparent
that this defeatist
everyone
attitude
toward
is
future
completely
as
attitude
those
is
economic
our
swept away just
being
in
swept away
which
countries
defeatist
the
as
being
fallen
had
under the heel of Hitler.
We have
had
12
the
in
long years of
economic
sphere.
question in my mind
no
but that much of this reform
has
*
the
on
turn
which
up.
i'fi
domestic
side,
everybody is talking about
the Montgomery Ward case.
Congress is blaming the Pres¬
'■
ive security.
On
day
will
ident and the WLB is
blaming
Avery.
Just to keep the rec¬
clear it might help to re¬
ord
call that the
law
under
Smith-Connally
which
confiscated
was
the
was
plant
in¬
an
been
essential
have
some
measure,
effectual
of
level
in its front
yard. It is inter¬
esting to note, however, that
toward
a
much despite all the stories
regard¬
of material pros¬
ing Montgomery Ward the
served
progress
higher
survival
controversy over re¬
to retard, in
form
our
the
to
the resumption of
perity for the nation. Our record
of* production
during- the war.
of
,
stock
is
acting
better
,
than
It may indicate exon¬
eration of management and a
most.
return to
private direction.
*
s.V
More next
Thursday.
acute
peace-time
accomplishments,
if
—Walter Whyte
given a favorable environment
and adequate incentives, and if a
[The views expressed in this
halt "is called upon the practice of
article do not necessarily at
any
changing frequently the rules of
time coincide with those of the
the game—a practice which was
Chronicle.
They are presented as
so disturbing in the years
before
those of the author only.]
no less electri¬
effect upon the
those countries that
have
been
overrun
by Hitler's
armies.
Although we at home
have been spared the acute suf¬
ferings of those who have been
under the Nazi yoke, we have had
our
share of gloom and of hu¬
miliation in the days when Hit¬
ler's power was in its ascendency.
its
also had
have
our
season
of
in the
dark days following Pearl Harbor.
We have been through a long and
bitter period of psychological de¬
pression induced by the spectacle
of brute force running rampant.
When we have finally put an end
to that spectacle and have sud¬
denly realized that the world is
free again, we are bound to ex¬
perience a tremendous exhiliration and a great upsurge of con¬
shame and
fidence
in
of helplessness
the
and. in
ourselves
the
potential
our
had
our
been
country.
told
that
ours
was
no
expanding, a dynamic
economy; that there were no new
frontiers; that there were no more
opportunities; that reliance upon
individual enterprise could only
mean
mass
unemployment; that
we faced
an indefinite
period of
longer
an
economic stagnation, and
that oUr
only salvation rested with an all-
We know
of our people
that
had
great many
lost faith,
that
a
willing
to
sacrifice
a
they
were
their
indi¬
form of pass-
s)c
have
I
have been
sjs
pointed out before,
moving fast in the
last eight or ten
fast.
too
That
years—sometimes
is the way with
,
LAMBORN & CO.
The long overdue politi¬
cal and economic reversal in the
cycles.
if
wise
we
are
guard
on
WALL
99
We will
1930's went to extremes.
be
j(c
war.
As
we
awareness
prevent the counter reaction from
going
to
extremes
also.
This
danger will be very real in the
back-wash of the war.
It is quite
evident
that
country
are
the
of
people
determined
to
STREET
NEW YORK 5,
N. Y.
to
this
root
SUGAR
Exports—Imports—Futures
out that which is unsound in con¬
in administra¬
equally deter¬
cannot
mined, I am sure, to preserve that
The initial prod¬
Our troubles have by no means which is good.
been entirely the products of war. ucts of a political upheaval are
Subsequently, they
Here
at home,
long before the often crude.
war
broke
out,
many
of our must be refined in a period o+"
consolidation
and
correction; but
people had begun to question the
economic principles and precepts the desirable developments must
upon which our previous progress be retained.
as a nation had been based.
They
The
fact
that
the
American
Of this we
have the slightest doubt.
future of
vidual freedom for
...
will also be the
fying than
peoples of
Ready markets will powerful government.
let alone the question of law and prin¬
one
will, I believe, be
We
Deal?
immediate reversal the
an
and, in of those dull, draggy affairs
noticed any effect since Oct. 25, 1943? How much can of
military -strength
determination
in
de¬ which has been the marvel of the
the public afford to pay for "service" taking into account mistakes national
Of judgment of dealers. The observation of the writer who has been stroying the
barbaric forces of rest of the world, has fortunately
in the over the counter business for 39 years is that wider spreads aggression all over the world.
given the rank and file of our
are charged small investors for poorer securities.
It is these dealers
The effort of the forthcoming own people a new respect for the
whom you are supporting? Have you forgotten the public angle?
defeat of Hitler
upon
the psy¬ genius of American business man¬
We also have a more
chology of the American people agement.
Have you
it
piece of legislation
that
Congress passed over
the
political and social system
underlying our. competitive en¬ Executive veto.
So, if Con¬
has terprise economy.
There is also gress is looking for a
scape¬
Our no question in my mind that the
goat, it can look for it right
conflict and
the
played
So
case.
cases,
they were for during which interest is prac¬
only 100 shares. So much for tically nil. So I see no point
the rumor side. Yet time and in
doing anything but hold
again the tape showed what on to stocks you have pending
looked like real buying.
How further developments.
to equalize one against the
What these developments
other posed a problem.
But, are
likely to be is a guess, and
after tracing various sources,
your's is probably better than
I discovered that what looked
mine.
Invasion?
Perhaps.
like real buying was actually
But you read the same papers
short-covering.
I do, and you can draw your
!jt
*
There is
is
the
be
most
in the
%
only cover but
I did not find
for market is in for another
not
were
than 500 shares
more
reform
)
bids
the
cases
Europe will most
Pacific.
long.
must be assumed that instead
certainly be followed by victory
It
tendency to make it very difficult for
small corporation to be properly
the
less dis¬
pessimists con¬
corporate profit picture
entire
If we were permitted to stay at 5% it would be bad,
get as "gross 3% ,
very bad.
\V:
which I
make
to
serve
forces threatened
A SMALL MICHIGAN TOWN
•
will
part of our high destiny.
It was
just four years ago that the Nazi
stay about 7 or 8% in mark up, and a good many times
We try to
Tnese are the elements
believe
in
conquest of Hitlerite Germany is
DETROIT, MICH.
;'
decline
perience a marked
gross business.
was
I believe most of these are now traded at 5% or less, so
X
excess
litical
BOSTON, MASS. V
:V
Whyte
(Continued from page 1822)
profits taxes paid
into
the
Treasury,
additional
cushions are provided for net in¬
comes
of corporations which ex¬
past
free
Restrict their saleability.
•
(Continued from page 1824)
of
not
also go
this to
Savs
of
BALTIMORE, MD.
i-
Walter
will
he
Tomorrow's Markets
Post-War Financial
5'% mark-up, or a 4 or a 3 or even a smaller one, depending
1835
CHRONICLE
THE COMMERCIAL & FINANCIAL
«
ception
tion,
and
poor
but they
people
are
individual
DIgby 4-2727
are
eager
for
a
of
ther elevation
our
a
Members
in
is
critical
is
yet to undergo
Commodity
Chicago
This
Orleans
New
its most
And
Stock
Exchange
Curb
Exchange
Cotton
Exchange
Inc.
Exchange,
Board
of
Cotton
other
Trade
Exchange
Exchanges
test, and when the trend
this
confirmed
development,
taken together
with
victories,
will
complete
toration
of
the
our
military
the
foundation
N.
Y.
Cotton
NEW
Exchange Bldg.
YORK
4, N.
Y.
res¬
of
business confidence in the United
States.
York
New
•
trend
York
New
fur¬
standard of
recent months.
York
New
living, has been indicated unmis¬
takably
1856
H. Hentz & Co.
revival of
with
freedom,
Established
CHICAGO
DETROIT
GENEVA.
PITTSBURGH
SWITZERLAND
Congressman Dewey On Post-War
International Rehabilitation
| we
land
after their ters, that
is look
and that
what the
I do not know exactly
of
qualifications
but
at
I
some
from
I
was
expert
an
have had
claim to
least
are,
experience in these things
both sides. For four years
down in the Treasury De¬
partment just as are the experts
of today, Mr. White and„ his as¬
sistants; and then I was sent by
that
Department
Treasury
same
rather, by the Federal Reserve
or,
practically see
supervise the rehabili¬
Board to Poland to
about and
of that country. I am
happy to say I resided in Warsaw
for three years, 1928,
1929, and
tation plan
back there
every
year since.
The type of
plan that was developed for Po¬
1930, and I have been
land
similar to the plans de¬
was
for Germany, Hungary,
and all those similar
veloped
Austria,
body of ours,
and
States
United
the
of
on
am
Ways and Means Committee.
am looking at it from the
the
of
Congress here and of
United States, going
our
great
our
back
the
to
last
We
war.
know
perfectly well that out of our
participation in that war there
still remains
of
sum
hand here a vast
on
unpaid .indebtedness
other nations
whom
with
we
by
co¬
operated. Those are over the dam;
they are out of the way. Probably
there never can be anything done
about
them, but I remember back
twenties, I was then
in the early
with
connected
Japan had
Cross,
Red
the
terrible earthquake
city of Tokyo
people passed
a
which destroyed the
American
the
and
their hats around and raised over
be
to
honor
I would like to draw to the at¬
tention of the committee the rec¬
Later on I had
elected to this $10,000,000 to send to those people.
Then again we have in this war
the great Congress
plans succeeded.
the
speaks
as soon as anyone
proposes
ord
Now I
direct
$36,000,000,000 through the War
Department and the Navy Depart¬
ment which have been allocated
central fund leaves out so
practical points of view and
the practical one is what will be
the motives and ideology of all
great
the various countries that
be
asked
to
we
will
Are
help later on?
to
be
financially
sound? Are they going to wish to
balance their budgets, or are they
going to wish to have an infla¬
tionary policy? Then, again, will
they
going
this
be
sort
a
international
of
Wall Street, having a ^mall group
of men, directors of the great in¬
ternational
tell
the
organization that will
of
countries
the
world
less
powerful
than
themselves
what they will do?
They forget
that
countries
these
their
have
national pride and people do best
when
by their own selfby the demands
guided
interest and
has
desire
a
their
on
Those
that
to
enter our
the
are
market
terms, not on ours.
own
fundamentals
two
must never forget.
we
have
We
got to put them
together and consider them.
Insofar
United
the
as
domestic
a
I think it would be well to
tral
which
funds,
set
are
drive other
and
coerce
up
to
countries
the right lines are not as
likely to be successful as if they
along
the
to
-go
countries
themselves
them
with
financial
in
these
of
governments
and
work
establishing sound
and
ideas
economic
within the country and
aid them
put them into effect and then
to
let
countries
those
sound
foundation.
doing
that
sound
grow
is
It
that
you
currency
and
nomic future of the
on
only
a
by
have a
sound eco¬
can
country.
I do not want to have any mem¬
ber of this august committee, nor
member of this Congress, nor
any fellow citizen of mine to feel
any
that just because I take an oppo¬
site position to the plan proposed
by this international group of ex¬
perts that I am in any wav trying
to dodge the responsibility that
tion
interests
few
a
the
bringing
life;
and
by
back
sound
but I frankly
am
whole
in
economic
somewhat,
have been, very much upset
accusations coming from dif¬
ferent
sides
and
different
quar-
is the termination of the war con¬
of our
tracts and the reconversion
peacetime produc¬
tion. There are over 2,000,000 war
contracts at the present time that
will have to be terminated, exist¬
industries
to
ing in thousands of companies
throughout the United States, On
top of that we must reshift and
remake our tax system in order
have
I
service
that
tax
are
that
our
own
constant
a
mated
about
That
can
and
that
is
we
$125,000,000,000.
by
having
one way
a
it must
mean
much"
as
com¬
that
By
factory must
raise
must
borrowings,
economy.
every
full tilt;
and
run
I
at
as
he
can.
full
high national
money is
derived.
