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1S39
ESTABLISHED
In 2 Sections
Section 1
—
Financial
Reg. U. 8. Pat. Office
184
Volume
New York
Number 5586
EDITORIAL
Basic Trends in the Economy
As
;
Much
We S
And Effect
speculation is current about the practical
of
consequences
an
immensely popular President
Lamoiit
and
President
the opposition party
—
net effect of
more
confined
him
to
—
can
been
with good warrant
the President
and
of course,
when Congress
of different parties, but
There have,
other occasions
numerous
were
a
almost
.
situation where the Chief Executive won
unprecedented acclaim
wish
I
from the voters
that are
while the Democratic candidates for seats in Con¬
discuss
to
in the same election clearly outpulled their
opposite numbers in the President's own party.
Such an outcome could happen only in a coun¬
happen here,
.
Sumner
tion
to
H.
the nature of it.
facts
about
II. The Growing
the
of the
though
on
page
26
intensity
one
DEALERS
are
a
of
alone,
some
left
of
savings
Because,
even
want merely
believe in sav¬
you
I
might not be otherwise available.
For example, no association official
who values his future, and his job,
rise in
on
page
that
conform,
blight
on
is going to spout
And tne urge to
ideas, does its part in
new
Continued
29
on
page
32
York State Savings
Association, White Sulphur Springs, Va., Nov. 7, 1956.
address
♦An
Bank
by
Mr.
Mooney before
the New
corporate
and investors in
registered with the SEC and poten¬
"Securities in Registration" Section, starting on page 38.
issues
George A. Mooney
that sound too radical in public.
ideas
its
before New York Society of Security
by Dr. Slichter
complete picture of
tial undertakings in our
it
as
your job—for my function is super¬
vision, not leadership. I can, how¬
ever, offer a kind of blueprint which
of
Analysts, New York City, November 8, 1956.
afforded
critical stage.
faithfully
ings banking and I intend to speak
There is a job to be done—
of the most impor¬
is the steady
SECURITIES NOW IN REGISTRATION—Underwriters, dealers
securities
be
to
Capacity of the
Productivity
Continued
prevail in Washington for at least two
Continued
a
car,
redefinition
a
functions?
bank
capacity to increase production and to make innovations.
address
a
there comes the day when
the repair kit is not enough.
Why do I take it upon myself to
run,
may
to Increase
economy
that the anomalous situa¬
*An
have reached
patch¬
done.
up.
Certainly
tant
largely
have
we
As in the life of
propose
(5)
The increasing
competition.
Slichter
we
do,
can
But
and
.•
Economy
The informed voter knew full well that
reason
ing
level.
•*
that a wide and deep gulf separated the two
parties, but much of what was said was for politi¬
was
conditions. What mending and
'*
(4) The growth of institutions that
produce a slowly rising price
pear
It is for this
regarding trustee system, and in Federal charters.
tend to
parties. At least this latter seems
the voting last week, True, polit¬
made every endeavor to have it ap¬
loans^ increased life insurance sales,
My discussion today covers a whole spectrum of ideas
for revitalizing savings banking.
For a long time now
we have tried to adapt savings bank
powers to modern
of the
growing capacity
savings banks to return to the mass
loans, limited checking accounts,
upon
family
borrowers, and adoption of enthusiastic rather than nega¬
tive attitude. Finds merit in branch extension, inquiries
(3) The tendency of the economy
to outgrow the business cycle.
to be the case in
such
are:
via
split dividends, over-the-counter dealing with mortgage
to increase the demand for
goods.
tween the two
cal effect.
These trends
banking, and proffers a "whole spec¬
revitalizing" such institutions. Mr.
FHA modernization
that are
investors
growing capacity
The
(2)
economy
reason of the fact that there are no very
clear-cut differences in political philosophies be¬
ical orators
interest to
special
The
(1)
only by
Mooney calls
market
partisanship indicated, New
for
of ideas
trum
economy
our
/ economy to increase production
to make technological changes.
imagine,
we
in
trends
securities.
in
try with a government of our own peculiar sort
—as
distinct from such other systems as those
in effect in Britain and the other democracies of
can
of
also
gress
the world—and it
basic
five
we
with this form of
upon
of great importance to all citizens but
force
a
no
Superintendent avers savings banking
must preserve," probes what is wrong
Banking
"is
Introduction
I.
:
here is
Making clear there is
rapidly growing "industry of
and
new
Crucial Crossroads
a
York
tech¬
nology reduces its dependence upon public policy; and
chooses, in this imperfect world, the evil of creeping
inflation as the least of three possible evils.
Trends
favoring stocks, says Dr. Slichter, include diminishing
susceptibility to business cycles, and long-run upwardcreeping prices. Opines worker's output, recently well
above 2%, may soon be above 3% per man hour.
clearly defined in the campaigning which
preceded the-election.
sees attractive¬
relative to bonds, after analyzing
basic trends on our economy; singles
discovery"; notes the economy's dependence
point to "mandates" from the people, or could
if the issues of the campaign had been definite
and
five
America's
out
Copy
Superintendent of Banks, State of New York
University Professor, Harvard University
of stocks gaining
ness
a
By GEORGE A. MOONEY*
Nationally known Harvard Economist
particularly, perhaps, the President but surely
not
At
SLICHTER*
H.
Cents
Savings Banking Now
Upon Securities
SUMNER
By
being returned to the White House at the same
time that his party is definitely given a vote of
no confidence.
History affords few if any prece¬
dents for the results of last week's voting. Both
the
Price 40
7, N. Y., Thursday, November 15, 1956
now
State, Municipal
in
and
u. S. Government,
State and
STATE
and
Securities
telephone:
A'
UNDERWRITERS
Municipal
MUNICIPAL
AND
COPIES OF OUR
DISTRIBUTORS
HAnover 2-3700
BONDS
INVESTMENT
"POCKET GUIDE FOR
ON
department
ST.,N.Y.
THE FIRST NATIONAL CITY BANK
Burnham and Company
MEMBERS NEW
YORK ANO AMERICAN STOCK
15 BROAD STREET,
CABLE:
NEW YORK 5, N. Y.
•
Dl 4-1400
Net
T. L.Watson &Co.
ESTABLISHED
INSURANCE STOCKS
Teletype: NY 1-708
Active
New York Stock Exchange
Markets Maintained
Stock
Stock
Eastern
3%%
Executed
Canadian Exchanges At
CANADIAN
Exchange
Chase Manhattan
bank
YORK 5
Marmon-Herrington
Company, Inc.
Guaranteeing Pacific Great
SECURITIES
Orders
Exchange
of British Columbia
Province
On All
DEPARTMENT
Price
in
Railway
15,
United
92%
COMMON
Debentures
Due June
Regular Rates
Payable
American
York
$150,000
Dealers, Banks and Brokers
Commission
the
34 offices from coast to coast
CANADIAN
1832
Members
New
120 BROADWAY, NEW
Bond Dept.
To
BANK AND
Members
TELETYPE MY I-22S2
COBURNHAM
REQUEST
Harris. Upham & C9
OF NEW YORK
EXCHANGES
DEPARTMENT
BOND
NOW AVAILABLE
ARE
BANK
bond
INVESTOR"
TODAY'S
SECURITIES
CORN EXCHANGE
30 BROAD
Bonds and Notes
LATEST
of
CHEMICAL
Public Housing Agency
to
Analyst*
1981
States
Dollars
our
upon request to
Unlisted Trading Dept.
(Room 707)
yield 4.25%
Teletype NY 1-2270
25
BROAD
STREET
DIRECT
WIRES TO
MONTREAL AND TORONTO
Dominion Securities
IRA HAUPT & CO.
Exchange
Principal Exchanges
Members New York Stock
NEW YORK 4, N. Y.
FIRST
£>OtUAwtdt COMPANY
Goodbody & Co.
Grpokation
.1LM8ERS NEW YORK STOCK EXCHANGE
BRIDGEPORT
•
PERTH AMJBOY
•15 BROADWAY
NEW
YORK
1
NORTH LA
SALLE ST.
CHICAGO
40
Exchange Place, New
Teletype NY 1-702-3
York 5, N. Y.
WHitehall 4-8f61
and
other
111
Broadway, N. Y. 6
WOrtb 4-6000
Teletype NY 1-2708
The Commercial and Financial Chronicle,.
(2066)
For Banks, Brokers, Dealers
The
only
Security I like Best
A continuous forum in which, each week, a different group of experts
in the investment and advisory field from all sections of the country
BURDENED TRADERS
participate and give their
Try "HANSEATIC"
Because
whatever
their
for favoring
reasons
(The articles contained in this forum
they to be regarded,
are
trading
W.
'*■;:
problem, they know "Hanseatics'*
'
as an
-V
•
with
arity
aspect
every
ready
ways
of
market
Rochester, N. Y.
.
Another process
has
Security I Like Best" is the
stock
patented
Sons
t i 1
New York Hanseatic
Corporation
Established 1920
Associate
American
J
Stock
from
search
Exchange
BOSTON
PHILADELPHIA
Private
SAN
•
Wires
to
has
re¬
done
considerably
CHICAGO
•
better than the
FRANCISCO
industry
Principal Cities
as
a
whole.
For
cal
Specialists in
1956
the
1
York
American
110
lowest
p
13 %
and
year,
the
stock
"
share
in
1953.
in
sold
Commonwealth Natural Gas
the
6Y2.
of
st()ck
common
Because
amount
the-
of
of
were
of
book
value
of
as
June
$19.23 per share.
out-?
com¬
$3,404,324.
the
30,
common
1956
was
the
earnings
when
each
1
year
II.
LUTES
Research Department
^
S i
Allyn & Co.; Inc., Chicago,. 111.
double
for
the
its
past
made possible bv
Technical
Division
which
85
some
of
people. With the
the
synthetic
are
industry,
fiber
part of the
a
Bancroft
is
considered to have the largest and
best
equipped
textile
Technical
Division in the world.
Sugar
promising new
developed by Bancroft
products
"Growth
company" is
a
many-
relation
to
comparisons
lit
the
and a number of
textile ' firms both here
and abroad have been licensed
by
Bancroft
to
produce
the
yarn,
largely at present from continuous
Trading Markets
yarn,
duction
Basic Atomics
yarn
-
most
the
have
true
But
growth
nylon.
two
Since
years
ago,
its
must
neces-
border
at
contain
least
is
The
man¬
agement
Kendall
H.
phi-
1
o s o p
h
natural
fields
supplement'" the
of
growth
program
judicious
indicating
than
rate
the
as
well
prfcast
exists
entry
a
into
faster
lot
and
for
started
company
of money
in
or
write
'
-
Yamaichi
Securities Co.f Ltd.
Established
-
1887
*
Home
Office Tokyo —to Branches
Brokers A Investment Bankers
111
Broadway, N.Y. 6 COrtlandt 7-8688
BOUGHT
SOLD
—
general
QUOTED
L A. DARLING CO;
Unusual
Co.
.
Schools and Hospitals
And
M0RELAND & CO.
Members
Midwest
Detroit
pipe
ma¬
DETROIT
and
capstone
Woodward
in
growth
Stock
Exchange
Stock Exchange
1051 Penobscot Building
Pipe
Lime
26, MICH.
2-3855
DE
75
in
products
construction
new
Branch
Office—Bay City, Mich.
field,, and
being
materials
experienced
Marietta.
by
field,
is
American-
VUOUR INOf
/
economy.
~
approach, coupled with a pro¬
for a broad geographical
spread of plants and marketing
Adjust-A-Bilt Wall
Sections for "Homes
these
concrete
a
Development ia
vears
(1954); Southern Ce¬
(1955),
New
Movable Partitions for Offices,
Continuing growth in the ether
divisions, besides the building and
growth
for
Demand
tinues
to
tensive
grow,
research
A-M
paints
and
t
5
ex¬
the constant
Mass
<£.
con¬
and, through
outlets) plus high quality and per¬ development of new and better
formance
standards, creates the paint products, American-Marietta
has steadily improved its position
true
"growth company," whose
achievements may then be meas¬ in the industry. It has continued
its growth as a major manufac¬
ured.
distinct
43-year old
these
I
choose
the
preferred supplier of hundreds of
The
Call
Dragon Cement Co. (1956).
which
which
market,- 1 inci¬
dentally, has sales of about $350
market
-
information
current
-
Builders
Concrete
Standard
Co.
the; building
prudently
a
ietta
item
/
Mexico/
in
as sewer
American-Marietta's
managed company it is especially
desirable that a counscious man¬
agement
of
Master
Universal
(1953);
ment
To
y.
in
Cement
Lutes
for
vertising
For
(1953), a specialist and
prestressed
concrete
other
Co.
of time "Ban-Lon" has cap¬
tured a good share of the sweater
annually.
appear to be stirring due
improved Japanese economy.
/ i mi
mmc
%
a
saving*
new
space
a
to
a
(1950); Lamar Pipe and Tile
(1953); Concrete Products Co.
terials;
one
ment—a
Gulf
to
acquisitions
been
anH
,
million
.and
phases of growth in this mulations are used on thousands
of
quality
products,
including
company. In my opin¬
successfully
the
remarkable
record
of automobiles, trucks, farm machin¬
demonstrated
its
versatility
in ion,
gloves, sport shirts, underwear and American-Marietta is indicative of ery, railroad cars, pre-fabricated
especially in sweaters. In a short the bright future it promises and homes, office equipment, furniture
spent
remaining at practically
stationary levels for three years
now
intro¬
this
.From its first application in men's
dress
socks, it has
has
STOCKS
after
with
pipe for drain¬
work
sewer
bridge decks
market,
Teletype JCY 119
fields
of
specialized
production
The past half dozen years have turer
line primers, surfacers and finishes
provided ample confirmation of
form has become one of the American-Marietta's position as a through active research, expan¬
sion of facilities and progressive
important developments in "growth company." This period
embraces the culmination of two selling. A-M industrial paint for¬
knitted " outer-wear
trade.
filament
TMT Trailer
JAPANESE
United
growing fields during recent
increases in
gram
leading
HEnderson 2-8570—N.Y.:
Dlgby 9-3424
and
Significant
This
which puts permanent crimp
materials
ducer of concrete
nadian
such statistical
is their "Ban-Lon" yarn. This
yarn
ess,
the
term, which today is in¬ October of 1956 A-M became one
creasingly applied to companies of r of the ten
largest producers of ce¬
very diverse character. In the last ment
by the acquisition of Dragon
analysis,,
;
Cement Co;-This gave A-M five
growth must
well located plants through which
be measured
it supplies markets from the Ca¬
is produced by an exclusive
proc¬
Tel. HAnover 2-4850
when
major producer of chemical-lime,
cement; and concrete products. In
faceted
as
branch offices
our
impressive roster of companies
age
American-Marietta Go.
entails
One of the most
1929
Exchange PI., Jersey City, N. J.
.
additional ele¬
products,
chemical
tWeme®dCompaTuj
I
1949
welded into the A'-M family. A-M
is now the country's large st pro¬
.
A. C.
sarily
producers, who
Eastern Industries
CAPPER & CO.
Since
an
in
f
Brick and Title Company was ac¬
leader
exception
Dover Corp.
Philippine Oil Development
-
construction
KENDALL
.
MY 1-1557
for 43.5% of the total sales dollar.
equity.
*
>"
numbers
Engineering
(N. C.)
and
been
of America
their
Direct wires to
purchased
new
Construction
Resort Airlines
growing
fields.
Chief
among
building and con¬
has
HAnover 2-0700:
stock
years
is to
a
large extent
attributable to the development of
American Pipe &
(Texas)
these
Co.
two
Pigeon Hole
profitable
Co.
Bancroft's ability to
Trading Markets
Security Bank Note
can
year
i t s,
working
capital and
earnings
Southland Racing
each
sales, net prof-
period.
TWXLY77
37 Wall St., N. Y.
Bancroft
Sales amounted
to
Lynchburg, Ya.
ESTABLISHED
If
earnings
in
representation
$27,581,755 compared with $23,234,497 for the preceding fiscal
STRADER and COMPANY, Inc.
Punta Aliegre
better.
turn
Exchange
W+'r fiance
managed
expansion that is still continuing
and which resulted in significant
when
a
Stock
gfnrlr
American
Orleans, La. - Birmingham, Ala.
Mobile,Ala.
quired there has been a marked
12,500 shares of
period of development in the ex¬
early this year at an
panding' building
products
and
average cost of around 8Y2 to 9.
7
which
10c
$10,247,449. and
The
stock
Barnes
hands
Quarterly
amount
current liabilities
-
t
Now
i
York
A
& Co
19 Rector St., New York 8, N. Y.
*
companies
in
the
industry; im¬
This is probably the rea¬
soning behind an investment trust
the
pany's favorable financial position,
the company was able, during the
year, to reduce notes, payable by
$1,000,000. Current assets were in
Bassett Furniture Industries
LD 39
31
nice capital ap¬
a
their
favorable
are
shares of
standing.
American Furniture
Life Insurance Co. of Va.
and autonomously
sified
year
conditions
currently
being
■'//■v.
Capitalization as of June- 30,
224
.
fiscal
New
Mf*mher*
prove.
The
1956 consisted of notes
payable in
the amount of
$1,710,000 and 883,-
Trading Interest In
Members
^
who
licensees in
industry takes
their
more
compared
as
has
past six years is
dividends in the
per
O
STEIN ER, HOUSE
per
paid.
1
the
double
earn¬
high of 9*4 in February of
a
this
§
M
TEL. REctor 2-7815
of $1.03
with
=
BROADWAY, NEW YORK B
textile
for
:
reported
company
the-Counter Market,
p
Stock Exchange
Stock Exchange
their
of
of 302
on
the
ment in earnings the common stock
is selling around 7 Vz on the Over-
IftpONNELI&fO. |
New
W. H. Holly
spite of this tremendous improve¬
j
Memoers
The "Ever¬
housewife
share, as com¬ for two years running when, the struction materials, including ce¬
pared with per share earnings of industry they are in is in a slump, ment,
limestone
and
concrete
53c in 1955 and 21c in 1954.
seems " reasonable
In it
to
expect ' products, which in 1955 accounted
ings
Since 1917
Research
Lutes,
Dept.. A C. Allyn & Co.. Inc..
Chicago, 111. (Page 2)
"
to
close
total
a
preciation
ing June 30,
1
RIGHTS & SCRIP
fis¬
end¬
year
H.
old—Quoted
Company
the
themselves with
>
the
Kendall
trade
B ought—S
,
American-Marietta
;
activi¬
ties
Teletype NY 1-40
WOrth 4-2300
its
the
(Page 2)
fitted together into a
single organization of great hori*various
programs.
This
figure' zontal strength.
compares with 34 licensees for the
A-M's most important phase of
year 1951.
growth began in 1935 with * the
I
believe that anyone with a
joining of American Asphalt Paint
little imagination and patience can Co. and Marietta Paint and Color
buy the common stock of this Co., when facilities for the pro¬
company with a minimum of risk. duction of industrial finishes were
I also think that they will find
acquired. This initiated a surge of
developments
Member
ago.
Co.,
&
Y.
countries in connection with their
and
program
the
at
had
of its
use
modernization
Broadway, New York 5
120
aw*/ -.aXM: 'irv&OSte'm
Bancroft bec a
N.
iron.
Products producers of cement, paint, resins,
"Everglaze" trade-, adhesives, chemicals, metal pow¬
mark are crease resistant, will not ders, household products. It man¬
shrink or stretch out of shape, and ufactures a wide line of building
require little or no ironing. Ban¬ and construction materials t- rough
croft has many other products and a continent-wide linkage of diver¬
industry,
e
tex-
like
carrying
is identified
the
the
with
doesn't
com-,
of
with
Rutty
-
which Bancroft
carries
of "Everglaze;"
famous
Joseph Bancroft &
Co.. Although the company
mon
;
Secretary, t>age,
Inc., Rocnester,
glaze Fabrics" nave becbme world
My current selection for "The
them.
to serve
months
Louisiana Securities
Joseph Bancroft & Sons Compary
,
,
Joseph Bancroft & Sons Company
al¬
four
Alabama &
Selections
—W. H. Holly,
to
u/y^y.
Secretary, Sage, Rutty & Co., Inc.
the
is
about
Bancroft
r :
name
Over-theCoiinter
not
are
Week's
Participants and
Their
-
particular security-
a
intended
be, nor
offer to sell the securities discussed.)
HOLLY
II.
'j
'
facilities and long famili¬
wide
This
Forum
..Thursday, November 15, 1956
on
ad¬
developing
a
"Ban-Lon," and this
showing a profit for
common
as
reasons
American-Marietta today is the
through
divisions
company
Quotation Services
for 42 Years
•<
i
■
appliances.
shares of American-Mar¬
the "Security I Like Best."
different
and
Over-the-Counter
and
its
essential
materials
expanding family
and
subsidiaries.
AiM
Although
founded
as
company,
counts
of sales.
for
a
was
paint manufacturing
paint volume
less
This,
originally
of
than
now
one-third
course,
is
due
Incorporated
Established
of
to
The
is now one of the major
National Quotation Bnreai
ac¬
46 Front Street
CHICAGO
Continued
on
page
45
•
»
1913
New York 4, N. Y.
SAN
FRANCISCO
Number 5586.. .The Commercial and Financial Chronicle
Volume 184
(2067)
Bond Bear Maiket Soon Ending
And Interest Rate Outlook
*•' i
*
?
»
.
'
■
B.S.
,
Articles and News
;
Page
-...
Basic Trends in the Economy and Effect Upon
—Sumner H. Slichter
By MURRAY SHIELDS*
domestic threats to be inflation and/or
■
we
savings-lack; believes
safely generate enough funds for sound progress.
can
.The long bear market in bonds
v/hich
be
the
',
began
in
1946
to
appears
approaching its climax and
turning point may not be
far ahead.
It
is, of course,
possible that
ed
by
ly
dividuals
will
ket
ex-
births
the
in
:
'30's.
—Arthur
cline
such
this
from
been
or shortly will be completefilled.
In addition, our raw
point
should
be shortlived. material capacity, and manufac¬
The
end
of turing ' capabilities have already
the long bear been expanded sharply to provide
Murray Shields
market
in a
very
handsome inventory of
and
fur¬
bonds is not likely to be far away completely - equipped
nished new homes, new auto¬
because
the
forces
responsible
for it are weakening and a new mobiles and new community fa¬
of
supply-demand pressures
shortly become operative
the money markets. While the
cilities for
our
families
new
have
beginning of any pronounced bull
market in bonds may well be de¬
layed for a period and in its earl¬
ier stages the rise in bond prices
be very slow, the long-term
trend in bond prices over the next
may
toward
is probably going to be
higher levels — with, of
course,
lower bond yields and in¬
decade
rise
experienced
in
their
The
incomes.
detail
dealt with in
be
not
need
the sub¬
ject of much discussion of late.
However, it is important to recog¬
nize that they are all connected
with World War II, i.e., postwar
inflation based on the huge emis¬
sions of currency and bank de¬
posits during the war, the colossal
requirements for funds in the
postwar years to fill the backlog
of
demand
for
plant capacity,
housing and community facilities,
the postwar bulge in family for¬
mation
to
inevitable
the
and
orthodox
more
return
pol¬
monetary
after
the
artificially
easy
money and pegged interest rates
ofc the New Deal and the war
icy
years.
to
Support
Market
Bond
'
The prospect that we are nearing the end of the bear market in
"
4
-
address
♦An
the
by
Shields
Mr.
Finance Conference,
Nov. 9, 1956. V
American
York City,rl See
1946,
the
"We
author's
Are
addresses
Nearing
Bull Market in Bonds"
before
New
Feb.
the End
of
14,
the
County Bankers Association, and May 25.
"The Outlook for Interest Rates"
1948
Drucker
j.F«Reilly&Co., Inc.
Members
More Articles in Section TWO
Three Little Adages and How They Grew—Rilea W. Doe_
ing our stocks of goods of all
descriptions in the hands of the
people
of such
use
Stock Quotations _—__1
Within Limits, Yes, but
subject to control by the
monetary authorities. The only
their
increases
be
to
more,
\
As
will
the unions
on
demands
Business
!
and
•
additional
necessary
sumption
of
bank
for "the
expansion
in
re¬
pansion in
Recently the
money
page
Spencer Trask &. Co.
New York Stock
Exchange
Mutual
ex¬
25
TELETYPE N. Y. 1-5
Nashville
•
Chicago
Schenectady
•
•
Glens Fall*
HA 2-0270
Funds
Direct IFires
._
44
——
8
—
Our Reporter
22
___
Governments
on
May—
Gulf
Utility Securities-Railroad Securities
Sulphur
5
27
Pan American
43
Public
to
Philadelphia * Chicago • Los Angeles
46
Our Reporter's Report.
,
20
6
Activity
—
Wilfred
Exchange PL, N.Y.
Teletype NY 1-1825 & 1-4844
8
1____—
Notes
40
8
____________—
Observations—A.
Sulphur
24
____________—
31
;r
Securities NowJn Registration^.
Revlon*
38
Offerings
Security Salesman's Corner
The Market
and You—By Wallace Streete.
The Security I Like Best—
42
Prospective Security
.
and
16
2
Twice
m
1
and
_
HERBERT
2-9570
Thursday
issue)
15,
(general
and
every
Pri-sident
President
and
and
ritv
city
news
news,
and
Other
Offices;
3,
111.
135
Pan-American Union, $60.00
Dominion
of
Canada,
Other
Monday (comquotation
clearings,
Bank
and
,
„
etc.).
...
tfae
La
Request
per
$63.00
year;
per
in
.
.
Record
..
_
Salle
St.,
2-0613);
r&te
be
made
in
New
York
funds.
BROADWAY, NEW YORK 6
WHitehall
Teletype
—
,
Monthly.
„
exchange> remittances for foreign subscriptions and advertisements must
Qf
39
year.
year.
(Foreign postage extra )
_
INCORPORATED
of
Note—°n account of the fluctuations in
(Telephone STate
on
le V. FRANKEL & CO.
8.
Publications
Quotation
$40.00 per year.
etc
South
,.Subs';r,ptT;°n( *a,°f
,
ad-
Worcester
Chicago
.
Subscriptions in
United States, U.
Possessions,
Territories and
Members
other Countries, $67.00 per
1956
news
*Prospectus
"
.
—
statistical issue — market
corporation news, bank
records,
RtatP
state
Publishers
9576
criRFRT
SEIBERT,
niv*
DANA
Thursday, Nov.
vertising
to
Jessop Steel
Eng-
25, 1942, at the post office at New
York, N. Y., under the Act of March 8, 1879.
7, N. Y.
New York
C.
^
Company
SEIBERT, Editor & Publisher
D.
wifiTAM
WILLIAM
COMPANY,
DANA
E.
ary
.
B.
London,
.
Reentered as second-class matter Febru-
Reg. U. S. Patent Office
Park Place,
Gardens.
.
Copyright 1956 by William B. Dana
CHRONICLE
FINANCIAL
Drapers'
land, c/o Edwards & Smith.
.
■
48
...
Weekly
COMMERCIAL
United Western Minerals
4
_____
You_—
Lithium Corp.
25
.
The State of Trade and Industry
Washington
Plete
•
45
Recommendations
Investment
News About Banks and Bankers..
Every
.
—
Singer, Bean
* ilACKIE, INC.
22
—
Indications of Current Business
ST., NEW YORK 4, N. Y.
•
Cover
__
our
supply has deon
V. 7
i
.
—'
Stocks—___
Rises?"
.
supply.
money
7
.__
Bookshelf
Man's
Wage
NSTA
eco¬
authorities will find it appropriate
the
Helicopters
37
From Washington Ahead of the News—Carlisle Bargeron
t
our money
deposits, the general
provide
Ferry
21
_
Einzig: "Does Lower Profits in Britain Check Inflation
seems
nomic climate should before long
be such that the Federal Reserve
to
Doman
16
.__
(Boxed)—
.
(Editorial)
Dealer-Broker
unions than it has during the past
few years.
of bank
Trailer
14
Coming Events in the Investment Field_____
to be the
prospect — management is'- likely
to bargain much harder with the
as
It
and Insurance
Bank
for
wage
which can
amounts
—
.
Regular Features
>
See
We
pressures
nearly offset by improve¬
in productivity.
Further¬
if competition intensifies
materially
.
Banking Study Recommendations
Presents
ABA
more
ments
________
need fear to--
we
day is wage inflation and it is
probable that in the years ahead,
hold
Stanley_____
Stuart M.
of
NASD to Sponsor National List of Over-the-Counter -
not
public and private
be brought to bear
Pacific Uranium
TMT
liquid funds by their
kind of inflation
Lanolin Plus
Geiger__ 13
14
Death
could produce an inflation
owners
to
Troester__
15
r
Boston
HE 4-3634
•
9
Outlook for TV Receiver Industry—W. R. G. Baker.
REctor
•
Jersey City
Southern Calif. Municipal Bond Outlook—James L. Beebe
understandably very
were
heavy.
25
Albany
Teletype NY 1-4643
Exchange Place
Wires to Salt Lake City & Denver
Glassmeyer____ 12
New Horizons in Chemical Industry—Marlin G.
^
PREFERRED STOCKS
24300
1
11
_
HAnover
Broadway, New York 4
Dlgby 4-4970
8
Pacific Northwest Power Prospects—Clarence D. Phillips
WILLIAM
TELEPHONE
42
Inc., at Palm Springs, Calif. The material therein includes the
following articles on the pages indicated:
Published
Members
Salt Lake City Stock Exch.
Spokane Stock Exchange
T
SECTION TWO of today's issue is devoted to the recently-con¬
cluded Convention of the National Security Traders Association,
The
25 BROAD
18
27
W. Babson
Role of the Investment Banker—Edward
Continued
specialized in
PACIFIC URANIUM
15
•
The Next Four Years—Roger
—.
have
14
The Over-the-Counter Market—Col. Oliver J.
Banks.
For many years we
STRATEGIC
MATERIALS
*
Micnalis
ly building capacity and expand¬
Before the National Association of Mutual
Savings
CATARACT MINING
11
,
10
reserves
before the Queens
G.
—Peter F.
..
supply now
fully in use, as is clear from the
sharp rise in the rate of turnover
Shift
Hoadley, Jr._
Professional Investment Management
SEC and the Securities- Industry—Earl F. Hastings
(4) With
Evidence
<
E.
of
CHEMICAL
10
___.
The Building Prospect Ahead
New Importance of Management to Our Nation and Economy
which reduces the threat that the
here for they have been
Value
—Clarence
de¬
responsible
factors1
basic
The
Smith__
mands for capital during the pe¬
riod when we were simultaneous¬
fdr the long bear market in bonds
(
MONTROSE
10
:
Purchasing Power of the Dollar—C. Canby Balderston____
(3) We have finally grown-upto or inflated-up-to the wartime
expansion in our money supply
terest rates.
STANCAN URANIUM
9
13
spectacular
a
\
12
for the millions of families which
in
WHitehall 4-6551
V
■'
>.
Assuring Savings Bank Liquidity—August Ihlefeld__
and
should
Securities Dept.-
STREET, NEW YORK
Telephone:
7 —John P. Sullivan*
ly
set
'
Providing Thrift Service with Better Savings Banks
decline
but
Cline
—Walter
The
time restrictions and controls have
-
d e
:
;
6
Upgren
Fresh Look at Construction:
;
any
further
R.
—George
-
The
(2)
99 .WALL
Continued Business Rise Forecast for Coming Year
~
a
'■ k
cash!
What's Ahead for Business in the Next Ten Years?
backlogs of demands
accumulated during the long de¬
pression and in the period of war¬
perience
Obsolete
5
Many Fronts
Providing Necessary Funds for State-Loc&l Projects
—Walter W. Craigie
late
of
us
wild
a
*•
V.
vv
_
on
reap
windfall
you
See
",
5
___
Dividend—A. Wilfred May
and
„
K,;
Financing the Acquisition—James B. Walker
reaching the marriage¬
brackets must reflect the
of
to Higher Business
SilycFman__^_i_____>„__
Savings Banks Aire Assailed
—George M. Penney
*r
able age
low levels
Contribution
Mutual
rise materially for several
because the number of in- >
to
years
recorded,
•
-
tion has receded and it is not like-
solute
the bond mar¬
;"
The rate of family forma¬
(1)
Finance's
Level—Herbert R.
left
obsoletes?
•
;4
Ciitirent Popular- Delusions About the Stock Split and Stock
yields—is supportfundamental con¬
several
before the ab¬
are
Growth
'
3
'
siderations:
,.
lows
Commercial
..Someone
"
Discount Rail Bonds for Plump Income—Ira U. Gobleigh
bonds—and of the rise in interest
rates and bond
[INHERIT THE WIND?
'
-
—Murray Shields
%
*
;
,
____Cover
Bond Bear Market Soort Ending and Interest Rate Outlook
long bear market in bonds
v
to end shortly; provides evidence to support view that long'
rise in interest rate and bond yields will reach its crest in **■■..
next few months; and assumes pattern will be far above; !
easy-money days' level but moderately below current position
—affected by gently downward broad trend and future marked
by wide short range fluctuations. In contemplating an era of
'new
economic growth~records, Mr. Shields pictures two -
;
„
V —George
Noted economic consultant expects
-
___Cover
Savings Banking No^v at a Crucial Crossroads J
A.-Mooney____
v
AKD COMPANY
>
Securities
'
Senior Partner, Mackay-Shields Associates, New York City
3
3-3960
NY 1-4040 & 4041
Direct
PHILADELPHIA
Wires to
DENVER
SALT LAKE CITY
*
4
The Commercial and Financial Chronicle
(2068)
the
road,
have
Discount Rail Bonds
beset
Plump Income
for
tough
luck
dents
Author of
Jotting down
liens and
ket
due
souls among us
whose
first
experience
in
the
selection and purchase of general
market securities dates from the
durable
ibzu's
occurred
of
ly in the
heirs
ear¬
ade
cf
that decade)
i
bom's.
quite
Ira
U.
Cobleigh
that
is
ago.
under¬
market
out
18
finance
to
cause,
about
War
million Americans
Liberty
those
Bonds;
pretty
coupons came
choice
very
and
as
—the
eral,
were
a
investments
and
sue.
profit (1) from lowered gen¬
rates, (2) treasury
interest
ble consolidation.
1st 4s
West Shore
But let's get back to our theme
by
After patriotism, that's
attracted people to bonds.
lien
early 1920's were an
field day for the income-
investors.
This decade
6s
at
there
96;
per¬
Pure
Bolivia
96;
Company
Oil
were
and
6*4%
bonds
real
Came
1932
the
and
Great
railway
more
bond
of
issues
"uncH«or
due
come
by
defaults,
and
lunging
helplessly into bankruptcy courts.
task to pick
through
like
New
unscathed
York,
now
yet
Chicago
In
annual
near
to
in
were
currently
sn
the tr?c1rs)
ne^r
4*/>s
On
charges
Central
(as
72*4 to
basis,
this issue are
on
twice
as
overall
an
If
over.
belief
some
which
hear
you
21st
common
is
worth
point
a
major railroad
is
a
low
for many
as
or
really the top grade
Bonds, you would look
Income
into
Denver
4*4's
of
due
1984;
Rock
yield currently 7%.
A lien on
Grande's
Island
4*4's
Western. Pacific
Wabash
.
Rio
and
2018;
1995:
4's
of
4's
1981,
yield
between
4.50%
and
5.25%;
low
for
incomes.
with
bonds
high
Texas
HOUSTON
CApitol
Direct
8-2401
wire
to
Company
National
2,
Bank
Bldg.
TEXAS
Teletype—HO
Cruttenderu,
stantial
was
a
increases
year-to-year
steel, electric
in
occurred
the
reported
were
food products, and
power,
unemployment insurance
food
6%
rose
coal.
this week,
processing,
in
the
Initial
output of
claims for
scattered layoffs
as
apparel,
leather, and textile
by 4%.
Although awards for heavy civil engineering construction
contracts fell 20%, a year-to-year gain of 5% was maintained.
industries.
Claims exceeded those of
a
year ago
While contracts for commercial building expanded
substantially, "
contracts for industrial and public construction declined notice¬
ably.
45
cumulative total
The
weeks of 1953
of
construction
awards
for
the
first
17% higher than the comparable level last
was
according to the "Engineering News Record."
year,
mills scheduled
Steel
operations at 100.6% of capacity, re¬
slight decrease from the level of the preceding week.
Output continued 3% above that of a year ago. Builders of oil
tankers, freight cars, and pipelines noticeably expanded their
orders for steel plates and piping; bookings in cold-rolled steel
sheets from automobile producers rose appreciably.
The com¬
posite price on steel scrap climbed 3%. /■
There was a 10% rise in automotive output this week, but
production was 29% below that of last year.
Truck output de¬
flecting
a
clined
fractionally,
level.
The
Nov. 3
and was 18% below the corresponding
production of cars and trucks from Jan.
was 27% below the similar 1955 level.
total
this year
of
Meat output rose
a
2%
over
1955
1
.
both that of the previous week and
A year-to-year decrease of 4% was reported Tri the '
year ago.
output of butter,: while cheese production exceeded that of
9%.
year by
to,
.
last
/-.'v
'V ~ "'iv'/
•/."
'v--;
New orders for paperboard" mounted 55% this week,
but
were 15% less than those of last year.
Although lumber produc-.
tion
7%,
advanced
it
4%;
below the
5%
was
comparable 1955 level.
:
are
full year's interest due and pay¬
able April 1, 1957.-This security,
;
•
Business
Sales Dipped
in September/While
Inventories Advanced
m
/
a
issued
Jan.
1, 1955 under the
re¬
organization
It
reported last week by the United Stafes^Department of
was
Commerce
business
that
inventories,
sales
during
dipped while
into higher ground.
September
the other hand, advanced
on
plan, is now cover¬
ing its interest requirement" 1.70
times.
With
about
$69 million
outstanding, the issue enjoys an
$54,000,000,000
active market
year-earlier level.
"NYSE.
on
erage, strength and
rank
among
the
Income Bonds.
We
also
For
cov¬
best
values
in
perceive
under¬
some
5's of 2054 which at 66
due
semi-annual
May 1, 1957)
return
so
(flat, with
interest
bit
generous on
out
of
line.
75 earlier
A"othpr
is
A
bonds
issue
look
to
CMM'lwaukep.
and
Pacific
sell,
now
Here's
with
a
4*4's due
at
61
St.
2044
on
7.3%.
twice) interest
39 point discount and
privilege, albeit
18 shares
the
of
pear Boston and Maine
list
ap¬
4*4's of '70
selling (flat) at 54*4 to yield
8*/2%.
This road
is
no
Union
cific, but it does look able
Pa¬
to pay
interest, and might be strength¬
by merger someday.
Seasonally-adjusted
end
of
call
them
prime
are
vestment quality.
They
purview partly
as
—
second
On
the
000
a
seasonally-adjusted
scale,
£86,400,OGO.OOO at the end of September from $36,100,000,-
to
earlier.
month
Department economists were inclined not to attach too much *
immediate importance to the September sales decline, noting that
September had fewer working days than most months and felt
their seasonal adjustments did not fully take this into account. <
Because of this factor, officials expected October sales to bounce
up
again significantly.
•
According to "The Iron Age," national
steel
market
even
further.
less of whether peace
As
weeks
sheets.
war
in
Edgy
is restored or
result, storm
a
were
ago
attracted
are taking no ;
the bank regard¬
fighting spreads.
bonds
far
signals are going up on products that a
in relatively easy supply like cold-rolled
bond
is
roll.
:'v
The shooting over Suez has injected a
ing for
any
consumers are
feeling of urgency into
Continued
on page
a
ESTABLISHED 1894 g
STATE AND MUNICIPAL BONDS
CORPORATE BONDS
LOCAL STOCKS
The
The
are
the
excellent
ftcibiiison^uhiphretj Company0Inc,
hunting
ground they afford for those will¬
.
RHODES-HAVERTY BLDG.
ATLANTA
1, GEORGIA
*
ing to accept the calculated
risks
that
high
customarily
-
accompany
,
hoping for
fhg best; their principal
107
im-■
the_ best but prepar¬
eventuality. The proposal to build 50 large oil-tankSteel
inves¬
market...
steel
impact
or
Podesta & Co.
yields;:.',
Detroit
will be felt by steel companies in De¬
cember, but whether he will get the extra steel is a question.
The
mediately.
into
ticked, off here, today
from
virtue
the
buyers
purchasing agents are reversing their casual attitude toward
stocks.
One major car producer has upped his production
result of
individual
metalworking weekly,
tightening up the
Egypt is
steel
automotive juggernaut is beginning to
The
high interest rates which,
for the first time in about 20
years,
into
.
They figure inventories are money in
chances.
few
hot
on-again-off-again
the
current
tors
■«
Last year at the
to $79,700,000,000.
;
inventory increase.
the climb in stocks on hand -
of in¬
come
a
sales
inventories amounted
September
t
would
of ;
September
.
from;
Seasonal factors accounted for part of the
we've touched upon today are not
you
drop
to
the market.
Bear in mind most of the bonds
what
the
account,
September from $85,500,000,000 a month earlier.
re¬
common.
neglected
less.
much
was
into
taken
.
wbi^h
yield
to
(about
mote, into
its
at.
factors,
»
Paul
major northwestern road
fine
coverage, a
a
conversion
now
sold
:
,,
seasonal
$54,000,000,000 compared with $54,500,000,000 in the
previous month.
;1
/ "
;
Business
inventories rose to $86,300,000,000 at the end
of
cov¬
year.
bnnd
August
was
bond
a
The
this
With
next
to yield 8%.
ering its interest about 1.60 times,
where the earnings
outlook, man¬
agement, and condition of proper¬
ty are all satisfactory, appears a
at
by
amounted
of value in the present
price of Chicago & Eastern Illinois
2*/2%
manufacturers, wholesalers and retailers totaled
in - September, - the department said.
This was
$1,300,000,000 below August volume and $200,000,000 under the
Sales
;
yield it should
statement
have
541
Failures
J
and
a
value,
afforded in
Missouri Pacific Income 4%'s due
2020.
They sell at 69, flat, with
our
Crerie and
Business
An;, interesting
yield above
third grade by any criteria
Stanrock Uranium Mines, Ltd.
Industry
Index
slight rise in total industrial production in the
week ended Nov. 9, and output remained well above that of a
year ago, according to a nationwide survey of the business pic¬
ture by Dun & Bradstreet, Inc., the national credit
agency.
Sub¬
and-
quest today was, you will
our
i number
Stancan Uranium
of
Nickel Plate 4^4's of 1989; but we
shall not dwell on these since they
of 57
major sections of the property of
is
your .guess
ours.
If you want
ened
years
bandied; about
conjecture,
good
as
Also
of price, the cheapest
opinion,
or
century.
As to whether or
such earlier redemption is a
not
New
probably the issue of New Haven
interest)
and
65,
Refunding 4s of 2007 selling at
$1,000 (exactly the
their
garage.)
Involvement
major lien of
one
defaulted
are
the board rooms, that these bonds
will be redeemed well before the
attractive.
issues
bonds which sold at
a
50, then either of the above bonds
at present discounts might appear
St.
of
never
—
at
TV) today
earned
York
easy
&
time at $60 per
amount
no
6.2%.
the issues that would
ride
Louis 6%
in truth
your
economically priced
say on
interest
Lien 4s and Wisconsin Central 1st
was
2013
they
—between Northern Pacific Prior
it
and
yield
Bondholders,
bitter
and
burnt,
learned the hard way the differ¬
ence between good
bonds and bad
and
in
'
is found in New York Central Re-
bit the dust—rubbing out their in¬
4s;
(Suggest
a whisper above 6%.
A
comprehensive mort«aee
fhut not, ouite
hundreds of
fre¬
d
coupon
under
value
yielding
without
Depression
A.D.!
2361
the ,last
time capsule
loss to any investor."
v
a r o u n
Posterity aside, this is pretty fair
mortgage
years
until
bury
vou
selling 6%
estate
boasting "40
investments
vOar
6V2S at
Italy 7s; French
7V2S, all offered at a discount; and
was
Cen¬
quently, this issue is built to or¬
der, as it carries couoons for each
8s;
S. W. Straus & Co.
attractive
don't like to change your
you
bond
Anaconda Copper 1st Consol. 6s at
961/2;
are
underlying 1st
440 miles of the West
the
on
their
of
re¬
the
group
flects
tral, from Weehawken to Buffalo.
Tf
mitted you to buy Ohio Edison 1st
mortgage
virtue
^hore division of New York
the
eager
retirement and
debt
of
(3) in event of redemption, or by
exchange, of securities in a possi¬
•—income.
absolute
&
Delaware
might strengthen this is¬
discount
purchase
promptly.
what
and
The current 40 point
eral
erroneous,
And
in
property
pier
Erie
with
mate
quite
(by -ignorant,
inference) merely
because government bonds always
paid their interest and principal
|
its
and
W.
suggests some possibility for ulti¬
in gen¬
as
and
&
the anvil of
higher priced in
the Baltimore &
Ohio V/i's of 2010 which sell at
83
to
yield around 5.4%.
The
price of these bonds definitely re¬
Among
this
recall,
Hudson
government bonds
to be regarded
came
safe
'
and
line
Further,
safest kind—bonds,
on
organization.
the discussed consolidation of that
because the first bonds most peo¬
ple owned
L.
grouped under
Income Bonds,
are
the generic name,
price. The road is solvent, well
managed, and a good earner; and
with
to be regarded
now
D.
They
hammered out
Hoboken, at a whacking discount
semi-annual
possession.
in
Essex
the
of
terminal
I,
bought
bond
a
little
We
merit
much
can
you
miles
them, be¬
World
on
3^s due 2000
buy at 60
yielding, currently, 5.83%. Here
you have a divisional lien on 129
buyer then had
no
background whatever in equity
investments—but he knew about
knew
and
which
average
He
interest.
their
there's
Morris
muster.
logical
notes
some
digress to sketchier is¬
now
depending entirely on earn¬
ing power rather than on any
sturdiness of lien, for whatever
investment merit they appear to
sues,
passed the 1930's with¬
passing
think
dependability of today's market;
bonds.
■
We'll start with
day lacked the breadth,
quality and
dividend
the
the purchase of
-
issues that
diversity,
and
of debt re¬
industry,
railroad
the
rail¬
way bonds in general, a far safer
proposition than it was 30 years
standable. The
stnck
of
such
solvency
power,
of
program
a
in
to make
as
tially, he was
a buyer of in¬
This
such
duction
Essen¬
come.
have witnessed such a re¬
we
and
n
and legal
of the
And in the past dec¬
surgence in earning
solid
establishment
primarily
interested
today
bankruptcies
rail
of
dismal 30's.
lier year s
was
it not for the fact
were
the adopted children
are
that
(especial¬
era
par
number of the reorganiza¬
a
tion bonds we shall mention
in¬
individual
vestor
that
the
that
cab
We
at
But enough of this tear jerking
reminiscence—it would never had
fore), will re-
and
Production
ment.
($1,000).
be-
(or
Index
Price
Auto
yield,
generous
a
Commodity Price
Food
There
off
paid
course
and
Trade
assuming continuous coupon pay¬
not
especially for their appeal to income-minded buyers.
Those
allure,
Output
Retail
is
the broad lien and 43
discount bring some mar¬
point
shopping list of secondary rails, some with
so lean as a few years ago; and all selected
a
some
risk
of
Production
Electric
State of Trade
earnings
bit better now,
a
measure
a
Steel
W;..
Carloadings
evident,
Security and Financial Independence"
Gain
The
floods.
appears
while
and
"How to
in
;
The
time,
a
and
picture
COBLEIGII
By IRA U.
management
under-mainteand a lot of
the form of acci¬
by
probable
nance
For
recall it, these bonds
as I
been
changes,
Thursday, November 15, 1956
...
WALNUT 0316
LONG DISTANCE 421
34
.■
Volume 184
Number 5586
the total volume of
count for half
Commercial Finance
s
sales
Contribution
overall,
centage, in
rt
the
Higher Business Growth Level
for
V from
National Commercial Finance Conference, Inc.
consumer
situations
to
any
In
credit and capital
special small business
important contribution to balanced
American
ni fimn f
nificant
business
thic
this
milestone
pushed
output
up
of
,mnr
year.
to
of
of
order
billion
level,
And
it
i
a
Even
n
g
momentum,
losing
On
the
it.
hori-
is the next
milestone
a
billion
$500
We
economy.
R. Silverman
Herbert
are
We have
way.
level
cial
new
a
business growth.
of
Our
the
on
the achievement of
begun
own
of
section
finan-
the
industry, commercial finanea role in that big push.
the funds made availto business by the commerfinance industry made posa
volume of production and
ing, played
This
able
cial
year
—1
_
sible
to
that
if
case
T
I
that
had
ihni
think
,
.
it
whole story
mercial
when is
was
Here
is
swer
re¬
simple
mula
a
nnm-'
com¬
none
New
:
'.'SKl'W
parts.
—
our
industry's contribution. For
that
The other
uJ}d-^"
importance of the
services of the commercial finance
industry to American busine.s a.id
the American people.
Our funds aided in the production and sales of more than $5
source'of
j
ag
we
gifted
dominantlv
"
over
military
growth
our
Increasing-
js the initiating factor
more
we,
lend to
those
United States families had incomes
from
to
a
a
pre-
civilian
l.
thp
Market
Bear
of
'
the
Swing
Pendulum
/
,
the
laid
by the
York
Ex-,
?
bear, or just quiet,
the 1940's the inves¬
of
markets
in the
depressed stage of
manic-depressive proclivities,
tor,
his
went
opoosite extreme—in
the
to
valuing the whole at less than the
parts. For years right up to their
final dissolution the p"blic utility
holding companies which were in
the process of liquidation, subject
to constant "fish-bowl" scrutiny
,
under the official aegis of the SEC,
were quoted at considerable discounts (in lieu of the former premiums) below the value of the
constituent units,
Again, now in the present bull
market the public is indulging it-
self in the illusion that the sum of
the fractional pieces of paoer are
worth more than the whole; with
the market's unwillingness to face
the realistic, if dull, fact that an
increase in the number of shares
by itself, of course, gives nothing
whom we are recurrent psychological aberra- that you did not own before. Comfions
The growth record of that truck
trailer company is the achievement of its management and there
is where the creait should go. But
1 ask> who translated the invtstment funds into investment capital at work, reopening the factory,
the aged who were around during
the market frenzy of the 1920's,
marking the wildest boom-andcrash in history, will remember
that one of the major fictions contributing to that New Era's excesses was the illusion via the "in-
proviaing stable employment and
vestment trust" and holding com-
along,
its
a
the later
In
an¬
privileged to help make tne most
of their opportunities.
volume of business investment,
New industries have come
businesses
of
sum
' '
-
The
01
.
■
deemed to be
the
split
for¬
Stock
was
than
more
con¬
a
venient
down
company;
a
worth
dividend?
a
not
a
a
tied to
definition
...
finance
-
then the whole
differen-
tiation
0Ur
been
nut
the
estimate
cal"
a
a
But that is so often the
than everyone else,
to provide
largLe"n!S/nnUt,,rn»d &
The company turned to
a
funds
our
was
i.aa
by
glamorously
exploiting the
public's remarkable unawareness
of the multiplication table. Thus,
split
and the stock dividend. First there
to
conversion^ loan-but
we;.
umu
available.
is the "techni-
stock
more
goods would not have
been produced or the services rendered
was
and
ent parts—with second, third
discussion
this
the
change, nameot..er lihanrial-ii«t.tutions
ly a dividend
the current boom in the American cou ,c
hanale a pioblen of to s
A. Wilfred May
of
than
economy is based,
primarily, on kind. A
24% is
split,
two sources of growth
" investigated and
worked out a
One is
supporting factor the suitable financial plan that pro- The second, and far more imporstructure of personaMncome' and vided the manufacturer with an tant, point of difference is conwealth
The great gains in tech-' at:Iecluate line of credit and acco.n- stituted by the split's vital potential
noloW that have been made in panying services. Today jthat man- impact on both the market and
this country since the late Thirties ufacturer is the third largest the investor.
have been distributed among all naakfr
of tiuck tiai eis in
e
You should realize that the curpeople in the form of higher country.
.
rent stock split craze, manifested
reai incomes and higher real ininis is not an
a d case* in
year's record number of
creases in family asset holdings.
There are many such m that coin-' 88 NYSE-listed splits of 4-for-l or
The total of these family assets mercial finance
company s tiles, less (a 10% increase over last
js several times the total of per- and each of you could match it year,
which had registered the
SOnal comorate and governmental with similar accounts. Our nidus- previous high record), constitutes
debt
including the large but now try is Pr0.ud of t!le gr°wth records a
major bull market foible,
aeclining national debt.
59% of of our clients and of tne men in This is in line with Wall Street's
of
fhe
case
ic
an
ready
~
equal
ended,
decided
cf $4>000 and 0ver in 1955.
45%
third of the dad $5000 and over.
32% — a
growth m our country s outpui.
third, mind you, UJL aJLJL iaillulC3
of all families
I hesitate to say that in every
had incomes 0f $6 000 and over,
sales
of
a
not
zon
grant
we
have not told the
we
is
i
n
when
helped to achieve perhaps a third
of this year s pheno nenal growth,
$400
billion
g
outset
between
outstanding job. But when
war
RFC
Sources of Growth
well
the
past
an
^
ferences
go into the
manufacture of truck trailers. The
.
The Boom Is Based on Two
the
$407
income tax saving. Explains
rights offerings.
no
the nature and results of
11 Wdd t.-e only in- j ward to point out the basic dif- fourth degree pyramiding—there-
company
^
some-
thing
interest, and that it affords
is"^prewar bSness^^
of
ments
from
services
printed form of ownership, does not constitute income,
its cashing-in entails dilution of his remaining share
desperately'
a
goods
391
the
that
there
The government airected
it to turn out tanks. It threw all
it had into tank production and
dustry.
did
a
price level
unmistakably clear to the shareholder that it merely changes
the
states,
along,
came
Cites
deflation.
market
and ultimate
unfounded the current popular assumptions that
the present year, it
sig- only to emphasize our responsi-'p Th
town'
needed
t+
+hPine l0wn ciespeiaceiy necueu
It bilities in the present and
the
factory's
employment.
Tne
and future.
pressures,
passed
it
It operated in a small
town Wl^e
taxable interest income from income tax.
Fighting inflationary
war
speculative Frankenstein ending in stock¬
a
small manufacturer of farm
a
machinery.
^
by exempting first $100 to $200
saver
the
southern
the
of
one
when
development; and plan savings and investment on a
long-term basis. Proposes we aid small and medium firms
by selective credit controls, and by adjusting the tax laws,
'
'
Let me illustrate:
as
the stock split "craze," with its self-propelled
broadens the ownership and results in
raising the equivalent market value. Regarding tie stock divi¬
dend, he maintains it behooves the paying company to make
aspect, of its cur-
operations.
rent
economic
and aid small individual
reduced
intimately related
individual enterprise
development are as much our
concern
as
data proving
chinery and in product and mar¬
ket
sees
holder disillusionment
so
are
May
pyramiding,
within/the
that.investments in plant and ma¬
*
was
this
assure
Mr.
Working capital and investment
capital
'
money,
to
supplies
4,000 small pro¬
large manufac¬
than
Another
"'
we solve the timing of
fluctuations; adapt credit control
By A. WILFRED MAY*
largest manu¬
*
,
providing
Current Popular Delusions About
The Stock Split and Stock Dividend
turing corporation has 10,000 small
manufacturers as suppliers.
finance industry help '
increased more than $5 billion of this year's output and in
past year borrowed 15-20% more long-term obligations from
the capital market, according to Mr. Silverman. Explains the
industry's role in economic growth, and points out the need '
for savings incentives and small business tax discrimination.
Depicts real $509 billion economy by 1960, or even 1959,
market,
money
are
more
ducers.
Vice-President, James Talcott, Inc.
per¬
These small
facturing corporation buys
Chairman of the Board,
Despite the
larger
a
gle division of tne
By HERBERT R. SILVERMAN *
Executive
and
tailing.
vital to many of
larger companies that account
the other half of sales. A sin¬
enterprises
*
To
5
(2C69)
and Financial Chronicle
;The Commercial
..
addil?g a stron!..c.?mpany to
country's economy?
the
elementary
in
Those
of
arithmetic,
in my
category of
you
prehension of the Einstein theory
is not required for you to under-
stand that your two pieces of paper now represent exactly the
same proportion of the ownership
formerly expressed by your one
piece of paoer. A pie does not
grow through its slicing! /.
>
Inflationary Bull Market Gadget
}]\eLe^r0^t
pany
of
putting together pieces of
Unfortunately the results of the
paper current split
far tran-
nonsense
?"<*
rtant'onls ' Like gcolOT Tne financial institution that mode the resulting 'whole worth a gcend the imn!,et on the split-in'television, air conditioning, power wasmeady to supply 1t-e invest- substantial premium. At that time vo!ved shareholder. It has come
the speculative technique was oc- ,0 be used more and more as a
beating and all the ot .er ^
bmionnof thi^year's cuLput^Trat that cater to recreation, the new ^cU\%n/nCe company^ whose copied with assembling a group of bull .m«rketjadget. A ^fkb^e
$5 billion was an important part
/|ta
® jet'aktraL/o/taTo/ participation was decisive whose individual stocks into one unit,
mor ofits slicing. with publica.
ot the economy's growtn; as I said,
"ost of the investment has working capital put both invest- and then selling to an eager public (jon o( u,,s o£ s0.called ..spUt
demand for ciedil and capital naa gone toto paction ^111^ that^
edl/andipulfhad
°Perating funds this whole unit at of the constitu- candidates." sol it has developed
a price far in
demctncl ioi
to work.'
Thus
the
of the total
to™
c
to
market, that record
money
that in
been
excess
increase tne output from given
shows inputs of labor 'and other re-
adjusted to the slate of tne
be
a
time of test we ha^e not
found
sources.
.
*
In
ties
prospect
bring
responsibilities.'"That
story of the'
commercial finance executive who
reminds/me
in on
dropped
(
and
former
the
of
night club per-
a
found
him
poker with his dog.
"What
a
clever
dog
playing
make it possible for our very productive economy—the envy of the
peoples of. tne worl:^—to reach a
new higher level of productiveness
Investment
into
Are Lagging
*A
talk
by Mr.
frr
Foundation
Boom
May before the Public
Economic Education
the
j
t—.
v
these past few years
companies have adopted ex-
During
m
sion
grams
,
and
modernization
of
Inc.,
Women,
York
City>
Nov
Hotel
5>
movement is general among
wags
\
<
!
-
fool
gets
a
good
his tail."
large
they are needed. But it is often
overlooked that an indirect result
fact, all industry— has a gooi ^ our activities is an increase in,
hand.
But the game never ends investment capital that otherwise
and the stakes are high.
If we would not be put to workrecognize that we played a not
We serve businesses of all sizes,
unimportant role in the achieve- W1\k special emphasis on small
\
'
a"d medium-sized business milof
An
address by Mr. Silverman before
which there are nearly four
„
12th
Annual
Ci^'oc.
Convention
zs/ms
"
,
t
cf
the
,
Ccn-'
,jon
jn
thjs
country.
Such Small
"' New York and medium-sized businesses :ac-
Continued
We have
jjow can small and
problem of
in
serves
effect
on
page
33
on
a
LINE
COMPANY
which reviews the
surplus crude oil re¬
report
Canada and its possible
the future of this Comnnny. The
Western
increasing domestic produc¬
reducing adverse fade b>lano"s
aiding capital formation within Canada,
discussed. A copy of this report is avail¬
desirability
of
tion, thereby
and
are
able
medium-sized
companies claim their proper share
the opportunities to develop
and grow that arise from our high
level of prosperity?
We can have without price inf|auon a $500 billion economy by
ig6Q In £acthv we mig t be able
incq
R..+ WG will
prepared
growing
important prob-
have
,Tail-wagging is not an exercise
indulge in.
Our industry—in
New
INTERPROVINCIAL PIPE
sj.zecl companies,
That is the most
we
_
stimulant of
you stop
When
pro-
companies< gut it is far from being,
general among small and mediurn-
.
Roosevelt,
The result is the very high
, hn„:npSc investment. This
there," the finance man remarked.
"Clever" the performer retorted,
"This is the stupidest poker partner I've ever had.
Every time the
dumb
important
1956
J?OW Busm®ssesi Prepare
lem that the American people face
Themselves lor Expansion
today. How can American busiOur industry is mainly a sup- ness> wdd t'ee cooperation of govplier
of
working
capital and ernment, create the conditions
equipment capital. We are widely under which small and mec'iumknown as a ready source of funds sjzed enterprises can take an achand he for current operations, funds when tive part jn sustaining a new
they are needed, in the amounts peri0d of sound economic growth?
you
an
market inflation.
.
One year's gain in output, by
wanting.
of challenge in itself,
means very little.^ The
our opportunities is a happy one.
gains that are only beginning to
But let the glow of it be tempered come along from this special type
by the realization that opportuni- of investment mean much.
They
The
Smaller Companies
on
•
request.
WISENER
73
COMPANY
and
Kin?
Street West
TORONTO
•
limited
1
Affiliate:
MacKELLAR, WISENER
LIMITED
,
t0 achieve it by 1-959. But WO Will
*
Continued on page 24
a
Members The Toronto
Stock, Exchange
»
£
The Commercial and Financial Chronicle
(2070)
curity
Mutual
Savings Banks Are
Assailed on Many Fronts
r!
HON. GEORGE
By
M.
i
a
of
few owners, and that thrift principles have
made
These
never
On
this occasion my thoughts
naturally turn to the role of this
solely for
Association
itors
benefit
in
working out the
problems facing mutual savings
banking ' to<
i
t
day. They are
many and va¬
ried
tions
others
A
the
institu¬
Geo
of
Penney
have
and
the
vigorously,
if
I
did
t reat
tive
not
think
contribution
to
solve
to
that
will
and
can
effort
maintain
I
fully
for
be
beset
the
collec¬
f
,as
Gever
lose
we
under
the
Never
need
to
(rust
the
and
terest.
vate
be
never
solely by their
We
own
not
are
of
we
address
by
n""bs
V.uite
of
is
We
hear
of
in¬
history of this
there any greater
action
and
mission
and
are
our
today assailed
I
never
con¬
banker
any
individuals
assail
to
pool
in furtherance
on
many
the
rizht
their
of
sav¬
their
own
Yet, in face*
to
savings acknowledged
by all competent
increase
and
urged
authorities,
have
we
a
banker whose
county has
been largely
developed by invest-
.ments
of
mutual
savings banks,
travelling up and down the land,
advocating the abolition by stat¬
ute
Union Dime
.v
of mutual
Your
gradual
Late
MAIN
program,
Avenue
the
at
them
sit
on
up
the innovations and then try to sit on them. ■*
of
rights.
The
only vested right we have is the
right of individuals to act collec¬
duty to zeal-
have.
ously guard and protect that right.
we will do.
We will vigor¬
ously oppose all efforts to denrive
of
of
a
experience
teaches
conservative Administration
Carlisle
road
calls itself conservative
something of the sort.
or
i
progressive
—
.
of
41st Street
,
temporarily at
a
proposed raise from 75 cents to 90
THURSDAYS
TO
6:30
P.M.
at
HILL
Madison
39th Street
OFFICE
Avenue
istration had been and if it hadn't been for the Democrats the poor
us
any¬
to 90 cents an hour there would have been
crease
and
*
are
erosion
those
should
I
work.
as
must
solicit
services
made
the
no
lican party over
in
in
part
this
/
He
suggestions
your
to how the Association
can
barely succeeded in doing it with his landslide victory in 1952; his
appeal for a Republican Congress failed in 1954, and this time
with an increasing landslide he lost the Congress.
serve you and with
you, look
forward to satisfying accomplish¬
ment in the days ahead.
What I think is
Changes have been made in the
Association setup to meet present-
It will always be our
the member banks,
On the other
*
lost
"
we
constitute
and
smallest
same
the
bank
service
largest
course,
v
depositor
is
as
bank
the
,
faced
of
entitled
in
to
the
he',: will,
staff, will
devote
our
every
He
of
w
of
who
first
conceived/ and
seriously that beyond the fact that we are at peace
enjoying a great prosperity, that the rank and file of
attention to Eisenhower's policies, whether he is a
conservative, a progressive or a middle-of-the-roader.
simply enjoys a tremendous personal popularity which means,
he has the confidence of the people.
course,
/Secretary of Agriculture Benson will continue to be the whip¬
'■=-
.
ping boy.
But I fail to see any loss the Republicans will be able:
to attribute to him..
■
the
en¬
•
guided those.
to
are
moderate
receive it.
We do not have all the
answers,
but I assure you. that we' of -the
Wiley of- Wisconsin, who never had any White
don't understand why, won handily,
doubt
voters paid any
the
his brother in the
and
and
those
thrift ergy to carrying on the traditions
with < a and
principles which
incentives
President.
I
banks,
the de¬
serving
who
hand, the only anti-Eisenhower Republican who
Welker, of Idaho, and my information is that he threw
and even he had a letter of endorsement from
House encouragement, apd I
*
ren-
member
actually
are
positors
banks
to
was
se¬ wdng
human
in
estab¬
dignity and. freedom.
Kings Highway Savings Bank
*
.
.
-
BROOKLYN, NEW YORK
\
next
v And
session.
into
any
However, his farm policies will be
You
may
rest
consideration
assured
of how the
his efforts to make his party over into
remembered that/he can't
run
.
Federal
Deposit
Insurance
President
again.
,
v
.
William K. Cairns, Jr., Vice President
60 SPRING STRUT
Edmund G. Flowers,
Secretary
'55 John
-Frank Tonjes, Comptroller
street
Corporation
-Vr, "
26
issue at
(orftandt'street
will fare
his image, it must be
"
J. Arthur Seidman, Vice President
an
of that.
•
'
.
the election away,
welcome your - suggestions as to
the services which should be ren¬
dering service
Eisenhower
Sherman Cooper and Thruston Morton,favorites, his particular pets in every, instance,
lost. There was Duff of Pennsylvania, for whom the President did
everything but ring doorbells; there were McKay in Oregon,
Langlie in Washington and Dan Thornton in Colorado. All had
the President's full blessings without avail.
-
large and small, as efficiently .as
possible. As 1 said before, we will
Kentuckians, John
two
serve
dered by the Association. In
significant is that with the exception of the
two
day needs and. undoubtediv, fur¬
ther.changes
be required with
changing conditions under which
to
unquestionably swept the country in his own right but
again he failed,to pull the Republican party in with him. He
once
bet¬
ter
operate.
into his image remains to be seen. Most observers
Washington think he will have very little trouble.
New York 16
OPEN MONDAYS TO 6:00 P.M.
increase.
As to how much Eisenhower will be able to make the Repub¬
avail¬
opportunity
small
some
I
such
be
welcome
have
to
whom
to
and
Howard R. Wright, Vice President
Member
•
minimum wage earner would still be working for 90 cents an hour.
The facts are that had the Administration not submitted the in¬
Daniel T. Rowe, President
MURRAY
The.
;
thing, it is that success is attained
...This is the way it will be in the future. The Administration
through united and collective ef¬
fort.
This Association is the in-'-" will keep proposing what! it describes as moderate social advances
and the Democratic Congress will keep upping it.
This will cost
strument created by you through
the taxpayers money. Watch out for the Federal aid to schools.
which the united efforts of all of
The Eisenhower Administration, already broken from the tradi¬
the member banks can be chan- *
tional Republican moorings, has moved cautiously in on Federal
neled
for
the
greater
good of
aid. The Democrats want to go whole hog. Watch and see if the
those who are served by the mu¬
Democrats do not now prevail.
tual savings banks of this State
OFFICERS
261
hour.
cenis an
contractual and forced
sayings of / that we. may ,all. be proi^d- of the*
which life
insurance, deductions /part we, have played inmaintairi-r*5
for retirement
-
•*'<
middle
boosted it to $1 an hour and prevailed, and
throughout the campaign we heard about how stingy the Admin-,
Americas
New York 18
or
;
/
example of how things will work out is the minimum at the last session of Congress. The Administration
submitted
all other
as
benefits; social
'
-
Bargeron
we
Democratic Congress
Needed: United Effort
If
.
-
wage increase
"
•
-
a
believe it
I
An
'
free choice of methods
voluntary saving.
isn't
of the
\
That
anyone
..
its haunches and let the Democrats cook
it
But
protect their economic wellour
.
This would hold down the cost of government.
tively through agents or trustees
of their own choosing to promote
it is
better.
one
A real conservative Administration would
-
vested
OFFICE
During building
OPEN
Days
up
and
end
.
Banking
come
try,
thrift, brought about by the ever- lished on so sound
a-basis/these, '
increasing available methods of mutual institutions to the
Convenience
2 Offices in the Heart of New York
2
savings banks.""'
We,.as well,
institutions,
savings bank
;
up
defenders
aim
thought I would
economic
well-being.
of the
critical need
York,
We
ignor¬
.
things to do for the people
with every do-good proposition they
with, the Democratic Congress will,
most of the time succeed, in going ?
to think
and then,
ing the public interest and at the
same time act like self-appointed
able.
expand the prin¬
thrift which have made
our
fronts.
Sulphur Springs, Va., Nov. 9, 1956.
For
not criticize others for
*
executive
the
ing
re¬
gardless of the public interest.
can
we
before
New
own
Opposition to Mutual Banks
operating pri¬
Penney
saver
their
strong and of which
the foremost exponents.
are
ings
Judge
to
tinued existence
depends upon its
motivated
Association
the
was
divert the
to the
successful execution.
commercial ventures for the
*An
true
as
nation
This
the
personal
at¬
by the
savings banks of this State
preserve
this
public in
beneficiaries
accrue
concerted
ciples of
must
ses must always act in the inter¬
of
in
for
mutual
handling their savings, and trus¬
est
seek to
now
our
Association
guide.
We
must
sight of the fact that
for
depositors
system,
private gain.
our
trustees
are
our
benefits which
ccept at all times the public in¬
terest
of
those who
difficul¬
we
have
w.e
should, has made us the
target today of frantic efforts of
path and,
that
success
trustees
a
Depositors
our
very
terests
this
make
the
Its
question
no
individual institutions
our
and
State
by adherence to the prin¬
ciple of always acting in the in¬
indeed, the difficulty at times in
choosing the right path.
There
can
interests
best
this
and
place we will have the White House
branch working nights trv-
the first
or
-
•
The
our
appreciate
ties that will
the
of
of maintaining ourselves
being and
and
a
purpose
and
tested
years
convinced
a
tained
our
Mutuals Act
in
being something of which we have
gracious plenty. But the past two years have
me of the error of my thinking.
In
the latter
broad spirit of pub¬
lic service and in the public inter-',/
est,
and
not
merely
for
the :
a
ing.
problems
pre-eminent
I osition, I would not today occupy
Ine position I so recently assumed.
rnd
our
the economy, our envious cri¬
tics to the contrary notwithstand¬
experience of
gradually losing the honored and
important position we now hold
find have held for so long in the
banking field of New York State.
And
be
savers
been
130
its
serve
proached in
of
will
we
painful
Association
to
the
of
to
a
Country, and in the best interests
rurselves to these problems intel¬
ligently
by
never,
have
period
a
found
Unless
which
and
us
over
address
we
own
system of thrift institutions, oper¬
ating under principles unique to
all
tions.
should
its
give occasion for such
question to be asked.
We. are
af-
thrift
of
following
action,
of
and
We
system
or
individual
a
group
a
each
decide
to
us
are
we.
course.
whole
thrift
asked
banks,
Meeting
the Superintendent
year ago,
merely
hav¬
there
us,
difficulty in charting
Banks
whether
ing to do with
concept
we
proper course.
of
and
act
keep firmly in
principles of trustee¬
no
opportunities
prob¬
which face us and which,
believe, afford your Association
great
We
owners.
of
a
members. These tasks must be ap¬
thousands of depos¬
if
the
be
our
institu-
a r
few
a
our
ship, which must guide
will
pertaining ex¬
clusively
t o
our
particuI
of
and
mind
some
—
I
greater need for concerted action.
a
they did some very selective voting. But it's
going to cost them money. There was a time when I thought a
Congress and President of opposite political
faiths were a very good thing because they
offset each other and we had no new laws,
chops and feeling
the
few
are
good citizens who elected Eisenhower overwhelmingly
Democratic Congress may be smacking their
Those
and then gave him a
lems
the abolition of mutual savings banks, and the erosion of thrift
incentives brought on by contractual and forced/savings.
was
By CARLISLE BARGERON
others,
require
constant
study if we are to continue to
serve the public efficiently, in this
modern and rapidly changing era.
many
Judge Penney assails those who oppose the
right of individuals to pool their savings, those who advocate
Affirms there
Washington
Ahead of the News
position.
attracting personnel, the mainten¬
ance
of
adequate liquidity and
this nation strong,
{
our
Operating problems in the form
increasing costs, difficulties in
PENNEY*
Making clear that mutual savings banks act for its depositors
and not for
From
saver's dollar, forces us to greater
efforts to maintain
State of New York
the
few examples.
a
from other forms
of thrift institutions eager for the
Managing Director, Savings Banks Association of
.Thursday, November 15, 1956
insur¬
unemployment
and
only
Competition
ance, are
..
Volume 184
Number 5586
...
Chronicle
The Commercial and Financial
pensation is paid by the company
ally they vary over a wide range,
whose
Financing the Acquisition
Most
what it
and inflationary
;
vestment
of interim funds.
use
banker's
invaluable
favorable
j
fellow
pay
your
i
v
•
,
..
two
ways
themr
i
(1) He
upon
trading terms.
or
of
^
subject
assigned to me is showing how these problems were
Financing the Acquisition."
1 solved in leading mergers and ac¬
hope you will
not
mind
if
I quisitions both past and current.
broaden that title to cover what In addition, many merger negotia¬
we' might de¬
tions are started with the knowl¬
scribe
the
as
that some financing, either
direct or indirect, will eventually
e
v
banker
of
be involved.
s-t ment
in
Experienced Intermediary
op¬
erations which
to
as
acquisitions,
mergers,
or
consolidations. ~
role.,
Money financ¬
of
ing " is
the
aspect
*
,
often "
There
opinion
are many
iron
to
search
spent ..on
refer
In 'both, cases consideration is
to '' time spent,f values in-
which'
is the
Volved, and the ultimate satisfac-
of
in -this
startling
area,
there
situations in
adventuring into
The
as
Paid °^security values exchanSed-,
inevitably'They very inversely to price or
8,nin« w»lk"'experience that almost
how-
deals
that while the three •itfjtiiib
uidt
vyuuc
nit:
terms
t
frequently used interchange-
run
off
the
eye!,,
ever,
track
.1
of;
matter
a
reach
or
...
value
ranging
from
anywhere
—
£
,
-
*
*
new
sity
of
many
individuals
for
horse-trading tactics. I recall one
situation where after months of
negotiation
gested to the two principals theft
they retire to a private room
of
boxing gloves.
It would, of
practical
eminently
be
its balance sheet.
on
book value and
either principal or breaching any
confidences. Very often helpful
information can be secured without disclosing a principal s identrty. This is particularly impor-
may
*n
of • a
the case
-whose owners
tant
veritable host of tax and financial'
problems.
14 WALL
company
controlling
or
Thes^m^erT^us^be
An amusing
angle to the use of
these terms
in
practice is^ tnat
while the officers of the buying
will
frpnnonflv
rpfpr
Organized
sale
nit
the
investment
frequently called
this
in
"
broad
-
suspicious!,,
is
employee
morale
">v
i
v/x.irvxx
buyers become
e°mpa^ earnings h»«h
havm®
growing
erowlng value willwlth relerenc3
eamm<a naturally ex¬
to book
receive more than boa£
to
pect
any
chance of
and
low
or
associated
the
in
we
observe
with
year
his
r
thousand
-
.
contact
on
broad
financial
of
range
.
matters fre¬
competitors. /,. '
-What
*
Should Not Be
state
some
Chairman
American
Done
Then
there
is
the
fact
that
;
T
in
constantly
brought
up
to
Vl.
'1Ct
'
,
CHARLES H. CHURCHILL
"
,
President, Cortland Savings Bank
'
—
"
Cortland,N.'"YT
CHARLES R. DIEBOLD
reamed by
n
client to
devote 3
substantial amounts; of ^ time
.
*
city,
oct.
3i,
1956. •
••
' -
opportunities.
Usually
his
Bank of Brooklyn
*
,
Savings Bank
»
*
»
Exchange Savings Bank
Albany, N. Y.
J. WILBUR LEWIS
President, Union Dijme
Savings Bank
New York City
•
CLARENCE G. MICHALIS
Chairman of the
Board, 7 he Seamen s Bank
for Savings in the City
of New York,
New York City
President, The Western Savings Bank
of Buffalo, Buffalo, N. Y.
BRYANT GLENNY
JOHN I. MILLET
•
...
President, The Troy Savings
Bank
Troy, N. Y.
President, Buffalo Savings Bank
Buffalo, N. Y.
EARL
HARKNESS
GEORGE 0. NODYNE
President, East River Savings
Bank
New York City
•
and Chairman
President
DANIEL T. ROWE
The
-
Greenwich Savings Bank
President, Kinas
York City
Brooklyn, N. Y.
New
•
.
THOMAS II. HAWKS
n
.
^
President, Rochester Savings B(mk
\
Rochester, N. Y.
r'
-
Highway Savings Bank
EARL B. SCHWULST
President and
Chairman
.
JAMES R. HUGHES, JR.
First Vice President, The Savings
^
M
.
-
t.
Bank of Utica
-
Utica, N+ Y.
York City
,The Bowery Savings Bank, New
'
,*■
-
ag-" ^
com-
•
President, The Albany
of Rochester, Rochester, N. Y.
•
^
York
-
in-negotiations in which he 13 serv-
date
•
ADDISON KEIM
President, The Community Savings Bank
there
.
-
Brooklyn, N. Y.
New Y<frk City
of
every-acquisition or ing. •'
arise questions ox
When engaged in acquisition or
valuing securities in terms of in-' merger .work , an- investment
vestment quality and markfetabil- banker may represent either
prinity. For the purpose of assisting cipal or serve as a friendly umclients on these matters cf valuapire in. working out what may be
tion, we ourselves maintain taoles a fair deal for both.r He may be
.
President, The Williamsburgh
of the Board
.
practically
merger
.
JOSEPH A. KAISER
CHARLES W. CARSON
companies ;:inr.
acquisitons or merger
securities
M
Brooklyn, N. Y.
Irving Savings Bank
•
.
volved
.
the
.
President, The Dime Savings
ROBERT A. BARNET
this point to
things that an invest¬
ment banker shoald not do:
v
Banks Trust Co.
Now York City
Y.
Rome, N. Y.
'■
It might be well at
U.
>
i
r
}
,
also a research
of interest to the Savings Ba,nlc3
'
agement is much better quaLfied "
to weigh the business aspects
which should govern, in the end. *
/ (3)'He should not speculate In -
,
Savings Banks of New York Stai33
serving them exclu¬
President, Savings
E. LESLIE BARNARD
result, down through the years,
many
mergers
have
originated
with investment bankers, an early
classic example
being the elder
J. R Morgan's role in forming"the
Steel Corporation.
33
savings banks' bank,
AUGUST IHLEFELD
President, The Rome Savings Bank
puts
a
S.
on page
GEORGE C. JOHNSON
the
investment
(l)..He should not{ promote a.
banker in a position to receive
important information abouUoeti^
•»' h^Iess
-lt^ »• fulfillment
panies whose.stockholders '^ish to. •'P^!Ilises
achieve,, constructive^
sell
or
as
tb* other companies
pfrposeSr^
.r,'?.- ,
whose managements have paVt'icu- fZ (2), He Should"
#*
lar'ideas about
acquisitions.^It. Sway final judgment of manage-., j
has become common practice to ment on the desirability of a pro- * \!
consult him on these subjects. As posed merger or acquisition: Man-%
quently
Continued
-r ■
Jamaica, N.
•
which I am
touch through
several
This
Mutual
President, Jamaica Savings Bank
known. .He.may-wisn tcr
disclosing his purpose to
e
avoid
different companies from Maine to
California.
the
JOHN ADIKES
-
..
Time and again
!P^
of
with
are
basis of it 1
trade on the
want to
DIRECTORS
suc¬
corporations, heaas of
companies, controlling stockaolaer;
Representatives
■ >
* 19
AessentiallyA1practicalCconsrd- ; cP^e shopworn as possible acquiIn the ordinary course
■ftlSSfrtinT
fhlrp
his: business, he is in contact sts^dpoint, of course, there will be
groups,
etc. '
the
company
Coh-
book valuo
static earnibgs will
versely, one with large
~
erations.
with many
out.
selling
when
value
>
some
of
...
correspondent, investment consultant and trustee;
Association and its members.
perfectly sound companies going
begging because they have *"be-
from
arises
by
owned
wholly
disrupted,- and perhaps the whol^,
for service
upon
field
banker
~
body and clearing house .for information*on matters
is
axu
V. project denied
-
■
Potential
serious.
cess.
.-That
offered for
consequences are often
company
the
oaxo
'
Originating Mergers 1
\
and
SAVINGS BANKS TRUST COMPANY is the
v
certain
as a
..
handled
extteme
f
WOrd ^e^S freely arOtUUl .that ■ H sively as depositary,^
tn
stockholders of the company sellr
.
.
STREET, NEW YORK, N. Y.
with extreme discretion because
company will frequently refer to
a
deal as arr, "acquisition,]' the
ing out prefer to describe it
"merger."
t
\
w..w
.
SAVINGS BANKS TRUST COMPANY
'
r>nmrianv
A
acquisition.
almost- every
,.
regard both to
earnings come up
termediary without committing^
On the
involve complicated
exchanges
of
various
classes of publicly-held securities,
stockholder ratification, proxy solicitation, SEC registration, and a
hand, it
slI
.
problems of establishing a
The
,
other
<
value basis having
it was only prudent
of the valleys.
course,
wi£i
bottles of whiskey and a
two
ma¬
to seek some products outside of
its own industry in order to fill in
some
a
in the la^i
desperation finally sug¬
stage of
in
company
forth,
and
back
worn-out intermediary
fields
of textile
should not forget the propen¬
we
f
item
1
matters of pride,
face saving. Also,
human
prestige, and
very
*■impasse several times ..before less than 1% to as much as 5%. also for a producer to try and
ably, they do not always have the
can. be ,successfully clo-.ed.
smooth out cyclical variations in
•; Purposes for Mergers
same connotation. Proposed action
£
Pa^ty cap usua ly
annual business. ■;
may
be as simple as buying a
helPful in assuring a coniinu- * What are the purposes sought in
An
interesting -instance of a
block of stock for cash, requiring anc€ of 1 negotiations.
- .
■
...the many acquisitions and merperhaps only a board meeting of
I*} -the early stages of a nego- gers being made recently? Actu- legitimate move in diversification
the buying company and leaving tiation certain exploratory work * •
it only with
a
new investment can
done by an experienced in-■
are
-
problems faced in workir**
acquisitions are, cl
course, myriad in variety. Valua¬
tions, union relationships, pension
chinery whose business was «v/differences ."V" VA W1C UAiCUt
cU^ats. ' Whenw«o noAn ob- wdtkinfLOh a contingent basis fees ^oriously feast or famine
For
^?l^^baSlS °fa peicenta«e °f the price
learned
have
we
might
and
Power
out mergers or
p(art of wisdom. I can think
manufacturer
a
of
so-called
some
business
some
are
attention
the
diversification.- While
for
occurrences
given
to
have witnessed
we
.
however, has
purpose,
considerable
I
late.
^ose ^hich are not concluded^
-
Earning
Other Problems'
out.
part.
te,
time
Also,
research staffs.
Another
drawn
,^jective viewpoint drawn Jr°mjx-L- are frequently arranged on the such
*
n o
of
Valuing
tion of the client
lesser
.We
large amount
*
we
a
and
ployed although, of course, it im¬
plies higher fees because success¬
ful deals have to make up for the
is
too
frequently overlooked.
In bringing
two
principals together on tne
terms of a deal, it is found that
Another,
ordinarily
referred
'
v
Occasionally
some
completed. It is
most
usually em¬
method
for-
sign of times, I understand
acquisitions have recently
been sought in order simply to
acquire highly trained scientists
as
all
those
are
'
~
.
items.
fc3
to
one
move
mate¬
move
territorial location thereof.
mergers. are
this
raw
materials seek to
sumer
(2) He may work on a contin¬
gent basis to receive compensation
only in the event that acquisitions
edge
-
role of the in-
of
is
diversification
of
pursued guardedly. Distant past*
tures are often deceptively green,
find the activating purpose to be plans, executive stock options, nci
increased plant capacity or better to mention tax problems, or th-2
o
'
or
these
ward toward end-product or con-
be paid an agreedfor his services" irre-
sum
of
fabricators
wherein
raw
spective of the outcome.
The
both
rial, or parts supply, and conversely. where those who produce
"
may
If
in
some
degree
served, all the better.
Of course, there will always be
going on logical steps of integraare
back through lines
combination
a
production facil¬
use
skills.
and
purposes
acquisition or merger negotiations^, an;l investments banker
may
be compensated in one of
possible
makes
ities
interest but I insist
other
fully
more
tion.
Writer shows why in-
experience
for
uncommon
In
demerits of private vs. public placement, convertible securities,
debt and equities financing; and affect of money market rise
;
it was logical for Otis to offer
equipment for moving goods hori¬
zontally
as
well
as
vertically.
Nevertheless, I am sure that most
of you will agree that this purpose
•
Compensation Policy
lems; methods in establishing exchange ratios; the merits and
Elevator
distribution.
Then would come
the search for items which would
wdrk for my
bm."
acquisition by the Otis
Company of a concern
truck'field. With tha
trend toward one-floor factories,
the
was
be
to
an
is, it is not
the
observation
our
early stage of
Human nature being
matters
are
principal to say in effect to the
investment banker, "I want you to
that
in
common
in the lift
a
pliance with tax, anti-trust and registration laws, and financial
arrangements. '. Explains policies guiding compensation for
services provided; book value and earnings valuation prob¬
.
in.
consid-
desire for added products
to fit into established channels of
and
negotiation.
banker's role
him
is, the
agreed upon at
in acquisitions and mergers, from the inception of such a step
under the investment banker's
guidance to the actual com,
called
arrangements vary
erably.
By JAMES B. WALKER*
Mr. Walker details the full
gamut of investment
officers
These
Goldman, Sachs & Co., New York City
7
(2071)
HARRY
F. SMITH
President, Netvburgh Savings
Newburgh, N. Y.
Bank
-
*
8
The Commercial and Financial Chronicle
(2072)
..
November 15, 1956
.Thursday,
Louis Lerner Pres.
Dealer-Broker Investment
Of Garibe Stores
BOSTON,
Mass.
Louis
—
C.
Recommendations & Literature
understood
It is
send
to
that
the
interested parties
will he
mentioned
firms
pleased
of
Caribe
Stores,
major
Letter
(No.
ship
Beryllium—
is
C, 1033
Also available
is quarterly
report for period ending Sept. 30, showing
table on atomic aircraft program and prospect for Britisn
use of atomic
power and impact on Canadian uranium, etc.
or
with
program
Atomic
22)—Comments
particular
Development
Thirtieth
reference
Mutual
atomic merchant
on
to
Fund,
Brush
Dept.
Inc.,
Street, N. W., Washington 7, D. C.
chain
I
Stocks
Corporation,
—
Ford
With
Motor
Laird, Bissell & Meeds,
'Burnham
View
particular
reference
Company
Chrysler
Motors—
to
General
and
New York 5, N. Y.
120 Broadway,
Monthly investment letter — Burnham
•Company, 15 Broad Street, New York 5, N. Y.
and
—
Stocks—List of 45 issues selling at more than 17%
beneath their 1955-6 highs—Francis L du Pont & Co., 1 Wall
Street, New
York 5, N. Y. Also available is a bulletin on
figure your 1956 Federal Income Tax on security
profits and losses and a Tax schedule for profits and losses
.
how
on
Co., Ltd. and
the
i
ttee,
wives
for
a
C.
Louis
Lerner
General
,
Federal
,
firm, Lerner & Co.
Dynamics
and
Jefferson
Lake
State
and
Stock
1
Sulphur.
will
•
Campbell
of
current
rates—Registrar
50 Church Street, New
pany,
"Floating
York 7, N.
Rate"—Discussion—E.
Bank
Transfer
and
M.
Com¬
Campbell
&
Inc.
Co.,
has
Limited,
Hotel,
Hot
Edward H. Welch
wick
is
President
A.
and
Treasurer;
SECURITY
Campbell is Vice-Presi¬
and Secretary.
Both were
formerly officers of Grande & Co.
^
STANY
cocktail
party
and
dinner
dance
to
be
the Grand Ballroom of the Hotel Commodore,
Saturday, Nov. 24. Tariff $30 per couple; reservations should be
sent to Elbridge Smith of Stryker & Brown.
this year
held
,
annual
the
for
Horton
Building to engage in a
securities business. Glen H. South¬
Colin
ASSOCIATION OF NEW YORK
Security Traders Association of New York is reminding
members that reservations should be made as soon as possible
The
been
formed with offices in the Dexter
dent
Y.
Saunders
Homstead
the
SECURITY TRADERS
Form New Inv. Co.
-
—Booklet
at
held
be
Springs, Va„ Nov. 3 to 7, 1957. The Broadmoor '
Hotel, Colorado Springs, has been selected forr
the 25th Annual Convention, Sept: 29 to Oct. 3,
SEATTLE, Wash. —Southwick-
Original Issue & Transfer Tax Rates
Disneyland will be long remembered.,
The 24th Convention of the Association
to
1958.
Southwick
Industry—Analysis—Harris, Upham & Co., 120 Broadway,
New York 5, N. Y.
Also available are reports on
Electronics—Study with data on the companies engaged in the
industry—Merrill Lynch, Pierce, Fenner & Beane, 70 Pine
Street, New York 5, N. Y.
included .dinner
other entertainment to say nothing of the:,
•
director of Coplay Cement
Manufacturing Co., and Mayberry
Motor Freight Inc. and head of the
investment
which
cities
both
in
and
visit
.
He
the
following
gram
National
Co^nanv
the members and their
Convention.
The pro¬
hosts to many of
were
Treasurer and
the
The Security Traders
of members.
Associations of Los Angeles and San Francisco
executive
director
wives
225
Chairman of
"Drug
;
Palm
Springs, Calif., was one of the most successful
to
securities.
