Full text of Commercial and Financial Chronicle : May 8, 1958, Vol. 187, No. 5740, Section 1

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

UNlVcKSilV
OF MICHIGAN

ESTABLISHED IS39

9

|n2Sectjons

Section 1

1958

"The
INANCIAL
Re*. U. 8. Pat. Office

Number 5740

olume 187

New York 7, N. Y.,

editorial

better.''

the^e

words,

Dean

was one

of those "Jefferson-Jackson Day Dinners''

which various influential and hopeful Demo¬

usually

crats

think of
forward

say

all the harsh things they

can

the voters.

Mr. Acheson's notion of what is
wrong with the
economic system of the free world may be gar¬
nered from certain further remarks made at this

He

dinner.

that "the productive ca¬
pacity of the United States—and the same is true
same

says

Funds Intensify Their j
Defensive Investing Trend

rather

than

tax

our

anti-employment bias

system and calls for tax

"blind resort to

what

amounts

By A. WILFRED MAY

printing press money which would only aggravate an
inflation which has already become institutionalized too
much in America." Mr. Tyson warns we will condemn

Analysis of investment companies' portfolio operations
during first quarter of 1958 reveals rising ratio of sales
to purchases of common stocks as recession unfolded.

ourselves to chronic

unemployment unless, before it is
late, we so reform our taxes so that we encourage
job creation, production, savings and investment. Also

Erstwhile enthusiasm for "growth stocks" markedly
dampened. Buying, which was liberally devoted to "de¬
fensive" issues, was concentrated on banks,
insurance,

believes there is no "moral basis" for taxing the
producti** with higher tax rates, ami recommend* a

more

finance companies,

more

eign oils,

realistic consideration of depreciation

been

increasing.

experiencing inflation in basic employment costs
and
in
prices.
This simultaneous
decline in production with the rise
in costs and prices is a relatively
new
and
disturbing thing in our
history. It has ominous connotations.
Certainly it needs analysis and un¬
derstanding if suitable remedies are
to be sought and applied. Otherwise
there is always the danger that some
hastily concocted panacea may be

Europe—is not great enough, without stimu¬
growth, to perform, the tasks which lie

But

at

the

very

time

same

toward

have

we

and utilities.

[Tables appearing on pages 35 and 36 show Funds'
comparative investment positions; total common stock
and other securities
transactions; and individual
mon stock transactions
by industry groups.1

^

this at

time

a

when

good many
industrialists are beginning to wonder if they
have not gone too far in
enlarging plant in antic¬
ipation of a long continuation of extraordinary de¬
•'

a

mand. The statement is made, too, in face of the
fact that even the school
boy knows that our ca-

pacity to produce agricultural products—and for
that matter our actual
production of them—is
far in excess of demand, so much so in
point of

in order to
sequences

the farmer from the natural

save

con¬

of his overproduction.

advanced. ; I
R.

C.

Tyson

would

be

just how
if it is to be dealt with in

we

will

have

to

think

appropriate

.

■

*

Continued

on

page

33

in

terms

as

While

review

on

closed-end

and

their

by

companies here under
purchases of portfolio equities

a

preceding quarter, they stepped up their sales
considerably greater extent. Sales rose from $145

million to $237 million, purchases only from $244 million
to $290 million.
Thus, their net purchase balance actu¬

from

page

open-

increased

from the

This

such to do because

quite different

shareholders,

balance, reversing the previous

we

discover

manner.

investible moneys flowing in from

new

ally decreased for the third successive

44

beginning of the "bear market."

Tyson before the Executives Club of the
Greater Boston Chamber of Commerce, Boston, Mass., April IS, 1958.

PICTORIAL

STANY

address

that

to

of

to

people

Continued
♦An

■

then

advised

stocks, although in the

common

sold portfolio equities on
trend.

being

got into this situation

we

an

is not easy for management

think

well

language the real meaning
always very clear—that "today

is not

of the proposals

some

He further adds—in
of which

liquidation of portfolio

case of the open-end funds sales were still
substantially
outweighed by purchases. Significantly, the closed-end
managements, which are free from the constant pressure

sorry to say, such danger is not
matter of mere academic fancy in

view of

fact that the Federal Government under both the

party of Mr. Acheson and the Republican party
have been
laying out billions of taxpayers' money

During the first quarter of this year, with the stock
fluctuating between 12 and 16% below its allhigh, the investment companies accelerated their

time

am
a

com¬

market

adopted which will aggravate rather
than improve the situation.
And, I

•

m

automotive

issues.
Mixed attitude displayed
aluminum, building, chemicals, containers, drags,
electronics, copper, domestic oils, rails, textiles, tires,

Over the past year the volume of industrial
production
been seriously decreasing and unemployment has

has

been

gold mines, office equipments, for¬
steels, and tobaccos; with some buying
airlines, foods, iatmrance, nickel, retail, and

papers,

also noted

allowances.

certain

lated

ahead"—and

•'

to

too

about the Republican party and come
with proposals they think will attract

favorable attention among

of

reform

Acheson,

things have been going. The-occasion

way

Quarter'ylnveshnen* CompanySurver

Finance Committee

said to be contained in

Copy

a

TYSON*

U. S. Steel finance official attacks

Secretary of State, sets forth his idea of

former

at

In

ROBERT C.

Chairman,

rather

worse

Bv

United States Steel Corporation

shape. Without vigorous and

imaginative action it is likely to get

the

''I

present the economic system of the free

world is not in good

than

Price 50 Cents

Recession With Inflation

As We See It
"At

Thursday, May 8, 1958

time

In fact,

since

the

in the latest

Mr.

Section

SECTION—See

Annual Dinner of the

Two

candid

for

photos

Continued

taken

at

the

on

page

34

22nd

Security Traders Association of New York.

DEALERS

State, Municipal

in

and

U. 8. Government,

State and

STATE

Municipal

m

MUNICIPAL

AND

Securities
telephone:

BONDS
BROKERS

•

DEALERS

BANK

ON

OF NEW YORK

Burnham and Company

DEPARTMENT

MEMBERS NEW

YORK ANO AMERICAN

Net

Distributor

To

Markets

Active

Banks

'

Brokers

*'
-

vC"

'

V

■

*

1832

ESTABLISHED

New York Stock

p

HI

|

***-

American

Stock

Exchange
Exchange

25 BROAD

STREET

NEW YORK 4, N. Y.

£out/ut>e4t COMPANY
DALLAS




of

the

Province

of

Municipal Bonds

.

Quebec

'*

Commission Orders

3%% Debentures
Due

Executed On All

Canadian Exchanges

CANADIAN
,

FIRST

Capital

SECURITIES
Members

i

CANADIAN

*

"

BANK

$250,000

City of Quebec

T. L. Watson &Co.

DEPARTMENT

September 15,

•

PERTH AMBOY

Expanding

Payable in United States Dollars

V

Price

97

*4

to

Economy

yield 4.15%

Teletype NY 1-2270

DIRECT WIRES

TO MONTREAL AND TORONTO

Goodbody & Co.
115 BROADWAY
NEW YORK

for California's

#'

1966

MUNICIPAL BOND

Dombooti Securities
Grporaxkki

MEMBERS NEW YORK STOCK EXCHANGE

BRIDGEPORT

DEPARTMENT

Chase Manhattan

Exeluiiie

35 offices from coast to coast

Maintained

and

Stock

BROADWAY) NEW YORK 5

Dealer

•:■

i '
BOND

THE

Teletype: NY 1-708

Dealers,

1 NORTH LA SALLE ST.

CHICAGO

I

REQUEST

..Members New York

120
Bond Dept.

l

*

.

_

Harris, Upham &

STOCK EXCHANGES

STREET, NEW YORK 5. N.Y.
•
014-1400
COBURNHAM
TELETYPE NY 1-22*2

15 BROAD
CABLE:

•

Bonds and Notes

field report

THE FIRST NATIONAL CITY MNK

30 BROAD ST.,N.Y

Housing Agency

■

ARE NOW AVAILABLE

CORN EXCHANGE

Underwriter

latest

UNDERWRITERS

CHEMICAL

BOND

COpiSOFqUR

,

HAnover 2-3700

Public
:<■;?

,,

40

Exchange Place, New York 5, N. T.

Teletype NY 1-702-3

WHitehall 4-3161

DEPARTMENT

Ibttk of America
NATIONAL

$AVSinos ASSOCIATION

300 Montgomery St., San Francisco.

Calif.

2

(2058)
The Commercial and
Financial

For

The

Banks, Brokers, Dealers only

Try "HANSEATIC"
pride in the abil¬
ity of our large and expe¬
rienced trading department
cover

broad
It

an

of

contacts.

DONNA

pay you
to take
advantage of our nation¬
wide private wire service
and prompt service
in
your Over-the-Counter
problems.

M.

HOSTETLER

ment

Angeles,

A

made in 1937.

was

American

Thrifty Drug Stores

Co. Inc.

WOrth 4-2300

the

1920

PHILADELPHIA
Private

SAN

•

Wires

to

a

forthcoming
takes shape.

FRANCISCO

the

attitvw

Specialists in

Mallinckrodt
„

and

started

in

as

Chemical

in

writer
buuna

m.

nostetler

McpONNELL&fQ.
Members
New
York
Stock
Exchange
American
Stock
Exchange

Since

been

a

then, there
in

year

which

5

TEL. REctor 2-7815

in

months

chemical

$86.7

million

operation

Trading Market*

Products, Inc.

Bank of Virginia

.

Alabama-Tennessee Natural
Gas

First

Company
Co.

Scott, Horner & Co.
Lynchburg, Va.
Tele. LY 62

largest retail

LD 33

chain

in

dollar sales, its
average sales per
store exceed those of the
largest
chain by 25% or more.
Sales per
store
in
fiscal
1957

.

for

our

Digest, and

Monthly Stock

our

that give you

a

other reports
pretty clear

picture of the Japanese
economy as a whole.

lion.

1957,
$12.5 million,
of

new

figures

highs,
all

are

the

likely

61

Broadway, New

York 6, N. Y.

Telephone: BOwling Green
rhis

is

orders

9-0187

not

an offer or
solicitation lor
for any particv ar
securities

above

is

be

re¬

.

If

the

in

to

$1.33

per

than

share

12%

or

from

somewhat

the

$1.17

a

share in the six months
ended Feb.
28, 1957. For the full fiscal
year,
sales may
approximate $96 mil¬
lion, and it would be
surprising if

net

income did not
top $2.50 per
share.
The

expansion

the

management
itself is,

program which
has cut out for

however, at least

With

the

as

132

stores

as

im¬

record
now

to
date.
in operation

narcotics

the

million^

new

)Vap-/in

or

appears ; even

-

of

.

;/

•

,,

the

foremost

in

refining chemicals
of

purity

is

to be the leader
of
It is said that Mai-

so

necessary
in"
the first atomic
.

of

four

WALL

STREET

NEW YORK 5, N.
T.

tions

for

ard it
of 24

1957—

1956-..,

junior

store rather than

Thrifty has

new

stores

aspires to

a

as

—

a

22

loca¬

the

Refined

—

under

lease

new

openings annually.

DIgby 4-2727




parts

an

realism to

our

1.

of

rates,
other

profitability

Representative

depreciation
expenses."

marks

!

charges

The

and

above

1955
1957

the common stock

1958

lf56

(est.)

738,344
1,814,447
2,500,000

■<-!

Net Income

V

$857,361
367,182

£

approx.

1,400,000

on

local

inquiries.
£>./;
Reply by letter to Mr. John F.
Reilly. All replies will be
kept
,

in 'confidence.

J. F.

VV- fV/- V/ f-F;

1

Reilly & Co., Inc.,

Exchange Place, Jersey City,
New

Jersey

MAILING LISTS

com-

and

following

■■

or

over

hill

for

ments.

FREE:

their

?'■

t,

mailing list require¬
/ .?•

•

-

Mailing List Catalog

on

Request

dunhill INTERNATIONAL
LISTfCO., INC.
NEW YORK 16:444
Fourth Ave. MU 6-3709

CHICAGO

19,204,637
3,496,338

5: 55 E.

Washington St. DE 2-0599

N. Q. B.

15,708,299,

OVER-THE-COUNTER
INDUSTRIAL STOCK INDEX

255,COO shares
120,000 shares
$.80

$1,140,586
1,001,255
1,153,595
1,309,808
1,425,489
1,600,000

century

a

.66

42

Exoend»*"-es

of

looked to Dun-

$39
60

B

quarter

$1.97

approx.

A

a

financial firms have

Per Share

approx.

Research

1,171,686

call

re-

The writer is of
the opinion that
the

y

$559,270
629,057
711,927
948,811

to

are

Income

$1,576,638
605,732
1,061,945

v

the

;

Indicated Current
Dividend

1953

t

securities trader.

institutions and corporations—
follow up mail

-

items,
in the

of

directly from the
pany's annual report,

Working Capital
Common
Stock—$10 par...

1954

specialize

margin, the
steps to in-

additional

the

foregoing facts

Depreciation

to

Jersey securities:

Over-the-counter

2.

procedures
held total overhead
expenses near
1956 levels,
despite higher labor

Working Capital.

Before Taxes

add two qualified
staff

company's product line. Of
equal
the continuing efforts
to improve
operating

Net

far im¬

on

to

men

in New

importance,

Current Liabilities

Whether

unmistakable note of
the ambitious
program.

Dividends

We want to

operating fees totaled

medicinal,?

crease

Book Value
Total Current
Assets.

store rate

many
unknowns,
among
money
rates, the general
economic climate and the
avail¬
ability of desirable store
locations.
Suffice it to say that the
manage¬
ment aim is
high and that the
record of achievement
so

Securities Trader

Dealer Representative

N.

Sales of the
company's gennne of

result

upon

Liquid

offices .and labora¬
located in north St.

general line of coilk
mercial products was
an
improvein direct sales

Net Sales

$32,613,271
30,101,540

---

New

them

Exports—Imports—Futures

than

plants,

$32,613,271 r/in 1957, an 8.3% increase
over
the
$30,101,540for

Current Market.

depend

Raw

more

main

.eri-*statistics
speak
decisively 1 for
i-VT'-y' themselves "-and'therefor need no

^

-

this rate will be
attained in fiscal
1959, 1960 or 1961 will

SUGAR

are

Its

Like Best."

year for
company, which has branched
so far out into
general merchan¬
dise that it
may be more
properly
regarded as a variety or

department
drug chain.

in

Canada.

the

LAMBORN & CO., Inc.
' 99

years

present, in fact, Mallinckrodt1
more
definitely sched¬ operates, under a
embellishment
to
explain
four year
uled to be
why
opened by August, the
fix:ed/. Mallinckrodt yvr Chemical
fee, $50 million
worth of Atomic
Works
company could well have ten new
common/
Enerey Commission
particularly now in these
stores by next
facilities: Its
Value-sensitive times, is "The
Christmas, season¬ annual fee is
Seally the biggest time of
approximately $780,- curity I
and

Bankers

ment

high;

in this field
first persuaded the
AEC to choose
to produce
the
highly., refined

eigy pile.
At

12

sales of the

the

it

building

past

eliminating of submarginal
Accompanying the increase

to very

linckrodt's excellence

chemicals

Investment

„

and processor
and

industry.

&

Broadway, N. Y. 6 COrtlandt 7-5680

Malinc-

industrial
and reagent
chemicals were ahead
of 1956
despite
the
continued

founded / in
the

and, since 1942, has been

degrees
judge it

of

equipment; in the

million.

"Sales and

eraj

chemicals
compounds
used by the Atomic
Energy Commission.
Its reputation

some

York, Inc.

Affiliate

.

Tokyo, Japan
111

$6,975,116

the

1956.

leading refiner

high

New

*

Brokers

and los

.facilities,' -the

was

one

of rare

field of

Write

Yamaichi Securities
Co., Ltd.

this plant,
running well above

past four years,
has invested

Mersey/City,

last

in the United
States of

ether

commercial

J., New York City,
Angeles, Calif. A whollycompany has owned
and spent? out.«•
subsidiary, Mallinckrodt
ofChemicals Works, Ltd., is located
capitalized
that

and
highly refined chemiby a still higher set i
by cals used by
pharmaceutical and
August, 1958. In the six months
photographic
companies. It is also
through Feb. 28, 1958, sales were a
prime producer of
synthetic
$48,705,000 or 12% above those

placed

of

1958

Louis, Mo. Company also
occupies
plants,, warehouses and offices in

research,and start-,

Mallinckrodt

foregoing producers
to

,

share.

per

conclusion

It

information

or

Yamaichi
Securities Company

mil¬

made from

was

warehouses,

obvious.

1867.

$2.5

February

first

current

Call

refin¬
four year AEC
produc¬
In

plants and

tories

Milton Pauley

^

$5.5 mil¬

V-

All

in

proximately $81'jj

more

was

a

For

sup¬

capacity.

$14V2

(not

for

T*

.

hranch offlcu

preceding eight years,
$7,606,733;

add

per share for

our

reactor

the

krodt
new

ploughed back
earnings

a

said to be

In

the

years

working capital

pressive

Nomura Securities Co., Ltd.

six

to

JAPANESE
STOCKS

Ger-

,

oxides

,

we

for

owns

company's

rated

working capital
this fact

compounds

contract.

now

.

up. costs

to

Write

near

averaged
$672,000, up from $608,000 in the
previous year. On Aug.
31,

more

IN JAPAN

where

West

shipment of columbium-tantalum

pur¬

any¬

low the net

of the first fiscal half
in the pre¬
vious year and
earnings advanced

Opportunities Unlimited

be

to

columbium-tantalum

the

stock

chased

atomicenergy

commercial

Mallinckrodt

com-

outstanding.
31

of

lion

un¬

on

drug

including cash items

Colony Life Insurance

largely

We

book
value,
let alone be¬

Aug.

prjmary

fuefuse.

whose

common

through last

were

^be

plier

find

p a n y

numbered 129, up from 123 a
year
earlier. While
Thrifty is the sec¬
ond

be

tion

to

first

compounds

ery with

able

and net income was
$2.19 on each
of the
900,000 shares

Stores

has

refining and processing
Since then it
has/shipped

i nsuf ficient

can

12

sales

stock

Mobile, Ala.
Direct wires

many,
Japan, Canada, Denmark
and Argentina and is considered to

14.

any compara¬
ble high-grade

row.

the

its

the

bly because of

have been

through August, 1957,

In

i

NY 1-1557

Birmingham. A!a

Mallinckrodt

opened

over¬

publicity.

was thus the 28th in
succession in
which the number of
stores, dollar
sales and book value
have reached
new
highs, and all indications are
that fiscal 1958 will make
it 29 in

August,

1 *i *

Mallinckrodt

looked, possi¬

1929.

company has not grown in
both volume and net
worth. The
fiscal year

a

i\/r

1956,

chemical
these

Works
p

of

October

facility.

lork City

(39
Over
the
clearly indicates to the

that

been

the

Since 1917

C

Works

Counter)

1919

never

^

,

study

HAnover 2-0700

New Orleans, La. -

*

.

In

patttfv

Chemical
-

,

Carelul

it opened
first retail

store

has

SCRIP

Exchange
Exchange
19 Rector St., New York
6, N. Y.

2,500

the

ss

expansion

Troster, Singer & Co., New

drug whole¬

its

Air Control

of

/

o

company

saler

BROADWAY, NEW YORK

itself

wave

~

Thrifty story
briefly from
its
beginning,

a

120

of

Co!

&

Members New York
Stock
Members American
Stock

*

.

000 per year from
the AEC.

than 300 of
Mallinckrodt's
employees are chemists or
chemical engineers.
•

position to give

a

account

of

To trace the

5

Principal Cities

&

good

company's

was

RIGHTS

Steiner, Rouse

<

_

expansion.

Exchange

CHICAGO

•

appears to be in

up

pace

the

Teletype NY 1-40

BOSTON

Bought—Sold—Quoted

-

——■——

is

indication of

Member

Stock

Although

Works

Pauley, of Troster,
Co., New York City.

Singer &
(Page 2)

All of
progressively increased ffom
the security I like
50b/these,$50 million worth of AEC
best because, annually two years ago to
$1.00 at facilities
far from
were
designed by Malresting on the enviable present.
linckrodt's own engineers. All of
growth laurels the
At less than
company has
eight times estiMallinckrodt's research in atomic
won, the man¬
mated earnings, where it
yields
energy chemicals §ince 1942 has
agement is
better than 5%, the
stock, traded been
paid for by the AEC_
giving every
in the Over-the-Counter
Market,
More

stepping

Broadway, New York

Milton

dividend payments because of expansion needs, the rate has been

Thrifty Drug Stores Co., Inc.

Corporation
120

Angeles, Calif. (Page 2)
Mallinckrodt Chemical

the rule has been
conservatism in

California

r,

New York Hanseatic
Established

Hosteller, Manager Research
Dept., Hill Richards & Co., Los

in each fiscal year have been uninterrupted since the first pay-

Manager, Research Department
Hill Richards &
Co., Los

8

Louisiana Securities

M.

to

4

Associate

Thrifty Drug Stores, Inc.—Donna

be, nor
securities discussed.)

will

Thursday, May

.

Alabama &

Their Selections

particular securityr

a

.

Week's

country

for favoring

reasons

(The articles contained in this
forum are not intended
are they to be
regarded, as an offer to sell the

extremely

range

This

■;
.

Forum Participants and

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

participate and give their

We take

to

Security I Like Best

A continuous forum in
In the investment and

—

.

Chronicle

Available for

Re¬

19-Year Performance of

search, Deprecia¬
tion

■>n

1

35 Industrial Stocks

V/>-n«ngs

$3,276,494
2,236,044
2,927,467
2,996,963
4,411,622
5,500,000

FOLDER ON REQUEST

National Quotation Bureau
1

Incorporated

46 Front Street

New York 4.

N.Y

|

Number 5740

Volume 187

.

.

.

The Coinmercial

and Financial

Chronicle

(2059)

Effects of the U.A.W.

INDEX

-•.I By W. L. CRUM "
Professor

Emeritus

Professor

Economics,

California

yii:'

Crum

The Tranquil Rise of Carter

"

demand

r

-V

—A. B.

3

Products, Inc.—Ira U. Cobleigh—

negotiations, this of itself is
abandoned
the

f'

the

Hager, Jr.

that

assurance

he

has

<

6

*

The Role of American Business
and the Sources of Our
Strength—J. O. Wright
;
;
^

7

—

Facing Point of New Return

011

The Proposed Auto

;

IT

12

their

stockholders,
economy.—Editor.

the

Government

and

entire

our

Finaneing^Industrral Enterprises in

^

j

automobile

Mr. Reuther has
package
proach.

manufacturers,
outlined

make in the

two

a

sic

The
upon

minimum

/

economic

1

mands,"
for

a

each

com¬

panies.

The

:

and

•

calls for "prof;

Smathers

financial

-their

W. L. Crum

demands,"
11'

com¬

stockholders, GM executives,
soundness of
GM,
efficiency of the GM business;
the cyclical stability of the automobile industry,; the competitive
balance: within the industry, the
members
of
the
UAW
(despite

'

tary economic

•'

V Cyclical Instability

Aid to

Senate

^ Gt&rrici§6
damage

i

"

ostensible

xo
to- inese
these

Members Salt Lake City

Stock Exch.
Spokane Stock Exchange

i

26

1

Financing Is Obtainable

Exchange PI., Jersey City

DIgby 4-4970
28

JCY 1160

1

Exchange PL, Salt Lake City

DAvis 8-8786

Teletype: SU 155

-

Savings to Avert

(Letter to Editor)

21

Committee's Recommendations for

Federal

Railroads

22

Saul Fromkes Terms

Open-End Mortgages

Cut- Prices to Stimulate Home

*Life Insumince

,

HEnderson 4-8504

Teletype:

29

> Trend, According to Theodore IR Silbert

gains),
The vast

Vctriovts*
various

J.F.Reilly&Co.,Inc.

,

Equity Oil

Business Upturn in Mid-June Indicated
by Commercial Loan

short-run

the general public.

'

-■

39

include

•

♦

23

w

George Shamer Would Limit Credit to

>

.

20

the

second, the
." s upplemen-

I

victims

Ul S. Treasury, the GM

the

fvC once ssions

from the

These

1.9

Who Pays for Tariff Protection?—John L.
Rowe___

„

'

MINERALS

Market

of

victim

a

URANIUM

v>V

UNITED WESTERN

the Economy and Construction
Industry

on

' ■'

15

Latin American Countries

Small Business Will Disappear Unless
—Thomas Graham

mon

other

.

with

Report

PACIFIC

14-

18

_

Wardell, Jr

V —George Cline Smith

,

article, after commenting
the two beneficiaries of the

Plan.

the

;

and

wages

at

concerned

the

•

large increase
in

forth

(the UAW and the GM cus¬
tomers), presents nine sections

very

Mnany

A

of the analysis,
the appropriate

course

Plan

de-

calls

B.

___

How; Are the Banks Doing. Under
Easy Money Policies?
—Morris A. Schapiro
;

points.

The

first,, the ''ba¬

*

set

are

ap¬

W.

,

In
preliminary publicity con- similar for the other years. Varicerning UAW 1958 negotiations ous assumptions, which I need to

with

_______

American Investments and the Common
—James A. Moffett
1

—C.
,

LITHIUM CORP.

i

LivingstpnwC--l-------l--^--

Tlie Great Delusions—Charles M.
White.

*

FEDERAL URANIUM

a

Treating This Recession—J. A.

'

•

EQUITY OIL

Strike—Roger W. Babsoni___^_i__i______

Short and: Long Look1 at Government
Expenditures
r—William F. Butler

permanently. Accordingly, it is
to place in? the record at this, time

exhaustive analysis of the probable impact
of Mr. Reuther's proposal on the auto companies per se,

>

i

WHitehall 4-6551

10

__

__

}

Dept.

STREET, NEW YORK

9

United,'States and World Trade: U. S.vA.
Policy at the Cross¬
roads—Francis E. Simmons—

Taking

WALL

Plant and Capital Equipment

^—George F. Sullivan

v

Obsolete Securities
99

Telephone:

—

Mr. Crum's

obsoletes!

Close Relatives Growing Closer?

W. M. V. Ash_

•

'

f

:

good for nathin-g

but

.

5

Oil and Chemicals:
-

scheme

desirable

more

no

—is

4

Savings Banks Investments Under
Today's Economic Condi¬
tions—Alfred J. Cassazza____'___

'

the'automobile industry in current contract

on

THE NEW SACK

Cover

_—____

Although Walter P. Reuther, for perfectly obvious reasons, evidently
is: content to f drop his ^profit-sharing

m—mmmmmm—mmmmmjft

Procedures in Underwriting and
Selling Corporate Bonds

public, U. S. Treasury and: the economy, the author explains
why it could: (1) cause labor discontent,'resulting from vary-'
ing wage income for equal work (2) greatly reduce feasibility
of raising long-term capital; (5) impair stockholder and
execur;
tive incentives; (4) intensify industry's cyclical
fluctuations; ;
(5)^ reduce Federal5 revenues; (6) distort competitive balance
in. the industry; and: (7) hinder growth and
keep costs and •
prices up. Advises rejection and adds, "what's* bad for GM>
or for the automobile
industry, is bad for the country."
'

:

•

AMD COMPANY

Cover]

Effects of the U. A. W.
Profit-Sharing Plan—W. L. Crum

v

Jyf.

mmmmm

Trend

Keeession With Inflation—Robert C.
Tyson

Berkeley)

Reuther's

Mr.

Pag*

._

Emeritus

(at

provides ait ingenuous analysis
profit-sharing plan using actual data
reported by General Motors for the years 1954-57. In making ?
clear the implications and consequences of the
"plan" to the
firm and its owners, the industry, UAW
members, general
of

■

of

of

Funds Intensify Their Defensive
Investing
—A. Wilfred
May___

.j;

[iCHTfflSTflil

B. S.

Articles and News

University

3

2J

Economic Pl op

an

Western Gold
30

and Uranium

:

Buying, Urges Institute of
33

_•

Pacific Uranium

vitviiusj
victims,

;hit sharing.'
The present discus-,... and
particularly to the Federal
i
Sion is concerned with this second?:
Treasury and the general public,
!
package, hereinafter called ther
should lead to emphatic rejection
; Plan.
The Plan, as outlined in of the Plan.
.

press-

;

reports

Mr..

of

Reuther's

Regular Features
As

presentation of

j

particular

the

scheme, with

reference

Bank and Insurance

Business Man's

Cover

Stocks

23

—

Bookshelf

.v

General

to

Rimrock Tidelands

(Editorial)

.

*

i

We See It

v

First

Beneficiary—The UAW

L

Motors, calls for sharing the prof- repress reports of the Plan have
'its*
before; taxes: and before, not made-entirely clear whether

56

Coming Bvehts in the Investment Fieldu_____J

8

Dealer-Broker Divestment Recommendations

8

Einzig: "Wages Disputes and Sterling"!

6

Singer, Bean
*

—-

-executives'

bonus

but

after

de-.

the

vducting. 1Q%

of the Company's
capital—with 25-% going to UAW

^(presumably to its
,

I

,

to

share

UAW
g0

to

the

in

the

UAW

profits is
organization,

to be held in a trust fund or per*

members

manner.

I undertake

17

Indications of Current Business Activity

52

Mutual

emr:hapS; used-for'-various organization
ployed, by GM) and 25% going to
purposes for the supposed benefit
GM
customers, and with 50% left of the-members*, or is to go to the
for disposition by the Company in
individual members who are em-

the usual

From Washington Ahead of the News—Carlisle
Bargeron

r

Funds

*

^

Our Reporter on Governments——

in

ployed by, GM:1' In any case, we
this article to examine some of
Our Reporter's Report
can appraise the magnitude of the
the important consequences of the
Public Utility Securities.
UAW share by comparing it with
Plan, using figures for each of thethe- existing
GMpayrolls • for. > Railroad Securities
four years-1954-57.1
; y.
hourly-rate employees at plants in
'
Securities Now

|

basic5

from the

figures

annual

are

reports

taken

of

the

Company. The method of deriving
?other figures used- in the
analysis
5-nis

illustrated for the year 1956
hT a table at the end of the
article,
and

the

procedure

is

exactly

V*
11,

am

grateful for helpful

suggestions
made by; my
colleagues, Professors O. R.
fv Goodman and F. P. Morrissey; but I
assume
sole
responsibility for the com¬
putations and the
analysis, and for opini
ioirs expressed;

..

43

figure

for

GM

earnings

of. the

of ' certain
From this

deduct

salaried

j

16

Western Gold and

16

Uranium

2

;

Washington and You—

-

4

!

Hydrocarbon Chemicals

56

employees.-

•j See

amount, the Plan would
of the net capital —
on

page

page

cover

article entitled

fensive Ihvesting Trend."
i;:See Mr. May's article on

10%

Continued

:

Tlie Stale of Trade and Industry

before taxes and before the
existing provision for the bonus

year,

.

50

You—By Wallace Streete

The Security I Like Best

Sabre-Pinoit

46

Salesman's Corner.!

The Market.... and

DialJaa

45

Prospective Security Offerings.

Securities
'

According to press reports, the
plan would
start out with the

Los Angelas

Chicago

$

—

in Registration.:

the .U. Sv — a group presumably
about identical- with UAW members employed by GM.

Philadelphia

24

.

The

Direct Wires to

22

Observations—A. Wilfred May_

Pi:, N. Y

Teletype NY 1-1825 & 1-4844:-

f

News About Banks and Bankers——

Mackie, INC.

HA 2.-9000 40 Exchange

30

"Funds Intensify

Their De-

Vitro

Corp.

cover page.

^Column not available this week.

Western Oil Fields

'

Published

,

For

Twice

Weekly

Copyright 1958 by William B. Dana

many years we

have specialized in

FINANCIAL CHRONICLE

PREFERRED STOCKS

Reg.
WILLIAM B.
25

Park Place,

Spencer Trask & Co.
r'

,

Office

!

.

Publishers

to

9576

j

SEIBERT, Editor & Publisher

WILLIAM DANA SEIBERT, President

!

Members New York Stock Exchange

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•
Other Offices:
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REctor
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-

39

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PHILADELPHIA

j

"

i

Wires to

SALT LAKE CITY

The Commercial and

Financial Chronicle

. .

Thursday, May 8,

.

1955

(2060)

4

Carter does
sell on the same
price/earnings ratio as the others.
Assuming for example that 1958
earnings will run around $2.30 a
share, CPI at 27 Vz is appraised at
only 12 times earnings, against
15 to 16 times for some of the
more market-tested drug equities.
This discount may be accounted
for because the stock has been on
distribution.

volume

Tfacquit Rise oi

The

Inc.

Caitei Products,

"

:

U. COBLEIGH

By DR. IRA

Enterprise Economist

observations on the recent history

Setting down some

board

A

marked: "One way to

cabinet."
the

pick a good

laxant and

your

open

tains

con¬

margin calls.)

sense.

Vick's

is also sold under

and
Bi-So-Dol, all
household

t

•r*'

stocks)

"

Vnbleiffh

"r

■

ical, Bristol-Myers, Colgate-Palm¬
olive, and American Home Prod¬
ucts. A further inspection of the

cabinet

might

reveal

Little Liver Pills, or a
bottle of JVliltowns, produced by
Carter's

company,

sion

American

selected for discus¬

today, Carter

Products, Inc.

Although the Little Liver Pills
of Carter have been known for
:

except
been

a

major
pharmaceutical
break
through.
It has proved broadly
effective in the medical areas for

had the

been a

tween

Meprobamate

assure

collateral ill effects.

:

sales promotions; and a noticeable upturn pre¬
market.
: ( : ' \
Retail trade for the country as a whole ranged from 2%
below to 2% above the similar calendar week a year ago, Dun
& Bradstreet, Inc.^ reported. It added that consumer buying was
uneven
in' the period ended on Wednesday, a week ago, but
equalled or edged slightly above that of a year ago.
Cold wet weather hampered sales in some areas, while special
promotions bolstered activity in others.

vailed in the used-car

•

■

sales minded,

phai^pceutical.an^
This would

was

are

earnings state¬
and the general business

,

it was a one product taining, a licensing under the pa¬
with the pills piling qp tent, and paying royalty to Carter
the .earnings.
The 1950's, how¬ was unnecessary. So Carter sued,
ever, have carried Carter into an and carried its case to the Su¬
entirely new orbit, with net sales preme Court.
Carter won, and
and revenues (including royalties)
now appears in line (1) to receive
rising from $11 Yz million for the damages for past infringements,
fiscal. 1952 (12 months ending (3- from Mennen and Colgate-Palm¬
31-53) to4 $41,836,000 for fiscal olive, possibly above a million
1957.
;
dollars and (2) larger royalties in
Of course, there is
A number of things have ac¬ the future.
counted for this remarkable rise always the possibility that research
in earning power. "Rise" is one of may bring out some other equiva¬
them, a pressurized instant lather lent process, which does not con¬
reported now to be the second flict with the Carter priority; but
largest
selling
shaving cream. until that day comes, Carter has a
Another is "Arrid,"
the 1 largest good thing, and, in any event, is
selling * cream deodorant, accom¬ now in line for a windfall payment
panied, by Arrid Men!s Spray, a equal to perhaps 40c a share.
liquid • deodorant, ' and
Arrid
Analysts
who have reviewed
Whirl-In,
a
lotion one.
There the corporate progress at Carter
is also Nair, the largest volume have been a little startled that, in
seller in depilatories, and Colonaid, so short a time, new products such
a
newer
laxative introduced in as Rise and Miltown could so
195(6.
Arrid,' Rise, and Nair. ac¬ drastically change both the mag¬
counted for about 30% of 1957 nitude and profitability of the en¬
sales volume; Little Liver Pills terprise;- Carter is beginning to
For

years

company,

■#

an<ji Colonaid, about 11%.

look

4
The most dramatic Carter prod¬
uct, however, has been Miltown,
patented in 1955, arid rocketing
forward to sales of above $24 mil¬

a

national
week.

shown
research and

It

has

great prowess in
manufacture; and it has demon¬
strated remarkable merchandising
talents in bringing new products

lion for 1957. This renowned tran¬

rapidly

so

quilizer is based on Carter's prin¬

and

profitably

its dividend to the

working magazine that the current inventory situation
mates that of 1954 just before metaiworking companies

to

thing, steel ingot output should jump 10 points in the

sim¬

Commenting, "The Iron Age" points out that "this is brave
a time when mills are operating at half speed and order

talk at

give no hint of an upturn. Yet some steel men feel 10
points is a conservative estimate of the coming upswing."
Behind this estimate of the steel market is the feeling among
books

steel

011

any

more

approaching the point where the
rush business. The mills figure

the end of May about 20% of new orders will be on a

about 10% of total capacity. That, they
is about as far as you can go. When rush orders pushed
10% of capacity in 1954, deliveries began to lengthen.
At this
same point, customers began building inventory.
Here is another optimistic note:
At least one major mill
believes' that April, will prove to be the market turning point
when the figures are in for the year.
The mill reports that the

say,

in

shipments

checked

was

more support from construction, accord¬
The magazine says the biggest improve¬
ment in the market is coming from plates, structurals and other
products that go, into construction. Bar sales are up slightly, but

getting

are

RALEIGH, N. C.—William K.
Tate is now with Reynolds & Co.,
120 South Salisbury Street.
He

ing to "The Iron Age."

was*
previously * with
Merrill
Lynch, Pierce, Fennel* & Smith.

not
are

enough to indicate a definite trend.
still holding back 011 orders.

that

1

"

-

.

Would like to hear from brokerage houses

and

the

New

Stock

York

is

and

—

now

Cincinnati

Exchanges.

With First California

Financial Chronicle,

Place, New York 7, N. Y.

after

a

adjustment,

rise

for

March

the

since

instalment

in

was

auto

loans.

On

a

seasonal

Credit
repair

and modernization loans declined slightly.
Instalment
13

j

credit

basis, auto loans dropped some $223,000,000 during March.
on
other consumer goods and personal loans rose but

He was

.previously with J. Logan & Co.:

in

credit

dropped by $180,000,000, after
second straight month of decline
early 1954, the Federal Reserve Board noted.
The figure stood at nearly $33,000,000,000 at the end of March,
up nearly $1,500,000,000 over March 31 last year.

seasonal

consumer

(Special to The Financial Chronicle)

WHOTIER, Calif. — David W.
Thayer is now with First Cali¬
fornia Company, Incorporated, 117
East Philadelphia Street.

asserts
$100,000,000

if

Instalment

if they

One major railroad

New instalment credit extended during March, on a seasonal
basis, amounted to $3,193,000,000, down from February's $3,235,000,000. In March, as in February, nearly all the decline in new

distributors of mutual funds.
Box C-43, Commercial and

companies

-

help is forthcoming it would plan to spend
almost immediately for capital goods.
"

Bernard
with
W.
D.
Gradison
&
Co.,' Dixie
Terminal Building,
members of
Jr.

Automotive

Another important user of steel could be the railroads

into
r

the

month

had been a

~

The mills

Chronicle)

April and bookings at

in

May were slightly higher than they

earlier.

get the help they have been asking for.

TOP FINANCIAL WRITER-RESEARCHER




take

rush basis and will equal

(Special to The Financial Chronicle)

25 Park

cannot

that by

situation is

that the

men

mills

Reynolds Staff

Markstein,

climb

at least one-half million tons in the same period.

start of

M.

next eight

Monthly steel shipments figure to

weeks, steel men say.

drop

(Special to The Financial

production because

thinking about forward booking and more inventory."
If this analysis is true, and if past performance means any¬

growth and
rise in stature of such companies
as G. D. Searle, Merck, American
Home Products, may want to take
an
analytical look at CPI today.
It seems to possess most of those
qualities
that
can
convert an
equity from an attractive specu¬
lation to a mature investment is¬
sue.
On second thought, it's dif¬
ficult to call a stock a speculation
when it has paid consecutive divi¬
dends for 75 years. Many authen¬
tic "blue chips" haven't done that.!

Joins

may

the plant loses

who have watched the

CINCINNATI, Ohio

:

Or it

it
If
of the steel delay, it will start

plant will be told; it cannot get the delivery
get a promise but not the actual delivery.

"The

official.

present

With W. D. Grad'Ron

'

a

wants.

Those

satisfactory.

approxi¬
switched

policy of inventory reduction to one of inventory buildup.
"At some point in the next month or two, a plant is going
come in arid ask for rush delivery of steel," comments one mill

from

pler with the listed common being
the sole security. Working capital

is

_

nearing rock bottom, this trade authority declared.
Several of the largest mills have told the national metal-

indicated rate of 80c.

position

....

volume

July to

Capitalization couldn't be

metaiworking

may

analysis of steel users inventories based on the increasing
of last-minute rush orders indicates that steel stocks are

An

has acquired, over
6,000 shareholders who have seen
their stock sell above 30, and in¬
crease

industry, steel stocks in the hands of

be approaching the danger point "The Iron Age"
metaiworking weekly, reported on Wednesday of .this
•
1 : •

companies

Carter

date,'

lot like some of the larger

pharmaceuticals.

„

vately held company last

,

In the steel

out," it is
at a company
going forward at such a spectacur
lar pace.
Perhaps the business
uncertainties elsewhere have
bulged the sale of Miltown! How¬
ever
that may' be, considerable
confidence must be reposed in
"bottom

refreshing to look

(totalling

decline for the second week

.

ments,
discussion relates to when the re¬

listed on the New

whole shows

with initial claims for unemploy¬
ment benefits dipping* 3% in the week ended April 19. Most of
the' decrease was attributed to the fact that fewer workers filed
because
a
new
quarter's wage credits had become available.
In addition, a seasonal pick-up in food processing and construc¬
tion activities lightened the California total, while Alabama re¬
ported fewer cutbacks in the textile, apparel, rubber and trans¬
portation equipment industries.
The largest week-to-week in¬
creases occurred in Michigan, Illinois, Missouri, New Jersey and
Pennsylvania.
•. ' ' ■
i? • .
- '•
-

2,690,000 shares)
not be ignored. Carter has clearly
York Stock
established its patent right to this
Exchange last October, trading
pressurized
aerated
immediate
under the ticker symbol CPI.
;
lather process.
It has licened 14
Carter is actually a quite old manufacturers
who, under this Carter Products, Inc. and its man¬
company having started in busi¬ process, turn out shaving creams agement on the basis of perform¬
ness in 1880, and having paid divi¬
Investor acceptance here
using their
own
brand names. ance.
dends on its common since 1883.
Some, however, thought that ob¬ has been rapid, and from a pri¬

issue

employment situation for the country as a

The
a

introduced.
companies

many

will

persist
earliest
period.

by special

week

turning in "tired"

cession

noted, however, that

Spot checks by Dun & Bradstreet, Inc.. indicated that new
sales were boosted considerably from the previous

r

Carter - Products
proprietary drug

cheaper substitute
so

pro¬

passenger car

higher plateau of earn¬

When

car

industry's severe/ manufacturing, adjustment will
throughout the summer months a prelude to some of the
shutdowns for model changeover seen since the pre-1940

-

ment of

one-week shutdown. 4 "Ward's"

ing a severe

represents approximately 30% of ing' power and insulate', against
the market for tranquilizers in the a severe dip in profits if a leader,
U. S. Carter also uses it in com¬ such as Miltown, were superseded
some, competitor,
or
by a
bination with tridihexethyl iodide by
in its Milpath,

passenger

the

toiletry 'divisions.
a

week,

industry last

automotive

the

In

duction, according to "Ward's Automotive Reports,*' scored a
35.8% increase as Chevrolet resumed full-scale operations follow¬

and

ethical,

Business Failures

presented a more favor¬
week preceding. Electric
gains in the latest week
with steel
production currently scheduled at 50.0% of ingot
capacity following declines for five successive weeks.

aggressive, would seek a
evener
balance be¬

so

Index

picture than was the case in the
kilowatt output continued to reflect

; ■:

agement so smart, so
and

Production

production the past week

Industrial

changing its complexion
with the arrival of
Miltown.
While the ethical (end
of the business has "wagged the
dog" in the past couple of years, ;
it would be expected that a man¬

prescribed use has not been ac¬
companied by severe reactions or

and

intended,

Auto

able

company,

better

was

indicated in treat¬
gastrointestinal disorders.
Royalty income of Carter Prod¬
opportunity to become a partner
ucts, Inc. is very important since
in this long-profitable enterprise
it accounted for more than 50%
until July of 1957, when 500,000
of net for the last reported fiscal
shares of Carter common1 were
year.
The major royalties from
publicly- offered and e a g e r 1 y Miltown have already been men¬
bought at $22 a share; and the tioned but those from Rise should

decades, the public never

has

Inc.

Price

A

sufficiently time tested.
net has moved for¬
ward to keep pace with gross in¬
come.
It was 25c in 1953; 80c in
1956; $1.74 in 1957 and probably
$2.25 or $2.30 this past fiscal year
(ended 3-31-58). This is a pretty
steep rate of acceleration to. main¬
tain and a measure of flattening
out is expectable due to large out¬
lays for research and stepped up
"

Food

and

share

.

Trade

Commodity Price Index

and Industry

yet been

its

it

which

Retail

State of Trade

stability of earning power,
recently attained, has not

advertising.
Historically

Production

Electric Output

Carloadings

at levels

Per

Steel

The

distributes Miltown completely

meprobamate has

a-The

asVickChem-

the

consideration

abroad in most countries,
in France and Canada.)

excel-

medicine

in

(and

Cyanamid

companies
e n

licensing agree¬

Laboratories division of

direct

to sueh
distinguished

you

1

composed,

royalty payments totalling

Cream,

(and

urgent

of
almost
$2 million in 1957) to American
Home Products, Merck, and Amer¬
ican ' Cyanamid. ;
(The Lederle
ments

patica, PalmShaving

olive

words,

should
event

The meprobamate

.

powder, of which it is

Vapo-

Sal He-

Rub,

tensions and in¬

(Perhaps brokers

keep a supply at hand in
of drastic market drops, or

quite-a

of

bit

synthetic soother of

a

"Board" less than a year,

because

nervous

somnia.

remark

actually

the

cipal ethical drug product, meprobamate. Miltown is a muscular re¬

re¬

medicine
Although spoken in jest, anxiety,

is' to

stock

once

wag

room,

of this

investors might

unusual drug company, and some reasons why
he attracted to its stock.

if

however,

not,

debt repayments in March came to
!

•'

•

.

V-

-

-

,

;

Continued

$3,373,000,000
on

page

42

u

Number 5740

olume 187

The Commercial and
Financial Chronicle

...