There are always dan¬
gers about that sort of policy and
employment gives
a
which tax
not
taking too much in taxes
people so that they will
cease t6 work and cease to have
the incentive to work. Those are
when
from the
throttle there is likely to be
surplus merchandise and that sur¬
plus merchandise developing in
the country hangs over the mar¬
ket and naturally has a tendency
to reduce employment and reduce
prices.
I have outlined the requirements
of-the United' States,
as
I see
may
of
some
things that
the
do¬
are
that we must
account at once and keep
mestic requirements
take into
in
our
minds at all times when we
require¬
ments around the world.
V
what
consider
our
are
:
..
in regard to our gold: I
in
last
evening 's
a
cartoon which showed
Now,
notice
"Star"
Morgenthau with an empty
sack going into the United States
Mr.
gold depository at Fort Knox and
President
saying, "I knew
the
would find some use for
that gold." That 'must have cre¬
ated in the public mind a mis¬
understanding of the necessity and
Henry
the
of
purposes
our
gold
great
the
machine
runs
with
them;
I briefly turn to the re¬
quirements of the other members
of the United Nations.
Britain
has
^'
lost
great
marine,
replaced,
as she
is very dependent oh her
merchant marine. Her position as
world banker has been impaired
and the Dominions to which Eng¬
land used to sell have developed
deal
of
which
a
her
will
a
merchant
have
to
be
great many manufacturing and
organizations of their
store.
industrial
was
probably be some¬
competitor of the mother
country. Then on top of that Eng¬
Naturally I do not think it
intended to have that effect
but
a
cer¬
Basically
humor.
tain amount of
that
to have
intended
was
store of ours is very
to this country if we
be able to do the things
gold
necessary
to
are
I
which
in
mentioned
have
our
post-war construction, and we
dare not send out of this country
own
will
and
own
what
a
land
is
a
received
banker
world
deposits
from
or
concerned,
men¬
of
dispose
actually
any
more
is
a
temporary
I want to show
you how fast that gold stock, used
for reserves, has fallen. In Octo¬
ber, 1942, our Federal Reserve
notes and deposits were secured
by 82% of gold and other lawful
money; 16 months later, in March,
1944, that reserve had fallen from
82% to 62%; and if we continue
at the same rate with the same
of
amount
in
reserve
increased
the
reserve
of
amount
in 1939
and the increased pur¬
chase
by banks throughout the
country of Government bonds, it
is estimated we will fall to the
was a
the
At
little under 4,000,000.
time, under the
1943 tax bill, there are 50,000,000
of our fellow citizens now paying
taxes.
We also must not forget
present
when
that
War I
finished
we
World
public debt had reached
thought was a stu¬
pendous sum of $26,000,000,000.
Now, it is well known that it is
contemplated that we will have
a
public debt after this World
War is won of about $300,000,000,000, and in fact the chairman of
the Ways and Means Committee,
our
what
to
we
of
circulation
currency
and
de¬
posits
requirements of 40%
middle of 1945.
To show you what that means in
minimum
and
35%
by the
the
Federal
Reserve
banks may purchase only approx¬
dollars,
~
have
We
lic
today
estimated
$150,000,000,00.0
pub¬
in order to service that
debt
of
always keep
ours,
an
which
we
must
honest debt, never
to be
repudiated,
have
a
we
must at least
national income
of $125,-
000,000,000, because not only must
agreement
ourselves and
will
on
better terms than
extended
be
to
other
coun¬
tries of the world."- Will England
follow that policy, or will
policy of Secretary
again
she follow the
Hull in
regard to reciprocal-trade
you any more
dollar
quoted
are
and
is
the
all
other
connected
weaken
our
with it
that
is
currencies
and
if
we
strength
benefit
of
must
of
our
the
protect
dollar
for.
whole world,
country.
Also, we know nothing about
the gold production of Russia—
the great Lena mines which pro¬
duced
gold in great quantities
and concerning which Russia has
not recently made a report, so we
do not know what her production
own
Those
are some
that
confront
need of
and trans¬
portation equipment and she will
will
sia
here
at
this
have
seek
are
market to obtain it.
our
As
China, her requirements
not as easily specified, but we
to
know they will have tremendous
requirements for communication
materials, the development and
machinery for the develop¬
the
natural
great
area.
or
reconstructions
and
constructions
effective
and
productive.
* * /
this world¬
part in it—is going to grow
immediately, and that is
almost
why I
for the passage of a
press
such as con¬
tained in House Joint Resolution
piece of legislation
226.
I
final
it
that
claim
not
do
is
£*
of legislation neces-,
sarily, nor do I claim that it is,
perfect.
One might almost say
that it is a stop-gap piece of legis¬
lation, in order that we may be
ready when the demand is made,
to do something about it and do
it in the American way.
I will
piece
explain that when I bring up the
bill, but that requirement may be
presented as a result of UNRRA
even before the war is over, when
are
evacuated by
and
We would then be ready to do our
point that I do
not
may
share,
but
an
individual basis.
Frankly, I do not want to lose
of the
in regard to either
position
be and what are to be
foreign policies.
countries'
I know that it is
going to be pos¬
these subjects come
to take care of them, each one
separately, each one based on its
own
requirements, through the
ordinary channels of banking in¬
dustry, with some assistance on
up,
.
part of the United States Gov¬
Axis
and
Germans,
again
I
treaties;
the
well
as
be made
wide rehabilitation—what will be
our
vidual item and worked out on
when
can
Now the problem of
word
sible,
ad¬
credits in order that rehabilita->
tion
as new
$500,000,000. is in any way suf¬
ficiently large to approach these
very large subjects of England, of
China, of Russia.
Each one of
those must be taken up as an indi¬
going to
technical
equipment
and we certainly know that she
will have to have long-term loans
of
those
.
of
mechanical
and
the American
States
scratched in
We know she
the
say
bargaining
which
resources
been
need
have
contemplate that House Joint Res¬
olution 226 with its revolving fund
the
great
a
mechanical equipment
of the questions
I
us
We do know that Rus¬
has been.
Powers/
reiterate,
in
manner.
We do not even know when the
of
comes,
command, "Stop firing,"
be the
what will
activities
and
whether
the
of
United Nations.
actions
four
great
We do not know
will
there
be
peace
do not know whether
there will be a continuing armis¬
tice.
We
we
do
not
even
how
know
of our good associates will
abide
completely by the items
many
and
recommendations
lantic
Charter.
those
A
of the
great
At¬
many
of
things we do not know any¬
about.
We do not know
thing
what will be the attitude of some
of the countries that will be evac-"
uated.
their
We do
receive and
or
know whether
not
governments
come
will
under
want
tjie
to
more
less domination of some greater
neighboring power.
that
need
certain of the
some
We do know
countries will
assistance
and
others
out what was the credit of certain
the
Now, briefly, in respect to the
requirements of Russia, we know
that
Russia
has
no
announced
the
policy.
Where is your cur¬
We
of our
which might not be in
keeping with the ideology of our
will not need assistance.
stabilization throughout the
world?
the points of view of some
partners
ernment.
dollar, where is your
stabilization?
rency
one
bring to your attention the
we enter any great
international union those may be
certain countries
We do not know.
agreements?
Mr.
it to
of
arms
and
fact that when
scarcely
when England
around
certain
countries of the world and said,
"We will trade together within
her
Lenin's
Mr.
have
England, Russia, or China, by en¬
tering into an agreement before
I know what the requirements are
ican
an
Ottawa
the
is
Stalin's policy as quoted as late as
1938 and as I say, I only mention
Do¬
United
giving
That
her
imately 20 billions of dollars more
Now, those are technical points.
I am not going to burden the rec¬
ord or abuse your patience by
Internationale'."
ist
ment
of Government securities.
of the argu¬
Mr. Doughton, will shortly intro¬ ments.
We are going into them
duce a bill to increase the lim¬
further, but I do want you to
itation of public debt which now realize that
gold is part of our
stands at $210,000,000,000 to $260^system and because gold is part
000.000,000. That shows the di¬ of our monetary system the Amer¬
rection.
of
Lenin, that we will not
lives in fortifying and
our
expanding the union of the toilers
of the whole world, the Commun¬
vice
put
Now,
Comrade
spare
$6,000,000,000, which is
growing constantly. She has used
the foreign exchange herself to
bonds.
bonds
of Lenin.
that
know
measure.
uttered over
'On leavng
us Lenn
bade us be loyal to the
principles' of'the Communist In¬
ternational/^ We
swear
to
you/
the, grave
will
of several years ago
a
it necessary to
oath he
into the sum
commercial paper or
such
'
repeat the
had
about
ought to
we
made
has
he
statement:,
"Stalin, deemed
minions and from other countries
between that and 100% by
that
and
necessary;
eligible
Government
The latter security by Gov¬
konw
of the world running
of
and in no way
courage
critical, but I think
an
open
Great
in admiration of Mr. Stalin's sin¬
the farmer
That is full employment and
was
cerity and
do
may
revenue
only be done in
full
pletely
we
national income esti¬
must have
at
order
debt, in
things
to produce the
so
Europe."
Post-War
and
book
published in 1943
and in reading this statement I
only want to say that I quote it
various
necessary
by
in
This
public
these
them out of
mean
that
said
our
do
to
revenue
not
"Russia
re¬
income from
we
book of David J. Dallin, re¬
cently published by the Yale Uni¬
versity Press. The book is entitled
another post-war require¬
serve,
to
this/moment.
post-war
another
raise sufficient rev¬
enue
to
do all these things
at
home and also create incentive by
that
banks
and
a
States
place,
national income, of
as
are
both
principal items.
first
toward
world
then,
requirement,
second
the number
of taxpayers in the United States
In
this country may have toward the
other countries of the world or
the
Our
at
is
There
quirements to take care of them,
are hurt, and those that
come home well, but seeking jobs.
That is our first requirement.
ernment
Now, I am going to approach
this subject further as to the re¬
quirements of our United States
in the post-war period and the re¬
quirements
of other
countries.
of outsiders.
way,
record
the
order
those that
the
into
than is
Already we carry, on the war but when the
have lost $2,000,000,000 of our gold war terminates those
depositors
stock to foreign countries through will ask for their money back.
our
They
will
ask
for
gold;
they will
purchases abroad and I would
help^ the nations of the world eco¬
nomically or financially unless we like to
just mention for the rec¬ ask for foreign exchange. That
ourselves are strong economically
ord a few figures to show you is going to be a tremendous bur¬
and financially and we must not
how important our gold stock is: den on the British economy.
forget that throughout the history
Then there is at the present mo¬
As you all know, our currency
of the growth of our country'the
is based on gold. It is tied to gold ment no decided policy in Great
United States market, the richest
and the Federal Reserve notes, Britain as to what is going to. be
market in the world, has been the
which
we
are
generally using, her future foreign-trade policy.
goal, of every other nation in the have to be secured by a minimum We know, too, she has had what
world. Every nation in the world
of 40%
gold and the difference is known as the sterling area. We
not
Therefore, I feel, in
these central bodies, cen¬
that I would like also to put
ment.
appropriations of over $24,-
000,000,000 to lend-lease; we have
legislative angle and I am assist¬
ing in raising and taking part in
tax raising bills to take the money i for lend-lease, or a total of $60,.from
the people of the United 000,000,000.
This
Congress has considered
States to engage in all of these
and
passed
UNRRA
and will
various operations,
n<j)t only do¬
mestic, but foreign. And so I feel, appropriate funds for that.
I would like to say that after a
too, that I might qualify by prac¬
like
that, anybody who
tical experience as an expert on record
these things, and that is the only says that the United States, that
is,
the citizens of the United
reason, members of the commit¬
tee, that I have the temerity to States, the Congress of the United
States, is unaware of its world
appear before you today.
responsibility and unwilling to
An excellent editorial appeared
participate, is a knave or a fool.