Hotel,
Mirador
El
meetings of our Association. The registration
which was in excess of 500 included more than
is also
Discount
at
estment
-
'1/
held
Association
the Victoria
n v
a
Security Traders
The 23rd Annual Convention of the National
director
and
ASSOCIATION
TRADERS
SECURITY
NATIONAL
Lerner
r.
President
r o m m
.Automobile
a
super¬
in Puerto Rico.
M
Atomic
Inc.,
market
the following literature:
Notes
NSTA
Lerner has been elected President
•
The
in
TRADERS
ASSOCIATION
OF NEW YORK,
INC.
Security Traders Association of New York announces the
following candidates have been nominated to hold office for the
1957:
year
Victory Building, Toronto 1, Ont., Canada.
The
„
Industry
Booklet
Nobody
how
on
the
Really
oil
dent:s
Office, Gulf Oil
burgh 30, Pa.
Knows
industry
Graig
by
its
gets
Corporation, P. O.
Thompson—
job done—PresiBox
John J.
1166, Pitts-
Ryan Co.
Admits E. J. Soberer
'
Japanese Stocks
I
—
Current information
—
Yamaichi Securities
Co., Ltd., Ill Broadway, New York 7, N. Y.
&
1957
Forecast—Study—National Securities & Research Corpo¬
ration, 120 Broadway, New York 5, N. Y.
»
Stock Summary—Two
October 1956
NEWARK, N. J.—John J. Ryan
weeks free trial—National
Quotation Bureau, Inc., 46 Front Street, New York 4, N. Y.
Co., 786 Broad Street, announced,
the admission of E.
as
general
a
Joseph Scherer
The
partner.
firm
specializes in New Jersey munici¬
pal bonds,
r
Over-the-Counter Index—Folder
showing an up-to-date- com¬
parison between the listed industrial stocks used in the DowJones Averages and the 35 over-the-counter industrial stocks
used in the
yield
t
*
and
National
York
<
Pocket
v-
National Quotation Bureau Averages,
market
performance
Quotation
4, N.
Bureau,
over
Inc.,
a
46
both
as
Guide
Transportation—Discussion
York
in
current
issue
of
"The
same
Exchange Magazine, 11 Wall Street, New
5, N. Y.—10 cents per copy; $1 per year. Also in the
issue are other articles of interest °to the investor.
Year-End
Tax
Saving Possibilities—BuReting—Sutro
120 Broadway, New York 5, N. Y.
Co.,
*
*
Street, New
York 5, N
Machine
&
&
Nov.
of
&
1956
(Philadelphia, Pa.)
Traders
Association
Philadelphia Fourth Annual
Dinner
Dance
Cricket
town
Nov. 24, 1956
at
the
German-
Club.
(New York City)
Security Traders Association of
dance
room,
in
Hotel
the
dinner
Grand
Ball¬
Commodore.
McKinnon, 11 Wall
Nov.
Foundry
17,
Investment
and
Co.—Bulletin—Bache
&
Co.,
25-30,
1956
a
bulle¬
President:
First vw.president: John F.
on
'page
47
America
the
convention
annual
Hollywood
Beaph Hotel.
&
Dec.
7, 1956 (New York City)
Security Traders Association of
New
York
cocktail
annual
party
at
Second
meeting and
Trading Markets in—
Jan.
Directors
1957
(Philadelphia,
clay Hoteb
Pa.)
Jan.
\
14-16, 1957
American
.
G. Mullin, Tucker,
(Two-Year Term):
John
Incf'
Anthony & R. L. Day.
S. Barker, Lee Higginson
(Chicago, 111.)
Bankers
Mark-
Trustees of Gratuity Fund (Two-Year Term):-Edwin J.
Association
Committeemen:
Samuel F.
Colwell, W. E. Hutton &
Co.;'John J. O'Kane, Jr., John J. O'Kane, Jr. & Co.; Harold B.'
Smith.
National
Alternates:
Committeemen
William II. Gregory, III,
Gregory & Sons; Joseph J. Lann, Joseph J. Lann Securities, Inc.;
Walter F. Saunders, The Dominion Securities Corporation; Stanley
DEPENDABLE MARKETS
Operating Utilities
M.
Waldron,
Merrill
Lynch,
Companies
Pierce,
Fenner
&
Beane;
Graham
Walker, McManus & Walker.
Nominating: Committee
Natural Gas
Conlon, P. F. Fox & Co.
ham, Wertheim & Co.; James V. Torpie, Torpie & Saltzman.
9th National Credit Conference.
•
J.
.
other:
•
Bernard
Jacobs, Sidney Jacobs Co.; Elbridge H. Smith, Stryker & Brown.
National
a
McLaughlin, McLaughlin, Cryan
Corporation; Stanley E. Dawson-Smith, Cruttenden & Co.; Sidney
10,
tion annual meeting at the Bar¬
and many
Vice-President:
Treasurer: Daniel
Philadelphia Securities Associa¬
Sierra Pacific 'Power Go.
Krumholz, Siegel & Go.
Co.
Bankers
the
A.
Secretary: Barney Nieman, Carl Marks & Co.,
Club.
Firm
Nathan
Investment Bankers Association
at
Continued
Daniel G. Mullin
Barney Nieman
Bernard J. Conlon
(Hollywood
Beach, Fla.)
of
n. Y. Also available is
Kelsey Hayes Wheel.
on
Field
New York cocktail party,
Y.
36 Wall Street, New Y^v f»
tin
Bros.
*
Abbott Laboratories—R^o^—Thomson
American
Investment
In
for Today's
Exchange"—The
.
EVENTS
Y.
Investor—Pamphlet containing lists
of
selected
securities
for
income, growth and trading—
Discusses Dow-Jones Averages 1929 vs.
1956—Harris, Up¬
ham & Co.,
14 Wall Street, New York 5. N. Y.
Truck
COMING
to
13-year period —
Front Street, New
(Four members to be elected): Leslie
Barbier, G. A. Saxton & Co., Inc.; John Butler, The First Boston
Corporation; Vincent M. Gowen, Goldman, Sachs & Co.; Charles
_
Transmission & Producing
M.
Kaiser, Grady, Berwald & Co., Inc.; James
Musson, Byrne &
Phelps, IncA G. Harold Noke, Frartcis I. duPont & Co.; Herbert L.
Seijas, Merrill Lynch, Pierce, Fenner & Beane; Abraham Strauss,
Strauss, Ginberg & Co., Inc.; Bernard Weissman, A. Trent & Co.;
Homer
TROSTER, SINGER & CO.
74
Wirth, Mabon & Co.
of the Nominating
Members
.Vejnbers: N. Y. Security Dealers Association
„
were:
Richard F.
Committee presenting the slate
Abbe, Shearson, Hammill & Co.; Thomas Green-
berg, C. E. Unterberg, Towbin Co.; Joseph D.
Trinity Place, New York 6, N. Y.
DEMPSEY-TEGELER & CD.
Krasowich, Gregory
& Co.; Alfred F.
L. Roggenburg, Roggenburg
Tisch, Fitzgerald & Co., Inc., Chairman.
&
Sons;
Stanley
Continued
on
page
16
Number 5586
Volume 184
(2073)
Chronicle
The Commercial and Financial
.,.
Then
Providing Necessary Funds
For State-Local Projects
Craigie & Co., Richmond, Va.
provided. As towns grew
cities, all of the needs were
intensified
by
the
density
of
population and the especial difficulties of urban living.
j
into
the factors determining the
indicates who the bond purchasers are, ;
describes full faith and credit general obligations and "
us
at
namely,
We Talk of Money
grow
labor
trees.
on
This
trite, overworked expression,
popular with frustrated parents
irate
and
simple
husbands,
contains
services
-
A
produc¬
;iabor.
True wealth,
t i
s
n-
guished
from
money
as a
a
of,
into
^
of
aggressions
Walter W. Craigie
Next
came
families
to
sup-
services
-
(rn„0„nilin*0i
governmental
proper
fniirtinn<i
functions
was
welfare
roads, schools and
became
was
and
and
cost
"
money.
Services
Services
These
These
services.
'
,
Provided
Are
by governbe placed in the
provided
mental1 units can
general category of operations.
,
Taxes
tkm
levied for the opera-
are
and
maintenance
of
schools,
repairing streets, courthouses and
a
n
n
e
r.
here,
Capital is the result of savings. In
other words, if all w* the fruits
——,
of —
of productive labor were imme-
its
family
each
tion
village.
could
and
other
similar
services,
For the operation of schools and
Even
provide
-
Money
other
fiat
means.
or
its
loan
or
more
by
negotiated
the
Some bonds also are payable
fr0m limited taxes. This means
that there are legal restrictions
upon the amount of
tax which
levied
be
may
the
for
determined
paying
well as
purchaser,
the
by
as
to sell at a higher rate of
interest to offset this limitation. r
Let
lender
g
have
.
.
..e
„Wh
W1?y d0 not
taxes
municipalities borrow the necesr,^r.„r
*1
,
,
..
.
sarY funds dnect
bankg
of
instead
and
issuing
with
of
Capital
should
•
mature
life of the
improvements
eral
later
obligation
bond
upon
all of the taxable property
through
boundaries
life
of
This is not
an
is
courses
Not
these last
inflation
a
New Issue
.
within
.
the
corporate
the
of
Chapter
the
How Bonds Are
n
fh
,
d
.
n
*9™
a
h
Ml
r.
the
and
®
,L":fV£a!
p
IhA
t;nn
np^warv
n cessary maeDteaness
on
Continued
page
Prospectus.
,
.
r
•
277,700 Shares
happen to
the
aged, the pensioner
can
of
holder
insurance
an
while
experienced in
the uncontrolled in¬
have not
we
recent
years
elsewhere, we have
witnessed the sad plight of people
who live on fixed incomes having
and
Common Stock
(Par Value $1.00 Per Share)
one-half of the purchasing power
that income completely
of
wiped
out.
It must be remembered
central
state
or
creates
no
Tnl i1^
^
in Ger¬
flations which were seen
many
Incorporate:d
AMr
policy. Here in the United States,
that the
■1 *
1
.
■/
'
*
(bearing endorsement representing proportional
interest in 2,777 .shares of Common
beneficial
government
real wealth and has
Stock, $1 Par Value, of Pamcor,
Inc.)
no
that which is
extracted from the people in the
than
other
money
form of taxation. These funds are
-
returned to the
provided by the gov¬
ernment—or as grants, less the
cost of administration. Thus, there
is
no
•
cannot
back
give
anything
stance
which
not
was
Share
'
to
engineering applied
the end of a wire
,
.
government
for
grants
Price $16.25 per
Precision
;
"free" Federal
such thing as
or..State
-
people in the form
services
of
the
to
in
the
taken
people
first
the
■
.
in¬
from
■
V
;
Copies of the Prospectus may be obtained in any State in which this
circulatedfrom only such of the underwriters, including
announcement is
\
-
|
the undersigned, as may lawfully offer these
■'
:
-
,
, , ,
securities in such State.
people.
It long
has been recognized that
whosoever holds the purse strings,
-
in time will dominate the
recipient
Kidder, Peabody & Co.
of the contents of the purse.
real
The
answer
Such action
to the
of
Sixth
needs
people, it creates the feeling
human
*An
the
resources
free
it
develops
and
insures
& Co.
Merrill Lynch,
Pierce, Fenner & Beane
address
by Mr. Craigie before the
Council Session, spon¬
Industrial
N. Y.
Bache & Co.
Smith, Barney & Co.
A. G. Becker & Co.
Drexel & Co.
Incorporated
a
America.
sored by Rensselaer Polytechnic Institute,
Troy,
Eastman Dillon, Union Securities
brings projects close
responsibility,
truly
to
community is local effort.
of any
Hemphill, Noyes & Co.
November 14, 1956.
"
Sold
o,,ffipLntiv
nrovpmM»t
P.
and
,
panied
thing that
thrifty, the
issuing:
IV
Issued
accom¬
by a debasement of the
monetary unit of exchange. Infla¬
tion, always slightly pleasant in
its early stages,
is the cruelest
levied
taxes
municipality.
improvement financed by it. Thus
it would be the height of fiscal
folly to issue 40-year bonds to pay
for a school building or system of
roads which would be either obsolete or completely worn out
20 years. State constitutions and
municipal statutes under which
offer of these Securities for sale. The offer is made only by the
issues are
off
located
within the
the
Gen-
paid
on
Sound finance calls for the full
well
paid
are
than
improvement.
tion of the bonds when issued.
sue)
and
specific
permanent nature
a
-tax
anticipation notes and by a portheir
state
from
for by bond issues which never
meet the demands of depositors,
Local banks, however, frequently
lend
Chapter ,HI:
paid for through
revenues
projects.
is simple:
community
are
coupled
Federal aid, in certain instances,
:
,
from their local
bonds?»
Commercial
banks
prefer
to
confine
their
loans to short periods of time in
order
to
keep liquid funds to
answer
summarize
us
Operations
,
gen¬
gov¬
payment
on
streets adjacent Federal appropriations for high- bonds are issued usually prohibit
ways also are available through such
issues. Another practical
action.
The result of all of
three
be
can
deliberate
of
result
ernmental
,
thereto.
tax
located
within
the
corporate
limits without limitation as to
rate or amount.
lose fiscal policy
through
a
as
also
It
decree.
erated
with short side
unlimited
constituted by execu-
money
tive
be created through
One form is that of
can
termed
are
jails, programs of welfare, recrea- repayment of the loan (bond is-
water supply from springs
own
bonds
,
behalf of of principal and interest. Limited
citizens with the length of the tax general obligations invariably
The
Chapter III
How
other tribes.
the
individual
and
for public welfare, these taxes are
supplemented by some form of
and wells and furnish sanitation state aid. Federal grants are made
facilities
adequate
for its own available for public welfare and
diately expended, there would be uses. The street problem was rela- for schools in areas of large Fedno capital to form a reservoir for
tively simple, a single arterial eral Government establishments,
continued productive investment. road
through
the main section such as those near Norfolk, Va.
m
nothing
is
issue
loan
a
the wishes of the bond
ply. Water and sewerage, streets
methods to settle disthe various
~
come
being in
other
any
for
II:
Chapter
its primitive state had
in
A bond
than
issuing municipality
.
ability of the borrower
for
putes between
exchange,
does not
V
n
need for some form of law and
order,
medium
mere
.
,
we,
these needs were too great
grew,
in its primi¬
rugged but
simple. The immediate needs of
the family unit were food and
shelter. As population increased,
the family unit merged with other
family units to form the -tribal
unit. This automatically
created
society
life
state,
money,
■;
limitation is the refusal of intelligent purchasers to buy such
obligations.
7,. .,
In most instances, bonds issued
for the above purposes are secured
by the full faith and credit of the
municipality
and
are
paid
off
through the levy of taxes, which
are
not limited
by
law', ieuch
school building with a life of general obligations, which means
20 to 25 years out of current taxes that they not only are backed by
would impose so heavy a burden the full faith and credit of issuing
upon the taxpayer as not to be body, but that taxes may be levied
economically feasible. Therefore, upon all of the taxable property
simple needs. As the population
Community Is Formed
When
tive
some¬
d i
free America.
Chapter
tive
as
a
cost
*
•
summarize
us
Society
such thing
Local effort
grant.
is essential to
of
result
the
no
Let
«a
Money in its
original state
represents tne
one's
"free"
a
as
eco¬
nomic fact.
fruit of
capital
—
savings. There is
own
a
recreation.
and
welfare
these
of
summarize Chapter I: True
.wealth is the fruit of productive
*.
on
which
state of complex
a
.
Money does not
beginnings,
simple
from
arrived
All
Let
•.
gasoline. Comtheir own
water,
gas
or
electric .plants
charge fees in proportion to the
amount of the commodity used.
Capital improvements, as distinguished from operations, almost invariably are made possible
through the issuance of bonds by
the municipality involved. To erect
munities
-
other kinds of bonds.
...
the Federal tax
find bond issues for school
buildings,
for
water
systems,
problems. To those of water and sewerage systems, courthouses and
sewerage, 'streets
and
roads, jails, streets, roads and for other
schools, courthouse and jails were improvements
of a permanent
added
another
public function, mature.
\
;
Thus,
we
of the bond market, traces
Chapter I
system of edu-
a
cation
interest rate pattern,
,
the
were
and
constructed
dealer presents non-technical primer dealing with
the many beneficial services of municipal investment bankers
in order to provide educators with a better background of
state-municipal borrowing-financing activities.
Mr. Craigie
starts with the importance of money, explains how govern¬
mental units from school districts to sewerage authorities make
and
town; and
found inadequate to meet the demands of
the people, proper sanitation became a must, courthouses and jails
had to be built, streets had to be
paved, school buildings had to be
Virginia
use
supplies
Water
WALTER W. CRAIGIE*
By
Senior Partner, F. W.
the
came
problems attendant to greatly increased populations became real,
Paine, Webber, Jackson & Curtis
28
10
The Commercial and Financial Chronicle
(2074)
quiiements
What's Ahead foi Business
ernment
In the Next Ten Years?
less
tional
credit.
With this additional credit,
School of Business Administration,
College
ing
money
known
in
even
United
the
States.
sale
prices
in
But
wholesale
happened
that
is
has
business
been
trying,
with
very
subs tantial
to lift
success,
total
expendi¬
tures
Arthur R. Upgren
for
plants,
ment
cilities 30%
and
fa¬
In fact, Sep¬
"Economic
Indicators,"
3 published by the Joint Economic
Committee,
1
ures
for
shows
such
that
expendi-
facilities
new
are
new
yet
Within
than
This
$8-
Capital Boom
$9
or
billion
has put a great strain
<
increase'
the
on
tension of
<
id call
expanded
$40 billion.
good deal of
credit into
This
bank
new
year
much
so
of
the
in¬
in capital investment has
financed by commercial bank
credit that our monetary policy
lias had to be changed.
Jang-term
it had to be; When
facilities
financed
are
t
hrough bank credit, incomes and
t he money supply are
enlarged at
•From
the
a
talk
Associated
setts, Boston,
by
Dean
Upgren before
Industries
of
Massachu¬
Oct. 25, 1956.
the
formulation
by business of
capital budgets for
of
credit.
add,
will
current
our
This
strin¬
policy, I might
undoubtedly
rp^°in
m
future plant expansion.
ter M. Keezer of McGraw-Hill will
tell you that nine years
ago, when
he began to draw uo the now-
effect
real
as long as any
possibility
inflation remains.
Well: Might this
produce
gency
a
review
decline?
severe
what
along exactly the
recently as in 1953.
happened
lines
same
as
for
Doubts
Restraint
Will
Cause
In
70% of
our
iron
.
.
1953, the commercial
banks that belonged to the Fed¬
eral
Reserve
System owed the
$1.4
billion.
to which
serves
This
was
as
much
the
.
.
.
were
basic
to the
as
re¬
ex¬
pansion of credit after the Korean
War.
our
truce
was
will
in
—
or
Here
are
a
signed, it had become
6%
The
such
only
a
\
Lithium
Corporation
Corp. of America
Marshall
Wells
6% Cum. Pfd.
Minneapolis Gas
is,
re-
and
by mini-
shall
we
only
in
whole¬
we
rise
the
in
prices will be
result of wage in•
'
u
r
+
^
-u
«.
handful of contributors
a
to
of
capital.. Wages,
have
wages
to
will
go
hp lahnr's
capRa^—in
after
all,
rn^sure
like
the
of
goal
.
.
means
turning
all kinds
.
longer-
maximum
ture
productivity.
tion
is:
out
of
Where
to
do
therefore,
^
.
the
expansion
about with
bank credit
on
with
toward
ques-
find
we
the
have been talking
and,
make markets
The next,
finance
minimum reliance
pressure
we
,
formation
increased
minimum
inflation?
e
.
Minnesota Power & Lt.
5% Pfd.
Northwest Bancorporation
4.20% Conv. Pfd.
Northwestern Nat'l.
prospect
Insurance
second
Offices in 107 Cities
year
ciation
billion.
tion;
NEW YORK 5, N. Y.
savings
this
year
Business
ago.
reserves
This
continuing,
Beane
savings in
bright in their
Personal
quarter of
;the
were
wider
was
the
use
of
the
the digits" method of
new
of
assets;
the total
and
the
result
of
amortiza-
"sum-of-
depreciating
very
growth
plant, which in itself
Continued
on
page
that
this way: "1957 a banner
year. Plateau late in year, but no
marked
downturn.
Election ' results
31
wlI1
make
lmle
or
dif_
n0
fprpnpfl»
'
r
-
,
_
.,
,
,
were
of
221
econo-
than
more
210
replies
to
each part of every question except
those on construction and housing,
and there were more than 200 reall
on
parts
of
these
two
questions.
(1) Gross National Product: The
in
general
expect
further steady increase in
°-^ar
P"* °f g°oc*s and
a
total
serv-
with the most rapid rise in
the first half of 1957 and relatively
ices,
smaner increases
in
the second
Balf 0f the year. The median forecast for the end of 1957 is for a
seasonally adjusted annual rate of
G.N.P., at $420 billion, about 3%
above
the
second
quarter of 1956. The
omists
rate
showed
unanimity
1957
in
in
to
reported
the
for
the
econ¬
a
high degree of
forecasting an in¬
G.N.P.
expected
More
rate
at
than
the
85%
end
of
be
higher than in mid1956; and only a very few saw any
drop in prospect.
(2)
Cost of Living:
mists
in
are
even
expecting
that
The
econo¬
unanimous
more
rise
a
price
consumer
in
the
index;
BLS
90%
say
will
the index at the end of 1957
be above the mid-1956 level.
The
index
of
this
of
the
end
119
stood
year;
of
116.2
at
in
June
the median forecast
economists
is
117.5
the
at
1956, 118 in mid-1957 and
at the end of
1957.
The great
majority of the economists (more
than three quarters) thought the
.
Whether we should get excited
total
A
largest number in the
history of this annual survey replied; but a few omitted answers
to parts of some questions. There
—-
.
-
«—
index would be 118
or
—
above
by
the common feeling that the the end of next year; a third of
second half of 1957 will not con- the total set the figure at 120 or
tinue the upward trend, and might above.. There is a much stronger
oven show a decrease, is a quts- feeling of rising
prices in this
tion-, Experience with .these and year's survey than there was last
aver
other surveys made at this time
of year indicates that it is customfor
many
forecasters to take
somewhat dim view of the sechalf
of
the
up-coming
year,
especially if they think the first
half is going to be good. In short,
there may well be a "second half
downward
bias"
in
annual
casts.
fore-
,
Tight Money Views
-
depre¬
increased bv $2V2
accelerated
make
many
$4.5 billion above the annual rate
a
&
are
to
.
0nd
of
sources
that
.promise.
Life
Just call—
70 PINE STREET
have
comments
economists
economist summed up the feeling
a
,
Encouraging Savings Surplus
We
■
ary
_
the
activity> and this also showed up
in some of the numerical forecasts
™s indicators. Others
^ i?. +?e woul<4
a levelg
*n
second half. One
of
,
of
many
had
widespread feeling
the second half of 1957 might see
wMch
,
a
-at least a slight decline in business
nrP
capital budgeting — is precisely the solvent for the increased
we
who
was
y
the
crease
1957-Second-Half Decline
among
of
term
1
was
There
for
money
.
Slight
a Congressional
in the offing.
4
in-
uo;
capital both to sustain today's
high business activity and to provide in advance foundation for fu-
think about
election
and bet¬
new
survey indicated that they
1954 when oniy
turn out
can
mists,
economists
definitely
are
trade
'
economists
indicators.
plies
output.
and
cussion of the election in this
ytar's survey than there was in
to
want
of
thought!
Lynch, Pierce, Fenner
t
Only
doing its share of the
Increased and improved(use
job
a
Trading Department
Merrill
^
of
organizations.
surveyed were
r«?ked to present specific
forecasts
for the remainder of 1956 and for
1957 for several major economic
price indexes will continue to
primarily
expanded product
slight increase in la¬
will
creased
Within six weeks the Federal
Re¬
serve
Banks had reversed their
reserve
1965,
way
a
forms
of
cut
St. Paul Fire & Marine
Insurance
Latest quotes?
pur-
of the dollar, rather
increase
consumer
(3) The
result, labor-
Prospect
First Bank Stock
The
set
dollar
be primarily
rise, moderately but
vastly
course,
by $10 billion.
soon
a
increased
bor-hours is through
lays
were
have
by
with such
—
American Hoist & Derrick
power
real
a
will
in
1957
shrinkage in the
than
our total national
nroduct by from 36 to 50% by that
time.
mium
few of the stocks
find markets for
activity
in
chasing
have expanded
obvious that some, economic down¬
turn was inevitable. Defense out¬
opportunity for alert investors.
Examples?
Business
records
the result of
working fo^ce will
estimates
mum
ter
By June, 1953, after the Korean
big factor in printing, publishing,
Minnesota
(i)
felt the election results mignt
drastically alter the immediate
outlook. There was far less dis-
extent
they'd borrowed the
that
investing, there's plenty
ore
.
economists,
to the
about
May,
food producer and
processor
meat-packing
by most
three conclu-
terms, but this will
only about 8%, and the labor
hours
Decline
Minnesota.
as
offered
not grow at all. As
MINNESOTA
Famous
re-
group between ages 25 and 45 will
*
in
1
creascs.
But
The
George C. Smith
nu-
comments
the
new
members
or
research
Details of Replies
Dr.
sions stand out:
In the next ten years our total
population will grow by 28 mil¬
lion persons—an increase of about
grow
and
mists
c a
(2)
Why is this important?
18%.
consultants
several
All
to
of
sale
of
policy of strin¬
plan budgets
ahead.
this is fine.
We have, immediately ahead, the prospect of
conies
from
McGraw-Hill
to
years
and
Government; the remaining 24
to nine specific questions
Dr. Dex-, on economic indicators, as well as
known
companies, 98 from other
firms, 56 from colleges
universities,
and
16
from
business
sponses
estimates of future bucmess plant
stress
mild inflation—
very
cause
me
ac¬
the
i
;
participating in
current survey include 27 in
financial organizations and insur-
of
u'dging
m e r
a
The economists
dollar
e c o n o
J
-
to-
polled.
from
well
in
the
tivity, accord¬
ing to the col¬
That question out of the way,
-
apply the brakes too hard."
furtjher growth of the
lective opinion
o f
t h e 221
Shortage
H.-:
expect a rise in employment
the early summer which will
ance
Capital Outlay. to Fill Labor
very
"I
economy."
the
business
monetary policy.
tice
a
in
•
de facto acceptance of
this round of inflation and
easing
of credit for
will
indicators
sion and decline, which may have
been brought about by the tighter
wages without inflation.
When it
rise
vigorously with any ensuing
tendency toward economic reces¬
longer-term
may
lead
in¬
'of
much
very
ward
in history,
year
in
V C';>; /
f: y.
danger that the Federal Reserve
account for
aging recent trend; the trend to¬
policies: By reducing
Food for
flation
threat
been
ened
the
een
Here's why
last
st
e a
However,
eliminated,
monetary authorities can deal
our
1
dollar terms.
have risen
year.
The cost
cost-of-living index.
crease
1
at
than
more
once
has
the best business
I'd like to take up a most encour¬
Federal Reserve Bank
use.
then,
inflation
by
gent monetary policy, with tight¬
is
econ-
credit in 1955
consumer
a
In slightly more
the Gross National
Product
Clearly,
survey
of leading economists by F. W.
they had risen Dodge Corporation, 1957 will be
year
again.
year
business activity.•
According to the annual
.
expenditures, only a few comnanies per hundred reported
budgets
for more than one year ahead. To¬
day, he reports it is common prac¬
Last
year's
expenditures
were
mostly financed by longterm, or "saved" funds. The ex¬
my.
a
a
survey-study reveals feeling that second half of
a slight decline or a
possible leveling off in
'.v' ;-?v 1 \
the
90.
prices
'■
economic outlook
survey.
1957 might see
1951.
This inflation—and let
again, it's
by F. W. Dodge Corp. in its annual
,
only be¬
$600 million and $1 billion.
above 100
day brings reports of
price increases that have not
had time to find their way
into the
,
longest maturity, had
dropped, briefly, minutely below
—and every
Let's
JBank Financed
below
Rise in business in 1957, with inflation
accounting for much
of the rise, is the collective opinion of 221
economists polled
\
excess
In the tight-money situation that
spring of 1953, Government bonds
living, which had risen only
3% in all the five years preceding,
has risen 2% in the last six months
expected to be at the annual rate
<>f $38 billion in the fourth quarter
uf this year.
the
in
new,
very
still
are
of
Dr. Smith's
of
of
equip¬
last year's record-
over
breaking $29 billion.
tember's
new
41/2%
a
billion
tween
modest
inflation.
On the one hand, farm
prices are well below the peak
they reached in early 1951. Whole¬
only
has
What
1956
add
me
Bank; and
Banks has ranged in 1956
prospects for 1957 are very once, but there's no corresponding
food, because the standard dy¬ increase in the supply of available
namic influence of all progressive goods until a long time afterward.
economies is now operating on a That is the situation we have now,
scale and with and, quite naturally, it has tended
an
intensity to produce inflation—in this case
let
Vice-President and Economist,
F. W. Dodge Corporation
(Incidentally, bank bor¬
rowing from the Federal Reserve
Our
before
$1.1
Coming Year
By DR. GEORGE CLINE SMITH
;
reserves.
of
never
Forecast for
they were eager to finance eco¬
nomic expansion with the remain¬
doubts
supply and
capital formation problems, to prevent good prospects for
1967. Despite bank financing-share in meeting this year's 30%
capital outlay increase over 1955, Dean Upgren notes we are
experiencing "a very mild inflation." Believes a stringent
monetary policy will not cause decline, and that monetary
heads can very vigorously deal with any recessionary tendency.
Writer is encouraged that savings will be larger than plant
expenditures, assuring adequate capital to overcome expected
labor force shortage; and reports slack in bank reserves mar¬
gin, and favorable bank liquidity ratio offers sufficient mone¬
tary supply outlook without "tinkering with gold."
i
immediately paid off
of their $1.4 billion debt
to the Federal Reserve
Dartmouth Business Dean, in looking ahead ten years,
will stem from inventory,
banks
almost all
Dartmouth
economic upsets
Continued Basis ess
than
$2Vz billion of addi¬
central-bank, or reserve,
the
By ARTHUR R. UPGREN*
I
buying Gov¬
they made
by
available to the commercial banks *
no
Dean, Amos Tuck
and
securities,
Thursday, November 15, 1956
...
Several
of
the economists,
the
Government
enough
too
jn
had
ment
is
gone
these
the
stood
at
general
far
two
comments: "I believe there is some
114.
The
economists
the
expect
index
through the first half
to
in
rise
of next year,
and then to level off. The median
forecast for the index is 116
by the
of
The range of sentiin
cast
end of
(some felt they had gone
expressed
Wholesale Prices: Much the
comments apply to the foreof wholesale prices. In June
BLS
wholesale price Index
*
far) and that some easing was
prospect.
(3)
same
rep-
resenting a wide range of interests, felt that tight money policies
of
year.
1958, and 117 by the middle
1957, with that figure remain-
.
!"g„
through the
™ g
Ai?ain
vear
there
me year. Again there
1S a
onS unuerlying feeling of
inflation, more pronounced than
in last year's
rise, and fully
90%
survey.
economists think
a
the
of the
index
will
third expect that
Continued
on
page
35
;
Volume 184
Number 5586... The Commercial and Financial Chronicle
(2075)
mated
Fresh Look at Construction:
Building Prospect Ahead
(1)
-
■v
that
tors
.
seems
"most
promising prospects. must be found
on
This
meeting
doubts
about
at
the
least
the
at
as
time
a
as
future
building industry
since
at
comes
are
the
of
end
ing
a
they could get and to
whatever price tags were set.
local
building
shortages
persist, buyers' market conditions
are appearing on all sides. Typipay
dropped
approximately
one
fourth
-
from
the
peak;
n
sketches,
failures
and
blueprints,
or
builder finds most
what the
contrac¬
g
tors
models
What the buyer wants, rather than
build-
among
i
cally, homes are now being sold
after completion rather than from
re-
nt postwar
ce
uninterrupted
conditions,
While
have
ex-
pedient to build, is now shaping
ma¬
new
home construction.
>
^
terials dealers
.T But this return of buyers'mar-
have
ket
reached
new
highs;
and
alarming. The
tion and mort-
funds
are
difficult to
very
up
you
a
am
sure
J Building has entered a transi¬
tion stage from postwar boom and
period marked
changes
and
growth opportunities.
well—whether
us
ested
in
and
consider
drying
a
mortgages,
rate
"normal"
which
in
considered
was-
the
attractive, especially
considering their longer maturity
Nevertheless, there is now defi¬
nitely a better balance'1 between
housing supply and demand.
Wider range of selection in new
homes
itself
actual
tends
to
slow
and
up
buying,
This development
with higher incomes provide an
important potential "plus" to the
home buying market aside from
Population and family
trends.
<
Fifth, although net
directly affects
homebuilding because many
wanting a new house are
finding that they have less equity
new
formations
families
ered
in their older house than expected
it
Fifth, the level of new home- and hence less cash to finance a
building has increased political new purchase.
significance because better homes
Third, construction and. mort¬
are of rising interest to voters and gage credit is widely recognized
to be tighter than any any time
changes in building activity directly affect the health of the na- since the end of World War II.
tional
The
mum
politically
level of
obviously
stated,
but
the
acceptable minihomebuilding
new
per
than in the
of
more
so
other
'
First,
the
f
for
in
recent
months,
of them:
some
tion
a
few years ago.
New Normal Level
With
this
review
of
the
can
homebuilding, we
return to the first ques¬
now
tion
raised
in
decline
earlier—is the
This announcement is not
also
last
Continued
offer to sell or a solicitation of an offer
offering is made only by the Prospectus.
an
The
on
to
buy these securities.
•
>
-
con¬
$50,000,000
The trend
larger families,
greater
population rnobilitv, growing sub¬
toward
ments
make decisions.
urbs,
To provide some perspective on
building activity and prospects, let
us consider the four questions now
expanding
and
businesses,
?_ew±: _resifienti.a]... a?_d„.■.
locations
to
most
frequently raised by
thoughtful individuals about this
industry: (1) Is the recent decline
is
a
Public Service Electric and Gas
familiar story
very
everyone.
First and
Second, noticeably higher living
standards
continue
to
their
take
demands
form
tion
Company
Refunding Mortgage Bonds, 4%% Series due 1986
Dated November
not
sign of
a
signal
that the housing boom is over? (2)
How much significance should be
attached to repair and moderniza¬
Due November 1, 1986
1, 1956
definitely accelerated the impact
of style obsolescence upon hous¬
in
homebuilding a
temporary weakness or
new
in
work
building
(3)
appraising
trends
How
much
and
modern
is
last?
of
(4)
changes
in
foreseen
What
which
building
others should
important
can
basis
watch?
existing housing
high among millions
This is not only be¬
space
limitations, but
very
families.
of
tions which have lost their desirability.
Interestingly enough,
Recent
Decline
in
these
New
problems
most
the
acute
seem
for
their first child
to
The
Prospectus may be obtained in any State in which this announcement is circulatedfrom only such
of the undersigned and other dealers as may lawfully offer these securities in such State.
HALSEY, STUART & CO.
COFFIN &. BURR
BEAR, STEARNS & CO.
INC.
EQUITABLE SECURITIES CORPORATION
when
MERRILL
HORNBLOWER &. WEEKS
LADENBURG, THALMANN &. CO.
L. F. ROTHSCHILD & CO.
LYNCH, PIERCE, FENNER &, BEANE
reaches school age
'
-
HAYDEN, STONE A CO.
become
families
Homebuilding a Sign of Tem¬
and again when the children be¬
porary Weakness or a Signal
come
teenagers.
However conthat
the
Housing.,Boom .Is,
sci ous mbther- and father Way; be
Over?
Price 101.257% and accrued interest
have
II
INCORPORATED
for
judging building
prospects for the year ahead and
perhaps longer.
Is
War
frequently because of obsolete de¬
sign, out-moded plumbing and
heating equipment, ancient kitch¬
ens, and similar items—plus loca-
and
After each of these questions has
been reviewed, we should have a
better
than
more
homes built since
World
Recent studies show that dis¬
still
cause
be
now
investors
new
of
satisfaction with
boom in commercial, educational,,
and other non-residential building
and
end
ing.
the
The
housing.
million
11
the
home¬
will
increased
in
merely for decent housing but for
prospects?
longer
the need for housing improvement. their children are almost
BAKER, WEEKS &
BAXTER, WILLIAMS & CO.
CO.
FRANCIS I. duPONT & CO.
GREGORY & SONS
ALEX. BROWN & SONS
REYNOLDS &, CO.
RITER &. CO.
of
At the outset it
the
was
transition
a
stated that
building industry has entered
boom
and
stage from
shortages to
postwar
a
period
certain
to
about, it."
new
and
tunities.
more
or
flection
dence
will
a
few moments
provide
that this
re¬
ample
evi¬
transition is
now
until
♦An
tbe
more
than
recently,
address
Nev
Yo»»k
increasing
"something
pres-
done
be
Such pressures are not
should remain
strong
less indefinitely.
|
SHEARSON, HAMMILL & CO.
STROUD & COMPANY
G. H. WALKER & CO.
INCORPORATED
AUCHINCLOSS, PARKER &
COOLEY & COMPANY
WILLIAM BLAIR & COMPANY
REDPATH
COURTS&CO.
R. S. DICKSON & COMPANY
IRAHAUPT&CO.
—
INCORPORATED
HIRSCH
&
CO.
THE
MILWAUKEE COMPANY
WM.
E. POLLOCK
&
CO., INC.
Third, the number of homes be¬
removed from the housing
is rising.
Obsolescence,
ing
underway.
For
exert
that
sure
of change and new growth opporEven
BURNHAM AND COMPANY
GOODBODY & CO.
GREEN, ELLIS & ANDERSON
market
decade,
and
building
was
a
enforcement of housing codes, and
demolitions
from
slum
KEAN, TAYLOR &
clearance
November 15, 1956
Mr. Hoadley before
Society of Security An-
by
aiysts, New York city, Nov. 8, 1956.
page
business, educa-^
related purposes
and highway programs
,
.
,
have com-
,
bined to
remove
variously esti-
CO.
McDONNELL & CO.
recent
homebuilding a
sign of temporary weakness or a
signal that the housing boom is
new
rec-
much
many
crosscurrents in
Tight
tinues to be very <*ref>t.
impending building develop¬
very carefully before we
is experiencing a plateau
family formations of about
700,000 to 800,000 annually, reduc¬
ing the pressure for additional
housing compared with the situa¬
may
but
The
waa
Cur¬
prospects are for little or no
in family formations for
In short, the
additional
for
need
living,
tional. and
current
apparent
ago.
in
of' any
case
marriages
years
nation
major industry.
forces
in
three to five years.
perhaps
severe,
still strong, but
are
There
peak
several
upturn
disagreement
policies has been
year,
underlying
home demand
homebuilding.
new family
longer consid¬
significant to note that the
reached
regarding the
precise degree to which general
monetary
restrictions
have
hit
new homebuilding, but no one can
question that the impact of such
cannot
be
precisely
may be close to one
million units
Yes,
be
is
rent
Liberalized gov- Here is a powerful depressant con¬
ernment policies can be expected tributing to the current slackening
in new
no
postwar
economy.
to bolster homebuilding somewhat
during periods of reduced demand.
are
very reliable barometer o2
short-run homebuilding demand,
a
evidence:
space
or
very
•
'
in building in
still
are
pro¬
1
Fourth, closely allied to financ¬
ing
difficulties,
many
building
petitive interest rates,
availability of funds.
years
complex administrative
cedures and related costs.
been
recent
higher rates,
at
even
less
seem
decade.
prewar
Let's consider
in
finding
are
5%
least
some¬
money
in the housing
field involves primarily non-com¬
inter¬
are
o n :
of interest in new homes. If
have visited any new tract
ordbreaking boom
new
operations
t i
markets
forces which have caused the
by
It will pay
we
profitable
investments-r-to
mean
u a
by the large numbers of
still inspecting the new
dwellings. This is true in virtually
all
sections of the
country.
In
fact, many of the same strong
.
a
i t
managers
such
tremendous
demands
for
short-term funds from businesses,
government,
and
farmers
that
level
pressed
that
this is not the time to reach hasty
conclusions.
I
shortages to
far-reaching
Nor does it
s
vestment
has climbed
a
families
fresh look at building pros¬
However, I
most
year-round use)
where in the range of 3% at pres¬
ent.
This is still well below the
from 1.6% in 1950 to
we^ designed homes in recent quite obviously some retarding
weeks, you must have been im- influences on hew housing have
Certainly it is appropriate for
security analysts and others to
pects.
consumer
today.
obtain in all sections of the nation,
take
same
in
be
not
holds
W. E. Hoadley, Jr.
construc¬
gage
should
conditions
for
if only because costs, including land, have edged
prospective purchasers take much upward to the point where nu¬
additional families will move into more time to shop around before merous prospective buyers have
the minimum home buying income making
a
final
decision.
The been "priced" out of the market.
brackets, and another 1,500,000 slightest evidence of price conces¬ The average new house selling
sions by builders and other also price has increased about $2,500
families will advance financially
increases the amount of shopping. during the past two years, reflect¬
to the point where
they can af¬
ford a home in the
Second, many oMer homes are ing somewhat larger units but also
average cur¬
rent price bracket. These families
becoming more difficult to sell. sharply higher costs.
take what
starts
into
brack¬
$6,000-$7,000. During the
present
year,
roughly 1,500,000
prospective buyers pretty much to
New hous-
the urgency to buy has
sharply reduced by the in¬
availability of housing the Veterans' Administration. The
units.
Leaving completely aside result is that in the face of gener¬
the quality of homes, the national ally advancing interest rates many
Vacancy rate among single family mortgages have become unattrac¬
homes (available for rent or sale tive to investors. In addition, in¬
of
come
space,
of World War
II.
market"
at
First,
$3,500 per year
for the purchase of a
minimum
type
dwelling, under
current
c^st-price-financing con¬
ditions.
The typical 1956 home,
selling for slightly under $15,000,
iregularly requires an annual in¬
Shortages of living space, business
materials, and labor forced
time
any
by almost
marked
"sellers'
many
of
come
vestiges of war-time price control
set
interest ceilings on govern-^
ment guaranteed mortgages and
particularly those administered by.
been
is necessary
selective basis."
when there
thous¬
annually
strongpurchase of homes.
It is generally agreed that an in¬
,
:
families
Slowed-Down
Housing
creased
base for actual
one million new
likely to persist over the coming year :*\
and decade —a relatively high level compared to top post-:
war years' experience;
(2) there is a large repair-moderniza- L
tion market which should continue to grow; (3) 1957 non¬
residential construction will be slightly ahead of 1956 with
a crest
appearing within 12 to 18 months for commercial buildings; and (4) changes are inescapable and can occur more
rapidly in next few years than ever before due to new "era"
of selling and merchandising now under way. Advises inves-
:
of
middle and higner income
ets provides a continuing
"normal" Homebuilding level of
a new
starts per year
of hundreds of
movement
In assaying the crosscurrents in Homebuilding, Mr. Hoadley
ventures the following "fresh look" at
building prospects:
v
—
Fourth, the rise in income gen¬
and the
accompanying
ands
*
of
nation's
the
erally
Treasurer, Armstrong Cork Company, Lancaster, Pa.
,
from
coming months and years.
By WALTER E. HOADLEY, JR.*
*
This number
year,
withdrawals
housing supply should increase in
The
Reasons for
(100,000 to 250,000) housing
units-per'
11
VAN ALSTYNE, NOEL & CO.
26
12
The Commercial and Financial Chronicle
(2076)
Thursday, November 15, 1956
.,.
s.
acted relatively
The Value ofPxofessional
the steel
clined
industry s
JOHN
By
Vice-President,
New
Midland
Marine
Trust
SULLIVAN*
P.
Marine
Management
Midland
York
official
Company,
Trust
City
investment
in investment de¬
became market lead¬
only one example
to show the contrary price acaon
of the stocks to the earnings per¬
formance of the industry,
d we
mind, selection, and greater objectivity and knowledge
sessed
by professional investment
ments in
selling investment
by the
ments
guidance based
zation,
trust
represent
of
one
is
to
funds
organi¬
primary
an
whose
handle
and
counselor
investment
act
in¬
does
correctly
an
lects
the
ment
as
to
jectives
to
the
in
Correlation
The
Sulhvan
P.
to
serving
sound
and
very
a
economic
.
instances,
fundamental
of the stock
investment
historical
afford
to
business
of
ket
counsel
organiza¬
tion.
that the
investors is
well
show
of
the
precise
no
how very dangerous
individual.
dices
of
it
is
every
the
engaged
one
We
know
from
ex¬
that this peace of mind
cannot be achieved by most peo¬
ple by self investing. Investment
peace of mind can
be achieved
to
a
great extent
through the
perience
elimination
of
the
of "se¬
is, the selection of
the right investment vehicles to
achieve
the
proper
investment
objective.
lection."
worry
That
of
mar¬
extended
for
responsi¬
in
the investment profession to point
out to the average investor that
the primary function of capital,
whether
small
or
large,
is to
achieve
peace
of mind for the
believe
trend
the stock
as
that
periods there is
that
know
managers
studies
as
will
Professional
market.
it is to
gen¬
eralize when discussing the trend
For
business.
of
instance,
we
know
how
important
it is to
recognize that since 1946 there
uniform trend to the
has been
no
business
picture.
that
While
in¬
the
the
measure
overall
business
activity of our economy
have registered new highs there
were many times during these pe¬
riods
when
not
were
individual
of
fact,
many
depression
We
and
as
matter
a
experiencing
characteristics.
dividual
his
in
| capital
attempting
through
to
lections.
.r
Investor
invest
hisown
Cannot
.
se¬
H-t
the
first
and
the
fundamental mistake an in¬
dividual investor makes is his in¬
ability to accurately diagnose his
own
investment
requirements.
The
for
reason
money
this
is:
When
is involved emotions
usu¬
ally are involved: When emotions
are
involved
the
individual
can
rarely distinguish between needs
and desires and in most instances
desire dominates rather than in¬
vestment
is
needs.
difficult
achieve
peace
if
Consequently, it
not
wrong
for
his
success
one
needs.
If
an
group.
of
of
a
is
alone
show
not
the
address
Vance
by
Sanders
Mr.
Seminar,
City, Nov. 13, 1956.
a
New
by
York
others
the
instance,
have
market.
indication
strates
out¬
is
This
that
selection
that
investment
There
stock
We
is
the
key
business
of
followed
by
and
equity values.
To keep abreast of these chang¬
ing conditions requires continuous
supervision of the individual in¬
vestments held as well as seeking
investment
new
This
opportunities.
only
can
effective investment
research organization devoting all
through
its
these
in
efforts
full
a
an
directions
the
steel
industry,
the industry
when
months
and
the
enjoyed
steel
were
experiencing
can¬
not be achieved
investor
self
miss
or
by the individual
on
a
part time hit
basis
by treating the
nor
investment of hard earned money
as
one
would the pursuit of a
hobby,
part-time affair at best.
a
Illustration
Perfect
A
We
than
need
not
further
back
go
the
past year to find
illustration
of
two
fect
the
per¬
a
leading
indus ry
same
good
earnings
a
were
ported the steel stocks
other
could
characterized
be
high
as
grade investments, it would have
difficult for the average in¬
to
understand the forces
been
vestor
which" brought about the
in
earnings
results.
at work
difference
Unfortunately,
the average
in¬
vestor
only became aware that
one
company
doing
was
poorly earningswise after it
already
been
reflected
in
price of the stock.
Since
it
is
obvious
whole
a
and
no
all
function
within
market, selection is
This
tant.
is
so
a
that
in¬
of
should
de¬
termine
the
a
investment
results
not
general trend of business
or
whole.
stock
It
market
has
ac¬
action
been
as
demon¬
ness
activity
stock
ample
market,
and
prices
there
opportunities
c>n
have
to
the
been
enhance
capital through right selections
as
their
of
do not have
that
one
and
organizations to invest their trust
funds through
the purchase of
be
which
is
by a large
investment institution.
Participa¬
in
tion
supervised
this
established
value
ment
ment counsel
gained
investment
stature
not
wePh7 feohSidered
investments
that
have descended into questionable
investment
more
by virtue
performance.
stature
recent
of
duce losses for investors who be¬
lieve
that
security may be put
forgotten.
Also, the
tendency to regard and retain a
high-quality
security
as
one
would a family heirloom becomes
equally dangerous in our ever
changing dynamic economy.
It seems
likely that the eco¬
nomic,
political,
scientific
and
social changes that have been oc¬
curring in the past 10 years will
to
enumerated
pitfalls
discussion
acting
of
um
smaller
of
as
his
means
invest¬
own
avoidable.
are
obvious way is
by
encountered
and
individual
the
the vari¬
in this
One
through the medi¬
investment
companies
by
pooling small amounts of capital
into
larger funds in
order
to
achieve proper representation and
diversification. Organizations such
as
these, protect the individual
through
experienced
judgment,
and offers in addition the benefits
of
supervision/' fcustodianship and
^areftil research and
coitiprehehThe investment com¬
pany, a relatively new investment
medium on our country, will con¬
tinue to grow because of the ob¬
viously
tremendous
and
real
service that it renders through its
important functions.
sive study.
Phila. Inv. Women Meet
a
and
continue
of
invest¬
Summary
industry or company, it may be
before this is fully recog¬
nized by the market.
which
result
tcday
In summary, I believe
„
when
have
given
supervision.
investment characteristics of that
industries today that
to
This fund
continuous
of
ous
are
limited
the
as
recognition
the
changes are
taking place within an industry
or a company which will alter the
There
i3
fund
only bona fide funds.
the
years
fund
diversified
this
in
units
Patience
basic
Fiduciary
a
Fund, the purpose being to permit
banks
without research
be
When
tience.
has
there
State
established
was
Research
must
Small banks which
smaller
opportunistic, but indicates that
aggressive approach to invest¬
ment problems requires a happy
tempering of long-term concepts
with near-term opportunities.
It
re¬
to
no reason
an
York
New
In
been
research
should not
adequate
adequate research
organization could utilize to bet¬
ter advantage the medium of in¬
vestment company shares in small
funds in preference to selection
without
proper
and
continuous
supervision.
approach, and not relinquish it for
temporary opportunistic advan¬
tages. This should not be taken
mean
with
trust accounts.
be the investment analysts
responsibility to retain the basic
to
an
organization.
investment company shares in
use
will
investment
counsel
search facilities have
the
of investors to move
out of quality stocks, which have
had
spectacular rises, into de¬
pressed secondary issues of ques¬
tionable quality, in order to keep
participating in a rising market.
tendency
fundamental
personal services of
banks
Large
most impor¬
because
the
investment
bull
individual
evaluation
issues
approach,
for those investors who cannot af¬
ford
over¬
adtivity
spite the advanced level of busi¬
re¬
look
away
in" tivity
group
investors tend to
the fact that, during
Many
tive, and some issues that are to¬
day considered blue chips have
selection of indus¬
of
shares have been excellent media
Overlook
Investors
What
One may be certain that some
Companies, to study stock market of
today's popular blue chips will
groups
individually,
and
each
eventually lose investment stat¬
stock independently.
It will be
ure, fall by the wayside, and pro¬
the wisdom of
and
.
soundness
no
analyst to study trends and de¬
velopments within the individual
companies
have
out¬
research > organizations
demonstrated
ability
and
with
action for them.
many years ago were
characterized as purely specu'a-
investment
managed in¬
standing
in a
position to take effective invest¬
emerged
f romf within *' these
single! stock grolips/ Contrailw/se, there ate
the
far less
a
experience.
Because the better
changing conditions, and
covering market grOilrpsthat1
issues, it becomes prime-quality
of.
knowledge of the trend
vestment
pattern
of
se¬
investors,
who,
own funds,
be¬
likely to have
fortunate
handing
the
there is
pattern covering business
as
had
on
research
other device for
their
a
are
their investment will remain alert
.
the
strated in the recent past that de¬
being
ket
feel
those
based
of business and/or the stock mar¬
was
many
as a
that
is
cess
or¬
should
recognized that the
experiencing rap¬ handling or management of capi¬
idly
declining
earnings.
Since tal is far more likely to be suc¬
both these companies were lead¬
cessful if accompanied by the ex¬
ers
in
their
industry and both ercise of both research and pa¬
the
dividual
high
researcn
investors
confident
peak earnings while
companies
very
investment
ganization,
experi¬
was
guidance
Those
managing
rewarding. Having the benefits of
professional selection through an
effective
be
never
lieve all that is necessary for suc¬
most
an
the
Yet while these
the
Though this temptation will be
on the part of the public, it
Investment peace of mind
tries
very
a
be
will
avoid mis lakes.
valuable in pro¬
capital of investors
the
lection.
to
always remain
fundamental
into the future, selection
through investment research
on
ward
as
tecting
of both the
jected
continue
satisfactory sub¬
has proven more
great
.
not
price movement of the in¬
dustry's securities. This was par¬
ticularly true of an industry such
Investment
effective
than has any
should
a
advisors
vestment
business and stock market is pro¬
basis.
time
up¬
an
achieved
be
be
able wholly to
are
and
where
in
emerge
a
If this past pattern
There will
margin of error in investment
analysis, and even the most com¬
petent group of professional in¬
period of decline in opera¬
activity while others are
a
can
to
demon¬
success.
industries
could
industries
some
in those
a
decline which may be
expected to continue.
always cross cur¬
rents at work in today's dynamic
economy which affect the course
the
guarantee
high level of operations for
before
while
performed
action
case
the
histories
objective
Sullivan
to
participated in the recent bull
market
market
.
earnings was
apd
necessarily
For
market.
company
the upward trend of an industry's
activities
level of .earnings.
*An
and
success.
case
pattern
companies',.'securities have
many
a new
knowledge of the
1953
individual
stock
know there
we
uniform
one
Example
as an
business
investment
even
the
Yet,
no
encing
;-v
demonstrate
can
market
been
where
better
or
to
is pursuing
investment
well
as
or
impossible
investment
of mind if
the
act
histories that
trend
has
even
industries
Steel Industry
We
experience.
re¬
investment
favorable
a
in
pricewise than the other equities
Probably
most
will
in the same
^
Select
in
predic¬
will
of the market trend
sult
not
correct
a
companies
experiencing a high level of op¬
Selection Key to Success
eration, many companies within
We believe "selection" is the those industries were not experi¬
key to investment success.
encing the same results. There¬
The value of selection through fore, studies of our recent past
fundamental and effective invest¬ economic history demonstrate the
ment research has been demon¬ value of the right selection when
strated during the
past decade; choosing the industries for invest¬
that is becoming evident to more ment participation. But more im¬
and more investors. Nevertheless, portant is the right selection of
there still is a tremendous edu¬ those companies within the indus¬
cational job to be done to dem¬ tries which will perform equally
well or better than the industry
onstrate this truth.
*
or other companies within the in We shall try to illustrate the
advantages of professional invest¬ dustry with respect to sales, earn¬
ment
guidance, over the disad¬ ings, etc. Most important is the
selection of the individual issues
vantage encountered by an in¬
which
that
were
that
aware
individual
which
the
fair
a
level of general business activity
to call the turns in the stock
market
etc." may
industries
of
adjustment
Re¬
to
in
or
stitute.
yields,
picture particularly the roll¬
ness
ing
results
and
companies
that
perform most favorably.
No at¬
tempt to chart the precise future
past behavior of the busi¬
The
effective
it
industries
se¬
influence selection.
investor is
the average
by
industries
were
type
also
are
when
tion
participating in this high
level of business
This
not entirely
may
appraisal,
ings
tional
mistake
values.
or
may
only
percentage participation
depend upon percentage increase
in earnings or dividends.
Other
such as price times earn¬
from
Trend
is
that
factors
a
fundamental
assume
corre¬
We know
lation between the two.
We
of busi¬
trend
security
affect
lection
research.
sound,
on
search
extent
We
of business which
trend
the
ment
will correlate with the trend
services
personal
investment
bility
up
sides
based
know
other factors be¬
many
Selection
key to successful invest¬
experience
is
selection,
ment
this
proved
many
Stresses
The
while
up
.
made
to
to
most
next
assume
ness
are
most
Stock
With
mistake made by self
John
or¬
the
utilize
was
have
conclusively.
are
entering
another
Market
function for those people who can
an
words,
Market
Another
are
costly
Business
in¬
essential
mistakes
which
securities.
vestment
ganizations
each
namely,
by stat¬
that we
company
in
inherent
Therefore, it is difficult
outset
believe
ob¬
investment
various
determine
more
the
at
his
to
the
investor,
selecting the wrong in¬
vestment objective or the wrong
many
am
not,
other
In
rise
in¬
of an inability
differentiate
be¬
characteristics
that
offering
selling points
to competitors.
May I clarify
achieve
to
accurately
tween
occur
his
because
to
ing
least
the
differ¬
ence
of nearly 70%.
There was
good reason for this variation but
the average uninformed investor
of invest¬
type
proper
security.
this
had
48%.
research
diagnose
vehicles
it
to
that
vestment
requirements, then our
experience suggests he rarely se¬
individuals,
corporations,
foundations,
charities, etc.,
I
com¬
other device for selection."
vestment
may
from
recovered
stocks
would not have detected it.
I
functions
com-
behavior, and states "in-
effective fundamental
steel
highs of
1954, the stock that had the great¬
est rise among a selected group of
better known steel equities ap¬
preciated 117% v/hereas the stock,
valuable in protecting the capital of investors
than has any
Since
on
the
prove
we
their low of 1953 to their
shares to individual self
company
and past economic
has proven more
-
pos¬
studies
the value of se¬
would find that when
an
was
the trend of the market was down.
Past
there
as
only look back to the
to
realize the
business
of
trend
on
weeks
few
point
this
use
"
need
We
last
:
of our leading In¬
dustrial companies, which places
even
greater emphasis qn selec¬
tion through research.
Behavior
Recent
Past
illus¬
to
to
lection,
argu¬
investor, cites typical illustration,
average
recent
on
vestment
-
prime
as
Mr. Sullivan describes fundamental mistakes
investors.
V mitted
managers,
is
effects
wrong
selections.
steel
the
capital through
lose
as
were
This
ers.
tration
of
peace
of
well
and
mand,
continue
stresses
equities
the
industry
Investment
Yet, when
operations de¬
poor.
to
occur
over
the
next
PHILADELPHIA, Pa. —Miss
Margaret McKpight, Chairman of
the
Entertainment
Committee
of
the
Investment Women's Club
of
Philadelphia,
ond dinner
announces
meeting of the
tcr be held at the
J.
season
Barclay Hotel on
Monday(_ evening,
Maurice
the sec¬
j
£Iov. .19.
decade,
Achievement, Inc. will speak
so
"Future
or two, and these could be
dynamic as to have profound
Mr.
Kelly of the Junior
Unlimited "
on
Volume 184
Number 5586
..
The Commercial and Financial Chronicle
.
(2077)' 13
attractive real estate uncertain future deposit trends or
Savings ,banks were a high level of Government bond
of
supply
mortgages.
quick
idend
Mr. Ihlefeld presents program aimed at savings bank liquidity
'which includes:
(1) 5-10% of deposits primary'liquidity
commitments to amortization
-
Author defines
•
advises
:
and
of
sources
cently
offers
->•-
to
excellent prospect
a
«
i
,
.,
•
...
,
■
"
ity
....
.
depositors to file notice
specified
a
the
to
bank
savings
development
■
;
.
;
.
recent
in
when
f.
JL
th
liquidity,
has
been
commit-
ments
of
number
days
in
deposit losses.
due .at earmarked
fallen
d(D0Sit trend was
serious
cast
doubt
mot
its
ns
upon
at
could
substantia1
avInaMe
be sold
not
except
!avin«
value. Moreover, Mr. Allan Sproul,
fhpavv
when President of the Federal Re-
™?(d* '"J?
mortgage
serve
Bank of New York, stated
invoking notice of withdrawal might be just the wrong
loans. This has
introduced
.
a
.
de-
way to deal with a particular situation."
At
all
events, savings banks
velopment has
want to be in position at all times
been
out deposits promptly
request cf the depositors.
liquidity
new
requirement
A
second
t h e-to
on
pay
an
their
ket
mar-
This being the
price vul-'
has
with
ruled
sound
to
maintain
Througn
time
as
such
of
portion
a
liquid 'funds
de-
deposits' a
rate
Us
? ..Td^v
q"
y'
°ne o£ these is warehousing
ma'angements withe
banks. When a commercial bank
takfs up mortgages for whicn a
flings bank is committed and
^fb^rcb?alnsPa del/y In
take
forward
up
such
lonler avai^
net deposit loss
a
re-
U' S. Government securities. These
for
are subject to market fluctuations.
rl8,kless investments,, however,
'"'!i
the c]oser they
maturity
t0
to ds-' the less the possibility of adverse
to enter into heavy forward com- maturing within one year,
rr.itmmts. Also todays ample
Cash on hand and in .banks and
prospective supply of mortgage u. S. Government obligations maloans and'corporate bonds s..ou.J t .
ithi
e
* constitute
assure a bank that it will be ab.c the Primary liquidity reserve of a
nvPsWnt
.
.
to
no
Posits reaches a high level, so that price .fluctuations. The risk .of
expansion of savings bank price decline is negligible for
^oltgale Portfolios necessarily Treasury bills, and quite small for
?l0WS, d°w' ulerC 7 leSS JeaSJn cthcr U- s- Treasury obligations
comon
-
"
to obtain oesirable mvestn
savings
moHga"! ong1? advance
?•
kJ«
f-hi?1116 W
^
re
nr
it
case
State
obtained
1 ? ,•
,
linniHa?
must be
investments rnav be
nerability of recognized that the decision to
?
nrrttiH^ mnnav fnr available.
expected to provide mon^y foi
wh^n
savings banks' withdraw deposits from a savings
+
p^nrt^PPsmirini
WlfKn mortgage commitments
ni
bond portfo- bank
is entirely within the dis- taking up
5S are limited in volume to prospeclino
Thic
ccntinn
rvf
^nncitnrc
anrl
not
rrf
01 at the end Of the Warehousing flve amorti
lios. This has cretion of depositors, and not of U1 ?L LUC C11U
wan-"uuj,"b tjve amortization receipts for the
greater
York
consistent
- of
return can 'be
by savings banks on a
part of the cash held as a liquid-
The effectiveness
meaing aratio of mortgages
net deposit loss.
As the
that
bank
imfAsaee
XluTdrain
sav-
by
are
mettins
loss
loss
ings banks for
banks
be main- posits.
commitments
mortgage
ceintf
advance
cuHties
may
deittdftd
on
provides ho in-
principles of banking for savings
device
a
that
corasid-V'
of this device to protect the liquidity of a savings bank during ity reserve. Savings Banks Trust
a period of net- deposit losses is Company has been accepting time
lessened to the extent that such deposits from New York savings
receipts are earmarked to take up banks since 1937
mortgage commitments.
When
N
t t
.
' ,
,
.
.
.
particularly $1,000 of amortization receipts are ances with banks come short-term
years,
have
they
wh
as
and
banks
it Is
tained in a period of heavy net material
^
.
device has been so unfavorable as
ward
One
of
withdrawals. But our studies indicate that experience with this
making of for-
affected
;
.
To build up mortgage portfolios
rapidly, it was necessary s to
make heavy forward commitments
to make mortgage loans over lpng
periods ahead. Tnese commitments
have brought to savings-banks an
additional major need for liquid-
liquidity, and
of investments.,/
,
.
developments during recent years have profoundly
1950;.
as
often been referred to
as
;
so
• In
counseling against forward commitment contracts, points out
present ample supply of government bonds and mortgage
v
that
so
be'
can
liquidity needs,
hand
on
New
come.
of cash
purposes
only--40%-as re- by which-liquidity
with
compared
against enforcing withdrawal notification clause.
Far-rcac. mg
To- ability for other
deposits,
of
two-thirds
almost
receipts; (3) 10-15% of deposits :
various kinds
depositors.
paid
"'Cash
deposit in
mortgages held by the na- inflow from mortgage repayments,
tion's mutual savings banks are The amortizing mortgage loan has
secondary reserves to absorb below-cost sales' losses; and
(4) lhnitin; borrowing to emergency liquidity needs only.
•
rates
savings bank
ered available for
•
cay,
offset possible deposit losses; (2) limiting mortgage
reserve to
•
•
to the
not all such funds
opportunity to add higher earning
Even where commitments are
assets to their
portfolios, which so limited it must be recognized
has enabled them to increase div- that they will limit future avail-
y-;,:v ®y august ihlefeld*
President, Savings Banks Trust Company, New York City
;
to ..take advantage :bf this prices.
dered
This
bank.
primary
re-
scrve assures t^e ability cf a savbank
ings
deposit
net
meet
to
withdrawals whenever they may
>.
occur.
,
,,
August
Ihlefeld
lessened
the
usefulness
bonds
Government
as
of
a
U.
of
source
mize
Because the term has
of
number
a
seek to- mini-
can
the possibility of a
net loss
of deposits by improving its serv-
liquidity.
,
savings bank
a
At best,
management.
bank's
the
S.
opening a branch or paying
attractive rate of divide nd.
Liquidity for a savings bank But economic developments in the
means
the possession of cash, or country as a whole or in particuassets that can readily be turned tar
communities, or intensified
meanings,
we
definition
a
into
cash
of
ice,
might begin with
liquidity.
without
a more
material
loss,
The
liqui:"ity position of a savings bank is continuously modified by its cash flow.
An excess
of
cash
receipts over disbursements
in
need for
time
or
of
excess
receipts
for
year,
a
provides an opportunity to
up cash assets.
Conversely,
build
an
as
lessens the
liquidity; and at the same
quarter
a
given period, such
a
cash
both
payments
increases
over
the
need
liquidity and shrinks the volcash
of
ume
sions.
ate
There
is
liquidity shown
condition
there
the
is
traction
occur
Secondly,
addition
from
over
immedi-
the bank's
on
statement.
to
sub-
or
that
liquidity
will
period of time caused
a
savings
a
will
botn
the
t
toe
of
amount
available to
be
subject to
a
Hence,
cash
and
equivalent shown
on
a
savings
bank s condition statement is trie
oni,
certain
upon
Which
at
count
A
a
the management
can
time.
given
reserve is an effective source of
iiqUjdity
in periods of high in-
deposits
alm03t umntsrruptrd upward
trend, most banks have encounlered losses of deposits for shorter
longer periods, due to local condihons. The vary 1 ng1 zeand yle-
(1) Net withdrawals of deposits,
mitments
that
attempt
formula
£,r
to formulate a rigid
liquioity to meet pos-
future net losges o{
gible
fall
jj
f0r
a
th-
f
d
and
£
5%
o£
would
in
differ
character
restrve
3%% Equipment
*
••
0
d
g
Government
obiiga.
-.r/Tor-
the
possibility
of
losses
net
'
>
call
for
separate analysis.
10%.
say
T
o
be
■
f
basic
quidity
bank
and
requirement:of
is to meet net
drawa
s
True,
on
K-
a
savings
deposit with-
demand.
An
savings banks,
address
Fall
like
com-
by Mr. Ihlefeld before the
Convention
Banks
A
York,
White
sociation
cf
Sulphur
:
mature
i
>
4
i
i
of
the
the
State
Springs,
1956.
Savings
of
New
Nov.
nn
nnno
V 9
,
8,'
Trust Certificates
(Philadelphia Plan)
N
„
.
^507,000 annually
.t,
»,
November 15, 1957 to 1971, inclusive
guaranteed unconditionally as to payment of par value and dividends
endorsement by Louisville and Nashville Railroad Company
by
MATURITIES AND YIELDS
"
i
(Accrued interest to be added)
3.7 5 %
1957
3.8 5
1958
■
1959'
3.875%
1960-71
-
3.90
.
Issuance and sale
liquidity need of
The
sav¬
ings banks is to have cash to take
authorization by the Interstate Commerce Commission.
State in which this announcement is circulatedfrom only
oj these Certificates are subject to
()fferin% Circular may be obtained in any
such
of the undersigned and other dealers as may
.
lawfully offer these securities in such State.
mortgage commitments as they
due.
a
HALSEY, STUART &. CO. INC.
different type of
very
requirement from liquidity to meet
mortgag^^commUments3^^
oi toe
bank's management, and
Qf depositors.
Management is
to take steps at any time to
DICK &.
R. W.
MERLE-SMITH
BAXTER, WILLIAMS 4.
CO.
not
free
limit
WM. E.
FREEMAN &. COMPANY
POLLOCK &. CO., INC.
mr,
1 "e
years
hnildinfy
"Uliaing
made
hoom ?
^
DOOm
avai.able
a
of
OI
rfrent
Ttceni
plentiful
Novemlxr 14, 1956.
GREGORY 4 SONS
SHEARSON, HAMMILL 4 CO.
McMASTER HUTCHINSON 4
redUCe, the Volume of SUCh
Commitments for the future.
L. F. ROTHSCHILD 4 CO.
PRESSPRICH &. CO.
savings
mercial banks, can require savings
63rd
1
second
This is
oresent
ever
rnn+imivrf
oI
Commitments
A
up
Withdrawals
The
.'
Liquidity for Mortgage
fall
Liquidity for Net Deposit
*
i
To
mainly jn the form of eash
duc from banks, but could iu-
com¬
objectives
and
£UCh issues can be sold only
substantial loss, so that they
cease j.0 provide a reliable source
^ liquidity.
However, mainteaj.
bc
f
se
Thjs
its.
ke'pt
due.
liquidity
j.ere£{. rates iike dle present, however>
Equipment Trust, Series P
deposits.
ordinary prudence
minimum liquidity re-
However,
...
two
These
a
Louisville and Nashville Railroad
individual
of
experience
today to be in position to
two major types of disbursements.,
maturing within one year, should
These are:
be larger, up to a maximum of
mortgage
relatively
secondary
are
such
$7,605,000
,
liquidity reserve of cash, due from
make,}banks and Government securities
up
bonds
price,
of
savings bank wants liquidity
(2) Taking
,
in
,
,
deposits in the future, this primary
,
.
Cash on hand and balances with
banks comprise the most certain
source. In the case ot balances
with depositary banks, rowevei,
minimum balances must be mmntained as a practical matter 101
assured by contractual receipts normal bank operations and to
and would not be dependent on compensate them for services ren-
iiqmdit„
of
source
ba£k-
an
provide
wide margin
e
ward commitments to make mortgage loans is to limit these commitments to an amount equal to
amortization receipts on mortgage
loans that a bank expects over a
given period of time. Cash to take
up
commitments would thus be
j-jgh
niutuai savings banks have shown
casn
of cash receipts and
disbursements, even for short pecuor.
j_onger_term
fire insurance.
.
it, forecasts
rioos, are
or
aggregate
,
to
determine
ot
hquid.ty
amount
will
at
caj
eventually
and
needed
bank's
There are several sources ot
liquidity available to a savings
savings banks makes it unrealistic
,
While
While
posit
by the bank's cash flow.
flow
liability
out
the
first
When interest rates are low and
bank's liquidity from becoming
seriously impaired by heavy for-
a
would not think of being with¬
we
thus has two dimen-
^
The most certain way to protect
savings
other
from
. The
term "secondary reserve"
period, with occasional resort 1<> has been used by commercial
A second expedient is to liqui- warehousing when needed, they banks to describe holdings of near
cate other investments in advance will no longer give rise to liqui..- cash assets such as prime shortof the maturing of mortgage com- ity problems for savings banks, term marketable securities. Hown it ments. However, this can prove although
mortgage repayments ever, in the case of savings banks,
quite costly at times wnen Gov- then no longer contribute to fu- a secondary reserve has hitherto
ernment and othf r security prices ture liquidity.
been provided mainly by interare severely expressed, as is now
mediate and long-term Governthe case.
Sources of Liquidity. The Primary ments
Pcrl0cl-
media, cculd result in a net loss
of deposits at any time.
It is true that sayings banks in
New York State failed to experience
an increase in deposits
in
only three years during the present century. But we cannot ignore
an adverse contingency because it
has occurred rarely or not at all
to date. A great many of us never
had an auto accident or a fire, yet
held.
assets
Liquidity
competition
The Secondary Liquidity Reserve
CO.
PD
14
(2078)
The Commercial
Cobleigh
Providing Thrift Sezvice
With Better Savings Banks
J'
Chairman of the Board, The Seamen's
|
William
Investors
for
the
Savings
State of New
of
York
W
tion
bill.
The
several
and
branch
bill
once
to
tinuing
pass.
mortgage
pa rticination
are,
other
We filed memoranda
in
opposi¬
11
bills affecting savings
adversely, and I am happy
report that all of those bills
to
banks
killed in committee. We also
opposed some 16 bills and resolu¬
tions which would have affected
r.dversely
life
nies,
and,
bank
life
incidentally,
savings
insurance, and all of
insurance
compa¬
resolutions
and
committee.
We
also
supported
bills
affecting us either
directly or indirectly but intro¬
duced by others, and all of these
I
passed
both
will not
J 356
did
houses.
into detail
go
on
our
legislative
want
activities, but I
point out that the
to
Association had been working ef¬
fectively on behalf of member
banks, even though the number of
bills actually sponsored
{.mall.
was
very
One
piece of legislation passed
at
the
1956 session, which
may
Well
prove
to be of great im¬
portance, was the bill creating the
Mortgage
Facilities
Corporation
designed to render financial aid
in
construction, rehabilitation, or
purchase of housing accommoda¬
tions in blighted or
deteriorating
urban
3
by
areas
loans
mortgage
omic
basis
i?
insured
by
making
on
up
praised value,
or
in
the
first
sound
a
to
80%
of
Gov¬
or
its agency.
I would
congratulate three* sav¬
bankers recently appointed
by the Governor to the Board of
this
corporation:
Charles
R.
Die-
bold, President of The Western
^Savings Bank of Buffalo; James
V?.
Rooney, Senior Vice-President'
<>t
The
Emigrant, Industrial Sav¬
ings Bank; and Robeft W. Sparks,
First Vice-President of The Bowcry
Savings Bank.
of
and
staff
mittee members have been
spend¬
ing a great deal of their time in
J
ecent
the
months in
prospective
Banking
On
leged
revision
Law.
Nov.
to
connection with
8
we
hear
a
had
been
the
report
by Mr.
oseph A. Kaiser as Chairman of
tbe Special Committee to
Cooper-
lion
by
Mr.
Michalte*4
Savings AssociaMeeting, -White Sulphur Springs. Va.
l.cv. 7,
to
prove
in
be
annals
of
1956.
Pittsburgh,
Chairman
of
will
us
w
h
The
McKelvy & Co.,
i
o
the
of
Brooke
Mr.
none
retiring
s
of
as
Board.
entered
200
the securi-
from
tion
with
Princeton
&
is
Brooke
President
*
of
the
Philadelphia Securities Association, a Governor of the Bond Club
Philadelphia.
of
He has served
Corp.
has
an-
its
to
Stratford
in 1955,
size by 50%.
will
permit
the
opened
was
increasing
its
addition
tributor of food and liquor, has
reported sharp business gains for
the fiscal year ended June 30,
1956.
The - company,
which
is
closely held, had never revealed
its operations to the public until
January
of this
as
produces
Committee No. 12, and is a former
S-56 helicopters, while the Sikor- pany's A-l
rate
Chairman of Educational Commit-
I
tee
sky S-58 helicopter is manufactured at the Bridgeport plant.
to
be
of
less
than
first-
importance. But since then,
believe, it has become evident
that
the
issue
whether
freed
is
savings
from
not
shall
strictions. The issue is
mucn
&
Co.,
elected
the
vania and New
public
effectively
the brazen self-interest of
small
a
least
at
banker has
one
far
gone so
to
as
-
-
•
a
im¬
Sikorsky
'
*"/*:/
Mr
im.
Brooke
merit
Philadelphia, ! has
a
{.•
11
*
is
r.
range
member of District
said
ha<?
of
part
7
that
the
thp
commercial
for
banks,
when
friends
of
As
Diannine
long-
~ program
v
and
-$r»3r'
Ur?eiT\/r♦a!
S ifl0catTd
.
out
commercial
our
are
going
bank
so
admirably?
Savings Banks to Stay
though,
I
think
we
must face the fact that some commerical banks consider us
strictly
dispensable.
Savings banks have
thrifty people of New
the
served
York State for 137
years.
In very
recent
years
commercial
many
banks have becorfte interested in
the
savings
commercial
field.
Now
banks
are
that
the
ready
fold
For
thing,
that
there
is
no
commerical
continue
to
— William
J/a new: Office building in the Oak
opened officesjat 2284 Street "Redevelopment - Area - m
West Hol6ombe Boulevard to en- .New Haven. The
building, which
gage in the securities business. Mr, ; will be New Haven's largest com-
of
to
dividends
earn
holders.
is tight
a
In
and
commercial
for
times
profitable, commercialbe
expected
its
when
stock¬
to
promote
Continued
on
spring and
1,
Hueblein
Lycoming division of Avco
aty»iraiIOTu,
R
Irmv
w
tn
R
development of-the
product
>
(Special to The Financial Chronicle)
poration, 333 East Hampden.
recently
been
with
•
nold &
an
Company. Prior thereto he
ufficer
Co., Inc.
.
The
t
cf
Hicks, Newton
"
:
/ *
:
.
I
a
for salaried
technical
per-
program
engineering
and
F.
sonnel who wish to continue their
leading
and dis-
studies. Some 300 employees are
eligible to participate in the plan,
a
'
its
Primary Markets in
in
'
.
'' CHAS. W. SCRANTON
Members New York Stock
&
CO.
Exchange
CONNECTICUT
New Haven
/SECURITIES
Mr.
can
&
G.
.
Hotel,
IH^f
was
(formerly
&
•
,
has also established,
aid
March 8, 1957.
With Western States
has
.
company
-
turbine, engine.
t6.,.
gas
tuition
'.A
Bro., Inc.,)
manufacturer, importer
' *
tion will hold its 25th Anniversary
on
Heublein tInc.
Heublein
Toronto Bond Traders' Associa-
Columbia Securities Co. and Hon-
35
Effective Jan.
ucts.
will become the agency for a wellknown brand of sherrv and port
com-
•
*
*
To Hold Dinner
Toronto,
expected to be
^
•
Dinner at the King Edward
is
pleted cai j in 1959.
eveu
early
f
Toronto Bond Traders
are *
thrift;
page
processing^and
-■
.;W-
Newton
banks
Menlo Park, Calif, for the erection of a new plant equipped for
the
manufacture
of various food and liquor prod-
Fund
money.
savings accounts
^
"t -grain neutral spirits.
The company is also planning* to
purchase ,;11.3_ acres, of land .in
j^nuiaciuring
formerly President* of/mercial
structure, " will
provide
Management Com"- , working space for 2,400 employpany.
In the past he, was' witty ees. Construction* which it is estiFahnestock and Co. and.-Smith, mated will cost more than
$10.^
nnn nnn ic
Barney & Co.
000,000 s scheduled to begin next
~t
saver
is
1956
heen made to purchase a tract of
land in Muscatine, Iowa, for the
was
Texas
as¬
bank
for the
Manufacturing Corp., at Stratford,
has
as
purpose
.
^'tltandina
The
HOUSTON, Texas
Sloan
banks
the
woo
income
wjnes made in England.
■
some
one
surance
will
That's the argument.
faults.
away.
But it has
■
|
.
-Km J*mm*
-r
T c,~* Southern -New ^England
Own Investment Dffiee Telephone Company has anIHYTOtmniHrW'HV® flounced plans.for construction of
A
to
job, the savings bankstheir tents and silently
Net
Vodka.
UVIII
,
Sloan
covering that field
Seriously,
WHIiam J. Sloajf Opens
of
converting to
why should
corn-
divisions. Arrangements have
nurrhase
companv's
.
intention
;
.
• 1
Pittsburgh.///?
least
tbe
in
-crease
^acres of in-
very
strongly that savings, Committee No. 12 to succeed Richconstruction, i The
banks
should
company
is
be
abolished
and
to
ir
suggest
very
explicitly that Mullins of A. E. Masten, x .Co.,^ looking toward the futureipossi&
of a- -braxickx blant there to
they might well be converted into %
Pittsburgh, was elected ta,succeed
the Canadian markets * The
commercial banks.
James E. Crehan of Moore, •Leon.
"
.
on the
St
LawAlthough it may come as bad ard &; Lynch,
£
rehce River-in the" town of Aunews to that
gentleman, I am sure
*i.'
••
-A" gusta, west of Prescott, Ontario.
• *
that I speak for
every one of you
when I say that we haven't the
business.
for
and an 85% insales
for
Smirnoff
sauce,
fiscal year amounted to $2,235,528
*
ply
.
sales
in
..
Inc.,
SJ
increase
.
T-« l
been elected
and
dustnal land on the St
Lawrence;p,^SL is Planning for exnanJersey) to succeed Seaway. Dexter D. Coffin, PresiHeublein
tor expan: >•
*
..
/••>
dent,v.in - making the announce- sion in ooth its-ifood and liquor
i*"
Kerner,
latest
C. H. Dexter & Sons, Inc., man- compared to $753,976 for the 10ufacturers of paper specialties in• month 4955 period. -There - are
Windsor Locks: since 1769, has re-<
cently purchased 25
member of District Com-
Diwftc.
^'
S-55
*
*
mittee No. 12 (Delaware,.Pennsyl-
In¬
commercial
,
'
^
group of commercial bankers.
deed,
y
the
.
Jr., Harrison
Philadelphia,-has b e en-
basic: It is whether
savings banks
are to be prevented from
serving
because of
Pennsylvania
Robert E. Daffron,
re¬
more
Eastern
Association of America,
be
branch
the
Group of the Investment Bankers:
merely
banks
archaic
of
The
year.
transfer of 1,000 engineering and report
shows
consolidated
net
service -.employees from the sales of $68,543,461 for the 1956
Bridgeport plant* with the result- fiscal year, compared to $43,039,ing available space in Bridgeport 195 for the 10 months ended June
to be used for increased produc- 30, 1955. Gains were reported in
tion there; The Stratford plant all divisions/ among them a 17%
Co.,
changed to Brooke & Co. in 4949.
Mr.
feet
square
thus
This
University,
Brooke/ Stokes
Aircraft
that it plans to add 433.-
plant which
ties business in 1936, after.gradua-
un¬
Sikorsky Aircraft division
United
nounced
co-Chairman of the NASD District
matter
*
Connecticut Brevities
Governor
as
ENGLEWOOD, Colo.—Ralph W.
they do today. To put it quite
simply, the purpose of a savings Newton, Jr. is now associated with
bank is to promote
thrift, and the Western States Management Cor¬
privi-:
of
t
i ^Presidential
address
(•afore the N. Y. State
/
of ' Securities
He succeeds
Frank H. Hunter,
I
Six
years
ago,
when we first
sought the right to open suburban
branches, some savings bankers—
especially some from outside the
metropolitan areas — understand¬
ably
may
have considered
the
can
Revision
officers
the Association and
many com¬
Ci
if
attention.
Association
Dealers.
derestimate the importance of the
work
of
the Kaiser Committee.
pfeal
the
will
hope that
,
the Board of Governors of the Na¬
tional
you,
handsomely
/
During his active years at the "Chronicle," Mr.
Stanley was admired by his co-workers and will be
remembered for his independence of
thought,rvig¬
orous
mentality and courage in all his business
situations and problems.
Philadelphia, has been elected to
re¬
handle the
Banking Law
All
assure
close
they
we,
ap¬
various
three sisters.
and
Governor of NASD
^
Committee.
I
documents
eco-
of 80%
excess
Federal
documents,
you
'
well
was
and'
; PHILADELPHIA, Pa. —Francis.
M.
Brooke,,.Jr., Brooke & Co.,
banking.
I
Security
financial
brothers
two
investments,' the
entitled, "How to
and Financial In¬
on
these
F. M. Brooke Elected
thoughts on
impelled
Kaiser
them
Cobleigh
feel
the
and
U.
sev¬
dependence."
more
•*// ///> .../
.
historic
to
ings
•
reward
ernment
like
I
believe
ficial.
bills
few
the
give
you
Michalis
in this state is
few
of
will
G.
C.
pirpaC]y proving to be most bene¬
a
a
of
Ira
in
drug circles. He was a
member of the Sleepy Hollow
Country Club and
the Young Men's Lyceum Club of
Tarrytown, N. Y.
Surviving are his widow, Ethel Saymour Stanley,
a
daughter, Mrs. Robert Hebbard, a granddaughter,
I will
urge each of you to read
reread—the "Economic
State"
These
improved
bills
to
ports
property
in
me
York
Taking mort¬
gage loans on
these
Gain
con¬
Study of Savings Banking in New
3
Lied
our
obtain
to
that
express.
Let
—and
icipate
in the state in
to
subject
to
ravings banks
were
however,
this
which
permits a sav¬
ings b a n k to
tion
latest
branch powers.
known
the
also
Mr. Stanley was born in California and
v
^
Finan¬
books
eral
dis¬
try not to steal his thunder. There
I i 11,
p art
with
efforts
reasonable
The
He is
field, died at his New York residence,
Street, age 62. Up to his retirement,
January he was Vice-President and Eastern
dental trade.
Commer¬
develop¬
year's
ments in connection with
again
failed
of his report Mr. Kaiser will
the
,
of.
financial
author of
many years as
York
last
cial Chronicle.
Legislative
Stanley, who served for
representative of the "Chronicle" in the
Manager of the national dental-magazine, "Oral
Hygiene," which publishes four magazines for the
columnist:'for
Committee to Revise the Banking
I am sure that in the course
fully
&"
other
&
STANLEY
440 East 56th
corporations
Law.
cuss
New
Company;
the
Joint
business
a
Cobleigh
director
a
cial
the
Stuart M.
di¬
right
age
savings convenience.
with
of
M.
Cobleigh to
Cobb Lighter¬
Mr. Michalis reviews briefly the Savings Assolegislative activities, commends the bill creating
the Mortgage Facilities
Corporation, and presses the fight for
branches. Warns that savings rate of increase is
decreasing,
and believes more savings can be
tapped if public is provided
ate
U:
Thursday, November 15, 1956
1894—1956
League's
Mr.
ciation's 1956
At the 1956 session of the legis¬
lature the Association sponsored
only two proposals — the branch
bill and the mortgage
participa¬
STUART
of
is President of
of business."
more
President
rectors.
Outstanding savings bank head answers the question, are
savings banks to be prevented from serving the public effec¬
tively, by stating "we haven't the least intention of going out
'
Jackman,
...
Kit fRrmnrumx
League, Inc., announced
the election of Ira
Bank
board
President, Savings Banks Association
Direstor
a
Of Investors League
By CLARENCE G. MICIIALIS*
]
and^Financial Chronicle
New York —REctor 2-9377
-
Hartford
—
JArkson
7-2669
Teletype NH 194
Volume 184
Number 5586
,y~~
The Commercial and Financial Chronicle
...
(2079)
*
daring,
critical -materials, £n<l, credit were
Power of the Dollar
resorted
Vice-Chairman, Board of Governors of the Federal Reserve System
.
Federal Reserve Vice-Chairman concludes "combined
action of-general monetary policy, of fiscal policy, and of V
-prudent decision making by*' labor, business and consumers/" -"
pant,
.
vis
required to protect dollar's purchasing power. Mr. Balderston V
explains price inflation in terms of quantity theory of money;
/V-' re-emphasizes
Fed's policy of not allowing more monetary;
-expansion than is consistent with orderly growthfinds past
mercial enterprises and of private
unsuccessful; and trusts
future economic anticipations will not he lost through failure
V
to meet immediate problems.
V
It is little wonder, there-
'
fore,
•
that,, country
-
mental
;
.
be
to
,
,
.
understood.
,
•
+u
»
to
fiscal policy,
psychology runs rampant
they revive businesi
group
How could
when peacetime respective sermons. The quality from depression in the face cI
of past business decisions may be general despair? Or prevent in¬
such markets said to determine the fundamental flation amidst a wave of reckleej
controls
operate because
individuals
economic f0r themselves
to
what
determine
they
need,
b®come snarled. what they will buy, and at what
now pouring
,
the road there
nor
the two in concert, are likely
to maintain economic stability il
nor
is
business decisions?
of the economy at any
soundness
given time. The decisions of 1955
of protecting tin
nroblem
reflected in the sal°«. inven- purchasing
are
power of
the dollar ij
Even thougn many indi- tory, and employment figures of
a
three-legged stool. It respending decisions be un- 1956 and may indeed influence qUires
the
combined
action o?
is.ihe stretcn- present road capacity will permit wise, the free market gives people those of 1957. These business de- general monetary policy, of fiscal
ing out of tne to move forward at one time. This the satisfaction of
using their own cisions.not only are influenced by poiicy
and
of prudent decision
vtraffic-comes both from govern- knowledge, judgment, and initiap^c-oxv/gy, u.cy
nc^. ^ lriaking by labor leaders, business
high pros-. ment and from private* sources; tivef-Iri a democratic free-enter- create it. Sometimes they reflect executives ' and
consumers.
11
penty and Cxu- from corporations anxious to exprise economy we must depend excessive1 pessimism; ~ sometimes would be highly desirable for eac i
businessman and consumer to re~
ployment. •.
pand, and from individuals who upon free markets and upon in- speculative optimism.
ver
power of the dollar.-At stake also
I
current
stake
t*J♦h^'V
fr>
protection of-.the buying Into
is
the
provided
.
,
At
of govern-
the inventory panic of 1920 and
1921 with its crashing prices, and
the collapsing stock market of
1929 and 1930 all preach their
conditions permitted free markets
enable
...
country
after
off tnis harness
shook
-
were
Money is tight and the reasons
observations may be in order. Ono
is that speculative fever may nc%
if it should again sicken the economy, take the form of stock market speculation like that of 192'J
when margin requirements wera
too low and the rewards of thocall-money market were too enticing. Speculation has many forrrn
of dress and even of disguise. Tht*
second observation is that neithef
Even
answer.
citizens.