(:•

,

should sell mortgage bqnds, count obtains a- supply thereof.
debentures or. raise equity money. These generally consist of«
copies
through the direct sale of of the invitation to bid, statement
stock, or.,through the sale of con¬ of terms and conditions of
pany

in

dividual

underwriting firms but,
genbral it is believed that most
firms which act as managers; of
bidding accounts follow proce¬
dures with respect to Price Meet¬
ing similar to those employed by
in

either

And

bids,
debentures; the term of the form of bid and proposed
financing, that is, whether purchase contract, the indenture,
bonds, for instance, should mature preliminary legal opinions and

Selling Corporate Bonds
Bv A. B.

vertible
debt

IIAGER, JR.*

Vice-President and Syndicate
Manager
Halsey, Stuart & Co. Inc., New York City

in

the merits of this method—is made clear

from the time it is first known

starts

offing
won.
The experienced syndicate
general ntle, his firm does not

the terms of sale after it is

to

explains why,

manager

bonds

recommend

expounds

as

a

should

by Mr. Hager who

issue is in the

an

contain

nonmailable

20,

say

25,

to

other

restrictions, if

be

set

These

opportunities in store for those

provisions;

Bidding Accounts
with

generally the larger firms,

adequate personnel and the

financial capacity to assume rela¬

entering into

now

is

sue

the

formation

tively large underwriting commit¬
ments, which form and act as
of

since

conversant

bidding
(groups of underwriting
firms which severally will par¬
ticipate in making a bid). Unless
accounts

it

to

comprises the bulk of our own
corporate business. Furthermore,
most utility and railroad debt is¬
sues today are sold in this manner.
This may be due either to some
law, rule of policy of a Federal

so

State Commission or, as
very

elect

may

cases,,«the

many

this

method

though under
pulsion to do so.
even

Before

be formed to bid for a
particular issue will depend pri¬
marily on the size and the quality

that the

quarters

some

to

the

of

have

we

as

comes

from

-

I

prevail in
effect that

placed

particular

a

i

number

a

groups have competed for Pacific
Gas and Electric Company issues

large

as

the

writing firm hears of

as
$80,000,000 whereas
utility issue of $4,500,000 at¬

one

tracted
Let

requesting

bids.

tive

16

us

bids.

suppose

bond

issue

wishes to form

issues

in which

manner

we

some¬

privately and participate in the
underwriting of publicly offered
negotiated issues
(primarily
of
industrial companies) managed by

plans. We frequently have calls or
visits from company officers asking
for our opinion as to one phase or

the

another of the company's financial

underwriting

others

program.

well

as

as

None

those

the

issues managed

and

public bodies

as

we
do support
policies of such
the Securities and

I

Power

certain state commissions
which,
because of the public interest in¬

whether

late

volved, require, with certain ex¬
ceptions, competitive bidding for
debt issues of
utility companies

to

into

get

merits

of

of

not

a

issuers

which

have

more

is

non-callable

it

to

for

sound

relinquish

their debt and for this
do

York

as
a

a

questions

reason

we

market;

issue

be

mmmm

.

.

:

iililil

m

Y

!.

.

•

'..

'

.

,

*

^

..

Ill iiiiiiiiiiiiiiii

'

';

■

f 7'

f

-

' "

iMw ■

l|!|j!pi!

v-".v

issuer

interest

or

in

others

Poor's

the

to

its

operations

to

in

type

associated with

of

If the

amount

an

cur¬
com¬

few occasions where

a

the

of

issue

new

of

a

represents a
preced¬

company

over a

been

es¬

long that most utilities

so

railroads

at

time

some

or

sold securities by this
instances

In

where

which

have

the

same

-

invitations
have

&Co.
Midwest Stock

Exchange

Pacific Coast Stock Exchange
American Stock Exchange

•

Honolulu Stock Exchange • Chicago Board

Private leased radiotelegraph
circuit to Honolulu

FRANCISCO

•

LOS




of Trade

and other leading commodity exchanges

ANGELES

•

NEW

YORK

38 Offices Serving Investors

as

with

possible

upon

it

bonds should be of¬

condition of the bond market and

significant features of the issuing
company and the particular bonds
which it us issuing.
This is fol¬
lowed by the Manager's report as
to his i'sutvey.:>of the. interest in
the

issue

with specific mention
large institutions which
have indicated an interest.

of certain

ac¬

may

Although

and

the

prospects.

Likewise, executives of issuers

not

as

extensively

Manager, most individual

count

members

their

make

of knowledge of the new issue.

Likewise,

a

and important pro¬
spective buyers of their securities
in order to develop interest in-the

opportunity to

underwriters

surveys

where the company officials may

themselves
concluding fea¬
ture
of
the
Preliminary Price
Meeting is the expression of price

address

views

issue, Also, on some occasions

there

are

arranged other meetings

prospective bidders
sometimes, prospective

assess

an

and,

issue

as

be

firms

*

CHICAGO

;

When

made

the

bidding

available

company,

papers

are:

the issuing
the manager of an ac¬
by

,

rep¬

erally scheduled by the Manager
for

as

short

a

time before the hour

for

receipt of bids as will permit
adequate discussion for determin¬
ing the bid and allow for the
completion, of the paper work in¬

cident

Subse¬

thereto.

One

reason

scheduling this meeting for

quently the Managers of the bid¬
ding accoulnts arrange the
socalled "Price Meetings" which arc
customarily two in number. The
Preliminary
Price . Meeting
is
generally held the business day
preceding the day of bidding.) The

as

feasible is that to do

members all
the

cure

market
terest.

so

as

affords

possible time to
information

latest

conditions

and

for

late

sales

se¬
on

in¬

Another and

perhaps more
reason is the necessity
preserving the security of the

compelling
for

Final Price Meeting is customarily

held

various

Final Price Meeting

forming

sold.

the

The Final Price Meeting is gen¬

,

to the price at which

can

of

express

The

resented.

the extent of the interest in

opinion

the

at this time.

If the meeting breaks up too

bid.

the

early

some

of those

present

'&■:

Continued

on

page

wmm

m * ps

.

I
M

WEST COAST LIFE

CALIFORNIA WESTERN STATES LIFE

Bought

—

Sold

—

Quoted

WALTER C. GOREY CO.
Russ Building,

San Francisco 4
Teletype SF 1011 & 1012

YUkon 6-2332

Wire System ——John C. Legg <£ Company,

Troster,

Singer

are

apt to talk and information • as to

firm which wishes

join an account to be managed
by another, promptly should seek
a place in a bidding account of its
choosing.
The procedure from this point
on is
substantially as follows:

as
ac¬

own

of sales interest and if
they have any information differ¬
ing from or in addition to the
Manager's report they have an

sometimes make personal calls on

as

receipt

the

opinion of the price

the firms it wishes

to

Members
New York Stock Exchange •

to

associated

,

determined

a

companysells its securities
competitive bidding for
the first time, a firm which de¬
sires to form and manage a bid¬
ding account must compete with

of

At the Preliminary Price Meet¬
ing the Manager will discuss the

quainted with its management and
evaluate

/.■'

.

fered for sale.

afford the interested parties
an
opportunity to inspect the issuer's

to

its

at which the

Fitch) which* assign
securities. These trips

properties, become personally

worth

,

is.Then

sentative

some

and

ratings

market

|

*

y

any, which the Manager
will express to the account repre¬

issue.

are

ex¬

view, if

to

forth¬

Along
this
line,
companies, espe¬
cially railroads, which arrange
inspection trips over their proper¬
there

to the

as

bonds,

There

be steps

the

to the

as

-Thus,i it
behooves
a
prospective
manager
to
extend

Dean Witter

,

as

through

to

SAM

coming

new

ability

railroad debt issues has

promptly

,

the

market,

objective.

/*<

'

by

bond

The practice of bidding com¬
petitively for public utility and

others

-

views
the

stimulate

the

as

whether the Com-

DISTRIBUTORS

the
con¬

increase the size of the

or

method.

uNGHtltW Rf tt R S "BROKERS

taken

of

which the Sales Department

tent of interest; on the part of
prospective buyers. Following this,
each individual present gives his

experts.
may

At

reports its findings

on
the bidding date and is
meeting at which the bid to
ing issue there may be mergers be submitted by the account is
of certain bidding accounts where finally determined.
the managers may act jointly or a
Practices may differ among in¬
bidding account may be absorbed
mmmm m mzm$m mm v,
into one of the others.

current

Complete Investment Service

after

opportunity of securing addi¬
or
clarifying information

Meanwhile, there

and Buying
this
meeting
discussion of the current

a

condition

it

factors

of

were

is

particular

and

'

such

capital,

substantial increase

recom¬

might

into

gives

prior issue.

size

the

do

period of non-callability

Other

the

on

account. On

of

there is

from
the
issuer's
executives,
lawyers, accountants and technical

.

Trading

Departments.

tional

the issue and aids them in

reduce

or

control

general rule

invited

bonds

other have

i

decides

company

tablished

K

prospec¬

parable to the previous one, the
problem is then relatively simple.
However, if the amount to be sold
differs materially from the pre¬
vious issue it may be necessary to

manage¬

such as: the status of the

bond

City, May 6, 1958.

and

under¬

non¬

we

the

Meeting

Price

the

Syndicate,

generally a
so-called "due diligence" or in¬
formation meeting. This meeting
is conducted by the
issuing com¬
pany and affords members of all
the prospective bidding accounts

firms which
rent

non-refund ability.

or

*An address by Mr.
Hager before the
Cashiers Association of Wall
Street, Inc.,
New

not

mend

or

various

the

to

which has, organized and is
managing the bidding account)
including the heads of its Sales,

is

ested in purchasing the issue. This
affords bidders the opportunity to

it

non-

period of five

a

is easier to sell,

years

think

not

Initial Step

initial' step taken by the
prospective underwriters of an is-

a

non-refundable provi¬

or

refundable for

ments

The

is

forthcoming is¬

should

study

there

now

firm

op¬

in question it
naturally would endeavor to form
a
new
bidding account including

the

of

Our advice on
this subject is
generally at variance with that
given by most other firms in the
Street. While obviously an issue

competitive

how the process
operates.

a

sion.

the

bidding.
Volumes
have
already
been
written and spoken, both pro and
con, on this controversial subject.
Rather it is my intent to outline

an
a

manager

to

distribute

Provision

prospective
or

bonds

callable

purpose

discussion

a

by
of

sue

and railroads.
my

follow

to

documents

an

purchasers.
question, market judgment and
Prior to price discussions
the
willingness to assume underwrit¬
ing risks. If a managing firm had Managers and the members of the
previously managed an account bidding accounts make a canvass
which had bid on a prior issue of the buyers likely to be inter¬

point of interest, one
frequently asked us ol'

a

question

However, it is not

firms

Non-Callable
As

and

Commission

other

sure

portunity

a

be

to

the

sideration

similar policy.

Exchange Commission, the Inter¬
state Commerce
Commission, the
Federal

am

firms

account,

We are quite willing to
give this advice gratuitously and

less

rules

that

bidding account.
times know of forthcoming issues Naturally,
each managing firm
wishes
to form as strong an ac¬
occurs
when
issuing companies
seek advice as to their financial count as is feasible. In selecting
One

by ourselves.

'

sources.

company

invitation

peting accounts have had

5

com¬

Telephone and Tele¬
ties. Those invited on these trips
Company which have
include
representatives
of
the
ranged from $125,000,000 to $250,various bidding groups, important
000,000
principal amount there
purchasers and
the
have
beciY'TWO large competing prospective
services
(Moody's,
Standard
&
groups in each instance and three

news

official

Diligence" Meeting

After the members of the

shall

I

Preliminary Price
Meeting of the' bidding account
there is a meeting of certain key
personnel of the Manager
(the

graph

officials,
items, reports that
competing firms are forming bid¬
ding accounts or perhaps through

with

issues

of American

company

of

,

mar¬

influence the number of

bidders. For the debenture

financing is in the offing.
as
to the financing

of

tact

com¬

Halsey, Stuart & Co. Inc. is in¬
terested
only in 7issu.es sold at
competitive bidding. This is not
true

ket may

Information

plans

question. Likewise,

the current condition of the

do

Underwriting firms may. gain this
sale knowledge through personal con¬

further,

may

to

want

This
step
is
take n
promptly when it is first known

should like to dispel an erroneous

impression which

will

of the issue in

in association with other under¬

through

proceeding

bid

a

bidding

that may

writers.

is done
issuer

legal

no

submit

corporate

accounts. The number of accounts

of

Preliminary
Prior

bidding account.
"Due

Indenture.

which

and

describe.

to each of the various members of

should

any,

the

sky"
memorandum,
pre¬
liminary prospectus, etc.
These
documents are, in
turn, distributed
the

firm

my

"blue

what

are

It is

bidding. I do this because it the size of the issue is small it is
the type of business with which probable that
anyone who wishes

in

in

and

,

tive

or

provided

forth

managers

going to discuss primarily
the procedures followed in under¬
writing and selling a corporate
bond issue purchased at competi¬
am

most

or

merely brief examples
of
the
multitude
of
inquiries
which
are
made
by companies
contemplating an issue of bonds.

securities business.

am

years

on

tion to great

I

35

or

fund

be

the last minute maneuvers of the Final Price
Meeting and Price Committee, including not only the final
phrasing of the bid but also the retail terms of sale; and
reviews what can happen in the event of tie bids. Calls atten¬

is

30

longer; the effect of long maturi¬
ties on market
receptivity; what
constitutes acceptable redemption
provisions; the amount of sinking

Step by step procedures followed in underwriting and selling
securities offered for competitive bidding—without
going into

I

5

(2061)

i

■

&

Co.,

N.

Baltimore & N. Y. C.
Y. C.

—r

53

6

The Commercial and Financial Chronicle

;(2062)

.

Thursday, May 8, 1053

.

.

rj'V

irig effect upon bonds prices gen¬
erally. Such issues would foe de¬
signed to appeal to thrift institutions, and thus would absorb funds

Savings Banks Investments Unier
Today's Economic Conditions
By
Executive

that

of,

maturities,
itself

to

mutual

easy

reflect

prevailing economic condi-

tions.

In

million new

20

prosperity, the demand

for funds from

ceed

the

of

same

c

r e s

of

durable

goods.

:suiting ,unemployment
about

cern

boom curtail

the

of

of nonduiable
of

Alfred

a re-

suit, a short'
:
age of money develops and interest.
rates, rise. Under such conditions,
,

banks

tiles.

Considerable

before

time

chases

satisfy

on

offset

m

That

to

v
•

is

certain that it has

by

now

no

been?

modified form. It would be

a

utterly,

pointless to raise capital for that "
from the ."World- Bank or 7;

-purpose

;

from11 other
Paul
1

Einzig

dollar

The

sources.

equipment would be produced in
Britain,v so ■that theproject. can

of turnover of be determined
;
: 7;'this time'not to yield, it,is diffi.

supply

proceeded

it

and

adopted by the Government in

-

private:
seem

development,!'

•

not

was

however,

means
-

employ-

power

project

with,

pmnlov

sector

Financing

suggest that

it arose in conjunction
financing of British hy¬

dro-electric

the

in the

reports

Years ago

with the

port ant

both in the
nationalized
industries and

-

latest

raising of dollar capital for
the financing of atomic power development is under consideration.
The idea is not altogether
new!

,

ers

.

the effects

'*
commercial banks

secure•

well be financed with the aid of

•*

seediow

will ;-be^cu^7to

a

series of nriajor>,sterling,: and there should be

any

underJstrikes^cduid be-<avoided.^Should-g^U^y.pf sterhng^

shown: by rthe7 we-witnessa number of strd^es,it
That^purpose. . The transaction; :
in -thf <sprMi-7 would
be: in keeping with past would simply amount to an excuse
in the secu
There is always an for
rity holdings of reporting member experience
mere ib aiways *n ior, raising
raising dollars
auiiars for
icr the
me rein-*
;r
banks of the Federal Reserve Sys- epidemy of wage^ conflicts at the foicement of the gold reserve.
reser
tern of about $4.5 billion since the beginning and at the end.mf^
favor-of-a
big-; dollar
,.-v.... Those'in
~
middle of last November, when boom. At the beginning employ- loan argue that Britain would pass

may

conditions

,

is

.

...

..

l9SP

broad

cmnrk

sP89tacular increase

of

reservoirs

new

f]nrahiP

a

to

buyers of securities;

ea8er

these

that

.

nnr-

innif99
scale.

PUr"

oul^,,uv1(

their
It is undoubtedly true that-our
portfolio needs from an ample
supply of mortgage loans and economy is lar stronger today
bonds at high yields.
• than it was after 1929. There is no
can

m0ney

That

fp-jT
tex-

^^W^demm^s ^el(^
rpv;vp

;the

future

as

*

The

Other

week.

i

contraction in bank loans and

a

con-

tends

reduced velocity

a

adversely sales

goods such

elapse

J

j-ggults

Re-

and

economic

have also affected

loanable

savings

m0netizationris a logical
anti-recession expedient; The expension of the money supply that

economists

to

the

■

-

Such debt

durable goods

purchases

System
to prevent a

funds. As

issued to finance
has been

•..«

Dollar Atomic Power

^decided

.

some

>

monetotion
21
^f1ciripe
Treasury deficits; since

Sd

pur-

J;

•

anxious

ij;

banks,

7"„.;

'•' \7," 7^,77
large dollar
facilities to leinfoice the reserve,

horizon

.

being provided with additional

^sldts, !n

holiday,, since it
is characterized by greatly reduced

serve

supply

new

recession

aptly termed, by'
a

taken by the
Federal Re¬

the

make

Eng.—The

::77\v7':\V\

gal reserve requirements or open trade unions:
market operations. This Procedure ha

con-

;

credit
a s u

to

This kind of
.

m

of

debt also limits the ability

consumers

LONDON,

,

:

vof industrial relations remains as

-

reserves through reductions in le-

industry

cU-ianc nr Hnvahipc
chases
of duiables.

time, restric¬
tive

the

caK

-7:77'.

•

aV

T^e
are

cvl

much

record'level

The

sumer

pands sharply.
At

4 000000

-

;

®

were

not

fears.

v.7

cloudy, as ever. The Amalgamated
Engineering Union put forward a
demand for a
offerings of shorter and inter- 10% increase

vor

.

dollars.

more

to >

therefore, the Treasury may
expected to limit offerings of
longer-term obligations and to fa-

be

This year, au

mortgage borex¬

automobiles

-

":-'\-V'7--7'

-

-So long as the recession continues,

tnmnhilp

m-w

designed

policy

'

.

a

*

produced and sold.

business and

rowers

money-

.combat thereeession.

sharply their purchases of durable
goods. During the past three years,

savings banks

in

the

advisability of

with the Federal Reserve System's

large part be ab¬
sorbed by commercial banks.

Investment opportunities avail-

desirable

although

from

'

lengthen public debt

point of view of f
public debt management, conflicts

shorter and intermediate term that will in

able

When the Treas¬

evident then that the sale of longterm bonds to

By PAUL EINZIG 7.

proposed dollar-borrowing by Britain
is weighed by Dr. Einzig within the context of: ■. (1) success
or lack of success of present labor drive for higher
wages;
(2) current stronger gold and dollar reserve position; and
(3) Government's intention not to relax anti-inflation fight in
view of postponement of reduction of Bank rate to 5%. Opines
it would be pointless to, raise dollars to finance atomic power
development and reports growing'feeling in London 1hat
Government should repay what it owes rather than borrow

ing obligations, the bonds market
weakened for a time. It became

obtaining highest yield with safest quality; and,
two, achieving high degree of portfolio-mobility is to -invest in
good amortizing mortgages and lor proper diversification, U. S.
and other high grade corporate securities. Considers: (1) ele¬
ments determining desirable ratio of
mortgages; (2) merits of
corporate bonds and equities; and (3) possibility that Treasury debt-monetization will limit longer term bonds in favor of

,<

The

to make

offered a long-term bondllast -7
February in exchange for matur¬

one,

!'

;

to V

used

be

and

ury

Trust Company

In assuming recovery may not occur for another year or more,
Mr. Casazza's answer to savings banks' current principal prob¬
lem

other bonds

mortgage loans.

ALFRED J. UASAZZA*

Vice-President, Savings Banks
New York City

otherwise

would

bid for

Wage Disputes and Sterling

1

.

x,

x

the

easy

adopted'by

the

authorities.

,

policy

money

was

Federal
,

v

.

.

~0

refuse wage demands because 0n to the Commonwealth-raw-ma--.
dbey do not^yet realize that th^y;vterial producing countries the bulk

first;ers

Reserve
.

,

could add the wage

their prices.

to

increases

.

,

At the end of

of the proceeds of the transaction.

boom

a

.

The

idea

is

-

not

attractive^

very

--

of

direct

of;

lagging business activity expands
the

supply of loanable funds. Il
consequence, interest rates fall and
bond prices rise.
Mutual savings
banks, like other investors, then
face

the

prospect

•

The

six

severe

months

rates

to

"K|,nf_in

lilfp

y

recession of the past

>

A Year
it

would

to

ever,

interest: is

-

not

or

to

Mure

t

,

much

further this

rise

turn

tivelv nrolonsed

in

will

prices
go will depend
the severity and the duration
of the recession. Anyone who undcrtakes
must

to

first

forecast

forecast

bond

upward

<So

con-

long

tinues

Another

elapse

as

The C,,rre,U Keccssi»"in
The current
^

,

recession

is

W

1

OTal respects the most severe that
the country has encountered in
two

decades,

1938.

or

since that of 1937-

Federal

times

Reserve

uf

System.

At

on

heavy offerings of
tax-exempt bonds

Government.

The

readjustment

is

way

a

good deal

^

now
.

more

tion

arises,

hnax^r
heaw

than
lan

inventory correction, however.

vy

,

The

A
potent factor in the current economic downturn is the too rapid

treasury

borrowing

borrowmg
rates

in

and

involving expend!-

\c/ulmcnt'ir'the'

with

excessive

capital

ii!^

capacity

expenditures

Business

will

decline

-

to

around

from

$37

$32 billion this year
billion in 1957, and a

further decline

is

_Consumers also

likely in 1959.

are cutting back

jAnAnnual
address
by Mr. Casazza
Western Trustees

lath

bpr.ngfieid,

Mass.,

before

Meeting,

Apni

22,




1958.

w<n
will

will

and

Britain would need

Exchange

re-

labor troubles

be

satisfactory,

no

support for

-

em-;

.

..

.

..

lowed Vby an improvement of

the;1

.

investment objectives -under pres- widely-.,assumed' that appeasement a position to be able to 'export
conditions. First, they want would prevail, and that the infla- capital without, endangering the
secme the highest yields ayail- tiqnary wage spiral \\muld, resQiuq s
of sterling. On the otherable, on investments of suitabte^ its .coift'se., ■E'Yen
•:pf-.;;th.e ■ wage7„det^
.>

a

The

appears

imraediate

unlikely.

effect

of

would

"'«•

this

be

unable

to

protect ster-r.

any case, should

inflation

vteU^^h^v^^dhe^^oiKi^fre-' ^irm
covers

and interest .rates-turn

ward

pain

a

-

'attitude- .tViU^^bef
im- st,'ikes> causing a sharp fall in

A*

output and in .exports, and: a^de-^^ There is a growing. Teehngin/
/
cline in the gold reserve. But, tak- London that the Government, in-,
the -highest-; ing a long'-.view .a firm- attitude is stead of thinking in terms of bor••

,

.Mortgage*Xoans offer

available to ^savings banks,

bound to bear its fruits. It is

today. Because the supply of new
moFtgages continues fairly large,

that

it

whiGh

would,

hoped rowing more, dollars, .should take
check5inflation,-in the Oarliest opportunity for repayt.

the-losses suffered dur^ iag ;.what- it mes^ Once,the dan-,
ing the next few weeks or months geiT of major strikes has..i passed?
would:5SOon be regained' in The ; there will, be,no

„

case

an5^ because mortgage■ .-interest
?ates haye been less sensitive to.
justification,for.
f general decline an interest sphere of output and exports. ^ holding on to the dollar facilities
rates than bond yields, the differ-.-..., The reserve position is in reiditv • arranged^undert.totaHy different
ontial between
between mortgage and bond
er*tial
-A
-

if

.

7

■

much strongerrthan

^^

is

generally

pondif.inns
conditions

conai"ous.

of the reduction
^VA : realized- ' AccordingrtOr an official i Postponement
Postpone
guaranteed mortgages
mortgages and
ana carecare* ^?ieln?.nVj^e.total"p.f ,dollal: f'cu" °1 indkation of the Government's
fully selected conventional loans ...ufi
uQll w? j
+1 infpntinn trf-*iph+
nut
this
sti11 offer the savin8s banks net... .B^^ofl^larS and which cnidH occasioiV' Further Bank rate re-

luui.igages.

rinsured

ana ,vv/i.

,

,

,

nf. thn

r?-,.-.

.

an

Deficit Financing

i

In

the

coming fiscal
a defitit

ta°"

$8 fciU

a^d"iSc?eaw"Cin

recetyte

Sc-

tions, new large increases in
penditures,-or "both.

upon

effect

t

o^defieit spending

will

ne^d
.fund%
Offerings of
ury

ex-

theeikindrot^Ssecurtti^TThe

Treasury

sell

to

raise

are

below

a

3%Jevel.
Moreover

'

depress-

d& andothe^seMor members of the
government repeatedly declared

mortgages provide
greater portfolio mobility to sav-

oration of the balance of

Ss^rSio^reSt; SS

^s.dhc

vide a re8'ular flow of funds avail-

th^deteri^

tunities to invest funds at

ing countries of -the steriing

,

of

Iunuies t0 invest funds at
•

Continued

on

hieher

a higher

page

54

-

strikes

Usury
Of

a

on

This'more ^han

;the

longer-term Treas-

bonds would have

corporate bonds

if

The

^ "Smgress "Zt
The

the

year

Treasury faces
paud capacity

ques-

therefore, whether

Ti»aei,r„
Treasurv

dne, the
check
the
rise
in bond prices
fall
interest rates".
in interest
an

Nor did .theyStock.

have provided,: for and abroad by the firmness of

the market, prices could

,

nature,

ent

,

one

corrections are, by their
mild and short-lived.

•

Should
of the pres^
— the outcome

aggravation of the labor situation,

' ity as P°ssibl€ into their portfolios, of writing this

measles

decline, but such periods of rein 1948-1949 ^action in the -bond -market
should
and another in
1953-1954, were prove short-lived.
mainly inventory corrections, alOn the other hand, the mountthough cutbacks in defense spending Treasury deficit will greatly
ing were a contributory factor in increase the need for funds
by the
the second instance."
Inventory Federal
recessions,

Britain's;-

•

corporates and

The two previous post-World

War II

straining

sterling-, dollars borrowed.

enough,

remained quite firm in spite of the

the demand for funds.from private..

0nce they

thl

Wore

mmmy

when

come

Paradoxically

"Pward
again
a revival in

in

credit to the utmost to re-lend the'a

-this recession conto.s"slai,J earmngs despite means^bsolute^ .certain -that^h^-. mandsj^ould chan^th^situation;
rates will be
interestrates. Secondly,: Government will mot give way at so much for the worse^ that eveh,;
VpHnnV/nrirti r they want to build as much mobil- the last moment, though at the time the largest dollar loan imaginable

, cyclical easy
sev-.the

expect

:,v1

.

sufficient liquidity to take care of ployers and of the Government in; British' balance of payments andP°ssible net withdrawals of depos- face ..of unwarranted wage\(de-;;^a strengthening of * confidence fe
its' -savings banks have> .two basic ni^ds-f Until quite :reeently;it was;: sterling; BHtain would soon be in',

vear or

tJ

<

can

object

itself.,:-^

There would be

interest

donrp^'

ditions

we

,

iDoth

the World
Bank.
"P*ine
wo

■

vigor-

forces of economic growth rcassert themselves with .any vigor.

prices

business

could

more

upon

invest

declining yields while
Thereafter, as

reco^
recovers

"^-5"

-

abruptly. The bond ouslv within the next few months
market has registered one of the
and'soon attain new peaks of outsharpest advances ever recorded' put
A "durable goods holiday"
within so short a period.
type of recession tends to be relaHow

invest-•

that the

fall

bond

andI

t.

*.

.

suicaoie,

be realistic

assume

bound

rppnssmn

or

3*^
01
the recession
S
ion !lasts.

nnpm-

SSS JSw : ^
4?
response to

-ity of <tho pnrrpnt

inadequate"
falling yields.

has; caused

sffthiliyprs"

ments

business
business

of

outlets for funds and

ppiy

early^1930'^' Government'deT-

the

raw

to

paymSits

It

aKn

in

^

firm determination . not, to,

relax resistance to> inflation, pre*

maturely. If they

through say—and there is
material

prodlc^.f°r,hopi,ng

what they
good reason

mean

now

^^/V'con^d-'

This being so, it is difficult to 'see

look 1S bound to undergo c
erable improvement in the not

why the Government should be

distant future.

area.
so

-

toG

Number 5740

Volume 187

,

.

The Commercial

.

and Financial Chronicle

(2063)

Output and Investments Still
High
^

For

example,

despite

the

the
prospect
is
that
business
spending will have to continue at

de¬

cline in business

And the Sources of Our
By

J.

O.

YVKIGIIT*

Ford

Motor

Company

and

\

General Manager, Ford Division

v

Ford Motor executive states

our

main

j

V'J-'-;

tive

the

exception of 1956 and
And that includes the boom

year of

1955.

As

a

peak

of upwards of
between how and

years

experiencing

are

not

as

This

" f

1965.-Diagnosing what we
I
a leveling off of Vi

growth rate and in being mindful that

i
.

!*

-i

announcement is not

a

stop overreacting to economic fluctuations;

suggests actions.: business

*>j;v

';a!CV

r

to

It

f

V

\

take to

can

confidence

of

faltering

in

>

•

of

•

-

represent a:

J. O. Wright
in fact, a most
encouraging — '
note is the persistence of'reason¬
able
optimism on
the J part
of
most businessmen of my acquaint¬
ance, based upon a factual assess¬
ment of our present strengths and
weaknesses.
Nevertheless, the

,

doubt

of

among

have

,

lying
Vigor

with

<

>.

■>.:>

should be ral¬

we

all

the

/purpose

and
the

campaign and to commit
to the struggle.

our

full

resources

'

'--'v

Underlying Causes

Let's look for

underlying-

a

there

of the
What

is

-

-

/;■

,

times

such

have

The

present
they?

are

broad

Both

this

to

slow

have

tendencies

down

iture and often

evi-

been

a

deferrable

to

which

invited

the

boom

have been enjoying off and

What

for

on

—

perfectly

•

moves there must be ebb and flow

intense

activity ..and

times of relaxation.

,7 During the past 10 to 12
industry

years,

has ' experi¬

vast expansion and mod¬

ernization

of

It has

plant
made

machin¬

and
an

incredible

peacetime investment of $300

bil¬
lion—an investment roughly equal
to our total
military expenditures

during World

War

that investment

ticipation

of the

that will

swell

-

1960's.

It would

assume

that

II.

of

Much
in

made

was

an¬

I

be

in

ranks

the

unrealistic

am

trends.

several-

of

The effect has

there

new

or

reached in 1957.
in

We are,

moderate

a

in brief,
decline

business spending in 1958.

.As for

*"

address

l-ouisvUr^K

r *

by

Mr.

Wright

before




F.S. SMITHERS &, CO.

HANSEATIC CORPORATION

YORK

BURNHAM

WILLIAM BLAIR & COMPANY

DENTON, INC.

R. S.

DICKSON

SHELBY CULLOM

COURTS & CO.

AND COMPANY

DAVIS &, CO.

AUCHINCLOSS, PARKER &, REDPATH

& COMPANY

INCORPORATED

IRA

BACON, WHIPPLE & CO.

HAUPT & CO.

THE MILWAUKEE COMPANY

WM.

E.

POLLOCK &,

/

May 6. 1958.

STERN BROTHERS & CO.

CO., INC.

V

,

.

offer to sell or a solicitation of an offer to buy these securities.
offering is made only by the Offering Circular;

This announcement is not an
The

$12,000,000

,

The

Virginian Railway Company

First Lien and

Refunding Mortgage Bonds, Series F, 4%

Dated May

;

Due

1,1958

May 1, 1983

The issuance and sale of these Bonds

in this analysis
•

in

believe

it is

are

subiect to authorization by the

Interstate Commerce Commission

the
a

face.

i

>

Price 100% and accrued interest

ing accused of playing down news
of -the -recession.
This
I find
amusing because I recall only too
well that'during the latter fall
early winter months most of
the
news
seemed to be bad —
seemed calculated to cause un¬
and

and

certainty

even -

fear

in

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

the

people. »You recall
the headlines concerning Sputnik,
the President's health, the failure
of
the first Vanguard, Muttnik,
minds

of the

the

rising figures on unem¬

HALSEY, STUART & CO. INC.
DICK &, MERLE-SMITH

R. W. PRESSPRICH & CO.

AUCHINCLOSS, PARKER & REDPATH

SALOMON BROS. & HUTZLER

STROUD &.
& COMPANY

ADAMS & PECK

INCORPORATED

ployment.
It

had

not

of

the

occurred to me that

recession

has

pression it seems to have come too
late.
The pessimistic predictions
had been made and the curtail¬
ment

of buying

seems

,STERN

BROTHERS &, CO.

McMASTER

HUTCHINSON &

CO.

been

suppressed. If there has been sup¬

had begun.
the time

to me this is

apply the theory of relativity.
things that may look pretty,
bad
in absolute terms, may not
look so bad in relative terms.

MULLANEY, WELLS & COMPANY
WALLACE, GERULDSEN & CO.

THOMAS

& COMPANY

RAFFENSPERGER, HUGHES & CO.
INCORPORATED

STIFEL, NICOLAUS & COMPANY

KENOWER, MacARTHUR & CO.

INCORPORATED

PATTERSON, COPELAND & KENDALL, INC.

to

Some

Chamber of Commerce,

GREGORY & SONS

BAXTER & COMPANY

CO.

Incidentally, I have noticed that
in some quarters the press is be¬

It

military spending, it has

WERTHEIM &, CO.

nothing

is

factors

I

But

economy,'.

to

investment

&,

CORPORATION

has

confidence.

and

sure

bearish

the

news

capital

BACHE

INC.

temporarily to dampen our

startling

and

population spurt
our

could continue without interrup¬
tion at the.
extraordinary level it

experiencing

1, 1993

restrictions

fair look at the. situation we

ery.

1

•->

Debentures

SALOMON BROS. & HUTZLER

LADENBURG, THALMANN &, CO.

slump is a simulta-"

development

neous

we

straight
In everything that lives and

a

'

1

<

have had in the pres¬

we

growth

enced

■

EQUITABLE SECURITIES

MERLE-SMITH

&,

BURNS BROS. &

which have since had to be eased.

of

American

•

I.

push

the past decade. It is
hardly pos¬
sible to have perpetual economic

of

""

riv"

action " to

Federal

credit

and

money

enthusiasm

times

•'

Due April

through tight re¬
the-availability of-

on

predictable reaction

line.

.

1958

boom

strictions

a normal and

a

-

one.

It

inflationary

'

an

been

unprecedented

difficulties.

present

our

added

general

g

r'

in

.

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

DICK

NEW

industry, such swings tend to be
exaggerated because the automo¬
bile ;is a major family expend-'■

that there has been

the

V ,

,

past month or two. f
Unfortunately for us in the auto

The fact is
to

V,

HALSEY, STUART & CO.

dent in the

downward

a m o n

'

.J

,

have

buying and to speed up the
liquidation of installment debt.

cials.

■:

,

pe¬

Never¬

fluctuations

as

ent1 business

,

A

and have had

up

free economy.

such

businessmen,
economists and government offi¬

agreement

'

I

A

Pt •ice 101.056% and accrued interest

its

slow

moment at the

causes

business letdown.
I s vthink

solicitation of an offer to buy these securities.

:

.

.•

plan

or a

May 2, 1958.

ARTHUR L. WRIGHT &

CO., INC.

but

page

of

military
'

at our,:commandCto
,,One7 other contributor to our
challenge that faces us. 7/./"/•-'/'/ .present situation—-unfortunately
In my opinion the first step I can not discuss: it fully here—.;
toward an effective 'solution is a is the wage-cost-pric'e spiralv,This;
realistic appraisah/ of - the-} assets is a deep-seated and long-range
we have at'hand in this country
problem /"that' will
increasingly
•—the sources of our strength,, if occupy our attention in the years
ahead.1
'•"
"•
• .;
you will.
%%'V ■ A f /■
■"
The next step is obviously to
It has contributed materially to
our

on

-

employment increase rather •
sharply in recent months.
Along with rising unemploy- •
ment, there is a tendency on the*
part of the consuming public at

sown'

They are tending to
cautious and indecisive

time when

a

been

us.

make .us,

at

■'

place,
there" is,
of
course,
a
shrinkage of; production and em¬
ployment and we have seen unr

means

To me,

recession

true

Continued

been, in general, remarkably mild.
When
such
adjustments take

"

pessimists are,

seeds

decline

inventories

a

theless,

the extreme

tive.

in

mand

Fortunately,

'.J

-

Dated April 1,

Nobody has yet
figured out a way to achieve a
perfect balance of supply and de¬

and too
much shakingof heads.

not

to be worked off.

eco¬

tion,

no

v

Business

nomic tribula-

by

actual

an

riodically piled

proph-;'

many

is

Jersey Bell Telephone Company

-

during'

.'magnitude 7 in

spending.

many cries of
despair, too

ecies

•'

-i

New

and

considerably

was

some

too

been

offer to sell

Thirty-Five Year 3

there

I

'

-

all-time high, indicat¬

larly during the last six months,

American future in recent months.

There have

ing

economy

$30,000,000

H',

the past decade.^ In 1957, particu-

the

an

ing that what we are experienc¬

economic

improve our

fluctuated

ing that there has been a certain

close to

offering is made only by the Prospectus.

•

health. v

^

to be the general feel¬

seems

an

S

^

'

business

While

unemployment.
segments of the

•

government action "un-

questionably has the power to stop a decline in its tracks," Mr.
.4«,
Wright advises cautious approach to tax cuts; admonishes
"3*1

/>Oi;

positions.

some

The

true recession but

a

for

in others employ¬
high. Employment
as a whole is at

■

on the part of the conoptimistically forecasts
10 million cars and trucks in

production
/

order

industries to
respective competi¬

Take

matter of fact,

sinner in the American economy, and
'

in

goods

consumer

maintain their

have suffered,
ment remains

for the economy

proJblem is for business

to stimulate a resurgence of confidence

I

with

1957.

Vice-President,

...

investment, such
investment in 1958 will be
higher
than in any other
year in history,

Strength

'''

levels

substantial

7

a

53

The Commercial

delet Street, New
;

Dealer-Broker Investment

7

•

way,

veys'

It

ii

"

EVENTS

Works—Analysis—Harris, Upham & Co., 120
5,- N. Y. Also available is a report on
and Manufacturing.

Appel Petroleum Corp.—Report—Englander
Broadway, New York 6, N. :Y.

understood that the firms mentioned will be pleased
send interested parties the following literature:

i

Firms Board of Governors meet¬

& Co., Inc., 115

ing at Statler Hotel.

_

Cork—Analysis—du Pont, Homsey & Co., 31 Milk
Street, Boston 9, Mass. Also in the same circular is an
analysis of Steel Stocks.
i
-7
Baltimore Gas & Electric Co. — Data — Oppenheimer, Vanden
Broeck & Co., 120 Broadway, New York 5, N. Y. In the same
circular are data on Standard Oil Company of Indiana, Sterl¬
ing Drug Inc. and Traders Finance Co. Ltd.

:

British uranium
purchases from Canada, growing atomic navy, atomic equip*
ment market, Preston East Dome Mines and Algom Uranium
Mines—Atomic Development Mutual Fund, Inc., 1033 30th
(No. 36)

*

with comments on

.

Washington 7, D. C.
Companies of the United States—Comparative
figures as of March 31, 1958—New York Hanseatic Corpora¬
tion, 120 Broadway, New York 5, N. Y.
,/ v
Burnham View — Monthly investment letter — Burnham and v
Company, 15 Broad Street, New York 5, N. Y. Also avail- v
able is current Foreign Letter.
Street, N. W.,

x\.

Banks and Trust

•

York

5, N.:Y.

/

„

Japanese Stocks

—

7

—

'

Yamaichi Securities

York 7,

La

Securities—Suggested portfolios
—E. F. Hutton & Company, 61 Broadway, New York 6, N. Y.
Mutual Fund Shareholder—Comprehensive study — National
Association of Investment Companies, 61 Broadway, New

■

1'

■■■•

•

Saxton &

Stocks

—

randum

dub.

—

72 Wall Street,

7

Richelieu, Murray Bay,
Quebec.
'777

Manoir

Calif.)

Security Traders Association of
Los
Angeles
annual
Spring

Louis 2, Mo.

1958 (New York City)
Bond Club of New
York 25th annual field: day at

June 13,

52 Wall Street,

Municipal

♦

7

Review —James Richardson & Sons, 173
Building,

—

(

Y7

N.

Toronto, Canada.

.

••

•

June

-

Analysis
5, N. Y.

•

•

Hanseatic

York

" N. Y.

Corporation,

'

^

—

-

'

■

120 Broadway, New York

?

: ■

■

-

Lake, Minn.
r

■■

West Coast Life Insurance Company

—

Walter C.

;

Philadelphia summer

outing

Country

Club,

Overbrook

at

Gorey Co., Russ Building, San Francisco 4, Calif.

Radnor

Wisconsin Bankshares Corporation—Report—Milwaukee Com¬
June

207 East Michigan Street, Milwaukee 2, Wis.

Township, Pa.

Club

For Hirsch & Co.
with

Broad

Mallinckrodt Chemical Works

Street,

members

Hirsch

N.

Co.,

City,

York

New

25

of the New York Stock

Exchange,

as

manager

of the
De¬

firm's enlarged Mutual Funds

Metals & Controls

Corporation

Shearson, Hammill

(Special to The Financial Chronicle)

LOS

Maurice P. Kramer has become
associated

4 With

John
have

E.

Lee

Robert
and

Hammill &

Investment

Jarrett,
Earl F. Money

York

Jarrett

were

Anderson

and

Mr.

(New York City)
Association of New

outing

previously with J. A.

27, 1958

.

*

Mawr, Pa.

AECO

above

believe particularly

me

attractive

at

this

time.

(Cincinnati,

Ohio)

CORP.

Municipal Bond Dealers
AUTOMATION

INSTRUMENTS

'

A.

J.

BAYLESS
COHU

MARKETS

INC.

GAS

SERVICES

74

Trinity Place, New York 6, N. Y.

HAnover 2-2400




Teletype NY 1-376-377-378

annual

OSCAR F. KRAFT & CO.
530 West 6th

St., Los Angeles 14, Cal.

City Club;

Sept.

29-Oct.

ciation

—

Country
3,

1958

Club.

(Colorado

the

Teletype LA 675

Asso¬

Convention at

Annual

Broadmoor.

Oct. 6-7, 1958

Association

Telephone TR 7555

Group

cocktail and
Thursday at Queen
field day Friday at

outing

dinner party

Springs, Colo.)
National Security Traders

Troster, Singer & Co.
Security Dealers Association

-

Maketewah

ELECTRONICS

SUBURBAN

Members New York

Y.

(Philadelphia, Pa.)
Philadelphia
Securities Asso¬
ciation annual
outling at the
Overbrook
Golf
Club,
Bryn

June

Sept. 18-19, 1958

The

Hollow
on

at Sleepy

Country Club, Scarborough
the Hudson, Scarborough, N.

Co., 520 South Grand

Mr.

Hogle & Co.

partment.

June 27, 1958

R.

joined the staff of Shearson,

Avenue.

Lakepointe

Country Club.

ANGELES, Calif.—Walter

Anderson,

at

outing

summer

Mgr.

(Detroit, Mich.) >
of Detroit annual

27, 1958

Bond

Kramer Mut. Fund

(Philadelphia, Pa.)
Association

Investment Traders
of

Analysis

—

annual

Bond Club,

picnic and outing at the White
Bear Yacht- Club, White Bear

June 20, 1958

5,'

(Minneapolis-St. 7

1958

Twin: City

•

Company of New York—Analysis—New

States Trust

United

.

—

111,

Paul)

-

Parrish & Co., 40 Wall Street, New
York
7":
Tishman Realty & Construction Co., Inc.—Analysis—Burnham
*'
and Company, 15 Broad Street, New York 5, N. Y.

Comparative figures

financial institutions

Club, Rye,

'

Portage Avenue, East, Winnipeg and Royal Bank

Talon, Inc.

Hotel,

at the Coronado
Coronado, Calif.

Party

Westchester Country

Simpsons Limited

j

pany,

For

.

Angeles,

June 13-14-15, 1958 (Los

i

Also in the same bulletin are data on

5, N. Y.

convention at

of Canada annual

New York 5, N. Y.

Diamond Gardner.

7

Investment Dealers' Association

Railroad—Memorandum—H. Hentz & Co.,

Sterling Drug—Data—Herbert E. Stern & Co.,
New York

(Canada)

June 18-21, 1958

Co.—Analysis—Scherck, Riehter Com¬

320 North Fourth Street, St.

pany,

Seaboard Air Line

7-

'

.

Memorandum — Fulton Reid & Co.,
Building, Cleveland 14, Ohio.

Union Commerce

Country

Invernes

the

at

ing

Club annual out¬

Bond

Toledo

Safeway Stores.

on

(Toledo, Ohio)

June 7, 1958

Shipbuilding

Rockwell Manufacturing

Co., Inc., 52 Wall Street, New York

Street, San Francisco 4, Calif.

Country Club.

Co.—Memorandum—Goodbody & Co., 115

Roadway Express Inc.

'

— G. A.
5, N. Y.
Real Estate Bond Averages — Circular — Amott, Baker & Co.,
Incorporated, 150 Broadway, New York 38, N. Y.
Tax Exempt Bonds—List of tax-exempt municipal bonds with
yields from 2% to 6%—Hannaford & Talbot, 519 California

Public Utility Common

the Oakmont

nual Field Day at

Corp.—Memorandum—Midland 7
Dallas 1, Tex.
Penn Fruit Co.—Memorandum—Shearson, Hammill & Co., 14
Wall Street, New York 5, N. Y. Also available is a memor-

National

4, N. Y.

of Los Angeles an¬

Club

Bond

Grove,

(Los Angeles, Calif.)

June 6, 1958

Co., Inc., Davis Building,

Securities

Corporation, Brooklyn

period —
New York

Syracuse annual

Hinerwadel's
North Syracuse.
at

outing

Companies

National Steel &

Natural Gas Distributors—Survey

and market performance .over a 19-year
National Quotation Bureau, Inc., 46 Front Street,

of

Club

Bond

Broadway, New York, 6, N. Y.

York 6, N. Y.

yield

(Syracuse, N. Y.)

June 2, 1958

Corporation—Analysis—

Telegraph

—

and Selected

with particular reference to
Union Gas Company,
Fuel Gas, Oklahoma Na¬
tural Gas Company and Pacific Lighting Corporation —
Thomson & McKinnon, .11 Wall Street, New York 5, N. Y.
Also available is a report on Celanese Corp. of America.
New York City Banks—First quarter earnings comparison of
13 New York City Banks — Laird, Bissell & Meeds, 120
Broadway, New York 5, N. Y.
Oils—Analysis of current situation—J. R. Williston & Beane,
115 "Broadway, New York 5, N. Y.
Over-the-Counter Index—Folder showing an up-to-date com-,
parison between the listed industrial stocks used in the DowJones Averages and the 35 over-the-counter industrial stocks
used in the National Quotation Bureau Averages, both as to

Chemical—Memorandum—Walston &

Chicago 3, 111.

Salle Street,

Marquardt Aircraft

Company,

ladelphia annual outing at the
Philadelphia
Cricket Club,
Flourtown, Pa.

Limited—Analysis—McLeod, Young, Weir
& Company, Ltd., 50 King St., West, Toronto, Ont., Canada.
Lockheed Aircraft
Report — Reynolds & Co., 120 Broadway,
New York 5, N. Y. Also available is a bulletin on "Another
Look at the Oils" and a report on General Motors Corp.

N. Y.

Gas

Broad¬

New York 6, N. Y.
S. II. Kress & Co.—Analysis—Halle & Stieglitz, 52 Wall Street,
New York 5, N. Y.
< -—7
Kusan, Inc.—Card memorandum—Leason & Co., Inc., 39 South
Loblaw

Gas

at the Belmont Plaza.

