Full text of Commercial and Financial Chronicle : November 12, 1942, Vol. 156, No. 4124, Section 1

View original document

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

LIBS***

Nov i'g
my
THURSDAY

Final Edition

Volume 156

New

Number 4124

In 2 Sections

Editor's

railroads,

according
to
.market observers,
are
pursuing
a cautious and carefully planned
program of debt retirement un¬
der
the
recently
enacted
tax
•amendment permitting them to
reduce their outstanding bonded
"debt without incurring tax liabil¬
ity in the procedure.
,

Sharp
early
in

recession
which
carrier obligations

this week

was not con¬
reflect any letdown

sidered to
interest

issuers.

the

Rather it

Copy

SEC Reiterates That Dealer Profits Not To Their Liking

of John B. Knox & Company

marked the

Property Rights Be
Abrogated By Bnreanciatic Edict?

By II. B. LOOMIS and JOHN B. KNOX

REPORT

Price 60 Cents

York, N. Y., Thursday, November 12, 1942

THE ANATOMY OF CAPITALISM

REPORTER'S;

;

Section 1

HOW DID WE GET THIS WAY? ShaU Personal

OUR

The

part of the
ascribed

was

Constitutes Fraud

Postwar

planners and postwar plan
Ever since the founding of this nation, there has been
propagandists are as ubiquitous in Washington as were
the program makers and the panacea hawkers in the early one sacred right guaranteed by the Constitution which has
years of New Deal history.
Indeed the two groups are become, such a vital part of our accepted way of life that
largely the same. The players have; changed their cos¬ it seems impossible that this right should ever have to be
tumes and shifted the scenery, but the play goes on with defended by anyone.
That is the Constitutional guarantee
Note:

pertaining to what we call PERSONAL PROPERTY
the nature of RIGHTS.
the programs devised. Postwar plans are today for the most
Personal property rights have been established and
part the New Deal plans of yesterday—often wearing new defined by one hundred and sixty years of usage and judi¬
dress and somewhat glorified^ but essentially the same. New cial determination.
Who is there among the people who
Deal program makers, now wearing postwar planning labels, would challenge a citizen's
right to buy any kiftd of prop¬
continue as in the past to pore over their blue , prints with erty, either real or personal, at any price he wishes to
pay

little alteration in the dramatis personnae.
Nor has there been any basic change in

to the general tendency on the

their backs to the world of realities.

part of traders with open posi¬
tions to recognize the railroads

every

Their products are

for

it,

vice-versa, to turn around and sell this property
price he chooses, even to give it away if he so de¬
So since the war appears
sires—-to make either a small profit or a very large one?
as
among the outstanding securities
which
would
be
In defining this Constitutional right we are not considering
chological support.
abruptly affected by any early
The best way to combat such seductive proposals as war time limitations, which we all understand are admitted
move toward peace.
those now appearing almost daily, perhaps the only ef¬ temporary abrogations of property rights.
People who follow the market fective
way, is to turn the flood light of fundamental
No court has ever established the principle that the
closely were certain that the set¬
truths upon them.
amount of profit that any citizen derives from the sale of
back, rather than reflecting any
It is with hope of doing its part in combating this ANY PROPERTY HE LEGALLY TRANSFERS TO
.withdrawal of company buying
AN¬
'orders, might be regarded as hav¬ menace that the "Chronicle" is presenting a series of arti¬
OTHER, WHETHER IT BE LARGE OR SMALL, SHOULD
ing provided these potential buy¬
cles, of which this is the first, which call the reader's at¬ IN ANY WAY DETERMINE WHETHER OR NOT A
ers with more favorable oppor¬
tention pointedly to certain fundamentals often overlooked FRAUD HAS BEEN
COMMITTED BY THE SELLER
tunity for picking up securities.
in this day and time.
It can think of no better contribution UPON THE BUYER.
At the same time they de¬
to postwar planning.
scribed the railroads' operations
No preferences have ever been made in the interpre¬

whit

dangerous

they ever were—perhaps more
to have lent them additional psy¬

at any

cautious in the extreme and

tation of

designed to avoid any assist¬
ance
whatever to speculators

this

American

Part I

Constitutionally guaranteed right of every
to buy, hold or sell ANY KIND OF

citizen

PROPERTY.
No exceptions were made between the man
tendency, in these days of dogmatic "isms, ologies,
who buys and sells tangibles and intangibles.
One business
osophies," is for the believers in individual
rounding carrier obligations.
has been treated the same as another.
The man who buys
initiative and private enterprise to assume a defensive at¬
There is certainly no disposi¬
-and-sells-a pair of shoes is free toT>ay as litllma^ hertair
tion to reach for bonds which are titude.
Practically without^ebuttarthey allow the pro¬
for the shoes he buys, or as much as he wishes for that
on their buying lists, but rather
ponents of different systems to over-emphasize the de¬
matter.
If he sells them for 10 times their cost to anyone
-a clear cut determination, judging
fects and under-emphasize the virtues of capitalism.. : \■
by such operations thus far, to
(Continued on page 1701
'
Even our definitions are being changed, without pro¬
obtain as
npich for the money
available as is reasonably possible. test and without a full understanding of the technique of
Securities Salesman's Corner.......1703
semantics used to discredit the processes which have pro¬
INDEX
Central Maine Power
seeking to profit

who might be

by the change in conditions sur¬

The

and

ocracies

The
>

being rapidly
for the completion by the

path is

cleared

now

(Continued on page 1703)

QUICK ACTION ON DESIGN
•

duced the highest standards ever attained by any system.
We seem to fail to understand that the campaign is not

the imperfections in our social order but
against the social order itself; that it is a schematized and
by no means innocuous array of misrepresentation.

directed against

also

..y. ■■■■:

SURVEYS AND
^

Calendar of New

Security Flotations. 1710

Personnel
Real

Items

Estate

1700

....1701
...1700

Securities..

day

Unit FUNDAMENTAL

FINANCING and VALUATIONS

WAR SAVINGS BONDS

Sanderson & Porter

INVESTMENT

SECURITIES

64 Wall Street,

New York

Albany
Buffalo
Pittsburgh
Williamsport

Year-end

always

SELLERS—

Exchange

Exchange,

other

Inc.

are

BUYERS.

Exchange Bldf.
YORK

Bankers

Kobbe, Gearhart & Co.
Members

CHICAGO

DETROIT

PITTSBURGH,

GENEVA

SWITZERLAND

Security

45 Nassau Street
Tel.

REctor 2-3600

Philadelphia

Dealers Ass'n

New York

Teletype N. Y. 1-676

Telephone:

Enterprise 6015

Government

and

Uganda

Office:

GUARANTEED

in India,

RAILROAD STOCKS

Head

Branches

the

Colony

Kenya

—Net Prices—

INCORPORATED

BOSTON

Insuranck

Corporation

Specialists in

•

NEW

DIgby 4-2727

of INDIA, LIMITED
26, Bishopsgate,
London, E. C.

Exchange•

Over-The-Counter Securities
N. Y. Cotton

Member Federal Deposit

634 SO. SPRING ST.
LOS ANGELES

NATIONAL BANK

Trade

New Orleans Cotton Exchange
And

INCORPORATED

JERSEY CITY

Exchange

Board

Chicago

facilities

Exports—Imports—Futures

Exchange

Curb

Commodity

from

IS EXCHANGE PLACE

Syracuse
Dallas

Actual Trading Markets,

Cotton

York
York

New

correspondent

SUGAR

HUGH W. LONG and COMPANY

PHILADELPHIA

Troy

Established 1850

service with Chase

DEALERS

AUTHORIZED

Established 1927

San Francisco

BOSTON

New

MAY

Broaden your customer

NEW YORK CITY

FROM

OBTAINED

R. H. Johnson & Co.

52 WILLIAM STREET

Stock

99 WALL STREET

INVESTORS - INCPROSPECTUS

ENGINEERS and CONSTRUCTORS

York

BANK

LAMBORN & CO.

AND STAMPS

New

CHASE

THE

OF THE CITY OF NEW YORK

the U.
in

Members

1707

Municipal News and Notes....,
1704
Our Reporter on Governments..... 1712
Our Reporter's Report.............. 1697

BUY UNITED STATES

H. Hentz & Co.

.,.,..1698

iiTh^SttT-

each

Invest

In connection with

NEW YORK

Says
Uptown After 3

NATIONAL

V
REPORTS

MANAGEMENT PROBLEMS

Chicago

Tomorrow's Markets—Walter Whyte

,.1703

Investment Trusts

Railroad Securities

(Continued on page 1706)

AND CONSTRUCTION

Page
Bank and Insurance Stocks......... 1702

Colony

and

Burma, Ceylon, Kenya

Aden

and

Zanzibar

Subscribed

Capital.... £4,000,000
Capital
..£2,000,000
Fund.
£2,200,000

Paid-Up
The

HART SMITH & CO.

...

Reserve

Members

'mim

.......

conducts

Bank

banking

and

Trusteeships
also

every

exchange

and

description
business

Executorships

undertaken

New

York Security Dealers Assn.

52 WILLIAM ST., N.

Bell Teletype NY

HAnover 2-0980

CUARANTEED RAILROAD STOCKS-BONDS
—\s~xs

York

;

1-395
BO. Gr. 9-6400

New

Montreal

Toronto

Telephone

NEW YORK

Broadway

N.Y.

1-1063

Teletype

1698

grading Markets in:',

Markets for

We Maintain Active

American Barge Line

Alabama Mills
1

CANADIAN RAIL BONDS & STOCKS

Chas. Pfizer & Co.

Debardelaben 4s, 1957

CANADIAN INDUSTRIAL BONDS & STOCKS
Tennessee Products

CANADIAN UTILITIES BONDS & STOCKS

Missouri Pacific

O'Cara Coal Co., 5s, 1955

HODSON& COMPANY,

CANADIAN MINING STOCKS

5^4

Serial

Exchange]and Other Principal Exchanges
115 BROADWAY •
/
|
NEW YORK
,
Telephone BArclay 7-0100
, [
Teletype NY 1-572

HA 2-2772

TELETYPE NY 1-423

165

Broadway, New York

Securities at retail!

for Distributors of
We

are

Memorandum Ao. 261 describ¬
selected issues of Peace Time Industrials.
prepared to supply

Obviating necessity for positions, we are
these stocks to Distributors
Ask

Memorandum- No.

for

Established
Wires

required.

LOS

ANGELES

Inquiries

—

BOSTON

Issues

HARTFORD

—

New York

REctor

ment of

the

staff.

-The

*—■J.

Tomorrow's Markets

unlisted

BROWN,

are

now

associated with

Walter

Whyte

■

■■

sion

Exchange
Exchange

rious

which

rule would have

NEW YORK

100 BROADWAY

effect

Situation

Win. Sabw) Now With

The

common

Attractive

stock of

which

and

sibilities, in view of the; company!s
CHICAGO, ILL. — William H. improvement during the past few
Sahud, formerly Vice-President of years, with the outlook for earn¬
Charles K. Morris & Company, ings for 1942 on the common.stock
Inc., has become associated with definitely optimistic, according to
Sills, Troxell & Minton, Inc., 209 a circular issued by Ward & Co.,:
South La Salle
Street, in that 120 Broadway, New York City.
firm's
sales
organization.
Mr. This circular brings out the fact
Sahud is well known on La Salle that
there
was
$2,456,367 cash
Street as a financial writer and segregated
for
preferred
stock
analyst.
sinking fund requirements on the
balance sheet as at Dec. 31, 1941,

With
Edwin

Now

Georgeson Go.

Heminway, formerly
Secretary and Director of Minseh,
Monell & Co., Inc., has joined the
organization of Georgeson & Co.,
40 Wall Street, New York City.

which time there

Only

Sept.

have

would

Long-Bell

Lumber Co. offers attractive pos¬

were

110,557

preferred outstanding.
nine months later, as at
30, 1942, there were only

81,451 shares outstanding.
As at
Dec. 31, 1941 just the cash and
U. S. Treasury tax notes exceeded

dealers1

the

in",

contend

visions of the rule:

in ''at¬

-v.

pro¬

the

marketing

■

brated

practice the

opinion such

I knew, for example, that
N.

offices

the dif¬

election

holler,

and

needed

were

so
urgently.
foreign editors of

the

market

stock

tion

for

demand

increased

plus

from de-r correspondents

switch

the

cele¬

war

the

-the .market

ac¬

clearly

way

rule would be

figure of 1,207,643, the largest

of Congress in its enactment

the

\;
❖

❖

only
showed
something
of , im¬
it knew—a sharp rally
portance in the wind.
Well,
accompanied -by volume.
the rest is now history.
We
Monday's trading reached a

for

in violation of the intent, and pur¬
pose

not

bearish.'

the

fense into offense in the

the security financing, of the states
and their governmental units.
In
our

undertow

definitely

was

'; The

facilities

certain

which

everything else which seemed
the news services didn't
important then was rele¬
know, or if they did, didn't
gated to the scrap pile.
do any talking. The sudden
*
«
'
*

proposed rule would adversely af¬
fect

existed

WHYTE

day's mar¬
fractionally there

off

was

Securities
in

ket

Even

Proposed Rule In Its
Practical Application to
State and Municipal 1.
that

very

despite

ferent press

week's

The

We submit

For

Part

last

you

services, AP, UP,
Everything that passed be¬
fore paled into insignificance INS, were suddenly beginning
to seek men to cover the Eu¬
by the week-end news of the
No one knew
American •" invasion
of
the ropean scene.
North, African
so
many new men
Coast.
Last why

municipals

tempting to comply with the:

raised.

now

WALTER

"insur¬
w

war

week-end inva¬

Reaction levels

the borrowing

for

news

proposed

difficulties"

mountable

E. H. Heminway

operations of the States and their
municipalities

Sills, Troxell Firm

the

outlook

brings
market
rally. Don't advise being car¬
ried away by mass buying.

text, of Part

Members New York Stock

telling
Thursday was

the fact that that

Optimistic
end based

Members New York Curb

SNYDER

>jc

mind

uncomfortable.

%
*

don't

that

II;, in
which the Association sets forth,
among other features, the delete¬

INGALLS &

above the

part of the statement

the

advanced

Says

reproduced in substantial de¬
in Section 1 of last Thurs¬
day's "Chronicle." We are giving
herewith

but

#
'

was

Over-the-Counter Trading Department.

our

Monday
didn't the

only

react

gree

Managers of

re¬

its practical applica¬
tion to State and municipal secur¬
The first

points

As of

seen.

point or
previous close.

and in

ities, "

bearish. I

about- five

not

market

try,

was

another

he added, also "re¬
opinions and
reactions of a large proportion of
our membership."
The statement was presented in
two parts-—the proposed rule in
its
general
application
to
the

firm of Taylor & While, specialists

securities,

night

over-the-counter securities indus¬

formerly of the

Last week I

repeated the advice to stay

had been

state¬

long

opened, is

only silly, its stupid.

action

SAMUEL R. TAYLOR and D. HOWARD

not

because, the

offensive

awaited

Commission,

November 9/ '942

your's as
But to jump at

guess;,

out of the market until

protest submitted-to the

conclusions

flects the combined

Association

PHILADELPHIA

—

•'

study

ernors" and

2-8700

Invited

Cities

by the Association's
executive officers, Board of Gov¬

Teletype NY 1-1288

Bell

these

SEC's

sive

Members New York Security Dealers

192G
to

Co.

Operations, Says IBA

Thursday, Nov. 5,

request, the suggested
regulation had been given exten¬

1Z0 Broadway.

Ward

the

261

Phonet

the "Chronicled of

branch offices

our

good as mine.

reported the action
of the Investment Bankers
Association
of
America, through its
President, Jay N. Whipple, in advising the Securities and Exchange
Commission of its undivided- opposition to the Commission's pro¬
posed bid and asked price disclosure rule, X-15C1-10.
Mr. Whipple
informed the " Commission under date Qf;. Oct. 29 that, pursuant to

carefully preparing our

ing ten

Direct

end

Handicap Local

Orleans, Lav-Birmingham, Ala.

Direct wires to

Governments In Borrowing

York, N. Y.

NY 1-1557

New

Price Disclosure Gule Would
f?Peace Time lndus(rial§

York Stock Exchange

Members New

25 Broad St., New

Members N. Y. Stock

Dealers Ass'n

Exchange PI., N.Y.
BELL

GOODBODY & CO.

1920

New York Security

Members

Steiner, Rouse & Co.

KATZ BROS.
Established'

Inc.

STOCKS

CANADIAN BANK

this year. Only on two other
days this; year has volume
managed to cross the million

Securities

Exchange Law
originally written and as sub¬
sequently amended,"
; •.
>
as

now

have

from

decide what to

here

J *

on.

Well, the first thing I'm gor¬
ing to tell you is that if you
Aug. 27, ket
net working
opened plus and before don't have any stocks now5,
1942, on the legal aspects "of the
256,911.
the day was over managed to this is
proposal prepared by David M.
hardly the time to get
Copies of the circular discuss¬ Wood
of the law firm, of Thom¬ add more than a point in the them.
I have a marked adAycock Co. Formed
ing other interesting factors af¬
son, Wood & Hoffman, New York Dow
averages. Yet under this version to buying anything
NORFOLK, VA. — Aycock & fecting the company may be had
City, copy of which was previ¬
Company, with offices in the from Ward & Co. upon request'.
pressure to buy it was evident against
competition.
When
ously sent to the Commission, We

Royster

has
been
in municipal

Building,

formed here to deal
and
of

corporate securities. Partners
the firm are William T. Ay¬

cock, Jr. and Virginia J. Aycock.
Mr.
Aycock was formerly local

for Scott,
Horner
&
Mason, Inc., Granberry & Co., and
Whitehouse, Hudson & Co.

all

the

current

liabilities, the
capital being $12,-

Ask for memorandum No. 260.
Also
No.

available

Memorandum

261, "Peace Time Industrials,"

for distributors of securities at

re¬

tail, describing ten selected issues
of peace-time industrials.

manager

Chgo. & Alton Interesting
The current situation in refund¬

ing 3s of Chicago and Alton Rail¬
road

Associated
Gas

Co., which
is
controlled
by the Baltimore & Ohio, offers
attractive speculative possibilities
at

present

levels, both as to in¬
come and price
appreciation, ac¬
cording to a circular issued by
G. A. Saxton & Co.,
Inc., 70 Pine
St., New York City. Copies of this
circular may be had upon
request.

Wells Is Lt.-Commander

;.A.Saxton&Co..Inc.
II

0 PINE ST., N. r.
Teletype NY

WHItehall 4-49701
1-609

H. Prescott Wells of Outwater
& Wells, 15 Exchange
Place, Jer¬
sey

City,

missioned
mander in

J.,

the

has been com¬
Lieutenant
Com¬
U.

Navy.

We believe this is evidenced in

the

memorandum

believe
in

the

that

Caldwell,
Mitchell,
City,
and

opinion

is
on

mark.

Monday's

mar¬

that the market did not

move

dated

evidenced

also

the subject of

unit.

as a

Marshall,

Trimble. .& T-V:,
attorneys,
New York
For
which has been published!

v
*

some

strange

reason

believed

which, we under¬
stand, either has or will be sub¬
mitted
to the
Commission.
" If

African invasion indicated

need

called

to stand aside or do

early end to the war. The so-

the

everybody and his brother is
jamming the order room win¬
dow with buy slips I prefer

copy

will be presented to the Commis-r
From

David M. Wood.
the
practical angle

;

stocks

were

sold

submit that should the rule be put
into force, it would be injurious
to:

war

Steel, and others

cur¬

rently regarded as war favor¬

1. Borrowing municipalities
(public interest).

ites

followed

suit.

the

sell¬

•
'is

and the peace stocks were
bought. The result was the
rails" slumped,
Bethlehem,

some

the ing. '
❖

*
*
*

be, a further discussion of
legal phases of the proposal

sion by

opinion

mass

So far I

saw

little in Mon¬

day's run up, or Tuesday's de¬
cline, to make me change my
mind.

anything Tuesday's
as many people
Monday's rally cheered.

sell-off scared
as

For another, markets

such

seeing now are full of
other hand stocks associated
2. Investors.
dangerous pitfalls.
Being
3. The
industry
peace
time activities, whipsawed is the one quick¬
engaged
in with
marketing
municipal
securities Sears Roebuck, Allied Chemi- est
way of running your ac¬
and in developing and broadening
calj utilities, etc., shot up, count into the ground. No,
the markets for such securities.
some
of them making new the more I
study the market
Borrowing Municipalities
of Monday and Tuesday the
highs on'the move.
The practical effects of the pro¬
*
*
*
more
I feel that buying at
posed rule would impede the maryou are

continued on page^l708)

■

Whether the

war

is close to

(Continued

on page

1702)

.U'wri'j:'''?T.-*" Tf

Volume 156
r

-Number 4124

THE COMMERCIAL & FINANCIAL CHRONICLE

COMMERCIAL and

FINANCIAL CHRONICLE
...

1":
,

Reg.

•

Patent

Publishers

/.; '*

'25 Spruce

Published

November

twice

f!?®/:'

;

■

12,

Other

bad

William
;

■./ >

sons

subscriptions

and

records

this

demand

seems

will

Real Estate Bonds

'• ;

MARKETS FOR

ALL MORTGAGE

just

written by

ably

CERTIFICATES
CITY

BANK & TRUST COMPANIES

TITLE

staring

MORTGAGE COMPANIES

COMPANY.

Newburger, Loeb & Co.
Teletype

■ ■

Bill

has been

the

passage

State

Florida

Bd. of Albert Frank

an¬

District bonds

ad valorem

the

is already

market.

tax

all creditors.

upon

S i

which

are

RFC.

The

and

Plan

owned, entirely by the
RFC also holds notes

securities of the

Southern

Colorado &

its

and

subsidiaries,

of these securities represent¬

some

School
of

ing collateral pledged behind sub¬

some

burden*

of the

For purposes

ten-year extension to 1955 of the
refunding and extension mortgage
bonds (a first lien on the Colo¬
rado & Southern Company lines)

Constitution,

Municipal and
by relieving

strengthen

amount

of this discussion,
only the main points of the plan
are, of
interest.
First, there is
provision for the extension of
maturities of company and sub¬
sidiary-obligations, including a

pledging for fifty years 2 cents of
the State gasoline tax to Road and
Road
District
bonds, "will
also

Corrigan Chairman of

aggregate

Terms

amendment to

sidiary notes.
None of, the obli¬
gations extended under the plan

This

being felt in the Florida
H. G. Carrison, Vice-

has

yet matured, but they come

—-

due from 1944 to 1948.

President Clyde C. Pierce Corpora¬
tion

■/■'.'

-'vV.

modifications

Certain

of inter¬

est, for the period Nov.
Nov.<
in

Twin

City Bond Stub

1954,

the-

Interest on the re¬

plan.

funding

Gets 1943 Nominees

at the Club's annual election to be

held

Law, Inc., 131 Cedar Street, New
.York City, held Friday, Nov. 6,
Emmett Corrigan, formerly First
Vice President and Treasurer, was
'elected Chairman of the Board;
Victor J.

Cevasco, formerly Vice
and

President
elected

First

Treasurer;
formerly

Secretary,

Vice

was

President

and

Harold
E.
Maples,
Vice President, was

elected Vice President and Secre¬

William T. Cobb and Ben S.

tary.
Laitin

were

elected

Vice

Presi¬

dents. Russell Law remains Chair¬
man

of the Executive Committee

and Frank J.

;
i

Reynolds, President.

Ins. & Bank Evaluator
The current

ance

and

issued

issue of the Insur¬

Bank

Stock

Evaluator,

Butler-Huff & Co. of
California, 210 West Seventh St.,
is
now.
being distributed.
The
by

Evaluato^contains a comparative

analysis (of 85 insurance com¬
panies and 37 banks as well as a
brief

discussion

insurance

leverage and

stocks.

from Butler-Huff & Co. upon re¬

quest.

the

University

Secretary-Treasurer: Rudolph S.
'

Juran, Juran & Moody,

«Three members of the Board of

Governors will be chosen from the

extension

and

mortgage

4%% to 4% per

Of this new rate, 2V2 %
is fixed while 1 %% is contingent
annum.

v.';:

non-cumula-

Inquiries

voluntary adjustment
authorized by the

and

Lawyers

was

the

gage bonds of

general

mort¬

1980, the only bond

issue of the Colorado & Southern

the

public,

from .41/2%
the

Additional

members of the Boston Securities
Traders

now

rate, IV2 % is
2y2% is contingent

bonds.

Inc., who are now serving in the
armed forces.
The Bond Traders
Club is

affiliate of the National

Association.:.
'
Aldsworth, Joseph G.
Balliseh, Kenneth S. Beall (de¬
ceased), George F. Brewar, Frank
Buller, James J. Callan, Richard
Cooley, Walter E. Cooney, James
E. Czarnecki, J. Smith Ferebee,
Security

Traders

Wjilliam

Grigsby,

R.
Muller, Norman J. Powers, Arthur
Sacco, Harry A. Taylor, Richard
Wallace, T. D. Walsh, Raymond
C. Wauchop, Burnham Yates.

Leahy,

Ed.

of. securities

certain
include

Richard J.

Ljening,

Donald

interests,

Un approving the
tion

adjustment,

the

issuance

under

INC.

Broadway,

re¬

requires

in need of financial

reorganization, of

the

for

77"

under

Section

character
and

that

provided
the "cor¬

poration's inability to meet its debts,
tured

about

mature,

prior

the

effective

Laughlin

Act,

the

securities

new

proved
20 a

the

are

had

Pvt. J. L. R.

French, 805th TSS
S. D.

However,

already

Commission

passage
Mr.

Bankers

waived.

the

Robert U., Ingalls, Tucker,

had

this

Lasdon

Magazine

York

Stock

Associate

and

such

Editor

member

on page

ap¬

Act, such

Exchange.

(Continued

Section

case,

been

1-120X

An¬

Securities

thony & Co., has reported for duty
at Camp Devens.
Herbert W. Young, F. M. 2C, 495
Summer Street, Boston, Mass.
The

Association

also

Bought—Sold—Quoted
In

reports

American

Funds

that James H. Goddard (Air Force

Headquarters, A. P. O. 887, Post¬
master,
New York
City),
and
Samuel G. Jarvis (Army Air Base.

Columbia, S. C.)

have been

moted to the rank of

The

Association

CHARLES KING & CO.
61

Broadway, N., Y.

pro¬

Major.

WH. 4-8980

Teletype N. Y. 1-142
Specializing

Canadian

Bonds

many

years

Stocks

Monday.
the annual

Nov.

23rd, will hold
Turkey Festival, at the Boston
Yacht Club, Rowes Wharf, at 5
p.m.
Cost will be $1.50 and the
profits of the activity will be used
for remembrances for members in

the service.

Trader with

ages

perience in the unlisted securi¬

(Six Christmas pack¬
have already been mailed to

members

tioned

the

Association

sta¬

out

the

country—one

going

box

the

Solomon

Is¬

ties market seeks

tion

the

lands.)
Robert Peirce has resigned as a
the Association and

new

ex¬

connec¬

trading
a good
production and some

investment firm.
of

over-the-counter

trading department of
or

record

good contacts.

has left for Detroit where he has

valuable

taken

Has

zation.

position With the Woodall

William Prescott

Industries, Inc.
elected
as

fill

Mr.

Peirce's

Can

prove to be
good organi¬
Kindly address inquiries
Box A, Financial Chronicle,
Spruce St., New York.
man

Governor of the Associa¬

has

Association

Traders

The

opened

bowling season with
in competition—Coast

its

four teams

Guard, Army, Marines and Navy.
At the last report the Coast Guard
was leading.

Opportunity
For Salesmen
Four

high grade salesmen, pref¬

erably with investment trust

the
of

the

Orlando, Florida, territory.

Taylor I Brown Join

cellent

opportunity.

Box

New

the

York

Stock

Ex¬

Write giv¬

ing full particulars to advertiser,

Ingalls & Snyder, 100 Broad¬
way, New York City, members of
and

H 21,

Financial

Chronicle,

Spruce St., New York.

Curb

Exchanges, announce that Samuel
R. Taylor and D. Howard Brown,
formerly partners in the firm of

Taylor
with

White,

them

are

associated

Managers oi

Over-the-Counter

Trading

their
De¬

Eastern
Bonds

partment.