'
need
liquidity and expansion, cause men "chased the fast buck9*
the quality' of debt at the sacrifice of prudence. Two
Moreover,
,/vqlve the policing of hundreds of led to the founding of the Federal
thousands of industrial and com- Reserve System six years later, monetary control
;
-
controls
in-
by wartime patriotism,
delineating monetary and fiscal role, and pointing out that
/they cannot hold-up against group psychology running ram-*
selective
nations/
by many
supported borrowers, wntuitr business execther sue- utives . or consumers,
must be
cess was limited and in the end prudent to provide
economic
did-not prevent inflation.
They growth free from serious inflation
did not prevent eventual loss in or from recession with its destructhe
purchasing
power
of
tne tion of values.
'/"/
s
monetary unit.. And they did inThe financial panic of 1907 that
partial
"In
direct : and
to
eluding our own,, during and im- should not be impaired by equity
mediately after the war. It is my that is overlv thin. Finally, tbp
conviction that they are only a decision-making of
lenders and
By C. CANBY BALDERSTON*
j
13
^
■
;
m&r~
rtnnitdlii
*
t
«Ur!f
i
the
e
...ir.
1
n
k s.;-
K
n
■
~
1
...
.
.
.
if
jam that threatens to impede eco-
o
nomic progress?
;
The demand for
r-
.
i930's would
to be that
seem
economic health of the whole com-
great destruction, those executives
Proper Role for
7
What is the nature of this traffic/.
e-
t
of thi
One lesson of the depression of gard himself as a trustee
^he
consumers.
The
x uc
.
.
..
Fed and
Treasury
.
proper
yxupcx'
role vx
xuic of
A philosophy of trustee ship and a sense of responsibilit/
who must venture if the economy
regard the rules of the road,
nlndi
p p
vidual
get through first even if they dis-
is
s
T h a
t
tne
™
,01 rich
one
than
fu-
ofour
u r e
J
„
.
price.
traffic
economic
y wisn, homesmanv oeoole - wish to tblligent, pot irrational, decisions
and other durable
goods. Too many people wish to on the part" of K,,cir--->
businessmen" and
t
long
economy
*
more
are
from too munity.
suffer
values
equity
distraught and
do so; or if they have
mv ou, wi ix
A| v
is to revive are too
fearful
government
guvciijuiiciu. x diiui
to
! i scarce goods is exceeding tne sup- in txhese; matters is to be respon- the requisite courage and daring,
anu
nl-v
niKhintf
nrippa
lnwarrl
•"
ply and Pushing prices. upward.. sible. for fiscal policy, including tuey iii«y no longer oe eonaxvxox^u
hI This exPlains what has been haP- the balancing of its own budget, credit-worthy by lenders.
me
salient features of democrat! 2
free
and of a
enterprise
health;/
economy.
«
auvanee
-
SnH
1
i:
1
„
:
,
;
.
..
.
....
ir.
C. Canby
f
crease,
Baidersiun
c
1
prospects
thp-
this
of
cnprMiintix/Pi
full
of
leads
to
+Ko+
p^rltJ^
fhp
MnSThpl
and
wide
The
fact
r m
pn+Vmciac^
-
in^nirp^^mpnf
pening wita respect to wholesale
g-te
n
superb.
are
recognition
o
*
nrnsnpptc
prices.
consumer
people want too
■
many
for
and
Too many
general monetary policy.
Responsible for the fiscal policy
the Treasury and the Congress,
things .too
SACRAMENTO,
In contrast is the
psychology of
fast- They want to build new Responsibility for monetary policy
m v
Pnr°
pnd iir>xi7pi-rantor1
o^plants, office buildings, ships and has been assigned by the Congress ehvHienc« pnd »m»rorr«nt«d •
plapes at an unheard-of-rate and to' the Federal Reserve System timism. Financial history records
-record rates of
with
pro-
hope for hign employment
autos,
duction for residences and
a
trustee
mandate
over
the
to-serve
as
total- simply
boom
a
of
w,
alter. Ooooi
?
(Special to The Financial Chronicle)
/Observations
,are
With Richard Harrison
and
Reminders
Two
Uu...
u,-
has become
Peart
Richard
A.
Calif.
—
Nell
connected wiili
Harrison,
2200
Six¬
Street.
teenth
-
1tnwouldribeni nitv indeed^f The resultant pyramiding of de- moriey and to carry on its-work'
thev were to be ln«!f thrnii^f^aii
they w^e^r^hp lost tnrough fail- ipand.not: Cnly creates scarcities; without fear, or favor, free from
such
that
cement,
nniainoi
that
as
to
ure
grapple with the immediate
problems. "* These
the
from
problems
that
fact
lor
currently
ag¬
flated
and
speculation.
by
What is
case
Too often
C
At
;'// f:-
»
■
when
time
a
■
ohviouslv
to
necessarv
credR
commercial
banks
to
or
and credit,
-accommodation
for
chiefiy from
a
*
Re-emphasizes Fed's Policy '
Reserve
Federal
^
rates,/seems
caused considerable
lest
"the
r
bank
to/have
apprehension
in the
market during the ensuing
money
supply
be
months
funds
of
,•
insufficient to provide
for essential credit needs, such
the
movement, of
eral
Treasury.-
and
crops
financial requirements
In
as
the
.
of the Fed-;
view, of
tnis
apparent concern^ it'seems desirr
able to re-emphasize that the Federal Reserve System has no intention
tion to
of
allowing such a situadevelop. The Federal Re-
continuing
duty of providing a monetary expansion consistent with .orderly
growth of the economy. The dis-
serve
has the
System
count'
of
facilities
Reserve
witn
the
fluctuating
needs of-the economy. In the light
of the Employment Act *of 1946,
may
as
the
'to*
the
_
The
is
needs.
eoal
g
more
combined
of
Federal
be
ings and to those dependent upon
Copies of the Prospectus may be
only in states in which such underwriters are
dealers
tn
securities and in which the Prospectus may
BIyth & Co., Inc.
(Incorporated)
power.
Mr. Balderston before
'
Goodbody & Co.
as
teachers
are
^ Qf
and- all
whose
'
fixed.
'
.
Controls Are
There
spending
are
,
school move with speed and safety only
incomes-If ^rivers observe the traffic rules
"
brought forth by experience.
.
•
some
through
ective controls
■
s'
Partial Answer
,
-
-
-
The rules of the economic road,
like- traffic
rules,
are
sometimes
Perhaps the most fundacontrols mental of them is the preservation
who would curb .ignored.
price
over
or se- of balance
and proportion between
imports/food,f protection and
risk, caution and
Walston & Co., Inc.
First of
Biunt Ellis & Simmons
Michigan
Corporation*.
"
Manley, Bennett & Co.
Model, Roland & Stone
Watling, Lerchen & Co.
Ball, Burge & Kraus
Co.
& Co.
Rodman & Renshaw
Hawkins & Co.
Schwabacher & Co.
Company
Straus, Blosser &
Davis, Skaggs & Co.
McDowell
Boettcher and Company
Elworthy & Co,
Hooker & Fay
Kenower, MacArthur & Co,
Irving Lundborg & Co.
R. C. O'Donnell & Company
Saunders, Stiver & Co.
Suplee, Yeatman & Company, Ine,
Wagenseller & Durst, Inc.
MacNaughton-Grecnawalt & Co.
November 14, 1956.
Company
Bingham, Walter & Hurry, Inc.
Julien Collins & Company
Sutro & Co.
Burnham and
Pacific Northwest Company
of Chicago
Roney & Company
gateman, Eichler &
II. Hentz & Co,
Stein Bros. & Boyca
Incorporated
First Securities Company
Wm. C.
"
R. S. Dickson &
Courts & Co.
Butcher & Sherrerd
Lester, Ryons
^
E. F. Hutton & Company
'
Shearson, Hammill & Co.
Hill Richards & Co.
Supe^soi^n ofastaLl,<^nk^*^nU'°" ~f . and rationing.. Such direct
4£X29DEB
Paine, Webber, Jackson & Curtb
Clark, Dodge & Co.
.crowded highway. The latter can
,
Central Republic Company
Dean Witter & Co.
rights and similar fringe benefits
The well bein& is involved
obtained from any of the several under¬
qualified to act as
legally be distributed.
writers
fi°ns must bet kept running much
Tike the stream of traffic on a
them.
share
•
of wage earners who have pension
-
economic process
economic, progress
jobs
and ,..ore
goods
with a dollar of stable
:.*Ad address by
Trice $22.50 per
^
without overstraining its capacity,
A continuous stream of transac-
all its dread consequences to sav-
re-
The road/ toward
this goal stretches ahead as an in¬
viting path for us and our children
buying
i
($1 Par Value)
- The - aggregate
and > rival de- must be harmonized with the flow
mands of .corporations and indi- "Of goods. Hence, the supervision
viauals to borrow heavily in order. °f goverjirhent is needed over the
to buy more goods than exist at total supply of money and credit,
the moment explain the concern The apportionment among indiover the cost and availability of vidual borrowers, however, is best
credit:' When* tie
demand
for left to competition between
credit exceeds the supply of it,; private * borrowers
and private ^
the price tends to rise. This ds/Tenders: It is the responsibility of
how the marketplace allocates the the central bank to influence the
existing supply -of credit among total, supply^ of. .creditsbut -the
the rival claimants for it.'. In the selection of the particular cusprocess,
many
individuals
and tomers .to whom loans are to be
companies are disappointed that made is left bankers discretion ot
to the
they cannot secure, the funds to commercial , bankers
and otner
private lenders.
buy what they want right away,
As a nation we are trying to spend The Rules of the Economic Road
faster than we save. If we should
'. The problem, then, is to keep
succeed, the, higher prices that
would result spell inflation with tbe economy running at high speed
quiring temporary funds for theiressential
Common Stock
a
banks
member
Reichhold Chemicals, Inc.
be expressed
fostering of
.power of the dollar. •
' If the supply of credit becomes
excessive in relation to the goods
and:services available, prices tend
to rise;'if the converse is true,
prices'tend to fall. Therefore, if
continue 7to
banks
available
200,000 Shares
period of credit the value of money is to be stable
stringency,, and has the effect of and to assist the economy to move
making the supply of money more steadily upward, its supply (at the
efficient.
V
" ~
current rate of deposit turnover)
in:
expected
:
„
.The recent rise in interest rates,
discount
of such shares. The offering is made only by the Prospectus.
available to the commercial
those
needs
most simply
pyramiding
the P^ase "tight money.!1 -
provide for
of
all who
technically ^redit-wortny.
including
any
coruance
tightness of credit
attributed to insufficient
buy, en- a solicitation of an offer to bts
offering, of these shares for sale, or an offer to
banks so that bank credit may expand and contract flexibly in ac-
Moreover, money is being made
wish to borrow. Some loan appli- Jo work harder. Demand deposits
cations must necessarily-be
reare being turned over about U%
fused or deferred by commercial taster than a year ago.": This inbanks even though they may be crease in money activity is to be
the
an
private,
of demand.. Actually the supply sustaned economic growth and the
money and credit is larger than maintenance of economic equiliba year ago, instead of being small- rium. There can be no economic
er as many imply when tney use e<luilibriurn without stable buying
Aho
feasible
not
money
so-called
suited
nursiie
exoansbn
obviouslv
is
it
>
r8Str^n of
credit doIicies designed to
excessive
materials and labor
scarce
supply, whereas it has in fact re-
general
business climate is inflationary, it
is
of
often
is
."-V
the
serves
clearly evident in the
so
applies also to
The
binges have led to painful hang¬
overs.
hand,
*
values in¬
squeezes,
Demand
.
This is not
business
pressure on
the other. Its par¬
ticular role is to regulate the re¬
one
Tigh£ Credit Is Due to
demand is in excess of
supply. Prices are being pusheu
upward, the, economy endangered
cost
partisan political pressure on the
stem
gregate
by
anu
steei
but for certain labor skills as well.
Winslow, Cohu & Stetson
Odess, Martin & Herzberg, Ine,
16
The Commercial and Financial Chronicle
(2080)
reversed
last
consensus
of
was
the
THE MARKET... AND YOU
that
deflation
the
s o
that there is little further de¬
cline
The
somewhat
divorced
fears
recent
was
market
this
from
week
able to put on a
selective
t
s
was
its
and
of
important makers
stainless.
Armco,
moreT
use.
industrial
utility and
profits far
with
is
use
*
*
comparable
more
Truax-Traer
other
the
than
1955
and
certain to grow.
seen
will be able to post 1956
over,
railroad
in
On the other hand,
sje
show of
gt h largely
r e n
of the
one
ahead
home
stock
suf¬
was
comprehensive
ficiently
STREETE
By WALLACE
year and
opinion is
Coal,
low-
a
large companies since its cost strip mining operator, is
like
good steel operations, operations are never affected a bit down the list in size
continued high demand for completely even by industry¬ among the nation's coal pro¬
oil for
the
wide strikes. During the mid¬ ducers but is well up toward
domestic
com¬
panies and the prospects of year i n d u s t ry shutdown, the top of the list in turning
defense spending running at a Armco was still able to hold in operating profits. - Some¬
high rate indefinitely.
operations to around half of thing like three-fourths of its
capacity because of its large sales are to industry and
Lukens Steel was a partic¬ n u m b e r of non-unionized utility customers, putting it
directly in line to benefit
ular
on
star
forecasts
for plants.
$
$
from industrial expansion. Its
earnings of around $20, or
5V£% yield is
General Dynamics, which better than
four times last year's results.
The stock which sold at a low was able in the first three- among the fatter ones avail¬
of $42 this year, and under quarters of the year to boost able in the industry, particu¬
the $40 line in past years, was profits by half, was some¬ larly for a company with a
able to reach a peak of triple thing of a preferred issue in strong financial position.
based
solid
on
the low
fundamentals
price and well past
previous peak prices
twice its
in recent years.
❖
❖
i
the aircrafts. Its activities are
bolstered
Promising Can Merger
by its work in the
field of atomic
propulsion of
and, presumably,
submarines
*
A
surface vessels in the future.
:!<
since the end of World War
•'
*
II
tion to demonstrate the bene¬
job in bringing dollars down
International
oils
swayed
hopes and fears gen¬
with the
erated
alternately
Middle-East
Sponsor National List of
the
over
with
crisis
NASD to
Tabulation to include industrial,
will
national following
Standards used to determine
eligibility of a stock for inclusion in the list are: minimum of
1,000 stockholders; minimum price of $5 at time of listing;
200,000 shares in hands of the public; and "convincing proof
of public interest and dealer activity."
have
for
a
trading
tipie to come,
ultra-siisceptible
and
be
any
bad
from the
news
to
The
popularity of the domes¬
oils to a degree will be in
tic
inverse ratio to the fate of the
marketwise.
ones
Steel
Demand
ning
every
thing but concentrated in the
larger
companies
and
the
specialty ones as far as their
profits reports
counter
have participated fully in the
boom.
One
of. the
more
of plan¬
including
with
conferences
rep¬
from
members
of
Association
Dealers
that
announces
of
Securities
of
publication of
quotations of
sponsor
list
year
section of the country, the
National
concerned,
a
preparation,
and
resentatives
Steel demand has been
any¬
are
than
more
numerous
Diffused
will
it
National
a
over-theindustrial,
utility, bank and insurance stocks.
securities
Frank L.
the
tee,
the
—
Reissner, Chairman of
National
highly-regarded segments of
Quotations Commit¬
plans
industry is the stainless
steel producers who no
longer
are
solely dependent on one
field.
Their
work
currently
ranges from stainless utensils
for dairy and home to
prod¬
ucts
for
jet
aircraft
and
installations,
cmsid^red
committee
ward step in
prestige
greater
securities
;for
con¬
Reissner
Mr.
and
recognition
"This will be
over-tthe-
the
t'?at
emphasized
consist
list will
only
of those issues which meet certain
standards.
companies as Eastern
Stainless Steel, which has had
an
erratic
past years,
show
a
earnings record in
have been able to
much
more
solid pros¬
perity basis recently. Eastern,
while a low-yield
item, still
stands at
on a
its
a
conservative value
times-earnings basis with
speculative
hanced
promise en¬
by the fact that the
market is
a
fast
growing
one.
said,
to
integrated
better
Steel
among
c o m p a n
investment
i
e s
the
of
quality is
These
measures
which
the
standards, he
of the extent
securities
may
be
considered to have national inter¬
est, dealer and public.
ciation
will
publication
securities
basis
continue
of
on
regional
done
local
or
its for¬
for
the
Na¬
Reissner said, in¬
clude:
minimum
of
1,000
stock¬
holders.
—A
planning
for
long
projec¬
a
four
well
ago.
years
predictions
of
increase
are
least
at
time
10%
to
tion to
Management
for an annual
Interesting Retailers
planes is pretty
newer
and
be
better
Boeing, for
able
results
but
year
,
Most
come.
over
should
lor
the next several years.
not
even
one,
record
to
only next
for
the
year
beyond.
Department .stores, long
A Prominent Convalescent
neglected in the market, have
Westinghouse / Electric is
a« rather y faithful
following
also an issue: where a period
particularly for those, like of
trouble upset the upward
Allied Stores, that offer a
spiral, the specific pitfall in
yield of around 614% to keep
this case being a rather long
well above any bond market
and costly strike early this
competition. Moreover, the
-
•
from which the
issue has been
able to show
year
above-average
sales
has yet to recover
its for this year
by
a
payout
than
more
of only
a little
earnings.
of
half
sidered
as
one
of
con¬
half
the
New orders have
piling up
at
record
levels, however, and the first
more
a
business.
❖
*
the
*
boost both sales and
vogue, Boeing was prominent
in being able to push to ap¬
pearances
on
the list of
to
profits at
steady clip from here out.
a
[The
new
article
highs, which is something of
a
recovery
after its rather
sizable dip in sales last year.
line
in
stands
and
corner
back in
aircrafts
year.
significant recovery in the
figures was in the September
quarter. The company, ap¬
parently, has turned the
stab at the mail order
With
a
been
laggard of the quality issues
with a yield of 5M>% and the
allure of its newest plan to
take
company
fully. Prof¬
still reflect
high promotional costs of re¬
gaining markets lost during
the strike that lasted nearly
growth
with its dividend well covered
not
"Chronicle."
those
as
this
expressed in
necessarily at
views
do
coincide
time
They
any
those
with
of the
presented
are
of the author only.]
Continued from page 8
SECURITY
DEALERS
OF
Dealers
Pines
issues
As
than
on
set of facts;
ber
is
nothing
namely,
more
existing
large num¬
of
are
such
issu°s
stature
as
capitalization
holders,
to make them
as
officers
for
the
price
and
Joseph
year
1956-1957:
.
the
Jr.,
Sanders,
H.
S. Dick¬
Pratt, R.
Logan
Company, Charlotte, N. C.
&
josepn H. Sanders
SECURITY
At
the
James
F.
Clardy, McCarley &
Company, Charlotte, N. C.
TRADERS
annual
C.
Company, Columbus, S.
Treasurer:
to
market activity, number of stock¬
Southern
in
Secretary: Thomas Moore, G. H. Crawford
&-
an
a
held
25, the following persons were
Vice-Pres'dent:
son
pur¬
action of
over-the-counter
of
today
Oct.
of the Securities
meeting
Carolinas
the
Robinson-Humphrey Co., Columbia, S. C.
of
Mr.
regional markets.
recognition of
a
our
fact, the
committee
our
an
list of 'blue chip'
adversely
a
and
matter of
a
to
circle
in any way to
or
affect local
of
CAROLINAS
annual
President:
within
impart
"It is not
to create
pose
THE
the
At
investor interest,"
and
Reissner said.
ASSOCIATION
OF CONNECTICUT
Security Traders Association
Oct. 26, 1956, at the Waverly Inn, Cheshire,
meeting of the
of Connecticut held on
Conn., the following officers were
elected for the year 1957:
well-known and
recognized in every section of the
country.
With such issues it is
matter of location of-the
a
company
origin
or
no
of the issue—
the
stocks
are" actively, dealt
and
have
following nationally."
a
In addition to
members
tions
William
Albert C.
P.
B.
in
Reissner, the other
the
of
Committee
man
National
Quota¬
Vice-Chair¬
are:
A.
Fuller,
Chicago;
Purkiss, New York; Ed-
Rouse,
Washington- -Tu-Pn
Stevenson,
Jr.,
Cincinnati;
Oliver J. Troster, New York; John
W.
Turner,
"In
Dallas;
that
to
the
price of $5 when
list.
—200,000 shares of the issue in
the hands of the
—Convincing
and
public.
proof
dealer
of
public
activity.
addition
will
guide
included
in
to
Emmet
us
the
A. Maurits Johnson
K.
on
Edward J. Beakey
the
actual
time
bids
of
in
the
Guy R. Hogarth
market
compilation
of
at
360-odd
stocks
the National list
as
moment, it
announced.
was
First
&
the
up
it stands at the
Vice-President—Edward
Hartford, Conn.
Second Vice-President—Guy
&
make
Johnson, G. H. Walker & Co., Bridge¬
port, Conn.
list, the
list," Mr. Reissner said.
Some
President—A. Maurits
standards
issues to be
National
the
quotations to be used will be based
on
minimum
interest
which
ever-widening
an
dealer
far
since
adopted
list, Mr.
—A
fixture in American de¬
a
fense
Whitaker, San Francisco.
Standards
tional
be
job of continuing
a
developments
market
the
issue
sponsor
over-the-counter
a
it has
as
The Asso¬
to
mation.
added
Armco
are
of
review
Jj.
Such
strategic long-range
planes which, in view of the
foreign situation, are going to
NSTA Notes
longer
in
market."
the National
r
this "a for¬
the Association's
tinuing efforts to build greater and
<
atomic energy
in announcing completion of
for a National list, said bis
'counter
ducer of
tions indicate that the transi¬
elected
After
foreign
company's principal ap¬
is as the leading pro¬
peal
dealers and investors.
among
area.
The
even
stepped up sales to where this
year they
will run around
50% ahead of those of only
actively dealt in and which have a
stocks
nervous
some
an
growth potential in the
future than the major pro¬
ducers. This gives it a lever¬
age factor that has a distinct
appeal in some investment
circles, f The
company
has
utility, bank and insurance
expectation general that they
life
with
Thursday, November 15, 1956
.
Over-the-Counter Stock Quotations
the
income
net
better
F. W. Wool worth also is
Among the recent mergers
that should be about in posi¬
Firming copper prices
fits of the union is National
helped buoy the copper shares The Re-flating Coal Industry Can at the lower-price end of
and they were able on occa¬
One of; the industries that the list, which since its ac¬
sion to put on superior mar¬
has
been sailing along, ap¬ quisition of Pacific Can is in
ket action, particularly since
line to give some real com¬
the high average price of the parently unaware of the soft
spots in the economy, is that petition to the two leaders of
red
metal
this
year
has
of coal production. The con¬ this industry. The company
helped earnings show up very
has been able to
a
pood
sumption
slump underway
favorably.
❖
to
...
Eddy Bros.
J. Beakey,
R.
Hogarth,
Edw.v M.
& Co.,
Bradley
Inc., New Haven, Conn.
Secretary-Treasurer—George H. Angelos, Chas. W. Scranton
Co., New Haven, Conn.
i
Governor—William H. Rybeck, Wm. H. Rybeck & Co., MeriCo.,
den, Conn.
•
Governor—Frederick
Haven, Conn.
T.
Sutton,
White,
"Weld
&
Co.,
New
Volume 184
-
Number 5386^.. The Commercial and Financial Chronicle
>!
V"i.'
■.
I
A.
checker jots
down boxcar numbers far
the
freight yard
...
signature
a
...
mile away.
another
a
a
bank clerk verifies
pipeline supervisor reads
a
across
manufacture of closed-circuit television systems
cheek
and equipment... for the military and for indus-
a meter
This is the magic of private wire TV,
example of advanced
concepts
telecommunication introduced
in visual
by International
Company,
a
education, traffic control, security and law
enforcement, telemetering, material handling,
mote
division of
IT&T, is engaged in research, development and
hazardous operations^ and
onstrate
many
other
uses.
engineers continue to dem-
their leadership in electronics and
com-
munications.
(fc*
liip
INTERNATIONAL TELEPHONE AND TELEGRAPH
re-
su§>ervision and inspection, observation of
IT&T scientists and
Telephone and Telegraph Corporation.
Farnsworth Electronics
try,
■i^:'
CORPORATION, 67 Broad Street, New York 4, N. Y.
13
The Commercial and Financial Chronicle
(2082)
«*»..♦
the West
New Importance e! Management
To 8m Nation and Economy
of
School of Business
Management, Graduate
New York
University
and whether
v/e
present
of the oldest
activities of man. Human life, even
in its most primitive form, would
not
have been possible without
Managing is
one
ebody's
no m
Ji
been
life
today,
though quite
even
whole
is,
from
the
sum
that
the
whole
if
we
un-
not
the
at
least, difits parts,
very
of
alone
has
recognizable -existence
and that
the parts are very little but deductions
this
from
vision
whole. In psychology
that
rapid
Today
or¬
the
of
talk today about the
personality.
In
physics we talk about "fields,
in
engineering of "systems," in biology of "organisms" and of organic processes, such as "metabolism."
Our
economic
thinking
starts out with a concept of national income, national products,
and
national
productivity. And
similarly,
we
we
talk of wholes in the
arts.
1
the big
armed forces, big business,
the big labor union, to mention
just a few. More and more the
individual is becoming effective
life-giv¬
the
dy¬
force
Cartesian
Universe
Universe
No
Accepted
^
We
are
longer
Uongei
;
configurations,
seeing
ran
into
come
being,
let
clone survive.
But
r
m a n-
ging
is
of
one
Peter F. Drucker
also
the
newest
and
youngest
activities of man. Or, at the very
J^ast, our awareness that such an
activity exists and such a func¬
tion as management exists, is of
exceedingly recent date. Nothing
fhows
that
s
until
go,
two
had
we
tins
better
this
the
three
or
in
Even
decades
the
early
'Twenties, "management"
"managing," though both are
rncient Anglo-Saxon words,
of the
i^one
to
meaning
these words.
agement
years
was,
quotation
if
had
give
between
put
and
used
as
a
self-conscious
not
Americanism.
very
we now
England man¬
until four or five
marks
(onscious,
and
In
always
ago,
fact
to describe
word
no
activity.
than
And
very
few of
European languages
have any word for this activity at
ill. Most of them simply use the
American term "management" in
clear recognition of the fact that
the
other
there
is
in
term
no
their
own
language that would do.
Why haven't we been aware of
this function, this activity earlier?
And why, today, are we so highly
conscious of it, so concerned with
i:?
What
explains
generations
did
not
that
earlier
what
see
we
clearly see? A great deal of the
parts and pieces of what we to¬
day call "managing" were indeed
_
Another
very
much
earlier.
On
the
jtate, on government, on laws, on
justice, there is still nothing that
beyond
j oes
the
vision
the
and
understanding of the Greeks. In
respect to leadership, there is still
better text than the Old Testa¬
ment. And certainly that
i>o
highly
important,
if not crucial subject,
the relationship between the in¬
dividual person and the organized
institution, has never been
more
closely or under¬
stood more clearly
than during
ftudied
the
cf
High Middle Ages.
pieces together and
this
concept,
knowledge of
r.ctivity,
do
Yet
of managing and manage¬
is, of course, the rise of the
modern big
business enterprise.
In
particular, the problem posed
by the shift from the owner to the
manager
we
what
ercise,
a
talk
came
up
this
sudden
a
to
Why
see
so
times
totally invisible?
by
Dr.
Drucker
at
the
Anniversary Commencement Ex¬
College, New
York
City.
Pace
new proc¬
ess,
this
call
management. For the
function
new
which
we
people
responsible for
business
ehterprise today can no longer behave
according to the classical pattern
of the owner, not even if, indeed,
they themselves are the owners.
That they have had to learn to
subordinate their
the
survival's
interests to
own
interests
enterprise and to the
the
of
the
purposes
of
which stand
groups
many
in
special relationship of
right,
responsibility, and claim to the
a
enterprise,
is
indeed
startling
a
and
new
phenomenon,
which
could not be explained within the
framework
of
traditional
the
ena
the ideas, the pnenom-
themselves,
not
and
And
ess
and
much
much with this proc¬
this
function,
deeper
one.
it,
be
understand
able
and
we
is
a
very
And unless
understand
we
we
Reason
The real
what
we
"managing"
say
for
reason
shift
the
Management's
in
is
Western
tremen¬
world-view
World
is
un¬
during
by saying that the period
which Descartes and the
Cartesian
the
finally,
essential
to
this
modern
of
world-view, is that all
configurations are procthat is, moving, growing,
these
esses,
dynamic.
the
Where
the
universe'of
Cartesian
philosophy was estimeless universe, ours
sentially .a
is
always
directed
toward
the
future, always reaching out, always developing, always becoming.
It is much too early, apparently,
for us
to
understand what this
new
of
vision, this
ours
means.
to
world-view
new
We
far lack the
so
describe
it
the
and
methodology to explore it. We
our
Descartes.
And
so
it
is
certainly
not my job—even if I
capable, as I am not
to
supply
this
great
philosophical
synthesis which we need to unwere
—
derstand
and
to
what
already
we
analyze what
we
feel
already
know.
world-view
concepts
new
of
,
dominated
.
_
......
Management Is Organized Activity
But
it
is
heritage.
our
-
'
'
,
It
in
«-
*
also increasingly clear, that
is
this
concept, in this new
vision lies one of our greatest opportunities for a better undernew
standing
of
this
clear
we
that
have
such
result
It
the
is
function
a
of
perhaps
speed
shifted
this
to
with
this
are
essential human
dation for
cipline,
our
For in
have the foun-
managers.
as
these concepts we
true and genuine dis-
a
which,
enable
in turn, should
develop a true and
profession of ipanaging,
to
us
fouI?ded body systematic and
?"a
gamzed
of
learned,
being
ca-
informed
and
standards
this
of
by
discipline
conduct
lies
__
_
_
the
of the
one
greatest opportunities of
and
of
one
greatest challenges and
time,
our
'
_
v
Three Dimensional Management
We know, so far, very little. We
have
barely
begun work on the
development of this discipline. So
far
it
is
a
discipline,
rather
vision
than
a
promise rather than
a
fulfillment
a
rather than
opportunity
an
fact.
a
But
activity, which
we call "managing," has three dimensions, three
dimensions which, among themselves, engage the whole of man,
rather than just one of his faculties. We know that in managing
sjon
for
a
and accordingly the need
—
cooiiy
a
intellectual, that is,
rigorous discipline—
managing, regardless of
strict
and
because
the
character
managed,
the
aiways
the
the
only
manage
of
purDOSe
manage-
bring together and to
weld together the free and freely
glven
energies and efiorts of free
through
pe0pie
and for
a
a common purpose
common
of
purpose
It is the
cause
management
and
a
major test of its competence and
per£ormance tomake'e{fectiveall
motivation mS
the
ate both
tution
appropri-
to the purpose the
and
serves
the
to
has to perform, and
instiit
work
to the ideals,
visions, competences, and abilities
0f
individuals which
compose
sources
human
suits.
and
—
preneurial
ment
this
re-
present
future
future
and
for
-
these
in
govern-
it.
be
a
will
all
But
and
mean
demean
those
brutish
and
make
associated
with
above
all, managing, by
necessity, means organization of
power.
And power, this is one
lesson
our
long history should
have taught us, should be justified
only morally.
Above
j
all, managing means beresponsible for the vision the
g
RnPrSe« ^^
1
lts of
+Pristir
the
jhP
Hicnncal
c£mnot
Above alj
himSapart
resource"
ho
that
lndeed
ic
at
not
stand
a^d
in work
h
hcing—anri
that sets
other
e
gtati
u js
human
thi
one
£rom
re
And'
le
of
tm
life ,
institution, the human being will
pithpr
j.er
Hovplnn
person
^
tpe
and
a
into
higemr
a
with
person
hot
higher
greater romnetenrg-
or
being will shrink, 'besmaller, pettier, less com-
buman
come
etent
less capabie,
and
Management
Sets
r
•
Goal
Moral
There
is
deep
and
profound
wisdom in the insight of Genesis:
Man,
his
alone
all
among
not endowed with
was
own
but
creatures,
a
nature of
in
created
was
the
lower than the lowest brute.
come
And
while
responsibility for this
fundamental, existential choice
in
anc* systematic
discipline of policy formulation.
how
and
man
upon
there
is
no
and
to
upon
the
man
alone,
each
of
individual
development
—
of
us
for
man
that is not self-development—it is
the manager who, through his
ex-
wards and incentives at his
for.an °r§anized
learn
and
0ne
hrutish
re-
for an organized and svstematie
discipline of decision-making and
to
itself will
the
of
the
future
in
themselves shape and mold the
future. Here is need, crying need,
have
Realization
ample, through his values, through
his practices, and through the re-
anticipation
We
the
institntinn
the
squarely
decisions
*
unless
the
itself is
SXates
to
future. It also means making the
future;
And
which
rests
committing
reading of
one's
to
sources
itself.
to
nurnose
open
ship. And it is not only that managing always means anticipating
the
institution
re-
entre-
might call it statesman-:
we
always
responsibility for the goals of the
enterprise
the
decision;
managing
being either to develop into a true
image, or to degenerate and be-
all,
to
—
call
finally,
making
business
the
And
image of the Creator—his nature
present
above
resources
In
might
we
institution,
institution
means
committing
means
to
set
mand,
creates
com-
the
opportunities
and challenges to
self-development or destroys them. It is the
manager who, in large measure,
decides whether the people in an
institution
will
grow
will
or
shrink.
jf
management
—and
is
the .manager
a
profession,
clearly has to
all the responsibilities of
professional—it will have to
moral profession, above all;
accept
objectives and how to make assumptions with respect to the fu-
me
ture which
for what
never
—
still be considered
can
though
even
our
be able to know the future,
it.
assess
need
not
the
so
to
as
the
We
these obknow when to
decision
have
risks
such
measure
toward
progress
re-make
to
will
we
^ye have to learn how to
even
professional philosopher and
methodolgist, is, in no small meas-
of
decisions today in anticipation of
|be future. Managing always
in
world-view, a speed that has left
behind, panting for breath, the
t
for
is the viand efforts of peo—
can
to
know
we
enough about it to know that this
risks
new
energies
'It
ment
character
or- of some high ideal, the institution
knowledge,
pableof being taught, or at least of
new
which
one
<dons
•
aiways
has a moral dimension, fn fact it
has probably more than one moral
dimension.
It not only implies a
make
direct
in
thing
also
competence in managing and
performance
jectives,
world-view.
social
Efforts
is
the
perceive the existence of such
the
managin(y
Together
activity and for purposeful and
systematic work at improving our
quite clear that our
understanding of managing and
management, indeed our ability to
an
Energies and
But
p]e
d
*'
Welds
with the bringing together of hu- the
strength that can be found in
man beings into an organized and
the human beings within the inpurposeful activity, all the pieces
,stitution, while neutralizing all
that, over the centuries, have been the weaknesses
inevitably found
identified, described, and studied to be mixed in with
the strengths
by so many of the great men of Managing mnans motivating 'Anri
rational
activity and
the
the
dergoing
during
the
twentieth
century. It might best be charac¬
terized
for
__
to
when
Importance
dous
arranged
will not really
"management."
Real
dhey
were
of configuration itself.
far lack
so
arranged ot
organized
purpose
life.
ourselves
been
differently
concept
Still, the real reason why we,
today, see managing and manage¬
ment, and why we, today, concern
be understood
can
organized
nineteenth century concept, either
of human behavior or of economic
which
earlier
configuptions m each ofJ which
the parts,
could
starting point of
thinking about this
these
eighte nth ce tunes, there is an intellectual dimension.
We are rapidly in the
processor We know that there is a social
replacing the causal universe of a dimension, and we know, finally,
mechanistic philosophy and physthat there is a moral dimension.
ics with a purposeful universe of
There is an intellectual dimen-
to have been the
our
Indeed,
and
only on the assumption that they
witn
vision,
managing.
attention
our
teenth
the concept and function of
management. It may well be said
purposeful human
of
seemed to be
Fiftieth
a
namely
all
clearly
_*From
this
the
has forced
onto
none
but
ever
sudden
our
ment
mean
predecessors
our
for
reason
vision
j o
ueen
as
with these
and
management has become
central to organized political, social, and economic life in the
modern world. For management
is truly such a "configuration,"
such a "whole," and "managing"
is truly such a purposeful process.
dedication. In the development of
pose it.
he works through
The essence of all these conorganized institu¬
figurations, which together give us
tional centers of power. But, after
our
modern world-view,
is that
all, the lack of such centers dur¬
they are purposeful. In the Caring the nineteenth century rather tesian
universe, wholes were exthan the present rapid growth of
plained by causes, were, indeed,
these centers, is, historically, the
the effects of causes that lay in
exception. Certainly, at least in the
parts. In the twentieth century
the free
world,- these organized world-view it is the
purpose ot
institutions
of
powers
are
still the
whole that alone enables us
much less
dominant, much less even to
identify the parts,
to
prominent, much less important describe
them, and to understand
than they were in antiquity or in
them
It
is
not
true, as some
the Middle Ages. Yet during those
modern
philosophers of science
times, the understanding of man¬ seem to
state, that we have subagement was
well beyond
the stituted a random
universe, govhorizon
even
of
the most
farerned by statistical probability for
sighted.
the causal universe of the seven-
only insofar
institution
no
which
real to us, not
com-
•:
Management
management and
managing, and of the speed with
high
the parts that
• 4
to
And it is the configuration that is
,
without which
need
understand
genuine
ganized centers of power, that is,
highly charged institutions, domi¬
nate bur life: the big government,
active,
namic
discipline
every
ferent
And
the
ing,
weak.
and
few
were
management
the
very
a
seen
*
# f
our
di?dpline aU the pieces that deal
consciously, to the axiom that the
insti¬
in
tutions.
is
has
of
result
managing and managements are a
means to c o m p r e h e n d in one
vision and to pull together in one
In
of institutionalization.
Only 50 years ago, at least in the
Western
World,
power
centers
always
a s
is, of course,
answer
time
In fact,
today.
so
subscribe,
of
Sudden Importance
Management?
believe
>•'
* ft. ,•*
«
all.
process
managing. For
human
One
our
axiomatically that the
equal to the sum of its
•
.
.
the
ure, ;
self-evident
to > our
grandfathers, actually means, or
indeed, that it means anything at
ability to direct modern nationhood and industrial economy*
Why
vision
rapidly even lose the faculty
understanding what this state-
ment,
management s
upon
is
longer
we
resources
shrink, depends
grow or
whole
Cartesian
the
of
that it held
of
for future
anticipations; welding together efforts and energies; and
organizing productive power on a moral plane, are depicted
by nationally known business advisor as the intellectual, social
and moral dimensions of the crucial, revolutionary discipline,
"management." Dr. Drucker attributes management's sudden
importance and recognition to emergence of many power cen¬
ters, besides big Government, and to rise of big business enter¬
prise. Discloses withering away of classical owner concept,
even when owner is the manager.
States free world survival,
committing
"the
typical
no
Author, Business and Government Consultant
Decision-making,
which our history books
modern
age." It was
call
definitely over—the
parts; nay, indeed, that the whole
is the sum of its parts. This we
By DR. PETER F. DRUCKER*
Professor
are
300 years
Thursday, November 15, 1956
...
to
and
a
to
or
un-
know
how
manner
to
how
take
that
entrusted
being reckless or
safe."
And
this,
by
let
to
us
"playing
me
a
is to be professional on
managing will have to be the ex-
ercise of power.
ager
And if the
has to acknowledge
man-
one
su-
law, it must be the law of
Charity, in its truest and purest
meaning, as the pursuit of man's
highest goals through his relationship with others,
preme
we
jeopardize the future of
institution
be
by
it
repeat
again, is an intellectual discipline,
if only because decision-making
is an activity of the mind.
American Management Faces
Supreme Test
•
That there is such a process,
such activity and function as managing and management, we have
only known for
a
hardly
for
enough
scant 25 years—
the
world
to
Number 558&... The Commercial and Financial Chronicle
Volume 184
haye
gained
let alone
acquire proficiency
activity. And yet, decurrency,
in this
new
account
Kidder, Peabody Group
for anyone to
(2083)
,
pf certain selling stock¬ facturing, electric appliances and
no
part of "the pro¬ equipment, and many others.
received by
the
J Sales have increased from $2,company.
An additional "30,{)00
shares of common stock are be¬ 210,483 in 1947 to $21,647,301 for
holders
ceeds
-
Offers AMP Inc. Stock
spite its youth, its inexperience,
its
ignorance, management, and
An underwriting group headed
above all, American management,,
by Kidder, Peabody & Co. yester¬
today, faces a supreme test and
day (Nov, 14) offered for public
occupies a unique position.
sale 277,700 shares of AMP tqc.,
If there is one development that
$1 par value common stock at a
characterizes our world today,
price of $16.25 per share.
' ^
one development, the outcome of
Of
the - total
shares
offered,
ydiich - will' determine how our
128,200 shares, which were pur¬
Children and grandchildren will
chased by the company from cer¬
live, if not, whether they will livetain
employees
and
one
other,
altogether, it is the upsurge of
stockholder, are being sold for
areas which, only yesterday, were
the account of the company and
primitive, colonial, subject, un¬
the-proceeds of the sale will be
der the sway of age-old custom
used for general corporate pur¬
and resigned to be governed by
poses, to enable the company to
whoever could
impose his will.r
carry an increased inventory and
Today, all over-this world of ours,
to finance a larger balance of re¬
these peoples are striving for gov¬
ceivables.
The remaining 149,500
ernments
of their own and for
shares are being offered for the
1
tion
of
which
will
be
the underwriters
offering.
"
by
taken
for
up
public
modern
economies
that
will
Formerly known as AircraftMarine Products, Inc., AMP Inc.
produces
over
10,000
different
types and sizes of solderless elec¬
tric Wire terminals, which pro¬
ever
well
means
a
(Special to The Financial Chronicle)
as
terminals
.
wires.
to
include
served
and
Industries
electronics,
machines
aircraft
and
date
605,588.
income
net
For
the
31,
$20,710,354,
and
142,163.
busi¬
computers,
automotive
manu¬
1956
..
$1,-
was
eight
months
sales
were
income
net
;
V
$2,-
CREEK, Calif.—Wil¬
Besthorn,
Vivan
S.
Cooper, Wendell A. Hutchinson,
Albert E. James, Tom W. Keeney,
H.
Ted
Kenyon, Alexander T.
tyne
R.
have
'
...
F.
Trulsson,
W.
Elizabeth
Edwin
and
been
added
Maisel,
F.
to
2901
the
Mt.
to grinding poverty.
that
today
vie
all
FRANCISCO,
"v
Sharpe
are
now
&
W.
with
connected
Samuel B. Franklin
Crocker
Edwin
and
Mah
S.
Jack
"
(Special to The Financial Chronicle)
Company,
WHITTIER,
Dale,
Calif. —Glenn
Bernard Lurie have become
•
The de¬
the
minds
will
of men, will prevail,"
on
the ability with
pre-industrial countries
depend
which the
it
(and
might
scribe them
be
better
de¬
to
pre-political coun¬
tries) can achieve this twin-goal
of modern, organized nationhood
and modern, organized industrial
as
(economy.
achievement
The
of
both
de¬
above all, if not exclu¬
on their ability to
learn
management and to produce man¬
pends,
sively,
This,
believe our
morning
has
brought this out quite clearly, is
the real key to the ability to or¬
ganize political life and to the
ability to organize economic life.
For both depend on purposeful ac¬
agers.
and
I
discussion
this
tivity
unites
that
-
human vision,
effort for a common
purpose,
the activity which we
call "managing."
- •
energy, and
World
Free
Looks
to
United
American
who
world
the
States
is
it
But
;
ager
of
the
today
ours
leader
in
the American
stands
the
as
man¬
in
this
symbol and
management.
achievement
It
is
in the
understanding of management and
in its study that, throughout the
world, stand for this new knowledge and discipline that is so ur¬
gently needed. It is from us, pri¬
marily,
that' the
pre-industrial
'
*|
countries will have to learn what
managing means; it is to us, above
all, that their young people who
want
to
become
managers
will
look for example, leadership, and
affirmation. If they will not find
here what they need, above all if
they will not find here the dedi¬
cation to the highest standards of
professional competence and to
highest moral values and prin¬
ciples, they will, of necessity, look
the
elsewhere.
It
is
on
the American
manager, his competence, his ded¬
ication to professional standards
his
and
unswerving faith in his
professional values and be¬
liefs, that the future, if not ihe
own
survival
of
the
free
world,
very
largely depends.
Joins
King Merritt
A DAY
"
(Special to The Financial Chronicle)
•
"
SPRINGFIELD, Mo. — Charles
C. Schooler has become connected
^
tlx
oj
with
King Merritt & Company,
Inc., Woodruff Building.
More than 240,000
With Daugherty, Butchart
(Special to The Financial Chronicle)
market and invest in the
oil
Moreover, the
of
one
exists,
companies, operating at full steam
company's lifeblood.
petroleum that constitutes any
I
^
-
MILWAUKEE,
Usher
is
now
Wis. —John
connected
new
E.
Co.
ever
longer strides, with
new
pipelines and tankers, new dealers, and new and
^
improved petroleum products, unsurpassed in quality.
a
.
.
.
for
significantly, this growth is more than the sign
healthy
a
company
.
.
.
it's living proof of
a
healthy
system in which government, industry, and all citizens
share
refining facilities and techniques, new oil discover¬
with
Paine, Webber, Jackson & Curtis,
605 North Broadway.
Mr Usher
was previously with Schwabacher
&
ies,
forward in
fact that this surging activity
very
to assure further expansion
country. For it again demonstrates the rich harvest of
winning team? Judge for yourself: Today, Cities
Service is pushing
With Paine,Webber
(Special to The Financial Chronicle)
And
of
729 Southwest Alder Street.
A
serves
healthy growth stimulates still more growth.
240,000 people who locate, produce, refine, improve,
...
PORTLAND,
Ore. — Douglas
Crowley is now connected with
Daugherty, Butchart & Cole, Inc.,
x.
people keep Cities Service,
the world's largest oil
an
interest and
Jp
CITIES
s
an
asso¬
ciated with J. D. Creger & Co., 124
North Bright Avenue.
Building.
A.
Clarence D. Goldberg, ancl
world for dominance in the hearts
and
of
Diablo
Three With J. D. Creger
Calif.—
WiHiam D. Clark, George M. Low,
de¬
over
staff
(Special to .The Financial Chronicle)
SAN
cision which of the rival basic be¬
liefs
J.
Winberg
Boulevard.
liver them from the age-old bond¬
age
Mer¬
rick, Donald A. D. Parka, Edward
J. Silveira, Lou E. Turner, MonWedel
;V
;
Joins S. B. Franklin
of connection wher¬
complete
a
WALNUT
liam
ended Dec. 31, 1955, at
year
which
electricial wiring is used, as
line of ma¬
chines and tools for attaching the
ness
the
ended; Aug.
.
,
vide
Join F. W. Maisel
and
will "be
ing offered by the company to
employees, the unsubscribed por¬
19
obligation toward each other.
@ SERVICE
Progress through Service
■
•
20
(2084)
assumption that
Does Lower Profits in Britain
Noted
PAUL EINZIG
-JY ~ *
*: *•'
By
,
out of their
British
economist
explains
Rises?
'
'
; •-
advantages
the
dis¬
and
profits. In crediting-disirfflationary measures for ending the
wherein increased costs were added to sales price as
matter of course, Dr. Emzig shows that it has tended to
i
fptofits
LONDON, Eng. — The accounts
leading British automobile
manufacturing concerns showed a
who
live strictly on their income
allow themselves to be influenced
of two
by the Stock Exchange prices of
.
spectacular decline in their profits / their investment in their decision
whether
uuringthe
past
their
The
year.
trading profits ;
Y
/
S
'
.
■
.
Motor
V.
-
'<•
Standard
of
''
'
-
i
,
declined
pany
km
.*
i,
by
75%,
some
incomes
for
luxuries
by
the
group
Declines
an
the
to
motor
industry, even
though that industry has been hit
harder than most by the change
in
the
economic
British
Motor
plains
its
in
climate.
The
Corporation
annual
ex¬
that,
report
One
of
excess
ments in
tain
far
was
decline
in
from
sufficient, the
with concern.
the
Cruttenden
of
Cruttenden
members
of
Stock
the
New
&
York
has
credits. "The mopping
chasing
maintained
was
the
achieved
power
pur¬
ment
to
or
the
limitation
instalment
of
selective
credit
consumers
credit
not
tions,
this
mean
that
duced by
re¬
rises in costs.
During the last
ish firms made
meet
were
valiant effort to
a
increased
Brit¬
year many
costs
of
out
their
profit
margins.
Until
recently
during the pastwar period any in¬
in
crease
costs
sale prices
and the
its
to
the
of course,
buying public was willing
to pay the higher price.
effort
trend,
the
since
rise
the
hortations
desired
flationary
for
figures
goods,
of
demand
For
tends
raise
to
thing
one
the
supply
goods, such
quickly to the increase in the de¬
manu¬
of
active
ex¬
disin¬
adopted
by
non-durable
mand
ing
that the
so
prices. To
set
by
of
decline
durable
put up their
extent this is off¬
some
the
goods
in
much
bv
the
sta¬
rigid, and their supplies are
more
easily adaptable to
changes in demand, than those of
non-durable
goods.
We
that the
Have Inflationary
economic
atmosphere
Consequence
affected
The accumulation of inventories
compelled
manufacturers
from
raising
in
spite
crease
of
wages
they
in
actually
effort
an
and
to
other
and
cut
in¬
costs.
only
Other
fraction
consumer
its
during the past six months
disequilibrium is very precari¬
ous.
The volume of
chasing
crease
In
set
continues
power
as
a
consumer pur¬
result of
to
rising
in¬
ity
such
national
redistribution
a
income
tends
to
of
dis¬
be
tinctly inflationary. For recipients
of
wages
soend
a
larger
tion of their, income
on
propor¬
consumer
goods than recipients of profits.
The .decline
sult
in
sumer
some
of
reduction
demand
for
especially ,if; it is
a
decline
trial
in
the
equities.
profits
may
in
re¬
con¬
luxuries,
Qoeompamed
by*
prices of indus¬
Even
shareholders
that
announced
Podesta
the
A.
/
point
view
A,
is
company
effective
Podesta
He
is
Nov.
has
is
the
of
one
underwriters
ners
Donald
are
Glenn
R.
tenden,
Cruttenden
and
firms
have
cessor
stimulates
claims.
wages
prevailing
labor
sume
that in
profits
the
since
in
1930
ment
of
its
a
Railways
fact
are
that
working
for
&
from
at
heavy loss does not prevent the
unions
of
its
pressing-for
Employees
industrial
firms, on
postwar experience,
to
assume
can
the
basis
La
are
cies
the.
invest¬
their
Co.
20
200.
in
to
erts
and
many
on
unions
higher
are
wages
likely
on
the
can
a
sav¬
the most
con¬
deficien¬
cause
for
reserves
operations
ability
keep
the
by
and
would
larger
the
lim¬
(now 12.%'%) of sav-1
ings capital of individual associa¬
tions.
Once an association found
itself at the limit of its
borrowing,1
not
only
did
means
have
part
of
of
cash
form
short-term
very
primary
a
of
to
their
with
vided
&
the
staff
Co.,
Charles
of
9486
Seid
and
C.
Governments
reserve
than
as
they
do
U.
This can best be pro¬
maintaining a primary
of
cash, due from
Government
S.
maturing within
have
one
securities
year,
resorted to for meeting every
net
loss
of
deposits, this valuable
expedient might not be
for
Wit|i King Merritt
ANkELES,
Reliance
are
with King Merritt & Co.,
Inc.,
South
Broadway.
He was
become
Co."
time
Fcrm Jensen & Stromer,
(Special to The Financial Chronicle)
Calif.
Jensen and Gordon T.
opened
Street
sen
to
offices
engage
and Stromer.
bofd
and
Donald
in
at
a
—
Ralph
Stromer
426
by
Fifth
securities
•
rities
large
so
as
the
lacks
market
adequate
the
make
to
inadequate
reserve
when
for
depth
at
a
secu-
and
up
borrowing
to
take
heavy maturing mortgage com¬
mitments
or
borrowing
chase seemingly
to
pur¬
attractive invest¬
of Jep- ments is not a prudent practice
H. Derick God- 'for savings institutions. A savings
name
J.
Blake
joined the firm's staff.
have
institution
heavily
to
con¬
paying
loans to
1
Fortunately net withdrawals of
funds by shareholders that would
have created a serious
emergency.'
not
develop at this juncture.
Program
for
Liquidity
be
of
adequate
liquidity at
through the meas¬
cost
I have discussed.
summarized
They
follows:
as
may
--
a primary liquidity
vagainst the possibility of
reserve
deposit
10%
of
may-find that it is
indebted
to
losses
equal
to
5
deposits, depending
deposit behavior in
ahead.
This primary
period
should
serve
cash
and
consist
due
include
the
so
lending
re¬
of
banks
S.
U.
with
the
mainly
from
to
upon
expected
and
Government
maturities
up
to
year.
(2) Maintain
a continuing fore¬
receipts and disburse¬
cast of cash
ments,
to
the
whether
see
cash
flow promises to cause a reduction
or
increase
an
quidity
the
be
the
nearer
Maintain
re¬
mini¬
secondary
a
equal to
serve
primary li¬
will help
primary
the maximum level.
or
(3)
the
This
whether
serve1 should
mum
in
reserve.
oecide
10
to
15%
re¬
of
de¬
posits, to supplement the primary
Intermediate
reserve.
term U.
and
up
S.
and
long-
Government securities
other
rities
of
this
would
meet
interest-bearing
highest
to five
for
grade
secu¬
maturing
would be suitable
years
Such
reserve.
a
reserve
be
particularly helpful to
relatively heavy net with¬
drawals
of
in
deposits
which
could
period of business
a
re¬
cession, when interest rates would,
probably
high.
(4)
due
be low and
Minimize
to
the
bond
prices
liquiditv
maturing
needs
of
heavy
mortgage commitments by limiting
future
commitments
riod to
a
tion
for
each
pe¬
volume of mortgage loans
that will
correspond to amortiza¬
receipts which may.reason¬
be expected on mortgages
ably
held in the portfolio.
Warehousing
could../l?ejutiliz*$ occasionally to
help keep, mortgage absorption in
line
with
funds
expected
to
be¬
available and earmarked for
come
the purpose of
taking
up
mortgage
commitments.
to
row
ture
meet
net
power
up
for
power
to bor¬
possible heavier fu¬
deposit
refraining
withdrawals
from
the
mortgage
exhausting
purpose
of
commitments
by
this
taking
or
of
making new investments. Borrow¬
ing, for a savings institution, is
properly
resort,
breadth.
Continuous
cease
was
for
need
(5) Conserve the
on
source
primary
MARY SVILLE,
caused
borrowing as an
of liquidity would
be appropriate only in the con¬
tingency when net deposit losses
ultimate
formerly with Sterling Securities
L.
emergencies
its role is most vital.
Calif.—Frank
Burke^and Pauline Scott
1151
real
available
heavy net losses of deposits, when
(Special tmTHE Financial Chronicle)
LOS
rather
by borrowing.* If borrowing
were
Monica
Boulevard.
C.
banks
than
Shelley, Rob¬
Santa
by
reserve
the
its large outstanding
and
possibility of withdrawal
savings.
borrowing
provide liquidity, but it
fronted
occur
Besides
mortgage
were
ited to 10%
Were it not for
banks
far
in
heavy
borrowings
commer¬
discount at the
banks, member
to
Reserve
a
assets
Calif.—
G.
business under the
insist
require¬
New
HILLS,
abseppe, of
demands,
in
even
commercial
formed,
was
to
have
margin out of which to meet wages
when
sequently,
difference
control, the Federal Re¬
Federal
(Sprcial to The Financial Ci'ronicle)
inclined
adequate Rrofit
of
liquidity
of other measures.
brokerage
1942,
when
easilv be passed on to the con¬
For this reason even in
#n
more
commercial and
System
in
market
prede¬
Shelley, Roberts
BEVERLY
of
sumer;
time tnat
in administering its function
serve
and
offices
Joins
of
that any wage increases
their
re¬
It has baen
today.
y ■ •?*.
* ' 4
York,
Savings banks, because of the
Denver,
Lincoln,
St.
Louis, relative stability of the volume of
Omaha, Milwaukee, Grand Rap¬ funds entrusted to them, need only
ids, Madison and Cedar Rapids. •>. a 5-10% reserve for
liquidity to
employees
from
high wages in in¬
creasing intervals.
time
net
consist
of credit
headquarters at 103
Salle Street, the com¬
has
pany
now
the
'■
from
or
require
world
the
a
mem-.
commitments were-maturing. Sub-'
one
reserves
over,
Chicago
South
in
would
'i'■
.•
servatively managed banks. More¬
personnel of the company has in¬
creased
when
they
a
Home
on
increasing borrow¬
ings at the Home Loan banks at
a
securities
is
emergency.
Federal
savings and loan associations
could
when
real
a
the
A savings bank can assure itself
Deposits in commercial
mainly of checking
accounts
subject to erratic and
unpredictable fluctuations which
may result in occasional shortages
active
Since
Cruttenden
as¬
decline
demands
The
wages.
a
unions
with
man-,
would
to refrain from
A
ings bank.
of
general
the
banking
business.
how¬
mistake to
face of
trade
their
renounce
higher
British
a
the
institution
(1) Maintain
■■ ■■
impaired.
are
ments of
Amidst
shortage,
ever, it would be
ber
did
bonds, but could
interest-bearing se¬
highest grade maturing
'
between
Stephens,
its
joined
It Is true, the
in profits
to
other
There
leading
been
to
increases
equal
cial banking system through op2n
Jack
of
conditions,
year
ilarly
Miller, Walter W. Crut¬
and Donald R. Bori-
Barlow,
evidence
reserve
liquidity.
Jr.,
Sattes
argument, however.
borrow
repay
the
of
savings banks should borrow sim¬
niwell.
of
this
liquidity
suggested from time to
Other part¬
B.
Harold ' L.
attached
cannot
the Federal Home Loan banks.
so
of deposits is a valuable
■
serves
be?n
distributors
and
investment securities.
impor¬
be
it
Loan Bank Board called
to five years.
banks
midwest's
mands.
must
Last
V
off
be¬
and
primary
correspondents
15.
graduate of
a
profits has one advantage.
It
tends
to
discourage wages de¬
exaggerated
issues,
Commercial banks borrow from
There will be no change in the
organization of the business or in
operations of the company, which
in
No
the
secondary
meet the
of
!■,
pressure to
such
faced
ures
Podestn
to Cruttenden,
name
Co.
&
'Robert
checking the inflation, the decline
wages.
theory this factor is partly off¬
by a decline in orofits. In real¬
Robert
Capital-Flow
the
are
stable
The
their
Wages Demands and
tance
goods
small
,
consumer
still rising and even if the
average
cost of living has been maintained
Britain
trend.
From
a
in
prices is not
sufficiently widesnread to make
a
fundamental difference to the
output.
however,
change in the
relatively
a
of
prices in
inventories
of the total turnover of
goods,
reduction
their
The number of items in which
such cuts have been effective
rep¬
resent,
only
pointed
proportion of durable goods.
instances
of
reduce
to maintain
ab¬
selling
further
a
number
a
to
their
of
Cruttenden
changing its
more
credit
obligations
the Federal Reserve banks
durable goods are, however, much
measures
judging
prices
prices
resulting from
prices of
out above
Indeed
the
the smaller demand. The
consumer
tistics.
stain
as
additional buy¬
pressure tends to
for
instalment
May
of
the
stop
W. W.
Northwestern University.
land products, cannot be adjusted
More¬
Borrowing for Liquidity
community.
prices.
conditions do
under
be
moderate
up
probability the majority of them managing partner and director of
since he
joined the
would spend more on non-durable operations
goods instead of spending on dur¬ company in 1949, Mr. Cruttenden
said.
Mr.
Podesta, is a veteran
able goods.
And the chances are
of 25 years in Chicago's financial
that such change in the trend of
These
demand
durable
have
most
produced
however, had
the
the Govefnment.
the
save
ever
by reducing
measures
affected
will
they would
been
have
results,
been
they
which
necessarily
otherwise employed in such trans¬
actions.
On the contrary, in all
rising
amount
would
not
>
-
in-,
previously
incurred
impairs liquidity. ^ Were,
net withdrawals of funds to occur
today
engage
has
to
necessary
No
amounts
does
collateral
possible.
term
...
credit transac¬
of
with the passage of time in¬
curities of
by-
firms
1955,
profits.
not
the
prices of their
factures, if
their
stem
industrial
October,
in
the
to
Government
exhorting
it
matter
able
and
In
added
was
a
as
sales
into
many
to
-
.
actually
include
the
of
control,
unable
are
that
while
more,
term Government
such
by
institution
supplement to the primary liquid¬
ity reserve of a savings bank.
This reserve would be composed
mainly of intermediate and long-
posits and shorter terms of repay¬
amount
in new instalment
Profits
market
short-term
A
distinctly disinflationary.
On the other hand, if, owing to the
compulsory fixing of higher de¬
previous year's level, the
expected expansion in demand did
materialize.
make
10 to 15%
is
means
con¬
reserve.
new
of
up
securities
relatively low rates
borrowing be desirable at
termediate
old
of
of
amount
that
at
come
hand,
one
bond
is
the best kind
when
over,
a.id
Exchanges,
and
Another
Government
loans
not
Co.,
-
although turnover
at
rise.
should
W.
re¬
deposits to
decline
to
to
times
111. —Walter
Govern¬
occur
tend
stitute
New Firm Name
of
during periods of
recession, wnen interest
to
S.
for
CHICAGO,
losses
of
on
rates
Cruttenden, Podesta
longer-term
that
business
/
favor
degree that might place a strain
primary liquidity are more
a
likely
profits must be viewed
in
secondary liquidity
a
is
serve
Rise
repayments
the
over
the
to ab¬
reserve
portion of the
consideration
including
that .even
during
the,
boom years the volume of indus¬
trial capital expenditure in Bri¬
instalment
on
credit produces, on
credits
confined
Price
restriction
of comparable
not
this
on
move
Non-Durable
The
magnitude
are
valuation
agement
for
in
wages
a
of a decline of the ability
and
willingness of investors to provide
much needed risk capital. .Con¬
Midwest
down by
43%.
Einzig
offset
demand
;
v
it-
*
debtedness
resulting from the increase in the
of
of
nance
U.
than
in
•
•. »
ex¬
a
fall in profits is
contribute towards 1 sorb losses
primary and secondary necessities
share
the
reasons
-
■
of
more
v
:
V-
some
save
fall in demand
V ,:r"
V
to
^;
prices
Corpo¬
were
above
willing
Y U kJ
of
national income.
British
rate
Paul
is
increase
relative
Motor
f
to
a
be
the limit
to
or
The effect of
the
**///('*
Dr,
spend
while those of
"Swi
1
%
Com¬
it.
to
would
sidering
"Ond discouraged risk capital-flow.
squeeze,
^
-
-
which
to
4
*
.
•
inventory accumulation, non-durable goods price rise,
cause
the
to
Continued .from; page 13
checking the.inflation is limited. "secondary reserve"- portfolio
Such advantages as it may entail. would permit sales below cost at
from this point, of view are more times of low bond prices with' less
than offset by the disadvantages adverse effect on surplus.
process
a
For
likely
advantages arising ^rom efforts to-meet increased costs out
of
whole
a
em--
increase
Thursday, November 15, 1956"
.
profits the community
pay, higher .prices Y.
tent
•
if their
even
pioyers cannot afford'an
as
Check Inflation and Wage
v
The Commercial and Financial Chronicle
9
source
a
and
of credit of last
source
not
a
supplementary
of investment funds.
Many
savings and loan associations have
learned this lesson during the
past
year,
when they have found them¬
selves
heavily indebted to pay for
past investments that seemed at¬
tractive
more
at
the
attractive
■
time, 'while *far
ne\y
investments
Volume 184
V were
later
,
Number 5586.
*.
becoming available to tliem
on.
-
iDIiftli l&uihii ftff Are' "T''.
Slylll ItfUUp UnclS
*
j,
A savings bank may not be in
!i position to put into effect immedi-;.
ately the entire liquidity program
I have discussed.
But every
can
bank
DaiakkiiM Phm
.
.
■000 and net income was $1,3X1,000,
$35,144,000.-and .$1-
Qhc
underwriting
group
f34'00(V respectively, for;the siinW
lar_period of 1955.
+
'
' *
;
headed "
"Second thoughts
Reichhold Chemicals is the larg-
!isurface
isl-cpatingjesms.-.Other, products m-
position
200,000
shares
of
° nl
first
than
check
has 13 plants in this country
pany
^
The-.net"proceeds, of the current
sale of
common
stock will be
Congress.
sinee lts incorporation ln. 1930>
general Reichhold Chemicals
has paid no
:
funds to "increase working capital
cash
dividends
on
its
common
E. Jansen Hunt, partner and and to aid in the corporation's stock with the exception of one
syndicate manager of White, Weld 1957 construction program. Pres¬ in 1932. If has been a policy of
contemplate expendi¬ the
& Co., New York City, was elected ent plans
company to reinvest earnings
tures of approximately $3,000,000
President of
the
Association of
in manufacturing facilities.
during the forthcoming year for
S t o c k Ex¬
After the current sale of com-
added
Exchange Firms Ass'n
the
to
Tuesday's
will be able to keep a
spending and other measures in
"
:
confident that con¬
are
.
.
*.
,
:•.
company's
"AlsOj
.
t
We
appeared.
taxes,
on
P
Hunt, President of
on;the subject of
servatives in both parties
~
21
voting show that the results were more encouraging
Reich-
stances permit.
-
W it hi n^Limit sy - Yesy - b u t
- compared" to
•
nBIClillOaU (jOllli wlISi
An
a strong liquidby proceeding along sue'of
these lines as rapidly as circum-
*
•
<
(2085)
by. Blyth & Co., Inc., yesterday
(Nov. 14) offered publicly an
place itself in
ity
Chronicle
The Commercial and Financial
of
areas
pleased by the fact that industrial
we are
the
showed
country
strong
Republican
-
Connecticut,. Illinois, Ohio,. New York
In
trends.
particularly
and Massachusetts the trend was
pro¬
M
change Firms
for
the
year
1956 at the
th*rni!nvnn~
V
an-
stock it is the intention of
the, Reichhold Board of Directors
amen
w
and
of
development.
Mr.
Hunt
served
on
Chair¬
of
man
Reichhold
net
of
Officers
of $2,075,000
$53,573,000. In the
taxes
net sales of
cents
holders
income
of
cash
in
in
1%
and
directors
and
record
Jan.
record
24,
will
beneficially
and
member of the Business
How
own
about
Advisory Council.
,
heartening it would be if either of the great
parties could really be regarded as consistent
ers
of the offering.
completion
upon
legislatures in those states will be
1957.
75% of outstanding common stock
eight-month period ended Aug.
31, 1S56, net sales were $39,164,-
1951 and has
been
1955
realized
Federal
at\er
the
since
Board
year
Chemicals
has
on
the
For
of Governors.
15
stock on each share of common to
°aF
The
friendly to business as a result."—An unidentified
quarterly -dividends
declare
to
oroximately Sl 0MM)00onresearch
?r0,xl^.a:?f?il'_"U,UUU on researcn
nounced.
keep¬
of American traditions!
its
Public Rela¬
tions Commit¬
\
tee since 1953.
E. Jansen Hunt
He
is
past
Chairman of
the New York Group and
•
"i
Gov-
a
ernor-designate of the Investment
<
Bankers
•
Mr.
Association
Hunt succeeds
America.
of
James
J.
Lee,
Hutton
&
Co.,
•
partner
of
W.
E.
New York.
Lloyd W. Mason, Paine, Webber,
Jackson & Curtis, New York, and
i
1
\
Lloyd C. Young, Lester, Ryons &
Co., Los Angeles, were elected
Vice-Presidents;
and
James
G.
Tremaine, Gude,'Winmill & Co.,;
New York, Treasurer.
■*..
."
'
•
-
•New
Governors, elected
to the
"Board qf 35 at the annual meeting
of members held .'earlier in the.
'.day
;
Edward
are:
N.
i
N.
X: '
*
-V ' \ '
Carpenter,.
Jesup
&
Lamont,
New
York;*
Henry I. Cobb, Jr., De Coppet &
Dor em us,; New York; William C.
Coe, Mackall & Coe, Washington,
•
•
D.
*•
I
;
1956
C.;
Re-elected
were:
;
-
-
•
York;
>
Jr.,
Charles
Moore,
McKenna
Leonard
i
^
J
:v.
Operating Revenues
Electric
-1
Stone
den,
Co.,
&
New
Lester,
Ryons
&
as
mittee
Cortesi,
the
for
1957
'0
:.OU
I
.
■
come
•••
connected
Reed
O'Neil
with
have
Thomas S.
-
K
.<
•
'v
•
$
5,886
8,163
3,130
.......
1,226
1,118
.
.
.
.
.
.
.
775
807
4,761
3,184
.
.
.
.
.
.
.
1,403
1,530
137
81
5,783
492
3,040
4,122
3,159
5,661
$
8,009
$ 7,746
$32,500
$30,291
$
2,240
$
2,142
$ 8,724
$
$70
$
32
153
taxes
.
Other i
Income
.•
.
.
.
.
.
.
.
;
•
.
.
.
.:
.
taxes
\
(D
.
.
.
.
.
.
.
.
(D
taxes
.
.
.
.
.
.
.
.
.
.
.
1,546
1,965
-
260
,
8,314
122
.
4-
.....
.
income
66
$
23
344
160
2,306
S
2,165
$ 9,068
$ 8,474
$ 2,684
$
Deductions
on
first mortgage
interest
expense
Interest "charged to
Other
h
$
$
.
Interest
Other
bonds
.
.
.
,?'r Net incqme
•
•
.
.
;
Preferred'Dividends
.
•
...
..
r
.
j
;i..
.
> •
.
67
483::
377*
construction
27
.
.
2,483
142
.
.
Total
$
......
.
.
.
•
.
.
$
.
v
.
.
.
.
.
1,636
,
S
.527
.
<
27
$ 2,476
$ 2,094
$
6,380
216
$ 6,592
860
1,422
$ 5,732
2,401
$0.59
2,651
2,401
$2.16
$2.30
$ 1,638
216,,
.
.
670
$
.
"
-
860
n'*^
Earnings
Earnings
*
per
Denotes red
common
at
.
.
.
$
1,420
S
$ 5.520
End of Period
2,651
$0.54
share
figure
.
Federal income taxes for the periods
reflect the effect of using accelerated depreciation in the 1954 and 1955 tax returns.
interim statement. The Company's fiscal year ends December 31, at which time its financial state¬
examined by independent public accountants.
1
1. Reclassifications have been made from Federal income taxes to deferred
ended September 30, 1955 to
2. This is
ments
Calif.—
He was 'formerly *witli
Herbert H. Wigh.& Co.
.
shares
Outstanding
thousands)
(in
&
Wi Holmes i Opens V .1
on common
Common Shares
be¬
Aronson
an
are
COLUMBUS
"*>
506 Montgomery St.
$ 6,412
8,738
Jew, Chris. A. Mitchell
D Street:
$
699
Gross
g-
MADERA^ Calih—»B avid ;W.-.
vH61mes is conducting-a .securities.
-I'h bu3mifes£frm'b£nc€s at 124 South. V
-
.
$ 9,888
$
*
.
.
.
Total
•'
,
j
$10,249;
-
Columbus Transit Company
1?:3
&
-
r
30
$38,605
:
•
Columbus Transit Company, less expenses
.
or reduction of reserve for deficit of
(Specialto The Financial Chronicle) -v.". i.
.
32
$41,224
1
•
Increase*
•
'*•'r
$38,575
Rentals and interest income from
and Masao Sakai have joined the
staff of Mutual Fund Associates,:,
.L Incorporated,
$41,192
V
.
.
,
r-:
•
•
Operating income
Three With Mutual
FRANCISCO,
'
767
(Special to The Financial Chronicle)
SAN
•
•
$ 9,888 ..
1,552
NOTES
-
.
•
i
.
Other Income
Co.„ 426 South Spring Street.
r
•
#
,
2,149
Total
ANGELES, Calif.—Leo M.
and
■
$10,248
•
*
•
•
production
Deferred Federal income
(Special to The Financial Chronicle)
LOS
•
•
•
•
.
operation
Federal income
-
Katz
'
•
*;.
1955
,
'■m
■
.
Roger
Two With Aronson
.
:
•
'
Depreciation and amortization
Redpath, New York; Horace W..
Frost, Tucker, Anthony & R. L.
Day, Boston; William. M. Meehan,
M. J. Meehan & Co., New York;
John J. SullivSn Bosworth, Sulli¬
van
& Co., Denver; C. Newbold
Taylor, W. H. Newbold's Son &
Co., Philadelphia.
'M
.
m'm
•
...
•
1956.
.
General
Co., Los
Parker
.
•
•.
•
•.
r
-
(000 omitted)
•
York;
were:
«
.
Other
Nominating Com-
Auchincloss,
■»
>«
*
"
•
Maintenance
Angeles.
Elected
....
Fuel used in electric
Edward F. Thompson, Jr., Lamson
Bros.
& Co., Chicago;
Lloyd C.
Young,
Heat
-
Operating Expenses
"*
Pittsburgh; Wickliffe Shreve, Hay-
•«
Total
Lynch,
Lynch,
&
"1955
.
'
"
Henry M. Cook,
ended September30
ended September SO
Newhard, Cook & Co., St. Louis;
John
H.
Kitchen, George D. B.'
Bonbright & Co., Rochester; Robert J. Lewis, Estabrook & Co., New
;
For the twelve-months
For the three months
x/?
Brittin C. Eiistis, Spencer
Trask & Co., New York; J. Emerson Thors, Kuhn, Loeb & Co New
York.
RESULTS OF OPERATIONS
"
KfI
X- VP!
'
'
AND SOUTHERN OHIO
215 North Front Street
•
ELECTRIC COMPANY
Columbus, Ohio
urt»kLL.'
-
£2
The Commercial and Financial Chronicle
(2086)
Thursday, November 15, 1956
...
able reduction in holdings of pre¬
Stocks.
ferred
Bank and Insurance Stocks
attractive
more
A
comparison
of
—
Dec.
the
31,
as¬
fire-casualty insurance
companies whose stocks
actively
Insurance Stocks
traded
more
are
brings
out
some
interesting points.
The accompa¬
nying tabulation distributes assets
into principal categories.
The
feature
that will
at
tention
of
this
once
is
generally adhere to
their equity holdings.
been
substantial
and
ment
obligations
to
United
Cash
of
to
ing of equities at the 1955 date
than at the earlier year-end.
into equities during
sustained
a
bull market; and the companies
that made the greatest proportion¬
ate
ones
pro
changes to equities are the
that registered the greatest
rata gains in portfolio valua¬
tions
in
two
the
past two years.
units
referred
showed
to
bring about resort to
Assets,
December
31
Bonds
%
%
Pfd.
.
1955
Misc.
Stocks
Invest.
Assets
%
%
%
Market
'
3.6
9.1
1.5
9.1'
0.4
19.1
1.5
9.7
Nil
—1.6
9.6
2.9 3
9.7
17.1
14.4
8.8
11.l"
22.5
27.7
5.5
26.5
4.8
8.0
30.0
1.9
17.1
24.8
5.1
9 9
1.8
Nil
15.3
24.5
10.0
37.6
9.9
52.0
0.5
4.5
25.0
47.4
4.3
4.0
34.6
:
7.0
Nil
increases
poor
in
34.6
7.1
11.7
26.9
2.0
6.8
23.1
6.8
36.6
0.7
9.9
—0.6
3 5.1
11.1
37.0
0.8
5.9
13.3
18.1
2.4
55.5
1.1
7.6? ';V —0.7
.
..
Nil
the
__________
43.0
4.1
10.6
27.3
6.0
39.1
14.8
4.4
32.3
fire
of
that
J 946
5.5
21.4
12.1
10.9
2.9
units
1955
2.9
11.5
18.3
1.1
58.4
1946
—0.8
ade
they expanded their premium
into casualty lines, i.e.,
1946
became multiple-line writers. Any
lire company going into such cas¬
compensation, auto¬
bodily injury, etc., would,
of necessity, have to maintain a
relatively liquid portfolio. This is
bow
when
know
never
long the loss
is injured
loss
a
may
worker
occurs
a
As,
in
recent
there
years,
ualty lines by fire companies, and
vice versa, this could
influence
portfolio changes considerably.
Iheir holdings of tax-exempts. But
the
ward
Office:
West
End
26
London, E. C.
(London)
Aden.
Uganda,
Kenya,
Authorized
23.9
0.1
0.7
10.5
8.2
1^.8
1.7
9.6
7.4
54.8
5.8
10.1
,11.6
3.4
6.9
Nil
25.6
31.0
6.8
20.4
1.3
11.4
—1.6
10.4
22.0
7.7
16.6
35.2
0.1
8.0
5.6
Branch
Capital
14.3
14.1
10.7
46.5
2.4
6.7,-
38.0
8.6
12.2
24.6
26.8
16.6
8.2
32.1
16.9
40.8
7.3
12.6
12.2
1.3
8.9
Nil
5.0
33.0
19.4
11.6
23.3
0.8
8.2
—1.3
17.9
24.5
4.1
8.6
35.0
2.1
7.8 : v ,-r
*
6.6
19.2
22.2
3.3
41.1
13
6.6
—-0.3*
9.4
Nil
14.0
—1.4
—
-
-
>
V
8.9
20.9
4.4
5.0
18.3
11.6
39.0
5.3
22.0
46.0
18.5
2.0
6.5
0.9
8.7
N'l
*
'
*;•
-^0.5'
11.1
1955
."
.
.
4.2
35.6
19.7
7.7
1946
12.6
50.6
5.0
6.8
1955
8.3
14.4
30.9
-
3.8
'
31.7
13.9
,
5.3.
3.2
4.3
24.8
1
7.0
.
'
1.5
7.5
4.1
10.2
3.1
33.3
4.2
16.8
1946
12.8
33.3
1955
11.1
10.6
•
0.8
11.5
14.1
5.8
•
28.8
25.8
1.3
0.9
29.8
3.2
.14.2
—1.4
Nil
—0.2
,
0.2
'•
14 4
11.3
36.0
40.5
3.7
6.8
29.4
29.4
13.5
5.5
8-4
41.9
,
L7
,
.
0.1
Nil
5.4 *
4.4
44.5
0.8
3.2
41.4
3.3
3.1
?
—0.5
43.2
9.4
34.2
6.9
16.5
24.5
3.7
15.9
9.4
39.0 5
4.6
27.3
21.8
16.5
16.9
6.5
1946
6.2
10.6
51.1
9.8
10.2
1.2
1955
4.1
3.3
55.1
1.0
25.7
1.7
6.6
16.7
4.3
10.8
9.9
25.5
6.3
12.1
34.3
1.1
7.4
Nil..
-
6.4"
1955
-
*
.
26.2
,
1.8
,
43.6
0.6
,
7.9
Nil
„
6.5
Nil
1.2 '
10.9
2.3
#
Providence-Wash.
2.3
*
11.6
25.6
Nil
-
8.4.
—2.0
Fire
10.9
Nil
9.2 i,
—0.1
12.2
43.7
5.7
5.9
15.0
25.3
Nil
"
'
Springfield
*
Nil
:
1946
7.6
39.0
7.4
12.8
21.3
1.5
10.4
Nil
1955
3.4
23.0
22,3
7.6
33.5
3.9
7.5
—1.2
16.5
41.5
4.8
5.0
25.1
0.1
7.0
Nil
6.0
32.0
15.0
4.5
37.2
0.1
5.9
4.2
55.8
8.0
7.7
13.4
1.4
9.5
Nil
3.7
7.6
52.0
5.4
22.3
0.5
8.5
Nil
Fire
1946
1955
—
'
'
42.7
2.0
1.6
17.0
12.9
11.8
7.0
45.5
14.4
1.5
14.0
7.8
11.4
14.4
41.4
8.3
7.1
14.8
4.5
9.5
Nil
8.1
20.1
33.8
2.6
26.4
4.1
5.7
—0.8
12.8
63.7
1.2
4.2
6.5
6.6
5.0
8.7
31.7
13.9
7.8
31.0
3.7
9.2
41.6
3.5
12.0
16.2
1955
less
Request
—
1955
Bell
(L. A.
Exchange
Exchange
1955
Stocks
-
,
Nil
■
4.4
—1.2
7.2
10.3
Nil
offices
domestic
it
con¬
in
New
City. County Trust Company
than
one-fifth
of
all
com¬
bank
6.7
33.8
22.1
7.8
14.7
6.6
9.3
50.0
1.9
3.0
24.0
0.5
1.6
18.5
25.2
16.2
5.0
33.3
1.9
—0.1
meeting of the stockholders
N'l
1955
U.
a
—1.0
19.0
At
*
#
#
1946
Seaboard
1-1248-49
Bank
of
management.
It
raising
necessary
deposits in West¬
chester
County and New York
City and less than one-seventh of
deposits of all banks including
savings banks."
of
Y.
Manager Trading Dept.)
in
75
Massachusetts Bdg.
1946
Teletype—NY
Glbbs,
Specialists
programs,
assurance-
facilitate
mercial
Fidelity & Deposit
Laird, Bissell & Meeds
Stock
training
able
Continental Cas.
1946
American
of
operates 39 offices in Westchest2r
—1.6
:
Surety
Fidel. & Gty.
1946
1955
The
Chase
New York
of the bank
11.0
52.6
2.3
5.4
15.9
2.3
10.5
6.1
19.4
35.0
6.8
20.2
1.8
11.4.
Nil
"
—0.7,
Manhattan
held
on
Nov.
Bank
13
it
of
was
voted to increase the caoital stock
S.
?
held
be
to
at
14.
Nov.
stock warrant
a
evidencing
right to subscribe to
share
for
each
new
one
held.
shares
12
In
explaining the board's recom¬
mendation,
John
J.
McCloy,
Chairman of the board, stated that
the
directors* believe that addi¬
tional
the
capital
will
funds
interests
best
serve
both
the
of
the
and
general
public.
At the Nov. 13
Cloy
also
holders
meeting Mr. Mc¬
the
informed
that
stock¬
the
for
contracts
structural steel for the bank's new
building
had
project
been
awarded and that the contract for
the
foundation
awarded
would
work
during
the
be
few
next
weeks. He also referred to the fact
that the New York City Board of
Estimate
had
the
to
plan
Street
return
for
cede
which
approved
portion
a
the
in
the
to
recently
include
Cedar
of
project, "in
the
bank
will
City
strips of land
surrounding'
the project with a total area ap¬
proximating
the
Cedar
Street
area.
.Constructing costs of the
new
building and plaza, which
will occupy most of a two square
block site bounded by Pine, Nas¬
the
on
four
streets
William and Liberty Streets,
McCloy added, is presently
estimated at $94,000,000. He said
sau,
Mr.
in
that
addition
construc¬
the
to
tion cost,
$16,000,000 had been ex¬
pended for land acquisition and
development, and it is estimated
that the cost of furnishings and
special facilities would approx¬
imate $11,000,000. He pointed out
a
substantial portion of the
by 1,000,000 shares to
13,000,000 shares,
by
the board
of
recommended
directors. More
as
of
the
project will be offset
by sales of properties, some al¬
ready made, which have orginally
bank's head office ac¬
housed the
tivities.
is
It
the
planned
to vest
building in a
new
title to
wholly-
subsidiary and Mr. McCloy
announced
that negotiations are
owned
under
institutional
an
the
for
placement
of
a
first mortgage on the
building and plaza..It
$60,000,000
bank
new
with
way
investor
book
the
that
value
is
estimated
of
banking houses and the bank's
total investment in this real estate
subsidiary will aggregate approxi¬
mately $70,000,000 when the build¬
ing project is completed.
*
*
of
York
New
its
new
La
* ■
•
Citv
National
First
The
opened
on
Exposicion
T
Bank
Nov.
Branch
12
in.
bringing to 70 the
number of its overseas branches,
offices
and
affiliates.
The new
City,
Panama
branch
is
the
second
in
route
of
the
on
,
the Isthmus of Panama.
Canal
trade-vital
other branches
The
Panama
along the
City and is the fourth
Panama
at Cristo¬
are
bal and Balboa in the Canal Zone.
County. The group to be formed
by these proposals would have
Nil
1955
BROADWAY, NEW YORK 5, N.
Telephone: BArclay 7-3500
and
"First National City Bank oper¬
York
|
12.0
.
low unit
people of Westchester County by
providing County Trust with ac¬
cess
to the
varied banking and
trust services supplied
by First
National City Bank at home and
abroad,
and
by
an
increased
ability to meet the growing bank¬
ing needs of the county, At the
same time it will leave the County
Trust Company what it is today,
a
Westchester County institution
operated by the same officers, di¬
rectors and
community advisory
committees
who
are
thoroughly
acquainted with local conditions
and requirements and who enjoy
the confidence of their,, communi¬
ties. It will not lessen competition
in any respect.
ates
Casualty
1946
•
a
capital to support future growth.
—0.7
•
1946
Members
.
Insurance
1955
Company of
-
"
1946
North America
120
"
—0.7
Insurance
1955
Stock
can
1.0 • :
3.3
'
—
American Surety
Members New York
tinuity
Five
1946
on
•
Nil*
8.7
Aetna
mana¬
in such matters,
investment man¬
VThe association will benefit the
——
1946
undertaken
specialized
as
With enlarged personnel re¬
provide
can
8.2
31.1
19.9
•
will be
the
cost
cost.
Aisur.
1946
S.
exchange of
ideas, me.hods, ani
The holding company
development—at
ness
Nil
North River
U.
beneficial
price of
directors
of
that
sources
10.6
.__
Security
time.
same
ownership
the
offering is set by
board
Included with this communication
ice, credit investigation and busi¬
—1.0,
-t'
Hampshire
1946
1955
Paul
Common
a
stock
meeting
trust service, accounting, tax serv¬
Nil
-
"
Phoenix
.
agement, investment-advisory and
Fire
;___
Pacific
.
experience.
provide
gerial talent
for example,
National51 Union
Trusteeships and Executorships
Bulletin
First National City Bank
8, and to a special meet¬
of County Trust
Company
can
"
35.3
10.0 *
14.8
"
bene¬
a
of
sible
Nil
No. Am.
1946
share
one
plan will be submitted
mangement
1955
1955
for
City Bank. Each
of the
stock of our institution by a Hold¬
ing company will establish a com¬
munity of interest and make pos¬
Insurance
Northern
York
shareholders about the
.
3.7
1955
New
New
and
Jan.
ing
Nil
—0.3
7.2
1946
J
£4,562,500
£2,851,562
ing
Fire
1946
authorities
the annual shareholders' meet¬
on
Insurance
1955".
stockholders after
stockholders
proposal is that the hpld^
Board the
to
5.1
National
Mr.
following
the
approved by the Federal Reserve
—1.4
Co. of
and
ficial interest in the shares of City
Bank Farmers Trust Company. If
N'l
32.2
Ins.
Trust
in
of First National
—0.3
13.6
St.
2.
£3,104,687
The Bank conducts
every description of
banking and exchange business.
Trust
16.2
13.8
1946
Fund__
also
45.1
1955
Tanganyika,
Capital
Reserve
Nil
15.7
1955
and SomaliProtectorate.
Paid-Up
6.2
7.0
1946
Zanzibar,
land
1.3
Bishopsgate,
13, St. James's Square, S. W. 1.
Branches in India, Pakistan,
Ceylon,
Burma,
23.6
13.8
1955
the Government in
Colony and Uganda
Head
8.3
26.4
1946
to
Kenya
2.9
1946
BANK
INDIA, LIMITED
Bankers
48.5
35.9
1946
of
9.2
3.9
1955
NATIONAL
—0.5
8.8
Home
joined
First
of
Nil
8.5
'
most
part, the trend to¬
equities has been note-
9.6
2.5
Insur.
Hartford
Trust
County
Sheperd
company will be called First
York
Corporation.
If
the
Great American
positions on net; and a number of
companies have tended to increase
for
3.6
36.4
1946
With
companies to maintain their bond
26 5
7.6
1955
..
improved yields on high
grade bonds, there also has been
a
tendency on the part oif some
21.7
Glens Falls
has
been much crossing over into cas¬
3.2
14.5
1955
com¬
months, whereas when a fire loss
occurs, the carrier may determine
In a relatively brief time what its
loss potential is going to be.
26.9
1946
If a
run.
is
and
pensation case, the insurance ear¬
lier may have to contribute for
—0.6
27.5
3.8
Hanover
Farmers
Bank
and The
Mr.
af¬
trust
share of the latter indues
__________
Firemen's
as
because the companies writing the
more
hazardous casualty lines
Nil
7.2
3.5
.—
1955
ualty lines
6.1
1.2
Fireman's .Fund
writings
mobile
0.9
-
8.5
1955
City
its
York,
the
shareholders approve,
one
share
of First New York
Corporation
stock will be exchanged for one
share of County Trust Company,
and two and one-quarter snares
Fire Association
tion, it is probable that in the dec¬
New
regulatory
N'l
4.2
—
43.1
either increased bond holdings or
more-or-less maintained this posi¬
cases
a
New
Fidelity Phenix
In
of
"The
ing
24.1
2.7
12.1
11
Oct.
our
A communication will be mailed
to
a
organize
Nil
17.2
Insurance
-i-
1955
portfolio
that appli¬
report
bank's
Wilson
—0.8
v..
6.0
1946
in
1550.
page
new
Company.
Insur.
__________
Federal
the
statement:
1946
1955
issue,
confirmed?
Plains, N. Y.,
8
Company,
7-0
in
voted
were
noted
were
the
filiate
—1.8
8.1
--
shares outstand¬
of the
the
Bank
Nil
6.3
v
Continental
Nov.
change of shares acquire owner¬
ship of The First National City
Nil
■
10 9
_______
1955
matter
Company
permission
holding company,
which, subject to approval by
shareholders of the respective in¬
stitutions, would through ex¬
r
9.6
31.5
Insurance
1946
Trust
80%
it is indicated
eral Reserve Board for
Adjust.
%
Stocks
v.
Other
35.0
3.5
Boston
ing
favor of the increase. Plans in the
and
to
Com.
5.1
Bankers & Shippers
1946
National
York
cation had been made to the Fed¬
Other
Insur.