In the New York "Times" of yes¬
Those are strong words, but when
terday which I think it would be
anyone tries to traduce the gen¬
advisable
for
every
person
to
read.
It
is
entitled "A World erosity of my country I cannot
find words strong enough to em¬
Monetary Plan." I agree thor¬
ploy.
v,1
oughly with that editorial, which
I would like to say right here
is to the effect that there is a
that you must never forget those
misconception of the method for
things.
Remember,
we
cannot
stabilization: This setting up of a
many
to be placed on our
The first and probably
Thursday, May 4, 1944
Now, there is one other thing
t
greatest one is looking after
returning soldiers; the re¬
the
something other than
what is generally proposed by the
great international body
he is
either an isolationist, or worse.
or
country.
that
burdens
additional
one
going
are
our
own
debt but
public
will have the one thousand
economy.
(Continued from page 1819)
that
service
we
do,
FINANCIAL CHRONICLE
THE COMMERCIAL &
1836
.
t
.,
I
am
going to
briefly just one
read here
paragraph from
•
of
I went
these
to the bother, of
countries
of Europe,
tated. Even
of
the
finding,
worlds
that have been devas¬
today, while still oc-
COMMERCIAL & FINANCIAL CHRONICLE
THE
Number 4278
Volume 159
Securities Dealers Committee Sees
member
tion
of
the National Associa¬
of
Securities
Dealers, here¬
inafter referred to as "N.A.S.D."
The petitioners are
2.
resentatives
Origin of the Rule
"Securities
The
insists.
mittee"
spread"
Com¬
the
"5%
rule.
The
that
-
is
ukase
a
NASD
Board of Governors of the
attempt
by-pass the SEC which
to
to avoid the vote
bers who
are
given the franchise
such "rules" of the
with respect to
issue was promul¬
at
rule
N.A.S.D.
3.
is
Under
the
its
chise of its
said
ized
promulgate
the same
which it in fact is.
designate
said
gated by the Board without
submitted to the members.
being
of
view
the
Securities
tends
destroy
of
the
and
securities
for
markets
^
limit
to
Metz,
M.
rule is illegal:
assert the
"It
A.
and
Kole
A.
(c)
of the coun¬
try and is therefore against pubJic interest
and against public
smaller corporations
policy."
■
"It is
monopolistic in its oper¬
ation, contravenes the anti-monop¬
oly statutes in that it tends to
eliminate the small dealer in se¬
...
thus
and
curities
cripple compe¬
tition."
exercise
the
constitutes
"It
of
the legislative function which the
Congress had neither the inten¬
tion nor the power to delegate to
NASD."
.
*
set
Com¬
Dealers
temporary of¬
fices at 165 Broadway, New York
mittee
has
up
-Yv
petition in full follows:
City.
The
V> Before
the
Securities
and
Ex¬
IN THE MATTER OF
.J
,,
William S. Baren,
v
: '
;
G. Helbig,
Baron
Benjamin S. Lichtenstein,
4
.
In their
half
of
ated
for
behalf and in be¬
own
all
an
those
similarly
situ¬
order
nullifying, va¬
cating and revoking a rule of the
cupied by German armies, I know
you will be as surprised as I was
to find out how good is the credit
of
some
of
these
countries.
We go
in, and that was the pur¬
pose of this plan, as an individual
who has a good will, who wishes
to
sit
with
in
other
countries to
sound foundation under
the economy of the devastated na¬
tion which wishes to rebuild. We
place
can
can
a
stay in; we can come out; we
do anything we please in that
conference, maintaining our own
right of decision. But there is one
thing that I object to most in the
'Treasury bill. I am too proud of
my country and its reputation to
see
it placed in the position, to
use. the
common
term,
of a
"'weicher"; to go into something
with our eyes open, and then be¬
cause
we
do
not
like
the
way
going to withdraw. Let
in at all in the begin¬
ning until we know everything
about it. Under my bill each par¬
ticular case stands on its own legs
things
us
not
are
go
and
we
do
any
one
unless
not
have
we
to
go
want to.
;
ap¬
date
Board
of
About
during
or
October,
the Board of Governors of
N.A.S.D. passed the following rule
in substance: "It shall be deemed
result,
just and
a
customer in any se¬
of
into
the
be
same
applied
as
a
thereafter
N.A.S.D.
to
be
con¬
the
to
without
the
of
part
issue
as
mark-up of over 5% on
member
a
raise an
to whether there is a vio¬
lation of the aforesaid rule.
8.
Said
directive
and
dention
nor
gated.
had neither the in¬
the power to dele¬
of
and
law
trade
custom
and
which the N.A.S.D.
legal right to effect.
usage
is
without
It is unconstitutional be¬
confiscatory since it dis¬
(g)
cause
regards the profit motif in busi■'
and
a
-r
constitutes an illegal
legislative powers
It
of
governmental functions by
private association.
upon
It constitutes a burden
and impairment of inter¬
state
commerce.
(i)
(j) It is contrary to the com¬
law and to trade practices
mon
by inferring fraud
merely from the spread between
purchase and sales prices of se¬
curities despite the fact that no
representations of any kind ac¬
companied such purchases and
and
of
usage
smaller
country
corporations of
and is therefore
against public interest
against public policy.
It is unconstitutional be¬
cause
14.
and
it
of
deprives securities deal¬
property rights without
of law.
process
The
petitioners
are
directly
Octo¬
aggrieved by the said rule, their
ber 31,
1943; and on said date business impaired and their indi¬
enforcement thereof actually com¬ vidual
rights to engage in free
menced and has since been-con-J and
unrestricted
enterprise *as
tinuing.
guaranteed by the constitution and
or
about the 25th day of
October, 1943, notice was given by
business
quarterly dividend of $1.50 per
be mailed.
A
on
May
the Preferred Stock and
<
y
the close of business
on
DIVIDEND
the close of
at
Checks will
1944.
15,
The
Borden
Company
'
:
share on the
no par value Common Stock have
been declared, payable June 20,
1944, to stockholders of record at
dividend of 20$ per
a
: E. L. NOETZEL, Treasurer
May 24,
Esso
1944.
Checks will be mailed.
C. A. San ford,
Treasurer
The Board of Directors of the
Mew Tor\, April 26, 1944.
(Incorporated in New Jersey)
,
celled, revoked
nullity.
and
declared
a
COMPANY
OIL
STANDARD
has this
day declared the following dividends
stock, payable on June 12, 1944,
on
the capital
to
stockholders of record at close of business,
three o'clock, P.M., May 15, 1944:
Regular semi-annual
Office and P.
39
50$
per
cash dividend o!
dividend of 75$ per share,
cash
Extra
Broadway,
\
/•.<
> "
share; and
'
Checks will be mailed.
O. Address,
A. C. MINTON,
Secretary
May 1, 1944
New York, N. Y,
METZ,
Attorney for Petitioners,
Office and P. O.
165
SOUTHERN UNION
Address,
GAS
Broadway,
New York,
N. Y.
the "law
of
the
with.
land,
interfered
COMPANY
Dividend Notice:
State of New York
The
City of New York
Company
Board
clared
County of New York
(10c)
Directors
of
on
April
dividend
a
share
per
28,
on
of
1944,
of
ten
the
this
de¬
cents
common
stock of the Company, payable May
WILLIAM
S.
BAREN, BARON
G. HELBIG, and BENJAMIN S.
LICHTENSTEIN, being duly
sworn, depose and say that they
are
the petitioners herein; that
they have read and know the con¬
tents of
the
foregoing petition;
that the
same
herein
that
as
lieve
to those
to
and
to the mat¬
be alleged
belief, and
they be¬
matters
it to be true.
SWORN to before
day
as
stated
information
on
the
at
1944.
Northern
dividend
Trust
Company, Chicago,
disbursing agent.
F. W. SMITH
Vice
President
and
Treasurer
is true to their own
knowledge, except
ters
1944, to stockholders of record
close of business May
5,
Checks will be mailed by The
15,
me
this
of May,. 1944.
Fashion Park Attractive
detailed
A
Reorganizat
n
study
of
Fashion
Park, Inc., is contained in a spe¬
cial circular prepared by Simons,
Linburn & Co., 25 Broad Street,
New
York.
Copies of this inter¬
esting study may be had from the
firm
the
the
ment of the aforesaid rule would
On
■
per
stockholders of record
sales.
due
9.
182
ss.:
(h)
ers
later than
busi¬
■
ABRAHAM M.
•'Cd:•
.
(f) It is a modification of the
Conduct Committees that enforce¬
effective not
of
Treasurer.
Congress in fact never so dele;
tions further advised the Business
be
close
interim
Common Dividend No. 146
Petitioners...
gate to N.A.S.D. and which the
(1)
instruc¬
the
at
FRANKLIN.
'
(k) It tends to limit and de¬
a
No.
Dividend
Preferred
any
stroy the markets for securities
showing
recond
dividend of forty cents
share, has been declared on
the outstanding common stock of this
Company, payable June 1, 1944, to
An
'(40$)
COMPANY
.
the said Business Con¬
duct
of
1944.
No. 137
N.A.S.D. is a body
not legally constituted
Committees, and instructing
said Committees that transactions
ducted by
5,
Treasure/
(e) It constitutes the exercise
a legislative function' which
Attorney for Petitioners,
exercise
guide and measure in disciplinary
proceedings of the members of the
May
CURTIS
ELEVATOR
share
the Congress
of the security," and as a
part of the enforcement of said
rule promulgated a so-called 5%
spread
"philosophy"
in
effect
placing ceilings upon the spreads
between the purchase and sales
prices of securities.
7.
About the 9th day of No¬
that
stockholders
ness
EDWARD A. KOLE,
ness.
1943, the said Board of
Governors transmitted said rule to
the Business Conduct Committees
of the Association with directions
to
monopo¬
dealings
and
therefore
is
and
curity at any price not reasonably
related
to
the
current
market
vember,
and
rule-making power.
member to enter into any trans¬
action with
the
1944.
the
which is
1943,
a
9,
a
OTIS
competition.
exclusion of non-members; as a
Governors
prescribe."
may
at
record
June
1944
T3ordm$ jj
privileges amongst them
that of having its members par¬
ticipate in certain financial ad¬
Corporation as at such
the
as
meeting of the Board of Directors of
Products Corporation held April 26,
regular quarterly dividend of ten cents
(10c) per share was declared on the Capital
Stock of the Corporation, payable May 15, 1944
a
Automatic
1944
COMMON
giving to the N.A.S.D.
vantages
effective rules of fair prac¬
tice of the
At
CORPORATION
mem¬
listic
disapproved by the
Commission as provided in Sec¬
tion 15A of the Act, they shall be¬
come
Secretary
PRODUCTS
..
exclusive
certain
not
are
of
business
J
is special legislation
it
in effect
proved by a majority of the mem¬
bers
voting, provided, however,
that a majority of all members of
the Corporation have voted, with¬
in thirty days after the date of
submission
to
the membership,
and
share has
per
CLIFTON W. GREGG,
contravenes the law of the land
price
The Petition of
r
are
of
monopolistic in its
is
It
because
equitable principles of trade for
change Commission,
■
thereto
amendments
or
conduct inconsistent with
OF AMERICA
STATES
UNITED
\
Corporation, to be voted upon.
such rules of fair practice
be
W. M. O'CONNOR
AUTOMATIC
the Common Stock
stockholders
close
wit, the Maloney Act, which
to
each member of
If any
6.
Securities
The
the
sent to
to
(d) It was promulgated by an
organization, to wit, N.A.S.D.
created under an illegal statute,
or
be
of to
May 22, 1944. Checks will
mailed.
as
and thus cripple
Ex¬
amendments thereto,
shall forthwith cause copies there¬
practice
upon
operation, contravenes the antimonopoly statutes in that it
tends and will tend to eliminate
the small dealer in securities
said
Following
are
some
of the by-laws, provides in part: "The
grounds upon which the petition¬ Board of Governors, upon the
ers, through their attorneys, Ed¬ adoption of any such rules of fair
ward
$.15
on
Neither it nor the man¬
ner of its passage has been ap¬
proved by the Securities and
Exchange Commission.