Corporation
Preferred

Common

1942 Federal Income Tax
John H. Lewis & Co., 14 Wall
Street,. New York City, members
of the New York Stock Exchange,
have issued an interesting circular
on

capital

their

gains

treatment

Federal

Income

this helpful

1706)

ex¬

perience, wanted for Miami and

Mo-

been

under

N. Y.

Canadian

Barracks 1029, Sioux Falls,

ma¬

issuance

secured prior
of the McLaughlin Act.

approval

New

modification

of the Interstate Commerce

findings

date

York,

Teletype

S. Colby, A. C., U. S.
C., Hotel Phenix, Concord.
N. H.
(Gerald S. Colby & Co.)

reasonably

expected to be temporary only."
if,

New

2-8970

Board.

modifica¬

Act

CO:

findings by the Commission. These
a determination by the Commission

that the road is "not

Co/s

Participations

tion, his vacancy on the Board be¬

upon

plan

McLaughlin

Title

Trust

ing filled by Ralph Carr, who as¬
sumed the Chairmanship of the

> /'
consist-

•

Stockholder

Ctfs.

are:

Contingent interest on the re¬
funding mortgage and the general

are

Ctfs.

Co.

Members New York Security Dealers Assn.

serving

fixed

to 4% per annum.

earnings and non-cumulative.

members of
the Bond Traders Club of Chicago,:

following

Co.

other

Gerald

place

reduced

nominees:

NSTA Service Flag y

Title

Mtge.

all

Ctfs.

A. A.

also

Co.

J. GOLDWATER &

HAnover

Association

in the armed forces

in the hands

revised

while

£ leports Or ffaiars
—

Invited

Complete Statistical Information

Boston Traders Ass'n

was

outstanding

system
of

and

Bank

BOSTON, MASS.

Mtge.

Lawyers
Bond

The

4-6551

Specialists

Governor of

/;/••; / /:v'/'

Interest

and

earnings

upon

tive.

Ara

Merrill 'M. mortgage -do f not rank equally.
Cohen, J. M. Dain & Co.; Alton After satisfaction of the road's
interest
require¬
Junge, John S. Bauman & Co.; C. revised fixed
D. Mahoney, C. D. Mahoney
& ments, /income available * for
Co.; Merrit W. McDonald, Kalman charges is then applied to com
& Co.; I. D. Owen, Allison-Wil¬ tingent interest on the refunding
liams Co.; and H. H. Wylie, Wells- "mortgage bonds. A $300,000 capi¬
tal fund has the next claim on
Dickey & CO.
W ■
earnings. Remaining income must
be used to meet contingent inter¬
est •* on
the
general
mortgage

following

Charles
Hofer, Henry Jensen, Fred F.
to¬ Johnson, Hugh Kearns, W. W.

of the Evaluator
gether with an interesting memo¬
randum on Globe and Republic
Insurance Company may be had
Copies

Thrall West & Co.

meeting of the Board of Di¬
rectors of Albert Frank-Guenther
At

Club, St. Paul, Minn. * •
; President: Frank T/McGuire.
Vice-President: Robert L. John;

Corrigan

;Emmett

Dec.

1, 1941-

also contained

are

is reduced from

MINNEAPOLIS, MINN. — The
nominating committee of the Twin
City Bond Club has. presented the
following slate to be voted upon

the

each affected class, makes the

■.

Furman, Jr., Alester

the

terms binding

buying

Jacksonville, Fla.
The

amendment

time, and will

in the face, is

of Adjustment

Plan

decided to take advan-<^

of claims affected by the plan, in" eluding at least three-fifths of the
aggregate amount of the claims

G. Furman Co.

1-2033

originally presented

was

Bankruptcy Act, assent of three-

of
equities at this time in this section.

11 Membets New York Stock Exchange
I 40 Wall St., N.Y.
WHifekail4-6303
Bell

some

for

cause

—Alester

bill

tax

../

Tax

plan

recent

fourths

Congress is prob¬

everyone

other

PRUDENCE

this

probably encourage buyers rather
than give them cause for hesita¬
tion.
Inflation, which seems to be

YORK

fair

brought out in

market

that the Income

feel

WHitehall

real estate securities

Act, however, the

level of other;

increased

price.

issued

This

company

already felt the

tage of the benefits of that legis¬
lation/ Under the provisions of

until

stocks which have
effects

Colorado

Interstate Commerce Commission under Section 20a of the Interstate
Commerce Act. *
After passage of the McLaughlin

that

continue

the

and' modification of the road's securities

which

and

these stocks reach

NEW

Does

W«

selling under the market

for sometime.

advertise¬

ments must be made in New York funds.

STREET, NEW YORK

By oscar lasdon*

Southern's proposed
meet the requirements of the
McLaughlin Act?

very

dividend

long

■In the rate of exchange, remittances for

foreign

find

have been

fluctuations

the

:;v

good demand for
equities in Textile Stocks of this
section,
which
have
maintained

Europe (except Spain), Asia,
Africa, $31.00 per year.

account

Australia. and

NOTE—On

Colorado & Southern and the McLaughlin Act

Greenville, S. C.*//\
We

Obsolete Securities Dept.
99 WALL

Members New York Stock Exchange

Par¬
■

in United States and
Possessions $26.00 per year; in Dominion
of Canada, $27.50
per year; South and
Central
America,
Spain, Mexico and
Cuba, $29.50 per year; Great Britain,

too!

clients

Company

Subscriptions

Continental

and

that nobody seemed to
at any price. Let us
quote
YOUR junk and surprise
you

Telephone;

still receptive to

indicated.—Bertram Parsons,

ruary 25, 1942, at the post office at
New York, N. Y., under the Act of Mar.
3, 1879.
*

sell-off,

bond

■.

;;

this class of'
B.
Dana
■"•/;.,/ > ' security where potential/values are?

second-class matter Feb¬

sharp

recent

;

Victory!

want
on

25 Broad Street, New York
3; 'Telephone HAnover 2-4300
Teletype NY 1-5
■,V

the part of investors.:

Considerable buying of reorganiza-,
tion rail bonds was effected in the

are

Company. '
.-

news

offices:

Gardens, London, E.C.
<

Nearer

Hezekiah Zilch incorrigible bond
trader, was surprised to get $111
and a real
Llchtenstein smile for

Spencer Trask & Co,

increasing refusal to
stampeded by either good or

Chicago—In charge of
Gray, Western Representative,
Field Building (Telephone State. 0613).;
London—Edwards & Smith, 1 Drapers'
Fred

find

[every Thurs¬
day (general news and advertising issue)
with a statistical issue on Monday]

Week

SURPRISED!

PREFERRED STOCKS

Buffalo, N. Y.

■/;/

1942

week

Public Utility and Industrial

Business Manager ./

Riggs,

Thursday,

Seibert,

William Dana Seibert, President-

William D.

AND COMPANY

One

BRIEFS

Editor and Publisher

kmm

B. S.

High Grade

■

v',v-

Street, New York

Herbert D.

interested in offerings of

are

DEALER

■

'BEekman 3-3341

•

OHice

William B. Dana Company

►

1699

and losses
under
Tax;

the

and
1942

Copies

circular may be had
request.

from the firm upon

Bought

—

Sold

—

Quoted

CRAIGMYLE, FINNEY & CO.
Members

ONE

New

WALL

York

Sf.J

Stock Exchange

NEW YORK

Telephone WHitfthaU

4-529yl

THE COMMERCIAL & FINANCIAL CHRONICLE

1700

Thursday, November 12, 1942

DALLAS

Bought

Sold

—

Quoted

—

Forty Wall Street Building

Dr. Pepper

New York

City

Republic Insurance

New Mexico Gas Co. Com. & Pfd.

Illustrated Analysis

Great Southern Life Ins. Co.

lj you contemplate making additions to your personnel,
send in particulars to the Editor of the Financial Chronicle

please
for pub¬

request.

lication in this column.

Southwestern Life Ins. Co.

Dallas

Chech

Members

Bond Department.
NEW

Teletype NY 1-592

joined the staff of
Co., Incorporated, 120

The

Financial

CHICAGO., ILL.

Hironlclel

Co., Inc., 39

South

ously with Ryan-Nichols & Co.
and Thompson Ross Securities Co.

EFFECT ON BONDHOLDERS

Co.

1942 provides for greatly increased income
Its effect upon corporations' earnings available for distribu¬
dividends must in many cases reduce the amouht paid annu¬

The Revenue Act of

SAINT LOUIS

taxes.

509 OLIVE ST.

tion

Teletype—SL 80

Members St. Louis Stock Exchange

fore arriving at net

Conference Nov. 18-20
Assistant Adminis¬

will

which

suitable kind and remodel
war housing, will
ad¬

every

them

for

dress

the Realtors' National War

be held in St.
Louis, Nov. 18,19 and 20. Accom¬
panied by Ormond E. Loomis,

Conference,

head

the

conversion

division

which
out the

relief

below

discount
have

can

who

This also

par.

effect upon dividend

some

corporations

take advantage of reduc¬

can

for the

carry

Navy,

Conference.

are

among

Norman Littell, As¬

sistant

Attorney
General,
in
charge of the Lands Division of
the Department of Justice, will
address a dinner meeting for ap¬
praisers. Paul A. Porter, Assist¬
Administrator

the

Office

of Price Administration in

charge

of its Rent
a

Division, will conduct
half-way informal discussion on

rent

control, its administration
and its implications, now of ma¬
jor importance to every branch of
real estate activity. It is expected
that Ivan D. Carson, newly ap¬
pointed director of operations of
OPA's Rent Division, and other
officials of the Division will also
take part.

funded

thereby

of bonds.

tirement

than

securities

estate

Real

ever

are

now

excellent

interest charges,

B.
Simpson, Portland,
President of the National
Association of Real Estate Boards,
will
outline
objectives
toward

which realtors

as a

national group

must direct their efforts in
war

of the

time

182.99 taxable if not for

tion

$25,483.68. Again actual cash
position is not affected and under
indenture
terms
approximately

of the sinking fund. The
has not as yet asked for

should

but

this

Trustee
tenders

money

ex¬

pended to retire bonds at an aver¬
age price of 50, the resulting profit
of approximately $74,000
would
not be taxable.

Many investors looking for con¬
tinuation

income

investments

their

from

showing consid¬

are

erable interest in this type

se¬

curity due to the attractive yields

offered, the favorable tax position
the prospects for enhance¬

and

ment

above

value

current

levels.

earnings

outlook

40 Wall Street Building,

for the
Incorpo¬

rated, is particularly attractive at
the present time, according to an
analysis issued by Seligman, Lu¬
betkin & Co., Inc., 41 Broad Street,
New York City.
Copies may be
from

Co. upon

Mclntire,
B.

Theo.

Roberts,

George

cash

was

$174,958.15 in
available (maximum an¬
of

amount

nual
ment

fund

indenture

trust

bonds

2%)

for retire¬

through

Seligman, Lubetkin &
request.

too

"Mr.

individual,
however humble he may be, and
however unimportant in his com¬
munity, and, by force of law re¬
move

him from

one

section of the

country and place him in another
or

from

one

precinct to another

our

' v'

was

not

bills thoroughly enough to
pronounce on them, except that
they would give broad powers to
Admiral Land said

thought

would

resent

such

man
an

at¬

McNary added that he

have

compulsory

say

manpower

the

mobiliza¬

tion question "if such a bill should
ever

come

On the

he
to

lacked
make a

'enough
definite

man

Exchange Street. Mr. English was
previously an officer of the Cit¬
izens Gas Co. of

Calais, Maine.

P. Knight has

hire these people.'

Hansons Restrained On
Stock Market Utterances
A

decree

into

New

York

all

of Alabama,

man-power

and

op¬

although I

hope so,

doubts.'

some

Lee

Texas,

O'Daniel,
meanwhile,

bill in the Senate to

war

'to utilize

entered
terminated
action against

copsent,

parties,

State's

Arnold R. Hanson and S. Welmer
Hanson ~of
firm

John

the

over-the-counter

Hanson

Hession,

action

the

Hanson,
former

and
em¬

organization.
had

swift changes

The

out of

grown

in the price of the

Wisconsin Central Railway Supe¬
rior and Duluth division and ter¬
minal

bonds,

which

from
high of 35
June, then breaking on official
denial by Canadian Pacific Rail¬
11% in February to

rose

the

way,

rumors

Senator Lester Hill,

tie it onto

deavored to
age

know

the teen¬

He said he did not

draft bill.
'whether

ready

before the Senate."

day (Nov. 5) Rear
Emory S. Land, Chair¬
same

parent
company,
of
which had been circulated

in the interim.

the

Under

decree, the Hansons
are
permanently
enjoined
and
restrained
from
public issuance or utterance of
Hession

and

any
misleading
statements
representations
regarding

stocks
ties

lic

bonds

order

other

securi¬

promote
Issues.

sale

also

are

any

pub¬
They

from

repre¬

restrained

such

senting to the general public that
they possess any exclusive infor¬

this

Congress

curities in the State.
was

Mr. Hession

also

the

charged with violation
general business law in

enact

like it 'will finally be enacted or
even

serious

result

than

the

consequences

happened

information

Wickard told the
Military Committee that 'skilled,
managerial help' on the farms

which

Exchange
Weekly Firm Changes

"Secretary

should be deferred from the draft.

take steps so

bonds

price rise.

New York Stock

election.

the

had caused the

last

Congressional

suggested, too, that Congress
that war plants with
the Maritime Commission,
government contracts 'shall not

Admiral

Henry

—

associated

with F. L. Putnam & Co., Inc., 97

our
full man power.'
On this
mation regarding securities which
proposal, too, Secretary Wickard
declined to take a stand, except may be offered for sale to the
that the working of men longer in public in New York State, except
uch information as they may have
the
war
industries
might
be
or obtain as the result of inves¬
worthy of study as a possible
means
of stopping the drain of tigation and proper research.
Before filing of the consent de¬
labor from the farms.
"Senator O'Daniel said his bill cree, New York State had been
seeking to enjoin the defendants
was the same proposal which was
defeated on Oct. 24, when he en¬ permanently from dealing in se¬

yet

will

Senator

Chronicle)

C. English has become

ployee

•

said

power

Tuesday'

take

he understood pending man¬

sure

will

make

tempt, because it is un-American

lation

time

Wickard

and undemocratic."

action,

to The Financial

State's

minds.'

and the love of freedom of

attempted by legis¬

agreed—merely-that, as
it, 'we haven't

much

spect for the home and the hearth
and when it is

(Special

this type of refusing to reveal to the Attorney
his activi¬ legislation,' but thought something General's Office the source of his

——

affected

re¬

"Both

Admiral Land put

the duration of the

bonds

upon

Nov. 5, re¬
Land's views,

suspend the 40-hour week law for

DIGBY 4-4950

NY 1-953

change his habitat or
ties, it is certain that the

founded

John D.
Culp,

witness, Claude R.
Wickard, Secretary of Agriculture,
were non-committal on proposed
national service legislation.

Democracy

with W.

now

PORTLAND, MAINE'

another

introduced

thing in this«>

208 East Wisconsin Avenue.

"Otherwise both Admiral Land
and

Members New York Stock Exchange

Republican leader.
Senator McNary said the threat of
taking men from one job and
placing them in another was "the most dictatorial proposal that was
ever conceived, in my
opinion, by American minds." He continued:
one

Arthur

added:

"Senator

The idea of compulsory mobilization for civilian
manpower was
on Nov. 5
by Senator McNary of Oregon, the

Westra

said."

Washington
porting Admiral

have

criticized in the Senate

there

Chronicle)
—

pulsion. Associated Press accounts
from

Admiral Land said:

★

PL.,N.Y.

The Financial

if that failed he would favor com¬

Bell Teletype

MILWAUKEE, WIS.

"Already agriculture has lost
1,600,000 men and women, 60% of
them to war industries, the rest to
the armed forces, Mr. Wickard

one

Proposed Plan To Draft Labor Galled
Dictatorial, Inimical To Freedom

"If

—

testifying before the Senate Mili¬
tary Affairs Committee, said he
favored
solving the man-power
problem on a voluntary basis but

Democrat,

40 EXCHANGE

(Special

were

Funds

Street.

Chronicle)

Lynch, Pierce, Fen-

SHASKAN & CO.

sinking

Principal

operation.

★

All

previously
with
United
Management Corp.

with Merrill

timist
★

Co., Inc.,

PORTLAND, MAINE — Richard
rejoined the staff of
Harry A. Rounds Co., 184 Middle

Financial

The

author of
bill, if he thought
the problem could be worked out
satisfactorily on a voluntary basis,

MARKETS IN

SECURITIES

sum

associated

N. Lindsey has become connected

CLEVELAND, OHIO

Democrat
TRADING

depreciation charges are of
only book entries and in
way reduce the cash earnings.
the

South

231

become

1012 Baltimore Avenue.

(Special to The Financial Chronicle)

"Asked by

course

the

Co.,

recommendation.'

The

Under

knowledge

REAL ESTATE

terms

with Mitchell,

now

have

with Barrett Herrick &

Salle Street.

$292,544.82 were taken, reducing
taxable income to only $31,141.75.

the President.

$323,686.57 which would be
except for the fact that
depreciation charges of

country that goes to the heart of

Attractive Outlook

had

which

book loss

democracy, it is freedom of action.

The

Chronicle)

deprecia¬

charges of $96,666.67

when taken results in

allowable

and at this critical period
war.

Hutchins

(Special

taxable

David

Ore.,

the

000 Income Debentures amounted

Federal
officials who will take part in the

ant

under

but

debt at a discount,
also
reducing
fixed
charges may elect to use funds $74,000 cash is available for retire¬
available for dividends for re¬ ment of bonds through operation

ing

position. First, in most cases after
allowable depre¬
plan, Mr. Bane will discuss with ciation has
wiped out any other¬
realtors from all over the country
wise taxable income, but prior to
the procedure proposed. Realtors
the 1942 Revenue Act the profit
will participate actively in listing
on bonds retired by sinking fund
properties suitable for conversion
operations has in some cases off¬
and throughout the whole conver¬
set
depreciation
charges
and
sion program. The whole field of
caused some taxable income.
war
action and war changes as
A specific example to illustrate
they affect real estate and the the
foregoing is the case of the
work of the realtor will be sub¬
Hotel St. George Corporation. For
ject matter of the Conference.
the fiscal year ended Aug.
31,
Col. John J. O'Brien, in charge
1942, net earnings, after 4% in¬
of real estate acquisition for Army
terest on $8,747,900 first mortgage
use,
and John J. Courtney, in
bonds and 4% interest on $351,charge of the real estate program

taxable

given to

of the Homes Use Service,

has been set up

Neuberger

1942 Act is free from taxes.

are

Government payments

available structures

lease

profit of $196,641.85

One other example is that of
corporations
the Broadway-New Street Corpo¬
by the Act is the feature whereby
no
taxable profit arises through ration, showing earnings, after 4%
the retirement of bonded debt at interest on funded debt, of $71,-

Housing

Agency in charge of the new pro¬

under

to the
corporation which in former years
a

would

gram

taxes.

Realtors To Hold War

National

income. Divi¬

paid from any remain¬
ing net income after payment of
dends

the

CHICAGO, ILL. — Lome C.
Smith, formerly with Shields &
Company here, is now associated
with Merrill Lynch, Pierce, Fenner
&
Beane* Board of Trade

In contrast holders of corporation bonds face no cut in the in¬
payments.
Building.
The interest which a corporation pays on any outstanding bonded
indebtedness is a deductible item<S>{Special to The Financial Chronicle)
of expense together with depre¬ in the amount of $371,600 were
CHICAGO, ILL. — Franklin J.
ciation charges on fixed assets be¬ retired with these funds resulting
ally.

terest

Smith

Thomas M.

—

Barry has become affiliated with

THE 1942 TAX LAW FAVORABLE IN ITS

Frank Bane,

Brown,

Mueller,

Salle Street. Mr. Barry was previ¬

trator

The Financial

KANSAS CITY, M.—Edward P.

Sims, Harry W. Sisk, and Wm. F.
(Special

REAL ESTATE SECURITIES

Leason

System

(Special

has

Stroud

ST. LOUIS

Bell

Superior Ave¬
Mr. Lindsey was for¬
merly with Goodbody & Co. and
prior thereto was with Prescott
& Co.

Broadway,

Beane, 216

N. E.

nue,

YORK, N. Y.—Edward F.

Ilirsch

Ft. Worth-Houston-San Antonio

3tik

ner

New York

Telephone HAnover 2-2100

TEXAS

Co., 4,4 Wall Street, New
City, in their
Municipal

York
Association

York Security Dealers

New

41 Broad Street

RAUSCHER, PIERCE & CO.
DALLAS,

Shields &

Incorporated

Southwestern Securities

YORK, N. Y.—Homer F.

Locke has become associated with

Seligman, Lubetkin & Co.

Stocki

All Texas Utility Preferred
.

NEW

Ry. & Ter. 6% 1951

The New York Stock

has

announced

the

Exchange

following

weekly firm changes:
Wesley G. Tomlinson
from

partnership

Leonard &

Lynch,

retired

Moore,

of Oct. 31.

Volume

Number 4124

156

Shall Personal

THE COMMERCIAL & FINANCIAL CHRONICLE

Property Rights Be

Abrogated By Bureaucratic Edict?

Seaboard AH Florida "A" Bonds

(Continued from first page)

above the
NOT

legal

BEEN

AND

of 21 (JUST AS LONG AS HE HAS

age

GUILTY

ACTUAL

MISREPRESENTATION)

that's

FALSIFICATION

his

his right to keep and maintain
profits he has derived from such a transaction.
The

Brown

Fanny Farmer

THE

OWN ACCOUNT AND

provide

BUSINESS

that

PRINCIPALS FOR

Exchange

York Stock

•••

New York

Telephone—DIgby 4-4933

AND

BUYING

Members New

Broadway

HART SMITH & CO

Bell Teletype—NY 1-310

RAILROAD

SECURITIES,

Noranda Mines, Ltd.
Sun Life Assurance

PFLUGFELDER, BAMPTON & RUST

does not say that this right applies
in the United States EXCEPT THOSE WHO

ENGAGED

SELLING

REORGANIZATION

SECURITIES

Bell

been

profits in: the securities
business or in any other field of endeavor.
No one who has
liad any experience in any kind of competitive and legally
conducted enterprise would ever
approve
of abnormal
profits which are entirely unrelated to value. In addition
to the questionable morality of such procedure, the natural
competitive forces which are always at work will tend to
keep those who persist in this practice from ever achiev¬
ing a substantial degree of success in any line of enter¬
prise.
THE FAKIR ALWAYS CUTS HIS OWN THROAT
The

END.

annals

of American business history

truth of this fact.

the

the present

brief

represented by Moss, Marcus, Chaitkin & Gardener;

the defendant
filed

tion

by Abraham M, Metz.

by Louis Loss of the

is not

our

place to take

regarding the

suit in these pages.

The SEC's brief

was

and

of the details of

cons

However,

any

litiga¬

involved—nor to try

any

cannot refrain from point¬

ing out that the SEC in its brief stated the following:
"The dealer's omission

to disclose

the

spread between

the market price and sale price WHEN THAT SPREAD IS

UNREASONABLE renders misleading

and fraudulent

representation, implied from his holding himself out
dealer in

to the

securities, that he will deal fairly with his custom¬

charge prices bearing

prevailing market."

The

■

the

point

some

reasonable relationship

MISREPRESENTA¬

FELONY, NO

justify the

this

cover

secured

the Louisville & Nash¬

war

selling at the lower price, is being recommended, not only because
of the greater price enhancement potentialities,
but, also, because
there can certainly not be any as- «>
—r—
_—
that the 1st Consolidated

surance

would

fare

better, if

well,

If the company

tinue

there
at

any

open

is going to

least

market

applied

would

Collateral

spent,

part of

and

4s may be even more strik¬
ingly superior to that of the 1st

for

The

be represented by excess
income from the collateral direct¬

pledged.; On
Louisville

pledged

stock

come

yields

$4,176,900,

the

annual

LEROY A. STRASBURGER & CO.
1

WALL

quirement

income

convertible

America, Inc., offer interesting
possibilities, according to a memo¬
randum

issued by Buckley Bro¬
thers, 1529 Walnut Street, Phila¬
delphia,
Pa.,
members
of
the
Philadelphia Stock Exchange.
Copies of the memorandum dis¬

cussing the situation in
may be had from

MINNEAPOLIS &

the bonds.

since the start of

Minn.

St.

Louis

New

Com., W.I.

cen¬

tury has the subsidiary's dividend
been below ■ that figure.
More¬

the basic position of: Louis-

TION, HAS BEEN COMMITTED BECAUSE THIS DEAL¬

vill

ER OR ANY OTHER DEALER HAS MADE ANY AMOUNT

Beer To

Minneapolis & St. Louis 6s 1932
Minneapolis & St. Louis 5s 1934

Minneapolis & St. Louis 4s 1949
Minneapolis & St. Louis 5s 1962
Iowa

Central

Iowa
DeS

come

changes,
Beer

:rederic H. Hatch & Co.
Incorporated
Wall

Street
Bell

New

York, N. Y.

Teletype NY 1-897

be¬

Beer

Co.,

of the New York Stock

members

19$5

Dodge 4s

will

Stockdale

Exchange and

1951

Fort

partner

1938

Central 4s
Moines

Admit Stockdale

William

Only

the

firm

request.

upon

Minn. & St. Louis New 2nd 4s, W.I.

this

the

(in reorganization)

ville & Nashville stock, constitut¬
ing 51%, of the total amount out¬
standing. A dividend of less than

share is necessary

de¬

some

tail

outstanding in the amount of only
$35,000,0.00 and are secured by
pledge of 596,700 shares of Louis¬

over,,

Teletype: NY 1-2050

ST. LOUIS RAILROAD

ville & Nashville Collateral 4s are

YORK

$2,776,900

The Atlantic Coast Line Louis¬

$2.50

NEW

in¬

the bonds.

STREET,

WHitehall 3-3450

than the annual interest re¬

years

dividend

Nashville

future

sinking fund notes of Flour Mills

would

from

Flour Issue Looks Good

& Pacific R. R. Co.

market purchases

open

than it has been in the past.

4s.

funds

any

competition.
behind the Collat¬

power

Consolidated

substan¬

non-rail

severe

eral

Chicago, Rock Island

tial interest saving on each dollar
so

company is more vulnerable than
its subsidiary to possible renewal

Earning

believe

buying

the

There would

reason

fair proportion

properties

well defined post¬

prospects as the Louisville &
Nashville properties. The parent

markets in all issues

con¬

Moreover, the Atlan¬

tic Coast Line railroad

We maintain net trading

its debt retirement pro¬

ville stock.

the Collateral 4s.

twice

wish to make is that NO FRAUD, NO

MISDEMEANOR,

appraisal of the situation

any

stock to support

v-.'.-v^:V,

do not have

•

ers and

difficult

present price spread of 10 pokits between the Atlantic Coast Line 1st
Consolidated 4s, 1952 and the Coast Line Louisville & Nashville Col¬
lateral 4s maturing in the same year.
A switch into the latter, which

used

Solicitor General's office.

up any

pros

weaker position than the bonds

,It

ihat

has submitted

against Stewart J, Lee Co. of New York. The plaintiff in this
cause

insufficient

On the basis of past experience
1st Consolidated 4s appear in

gram

time the SEC

"friend of the court" in the matter of Helene Hallgarten

as a

Toronto

the

■

1-395

senior interest.

We do not condone excessive

attest to

IIAnover 2-0980

Montreal

any

TO ALL CITIZENS ALIKE.

THE

N. Y.

Teletype

New York

Governmental bureau should be em¬
powered to abrogate this sacred right which is guaranteed

WILLIAM ST.,

THEIR

The Constitution does not

RISK.

Company (All Issues)

any

Constitution

everyone

ARE

Andian National Corporation

business

own

and he is protected in

1701

other leading Ex¬

effective

will

act

Nov.

12.

alternate

Mr.

the

floor of the Exchange for Christo¬

pher K. Coates and will make his

headquarters
York

the

firm's

New

City office, 61 Broadway.

proved materially and consistent¬

Nashville

has

been

im¬

For one thing
charges have' been
reduced through debt retirements

true that the. bonds

and lower coupon

tional

ly in recent

PROFIT

SMALL, MEDIUM,

LARGE,

—

MIGHT

buying and selling eye-glasses, roller coasters,

other kind of property,

or any

mission would think of
kind between seller
to

SEC

THE

If this dealer had been in the

CALL UNREASONABLE.

business of

jewelry

WITH

INDIVIDUALS

CERTAIN

OR WHAT

establish

stepping into

AND

or com¬

controversy of any

buyer, and by such

PROFIT

THAT

bureau

act, attempt

ITSELF

CON¬

annual

the

basis

Louisville
have

years.

fixed

its'

business.

different from any

other

This attempt to regulate profit margins by con¬

tending that

one

who sells securities is acting in

capacity is merely
rights, and

an excuse

fiduciary

to abrogate personal property

assumption that is based

attitude that he who sells

stock

upon

the unrealistic

bond is in

position

legally different from that of him who sells anything else.
If

ceiling is to be put

securities then

profits made by dealers selling

should be

one

placed

everything sold

over

by anyone from doctors' fees to clothing, shoe laces and
what have you.
THE

AMOUNT

ESTABLISH BUREAUS TO REGULATE
OF

PROFIT

MADE

EVERY

THING

THAT IS BOUGHT AND SOLD ANYWHERE IN AMERICA.
GIVE THESE BUREAUS POWER TO DETERMINE HOW
MUCH

REASONABLE.