1946
County
of White
on
11.2
American
than
Chairman
First
New
'
T
5.0
__
of
Wilson, Chairman of the
of
Board
52.0
*
1955
Bankers
and
Sheperd,
of
Bank
Andrew
conven¬
C.
Board
the
City
Insur.
3 94G
valuation.
of
very
*
quite
Howard
a
.•
4.4
_
Agricultural
The
If not,
-
tion valuations again. ;•
15.1
.
1955
1955
It is, of course, a logical move to
go
trip.
1
Insurance
1945
greater proportionate hold¬
a
well
BRANCHES
OFFICERS, ETC.
CAPITALIZATIONS
alert
stocks will be
common
protracted bear market could
-
of
^
governments and cash
to make the return
in
Bonds
•
Ae'na
hand,
one
Only two
companies listed failed
36
chow
the
on
Govern¬
stocks.
common
the
States
quality
U.S. Gvt.
most companies from both
cash
jn^0
quite notice-
a
shift
*
among
VViJCLilCi
shifted from
and
income
Distribution
one's at¬
NEW
REVISED
question now remains
whether the companies
that
^
gotten into many so-called growth
stocks,
as
insurance
companies
comparison
engage
the
they have bettered
There has
CONSOLIDATIONS
NEW
tax-exempt feature.
worthy. Not only have they ex
perienced portfolio enhancements,
but
News About Bainks
the
of
because
The
1646, and 1955 break-down of
sets of the
fixed
being
media, probably have
given way to tax-exempts in some
portfolios.
The better yields on
the latter have made them much
By ARTHUR B. WALLACE
This Week
These
income
*
*
Jervis J. Babb, Chairman
of
Board
cf
The
Wall
Lever
Brothers
has been elected
pany,
Bank
of
New
a
of the
Com¬
Trustee
York
at
48
Street, New York it was an¬
on Nov.
14 by Albert C.
nounced
Simmonds, Jr., President. Prior to
joining Lever Brothers Company
as President in 1950, Mr. Babb was
Executive Vice-President of S.
Johnson
&
Son,
Earlier
Wis.
he
Inc.,
had
of
C.
Racine,
been
Vice-
President and General Manager of
Booth
Mr.
Fisheries
Babb's
Corp.,
Chicago.
directorships, in addi-
Volume 184 .Number 5586...The Commercial and Financial Chronicle
<*
tion to Lever Brothers
include
New York
of
of
Le
Company,
Dock Savings
Dry
Bank
and Green Giant Co.
Sueur, Minn. He is also
trustee
Chairman
and
Business-Education
a
the
of
Committee,
Committee for Economic Develop¬
ment;
of. the National
member
a
Industrial
Conference
Board, and
Asso¬
the American Management
ciation.
*
The election
liam
Weed
Nov.
on
Bolenius
C.
Robert
of
Clyde E.
and the, re¬
T.
W. gional Shopping Center at Route
Allen,
and-Ernston
9
ville,
N.
first
Road
thd
for
J.,
in'
branch
Stevens
as
and is part
room
dition
that
of
extra
include
These
4-story ad¬
a
combines
Drive-in
a
Win¬
Walk-up Window open
pn
the promenade frontage for
quick service to shoppers; and
an
after-hours depositary to ac¬
the
commodate
bank
and
23rd
St.
"this
new
President
Association,
entrance
dow,
space
room
23rd
ington-4th
of
the
a
individuals
and busi¬
firms; in addition to the
ness
con¬
facilities
■
interior
Lex-
V
$
'
branch
new
*
area
free Orchids at the
9:30
from
new
entrance
to 6 p.m.
am.
*
Anyone
who opens a new savings account
by /the. stockholders.
The
new
indicated in. our issue
Oct. 18, page 1646, was offered
stock,
as
*
of
bank for which
a new
issued
was
Comptroller
charte?
a
Oct. 11. by the U. JS.
on
the
of
Currency at
The bank has
a
capital and
surplus of $300,000 each. In thci
primary organization B. B. Mc~
Gimsey has been designated Pres¬
Washington, D. C.
been
formed
with
stock by
were
$50
Ave.
*
The Kelly Field National Banfs
of San Antonio, Texas, is the titled
to increase the capital
ident and W. F. Holder as Cashier
100,000 shares which will
it
*
the addition of $5 mil¬
Edwin E. Adams, President c?
lion to the batik's capital funds
and bring the total of such funas The Bank of California, N. A., ci
to
approximately
$54
million. San Francisco and W. W. Gil¬
More than 88% of the 1,000,090 dings, President of Modesto BaiY;
proposal
outstanding shares, it is stated,
represented at the meeting.
office isolated for completion in Shareholders will be offered rights
January, 1957.
to subscribe for the new shares at
executive offices. The
subway; the in¬ ;„.The subscription books to the
gives the bank new issue of 55,000 shares of new
necessary operational space; and stock of
the National Newark &
the community garage; with fa- *
Essex
Banking
Company
of
cilities for 200 cars, fills a defi¬
Newark, N. J., were closed on Oct.
nite need." On the opening day,
24, at which time it was stated
Nov. 16, there will be music and
that 97.1% had been subscribed
Clyde E. Wwa
*
*
result'in
and
ventional
only fa¬
people so'dh
station
St.
creased floor
.
that
saving for
bank, but the main banking
gives time-saving access Yo
of the
the
the
of
states
not
cilitates
Bolenius
Lynchburg,
nounced
banking operations with a
community. ; garage.:
DeCoursey
Fales, Chairman of the Board,of
C.
with Oct. 17, the amount having been
increased
from
$1,000,000 as -h
result of the sale of. $100,000 -o2
new stock.
effective
of
stock
common
office, it was an¬ ness Sept. 28. At the
jointly on Oct. 26 by date of the consolidation the con¬
son.
; *
>
Oliver W. Welsh, President of the solidated bank had capital stock
*
*
*
bank,; and Saul Cantor and Paul of $500,000, in 29,000 shares of
On Nov. 16 the main office of Goldman, builders of the 38-store common stock, par $20 each; sur¬
The Bank for Savings, 4th Ave. retail
development.
This bank, plus of. $720,000 and undivided
at 22nd St., New York, will cele¬ one Of Middlesex County's oldest profits of not less than $448,009.
;
*
»* ■* '*•■*
■. >
•.
brate the opening of , a 21st St. banks,
in business 68 years —
entrance to the bank.
The new will* introduce
in dts
shopping
At h special meeting on Nov. 5
entrance at 47 East 21st St., leads
center branch the latest in cus¬ shareholders of The National City
directly into the main banking tomer convenience f a ci 111 i e s. Bank * of Cleveland, approved a
Kelley, William C. Potter, George
E. Roosevelt, and Eugene W. Stet¬
for
William
Bank
itors
23
of $100,OuO were
institution's* consolidated at the close of busi¬
Sayre-
•
and
Directors
as
election
G.
'
of Wil¬
7
George
Palen Conway, Charles P. Cooper,
Charles E. Dunlap, Cornelius* F.
.
*
*
-
directors
(208?>
a
in the ratio
share
i
each
share-for
of one
held.
shares
10
& Trust
Co., at Modesto, Cal.,
nounced
on
been
of
agreed
the
the
B.
offices
Congdon, President, stated that
proceeds from the stock sale to¬
banks.
approval
thorities
merger
to
of
supervisory
ratification
and
of
au¬
of
thj
by the
share¬
Modesto
agreement
holders
¬
for the merge?
Subject to
upon
two
purchase the new
shares will expire on Dec. 3. Sale
of any unsubscribed shares will
be handled through an underwrit¬
ing group headed by Merrill, Turben & Co. of Cleveland.
Sidney
Warrants
an
Oct. 30 that terms had
both
banks,
Co., will becomi
part of Tne Bank of California
Bank
a
in
&
the
Trust
future.
near
&
Bank
Trust
in
The
Co.
Riverbank.
Total
Modesto
operates
Modesto
and
twa
in
one
resources
ci
as
the transfer of $5
with $5 or more will receive a
to shareholders of record Oct. 4 milliop from undivided profits to
free Paper-Mate Pen,
The cele¬ at
$57 per share on the basis of surplus as previously authorized
bration and Paper-Mate Pen offer
one additional share for each six
by the board of directors will
will
continue
for
two
weeks, shares held. The "Newark News ' increase the bank's capital to $17,through Nov. 30.
reported on Oct. 25 that when the 600,000 and its surplus to $32,*
"■
*
*
sale closed at 3 p.m., all but 1,582 400,000. In addition the bank will
A
merger
of the Huntington shares of the offering had been have undivided profits of some $4
Station Bank of Huntington, Long
Sept. 30 figures, it is
sold.
Any Unsold shares, it vwas million.
Island, N. Y., into the Bank of
added, were being bought up by said, showed the bank with
Huntington & Trust; Co., under a
more than $723
million in assess
syndicate of investment houses
the title of the Bank of Hunting¬
which underwrote the issue.
In and $659 million in deposits.
ton,
uojtr.
a
Sept. 30, 1956, amounted, it u
stated, to approximately $16,000,-
Martinez
by the New* addition to pur Oct. 18 item, an
Superintendent
of earlier reference to the* offering
Banks at Albany on Oct. 29. The
appeared in our Sept. 20 issue,
Banking
Department" also
ap¬
page 1190.
*
*
*
proved on Oct. 29 ptons to in¬
Director of Guaranty Trust Com¬
of New York is announced
«J.
of
man
is
of
Luther
the
Cleveland,
Board.
Mr.
Finance,
& Tele¬
Telephone
which position
graph Co.,
sumed in 1951 afcer
years
-
he as¬
President,
each.
Personnel.
*
His telephone care.r
began with the New York Com¬
in 1921.
pany
President
Inc.,
in
the
1955
Stevens
his
upon
&
Co.,
return
to
textile
ing1
the
industry after serv¬
Secretary of the Army in
as
Eisenhower
*
He had
its
Administration.
previously been ^ith J. P.
Stevens &
Co. frorri 1921, serving
from 1929 to 1942
President
as
and''
Chairman
as
1953,
a
P.
from
Mr. Stevens
Director
1945
previously
Guaranty Trust
of
tion
Bank of New York, a
he
now
held
until
1953.
posi¬
He
is
Trustee of the Mutual Life
a
Insurance Co. of New York and
Director
Mr.
of
General
Weed
is
Electric
President
a
Co.
of
The
Oct.
He
13.
of
service
the
Company,
with
which
.
■.
served
the
bank
more,
held
dinner
on
its
for
25
years
annual
Nov. 7
Astoria, with 925 attending.
Club's
1,483
of
or
reunion
at the Waldorf-
present
The
intoioes
ro<=ter
active and retired members
the
staff
abroad.
in
New
Yorx
and
Overseas
chapters
are
maintained in London, Paris, and
Brussels.
sided
Herbert P. N. Cook pre¬
at the dinner and was suc¬
ceeded
J.
Sartor.
spoke
^
as
for
President
Robert
the
new
W.
Club
include
are
J.
land, Chairman of
Stephens
members
ducted during 1958.
the bank who
William
by
in-
Officials of
of toe
members
Luther
Cleve¬
me Boara;
Wil¬
liam L. Kleitz, President; Thomas
P.
Jerman
Executive
and
Dale
E.
Sharp,
Vice-Fresidents,
and
Assistant
Jr.,
will become one of the
representatives traveling
Cashier,
bank's
joined the staff of The Northern
Trust
Company in 1952.
Since
died
N. J.,
the
in
for
company
38
of the credit
member
analyses and interest department.
of two
and
Auditor
Valentine
fred D*.
Cashier.
the
the
of
bank
as
The action
board
an
com¬
correspondent bank¬
As of Oct. 18 the National Bank
of
reports
Okla.
Tulsa,
capital
a
of
$5,000,000, the amount having
been enlarged to that figure from
$4,000,000 by a stock- dividend of
effective
$1,000,000
Oct.
was
taken
regular monthly meeting
8.
Lawson
Mr.
Al¬
Assistant
on
succeeds
dend,
George
vote
to
on
divi¬
the
and if approved it will
be
paid in December to stockholders
of record the day of the meeting.
The
by
Nov.
27
Nov.
on
"Newark News"
"There
their
at
are
added:
25,000 shares of $25
value outstanding, Mr. Mc¬
Hugh said, so that the dividend
par
E.
He
has
been
associated
finance work since
with
1933, and
of
Bank
Yonkers, N. Y., prior to
the
Central
was
Auditor
of
National
becoming associated with National
Bank of Westchester in
August of
last year. He was also associated
with the auditing departments of
the
County Bank & Trust Co.
of
Paterson, N. J., the North Side
Savings Bank of the Bronx, and
the Bronx Savings Bank.
1
Mr.
visor
Valentine
office
many
with
has
been
Super¬
bookkeeping
at
Huguenot Street.
For
years
he
was
associated
of
the
the
more
18.
New
room
that
Rochelle
clare
the
dend
with
the
National
The
large space
in
N.
J.,
Sayre
Bank
has
y
,
Assistant Vice-President of the
City, Mo.,
of
Westfield,
result
a
of
new
N.
its
enlarged
J.,
the sale
of
to $350,009
of $75,000
of
leased
ft
Woods Re¬
*
it'
de¬
partment, supervising the under¬
writing and distribution of mu¬
nicipal securities throughout the
United States, and the purchase
Manager
of the bank's bond
of
sale
and
Mr.
who
Luby,
duties
new
Government
on
will
Nov.
assume
his
19, comes to
from
Trust
Commerce
Bonds.
the-
Bank
merge?
Cali¬
of
during the past two year.].
expansion was accomplished
the acquisition of Bank cc
in 1954;
The Bank ci
Berkeley in August, 1955, and Tha
by
First National Bank of San Leanin
dro
New
February
branches
this
of
also
were
yea?.
estab¬
lished in Oakland and in Mill brad.
offices
Other
located
of
the
bank
are
in
Portland, Ore., and to
Seattle and Tacoma, Wash. "
A
"to1
si:
:i*.
sub-branch
office
National
the
of
India* Limited
on
will be
nouncement
Oct. 29
to
Thika
Bank
of
opened at Fori
Oct. 26. The sub-
was
Tuesdays
on
the
of
for business
Fridays.
An¬
open
and
of this
was
made
on
by the Bishopsgate office
of the bank in
London, E. C. 2.
Oonnssticut fo Sell
•
Barret,
$54,008,000 Turnpike
Bond Issue
Connecticut
Mechanics National Bank
J.,
has
capital
of Bur¬
increased
the
$200,000
from
to
*
bond
department.
/
the
Peoples
charter
and
National
title
Bank
Trust Company of Lynchburg,
*
$500,000
and
the
&
Depos¬
of
Con¬
at public
sale
Nov. 20, $54,000,000 of its Ex¬
Revenue and Motor Fuel
pressway
Tax Bonds
maturing serially from
inclusive, and having
maturity of 23% years.
1962 to 1989,
an
average
The
had
Treasurer
previously
Ga.,
position of the tax-exempi
bond market.
First* National
The
Atlanta,
Bank
recently
which
of
of¬
said
Treasurer
The
amount
to
now
be
the
that
offered will,
present cash bal¬
Connecticut Turnpike
construction costs fo?
with
fered to its shareholders of record
together
Sept. 25 $200,000 shares
ances, cover
estimated
(par $10
share) of capital stock at $35
share at the rate of two new
shares
each
for
seven
held,
of
$2,000,000 of new stock the cap¬
is now $9,000,000 as compared
$7,000,000 previously.
ft
*
have
Bank
$100,000 and
of new stock
enabled the First National
at Orlando, Fla., to increase
of $200,000
of Oct. 16 from $1,*
it
A
capital
ported
Bank
of
$1,100,000
Monroe,
reached
decision wai
following
a
conference
Commissions?
Control, other
financial officers and Leh¬
which included the
of
Finance
State
man
and
Brothers.
La.,
Samuel Franklin Adds
(Special to The Financial
Chronicle)
ANGELES, C a 1 i f.—Lau¬
R. Blodgett, Frank H. Crou-
LOS
rence
shorn, Casper T. Gee, Bengt
beck, Lawrence B. Strieff,
*
by the Ouachita
in
Treasurer's
The
*
A stock dividend of
the sale
months.
the next five or six
re¬
ports its new capital effective as
of Oct. 19.
Increased bv the sale
of
Va.,
State
will offer
necticut
on
the
that
nounced
of the
^
*
200,000 to $1,500,000.
*
Treasurer
John Ottaviano, Jr., on Nov. 9 an¬
North & Co., investment advertised $75,000,000 bonds hav¬
bankers, where for the past six ing an average maturity of 29%
years he has been Vice-President
years for sale on Oct. 30, but had
and Manager of their municipal canceled the earlier sale because
its capital as
$250,000.
Kov. 20
on
State
Fitch,
with
|
$50,090, ef¬
fective Oct. 11, announced by the
capital
Nov.
by James M. Kemper, Jr., Pres¬
ident.
Mr. Luby will serve
as
A stock dividend of
the
on
ital
stock.
N.
Kahsas
of
announced
was
7
per
capital from $275,000
as
Co.
Trust
Commerce
ft
National
First
Ambov,
cities
This
per
As of Oct. 26 the National Bark
Under
South
as
regu¬
*
*
a
ft
their
at
regular quarterly divi¬
cents, also payable in
*
Company.
ft
depart¬
December."
bank's
Supervisor
Cash Register
trust
of 50
nected
Systems
the
meeting next month would de¬
lar
lington,
a
for
directors
the
Trust Company and was also con¬
as
*
$557,000,000.
of
The
The election of Joseph M. Luby
ment. Mr. McHugh also announced
bank's
former
*
*
.<
re¬
fornia having increased its office J
from 5 to 13 in 11 Pacific Coato
branch
proposed 5% stock dividend,
its
first
in
10 years,
according
to the Newark
"Evening News"
in
result
a.j
total
of
Consummation
will
California
of
reported
excess
Hall, Kenya,
s|:
A
Bank
date
in
.
and
directors
of
that
sources
a
ing department.
and
of
department
divisions in the
mercial
The
000.
Sis
joining " the1 bank, he has been
.
as
Quarter
organization
of* staff
members of Guaranty Trust Com¬
pany
of New
York
who* have
Snider,
the State of Wisconsin. Mr. Snider
*
honorary*
W.
Banking
will mean issuance of 1,250 more
Schmitt,
who was
recently
shares. The added shares will in¬
he
has
Manager
of
the
bank's'
been associated for 35 named
crease
the
bank's
capitalization
Peoples
office.
Mr.
Lawson
is
years.
He is President and Di-l
and make possible expanded serv¬
rector of a number of the com¬ presently enrolled in the National
ices by the banking and trust de¬
panies associated with The Ana¬ Association1 of Bank Auditors and
partments, he said. The bank is
conda Company.
Comptrollers
School
for
Bank
Auditors and Comptrollers at tne adding new personnel and is un;
*
*
a
aertaxing alterations to provide
University of Wisconsin.
Guaranty
Century Club,
Anaconda
dell
Na¬
been
had
the
Admin¬
an
with
Essex
&
of Newark,
Company
on
Voget,
Chicago, has announced that Wen¬
,
Company from 1944 to 1948 when National Bank of Westchester of
he resigned to become Chairman White Plains, N. Y., has announced
and a Director of the Federal Re¬ the election of Henry P. Lawson
serve
E.
Assistant
Newark
capital from $275,000, con¬
of
Oct.
30, was announced on
sisting of 11,000 shares, par value
that day by Terence J. McHugh,
of $25 per share, to $350,000, con¬
President* of the First National
sisting of 14,000 shares of the
Bank of Montclair, N. J. The ad¬
same par value.
vices in the paper indicated states
■
*
*
*
' /,*
that
a
special meeting of the
Harold J. Marshall, President of
bank's stockholders will be held
.
to
was
William
istrative
tional
*
*
The Northern Trust Company of
years,
it is stated that he was
formerly Manager of the bank's
Approval was given as of Oct.
17
by the State Superintendent
of Banks to plans of the Bank
of Westbury
Trust Company * at
Wesbury, L. I„ N. Y., to increase
Mr. Stevens became
of J.
of
Huntington
&
Trust
Co. from
$500,000, consisting of 20,090
shares of the par value of $25'
each,
to
$1,000,000,
in
103,000
shares of the par value of $i0
having served
Vice
as
the capital of the Bank
*
t
State
crease
Bolenius
for
Vice-President5
American
three
Chair¬
with
gether
approved
was
York
i.
pany
by
of
is
re¬
National
effective
Turner
are now
Franklin & Co.,
West Seventh Street.
Wayne
Samuel
D.
Noiand
with
B.
213
24
The Commercial and Financial Chronicle
(2088)
Continued
from
flation-
5
page
Thursday, November 15, 1956
...
for
or
current
levels
employment and income.
Public
Utility Securities
Commercial Finance's Contribution
By OWEN ELY
Detroit Edison
Detroit Edison
environs, the total
population
of
automobile
parts
versification of other industries
farm
sales
contribute
industrial 31%
and
about
well
as
38%
of
initiative
The industrial percentage
all
will
we
their
revenue, light industry one-third.
Average residential
moderately ahead of the U. S. figure.
Tnis area is adjacent to the Great Lakes which provide an
abundant supply of fresh water (the supply of which is critical
sections).
Also,
from
viewpoint
transportation
a
the Lakes will gain in importance with the approaching completion
of the St. Lawrence Seaway. They provide low cost transportation
for such
world.
materials
raw
naturally,
The region is
ment
and
limestone, coal, iron
as
Detroit' has
become
tne
and other metals;
ore
metai-worKing
center
t.»e
oi
also noted lor excellent industrial manage¬
technical
know-how.
Detroit
factory
area
workers
receive the best wages in the nation—about $a,100 compared with
the
|U. S. Average of $4,100.
Michigan is showing excellent growth.
In the seven-year
period 194/-54 census figure,s showed that Michigan enjoyed a
68% gain in "values aaded by manufacturers," and a 30% gain
<
in
the number of manufacturing establishments.
In the postwar
period Detroit Edison's revenues have increased from $85 million
to $233 million, a gain of 175%. In the 12 months ended Sept. 30,
.
despite
the
fact
this
tnat
has
somewhat
been
of
and
period 1956-60 will approximate $45u million, witn about onethird generated internally and two-thirds by sale of securities.
In the previous five-year period $385 million was expended for
year
construction.
in
company
recent
has
years
conducted
aggressive
an
drive for increased efficiency, witn good rtsults as indicated below:
Operating
Return
«»n
Ratio"
in .est.
Capital
Year
Aver,
Customers
1952_
63%
4.82%
114
5.20
121
5.24
126
5.65
134
11,080
55
5.73
139
10,9Z0$
tl2
revenues,
than
operating
months
working
are
which last year amounted
that amount in
expected
1904
continue.
to
$2u0,uu0 in
ana
Two
interconnections
with
been
have
the
Hydro-
beneficial, with
flowing each way as needed. This has helped the Canadians
to supply needed power to Niagara Mohawk following the debacle
at Niagara Falls.
power
Detroit JLdison's capital structure is simple—with no preferred
stock
for
arid
some
an
tquity
followed
years
of whicn $59 million
income
increase
little
a
about
of
is
a
sold
in
September this
year;
manage¬
desirabxe method of financing, from
very
the
(delivered)
15%
Smaller
However,
these
economies,
gain about
year's $2.43
an
10%
this
but due to
year
estimated
about
62c
further
will
b0%
be
the
of
in
ton
a
the
increase
largely
of
price
3oc
offset
higher fuel
of
year.
operating
will
cost
coal
next
by
recovered from industrial and commercial customers
also
taking
be
contracts.
Only about lb0,0Uu aduitional shares could be added
in
195/
result
a
of
convertible debenture
is
actually
expected,
negiifei^xc.
our
The
and
Face
Capital
possible
conversion
of
the
3%
and
3J/4%
sxc^oiuuigiy,
common
stock
earnings
are
expected to
improve.
President Cisler takes
Special
Problems
problem that the American
balanced, forward
which
moment
in
all
types
of
businesses,
small,
medium
and
large,
take
part; one in which there is a
steady and stable growth of earn¬
ings;
wages and
profits
well
as
as
commercial
finance
itself, cannot solve tnat
But it can play a de¬
by
varied
and
long
needs
It
of
can
go
meeting
small
the
and
me¬
cyclical
1953,
Edison
has
in
in
fact
7%.
resisted
19o3
Another
"tax-free."
stock
of
At
yields
it
the
decline
advanced
interesiing
the
5.1%
at
is
and
than
while
price
sells
1955
more
7%
point
recent
and
automotive
all
that
currently)
the
declined
the
$2.28.
dividend
paying
times
is
$1.80,
the
earnings
recent
present
could
of
rate
National
amount
expan¬
Product
to
could; but I do not
for
something
not share
it will.
say
the belief that
an¬
other year of high production
apd
employment will follow this year's
levels automatically.
record
Our
tinue
prosperity
will
only
con¬
if
The Current Boom Has Sources of
Structural
changes
employment
and
in
Charles P. Henry AdJs
LA
CROSSE, Wis.—Ray
berg is
Farrell.
now
a*i.iiaiej
Inc.,
Exchange
HighLeu
wiui
(Special to The Financial Chronicle)
oc
Buildin^.
SAN
Ernest
FRANCISCO, Calif.—
Pedeprade has become
O.
affiliated
1179
with
Charles
P.
a
in¬
result of these
a
as
result
a
reforms adopted
long period, is becoming a
one
Twenties
and
that
f
accounts
that
rom
earlier.
for
.(Special to The Financial Chronicle)
SACRAMENTO,
ley E. Chastain is
Calif.
now
—
Hart¬
connected
with Financial Investors Incorpo¬
rated, 17 id Broadway.
..
.
E. W. Hendrickson
Opens
GLENVIEW, 111.—Earl W. Hen¬
drickson
is
engaging
in
a
secu¬
rities business from offices at 1129
Irairie Street.
efforts
diversification
at
be
expected to prove success¬
Not all absorptions prove to
Not all increases in
digestible.
output
associated
are
tained
with
sus¬
profit margins. Any
in
capital
new
great
investment
inevitably accompanied by im¬
balance, overinvestment in certain
Lags Still Occur
the
problem
instalment
Rolfe,
of the
one
quality
of the
subject,
Sidney
credit,
specialists in
the
reported
study
a
recently.
He found that in the
great depres¬
sion, instalment loans suffered less
loss than any other
type of credit
outstanding.
Aggregate losses
million
of
auto
on
$941
some
debt
outstanding
in 1929 amounted to less than 1%.
In
contrast, other types of de¬
allowance
The
volume
great
of
the fact that there
us
over
the
is
this
continuing
peak demand for goods and
serv¬
it is
as
business invest¬
on
is
too
great.
.•
*
a
business
continuing high level of
activity
next
at
year,
the
as
ket,
are
of the
pressures
mar¬
predominantly irregular
haphazard.
We have
been
tor
must
level
a
management and
of
is
activity
whole.
casters
know
And
are
There
are
in
on
less
the
neatly balanced growth.
and
war
.
levels,
and
cold
the cold
price
war
disloca¬
war
of
cost
relationships,
are
being built into land and common
tion
Thus
values.
press
the
economy
not
prices.
upon
these
Fortunately
relationships are
price-cost
being
built
into
product price levels.
have
year
the
as
fore¬
certain.
favorable
portents.
and
unfa¬
The automobile
been,
those who
mal
too
many
Where they
expansion
would
risks
has
been
element
in
expansion
decisions
can
business
checked
selection
by
among
shall
We
know
credit
consumer
But
that
Saving
about the
more
picture when the
being made
now
there
need
year,
are
con¬
of
aspects
are
wait
not
This
those
upon
I
as
was
pre¬
paring this talk, I again visited
Washington to exchange ideas and
with
information
I found in
economic
the
ad¬
strikes
This
able
of
view
sav¬
proportionately to
increased
ings
dispo¬
a
realistic
a
of credit, provided
level
it.
Washington
take
to
me
as
a
consideration; the
reason¬
gains
new
in real income should be reflected
in
in
part
the
within
assets
of
liquid
family.
More¬
growth
the
this is needed not only for
stability in family finances but
also
in
tne
investment
capital
over,
market.
'
We
.
too well aware of the new
are
capital needs of our clients.
well
is
It
those
that
brackets
at
cannot
to be
expect current policies
wholly effectual.
is
It
the
not
the
save
at
economists
to
income
upper
which
rate
a
of
field
the
in
rate
of
small
A
brackets.
income
saving by
lower income brackets would
the
vast volume, of savings
produce
the
but
level
is
income, the.re is a virgin
potential savers in the
family
increase
we
known
in
high it cannot be increased. But
today's levels of personal and
the
a
for
capital investment.
new
worthiness of the borrowings that
is
level
rise
can
continues
ratio
even
a
rowings
is
of
bor¬
if
dangerous
their
deteriorates.
soundness
maintain
To
favorable.
level
lower
the worth of
to
financial
try.
institutions
of the
coun¬
Certainly, thus far, they have
that
confidence
the
is
an
aspect
of
the
instalment
Without
findings,
it
Our
made
and
the
I
anticipating their
must
confess
that
difficult to share fully
they will not do
investment
of
levels
allowance
the
of
bankers
took
a
progressive step the
when they spent $100,000
effort, through the social
very
other day
on
an
studies teachers of the country, to
the
broad
the
of
masses
financial
programs.
Even more can be done.
of increasing tax exempt
by $100, as some have ad¬
income
vocated,
$100
or
income
are
for .in¬
Instead
personal
we
could exempt the first
$200
of
taxable
from the personal
interest
income
tax.
A
a
$100
exemption
would
give
working man in the lowest in¬
bracket, the 20% bracket, a
come
bonus of over $1 for every
debt.-; *
without
The
I
the
disquiet over the level of
comparisons
the higher
produce
country and the securities dealers
family
Bureau of Economic Re¬
National
find
Board
Reserve
on
We know from past
experience that
the whole job.
credit
problem, that of consumer instal¬
ment
credit, is currently
being
studied
in
great detail by the
Federal
this increase.
people to include intelligent, conservative investment in their
Excellent Credit Manager
other
rely
of interest alone to
rates
induce
in them.'
The Consumer Has Proved
The
cannot
We
busi¬
borrowings,- we are obliged
rely on the vigilance of the
Supplement Interest Rates
Need to
disposable output if the cost-
price
<
The
important.
with
eased,
have
conclusions.
Capital Requires More
lower
by lenders. Until we make
monetary authorities see this,
is
we
Rolfe's
Growing Need for Investment
loans
current
though
Mr.
supports
so
speculative
limp along unless its situation
even
nor¬
the chances
only by the gambler.
The
be
add to the
business
of
to
completed the rehousing of our
people. Public;^ works spending is
man¬
may
search.
not
credit
1 do not think any sector of the
well question if there financial industry needs to be con¬
has not been too great a reliance vinced that *it should be a
major
on
higher interest rates to choke task of economic policy in the pe¬
off
that
speculative
expansion. riod just ahead to expand savings.
We
industry should enjoy its second
biggest passenger car year. The
housing boom, however, is likely
.
has
consumer
Our experience in this field
ager.
it
this
unwise.
inves¬
probable
the
this
But
the
excellent
sition
The
ex¬
ones.
the
an
to achieve
placed
capital
that
visers of the administration.
applying to the next two quarters
actual
doubt
con¬
present
concentrating on moderating our
growth. But the real problem is
merited
of
that
proved
studies.
least for the first half, are simply
effects
clared
industries.
such
at
seems
to
reason
prevail
Rolfe
of affairs is still so." He de¬
cluded.
ness
The government economists who
forecast
little
state
studies
operating,
the
prosperity,
Mr.
peace.
"tnere
industries, but in particular
industries, such as the resource
But
Based
cluded,
only in the smaller companies of
forces
in
to
depression,
and
war
all
The
rise
found
were
tuiough
in¬
lags, not
the
Very low delinquency and loss
figures
The
new
are
for
of collection.
cost
vestment should not obscure from
very
of
It
the
of
ices.
vorable
Joins Fin. Investors
be
income,
production
omy, primarily as
changes but also
Henry,
Market Street.
all
Not
con¬
with challenging problems.
must,
taken
troduced during the second world
war are still
going on. Our econ¬
penditures in the recent
(Special to The Financial Chronicle)
growth
business* labor and gov¬ Are all speculators deterred by
adopt policies that will rises in rates? In the last
analysis,
make for further sound growth.
there is only one sure way to deter
what
Bell & Farrell Add
On
of
development
ernment
the
.
of
ueiiu
still is vulnerable to crisis if costs
the
I do
utility—
utilities
of
35V4,
15.5
Detroit
average
other
part
around
about
business,
new
stock
business.
the order of $420 billion in 1956.
on
pride in the fact that, despite Detroit's
the
me
Its flex¬
activities
toward
way
Gross
1957
indus¬
immediately halted. Its momentum
of
in
sound
fronts us, as any new
and
output.
Edison has provtd to be one of tne best "defensive" stocks.
During
four market siumps
(1948-9,
center
undertake
econ¬
faces is that of converting the
present investment boom into a
omy
ment, the current boom cannot be
tne
policy,
present
lines.
Detroit
being
businesses
some
outstanding immediate
different
issues, and not more than half this amount
so that the dilution of earnings would be
the
of
of the
some
which denies credit and capital to
surge
democratic
power
on
as
carry
an
earnings may lag
An unfavorable current
share.
per
about
of
increases
and
to
Businesses
Credit
in the number of shares,
increase
and
is
Strength and Weakness
snould
below last
factor
a
average.
a Dove
inequities
invest¬
With suitable amend¬
is
of angles.
number
Net
wen
were
ment feels that this is
a
Tne company has
policy of issuing convertible debentures,
ratio
it
satisfactions.
er
At
I9a3; this favorable trend is
Electric Power Commission of Ontario
if
boom,
people up to a new plateau of
higner living standards and great¬
sion,
two programs to produce economies,
to over
million compared with half
out the
stretch
ments it could correct
ful.
capital
on
a
critical problem of
Certainly well-timed pol¬
could
icy
is not to peter out as another cold
war
y.OOO BTCs.
Employees
.
prepare
speculative
forward
current
dium-sized
+(excluding
depreciation
and
taxes)
to
Sept. 30, l.')5<>.
$Some new units will use Jess
ended
faces
ment boom.
can
the
a
expenses
it
But
movement
if
ible
56
of
to
cisive role in its solution.
11,340
1956f '
Ratio
Reserve
no
problem.
1955
*
able
excessive
The large companies are doing
this, by and large,
home smad
companies are doing it, too. But
many of them must join the ranks
try,
12,100
58
all of it.
,
The
12,190
61
1954
his¬
our
have we had
so
large a
working force, such high employ¬
ment within the average
family,
such sustained annual employment
or
such
high
average
income
a
position to
expansion and faults and losses
were
running as
risks to maintain and perhaps im¬ does not effectively choke off sqme
high as 50% and in few cases less
the
prove their positions in the years of
speculative
excesses f at
than 10%.
Of course, this makes
ahead.
which it is aimed.
>;
KIV H
1953__
profitable
and
are
without
BTUS per
Employee
per
com¬
are
efficient
basis
all the
that
able to put
operations
on
a
present
sound,
•
ing capacity at present is about 2,811,000 kw., but at the ena of
next year this will be increased 20% to 3,391,000 kw., and
by 1960
to an indicated 4,191,000 kw.
Capital spending during die five-
only get it if
enterprises
the economy
pose
"off-year"
an
for the automotive industry, revenues increased 9%.
Detroit Edison is planning for substantial expansion. Generat¬
Tne
of
We.for-:«■
in
tory
of
part
no means
timing.
is
other
Federal
by
problems of growth. And most of
industrial
some
substantial
a
commercial 27%,
individual
in
up
the slack but
farming. Residential and
as
private
is surprisingly low as compared with some other utilities in inaustrial centers;
heavy industry contributes about two-thirds of
use
taking
policy is al¬
ready curbing business investment.
revenues,
miscellaneous 4%.
the
by
business planning,
and action of
get it by
only
enterprises, by the co¬
operation of management and la¬
bor in the solution of the practical
it also features a wide di¬
manufacturing,
before
never
levels.
only the City of Detroit, but also its
approximating 7,600 square miles with a
3,771,000.
While this is the center of the
area
about
and
To Higher Business Growth Level
Company
not
serves
that
get
saved
any
in
a
savings
$200 he
account
or
other form of investment that
'
Volume 184
Number 5586v.vThe Commercial and Financial Chronicle
helped t6 meet the need
for
new
capital.
incentive to the employee and the
thousand dollars he saved.
vest, at
Anticipated
Our makers of
need
to
to
adopt money and
as
a
savings
policy, to
legitimate
tax
incentive
that
assure
policies,
tax
the
money
will be tnere when it is
needed.
The commercial finance
indus¬
try did anticipate the needs of its
customers. Because it did, it was
able to
iu
its clients
uiirxn.5
save
serve
duic
enterprise
to
and
save
in-
time when their particiin the saving-investment
would benefit the whole
a
pation
process
economy.
the
demands for credit and
capital and
such
small
-
-
economic policy
anticipate
at
even
even
ii»
dt
time when
the credit markbt
considered
"tight."
d
a
was
Consider
our
Small
Business
Small
other
the
businesses
businesses
needs,
such
purchase
Such
the
Aid
of
an
such
are
pVnerpcfo
in
property,
property,
new
inequity.
Many
included in the
Rpnort
Committee
aids
given only for
are
which creates
many
tax
used
purchase
proposals
nave
have
as
of
aids
tax
Proposals
the
of
Business,"
Some of these
issued last Aug. 7.
proposals have been
It
before Con-
.
placed at
,
the
is
commercial
of
disadvantage by credit
a
Thi"nrnhlpm*?
ahead
year
the neat
that
face in the
we
Or
like
authorities
severely
restrictive
into
og boom which could
difficult
the
WV**
*
vy
**********
Drake,
Executive
of
National
the
nance
•
Vice-President
Commercial
Fi¬
Conference, shows that
rep¬
resentative companies in the com¬
finance industry doubled
mercial
their capital resources in the
last
six years.
Then, in the past year,
they went into the capital market
and borrowed on
long-term ob¬
ligations another 15 to 20% more.
Why?
They did
tional
or
funds
to
today's
prepared
obtain
not
meet
the
yesterday's
' They
for
the
*
future.
very
thorough investiga¬
the potentialities and the
careful
without
of
the
ning,
repre¬
' and
economy
i-V/il
was
next J/t"
pe-
U1&
business and
serves.'
indus-
our
It cannot be said that the
framers of our
present credit restriction
policy have been equally fore-
sighted.
I
do
not
say
that in
criticism of credit restriction.
The
Federal Reserve and
Treasury pol¬
icies designed in
alternating pe¬
riods to restrict and to
expand the
use
of credit and
capital
of
course, needed to avoid depression.
We need control over credit.
are,
,
But
do
not
need
and
blunderbuss
need
selective
tered
by
should
not
controls.
We
controls, adminis¬
financial? industry.
the
Our present controls
selective
by
be made
can
granting
suitable
exemptions where warranted. '
-
Capital Needs of Small Business
Should Be Met
.
Small business needs more than
fair shake in the
money market.
We have to give
recognition in
tax
policy to the fact tnat
financing is the basis of
ternal
small
business expansion.
pand, small
ings it
which
we
growing.
few
business
can
There is
To
needs
in¬
all
ex¬
earn¬
very practical way by
can start small business
It
is
a
revenues
t..ac
way
would
larger and much
return
from
more
m
a
greater
somewhat
staoie
easi¬
ness
profits and from a long-run
expansion in jobs and wage in¬
comes.
I11CS
'
...
would
adjustments
have
in
the
to
make
tax
on
rate income
to
needs.
first would
The
the
crease
two
corpo-
adapt it to present
first
bracket
be
to
in¬
of corpo¬
rate
income, subject to the lowest
rate of
taxation, from $25,000 to
$50,000. The second would be to
reduce
this
business
been
been
mignt
year
avoided
its
it
have
interests
had
adequately represented
more
Continued
from page 3
the
tax
rate
Reserve
c0Unted
be
on
in time
can
the
supply
to
without which an adequate level of activity cannot be
money
maintained in
a
growing economy.
(5) The rise already experienced
rates and bond yields
*n interest
has
brought
of
structure
the
rates into a
far^berter^J^ajLanced relationship with the over¬
money
supply and demand for funds
all
than
the case for many
has been
years.
this
on
WM*
—
will be alleviated. Individuals and
families, having moved to a ndw
high in their possession of the
economic
amenities of life, can
now
emphasize the building of
their financial security through
increased
personal savings and
arc
given an incentive to do so
by the more attractive rates of
return available on such savings.
will' probably
Corporations
These types of relief from in¬
equities in the money, cre.it and
tax policies of the
country for low
„
„
n
n
„
„
producers
k
^
thn<o
muae
-
Jr
•
puiitica.
policies;
de¬
they should
of labor
of
large
small.
.
as.
would
_
not
°ducers would not
d s V*n 81 h e n
On that account
auyu.u
command the support
well, as business, and
companies
well
as
v.
.
if
it
gets, much tighter than it is
now, U could hardly h
help but re_
but renow. it co
of economic
sultinal
leyy
therefore
activity
u*-mcl
it
for'credit.
a
reduced
Paradoxically
■*
would
if
be
to
appear
are some
much
inevitably
gets
money
will
then
situation
a
or a
where
to be
such
seems
Any
necessary.
necessary.
will,
of
a
in the ex¬
pause
capacity
development
course,
re¬
duce the demand for funds.
(11)
trary,
Despite fears to the con¬
our
banks will, over the
ahead, be able to supply
years
considerable
additional
of loan funds without
amounts
impairment
of their capital ratios.
clarify their objectives when
cbmes
the matter
to
of
invest¬
Many people do not under¬
stand;
the .importance
of
plan of investment.
up a
setting
They go
along for years, such as the case
am
going to relate to you this
week, and it is only after they
I
Higher in¬
of
capital funds
new
ratios.
years
We have in the past few
laid the foundations for
great new financial mechanisms
capable of increasing the rate of
savings very substantially indeed.
is made to
Reference
investment
the
mutual
fundsL to the pension
funds and to the Federal and Savines
Loan
as
;
increased with¬
be
can
Associations.
These
be
for
than
more
war
have
we
or
had
more
for
peace
some
time
the threat of war in¬
creases,
the whole structure of
government and Federal Reserve
past.
If
the
In
years
ahead, they will generate tens of
billions of new savings to provide
the funds needed by our growing
economy.
supply
our
-
Their future imnact on
demand relationships in
grossly
has
underestimated
been
by
markets
monev
-
pressures
While
the
rise
money
talk
about
"too
money,"
tight
1
x
_
will, of course, be to-
-
Interest
To
Rate
Outlook
(1)
the
up,
best
the short and long
markets are now or
That
TO
to
will in the next few months reach
....
•
1
,
„
funds for many borrowers," it
jpugt ^ recorded that our finan-
cjaj apparatus has, in fact, generaiea
ate(j
than
m0re
more
new
new
this
tuio
funds
iuiius
before in
year
history—
which is a hopeful augury for the
future."
'
.(9)
ever
Money
is
our
not
money
—
.f j
.
now
tight
He
and
has
and
a
eco¬
.
ulative
for
procedure.
A
sound
a
method
of
Several years ago Mr.
reached
the
when
age
he
in
was
with
his
started
his
early
available
to
out
fifties
and
savings,
acquire
income
an
from what he believed
he
him.
to
tive)
solve.
if
takes
serious
he
amount
the
over
few
of
experience
through
years
stocks
common
for
it
he
too
of
bis?
If
and "trade"
know-how and suf¬
continues
to
the
capital
try
to
do
this,
he
is
certain to end up eventually with
the loss of the major portion of
in
age
available
then
life
for
would
capitaL
a
at
man
be
serious
indeed.
Obviously Mr. A is emotionally
the sort of person who also needsactivity.
the
go.
the
things he must do
customer's
ea3y
not
hold
firm and made his desires known
a,
objec¬
an
is
investment, he hied himself to a
large
stock
exchange
member
to
or*
invested
situation and faces it sensibly.
his
a
he
main
But
situation
buying
bc-
first be
his problem is not
to
presently
gained
(if
his
as
The
modest
spec¬
should
should
retire
income
his
good
a
that
With insufficient funds
which
sell
was
highly
some
He
way to
do it—buy some stocks and
them
at
a
profit.
With a
investment-
the idea that he must face
reality.
one
of
needsr
lessons
severe
no
securities
on
get themselves snarled
lack
He
liquidated. His account should be
analyzed in the light of what is
story is not unique, it is
typical of the way some investors
the
some
because
Today he holds
best
through
had
all
sold
up
confidence.
understanding guidance-
has told him the facts of life.
man
with
He switches and changes
investments
representative.
He didn't explain the limit of his
resources
or
his objectives.
He
just said he wanted to buy some
and
and" he
must
be
Temperamentally
011
of
one
some
stocks and make
good
some
A
read
looked
ports,
blocks
profit.
profit
of
re¬
the
his
after
a
tried
his
times
He
not.
He borrowed
on
gradually
in¬
and
debit
another
got
Cor
balance.
Then
few unfortunate trades he
customer's
he
gossip
bought
stocks hopi"<*
other
account
creased
He
firm
and
another
representative.
himself
commodities.
to
up
He tried
the
There
chin
in
coffee, egtfs
investment
the
work that he could*
Usually he bought
higher price and sold at a
*'
*' '
•_
•
program
income and that
an
the
debit balance and
himself.
And
he
took
made
to
this
but
hin*
pay
grow over
off hi?
pay
get square with
is what wasr
Mr.
After
ago.
ar»
uoor*
this
recommended
year
can
He should
years.
up
based
go^d securities that will
A
soijne
advice.
account
approach
to
a
hasn't
in
his
this
since
better
a
over
hesitation
He
change
one
vestment
in¬
new
of liv¬
way
ing and investing was initiated.
Besides, he has found a five-day
a
and the trains.
at
some
Meanwhile, he should set
statistical
Sometimes he made the
and
50 there
over
could be
room.
bought and sold.
to findf
do if he looked for it.
financial
some
t.He board
around
although he is
He
manuals and listened to the
a
up
the
money.
"buys"
over
is
type of activity that can usesome of his surplus restlessness
as
some
goes.
Mr.
...
week'job
that augments his inhis
from
come
•
good
securities,
i.
O
which began in 1946.
(2) That the demand and supply
situation
the
as
to
Meanwhile, his stock list
was
appreciating
in
value,
though the long bull market
con¬
not
highs
And
to
in
money
will,
over
few yqars, be such that
interest rates and bond yields will
remain far above levels of the;'
of
easy
money
al¬
register repeated new
the industrial averages.
worse
still he
was
hold¬
now
ing some sizable blocks of stocks
that had
and
any
depreciated considerably
were
not
income.
producing much if
debit
Interest rates
advanced
and
the
on
cost
investments,
with
a
littld
sound
advice.
But
accept
people have to be ready t<>
sound counsel too — it
seems
to
of
be
so
evident
must get our
us
before
away
we are
from
a
that most
fingers burned
ready to keep then*
hot stove!
his
of
carrying his account was now be¬
coming
more
burdensome.
So
what happened?
Mr. A changed
brokerage firms again.
next
days
•
•
,
the high point of the long rise in
hnnH
interest
rates
and
bond
yields
...i
he.
tinued
working
assumption as to the outlook for
interest rates would appear to be:
sum
term
,
of
-
in our money markets
will probably be reduced.
pressures
"where the money is coming from
SUUUUIl
uiuuicss
ai'u
H*
support progress and prosperity " """ the "unavailability of
and
place
hot
.
many
in
safely
plication of non-monetary conand he is staying away from debit
loss.
trols. On the other hand, if the
balances, commodities, and board
Finally, he
decided
his
cus¬
present crisis results in a signifiroom gossip.
Sometimes you cca
tomer's
representative wasn't a
r,,,,s
y*
—
cmt easing of international tenhelp someone to do a better job
sions, then some | of the demand commodity trader and neither was of
"
*
living, as well as with their
observers.
(8)
are
—
organizations have grown at an ward easier money with the aprate.
into
This
small
With
the
international
situation having reached a stase
of dangerous and uncertain condi¬
tion, the outlook would seem to
(12)
years
they
themselves
can
firm
they wake up to the
they don't know where
going investmentwise.
that
so
impairing their capital—de¬
and capital — risk assets
;
fact
saying
generate internally auite large
posit
many
that
to
out
^
put
water
wanted
and their debts in many cases are
lor
have
terest rates will permit the banks
amounts
and
period
nomic progress.
ficient
or
soundly
spectacular
thought he would take life easier.
costs and terms are more onerous
than
finance
truly
He
of
of
av°id a disastrous?
inflation—induced boom and bust!
(10) The vast expenditures for
plant and equipment during the
postwar years, plus those con¬
templated for the year ahead,
may
well confront many indus¬
sion
view
cycle and to generate enough funds
without
loans
higher
Past.
?u^ ability.
easier.'
prudent
support
optimistic
Things First
people who will
'
that
tighter, it
get much
true
that
'V
corporate
mai
However,
pend increasingly on internally
generated funds now that money
half has naturally produced much
r
near-term re¬
a
business.
of
w
rajes during the past year and a
and
cession
but surely the shortage of savings
MUv
first
20%.
individual
enough to cause
structure of money
yields is now high
tries
with
enough to provide adequate in¬
centives for savings so tnat siowiy leveling out
ecutives
that slowly
The
(6)
rates and bond
bracket of corporate income from
income
not
Bond Bear Market Soon Ending
And Interest Rate Outlook
30
to
;
ing.
Federal
which would
one
By JOHN DUTTON
Put First
it
Rberately been held in check but
is
extremely
CAUC,11C^
Securities Salesman's Corner
capacities.
;
■
an
to
*
And, now may I conclude with a
word concerning the implication
There
accelerated
„
we
of the diffi-
some
culties that have confronted small
(7)
plow back.
a
years
tax
businesses that
here
we
fa»-
a
our
growing awareness in
of the larger
a
managements
tbe
type of planthe years before the Ko-
War, that enabled
have
the
We
sort
.
our
try in recent years to absorb credit
demands that other financial institutions expect us to handle.
we
There is
not
would
had not been
overwhelmingly successful in our
efforts to raise the living standards of all our people and to build
a
democratic
society
in which
every class and race and faith has
ever-expanding opportunities for
making the most of its God-given
tofbonsolidatitms.
have them' if
close
as
il&AI)
only this
in
rean
risk,
planning for the
riod of growth in
the enterprises it
It
is
these problems as our industry is.
And these do not exhaust the list,
L_ln
Then-
sented
VWI>W.VIi
industry
fi- .depression*policy,
the
of
requirements.
not
problems
nancial
section
no
addi¬
action,
tion of
Probably
the
only end in
bust.
Summary
A*
boom
Reserve
adopt
adopt
degenerating
problems of timing credit
relaxation.
and
recovery
Federal
will
wiu
P°licies to prev^nt.
from
serious ones. Like
are
business
the
restriction.
Cabinet
Small
on
ately below the current position, of what-1 have said as to the eco¬
and with the broad trend gently nomic
outlook.
We
are
in the*
downward, and,"
friidst 6f ai great
''
U
technological rev¬
finance industry help in any way
(3) That the future will bring olution
capable
of
lifting our
it can to assist in framing a money quite wide short range fluctua- levels of
productivity, production
and credit policy adapted to the tions in money rates and bond and
consumption to fantastic new
situation of small businesses
as yields.
On the one hand, it is highs in the decade
ahead whicl*
well as the larger ones.
We are clear that at the first sign of a can be, should be, and, in my opin¬
real
recession
in
an unsual position to aid in tne
business, the ion, will be a truly great era or
formulation
lormuiaxion
ui
of
policy modifica- Federal Reserve authorities will economic growth. The two domes¬
puucy
rprilirp reserve reouirements so
as
tions that will not only meet tne
tic threats to that achievement are
broad needs of the country but to ease the bank reserve position inflation
and/or
inadequacy of
also of those sections of the busi- vigorously. On the other hand, it savings. The picture of the
outlook,
is no less clear that during phases
ness
for money which has been drawm
community that have been
System.
time that
serve
a
K
25
They would provide substantial in the councils;of the Federal Re-
It would give that work¬
ing man a bonus of $20 for every
Legitimate Credit Needs Must Be
(2089)
What
This
Man
Needs
Two With J. Logan
(Special to The Financial Chronicle)
LOS
Barnett
ANGELES, Calif.—Robert
and
Sidney
R.
Gordon
have been added to the staff of J.
™ndl Aau» iJl*n
^cc"a
Loean & Co
2115 Beverly Boufe./Quite, frankly what Mr. A needs Logan ec yo., cuo oeveriy x>«
but moder- is to find-someone in whom he ward.
24
The Commercial and Financial Chronicle
(2088)
Continued
from
flation
5
page
.Thursday, November 15, 195ft
..
for
or
current
levels
of
employment and income.. We for-
Public
get that
Utility Securities
Commercial Finance's Contribution
By OWEN ELY
Detroit Edison
Detroit Edison
environs, the total
population
of
not
serves
Company
only get it
approximating 7,600 square miles with a
3,771,000.
While this is the center of the
by
and miscellaneous 4%.
di¬
and
27%,
commercial
revenues,
31%
pose
industrial
their
individual
195324
is
adjacent to the Great Lakes which provide an
of fresh water (the supply of which is critical
sections). Also, from a transportation viewpoint
area
abundant supply
in
other
some
the Lakes will gain in importance with the
approaching completion
of the St. Lawrence Seaway. They provide low cost transportation
for such
naturally,
world.
The
limestone, coal, iron
as
Detroit'has
become
tne
technical
know-how.
metai-worKing
Detroit
center
factory
area
receive the best wages in the nation—about $o,100
the U. S. Average of $4,100.
in "values acided
the
a
in
company
recent
conducted
Operating
Return
tin
Ratio*
In. est.
Capital
Aver.
114
121
58
♦Ratio
of
5.24
126
5.65
134
The
139
(excluding
expenses *
ended
Sept.
depreciation
->Some
1.95(5.
SO,
Employees
are
and
units
new
taxes)
will
on two programs
which last year amounted to over
that amount in
expected
luo*
anu
continue.
to
supply needed
million compared
followed
years
$59 million
ment feels that this is
number
a
Net
of
sold
a
is
the
(delivered)
However,
an
estimated
increases
62c
further
will
b0%
of
be
the
ton
a
in
the
increase
of
price
3oc
of
next
of
possible
.tt.CA.oxuJU.igiy,
conversion
common
of
the
earnings
stock
ldo3,
stock
resisted
of
it
the
decline
advanced
interesting
At
yields
of
the
5.1%
is
price
sells
at
and
than
while
point
recent
and
1955
more
7%
a
3%
and
are
levels
the
say
belief that
prosperity
if
all
that
the
adopt
will
(Special to The Financial Chronicle)
CROSSE, Wis.—Ray
now
aiT.liaied
Inc..
wiai
and
the
dividend
paying
policies
will
that
growth.
it is
as
great.
is
Exchange
SAN
Buildin^.
affiliated
Charles
.(Special to The Financial Chroniclv)
ley E. Chastain is
Calif.
now
—
Hart¬
cormecLe.J
with Financial Investors Incorpo¬
rated, 17 id Eroaaway.
.
loss than any other type of credit
such
The
lags, not
particular
the
as
resource
operating,
of the mar¬
predominantly irregular
haphazard.
We have
been
are
concentrating
moderating our
growth. But the real problem is
to achieve neatly balanced growth.
The.war
and
cold
war
price
levels, and the cold war disloca¬
of
tion
on
cost
relationships,
being built into land and
values.
Thus
the
press
f
that
rom
earlier.'
for
not
are
common
economy
over
the
is
It
the
this
continuing
-
a
business
serv¬
continuing high level of
next
Fortunately
relationships are
built into too many
being
product price levels.
Where they
expansion
been,
has
unwise.
We
well
may
question
has not been too
been
great a
higher interest rates to
that
choke
speculative
expansion.
speculators deterred by
all
rises in rates?
In the last
analysis,
there is only one sure way to deter
those who would add to the nor¬
risks
mal
of business
the chances
only by the gambler.
The
speculative
element
business
at
year,
tmough
decisions can
selection among
by lenders. Until we make
loans
by
the monetary authorities
cannot
we
to be
this,
see
expect current policies
wholly effectual.
is
It
the
not
cluded,
in
the
little
Rolfe
at
seems
doubt
to
reason
prosperity,
Mr.
peace.
"tnere
con¬
present
that -this
state of affairs is still so." He de¬
clared
that
proved
an
the
has
consumer
excellent
credit
man¬
Our experience in this field
ager.
Rolfe's
Mr.
supports
conclusions.
Capital Requires More
shall
We
studies
there
But
that
Saving
about the
more
being made
now
cluded.
it
know
credit picture when
consumer
need
of
aspects
are
wait
not
the
con¬
are
those
upon
This year, as I was pre¬
studies.
paring this talk, I again visited
Washington to exchange ideas and
with
information
economic
ad¬
visers of the administration.
I found in
sition
Washington
take
to
strikes
This
able
of
view
provided
sav¬
proportionately
ings increased
it.
dispo¬
a
realistic
a
the level of credit,
me
consideration; the
to
reason¬
a
as
gains
new
in real income should be reflected
in
in
part
the
within
assets
liquid
More¬
growth of
the family.
this is needed not only for
stability in family finances but
also
in
tne
investment
capital
over,
market.
task of economic
We
the
policy in the
pe¬
ahead to expand savings.
riod just
too well aware of the new
are
capital needs of our clients.
It
well
is
brackets
to economists
known
the
in
those
that
save
at
income
upper
rate
a
which
is
high it cannot be increased. But
today's levels of personal and
at
income, there is a virgin
potential savers in the
brackets.
A small
family
of
field
income
lower
increase
for
in
the
rate
of saving
by
would
brackets
lower income
the
vast volume, of savings
capital investment.
produce
but
level
rise
depression,
and
war
so
in
expansion
checked
be
the
1 do not think any sector of the
if there financial industry needs to be con¬
reliance vinced thaMt should be a major
a
new
worthiness of the borrowings that
is
The
important.
level
rise
can
ratio
price
even
rowings
is
of
bor¬
if
dangerous
maintain
To
favorable.
level
lower
their
deteriorates.
soundness
'
continues
a
the worth
rely
on
the higher
produce
interest alone to
of
rates
this increase.
We know from past
experience that they will
job.
The
of busi¬
financial institutions of the
try.
cannot
We
the whole
borrowings, we are obliged
rely on the vigilance of the
to
Supplement Interest Rates
Need to
with disposable output if the cost-
ness
,
activity
prices.
price-cost
have
very
of
business invest¬
on
upon
these
for
collection.
Very low delinquency and loss
figures were found to
prevail
in¬
new
forces
the pressures
as
ket,
allowance
cost of
coun¬
Certainly, thus far, they have
the' confidence that is
investment
not do
-
of the
bankers
country and the securities dealers
took
progressive step the
when they spent $100,000
effort, through the social
a
very
other day
an
on
studies teachers of the country, to
placed in them.1
induce
P.
engaging 'in
tor
effects
of
actual
capital
a
of
Opens
a " secu¬
rities business from offices at 1L29
ITairie Street.
And
are
There
vorable
is
activity
whole.
casters
know
are
the
in
on
less
But
probable
the
this
year
the
as
fore¬
certain.
favorable
portents.
ones.
ex¬
and
unfa¬
The automobile
industry should enjoy its second
biggest passenger car year. The
housing boom, however, is likely
to limp along unless its situation
is
eased,
even
though we have
completed the rehousing of our
people. Publiq works spending is
not
The
Consumer Has Proved
an
The
other
aspect
of
the
Federal
consumer
search.
it
I
the
to
their
confess that I
share fully the
disquiet over the level of
instalment
made
must
difficult
^current
Our
and
of Economic Re¬
Without anticipating
findings,
find
Board
Reserve
National Bureau
debt.'-
'
without
:
of levels are
allowance .for .in¬
comparisons
the
of
masses
financial programs.
Even more can be done.
credit
instal¬
ment
credit, is currently being
studied
in
great detail by the
problem, that of
broad
the
people to include intelligent, conservative investment in their
family
Excellent Credit Manager
and the inves¬
management
must
level
Henry,
GLENVIEW, 111.—Earl W. Hen¬
is
depres¬
sion, instalment loans suffered less
applying to the next two quarters
E. W. Hendrickson
drickson
subject, Sidney
study recently.
a
He found that in the great
earnings
Joins Fin. Investors
SACRAMENTO,
reported
quality
of the
one
merited
Calif.—
Pedeprade has become
with
credit,
the
least for the first half, are simply
FRANCISCO,
O.
industries,
such
in
but
industries.
in
The government economists who
forecast
of
are
taken
immediately halted. Its momentum
too
volume
great
industries,
Are
,t
(Special to The Financial Chronicle)
Ernest
Rolfe,
of the
problem
instalment
The Growing Need for Investment
in the smaller companies of
only
all
But
Based
Charles P. Henry Adds
High-
income
average
the
$1.80,
recent
Not all increases in
the fact that there
gov¬
ment, the current boom cannot be
is
The
us
off
reforms
accounts
what
Leu 6c
high
the
specialists in
vestment should not obscure from
con¬
peak demand for goods and
1179 Market Street.
,
an¬
ices.
declined
times
absorptions prove to
Lags Still Occur
only
changes
one
utility—
utilities
of
35 V4,
15.5
Detroit
diversification
at
inevitably accompanied by im¬
balance, overinvestment in certain
on
adopted
long period, is becoming a
that
to
average
other
part
around
about
currently)
con¬
are
associated with sus¬
profit margins. Any great
in new capital investment
tained
labor and
business,
penditures in the recent
LA
it will.
automatically.
Twenties
3V4%
expected
all
digestible.
output
high production and
different
the
Bell & Farrell Add
berg is
for
to
income,
employment and production in¬
troduced during the second world
war are still going on.
Our econ¬
omy, primarily as a result of these
changes but also as a result of
$2.28.
Farrell.
expan¬
Product
something
of $420 billion in 1956.
Structural
power
Ediaon has provtd to be one of tne best "defensive" stocks?
During
market siumps
(1948-9,
four
"tax-free."
me¬
The Current Boom Has Sources of
issues, and not more than half this amount
expected, so that the dilution of earnings would be
19o3
rate
amount
democratic
taking
growth
development
expected to prove success¬
Not
stock
National
not share
ernment
President Cisler takes pride in the fact
that, despite Detroit's
tne center of the cyclical automotive business,
Detroit
in
go
the
and
make for further sound
debenture
Another
small
present
the order
tinue
being
in fact
can
meeting
could; but I do not
record
improve.
7%.
de¬
Its flex¬
activities
of
tnat
a
employment will follow this year's
Only about lb0,00u aduitional shares could be added
has
solve
business.
other year of
largely offset by operating
higher fuel cost will also be
result
of
no
of
still is vulnerable to crisis if costs
the
I do
coal
195/
Edison
as
indus¬
play
can
toward
needs
could
It
year.
contracts.
negxifcmic.
finance
cannot
it
varied
way
Gross
on
preferred
on
actually
and
At
in
is
But
1957
The company nas
recovered from industrial and commercial customers
convertible
itself,
dium-sized
to
in
about
of
about
and
a
well
as
Strength and Weakness
increase
these
as
profits
suould
and
economies,
businesses,
which
commercial
long
capital
increase of about
factor
On
present
ueiiu
efforts
be
and
by
angles.
income
in
one
a
gain about 10% this year but due to an
15% in the number of shares, earnings may lag
little below last year's $2.43 per share.
An unfavorable current
•.
in
earn¬
ible
witn half
no
be
econ¬
large,
cisive role in its solution.
September this year; manage¬
very desirable metnpd of financing, from
a
of
and
wages and
problem.
policy of issuing convertible debentures,
a
were
types
medium
Our
simple—with
the
lines.
output.
to produce economies,
average.
some
Special
Problems
there
ings;
$200,ouU in 19o3; this favorable trend is
Two interconnections with the Hydro-
Detroit Edison's capital structure is
stock and an
equity rado wen aoove
of whicn
Face
Capital
take
is
a
at Niagara Falls.
for
and
all
small,
part;
to Niagara Mohawk following the debacle
power
our
carry
balanced, forward moment
Electric Power Commission of Untario have been beneficial, with
power flowing each way as needed. This has helped the Canadians
to
family,
average
of the
some
with challenging problems.
all
outstanding immediate
which
less
use
new
surge
Businesses
sion,
working
to
faces is that of converting the
present investment boom into a
than 9,(MM) BTUs.
.
is
omy
10,920$
months
it
problem that the American
11,080
5.73
operating
fig
if
satisfactions.
Credit
'
revenues,
forward
current
Smaller
12,190
12,100
11,340
55
are doing it, too.
But
them must join the ranks
boom,
try,
4.82%
5.20
56
'me
can
the
The
63%
of
fronts us, as any new
ful.
KVVIi
61
1956}"---
inequities
movement
BTUS per
Employee
With suitable amend¬
i
is
aggressive
an
Customers
per
ment boom,
Not
er
drive for increased efficiency, witn good rtsults as indicated below:
-Year
smaii
steady and stable growth of
has
years
could
ments it could correct
doing
borne
large,
and
are
people up to a new plateau of
higner living standards and great¬
by
generated internally anu two-thirds by sale of securities.
previous five-year period $385 million was expended for
The
are
large companies
by
war
construction.
:
Reserve
Certainly well-timed pol¬
stretch out the invest¬
timing.
icy
must,
if
seven-year
enjoyed
a
policy is al¬
ready curbing business investment.
But it faces a critical problem of
many of
ing capacity at present is about 2,811,000 kw., but at the end of
next year this will be increased 20% to
3,391,000 kw., and by 1960
to an indicated 4,191,000 kw.
Capital spending during die fiveyear period 1956-60 will approximate $45o million, witn about onethird
com¬
up
Federal
companies
workers
for tne automotive industry, revenues increased 9%.
Detroit Edison is planning for substantial expansion. Generat¬
In
that
able to put
operations
on
a
economy
present
this,
manufacturers," and a 30% gain
in the number of
manufacturing establishments. In the postwar
period Detroit Edison's revenues have increased from $85 million
to $233 million, a gain of 175%. In the 12 months ended Sept. 30,
despite the fact tnat this has been somewhat of an "off-year"
•
enterprises
the
is not to peter out as another cold
Michigan is .showing excellent growth.
In the
period 19*1-54 census figure,s showed that Michigan
gain
u*e
oi
the
The
compared with
^
68%
such
or
substantial part of
slack but by no means all of it.
taking
which it is aimed.
and other metals;
ore
region is also noted tor excellent industrial manage¬
and
ment
materials
raw
the
outstanding.
Aggregate losses on some $941
policy, million of
auto debt outstanding
sound,
efficient
and
profitable which denies credit and capital to in 1929 amounted
to less than 1%.
basis
and
are
able
some
businesses in a position to
to
prepare
In
contrast, other types of de¬
without excessive speculative undertake
sound
expansion and faults
and losses were running as
risks to maintain and perhaps im¬ does not effectively
cl?oke off some high as 50% and in few cases less
the
prove their positions in the years of
speculative ^ excesses^ at than
10%. Of course, this makes
ahead.
' '
'
light industry one-third. Average residential
is moderately ahead of the U. S. figure.
revenue,
Tnis
of
action
practical
problems of growth. And most of
all we will only get it if all the
is surprisingly low as compared with some other utilities in indus¬
trial centers;
heavy industry contributes about two-thirds of
use
and
bor in the solution of the
industrial percentage
The
initiative
the
planning,
by business
private enterprises, by the co¬
operation of management and la¬
automobile and parts manufacturing, it also features a wide
versification of other industries as well as farming. Residential
farm sales contribute about 38% of
industrial
within
such sustained annual employment
levels.
only the City of Detroit, but also its
area
about
Higher Business Growth Level
his¬
our
tory have we had so large
a
working force, such high employ¬
ment
To
in
before
never
of
Instead
increasing tax exempt personal
income by
vocated,
$100
or
income
as some have ad¬
could exempt the first
$100,
we
$200
of
taxable
from the personal
interest
income
tax.
A
a
$100
exemption
would
give
working man in the lowest in¬
bracket, the 20% bracket, a
bonus of over $1 for every $200 he
come
saved
anv
in
a
savings
account
other form of investment
or
that
•
\
Volume 184 'Number 5586 r,~The
helped to meet the'need
for
Commercial and Financial Chronicle
new
They would provide substantial
capital.
It would give that working man a bonus of $20 for every
incentive to the employee and the
thousand dollars he saved.
small enterprise to save and invest, at a time when their participation in the saving-investment
.
Legitimate Credit Needs Must Be
Anticipated
economy.
Our makers of economic
to anticipate the
policy
legitimate
need
demands for credit and
capital and
to adopt money and tax
„
as-
a
savings
incentive
tax
policy, to assure that the money
will be tnere when it is needed.
benefit
the
whole
'
.
in the councils of the Federal Re-
ately below the current position,
and with the broad trend gently
downward, and," 7"*"^'"' Tv *T
;
finance industry help in any way
(3) That the future will bring
it can to assist in framing a money quite wide short range fluctuaand credit policy adapted to the tions in
money
rates and bond
situation of small businesses
as yields.
On the one hand, it is
Business
Small
Aid
It
Proposals
businesses
have
System.
serve
other needs, such as tax aids in
the purchase of
used property,
Such tax aids are given only for
the
purchase of new property,
the
as
needs
Because it did, it was
able to serve its clients even at a
time when the credit market
was
"
-
■
-
considered
-
"tight."
Consider
our
^.tbe^period ff°™ tlle
War to the
Korean
proposals are included in the
"Progress Report of the Cabinet
*
Committee
issued
Small
on
last Aug. 7.
Business,"
Some of these
proposals have been
before Con-
National
Commercial
.
Fi-
Conference, shows that
rep-
resentative companies in the commercial-finance industry doubled
their
capital
in
resources
the
last
six years.
Then, in the past year,
they went into the capital market
borrowed *c>n long-term ob-
and
anodier 15 to 20% rhore.
They did
tional
funds
prepared
obtain
not
to
today's
for
not
sented
meet
the
There
the
is
growing
a
very
problems
careful
the
future.
risk, repre¬
thorough investiga¬
of
the
and
the
and
economy
planning for the
next pe-
business and
our
serves.
was
only this type of planning, in the years bsfore the Korean
War, that enabled our industry in recent years to absorb credit
demands that other financial institutions expect us to handle.
'
that
of
fi-
the
It cannot be said that the
framers of our
present credit restriction
policy have been equally foresighted.
I
do
not
that in
say
criticism
of credit restriction. The
Federal Reserve and
Treasury pjlicies designed in
alternating
credit
and
have
noi
need
in
larger
business
been
been
this
mignt
year
avoided
its
it
have
interests
had
adequately represented
more
.
relaxation.
Or
like
be
counted
Reserve
supply
the
which an ade...
.uuu,v
lhv,
cannot be
growing economy,
of activity
level
quate
o™
....
without
money
time
maintained in
a
o1rMHv pVrn>rif>nr»ed
.
an(J
\rntp„
vields
bond
l\««-
4-U/t
controls.
/I
We
adminis-
ii
a
hrmmht
the
than
has been
the case for many
of
structure
enough to cause a near-term reof business. However, if
cession
it
.„
gets. much tighter than it' is
it could hardly help but re...
now,
suit in a lower level of economic
activity and, therefore, a reduced
demand for credit. Paradoxically
^ would appear to be true that
plant
/6)*
of
structure
The
money
equipment during
and
plus
years,
rates and bond
templated
the
for
small
financing is the basis of all
business expansion. To ex¬
pand, small business needs
it
There is
a'verv
earn¬
high
their
in
practical
y hv
wav
growing
H
it
is
is
wTv
way
a
a
635
in
d
ryf/" 7UlVetUrn grete:
from somewhat
tax
revenues
more
profits and
expansion
from
jobs
in
staoie
a
and
ojsi-
long-run
in-
wage
comes.
ppnpratpH funds
generated funds
costs
man
fpr
would
have
adjustments in
rate income to
needs.
The
the
crease
rate
to
the
make
tax
on
two-
corpo-
adapt it to present
first
first
would
be
bracket
of
to
in-
corpo-
income, subject to the lowest
the
tax
rate
this
on
more
for
onerous
in
have
years
many
'
,
We
ahead,
nf
will
„01]r<,p
re_
"
duce the demand for fu d
.
These
tax
types
of
relief
the monty
in
(11)
trary,
years'
Despite fears to the conour banks will, over the
ahead, be able to supply
additional
considerable
a
•
from
in-
policies of the country for low
individual
income
revenue
weaken but would
those
and
producers
/
.
the
that loans
amounts
few
past
be increased with-
can
—-
out
impairing
posit and
ratios.
■
capital
their
capital
O
policies.
not
strengthen
On
that
account
they should
command the support
of
well
of
labor
as
large
small.
.
as
companies
-
business, and
as
vu
well
'as
here is
one which would support
to finance soundly and safely a
truly spectacular period of ecunomic progress,
"I
*
'*•
i
Q
rkVYMDV
#ft>#
By JOHN DUTTON
Put First
are
ing.
Things First
people who will
the matter
to
invest-
He
under-
importance of setting
plan of investment. They go
along for
such
years,
the
as
case
going to relate to you this
week, and it is only after they
am
have
put
put
nave
and
and
the
up a
place
can
firm
of
people do not
Many
stand
I
some
clarify their objectives when
comes
themselves
into
xnemseives
hot
into
not
has
confidence.
He
needs?
understanding guidanee.
had
all
some
lessons
severe
because
investment-
no
has told him the facts of life,
man
Today he holds
ulative
highly
some
securities
that
spec-
should
bo
liquidated. His account should bo
analyzed in the light of what is
best
best
for him.
lor him.
He
He
should
first
fin
bo
ya^,tba* they wak.e up to, the sold on the idea that he must face
funds
Jaet that Jthey- donM. know where reality With insufficient fun,
,
oi>
.
they are going investmentwise.
which
This story is not unique, it is
typical of the way some investors
with income
get themselves snarled
the lack
with
of
his
started
through
method of
up
sound
a
available
to
out
savings,
acquire
from what he believed
he
income
an
was
a
good
to do it—buy some stocks and
them
at
a
profit.
With
a
way
sell
modest
amount
investment
he
of
hied
'
stock
to
retire
(if
he
his
as
invested
main
objee-
tive) his problem is not an easy
one to solve.
But it is not too
serious if he takes hold of hisr
experience
himself
to
nimseii to
exchange
a
a
member
—
risk
de-
assets
international
reached a stase
the
situation having
Reference
substantially indeed,
ls
madeto the mutual
funds
j1)vestment
to
the
pension
fun(js and to the Federal and Savjngs
Associations
Loan
organizations
have
These
at
grown
In
rale.
the
an
years
ahead, they will generate tens of
billions of
new
savings to provide
the funds needed
by our growing
Their future imoact on
demand relationships in
economy.
supply
our
-
has
markets
monev
been
than we have had for some time
Past.
While
the
rise
in
money
the
presently
The
situation
his
fo
support
jty "
ancj
must
£or
^
and prosper"unavailability of
Dr0gress
the
many
rerorded
borrowers,"
that
cial apparatus has, in
ated
than
more
ever
which is
future.
(9)
a
new
before
our
finan-
fact, generthis
funds
in
it
our
year
history—
hopeful augury for the
."
Money
is
not
now
tight
would
capitaL
a
resources
his
or
objectives.
He
investments
and' he
up some
be
although he is
could be some"Work
must
blocks
profit.
a
profit
of
stocks
Sometimes he made the
other
and
bought and sold.
his
account
creased
after
a
tried
hopi"® for
his
times
gradually
in¬
debit
balance.
few unfortunate
customer's
firm
Then
,,
and
another
There
there
over
50
"that
he coulci
up ar»
.
jncome and that
an
himself.
And
took
this
but
ing
and
to
A
some
^
in
since
better
a
investing
was:
over
a
hesitation
He
change
account
approach
what
advice.
one
vestment
off hi?
with
square
is
Mr.
After
ago.
made
to
grow over
pay
get
this
recommended
he
can
He should
years.
debit balance and
year
trades he
reoresentative.
he got himself
He
use-
program
based uoon
securities that will pay himr
on
and
another
not.
He borrowed
of
to findf
can
Meanwhile, he should set
^be
room. He bought
an
investment
gond
.
be
one
do if he looked for it.
around
he board
serious
of his surplus restlessness
and
the statistical
ports, looked
manuals and listened to the gossip
.
a£
man
Obviously Mr. A is emotionally
SOTtalso ^
„i
activity. He switches and changes-
this
wav
was
hasn't,
his
in¬
nevr
of liv¬
initiated-
uo
-
,
—
rr,
Sr
But
•
the best working highs in the industrial
To sum up
r
averages,
people have to be ready tor
accept sound counsel too — it
to
seems
us
term
nK>ney
markets1 are "now0 o?
will in the next few months reach
the high point of the long rise in
bond
yields
1946.
(2) That the demand and supply
situation as to money will, over
the next few years, be such that
interest
and
rates
which began in
interest rates and bond yields will
remain
far above levels of 'the.
days
of
easy
money
but
moder-
and were not producing much if
any income. Interest rates on his
debit advanced and the cost of
carrying his account was now becoming
more
burdensome.
So
what happened? Mr. A changed
brokerage firms again,
-
Needs
away
we
.
Quite frankly what Mr. A needs
to find-someone in whom' he
so
evident that most
get our fingers burned
are
ready to keep then*
from ^ hot stove!
Two With J. Logan
(Special to The Financial Chronicle)
LOS
ANGELES, Calif.—Robert
Barnett
and
Sidney
R.
Gordon
have been added to the staff of J-
-- ----
is
be
must
before
from
life
for
indeed.
of
^her^the mo^ey incoming
in
age
available
then
to the chin in Besides, he has found a five-day
pressures
commodities. He tried coffee, egjrs a week job that augments his inward easier money with the ap- and the grains. Usually'he bought come from his good securities,
plication of non-monetary con- at the higfier price and sold at a aricl he is staying away from debiS
,_trols. On the other hand, if the lossbalances, commodities, and boarcl
present crisis results in a sigmfiFinally, he decided his, cus- room gossip. Sometimes you cctx
cmt easing of international ten- tomer s^ representative wasn t a help someone to do a better job
sions, then some of the demand rommooity trader and neit er was of living, as well as with their
pressures in our moooy markets he. Meanwhile, his stock list was investments, with a little sound
will probably be reduedd.
"ot appreciating
in
value, al- advice.
<
government and
—ted» —
<8)
threat of war inwhole structure of
Federal Reserve
will, of course, be to-
If the
creases,
certain to end up eventually with
the loss of the maior portion of
his
firm and ™ade his desires known the go. Temperamentally
a. customer s
representative, the things he must do is
didn't explain the limit of his some type of activity that
small
With
(12)
.
corporate. £Un(js
would
and/or
inadequacy of
savings. The picture of the outlook
for money which has been drawn.
UUt/Lolll/lUt
impairment
for of dangerous and uncertain condigreat new financial mechanisms tion, the outlook would seem to
capable of increasing the rate of be for more war or more peace
first
cre.it and
economic growth. The two domestic threats to that achievement are;
inflation
.
bracket^ corporate income from
equities
consumption to fantastic new
highs in the decade ahead whichcan be, should
be, and, in my opiiiion, will be a truly great era oT
,S/>S*7f VI f I/>fl .S/Tf/>® 177/7 77
l?»rge
.
foundations
the
laid
>'ears
s
reduce
are
in many cases are
than
higher
past.
that monev
that money
now
now
and terms
and their debts
accelerated
We
I conclude with
now may
issa
jpv_lr.nmpnt
attractive'rates
very
larger and much
And,
ius^ sa*d he wanted to buy some
bvCthiTmore
of of their'capital" ratios. 'Hfgher'in- stocks and make some money. He
return available on such savings,
terest rates will permit the banks wanted mie good "buys' as the
Corporations will' probably de- to generate internally ouite large saying goes
some
financial reP™d increasingly on internally amounts of new capital iunds so
Mr, A read over
(7)
'
growing,
the
con-
families, having movod to
plow back
can
those
year
of loan funds without
ternal
productivity, production
and
if money gets much
win then inevitably
postwar
years.
An
Small business needs more than
fair shake in the
money market
Wo
houn
^
*
We have
to give
recognition in
our tax
policy to the fact tnat in¬
levels of
our
tighter, it procedure. Several years ago Mr. situation and faces it sensibly. IP
Sfonev rates into a far better balget much A reached the age when he he continues to try and "trade"
££§7
easier-?
ht he w°Uld
ta,ke}?le. easierJ
kl\ow-h°w and sufall supply and demand for funds
(10) The vast expenditures for H^was in his^ early fifties and
capital to do this, he is
w
.
a
Summary
class and race and faith has
ever-expanding opportunities for
making the most of its God-given
capacities.
ess°°'
controls,
'
the
rev
i
word concerning the implication
not
in
can
ip
midst 6f*a great technological
olution
capable
of
lifting
every
■
in check but
been held
FedJral
are
enough funds
*
efforts to raise the living standards of all our people and to build
democratic
society in
which
will be alleviated, individuals ana
not
m
a
Bond Beat Market Soon Ending
And Interest Rate Outlook
iiberatelv
to the eco-
as
We
aci°Pt severely restrictive an extremely optimistic view of
sever
Policies to prevent wage inflation our ability to avoid a disastrous
Policies to prevent
°
J°*n^ati°n—induced boom and bus*
og boom which could only end in cycle and to generate
it
th
outlook.
.
There
Continued Jrom page 6
of what-1 have said
nomic
25
adopt
wlfr
built-in
should
of
are,
will
counter-
have
depression# policy,
our
confront many industries with a situation where a
leveling out or a pause in the ex-
Capital Needs of Small Business
i Should
Be Met
ness
Like
difficult
the
like
^eb—^ r™£ ^thorftiS
* e^eral Reserve authorities
.
a ndw
possession of the
lifn
by the financial industry, economic amenities of life, can
Our present controls can be
made now
emphasize the building of
selective
by
granting
suitable their financial security through
increased
exemptions where warranted. 1
personal
savings and
ings
T.ik*
ones.
depression.
and
blunderbuss
selective
->
tered
corinnc
serious
are
problems of timing credit
yields is now high
enough to provide adequate incentives for savings so that slowly
capital
course, needed to avoid
ao
the
of the diffi-
culties that have confronted small
ps-
riods to restrict and to
expand the
of
awareness
some
-
need
ahead
the neat
Their
without
riod of growth in
the enterprises it
we
.
The V
problems that we face in the
these problems,
of
managements
businesses
addi-
yesterday's
tion. of the potentialities
use
disadvantage by credit
requirements. * They
action,
It
been
industry is as close to ffconsolidatibns.
We: would
not
these problems as our industry is. have them if we had not been
And these do not exhaust the list, overwhelmingly successful in our
Why?
or
have
nancial
the
nance
of the busi-
that
restriction.
year
clear that at the first sign of a
recession in business, the
Federal Reserve authorities will
reduce reserve requirements so as
to ease the bank reserve position
vigorously. On the other hand, it
is no less clear that during phases
g.ress for seYeral years* 11 is time Problem of timing tax relief. But
present day. M:
they got action.
l.
survey made by William J.'
Probably no section
Drake, Executive Vice-President
of
modificaonly meet the
country but
the
community
ness
are
policy
not
of
also of those sections
Ja
such
try did anticipate the needs of its
customers.
of
that will
broad
We
position to aid in tne real
formulation
tions
commercial
larger ones.
unsual
an
many
.
that the
time
is
well
Small
„
policies,
such
would
process
(2089)
T
&
c
2l 15
Beverlv Boule-
Logan & Co., ziio tfeveriy Houie
vard.
26
The Commercial and Financial
(2090)
Chronicle..
excessively "progressive" nature of existing statutes, thus
permitting the industrious and ingenious to keep at least
a
reasonable portion of the
extraordinary income their
hard work and their talents
brought them!
Continued from first page
What
wonderful
news
it
would
if
be
setting the
cline in
past year a number of differences arose between the Presi¬
dent and the Democratic members of the House and Sen¬
within his power to
so
ate. At times
list of
the expense
at
eral
preparation for the then approaching election campaigns.
More often than not the differences were not fundamental,
and on more than one occasion were to all appearances
with
date
of that long
han^ers-cn who
tion
to
would differ in no really vital or
from a measure designed for the same
significant way
purpose by the President's own advisers and supporters
in his own party in Congress. But for the fact that politics
has made rigid parity support for farm products a sort of
Democratic shibboleth, and similar political maneuvering
has branded the "soil bank" idea Republican, it would in
all likelihood be not too difficult for the President and the
to sit down with the members of the
and draft an agricultural relief measure
acceptable to both of these political groups.
Road construction, too, has become a sort of political
football during the past year or two. The President's pro¬
gram had and still has serious defects.
It gave the oppo¬
sition an excellent opportunity for criticism mostly of a
negative or destructive sort, but, politics aside, there is
good reason to doubt whether it would not have been quite
possible for the President and Democratic leadership to
agree rather quickly upon a road building program that
would meet the approval of both parties. There has, of
course, been a great hue and cry about the Republican
party being the party of big business and the Democratic
party being the friend of the "little fellow," but it may
well be questioned whether the matter is taken very seri¬
ously except in political oratory. The issue is hardly
more than a
phony, and most of those who make use of
leaders of his party
Democratic party,
well
aware
of the fact.
There are, of course,
elements in the Democratic party
with views and programs
President.
pression
far removed from those of the
Some of them
goes,
are far to the left, as the ex¬
and others rather too far in the other direc¬
tion for the President's
matters which
some
So it is
taste.
members of the President's
are
though also with
Not only that, but
neither leftist nor rightist, and
own
important matters, too, there
party.
are
members of the Repub¬
lican party who strongly, even violently, disagree with the
President and his program. On the other hand, there is a
large center band in both parties which find themselves,
very much in agreement with the President's programs
and ideas for the management
country.
of
one
of the public affairs of the
It
may be questioned whether this is more true
than of the other of the two parties.
Problems Political
It
is
thus
seen
that
partisan political problems are
serious import
very nearly the only difficulties of very
which the President and the Democratic
The
during the next two years.
elapse before another election time rolls around. It ought
to be possible for the
groups with very similar social and
economic philosophies to find
ways and means of working
together effectively. The President has a well earned
reputation for being able to work with people of diverse
personalities and prejudices. He can scarcely have further
political ambitions, and that fact is well known to all. Ex¬
pensive and trying strife and deadlocks really ought not
to be in the cards
as a result of the election outcome.
The real trouble is that both the President and those
disposed to follow him
things
to avoid
want
so
often to do the wrong
doing the things that are so sorely
needed. How much more
heartening it would be were it
possible to say that the President and groups in both of
the parties inclined to follow his lead were
determined,
for example, to turn
away from New Deal and the Fair
Deal nonsense and bring back to the
country the kind of
government which permitted us to become the envy of the
world! What cheering news it would be to hear
that the
program being planned for next year included, for exam¬
ple, a thorough rewriting of the tax laws to eliminate the
or
The
nitely
is
reached
expected
that
pretty
defi¬
homebuilding has
that
a
"normal"
new
of
million units.
one
ahead
the
rate
over
Short of
the
year
is
unlikely to rise much
trie .one
million
level,
Experience
shows
that
Huove
either.
whenever
dustry
the
homebuilding in¬
an
important
as
during the past
experiences
decline
such
it takes considerable timetfor
builders and others to reorganize
year
to build
units.
much larger number of
a
Continued
heavy demands
for funds
generally will keep gov¬
ernment-guaranteed and other
mortgages at a competitive dis¬
advantage in attracting money for
investment. It should be kept in
mind, however, that amortization
and interest payments on all
out¬
standing home mortgages are al¬
ready providing a huge pool of
funds
in
for
new
potential
homes.
annual
an
At
repayments
gage
the tremendous
in
reinvestment
present mort¬
of
alone
grounds
entirely
for
these
pur¬
poses.
O'^er
Educational,
Non-Residential
V;, ;r;-.
to ^ obtain
record
new
level
1957 at least
mere
will
be
set
in
slightly ahead of the
current year.
A crest in
commer¬
cial
building,
especiallv among
shoppin® centprs, office buildings,
and related structures, howevQr, is
likely to
become
12
months.
IB
to
much
of
the
evident within
BV. that time,
"catching
up", in
commercial
building caused by
unfavorable depression, war, and
postwar mnHitions will have been
accomplished.
' ;
The
for
need
additional
tional
structures
acute
in
most
he
to
While
areas.
school
grammar
educa¬
continue
the
problem is
poace
far from solved, the newest class¬
pinch is beginning to* occur
living space by ading on or mod¬
ernizing their present homes l;han in junior high and senior high
babies" reach
by buying new houses. Also, some schools as the
families are buying larger older their tnena.
Tight money is dis¬
homes with the
expresed purpose
of
fixing them up to accommodate
growing families.
"
(3) The extension to the do-ityourself trend from hobbyists
the
general
widened
public
the
to
couraging
some educational build¬
proiect<?. but the need is so
great that further moderate in¬
ing
in school budding
initely in sight for 1957.
creases
Manufacturing
definitely has
market
for
plants
are
#
are
cur¬
building
rently being built in record num¬
bers. and this ricjug tr^nd is ex¬
pected to persist well tb-oiigh
ment is now permanently rooted next
year.
American
industry
in the homebuilding field.
The will bring into production more
heads of
younger--families and new industrial capacity during
those in
or
approaching retire¬ the coming year than in any com¬
ment age seem
to be the most parable period in history. Some
rn+baoi-s
in
industrial
active repair and modernization scattered
materials.
The overwhelming evi¬
dence is that do-it-yourself move¬
enthusiasts.
yourself
cash
of
Most
work
basis,
by
the
do-it-
financed
is
a
on
it is less direc^y
tight money condi¬
so
affected
running at tions.
roughly 5515
housing units, should these funds
Commercial,
*
room
or essentially the volume
required to build one million new
used
and
speaking,
the^e
is
still, enormous
strength
in the
non-residential building field.
A;
repair and modernisation market.
billion,
be
ac¬
1957
Generally
importance of the
are
rate
in
attractive
more
builders
more
Building Last?
level
considerable political stimulus,
however,
decline
"fix-uo"
How Mich Longer WiM the Boom
Building Prospect|!head
answer
moderniza¬
the
bring about new expansion in this
important building market.