Article VII, Section 1 of
5.
,
of
dividend
A
been declared
among
N.A.S.D.
the
of
vote
stock¬
to
May 1,1944
submitted to
not
was
1944,
15,
Common Stock
(b)
change Commission.
Charges in the Petition
iness
1944.
9,
business; June
declared
was
holders of record at the close of bus¬
the
will be mailed.
standing, payable on June, 15,
illegal
said N.A.S.D.
do
and
at
required by Article
VII, Section 1 of the by-laws of
rules, some¬
practice,
rules
It
bership
said by-laws
the
record
June
payable
Checks will be mailed.
(a)
the
of
of
dividend
a
share
per
the Common Stock of the Company,
on
Stock
of this corporation issued and out¬
grounds,
following
of
Checks
others:
not
and
Maloney Act, and providing
further, that the said rules are
subject to the supervision and re¬
the
contravene
close
rule,
a
as
The said rule is
13.
stockholders
to
rule and still
the
the
on
Preferred
standing, payable on June 15, 1944
to
designate the same as a
fails and refuses to
fused to
declared
failed and re¬
terpretation" and
times called rules of fair
providing
opposed
were
been
has
Cumulative
1944,
May 1,
twenty-five cents
of this corporation issued and out¬
said rule, illegally and improperly
characterized the same as an "in¬
provisions of the Maloney
to
share
meeting of the Board of Directors
a
held
quarterly dividend of $1,125 per
$4.50
large majority of
a
members
155
At
Preferred Stock
fran¬
membership, the Board
knowing that
well
as
the
to
of Governors of the N.A.S.D. well
an
by-laws,
May 1,1944
sub¬
A
15A of the Securities Act of 1934.
4.
said rule
mission of
organization
authorized by and created under
the Maloney Act
being Section
as
avoid the
NUMBER
DIVIDEND
New York 20, N, Y.
to the "philos¬
to
order
In
12.
com¬
Commit-
and
COMMON
30 Rockefeller Plaza
ophy" expressed therein.
the
Association.
The
voluntary
Dealers
COMPANY
majority of N.A.S.D.
rule
the said
has a Act, the said N.A.S.D. is author¬
of review over "rules" and
of NASD mem¬
power
a
"Securities
as
DIVIDEND NOTICES
THE ATLANTIC REFINING CO.
members were and are opposed to
tee."
persists, however, that it is merely
&n
interpretation.
The former
claims this attitude on the part of
the latter is a convenient
of
the rep¬
mittee of securities dealers known
Dealers
NOTICES
THl FLINTKOTl
and
A large
11.
National Association of Securities
might be superimposed
whole economy and the
competitive system fostered by
our laws for decades, strangeld.
DIVIDEND
ap¬
sion.
permitted to stand, would be the
forerunner of similar limitations Dealers, and for other relief.
Petition.
in
every
field of business and
The petitioners, for their peti¬
commerce, alien to our American
way of life, and would mark an tion, allege:
inroad upon the freedom of the
1. All of the said petitioners are
individual, in the absence of an duly registered securities dealers,
emergency, to do business unre- having
their principal place of
tarded and unrestrained by bu¬ business in the City, County and
reaucratic and illegal contrivances. State of New York and at least
With this as a precedent, price one of the said petitioners is a
upon our
vote,
passed upon by the Se¬
Exchange Commis¬
been
curities
(Continued from page 1819)
spreads
their
proval or disapproval, and neither
it nor the method of its inception
has
Small Business In Jeopardy
for
N.A.S.D.
the
1837
Potentialities
upon
request.
Ins. Stocks
Compared
McLaughlin, Baird & Reuss, 1
Laird, Bissell & Meeds,
120
Wall St., New York City, members
Broadway, New York City, mem¬
of the New York Stock Exchange, bers of the New York Stock Ex¬
have
prepared an interesting cir¬ change, have prepared an inter¬
discussing the reorganiza¬ esting comparison and analysis of
tion potentialities for selected se¬ insurance stocks.
Copies of these
curities of the Missouri Pacific data may be had from the firm
cular
this circular
request from
McLaughlin, Baird & Reuss.
System.
may be
Copies
had
of
Arbitrage Possibilities
Chicago, Indianapolis & Louis¬
Railway Co. has attractive
ville
upon
request.
upon
Fred
Of
Kelly Asst. Sec.
Stifel, Nicolaus
ST.
LOUIS, MO.—Stifel, Nico*
laus & Co., Inc., 314 North Broad¬
arbitrage possibilities, according to way, members of the St. Louis
"the " petitioners a circular issued by Sutro Bros. & Stock Exchange, announce the
respectfully pray for an order de¬ Co., 120 Broadway, N. Y. City, appointment of Fred S. Kelly as
10..- Contrary to ^the N.A.S.D. claring a public hearing upon the members of the New York Stock assistant secretary of their firm.
Kelly has been associated
by-laws, and the provisions of the matters and grievances set forth Exchange. Copies of this circular Mr.
Maloney Act, such rule was not in the foregoing petition and that may be had from Sutro Bros. & with Stifel, Nicolaus & Co. for
submitted to the membership' of the rule herein referred to be can- Co. upon request.
some time as statistician.
*
the
N.A.S.D.
to
its
membership
applied.
that the rule would be so
^WHEREFORE,
1838
THE COMMERCIAL & FINANCIAL CHRONICLE
render
a very important
service
financing of international'
trade, and every effort should be
directed towards the building up
Beckhart Presents A Post-War
in
Monetary Stabilization Plan
(Continued from page 1818)
of food and
These needs
clothing.
should meet to the utmost of
\ye
ability and without thought
our
of repayment.
'
resolution.
our
In view,
internal
own
however, of
monetary
and
fiscal situation, our ability to ex¬
tend credits is not an unlimited
Post-war
2.
Similarly, the ability of
loans, as opposed one.
grants, should be ex¬ borrowing nations to repay is not
In consequence, cred¬
tended for definite projects of unlimited.
economic merit, or in the words its should be extended largely for
of Congressman Dewey's resolu¬ purposes which will increase the
tion, for "sound economic objec¬ export ability of the borrowing
tives".
The terms of each credit country.
extension should be "tailored" to
...
"International / capital
move¬
fit
particular borrowing needs. ments on private account will
Careful consideration should be take place and will increase in
given to the credit-worthiness of the post-war period if the polit¬
the borrowing country.
ical, financial and economic en¬
3. Preference should be given to vironment is a favorable one. The
to
relief
loans, the proceeds of which will
be
utilized
increase the
to
creation
of
a
favorable
environ¬
ment presupposes
that the United
barriers,
that
countries
overrun
nation.
by
the
Axis
powers will achieve political
If borrowing needs associated
that the problem
of
with purely domestic require¬ stability,
ments are financed through ex¬ post-war inflation will be handled
successfully,
and
that
controls
ternal loans, a heavy burden
will be placed upon a nation's over foreign trade and over the
exchanges will be re¬
balance of payments without at foreign
at
the
earliest
possible
the same
time enhancing its moved
moment by those nations in which
ability to export goods and thus
the system of private capitalism
to repay its external debt.
prevails.
4. In the extension of financial
so
as
of the
ability
export
borrowing
States will reduce trade
the
"Moreover
the funds loaned should be
aid,
character to the funds
similar in
required.
{he
decade of the 'Twenties of using
short-term
funds
to
finance
of
an
environment favorable to private
international
finance
requires
that
The mistake committed in
creation
constructive
a
solution
be
found to
questions concerning re¬
parations and inter-allied debts.
United
The
should
Nations
long-term needs should not be neither attempt to collect huge
repeated.
Short-term
funds reparations nor insist upon re¬
should be used solely to finance
payment
of inter-governmental
short-term
requirements
and obligations resulting from the War
long-term credit heeds should effort.
Though the enemy pow¬
be met from investment funds. ers should be
required to return
5.
The United States should looted
goods
and
relinquish
stand ready to
seized
grant financial
territory, reparation pay¬
aid only if it is confident that ments, except in limited amount,
The
borrowing nations at the earliest should not be demanded.
practicable moment will remove United States must take care to
existing controls over import and avoid being maneuvered into a
export trade and foreign exchange position, where, as a result of
transactions, * and that they will loans extended to the defeated
not
such
use
controls
as
instru¬
of national policy.
Credits should not be
ments
6.
tended
United
the
unless
ex¬
States
is
willing to absorb the amount
imports necessary to enable
foreign debtors to meet interest
and amortization charges on their
indebtedness.
In
nations, and more
in
those
which
many
must resort to external borrow¬
ings, there will be an intense
demand for dollars, a problem
which can be eased if, in ac¬
cordance with
a
recent recom¬
mendation of the United States
Chamber
of
Commerce, this
country pursues "a construc¬
tive, liberal and realistic tariff
policy
designed
to
prevent
world-wide
sive
tariff
erection
of
such
walls
exces¬
as
fol¬
then
are
a
of
few
the
general principles to which atten¬
tion might be given when post¬
war
lending policies are being
formulated.
Not all foreign na¬
tions
will
need
to
seek
covering
loans.
Many possess dollar assets and
gold in sufficient amount to sta¬
of
discount market in New York
a
to
services of the sort
ably and effectively
by the London discount m'arket
prior to the first World War.
"In order to prevent an over¬
extension of such credits in the
perform
rendered
so
long period of time to provide the A number will possess gold or
borrowing nation with gold or ex¬ foreign assets. Some nations will
change reserves. Such a credit is be assisted by immigrant remit¬
exemplified in the Dawes loan of tances and by the donations of
800 million gold marks or about philanthropic
organizations.
In
190
million
dollars, granted to certain instances, as the enemy
from
Germany in 1924 to provide gold withdraws
the
occupied
reserves
for the
contribute
to
new
central
towards
the
bank,
estab¬
aggregate to any one nation, the
Reserve
Banks
might
maintain statistical records of all
habilitation.
foreign credits extended by com¬
mercial banks, classified by coun¬
tries.
Aggregate data could be
reported periodically to the lend
ing banks so that they would be
in a position to judge whether any
nation incurring too large an in¬
in
short-term account.
"The second type of demand for
arises in connection with
funds
credits for this
der
purpose
can ren¬
important service, it must
be emphasized that currency sta¬
bilization is essentially an internal
an
problem.
It involves the balanc¬
ing of governmental budgets, the
severance
of
the
commercial
banking system from deficit fi¬
nancing, the refunding of the
floating debt, the unpegging of
interest
rates, the re-establish¬
ment of free competitive markets,
of
the restoration
in
the
true balance
a
and
structure,
cost-price
the re-establishment of profit and
guide to production and
loss
as
as
measure
a
a
have
in
States
will
itself
important responsibility
an
providing
as
serve
of efficiency.
United
"The
a
a
dollar which will
firm basis for the cur¬
systems of other countries.
To accomplish this, the dollar
must be freed of all foreign ex¬
rency
change controls, gold coin re¬
demption must be reintroduced, a
balanced federal budget must be
achieved,
credit
the
and
in
case
commercial
not
must
be
bank
used, as was
decade
the
of
the
'Twenties, to meet the demand for
long-term investment funds.
"The United States can make a
further contribution to world eco¬
nomic
stabilization
the extent
to
of
the
The
bonds, offered
of eight foreign
25-year obliga¬
markets
countries,
were
tions.
■
"Although the Dawes loan
_;,'
the
"As
first
step
towards
an
international economic and polit¬
that
is able
it
international
by
an
central
bank,
i.
e.,
instituted by Germany, to provide
a
stable currency.