DON'T COMPLY.

PROSECUTE

THOSE

WHO

• of
the
depression
exception of 1932.

year

every

with

the

Secondly,
ville

Louisville

Nash¬

particularly

strong

position
It

carries

AMENDMENT

PASS A CON¬

REPEALING

PROPERTY

RIGHTS AND PUT THE NEW WAY OF LIFE INTO THE

CONSTITUTION.

the

large volume

vulnerable to possible heavy
highway competition.
Industrial
development of the South has

opened up
has

also

market

traffic

new

expanded
for

the

sources

the

and

potential

company's

coal.

Certainly it may be taken for
granted that Atlantic Coast Line
will

bend

every

effort

avoid

the

possibility of jeopardizing its
equity in this profitable and im¬
portant subsidiary. That

Coast

make

Line

rapid

debt'

the

fact

will

towards

has

obvious

other maturities

liens

few small

which

would

hardly be suitable for open
ket purchase operations.

mar¬

4s-

can

secured

second lien

lines.
lien

the

bulk

the

Be A

addi¬

1,139 miles subject only to
$7,970,000 of divisionals. This con¬
stitutes

Minsch, Monell Co. To

miles of line

owned

This

relatively favorable
position is not sufficient to

ration
firm

warrant assurance that the bonds

will

undisturbed, how¬
ever, when considered in the light
of the company's entire debt posi¬
The 1st Consolidated 4s

are

out¬

in the amount of $50,863,000 while there are only $34,479,000 junior claims (excluding

not

event

taken

that

Partners

William

Leonhard
S.

partnership and the
be Minsch, Mo¬

will

Boveroux

Smith.

The

will

the

firm

Minsch,

Harold

and

of the
substantially

personnel

remain

unchanged.

standing

the

L. & N. Collateral 4s) out¬
standing ; against
the
property.
This junior debt does not afford
,

adequate

the

senior

cushion

debt

the

reorganization. Interest

protect

event
on

the 1st

Defaulted RR. Bond Index
The defaulted railroad bond in¬
dex

Pflugfelder, Bampton &
Broadway. New York
City, shows the following range
for Jan. 1, 1939, to date: high—
44; low—14%; Nov. 10 price—41.
Rust,

Consolidated 4s and the divisional
liens

amounts

come

from the

of the

to $2,357,000.
In¬
properties in three

past ten

years

Timely Suggestion

would have

brokers
on

blocks

for DEALERS

Invite inquiries
odd lots of

PRODUCING

HIGHEST GRADE RAILS

OIL ROYALTIES

We also maintain nei markets in

SEABOARD

We
will

ALL FLORIDA

specialize in
gladly mad

filed with

SEC

Royalties and
schedules

you
on

our

current

offerings.

6s, 1935

Inquiries invited

Bonds & Certificates

TELLIER& COMPANY

l.h. rothchild &

for

Coast

Line, should, eventually be forced
to go through reorganization. It is

Co.

firm

tion.

name

nell

would

remain

Partnership

Minsch, Monell & Co., Inc., 115
Broadway, New York City, has
changed its status from a corpo¬

Members

The sanctity of the 1st Consoli¬
dated

and

are

2,783

that

earnings dre
running in the neighborhood of
$18,000,000
to
$20,000,000
this
year. Now that the 5s, 1945, have
been called for redemption the
company

lien

able

strides
appears

reduction

from

THEN WE'LL ALL LIVE UP TO IT— granted in the

JBUT WE WON'T HAVE A FREE AMERICA ANYMORE.

post-war

of bituminous coal which will not

non-callable

STITUTIONAL

for

BUT BEFORE THIS IS DONE ALLOW prior to-1952 except

THE PEOPLE TO VOTE ON THE SCHEME.

would

enough on its stock
to support the collateral bonds in

years.

The securities business is

charges

present

Nashville

earned

traffic

STITUTES FRAUD.

refundings.

first

specialists in rails
11 wall street
HAnover 2-9175

Eastern

42 Broadway
n.y.c.

Tele. NY 1-1293

Oil

Royalty

Dealers

Association

Established

1931

New York. N. Y.

BOwling Green 9-7949

Teletype NY 1-1171

THE COMMERCIAL & FINANCIAL CHRONICLE

1702

cidents may cut the over-all profit
margin for the year to a level be¬
low 1941.
1

Block Offerings

The

Stocks

Fire Insurance

income,

ferred and

Company Stocks

Inquiries invited in all
Unlisted Issues

York Stock Exchange'

flew

120 BROADWAY,

leading exchanges

able

NEW YORK CITY

(L. A, Gibbs, Manager Trading

bonds

much

Department)

the other.;

end

year.

Inas¬

record November 20,

Bishopsgate, E. C 2

8 West

"dividend of, $1.25 ,per share, payable
December 10,1942, to stockhcildera of

operating expenses may
charged against taxable in¬

Teletype—NY. 1*124S*49

Bell

Dtgby 4-252S

Telephone

Bonds, on the one hand/ and .tax¬

Telephone: BArclay 1-8500

NEW YORK

t WALL ST.

3
The Directors of Columbian Carbon

Company • have declared

Burlington Gardens, W. /

1942, at 3 P. M.

64 New Bond Street, W. l

■

it is safe to say that the
tax-exempts of most companies,

Treasurer

TOTAL ASSETS

will be free from the normal'tax

and,

some

from

extent,

£98,263,226

the
THE BUCKEYE PIPE LINE

■

"All in all, the. insurance
com-;
panies have very little to worry

about in the

new

—

the work necessary
their reports. That, at
least, they have in common with
all the less favored and less gifted
to prepare

Insurance Stocks

Business executives of the nation should

have, and probably did,
corporations of the land.breathe a collective sigh of relief when the Revenue Bill of 1942
was finally enacted into law.
Perhaps they, feel very much like the
old darky who was convicted of horse-stealing and was overjoyed Tomorrow's Markets
to receive a sentence of 50 years instead of "life." In any event, con¬
sidering some of the proposals that were made along the way (and of Walter
which, the original Treasury plan <$>was probably the worst), the new
■
removes the danger of insolvency
bill is regarded as almost a model, from many companies in which > ■ (Continued from page 1703) :
of painless extraction. Despite the they have invested. As a;matter this time is
dangerous. There
fact that the new taxes are far;of fact, the health and prosperity
is

Whyte
Says—-'"/■

ever

known

despite the fact that shell-shocked i Its; income and assets necessarily

lated, the ultimate result has been
quite generally approved.

is not dependent

single

any

Most fire and casualty com¬

one.

Insurance
companies, in par-1 panies today are more widely di¬
versified than ever before in their
ticular, again got off quite easy.;
1
:
In fact, they could not have fared history.
Back in the Twenties, the in¬
much better if the bill had been
•

field

vestment

drafted by the industry

not

was

broad

itself with:
as it now is and many insurance
an eye to its own individual ad-:
vantage. Curiously enough, most companies had 20% or more of
modifica¬

eleventh-hour

the

one

their funds in railroad bonds and

stocks,

v
'
i
importance served to
lighten the tax burden for insur¬
.Consequently their depression
ance
companies very materially problems were greatly aggravated
*~rat least in comparison with the by the deterioration in these se¬
.various drafts that had previously curities. It is a tribute to the flex-r
seemed likely of enactment.
ibility and vitality of the insur¬
It so happens that the insurance ance industry that a catastrophe

tions of any

Williams

York, October 24, 1942.

One

($1.00)« Dollar
the Capital

has. been declared on

vember

20,

1942.

col¬

my previous two
I advised that the

mar¬

ket showed indications of

re¬

Australia and-New Zealand
J. R. FAST, Secretary.

banFof
frpmet Ite.IIogg
-A
been

Inc.

quarterly dividend of $0.40 per share has
declared on the stock, payable December
to Stockholders of record as of the

1942,

10,

close 'of

business. December

JAMES

21,

1942.

WICKSTEAD,

the

Fund

Reserve

Liability of Prop.

dividend

Head

per

Stock ($10.00
value) of this Company, payable December
to stockholders of record at the close

par

of'business November

and largest bank in Australasia.

13, 1942.
J. R. PAST, Secretary.

870

branches

New

back into

efficient

traders

23, 1942 to

this

could

kind

taken

species of
fortuitous

other corporations.
dual nature of its
softened the
Of

apply to

However; the

the

burden

because

for

them.

insurance company

people's money and is entitled to
every encouragement in the, bat¬
maintain

The change in the capital gains
and
the
relief
provisions

not

companies in debt,

to mention

the

credit allow¬

public utility preferreds,
are
all
important to insurance
companies.
These features will

ance

I. W,

Suggest getting
rally to say 2Vz.

fair

Armour; is

the downside to about slow

114

the

here.

such

but

Such

tie

unwise.

seems

them

adjust * and
assets without

penalty. and
ance business has always received
many
of • their- holdings,- which
such
encouragement, both from, looked well nigh hopeless a few
State and Federal authorities. - »■ weeks back, can now be. "bailed
or -retained /according
The primary obligation of an out"
to
•insurance company is to its pol¬ whatever course the judgment of
their respective finance commit¬
icyholders rather than* to stock¬
or

rally to

not hold stock below

as
you still
positions) are com¬
fortably above their stop
levels.
As
long they stay
above them they can be held.

More next

'■ >

sis

• -

•;/ {The
urticle

time

views
do

positions, or rather
half positions, remain as fol¬
lows:
''■',./•

those

They

are

thn
an%

principal Towns in

;

Chgo.

tached

with a stop at 49. "I might
point out that while I don't
also been protected and benefited. cerned, most fire insurance com¬
Both groups are vitally interested panies will probably pay out less advise new purchases at pres¬
.in the tax situation as it applies" for 1942 than for 1941. This is ent levels the. effect of dy¬
to the insurance business.
New due to the fact, that normal and namic news can
change * the
rates
.corporate taxes are doubly im¬ surtax
apply mainly to outlook
overnight. S h o lild
portant to an insurance company underwriting prof its —f and there
our forces, for,
example, < en¬
because (1) it pays direct taxes won't be
any this year because
on
its own income, (2) it owns of the ocean marine losses last gage Rommel's army before

meier of the Northern Trust Co.'

years.

securities

other com¬
panies which, in turn, are also
subject to taxation.
Thus
the
lighter burden of direct taxation
; which

many

insurance, companies have

enjoyed

may

be regarded

suit¬

able compensation for the double
or indirect
taxation which they,

'as

investors,

automatically

must

incur.

spring.

direct taxes

cases

where

are

con¬

under-1

writing was not affected by the
ocean
marine
business,
larger
premium writings may result in a
statutory underwriting "loss" so
that either way, there will be
little to

Obviously, in view
of this situation, there will be no
liability for excess profits taxes.

easement
of

the

1942

certain

fea¬

casualty
companies, ac¬
cording
to
present indications,

Bill

was,

will have

Tax

favorable underwrit¬

therefore, most gratifying to in¬ ing balance which will be subject
executives not only be¬ to all taxes. The first six months
it will permit therm to dis¬

charge their
without

own

tax obligations

were

extremely profitable but rate

reductions

Automobile

lines

difficulty but because it and the increase in industrial

Evan V.

Chicago Vice-President of the

Investment Analysts

Club of Chi¬

cago, it was announced on
New

Governors

announced

are:

T. D. &
You

late in the wrong
sues

selling for

seldom

have

First Lieutenant

Chicago,

University of Chicago.

win ,.W.

Boehmler,

Dean

Er-

now

stationed at

Jackson,

;

Major

Harry

Taylor

has

the been in the armed services of the

School of Commerce of the Cen¬

United

15 months.

College, has been
of the club's

Committee;

He received

the

States

First

for

approximately

was

World. War

Captain in
and

Douglas called into service before

was

out

in¬

Hayes of Woodruff, Hayes & Co., volvement in the present hostilP

Chairman

say.

real

moves.

example

sell at 2 %

Is¬

here at under 2.

followed

stocks.

ommended
was

many

United States Army.

you specu¬ Education

Pitts ton for

Chicago for

his training at Miami Beach, Fla.,

Co., St. Louis, Mo. appointed Chairman

speculate but

tional Bank & Trust. Co.,

tral Y. M. C. A.

aviation

George t Daniels of the City Na¬

of the

5jC

naval

in the air service command, of the

the

5fC

Tenn.

1f(

;

Russell G. Longmire received a

and

picture can
change from one of dullness
to one of rapid advance. : -

the.

Nov; 9. commission

Arthur J. U'Hara of the Northern

market

;

SUDAN

Lieutenant Burt has been

resident

Trust Co., and Corliss D. Anderson

surance
cause

next week's column is written

tax.

The,

The

tures

As far

the

:
Herbert J. Burt has received a
Lieutenanf, senior
grade, in the United States Navy.
Analysts Elect
He is at present going through a
Shierling of Moody's period of training and will be at¬

forces.

and

Cgo. Men In Armed Forces

President and William E. Stiegel-

tees dictate,

in all the

corporation earnings. '

Investors Service has been elected

holders but, in serving the inter¬
ests of the former, the latter have

King William Street, E.

fects of the 1942 Revenue Act

£3,000,000

commission of

£3,600,009

12), Harry E. Snyder, CPA, and
Professor of Accounting at Loyola
University, will speak oq the efr

ternational

Harvester

Branches

stop at 35. Allis Chalmers 23
with a stop at 241/£. And In¬

FUND

of tht

presented

those of the author only.]

Air Reduction at 30 with

necessarily at

[coincide with

Chronicle.

Your

Thursday.
expressed

not

Cairo

LONPON AGENCY
and

10.

hold (half

■:

RESERVE

EGYPT

Cairo

FULLY PAID CAPITAL

14. But I would

say

Office

stocks

of EGYPT
Head

Commercial

that

mover

It is dur- funds

,-//

V. 8;

NATIONAL BANK

change in the position taken

arrangements with Banks

MORRIS, Treasurer
■
Philadelphia, Pa.

still hold it.

112

October 27, 1942

with the out.

In the meanwhile there is

these

THE UNITED GAS IMPROVEMENT CO.

swinging from about

permit

strong, healthy: strengthen their
Fortunately, the insur¬ serious handicap

position.

there¬

business,

law

is»available

is essentially a custodian of other

tle to

railroad

has fore, means a considerably larger
types windfall of salvage for many than
-4; accounting ever seemed likely.

well, perhaps, that this has been
.so

the

revival

life, again. .The

many

methods peculiar to the insurance
■business have further served to
.ease

come' to

business

impact of

while

taxes

in.

OFFICES:

throughout the

ing this^ anticipated dullness Sorry, I have no opinion on
favoritism but entirely of the "dead horses" still remain that I shall try to choose Colorado Southern 4x/4s. The
surprisingly enough, have
because it is governed and,
stocks; to recommend to you. best you can expect in Bliss is

by the same tax laws

investors,

interested

Berkeley Square, W. 1

Agency

spective holders of record November 30,1942.

range

upside.

29/Threadneedle Street, E. C.

re¬

industry has always fared un¬
usually well from the standpoint stride and the Josses absorbed_iri
of taxes.
This has hot been a a few short years. Of course, some

LONDON

10 cents per share on Common
able December

banking service
travellers

and

countries.

approximated I

dullness

With over

of Australia,

States

Zealand, Fiji, Papua and New Guinea,
London, It offers the .most complete

and

-The current quarterly dividend
of $1.25 per share on $5 Dividend
Preferred Stock and a dividend of

about 113 or a level
equal to the lows made: dur¬
ing the week of Oct. 24, Once
level is

all

and

support will

think the market will settle

George Street, SYDNEY

The Bank of New South Wales is the oldest

1/ 1942

appear at

this

Office:

has been declared on the Capital

Stock hove been declared, pay*

sufficient

--£150,939,354

ALFRED DAVIDSON, K.B.E.,
General Manager
.;
'

SIR
28, 1942.

Cents

30th

Broadway

of'Thirty' (30)

range must
be discarded. I now be¬

lieve

—

Aggregate
Assets
Sept., 1941

COMPANY

rally this reaction
now

£8,780,000 6,150,000..
8,780,000

-.-.-——

Reserve

£23,710,000.

recent

most

(ESTABLISHED 1817)

Paid-Up Capital

Treasurer

acting to 110. (Dow averages)
or
slightly beneath that fig¬
With

new south wales

NORTHERN PIPE LINE

*y.

ure.

Bank; Ltd.

Stock of this

■

New York, October

umns

Deacon's

Glyn Mills & Co.

per

Company, payable • December 15, 1942 to stock¬
holders of record at the close of business No¬

Associated Banks:'

Broadway

New

"A^ dividend

qualification.

this country

taxpayers died a thousand deaths i represent a cross-section of all
while the bill was being formu- j business although,. fortunately, it

however,

wei have of all major industries are imand, portant to the insurance business,

anything

than

greater

COMPANY
*/•.

Tax Bill except

in respect to

This Week

Smithfield, E. C. I

Charing Cross, S. W. 7

GEORGE L. BUBB

come,

surtax.

throughout Scotland

LONDON OFFICES;

CARBON COMPANY

Other invest¬

OFFICE—-Edinburgh

Branches

consist

largely of tax-ex¬
empt Government and: Municipal

Exchange

Stock

York

New

HEAD

COLUMBIAN

stocks: will be

common

almost clear of tax.
ments

Laird, Bissell & Meeds
Members

Incorporated by Royal Charter 1727

for ' both fire
and casualty companies will be
largely
tax-exempt....
Dividends
received on holdings of both pre¬

Insurance

High Grade

other

Royal Bank of Scotland

"solid" earnings, from in¬

vestment-

and,

DIVIDEND NOTICES

Bank and

Wanted

Members

Thursday, November 12, 1942

was rec¬

by advice ;to

better. I

see

you

Committee;

the

Arrangements ties. Major Taylor is at present

Lyle

and

barner of the Continental

National

Bank

Chairman
Committee.

of
At

the
the

Eikel- duty, in Chicago and his home is
Illinois in Oak Park.

Trust

Co.,

All

were

associated

with

the

Membership Chicago, investment firm of W. C.
club's

first Gibson & Co.

THE .COMMERCIAL * FINANCIAL CHRONICLE

Number 4124

Volume* 156-

Our

The Securities Salesman's Comer

Reporter's
Report

Prospectus

the

to the most, important step in this "plan to increase

business." From here on we will take up the job of selling these
''situations" after we have found them.
1 ',
;
/
;

tegrated operating systems in New
England.
;
1

Now
!

rmwM/ne.

Central

refinancing involved In the
consolidation program which will
yield one of the largest single in¬

part
we come

your

It has been stated in this column many times in the

•

believe
rather

the

than

past/that

efficacy of the sales technique that sells an

"security."

Years ago,

emission,*, has

'"County

client that your firm can not only bring'him the right se¬
curities at the right time, but in this method of operation, he will be
advised when he should "sell." That you continually follow a security
after he has bought it. Every client that is interested in this particular
situation is carded in your files.
All are treated alike. Selling is

the way up and in this way his funds are
accumulation of future situations when they arrive.

accomplished

released

the

YY-v*

;•

has

the Securities and

file "with

"A COMING MARKET"

Exchange Com¬
securi¬

new

"There are people in this country who will tell you that America,
including $14,500,000 of new
first mortgage bonds and $5,000,-* has 'gone soft.'
According to them, we have offered up our heri¬
tage to the idol of Easy Living for a mess of Governmental pap.
OOO^of serial notes which will re¬
ties

obligations in
Y;Y

place outstanding
the;program;

Treasury Money Kates
t ;By -

Americans

were hardy, they say, but we just can't take it any more."Speaking for a segment of Americana which we know rather
intimately — its investment dealers —we can state categorically

t,''■ Y

■

that

ilusY £ime

true.-

knows

groups of

;jquite

face

markets, with his fiscal
advisers,- the member of. the
Committee

funds, and if you've sold the "idea" of this whole plan,

don't try to be infallible—you

;

can't.

As you go along and build up

following that will buy these "special situations" from you,
always tell them that they can't expect the impossible, that you might
be wrong occasionally but that if you are, they shouldn't get hurt very

what counts, and that even if you
right six out of ten times they will make money and, of

much, that your general average is
are

only

Last of all call
on the people
who have substantial investments.
They make the
best customers, they save your time, they give you less headaches,
and in the long run you will find that you can work this idea much

•course,

they certainly can expect to do much better.

better with ten or

twenty fairly substantial buyers than a hundred

small investors.

X-

s;:

Investment Company Briefs
:

"The

Chinese

had

word

for

;

—

•

;

and
interest rates, of the bond and
details, including maturity

"Nor is

Whether

rosy

The

one.

par¬

United

printed at the top of the bulletin
in

characters which

this

insigni¬
judge to be

ficant

and

that

results. of

the"

ahead

road

Nations have yet to win the war

modest over-subscription.

the

ticularly

note issue which induced only a

indisputable Harvard Chinese.

until

can

that

job'is done there

business

out of the

usual.

But

changes which the

would

person

"The

characters,"

the

explains

"are the Chinese for
In
Chinese,
the
word
isrlorging. in this country, far- .'crisis.'
crisis is derived from two charac¬
will, not .be known until he an¬ sighted
investment
dealers
are
nounces the terms of the next is¬
beginning to see the creation of a ters-Danger and Opportunity,"
sue/provided of course this does >new market—ra bigger, broader, Taking this striking combination
of meanings as its theme, the bul¬
not involve a reopening of "tap more important market than they

operation have tended to soften
up Mr.- Morgenthau, in any degree

bonds*". Y
Reserve

YYY/Y'. Y/.YY Y

have

p\.ri

Credits YYY

;

banks

Member

FederalReserve

the

Second

District, report¬

financial

rates

Government

Condition
ended

week

put

paper

dainfully

among

shirt'

prosperity

the

from

the

fort:

majority

have

will

little

pros¬

•

knowledge of investments.
likely

the

selling in it will
require greater ef¬

the

For

pects

markets

and

undoubtedly

the

being vastly
have dis¬
to
as
the

some

referred

Twenties

have

will

They

given

little

thought to the desirability of put¬
ting their money to work. They
will

possibly be more inclined to

buy champagne than securities.

"But this vast potential market,

believe, affords the

greatest

challenge — and
the
greatest
promise—to investment dealers in
the

that lie ahead."—From

years

the Nov. 4 issue of Lord, Abbett's
'"Abstracts."

XT'-'-!
$

;

Investment

have

jio

managers

company

doubt asked; themselves

the

question with increasing fre-r
quency since Pearl Harbor:
To
what extent, if any, should we
purchase United States Govern¬
ment bonds with company funds?
Obviously,
with

Interesting Situations
In

This market will be differ¬

ent

that

4, show

Nov.

'dirty
war.

in force on
of short ma-

statements for

will

position is

the

will vary
and require¬

answer

the; objective

ments of the individual company.

Municipal Field

sensible

approach to-this

XKaiser & Co. have just issued a

that

im-

portant

circular

containing

study

the

results; of the first 12 months' op¬
erations"
of"
the
Metropolitan
.

District of

Water

fornia,. with

Southern

Cali¬

number of interest¬

ing tables of comparison. Also in¬
is

cluded
vania

data

tion under the
and

Turnpike

ments

the

Bond

new

Pennsyl¬
Amortiza¬

Revenue Act,

report on recent develop¬

Fund

problem, we believe, is
taken by Manhattan Bond
and

vember

announced

report

We quote;

its

No¬

shareholders.
.

"The Fund has also

been

made

with

funds

which

otherwise would have constituted

the

Garquinez uninvested cash. Up to this time,
Bonds and it has not been the policy of the
Oxnard Harbor District. Copies of Fund to
invest in
Government
this' interesting, circular may be | bonds. since it is believed that
Toll

;

affecting

Bridge. Revenue

obtained from Kaiser & Co.'s New

-sYork-office, 25 Broad St.

each stockholder has his

own

the

"In
often

opportunity has
a companion
Periods of crisis have

past,

proved to

of danger.

pro¬

gram for this very necessary pur-

brought with them, and by their
nature, periods of oppor¬

very

tunity in other directions.

"Today, for example, many se¬
curities are selling at prices which
offer

returns—although

generous

earnings

better than at any
time in recent years. By compari¬
son

are

with 1937, for example, earn¬

and returns are higher and
prices are lower for most classes
of securities.
In the ageless wis¬
ings

dom

the

Orient,

there

may

to be a clue for the puzzled

prove

investor.

/.'V

"Crisis? Yes!

Danger? Undoubt¬
edly! Opportunity?
Opportunity
in
the past has often come at
times of grave crisis."
A

good

;

example

this,

think, is the remarkable growth
of Keystone Custodian Funds dur¬
ing the last ten months of crisis.
In that time" they have recorded a

$12,000,000 net gain in asset value
and have now passed the $40,000,000 mark!

.VyYYX\.fY;.' Y-

(The

President

wealth

Investment

Waldo Coleman,
company

had

Common¬

Company,

reports that the

net

assets

Sept. 30, 1942 equivalent to $3.20
per
share.
This compares with
asset values of $3.01 on June 30,
1942 and

Calvin

$3.55

Sept. 30, 1941.

Bullock's "Bulletin" for

Nov. 5 discuses the trend

liberalization

■

purchased
$100,000
par
value
of
United
States Treasury Notes, Series 'B'
11/2 s, 1946, this purchase having
-•

bulletin,

letin states:

before.

market

;improved by what

stitution, evidently are moving to
take advantage of the liberalized
discount

war

the millions of little people whose

ing to. the. New York regional in¬

had

ever

"This

'?•:"

your

sphere of operations."

during the past
Their markets steadily

Federal "Reserve System. v;( ■ Y'Yr part of the blame for the world-* it," says the Keystone Corporation
|
Thoivth ago, it is understood, ; wide depression which played in the current issue of "Key¬
havoc with their -own business, notes."
there was considerable debate
In fact, judging from the
when the Treasury Chief met
investment dealers have had to be bulletin,
the Chinese
had
two
'with this group to decide on the
words for
it
hardy to survive!
X, v
?
they are duly'

you'll

••••;:// Y ,/■ ■■ YY'YYY
conclusion, pick the right situations, be sincere in your efforts,;
' •-

without departing from its proper

dealers

progressively curtailed, them¬
selves stigmatized with a darge

the

However, the Directors feel
that the Fund may appropriately
cooperate with the Government
bond
program
to
this
extent
pose.

and

get your order.

problems and discourhave confronted in¬

12' years.

the

(Executive

•

vestment

he has

such

p. He met, prior to the holiday
in

noiX

are

•

indeed
any,
other
Americans have had to

for.ijthe impending war financing;. agements
r

accusations

•

"Few, -' if

definitely what he

has in mind with regard to terms

right, if

these

Secretary of - the
Treasury ! Morgenthau
doubtless

recommendation and sell it. Tf you've picked your prospect

I.OS ANGELES

■

way

If you
borrowings by New York City
wish, you might even bring out that some of the situations are so
banks now stand at $17,000,000,
under valued in price that many times your firm has found rit ad¬
against
$13,000,000
a
week
visable to bring these specific cases to the attention of other invests
earlier and a clean slate on the
ment firms after all of your clients have made their purchases.
In
corresponding date a year ago.
this manner other firms have related the facts to their clients, and a
y. Except for member banks in
continuing demand is thus created, at higher levels of the market,
the Boston area, however, the
for the securities involved. There is nothing wrong or illegal about
other institutions in
the sys¬
this.
Sometimes a stock is so cheap, that at ten times the current
tem do not yet appear as borprice it's a bargain, "at fifteen it's still cheap and at twenty it's attract
rowers.
.Such accommodation,
tive for income.
The point is when you bring it to your clients at
it
is
expected, may register
ten and vou make it possible for them to sell it out at eighteen (and
marked
expansion
coincident
still don't hurt the other fellows' client who buys it at eighteen) you
with the next Treasury financ¬
are doing a constructive merchandising operation—nothing less, and
ing which is designed for bank¬
nothing more.
Y (YYYyXY Y;YY- ing subscription. ;
•
rBy this time your client should begin to get his eyes opened., He. s fa As ' explained
when discount
hearing something that is different.
Here is a fellow who is telling rates were' lowered, the purpose
him, come join with us, we will not only help you invest right, but we is to encourage borrowing by the
are not going to'leave you sit out there alone with your stock or your
banks and. avert the need for any
bond after you've bought it.
You are with us.' We are going to sell immediate general revision down¬
someday too. So are the rest of our clients, and we are going to tell ward
of ; reserve
requirement
you when to do it. ■ 'Y'•
Y
Y ^ Y
Yv^^YYY'Y:Y'
;rates.;v4XX;.Y
Y. Y' ■' Y Y"'; '
Then after you've done this in your own way and in your own
Words—the simpler and more direct the better—pull out your specific
for the

JERSEY CITY

mission two issues of

your

CHICAGO

Once

completed

that

appear,

involved.

would,

\fcentraF Maine

along, and that they all make their purchases at approximately
the same time and around the same price levels. .; Step four, explain

Com-

marketing of the new securities

the past year we have noted many profits of
cases exist.
Stop to think a minute—isn't

come

operation

INCORPORATED

63 Wall Street, New York

would finally be opened for the

situations that periodically come up in the over-the-counter markets,
Use illustration by quoting actual cases.
There are many of therm: In

this

L~S

}

Light

request

s
*

•

com-

jpany for their sanction.
»;

„

Power

Lord, A.bbett & Co.