Quite understandably you may
around one million new starts per
ask—why is this market so large?
year which seems likely to persist There are several
important rea¬
over the
coming year and quite sons:
probably during the remainder of
(1) The nation's# total housing
the decade; This compares with a
stock includes jabout
50
older
level of new starts of
1,100,000 in homes for
every new one
built
1956 and 1,300,000 in 1955.
this year.
Maintenance plus the
As already suggested/somewhat
growing importance of style ob¬
easier credit conditions are to be solescence point to
g growing need
expected
for
political
reasons
to fix up these older dwellings.
alone whenever new housing
(2; Millions of families now are
starts sag much below an annual
finding it easier
On
financial
rate
managements
some
ingly
•
tions
to
outlook
is
f
continued
for
growth
in repair and moderniza¬
activity during 1957 and for
considerable
time
thereafter.
new
output
the
substantial
oonaci.tv
undertaking
increas¬
seem
that
concerned
these
now"
are
Understandably,
reported.
from
Stronger Repair Market
a
being
^ir vv,-
,
The
tion
capacity nlans. however,
sold
be
further
addi¬
before
maior
ex¬
pansions. This is not to sax that
any imminent decline in industrial
building is in prospect, but fur¬
ther increases fmm current record
levels
the
during
coming year
only will the factors just
war
boom is new homebuilding previously mentioned be impor¬ probably win be small.
In short, the outlook for non¬
now seems pretty clearly to have
tant in supporting this market, but
bu;ldmg
next
Trear
been passed, but a
relatively high several others will give added residential
continues
to
be
love! of pctivitv. measured bv all
bright, with a
strength:
;
v; v
but the top postwar years' experi¬
slightly C5%V
volume ex¬
(1) Tight money, conditions and
pected than in 1956.
ence, still lies in prospect.
the
general
inability
of
more
Wha* Iirm~r+ar»* Chawms **» Buildfamilies to
finance new
homes
In
short, the peak of the post¬
Not
How Much Significance ShouM he
Attached to Repair and Mod-
party will en¬
Now two years must
counter
most
and
With
tivity will become
Fresh Look at Construction:
over?
To
homebuilding, however, it is
be
to
satisfactory
have shown real in¬
repair
a n
of the Democratic party
in
in
work.
new
tl^limit! We
of
performance.
in
suspect, for example, that any bill on educational
aid and the like drafted by the more responsible members
be
extent
"package" has not
regularly available. In fact,
terest
Continued from page 11
We
will
the
to
a
few builders
things thai "need to be
done, but why do so? All thoughtful men and women
know well enough what such a list would contain.
Could Cooperate
are
and
such
been
House.
it
true
assurances
financing
Treasury!
could continue down the list of
This
year.
local
building organizations
public a reasonable re¬
pair and modernization "package"
now draw largesse from the Fed¬
And how it would help to learn that sub¬
stantial blocks of both
parties had reached a determination
to stand with the President in this matter to
relations appeared on the surface at least to
But of course most of this was but
be rather strained.
artificially created for the purpose of making campaign
issues. What is more, these differences were not greater
than those which often separated the President and many
of the members of his own party in the Senate and the
even
de¬
offer the
reduce the spending of the Federal
Government, and do
expected
homebuilding during
coming
particularly
that
proved that the President had made up his mind to do all
years
further
new
the
presently it
may not have the practical consequences
which it would otherwise have. It is true that during the
more
.Thursday, November 15,1956
prni^tinn
in
Apprais¬
ing Homebuilding Trends and
Prospects?
The
answer
to
ization has
parvpo
a
for
question is
modern¬
and
great deal of signififuture of homebuild¬
ing industry.
Most
tice
almost
homes.
new
is
story.
precise
to
No
To
tell
one
a
discussions
entirely
on
follow this prac¬
verv
reallv
size of the
new
(2)
The nationwide programs of
(Amerm^n
Council
to
Improve Our Neighborhoods) and
OHI (OD°rat;jon Home Improve¬
"f'x-up"
the
mar¬
ket, but everywhere there is evi¬
keep
tion
work
good
but
also
repair
to
prevent
slums an'*
ing
allied
the
spread
of
undesirable liv¬
(3)
recently
The
terms
of
home
repair
loans
FHA
will
Title
and
liberalized
covering
modernization
I
enable_.projects
up
to
that it is huge. As a per¬
$3,500 to be financed over a pe¬
opinion, I would say that riod of five years in contrast to
for every dollar now
being spent previous limits of $2,500 and a
for
new
homebuilding there is three year maturity.
While the
funds still have to come from pri¬
vate
banking
nels, the
attractive
and related
gages and at times has some added
appeal because of the personal
homebuilding use. Re¬ customer relationships involved.
ports from other budding mate1The expansion ill "fix-up" work
rials companies similarly reveal should go a long way toward off¬
new
•
building
ofQadilv,
w^b new
residential
up
competing
non
-
to
expand
residential, build¬
continues
ing has receded to a more "nor¬
mal"
Another
level.
good
—
y°s,
another record—year for over-ail
is in prospect for 1957.
But the coming vear, and several
more
ahead will witness impor¬
building
tant
changes
taken
into
which
account
should
be
appraising
in
the building industry
outlook.
expect¬
The principal reason for
chan¬
interest Jreturn is more
than on regular mort¬
tr-^sition
a
is moving
I-?
homebuilding:
moderately but
conditions.
dence
for
entering
in
sonal
nearly another dollar being spent
to improve existing residences. In
our
company,
sales of building
materials meluding flooring prod¬
ucts for "fix-up" work are cur¬
rently estimated to be larger than
is
dustry
period: Shortages are ren^iy dis¬
appearing; repair and modernisa¬
pub¬
communities
Others
and
At this point, let me s"™marize
the n°ed to
and
rpracePn
Be
the evidence that the building in¬
ment V will draw substantial
to
Now.
TnvPc*ors
Should Wateh?
lic-attention
incomplete
knows
Can
WMcb
im¬
to
their present homes.
prove
jrgr
.
make
expenditures
and
homes
homebuilding
concentrate
tbem„Jto
cause
plans
ACTION
this
clear—repair
very
will,
ing far-reaching changes is
a
new
"era"
of sollinq
that
is getting
underway following the prolonged
"era" of shortages.
Moreover, it
seems
fairly certain that much
easier credit will not be readily
available
to
cover
any
further
Volume 184
,
Number 5586.-.-.The Commercial
and Financial Chronicle
£
lincreases
building.
in the cost of
Hence, the building in¬
dustry faces a fundamental chal¬
lenge to find and
introduce
of
giving
the
-
new
public
better values.
•
.
Much, of course, already has
been accomplished
during the past
decade in
bringing new products
and greater
efficiency into build-
Irf' ""derway across
^Xtensive research
the
particularly
.p
.
;;
-
"For
offer
It
seems
the
•
-
Housing Needed
a
fIr^rif0W :Wl11 beof those
strikinSly
most
must
tive basis.
and
ress
products
Obviously, the greatest
afford
tain-
and
for
effective
reputation
a
value
channels
and
existing
means
for
of
cut; and U. S. A. must increase taxes;
quality,
service.
Now
cf
and
Treasuries
to
time.
be
be
rovv
made
'The
Third,
the
what
the
funds
will
be expedited
tive
means
into
by
rities.
make
the
gain
home
increasing
pro
Fourth,
by
will
repair
be
builders
fix-up
age
buy
Many
with
more
horizon
will take
view
of
batch
About
one,
talk
is
wit.i
as
be
may
2%%
specialists.
For,
the
far
-than
care
through in many previous build¬
ing restrictions.
But,
I
don't
misunderstand
what
a
of
am
saying. I'm not predicting
upheaval in the bu lding in¬
•to-put
rently
larly
saying
is
escapable
expected
as
building.
that
and
to
What I
changes
that
occur
they
more
are
can
It
is
new
or
the
not
higher
a
December
Refunding
to be the
seems
by
thinking of not
along
3%%
or
certificate would
a
Financial
11
until it is too late.
amendments
needs of the Treasury have
of snort-term borrowings, there is
been
money
rate
will
be
raised
more
market
the
by
as
to
powers
which
on
its refunding issues than is
cur¬
being talked about.
being
are
because
•
rate
Tax
Switches Difficult
of
the
although it is
made,
thinness
of
the
not
market
and
an
easy
the
tiling
lack
to
do
of
buying
interest in Government obligations. Switches continue to be made,
according tcrreports, pretty much in a similar maturity range, even
though tnere are instances reported in which maturities are being
shortened.
Means
to
on
and it is
ness
in
are also indications that state pension funds have been
not'too large amounts of the longest Government bonds
believed that they will continue to be buyers
securities.
tnese
There
are
also
opinions
market that Government agency accounts might
between
ahd
now
..
the
end
of
the
in
on
the
weak¬
money
be in the picture
year.
i / .il
then, those who now
pensions, life insurance,
benefits
social
Switches are also
Not
Bonds
declined
our
(the
from
106
own
2V2S)
to
in¬
private trust accounts.
selected
issues of corporate and tax-exempt securities by
The better yields
non-Government securities is still
rather
limitejJ
j&terest
a
very
which
are
important
in Treasury bonds.
available
reason
in
for the
power
.uTb?
banks
insurance
and
com¬
They
premiums
ceive
deposits and
"phoney" money, but
savings
will
increase,
adopting
with
life
investments.
tell
can
employees.
estate
and
some
Cer¬
modities,
such
sources, may for
com¬
as
President
and
continue?
this
other
who
person,
in
what
their
wages,
pen¬
For
same
happen
every
if
now
stocks.
all
per¬
to sell in¬
stead of to buy?
Finally, let
k
remind readers
of plant, book value
me
and various other statistics do not
determine
the
the
value
of
stock
a
which you receive
you want the cash.
Ulti¬
mately,
the
price of
a
stock
or
price
when
depends upon the earnings. Infla¬
tion
increases
tions
well
as
and
costs
corpora¬
individuals
President
governments.
Eisenhower's
for
for
as
re-election
cannot
prevent dividends from being cut
Reduced dividends mean that the
S. must increase taxes.
u.
Blyth Opens Branch
PALO ALTO, Calif.—The open¬
ing of
interested
be
ad¬
buys stocks some
equally wise, must
should decide
sons
Eisenhower
Cost of Living
should
this
now
fellinS these
What would
will not prevent it.
Readers
whether
good.
For the past ten
the prices of stocks have
advancing, but how long
will
in
get
the
Only
is
person
most
to
such
other
and
insurance,
future
re¬
compan.es
automation
fewer
real
but
insurance
and
history is urging
put into stocks
be
instead of into savings banks
standard
they will
"phoney" money.
with
out
Wages
Stocks?
Y- Stock Exchange for
time in
the first
that the cost
The
only
.
About
What
91.
panies need not suffer.
pay
so¬
aged, and
be severely
large
investors
Already
Government
re¬
can
only
suffer.
Blyth & Co., Inc., office
a
the Town and Country Village
was
announced
by Charles
in
r'
lars
Blyth, President of the nationwide
investment banking and securities
underwriting firm. "The new Palo
Alto office," Mr. Blyth said, "be¬
be
comes our
sions, social security, and bank
deposits and insurance will b^y.
We should forget all about dol¬
and think only of what can
purchased in terms of food,
rent, clothing, education, enter¬
tainment, etc. I definitely lorecast that the cost of living will
gradually
increase
during
the
next four years of the Republican
The
promise of new highways,
slum clearance, and other wortny
projects' will all
expected. When
cost
more
than
23rd office in the United
States
and, together with our of¬
fice in San Jose, which was estab¬
lished
in
better
kets
1943, will enable
serve
which
most
Administration.
the
to
area
is growing into one of the
important investment
Northern
in
Mr.
us
Peninsula
Blyth
mar¬
California."
also
announced
the
appointment of Bruce E. Van Al-
styne and Samuel C. Register, as
you go under a
§teel bridge on one of these sales representative in Palo Alto.
highways, remember
that Both men were formerly associ¬
ated with the San Jose Office of
from 1946, when the Employment
Act became law, to the present
Blyth & Co., Inc.
'
time, the price of steel has just
about doubled.
Certainly the au¬
Ronald D. Kelly Opens
tomobile
industry and most of
(Special to The Financial Chronicle)
the increase in all plant capacity
MONTEREY
PARK, * Calif. —
depend on steel.
Steel and re¬
Ronald D. Kelly hps opened of¬
lated industries employ
80% of
fices at 337 East Floral .Drive to
our
mass
production workers.
engage in a securities business.
new
new
The
Statistics
expenditures which
de¬
will
continue,
but
expenditures
lor
products bought on installments
may suffer.
Here are some more
figures to think over! Since 1939
pend
government
On
Government
creased
being made out of Government obligations
including
nuclear
and
Action."
been
the
for
security
hurt.
the
Liinited Interest in Treasury Liens
automation,
will become great industries. All
readers will be greatly interested
vice
Readers
Until
ceive
Interesting
There
taking
that
electronics
years
This
What
The
Conjectured
bank
living is no higher than
today. Nevertheless, I fore¬
is
cast
now
be
substantial balance of the
money
it
,
not
Inven¬
or
of
demanding that tins Am
be amended.
I, however, cannot
imagine President Eisenhower and
the
new
Congress making such
Oct.
tain
owned
are
cost
that
on
believed that corporations,
coupon
into
rapidly
3y4%
discount
am
be
a
means
1
just ahead.
Tnin:s
just
happen that fast, particu¬
in an industry which is as
far-flung
on
government
officials—deserve thanks that the
of
banxs
There is evidence of an.increase in the amount of tax switches
dustry
don't
has
of the issues in the package is concerned.
maturity would probably come a shorter
anticipation issue due about June 22, 1957,
tax
by
^
an
Government
that be belore the refinancing of the Dec. 1 maturity of certificates
is undertaken. If this should be the case, the Treasury will have
economic
noted,
for example,
that
suburbanization
has
been
responsible for a major break¬
and
Chronicle"
have
passing amount of comment in the
a
whether
and
be
the
as one
Although the
taken
are
should
an
v
Increase in Discount Rate
,
pressures
for
change
mounting so vigorously in this
industry
that
more
and
more
changes are certain to come.
It
at
the
finance
social
which
bills
financing brings
money
two-thirds of these certificates
that
certificates.
the
place in the points
people in all-
and
' "**
new
not
the
in
e
of
large holders
maturing certificates, would not be interested in an issue
that wculd run longer than June 1957, the tax period.
A June
maturity might cost 3V8%.
of
many
officials,
Short-Term Basis
on
which would appear to the owners of
industry—includ¬
manufacturers,- distributors,
code
coming
one-year
a
contractors, laborers, union lead¬
ers,
the
tors
reducing
hand labor.
for
need
ar-
suffer
Aiong
branches of this
ing
in
rate
1
c
an
natural
re¬
a while benefit
from inflation. But the great mass
of honest people will ultimately
There
changes
of
discount
v.''
-
Roger W. Babson
other
will
/
will serve to indicate
the
broad scope of
impending changes'
in the building
industry over the
years
just
ahead.
It
probably
should be added that vast
also
!
the
and-installa¬
machinery
new
in
market specialists
••••'"
another
mentioned, but
these
the
tne
of
Sxru !°»rle R- Harris°n s books,
! What Man May Be" and "Atoms
has
"Commercial
cial
buy¬
on
about
On
inventions
new
tion
the cost of liviiig
up' more during
The main reason-' is
gone
ciety,
through
few in the financial district that the Central Banks will
go
with a one-year obligation.
confidence.
be
done
issue.
a
moderniza¬
developments
could
be
this
of
owners
the Federal Reserve Banks and it
to
program which the consumer
can
the
certificates.
by
satisfactory local- "pack¬
more
of
by the Treasury will be the refunding of
slightly more than $9 billion of 2%% certificates which mature
on Dec. 1.
Money market specialists are still of the opinion that a
two-way offering will be made to the holders of tne maturing
The noeds of the
will
be
met
market
Treasury,
concern among money
Possible Terms
generally recognize!
as
offering a larre
profit potential.
the
Treasury, because of the tight
unexpected
and
of
The next, operation
lem -of
disposing of one home wnile
ing another.
tion
Board
that
•
Per^°d.
the
•
is
not
.
^
Assurance So¬
are
effec¬
the
of
man
to
the Treasury calls for the money.
house, idea
attention and
present
offer
mortgages
important contribution
an
appear
The low rate of 2.617% which the current
offering of special
91-day Treasury bills brought was made possible because these
^securities, like the October offering, were made payable through
the crediting of the
Treasury Tax and Loan Account in the com;mercial banks. (Regular Treasury bills last week went at 2.979%.)
f This procedure! postpones the actual payment until the time when
trade-in
owners'
will
raised since last July.
of
The
get
act.
Equitable Life
91-day
assembling mort¬
gages and converting them into
more attractive
investment secu¬
will
of
was
Ray D. Murphy,
Chair¬
Wis 1
average interest rate of 2.627%. This
to about $6,500,000,000 the new cash
The
of
more
Act
vicious
a
June 30, 1957. This short-term issue is the second one
put on the
market by the Treasury for new money
purposes since last month,
when $1,600,000,000 was borrowed through
improvements to keep many more
dwellings up-to-date. The ilow of
investment
not
money conditions, decided
91-day bills in its new money raising
operation. The $1,750,000,000 of new cash which the Government
raised through the sale, according to
estimates, should meet the
over-all money requirements for the current fiscal
year ending
may
will
the
to
"
The
to
along
mortgages
financing
be" offered
Treasury Forced to Borrow
much wider
acceptance and make
possible
is
area
'.
financing bot-
mortgage
factor
a
weeks.
well find official approval.
open-end
does
maturity of 2%% certifi¬
in the money market, but it seems as
though the
pretty well prepared for the securities and terms
easy
win
guaranteed
ment
lows being made from time
raising operation
new.money
will
to
as
graauany be elimi¬
nated. More flexible
interest rates
on
due to
Employr
t i
that
bGforG.
numerous
new
international situation
hand, ti.ere is considerable
industries.
a
result, obsolescence will have*
progressively
greater
impact
upon existing
housing values and
tienecKa
table,
excellent
sd.l
frequently,
gvgf
The eonfused
financial
labor.
well established in
and other
than
defensive, with
has
of
make more inflation- inevi¬
.
the medium of special 91-day
bills, was in line with expectations.
Tie impending refunding of the Dec. 1
a
6Quiti6s
promises
important factor yet in this market.
an
."
the
on
mists
candidates.
...
results had practically no'effect on the Govern- '
market, which continues to be a very quiet affair. The com- 1
petition from higher yielding non-Government securities is keeping
importance.
Modri
changes, virtually absent during
the period of
housing shortage,
will
successful
week's
all.
1946. This
new
assume
the
read
of
cates is
await
Second, style, comfort, and
will
to
promises
The election
prog-
on-site
time
the
ment
savings oth.r
differential between the
factory
is
the
dif-
money
mass of
people from suffering from inflation; dividends will be
Governments
on
"phoney"
discusses:
opines that President Eisenhower will not prevent
honest
By JOHN T. CHIPPENDALE, JR.
important
the
cost
a
Reporter
'
As
£•
distribution
select
a
These
automobile
ar
on
last
increas-
an
acceptance
lines
-
found
analyst
banks and insurance companies receive and pay out; N. Y.
Stock Exchange's campaign urging savings be put into stocks;
and dependence of stock's price upon earnings. Mr. Babson
strong
work;
dangerous
greater
;
be
and repair
new
modernization
business
Well-known
building
selling building "components" in
semi-manufactured
homes;
and
the ability to establish and main¬
Prefabrication will make
maintenance
-•
also between
non-residential
pects
being
First, to
steady gains, but substantial
•
•
and
and
years
fairly safe bet-that
buildings of
ferent from
than
;
1957
By ROGER W. BABSON
balance between residen¬
tial
and
designs and materials which
will
;
in
rea¬
and
the
house and other
job-site.
.
promise
sonable
The Next Four Years
proc¬
beyond.
But, like
almost every other
industry these
days, the most promising pros¬
in
mg extent structures will be
buJt
or
assembled from
complex fabricated "components'
rather than
by the use of a myraid of
small
pieces of materials
erected on the
v.
great
changes in products,
and erection metnods;
esses,
investors,-; all this simply
that building continues to
Our
;
.
foster
is
growth
huilt today.
:
"era"
new
prospects in building, are orsanizing to enter, or step up their ac¬
tivity in this, field.
f
.
flexible policies to meet changes;
extensive
research
programs
to
than
years
a
the
largest' growth in sales and profits will
materials
manuiacturers. Numer¬ come to-those
companies which
ous
business
organizations - rec- have profit-minded
managements;
ognizing
the
promising
...
T
industry,
because
selling and .merchandising
underway.
\ i
•
among
Different
•
efforts
few
next
of
means
-
/.
the
before
ever
still
•
-
during
27
(2091)
from
$40
billion
debt
has
Hornblower Weeks Adds
(Special to The Financial Chronicle)
billion
to
CHICAGO,
111. — Richard
J.
Gough has become connected with
Hornblower & Weeks, 134 South
La
$275
Two With Palmer,
money
billion to
in an increase
supply from $j3
$213 billion and private
debt
risen
to
the
has
around
The
$350
great
from
$125
billion
billion.
surprise
econo¬
Pollacchi
(Special to The Financial Chronicle)
BOSTON,
Balkam
are
to
Salle Street.
in¬
resulting
in
can
money
and
now
Pollacchi
Mass.
associated
&
—
Oliver J.
Vincent J.
Howe, Jr.
with
Palmer,
Co., 84 State Street.
f
£3
The Commercial and Financial
(2092)
Continued
from
local governments. Interest
9
page
determined
are
Providing Necessaiy Funds
For State-Local Projects
to
the
issuing
of the
payment of the principal
municipalities and individuals for
At
the
iocai
thereon.
lendable
the
rr
municipality
statute so provides,
state
voters approve or
reject the issue
such election.
at
After
The
proper
payers), the bonds are advertised
for sale, preferably in some prominent financial paper such as "The
Daily Bond Buyer," published in
exceeded
measured
the
facW
second
"
taxable
interval (around
20 uays lo aiiow for objections on
the
part
of
disgruntled
tax¬
a
has
funds
current reservoir of savings.
value of the
located witmn
compared with
the
by
*
property
municipality
I
as
#
the indebtedness which must be
pa*d
through taxes levied upon
the property of its citizens.
Coupled
Is
with capacity must
l/wmA/l
what is
Knvihinrf
in
be
nirn
PC
in banking circles
termed
which is
from
investors are
to
pay.
During
the
invited to submit sealed bids for
great depression of 1930-33 many
the purchase of the issue. In some
municipalities
with
a
limited
instances, the bonds are sold at capacity but with a strong deterprivate or negotiated sale, but the mination and willingness met their
generallv approved procedure is obligations
without
default.
To
competitive bidding at public sale cemmand the best interest rates,
Bidders usually are given the a state or local
government must
privilege of naming the lowest have a record free from default,
New York
and
City. Investment houses
interested
other
interest
rate which
they deem
ac-
ceptable in the market at the time
the
bonds
offered
are
for
sale,
"willingness" to
as
and
even
the
pay,
entirely
something
"capacity"
months'
few
a
apart
of
payment
delay in
And
from
They
the
end
debt
Why?
of
1955,
state
and
Other
totaled
about
$20,000,000,000.
"
A
Bonds
All
out-
^
^
^
^
^
1.
.
borrowing
neecjs
"state
of
of the
citizens
and
services
voi„me
bonds.
the
mJ^inal
ha^
bonds
fold
issues
new
interest
the
from
The
popularity of
„
delivered
are
and paid
Throughout the above steps, all
cf the legal details must be ap¬
proved by competent attorneys,
specializing
Where
in
municipal law.
does
the
without
fit into the purchase and
municipal bonds. It is he
who alone pr jointly with other
of
the
protection
of
accompanying opinion covering
legality issued by a firm of
competent attorneys.
an
its
The
length of
fluences
investment
banker
sale
bond
issue also in-
an
is
interesting
but
rather
meaningless to look back to 1843, limit of the borrower.
interest
the
debts
all
of
the
states
torted
bonds
debts of only $28,000,000. Believe
it or not, at that time the Federal
Government had a debt of $20.-
come
is
000,000. This figure contrasts with
today's $278,000,000,000.
- •
-
the
creation
of
usually
-Table L illustrates the growth of
state and local debt outstanding
payable
are
ated by acts
rates.
to serve
the acute shortage of and municipal, bonds are banks,
funds, the investor- de- .individuals .with reasonably large
mands
a
higher rate of interest -incomes, trust funds, corporations,
for lending his money for a long'insurance
companies and pension
by
a
of obligation
This type
is not popular with
investors.
Chapter VII
Summarize
We
In
of various legislatures
ted jointly'bv the
is¬
are
building sidewalks for abut¬
it
discussion
our
areas, such as the
state, port of New York Author itv cre_,
ien(iable
Special assess¬
v
t
■
cre¬
are
special
serve
ting property owners.
special
The authorities
revenues.
mu¬
specific purposes, such
These
from
in
sometimes
bonds
ment
authority
an
to
debt restrictions.
sued for
has be¬
bonds.
own
development
special cast of
the (needs
of
special areas and, in some
instances, to avoid constitutional
popular in municipal finance
which issues its
-
which
usually
and
interest rates.
higher
legislatures
as
medium
issuer
the
ities, created by
rates,
Another
of
recent
are
debt
the
against
nicipal finance has been author¬
Because of
payment,
higher in-
carry
for
bonds
Revenue
charged
limit
of
sources
bonds.
command
years because they are, in the
jxain, self-supporting and are r.ot
charged against the general debt
iy4p> tile il£ure was $1,238,000,000.
rev¬
issued
fees to cover the cost
pays
not
0S0nnnnnnf 6 has increased greatly in recent
j
Although during the period 1950-55.
present interest curve is dis-:
The
chief purchasers
of
the
the
which
revenue
bonds,
are
operation and debt service on
of
A
terest
weeks,
for.
user
revenues
for
bonds
enue-producing enterprises. The
indebtedness
services
^
^old and in 1955 $b,y59.UUU.Uim. Jn
when
revenue
pays.
user
obligation
general
enue
Chapter VI: In
full faith and credit
specific municipally-owned rev¬
principal of
the
on
cal subdivisions of those states had
of
as
us
addition to
of operation of
which the bonds
and
derived
^?icair^"^prnnnar" In the year
It
summarize
sewerage
costs
the
a
nearly six .tola over that otiyau, a
,^
Let
the restncted
of payment,
systems
payable from special
are
increased
The
issued
were
of
that of 1940
over
systems,
electric
facility for
and
0f
water
0fwhat is known
ance
1Tentioned earlier
,
we
bond,
source
_
govern-
facilities
the
local
J**®
billions
years,
and,
eVen, swimming pools.
These
funds were obtained by the issu^
urgent
their
and
and
bridges,
systems,
^-..1
-
provide
to
ments
with
because
11.
i»
_
state
many
ferries,
pur-
chasing power of the dollar, but
^0 major portion of it represents
?
recent
bv
f riol1ars
ha;p h '
*ni in tho
o1 d011ars nave Deen spem ln ms
repre^
_
depreciation,in the
1
issued
construction of toll roads,
increase
this
of
^
sen^s
bonds
in
than double
more
the mid-194U's
part
^
Thus,
'
standing debt is
that of
Municipal
Types of
with
involved,
.
have not.
have the special as¬
issued primarily
to pay for sidewalks or other im¬
provements in a strictly local area.
These
bonds
are
payable only
from assessments of the abutting
Finally,
Chapter VI
Legality is the cornerstone -of
municipal credit, and no investor
ever should purchase a municipal
then
period
are proper
communities
the
.
sessment
contrasted
as
does
,
outstanding
etc..
functions
airports,
bridges,
Sometimes they
limited
bonds
not
states.
invariably
a
do
Government
the
they
physical
and, in
approximately three
,
of
of
tax
not
their
pality. The
are
printed
fields
and have redounded to the benefit
states
whereby
Federal
totaled $232,000,000 and the politi-
lowest interest cost to the munici-
a
broadens
the
wjse
the
at
ing
munity
.
come.
bonds
purpose of
revenue-producing tunnel,
its
activities
into the
created for the
ex-
income
Usually these
offering to
the
offer
and
exempt because
are
The issue is awarded to the bidder
buy
bonds
Federal
of the doctrine of reciprocal im-
$24,191,000,000 at the end of 1950,
interest
one
often can blight pi othergood record
for years to
coupon
taxes.
length
Buys Municipal Bonds
$44,267,000,000
affecting
the
emption
the borrowing
issue, and
Who
the
If the charter of the
locality,
Municipal
,
safety,' marketability
of
November 15, 1956
Thursday,
..
tax the Federal Government and
the
interest
funds.
rates
cost
Chapter V
is extremely "tight," which means
that the demands of corporations,
and
the
habits of the issuer.
for the improvement and
levy of taxes to provide for
pay
by
in general, the credit of
money
Chronicle-.
seen
was
results of someone s_ productivl
productive
of'New labor. y C •;:
"
States
.
■■
family
example
is the Hampton-'Roads unit was traced from ItSv Prirniinvestment bankers submits bids
Sanitation
l^S ^SinSskm' tive -*tate to- k densely populated
sold bv the'various mun?cioaht^f
^ «" a ^ funds (See Table H). These buywhichprovide seweri urban community, We have seen.
The^nves^m^nt^b^ker Hsks his perl?d* Municipal bonds usually er;S have found that municipal age treatment for 2 the ; entire that-thistgrowth created a heed ,
own^capital inthe transaction and
— ^ m,s?rf11f^<repay:
bonds offer safety (second only to Hampton Roads area, embracihg iof services which cost money.,
how
£UD^l^nents that capital with
in anmf installments); Most United States Government Bonds), the cities of Norf " ~
"
--■ — these
loans irom commerc aI nanus in
from commercial tonissues run from one to 2(1 years marketability and tax exemption. fo,k.
loans
Newoort
I
services are v provided, especially wlth the first installment
and
York
Jersev.i
New
The development of the
Another
vi^inia?
order to
provide the funds to pay
the municipality for the issue and
lo
finance
any
portion
of
the
bonds left on his hands after the
initial
iiiai
onerine
onering
offering
The
buying
investment
the
10
to
10
department
banking
bid
the
carrying
interest
rate
market
inai
that
the
of
ap¬
lowest
After
Atier
awarded
bidder,
are
enters
a
possible
commensurate
the
the
me
issue
with
prevailing
bonds
ponds
the
to
then
at
have
nave
successful
is
turned
the selling department of
the investment banking house and
to
over
offered
the
to
investors,
throughout
nation.
bond
important function of
the investment banker is the
buy¬
ing and selling of portions of the
in
what
is
known
off
paid
is
and
20
an-
jt Well may be asked why the
obligations of state and local gov-
the
year
last
ernments
and
and
tn
to
io
fpw
a
a
as
the
secondary market. These blocks of
innff
as
4n
a,
•
•
rr
u-
u
Hnrtrinp
50
50
jo
u
frequently
their
city
tn,
nr
too much
or
interest
nronPrtv
will
find
Federal
banker
,
,hJanni9,
fnnHc
investment
una
„afl
sale
'
^hroiugli tbie purchase
of
municipal
bonds,
places
these funds in the hands
of state and local governments for
needed capital improvements.
Investment
are
retained
it
owes
pHiv
of
3V2%
to
L
find
and
increase
sumes
h«.
the
rate
should
4%
$20,000,000.
offer
local
'•civic
its
it
bankers
frequently
/
indebtedness
This
illustration
sizeable increase
no
value
of
tion
power
lo
to
pre¬
in
•
the
resources
and
is
and
vest0rs Service, of New York
indebtedness
The
York.
Bonds
rated
"AAA"
a
matter
power
mid-
purchasers
of
borrowers
of
all
been
life
state
accused
cf
of
perpetuating the
the
body by the rather
device
of
continuously
instance,
adding to the original project.
authority
an
County
1953
1951
$6,3^3
$9,600
$7,824
$6,874
-ij-rr-—
3,740
2,710
15,973
14.587
860
____
■
-
15)53
$11,198
City
801
2,454.
,2.018
13,558
12,659
656
~
619
.91
1.875
11,721
•
Finally,
general°obhgation^ wereGoutlined.
4,712
3,806
3,257
4,125
$44,267
$38,931
$33,782
$30,101
$27,040
$24,191
States
are
sold
provements
for
of
capital
are
held
under
and
are
deem
the market.
for
personal trusts
Commercial banks
The
_____
sale
the
pur¬
Savings Banks.
Insurance/companies __i
Other.corporations _i_Lu:
consistent
with
Miscellaneous; investors
the
%
39.7
and
lowest
Investment banker?
Governmental"
35.9
37.7
-42.7
32.2
32.8
32.1
29.1
1.3
1.2
0.4
0.5
0.6
9.9
10.8
9.3
7.8
5.4
2.2
22
the
;
2.1:
1.9
-
v-.*
1.9
1951
19451
a
mefft
-*
•••;
bankers
financial
also
advisers
to
serve
state
as
and
A1
1
^Savings
and loan
more
and
sewerage
'
functioning of that special
is a modern miracle
daring, of ingenuity
adaptation , of understanding
and
cooperation. About 1,000 firms
banks in New York, Chicago
40.5
and
other
30.4
23.4
189
the
nucleus
6.7
2.4
; 2.4-
,
; 2.4
2.4
,15.1
-
17.4
20.6
100 0 r1000
100.0
-
assoeiatlons, pension funds, dealers and brokers, etc;"
financial
of
centers
form
organization
and distributes
the
1.8
0.6
:
to
necessary
so
played by this depart¬
stated in "Municipal
43.9
2.4-
^SOURCE: Annual Report of Secretary of the Treasuty,
highways and other tan¬
41.4
2,4
-
.^:\22j)
and
and
:
that: underwrites
9.7
municipal
bonds./Many
branch
offices augment its effectiveness.
Every' important, point i.-iru the
United States and Canada thus; is
2.7
2.7
.
.
agericiesif
r
were
benefits
the
water
assets
skill
%
%
.•
<
in
form
the
1943
1945
1947
%
%■-
bonds, risking their
12.9
1 5.2
16.1
;.v. Federal, state & local
own
capital. They resell these 1
v* V.
.
llAndc 4
%
fA "
* 5- it *? ^
* r
bonds to fliA miKltP and vMoin
the public
main- v V
xoo A. 100 0 100 0
tain secondary markets. Invest-'r- '
.
United
of' the
you
of the
invest¬
ment
banker
rather
than
the
mechanics of his operations. You
see
these benefits every day in
and
1953
%
Individuals, partnerships
must
public
at
which
II
1954
or
elections
citizens
at.
bid
cost
chasers
bid
action,
sold
sealed
interest
council
proper
r
i
activities of the municipal
of
TABLE
talk
department
im¬
permanent
a
the
__
felt
I
as
interested
"The
B«nds
_
entire
Bonds," a recent booklet written
by
George Wanders, Editor
of
"The Bond Buyer":
3,166
Total
this
industry
banking
The part
2,710
3,403
IV;
talk
pntirp
fhic
purposely have omitted the technjcal details of the municipal segment
0f
the
great
investment
ment is well
339
4,577
Chanter
municipal
of
types
g IT
1,707
10.903
-
411
5.923
quality, higher.
considered who buys
municipal bonds and why.
then
modern civilization.
$5,361
.
5,310
summarize
;
are
banker.
investment
the
We
gible
^
5,857
us
bonds
these
modern
1950
7,259
Let
bond
;
'
followed by an
was
how
and
of
:
j
outline
issued
sold with the dispensable aid
This
of
"
plants, well-paved streets, impres¬
sive and useful public buildings,
^____
Township
carry
15)54
For
originally
I
(000,000 omitted)
1955
>
has been
authorities have
autonomy
District
lesser
bonds
money
such
School
-
types. At the present, time,
stances,
abused and many
mo'e
the
since
-
•;
Throughout
Authorities enjoy a high degree
autonomy which, when prop-
the
has
issues.
.
Special District
of
ability of savings balanced against
wealth of Pennsylvania relief.
capital improve¬
of
ments which are financed by
school
proper
the lowest interest costs and those
-
on
the
authorities — sometimes f^nmmnneven by
frnm
aPPr°Priat;°ns fr°m the Common-
of
vote approval of the issue.
as
and
unnrnnriqf innc
simple
State
and those with $1,000,000 or more
bonds outstanding are also rated
by Standard & Poor's, of New
the
in the-
erly used, means a freedom from
political interference. In a few in¬
doubled
,
nav.
in
lease between the issu¬
a
body
TABLE
tity,
issues
the
iJnrnvin'pH
is provided
whieh
municipal bonds embrace
institutions, individuals, trust
conservative
community
•,
i
ing
many
ailthnrjtv hnnds
f
terms of
summarize Chapter V: Mu
than
particu-
1
federa^
is the
t
funds, corporations and pension
in
upon
After
of
us
nicipal
circies
board
demands
states,
to tax indeed
1910's.
community
nature.
supply and demand in the money
markets* which reflects tne.availT
the.avail:
the
sovereign
constituT
the
and
municipal bonds
is
.-determined primarily by the cost
•of money in general. This, in turn,
depends upon the age-old law of
..
can
is a
state's
a
rnent for which
the
destroy.
Let
the
school
paid
of
ing
frowned
The rate of interest Which must
fee
ot
♦
flated borrowing is termed strain¬
by
-
"
been
Pennsylvania,
In
f cpunn1
state^s'^t^mTst'be remembered
iS
remembered
attempt
prior to the sale
issue of bonds. Many others
financial assistance to their
service.
nor
that the United States
between
property
within the municipality. Such in¬
consultants
an
Government
of
has
to evade the debt
means
thp
nf
obligations
a
often
field
the
in
others;
larly, there have been
Federal Government tax the obli-
$2,000,000, undoubt-
say
u
will
w
edly
municipalities in
the capacity of financial advisers
and
nhlieatinnc
o
,
inH
and
immn
£,e^a! ^0vernrnen.t aor\?an },.e
A
Bonds of municipalities which
Linn
hi
f '/fi ! ♦" have issues outstanding in excess
n?ovidi fnndc fnt nthn^n
cf $600,000 are rated bv statistical
Thn<f itl thJ^w^t^,?+UKPOteS' organizations such as Mqody's In.
and
as
tion.
county which can borrow
gations and nronertv of the var I
of
in
at Q c/_ in tV-io mirronl kv-iov»lriof urU8"^ OIiS cinu property OI luO VSl 1
3%
the current market when
or
^ni?^1'ni^1^n11iroe^GnU.a^ChaSfd-Kby
„p
flnri
Property
fina
soaring.
costs
rppinrnrai
nf
and
authority
restrictions
as
these United States cannot tax the
+
m.mi,
is known
used
u
iT
mty whereby the Various states of
Municipalities which borrow too
.nuontiv
The
are
evolves from what
years.
t\/t
Warwick
exempt from
all
present Federal income taxes. This
after
years
years
taxable
Another
issue
one
term
house
firm
iirm
conditions
time.
ume.
been
me
the
and
i
of
nually^ thereafter until
praises the credit before bids
submitted
end
?atG °# lssue* +or?| to 30
of payment 25 (ex,e"
ouonc
puonc.
public.
me
ine
payable
the
at
23.T.: ;covered./
f • • J "All the financing - that
.'
lOQ.ChV tips department is/for the
V V welfare, a
'•
^bankers
and
-
;
public
fact-which brings id the
high sense of
responsibility.",.
a
-•
falls>to
dignity
Volume 184
Number 5588.
Continued
from first
.
The Commercial and Financial Chroniele
.
(2093)
29
interested in imRroyipg their other enterprises improved equip- have been changing ip such a way
living by raising the rate- of dis- ment that they cannot afford to be * as to make the economy as a
covery.
It is now possible to esti-'without.
Thus industry's" 'grow-' whole less and less prone to move1
.are.
page
.
v
; mate
the «costs hf
doing research' ing capacity. to make discoveries in a cyclical fashion.- Some of the
is also raising its' capacity' to Tit-- 'changes are the restrlt of •• dellb-1
witli sufficient. Accuracy and also
i
'
li
•
'
-
"k'fWf
•
Ltfprt
;WWII
;
:MMVVft:
:v'*
Everyone,- of
each
and
year
raiser-productivity
technological ad-,
we
make
some
yances. What has been overlooked
is that the capacity to do; these
things has been growing — that
the capacity of the economy to
is
grow
getting
Indeed, there is
year.
that
dence
at
lift recent
f
capacity to
ing
greater
i
every
some
evi-
years
our.
has been increasincreasing rate, but I
into that point,
grow
an
do not intend to go
-
During most of human history,
technology was almost static and
output
worker changed little
per
to judge the chances of success crease the demand for goods.
"AB
'VJiVM lf%¥N*AHKli:
"■'v
knows that
course,
ft
Illiail SPriiritlPC i with sufficient'
•*.
.
L;
the -size of the capital
goods industries, which produee
the equipment required by changcreases
technology; it increases the
number of research laboratories
in private industry and the numing
century to century. Only in
of
very
slow changes in
technology can the low per capita
output
late-
as
eighteenth
the
P brings into existence financial
During the latter part of the
eighteenth century or early in the
nineteenth
back
When
up.
hundred
a
productivity
century
began to pick
or
one
goes
hundred and
a
_
fifty
years,
tion
are
the figures on producfar from adequate, but
they indicate that during the first
half
the
of
output
nineteenth
worker
per
creased by as
century
have in-
may
much
as
1%
a year.
In the latter half of the nineteenth
century, the growth of production
to about 2%, and it continued
roughly that rate well into the
rose
at
venUng
kind of financial arcangements needed to finance
growth under various conditions
There can be
century be explained.
twentieth century. In recent years
so
e->or
'
'
Industry's: ability*to
raise the
one' can
make m o r
less: demand for goods is also being
rational decisions -concerning how: .-raised by rising .per .capita inmuch to spend on research.
.'
comes and
rising family incomes
The industry of discovery is one The increase
in family incomes
of the most raJpidiy expanding in- - has been, particularly rapid. Thus,
dustries in the economy, and it'-between 1952 and 1956, a period
geems
destined
to
grow
rapidly in which there was little change
lor some years to come because its in the level of prices, the propor*
-
.
-
.
ber of research firms that under- size toda
is limited
not by the
take research work on contract; number
of
problems
that
are
it fosters the development of all worth
studying but by the supnly
manner, of collateral- institutions- ^ skilled
personnel
The industry
that facilitate growth, such as apempioys more thap 'tw0 and a hallpiopriate
developments
in
the times as
many research scientists
capital markets and new forms of and engineers
today as it emsecurities and new loan arranage- ?pi0yed 15 years ago, and it would
*■? 1° poet special problems. empioy ntany more if it could get
from
terms
that';
accuracy
doubt that the
no
tion of families with incomes of
$5,000 or more increased from
21% to 35%. The rapid gain in
family incomes has been made
possible in large part by the increases in multiple-worker fami—
lies- Between 1952 and 1955 the
proportion of married women (not
widowed or divorced) in the labor
them. It will be much larger 10 ^orce
increased from 26.7% to
years from now than it is tozlay— 29.3%.
Back in 1940 it was 16.7%
undoubtediy mucb more than half
Rising per capita and family
again
large
as
Since
the
incomes
*
is
economy
the
increase
to
the
number
of persons
..
vomctinn
naiir
+V,
nC
^
>.
'
..
.
.
.
i
..
hue
an
liim'ODao-
in
not-
nnni
n
.
.
the
rate
to have been well
seems
2%—-though there is some
above
evidence
that
in
12
last
the
months temporary conditions ifiay
have retarded gains in
productiv¬
ity.
•;
■
Whence
this
comes'
—ability
produce
capital goods
of various types;
ability to finance capital expenditures; and, finally, business exability to
who
ecutives
in
are
habit
the
regarding the world as
of
changing
a
place and who have learned to do
a
certain type of thinking — to
think in terms of long-run
development of technology, markets,
and
conditions.
other
Responsibility
Causal
Of
various
the
the
for
causes
growing
capacity
to
increase productivity, two impress
particularly interesting and
important. One is the rise in outas
put
capita, which in itself is
cause for further inThe other
per
important
an
in productivity.
creases
of technological
expansion which in
themeslves add to the capacity of
is
the
processes
change
the
in
crease
'
and
to make further in-
economy
How
productivity.
does
capita
make
gains
a
rise
in
output per
possible still further
in
productivity?
In
the
gives the populabetter opportunity to
main because it
tion
a
It does this in large
part by bringing education within
reach of a larger part of the population. As per capita output rises,
a
larger and larger proportion of
acquire skills.
1
the
population can afford to go
to high school or college. For example,
the
number of persons
graduating from colleges and universities each year is about five
times
as
large relative to total
population as it was in 1900.
How does
the process of in-
productivity
creasing
further
the
raise
still
capacity of the econ-
to raise productivity? In two
principal ways. In the first place,
it stimulates the growth of the
kind of skills, resources, and insti-
omy
tutions which
-
the
growth of productivity requires. - The process of
increasine
into
productivity
existence-
scientists
and
large
parts
the
of
en¬
brings
staffs
engineers;1
•
it
-
of
in-
tween
the
the
creased
Vested
Interests
in
Technological Change
But
the
and
i
per
first
half
first
number
Creates
of
in
1955
and
But
the
work
in-
1956.
persons
3.8%
the
of
half
of
the
at
same
hours
average
period.
worked
week changer very little.
The
of raising pro-
process
ductivity does much
^upPly the economy
more than
more adun-
spectacular
f.
,
,
,
„
.
a"d t o finst ha!If of b r
.^Jii ^
of
the
con-
cAradit industry has been
hased. Although consumer credit
1S not new, .only within the last
?Pnei~a
P
business discoverec.
the broad
scale on which
it
is
feasible
nochange ir, output per manhour ^
,,
growth
aum®r
loans.
dantly with the resources, skills, yaa£
and institutions required to pro- L
duce changes in productivity. The
to
the
upon
rate
at
technology changes and
which
the
upon
rate at which industry buys
k*e m getting labor efficiency.
The
a
result
consumption
has
industry
„ew
been
vir-
with
biUion in 1929 to nearly $40 billion today. Large organizations
of men skiJled in making per-
The
III.
expansion of the
consumer
credit industry means a great gain
in
the capacity of the economy
community
busi¬
(in part
development
of
the
flexible
at
and
falls
with
incomes;,
unem¬
ployment
compensation; and the'
gradual acceptance of the idea of!
compensatory government spend¬
ing. But these planned efforts to
limit
the
business
cycle
are
con¬
siderably less important than de-;
velopments that have not been
originated for the
of
purpose
af¬
fecting the business cycle. Indeed,,
them
of
some
planned at all.
these
have
What
not
are
been
some
of
changes?
Changes Taking
Place
(1) The increase in the number
of
important industries.
Among
the industries that have come into
existence
that
or
have
grown'
greatly
in importance during the
last
or
20
30
years
the
are
air-;
plane
industry, commercial a via-;
tion, the natural gas industry, the
plastics industry, the various parts
of
the
electronics
industry, the.'
industry, the chemical
aluminum
industry, the road building in-;
austry, the air conditioning indus¬
try, the frozen foods industry, and
various industries making durable
goods.
consumer
An
increase
industries
effects
in
tends
of
the
number
to
dampen
favorable or
any
favorable
developments
economy
because
ments
in
affect
degrees
times.
the
develop¬
different
different
ferent
un¬
upon
such
of
the
industries
and
dif¬
at
The
point is well
illustrated by the effects of in¬
ventory adjustments. From time
to time
industries
some
make mistakes in
kets
and
tories
to
become
relative
of
economy
efforts
to
be
may
entire
a
their
too
to
large
sales.
an
such
mistakes
disturbing to
The larger
economy.
the
less
too
the
seriously
economy be disturbed
or
mar¬
or
few industries,
number of industries in the
omy,
bound
inven¬
In
correct
quite
are
judging
allow
to
the
the
econ¬
will
the
(stimulated
depressed)
some
ratio
by the efforts of
industries to restore the best
between
inventories
and
sales.
last
For
year,
example,
when
during
the
the
automobile
industry made the mistake of ac¬
cumulating too large inventories
then went through the pain¬
ful process of reducing
them, the
and
The
Growing Capacity of the
plant and equipment. These enterEconomy to Increase the
prises do not let the rate of techto increase the demand for goods.
effects on the economy were re¬
Demand for Goods
nological change occur at whatIt
means
that
expenditures
on
markably small.
ever rate independent engineers
Although the economy has been consumption are less dependent
(2) The growing importance of
and scientists happen to make raising productivity quite rapidly, than ever before upon the size
discoveries, and they do not let the at least until this last year, it has of personal incomes and, to a long-term planning in business
rate at which equipment is pur- been raising the demand for goods growing extent, are dependent management. The art of manage¬
chased depend upon the rate at even more rapidly and it has been upon a combination of the size of ment has developed enormously,
^
^
which users of eauipment see fit
to purchase it. The firms whose
markets depend upon the rate of
technological change and the expansion of industry attempt to
accelerate the rate of discovery by
hiring scientists and engineers to
make discoveries and by offering
users of equipment new machines
that they must buy in order-to
remain competitive.
All
this
of
mental
is
change
a
very
the
in
funda-
nature
of
During most of the
history of the world, the rate of
technological change was pretty
our
economy.
steadily gaining in its capacity to
increase the demand for foods,
The steadily growing capacity of
the economy to increase the demand for goods has also been
pretty generally overlooked.
Imdeed, a few economists have even
gone so far as to argue that the
is threatened with
chronic deficiency of demand,
economy
The
growing
economy
capacity
of
a
the
to raise the demand for
comes
in
large
part
from
its growing capacity to make tech-
resources
nological changes and rising per
capita incomes. In addition, increases in
family incomes have
discoveries
raised the capacity of the econ-
The
of discovery into which
flowed
long
as
could be made at
than
rate that
more
paid
them.
we
as
a
the
cost
of
making
Today in the United States
have
growing
large
a
new
rapidly
that may
and
industry
approoriately be called the industrv of discovery.
Its product is
knowledge.
The industry consists
0f the various laboratories and
ganizations that denend
covery
for
their
living
ability of individuals to
borrow.
omy
to
raise' the
demand
for
been
Economy
Outgrowing
is
Business
the
Cycle
Growing capacity to make technological discoveries makes it lessr
necessary for enterprises to take
as
thev
find
them
the
a
staff
The
work
long-term
for
growth
principal
of staff work,
development in
has been
trends
the
and
study of
prospects
raw
materials,
technology,
people believe that the (and markets. All of this has led
to the development of long-term
cycle is simply an ex¬
for
the
enterprise
as
a
pression of man's inability to see plans
whole.
the
future
accurately
or
corn;
Many
.
.
,
A
.
.
.
,
,
,
P
tb"
"J™
°"s;"e;st ncyc';,
™ '
wor;id t <Jxtord in 190Z me com
°*
a
and
improves the ability of enterprises
to operate upon markets by offer-
or-
ing consumers goods that they are
upon
dis-
and
that
ready to buy even at the cost of
going into ■ debt and by offering
-®"ous
will
produce
often physically necessary to com¬
cycles in individual industries, but
somewnat^ special economic con-
bitions and institutions are needed
to Pr°duce rather general iiuctuations
recent
in
years,
stitutions
in
production.
conditions
the
less sensitive to short-run
n
depress on
the Unlted granted.1
btates was more
for
mistakes
The
execution
of
long-term
plans is not unaffected by shortrun
ups and downs in business,
but the development of long-term
plans
makes
business
spending
changes
general business. Many types
equipment must be ordered
two or three years in advance, and
once
nroiects
are
started, it is
taken
Human
goods.
markets
during the last 50 years and it is
still rapidly developing.
One of
the important developments has
and
IV.
ly' s.° ,bat *t 1S bound to be
the same conditions that have Wlth us. indenmteiy. Even mauy
been raising the ability of the economists snare tne view tnat
economy to increase production—
m"st ®Jyhs*
goods
economic
accident.
an
and
business
calculus did not apply to it. There
was no such thing as an industry
much
personal incomes and the willingness
During
and in¬
United
'
States
in
of
plete them
The
state
up
of
to a certain point.
affairs
that
describing is not totally
long-range
planning
I
'am
new,
but
has
grown
greatly in importance—as the Mc-*
Graw-Hill surveys on the irivest-
1 Erik
ness
Lundber*
(editor).
T^e
Cycle in the Post-War World,
Busi¬
p.
xv.
*
a.
.
credit
policy; daws to
strengthen the banking system; aJ,
tax system which makes a
large
part of tax liability depend upon
income, so that tax liability rises
small
sunier credit expanding from $7.6
comes.
new
least)
to
make
a '.b o+
second way in which it raises the th;at the estimaltes of the G. Oas £oraj consumption loans has been
capacity of the economy to in- National Product give by the De- budt
and
busjness
js
con_
crease productivity is by creating partment 01 Commerce 101 J9ob s^an^y studying the possibility of
large vested interests in further are substantially too small. On the usjng credit to promote the sale
technological changes and in fur- other hand, t e rather pooi rccord Gf new kjnds of goods and servther expansion. It brings into ot corporate proms during the -ceg jg-ever bas ^be country been
existence an increasing number iast year suggests that many man- SQ weu piepared as now to help
of enterprises that depend for their
agements have been having trou- peopie spend more than their inmarkets
economy's
me
normal
as
growing
technological
make
to
regard innovations and exp»n-
sion
vironment.
capacity to increase productivity?
The capacity to increase produc¬
tivity requires certain types of
skills, resources, and institutions
discoveries;
.
the
Of
the fluctuations of
These-include
of
capacity
tor goods in several ways. As per
United States is far better pre- wbo p0ssess the skills required to caP^a incomes and family inP,fr
p Unance growth,, today rajse Proiuctivity, and since it is ?°,mes increase, tne proportion of
^an p was a century ago. The aJS0 increasing the other resources lnc?n?P sPent on necessities drops
P^.^.P3} 0£ tne equipment trust needed to raise productivity, one
proportion spent to suit
certificate has been extended to must expect a continuation of the
whims,of the individual rises.
Pew vapeties of equipment, tne slow rise in the rate of productivus' ai? 1,lciease in pet capita
term note has been developed; the ity increase that has been going
tends to niake consumpless
stereotyped
lease has been developed with on for at least two centuries. Ip- flexible. The result is and more
n
a
big rise
c9n?lderable imagination: as a de- deed, it is not unreasonable,to ex in the
rewards for successful in¬
Vice for meeting the capital needs- Pect that the long-term trend line
novations.
New
and
improved
a, ,wldt va
y
enterprises. win Sobn be about 3% per man- products stand a better chance of
finally' the Procf.ss of §r°wtb af_ hour per year.- Perhaps this point getting a share of the consumers'
fects the operation of business bas already been passed; But I dollars.
Hence, the incentive to
management itself. ^t ®timu:Iates should add that the figures for the attempt to create products that
the °r?
za,
0 staffs that plan iast year seem to show a temoo- will win favor with consumers
g[owth~and tbat are avadabJ® t(? rary halt in the rise in profuctiv- is increased.
plan f"1-; 1"rth.fr growth. Most ity. The Department of Commerce
Rising per capita and family
!?p?I:tantv. °A,a11' ^ changes the estimates that the Gross National
thinking habits of top executives Product, after correction for price *ncon?ef. are in large measure the
and -leads them more and more changes, increased about 4% be- foundation upon which the recent
to
addine
limit
ness.
economy to raise the demand
steadily
efforts
erate
to
Continued
on
page 30
30
The Commercial and Financial
(2094)
Continued
from
ing,
29
page
limiting
the contraction in
again, beginning in
1955 through
the third quarter of 1956, a period
of
12
months,
the
two
series
moved in opposite directions. This
time
outlays on producers' du¬
rable goods were rising, and ex¬
penditures on durable consumer
business.
Still
the fourth quarter of
Basic Trends in the Economy
And Effect Upon Securities
ment
enterprises
plans
of
clearly show.
V
(3)
so
The
changed in
that reduce
ways
contractions associated
moderate
or
with
recessions.
the
mild
A consid¬
erable number of
companies (par¬
ticularly stronger companies) are
making wage contracts for several
years that call for a wage increase
each
In
year.
the
of weak
case
companies,
such
agreements
could be quite deflationary in pe¬
riods of recession, especially seri¬
ous
since they would
standing of the
the case of strong
recession,
weaken the credit
In
company.
companies, however,
term
either
At
these
long-
agreements
wage
are
stimulating or stabilizing.
rate, they tend to sustain
any
abnormalities
in first quarter
wage-payment system
American
industry
is being
of
probably
dicating
ments
dividend disburse¬
adequately covered by
adjustments.
State and
not
seasonal
local
expenditures for goods and
services have not had a quarter-
since early in
1953, and have had only two quar¬
ter-to-quarter drops in the last
12
years.
Government
transfer
payments have had a number of
drops after the war, due to pay¬
ments to veterans, but there has
been only one quarter-to-quarter
drop in the last four years and
only two since the beginning of
1951. Payments to farme r s may
drop
to-quarter
introduce
quarter-to-quarter
some
drops in employment and, in
case
of stronger
companies,
they do this without forcing cuts
in other kinds of spending.
Of
course, to the extent that unions
the
penditures
opposite change in ex¬
on the other class.
I
simply pointing out that our
economy has loosened up to such
am
extent that various important
forms of outlays (including these
an
two) frequently
directions
for
that
and
these
have
ments
general
g o v e r n ment
transfer payments, but in general
these payments must be regarded
as
rising
steadily
a
series.
the
extension
of
long-term
agreements
calling
for
annual
increases upon weak com¬
panies, recessions will be aggra¬
wage
vated.
(4)
unstabil-
an
izing fashion, aggravating the
downs
and
cently
of
business,
begun to behave
bilizing
In
way.
the
ups
has
in
re¬
sta¬
a
old
days,
Price
Boom
and
omy
of important
example
course,
of
this
behavior,
-
following
was
1929.
of
The
banking system has been greatly
strengthened
by
amendments
to
the
banking act in 1935 and by
acquisition by the banks of
enormous
quantities of govern¬
the
ment
securities
The banks
so
in
during the war.
now strong enough
are
that they can be counted
upon,
most instances, to try hard to
expand
their
periods
of
This
the
earning
business
change
banks
is
in
in
assets
contraction.
the
behavior
of
great contribution
a
to economic stability.
The effect of these
various
in¬
fluences
that
are
reducing the
cyclical movements of industry is
to reduce cyclical movements still
further
(1) partly by virtually
eliminating the tendency for some
kinds of income spending to
drop,
and (2) partly by
loosening the
economy and creating a tendency
opposite directions is
by the movements of
nine principal forms of ex¬
the
penditures
For
the
there
was
dependently
effect
of
ments
of
each
these
is, of
other.
opposite
course,
in¬
The
-
move¬
stabilizing.
Areas of Stability
Among the economic series that
have shown a strong tendency to
grow
steadily
tures
expenditures of
services, business
payments, dividend pay¬
transfer
ments,
are
for
consumers
state
for
and
local
expendi¬
drop
a
in
in
the
1949
Gross
Throughout
June
below
the
ter-to-quarter drop six of the nine
principal forms of expenditure
increased.
were
the
each
on
Twice
in
1953
there
quarter-to-quarter drops in
National Product, but
Gross
nine
occasion
three, out of the
principal kinds of spending
payment
series, through
through
changes
small one, has also gone
70
quarter-to-quarter
without
a
payments,
seasonal
single drop.
after
factors,
six drops in 70
Dividend
correction
have
had
year
the
only
quarter-to-quarter
changes, and four of these
between
for
There
is
first
quarter
of
the
and the second quarter,
in¬
is not
bright. The changes in technology
that
raise
porductivity
require
or
by
responsi¬
been
outside
going
on
of
for
agriculture.
40
over
The index of the prices of com¬
strong
tendency for prices to
In
ward.
the
28
creep
up¬
month-to-month
changes that have occurred since
June, 1954, this index has moved
Increase
to-quarter changes beginning with
There are three reasons
the fourth quarter of 1954), one
why a
or two of the principal
forms of slow rise in prices is likely in the
long-run.
One
Is
the
spending was
dropping. In the;
growing
last
nine
has
been
months, when demand' capacity of
the
pressing hard on the crease
of
durable
three
im¬
which
spending
(on
The
industry,
forms
of
consumer
goods,
non-
farm residential
construction, and
inventories) have been dropping.
Two important forms of
spend¬
ing have recently moved in oppo¬
site
directions
sions.
They
consumer
producers'
for
on
crucial
occa¬
outlays on durable
goods and outlays on
are
durable
goods.
Thus,
nine-month
period
the r third
quarter of 1949
the
from
I
expenditures
durable goods were
penditures
goods
on
was
limiting
dropping,
The
durable
on
a
the
producers':
consumers'
rising.
were
on
ex¬
rise
in
major influence in
contraction of busi¬
in 1949.
Again in 1954, from the second
of
12
months),
producers'
dropping,
sumers'
durable
goods
outlays
on
but
durable
2 These
expenditures
goods
were
on
were
con¬
ris-
nine
principal
forms of ex¬
outlays for (1) durable
consumer
goods;
(2)
non-durable
con¬
sumer
goods;
(3)
consumer
services;
penditures
are
(4)
residential
other
non-farm
construction;
construction;
(6)
producers'
equipment; (7) inventories; (8)
and services by the Federal Gov¬
durable
goods
ernment;
state
and
and
local
(9)
goods and
governments.
services
by
have
second
.
for /
already
is
to
economy
demand
the
in¬
goods
discussed.
that
prospect
the labor expenditure required to
obtain given additional
quantities
of
is
the
upon
pressure
industry.
the unions in a
strong bargaindng**position. Hence,
the
ratq^pf technologi¬
be expected
may
The
t^ put
metals
will
for
petroleum
and
increase enormously
present
is the
levels.
The
bargaining
third
power
of
trade unions.
It is
basic
a
V
policy of the United
to
pros¬
that
pect
this
policy
will
be
Figures on trade union
membership show an almost un¬
changed.
broken
year-to-year gain for the
last 23
years,
and a slow
and
somewhat interrupted rise in the
ratio of trade union
membership
to
the
force.
ful
If the
in
mand
non-agricultural
economy
maintaining
a
for goods and
of
a
employment, the
likely to succeed in
is
labor
success¬
strong
de¬
high level
unions
are
pushing up
wages and fringe benefits a little
faster than gains in the produc¬
tivity
of
labor.
Already
unions
have
made
two
three
years
or
contracts
for
not
contradiction
a
to:
more
and the
competitive
more
has
been disputed by some economists,
noted thdt in many in¬
dustries
large part of production
three or four
a
and sale? is made by
huge
concerns,
apd who have
thait. concentration
concluded
makes
this
for
corppetition.
But
conclusion
is'^ftot true
proposition
general
There
sons
ing
less
as
ing
a
rea¬
why the economy is becom¬
competitive. One is that
competition between the old and
the new is becoming more intense
because people are becoming more
more
and
more
with
stocks
adequately
of
goods.
volume of durable
per
doubled
constant
between
The>more
goods
in
expressed
purchasing
considerably
power,
supplied
Thus, the
consumer
when
person,
dollars < of
than
more
1900
tends
a
and
1949.3
adequately peonle
to
become
matter of I
and
more
adjusted
are
improving quality/
bility
out
Every enterprise is
to
that
its
product
a
greater
a
before
with
rivals
extent
the
possi¬
bring
may
which
there
consumers
own product.
Hence,
growing rivalry in at¬
to
make
technological
is
The
a
-I
v
competition
new
come
from
cause
one
another
mav
even
industry
the
in
be¬
basic
trends
itself.
technological progress is to
industry with an ever¬
growing variety of materials,
and
is
far
products.
Thus,
inter-oroduct
more
inter-service competition
day than there
years
even
was
The
ago.
only
20
to¬
or
30
protection
against competition from new and
better products and methods is to
improve
one's
one's
methods
product
own
faster
than
and
one's
rivals improve their products and
methods.
Thus; the competition
created
tends
technological
by
to
become
change
keener
and
keener.
to
do
The enterprises best able
research tend to
be large
This is
concerns.
concentration
large
one
of
concerns
reason
industry
often
why
into
intensifies
competition rather than weakens
Saving
D.
20.
in
the
Goldsmith, A
United
States,
Basie
Since
through
which
have
sible
Study of
Vol. Ill,
de¬
big topic
a
at¬
your
few of the
a
in
ways
which
are
candidates
the
both
on
exaggerated
which
have
I
call
important.
>
we
have
just
come
a
political campaign in
the
for
'both
the
is
ills
the
to
respon¬
the
and
let
economy,
that
you
sides
extent
government
prosperity of the
me
increasing
dependence of the economy upon
technology reduces its dependence
upon
public policies.
Of course,
public policies will always be im¬
portant, and, in addition, the mere
size
the
of
of
many
government
its
economic
makes
decisions
momentous.
Nevertheless,
the
growing ability of scientists and
engineers
to
create
investment
opportunities, improves the capac¬
ity of industry to go ahead more
less
or
undisturbed
the
by
ordi-.
nary sort of
political changes.
:
The technological trends that I
have described plus the gains in
productivity,
are gradually elimi¬
nating the so-called proletariat—
the class of propertyless workers
who possess no skill. Back in 1910
one out of four workers was un¬
skilled;
today
the
proportion
one
out of 11.
modern business methods
Modern
is
technology
are
rapidly increasing the number of
in
the
skilled crafts, the
occupations, the
technicians,
and
semi-technical
the professional and administra¬
tive workers of all classes. Rising
per/capita
have the
and
same
family incomes
effect, because they
increase the demand for the serv¬
ices
of
skilled workers and of
professional peonle.
These
changes in the composition of the
labor force
ing
social
are
having far-reach¬
and
Increased
political
Diversity
effects.4
and
Size
*
The trends that I have described
have increased the best size of
,
.
business
enterprise.
They
are
making it important in many in¬
dustries
that
concerns
enough to afford
of
of
competition
a
be
large
certain amount
research.
Rapid technological
change and the growing intensity
also
make
it
im¬
portant to reduce the risks of busi¬
ness
by
product
adding
lines.
diversity
The
to
needs
the
for
larger size and for greater diver¬
sity are being met in considerable
measure
by mergers.
The coun¬
try undoubtedly needs /nany more
mergers than it is getting, par¬
ticularly
and
among
concerns
of
small enterprises
medium
do not assert that all
size.
I
mergers are
wisely and properly planned, and
do
not
companies
W.
to
important
many
I
it.
3 Raymond
the
that
wish
I
these trends
of
supply
to
Economy
tention, however, to
of the principal effects
processes," and
of
scribed. That would be
white collar
ever
long-run
I shall not discuss in a
compre¬
hensive fashion the significance of
persons
by the growing capacity
industry to improve products
than
the
VII.
of
threatened
in
and
more
Competition is also being ma^e
methods.
costs, but it
prices from be¬
Significance
keener
and
than
prevent
remind
three ^principal
are
faster
not
rises in costs.
who have
many
providing for
it
Trends in the
is becoming
competitive,
becoming
will
•!
7
Competitiveness
economy
more
there
States to encourage
employees
form unions, and there is no
But is
up wages.
of the Economy
The
tempts
As thev succeed,
con¬
larger tomorrow.
The
V:y-: V7.
changes. '
demand
accounts
world's
argue that competition is
VL:<;
Growing
world
turing industries.
which
the
These rewards will be
rising
Thus, the more rapid
technological change,
of
prefer to its
'the
even
all
as
in the immense
are
market
of
prizes
been
the existing resources of
existing plant and equipment
industry.
non-replacebale raw materials
(petroleums and metals) will in¬
Only a small part of the
is industrialized, and the
non-industrialized
countries
are
striving had to build up manufac¬
40%
sumption.
the
This pressure put
the
crease.
durable
consumer
-
the
for
they
as
have
innovation
growing/
more
intense but that prices arelikely to creep upward? Will not
competition prevent prices from
rising? The answer is "No." Com¬
petition will prevent prices from
years,
modities other than farm products
and goods, shows plainly the
successful
huge
•
new
equipment and often new
plants. These must be supplied by
a
(5)
were
possibility
supplied with eoods, the stronger
upward 23 times. It has dropped; is the
competition given by exist¬
stronger tendency only four times since
June, 1954, ing goods to new goods. It hasspending to move and
has
remained
unchanged been found that the bert wav to.
together in periods of vigorous
once.
In all it has risen about.
get people to replace old goods
boom, but even when the quarter7.7% in 28 months.
with
new
is to make
the new
to-quarter increases in Gross Na-\
goods different and better, rather
tional product are very
large (as Account for Long-Run Slow
Price than
in the case of the four
cheaper.
Thus, competition
quarterincreased.
quarter of the year through the
first
quarter of 1955
(a period
transfer
general rise in labor
a
Tha t
for all kinds of
record
a
yielded
skill
.
there
business
incomes
drops in the Gross National Prod¬ will continue. Unless technological
uct, three of the nine principal progress in agriculture exceeds
forms of expenditures
(seasonally technological progress elsewhere,
adjusted) increased, in two of the farm prices will eventually rise
quarter-to-quarter drops five of until incomes in agriculture are
the nine principal forms of ex¬ brought closer to incomes outside
penditures increased, and in quar¬ of agriculture.
V-/,-
broken
The
farm
Hence, the net movement of peo¬
ple out of agriculture, which has
words,
increases.
But
7%
of
ness
quarter
1954.
over
kinds
single quarter-to-quarter drop in
expenditures on services. In other
un¬
by
bility
outlays
an
obscured
or
goods
quarter-to-
of
work of similar
quarterly basis to the beginning
1939, giving us a record of 70
quarter-to-quarter
changes.
In
that period there has not been a
been
preventing
costs?
rising
prices cannot be expected to drop
at this rate indefinitely because
incomes
in
agriculture are far
a
70
slowly
history
•
American
'
three
expanding. In one
four quarter-to-quarter
these
since
of
of
That
principal
the
that
chance
for
Rising
the downward movement of farm
reason
has
Slowly
prices which have fallen
over
for
good
a
and
when
sumers
not
productivity wlUhrise as fast as
wages and fringe benefits, thereby
nature of competition is changing.
The notion that the economy is
through the first quarter of 1950,
and
transfer
on
both
general
v
tendency
payments.
expenditures of con¬
services goes back on
goods and services,
government
The series
there
^
;
capacity to raise the
our
greater
limit
and
been
developers of- successful
products, such as bubble gum, •>
world's
Since
the time.
price level. The full extent of this
has
the
productivity of labor is growing,
rate
to
a
by
new
Level
produce
is
being
by ' the- growing re¬
successful innovation.
The-1 bigger
the
-market,
the
greater are the rewards achieved
frozen orange juice, fish
sticks, in¬
stant
coffee, home
permanents,
and; whatnot.
Never
in
the
the
decline
of
were
capacity
quite
beginning
quarter
Product.
of
portant
down
or
quarters
period
more
occasions.2
first
National
this
various
on
four
with
to
up
to
illustrated
for different parts of the
economy
move
series
in
move
of
contraction. The most conspicuous
economic
to
competition
fpr
level will also have to
The economy has been develop-'
tend
Finally,
wards
of
ing attitudes and institutions that
loosening up of the econ¬
with the resulting tendency
contractions
by en¬
gaging in a competitive pursuit
for
liquidity during periods of
Opposing
The
spending
business
Recession
Movements
banks aggravated the more severe
of
price
.
The banking system, which
formerly behaved in
the
rise most
cal change, the faster trade unions
a
;
stimulated
.
move¬
Institutions
of
Produce
to
be
slow increase in labor costs per
of output.
If that happens,
the faster
Growth
to
more
produc¬
made in that
in
unit
the
V.
The
will
gains
period. : Hence, the outlook is for
a
of
expansions of business.
Tend
that
all
likely
months
opposite
tended
tivity
12
to
contractions
absorb
in opposite
move
six
fluctuations into
the
force
boom.
am not asserting that a rise
or fall in
expenditures on one of
these
classes of goods
tend to
payroll disbursements in the face
Of
the
71
cause
than
is
goods were falling, limiting
intensity of the
increases
wage
Chronicle..;. Thursday, November 15, 1956
condone
for
the
the
buying
purpose
of
of
4 See my article "The Growth of Mod¬
eration," Atlantic Monthly, October, 1956.
Volume 184
Number 5586
The Commercial arid Financial Chronicle
...
(2095)
1
milking them.
It is important to
however, that there
remember,
sound
are
most
are
oc¬
The Department of Jus¬
to
seems
be
in
sad
a
from
Hlk
1
y'm
for
reasons
the mergers that
cf
curring.
tice
economic
Continued
10
page
•
In the Next Ten Years?
petition and what kind weaken it.
In fact, the Department of Justice
enlarges the
does net
tion.
to be clear whether
the purpose of the anti-trust laws
is to give consumers the benefit
of
stiff
competition
to
or
protect
small
enterprises
against
the
vigorous competition of more ef¬
ficient rivals.
The
effect
\
of
trends
that
is of greatest interest to the
pres¬
ent audience is
probably their net
effect upon the relative attractive¬
the
trends
(the
Four of
growing capacity
the
of
economy to increase productivitv and to increase
demand,
its
diminishing susceptibility to
cycles, and the prospect
business
that
the long-run movement of
prices, will
be
unward)
make
stocks bnore
attractive relative
to
bonds.
growing
of
The
intensity
competition tends to make bonds
attractive relative to stocks.
more
The
net effect
to
recent and
cur¬
rent
trends, however,
has un¬
doubtedly been to raise the attrac¬
tiveness
of
stocks
relative
to
bonds.
The market, it is true, has
rather slow in catching on
been
to the changed relative attractive¬
of stocks and
ness
lion.
bonds, but
con¬
siderable progress has been made
in the last several years. At any
day
than they
more
sense
made three
to¬
years
ago.
by
All in
be
regarded
billion.
w
favorable—they help improve the
The one exception, of
course,
is the creeping rise in
prices. It would, of course, be nice
if prices would not rise, but the
dire
predictions that one reads
every now
and then about the
consequences of a slow inflation
strike
me
as
ridiculous, particu¬
larly when the inflation is initi¬
ated by a rise in labor costs to
which commodity prices more or
less sluggishly adjust themselves.
In
this imperfect world we are,
often
compelled to choose be¬
tween evils, and if the choice is
between
enough unemployment
to halt the rise in labor costs,
di¬
prices,
creeping inflation, let us by
rect controls of wages and
flation.
creeoing
the
have
means
in¬
It is the least of the three
evils.
Form
Securities
with
Corp. has been formed
Central
offices at 727 South
Expressway to engage in a secu¬
Officers
rities business.
Campbell,
President;
S.
R.
are
H.
Gordon
Babbitt, Secretary and Treasurer.
—
Pacific In¬
Inc., has been
Brokers,
formed with offices in the Joshua
Green
son
is
Building.
a
Walter C. John¬
principal of the firm.
meet
the
take
the
in
opened
have
under
a
office
Beach Hotel
the management of Robert
Hollywood
Fraiman.
Branch
Interstate Sees.
KNOXVILLE, Tenn.—Interstate
Securities Corporation has opened
a
office
branch
National
the
in
Bank
direction
Hamilton
the
Building
under
Thomas
of
M.
Callaway.
senger
have
N.
BUFFALO,
Co.,
Incorporated
branch
office
in
Y.—Quinby
has
the
Buildin^
of Charles K.
opened
our
tell
us
snail
we
?..HvPwo
ait will cost.
return
briefly
now
to
'
Ar*
Morgan
Toledo,
and
Peoria
&
in-
recommended
,
.
.
^
,
dead^onomies have no
rates; only poorly perrateS.^The
interest
inrate
[s proceeding so vigorousiy that it must be restrained to
pansjon
prevent inflation.
The third possibility would be
a complete collapse of the United
money
supply.
We did
such
a
collapse no fewer
six
measures
the health
strength in the rate of
technologicafNjdvance.
The
extremely
ible
future>
t
„
reflected
the
deadening of incentives for enterprise, and, as importantly, the
consequences
,of
gold
"f'fh
devaluation
or
increasing
dollar
im-
mensely -the^ jpntire credit base.
Devaluation x Ultimately
enlarged
our basic gold* reserve from $4 to
$24 billion. Despite the fact commercial
ments
bank
require-
reserve
s
were,d.bubled,
redundant
sells
at
good
a
serve
our
1933.
years
But
we
"discernible fu-
of
prospect
all
the
bank
Hqujdjtv
-yye
anxious
to continue
education.
economic
our
objective, of
is to strengthen the struc-
course,
of
ture
will prevent that,
Americans are
thoughtful
Our
the
American
economy,
induce from capitalism
and
free
under private
way
prise
in
enter-
the economic growth
all
we
seek.'
Let
me
Tr>r.
finish
C.
with
Quotation
a
that
is
price.
Reserve Board.
"Of
the
Federal
He said,
recently:
industrial
of
the
all
Balderston,
Canbv
great
nations, the one that clings most
tenaciously to private capitalism
has come closest to the soca s c
present monetary re- goal of providing abundance fo
the next 10
in
P
vL
demapd
for
™ w? contained
rvmct
must be
rfrmrmnpri
because
ratio
have
high
J-J#
least
50%
other
sides
coun~
have
what
wnai
is
it*was
«
was
Broadwav N . Y .
tfroaaway,
City
y
oeieciea
branch
a
in
the
Building
Tucson
under
the
Two With Lloyd Arnold
(Special to the Financial chronicle)
-m7WT?T
oeBe-
v
BEVERLY
that,. an? .most fortunately, Lupino
Pita
CahL—Rita
r^iif
tttt t q
HILLS
le ni
liquidity is highest m the have .loined the staff of Llovd
agricultural West, where, histori- Arnold & Co., 404 North Camden
cally, most „Qf our commercial- Drive. Mr. Pleener was previously
and
Lawrence
bank
thatkihagver'"som^imes'^d'To^thl
total collapse, of the United
"
more?than
monly
nrfmnr-t
n
50%
liquid,'
nrnhohltr
ro+in
centers, where
are
much
BEVERLY
tor
ciifton
Calif.—Vic-
HILLS,
and
Francis J.
3
Leffer
-'ii.
l«.
havP become affiliated with Bache
&
Co
445
North
Possible
Not
Upsets Will
Occur
Now whPt could happen to
the picture?
by its former receiver and later
first President, Mr. L. C.
Sprague. Despite the good showing made by his administration,
he was unseated in 1954 by a dissident stockholder group headed
by Mr. B. W. Heineman who resigned the Chairmanship of the
Minneapolis & St. Louis earlier
this year to take on the more
challenging problem
of cleaning
the Chicago & North Western
situation. It is interesting to note
that the records of the Sprague
administration have not since been
improved upon as to either the
up
of
the
the
or
Minneapolis
and it will be
earnings
&
St.
Louis
interesting to await
the results of the rather sweeping
management
made in
changes
1955. The
that
were
President
new
formerly Vice-President and
was
General Manager of the Chicago
& Eastern Illinois, the new VicePresident of Operations was
formerly
a
intendent of
divisional
the
Great
super-
Northern
and
the
Chief
Engineer
was
formerly Assistant to the Chief
Engineer of the Burlington.
In company with other roads in
the
Northwestern
District,
the
average
has shown an undergain thus far in
revenue
„
.
_
Philip Glanzer
BEVERLY
*
«
protection
dividend
HILLS, Calif.—Emil
J. Iwanskv has been added to the
'
2^?prn& nnint<f rate which has been maintained
ctg°pf^,,
eastern points,
H
the present shares
on
since
the
NeW%0^Central, NE'piate® ditidendTn "julV* 1864 V'ttaIllinois
R.R:
central, Pennsylvania
oBlers
and
points
also
have
peoria
a^
terminal
which
terminus
is
the
of
the
Min-
current
price
of
about
this
23
dividend
produces a yield of approximately 6.1% which is admittedly not easy to justify in
view
of
such
almost
leaders
equal
in
yields
quality
on
and
route from Peoria to the North- growth
as the common stocks of
the Twin Cities. From the Santa Fe and Union Pacific,
west via
the iatter
line extends westward for instance.
a
and
Leola>
g
D
Qne
point
might
Qf
a
courge
many
A
loop
line
running
parallel to most of the main line
to the Twin Cities extends south-
the
ward from Norwood
be
conserva-
among
line
deen
via
on
the Aber-
Moines
Des
to
its
connection with the main line.
In spite of aggressive manage-
tive investors for
is part of what
rail stock that
be figured as
capitalization per mile
Class I roads, and in which
capitalization funded debt is a
can
lowest
minor element. At the
1955 year-
end total funded debt of
$6,984,884
ment the Minneapolis & St. Louis consisted of the $807,955 balance
can scarcely be called a growth 0f
the institutionally-held first
road.
Its
revenue
and
traffic mortgage on the road's general
trends
haye
trailed
those
Qf
th0
]^orthwestern District for the past
_pvpral
vpaT:q althnn(?h thp >pvpnue
the
Qffice
6buiJding
eauipment
$6j&176j929
and
obligations
This
debt
equipment oongations. inis aeot
treyd had f0nowed that of represented only 21.6% of total
District
quite
ci0Sely until capital and surplus including debt
freight
gain
was
revenues
total
in
below
of
the
explained
carriers
in
and
total)
'
the
district.
1.9%
a
(freight
revenues
0f the
959%
much
gain
With
(Spec'al to The Financial Chronicle)
Three
..
Roxbury Drive,
for
diversified.
roads
its
nf!? at th*
thmv!-955 yea%
teri?inal and from the PennsylThis provides ample
vania, New York Central, the Chi- for the $1.40 annual
in
(special to the financial chronicle)
vn_x
resources
more
the
last year. While the Minneapolis capital and amounted to but $23,& St. Louis did show a 2.1% gain 200 per mile on the 1,397 miles
Bache Adds Two
States
money supply*—have originated.
In the West today banks are com-
against
a
ratio
probably more
like 40% in the big Eastern finan-
of
traffic.
ordiicn
management of Donald V. Morris,
our
1929.
the first
begin the change-over, having
been placed in top physical shape
which provides important bridge the preference of
RranrVi
Qprc
oecs.
office
Professional
than
more
in
in
of
one
to
.
Aberdeen
slack.
some
liquidity ratio of
system
banking
twice
iwice
for
'C3we
of-
business from
securities
a
reserve
ratio
was
and almost the same proportion on revenues for which were 10.3%
the average over the past five under those of the 1955 month,
But even so, net income * for the
The Minneapolis & St. Louis first nine months of this year
identifies itself particularly with amounted to $1.91 per share as
Peoria Gateway which is at against $1.72 for the correspondmid-point of the ing 1955 period. As a result, it is
.*
which latter brings being estimated that 1956 fulltraffic from its connection with year earnings may be close to
Santa Fe, Burlington and $2.75 per share as against $2.39 for
yeai's-
neapolis & St. Louis. This road
furnishes a comparatively direct
Opens
Harold B. Bonime is engaging
™
in the
leading*, commercial
the
above
Bonime
commercial
TUCSON, Ariz. — Selected Seprobably at curities Incorporated has opened
Our
reserves
"age received from connections is
of
mostly because of operating efficiency. It has been
fully dieselized since 1950 and it
Peoria & Western at Peoria. Ton- Minneapolis
re-
reserve
increased
we are & very
country^
banks
wiTmn
it
within it.
the Minneapolis & St. Louis,
On the contrary, this stock closed
at 23 Vi on the same day for a
net gain of a quarter of a point
and a half point gain over the
day's opening price. If the examiner's recommendation is accepted, the Minneapolis & St.
Louis will merely retain its status
as one
of the roads benefiting
from interchange with the Toeldo,
movement
prospered
number of operating ratios
a
no
immediate repercussions
the market price of the stock
Southern
Years.
enlarged and
m^dranW tec^nologlcal^ad-
van™
vance
yearly
year,
Minneapolis & St. Louis has
i
f^om
_
the
oO
The
of great importance to the Min- 1956. The gain of only 2.6% for
neapolis & St. Louis, constituting the first nine months was partly
High 55 % °f freight tonnage in 1955 due to the setback in September,
Product
—wh^eh will not increase all in a classless society.
appreciably
on
normal
wheat last
billion
$535
a
National
Vice-Chpirman
ngjonger
60
extends
me
was
money
nothing
redundant
basis of
"switch-
a
the
through 1965) with its excit-
.
a
the
in the discern_
Qne
and
for
Qross
interest
low
the^t930's
of
in
1873 -and
wm nQt haye
the
rates
times
between
way
essentially
and
is
ti0n.
than
forming economies have low
terest
Western
carriers for access to the Peoria
Gateway.
However, this recommendation
saving too.
have
Adeauate
Be
Without Gold Tinkering
.
&
depression cause
might be failure of capital forma-
more
second
States'
'
Will
&
a
ex-
of
they
billion
interest
permit
A
had
M°nev
_
Peoria
to be in prospect, but capital ex-
me
Only
$15 billion to $18 billion
Bu^ as we have seen, not
ordy doeg such a failure not seem
cars
Let
banks
™^nagement
Behringer.
of
by 19 lOrrrwe: propose a high-
the $41
cial
Quinby Branch Opened
the
This wiU exPand spending ing" road used by
and to
Next, the
Hirsch &
—
branch
ICC
an
.
of_ the 81 million Pas~
care
Here
Co.
requirements
improved industrial Plant-
tries.
New Hirsch Branch
HOLLYWOOD, Fla.
industrial
s
plant as tne tastest rate in nistory.
ro
from
year*
and
:Anflerica
ouirements were
In v.
9
surplus
too.
improving
1930's,
SEATTLE, Wash.
vestment
The
The
of
auction
Happily,
Form Pacific
under a Republican Administra- stock of
total tion, inventory liquidation caused Western,
earn-
any thought
of additional .tinkering with gold,
so we must pl^n to operate on the
Campbell Sees.
November
™r
There is
RICHARDSON, Tex.—Campbell
°n
*
at
1949, under a Democratic Admin- amjner recommended the rejection
istration, inventory liquidation 0f tke application of, the Mincaused a mild recession, which neapolis & St. Louis for permission
waf very well handled. In 1954, to acquire the entire outstanding
^rti^^tnn^Rpwff'a
jseyona xnai, we are
as
economy.
and
a
.,
another mild recession which also stead that the Commission grant
in the Federal Government's cash was
WGii- handled, in each the request of the Atchison,
consolidated
budget
this
fiscal £ase
multiplier was reduced Topeka & Santa Fe and the
year will be perhaps three billion *ro™ 14tsnthneor^lca}( vai"e .?*
Pennsylvania R.R. to acquire this
—possibly four billion dollars— ™ Just °-a0* The
multiplier
is stock jointly. The Minneapolis &
giving us a total of prospective
^reverberation of reduced st. Louis had met the joint offer
increases in sources of funds to family
spending caused by the of the Santa Fe and Pennsylvania
finance plant expansion of no less origmal
n03sy, reduction
in of $12,150,000, or $135 per share
than $10 to $11 billion, against an Primary expenditures for
plant, for the 90,000 shares of the Toledo,
increase in plant expenditures for equipment,
houses,
inventoiies Peoria & Western, but the rethe period of "only" $8 or $9 bil- and defense goods. In both 1949 port of the examiner favoring the
lion. Thus the prospect is encour- and 1954 we enlarged family in- joint bid over that of the Minagin? indeed*-Consumers may of ^ome in other ways. But the pros- neapolis & St. Louis is said to
course spend more and save less.
Pect of serious damage through have been inspired by his inw*
niiahf" in
tWmmhiv
inventory liquidation is not great, ability to find evidence on the
niP«pH
th
nrLpnt
nf
especially with personal incomes part of the latter of its means to
off fire
It 1 expanding persistently, at the rate effect the acquisition. The Toledo,
affairs.
We -are
producing at a
$7Y2
all,' the trends that I have
must
perhaps half
corporations.
is
now
interest rates.
described
all
add
billion in increased retained
rate, relative yields of stocks and
bonds make much
this
To
liquidation. In
-
_
By GERALD D. McKEEVER j
Minneapolis & St. Louis
three possibilities.
are
.
All right, then; $4.5 bilion in
savings plus $2.5 billion in added
depreciation equal roughly $7 bil-
■
„
of stocks and bonds.
ness
There
for deprecia¬
reserve
One is inventory
ings
these
Railroad Securities
What's Ahead for Business
state
of confusion with respect to what
kind of mergers strengthen com¬
seem
31
this
was
proportionate
It
has
been
by the road that other
the
movement
district
of
shared
prior
in
years'
of
road
owned.
Excluding
equipment obligations, which
a
lien
on
the
are
the subject equipment
and not on mileage, the net capi-
talization
duced
way
to
per
mile would be
$18,750.
The
right
re-
of
itself is debt-free, since the
$807,955
mortgage
debt
referred
spoil staff of Philip Glanzer, 8549 Wil-^crops out of storage whereas the to above is a lien solely on the
shire Boulevard.
Minneapolis only participated in road s Minneapolis office building.
The Commercial and Financial Chronicle
(2096)
32
thrift
Savings Banks Now
At
difference
innovators
keeping
among
bank
of
officers in line, or at least out
sight.
thoughts
Before I voice my
as a
future mis¬
sion of savings banks, maybe I
should first mention a negative
realist considering the
proposition.
or
between buying
buying an auto¬
freezer
a
a
or
air-
an
conditioner?
A
New
Cause
financial
around the
the average
center
should
welfare
of
Nothing less than to be the
premier service center for the fi¬
nancial needs of Joe Smith—why
cannot that be the core of savings
man.
like to call
special field
generally, I should
your attention to a
consumer
Another
to
credit which has been
area
up
open
do
with
now
the
has
loans
rested
on
Al¬
loans.
the
statute
of last Jan. 1
savings banks
the State held any loans of this
books for years, as
half
than
less
and
coupons
can :
the
not talk¬
stamps.
green
hardly
wait
to
dive to the bottom of their box of
such crispy, crawly
make
to
power
am
mer¬
lotteries and other speculative de¬
vices.
But this is an age of box-
Youngsters
modernization
I
of
corn
their tin-whistles
Even
some
wives,
bless
of
or
us,
them,
flakes
to get
space goggles.
at least our
.
attracted
are
in
by premium coupons and stamps.
banking has no func¬
kind and only three banks out of
tion any longer, some people will
Where is the incentive for my
banking? This mythical fellow-— 129 held as much as $1 million own children
-say to you; it is an anachronism;
to
make
regular
Nor do the reported fig¬
it should be done away with. Have the common man we used to call worth.
weekly deposits in their school
him—is coming up in the world. ures tell the whole story, for some
-*!Ot commercial banks increasingly
savings accounts? I have yet to
•entered the thrift business?