May 23, 1958 (Philadelphia, Pa.)
Investment Association of Phi¬

Joseph Faroll & Co., 29 Broadway,

Report—Harris, Upham & Co., 120 Broadway, New
York 5, N. Y.
Life Insurance Stocks — 1957 operating results of 23 major
stocks—Kidder, Peabody & Co., 17 Wall Street, New York 5,

Laclede

cocktail party, dinner and dance

Street, New York 5, N. Y.

Co., Inc., 74 Wall

International Telephone &

Latest Field

Alabama

try Club May 23.

May 23, 1958 (New York City)
STANY
Glee Club annual

New York 6, N. Y.

International Minerals &

Co., Ltd., 61

Inc., Ill Broadway, New

Inc.—Study—Price, McNeal & Co., 165

Products

way,

New York.

Market Outlook

22, outing at Belle Meade Coun'

Company.
Gum

N. Y. Also in the same issue are •
Investment Trusts in Japan and the

Current information

Company of New York,

May 22-23, 1958 (Nashville Tenn.)
Security Dealers of Nashvilie
dinner at Hillwood Club, May

Insurance Company.
Company—Analysis—Troster, Singer & Co.,
74 Trinity Place, New York 6, N. Y.
Also available are
analysis of Metals & Controls Corporation and Collins Radio

—

Beacon"—Nomura Securities

77,777,.,;' 7. ;77;:X;j77

Club).

7

ernment Employees Life

Original Issue and Transfer Tax Rates
/
—Booklet
Registrar and Transfer Company, 50 Church
Street, New York 7, N. Y.
Foreign Exchange — Rates as of April 22, 1958 — Deak & Co.,
Inc., 75 West Street, New York 6, N. Y.
Japanese Prospects for 1958—Analysis in current issue of "No¬
Investors

,

at Happy Hollow

day (May 21

Fischer & Porter

Federal and State Stock

Broadway, New York 6,
discussions of Series Type
Iron and Steel lndustry.

.Association cocktail party (May
20 at Omaha Club), and field

Inc.—Analysis—First Securities Cor¬
Street, Durham, N. C.
,
■
' • /

5, N. Y.
Group Associates—Study—Robert H. Huff & Co.,
Seventh Street, Los Angeles 14, Calif. Also avail¬
able are studies of Continental Casualty Company and Gov¬

Chemical Corp.

mura's

May 20-21, 1958 (Omaha, Neb.)
Nebraska
Investment Bankers

210 West

preferred stocks in
"Current Comments for Investors"—Francis I. du Pont & Co.,
1 Wall Street, New York 5, N. y. Also in the same issue are
brief analyses of Boeing Airplane Co. and National Distillers
&

Country

7

York

Securities—Selected bonds and

Convertible

at

Employees

,

animal spring outing
Club of Maryland.

sociation

.

Street, New

Corporation, 15 Broad

cial banks—First Boston

Bayless Markets,

May 16, 1958 (Baltimore, Md.)
Baltimore Security Traders As¬

Corporation — Analysis — Frank C.
Moore & Co., 42 Broadway, New York 4, N. Y.
Continental Air Lines, Inc.—Review—John H. Lewis & Co.,
63 Wall Street, New York 5, N. Y.
Cutler Hammer—Bulletin—Baehe & Co., 36 Wall Street, New

•

edition—Study of 34 commer-

Commercial Banks Stocks—9th

J.

poration, 111 Corcoran
Big Horn Powder River

Field

May 12-13, 1958 (Cleveland, Ohio)
Association of Stock Exchange

Armstrong

Atomic Letter

Investment

in

circular are sur¬

Broadway, New York
Westinghouse Electric

to

1958

COMING

f

New York 5, N. Y. Also in the same
of American Cyanamid and Deere & Co.

American Water

Recommendations & Literature

,

-

Inc.—Survey—Abraham & Co., 120 Broad¬

Stores,

ACF-Wrigley

•

•

•

••

,j

Thursday,. May 8,

. ..

Caron-

Yields—Bulletin—Scharff & Jones, Inc., 219
Orleans 12, La.
.
-

Free

Tax

Chronicle

and Financial

Firms
TYlPpfincf

(Boston,
of

Stock

Board
nl

Q

r\rr\

of
orcof

Mass.)
Exchange
Governors
TTotf^l.

Volume 187

Number 5740

.

..

The Commercial and Financial Chronicle

such

Oik and; Chemicals: Close

as

finery
ucts

led

happened
centers

President, Shell Oil Company of Canada, Ltd.

Texas
same

make

materials

raw

of

terms

our

as ah
as

a

processes to

for

reference,

able

espe¬

from

other

and

has

known

ferring to any

could

be

given product
as
a
petro¬
chemical, it

relative

be

must

the

essentially

the
in

about

come

terials

makes

ethylene,

it

termediates"

rather

to give
butylene,

proper

propylene,

etc., the status of
or

than

defines

some

of

"chemical

in¬

"chemicals"

even

materials.

raw

for

In

product. Many
chemical

ucts

8.4%,

products

maintenance

can

materials
that

W. M. V. Ash

the

be

petrochemical

when
made by one company and not
when
made
by another.
Good
examples of this are glycerine
and ethyl alcohol which are petro¬
chemicals when made by Shell
can

a

with

their

namesakes

the

-

As

made

said

fermentation

usual

that

the

as

into
in

it

is

in natural

the

the

made

or

petrochemical

etceteras

you
a

will

the

intermediates

spelled the end of

material

almost

a

scavenger

product. Now he has competition
for

his

raw

feed.

How

has

Two-Fold Reaction
His reaction has been, two-fold.

in

to

the

competition This

towards

has

elaborate

led

to

mighty
engineering.

some

chemical

Continued

chemical industries for intermedi-

This announcement is neither

the

accept

petrochemical

hydrocarbons,

on

page

reservation

:

*

'

"intended

Bonds.

offer is made only by the Prospectus.

$150,000,000

International Bank for Reconstruction

account

Do

you

and Development

It is

was

a

Ten Year Bonds of1958, Due

town

arrived

Bolivar

he found

the

May 15,1968

Interest Rate 3'/*%

message
specified
drink, lodging, etc., etc.

at
Interest payable

arrange¬

November 15 and May 15 in New York City

were two beautiful senoOne of his Aides whispered

ritas.

to the host to ask who
and received the

they

were

reply "those are

the etceteras!"

Price 100% and Accrued Interest

v

Chemicals Enter Motor Fuel

,

for

Turning back to the founts and
origins of oil and chemicals, as
prevent a
"petroleum 4 product" time passed, gasoline engines be¬
like gasoline alkylate being came more sophisticated. Today's
caught ut> in the net of the defi¬ motor fuel manufacture requires
nition.
chemical re-combina¬
The very necessity for extensive
such a reservation is a temptation tions similar to petrochemical op¬
to think of the chemical and oil erations. Fuels are also improved
-

offer to sell nor a solicitation of on offer to buy any of those

lodging

natural
intended

and

chemical markets."

an

The

Bolivar,

chemical markets" is necessary to

Copies of the Prospectus may be obtained in any State from only
these Bonds in

such of the undersigned as may legally offer

compliance with the securities laws of such Stats.

industries in terms of close rela¬

by chemical additives of various
However, they are those of kinds, and carefully balanced to
boy kissing his girl on her get the most out of these compli¬
parents' doorstep—an experiment cated engines.
No simple set of
in chemistry which may or may specifications today can ade¬
not lead to the use of a shotgun, quately
describe a good motor
fuel, and nothing but actual rigoDry Gas and the Cheap Residuals rous testing' for long periods on
One upon a time, as oil was the road can prove up the best
tions.

the

the first boston corporation

MORGAN STANLEY & CO. *

BANKERS TRUST COMPANY

the first na tional city bank

j. pi morgan & co.

of new york

*neorpormtmd

••

produced and, perforce, gas came
with it, there was no practical
outlet

for

the

Motor fuel, in other

; ones.
;

GUARANTY TRUST COMPANY

dry gas. It could
be had
cheap; because it was sur¬ .complexity.; So far it looks like
plus to demand. Also, as oil was close relatives growing closer all
distilled

and

cracked,

and

some

right.

t

THE CHASE MANHATTAN BANK

the first national bank of chicago

words,

has become in effect a perform¬
ance
chemical
of
considerable

But note this—motor

fuel

of the results were mixed up

into has also become a competing out¬
that day, a satis¬ let for chemical raw materials.
fuel, various * other
At the same time,; dry gas has
products
of
cracking
were
of been in increasing demand; for
lesser utility for gasoline, and so
industrial and home use, with the
they too could be had cheap. result that distress sales of this

Of NEW YORK

<

bank of America

Chemical corn exchange bank

manufacturers trust company

* tiie northern-trust company

N.T.&8.A.

continental illinois national bank & trust co.
of chicago

*

1 harris trust and savings bank

-

what

waSj for
factory motor

These materials gave the petro¬
chemical business
a

leum-based

good start.
They could be con¬
verted into simple chemicals, and
sold successfully for a variety of

further

Their virtues lay

in
the cheapness and abundance of
the

uses.

materials, and their simi-

raw

*An
address
by
Mr.
Ash
before
Canada-U. S.,' A. Chemical Engineering

once-surplus material are a thing
of
the past in most of North
America.-

,

;

:

Two-Fold Problems

petrochemist, accordingly,
many of the materials that

1958.

•"

'

....

..

'

''




--■»

•/

drexel & co.

'

v

■

kuhn, loeb & co.

eastman dillon, union securities & co.

goldman, sachs & co.

glore, forgan & co.

'

?

<

harriman ripley & co.
...

kidder, peabody & co.

j

lazard freres & co.

-r

incorporated

lehman brothers

salomon bros, & hutzler

merrill lynch, pierce, fenner & smith

The
sees

gave

him his

steadily more.

May 6,1958.

'Jn the early days of the petro¬
chemical

stone & webster securities corporation

smith, barney & co.

start costing him

_

Conference^ Montreal,' Canada, April 23,

dillon, read & co. inc.
blyth & co., inc.

industry,

by-products

\

„

'

he

reacted?

entirely satisfactory and
sitting in the living room of his

in part f ronrpetroleum or

The

All this has

the good old. days for the petro¬
chemist. No more
is
his raw

close

are

ments

derived in whole or

or

facture.

and

for

Venezuela?

he

Simon

When

as
"a chemieat compound or element
recovered from: petroleum or nat¬
gas

oil

between the petroleum and petro¬

gas.

•

ural

chemical

utilized

The

ments.

.

,

of

the

industries

The trend

instances

from methane

refinery

if

to
you

First, he has worked hard to
synthesis of optimize his processes to the nth
gasoline components, by degree to live within the narrow¬
polymerization,
alkylation, etc., ing gap between what he has to
so their alternate values are now
pay for raw materials, plus his
not plant fuel but gasoline. This
rapidly
increasing
construction
has
exerted
additional pressure and
operating costs, and what the
towards the construction of plants customer will
pay him for the
specifically for the production of product — which latter bears no
these intermediates.
necessary relation to
his costs.
be

wholly de¬

many

that

further,

valuable

large and rapidly growing

goes

where

accounted

uses

country town after

food and

limestone, coke and electric

power.

Perhaps

these

Acetylene,

was once

approaching
long day's
riding, his aides sent a message
ahead making the night's arrange¬
a

industry.

rived from calcium carbide made

gas

a

corral

;

liberator of

the

Canada, acetone is now ex¬
clusively
a
petrochemical, but
until five years ago, it was de¬

definition

chemicals

and

products

for ah important segment.
know the story of Simon

In

from

say

simile

building
want

you

6.8%,

for 6.8%.

from, natural; products by soapers
and

construction

1.8%,
petroleum
1.2%, and all other

instance, yet sold in competi¬

tion

might

refining for 3%, steel products
for
3%, plastics fabrication for

thing

same

for

for

from different
raw

this

if

for 8%, agriculture
rubber
and
leather
products for 5.5%, pulp and paper
for 4.3%, mining, smelting and

made

are

by-products.

instance,

And

carry

materials

raw

favored

26.3%,

chemicals and allied
15.6%, foods, food
packaging for 9.3%, textile prod¬

and

on

blocks."

field of chemical derivatives. Now

statistical

for

the

as

had

ease.

products

well

journalese
the
expression is "chemical
-

chemical consumption by end use.
Direct consumer
use
accounted

the

material,

raw

for

it

membered the

processes

techni

rived from carbide and the basis

uses

they
with

dehydration — I
might at this point introduce some
figures breaking down Canadian

re¬

term

for

Talking of use—at the risk of
some

based

refinery

(coal,

sources

etc.),
whose
already.
So
sold
successfully

were

'

Gulf

thing

and

capital investment
required for plant specifically to
produce these erstwhile raw ma¬

which did not normally occur in

agriculture,

word

for

California

material for the petrochemi¬

being

the soundest."

that terminological laxity,
petrochemical. In re¬

cially

for

of

cal operations. For example nat¬
ural ethylene in refinery gas was

petrochemical operations. Expects
increasing product complexity and optimum chemical engi¬
neering to overcome raw material competition, and the "race

so

in

Special plant and

First, however, to define some lanty to chemicals already avail¬

as

complete utiliza¬
materials. This
the major refining

raw

9

ates, is intensifying as petroleum
refining seeks methods for keep¬
ing up with the advancing octane
demand. At present, processes for
converting petroleum hydrocar¬
bons into high octane aromatics
are very much to the fore while
at the same time petrochemical
interest is directed to such: things
as
cyclohexane
(an
aromatic
precursor) and the aromatic paraxylene for synthetic fibre manu¬

large

ously was able to obtain
petrochemical industry,

tion of oil, which necessitates special plants and

the

the

The

supplemented by cracking ethane relatives,
they also look at times
—and depending on the economics like two enfants
terribles grab¬
holding at the particular loca¬ bing each other's building blocks.
tion—propane or even naphtha. In
With
the
expansion
of
the
addition, this tailor-making of
petrochemical industry, the same
"raw" materials led to segments
techniques applied to petroleum
of
the ' petrochemical
industry refining have enabled many of

will go to

of

Large Capital Investment

prod¬

then to be introduced to make the
raw

almost scavenger product. The
result, is described as being
squeezed by increased costs, resulting from complete utiliza-

j

the

Canada—at Montreal and Sarnia.

and

:!

for

re¬

utilized.

emj of the "good old days" for the petrochemical
industry
new developments both here and in Canada
prompt Mr.
Ash to describe the growing closeness and yet
competitive
separateness between the oil and petrochemical industries for
oil's law/ material by-products which the petrochemist
previ¬
The

r

to

normal

were

demand

tion of these

M. V. ASH*

from

gases

operations

Increased

Relatives Growing Closes?
By W

(2065)

'

.

•

white, weld & co.

.

24

10

The Commercial and Financial Chronicle

(2066)

in France in 1929 The result was the now famous in going into the till for $5,000
so bad that as
1953-54 recession.
.'<-■■■.
extra. This still leaves him $15,000
waited in line to convert your
There are some who think that short because he hasn't been able

when

.

you

was

things

travelers'

Age" editor advances two-point program to stimu¬
employment to bring the nation back to
prosperity. The crux of the problem, Mr. Sullivan reveals, is
replacement of obsolete equipment with new cost-saving ma¬
chinery which entails, one, immediate temporary action on fast
tax write-offs and, two, recognition of inflation's existence by

window

the

Also,
Uso, I

only

way
gap

into

files,

the

I

up with a copy of a talk I made
two years ago and I would like
to quote one paragraph of it:

of it.

"For

look for

we

,

As

recom¬

of
there

year

if

1955,
is

The

that's

50-50 bet

which

are

"back

George F. Sullivan

likely

about

bang, to

a

to come
level of

a

some

America

areas

attack,

can

some

been

mouths

before

shot

we

have; satellite. This barrage
like

why

you

off

approach!

point of no return on capital
equipment. This is a rather broad

statement" which
difficult

the

to

ises by the

Army, the Navy and

Now I'm

day

were

are

and

we

resnect

hi„5

are

,

nrnmn,?v
promptly,

The

reason

was

the

steel

1955.

.

has

front

past few months I have

f1

of

"

made
of

ew

^
the

his

strike.

-One of the other sentences in that

paragraph is one I want to repeat
today. That's the one which read,
**More
€<More

inflation

That

last

easiest

is

inevitable."
inevitable.

statement

ou

prediction

made.

anyone
-

unchecked

and

1956,

year

Gross

almost

amounted

to

about

National

ever

-

Inflation continued

3%

for

the

of

the

Product,

or

roughly $14 billion.
So my prediction turned out to
be fairly lucky.
I

still

am

as optimistic as
ever
long-term outlook for
business, but I respectfully decline

about
to

the

advance

detailed

a

prediction

for 1958,

Never before in

history have

so

many facts and figures been available

to

so

many

before have

people.

had

we

so

Never

many

it-yourself economists whose
bers

are

before have
eo

legion.

now
so

do-

num¬

And

never

many people made

many
predictions.
I see no
in adding to that collection

aense

at this time.
As

matter

a

of

fact

those

<.?aturday

•

Post

fol-

Eveni^g

during the past year will
recall that there has been a
great

**as
.

°f

confession

•:rue

ranging from June

stories
Allyson, Diana

Barrymore,
Vic
Damone,
and
George Raft on through Charlie
Chaplin and the family that went
broke by buying on the installment plan. Each is a great
public

bandwringing
great

or

down

on

world

to

have

spectacle

these

as

once

great people get
their knees and tell the
what

sunk.

It

a

is

low

ebb

really

on

°n

it?

about

is
But

What

the

that

soon

,

♦From
the 40th

we

will

is

the

things

Two

occur

;

inflation

what

talk

by Mr. Sullivan before
Annual Meeting, American Zinc

Institute, St. Louis, Mo., April 14,




1958.

method

within

in
mortgaged house filled
and so
he meets the minimum

(2)

reason;.

on

...

-

o

;

j

is

used, there is at
present no provision for inflation.
There is an ostrich-like approach

S^^nery ^n(?

.

more an(?
every year. There is---at
the thought that

,

imP 1
if

we

it

will

close
go

shown
sup-

We
can
take a leaf out of the poli«Tf
llcians D00K- 11 you can't lick
'em, join 'em."
• ;
By .the latter remark M mean

a

$5 billion

a

dition

my

of

year.

own

run

From the

front

changed.

to

lawn I

would say that this is a very conestimate
estimate.

'

•'
■

'

"

ty field and
•

Point 2—Under the Employment
Act of 1946 it is now the law pf

con¬

the land that it shall be the

con-

rwantr

National

Council

Noise

11 tirmino' nolirv of the Federal

estimates

Abatement

XXVWVVXXXVX1V

we' have

that

noise

costing industry $4 billion
Plant

liable

is

a year,

disease, according to

re-

government

sources, costs
And there is a
little item of termites, which fig-

to

coordinate

"«

1^s functions and

and,», use

:X.\ -V>

resources

to -

promote maximum employment,.
production and purchasing power,
within the framework of free competitive enterprise. Since this is a
law> deficit spending, which is inflationary is usually needed to
comply with it.
In other words whether you cut
taxes, extend unemployment beneAlts or push public works proSrams, you are going to run up a
deficit and deficits spell inflation,

■

our

eyes

this

to

But

away..

that

There

is

inflation

we've just

not

likely to

all sorts of schemes
afoot today to spend our ways out
of this recession. In
metals, things
are

rough.

are

•;

That calls for

spite

of

spent

the

on

strong action. In

millions

PWA

that

were

and

boondoggles
during the 'thirties, the economy
didn't
develop prosperity f until
the capital goods industries began
come
alive as a result of the

to

in Europe.

war

thing

-•:

another

rMirig with the punch
represent companies

tinuing policy of the Federal Gov-."-j?
Gov"g00Ci

ef_nfnerd

forth.■-

so

There is

no

such

free lunch.

as a

,

As corporate officials and man-

agers

part

The

have

_x_

their

of

ground 11
have
CI V
glUUIXU

some
OV/Ult

of

way

Thosewwho
who

assets

a

•_

xi>_

in

the

comnetitive.
competitive.

V

•

And
.

.

so

r

,

nght

'

Two-Point

.

only - if ^ industry is healthy will it
^Uy those materials in
the quantities needed for efficient

„

,

have been for replacement — for
new machinery* to compensate for
the
cost of ' labor—to stay

|J1 UlvCHvlli But
UU
protection.

ke

.....

.

,

Plac^-dhnng .the^st^few yearj

I

•

now-

Solution

propose
-

^

?•

two

j

;

things

One:-immediate tern-

P°rary. action on accelerated .dereturn a reasonable profit. There- Preciation. This would be a shotfore> metal industry has a very m-the arm program to last until
ures out at $100 million a year,
definite
stake
in
the
over-all step two could be implemented.
Not to mention fire—at $1 billion
health of almost all segments of
^eP ^wo calls for a law
a year.
metalworking.
"
Quickly recognize the presence of
I have further computed —
Unless tue metalworking indus- inflation by permitting write-off
and this figure isn't very reliable
an(^ jn fac^
American based on replacement cost instead
—that the coffee break is costing
industry — gets some reasonable
the present antiquated method
employers $4 billion a year in lost
changes in the tax laws; that relate
basing it on original cost. ;
time.
But if we cut it out, the
Point 3 — In spite of all the to depreciation, industry simply^ 'We'll come out of this thing as
economy of Brazil will certainly things we know about, our econ- will not have the money to buy we've done before. At the moment,
collapse and it would cost us a omy and the supposed skill we enough of your products or those *he only question is when.' But
fortune in foreign aid to hold it have acquired in managing it, we of
anybody else.
regardless of when it is, we might
Up
g0 this is an area perhaps have not been able to prevent an
We have in this country, a dy- as wel1 agree that: long-term inbest left alone.
'increase in the cost of living since namic
economy—an economv that flation will be with us.
We'll be
Now, with the possible excep- it turned upward in 1933.
must be refueled in flight., We much better off if we recognize
tion of the last item, these are
As proof of this statement I re- have to keep, moving forward or that fact and make our plans acareas
of waste which industry is call for you that we have : twice, we. shall
assuredly slip backward, cordingly.
r>4-fr,r»l;rinrt
txri-fVi
•fvieH
in cfniVI
inf'lo + inn
Tho -fivci
riWn..1
T T'nali'yci
attacking ard with good reason.
tried to stem inflation.
The .first
We should hit"a gross national
; I realize that the metalworking
Another and a very significant effort was made in
1953^ There;is product' of more than $600 billion industry has its own tough probarea in which we are wasting our an
inside story on that ,- which in 1965. I 'am expressing this in lems with the Federal Governresources is inflation.
might interest you. Shortly'.after, terms of current dollar's/ Actually, ment, but realistic depreciation is
Since 1933 the penalty for sav- the new administration took over, with
'inflation? it should be soihe-' another area in which all industry
|ng nas been 3% a year com- and'-well aware • of the dangers-;ofv'wfi^t.'higheii-thaii'thatj'"'7':.r.i: can . get together and agree to
pounded annually.
'
the continuing decline inithe pur- v To hit this gross national prod- pitch in because it is a problem
You need only go back to 1947 chasing power of the dollar," itiwas' uct •
figure which is about 50% that concerns all industry and ift

$3 billion a

year.

operation

and

at

prices that will

—

_

„

^

nrJ

to

find

a

flation.

ranrnn

•

staggering toll from in- decided that the way to slow» thenational prod- inflation down was to try to de-

The gross

uct in 1957

was

$434.4 billion.

But

press

the

Federal

Reserve

>,

index

Wa

J

^

UiX-

above the 1957

level, industry will

have to spend on plant and equipment something

like

$370

reality all of the people.
*

'

v

f

billion

Join Hannaford & Talbot
of industrial activity. A very high in the period 1956-1965—and if it
official
of
the
administration, does this it will be short by about
(Special to The Financial Chronicle)
billion—which is a loss due to in- speaking off the record, told a
SAN FRANCISCO, Calif.—Wil$70 billion. This means that after
flation of nearly $100 billion.
group
of newsmen—and I was applying all its depreciation re- liam L.
Appleby and G. Wesley
Can inflation really be checked? among those present-^-that it was serves and
taking out of profits Caldwell, Jr., have become affilWell, it was checked in 1929 at the proposed to carefully probe each all that can reasonably be taken iated with Hannaford & Talbot,
in terms of 1947 dollars that gross
national product was only $335.2

,

effective

but

segment of the economy with the
idea

of

trying to

slow

the

it

_

a

digits.

happen,

We should continue to

port a11 sensible efforts to hold

he

first, payment,

loss

This is estimated to

weeds.

a very serious depression,
In other words the cure was most

see

of the

sum

But I do know this: '; No matter

/

can we-

Suggests Program

(1)

by

which

spending
inflation.

causes

flation is inevitable.

do

neighbors

se-

rrninotn
going
to havp
have inflation
inflations^ Tho
The
are inseparable bedfellows.
So. I repeat, I believe that in-

by liq¬
on
his

thing
nearly killed the down in a reasonable and gradual
hi this same series one entitled
patient.
fashion.
I repeated this off-the"I was an Economist for the
FRB."
~
"
""
"
'
'
'
'
For
the
foreseeable
future, it
record statement to a friend
of
Let s get off the
subject of eco- appears that a certain amount of mine, an investment banker. He
I predict

from being
bore

I'llnot

in indirect costs

Next

they
heart- cost of

rending.

is delayed, the

statistical discussion

a

two

wRh mortgaged furniture,

clipping

servative
servative

the

was

equipment-!
this eauiZ
.r

way

are

lin-

to me:

par

in the

we have got to hav? iX a^d s0 we

Richard Roe is his grandson. He
won
the respect, envy
and,

little items out of long as
magazines and newspapers on the payments

more

if

So

"or**

iJSfro

admiration

And

" defense

wasteful. ' It

„7nc,foflll

and

hv

few planets

a

go let's face it, and in all

riousneSg

for the future.

c*

can't do much

d

,
J
«
npiahhnrc
hv

paying his bills
uidating
the
mortgage

which

u

envv

esp C

v,ic

n

a

concepts that m his
accepted as desirable.

"d; ^iethp
uie

of waste

some

t

bu

was

^

over

,

117.6 million in

long

a

accountant.

an

**re4v^r ^°rce on w^at each one

,

versus

that

entire economy suffers.

.

tons

more and more

replace

extent

—i—»—x

j.

prorn-

his television, refrignctivity equal to or greater than subject of waste. I now have a erator, home freezer, automatic that it seems only reasonable to
the 1955 average. Again, barring total annual waste collection here
accept the inevitable and to plan
washer, electric range, the ring on
our business and personal finances
a
serious steel strike, this could which runs to $23,150 million a
his wife's finger, and the trip he
mean that 1956 will be a new rec>1 :
year. An this is just a partial list: took to Hawaii last year, he is accordingly.
As individuals, we can-invest in
ord year
More inflation is
First is the waste and the loss everything
expected of a good/
inevitable."
realsestate and in common stocks.
caused by corrosion.
It is esti- citizen.
;
Anrl
^mF^r\^1V\inrnlr,
cfrnoi
Recall that steel production did mated that this costs us $6 billion
not set a record. In that
year it a year in direct costs
'turned out to be about 115 million

to

that in.

means

dustry is finding it

°xVr ment replacement

shortly

was

a

flood of rosy

as we

a

our

followed by

I

was

His life

basic

some

anyhow.

For the

quite

with

on

There

are

we

taking

mneties.

natural resources

our

probably best left alone.

there

but the fourth

is

we

attacking.

drop
in
activity
during
the
third
quarter

I

would

I

show

to

suggest

away
are

catas-

a

And

which

John Doe

have been most
prodigal with our

comments

There

small

quarter

depression.

reasons

wastefulness.

a

now.

There may be
a

level short of

father.

Europeans, and particularly
British, are quite caustic m

their

strike.

no

And

the

serious threat.;
have tried to beat the

more

Oh,

-

believe this to be true:

We have been wasteful

of

the

1S

see

1

four

qivI enmp nf mir- human rp^nnrrvs.
and
some of our human resources,

the

-above
boom

of many

is that I

way

thropic

we

and

resources.

Dollars Value

4

have passed the
point
0f no return in our battle
against
inflation, so we are all
Just

face— jng

menaces we

Russia andr. inflation—the > former

^

to say

mean

to the 1950

il/npacaiii«/>oc

wasteful

may be two
million tons

the two major

:

'v;-~

Facing Point of No Return

daily

our

nation,

a

foreseeable ~fu-

the

to restore the value of the Russians by verbal inflation, which
dollar to the 1947 level or even has consisted of shooting off our

no

a

which

«teel

I am
anil

in

^

What I

Our Wasted Resources

record in

new

lives.

1956,

"

.

_

1938.

have of the respective^ services
For
one
thing,
times
could j don>t know the - differenc^C
business changed, hei's contrast the family" and^would do.in the future about, iv/een
depreciation on a double
speaking of waste.
getting
to
the
moon
and
maybe
man
of today
,
^
i • :
with his ;grand-- gpttins tn .the moon and mavbe declining
balance method versus

in

us

inevitable

x

not saying that 1
I am
am, ture is this: We
We Have,
have, 1
I tnmK
think beDeNot even aylatedly, finally concluded that of

am

bit

No Way to Restore

nomics for a moment and talk
about another subject which concerns

'

-

to meet foreseeable plant and
in next decade.

came

The final point in my effort to
that Ibelieve inflation is

show

'

to

Digging

you

favor of inflation.

in

little

permitting write-offs based on inflated cost—instead of present
method based on original cost. Sees no way to restore former
1947 or 1950 dollar value in expressing belief, but not approval,
are

the

getting 50

were
francs to the dollar.

.

equipment

Federal Reserve Board's ac- because of the tax laws, to
detivity is trying to stop inflation in predate the machine at the rate
1957 may have contributed to our he must in view of the price inflacurrent situation.
" ; !
tion that has taken place since

Franch

into

checks

might actually get one
franc more by the time you got
up to the window. It might start
at 49 and by the time you got to

"The Iron

policies

were

francs you

late heavy industry

mended

not

am

1. personally

Editor, "The Iron Age"

price inflation is inevitable and that

Thursday, May 8, 19^

.

the sort of runaway

..

By GEORGE F. SULLIVAN*

that continuing

.

speaking about me, Bob, there's only one, way to ciation account.Sure,v. the. ne»
inflation that stop this thing; we're going to hit machine will be about 50% faster
Europe had after World War I. I it with a meat axe." They did. than the old one, so he is justified
I

terms.

Facing Point of No Rotnin on '
Plant and Capital Equipment

.

inflation is inevitable.
Before

we

get

further, please let

into
me

laughed.
this

any

define my

"Did so-and-so

actually
Why, I had lunch

out, it will still be short $70 billion 519 California Street, members of
to achieve this goal. This goal is the Pacific
Coast Stock Exchange.
merely
a
continuation
of
our
growth over the past 40
To

bring

vidual

case:

it

down

the

man

to

years.
an

indi-

who needs

a

A. McConnell Opens
PENSACOLA, Fla.

Beret A

$30,000 machine tool to replace McConnell is conducting a secutell you that?
one
that he bought in 1938 for rities business from offices at 542
with him last week and he said to $10,000 has $10,000 in his depre- South
Barrancas Avenue.

Volume 187

Number 5740

.

.

The Commercial
and Financial Chronicle

.

(2067)

11

automation

be¬

b9;v
no

OfM. Y. Fund Drive

f

■vte?

F.

^Reynolds

and

Harold. A.
4

Cook,

partner

Company,

Rousselot,

and

partner

of

Francis I. Bu Pont and Company,
are volunteer workers in the pri¬

j

vate firms division of the

teifiNew

York

a

industry.

Cook

Mr.

^American

is

Chairman

Stock

of

Exchange

the

wage

group,

It

t-hanges group.

-11

000, to .help 425 ^hospitals
& health' and -welfare agencies.

sued:,v-V*'

/

■

-

is

not

auto

^0Tmul& tied

a

custom 'to

my

dfeeuss?"

'»

Reu-

likelihood

'v

J^-v-fdobile

aSu

ihrenf

ft

!

Jr.

T,

nrOFHc

p ofits

'v

"

of the

k* He /.was

]i Hutton
mutual'

n

.,

au to

ly

^formerly

& ' Co.

i

York

as

a

with: E.

F.

specialist

in

funds; and previously

11 c

r

e

was

-r'V

'

/

luc

■and

Shaw, Hooker & Go.

;

(Sppciai; to The Financial Chronicle)

"

.

J ft./

^jCo.i 1 Montgomery
..bers

the

of

Street,

mem-

Coast

Stock

Pacific

Exchange. Mr.Nowell was formerly an ^officer of A. R. Nowell

j;'& Co., with which Mr. Buder

wns

also associated.

W

•

skilled

.

ui.,,.

«,

tfUl
■

'i.iT

VK.

Samuel &

am,

.

.

still dependent

are

The® AW treasury has already
.

•

nlan>.■

as

,-feel.obliged to compromise and a
strike should be averted: But if
by

mnrp

chance

f or ••■called,'1
to'

money

01]e;

union

<

astrike

should

believe it will be

be

i}-.-

.

,

new

a

sharing plan.
very

.

and
i

to.

seems

■

'

t

me

far-reaching
t

a.

j

1

"l-.

a

ail

dej

ixit

'a.

makers"will: refuse to
With it

'*

'

auto

now

industry

V

*

^

Committee

economy. "* As

;

Bond

New

— Milo
F.
Clapp lhas become associated with
the Samuel & Engler Company,

for

V16

East Broad

Street.: Mr.

Clapp

_

in

and

force

m

which

"r

its

by

boosting

acts

of'

labor

unions

in

our

next

generation

calling for
on

the

a

during the
of two, changes

series of adjustments

part of both

management

and workers.

>■

t

...

■

•■■■■.

Management Can Do

The agreements

r

finally reached

the
the

dustries.

(Ford)

to

What 'can

t negotiations. r; Other,
so»tc mar nlcn
'fringe" benefits
may also

y>q'11oH^
called^'"-frinofh"

management

protect itself from the pit¬
that lie ahead?

it must do

fn<^

P r e

an

:

offer to sell

or a

h
)■-■

/

:

more

First

Ira
DALLAS,

-

Havpl
Texas

—

Edward

more

an

Ira Haupt .«&

Co.,

-

.

Elections will take place at tho
annual

meeting

which

jjfj

ties .Company and prior thereto
Schneider, t Bernet. &

Avas... with

■>,

>

Hickman. Jn -the

^

past he

] Stifel, -Nicblaus
,

&

"

was

Club'3

field day at the Westchester Coun-*

try Club, Rye, N. Y.

With Suburban Sees.
CLEVELAND, Ohio

inten¬

P.

Street.-

offer to buy these securities.

offering is made only by the Prospectus.

i

Co.,

-

St. Louis.

.

:

Telephone and Telegraph Corporation

The C.oypomtion is
offering to koldeirs of its Capital Stock rights to subscribe for the Debentures,
subject to the terms and conditions set forth in the Prospectus. The subscription offer will expire
< at 3:30 P.M4..New York City time, on May 21,19S8. The several underwriters have
agreed, Subject
to

7,

certain conditions, to purchase any unsubscribed Debentures and

Inc.,

and after the

subscription period,

as set

may

offer Debentures, both

V

.

forth in the Prospectus.

in

Iic.'jr
•in

i\h/
'*(

;
-

'

-

•

Clarence J.

:
-

i

Whitesell. has

Exchange, as
newly
JPePed syndicate department. Mr.
Whitesell was formerly in the
syndicate

-of

the

department

of

Town-

Hayden, Miller

CLEVELAND, Ohio
"E.

■«;

Jones

has

become

—

The First Boston Corporation.

Glore, Forgan & Co.
:

:

Blyth & Co., Inc.

Eastman Dillon, Union Securities & Co.

Goldman, Sachs & Co.

;

Harriman Ripley & Co.
Incorporated

Lazard Freres & Co.

■

Lehman Brothers

-

Charles

Merrill Lynch,

.

Pierce, Fenner & Smith

associated

Hayden, Miller & Co., Union
Commerce Building, members of
Midwest Stock Exchange. Mr,

Jones, who has been in the in¬
vestment business for
many years,
formely with

any State only from such of the
lawfully offer these securities in such State.

,

with

was

be obtained in

as may

Kuhn, Loeb & Co.

send, Graff & Co.

Joins

may

firm's

(Special to The Financial
Ciirontcle)

i

Copies of the Prospectus
undersigned and others

be-

come associated with Cohen, Simonson
Co., 25 Broad Street,
New York
City, members of the
New York Stock
manager,

•

SUBSCRIPTION PRICE 100%

WhHesell Synd. Mgr.
For Cohen, Simoiison

Baxter

Digitized and
for FRASER
Field, Richards & Co.


&

Co.

Paine, Webber, Jackson & Curtis

.

;

•

Smith, Barney & Co.

White, Weld & Co.

*

C

-a

*

i

H. M. Byllesby and Company
(Incorporated)

May 7, 1958

Dominick & Dominick

—

*

Anthony

Cognelio is now connected with
Suburban Securities Co., 732 East
200th

4%%Coatvertible Subordinated Debentures due May IS, 1983

with

will, bo
13,

held at 1:00 p.m.,
Friday, June
in
conjunction with ...the

First National
Mr. Jilek was

.

n

Topping, partner }n J. D. Topping
& Co.; Governor?, John C. Fitterer, Jr., Kuhn, Loeb & Co., and
E. Barron
Rockwell, Vice-Presi¬
dent of Halsey, Stuart & Co.
/

.

jjjBank Building.
^.formerly manager of the trading
department ;for Municipal Securi-

tho

of

sive training in labor relations for
it will still be quite dependent on

solicitation of

of

ther

o r

tary, John J.
Vice-President of The Chase Man¬
hattan Bank; Treasurer, James D.

J.

Jilek Jhas Become associated with
,

t,

C h iSecre¬
Ward, Assistant

.

International

Co.&

e n

pany,

,

>

i d

cago;

..

all,
than simply give

Management needs

M. Merritt

Edward J JiUWHh>

ti

nom¬

Trust Com¬
W.

in to labor's every demand.
.

s

dent
N

.

headquarters in Columbus.-

an¬

*<v."

Vlee-Pffesi-t

,

f was formerly Vice-President of
•y Dodge -Securities Corporation with
i'

been

inated were:
For Vice-

and upgrading qual¬

by the UAW and the large auto
companies will undoubtedly have
an
eventual impact on other in¬

benefits under this
llllb SUB
OUD
plan will
JUlctli
Will
be increa3ed as. a resalt of the

*

a".;.

>-

to

Qthers

labor, if labor

part

There will be vast
changes
labor situation

years.

do

The
:

o1

1958-59, it

has

increase demand for
labor-saving
devices. Automation will become
more universal
during the next 10

falls

management'

.

■

Club

York

nounced.*

only to stiffen the attitude
of management and to hasten
and

Union seeks to expand—was1 orig-

^ This advertisement is not

/•'.v.'

Tho

be President

fsppcial*to"the"finaneial Chronicle)

COLUMBUS, ,; Ohio

tho

of

Municipal

re-

a

tend

inated• by

go >along ; present

'

by

Nominating

re¬

Dapiel O'Day,

Unwise

<

i : UCHcillh ^UIIUCA
*'i

iin<:' 1 pmUct that -the auto

.

Merritt, Vice-Presi¬

ity.

What

Benefits plan

- •

profit-;

time to make such

poor

v

This

type of

more

M.

dent of The First Boston
Corpora¬
tion *. has been proposed

on

sup¬
In recent years*

concession to

,

What the Workers May Get

is

It is interesting to note that the

-

after

short

a

Supplernentary Unemplayment

ler—adopt

our

ard
because so many does not do
me,hbers are working only part productivity

demanding that the Big Three—
.

Municipal Bond Club
Wilbur

spect for the workingman and his
place in

more

-to«ti,Tie

insurance

the

Merrill Named to Head

we
are losing
sight of
important fact: Labor's for¬

een

;In' addition

requests,

.

afraid

one

are

con-

ac

without either side using -Russiantype threats or sharp maneuvers.

all

management has shown

Engler Co.

,

v.

JV

these

...

.

..

"

>:

♦

the

General Motors, Ford, andGhrys-

■.

.

lllapp
vnlh
riT
.,

all

°

:;;

.

workers.

expensive

'

*•

w

10V

:

^

FRANCISCO, Cal.—Loren
Nowell, Paul O. Buder and

5. Richard L. Margraf have become
Associated with Shaw, Hooker &

■

s e

benefits

Roger W. Babsor

well

B^'jSAN

;

Strike

Reuther has not yet backed down
expanded hosl .011 any of ^ 1958 demands, I
pltalizatioii-iiorecast.tirat in the end he will
oension

c

a

aH

-

"

*

this discussion of
nego¬
tiations between
-management and
workers in this:vital
industry, I

t.

UAW—irt' order to ease its finans i d e r a b 1 e
ciitl "Position^—was obliged to cut
broadening'of salaries of some employees. Althe present though so. far as is known, Mr.
seeks

executive in the textile indusrltry.
.—

.4;..,.,,^

' '

Labor-Saving Machinery
In

or are not working at all beabout 11C >- ah;:cause
°f Pl»nt slowdowns and
hour
Tt
c,wn ishutdowns.
Only
recently
the

iaan

.

°for

asking

°eneral wage

a

labor on
to mutually
things. Such negotiations,
however, must be carried on in a
mutually
Christian' Spirit
and

.

*

lead

,

industry,

•

,

profits.

to avoid socialism

are

.

equivalent

Stock Exchange.

i)

New

'

.

po.plVsa,

f

the

m

has

v

Broadway, New York

members

or
■"

t

industry managements

the

and

a

decrease tied
ume

we

country, management must
capacity to look ahead

the

this' better

on

sliding-scale increase or
up with sales' vol¬

a

If

now.

have

widespread than it is

more

in this

man¬

reach

when

even

unreasonable jsult " there is
usually less wran¬
*
demands of labor-than they have
gling in labor negotiations than
V " been in recent years. • I do not
was
the
case
some
years
back.;
share this view about a strike of But
the
management will not sit idly,
any length, and here is why:
by forever and make concession

What Labor Seeks
4u-

appointed mutual fund sales
of J.
R.
Williston
&

City,

form of
"

better position to stand firm

a

;/■/''J sgainst

,rmanager

J Beane,115;

a

will

compromise

ply and demand.

With Williston & Beane

It been

of

labor

issue.* Possibly-this will take: the

-

and

-

Johnston,

conclude

tunes

if. S. Johnston, Jr. Now
\
S.

will

.

Perhaps

labor

and

satisfactory

Many observers believe that

:in

f

impossible.

agement

auto

to changes in sales-or profits.

'

tFrederick

U. A. W.

Supplementary

little

sees

all, in the

Unemployment
"fringe" benefits increased only fractionmakers will reject profit
sharing and thart

^?w> 'however, Mr.

es"

at

fraction¬

for a wage increase
of the size asked for
by labor now

increase demand will be
compromised and take the form

^

"H^The "Fund's goal fin 1958, its
?'l20th Anniversary year, is $11*000,-

why he

on

strike

the

suspects

increased

Benefits and other

cam-

or even a

only

comes

seems

publisher writes

Mr. Eabson

ally. -Predicts

!s-

and

lengthy strike,

neg°tiations; with

1958

Fund

editor

chance of

but

Provision

of

Financial

increased,

ally.

By ROGER W. BAUSON

e

Donald

be

The P«,p«ed Auto Strike

Dean-Witter & Co.

,

The Commercial

(2068)

12

*;

Fair
■ .iV

m

•

Washington Office,

SIMMONS*

American Viscose Corporation

particular

this

remind¬

Scripture:
"In the day of prosperity be joy¬
ful, but in the
of

ed

appropriate

an

circum¬

day make this
timely
coun¬

lion afford

all too

{ Francis

consider/ seri- ♦>

as

which we have traveled,
contemplate what is. the

tacked

many's 35%.

inspiring thing

-

-

1934

still the

ni

....

the alleged advantage to
from lower prices,
competitors. We
is vain the freedom
ask no quarter on technology and and democracy of Communism.
manufacturing ; efficiency,^buk Experience is all to the contrary,
sweatshop labor outlawed'in this LetWhen
me demonstrate
that fallacy.
the domestic industry has
country is no more palatable when
it originates abroad. ^
business is

been

-

r.

the impact
to Front

There

10 *ideiS

subject to price controls, as

American'foreign aid.

sidized by

foreign
aid.
for foreign

$70 billion,
of this has

price ceiling of 25 cents a pound; Members of Congress are interimported staple was selling at ested •-increasingly
in diverting
IC A-administered'
foreignaround 40 cents a pound.
"
aid dollars-.to domestic industry,

omn.np.

_

n

,arnnn.

n„

but
carries right through
vto'Tif

tAowinc

Royal,

fVivniicrh

Many com-

more

In to1947,
when domestic
prices
an average
of 32 cents,
for-

from our own
Spokesmen 1 for both
the Northern and Southern textile
industry • have
been especially

by purchasing more

rose

producers;

eign staple sold here at about 45
cents.
Given a market and inef-

*1,

a*

x

that time

At

the pioduction

staple, which now has

exactly as much as the traffic will

of town

be-

predatory pricing, known
"dumpingi"
upon

frown^d

as

noS

Front

...

„

0

'the .Administration even

;

Ana

t oreign

'Congress has

the pres¬

structure and, there-

asset,-placing unmatched purchasing power in the hands :of America's consumers and sustaining our

the combined output
ican Viscose

high levels of production. Tn com-

peting

of the Amer-

plants here at Front

with foreign

ever, the
a

;

.

"

"

'

-

-

-

-

the

decided disadvantage; That dis-

procurement abroad."

advantage carries over i to the in¬

;■ $2. Our chief competitors in West

,

cbuhtry; frequent-.

ly to the distress

!of, certain'l^ss

adequately
protected industries
such as textiles, on which Ameri¬
Viscose

pendent for a
its market.,

Corporation

de¬

is

substantial part of
*

Trade Program

hope to enlist interest for I
convinced that in the long run,

only

the

active

support

formed citizens will pave

*An

address

the Front

Royal

by

Mr.

of

in¬

the

way

Simmons

before

Rotary Club, Va., April

1958.




;

textile indus-

resunanl

labor have

suluiu0

been'evidCTtt for many

dis^^gb. wS'to ^offshore"

.

sup-

pliers.
In

1956,

the

,

International Co¬

operation- Administration, which
administers our foreign aid pro¬

announced invitations for
$10 million worth 01

gram,

than

more

.

products,
our

up"to the PW«e. charged- at* but you also out-produce foreigh rayon-staple and related
hoine''We were denied that relief workers." We could wish this to ^iefly for South Korea. As
He 1^^t
watel\es and^l^ks, because
foreign producers resorted be an effective offset, but it is industry byatcutbacks
that tune
washous¬
deand
nearlyfoi
70%
to
subterfuge that evaded the increasingly inapplicable. Amen- pressed
in and
auto
Pia"
duction, textile output^
industry's productivity gen¬
markei
ing
construction,
the
ICA
business
terjelveteen fabrics. .. Act.concerned
That ls why
the industry ls
The plight of the velveteen 111-, so
for 4 enactment * of erally is unexcelled, but in certain
and
of''the dofnestic

a

*

'

—

'

-

-

*

-

can

dustry strikes close to
recently as 1952, the

home. As
Crompton-

H.R. 6006 by
to

revise

the present Congress

the

Antidumping

Act.