Cumberland

the

and

5:....i

placed

been

now

before stockholders of the

]pany

•

from 50 to 200%: These
this something to "crow
about?" It's the truth:
Then why not tell the story to the people Who
don't know about it?
Back it up with facts—you can do it by quoting
actual cases.
Y -Y:'
•'vY"-'' .•Y.:YY: YY'.''V
Second step—after you've opened up a new field of exploration for
your client, and you've opened his eyes to something that, he didn't
know even existed; explain how you make research and studies of
various companies. Not the details of statistical analysis, of course;
but the high lights of how you "specialize in digging them out." Your
research department, your trading department, your sources of infor¬
mation, your trips of inspection to actual companies themselves, your
contacts with company officials and the important place of careful, acT
curate, analysis in making the final determination of whether or not
a
certain security is a "buy" and an "opportunity'Y-these are the
things to talk about.
Y*'
!,
'Y'-'*
YYY YY;'YV
Step three, explain how your firm usually goes into these situations
for its own account.
Explain how the buying is done quietly, so as
not to disturb the market.
Tell how a certain limited group of your
clients avail themselves of these special opportunities every time they

*•■•••

The merger plan, approved by
Securities and Exchange Com-

■

"idea''
of the

in the lush, markets
'Twenties, everyone was buying a share of stock in something. Back
in those days most of us. sold a "security." We selected a security, or
our firm selected one for
us, and we took it out and peddled it.
People bought, and that was that., Of course, such, a method of cre¬
ating business will not work today.; Yet there are some few salesmen
in the securities business who are plugging along on this same old
line.
No doubt, many others who have followed along similar path¬
ways have found present day security selling unprofitable. YYYXXY
After all, we are not handing out a "tip," or a so-called sure
thing. We have made studies, we have accomplished research. In this
plan of selecting special situations for. our clients we have done the
necessary "spade work" beforehand; in order to justify our faith' id,
the soundness of our recommendation. Such being the case, we cer¬
tainly have something unusual to offer. We have an opportunity to
present that is out of the ordinary. Here is a plan for future profit
making, of which our clients can avail themselves, not once, but as.a
continuous operation, as many times in the future as we are enabled
to bring situations before them.
(X.'Y V;r Y' (-YYY;YYYYY(X
■4:
So we go to our clients and. we explain in simple language just
how* we propose to help them make some money. First step, tell them,
where the security is unlisted, about the over-the-counter markets,*
by explaining that contrary to general conviction, some of the most"
exceptional investment opportunities, and biggest bargains, aVe riot
•/ only on .the exchanges but in this great national hook-up of dealers
who trade thousands of securities daily from coast to coast. Tell them
how some of the most astute investors make some of their biggest
commitments—not on the stock exchange, but in certain outstanding
-

AFFILIATED

(Continued from first page)
Maine Power Company of

•.

A PLAN TO BUILD UP YOUR BUSINESS

1703

state

toward

laws

gov¬

erning the investment of funds by
institutions and trustees.
A bill
now

the

before

Pennsylvania

Legislature is cited and the
following quotations from an ad¬
dress by Albert W, Whittlesey in
support of the bill and its objec¬
tives are given:
State

four

major objec-,
be attained
through the adoption of the rule;
"There

tives

are

which

would

(Continued

011 page

1707)

THE COMMERCIAL & FINANCIAL CHRONICLE

1704

This

FLORIDA

Thursday, November 12, 1942

circumstance,

Insurance

together

Corporation, in a re¬
Oct. 15 last, revealed

with the steadily mounting bor¬

port dated

rowing by the Federal Govern¬

that

ment for the prosecution of the

throughout the country held an
aggregate of $3,493,879,000 of State
and Municipal bonds as of June

FLORIDA
competitive

Last week's sale at

bidding

Prudential Life
of its

the

Insurance

Newark,

Co.,

holdings of $14,100,000 State of
New Jersey 3%% highway im¬

provement bonds to a syndicate
headed by the Bankers Trust Co.,
ot New York, served to dramatize
the policy of partial liquidation
of municipal holdings by insur¬
ance companies that has been in
vogue for some time.
Nor is it
necessary to
look afar in order

management—the

terest rates, lie stated.

the Federal administration's drive
for elimination of the tax-exemp¬

material¬
ly
weakened.
An
outstanding
example of this fact was the re¬

tion

municipals,

was

fusal

Michigan voters to con¬
in office Senator Prentiss

tinue

ing
Its

govern¬

reasons

the

be found in the fact that

can

able to obtain a
higher rate of return on the newer
Treasury issues than that obtain¬
able
on
their holdings of top-

companies

are

Mention is
fact, for example,

municipals.

grade
made

the

of
1962-1967
specifically designed
for life insurance companies and
Federal

the

that

experience in handling Flori¬

issues

gives

municipal
to

inquiry

any

ally

with these

rates

regarding

and

from

bonds

obligation.

ad¬

abortive attempts of the

the

bonds, option¬

the

and

interest

bearing

1944

between

5%,

carrying the

; interest

for new
rate of

same

present

The

R.E.Crummer & Company

plan

referred

was

greater detail in these columns on

CKICACO ILLINOIS

1ST NAT SANA IL0C

Oct. 29, page

1541.

"tap"

2V2S

IBA Files Protest With

other

longer-term investors—are
available
at
prices
figuring a

yield of almost 2V2%.

chip"

By way of contrast, "blue
State and

municipals in the same
maturity range have been quoted
to yield much less than 2%. The
matter of tax-exemption on mu¬
of signal import¬
companies,
and the other institutions engaged

nicipals is

not

to the

ance

insurance

in the switching operations, it is
pointed out, in further explana¬

tion of what is described

rep¬

change in thqir invest¬
ment policy.

resenting

should be

This liquidation, it

President, Jay N. Whipple, who
is also a partner of Bacon, Whip¬
ple & Co., Chicago, announced on
Nov. 2 its complete opposition to
the
commission's
proposed
bid
asked

and

rule,

price disclosure

The Association made

X-15C1-10.

the

public

text

submitted

the

statement

outlining

SEC,

great detail the reasons sup¬
porting its conclusion that the
rule is against the public interest,

impractical and unworkable.
statement

The

presented

was

parts—the proposed rule
in its general application, and in
its practical application to State
and
municipal securities.
The
first phase of the report was cov¬
ered in great detail in the "Chron¬
in

two

The second part,

icle" of Nov. 5.

response

of the

re-offering

the

strong

in the

evidenced

was

price

The

market.

New

3%s.
The bankers of¬
fered the bonds, which mature

Jersey

1948

from

1966, at prices to

of fact,

matter

to 2.10%.

1.10%

yield from

this

For

reason,

shall only

under¬

welcome

writers and

dealers, having served
large measure the
inactivity that has pre¬

offset

general
vailed

business

the

for

some

owing to the paucity of
municipal borrowings.
In disposing of the New Jer¬

time
new

dential

the

incidently,

bonds,

sey

high quality of the securities and
the
excellent
character
of the

municipal market in general. In
addition, the seller obtained a
handsome book profit in the op¬

1. It

the

remembered

must

that

too,

feature on
municipals is a valuable feature
to a great number of investors,
footh large and small, who con¬
stitute the principal market for
State
and
municipal
offerings.
Furthermore, with Federal taxes
attaining the maximum possible
peak, conservatively speaking, it
tax-exempt

this

For

least

the

other

and

reasons,

which

the

strong investment characteristics

generally,

municipals

that

expected

is
sell¬

future

any

ing by the life insurance com¬

panies

from

other

absorbed

sources,

the

mar¬

ket without causing any marked

This is

dislocation.

predicated

of course,
that such selling will not assume
the

unusual

assumption,

proportions

apparently

and

reason

there

to be¬

lieve that this will be the case.
In

connection

with

tax-exemption,
that

added

dicated

the

matter

it should be
result of last

elections—which

Tuesday's
voter

adopted

The .States and their

units

ernmental

which

public interest as

important

in¬

degree

realization of the need for

conservatism

governmental

gov¬

means

were

than

cent

or¬

were

sizable

proposed by
Md., and
San Francisco/ Calif.
Voters in
Baltimore rejected by a count of
3 to 1 a proposal calling for an

fate

The

same

ing at those figures. He said that
bonded indebtedness of the
city on
Sept. 30, exclusive of
revenue

number of bond

the

proved

amendment to

was

ap¬

issue

bond

liquidate

purchasing and marketing mu¬
nicipal securities and otherwise
municipalties

serving

State's general fund deficit

of
is

provision
however,

amendment,

the
de¬

future

signed to guard against a
deficiency

$30,000,000.

than

companion

henceforth

the

legislature
is
constrained to
appropriations to. funds

available

in sight.

The vot¬

of Texas, moreoyer,

turned

in¬

and

voters

Louisiana

$5,000,000

for

issue.

;

vestors.

general rule, however, the
trend was decidedly in opposition
As

addition

shown that the

could

and

unworkable

has

been

proposed rule is
not

practice be complied with.
It
would subject dealers to contin¬
gent liabilities, claims of rescis¬
sion and burdensome additional

which

costs

operating

many

would

Such

risk.

ford

obviously

af¬

dealers

forced

out

of business.

3. Further, the proposed rule
is

discriminatory

clearly

securities"

"exempted
fined in

paragraph

Section

properly,

the

care

(a)

has

(12)

for

the

exer¬

securities

of the Federal Government,

instrumentalities

yet
rule

would

its

agencies,

application

the

there

and

the

instituted

regulations which would detri¬
mentally regulate and seriously

impair the marketing facilities
States,

for the securities of the

their subdivisions, instrumental¬
ities

and

agencies, thereby ad¬
the facilities

affecting

versely
these

ment

units

mental

finance

govern¬

functions.

our

opinion,

enactment

Exchange
written

amended.

of the

Law

and

originally

subsequently

fund amounted to

$8,247,000 in
period

three-months

ing Sept. 30.

city had cash of $31,562, $7,180,

and $8,976 in the
street

the

general city,

sinking

fund,

re-

Hspeetively— Investments totaled
;
;

$9,231,054 in the general city,
$7,162,000 in the street railway,
and $14,780,738 in the water division.

$850,873

the city had cash
investments of

and

$3,679,055 in the general city di¬
vision of the sinking fund, cash
of
$139,261 and investments of

$6,808,000 in the street railway
division, and cash of $15,826 and
investments of $14,084,739 in the
water division.

The

surplus in the various di¬

requirements

June

amounted to

$3,956,450 in the gen¬
eral city, $4,500 in the street rail¬
way, and $1,831,878 in the water
division.
Of the

total investments in the

uled

addition to the investments made
for the

take

matter

final

action

the

Thursday, Nov. 12.

fi¬
committee previous to its

nance

hearing

before

the

approval of the program* Ed¬
Hopkinson,
Jr„
senior

ward

partner

Drexel

prompt

urged
plan.

had

Co.,

action "

the

Mr. Hopkinson stated
bonds could be re-

city

funded

now

favorable

in¬

market.

But, he

cau¬

tioned, there can be no assur¬
ance that efforts of the Admin¬
istration at Washington will not
be renewed to subject future is¬
sues

accounts of the trust and

retirement,

of municipal bonds to

eral income tax.

Fed¬

systems,. bringing

$36,091,039 the city's grand total
investments

its

obli¬

own

gations as of Sept. 30.! ■: • '.
Mr. Coughlin said preliminary
figures, indicate that the city had
an

that

fund, $10,854,300 of City of

Detroit bonds have been acquired

Economies Noted In Survey
Of Local Govt.
Local

Operations
have

governments

forced by

the

been

to operate with

war

greater efficiency as well as econ¬

according to a summary re¬
by the International City
Managers' Association.
Wartime
problems involving priorities, and
shortages in manpower, materials
and equipment have stimulated
omy,

this development.

Improvements in operating ef¬
ficiency reported by cities cov¬
ered by the study—30, represent¬
ing
all
population
groups—in¬
clude such methods as installation
of

budget

and

accounting

new

systems, central purchas¬

control

ing offices to effect economies in

buying governmental supplies, re¬
financing bonds at lower interest
rates and

retiring municipal debts

to save interest costs.

More efficient operation

mu¬

nicipal motor vehicle equipment
reported by several cities, in¬

was

installation

cluding

systems to

save

of
records
maintenance,

and oil consumption and re¬
pair costs; servicing of equipment
at night to keep it in use and
save
man-hours;requiring that
city-owned cars be housed in the
city garage at night and restrict¬
gas

of the cars during the day;
basis of the Asso¬
ciation's
survey,
are
installing
modern equipment where avail¬

ing

use

Cities also, on

able to get more

work done with
employes, and are operat¬
ing refuse collection trucks in
pairs so helpers will be busy
loading trucks instead of riding
to and from city dumps part of

fewer

the time.

accumulated deficit of approx¬

$5,000,000 on June 30.
This amount, he said, was cover¬
ed fully by deficit appropriations
in the budget for the fiscal year
imately

Methods
mental

business,

govern-:

reducing

travel

stricter

equipment

high-charging

over

of motor

instead r

city

the

official

control

leaves, repairing

sick

study

the

include

amount

local

economizing,

showe d,

private

gar¬

eliminating bill collectors
delinquent
ac¬
counts by mail, using auxiliary
ages,

collecting

On June 30,

1941.

at June 30,

On that date, the

railway, and water1 divi-

sions

This represented a re¬
$57,402,000 from the
comparable total of $3,551,281,000
of

duction

end-

for the

Co., Philadelphia, and Lehman
New York, was approved
Nov. 5 by the finance committee
and favorably reported to the City
Council The latter body is sched¬
Bros.,

nicipal

Securities

ac-

the

tent and purpose of Congress in

require-

sinking fund, $25,236,739 consisted
of City of Detroit obligations. In

relatively high level of the mu¬

rule

actuarial

were

optional
Philadelphia
expected to be made ef¬
fective at a relatively early date.
The program, which was present¬
ed to the city on Oct. 22 by Drexel

reiterate

would be in violation of the in¬

its

plan for refunding on a
voluntary exchange basis of ap¬
proximately $163,000,000 of. out¬

terest rate, owing to the present

4. In conclusion

that,

Govern¬

our

their

Philadelphia Exch. Plan

The

;;

than

fund

ial

Speedy Action Anticipated
On

sinking

visions of the fund above actuar¬

bonds is

protect from its effects...

markets

ly reduced scale.

standing

Very

been

ipal bond borrowings on a sharp¬

cised in the preparation of the

new loans, a circumstance, in¬
cidently, of still another indica¬
tion of a continuation of munic¬

de¬

Law.

city

the

authorized

institutional bond

the

f quired for the account of the

$2,000,000
|
building bond issue. The voterscalling

credit

$313,030,163 figure.

larger

ure

ments, and that investments

limit

thumbs down op another meas¬

engaged

industry

and

Mr. Coughlin's report showed

i of

the Texas constitution providing
for

faith

that assets in the three divisions

proposals

the

non

bonds, was $344,248,739.
Against
this total, there was $31,218,575 in
sinking
and
redemption funds,
which brought the net total to

posed
by
other
taxing
units
throughout the country,
v 1 ;; ,
|;
Among

premiums

gross

suf¬

was

had not been recognized in arriv¬

$32,000,000 water bonds
San Francisco, the plan
to issue $7,950,000 revenue bonds
to
purchase
properties of the
Market Street Railway was de¬
The

Coughlin said accrued in¬

terest and unamortized

feated.

Mr.

and,

last.

Cities of Baltimore,

issue

$313,030,163,
$320,589,327 on June

against

issues

bond

report by Edwin C. Coughlin,

Sept.

in the rejection of

seen

$7,559,163

Deputy
City
Controller, which
gave the city's net bonded debt

this

examples

Outstanding

reduction of

Sept. 30, the
first quarter of its current fiscal
year.
This was shown in a re¬

dinarily tax conscious.
fact

offer¬

riod from July 1 to

apparent that this year the

ers

whole;

b. Investors—large and small;

the

will

would be injurious to:

ditionally enhanced.

©f

the

statement

should

rule

not

that

enough of
the effects of the proposed rule
have been shown to demonstrate

is natural that this feature is ad¬

;

believed

dealers could not absorb or

eration.

the

foregoing

ob¬

Co.

Insurance

Life
a

op¬

follows:

Pru¬

price of 122.789, which
elegant testimony of both the

tained

for its

reasons

position to the rule as applied to
municipal securities.
This
text

policy of recent years
in refusing to assume additional
tax burdens.
As a matter of fact,
electorates

in its net bonded debt in the pe¬

from their

IBA

in which the

statement

the

decidedly

effected

not disposed to deviate

were

issues of much smaller scope pro¬

that

these sec-

ally

to be re¬

ing of $4,258,000 sewage disposal
system revenue refunding bonds,

that voters gener¬

indicated

sues

paper.

ceptable change in the munic¬
continues

ceived until Nov. 17

proposals involv¬

fered by a large

summarizes the

bond

currently seeking bids

local' elections

the

pertaining to the municipal field,
appears in full text in today's

©bserved, has been carried out
without occasioning any per-

structure

ing the creation of new bond is¬

the

give in this column that part of

ipal

Results

held Nov.

banks

ported

SEC

lociation of America, through its

commercial

30, 1942.

optional

call dates and at 3J/4% thereafter.

ministration to achieve its objec¬
tive.

outstanding
callable

1953

glad

We will

bonds.

answer

them at

city's

comprehensive

background of familiarity

Brown, who was the spearhead of

—

Our long

The refunding plan provides for
the exchange of certain of the

Detroit Reports Debt
Relatively Small Total Of / Reduction Of $7,559,163
the purposes for such selling. Against Price Disclosure Rule
Bonds Approved At Elections I
The City of Detroit, which is
impetus, reports emphasize,
The
Investment
Bankers
Asthe

ascertain

MUNICIPAL BONDS

behind

forces

affect present low in-

war, may
l

insured

for
part-time
traffic;
closing swimming pools

police
work,
and

municipal

discontinuing

celebrations, festivals and band
concerts.
/
•
;
'
'
The

itself

war

with

causing
operation of

credited

can

economies in

many

local governments,
the
study.
Most
cities are saving on street light
costs because of dim-out regula¬

according

tions and war time with its extra

hour of

daylight. Relief costs have

decreased in many cities because
increased

employment, while
public improvements and
equipment are reduced or elimin¬
costs of

ated

materials

because

available

projects

Reduced

sential.

are

un¬

are

non-es¬

travel

because

of tire and gas

rationing, and the
35 mile an hour speed limit, have
made it possible for many cities
to release police traffic personnel
for other

duties

and to

how non-essential
and reduce

eliminate

traffic

signals
operation of others.

States And Local Units

Study Exemption Questions;
The

decline

completion of the current year's

in
property-tax
accompanying wartime
conditions is causing State and
local governments in various parts
of the country to consider revis¬
ing tax-exemption privileges of
churches, charitable and educa-r

operations without current def¬

tional

well as elimination of,
the previously accumulated def¬

turn to business use,

1942-43. \
"The
far

icit,

icit,"

trend
this

revenues

period

points

thus

Mr.

The

Municipal Holdings

Division

Statistics

Research

the

institutions

National

land

they

according to

Association

Assessing Officers,

Coughlin added.

Insured Commercial Banks
Reduce

revenue

and

of the Federal Deposit

Action
was
an

Louisville,

Ky.,

cited by the Association as

example of the

store such

ing status.

move

property

to re¬

to taxpay-

The Louisville city '

Volume

•

Number 4124

156

THE COMMERCIAL &
FINANCIAL CHRONICLE
1705

has put on the tax rolls

assesor

$4,000,000

worth

commer¬

cially used property owned by
church, charitable and educa¬

analyzed these taxes.

The Cham¬

the various other taxes which in¬

ber's Department
says:

tional institutions, for tax bill¬

surance

ing next January.

concern

premiums
the

and

nation's

bears

surance

"These special insurance taxes
constitute a heavy burden on in¬

with

common

other business.

"The

special

insurance

taxes

directly are paid by the insurance compa¬
66,000,000 nies and members of the insur¬

attorney is life insurance policyholders, as ance industry, but
they are even¬
as
those
preparing legal opinions relating well
who
use
fire, tually reflected in premium rates
to each of nine classifications into casualty and marine insurance for
and
therefore are paid
by the
which
the
property
is
being the protection of property, per¬ 'consumer' who is the
policy¬
placed. The city will attempt to sonal injury or liability. It is fur¬ holder. ■
.IMeanwhile the city

show

that it was not the intent
of the constitution to provide for

exemption of such property when
it is used for
purposes.
If

strictly commercial

the

taxation

the

city

The

largest

now

exempt is

will

permitted,
$96,000.

thrifty

individual

who

taxes

are

tween

Federal-State

income

taxes

and

tax

burden in addition to that which

special

insured

hidden

Jess

non-in¬

"Now
must

when

all

support. the
an

enormous

taxes,

our

war

Exchange since

people

volume

of di¬

is particularly in¬

upon

the

Board

which

would

policyholders, not

alone to prevent further increases

activity in the

war

where

declared

define

exactly the
Church prop¬

exempt properties.

erty, for example, would include
buildings "primarily and regular¬
ly used by its congregation for
public religious worship," along
with

pastoral residences.

Build¬

ings belonging to and operated by

Is Your Business Vulnerable?

schools and other educational in¬

stitutions, to be tax-exempt, must
not only be organized on a non¬
profit basis, but must "embrace
the generally recognized relation¬
ship of teacher and student."
All 48 States grant some
type of
property tax-exemption to relig¬

A Stock Retirement Plan
financed

ious, educational and charitable
institutions, the Association
pointed out, though most State
laws simply designate the
exempt
and

property
and

the

relieve

the

the smooth
passage of

ing from the death of

owner

your

by life insurance

will

assure

emergency

result¬

stockholder.

business through the

of any responsi¬

assessor

bility for taking positive action.

Under this plan, the lives of
stockholders

Major Sales
Scheduled

value of their
respective

We list herewith the

im¬

000

over—short term issues

cluded),
in the
the

which

are

near ^future.

successful

to
The

and his heirs will

names of

and

the

•

issue sold

last

;■/■.:
s'i
"*'

issues

major

size

scheduled for award in the
With

future.

tion to their
present

for

the

come

amount

the

prospect
time to

Offering consists of 50 individual issues of
bonds held in the city's sinking funds.

bond

,,»

•

n\.y c

We suggest that

offering

syndicate

Bank

can

.o.v

you, as a

Stock Retirement Plan for

$4,258,000 Detroit, Mich.
to

«
.

$2,274,000 Cincinnati, Ohio.

ft-

V.
s:...

-V","'

•

*.
••

on July 14, Issue
managed by First Na¬
York, Halsey, Stuart

New

'•>

•'

•

are

•

fairly compensated.
increased in propor—

continue without embarrassment.

Yet what misfortunes have

come

■,

,v.

.»••.

"•J, 0

••

*•

stockholder, give serious thought

your

own

business enterprise.

;;

..,

goes

hand in hand with efficient
management.

nerup

Co.

of New

York group.

November 23

$2,500,000 Chicago
trict, 111.
1941,

November,

Sanitary Dis¬

award

made

was

A Massachusets Mutual
representative will be glad to give you

full information.

Northern Trust Co. of Chicago, and associ¬
A

ates.

Co.,

formed by John

group

Nuveen

Chicago, was second high bidder.

Stale Insurance Taxes
Penalize
'

Policyholders

The thrift of all insurance pol¬

icyholders who would seek to
vide for their

pro¬

security is be¬
ing increasingly penalized by in¬
visible special premium taxes, li¬
censes and fees levied by the 48
States, the Insurance Departmenl
of the

own

Chamber

of Commerce

LIFE

INSURANCE

the United States reported on Nov

According, to the Chamber a
survey
by the Department dis¬

COMPANY

Organized 1851

closes that

special insurance taxes

amounted to

than $113,000,-

000 for the year 1940.
is 7% more

year
were

and

This amount

than for the previous

100%

similar

greater

collections

than
1922

when the National Chamber first

SPRINGFIELD, MASSACHUSETTS
Bertrand J.

Perry, President

•*

Co.,-Inc., and Lazard Freres & Co. Runin the bidding was the Bankers

Trust

ft ft
f

V."'-',.

from its neglect.
.

November 17

sold

V,.

issues

new

coming to market will be small.)

tional

'•

,/.••

pj A simple arrangement, isn't it?

some

♦«.

holdings,

improvements held to bare
necessities by the
demands of

policies,

near

expenditures

naturally is that for

family of the deceased stockholder

local

war-time

the surviving
stockholders,

The survivors, whose interests in the
business

are

event

•

Thus the

(Ed. Note—Very few municipal

bond

that in the

agrees

#v£ >

•

also appended.

are

insured for the

are

receive the proceeds of the insurance.
ft

the

Each

ex¬

come

bidder

for

runner-up

holdings.

his death, his stock will be
transferred

portant municipal offerings ($500,-

class

"B"

1940, tena

meeting

Governors

Nov. 4. Mr. Sweetser's
resignation
was necessitated
by his increased

during the past year, Con¬
now
is considering a bill

gress

Feb. 13,

many institutions of this kind tax¬

able

tered his resignation at

program

bus terminal

C.,

insurances
•

Sweetser,

property

commissioners

bring

Resigns As Curb Governor

and garage, assessed at $700,000.
In
Washington, D.

district

church-owned

as a

action

of, this burden of

taxes."

be¬

and

•

cumbent

extra

in, but to take
about reductions

Governor of the New York
Curb

therefore,

this

non-

sured.

rect

bears

discriminatory

the

self, his family and his property,

do they include

with

States are used for
purposes other
than supervisory service
to com¬
panies and policyholders, it is ob¬
vious that these
special insurance

by counties and municipalities in
nor

common

Inasmuch as about
95% of the taxes collected
by the

with

States,

policyholders.

utilizes insurance to
protect him¬

receive

parcel

building used
-

"The

bears

taxes do not include levies made

many

•»

ther pointed out that these
special

•

effort.

THE

1706

COMMERCIAL & FINANCIAL

Thursday, November 12, 1942

CHRONICLE

reformers, so amply blessed

gab, never did nor can do. . '
Our civilization is no longer regarded as a magnificent

genius and the progress we have made
are not now matters of pride. To have been even moderately
successful is a social crime; to have displayed any degree

accomplishment;

foresight

vanced

is a spiritual blemish; to
slight degree beyond mediocrity

even

our

acumen

lerations. apply

with the gift of hindsight -and

against our fellow-man.
; '
,
Our history is being re-written to prove

and un¬
implication,
the court appears to have enter¬
tained some doubt as to whether

not been

because

that all that

replacing fact and assertion taking the
That a decade of political propaganda
,

' /
! •v
real nature of man.
.
understand.the laws of his development.

factors:

Failure to understand the

Failure to

Failure

meaning of history. \ >
7.
7'"7
Failure to understand that a large proportion

•

wants

and take

"But I can't get

care

of the

bigger

now

are

needed for

war on

top

have

population of the world
capitalism, although used as a

help to make the most of what we have.
1_~

"Please
?--

centers

don't make

war

Long Distance calls to

activity unless the-y are-vital.-

Leave the wires clear for

war

traffic."

that

pseudo social philosophers,
gistic system.

turity. of the principal of. the is¬
not

sooner

ing

which, while sanction-;

postponement of interest/
appear to disapprove ah

would

plan, unearned

Southern

In the Colo¬

reduction.

absolute
rado

have an expression by

the-court

contingent interest on the general
mortgage bonds is waived
the

use

through

non-cumulative fea¬

ture, and this is essentially an ab~'
reduction rather than
a

solute

postponement.