Do What he saves—even though he of this paper is purchased rather see an attempt by a savings in¬
they not, in increasing numbers, should save more—and what he than originated, and someone else stitution
to
turn
this
national
•pay
interest rates approaching borrows, represent respectable actually performs much of the craze, in itself a form of thrift, to
those of savings banks? And sav¬ sums. The fact that savings banks work in serving the public.
Savings
its
ings
traditionally have served the mass
thrift
market, and have no really large
accounts able to claim a first lien
and loan associations, these
-savants assert, are specialists in
whose
ability
superior
is
by the higher interest rates
they pay compared with savings
proven
their
on
affections,
appeal
some
to
should
him.
How
have
then
him best? Let me
outline to you some' ideas for a
Here these fellows stop, with a
Hook
that
says:
whatever your program. I offer it humbly as a
starting point for your discussion
comeback, it better be good!
can
banks.
serve
you
and comments.
Mutuals
Not Deprive
Do
Family Loans
Commercial Banks
Well, for one thing, I would like
to observe that it is absurd to say
First, let me take up the subject
of "family loans," loans to many
of the same people you are proud
function deprives com¬
to have as savings customers. Your
mercial banks of money needed
committee, in its report of Sept. 6,
tor business loans. One could say
discarded the idea of asking the
with as much logic—or as little—
Joint
Legislative Committee
to
that commercial bank acceptance
Revise the Banking Law for con¬
-of
thrift
deposits reduces total
sumer
credit powers.
I wonder
iunds
available
for real estate
if this rejection was not prema¬
loans. The plain fact is that credit
ture. Maybe some members of the
supplied by any segment of the
Committee shared this feeling be¬
banking industry is as much the
that your
lifeblood of business as credit sup¬
that
modern times
the original phi¬
However,
have overtaken
losophy of savings banks is a fact
with which many of you would
But here we are, in 1956,
agree.
with
$20 billion industry in New
a
in
cause
recommendation
to perform the service,
public service, if the Legisla¬
feels it to be necessary and
"willing
as
a
ture
desirable."
Why this hesitation about con¬
credit? You savings bank¬
sumer
industry, I
an
ers
are
on
This is
York State.
their
they stated that savings banks are
plied by the others.
the
submit, which none of us has the
slightest mandate to dissolve. No ingly
field.
model blueprint of an ideal bank¬
ing structure permits us to wipe
mutual
thrift
banking off
the
unique in wanting to stand
sidelines
of
important
this
and
increas¬
lucrative
that;
the
average
today, the family which
should serve, goes through a
number
of cycles
of borrowing
-history of the last 150 years.
savings.
Take
the
typical
This savings banking, this $20 and
young family just getting started,
billion
industry
in
New York
just establishing a home.
State, this institution that millions
.slate, so as to rewrite the
of people
their
financial
know and entrust with
savings, regardless of other
and opportunities, is a
-channels
-force
we
must
much
So
That is
preserve.
to your critics.
answer
my
said,
we
must
grasp
the nettle and ask ourselves: what
is
with
savings
Wrong
With
wrong
banking
today?
What's
Savings
Banking
It is not simply that commercial
bank
and
ciation
vaded
savings and loan
asso¬
growth have deeply in¬
a
province that was for¬
merly almost exclusive to savings
•banking.
-curtain
Time has rung down the
on
a
whole
era
Of Ameri¬
Exit the poor immi¬
grant,
the
thrifty laborer,
the
Jhelpless widow—enter the brick¬
layer at $4 an hour, with union
welfare plan and Social Security
can
history.
part of his way of life. The reason
why savings banks are no longer
being chartered is not just the
passing of large fortunes through
inheritance
is
and
income
taxes.
It
philanthropy has
to. more
pressing needs
simply
■turned
that
than to establish havens for small
-savers.
The
Can
question before us is this:
recreate savings banking
If the an¬
we
in the image of today?
to
family
field
a
develop
you
could
than
more
do
you
have. If certain skills or familiari¬
ties
needed,
are
it
is
the job
own
In my
beneficial ends.
thinking about
new ways
of stimulating savings, I
overlooking the prospect
am
not
of
en¬
of
tirely new savings plans.
progressive management to
see
Savings and loan associations in
that they are acquired.
But the
England, and to some extent in
most important thing is for you
this country, offer both deposits
to make the public well aware of
and shares, at appropriate differ¬
the fact that you
are
ready to
entials in rates.
render
service
through
every
You and I have long been think¬
avenue
the State has opened up
ing about ways of rewarding the
for you.
true
long-term
saver.
The last
Life Insurance
the
as
Com¬
to
but
These proposals lead
brief critical observation
one
a
which I intend to be
con¬
structive.
Wants Proposals Documented
Time
and
again
of
spokesmen
industry have come to me
proposing
changes
in
the
law
your
without much, if anything, in the
way of factual data to back their
suggestions.
changed
But
Executives,
legislators
make
the
easily
as
law
is
not
all that.
as
public
servants,
expected
to
all
are
their decisions
the
on
basis
of all the available
facts, past and
In the Banking Depart¬
present.
ment,
will give your proposals
we
sympathetic
and
sideration, and
tion
of
research
block
have
change,
that
but
your
we-
will
you
The
be
In doing
be making
lot easier not only for
for yourselves.
tion
must
proposals
adequately documented.
so
con¬
inten¬
no
setting up unreasonable
requirements as a road¬
to
suggest
intelligent
we
matters
a
but also
us
history of banking legisla¬
the
United
States, and
in
various individual States
is one of
backing and
as well,
filling be¬
tween
emergencies.
leadership
out
of
time.
in
hands
your
Should
his house is
As
banking
a
on
a
much
fellow
result,
has
been
of
wait
the
until
fire before order¬
talked to you I advocated
ing an extinguisher or taking out
dividends
as
a
practice insurance? Of course not!
Neither
thought
by
saying:
everybody
worthy of adoption in the indus¬ should you wait for an
ought to have life insurance. You
emergency
try.
What I am putting before to occur before
cannot argue with the fact that a
asking for a change
you today, like my earlier pro¬ in your laws or
powers.
certain minimum amount is highly
By that
posals, is not a recommendation, time1 the
initiative
will
have
desirable, at least to meet today's
but only a basis for some new
passed to the Legislature and the
high cost of dying. To provide a
thought
about
modern
savings
banking supervisor. The time to
basic amount is exactly why sav¬
bank functions.
Possibiy savings put your house in order is in
ings bank life insurance was set
banks could devise a plan where¬
peace, not war.
up.
The thought originally was
by
they
could
offer
different
that
the
average
person
would
classes of accounts. Terms might
Branches
purchase a modest amount of life
be long and fixed and withdraw¬
Now then, while in the midst
insurance
over-the-counter
if
it
als subject to prior notice.
of blueprinting a new
was offered to him in convenient
type of sav¬
I am sure many variations could
ings banking, what about adequate
fashion.
be played on
this same theme. branch powers for your mutual
Yet look at the record—savings
But it is not my function to pre¬ institutions?
Today, that means
banking has a long way to go be¬ sent you with a ready-made plan,
easily accessible branches.
fore
its
volume
will make
any
complete in all details. What I am
It would
I
time
can
sort
quickly introduce
of
dent
a
At
next
total
life
is
$5,000,
a
limit
eight
be
trying to do is to put this idea on
open
and
vigorous discussion.
which
banks have not asked
for
I
split
the table because I feel it deserves
present the maximum policy
savings
raise
the
on
my
market.
insurance
amount
.
Remember
is
Here
well
me
-
tops,
though
methods
well
as
mittee itself.
about such. interesting
old
ways
of
tapping
a
home
like
savings through the use of raffles,
open
to you for the better part of
generation. I refer to FHA Title 1
department
I would
for discussion has to
new
different,
Savings
of
that
chandising savings.
ing
Having mentioned family loans
of
First, for a new cause, a cause
to which savings banking can rededicate itself.
As I see it, that
cause
home and, say,
mobile
Crucial Crossroads
a
Is there such
function?"
great
a
New Types
lending is "contrary to your
gage
Continued jrom jirst page
Thursday, November-15, 1956
to
Local
And
Out-of-State
In the matter of
years.
new
Lending
investment
part
position
after
but
on
all,
all
tions.
premature
outline
to
on
my
Department's
branch powers, which,
concerns
other
I
my
will
not
only
you
banking organiza¬
say, however, that
there is merit in the thesis which
for savings banks, the holds
that it is logical for banking
among so many of you? I am sure Banking Department has had ex¬ institutions
to follow
their cus¬
In most cases
this negative attitude is in great tensive experience.
tomers in the suburban movement.
where new powers were granted,
part responsible for the unpre¬
Organization of Savings Banks
possessing results of your industry they were used with circumspec¬
tion and to the benefit of both the
At the same time that it builds in this field. Such an attitude, by
And now, no discussion of the
borrowing
public
and
savings future of
up
savings of various kinds, its management as well as trustees,
savings banking would
Where savings be
stands in sharp contrast with the bank depositors.
borrowings are greater than its
complete without reference to
banks are given the authority to
the organization of savings
savings.
As these people grow need for insurance among middle
banks,
lend outside New York State, they
older and their children grow up, and lower income groups, the bulk
and particularly to the existence
have
continued
loyally to give of
what your critics
however,
this position reverses of your depositors. Here is a great
call "selftheir home community preference.
and they become net savers, mak¬ power, a great field for activity
perpetuating" boards of trustees.
This is as it should be for, like all
ing their savings available for a going uncultivated.
If commercial
bankers
accuse
The savings banks' showing in practical bankers, you follow the
younger generation.
savings banks of having self-per¬
insurance has been influenced, I order of investing bank funds by
Under present conditions this is
petuating boards of trustees, I see
freely admit, by limitations im¬ first acquiring adequate liquid as¬ no reason for
an
excellent
time
for
savings
blushing. The trus¬
sets, then making loans in your
banks to reexamine their role in posed on advertising. Meanwhile,
tee-system of managing savings
I understand that
the insurance own areas and, finally employing
banks has given your
family credit.
Commercial bank
industry a
industry has been critical of you any deposits left over in the best
credit is taut. All lenders are pull¬
proud - record
of
integrity and
for not spending
more
on
pub¬ investments available.
ing in their horns to live within
safety in managing other people's
At the same time, however, I
their means. Borrowers are forced licity. According to this view, you
savings.
The high standards of
are
content to capitalize on the do propose to all banks active in
to make more stops before they
conduct expected of savings bank
acceptance of life insurance cre¬ the out-of-State mortgage field
trustees are written not only on
get the money whitfh they need.
ated through the insurance indus¬ that they establish what I would
And
the statute books but in the State
naturally, many rediscover
try's
efforts
and
borne
at
its call a "local loan department." See
their
Constitution itself.
neighborhood
institution—
financial cost. Let me say that I, to it that this department is kept
you, for example.
Being appointed a trustee of a
for one, am perfectly willing to adequately staffed and amply sup¬
Are you sure you should con¬
see
plied with funds, and let your savings bank has always been a
savings banking
assume
a
tinue to surrender family credit,
greater share in publicizing life local people know that there is high honor. It has called for men
this great field that affects prac¬
of unquestioned
integrity. Social¬
insurance—by telling people about this place where they are wel¬
tically everybody in the State? Do
and
expected whenever ly, it is a distinction.^ Yet at the
policies available at their nearest comed
same time, and without
you have the right to deny your
disparag¬
they need to borrow money on a
savings bank!
neighbors friendly, local home¬
estate mortgage.
I see no conflict between sav¬ real
No doubt ing savings bank trustees in the
town service?
If people cannot
ings bank and other life insur¬ many of you are, in effect, work¬ least, I submit that although this
turn to you in their hour of need,
affords much in the
ance.
In the first place, it will ing along these lines but I suggest leadership
if it is no concern of yours every
take a long time before a majority that a more clear-cut delineation way of necessary trustworthiness
time a family has to borrow to
and conservatism, it need not be
of people will buy even a mini¬ between local and direct lending
pay a doctor bill, or buy a new mum
policy without an agent's and out-of^State investment would lacking in a bent for innovation
and spirited outlook on business.
washing machine, or what-have- urging.
Moreover, as people rise be helpful to you. We have ac¬
It
should
you, is it any surprise if you lack in the economic
be
noted, however,
scale, they need cepted and developed "over-thegrassroots support?
and invariably purchase more in¬ counter" life insurance, let's hot that anyone who is a trustee of
you
Why
this
lack
of
enthusiasm
powers
..
other people's money has a vital
savings banks can lose sight of direct dealing with
interest in the manner in which
With no real mortgage borrowers.
his co-trustees are selected. If his
aU that still remains strong and York State today will t;ell you that conflict existing, you should have
Recently, your industry put be¬
no inhibitions about
going out and fore the Joint Legislative Com¬ companions insist on policies con¬
vital in savings boixKing anil cast you are waist deep in mortgage
.tending wmcxt is nut. ing itaa cat rcany
making
good
with
this mittee a set of proposals for still flicting with his own sense of
off those features that belong to a
extending credit to young families now it the Legislature has assigned wider investment powers which responsibility, he has no choice
Are you going to argue that mort- to
long dead past.
will receive careful study by my but to resign. If there is to be any
you.
swer
is yes.
we
must bring to it
One look at the balance sheet of
any
active savings
bank
in New
surance
or
than
should
provide.
Volume 184
Number 5586 ...The Commercial and Financial
Chronicle
change.in the trustee, system, we
must
make
the
that
sure
responsibility
petence.
iners
have
is
a
which
should
what
exam¬
that
the
vacancies
are
field of inquiry
examinations
they
com¬
our
told
proper
their
on
been
in
manner
filled
business
and
Meanwhile,
part from the mutual form which
has served depositors so
long and
so
faithfully. As the experience
of savings
and loan associations
shows, the mutual form '7nftiS
is
ity a stock's self-propelled price
pyramiding.
First, rumors of an
impending split raises the price;
then after fhi' rise, if there is no
the
then after the
split the "high price" is in turn
The
In fact, mu¬
applied to banking and
insurance has repeatedly shewn
tuality
and
all
gSft?
stability. A
_____
*
.
virtue
'j«
i
of
mutual
t
-
purely business considerations.
•
Federal
Four
years
number
Charters
ago
so
Utilitarian
Tests
rpuch for theory!
a
fhP
us
market price both
mQTlrP+
c
irQlnofinn
If you believe in the dual
system,
I do, there
as
a,m ""e"5£"es,
Public's
stock, resulting
significant price rise.
Ihof
in
a
capriciou
policies.
charters. I submit,
But Federal
are
no
panacea
for any
of a stock dividend) merely
disposing
of
a
portion
of
his
ownership in the business at a
price directly related to the market price. Before the issuance of
rights he had a share of stock
A
with
.
Family Relation—The
S° mueh for the stock split. Let
take
similarly
now
the
of
24%
that
look at
dividend;
splinteringa
Dividends
1
cash
serve
,
often
most
to
and capitalize
This is highly
future
useful
a growth or
otherwise expanding company can
p r 0 f i t a b 1 y use ploughed-back
earnings.
holder
getting.
not
are
alone, by the way,
the savings bank
rethinking
idea
I note in passing that Sweden
temper-
last year changed tts laws
mit
savings banks to accept check-
ins
ing
accounts
accounts
And
my
up
1
so
to
come
discussion.
found
not
to certain
to certain
un
If
the
limits
limits
of
end
ideas have
any
general
agreement
useful
more
savings bank
have
struck
among you.
Yet, I
banking
partisan
the
am
partisan of savings
more than I
am
a
no
any
If you
want, I
intensely parti-
am
in favor of all
larly,
of
three—particuwhen they are
course,
State chartered.
We
have
commercial
seen
welL
I
and
new
Dublie
loudly
.
We
have
seen
and loan
savings
a
associations grow
reach
new
a
and
and
policy.
prosper and
outlook
in
Again
I
applaud
loudly.
What
New
State
would
lapping
And
regarding
at
not
it
—
varied
and
institutions,
also
is
have
each
competing
all—as
an-over-
choice
of
specializing but
intensely
for
pa-
buildings, our
catering to depositors and borrowers,
our
things
more
to
from abroad.
tudes.
down
y
n
n
un§
but
•
in
heritage and
it is
I
icleas
our
a
that
_
•
the
kind of
-l
in spirit
Tnat is our
-
o
-
It
patrimony.
,
while
what
Here
100 shares has merely become
holding represents a diluted share
in the property, and that his taxes
not thereby reduced.
It
to
seems
the
that
me
clear to its
receiving end.
a
split,
such growth decreases to the
pre-
obligation
solit normal growth rate within
three years after the on^ration.
DuPont and American Telephone
only
few
a
the
of
to
this
stockholders
crystal
on
the
*
*
Related
the
to
much
stock right.
offering
.,
,
suffers
the
Ford
Motor
Co.
omnnn
stockholders
in
the
face
the
of
widespread plaints that the $64
prjce would discourage the pubs
appetite.
holder
tional
calculate,
subscribe
to
to
an
offering at
Behavior
Illusion
announc-
I^ikewise an illusion is it that
low-priced siocks act better than
high-priced stocks.
A
study of
ing
the
American
Telephone
Company's epochal offering, coin-
market action during the calendar
tains
year
1955
by
Harold
Clayton
of
cidentalily
^2A%A
by, 22%, the
sitocks by 11 %, the $20^-30
'
^har€s by 1. the $10-20 units
y
by
1.8%.
Industrial
(The
being
Affirmatively, splitting of
a
tbe brokerage commissions
is
.....
Published
of
10
one
shares
new
then
share
for
held.
ing the total number of Rights to
which
.
m
Review, Jan.-Fsb.
thf
„
.
Harvard
1956.
n
.
Business
his
(one
held).
rights
The
that
of
ber 0f NASD's
—
stockholdings entitle
Right for each share
Rights will expire
$100
below
situations
price of
standing shares is 170.
that
thus
the
the
outshare
2
Ralph
were:
E.
Tr.
•
„
Co
East•
0+
^
fLos Angefos
lrom Los Angeles.
They wil1 succeed the following,
Whitney, Jr., Dempsey-Tegeler &
Company,
asset
Chicago Analysts
out
comes
th
D1
^
and
The
out
comes
shareholder
even.
who
each
Where,
as
the
yield
Nov.
the
-r
8
Inlant1*
address
the
of
in
the
Invest-
the
Midland
Adaim
Hotel.
Opens Mansfield Branch
MANSFIELD,
is continued
new
the boon of
held
of
will
meeting
the
Foster Bros., Weber Co.
typically with ATT,
capitalization, the
subscribing shareholder gains
dend
be
Room
situation.
dividend
old
to
of
sub¬
thereby protects him¬
in
Company
v.
/°sep|l
President
luncheon
to Hear
t
1
n
Block,
Steel
Ohio
Foste:-:
—
Bros., Weber & Co., members o£
the New York Stock Exchange,,
increased divi-
have
his equity.
the Richland Trust Building under
an
on
opened
a
branch
office
in
the Management of Ralph O. Wise.
Management's
From
the
Position
,
management's
rinhte nffprinu
[eio]Shareholders
,
,
.
thrnngbont
thp
tniougnout
rise
and is at.tbe
divi-
a
vears-
tne
(Special to The Financial Chronicle)
HOLLYWOOD,
e
! *Se ,w
a
^
b. Hogan, President; Tony Garat,
June
Fla.
are
Planning,
Mr.
Arthur
Hogan is Presi¬
Hogan, Inc.
B.
Bertram Jones Co.
\vith
now
Inc.,
of
—
Bloom, Harold
N. Bowser,
M.
Engel, Pierre B. Nobs
Stuart E. Taber
Hogan*
Jardine, Vice-President ami
Secretary.
Chronicle)
BEACH,
W.
Vice-President; Helen
Vice-President and Treasurer; ami
Planning
(Special to The Financial
Security
nogao
-
se^ Boulevard. Officers are Avthu*
Joins Security
Hy
Hogao
—
ba^ bee»
years,
tively rising needed capital
John
Calif.
llu^YWrVulJ' ^a^.
^ecuri^ies.
time construe-
same
PALM
.
Form Hogan Sees. Corp.
view-,
eomhinpc thn
who have been deprived of
Harvey
Formed in St.
Louis*1
(Special to The Financial Chronicle)
Building.
ST.
r
With
t
»|,
t,
i\y|
Hamilton
Managem t
(Special to The Financial Chronicle)
LINCOLN, Neb.
hart
and
now
with
Ralph
J.
Phillips
are
Management
H.
1
the firm
Haberman
Avenue,
New
&
name
Co., 501
York
City,
members of the New York Stock
Exchange, was changed to Haberman
Bros.
—
Bertram V.
Street
Eighth
firm name of Bertram
Company.
viously
Mr.
Jones
Bankers
with
th<?
under
V. Jones &
was
pre¬
Bond
Ss.
Bayard C. Hoppin
Now Habermin Bros.
Paul
Mo.
Securities Co.
Corporation.
Fifth
LOUIS,
Jones is engagaing in the securi—
ties business from offices at 4Q>
North
Charles Bo-
—
Hamilton
Effective Nov.
market
District Committee
No.
n;nn,.
Co"p °all
Lorp., 311
"discount"
in
price
scribes
on
PER SHARE"
in 1945.
Wight C.'Baum,
Co.;' and
his
The subscriber in "premium
(market
price
above
asset
value) situations escapes dilu¬
(5)
of
see
sub-
offering
dilution
subscriber
tion
date.
'PRICE:
You
stock
new
Nov. 5, 1956 if not used on or hefore
to
even
(4)
An
assignable Warrant is being sent
to each such stockholder, evidenc¬
The
p
issued Rights to pur¬
hereby offered in
ratio
him
stock ln which you are interested
will hurt you in the differential be-
J
Sept. 14, 1956
Frontier, San Fran-
,
value)
•
Commission Expense Differential
.
on
the
at
chase the shares
each
Perioa%
tween
are
record
of
close of business
the
iTeS*
m(!SX
by about 20% during the
u
b
Share)"
Per
-
the
the
(market
today, conpreliminary
(COMMON)"
$100
Stockholders
issues
Average and the
The
WEST
Value
of
No. 2 (California and Nevada).
!?in °"the. transaction.
and
_
Dow-
ordv 2^- W1th the $1-10
declining
Jones
*(Par
Intelligence Of
Commander
McHenry, J. Barth & Co^
Francisco, was elected a mem-
dent
"CAPITAL STOCK
Staff
a
the
Als0 elected to NASD's District-
non-subscribing
shareonly escapes dilution, but enjoys a net overall
(3)
legend:—■*
Hemphill, Noyes & Co., members
of the New York Stock Exchange,
shows that issues pr,iced at $70 and
by an avera§e °I
expiring
following
the
as
for
Commander. He became associated
addi-
position in the
nrosDectus
ficer
Committee
the
aena
the
Thus
„
holder not
.
less than
the existing market price, to protect his investment
service
a
a11 aJso from Los Angeles: Frank
outstanding stock °yer, Jr., Wagenseller & Durst,
is
selling at a "premium," Inc.; Willard G. DeGroot, Batethat is, above its equity value, man, Eichler & Co.; and Lewis
is the
comnanv
Price
a
Where
This instrument usu-
stock
...
equity.
ally
comprises
the
evidenced
JZ
privilege given an existing share-
by
a
(2)
difficult
to
and
his
scribe to
their
of
more
State Bank, both cf
partner in Holton, Fos
ter & Co., Lexington, Ky., prior to
Chicago,
San
of the gen-
summary
exercise
the
^rage growth in shareholders. And
delineate
a
H' buJ.°LitS eQ£ity y1U6' tb!
stockholder
who
does
not
the
and
& ^
g
Merl
self
split
the
U
a
Rights
^^arnples of un-split high-priced stock dividend in
a qreater-t'nan-av- workings, although
Quickly garnered 319,000
is
on
important
entered
b
D
(1) Where the outstanding stock pbRRps Jr Dean Witter & Co"
i<? selling at
J1'
is selling at a "discount" that
discount,
that ^I11U1PS» dr., ^ean witter & CO.,
-,11—
~
^nimps, c> Hjllj Hillj Richards &
uean VVliter
RobErt
*
?I°cks showing
it*
'
with Merrill Lynch
unde^vari^
(6)
Stock
slightly
a
under varl°us alternatives.—
has the
make
realize
eral net effect on the subscribing
stock
company
paving
to
,
110
are
the
,
formerly
was
post-
that
see
.
smaller shares, that income is not
the
Ours is
us.
price of free banking. It is, if
'
will, America at its best.
n
ownership!
ated immediately following
of
That is not for
harder life
you
are
come
institutions,
and position, look
upon
the multi¬
in power
serenely
the
who
Especially impressed
handful
a
secure
%
d
those
all
to what he is really
But unfortunately such
We
to
eight differ-
on
Shareholder Impact
n^n-
misunderstanding is widespread,
He should realize that the stock
0f
offered
been
__
as
dividend
travelers from those countries
where
a
and
convenient for
employees and customers
wondrcus
are
mechanize
to
race
our
make
show
bank
new
alleged
Francisco.
and Foreman
have
able
^as
the part of the receiving stock-
on
growth in the number of shareholders usually becomes acceler-
in
tronage.
Our
the
spreading of ownership, the data
great
ours
standpoint of the public
rich
a
this
of
duplication of services,
or
From the
is
in
community
York
some
it
have
we
OK
eminently
constituted, that if he sells the
dividend for cash his remaining
Ownership Not Accelerated
lie
banking
is
so
j
maturity
average,
level,
•
+•
this
ah
bear in mind the recen* frantic
the
serve
applaud
on
industry.s
months
after the split the
price declined below the pre-split
are
banking expand and take
functions
respective
three
likewise
-
of commercial banking
savings and loan associations,
and
san
fire
10-year
in_
•
.
higher return
f widenT'incJ.L^^w18' rherdthe dividendchanges the printed split,
like the stock form
f lvldend increase was less than merely
system
some
preceding
directly depends on
dlvldfnd P°Ucy. Even midst
P,
among you, I hope that my central
theme—a search for a new and
—will
Dealers.
e s
°th^e »glh m reduc.cisc0- separated World the rank He
s the
during
War II
investment
busmess^but was
with,
ot
con-
dat? ot.'hS beco,ming effective
tb?5?a"efr the continuing market
We
the
The data
originai
®
.
period.
vided there is no misunderstanding
permanent^ price rise.
his
_
maintained.
a
IUuminating[Co
show
earningS.
that a sPljt dofs n0b resuJ£ in any and legitimate when
c nc
a
generally occurs between the time
of tbe rumoring of a stock's split
°c 1^s actual announcement, and
in
Na-
stockholder who chose to dispose Western Sea
split.
paid in stock in¬
are
cash
of
stead
constitutes
instead of
dividend
Cleveland
.
a
less
or
received
amount
from
.
war
sPan show that while a price rise
place.
the
iter
the
ent occasions thus far in the
Stock Dividend
off
a
Research
of part
ATT stockholders
loss of functions to outside
their
Governors
of
t i
right which, together, had
a
Rights
it
to take
of
a
deducted
competitors, without any new revitalizing functions-being brought
up
Merrill Lynch, Pierce, Fenner
& B«ane, has
been elected
to the Board
and
—
covering
a
Calif.—
tional AssociationaL
tion bf Securi-
still
remembering
private study, and a sur¬
vey by C. Austin Barker. Manager
of
PHTi
difficulty of savings banking today. That difficulty as I see
is
FRANCISCO,
Thomas G. Foster, Jr., Sales Mana6er of the San Francisco office
which had a market value of $180.
Immediately after the issuance of
the rights, he had a share of stock
deflation.
and
us
Controlling
Both
•fiBQnPial
its first cousin, the stock
^
supervisory
'
The Dividend, Not Split,
is virtue in
--
(as in the
case
*
'
results
°Peratmg results
banking
institution having access to an¬
other chartering authority. It is a
check on arbitrary or
...
onerahne
fhp
de- mately
mand for the
But both of these assumptions
an
rights he is
of'whai he Seady'own^ * T Fost,
E? fcrS'on' the However, J^amount Reived entered tl
practical ground of our demon-
are completely invalidated by re-
I, too, have been thinking about
Federal charters for savings banks.
1r7
«.
Governor of NASD
SAN
shareholder chooses
shareholder but simply the receipt
nnr?
the
discussed
,
sell his
to
a
market price of approximately He succeeds
same amount. Tbis is simply H a r old P.
"moral" grounds, in that it feeds Pointing up the fact that the value
Schlemmer of
on
the public's misconception of feceiyed
0 a light Schwabacher
its true nature.' But it seems to ^ npt an additional payment to a
& Co., San
SsavfnEs°nbanksFederal CharterS thoritatforitudfo^o^t^^ctual
SaVmgS bankS'
for
°r
...
AAA
phase"ForThe'e^a funtasTs
^ed Z
that
reduced
ffllSPS
Let
your
of
one
publicly
be raised to $220 on the equivalent
business. If
Foster Elected
,
But
as
demonstrated,
pay,
at 170, the commission on a 100share lot, which now is $50 would
,
institutions.
new
both as a seller and a
buyer. For example, in the event
of a 10-for-l split in beleaguered
American Telephone now selling
you
r,eaSOn f,°r tneed£d spllt 1'000 spht shares at 17"
y?10*1 m'url) se*s off another anit may be held that the stock
th
split craze is reprehensible on
tiCipat0ry price rise
obstacle to the establishment
no
of
Current Popular Delusions About
The Stock Split and Stock Dividend
full .reports
And, by the way, there is probably no compelling reason to de-
have been given the op¬
portunity
to
invest
additional
money through'exercise'of their
pre-emptive right to maintain a
proportionate ownership in the
owners
■■
*
•
'that to reflect, you will realize that it
on
frequently entails what is in real-
and
they find.
file
Continued from paqe 5
new
method also embodies the mainte¬
nance of
high standards of moral
(2097) ; 30
Bayard C. Hoppin passed away
Oct. 31 at the age of 72 following
a brief illness.
Mr. Hoppin wa:>
senior partner and a founder of
Hoppin Biotheis & Co. of New
\ork.
_
*
The Commercial and Financial
(2098)
P4
continuedfrom4m
offer Underwritten by
The State of Trade and Industry
First Boston Group
Manhattan
Chase
The
is
Bank
capital stockholders
rights to subscribe at $47 per
share for 1,000,000 shares of new
capital stock, par value $12.50, on
offering
the
its
of
basis
for
share
new
one
each 12 shares held of record Nov.
A group headed by The
Boston
Corporation
will
15, 1956.
First
purchase
to
bank, with total resources
of Sept. 30, 1956 in excess of
as
$7,300,000,000, deposits of close to
$6,500,000,000 and capital funds of
$534,000,000 is one of the three
largest commercial banks in the
United
It
States.
branch
has
system
large
a
including 93 offi¬
cers in Greater New York, 35 of
which
are
located
in
rapidly
growing Queens County. In addi¬
tion, there are 19 overseas offices.
The result of
of
of New
two
York's
Bank
of
for
the
nine
months
ended
Sept.
30, 1956 compared with total oper¬
ating income of $133,324,000 and
net operating earnings of $31,563,000 for the
Prior
merger, the Chase
National Bank had paid dividends
in every
since 1879 and the
year
Bank of the Manhattan
with
in
the
the
exception
1840's, in
Company,
of
every
six
years
year
since
1799. Following the merger, quar¬
terly dividends of 55 cents per
share,
equivalent to
rate of $2.20 per share,
the
equivalent
to an
annual
$2.40 was declared.
The
directors of the bank believe that,
rate
in
there
is
conditions,
rate of $2.40
the
a
an
to
be
"Ward's
McClure
Mrs.
&
Gables
Price
was
formerly
Manager for James
& Co., Mr. Landford
H.
was
Ward's
PALM
Francis
BEACH,
Shaeffer
L
du
is
Pont
&
with
Co.,
212
between
lo
with
Salomon
Hutzler, Pan-A Building.
Bros.
as¬
&
auto
production
stepped
to
up
last
Motors
and
"Steel"
August.
,
.
sen
has
become
associated
with
Barclay Investment Co., 208 South
La Salle Street. He was
formerly
with J. Logan &
Co., in Pasadena,
Calif.
is
Wiley
SPRINGFIELD, Mass. — Harold
L. Davenport has joined the staff
of Gage-Wiley &
Co., Inc., Third
National Bank Building. Mr. Da¬
venport was previously with Lloyd
D. Fernald & Co., Inc.
were
39 furnaces tapping less
only five.
are
freight for the week ended Nov. 3, 1956,
or
an
increase of 104,246 cars, or 15% above the correspond-,
ing week in 1954*^-
^-.YYY.''.
;
:
.
■
The amount of; electric energy distributed "by the electric light
and power
-
V-
Upward Trend in Latest Week-
industry for the week ended Saturday, Nov. 10, 1956,
estimated at 11,522,000,000 kwh.,- an increase above the week¬
was
■
v
believes
as
that
Motors
scheduled
a
combined
the
Novi 8 from'271 in the preceding week, reported Dun &
Bradstreet, Inc. At the lowest level in eight weeks, the toll never¬
theless remained above the 207 a year ago/ although it dioped
ended
♦
slightly below jth£,J227 in 1954. Casualties were down 19%
the 269 occurring-3« the comparable week of 1939.# y
~ r
Failures with liabilities of $5,000 or more fell to 194
U.
S.
deterrent to
50.5%
of
can
its
$100,000
•
•
;
"
years
ago
(99,392,800 tons)
beginning of World War II 15
to
and
fourth
and 60%
years ago
places in world
steel
more
from 26,
production
above last,
in the wholesale and service trades.
Retail Consumer
,
than
last year
Germany and Great Britain, West Germany promillion tons, Great Britain's yield was 22 million
tons, V
was fifth with
13.7 million tons.
Britain
world
crisis
may
affect
order
production.
in the U. S.,
the
international situation
placement
boiled
over, buyers of the \
becoming increasingly cautious',
ordering. The disturbed world condition and the possibil¬
ity of steel price increases are prompting some buyers to take &
close look at their steel supplies.
plentiful forms of steel
were
in their
can
be done about
plates, structural shapes and oil
tubular goods.
Production of them is already booked "
months ahead. Except for them, steel inventories
average about a two-month supply at current rates of usage.
A
slight amount of inventory accumulation took place in October.
many
Demand for
Auto
year
steel
makers feel the
than last.
vented
them
by auto producers is still
demand
for
new
cars
is
a
question mark.
greater this model
But production and supply
from
capitalizing
it.
of parts have dampened production.
on
difficulties have pre¬
Retooling and deficiencies
Motor
In
posite
posite
;
:
,
.
Buying Steady : \
/
consumer buying slipped somewhat below that of a
Volume in apparel and major appliances was moderately
year ago.:
reduced, while sales of new automobiles continued to expand:
;
dollar
total
The
Nov. 7
of
volume
retail
trade
in
the
week
from 3% below to 1% higher than a year ago,
was
ended
accord¬
Dun & Bradstreet, Inc. -Regional estimates
1955 levels by the following percent¬
ages: New England and Middle West —4 to 0; East —6 to —2; South
and Southwest —3 to +T; Northwest —2 to +2; Pacific Coast +2
ing to estimates by
varied from the comparable
to 4-6.'
* *
Wholesale
Commodity Price Index Affected By
Upward in Latest Week
-Middle-East Crisis Turned
generaJUcommodity price level turned upward the past
political situation in the Middle East and else¬
daily wholesale commodity price index,
compiled by Dun & Bradstreet, Inc., advanced to 294.32 on Nov. 5
from 293.58 a
week earlier.
It compared with 274.32 on-the
The
week
the tense
as
broadened*1* The
where
corresponding c|ate*a year ago.
/-»
Estimates:
Co.;
the
on
week ended Nov. 7, "Steel's" arithmetical
price
finished steel remained 'at $137.48 a net ton. Its
on
steelmaking
scrap
rose
to $59.17
a
gross
com¬
Also
crop
the
week
ended
Nov.
factor in wheat was the prospect for a short winter
and for heavy exports.
Snow and rain'Were reported in some
and
Despite increased offerings, corn prices advanced in the
drought.
latter
part
grains.
.
of the
Soybean
mid-October,
^veek influenced mostly by strength in other
sharply higher from the, lows of
the International situation* and strong
prices moved
r-eflecting,
demand in cash markets.
were
in
parts of the winter wheat
relief from
belts but there were large areas still lacking
corn
Export clearances of soybeans in October
good volume and exceeded those of a year ago. > Activity
soybean futures on the Chicago Board of Trade in¬
sharply*last week. Average daily purchases totalled about
65,700,000 bushels,, against 55,900,000 the previous week and
creased
48,300,000 in the
11
kept
steel
production
same
week
a year ago.
in limited
Spring wheat flours occurred dur¬
ing the week aS;tt#ers protected against price advances but buy¬
ing was largely _confined to trade in pressing need of supplies.
Purchases
volume.
Coffee
side
as
at hard wheat
bakery flours continued
Scattered bookings of
priced
held steady,
the immediate threat of
extension
in
Y
t
generally
were
bullish
a
wheat
com¬
ton from last
week's $58.67.
Demand
//
firmer largely reflecting increased
buying interestP^stimulated by developments in the Middle East.
Grains
in grain and
General Motors Corp., 3,360,000 new cars; Ford
1,882,000; Chrysler Corp., 1,055,000; American Motors
Corp., 120,000; and, Studebaker-Packard Corp. (excluding Packards), 85,000.
year.
./
vious week;
.
for
...
and
steel and iron products being
shipped to the Mid¬
dle and Far East. Since British steel is the nation's
largest con¬
sumer of oil, cutbacks in that fuel will
hamper steel
The
*,
Despite numerous Election Day sales promotions, unseasonably
warm weather this week held retail trade at-the level of the pre¬
closing of the Suez Canal would seriously hamper *
Great Britain. The closing restricts movement of iron ore and oiL
to
and manufacturing dipped to 38 from 40. Failures among
retailers, and construction contractors remained
year's level, but a plight decrease from 1955 prevailed
manufacturers,
(82,839,259 tons).
West
week ago.
a
trade groups had fewer casualties during the
week. The retailing toll declined to 112 from 137, wholesaling to
15 from 22, construction to 36 from 46, commercial service to 18
supplying the Arab bloc.
'V'y.iv
United States capacity to make steel for ingots and
castings /;
will near the 132-million ton level by Jan. 1,
1957, according to
the magazine, which is 33% more than we had at the start of the ?
at the
compared with 10
as
All industry and
awe¬
war.
..
from 231
week, but exceeded considerably the 161 of this size a year
Among small casualties, those involving liabilities under
$5,000, there was a decline to 25 from 40 in the previous week and
46 in 1955.
Twenty-one businesses failed with liabilities above
and Ameri¬
use
from
ago.
;
Nations and Israel have no steelmaking capacity,
mecalworking weekly pointed out. Russia has been ;
War six
above the
5.9%
or
Business Failures Down in Election Week
Arab
Korean
644,000,000 kwh.
Commercial and industrial failures declined to 219 in the week
3.9%.
»
r
according to the Edison Electric Institute.
!\\
35,000,000 kwh: above that of the
1 The past week's output rose
previous week;
increased
comparable 1955 week.
.
It said that armed with 40% of the world's steelmaking ca¬
pacity, we can outproduce any other nation, despite the six-week
strike, we will probably make-about 114.5 million tons this year.'
Russia, the second largest producer of steel, and presumably
she was operating at capacity, made 49.5 million tons of ingots
in 1955. If her production continues to increase at the rate it has
the last seven years, Russia will turn out around 53.5 million tons
the national
ended Nov. 3, 1956,
v
not
"Steel" survey on car production in 1957 turned
up a con¬
servative estimate of 6.5 million, compared with 6 million this
Joins Gage
revenue
16,531 cars
Electric Output Continues
A
(Special to The Financial
Chronicle)
In 1947 there
heat. Now there
Loadings for fhe week ended Nov. 3, 1956, totaled 800 272 cars,
of-3,989 cars or 0.5% below the corresponding 1955
week but
last
General
steekmaking capacity
some
up
(Special to The Financial. Chronicle)
giants in 1947;* Conversely,-the number of small
decrease
a
cars.
Studebaker-Packard
magazine
Not much
CHICAGO, 111.—James R. Jans-
open
2% below the preceding week, the Associ¬
ation of American Railroads reports.
decreased
to open
25,000
output, Ford Motor Co. 30.1%, Chrysler Corp. 15.5%
can
»
Barclay Staff
' .v,vv:
"•
/■.? 2.Un<ler the Prior Period
country
Joins
■ •'
the companies have 204
Loadings in Week Ended Nov. 3, Declined 2%
Loadings of
They represent
Parts
5,850,000-5,900,000
began
overs
more
Fla.—
James. P. Watson has become
sociated
that
rate has
dealers.
Before
The Financial Chronicle)
BEACH,
Car
Car production, in the week ended Nov. 9, revealed the first
"normal" distribution of industry production since model change-
4
(Special
•.•>•''
.
Economy is "'the main reason behind the increase in furnace
according to "Steel."
Joins Salomon Bros.
■
sizes, primarily because larger furnaces in proportion to capacity,
cost less to build and maintain than smaller ones.
Extended
Datura Street.
WEST. PALM
than 100 tons per
yet trouble-free,
shipments daily to
shortages and tooling problems still
plague smooth assembly operations at some plants.
'
While November car output is not
likely to attain the scheduled 648,000 units in the U. S., "Ward's" said that it should hit
between 575,000
and 600,000.
This would mark a near 50%
boost over October's 388,922 completions and indicate
possibility
of a 650,000-plus December volume, and an entire 1956 total of
France
Fla.—
now
with only 30 such
duced 23.5
With F. I. Du Pont
B.
noted
the
domestic
Third
/Srtefcial to The Financial
Chronicle)
;>
hearth
capable of" heats" of more than 225 tons each, compared
furnaces has declined.
has
The "Ward's" production estimate for the week ended Novi 9
133,000 automobiles. contrasted to 117,583 the previous week.
Truck output was forecast at 21,772 units compared with
18,837
in the earlier period.
went
WEST
operations
-t,
Y _v'-: V"
">\
.
furnaces
is
with H. Hentz & Co.
Mary
oil
y'i'V-''
y
,
The
Coral
foreign
i5v;-
The study revealed that
•
Automotive
in 1956.
Co., 617 Madison St.
Bowen
study of 29 companies, made by the Technical Com¬
a
country.
production
car
(Special to Thz Financial Chronicle)
TAMPA, Fla.—Mrs. L. Blanche
Bowen and L. Elmo Lanford have
become associated with Louis C.
in
.
companies' combined open hearth capacity is 107 million
tons annually, ;hr 95% of the total open hearth capacity in this •
net
is
step-up
,
.
The
V
years.
Reports" us on record that a 13% gain
is scheduled by U. S. factories as programming
reached the highest level since mid-April.'■;--< i-v 7'..in
„
,
A
*
Open Hearth Steelmaking Practice of American Iron and
on
Steel Institute.
13% Car Production Gain Scheduled This Weekn
out¬
With Louis C. McClure
according to
no
•
on
standing after this financing.
gives
all, the steel Industry is in no danger of raw material
Manganese 'supplies are believed ample when stock- \
pile tonnage is included. Iron ore is no problem. Tin might
present some problems, but not in the immediate future.
change
annual dividend
shares
an¬
With it
marked
be maintained
can
13,000,000
or
floodgates.
of
unless
way
shortages.
3, 1956, however, a quar¬
dividend of 60 cents per
terly
share,
one
probably half of what could be booked if mills wanted
paid;
were
them—in
to-earth business with all the water squeezed out.
Oct.
on
to
-
Americanylron & Steel Institute announced that the open
hearth steelmaking furnaces, which last year accounted for 90%
of the nation's steel production, are getting bigger and better,
virtually
imports of oil country goods urgently needed by U. S. oil
producers.
•
/
Many heavy demand patterns will converge on the steel in¬
dustry during December and the first quarter. Incoming orders
are running as much as 10 to 15% ahead of
capacity in some firms
and that figure is expected to move up in the coming weeks.
Mills ere doing all they can to weed out excess or duplicate
tonnages. Orders actually getting on the books represent down-
annual
an
bars.
although
period of 1955.
same
the
to
channeled
Major Factor
as
Capacity Growth
.The
mittee
demand
during the last 10
of
the
City of New York,
1877, Chase Manhat¬
tan reported total operating in¬
come
of
$154,976,000
and
net
operating earnings of $35,480,000
be
Trend to Bigger Open Hearths Seen
;
cut off
National
chartered in
to
'
In
strong, but foreign consumers have little
chance of obtaining more than nominal shipments /from U. S.
producers. One mill has turned down a British order tor 50,000
oldest and
Chase
The
have
Export demand
largest banks, Bank of the Man¬
Company,
chartered
in
and
would
them
hattan
1799
1
sign of easing and the trend is
the other way. And automotive is set to provide the kicker. The
oil and gas industry is clamoring for all the tubing it can get—
and complaining that steel shortages have been a handicap to
merger last year
a
-
example. The heavy backlog of freight car orders
though the odds are against government controls ;
these and other urgent programs, heavy tonnages of
Domestic
tons
The
-
other.
at the termination of the offer on
Dec. 5, 1956.
-
Even
support
steel
unsubscribed shares
any
from last week.
,
is just one
is another.
Thursday, November 15, 1956
...
operating at 101%rbf capacity (2,486,512 net tons), down 0.5 point
v " ''"".'Y;'/' : •" V-
Chase Manhattan Bank
ers
Chronicle
Cocoa
of
with roaster buying
a
port strike
the—dock work ers'-contract
pric5S""f5hished
for
was
on
the
light
removed by the
another
higher following irregular
15-days..
movement.
Volume 184
Number 5586 ...The Commercial
and Financial Chronicle
(2099)
.
Warehouse
stocks
of
cocoa
continued
331,421 bags as against
339,144
year they were 235,503
bags.
Raw
new
highs
tension
in
sugar
for
the
the
in
The
both
the
Middle
lard
season.
market
week
a
decline
and
earlier^At
Y"
and
this time last
^
1
tance
totalled
'
'
/
domestic and world markets
Trading became more active
rose
of
thrift
the
to
None
the
individual
convenience
the
economic
the
last
few
nervous
week
a
following
recent sharp declines.
Cotton prices were
and
irregular
with
closing
if
ago.'Hog prices turned upward'
thrift'
that
people
to
are.
is
tors
been cherished
.the
the
already bright export prospects for the
believed
by
by
the
Middle
the
for
season
the
in
many
1956 loan stock
for
steady
the
East
trade
to
have
week.
responsible, and
If the day ever comes when
There
of
about 305,000 bales.
through that date to
1,495,000 bales to the
same
The
1,663,000
bales
against
as
date last year,
The
.
.
:
;
v;v.•//
were
flour, wheat,
Lower
~
were
rye,
eggs, potatoes and lambs.
The
of 31
index
tion is to show the
•:
level.
modeni
According to the Federal Reserve Board's
index, department
stores sales in New York
City for the weekly period ended Nov;
3,
1956, decreased 5% under those of the
like period last
year.
Inthe preceding week Oct.
27, 1956, a decrease of 2% was recorded.
For the four weeks
ending Nov. 3, 1956, a decrease of 2% was
registered. For the period Jan.
1, 1956 to Nov. 3, 1956 the index
recorded a rise of 4% above
that of the
corresponding period in
1955.
■
the four
the
weeks
ended
technology.
Now,
where
end of
mail;
so
"""Y "*
we
ov+c,.
ndg
"people
many
people
give
the
Ho
sav-
will
attempt to
kind
service they need and
thrift
of
want
wa
and
10
page
"We
of
(4) Average Hourly Wages: The
not asked for
were
mericai forecasts
l^ut
asked
mer6
this
on
to
Coming Year
rise
in
the
value
of
construction
put in place. During the first half
of 1956 the annual rate was a little
under
nu-
$44 billion; the economists
the
on
subject,
expect it to go to
average
$44 billion in the second half of
trend this year, to $44.5 billion in the
unchanged first half of 1957 and to $45 billion
manuin the second half of 1957. The
state
whether
^vould
this
facturing
institutions
of
the
the
^
I
■
President
quote):
from
the
.
only two
tUn£udtelExcess?™
said
the
trend
The
pattern
was
almost
would
for
be
non-
the
same,
three indicating a downturn,
and
Only in building construction did
sizable
a
whether
number
there
question
would
be
in-
an
crease,
but even here a large
majority predicted rising wages;
the figures were 166
up^42 no
change, and 7 down.
•
de-
Yn
erate
Savings Banks
half
second
of
1957 tend to scatter widely, with
substantial numbers
at every
level
economists
200
with
190 forecasting an upward
movement, 22 foreseeing no change
sav-
first,
forecasts for the
from $40 billion through $48 billion.*
durables
to
help
growth of
sources,
durable
For
upward.
savings
surging
upward.
con-
over-
and
Report of
1956 says (and
for
.
.
in building
replies were
manufacturing, only five
economists saw a downturn; ten
felt there would
be no change,
America
dynamic
or
goods
nation through the encourage-
our
and
The
^helminglv
needed
the
down
ud
s^rucfj[on
Dr. W. Ran-
to
be
Tdurabfe and nondurable
Mutual Savings Banks,
looking
are
further
Providing Thrift Service
above by the
or
1957.
economists
t
is
™€nt„ 0Lv5re?^er
ings.
The Economic
•
from
it will reach 118
Convention of the National Asso-
reported.
With Better
where
live and shop and have
Forecast for
Burgess, Under-Secretary
the Treasury, said at the 1956
ciation
1956, no change was recorded.
3, 1956, a gain of 4% was
:
__j
_
do
can
Continued Business Rise
dolph
Nov.
Continued jrom page 14
by
gad
Continued
Savings
In 1955 alone,
to be found?
money
of
Nov. 3,
+ _•
_
„
adjut
increasing,
.
a
period Jan. 1, 1956 to
registered above that of 1955.
and
■
■,
_
banking
we
banking hours to meet the needs deserve.
ago*
country-wide basis as taken from
the Federal Reserve
Board's index for the weekr
ended Nov. 3,
1956, dropped 3% under those of the like
period last year.
In
the preceding
week, Oct. 27, 1956, an increase of 2% was
For
all
establishing
and.JJjLbought the-"age
/YZ?;\y"''/Yv'/
For
become
H. expanded by
the sum total of the
price per pound
meats in general use and its
chief func-"
general trend of food
prices at the
on
cpuraging
$13 billion, a long-term corporate
debt by $8 billion, and state
local government debt by $5 billion. These three groups of borrowers
alone, then, required $26
billion in new capital last year,
as
compared with annual needs
of less than $8 billion a decade
and
Department store sales
is
oats,
wholesale
V
•
corn,
represents
foodstuffs
raw
believe
will
due to ac¬
celerated population growth, rising standards of living, the whole¬
some spread of home
ownership,
and the huge investment in new
plant and equipment required by
.
Higher in wholesale cost last week
barley,. butter, milk, cocoa, and
hogs.
lard, sugar, cottonseed oil,
do not
importance of thrift to the
capital
$5.95 as of November
6, down 1, cent from a week!
This put the index at
the lowest since March 27
when it
$5.89, and marked a drop of 0.8% from
the year-ago level
$6.00.
I
ever
economy
is obvious when
one
notes how rapidly
the need for
stand Vat
*
munities
doing
are
are
velopments
are. proving
to
be
helpful. But the crying need is
for branches in suburban com¬
tant.
We
we
opening
subway
windows,
sidewalk windows, and drive-in
windows.
And all of these de-
Sources
V':'v:vC
wholesale
lives.
own
Increased Mortgages
•
earlier.
of
by
automations, managed by the
state, and so I believe in the continued importance of saving.
food .price
index, compiled by Dun & Bradstreet, Inc.f went slightly lower for the
third successive week to
was
obviated
customers;
new branches where possible; we
we
Wholesale Food Price Index
Marked By Mild Declines
Y/^/Y'For 3rd Successive Week!
/-
is
that Americans
of cotton into the CCC
October 26 reached a
high
This drought total entries
week ended
per-
gov-._„.
thrift
their
crop year, which were:,
been further enhanced
situation. 'Entries
during the
season
past
*3
customers and prospective
our
are
ap-
many other factors that have long
as equally impor-
independent,
self-respecting.
-.e
sonal
generally
bank's size, physical
as a
pearance, age, rate of return, and
necessary
be
,
'
-
fact
determines
venience far outweighs such fac-
decades, great as these
changes have been
has altered
war
t
a
of
a person saves, how he
saves, and where he saves.
Con-
the
as
h
number-one
whether
changes
about in
come
the
is
consideration
economy.
of
that have
to
to
mounted.
East
was
prices slightly higher than
to
35
'
.
increase
(8)
New
agreement
nonfarm
pected
Housing
Starts:
somewhat
are
The
new
housing starts to be
next
year.
The
in
more
the number of
on
ex-
total
for
1956 will be very close to
1,100,000,
and this is also the median fore- '
cast
of the economists for both
halves of next year. It is
perhaps
significant that few of the.
econo-
mists expect
any sharp increase or
decrease from this year's level;
75% place the annual rate during
the second half of 1957 at 1,000,000
exotcted 'a mod" * /ofT"'' ",
iS N^o/ai
r
«
F
'
P™duct, they do not, on the av- expenditures -have been steadily
exPect any significant in-., increasing in recent years, and the
1
output as economists in the survey are prac-
reliance
expansion of ' the. money- erage
supply, as was done to finance crease
upon
u
business, but when money is rela- of
course, to the simple fact that the Treasury's deficit during themeasured by the Federal Reserve tically all of the opinion that this
tively plentiful
Board's index of industrial
and; savings-ac^ the people prefer to do^ business'Second World War, proy"-increase will continue next
year,
y
counts .begin to look more
like a -with
ductk)n
Thig ig not at all para. at least to a-moderate
savings banks.
If -it were
degree. In
.bother than a blessing commerjf? mte?r4T of:J
doxical
when it is remembered- the first half of
otherwise, why would the savings
1956, the annual
cial banks are likely, to turn their,
'*Jrirlgs ^ ta,e *Yll®
W' that the G.N .P. figure is in dol- Tate of'personal
banks:of New -YorkState, with As-the President sEconomic=
consumption exattention to more attractive Fields.'
^ Iars whiie the industrial produc- penditures was a little under $263
one-sixth as many
banking offices,;P°rt S°es oa
If the past has any lesson
^(iand f*gam t.Qn -ndex .g -n terma of physirai bilUon. Nearly 90% of the econoat.all as
the. commercial
banks, 'have,
for
us, it certainly should teach four,
^ output.'; The economists, on the mists exoect that the 1957 rate
savings' accounts for every availafeie savings is
us this.
....
-
j
-
..
..
_
undemin^
-
^
thrift
'
-
accounFin
a
a^protection.
commercial
average>
expect
g.N.P.
to
rise will be higher than that. The meabout 3% the
expect the whole- dian forecast for 1957 is
$270 bilsale and consumer price indexes
lion, and a third of the economists
tQ rige almost as much.'The con- set the
figure at $275 billion or
ciusion WOuld seem to be that they
higher
f^nst inflation in the future.
mbst/bank?
Why -would, .fwo lout * of; (unquote.),
-vdiscouraged three people in the state-have ff
Thus, if this nation is to enjoy
thrift business-for a
long period chosen to do business with a sav-"
a-high level of production and
during the Thirties.
One
very ings bank?-Why,
at the-recent-employment and also continue to
large New York City commercial
hearings of the Joint Legislative finance huge
expenditures
for
bank that I know of discontinued
Committee, would so many public durable goods by consumers and
all interest on thrift
aceountsjin witnesses have testified
,in-fayor, industry without creating infla1939 and did, not resume,
paying of wider branch powers for savtion, we must achieve a higher
any return at alj to.the saver until'
ings banks while not one testified .level
of
savings than we have
1945., During those six years, the .against us? The fact
that the*pub- had in the past.
-average annual rate paid to de-, lie
is on our ifide
or^ more .cor^ Are we doing this? No, we are
It
is
well
commercial
known
b
a n
that
k s:
...
.
Commercial
to
seem
bahks
qualify;-as
the
fair-weather friend.
really placent in
survival,
but it is, nonetheless, a tremendously encouraging thought. " V
saver s
-
-
this fight for
•
not-;,
S™ngs
reticular
outPut
of
forecast
145
to
be
Increase Is.
industry.
end
of
throughout
<«>
r
increase in physical
The
,
this
median
be
-it
»
should
the
be
kept in mind that thi.
the economists polled
forecast of
by F- ^ Dodffe Corporation, and it is
f0Vec?st m^d" bV
the
Dodgt^iinization
itself.
and
year,
next year.
Jensen & Stromer Adds
mand
,055
in
•
,
.
.
-
.
....
,
.,
Av^Idwin^ Beck,' Jamesjfr
The
savings
that
Americans ..totalled about $29 billion, and tne
Q0bbins, Bernard W. Kramer, Cyif some
.J.
If
commercial banks wish xe«p with banks, savings arid loan Department
wisn
keep wnu UCU11S.S, 3(tVlllga>auu ivaii
of
Commerce esti- rjj ^
The;Need for Habitual Saving
"
A
^
Kramer, Arthur V. Porteriq enter the
savings -field from, associations, credit unions, and in mntps that hnsiness this vea will
—
—
mates that business this year
I maintain that if
field, and Frank - Shelby 'have
D.
people are to time to time, we make
time, we
no obiecthe iunu w iu4[f.uwuinJ.v.u,
obiec--me form of life insurance, postal invest a record-breaking total of
adopt the habit of thrift, "saving
become connected with Jensen &
tion, even rnougn li may some-dnu oavJLiigo ipviiup
though it
some
.savings, and savings bonds showed about $35 billion. * The economists
cannot be turned bri and off
but times seem
stromer, 426 Fifth Street
i
fa-us that they are a net increase in 1955 that was in the
a
net increa
"
'*
'
™
survey are almost »naniunani'
must be
encouraged day in and merely
toying^ with what we con- considerably smaller than the in- mous in,expecting that 1957 will
riav
nilf
VPQr
.ing'with what we conU/itk Hamilfnn ManatrmA'f
'out-^?ider a most .-serious business, crease for 1954.
be aitother extremely high year
ORLANDO, Fla. — Arthurth
acement
is nrppisoiv
^ver'
they suggest .that
But let's bring it closer to home, for plant and equipment expendisavinoc
hanJc
^ .
savings banks have outlived their The savings banks of New York tures. Only five economists ex- Decker, Leif Jensen, Ronald A.
rerplv
rWlarp
usefu.lness»- we.*cannot,, in good State experienced very nearly the pect the 1957 fivure to be as low P h i 11 p o 11 s, Robert E. Vince,
kpnkc
in
MpW'vnni, c^
®avxngs .conscience, refrain-from replying/ same net deposit gain in 1955 as even as last year's $29 billion; on Harold V. Carter and Arthur W.
„
f
o
•
.
-
.
.
"
GNP
is that the index will
the
at
alsQ
;:-
>
in
rise
inflationary;
and therefore consjstent with this they see
—
1.5%.,
the
expect
largel
-
'
4
,
-
v* vm
.
—
-
T7:pu
,
.
IndZ' Jrh ,^nnlcyear
fsifhf,,7ix,ave
nprfnrmpH
Anri
Aim
en
Wlth Mamllton Managme t
fnr
bu, xur
thn
annA
Nonsense!' Nor can we, in good during the two previous years,
.conscience, fail to seek - wider Our gain during the first^ nine
wejooa or tne econ-* branch
powers-or
omy,. for the
good- of the com-,
isiative
munitv, and, in the final analysis,
,
for
the
banks must continue to fulfill
the..ated
high mission for which they were
chartered.
I
said
lie,"
"
"for
and
.
confound
e
iminate
of theuiiicomprise the
that
another factor
any
brings
which
'
is
to
«,
I
tiie pub
were
ic
.
In
all
refer,
.
....
the
matter
UU
be
Cassada have become conn
with Hamilton Management
poration.
and
York
same
loan
State
experience
this
we
banks
we
,
the
and
associations
are
to
w
billion
three
in
year,
quarters of
Totai
Opinion
get people to
next
with about
the
save
jess
Construction:
New
pomtTthat
most vital
.one
is easy to over-
is
perhaps the
tlf all—the
impor-
more' w,e
mu3;
convenience." A
among
unanimous
FREMONT,
sted
business
on
the
shows
that
on
construe-
the other
com-
pleted by the
ing- Fund
Society
forecast
Neb.—G. A. Olm¬
in a seucrities
engaging
from
offices
at
1428
the economists is
tion outlook than it is
uo"
Sav- major
study just
Philadelphia
is
North Park Avenue.
William W. Battles
_
-
Opens
(Special to The Pina-ncial Chronicle)
economists
setting the figure in the range
from $35 to $40 billion, inclusive,
having the
are
having
respect.
are
G. A. Olmsted
-
UAAVMMI
The commercial
in
savings
economists
..
hank, branches it
look-a
of
149
The average forecast is for plant
The average
and
equipment expenditures of
was
1
kV
savings
sur
hand,
norinH inet vpar
During the same period last year
gain was $715 -million. We do
million, we
.1—j
ncd SCCllI to oe forging ahead.
seem
New
the" controversy
other
higher than this year's $35 billion,
cre-
>
of
the
expect that the 1957 total will
$718 million,
' l»
render.-
Pub-/roundingl
' mind
boiind to
who would like to
savings banks.
.....
„The N^ed for Savings
the good
who
V rendef
•
months of 1956
our
our
..
savings;banks
to
in
necessary
,
__
other leg-
como
changes
.
good of the individuals :°rc^er ^or US
who comprise the
public; savings* service
dividuals
any
-
indicators.
indicates
he
The
a
average
average
very
slight
William Waite Battles of Battles
& Co., Inc., Philadelphia, passed
away Nov. 6 at the age of 66.
^
t
oG
The Commercial and Financial Chronicle
(2100)
purchased
7
Continued from page
M-
in three
up
control.
tice
for
in
except
what they can earn.
50%.
over
3% to
and
There
Baking
other
In
for
words,
particular acquisitions which
we
think give a pretty good in¬
dication of the general rule, the
ixiok value figures were relatively
unimportant in determining price.
Actually while not shown in our
tables,
know, there have
companies sold for less
as
you
been some
than book value.
Usually
valuation
easiest
the
to resolve is in the case
exchange of stock where
problem
of
an
ihe stock of both
broad
record
companies enjoy
public market. The price
is then
an
appraisal by
Detween
Earning
of
are.
value
book
net
This
in
Even
e
arise.
ing
version
of
cases
the
ex¬
holder
when
If the holders of outstand¬
of
stock
smaller
a
change into stock of
obviously
pany,
used
com¬
ket
value,
have
to
of 22-26.
say,
a
circumstahces
ular
tion
prices
or
the
of
case
an
would
common
itations
field.
the
pay
his
upon
Federal
involved
in
of
case
earning
book
vs.
laws.
assets
dispropor¬
The
Gillette
pany
in
time
the
January,
book
roughly
1948.
The
a
actual
law
value
of
$4,700,003.
practice it
was
let
100%
a
was
Net
was
but
same
book
value.
There
problem to curl your hair—
alone
It
of
it.
wave
solved
practical
is
and
those
its
three
different
the
of
the
company
formula.
a
novel
a
or
a
bring
stock~
Gi-lette
or
In
of
ei.her
slock
common
cases,
stock
DATA
ON
is
RECENT
spite of these conditions
ous
of
There
Merger
Acquiring Company
The
Varoer-Hudnut, Inc.
Olin Mathleaon Chemical Corp.
BorgiWrnar
Monsanto
Chemical
Co.
tax
interest
rather
than
dividends.
Amount
For
tion
Ex¬
2 Mob.
33|""
$
Mos.
Value
Based
Price
Acquired
3 Moa.
Paper Corp.
Acquired Co.
to
Before
Received
in
2
Exchange
(000)
3"KoaT
Moa.
27
5/8
20*
37 1/8
22*
18,680
16,IjOO
b6
7/8
b2
3b 5/8
30
3/b
8*
1955
152,150
152,150
bb
5/8
bl 1/2
b9
b9 1/b
5b 1/2
5b 3/b
11* 1/2
12
2b
1/2
l/»*
Merger
(OOP)
1 16,25b
22*
Paid
* 23,239
1 Sh.
1
22*
U,0b5
b,676
16*
,286 Shi. Beatrice Foods
2b*
31*
56,989
123,320
23*
7,75b
13,551
75*
Jan.
1956
28,590
30,610
22
5/8
2b
18
3/b
20
1/8
33*
31*
30,818
b0,l8l
8.7UO
11,120
3b 7/8
36
1/8
7
3/b
9
7/8
12*
(9*)
5,68b
10,170
3/8
b5 1/2
66*
28*
28,339
60,778
lib*
8*
7*
11,351
6,b22
3/6 Sb* 011° Mathlesoa
125*
31*
15
3/b
66
Savers
Aug.
Corp.
National Container
Corp.
1956
36,638
37,869
1956
90,298
82,8b7
77
3/b
7
1/2
1/2
7
26
28
29
Oct.
b5 1/2
Lambert
7*
52
33
Warner
1/5 Sh. Borg-Warner
35
1/b
of
82*
3/b
16
Shara
192,b09
52 1/2
b2 3/b
Common
105,862
39
Life
Pecking Co.
Owens-Illinois Class Co.
Each
Acquired Co^tny Received
26*
b2 1/2
5,99b
1/2
27
1/b
(9*)
25 3/b
23
5/8
53*
1/2 Sh. Nona an to
1 Sh.
Crown
Zellerbach
1
1/2 Sha. Square D
30*
1
1/1° Sha. American
79*
1/6 Sh. Rheem
(77*)
-
1
3/6 Sh*. Union
1/2 Sh. Dsn River
(lb*)
12,681
32,175
15b*
5/6 Sh. Beech-Nut
55*
69,11b
152,266
220*
1/6 Sh. Owens Coamon
♦
*20 of Owens Preferred
Continental Can Co.
.
,
« f
*
•
,
4
Robert
,
»
-
j
'
V
e
Prepared by Goldman, Sachs
S
&
Gair
Company,Inc.
Not
yet
95,281
98,236
b6
7/8
bb
32
1/b
33
Effective
16*
1/k
%
6*
-
„
A
3b*
106,965
78,093
8/10 Sh. Continental Can
">
-
,
Co., Oct. 31, 1956
t
as
for
36*
b5 3/b
U7,3U8
well
1
)
■
'
'
■
>
v
.
f
-
t
'
i
*
■
■
»
i
<
in
ones.
5b*
b9 1/6
6,b22
effectively
as
18,016
b5 3/b
1*7,31*8
loans
60,627
26,005/.
,
11,060
1956
institutional
function
can
private
63*
■
96,363
Aug.
public market.
hand,
11,728
.
9%>>
11,170
July 1956
the
10*
».
107,1U8
Inc.
market
153*
j,
1955
Mllla,
the
Value
Securities
1955
Camp Manufacturing Co.,Inc.
to
other
sition
3 Moa.
I
and market conditions at
Acqui¬
2
Announcement
3b 3/8
Alabama
San River Mllla
of
Book
of
53 3A
1956
side
or
nouncement
30
March
.
Below)
Nov.
Co.
street.
(Discount
Dec.
Manufacturing Co.
the
Premium
Above
Market
on
3,815
Richmond Radiator
of
private placement of
Paid
Acquisi¬
6,360
Hulllns
Sanitary
sides
the
placement market
itself is composed of institutions of
Before An¬
Moa.
a
se¬
Placement
This
Gaylord Container Corp.
Standard
enjoy
Private Stock and Bond
1955
Controller It Mfg.
stocks
participating in larger
Oct.
Clark Co.
L.
a
all of you know, has in
come
to have
two
both for small
Company at
55 7/8
1/k
whose
suited
the
Sheet Date
51,885
.
case
Last Balance
♦ 15,075
1955
of
Acquired
Sept. 1955
Co.
Book
or
of
Share
50,381
Sept.
D.
Manufacturing Co.
Beech-Nut
3 Months
Acquiring Co.
does
laxgei
stock.
The procedure,
is only available to
which
Company Prior
Per
Announcement
I 21,302
June
Oil
1955
Mentha
(000)
Price
to
as
,pf
a
Electric
Americas Radiator It
Union Bag A
March
Lion
Co.
Square D Company
lbs am
Co.
Byron Jackson Co.
Zsllsrbsch Corp.
Crown
Lambert
2
Blockson Chemical Co.
>
Corp.
Beatrice Foods
Effective
Acquired Company
Announcewent
Prior
prices
offering
vari¬
are
for this but two prin¬
First, of course, is the
advantage in the paying of
Market Price
Market
market
ones.
(Was Below)
First Public
con¬
ACQUISITIONS
Acquired Company's
to
as
investors
we
reasons
cipal
ceeded
Common Stock Prior
each
constantly increasing queue
companies standing in Lne at
Price
Month
subse¬
practice
borrower should go is de¬
termined by the circumstances in
On
Exchange
Value
To
place
|
* By Which
Market
holders
In
as
compared
to
the
longer-established public market¬
ing thereof.
a
the loan windows.
however, if pre¬
involved, special
CERTAIN
advantage of selling
higher
than
present
years
to
best
Raising Capital
As
ferred
refer
ac¬
find
and
the
It also
securities
are
But toere is
while
xk of 1%.
as
offerings of debt obligations have the time. In this
connection, some,
recently faced a buyer s market general
observations
m ay
be
and
resulting
relatively
costly made. Broadly speaking, it is the
borrowing rates.
large offerings of issues which are
combination may be used, all
must have
voting power.
SELECTED
all
applying
acquisition of assets or of
these,
recent
separate
prices
difference
to
of
course,
curities,
seek¬
By
high
on
direct
companies
know, our recent and
public markets favor the
standards
good
reduce
favorable public market.
The market place for debt
require¬
obtainable for many common
stocks.
On the other hand, tne
of
company
should
amount
of
market
seller
are
at
the
combination
be used.
may
both
who
re¬
active demand. By
presently
the
impact
outlet for funds.
an
of
convertible
is usually a gradual thing
and does not have the
depressing
ac¬
convertible securities.
exchange
preferred
stock,
preferred
In
current
investors
of
version
now
of statutory mergers
of
important
stock.
or
voluntary
case
type
the
A
debt-
compromise,
quently convert.
sale of equities either directly or
indirectly through the medium of
stockholders.
In the
the
ordinary
prevail.
too
which there has
a
much
as
levels
or
cepted
in
its
have
little
use
an
can
stocks
As you all
merger.
assets
of
present
Acquisition of at least 80%
common
to
ing
out.
thereof,
course
meet
ments
Acquisition of substantially
any
of
who
the
offers
securities in exchange,
new
a
thinking.
means
haps
ad¬
acquisition
haven't
years
all
is
credit
to be sold ei her
an
stockholders
then
ways:
of the stock of the
company
an
by
cepted
must
Statutory
of
are
raise cash for
to
financial
Tax
annual interest cost of
money per¬
the terms of the trade.
on
advance
If securities
stocks
by using
in
ca¬
(1)
selling
of
nj
financing.
On the
selling company or
a
capital.
Income
our
practical
this
may wish to dis¬
portion of their new se¬
a
postwar
cently been
com¬
vice
that
(2)
all
of
Federal
securities for
gains
buying
secure
is, free from immedi¬
capital gains tax may take
in
capital
the
us
course,
of
In either case,
however,
both buyers and sellers
frequently
that
form
of
the
raising
Convertible Securities
curities.
tax
classif
made
A
case
of
artificially low borrowing
of
tax,
they
that
it
time
slanted in
profit.
a
free
hand,
and the
rates
the
gains
course,
considerations
the f'rst
into
methods
best
whether
we
stockholders
pose
not.
Deals under
falling
sharp fall in
would seem
a
to
sell
stock/s is
when people are
urgently seeking
them. One would like to inquire
and the selling
stockholders at
capital
a
of
money
other
tends
the
deals
incur
direct
two
of debt securities,
is not under the burden
raising cash and thus needs
relates
act
have
and
bonds,
The
foregoing
however, as¬
are
purchased,
in whole or in
use,
or
of
prudent to weigh most thoroughly
the relative
advantages of these
is
pany
for
which
acquired
profits
after taxes for the last reported
year (1946) were $4,500,000 or al¬
most
latter
the
tax to the sellers
special
liability
the
stocks
acquisitions
bears
serves
generally
to
deals of acquisition ar.d
merger into two main categories;
viz., those that are free of capital
gains tax for the selling company
Com¬
Toni
with
of
is obvious that in the
It
classify
ate
securities
new
payment,
have realized
sellers of
if such
its stockholders
of
or
once
tion."
tion,
for
provided,
and
capital
portion
long and marked rise in
a
those
of
category
company
or
its
"substantially to reduce competi¬
are
After
prices
instead
then
anti-mo¬
the
The
company
with
that
Tax
future
substantial
stock
second
this
former
upon
gains.
val¬
At
in
expanded
A
mergers
statutory
nonvoting preferred stocks,
or
buying companies which
not, among other things, ac¬
must
quire
or
greatly
a
registration require¬
part of cash
of
the
that
was
Income
securities
or
capital
company
power
work
reference to their tax
necessary
value
If,
investment
anti-trust,
hardest
(3)
extreme
the
pro¬
broad base
a
equity capital. Thought should
be: given
to
the
possibility of
acquisition of assets where
means
imposes definite lim¬
Federal
our
to
Furthermore
to
issuance
sets
state
com¬
to
sure
of
involved.
Particular reference is made
the
to
such
both
through
or¬
pany's purchase cf The Toni Com¬
100%
the
to
between
uation
of the stock, the common prac ice
would be to offer minority holclsame
which
work
stock.
An
deal:
extraordinary circumstances.
When only a controlling in'er-
the
Take
price without substantially dilut¬
ing the earnings for its own com¬
mon
of t.lis
than
successfully under other cir¬
chance
a
previously referred to snows
that the premiums in the market
prices have varied anywhere from
a low of 8 to
10% to a high of c0
to 36%.
In one case the premium
indicated was actually 64%.
Un¬
doubtedly, this latter reflects some
acquired rather
pre¬
has also'been
dinarily give the buying
mar¬
kind
is
combining
common
combined with
-
each
of
value
book
company whose own stock
selling at only eight times
earnings. For such a problem, a
straight nonconvertibie preferred
such premiums vary
wide range with the partic¬
Our table of recent mergers
of
the
banker
today
must
constantly
keep in mind the statutory frame¬
was
Of course,
over a
actual
buying
to
as
not
price paid equivalent
to, say, 10 times current earnings
of
the
acquired company by a
For
»'n such amount
con¬
is
acquisition
that cf the old
example,
if the
stock of Company A is quoted at
$20, it would be iin line with es¬
tablished practice to offer an ex¬
change into stock of Company B
compared
as
value
formula
the
Growing
borrowing power should be left
unused for possible
emergencies. V
ment
Financing
to
other
should make
vide themselves with
proposal by the SEC would
extend
Statutory Classification and
getting
financing,
-
needs.
required.
and the
might be employed in the
an acquisition of
high and
rapidly growing earnings.
Before
;
;
whether
considerations aren't
being overlooked.
to
is
-
.
however,
panies
few stockholders
a
exchange offer
un¬
ally
that
rather
the
many
be made then registration is actu¬
pass
of
but
flexible
a
to
than
more
whom
to
Act
of
in
formula of
cumstances.
This
usually
lakes the form of a premium in
market price of the new offering
holdings.
com¬
prior to
book
for dilution
ferred with
considera¬
some
tion must be offered.
pre¬
to
are
which
case
he converts.
This
company
larger
a
his
addition
that
Market value apprecia¬
tion, which must take place prior
to conversion, will compensate the
to be induced to accept an ex¬
are
convertible
in
so
diluted.
of marketable securities
interesting
calculations
change
o m
these
of
stock
not
wisdom
acquisition
indicate
to
cited
the
on
particular
nopoly
stock,
is
case
judgment
down
amount
equal to 50% of
sum
a
some
If under this formula there
stock.
of
somewhat
a'
of
tional Stock.
We wonder,
se¬
SEC
above, namely, tne
exchange of stock for
voluntary
net
Proposal
1933
officers
have
diluting existing
equity positions by offering addi¬
method
recent
com¬
overcome this ots acie,
plan gives the Vulcan ho.der
mon
third
recouped
companies
realistic fear
registration of
the
Secondly,*: the
iax
arise in connection with the
may
ers.
Detinning Company and
Birminghmam
Slag
Company.
Vulcan, a listed company, had a.
book value of about $7,70J,C0.) and
1955 earnings of about $700,000.
Birmingham, a closely-held com¬
pany, had a book value of afco.T
$8,900,000 (116% of Vulcan s) and
1955 earnings of about $1,800,000
(257% of Vulcan's).
Obviously a
division of common stock solely
on the basis of
earnings would re¬
sult
in a
proportion for Vulcan
considerably below its book vaiue.
ferred
may
had
under
by
-
..
<<
The matter of
that
agreed
was
*
carefully
Recent SEC Registration
$8,-
—
profits would thereafter
until another $8,000,000
would be paid to Toni stockhold¬
course,
two
of
paid
In order to
Exchanging Securities
Ratios in
profits
be
Power
between
cash
».*;
which
presented
are
studied
be
counsel.
this
first $8,000,000 out of future Toni
Book
of Vulcan
an
value.
little
of
be
figures
the
else
one,
must
curities
Gillette
after
being merged.
A current
example is the proposed merger
But the market mus; be an
bitor.
active
problems
made
<
*
added
Finally, it
(3)
the
investing public—the linal ar-
the
for
stock
was
000,000.
Com¬
various
ways of adjusting for differences
in earning
power valuation
and
as
these
crs
the
to
much
panies
153%, with the averages well
as
est
General
Value
It shows that for a group
of recent acquisitions, the prices
paid indicate premiums over book
a
offered
instance of this prac¬
An
was
Disproportion
esting.
value varying from
those
as
Toni
of book value
vS.
earnings power valuation, 1
have a table which is quite inter¬
this question
On
ways:
Then
(2)
pany's recent offer to the minor¬
ity stockholders of Van de Kama's
Holland Dutch Bakers, Inc.
unusual cir¬
cumstance, assets are only worth
ling,
Toni
000.
securities
Actually in the last anal¬
ysis it is the value of the earning
oower which is generally control¬
the
(1) The book value of—$4,700,-
Financing the
assets.
all
cash, the total of which
f
„
Thursday, November 15, 1956
...
v
i
-.
....
.
Volume 184
varying
Number 5586
...
The Commercial and Financial Chronicle
investment interest. ' If
to place a block of
Use
wanted
one
think
stock
one
ment
trusts, and to a certain de¬
pension
arid
endowment
gree,
would
funds.
In
the
cerns
of invest¬
of
Interim
In addition to the
and
Funds^
^
public market
private
placement
cf
de¬
loans,
there
are
other
benture
credit
of
sources
which
cur¬
are
with
of
case
small
con¬
rently being used. Failing to get
highly
promising long term loans for acquisitions in
factors, there are certain recent
weeks
some
companies
venture capital groups, looking for
have procured interim funds from
attractive opportunities.
But this commercial banks upon term loans
(2101)
form.
Running as.it does for a
long period of years many contin¬
gencies have to be provided fjr.
So, the terms of the loan agree¬
ment and the note itself vary over
wide
a
offer
and
range
tunity for
many
oppor¬
a
The
relative
advantages of the
placement vs the public
private
market
will
be debated
As
for years
volved
in
long term
dustrial
much
conditions
and
terms
loans to in¬
corporations
the
in¬
in
are
very
both
tory privilege. The private sale of
securities need not be registered
private
and public markets, although in
the private placement loans these
terms are usually more compre¬
with the SEC.
hensive
to
come.
former
enjoys
definition
a
all know, the
important statu¬
you
an
There is
to
as
private sale.
no
what
precis3
constitutes
It depends, among
other
things, on the nature of the
investors, the type and amount of
securities, as well as the informa¬
tion available about
the issuer,
the
and
number
of
to
persons
whom
offerings are to be made.
Depending upon these factors, an
offering of long term debt to 50
.
or
institutional investors would
so
probably be in the nature of a
private offering and need not be
registered. The escape from regis¬
tration considered solely in itself
saves
borrower
a
both
time
restrictive.
and
the
cases
for
run
same
long
15—25
years
In, most
obligations
term
and
except
that
often than
the
gage
ally
retire
to
rower
will
such
sums
lic market is
least not any
which
to
the
net
pub¬
actually lower or at
greater. In addition
there
other
are
debt
pay
Protective
Covenants
am
sure
to
dinary
how
will
you
the
onerous
to
Affect
of Money
At this
refer
to
in
the
market which applies both
money
to
rise
the public offering and private
placement sides. Interest costs are
up anywhere from 20% to 33V3%
over a
year ago.
For instance a
industrial company
medium-sized
with
a
good
of
record
earnings
&
found 25-year funds in
market
With
par.
a
Gamble
usually
a
at
condition
critical
of
this
market is not completely
by the rise in inter¬
cost.
Actually,
immediate
est
clear
money
from the large institutional
of private placement de¬
bentures, in many cases is just not
available. Certain leading insti¬
tutions have recently advised us
buyers
that
their
existing
commitments
will take all of their estimated in¬
vestment funds
until
late
of the
lender
or
1957.
Should this condition fail to im¬
in the next few months, we
find ourselves in a position
where
long term private place¬
ment money must be sought more
entirely
left
the
to
dis¬
although
tendency is developing in recent
comparable situations.
element, much
the nature of tne
business, its complex¬
the thoroughness of its
depends
ity,
upon
and
loan
covenants
borrowing
not
to
company
bleed
its
assets
by excessive dividends or by pur¬
of
its
profits
own
stocks.
usually
do
Future
not
come
under this inhibition.
the borrower
maintain working cap¬
ital
at
This
figure usually offers
some
reasonable
level.
a
mar¬
gin of safety and is estimated to
well
mal
under
that which
a
bor¬
would maintain in the
nor¬
operation
of his
business.
With regard to repayment,
cal
typi¬
provisions would require after
three years
regular amor¬
tization yearly at par; the privi¬
lege of doubling these payments
in any year at the borrower s op¬
tion at par; and finally the rignt.
to call ail or part of the loan by
paying
a
premium.
In
recent
months, the acute tightness in the
money market, as well as preva.ling high interest rates, have oc¬
or
casioned
the
strictions
to
unforeseen
diffi¬
of Federal
Commit¬
laws
gov¬
use
of
certain
re¬
repayment in order
buyers of these long
on
attract
term loans.
Such restrictions may
refunding for a period
Others permit prepay¬
except through the issuance
the
Federal
tions
proposals that the
were
tablishment
Federal
branch
of
be
laws
and
of
State-chartered
sav¬
ings and loan associations and that
the
establishment
loan
branch
of
offices
savings
and
State
across
Standby fees are quite often paid
to
the
lender for the privilege of
getting in line.
loans with a lower
long term
Differing from bank
long-term institutional
tract
is
strument
not
a
cut
typed out
loans, the
loan con¬
dried
and
on
a
in¬
standard
be
held
after
Nov.
9
the recommendations ol
on
supervisory agencies.
Nix, Borkland Elected
NASD Governors
J.
Allen
Nix, Riter & Co., and
Borkland, Jr., Tucker,
Anthony & R. L. Day, both»of
New York, have been elected to
Ernest
W.
lines be prohibited.
Another
calls
attention
the
to
»(JZ:/-1,
%
growing deposit insurance fund of
the
Federal
and
Deposit
that
proposes
Insurance
at $1,690,818,394
now
the
credit to banks of 60%
assessment income"
of banks less
reserves and
current
of the "net
(contributions
operating costs, loss
losses of the corpora¬
60
to
90
after nego¬
days
Big Business Getting Toe Big?
One
hears
often
Another
thority
currently
the
fear
would
for
final
vest
approval
or
bank mergers
au¬
disap¬
in the
proval of
appropriate Federal bank super¬
visory authority—Federal Reserve
expressed that big business
Board, Comptroller of the Cur¬
getting too big, by a process of
rency, or Federal Deposit Insur¬
gobbling up little business, and ance
Corporation.
in
the
end
as
we
Allen
the
Nix
J.
National
W.
E.
Borkland,
Governors
of
Board
Association
of
Jr.
the
of Securities
Dealers.
Albert
consumers
C.
Purkiss,
Walston
elected
&
Still another would provide for
fall victims to the evil doings
the liquidation of the Postal Sav¬
of huge monopolies.
Personally I
do not share such apprehensions. ings System, which the ABA states
has outserved its purpose.
These problems are, of course, rel¬
necticut) to succeed Mr. Nix, while
The ABA stated that the present
Orland K. Zeugner, Stone & Web¬
ative.
The number
of small
com¬
Co.,
New
York,
was
to
NASD's District Committee No. 13
(New York, New Jersey and Con¬
ster
Securities, New York, is re¬
placing Mr. Borkland.
^Others elected to the District
ing independent,
the roster
of ings are not adequate and recom¬
which is large and constantly be¬ mended that Congress amend the Committee are: E. H. Ladd III, The
First
Boston
Corp.,
Stanley L..
ing added to.
Furthermore, our Internal Revenue Code to permit
observations would indicate that the setting up of such reserves on Roggenburg, Roggenburg
& Co.,
the greatest number of recent ac¬ a uniform industry-wide basis. It Avery Rockefeller, Jr., Dominick
that
quisitions has been by companies urged
adequate
reserves & Dominick, all of New York, and
that might be considered medium maintained
by banks will con¬ Joseph S. Barr, J. S. Barr & Co.,
in size and are made for really tribute to the safety of deposits Ithaca.
panies sold to Big Business should methods
be related
to the number remain¬
for
setting
reserves
up
for bad debts out of current
earn¬
.
constructive purposes.
and
the
promote
extension
of
credit.
Many of our very largest com¬
|
Other
ABA
panies now find that adequate
proposals include
opportunities for expansion are amendment to existing laws to (1)
generated
internally,
especially permit shareholders of national
through highly trained research banks to decide for themselves, by
staffs.
An instance bf this prin¬ amendment
of
their
articles
of
ciple is Olin-Mathieson's recent association, whether to have cu¬
henceforth
that
announcement
they would in the main be guided
by this policy.
it
fundamental
seems
to
mulative voting of their shares in
election of directors; and (2)
the
broaden
to
tional
the
banks
authority
and
of
na¬
State-chartered
question of bigness
and its alleged threat in the field
of
tions
Halsey, Siuarl Group
Offers Equip. Tr. Gtfs.
Halsey,
Stuart & Co. Inc. and
yesterday
(Nov.
14)
offered
$7,605,000
of
Louisville
and
Nashville RR. 37/s%
equip¬
ment trust certificates, series P,
associates
maturing annually Nov. 15; 1957
to
Federal Reserve member banks to
me
this
than
acquisitions
are
considerations.
pointed
some
other
first
The
is
deal in and underwrite the
If we constantly raise the
standards of good management we
will tend to avoid abuses and ex¬
State
obliga¬
political sub¬
or
divisions.
A
by your presence here
up
of
number
dations
laws
estate
are
other
of
recommen¬
for amendments to the
designed
lending
to
bring
power
of
the real
national
1971, inclusive.
certificates
The
authorization
the
to
Commerce
terstate
The
the
issue
banks into line with those of other
mated
banks, and to modify some of the
technical requirements of national
510,981:
field.
At
the
will keep
recognize that this banks in respect to reports recountry of ours is growing ex¬ 'quired of them.
The ABA recommendations were
traordinarily fast. The little com¬
last,
pany
of
today is
the medium sent to Senator Robertson
with
a
letter
from
Erie
sized oqe of tomorrow and the, big right
one of the future.
A characteristic "Cocke, AfeVofcTation President. Mr.'
of such a dynamic economy must Cocke
is Vice-Chairman
of
the
inevitably be the coalescence of Board of the Fulton National Bank
We
must
small uqits of production or serv¬
ice into larger ones because it is
the
latter
tively
which
serve
the
can
mass
most
effec¬
market. And
certainly it is eminently right for
managements
to
take
over
concerns which
lag in that
efficient
respect.
Atlanta, Ga.
Referring to
son's
the
about is
the market
thing
to
whether
be
we
con¬
keep
statement
will be
a
broad
Senator
that
one
Robert¬
"the
study
rather than
theories"
and
that
the
banking code with ob¬
provisions eliminated and
new
a
solete
authority
added
in
areas
If where the need is clearly demon¬
doing this with the strated," Mr. Cocke said that the
Sherman Law, the ABA presentation contains "occa¬
place free and open.
succeed in
against any abuses by reason
acquisitions or the activities
Big Business.
of
of
"to
call
attention to related mat¬
ters which merit the consideration
of
the
to
to
cost
the
be
not
In¬
secured
equipment
box
500
of
Commission.
less
than
cars;
by
esti¬
80
$9,mill
gondola cars; 150 pulpwood rack
cars;
five
Diesel-electric
road
freight locomotives and 12 Dieselelectric general purpose or road
switching locomotives.
Participating
in
the
offering
Dick & Merle-Smith;-R. W.
are:
Pressprich & Co.; L. F. Rothschild
Co.; Baxter, Williams & Co.;
& Co.; Gregory & Sons;
Wm. E. Pollock & Co., Inc.; Shear&
Hammill
son,
&
Co.;
Mc-
and
Master Hutchinson & Co.
inquiry into financial and
major objective will be "to formu¬
new
priced to
Freeman
technical
a
economic
late
Actually
cerned
of
is
following
same
we
were
yield from 3.75% to 3.90%, ac¬
cording to maturity. Issuance and
sale of the certificates are subject
alive the high
spirit of adventure and progress.
time
this
in
cesses
help of the
Clayton Act, and the good sense of sional reference tto matters which
American
businessmen, the nat¬ are not within the jurisdiction of
ural laws of the competitive profit your committee.
"These are included," he added,
system will serve to protect us
interest rate.
right
the
to
practices Of the States
the
establishment
of
governing
branches
conform
to
made
letter,
to make sup¬
recommendations
to
its
on
of
savings and loan associa¬
tions
in
es¬
offices
of
of
carrying
Cocke, in his
the
plemental
rec¬
they will assist the
in
Mr.