Shenandoah Company in Waynes¬

This has been passed by the House

employed 150 operators in its
velveteen-cutting division. By the

of

boro

Outmoded

tne

Gf foreign textile industries. Of
neariy $10Q million paid for fabricated textiles in fiscal year 1957,
93% went to "offshore" or foreign
$10
'and:
to textile
ma-

v

trade with this

,ana

•i^havfbemi^vfdentfOT'manr
J

„
dumping Act of 1921, we expecteid;Productivity Comparisons
Narrowing i
;
^
This, of couise, is only one ex¬ relief in the form of an antidump-V y
! stands as one of the lowest tariff, ample of import market invasion.
ing duty, which would simply have,
When this differential in wage
countries
in the world. Under I could 'cite numerbus oth^r in¬
brought the /price charged by for-; costs is, mentioned, the free trader
existing rates, foreign exporters stances, such as the loss of 52%
eign producers to the American argues: "Yes, you pay high wages;
I have found no difficulty in constantly increasing their volume of

United States

plight of the

The
,.rv

fIt. about 20 cents. The ; American
c01^Plaint to the Treasury.. woolen worker averages about
-1?®- *
Customs $1.60 per hour. His British com®arj^au
evi(I®nc®
paid Statistics
50 cents. compariThe Bu-.
of dumping.: P^nwL^acle
The Department
of petitor
reau of is
Labor

Ruyal and-at Parkersburg, West
imports that have been Virginia,. Most (' of this : foreign®
dumped into the American market made staple was sold here at Commerce determined that the, sons for -other industries
lower prices than it brought in
jat unfair prices.1
domestic industry was being in-, countries show the same wide
Since the passage of the Trade its own home market, a clear case
Jured«
,v
i
parity.
Agreements Act in 1934, American of the unfair trade, practice, of.
Under the terms of the Anti-«:
tariffs have been pined 'to the "dumping.". ...,v
jobs from

weigh the

is at

average nouny wage is about

_

surplus . . ;r which out¬
economic advantages to
United States'of less costly

labor

of

American worker with

the world's highest earnings

.

the economy
economy of the United States,
with special reference to any areas

-

labor, how-.

-dustries paying those wages.
manufacturers,seeking
In our industry, for example,
the Antidumping Act,, the average hourly , wage is about

(1955-1957 range)' are idelivered to invoke
annually to American textile 1U1.1S confront odds of 25-to-l,

.

.

ment of commodities outside the
United States unless the President
determines that such procurement
will result in adverse effects upon

economic;

regard high wages as an

„

American

jjobs that depend on it. I will be
I obliged, to explain more later as
to the! jeopardy to other American

the

though

made adequate pro-

Rovaloutnut' generaHy among the free nations Another point at which the free- visions. Section 530 of -the Mutual
-theory bogsWedown
is on Security
Act provides that "Fuixls
the General Agreement on trade
^age stalldards.
jcommonlv
may be used for the prociu/e-

,

| point1 i where

American

Corporation is. any guide,

altruistic

...

live

ent tariff rate

•

experience of

.

and of AVCs
.

would in no way change

;

•

-

the

If

,

,

rayon

foreign

prevent

to

see^s

loreign

P^ely new industriesbasic
have Tariff
come
^? ^e{Qo0Sin<ie G
/YCb ul

;

vocal.

n cie experience v*
concern
for none
consumers
claimed for -the
influences of the entire textile
^ seexs to prevent^
bear
-with
0f
the
Viscose
them by free traders.
:.
industry and its Congressmen will
- . .
,
» mi. •'
market or elsewhere^ This
__r
be taxed to wrest anyrelief from

b'

who imply that was
anrl •Tcnd#»4(r
attS
Ton
more thap, a fond Tarrffc
larnis and
Trade*(GATT).
Confailure to give the Administration hope. As a-result, the tariff pro¬
gress attempted to outlaw it in the
additional tariff ^cutting pow ers tection which was accorded the
,/chio luifeun
hi.v..
.
o
,70.«n
mrino+i'\r mno Antidumping Act of 1921, but unfor five -juvic
more years
might throw
countless Americans cut of work not
f "extended proportionately to
+A realistic
definitions and resultant
.court decisions have defeated the
and drive our allies into the arms
staple, which hps suffered pro¬ purposes of the Act.
of Communism.
I hope to help gressively under the ^antiquated
"Let's look at the record. Sjince
restore this national issue to sen¬
1934 Trade Agreements Act and
Jan. 1, 1934 the. Government, has
sible, realistic proportions.
further tariff cuts.
handled 198 cases of alleged antiI want to establish with - you
dumping violations,;with finding
Impact of Import Competition
■* for domestic
beyond question thaL a refusal
industry in only eight
by Congress to grant the Presi¬
As a result, 85 million to 170 cases.
Speaking, of longshots,
dent further tariff-cutting powers million
pounds of rayon' staple

8,

industries should

developing rapidly. Many
of these industries have been sub-

not be

emer-

Antidumpiiijf Act Ineffective '
I want
to „emphasize especially
the.
comparison between the Rob.

need to point out

is no

past quarter bentury.

blurred by some

am

why foreign

son

from American

Unfortunately, the dear dimen¬
sions of the issue itself have been

I

of course, no good rea¬

There is,

•

~

compelled

<

-

developments in Washington,

can

.

.

that have been rience how> difficult Jt is to enter
appeal, the fact their markets and how free they
foreign trade are to invade ours. :
:

stmhhe moderof
moaei 01

and
best

icy, and yet manage to influence
every level of our economy. Pub¬
lie aiieuuuu.
v on
lic
attention, iueuBco
focuses naturally

!

'

■

For the rayon

,

the tremendous changesthat have •
a,,;i
cents, uiven a marxet and meir
on^t^n^ur foreifim ^ad^pnl- .-""Occurred
in cur national economy
fective competition
scope
and international outlook m the'Jsources, foreign suppliers charge

;

44%,

climbing

Democratic Action

0thers, is an

an(^

for vote
that: the

on

remains

path to follow as we move ahead.
v*™ mnirrr
hive broader

xvrc.

Italy's, for example
and West Ger¬

3-to-l;

as

told by the

,.

import competiconsider ;thefuture

to

"escape-clause."

nation

the.4matter of foreign
policy, to review the road
on

over

to

Americans for

variety-of competi-

E. Simmons

—

ously just where we as a
trade*

nations,

Ho

time to

stand

12%. , Gains in certain European
countries in that period out-distanced our own growth as much

for the uninitiated — it
so ideal.
A world free of
tariffs and quotas and other encumbrances to the flow of goods

it to

owe

ourselves
take

goal of the free- 38%, while American output per
makes good propa-, man-hour was - increasing only

'

well4 aware.
We

to 1955

sounds

between

Europe, reports that from 195o
industrial production rose

crn

ganda

.

„

,

avowed

4

Practice

f^wil^^ny'^'t^uranc^-vWhi^A^^C^^rican' business is compelled duripg -ihe World War II emer- sidized by American
[' FederaltjOve^nmbbf ^lings stUbto be .ruggedly individualistib gency, competitive imported prod- Our postwar, outlays
bornly to a program-of -the; past?,, uncler the anti .—monopoly laws, ucts have sold at the highest prices aid 'are approaching
':
No; matter whdt» hew ^window whereas the combinations, agree- the market would support. In 1946,r and a healthy share

ad-,

days, as

are

we

.

.

predatory

the

;,'able to low-wage

sel.

verse

The

trade campaign

ground-rules. This is the kind of
competition under which America
has flourished. The other kind is
...
.

Attractive Theory,

Poor

"
two kinds of com¬

But there are

American
Viscose Corporation- or any other
^nierican'mdustry th'atisfvulner-

to¬

These are

Free Trade

_

economic

for

petition., One involves a match
under mutually advantageous

How can

'ican industry'.

stances of our
-

spark

ing

particularly; labor

sity consider.
(E cel.; 7:14).

economy

ernments.,

x

day of adver¬

The

the

pro-

much faster than tile wage
gov¬ gap.' The Organization; for " Eu¬
' ropean Economic Cooperation
representing 17 nations of West-

foreign

from

the gap between

ductivity here and abroad is clos-

industry, produc¬
ion which we decided long since
tQ contemplate.
.
.
..
•
tivity
here; and 'in -the major
to prohibit in the United States.
.
foreign
producing countries is
Jr
,
,
,. _
Then another American textile
The great ma¬
Domestic market practices are, mill Qr tabieware factory is snowed much the same.
regulated by the Robinson-Patman under
llnfjpr by
hv Mmnnrts.
imports, and wp
we recogrecog¬ jority of the vast'Japanese ca¬
Act to prevent price discrimina¬
pacity, which rivals that of the
nize once more the painful dispar¬
tion; the Fair Labor Standards Act ity between free-trade idealism United States, has been built since
World War II with the most mod¬
to control hours of work and and the economic facts of life as
hourly earnings; anti-monopoly they apply to foreign trade in this ern of machinery and equipment.
laws; and numerous other equal¬ day and age. Suppose we take a The same applies to Germany and
to a sound, equitable solution to
izers in the interest of healthy few moments to examine some of many of the other European prothe foreign trade problem.
4 ■
these facts.
•. ducers.
The real point of price
competition. *
.
The
Administration's program
Similarly, the tariff structure
inr'u
»
,,
competition, therefore, is not on
What
the Traffic Will Bear
for
a
5-year
extension of the was intended originally by Con^-ost of raw materials or efficiency
Trade Agreements Act, with fur¬
A favorite argument of the free
0f management - but .specifically
gress to equalize.conditions of
ther tariff-cutting authority, seems
labor costs. '
willfully dedicated to the interest competition,
traders is
Foreign Aid Double-Barreled
of
the
internationalists without costs, between American producers: the consumer
.Threat
:
hy
due regard lor the effect on Airier- and their foreign
That idea as
as

.

addressing

frowns

draw

growth and vitality.

Act renewal offers no relief to import-dis¬
industries, nor will it foil the Communist
economic offensive, Mr. Simmons states in asking how can the
textile "or any other American industry vulnerable to low-wage
import competition afford to consider the future with any as¬
surance
J" if the Act does net stop "predatory variety of
competition" prohibited in the United States. The textile execu¬
tive hopes that a bill to revise the Antidumping Act will be
passed; complains foreign aid funds constitute a "doublebarreled threat; refutes claims said to be used in support of
Trade Agreements Act; and recommendseselective flexible
tariff formula to protect vulnerable domestic producers. -

In

sistance

Thursday, May 8, 1953

. . .

Moreover,

our low-tariff
Washington's strong re¬
to measures which might'

advantages of

the

policy and

part

nished

tressed American

subject at this time, I am

«,

give-and-take competi¬
and parcel of the
economy.
It has fur¬

is

Chronicle

v/.

American

Trade Agreements

.

v1!

•„..

.

tEnteiyrisef0;fffr',
Let me make it clear that we
have no quarrel with competition.
tion

FRANCIS E.

By

\

v

Competition .Under, Free

Healthy,

at

U.S. A.
Manager,

'■

>>

and Financial

summer

of 1957, after

over-run
was

the market,

down

to

17

imports had

workers.

Any

completely dependent on the for¬
bearance

of Japan.

pending

in

Committee,

this division Byrd.

slight subsequent improvement is
onmninfairr

Representatives and is currently

the

Senate

headed

by

lines

of manufacturing,

rayon,;

and

foreign

sometimes

output.

including

producers
excel

equal

American

In any event, it:would be

Finance small comfort to an unemployed
Senator American to learn that it takes
two foreign workers each drawing

appeared most inviting. We soon
found it was an empty hope.
We

learned

Korea
funds it re¬

that South

planned to spend the

ceived from ICA, your
and

mine,

to

tax

dollars

buy Japanese

and

Additional millions
of
dollars
were
expended f°r
rayon
again in 1957 and other

Italian rayon.

As far as the foreign producer: 50 cents an hour to produce what
is cJoncernfid» the windfall profits he could make
PPH at $2 per hour-in lucrative invitations on rayon are
made
possible by a slipshod Anti-'the same space of time. That for
dumping Act are simply icing on eign labor* still would cost only pending currently,4 but * it is sate
the cake, since he already enjoys half as much as American labor. • to say that , they will not accrue
_

.

Volume 187

the

to

Number 5740

benefit

industry:"
ICA

of

our

.

.

The Commercial and Financial Chronicle

.

American

'

100 claimed as .export-de-..
pendent; And even these 16 jobs

every

}

ports to deal directly with foreign

n?ace™their

orders

This

choose

prevailing attitude of
nations, such as France and
Britain, which decided long

other
Great

b!"ins1t horae"

funds rahould

be

spent wigproducts,
i.

Foreign Aid. Wins Few Friends

A'

v*

w w

*

vn

a

a

:

jivuuts

i Despite our open-handed generosity, we can never be sure that

our' sacrifices

will

good: stead, in

a.

Russia.

stand

showdown

A newspaper

poll

in

us

with,

(N. Y.

"Herald

Tribune") of 11 nations,
nil but 'one- recipients of United
States

aid, showed that

11 favored

neutral

a

country goes to

1j

viets

9

of

the

if

our

course

with the So-

war

'

'

.

.

.

.

Public., opinion favoring neutralismr ranged from 94%
in
Sweden to 54
In .between

Great Britain.

in

,o

..

.

IIn Unrlr

•

the

were

Netherlands

indicated

The-United States has suf-

particularly

embarrassing

disillusionment from its-"pay-asyou-go
goodwill overtures to Naftionalist China, Egypt and Saudi

/;/yrabia.,

•

Whither
v

Trade

,

«

our

Agreements.

<•

J.

J /-vl 1

I*

—.

aid dollars have

Aa «

Societies to be held in Los An-

the

S. A

War encounters anyway. Has
•

-

—'

—

—

-

v

v

^

^

Hi.Leve,

,

states should convince

that

us

subversion and

Dated

to

thwart

the

mestic

initially
Am

i

,

r v

industries

and

...

T-,

up,

authority to reduce

potent

is sheer

The

UilirwrtiiAM

Unon

of

ali

t

may

be obtained in

t

,

Qur

The

maae
made

cnpirtdincT

spending, nripr.i-

elected

xV

1

V

-

^

of

i

n

Granbcry, Marachc & Co.

-^JfSuLike
f' .C1?de rubber,
ucts- vxrhiV^f.^a
!? i.aIl pi*0daiako orJw w^need but cannot
which hSfr^ Tor ourselves—-and
tin- and

'.fe?

P
ln
Liariff
imnnH?113!!1111?
\ ^
carrv nniv-vSl
^ one~half
thus havfn^ mlli
utl?S'
tariff
bearing on the
total

•

1

•

nnri!

\

Clayton Securities Corporation

Plymouth Bond & Share Corporation

Atwill and Company,

Incorporated

Mason & Lee, Inc.

Mann and Gould

Blair & Co.

f.

.

•.

•

y

SP

determination

.

..




\ ;

T. C. Henderson & Co., Inc*

Burton J. Vincent & Co.

This lanuouncement

is not an

The

offer

to

offering

sell or

a

solicitation of an offer to buy these securities.

made only by the Prospectus.

is

NEW ISSUE

May 7, 1958

■

250,000 Shares

Adams Engineering

»

ir

•

Company, Inc.

Class A Common Stock

P

',vl (Par Value $.10

/

per

',

■.

share)

7!'

; •'

•c.'

Price $4.00 per

.

Harrison is an influential member.
Subsequent to House action it will
proceed to Senator Byrd's Finance

Committee. .
v;
To" conclude our discussion, as
we l>egan, with a penetrating quotation from the Scriptures, Christ
admonished His contemporaries:
"Ye can discern the face of the
sky; but can ye not discern the
signs"of the times?" (Matt. 16:3).
That, I think, sums up the problem
and^the course we must take in
solving IL Congress today, in adversity, must consider carefully,
.

tury

their persuasion for a

and

.'.1

_i«_

tinguished Representative. Burr PJ—^
hnguisnev.
--r—.
rnomher.

*

share

on

is about to be

...

_

i

Security Associates, Inc.

.%

Co., Inc.

Erwin

Johnson & Geisler

representatives in

our foreign -trade new United States
only 16 jobs out of platform.
_

■'

/:

'

••

.

,

in the powerful House Ways
..ays

ensitive^area of
,1;

Mullancy, Wells & Company

Hooker & Fay

Inc.

.

.

convincingly, that the

J. C. Wheat & Co.

Howard, Weil, Labouisse, Fricdriclis and Company

P6^1, "

-iii?
'
■
discern the signs of the times, the
*^1edand
down, this analysis shows, conges of the past quarter cen-

epresents

Piper, Jaff ray & Hopwood

,

g

Thews•

coffee

i ■ ,>

•T "

critical

-

export ^dependent - jobs^ is ~ iridePendent of the tariff issue"
.

of the

may

Durham,N.C.

Watling, Lerchen & Co.

and.-Mearis Committee where dis-

investment,

-

,

accrued interest

State in which this announcement is circulated from such
legally offer the securities in such State.
i

any
as

First Securities Corporation

congress

and other transactions.>--Art*vrdlnfiflv. cme-third
rm.e-third of
■,.3Ctions.,j''AcCS()r)iin£lv

-

;

therefore, make our views known
known

our

wnd GI
fiT
and

Stock

deooonan^wluch

dollars.:Trade.Agreements

n

payable October I and April /

—;

ffnr®e^etQtsad^

Pa"jt job,

gram. That is a

exports. . The
other third, is financed
by
collected abroad through
foreign
aid
tnnncf"
aid,
tourist

Company, Inc.

Cruttcndcn, Podcsta & Co.

rnnf?rp<;;c..

anevvaijdmutuallysat

if

nonsense.

,

two-thirds

short, is t

under a new

.

our

$2,000,000

share until April 1, I960, and at increased prices thereafter.

Underwriters

?
irLp th^ 94
whether to re-embraeei the 24year-old Trade.

;
For one thing, we know that
-imports furnish payment for only

issue

Prospectus

Isn't it sensible to build

TbJs>

.

"

per

rather than undercut,
our do;

aYails

this

argument

May' 7,1958

1'

maturity, unless previously redeemed, into Class A Common

$4.00

4;

more

workers

mestic mobilization base in

making

could lose their jobs if all
tariffs were removed. With mila,

'

;

:

formula to balance the interest of
vulnerable domestic producers
...nu

000,

•

solicitation;of an offer to buy these securities.

or a

offering.is made only by theiProspedits.

Price 100% and

Wouldn t it make more sense,,to
adopt a selective, flexible tariif

Ad-

tariffs still further.
They claim
that only a
handful, perhaps 100,-

half

offer to sell

an

|

pannmmA„^j

World through tiuly
two-way tracle

be

troit Avenue.

ha7?

Flex.ble Tariffs Recommended

Agreements Act is that 41/2 million
American jobs depend on
granting

true,' but it

wood Secunt.es Corp., 14714 Dc-

Ex-

,

oi

-

succeed

for five

behalf of the Trade

free

at

i.l-'-.i

ask

struggling for survival. This experience of the past will harry
our future unless we improve the
system forthwith.

our

-

r '

C""Sendnre

LAKEWOOD, Ohio-Theodore

R. Newell, Jr. » now with take--

Communist
we

°^,.s times, while cont
?_florts to strength

vate

change.

.(Special

,

Co.,,.

Stock

Midwest

the

of

bors

expect to

Perhaps the strongest, yet most

would,

_

With Lakewood Sees.

years?

—A!

work,

Exchange

Due April /, 1968

Convertible prior to

cbhtiff-:.kL£i;..t'.V,

Foreign Trade Employment

of

Stiver &

Saunders,

iUa
nf fnvpicrn manuwith the un'ehhc
wishes of
foreign manu¬

already out

"

.

April /, 1958

infiltration.'

Americans would do Well to

facturers?

-

of

Interest

themselves: If 24 years of
ual tariff cutting, and more than

mandates.

lions

w

6V2% Convertible Sinking Fund Debentures

terest, Soviet hucksters will buy
w[th little regard for price, sell
with less regard for cost, and swap
with no regard for gain other than

ministration of the Trade Agreements Act
sidesteps both of these

the President

v.

........

Guy R,

-

Terminal Tower Building, mem-

Adams Engineering

no

tinkering will disCOurage the Communists from buy-

with

on

—

c

..

am0unt of tariff

and that treaties
other
nations are subject to ratification

the rounds

^

Kemperjk
Co., 12DWest Hight
members of the Midwest

Stock

McLaughlin has been added to the

doubled ir}.the last six >ears and
new neS°tiations are now undef

cifically states that Congress shall
regulate the nation's foreign com-

now

-rr

.

way.
The record of totalitarian slave-

Prosident to reduce our tariffs an:l
enter into trade
agreements. Our
Constitution, the charter of our
democratic self-government, spe-

argument

lxma,Ohio—William K.Hughes
associated with/John

Street,

(special to the financial chronicle

f/,

NEW ISSUE

•

misleading,

A.

;y :r .:

r

CLEVELAND Ohio

The

Obviously that course cannot
succeed. We can only
hope to keep foreign governments
byt extending the Trade Agreeand foreign industries smiling in
vinents Act of 1934 for the 11th
our general direction.
If we are
j time,
and for five more years.
willing to settle for that vanity,
i This is the
proposal which many we must be prepared to see more
American Industries are
bitterly and more foreign products crowdprotesting.
Most of the contro- ing their way into the American
versy centers on the power of the
market, and more and more do-

by two-thirds of the Senate.

Capitan

a

JTX*

Saunders, Stiver Adds

This announcement is not

.

,<<L 4.

bought

expeeted, we are
tola we can gird up the solidarity
•and strength, of; the Free World

merce

E1

ca

some

things that have eluded us in the
Past- ^ sPlte of repeated Amencaii Protests,-our allies are more
an .m^re embracing Iron Curtain
^ar,K ?*• iils
as almost
.

1

-staff

guests of the railroad,

^ult transformation taken place,
wlU now be able * obt^n'
^^hantsm the

.

-Vv

-

specia, Belt Railway tour on

^"^oiTtlie shor^en^ofmost'coid'-as

faded

^ban

.

'

•

-«

Tariff for dinner is $6.50.

at 6:30.
•-

.

has become
beco

*

.

.A^lygU-

ever s'nce World War II, so that

While, oil the one hand, we are
challenge, how can
learning' from costly experience
with the same tactics
that

room of the Union League. Cmp at
5:30 p.m.v Dinner will be served
■

•

CHICAGO, 111.—The Investment
Analysts Society of Chicago ••will

right and left

10 years of costly foreign aid>

Aerreenieiits^

ruM

*

V"fv.
:

'

V'The

^

'

: v:4

v;
1

Underwriters

"

'

'i.u.••

'.r.'

.

M.*;

•

r.

l

'

*>

.

•

4

' A

;

f.

("

j*

,s

as

may

legally offer the securities in such.State*

i

Criittenden, Podesta & Co,
' '

•

L

....

'

,

'

*

* ■

-

'

.

'

41<

.

,

First Securities Corporation
Durham,+N.C.

Howard^ Weil, Labouisse, Fricdrichs and Company

Watling, Lerchen & Co.

A. M. Law & Company

*

'• J

Hooker & Fay
i..:*

Granbery, Marache & Co. -

'•'*

"'iXf'!.

'

"

-

Piper, Jaffray & Hopwood t;

Erwin & Co., Inc.

.

....

.

!

,f. P**'
.

,

--

;

;

.'i.'i-v

Air

fa ***** »
/:

1v

^

(Special to The Financial Chronicle)

political motivation is their in-

a

majority_ willingness to join the

fight.

*

••

Austria, Norway,
jng what they want, whenever and
Belgium, Italy, France, West Gerwherever they can find it. As long
many, and Brazil. Only Australia
as
and

*

'

With John A. Kemper

w-u

til ilmnnr

:

A cocktail

is planned for 1:15 p.m.

•party will be held in the Costal

:!; D6110
SIS 91
D6 IIOSV?
<11 UlllllOl"
Ullinei ..J

geles

fhrtakLg tariffs

own

Peace

Carrierswe^re like'yto"ose

and'

inally for their

Tenuous Tie With

,

Perhaps the next most popular be hosts to Eastern analysts passclaim in suPPOI>t °f continued tar- ing ihrough Chicago
way
"£
is that unless we take

thev

sharnlv

the

with

akt

where

contrasts

:

Aaiftllietc III1

\ylHvǤll finalpMVlU

blandly disclaims

respon- would be affected only if a steep
vakpH ?*n •
sihility "for these stalled^"coni-""tariff JNroii'
wall were to wbe- raised,ra
mercial transactions," since it pur-". step which no one is proposing.
:
,

13

(2069)

R. F. Campeau Company

Hudson White & Company

D. B. Fisher Company

Plymouth Bond & Share Corporation

Blair & Co.
Incorporated

Johnson & Geisler

Stradcr and Company, Inc.

V k I

foreign trade
.'.J

v'

The Commercial and Financial Chronicle

14

Short and Long Look
Government Expenditures

Taking

.end.

a

At

events!

of

course

provide the public
the/. public;, services
needed to support growth. So long
per,

must

we

.

Thursday, May

.

It is,

national security requirements
remain high, increases in other
casionally happens. So one cannot areas to meet the needs of our
rule out the possibility that the growing population will ppse real
downtrend might begin to cumu-. problems.
late. To my mind the next month;.
In making these points I do not

Vice-President, Chase Manhattan Bank
New York City

as

short and long

Chase Manhattan's economist previews

spending and reviews recent economic trend's hr

ernment

but

run gov¬

order

Dh Butler believes substantial
deficit financing is in prospect for last half of 1958 and should
stimulate the economy, and that business activity now is bot¬
toming out. Advises against a tax cut unless present downturn
does not, after all, reverse itself in next month or two. Finds
we have fallen short in civHiau government spending needed
to support economic growth.
..

X

to

try

first

is

propose

things.

The

appraisal

my

outlook

for

to

do
set

to

-

...

..DALLAS,

the

-

early; signs, first of the level-ttn scrutinike most carefully exist-

;

see
;

some

set

immediate
wise.

the decline in GNP v

linger

■

signs

however,

If,

■'

uh- i

®^

should 1 Soyei nment.

.

appear in the next month • or :two
that the downturn is beginning to
-

,

elticiency f in - -

g

.

Meantime, we nxust seize every

I

°PP°Xtumty

i growth

to

of
the
nf t.hp

the

encouiage

private
nnvato

James

economy.ppoi

Walker

Davis

a' «r

three-fourths the decline
from peak to

in,GNPrecessions
future,

of

has already declined'by a rate

«

decline.
■

.

,

T>

.

'

-

•1

•

..

public support for)the

T

„

was

i

ctroTOvw

imrlimn

TA'

"Fl-v/-*

formerly President

years,

;i{;d

major

v

i^us, we; should Teform our tax

'

Island Lighting
Offering Underwritten

toc^ne?^FISCAL

federal

POLICY

IN

RECESSIONS

rt

| that?.; hoi
which-

Island; Lighting Co. on'4
May:2 issued to.the holders
common stock rights tdv subscribe: 4

THREE

1

at

••"v/.r;.. M?

$22.25

I symptom
the

do

Ito t h

portance- to- the

back-

-

*.

-

t
.

.

...

..

.

.

flams Heads Groun
t

t

,

t,.w

t«.«.r\

>

•

I

Surplus or

45-.l

,

government
step is to review
and services
recent economic trends as a pre¬

$4(1.8

v

Thus

4(i.5

.v

.

Deficit..-

It

" $35.1

4:4.3*

-10.0

+ 3.0

clear that we

seems

the

annual

will

rate

biillion.
deficit

first

run

of

half

of

,.

to

.

lf

the tirst halt

and

consumer

"Third

business

purchasing power at a
$10 billion rate in the second half,
there

is

.

What is the economic impact of

the shift to deficit spending now
ih prospect likely to be? First, I
think it is

)int out
important to point
that it is small in relation to the
total
economy.
.
The
projected

awing
,

gross

from

surplus

to
deficit
3%
of last year's
national product. Interest>

works

,

out

—

;

1.7

to

1957

Economic

fields ?•

to

1953-54

take

such

place,

as

Trends

swing

both

business

m

$5 billion of the increase coming
at

the
Federal
level.
Housing
might rise a bit. IF such trends
developed in these key areas, it is
i

.

...

..

.

unlikely that consumption would
the

Such

year.

duce

then amounted to 2% of the
-

mented.

be

yet

We

in
in

are

But it

which
may

is

trends

firmly

in

be

the

chnrt
.

T

,

the

see

Bottomi

Q




fr^nric

business

curve

out, and that

is

now

we

bottom-

shall

see

a

.

-

-

,

™Lpi'3,vat+
fuw dlvlslon of the
1958
Greater

u r

o w n

time.It is

I wise tru(

capital

e:

ditures

o

roads ha\
in the

as

Iportant

s
tl

But

I struetura
has

beco

United
year

New

York.'

Fund:

1

bus:

mil*

OTrnrrc

in

nr n ni*

we

our

wish

to

i

a

Fallen Short

in

Carlisle and Jacquelin,

In

recent

vears

since+veariy

r;--30 cents
1957. A
cents

we

i_

!■-_

•

b,

are

in h

co-

018,000,

portion of Long;,

section of Queens,,

after

equal
■

•

preferred

f

**-"

-

-

a

Of Merrill Ljnch
exhibit
of
the
——

American
——

lie
as

LOS

annual

ANGELES,x Calif.
Field

Day

of

vThd

-

the

?-

Bond
.

Lyuch. Pierce Fenner & Smith, Leo
Crowell,
Weedon & Co. repo
B. Babich, of Hill, Richards &
Co; has been

appointed Field

Dag.

George A. McDowell .• + Chairman, and' is preparing a *u w +
education, but we have '
W v
day of activities and. entertain*,
George A. McDowell^- of Dei
fallen short of it in other fields of
ment for r Bond
Club
members, /
civilian government endeavor. If troit, a partner in Straus, Blosser
who are expected to turn out is
our
economy is to grow and pros- & McDowell, passed away Apr. 27. record numbers at the June event?.
in

-

,

„

*

we

share.

.

":

hsi:

the 1957 calendar year revenues,.
were $109,862,000 and net incom<
$12,581,000 or $1.44 per commop

by the Greater New York Fund

t
j

drop iirt

having ^total population
l,800,000,v More+than- 78%; o^

'

^-<3^Ce»t^,Termt«a.Vi.

per per/

I creased

Lighting suopUes^
service in Nassau ji
and Suffolk Counties; which
com^^
prise the eastern

the

g'her

Island

sys7 Smelting and Refining Company'-s Club of Los Angeles will be held
^.
.. j metallurgical accomplishments ■ is on June 6 at the Oakmont Country
> on
at the tovesJwpsAM- Club.
'
,Cc"ter ope/ated by Merrill President. Warren. H. C
•

about

job, his i

in the current offering.

,

have

directly

|And

it

chairmen of the Stock Exchange dividends to $1.50 per share op,,
floor brokers group in the private outstanding common: stock. FoK,ti
fi

—

Federal

quartc
product,

a

Walter N. Frank, of Marcus and
revenues is derived from electric
Company; Otto A. Sehreiber,, of service. For the 12- months ender
Mitchel,
Sehreiber,. Watts./ and Feb. 28, 1958 total revenues were'
Company, and Stuart Scott, jr., of $112,341,006 and net income $13,r, ^

,

Spending

I ment out

dividend; of ' 30-

educSional

^ays'ho.spitals> ^at®r suPP}y
*ems and urbap. betterment.
.

volved

of

-

*

^

I force.

Division HI
in rUIIQ
Fund Drive
unvc Vaniarea

77 another examnle 'th^ t
{l^teri^- trend^how^V4V,/ nel t
annum^tacrease in ^fr iitihlic- i.G : '
vStaent
to
vesimen^in, such
sucn ftelds^as
iieias as hieh
nign-r
A
An
u

'

Island and
T>:

rrnnj

cont

ecom

current

Payable May 1+1958 to stockholdr^
ers of record-April 11' will, not be :
paid;
the common
baid. on
on. .thecommon shares m-.f
Lo[)g

Head Floor Brokers

.these rt^nds pose very rear

nt

an

electric and gas

L

,

increasing expenditures

11 •is .my personal opinion that

.

campaign..

ahead, it seems to me

-

_

rv,

v

u

.

Certainly

son

ing

.

ft.

,

kir

t

rnmnari„

x

-

,e

_nrt

-ihvestih^nt^hankeis: group .UV

For example, firms division, of-the 1958 Greater
J*1*3 l°#ng-term trend shows that we New York Fund Campaign,
increased education expendi-*
More than ' 3million people
1
tures per student, about 4% per are served by the 425 hospitals,
^JLn .c9n?tant dollars) since health and welfare agencies helped
1910.

making

to

statement

the

Maitland 1 jams

fuSairy directions.

+i—

companson shows 11131 the

by Dr. Butler before the
gubcomtnittee
on Fiscal
Policy, Joint
Economic
Committee, Washington, D. C.,

.

nilQPV

thf>

.

*A

d

Divideiidrt !on the common stock

y

*

r.•"•'••<quarterly
quarterly

•

viable

a

-

difficult
of

./

the period March 1, 1958 to Dec, 4;
31, 1959 are estimated at $87,000,+^
000 and the company reports that A
some -furthert+fihgincing will be -necessary to, f lilly covert these re- ^
quireme'nt&;

:»vr,if'i

y

-

still too early

c

:

expendi-/1;. '

Pr°blems of ehoice to our society;
sh9rt_ run we can, quite
P10Perly> hold back other Pro~
g^ams t° 8lve priority to the needs
:°1 natlonal security. But if the
efu
eat
? Persist, we must be concerned^ about the ade+
quac,y °f 'our efforts in other nec-^

could

A second way to measure the the statistics the clear evidence oX
Impact of a-shift, to deficit spend- such a leveling, in part because
tog is to compare it with the the lag in statistics behind the
ehange in gross national product, facts.
gc6s

nf Tiact
.

t?

the business

leveling

in

world

^4

but the rate of increase has fallen

docu-

imr«Kort

o

a

security

attainment of
in

v

>f.-''P

substantially reduced. v

.

8

National

;

'

"'

(2) Government expenditures on'

a

as

'

con-!

civilian activities have incl.eaSed-

a

prior decline
•

c

;

lpv

turn-about in the invenproduce
tory sector, leading to a resumption of inventory accumulation by
early 1959.

Pvhio
cycle

'

-

+.

-!Sf

decline, and it could increase later

However, the and trying period of

m
mhv effect
in
taxes nutput into

year's GNP.

ii

did not cannot

expenditures

.

sions, the burden of taxation could
be

Clearly further fe-

ductions lie
ahead
investment
in
new

in

v

V/

political ten^

..J^f series
P^ections
obviously mof assumptions that

a

and taxes were cut.

reduction

(1)

reduction

^ow do present prospects for

,!t

the people,.it
appropriate to use

serve

me

suit of the

the year ahead line up in each of

.

.

tures clearly dominate the picture
—if they could be reduced as a re-;

"1.3

rates.

Projects

__

to

.

Z7.TT CiS

10.5

—

+

quarter

annual

fogly enough, a similar calculation
tor 1948-49 yields a 3.7%
figure, volve
In

society is to

general agree-

Deficit Financing's Impact
)

the period since 1913.
Sincethe purpose of government in ouil

elusions from the data:

plant
and
equipment and in exports—they
ment among economists tliat such might
yield minus pressures of
a shift in government fiscal opera- $6-7 billion. Government
expend!Hons provides one of our impor- tures might rise by as much as-UtR
tent defenses against recessions.
billion in the coming year, .with
II believe

I

Federa

$12,000,000 first mort-

redeem

gage;

for

seems

to

series ,C;3% bonds due Jan. t;
F
1, 1958.*'
^r,,v..^
,
Construction
expenditures for '

-

dollars,-

I would draw the following

first
quarter 1958 in billion, of dollars

..

'

capita basis/

2.5

—

Z

Government

these

per

at long-term trends.

42.8

.

Net Foreign Investment

fiscal operations will siphon cash
out of the economy at an annual
add

—

■_

Inventories-

at

a

measured in constant 1957

-—$1(1.0

Pixetl Investment

a

goods^

of

•

on

the pei capita measure lh looking

Consumption

billion at annual rates is in
prospect. In other words, Federal

will

show

"Change

cash account of perhaps

.

Advisers

GNP

$10

snid

Estimates of the Coun-

f.0o^nn.
cession:

approximately $3

rate of $3 billion in

future

of

following factors .have
operating, in the current re-

been

Federal Gov¬
surplus at an

a

evaluation

an

Economic

of"

this

in the second half

But
on

-

the

year,

ernment

cjj

substantial

a

calendar

to

purchases

next

prospects.

aie.moy-

financing. • Moreover, 'we
are just beginning to feel the economic impact-of this shift to defi
In

the

lude

+ 0.3

deficit

cits.

has rt

to.,

,

$47.3

late

the

.

,

,

e n

prosperit

share t for696,260 d

per

v

premor

Shift iu
J \As<>. " '-Ah * > shares of additional common
inflation
• v
: !v
,
stocky
.1 Federal v
Percent Percent i
(par $10) at the rate; of one share; d
Fiscal
of.Prior;,
of V*
historical paral¬
Long Run Federal Spending
for each 10 shares held of record Fi
Policy
Year's Change in
William F. Butler
lels.
Wards and for¬
My purpose is simply to
on April - 29,
(Billion)
GNP
GNP1958."' The'"subscrip->t
To turn to the longer-term out-;
1948_49
make the point that the shift to
—$9.3.
3.7 'i
110 co
wards over a
.tion offer will expire at 3:30 p.mi'W
look for government expenditures,; 1953-541
+. 4.!)"2
"75
Actually, I con- deficit spending now in prospect
6pan of years,
r (EDT) on May 15,; 1958, The offl
I should Tfkte* to mtroduce somel
i^s^irst Halfeider the second task to be the is of -the same- general order of
3- t;
-/!v si i fering is being' underwritten by a iff
concepts s&ad supporting statistics'
Second-Halt —13.0
more challenging one.
magnitude as the fiscal policy
"Tax- cut* .of $7.4 billion
as
percent • of group of investment, firms man-*rt
which may help provide needed
prior year's GNp ami change..in gnp. However, let us turn first to the measures adopted in the two preaged jointly by Blyth & Co., Inc.^.6
,haH
outlook for the immediate future vious, recessions.
This does not■.
s^hient ?re fre i KW
.
,
: +,
' The First Boston Corp. and W. C.+f
—say through mid-1959. As a first necessarily prove that the current ?
subject aie lie-^
quently misleading because of a;
' • Laiu!ic.v & c°atep I'll set forth the projections of recession will prove as moderate failure
+
The net proceeds to the com-»..;
to take the following three5
Federal receipts and expenditures and short-lived as the previous
Eflr
factors into account: (1)
firPAfAr HI
NY Flinil
pany from the sale of-the addict
rw uredici
inflation;]
runa
I: have been using in trying to two.
fional
common stock and from aL
.(2) the growth in our population;?
assess the'business outlook; "
*
Whether government should
Maitland T. I jams, of. the syn- scheduled sale of $20,000,000 first-V
and (3) the huge increase in na¬
t„r,n
Jan.-June July-Dec. Jan.-June
take
more
vigorous action this tional
dicate department of W. ,C. Lang- mortgage bonds will be used fou't
security
expenditures.
I:
195B
1958
1959
time depends on what.is likely, to
construction of utility ..plant andhave prepared a chart illustrating(Billion's of Dollars)
A to
happen in the private economy.
pay short-term bank loans Used?!

attach undue im¬

wish to

not

1$y looking

can

years aft
is
also

■

Long;

„

use,

eline

osL

af

1921

the

•t'WVUAAiiivi./Mn+n

^^BJ'stoulll^lSil' Long
Shfi^evemment Sim S

of fiscalp
combat recession andt

policies to

He

Davis & Company.■'

01, increasing OUL. rate, of
securing i&fcdwtlu

and about the problem of

• •

making these comparisons, I '

In

inflations

and*

have much to learn about thefE
nnnmnnab timing nf faY n^tinn i

«

'

J achieve a substantial
ln theprivate economy,-

with]
in thet£, ^

successfully

must-learn to cut taxes

we

mnesg

we

prospect for the remaind*"" of
the year is about equal to that

per-

if'

inflationary pressdre./Fet I

in

tive on
go veminent
e x penditures

—

when demand sags and to increasej.
them when the economy : is under j

GNP

$16 billion or 4%. However, the
shift in Federal fiscal operations

t

^eSLi

i0

are

we

trough.

the. current recession,

In

p e c

Receipts 1.%
EKpenditures

tryi

In

[that .this

I

a

I.
.

£5?!

inttieyearsi

phistication in these matters

.

aboid

to

amounted

cut

.

„

„

providing h
h

be1"'*? -f" be achieved. Tl'u.

toimaS"ltude of necessary; governtogov-!,1"enl ■expenditures in the period

would+be

cut

tax

\

econo-

ahead, it is my judgment:.that an

„

tax

the

for

s> o m e w

where

see

'•

-

|by simila

myself is that
of

to

likely

are

further increases

eminent expenditures

'

have

programs

{>■>?i'

J

Government

Federal

task

belief, and;

we

Ving

■

Ision^we

receipts
and
e x penditures
qnd their impact on the
economy. The
second

of this

Because

*

Tex.—James Walker'

;

v

any

I

".cause I believe

..

in relation to

wish to imply that I- support

!

impact of fiscal policy was laige

two
forth

period—

ing and later of the upturn. U

3ff/;

immediate

the

of

•

......

test

the

relume l

Davls has a nounced the„ opening

confidently expect : that in; and all government expenditures.
this period we will begin to seel. On the contrary, I believe we need

evaluate future prospects.

to-

be

will

two

19gg

.

•

or

8

James W. Davis Forms
Davis Securities Co,

assets, and

,

however, part of the law of probabilities that the improbable oc-

BETLER*

By DR. WILLIAM F.

view this is the most

In my

probable

year's

before

advance

renewed

e

.

(2070)

f
Number 5740 ...The Commercial

Volume 187

(2071)

and Financial Chronicle

give

Treating This Recession

"H'Ct*

By J. A. LIVINGSTON*
'

Column, "Business Outlook"
Author of "American
Stockholder";

would

some

trus-

with

union, and so help all
The government should

the

consumers.
use

all

its

of persuasion

powers

during the Korean War, Walter
Reuther, arguing that long-term
:•
wage contracts ought to be "living
documents," managed to get a

Finally, the Consumers Price
Index ought to get an overhaul.
The last major revision was in
1951-52—more than six years ago.

-

scheduled spending to "act as a holding force and
gradually start an upturn." Mr. Livingston suggests during

well

prices. This would be poetic retvoluntarily reopened a wage con- ribution for its part in the steel
tract with Philip Murray when wage negotiations of 1952.
wages of steel workers fell behind
■;
the wages of other workers. Later, Overhaul Consumers Price Index

to government

pects

the

to
be

to bring about an adjustment in
the steel wage contract and steel

.

spending's new role as an economic stabilizer, in differentiat¬
ing today's
economic conditions with those of 1929, and ex¬
4

It

teeship, some fiduciary responsibility, to the public now.
rIn 1948, the steel companies

*:

of Syndicated

Nationally known financial writer calls attention

consideration

needs."

for McDonald to show

\

"Bulletin"

Financial Editor of Philadelphia

Writer

'

.

full

others

™a"

this recession

period such "house cleaning" tasks as: (1) cost
reduction, and realism in auto and steel wage bar¬
gaining; (2) overhauling consumer price index and raising
Federal debt limit; and (3) using tax cut as a last resort.

his

and price

the

with

contract

auto

com

2rWtiBSX«

;■into marketing.

panies.

Bureau of Labor

This is a period which calls for statisticians
and economists are
"living documents" — wage and aware of these influences but canprice restraint. A wage boost will not always make suitable adjust-

tenance of TV sets, automobiles,
They've become more complex. A
mechanic who deals with a power
transmission has to be more highly skilled than one who deals with
an ordinary shift. He gets a higher
price per hour — deservedly. So
repair costs go up. 'Why? Because
of more complex service—and not
entirely because of higher prices,
/

The market basket has changed.

We

,

eat

TV-pre-cooked

example,
and

by
that

improve.

after

years

major-:

from meat to fish
rise.

1929

the

cline

should

de¬

,

why

taxes,

ple consume now, not what they
consumed

is' also

pay

wanting work and not finding
I, personally,v went; through
during the Great
Depression. A jobless man loses

late

that experience

in

^;+u

lie's

has ;turned

time.It is like¬

climb

capital

,.

of .corporations and

roads have started to

rail¬

decline, even

..

under
the last

has been due to a builtUpward bias in the BLS index.

five years
in

WorkersPhav^benefftedQ from*

rw PrW Rediiotinn
product, a cleaner product. She
(2) Extend unemployment com,
can shop more quickly and spends pensation payments.
'
? *s a.Per.10d
C0SLr,e<rvlJC~ less time in the kitchen. She gets
(3) Use the government's powers
jor pnce reauction. Mr. lvic- built-in maid service. Does the 0f persuasion to modify the forth-

Donald

_•«

if

can't

be

expected,

unemployment to

permit
much

higher,

or

to last for

.

Meanwhile,

ought to

we

for what

recession

use

recessions

Jhone billjS ,be"er servicef and

the
are

for—house cleaning.

capacity. They can afford to make how much the higher price
a
contribution to recovery along ing, Or take the repair and
,

adjust to changed conditions.
SllO

a

Lai Ktieuioef

ftia

}

biilion

a-

ISnminSv wit ^ ^
Federal, state, and local governoutlays constitute more than
of

the

nri

directly

:

main- resort.

use it as a last

..

,

C-:

7,000,000 Shares
(amount currently being registered)

ihjnstWeQ

ntwer

.

of liv- Federal deficit, I'd

PROPOSED NEW ISSUE

fnfdsewhmlTnavTave
fninh« Tn

reserve a tax cut.
required to prop pur¬
chasing power, but in view of the
prospective large increase in the
It may be

to,find jobs in other industries as
result of this changing market.

-

a
derives his

indirectly

or

nntinml

Prn«

This is hard on

cars.

ruce
(5) maex*
Hold in

The

people are not interested in
chrome, and size, and funetionless
in

(4) Re-examine the Consumer

price index

1
„.

.

au^° workers, 011: steel workers,

ment

nuarter

..

automobile industry is finding out
design

^

force

coming rise in steel wages.

r

,

States

the index adequately

c™si,delTatio" lbe. im"
quality? Long -distance

^ego part of the forthcoming in- telephone service has been speeded
crease
steel companies cut Up by inter-city dialing. How
prices. 1:1. ■
much of the increase in the tele-

I'm not sugas in the late '20s.
Those are im¬
ges.tmg hairshirtism for hairshirtportant similarities. V.
ism's 5sake. Recessions
have
a
But
there vis
a
fundamental funCtibiT
They ' force people to

United

urn-.'^
food part of

f^elrot Wah^ofts^BufL could take
We burden 01 high costs. But he could proved

long time.

a

t

J" A"

:

expen-

ditures

||,

«

TT.

himself..

with the social order.

cannot

wise true that

ink

+

Anri +k
And
the

m

^

y

proportion, will be even
higher this year, because of*in-'
creased government outlays and a
drop in private outlays. \
.

Some defers may.have to go out
of business. The recession forces
adjustments, some of which are

'iallv
^In ™
a

'

necessarv

y*

'

.

The One William Street

Capital Stock

-

recession, business men are

forced

to

down

cut

on

Fund, Inc.

'

extrava¬

*

(Par Value $1)

and waste. Labor leaders
had been operating on the

:

gances

Boost from Federal Spending

-

Federal expenditures are sched¬
uled to rise from $73 billion in
the

fiscal

current

to

year

billjon^^ in the 1959 fiscal
increase

$77.8

year,

an

of

just under $5 billion,
Receipts, on the other hand, are
expected to fall from $70.3 billion
to $67.8 billion.- So, from a $2.6

who

theory that the marketplace would
justify all of their demands for
higher wages discover that , the
,
,

wages.

we can

sav

is that the rate of de-

unreasonable

BuUtTs

think

to

not

total

that

These contracts constitute

trouble.

expenditures for defense, for publie works, and for housing will act ~

holding force and gradually
start an upturn.
>
.
•
V
a

•

.