Furthermore, recent discussion
would appear to cast some doubt

; :

to whether the interest

reduc¬

tions effected in the B. & O. case,
even

in the case of a matured is¬

could

sue,

be judicially ap¬

now

proved.

The Rule of

Absolute Priorities [

presented

testimony

last

August to the Senate subcommit¬
tee
considering the McLaughlin
amendment
to
the
Bankruptcy

describes the only true syner¬
-

Act, this very question was
One

raised*

expressed his belief

contrary to the

Consolidated Rock
there was

Products 3 case, because
not sufficient

McLaughlin Act

witness

that, were the B. & O. plan now
to be presented to the Supreme
Court, the latter would hold it

compensation given

stockholders.

the

Colorado & Southern And The

if the contingent interest is
paid." \
'

sues,

could not be maintained;
generic term of abuse by
-

.Corporation loans which
been above mentioned), but

actually earned, or until ma¬

til

ization the

(with ^ex¬

only a postponement of the inter¬
est thereon made contingent * un¬

only force by which a technological civilization
be maintained and carried on; that without such a civil¬

can

issues

nance

that it is the

shooting. So I'm asking your

abso¬

ception of the five-year 4%-% is¬
sue
and
the Reconstruction Fi¬

of intelligence resulting in an
offers a solution of social
of that. problems.
\
'7/;
v-'';;7,;\;,;
6.
Failure to realize that capital in its full sense is
nothing more than labor accumulated through, self-denial;

because materials

discussing

securities, the court

the, affected

change being in the right direction; that civilization is not
a football game to be controlled, by signals of an erratic
Quarterback and the .exhortations of an amateur coaching
staff; that only an extension
increase in moral
goodwill

passage,

lute reduction of interest on any,

possible the overthrow of a high civilization by barbarians
from without.
'j v7.777777','.- 7
7—^v
5.
Failure to understand That all; social organisms in¬
clude the law of change but that progress depends -upon

give the public all the service it

plan

that "there is no

remarked

sponsibilities of civilization while it-envies and endeavors,
to appropriate; the rewards; that it is not only in revolt
against the status quo but against progress. The accretions
of culture have been more rapid than the erosion of barbar¬
ism.
The existence of barbarians within has always made

"Then I could

later

certain junior

population of even the most civilized nations is not itself
civilized; that it resists and resents; the processes and re¬

were

the reduction in fixed interest on>

Here

of the

the

that

Act

"conform to the law of the land.''

nomics and the
4.

of;

have satisfied the requirements

fundamentals of r eco¬

understands the

unmatured obligation would

the

that the results have
worth while;, that our institutions must be destroyed
we have not
as yet reached perfection.
Theory

to be due to six

issues.

reduction in the interest rate

the

have ad¬
is a sin

form of proof.
by men who have
given no evidence of their own ability, . except inasfar as
they realize that a social order must be discredited before
it can be overturned, could have produced the, present at¬
titude of such a large portion of our solid citizenry seems

between, matured

matured

have done has been done wrong;,

'.Note the differentiation by the

■

court

than in- the case

future-, maturities"*

WliriCDb,

.rVIJOlxlcI

fore the

House

IcbLliyiilg

subcommittee

k/C*;

also called at¬
tention to the rule of absolute pri¬
orities embodied in the line of Sur

the

same

measure,

(Continued from page 1699)
versely affected and (b) will con¬
preferred, second pre¬
common shares, are form to the law of the land, re¬ preme Court decisions beginning
undisturbed under the plan. How¬ garding the participation of the with the Boyd * case and going
various classes of creditors and down to the Los Angeles Lum¬
ever, during the period of interest
stockholders.
ber Products 5 and the Consoli¬
modification, net income remain¬
The
question posed here is dated Rock Products cases. Any
ing after payment of all charges
must be utilized for the retire¬ whether, the terms of the plan plan for the reorganization of si
readjustment of its
ment of system debt or replenish¬ come within the framework of the railroad or
HOW
ment of working capital.
Discre¬ Act so as to permit the court to capital structure, it was pointed
(Continued from first page)
tion as to the direction of the use make such a finding. More spe¬ out, must adhere to the principle
We play politics for years with unemployment and of these earnings is vested in the cifically, do the interest modifica¬ enunciated in these cases. In other
tion provisions, in the absence, of words, if the interests of the cred¬
-yy
7-v:;
do nothing about the problem of the unemployable; neg¬ RFC. .77;
itors are affected adversely, and
Ownership
of
70.7%
of all any real sacrifice by the equity
lecting also the fact that idle capital is just as unhealthy
the stockholders retain their in¬
classes of Colorado & Southern holders, preclude the possibility
in our national economy as idle men.
terest in the property, the latter
of such a finding?
stock lies in the Chicago, Burling¬
must provide compensation to the
We no longer refer to the poor but rather to the un¬ ton & Quincy, which Operates and
Problem of Interest Modification bondholders for concessions which
controls the company. While the
ing of first
ferred and

DID WE GET THIS WAY?

der-privileged, as though their condition was due to cir¬
cumstances entirely beyond their control.
Men are no

longer considered essentially victim^ of their lack of ca¬
pacity, their ignorance and bad habits, but rather the vic¬
tims of exploitation.
We put the cart before the horse and formulate elab¬
orate plans to raise wages, believing that high wages make

prosperity instead of prosperity making high wages.
The term capitalism is being replaced by the word
management, as though they were synonyms, and as though
capitalism had an evil connotation or could be used as a
pejorative. Capitalism is a rational as opposed to an emo¬
tional or mystic economic system; management, a function
of

judgment, is the highest form of labor,
of the muscle.

which is not

restricted solely to the use

Our pioneer forefathers are no longer
individuals who hewed an empire out of

considered sturdy

virgin forests and
reclaimed sun-scorched prairies.
They were, in the vei>
nacular of the apostles of the new order, robber barons
who despoiled the poor and ruined the land, leaving us a
country without new frontiers, excepting those to be cre¬
ated by bureaucratic planners who believe that they can,
Joshua-like, command the sun to stand still in the eco¬
nomic heavens.
It is true that they wasted some resources
but they created a Nation, something which our oratorical

plan

does

vide

for

the

immediately pro¬

not

change in control
Colorado & Southern,.. it
any

Consider

the matter of the re¬

duction in interest on

the general

the bondholders make.

was

not be

Otherwise,

concluded, the plan would
legal.
*
i ;•

mortgage
bonds and the nonA pertinent observation is also
that holders of a cumulative feature of the contin¬
found in an article on "The Vol¬
majority of the refunding mort¬ gent interest provisions. ;
untary Adjustment of Railroad
gage bonds and holders of a ma¬
In the Baltimore & Ohio re¬
Obligations," by Hubert L. Will,
jority of the general mortgage
adjustment under the predecessor which
appeared in the summer,
bonds outstanding in the hands of
Chandler Act, it may be recalled,
the public may each demand the
1940, issue of "Law and Contem¬
two cuts in interest were effected.
election of two representatives to
porary
Problems," a publication
The rate on the RFC loan was
of the Duke University School of
the board of directors. Also, in the
changed from 5% to 4% and the Law. According to Mr.
Will/
event that contingent interest is
coupon on the secured 4%'%/notes
"One other element which will
not paid on the refunding mort?
of 1939 was cut to 4% in con¬
affect the character of voluntary
gage bonds, the IpTC (so long as
junction with a. maturity - exten¬
it holds a majority of these bonds
plans of which court approval is
sion of five years.
1
to
be
sought is the 'fair plan'
outstanding), shall have the right
In approving the B. & O. plan, doctrine
to
a
familiarly known as the
majority of the board of
the court declared that, inasmuch doctrine
of
the Boyd
case,
or^
directors.
as the RFC had accepted the in¬
lately, the Los Angeles Lumber
What the Court Must Find
terest
reduction on the road's Products case.
Since voluntary
does

provide

Section 725

of the McLaughlin

Act

the

Bankruptcy

note, it did not see
this point.3

fit to further

In the case
secured notes, however, the
observed "that we are deal¬

plans

are

requires the court to find that

the plan will

"(a)

and

class of credi¬

stockholders

consideration

reduction
rule

court

with an issue the princi¬
which has matured, and
therefore somewhat different coning here

Afford due recognition to

the rights of each
tors

discuss
of the

amendment

each

and

fair

class

ad¬

pal

not likely to involve any
of stock interests, the

absolute

♦Italics ours.

312

Supp.

608.

510.

228

482.

"Italics ours.

priorities enun-r

ciated by these cases will prohibit
reductions in principal or interest

308 U. S. 106.

Volume 156

secured

Number 4124

claims

without

Stockholders

the

Colorado

1707

Boldholders

COMMERCIAL & FINANCIAL
CHRONICLE

ade¬

quate compensation therefor

Compensation to

THE

What

Southern

wants

plan, the general mortgage bond-:
Holders

asked to take

are

interest and

to know aliout

cut in

permanently

MOVIES

sur¬

render their claim to that
part of
the contingent interest which
may
be unearned.

and good.

the
other hand, are
surrendering their

box office

rights to dividends," inasmuch "as

the entire

Stockholders,

of.

equity
additional

the4

hot

state that

securing
of

pense

benefits

its

surrender

the

debtor

Does

dividend

the

the stockholders constitute Suffi¬
cient compensation to the
general

mortgage bondholders?
the bondholders
and

actual

all,
real

while

the

jibbering idiot, but

In this connection, it
may
that no share disburse¬

vlt

would

seem

continued

Stockholders
while

their

Accordingly,
doubt

are

sacrificing

good

exists

the

maintained

substantive
to

rights.
of

measure

whether

the

plan conforms to the principle of
absolute priorities which is the
"law of the land."

the

.Supreme
Court
ex¬
pressed itself in Louisville Trust
Co.

vs.

Louisville, N. A. & C. Ry.

Co.,<> cited with approval in the
Los Angeles Lumber Products and
Consolidated Rock Products cases,
"any arrangement of the parties
by which the subordinate rights
and interests of stockholders are

attempted to be secured at the
pense of the prior

fclass

creditors

comes

within

judicial denunciation."
i

Under

ex-

rights of either
/:'

strict

interpretation of
McLaughlin Act, there ap¬
pears
to be adequate "basis for
questioning the legality of the
the

Colorado & Southern Plan of Ad¬

justment.

Nevertheless, it is

pos¬

sible that the special three
judge
court may

adopt a different attir
tude. It may view the legislation
constructively rather than liter¬
ally, and may feel that it was the
intent of Congress, through the
McLaughlin Act, to cure certain
railroad problems, of which the
Colorado & Southern is

one.

Such

attitude, coupled with expe¬
diency, might result in a favor¬

;an

able

judicial

decision.

Court review,

granted

Supreme

however, might be

-some

non-assenting

general mortgage bondholder.L

Finally, it
jSeqtion - 721
.

may be observed that

the

McLaughlin
Act gives the special three
judge
court the
power
to modify the
plan.- Modifications adopted by
the

court

mission

not

the

require resub¬
Commission pro¬

bad, but

attitude, better

male I

Williston

Broadway,

New
that

announce

Co.,

York

Gordon

Billard, partner

the

been

in
commissioned

give
his

(senior

grade),

been ordered to

City,
Youngs
has

Lieutenant

USNR,

and

has

report for active

duty immediately. The firm has
granted him a leave of absence
and

looks

when
an

active

forward

will

interest

able
once

the
to

time

resume

again.

the

seemed to be

saw

the

must,

of your couturier.

name

The Baroness

(apparently

wife—or

abashed.
Under different
surroundings he might laugh and hoot but not in the
Cotillion Room:
It's very grandeur and the
expanse of
starched white shirt fronts,
monocles, not to mention the sables and
Pierre's

minks,

scare

against

comes to

him into speechlessness.

Inside the

room

proper

caste

bedevil you. If you're one of the elect
you are shown
to a table on the main, floor
by the salaaming maitre d'hotel. If
you're
just folks you get a waiter who leads you to the
balcony where you
may sit and ponder on the quality below you who
disport themselves
like ladies and gentlemen. But don't think
because you're in the bal¬
cony you.won't pay as much. For when the bill comes
around, brother,
'11
-fin/-!
r\n+
.-1 i -tf
f
i^n
«x<TK
you'll find out different. /**>•£ course no
Of
opening at the Pierre would
be complete without that demon
keyhole looker-inner for the N. Y.
x rr\t t

avon

"Daily

News,"

And there he

•

"Scoop."

Ware

own

the

war

Life in

just

one
.

New:

current

board Air Line

situation

The Penthouse Club

some

Y
most

Sea¬

detail

the reorganization of the
Railway
will probably not be consummated

unique

restaurant

beautiful location,

•

Tuyl & Abbe
'

•

upon

possible

eration of the

in¬

legal

trusts

offset higher

costs

partially to
living and

'■

■

' *"

discussed

t\i

American
in

the

earnings

latest

ami

are

issue

Central Park

re¬
*

the north.

Serving

AIie

the

re-

stocks

estimates

taken

are

1.
ary

skilfully

prepared.

"In the proportions which these
stocks were owned by Selected
on

9/30/42, the estimated over-all

decline in
1942

•

from

110.96 to

"If

the

included

ings,

2. From

the

post-war
in

the

1942

refunds

were

estimated

over-all

earn¬

decline

low

April

Nov. 4, the Dow-Jones Industrials
moved up to 114.56 or 23.3%.

In¬

vesting Company Shares advanced
to

$3.67

81.7%.

i|i

particular issues is

19% (without including the
post-war refunds).

The

current

comments

:!<

issue

"Brevits"

dividend reductions,

taking for its authority recent fig¬
of the New York Stock

ures

change.

During

the

first

Ex¬

nine

from

months of 1942 estimated dividend

to 1942 on these stocks (in
proportions actually owned
9/30/42) would/be only slightly
over
2%.
However, the actual

compared with $1,470,124,000 in
corresponding period of last
year.
This represents a reduction

1941

the

earnings
in

serves

after special

are

some

re¬

instances, and the

1942 estimates

are

before such

re¬

payments

totaled

$1,341,422,000,

the

only 8.8% which, in view of the

extreme

fears

investors, is of

modest proportions.

serves.

"If the

actual

respond only

estimates,

1942

results

cor¬

roughly with these

the

earnings

will be nowhere

near

S. F. Reserve Bank

decline

severe

some of the more pessimistic had
rxr-o/4 i /->+orl
in
Q
rl
predicted novlior in the year, and
earlier
170QT*

will

still

"Is

earning power of
at
relatively satis¬

Federal
nounced

Cal.,
consider

utility

stocks?" asks the Nov. 5

are

compared with the 1932

Industrial

their

1932;

stock

lows

recent

above

prices

were

railroad

utility stocks

1932.

were

at
125%

stocks

32% below

control, Federal com¬
Government
disfavor,

conditions

listed

and

reasons

behavior.

for

earnings
this

are

inferior

The conclusion is that

Reserve

Francisco

for

the

of the term
Mr.

the

System
28

the

an¬

appoint¬

Bank

Wellman

faculty

San

unexpired por¬
ending Dec. 31,
is

member

of the University

of California where he is Director
of

the

Giannini

Professor

Foundation

Agricultural

and

Eco¬

nomics.

The

76% above;

Rate

petition,

Oct.

Wellman, Berkeley,
Class C Director of the

as a

1942.

lows

Federal

tion

lows.

Governors of the

Reserve

ment of H. R.
:|!

time

The Board of

leave

issues

Governors

the

System also announced

Reserve

Oct. 30

the

appointment of William H.
Steen, Milton, Ore., as a Director
of

the

Federal

Portland
Reserve

Branch

Bank

the
San

Francisco, for the unexpired por¬
of the term ending Dec.
31,

longer at such an
earnings disadvantage as com¬
pared with other classes of stocks

tion

and

ranch.

utilities

Telephone PLaza 3-6910

given

From the beginning of Janu¬
to the low of April the Dow-

earnings from 1941 to

these

only

war

Entertainment after 11 P. M,

action

year

Jones—Industrials—declined

basis

for comment.

but

food,

market

this

92.92, or 16.3%. Invest¬
portfolio which are included ing
Company
Shares
declined
the Standard & Poor's recent list from
$2.34 to $2.02 or 13.7%.

lunui,•

their recent lows

best

The

confirmation of their character¬
istics. Here is the record:

post-war

common

the

"Selections" in terms of estimated
1942

folder.

page

sli'

Investing Company

Shares of Group Securities. Points
involved are elaborated in a four-

issue of National Securities & Re¬

overlooking

early as previously anticipated.
Copies of the circular may be had
•

Distributors Group advises consid¬

Corporation's "Investment
Timing" service. Prices at recent

•

"To get the full benefit of a ris¬
ing stock market while retaining
income protection of
bonds,"

present low income returns

just issued by Van
Tuyl & Abbe, 72 Wall Street, New
York City, in view of the fact that

quest.

all orders received.

the

newfcircular

from Van'

would

common

SOUTH

Adjoining The Plaza

Railway Company

Qorfisidered in

"It

:!s

30 CENTRAL PARK

of 1%

diversification.
crease

miniT

$2,000 between Nov. 1 and
Dec. 31, 1942 are eligible for cash
prizes computed at the rate of 14

factory levels."

merry

mum

through changes in interest rates
by providing broader investment

Lynch,

name

awards. Salesmen who sell

protection
hazards of

"Trustees would be in a posi¬
tion to obviate the threat of
heavy
depreciation
in
bond
values

these

About Seaboard Air Line
The

nnnn

Danton Walker.
sitting with the

Yes sir!

rx/-»

was

very

aspires

omiroo

■

measure

against ever-present
inflation.

something) would love to have it! !"
Of course, the
whole thing is accompanied by a graceful lift of the
lady's paw to the
gentleman's lips. This delightful scene is repeated time and
again so
when a plain American comes into the
place and sees it he is

115

firm

suffering from unilateral astigmatism. Mono¬
cles evidently
being the only cure. Greetings were not those casual
affairs. No siree!!
It was "My deah-deah
countess, how chahming
you look!< And what a lovely gown!
You must, you simply

Gordon Billard With
Navy
J.

"It would be possible to obtain
some

come-qn-and-amuseIli,^«Cdm^^1

The Pierre (Fifth Ave &
61st) has a
show featuring the daughter of one of
Mexico's leading politi¬
cians. But tired of
dancing girls I stayed on a bench in the lobby to
see the real show—the
people who come there. Incidentally, if you'd
like to see what before the war used to
be described as the Conti¬
nental Set,
disporting themselves, drop in at the Pierre. Almost
every

round after another!

Research

announced its annual
turkey
periodically to remodel the contest. All sales of National Se¬
law in order to
keep abreast of curities Series and First Mutual
rapid changes in the fields of in¬ Trust Fund will be taken into con¬
sideration
in
dustry and investment.
determining
the

Selected

~($r. 10—beer and pretzels

National Securities &
has

sary

V'"

■

ing well-placed individual issues.

(Continued from page 1703)
"It would no longer be neces¬

new

827-.

ours.

should be given this field in seek¬

Investment Trusts

higher taxes."

) j," V '

■■

group prepared to hiss the villain,
heroine, not to mention singing between the

York

174 U. S.

If you approach this with

house). But if you go there with
to cheer the hero and the

Pierre's

"Italics

"//'

save your money

acts, you'll enjoy yourself.

who-

'''

bellyache.

Old.

■

If you'd like
something different, see "Conrad You Dastard," pro¬
duced and acted by the
youngsters who make up Leo Shull's "Genius,

Inc." (109 W. 45th).

just gives you

seven

AROUND THE TOWN

viding they do

not substantially
adversely affect the interest of
any class or classes of creditors.
•:

Straight Bourbon Whiskey—100 Proof —This Whiskey is 6 Years
Stagg-Finch Distillers Corporation, N. Y. C.

one of the finest
pictures of its kind.
"Seven Sweethearts"
(MGM) is one of those fairy tales about a
newspaperman with an unlimited expense account who
meets such in¬
teresting people.* In this case it's Van Heflin who
gets the assignment
to take pictures of the
tulip festival in a Michigan town. He arrives
to find all the inhabitants
outside their doors
piping on clarinets,
oomphing on bass horns or otherwise
disporting themselves as part of
their rehearsal for the
festival. Heflin puts up at a hotel run
by S. Z.
Sakall and staffed by his seven
charming daughters, among whom are
Kathryn Grayson and Marsha Hunt. These
girls have a problem.
They're all in love and want to get married but can't
until the eldest,
Marsha, takes the dive first. So Heflin is elected. But
he, with the
wisdom of a Solomon
picks the youngest, Kathryn Grayson. For a
\yhile it looks like nip and tuck but in the end both
Van Heflin and
Miss Grayson get together. It's a
delightful piece of escapism which
reminds you of ice cream
sodas, sweet ones. One 4s nice, two won't

the

being

creditors
of

some

though

participation

Milder/.. Older!.. Better!

Honeymoon"

noted

ments have been made since 1931.
.

BOND

BOTTLED IN

ruthless, scheming, suave scoun¬
drel, is first rate. The performances of Albert
Dekker, Albert Basserman, Ferike Boros and others contribute to
making "Once Upon A

are

merely surren¬
prospective right to divi¬

dends.

After

making

sacrifice

stockholders-

dering

are

SCHKHIM

and the

ex¬

rights

creditors?

bond, for his guests!

<>U>

American correspondent and radio

American become
friends, particularly when they are both trapped in
Poland by the German
army.
Kate leaves her husband, and
joining
Pat, heads for Paris. There are a lot of other
complications and situa¬
tions too involved to
go into here. But where they don't
pull at your
heart strings they convulse
you with laughter. The dialogue is
fast,
witty and always interesting.- Leo
McCarey, who produced and di¬
rected "Once Upon A
Honeymoon," has done an outstanding job. That
both Miss Rogers and
Carey Grant give excellent performances is by
now the
expected. But one of the best jobs is turned in
by Walter
Slezak, a newcomer to the screen. His
portrayal of a Nazi, who for
once is not a

the

being what-he is and tries to
ed, refuses to say anything. As Hitler enters
Vienna, the couple leave
for Prague with Pat in hot
pursuit." Eventually the Baroness

the

Schenley,

America's mildest bottled

(Carey Grant), suspects the Baron of
pump Katie. She, bored and disinterest¬

capital fund before
contingent interest can be paid.
'. In view of these facts, is it ac¬
curate

important, harmed

"commercial travellers."
reporter in Vienna, Pat O'Toole

provision requiring satisfac-_

tion

one

stockholders, and

involving similar sacrifice by the
general mortgage bondholders, is
the

humor is

pathetic understanding. The story involves Katie
(Ginger Rogers),
ex^burlesque-stripper from Brooklyn, posing as a Philadelphia blue
blood, who marries the Baron Von Luber (Walter
Slezak), one of
Hitler's

ers, since it improves their
in
the property. ' Of
to

have proved

may

sence of

serious. Its amusing situations are
high comedy at its best. Its
descriptions of the heart wringing sufferings of the
non-Aryans who
find themselves at the
mercy of the Herrenvolk is handled with
sym¬

However, " this . reinvestment "of
earnings in the carrier" is not
without benefit to the stockhold¬

benefit

only proved

flops but, what

industry. A

that lie chooses flowers

...

for her, and Old

thing but to poke fun at
what too often is stark
tragedy, is another. It wasn't until RKO re¬
leased "Once Upon A
Honeymoon" that a movie company came
up
with a story that knows not
only when to be funny but also when to

capital'.

working

many a war picture. Some were serious
Others intending to be
funny often turned out to be noth¬
of bad taste. These so called
comedies not

ing but models

all excess
earnings are to be ap¬
plied to debt retirement and re¬

plenishment

Hollywood has produced

Man

are

that

greater

consideration

1942.

Mr. Steen is the

operator of

owner

and

wheat and livestock

THE
1708

COMMERCIAL & FINANCIAL

1943 to. 1954 inclusive,
payable from ad valorem
For instance
in the State of taxes of which 23% is limited to
Impractical
Ohio, municipal bonds may be within the 10 mills constitutional
from
unlimited taxes, limitation, and the balance or
The impracticability of comply¬ payable
77% may be levied, if necessary,
taxes within the 15 mills limita
ing with the proposed rule and
The City
and taxes within the 10 beyond all limitations.
the bedlam that would result in tion,
contracted to furnish the success¬
the
distribution
of
substantial mills limitation. A block of such
ful
bidder
with a
marketable
bonds
coming into the market
blocks of bonds may be observed
have any combination of opinion approving the legality of
in the following illustration. Con¬ may
the issue which, of course, is an¬
sider for instance a new issue of these factors or be combined with
assessments
or
utility other important factor in munici^
25 or 30 million dollars' of New special
pal transactions.
York City bonds with 30 maturi¬ earnings or be supported by util¬
According to the published re¬
There are
ties, two or three different inter¬ ity earnings alone.
est
rates and
several different also bonds secured solely by de¬ port the City received on August
10th four bids for the issue as fol¬
purposes.
Most of the maturities linquent taxes—delinquent taxes
lows:'
'
<;
would carry a different price, and levied outside of the limit—de¬
100.637 for the bonds as 2V4S
additional price variances would linquent taxes levied within the
100.38 for the bonds as 214s
likely be found among the differ - 15-mills limitation, and delinquent
100.66 for the bonds as 3s
ent interest rates.
Every sale to taxes levied within the 10-mills
100.40 for the bonds as.3$s
a customer would require a check
limitation and/or special assess

price or prices which are
for determining the bid.

Would Handicap Local
Governments In Borrowing Operations, Says IBA
Price Disclosure Rule

(Continued from First Page)
municipal securities as a pairment or injury to the second¬
market affects subsequent
whole.
In fact it is probable that ary
new security financing.
It is in¬
in the instances of some munic¬
escapable that' the proposed rule
ipalities the market for their se¬
would be injurious to the second¬
curities would be almgst entirely
kets for

destroyed. Various practical oper¬
ations in the purchase and distri¬
bution of municipal securities set
forth later on in this statement

markets for municipals. It is
noted,
however, that the rule
would place a burdensome im¬

pact
upon
municipal financing
to illus¬ right from the start.
As applied to municipal secur¬
ities, the proposed rule would
Investors
exempt transactions occurring in
Clearly, the above mentioned the course of a public offering
any
such securities by the
adverse market effects would bear of
difectly upon investors. Any rule issuer thereof. It does not, how¬
or regulation that would tend to
ever,
exempt dealers underwrit¬
restrict the marketability for se¬ ing and distributing such issues.
It would appear to be entirely
curities would have direct and
seriously detrimental results upon impractical and unnecessary as

will,, we believe, serve
trate the effects.
.

them.

the sale as ments.
Mahoning County, Ohio with a
required independent bid
population of about 240,000, of

the

With

some

30 to

which Youngstown is the county
and other seat, has approximately $4,500,000

40 dealers in

the underwriting group

and

limit

would

some

inhibit constructive

largely

cases

mu¬

nicipal progress.