This experi¬
would
ence
stabilization
term
-
to indicate
seem
that
credits
following this war will not have
to
bq large to achieve their pur¬
"Experience
for
a
short
or
a
function
not only by granting
stabilization
credits
short-term
but also by
serving as a meeting
place for central bankers and as
bilize
their
currencies
and
to
an agency for research on world
purchase in this country the com¬
economic problems. The Bank for
modities, machinery and capital
"In general,
post-war credits International Settlements, which
goods which they will require.
was American in conception, has
Others will need to borrow for will be extended for the following
rendered
four major purposes:
important services in
purposes of currency' stabilization,
economic
rehabilitation
and
re¬
1. Trade finance.
with
these
functions
and its
2. Currency stabilization.
experience will be of great
value in solving impending sta¬
3. Economic rehabilitation.
required
bilization
4.
Economic
problems.
development.
can
be
secured
from
private
In each instance the funds re¬
"May I suggest that the Board
sources; in other instances, they
will have to be secured from the quired will differ as to length of of Governors of the Federal Re¬
life and as to the private' or pub¬ serve
United
States
Government
or
System give immediate at¬
lic character of the institution tention to the
from a government agency.
problem of enlist¬
meeting
the
need.
"Post-war
financial
problems
ing the cooperation of the officials
cannot he separated from those
"Trade credits of a short-term, of various other central banks in
»of the^ war itself.
In fact, they self-liquidating character can and the establishment of an institu¬
represent an outgrowth of the should be supplied by commercial tion similar to the Bank for In-
construction.
the
loans
In certain instances,
that
will
be
.
war
situation;
Justas
we
are
extending financial aid during the
course
of the war, so must we be
banks;
banks
1 "American
have
close
-
commercial
business
rela¬
tionships with American impor¬
prepared to continue this aid in ters and, through their correspon¬
the post-war period.
Our respon¬ dents and branches, are in close
sibilities in this connection are touch
with
foreign
business.
implied in Congressman Dewey's American commercial banks can
ternationaLSettlements, or in the
revision of the charter of the preent institution to make it an ef¬
fective
instrument
in
need
of
"The
second
tain
tion credit it that extended for
a
United
finance
States
working
another
of
Foreign
the
functions
of
the
Administration, and that
credits, in accordance with
Credit
such
Congressman Dewey's suggestion,
beV extended on a joint-accqunt
basis.
Inasmuch
the loans will
as
tend to become long-term in charr
stabilization
*
them
in
revolving
will
fourth
"The
final
and
type
of
credit need will arise from the de¬
this
country. Gold sire of nations to further their
will
probably not be available economic development, i. e., to
elsewhere, and the dollar may be expand capital equipment.
The
the only important currency free
greater part of such expansion
of foreign exchange controls.
If must be financed from internal
private funds
are
not available for
such loans, the United States Gov¬
should
ernment
the
doubless
assume
of providing
By doing So,
stimulate inter¬
responsibility
the requisite funds.1
this
country
national
can
trade
of
a
multilateral
character and promote world re¬
';.v,,;
covery.
"In order to facilitate the
grant¬
long-term
stabilization
by our Government in the
difficult period of transition from
ing
of
credits
a
to
war
pose
a
that
I pro¬
Foreign Credit Ad¬
peace economy,
a
ministration be established, oper¬
is the stabilization
of the British
were
established in the near "fu¬
ture, it could give immediate con¬
sideration
to
the
problems
in¬
volved in the stabilization of the
British
pound and to the role
which this country should/ play in
effecting such stabilization.
"The
mand
third
has
to
type
do
of credit de¬
with
the
loans
sources,
a
for much of it is of such
character
that
it
will
in¬
not
the export balance and, in
crease
will
consequence*
not
facilitate
the repayment of funds borrowed
abroad.
"In
certain
instances,
nations,
gold holdings
and foreign exchange assets, will
be able to procure in the United
by using their
own
States or elsewhere
the capital
equipment they desire. In other
cases,
capital expansion can be
brought about by direct invest¬
ments on the part of American in¬
dividuals and corporations. This
is the most desirable type of cap¬
ital import, since it does not sub¬
ject the balance of payments of a
nation to fixed charges.
"To
ance
is
the extent that the assist¬
of the American Government
required
and
justified in fin-
nancing capital development in
other nations, I would suggest
th^t the Export-Import Bgnk be
used for this purpose, operating
under the supervision of the For¬
eign Credit Administration.
The
experience which it has obtained
in the granting of such credits
will prove valuable in meeting
somewhat
similar
needs
the
in
post-war period,
.
"By Way of recapitulation, the
foreign
countries in the post-war period
(aside from relief grants) will be
funds required by various
those
needed to finance
interna¬
tional
trade, currency stabiliza¬
tion, economic rehabilitation, and
economic development. A certain
portion of the external credits re¬
quired can be supplied privately,
another portion may need to be
supplied by governments or gov¬
ernment agencies. In order to sim¬
plify and expedite the extension
of the credits which may have to
be granted by the American Governmept, I have suggested that a
Foreign Credit Administration be
established.
This
would
b.e
.
that will be required for purposes
of economic rehabilitation, i. e., to
charged with the threefold re¬
sponsibility .of recommending to
assist nations in building up in¬ Congress appropriation measures
ventories of raw materials and in in
order
to provide
long-term
repairing docks, factories, public stabilization credits, of participat¬
utilities, railroads, etc. Such cred¬ ing with other .nations in financ¬
its are closely related to relief ing economic rehabilitation, and
activities inasmuch as they enable of directing the work of the Ex¬
nations
to
resume
their
normal
port-Import Bank.
economic life and to become self-
•"This
suggestion
was
based
supporting. It is to this .problem upon and grew out of the prothat Congressman Dewey has in oosals
made
by
Congressman
particular addressed his proposal. Dewey. The Foreign Credit Ad¬
""Not
all
nations"wild need-to
borrow abroad for such purposes.
ministration
differs- -from- the.
Reconstruction
Central
<
Fund,
proposed in H. J. Res. 226, in that
iWithin the framework of prin¬
type of stabiliza-
the
to
of such credits constitute
long-term
credits will doubtless wish to ob¬
currency
stabilization.
in
services of
probably have to !be
credits after this war will prob¬ somewhat larger than that pro¬
ably be similar to that after the posed in H. J. Res. 226. Moreover,
last war. Not all nations will need foreign nations cooperating in the
to borrow to secure currency re¬ joint - a c coun t arrangements
serves.
Many will possess a suf¬ should be permitted to participate
ficient supply of gold and dollar with this country in supervising
exchange. Nations which stand in the use of the credits.
,
connection
of
Government
fund
environment
extended
assistance
stabilization
dollar. Once this is accomplished,
favorable
to Bank
for
International
Settle¬
an important initial step will have
or
by
the
Bank
for
enterprise, this country ments
been taken towards the stabiliza¬
Settlements
itself
should stand ready, within the International
tion of all currencies and the re¬
framework of the principles set operating
under
a
revised
If
forth above, to lend financial as¬ charter.
Such
an
institution construction of world trade.
the Foreign Credit Administration
sistance abroad.
Whether loans could
serve
a
most
are
the
by
armies
supply. ,
V1:'
;
!'■ ;
"To the extent, however, that
foreign nations must rely on the
with
private
long period, whether they are ex¬
tended privately, or by the Gov¬
ernment, or by one of its agencies
will
depend
upon
the
credit
standing of the borrowing nation.
British
acter, the amount of the
pose.
to the pound in terms of the American
importaitf
undertaken
and
capital needs, and the reconstruct
tion of plant and equipment, .!
the would suggest that the granting
to
institution similar
be
was
relatively small in amount,
proceeds were sufficiently large,
along with the internal measures
Although long
stabilization.
currency
will
order to maintain the
Federal
on
tion
American
to prevent a
complete suspension
payments to creditor nations
during the period of economic re¬
debtedness
countries, the work of rehabilita¬
lishment of a sound currency, and
prevent deep ating under the direction of a
Board of Governors chosen in the
business depressions and exag¬
nations.
A
prompt
settlement
manner set forth by Congressman
should be made of the obligations gerated booms and the attendant
Dewey in H. J. Res. 226.
The
erratic exports of capital.
due to this country under the
"Although the problem of cur¬ powers and duties assigned to this
Lend-Lease
Agreements.
The
Board, however, would be some¬
terms and conditions of the set¬ rency stabilization is fundamen¬
what broader than those dele¬
tlement should, in the words of tally an internal one and one
which
must
be
solved
by the gated in Congressman Dewey's
Article VII of the Master Agree¬
proposal.
Among other duties,
ment between the United States adoption of appropriate internal
this body would have the respon¬
measures, stabilization credits in
and
the
United
Kingdom,
'be
certain instances can prove help¬ sibility of receiving and passing
such as not to burden commerce
ful.
Such
credits are
of two upon applications for long-term
between the two countries, but to
stabilization loans to be granted
types: short-term credits required
promote mutually advantageous
for seasonal or temporary emer¬ by our Government, and, if favor¬
economic relations between them
able action were taken, of recom¬
and
the betterment
of
world¬ gency needs, and long-term cred¬
to
Congress that the
its required for the purpose of mending
wide economic relations.'
A fur¬
necessary appropriation bills be
ther necessary action in the clear¬ providing gold and foreign ex¬
introduced.
ing up of political obligations change reserves.
"The first step in any program
"The first type of stabilization
would be the repeal of the John¬
of
world
currency
stabilization
son Act of 1934.
credit can best be granted by an
ical
lowed the last war".
"Such
it is in effect
the reparation payments of those
of
particularly
nations,
the
Thursday, May 4, 1944
ciples set forth at the
this statement.
it
would
outset of broader
possess
oowers
"somewhat
and
responsibil¬
ities, and its functions would be
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4278
Volume 159
in
departmentalized
The
accordance
type of credit granted.
Its Board of Directors would be
selected in accordance with the
with
the
•
Dewey.
the
period,, the
post-war
We must be pre¬
policies.
controls
the for¬
over
exchanges
and
foreign
Through such controls,
exchange rates are maintained
at a given level. Such exchange
rates have no economic signifi¬
cance
in that they do not re¬
opportunity and a real responsi¬
bility in offering leadership in
the formulation
of constructive
international financial and com¬
mercial
of
ment
unique
United States will have a
price changes or
price
relation¬
True
not
rest
<
,
would
States
of
-
United
the
of
probably be con-
would
Fund
thus
credit
balance
be
given a
the books of
on
with
bank
member
crease
trols
reserves
*.
.
1
Similarly loans to the Fund
by the Federal Reserve Banks
(unless offset by a reduction
in
their
security
holdings)
induce credit ex¬
and
reserves
bank
member
increase
would
7:
pansion.
designed
cult
•
problem
?
2.
extension of
teria in the
Contrary to
tice
in
with
connection
mercial
com-
establish
no
extensions either
as
to
with
credit
for
criteria
would
purpose
would
f
*
,
•
right to a cer-
tain loan total.
It is obvious
conditions
that
under
loans
would
used
for
?■>'
;
rate of interest as a deterrent of
I
loan increases.
toms
of
'
causes.
The proposals
•
tension
depreciation
exchange
-rather than basic
r
of
rely
loans
on
the
solve
to
•
of
President
the
Foster
Motor
Banks,
Haulage
International
Law
of
the
Fu¬
The, Postulates, Principles,
Proposals—A statement of a Com¬
ture*
"International
equilibrium in the interna¬
payments and
!
achievement
of
external
*'
exchange stability assume that
'internal
1
has
inflation
been
tion" for April, 1944—Carnegie En¬
27, N. Y.—Single
25
cents
for
one
New York
copies 5 cents;
U.
S.
Giant
Department Stores
from Slump to Boom and Beyond
—Dr. Leo Sonnenschein—Midwest
paper.
that
cedure—C.
been restored and that the com¬
banking
divorced
nancing. 'Exchange
reflect
only
on
internal
basic
system
deficit
from
INC.,
has
for
2,000
ment
has
and
the firm basis of instability can external
stability be achieved.
Printing Co., Chicago, 111.—
of
a
and 58,636 shares
($55 par),
Holders of
stock of record May 12 are offered
stock
common
common
the
right
a
Rights
held.
expire
shares
subscribed
underwriters
will
at
taken up
be
share
a
$7
Un¬
by the
1944.