.

Wants Debt Limit Raised
If this

rate

achieved,

it

of

outlays is to

would

be

be
for

wise

Congress to raise the debt limit.
would

be

fiscal

inexcusable

oversight to permit a ceiling
debt to repress anti-recession
tivities.

We

could have

a

on
ac¬

repeti¬

tion of what happened last

year.

As; the

Treasury approached its
debt limit,, defense payments to
contractors were held up, con-

.

stMVi

Tlliv

.

2'

built—in

also built-in

They're

inflation.

,

,,

7

sl;eel negotiations ot 1956,
the" Federal Government mter-

vened to stop a strike. The. result,
so it has been said, was that the

It

ers.

an

was

United

The

America

has

election
Steel
a

of
which

contract

and fringe benefits
raise wage costs in

calls for wage

will

which

July

an

estimated

20

hour. This will squeeze
or

add

nies.

to

losses

It will

of

cents

,

about

offered to the public commencing on or

May 14, 1958, through a group

of underwriters, headed

by the undersigned.

relating to these securities has
filed with the Securities and Exchange Commission but
become effective. These securities may not be sold nor
may offers be accepted prior to the time the registration statement
becomes effective. This advertisement shall not constitute an offer t*
sell or the solicitation of an offer to buy nor shall there be any sale
A registration statement

been

has not yet

of these securities in any State in which such offer, solicitation
or sale would be unlawful prior to registration or quail*
-

fication under the securities

laws of any such State.

A copy of the Preliminary Prospectus may
local broker or dealer or by writing

be obtained from your
the undersigned.

an

compa¬

tempt the companies

of

the

United

Steel

$285,000,000,000.

Workers,

fl»rSfa£ement. by Mr*Livi,n£st?n before —the "mutual trusteeship" of lafciatUE^Zic Committee, wZshi^gt'o^.' bor leaders "tad corporate execuc., April 29, 1958^
' c":
tives in which
everyone must




capital invested.

These shares will be

the profits

steel

has said that his union
has something new to offer society

o.

on

possible growth of capital and also current return

year.

President

say,

offered, emphasising, in its selection

of investments,

Workers

lovel of $280,000,000,000'to at least

might

open-end investment company upon

steel companies granted a lucious
contract to the United Steel Work¬

touting to the downturn then to try to raise prices. This wage
deVeloping. I recommend a rise in increase comes at a most inop¬
the debt limit from the current portune time. David J. McDonald,
(I

The Fund will become an

delivery of the shares being

.

Negotiations

.

less than 2,000 shares)

Walter

what

That s

^

(in single transactions involving

Reuther,

-

m$uSSd?

Offering Price $12.50 Per Share

,

marketplace is not a perpetual
support' lor higher and higher

ot the ; United Auto
Workers, is up against in his curbillion deficit in the-1958-fiscal rent negotiations with the auto
year, we will go up to a $10 billion companies. The UAW officers are
deficit.
Actucd
Federal
outlays cutting their own pay.
might rise from a current monthly
the prosperity boom, business
rate of $73 billion a year to $77V2 men and even the Federal Govbillion by December, and $79 bil- eminent were .willing to pay any
lion by June, 1959. That's a strong price for labor peace.*' Charles E.
uptow.
Wilson introduced cost-of-living,

It

in

o~ tor out such improvements from dex would improve the yardstick,
hifhei puces; for priee. Simiiarly, in supermarkets,
To sum UP( ! have these recom-

good.'.TJe becomes discon-

no

tented

this

...Li
He wonders

u:

in

faith

'20s,

down

;.

it.

of

end

prosperity

3s

ago.

the U. S. debt ceiling.
as

monitory
- o f

the

a

contracts

true

symptom

:

six years

Part of the rise in wages

vLv h?oh L

in

that,, housing,
which was a

the

In autos, we

meat prices

after. It

years

pre

provide,

^UtSi0n
f°r arL increase
the debt?)

11

came

of
to
have auto-

the quality
product tends

as

We need to know what peo¬

workers who are drawing unem- matic transmissions, power brakes,
not; that be interpreted as ployment benefits; it won t help hillholders. The BLS tries to fac- hidden uptrend. An improved in-

spondingly

a

war;

of

dinners.

Six years ago said dinners didn't
" { Vp Tavp shifted nerharwL

escalation

sion

15

Lehman Brothers
One William Street
New York 4,

N. Y.

16

The Commercial and Financial Chronicle

(2072)

undervalued

an

one

*

.

.

.

Thursday^ May 8, 1958

a

on

times-earnings basis alone.

THE MARKET... AND YOU

#

;

By WALLACE STREETE

Also

" ~

-fi

,

on housing
lift is Flintkote which

counting

for

a

uas

also shown superior abil¬

By JOHN BUTTON

Study Your Market
ity to get along nicely while
United Aircraft housing was in a decline. Its
In every well organized
sales and establish friendly,.relationeconomy were at rather op¬ were a score or more points
earnings for the last half department of every industrial or ships with the trust departments
posite poles this week, the in¬ below last year's best.
dozen years have held around manufacturing organization, mar- of your leading banks, your top
ket studies are carefully under- law firms, and. those engaged in
dustrial average standing at
si:
sis
sj:
$3.50 with remarkable stabil¬ taken and the results are the basis practicing tax accounting.
See
the highest level seen in seven
It would seem to add up to ity. The high was $3.88, the for the sales objectives and meth- that these contacts are made and
months.
Even
the r railroad
the fact that selective markets low $3.40, which amply cov¬ ods for obtaining consumer ac- where possible continued until
average was at. a peak for are
This business is obtained. Some of these
the
$2.40 dividend re¬ ceptance of the product.
around to stay in this era ers
more than half a
technique has become standard efforts will fail because there are
year while when
professional
activities quirement and- hints at sus¬ policy in all successful merchan- continuing relations of long standthe overall economy^ apart
loom so large in the ■ daily tained earnings for this'year dising operations conducted by ing between investment firms and
from high hopes for a secondlarge organizations engaged in of- these
individuals
who
control
again.
trading.
^
quarter v rebound, was. still ;1
fering both intangible, and tangi- business.
But there are always
Jjc '
if
if
The stock market and the
year and

'

'

reeling

earnings and

on sorry

dividend

news.

.*

'

•
,

As

•;

--.v..

•

far

business

as

.

,V;t

•;

Distiller Beneficiaries

,

results-

In the

distilling section the
are
concerned, the best lines
perennial hope when Congress
profitwise have been the can, is in session is
Schenley which
The strong market perform¬ meat
packing, natural gas, has been
fighting steadily,
ance didn't generate
anything: aircraft,: stores, vegetable oiland so far hopelessly, to get
even
approaching fears of a soap lines, textiles, food prod¬
an amendment to the law that
-

.

runaway bull market since ucts, soft drinks and elec¬
the major indices are in an, tronics.
The softer spots have
area of
heavy congestion. But' been steels and autos, as is
its strength was "near-mirac¬
well known, plus
rubber, copulous in view of the business
p e r,
chemical,
machinery,

background which is not ex¬
actly a new story but was
only made more convincing in
the push to new highs for the
year.
s<:

aluminum and coal lines.
if

There
far

as

si:

was

a

whether
be

or

not it is about to

withdrawn

as

only strength which
prominence the
utility, drug, tobaccos,. etc.
The opposing school
favoring

it

is

followed

care-

securities.

•

Every insurance company which
has its headquarters in your state
has

been

registered

with

your

■

Schenley is about the real
target for this law since its
stocks of aging whisky are
very large. The present pro¬
posal is that the storage peri¬
od be extended to 20 years to

new

and
very

of

offices

home

is

available

opportunities and a careful
complete canvass of these
lucrative? prospects can be

rewarding. The trouble with many
salesmen is that they give up be-

fore they try. If you have a superior
service,
or
some
very
worthwhile securities to offer, the
is

door

often

ready

to

open

for

Hut you must expose yourself 4° business it you want to
develop some of these accounts,

you.

Make

state insurance commissioner. The

someone

responsible

checking the daily

papers.

for

Sales

Write for the statecompanies after
you have procured this list. Study
them for possible clues to their

of real estate are often one source
of good investment prospects. I
can also attest to the quality of
leads you will obtain if you f'ol-

investment

low the larger sales of real estate
and contact the salesman who

him.

ments of all these
jj!

disposition

if

securities

fully.
Here are some areas of
prospecting that should be investigated by organizations engaged in
the retailing of general market

storage through

for sale.

the market is concerned

and products.
This
procedure will uncover subprospects for investment

services,

stantial

list

from

si:

to follow

c|c

requires payment of the ex¬
cise tax on bonded whisky
after eight years' storage

ble

same

capacity, and the type

of securities they buy.

made the trade. Often these successful real estate men diversify
banking. National banks with the their
investments by acquiring
Comptroller of the Currency. Lists common stocks, bonds, and mutual
are obtainable from them.
Study funds. Watch for the man who
lines where the unfavorable ease the demands on distiller's
their portfolios and select those made the sale, he often has a subnews is
cash
made
mostly over and the
by the present institutions that are buying bonds, stantial commission check to missues well
depressed, was period. There isn't much more Bonds have come back into favor vestFollow-Up Leads
hunting among the paper, reason to expect favorable ac¬ with the banks as business loans
have declined.
Keep up with your advertis¬
tion
this
building supplies, distillers,
year than there was
Check all bank directors and as- ing, see that your leads are foltextiles and oils.
in previous, unsuccessful at¬
sign them to your sales organiza- lowed. In my office we invested
mism in these areas was a
tempts unless the general de¬ tion. Also, directors of savings a considerable amount in a rather
Building Activity
mand for tax relief to help and loan associations. These men lai'8'o advertisement six months
slight pickup in steel opera¬
are
often
substantial
investors. aS°It produced some small acExpectations
ease the recession turns more
tions but the mills were
only
When you compile this list you counts that paid for the advertisMuch was made in some
specifically to the excise will be surprised at the ifumber ln§ but one account came to life
running at half capacity at
quarters of the prospects for levies.
best.
r
of individuals who are known to about
six months later that, if
*
Sfe
*
much more
members of your organization, or developed properly, will pay for
activity in the
Increased Selectivity
to
your partners.
The demand generally for
This can open that expenditure many times over,
home-building sphere this
doors for your representatives.
All effort in the right direction is
The new peaks for the aver¬ year. This makes the pros¬ containers has held
up well,
cumulative and it is chain deages were a bit of statistical pects bright for the companies buoying some of the issues in¬
"Always New Opportunities"
veloping. You meet John Doe and
Check up the estates that are through him you do business with
juggling since so many of the allied with building activities volved importantly. Thatcher
components, particularly the although in the case of Glass, a major factor in the of long standing in your commu- Joe-Doe, who introduces you to
Smith. Direction of effort
chemicals, aren't in any posi¬ Georgia Pacific Corp. in the milk bottle field, was able to nity, follow probate court records, Pete
into the channels that will protion to even begin
show
a
plywood
group
the
lag in
tackling
good improvement in ness, into which it had entered duce! volume is the smart way to
their peaks of 1957 and 1956. housing starts didn't hurt its
earnings in the first quarter, in 1955 for diversification, increase your production. A sound
The same holds true for the business to any great extent.
making it popular as an anti¬ finally stopped contributing
uhe?p ay^s °0 Lake the
motors. A good part of the
recession item. The market
*.
*
*
only red ink to the parent contacts that will produce more
action has
been highly re¬
strength was due to a handful
In
fact,
company.
The frozen food business.
Georgia Pacific
of components
including showed a 32 % increase in strained, the issue finally business was embroiled in a
Investment Community's
American Can, American To¬
sales in 1956 and
Responsibility
nearly 22% breaking out of a range of a bitter, competitive battle for
mere
half dozen points this two
bacco, Corn Products, General more last
years but in the final
When you hear the statement
year—the two years
that we are going to have a great
week to join other issues
Foods, Sears Roebuck and when
post¬ quarter the Morton division
housing was definitely
mar^e^ jn f^g next few years
er
Procter
&
Gamble
which in a
downtrend. For this year ing new highs. Its above-5 /O was finally able to turn in a because of the inflationary forces
were the blue
chips that were the projection is for still more return is also above-average. profit to Continental and which are being built up in our
exceeding last year's peaks to improvement even without It all adds up to good expecta¬
prospects are that this situa- economy this may be so. I dont
give the industrial average the
tions for record results this t
+
,ttill
nlco
nrmrnil
+ V,ic
kllOW. But if it IS trUCJ if a
on
w
1
a so
pickup ^n housing activity
prevail th s
dekt
overall strength.
going to be the
year despite the sagging econ¬
year.
cause of some extra prosperity for
being figured in. In all, if the
»!«
*
*
*
*
*
omy elsewhere.
stock buyers, stock salesmen, and
improvement in housing
Aircraft issues are also all;of us in the investment busiChrysler was some three
Foods Continue Favored
starts
materializes, Georgia
dozen points under last
qmnru?
those where
ness' J-for one do not feel happy
among tnose wnere there
there is
is
year's
about
Better we should have
Food shares continued in
high as was Union Carbide could show improvement of
agreement that satisfactory a SOUnd prosperity based upon
good demand, particularly-the profits will continue for some confidence in the future ability
while
Allied Chemical,
du better than a dollar a share
more stable lines.
Among the time. But most issues in the of our people to create more real
Pont, National Steel, Good- which would make the issue
baking issues, Continental group
uroun are well denressed
still wealth than in a flight from the
are weii aepressea still
doUar and all the attendant future
This announcement is not an
Baking was something of a not recovered from the effects
offer to sell or
solicitation of an offer to buy
travail that such a course porany of these securities. The offer is made
only by the Offering Circular.
candidate for a higher divi¬
of J the stretch-outs ordained tends. We in the investment busiNEW ISSUE
dend since last year's
;
Offering
i
payout by the government last year. ness should exert our voices and
2,000,000 Shares
I

The

badly depressed mo¬
tors, particularly Chrysler,
and the equally slow-moving
steel
industry, Lukens and
National Steel standing out
on occasion, were able to
join
in when the market
going was
good. About the only concrete
background to warrant opti¬

has lifted into

All

with

state

your

banks

state

are
registered
commissioner of

—

.

„

"

a

was

Pleasant Valley Oil and
Mining Corporation
Common Stock

par

value 5 Cents

OFFERING PRICE 10 Cents

per

per

covered

over

Share

that

Share

before. It offered

wLi«»mfPaky i>r.op°s®8 ,to .drUI a" exploratory well for oil and/or gas at
S^f i?.!L
be selected by its engineers on some part of its acreage held in
OfLi^r°Uni
Grand county, or Washington county all in the state of Utah.
Circulars contain full information with legal description and engineers'
Dealers" Invited.*
obtained k"0111 the underwriter named below. Qualified

more

than

a

STAUFFER PETROLEUM
CORPORATION




Dep't B

Oklahoma

City, Okla.

than twice LJenaix
"Rendiv

prices

a

5 ¥2%

return of

at

recent

despite the favorable

indications.

renortR

Box 8834

more

by earnings, a situation
also prevailed the
year

"

*

Continental
when

turned

some¬

food

busi-

efforts

our

to help forestall tne

trend

toward

future

for all of

guch

A few years of

disastrous

a

us.

wild speculation,

and
lately has been available be- 4<> times earnings, and the averlnw
low

50
ou

article
time

frozen

Lac
has

twice

for three years sold well
above 60 in 1956 and 1957 but

[The

late last year

whir>h
which

dividend

over

*

a corner

the

its

whprp
wnere

been above

*

thing of

Aviation
Aviation

covered

items
do

not

coincide

vipld

yield

has

has

expressed

stocks

a§es

UP

on

selling at 20, 30

or ei§ht nundrea
.g nonsensical. Good

to six

the Dow

yield
burden should be reduced. This is the
securities should offer

in

necessarily at

this
any

a

fair

of from 5 to 6%, and the tax

with those of the road to prosperity, not wild specuThey are presented lative stock markets built upon
those of the author only.]
the fear of a debased currency.

"Chronicle."
as

its
its

D /o.

with

Number 5740

Volume 187

.

.

The Commercial
and Financial Chronicle

.

(2073)

From

Washington

Ahead

nomic,

City of Oslo, Norway
Registers Bonds With

and

shipping

Phila. Inv. Ass'n to

center.

Annual sinking fund
payments,

commencing in 1963,

SEC for Public Offer

the News

financial

due

1973

will

Hold Annual

the bonds

on

retire

100%

The relations of President Eisen¬

of the

with

hower

the

increasingly
late.

Recently
asked

was

have

press

under

been

discussion

Mr.

of

Eisenhower

at

of his pe¬

one

riodical

con¬

With

a

they

wonder¬

were

ful institutions
in this

country

that

and

he

enjoyed them.
doubt

I

se¬

Carlisle Bar^eron

riously that he

that

said.

In the first place these
ferences have been

con¬

deteriorating

about
It

and

years

is

they

seem

to

now

reached their lowest
depth.
this correspondent's

opinion

that

the

fault

is with

Their

papermen.

the

news¬

question

personalities.
One

number

of

the

to

of

reason,

is

course,

correspondents

Washington

than 200 attend his

the

added

confer¬

every

They have become so large
that they have to be held in the
ence.

old State

Department building.

White House fault is that the

ferences

are

televised.

The

is that every
youngster

ing

to

be

Washington

at

seen

a

just

wants

and

to

the

in

the

news¬

-

the

President

transcripts.

unfinished.

are

his

the

to

print

They show the

at

tences

worst.

place

His

sen¬

as

any

man

does.

The

fact is his transcripts
in such a manner that
expressions have become the

his

up

brunt of jokes.

Parodies

on

are

being circulated. One
into
the
Congressional
several weeks ago.
If Mr. Eisenhower

of

has.

humor

put

Record

really enjoys

these experiences he has
sense

them

was

than

better

a

think

I

he

Yet when he shows irritation

I

can

doesn't

most

come

as

a

and

soon

turn

it

over

fact

is

that

most

of

how

in

how

he

looks

and

asked

my

than

more

really

expressed him¬
example, the frequently
question of whether
he
intends to fight
for
his
%ill.

insists every time that he is.

He
This

in the present

"day babel of Wash¬
ington is supposed to be signifi¬
cant in that it is

supposed to

country's

city.

and Robert Arnold of First
Boston

funds

Corporation is in charge of tennis.

be

transferred

city wall

the

Oslo
to

pletion

of

to

the

advance

the

Electricity Works
the

Hemsil

which

the

City

tional

is

Oslo

152,000

with

addi¬

an

kilowatts

of

in¬

stalled power by the end of 1960.

Oslo
the

Electricity

Works

city with all its electricity
will

be

>•'

eco¬ the

the

sinking

fund

charge of

fraternized

never

Until

he

to

came

with

office

This

announcement

is not

re¬

made

to

bonds

on

New YorK s>tock Exchange.

an

The

SAN

ald

FRANCISCO, Calif. —Er¬
Hale, Don¬
Kenney, James D. Robb,

C. Ayala, Jay F.
H.

David R. St. Johnson and Carl H.

Triplett

are now

with First Sierra

Corporation, 98 Post Street.

offer to sell

or a

solicitation of

Edwards & Hanley Branch
Edwards &. Hanly iiave opened
branch office at 25 Broad Street,

New York

City,.under the direc¬

tion of Gordon Evans.

offer to buy these securities.

an

(Canada)

invited to White House receptions
the diplomats, the justices of

Supreme
Congress and

always

Court,
so

members

forth.

attended

tional

Press Club.

chore.

But

It

$10,500,000

of

The Presi¬

about

five

quite

was

1958 Serial Debentures lor Public
Works, due May I, 1959 to 1905
Maturing in

installments of $1,500,000 each, as
follows, bearing the
interest rates and priced to
produce the following respective

seven

Interest

May 1

a

derstandably,

Eisenhower, un¬
has cut out all of
He feels that if he

can't go to them all, he

shouldn't
The President's appear¬
frankly makes the dinners

Price to

Rale

1959

Mr.

these dinners.

following respective

yields:

Interest

Yield*

May 1

Price to

Rate

Yield*

2% %

2.85%

1960

3'/„

3.15

1964

3%

3.75

1961

3'/,

3.35

1965

3%

3.90

1962

3%

3.45

1963

*

3*/,%

3.60%

Accrued interest to be added.

go to any.
ance
a

success.

As

to

why

not

are

the

$21,500,000

correspondents

sandwiched

now

4%% Sinking Fund Debentures for Public
Works, due November 1, 1978

in with

other guests at the diplomatic and
judicial dinners, I don't know.

Mr.

Roosevelt

inaugurated

practice of giving

a

(Accrued interest

'

snobbish

man

Members

he

I have
the

of

the

was

"■

'

•

ever

known.

would

1

and

•

"

'

'

'

"

"

to be

•'

'

.'

•

added)

'

•

,

principal and interest of each issue

in The

a yourig
who
ap¬

wife

i

The Debentures of each issue will be dated

laugh at the discomfort of
newspaperman's

V
;

most

family

'

■

Price 100%

special recep¬

for the
newspapermen.
He
would also have individuals at his
Yet

-

the

tion

dinners.

■'

\

...

■

.;

May 1, 1958

will be payable

City of New York, N. Y. in United States Dollars.

The Prospectus may be obtained in
any State in which this announcement is
circulated
from only such of the undersigned and other
dealers as may

lawfully

,

offer these securities in such State.

Glore, Forgan Adds
(Special io The Financial Chronicle)

the

Co.,

staff

40

of

Wall

Glore,

Street,

Forgan
New

&

Stock

IIalsey, Stuart A Co. Inc.

Savard A Hart

Salomon Pros. A Hutzler

York

City, members of the New York

Hurns Bros. A Denton, Inc.

Gaikrner&CompanyInc*

Exchange.

HornrlowkrA Weeks
<...

Swiss American Corporation

Hell, Gouinlock A

»,
,

With Delafield & Delafield
John

p.' Manuso

has

field,

14 Wall

Street,

',Inc«»ri»orated

Hurniiam

and

Company

Demurs, Adam A Martin
Untiled

.

IIirscii ACo.

i«#*

.

Mills, Spence & Co* Inc.

F.S. Smitiiers A Co.

'*

■

Grkuory A Sons
? f

j

0

Siikarson, Hammill ACp.

,

New York

City, members of the New York
Stock

I

become

associated Vfith Delafield & Dela¬

mean

.Supreme Court packing bill to
Congress or a proposed declara¬

Shields & Company

William G. Maas has been added

to

')

Stroud A Company

Tucker, Anthony A It. L. Day

Incorporated

Exchange.

Courts A Co.

Shelby Cullom Davis A Co.

H. S. Dickson A Company
Incorporated

Joins Courts Staff

H. Hentz A Co.

(Special to The Financial Chronicle)

Johnston, Lemon A- Co.

McDonnell A Co.

a

in

war

I

have

had

difficulty

understanding
just
what
is
by
strong
Presidential

meant




1

Montheal

of

spondents registered in the Con¬
gressional Directory were always

ership.
Since
the
days
when
Roosevelt the Great would send

of

;

offering is made only by the Prospectus.

The City

them.
corre¬

that he intends to assert his lead¬

tion

golf

(Special to The Financial Chronicle)

nest

a

list

in

supplies

quirements.

Application

is

First Sierra Adds

Hydro-

designed to provide

of

Co.

to

finance in part com¬

Electric Power Development
Proj¬
ect

gations of the City of Oslo, which
is the capital and
largest city of
the

ning &

will

be used

This issue has been
retired. The bonds will be
direct,
unconditional and general obli¬

and

and

kroner equivalent of the
proceeds

The

March, 1936.

Norway

reserves

Norway

to

sold in

30

he(has frequently
self. .An

Pdntkgon reorganization

of

rangements committee consists of

Henry Ingersoll, Chairman, Smith,
of the Kingdom Barney & Co. and Norman Wilde,
Janney, Dulles & Battles, Inc.
the • Norwegian
Wesley Welsh of Robt. Glendin-

here.
Secretly he thinks
they are nuisances and he may be
right, but more importantly he

the

Very seldom is any
that is, ^ikely to
bring out anything new. They
usually concern subjects on which

asked

exchange

bonds maturing 1960,
1961 and 1962. Interest and
prin¬
cipal of the bonds will be payable
in U. S. dollars. The

were

The day's events will include
golf, tennis and dinner. The ar¬

by
City of Oslo from the sale of
the bonds will, in the first in¬
stance, be added to the foreign
the

loan

loan bonds due 1955

outing on Friday, May 23, at the
Philadelphia Cricket Club, Flourtown, Pa.

after

to

he acts.

question

ternal

and

on

Net proceeds to be received

principal
municipality's
of
$8,000,000

the

1, 1968.

years

horde of correspondents who now
attend his conferences are more
concerned

of

redeemable

June

people, Mr. Eisen¬

in

papermen

Vice-President Nixon.
The

$11,000,000

ally

sur¬

peared in her newly bought but
at
a
personal
or
antagonizing
question, the correspondents then plain dress. Mr. Truipan was the
most friendly. He was on a plane
\vrite that his health is
failing and
with most of them.
that he is likely to give
up his
office

of

amount

hower is probably the least popu¬
with the Washington news¬

He rambles

talking extemporaneously usually
show

to

dent

The
conference
is

President

over

him.
man

give annually: the Gridiroh, White
House Correspondents, the White
House Photographers, the RadioTV correspondents and the Na¬

questibn.

a

a
meeting
of
parent
teachers
everybody wants to say something.
In the first place it is a dis¬

all

for

the

dinners which the correspondents

asking

ing

lar

the

correspondent
asking the question is named. Like

these

why

be

transcript of the
frequently carried

service

briefed

thoroughly and

prise

for

com¬

be

Although it will

A

to

everything

the newspapers if this is the
I read them

read
case.

con¬

result

that

conference and wants to

heard

papers

affairs

understand

has

More

scene.

insists

very seldom am I informed.

to mostly inanities
and furthermore the
correspond¬
ents,
apparently lost for some
worthwhile question to ask, have

repeatedly dropped into the field

he

pertaining to world and domestic

have

downgraded

of

a

newspapers,

meant what he

for

An

offering will
dictatorship which Roose¬ be made on
or
about May 28 by
velt the Great came
very near to an
underwriting group headed by
attaining.
Kuhn, Loeb
&
Co.;
Harriman
In the
intimacy of Washington Ripley & Co.,
Inc.; Lazard Freres
where the political
tongues are & Co., and Smith,
Barney & Co.
nasty, a frequent reference to Mr.
The offering, the first in this
Eisenhower these days is that he
country by a Norwegian munici¬
is ignorant of
anything except the
pality since World War II, will be
military, that he won't read any¬
Oslo's
first
dollar
bond
issue
thing except the light Westerns,
since Jits 19-year 4V2% external
that he won't read the

he

thought

our

upon

long.

so

attempted purge of members of
consisting
Congress could also be classified bonds,
as
strong Presidential leadership. sinking fund external loan bonds
due 1973 and
$3,000,000 serial ex¬
Well, Roosevelt lost both this and

want

look of candor

said

urging

for

they

surprising
he

of

many

been

attempt to pack the Supreme
Ccurt. The editors' attitude toward
Mr. Eisenhower must be that

thought cf

them.

have

Eisenhower

the

ferences what
he

editors
Mr.

Securities and Exchange Commis¬
a
registration statement re¬
lating to a proposed public offer¬
sion

so

In¬

vestment Association of Philadel¬
phia will hold its second annual

City of Oslo (Kingdom of sinking fund bonds by maturity.
Norway) on May 6 filed with the These bonds will also be option¬

leadership which

Outing

PHILADELPHIA, Pa.—The

The

By CARLISLE BARGERON

17

Arthur
come

Co.,
City,

Lipper,

associated

25
as

Broad

3rd,
with

has
Courts

be¬

New York IIanseatic Corporation

&

Street, New York

registered representative.

May 2,1958.

Van Alstyne, Noel A Co.

.

t.

*

•

»<)«»■*«

Vol

The Commercial and Financial Chronicle
18

.

.

Thursday, May

.

(2074)

day-to-day supervision.; Yet, productivity,, gained through imthese
are
the factors
that are .' proved technology, should go to

and

The Great Delusions

.

in

Corporation

Chairman, Republic Steel

increases; the workers. It is rarely under"
stood that the gain from producV
\
1
,
tivity increases should not go to
Treatment By
•
wages alone,
but should be di-

Labor's

Republic Steel Chairman describes principal delusions harm¬
fully prevalent in the United States and terms "the concept of
the Great American Destiny" the most dangerous delusion of
all. The belief that Americans cannot fail just because they

by management. Many people are
surprised to learn that the work-

of: (1) getting something for nothing from gov¬
spending; (2) the machine as labors enemy; (3)
laboring man is maltreated by management; and (4) unions
are weak and must be protected.
Comments on views held
ernment

the

industry, or about busi¬
and the outlook

steel

conditions

The

and
that

is

delusion

for the future.
But there is a

hold

idea

this

subject that

nrnfit

has been very

without

much

Movement

on

my

mindinre-

months,

cent

Thev

the

misc oncep-

.

•

and government
accepted and believed

laoor

a.i

.

which

are

_..j

have

and I

sure

3

people
—

have been, too

you

of the strange ideas
people acquire about business, but
until
recent
years
I considered

—by

some

them

minor annoyance.
This country is
built on ideas, and it can be hurt
—badly hurt—by ideas.
only

But I

was

i We
ative

a

wrong.

only marvel at the cre¬

can

in

power

^hat

cease;

fascism,

or

the

of

concepts

in the

had

have

we

the working man in subjection,
The democratic atmosphere of the

A strike should be re--

sorted

only

to

up

under

ing, incidentally, would go

(

labl'-'i

efforts

°u

workmen

this

of

lit

thd

7

we
make, r the papers J |$ - > i -?<
write, the conferences we attend W-Vwe can speak up for good bimi
laid :
ness, good government and
■ *
labor relations. I know

loop

it is a"i

worth

doing—and
0

to

it

mav

provd

..

.

the

be

most

important job

o]

all.

am'
cH

i)

on

of

Buttenwieser Dir. of
Tishman
Benjamin

J.

solid,

are

to communicate.
These delusions about labor nat-

about

^

partner in Kuhn, Loeb
Co., investment bankers, has beeil
elected

Director

a

grant wage

see

must maintain a
structure that will give it
company

price
adequate

profits,
otherwise its
growth
will
stop
and it will
eventually die.
Included in the

general field of
business is a special set of delu¬
sions about equity finance.
The

Tishmal

of

'siiice

'wh<

Advisor]
T i t li

lated.

"if it

Existing side by side with this
delusion
is
the
utterly
contra¬
dictory one fostered by the unions
that they, alone, have been re¬
sponsible for the gains in work¬
men's earnings and living standr

it's

free"

the

solvency of the nation.

The

ards.

+

The

from the government

is

threat

constant

a

is

second

the

concept

of

paternalism. "Uncle" Sam should
be "Papa"
Sam to these people
who would shift all responsibility

who holds this

person

from the community to the state,
blind to thev an(j from the state to the Federal
fact that if management had not
Government.
Our
strength
is
provided the machines and proc-~' based on a
concept of government
esses
for
raising
productivity which gives to each man, each

beliefr of

course,

is

comi-litprflfp rritip nf business nh-

there would have been

sale of stock this same critic decries the Davment of dividends to
cries the payment of dividends to
stockholders. In the popular mind

usually
ir .d d the

no

money

familv.^:. each

Benj. J. Buttenwieser

of

...

community

each

tists'

Venus Pen
the

Pencil

Health

Greater

.

POll

Benrul 'Tirtak

the

Circuit,

&

whc

of

r.Fol

Ar|

Company, the United

Theatre

v e

1J
will
1}

Nev
York. He alsl me °.rd
si01
is
a
Directol

to

Watch
~.

UiV;

Coml

Trust

The delusion

spending.

pie

,£'8

■'fo

Committee
the

v

eve

•;

1918,

member

a

the

.

people have hooked to govcomes

;

Loe|

Kuhn,

lies in the field of gov-

ernment

It

wieser,j wh|
has been witl

pany

linrecfuunregu¬

be

»b|
" cul

Buttenl

Mr.

sound,

many

totally

,n^.p.rc

Inc.

country

ful
pressure
groupt.otallv
in the country,
and
almost
almost

'■*att£

struction Col

Guarantee

and

>he

'

Realty & Conl 10')

in .the face ,°{ growing proof that' ernment. The first is the concept
unlons constitute the most power- of «Something-for-nothing" which
arr>
are

■•s

spe

limited

The last set of delusions I want
COver

one

Buttenwieser,

a

"Something-for-Nothing"

;;

i'staj
jve

Realty Go.|

clear thinking
men
and women, and under the
proper conditions and safeguards

eiI°.-

H

[so

1,311

conver]

our

friends, in

long
inflation.

toward controlling

way

The
our

The achievement of

ari

L

n*

talks

entire

the

when

force has voted for it,
a
properly
supervised

secret ballot.

mill is vMu-

or

previous Democratic Admin¬

istrations.

Many people actually believe this

The error lies in the failure to
a

our

urally spill over into the field of will vote for their best interests,
cor- unions. One strange delusion, for and the best interests of the counbe- example, is that unions are weak; try.

correspondingly
increasing the price of its product.

that

with

f)W

t

tjL antl.,u;
our
I

do

can

and

*

should continue to

as

this balance in collective bargain¬

be protected by the government.

.

hand

other

the

management represen-

furnish au
we

a

JiTia-ai?

;

•
daily -----*
work, in

our

sations

fci

well

community

antidote.

needed, but

.1

working

rise in the standard of

delusion

On

1

to the early days in
this country and in Europe when
force
and
rigid discipline kept

and undernourished, and have to

this

be

such

over

back

goes

the im-

profits is one about prices. Many
people are convinced that as long
as a company is
making a profit
it

should

secret

by
.11

_

two

the

to

^

elections.

jar

man

the

increases without

been puzzled

always

am

i:

i

of the

large numbers
in our country.

by

11

im-

understand

not

Linked

Cuar.es

about

business,
.

do

living.

gross

tions

would

continued

I refer

the

to

that

and

portance of capital formation,
see no relationship
between
porate profits and jobs, or
aveen
corporate profits and

economy

today.

growth*

communism

sither

confusion in
the

for

growth

elected

.•

.

should be

hand

one

leaders

also includes an over¬
oppression by supervision
and management in general. This

boring

f^an

a

problem that
be re¬
sponsible for
of

monpv

Profit

the

Qn
jahor

popular picture of the la¬

only alternative to the profit sysin so te of all
;em is a system of state socialism,.,01 311

may

much

is

that

unaware

are

collective bargain-

spirit of free

tone of

if they are big.

second

iab0r

ballot of union members at regu-

are

can>t

use in

the

That puts it squarely
We

In

problems arise between
and
management,
they

place to work as the white eol/-.-P-Pi
.->,-1/3
+
+
KIllO
lar man's office, and that blue
collar benefits are likely to be

The

corporate profits are "bad" in di¬
rect ratio to their size. Those who

ness

disposed part of the
an

ifcjn.;

industry in dissemi

more

nating the poison, than
furnish

m

accomnlki
the inven

tors of pernicious measures

finitely

195

equal to those provided for white -tatives working without the concollar workers
stant threat of government take-

efficient

be

can

successful only

When

should be worked out in the true

wages

a

regarding profits, productivity, and bigness in business. Urges
we need to fight our delusions as well as work hard in order
to win out against recession and cold war.

fair share.

likely to • be
equal to the professional mans
salary; that the blue collar workman's factory is often as pleasant
man's

Union it is not easy to
this—especially when

videc[ among wages, prices and

j

popular delusion about"profits, so that workers, consumpictures him as ers and investors will get their

overworked and uncared-for

poor,

the concept

enterprises

.

the laboring man

Americans, Mr. White contends, has set us back in our
scientific race with Russia. The Chairman lashes out against

Normally, I would discuss some
the technological problems of

;

Management
Another

are

of

for

responsible
productivity.

mainly

WHITE*

By CHARLES M.

planning,,that the proceeds from increased

long'range

to

devoted

g

ach

thd

Inc.,

oil

Corporation)

Insurance

t,fi;pro

New

York, the Philhar-j
monic Symphony Society of Ne\
York and of the Foreign Policy

tral
Ma

ol

Plan

bii

stal
an

Association.

eal

He is Chairman of the Board o|
Trustees of Lenox Hill
former President and

Hospital,

|5 ;'3 ? it
I Mi

"i

mc

Truste

now

"liberty," "equality
terprise." We can
destruction let loose

idea

the

bv

tp

rieht "

could

nation by
our ideas.

future

because of

or

Ideas can be dis¬

emotion

by

face

all

of

evidence,

'

upon

thought of consequence, it
only be labeled a delusion.
'

Let's look at

lusions,
one

by

and

they
W

they

I

that, although I know

are

and

wrong

wrong,

are

of these de¬

I hold them up
would like you to
know

you

people

many

in

this

country believe them whole¬
heartedly.
I would like you to
think of their effect

laws,
courts, on our labor- man¬
agement relations, on the attitude
of the public toward business and
on

on

businessmen
sinessmen.

There is a appalling number to choose from, but

r

I

will

select

only

a

few

in each

Field

-

•

of

In the field of business, probably the most common delusion is
that "bigness" is synonymous with

"badness."

Growing

out

of

Old concept of monopoly and
straint

of

trade,

condemnation

this

the
re-

emotional

of

big
business
completely overlooks the fact that
modern

been

corporate

our

tional
mover

defense,
in

highest

enterprise has

greatest weapon of
our

and

the

na-

prime

climb to the world's

standard

of

living.
We
should remember, too, that
many
*An address by Mr. White before
41st
Conference National Open Hearth
Steel
Committee and Blast Furnace, c^ke
Oven,
and Raw Materials

I

Ohio, April

IS,

_r._

^ommittee, Cleveland]

1958.




man

or

stockholder

a

through

his

as

opposed to wages that
Not

this idea is blind to the fact that
to

a

who invests savings is entitled
fair dividend, just as one who

invests

labor

is entitled

to

a

fair

wage.

The

emotional

impact

in

this

delusion, as far as the worker is
concerned, comes from the con-

dividends
"

itbb^d

He refuses to

incentive

are money

blfthat
JW
without

see

of

dividends

and

vestments

E Z

saving; that with¬
that

there

1

fo

the

there

savings there would be

vestment,

no

without

would

be

u!?

in¬
in¬
no

De .no

a pnm"

ltlye *andard- of hvlnSIn the general field of labor,
Pr°bably the most insidious deluslon is that all of the credit for>
productivity increases should go
JJJ
laboring man. Not knowing
*be funcb°ri of either management or technology,
technology, it
it appears
aDnears to
to
CI lci^. business ,—:
that "the
man
who
„,u

get the

~

been

the

outgrowth
of
better
technology, and a maturing man¬

j

does

credit."

,,"

the

work

These

philosophy

to

laymen

Machine

realizing that
and savings are both forms
capital, the person who holds

one

should

critics

do

When

we

and

science

the

miliions

agement

of

time

to

an

eye-

take

the

that

dangerous.
-

-

of

find

we

industrial
the

new

suspicioii To

of labor

the

and

But in the field

technology,

distrust

is

much

residue

a

of

of

This idea is
even

a

so

small

the working

is

of

techno¬

logical
to

unemployment is enough
rouse deep resentment and un¬

easiness.
easiness.

It
It

will take
take
will

a

long and

costly
educational
program
to
convince labor that the machine is
the giver of more and
better
products for

a

better

Even

more

'

urely life.
when

the

leis-

"

role

union
umuu

people
pcupic

management

of.

and

processes

is

believe

— ueueve

uses

new

'
to

new

that
mai

machines

The

American

third

Destiny

little

exploit

the

as a creator of jobs

understood,
in

.

-

v

ho.v

and

Wo

taxation.

ree

witl

'V

interrupted dun

Hi';

ing World War II, when he served
as
a
Lieutenant Commander in

!V'

Kuhn, Loeb

fail

when he

because

we

Americans,

are

aster.;

more

caused

us

than

to

and

once,

lag

in

has

current

our

was

the United States Navy,

mid-1949

ant

until
was

the

end

always known that we
get only what we work for—nothing more—and we have been
willing to work harder than the
competition.
Than

Hard

%it today, in the face of
in

cession and a step-up i
tensity of the cold war,
the

we

may

re-

in-

we

must

against
we have.

are

up

High Commissioner for
Mr. Buttenwieser is

GerJ I'I lit
nov|

Naval

Reserve

loc

(retired).

trr

§P

here again is the idea

Eu

Blair Opens Branch
In New Haven
i
NEW

ap

Co

sis

tui

HAVEN, Conn.—Blair

Incorporated, members of
York

Exchange

Stock

du

thj

M;

and

St

if*
leading security exchanged
ti\
the opening of an
ofj
su
lice at 70 College Street, whicB [>.■/
w<
lit
was
formerly operated by the ml
ell

other

announced

K:

competition
faced, and hard work alone

ves*ment firm of George G» ban
& C°-> Inc.
h

not be

in
Samuelson, resident
manager;
Robert O. Samuelson| fio.-:!' C<
L. G. Pease; John J. Dolan an(
it
^
f^ase; Join

stiffest

ever

a

the

We

enough.

are

go-

ing to need the maximum in wisdom and clear

achieve
"um ailuT'ieai: thinking to
lo acnieve

go

tno

,

to flffht aSalnst the delusions that
confuse and blind us> that turn us
against
ntIa'"sf each other.
nth^r>
There is

nothing

new

commenting

his experiences in
the Presidency:
am

sure

the

mass

act well whenever thev

^btSn

a right
matters. But in

can

uXstanZg 'f
some

parts of the

br

St

cc

lil

Cosby & Co. Formed
(Special to Tuk Financial
v"

w

X

office

Co. has been formed with
at

A

Chroniclk)

CLEARWATER, Fla.—Cosby
1985 Drew Street to

engage

vi
a

i

ir

—

we^

and I firmly believe they will alwavs

tei

of Citizens

mean

th

u'

■5ti

C. Lane & Co., Inc., have,-fJ0ine
the Blair organization,

about this.

on

Ai

Arthur O.

*b?.fn.aS™u^j1^e^lche"c.y: ,Thls d;„i'..PA?k.?rman' wh_°
™ean!,that V.
!°"lg.to hauve «onductecl the business of .Georg

'I

llP'

Commander in the United State

New

Work

^
wil

19511
,K..UP
Assist! I
of

of

United States

many.
a

Co.
More

Co

inc

fronl ?*'•'

and

clef
un<

CommerceT

Mr. Buttenwieser's service

perhaps the
most dangerous delusion of all—
is
the
concept of "The Great
American
Destiny."
This
doc¬
trine, which holds that we cannot
—

of automation, in these ifnited" States"

an upgrader of earning power

Tying

on

—

of

.

Great

technology is understood in en- It is a continuing fight—one that
gineering terms ,a number of peo- must be won over and over again,
nip—inrOnHincr perhaps
norVmno a majority'
iripnrcrp
caia
pie—including
George Wa^Hincrtnn
Washington nnpp
once
said,
of

—

Chamber

committee

remember that

man.

firmly rooted that
amount

American Jewish Committee. HI
is also Chairman of the New Yor
State

of

industViarDRevolutio^1UTheUdeluenemy

to remain

are

we

strong and free

of

the

sion, here, is that the machine
the

be protected if

theories,

general public. Some of the sus¬
picion is purely mystical, a part
of the ignorant man's
suspicion of
the unknown.

^

carried out, these privileges must

particu-*^.scientific race with Russia, We
raustx remember that we are a
processes Srea^
nation because, basically,
we
have

are

New

dark

segments

many

the fields "of

■

objects

responsibilities

These
?

has brought us to the edge of dis¬

Enemy

technology

machines and

new
are

and

delusions

some

larly

mproved machines and

PWW

is

who

as an

come

poureSdeintoer^irnh%bf wlv™ ™orker- Tbe
noured
intn
^ons f°r example,
i

idea

.

un-

labor
of

,

brought about the vast improvements in working conditions and
safety in modern plants. The fact
that
these
improvements
have

of this

earned.

.

trouble to find out for themselves.

delusion is that dividends are

earned,

Supplementary

...

opener

Concept of Profits

A second

Accompanying this delusioiv is

agement

own thrift and in«euuit^

out

Business

rich

who inherited the money¬

would be little

field.

y

come

our

our

a

Rarely does the critic stop
to think that all capital is earned,
and that he, himself, is free to be¬

are

as

one

remember

some

can

is

bags.

de-

^ed^urn'winmy^rwnhout
Mindly and witnout
acted

the stockholder

prejudice.

or

a^mistaken'idea^is* held

Butwhen
the

our

be wrong because of a

premises.

torted

of

we

woman

information,

wrong

in

the

tiro

evaluating the sanity of

can

lack of

makes

dnnnrfv,
wise enough,

we were

measure

Ideas

"might

that
urnvn

If

Be
n

.

•

L

.

,

rp

'flcUrer,|

Uosby, Secretary and' Tre
and Furman J. Baker, Jr.,
President.

I

Vice-]

Ci

Volume 187

193

The Commercial
and Financial
Chronicle

.

American Investments
And the

sein

i oji

'semi

uTlSv'Sil

By JAMES

A.

tion of tax: shall

"the

MOFFETT*

Mr. Moffett deals with
unparalleled opportunity ahead for both
•j <i r<r
■abb-1 ' Europeans and Americans in the
European Common Market,
ISO n
and the problems
apt to confront U. S.
exporters,

to US

tidoti
Pari

prospective

nver

the

s

w

ttend

as:f
<$}<{

g00(

oft' hi
joft
be

jol

stimulation of competition and
accelerated development
other areas, that in due time it
will be increased. Calls

-

busi

!>«'

intensification

)tjs 'it
ion"

prove
ob o;

American

y, !';■

participation in this great

development.",;'

,v- f

'

For

anyone to express himself
the broad and
exciting subject
the Common Market

on

of

fvelo

ent,
can •••only

Co

this

at

,supplying:
j'

wherewithal

; o n

nomic

f the speed of r
jykttainment, ;as ifl

eb

bee;

TJIweU

hmai

•7problems t o
bo h overcome.

Con
Co

V; It

cult

wh

to

Now'
Jet

find

,!agree: on
y f o recast

18,

when

dsor,

-

a

of
James A. Moffett

this de-

1

be fully effective and through
What trials it will pass
state

me

to

turn

forces

period

irojii

ever

good
say

thing

for

the

Eco¬

when

as

Common Market
low cost and,

is very
not create

does

proved

the

thus,

a

problem as great
dealing with factory lo¬

cation in this
country.