Effect

Inasmuch

The Industry
dealers in munic¬

pertinent and practical to ascer¬
the application
the ruling would have upon

tain the effect that
of

such dealers.
We

great many
would be forced out of the
that

submit

dealers

municipal business.
They would
be unable to risk the liabilities
that

would

confront

them

and

they could not meet the increased
costs and other burdens resulting
from attempts

rule.

exempts

period

ipal securities are the medium
through which purchases
and
sales
are
made,
and
through
whom the effects would focus, it
is

"any transaction
security during the 30-day

which

to comply with the

In the main this

increased

passed on
to the issuing municipalities and
the investors. Nevertheless, there
still would remain risks of contin¬
cost would have to be

gent liability, claims of rescission
and other costs from which the

ly offered.

the

date

on
public¬

bidding
it is the practice of the bidder
to determine the price or prices

(and most municipal
serial maturities

prices)

of
ion

issues have

involving a scale

at which in his opin¬
can be sold pub¬

bonds

the

expected profit and
deducted and the bid

licly, then the
expenses are

mined.

submitted is thus deter¬
Furthermore, the high

bidder

(and of course in

large

issues

the case

there may be

consisting of several deal¬
deal¬
ers) invests his own money or his
own credit in the purchase of the
issue
with the expectation that
the bonds will be offered and sold
at the price or prices used as the
base in determining the bid.

group
ers

and in some cases many

the initial offering
there may be changes upward or
downward in the general market,
Following

and accrued interest to

at par

with

premium

not

dealers

could not es¬

which might

other

has

and

576 different possible

over

in¬
long

factor

between

difference

The

bid was over 7
points thus reflecting the differ¬
the high and low

to the
particular
block of bonds.
The offering of
the issue by the successful bidder
was at a different price for each of
the 12 different maturities.
Another
example
that
will
serve to illustrate the point is a
block of Richland County, South
Carolina bonds which was also
in

ence

views

dealer

for this

value

market

given con¬ broadly advertised for public sale
measurement on August 4th last. This county
and marketing of the securities of includes Columbia, the capital of
that county.
Incidentally, in Ma¬ the State. The issue totaled $200,honing
County
bonds,
utility 000 unlimited ad valorem tax
earnings are not involved such as bonds issued for hospital purposes.
is frequently the case in the is¬ The bonds mature serially Au¬

sideration

municipalities.
units

gust 1st in each of the years 1493
to 1962 inclusive.
A marketable

of factor

legal opinion was to be furnished
the successful bidder.
According

the instances of larger

number

the

Ohio,

the

other

sues

combinations

would

combinations

even

greater. A dealer bidding for such
bonds must determine and eval
uate such of these

factors or com¬

the published report the

high

paid 100.515 for the bonds
There were other bids for

bidder
as 2s.

exist
the) bonds also by experienced
in the block or blocks of bonds houses including one by a large
under consideration.
The bid he well-known dealer at a price of

bination

factors as may

the measure¬
appraisal of an exceed¬
ingly large number of tangible
and intangible factors.

arrives at represents

101.053

ment and

between this bid and the

Let us consider for

found

various other

appears in the
"Valuations of Securities"

yet there

states,
book

under

issued
the

Ohio municipal is¬

and in those of

sues

the

background that

of security

tors

the

Valuation

the supervision of
Committee of the
of Insurance

for 2Vzs.

The difference

high bid
approximately 5 points.
|;

Central

instance the

obligations of New York City. Its
bonds do not have the varied fac¬

Point

for

Independent Prices
Independent "bid and asked" or
or
"asked" prices are not

"bid"

place, in the municipal markets
as may be the case in the record¬
ed auction markets.
The field
in which to endeavor to obtain

such independent prices
in the
municipal market is practically
several hundred
limitless.
A check through hun¬
valuation items for New York
Other Distribution
dreds of dealers located in var¬
City securities.
In the 1941 edi¬ ious cities might well fail to evi¬
The problems apparent in the
tion 531 valuation figures, rang¬
dence the best independent fig¬
above illustrations are not limited
ing from 91 to f18(>, are listed un¬ ures. The search would necessar¬
to new issues
but would apply
der the heading of *New York City
ily have to be through the tele¬
with corresponding force and ef¬
alone.
phone, teletype or, telegraph. The
fect to other transactions where
With so many different price
cost involved would be tremen¬
dealers purchase from institutions
factors
affecting practically the
dous in both money and manor other investors, a sizable block
same
security as is the case of
hours.
It would be prohibitive.!
or
blocks
of
municipal bonds
New
York City, it is apparent
A Chicago dealer trying to as¬
which the holder wishes to sell
that with some 175,000 municipal
certain
the
best
independent
and the dealer must distribute.
entities in this country having the
prices for a bond of a small town
legal right to issue bonds, many in Florida would obviously have
Further Limitations in
of' which have obligations out¬
to
contact
Florida
dealers.
A
Distribution

fixed

stated maturity date.

National Association

•

Commissioners,

•

would
scope

in the

standing, the multiplicity of is¬
effect sues with a wide range of matur¬
follow with respect to the ities, rates, security background,
and extent of distribution local conditions, and other factors
municipal market. Dealers precludes any possibility of prac¬

further

narrowing

working in their respective fields
in placing bonds which are owned
theoretically indicate and being offered by others would
cape.
to any other dealer not owning be unable to contribute to this
Dealers located outside of the
the issue that the bonds are worth form of valuable distribution if
financial centers would encounter
more or less than the fixed offer¬
they were subjected to the liabil¬
.almost
insurmountable difficul¬
ing price. Nevertheless, the bonds ities, rescissions and added costs
ties.;, Yet, it is just such dealers
are
generally available for sale which the rule would impose. This
thrpughout the country that carry
only by or through the owner at work contributes considerably in
on; the purchase and sale of the
the fixed price during the offer¬ developing
and' broadening the
issues of numerous small munici¬
ing period. The dealer's judgment placement of issues among in¬
palities.
Often the amounts are of the market value of the secur¬
vestors, thus making for a broader
limited, ranging from $10,000 to
ity at the time of bidding is con¬ market in both original financing
$50,000.
Deprived, however, of firmed and his profit in the trans¬
and in subsequent placements or
the customary dealer outlet, these
action is determined by his abil¬ secondary markets.
Such widen¬
municipalities would, as a rule,
ity to resell the bonds at the ed distribution is not only help¬
find it most difficult to market
offering price.
In the course of ful but of material value to the
their issues.
To the people of
such a process there could be no issuing municipalities.
these
small
municipalities," the
value to or necessity for the "best
disposition of their securities is as
Variance of Factors in
independent bid and asked prices"
important and essential to them
on each side of a portion of the
Municipal Securities
as is the disposition of the large
issue.
Furthermore, the idea pre¬
issues of metropolitan areas to
Municipal securities vary ma¬
sumably advocated by the rule is
their citizens.
terially in particulars, character
adequately fulfilled in such a
and
security background.
Such
transaction by the best bid at the
New Issues
variances, of course, have their
sale, which is a matter of public
We previously called attention
effect on the worth of the securto the fact that any sustained im- record,
and the fixed offering

municipal

(varying taxing provisions
medium of payment) it
been estimated that there are

factors

greater

redemption

and
security

purposes

with

along

maturities

will be equivalent to

for

rates,

interest

the

are

such

and many
Considering

maturities.

houses

experience in the municipal bus¬

different interest rates,
different

each

were

made

iness.

different purposes, 13

seven

bids

These

different

into

divided

than
14%
for each year or fraction thereof
."
intervening
between
the date
for municipal issues,

following

which the security is first

are

stance

These are
issues

outstanding.

of bonds

disregard of the man¬

and

and asked prices.

in which the

ner

the years

by the dealer making
to

dealers in various parts of the
municipal busi¬ country assisting in the distribu¬
ciations,
pension
and
benefit ness has been conducted over a tion, and with hundreds of sales
to customers, of varying matur¬
funds, and all investing institu¬ long period of years to try to en¬
ities and rates, being made at in¬
tions—not only detracting from force such a rule in connection
tervals
every
day
for several
ready salability and market value, with dealers who underwrite and
municipal issues days or more, just what would
but also jeopardizing the position distribute new
be the result?
The answer is ob¬
of
securities held as collateral and other dealers who assist in
vious—just
plain
bedlam. The
and their usefulness as security that undertaking.
dealers
when going through it
for obtaining future loans.
Amplifying this contention, we
could
undoubtedly describe the
submit that the largest part of
effect in much more expressive
Public Interest
the municipal business consists of
The above reflects public inter¬ the purchase by dealers of new language.
The
comparatively recent of¬
est as well as that of investors. issues from municipalities and the
Additionally, from the standpoint immediate offering thereof to the fering of the City of San Antonio,
of public interest the cost of orig¬
public. Furthermore, a large ma¬ Texas, Electric and Gas Revenue
inal
municipal financing would jority of such new issues are sold issue offers another illustration of
be increased, thus increasing the by the issuer at public sale on the problem.
There are $33,950,annual tax levy or other rates ne¬ competitive bidding. The principle 000 of bonds in the issue, three
cessary
to
meet debt service. of competitive bidding prevailing different interest rates, 29 separ¬
maturities and 19 different
There are not only the burdens of for many years in the municipal ate
the rule in the first instance upon field is the very one which the prices.
In this issue there is also
original financing, but it will be Commisison is now requiring of the factor of the right of redemp¬
recognized that any sustained im¬ the utility companies in the sale of tion prior to maturity. The bonds
pairment or injury to the second¬ their securities. One of the most are subject to redemption prior
ary market has comparable bear¬
important factors in the practice to maturity at the option of the
ing upon future original financing. of competitive bidding, and in city, on not less than 30 days'
In instances of smaller munic¬ fact its very foundation, is that published notice, either in whole,
ipalities whose marketing facil¬ the securities will be offered to or in part in inverse numerical
ities would be most seriously im¬ the public for a period of time order (as to bonds maturing in
paired, the citizens of such mu¬ (usually 30 to 60 days in the 1972, on any interest payment
nicipalities would be unneces¬ municipal field) at fixed prices. date, and as to bonds maturing
sarily handicapped in financing This is definitely recognized in in the years 1948 to' 1971 inclu¬
essential public improvements and the proposed rule under (d) (1) sive, on Aug. 1, 1947, and on any
facilities.
Onerous
restrictions applying to corporate securities interest payment date thereafter),
well

in the marketing of

and

the basis ities

ary

investors—individuals, banks, in¬
surance companies, fraternal asso¬

Thursday, November 12, 1942

CHRONICLE

the rule.
field, the
best
independent quoted prices
might be obtainable through one
dealer as to a certain maturity or
maturities and through another
dealer in the same city or located
elsewhere as to some other ma¬
turity or maturities of the same
block of bonds being bought from

tical

compliance

Even

within

sold to the

with

narrow

customer.

The views

of dealers as to the
of municipal se¬

value

curities vary,

and in certain issues

quite materially.
It

matter

judgment.
small
to

of independent

recent sale of a

block of bonds may

serve

of New Boston,

located in
nia

city in Texas, Califor¬

the Pacific Northwest.

wishing to sell some of
his
holdings
and
desiring his
money
promptly calls upon the
dealer to purchase $10,000 of his
customer

follows:

$3,000 Miami, Florida Refunding
3y2s due serially July 1, 1955,
1956

and

1957.

$3,000 Dayton, Ohio Bridge 4%s
due serially September 1, 1949,
1950

and

1951.

$4,000 Detroit, Michigan Bonds
$2,000 Street Ry. 5y2S due Au¬
gust

$2,000'

Ohio,

publicly advertised for sale on
Aug. 10 this year, $41,900 refund¬
ing bonds of the City. The bonds
mature serially Nov. 1 in each of

endeavoring to

lating to the bonds of a small mu¬
nicipality in Utah would in all
probability have to make contacts
with dealers in Utah, Colorado
and California and possibly in the
State of Washington.
Consider for example a dealer

illustrate.
The City

house

ascertain the required figures re¬

bonds

Variance in Views

market

York

New

iQ'sn

Refunding

3V?s

due

January 1, 1954 and 1955.
For the purpose
let

some

trace

detail

this
under

of illustration,
transaction
the

proposed

Volump 156

Number 4124

THE COMMERCIAL &
FINANCIAL CHRONICLE

rule.

The dealer must first fur¬
nish the customer from whom he

chasing bonds for his own inven¬
tory and with his own funds or

purchases the bonds with the best
independent "bid and asked" or

credit

and

the

country for bid and asked prices
sibly mean anything to them but
costly additional work. The more

ing of the bonds to his clients and
best independent "bid" or "asked."
prospective customers at a fixed
As to the Miami, Flordia bondsprice which will show him a
the best independent figure
may profit.

active

■;

Miami

the

business,

the

New

and

to the

Dayton, Ohio bonds
some dealer in
Dayton, Columbus,
Cincinnati, Cleveland or Toledo
have it

may

York

Chicago.

in each of the

greater

ing missed it at the time,

subsequently

Hav¬

deducting therefrom his

dealer might well find himself in

that

had, in his opinion, ex¬
ercised reasonable diligence in the
undertaking.
The

dealer

started

price until they

has, however, only

the

his work in this trans¬
He must distribute the

action.
bonds.

He works to

in his field of operation.
the
three
Miami,

sell

bonds within

Florida
few days, and must

then

proceed

check

with

to the

the

best

order

customer

with

formation.

same

independent

/'bid-and asked" etc.
bonds

He may

those

furnish

the

that

required

Within the next

his

sold

are

general

that

has

tributing the $3,000 Dayton, Ohio
bonds and must again go through
the work of attempting to check
that market at its various points
in order

tion

furnish

that

the

informa¬

customer.

subsequent

date

the

dealer

suc¬

During such period the partic¬
ular

bonds

fronted

with the

same

con¬

expensive

not

are

available

the

out

cost

hours

would

previously pointed

hibitive.

and

money

such

tremendous
In

man

undertaking

addition

and

pro¬

the

cost

seeking to obtain the best in¬
dependent prices there is the cost
of
recording
the
information.
Paragraph (c) of the proposed
rule reads:

?■''

"Records
dealer

who

kept.

entirely

nominal,

identical

makes

any

price,

case

with

which

disclosed;

asked
the

(2)

prices

time

and

such

Even
of

in the

large

and

current;

(3)

the

(4)

exercise

certain

the,:date

obligations

such

for

considered

that

other

bearing on the
security and desirability of the
bonds.
Any dealer's independent
bid and asked prices cannot be
anything
but
nominal
unless
bonds

are

him to

actually

bid

controls

available

unless he

bonds

which

for

owns

can

offer for sale.

ence

prices

of claims of

respect

important fea¬

The

issuer

same

bonds

bona fide firm bid
amount

are:

bonds

of¬

bonds

known

of
be

available in the market or sched¬
uled to be offered for bids.

Also,

when and under what conditions

offering

The current condition of the
issuer with respect to tax or rev¬

independent price

re¬

each

transaction.
,

rent bid

and Asked

Prices

Independent
bid
and
asked
prices do not necessarily evidence
reflect the actual price at which
municipal
securities
can
be
bought or sold.
Such quotations

are

in the main nominal and

not firm prices.

factor

confusion

unavoidable
wholesale

A
ure

and

intermingling

the

asked prices
fact

the
of

municipal
disregard
municipal dealers
on

appears

that

issue now, or has it been
questioned in the courts.
Is it a

principally engaged in a mer¬
chandising business and not in a

prior to maturity,
when, and at what price:

brokerage

business.

As has been pointed out the

chandising
ties

consists

municipal

the

securi¬

dealer

mer¬

pur¬

The

security

background,
maturity or maturities,, interest
rate or
rates, form, legal opinion,
priority if any, and local tax
status

the

particular

bonds.

gardless of whatever efforts
made.

that

dealer

could

he had
corner

were

never

searched
nor

every
could he do

Another

matter

for

price

ation is the position of the
many
dealers who would be
constantly

burdened and at times
with

requests

from

all

swamped
over

the

which

the

suitable

seems

refer

briefly

services

that

dealers

which
and

in
are

which

does

not

acquire

the

dealer

was

time

the

aggregate
There

cost

are

include
the

other and

factors

the

dealer.

varying cost

which have to be taken
into consideration before a
prof¬

in addition to
creating

developing markets

Changes in the municipal mar¬
ket, as in the market for other
securities, are at times sudden
and

there

are

cycles

playing

which

have

Further, there
bonds

for

mu¬

issues,

balancing

charges,

purchased

cannot,

existing

immediately but

condition,

and

with

profit

held
With in¬

are

many

un¬

points

still

provided

instances

number

and

being carried

that

work

Municipal dealers have

contrib¬

uted much in

working with State
legislators in effecting changes in

They await information
dealer advising them of

availability of the kind of of¬
fering which fits into the program
of investment which

refunding and other operations
relative to both tax
supported is¬

distributing

sues

the

the security is¬
that provide the funds for
municipality to acquire the

facility.

they have

es¬

per¬

have

continued interest

enable

the

municipality

con¬

tinuously to maintain a credit
standing in keeping with its re¬
sources and ability to
pay, so that
the

course

nicipality

time

the

discharge

may

mu¬

its

in¬

the

part of the dealer in the preserva¬
tion of the quality of the
security
which they purchase.
To permit
that relationship to degenerate in¬
to

a
mere
price-quoting and or¬
der-filling avocation involves far

greater

risks than investors and
dealers in municipal securities in
the United States can afford to
take.

Summary
1.

It is believed that in the fore¬

going statement enough of the ef¬
of the proposed rule have

fects
been

shown

demonstrate

that

should it be adopted it would be

injurious to:

;

The States and their govern¬
mental units which means public
a.

interest

whole;

Investors—large and small;

c. The
industry engaged in pur¬
chasing and marketing municipal

securities

taken, and maturities altered to
keep the obligations current, and
to

mand

and

otherwise

municipality they
financed, and are frequently municipalities

called upon to see to it that vari¬

Inves¬

municipal securities, in the
are discriminating
selective, and with their pur¬
chases rightfully expect and de¬

b.
con¬

themselves.

and

Municipal houses have a
tinuing interest in the proper

for

preponderance,

and those payable from
rev¬
enues. -v
vV Zv,:
' •/' ■ ■:■
sues

and

serving

investors.

2. In addition it has been shown
that the proposed rule is unwork¬
able and could not in practice be

complied with.
dealers
claims

to
of

It would subject

contingent
rescission

liabilities,

and

burden¬

additional

some

operating costs
which many dealers could not ab¬
sorb

afford to risk.

would

ers

Such deal¬

obviously be forced out

business.
3.

Further, the proposed rule is
clearly discriminatory as to "ex¬
empted securities" as defined in
veloped and maintain research paragraph (a)
(12) of Section 3 of
departments specializing in ac¬ the Law.
Very properly, care has
quiring pertinent informative data been exercised in the
preparation
relating to literally thousands of of the rule to
protect from its ef¬
municipal entities. This material fects the markets for the securi¬
debtedness.

Further,

serves

many

dealers have de¬

measuring the security

and is available to customers and

others

desiring information.
representatives

are

sent direct to the

status

and

other

perti¬

the smallest.

ties

the

Federal

Government,
agencies,
yet by the application of the rule
its instrumentalities and

there would be instituted regula¬
which would detrimentally

tions

and

maintain

separate

tions in several of the
the

purpose

study

the

the facilities of these units of

organiza¬

States, for

examination

financial

status

municipalities within the

and
of

respec¬

our

Government to finance their Gov¬
ernmental functions.
4.

Municipal dealers have formed

•*

on.

the

This is

relating to prac¬
tically all municipal entities, even

may

expected

1938

from the

respect

nent information

to him many points of

tors in

financial

due to
be of¬

evidence of clari¬
fication of the particular
situation
the dealer undertakes to sell
the
bonds.
The then market
mean

there

municipality for the purpose of regulate and seriously impair the
investigation and first-hand infor¬ marketing facilities for the securi¬
mation relative to the situation. ties of the States, their subdivi¬
It is possible for investors by in¬
sions, instrumentalities and agen¬
quiring of dealers to ascertain the cies, thereby adversely affecting

considered.

some

ber
such

tablished

Frequently,

are occasions when

fered

which

"marketable" legal
instances where the

bonds have been marred

of funds.

schedules
of
serial
maturities
with relation to tax
collections or
other

such dealers

always trends and
their
part
and

for
a

and

nicipal issues both original and
State laws beneficial to investors
secondary.*: ■■:)
and to the credit
position of mu¬
Dealers work
extensively with nicipalities.
municipal officials with respect
Customers are not
to plans of
regularly or
financing, also rela¬
tive to the form and
character of continuously in the market seek¬
ing avenues for the employment
the
issue
or

Further changes in the
market

opinion

securities

the

necessarily

stance, those
not available

dence, Rhode Island, in Septem¬

this

municipal

times, much time and money
expended by municipal dealers

or muti¬
as a result of
fire, flood, etc.
The results of the flood at Provi¬

rendered

are

municipal dealers who

lated

some

mu¬

investors

improving the market worth of
blocks -of bonds.
Such as, for in¬

paid

Dealers
It

Services Rendered

At
is

are

price

ous essential
steps are taken and
security as
provided in (C) above, it must carried out. In some instances, re¬
be recognized that the
price paid funding operations must be under¬

able

dications

consider¬

and

ren¬

support them.

This

formance of the

(2) As to the disclosure of the

awaiting developments.

Another Factor

are

trading

Can it be

called

transaction,
evidenced

and

the

negotiable instrument.

the

collections,

requiring the disclos¬
best independent bid

transaction
the

through

and retail prices.

rule
of

are

There is also the

customer.

cases

asked price. In either
statement he may be in error re¬

well

only because of market
changes, but because'of expenses
of varying character involved
in

Incidentally, since the passage
he may of the
Emergency Relief and Con¬
go to great lengths and still
struction Act of
1932, authorizing
be unable to locate
any current' the Reconstruction
Finance Cor¬
independent bid or asked price.
poration to lend
$1,500,000,000 for
Yet it might be later
established municipal and other
public im¬
that there was an
independent provements, there has been in
evi¬
bid or asked price
quoted at the dence a marked trend
on the
part
time by some dealer
just around of
municipalities to acquire utili¬
the corner from numerous deal¬
ties or facilities
developed under
ers
contacted.
By making
the private
ownership.
It is recog¬
statement required by.
paragraph nized that numerous
problems in
(2) above, the dealer further sub¬
this process confront
municipali¬
jects
himself
to
the
liabilities
ties, investors, and the securities,
imposed- by the law and to the
industry. Municipal bond dealers
.risks
of
recission.
The
rule have
efficiently
functioned
in
would place him in a
unique po¬
working out the numerous tech¬
sition.
He must either obtain and
nical details
involved, and in buy¬
disclose the best price or
say that
ing (direct and from the RFC)
he is unable to locate
..any cur¬
In many

•

Bid

the

not

These organizations
valuable service to local

nicipalities

for a particular
security, subse¬
tax levies or quent to its
purchase, may be
schedule of tolls, temporary bor¬
such that the price
paid is very
rowings for current account or
substantially above or very ma¬
capital account:
terially below the selling price
3. The purpose of issue of the
of the
security thus leaving the
bonds to be sold.
The existing
dealer to appear in the
eyes of
position of the specific obliga¬
the
customer
either
as
taking
tion in the debt structure of the
an
unusual profit or in
having
issuer.
Can the existing position
paid more for the bonds than
be changed by
they
subsequent issues. are worth.
enue

price

constantly occuring not only with
new
issues, but also as

ob¬

it is determined.

be made:

may

der

regard to

dealer

so.

consideration

amount

that

great lengths

tain the best

the

to other pertinent
factors.

two

statement

nook and

municipal

the

ob¬

was

as¬

be."

are

this

may

sure

which need

and

independent bid
price, or both, as the

may

There

reasonable

unable

current

asked

case

was

of¬

also

the

other factors

such

with

City

fered—the

information

the risks

case

municipalties,

York

making

and

Further, there are the contin¬
gent liabilities which the require¬
ment would impose upon the deal¬
er

purpose.

mu¬

may-wary,_as_to- coupon
maturity, amount available

and

bid

prices and fail to accomplish the

example,
bonds are almost
always
available in the
market, a fixed
price offering is not inconsistent

and

tained."

scission

usually

Among the factors that influ¬

(1) of

date

such

were

sources

disclosed;

the

which

great majority of
nicipal bonds.
;

disclosure

this rule shall make and preserve
record of (1) the information

that

available

are

Factors

time

assuming

bonds

for other dealers to bid on or to
be offered by any other dealer at

Every

pursuant to Paragraph (a)

pro¬

that

by the dealer.

ac¬

transaction

purchase,

such

diligence

for

nominal bid and asked
Such indications must be

prices.
no

rate,

As has been

submit

ity when sold to

bona

make
the
disclosure
re¬
quired by paragraph (2)
hereof;

and laborious task in his attempt when it is
-to locate-the best-figure-for—that- .offerings
customer.

that

original tures
concerning these provisions.
offering price regardless of what
(1) It is shown in the forepart
other dealers might be
willing to of

'yin*.placing the remaining New
$2,000 Detroit bonds, the Street where
Ry. 51/2S, and here again he is

sale

had

and

some

ceeds

able to

same

""•■""'..■v■

not

rea¬

shall

or, in rare instances, months as¬
suming
no
general
market
changes.

indicate

he
must
again go
the same motions with
respect to these bonds.
A few
days later he may succeed in dis¬

was

price

"(2) if the disclosure is made
sirability of revising the offering
pursuant to (B) or (C) of
para¬
price,
The offering may extend
graph (1) hereof, the fact that
over a period of
days or weeks after the

which

time

the

security

ob¬

vided, however, that if the dealer

his

sale at any other than the

through

the

proposed

through

wrong

days, the dealer may be suc¬
in placing the $2,000 De¬
troit, Michigan Refunding 3^s at
cessful

exercise

diligence,

nor

tomer, but which is not more re¬
mote than sixty
days prior to such

substantial change in the
market dictates the de¬

the

bid

can

off-setting others.

dealer pays does not evidence
the
retail market value of the secur¬

transaction which is closest
in point of time to
the proposed
sale to or purchase from
the cus¬

until

convinced

was

fide

inability to resell the bonds

unless

in¬
sev¬

eral

dealer

judgment

with¬

quire

dealer then re-offers them at the
fixed price previously
determined,
and as in new issues the bonds re¬
main available for
sale at this

price

which the dealer

purchased the

difficulty through rescissions if
nothing else in spite of the fact

after

sonable

work and risk involved.
If the bonds are

the

asked

tained

expenses

and expected profit based on the

might

evidenced,

"(C) if neither such
such

price at which he
thinks the security can be
resold,
a

others in the

fering.

follows:

determining

might

figure.

rule reads

with

profit

Disclosure of Cost
Paragraph (C) of the proposed

general market conditions,
he exercises his best
judgment in

dealers

above cities

not reveal the best

Upon his knowledge of
prospects,

well

A check with

number

;

the security and the
requirements
his customers or

it may be in New

substantial

and risk.

securities

of such
municipalities.
by a dealer for These
organizations maintain
a
a
block of municipal bonds
ma¬
staff for this
purpose, and are a
turing serially is based on the central
place for compiling essen¬
weighted
average
life
of
the tial
municipal information.
This
block.
The offering
prices may is
disseminated
through
their
represent a loss of some of the
members, and at times direct, to
maturities

York
In the
process, when a dealer
might at that particular time is asked to make a bona fide firm
be in Jacksonville,
bid for any particular bonds he
Florida, Chi¬
computing actual or
cago or perhaps elsewhere.
The must determine his price
fide
firm
upon the bona
bid
prices for
best figure at the time for the
consideration that he is investing transactions in which
they would
Detroit, Michigan bonds may be his own money in the purchase have no chance to
participate.
in Detroit, Chicago or New York of the
bonds for his own inventory
it

tive States, and of other
matters
bearing on the credit position and

the dealer takes.
The price paid

the demand would be
upon them.
Dealers could not afford the
time nor could
they afford the
added expense of the work in¬
volved
in

be found

of unexpected loss.
That obvi¬
ously is one of the risks which

transactions which cannot pos¬

subsequent offer¬

1709

that,

conclusion,

our

opinion,

reiterate
the rule

would be in violation of the intent
and

purpose

enactment

change Law
and

of
the

Congress

Securities

its
Ex¬

as originally written
subsequently amended.

FINANCIAL CHRONICLE

THE COMMERCIAL &

1710

Calendar of New Security

Flotations:

are

all

outstanding

stock

Following is a list of issues whose registration
filed less than twenty days ago.
These

Cumberland

redemption prices,
offer of exchange to be made to the hold¬

stateissues

elect

These dates,

4:30

before the day follow¬

ing.

KEYSTONE

and

CUSTODIAN FUNDS, INC.

registration statement with the SEC cov¬
ering 200,000 shares, investment trust-full
certificates

series

participation,

Address—£0 Congress St., Boston,
Business—Investment trust.

Underwriting—Keystone

„

"B-3"
Mass.

Corporation,

control with Keystone Cus¬
Funds,
Inc., is
principal under¬

Boston, under
todian

writer

Offering—At market
Proceeds—For

investment.

2-5055. Form

Registration Statement No.
(10-26-42)

Funds, Inc., has filed

Keystone Custodian
a

be subscribed for by stockholders,
pay
therefor in cash at $10 per

may

provided

the

now

CUSTODIAN FUNDS, INC.
Keystone Custodian Funds, Inc., has filed
a
registration statement with SEC cover¬
ing 150,000 shares, investment trust-full
certificates
of participation,
series "K-l"
Address—50 Congress St., Boston, Mass.
Business—Investment trust.

$1,494,000

gage,

2-5056. Form

KEYSTONE

CUSTODIAN FUNDS, INC.

Net

Keystone Custodian

Business—Investment trust.

todian
writer

and

Amendment! filed

effective

the purchase and

for

Nov.