26,
May
$6.50
at
public
the
to
one share of com¬
share for each four shares
purchase
to
$6.50
at
mon
offered
and
Offering
share.
per
preferred to the public is
Proceeds from sale of stock
will
be
used ,to
defray
costs
of
con¬
struction expenditures.
Underwriters for
stock are First Trust Co. of Lincoln, Neb.;
of the
$105 a share.
price
&
Cruttenaen
&
Harold
Rauscher,
Paul;
Trust
United
Co.
Co.,
Abilene,
1944.
nia
E.
' Institute
Jarchow—Califor¬
of
stock,
of
rate
tions
Statements
of
(Extracts
United
Leaders)—United
Information
nue,
Aims
Na¬
Nations
Office, 610 Fifth Ave¬
New York City—paper—400.
and
Calif,
working
and
Filed
"Chronicle,"
Wyeth
Dec.
20,
March
9,
has
registered
Stock¬
rights to
value.
$15
at
of
share
per
Graham,
Dominick,
of
utility
Loewi & Co.,
Parsons
Co.,
&
PEERLESS
amounting
adjustment
on
will
to
$7,83 Va
stock and $2.66%
the 77c
preferred.
expire at noon
a
20.
May
plus dividends.
has
-
The shares
not
do
represent new financing.
Louis,
of
Business—Manufacturer
automobiles,
etc.
chassis
the
amendment.
Proceeds—Proceeds
stock
of
sale
from
to the selling stockholders.
Registration Statement No. 2-5360. Form
Lynch,
Fenner & Beane,
Jackson & Curtis, L. F.
Co., Schoellkopf, Hutton &
Pierce,
Webster,
Rothschild
&
Inc., I. M. Simon & Co., Stroud
Inc.,
Swiss
American
Corp.,
Wertheim & Co., and White, Weld & Co.
Pomeroy,
Co.,
&,
1944.
"Chronicle," April 27,
10
has
registration statement for $9,000,mortgage bonds due March 1,
1974, and 30,000 shares of cumulative pre¬
ferred stock
(par $100).
Proceeds from
sale of
bonds and stock, together with
additional funds from treasury will be used
to redeem on or about.July 1, 1944, $9,000,000 IV2%
first mortgage bonds, due 1960,
at
105 and 33,060 shares
($100 par) $6
a
first
Etock
preferred
to
are
at
rate
stock
on
offered
be
17
INDUSTRIAL RAYON CORP. has filed a
registration statement for -100,000 shares
$4.50 preferred stock, series A, without
value.
par
Address—West
Avenue,
Walford
and
Street
98th
13
ENGINE CO. has filed
STERLING
statement
istration
of
being
shares
304,075
for
which
reg¬
a
23,225
are
the company through underwrit¬
180,850 shares by three present
and
ers
of
stock,
common
issued by
of
textile
rayon
etc.
Underwriting—-Principal underwriters are
yarn,
Kuhn, Loeb ft Co, and Harriman Ripley &
falo,
N.
Niagara Street,
internal
com¬
sale of the new issue of
will be applied, together
treasury funds, to the
retirement of the corporation's promissory
notes to
banks, dated Jan. 3, 1944, out¬
standing in the aggregate principal amount
of $10,000,000, which were issued to retire
notes of the corporation in the amount of
$2,400,000 and to finance in part an ex¬
pansion program.. The retirement of the
promissory notes will discharge all of the
corporation's presently outstanding longfrom
proceeds
stock
preferred
with
necessary
any
is named
&
Co.,
New
Inc.,
principal underwriter.
chase
the
exercise of warrants to pur¬
shares of common, at price
share, prior to three years
100,000
$4.50
per
registration
effective
the
after
and
date
of
Registration Statement No. 2-5361. Form
(4-28-44).
of
common
has
filed a
shares
—
Salle
names
ment.
Offering—Company is initially offering
100,433 shares of common stock for
to
subscription
to
four
filed
will
additional
one
shares
held
to June
when warrants expire.
Subscrip¬
tion price will be supplied by amendment.
Proceeds—The
proceeds,
together with
other treasury
funds, will be used to effect
on
Aug. 1, 1944, of ap¬
redemption
the
stock
$105.50
at
per
share.
a
registration
(4-29-44).
mined
or
$3,250,000
Co.,
1944.
and
THE
including branches.
retail
class
fered
and
B
for
stock
sale
Martha
is
(no
March
March
16,
23,
of
5%
shares
CO.—12,850
cumulative
(par
Nqal
Wyatt,
Snyder:
ft
$100).
Wag¬
1944.
POWER CO.—
of Virginia
Virginia Public
Service Co. filed with SEC April 17, 1944.
ELECTRIC
VIRGINIA
amended
ft
plan
Power
for
&
merger
and
Co.
provides following changes
(1) $23,000,000 of 37o
will be sold instead of
$24,500,000 of 3%% bonds; (2) $9,000,000
of 2V4 Vo 10-year serial notes will be issued
instead of $5,000,000 2lA % 5-year serial
plan
Amended
original plan:
from
of
Vepco
of Vps preference
of new Vepco $5
stock plus, for the
7 cio Vps preference, $24.50 in cash and for
6% Vps preference $19 in cash (plus ac¬
crued dividends in both cases); Vepco will
restrict dividend payments on common to
an extent which will leave in surplus $11.020,000 over a period of 10 years as com¬
pared with original proposal of $6,000,000
over a period of five years.
Original plan
filed Feb. 28, 1944, details of which were
outlined in "Chronicle," March 16, 1944.
Bids for purchase of bonds will be received
by company at office of Engineers Public
Service Co., 90 Broad St., New York, before
receive
will
dividend
12
each
(3)
notes;
noon
one
share
share
preference
EWT on May 22,
VERTIENTES-CAMAGUEY
SUGAR
shares
CUBA.—696,702
of
($6.50 par), U. S. currency.
stock
443,850
Bryan
of
due
$1,663,500 of first mortgage (col¬
5% convertible bonds of company,
Oct.
owned by National City
Underwriters propose to con¬
closing and
1951,
1,
Bank, N. Y.
vert these bonds at or«prior.to
the
are
us.
L. *A.
Allen
and
by the National City Bank, N, Y.
underwriters have agreed to pur¬
Several
chase
outstanding
are
CO.
common
Of shrs.
lateral)
The stock
par).
that
—
goner;'R.S. Dickson & Co., Inc.; Kirchofer
ft Arnold, Inc.; Robinson-Humphrey ft Co.;
Brooke, Tindall & Co.; J. H. Hilsman &
Co., Inc.; Clement A. Evans & Co., Inc.;
A. M. Law & Co., and H. T. Mills.
Filed
March 31, 1944.
Details in "Chronicle,"
252,852 shares of common stock which
received by the underwriters on such
Cushman
ft
of¬
Cushman
as
mentioned,
,
Co.,
Inc.,
Filed Mar 29,
April 6, 1944.
shrs.
make up the
Harriman Ripley
will
total stock to be offered.
AMERICAN BAKERIES CO.—13,000 shrs.
Streets,
stores,
CORP.
conversion, together with the 443,850
of
eight
1944.
6%
stock,
&
previously
Charles
Baltimore, Md.
Business—Operates
TRION
Ingalls
a
to
of
Inc., underwriter.
Filed
Details in "Chronicle,"
preferred
outstanding.
&
31,
6,
1944.
OFFERING
unknown
are
do
H.
named under¬
1944.
Details in
is
promissory notes
ditional working
list of Issues
whose registration statements were f^ed
twenty days or more ago, but whose
offering dates have not been deter
covering 191,515 shares of com¬
(par
$15).
The shares are
Corp. and
financing.
Paul
Company also plans to issue
face
amount
of
installment
and use proceeds as ad¬
capital.
A. C. Allyn &
share.
per
UNDETERMINED
below
deben¬
In exchange of shares and $575,000 will be
applied to retirement of 5,750 shares of 6%
cumulative preferred of Sprague at $100
owned
present
April
The
1973.
Celotex
by
new
March
Filed
57c
(subor¬
debentures
30,
Chicago,
Co.,
registered,
OF
capital.
cumulative preferred
stock
(par $100).
Proceeds will be used
for the acquisition of a maximum of 8,649
shares of Western Grocer Co. 7% preferred
stock
Address—Baltimore
&
15,000 shares
OF
Registration Statement No. 2-5363. Form
1955.
CORP.—$1,702,260
Nov.
"Chronicle,"
proximately 29,788 shares of the company's
outstanding
$4.25
cumulative
preferred
for
.
has
19
for
1944,
1,
by
SUNDAY, MAY 14
'CO,
May
subscribe
each
for
stockholders.
be given
common
record
of
privilege
31,
working
for
income
owned
are
writer.
food
underwriter, with
of others to be supplied by amend¬
We
(4-24-44).
COAST
due
represent
Davis
Street,
other
and
principal
the
is
cago,
A-2.
part
stock
not
bonds
products.
Underwriting—Glore, Forgan & Co., Chi¬
S-2.
issued
CO.
La
South
Creamery
DATES
mon
18
MAY
CREAMERY
working
stockholders
proceeds go to selling stockholders.
Registration Statement No. 2-5356. Form
Issuers
tures
Electric
statement for 100,433
stock, $25 par value.
Address—120
and
6s
Dec.
due
$998,405 general mort¬
Paul H.. Davis & Co. principal underwriter.
Filed Jan. 24, 1944.
An
THURSDAY,
BEATRICE
registration
the
statement.
—
Salbs-, of
income
gage
first
CORP.—$1,500,000
bonds
redeem
to
April 6,
debt.
term
S-l.
share
engines.
against
of
be
by amendment.
Offering—Offering price
Holders
Underwriting—Burr
York,
Buf¬
Y.
Business—Manufacture of
bustion
will
Others
York.
New
named
the
stockholders.
Address—1252-1270
Proceeds
Chicago.
'
5%
mortgage
Cleveland.
Inc.,
1943. Details in "Chronicle,"
1944.
COAST
SPRAGUE-WARNER-KENNEY
Business—Production
April 27,
Details in "Chronicle,"
bidding.
16,
SOUTH
dinated)
of
will be
The bonds and stock
for sale at competitive
share for
SOUTH
WEDNESDAY, MAY
stock
for
on
cumulative
Interest rate on
110.
dividend
and
by amendment.
March
(4-25-44).
S-l.
OKLA.-—$1,-
preferred
$6,600,000 first mortgage
3^2% due Feb. 1, 1971.
exchange of $6 preferred of
Light & Power Co.
(sub¬
share basis.
Bonds
will be offered for sale at competitive bid¬
ding.
Registration effective Jan. 10, 1944.
underwriting group, with names of others
to be supplied by amendment.
go
Is
OF
CO.
cumulative
Filed Dec. 21,
head
amendments.
Southwestern
parts
engine
certain
and
SERVICE
5 %
sidiary)
parts for automotive vehicles.
Underwriting—Shields & Co.
by
1944. Details in "Chronicle,"
$100) and
bonds, series A
Mo.
for
underwriters
PUBLIC
Stock
Address—2320 Marconi Avenue, St.
due
use*} to redeem first mort¬
(par
issued and outstanding and
are
29,
1944.
10-year 5%
Jan.
1, 1954.
1944.
500,000
common
to the public
will be supplied by amendment.
The re¬
demption
and
sinking fund
redemption
prices will be supplied by amendment.
Proceeds—The entire amount of the net
Merrill
of
names
registration
a
debentures
Filed Mar. 29,
MANUFACTURING
statement for
stock, par $10.
NORRIS
filed
shares .of
March
Filed
underwritten.
gage bonds, reimbursement of company for
funds used to redeem preferred shares and
reduction in V-loan.
Price to public and
Co.,
Paine,
Details in "Chronicle," April 6,
convertible
stock.
McQUAY
Proceeds for working cap¬
Not
April 6,
CO.
underwriters, to
the 4,000
others
stopk at $100 per share
1944.