Another problem

•

that

must be

is
that of the variance
in
the laws between
countries. As an
example, for a food company, the
wide
discrepancy in food law
standards that exist.
Unless this
factor is reduced to a

generalities,

common

in

American viewCommon Market, in
an

both

were

play in the
world

from

a•

wars,

dramatic surges

European production.

covery

The Common
Market will create
heavy burden for the
area
through the necessity of accom¬
•

at

were

after

when there

H i

Let

throughout
area

us

same

f'will

itl

could

only

exporting to the area. In denominator, it will impose diffi¬
considering this we do not have culties, and so retard develop¬
to indulge, in
ment.
guess work, as the'

v.elopment

:ee

the

nesses

!l

ee

is

Fortunately, transportation

.consider the specific prob¬
lems which the Common
Market
will generate for
American busi-

ple who could

er

S.

one

these

The

plishing

re¬

,

a

great

are

of

stepping

units,

in

to be

to

ultimate
one

ing generated

mar¬

hemisphere,

ket.

which

By this bold stroke
mon

Market,

of the Com¬

will,

we

deal

of

re¬

two

the

benefit.

without

and

the
of

design

the

from

world

can

The

Common Market of
he the test and
prove
what has
happened

question, witness the
opening of a up of
gate of
prosperity through- American

development,

such benefits in this

is

rest

Europe will

flood

industrial

19

the fact that a
great deal remains
done, it must be certain that
this is the
approach, which, hav¬

be¬

order

way
for the
of dealing in

necessity

the

up

information

vocated

an

here.

business

such

has long ad¬
step without call¬

a

opportunity, unparalleled in the ing it by name.
Now Europeans
history of the world, to profit
,by have found the name and set
applying
the
down
techniques
the
and
method. It is the
duty
know-how which
of
we, in this coun¬
try, have been fortunate
enough to

American

or

management

join

in

this

to

great

portunity.

its

op¬

•

.

restriction.
A

Design tor

Tucker Anthony
Day
Elmer Bright to

Utopia

*

Probably
is

most

the effect

important

which

Market will have
the world.

depended
power

of

to

owners

develop, - with the great assistance
fantasy of of 48
state-borders without tariff

met

two peo¬

even

wit
Loe

the

American

taxation of foreign
earnings.

the

purchases.

corporation, due to

that

Considers Specific Problems h

would prob¬

ably^. be diffi-

itten

for

with

history has always

an

probably

that what is
good for any segment
of the world's
economy proves to
be beneficial to the
whole.
'

*

the

as

customers

course

U.

v;

United States should benefit
fur¬
ther by a reduced
requirement of

p m

|| bhe
^ speculate

r,

since,

Of

tax law,
is, in general, not
stibject to local
taxation, insofar
as
dividends tre concerned. This

new

together with the accelerated deVelopment. of other areas,
trade,
as a;
whole, will be increased. The

involves

| considerable 7 risk,
£
stage > of de-

dustry.

we

various
the

pave

Common

problem
and
suggests
political integration
should
be stepped
up because of the tre¬
mendous effect of taxation
on in¬

of

"'.-V':

Finally,

interchange
tween

that

that

for "an

of

assume

difficult

participants and corporations already
represented in the area.
Agrees that direct trade at first will be reduced
but, under the

it-yd

we

of the

dered far easier. As
you can easily
see,
this factor presents
a
most

;

n

development

Market will bring about
equaliza¬
tion of tax
through the area? Be¬
cause, if so, the choice of
location
lor an American
concern is ren¬

President, Corn Products
International

\ts:ay,

difficulties, due

disparity of the political
concepts of the various countries.
Let us take, for
example, the ques¬

Market

•

or]

ityt,

!om

duces tremendous
to the

j9V.(U h

we

all,
Common

the

the peace of

on

Up to now,
more

than

on

of

peace

the balance

of

the

on

sound footing
individual welfare. The
dispro¬

portionate

individual

the people of
has presented

wealth

of

other

areas

Europe

who have

generating,

less.

at

ton

in

communist

states, not being able to point to
one
wealthy area and many less
well

combine

H.

Bright

their

under

in-*

the

Tucker, Anthony & R.

Street^

New

offices in Boston

York,

Bedford, Mass. „In addition, the
present offices of Elmer H.
Bright
&
Co, in Haverhill,

Event¬

areas.

totalitarian

of

Elmer

announced

to

Tucker, Anthony
& R. L.
Day will continue its of¬
fices in
Rochester, N. Y.; Hartford,
Conn.; Manchester and Nashua,
N. H.;; and
Springfield and New

two great areas of
economic well-

the

and

have

invest¬

headquarters of the expanded

and

ever

being. From this will result bene¬
ually

Day

In addition to

quicker pace, an
economy parallel
to the United
States, we will have

fit for the backward

Co.

The

Tucker, Anthony &

firm at 74 State

With

an

&

Merge

—

L.
Day.
The move is
expected to
take place late in
May with Bos¬

United States
continual oppor¬

advantage of the people

L.

name

tunity for communism and other
ideologies to point at this fact and

take

R.

tent ion

the
a

BOSTON, Mass.

,

ment firms of

has

Mass., and
Providence, R. I., will be retained

off,

will be forced, through
public demand on the part of
their
people, to permit a rising stand¬

long pe- arrangement of capital assets. This
under the new name.
^ods of destruction and non-pro- would indicate that any American
Tucker, Anthony & R, L. Day
ductive effort proved, in spite of corporation,
contemplating entry ard,
sions as to future actions
through peaceful production. have been in business since 1892
to be
Balkanization of effort, that to the area, had best act with
ur¬
h; taken by American corporations, the people of the Common Market gency, in order to
Although this sounds like a de¬ and Elmer H. Bright & Co.
take advantage
was
i
Following the American ideal and srea were, if not the most, at1 of construction costs
sign for Utopia, and cognizant of established
before the
in Boston in 1904.
J achievement of economic concen- least equal to the most
productive full thrust of development has
tration
of
taken its effect.
effort, the Common people in the world. '
')lr
Market
will
develop
low-cost
At the conclusion of the
In looking down
reconthis avenue of
productivity. Of greater impor- struction from World War
This is lot an
I, the the future, we can see an accele¬
offering of these shares foi' sale, or an
offer to buy, or a solicitation of an
',.'rj tance, this will produce a rising United States, through a false
offer to bu$
ration of the
;
••

Nev
als

2

.

(2075)

Jlis

i

.

51

nven

a

Number 5740

•ecto
enru

I Ar

S

point

tA

Order to

of" the

present

basis for deci-

a

4

•

the

(

v

ation

.

n

o

•

lhar

1

Nev

'olicj

standard

'

an

ever

eal

rd

o

it

,lat

consumption.
set

increasing

uste

living,

resulting

increasing platform

will

in

As

this

motion

in

occurs,

spiral of
productivity, reduction
a

:

dn
)

ani

1

ft;*

th

Paradoxically the greatest

of the Common Market

-

H
^or

deficiency of

Y

World

readily

tiw

!V

iur

see

Common

is tlie

of

areas

Market

area

but,

the

Thus, we can
only will the

that not

productivity,

-

by

gain

in

doing,
will have available a
large and
increasing foreign trade, based not

'

1

ron

asset

upon

951

subsidized
the

upon

tsil

of

rel
10V

'

.eta •1:

the

•'

so

customers, but
economic footing

sound

exchange of goods.

Effect Upon

/
U.

Trade

At this
point, let us take
look at the possible effect

of

Europe.

the

sists

United

a

brief

on

States

the

with

Recent figures show that

of

Market

duced

,

th

countries

con--

manufactured items,

tuaily all

of

which

within

the

be

can

virpro-

Common

Market.

Further, sincq the United
draws a much lower relaincrement of raw material
supply from the balance of the
world, it is reasonably safe to con-

<nt

I* States

se<

tive

of
ic;

Dn,

in

,

ill

^,

:11
(11

cn

7

elude that a higher percentage of
American trade in manufactured
goods

,

,

<B

with

other

areas

will

face

increased - competition with the
Common Market. We do not think

it illogical to draw
the conclusion
that the Common Market should.
tend at the outset to
reduce

not

bnly direct trade with the United

States,

but also with many other
countries.

jjike
,

Offhand,

pessimistic

a

this

:

for

^fn
consider that demand is
i^lri'lia^
we can draw
f
further
eonclusmn that under
o;:the
•

stimulation

77""*.

p.

City,

,,

:

,

NATO.

,

of

„

Chamber oiF
April is, 1958.

As
.ket

'

competition,
„

,

,

New Ymk

3i7




a

vehicle, ship and management from the
emergency,was as- family-type business of the past
industrial

to

Having dealt with

"

result of the Common Mar-

nate

the

requirement

for

problems

which

of

some

Common Stock

the

"

confront Ameri¬

(Par Value $1# Per

'

a

reversed

trend

in

porations
the

certain

of the
economy.

In : addition

foreign

the

area,

by

to

•

In

our

for

the purpose of

European

we

will not

the

area

is

take

advantage

tunities.

move.

an

intensification

of

American participation in this
great new development.

the

Blyth & Co., Inc.

Establishing
concept

Market
tainment

and
are

a

of

the

time,

the

interesting.

It

proposes to lead off with the eliminati0n of trade barriers. From

standpoint of established business,
this creates a" variety of

Goldman, Sachs & Co.

,

;

■

-

forth ife

ductivity, thus paving the

pro¬

to

White, Weld & C(

Company

Paine, Webber, Jackson & Curtis
Salomon Bros. & llutzle0

Tucker, Anthony & R. L. Day

IT. Hentz & Co.

.
.

l

♦*..-*

;■

t

t"
r.

G. H.Walker & Cfta

Rand & Co,

;
*

r.

May 2,1958.

Cog

Laurence M. Marks &
Coi|

,

Pressprich & Co.

further possibil¬

The centralization of
figure pro-;

*

W. E. Hutton &

Moseley & Co.

Shields &

enumerate

<

,

Carl M. Loeb, Rhoades & Co.

cialization.
To

Corporation

Company
Incorporated

advantage of reduced costs
in the several units
through spe¬

ities:

j.

A. C. Allyn and

F. S.

Cftj

Merrill Lynch, Pierce, Fenner &
Smit

Stone & Webster Securities

coun¬

way

Langley &

Hemphill, Noyes & Cflj

Incorporated

R. W.

take

W. C.

Glore, Forgan &

Harriman Ripley & Co.

Kidder, Peabody & Co.

as
the Common Market
takes on
the aspects of the American
free
market. Our
thinking runs more
in terms of

ductiqn, which will make possible
problems, but, from the standpoint tb^ utilization
of electronic meth¬
of establishing a
business, it pro- ods. ■
./
■

set

forth in the
prospectus.

Eastman Dillon, Union Securities & Co.

a position to
future oppor¬

try by country, in phases of

Business

Common
schedule of at-

very

fully

Smith, Barney & Co.

in

of

as set

The First Boston
Corporation

actual¬

same

concentration,

The

more

Copies of the prospectus may be obtained
from any of the several under*
only i>i slates in which such underwriters are
qualified to act at
dealers in securities and in which the prospectus
may legally be distributed,

lick

self-interest,/is

as

writers

American

can't

,

agreed, subject to certain conditions, to purchase
during and after the subscription
period, may off^j

Considerable thought and
saying is —
study
is being given to the
history of
them,
join
the development of
them." This is not
productivity
entirely applicable, as we have joined them over over the years in the United
States and, by the
the many years since
lessons of the
the first
past, we hope to avoid mistakes
war.
What is.,
required, in our
good

you

1

the prospectus,

studying

forego present

industry, living in an ities, while, at
of
placing ourselves
bicycles,
one
can

economy

;•

share have been issued by
April 29, 1958, which rights expire May 15,
1958,

per

record

group we have formed a
committee
within
the

automobile

readily recognize that the

•

to subscribe for these shares, at
$22,2$'.
the Company to holders of its Common Stock
ot

shares of Common Stock

people here. - This item of import .and
forecasting, not only the pos¬
trade involves only 2% of U. S. sible
effects, but also the proposed
production, but, at this moment, solutions. In
general, at this early
is equal to 11% of the burdensome stage, we are
thinking in terms of
inventories. Now, when one con- controlling expenditures for
cap¬
siders that this import is
ital assets, in such a
genefashion that
a

J

••

•

The several Underwriters have
any unsubscribed shares
and,

the

problems
generated by
politics, there is the
question of re-alignment of
pro¬
duction for the future.

standing

rated economically by

•

Rights^evidenced by Subscription Warrants,

in

Existing Firms' Plans
L

the

show

represented

Share)

•

area.

Last week
a rather dramatic evidence
of this
fact was the acceptance of
automobile

already

4

manu-

factured goods from the United
States; in fact,, we may even be
witnessing some of the early signs

A

Long Island Lighting Company

development,

the increase of indigenous
production will ultimately elimi-

"If

696,260 Shares

as Marshall Aid and

ties,

on

any:of such shares, The offering is made
only by the prospectus.

owner¬

exporters
and
American busi^ can
prospective
ness must re-appraise its
situation participants in the Common Mar¬
with respect to the future. Re- ket area, let's turn for a moment
gardless of governmental activi- to the problems generated for cor¬

sounds

outlook

American foreign
commerce, but,

v

•v

the
into

Yj^2usuc^'

areas

approximately 32% of exports to
Common

to

sisted

its

of

the great
the corporate and
depression
professional
by the recovery of continental management with which
we
in
production. -Since World War II this country are so
familiar. This
the United States has maintained is an
opportunity which gives an
a large part of its
export to the American
corporation, • entering
area
throfigh governmental de¬ the field, a tremendous advan¬
tage.

of

S.

i

trade

of

....

supply.

Lr,i
"

I've

ii

can

due

materials, which

raw

yV Under-developed

ecr

area

pansion

of lo-

of costs, and an
""improved com' petitive position-for
export to the
7-balance of the free world.

Phi

transfer

cx-

of

■.

»

'

~
M

20

The Commercial and Financial Chronicle

(2076)'

-

t

is

>

•

•

The

task.

first

By-CHARLES W. B. WARDELL, JR.* /•

v-Z'

T.

President, The Deltic Corporation, New York City

'::;/ -;/

The

question

of

the

financing

group
bers of the

of industrial

enterprises in Latin
America involves ultimately the
financial - support
available
in
these respective capital markets,
Other sources of capital aretessential to the development of; the

the assistance they
command from governmental and
other special connections. Although-this is probably still the
most important source of d'eyelepn ent ; capital,t it
has y become
woefully inadequate, not only for
the financing of the large Capital
goods projects in progress and in
^prospfecti but also for the expansion .of established companies to
meet competition and market demands.:;
; r

tion about

peals

to

national

pride

to

promote

the

of

selfish

interest:

the

that

we

(d)

agree

investor

the

with

associated

logical

we

be

Worthv

and

ao

existing

?n

Halsey, Stuart Group
Virginian Ry.

.4

been

schedule

the

payment

of

Offers

4% Bonds at Par

placed, and provide
of regular dividend
an¬

Halsey,

nouncements of such payments;

associates

/ dates

is

these markets.

substantial amounts of the issue

a

been

propriate answer to the
shortage
of capital
presently

operations to Deltec;

arrange

have

companies

have

securities

dividends in the localities where

-a

ha/1Z

without
except taxes to share¬

expense

particular

security: for example,
that Brazil may have an automo¬
bile industry ; and at times to more

must

company

stockholders;
(c) transfer, shares

holders;

not

are

sale

which

fthe

raising public capital,
lieve public distribution
of

(b) issue semi-annual reports
to

to

in

(a) provide monthly informa¬

meetings with mem¬
firm, endorsements by

amiss

To foster good stockholder/

to:

understood

crued

.

relations, the

th,

evident"advantages: that

company's books annually and
more often;
; •

(9)

officials and leading citizens, many
times it has been found that ap¬

and

sources

is

with

,

marketing Brazilian securities. Deltec's head believes public
distribution of worthy securities is the preferable answer to
capital shortage plight in Latin America.

v J

the

perhaps

through
the efforts of individual salesmen,
publicity in the press, together

capital financing below the Rio Grande,
with special reference to Brazil, is spelled out by Mr. Wardell
in describing his firm's participation in underwriting and

"

aspect, which has involved care¬

vestment

What is involved in

,

The retention of independ¬ ditions encountered in the
Latin
public accountants to audit* Ameitdcan%3uhtraes,"ahd from

ful explanation of

securities, their
differences, voting rights, divi¬
dends, earnings, options, regular
income; in fact, everything that is
commonly taken for granted in
Wall Street. Once a particular in¬

1958

.■

(8)
ent

necessity has been the education

InLatinAmerican Countries

Thursday, May 8,

.

.

i

formidable

a

.

with

prior

public

Stuart
on

& Co. Inc.
and
May 2 offered $12-

000,000 of Virginian Ry. Co.
first
(10) The expenses arising from
lien and refunding
mortgage bonds
specifications are to be borne
series F, 4%, due May.
1,1983, at
/:, /. Z
Z
hold appliance. Parenthetically by the company.
Latin American business :60mmu100% and accrued interest.
Award
Once these conditions are estab¬
this matter of enlightened selfof
the
nity; \ particularly, important are
bonds was- won
by the
interest is being demonstrated to¬ lished in the interset of the public
the. direct investments of >Ameri^
group at competitive sale on May
day by certain Brazilian compa-" stockholders, Deltec arranges and 1 on a bid of
cap and European. manufacturers,
99.277%.,
•
4
:
nies, some of them publicly owned, conducts trading markets in those
but:it' is the savings of the local
that
^ecrrrties Deltec issues and sells /Ney proceeds from - the sale of
are participating in the capi¬
ihdirectiiinvestor on ; which the
the bonds will
be used
talization of a new and badly publicly, along with its usual trad¬
;by: the
growth of these economies finally
a second means' of providing
needed steel plant.
ing, activity in the principal secu¬ Virginian Ry. Co. for the payment
*
depends. * - - Z/H /• Z
/-'' development capital has been the
of
a
short-term
bank loan due
The other side of this coin in rities listed and traded on the stock
y The intense demands for capi-; t einvestment of earnings. This is
June
It, 1958, and to replenish
exchanges in Brazil. This provides
tal in these countries reflect the
"low and limited by the tradition the development of an effective'
the
company's treasury in order;
the purchaser an opportunity to
exaggerated rate':: of * growth of of large .cash dividend payments capital market is obviously the
to provide
sell his shares at a fair price ior at
funds, which together
their;. respective • economic ; com- to the shareholders^ A latere, and protection and safeguarding of the
with
other treasury funds, will be1
least an extended period after the
munities,: communities?that -have further deterrent has been the in- public investors' interest, once a
used for capital
purchase was made. This liquidity
expenditures, to
been going through a -forced draft.
qreaei»gHax rates*which have be- company's shares have gone ' to of
increase working capital and
for
course gives the public investor
market and public ownership is
expansion of industrial producf ccftne important considerations.
other corporate, purposes. .: /■;• / :
tion, pubUc' and^piivi^e'cohst^c-i^. A third source of ZfumlS has established in a greater or lessor greater confidence in his invest¬
The
series
Fbonds
will
be
degree.' Only then can a growing ment.and enlarges the market for
tion with^correspondmg increases
might

have

electric

more

and hence the use of

power

nevHiouse-

a

V'

these

•

.

,

been--forced" loans Z

byf^&ts^bf ■

purchasing power locals governmental development number of satisfied investors come
consumption, with a contihu- agencies.:: - These "Fomentos" or into being; and establish a basis
ing expansion of active.markets equivalents,;- such as in Brazil's for an1 investment banking busi¬
in

consumer

the issues distributed.

local

productsp, thesefactors
^with; a steady growth

feombined

agricultural 'output,
in the
industries,, "and
greater
than average population: increases,
have produced perhaps the world's
fastest developing economies.
t .

creasingly

service.:

Since

these
a

very

De-

^terpTise;

their

of the

to private

futures

mercy

are

^particular

,

America I want to
discuss Brazil,, both because; we
enow that country best and. have
oeen; most' active there, and bemuse
it
has the
characteristics

ited and insufficient t6 meet basic
are;

understandable,, yet

often not
tion

in

given

for this

all

too

proper considera-

relation

to;the

encountered

problem,

tant

are

inflation

is

produced.

eign
come

reluctant

nancial
these

note

this

adventures

are

at

and

risk

be-

The

and

hence

the

investment

banking business in Brazil has
developed since
the war into a recognized
adjunct
of the business
community. It has
been largely a
pioneering effort
to educate the potential Brazilian
security- buyer-ink the most elemental

a

to

sense

understand

company as

gov-

channeled

real

estate

dis^ pients,?

many

of

hand to the fail-

Traditional Capital

Sources

,,

there .have, been
.

four

.soi^ce^pf, those limited
available to which Latin
American
bi^inpss , .enterprises
have turned.*
funds

y

source

is

*

the

to

keep

profits and dividends adequate

^

family

groups, usually an alliance of two
or three rich, influential families

tlon' and
0f

011

°.f, infla"

the raXage^
other to the lack

marketability

investment

to

or

liquidity" of the

made.

once

Unfortu-

nateiy there has also been

a

tory of fly-by-night schemes

(a)

ers

and

losses

to

unhappily this is
today.

investors,
not

and

unheard

of

Finally the few sophisti-

whose activities

include banking, cated investors
were reluctant to
land development, and buy shares in
publicly-owned corncommerce,
p*ese family groups panies because of the fact that
in the past have been able to firegular and accurate information
nance
their> capital
expansion about the:
companies' operations
programs
from
their own re- was usually hidden from
public
address by Mr. Wardell before
SOmetimeS to the advantage

Industry,

prptection

Management
'

ence,

4

-




Confer-

the management find directors.
;Tb

overcome*

these- "difficulties

has

increased,

value in

excess

last, year's average
during the past 10
Cr.$300 million, years about 90%. of total bitu¬
minous
coal
handled by the rail¬
US.$3.5 million,
largest single un¬ way.. :/"■',; :v%//;- ;'

with

of

the equivalent of

including the
derwriting and
undertaken

in

public
Brazil.

notwithstanding

sale
This

ever

year

Bank of Calif. Woman

certain1 discon¬

certing

\

the

companies who have
Deltec's
services
there

retained

been,

we believe, great ad¬
In addition to the capi¬
contribution
sometimes
un¬

vantages.
available
at

from

any

interests have

national

saved

time,

hioney,

common

| has received

ticularly

common

a

stalments

in
a

or

more

at places

year

sible to the

(4)

two

customs

effects

and

each case to suit the circum¬
stances of the issue and the mar¬
*»,.•

.

(5) The issue will be registered
on'the stock exchanges of Rio and
Sao Paulo;
•
■»..■
:

those.'required

in

States

is prepared
collaboration with

together

with

the

by

in

to

more

directors

publicly

-

to

owned

with at least

one

a

one

represent

stock,

company's

important
relations

bestowed

on

Bank¬

of

Mrs. Theresa

Elliott, Supervisor, Customer Re¬
lations Department, The Bank of.
California, San Francisco, with
announcement of her appointment
as

Chairman of the National Wo¬

men's

Committee

term.

A.I.B.

for

a

one-year

membership

now

numbers 131,000.
Her duties will involve coordi¬

nating

the

activities

of

the

Wo¬

men's Committees

throughout the
nation and disseminating current
information to the national mem¬
bers

in

the

country's 12 districts.
centered; on A.I.B.'s

is

available
women

making'

program,
courses

may

positions.

Z

with

prepare
.

which

,

better

for

V;-/:

:
Prior to i.her present appoint¬
ment, Mrs. .Elliott had served as
National Committee Member for

ter

.

.

public .rownqrship

for

additional,
requiredf{s$

.Additional
or

a

and
the

are

the; Women's

Committee.

A.I.B.

y.-.V/i

:

y

aThis; is the second time that a

Bank

of

later

California

woman

has

received national - distinction M
sharps of an ftie
Americano Institute of Bank¬
a'different class
ing. .Miss Elizabeth Lory of;the

easier

first

of

She has been, a member of
since 1951.
/:
•%;;•.
.

capital

security for a successful com¬
gain quicker public accept¬

than

It
loans

is

also

in

sometimes

the

to

issue

distribute
taken

Bank's Portland Office was ap¬
pointed Women's National Chair¬
man

to

worth

foreign

noting

currencies

in 1956.

.

>/

conditioned

on

that

With Straus, Blosser

are

(Special to The Financial Chronicle)

the

raising of local counterpart
funds,

which is only feasible at times
hy
some form of public sale of

of the

committee;

was

honors of

Institute

market.

together

member

have

es¬

ance

or

Fiscal Council, a sort of
separate
finance* and auditing

can

avail¬

pany,

majority of

elect

exchange

advantage

of

company,

advertise¬

.

stockholders

ing

Appointment
highest

American

Emphasis

the

existing issue,

in the
newspapers, to be
available by the date of issue of
the security;
;

(7) Agreement by

sensi¬

proved competitive \ posiiiori/
Another important factor is

date.

ments

the

a

that might be

United

Deltec

the

public

on

tablishes

(6) A prospectus in the nature
of

be par¬

the

the

pany

in

t-.

govern¬

can

the

of

marketing
implications
of
this
public ownership for the com¬ District 8;i (Northern California,
include a; better recognition Nevada and;.Utah) and as Chair¬
of
its
products, bhd hence im¬ man for the San; Francisco Chap¬

dates

for payment of the
capital
subscriptions will be agreed upon

•

has

with the local press and the
whole
field* of
public
relations.
The

stockholders).

ket conditions;

Gets Nat'l

proceedings,
educational
licenses, t^xes,

of

duties,

ability, and it

in¬

acces¬

Underwriting terms

and

This

important in

procurement

(d) provision for payment of

dividends

identity

tive areas of judicial

dividend equal
the preferred;
1

to
»

the

once

Incidents

mental red tape.

with

in¬

policy for equitable treat¬
have occurred

ment.

be

Brazil¬

kind'of

a

percentage

value Ho

source

becoming identified with

this

par

other

reasonable cost, or any cost
that matter, these firms
by

a

for

where

of

Brazilian

exceed the

One

(b) in the,case of a preferred,
establishment »of a^dividend
a

the
•

the

publicly raised

For

voting

paid if earned;
V.L
:
(c) ' equal participation

'

of

last year.

^

..to

as.

aspects

economy, Deltec will
of capital

surance

,

'the *" International

the
coal
fields of
placed approximately Cr.$3 produced in
billion, the equivalent of US.$50 southern-; West ^Virginia. ;; Bitu¬
minous
coal tonnage, originating
million, worth of securities .with
the public. Each
year the amount along the lines of the company
has

ian

his-

lead-

jng to the enrichment of promot-

.

emphasized tliis underwrit¬
ing and public sale aspect of the and West Virginia: The principal
business, and handled the lion's business of the company is the
share of Jt as a result. ' Deltec transportation of bituminous coal

tal

illiquid and
nature.
Also, indi-

many corporations

resources.
^

of the insurance

survey

# -,

a

it has

narily, and particularly today, the
security is common stock or a fully
participating preferred with the
following characteristics:

s

^

(2)' A

redemp¬

;The Virginian Ry. Co., operates
total of 1,089.36 miles of track
located in the .states of Virginia

Deltec is not alone in the
business in Brazil/but

have

an

one

add,

aptional

.

each case,

and I must

securities

company to establish the terms of
the security to be created.
(Ordi¬

•

peoples must look inHhe,
owing on the
last analysis to their own capital,
ure of

The "first

•

coverage of the company;

invest-

posed to assist with loans on/the-unproductive
government level, but such
fi-, rect investments in shares of comnancing; help can never; prove
panies 'were equated many times
adequate to the needs.
Hence, in the public mind with
losses,
these

Ti aditionally

.

a

to

Modest progress has been made
in the past eight
years,

,

•

and

relatively safe and
potentially profitable venture,
>.
Too
long, savings have been

fi-

.

ing firm which is satisfactory to
Deltec. before entering into
any
firm commitment;
/ ;v; //.

accept the purchase of shares of

under

more

independent account¬

countries

Investment Banking in Brazil

For-

Friendly

somewhat

impor-

classic financial difficulties,

experi-

dragons -for

conditions.

ernments

other

Internal

invariably

directions for answers.

bankers

the

industrialization,

enced, the currency tends to depreciate against the world's more
stable
currencies,
a
spirit
of
nationalism
comes
sharply into
evidence, and a political instability is often noted while the
nation adjusts "to neW
conditions, ?
meets new problems, and turns in
new

in

books by an

leaving Venezuela
(3) A study and inevitably a
iside. It is also possibly the most
revision
in
the
by-laws of the
mportant with the highest rate of

Ipevitably in a society changing
from a raw materials/agricultural
to a combination
industrial/agricultural economy* growing
pain
stresses

well understood in the States and

and

,

causes

to

invariably accepted, by American
at

(growth, ing in Latin

capital, from abroad has been limr

requirements. The

and a capital market. I want
emphasize that this aspect, so

ness

a
public issue: of shares for a
area of Deltec's
activity is the investment banker company: in prazil, we must in¬
sist on the
following conditions:
in the public capital market,
(1) An audit of the company's
In dealing with investment bank-

nourishment, with
only very ' restricted help* avail-*
able at home.- Largely for reasons
in-this

siims

the

;he

financial

inherent

Economic

companies, involves conditions un¬
respective adpalatable to many Latin American
their
capital
businessmen and contrary to years
resources
have
definite
limitaof tradition and common
practice.
tions.; At best, this support will
be insignificant in terms of the
Conditions Imposed
leeds
of
private enterprise in
Accordingly,, it has found that
the respective countries.
!v
in order; to underwrite
or, handle
The fourth source of capital and

developments,':, they have . been
fqrced to look to-foreign sources
for

of

large

ministrations

countries
(with
partial ;, exception)
had no capital markets of a size
capable of supporting these new
,

Bank

velopment, have been loaning in-

in

Argentina

the

case

at

tion prices ranging from 104% to
par, and for the sinking fund at
100%, plus - accrued interest in

Heltec-s Contribution

.

for

redeemable

/'v/

,

-

and

shares.

-

v

CHICAGO, 111.—Costantine page

is now with
.

Straus, Blosser &

Dowell, 39 South

La Salle

Mc¬

Street,

May I say finally from our ex- members of the NeW York and
perience, from :the economic con¬ Midwest
Stock Exchanges.
'"

1

Number 5740

Volume 187
J

.

i.

x-l■

The Commercial and Financial Chronicle

...

'•

.

.

•

v

■

7>.W' 7Jv 7/i/:'-

-7

V

r

:

,

-

1

■

v'J.7v

1 •-'

r

•'

.

f*

V;T7vv J-:./;

•'

*://.'•• >'
J7

-

AlbertHarrisHoitored

Limit Credit to
Shamer's

Mr.

commentary

.'v/Jvy ..tj

Exchange, Inc. Marks
.

By Chicago Bankers

■/>

'

Anniversary

Albert W. Harris, 90,. former
Chairman, President and Director;
of Harris Trust and Savings Bank,'
was honored April 29 at a dinner

Chronicle editorial "As We

on

21

(2077)

v

■■

in the Crystal ballroom of the
Sheraton-Blackstone hotel by 475

See

It," is to advance Prof. Ludwig von Miaes' explanation
of the business cycle which, in a word, would limit credit to
savings and not allow fractional reserves. Writer advocates
government get completely out of the banking business and
restrict itself,to -coining .of money, or issuing of gold certifi¬
cates; that notes issued by banks be exclusively their own
v
'
liability; and currency not be elastic.

Chicago bankers. Mr. Harris, long
as
"the dean of Chicago
bankers," was presented with a
special resolution at the annual
meeting of the Chicago district,
known

Illinois

Bankers

Association.

Presiding at the-dinner
was
R. O. Byerrum, Chairman of the
Editor, Commercial and Financial no government can do the impos¬ of the Board and President, Uni¬
Chronicle:.
sible; that is, apply more goods to versity National Bank, and Presi¬
777
V
In the March .20, 1958, edition investment and consumption than ?' dent of Chicago" i district, Illinois
Association.
J.
Ross.
(No. 5726} of the "Chronicle," you actually exists. Goods and labor Bankers
.

.

are

limited

in quantity, and all Humphreys,:
sound editorial [As
President,
Central
We See It], "The cost of essential that can be done is to alter their National Bank, and Vice-Presi- •
\J dent of the district made
the
/adjustments made in response to employment—malinvest. ^■?';
-such conditions was admittedly
presentation.
,.
,7J7,■ ,•'•. 7,J;
Abjures
Credit-Elastic
; high,' and, if a better way could be
Currency
The resolution presented; to Mr,.
.One of the most conspicuous Harris said:
found for inducing them, - or if"
"To
Albert Wadssay

In

a very

.

t

could devise

someone

a

workable

fallacies very generally accepted: worth Harris, whose entire career!
in- this country is that a good cur¬ has been devoted to the
financial7
rency must be an elastic currency. institution founded by his father,

-

system for ■preventing the rise of
-conditions which made them

nec¬

much the better- but
meanwhile the* adjustment could

Elasticity

the

Harris
Trust' and
Savings
Bank, which he served as Presi¬
not be neglected if depressions so 'much complaint was lodged dent and. Chairman for 27 years,
were to be brought to an end and
against our inelastic national bank and whose long and continuing.
-real progress resumed." :
' *
notes, a great expansion had taken service to his city and nation has
place in demand deposits created earned for him the honored title
Blames Bank Credit Expansion
out of banking credit operations in of
'Dean
of
Chicago Bankers',
"
My^bntaieht concerns the bold excess of savings; The true source Chicago District,,, of the;. Illinois
if ace words.'
' Wondaf
!%hy you of the 1907 banking crisis was
essary,

so

source

of

has always been the
crisis/In 1907 when

.

our

'

-

I arenot.willirf^^

overlooked

tp'accept'theex-

or

concealed.

V;

-

jm;-

tion' and
honor
for; his many
cogently presented by Prof/Lud-" in our currency cannot be reduced actions of banking leadership dur¬
wig von ;Mises in: his " "Theory of without, disastrous consequences. ing critical periods 'of war and
i M o n ey : and ; Credit" l and ' his But we can resolve
not to expand depression, for his wise counsel in
the
establishment 7 of adequate
"Human Action," to the: effect that any further. Even
during the re¬
all booms are due to the expan¬ cent
banking systems and legislation,
"tight money" period, our
for his contribution to the fiscal
sion of money and credit, and the bank
deposits continued to in¬
soundness of the community, for
; depressions are the consequences crease—but at a slower rate. AS
his deep and understanding in¬
of the maladjustments and overyou have pointed out a depression
consumption of the boom period. and readjustment must certainly terest in the city's youth, and for
his example of
integrity; leader¬
.Where there is no expansion of occur, and is unavoidable, if we
ship and respect in the banking
money and credit [newly created are to return to a sound basis for
profession."
■
1
purchasing power based on in¬ future operations. ■ Our Federal

planation of the business cycle

so

*

The present state

of expansion

-

.

.

-

'

struments of

Reserve

debt] the only loans

Board

could

accomplish

possible, are those resulting from this under its present powers; but
somebody's savings. When a per¬ its members appear to be com- '
son saves he refrains from spend¬
mitted to a belief in a managed;
ing, and. ah equal value in goods currency as a sound policy, or dre
is not consumed.. When the sav¬ too pliant under political pressure.
ings are invested, the entrepre¬ The Federal Reserve Board is a
neur gets command
of an equal government institution, and banks
value; in goods, but there is no of, the reserve system are closely
additional'! d e m a n d for goods. controlled, even if they are pri¬
-While-the goods-put to productive vately
owned.
The
only
safe
use
by
the
entrepreneur
will scheme is for the government to
probably be. different from those get out of the banking business
-saved by the investor, there is no altogether, and restrict itself to
r general
increase, in
prices
(or the coining of money, or issuing
wages), but-, only an adjustment gold certificates. The notes issued
,

V. Lee Norwood Co.
e:

■

i

At the ceremonies Exchange president Harold A. Rousselot j
(left) and Jerome Lewine, the Exchange's first President and one.
Of its founders, hold, gavel „that opened .the meeting.
7
-

.

Ar promise to' further increase
trading activity1 in copper,' zinc;
lead, tin, rubber; hides and burlap
highlighted Commemorative ceremonies marking the 25th anniversary of Commodity Exchange,
Inc; (New York) here, on May 1.

Forming NYSE: Firm >
V; I^ee Norwood & Co., mem¬
bers of the New York Stock Ex¬

Nationai Metal Exchahge

-

and,NatiohallRiaw Silk Exchahge
\ver£) merged; -Into orie j The' Ex-

change becanie& Jegai entity just
25- years 1 ago/although $ formar, tradihg. -ih jhe futures-Tde-

liveries V bf

commodities

these

grbiip ofactually istarteHin -theVpresent
metabefs irid guests from other ExcJhane^'s,33road
Speaking

uvoe —

change

before

a

commodity exchanges, banks and
security markets, including the

Street on July 5, 1933. .(Trading
UVburlaP futures w?s inaugurated

New York and American. Stock hv .1,9530. \ 7 i//;,
J/ 7 J"
change, will be forined < as of
change, Inc.
May 15. Partners are V. Lee Nor¬ Exchanges, Harold A. Rousselot, jCom^qdity.
wood, who will acquire an Ex¬ the Exchange, President, noted serves as « a mean^ fqr/hedging
that activity7 in ; Copper futures ivnArfjHnn«? for i
inrnchange membership, and* Edwin S.
had increased over 400%': in the »Pfr?«ons.
Mullett,
general
partners,
and
first quarter of 1958 and that ifducer, consumer'and provides-a
George E. Paulsen, Clarence P.
Browne,
L. Eugene Duff,
and was the "aim of the Exchange to broader market in commodities
Robert
F.
McElheney,
limited apcderate interest for all con— traded on a single floor. lt affords
partners. Mr. Norwood has been tracts now housed in its
trading greater, more :efficient iaciiities
between prices of different com¬ by banks would be exclusively with Merrill Lynch, Pierce, Fenarea >»
for financing rof operations, While
modities r—an adjustment that their own liabilities. Under free ner & Smith, in Columbus, Ohio,
Commodity Exchange was concentrating the..buy Jpd. seU
would never he: great, and prob¬ banking any excesses of the banks and Mr. Mullett has been with the
1
;
founded in 1933 when the Rubber orders froni allsections; of /the
ably there would be no adjust¬ would soon be curbed by the lack firm in Toledo. / 7
ment at all; if the saving is not of public confidence. With such a
Exchange, New York Hide Ex- world in one trading area.
-•abnormal.
large volume of Federal Reserve
//•.
These remarks point to the solu¬ notes outstanding this would re¬
tion. If credit be limited to sav¬ quire that proper provision
be
r.f
7 s -.7
ings, no boom is possible—only a made for their worth as good cur¬
The Comptroller of the State of
York '! IVS'jV.steady rise in the standard of Mv^ rency, but no new bank currency
NEW MILFORD, N. J.—Securi¬
ing as savings, capital investment should have government backing,
ties Trading Corporation has been
will sell at his office at Albany, New York ,J ;
Ji
and
efficiency, increase.
Wages
; As with practically all economic
formed with offices at 312 Jordan
i
would increase as marginal pro¬
problems (and political, too), the Road to engage in a securities
May 13, 1958, at 12 o'clock Noon
ductivity increased, and prices solution lies in personal freedom, business. Officers are Edwin A.
■•*v7'
would also tend to fall, providing with the
(Eastern Daylight Saving Time)
government restricted to Abele, President; Frances Cop¬
that the-savings increased faster the role of
punishing the abusers pola, Vice-President, and Albert
than the population. Under these of liberty. •
;
Lentz, Secretary and Treasurer.
\
tif%
conditions the entrepreneur would
Mr. Abele was formerly manager
GEORGE P. SHAMER
have one less factor to consider in
of the wholesale department for
1 Josepha Avenue
SERIAL BONDS OF THE STATE OF NEW YORK
his plahning for the future—that
L. D. Sherman & Co.
.,
.•........
- v '
'A
':\.1
(if
is, there Would be no> inflation to Parkmerced,' San Francisco, Calif.
>i,
maturing as follows: . ': 1
>yit
^.-,-1
-;'j
complicate his estimates.
' •
.

,

>

•

Securities Trading

-

-

Corp, Formed by Abele

■

New

J

$40,000,000

,

;77

•

•

,

■

'

This leads to

the-caiifee of

our

Edward Herlihy Is Now

current

misery. Banking has al¬
ways been a government [Federal

:. v

With Ghace, Whiteside

(Special fdthe Financial chrtonxcle)

State] controlled institution
BOSTQN; Mass.—Edward Herthe: beginnings of our Re¬
public. The government author¬ lihy has' bbddffi'e associated with North Wabash Avenue.

from

ized the bahks to issue1 notes and
create deposit^ bh the basis of
ffcjl

struments

of J credit;

and thus to

Boston" StOek 'Exchange. Mr. Her¬

never

have trusted such

business

we -

in

expanded

the

media

of

ex¬

'<

(Special to The Financial Chronicle)

BOSTON, Mass,; —7

and

bank

the'

crisis.




For

7.

:
f

;

•

■..«

•

t

is

'r ^

$16,000,000. June 1, 1959-1978
www

$24,000,000 MENTAL HEALTH CONSTRUCTION BQNDS: -'J

maturing $l,600,OOQ

'

:M. P. Rogers Opens

^

11 •'

«
-Brian McFadden has
<

Hubert

with ,'Nelson S.
Company,; 80 Federal Street.

Mathews

^

• ?

'

annuaUy'June

igsO-igTa.^ftciusive. :^

l.

$16,000,000 HIGHWAY CONSTRUCTION BONDS

! J ;/

maturing $800,000 annually June 1,1959-1978, inclusive

3'

Principal and semi-annual interest June 1 and December 1

•

;

payable at the Chase Manhattan Bank, New York City.

Joins Nelson Burbank
..

change [inflated] got into trouble,
experienced

'!•

'

'

f

Ridge Avenue.

Boston.

the government, charters and

the

,

•<!

4$24,000,0007June 1,1959-1973

:

n

BROOKLYN, N. Y.—Martin P.
has
recently
been
with
Draper, Sears & Co. In the past Rogers is engaging in a securities
he conducted his own investment business from offices at 90 Bay

banks, however, if it had not been
bankingJaws and regulations
Which werei supposed to ^make
th£5fe. banksrsafe, So, repeatedly,

,

^

:

lihy

It is easy
popular. Peo¬

for

-•

,

expand the currency.
to see why this was

ple would

,

,

CHICAGO,
111. — Simeon K.
Markman is engaging in a securi¬
ties business from offices at 111

(specials The Financial Chronicle)

and

*

S. K. Markman Opens!

/

•Descriptive circular Will be mailed upon application to''' ,IVjoined the

r

-i

development; -staff: of •. Dis¬
tributors -Group, 7 Inc.,* - 63; ;WaU
Street, -New- York. Qity^ spppsprs
'ok ^rqupv^ecurities,:: Jpcr;; ,'

,•

••.

sales

»

* w

U

i

i» ***+

&•'

•

-t-

:?J-7/:-,7

v

-

:

.

/-i

.

•

"

«.**»

•

-

ARTHUR LEVITT;State Comptroller; Albany 1;

-*■

•*

•

X

^7

*

»«

'

'

1 mm

**

•f';

v?

k

'

•*'

r^.'iV--, \j

"x.-ct
.....

j

5-*:^

* *

-rci}

■■..-•i

N.Yi.it

*.<.

i

■

22

The Commercial and Financial Chronicle

(2078)

Assistant Manager 24. (Number of shares outstand?
Pittsburgh^ Pal A irig-r6,000 shares, par value $100,)
May 1
*
*
*

his position as
Mellon

of

consolidations
new

office

Bankers

and

officers, etc.

revised

years.

of Assistant

job

new branches

will

Trust

Company,

named

appointment

John

of

T.

Vice-President in the

as

was

May

bank's branches in' Brooklyn

of Manhattan m
Mr. DePalma was appointed

Joining
1932

Bank

Branch

a

,

to

vanced

1945 and

Manager

in

Assistant

Treasurer

1942,

in

promoted to Assist¬
ant Vice-President in 1950, con¬
tinuing in that capacity after the
Chase-Manhattan merger in 1955.
Named

dents

Assistant

Vice-Presi¬

Francis

X.

Kosch,
c r ed i t
department;
Maybeck, trust depart¬

were

instalment
Edward B.

ment; and Eugene L. Parker, Jr.,
legal department.
Assistant

New
Oswald

Treasurers

Banz, Raymond T. Bogert, William L. Dahl, William M.
Doran, Jr.; Benjamin W. Hatch,
Philip E. Schwendeman, Henry M.
E.
Thormaftn, and
Edward
W.
Vlasaty. Charles J. Clune was ap¬
pointed an investment officer.

of'the Centra, Bank

and

R.

pointed

has

Ince

ap¬

Vice-President of Guar¬

a

anty Trust Company of New York,
the

bank
announced
on
May 6.
Ince, formerly a Second VicePresident, is officer in charge of
the
Custody
Department
Mr.

-

G.

pa

town
N.

,

,

.

been

Senator

N.

J., increased its

commercial loan aepartmeni.

A/; Smatbers® Ruling No.

George

,

•NMinn^enrHvraBank^C^iandf
National
City
BMk,^ Cleveland,

stock

-

.

have

been

-

March

t n

if

h$l{;
1958,yd

19,

vegetables

frozen

to be

tlgl IlLlilUi til

and

imported

CUX111UUU1 lies,

I

r(

WniCO-v;
n

A

tion:

reported favorably to

(7)

To

make

it

clear

that

ally

transportation of prop-®'

re-- erty by motor vehicle hi Interstate
,n
interstate.):,

^4?^^ (R-, Connecticut) .

stated that the pres-

Mr. Beam

pro¬

O U UCU! Ill IU L ItlU

centiy concluded hearings on the
problems of the Railroads. Senafor Smathers is Chairman of the
Snbcommittee. The other members
arc Senators Frank J.- Lausche
{D., Ohio), Ralph W. Yarborough
(D., Texas), Andrew KBchoeppel
A.
(lXn Kansas), and William

$200,000

officers

107,

Committee. The rec'om- commercial

announced that the bank

ent office.

UIC

,

mentations resulted from the

Plans to start construction soon on

fective

Ulcl I

,

^ on eight specific reeommenda-

.

from
$100,000 to a new office in NortKOlmsted to
by a stock dividend ef-' replace its present off,ce in that
April
21.
(Number of suburb..
:shares outstanding—10,000 shares,".
The new office will be located
par value $20.)
about a half mile east of the pres-

capital

^fll)
>

-

on be-- Bureau of Motor- Carriers; Inters-

interstate and Foreign

on

UAHlHIltfjlCC,

tions

common

Railroad Aid Program

thebank^ ? Commerce, that the Subcommittee agricultural
commodities, which0
r,.
S^ank"'.reached
general agreement April,would be made subject toreguS^I
IV»d limilr'c

-t m

o

r idelitv since lyoo. is in tne oanK s

The Belmar National Bank, Belmar,

1

-+444*9[;■

~—;

half of the Surface Transportation .state Commerce Commission; wittn
■'/Subcommittee of the Senate Com-Jhe exception of frozen fruits
an^-

i«Tn

i QQfi

*

Transportation Subcommittee announces 8-point pro¬
gram they will recommend to full Senate Interstate and Foreign
Committee to alleviate plight of railroad transportation .industry

nlittee

EiUMit,,

:

-

Prpcidpnt

y

iuo

*7 ' " '

'

the.

K;

has

anb0unce«;

•

Y., increased its common capital stock from $500,000
$*An nnn to $650,000
AnA
effective April
il. 23. ^(Number of
shares outstanding -65,000 shares,
par value $10.)

T"

at

office.-}"■■>'<;!$ 10'

£

rvpriv
'

■

head

Senate

Mayer

a

tnhn
"■

a

■

Senate Group's

,

Robert

"

' '1

■

was,former,y diceo

Bank's

Royal

General

delit7"TScompan7rP«ista«h, (»•. Florida) announced,
stock dividend The WaterNational Bank, Watertown,

By

foreign

or

^te

otherwise

excent nri*

commerce

carriage

a

traXoKont:

and

specifically

iSifr

exempt

porating^ into law, the prohihitioiLx.
against

(8)

buv

Y

and

sell

operations*-

P

>

To provide for

^j/

transporta^'.l.u
group of three;

tion

a

policy study
qualified transportation experts to
change Bank, Philadelphia, Pa., outgrown and that
(I •) To establish a piari of; guar- study important matters of trans--,
it was announced by Geoffrey S. much larger office
will - enable " aateemg loans made by com-mer-/ pQrtotion.'tjoliey^aod'report -th'ere-t-i
Smith,
President.
In
addition,-National City to provide greatly cial
lending institutions under 0n within 18 months,
nine members of the bank's staff improved service for its custom-' strict standards
and regulatio ns
Fl,r,i.1.pl.
moted

been

—; 1

Mel-

elected Assistant Treasurer of Fi-

Trust Co.

formerly

——

Marah

of economic research

tor

'

i

Whitiey,

Mr.

loan sec-

,,

institution would be Central Bank

senior officer in the province since
1945
retiring -

General Man-

in Montreal.

his

is
■■

Dr. D. B.

and

.