1942,

face

amount

INSURANCE

under control with Keystone Cus¬
Inc.,
is principal under¬
of certificates of participation
in

merger

Keystone Funds
Offering—At market
Proceeds—For investment

2-5057. Form

MONDAY, NOV. 16

in¬

basis

Fireman's Fund

for one share of

shares of Fireman's

30,348

and

75/100ths

exchange
Statement filed in

San

•

Francisco

A-2.

(10-15-42)

Amendment

the com¬

to deposit the redemption price there¬
trust for the holders of such shares.
The amount to be utilized in such redemp¬
tion
ill be supplied by amendment.
Additional net proceeds from the sale of

Oct.

28,

the

INTERIM

Southern

Texas ;

Interim

defer

effective

date filed

class

SEC

Business—Primary
money

capital

and/or

function

principal underwriter '•
Offering—Agreement of merger

"interim"

Mexico Eastern Gas Co. at
per share
♦
the securities to be issued
in exchange for outstanding securities of
the constituent companies involved in the

ESWT

registra¬
for 39,912
and 25,232

of company

change

borrowing from customary sources
Preston & Co., Chi¬

Underwriter—H. M.

111.,

underwriter. Tht
per unit
filed, July 30, 1942 to defei
the

sole

underwriting commission is $8
effective date

FLORIDA

POWER

Florida

With

Power

SEC

LIGHT

CO.

sold

units

class
4

stock

shares,

stock will be used bonds, due Oct. 1, 1971; $10,000,000 Sink¬ units,
unit 4 shares of common stock; thereafter
P. L. ANDREWS CORP.
ing Fund Debentures,
due Oct. L 1956;
to acquire 300 shares of the common stock
P. L. Andrews Corp. has filed a registra¬
and $6,000 face amount of 5%
debentures and 140.000 shares Cumulative Preferred company reserves the right to reduce the
tion statement with the SEC for $360,000
Stock, $100 Par.
Interest rates on the number of common shares to be included lr
of Aug. 1, 1936, due Aug. I, 1956, of Nepsco
first
mortgage
convertible 5%%
bonds, Services. Inc., and 10 shares of common of Bonds and Debentures, and the dividend each unit of class A stock
Proceeds will be used for working capita)
series A, maturing serially
from 1943 to Nepsco Appliance Finance Corp. $9,100 and rate on the preferred stock, will be sup¬
1957,
i
plied by amendment
Registration Statement No. 2-4968. Form
to acquire all of the 650 outstanding shares
Address—25 S. E. Second Ave., Miami
4-1.(3-18-42)
'
Address—7800
Cooper
Ave.,
Glendale, of the no par capital stock of New England
Amendment filed Oct. 15, 1942, to defer
Fla.
New York, N. Y.
Pole & Treating Co. $110,000.
Easiness—This
"<
subsidiary of Americas' effective date
Business—General character of the busi¬
Balance of net proceeds of the series M
Power
Se Light
(Electric Bond & Share
ness done bv the cmwafci'v*
<**«-*-»«■
bonds, the serial notes and common stock
development, manufacture and sale of paper will be used to redeem at $120 per share System) is an operating public utility en¬ JEFFERY BOULEVARD BUILDING CORP.
gaged principally in generating, transmit¬
packaging and wrapping materials iu a or otherwise retire on or before Oct. 1,
Jeffery Boulevard Building Corp., through
variety
of
forms of
envelopes, folders, 1942, an unspecified number of shares of ting, distributing and selling electric en¬ voting trustees has-filed a registration
wrappers,
folding boxes and containers. 7% preferred stock of the company and ergy (also manufacture and sale of gas), statement with the SEC for voting trust
Primarily because of the nature of the
for
the
purchase
and
construction of serving most of the territory along the certificates covering 1,471 shares of pre¬
plant and products of the corporation, it facilities for the carrying out of the com¬ east coast of Florida (with exception oi ferred stock, par value $100 per share,
the Jacksonville area), and other portions
is anticipated that the war or conditions
and 163 shares of common, no par value
pany's business.
of Florida
arising therefrom will not alter substan¬
Address-—10 South La Salle St., Chicago
Registration Statement No. 2-5024. Form
Underwriting and tittering—The securi¬
tially the general character of the business
Business—Apartment building
A-2
(6-29-42)
ties registered are to be sold by company
or products of
the corporation
Central Maine Power Co. on Aug. 5, 1942,
Offering—To
be issued in connection
under the competitive bidding Rule U-50
Underwriting—No firm commitment has
with the extension of a voting trust agree¬
filed a request with the SEC to withdraw
of the SEC'a Public Utility Holding Com¬
been made to take any of the securities
u ast indenture data in view of decision to
ment for
a
period of seven years from
pany
Act.
Names of underwriters and
registered, but P. W, Brooks & Co., Inc., sell the proposed issue of $5,000,000 10Aug. 15, 1942, to August 15, 1949, unless
price to public, will be supplied by postNew
York City, is the principal under¬
year serial notes at private sale.
On July effective amendment to registration state¬ continued for a longer period by the af¬
writer, as defined in the Securities Act of
firmative vote of holders of 51% in amount
16,
1942, company filed an amendment*
ment
1933
with the SEC to
withdraw the proposed
of the outstanding voting trust certificates
Proceeds
will
be
applied
as
follow*:
Offering—The securities will be offered notes from registration and such with¬
outstanding,
representing the preferred
$53,170,000 to redeem at 102 "A, the $52,at prices ranging from 99 Ms to 102'A de¬
drawal was approved Aug. 19, 1942
stock.
The stock was originally issued at
000.000 of company's First Mortgage 5s of
pending upon maturity date
the time of the reorganization of the prop¬
Declarations to
Become Effective—The
1954; $15,693,370 to redeem at $110 per
Proceeds—Net proceeds will be used to
erty and placed in a voting trust for a
SEC on Nov. 5, 1942, issued an order grant¬
share,
the
142,667 shares of company'!
discharge a proposed demand bank loan,
ing the applications and permitting to be¬ $7 preferred stock, no par.
Further de¬ period of five years. Trustees deem it ad¬
to reimburse the corporation for machinery
come
effective declarations filed by Cen¬
tails
to
be
supplied
by
post-effective vantageous to continue the voting trust
acquired and balance for such additional
for a further period.
tral Maine Power Co., Cumberland County
amendment
production facilities as are needed.
Registration Statement No. 2-5052. Form
Power & Light Co., New England Indus¬
Registration Statement No. 2-4845.
Form
Registration Statement No, 2-5058. Form
F-l. (10-21-42)
tries, Inc., and New England Public Ser¬
A2.
(9-17-411
A-2 (10-28-42)
Amendment filed Nov. 5, 1942, to defer
vice Co. pursuant to sections 6, 7, 10 and
Amendment filed Oct. 27, 1942, to defer
effective date.
V-.\y.,:
12 of the Public Utility Holding Company
effective date
■
Act of 1935 regarding transactions, sum¬
DATES OF OFFERING
marized as follows:
GRAND FORKS HERALD, INCORPORATED
NU-ENAMEL CORPORATION
UNDETERMINED
Central
Maine
and Cumberland (both
Nu-Enamel Corporation filed a registra¬
Grand Forks Herald, Incorporated, has
We present below a list of issues
subsidiaries of Nepsco)
propose to enter
tion statement with the SEC for
106,500
filed
a
registration statement with the
whose registration statements were filed
into
an
agreement of merger by which
SEC
for
$170,000 4*/2%
first mortgage shares of common stock, $1 paf value
Central Maine will acquire all the assets
twenty days or more ago, but whose
Address—8 South Michigan Ave., Chicago
serial maturity bonds, dated Sept. 1, 1942.
and assume all of the liabilities of Cum¬
offering dates have not been deterBusiness—The company is engaged in the
Bonds will mature as follows: $12,000 on
mined or are unknown to us.
berland and by which Central Maine will
each Sept. 1 from Sept. 1,
1943 to and distribution and- sale of enamels, paints,
continue
as
the
surviving
corporation.
varnishes,
linoleum finish, stains,
polish
including Sept. 1, 1951; $62,000 on Sept.
Cumberland will dispose of all of its assets
and kindred lines,- which are
principally
1, 1952
|
to Central Maine and will be merged into
CENTRAL MAINE POWER CO.
distributed: under
the trade name "NuCentral

Maine

Power

Co.

filed

serial notes and common

regis¬

tration statement with SEC for $14,500,000
and general mortgage bonds, Series
July 1, 1972; $5,000,000 tenserial notes, maturing serially on July
1 from 1943 to 1952, and 261,910 shares of
common stock, par value $10 per share.
Address—9 Green Street, Augusta, Maine
Business—Company is an operating pub¬
lic utility and engages in the electric, gas
and
water
business,
entirely within the

first

maturing

year

State

Maine

Underwriting—The bonds and the notes
be sold under the competitive bidding
rule of the Commission.
Names of under¬
writers and amounts and offering price to
will

public will be sunnlied by amendment
Offering—Public offering price of the
bonds and notes will be supplied by amend¬
ment.
The 261,910 shares of common are
to be offered to the holders of the
company's outstanding common stock and
preferred stock for subscription at $10
per share in accordance with their pre¬
emptive rights.
New England Public Ser¬
vice Co. has subscribed for and agreed to
fir^t
6%

take

the

261,910

shares,

less

any

Address

—

118

North

Fourth

Street,

the details of which have
been filed with the Commission
public, the company will issue
sell for cash $3,650,000 of first mort¬
plan,

previously

made

and
and

series due

sinking fund bonds, 3%%

'-.v.,'. • , '
statement reveals that E.
H. Rollins & Sons, Inc., has advised the
company
that it has agreed to sell the
bonds for
the survivor corporation at a
Oct.

1, 1962

Registration

to not less than 103%% plus
that there

accrued interest, in such manner
will not

requiring their registration under
1933.

Act

Securities

the

involved any public offering*

the bonds

As compensa¬

tion for its services in finding a

purchaser,

banking firm is to be paid a commis¬
of one-half of one per cent of
the

the
sion

aggregate principal amount of the bonds >
Proceeds—The proceeds to be received by
the survivor company from the sale of its
bonds in the face amount of $3,650,000 and
from the sale of common stock for cash
and
$250,000 of the proceeds from the
Southern Union Production Co. loan will
be used towards redemption or payment of
debt of Southern Union Gas Co. (old Co.),
Texas Southwestern Gas Co.. New Mexico
Gas

Eastern Gas Co.,
working cap¬

Mexico

New

Co.,

reorganization expenses and
ital

.•

■

Registration Statement No. 2-5046. Form

price ol

unit. With at least the first 900
there will be included with each

$110 per

addition to

(9-28-42)

A-2..

Offering—The

Co.

First

Light

$45,000,000

New

price of $1.50

merger

the

intermediate

and

the

to enterprises whose debt
structures are being ad-

borrower

presently outstanding common stock of
Union Gas Co., New Mexico Gas

Co.,

enterprises until the financial
the

subscription by holders

for

share,

per
the

financing
position!
general
capital markets open avenues for longerto

•

Southern

function is to loan money, with fundi
used in its primary function, to pro¬

not

t. ■

provides,

'other things, that, the survivor
corporation shall offer approximately 240,584
shares of its.-common stock, par $1

Justed or reorganized by Its wholly-owned
subsidiary, H. M. Preston & Co. A second"
ary

%■

among

stock, $1 par
Address—33 N, La Salle St., Chicago, HI

is to loan

Is the

price equal

filed

$25 par;

A stock,

Amendment

1942

the

with

1V.

)
Underwriting—E. H. Rollins & Sons, Inc.,

shares common

cago,

Corp.

Finance

statement

tion

;•

Business—Primarily engaged as an oper¬
ating utility company

value, $1 per. share.
The name of the
registrant will be changed in consumma¬
tion of the merger plan from Texas South¬
western Gas Co. to Southern Union Gas CO.
Address —1104
Burt
Building,
Dallas,

par

CORP.

FINANCE

(the latter to be

Gas CO.

corporation in a proposed
covering 240,584 shares ol
Union Gas Co. common stock,

surviving
plan)

gage

5:30 p. m.

filed a
statement with the SEC for

Union

merger

company

Registration effective
on
Oct. 28, 1942

term

Registration Statement No. 2-5051. Form

agreement

the

Southwestern Gas Co. has

Texas

registration
Southern

Registration Statement No. 2-5050. Form
A-2. (10-12-42)
*

vide

share of Occidental

Underwriting—There are no underwriters
Proceeds—To
be issued under plan of

the proposed

and converted under the
into an obligation of

marine

and

45/100ths share of Fireman's Fund for

one

called for redemption by

merger

motor

exchange for 67,440 shares of $10 par com¬
mon
of Occidental Insurance Co. on basis

pany
of in

C-l.

Home;

».'

1942

SOUTHERN UNION GAS CO.

Francisco, Calif.

California

funds

14,

Its.

amendment,

Sept.

been made, but will be
and become a part ol the gen¬

added

of Home Fire & Marine Insurance

common

County prior to

filed

and scrip for fractional shares
exchange for 44,984 shares of $10 par

Co.

unspecified number of shares of

has

par common

premium in the redemption on a date
fixed in 1942 of an unspecifed num¬
shares of 6% preferred stock and

are

Co.

filed

Corporation on Aug. 26

registration stater
ment giving the public offering price at
$2 per share
*
'
V
■'
% 1
Registration effective 5:30 p.m. EWT on

,v,

allocation

specific

(8-1-42)

Nu-Enamel

proceeds has

eral

CO.

etc.
Offering—After reclassification of securi¬
ties to offer 33,738 shares of Fireman's $10

$2,650,000.

$50

Proceeds—No

surance,

Insurance

Business—Fire,

proceeds of the serial notes and the
stock will be used to pay par

Cumberland

Fund

Address—»an

y2% on

company
shares of

preferred

net

registration statement with SEC for 64,086
shares of $10 par value common stock

i.-st mort¬

the public

11,000

State of Texas

defer

'•

FUND

Fireman's

5V2%
preferred stock of Cumberland County at
13Q% and 110%, respectively, all of which

Funds,

Registration Statement No.
(10-26-42)

and neces¬

date

FIREMAN'S

ber

the

pre¬

receive

and

and '6,380

construction of property with cash derived
from the transactions described above

common

Corporation

Underwriting—Keystone
Boston,

funds provided

sary

$9,275,000
face
amount
first
mortgage bonds,
3'A%
series,
due
1966
of
Cumberland
County $9,784,348 and to pay bank loans
made by the company which were incurred
for
the
purchase
and
construction of
facilities

Funds, Inc., has filed
a
registration statement with SEC cover¬
ing 150,000 shares, investment trust-full
certificates of participation,
series "S-2"
Address—50 Congress St., Boston, Mass.

Maine

bank loans be paid off

Maine's

4% series, due 1960, of Cumberland
$1,538,060; to pay principal and

premium in the redemption at 105
a date in
1942 to be announced of

Registration Statement No.
(10-26-42)

Central

404,575

Net

writer

C-l.

shares of 6%

and 638

shares
(total 410,955 shares) respectively of com¬
mon
stock ($10 par) of Central Maine
It
is
further
proposed
that
Central

Power,

Offering—At market
Proceeds—For investment

stock

therefor

proceeds of the series M bonds will
be used to pay principal and premium in
the redemption at 105 %
on Oct. 1, 1942,

for by

common,

exchange

$50 par, for the 10,000 shares
stock, 7% cumulative, par
per share,
callable at $55 per
share, presently outstanding
. *
Underwriting—The preferred stock is not
being underwritten.
Names of principal
brokers
soliciting
subscriptions
are
Moroney, Beissner & Co., Houston, Texas,
and Mackubin, Legg & Co., Baltimore. The
first will receive, fees and commissions for
transactions oceuring in the State of Texas
and the second will receive fees and com¬
missions as managers of the selling group
offering
the preferred
stock outside of
of

the exercise of their

preemptive

Cumberland

ferred

follows:

Underwriting—Keystone Corporation of
under control with Keystone Cus¬
todian
Funds,
Inc., is principal under¬

value

proceeds from the financing in ac¬
cordance with the
merger plan
recently
filed with the commission will be used as

Boston,

offer

will

rights);: (2)
that
Nepsco tender for conversion its present
holdings of 54,699 shares of common stock

Net

KEYSTONE

Registration Statement No. 2-5029. Form
A-2.

preferred,

respective

ceased

C-l.

;

„

preferred is subscribed
and by the holders of

at $10

par)

of Central Maine upon

merger bethat prior to

says

securities

261,910

cash

($10

share, and that Nepsco purchase such
shares (less any shares taken by holders
of common stock and 6% Preferred stock

registered,
Cumberland County Power & Light Co., a
public
utility incorporated
in Maine in
1909, will be merged into the company and
Central
Maine
will
thereupon
acquire,
pursuant to an agreement of merger, the
business and all the rights, powers, etc., of
Cumberland.
After
the merger has be¬
come
effective, the business of the com¬
pany will include also the business, fran¬
chises and properties of Cumberland, the
separate
existence
of which will have
issue

for

stock

common,

per

proposed

Proceeds—Statement
the

sell

and

issue

Maine
as

stock, 1 after - reclassifica¬
is to be offered at $50

dividend series, plus.two per share.- The holders of common stock
(approximately 80,000,out of 158,289) who
($10 par) of Cen¬
not
previously
waived their pre¬
share of 6% preferred, have
emptive rights to subscribe for the new
stock of Cumberland,,or two shares of $50
issue of preferred will be afforded a 10-day
preferred stock, 5%
dividend series, plus
one
share of common stock ($10 par) of
period after the effective date of the reg¬
istration statement within which to exer¬
Central
Maine for each
share of 5'/2%
preferred stock of Cumberland.
It is fur¬ cise such pre-emptive rights by subscribing
for one share of preferred for each four
ther proposed that Central Maine redeem
shares of common stock held.
If in the
or
otherwise retire its presently outstand¬
opinion of the company a sufficient num¬
ing 7% preferred stock in direct ratio to
ber
of shares is
not subscribed for the
the par value of its $50 preferred stock,
5%
dividend series,
issued in such ex¬
company reserves the right to refund all
change of Cumberland preferred stock
payments
and cancel : the subscriptions,
It is further proposed: (1) that Central
but
if a sufficient number of shares of

P.M. Eastern Standard Time as per

SATURDAY, NOV. 14

•

of securities,

of common stock

days.

Offerings will rarely be made

Texas

Offering—The

tral Maine for each

filing except in the case of the secur¬
public authorities which normally

unless otherwise specified, are as of
rule 930(b).

tion

stock, 5%

ities of certain foreign

become effective in seven

two

receive

ferred

tion statements

is twenty days after

such holders may
shares of $50 pre¬

thereof under which

ers

grouped according to the dates on which the registrar
will in normal course become effective, that

Thursday,^November 42, 1942

Business—Company produces, purchases
shares of preferred'
and
distributes natural gas. in a
large
at their, respective
number of cities, towns and communities
subject, however, to an

retire

meats were

•/

with

posed
mon

mon

the SEC

filed

connection

that

closes

in an

Gas Co.,

Union

Southern
ment

amend¬

Oct.

20 dis¬

with

the

pro¬

shares of com¬
stock, (par $1) to holders of comr
stock
of
constituent
companies at
offering

$1.50

240,584

share, certain dealers will be
at the rate of 15 cents per

per

compensated
share

each

for

stock

common

agreed to be purchased by such stockholders
through the efforts of the dealers. Dealers
selected to render such services are E. H.

C. Gib¬
Pierce
underwriters

Rollins & Sons, Inc., New York; W.
&

son

Dallas,

Such

Texas.

subunderwritcrs,,

select

will

Chicago,-1 and Rauscher,

Co.,

■

>,.

& Sons, Imn,

By agreement E. H. Rollins

underwriter, will purchase • from the
company
at $1.50 per share such portion
of
the common stock not subscribed for
as

by stockholiders. As compensation for com¬
the underwriter will receive $12,.-

mitment

000

plus

additional'amount per share
by the percentage of
the

determined

stock which the -underwriter purchases,

from 5 cents to 20 cents

amounts- ranging

per

The underwriter intends to make a

at $1.50

offering

lic

effective 5 p. m. ESWT oh
p. m. ESWT on Oct. 17,

Registration
Oct.
1942

as
.

of 5:30

:•

Offering;—Holders of
the
of

constituent
record

pub¬

per

Oct.
for

one

common

companies

given

are

be
the

stock (of
merged)
right to

common

stock

the surviving corporation for each share

common

stock of the constitutent com¬

panies owned by such holder.
rights expire Nov.

Subscription

1942

12,

ONION ELECTRIC CO. OF MISSOURI
Union

Electric

Co.

Missouri

filed

registration statement with the SEC for
2,695,000 shares common stock, no par >
Address—315 N. Twelfth Blvd., St. Loui^,
Mo.
*
"
'
•

Business—This

subsidiary of The North
engaged primarily in the
transmission, distribution and sale of elec¬
tric energy, which It generates and pur¬
chases from its subsidiaries,
serving the
American Co,

Maine.
city of St. Louis, Mo., and portion of 6
Enamel."
The products sold by the com¬
Grand Forks, N. D.
proposed that Central Maine: (1)
pany
are. manufactured
by Armstrong adjacent Missouri counties and of 3 coun^
Business—Newspaper publication
change and increase its authorized common
ties in Missouri adjacent to the company'*
Paint & Varnish Works, of Chicago, under
Offering—Bonds are to be offered
at
stock from 150,000 shares
(no par) into
Osage hydroelectric plant
contract in accordance with the company's
prices ranging from 101.57 for athe 1943
1,500,000 shares of common stock ($10
Underwriting—Dillon, Read & Co., New
formulae and specifications
maturity to 100.50 for the 1952 maturity.
par) of which 642,500 shares will be out¬
York, is named the principal underwriter.
The
average
offering price per unit is
Underwriting—Floyd D. Cerf Co. is the
standing in the hands of the holders of
Names of the other underwriters will be
102.1073 plus accrued interest
principal, underwriter.
the
presently outstanding 140,000 shares
supplied by amendment
• . • i
Underwriting—Kalman & Co., Inc., St.
of common stock, and change the voting
Offering—The principal underwriter Is
Offering—The 2,695,000 shares of com¬
Paul, is the sole underwriter
power of the common stock so that each
granted the option, until close of business pany's common stock are outstanding and
Proceeds—The
net
proceeds,
together
share of such common stock ($10 par) will
Dec.
31,
1942, to purchase at $1.50 per are owned by its parent, The North Amer¬
with other funds'of the corporation, are
have
one-fifth of a vote;
(2) issue and
s"hare all or any part of 72,500 shares of
ican Co., who will receive the entire pro¬
to be used to retire as of Jan. 1, 1943, the
sell for cash $12,500,000 first and general
common stock of the company from C. L.
ceeds from the sale to the public of such
corporation's 6%% 15-year sinking fund
mortgage bonds of a new series, to be
Lloyd and all or any part of 34,000 shares shares
debenture bonds due Sept. 1, 1944
designated Series M; (3) issue and sell for
from Gladys Lloyd.
There is no firm com¬
Registration Statement No. 2-4940. Form
Registration Statement No. 2-5049, Form
cash $5,000,000 in principal amount of 10mitment to purchase any of said shares.
A3 (2-2-42)
A-2.
(10-12-42)
year
serial notes; (4) issue a presently
Union Electric Co. of Missouri, on Feb.
The principal underwriter has agreed to
Amendment filed Oct. 28, 1942, to defer
undeterminable amount of $50 preferred
pay a finder's fee to American Industries
9, 1942 filed an amendment to its regis¬
effective date
stock, 5% dividend series, of which series
tration statement, naming the underwrit¬
Corp., Detroit, Mich., in the amount of 5
20,000 shares are presently outstanding
cents for each share of common stock pur¬
ers, 141 in all, who will publicly offer the
HOUSTON NATURAL GAS CORPORATION
It
is
further
proposed
that Central
chased by the principal underwriter from
2,695,000 shares (no par) common stock,
Houston Natural Gas Corp. has filed a
Maine: (1) assume the liability upon $9,the selling stockholders.
Offering price to all of which are owned by its parent com¬
275,000 first mortgage bonds, 3 %%
due registration statement with SEC for 40,000 the public will be supplied by amendment
pany, The North American Co. The names
shares of preferred stock, 5% cumulative,
1966
and
$1,494,000
of
first mortgage
of
the
underwriters,
and
the maximum
Proceeds—The shares to be offered are
par value $50 per share
bonds, 4% due 1960 of Cumberland, and
number of shares of such common stock
Address—Petroleum
Building,
Houston, already issued and proceeds will go to the
redeem and retire said bonds at 105J/4%
which each agreed to purchase were listed
individual sellers of the shares
Texas
and
105%, respectively; (2) redeem and

Central

/rISr-i.U

Volume 156

Number 4124/

THE COMMERCIAL &
FINANCIAL

CHRONICLE
1711

the

;.84«'

"Chronicle"

;

•

;,<■

Amendment
effective

Nov.

2, '1942,

■

HEAT AND POWER COM

'/■;; ■;

Light,
35,000

Heat

and

Power

$100

Co.

par

OPA to take- control- ofconsumer

Commodity

distribution

tb'defer

'•

•

-Union'

1942, pag*

filed

UNION LIGHT,
■:
PANY

(glstered

26,

date

Feb.

to
assure ; an tequal
supply for all, and attributed the
emergency action mainlyto ex¬

cessive

r«-

buying

"There

common

one

run-

for

the"

the

price

loan

consumers, v .;

reason

sale

lease

Credit

Corporation

market.

The'

bushel

per

wheat will be less

Hull

re¬

Says (I. S. Policy Toward Vichy

such

than

the

Directed Toward Liberation Of France

amount of the loan per bushel

plus
carrying charges by

accumulated

any

Secretary of State Cordell Hull declared

on Nov. 8 that
the policy
pursued by the U. S.
Government in its relations with
Vichy France
during the last two years "has been
• ■■■ r';
to force him to
directed toward
help a hoarder,"
ultimately liber*
ceiling prices on ating France from her German
i
Business
Operating» electrio
utility
Mr- Henderson declared.
captors" and that the
"There flour.
,7 \
oompany
sending of the
'''-'7. i..
military expedition to French North Africa
is absolutely no excuse for hoard¬
was the most
UnderwriterColumbta Gas & Electrlf
important
"By this operation, any possi¬ objective of the
policy. At a special press
Corp.
''i1 ing coffee at this time.;
conference, the Secretary
bility that flour millers will be read a formal statement
if
Offering—Stockholders will receivs ot>
-.
lising me<S>"We're; announcing the forth¬
■fer to subscribe to
'squeezed' * between
25/94ths of one comadvancing five major purposes obtained from ;
coming rationing
'mon share in units of 5/94ths of a share
encouragement of
now
because wheat prices and a
leadership in
flour ceiling the American-Vichy
'"for each 5/94ths of a share held at
we're going to have to talk to a
policy, which opposition to Hitler
$5.3f
is removed. Any
wherever it
tor each
possibility of a had long been criticized.
unit.
On a share basis, stock
lot of people in the coffee indus¬
exists."■
similar 'squeeze'
holders may subscribe to 5 new sharet
developing be¬
Mr. Hull's statement said:
"3. Keeping alive the
try;'and elsewhere about the ad¬ tween flour and
V '
s'for each share held at $100,010 per share
basic con¬
bread is likewise
ministration of the rationing pro¬
Substantially all outstanding stock is held
cepts 'of freedom of the
"People who have been con- ^
averted.
French
--i - --—- —
^
^w.u,
,.v;j'";'r.v:;.: cerned
by Columbia Gas & Electric Corp.
V
gram. / ;,///;//; I \
about the Vichy
/;.,• y -v;; v /•;• /j
;
: Proceeds—To
policy 0f people, looking toward ultimate
"The
repay
current
debt
and
release
prices
of
loan this
Government will now be able! £es ra
'$2,835,000 first mortgage bonds held bj" ; y "Naturally, stories and rumors! wheat
0
institutions for.
will be announced
by Com¬ to see
(parent and associated companies, sua for
will. be ^creeping around about
clearly and fully its entire1^-France, as they existed before GerStOCk

'/■

corner

-■

i
Address—4th
&
.'Ohio
'V-•*■■■•.•

Main

St.,

put,' the squeeze

Cincinnati

him

a sufficient amount to
enable pro¬
ducers to, sell the wheat at
prices
in line with the

grocer,
and try

—

...

•

construction

costs

...v

what

Registration Statement No. 2-4379. Forn>
k-2.

'.v

(3-30-401

-.v./;.