10
deny any
in advance of needs.
study,"
hearings
may
than one year
Committee
and
these recommenda¬
to the
banking
"submitted
are
the hope that
the
in
sound
a
Stating that all of the ABA
ommendations
reserved
Included
importance
of
erning financial institutions and
credit, the American Bankers As¬
prove
ment
maintenance
sociation has presented 15 recom¬
mendations to the Committee.
we
years.
their
arise, a private placement tion) be increased from 60% to
usually be consummated 80% of the net assessment income.
tiations start.
Is
subjects
to
the
in
the
to
Currency
regard
considered
study
views
and
of
can
within
today.
Frequently
(3)
engages to
rower
Unless
in
Corporation
time
the
to
More
The
(2)
be
treatment
borrower's
rowings.
two
money
made
agree
private placements to require pe¬
riodic liquidation cf current bor¬
the public
coupon
- - *
.
The
3%%
must
cretion of the borrower,
net
Procter
follows:
other
chases
interest factor of
to
5%.
Smaller companies and
less
sought-after credits would
today pay 4%%
to 5Vfe%.
Of
course,
a
very
large
company
with the top
credit would pay
something around 4%.
Recently
the Ford Company paid 4% in the
private placement market. Some
an
later
as
borrower
the detriment
to
weeks
his
subsequently to pledge assets
would currently find it necessary
pay
or¬
running
long-term debt be¬
yond specified limits. Short term
borrowing for current needs is
Market Rise
recent
are
The
create
point it might be well to
the
policies of
in
The most usual of thesa
covenants
tunity to retire securities at
when prices fall.
dis¬
prudence
business.
not
him
its
may
of
many
know
be considered to be
(1)
nation"
favored
As
that
Onerous?
I
give
way
submit
Banking
is
Are
tages, among which is the oppor¬
a
for
by
lender.
advan¬
count
"most
general
a
annu¬
off 75—100% of
maturity. Protective
covenants serve to safeguard the
as
the
and
the
not
in
borrower
in
culties
not
are
want
more
cost to
and
usually secured by mort¬
lien.
Amortization is fre¬
quently deferred for two or three
years but then commits the bor¬
utility and railroad
by Senator A. Willis Rob¬
to
be
tee's
conduct of the borrower's business
audits.
the
Public sale, on the other
Actu¬
hand, involves not only registra¬ protective covenants are.
tion
expense
but
underwriting ally they are not too burdensome
and are hand-tailored to the con¬
commissions, issue taxes, trustees
ditions in each case so as not to
fees, and higher miscellaneous ex¬
penses.
This
differential espe¬ impose embarrassing restrictions
cially for large issues is offset by upon the borrower. They simply
the opportunity to secure a bet¬ commit him to deal fairly with the
lender and to follow what might
ter price in the public market, so
expense.
other covenants in the loan agree¬
ment
do
not
embarrass
normal
fielas
in
structure."
to
Costs
Continuing work in tlrs f'.e'd
running anywhere from three to
As to long term corporate
loans, five years or in some cases 10 for other borrowers and with dif¬
the best divisions of the private years.
This means a backlog is' ferent institutions gives the in¬
placement market are the life in¬ building up for long term money vestment banker a background of
surance companies
and the pen¬ which will hang over that market experience invaluable for trading
sion funds, which are continually for some time to come. Moreover, out terms favorable to his client.
investing huge sums in debt ob¬ as an official of the New York For instance, the reduction of a
ligations. It suits their necessities, Federal Reserve Bank has pointed small fraction in the interest rate,
of course, to invest for the long out,
the accumulations of these or a more flexible arrangement
pull. Among these institutions or loans at commercial banks has for prepayment may save the bor¬
funds there are those whose of¬ definite inflationary implications. rower during the life of the loan,
ficers will consider loans as small With the prime bank rate of 4%, many times the fee paid to the
as
$250;000 and in groups they these term loans are being made investment banker for his work.
have the capacity to take some of between 4*4—AVz% for the lead¬ Equally important and often even
more so is to make sure that the
our very largest issues.
ing credit risks.
The
tended
Committee
Save
limited market.
very
*
cause
Senate
Investment Banker Can
Banking Study Recommendations
WASHINGTON, D. C. — Re¬
sponding to the invitation ex¬
ertson
adjustments.
growth
is
ABA Presents
37
Congress
as
a
whole
be¬
Two With Hamilton
.
(Special to The Financial Chronicle)
BOSTON, Mass.—John C. Marand Victor J.
Plath have
ciello
become
connected
Tremont
with
Hamilton
Corporation,
Management
.12 7
Street.
Edw. Mathews Adds
(Special to The Financial Chronicle)
BOSTON,
MacKay
staff
of
Ctnfn
Mass.
—
Donald
W.
has been added to the
Edward E. Mathews Co.,
Q + VOCtf
38
The Commercial and Financial Chronicle
(2102)
Thursday, November 15, 1956
...
* INDICATES
Now in
Securities
Killeen, Texas
Federal Finance Corp.,
American
Sept 5 filed'40,000 shares of class B common stock (par
$5) and 400,000 shares of preferred stock (par $5) to be
offered in units of 10 preferred shares and one common
share. Price—$55 per unit. Proceeds—To purchase used
and to extend the company's operations into
new car financing.
Underwriter—None. J. J.
tory;
capital.
electric
Water Street, Toms
Business
convector
working
and
heaters.
—
•
Manufactures
Office—7
West
Blackstone
cf
Valley Gas & Electric Co.
the field of
ceeds—To reduce bank loans.
paper
Heritage Life Insurance Co. (11/19)
Oct. 26 filed 1,199,375 shares of common stock (par $1),
American
575,000 shares are to be offered to the public;
435,000 shares to agents and employees of company from
Nov. 15 to Dec. 16; and 189,375 shares to employees
of which
pursuant to certain stock purchase options to be granted
by the company. Price—To public, $2 per share; and to
employees, $1.81 per share. Proceeds—For working cap¬
ital.
Office
Jacksonville, Fla. Underwriter — Pierce,
—
Wulburn,
Carrison,
of Jacksonville, Fla.
Inc.,
(11/26-30)
Aug. 30 filed 328,723 shares of common stock (par $4).
Price—To be supplied by amendment. Proceeds — To
Estate of Edmee B. Greenough, deceased. Underwriter—
Lee Higginson
Corp.^ New York.
•
Anheuser-Busch, Inc.
Arizona Public Service Co.
.
Oct.
filed
31
shares
200,000
preferred stock (par $50).
Proceeds
amendment.
writers—The
—
of
Price
(11/21)
cumulative convertible
— To
be supplied by
To reduce bank loans.
First Boston
Under¬
Corp., and Blyth & Co., Inc.,
both of New York.
Atlantic Oil Corp., Tulsa, Okla.
April 30 filed 2,000,000 shares of common stock (par $1).
Price—$1.50 per share.
Proceeds—For working capital
and general corporate purposes.
Underwriter — To be
named by amendment.
Atlas
June
Credit Corp.,
Philadelphia, Pa.
convertible subordinated
due June 15, 1968. Price—100% of principal
filed
11
debentures
$600,000 of 6%
Proceeds—To
amount.
indebtedness
retire
of the
com¬
pany to its affiliates for money borrowed for working
capital. Underwriters—Hallowell, Sulzberger & Co. and
Charles A. Taggart & Co., Inc., both of Philadelphia, Pa.,
and Weill, Blauner & Co., Inc. of New York.
Audubon Park Raceway, Inc.
July 13 (letter of notification) 600,000 shares of common
stock (par 10 cents) to be offered for subscription by
common
stockholders
each share held.
at
of
rate
0.46875
of
Price—10 cents per share.
For general corporate purposes.
a
share
for
Proceeds—
Underwriters—Berwyn
T. Moore & Co., Louisville, Ky.; Gearhart & Otis, Inc.,
New York, and Crerie & Co., Houston, Tex.
Automation Development Mutual Fund, Inc.
Aug. 24 filed 300,000 shares of common stock. Price—At
market.
Proceeds—For
ton, D. C.
investment.
Office—Washing¬
Distributor—Automation Development Secu¬
rities Co., Inc.,
Washington, D. Q.
Automation
Industries Corp., Washington, D. C.
May 11 filed 179,000 shares of common stock (par $1).
Price—$5.25 per share. Proceeds—-For working capital
and
other
corporate
purposes.
Underwriter
—
None.
Harry Kahn, Jr., of Washington, D. C., is President and
Treasurer.
Barber's
-
Super Markets, Inc.
(letter of notification) 21,721 shares of common
(par $10) being offered to stockholders on a basis
Oct. 15
stock
of
one
new
Oct. 15,
share for each two shares held
as
of record
1956; rights to expire
on Dec. 1.
Price—$11 per
working capital. Address—P. O.
Box 515, Albuquerque, N. Mex. Underwriter—None.
share.
Proceeds—For
Baton Rouge Water Works Co.
Sept. 11 (letter of notification) 6,946 shares of common
capital stock (no par). Price—$43 per share. Proceeds
had been abandoned. No bids received
on
Blair &
Sept. 11. Com¬
&
has received exemption from competitive bidding.
pany
Underwriters—Salomon Bros. & Hutzler; Eastman
Dillon,
Securities & Co.; and Wood, Struthers & Co., all
Union
of
New
will
and
Co.
•
York.
offer
Co.
of
stock
is
Hartford
for
Rouge, La.
Underwriter—
None.
of series A
6%
debenture
bonds, $50,000 of series B 6% debenture
bonds and 207,500 shares of common stock
(par 10 cents)
to be offered in. units as follows: 100 "A" units
(each
$500 "A" bond and 50 shares of stock);
100 "B" units (each consisting of a
$500 "B" bond and 50
consisting of
shares
of
of
shares
100
units,
a
stock);
of
and 1,975 "C" units (each consisting
stock). Price: Of series "A" and "B"
$500
each; and of series "C" units, $100 each.
Proceeds—To acquire or lease
plant; for dies and ma¬
chinery; production equipment and materials; inven¬
•
Nov. 30.
be
Oil
Corp.
352,000 shares of capital stock (par $1).
supplied by amendment.
Proceeds —To
Co.
Texas
of
and
Anderson-Prichard
Service, Inc. (11/20)
filed $1,200,000 of subordinate debentures due
1, 1968 and 24,000 shares of class B common stock
30
Nov.
ing capital. Office—67-12 62nd St., Ridgewood, Queens,
Underwriter—Wagner & Co., New York.
ment
(letter of notification) 300,000 shares of common
stock. Price—At par ($1 per share). Proceeds—For work¬
(par $1) to be offered in units of $50 of debentures and
Investment
Brown
Ltd., Honolulu, T.
Co.,
share
of stock.
Price—To be supplied by amend¬
(the proposed maximum offering price is $65 per
unit). -Proceeds — To reduce outstanding short-term
one
N. Y.
H.
loans =and
bank
July 11 filed 60,075 shares of common stock (par $1).
Price—At net asset value, plus a selling commission of
7V2% of the offering price. Proceeds—For investment.
Business—A diversified, open-end investment company
of the management type. Underwriter—Brown Manage¬
ment Co., 833 Alaska St., Honolulu, Hawaii.
Office
000.
to
subordinated
repay
Dallas Power &
Oct.
Light Co.
23
(letter of notification) 431 shares of common
(no par) to be offered to minority stockholders on
l-for-16 basis.
Price—$185 per share. Proceeds—For
a
writer—To
program.
be
named
Dallas
for
each
shares
20
stock
of
held
of
and for expansion
Brothers, New York.
loans
program.
Power
record
Underwriter—
Light Co.
(12/3)
Dalton
Finance, Inc., Mt. Rainier, Md.
(letter of notification) $250,000 of 6% 10-year
subordinated debentures (with warrants attached) and
25,000 shares of class A common stock (par 50 cents)
to
offered
be
shares
of
in
stock.
working
capital.
—
units of one $500 debenture and 50
Price—$525 per unit.
Proceeds—For
Underwriter — Whitney & Co., Inc.,
Washington, D. C.
• Dental
Budget Plan, Inc.
(letter of notification) $150,000 of 9% eight-year
Oct. 31
subordinated
of class A
Co.
&
of
Incorporated, Philadelphia
and New York. Latter has agreed to purchase an addi¬
tional 300,000 common shares and reoffer them to per¬
sons
selected by it at $1.10 per share.
Offering—Not
expected until the early part of January.
unit.
per
debentures
non-secured
common
stock
$200 debenture and
a
capital.
Proceeds—To purchase notes and for working
Underwriter
Office—521 Fifth Ave., New York.
Land & Marine Construction Co., Inc.
(letter of notification) 150,000 shares of com¬
(par $1). Price—$2 per share. Proceeds—For
16
pected in November.
Texas.
convertible debentures.
_
payments of. notes> to purchase and equip tnree boatj
and working capital. Office—1111 No. First Ave., Lake
Charles.
Underwriter—Vickers
La.
Boulevard, Farmingdale, L. I., N. Y. Underwriter
1
Chinook
Inc., Rainier, Ore.
Plywood,
Sept. 4 filed 200 shares of common capital stock. Price—
($3,000 per share). Proceeds—For acquisition of
a
plant site, construction of a mill building, purchase
and installation of machinery and equipment, and as
Underwriter
operating capital.
Industry Developers,
—
Inc.
Chisago City Telephone Co.. Chisago. Minn.
Sept. 6 (letter of notification) 1,000 shares of common
be offered to
25
Price—At par
For new construction.
shares
of
5V2%
preferred
to
extent
earned
before
For
general
Price—At
corporate
Consolidated
Private Wires
to
all
offices
Chicago
Oil
par
patronage refunds)
($25
purposes.
to
be
share). Proceeds—
Underwriter—None.
per
Management
Aug. 16 (letter of notification) $250,000 of 10-year 5V2%
collateral trust bonds due Sept. 9, 1966.
Office—7352
Central Ave., St. Petersburg, Fla.
Predecessor—Lynch
Oil
Co.
Underwriter—Security & Bond Co., Lexington,
Kentucky.
a
warrant to
purchase five
common
shares.
Price—$25.50
(each warrant will entitle the bolder
o^~common share at any time prior to Dec.
31,
1957 at $2 per share)/'Proceeds—To repay
mortgages, to
$1,312,500 of five-year 6% sinking fund debentures, and
for further acquisitions and working capital.
Under¬
unit
one
writer—To be named
by amendment.
«;
Douglas Corp.,
Fort Collins, Colo.
July 27 filed 4,000,000 shares of common stock (par
cent). Price — 10 cents per share. Proceeds -7- For
one
ex¬
ploration, development and acquisition of properties and
Sales Come Faster!
sold directly to members and others by the Association's
employees.
-
stock
(cumulative to extent earned before patronage refunds)
20,000 shares of 4% second preferred stock (cumula¬
tive
Denver, Colo.
($25
Mo.
180,000
Oil & Mining Corp.,
filed
Under¬
Cooperative Association,
Citv,
filed
stockholders.
—
29
(par 10 cents) to be offered for subscription initially by
stockholders in units of 25 preferred shares and
chase
At par
Houston,
common
per
.
Brothers,
effective.
2,500,000 shares of 6% convertible noncumulative preferred stock, first series
(par $1), and
warrants to purchase 500.000 shares of common stock
Aug.
Price—90% of principal amount
—None.
Statement
Diversified
,
$150,000 of 6% subordinate
(in denominations of $100 each). Proceeds — To pay
payable, reduce accounts payable and to pay
other current liabilities; also for working capital. Office
—Allen
shares
stock
Aug. 27 filed $600,000 of 10-year 6% debentures. Price—
90% of principal amount.
Proceeds—For research and
development; expansion; equipment; and other cor¬
porate purposes.
Underwriter — None.
Offering — Ex¬
Corp.
750
Devall
May
mon
Century Controls
and
(no par) to be offered in units
share of stock. Price—$300
one
—None.
Century Controls Corp., Farmnigdale, N. Y.
Oct. 4 (letter of notification)
1506
Underwriter—To be
—
Blair
—
Sept. 28
Corp., Philadelphia, Pa.
July 30 filed $8,000,000 of 5y2% sinking fund debentures
due Aug. 1, 1971, and 1,600,000 shares of common stock
(par one cent); subsequently amended to $4,500,000 of
debentures.
Price
To
be supplied by
amendment.
Proceeds
About $4,100,000 will be used to acquire
seven
shopping center sites and a Penn Fruit super¬
market adjacent to one of them; the balance will be used
to develop shopping centers at the seven sites and to
acquire and develop additional sites for related real
estate activities,
and for general corporate purposes.
—
Office
determined by competi¬
Halsey, Stuart & Co. Inc.;
Corp.; Salomon Bros. & Hutzler; Kid¬
der, Peabody & Co. and Merrill Lynch, Pierce, Fenner
& Beane (jointly); Eastman Dillon, Union Securities &
Co,; Kuhn, Loeb & Co.; Equitable Securities Corp.; Blair
& Co. Incorporated and Baxter, Williams & Co.
(jointly);
Lehman Brothers. Bids—Expected ^to be received
up to
noon (EST) on Dec. 3.
Centers
Underwriter
&
capital.
Underwriter—None.
The First fJoston
Nov. 30, 1956; rights to expire on Dec. 17, 1956. Price
—To be supplied by amendment. Proceeds—To reduce
Lehman
working
—
on
bank
and
tive bidding. Probable bidders:
ic Burroughs Corp., Detroit, Mich. (12/3)
Nov.
9
filed
$30,154,700 of convertible subordinated
debentures due Dec. 1, 1981, to be offered for subscrip¬
tion by common stockholders on the basis of $100 of
debentures
construction
new
Commerce St., Dallas, Tex.
later.
and
Cleveland
$50,-
Merrill
Nov. 7 filed $10,000,000 of first mortgage bonds due 1986.
Proceeds
To repay bank loans and for construction
Kansas
Pittsburgh
—
stock
—
Consumers
San Francisco
for
note
Wilmington, Del. Underwriter
Lynch, Pierce, Fenner & Beane, New York.
—
Burma Shore Mines, Ltd., Toronto, Canada
July 26 filed 600,000 shares of capital stock, of which
500,000 shares are to be offered puoiiciy, and 100,uuu
shares to promoters. Price—At par ($1 per share). Pro¬
ceeds
For equipment, exploration, drilling, working
capital and other general corporate purposes. Under¬
Oct.
Boston
Oil
are
Credit Finance
Oct.
Development Corp.
per share).
Proceeds
writer—None.
Philadelphia
Na-.
the selling stockholders. Underwriters^Dean Witter & Co., San Francisco, Calif., and New
York;
and Glore, Forgan & Co., Chicago,
111., and New York.
Offering—Expected today (Nov. 15).
Oct. 29
stock to
NewYork
of
Petroleum
filed
26
Corp., who
notes
Beckjord Manufacturing Corp.
Oct. 12 (letter of notification)
$50,000
of
rate
upon the accept¬
(255,000 shares) of National stock
51%
on
-
—For extensions and betterments to water
system. Office
—131 Lafayette
St., Baton
at
share
one
conditional
/
Standard
Creger & Co., 124 North Bright Avenue, Whittier, Calif.
Brookridge
ISSUE
Dealer-Managers—William
Co.; The First Boston Corp.; and Lazard Freres
PriceTo
Bridgford Packing Co., Anaheim, Calif.
Aug. 13 (letter of notification) 222,222 shares of common
stock (par $1).
Price—$1.35 per share.
Proceeds—To
pay obligations, purchase equipment, etc.
Office—1308
No. Patt Street, Anaheim,
Calif.
Underwriter—J. D.
The
expire
Cosden
Oct.
Insurance
Continental
of
stock.
of at least
ance
Offering—To stockholders
Fire
shares
tional
Aug. 15 filed 25,000 shares of. cumulative preferred stock
(par $100). Price—To be supplied by amendment. Pro¬
car
REVISED
Casualty Co., Chicago, III.
28 filed 625,000 shares of capital stock
National
1V4
(11/21)
Fain is President.
ITEMS
(par $5)
being offered in exchange for outstanding capital stock
Co., Newark, N. J.
•
PREVIOUS
Continental
Sept.
Underwriter—Berry &
River, N. J.
SINCE
•
Registration
"Unit-Inch"
ADDITIONS
;
Your offers of securities and services will
action faster when you
Tribune.
produce sales
advertise in the Chicago
No other medium in Mid-America is read
by so many of your best prospects—both
investors and the general public.
professional
For facts that will help you to
produce extra sales in
Chicago and the midwest, call your advertising counsel
nearest Chicago Tribune sales representative today.
or
(£\)ird$Q Srilwixje
thi
wom.ds
crtatcst
hlwsfau d
Volume 184
Number 5586
The Commercial
...
andrFinancial Chronicle
(2103)
39
'
1
for working
capital.
Underwriter—Columbia Saftqritiei
sale of units to retire
short-term loans and for working
to Texas Indus¬
\
stock
common
Co., Denver, Colo.
capital, etc., and from sale of debentures
due
* Eastern Industries, Inc. (12/3-5)
13 filed 125,000 shares of cumulative convertible
preferred stock (par $10). Price—At par. Proceeds—For
expansion program. Underwriter—Blair & Co. Incorpor¬
ated, and Winslow Cohu & Stetson, Inc., both of New
tries
of Texas
York.
Genco Oil Co., Inc.
Aug. 24 (letter of notification) 55,000 shares of common
stock (par $1). Price—$5 per share.
Proceeds—For oil
development expenses. Office — 1907 Broadway Ave.,
Scottsbluff, Neb. Underwriter — Edward C. Colling,
Scottsbluff, Neb.
(par $1), and $700,000 of 4% debentures
31, 1975, to be offered for sale in the States
Nov.
*
Eastern-Northern
Explorations, Ltd.
June 4 (regulation "D") 500,000 shares of common stock
(par $1). Price—60 cents per share. Proceeds—Forggeneral
corporate purposes.
Office—Toronto, Canada. Un¬
derwriter—Foster-Mann, Inc., New York.
*
Eternalite, Inc., New Orleans, La. (11/29)
Sept. 24 filed 200,000 shares of class A common stock
(par 50 cents).
Price—$4.50 per share. Proceeds—To
repay loan; for maintenance of and increase of inven¬
tory; for development of branch offices; and for research,
laboratory tests, and testing, equipment. Underwriter—
Vickers Brothers, New York.
p
*
Federal
Oct.
Manufacturing & Engineering Corp.
(letter of notification) 198,900 shares of class B
1
capital
stock
holders
to
be
offered
the basis
on
of
for
85
subscription
shares
for
by
Stock¬
100
every
shares
of class A stock
of
held; rights to expire 30 days after date
Price—At par ($1 per share). Proceeds—
offering.
For
general
corporate
Office—1055
purposes.
Ave., Garden City, N. Y.
Stewart
Underwriter—None.
to
the
to
retire
latter
subordinated
a
promissory note payable
firm.
Office—New Orleans, La.
Under¬
writers—Howard, Weil, Labouisse, Friedrichs & Co., New
Orleans, La.; Rauscher, Pierce & Co., Inc., Dallas, Texas;
and Russ & Co., Inc., San
Antonio, Texas.
stock,
Operates
nations
Presid^t.wJ
IpM
* Florida Power & Light Co. (12/11)
13 filed $15,000,000 of first mortgage
Nov.
1986.
bdhdsvdue
bank loans and for Construc¬
Proceeds—To repay
tion program.
Underwriter—To be
determinedly Com¬
petitive bidding.
Probable bidders: Halsey, Stiip'rt & Co.
Inc.; Merrill Lynch, Pierce, Fenner & Beane anjd Kidder,
Peabody & Co. (jointly); The First Boston Corp;; Bflyth
&
Co., Inc.; White, Weld & Co.; Lehman Brothers. jBids
—Tentatively expected to be received up to F|;30 "a.m.
Dec.
on
11.
.
Freiberg Mahogany Co.
11 filed $2,000,000 of subordinated deberiflfrefc due
Oct.
1971 and
450,000 shares of
which
of
are
common
stock
(par 10 cents),
$1,500,000 of debentures and all of the stock
publicly in units of $500 of debentures
stock; the remaining $500,000 of deben¬
to be offered
and 150 shares of
tures
about
sold
be
to
75%
Price—To
of
to
Texas
Industries, Inc., whijgh owns
Freiberg's outstanding commop stock.
be supplied by
amendment.
Proceeds^—From
25,000 units
and
22
shares
of stock;
per
and
per
(Bids
Office
2
ISSUE
Home
Oct.
(Offering
corporation and Tower Construction
share. Proceeds—For working
Co.
Price—$1
underv.riiing)
American
19
Oct.
Aug.
stock
23
Carrison,
Wulburn,
Inc.)
scares
Oct.
on
24,
in
23.]
CALENDAR
Power
&
Light
(Bids
(A.
Edwards
G.
Sons
&
United Cuban
and
Dempsey-Tegeler
Conimon
&
Co., Incorporated,
(S.
Fuller
D.
(Offering
to
Co.)
$975,000
$1,250,030
I
and
24,000
shares
of
the
held.
(Bids
11:j0
stock
(Cruttenden
&
EST)
(Bids
The
First
Trust
Corp.)
Co.
Arizona
(The
Public
Service
First Boston Corp.
National
$4,648,320
(Salomon
11
Public
&
Co.;
Inc.).
Anheuser-Busch,
(Lee
Pierce,
written
by
Allen & Co.
shares
(Hamlin
&
Straus,
Lunt;
Blosser
of loreinost Dairies, Inc.—under¬
Dean, Witter & Co.) 630,000 Shares
&
Co.;
Cowen
McDowell)
about
&
Co.;
29
Peabody
&
Co.)
Brothers)
(Bias
to
be
invitea)
-•
to
V
cf-rkh^''—0 —■■,--,orwritten
Brothers)
$30,154,700
Common
1,000,000
shares
Equip. Trust Ctfs.
invited)
10
$8,055,000
"
(Monday)
Preferred
&
Co.)
Co.
Inc.)
$2o0,000
11
Debentures
$40,000,000
by£
*
ratio
•
of
one
new
share
for
each
seven
shares
Horton Aircraft
Corp., Las Vegas, Nev.
common stock (no par).
by amendment (maximum price
to be $25 per share). Proceeds—To William E. Horton,
President of the company, who is the selling stockholder.
Underwriter—None.
Offering—Postponed indefinitely.
18
filed 100,000 shares of
to
oc
Preferred
invitea)
$6,000,000
Light Co.__
11:30
to
a.m.
EST)
Bonds
$20,000,000
Equip. Trust Ctfs.
be
received)
$9,000,000
Imperial Oil, Ltd., Toronto, Canada (11/16)
18 filed 1,504,271 shares of no par value capital
stock, to be offered for subscription by stockholders of
Nov. 13, 1956 on the basis of one new share for
shares held; rights to expire on Dec. 4, 1956.
Standard Oil Co. (New Jersey), which owns 69.64% of
record
20
the outstanding Imperial stock is said to have indicated
that it intends to subscribe to its portion of the offering.
Price—$44
share.
per
expansion.
Proceeds—For
capital
C.
Sept. 28 filed $1,000,000 of time certificates, series B, C
and D. Price—At 100% of principal amount. Proceeds—
For working capital.
Underwriter—Johnston, Lemon &
Co., Washington, D. C.
•
Supply Co. of New York
4,256.6 shares of capital
stock (no par) to be offered for subscription by stock¬
Oct.
31
(letter of notification)
one
held.
share.
Price—$17
per
new
share for each five shares
Proceeds
—
For expansion,
and to pur¬
chase equipment. Office—634 Prospect Place,
N. Y. Underwriter—None.
Brooklyn,
Investment Corp. of Florida
Aug. 24 filed $515,000 of $60 cumulative preferred stock
to be offered in units of $1,000 each and 5,150 shares of
common stock to be offered to purchasers of preferred
stock at 10 cents per share at rate of ten shares for
each preferred share bought, Proceeds—For working
capital.
Office—Fort Lauderdale, Fla.
Underwriter—
None.
(F. L.)
Co.
Oct. 4 filed $3,000,000 of 6% convertible debentures due
Nov. 1, 1966. Price—100% of principal amount. Proceeds
—To pay
short-term loans and for working capital. Un¬
derwriters—McLaughlin, Cryan & Co. and Gearhart &
Otis, Inc., both of New York.
Joa Co.
stock
(Monday)
be named)
working
Underwriter—None.
July 27 (letter of notification) 110,000 shares of
Co. of California
to
•
Jacobs
(Tuesday)
Preferred
—For
411
$10,000,000
common
(par 20 cents). Price—$2.50 per share. Proceeds
sales promotions and operating capital.
Office—
No. Scenic
Highway, Lake Wales, Fla. Underwriter
Co., Inc., Palm Beach, Fla.
—Anderson Cook
1957
(Tuesday)
New England Tel. & Tel. Co
(Bids
to
be
January 9,
Northern
invited)
1957
Debentures
$35,000,000
(Wednesday)
Pacific Ry
to
be
Equip. Trust Ctfs.
invited)
about
January 15, 1957
to
be
invited)
to the net
asset value of
8 Vz%
$7,700,000
(Tuesday)
Louisiana Power & Light Co
(Bids
Kerr Income Fund, Inc., Los Angeles, Calif.
July 30 filed 100,000 shares of capital stock (par $1), of
which 9,300 shares will be initially sold at $10.98 per
share. Additional shares will be offered at a price equal
about
Fund, plus
a
sales load of
—
Proceeds—For investment. Invest¬
California Fund Investment Co., of
which John Kerr is also President
Bonds
$20,000,000
Manager
the
of such price.
ment
(Monday)
Debentures
r^mmo"
Lehman
Telephone & Telegraph Co. of Virginia
research and development of new products,
.
Common
"
p\
$8,500,000
Burroughs Corp.
(Offering
t>eane)
;
&
January 8,
(Eids
December 3
&
January 7, 1957
__Equip. Trust <2tfs.
Pennsylvania R. R.
Read
(Bids
Boiids
$7,650,000
$900,000
underwritten
(Thursday)
Kan-ail
(Underwriters
—Class A
(Vickers
C,
&
(Bids
(Thursday)
Eternalite, Inc
6
be
General Telephone
Electricity Commission of New South Wales
Oct. 24,
holders at the rate of
-Debentures
be
Illinois Central RR
aild'.W
<
(Kidder,
Power
$2,400,000 H'H
•
November
$20,000,000
Delaware Power & Light Co
Florida
Preferred
Allen
&
(Paul
(Bids
4'*$$
Corp., Ltd
Spar-Mica
to
(Dillon,
Common
and
EST)
RR
December
Lucky
Stores, Ipc.__
(Offering to stockholders
Bonds
Texas Eastern Transmission Corp
.^Common
328,7z3
on
on
to exceed
International Postal
(Wednesday)
Fenner
December
(Monday)
Corp.)
a.m.
December
Prefbf*fed
Inc.
Higginson
|
People's Finance Corp
$10,000<^jOJ
& Electric Co
26
Debentures
$30,000,000
,
&
November
invited)
Service Electric & Gas Co
Preferred
Blyth. & Co.,
$2,805,000
stockholders—to
to
New York Central
Hutzler; Eastman Dillon, Union Securities
and Wood, Struthers & Co.) $2,500,000
Bros.
Light & Power Co.
International Bank of Washington, D.
by Dillon, Read & Co. Inc.) $28,285,600
V
(Wednesday)
Inc.
($5 per share). Proceeds—To pay
outstanding short-term bank loans. Office—107 Valley
St., Emporia, Va. Underwriter—None.
and
Equip. Trust Ctfs.
Cash Register Co
(Merrill Lynch,
Co
and
Blackstone Valley Gas
be
by
shares
(Tuesday)
EST)
noon
to
(Bids
November 21
610,664
Long Island Lighting Co
Cla*$ A
Lincoln^,apii
of
Co.)
December 5
(Offering
$10,000,000
Transportation Co
Co.;
Wachob-Bender
Common
Stuckncuaers—underwritten
&
by
$10,468,500
1
(Bids
Bonds
a.m
Co.)
December 4
*7*
Brothers
&
Erie R. R.
(Auchincloss, Parker & Redpath and Kidder, Peabodu.,,
&
Co.)
$4,050,000
Texas Power & Light Co
Office-
Price—At par
each
.-Debentures
Michigan Bell Telephone Co
Giant Food Properties, Inc. Debentures & Common
Watson
Winolow, Cohu & Stetson, Inc.)
^
Service, Inc.__Debs. & Class B (5em.
Lynch, Pierce, Fenner & Beane) $1,200,00^7"!!
debentures
Preferred
Libby
Forgan
(Bids
(Tuesday)
plants.
Oct.
stoeKhcnaers—underwritten
Forgan
common
Glore,
Credit Finance
(Merrill
ana
commun
(Offering to
Common
&
Bonds
$10,000,000
Libby, McNeill & Libby__
Z
Co.)
Oil, Inc.-
November 20
Co
EST)
noon
Industries, Inc.--
Pigeon Hole Parking of St. Louis, Inc. Class AUom.
*
other
240,000 shares of common stock (par $1).
share. Proceeds—To certain selling stock¬
1956,
Home
Lodge, Inc., Durango, Colo.
5,000 shares of class A voting common
$1), 295,000 shares of class B non-voting
Libby, McNeill &
$2,399,750
of
McCourtney-Breckenridge
Oct. 25 filed 46,000 shares of capital stock to be offered
for subscription by stockholders of record Nov. 14, 1956
filed
(par
(Blair &
(Monday)
Heritage Life Insurance Co
(Pierce,
Stores,
—
the basis of one share for each eight
1956, and also to employees at a
10% of annual pay; warrants expire
Nov. 17, 1956. Price—$40 per share. Proceeds—For ad¬
ditional
plant facilities and improvements.
Office—
810 Ninth St., Greeley, Colo. Underwriter—None.
per
$1,250,000
1,504,271
construction
per
shares held
Gold Mountain
Glore,
November
To
notification) 6,695 shares of common
(par $25) being offered to stockholders of record
rate not
capital and other corpor¬
Underwriter—None. [This is in addition
the 40,500 units also filed with the SEC
(Friday)
Coqjimon
stockholders—no
to
—
(letter of
stock
company's employees and 110,000 shares to associates of
purposes.
8
—
Properties, Inc. (11/20)
23 filed 250,000 shares of common stock
(par 10
cents) of which 100,000 shares are to be offered to the
public, 40,000 shares are to be offered to certain of the
Eastern
■«S8C
November 16
Price
holders.
Underwriter—Van Alstyne, Noel & Co., New
York; and Johnston, Lemon & Co., Washington, D. C.
Oct.
Dallas
$7,800,000
Imperial Oil, Ltd.--.
filed
Price—$9
Food
.Equip. Trust Ctfs.
EST)
noon
and for
Hartfield
Oct.
shares held.
two
share; to residents of Illinois, $106
Proceeds—To retire bank loans; pay installa¬
share.
cost
each
per
Price—To be supplied
(Thursday)
Chesapeake & Ohio Ry
for
Waterloo, 111. Underwriter
& Co., St. Louis, Mo.
of which
■'£r
15
share
tion
Oct.
November
City 1, N. Y. Under¬
Telephone Co.
stockholders, $102
"
NEW
For working capital.
—
Giant
to
—
(letter of notification) 1,850 shares of common
(par $100) to be offered to stockholders of record
6, 1956 for a period of 30<days on the basis of
rlew
one
Washington, D. C. Underwriters —
Auchincloss, Parker & Redpath, Washington, D. C., and
Kidder, Peabody & Co., New York, N. Y.
ate
Proceeds
Nov.
on
offered publicly and 15,500 units
exchange for properties. Price—$100
unit. Proceeds
To acquire shopping center sites
for working capital and other
general corporate
purposes.
•
Underwriter—None.
26
stock
to be
are
$7,000
(
Oct.
to be issued in
are
one
Corp.
of $100 each).
Harrisonville
Properties,
debentures
Chemical
Office—38-15 30th St., Long Island
writer—None.
%
Inc. (11/20)
Oct. 23 filed $4,050,000 of 5J/2%
sinking fund debentures
due Dec. 1, 1971, and 891,000 shares of common stock
(par 10 cents) to be offered in units of $100 principal
amount of
year-round resort hoteL
Guardian
Paine, Webber,
& Curtis, New York, and
Mitchum, Jones &
Templeton, Los Angeles, Calif., handled previous pre¬
ferred stock financing.
Underwriter—None. Robert E. Evju is
and
Oct. 29 (letter of notification) $250,000 of 6% convertible
debentures due Dec. 1, 1966. Price—At par (indenomi-
Underwriters—To be named later.
Food
v
properties in Cali¬
Office—9201 Wilshire Blvd., Beverly Hills, Calif.
Underwriter—None.
Jackson
Giant
stock
fornia.
-A General Telephone Co. of California (1/7-10)
Nov. 13 filed 500,000 shares of 5% cumulative
preferred
stock (par $20). Price—To be
supplied by amendment.
Proceeds—To repay bank loans and for new construc¬
•
B
1971.
Price—At face amount. Pro¬
ceeds—To buy highly discounted first and second trust
deeds on mortgages on well located
—
it Flakewood Corp., San Francisco, Calif.
Nov. 14 filed 100,000 shares of common stock.^Price—
At par ($10 per share). Proceeds—For
constrq^.tiop of
manufacturing plant and to provide workiri&i capital.
class
ible debentures due
Price—$500 per
working captal. Underwriter
None named.
Offering to be made through selected dealers.
tion.
of
★ Great Pacific Land Co., Inc.
Nov. 5 (letter of notification) $300,000 of 6^% convert¬
$500 of debentures and 40
unit. Proceeds—For expan¬
and
shares
Price—$10,000 per unit. Proceeds—For pur¬
chase of property, remodeling of
present main building,
for new construction and
working capital. Business—
stock, to be offered in units of
sion
Colorado in units of 50 shares of class A
and
2,950
debenture.
;General Credit, Inc., Washington, D. C.
Aug. 17 filed $2,000,000 of 6% subordinated sinking fund
debentures, due Sept. 1, 1971, with detachable warrants
to purchase 160,000 shares of
participating preference
warrants.
Dec.
Continued
on
page
40
40
The Commercial and Financial Chronicle:...
(2104)
Kinney Loan
& Finance Co.
—At
For
Price—To
Corp.,
Underwriter—Wachob-Bender
Omaha
of
it Libby, McNeill & Libby, Chicago, III. (12/3)
"Nov. 9
filed
$10,468,500 of convertible sinking fund
debentures due Dec. 15, 1976, to be offered for subscrip¬
tion
by
stockholders
common
debentures for each 35
at
as
of Nov. 29,
1956;
* Libby, McNeill & Libby, Chicago, III. (12/3)
9 filed 610,664 shares of common stock
(par $7)
for subscription by common stockholders
at the rate of one new share for each six shares held
3Nov.
1956 at the rate of two shares of new stock
for each share held.
Price—To stockholders, $10 per
—For
&
one
-
Proceeds
(11/26-36)
•
Oct. 11 filed 630,000 shares of common stock (par $1.25)
to be offered for subscription
by common stockholders
Dairies, Inc., in, the ratio
.stock held
(with
of
one
shares of Foremost
Lucky.
a
—
Macinar, Inc.
July 23 (letter of notification) 400,000 shares of
steel
writer—C.
and
J.
aluminum
specialty
products,
Montague, Inc., 15 William Street, New
—
* Mason Mortgage Fund, Inc., Washington, D. C.
9 (letter of notification)
$75,500 of 8% mortgage
Nov.
Ohio Power Co.
■fund note certificates.
of $250, $500 and
Price—At par (in denominations
$1,000 each). Proceeds—For purchase
on
Dec. 4.
Co.; Eastman Dillon, Union Securities & Co.
(jointly); Harriman Ripley
Co., Inc. and Stone & Webster Securities Corp. (jointly); Lehman Brothers. Bids—Those received iip to 11
a.m.
(ESf ) on Oct. 30 were rejected.
&
„
Orefieid
Oct.
15 filed
Mining Corp., Montreal, Canada
900,000 shares of capital stock (par $1), of
which *00,COO shares are now outstanding.
supplied by amendment.
Inc.;
tions,
and
vision releases.
for
working capital.
Business—Tele¬
Underwriter—E. L. Aaron & Co., New
York.
Redi-Food Co., Inc.
•
and Salomon Bros. & Hutzler
(12/4)
Sept. 27 filed 220,000 shares of common stock (par $1),
shares are to be offered to public and
20,000 shares (issued to underwriter. Price—$5 per share.
Proceeds—To retire $125,000 of outstanding 15% deben¬
tures as well as a $173,180 debt to Trans-Union Produc¬
(letter of notification) 150,000 shares of common
(par 10 cents). Price—$2 per share. Proceeds—
To purchase plant and equipment.
Office—2505 Butler
Place, New York City. Underwriter—Hopp & Co., Pas¬
saic, N. J.
Kuhn Loeb &
Underwriter—None.
to be received
$1 per share. Proceeds—To purchase real property and
mortgage notes. Underwriter—Coombs & Co. of Wash¬
ington, D. C.
*
stock
writer—To be determined by competitive bidding. Prob¬
able bidders: The First Boston Corp.; Blyth & Co., Inc.;
Mortgage & Investment Corp. Office—Meridian Hill
.Studios, Suite 7, 2633 15th St., N, W., Washington, D: C.
-parent, American
Telephone & Telegraph Co. Underwriter—To be detercoLu.yti.i*.ive oidding. Probable bidders: Halsey,
Stuart & Co. Inc.; Morgan
Stanley & Co. Bids—Expected
July 27 (letter of notification) 300,000 shares of common
stock (par 10 cents), of whidi 25,000 shares are to be
reserved for issuance upon exercise of options. Price—
Oct. 8
Sept. 20 filed 60,000 shares of cumulative preferred stock
(par $100). Proceeds—For construction program. Under¬
of individual mortgage notes from the
portfolio of Mason
Offer¬
Of Which 200,000
cent) to be offered in units of one $100 bond and 200 '
shares of stock. Price—$300 per unit. Proceeds — For
construction and operation of amusement pier. Under¬
writer
Paul Korns, a director, of Johnstown, Pa.
Lt. Col. James A. Grazier of Whaleysville and Ocean
City, Md.f is Chairman of the Board.
Under¬
tfov. 13 filed $30,000,000 of debentures due Dec.
1, 1991.
JProceeds—To repay advances from
field, 111.; and Aetna Securities Corp., New York.
ing—Date indefinite.
Pyramid Productions, Inc., New York
City Pier Corp., Berlin, M4.
Oct. 4 filed $2,600,000 of 6% debenture bonds due July
1,
1976, and 4,000,000 shares of common stock (par one
York 17, N. Y.
jk Michigan Bell Telephone Co.
San Juan, Puerto Rico.
Underwriters—Crerie & Co.,
Houston, Texas; Dixon Bretscher Noonan, Inc., Spring¬
Pyramid Development Corp., Washington, D. C.
Ocean
common
and for new Construction. Underwriter
Pierce, Fenner & Beane, New York.
Puerto Rican Jai Alai, Inc.
July 27 filed $1,500,000 of 12-year 6% first mortgage
bonds due 1968, and 300,000 shares of common stock (par
$1) to be offered in units of a $500 bond and 100 shares
of stock. Price—May be $675 per unit. Proceeds — For
construction of fronton and related activities. Office—
fering—Not later than Nov. 29.
stock (par 50 cents). Price—75 cents per share. Proceeds
—-For general corporate purposes. Business — Manufac¬
tures
Wales, Australia
(Electricity Commission of) (11/29)
26 filed $7,500,000 sinking fund bonds. Price—To be
supplied by amendment. Proceeds—To redeem $6,976,000
3y2% sinking fund bonds, of The Sydney County Council
due Jan. 1, 1957, the holders of which may exchange,
same
for the new bonds; and for construction work.
Underwriter—Kidder, Peabody & Co., New York. Of¬
common
21-day standby). Price—To be sup¬
plied by amendment. Proceeds — To Foremost Dairies,
Inc., the selling stockholder. Office
San Leandro,
Calif. Underwriters—Allen &
Co., New Yofk, and Dean
Witter & Co., San Francisco, Calif.
.
repay bank loans
—Merrill Lynch,
New South
Oct.
(12/5)
it Public Service Electric & Gas Co.
Nov. 14 filed 1,000,000 shares of common stock (no par).
Price — To be supplied by amendment. Proceeds—To.
—
made this week.
Foremost
J
shares of class A common stock
(par $2) and 50,000 shares of class B common stock
(par $2). Price—To be supplied by amendment. Proceeds
—To selling stockholders. Office — Little Rock, Ark.
Underwriter
Equitable Securities Corp., Nashville, "
Tenn., and New York, N. Y. Offering — Indefinitely
postponed.
*
surplus. Underwriters—J, H.
Inc., Boston, Mass., and Thornton, Mohr
Farish, Montgomery, Ala. Offering—Expected to be
share. The offer will be de¬
Producing Properties, Inc., Houston, Texas
19 filed 554,928 shares of common stock (par 100)
being offered in exchange for shares of common stock
of San Juan Exploration Co. at rate of 0.46413 of a
share of Producing Properties stock for each San Juan
share. The offer is to expire at 3 p.m. (CST) on Nov.
15, 1956, unless extended.
Nov. 15,1955 filed 50,000
Proceeds
common
clared effective if at least 85% of the latter shares hava
been deposited for exchange by Nov. 30. Statement ef¬
•
National Old Line Insurance Co.
share for
Pocahontas
:
Oct.
America, Mitchell, S. Dak.
Sept. 21 filed 86,784.7 shares of common stock (par $5)
to be offered for subscription by each of the company's
23,279 policyholders on and as of July 31,1956 at the rate
of 1 Vz shares of such stock and the balance of the shares
to be exchangeable for Founders certificates and cou¬
pons issued by National Life as a part or feature of
certain life insurance policies.
Price—$7.56 per share.
Proceeds—For working capital and other coiporate pur¬
poses.
Underwriter—None.
oversubscription privi¬
each
Co., both of St. Louis, Mo.
fective Oct. 23.
National Life of
—To increase capital and
•of
Pittsburgh Consolidation Coal Co.
v '
Oct. 3 filed 2,678,697 shares of common stock (par $1)
being offered in exchange for common stock of Pocahon¬
tas Fuel Co. on the basis of 2% shares of Pittsburgh for
Dillon, Read & Co. Inc., New York.
Coddard & Co.,
•Stores share for each 12 V2
Underwriters—A. G. Edwards & Sons
and Dempsey-Tegeler &
held; rights to expire on Dec. 19, 1956. Price—At par.
Proceeds—For working capital to finance company's ex¬
11
Lucky Stores, Inc.
mechanical device.
panding volume of sales and the consequent increase in
customers' accounts receivable, and to carry increased
inventories; also for improvement and replacement of
plant and other production facilities.
Underwriter-
Loyal American Life Insurance Co., Inc.
Sept. 28 filed 230,000 shares of common stock (par $1)
to be offered for subscription by common stockholders
*
—
by common stockholders of record Dec. 4, 1956 at the *
rate of $100 of debentures for each 25 shares of stock
Angeles Drug Co.
filed $500,000 of 6% convertible subordinated
debentures due Aug. 1, 1971. Price—At par (indenominations of $500 and $1,000 each). Proceeds—For equip¬
ment, inventory and working capital.
Underwriter—
Quincy Cass Associates, Los Angeles, Calif.
&
19
^ National Cash Register Co. (12/5)
$28,285,600 convertible subordinated deben¬
tures due Dec. 15, 1981, to be offered for subscription
Los
lege)^ Price—To be supplied by amendment.
Pigeon Hole Parking of St. Louis, Inc. (11/19)
Oct. 29 filed 300,000 shares of class A common stock (par
25 cents).
Price—To be supplied by amendment (pro¬
posed maximum offering price-is $3.25 per share). Pro¬
ceeds
To
construct and operate two multi-level
automobile
parking structures, utilizing a patented
,
;
/
Nov. 9 filed
Ohio. Underwriter—None.
new
/•■■://
Moines, Iowa. Underwriter—T. C. Henderson & Co.,
Inc., Des Moines, Iowa.
,
one
.
supplied by amendment.
Des
^rights to expire Jan. 2, 1957. Price—$25 per share. Pro¬
ceeds—To reimburse company for additions to property
in Ohio and for other corporate purposes. Office-.—203
an
Price—To be
For
By-Products, Inc.
(letter of notification) 2,000 shares of common
(par $1). Price—$5 per share. Proceeds—To pay
Federal estate taxes. Office—600 Bankers 1 rust Bldg.,
4,994 shares of common
.stock (no par) being offered to stockholders on the
Uasis of one share for each 20 shares of record Sept. 24;
(with
.
stock
Lorain Telephone Co.
1 (letter of notification)
15, 1956 at the rate of
;
National
June
Oct.
of record Oct.
—
Gregory & Sons.
Long Island Lighting Co. (12/5)
Nov. 7 filed $20,000,000 of first mortgage bonds, series I,
due Dec. 1, 1996.
Proceeds—To repay bank loans and
for construction program. Underwriter — To be deter¬
mined by competitive bidding. Probable bidders: Halsey,
-Stuart & Co. Inc.; W. C. Langley & Co.; Blyth & Co., Inc.
and The First Boston Corp. (jointly); Blair & Co. Incor¬
porated and Baxter, Williams & Co. (jointly); Smith,
Barney & Co. Bids—Expected to be received up to 11
a.m. (EST) on Dec. 5.
each three shares held
'
t
general" corporate purposes.
Under¬
writers—Mohawk Valley Investing Co.; Allen & Co., and
Co., Inc., Dallas, Tex.
Oct.
to expire on Nov. 20. Price—$21
Proceeds—To reduce bank loans. Underwriter
convertible notes.
supplied by amendment. Proceeds
general corporate purposes. Underwriter—Perkins
West Ninth St., Lorain,
Pennsylvania & Southern Gas Co.
Oct: 29 (letter of notification) $300,000 of 6% deben¬
tures due Nov. 1, 1976 (each $1,000 unit having attached
a
warrant to purchase 20 shares of common stock at
$12 per share). Price—At principal amount. Proceeds—
To repay existing loans and notes outstanding and for
working capital. Office—1420 Walnut St., Philadelphia,
Pa.
Underwriter—Lewis C. Dick Co., also of Phila¬
delphia.
i:y'C '■■■
>•
t' ■■
Ithaca, N. Y.
Oct. 26 filed $794,000 of 5%%■ convertible subordinated
debentures due Aug. 1, 1966, of which $100,000 principal
amount will be offered in exchange for outstanding 6%
be
.
(par $5) be¬
Mohawk Airlines, Inc.,
share for each six shares
new
Mobile, Ala.
shares held; rights
10
per share.
—None.
Ling Electronics, Inc., Los Angeles, Calif.
5 filed 183,333 shares of common stock
(par 50
cents) to be offered for subscription by common stock¬
Price—To
8 (letter of notification) 11,500 shares of common
(no par). Price—$25 per share. Proceeds — For
general corporate purposes. Office ■— 1310 Gulf States
Bldg., 109 North Akard St, Dallas, Tex. Underwriter—
Newborg & Co., New York.
/
"
Nov.
holders at the rate of
Service Corp.,
Peerless Life Insurance Co.
Oct.
stock
ing offered for subscription by coming stockholders of
record Oct. 30 on the basis of one new share for each
qualified licensed dealers.
field.
Inc., New York
2,500,000 shares
Oct. 11 filed 30,000 shares of common stock
Ling Electronics, Inc., Los Angeles, Calif.
Nov. 5 filed $1,000,000 of 6% convertible debentures due
Dec. 1, 1966.
Price— To be supplied by amendment.
^Proceeds—For general corporate purposes. Underwriter
/
properties. Underwriter—Mineral Projects
Village Road, Madison, N. J.
Mobile Gas
£hare; and to public, $15 per share. Proceeds—For ex¬
pansion and working capital. Underwriter—None. Pub¬
lic offering will be made by employees of the company
-
Equipment Corp. '
of notification) 60,000 Shares of com¬
mon stock (par $1). Price—$5 per share.
Proceeds—For
construction of 250 race ticket machines; for purchase
of 40 machines for issuance of semi-blank race tickets;
and for working capital and general corporate purposes.
Office—527 Madison Avenue, New York 17, N. Y. Un¬
derwriter—WistorR. Smith & Co., 40 East 54th Street,
New York 22, N. Y. //,. ■
(;'/ /";;//,// / //■ /
(letter
24
Aug.
of common stock- (par
Proceeds—To acquire
for $2,400,000 the Chavin lead-zinc-copper-silver mine
located in South Central Peru, and for general corporate
purposes.
Underwriter — Gearhart & Otis, Inc., New
York. Offering—Postponed.
339,600 shares of common stock (no par)
for subscription by stockholders of record
Co., Inc., Dallas, Tex.
writer—Blyth & Co., Inc., San Francisco and New York.
Offering—Expected today (Nov. 15).
/■;■/
Price—$1.50 per share.
cent).
one
Gept. 12,
—Perkins &
preferred stock (no par). Price — To be supplied by
amendment. Proceeds—For construction program. Under¬
filed
22
Lighting Corp,
200,000 shares of cumulative convertible
filed
10
Pari-Mutuel
Minerals,
June
Pacific
Oct.
Projects-Venture E, Ltd., Madison, N. J.
ration of oil
/ Life Insurance Co. of South Carolina
«nd
•
program.
16 filed
Co., Ltd., 55
as of Nov. 29; rights to expire on Dec. 17.
Price—To be
.supplied by amendment. Proceeds — To reduce bank,
loans. Underwriter—Glore, Forgan & Co., New York.
filed
Underwriter—None.
$2,500,000 of participations in limited part¬
nership interests. Proceeds—For acquisition and explo¬
to be offered
15
Nov.
by competitive bidding.
Mineral
Oct.
Michael Tzo-
later.
it Organic Corp. of America
7 (letter of notification) 30,000 shares of common
stock (no par).
Price—$7.50 per share. Proceeds—To
erect a waste plant at McKeesport, Pa. and for work¬
ing capital. Office—247 Fort Pitt Blvd., Pittsburgh, Pa.
Proceeds—For
bids has been set.
for
fprtter—Glore, Forgan & Co., New York.
Oct.
amendment.
Underwriter — To be
Probable bidders:
Halsey, Stuart & Co. Inc.; The First Boston Corp.;
Blyth & Co., Inc.
Bids—Three bids were received on
Aug. 1, all for 4%s, but were turned down. No new date
rights to expire on Dec. 17. Price—To be supplied by
amendment.
Proceeds—To reduce bank loans,
Under-
to be offered
construction
for
and
determined
$100 of
the rate of
shares held
by
Michigan Wisconsin Pipe Line Co.
July 2 filed $25,000,000 of first mortgage pipe line bonds
due 1976.
Proceeds—To pay off short term bank loans
Lincoln, Neb.
and
supplied
general corporate purposes. Office—South Lyon, Mich.
Underwriter—William C. Roney & Co., Detroit, Mich.
par in denominations of $1,000 each.
Proceeds—
working capital. Office — 911 Tenth St., Greeley,
Colo.
be
named
panakis, of Miami, Fla., and Denis Colivas, of Montreal,
Canada, are large stockholders.
Oct. 26 filed
„Sept. 11 (letter of notification) $150,000 of 6% sinking
£und capital debentures, series A, due Sept. 1, 1971. Price
Underwriter—To be
costs.
Michigan Seamless Tube Co.
59,386 shares of common stock (par $5) to
be offered for subscription by common stockholders on
the basis of one new share for each four shares held.
Continued from page 39
Thursday, November 15, 1956
Proceeds
—
Pric<*—Tn be
For
exploration
Re-Mark
Oct.
•
4
Chemical
Co.,
(letter of notification)
Inc.
99,630 shares of class A
cumulative participating preference stock
(par 80 cents)
offered first to common stockholders of record
9; rights to expire on Nov. 21. Price—To stock¬
holders, $1.50 per share; to public, $1.75 per share. Pro¬
ceeds—For completion of a sulphur mill; working capi¬
being
'Nov.
tal, etc.
Office-^-64 N.-E. 73rd St., M'ami, Fla.
writer—Frank L. Edenfield & Co., Miami, Fla.
Under¬
.Volume 184
St.
Number 5586
The Commercial and Financial Chronicle
...
Regis Paper Co.
Southwestern
Oct. 26 filed 750,000 shares of
be offered in exchange for
common
stock
outstanding
pire
share.
common
Dec. 31, 1956, unless extended.
—The First National Bank of
stock
common
will
Exchange Agent
Uranium, Inc., Denver, Colo.
drilling, including geological research and
core
assays; for mining shaft; to exercise purchase of
option agreement on additional properties; lor working
capital and other corporate purposes.
Underwriter —
of
Indiana
to
core
Corp. of Indianapolis,
offering to residents of Indiana.
Sandura
Co.,
in
connection
with
the
Ind., for
merger
Nov.
& Co.,
Paulsboro
'
•
Sierra
received.
one
for
It
was
nine
shares held; rights to expire on Dec. 3.
be supplied by amendment (expected to be
principal amount). Proceeds—For capital ex¬
penditures. Underwriters
Smith, Barney & Co. and
common
Price—To
100%
of
Lynch, Pierce, Fenner & Beane,
City. Offering—Expected this week.
York
both
of
New
Inc.
(11/19-21)
Aug. 29 filed 2,573,625 shares of common stock
cents), of which 2,000,000 shares are to be
a
S.
(11/26-29)
A.
(amendment filed
Corp.
Stevens
(J.
June 28 filed
P.)
offered:
Oct.
16 reducing proposed of¬
Price—$1.25 per share. Pro¬
4
& Co.,
to
being withdrawn
was
be offered to the
Office—Philadelphia, Pa. Underwriter—Mortimer-
poses.
B. Burnside &
Offering—Expected
Inc., Pompano Beach, Fla.
9
filed
offered
ceeds—To construct and operate a
capital.
resort motel and club
property in Broward County, Fla.
Inc.
700,000 shares of capital stock (par $1) to
only to members and employees of the Cali¬
Industries,
key
Inc.
$6,000,000 convertible subordinated de¬
Dec.
1, 1971.
Price—To be supplied by-
due
amendment.
Underwriter—
filed
certain
to
filed
bentures
Proceeds
For
—
expansion
working
and
Underwriter—Lehman Brothers, New York.
Venezuela
Ernest C. Cassill is President and Treasurer.
Fund of California,
150,000 shares of capital stock
(no par) to
employees of the company
and its subsidiaries.
Price—To be supplied by amend¬
ment.
Proceeds—To pay balance of loan incurred m
purchasing said shares from Linden Securities Corp. or*.
Oct. 5, 1956 at $28 per share.
Underwriter—None.
be
S.
8
Co., Inc., New York.
if United States Freight Co.
Nov.
14
be offered
public; and the underwriter will bt-
public. Price—At market prices. Pro¬
working capital and general corporate pur¬
ceeds—For
if U.
Nov.
Conditioning Corp.
for reoffer to the
-
yes¬
*
if Teachers Mutual
Co.,
granted options to acquire the remaining 500,000 shares
Nov.
None.
&
Inc., New York
15 filed
upon
Office—
Fuller
Yprk.
1,598 shares of common stock (par $5) and
800 registered 6% mortgage bonds due March 15, 1972
(of $1,000 principal amount each). Price—At par. Pro¬
Oct.
D.
this week.
Registration statement
15).
Underwriter—S.
600,000 shares of common stock (par JO .
cents), of which 50,000 shares are to be offered to em¬
ployees, distributors and dealers; 50,000 shares, phistany of the unsold portion of the first 50,000 shares, arss
$30,000,000 of debentures due July (1, 1981.
(Nov.
Calif.
United States Air
mortgage bonds and $368,679 of 6% preferred stock of
subsidiaries. Underwriter—Goldman, Sachs & Co.. New
;
(par JP
Sept. 27 filed
'
Price—To be supplied by amendment. Proceeds—To re¬
duce short-term loans, to retire $950,000 of 4%% first
York.
Angeles,
New
(letter of notification) 8888.8 shares of common
(par $1). Price—At market (estimated at $5.62V2
share). Proceeds—To go to Reginald N. Webster,
—
Merrill
J.
United Cuban
Oil,
8
Sun Castle,
subscription by common stockholders of record
Nov. 14, 1956, on the basis of $100 of debentures for each
materials, working capital and other
Office—42 Newark St., Hobokejo,
raw
purposes.
Underwriter—Dennis Securities Corp., Hobokesx
N.
Pro¬
Underwriters—Hamlin & Lunt, Buffalo, N. Y.; Allen &
Co. and Cowen &
Co., both of New York, N.. Y.; and
•
re¬
for
(letter of notification) 150,000 shares of class A,
one cent).
Price—$2 per share. Proceeds--
(par
Los
new
$170,593,900 of convertible
Dec. 1, 1986, to be offered
subordinated debentures due
share.
Corp.
ceeds—For development and exploration costs.
Sinclair Oil Corp.
filed, not to exceed
per
Chemical
fering to 1,000,000 shares).
terday
25
Price—$2
&
equipment,
corporate
N. J.
—
jected.
Oct.
Corp.
Drug
Spar-Mica Corp., Ltd.
per
by com¬
Probable bidders: Halsey, Stuart & Co.
Inc.; Salomon Bros. & Hutzler; Stone & Webster Secu¬
rities Corp. and Dean Witter & Co.
(jointly); Blair & Co.,
Incorporated. Bids—Halsey, Stuart & Co. Inc., on Nov.
bid, the only
For
the selling stockholder.
Office
740 E. National Rd.,
Vandalia, Ohio. Underwriters—Carreau & Co. and W. C.
Langley & Co., both of New York, N. Y.
Underwriter—None.
petitive bidding.
a
Investment
5
stock
stock
$3,000,000 of first mortgage bonds due Nov.
submitted
Nov.
Corp., Anniston, Ala.
★ Standard-Thomson
1, 1986. Proceeds—To repay bank loans and
construction. Underwriter—To be determined
14,
★ Tyrex
publicly and 573,625 shares will be issued in exchange*
for stock of
Compania de Formento Petrolero Ted Jones*,
Nov.
Pacific Power Co.
Oct. 11 filed
,
Secu¬
Straus, Blosser & McDowell, Chicago, 111.
Inc.
(letter of notification) 2,400 shares of common
(par $10). Price—$18.50 per share.
Proceeds—
Ralph T. Friedmann, President. Office—2153 North
St., Milwaukee, Wis.
share. Proceeds—To exercise bpproperties and for general
per
ceeds—For construction costs. Office—Montreal, Canada.
-
6
Third
chase
convertible preferred
(par $5). Price — To be supplied by amendment
(proposed maSdmum offering price is $6 per share). Pro-
stock
To
notes payable; purchase!
factory equipment; purchase of raw materials; pur¬
of land and a
factory building -and for working
capital. Underwriter—None.
of
Oct. 29 filed 400,000 shares of 5%
—
(Ed.)
—For payment of accounts and
(par 25
stock
(par $7.50)
cents) to
of
stock
4*1
selling commission will be allowed
dealers for sales effected by them. Elvin C.
McCary,
Anniston, Ala., is President.
1
•
—
★ Schuster
Allied
of
Manufacturing Co. into Sandura Co., Inc.
Price—$10
per share.
Proceeds
For expansion, equipment and
working capital. Underwriter
Butcher & Sherrerd,
Philadelphia, Pa.
V
common
additional
writer—None, but
(par five
issued
be
of
ceeds—For purchase of stock of Capital and Allied firms
and for purchase of U. S. Government bonds. Under¬
Inc., Philadelphia, Pa.
Oct. 8 filed 150,000 shares of
preferred stock
and 50,000 shares of common stock
shares
Sept. 12 filed 450,635 shares of common stock (par $1),
of which 211,681 shares are to be offered publicly 238,954
shares are to be offered in exchange for the class A
stock of Capital Fire & Casualty Co. and common stock
(letter of notification) 25,000,000 shares of capi¬
tal stock. Price—At
par (10 cents per share).
Proceeds
State Securities
purchase
Scuthwide
Aug. 21
—For
Resources, Inc., Santa Fe, N. M.
1,000.000
corporate purposes.
Underwriter—Southwestern
rities Co., Dallas, Texas.
Ore.
Samson
filed
Price—$5
tions,
ex¬
Portland, P. O. Box 3457,
Portland,
8
cents).
St. Regis
The offer
on
June
(par $5) to
(par $10) of J. Neils Lumber Co. at rate of 2%
shares for each Neils
(2105)
Diamond
Mines,
Inc.,
Miami,
Fla.
Aug. 31 filed 1,500,000 shares of common stock. Price—
Ai par (20 cents per share). Proceeds—-For
exploration,
and mining operations in Venezuela. Underwriter—Co¬
lumbia Securities Co., Inc., of Florida, Miami, Fla.
,
fornia Teachers Association
ic Somerset Investment Co.,
Inc.
(letter of notification) 240,000 shares of common
stock
(par $1).
Price—$1.20 per share.
Proceeds—To
purchase real estate and construct plant building and
facilities
761
and
for
Ackerman
general
Ave.,
corporate
Glen
Rock,
None.
OTice—
purposes.
N.
J.
Underwriter—
For investment.
General
Insurance
which
50,000
shares
are
$10 par
shares
Co., Atlanta,
Ga.
(par $5), of
be offered publicly; 20,714
exchange for 10,357 shares of
to
are
to be offered in
stock of Progressive Fire Insurance Co.;
and 25,000 shares are to be offered to certain other
per¬
sons.
Price—To public, $14.50 per share; and to certain
common
$13
persons,
lanta, Ga.
share.
per
Underwriter
—
The
Proceeds—To
loan.
bank
pay
Robinson-Humphrey
Co.,
Inc.,
At¬
Offering—Date indefinite.
Nov.
7
Telephone Co.
19 filed 679,012 shares
to
oH'^ed for subscription
be
Oct.
1, 1956 at the rate of
shares
share.
of
of
capital stock
share for each eight
2.
Price—$30 per
new
on
Nov.
Proceeds—To pay advances from American Tele¬
phone & Telegraph Co. (approximately $15,800,COO) and
property additions and improvements. Underwriter
for
Oct.
Offering—Delayed indefinitely by
4.
company
on
(See also next paragraph.)
Southern New England
Telephone Co.
^Sept. 19 filed 1,173,696 rights to purchase 146,712 shares
of
capital stock (par $25) to be issued to American
new
Telephone & Telegraph Co., which
21.61%
Co.
Proceeds—To American Telephone & Telegraph Co.
Underwriters—To be determined by competitive bidding.
Frobable bidders:
Putnam
Co.
&
Blyth & Co., Inc.; White, Weld & Co.;
Co.; Chas. W. Scranton & Co., and Cooley &
(jointly); The First Boston Corp.; Salomon Bros. &
Hutzler.
Bids—Had
been
11
(EDT)
Oct.
a.m.
on
expected
10.
(See
to
be received up
also
preceding
to
para¬
Proceeds—To
for
class
B
reimburse
Bldg.,
Canton,
Ohio.
24
Union
filed
Ltd., Toronto,
750,000 shares
Price—64% cents
holders.
Oils
per
share.
of
capital
Canada
stock
Proceeds—To selling stock¬
Underwriter—None.
Southwest
Grease
&
Oil
Price—At
purchase of
new
par
Stock
&
per
share).
common
Proceeds—For
Co.,
St., Wichita 2, Kan.
Inc.,
Brooks
&
Underwriters—
Co.
and
Clinger, Inc., all of Wichita, Kan.
Office
Lathrop,
per
cost
Underwriter—None.
Abilene, Texas
private
by
or
Exchange
the
or
sale.
selling stockholder.
4%
Proceeds—To
Stock
A.
P.
Ex¬
Scott,
Underwriter—None.
Power
&
Light Co.
(11/20)
$7,500,000
filed
Corp., 26 Fed¬
of
convertible
subordinate#,
Sept. 1, 1976. Price—To be supplied by
Proceeds—$243,740 to redeem outstanding
debentures, series
of
ment
secured
A,
due
1960; balance for retire¬
Underwriter—Kidder.
note.
demand
Statement withdrawn.
now plans stock offering
to shareholders.
"Prospective Offerings.")
Peabody & Co., New York.
under
Toronto
Securities
debentures due
Com¬
(Sesr
Western States Natural Gas Co.
Aug. 24 (letter of notification) 500,000 shares of comrivm
stock (par 10 cents). Price—50 cents per share. Proceeds
—For development of oil and gas.
Office—Felt Bldg.,
Salt Lake
Texas
Oct. 16 filed
Underwriter—Us-Can Securities*
City, Utah.
Inc., Jersey City, N. J.
$10,000,000 of first mortgage bonds due 1986.
repay advances and for construction pro¬
be determined by competitive
Wheland Co.,
Proceeds—To
Chattanooga, Tenn.
bidding.
May 23 filed $2,000,000 of convertible subordinated de¬
bentures due June 1, 1976, and 136,000 shares of common
&
stockholder.
Underwriter—To
gram.
Probable bidders: Halsey, Stuart & Co. Inc.;
Kuhn, Loeb & Co., Blyth & Co., Inc., Kidder, Peabody
Co.
and
Merrill
Lynch, Pierce, Fenner & Beane
(jointly); Eastman Dillon, Union Securities & Co. and
Salomon Bros. & Hutzler (jointly); White, Weld &
Co.;
Lehman Brothers, Drexel & Co. and Hemphill, Noyes &
Co. (jointly); The First Boston Corp.
Bids—To be re¬
ceived
up
11:30
to
Rector
a.m.
(EST)
on
Nov. 20 at Room 2033,
St., New York 6, N. Y.
Theatrical
Interests.
the
not less than
fields.
25
Plan,
Inc.,
New
York
City
shares; of class B, expected at par. Pro¬
in theatrical and entertainment
investment
non-diversified
Business—A
ment investment company.
Price
bonds, and for expansion program. Under¬
writers—Hemphill, Noyes & Co., New York; Courts lis
first mortgage
Co.. Atlanta, Ga.: and
30 filed 52,000 shares of class A stocx (par five
cents) and 28,000 shares of class B stock (par five cents).
Price—Of class A. expected at $10 per share in lots of
ceeds—For
account and 61,000 shares for a selling'
—
To be supplied by amendment
company's
Proceeds—Together with proceeds from private sale c2
$1,500,000 4%% first mortgage bonds and $900,000 ci'
3-year unsecured 4V2% notes to a group of banks, wi'i«
be used to retire outstanding series A and series B 5%
ville,
Oqt.
closed-end
manage¬
Offering
Tenn.
Wildcat Mountain
13
if Thermoid
Co.,
Trenton,
N.
Bonus
Plan, together with
J.
stock
ture
to be offered in units of a $400 deben¬
stock. Price — $500 per unhL
(no par)
and
shares of
three
construction
recreation
company's Employees'
80,000 shares of com¬
(par $1) and 22,600 shares of $2.50 cumulative
convertible preferred stock
(par $50), which may be
purchased pursuant to provisions cf the Plan.
Corp.
29
(letter of notification) 380,000 shares of com¬
mon stock
(par 10 cents). Price — 75 cents per share.
Proceeds—For inventory, working capital, etc.
Business
—Electrical heating. Office—26 Avenue B, Newark, N. J.
Underwriter—Eaton & Co., Inc., New York.
Nov. 5
611,550 shares of
Price—30 cents
working capital. Busy¬
Underwriter—None;
per
Inc.
of 20-year sinking fund de¬
be supplied by amend¬
presently outstanding
first mortgage bonds, to repay bank loans and tor ex¬
pansion program.
Business—Meat packing firm. Un¬
derwriters—Smith, Barney & Co.; Glore Forgan & CD.
and Hailgarten & Co., all of New York City. Offering—
28
bentures
ment.
filed
due
$20,000,000
1976.
Proceeds
—
Price—To
To
redeem
Indefinitely postponed.
if Winn-Dixie
Nov.
and
(letter of notification)
& Co.,
Wilson
Aug.
be
Products, Inc., Trinity, Texas
stock (par 10 cents).
and
center.
offering to be made by officers and agents of company.
stock
* Trinity
Corp., Boston, Mass.
filed
Proceeds—For
Underwriter—None.
Equitable Securities Corp., Nas.b—
Temporarily postponed.
$800,000 of 6% subordinated cumulativedebentures due Dec. 1, 1976, and 6,000 shares of common
Aug.
ness—Mountain
Thermoray
equipment and working capital.
—220 W. Waterman
Small-Milburn
($7.50
for
Office—
Inc., Boston, Mass.;
Disney Productions, Burbank, Calif.
24
amendment.
Sept. 25 filed 3,700,000 shares of capital stock (par 25
Price—At market from time to time on the
June
Co.
Sept. 27 (letter of notification) 4(3,000 shares of
Herrick
$1)
affiliates
company.
Underwriter—Venture
Walt
Aug.
cents).
American
mon
(par
$15.66
common,
such
Securities Fund,
St., Boston, Mass.
pany
Texas Calgary Co.,
Thrift
Southern
stock.
and
Nov. 9 filed 2,000 memberships in
graph.)
Aug.
1,550% shares of class A
and 688 shares of class B com¬
(par $1)
share;
of the
outstanding stock of Southern New England Telephone
eral
to be offered to employees of seven
subsidiaries. Price — For class A common,
Renkert
Two
owns
;
Ohio
of
purchase of securities from parent
804
(par $25)
of record
Co.
(par $1)
per
share.
the
by stockholders
one
held; right to expire
—None.
stock
stock
$13.84
Service
(letter of notification)
change
Southern New England
Sept.
■
Venture
Sept. 4 filed 200,000 shares of capital stock (par $>)„
l^iee—Initially at $25 per share. Proceeds—For invest¬
ment.
operating
stock
common
"
★ Telephone
mon
Southern
Office—Los Angeles, Calif. Underwriter
—None. '
common
1
Sept. 24 filed 95,714 shares of
(Southern section) and their
Price—Initially at $7.14 per share, Proceeds—
families.
Oct. 23
8 filed
Stores,
Inc., Jacksonville,
75.000 shares
of common
stock
Fla.
(par $1)
to
by the company to certain of its employees
those of its wholly-owned subsidiaries.
offered
common
share. Proceeds
Continued
on
page
42
42
f
The Commercial and Financial Chronicle
(2106)
Continued jrom page
General Aniline
Sept. 21 it
Associated Truck Lines,
be
Inc.
stockholders.
Boston
will
(Texas)
&
Co.
and
between
bonds.
determined
Shear-
Nov.
13
voted
to
increase
the
1956
the basis of
on
one
share
new
for
each
Chesapeake A Ohio Ry.
Bids
are
12
to
share.
(11/15)
Chicago & Illinois Midland Ry.
Sept. 29 it was announced the I€C has denied an ap¬
plication by this company for an exemption of $9,000,000
'
mortgage bonds from the Commission's bidding
requirements. Proceeds—To retire $7,450,000 of 4%%
unsecured serial notes and to allow the
company to buy
which it
Co.
Inc.,
now
leases.
for this issue.
Underwriter—Halsey,
Delaware Power & Light Co.
(12/11)
Oct. 26 it was announced
company plans to sell 80,000
shares ($8,000,000 of
preferred stock. Proceeds
For
Underwriter
—
To be determined
F04 unpd Co. and
J?'Ripley & Co->
&
Inc. (jointly); Kuhn,
Ladenburg, Thalmann & Co. (jointly);
Lynch,
Pierce,
Fenner
&
Beane;
Lehman
Brothers; W.C. Langley & Co. and Eastman Dillon,
Union Securities & Co. (jointly);
Blyth & Co., Inc., and
★ Erie RR. (12/4)
it
Spring
of
to
Inc.; Salomon Bros.
noon
in annual installments in
bidders: Halsey, Stuart & Co.
of
one
1987.
capital
new•»share
Hutzler.
by
Flair Records Co.
vote on
•
■Adg. 28 stockholders
voted
name
to
increase the
authorized
Indebtedness from $35,000,000. to
$60,000,000 and ..to in¬
,
$25,000,000 of debt securities and an
1958. Proceeds — To finance
Underwriter—To, be determined
1957,
r
,
.
Machpld, President, announced that th6 J
plans to sell in the near future $50,000,000 of
The stockholders on Dec. 4 will
>
approving this issue. Proceeds—For construction *
Inc.; The First Boston Corp.; Morgan Stanley & Co.;
Kuhn, Loeb & Co. and Eastman Dillon, Union Securities
& Co. (jointly).
T
if North Jersey Trust Co., Ridgewood, N. J.
-
J
offered to its stockholders of record
Nov. 8, 1956 the right to subscribe on or before Dec. 3
for 24,000 additional shares of capital stock (par $12.50)
at the rate of two new shares for each three shares held.
;
Proceeds—To increase capital and
surplus accounts. Underwriters—-Kidder, Peabody & Co.;
Adams & Hinckley; and Rippel & Co.
1
*
Nov.
-
4
15
company
;
Price—$26 per share.
stockholders"
to
each
10
shares
on
held
as
the
of
'*•
England Electric System
during 1956. This would be followed by a $20,000,000 first mortgage bond issue by the resultant'company,-the
of which has not as yet been determined. Under- . •
writer. —May,.be determinedby competitive biddings
Probable bidders: Halsey, Stuart & Co. Inc:y Khhh* Loeb t
i
v
the
program. Underwriter—May be determined by competi¬
tive bidding.
Probable bidders: Halsey,- Stuart & Co.
Inc., New YOrk.
Stores, Inc.
Electric, & Gas Corp.
announced company plans to sell in
Northern Natural Ga^ Co.
stock
for
was
Oct. 17, Earle J.
Co., Lowell Elec¬
tric Light Corp., Lawrence Electric Co., Haverhill Electric
Co. and Amesbury Electric Light Co.» Into one
company
Food Fair
-
(12/6)
RR.
Central
convertible debentures.
reported company plans to issue and sell
to residents of New York State
50,000 shares of common
stock. Price
$2 per share.
Underwriter—Foster-Mann,
•
^
competitive bidding. Probable bidders: Halsey; Stu<- /•
Inc.; Kuhn, Loeb & Co.; Blyth & Co. Inc. ang
company
Jan. 3, 1956, it was announced company
plans to merge
its subsidiaries, Essex County Electric
was
I
;
will be received by the company on
-
Price—$50 per share.- Proceeds-^-To in¬
capital and surplus accounts. Underwriter—Merrill, Turben & Co., Inc., Cleveland, O.
New
mort-
Niagara Mohawk Power Corp. ^
crease
Co., Chicago,
announced that this
Smith, Barney & Co. (jointly); The First Boston Corp. v
and*Glofe, Forgan & Co. (jointly); Harriman Ripley & \y
Co. dLnui; Kidder, Peabody & Co. and Salomon Bros. &
Hutzler (jointly), v
:
/
July 19 it was reported company plans to finance Its
1956 construction program
(costing about $40*000,000)
through issuance of debentures and treasury funds in
latter-part of year. Underwriter—^Probably Blyth & Co.,
Inc.
/
^ f
^
a.
ji.
^Northern Pacific Ry., (1/9)
Bids
are
expected
Jan. 9, 1956/ for the
to be| received by
Stuart & Co. Inc.;
pany
18,
company
on
Probable bidders: Halsey,
Salomon Bros. & Hutzler.
Offshore Gathering Corp.,
Nov.
-•
this
purchase from it of about $7,700,000
equipment trust certificates.
10 shares held.
race—$5 per share. Business—Producers of fresh
orange
juice. Underwriter—Burton J. Vincent &
L\
art -& Cb.
to
its
stockholders of record Oct. 24, 1956 the right to subscribe
on or before Dec: 3-for
100,000 additional shares of capi¬
tal stock (par $16) on the basis of-one new share for each
was
;
•••
additional $20,000,000 in
announced bank is offering 263,400 addiof
;'
construction program.
National City Bank of Cleveland, Ohio
Nov.
5
it
was
announced
Bank, is
offering
reported that this company (a consolida¬
tion. of Vita-Fresh
Corp. and John H. King & Co.)- plans
early registration of 100,000 shares of common
stock,
Aug. 13 it
was
\
Incorporated; The. First Boston Corp.;
Co.
New York State
1, 1956; rights to expire on Nov. 21. Price—$52
per share.
Proceeds—For capital and surplus account.
Underwriter—Morgan Stanley & Co., New York.
Eversweet, Inc.
Oct. 15 it
basis
it
shares
■
Dec. 6 for the ?;
purchase from it of $8,055,000 equipment trust certificates dated Jan. 1, 1957 and to mature annually from
Jan. 1, 1958 to 1972, inclusive. Probable bidders: Halsey, ;j
Stuart & Co. Inc.; Salomon Bros. & Hutzler.
Nov.
mature
&
1
tional
I
(EST) on
$2,805,000 equipment
Probable
years.
&
York
N6w
National Bank of Detroit
'
■
^
Bids will be received by
company up to
Dec. 4 for the purchase from it
of
certificates
«r\
Co.Blair
Oct. 24
Nov.
i
,
Eqqjtabde Securities Corp. and Eastman Dillon,'Union
Securities & Co. (jointly); Kuhn, Loeb A Co. and A. C? v
Allyn & Co. Inc. (jointly); Kidder, Peabody & Co. and ■
Stohe*-& Webster Securities Corp.
(jointly); Lehman \
Brothers. Offering—Expected in March, 1957.
bonds in the next 16 months.
11.
__
.
abl^bidders: Halsey, Stuart & Co. Inc.; White, Weld &
or early in
1957.
Company presently plans to issue and sell $22,000,000 of
(jointly). Registration—Planned
Bids—Expected to be received on
1
plans to issue and sell $6,000,000 of first
con^iany
pected to be received until December
The First Boston Corp.
for about Nov. 14.
'■■■•■
gage.bonds. Proceeds—^For construction program. .Underwriter—To be determined by competitive bidding. Prob-
,
Co.: Blyth & Co., Inc.; Kidder, Peabody & Co. and Drexel
& Co. (jointly); The First Boston
Corp. Bids—Not ex¬
Merrill
•
Service, Inc.
★ New Orleans Public
was
bonds due
'■
Co.
Nort; Edgar H. Dixon, President,
& Hutzler.
writer—To be determined by competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co. Inc.;
White, Weld &
Loeb
l»to-15
mines.
sale of
by competitive bidding. Probable bidders:
White, Weld
& Co; and Shields & Co.
(jointly); Kidder, Peabody &
trust
ore
Metropolitan Edison Co, v.
July 2 it was reported that company is considering the
$10,000,000 first mortgage bonds due 1986. Under-
—
construction program.
".
plants and iron
'
Light Co. :
Union Securities & Co. and White, Weld *
(jointly); Equitable Securities. Corp.; The First V
Boston Corp.; Merrill Lynch, Pierce* Fenner & Beane. •
&
RR.
—
•
Dec.
power
'
*
Eastman Dillon,
be
May Department Stores Co.
July 19 it was announced that this company may under¬
take financing for one or more real estate companies
Proceeds
For development of branch stores and regional shopping centers. Underwriters—Goldman, Sachs
& Co. and Lehman Brothers, New York.
be included among the bidders
may
To
—
Proceeds—For reduction of
Underwriter—To
Probable bidders:
Halsey, Stuart & Co. Inc.; Equitable Securities Corp. and
Eastman Dillon, Union Securities & Co. (jointly); Kuhn,
Loeb & Co.; Blyth & Co., Inc.; Merrill Lynch, Pierce,
Fenner & Beane, Kidder, Peabody & Co. and Harriman
Ripley & Co. Inc. (jointly); Salomon Bros. & Hutzler;
The First Boston Corp., and Glore, Forgan & Co. (joints
ly);; White, Weld & Co. and Shields & Co. (jointly). Bids
—Expected to be received about Jan. 15, 1957.
of first
cars
Proceeds
bank loans and construction program.
be determined by .competitive bidding.
,
Stuart &
market conditions.
Bidl
mortgage
noon
Hutzler.
299 box
ap¬
Louisiana Power & Light Co. (1/15)
Oct. 4 it was reported that the company plans the issu¬
ance and sale of between $18,000,000 and $20,000,000 first
shares
per
on
Probable bidders:
competitive bidding.
by
8,4957.
$8,000,000 of first mortgage bonds. Underwriter—
To
be
determined
by competitive bidding. Probable
bidders: Halsey, Stuart & Co. Inc.; Kidder, Peabody &
Co.; The First Boston Corp.; White, Weld & Co.; East¬
man
Dillon, Union Securities & Co., Salomon Bros. &
Hutzler and Merrill Lynch, Pierce, Fenner & Beane
(jointly).
by the company
in
(EST) on Nov. 15 for the
purchase from it of $7,*800,000 of equipment trust cer¬
tificates due annually Oct. 23,
1957-1971, inclusive. Prob¬
able bidders: Halsey, Stuart &
Co.; Salomon Bros. &
up
been
sell
expected to be received
Cleveland, Ohio,
has
Jersey Central Power & Light Co.
Sept. 12, it was announced company plans to issue and
Underwriter—The First Boston Corp., New York.
•
Co.
&
Bloomington, 111.
authorized
Dec. 3. Price—$47
on
Freres
Casualty Co.
reported company plans to issue and sell
75,000 additional shares of common stock. Underwriter
—White & Co., St. Louis, Mo.
Offices — Chicago and
Sept. 26 it
capital stock (par $12.50) from 12,000,000 shares to 13,000,000 shares, the additional 1,000,000 shares being of¬
fered for subscription by stockholders of record Nov.
15,
held; rights to expire
Lazard
■*
debentures.
Sepic-12 it was announced company plans to issue and
sell .$5,000,000 of first mortgage bonds.
Underwriter^To ,be
determined^ by competitive bidding. Probable ; i
bidddfk? Halsey, Stuart & Co.; Kuhn, Loeb & Co., Leh- ,
man Brothers and
Salomon Bros. & Hutzler (jointly);.
Interstate Fire &
by
Manhattan Bank, New York
stockholders
depend
Salomon Bros.
competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Kuhn, Loeb & Co. and A. C. Allyn & Co. Inc. (jointly);
W. C. Langley & Co. and The First Boston Corp. (joint¬
ly); Equitable Securities Corp.; Blyth & Co., Inc.; Kid¬
der, Peabody & Co. and Merrill Lynch, Pierce, Fenner
& Beane (jointly).
Offering—Expected in 1957.
A Chase
,
}
announced that the company plans to issue
was
New Jersey Power &
(12/11) i
Bids are expected to be received by the company on
Dec. 11 for the purchase from it of $9,000,000
equipment
trust certificates to mature in-15 equal annual mstalments.
Probable bidders:
Halsey, Stuart & Co. -Inc.;
reported company plans to issue and sell
$15,000,000 and $20,000,000 of first mortgage
be
and
Illinois Central
was
Underwriter—To
Corp.
mines, coking plants,
Carolina Power & Light Co.
15 it
—
Proceeds—
repay temporary borrowings. Underwriter — To be
Jam
loaned to firms in the Community for expansion of coal
Hammill & Co., both of New York.
Oct.
company now plans to issue ^
first mortgage bonds early in
To be determined by competi- .
Halsey*; Stuart & Co. Inc.; The First Boston Corp.; Morgan~Stanley & Co. Bids — Expected to be received on
pointed to study the possibility of a loan to be issued
the American market.
The time, amount and terms
that early
Underwriters—Shields
of
$35,000,000 of 29-year
determined
on
registration is ex¬
pected of approximately 200,000 shares of common stock
of this company, formerly Upham Gas Co. Price—Ex¬
pected to be about $5 per share. Proceeds—To selling
son,
Underwriters
Octririt
High Authority of the European Coal and Steel
Community, Luxembourg
July 9 this Authority announced that an American bank¬
ing group consisting of Kuhn, Loeb & Co., The First
Stock to be sold in Colorado.
reported
was
$10,000,000
ancf sell
To
*.-■
Acceptance Corp., Boulder, Colo.
July 16 it was announced company plans to offer and
sell 3,000,000 shares of its common stock. Price—At par
($6 per share). Proceeds—To construct hotel; set up in¬
stalment loan company; -and. for working capital and
general corporate purposes. Underwriter—Allen Invest¬
it
1957r
Utilities Corp.
Power Co.
announced
was
A.
12,
New York.
★ Brazos River Gas Co.
3-Tt
and sSH
a
15% participation with American Telephone & Tele¬
graph Co. in a proposed $36,700,000 California-to-Hawaii
cable and, if approved by the directors on Aug. 16, will
be probably be financed by a debenture issue. Hawaiian
Telephone Co.'s investment will be approximately $5,500,000. Underwriter—Probably Kidder, Peabody & Co.,
Boulder
12
New-England
Jan.
.
until January.
Nov.
Lehman Brothers; The First Boston Corp.; Equitable
Securities Corp.; Merrill Lynch, Pie.ce, Fenner & Beane,
Kidder, Peabody & Co. and White, Weld & Co. (jointly).
Offering—Expected in first half of 1957.
& Film Corp.
Probable bidders: Halsey, Stuart & Co.
F. Tegen, President, announced that the ; tive~hi$diHg.
stockholders
are
Inc.riEtuhn, Loeb & Co., Salomon Bros. & Hutzler, Eastgoing to be offered approximately
man|)jllon, Union Securities & Co. and Wood, Struthers
647,000 additional shares of common stock (par $5) early
& Co.
in 1957 on the basis of one new share for each 15 shares
(jointly); Lehman-Brothers; The First Boston
held.
Merrill Lynch, Pierce, Fenner & Beane acted as * Corp.; Equitable Securities Corp.; Merrill Lynch, Pierce,
Feimer & Beane, Kidder, Peabody & Co. and White,
clearing agent in previous offering to stockholders.
^
Weld &/Co. (jointly).
•
'
4
\
v''
Hawaiian Telephone Co.
*/
New England Telephone & Telegraph Co.
(1/8)
July 30 it was announced that company plans to acquire -
in Illinois,
Co., Boulder, Colo.
1956
Co., Salomon Bros. & Hutzler, Eastman Dillon, Union
Securities & Co. and Wood, Struthers & Co. (jointly);
announced that the Attorney General of
General Public
Indiana, Michigan and Ohio.
Office—Grand Rapids, Mich. Underwriter—Paine, Web¬
ber, Jackson & Curtis, Boston, Mass., and New York,
N. Y.
Offering—Indefinitely postponed. Probably not
ment
was
.Thursday, November 15,
&
held.
Sept.
announced corporation plans to
routes
5,000,000
States, following reclassification of the shares
Of this corporation, plans to sell certain of the vested
2,983,576 shares of new class B stock which will then
issue and
$1,000,000 of 6% convertible subordinated debentures
due Oct. 1,1971 at par and 75,000 shares of common stock
(par $3) at $11 per share (the latter for the account
of selling stockholders). Proceeds—From sale of deben¬
tures, for expansion and working capital. Business—A
short haul motor common carrier operating over 3,300
or
from
the United
sell
miles
stock
10,000,000 shares. Underwriter—Eastman Dillon,
Union Securities & Co., New York.