*

and

^as
been proposed by dir<*tors
bom institutions, ine merger

Five

Louis

in

and

Assistant

as

b£

Trust
1948, after

hal hee^ with

are

S.

Pa.

Vancouver,

Marsh

and

Bank

Trust Company, Great Neck, L. I., W Mr Rmph>r
and the Lynbrook National Bank < ^
J.qar
& Trust Company, Lynbrook, L. I., Jo* Bank

subject to approval by stockholdad- Vs:. The name of the surviving

was

ters in

that bank became the New Kens-

Merger
announced

6 by
George Champion, President. Mr.
DePalma will be in charge of the
York,

as

1930, he was
Assistant
Cashier, of

an

Company,

•

1918

in

In

National

Logan

with which he became associated
in 1948.

lumbia vaffairs. He will assume
his new -duties.: on June>l/
" j
Manager,-in charge of British CoA- F.-McAlpine,-Supervisor for
iumbia branches, with headquar- British Columbia and- the bank's

Bittcher.

A.

Pa.,

Teller.

Assistant

The

Albert

be

Mr. Alter went with the Logan

CAPITALIZATIONS

DePalma

career covering '«■: xhe Royal Bank of Canada anMoving into the nounced ' the appointments of T.
Manager- of . the;( .pt Whitley as Assistant General

banking

a

almost 40

Thursday, May 8, 1953

.

a

'

after

.

Inspector at Toronto, moves into
new position which represents
an expansion in the top administration of the bank's British Co-

Bank,

New Kensington Office on

News About Banks

.

The recommendations are:

ent North Olmsted Office has been

by Girard Trust Corn Ex¬

the

and

new

-

'

,

.

.

^

MfliMinistprpH

,

-

-

fbn

:hv

Tntprctn+r»

v
1 Uriner, WC nave 1 ecommended Wi

^1S

„.

which he has been

.

sociated

since

joining

G?a™tyinn1M:

needed

Friedrich to Corporate Trust Of-

.

ficer.

They

formerly

were

Cor-

._

Tsecond VicISd°ntPHerwas
formerly

Assistant Manager in

an

fhn
FnrnLm
the
Fo
eign Department.
,;t

The

*

First

City

of New York announced

on

urer

May 6

in

ager of

Trust

Department

John

Man-

an-

bough

from the

that
A.

Paulf

F.

Dunsmuir

Bock

have

been

Augustin Snow Hart and Rich1VI.

Paget

have

been elected
Trustees of the United States Trust
Company of New York, according
to

statement

released

by
Benjamin Strong, Chairman of the
<•'

.

!|t

on

its

open

main of-

Avenue of the Americas at

Street

Monday,

on

June

Assistant InJohn D. Rum-

recently transferred
Banking Department to

the Trust Department and
been named Estate Planning

the

who
the

the

^Dorenand
been named Assistant
Operations

Heibeit

Brock

Secretary
T

.

.

is

C.

Gary,

Jr.

National

frnm

the

to

main

of

its common

<R4nn nnn fn

capital stock

Cfinn nnn

W00'^0
to $600,000 effective
(Number of shares out,

Although the bank will operate
its temporary quarters on
41st
Street
through
Thursday,
May 29, throughout the month of
May, Union Dime will be mov-

from
om

^

ing

records

The

move

the

^

its new space.
be completed over

three-day

Memorial

Day

weekend.
^

:;t

,k

:j!

A.

~

August
Savings
New

Ihlefeld,
Banks

York,

President

Trust

announced

was

Director

■

of

of

Vice-President
the

First

and

National

"

Bank and Trast €o" Easton, Pa.

Company,
the

ap-

pointment

Robert

S.

Mohler

has

been

of
John
C.
Mott as
Assistant Vice-President. As
prin-

named

cipal equity investment officer of

tional Bank and Trust Company,!
Pittsburgh, Pa., Frank R. Denton!

the trust

company, Mr.
concerned
largely

be

trust
trust

rnmnnnv'c

company's

Mott will

adviser to the Institutional Investors Mutual
tuai
Fund, Inc.
and

with the other common stock
sei'vices Of the trust cujuipany. nis
company. His
apoointment was effective
May 5,

y °*

1958.

Mr. Mott

was

Fiduciary

Research Officer of
Trust
Company,




Tv/r

of

the
tire

Bank

in

/\1Tf»r comDletincr
mmnlPtind this
tihic?
After

worked

1

ton

.

Mr.

Bodman

will

^Z^a/e'chaTs'^F^he/T
,7

president

'
Thp

Fir„f

*

*

'

4

'

'

*

xT-winn-*!

lot

parLi, I#
P,.eMpd

ita

™
n^nV..
S£T$800OMtosfoSOOObv^he
f,.„m

«onn nnn

!!

wtS
bank's

a

credit

t

1

«

r

a

nrncrrnm
nrnvram

Ho
^

piogram, ne

...

a

fnan

m

,

..

.

.

By

nn

x.

from

the

loan/is

Savings

ec:rj0

cf

InterstatrConm

the

"construction

a

a

deferrals

to

stimulate

rpQ

Drovjde

tax

investment

equipment and other
transportation facilities;
/gx

reserve^

m7an"S""^f obtaini/g

necessary

^

Street, New York City, members
0f the New York Stock Exchange,
its Institutional

in

Department, it H

announced,
Prior to his service with Greenwich Savings Bank Mr Mead had:?/
was

been active in Vo* investment

Sromme^ctal"tanking

sid^f.

for more"
than 20 years, having served with v
the Guaranty Trust Company oL/
York, Continental Bank andf^
Trust Company and the Chemical'J
Bank and Trust Company.
-vmh
New

greater

flexi-

bility iu
in the
fixing ui
of raies,
rates amentii
amend
miuy
uie i.ixuito

j

;

the Interstate Commerce Act, Sec^

,

tion 15(a), by adding a new subparagrapb 3 to read as follows:
"In a proceeding involving com¬
petition with another mode of
transportation, the Commission
in determining whether a rail rate

is lower than
mum

and

a

Ball, Burge Adds
(Special to The Financial Chronicle)

CLEVELAND, Ohio—Frank

m,M,'

Bu/ge

BxckallSes-

movement of the traffic by railroad and not by such other mode
,A,

rp,,

rt+.

W.

is now affiliated with
& Kraus, Union ComRmlflin{?
members of tho
vurv
dnd
Stock
c

Treadway
BaI1

reasonable mini-

rate, shall consider the facts
circumstances^ attending the

Eastman Dillon Adds

_

(Special to The Financial

Chronicle)

ANGELES, Calif. —FredInferslate
Commerce Act enabling the Inter-;rick_C. »FitzGibbon has becomh
LOS

th°SP P™visionsof the

1

g

>.

Commerce-iCommission to affiliated with: Eastman Dillon,
'reraove discrimination against in- Union Securities & Co., 3115 Wil1 terstate or foreign commerce found shire Boulevard. Mr. FitzGibbon
to result from intrastate rates;
was formerly with Dean Witter
<5> To vest the Interstate Com- & Co.
merce Commission with authority
tn

mithnnyp

in

nrnnpr

nasns

thn

,

^

Jr., formerly in-

vestment officer of the Greenwich

Bank in New York in
charge of that institution's invest- ; '
ment portfolio for the last nine
years, has become associated with 'V
outstanding,. Francis 1. du Pont & Co., 1 Wall ;

°LshJ?5-S..°"t?Si?ndr
discontinuance, curtailment or
Dar value $20)
al5col™n"ance. curia meni or
P
* U,) consolidation of unprofitable rail-

...

retired

Francis I. du Poni
James J. Mead

Joins C. W. Geisel

ins—50 000 shares

Program

and

loans

%

J. J. Mead Joins

state

stock dividend the
y a
a stock dividend the comcome
Pr nriLi
ht*
mon
lcapital stock of The National
'
Bank of Fort Sam Houston at San
i!
Antonio, Tex., was increased from
K.
Alter

as

...

i\/m+

the

Training

T

Sale 0f new stock effective April

•

°1949
1949, ,mZr
under

Management

Na-

bank, anbank/an-'

,

Kenry T. BodmanPresiden^ and Chief Administrative OfBcel"
•»r,4^vl?nce
^1SaeV and
pebT^e
J* BarkeJ''
w4ie etec^ed
t0 the bohrd.

of the

Beaver Falls Office of Mellon

with the Vice-Chairman
notixr,-"ounced.
activities
as
innounced.

vestment

the

Assistant Manager

j
value

ley Chairman and Chief Executive
""rr ^llT

Gabriel Scott Brown died April
13.
At the time of his
death, Mr.
Brown

*

30,000 shaies, pai

National Bank of Detroit, De¬
troit, Mich.,, elected Donald F.Val¬

P°rate Trust Apartment has been
"amed Assistant Secretary/

into

will

r

Officer and Assistant In- standing
vestment
Officer,
respectively. $20.)
°liver H- Keller, Jr. of the Cor-

plant and equipment
railroad plant

be established.

No divipaid by a carrier
term for which any

(2) To provide for the establishraent by common carriers sub-

Waukegan, 111.,

April 21.

have

guaranteeing
limitation
of

in

Bank

increased

Jack

and

L Foar,d
of the
Department
been
appointed
Assistant

Lewis, President.

returned

-

ar*' Assistant Treasurer.

B.

1942

stock dividend the Citizens

a

total

^

Strtp^ion^^S

or

be

may

guaranteed

Act

By

tve

,

charges for carrying mail be made

a:
refinance on

Jiiuied by the Congress;

Ernst

R.

Lotvard

.

Yost,

o

authority to guarantee loans
expires Dec. 31, 1960, unless con-

from

Assistant

now

nvnnnrl

The

TreasurersSu^tejd^rf
.the
international depailment m
1952.

m

Ennion

/

Department

William

and
,

have

tr\

char§es be repealed, (b)

operating expenses.

during

in

agency in New

York

finance

on

dends

bank's

Assistant Treasurers. In the Con- 1928 to
sumer Credit Department George when- he

tint

betterments; to provide funds for
expenses, working capital and interest on existing obli¬
gations. A limit of $700,000,000 is

for

Ernst,
joined

bank

oro

authority
with
a
$150,000,000 on guaranteed

1921, served in

.

John K. Shuster, Jr. and James
Stewart, III, both of the Banking
Department, have been appointed

2,*

/,pril 30

t
J.
Wilbur

bank's

Mr.

has

to
^

placed

operations.

Of-

ficer.

,

international

was

the

new

from

vestment Officers.

l{£

Union Dime Savings Bank, New

York, will

Officers

none

operating

the

„

and.

time, the bank

same

;

40th

the

ordinarv

and construction
of
equipment and other, additions or

Assistant
General

the

named

•

1'ice

Treas-

of

William

ard

Assistant

in the Banking Department.

through

acquisition

an

bank, remaining in charge

been

appointed Assistant Cashiers.

;

from

appointed

ment

have

Vice-Presidents.

nounced

r

used
£ Canada
international department, SJ
has
been

v

They
formerly Assistant Cashiers,

Hamilton

At

^l

n

unrnnH

-

_

funds

huinmercia1 channels. The guar-

Ernst,7 Superintend-

Louis Moock and Edna M. Thompson have been advanced to Invest-

Assistant
were

CeoffrPv

GeollLey D. Finley has
been promoted to Assistant Vice-

Bank

that Daniel G. Amend and Samuel
W.

^eTv
lively.

President

^

National

R.

Edward

$300,000 to $600,000 effective April

road services

and

facilities bur-

(Special to The Financial

LOS

^

Chronicle)

ANGELES, Cal.—G.

Rob- .;^

ert Mecke
Mecke has
has become
become associated.
associai^
(6) To limit the scope aAd ap- with C. W. Geisel & Co., 618 South
plication of the agricultural com- Spring Street, members of th
modities clause of the Interstate Pacific Coast Stock Exchange.

dening interstate

commerce;

Commerce Act in accordance with

ert

was

formerly with Pledger

^

& CO*

•^■•lume 187

Number 5740 ...The Commercial

and Financial Chronicle

(2079)
v

f.u

i

into

:©;u.

s'ihiu-

Jinis.

-Jiif)'-

Co-

;sume
»r

Doing
Under Easy Money Policies?

'

;sents
i

1954

How Are Banks

|;^ell known banking

expert .explains why banks,

in

since
lirec-

:&V

on savin?s interest rate. '

■

li > ;,i

Bank and Insurance Stocks

Trend?

dips,

major statistics
the

cut

a

Today's

the Standard Financial
survey de¬
cided to examine the trend of ac¬
counts receivable loans last
year,
and
today.
A composite of the

many

years;

About

In the light of this limited data
from two postwar business

their

attempts to maintain earnings, face their greatest test in
Believes public would understand the
logic of

.

What

V

for

ank's

instances, anticipated the up¬
by two months.

turn in business

By MORRIS A. SCHAPIRO*
President, M.A. Schapiro & €o.,
Inc., New York City

V-: Hi

;

current

started
dle of

v//.

indicates that

now

business

downturn

approximately in the mid¬
May, 1957.

By ARTHUR B. WALLACE

This Week
One

the-

Although
or the nation

-long-term outlook
banks

s

is

versely
to,

ri;/

d e r

n

t h

.

e

of the

ence

rate of

interest rates,,
md ^built-in"

nt^tq
witftr 1

tigh costs.
Despite the
irogress.
o f

L

j a

'hld^'y^l
nlji-t

"nr.

airs ion

pri*

o-

ition

d

of
Morris A.

janking

state.,o

ex-

serv¬

| ices during the
ndwarA;vmTc

inevitahlv

cosTs

Wgher unit

n

The

it, is.it]
icorio.jv,
itiop v..

in

ions*;- I

VV'vrJ

)rta«;U;|
hree

New

resulted

of operation

large

even

rators

Schapiro

.93% for 1951 to 1.48% in 1957.

)

|

'ans-,

.ere-J

this

total

of

is offset

loans

and

by

rising

a

ition-

;

ngeiv-1
the

i:,f

*From

talk

by Mr. Schapiro before
Providence Chapter of the American In¬
stitute of • Banking,
Providence, R. I.,
April 23, 1958.
' •]• •
a

.

.

lade

Jj

nice

Business

in

from

to protect
destructive

y;

y;

fire-casualty insurance companies is to have, possibly,

r

;

-

at

•

that

~

'
I (business activity will start upward
iy' (about June 15, 1958, if commer¬
dth»? cial loans today are as accurate a

iJSt-

forecast of
busmess
ac¬

ige,;f|
•

j

where

savings

the

proportion

deposits"-is

Now

high.

T

war.,

rate, the logic of

paid

on

month

the week

■aSt

ide %

1948

are^'"

1953

ith

The

of.it
nd>;

I tion

r

i

cycle

'•,''•'13

ness

managements

do

can

If;

i->
th

;if,

n-

and

no

less.

:

the

accounts

10

did

busi¬
Silbert

Theodore

-v.

.

finance companies in the major
wties of the nation in the last 10

Corporation",
Relation

and

Between

Finance

Trend of Such Financing-

n

l*he

rr

asked

survey

mercial
finance
tabulate

the

51

,*a
.; ♦

to

companies

to

business

corporations
during the last'two downturns in
the business
cycle, to see whether

such; loans anticipated the busifiesP' cycle, or merely followed it.
vyhile commercial finance com¬

panies handle
<■£' '

.

a

should

be

evident

we

add—the

may

industry is faced with

really

a

serious

surplus funds in

some cases. If this condition prevails much
longer
likely to witness some "shotgun" mergers. There have al¬
ready been a number of mergers, but few have been forced. Rather
they have been made with an eye to,reducing operating expenses,
or, possibly, to cut taxes.
/
we

are

.

.

However that may be, the

1957 joss and

expense

ratios

were

unusually high with the exception of compensation and
miscellaneous liability; and these were not far below the line. For
the years 1953 through 1957 there are
presented the loss and ex¬
pense ratios, combined,- of the
categories that account for the
greatest part of the industry volume. It is to be noted that some
of

the smaller

such

lines turned in

excellent

showings in most cases,

in fidelity and surety coverages.

as

The best evidence of this

is the

underwriting exhibits of such companies
and Fidelity & Deposit.

•

Piro

Ocean

as

Seaboard Surety

Loss and Expense Ratios*
1953

i

—-.'-.L—1:—

1954

92.5%

Coverage

91.5%

.

115.9

143.2

90.4

83.6

Marine

••••.>

1955

1956

1957

94.2%

Average

100.7%

101.3%

114.5

107.4

105.0

88.4

101.0

104.0

•

96.0%
116.3
94.0

•

Inland Marine™

90.8

95.9

99.6

104.7

104.7

99.5

Miscellaneous Liability—
Workmen's Compensation

97.5

96.9 V

96.3

94.9

'99.5

97.0

93.8

90.0

93.0

93.7

97.1

91:7

Auto Property Damage^
Auto Physical Damage

93.7

88.7 v

92.7

100.8

87.4

84.3

97.3

99.5

Auto Bodily

97.8

97.5

Injury Liability

^Losses

loss

and

adjustment

■

expenses

.

r"
*

of

<

105.3
*'

109.8 ■*

earned:

96.6

102.5

92.2

116.0

lOo^G

underwriting

•,

.

r

Itiwill be noted that these data

..

ber

103.1

premiums

to

penses to premiums written.

derived from

are

a

sizable

ex-

..•••.
num¬

important groups.

In other words, it does not reflect the
results of the industry as a whole, but rather a number of fleets
that not only are representative of the industry, but that do a
large proportion of the total business done.
^

that .in

Both

dips
occurred

II:; the

down

the

first

general busi¬
down from its

cycle started

business statistics lag,

the dip
until'later.)

Italian

whole

variety of

.




..

Republic

Charles

W.

.

of

appreciation

Italy as a sign of
his contribution

development of ItalianAmerican banking relations and
the strengthening of friendly re¬
lations between the two countries.
Associated with the bank for
25

Mr. Brugger has

years,

vised

its

other

European

business

The

busihess
In

ness

trend

activity had started

the second

three

the

did

loans
months

activity

not

after

had

decline

general

made by

Salzano,

begun

Ga.

W.

S.

Joins R. S. Dickson

Ackermann is
R.

S.

111.

—

now

Dickson

&

Richard

J.

affiliated with

Co.,

Inc.,

135

South La Salle Street.

(Special to The Financial Chronicle)

BOSTON, Mass.—Earl W. Sleeth

rise in June, 1954, or two months
before the general business trend

has

had started up.

ton, Moss & Co., 24 Federal Street.

-•

In

short,

the

rise

in

in both

accounts
1949

and

increase of about 32%.

He

become

was

Weld

&

connected with Pres¬

formerly,
Co.

We

suppose

that the companies are using deductibles; but it

now

mains

hazardous line with the possibility of hurricanes and with

a

re¬

ever-present tornado.
same

be said about ocean marine

can

It also is in

about fire.

though not to

a

that has been said

rising trend; and ditto inland navigation.

liability has shown black in all five

degree that exactly cheers management.

a

years,

al¬

Compen¬

sation, too, has been profitable, and on an increasing volume of

a

large line, has not done badly

Auto bodily
last

three

with

White,

Auto physical

on average,

but its trend

This has been true too of auto property damage.

injury not only has

years

registered

an

unfavorable trend, but in the

pronounced

losses,

the

1957

under¬

writing loss margin being 16%.

AND

OVERSEAS

GRINDLAYS

13 NEW YORK

LIMITED

BANK

CITY BANKS

Alrmlgptnating National Dank of India Ltd.
and

Grind/ays Bank Ltd.

First Quarter

Head Office:

LONDON, E.C.2

Earnings Comparison

London Branches:

which

receivable loans

an

column,

26 B1SHOPSGATE,

With Preston, Moss

to

$366 million,

day extended coverage will be brought into the profit

NATIONAL

slip.

loans started

comfort to the companies.

no

growing line of writings; just in this period

(Special to The Financial Chronicle)

on the business upgrade
started August, 1954,
ac¬

receivable

to

some

is unfavorable.

—

However,
counts

that

damage,

Fidelity

busi¬

to

a

since 1954, both 1956 and 1957,

writings.

with First

CHICAGO,

for

one

writings of the companies covered have advanced from $277

million

Miscellaneous

Raymond B.
Fidelity Se¬
curities Corporation, 11 Pryor St.,

up.

(July, 1953,
commercial fi¬

net

improving

of the five, add

The hete noir has been the motor vehicle lines.

of

slide

an

And this has been

The

approximately

or

before

August,- 1954),

was

mainly responsible for this figure.

super¬

Italy.

With First

receivable loans started to rise in

1949,

its trend has been

the best two years

countries.

Consul General of

fair underwriting

a

Extended coverage continues to turn in a bad showing., While

the

Italy and

Baron Carlo de Ferrariis

Kellett is

the business

months

with

presentation

only 96.0%, leaving

that the two earliest years were

over

(Special to The Financial Chronicle)

uptrend, which
October, 1949 (and was
evident until later), accounts

two

to

the

to

was

started in

August,

awarded

for

ATLANTA,

not

was

Brugger,

retiring
Vice-President
of
Irving
Trust
Company, by the president of the

.

Loans Started Up Earlier
On

the five-year average is

rising trend since 1954, and, while

profit margin for this aggregation of groups, it is to be emphasized

business

accounts receivable loans
not dip
until approximately

not evident

The fire line has been in a

decoration of Knight Offi¬
the Order of Merit of the

of

Republic
business

•

1949, and the second slide
July, 1953 to August, 1954.

nance

com¬

their accounts receivable

loans

cer

peak in November, 1948. (Because

to

l-

loans

.

(November, 1948 to October,

ness

.

af

two

Order of Merit

2.7 months after the

Company
Loans and the Business
Cycle." It
Mas released April 29, 1958 by
fngodore H. Silbert, President of
Mapdard Financial.
'

1-

by

Brugger Receives
.

1949),

51 commercial

Commercial

the

business upturn should
be
under way.
This places the
turning point at about June 15,
1958. With the lag' in business sta¬

this

insurance

And, on top of thisj the supervisory authorities come up with
niggardly rate adjustments, or none, at all in some States, as in
New York, and the carriers are faced with a serious drain on

general

tistics,

.

slide

Financial
entitled "The

re¬

preceded

receivable

the

mostly

.

upturn

for

problem.

receivable loans

previous

.

dicate

in

ard

business

offsets

underwriting years. But when practically all major lines crowd in
and give the companies a bad time—and not
merely for a single

Extended

had

comforting

were

To be sure, the extended coverage losses were of such
magni¬
tude that they pulled down what would have been
quite favorable

ii

loans

general

,

The composite data from the 51
commercial finance companies in¬

The financial resources of
these companies total
$600,000,000.
The survey was made by Stand¬

clC

August, 1957.

months, the favorable showing of

a

years.

he

drop

lessened,

companies in the survey

finance

;

receivable
loans were selected for study be¬
cause such loans are used by busi¬
nesses solely for constructive pur¬
poses
of
expanding production

from

predic-

of

month

of

about August.

financing^k. accounts

tober,

loans by

the

during
/the week of April 14, 1958, would
Bank indicate that within
two months

implications of easy money.

54.

of

until

Since, in the past two business
slides, an upturn in commercial

lic is realistic and understands the

cycle from November, 1948 to Oc¬

business: by
I June 15, is
based on the

>/t

v

49

com¬

Some of the 51 commercial fi¬
nance

men's compensation
companies.

•:,;

cut in the rate

a

examined. T
after; World
War

of

upturn

if

cat f of
%

-

-

51

April 14, 1958,
upturn for the first

an

since

to

piling up such severe losses in extended coverage in 1953,
1954 and 1955, straight
fire, ocean marine, auto physical and work¬

has stopped.

savings is clear. The pub¬

were

two

dips

decline

until

time

that, banks have announced

Two

was

| in the

to

from

showed

of
-

and sales.

previous post¬

311-

the

/week of April 14, 1958. The

their second reduction in the prime

such

financing

of

were

year,

Continued monetary ease calls ported a pickup in loans prior to
for/lower interest rates paid on April >14, and some companies in
the survey reported the decline
savings deposits. Meanwhile individual banks must realistically re- was still continuing. But the 51
late the rate they .pay to the rate company composite for the week
of April 14, shows that the
drop
they? earn. ./This
is - especially

about June 15.

general

ine

as

de¬

1958

loans

continued

-

,

,

as a reliable lead indicator then,
according
findings, business upturn's turning point should

,-fl

tivity

loans

mercial finance companies started
to decline in
August, 1957, they

The

iers

such

1953-54

7

In

rich
are

of

and

Accounts Receivable Loans

receivable

serve

occur

Indications

1948-49

few lines act up for several
years, but for the others to balance
off the unsatisfactory ones and thus leave the
company or industry
with a fair showing for the period. Thus when the hurricanes
a

,

y

in

was

What about accounts receivable
loans today?
While the accounts

interest rates earned. Otherwise' " wil1- in effect> be encour-

finance companies' accounts

-to Mr. Silbert's

in-

trend

v

y

Upturn in Mid-June Indicated by

If commercial

ni

the

,7

sav¬

Commercial Loan Trend
continue to

in the

This

clines.

lore

lent

51

closely

as to

investments.

idedsEl Nevertheless, under easier money,
is of
ii I bank earning power will be adand..,

the

started to dip

August, 1957.

parallels the

authority carries with •; it
a
continuing responsibility. In De¬
cember, 1956, the Board raised the
ceiling on the savings rate from
iy%% to 3%. To be realisitic, the
Board's monetary policies should
apply to interest rates paid as well

rowing the profit margins of com
urgent
Imercial banks. In many banks, of
course,

of

companies in

about three months after the boom
had reached its peak. This

Impostop-b™mvise lendi"S alld investi"S i

TWdinW
are narriarDeclining interest
interest rates
rates aie

ts to

including

done

was

banks

York

City, have
xperienced an increase in the
ritical yields on loans and investlents required to break even, from

customers
finance

survey,

middle of

Such

field of "elec¬

(ij

>rop-,<&;

This

competition,

files in the-

the great

deposits,

member

tronic* 1 a b-or,"

p\

all

ings.

business

loans

interest that may be paid

time

on

accounts ; receivable

commercial

face- their this

,

of lower

tions

:

the Federal Reserve Board has
the
power to regulate the maximum

present condi¬

1958,^

earnings,

Payment of-interest on demand
deposits is, :.of course, .prohibited
by the Banking Act of 1933,' but

juate earnings

-Tfoi:

maintain

greatest test,in many years.

lity.of main¬
lining ade->Z

to

favorable, Bank managements, in their effort

1e,most pressing problem facing
anagenients today is the neces-

T-

/ The

affectldiby Inflexible costs,

Insurance Stocks

—

of bringing out clearly the impact of the various
principal lines of writings on company loss and expense ratios is
to go back for five years for each
category. It will be recalled that
we have pointed out on several occasions
that the normal experi¬
way

"

t

23

13 ST. JAMES'S
54 PARLIAMENT

SQUARE, S.W.I
STREET, S.W.I

Bankers to the Government in
uganda, zanzibar

: aden,

Kenya,

somaliland protectorate

Laird, Bissell & Meeds
Members New York Stock Exchange
Members American

120 BROADWAY,
Branches in:
india, pakistan, ceylon, burma, kenya,

Bell

tanganyika, zanzibar, uganda,
aden, somaliland protectorate,
northern and southern rhodesia.

Stock

Exchange

NEW YORK 5,

N

V.

Telephone: BArclay 7-3500

(L.

A.

Teletype—NY

Gibbs,

Manager

1-1248-49

Trading Deiu »

Specialists in Bank Stocks

4V
24

The Commercial and Financial

(2080)

Continued jrom page

units within the

9

ical

industry

Relatives Growing Closer?

said

other

Our

different routes.
the

soundest.

and

serving similar human

It

will

race

will

also

go

to

go

to

ucts, adding more value by manuso that the increasing cost

boldest—especially to the bold in
thought and imagination. He will

proportionately in a youthful country. If every
less important. In doing so, how- investment dollar were considered
ever, he finds the increasing cost against the return the same dollar
of plant and operating labor gets might gain in some other industry
to be still more of a problem; he —say an oil well—in a country
also' finds
that,
just
as
with like Canada, the chemical industry
gasoline, his products tend to be might never have got started. As
more performance-type chemicals
a matter
of fact, I think the
will

feed

of

his ;

and

be

backing and filling in an
attempt
speculative element which had bought Treasury
securities because of tne uncertainty in the equity market.
Along
with hns, there is a certain amount of "professional operations"
whicn tends to give t.e market a narrow, inactive and
cautious
appearance. There is no question but what the rise in quotations

problems

marketing

Canadian oil industry too is findt easily

multiply. He is a long way from ing a young man doesn
the original basis of petrochemical f command the income of
success.

uncle!

-

his old

siecle,
humain,

prodiges,
chose

des

pour

de leur nombre, et

gi0ire, du

siecle

As

I

have

said

careless,

tion of the same hard work, foreMay future historians write of
sight, ; and acceptance of risk, us as Voltaire did of the age of
which has been characteristic of Louis XIV — "All branches of
the oil, Chemical and many other science and literature were util£reat industries under the private -ized in this century, and so many

catch the

to

thic

nil

the

lmwpvpr

v,etrnie,im^^hemienl^h^iXtrv
tn
llvf Ld to

Wnirt

has

erow

Fitrnrp*

on

difficult

to

it<- sire

be

to

tend

by, even under

come

supply.

another

one

follow

'oil

the

business

fidence.

is

it

for

possible to

through

with

oil

the

considerable

con-

Still, I think it is likely

that well

over

1% of the oil barrel

finds its way into petrochemicals
in the U. S.A., a figure probably
50 times the fraction

prevailing a
quarter century ago. Moreover,
since advanced petroleum chemical operations offer a considerable degree of upgrading, both of
their petroleum and of their non-

petroleum feeds, and so turn out
products selling for several times
the cost of

combined feed, it

the

is evident that in the U. S. A., the

petrochemical industry represents
something of significance in that
country's economy.

to reach sizable proportions.
In the first place, there

Looks at Canadian Position

>

We

might

moment

digress

for

here

consider

and

ful

where

a

we

stand in Canada in this field. Our

leap

from

the

a success-

solid

base

of

f^^diii^o^rrehaWe marked

than
landing ot a reliable market than

a

who

man

owns

cotton field

a

enjoy these chemicals can overnight start up a successful
nearly on a par with their U. S. textile business. He needs a deep
counterparts. For instance in the
soap and synthetic detergent in- market he hopes to help supply.
dustry, where syndets—until rePossibly after some of the more
cently — were made in Canada pessimistic passages of the foregofrom imported petrochemicals — ing, you will say my first name
1956 was the year in which - the should be Jeremiah. Maybe
you'll
poundage of synthetic detergents say it's "Thus Far And No Furexceeded the poundage of soap, ther" for our chemical division.
This 50% point had been passed in Or maybe that I'm trying to scare
the U. S.-only: thrive years
earlier;off newcomers to an already
consumers

ELes toteln^mmly1'

—in 1953.

rather crowded party.

.

•

The
per-capita
petrochemicals, in

production
of
I hope not —• because none of
Canada, how- J*hese things is my intention. Our
lags the U. S. by something.chemical* division, .in
relative
more like 10 years, and the dollar
terms, is the fastest moving of any
of invested petrochemical capital part of, our
company, and in a
in Canada.is turning out perhaps country like ours will continue to
a
half dollar, of annual, sales as be. And as to the crowded
party,
compared with around a dollar in I think it is refreshing and healthy
ever,

the

U.

S. A. These estimates,
necessarily very rough, do

while

t

show that

Canada,
Canadian
dant

we

have

caused

by

market

situation in

a

the

and

smaller

the

abun-

supply of material from large

American facilities, which did not

—even if my board may have some
understandable misgivings—when
two companies announce that they

both

building, detergent
alkylate plants, each capable of
supplying
the
total
Canadian
market! Certainly it's healthy for
are

the soapers.

south, and which makes it
over-simplification simply to

an

as-

^ our development here

will follow

U.

S.

A.

Willy-nilly, along the

path with

given

a

*a£*

time

'

'

Don't imagine from
anything I
have said that petrochemicals are

in their formative period. I think

They
may
u.n„„
/>
j
happier feedstock

have
.

_

situation, but
they did not

on

struggle

The

for

i

and

the

have

chemical skills.
hard

had

marketing
other

hand

1958-model
result

those




a
-

was

a

pioneers,

Tr,inr30';

that the

will
go,
not necessarily
fleetest, but, because it is
,

Good

Effective"Use
jn Selling

senior

Liquidation by Foreigners Not Important

tion

^odv & c0
D-

"obligations, which

«MV>

,

ni

has

Monev

ket,

Wm

ary

t

4*1

•'

to
a

offering will have

has'

Til

—

been

the

Salle

because

hard,

not

only

amongst

Oi'Ub'V.M

•

.

M1

■

Forms C. M. McCammon

(Special to The Fi&anciaj.
Chronicle)

Street.

Paine, Webber Adds

;

KANSAS

2

Paine, Webber, Jackson
Curtis, 24 Federal Street.

a. ers 1S en§agiag imavsecurities

business from

offices ,at] 399

C^ uenU?Investments.
Under thG firm
of Walters

Three With
With Patterson, Copeland
rmrArn
,

tu

r^nn

a

raiw

Ri^to'

name firm

name

CHICAGO, IlL~I^on A. Taber

E.

and

M.

officesdn

the
McCammon
under:

Joins D. B, Fisher

An¬

Dou¬

glas P. Jones have joined the staff

son, Copeland & Kendall, Inc., 231

of

South La Salle Street.

900 South Pearl Street.

Investment

of C.

(Special to The Financial

has become affiliated with Patter-

Hathaway

Building,

q0

Hathaway

DENVER, Colo.—James

Mo.—Clarence
;ijr a

securities- business, from

(Special to The Financial
Chronicle)

drews, Boyd R. Bohrer

CITY;

McCammon is-engaging

Lin-;the

&

the

competi-

' '

.

long-

the

.

Forms Walters Inv.

race,
to
the
soundest.
*(Special
to The Financial Chronicle)

work

markkas looking toward the June refunding operation.

'

V

thp

(Special to The Financial Chronicle)

could

refunding operation were taken care of entirely by commercial
Therefore, it is with not some feeling of minor concern that

the money

ORANGE, N. J/.r?-'Lucille

.

long-term issue which

banks.
-v

Co^SoSh
La

or

halting securities would be put to work in Government securities.
The problem of deflation would not
be as effectively attacked as if

"

tn

intermediate

attractive to others than the
deposit banks. This means that
money which should be going into
mortgages and other .depression

a

aridpH

an

be

•

-

CHICAGO

Market Fearful of June Refunding Package

In spite of the opinions that the
impending refunding opera¬
tion should be purely a commercial bank
job, reports are going
around the financial district that the
Treasury in its package

en< J*
1S
Chairman of the Bond Club Stock
exchange Committee,
n
t i
* V«
*■'' '*+
Reynolds Adds to Staff
'

and one
Govern¬

w*

,

(Special to the financial chronicle)

By

of the

refunding issues going into the
banks, an attempt will be made to offset the deflation¬
effects of the liquidation of loans. It is *tp the advantage of

:;

,
*

•

wbere tae outing

Randall

tie-in between

the economy to have the
money supply on the offensive
of the ways in which this can be done is
by having the
ment sell its securities to the
deposit banks. *'-- * J :

leading m the shares will take
Place Juijc « a* Sleepy Hollow

'

a

commercial

Club of New York's annual
is making its 1958 of-

t-

If there is

ties will be tailored to meet the needs of the commercial banks.

having the bulk if not all

Offering

-tiu

in which there will be ample credit and at rates that will

Treasury and the monetary authorities on debt management
policy, and many people in the financial district most certainly
hope there is, then the refunding obligations for the June maturi¬

Exchange,
which operates a bull market once
a year in conriection with the

t

one

the

Inc

Annul

t

and the turn on the upside has been made.

course

be to the satisfaction of all concerned.

The Bond Club Stock

w1a1t

its

is evident to them that the coming
refunding operation which is to
take care of the June maturities will find a
receptive money mar¬

BomI Ctak of N. Y.

~

run

Good:

r,ntman

'

Wilding Prod

i 5
v.2%*'

steadily absorbed by the large

very

of Research MaResearch

f

being

that are interested in building up their nearliquid position.
1
'
Some exchanges from Government securities
into common
stock are still being made but in spite of the favorable market
action of equities these switches are also not
expected to be very
important as long as there are no positive signs that the recession

"Active Ease" Money Policy Assured

'

.

are

commercial banks
term

Uskali-Director of Creative Flam

chemical

is

on but this is not expected to amount to a great deal. Also,
the bulk of the issues being sold by these people are short-term

going

The money market is going to stay on the side of "active ease"
in the opinion of not a few important
money market specialists. It

Walter

Analyst

v--

are

The sale of American Government securities by foreigners, in
order to get higher returns on the other side of the water, is still

Tory-n'o^n

+er;ai

com¬

Mutual

with

race

engineering will
play a very important role. So will
the development man. It will be

hard

t

Sell

with minor

Also, the yield spread between Government securities and
non-Treasury issues has narrowed considerably so that one of the
prime reasons for the sale of Treasury issues and the reinvestment
of the proceeds in corporate or tax-free obligations is
being
steadily dissipated.

BOSTON, Mass. — Donald W.
Blodgett
has
become
affiliated

Race Goes to the Soundest
I do say however

distance

tj

to

;

'

.

able in corporate issues or the tax-exempt securities.

Hare's Ltd*

any
sort of a skeleton in the
closet. Not even the one who said
if he had any guts he would
get

One

not.

Profitable

^

j,.,

the hell out of there!

wonders, however, if our
problems are really different, in
basic principle, from those confronting our American colleagues

14

Is

lely on

;

Government issues have bought them at levels which -still gives
them a yield that is more favorable than those which are obtain¬

"Operation Upturn"

moie

•

certain institutional buyers of
securities who can buy only United States Government obligations.
In the second place, other institutional purchasers of United States

synthetic rubber, insecti- account of their number, but the
cides, etc.) are largely performance glory of their age is all the
chemicals—are these relatives in greater."
fact getting closer? In this sense
of performance, yes; however,
Customers' Brokers
there are some important differences. God knows the manufacturing and marketing know-how
On May 13, 1958, at Schwartz's
°f the oil refiner has to be
complex indeed — dealing as he Restaurant at 3:45 p.m., 55 Broad
does with products as diverse as Street, Third Floor, the Cushigh-test aviation gasoline through tomers' Brokers Association will
lubricants to asphalt and paraffin unveil its approach to "Improving
wax. Nevertheless
it pales by Your Income." Three well qualicomparison with the complexity fled speakers will discuss subjects
which faces the petroleum chemi- which should provide at least one
ca* ™an- The latter has a foot in new idea to everyone attending.
a thousand markets
and must The subjects and speakers will be
know each one intimately to sue- as follows:
™

.'

- •

the .proceeds being reinvested in these non-Government
obligations. In spite of the yield spread in favor of the corporate
and tax-exempt issues, it is not expected that the exchanges.from
Treasury securities into the non-Government obligations is going

gents,

one can no

^

.♦

.

with

definition; and it is harder yet
v,
the portion that actually
from oil. Here, I would
observe parenthetically; our rela- today's more complicated;petro- ages, were now lost in the crowd.
tives are departing radically from chemicals (plastics, resins, deter- Their individual glory is slight on
my

y

petition from the new offerings of corporate and tax-free obliga¬
tions, The yields which are available in the latter two types of
securities is resulting in moderate sized sales of Treasury
issues,

contributed to extend the enlightRPiattVM rvttimr rin^r^
+£n?
the J\ur£an sl?ir
at
. -Relatives Getting Closer?
those who would have been acGranted that, like gasoline, counted t marvellous 111 former

comes

'

....

The Government list continues to be faced

enterprise system.

to trace

•

Treasuries Competing With Other Investments

in

before

They will, however, be solved understand my massacre of the
here as elsewhere by the applica- French language, I will translate,

wit*,

.

plus

est

en

grande »

petroleum chemical business today. And there is no safety net
underneath

•
'}?
market policy of the monetary authorities
of "active ease" which is more than likelv to
get easier. It is the belief in most quarters of the financial district
that as long as the recession shows no signs of abating there will
be favorable money measures taken by the powers that be to make
credit easier, interest rates lower and to increase the
-money

The current money

d'autres

en

One will not find the answer to Montreal, for those of you who
such -problems in., a handbook, are not .sufficiently civilized to

walking

specialists.-

Leur
cause

a

qui,

passes

rapid, and this in itself is
enough for some kind of technical reaction which is about
have been having, in the opinion of most money
market

we

is being termed one

orit ete confondus dans
gloire est peu de

f0ule.

ja

•

-

que ceux

auraient

temps,
ja

what

ce

of
this
manydimensional't i g h t r o p e is the

The

of Government securities has been very

et
tant
d'ecrivains
ont
les lumieres
de l'esprit

etendu

out the

shake

reason

^is language. "Tous les genres de

Rtterature ont ete epuises dans

Governments

on

The Government market is

to

be accepted in the eayy of the late 17th Century. Because
of such a youthful industry we are jn Quebec, I will say* it in

must
years

Thursday, May 8, 1953

.

By JOHN T. CHIPPENDALE, JR.

this and, I will wager, many years of forge ahead who can leap over
street.
financial soul-searching and ot tradition and the preconceived.
Second, he has increased the operations at low sales-investment Then some future historian will
complexity of many of his prod- ratios. Indeed such a condition wrjte of him what Voltaire wrote
facture

Reporter

the
the

is, however, an end to

There

.

petroleum chem¬
whole

a

as

via

needs
I

.

industry, but also between the

industries

Oils and Chemicals: Close

Chronicle

Corp.,

DETROIT,
Land
D.

B.

has

become

Fisher

Chronicle)

Mich.—Lee

Co.,

Buhl

members of the Detroit

change.

S. De-

affiliated

Building,
Stock Ex

Number 5740

VoIuhh? 187

The Commercial

..

.

and Financial Chronicle

(2081)
•

•

•

:

ADVERTISEMENT
ADVERTISEMENT

;

J

J:*

•

ADVERTISEMENT

SIXTY-FIRST ANNUAL REPORT
REPORT

-

OF

■ti ■■ -

I

)
*

!

ri<

:

1

V

.

OF
:

DIRECTORS

CONDENSED STATEMENT OF INCOME

■

r >

;

/
.•v

•

.

'

.

Vy.:

"

"

••

:.

" 1937a

•:

—...—....

.^7/:-.. ,v.

-■

•.

i

oil and gas

■iV.:

other

operations).

73,689,677

•

-

Increase ( +)

-'■
s

(excluding income taxes)

.29,097,113

The

-f-$2,-743,274

73;538,270" >

151,407

22,386,6721

188,988

—

15,383,756

26,603,162
15,380,910

$ 83,298,893

$ 84,121^34

—$: 822,341'

$

4,520,711
530,406

$

—£

$

' 5,051,117

$

5,552^89

—$

501,272

$

78^4^776

$ 78,568,843

—$

321,069

Ail other income--

Total

income

1

______

Net income'from all

>

sources

;
>

4;678,07l

+

2,493,951

+

2,846

-

882,818

—

decline

in Express, revenue

due

was

to

a

decrease

in

less-than-carload

$

part of the year.

*

v

,

.

....

..

;

.

:

•

largely in receipts from dining and buffet
cars,.due to-fewer passengers carried, and-from boarding outfits operated for
maintenance employes,-,because of.a-reduced number of outfits in
service; offset
in part by increased switching revenue due to increased'4 rates. 4 "
^
revenue

was.

OPERATING. EXPENSES
The increase in

Operating expenses was the result primarily of increase^ in
wage and salary rates and in cost of "frihge" benefits to employes. In addition tb
the basic increases-effective November
1, 1956'(10 cents per hour)-and Novem¬
ber 1,1957- (7'Cents per hour.) and the cost-5of medical*and. hospitalization insure
ance for employes' dependents (mentioned in
last'year's report); all organized
employes received cost-of-living: wage increases in 1957 of 3 cents per hour
effective May 1st and*5 cents more per hour effective November 1st. Notwith¬
standing- higher prices-for materials-and'supplies and greater charges for
depreciation and for retirements of road'property, if it had not been for the
inflation of wages and increased employe benefits,
operating expenses would"
have been about $9.6 million less than in 1956, because of the smaller volume
OF.freight handled,' increased: operating efficiency,,reduction in passenger-train
miles operated, less repairsrta passenger-train ears, and decreased rail renewals.

149,360
351,912

Way and structures

•-

used in

m

operations declined sharply and the relatively satisfactory, showing in total
income -was primarily the result of the increase in income from oil and gas
operations.
'

'

Aften allowing for Federal taxes on income from oil and gas operations, total
non-transportation income was $35.5 million in 1957, or $3.60 per share of-

were

well maintained.

ain track renewals

New rails

s

/

71/2 per cent increase in compen¬

shipments resulting from a teamsters' strike against the Railway- Express Agency
April;22 to July'22,1957, and to the general decline in business during the latter
.The decrease in Other

Netdncome per share -of common stock, after dividends on preferred stock, was
only about 2 cents less per share than in 1958, and the dividends of $1.60
per share declared an such stock (about 48 per cent of net income after preferred
dividends )*were the same as in 1958. However, net income from transportation

'

a

such service.

.v;; tions
$ 38,818,0241 $• 42,137,1621 —$3,319,138
Net income from oil and gas operations

5

resulted from

transporting mail; granted to* Western railroads by the Post Office
Department; effective July 1st; in recognition of the increased costs of providing

:

$376,254,
$376,254^724,
-f $6,699,993'

%

revenue

sation for
•-

Net income from transportation opera-

•

.

''V

types of accommodations) effective January 1; 1957.

The increase in )MaiI

Decrease (—)

;

;—„

22,197^684.
•

l!)5fi
1JI56

.

$517,060,102' . $514,316,:
318,828

-77 77?,y;.y::

$382,354,7117
rQperating.expenses.___._—$382,354,717

:

:

decrease in Passenger revenue was caused,
chiefly by a further- sharp
decline in, sleeping-car passengers carried,
including military personnel. There
was also a small decrease in
coach.travel, bufrevenue therefrom was somewhat
greater, than in 1956, because of a,5* per cent fare increase
(also applicable to

report for the Union Pacific
■ Railroad.
Company, including its- Leased Lines,* for. the.year ended Dec.
31, 1957.

:

.

1957

The

rTfce Bpard of: i)irectors. submits, the following

':f: Operating revenues

v

YEAR ENDED DECEMBER
31,

New York, N. Y., April 24 j 1958.

TO, STOCKHOLDERS OF UNION PACIFIC
RAILROAD COMPANY:

jjv
i

.