Amendment filed

Oct

27,

1942,

thus

defer

effective

date

UNITED

GAS

CORPORATION

United

•

Gas

Corp. registered $75,000,000
and collateral trust 3V*%

tfirst

.'V''"'"-'1

mortgage

bonds due

1958

•

the

;

Address—2 Rector Street, New York City

subject

therefore
to

official

what-

the

straight

and

complish the

Underwriters—None

7."

Offering Terms^-Bonds will
••institutional investors, whose
be

person)

will

names

•Gas

Public

Service

Debentures

this

pay 6%
demand note of $25,925,Electric Bond and Share; to repay
'$2,000,000 open account debt to E. B. & S.;

000

to purchase from United Gas

Co.,

$6,000,000

bonds

due

1961.

its

1st

ernmenUnl^suTnl m polic^to-"

Balance

will

Used

jumped

Thus

demands,1

about

far,

five

eacn

Of Eorlb H. J, Elects cantors The American Brifish
SotJ!. American, British
At the annual
meeting of the ^olphpartpdiv^favnrp^TnH
Northern
New
imJersey Clearing ported this poficv The

Last

year.

1942,

ration of

House

weeks

per

Association, held

pound

person

Total

cer¬

amount

part to reimburse treasury for capital ex¬
penditures and possibly to pay accumulated
.dividends of $9,502,490
on
companys $7
preferred stock

year
tainly is not-a drastic reduction.".
WPB ■Chairman Donald M, Nel¬ Balances for

Coffee Board

Registration Statement No. 2-4760, Form
(5-15-41)'

.A-2

WPB

;

United
EEC

been

Gas

Corp. filed amendment with
Feb. 21, 1942,
stating that it had

unable

chase

further

agreements

panies

covering

with

the

extend

the

com¬

proposed

private

such insurance
companies of
of the
company's first
•

trust

35/4%

and

ments expired

'sold

privately,

continue

bonds

>said

eithe

the

Board

gram:

or offered
shall dictate

SUGAR

Indies

"1.

Sugar

Corp.

filed

42nd St.,

Business-—Company,
to

everal

New

York

Invert

Underwriters

1932

organized

and

will

Offering—The
,City

City

-of

the

former

the

offered

supplied
•

the

A2.

company,
at

dis¬

holder

reeved

by the selling
No.

2-4923

April 21, 1942, to defer
> ;V
•'
,

The

;

intent of the rationing

is not to affect adversely
exportation of coffee from

able

shipping

assure

.shipping facilities
sideration

permits.

space

"4. We-can

;

will

given

raising of the coffee
elimination

that

you

improve,
to

ration

the

con¬

the

arrivals

its
of

Beginning Nov. 28
rationed,

at midnight Nov. 28,

Edward

—

;

"5.

T.
Purcell,
Co., New Jer¬

may

effort

will

assured

continue

Year—Kelley Graham, The
Bank

of
Jersey
City; Robert S. Carmichael, Com¬

Trust Co. of New

Jersey City.

•

Jersey,

fort, to provide shipping

space

movement

United

Years—Edward F.

Hudson

One
The

Trust

Co.,

Briggs,

Union

City;

Yea?—Clifford

Spoerl,

First

National Bank- of Jer¬
sey City;. William C. Veit, Trust
Co.

New

William

•

Co.

Jersey, Jersey City;
Toffey, Commercial
New

Jersey, Jersey

Clearing Committee

William

praisal
dure

control

Dillistin, Valentine
Gidney.

iary

Even

persons who

Henderson said,
v

Sugar ration books will be

for

used

the

first rationing of coffee,
the last 10 stamps in the
book (Nos. 28 to 19).
Because of
the make-up of the book,
Coupon

using

No. 27 will be used to obtain the
first pound of coffee.

rations will be
in

sequence,

;

Subsequent

coupons taken

working

backward

to the center of the book.

'"■Mr,

Henderson

Production

consumer.

fixed

Board

said

the

;

War

ordered".- the

Bread prices have been
March levels since

the

May, 1942, and flour

was

frozen

at
the
levels
Sent. 28 to Oct. 2.

Regarding

the

"The

the

program

provides

making wheat available to
millers
the

levels

prices
which

an¬

biles may not buy
any of the fro¬
zen models.

fori

order,

originally

expiring

was put into effect
Aug.
to halt civilian sales of these

models until the Army and
Navy
have been able to fill their re¬

contains

the

credit

the advantages of

credit,
*•

Xhe

manual

and the Federal Re¬
have

extended

basis

for

some

time.

credit
when

either

Sept. 28 to Oct.
accomplished > by. the

Extension
of
the
freeze to Dec. 31 is
accomplished

by Amendment No. 18 to the New
of Passenger Automobile
Rationing

release
loan wheat back tb
producers by

Finance

the

receivable

not

Association

——

—

————

the help they get in
maintaining
good credit.

"Accounts

receivable

financing

is in the field of specialized cred¬
its.
Experience over the
years

indicates that it

safely

and

be conducted

can

with

profit

the

lending institution provided cer¬
tain safeguards
are
adhered to.
In

this brief manual

have at¬

tempted to bring to the attention
of

interested

bankers

some

ap¬

preciation of the special features
of

this credit and

necessary

the

procedures

satisfactory

oper¬

ation."

v-V

tained

not

helps

This

bank

unsecured

justified

enough to meet

all

the

helpful

legitimate

relationship

customers

who

manual

must

nec¬

business
the

should

advice

and

done

only

assistance

the

bank's

says

that the procedures outlined

the

counsel.

manual

"provide

the

maximum

further

designed

are

lending

bank

protection

with

consistent

with profitable operations."

with
need

most

N. J. Bankers To Hold

One Day Meeting In N. Y.

It keeps such customers in
bank and promotes an inti¬

mate,

the

cus¬

credit

need.

the

essarily be general, and that any
active participation in this kind

accounts

The

New

sociation

day meeting
serve

Jersey

will

Bankers

substitute

As¬
one-

at the Federal Re¬

Bank of New York

Nov.

20 for its usual two-day trust con¬

help, guidance, and advice. The ference, it was announced by F.
are
self-liquidating.
They Palmer Armstrong, head of the
help in cases where business is Association and President of
Keyexpanding rapidly. They can be
(N. J.) Banking Co.
Mr.
used effectively where customers port
have a minimum of capital and Armstrong pointed out that, in
a
heavy seasonal business.
They
help customers step up produc*
.

approximating quirements.

prevailed from
2, This will be

Bankers

loans

Oct. 31,
18

flour

31.

ration¬

ing certificates authorizing pur¬
chases of new passenger automo¬

The

plan,

nouncement said:

recently!

prevailing

also

banks

dans

forbidding sales of 1942
Chevrolet, Ford and Ply¬
four-door, hard-topped se¬
Dec.

ser¬

and the de¬

Reconstruction

serve

obtain

records,

individual ledger cards,

Sales Corporation

of the War De¬
partment, the Office of Price Ad¬
ministration on Nov.- 1 extended

until

bor¬

special department.

"The

the request

civilians

the

type

prevent increases in the
prices of
bread and flour to the American

their

shelves. Price Administrator Leon

—

says:

OPA; Extends Freezing

American

this

Of Automobile

and

debtors.

mouth

stock

schedule, and subsid¬
ledger of individual trade

Agriculture announced on Oct. 23
the completion, of a
program to

re¬

verification

audits

books

tomers

midnight, Nov. 21, for the
rationing begins, to

British operations farther East,"

following forms: agreement re¬
In
an
introduction
the
Bank
lating
to
the
assignment
and
Management
Commission
states
pledge
of
accounts
receivable,
that because of the
legal com¬
corporate borrowing resolutions,
plexities
and
variety
of
state
collateral note, assignment of ac¬
statutory limitations surronding
counts
receivable,
schedule
of
the
pledge or sale of accounts
pledged
accounts, statement of
receivable
the
suggestions con¬
charges, individual ledger card,

model

before

field

non¬

operations

collections,

manual

type

permit merchants

internal

sirability of
The

the order

coasts.

area, and to assist the
movements
supporting
present

headings.
and

borrower, proce¬
borower, credit ap¬

accounts,

The Office of Price Administra¬
tion and the U. S.
Department of

zen

this

the

provals,
port of

one pound every five weeks for
each person over 15 years old. All
retail sales of coffee will be fro¬

week

cuseus-

loan, rates, forms, ap¬

for

In Bread-Flour Prices

under

notification

Summing

along the Mediterranean

Atlantic

against^-

remittance

Willis and Ray M.

Plan To Halt Rises

French

terranean

the

plans,
examination
application, determining

rate of

loans

vice charges, hazards

Eugene T. Huberti, Franklin Na¬
tional Bank, Jersey
City.

starting

receivable,

operations

are

rower's

the

States.".^--yV-..:;-vv 7'77/i

include

credit

They

fori

coffee

rela¬

Nominating, Committee

be
ef-<

the

amount, of.

Co., Bayonne.

National

that

war

made, consistent with the

institutions

accounts

open

Trust

Two

give

German

includes

manual, which is designed to assist banks in expanding their credit
service

Muller,
Jersey, Jer¬
City; John F. Schmidt, Bay-

mercial

and

also

throughout the country have received from the Association's Bank
Management Commission a new Commercial
Bank'-Management
Booklet, Number 25, outlining the credit requirements and
oper¬
ating procedure involved in lending on accounts receivable.
The

ses

Years—Arthur

One

bases all

get

notification

You

Member

City.

ample.'

States to

that

week

Maintenance of

The Trust Co. of New

States

are

French
to

/ABA Manual On Accounts leceivabts Loans

;

Executive Committee

Trust

the

The Office of Price Administratibn .announced on Oct. '26 that

President

Two

the United

tions with the French
people and

Meeks.

Jersey City.

sey,

program is not

,■

Coffee To Be Rationed

distribu¬

it is possible

First

every

will

rationing

Secretary—Edward

sey

•

coffee

"2.

Co., Union City.

Commercial Trust

coffee and supplies in the United

(12-29-411

date

equitable

its

shipments of coffee to the United
States will continue to be author¬
ized in as great volume as avail¬

com-

will

a.; price

having

week

of the international situation.

Schultze, Hudson County National
Bank, Jersey City.
^

pro¬

onne

registered

and

States,

the

Trust

Vice

producing countries and importa¬
into the United
States, and

parent

outstanding

Statement

Amendment filed

Hudson

tion

registered.

the

public,

Registration

effective

President—Clarence

aims;

Opportunity for the Govern¬
of

the

military hands or
mptary support to the

ing Oct. 21, 1*943, follows: V

Understanding of the

import rather than the curtail¬
imports. "

the

stockholders
Form

con¬

coffee-rationing

United

"3.

sharesr

York,

the

Inc.,

436.691

New

17,000

the

will

Nelson;

"1.
ment

or any part of it: into Ger"

man

thos^ purposes have

hppnbeen:

day

one

the officers and com¬
mittees elected for the year end¬

Inter-American

Mr.

any

Oct.

A list

prospective imports of coffee.

are

owned

by amendment

Proceeds

;

intended to curtail
consumption of

by amend■/;

are

York,

47.7%

stock

New

company,

aggregate

.mort

Daniels,

program

registered

and

extent

Bank

remaining

The

'represents
:

named

Company of

National

1, 1941 to Sept. 30.
1942—Dec. 31, 1941. 11,518,330

coffee in the United States below
levels
justified
by
actual
and

blackstrap molasse6

outstanding,

solution

the

solely

"2. The

Republic and Cuba

•elreadv

.from

the

The

the

the1 Dominican

.merit-

Largest balance

ment of

City

operating subsidiaries engaged prim,
in
the
production
of
raw
cane
and

sugar

Paul

tion of such coffee

regis¬

plan of reorganization of
.Cuban
Dominican 8ugar Corp. and
cer¬
tain
of its
subsidiaries, is solely a hold¬
ing
company
owning
the
securities
of

clpally

;7v: /y;71':/

objective

CORP.

par

•pursuant

the;

matter of the in¬
ternal distribution of coffee within

tration statement with the
8EC for 453,691
•hares of common stock, $1

Address—60

that

raising

INDIES

West

the
on

gram is

the pest possible
price."
filed Nov. 5, 1942, to defer

the
.WEST

1,363,678,768

Prevent delivery

fleet

nf,rnn!l! Vi!/

highly im~
"5. And last, but most
important,
portant information virtually from
to pave the way and
prepare the
the inside of
Germany-controlled
background in the most effective
territory, and from North Africa! manner
possible for the planning
regarding Axis subversive activi-! and
sending of the miltary exties, and other important phases1
~
pedition into the ™
Western Medi¬

exchanges for
$1,640,359,879

year

tice PtovisiPns and to collaborate

with Germany; constant effort to

Snr+DThf J

from

Largest exchange on any one day
from Oct. 1, 1941 to
Sept. 30.
1942—Dec. 31, 1941_
12,827,655

following five points
respect to the rationing pro¬

with

afore-

agreements or otherwise,
to the public as
circumstances

Amendment
.effective dale

Board

firmed

_ln order to obtain
•

Nov.

consider

letter

Coffee

negotiations

shall

renewal

would

Chairman of

col-

bonds, due 1959.
This
"These purchase agree¬
Feb. 16, 1942;
The cor-

amendment states:

•poration intends to
to the end that its

Inter-American

sale

$75,000,000

mortgage

lateral

the

eliminating the coffee/ration•/: if
shipping facilities so improve that
supplies are ample.
7;

pur*

insurance

assured

son

Oct.

15 at the Trust Co. of New

Jersey,
Jersey City, N. J., the following
annually.! figures were presented:

one

Clearing House Ass'n.

consumed coffee at the rate
about
12.5 pounds

Therefore,,

Pipe Line
Coll.

nave

and

figure

pounds..

due

f1953; to

coffee

due to abnormal

year,

supplied by amendment, at 99.34%
Proceeds—To redeem $28,850,000 United

occupation.

Mo-;1 to^R^n^

purposes of this pro¬

get.

ten- years before 1911 we
consumed about 13
pounds (ped

; VV./.v
sold to

man

''The liberation of French

ac¬

plan

can

from

/■

source.

necessary

content.

gram."

"For

•

becomes

are

public

wheat

and

exists

now

coffee.

stating

story

Business—Production and sale of natural

even

that

;gas; part of Electric Bond and Share Sys¬
tem
,:> 77 ''

confusion

"■.?V hysteria than

•

modity Credit Corporation at such
do.;. Most of: time - as the
marketing of loan

propose- to

create

the

them will be entirely
garbled and

Regulations, effective Oct.

31.

tion

and

lower

costs.

Accounts

receivable financing enables cus¬
tomers to take discounts and save
money

doing

so,

aside

from

view

the

rubber

and

gasoline

shortages, New York will be
convenient than Princeton

bury
were

Park,

where

the

previously held.

As-

sessions

THE COMMERCIAL

1712

& FINANCIAL

Thursday, November 12, 1942

CHRONICLE

SEC On Interest
BIDS MADE ON

BONDS WITH

Our Reporter
COUPONS MISSING

Thursday, we expected some

Last

Inquiries Invited

S. H. JUNGER CO.
Exchange PI., New York

DIgby 4-4832

Phone

Teletype N. X. 1-1779

The

Treasury
on

that the news

would be out in a few days,

sometime

Convertible Preferred

Mexican External
and Internal Loans
Mexican Interest Arrears Cfs.

Department an¬

1-1397

to
"In the

investment

instant case,

therefore,

receipt of the $40,000

interest

acquired.

case, an

basis, though, one basis which is of
might consider at first glance—and
Secretary is not preparing any nice little sur¬

the

that basis is that

Ass'n

2-8780

In the particular terest income or as a profit on the
After payments are
investment company pur¬ investment.
chased at a 'flat' price of $260,- received on account of the princi¬
000 (a total of) $1,000,000 princi¬ pal and defaulted interest in an
pal amount of bonds with at¬ amount equal to the purchase

were

predicated on one
importance than you

All this is

much

Teletype

HAnover

period prior to the date on which
such bonds and defaulted interest

healthy state—if that can be man¬
and the day for the next offering. ...

aged between now

N.Y.

payment should, in my opinion, be
treated as a reduction of the cost
of the investment and not as in¬

Government market in a more

25 Broad St.,

Security Dealers

the

treatment

Members N. Y.

the

"Question has been raised as
the

CO.

M. S. WIEN &

of interest collected on
defaulted bonds applicable to a

ing to Philadelphia advices to
New York "Herald Tribune":

Bought—Sold—Quoted

company

the
time being
ad¬
visers now that he is back from England. ... It is fitting and
proper that he should postpone announcement on the November
borrowing to a more propitious date. . . . There is no reason for
haste at this time.
And he probably would like to see the
Morgenthau has plenty of cash for
and presumably many plans to talk over with his

000 at the moment.

Oct. 30 that the tend¬

$500,000,000,

information on the November

probably during the week of Nov. 9. , . . There are a number of
things to be straightened out first, said he—and thus the delay. . . .
The Treasury's working balance holds more than $4,200,000,-

there¬
abouts, of 91-day Treasury bills to
be dated Nov. 4, 1942, and $o ma¬
ture Feb. 3, 1943, which were of¬
fered on Oct. 28, were opened at
for

ers

nouncement

Result Of Treasury

nounced

Nov. 5 an

We had been told we would receive an indication applicable to a period prior to the
on
which bonds and de¬
then as to what was up for this month. . , . And while the general date
opinion was and still is at this writing that the "taps" or "on sale" faulted interest were purchased.
bonds are to be offered to non-banking investors again, there was The opinion, prepared by William
the usual degree of anticipation apparent in the financial district the W. Werntz, Chief Accountant for
morning of Nov. 5. , . . Then came Secretary Morgenthau's an¬ the Commission, follows, accord¬

financing.

MUTILATED

Exchange

of SO

Penn Central Airlines

opinion regarding the treatment
by an investment company of in¬
terest collected on defaulted bonds

illliWMBQIiBIMiyiiMWBBBBmmmM

■■III!

and

Securities

The

Commission issued

Common & 6s

On Defaulted Bonds

On "Governments"

Bridge Works

Ft. Pitt

tached defaulted interest coupons

price,

The com¬

amounting to $250,000.

collections

further

any

thereon

should be treated not as

subsequent to the purchase interest but as profit on securities
one interest payment of
purchased.
"
"On the other hand, it seems
$40,000 on account of defaulted
GIVE US TIME!
:
The details of this issue are as
Y'/
Y. V''/'
interest coupons for periods prior clear that collection of interest
follows:
If there is one lesson the Treasury should have learned from its
to the purchase.
coupons covering periods subse¬
Total applied for
$905,637,000 near-fiasco October deal it's the lesson of preparing the market for
"Where a purchase is made of quent to the purchase may be
Total accepted
500,044,000 these giant-size financings. . . . No surprises, please, v . . No over¬
defaulted bonds with defaulted in¬ treated as interest income unless
Range of accepted bids:
night changes in plans without warning and without attention to
the circumstances of a particular
High—99.922. Equivalent rate of the simple problems of placing subscriptions and calling board terest coupons attached, it is blear
case are such as to indicate that,
that the purchase price covers not
discount
approximately
0.309% meetings. Y
It is to be assumed that Morgenthau learned that les¬
only the right to receive the prin¬ despite the apparent nature of the
son just as the bond dealers and traders re-learned it a few weeks
per annum.
payment, recovery of the cost of
Low—99.905. Equivalent rate of ago.
If the postponement in the November financing announce¬ cipal of the bond itself but the the investment through sale or re¬
discount
approximately
0.376% ment is just for the purpose of ironing out some kinks, fine and right to receive any payments
demption is so uncertain as to
per annum.
dandy.
If it's for the purpose of working up a new plan to try made on the defaulted interest make it necessary to treat the
Average price—99.906. Equiva¬ out on an already tired market, the Treasury is taking another coupons purchased.
payment as a reduction of the in¬
lent rate of discount approximate¬
"Under these circumstances the
unnecessary chance with the stability of its major source of funds. . .
vestment."
But these remarks are preliminary. . . . The general feeling still price paid cannot be deemed to
ly 0.373% per annum.
is that we'll have another issue of 2V2S to be directed at insurance reflect only on the cost of acquisi¬
(45% of the amount bid for at
the low price was accepted.)
companies and corporations and individual investors of wealth. . . . tion of the issuer's obligation to
Holmes With Taussig Day
There was a maturity of a simi¬ And the odds are this issue will raise in the neighborhood of a bil¬ pay the principal sum but must
ST. LOUIS,
MO. — Louis L.
lar issue of bills on Nov. 4 [in lion or more dollars -right off.
.
.
The insurance companies are instead be considered to reflect as
Holmes
has
become associated
amount of $352,565,000.
getting set for big subscriptions and the Victory Fund Committees well the cost of acquistion of the
are ready to spread the word on the "on sales" throughout the coun¬
issuer's existing obligation to pay with Taussig, Day & Company,
the interest coupons already ma¬ Inc., 506 Olive Street, members of
try. .'
Y. ' % ■' ■
■ 1 YY'Y\
V...
Y :
On Leave Of Absence
the St. Louis Stock Exchange, and
It still seems a good idea to give us more time to prepare to
tured.
In the usual case, more¬
will represent that firm in Springs
BRIDGEPORT, CONN.—Frank
buy new bonds. . . . It still seems sensible to allow the experts
over, there is no satisfactory basis
field and Joplin, Missouri.
Mr.
Carley Hunt, who was formerly a
and salesmen more than a few hours to educate buyers unaccus¬
on which to allocate the total price
Holmes formerly represented the
tomed to the market in the ways of subscribing and the virtues
partner in Hincks Bros. & Co. and
between
the bond, on the one
for the past six years has been a
Cragin Investment Company in
of special new issues. ... Eventually, the Treasury must reach
hand, and the defaulted interest
Director and Treasurer of GaySpringfield, Missouri.
that point of view, most private authorities believe. ...
coupons, on the other.
Garfield J. Taussig, President of
nor, Clemence & Co., Inc., is tak¬
"Under such circumstances the
Apparently, though, it hasn't come to that yet. . . . Although we
Taussig, Day & Company, Inc.,
ing a leave of absence and is now now know books on new issues will remain open longer than two
bond and the defaulted interest
was reeently-eleeted-a directennf
associated with Manning. Maxdays.
And we have some idea of the types of offerings to come, coupons "should be treated ag a the Terre Haute Malleable & Man¬
well and Moore, Inc., of Bridge¬
so we should be able to figure out what's ahead on our own. . .
.
unit for accounting purposes and
ufacturing
Company
of Terre
port, Conn.
That will hold only if the "no surprises" idea takes hold in the Treas¬ collections on account of the de¬
Haute, Indiana, and also of the
faulted interest coupons should be
ury Department too. . . .*
Duro Test Corporation of North
treated not as interest on the sum
Now Doolittle Schoellkopf
Bergen, N. J.
THE PATTERN
invested but rather as repayments
BUFFALO,
N.
Y. —Effective
There's a "full house" of Government securities out and on the thereof. Moreover, in view of the
Nov. 1 the firm name of Doolittle,
calendar now.
Ranging from discount bills due in 90 days to uncertainty of eventually receiv¬
Tax Law Explained
Roth & Schoellkopf was changed
certificates of indebtedness due in a year to notes due in one to five ing payments in excess of the pur¬
to
Doolittle, Schoellkopf & Co.
R. H. Johnson & Co., 64 Wall
years to medium-term bonds due in five to 10 years to long-term chase price, it is my opinion that
Offices will continue in the Lib¬
non-banking investments due in 10 to 30 years. . . . You know the ordinarily no part of any payment, Street, New York City, is distrib¬
erty Bank Building.
list and you can choose the securities best fitted to your portfolio whether on account of principal or uting a short explanation of the
On Nov. 19 Nina B. Doolittle
1942 Tax Law, copies of which
needs.
•. /
the defaulted interest, should be
will become a special partner in
As a matter of fact, the market's acceptance of this list is re¬ cinsidered as profit until the full may be had from them upon re¬
the firm.
flected in the stability of the price level following Morgenthau's
quest.
purchase price has been recovered.
announcement that he wouldn't talk Thursday. ... The general
Federal

the

Banks

Reserve

prises for us again.

pany

received

30.

Oct.

...

Tax Worksheet Available
Spencer Trask & Co., 25 Broad

Street, New York City, members
of the New York Stock Exchange,
have

prepared

for investors.

tax worksheet
Copies may be ob¬
a

tained from Spencer Trask
upon

& Co.

have

table, prepared by the Treasury, throws that point, of unusual
nificance from an over-all financing angle, into sharp focus.

CITY, N. J. —Pettit,
Bryan & Kalbach, Inc., 26 Journal
Square, sponsors of the Knicker¬
bocker Fund, announce a change
JERSEY

firm

name

bocker Distributors,

Knicker¬

Inc.

There is

maturity trends are apparent at

the moment. . , .
Y,Y Y-Y
% Held
■

Jan. 31
66.9
53.6
55.8

Maturity of Issue
Within

one

year

One to five years________

Five to
10 to

_______

10 years

41.2
26.3
40.3

15 years..

15 to 20 years

change in management, policy

Over 20

Total

years.......
____

% Held

Aug. 31
62.0
54.4
60.4
40.0
18.8
' 37.9

between

one

maturities

common

and 10

ranging

years,

from

Sugar

common

ranging

the decrease in securities held with

years.

That's what the

Treasury wants—liquidity among the commercial banks.

Vicana

52.9

51.3

_______'

______

Notice the increase in securities held with maturities

R. Hoe

turities ranging up to

day

Susquehanna Mills, Inc.
HAY, FALES & CO.
Members New York

Stock Exchange

Broadway N. Y. BOwiing Green 9-703)

1-61

...

That's what the Treasury wants-

Aug. 31

Jan. 31
26.0
years___~—24.7 ':

Maturity of Issue
One to five

10 years

Five to

——

15 years.—————

10 to

15 to 20 years_.————————

Over 20

years——

Total

————

Not much change

22.7

—_

here and not much

•

*25.0

16.6

16.6
25.9
20.2
25.6
22.6

25.9

29.9
26.2

21.7

to boast about either.

Victory Fund Committees are trying to start an allout campaign to get corporations and individuals into the longterm Government mart and to support each "on sale" financing,
.

The

etc., that comes
INSIDE THE

along.

November quota
tive.

The real work lies ahead.

. . .

MARKET
for war bond sales considered
$775,000,000 was exceeded

October quota of

too conserva¬

with sales to¬

but October quota was too law also. . . . Odds are
Now consider the way holdings of insurance companies shape up
that on paper, the Treasury will make an excellent showing in No¬
as of today in comparison with early 1942.
vember because the $800,000,000 quota for this month should be
% Held
% Held
easily topped. ... Story is Morgenthau will raise the quotas as the
fiscal year progresses. . . . He'll have to if we are to meet the
Maturity of Issue
Jan. 31
Aug. 31
Within one year____
3.5
3.6
$12,000,000,000 war bond sale goal. . . .
Insurance company sales of high-premium, tax-exempt munici¬
One to five years____
11.7
10.8
Five to 10 years
16.5
13.9
pals place them in position to buy more Governments and cement
10 to 15 years
their friendly relations. . . . Besides freezing a profit on the munici¬
20.7
21.8
15 to 20 years
45.0
52.9
pals, insurance companies get 2.5% return on the "on sales," com¬
Over 20 years
23.8
23.6
pared with around 2 to 2.10% yield on municipals. . . .
Few refundings on the Treasury calendar. . . . December ma¬
Total
16.1
15.3
Notice the increase in securities held with maturities ranging turity is $232,000,000 1%% notes. . . . Then a small-block of notes
That's all. . . .
between 15 and 20 years, .the decrease in securities held with ma- due in March.'.
taling $814,353,000,

________

Bell Teletype 7SY

Within one year———.———-—

...

Spokane Int'I R. R.

10 years.

portfolios of "permanent" investors. . . . .. .. / ■ , ,
Now consider the way holdings of other investors shape up to¬
in comparison with early 1942. ...
% Held
v,:v,./W/i v'YYY:.% Held

long-terms in the

sig¬

here is the way holdings of banks shape up now.
The date chosen is Aug. 31, but the Treasury reveals the same

personnel.

to
.

For instance,

Pettit, Bryan Change Name

banks, long-terms for non-banking institutions—is beginning
a marked influence on the make-up of investors' portfolios. .

for

request.

their

opinion is we know what we're to get—if plans as calculated remain
unchanged. . . . "If." . . i
,YY
In addition, the design of the Treasury's offerings—short-terms

Full text of Commercial and Financial Chronicle : November 12, 1942, Vol. 156, No. 4124, Section 1

FRASER