Prospective Offerings
was
common
shares to
Appalachian Electric Power Co.
May 31 it was announced company plans to issue and
sell in December $24,000,000 of first mortgage bonds.
Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Union Secu¬
rities Corp. and Kuhn, Loeb & Co. (jointly); The First
Boston Corp.; Harriman Ripley & Co., Inc.
Oct. 11 it
authorized
the
crease
41
..
Houston, Texas
"
1955, David C. Bintliff, Pres.* announced com¬
has filed
Commission
an
for
a
application with the Federal Power
certificate of necessity to build a
off-shore the coast of
*
364-mile submarine gas pipeline
Louisiana from the Sabine
tne Stale or
Mississippi,
River to the Gulf Coast of
it is estimated that thi3 gather¬
ing system; will cost approximately $150,000,000. Type ;
financing has not yet been determined, but tentative
plans call for private sale of first mortgage bonds and /
of
public.-offer of about $40,000,000 of securities (probably ;
notes*,..convertible into preferred stock at, maturi^v. and "
stock). Underwriter—Salomon Bros. & Hutzler, ^
New'York.
'
; V
"
'
;
common-
-
.
Jfolume
184
Number 5586.,.The Commercial
an4 financial Chronicle
Oklahoma Corp., Oklahoma
City, Okla.
July 26 it was announced
company has been authorized
by the Oklahoma
Bell
Securities
in the
Commission
State of Oklahoma
stock
acquire
Business—A
holding
—-None.
Halsey, Stuart & Co. Inc.; Kidder, Peabody & Co. and
White, Weld & Co. (jointly); The First Boston Corp.;
and
seven
arrangements
are
expected
to
be
made
to
bank loans and for construction
program.
To be determined
by competitive
up to $60,000,000 on a
revolving bank loan which will be
through the sale of bonds to
institutional in¬
vestors aswell as the
general public. Proceeds—To
pay,
in
part, for cost of new power
project to cost an esti¬
mated $217,400,000.
reduced
^
V.-.
;
-
Palisades Amusement
Park,
Aug. 21, Irving
;
;'
v
'
"
Oct." 18 it
Fort Lee, N. J.
¬
on
President, announced that
company plans to purchase another
amusement park and
merge the two and then sell stock
to public.
Pan Cuba Oil &
Metals Corp.
Walter E. Seibert,
April 9,
^
■
bLL
file
soon
preparatory to
place
later
&
^
this
year.
;
V sell
Electric
Co.
dend
announced company plans
of first mortgage bonds.
to
Pennsylvania
Bids
are
Nov.
29
RR.
expected
-
(11/29)
to
.I'l
.
?•
Nov. 8 it
.
50,000
'
was
stock
Corp.,
(par $5).
'■
..
..
$61,600,000 of-
declared payable
in
$100
stock
common
in
,
Counties
was
Gas
Co.
of
determined
Sept. 24 it was indicated that the
company next year
i will give consideration
to refunding its
$75,000,000 of
short-term bank loans. After
review, the company will
-V decide the most
appropriate type of long-term borrow¬
ing, whether it be insurance
loans, long-term bank
Pittsburgh Rys. Co.
May 4 it was announced
,
competitive
/.
^•?
and
Oct.
per
share.
.
/.
Kidder,
Stanley & Co.
Peabody
&
Co.
(
.
men, if
But
not
now
the'Insurance
they -seem
side.for
same
a
people.
;
•
on
signed
up
(jointly);
.
| People who make-the/invest-/
ipent market
a business*- particu¬
larly those-engaged:in the under¬
writing and distribution- of cor¬
porate bonds,
sanguine
are
not
especially
at-the moment: L '
weeks.
Three
$50
such
a
-
,r.
■
Service
dicated
f
Canadians Also
Sluggish
•./
indication
of
any
such
ment
bids
for
.
i'
stock (par $2.50)
shares held'
seven
privilege).
Price—$20
per
To retire short-term bank loans and
—
a further
might to purchase until Nov. 30,
additional sh^rSe at $22.
7
it
proposed
announced
was
to finance
company proposes
construction
new
of
pipeline
in
Virginia
to
cost about $3,380,000 from funds generated by
sale of common stock and temporary bank
operations,
borrowings.
Underwriter
The First Boston Corp., New
York; and
Johnston, Lemon & Co., Washington, D. C.
—
Watson Brothers Transportation Co.
(11/20)
5, it was announced public offering of an issue of
619,776 shares of class A common stock (par $1) is
planned. Price—$7.50 per share. Proceeds—To selling
stockholders. Underwriters—-Cruttenden & Co.,
Chicago,
Nov.
111., The First Trust Cq. of Lincoln, Neb.; and WachobBender Corp., Omaha, Neb.
million
of
first
and
re-
are
oniy
ings of
for
,.
4%%
a
•
more
attractive
rates
:
.
Arizona
v
ip sight
Service
ton
„
of
of bonds.
r
^
,
.
.
(Special to The Financial Chronicle)
to
develop-; stitutional
D,
Weston
Wilshire
&
Co.,
Inc.,
*
of
-
Marshall Co.* Adds
*
Thomas
shire
.
v
have
joined the staff
Planning Corporation
England, Inc., 68 Devon¬
**
Street.
'
4
/ With B. C. Morton
....
(Special to The Financial Chronicle)
BOSTON,
Mass.
—
Philip
Z E.
Chew has become associated with
B. C; Morton &
Co.; 131 State St.
Two With King Merritt
(Special to The Financial chronicle)
.
;
(Special to Thx<Financial Chronicle)
New
Boulevard.
was
r
.
24
i. *
BOSTON, Mass. — Walling G.
Kuekan, Robert Louis-and James
9235
Mr. Livingpreviously with Daniel
Freeves & Co.
^
ston
,
of Investors
p.
'BEVERLY HILLS, Calif.—Ber-
iel
Incorporated,
Three With Inv. Planning
..4
^have become connected with Dan-
^
^
,
^
connected with Ea-
'
in-^nar£j Livingston and Maurice Seid
The return proved attractive to
now
Howard,
Federal Street.
R.
,,,
Two With Daniel JVeston
"^
&
Co.'s
offering, of '200,000
preferred
stock
and
Texas Power & Light's $10 million
-
,
undertak-
consequence
Public
I BOSTON, Mass.—Vila M. Stur- /
projected
shares
a
yield of. 4.30 %.
any
Joins Eaton Howard
(Special to Th* Financial Chronicle)
tevant is
corporate
interest
According
occasion
.The
.
to- those who have potential buyers, but was •apparcontact Canadian in¬ enily offset in some degree by the
investment sources, -scale of call prices fixed by the
immediately ahead/ And in'
much the same situation
the absence of such
prevails issuer. //Modest inquiry , greeted
promise the
across the border,
'
'
the offering, judging by prelimguess is that things will phrsue a
,If anything the situation is re¬ in.ary .inquiries.
decidedly
slow -course *. through
garded as a little tighter In some
the balance of the-year. «
u
* * ~
suddenly
common
share for each
new
about to the bone.
Electric
price of 101.257 the
group proceeded to plan for reoffering to the public for an
-
41/4j% offer, which dipped
4.20 basis when cut
loose..
(Special to The Financial Chronicle)
^j
'
Slow
■
.
J Major
respects/
investment
Their
money
market
is
Ahead
-.
»
-
.
drain
receive
any
attention" in
For
on
such
available funds.
the
-
"ahead
Insurance
circles.
i
:
..the
and
*'
Week
r,t
outlets, such
aetually firmer than ours reflect¬
big insurance /companies,
ing the fact that industrial expan¬ corporate offerings has been anypension funds are - looking
-thing but robust over a period of
sion
has
been
at
a
relatively
toward the ;year-end and offer¬
it promises to be even
faster.. pace,
putting
a
heavier weeks,
ings have got to be attraetive to
'more - slender
in
as
while
a
interest
/
it
pension
noted
was
possible to
fund
portfolio
are
companies,
it
was
realizing most attractive.
returns, op
dustries,
"
advances; to such in¬
and^Sfccordingly, / are
,
week
just
CHICAGO, 111.—Camilla Coppin
is
now
affiliated
with
The
Mar-
shall Company, 30 North La Salle
t>ireei-.
/
Walatnn & Cn
waisron OC V^O.
'
(Special to The Financial Chronicle)
'
SPRINGFIELD, Mass.—David R.
Bickford and Lewis I. Steinberg
have become associated with King
Merritt & Co., Inc., Third National
Bank Building.
Now With Gibbs & Co.
(Special t(KThe Financul Chronicle)
,
th;ngS Sl0WeC! d0T
some
potential
walk; and
•rowers
♦
Washington Gas Light Co.
hope of
entered
The
Naturally
things could ;change
although there ris no,
in
-
York's
to
Underwriter—Kuhn,
Offering—Expected by 1958.
oversubscription
an
one
June
Morgan
groups
latest issue Jto slip a ipf100.51
j&it when, freed from syndicate is rate. ~
Consolidated Edison Co; of New /- Fixing
issued, they will be offered
the company now proposes to
stockholders the right to subscribe
giving Day observance is tending
to cut the impending calendar just
the
-
are
stockholders.
in the money market, the Thanks-
been
.funding mortgagebonds put,,up
The effect of this
underlying by Public Service'Electric & Gas
situation, has Iqeen apparent in the Corp. with ' the successful syndimarket for' new issues !inf recerit icate. paying, the company a price
•
.
one
formidable
in other
commitments are a bit less freefooted
everr ; than
the -pension
funds.
common
Some
have
/Perhaps the life companies, be¬ tofore.
not
overly^ burdened with
Public
and
several
announced
was
companies
the
of
one
m.
ing
free cash
it
buyers in the U. S. market here-
to be
is
Disney Publications, Burbank, Calif.
making loans direct.
change.
debentures
Co., New York.
to its
1957,
=
*»
in
would receive
50% owned
Goldman, Sachs & Co. (jointly); Blytlj & Co.,
and
branches
working capital.
Underwriter — None.
However,
Corp., which owns about 17% of the common stock
outstanding, Will subscribe for any stock not taken by
others.
For every share subscribed for
through exer¬
cise of primary and secondary
rights, the stockholders
-
Inc.
two
Atlas
rities &
Inc. and
its
and
for
Probable bidders:
f
2
(with
Halsey, Stuart & Co. Inc.; Eastman, Dillon, Union Secu¬
Co.; Equitable Securities Corp. and Drexel & Co.
(jointly); Lehman Brothers; Harriman Ripley & Co.
■
Public Service Co. of
Colorado
Oct. 8 it was reported
company plans the issue and sale
of $30,000,000 first
mortgage bonds. Proceeds—To repay
I bank loans and for new
construction.
Underwriter—To
be determined by
competitive bidding. Probable bidders:
&
share. Proceeds
Underwriter—May be
by competitive bidding.
!
Humphreys, Jr., Chairman, stated that
common
at the rate of
bidding. Probable bidders;
Coosa River in Alabama.
E.
convertible
for 186,500 additional shares of
California
Proceeds—Together with other funds, to construct
operate a $150,000,000 steam electric
generating plant
the
on
(in
i
Bank
National Bank
debentures
rata to
offer
was announced that this company,
determined
Rys. Co. Price—About $6
'"
—
of
Walt
by Alabama Power Co. and 50% by Georgia Power
Co.,
Standard Gas & Electric
Co. will offer to its
stockholders rights to subscribe: for
540,651.75 shares of Pittsburgh
■
plans to offer to its
65,000 additional shares of capital stock
the basis of one hew share for each 2%
on
29, H.
Loeb
subsidiaries of Southern Co., plans to issue debt securi¬
that
announced
was
convertible
Probably
straight. -deben-
ties.
'■
United States Rubber Co.
pro
Southern Electric Generating Co.
May 18, it
■■■.
possible methods the company has been considering for
raising $50,000,000 to $60,000,000 which may be needed
for plant expansion and
working capital. He added that, if
reported company may in the Fall offer
by
'
>,
held, subject to stockholders' approval on Nov.1
$27.50 per share. Proceeds — To purchase
Price
issuance
com¬
Corp., New-York.
.
it
9
June
Fenner & Beane.
-
■.
Pasadena, effective Dec. 7, 1956.
'
borrowing, convertible debentures or
tures. Underwriter—The First Boston
.;
15.
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.; The First
Boston Corp.; White, Weld &
Co.; Merrill Lynch, Pierce,
"•
Phillips Petroleum Co.
;
1
•
Pasadena-First
$15,000,000 of first mortgage bonds. Underwriter—To be
Under-
v
strtiction program. Underwriters—Lehman Brothers
U; S.) and Nesbitt, Thomson & Co. (in Canada).
snares
Incorporated, New York.
Southern
Jan. 30 it
,
,
•
was announced public
(par $10)
exchange for
—
(12/10-21)
sell, subject
conditions, $40,000,000 of debentures due 1976.
stockholders
ex¬
unpaid
additional
Transmission Corp.
announced plans to issue and
offering is expected late
in..December of $60,000,000 of 30-year debentures and
$30,000,000 of common stock in units. Proceeds—For con-
Nov.
reported that the company plans
longof
Eastern
additional!
by the di¬
additional
expansion.
i United States National Bank of San Diego, Calif.
of deben¬
and
Nov. 1 it
'
value 5% pre¬
par
the basis of
on
1956, in
'
•
.
Proceeds—To redeem preferred stocks and
for expansion
program, etc.
Underwriter
'
.
v
- -
announced
was
common
was
stock.
mon
of
Proceeds—For working capital.
writer—Paul C. Kimball &
Co., Chicago, 111. *<■
.
was
Colo.
;/
reported company plans to issue and: sell
6% cumulative convertible
preferred
"~''
y.
exceeding
financing and/or issuance
Blair & Co.
Denver,
v
*
Ryj--
not
-
Corp., San Antonio, Texas
Trans-Canada Pipe Line, Ltd.
share,*
per
Proceeds—
l-for-14 basis.
a
Underwriter—Dillon, Read &
Proceeds—For expansion program. Underwriter—Dillon,
Read & Co. Inc., New York. *
\
new
Seiberling Rubber Co.
term debt
the
shares
been
stock, series A,
be
People's Finance
(12/10-14)
.
which has
Sept. 10 it
received by the
company on
purchase from it of about
$8,590,000.equipment trust certificates. Probable
bidders: Halsey, r
Stuart & Co. Inc.; Salomon Bros. &
Hutzler.
;^
for
Price—$30
one
each 5% preferred share. The
oifei will expire on Dec.
31,
1956, unless extended. Dealer-Manager — Eastman Dillon, Union Securities & Co., New York.
Exchange Agent
—The Chase Manhattan
Bank, New York.
&
~
;
additional
of
basis
•dividends of $2.50 per preferred share
-
•
offered
company
tures, one-quarter share of
issue and
Lynch, Pierce,
Beane, Eastman billon, Union Securities &
Co. and
White, Weld & Co. (jointly); Equitable Securi¬
ties Corp.; The First
Boston Corp.; Harriman
Ripley &
Co. Inc.; Kuhn, Loeb & Co.
"
"
Louis-San Francisco
5
ferred
Underwriter—
; To be determined by
competitive bidding.
Probable
bidders: Halsey, Stuart & Co.
Inc.; Merrill
Fenner
the
on
it
Texas
50-year income 5% debentures, series A, due Jan.
1, 2006,
154,000 shares of common stock
(no- par), and cash
equivalent to the unpaid portion of the
preferred divi¬
-
was
$6,000,000
capital stock
1
Oct. 9 it
v
offering of 25,000
change for its 616,000 shares of $100
Pennsylvania
Sept. 12 it
new
on
that the 1,000,000
stock, recently authorized
rectors, will provide the company with the
working capital it will require for further
-
oil* gas and mineral
properties in the United
States, Cuba and Canada. Office—120
Broadway, New
York, N. Y.
(
St.
Sept.
registration statement with the
equity offering planned to take
Business—To explore, drill and
an
of
proposed
a
share for each three shares held.
;
•
Oct.
shares of
to market
Proceeds—To increase capital and
surplus."
a
operate
•
(Del.)
Texam Oil
announced stockholders will vote Nov. 14
approving
shares
President, announced that
company will
was
stock
common
Co., New York.
Underwriter—
Probable bid¬
bidding.
Puget Sound National Bank of Tacoma
Rosenthal,
'
shares of
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.; The
First Boston Corp.; Harriman
Ripley & Co. Inc.; Glore,
Forgan :& Co.; Kuhn, Loeb & Co., Salomon Bros. &
Hutzler and Eastman
Dillon, Union Securities & Co.
(jointly). Offering postponed.
borrow
was
For construction program.
July 30 it was reported company may issue and sell about
$30,000,000 first mortgage bonds. Proceeds — To retire
ders:
Service Co.
announced
company plans to issue and
February,or March, 1957, $5,000,000 of first mort¬
gage bonds and to offer to stockholders 292f,000 additional
Public Service Co. of
Indiana, Inc.
Pacific Northwest
Power Co.
Aug. 13 it was reported
company plans to sell about $32,000,000 of common stock to the
organizing companies and
that
it
7
sell in
sub¬
Underwriter
company.
Southwestern Public
Aug.
Blyth & Co., Inc. and Smith, Barney & Co.
(jointly);
Lehman Brothers; Harriman
Ripley & Co. Inc. Bids—
Expected to be received early in 1957. " "
$20,000,000 of its capital
and $10,000,000
($10,000,000 within organization
publicly). Proceeds—To
organize or
sidiaries.
issue
to
43
(2107)
.
still
inclined
to
a
bor-
hold
off
ne^asAb°'ome~cJo0nhnnec?edS'with
Co., Inc., 231 South
Walstori
&*
B.
La Salle
Street.,
with Gibbs &
WORCESTER,
Sharry
has
.
Mass.—Nicholas
become
affiliated
Co., 507 Main St.
-
44
The Commercial and Financial Chronicle
(2108)
Thursday, November 15, 1956
...
Insurance Lower
National's Sales Hit Fidelity Fund
Corporation, dis¬
tributor of shares of mutual funds,
Record $53 Million Assets Now at
First Investors
of its own periodic
payment plans for the accumula¬
tion of shares of Wellington Fund
and Mutual Investment Fund. Inc.,
and
sponsor
V
urities Field
Press S.E.C.
to
the
will
plans
be
reduced
Fight Today
from
cents
60
month
per
per
$1,000, to 50 cents per month per
$1,000.
"rated"
The
cents will be
The
applies not only to
sold
plans
Oct.
after
but to payments made after
plans
en
already
insurance
90
dropped to 75 cents.
reduction
insured
of
cost
Oct. 1
o'clock
ten
that
companies
cover
First Investors Corporation plans
Connecticut
include
Insurance
Company
United
The
General
States
of
Life
NASD
Company
of New
of
It
the
is
official
such
strongly to the proposed changes
so
the Securities and Exchange Commission
time
first
NASD
the
since
was
formed
as
a
quasi-
1938 that it has taken
under the Maloney Act of
agency
five
by
disapproved
are
make and which
of
a
stocks selected
because of
capital
funds
mutual
wants
In
any
under periodic payment
gains
to
an
average
relating the
monthly offering price instead of
to
show
yields
by
shares.
discussion of capital gains, it wants an explanation
Research
It
funds
mutual
wants
funds
of
to
emphasize
the
further
even
charge.
the
over
At the
term.
33.6%
ahead
also
purcnases
of
last
best
despite
the sec¬
history, he
October
On
were,
in
/
York
first
000
near-
months
10
reached
this
of
record
a
year
gain
of
$27,074,000,
of last year
will
cover
economic
the
of
securities salesmen
many important phases
and
securities
and
Mover
Kulp.
Chairman
and
enced
one
of
the
of
commit¬
Wellington's investment
tee
after
the
election—at
the
Hotel Continental in
Kansas City,
the
to
1955, for
or
48%
meeting
on
Thurs¬
million
most
experi¬
in the
country, will discuss the election
results and their impact on the
money
business
managers
outlook
securities
and
ber
Tele virion
Louis,
on
Mo.
Club
the
in
Later
in
St.
month,
Nov. 27 and Nov. 29, Mr.
Kulp
issue
Corp.
the
has
two other
mid-western cities—Nov. 27 in the
vested
Twin Cities of Minneapolis and St.
and
Nov.
29
in
in
Chicago.
a
assets
in
of
in
use,
end
ffmlon
PHILADELPHIA 3, PA.
in¬
elec¬
According
shares
million,
West
France 360,000,
the publication
said.
30,
by Philadelphia Fund in the third
quarter
items
Gas
of
1956
the
to
&
included:
Electric, Burroughs, Dela¬
Light, International
Power &
ware
Petroleum, North American Avia¬
tion, Pennsylvania Salt, Phillips
Petroleum,
A.
O.
Smith,
and
Standard Oil of California.
tions
to
plane,
(Special to The Financial Chronicle)
Motors, Lockheed, National
Sperry
sum,
Steel.
These
Rand
and
items
Exchanges.
Fe,
Corning Glass
& Rubber,
Warner,
Borg
Works,
Firestone Tire
Rochester Gas & Electric.
I. P. C. Sales
October
tors
America ,was
that
of
October,
in October,
first
the
1955.
worth
The
of
10
1955.
months
riod
last
13 cents
D
•"
••
■
»•"'»"
e
>.r
t
■
year.
cents a
OF
through
A prospectus
ATOMIC
relating to the shares of any of these separate
be obtained from authorized dealers or
MUTUAL
VANCE, SANDERS & COMPANY
FUND, INC.
111
DEVONSHIRE STREET
GET THE FACTS AND FREE PROSPECTUS
Atomic
NEW
Development Securities Co., Inc.
1033 THIRTIETH STREET, N. W.. WASHINGTON 7, D. C.
Dept. C
Tel. FEderal
3-1000
61
Broadway
120
South LaSalle Street
FUND
of Boston
CHICAGO
YORK
LOS
2io
ANGELES
West Seventh Street
"A
share¬
Cjeorge
PUTNAM
BOSTON
to
ber 26, 1956.
The
DEVELOPMENT
capital
holders of record Novem¬
Distribution
investment funds may
share lrom
cember 20, 1956
Quarterly
BOSTON
share from in¬
income, and 45
gains, both payable De¬
Woe
ATOMIC SCIENCE
a
{•
Consecutive
Bond Fund
firm
mutual
month, compared
last
$3,254,741
Inves¬
of
Corporation
of
more
than double
$6,731,536
for
volume
sales
Planning
vestment
in
elim¬
inated—Atchison, Topeka & Santa
rust
Canaoa General Fund
invest
Gyp¬
Republic
were
of
with
Sales
1956
LOUIS, Mo. — Jackson P. have totaled $47,117,179, Mr. Ben¬
Bayer has joined th° staff of A. G. edick
stated, up nearly 66% from
Edwards & Sons, 409 North Eighth
the $28,439,236 for the same pe¬
Street, members of the New York
and Midwest Stock
LIMITED
Addi¬
holdings — Boeing Air¬
Dow
Chemical,
General
^Massachusetts Investors Trust
Century Shares I
New
portfolio—American
ST.
Growth Stock Fund
and
Common stock portfolio changes
funds
A. G. Edwards Adds
Massachusetts Investors
of
Sept.
on
June
of
as
sold
Italy 300,000,
Fund
assets
to
Canada with 2.2
1
Germany 500,000,
investment dealer
million
other
leading
England with 6 mil¬
Ru«sia
net
outstanding at the end of
survey,
are
lion
Prospectus from
sponsors
the television and
(Guntries
million.
Management
$132.6
industries.
recent
by
the Television-Elec¬
of Chicago which
fyM:
sets
Up"
corporation
Fund
tronics
Paul
subjects
Shares
The
tronics
the Novem¬
"Keeping
and manages
and Mr. Fox-Martin will speak on
same
of
Ltd.
Portfolio Changes
accounting
nearly 80% of
the total, according to
day, Nov; 15, will be held at the
Athletic
or
Capital
$28,572,242 or $28.57 a share on
1,000,000 shares on Sept. 30, 1955,
to date.
with the United States
39
period of 1955.
same
quarter, compared with $28,or $31.87 a share on 886,-
229
$83,907,in
Incorporated Income Fund sales
for
33
share compared with 30
to
year
245,967
and long-
Missouri
picture.
A.
week
Mo. The second
first
th2
30, 1956 totaled $27,566,059, equal
to $31.27 a share on the 881,454
shares
compared with $56,723,000
the similar 10 months of
meetings, Mil¬
same
year,
income,
for
the
of
York
Canada,
$7,4
with $6,566,000
an increase
of $1,324,000. Mr. Wilkins stated
that Wellington Fund sales in the
last
total
months
-New
compared
October
increase of
an
investment
cents for the
history, A. J. Wilkins, Vice-Presi¬
dent,^ reported. Gross sales' of Wel¬
reached
30,
has over
now
year ago.
the
cents per
for
October
exceeded
$3,000,000
ton Fox-Martin, manager of dealer
and
were
the
largest
for
any
relations for Wellington, will re¬
swing
through
the
West
month since its shares were first
view any of the important devel¬
shortly after the pre-election tours
offered to the public.
of political
candidates, will be opments in the fast-growing mu¬
tual funds industry.
undertaken by officials of the $500
U. S. Has 80%
million
The first of these meetings for
Wellington
Fund
this
More than 50 million television
month.
Coming just one week investment dealers will be held
after the Presidential election, the on Tuesday, Nov.
13 — just one receivers are in use in the world
dealqrs
from
nine
simi¬
lar month in the Fund's 27-year
October
at¬
Sept.
Sept. 25, 1956, a dividend of 11
per share was paid by the
fund
ber were the largest for any
in
a
of
cents
Wellington Fund sales in Octo¬
in
as
30, 1956, was $14.46 com¬
pared with $14.80 as of Dec. 31,
1955, and $14.19 on Sept. 30, 1955.
were
added.
lington
highs
Net asset value per share as of
and,
year
markets,
over
The
1955.
outstanding and
shareholders
Sept.
Mr. Hare reported.
To Tour West
series?of meetings for investment
or
Securities
National
year ago,
October
new
of
Fidelity Fund
52,500 shareholders,
seven
aggregated
ahead
markets
Wellington Executives
J
CFC
tained
$284,428,300 as
Oct. 31, 1956, against $249,042,a
of Sept. 30,
as
number
1956.
the
of
assets
net
in the
Series
a
Established 1 930
your
the
of
managers
the net asset value of $202,-
368,245
A
Corporation
New
Total
Oct. 31
involved.
taxes
(5)
sales
Securities &
New York 5,
It
dividend
(4)
of the
their
National
Broadway,
and
common
relatively high current yield and
reasonable expectance of its con¬
tinuance with regard to tlx- risk
involved. Prospectus and other
information
may
be obtained
from your investment dealer or;
120
income
reinvestment
to calculate
mutual funds
want
the original cost of the
to
diversified group
preferred and
not
and
sponsors
9.7% over the net asset
$217,596,660 on Dec. 31,
and
approximately
17.8%
number of shares
Corpora¬
total
a
of
1955,
over
the Series.
890,000
annual
mutual fund, the primary objec¬
tive of which is to provide an
investment in
investment
(3)
a
of bonds,
It does
plans.
National Income Series
tion,
Research
&
reported
increase of approxi¬
an
bringing
In past performance charts and tables, the SEC does not
the results to show reinvested capital gains, even though
(2)
value
the securities field are:
three-quarters of shareholders do reinvest them.
through
Securities
Fund
assets of $238,581,663 on Sept.
mately
Hare, Vice-President of National
(1)
"1
high of $53,period, compared
the
$49,372,141 for the corre¬
sponding period of 1955, according
to figures released by E.
Wain
uncertain
which the SEC wants to
Fidelity
net
30. This is
record
a
for
.
changes
$238 Million
with
ond
want
Investing for Income
016,811
080
'
serious step.
a
Company
Chicago.
reacted
the matter.
over
Insurance
York, and The
Assurance
has
and
dealers,
fund
that it broke openly with
The
Continental
mutual
funds,
The
Life
Hartford,
this
begin to
shareholders and the
general public. Acting in protest to five of the six changes will
be representatives from the National Association of Securities/
Dealers, Inc.; National Association of Investment Companies; Na¬
tional Association of Securities Administrators; the Association
of Mutual Fund Plan Sponsors; and Arthur Wiesenberger & Co.
mutual
Na¬
first 10 months of 1956
$5.3 million per month
totaled
and
The
force.
in
1,
the
averaged
morning the Securities and Exchange
hold hearings on its proposal to make
six
changes in the Statement of Policy—a set of rules which
governs
the oral, written and visual communication between
At
Commission will
shares of the
of
Securities Series of mutual
funds by long-term investors dur¬
ing
reports that beginning Oct. 1, 1956,
cost of the optional insurance
the
under
Purchases
tional
By ROBERT R. RICH
BALANCED FUND"
Number 5586
Volume 184
The Commercial and Financial Chronicle
...
(2109)
'
"f"
■
according to the fund's quarterly
report to stockholders.
the
During
added
the fund
quarter,
Groceterias convertible
n
k i
n
and
Ventures
Limited
Company
of
Total
above
a
net
dis¬
1955
Sept.
on
30
with,
compared
According to figures released in
and
the
Oct.
31
semi-annual report,
Keystone Fund of Canada demon¬
Canada,
strated
down-side
strength in the
effected
in March-to-September market
de¬
During
this
Companies cline,
period,
the
Industrial
Limited, Class B; Trans Mountain Dow-Jones
Average
Oil Pipe Line Company; Royalite fell off 7.1%, the Toronto Indus011 Company, Limited preferred; tial Average
dropped 3.1%>
and
Powell River Company Limited; the Montreal Industrials slumped
and
Falconbridge Nickel Mines 9.3%, while the fund's asset value
Limited
Sept. 30,
89%;
and
ment
receded only seven cents, or about
of one percent.
'
of
one-half
Ltd.
Oil
of
follows:
as.
Canadian
and
investments
gas
increased
the fund's
1956
invested
were
stocks,
Cobalt
eliminated.
were
assets
Holdings
Copper
of
As
Loblaw
shares.
Kilembe
shares
were
of
holdings
11.8%
from
Govern¬
23.3%
to
the
obligations,
7%;
and
non-Canadian
obliga¬ finance and mining commitments
tions, 4%. Non-Canadian securi¬ were reduced, and new money was
ties, which include Canadian in¬ placed
in
electrical
equipment,
corporated companies having their building and chemicals.
outside
assets:
Canada
of
Total
prised one-third of Sept. 30 hold¬
:
ings.
shareholders
to
months'
a
a
report
The
vast
known
crude
of
reserves
stitute about
These
and
owned
by
the
in
U.
the
of
about
are
S.
The
fund expresses confidence that an
answer to the Suez problem will
are
nies
a
with
in
five
the-Middle
sets
report shows total net
$53,034,973 compared with
$37,147,061 a year ago, an increase
value
set
sity,
on
Sept. 30
compared
with ;
as
$12.68 a year earlier.
recorded
a
Air
months
ended
Sept.
30,
boosted assets
$4,622,220
to
$17.82
or
a
total
share
a
This
with
compares
$3,566,922
to
12-month
$17.38
a
He
have
of
a
and
bond
ten-year
fund
showed
value
an
period,
of
42%, assuming re¬
profits. The
mangement credits this perform¬
the favorable
to
business
prosperity
count bonds of U.
S.
stimulus
on
the
of
dis¬
a
Roe¬
Corp., founded
and
wo¬
was
Industries
for
ap¬
Fund
mated
at
1,970,400
net
shares
asset
Division
net
assets
on
Sept.
30
year
a
to
director
and
Gas
a
and
W.
and
R.
distribution
much
Dec.
on
in
member
committee
Electric
director of
law
firm
Wickershani ' &
Taft,
of
Com¬
Tropical
Cadwalader,
New
York
City, has been elected a director
of
New
York
Capital Fund of
improve
March, 1956.
BIF Assets Now
Total
net
assets
Investment Fund,
its
Company an¬
that the net as¬
common
Common
stock
at
> $64,357,977.
Sept. -30,
1956 is estimated at
released in the; annual $29.99 per share, on the 3,172,752
Keystone High-Grade shares outstanding. The net as¬
Stock Fund, Series S-l, set value on Dec. 31, 1955 was
reveal
that
furjd's
holdings
reduction
in
the -$30.08
per
share
on
2,643,960
banking, shares then outstanding. Its hold¬
insurance and finance fields (from ings
of -American International
14%
to
6.1%) during " the year Corporation,
a
majority-owned
a
in
the
of
contributed
New
being
expected
intro¬
add
to
the
to
in
quarter
invariably
sizable
most
contribu¬
A-M's
earnings for the
Consequently, I expect A-M
year.
1956
vious
to
again surpass
annual
sales
all pre¬
and
earnings
records.
sponge
success.
currently
are
tion
1955.
fourth
I
consider
attractive
able
American-Marietta
shares
common
in
today's
equity market.
shares
of
one
growth
the
equities
most
avail¬
highly selective
These com m o n
actively traded in the
are
Over-the-Counter Market.
sub¬
to earnings.
3b7,198
of
than
more
total of
asset
Sept.
on
of
September
Diversified
the
interior of food and beverage cans.
American-Marietta
end
$9.30—a moder¬
benefit
During the last three months of
lower bond prices, the fund has
added to its bond holdings Ameri¬
demand
and
Telegraph
Company, 3%s, 1990; Champion
Paper and Fibre Company, debs.,
3%s, 1981; Jersey Central Power
fund has added the shares of Inland
Steel
Company
stockholdings.
stock
in
Ohio
common
of
El
Company,
holdings
Columbus
of
and
Paso
5]/2%
common
Southern
Electric Company, Southern
Company, United States
Rubber Company and Texas Gulf
Sulphur Company.
On
Sept.
30,
1956,
the
balanced
were
between
to
31%
and
68.8%
a
year
earlier.
With Palmer, Pollacchi
from
of
been
of
one
fields
into
a
Street.
judicious
which
tration
and
building
to Staff
N.
now
terms
N.
with
Reynolds & Co.
With J. L.
concen¬
con¬
sales,
earnings,
working capital and book value,
1955 witnessed a new high mark
in growth for each of these items.
1956 is showing a continuation of
this
with
trend,
over
last
items
increases
year
in
the
for
Price
J. L. Brady &
each
first
Co.
considerable
a
located
Cannon
with
has
R.
becorpe
Campeau
Building.
F.
Penobscot
connected
Company,
Staff
of
of
amount
the
at
headquarters
continuous flow
a
LeRoy
Mutual
-
of
Samuel
Lead
Busi¬
Hussey—Univer¬
34th
men
positions.
Story of the oil industry—Craig
request—Presi¬
dent,
Gulf
Oil
Corporation,
P. O. Box 1166, Pittsburgh 30,
Pa.
of
more
exceptional
its
10
man¬
businesses.
of
O.
own
other
'
cents.
ization
'
Publications
C.
E.
E.
for
(Organ¬
European Economic
Cooperation) — Bulletin of new
publications—-O. E. E. C. Mission Publication Ofice, 2000 P
N.
Street,
earning record for A-M is
Auto¬
Dollar—Money Manage¬
Institute, Household Fi¬
nance
Corporation, Prudential
Plaza, Chicago 1, 111.
(paper)
ment
executives
acquisition
Your
mobile
important
agement strength that comes from
Management,
Money
everywhere through¬
are constant¬
In addition to the
Street, Philadelphia
Thompson—on
organization
outlined
previously.
They
re¬
sales
the third
quarter and nine months of 1956.
After preferred share dividend re¬
quirements, earnings applicable to
the 3,755,900 common shares were
$2.47 per share, of which $1.03 was
earned during the third quarter.
Earnings per common share for
the
earnings
for
months
nine
$2.01,
5
both
of
1955
were
adjustment for the
stock split.
These
after
recent
for
4
in October of
Sickel are
Distributors,
Inc., 1016 Baltimore Avenue.
York,
Industry Nobody Really Knows—
of
management personnel for future
.
1956.
On
an
annual
basis,
Dragon would
contribute about $4.66 earnings per
pro
KANSAS CITY, Mo.—Laurence
and
New
4, Pa.
provides
earnings do not include any oper¬
ation of Dragon Cement, acquired
Two With Mutual
*with:
White
ness—Miriam
authority vested in
high-calibre executives
provide
and
(Special to The Financial Chronicle)
now
Generations
Wetherill's
nine
ported all-time record high
A.
Rapids National Bank Building.
Peterson
Press,
Y.—$3.50.
Five
of
continuing to reflect the re¬
sults of this aggressive program,
RAPIDS, Mich.—Ro¬
man
Niemczyk is now associated
with Wm. C. Roney & Co,, Grand
.
Worries—
From Merchants to "Colour Men":
various divisions and subsidiaries.
The
Money
sity of Pennsylvania Press. 201
American-Marietta
as
-
in
D.
W.,
Washington
6,
C.
also
Co., 27 Elm Street.
Mich. —Dean
"Labor
Patton and Martha Pat-
ton—Citadel
N.
regis¬
policy
management
through
(Special to The Financial Chronicle)
DETROIT,
—
available,
India,"
From
a
South
The
many
WORCESTER, Mass.—Robert L.
in
.
months.
Gallant has become affiliated;with
Information
bulletins
-Avenue, Rm. 1025, New York 1,
"N. Y.
products
developing the talents of its
Brady Co.
New
and
"Latin American
Legislation"—U. S. De¬
partment- of Labor, Bureau of
Labor
Statistics,
341
Ninth
people, American-Marietta obtains
(Speoial to The Financial Chronicle)
Avenue,
Chile,"
of
responsibilities of
H.—Frank
associated
Edmund
—
Labor
ly being developed to assume the
("Special to The Financial Chronicle)
Labor
Three
"Labor
Freedom
In
To
Fourth
is indicative.
area
out the
is
The
s,
16, N. Y.—$6.50
Foreign
entry
acquisitions in the
on
struction
P re s
(cloth) $10.
J.
Analysis
440
York
are
growth,
CONCORD,
come
pros¬
Whittaker—John Wiley & Sons,
Inc.,
growing at
considerably faster rate than the
numerous
BOSTON, Mass.—Arthur B. Mchas joined the staff of
Palmer, Pollacchi & Co., 84 State
Mitchell
has
progress
Economic
acquisitions. It must, how¬
be noted that the program
ever,
has
its
and
University
Princeton, N.
decentralized
(Special to The Financial Chronicle)
Reynolds Adds
Princeton
and
measure
Residential
Trends
pects—Leo Grebler, David M.
Blank,
and
Louis
Winnick—
,
program is growth in equity
earnings, as well as the pros¬
pects of future dividend growth.
While much of A-M's growth has
resulted from rapid expansion of
existing properties, a substantial
Formation in
Estate:
Real
The ultimate test of any expan¬
these
and
preferred stocks and
in common stocks, compared
Capital
had .exceeded productive
sion
in
bonds
68%
This expansion provided
constructionf of additional
capacity.
tered
32%
the
facilities at several locations where
assets
fund
from
expansion projects it started dur¬
rest of the economy.
investments
shares
Gas
and
cum.,
its
rom
preferred
Natural
to
to
expects
tremendously
ing 1955.
were
of
Net
the
for
f
di¬
one
over
at
increase of approximately 2%
over
the share value 12 months
Eliminated
basic
became
and
a year ago.
ate
Telephone
of
the
1956—a gain
share
was
acquisition
important and
versification
$64.-
were
$6 million
per
obtained
country's major producers of
chemical coatings for lining the
30,
$58,344,803
value
the
Stoner-Mudge, American-Marietta
(Special to The Financial Chronicle)
Express
of
has
its
Through
Inc.
Joins Roney
today
quality
stantially
$64.3 Million
Closed-End News
value
years
standard
household
toward
duced
Canada, Ltd., investment company.
nounced
For
the
today. Continuous research
produce efficient designs and
to
With R. F. Campeau
of
O-Cedar
turer
products
Malcolm L Ruddock, member of
the
1955.
set
for
the
in
and is the leading manufac¬
31, 1955
per share on 1,642,000
shares then outstanding after ad¬
justment
for
the
100% "stock
Grace
ago,
of
has
excellence
$18.47
Gas Company.
$65,780,708, compared with, set
Figures
during
O-Cedar
mops
was
earnings records
established
approach the $3.75
share compared to $2.90
level per
for fiscal
makes
New sales and
outstanding. The
value
emphasizes
The
were
Sept. 30, 1956 is esti¬
$19.67 per share on t^ie
on
still
of 1956 should
improve its industrial
that
common
of
number of years,
a
executive
Adams
Total
report
today
A-M
to
in
of
GRAND
issues.
a
announced
research
activities
related industries.
finishes, heavy duty maintenance
paints and decorative finishes.
Corporation
the net asset value of its
corporations
held by the Fund, and to its posi¬
tion
in
selected Latin-American
were.
the
pany
the
investment of realized
ance
America
However,
31, 1955
1,876,000
member of the advisory
was
American
in share
increase
a
has just been announced
H. Orr, President. Mr.
Co.,
of
.
asset
o^
from
Sears
salesmen
consultant
a
&
B-4.
Fund,
this
B.S.
Vice-President and
director of Standard Oil Company
(New
Jersey).
At the present
time, Mr. Haslam is a director of
Series
Bond
,
a
previously
Haslam
Gas
prior to 1950
Dis¬
During
Petroleum
has some 300 full-time
T.
of
Haslam
Keystone
count
$18.49 per share on
shares then outstanding.
by James
declined nearly 9%
report
Dec.
on
Security I Like Best
diversification
recent years in
The
Williams
pointed
since 1956, according to the latest
annual
degree
with
part-time
Robert
Performances
prices
a
has
was
analyst
ago,
board
government
value
the
for
year
and
share.
term
World
men.
Keystone Funds
Report Portfolio
-
also
and
Boston,
Long
at
was
Public
and
with
Future Planning
Sept. 30, 1955, equal
on
a
Sept. 30, 1956 is esti¬
$18.24 per share on the
asset
stock
The
common
buck.
of
on
period.
total
of
a
Business
of
market
cents per share in capital gains in
preceding
its
Pacific
Cornell.
Sept. 30, last, after payment of 98
the
during
Axelrad is a graduate of
University Graduate
Mr.
M.B.A.
1956,
according to the fund's quarterly
report to shareholders.
The in¬
crease
with the
was
Force
Administration
29.5% increase in net assets in the
12
a
Cornell
I
Fund
been
II.
War
School
Philadelphia
Hamilton
Mr.
S.
U.
as¬
share
per
$13.79
was
The net
also
has
He
analyst for the Celanese Corpora¬
tion.
A graduate of Yale Univer¬
as¬
of
of almost $16;000,000.
subsidiary of United Mer¬
a
years.
buyer for Sears Roebuck Co. and
more
recently
a
development
East.
The
I.
Leonard
chants and Manufacturers Inc. for
invested in compa¬
stake
Corpo¬
today that the
of
.
of the assets of Gas indus¬
71/i%
of
112
eventually be found, but adds that
at the
present time only - about S. A.,
tries Fund
at
mated
can
and
International
value
of the Future Planning Corp.
W. 34th St., mutual funds
and
Light Company, 1st mtge.,
sales organization, were announced
4Vss, 1986; Pacific Telephone and
today by Karl D. Pettit Jr., Pres¬
.Telegraph Company, debs., 4%s,
ident of the recently-established
1988;
and .Procter
and
Gamble
firm.
"...
'v:
Company, debs., 3%s, 1981.
Mr.
Hamilton
was
formerly
During this same period, the
Business Manager
of Sudamtex,
of
"free
-
Lindsay
of
ger,
con¬
one-half
interests.
*
stock
Continued jrom page 2
adjusted ^for
securities
profits distributed to shareholders.
Axelrad, as Assistant Sales Mana¬
three-quarters of the
reserves
world"
oil
reserves
asset
*
earlier,
with,
Vice-President and
as
World" may depend upon
continuing availability of the Treasurer,
Middle East.
30
Progress
appointments
C. Hamilton
"free
the
Sept.
on
year
Personal
six
30,
survival of the
states that the very
assets
"
covering the
ended Sept.
period
net
$10,609,430, compared
ago, $8,852,490.
were
•
Gas Industries Fund, in
American
net
as-
dates.
ration, announced
of
com¬
both
at
45
were
portfolio during this time,
and heavier positions were taken
in utilities, steel and iron. Paper,
corporate
value
set
net
$8,835,236.
ago,
year
subsidiary, is included at net
2,250,600 shares outstanding.
assets
$10,579,495,
were
Limited.
Reductions
8%
were
profits distribution.
Motor Company
Limited, The British
American Oil Company Limited,
Westminister Paper Company,
Steel
(from 3% to
Income payments to share¬
while over-all capital
gained 44 cents during the
period, adding back the realized
Ford
Limited,
steel
17.8%)
value
Canada
The
in
tributions,
shares of Excelsior Life Insurance
Company,
increases
by
machinery
holders
portfolio and through the exercise
of
rights
purchased
additional
-of
in
8.6%).
g
debentures to its investment
fund
'
:
and metals (from 10.2% to
Loblaw
i
s
•
offset
was
September
1956
';
V.
.
forma
common
etta
share of American-Mari¬
issued
Dragon.
in the.acquisition
Earnings for the.full
of
year
Pedestrians, Grow Up and Live
—
Safety pamphlet aimed at adult
pedestrians—Aetna Life Affili¬
ated Companies, Public Educa¬
tion Department,
Hartford,
Conn.
School
Planning
Handbook
—
Building
Engelhardt,
and
N. L.
Englehardt, Jr., and Stan¬
Leggett—F. W. Dodge Cor¬
N. L.
ton
poration,
New
119 West 40th Street,
18, N. Y.—$12.75.
York
Something New: Credit
Hoarding
—Stuqly—Standard Factors Cor¬
poration, 270 Madison Avenue,
New York 16,
N. Y.
•
-
Engineers Work in In¬
dustry — Survey — American
Society of Tool Engineers, 10700
Where Do
Puritan
Detroit
38.-
Mich.
The Commercial and Financial Chronicle..
(2110)
The
Indications of Current
following statistical tabulations
latest week
week
Business Activity
or
Latest
(percent of capacity).
Indicated steel operations
Week
Ago
§2,472j0G0
.Nov. 18
quotations,
cases or
ALUMINUM
(BUREAU
2,394,000
-
,
OF
of that dates
are as
Previous
Month
,
99.2
either for the
are
Latest
V
Ago
/
2,495,000
'*2,463,000
in
or,
Year
101.4
noo.i
production and Other figures for the
cover,
Dates shown in first column
that date,
on
Production of
Equivalent to—
Bteel ingots and castings (net tons)
INSTITUTE:
condensate output—dally
Month
§109.4
Nov. 18
.
Previous
Week
STEEL INSTITUTE:
AND
IRON
AMERICAN
month available.
or
month ended
.Thursday, November 15, 1956
Year-"'
,;'i
Month
*
MINES):
Aeo
g0
.
primary aluminum in the U. S.
(in short tons)—Month of September——
Stocks of aluminum (short tons) end of Sept.
132,316
92406
*
-
47,179
v
130 606
-
36 717
9 898
AMERICAN PETROLEUM
oil
Crude
and
average
AMERICAN
(bbls. of
Nov.
2
6,981,100
Nov.
—Nov.
Kerosene output <bbls.)_J
Nov.
Distillate fuel oil output (bbls.)
—Nov.
Residual fuel oil output (bbls.)
Nov.
Stocks at refineries, bulk terminals, in transit, in pipe lines—
Finished and unfinished gasoline (bbls.) at
Nov.
Kerosene (bbls.) at
-J,
:
Nov.
Distillate fuel oil (bbls.) at
Nov.
Residual fuel oil (bbls.) at
Nov.
2
2
2
2
2
117,853,000
26,620,000
2,007,000
12,477,000
7,835,000
2
172,626,000
35,235,000
gallons each)
42
Crude
-
stills—daily average
to
runs
Gasoline
(bbls.)
(bbls.)
output
.
6,777,100
7,021,650
6,998,200
7,670,000
*
7,697,000
26,687,000
26,433,000
2,096,000
2,311,000
13,268,000
Steel
7,561,000
25,931,000
IRON
ingots
AND
steel
and
158,685,000
48,071,000
2
for
\
INSTITUTE:
castings
produced
<*
7,742,000
i
T,718,000.
,
026,000
tons)—Month
171,985,000
176,000,000
BUILDING
152,004,000
34,518.000
33,243,000
36,444,000
*157,268,000
151,805,000
47,299,000
Total
October
45,932,000
of
;
.
11,032,000
7,058,028
S.
October
DEPT.
(in
OF
-
' '
-
Revenue
1
3
816,303
815,004
667,997
683,323
685,394
i,405
1 225
Office
$350,139,000
$390,230,000
Nov.
8
168,082,000
165,918,000
211,356,000
Nov.
8
112,932,000
184,221,000
178,874,000
$267,920,000
162,168,000
105,752,000
Nov.
8
97 772,000
166,045,000
151,207,000
62,163,000
.-Nov.
8
15,160,000
18,176,000
27,667,000
43*589,000
Hospital
Nov.
Nov.
3
3
10,530,000
10,440,000
10,410,000
642,000
640,000
481,000
SALES INDEX—FEDERAL RESERVE
SYSTEM—1947-40 AVERAGE as 100
—Nov.
3
124
128
127
municipal
and
COAL OUTPUT
Pennsylvania
S. BUREAU
(U.
Stores,
warehouses—
INSTITUTE:
output (in 000 kwh.)
(COMMERCIAL
FAILURES
AND
1 INDUSTRIAL)
—
DUN
INC.—
BRADSTREET,
11,522.000
11,487,000
Public
Finished
steel
Nov.
.—
8
::;:v43;42i^;
259
271
207
5.622c
5.622C
5.622c
..Nov.
6
$63.04
$63.04
$63.04
$59.09
(per gross ton)
Pig iron
(per
(E. &
METAL PRICES
—;
Nov.
6
$59.83
$57.50
$56.17
$44.83
—
Domestic
Export
Louis)
(St.
Lead
Zinc
35.700c
39.675c
34.350c
36.975c
43.500C
.Nov.
at—
7
109.750c
112.250c
104.625c
96.250c
7
16.000c
16.000c
16.000c
7
15.800c
15.800c
15.300c
-ftov.
at
(East St. Louis)
at
7
13.500c
13.500c
13.500c
90.73
90.45
91.69
99.04
111.62
101.14
109.79
98.25
99.04
93.52
102.80
98.09
98.25
101.47
101.47
-Nov. 13
100.49
100.32
.Nov. 13
98.25
.Nov. 13
92.79
.
YIELD DAILY AVERAGES:
U. S. Government Bonds
98.25
106.21
3.26
3.17
3.28
3.81
3.29
4.22
4.20
4.17
3.86
—Nov. 13
3.96
3.85
3.85
3.81
3.78
3.75
-4 Nov.
13
£ov*
sales
3
£ov*
Number
of
3
Nov. 3
Nov-
—
dealers
Customers'
9
97
95
401,797
503,380
109.48
109.49
MEMBERS
OF
'
109.18
973,024
1.326,602
755,729
690,029
6,587
6,038
918,082
6,282
749,142
683,991
911,800
$37,294,134
$34,093,982
$47,355,344
$36,935,557
205,480
157,590
228,610
167,970
205,480
157,590
228~610
167~970
481,950
479,170
604,320
423,860
„
-
.
S.
Average
MOTOR
(000's
373,320
7,453,500
418,940
53,537,641
.•
^
(AMERIV
:
52,103,708
'
x,':
V-
:
'
,
245,617
268,273
339,461
240,858
213,495
289,128
omitted)
$30,757,000
___
AVERAGE
YIELD
$30,604,000
$30,317,000
OF
4.04
4.03
&
5.83
Tel.)
5.93
4.81
(24)—
3.96
4.79
5.34
•
4.62
4.23
(199)
:
IN
number
Number of
SALES
S.—AUTOMOTIVE
U.
ASSN.—Month
of
of
4.24
4.12
1
:
MANU¬
September:
vehicles—
of
2.73
FROM
275,555
503,276
559,962
203,888
passenger cars
motor trucks-
of
4.16
3.34
4.23
„_
FACTORY
4.17
3.22
(10)
VEHICLE
417,020
457,845
71,299
85,827
91,894
368
429
223
£51,033,000
£17,399,000
£11,190,000
1—
buses—
CAPITAL
10,768.540
8,772.270
8,580,870
7,826,820
11,187,480
9,146,070
379,100
U.
S. GOVT.
—As of
Total
at
,
ISSUES
BANK
1,058,420
185,960
500,980
1,043,320
1,086,950
20
1,386,190
1,143,480
186,980
237,430
193,280
825,600
1,227,810
1,059,100
1,012,580
1,465,240
IN
GREAT
'
LT.D
Month
STATUTORY DEBT
Oct.
face
BRITAIN
of
October
LIMITATION
that
may
be
-
outstanding
220,420
311,300
22,600
15,700
26,300
18,240
279,910
248,940
318,640
222,020
302,510
264,640
344,940
$281,000,000
274,260,859
279,817,534
89,397
85,023
48,069
$275,372,172
$274,345,892
$279,865,604
457,604
459,423
477,740
$274,914,567
$273,886,458
$279,387,864
3,085,432
4,113,542
1,612,135
236
237
*232
234
236
228
178
230
208
275
—w
$278,000,000
by
263
the
,
public
gross
owned
not
debt
and
guaran¬
240,260
229,470
teed obligations
outstanding public debt obli¬
gations not subject to debt limitation
—
—
Deduct—otner
611,563
outstanding
Balance face amount of obligations, issuable
rVup<fer,above authority————————
406,350
Oct. 20
Oct. 20
83,770
64,720
44,870
504,230
453,442
531,835
417,730
583,320
537,212
596,555
462,600
1,718,960
1,627,892
2,309,053
1,874,000
287,650
286,450
328,450
256,399
1,685,130
1,527,982
2,078,285
1,698,850
Crops
Oct. 20
1,972,780
1,814,432
2,406,735
1,955,240
Commercial
79,090,
364,152
501,050
PRICES
RECEIVED
NUMBER
TURE
All
—
farm
BY
U.
—
S.
1910-1914
FARMERS
DEPT.
=
OF
100—As
—
INDEX
AGRICUL¬
of 'Sept.
15:
products
—:—
fresh
vegetables,
Cotton
Feed,
114.9
6
6
87.7
Nov.
6
102.6
80.8
foods
,
.
.
$278,000,000
275,282,774
—__
1,252,380
254,190
Nov.
L~_
"
(000's omitted):
31
amount
time—.—
Outstanding—
Total gross public debt
Guaranteed obligations
Treasury
any
Food
products..
123.0
-—Nov.
6
115.2
111.2
87.9
88.9
85 2
102.6
104.1
99.0
80.5
87.6
75.6
123.0
122.9
119.1
114.9
grains and hay
Fruit
Oil-bearing
crops
Potatoes
—
Livestock
Wool
4
197
178
218
214
210
208
249
246
161
203
145
455
451
437
238
236
264
256
249
254
259
251
172
171
191
231
232
240
238
animals
Poultry and
;
1.—
Tobacco
Meat
277
196
234
;
222
233
—
grains
Dairy products
^Includes 1,018,000 barrels of foreign crude runs.
tBased on new annual capacity of 128,363,000 tons
1, 1956, as against Jan. 1, 1955 basis of 125,828,319 tons.
tNumber of orders not reported since Introduction of
Monthly Investment Plan.
42,087,772
$690,493,000
■
373,800
8,201,770
Nov.
•Revised figure.
43,009,663
$719,799,000
53,368,640
_
FACTURERS'
NEW
DEPT. OF
commodities
of Jan.
44,503,331
of
(15)
Number
100 ):
and
STEEL
incl. Amer. Tel.
Oct. 20
sales
other than farm
consumers—
omitted)—____
customers—month
(125)
Oct. 20
purchases
commodities
Average=100—
(25)
Number
Commodity Group—
All
31
(not
Insurance
Total
Total round-lot transactions for account of members—
Farm
(000's
ultimate
WEIGHTED
—Oct. 20
Total sales
Processed foods
2,258,000
~
(tonnage)—estimated
Oct. 20
:
=
RE-
,
STRUCTURAL
Oct. 20
—
(1947-49
SALES—FEDERAL
Grand total
sales
U.
41,825,000
2,671,000
$735,869,000
PLANTS
Oct. 20
Oct. 20
Oct. 20
Total sales
All
Banks
4,634
Oct. 20
I
—
40,320,000
3,045,000
adjustment
August
Aug.
Utilities
741,158
Other transactions Initiated off the floor—
—
of
from
Total
purchases
LABOR
of
the floor—
.WHOLESALE PRICES, NEW SERIES
47,880,000
f
122
Industrials
736,524
Oct. 20
Total sales
130,640
128
Railroads
-Oct. 20
—Oct. 20
sales
sales
135,756
100 COMMON STOCKS—Month of October:
$50,879,324
Oct. 20
Short sales
Other
129,253
INSTITUTE OF STEEL CONSTRUCTION)—Month of September: Contracts closed (tonnage)—estimated
973,161
$72,812,006
—Oct. 20
Oct. 20
—*
sales
Total sales
Short
400,902
107.12
(SHARES):
Short sales
Total
531,542
452,074
TRANSACTIONS
Total sales
Other
993,961
587,830
OF MINES)—Month
CAN
ON THE N. Y. STOCK
Total purchases
Short sales
$1,525,503
892,662
*129
FABRICATED
103
Oct. 2U
Oct. 20
0ct- 20
sales
-
607,499
October:
MIDLAND
on
$1,480,492
of
August
sales-
Other transactions initiated
15
*131
.Month
725,673
0ct' 20
SALES
19
MONEY IN CIRCULATION—TREASURY DEPT.
• <
shares
ACCOUNT
Other
36
490,515
$59,589,680
ROUND-LOT TRANSACTIONS FOR ACCOUNT OF MEM¬
BERS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS:
Transactions of specialists in stocks in which registered—
Total purchases
—Oct.
Total
297,935
°ct- 20
STOCK
52
437,655
280,809
Oct. 20
sales
Total round-lot
Short sales
Other
376,835
278,432
1,044,342
on
Round-lot purchases by dealers—
Other
240,275
Oct. 20
Oct. 20
Short sales
FOR
372,488
282,327
$57,470,360
*
by
EXCHANGE AND ROUND-LOT STOCK
31
68
129
As
X
other sales
TOTAL ROUND-LOT
STORE
seasonal
MOODY'S
(customers' purchases)—t
dealers—
Number of shares—Total sales
of
420.4
0ct- 20
Dollar value
sales
Month
—
Kilowatt-hour sales to ultimate
397.6
418.2
422.3
ACCOUNT OF ODD-
shares
Round-lot
97
49
EDISON ELECTRIC INSTITUTE—
-
SPECIALISTS ON N. Y. STOCK
SECURITIES EXCHANGE COMMISSION:
by
123
.
123
AND
Odd-lot purchases by dealers (customers' sales)—
Number of orders—Customers' total sales
Customers' short sales
Number
3.38
of
Shipments
Dollar value
Other
o
—n°v-
DRUG REPORTER PRICE INDEX—
—
524
EN¬
Number of ultimate customers at Aug. 31—
100
70
i36
.
Without
3.21
Unfilled| orders (tons) at end of period
=
615
$1,878,341
1,141,589
736,752
SYSTEM—1947-49
Month
Revenue
DEALERS
28
78
139
Adjusted for seasonal variations
3.27
3.78
—
EXCHANGE
3.86
3.97
Nov. 13
.Nov. 13
•
NATIONAL PAPERBOARD ASSOCIATION:
Orders received (tons)
Production (tons)
Odd-lot
.
.Nov. 13
AVERAGE
31
3.58
-Nov. 13
LOT
SERVE
3.18
3.86
DEPARTMENT
::;T,.3.08
3.68
Aa
STOCK TRANSACTIONS FOR ODD-LOT
40
212
"
19
—
and lignite (net tons)
Pennsylvania anthracite (net tons)
3.28
3.57
3.73
1949
2.84
3.81
3.86
OIL, PAINT AND
35q
4j
66
,
Bituminous coal
3.66
——
379
229
of October:
108 16
109.24
3.87
activity
*
.
99.04
3.72
Percentage of
22
44
I
CONSTRUCTION
(BUREAU
100.00
3.66
COMMODITY INDEX
1 227
'25
122
—.
development
Federal
COAL OUTPUT
99.52
—Nov. 13
Group
;
Utilities Group——
11
1 417
585
municipal—
96.69
-Nov. 13
MOODY'S
and
98.41
-Nov. 13
Public
12
73
construction
State
99.52
Average corporate
Industrials Group
:
Public construction
96.54
Aaa
Railroad
75
323
143
NEWS-RECORD
98.41
-Nov. 13
Baa
39
85
30
omitted):
construction—
.Nov. 13
BOND
MOODY'S
40
(000's
S.
.Nov. 13
*
437
41
public
.Nov.13
Group _—
Utilities Group
Industrials Group
32
132
355
371
107.80
93.08
U.
Private
107.98
102.96
.Nov. 13
Railroad
;
i—
ENGINEERING
October
Baa
480
'
'25
institutional
and
GINEERING
95.50
-Nov. 13
Public
All other
CIVIL
Total
corporate
Average
21
-
227
Conservation
13.000c
-Nov. 13
-Nov.
MOODY'S BOND PRICES DAILY AVERAGES:
U. S. Government Bonds
44
148
15.500c
15.800c
27
49
1 375
Public service enterprises
42.800c
34.700c
•
—
York)
at
(New
Lead (New York)
35.700c
7
-Nov.
at
refinery
tin
Straits
7
Nov.
30
j2
.L
Sewer and water
,NoV.
at.
refinery
45
30
41
•
Other nonresidential building
Electrolytic copper—
fio
49
85
i._
•
Military facilities
Highway
J. QUOTATIONS):
M.
construction
Hospital and
'
ton)
gross
196
74
348
-
Educational
;V:o:^:;5.174C
6
"
Scrap steel
.
~
telegraphutility—
Industrial
..Nov.
(per lb.)__
l>
and
public
building
Nonresidential building
IRON AGE COMPOSITE PRICES:
224
122
Residential
&
106
200
474
All other private—
10,878,000
11,300,000
30j?
127
jgj
27
1
-r
Railroad
Nov. 10
2g8
31
~
:
Z?ln„co?iu?uctlon
utility
Public
ELECTRIC
Electric
219
7c
~
Other
276
49
and
Telephone
721
232
building
institutional
Social and recreational
128
33
7^0
130
Miscellaneous
lignite (tons)
anthracite (tons)
11K
'
157
*
garages
Religious
DEPARTMENT STORE
EDISON
1
Other nonresidential
OF MINES):
and
coal
Bituminous
,
"
793
10,194,000
498,000
State
as
*
Educational
±
construction
Public
40"'
287
and
estauranjts;
$281,014,000
construction
1,360
'<
41
*
buildings
8
private
i,509
-
274
Nov.
construction
S.
U.
2,810
134
:
Industrial
Commercial
NEWS-RECORD:
Total
$4,037
2,833
1175
^
'
$4 350
1,350
building (ponfarm;—
dwelling units*.
Nonhousekeeping —1
Nonresidential building (nonfarm;
804,261
>
2,751
Residential
ENGINEERING
CONSTRUCTION
ENGINEERING
CTVIL
800,272
663,919
3
freight loaded (number of cars)
Nov.
freight received from connections (no. of cars)—Nov.
Revenue
7,378,247
'
-
$4>126
___
Additions and alterations
ASSOCIATION OF AMERICAN RAILROADS:
10,501,050
5,539,915 '/
millions;:
construction
construction
New
*10,422,659
(net ?tons)—
CONSTRUCTION—U.
new
Private
151,988,000
47,493,000
of
of
steel
products
Month of September—
-
'■
11,691,000
2,680,000
12,339,000-
(net
Shipments
LABOR—Month
2
2
STEEL
eggs
|
Volume 184
Number 5586... The Commercial and Financial Chronicle
'
(2111)
Continued
from
8
page
Dealer-Broker Investment
Halsey,
ing
literature
American-Marietta
ment
American
11,
Research
*7*7
111.
and
CorpL^ Analysis— H.Street, New York 4f N. Y.
\
7
writers
v
«.
1'
,
Carpenter Paper Co.—Memorandum—Kidder*
^
.17
Wall
Street.
memorandum
Diebold
York
New
Eli
on
5,
Lilly
N.
Net
the
Co.
Investment
Plans—Booklet—FIF
to
a
National
..*
cular—Wm. H.
Chicago ,3,
Union
Life
General
Building,
vestment
New
N.
4,
1,
Stone
issue
&
Company
Line
Pipe
King
73
Street
West, .Toronto
Ling
Electric
Report
—:
Marchant
Street,
circular
.
William
York
New
Street,
N.
5,
K. /Shields
Montgomery Street, San Francisco 6,
Glass
Illinois
Owens
in
1956,
\
6, N. Y.
V*
R.
-Pepsi-Cola Co.—Bulletin—J.
Chemical
31,
the
12
derived
was
that
operates
bus
of
Transport
in
areas
&
The
a
.
delaware,
Board
regular
cents
per
payable
holders
of
no.
Directors
30,
has
J
Mountain
Chairman
Weir
Young,
36
Pearl
Street,
the
DIVIDEND
No. 130
.
7
(Special to The Financial
1956 to shareholders of record at the close of
is
MIAMI, Fla.—Henry J. Kryszak
now
connected with Columbia
of Flor¬
Securities Company Inc.
ida, 3839 Biscayne
Boulevard.
I
regular quarterly dividend of
two
Hartford
cents
($1.02)
Cumulative
per
share
Convertible
Calvin
and
son
been
Fla.—Donald
added
Morton
to
C.
the
with
350
SoiJTBern
First
holders
of
record
at
the
close
of
NOTICE
Horton
and
Robert
have become associated with Wil¬
son,
Johnson & Higgins, 300 Mont¬
gomery
Street,
San
Francisco
Mr.
Horton
Kaiser &
members
Stock
was
of
^
rec¬
1956, also
a
($2.00)
dividend of Two
Seventy
ber
PUNTA ALEGRE
SUGAR
and
CORPORATION
Board
an
of
share
of
( 70<f)
per
Cents
is
dividend
the
of
$.50
This
the capital stock of
Corporation,
payable
at
One
Dollar
to
pay¬
stock¬
of record December 17,
makes
total
dividends
declared in 1956 of Five Dollars
($5.00)
the close
November
and
1956.
per
on
business
of record Novem¬
1956
January 4, 1957
holders
year
1956 to
Thirty Cents ($1 JO) is
able
Directors has
additional
19,
per
$12JO
par
value
share.
20,
M. W.
1956.
WILLIAM
Corporation,
WaSdell
for¬
was
& Reed, Inc.
now
©
November
C.
8,
DOUGLAS,
-
URQUHART,
•
,
Chairman
Treasurer.
November 7, 1956
1956.
228th CONSECUTIVE CASH
■
DIVIDEND
A
-
,
with A. M. Kidder
& Co.,
dividend of twenty-five cents.
($.25) a share has been declared
1957,
139 East Flagler St.
TENNESSEE
the
stock of Burrouchs
Corporation' payable Jan. 21,
upon
at
to
& GAS
shareholders of record
TRANSMISSION
the close of business Dec.
21,
COMPANY
1956.
Form Gem States Brokerage
IDAHO
States
formed
FALLS, Idaho
Brokerage,
with
Inc.,
offices
at
—
has
539
Gem
been
East
rities business. Officers are Charles
Sheldon F. Hall,
Vice President
and
M.
McClure, President, and E. F.
McClure, Secretary.
AMERICA'S
LEADING
Secretary
TRANSPORTER
The
Detroit, Mich.
Nov. 8,1956
DIVIDEND
NO.
Burroughs
37
TEXAS
OP
NATURAL OAS
regular quarterly dividend of 35c
share
Stock,
Second Street to engage in a secu¬
with
extra
stockholders
December 14, 1956, to stock¬
associated
the
I
December
payable December 10,
of
Exchange.
formerly
Co.
November 19,
which
Strong, Secretary
HOUSTON,
Keitel
F.
payable
Dollars
Company of Boston, Dividend Disburs¬
share
Secretary
-
fourth-quarter divi¬
year-end
ing Agents.
end
Hawkinson,
'
10, 1956 to stockholders of
Checks will be mailed by the Old Colony
Trust
declared
Vice President and
a
:
of Seventy-five Cents (75$)
share,
ord
(Special to The Financial Chronicle)
C.
'•
'
of Directors has
1956.
The
W. E.
Board
declared
of record at. the close of business November 8.
Transfer books will not be closed.
MIAMI, Fla.-r-Henry B. Nelrose
is
SAN FRANCISCO. Cal.—Charles
*
The
Boston, October 98, 1958
holders of record
(Special to The Financial Chronicle)
C.
Two With Wilson, Johnson
DODGE
CORPORATION
per
November 21, 1956.
A. M. Kidder Adds
have
of B.
Houston, Texas
a regular
quarterly dividend of Seventyfive, Cents (7ofi) per share has been declared
payable Novembffr 15, 1956, to stockholders
business
Chronicle)
He
Rbad.
Lincoln
5*
Co.
&
Become
.
Hender¬
Newton
staff
Treasurer
COMPANY
<
(Special to The Financial Chronicle)
MIAMI,
30, 1956.
November 13, 1956.
dollar and
the 4.08%
BEACH, Fla.—Robert E.
has
Morton Adds
C.
December
DAVID S. SHATTUCK
one
on
Preferred
Stock,
$100 par value, of this Company has been
declared, payable December 5, 1956 to share¬
3, Conn.
thtylftvancial
cIobo
the
of
4.08% PREFERRED DIVIDEND No. 10
Co.,
&
stock¬
to
at
'
Levian
merly with
B.
1956
.
'•
DIVIDEND
Checks will be mailed.
MIAMI
of
of business
a
Chicago 4, 111.
50 King Street, West,
(Special to
stockholders
Fredbrick D.
Joins Firil? Southern
Chronicle)
record
dend
business November 29, 1956.
November 7, 1956
With Columbia Sees.
declared
18,
holders
PEPP&R&LU PEPPERELL
Board-
regular quarterly dividend of fifty cento
(50c) per share on the issued and outstanding
common stock, $10 par value, of this
Com¬
pany has been declared payable December 21,
a
Street,
yet exchanged un¬
Company's Exchange
May 19, 1953.
dividends
are
payable
PHELPS
of
a
California—Memorandum—Charles E.
of
Associates,
&
Thenebe
Company, Limited,
Canada.
Corp.
Ocean
Trans
&
Ont.,
Toronto,
not
December
McCleney, Treasurer
TOY
Prescot Ave.
Par
COLE.
—MFG. CO.
COMMON
Pipe Line Company—Analysis—McLeod,
Oil
1711
on
(no
the
30, 1956.
D.
share
per
Stock
cents
Public
to
TEXAS
declared
^ALUS-CHALMERS
Seventh Street, Los Angeles
Trans
1956
IfABPJCS
1, Texas.
Company—Analysis—Holton, Hull & Co., 210 West
14, Calif.
Townsend
common
Com¬
Instructions dated
COMPANY
York- 5, N. Y.
120 Broadway, New
Inc.,
Common
(25c)
MANUFACTURING
Memorandum-— Cruttenden,
—
cents
.
Co.—Memorandum—Walston
Bearing
Roller
Timken
Co.
South La Salle
209
Co.,
on
15.
per
Stock
,
the
dividend of twenty-
a
five
($.02) per
stock payable.on Decem¬
Richard
Co.—Memorandum—Rauschei^ Pierce &
Petroluem
has
(1214c)
of
.
Also in the letter are data on American
Corporation, Rudolph Wurlitzer Corporation, Canadian Pipelines and Petroleum, Mississippi Valley
Gas, Bank of the Southwest, Tennessee Gas Transmission
Company and Western Natural Gas.
&
Directors
has
twelve
1956,
SYLVAN
Supply
Podesta
ber
61
7. Houston 2, Texas.'
National
of
of
Common
Value)
and
pany,
der
DIVIDEND
record November
quarterly
dividend
of
20
share on the common stock,
November
National
These
Board
the
on
Par
Value)
share
inc.
($1
Directors
cents
to stock¬
of
record
November
21,
1956.
Transfer books will not be closed.
-
Materials Corporation—Data in monthly "Mickle
Investment Letter"—Mickle & Company, Electric Building,
Texas
Second
DIVIDEND NOTICES
The
of
dividend
a
one-half
the
Co.,
Bank Building.
7
Co., Mercantile Bank Building, Dallas
'
added to the staff of
&
TEXAS TOY
NATIONAL SHIRT SHOPS
Board
share
Met-
Jersey
"T
The
and
(Special to The Financial Chronicle)
7-
of
Staff
AKRON, Ohio—Jerome B.
system
New
TECHNICOLOR, Inc.
was
comprehensive
a
transportation
serves
Public
to
quarterly dividend of two
Strategic
Hospital
Bache Adds
Coordinated
Co., 115 Broad-
7
26,
Hickey,
President
November 14, 1956
declared
Bache
stock,
dividend
Williston &
November
£
months ended
68%
*
Company.
Gas
Natural
LOUIS,
N. Y. * Also available -is. a bulletin on
York 6,
New
way,
V Stauffer
Pioneer
(Special to The Financial Chronicle)
ST.
zel has been
Matter & Co., 45
7
7
business
Wm. M.
Joins FIF Staff
capital
affiliated companies
111 Broadway, New
on
Corporation,
Penn-Texas
—Secretary,
York
company's total operating
Calif.
•
the COM¬
on
1956.
mer, Pollacchi & Co., 84 State St.
I
share
STOCK, both payable
holders of record at the close
of
formerly with White & Company.
the
DIVIDEND NOTICES
Lynch, Union Trust Building, Pittsburgh 19, Pa.
Joseph
H.
have become associated with Pal¬
Gas
operating public utility
•'7v>
Co.,
Co.—Memorandum—Moore, Leonard
Penn-Texas Corporation—Information
and
M.
Monahan
FIF
Y.' 77.-.
Aviation—Bulletin—Dean
American
Grande
Anthony
—
share,
per
December 14, 1956 to stock¬
(Special to The Financial Chronicle)
Alsup is now connected with
Management Corporation. He
Corporation—Analysis—Winslow,Cohu & Stet¬
26 Broadway, New York 4, N. Y. ,. ;'7'\
son,
i
&
MON
cents
extra dividend of 15
an
case.
Electric. &
Can
National
Two With Palmer, Pollacchi
semi-annual divi¬
A.
an
mass
.
.
Resources,-Inc.—Report—G.
Metallurgical
North
Service
10
plus
Mo. —James
is
which
ing Dept. (Room 707), Ira Haupt & Co., 11 Inroad way, New
York 6, N. Y.
.
>
bonds will be redeem¬
new
a
dend of
& Co.
BOSTON, Mass.
Rr-Staats
Dofflemyre
The Board of Directors has
declared
cents per
standing
Company,?-
Coal
loans and the,
William
Co.,
was
The UNITED Corporation
their Philadelphia
office, 1420
Walnut Street. Mr. Scott was for¬
its electric operations and
about 32% from its gas operations.
The company owns all of the out¬
& Co.,
Alsafavailable is a
Y.
N.
5,
Traer
Truax
on
York
New
Thomas A.
of
from
Corporation,
"■
..
Marmon-Herrington Company, Inc.—Analysis—Unlisted Trad¬
15
the
revenues
Inc.—Analysis—GloreTjForgan
Calculators,
Wall
40
including
&
He
mem¬
York Stock Ex¬
merly with Bache
Eastman,
Securities
DIVIDEND NOTICES
has become associated with
their organization as
co-Manager
Service
Investing
General
—
80 Wall Street, New York 5, N. Y.
r
New
announce that
with
now
Co. and Marache,
Company.
7
Of
and
Canada.
\
&
&
cor¬
purposes,
is
Union
3115 Wilshire Boulevard.
company engaged in the electric
and gas business in New
Jersey.
Ont.,
1,
com¬
be used for general
Aug.
Limited,
Company
Dillon,
of. Scott
shares -of
of the
ANGELES, Calif.—Gordon
Gillies
Amott,
—
Co., Incorporated,
of the
change,
•
Co.
;
Report —Wisener
—
sale
bers
.
stock, will be added
the general funds
Public
.
the
accrued interest in each
"Monthly In¬
257Broad Street,
■£*,
.
Baker &
special redemption prices re¬
ceding from 101.26% to par, plus
of
Co.,
Y.
C.
at
^
Texas.
in current
Letter—Hayden,
York
Interprovincial
~
Dallas
Electric—Analysis
(Special to The Financial Chronicle)
LOS
31,
Amott, Baker & Co.
PHILADELPHIA,7Pa.
bonds
able at regular redemption
prices
ranging from 106.26% to par, and
Association
7
: • '
'• 7'Jk; •
Company—Bulletin—Eppler, Guerin & Turner, Fidelity
Frito
common
The
7
111.
Aug.
formerly with
payment of a portion of the com¬
pany's construction program.
Corpora¬
(Fantiie Mae)—Cir¬
Tegtmeyer & Co., 39 South fc.a Salle Street,
Mortgage
the
additional
repayment of bank
tion, 950 Broadway, Denver 3, Colo.
Federal
of
year
pany to
Organiza¬
Management
of
from
proceeds
porate
Conklin
Witt
tion, 100 Broadway, New York 5, N. Y.
FIF
its
:
*
Incorporated—Bulletin—De
is
ended
year
With Eastman, Dillon
t
Thomas Scott Joins
bonds, and from the sale later
this
|»eabody & Co.,'
Alsoavailable
Y.
award
won
competitive ■ sale
yesterday
(Nov. 14) on a bid Of 100.51 %.
•
7 7:
' 7
offering
at
.
; States Envelope.
;
bank¬
bonds, 4%% series due Nov. 1,
1986, at 101.257% and accrued in¬
terest, to yield 4.30%. The under¬
;
Development
Hentz & Co., 60 Beaver
is
-the
City,
Wilmington,
and
1956, the company had total oper¬
ating revenues of $29,788,691 and
net income of
$32,349,826.
is
(Nov.
15)
$50,000,000 of
Public Service Electric & Gas Co.,
first
and
refunding
mortgage
Botany Mills—Review—Lerner & Co.; 10
Post^Office Square,
Boston 9, Mass.
Also availale- are reviews
Indian Head
Mills,
Sightmaster
Corp., Riverside
Cemept and "United
-
which
For
Inc.,
investment
an
syndicate
Co.
&
Philadelphia
(Del.).
today
Company—Nine months' Report—Depart¬
American-Marietta Company, "lQC7East Ontario
11,
Street, Chicago
Stuart
of
manager
Recommendations &
and extends into Newr York
Halsey, Stuart Group
Offers Utility Bonds
.47^
has
been
declared
on
payable January 2,
holders of record
on
the
per
Common
1957 to stock¬
December 7, 1956.
J. EL IVINS, Secretary
Chronicle
The Commercial and Financial
43
..Thursday, November 15, 1956
.
(2112)
$170
BUSINESS BUZZ
million
and
month,
a
\
agreements to purchase not yet
processed aggregated some $132
million. Experience has shown
Wasmngton
Behind* the -Seen® Interpretation*
only about 10% of offer¬
ings fail to become eligible.
The
point is that FNMA is
obliged to accept qualified of¬
ferings. Therefore in a compar¬
atively short time, FNMA pur¬
-
And You
Capital
from the Nation's
that
>
•
t
•
chases
will
crowd
volume
a
of
$1 billion.
The
WASHINGTON, D. C. — In
the Administration took a
feeble
relatively
build
toward
step
government. Whether that lit¬
tle step will be swamped utter¬
ly or be allowed to live
is
something which will be de¬
cided in a few months.
-'
This feeble step relates to the
Federal National Mortgage As¬
would
to
almost gen¬
market
for
VA's,
dependent
..
FHA's
and
ital
limits
lion.
the government
lias become the
"market" for
considerable quantities of those
same
mortgages it underwrote.
the remaining
the neighbor¬
billion on hand
operations prior to No¬
reading
last
At
balance
from
in
was
of
hood
$2.5
vember 1954. These
acquisitions
the
about because despite
came
government
-
of
pools
for
underwriting,
vari¬
the
another,
and
reason
ous
savings
money
months
out of
contin¬
these gov¬
ernment-sponsored liens.
..
;
for
available
not
were
of 1954.
With the Housing Act
V
it
was
ondary
"should
proposed that this "sec¬
mortgage
market"
thereafter,
with
one
Important exception, stand on
its own financial feet. It was
that
every
lender
provided
wishing to sell his FHA's and
VA's to FNMA should be re-_
thereafter to purchase
3% of the principal value of
FHA's and VA's so unloaded on
lately,
for
other
of
as
purposes
would
ury
the
would treat
as
VA's
the
new
was
Except
for
assistance functions,
of
up
FHA's
and
day in the Great
some
Hereafter to become
a
thing of
stock
eral Motors, or the corner pants
under
the
3%
arrangement,
Uncle
investment—
come
day — would be retired.
There was no ironclad require¬
be
done
by
any
ratio to
private capital subscribed. This
time
given
a
now
Jike
or
in
any
oversight
little
which
is
proving to be cogent. It is
a
New
Year's resolution
swear
of
the
free
billion
$2.5
(The
of
market.
portfolio
acquired before the New Year's
1954
was
also kept separate in
"Management
and
new
reason
the
shoot could not sup¬
Strikes at Program
Market
steps
taken
go to the market for its money,
selling its own debentures.
to
ever
stand
its
on
the
Another step
own
a
from 92
to 94.
"standby
be
commitment"
transferred
via
FNMA
that
house
the
a
at
the
favorable
and
on
the
dollar
on
VA's,
ernment groove
a
used.
been
a
a
standby
However,
in the gov¬
regard the stock
de fncto discount.
purchase having
reduced from 3 points to 1
capital
point, the practical discount is
lowered accordingly. -
Match
Olin Oil & Gas
Will
Anheuser Busch
those
in
market,
the
know
There
about
housing
junk it.
which
mort¬
-
little
be
can
tration will
doubt
path the Adminis¬
take.
The
Adminis¬
of
standby
of
by
toward
in
in
in,
tre¬
under
alone
of
an
concept
the
will
being
be
This
scarce
the
be
will
money
abandoning the
the privately-sup¬
means
concept
of
ported "secondary market" and
returning FNMA to its function
being nothing but a window
of the Treasury.
conservative
the
pitched
genuine free
to supply
a
White
in
Congress
House
on
tive merchandise.
works, and
no
So long as it
longer, will the
[This column is intended to
of
being
October,
money
on
so
the
re¬
flect the "behind the scene" inter¬
pretation from the nation's Capital
the "Chronicle's"
coincide with
views.]
own
With Grimm & Co.
(Special to The Financial Chronicle ■
ST. PETERSBURG, Fla.—George
T.
has
Mason
Grimm
joined the staff of
Co., 532 First Avenue,
&
North.
With Federated Plans
(Special to The Financial Chronicle)
TAMPA,
end
sells
conserva¬
Administration stay sold.
Alfred
By
there
mortgage
subordinated
demand.
and
VA
and
next year.
purchase
commitments,
-
that
country
FHA
and may or may not
develops
what
which
market
the
of
"sec¬
This, regard¬
volume.
threatens
FNMA
the
and
flowing
are
mendous
less
ministrator, has already assured
loans, at 97%, is above
Whelchel
Fla.
Paul VW.
—
Richard
G.
are
now
Pain,
Philip
and
E.
with Federated
Plans, Inc.
under-priced government-spon¬
offerings to FNMA
sored
Bull Volume
Hence
VA
offers
cents
of
kind
the
market" envisaged
Housing xAct of 1954.
the
lenders who operate
The
Colorado Oil & Gas
6
sale
the
such
under
house
commitment, if
was
now
volume
enormous
under
and
dollar
how¬
procedure,
FNMA's
average
price throughout the continental
United
States
for
V/>% FIIA
price.
the
standby
Actually,
buyer for
more
a
liberalized
ondary
the dollar instead of 92 cents
find himself
an
funds
the dollar, in ca«e the builder
cannot
develops
it
out
cents
on
speculative
gage money, or
This is what happens when a
what
of
FNMA already is finding
is going to have to pay
ever,
points
instead of 92 points, or 94
for
of
commitment
or
govern¬
94
at
Con¬
comes,
Administration
a
ket" concept as enacted in 1954
and "dry up" this official source
High
the
under
perma¬
on
the
to
the
bridge to cross. That
bridge.will be either to hold
tight on the "secondary mar¬
to
over
licking, or the
stuck With hold¬
Regardless
from
FHA-insured
financing
ment
turned
great, a
Purchases
VA-guaranteed house he builds
nent
be
lender being
ing the loan.
A builder gets a
FNMA that the
can
FHA and VA loan
an
can
ing too
feet
to raise the
was
'
tration, through Albert M. Cole,
it
reasons
prove
standby commitment
price of
September to "help the mort¬
gage market" for the FHA's and
little substantive
money
Housing and Home Finance Ad¬
time to
FNMA, without the builder tak¬
in the free {market for funds.
on
by
this
will
mechanical
which
eternity the time when FNMA
could
higher
new
them with
extends into a practical
course,
mwchase
Universal
re-
placing
VA's with FNMA
1% from 3%. This, of
in
very
purchase
lender
a
Eisenhower Administration late
theory, also, FNMA would
government-
this up, but
there
are
signs that builders
can
persuade approved mort¬
gage
lenders to accommodate
to re¬
was
the
take
Theoretically the builder
would take a licking of 8 cents
port this burden.)
the
down
steps
capital
of
FHA's
a
Liquidation"
fund for the obv:«ous
tender
the
ouired
.
the
of
One
duce
believe
business
mortgage
and
the
on
resolution of the Housing Act of
In
In
in
Gen¬
supply and cost
by the
money
AT&T,
off alcohol some future
New Year's.
Go To
alongside
presser,
capital
that this
ment
erned,
couple
a
private enterprise system.
"sec¬
to be kept in a separ¬
bulling
VA's
legally
"secondary
a
time
this
and
gress
standby
with the low¬
ered
stock
purchase require¬
ment, will eventually lead to an
enlarged placing of the govern¬
ment;- sponsored
liens
into
FNMA.
For
highly
technical
did go a long way
doom of this timid
little 1954 movement toward
a
market" for FIIA's and
was
compartment.
the
seal
to
FNMA
it
hand,
other
the
On
debt
transaction
and
avoid the unpleasant admission,
to some extent, of the subsidynature of the operation.
ondary
as
the
few
a
be
raises
it
will have
commitment price
of these steps
public
Nevertheless,
that
loans.
borrow, from the Treas¬
which
the
push
government capital. In theory
the common stock of lenders
Sugar's
to
to
it now—I thought
the DIVIDEND 135
want
and
prevent the downward drift
in the volume of money avail¬
able
for
these
under - priced
various special
without putting it into
appropriation
an
purchase
is
wanted
I
done—if indeed it could be done
—to
the
supply and demand and be gov¬
increased
dollars
9
was
dollars!"
for
money
the
new
PRICE
think
don't
"Oh!—Well—I
the
hous¬
as
where
words,
the special
the
When
the generous terms
insurance of "hous¬
Administration
out
for
the Treasury.
ing for the elderly."
of
initially primed
set-up with $92 million
business
whether
tary housing (at first, at least),
In
will
through the sale of debentures
or
"temporarily" borrows as it
is
still permitted to do, from
ing in Alaska and Guam, mili¬
ate
The Treasury
such
marketwise,
to the
FNMA.
continued as a
assistance" agency to
a
"market," which
means to provide the money via
the
Treasury, for certain
fa¬
vored
types of insured mort¬
gages that obviously were not
expected to stand on their own
quired
government, in the stock
the
newly - reorganized
was
"special
provide
in
investment
uous
within
FNMA
liens,
because
its
loanable
authority by statute
will be used up, regardless of
is
exception
important
that FNMA
offered
C
bil¬
sur¬
sponsored
Exception
and
$1
limitation
one
Therefore,
private
government
market'.'
feet
second¬
dollar top vol-
approximately
This
This
million.
FNMA
a
vives despite other vitiations of
supervision.
The
$11
new
the concept.
gages
In the process
of
ume
become
benign
a
the
market to
ary
to all practical pur¬
would
poses
that
is
times
<
the market and if need be
limited
by the capabilities of»
FNMA in the free market, and
under
market
10
about
is
an
upon
the agency
to
capital.
Treasury preferred capital is
$93 million and "private" cap¬
stock, the initial $93
retired,
FNMA
secondary
uine
secondary
limited
was
become
would
still remaining of
"private" aspect of
thing
FNMA purchases by statute are
time it went to
well. Eventually as Treasury
the
which the Treasury in¬
sured or guaranteed through the
medium of these agencies.
One
the intended
this
every
preferred
million,
ing (and also often selling) with
Treasury cash the very same
Federal Housing and Veterans
Administration
housing mort¬
capacity
its
buttress
borrow
sociation, a government agency.
FNMA' for years had been buy¬
Limit Buying
As its
increased
it
capital
would
emerges.
the years
over
private capital.
up
private
v/eaning the speculative homebuilding industry away from a
tittle of its dependence upon the
idea
package
FNMA
1954
liens,
were
hitting
a
rate
of
about
TRADING MARKETS
Botany Mills
Delhi-Taylor
A. S. Campbell Co.
Texas Eastern Transmission
Com.
Fashion Park
Bank of America
Pacific Northwest Pipeline
Pan American
Indian Head Mills
Common
United States Envelope
Morgan Engineering
Sulphur
National Co.
Wagner Electric
Bought—Sold—Quoted
Carl Marks
FOREIGN
tCHERCk, RICHTER COMPANY
SECURITIES
50 BROAD STREET
Member
Bell
Teletype
Midwest Stock
SL 4St.
Louis
2,
&
Co. Inc.
SPECIALISTS
NEW YORK 4, N. Y.
Sightmaster Corp.
TEL:
HANOVER 2-0050
Securities
TELETYPE NY 1 971
10 Post Gffice Square,
GArfield 1-0225
Telephone
Mo.
\
»
LERNER & GO.
Investment
Exchange
320 N. 4th St.
•
Riverside Cement
HUbbard 2-1990
Boston 9, Mass.
Teletype
BS 69
@FedFRASER