Proceeds will be
*
(4-25-44).
50,000
in
($100 par). Com¬
and
ital.
a
share
Registration Statement No. 2-5359. Form
S-l.
Details
PLOMB TOOL CO.—$600,000
Purpose—For refunding outstanding pre¬
ferred
To
ap¬
INC.—4,000
CO.,
without
customers
shares of preferred
M. Kidder ft Co., Ladenburg,
Thalmann & Co., Laurence M. Marks & Co.,
A.
is offering,
pany
its various
The exchange offer
on
IMPERIAL
shares of preferred stock
is offering to
7% cumulative
Granbery, Marache & Lord, Hallgarten ft
Hemphill, Noyes ft Co., Homblower &
Co.,
Weeks,
Filed
March
24, 1944.
"Chronicle," March 30, 1944.
ers.
exchanging their old stock for new pre¬
on
a share for *share
basis, with a
the 6 7c
5%
CO.—$500,000
follows: To redemption of $243,600
as
ferred
on
BROTHERS
sinking fund notes, due May 1, 1952, at
$243,600; to renewal of equipment,
$75,000; Tor working capital, $74,295,
and for post-war expansion, $80,000.
Il¬
linois Securities Co., Joliet, 111., underwrit¬
1,500;
Offering—The company
of its outstanding
cash
named.
100,
company.
holders
share
underwriters
No
1944. Details in "Chronicle,"
etc.,
Bingham, Shel¬
don & Co.,,
1,000 all of Milwaukee, and
A. C. Tarras & Co., Winona, Minn., 500.
of
pub¬
being
are
5%
57c
Street,
at
Co.,'Bear, Stearns ft Co., A. G. Becker ft
Co., Inc., Alex. Brown & Sons, Dominick
&
shares
($100 par).
Marshall
Underwriting—Milwaukee Co., 5,750 shs.;
Allyn & Co.* Inc., Bacon, Whipple ft
C.
North
plied
SERVICE
Wisconsin Co., 4,750; Morris F. Fox & Co.,-
1,500;
capital..
KLINE
15,000
cumulative preferred stock
Business—Public
to
Price
1,717 shares
sinking fund notes, due March 1, 1954.
be offered at 100 net, proceeds will be
/'/,
MISSISSIPPI VALLEY PUBLIC
CO.
shares
CO.—15,000
(par $1).
share.
April 6, 1944.
investment.
(4-25-44), ■;
PAPER
stock
per
Filed Mar. 30,
Registration Statement No. 2-5358. Form
reg¬
a
shares
proceeds will be used for erection of addi¬
tional
plant facilities or for retirement
and redemption of all or a part of $4.50
cumulative preferred stock or 3%
deben¬
tures.
Underwriters are Lehman Brothers,
IIECHT
War and Peace
from
Froceeds—For
S-5.
$30
working
Offering—At market.
share for each
three
Rights expire May 12.
Net
held.
shares
the
of
company
open-end, diversified type.
Underwriting—Bonds Incorporated, Kan¬
sas City, Kan.
new
one
statement
-
loans
of
currently offered to a group of officers and
employees at $21,50 per share under a
separate registration and prospectus.
Net
proceeds
($446,000)
are
t<> be
used for
Kansas
Kan.
plied by
filed
237,902
par
no
9
MAY
for
shares
for
Technology—
paper.
Minnesota Avenue,
Offering—Price to the public to be sup¬
holders of record May 2 are given
subscribe
and
Kansas,
COMPANY has
statement
common
&
Inc., Minneapolis. Details
TUESDAY,
FLINTKOTE
istration
Cole
ft Co..
Dallas;
Wood
E.
Pierce
of
Frank & Belden,
Proceeds
War Contract Termination Pro¬
in
Details
common
lic
Business—Investment
Chicago; Beecroft,
Co.,
Topeka;
Co.,
St.
capital.
fi¬
rates must
conditions
registration state¬
shares of $5 cumulative
filed
preferred stock ,(no par)
from
Law
been
CO.,
GAS
NATURAL
Offering—Offering price to the public on
shares is $3.75 per share.
An
additional
100,000
shares
is "reserved
year.
Co.
underwriters.
CARPENTER
of
par
preferred stock, series A, and 67c cumula¬
tive preferred stock, series B, the privilege
1944.
NEBRASKA
-
the 204,075
balanced, that the floating debt
has been refunded, that inter¬
est rates have been unpegged,
mercial
KANSAS
1944.
Proceeds for
Details in "Chron¬
1,
purposes.
April 27,
icle,"
exclusive
107
April
Chicago, un¬
of accrued
Inc.,
Co.,
Price
from
construction
dowment for International Peace,
checked, that budgets have been
competitive markets have
series C, due April 1, 1959.
Republic
derwriter.
interest
Concilia¬
tional balance of
the
Central
no
Milwaukee, Wis.
has filed a registration state¬
ment for $1,500,000 first mortgage sinking
fund bonds 4%
stock of
management,
GAS
NATURAL
NEBRASKA
-
SATURDAY, MAY
405 West 117th Street,
The restoration of a condition
City,
Business
cans—in
of
Address—917
INC.,
1944.
"disequilibrium in the balance
of payments" is never defined,
disequilibrium customarily re¬
f
MONDAY, MAY 8
KANSAS
CO.,
ex¬
inflation.
an
common
1
Address—1029
Broadway, New York 7, N. Y.—
both
Pacific
named
Co.
registration statement for
a
100,000 shares of
value.
7 r/o,
shares of its
and Industry As¬
sociation of New York, Inc., 233
r.
internal
equal number of
6% and 5 % % preferred
stock, the exchange to be on a share for
share basis plus a cash payment to be filed
by
amendment.
Stone & Webster
and
Blodget, Inc., and Harriman Ripley & Co.,
Inc., New York, are principal underwriters
Details in "Chronicle" April 27, 1944.
of
redemption
or
bonds
munity of Views by North Ameri¬
flects
220,078 shares of 5% preferred
stock' to effect the retirement by exchange
filed
payments. Although the phrase
.
registration statement for
a
220,078 Shares of 5% cumulative preferred
stock, par $100 per share.
Company plans
Co.—Post-War Planning Commit¬
;
"
INDIANA PUBLIC SERVICE
filed
has
CO.
paper.
exchange instability and disequilibrium in the balance of
:
Needs—W.
war
by
De¬
1944.
SHARES,
DISTRIBUTION
INC., has filed
SATURDAY, MAY 6
NORTHERN
000
Post¬
Transportation,
to
capital.
1943.
(4-25-44).
retire bank
Proceeds
ft
Registration Statement No. 2-5357. Form
QUARTERLY
filed
Man's Bookshelf
"Chronicle," April 6,
Names
public
1944.
1, 1951 and 11,400 prior preshares (for purpose of conversion).
Jerred
stockholders.
the
to
29,
Feb.
due
selling
the
Trust.
price
March
PRODUCTS, INC, — $300,000
convertible debentures, series of 1943,
5 fy
to
go
and
Filed
BEN-HUR
of others
the names
Proceeds—Proceeds
un¬
NEW JERSEY POWER & LIGHT CO.
Highway
with
Cushman
A.
L.
1944.
Details in
tee, Commerce
3. The Plan attacks the symp¬
;
their
weaken
pur-
disassociated from that of
exchange stabilization and that
they
would
become
frozen.
Furthermore the plan does not
contemplate reliance upon the
j
to
The Business
these
be
tend
supplied by amendment.
S-l.
WEDNESDAY, MAY
f i poses
u
which, if granted,
financial structure.
own
spective of its creditworthiness,
would have the
compelled to call for
nations
itor
f its desire to bdrrow and irret
be
it
continued assistance from cred¬
length of life.
Each nation
irrespective of the reasons for
or
"
and
currencies
weak
in
Co.,
by amendment.
SEC.
A.
-
attempted to function
in the imperfect world of the
transition
period,
its
assets
would
shortly become frozen
/statutes, the experts' proposals
1
Fund would
assumed;. the
tion Fund
banking
central
and
\
the perfect
were
effective,
become
course
accelerated at the discretion of
in "Chronicle," April 27,
If the International Stabiliza¬
loans.
normal
the
to be
group,
ft
Sachs
head
of
underwriters
amendments.
Offering—Price to the public to be filed
twenty
than
less
grouped according to dates
registration statements will
ago,
perfect
a
assumes
registration
whose
filed
were
which
on
Stabiliza¬
not be required.
usual prac¬
the
to peace.
International
Fund
one
cri¬
no
the
war
If the world
inflation.
Plan establishes
The
of
acter.
this country might
in
be that of controlling
diffi¬
period-of
world, in which economic and
political
stability
have
been
achieved, in which the interna¬
tional balance of payments is
in equilibrium and debit bal¬
ances are of a temporary char¬
States, might be the wrong time
economically,
for
then
the
1
The
tion
period which, from
point of view of the United
the
Inter¬
the
with the
cope
problems
;
post-war
1'
to
transition from
immediate
the
in
nature
very
national Stabilization Filhd is not
k'
exerted
J
on
its
By
//'The inflationary influences
; of the Fund's operations might
if<fbe
as
rent account.
credit expansion.
stimulate
to
perpetuate con¬
both capital and cur¬
manner
r
and
trade
international
exchange
controls,
the
will operate in such a
plan
the Federal Reserve
Banks
'.['which, when, used, would in¬
{
1
of
exchange stability.
Although the avowed : pur¬
pose of the Plan is to do away
The
devaluation.
gold
view
is true
from the unused prof-
tributed
its
of
issues
of
to issue the
exchange stability does
upon or
require ex¬
change controls but is founded
tion to the urgency of these ques¬
on
internal, monetary stability.
tions,
Congressman Dewey has
Exchange stability as opposed
tendered a signal service.''
to exchange rigidity has real
economic significance inasmuch
As a supplement to the fore¬
as
exchange rates are in congoing statement submitted to the
House Foreign Affairs Committee, V formity
with
the
purchasing
Dr. Beckhart submitted the fol¬
power parity of a currency.
'
The proposals of the experts
lowing critique of the proposed
tend to make a fetish of exExperts International Stabilization
Fund:
change rigidity. In fact, ex.change rigidity resting upon ex¬
l! 1. The operation of the Fund
change and trade controls is
might stimulate inflation in the
less desirable than fluctuating
Creditor nations and the inflation¬
exchanges coupled with free¬
ary influences might be
exerted
dom of trading in the foreign
at the wrong time.
exchanges and in commodities.
!
The
major
portion
of the
Most desirable from the point
quota
days
less
ships-
i
NEW FILINGS
List
statements
in
domestic
of
tails
Underwriting—Goldman,
trade.
international
the economic recovery of all na¬
tions and to the maintenance of
world peace.
In directing atten¬
initial
Calendar Of New Security Flotations
eign
flect
pared to accept this challenge and
policies and follow the
course of action most conducive to
to develop
(
trustees
per¬
proposals advanced confuse exchange rigidity and ex¬
change stability. Exchange rig¬
idity results from the establish¬
1
"In
to
controls.
exchange
The
procedure set forth by Congress¬
man
tend
would
Plan
petuate
1839
N. Y., principal
1944. Details in
underwriter.
"Chronicle,"
FINANCIAL CHRONICLE
THE COMMERCIAL &
1840
New England Pub.
REMEMBER
Teletype—N. Y. 1-971
IIAnover 2-0050
Thursday, May 4, 1944
Merrimack
Mfg. Co.
Markets
Firm Trading
Consolidated Cigar
OUR long experience, up-to-date trading
facilities, and well-trained staff
SUGAR SHARES
Co.
$4.75 Preferred
American
MAKE it possible for us to give you prompt
and
Serv.
efficient service in
Distilling
„•
Plain
<
r.ABL MAMS 4 r.O. Inc.
*
FOREIGN SECURITIES
OVER
-
-
,
TRE
-
SPECIALISTS
COUNTER SECURITIES
-
M. S. Wien & Co.
(Actual Trading Markets, Always)
Members N.