THE BOARD

—

COMPANY

were as

Quantities of rails, ties, and

(track miles)

Second-hand rails

ballast

follows:

(track miles)

19.5$

Decrease under 19tSCr

123J93

100.33

69.80

20.86

"

^

common

may

v

TAXES
The decrease in Federal income taxes

'

OPERATING REVENUES

certified by

the Office of * Defense Mobilization to be necessary for national
defense, over (b) depreciation prescribed by Interstate Commerce Commission
regulations, with equal annual charges spread over estimated service lives
of such, improvements, i.e., the "straight line" method of depreciation.
The
approximate amounts involved- for 3 957'compared with 1956 were:

,

.

The Western railroads applied in January,

:

tural

^

|

■

•

—

_____—_____

^

.

i»57

.

.Decrease (■—)

vs.I95G-

-f$515,815
— 193,810
11,025,433" — 100,781
$.50
*
*

$28,352,525
21,202,755^

___

ihg certificates for amortization of

any railroad5 property except certain equip¬
construction of which had been authorized,
prior-to January 1, 1956. Therefore, beginning in 1961, income taxes will tend
to be greater-than they would - Have been if the deductions for accelerated

ment whieh had been ordered, or.

amortization had not been taken.
The increase in Federal' unemployment insurance tax was due to an increase
in the tax

andigreater-utilization of.

highway^'^sportsj in^ieu

drought conditions" in'somo areas.

Short One > Railroad Company, Oregon-Washington
Navigation Compahy,' Dos Angelas & ,Salt Lake" Railroad :Company,,and*The St.
Grand'Inland -Railway Company.-Figures-inrihe Income-Accountare< stated ion a
basis, excluding offsetthigwaccounts' beti^een- companies.
aret

:

.

_

disturbing upward trend, with generally
higher tax rates in 1957 for ad valorem and other property taxes.
•

Total "taxes for 1957 were equivalent to 14.3 per cent of

total operating revenues,

$1,611.44 per employe, and $3^32. per share of common stock or only 2 cents
than the COmmon Stockholders' equity of, $3.34 per share in net earnings.

lfess
-

•

bm AND GA^ OPERATIONS
■

■r

Oregon




•

-

.

consolidated^

charges

against

Wet:income front

receipts.....'

V,

-

,

-

'$6,915,134'
.

oil and gas operations..........
;

3,481,925'
2,780,3811

1956

Decrease

Per Cent

$405,902

.9

$8/155,183
3,170,973
4,749,137

$1,240,04?

15.2

i;968,756

41.5

$2,897,853

18.0

$763,197

40.5

$13,177,440

$16;075,293

$29,097,113.
$29,097,113

$26,603,162

$1,120;390

Increase

$42,678,455

$1,883,587

9.8

$310,952

........

9.4

$2,493,951

operations, of approximately $8,993,000 in 1957, and
$7,968,500 la 1956, are included in: "Taxes" under"Transportation Operations."
t Rep-resents costs-such as lateoc, fuel,; repairs and hauling., in connection with drilling, geological
work- clearing ground; building;' roads,,and certain materials with no salvage value;
"

"Federal taxes on income from oil and gas

The decrease;in Receipts- resulted;from a further decline in production of oil in
Wllmingtoh f-iejd;, the effect of which'was largely offset by an increase in the
average price receivedJ peirbarrel5 of oil, andi by increased receipts from other
fields dlie to higher oil prices, the aggregate production from such other fields
having been about' the same as; in 1956* The decrease in production expenses
was chiefly in (Wilmington: field." due to: smaller charges - for depreciation * and
reduced necessity forprcrtective measures to offset-the effect of land subsidence.
Most"of the increasein ttaxes represents higher assessments on property and oil
rights in WilmingtOHi field.. The deerease in intangible expenditures resulted
fronrfewer wells Jiaving .beendfilled in.Wilmington field; with somewhat greater
drilling activity in: other areas*: where*the Company shared in drilling , costs.
-

.

$42,274,553

:....*

Drilling ■& development cost3 not-charged 'against receipts

-

r

-

Production, expenses, (including;depreciation).......
Taxes (other .than incomer taxes)*
Intangible drilling, and
Total

*.

Railroad &
Joseph and

-

development costst....

,

for^ ship-

1957

'

Receipts from sale of oil,, gas, and other products

.

menty partly ^because'of
Leased. Lines-

the first $356 of' each employe's monthly wages)

State and"county taxes continued their

to bepme effective February 15, 1958,
on a temporary basis pending completion of its investigation.
The greatest revenue increases-were in iron; and steel products, iron ore, and,
bituminous coal, because of increased operations: of steel plants; with iron ore
and'bituminous coal shipments bedng-also stimulated by heavy exports; sorghum r
•
grains, chiefly because of larger crops of milo maize in Kansas and Nebraska;
canned and packaged food products, due principally to more: shipments by
Pacific Coast canneries to the East because of favorable market'conditions; nnd
plywood, as the result of increased utilization for sheathing toy the building
trades*,
' " ^;
„/ •/,"[ ,
•
The: largest decreases were in forwarder traffic (shipments consolidated -by; ;
freight^ forwarders - for movement in carload- service y because of the drop
im general) business activity and the* loss of r some * North* Pacific Coast traffiq ;
diverted: through- a combination of factors to Vancouver, B. C., via.routes',inw
which:the"Union Pacific is;unable to participate; htmhcr; due primarily to a.
sharp decline in construction of homes;' wheat; because of/reduced movement
from. Government; storage-to Pacific. Northwest"..ports-for. export; netroleum
.
products? as the result of a further.lOss to pipe lines and .trucks,_ and tlm gr(wing
use of natural gas in place of fiiel oil; automobiles and partsj.chiefly-because of .

*'

rate (applied to

from. D/2 per cent in 1956 to 2 per cent in 1957.

u; weighted-basis.)I

pacific Goast

'■

■;

■,

:

might apply later in the year: for additional increases in freighti rates and
charges to cover anticipated higher wage rates and other costs, with the proviso

of rail movement; and livestock, reflecting reduced movement to
Statea-from-the-Midwest whereof£wer-cattle and:Hogs were-available

1

•

reduction in income taxes represents a tax deferment
rather than a permanent saving (unless income tax rates should be. reduced.in
some future year>.
The Office of Defense Mobilization has discontinued grants

products, and • coal) whichiwas intended to compensate for- higher wages
existing. It-suggested that the railroads

decreased sales of cars:

-

...■

The greater part Of such

1957, for a 17 per cent increase in

•

:

-

.

Reduction in income taxes_—

(

"•

■

and other costs under conditions then

for Union Pacific on

f

>

Betterment ln net income per share of common stock

they should be requested on a selective basis, applying to" specific commodifies and services, rather than on a flat percentage basisi applying-equally
to all*commodities (except for "hold-downs").. Accordingly, on*December 19,*
1957, the railroads filed an application for increased rates on the hasis suggested,
and'the Commission permitted certain increases (averaging about 1:64-per cent.

.

■

Excess of amortization over depreciation—____ 1

that

/r

■'

Amortization deductions^.

,

freight rates in order to improve the rate of return on railroad investment to
a4 basis-more comparable with that of other leading industries.HhwevCr, the
Commission authorized, effective August 26th,.an increase of only 7 per cent
(with "hold-downs" on many important commodities, such as lumber, agricul¬
-

Increase ( + ) o*

.

down of:industrial activity.
:

-

,r\

the result of less taxable income, in

In determining, such taxes, taxable income was reduced: (as
since 1949) by the excess of (a) deductions for amortization,von .a
5-year basis, of portions of-the. cost of equipment; and other improvements

freight rate increases effective March 7 and December 28, 1956; (mentioned in
last year's report) and'further increase authorized by the Interstate Commerce
Commission, effective August 26, 1957. However, almost three-fourths of the
increase in revenue from the higher average revenue per ton-mile was offset
by the effect of a decrease of 2.6 per cent in ton-miles carried, caused by a
decline in traffic during .the last four months of the year, with a
general slowing

i

*

was

1957 than in 1956.

Although Freight revenue was greater* than in 1956,. the amount of the increase
was disappointing and fell considerably short of compensating for addedoperating ;costs resulting from increases during the year in wage rates and prices of
materials. Average revenue per- ton-rmile increased 3.8 per cent, because of the

•

100,866
14,637

in each year

<

•

(number).
711,756
yards)—______________ 429,787

-

•

-

121,19

(track miles)

Ballast (cubic

be appreciated by considering the -follow-

irrg: Adjusting net-transportation income ($3843 million) by adding back income
taxes applicable to oil and gas operations and the non-cash charges for depreciation and retirements of transportation property, produces an amount of about
r$76 million. Against this, payments of interest and other charges, expenditures
for improvements to transportation property, cost of retiring debtf and payment
of preferred dividends, aggregated $71.8 million, leaving a balance of $4.2 million, on about 19 cents per share of common stock.

*,v :
^

7:

Ties

stock.

The importance of such income

•

-

Total'* rails

■

2&

Commercial and Financial

The

(2082)
''

I

Forces for

dip in business at some time in
1958.

A Report on the

Economy
And) Construction Industry

:

City

and construction trend. Dr. Smith,

evaluating the- evil and good Jorces at work, believes that
while "we have not reached the bottom of this business dip
in

;

Industrial
development
is
a
highly competitive field—one of
the most highly competitive, in
fact. In many competitive industries, good
selling tactics

long

way

toward

in¬

go a

vance

total

amount

ke"

the

.

f

To

stand

;

...

versal

games

in

some

or

we

can

these

.

confused

times

f

of

situation today which

is governed by several conflicting
rules.
Shakespeare, for instance,
at

one

honest, it
bad

Though it be

point.

is never

news."

But

^good
to brinto
he
also
said,

was

pected?

There

least three

First,

probably

0U1.

nrtnhnr

(5)

su^ei;*e<^
a very

Second,

President

Eisenhower

in

our

confused current economic

,,

<

•

are

down¬

including,

among

tors are taken into account.

(b)

1

Increasing

business

nessmen> more than they did the

of what is truth. We had £eneral consuming public,
opportunity only last week to
The third factor is that along
see
a
diametrical
difference; of about the safrie time, a wave of
opinion between two leading citi- defense economy had gotten unzens over what seem to be cold,
derway in Washington. Orders
mathematical facts. I am referring were stretched out or canceled,
to the release of the March unem- and if you will recall, there were

things

further

(a) Increasing unemployment,
about 5.2 million, or 7.6%
;of. the labpjr force, and still
showing no tendency to stop
rising, if normal seasonal fac¬

]ey, Pr.°t>ably affected
thought leaders, including busi-

P!?el

these

still

now

Wef »
t
:
JI
Both these traumatic experiences influenced the psychological
Granting that I want to speak atmosphere in which our economy

places, messengers
who brought bad news had their
heads chopped off.

truth, and that you want to
hear it, we still face the question,

in

pressures,
others:

.^ye. now. know wa®
mild stroke, at the worst

times and

the

all

And

reflected
ward

the former—I

mindful that at

last year.

national confidence

when the first Sputnik orbited in

will come
to light."
I
prefer the latter, myself, even
though I respect the implication of
am

(c) A, drop in freight car
loadings of more than 20% from

at

suffered something of

we

a

are

reasons,

"Truth

some

-

which
far

orderly manner than
times of stress

more

mortgages,

better

being conducted in a-

is

of amortized

security!

policing of stock market
operations, are just a few. And

at many

has

it

all agree

pressures
are
reflected in other
hardly a businessman or econ- trends which make for still fur¬
early 1958. - If", nobody plans to 0mist who thought that by the end
ther downward movement. Among
build new plants,.there isn't much 0f the
year, we would be talking
these subsidiary trends are:
you? can do in the way of local in terms of a recession already
industrial development; If every(a) A drop in steel produc¬
underway. Even those of us who
tion, to levels 40% or so below
body plans; a new plant,? then expected some business dip in
last year.
there's a lot you can do—and you 1958
hardly
conceived
that
it
darned well have to do it in this would hit in 1957.
(b) An 11% decline in total
industrial production from the
business^ or somebody* else will
Why did the recession come so
be doing it for you.?
peak reached in 1957.
much
faster
than
anyone
ex¬

warns

:

use

deposit insurance, social

'

„

a

(b) The stability of the finan¬
structure of the country,

cial

v

same

in

we

"

,

am

have many cushions

.

_

I

(a)

was

yjhad in the postwar period. There
(1) The decline in business in¬
are many millions of people who
vestment, which is still going on,
thing is prob¬
and
which is reflected in such
' haven't even noticed this reeesDr. Geortc C. Smith
ably true of
gjon>
0thers are hurting. To things as construction contracts
industrial dethe more than 5,000,000
appropria¬
unem- and sinking business
velopmenty By and large, however, ployed, to merchants in unern- tions.
competition within this field de- ployment areas, to workers whose
(2) The drop in auto sales,
termines the division of a pie salaries have been
cut, this is no which has been showing no ten¬
whose size is largely established
laughing matter.
#•,
dency to improve in recent weeks.
by independent, outside factors.
Sec6ndt x think we can agree
(3) The low level of housing
That's why the general business that this recession developed with
activity at present.
outlook is always important, and
surprising speed. When I was in(4) These and other downward
why it's doubly or triply impor- vited here last September, there
in

we

under the economy that

didn't
The relative stability of
have in the
1920's.
Widespread
the
stock market, which has.,
unemployment compensation, uni¬
comported itself nobly so far. : .;

past, however. Where
now, and what of the

some ex¬

tant

of

whether you like it or not, gov¬
ernment activity is a much
bigger
European
in the past.
7
•
U - .
share of the total economy than
countries. In these pageants, forces
(c) The high level of con¬ it was in 1929—and government
of winter, or
darkness, combat
sumer
purchases already re¬ activity should not be subject to
against forces of spring, or light,
ferred to.
the same cyclical forces that af¬
for
possession of a ball which
;
fect business.
(d) The stability of prices.
represents the Earth.
We could
make
Finally, we
are
much
more
(2) Among the good factors, I
something of an analogy
with our current situation, where would also include the inventory sophisticated about our economy
This could also be in¬ thaii
downward pressures are battling situation.
yveiwere then. We still don't
with upward pressures for posses¬ cluded among the downward pres¬ kndw^%;c*y
nyuch f-*about what
sion of the economy.
What are sures, since inventory adjustments makes :ft'£j£k,; and hqw to keep it
these forces, and more important, certainly helped speed the down-' well, bu&je do know vastly more
in 1929.
Who's going to win? y- v
turn, but I include it here because' than we
'i
this correction shbuld be largely""7.
prospects, we
and

V;.V'.,

Second,

■_

■

source

state.

panic is reflected in

The lack of

several things:

main

a

Evij J,jfl«el)Ceg •
opinions to choose
behinfejs* There are many ana¬ have
Among the evil influences, we lysts "ttmo4hink that businessmen front.-^h^re is still the "secondwould certainly have to put some over-corrected ." in
view
of
the" hall: ciq^riwhich, thinks things
;<that/. what we have now is a
of those I have already mentioned, stability of sales, and will have to; will stOTvto boom late this year.
genuine recession, somewhat more
because they are still operating: make the reverse adjustment; of
Therev-;^p others,;; v^ry; few in

petitors.
;

>.

.

'First, I think

com¬

tent, the

worrying about?")

the

been

growth. Currently, we have been
and still are, in a much more vital

inclined

(."tion?;.,7

more

business

—

working on this paper
duting Easter week, I couldn't
help thinking of something I had
read about ancient rites of spring
which still survive as pageants

-What facts can we ., establish
abdutj the present business situa-,
;

we

As I

1'■■*Present Situation

the
industry; bet¬
ter selling can
m a

V

well

as

future?

saying, figures don't lie, but honest
figure—and come to different

of sales by

all

do

men

conclusions.

indications

:' All this is

tion to normal seasonal factors,
and \ on that basis, they showed
just what he said they showed,
It's no wonder that most of us are
confused.
To
re-work
the
old;

creasing ;t he

Depression

First, as I have said,-;we hdVe a
growth economy and a growth at¬

earlier

times, you would certainly
to ask "What is he

more

be

housing decline certainly was one
of them.
1
'

plates for construction a relatively good year as a whole in
1958 but expresses pessimism regarding short-term new indus¬
trial expansion prospects. Reveals sharpest construction de¬
cline is in factory buildings but that several types of construc¬

tion, including highways. and electric utilities, are running
ahead of last year. Predicts upturn in factory building within
a
relatively short time is practically certain but urges all of
us, including the government, to recognize the existing situa¬
tion and take appropriate counter measures.

Real

8, 1958

new

plans for plant and equipment in¬
vestment.
There were other ad¬

depression.'' Contem¬

don't have the makings of a real

; we

..

Thursday, May

titude. In } 929, we had the
"atti¬
in busi¬ practically all levels of the econ¬
tude (on a much
niore,'speculative
omy.
(I wish, however, that peo¬
basis,
however)
but
the
real
ple would stop conducting "forceyourself-to-be-optimistic cam¬ growth of the economy was de¬
paigns." If a man should come ceptively low, particularly from
the population standpoint.
into your office and say "don't
Birth
rates
had
been
decreasing for
worry," and then come back an
us
to warn in a publication last hour later and say, "Remember, years, small families were becom¬
ing popular, and we had virtually
June that there might well be there's nothing to worry about!"
shut off immigration, which
had
downward revisions in business and repeat the performance a few

Dodge's Vice-President and Economist analyzes the

F. W.

.

factory build¬
ings began to show up in our
Dodge contract figures as early as
a
year ago in February.
It per¬
sisted throughout the year, with
a
few exceptions and prompted

plans ior

ness

Vice-President and Economist-

present business situation

One of these should be of direct

.

Sees No

Good

(1) I would list first among the
good factors the lack of panic at

.

.

interest to you: a decline

By DR. GEORGE CLINE SMITH*
F. W. Dodge Corporation, New York

Chronicle

numbers

of

failures.

an

ahead.

are

~

-

*

Looks at Construction

(4) And then, highly important
among
the upward forces are
s p e c i fi c
government programs
aimed against recession.
Practi¬
cally all of these programs, inci¬

For reasons I have

sion, 'out the short-run prospects
emphasize construction for industrial expansion are not
indirectly. Construc¬ so good. ;.v
tion will be their prime mover—
According to our Dodge statis¬
and their first beneficiary.
tics, contracts for new factory
In addition to government pro¬ buildings have been running at
grams
aimed to boost housing, just 50% of last year's levels. This
is by far the sharpest decline re¬
urban
renewal,
highways
and
other public works, and defense ported for any construction cate¬
spending, we also have the very gory. Contracts as a whole are
down about 10% from last year,
powerful influence of a tax cut to
consider. There is obviously con¬ but about half this drop is ac¬
counted for by factory buildings
siderable
difference
of
opinion
about the need lor a tax cut in alone. Several types of construc¬
Washington. I would venture the tion, including highways and elec¬
opinion that we had better have tric utilities, are actually running
the

tax

some
as

or

cut,

quickly,

ahead of last year.

with

Addition

new

well

as new

a

tax

private

investment

purchases.

cut
as

will

some

think, and this is

not

people
one

as

im¬

as

seem

War

at

the

end

of

the

World

II).

is, stolen.

Now

ing to

conies

assess

.

:

productive

capacity
which was
planned years ago is just now
coming into use, and 1958 will be
one of the biggest years for com¬
pletion of new capacity. Since we
industrial

to

time when

it would be safer to lock the barn
door before the horse

,

new,

,

couple
of years.
One
current
problem is that a vast amount oi

The effect
be

of

capacity has probably gone a lit¬
tle too far and too fast in the last

individuals, in order to stimu¬

late
of

and

relief to corporations as well

;

'

week

already men¬

tioned, I think construction as a
whole will have a relatively good
year in 1958, in spite of the reces¬

dentally,

directly

mediate

(c) A declining average work
week, which is now the shortest
since 1939 (except for the V-J

scene,

number, ydih' think the slump will
go On down and down into a de(3); We still have, basically, a:
pressidh.^ Ancl there are some, in¬
growth economy. Our population
cluding miyself, who think that
is 3,000,000 more than it was last
we will witness a
bottoming out
year, the birth rate is still high,
within a very few months, fol¬
and we still have a pronounced
lowed by a relatively mild upturn
"growth attitude." We are devot¬
for another period of months.;
ing tremendous sums to research
Now let's look for a moment at
and development.
We have the
industrial development prospects.
national attitude that great things
adding to inventories now.

the problem of try¬
the balance between

have

situation

a

where

a

great

quantity of new plant is coming
into production in a recession year,

And as a result of all
these things, declining weekly
earnings oil labor.

the forces of good and the forces
of evil. There is no
neatly cali¬

account.

have not yet been routed.

two

they

through all the construction con¬

(d)

it is hardly a wonder that current
brated scale on which we can
commitments
for
new
factory
ployment figures, which Were in- some big defense producers who
weigh these things and come up
(6) Then, way down at the end
terpreted by one leading citizen had to scramble to get funds to
buildings are at a low ebb.
of the line, as a final result:
witl^ a precise mathematical bal¬
as a sign ;that the
There
is
nothing particularly
recession was pay workers when Federal payance.
It has to be a matter of
(e) Total personal income has subjective
ending, and by another as an in- ments were delayed,
alarming about the factory situ¬
judgment, and yours
dication of a deteriorating situadropped about 2% since last
While all this was going on, the
ation, because the history of in¬
may well differ from mine.
tion. I think that both of these
dustrial building is one of briet
year's peak.
government, and particularly the
men were being absolutely
Bottom Not Touched Yet
periods of high activity alternat¬
honest, Federal Reserve Board, was fight(f) Retail sales are down a
even
though they were 180 de- ing inflation with policies of evering with brief periods of doldrums.
I
little, if the effect of the earlier
haye
to
ddhfess
that in my
These fits-and-starts show up at
grees apart in interpreting what tighter money. These
Easter this year is taken into own
policies had
opinion, the downward
were

apparently the

forces

same

The fact is that the two
not

figures,

men were

looking at the figures in the
way; one was looking at the

same

absblute^ an(J

nfhpt
other
•An

coin ihey
Was

address

33rd annual
trial

April

looking
bv

private recession
1956.

own

as

But these

as

far back

are primarily reasons

u

last

Dr

u

t

American

*u

Indus!

Development Council, Atlanta,
is,

already effectively provided the
home-building industry with its

W5 J!?
for the sPeed of the drop.
y+
showed. The were forces operating long
at them in rela-

Conferenc^

,

1958.




Ga.,

Fall

which

gave

There
before

some

clues

to a c0ming drop, and which influenCed many Of the economists
on
our annual
Dodge OUtloOk
panel last October to predict a

Notice

that

at

the

end

of

the

I think
be defeated fairly easily,
but it will take more
recognition
of the problem in
high places than
I have observed so far.
can

line, the percentage declines are
quite small. This is natural, in
such a sequence.
The important
We have not yet reached
thing is that they be kept small.
the
If they increase, they could well bottom of this
business dip.
spark further cutbacks in produc¬
But it is not
going to keep on
tion, and start the process all over
going down and down. We don't
from the beginning.
have the makings of a real
de¬
So much for the forces of evil. pression. This is not
another 1929.
Now about the good side?
Why? ...
.

or

three

since

we

first

intervals

year

tract figures for

factory

started

buildings

publishing

them in 1919.

Expects Factory Upturn

Soon

An

upturn
in
new
fac|-or^
building within a relatively short
time is

practically certain..

This is

insured by the continuing growth
of the nation and its needs, ana

Number 5740 —The Commercial and Financial Chronicle

Volume 187

capacity caused by time, and ob¬

*'■

As in recent issues, the Bank is Bank bonds to be marketed in the
offering certain institutional pur¬ United States on a negotiated basis
:vation.
'' - <
chasers
the
privilege of taking by underwriting groups managed
The-timing of this upturn de- ;
delayed delivery of the bonds on jointly by Morgan Stanley & Co.
pcnds somewhat on what happens
one or more quarterly dates from
and The First Boston Corp.
The
Public offering of an issue of
to the recession, and this in turn
Aug. 15, 1958 through Nov. 15, last previous sale involved $150,$150,000,000
International
Bank
depends on some unknown factors, for
21-year bonds in
Reconstruction and Develop¬ 1959. Such sales will be at the 000,000 4*4%
such as government actions now
public offering price. A commit¬ January of this year.
ment (World
Bank) 3%% 10-year
being debated. I do not know of bonds
ment fee at the rate of % of 1%
was
made on May 6
Giving effect to the present is¬
by a
any respectable body of opinion
perl annum will be paid by the sue and to delivery of bonds
nationwide underwriting
group of
which holds that the current re¬
Bank
to
purchasers
under the under delayed delivery contracts,
179 investment
firms and com¬
cession is going to be very long or
delayed delivery contracts.
mercial banks headed
the Bank's funded debt will be
jointly by
.very much; more severe than it
The delayed delivery arrange¬ $1,617,149,428
Morgan Stanley & Co. and The
which
includes
has been, although. it is First Boston Corp. The bonds, due ment is expected to enable the United States dollar obligations of
1( already
by no means over yet. The upturn
May 15, 1968, are priced at 100% Bank to coordinate a portion of $1,416,977,000
and
Swiss
franc,
/is; probably
not many months and
accrued
dollar,
sterling
and
interest, to yield its borrowing with loan disburse¬ Canadian
away, if all of us, including the
ments
and
also
to
make
it
Netherlands
3.75% to maturity.
possible
guilder
obligations
government, recognize the situa¬ *. The
for
the
bonds are non-redeemable
purchasers
to arrange aggregating
the
equivalent
of
tion as it exists and take appropri¬
prior to maturity. The net pro¬ payments to suit their individual $200,172,428.
ate counter measures. When the
ceeds from the sale will be used preferences in the light of their
From its formation in 1946 to
upturn comes, a pickup in indus¬ in the
general operations of the own projected cash positions.
March
31, 1958/the Bank had
trial development will probably

brought

solescence

by

on

World Bank 33/4%
Bonds Offered at Par

inno-*

•

Bank.

the way,

be leading
.-.the

past.

"

This is the ninth issue of World

it has in

as

y

.

.

Hack-in' college, I had

entered into loan commitments in

aggregate principal, amount
equivalent
to
$3,587,547,893
to

finance
46

programs

countries.

an

Sheldon &

Two With Walston
(Special to The Financial Chronicle)

MILWAUKEE, Wis.—Joseph N.
Austrup and Horace D. Ward have
become associated with Walston

East Wisconsin
formerly-with
Merrill Lynch, Pierce, Fenner &
&; Co.,

Avenue.

Inc.,

Both

Smith.

attention is devoted to the

fall

the outlook

in

building

sum-,

will:
clothing * hold "up,-

of

sales■

what's

next meal coming

industrial-,

for

where

1958,

is

our

from? y

I I don't blame?any businessman,
for

putting first' things first butunfortunate, because we are
prevented from seeing the forest
of the future by/ looking at the
trees/ of; today. -The. short-term*
is

it

outlook!/is} here? today

and gone.

tomorrow; the long-term, by defi-.
nition, is much ''more / important,
•

it•'willybe^itey'us.lfor1,"

because

Iff years
;

1

always?/short-]
longest; of / theni lgsls

i Recessions-•;are
termThe

>

a small fraction of a lifetime."
I We .stand /at the'(threshold of!

only

I, not one; but, three new eras, any;
; one of Which 'could revolutionize;
lives.: One :is;atomics. One is

our

electronics.; And the most impor¬
tant is.autologics, of machines that
add" thoughtpower. to our already
enormous horsepower,:We are in
the primitive ./stages of.'.a more
fantastic era-of growth and change
than even Jules Verne could

have

conceived, J}.} }
\
a
\fr *
/?/, "Anyone who stands around too'
long musing about the outlook for
1958 is, likeiy to find that .historyhas left him far behind.' •
'
''

Named Directors

there's

Sidney A. Mitchell, of New
York, was elected a member of
the

board

ican

of

Gas

annual

directors
Electric

&

of

Co.

more

to Cities Service

Amer¬

at

than meets the eye!

the

meeting of shareowners in

New York.
Mr.

Mitchell

served

as

a

had

-

previously

A newspaper

the AGE

member of

and

board during the periods
and -1946-53.

He

1929-35
formerly

was

and photo

ing firm of Bonbright & Co., Inc.,

Mitchell

served

with

both

tors

ers

served

as

a

1947

to

1949

the major part of his time to the

administration of various trusts.
Eleven other directors were re¬
elected at the annual meeting.
ney

John S. Battle,

are:

C.

Charles

Brown,

Charles

Court- *

Clay tor,

V.

Graham, Clarence E.
T. Haslam, Walter O.

Hail, R.
Menge, W.
A.

Graham

H.

J. Rose, Philip Sporn,

Stockton, and Harry

Winne.




ounces

of

paper
acres

newsprint, of world-wide

news

organizations, diligent local staffs, skilled edi¬
typographers, block-long high-speed presses,

while the

news

printed

paper

to read¬

is "hot."

There is much more,
a

chemical analysis

also, to

a

gallon of gasolene than

would show. The motor fuel

sup¬

plied at Cities Service stations is the end product of a

and

member of the second

Hoover Commission from 1953 to
1955. Since then he has devoted

They

few

the

Director of the first Hoover Com¬
from

and

a

ink. It is the end product of

and fleets of vehicles to rush the

-

Navy Department and the State
Department.
He was Executive.
mission

is much more than

bit of printer's

of forests converted into

President of the investment bank¬
New York, which discontinued its
activities at the start of World
War II.
During that - war Mr.

a

Literally evei;ypne
with

a

connected

newspaper goes unseen

except the newsboy
it. Editors,

who sells

reporters, copy

boys, makeup men, engravers,

typesetters-this is but a frac¬
tion of the hidden army that
brings you the news.

job which reaches out to four continents. All this re¬

quired
than

a

capital investment from Cities Service of more

$179,000,000 in 1957 alone.

Only in this way can the petroleum needs of the pub¬
lic be met-and

petroleum, next to food, is the most vital

product in America today.

>' 7

Co., 735 North Water

something we are all too prone to
overlook: there are two futures,long-range and short-range. Most
our

•,

f'

Street.

'bus but because it did emphasize-

of

/

(Special to The Financial Chronicle)

.

short-range: how will next
mer's vacation business be,

!

MILWAUKEE, Wis.—Charles M.
Sheldon is
now
with Bingham,

y--

/

projects; in

With Bingham, Sheldon

eco:-

nohaics;

or

1

/

professor; who
used; to
keep a large crystal ball on his :
desk, with a smaller crystal ball
alongside of itr When
anyone r.
asked, as they usually did, why!
one crystal ball wasn't enough,- lie
/ always
replied, "The big onq'*is
fory long-range forecasting; ; ;the:
little one is only short-range.''
.y
I've always remembered this not;
.because it was particularly hilari- ;

27

an

,!

v

,,

(2083)

21-0

were

28

(2084)

The Commercial and

Small Business Will Disappear

industry

needed., assistance,; ine

irenu

Financial Chronicle

van

-

- - -

.

-

.

Thursday, May 8}
jggg

.

-

:

.

•

the American System and way. ot.
Large, business
necessarily-<t
life as we know it.
vjsuppose,must use their
.inventory
was the tonic administered.
When it would perhaps be appropri- excesses as a
determining fafctor
labor was struggling to organize ate .at this time'to mention briefly, in employment
practices; v
its masses of workers, a national the
problems that a small comr7
labor ^act was injected as its Tn/
pany has in attracting either capi.v ;
taxing instrumentality in the form
a generous
depletion allowance

of

By THOMAS GRAHAM*

President, The Bankers Bond*Go., .Inc.,/Louisville, Ky.
""

x

President, Bankers Southern, Inc.
a Member of Federal Taxation Committee

surance. Farmers have been given
"subsidies, parities, and rsoil'bank
programs.
Big industry has received
rapid
amortization pro-

Former, Governor, antl

of Investment Bankers Association of America

Former President,

National Security Traders Association

/Investment banker describes small business

.grams and Other advantages;

as
suffering not
only from government indifference toward* its problems but also
as a consequence of aid extended?to
big business viaitax and
credit ;po!icyj Recommends three-part program in behalf of
small business, to wit: (I)'make equity capital more readily
available; (2) .provide an instrumentality by wJiiih -small
business may have more readily available good management
and good management services; and (3) assist in
promoting
the * liquidity 6f common'itotks 4f smdll'busntess^inctlie area

,

7

r

served/'

inflationary

deflationary

or

combating

in

in

into

goes

,

the market place with

K

cannot

than

eral

definitions * of
of this

areas

the gen-

laws

pressures.

(1)
Equity
Capi¬
tal, and >(2) 7,

lEquity
property

...

is
a

American

political and economic
but in the past two
decades we have been so busy
giving aid and sustenance to the
highest branches that we have
forgotten the roots. All or most of

tradition;

busi¬

is

any

siness

u

Whose stock is

listed

not

us

..

any-of the
major stock
exchanges.
There

Thomas

Graham

business made this nation gi eat in
its beginning.

are

exceptions to the rule, including
finvwnmpnt cpnnrifiiac
,irriu

7.

7

^There have been much discussion and
much

is

debate

business, but

in

what

over

equity capital and what

this attitude is proper and excusable when we consider the overall
scheme
of things
in a balance

small

is

my opinion

until

.

resolve and agree upon a
standard for these two areas we
we

can

cannot

achieve

between what

best be done by
"big units" and what can best be

substantial done by "small units" of business,

any

good for small business.
rFrorn

the

can

This is

standpoint

not/only

law of physical
also is an
im-

a

science, but it
sight, let us review the perform- mutable law of the natural order
ance of the
past quarter century voiced by the discipline of the
of financial
history as it bears market place—economics.
the probiems .of small, busi-

upon

We

ness.

can

review

a

hind-

of

liave

at

only marvel in such
the

movements

culminated

in

tliat

and

rnmmmt
government

can,

of

pride

and

assurance

extension rof

mass

view

with

those

vast

research

and

of

me

urge

you

small/liquidity—©^marketability -4 off 7

as.,a

sometimes: its securities; /The stock of a
spokesman for small business ■ in-.^corporation, • f or .^example,/
as

a

even >asP with or without
emotioia
at„the organaa-

large//listed

terests> to promulgate and adopt on The New York, Stock Exchange
ag spee(jiiy as good judgment
and.,v
~

consideration
three

dictate

Make equity capital
available to small
Provide

more

do ;

7/1)7
more:readiiy7
things:

.

•

business; r(2):7such:!a'cdrpot^tiGn.

Oh'
v

business

have". u'nliSted:/^stock ^has

may

of j;nb77

little

readily available good man/liquidity}ahd Tending institutions
and ;good

management

services; and 7(3) Assist in
moting the liquidity of the
jn

.

an'HmstrumentMity/by"/ha^^

small

agement

slocks

mon

..

-•

/program/

business that would

fundamental

which

a

the

of

'

such/se-T ^

on

curities/t Therefore,

most smaller.7' ]
com- companies are
compelled;to issue"; 7i
companies; semor7:d£bt\ securities,.-7-,suchas
;7M//7:7,> pfeferred7stocks7'and7 borids7' at?7 ■

small

served.

area

reluctahtfto lend

are

pro-

-

i«he small businessman urgently

higlr enough/interest rates to at- ;7>
oriiiifxr'
tr^Ct th^ 1H3101V' SOUFCGS Of GQUltV" ^
obtaining equity tract'..the
major, sources of equity
cap(tal, good management, and capital. 7
'
'
v
ready marketability of his firm's 7' Many regulatory
agencies, such77
lorlc

Koln

nee(js

r\Vvf oivtit^rv

in

help

in

<

if

stock

common

he

-

-

-

-

is

to escape as Securities
and;Exchange Com-5. 7
Charybdis of bankruptcy;on mission, 'Small Businessr<Admin-7 :•
one
hand and the Scilla of
istration, Federal Trade Commis-'

the
the

merger

the

on

something
js

-

done

business,

other.

dramatic

soon

surely

we

Unlesssion,'; Federal Power Commission,

and

behalf

on

drastic

a

rash

new

ness

of mergers

of small business into 'ice
business to the point where the

big

Wall

Street

will

control

every

erosion

of

to

small

rebuild

and have;been of great servto

small, enterprises

scope

busi-

the

this too
She was
child
weak
T-o speak
of eiglit.
But
....

-

any wm destroy our entire free
enterprise system.
We must act
concert

^

But

ness,^"if"not" Mted"Wn""ev^itdjn

;

the scope of this
authority;
does not extent to the vital areas77
of small business in a large num-7
ber Of cases. 77

shocking truth is that the

economic

7

Commissions,

within ; ;
of their authority and b7
when financial situations develop.

Main Street in America,
America.
The

Service

smqll'. liave -4 recognized 7the basic ■» inlook fob, equality inherent in small busi-"

can

increased failures and

Public

and

of

r

'

eciuitv

-7

The

the words

were

her eyes:

"Can't:you mak•

well

me

Collapse of Local Markets

found in locaFmarket places, like!
Louisville, vis found in the fact
whose stocks are listed on any of that in 1938»there were 23
invest-;
the big exchanges have littleVif ment
dealers while in

7
-

see

againt Doctor?" 7

It's^terriblychard.^

...

,

.a

victim,of

7.

cancer.

'

..We had succeeded Tn pro¬

Ijy

F^6cl6!Vd.l

agencies

01/

of tax relief

or

rapid amortization

programs.

This
ment

has

resulted

occurrence

big

-

labor, big farm
ment.

•

'

participation

in

a

big
•

common

but

big

govern-

of

way

-

also

life

of

Free

must—in

shared tin

^

^v^^ixx

„

If
the

this

is

various

accepted in principle

state, local

eral

agencies

with

a

should

measure

of

and

be

Fed-

applied

equality—then

St

*A

'

capital

management

extension—

resources

or

i-

7 r<7

longing lief life by many month!

large New York Stock

are

^x5hange

—thanks to recent advances hi

f™"8*

the treatment of; leukemia.

.

S7'fuJ'?her high-

.

l»?Ms the testimony that

I

have

roc

xxee

jroior-

mereei-

prise System with its magnificent
doctrine of equal opportunity to

*

A

has

Small Firms Ignored

;the

,

Respect-for these fundamental

'

good

77
f
deal of

been
i

answor

'^ofiw ha^b

street is

--

all.
.

JThe stork

spent

causes

of

in

in Wall

imvt

my

small

our economy, and

"777

wfSt

7A

■

business

in

ings.

of our

has

occurred

we

The: result

particularly the been .that

mergers
.

during

and

eitheror

the .past

*

has

-

<

have

in

purposes

been to

me;the kind of
may not be as

en-

securities of

allur-One point

the

by *Miv
Banking and Currency
rrency'Coimnittee

busmess,

proposed

Mktanr.
.^i,
assistance
to
smfeU
D. C., April 29,

Washington,




Society ^'Crusade

than
year

ness—they havelbeen ignored

«c™fi

to^entory eyeiica,

,

ad-

recesFiona!

all groups in our

5 ^
^ recently.^ the investment therein,
Small and developing business as- an asset. This is

should
cem

i

be

as

it

our

is

number
our

one'

con-

number

one

ideological""
said

af

a

argument

factored
not

but

praS a"4lys"s

it

of

an

is

thl

this

>

•

..

and; help:

mortal

enemy

250,000 Americans thi!
alone.

'

-

Send your gift to CANCER*'

c/o

serve.

ibbldlyygea£

erously to the American Cancef

wliicli will take the li ves of mom

in

munities which they

m

Let's give..
;

I would likeTo makp '

Enterprise,^

mmistered to

.striving towards that goal.

eliminate

.

t^
These
needs
have
been1

•-/ -.»
'Research, supported by'Kfht

our area.

::big here is that the i7Sve unemchosen • to ignore'the real needs Of business" corporations,»but they
ployment presently "in effect in
m]e sma11 business ^community, provide an opportunity for in- 0ur area is due in
substance to
j
ar? essentially the dividuals to practice the finest the 1 factor of the
dominance

"SaSSS

battlf"

American!Cancer Society, M

two

^

agencies concerned Twith a the tterprisesThat

must... find ways to

'it, and win overdt

list-'

effect

,

the directives of

/

i

exceeded; 58%i-this dis-

championing through buy-outs,
i

."v,w.v«.nwo

traded ni the local market

7777
81:63 ^
life: solution

adult

7"

am
afraid, .have
.have not
be
I.,am
not .economy
economy .of
Kentucky and In- years There has T
been an almost
iems61ves 'except
except Tn a'diana.
Small
manil st thems61ves
a diarta.
business
is
the. complete collapse of our local.
the;
curs^y and toffliand fashion Tor greatest bulwark we'have as a markets in Louisville, due to the
smaAi business. The fiat oh govern- stabilizing factor in our economic fact that there was no;
liquidity ;
r?eP
whether it be Federal, system. Small companies always for : borrowing

or

\7 [

diseaso*

statement

concerning

( '

But that's not enough I Catt*

muwiwws.;

financSl

fs

Senate

shares and 4

And*

■tomust

Enterprise System—
and its
corollary political theory
—equality of opportunity.
7
^-7
Sees Only Big Business
Aided
state or local
.

policies

a

varying degree by all Americans
—the

these

l5visincssni3|.i without listed

i—

But

natural

Somewhere along the
line,

Constitution

that

suggest

inevitably

this trend must
square itself with
a fundamental
belief not only of
our

we

infpvpQt

public "goodf

govern¬

business,

and

implement the

■

of

.

niili!IP

in

indirectly by subsidies in thefoi™

}

even

fade.from tlie suoliglit of.life--

t

business,

^1106

.

1

in

a doctor who^eeS tragedy :
enougli^-;.:.- tq-watch;a chd4

■

there!

19S8

plain to

>

nrAKlem^

fundamental

larf intef^ manufactur- capital and the confidence of the
mEi,?nd Pl;oducUo" ""its We little businessman. Companies

Federal

assist

in

technological production

tint
1 !Ii m!g7
state, local mixed

-

course,

accomplishments

almostTll .imnen WGthe Ati6^
of the
the
of

We

...

,

,

Let

businessman and

-

Many or most of us have been
lulled by the efficiency, or supposed efficiency, of bigness. But

~

'

,

have been

guilty of the sin of
omission in this area as our economy has grown biggei and biggei.
We
have
foi gotten
that
small

on

...

•

for small

medium-sized business

or

has its tap roots imbedded deeply
in
the
soil
of the fundamental

over¬

.Small
b

7

.

Small-

all debts.
ness

that

instruments

services.

v//.

the value of

the

and
■—J

What is small,
business.

traditions

and

ment

do fto

stpp^s xt

implepre-empt
restrict
—*—<•
1long-range
»
■—
' "
equity
capital offerings or management

problem of small

business:

can.

'It

ease.

-

,

two

we

^n- .money

other

.be

.........

severe

First, for the purposes of This not been made.available to small
discussion, I would Tike to Offer business in a general way because
these

industry,

and anything that

with a great .deal more
.jn
conclusion, may 1 Suggest
is/theref ore, -.often neces- -that if we had the three
built-in
.successful when you have consid- 'sary for a smaller company, m
supports for small
business-^sttCh
ered
the volumes
of testimony order to survive, to sell its stock
as
equity, hi a n a g"e hi e n t and
before
you
and the wealth of at less than real value and to b9ri+v of stocks—-it
7 ideas and proposals set forth in .row
money,-at. higher than cqn-of
,
mextiemely
thd various
varinnc bills
hHic now
nnw under
under con-:sidered
the
considered competitive
competitive interest rates.((doubtful -if -we- would havefhad
sideration.
/
Furthermore, because of.; its size the present recession;. 7 77
'"V'/t "7;;7;:7and relatively smaller capitaliza/;;•
Suggests Three Fundamental ..f'
tion,7the vsmallemcompany does
.7
7*
— Changes 7'7 ..':777%0 not have the added attraction1of
:;-'7;^..7:r?77:7,V:777;77'V.-.^
forthrightliness. 7Your

deavors

Mr. Gedbam terms smalls to mdduun^izad business-a

stronger bulwark than large industry

|

and

7

Ji:/S7v.y/

the sale of its securities ;I feel sincerely that a
small-to
borrowing .money .from-exr!/.medium-sized/business .is
a^:much
isting financial institutions such stronger bulwark during recesas banks.
When a small company ( sional periods than large
tal1 for

or

-

your

local post office.

ESTABLISHED

I S39

In

The Commercial

2 Sections—Section

an

2:

d

Chronicle

Reg. U. S. Pat. Office

Volume

Number 5740

187

New York 7, N. Y.,

Thursday, May 8, 1958

Price

50

Cents

THE SECURITY TRADERS ASSOCIATION
OF NEW YORK,
22n<l ANNUAL

J

V

INC.
AT WALDORF

DINNER

APRIL

-

ASTORIA

25, 1958

President

First
Treasurer

Second

V ice-President

Secretary

V ice-President

*

''

■

•

'.9

Kji

I

Jral

•

&
ji.

John F.

McLaughlin

McLaughlin, Kauf¬
man

Co.

<fi

Barney Nieman
Bernard J. Conlon
P. F. Fox & Co., Inc.

Carl

Marks

&

Wilbur Krisam

Co.

Salvatore J.

John

Inc.

A

r

C. Legg &
Company

F.

S. Moseley

Rappa
& Co.

DIRECTORS

John S. Barker
Lee

Higginson
Corporation

Edward J.
Carl

M.

Kelly

Loeb,

Rhoades & Co.




S. E. Dawson-Smith

Joseph H. Billings
Cowen

&

Co.

Nathan A.Krumholz
Siegel

&

Cruttenden,

Co.

&

Podesta

Co.

John D. Ohiandt, Jr.
New

York

Walter L. Filkins
Troster, Singer & Co.

Elbridge H. Smith

Hanseatic

Stryker
Corporation

&

Brown

Sidney Jacobs
Sidney Jacobs

Co.

Arnold J. Wechsler
Ogden,

Wechsler
Co.

<ft

a

Copy

The

2

Lyonel Zunz, Moser & Singer; Hon. Louis J. Lefkowitz New York State Attorney General, Albany,
N. Y.; John McLaughlin, McLaughlin, Kaufman &
Co.; Bernard Tompkins, Counsel to STANY;
Charles E. Sigety, Assistant Attorney General, State of New York, Albany

Sid

Siegel, Siegel & Co.; John W. Bunn, Stifel, Nicolaus & Co. Incorporated, St. Louis; Joseph Smith,
Newburger & Co., Philadelphia; Charles Bodie, Stein Bros. & Boyce, Baltimore, Md.




Charles

Diehl,

Commercial and

Financial Chronicle

•

Col. Oliver J.

Primary Markets

Coast to coast retail

Bonds

distributing facilities

•

Stocks

Public Utilities

through 24 offices

Industrials

located in principal
.

financial and business

Municipals

Banks and Insurance

centers.

V

Complete Trading Facilities
.

:

*

i.

,

''

A

•

"ji '

'■

.<}•« ••
■

L-

•••>•.
'

i-'.

New York
Boston

;

•

San Francisco

Philadelphia

•

•

Chicago

Los Angeles

Pittsburgh

Cleveland

Spokane

Oakland

i

Detroit

Pasadena

Minneapolis
San Diego

•

•

San

Jose

Thursday, May

8, ? 938

Troster, Troster, Singer & Co.; Walter Haubert, Jesup & Lamont; Daniel Daly,
Jesup & Lamont; Vincent Shea, Glore, Forgan & Co.
1

-i

Distribution

.

Bodie, Stein Bros. & Boyce, Baltimore; Nathan Krumholz, Siegel & Co., New York; Robert
Paine, Webber, Jackson & Curtis, Los Angeles;
Soren D. Nielsen, Beil & Hough, Inc.,
St. Petersburg, Fla.; Thomas L. Curry, Stone & Webster Securities
Corporation

Blyth & Co., Inc.

(«

. .

Fresno

Seattle

Portland

Louisville

Indianapolis

Eureka

Sacramento

Palo Alto

Oxnard