New York 4, N. Y.
50 Broad Street
AFFILIATE: CARL MARKS & CO. Inc. CHICAGO
Y. Security
Teletype
Dealers Ass'n
HAnover 2-8780
25 Broad St., N.Y.
—
N.
1-1397
Y.
Kobbe, Gearhart & Company
INCORPORATED
Profits In A Strait-Jacket
Members
.
.
inclusive,
to be allowed on
were
the particular article a profit "not
ordinarily to exceed 2% of cost."
Its
...
rather
items
at
loss.
a
effect, therefore, is to aid
penalize industry."
than
Producers earning on all
In his letter of Jan. 26, 1944,
profits
more
than Mr. Vinson limited the controls
double those of 1936-1939, were mentioned
to
apparel, but, on
to be allowed no profit on the
April 13, 1944, a new order was
production of the article in ques¬ issued, by Price
Administrator
(2)
operations
tion.
Chester
Bowles
extending
the
principle of the order to specified
building materials and to goqds
"finally sold to persons such as
figure had risen to $0,995*, an in¬
crease of 24%.
During the same
period,
index
the
17%,
of
increase
time.
and
Bowles have failed to keep
the prices
an
OPA
the
the
Vinson
Mr.
Clearly,;
112.1*
Yet
all
functioning
was
Mr.
down
of either raw materials
largest items ap¬
labor—the
or
distribution
and
ab¬
whenever
plus
packing
shipping
sorptive
capacity
exists."
This cost." In this case, nothing is to
means,
of course, a cut in the be allowed for general, adminis¬
profits of other concerns. Finally, trative, or selling
expenses, or for
the OPA is instructed to "review
income
or
excess-profits taxes.
existing price regulations for the The directive continues:
purpose
of instituting desirab-e
reductions
in
all
items
margins are excessive, in
order to compensate for the in¬
creases
permitted by this direc¬
tive."
...
On
Jan.
for
26,
1944,
Mr.
reconversion
production
to
from
war
production.
"This," he said, "was not so. The
directive
only to
was
peace
intended
manufacturers
to
apply
who
pro¬
duce
essential civilian goods un¬
mandatory orders of the War
Production
Board
designed
to
supply civilians with the basic
minimum requirements during the
der
mobilization
the
for
total
war."
Mr. Vinson stated that "in war,
we cannot rely solely upon price
and
profit differentials to guide
production into the most desirable
he
loss,"
amount
and
lines
of
goods
equally profitable.- Without some
direction,
manufacturers
would
naturally
produce
those
items
most
our
sufficient
cost
allowed
be
to
to
"an
his
cover
make
to
profitable,
war
effort
even
prices may, perhaps, be controlled
by a government which has forces
sufficient to enforce its decrees,
no
unable
dividual
pay
limitations
on
profits, thus tending to destroy
the motivating force of the free
enterprise system.
Economists
pointed out long
prices are the safety
valves of our competitive capital¬
istic
system.
Regulating prices,
return
a
its
on
business
must
man
also
profits large enough to
him for his time and efforts
he will give up his enterprise
or
and
seek
work
as
employee.
an
do
not
If enterprises
expand, there will be
as
hard
120
Broadway
to
back
sweep
as
Telephone COrtlandt 7-0744
Bell
Teletype NY 1-886
is, of
places
course,
wages
Thus, despite the
formula, and the ef¬
Steel
of
the
War
Labor
keep creeping
Board,
and Charybdis, and the further
inflatioh«goes, the more menacing
the beetling crag and the whirl¬
pool become. Rising prices penal¬
ize thrift; in other words, they
rob the holders of bank deposits,
bonds, mortgages, and life insur¬
ance
policies of their
savings.
Furthermore, rising prices lessen
real
the
of the
incomes
manufacturing
$0,801.
r
and
Bank
salaried
regulation leads to profit regula¬
tion, to regimentation, to the sub¬
stitution of a fascist economy for
the
competitive
enterprise.
It is
allow
system
,,f
present
fade
that
the
pace,
our
savings
away despite anything
price regulators can do.
It is also clear that, if inflation
continues, price regulation can be
effective only by regimen¬
made
rigorous as that charac¬
terizing Nazi Germany.
We
as
then, faced with this
problem: Is it better to keep what
a
are,
have
we
Preston An Officer
saved
for
a
day
This is
rainy
to retain our liberties?
Of Stone & Webster
CHICAGO, ILL J—-Stone & Web¬
has been elected assist¬
vice-president.
Alexander
M.
Tritschler,
for
since 1930,
ant
years
many
or
identified with trad¬
ing activities on LaSalle Street, is
now
associated
with
them
in
charge
trading
their
of
depart¬
ment.
Du Mont Lab. Looks Good
Gearhart & Co., Inc.,
Street, New York City,
Kobbe,
which
that
who has been
associated with them in Chicago
William S. Preston,
45 Nassau
have for distribution an attractive
above-quoted directives make illustrated brochure containing the
profits and free enterprise, annual
report for 1943 of Allen B.
is not fair to blame Mr. Vinson
du Mont Laboratories, Inc., and
Mr. Nelson
or
Mr. Bowles.
The
really guilty parties are those re¬
sponsible for inflation.
Among
a
preview of peace-time products
of. the Laboratories.
Copies of
this interesting brochure may be
had
upon
request from Kobbe,
&
industries
In
Dec.,
aver-
the
1943,
MEMBERS
NEW
YORK AND
209 South La Salle
CHICAGO STOCK EXCHANGES
Street, Chicago 4, Illinois
Co.
an
UNDERWRITERS
in
listed and
expansion of their facilities as
BROKERS
DISTRIBUTORS
unlisted securities through the
an
Copies of this interesting and
booklet
may
be had
Securities
LOS
Cold Storage 5s
1827
;
Utility Securities
American Dept. Stores
.
LOUIS
CLEVELAND
NEW YORK CITY
LOS
ANGELES
Hill, Thompson & Co., Inc.
Markets
1822
120
Tomorrow's
Says
6s
Direct private wires to
.1823
Securities
Security Salesman's Corner
-
JOHN B. DUNBAR
1824
CHICAGO
Estate
supervision of their partner
1825
Governments
Railroad Securities
re¬
Quaker City
Spring Street
4s
MR.
Reporter's Report.
upon
office in
Telephone Trinity 6345
under the
1831
Our
Co.
ANGELES, CALIFORNIA
at 634 South
1830
.1833
Mutual Funds
Public
&
Estabrook
quest.
1828
Municipal News and Notes.
on
their
attractive
from
'
Reporter
of
Almanac," Estabrook
& Co., 40 Wall Street, New York
City, discuss the outlook for rail¬
road traffic and earnings after the
Offerings Wanted
Stocks.
Our
issue
current
"Investors'
war.
announces
INDEX
Insurance
the
In
CRUTTENDEN & CO.
Calendar of New Security Flotations 1839
Real
Blodget, Incorporated, 33
South Clark Street, announce
hard choice to make..
For the destructive attack
-j
Tritschler Heads Trading
ster and
highly probable that, if we
to continue long
will
tation
-
drama.
free
of
inflation
the
at
(who receive 90% of the national
income) taxes sufficient to bal¬
ance
the budget;
but most re¬
sponsible of all are those voters
whose loud protests against ade¬
quate taxation struck
into the
hearts of their representatives at
Washington the fear of retribu¬
tion at the polls.
These are the
real villains in the present day
On the other hand, price
classes.
In Janu¬
up.
1942, hourly earnings in all
ary,
that in¬
between Scylla
us
the
are
legislators who did
place upon the masses
dare
not
condemned
and
Outlook For Rail Earnings
is the
ST.
New York 5
The truth
flation
be
to
officials
Gearhart
oncoming tide.
Canadian
W. T. BONN & CO.
of restraint?
long as inflation pours
out
new
buying power, prices
tend to rise, and they are almost
Page
Cent, of Ga. Mobile 5s, 1946
And, if price fixing con¬
tinues, how can profits be freed
it
opening of
Pressurelube
to rise?
those
As
Tennessee Products
Stand. Coated Prod. Pfd.
off its debt to the banks and
end the tendency of prices
upon
Mar., 1944, pp. S-3 and S-13.
Security Issues
di¬
are
sitting on the safety valve,
commonly leads to untoward re¬
might aged
Eastern States Pfd.
pay
thus
the
and
that his
claims
Vinson
purely
war
time
measures.
But, if price fixing
adds to efficiency in war time,
why discontinue it when peace
arrives?
Moreover, is there any
prospect that, when the war stops,
the
Government
will • promptly
boys and girls added each month
Mar., 1943, pp. S-3 and S-13
ENGLAND
Mr.
employment for the thousands of
ness,
1-576
potential working force of
rectives
no
*U. S. Survey of Current Busi¬
NEW
Teletype
york
like
sults.
5
the nation.
or
And this is not all.
NEW
to the
v
that
ago
earn
capital, it cannot expand,
will risk capital in an
unprofitable enterprise? The in¬
receive
more
to
enterprise is
an
who
Thus, apparently against his
will, Mr.. Vinson, who doubtless
believes
in
free
enterprise,
is
gradually being forced to place
and
yet
invested
included in the cost.
more
one
Furthermore, if
sell, for
and
has
discovered
just how to regulate prices, and,
at the same time, keep production
functioning efficiently.
but
a
In this instance, gen¬
eral overhead expenses are to be
Little
though
entire
the article."
forts
are
is
unit
total
all
which
manufacturer's
operation is being conducted at
channels—it is manifestly impos¬
sible to make the production of
items
and
,
Vinson
announced that the purpose of his
directive of Nov. 16, 1943, had
"been
widely
misunderstood,"
many
having "assumed that it
was designed to govern price pol¬
icies
"If
where
profit
cost,
Bell
telephone
price
materials
raw
from 96.1 to
rose
pearing among the expenses of
(3) In industries including pro¬
manufacturers.
Ordinarily, when
having divergent costs of
manufacturing
expenses rise, the
production for the given article,
the highest cost producer "whose
professional, institutional, indus¬ selling prices of factory products
output was needed" was to be trial, or commercial consumers," are expected to rise in roughly the
same proportion.
allowed no profit, and "whenever who use
But our admin¬
(the goods) i;n the con¬
practicable" should be allowed a duct of their "businesses or pro¬ istrators have been instructed to
What
price merely high enough to cover fessions, the prices being but in¬ "hold the line" on prices.
else can they do except to reduce
his direct costs of production.
consequential
cost
factors
that
The
directive
then
suggested can be readily absorbed out of profits?
that various producers pool their the
However, why should manufac¬
profits of the purchasers." Un¬
output. Exactly how this would der the order of April 13, 1944, if turers produce articles on which
affect the profits of the various the manufacturer of an article on they are not allowed to make a
producers is problematical.
which a price ihcrease is permit¬ profit? If they produce, they in¬
The
order
states furthermore ted is
making any profit on all cur the risk of loss. Stopping pro¬
that the OPA "will require neces¬
operations combined, he is al¬ duction seems to be the logical
sary increases in maximum prices lowed
on
the
specific
article procedure. All this shows that, as
to producers to be absorbed at
merely "an amount sufficient to economists have long pointed out,
subsequent stages of production cover the unit manufacturing cost even
in
the
face
of
inflation,
ducers
Trading Markets
Association
NEW 'YORK
Enterprise 6015
2-3600
REotob
...
essential
philadelphia
telephone
.
tions of
duce
Dealers
Security
STREET,
-
The purpose of
following condi¬ suffer.
my directive was to
guar¬
profit limitation:
antee
that
manufacturers
who
(1) Producers earning profits on
were
all
subject to these controls
operations
not
more
than
would
not
be
forced
to
double those earned in 1936-1939,
pro¬
only under the
NASSAU
4 5
(Continued from first page)
York
New
.....1825
Markets—Walter Whyte
1822
and Situations for Dealer*
Broadway, New York 5
@FedFRASER